What is the Difference Between Exempt and Non-exempt Employees?

While the Fair Labor Standards Act (FLSA) provides overtime and minimum wage protections for many employees, certain categories of workers are exempt from these protections. The distinction between exempt and non-exempt employees is a critical aspect of employment law impacting workers’ rights and employers’ responsibilities. Exempt employee misclassification can deprive workers of essential benefits, such as overtime pay, rest breaks and minimum wage protections. If you believe you have been misclassified as an exempt employee, the experienced legal team at Miller Shah LLP may be able to help you file a claim against your employer to recover the compensation to which you are entitled. 

Understanding Exempt Employee Classification

Employees are classified as either exempt or non-exempt, with the primary difference being how employees are paid and the type of work they perform.  This classification determines an employee’s eligibility for overtime pay, meal breaks and other labor standards. As a misclassified employee may lose out on these benefits, it is crucial for workers to understand their rights and for employers to adhere to legal standards. 

Exempt Employees

Exempt employees are typically executive, administrative, or professional workers who meet specific job duty and salary criteria. These employees are not entitled to overtime pay regardless of the hours worked beyond the standard 40-hour workweek. In California, for example, in order to be considered exempt, an employee must earn a salary equivalent to at least twice the state minimum wage for full-time employment and primarily engage in high-level tasks that require discretion and independent judgment.

Non-exempt Employees

Non-exempt employees are entitled to overtime pay, minimum wage protections, and mandatory rest and meal breaks under the Fair Labor Standards Act (FLSA) and various state laws. These protections apply unless the employee fits into a specific exemption category. For non-exempt employees, any work done over 40 hours in a workweek must be compensated at a rate of one and one-half times their regular pay.

Recognizing Exempt Employee Misclassification

Employers may misclassify employees as exempt for various reasons, often related to financial motives such as avoiding the payment of overtime or providing rest breaks.  Indicators of potential misclassification include being paid an hourly rate despite carrying out exempt duties, receiving a salary below the required minimum for exempt employees, or experiencing a change in job duties that alters exemption status.

Regardless of the reason, exempt employee misclassification has significant negative consequences for the employee. Such misclassification may result in unpaid overtime, missed rest and meal breaks, and the absence of other entitled compensations. Affected employees could be eligible for damage, including back pay for unpaid overtime, compensation for denied breaks, liquidated damages, interest, and attorney’s fees and court costs.

Understand Your Rights with Miller Shah LLP

Understanding the nuances of employee classification is vital for protecting workers’ rights and ensuring employers comply with labor laws. If you suspect you’ve been misclassified as an exempt employee or are an employer seeking to understand your obligations, Miller Shah can help. With our extensive experience and commitment to delivering sophisticated legal services, we are here to guide you through the complexities of misclassification issues. Contact us today to secure the knowledgeable legal advocacy you deserve.