The Fair Labor Standards Act (FLSA) of 1938 establishes rules and regulations for salaried, hourly, nonexempt and exempt workers. Under the FLSA, salaried, exempt employees are not entitled to overtime pay. Hourly, nonexempt employees, on the other hand, are entitled to time and a half for working more than 40 hours in a workweek. The FLSA also governs other working conditions, such as breaks and rest time between shifts.
Salaried, Exempt Positions
Employees considered salaried, exempt workers are hired based on their ability to do their jobs according to their qualifications, expertise, experience and credentials. They receive a fixed rate that employers quote on a weekly, monthly or annual basis. For example, a salaried employee's wage might be quoted as $50,000 annually, or as $4,167 on a monthly basis. The definition of a salaried, exempt worker is an employee who receives a fixed payment amount of at least $455 per week, and who is not compensated based on the number of hours he works in a week. The classification criteria for salaried, exempt employees pertains to workers in administrative, executive or professional positions. Additionally, certain employees in computer-related jobs, outside sales or creative positions, or roles that require special training or expertise also are exempt from the FLSA and, thus, are not entitled to overtime compensation.
The distinction between exempt and nonexempt employees often is based on the employer's expectations. Exempt employees -- those who are salaried and exempt -- are expected to perform their job duties without regard to how long it takes. For instance, an exempt employee responsible for managing business operations and supervising employees may work 40 or more hours on a routine basis. Employers tend to expect salaried, exempt employees to devote more time to their job duties because one of the major criteria for exempt classification is the use of independent judgment.
Exempt Employee's Responsibilities
Although an employer has the right to require salaried, exempt employees to work more than 40 hours in a week, employees in certain positions also are depended on to devote the time necessary to perform their job duties. This is an example of why the use of independent judgment is important to consider in the discussion about expectations for an exempt employee. In fact, a 2006 U.S. Department of Labor study indicates that employees in certain positions generally have longer workweeks. In his summary titled, "Work More, Earn More," economist Gregory Niemesh states that some jobs "... take more time to complete. In addition, managers and financial professionals may choose to work more hours
because of the high compensation that they receive in return." Salaried, exempt employees do whatever is necessary to perform their jobs. Some exempt employees dislike working more than 40 hours in a week. Yet, accepting an exempt role often means accepting the fact that a salaried, exempt employee's job duties cannot always be accomplished in a 40-hour workweek.