Understanding Exempt vs. Nonexempt


The determination of whether an employee is exempt or nonexempt is at the crux of most wage-and-hour litigation. Knowing the difference is essential.


“The general rule is that employees are nonexempt, which means they have to be paid minimum wage and overtime for all hours over 40.”


Wendy Mellk, Jackson Lewis


Exempt workers are exceptions to the general rule that requires employees to be paid minimum wage and overtime. There are three categories of employees who are exempt from these requirements. The first are professionals. The second group of exempt employees consists of those who supervise two or more workers and have input into decisions about hiring, firing and performance evaluation. The third category is called an administrative exemption. These are employees who perform work that requires significant independent judgment and discretion. Once a nonprofit organization properly classifies employees as exempt, it must ensure it is tracking their hours and paying appropriate overtime.


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