What Are the Benefits of Being Exempt Vs. Non-Exempt?

by Miranda Morley, Demand Media Google
Upper-level executives are usually exempt.

Upper-level executives are usually exempt.

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The Fair Labor Standards Act applies to most organizations and designates employees as either exempt or non-exempt. Both types of employees are covered by basic laws regarding workplace safety, but laws regarding how exempt and non-exempt employees are compensated differ. Knowing the differences between the types of compensation will help you determine which type is more beneficial for your lifestyle.

Exempt Benefits: Salary

According to Career website Monster.com, exempt employees are compensated for the projects they complete, not the time it takes to complete them. For this reason, exempt employees are compensated with a salary, not hourly wages. To be considered an exempt employee, the Fair Labor Standards Act requires workers to make a salary of at least $23,600 a year. Many workers see earning a salary as a benefit. Regardless of the number of hours they work, salary earners make the same amount each pay period, so they don't have to be concerned about what a drastic drop in hours worked will do to their paychecks.

Non-exempt Benefits: Overtime

Non-exempt employees are compensated for the time they work, not the jobs they complete, so if they work more than 40 hours per week, they make extra money. Under the FLSA, exempt workers qualify for time and a half, their normal hourly wage plus half that wage, when they work overtime. Workers who volunteer for overtime or have mandatory overtime can benefit significantly from their status as non-exempt employees, as they can make a large amount of money in overtime pay.

Exempt Benefits: Flexibility

Because exempt employees are compensated for the jobs they do and not the time it takes them, they often have a more flexible work environment than non-exempt employees. Employers are often more interested that these workers complete their jobs than the time it takes them to do those jobs, so employers may be less concerned if workers take longer lunch breaks, come in late or work in areas other than the office.

Non-exempt Benefits: Compensation

Non-exempt employees have the benefit of knowing that they are compensated for every hour that they work. Unlike salaried employees, who may find they work so many hours that they end up making an extraordinarily low amount per hour when they do the math, non-exempt, hourly employees know exactly how much an hour of their time is worth.

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