Exempt vs. Non-Exempt Employee Classification

Exempt vs. Non-Exempt Employee Classification

Exempt vs. Non-Exempt Employee Classification

Most business owners find it difficult to distinguish between the exempt and non-exempt employees, and it also causes a great deal of confusion between employers and employees. Whether you are entitled to the overtime payment or not (usually means the extra time you work after the standard 40 hours for every week), depending on your exemption position according to the FLSA (Fair Labor Standards Act), remains the primary ambiguity in this regard. However, various other jobs don’t fall under these standards, like agricultural jobs, truck driving, and others, which are usually governed by other law organizations.

Majority of citizens in U.S come under the FLSA and you can either classify them as exempt or non-exempt, depending on the overtime pay regulations. As an amateur, you may not have a clear idea of what category of workers these are, but don’t ponder over it because that’s what we are here for today! We’ll give you a quick breakdown of what rules apply to which workers. So let’s dive right in.

Non-Exempt Employees

If you work as a non-exempt employee for more than the standard time per week, that’s 40 hours, then according to the FLSA policies, you are entitled to extra pay for the time and one-half of the standard hours of overtime work you spend. Concisely, if you are working on the hourly basis and get paid for the hours you work, apart from the standard hourly paid rate, then you are classified as a non-exempt employee. If you are a non-exempt employee, then you will not qualify for the numerous white collar job exemptions. Such employees usually include maintenance, technicians, construction, semi-skilled, blue collar, laborers, and clericals.

Exempt Employees

Such employees don’t get any protection and cover from the FLSA, and this means that they are not entitled to any overtime payments. According to the FLSA, airline and sales employees are exempt, and if you meet with three points, then you are in this category. These are the rules that apply:

  • If you are getting a payment of $23,600 for the year
  • If you get paid on the wage basis (doesn’t apply to people who work on “hourly basis,” like school teachers, and physicians)
  • If you perform duties on the job that are classified as exempt

To qualify for the exempt status, the nature of your job is also taken into account. Typically, the duties of exempt employees are high, and the FLSA splits them into three further categories:

Executive

Employees are exempt from the FLSA policies and rules if they perform duties such as:

  • Supervise more than one employee
  • Work as a manager
  • Having the power to hire, assign tasks, fire and so on.

In most cases, such people are usually considered in charge or the boss of the business or company.

Administrator

For people who have duties that support the business, like public relations, accounting, human resources and payroll staffs, then they fall under this category. Duties must also include:

  • Office work
  • Tasks related to the management or customers of the business
  • Independent discretion and judgment of significant business matters

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