Non-exempt employee

How does the FLSA define non-exempt employees?

The Fair Labor Standards Act (FLSA) defines non-exempt employees as individuals who are entitled to the minimum wage and overtime pay protections. Unlike exempt employees, non-exempt employees must be compensated for overtime work, ensuring they receive fair pay for all hours worked.

What are the overtime rules for non-exempt employees?

Under the FLSA, a non-exempt employee is entitled to overtime pay. This is at an hourly rate of one and a half times their regular hourly pay rate for any hours the employee works beyond a standard, full-time, 40-hour workweek. State laws may have additional overtime provisions that apply, depending on where the employee lives and works.

Can non-exempt employees work more than 40 hours per week?

Yes, non-exempt employees can work more than 40 hours per week, but they must be paid overtime for the additional hours worked.

Can non-exempt employees be required to work more than 40 hours per week?

Employers can require non-exempt employees to work more than 40 hours per week, provided they comply with FLSA overtime pay requirements. Employees must be compensated at the overtime rate for any hours worked beyond the standard 40-hour workweek. While there are no federal limits, some states have labor and employment laws that put a cap on the number of hours an employee can work in a week, or require rest breaks.

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What’s the difference between a non-exempt vs exempt employee?

Exempt employees are defined by the Fair Labor Standards Act. They must meet specific criteria related to their job duties (e.g., executive, administrative, or professional employees) and are most often paid on a salary basis, rather than an hourly wage.

The primary differences between non-exempt and exempt employees have to do with their eligibility for overtime pay and minimum wage protections:

• Overtime pay: Non-exempt employees are entitled to overtime pay for hours worked beyond 40 in a workweek, while employees with exempt status are not.

• Minimum wage: Non-exempt employees must receive at least the federal minimum wage (or the applicable state or local minimum wage), while exempt employees are typically paid a salary that meets or exceeds a threshold set by the Department of Labor (DOL).

How can employers determine if a worker should be classified as non-exempt?

The FLSA and DOL have three factors employers can use to determine whether a worker falls under non-exempt or exempt status:

• Job duties test: First, consider their job title and job description. Employees whose primary duties would be considered “white-collar” (e.g. executive or administrative employees, those who perform outside sales, or high-level managers) are often exempt.

• Salary basis: Next, consider how they’re paid. If they receive hourly wages, they’re more likely to be non-exempt. If they’re paid an annual salary, they’re more likely to be exempt.

• Salary level test: Finally, determine whether they meet the minimum salary threshold for a “highly compensated employee” under DOL rules. Currently, the threshold is $684 per week ($35,568 per year). On July 1, 2024, it’s increasing to $844 per week ($43,888 per year). On Jan. 1, 2025, it will increase again, to $1,128 per week ($58,656 per year).

What are the consequences of misclassifying an employee as exempt?

Employee misclassification can have serious consequences for your organization, including:

• Back wages for unpaid overtime

• Penalties and fines imposed by the Department of Labor

• Lawsuits for wage violations, potentially leading to legal costs and settlements or judgments against you as the employer

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Frequently asked questions about non-exempt employees