Understanding the difference between “exempt” and “non-exempt” employees can be tricky.
“Exempt” employee typically are “salaried” workers that are paid on a salary basis (a flat rate for hours worked during the week, no overtime). They are called “exempt” because they are exempt from most hourly wage laws and overtime pay.
With some exceptions, an exempt employee’s salary must not be less than $684 a week.
To be exempt, an employee generally must fit into the following classifications:
- Executive employees, CEOs, directors, other high-level leaders
- Supervisory employees, supervisors, managers, and other positions with employees working under them.
- Professional employees, professors, teachers
- Administrative employees, executive assistants
- Outside sales reps, especially those who don’t always work from an office and who travel often.
- Highly compensated employees paid over $107,432
- Employees who are paid at least $684 a week
Non-exempt employees must be paid a minimum federal wage and paid time-and-a-half for hours worked over 40 per week (48 hours per week for certain occupations). You can choose to pay your non-exempt employee how you wish; hourly or salary, tips, and/or commissions, provided they are paid the federal minimum wage plus time-and-a-half for any hours over 40 per week.