Exempt vs. Nonexempt: Which One is Which?
September 19, 2016
If your job is classified as nonexempt, your employer has to adhere to the FLSA laws. You’re required to receive minimum wage pay ($7.25 per hour as of July 24, 2009), and any time worked over 40 hours a week is considered overtime. Overtime is compensated as time and one-half of your regular pay per hour worked. Most employees are nonexempt.
Pretty simple, right? Of course, like all laws, there are many exceptions. Many states have their own wage and hour laws as well. For more specified info, click here.
Exempt: Only the Exceptional
Exempt employees aren’t offered protection from the FLSA—and they’re not entitled to overtime pay. Some types of jobs are federally considered exempt, but there are many exceptions. For most professions, employees are exempt if they meet the following criteria:
- Paid at least $23,600 per year (or $455 per week)
- Paid on a salaried basis, not hourly wage
- Performs exempt job duties
What are Exempt Job Duties?
Employees can also be considered exempt if they perform certain types of work. The FLSA has broken it down into three main categories: executive, professional, and administrative.
Executive: An employee is considered an exempt executive employee if he or she performs the following job duties:
- Supervises two or more employees
- Manages others as majority of his or her job
- Has input on other employees’ job statuses, such as hiring, firing, or performance reviews
Professional: An employee is considered an exempt professional employee if he or she performs work that requires advanced education or training. Examples include nurses, teachers, professors, lawyers, architects, etc.
Professional employees generally have skills unique unto themselves, and make important decisions using judgement and discretion. It can include employees whose jobs require imagination or talent, such as writers, actors, and musicians. It does not include skilled trades that don’t require a college or postgraduate degree.
Administrative: An employee is considered an exempt administrative employee if his or her main duties include integral business support. Examples include HR, payroll, and accounting staff. The FLSA considers administrative employees as those whose jobs meet the following criteria:
- Directly related to management or general business operations
- Office or non-manual work
- Implementing independent judgement and discretion about matters of significance
As you can probably tell, exempt employee status is one of the more difficult FLSA standards to nail down. For more information on exempt and nonexempt employment statuses, you can visit the United States Department of Labour’s website.
With all of these FLSA regulations, keeping track of employees’ hours and attendance has never been more important. To stay FLSA compliant, your company needs to keep detailed and accurate records. Asure Software can do this for you with its streamlined Human Capital Management solution. Forget about tracking attendance and overtime hours—let Asure Software do it for you.