what does exempt assignment mean

Exempt Vs. Non-Exempt Employees: What’s The Difference?

Updated: Jun 3, 2024, 1:10pm

Table of Contents

What does exempt mean, what is an exempt employee, what is a non-exempt employee, wage and hour laws, which classification is right for you, frequently asked questions (faqs).

There’s plenty of lingo that pops up when browsing employment listings, from benefits to bonuses. Another term that job seekers often see is exempt and non-exempt employee. While it may be tempting to breeze over these words, it’s important to understand the definitions for these classifications before applying for a position. We’re taking a closer look at what exempt vs. non-exempt employees are, as well as the labor laws responsible for creating them.

The Fair Labor Standards Act (FLSA) was enacted in 1938 as part of President Franklin D. Roosevelt’s “New Deal.” The law introduced several significant changes, including standards for minimum wage, overtime pay, record-keeping and child labor rules for employees both in the private sector and in federal, state and local governments. It also included standards for exempt and non-exempt employees. The technical definition of exempt means to be free from an obligation or liability which, in the case of the FLSA, specifically includes overtime pay. Employers must correctly classify their employees as one or the other, or they run the risk of accruing compliance violations.

Exempt employees are individuals who are not eligible for minimum wage, overtime regulations and other protections extended to non-exempt workers. These employees are typically part of the salary model of work, frequently seen in executive, supervisory, administrative and other professional positions. Exempt roles are not required to comply with FLSA standards, but rather it is expected that they will complete their job duties for the agreed-upon amount of pay, no matter how much time it takes.

Non-exempt employees are individuals who are eligible for FLSA requirements, including the federal minimum wage and overtime pay for working more than 40 hours per week. While most non-exempt roles follow an hourly rate model, it’s not uncommon for these employees to earn a salary or commission instead.

Labor laws provide the legal guidelines for an employer to pay its employees and include wage and hour laws. The Department of Labor (DOL) oversees and regulates these laws, which include provisions for minimum wage, overtime, paid leave and breaks. Both commercial businesses and public agencies are required to comply with these laws, and employers who do not follow them are subject to legal consequences.

FLSA Overtime Rules

The FLSA overtime rules state that employers are responsible for paying their non-exempt employees at least time and a half of their hourly rate for every hour they work over 40 hours per week. In the case of non-exempt employees who are paid on a salary or commission basis, their hourly rate can be calculated by dividing the total pay earned by the total number of hours worked. When performing these calculations, paid leave such as vacation time, sick leave and holidays should not be included unless the employee worked on those days.

Exempt Employee Overtime

Except in highly unusual circumstances, the majority of exempt employees are not eligible for overtime pay when they work over 40 hours in a week. The exception to this is known as the September 2019 final rule. In January 2020, this new DOL regulation took effect, stating that workers who do not earn at least $35,568 a year (or $684 a week) must be paid overtime, even if they’re classified as exempt, such as a manager or other professional.

There are benefits and drawbacks to both exempt and non-exempt employment, so you’ll need to weigh several factors before deciding which classification is right for you. As a general rule, exempt employees earn higher salaries and have more autonomy than non-exempt employees. While they may be able to take longer lunches or leave for an appointment in the middle of the day, they are also more likely to be required to come in early or stay late, often resulting in over 40 working hours per week.

Non-exempt employees tend to be more regulated, often needing to officially clock in and out and are only paid for the time they actually work. On the other hand, any hours beyond their mandated 40 per week means overtime pay and a higher paycheck.

Bottom Line

Both exempt and non-exempt positions have the ability to earn strong salaries, no matter what the required job functions are. Exempt employees may enjoy more flexibility, but often find themselves working over 40 hours per week for no additional pay. Non-exempt employees may have to adhere to stricter regulations, such as clocking in and out, but also know that any work over their regular hours means a heftier paycheck.

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What does exempt and non-exempt mean?

Exempt employees are not eligible to receive overtime pay under FLSA laws and they are typically paid a salary rather than an hourly wage. These employees are expected to complete a set amount of work, no matter how many hours it takes. Non-exempt employees must be paid overtime pay at a rate of at least one and a half times their regular wage for every hour over 40 that they work.

Can exempt employees earn overtime?

No, with the exception of the September 2019 rule, which states employees who earn less than $35,568 a year or $684 a week are eligible for overtime pay.

What is the difference between salary and payroll?

Salary refers to the amount of pay earned by each individual employee. Payroll refers to the process or system used to calculate and pay the salaries of all employees.

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What Is an Exempt Employee?

Understanding exempt employees.

• Exempt vs. Nonexempt
• Pros and Cons

The Bottom Line

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What Is an Exempt Employee in the Workplace? Pros & Cons

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The term exempt employee refers to a category of employees set out in the Fair Labor Standards Act (FLSA) . Exempt employees do not receive overtime pay and do not qualify for minimum wage . This is based on the type of work they perform. When an employee is exempt, it primarily means that they are exempt from receiving overtime pay. Exempt employees stand in contrast to nonexempt employees .

Key Takeaways

• An exempt employee is an employee who does not receive overtime pay or qualify for minimum wage.
• Exempt employees are paid a salary rather than by the hour, and they work in professional, administrative, executive, outside sales, and computer-related fields.
• Exempt employees stand in contrast to nonexempt employees, who must be paid at least the minimum wage, and overtime when they work more than the standard 40-hour workweek.
• The details and rules governing exempt and nonexempt employees are covered by the Fair Labor Standards Act (FLSA).
• Workers are generally considered exempt if they fall in the above categories, are salaried, and earn a minimum of $684 per week or $35,568 annually.

In any workplace, there are two types of employees: exempt and nonexempt. Exempt employees are those who are exempt from minimum wage and overtime pay requirements. This is because exempt employees are paid a salary rather than an hourly wage , and they work in what are considered executive or professional jobs. Exempt employees often receive year-end bonuses to compensate for the type of work they do, as well as for any overtime work.

Requirements vary by state, but the FLSA classifies exempt employees as any job that falls into these categories:

• Professional
• Administrative
• Outside sales
• Computer-related

These classifications are quite broad, which they are intended to be. That's because they encompass a variety of jobs in different industries. As of Jan. 1, 2022, the FLSA stipulates that employees in the above categories are exempt if they are paid by salary as opposed to hourly, and if they earn a minimum of $684 per week or $35,568 annually. In 2022, 26 U.S. states increased the minimum wage, which means this threshold changed in certain regions.

In addition to the main categories of exempt employees, other categories of employees may possibly be considered exempt from receiving overtime pay. These include farm workers, motion picture theater employees, certain employees of nonmetropolitan broadcast stations, taxi drivers, and employees of railroads, motor carriers, and American vessels. Commissioned sales employees of retail or service entities also fall into this list.

Employees who fall in the computer-related categories may be paid an hourly salary. In order to be considered exempt, hourly employees must be paid no less than $27.63 per hour.

Exempt Employees, Nonexempt Employees, and the Fair Labor Standards Act

The exempt employee category was created by the FLSA, which was passed in 1938. The watershed labor law protects workers against unfair pay practices and work regulations. The law changed greatly over the last 85 years, but it is still one of the most important labor laws in the history of the United States, setting regulations for a wide array of employee- and employer-related issues.

The FLSA specifies the conditions when workers are to be paid and not expected to be paid. For instance, when working excess hours, an exempt employee does not receive overtime or time and a half. Time and a half is 1.5 times the hourly rate of the employee—the minimum that an employer has to pay for overtime. The act marks overtime as any hours that exceed 40 hours in a seven-day workweek.

The FLSA's exemptions only apply to white-collar employees who meet the salary and job requirement tests. As such, the exemption does not apply to blue-collar workers or those who "perform work involving repetitive operations with their hands, physical skill and energy." The FLSA also excludes police officers, firefighters, paramedics, and other first responders from the list of exempt employees.

