Who is an Exempt Employee?

According to the Fair Labor Standards Act, an exempt employee is an employee that is not qualified for minimum wage or overtime payment. The main reason for these employees being exempt by the Fair Labor Standards Act (FSLA) is that this set of employees earn substantial salaries. Exempt employees are on a high rank when it comes to the ranking, they also have high job descriptions and responsibilities that make them not eligible for minimum wage or overtime payment. There are three set of employees that are in the exempt employees category, these are those at the executive, administrative and professional level in a company.

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Exemption Under the Fair Labor Standards Act

Due to the roles certain employees of a company play, they are exempted from minimum wage and overtime payment. Generally, employees with high positions and those at the level of decision-making in a company are exempt employees, these include executives, administrators, professionals, and board members of a company. Exempt employees are paid according to their performance and level of impacts in a company and not by the hours they work for. Exempt employees earn $455 every week on average and also enjoy other benefits in a company. For many states, executive position, administrative role and professional service are criteria that quality employees for exemption. Also, an employee who has 50% of his time to himself qualifies for exemption.

Exempt Employees, Non-Exempt Employees and the Fair Labor Standards Act

In the United States, the exempt employee is part of the 1938 Fair Labor Standards Act which is part of employee protection in workplaces. The Fair Labor Standards Act specified two categories of employees, that are; exempt employees and non-exempt employees. Contained in FLSA are the hours employees should work for, the expected minimum wage and expected payment for workers when they use overtime. Any worker that works more than 40hours in a week has worked overtime and is entitled to overtime payment. Exempt employees are those that are not entitled to minimum wage or overtime payment because of their roles in an organization. Non-exempt employees on the other hand must not be paid less than the minimum wage and must be paid for overtime, failure to do this by employers attract penalties.

Related Topics

• Employment Law (Intro)
• Who is an employee under the employment law?
• Subcontracting
• What characterizes the employer-employee, At-Will relationship?
• What are the major employment laws?
• What are the taxation requirements imposed upon employers?
• What is the Fair Labor Standards Act (FLSA)?
• Exempt Employee 
• NonExempt Employees
• Family Medical Leave Act (FMLA)?
• Worker Adjustment and Retraining Act (WARN Act)?
• Occupational Safety and Health Act (OSHA)?
• Employee Retirement Income Security Act (ERISA)?
• Active Participant Status
• Defined Benefit Plan
• Pension Plan
• Accumulated Benefit Obligation
• Defined Contribution Plan
• Cash Balance Plan
• Pension Benefit Guaranty Corporation
• Blackout Period
• Benefit Allocation Method
• Multinational Pooling
• DB(k) Plan Definition
• Employee Contribution Plan
• Unit Benefit Plan
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• Non-Discrimination Rule
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• Consolidated Omnibus Budget Reconciliation Act (COBRA)?
• Health Insurance Portability and Accountability Act (HIPAA)
• Workers Compensation Laws?
• Workers Compensation Coverage A Definition
• Workers Compensation Coverage B Definition
• Federal Unemployment Tax Act
• State Unemployment Tax Act
• Voluntary Termination
• Employment Verification Laws?
• Form I-9
• Workplace Privacy Laws?
• Background Checks
• Davis-Bacon Act
• Loudermill Rights
• Work Opportunity Tax Credit
• Work for Hire Agreement (Independent Contractor Agreement)
• Engagement Letter Definition
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• What are labor laws?
• Organized Labor
• Collective Bargaining Agreement
• Labor Union
• What are the major labor laws?
• Department of Labor
• What is the National Labor Relations Act?
• Unfair Labor Practice
• Right to Work Laws
• Labor Management Relations Act
• Labor Management Reporting and Disclosure Act