Under the Fair Labor Standards Act, most employees are either exempt or non-exempt. While it is sometimes confusing to distinguish between the two, all employees should be aware of what classification their jobs hold.
Understanding exempt and non-exempt employment sheds light on key aspects of your compensation and working hours.
Exempt
Exempt employees typically receive a fixed salary regardless of the hours worked. This means they are not entitled to overtime pay. However, specific job duties must align with FLSA guidelines to qualify for exempt status. Higher-level positions often fall under this category.
Non-exempt
Non-exempt employees are usually paid hourly and are eligible for overtime pay. If you work more than 40 hours in a week, your employer must compensate you at an overtime rate for those additional hours.
Key considerations for exempt status
Exempt employees must earn a salary above a predetermined threshold set by the FLSA. Additionally, their job duties should primarily involve executive, administrative or professional responsibilities. However, if they spend a certain percentage of their time performing non-exempt duties, they may be eligible for overtime.
Benefits and drawbacks
Being classified as exempt comes with both benefits and drawbacks. While exempt employees enjoy a fixed salary, providing stability in income, they are not entitled to overtime pay while doing their regular work. They receive the same salary, even when they put in well over 40 hours each week.
For non-exempt employees, overtime pay is a significant advantage. Any hours worked beyond the standard 40-hour workweek entitle you to receive additional compensation. This ensures that employees are fairly compensated for their extra efforts.
Understanding these FLSA classifications helps you determine if you are receiving fair compensation for the work you do.
