What Does It Mean When Your Job Is Exempt?

When you land a job, your status as an employee is likely either exempt or non-exempt. It is important to know what it means to have an exempt job, because some of the rules you may have been used to as a non-exempt (hourly) employee. Specifically, you need to understand how the pay structure works as an exempt employee, because you are no longer paid by the hour.

An exempt employee is also referred to as a salaried employee, and is characterized by a set salary for an employee instead of the more common hourly rate of pay. There are rules regarding what qualifies a person as exempt. According to the Purdue University website, exempt employees "create, interpret, and apply policy, decide what the organization will do," and are generally executive-level positions. These employees must be paid at least $455 per week for a 40-hour schedule, according to the Paychex website.

The benefit to being an exempt employee is that you are not held to certain hours and sometimes, you may not even get in a full 40 on a given week. This is because your job and corresponding salary aren't dependent on working a certain amount of hours weekly; moreover, your positions requires a marketable skill set, experience and commitment to getting a certain job done (which can, at times, mean more than 40 hours in a week).

The most obvious drawback to a being an exempt employee is that you are not paid for overtime, even if the job dictates it. This means that you may be working a 60-hour week for over the course of one project and not see an extra dime despite the long hours. For positions that frequently require overtime, this is a major drawback to the exempt status.

Remember, you don't get overtime, so balance is important. While overtime may sometimes be required, in the general scheme of things, make sure that your workload is balanced with your salary. Also, remember that your employer cannot arbitrarily decide to pay you less on a given week or pay period because you are doing less work or working less hours. The key consideration of an exempt employee is that your salary is what it is because sometimes there may be more work and sometimes, there will be less to do during a given workweek.