Labor and Employment

Am I An Exempt Employee or Nonexempt Employee?

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Time Clock and Time Card

The federal Fair Labor Standards Act (FLSA) sets standards for employees' pay, including a national minimum wage and child labor protections. It also requires employers to pay overtime earnings to most employees who work more than 40 hours per week. Many businesses identify their employees as exempt or nonexempt. This classification decides which employees are eligible for overtime pay.

The Act Excludes Some Employees

FLSA overtime rules do not apply to some types of employees. For example, the Act does not cover taxi drivers, babysitters, and many agricultural workers. It doesn't apply to employees covered by other federal labor laws. For example, the Motor Carriers Act governs pay for many truck drivers.

Some Employees Are Exempt

The FLSA also exempts other types of employees from its overtime-pay requirements. It provides employers with rules to decide whether an employee is exempt. The test for whether an employee is exempt depends on three factors: how much the employee is paid, whether the employee receives a salary or an hourly wage, and what kind of work the employee does.

Salary Level and Type of Pay Are Important

An employee who earns more than $23,600 a year and is paid on a salary basis may be exempt. In most cases, an employee is paid on a salary basis if the employee receives a guaranteed amount of money for a work week and the paycheck is calculated on an annual salary amount. If you are exempt and salaried, your employer does not have to pay you anything extra for working more than 40 hours.

Job Duties Matter

To qualify as exempt, an employee must also perform certain types of work. The act has many guidelines governing job duties. Most exempt job duties fall into one of three categories:

  • Executive job duties include management responsibilities and supervising other employees
  • Professional job duties are done by people such as lawyers, engineers, and accountants.
  • Administrative job duties are related to business management or operations

Nonexempt Employees Have Rights

Employees who do not meet the exempt requirements are nonexempt workers. For example, factory workers who are paid by the hour are usually nonexempt. The FLSA requires employers to pay nonexempt employees overtime. In most cases, the overtime pay rate is one-and-a-half times an employee's usual rate of pay for each hour worked beyond 40 hours in a week.

A Lawyer Can Help

The law related to exempt and nonexempt employees and the payment of overtime is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact an employment or labor lawyer.

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Mr. Merritt J. Green | June 26, 2015
6849 Old Dominion Drive, Suite 220
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