Advantages and Disadvantages of Exempt Employee Status

The pros of being an exempt employee start with the security of knowing that you have a steady paycheck. Exempt employees tend to earn more than hourly workers. They may also generally have access to such extras as retirement benefits, including:

• Individual retirement accounts (IRAs)
• 401(k) plans
• Employer-sponsored healthcare plans
• Paid vacation time and sick days

Disadvantages

The downside comes largely in not being eligible for overtime pay. Depending on the mindset of your employer, you could find yourself working long hours to fulfill an overloaded work portfolio without any recourse for additional reimbursement.

Companies are often pressured to achieve better financial results, and the first area they look at is payroll. They hire less headcount, so exempt employees end up doing the work of more than one employee. This makes overtime work the norm. Hence, many exempt employees have made the choice to leave and become self-employed as freelancers paid by the hour. This solution has worked for some people moving from employment to what is called the gig economy.

Higher pay than hourly workers

Access to employer-sponsored benefits

Not eligible for overtime pay

You may (have to) work longer hours

What Are the Requirements of Being an Exempt Employee?

The Fair Labor Standards Act classifies exempt employees as anyone doing jobs that fall into these categories: professional, administrative, executive, outside sales, STEM (science, technology, engineering, and math)-related, and computer-related. The FLSA stipulates that employees in the above categories are exempt if they are paid by salary as opposed to hourly and if they earn a minimum of $684 per week or $35,568 annually. Keep in mind that this may vary by state as 26 U.S. states increased their minimum wages in 2022.

What Are the Advantages of Being an Exempt Employee?

The advantages of being an exempt employee start with the security of knowing that you have a steady paycheck. Also, exempt employees tend to earn more than hourly ones and have access to extras such as retirement benefits, including individual retirement accounts, 401(k) plans, and pensions; bonuses; employer-sponsored healthcare plans; and paid vacation time and sick days.

What Are the Disadvantages of Being and Exempt Employee?

The main disadvantages lie in not being eligible for overtime or qualifying for minimum wage. Depending on the mindset of your employer, you could find yourself working long hours to fulfill an overloaded work portfolio without any recourse for additional reimbursement or reducing the stress brought on by the long hours. In short, you are at the mercy of your boss.

Exempt employees have the advantage of a steady income stream and generally earn more than nonexempt, or hourly, employees. Full-time and many part-time exempt employees also typically have access to retirement benefits like 401(k) plans, bonuses, and employee-sponsored healthcare plans, as well as paid time off in the form of vacation and sick days.

The main downside of being an exempt employee is not being eligible for overtime pay. However, for most employees, the benefits of exempt status likely outweigh that potential negative.

U.S. Department of Labor. “ Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA) ,” Page 1.

U.S. Department of Labor. “ Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA) ,” Pages 1-3.

Federal Register. “ Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees: I. Executive Summary .”

Wolters Kluwer. “ More than Half of U.S. States to Institute a Minimum Wage Increase in 2022 .”

U.S. Department of Labor. “ Fair Labor Standards Act Advisor .”

U.S. Department of Labor. " Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA) ," Page 2.

U.S. Department of Labor. “ Wage and Hour Division: History .”

U.S. Department of Labor. " Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA) ," Page 3.

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Modifying Grades: Clearing Attempts, Overriding Grades, and Exempting a Grade

NOTE: Blackboard 9’s performance—especially on the Grade Center—is dependent upon the processing power of the computer you use. For optimal performance, before you login to Blackboard, we suggest that you close any unnecessary programs, tabs, or browser windows. For even greater performance improvements, use a modern, up-to-date web browser and do not use Internet Explorer 7.

• In Grade Center, locate the cell containing the student’s test grade to clear.
• Move the mouse pointer over the cell to see the Action Link.
• Click the Action Link to access the contextual menu and select View Grade Details.
• On the Grade Details page, under the Edit tab, locate the Clear Attempt button adjacent to the attempt of interest. (NOTE: There may be more than one Clear Attempt button if you enabled Multiple Attempts on a Test or Survey.) Select Clear Attempt. A warning message appears.
• To return to the Grade Center, click Return to Grade Center at the bottom of the page, or use the breadcrumbs.

Topic: Overriding Grades

• In Grade Center, locate the cell containing the student’s graded test to override.
• Click the Action Link to access the contextual menu then select View Grade Details.
• On the Grade Details page, click the Manually Override tab.
• In the Override Grade cell, enter a different grade.
• Optionally, enter Feedback to User which explains the grade change.
• Optionally, enter Grading Notes for yourself.
• Click Save.
• The screen redraws and the newly entered grade is now the Current Grade.
• In the Grade Center column, the new grade is shown with a Cell Modified Icon in the cell’s corner, indicating the grade has been modified. The icon can be deleted using the contextual menu and selecting Clear Cell Modified Icon.

Topic: Exempting a Grade

You can exempt a grade from a student’s record. When you exempt a grade, the grade is ignored in all Grade Center calculations. The grade cell displays a blue square.

The grade remains available on the Grade Details page, and you can clear the exemption at any time.

• In the Grade Center, click the item’s Action Link
• Select Exempt Grade.
• A small blue rectangle will replace the value [grade] exempting the student’s grade, for this cell [grade] only.

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Exempt vs. Nonexempt: What Is the Difference?

An employee's salary level, salary basis and job duties determine whether they're exempt or nonexempt.

Table of Contents

It is an employer’s responsibility to accurately determine whether an employee should be classified as exempt or nonexempt. An employee’s classification as exempt or nonexempt is not a matter of preference or choice ― the Fair Labor Standards Act (FLSA) has stipulations that determine and regulate each classification.

Although some regulations vary by state, you must follow some essential rules when determining how to classify and compensate your employees.

What are exempt employees?

Exempt employees are paid a regular salary, a predetermined amount of money distributed regularly throughout the year. Because salaried employees aren’t paid hourly, their earnings aren’t calculated based on the minimum hourly wage . However, salaried employees must make over a specific threshold in each state to be considered “exempt.”

Unlike hourly workers, exempt employees don’t receive overtime pay for working additional hours in the week. “Exempt” means the employee is exempt from overtime pay requirements. The FLSA regulates which employees are exempt and which are nonexempt.

>>Learn More: Hourly to Salary Calculator

What are nonexempt employees?

Nonexempt employees are entitled to a minimum hourly wage and overtime pay calculated at 1.5 times their hourly pay rate. They are often paid hourly for the precise time worked in a pay period . An employee’s nonexempt status and eligibility for overtime pay are subject to state and federal standards.

>>Read About: Salary to Hourly Calculator

Overtime pay: Exempt vs. nonexempt employees

One of the primary differences between exempt and nonexempt positions is their compensation structure. Under federal guidelines, employees with exempt status must earn at least $684 weekly. That amount may be higher in certain states with a higher cost of living (and minimum wage).

Brian Cairns, founder of ProStrategix Consulting, says employees with exempt status aren’t entitled to a higher pay rate for overtime. Nonexempt employees must earn at least minimum wage and are eligible for overtime pay. 

“Overtime is paid at time and a half once a nonexempt employee works more than 40 hours a week or on specific holidays,” Cairns explained. “This was the basis for the old classification of white-collar vs. blue-collar workers.”

Overtime pay rules are set in the FLSA. The baseline is that overtime is paid at 1.5 times the pay rate for every hour worked above 40 hours in a 168-hour consecutive workweek.

As of 2020, employers can pay bonuses to nonexempt employees on top of their regular pay. Visit the United States Department of Labor (DOL) overtime pay webpage to learn more.

How to classify exempt vs. nonexempt employees

According to the FLSA’s exempt vs nonexempt information , three fundamental tests can help you determine whether an employee should be classified as exempt or nonexempt:

• Salary level test: An employee must earn more than $35,568 per year ($684 per week) to qualify as exempt.
• Salary basis test: An employee must receive a guaranteed minimum compensation, regardless of the time worked, to qualify as exempt. 
• Exempt executive duties: The employee supervises two or more other employees as a regular part of their job.
• Exempt professional duties: The employee performs intellectual activities that require specialized education and the use of discretion and judgment.
• Exempt administrative duties: The employee performs support operations for significant matters that require the use of discretion and judgment.

