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Ask the Lawyer: October 2011 (Exempt vs. Non-Exempt)

What is the difference between an exempt and non-exempt employee?

Employees whose jobs are governed by FLSA are either "exempt" or "non-exempt." Non-exempt employees are entitled to overtime pay; exempt employees are not. Whether employees are exempt or non-exempt usually depends on (a) amount of pay, (b) how paid, and (c) work performed. With few exceptions, exempt employees must: (a) receive at least $23,600 per year; (b) be salaried; and (c) perform exempt job duties as outlined in FLSA Regulations of U.S. Department of Labor.

Employees paid less than $23,600 per year are non-exempt. Employees earning more than $100,000 per year are almost certainly exempt. Employees who meet salary level tests and salary basis tests are exempt only if they perform certain high-level work. Job titles or position descriptions are of limited usefulness in this determination. A secretary is still a secretary if called an administrative assistant, and a chief executive officer is still CEO if called a janitor. Actual job tasks and how the tasks fit into the employer's operations must be considered. Typical categories of exempt job duties are "executive," "professional," and "administrative."

Job duties of traditional "learned professions" are exempt, including lawyers, accountants, physicians, dentists, registered nurses (not LPNs), scientists (not technicians), pharmacists, and other employees who perform work requiring advanced knowledge. Professionally exempt work is predominantly intellectual usually requiring specialized education and involving exercise of discretion and judgment. Professionally exempt workers must have education beyond high school, usually beyond college, in fields academically distinguished from mechanical arts or skilled trades. Advanced degrees are the most common measure, but are not absolutely necessary if an employee has attained a similar level of advanced education through other means and performs essentially the same kind of work as similar employees with advanced degrees.

Exempt employees have virtually no rights under FLSA overtime rules. An exempt employee is only entitled under FLSA to receive full base salary in any work period during which work is performed, less permissible deductions. Nothing in FLSA prohibits an employer from requiring exempt employees to punch a clock, work particular schedules, or make up absences. Nor does FLSA limit the amount of work time an employer may require from any employee on any schedule. Mandatory overtime is not restricted by FLSA.

Keep in mind that this discussion is limited to rights under FLSA. Exempt employees may have rights under other laws or by way of employment policies or contracts.

This article is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. The information contained in this article does not create an attorney-client relationship between Karen McKeithen Schaede Attorney at Law, PLLC and the reader.

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