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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.
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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...
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