“To be considered exempt, an employee must meet the requirements of all three tests,” explained Joshua Gerlick, a doctoral student of nonprofit management and a Fowler Fellow at Case Western Reserve University. “However, the application of these tests is often complicated and a business owner should consult with their legal advisor to determine specific applicability to a specific job function.”

In September 2023, the DOL proposed revisions to the FSLA’s rules surrounding overtime and minimum wage requirements for executive, administrative and professional workers. The proposed changes include the following:

• Increasing the minimum salary requirements for exempt employee status to $1,059 per week or $55,068 per year. 
• Increasing the compensation requirement for what’s classified as highly compensated employees to $143,988 per year. 
• Introducing a process for automatically adjusting salary thresholds every four years to align with current wage data.

While these changes have not yet gone into effect, employers should keep an eye on them to remain compliant. 

Pros and cons of exempt employees

Although the “exempt” employee classification may seem ideal for some employers, this is not the case for everyone. There are benefits and drawbacks to hiring (and working as) an exempt employee. 

Employer considerations with exempt employees

• Pro: Exempt employees ensure high-level output while maintaining a fixed budget. 
• Con: Exempt employees typically cost more than their nonexempt counterparts, primarily because they’re expected to use discretion and judgment in executing their duties.  

Employee considerations with exempt status

• Pro: Exempt employees benefit from paycheck stability, benefit eligibility and standard business hours.
• Con: Employees with exempt status generally have less flexible work schedules than nonexempt employees, depending on their job duties. They may also work over 40 hours a week without receiving extra pay for their efforts.

Pros and cons of nonexempt employees

While hiring nonexempt employees may make more sense for some workplaces, it could also bring unique drawbacks. Consider the following advantages and disadvantages. 

Employer considerations with nonexempt employees

• Pro: Hiring a nonexempt employee offers flexibility for employers because there is no minimum requirement for how many hours they should work each week. You can pay a nonexempt employee an hourly rate (minimum wage or higher) and schedule them based on your company’s needs.
• Con: Employers must deal with federal overtime rules when hiring nonexempt employees. You will likely need to implement a time and attendance system to accurately monitor and track employee hours to ensure they’re fairly compensated for their time. 

Employee considerations with nonexempt status

• Pro: Nonexempt employees can work overtime and receive proper compensation for every hour worked. 
• Cons: Since hours can vary from week to week, nonexempt employees may not have a stable or consistent paycheck. Their work hours may not adhere to standard business hours. In some states, they may not be entitled to paid vacation or sick time.

When to hire exempt or nonexempt employees

According to Cairns, some jobs are legally required to be exempt and can only be hired as such. However, for positions that can be modified to fit one category or the other, Gerlick says business owners must decide which is more important: flexibility or expertise. Review the necessary duties a position entails and the type of payment you’d prefer ( salary or hourly ).

“Hiring an hourly wage employee whose duties are nonexempt gives owners the option to adjust working hours according to demand ― perhaps scheduling 15 hours for one week and 35 hours the week thereafter,” Gerlick explained. “Despite the added cost, hiring a salaried employee whose duties are exempt fixes the labor cost regardless of the required time for the employee to accomplish a given objective.”

Consider the following when deciding between exempt and nonexempt classifications: 

• Nonexempt employees: As a rule of thumb, nonexempt employees are better suited to hourly, temporary or seasonal work. 
• Exempt employees: In contrast, exempt employees are more suited to long-term positions with executive, administrative or professional duties. Employers must differentiate these positions based on their duties. 

Business owners often make the mistake of designing a job that qualifies as exempt but not allowing the employee to exercise the judgment and discretion commensurate with the position’s description. This mistake can be costly: If the employee takes legal action, they can use the FLSA to support their claims against you.

“If employers are unfamiliar with the particulars of the FLSA, they should retain competent human resources counsel to review job descriptions and occasionally audit job duties to ensure the applicability of existing classifications,” Gerlick advised. “Proactivity is crucial. Issues don’t typically arise until an unhappy employee files a lawsuit.”  

The importance of classifying employees correctly

According to Gerlick, it’s crucial for business owners to carefully design job titles and job descriptions that fall clearly into either the exempt or nonexempt category to avoid misconduct and legal ramifications.

“Misclassification of employees is costly and penalties can be retroactive ― potentially back to the beginning of an employee’s date of hire,” Gerlick cautioned.

While there’s no legal obligation to designate employees as exempt, miscategorizing a nonexempt employee could have severe consequences. You may owe employees retro pay for overtime hours going back up to three years. You could also face a $1,000 fine per violation. Misclassified employees may likewise choose to take you to civil court. 

Navigate compensation carefully

Even if you don’t face legal consequences, classification issues could leave employees feeling undervalued ― or worse, cheated out of fair pay. Transparency surrounding a role’s exempt or nonexempt status, as well as your company’s overtime policy, may prevent problems later on. 

Including a position’s classification in the job description typically is a good idea so applicants know what to expect. For nonexempt employees, it’s also essential to establish overtime guidelines. Many employers either don’t allow employees to work over 40 hours a week or require approval in advance. That way, you could avoid a surprise bill.

Finally, check in with exempt and nonexempt employees regularly about their workload and maintain compensation policies that work for everyone. 

Cailin Potami contributed to this article. Source interviews were conducted for a previous version of this article.

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Exempt vs. non-exempt employees: what’s the difference, and why does it matter?

If you have team members in the United States, you need to understand whether they are classed as exempt or non-exempt employees.

But what exactly does that mean? And, more importantly, why does it matter?

In this article, we’ll explain the differences between the two, and lay out what impact the classification has on your payroll, compliance, and administration.

So let’s jump right in.

• What is exemption?

In the US, exemption refers to two types of employee: those who are eligible for overtime pay (non-exempt), and those who are not (exempt).

This distinction is defined under the federal Fair Labor Standards Act (FLSA). It is designed to protect non-exempt employees from unfair labor practices, by ensuring they are paid fairly when required to work overtime.

Distinguishing factors between exempt and non-exempt employees

Why is this important, understanding the flsa, flsa compliance with remote.

Let’s break this down further.

What is an exempt employee?

An exempt employee, as defined by the FLSA, usually holds a salaried position and is “exempt” from overtime pay regulations. 

To qualify, the employee must earn more than the current federal exemption threshold of $684 per week, although in some states — Alaska, California, Colorado, Maine, New York, and Washington — the threshold is higher. 

Eligibility is also defined by the duties and responsibilities of the role. Exempt employees usually perform high-level tasks that require independent judgment and expertise, and often carry executive, professional, or administrative responsibilities. 

For example, a manager who oversees and makes key decisions in a certain department will likely fit into the “exempt” category. The distinction of being an exempt employee means that pay isn’t tied to the number of hours the employee works. 

What is a non-exempt employee?

Non-exempt employees are typically paid hourly and, under the FLSA, are entitled to state minimum wage.

If they work more than a standard 40-hour work week, non-exempt employees are also entitled to overtime pay, which is calculated at a minimum of one-and-a-half times their regular hourly rate. 

Instead of job duties, the main feature of non-exemption is the correlation between hours worked and compensation. This classification plays a vital role in protecting workers from being overworked without adequate compensation, and guarantees fair labor practices across industries.

If you’re still unsure whether your employee should be classed as exempt or non-exempt, consider the following:

Job duties and roles

Exempt employees typically have high-level responsibilities that might involve regular decision-making. As a result, they usually possess specialized education or knowledge. 

Additionally, exempt employees are often required to exercise independent judgment in their role. For instance, administrative employees who formulate company policies or manage significant aspects of business operations are typically classified as exempt. 

On the other hand, non-exempt employees usually perform tasks that are more routine and supervised. Their roles might include following set procedures and guidelines without the same level of decision-making authority as an exempt employee. 

