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Friday, July 4, 2025

Beyond the Clock: Answering FAQs About Overtime Laws - ADP

Changing laws regarding exempt and nonexempt employees can greatly affect the way businesses classify and pay employees. Ensuring your pay practices are based on the most up-to-date laws is crucial for compliance.

We sat down with compliance experts Eric Ruden, senior counsel and Tracy Sigmann, senior legal compliance director, to talk through some real-life overtime compliance questions.

Q. What's the difference between exempt and non-exempt employees?

A. Exempt employees are not entitled to overtime pay under the Fair Labor Standards Act (FLSA) due to their job duties and salary levels. These typically include executive, administrative, professional, and certain computer positions. Nonexempt employees, on the other hand, are entitled to receive overtime pay, generally calculated at one- and one-half times their regular rate of pay for any hours worked beyond 40 in a workweek.

Q. How can I know if my employees are misclassified as exempt/non-exempt?

A. To determine if employees are misclassified, you should assess their job responsibilities and salary against the criteria established by the FLSA and your state's labor laws. Key factors to consider include the nature of their work and whether they meet the salary threshold for exempt status. It may also be beneficial to consult with a labor law expert or attorney for a comprehensive review. Keep in mind that even if your employee passes the federal test to be classified as exempt, that doesn't mean they pass the state...



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