What Is A Non-exempt Employee?

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FLSA conducts a salary and duties test to decide eligibility for being a nonexempt employee. Companies pay salaries to these employees on an hourly or monthly basis. Their wages can not fall below the federal minimum wage. They can work on any post but without any supervisory power. 

Key Takeaways

  • A non-exempt employee can get understood as a person who does jobs related to physical labor for 40 hours a week to earn an income below $684 weekly or $35568 annually. As per FLSA, these employees get nonexempt from or are entitled to overtime at 1.5 times their hourly wage from employers.These employees are blue-collar workers working under direct supervision without having decision-making abilities.Overtime payment remains the major distinction between exempt & nonexempt employees where exempt dos do not get overtime, and nonexempt get overtime pay for every extra hour they work.

Non-Exempt Employee Explained

A nonexempt employee meaning refers to those workers whose wages and overtime come under the FLSA policy of the United States federal law. These employees work with a provision to get overtime at 1.5 times for working beyond an employer’s mandated 40 hours a week. Firms can pay their salary either on an hourly or monthly basis. Most employees doing physical labor get recognized as nonexempt employees under FSLA.

Nonexempt also means the employer has to pay them overtime for any extra work, as employers cannot exempt them from overtime. On January 1, 2020, FSLA put a cap of $684 weekly or $35,568 annual wage on classifying employees earning below it into nonexempt employees. The employee must perform all work as instructed without any self-judgment. So, their task is to finish the job according to their supervisors’ requirements.

FSLA has necessitated employers to pay at least an hourly wage of $7.25 to nonexempt employees. Car assembly line workers, agricultural laborers, or anyone doing repetitive tasks falls under this category.

Qualifications

For an employee to get covered under the nonexempt category under FLSA, the following conditions must be met to qualify:

  • Employees must earn less than $684 weekly or $35568 annually. Work hourly or a maximum of 40 hours weekly. Must work under a direct supervisor.Should not have any management or decision-making role.They must not hold the posts of “bona fide executive, administrative, professional and outside sales employees” classified under FLSA.Moreover, as per FLSA, they must not be computer operators, teachers, academic, or administrative personnel.They must handle only blue-collar jobs that require physical labor.

Examples of Non-exempt Employee

Let us look at some nonexempt employee examples to get a clearer picture of the concept.

Example #1

Suppose Mr. X is working in a vehicle factory’s assembly line. Mr. X has to do the repetitive task of putting nuts into the vehicle gate daily. X works an average of 40 hours a week, and sometimes X also does overtime of 5 hrs. X gets an hourly wage of $12 and $18 as hourly for overtime.

Therefore, X gets $570 weekly under the FSLA provision. Hence the vehicle factory categorizes X as a non-exempt employee.

Example #2 

Suppose Mr. Y is working in a clothes factory’s cutting line. Mr. Y has to do the repetitive task of cutting clothes for the tailors of the factory every day. Y works an average of 40 hours a week, and sometimes Y also does overtime of 5 hrs. Y gets an hourly wage of $10 and $15 as hourly for overtime.

Therefore, Y gets $475 weekly under the FSLA provision. Hence the clothes factory categorizes Y as a non-exempt employee.

Non-Exempt vs Exempt Employee

Nonexempt and exempt employees form an integral part of businesses and the economy. However, they have many differences between them, as discussed in the following table:

This article has been a guide to what is Non-Exempt Employee. We explain its qualifications and examples and comparison with the exempt employee. You can learn more about it from the following articles –

As nonexempt employment means working 40 hours weekly, getting overtime and wage from the employer on an hourly or monthly basis, salaried employees are exempt.

A non-exempt employee differs from an exempt employee as they get overtime benefits mandatorily when nonexempted. In contrast, when exempted, the other does not get overtime for extra work hours.

All nonexempt employees work on an hourly basis, but they may or may not get wages on an hourly or monthly basis. Again, it is because the employer decides the mode of payment.

Yes, FSLA has legally obliged employers to pay overtime to nonexempt employees at 3/2 of the hourly rate if they work beyond the forty-hour limit.

  • Independent Contractor vs EmployeeTax ExemptExempt Income