Not sure whether your employees count as exempt vs. non-exempt? Discover the difference between these employee types in this detailed guide.
All employees are one of two types: exempt and non-exempt. As an employer or aspiring business owner, you need to know the difference between exempt vs. non-exempt employees.
This knowledge can help you determine the kind of taxes you need to pay, how you are legally obligated to pay your employees and much more.
This article will detail the differences between exempt and non-exempt employees.
The Fair Labor Standards Act and exemption status
In 1938, the Fair Labor Standards Act went into effect. This act established things like minimum wage, record-keeping standards for employers and overtime pay eligibility, which people often expect and take for granted these days.
It also added guidelines regarding employment for the public and private sectors, preventing child labor (the norm back then) from being exploitative.
The labor laws from the FLSA are still relevant today and are enforced by the U.S. Department of Labor. They break up employees into two broad categories: exempt and non-exempt employees.
The FLSA generally provides exemptions from overtime rules and minimum wage laws for employees in fields such as:
- Administrative or executive
- Professional
- Computer related occupations
- Outside sales
However, job titles don't determine whether an employee is exempt or not, nor is it based on the job description. Instead, this is...
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