Exempt & Non-Exempt

What is an EXEMPT employee?

 

An employee who is exempt from receiving overtime pay and is also exempt from minimum wage requirements set by the FLSA. If employee exceeds 40 hours in a workweek, they do not qualify to receive overtime compensation.

 

Employees classified as EXEMPT must meet all of the following requirements:

1. Must be compensated at a rate no less than $455 a week
2. Must be compensated on a salary or fee basis
3. Must perform certain job duties

Each employee should be measured against a three tier test system to determine if an employee can legally be classified as EXEMPT:

 

Test 1. Salary Level – as noted above – must be $455 or higher per week

 

Test 2. Salary Basis – how they’re paid – must be salaried of fee – NOT hourly.

 

Test 3. Job Duties (EXEMPT duties) for each of the following:

• Executives
• Outside Sales
• Creative Professionals
• Administrators
• Learned Professionals
• Computer Professionals

IMPORTANT: There are exceptions to each of these tests so do not assume at first glance that the employee truly is exempt.

 

What is a NONEXEMPT employee?

 

An employee who is covered by the FLSA and must receive overtime pay for hours worked in excess of forty (40) in a workweek. Employee must also be paid no less than minimum wage.

 

Ensure that each of your employees are properly classified by following the FLSA guidelines. Details can be found by visiting the DOL.GOV website.