Exempt vs. Non-exempt Employees: What Are the Differences?

You may have heard the terms salaried or wage employee, or exempt and non-exempt employee. Each of these categories refers to how an employee is paid for the number of hours they work. Exempt employees are often not eligible for certain employee protections like overtime. However, an employer cannot simply classify any employee as exempt. You must meet specific criteria for this classification.

See more information about exempt versus non-exempt employees to help you determine whether you were misclassified.

Alabama Labor Laws

Alabama has very few restrictions on wages and hours. The state has no minimum wage and no restrictions on how many hours you can work in a week. Likewise, an employer does not have to give you any breaks. However, even though the state does not impose minimums, employers must still follow federal laws.

This means if you are non-exempt, your employer must pay you overtime when you work more than 40 hours a week. Plus, you must be paid if you work through a designated unpaid break period.

Federal Labor Laws

Generally, employers are required to follow either state or federal laws, whichever is stricter. Since Alabama wage and hour laws are less strict, then federal laws are the guideline for minimum wage and overtime. However, exempt employees are not protected by these laws, so their employer can have such employees work any amount of hours they want without extra pay.

Employers may take advantage of this by designating certain employees as exempt when they are not. However, to be exempt, you must meet some of the definitions or special exemptions listed below.

Definition of Exempt Employees

Exempt employees must pass a duties and salary test. Generally, exempt employees have an executive, supervisory, or technical expertise role in their company. For example, exempt employers meet some, but not all, of these criteria:

⦁ Are paid a specific minimum federal salary per week or year

⦁ Manage at least two employees and have the ability to hire and fire

⦁ Have authority to make company decisions

⦁ Are science or education professionals with an advanced degree

Additionally, highly compensated employees are exempt if they earn over a certain amount. Likewise, outside sales staff and computer system experts are considered exempt under certain circumstances. The employer still must meet certain minimum salaries and work conditions in order to justify the exemption. The burden is on the employer to prove the exemption. 

Definition of Non-Exempt Employees

Most other occupations are usually considered non-exempt. Some employers may claim you are exempt because they gave you a manager or supervisor title. However, even if you have supervisory duties, you are still non-exempt. You must meet other supervisory exemption rules, such as the ability to control who works there, the ability to terminate employees, and the ability to discipline employees.

An employer also cannot claim you are exempt because you are frequently left in charge of the business, or he or she needs you to be on call. They also cannot claim you are exempt simply because they pay you over the minimum salary amount. The exemption rules are very specific.

Special Occupational Exemptions

Some occupations are excluded from federal wage and overtime laws even if they don't meet the federal minimum wage and hour laws. Here are a few examples of special exemptions:

⦁ Farmworkers

⦁ Independent contractors

⦁ Truck drivers

⦁ Employees under certain union contracts

Employers are not allowed to classify you as an exempt employee simply because they say so. Your employer must follow strict federal laws to put you in this classification. If they don't, then they face penalties. If you were misclassified, your employer may owe you overtime and other back pay.

Contact Allen D. Arnold Attorney at Law if you think you may have been misclassified and your employer refuses to compensate you for earned wages.

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