Exempt vs Non-Exempt Employees
Whether an employee is 'exempt' or 'non-exempt' decides if they're owed overtime. Getting it wrong is one of the most common wage-and-hour mistakes.
The core difference
Non-exempt employees are entitled to minimum wage and overtime (1.5× after 40 hours/week). Exempt employees are not owed overtime. Most hourly workers are non-exempt; some salaried roles are exempt — but only if they meet specific tests.
The exemption tests
To be exempt, an employee generally must be paid on a salary basis above a federal threshold AND perform exempt job duties (executive, administrative, or professional). Both the salary test and the duties test must be met — a high salary alone doesn't make someone exempt, and neither does a fancy title.
Why it matters
Misclassifying a non-exempt employee as exempt means unpaid overtime — and back pay, penalties, and liquidated damages if challenged. When in doubt, treat the role as non-exempt and track hours.
FAQ
Do salaried employees get overtime?
Only if they're non-exempt. A salaried employee who doesn't meet the salary and duties tests is still owed overtime.
What is the salary threshold for exemption?
It's set federally and updated periodically (states may set higher) — confirm the current figure with the DOL before classifying.
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