For example, a customer service representative following a script or a technician performing specific tasks under close supervision would typically be considered non-exempt. 

It’s important to note that an employee’s job title has no bearing on whether they are considered exempt or non-exempt. Rather, their status depends on their actual level of responsibility and specific duties.

Compensation and overtime

As mentioned, exempt employees are often salaried employees and aren’t eligible for overtime pay — regardless of how many hours they work. This means their compensation is fixed based on their salary agreement.

Non-exempt employees, however, are generally paid hourly and entitled to overtime pay. This means if they work more than 40 hours a week, they must be paid at least one and a half times their regular pay rate for each extra hour. In some states, these rates are slightly higher.

Note that the federal salary exemption threshold is due to change in 2024 (see “Proposed changes” section below).

Work schedules and flexibility

Exempt employees often enjoy greater flexibility in their work schedules than non-exempt ones. Since their compensation isn’t directly tied to the number of hours they work each week, they have more freedom to manage their own time. 

This flexibility allows them to adapt their schedules to meet personal needs or work demands. But it can also lead to longer weeks. Many executive employees, for instance, regularly work beyond the standard 40-hour workweek without receiving additional compensation.

In contrast, hourly employees typically have more structured work schedules, and their time is usually tracked. This structured approach ensures compliance with hourly wage tracking and overtime regulations. 

Hourly workers are also often required to take scheduled rest breaks and adhere strictly to a 40-hour workweek so they don’t veer into overtime unless necessary.

Exemption status impacts your payroll and compliance.

Generally speaking, exempt employees provide businesses with predictable payroll. Employee salaries remain fixed, regardless of hours worked. 

However, non-exempt workers — who are often hourly employees — require careful management to adhere to overtime rules. This means tracking their hours accurately to prevent unexpected overtime costs.

If you fall foul of FLSA regulations, you may be exposed to significant financial penalties. The Department of Labor (DoL) has the authority to impose fines on employers found in violation of the FLSA, as well as additional damages determined in court.

In addition, you may face lawsuits from aggrieved employees who are entitled to back pay. 

To ensure that you are running your payroll correctly and complying with the FLSA, you need to have a basic understanding of the law itself.

Here’s what you need to know.

Federal minimum wage

The FLSA establishes the federal minimum wage, which is currently $7.25 per hour. This serves as the minimum pay that employers must provide to their employees. 

Note that this is the federal minimum; many states set higher minimum wages (and review them annually). In instances where the state minimum is higher than the federal minimum, employers must pay the state minimum.

Hour regulations

The FLSA sets out several rules regarding working hours. This includes defining the full-time workweek, and prescribing requirements on how to record hours worked. These provisions are in place to ensure that employees receive fair compensation for their time, especially in cases involving overtime hours.

Youth employment

The FLSA also includes provisions concerning youth employment. Specifically, it outlines the types of permissible work and the maximum hours per week for individuals under 18. These regulations are designed to protect young workers from exploitation and exposure to hazardous working conditions.

Employer responsibilities

As an employer, adherence to the FLSA is not just a legal requirement; it’s an ethical responsibility, too. You must ensure your non-exempt employees are paid at least the minimum wage, and that they are fully compensated for any overtime. 

In addition to these requirements, you must also maintain precise records of hours worked and wages paid to all employees. These records are essential for demonstrating compliance with labor laws, and can even serve as evidence in disputes or investigations.

Proposed changes

As mentioned, aspects of the FLSA are currently being reviewed by the US government. Under proposed changes by the DoL, the federal salary threshold for exempt workers is expected to rise from $684 to $1,059 per week, which will expand overtime eligibility to more employees. 

This is a significant change, as many currently exempt employees will become eligible for overtime pay.

These changes are expected to be implemented in 2024.

If you have employees in the US, it’s important to understand the difference between your exempt and non-exempt employees, and manage their status accordingly.

Remote can streamline and simplify this process for you. With our platform, you can easily track your employees’ attendance and hours, and pay them quickly and compliantly without the headache of manual calculations and deductions.

We can also help you hire and onboard quickly, provide attractive benefits, and manage the day-to-day HR needs of your workforce. 

To learn more about how we can simplify your payroll and HR needs, speak to one of our friendly experts today !

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• Apr 10, 2023

When Time and a Half Doesn’t Apply: Exempt vs Non-Exempt

Updated: May 30, 2023

By: Sean Hansen, HR Compliance Coordinator

Summary: the article discusses the exemptions from overtime pay under the fair labor standards act (flsa) in the united states. it explains the criteria for exempt vs non-exempt status based on job categories, emphasizing the importance of meeting specific tests and salary thresholds. the article also highlights the consequences of misclassifying employees and provides recommendations for ensuring compliance..

Have you ever wondered why some people aren’t eligible for overtime (exempt vs non-exempt)? They can work as many hours as they’d like, but no matter what, they won’t earn that prized time and a half. What makes them exempt from overtime? Is it profession? Income? Something more complicated? Let’s talk about it.

How We Got Here

The split between exempt and non-exempt employment classification comes from the Fair Labor Standards Act (FLSA), established back in 1938. It’s the federal law that established minimum wage, recordkeeping standards, and the most relevant subject to this article: overtime pay.

This is the portion that says overtime pay must be granted to any person working over 40 hours a week, and when working overtime, they cannot be compensated less than time and a half of their regular wage. This all applies to what we would regularly refer to as “non-exempt employees”. They are protected by the law against overtime work without compensation. However, the FLSA provides an exemption to the rule, and that’s where we can begin unraveling what it means to be “exempt”.

Who Can Be Exempt?

The FLSA says in order to be exempt, the employee must be employed in a “bona fide executive, administrative, or professional capacity”. It also includes exemptions for outside sales, computer, and highly compensated employees. We’ll talk about what each of those means soon, but it’s important to note a few things about this law. First of all, each category has a series of tests to determine whether or not an employee’s role falls into the exemption. Secondly, these exemptions granted under the FLSA only applies to white-collar workers. Manual laborers, electricians, carpenters, and other professions colloquially referred to as “blue-collar workers” do not qualify for exempt status, no matter how high they are paid. The FLSA defines blue-collar work as “involving repetitive operations with their hands, physical skill and energy”. Exemption also does not generally reply to first responders, such as police or firefighters.

We’ll talk about it later in this article, but there’s a point that is too important to only mention once. All of this information, unless otherwise stated, is specifically derived from the FLSA. That is a federal law, so while it applies to all states, it gets tricky when considering state-specific requirements. When it comes to state versus federal law, remember: the more generous benefit supersedes the less generous one. If your state, for example, provides a higher minimum wage than the federal amount, you have to follow the state law.

The Salary Test

Let’s create a hypothetical situation. You have a position that you are not sure if it should be classified as exempt or non-exempt. You’ve confirmed it doesn’t classify as a blue-collar job, so it does potentially qualify. The first test that every category (except for outside sales employees) has to pass is what is known as the salary test. This states that in order to be exempt, qualified employees have to make at least $684 a week ($35,578 a year!) The FLSA notes up to 10% of this compensation can be satisfied by non-discretionary bonuses and incentive payments. However, some states have stricter rules. Colorado, for example, upped the requirement to $50,000 a year for 2023. For more information on state salary thresholds, check out our blog post.

Here's a topical example of failing the salary test. An employee was making over $200,000 a day, well with in the pay scale laid out in the FLSA. However, the employee was being paid on a daily basis. The Supreme Court ruled that the employee should not be classified as exempt. Even though he was being paid a handsome amount, being paid daily is not the same as being paid on a salary basis, and does not meet the salary test under the law. For more information, check out this article: https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/supreme-court-helix-flsa-exemption.aspx

Once the salary test is passed, the next question is to determine which category the position might apply to. There are a few special rules, but for the majority of positions, they will fall under one of three categories: executive, administrator, or professional. Each of these has its own set of qualifications the position must meet in order for it to be considered an exempt position.

Do You Have What It Takes To Be An Executive?

