Exempt vs Non-Exempt: Are you Classified Correctly?

You may have heard the terms exempt and non-exempt when talking about employees. But what are exempt employees exempt from? Unless you’re in HR, you might not know exactly what these terms mean and how they affect you. In this post, we’ll review exactly what the law says exempt and non-exempt employees are entitled to and some ways to know if your employer is following the rules.

What is exempt? What is non-exempt?

11220929004_e504dcf17d_zExempt and non-exempt are job classifications and, basically, determine whether or not you will be paid overtime. Exempt employees are excluded from some of the protections that non-exempt employees receive. But to be clear, all workers, regardless of classification, have the right to a safe and healthful work environment, equal employment opportunity and the Family Medical Leave Act.

Exempt employees are salary rather than hourly, and they must earn at least $455 per week. So while they won’t be paid overtime no matter how many hours they work in a week, they must be paid their full salary for the week even if they work only 15 minutes in that week.

Non-exempt employees have to be paid for all the hours they work. If they work more than 40 hours, they must be paid at a rate of time and a half  for the extra hours.

How do we determine how jobs are classified?

There are three types of jobs that can be called exempt: administrative, executive and professional. No matter which of these jobs types you are doing, to be considered exempt you must be able exercise independent judgment and discretion on matters of significance more than 50% of the time.

If you have an administrative exemption, your job should be office or non-manual work directly related to management policies or general business administration.

If you have a professional exemption, your work should be primarily intellectual and require advanced knowledge—usually, but not always, a degree of some kind.

If you have an executive exemption, management should be the primary duty of your position, and you should be supervising at least two other employees where you have “genuine input” into their job status.

If you don’t fall into one of these three categories, and meet the requirements, your job may have been misclassified, and you could be owed overtime from your employer!

There are government resources that can help you learn more about these topics, but because employment is a complex topic, it’s usually best to consult a lawyer for help.

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photo credit: reynermedia via Flickr cc

About Marc Aaron Goldbach

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