Definition: Certain types of employees, who are classified as exempt employees, are not entitled to overtime pay as guaranteed by the Fair Labor Standards Act (FLSA). If an employee is classified as exempt (vs. non-exempt) their employer is not required to pay them overtime pay.
Administrative, executive, and professional employees, outside salespeople and certain computer employees may be classified as exempt if they meet the following criteria:
- Employees are paid on a salary rather than an an hourly basis.
- Employees earn at least $455 per week.
- Employees are paid full salary for any week they work, regardless of how much time they work.
In addition, to qualifying for exemption from overtime, employees generally must also meet certain tests regarding their job duties and responsibilities.
Also Known As: exempt employee, exempt vs. non-exempt employee
Examples: Susan is an exempt employee, therefore not entitled to overtime pay.
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