An exempt employee has limited protection under certain guidelines of the Fair Labor and Standards Act (FLSA). They are excluded from minimum wage and overtime regulations, as well as other rights provided to non-exempt employees.
Exempt employees earn a salary rather than an hourly wage. When an exempt employee works beyond 40 hours, they are not entitled to receive overtime pay. A position is classified as exempt if it satisfies the following criteria:
Is the employee paid a minimum of $47,476 per year?
Is the employee paid on a salary basis?
What type of work does the employee perform?
To qualify as an exempt employee, the position must satisfy all the above criteria.
Exempt job duties are separated into various categories: Professional, Administration, and Executive. To qualify as an Executive Exempt Employee, the individual in the position is required to supervise a minimum of 2 employees. Management is also a primary role of the position. An employee qualifies as a Professional Exempt Employee if their position requires advanced skills and specialized education. Lastly, employees may also meet the Administration Exempt status. Employees in this role perform office work, handle matters of significance, and must exercise independent judgement when performing their job duties. There are certain positions that are completely excluded from FLSA protection including agricultural and movie theatre workers.
Exempt employees receive the same of pay every pay check, regardless of how many hours they work in a period. When an exempt employee doesn’t consistently work 40 hours a week, an employer may need to take other actions to correct the issue. Oftentimes, management enforces a strict schedule to ensure that exempt employees are working a minimum of 40 hours. In most cases, however, it is in the best interest of the company to permit a certain degree of flexibility to exempt employees so that they are better able to meet the demands of their job.