Overtime Pay: Non-Exempt vs. Exempt Employees

Workforce Management

Many salaried employees don’t consider overtime and overtime pay nearly as much as they should. Although employment laws can be daunting, many salaried workers miss out on opportunities to get paid overtime pay of significant amounts.

When employers fail to pay their employees for overtime hours, they may be violating overtime and federal law, which could result in substantial fines. According to the U.S. Department of Labor, more than 85% of American employees are protected by federal overtime rules and employment law.

Overtime laws for non-exempt and exempt employees changed prior to the pandemic, leaving many employers uninformed of the laws they must adhere to. It is critical for both employers and employees to understand the regulations regarding overtime pay and how they must be applied in the workplace.

State and federal employment laws include certain regulations intended to ensure a safe and fair work environment free of harassment, discrimination, and retaliation. These laws also specify wage regulations, particularly regarding minimum wage and overtime.

Many salaried employees believe that overtime pay only applies to hourly workers, but this is not the case. Overtime laws for salaried workers, in particular, specify that many salaried workers are due for payments for overtime work, and employment lawyers continuously attempt to ensure they get it.

Hourly Workers & Non-Exempt Employees and Overtime Pay

Hourly workers and non-exempt workers are generally entitled to receive overtime pay for hours worked beyond their established 40-hour workweek. Overtime pay must be paid at a rate of one and a half times the regular hourly wage of the employee for all overtime hours worked.

A regular workweek does not necessarily have to be a Sunday through to Saturday week. Employers can designate their own workweek schedules, provided all employees are informed. However, employers may not alter the workweek designation for the purpose of avoiding overtime pay. Salaried workers are generally exempt from overtime, although some recent changes may alter certain employees’ eligibility for overtime pay.

Exempt Workers & Salaried Employees and Overtime Pay

Under federal overtime pay laws, salaried workers have to receive overtime payments for all the hours they work beyond their regular 40-hour workweek. There are only two exceptions to this rule, which apply if the following requirements are met:

Salary Basis

An employee is considered exempt from overtime pay if they earn more than $684 per workweek.


An employee is considered an exempt worker if their profession satisfies one or more of the FLSA overtime exemptions, meaning they work in a profession that executes particular duties throughout the course of their workweek. A few positions satisfying this rule include flight attendants, teachers, executives, pilots, and any commission-based profession.

Overtime Pay: Non-Exempt vs. Exempt Employees Non-Exempt vs. Exempt Employees in Texas

What Are FLSA Exemptions?

FLSA (Fair Labor Standards Act) specifies particular exemptions that exclude some workers from overtime regulations. Section 13 of the FLSA states that employees who are hired as administrative employees, bona fide executives, professionals, or external sales are still eligible for overtime pay.

However, a job title in itself isn’t necessarily grounds for exemption, as certain legal technicalities may still deem a salaried employee eligible for overtime pay. The reason is that many salaried employees use the terms “non-exempt” and “exempt” loosely without fully comprehending the designations or filing the necessary paperwork.

Beyond the positional requirements, salary basis requirements must also be met to be deemed eligible for an FLSA exemption.