What do those categories actually mean? Let’s start with an executive. According to the FLSA, they have to meet three qualifications, in addition to the salary test. First, the employee’s primary duty needs to be managing an enterprise, or at least a recognized department/subdivision of said enterprise. Notice the terminology; the department has to be “customarily recognized”, which means it can’t be a group of employees that are asked to perform a series of duties on occasion. It needs to be a permanent unit with a defined function. Second, an executive must regularly supervise and direct two or more full-time employees. These employees must be full-time, or the combination of employees must equal the equivalent of two full-time employees. The FLSA provides an example of this; two part-time employees are equal to one full-time employee, so an executive managing one full-time employee and two part-time employees would qualify for the exemption. Finally, the executive has to have hiring and firing powers, or if not, their recommendations must be given a “particular weight”. Multiple factors go into determining “particular weight”, and the FLSA doesn’t spell all of them out. Some of the factors include the frequency of such recommendations, or if making the recommendation is part of the job.

It should be noted that there exists a special rule for business owners. An employee who owns at least 20% equity in the business that employs them, regardless of the type of business, is considered an executive and qualifies for the exemption.

For All The Administrators Out There

There are a lot of people whose job falls under administrative work. For the exempt ones, after they pass the salary test, they must meet two additional requirements. Their primary duty must be office/non-manual work, and that work must directly relate to the business operations of the employer or their customers. This means consultants or advisors that work with their business’ clients can possibly qualify as exempt. The second requirement is that the employee must use discretion and their own judgment when performing their primary duties. Much like “particular weight”, whether or not the employee exercises their own judgment is determined by a number of factors, but generally it means they are allowed to make an independent choice that is unaffected by their supervisor or other direct superiors. This decision can be overturned later by a superior, as long as they came to that decision on their own.

Much like the executive exemption, there is a special rule that exists for administrators in educational establishments. They actually can qualify for the exemption if they meet the salary test, or at least a salary equal to the entrance salary for teachers in the same school. This means the FLSA allows them to be paid less than the $684 a week and still qualify as exempt- but remember, this is federal law. Your state might have stricter rules regarding exemptions. For example, Colorado does not allow administrators in educational establishments to be paid less than $961.54 a week. Consider contacting your state’s Department of labor, or if you are a Vida HR client, contact your HR Business Partner.

A Bona Fide Professional

The FLSA splits up a professional into two categories: a learned professional and a creative professional. Both of them need to meet different requirements to qualify as exempt. For the learned professional, in addition to the salary test, they need to work in a field where their primary duty requires advanced knowledge that requires using independent judgment. That advanced knowledge can be in a field of science or other learning, but either way, must be gained through “a prolonged course of specialized intellectual instruction”. To break down some of those terms, “advanced knowledge” means work that is predominantly intellectual, which differentiates it from jobs that involves routine work. Generally, work that requires advanced knowledge requires the employee to use said knowledge to “analyze, interpret, or make deductions”. The FLSA also makes a point to say this sort of knowledge cannot be gained in high school. Continuing on, “fields of science or learning” includes many different occupations that fall under that umbrella, but at its core, it is a field that has a recognized “professional” status and can be distinguished from skilled trades.

Finally, let’s break down what they mean by a “prolonged course of specialized intellectual instructions”. Having an academic degree in whatever field is the best way to tell if someone passes this test, but that’s not the only way. If the employee works in a field that requires the same level of knowledge and work, and the knowledge was obtained through a combination of experience and instruction, then they may also qualify. “Combination” is key, as the exemption cannot apply if they only acquire the knowledge through work experience.

Moving on to the creative professional, they only have one additional requirement after the salary test. Their primary duty has to be work that requires “invention, imagination, originality, or talent”, in a recognized creative field. Determining exactly what qualifies is usually on a case-by-case basis, since pinning down exact requirements for creativity is very difficult. To give some examples, actors, musicians, and writers usually meet the requirement.

Teachers also fall under the professional exemption, as long as their primary duty involves instructing or lecturing for the sake of imparting knowledge, and if they are working at an educational establishment. Much like the administrators in educational establishments, teachers do not have to pass the salary test under the FLSA. To hammer the point home, all of this is strictly federal law. If a state has a stricter requirement, you must follow that one.

It’s important to note the FLSA has a section detailing practicing law or medicine, in which they qualify only if they hold the license/certificate and are actively practicing, or at least in an internship or resident program for the profession. The salary test also does not apply to them, at least with respect to federal law.

But Wait, That’s Not All!

The FLSA also denotes three other exemptions in addition to the executive, administrative, and professional categories. Employees working in the computer or outside sales fields, or a highly compensated employee, also can qualify.

For computer employees, there are a few requirements they need to meet. First, they can either be paid on a salary or hourly basis, but no matter how they're paid, they have to meet the minimum pay threshold. If they are hourly, then they must be paid at least $27.63 an hour.

Second, they must be employed as a computer systems analyst, computer programmer, software engineer, or similarly skilled computer worker, as long as it meets the primary duties of a computer employee. Those duties must consist of one of three requirements or a combination of those requirements:

The application of systems analysis technics and procedures.

The design, development, testing, modification, analysis, or documentation of computer systems based on user or system design specifications.

The design, documentation, testing, creation, or modification of computer programs related to machine operation systems.

For outside sales employees, the requirements are a little different. For one, they are not required to meet the salary test. Instead, their primary duty has to be making sales. The exemption also includes employees whose primary duty is obtaining orders or contracts, for the purposes of gaining services or use of facilities. This is as long as a promised amount will be paid to the client or the customer. The second requirement is that the employee must complete outside sales regularly away from their company’s place of business. This means the salesperson cannot make sales by phone, mail, or online at a fixed site, as those would be considered a place of business. This includes a remote workspace because even a home office if regularly used by the outside sales employee to conduct business, is considered an extension of the employer’s place of business.

Finally, there’s a special exemption in place for highly compensated employees. Highly compensated is defined as being paid a total annual compensation of $107,432 or higher ($112,500 for Colorado employers). These employees must still make at least $684 per week as defined in the salary test, or the applicable state threshold. Their primary duty must be office or non-manual work, and they must regularly perform one of the duties of an exempt executive, administrator, or professional. It’s important to note that while the $107,432 minimum can include bonuses and other nondiscretionary compensation, it cannot include credit for board or lodging, payments for insurance, or fringe benefits. In addition, the weekly base salary must be paid in its entirety and can’t be substituted by bonuses or incentive payments.

When You Are Still Unsure

Sometimes, it’s just not quite clear if the employee’s role falls into an exempt category. So what do you do? Well, you can always consult an HR professional, and if you are a Vida client, your HR Business Partner can help make the determination. At the end of the day, if you really can’t tell, and you are worried about misclassifying your employees, go with non-exempt. There are no employer penalties for classifying a position as non-exempt when it could qualify as exempt; however, the penalties can be steep for incorrectly classifying a role as exempt when it does not qualify.

The Cost Of Misclassification

What’s the worst that could happen if you fail to classify your employees correctly? The law states that employers who “willfully or repeatedly” violate the requirements can be fined up to $1,000 for each such violation. Purposely ignoring the FLSA can result in criminal charges and fines of up to $10,000.

Employees in a role classified as exempt do have the option to file suit for unpaid wages including overtime and other damages with the Department of Labor and/or a state agency. When an employee complaint is received by the DOL or a state agency, a written notice is sent to the employer to start the audit process.

A wage and hour audit typically includes requests for timekeeping records, pay stubs, any documentation the business has on how positions are or have been classified, job descriptions, and anything else the DOL or state agency asks for.

What Should You Do?

Don’t wait for an audit, if you find a position is misclassified, make corrections. Assess the job description and make sure it includes language that clearly conveys the responsibilities of the role, as well as making note that is an exempt position. Make sure to update your payroll system with the correct classification and timekeeping rules to make sure overtime hours are being calculated based on your state’s overtime rules.

Communicate the reason for the change to your employees and make a good-faith effort to look back through the last two years to capture any missed overtime wages. Vida HR can help with this process, so contact us today!

