There are distinct differences between exempt and nonexempt employees. The federal Fair Labor Standards Act governs most of the workers in California and determines if employees are entitled to be paid according to minimum wage standards, including overtime pay, or whether they should be paid salaries. Workers who have concerns about employment misclassification and its affect on their pay checks may be interested in the difference between the two classifications.
Nonexempt employees are those who are paid by the hour, and they must be paid minimum wage for up to 40 hours per week. Any work done past the 40 hours must by paid at time and one-half of the employee's regular pay rate. Under FLSA rules, those employees who log hours above the weekly 40 hours and are not paid at this rate may file claims with the U.S. Department of Labor in order to seek justice.
Exempt employees are not generally protected under FLSA guidelines, and they are not eligible for overtime pay. There are three characteristics that define an exempt employee: one who is paid at least $23,600 per year, one who is paid on a salary basis and one who performs exempt job duties. Exempt job duties typically include high-level business functions within a company. These include executive, professional and administrative duties.
Executive duties typically mean that an employee supervises two or more employees, has the primary responsibility of management and has significant input into another employee's job status. Professional duties are defined by employees that have advanced education or training, such as physicians, teachers and architects. Administrative duties are exhibited by employees who perform functions at much higher levels than those performing clerical duties. This can include those in human resources, accounting and public relations.
Those in California who feel they are not being compensated fairly under FLSA guidelines may want to seek the advice of attorneys. There are cases in which employers may incorrectly classify employees and deprive them of appropriate wages. An attorney who is experienced in employment law and litigation will be in the best position to discuss the various legal options available.
Source: FindLaw, "Exempt Employees vs. Nonexempt Employees", Accessed on Oct. 26, 2016