Employee and employer shaking hands

How Do I Know If I Am an Exempt or Non-Exempt Employee?

When it comes to the nitty-gritty of what it means to be an employee, there’s a lot of fine print (both literal and metaphorical) that you may not be aware of. There are as many types of employees as there are employers and supervisors, whether that’s in regards to work output expectations, the manner in which employees are paid, how much money an employee can potentially make, and what legal recourse an employee may or may not have when they are dissatisfied with their experience in the workplace. 

What does it mean, in legal terms, to be an employee?

Most people define an employee as any person who performs work/services for another individual or organization (such as a firm or corporation) for monetary compensation. However, there are legally significant distinctions between employees and people who are known as independent contractors. Independent contractors do not have the same rights as employees. 

The federal government views independent contracts as alternative work arrangements. When it comes to a work arrangement that is defined as an alternative (any arrangement that is nonnormative or nontraditional), the question is whether workers with independent contracts are entitled to the same legal protections and general rights as other workers under federal legislation. 

While many believe that legislation, especially federal legislation, is black and white, the legal standing of individuals across many professions and demographics is actually partially or completely determined by the legal context. The rights of the person sometimes depend on the law in question. 

In general, when a business law case involves employees or independent contractors, courts will evaluate the situation holistically and examine the circumstances of a worker’s employment. The courts will then determine the employee or contractor’s rights, usually with a focus on whether the employee/contractor or the employer controls the work process. 

What does it mean to be an exempt or non-exempt employee? 

The technical difference between an exempt employee and a non-exempt employee is that exempt employees are exempt from (not entitled to) certain rights that non-exempt employees have. The Fair Labor Standards Act (FLSA) mandates employee rights like overtime, minimum wage, and recordkeeping. When local jurisdictions have different rate and hour laws, the employer must pay their employee the rate that is most beneficial to them. Exempt employees are exempt from these specific rights under FLSA. 

This means that exempt employees are not eligible for overtime. This is because most exempt workers are salaried, which means that they have a flat pay rate that is not dependent on the number of hours they work or do not work. Non-exempt employees qualify for overtime pay, which is 1.5 times their standard pay rate during each hour worked over time. 

There are a few ways to determine whether you are an exempt employee or a non-exempt employee. First, there’s the salary test: if you make less money than $684 per week, you are definitely a non-exempt employee. People with higher salaries than $684 per week are defined as exempt or non-exempt based on other significant factors. Then there’s the salary basis test: usually, if an employee is salaried, that employee is exempt. 

Another test is the duties test: if an employee is exempt, their duties must include high-level work, and they must be in a position that requires extensive knowledge, education, and skill. If this sounds like a position you hold, you are likely an exempt employee. 

Seeking Legal Aid in an Employee Exemption or Non-Exemption Business Law Case

If you are experiencing problems with your employment or in your workplace in general, your best option may be to seek out a skilled attorney who specializes in or has experience in the legal realm to which your case belongs. If you live in New York City and need an attorney with experience in business litigation, contact Woods Lonergan, a firm of premier trial lawyers, experienced negotiators, and strategic advisors. Each dedicated attorney at their firm is prepared to guide you through your legal journey with passion and expertise.