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• Schoology Learning

How Do I Use Exceptions in My Gradebook?

You can add an exception to any Assignment, Discussion, Assessment, or Test/Quiz in your Schoology gradebook to denote that a student's submission is  Absent,   Collected ,  Exempt, Incomplete,  Missing  or  Late .

Adding Exceptions

To add an exception, point your mouse over the gradebook cell and click the flag that displays.

Select an exception from the menu to place the icon in the cell corresponding to a student's submission.

• To remove an exception from your gradebook, click the exception icon, and deselect your exception from the menu.
• Entering a score on a Collected item will automatically clear the flag. For all other exceptions, you must remove the flag before entering a score.
• Collected exception code can be requested to be enabled for customers if it is not available to their district by contacting Support. Collected exception codes pass the status of Submitted with a score of zero for the material for some SIS integrations.
• If an exception code is added after a score has been entered, the score will be cleared.

Absent, Exempt ,   Incomplete and  Late exceptions do not factor into the student's overall grade in Schoology. From a calculation perspective, marking a gradebook cell as  Absent,   Exempt,   Incomplete  or Late is the same as leaving it blank. Applying either does not penalize students or affect their overall grade.

The Exempt   and Incomplete icons simply serve as a reminder to the course admin that the student has either been excused or their submission is incomplete, to help avoid later confusion as to why that cell for that student is blank or unscored.

The Absent and Late exemptions also serve as a reminder that the student was either absent at the time of submission, or submitted the assignment late.

The Collected exception enables instructors to mark an item as Collected and enter a score at a later time since entering a score automatically clears the Collected flag.

The Collected icon serves as a reminder that the student has submitted an assignment but has yet to be graded.

In the screenshots above, the green circle with the white checkmark indicates that the student's assignment has been  Collected . The green icon indicates that the student is Exempt   from completing the assignment. The orange icon indicates the student made an Incomplete submission. The Excused and Incomplete cells contain null values, meaning that neither the possible points for this assignment nor the exception code are factored into the student's overall grade.

Marking a cell as Missing , however, does penalize the student's grade. Giving a student a Missing flag is the calculation equivalent to giving the student a zero. Selecting the Missing exception also adds a zero score in the cell:

This assignment has been marked Missing in the gradebook. This student has received a 0/100 on this assignment.

• Course Administrators can disable the scoring of missing assignments as zeros by changing the Disable automatic scoring of missing exceptions as 0  setting in Grade Setup. 
• If you change this setting after any grades are entered for a course, it will affect all graded assignments for that course that have been marked as Missing. 

Using Exceptions with Overdue Items

Marking an overdue item Absent,   Exempt , Late,   Missing or Collected removes the item from a student's Overdue notifications. Marking an overdue item Incomplete does not remove the item from a student's Overdue notifications.

The following scenarios explain how teachers can use exceptions to grade missing submissions and how it affects Overdue notifications:

• Teacher A is accepting late submissions but does not want the grade calculation to reflect the missing assignment, so they should use the Incomplete exception flag. This way the student will receive Overdue notifications and their grade is not impacted.
• Teacher B is not accepting late submissions and wants the grade calculation to reflect the missing assignment, so they should use the Missing exception flag. This way the student will see the impact of the missing assignment on their grade and they will not receive Overdue notifications.
• Teacher C is no longer accepting submissions for the assignment but does not want the grade calculation to reflect the missing assignment, so they should use the Exempt   exception flag. This way the student will not receive Overdue notifications and their grade is not impacted.

Locking Assignments

Students are still able to make submissions to the item even if you have entered an exception code into the gradebook. You receive the same new assignment notifications as you normally do. If you would like to prevent students from making further submissions to an assignment, you can lock it by clicking on the gear icon to the right of the item and selecting Edit. In the Advanced row, click the Lock icon to lock down the assignment and prevent future submissions.

Using Exceptions with Auto-graded Tests/Quizzes

If a student completes an auto-graded test or quiz after you have added an exception–for example, if you mark it Missing but enable a student to make it up later–you can accept the auto-generated grade and override the exception directly from the cell in the gradebook.

A test that has an override available displays with a black dot on the Test icon in the upper-right corner of the cell.

To clear the exception and accept the score of the test, click the test icon, and select Update Grade in the window that displays. Select Keep Override to clear the new grade and remove the black dot from the test.

Select View Submission to open a new browser tab and review the student's test.

Using the Exempt Exception with Student Completion (Enterprise Only)

You can use the Exempt   exception to bypass materials on which you have set up student completion requirements. For example, if a student is absent and makes up a required assignment with a different make-up project, or a student is new to class and doesn't need to start at the beginning of a folder with completion rules.

Will Exceptions sync over to my SIS Gradebook? (Enterprise Only)

Use the table below to see how exceptions are passed back to your SIS.

• Collected Only assignments will passback the Collected exception as long as it is consumed by other SIS integrations. Otherwise, it will passback an empty column with no grades. 
• If you are expecting your students' overall grades in Schoology to be calculated as similarly as possible to the calculation in your SIS gradebook, make sure you've configured your SIS gradebook to calculate blank cells as null values, rather than as zero.
• For organizations using SIS apps that leverage the IMS Global OneRoster standard for grade passback—each SIS interprets and handles the OneRoster statuses differently. Reach out to your SIS contact directly to confirm the expected behavior in your system.

Removing Exceptions from the Gradebook

In situations where an exception has been applied to a graded item and you would like to remove that exception, you can do so by following these steps:

• Enter the Gradebook.
• Locate the item that currently has an exception mark.

Click the exception mark, and deselect it to remove it from the gradebook cell.

If you enter a score for an item marked as Exempt , Incomplete ,  Collected, Absent,  or  Late , the flag will automatically be removed.

Please note, these errors can depend on your browser setup.

If this problem persists, please contact our support.

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What Exempt Employee Status Means

Exempt Employees Are Responsible for Completing a Whole Job

Exempt employees are employees who, because of their positional duties and responsibilities and level of decision-making authority, are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA) . Whether an employee is exempt or nonexempt depends on how much money the employee is paid, how the employee is paid, and the nature and responsibilities of the work they do.

Exempt employees are expected, by most organizations, to work whatever hours are necessary to accomplish the goals and deliverables of their exempt position. Thus, exempt employees should have more flexibility in their schedules to come and go as necessary to accomplish work than nonexempt or hourly employees. 

Exempt employees also expect to have more opportunities to telecommute or work from home since the requirement to accomplish a whole job is not always dependent on the employee's working location. They expect less supervision than a nonexempt employee can expect, too.

Exclusions from the FLSA Coverage

According to the FLSA, "Particular jobs may be completely excluded from coverage under the FLSA overtime rules. There are two general types of complete exclusion. Some jobs are specifically excluded in the statute itself. For example, employees of movie theaters and many agricultural workers are not governed by the FLSA overtime rules. Another type of exclusion is for jobs which are governed by some other specific federal labor law."  

There are strict criteria for meeting the exempt qualification. A manager can't just decide to make an employee exempt for ease in calculating salary, even if the employee agrees to it. To meet the conditions for exemption requires that a job meets specific criteria.

Here are some of the jobs for people who do meet the strict criteria for classification as exempt employees. The Department of Labor excludes these jobs.

"Executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and employees in certain computer-related occupations (as defined in DOL regulations);

"Employees of certain seasonal amusement or recreational establishments, employees of certain small newspapers, seamen employed on foreign vessels, employees engaged in fishing operations, and employees engaged in newspaper delivery;

"Farmworkers employed by anyone who used no more than 500 “man-days” of farm labor in any calendar quarter of the preceding calendar year;

"Casual babysitters and persons employed as companions to the elderly or infirm."  

Examples of Exempt and Nonexempt Jobs

Here are some examples that demonstrate what makes a particular employee's job meet the strict criteria for classification as exempt employees.

