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What are the differences between exempt and nonexempt employees?

All Texas employees deserve to be treated fairly in the workplace. This includes being paid appropriately for the time they put into their work. However, there are differences between exempt and nonexempt employees that are important to know.

Explaining nonexempt employment

According to the Fair Labor Standards Act (FLSA), a nonexempt employee is paid on an hourly basis. Many of these workers perform jobs that are routine and repetitive. Employers are required to pay overtime to nonexempt employees who work over their normal eight-hour workday or 40-hour workweek. Overtime pay must be 1.5 times the rate of their regular wages for each hour worked over the employee’s regular work schedule.

Nonexempt employees are often considered blue-collar workers. Some earn annual salaries but are still eligible for overtime pay for every hour they work outside of their normal daily shift or weekly hours.

Understanding exempt employment

An exempt employee performs higher-level, often professional tasks, works regular hours and earns an annual salary. Per employment law, they are not entitled to overtime pay. These employees cannot earn less than $35,568 per year or $684 per week and may be paid weekly, biweekly or even monthly depending on their employer.

The Department of Labor has a job duties test that employees are required to meet to be considered exempt. Exempt employment positions typically require little to no direct supervision and skills. Some examples of such employees include those in the legal, finance or medical fields.

Most exempt employees earn higher salaries than nonexempt employees. They are also often in positions of authority such as a professional or managerial role. Many are employed in white-collar businesses or in government agencies.

Employers must offer overtime pay to any workers who are eligible for it. If they refuse, they could be hit with penalties.