Small Business Glossary and Definitions

What are Exempt Versus Non-Exempt Employees?

Under the federal Fair Labor Standards Act (FLSA), employment status is distinguished between exempt and non-exempt employee classifications.

For non-exempt employees, the FLSA at minimum requires payment of the federal minimum wage, overtime pay for more than 40 hours in a workweek, restrictions on child labor, and specific recordkeeping requirements for non-exempt employees.

FLSA defines several classes of exempt employees that are not covered by the Act, typically executives, professional, administrative, or other highly compensated employees.

State laws and employee bargaining agreements can also exceed the protection standards and definitions of FLSA, but they cannot reduce the protections.