{"id":8065,"date":"2024-09-30T11:24:40","date_gmt":"2024-09-30T17:24:40","guid":{"rendered":"https:\/\/resource-center.blockadvisors.com\/?p=8065"},"modified":"2024-09-30T11:24:42","modified_gmt":"2024-09-30T17:24:42","slug":"exempt-vs-nonexempt-employee","status":"publish","type":"post","link":"https:\/\/hrbscaletest.hrblock.com\/resource-center\/small-business-services\/exempt-vs-nonexempt-employee\/","title":{"rendered":"Exempt vs. Non-exempt Employees: What are the Differences?"},"content":{"rendered":"\n

Under the Fair Labor Standards Act<\/a> (FLSA), there are two key categories of employees: exempt and non-exempt. These categories are sometimes called salaried and hourly and often come about in employment classification conversations. You may have seen the terms on a job requisition or heard another small business owner talk about them. While they sound like they belong in a legal textbook, the categories indicate whether an employee is covered by the FLSA\u2019s minimum wage and overtime protections.\u00a0<\/p>\n\n\n\n

Frankly, understanding labor laws can take time and effort. Fear not \u2013 we\u2019ll guide you through the nuances of exempt vs. non-exempt employees so you can better navigate how to classify small business employees correctly. If you have questions about the proper classification of any employee, contact a legal advisor.<\/p>\n\n\n\n

By the way, \u201cWhat is the FLSA?\u201d<\/h3>\n\n\n\n

The FLSA sets and enforces standards for minimum wage, overtime pay, child labor laws, equal pay, work conditions, employee tips, and other labor laws. The FLSA also requires that business owners maintain accurate employee records, like records of hours worked, wages paid, bonuses, time off, and other important payroll information. (All the more reason to outsource a payroll professional<\/a> to handle these mission-critical payroll processing tasks.)<\/p>\n\n\n\n

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Payroll services made simple<\/h3>

Cross paychecks off your small business to-do list<\/p>

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Learn more<\/a><\/div>\n<\/div><\/div><\/div>\n\n\n\n

How employee classification is determined<\/h2>\n\n\n\n

You, the employer, are responsible for ensuring that your employees are correctly classified as either exempt or non-exempt under the FLSA.  A job title doesn\u2019t determine someone\u2019s classification. Read on to hear the two tests that matter.<\/p>\n\n\n\n

Exempt employee definition<\/h2>\n\n\n
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Exempt employees receive a set salary regardless of hours worked and are exempt from the FLSA\u2019s minimum wage and overtime obligations. Exempt employees tend to hold higher-level management or executive positions within a company.<\/p>\n\n\n\n

To be classified as exempt under the FLSA, an employee must meet both a salary and duties test:<\/p>\n\n\n\n