Many people may not necessarily consider their status as an employee on a daily (or weekly, monthly, or yearly) basis. Even if you’re aware of it, you probably don’t consider the ramifications of that status. So, to that end, let’s talk about exempt and non-exempt employees, and how these statuses apply in certain industries.
So what are exempt and non-exempt employees? Well, these statuses are governed by the Fair Labor Standards Act, a federal provision. A non-exempt employee must be paid the minimum wage, and they must receive overtime (which is one and a half times their base pay) for any time worked over 40 hours in a week. An exempt employee doesn’t have the protections of the FLSA, and the qualifications for such an employee are a bit more vague, but in general, such an employee must make $23,600 per year, be paid on a salary basis, and performs “exempt” job duties.
Exempt job duties are pooled into three areas: executive, professional and administrative duties. Executive duties include supervising two or more people, having “management” as a primary duty, and has input into an employee’s job status. That last part means they have input into hiring and firing the employee, among other things.
Professional duties involve jobs that require special training or education to obtain. For example, lawyers, teachers, and physicians qualify as “professional” duties.
Administrative duties are more general, and involved nonmanual tasks which relate to the management of a business and its operations, and that require discretion and judgement on “matters of significance.”
It’s also important to note that certain industries are exempt from the FLSA, which means exempt and non-exempt statuses do not apply in these industries. An example of such an industry is agricultural work.
Source: FindLaw, “Exempt Employees vs. Nonexempt Employees,” Accessed June 19, 2015