Wage and hour basics: exempt versus non-exempt

Wage and hour basics: exempt versus non-exempt

On Behalf of | Mar 2, 2023 | Wage And Hour Laws

Whether you are an employer starting a new business or an employee about to begin a new job, you may come across the terms “exempt” and “non-exempt” in contracts and wonder what they mean. These are two of the three categories of workers for determining wage and hour. The third classification, the “independent contractor”, is more straightforward than the other two.

Classifying of workers into exempt and non-exempt determines whether an employee is excluded from overtime pay and other benefits.

Exempt employees

Exempt employees are not eligible for overtime pay and other benefits.

Who are exempt employees? This depends on a worker’s job description. Employers take salaries and duties into consideration when determining exempt employees. But generally, they are those who can control their working hours and other working conditions. This can include executives, administrative employees and computer professionals.

Non-exempt employees

Non-exempt employees, on the other hand, are entitled to minimum wage and overtime pay. These are workers who earn an hourly salary. Moreover, under Florida laws, those who make under $455 weekly, as of this writing, also fall under this classification. Some non-exempt employees may be sales, nonmanagerial, emergency and blue-collar workers.

However, it is good to note that not all employees who receive hourly pay are non-exempt. Depending on state laws, some professions, like doctors and teachers, may fall under the exempt category.

Can an employer simply label an employee as exempt?

No. The law prohibits employers from labeling employees as exempt at their own will or preference or just to avoid paying overtime compensation. The Fair Labor Standards Act (FLSA) has set specific job and wage requirements and the employee must meet the criteria to get exempt status.

Wage-hour issues centering on exempt and non-exempt violations can have serious legal ramifications for Florida employers. Understanding the difference between exempt and non-exempt helps employers accurately determine whether to exclude an employee from overtime pay. For employees, knowing which classification they fall under helps them understand their wage and hour rights.