Are you Exempt or Non-Exempt?

Employees governed by the Fair Labor Standards Act (FLSA) fall into two categories: exempt or non-exempt. Non-exempt employees are entitled to overtime pay, exempt employees are not. In determining whether or not an employee is exempt, there are a few questions you should ask: how much the employee is paid, how the employee is paid, and what the employee’s job duties are. Let’s break those down a little further.

How Much You Are Paid

Under the FLSA, any employee who makes less than $23,600 per year is a nonexempt employee. This means they are entitled to an overtime pay rate (1.5 times their normal hourly wage) for any hours over 40 worked in a week. Conversely, if the employee is paid $23,600 or more, he or she may be considered exempt.

How You Are Paid

Generally speaking, if you are paid on a salary basis, you are classified as an exempt employee under the FLSA. This means that you have a guaranteed amount you earn per week for “any” work done. So, whether you actually work 35 hours in one week or 45 hours in one week, your paycheck will remain constant. That is not to say that exempt employees cannot make more than their salary through bonuses or commissions, but exempt employees are paid a “guaranteed minimum” amount of money no matter their hours worked.

Under the FLSA, an employer may only dock the pay of a salaried employee in full day increments for disciplinary suspensions, personal leave, or for sickness under a sick leave plan. Also, not all salaried employees are automatically exempt and vice versa. For example, doctors and teachers may be paid hourly, but under the FLSA they are considered exempt.

What Kind of Work You Do

The job duties test is very important when determining if an employee can be classified as exempt or not. Under the FLSA, if your day-to-day duties fit into one or more of the categories below, you may be considered an exempt employee. The law breaks duties down into three categories: executive, professional, and administrative job duties.

  • Executive Exempt Job Duties
    • Regularly supervises two or more other employees. This can be two full-time employees or the part-time equivalent of two full-time employees. This supervision must be a regular part of the employee’s job.
    • Management is a primary duty of the position. Under the FLSA, management can include anything from training, planning another employee’s work, monitoring those employees’ work, and handling issues with the employees being supervised. Management must be a primary duty of the job for an employee to be considered exempt. Exempt employees can still perform support work and day-to-day duties, but if they are considered “the boss” at any time, they should be classified as exempt.
    • Has some genuine input into the job status of other employees. The employee does not have to be the final decision maker on any change with another employee, but if they take part in the hiring process, choose assignments, or provide input for promotions, hiring and firing, that qualifies as exempt executive duties.
  • Professional Exempt Job Duties
    • The FLSA also directs job duties of “learned professionals” are exempt. This includes lawyers, doctors, teachers, architects, engineers and the like. Any job that requires specialized training and is predominantly intellectual typically falls in the exempt category. Creative professionals like actors, writers, and musicians are also considered professionally exempt.
  • Administrative Exempt Job Duties
    • Office or non-manual work that supports management or general business operations and involves the exercise of independent judgment and discretion about matters of significance. This is the most vague definition of exempt job duties under the FLSA, and the one that many employers use to try to misclassify their employees as exempt.
    • If your job duties fall in the line of “keeping the business running,” you should be classified as exempt. These employees may be human resources, payroll, accounting, and/or marketing personnel, just to name a few.
    • The work must be high-level and not involve predominantly clerical duties like ordering office supplies or answering phones. An administratively exempt employee must regularly use independent judgment in making decisions about major business operations.
    • The FLSA distinguishes administratively exempt employees from operational or production employees.

If you believe you have been misclassified as an exempt employee, you could be entitled to missed overtime wages. Contact Powers Taylor today for a free consultation.



This field is for validation purposes and should be left unchanged.
This is a staging environment