What Is the Difference Between an Exempt and Non-Exempt Employee?


Quick Answer

Exempt employees are not entitled to overtime pay, while nonexempt employees are guaranteed overtime pay, according to the Fair Labor Standards Act. Classification is based primarily on how much an employee is paid, how he is paid and the tasks he performs.

Continue Reading
Related Videos

Full Answer

The majority of employees covered by the Fair Labor Standards Act are considered non-exempt and are entitled to overtime pay at 1.5 times their hourly rate. Exemptions are exceptions to the overtime pay requirement, and employers are responsible for ensuring they classify their employees properly. In order to be classified as exempt, employees must meet certain criteria. Employees must earn more than $455 a week, or $23,660 a year as of 2015, or they are automatically classified as nonexempt. They must be paid on a salary basis with a guaranteed minimum amount of pay they can count on receiving per week.

In addition to pay requirements, exempt employees must perform job duties that are classified as exempt by the Fair Labor Standards Act. These job duties generally fall under executive, professional and administrative job categories, although some jobs, such as outside sales and computer professionals, are specifically listed as exempt. The job duties performed, rather than the job title, determine whether an employee can be classified as exempt.

Learn more about HR

Related Questions