How to Determine if an Employee is Exempt or Non-Exempt?
Published on June 4th, 2023
In the United States, there are two classifications for employees: exempt and non-exempt. The main difference between the two is overtime pay eligibility. Exempt employees are not entitled to overtime pay whereas non-exempt employees are. As a recruiter or hiring manager, it is important to know the difference between the two classifications and how to determine which one an employee falls under. In this blog post, we will discuss the criteria for exempt and non-exempt classifications and some helpful tips for properly categorizing your employees.
Criteria for Exempt Employees
To be considered exempt, an employee must meet three criteria:
- Salary basis – The employee must be paid on a salary basis rather than an hourly wage.
- Salary level – The employee's salary must meet a certain minimum level, which is currently $35,568 per year or $684 per week.
- Duties – The employee's job duties must primarily involve executive, administrative, or professional tasks.
Examples of exempt employees include executive or administrative assistants, managers, and professionals such as lawyers or doctors.
Criteria for Non-Exempt Employees
Non-exempt employees, on the other hand, are entitled to overtime pay. To be considered non-exempt, an employee must not meet one or more of the criteria for an exempt employee. For example, they may be paid an hourly wage instead of a salary, their salary may not meet the minimum level or their job duties may not primarily involve executive, administrative, or professional tasks.
Examples of non-exempt employees include customer service representatives, production workers, and hourly retail employees.
Tips for Properly Categorizing Employees
Determining an employee's classification can be tricky, but there are a few tips to help ensure accurate categorization.
- Review job descriptions – Start by reviewing the employee's job description to see if their primary duties fall under the exempt or non-exempt categories.
- Consider salary – Look at the employee's salary to determine whether it meets the minimum level required for exemption.
- Track hours worked – Keep track of the employee's hours worked to ensure they are properly compensated for overtime.
- Seek legal advice – When in doubt, seek legal advice to ensure you are properly classifying your employees and complying with federal and state regulations.
Leverage EasySource to Find Non-exempt Candidates
EasySource revolutionizes the way recruiters search for non-exempt employees by introducing the world's first fully automated talent-sourcing tool. This innovative platform streamlines the process of building a robust talent pipeline, saving recruiters valuable time and effort. By leveraging advanced AI-based filters like location, skills, education, experience, and US work authorization, EasySource simplifies the task of finding relevant candidates with just a few clicks.
But that's not all. EasySource goes beyond traditional sourcing tools by incorporating ChatGPT and Generative AI capabilities. Recruiters can now effortlessly send highly personalized messages to potential candidates across various platforms, all with the power of automation. This means recruiters can amplify their LinkedIn search, discover and engage with promising non-exempt candidates, and bid farewell to the daunting task of sifting through countless resumes to find exceptional talent.
Properly determining employee classification is crucial for compliance with federal and state labor laws. By understanding the criteria for exempt and non-exempt employees and following some helpful tips, you can ensure that your employees are properly classified and compensated. Remember to review job descriptions, consider salary levels, track hours worked and seek legal advice when necessary. With these steps, you can confidently categorize your employees and avoid any legal issues down the line.
Radhika Sarraf is a content specialist and a woman of many passions who currently works at HireQuotient, a leading recruitment SaaS company. She is a versatile writer with experience in creating compelling articles, blogs, social media posts, and marketing collaterals.
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