What is the difference between being an exempt employee and a non-exempt employee?

Exempt and non-exempt employment status determine how an employee is paid, and what legal protections they have while at work.

Exempt Employees: Exempt employees are ‘exempt’ from, and not covered by, the legal protections laid out in the Fair Labor Standards Act (FLSA). They receive a set salary regardless of the hours that they work. They are not entitled to receive overtime pay regardless of whether or not they work more than 40 hours in a work week. Exempt employees are likewise not legally entitled to any meal or rest breaks throughout the workday.

As of 2023, the minimum salary for an exempt employee working in California is $64,480.00 per year. The minimum salary requirements for exempt employees is dependent on state law.

Non-Exempt Employees: Employees who are non-exempt are covered by the provisions in the FLSA that regulate pay and breaks. Non-exempt employees receive an hourly pay rate, and are entitled to receive time and a half pay for hours they work over 40 in a given workweek. They are likewise entitled to regulated meal and rest breaks. In California, non-exempt employees are entitled to a paid 10-minute rest break for every 4 hours that they work, and a paid 30-minute meal break when working more than 5 hours in a given day.

As of 2023, the minimum hourly wage for a non-exempt employee in California is $15.50 per hour. Minimum wage varies state to state; federally, the minimum wage is $7.25 per hour.

Who should be classified as exempt? Who should be classified as non-exempt?

Under the law, employees are non-exempt unless their job duties meet specific exemption requirements. The most common exemptions are:

  • Administrative Exemption: If an employee spends 50% or more of their time at work doing administrative duties, including making independent business decisions, they may be classified as exempt.
  • Executive Exemption: If an employee manages a team, department, or supervises other employees, and also has the power to hire and fire other employees, they may be classified as an exempt employee.
  • Learned Professional Exemption: If an employee possesses and uses an advanced degree and specialized training in their line of work, an employee may be exempt. Lawyers, doctors, engineers, and teachers may be examples of workers who receive a learned professional exemption.
  • Create Professional Exemption: If an employees work requires invention, imagination, or artistic creativity, they may be classified as exempt. For example, graphic designers, writers, and directors, may be exempt.

Why would an employee be misclassified? Why does misclassification matter?

Misclassification occurs when an employee is incorrectly classified as exempt when they should be classified as non-exempt. The Fair Labor Standards Act (FLSA) makes misclassification unlawful and employers may be held liable for violating the FLSA.

Employers may intentionally misclassify their employees as exempt employees in order to save money. Employers can ask exempt employees to work long hours, well over 40 hours per week, without paying them any additional overtime pay. They can likewise avoid giving exempt employees meal and rest breaks, and missed break pay premiums.

Misclassification is a form of wage theft.

What to do if you believe you may be misclassified?

You work hard to earn a living, and you have the right to be fairly and fully compensated for any work you perform.

If you are or have experienced misclassification, you may be entitled to damages in the form of back pay and punitive damages. Take the following steps to support your case:

Save Evidence: Record all relevant events or interactions in writing. Keep a log of the hours that you work, and make a list of the tasks you perform. Save related paychecks, emails, notes, and documents.

Report the Discrimination: Report the misclassification directly to your employer. If your employer does not correct their behavior, you may file a complaint with the California Labor Commissioner.

Find an Attorney: Reach out to an employment attorney. Avloni Law is a law firm dedicated to fighting for your right to a workplace. Click here schedule a free consultation with Navruz Avloni.