Within a business, there are a number of different kinds of employees who fulfil certain roles within the business, one of which is referred to as a Full Time Exempt employee. You may be asking what is exempt and what it means for employment? Below we deep dive into this subject and how an exempt employee can impact your workforce management.
What is a Full Time Exempt Employee?
The definition of an exempt employee refers to an employee’s exclusion from specific rights mentioned in the Fair Labor Standards Act (FLSA). This Act highlights the guidelines for elements related to minimum wage, overtime eligibility, and child labour. Full-time, exempt employees are defined as those who are paid an annual salary but who are exempt from overtime regulations. In simple terms:
- An exempt full time employee does not receive overtime pay or qualify for minimum wage
- These full-time employees are paid a salary instead of by the hour. Their work is also classified into categories that include executive, professional, administrative, outside sales, and computer-related jobs.
- If an employee forms part of these categories, is salaried, and earns a minimum of $684 per week or $35,568 annually, then they are considered an exempt salaried employee.
To truly understand the exempt employee definition, it is essential to understand the difference between exempt and non-exempt employees.
What’s the difference between exempt and non-exempt?
As mentioned above, an exempt employee is not entitled to overtime pay according to the FLSA. To be exempt, you must earn a minimum of $684 per week. Non-exempt employees on the other hand must be paid overtime and are covered and protected by the regulations listed by the FLSA. Non-exempt employees must be paid the federal minimum wage either with a salary or hourly wage. In this way, no matter how many hours an exempt employee works, they will receive the agreed-upon wage or salary. If a non-exempt employee needs to work more hours to ensure a project is completed, they will be able to claim overtime and will be paid for the extra hours worked.
How do full-time exempt employees affect workforce management?
When it comes to workforce management, the management of full-time exempt employees can often be quite complex, especially if you have a large workforce that you need to track, schedule, and manage. Many businesses are turning to workforce management technology, like Adapt IT’s EasyRoster solution, to address this.
The complexity is related mainly to tracking productivity. This is primarily because these employees have more freedom in relation to how they spend their time at work because they are exempt salaried employees who aren’t paid overtime and can move at their own pace. In this way, exempt employees have no maximum or minimum number of work hours allowed per week, which means you often need to ensure they are delivering on the job requirements through tracking. EasyRoster aims to make this process that much easier through easy scheduling and time and attendance monitoring. This is aimed at improving labour efficiency and managing performance.
Having a workforce with non-exempt and exempt employees often makes managing payroll and specific accounting processes relatively tricky. Workforce management solutions simplify this process through payroll system integration.
With a workforce management solution like EasyRoster, you are also able to manage all personnel and contracts. Providing you with all the necessary information related to both exempt and non-exempt employees and all jobs, contracts, and programs.
What else should employers know about exempt employees?
In the context of the question, what does exempt employee mean? An employer needs to take the following into consideration:
- Even though an exempt employee has no protection or rights under the FLSA, other federal and state laws still protect these employees’ rights and interests. An example of this includes national and minimal wage laws.
- In many cases, both non-exempt and exempt employees can receive unemployment benefits depending on state laws.
- Certain jobs are entirely excluded from coverage based on the FLSA overtime regulation. Other exclusions are also applied to assignments that are already moderated by other federal labor laws. If another federal labor law applies to a job, FLSA regulations fall away.
Understanding the rules and regulations around full-time exempt employees ensures that your business runs efficiently and smoothly. With many moving parts and a need for compliance in terms of non-exempt versus exempt employee laws and payment terms, many companies are turning to workforce management technology like EasyRoster. For more on how EasyRoster can work for your business book a demo.
As a Senior Product Manager at Adapt IT, I lead the division responsible for one of our flagship products, EasyRoster. Our primary focus is to empower organisations with top-tier Workforce Management Software, enabling them to optimise operational efficiency and streamline processes.
With over 12 years of experience in the industry, I have collaborated with clients across 25+ countries, delivering training sessions and offering labor efficiency consultations to diverse groups of professionals.
In my capacity as Senior Product Manager, I oversee a multidisciplinary team that together, strive to create innovative solutions and maintain our commitment to excellence in the realm of workforce management.