Employers must categorize jobs as exempt or non-exempt under the federal Fair Labor Standards Act. Non-exempt employees are entitled to at least the min wage for all hours worked, as well as overtime compensation (one-and-a-half their hourly rate) for each hour worked above the usual 40-hour workweek. In most circumstances, an employee’s classification is determined by the type of work, wage amount, and payment method (hourly or salary basis). The minimum wage for salaried non-exempt employment is likewise regulated under FLSA standards.
Exempt employment is exempt from the FLSA’s minimum wage and other overtime limits, as well as other safeguards that the non-exempt workers enjoy. To fall in the category of exempt, an employee must be paid a salary instead of an hourly pay rate for their work. Exempt salaried employees are obliged to work the length of time required to perform their job, whether that is 35 or 55 per week. Their pay remains constant regardless of how many hours they work. Exempt employees typically earn greater fixed pay than minimum wage workers who work 40 hours every week. White-collar positions are typically excluded.