• Outside sales :  If you go out and meet with customers, you qualify for the exemption. This does not apply to inside salespeople, such as call center employees. Even though these people may earn a commission, they are still eligible for overtime pay. Only salespeople who actually leave the building qualify.
• Managerial Employees :  These are people who manage two or more employees and have hire/fire/evaluation authority over them. The manager must also perform managerial tasks. In other words, a fast-food restaurant manager who spends 90% of their day running a cash register and making hamburgers does not qualify as an exempt employee.

A fast-food manager who spends 60% of their day handling employee issues, scheduling, hiring and firing, and doing other managerial tasks and 40% of her time running a cash register and making hamburgers does qualify as exempt, as long as she also meets the salary basis test.

An employee is paid on a salary basis if the employee has a guaranteed minimum amount of money that he can count on receiving for any workweek in which the employee performs any work. This amount doesn't have to be the entire compensation the employee receives, but some amount of pay the employee can count on receiving must be received for any workweek in which he performs work. 

• Learned professionals:   If you work rather independently (not completely, of course), and are a knowledge-based worker, you can qualify as exempt. Accountants (but not accounts payable/receivable clerks), doctors, lawyers, registered nurses (but not licensed practical nurses (LPNs), teachers, consultants, and similar jobs with independent responsibilities are considered exempt employment status.
• Administrative professionals:   This sounds like administrative assistants, but people in those jobs are almost always non-exempt because of the nature of their job duties. These exempt jobs refer to the people who keep the business running and are generally members of the white collar workforce. Marketing, IT, Human Resources, Finance, and other administrative personnel who require a high degree of knowledge and work independently qualify as exempt.
• Minimum salary:   In order to be exempt from overtime, your company must pay you a minimum salary level. Currently, that is $455 a week or $23,600 per year. However, the Department of Labor is considering raising that salary threshold from $455 a week (set in 2004) to $679 per week. That’s a new qualifying salary level of $35,308 per year, around $15,000 less than had previously been recommended during the Pres. Obama administration. So, stay tuned to how this legal situation plays out.

If you are a manager doing managerial tasks and earning only $35,000 a year, you will become eligible for overtime if this law goes through. It does not, however, make positions such as teachers eligible for overtime, although some of them, especially starting out, earn less than $35,308 per year.

As an employer, note that any position that pays the employee more than $100,000 a year is very likely classified as an exempt position.

More About Exempt Employees

To summarize a few specifications about the classification of an exempt employee, consider the following. Exempt employees must receive the same amount of pay every pay period, regardless of how many hours they work. ( Bonuses are allowed , but salary deductions are not except in special circumstances.)

This means if an exempt employee leaves an hour early on Tuesday, you can't dock her pay except in six specific situations. You can deduct it from her PTO bank and you can fire her, but you must pay her the full salary regardless. If an exempt employee is consistently working less than the usually expected forty hours per week, you can consider these actions.

Managers can require strict schedules from exempt employees, but it's generally better to allow exempt employees flexibility in completing their jobs. Remember, with an exempt employee it's all about the accomplishment of the job and not about the hours worked.

The rules for exemption are quite complicated and often companies make mistakes. If you feel like you should be eligible for overtime pay, ask your Human Resources department to re-evaluate your job. They should be able to justify your exempt status.

If they can't, then you're eligible for overtime pay, going backward and forwards. As a last resort, you can file a complaint with your local Department of Labor.

Exempt Employees Are Often Full-Time Employees

The FLSA does not define what is a full-time employee or a  part-time employee . What is counted as a full-time employee is generally defined by the employer policy. The definition of a full-time employee is often published in the employee handbook.

A full-time employee has traditionally worked a 40 hour work week with the expectation that exempt employees will work the hours necessary to accomplish their jobs. A nonexempt employee must be paid overtime for time worked in excess of 40 hours.

Today, some employers count employees as full time if they work 30, 32, or 36 hours a week. In fact, fewer required work hours is considered a non-standard benefit in some organizations.

In many organizations, one differentiation between full time and part time employees is eligibility for benefits such as  health insurance ,  paid time off (PTO) ,  paid vacation days , and  sick leave . Some organizations enable part-time employees to collect a pro-rated set of benefits based on their hours worked.

Hopefully, you are clear about the classification of employees in requiring exempt employment status as a result of this information.

Disclaimer:  Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a world-wide audience and ​employment laws and regulations vary from state to state and country to country. Please seek legal assistance, or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.

FLSA Coverage. " Coverage under the FLSA ." Accessed Jan 9, 2020.

U.S. Department of Labor: Wage and Hour Division. " Handy Reference Guide to the Fair Labor Standards Act ." Accessed Jan 9, 2020.

FLSA Coverage. " Coverage under the FLSA ." Accessed Jan. 9, 2020.

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Grant Exceptions and Exemptions

This information applies only to the Ultra experience.

Sometimes students face situations or events that make it difficult or impossible for them to undertake an assessment, such as submitting coursework or taking a test. Depending on the circumstances, you may need to extend their due date for the assessment, grant them an additional attempt, or excuse them from the assessment altogether. 

When special circumstances arise, you can give an individual student an exception on a specific test or assignment. An exception includes additional attempts , rescheduled due dates , or extended access , even if the assessment is hidden from other students.  

Individual exceptions for extended access are only applicable if you have set conditional availability  —show on and hide after dates— on the assessment. 

• Test with one attempt : Allow more attempts for a student who is blind and wants to use screen reader technology for the first time.
• New assessment due date: Set a new due date for a student in a regional competition, so they can submit the assessment after coming back. 
• Assignment with the conditional availability of Hide after date and time : Extend the access to an assignment for a student with internet issues. If the due date and time are the same as the originals, the submission is still marked late in the gradebook. To avoid this, you can set a new Hide after date and time.

Create an assessment exception

You can add an exception to an individual student or to a group from the assessment's Submissions page. You can also add exceptions from the grading page when grading a student's submission. 

1. From an assessment's Submissions page

From an assessment's Submissions page, open the menu in a student's row and select Add or edit exceptions . The Exceptions panel opens. To help you ensure the accuracy of an exception, the Exceptions panel features relevant information such as the course, assessment and student’s name.   

You can change the Show on and Hide after dates and times and allow additional attempts. You can also select a new due date.

More on conditional availability

2. From the grading page 

When grading an individual student submission, open the menu next to the grade pill and select Exceptions . The Edit Submission  settings panel opens. 

3. From the gradebook Grades view 

Select the student’s assessment cell to display the options menu. Then, choose  Add or edit exceptions  and the  Exceptions panel opens.

4. From the student drill-down view

Select the menu of the relevant assessment and choose Add or edit exceptions  to open the  Exceptions panel.

Example of extended access :

If you've hidden content after a certain date and time, you can extend the access for an individual student. For example, "Test 1" is hidden today after 10 AM. A student has internet issues, so you extend the access for just that student to 6 PM. However, if the due date is also at 10 AM, the submission is still marked late in the gradebook. 

In the activity stream, the student is notified about the available test, but the extended access period isn't listed in the stream or with the test. You'll need to inform the student about the length of the extended access period. You'll also need to notify students individually when you allow additional attempts. 

If you copy an assessment from one course to another, the exceptions don't carry over. Content is set to Hidden from students if you copy individual items into your course. If you copy one course into another course, student-specific data isn't copied.

Add an exception after a grade is posted

You can offer a student an exception for an assessment you've already graded and posted. For example, if you want a student to redo an automatically graded test that has no more attempts, you can add an additional attempt. 

You'll need to inform the student of the additional attempt as the system doesn't send a notification.

Exceptions and automatic zeros

If you grant a due date exception and there is already an automatic zero, the automatic zero will be removed. It will only appear if the student doesn’t make a submission by the new, extended due date.

More on automatic zeros

Exceptions vs. accommodations

Exceptions are different from accommodations you set in the course roster or student drill-down. An accommodation applies to all due dates or time limits in your course for an individual student. Exceptions are only allowed for the Show on and Hide after dates and additional attempts. 

