Exempt and non-exempt employees are worker classifications established by the Fair Labor Standards Act that determine if you must pay an employee overtime pay.
- Exempt employee: An employee who, based on job duties and salary, is “exempt” from receiving overtime pay.
- Non-exempt employee: An employee who, based on job duties and salary, will receive overtime pay as required by federal and state law. (Overtime pay in most states is 1.5 times the hourly rate whenever the employee works over 40 hours in a workweek.)
