The HR Dictionary

Exempt Employee

The term ‘exempt employee’ refers to a category of employees set out in the Fair Labor Standards Act (FLSA) that do not receive overtime pay, nor do they qualify for minimum wage.

Exempt vs. Non-Exempt

Exempt employees must be paid on a salary basis while non-exempt employees may be paid on a salary basis for a fixed number of hours or under the fluctuating workweek method. Salaried non-exempt employees must still receive overtime in accordance with federal and state laws.