Job openings are typically posted as full or part time. Often, these postings include the terms "exempt" or "non-exempt" in the descriptions. Full or part time refer to how many hours the employee will work and is typically defined by the business. Exempt and non-exempt refer to the position's qualification for inclusion in the Fair Labor Standards Act (FLSA).
Full Time or Part Time
The U.S. Department of Labor does not make a determination as to what constitutes full or part time employment, nor does federal labor law. Full or part time employment determination, and the meaning of these designations, is completely up to you as the employer. Companies often provide different benefits to full time employees than they do for part time employees, commonly offering vacation pay and sick pay to full time employees, as well as health insurance benefits. You may choose to set a maximum number of hours for a part time employee, or a minimum number of hours for a full time worker.
Minimum Wage and Overtime
The FLSA sets standards pertaining to the minimum wage you must pay for each hour an employee works. An employee covered under this law is said to be non-exempt. Non-exempt employees must also be paid overtime for every hour they work over 40. The overtime rate is one and one-half times the regular rate. If the regular rate is $10 per hour, the overtime rate becomes $15 per hour.
Exempt Employees Definition
Employees exempt from the FLSA do not have to be paid minimum wage or overtime. These employees can be paid a fixed salary per week of work without regard to the number of hours they work. It is generally wise to keep track of the hours worked by your salaried employees for your own records. While employees are usually full time exempt, salaried employees are typically paid the full week's wages even if they were absent for part of a day, a full day or even several days during the workweek.
Exempt Employee Guidelines
An employee's job title does not define an exempt vs non-exempt position. Employees must qualify under the law to be considered exempt. As of 2011, an exempt employee must be paid a minimum of $455 per week. An employee qualifies for an executive exemption if he or she directly controls at least three employees and he or she can hire or fire employees or have significant input into the process. An administrative exemption applies if the employee performs administrative tasks of the business. Administrative and executive employees must have the power to act with discretion in business matters of importance. Other exemptions apply, but blue collar workers are almost never exempt from minimum wage or overtime.