Exempt And Non-exempt Employees Under Overtime Law

Employees, particularly those working more than 40 hours in a single workweek, should be aware of whether they are an exempt or non-exempt employee under overtime law. Exempt and non-exempt status establishes whether a worker is eligible to receive time-and-a-half pay when working more than 40 hours a week. Exempt employees cannot receive overtime; non-exempt workers are entitled to overtime pay. Employees who are aware of their status can ensure they are receiving the pay they are entitled to under overtime law.

For most workers, eligibility for overtime pay is determined by how much the employee is paid, how they are paid and their job tasks. Being paid by a salary or having a certain job title cannot automatically disqualify a worker from overtime pay. Generally, workers who cannot receive overtime pay must make at least $455 per week, be paid by a salary and meet one of the overtime exemptions under the federal overtime law, the Fair Labor Standards Act (FLSA). The three main FLSA overtime exemptions are the executive exemption, professional exemption and administrative exemption. Those who do not meet one of the following exemptions are probably eligible for overtime pay.

1. Executive Exemption
To fall under the executive exemption, the worker must manage the business or a unit of the company, have the ability to hire and fire employees and regularly direct at least two workers. If an assistant manager and a manager are always on duty at the same time, the manager is considered to be the person in charge. Therefore, many assistant managers should receive overtime when working more than 40 hours a week.

2. Administrative Exemption
To fall into the administrative exemption, the worker must carry out office or non-manual work or work in school administration. Also, administrative employees must regularly exercise discretion and independent judgment in important matters. For example, planners and department store buyers may be considered administrative employees. Although clerical work is considered administrative, most secretaries should receive overtime. Making travel plans, filing, answering phone calls and gathering reports are not considered high-level job duties. Therefore, secretaries performing these job tasks do not meet the provisions of the administrative exemption. Also, although many secretaries use judgment in their positions, this level of judgment must be compared to the importance of the entire business. For example, choosing the supplies for the office would not typically be considered a significant matter when comparing this job task with those of others in the company.

3. Professional Exemption
To fall under the professional exemption, the worker must carry out a position requiring advanced knowledge in the fields of science or learning. Professional employees generally have a specialized academic degree in their field. An individual whose occupation requires originality and imagination in a creative or artistic field would also fall under the professional exemption. For instance, doctors, teachers and lawyers may be examples of professional employees.

In addition to the three main overtime exemptions, those engaged in outside sales cannot receive overtime pay. Also, some computer employees may be exempt from overtime pay. However, computer operators, systems engineers, junior programmers, and technical writers, as well as computer professionals who make, repair or maintain computer hardware are usually eligible for overtime compensation.