Exempt Employee | Meaning and Definition

Who is an exempt employee? 

The Fair Labor Standards Act (FLSA) divided employees into two categories, i.e., exempt employees and non-exempt employees. In simple words, non-exempt workers receive overtime pay and also receive minimum wage. But exempt employees do not receive any kind of overtime pay. They also do not get any minimum wage. Rather the exempt employees have a fixed salary which they generally receive on a monthly or weekly basis. According to FLSA, if an employee does not receive minimum wage and overtime pay and earns at least $684 USD per week or $35,568 USD per year, then that person should be considered an exempt employee. The non-exempt employees are usually paid on an hourly basis or on the basis of a particular contract. But, an exempt employee gets paid on a monthly/weekly basis and has a settled salary, and these are the main differences between an exempt and non-exempt employee. According to FLSA, Administrative, Executive, Outside Sales, and Computer-related fields have exempt employees. 

Advantages of being an exempt employee: 

An exempt employee’s job is quite secure, and they also have a steady work environment compared to the non-exempt employees. Exempt employees are sure to have the surety that they will receive a fixed paycheck after a certain time, unlike non-exempt employees. Exempt employees also receive yearly bonuses and pensions after retirement. 

Disadvantages of being an exempt employee

Exempt workers won’t receive a minimum wage, and that’s a basic rule. Even if they work extra hours to finish an overload, they won’t get any overtime pay or reimbursement, and these are the main disadvantages of being an exempt employee.