Non-Exempt Employee

What non-exempt employee means

Non-exempt employee status means a worker is generally covered by the Fair Labor Standards Act's minimum wage and overtime protections. Most employees are entitled to these protections unless the role meets all the requirements of an applicable exemption.

For common exemptions — including the executive, administrative, and professional exemptions — salary basis, salary level, and actual job duties may apply, and the specific requirements vary by exemption.

Hourly pay does not automatically make an employee non-exempt, and salary does not automatically make an employee exempt. An employee may receive a salary and still be entitled to minimum wage and overtime protections.

Once a role is non-exempt, the employee generally earns at least time-and-a-half their regular rate of pay for hours worked beyond 40 in a workweek. Employers must comply with all applicable federal, state, and local requirements.

Overtime and timekeeping obligations for non-exempt employees

Employers must maintain accurate records of the hours non-exempt employees work and pay any overtime due. A non-exempt employee may receive hourly wages, a salary, or another form of compensation, but the employer must still account for hours worked.

Getting the classification wrong can create wage-and-hour exposure for the business.

Evaluate classification based on the employee's actual duties and pay arrangement. Revisit it when responsibilities, compensation, or other relevant circumstances change.

Tracking hours and calculating overtime pay

Track the employee's hours by workweek, even if your payroll covers more than one week. Under the FLSA, covered non-exempt employees generally must receive overtime at no less than one and one-half times their regular rate of pay for hours worked over 40 in a workweek.

If a role's exemption status is unclear, read Exempt vs. Non-Exempt Employees for classification guidance.

Once you record employee hours, SurePayroll® By Paychex calculates wages, processes payroll, and completes payroll tax filings and deposits.

Federal sources on non-exempt classification and overtime

The U.S. Department of Labor provides guidance on these requirements. Fact Sheet #23 explains the FLSA's general overtime-pay rules, while Fact Sheet #17A summarizes commonly used executive, administrative, professional, computer, and outside-sales exemptions.

State or local law may provide additional or more protective overtime requirements, so employers should check the requirements where their employees work.

Related terms

Exempt employee — Read Exempt vs. Non-Exempt Employees to see the three-part test used to determine which category a role falls into.

Overtime pay — check the Department of Labor for federal rules on overtime pay.

Independent contractor — Learn the key differences and the IRS and Department of Labor tests to determine worker classification.

W-2 — Overtime wages tracked under non-exempt status carry through to this year-end form.