What is an exempt versus nonexempt employee? How do you determine if you are an exempt or nonexempt employee? Does being paid a salary have anything to do with it?
The Fair Labor Standards Act (FLSA) was passed in 1938 as part of President Franklin D. Roosevelt’s New Deal. This legislation was the beginning of establishing federal minimum wage laws. Today, it also governs a 40-hour workweek, guarantees time and a half for overtime pay, in certain jobs, and prohibits child labor.
Who Does the FLSA Protect?
The difference between an exempt employee and a nonexempt employee is defined by both federal and state laws. The state of Tennessee does not have its own laws governing wage and hour issues. Nevertheless, most workers in Tennessee are still subject to federal wage and hour regulations.
The FLSA protects any employee who is nonexempt. Nonexempt employees must be paid a minimum wage and overtime pay for any time worked beyond 40 hours in a given workweek. Nonexempt employees are often referred to as hourly employees and may be entitled to recover back pay, liquidated damages, and their legal fees if they have not been paid what they are entitled to under FLSA regulations.
An exempt employee does not enjoy the protection of the FLSA. The Department of Labor (DOL) has set aside a list of positions that are classified as exempt from FLSA coverage, most commonly:
- High-level Executives;
- Administrative Employees;
- Professionals; and
- Outside Sales Employees
Individuals who occupy these positions are not entitled to overtime pay and are often referred to as salaried employees. However, being paid a salary does not automatically make you an exempt employee.
Though you may be paid a salary, your position must also meet certain requirements to qualify you as an exempt employee, specifically:
- With some minor exceptions, you must be paid at least $913/week or $47,476/year in salary, which cannot be reduced based on the quality or quantity of the work you perform; and
- Your job must be of an executive, administrative, or professional nature.
Salaried employees who don’t qualify as exempt are entitled to be paid overtime. An experienced employment law attorney can assist you in determining how you should be classified.
If you are being classified as an exempt employee when you are, in fact, nonexempt, your employer may be exposed to severe penalties. On the other hand, you may be entitled to substantial back pay and liquidated damages. For more information, contact an experienced employment law attorney to evaluate your case.