Exception and accommodation icons 

After you allow an exception for a student's assessment, you'll see a gray clock icon next to the student's name. The accommodation icon is a purple flag.  

In the student list, if a student has an accommodation and an exception for an assessment only the accommodation icon appears. In the submission page both icons will be visible.

More on accommodations

More on how accommodations work with groups

There are times where you may need to exempt a student from an assessment or course activity due to life circumstances beyond the student’s control.  

You can excuse a student from an assessed activity by giving them an exemption. When exempted, the student’s overall calculation will adjust to ensure they are not put at a disadvantage versus their peers.  

You can exempt a student from a given task in three ways: 

• From an assessment's Submissions page, open the menu in a student's row and select Add or edit exemptions . This will open the exemptions panel.   

• From the student drill-down view, select the menu of the relevant assessment and choose Add or edit exemptions .  

• From the gradebook Grades view, select the student’s assessment cell and a menu will open. Then, select Add or edit exemptions .   

When exempting an item, the item won't be:

• included in the overall grade calculation,
• marked late for students who don't make a submission,
• assigned an automatic zero.

Students can view when they're exempted in the assessment and in the gradebook. 

The overall points possible or weighting for a student with one or more exemptions may change compared to other students. This happens because an exemption will remove the corresponding max number of points the assessment is worth from the max possible points in the course for that student.

Students can still make submissions for exempted items. You can grade and provide feedback for these submissions. However, these submissions will still be excluded from the student’s overall grade calculation. You have to remove the exemption for the grade to count toward the student’s overall grade.

Exemptions and exceptions in anonymous assessments

Anonymous grading helps to reduce grading bias. You can add exemptions for anonymous tests and assignments.

From the student drill-down view, select the menu of the anonymous assessment and choose either Add or edit exceptions or Add or edit exemptions to open the corresponding panel. 

To keep students details anonymous, the accommodations, exemptions and exceptions indicators are displayed only in the student drill-down, Grades view, and Students view.

More on anonymous assessments

Deleting attempts 

Occasionally students may submit the incorrect file for an assessment, or the submission may be otherwise corrupted. In those cases, you may wish to delete the attempt or grant the student an additional one.  

While the best practice is to grant the student an additional attempt if needed, you can delete incorrect submissions from the assessment grading section. Open the menu next to the grade pill and select Delete . 

Verifying student submissions

Occasionally students may ask you to verify their submission or claim to have made a submission you may not have seen. To find a submission, you can ask the student for the submission confirmation number and look it up in the gradebook. This number is available in the submission receipt.

More on submissions receipts

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For final grade items, grade exemptions affect the scores as follows:

• Exempted items are excluded from the calculation. These grade items are treated as empty grades, not as 0 if Treat Ungraded Items as 0 is turned on.
• If all items are exempted, there are no grades to use to calculate a final grade. The final grade will not have a score.

Exclude a grade item from the Final Grade calculation

When excluding a grade item from the Final Grade calculation, the type of calculation method used affects how you have to exclude the grade item. For example:

• When using Points calculation, grade items have the option Exclude from Final Grade Calculation .
• When using Weighted calculation, a user needs to add 0 in the weight for a grade item.
• When using Formula calculation, a user needs to not include the grade item value in the formula.

To exclude a Points-based grade item from the Final Grade calculation

• Navigate to Grades.
• For the grade item you want to exclude, click the grade item's context menu and select Edit .

Figure: Click Edit in the grade item's context menu.

• In the Properties tab, in the Grading section, select Exclude from Final Grade Calculation .

Figure: Select Exclude from Final Grade Calculation to exclude the grade item.

• Click Save and Close .

You excluded a Points-based grade item from the Final Grade calculation.

Viewing grade item statistics that include exemptions

Grade item exemptions appear in class statistics and are removed from statistic calculations.

• On the Class Statistics tab, the number of submitted grades is reduced (the exempted learner is not included); calculations, such as minimum and maximum, do not include the exempted learner; and the grade distribution excludes the students with the exempted grade item.
• On the User Statistics tab, Exempt displays in the grade column for learners with grade exemptions.

Viewing grade category statistics that include exemptions

On the Class Statistics tab, learners who are exempted from all item in a category are handled as follows:

• The number of grades submitted is reduced from the maximum number of learner who can submit.
• Calculations such as minimum and maximum do not include the exempted learner.
• Grade distribution does not include exempted learners.

When exempted from all items in a category, the learner appears as Exempt on the User Statistics page. Otherwise, the category reflects the appropriate calculations which account for the exemptions.

How grade exemptions affect release conditions

Instructors can set release conditions to release new content to learners after a grade item is complete. Since grade exemptions do not count as a completed grade item nor do they count as an incomplete grade item, there are two release conditions that are effected by exemptions:

• Grade Value on grade item
• No grade received

These release items respect the exemption and do not trigger on the presence of a grade exemption. For example, if a Grade Value on grade item condition is set on a content item, a user who is exempt from the grade item listed in the release condition will not have access to the content.

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Retrain Question

Retraining question

So I’m a 4 year contract FTA with a DOS of September 2022. I’m currently OCONUS, just selected for a base in CONUS. I tried to check my retrain eligibility and was told “Ineligible: AFI 36-2626 Section 4.1; Rule 2: Selected for non-exempt assignment. (Record Status 11).”

When I checked the chart mentioned it didn’t really clarify anything nor did I see a “record status 11”.

I believe that I’m eligible at 35 months TIS to retrain, I just wanted to make sure that I was doing my due diligence and not missing anything, as the “non-exempt” part caught me off guard.

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What is the NFL commissioner's exempt list? Who is on it?

• Keith Jenkins

Dallas Cowboys star wide receiver CeeDee Lamb has been placed on the commissioner's exempt list. What does that mean, and how does it impact Lamb's status for the 2024 season?

Here are key facts about the NFL commissioner's exempt list.

What is the commissioner's exempt list in the NFL?

The NFL's player personnel manual defines the commissioner's exempt list as "a special player status available to clubs only in unusual circumstances," according to NFL.com . The list is designed to serve as a placeholder and give NFL teams some roster flexibility. The designation prevents a player from counting against a team's active roster limit of 53 players.

How does the commissioner's exempt list work?

The commissioner's exempt list is, in effect, paid leave. While on the list, players are not allowed to play football. Instead, players are permitted to attend meetings, workouts, and receive treatments at the team facility.

Only NFL commissioner Roger Goodell -- not a team -- has the authority to place a player on the exempt list. The commissioner also has the sole authority to determine the length of a player's stint on the exempt list and when that player will return to the active roster.

A player can land on the list for a variety of reasons. It has been used with increasing regularity since 2014, when then- Minnesota Vikings running back Adrian Peterson was placed on the list for a full season amid child abuse allegations .

The list in recent years has also included Michael Vick (2009), Jonathan Vilma (2012), Greg Hardy (2014), Josh Brown (2016), Reuben Foster (2018) and Kareem Hunt (2018).

Why is CeeDee Lamb on the commissioner's exempt list?

Lamb was placed on the commissioner's exempt list when the Cowboys were granted a two-game roster exemption. The designation allows Dallas to not have to use a roster spot on Lamb while the three-time Pro Bowler works his way back up to speed after holding out of training camp.

Lamb held out before signing a four-year, $136 million contract extension. The deal included a $38 million signing bonus, a record for wide receivers, and $100 million guaranteed. The $34 million annual average places Lamb second among receivers, trailing only Justin Jefferson of the Vikings.

Who else is currently on the commissioner's exempt list?

Cleveland Browns rookie defensive lineman Mike Hall Jr. has been placed on the commissioner's exempt list as he faces a domestic violence charge. Hall has pleaded not guilty to one count of domestic violence.

Hall will not be eligible to play in or attend games, and he cannot practice. However, the Browns can allow him to be present at their facility for meetings, individual workouts, therapy, rehabilitation and other permitted non-football activities.

Check out the ESPN NFL hub page for breaking news , analysis , scores , schedules and more.