Time & Attendance Articles

Exempt vs Non-Exempt Employees

All employees in the US fall into one of two categories: exempt or non-exempt. These terms can be a bit confusing for many folks, so in this brief article we'll explain exempt vs non-exempt status and what it means for you.

Exempt vs Non-Exempt Status
An exempt employee is a worker who is exempt from overtime pay due to the nature of their pay and job description. A non-exempt employee is a worker who is entitled to overtime pay rates for all hours worked over federal and state thresholds. For instance, the current FLSA (Federal Labor Standards Acts) weekly threshold is 40 hours in one 7 day work week. All hours worked over 40 hours are entitled to overtime pay of at least 1.5 times regular pay (often known as "time and a half"). The FLSA standard is the minimum for all states in the US and many states have additional overtime rules on top of the federal law outlined above.

Note: See our State Overtime Laws page to find out more about the laws in your state.

In order to know whether you qualify as exempt or non-exempt, review the chart below and speak with the HR department at your company.
  Exempt Non-Exempt
Salary  Must be paid on salary basis Salary or hourly wages
Wage Make at least $23,660/yr or $455/wk* Paid at least federal minimum wage
Job Management-level operational position Non-managerial position
Overtime Not entitled to overtime pay Entitled to applicable overtime pay rates

 *A 2019 Department of Labor proposal would increase the current salary threshold for exemption to $35,308/yr or $679/wk. For more information, review the DOL Overtime Update Proposal.