Exempt Versus Non-Exempt Employees

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Definition: Exempt Versus Non-Exempt Employees

Exempt and Non-Exempt employees differ from each other in the form in which they get paid. Exempt employees as guaranteed by the Fair Labour Standards Act (FLSA) are not entitled to overtime pay. They are exempt from FLSA’s minimum wage laws and overtime requirements. Administrative, executive and professional employees outside salespeople and certain computer employees are positions that fall in the category.

Non-exempt employees are those that are eligible to minimum wages as well as overtime pay. According to Department of Labour, unless exempted, the non-exempt employees must get overtime pay for hours worked in excess of 40 hours in a workweek at two and a half times the normal rate.

Differentiating Factor

  • Exempt employees are not paid on an hourly basis
  • Exempt employees earn not less than $455/week
  • Exempt employees are paid for the full week irrespective of the no. of hours worked

Example: Examples of non-exempt employees would be customer service executives, office coordinators, skilled trades, technical and clerical services, etc.

Examples of exempt employees would be financial analysts, investment counsellors, program administrators, etc.

Hence, this concludes the definition of Exempt Versus Non-Exempt Employees along with its overview.


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