Most people who are employed receive some type of compensation for the work that they do. Some workers earn an hourly wage, while others receive an agreed-upon salary that is independent of the exact amount of hours they work. Some of these salaried employees are considered exempt, which means that their duties and compensation are different from those of other types of salaried employees.
The Fair Labor Standards Act is a federal statute that addresses important labor-related issues like child labor laws, minimum wage and overtime pay. All companies, except those governed by their own industry's laws, like railroad workers, are affected by this act and are legally required to comply with its regulations. With respect to overtime pay, the act classifies all salaried workers as either exempt or non-exempt employees.
If an employee is classified as exempt, this means that his job does not qualify him for overtime pay. Therefore, an individual with an exempt occupation cannot be compensated for time worked beyond 40 hours a week, the federally mandated maximum work week for full-time employment before overtime wages are due. Most government jobs state whether or not they are exempt, however other jobs may not, so you may need to inquire before starting a job.
There are three types of exempt employees: executive, administrative and professional. Most professors, lawyer and doctors are considered professionals because of the specialized and highly skilled work that they do. Likewise, such professionals rarely follow a traditional 9 to 5 schedule, since their careers often require additional time and commitment. For most professional, exempt employees their higher-than-average salaries reflect the demands of their careers.
Exempt employees are determined based on a "duties test." This test assess the type of work that is required of a salaried employee's profession. For an executive to be classified as exempt his job duties must consist of the management of his company, the management of at least two other employees and the ability to hire and fire employees. Each exempt type has a different "duties test" that must be met in order to be considered an exempt, salaried employee.