Exempt Vs. Non-Exempt

This article is a human resource and labor-related article and should not be confused with the exempt and non-exempt assets, which come into picture during bankruptcy proceedings.

Exempt Vs. Non-Exempt: The Enactment

In the United States of America, human resource and labor laws are governed by the Fair Labor Standards Act (abbreviated as FLSA). The intention of this enactment is to govern labor-related issues such as overtime, minimum wages, child labor protection, etc. The difference between exempt and non-exempt employees has been defined by this act. It must be noted that the Fair Labor Standards Act is a federal act and applies to almost all employed people in the United States. Your employer will be able to furnish you with the printed provisions and facts of this enactment.

Difference Between Exempt and Non-Exempt Employees

The FLSA defines two categories of employees, namely the exempt ones and the non-exempt ones. It is advisable that you become aware about your category.

The differentiation non-exempt vs. exempt is based upon wage rate and hours, for which the employees work. Here's the basic logic of who's-who.

• Exempt Employees: From the point of view of FLSA, an employee who is exempt does not come under the jurisdiction of FLSA. As the person does not come under the scope of FLSA, it is not mandatory for the employer to grant 'general employee benefits' (bonus, incentives, increments, allowances, etc.) to such employees. Irrespective of the law some employers provide the exempt employees with some partial benefits. The fact that whether an employment is an exempt one or a non-exempt one is disclosed by the employer during the recruitment process. Some work profiles are however specially safeguarded under the scope of FLSA, and employers cannot appoint an exempt employee at such a position. Although the exempt employees do not come under the jurisdiction of FLSA, general labor laws such as work time doctrine and wage dates apply to them.
• Non-Exempt Employees: Non-exempt employees lie within the scope of FLSA and all provisions thereof. Such employees are entitled to a minimum pay that is prescribed by the act. In addition to that, such employees are also entitled to a working time limit of 40 hours per week, divided into a daily quota as prescribed by the act. In addition to these provisions, it is mandatory for the employer to pay a monetary consideration for additional hours worked that exceed 40 hours. The rate of payment is half of the usual rate and is in accordance with the unit of hours. The FLSA is also subject to changes and amendments, as and when the rightful legislative body initiates to amend it.

Examples

Exempt employees are the ones who work on the basis of workload. These employees are basically not full-time employees and many of them are also seasonal. For example, extra workers hired during peak seasons at an amusement park, are considered to be exempt employees. 'Outside sale' employees (also known as external sales personnel) are considered to be exempt employees while in-house sales personnel are considered to be non-exempt employees.

As mentioned above, you should definitely know whether you are an exempt employee or a non-exempt one. It is also necessary that you request your employer to furnish you with the benefits that you shall be entitled to, if you are a non-exempt employee. In order to know more, you may also check the Fair Labor Standards Act, as it would specify whether your employment status falls under exempt or non-exempt schedule.