Who Is Exempt and Non-Exempt From Receiving Overtime Pay?
There is an old adage which goes, “There is always an exception to the rule.” When it comes to overtime wage, not all employees are entitled to receive pay for exceeding the normal 40 hours’ workweek. The rule on exemption from overtime pay is governed by the Fair Labor Standards Act (FLSA). While most American workers are covered by the FLSA, they are classified as either exempt or nonexempt.
Under the FLSA, non-exempt employees are paid the minimum wage and overtime pay for exceeding 40 hours in a given week. The law requires employees who work overtime to be paid 1.5 times their regular rate for every hour of overtime. According to the website of Williams Kherkher, employers mistakenly classify non-exempt employees as exempt to avoid paying overtime wage. If this happens, such employee can file a complaint with the US Department of Labor.
Exempt employees are not covered by the FLSA and hence are not granted overtime pay. Jobs such as outside sales and airline employees are exempt from overtime pay as defined by the law. An exempt employee is one who performs a high-level of duty with respect to the overall operations of the company. These jobs fall into three categories namely executive, professional, and administrative.
In addition, jobs that are governed by other laws such as the Railway Labor Act and Motor Carriers Act are not applicable to FLSA. In general, an exempt employee should satisfy the following conditions:
- Has a salary of at least $23,600 a year or $445 a week
- Is paid on a salary basis
- Performs exempt job duties
These conditions are not applicable to professions that pay on the hour such as physicians and schoolteachers.
President Barack Obama has recently made an amendment on the overtime regulation last May 2016. The new ruling extends overtime pay protections to more than 4 million workers within the first year of its implementation.