Exempt and Non-Exempt

Under the Fair Labor Standards act (FLSA) employees may be hired into either exempt or non-exempt positions.  Positions are classified as either “exempt” or “non-exempt” with respect to eligibility for overtime pay.  The definitions for exempt and non-exempt are provided below.

An exempt employee is one who holds a salaried position that meets specific criteria established by the Fair Labor Standards Act (FLSA).  For example, certain employees who hold salaried professional, administrative, executive or computer positions may be exempt.  Exempt employees are not eligible for overtime pay.  In order to qualify for one of these exemptions, an employee generally must be paid on a salary basis at not less than $455 per week and satisfy the respective tests regarding the content of the employee’s job duties.  The fact that an employee is paid a salary rather than an hourly rate in itself does not relieve an employer of the duty to pay overtime.

A non-exempt employee is one who does not fall into one of the exempt categories. For example, hourly-paid employees who perform secretarial, clerical, technical, trade or service work are classified as non-exempt.  Non-exempt employees are eligible for overtime compensation.  All non-exempt employees are eligible for overtime pay for all hours worked in excess of forty hours in one payroll week.  Overtime pay is calculated at one and one-half times the employee’s regular hourly rate.