Non-Exempt Employee
What is a non-exempt employee?
The federal Fair Labor Standards Act (FLSA) requires employers to classify jobs as exempt or non-exempt. FLSA regulations cover non-exempt employees.
Exempt positions are excluded from minimum wage, overtime, and other rights and regulations under the FLSA.
What are non-exempt employees entitled to?
Non-exempt employees are entitled to earn at least the minimum wage for hours worked, and are given overtime pay (one-and-a-half times their hourly rate) for every hour they work more than the standard 40-hour workweek. Overtime laws can vary by state, so companies should check their state's laws before determining an overtime pay strategy.
Many employees covered by the FLSA are considered non-exempt. In most cases, the type of work, amount of wages, and manner of pay (hourly or salary basis) control how an employee is classified.
A salaried non-exempt position is also subject to a minimum amount, as set by FLSA regulations. While most people think of minimum wage with hourly employees, the FLSA does set a minimum weekly threshold for non-exempt salaries. Some states may have a higher starting pay per week to qualify, in which case the higher state wage takes precedence. But a non-exempt salaried employee can't be paid less than the federal minimum.
What is the difference between salaried and hourly non-exempt ?
While both salaried non-exempt employees and hourly employees are covered under FLSA rules and regulations and must be paid at least a federal minimum wage, they differ in how that pay is determined.
An hourly employee receives payment for the actual hours they work during the week. Hourly jobs typically indicate how much an employee will be paid for each hour worked.
In contrast, a salaried worker is paid a set amount, called a salary, which is divided between pay periods. Salaried employees are paid that amount, regardless of how many hours they work in a week. It’s not uncommon for salaried employees to work more or less than a typical 40-hour workweek.
Can you make an exempt employee non-exempt?
All positions are non-exempt by default. And an employer may change an employee status from exempt to non-exempt, even when a position qualifies for exempt status. As with all non-exempt positions, the employer will need to track the hours worked and pay overtime when appropriate.
Also, the change should be made with the intention that it's long term or permanent. A week-by-week change, or frequent changes back and forth, may suggest that an employer is avoiding paying overtime.
Is it better to be an exempt or non-exempt employee?
The answer to this question largely depends on the employee. Some workers prefer the security of knowing that they’re paid for every hour they work, and therefore would consider non-exempt positions better.
Others prefer the greater freedom that comes with salaried positions and would choose exempt positions over non-exempt ones.
Most employers treat their exempt and non-exempt employees similarly. There's also workplace legislation that grants all employees, whether exempt or non-exempt, the right to equal employment opportunities, a safe and healthful work environment, and rights provided under the Family and Medical Leave Act (FMLA) and federal child labor laws.