Human Resource Blog

exempt vs non-exempt employee

What is the difference between an exempt and a non-exempt employee?

This is a simple question with a deceptively complex answer.

Under the federal FLSA or Fair Labor Standards Act, a salaried employee can be either exempt, or non-exempt. Exempt employees are paid the same salary every week, regardless of the quantity or quality of work performed. Exempt employees are never entitled to overtime, even if they work 100 or more hours per week.

A non-exempt employee is entitled to overtime when he or she works more than 40 hours in the week. In addition, the employee can be paid less during weeks in which he or she workers less than 40 hours.

Exempt or non-exempt status is determined by a) salary and b) the employees primary responsibilities. In order to be exempt, the employees salary must be at least $455 per week. The FLSA recognizes 5 classes of exempt employees: Outside Sales, Executives, Administrators, Computer Pros and Professionals.

Finally, there is no law that any employee must be treated as exempt. Even the CEO can be paid an hourly wage, if the employer prefers. When an employee is treated as non-exempt, they are non-exempt and are eligible for overtime.