Exempt / Non-Exempt Employees
The failure to understand the difference between exempt and non-exempt employees could be very costly to a business. Employees improperly treated as exempt employees could be owed a significant amount of overtime pay. There are several common questions that are asked regarding this issue:
Is there a difference in paying an exempt versus a non-exempt employee?
Yes. A non-exempt employee is subject to all pay rules established by the Industrial Welfare Commission (IWC). This includes the payment of overtime.
Does paying an employees a salary classify them as exempt?
No. Non-exempt employees must be paid all overtime hours that are worked, even if they are also paid a salary.
How can I determine if an employee is exempt or non-exempt?
The classification of one as an exempt employee depends on the level of responsibility given to the exempt employee, or their status as a professional. Exempt status has nothing to do with the employees job title or paying the employee a salary rather than an hourly wage. The following categories of employees are generally considered to be exempt from the IWC rules: