What Is an Exempt Employee?
An exempt employee, under the US Fair Labor Standards Act, is one who is not entitled to overtime pay. Exemption generally requires being paid a salary at or above a set minimum and performing duties that meet specific tests, such as executive, administrative, or professional roles. Job title alone does not determine status.
Exempt vs. Non-Exempt
Non-exempt employees must receive overtime pay for hours over 40 in a workweek. Some states apply stricter rules and higher salary thresholds.
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🔗 Related Terms
More Income & Work Terms
- Billable Hours
- Billable Utilization Rate
- Business Overhead
- Commission
- Cost to Company (CTC)
- Cost-of-Living Adjustment (COLA)
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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.