Fair Labor Standards Act: Exempt vs. Non-Exempt Employees


The Fair Labor Standards Act (FLSA) is a federal labor law that regulates overtime pay, minimum wage, child labor protections, and the Equal Pay act for many employees. These regulations ensure that employees are treated to fair working conditions, wages, hours, and more. There are some employees who are not covered by the protections of FLSA, and are allowed to be handled differently by their employers. These employees are known as exempt employees. The difference between exempt and non-exempt employees is important, since it can change the way an employee is paid, the hours they work, and more.

How Do I Know if I am an Exempt Employee?

Employees who are exempt from FLSA coverage can legally be treated differently when it comes to overtime pay and other protections. Some jobs are considered exempt from the FLSA, such as agricultural laborers, while other exempt employees are determined by their pay, job duties, or whether their employment is controlled by another federal law. An example would be railway workers, who are covered but the Railway Labor Act. These exemptions are covered in §213 of the FLSA.

If you are not sure if you should be considered an exempt employee or not, there are some tests you can conduct to answer this question.

Salary Level

If you are paid less than $23,600 per year, you are a non-exempt employee.

Salary Basis

If you are paid on a salary basis, rather than an hourly basis, you are likely to be exempt from FSLA coverage. Salary basis is determined by whether you are paid a guaranteed minimum amount of money each week, regardless of the amount of work you perform in that period. Another way to tell is if your paychecks are computed by dividing an annual figure by the number of pay periods in a year.

Job Duties

If you meet the salary tests, your job duties will be another check to make sure you are appropriately classified. While some jobs are already defined as exempt, others may not be so clear. There are three job categories that fall into exempt status, defined by the duties they require rather than the exact title of the position.

These categories are:

  • Executive duties
  • Professional duties
  • Administrative duties

If you are an executive, your status as an exempt employee will be determined by the duties you perform. For this category, this includes regular supervision of at least two employees, has genuine input into the job status of other employees (hiring, promotions, firing, etc.), and whether management is the primary duty of the position. Executive duties can still be performed in addition to regular job duties, but the person who is “the boss” is generally considered an executive, even if they do other tasks too.

If you aren’t an executive, you still may be a professional. These employees generally require some form of specialized education to do their work, or are otherwise a creative professional. Typically, professional positions are considered exempt if they require advanced knowledge, and require the employee to exercise judgement and discretion in the course of their duties. Examples include doctors, registered nurses, dentists, teachers, architects, accountants, lawyers, engineers, scientists, actors, musicians, designers, and artists.

Possibly the most difficult to define, administrative positions require employees to perform non-manual or office work, be directly related to the business operations of the employer or customers, exercise independent judgment and discretion in the course of their duties. As a rule, these employees’ jobs are to “keep the business running” with their work. They don’t make products or offer services to be sold by the company, but they support the employees who do.

Still Have Questions? Call Our Memphis Employment Law Attorneys – (901) 209-5500

The distinction between exempt and non-exempt employees is critical to ensure that you are being compensated fairly for your time. If you are a non-exempt employee who has been wrongfully classified as an exempt employee, you may not be receiving the overtime pay you should be. At Donati Law, PLLC, we’re dedicated to helping employees advocate for their rights. Our Memphis employment lawyers are highly experienced and well-versed in all relevant laws. Let us discuss your case during your consultation.

Contact our firm by calling (901) 209-5500.

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