In 2024, an employee is considered exempt if they are paid a salary above the threshold of $684 per week (equivalent to $35,568 per year) and perform specific job duties related to executive, administrative, or professional roles, making them ineligible for overtime pay.
An employee is non-exempt if they do not meet these criteria and are eligible for overtime pay when working more than 40 hours in a workweek. Non-exempt employees can also be salaried, but they must still receive overtime pay at a rate of at least one and a half times their regular rate for any hours worked over 40 in a workweek.
Exempt Employees
- Overtime Pay: Exempt employees are not eligible for overtime pay. This means they do not receive additional pay for hours worked beyond 40 in a workweek.
- Salary Basis: Exempt employees are typically paid on a salary basis, meaning they receive a fixed amount of pay each pay period regardless of the number of hours they work.
- Job Duties: To be classified as exempt, employees must perform specific types of job duties, typically in executive, administrative, professional, computer, or outside sales roles. These duties usually involve a high level of responsibility, decision-making authority, or specialized knowledge.
- Salary Threshold: Exempt employees must earn a salary that meets or exceeds a specific threshold set by the FLSA. As of 2024, the salary threshold is $684 per week (equivalent to $35,568 per year).
Non-Exempt Employees
- Overtime Pay: Non-exempt employees are eligible for overtime pay. They must receive overtime pay at a rate of at least one and a half times their regular hourly rate for any hours worked over 40 in a workweek.
- Hourly Basis or Salaried with Hourly Tracking: Non-exempt employees are typically paid hourly, meaning they are paid based on the actual hours worked. Some non-exempt employees may be salaried but still must track their hours to ensure they receive overtime pay when applicable.
- Job Duties: Non-exempt employees generally perform duties that do not fall under the categories defined for exempt status. Their work often involves routine tasks, manual labor, or roles that do not require advanced education or decision-making authority.
- Wage and Hour Protections: Non-exempt employees are protected by wage and hour laws that ensure they receive at least the federal minimum wage and proper overtime compensation for hours worked beyond 40 in a workweek.