What determines whether an employee is classified as exempt or nonexempt under the FLSA?
An exempt employee is not entitled overtime pay by the Fair Labor Standards Act (FLSA). These “salaried” employees receive the same amount of pay per pay period, even if they put in overtime hours. A nonexempt employee is eligible to be paid overtime for work in excess of 40 hours per week, per federal guidelines.
What is an exempt federal employee?
Exempt Employee vs. FLSA Exempt Employee. One who is not covered by the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA or Act). FLSA Nonexempt Employee. One who is covered by the minimum wage and overtime provisions of the Act.
What does it mean if a position is exempt?
What Is an Exempt Employee? The term “exempt employee” refers to a category of employees set out in the Fair Labor Standards Act (FLSA). Exempt employees do not receive overtime pay, nor do they qualify for minimum wage. When an employee is exempt, it primarily means that they are exempt from receiving overtime pay.
What are the advantages of being an exempt employee?
Key takeaway: The advantages of hiring exempt employees include no overtime pay and more knowledge and responsibility. Downsides include higher pay rates and no ability to deduct pay for hours not worked.
What are the benefits of being salaried?
Salaried employees enjoy the security of steady paychecks, and they tend to pull in higher overall income than hourly workers. And they typically have greater access to benefits packages, bonuses, and paid vacation time.
What is a salaried nonexempt employee?
Employees who do not meet the requirements to be classified as exempt from the Minimum Wage Act are considered nonexempt. Nonexempt employees may be paid on a salary, hourly or other basis. Employees who do not qualify for an exemption but are paid on a salary basis are considered salaried nonexempt.
What are the disadvantages of salaried employment?
Disadvantages of Being Salaried Employee As an exempt employee, you’re expected to work the number of hours needed to complete your assigned tasks. The completion of these tasks may require a 40-hour week or an 80-hour week and that schedule may be a temporary one or an expected standard.
Is it better to have a salary or hourly?
There is no right or wrong answer when determining whether your employees should be salaried or hourly. The main difference is that you’ll offer salaried workers an annual pay that will be consistently paid throughout the year. Conversely, an hourly worker is only paid for the hours they work.
What are the qualifications to be an exempt employee?
– The employee has a guaranteed salary each week; – The employee’s hours must vary each week; and – The employee must receive an hourly rate of at least minimum wage, no matter how many hours he works
What are the rules for an exempt employee?
Receive a salary rather than hourly pay.
What is the minimum hours for an exempt employee?
Most employers expect their exempt employees to work the number of hours necessary to get their jobs done. It doesn’t matter if that takes more or fewer than 40 hours per week. Even if your exempt employee works 70 hours in a week, you are still only required to pay them their standard base salary.
What qualifies an employee as exempt?
– Professional – Administrative – Executive – Outside sales – Computer-related