What Is the Difference Between Exempt and Non-Exempt Employees?

The law classifies employees into two separate categories: exempt and non-exempt. In general, an exempt employee will be exempt from certain laws as prescribed by the California Labor Code. The guidelines in the Labor Code were established by the state’s Industrial Welfare Commission, and these delineate the various laws and the exemptions that come with it.

Narrowing the Gap Between Employees

There is a perceived gap between exempt and non-exempt employees. Let us clarify some of these concepts. Exempt employees typically have a higher degree of responsibility; however, these employees carry many exceptions to the law. In turn, non-exempt employees are typically paid on an hourly basis and have many considerations under the laws, such as being owed overtime pay.

Non-exempt employees are classified due to the following:

  • Typically paid based on a 40-hour work week
  • Must be paid the minimum hourly wage and be given overtime pay
  • Overtime pay must be paid at one and a half times their current pay rate
  • Workers are typically paid per hour

Exempt employees are classified by the following:

  • Generally have a high degree of responsibility on their list of job duties
  • Must be paid a salary—at least $23, 600 a year ($455 a week)
  • Performs “exempt “job duties, as either a professional, administrative, or executive

Executive exemptions include:

  • Supervises at least two employees
  • Has the power to hire, promote, and terminate employees
  • Is paid a salary that is at least double the minimum wage for a full-time employee

Administrative exemptions include:

  • Performs job duties that assist in the day-to-day operations of the company
  • Uses discretion and judgment for tasks
  • Possesses specialized education or training
  • Is paid a salary that is at least double the minimum wage for a full-time employee

Professional exemptions include:

  • Holds a license or certification issued by California
  • Works in teaching, accounting, medicine, dentistry, law, architecture, or optometry
  • Has unique or advanced knowledge in their skill or craft
  • Uses discretion and independent judgment
  • Is paid a salary that is double the minimum wage for a full-time employee

What characterizes a non-exempt employee from an exempt employee depends on a variety of factors. The requirements will also vary depending on the role the employee has within the organization and the industry. However, these classifications are also important to ensure that employees are fairly compensated.

If you have any questions, or you believe you have not been classified correctly, please do not hesitate to contact a Hollister employment lawyer. The wrong classification can deny an employee their rights, so be sure that you discuss your situation with us to determine that the correct exemptions are applied to your position.

Contact Polaris Law Group today to schedule a free appointment.

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