Exempt versus Non-Exempt Employees definition

An American term that distinguishes between staff members that are eligible for overtime pay and those that are not. A common assumption is that salaried employees, particularly those with contractual clauses that address 'reasonable extra hours to complete a project or task,' are exempt from overtime pay. Exempt employees are also exempt from minimum wage laws.

The main legal differences between exempt and non-exempt employees comes down to their role, responsibilities and the industry the work in. The Department of Labor explicitly classes some workers as exempt, including doctors, lawyers, engineers, executives and administrators. Managers with responsibility for recruitment are also exempt, as are those that spend less than half their time performing the same duties as their staff.