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What are the differences between exempt and non-exempt employees?

On Behalf of | Nov 14, 2022 | Employment Law

In California and all other states, there are two different types of employees: exempt and nonexempt. If you recently accepted a new job, it’s crucial to know which classification applies to you and how the two compare.

Exempt employment explained

Exempt employees receive an annual salary and usually work in an office setting. The Department of Labor (DOL) outlines the types of work these employees perform to help employers determine who is considered exempt with a duties test. Employees who are considered exempt work a set number of hours each week, usually 35 or 40, and do not do any overtime.

Employees considered exempt also work the same job duties and are often considered white-collar workers. There is also one exception for exempt employees in terms of overtime work. Those who earn less than $684 per week or $35,568 annually could be considered. Likewise, some exempt employees in industries such as agriculture or railroad who earn hourly salaries do not get the opportunity for overtime.

Understanding nonexempt employment

When a person is considered a nonexempt employee, they earn an hourly salary and are entitled to work overtime if they work more than 40 hours per week. By law, these employees earn time and a half their normal pay rate for every hour they work overtime.

The main differences between exempt and nonexempt employees revolve around the ability to work overtime and be paid for it. The Fair Labor Standards Act (FLSA), a federal law, establishes how a person’s job classification is established and the criteria required in order to be eligible for overtime work. There are also state laws that include additional requirements for exemption.

If you are a non-exempt employee, your employer must offer you overtime. As an exempt employee, in most cases, you cannot get overtime opportunities.