Introduction
Salary exempt vs nonexempt is an important distinction to understand when it comes to employment law. It affects the rights of employees and employers, as well as the amount of pay they receive. Salary exempt employees are those who are not subject to the overtime provisions of the Fair Labor Standards Act (FLSA). Nonexempt employees, on the other hand, are subject to the FLSA’s overtime provisions and must be paid time-and-a-half for any hours worked over 40 in a workweek. This article will explain the differences between salary exempt and nonexempt employees, the criteria used to determine which category an employee falls into, and the implications of each classification.
What is the Difference Between Salary Exempt and Non-Exempt Employees?
Salary exempt and non-exempt employees are two distinct categories of employees that are subject to different rules and regulations under the Fair Labor Standards Act (FLSA). Salary exempt employees are those who are not entitled to overtime pay, while non-exempt employees are those who are eligible for overtime pay.
Salary exempt employees are typically executive, administrative, or professional employees who are paid a fixed salary regardless of the number of hours they work. These employees are expected to perform duties that require discretion and independent judgment, and they must meet certain criteria in order to be classified as exempt.
Non-exempt employees, on the other hand, are typically hourly workers who are paid an hourly wage and are eligible for overtime pay. Non-exempt employees are subject to the FLSA’s minimum wage and overtime requirements, which means they must be paid at least the federal minimum wage and receive time-and-a-half for any hours worked over 40 in a workweek.
In summary, salary exempt employees are not eligible for overtime pay, while non-exempt employees are eligible for overtime pay and must be paid at least the federal minimum wage.
How to Determine if an Employee is Eligible for Salary Exemption?
When determining if an employee is eligible for salary exemption, employers must consider the criteria outlined in the Fair Labor Standards Act (FLSA). The FLSA outlines the requirements for exempt employees, including job duties, salary level, and salary basis.
To be considered exempt, an employee must meet all three of these criteria:
1. Job Duties: An employee must perform executive, administrative, or professional duties as defined by the FLSA. These duties include managing a business, exercising discretion and independent judgment, and performing specialized work requiring advanced knowledge.
2. Salary Level: An employee must earn at least $684 per week on a salary basis. This amount is subject to change based on inflation and other factors.
3. Salary Basis: An employee must receive their full salary for any week in which they perform any work, regardless of the number of hours worked.
Employers should review the criteria outlined in the FLSA to determine if an employee is eligible for salary exemption. If an employee meets all three criteria, they may be classified as exempt from overtime pay.