What does “exempt” mean in terms of employment? The concept of exempt vs nonexempt employees comes from the Fair Labor Standards Act (FLSA) as a distinction to protect employees from working long hours without extra payment. But the terms are often confused and misunderstood by employers and employees alike.
It’s pretty important for employers to understand the distinction. This past week, statistics were released by the Administrative Office of the U.S. Courts showing that “8,160 FLSA cases were launched in the 12 months ending Sept. 30, an 8.8 percent increase from the 7,500 FLSA cases filed during the previous 12 months.” (See FLSA, FMLA Lawsuits Soaring, New Statistics Show)
Mike Haberman of Omega HR Solutions has a several great posts that discuss and clarify the issue. In What exactly does “exempt” mean? he defines the overall terms, noting that exempt means a “… particular employee is exempt from being paid overtime, in other words you do NOT have to pay them anymore even when they work more than 40 hours in a week.” In contrast, for a non-exempt employee, “you MUST pay them overtime whenever they work more than that 40 hours. In some states overtime has to be paid for work of more than 8 hours in a day.”
An employer can’t simply decide to make the entire workforce exempt in an effort to get around overtime. Haberman lays out the current criteria, one of which is minimum salary. Although the current level is $455 a week, pending FLSA changes will likely bump that up significantly. And salary is only one criteria in classifying an employee as exempt. See his related post, FLSA Exemptions are about DUTIES not Titles.
In The USDOL is getting ready to disrupt your workplace! Halberman discusses some of the significant changes that are under review.
For additional resources, see
- The Department of Labor’s FLSA Overtime Security Advisor, an interactive tool
- A Substantial Salary-Test Jump Is Likely
- Exempt or Non-Exempt: The Risk of Misclassifying Employees
- 7 Most Common Misconceptions Around Exemptions
When complex employee issues arise, ESI EAP offers member employers direct access to Certified Senior Professionals in Human Resources (SPHR) and senior clinical counselors. If you need an Employee Assistance Program give us a call: 800-535-4841.