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Overview of exempt and nonexempt employees

Business owners and managers must remain abreast of anticipated changes to federal and Texas employment laws and associated regulations that were enacted in 2020 and that may be on the horizon. The U.S. Department of Labor already made changes to regulations governing exempt employees and nonexempt employees, with more alterations expected in 2021.

Overtime pay and nonexempt employees

The Fair Labor Standards Act mandates that any nonexempt employee must be paid time and half for any hours worked over 40 hours in a particular work week. If a business fails to follow this federal employment law, that enterprise can subject itself to what often prove to be relatively hefty penalties.

Categories of employees exempt from overtime pay requirement

The FLSA and associated Department of Labor Regulations exempt certain categories of employees from this overtime pay mandate:

  • Bona fide executives
  • Administrative personnel
  • Professional personnel
  • Outside sales employees
  • Certain highly compensated employees, the definition of which has changed from a worker who makes at least $100,000 to one who earns $107, 432 or more
  • Certain computer employees

In addition to these specific categories of exempt workers, specific types of employees in certain industries are also excluded from the overtime pay mandate established by the FLSA.

Employment laws are subject to ongoing changes. The stark reality is that a business owner or manager often is hard-pressed to keep current with changes on the federal and state level. Consequently, businesses of all types are wise to consult with experienced employment law attorneys to remain abreast of changes that impact their companies.