Share This Article:
    

Exempt vs non-exempt: what's the difference between exempt & non-exempt?

Filled-out-Time-Sheet-with-writing-hand-175427831_4256x2832 (1)

 

FLSA overtime laws

FLSA overtime laws in the United States require employers to pay non-exempt employees at least 1.5 times regular wages for any hours worked in excess of a standard 40 hour work week.


What does it mean to be nonexempt?

Employees labeled as “non-exempt” are those whose wages fall below a certain threshold. To date, the overtime income threshold stands at $35,568/year or $684/week. This means that those earning less than $35,568/year or $684/week automatically qualify for time and a half wages for any hour that falls beyond the 40 hour work week.

 

How do job duties affect my non-exempt or exempt status?

If an employee makes more than the $35,568/year threshold, they may still be entitled to overtime pay. If this threshold has been passed, the next step is to assess the duties of the position in order to see if they qualify as a white collar exemption. What are white collar exemptions? These exemptions relieve employers from paying overtime to certain employees based on regularly performed duties. White collar exemptions include: executive, administrative and professional workers.

Executive exemption

To qualify, an employee must meet all of the following criteria:

⇨ Compensation: The employee must be paid on a salary basis earning no less than $684 per week.

⇨ Duties: The employee must routinely perform managerial duties and oversee 2+ full-time employees or full-time equivalents. 

⇨ Authority: The employee should be able to hire, fire, advance, promote or make any change to another’s employee status. This includes employees who can strongly influence another’s decision to alter another employee’s status.

Administrative exemption

To qualify, an employee must meet all of the following criteria:

⇨ Compensation: The employee must be paid on a salary basis (or fee basis as defined in regulations) earning no less than $684/week.

⇨ Duties: The employee’s primary responsibilities must be office or non-manual work directly related to the management or general business operations of the employer or company’s customers.

⇨ Authority: Authority: The employee has the ability to use discretion for important company decisions.

Professional exemption

Professional exemptions can fall into two categories: learned professional exemptions and creative professional exemptions. To qualify as a learned professional, an employee must meet all of the following criteria:

⇨ Compensation The employee must be paid on a salary basis (or fee basis as defined in regulations) earning no less than $684/week.

⇨ Duties:  The employee’s primary responsibilities must require advanced knowledge and should be in the field of science or learning.

⇨ Credentials The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

⇨ Authority: The employee’s position requires consistent decision-making discretion.

 

To qualify as a creative professional, an employee must meet all of the following criteria:

⇨ Compensation: The employee must be paid on a salary basis (or fee basis as defined in regulations) earning no less than $684/week.

⇨ Duties: The employee’s responsibilities are predominantly of creative nature. This includes duties that require invention, imagination, originality or talent in a “recognized field” of art or creativity.

Learn more from the WHD.

 

New call-to-action

Share This Article:
    

Related Posts

The annual open enrollment period is approaching quickly. To help make the process as...

Performance management techniques are changing the way companies conduct performance...

As long as the Affordable Care Act (ACA) is in place, it carries stiff compliance...

Top-talent can be difficult to find and retain. Did you know that replacing a salaried...

Submit a Comment