Quick Way to Explain the Difference Between Exempt & Non-Exempt Employees

by Ruth Mayhew ; Updated September 26, 2017

The terms exempt and non-exempt are often confused, probably due to the use and meaning of the word "exempt." Nevertheless, the difference between exempt and non-exempt employees has to do with who gets paid overtime. There are aspects about job duties, position, salary and level of authority that factor into the difference between exempt status and non-exempt as well.

Overtime Rules

The quickest way to differentiate between exempt and non-exempt employees is to explain who gets paid overtime. Exempt employees are exempt from overtime pay rules; non-exempt employees are not exempt from overtime rules. In other words, exempt workers don’t get overtime pay and non-exempt workers do. Non-exempt employees get paid time and a half for working more than 40 hours in a work week, according to the Fair Labor Standards Act of 1938. Alaska, California, Nevada, Virginia and the Commonwealth of Puerto Rico require overtime pay for work in excess of the daily threshold of 8 to 12 hours of work per day, however.

Fair Labor Standards Act

Overtime pay, exempt and non-exempt status, minimum wage and working hours are laws to which a large majority of employers must adhere. Collectively, they are referred to as the Fair Labor Standards Act (FLSA). With respect to exempt and non-exempt employees, the FLSA explains how to classify workers according to pay standards, work duties, position and authority.

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The U.S. Department of Labor, Wage and Hour Division enforces the FLSA and it also provides technical assistance and guidance to employers who need help with employee classifications. Violations pertaining to exempt and non-exempt status under the FLSA are subject to steep fines and penalties; therefore, it’s in the best interest of employers to seek the expertise of this federal agency when they’re determining how to classify employees.

Job Duties

Job duties play a part in determining which employees are exempt and which are non-exempt. Non-exempt employees are generally paid by the hour for tasks that require manual work. Exempt employees are in jobs that require predominantly non-manual work, such as managing employees, providing direction to employees and developing workplace policies. Teachers, scientists and employees in creative positions, such as artists, are also exempt. Though infrequent, their jobs may at times require manual tasks.

Level of Authority

Exempt employers generally have a higher level of authority than do non-exempt employees. This is because exempt worker classifications include people who are at levels within the organization where they have responsibility for monitoring the performance and behavior of other employees.

Position and Salary

Administrative, professional and executive jobs are classified as exempt positions. Their exemption -- based on level of authority and job duties -- is evident by virtue of their job titles or positions. In addition, positions that require special, advanced level education or scientific knowledge are also exempt under the FLSA. Teachers and professors are under this classification. The U.S. Department of Labor also exempts certain workers in creative fields, employees in computer-related jobs who make more than $27.63 per hour and all salaried employees who earn more than $455 per week and meet the job duties, authority and position classification.

About the Author

Ruth Mayhew has been writing since the mid-1980s, and she has been an HR subject matter expert since 1995. Her work appears in "The Multi-Generational Workforce in the Health Care Industry," and she has been cited in numerous publications, including journals and textbooks that focus on human resources management practices. She holds a Master of Arts in sociology from the University of Missouri-Kansas City. Ruth resides in the nation's capital, Washington, D.C.

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