Definition: A non-exempt employee is an employee who is not exempt from the Fair Labor Standards Act's minimum wage and overtime provisions. Non-exempt employees must be paid for all hours worked, at least the applicable minimum wage, and at least 1.5 times their regular rate for hours over 40 in a workweek.
EZTime labor rule alerts flag overtime and missed rest periods before payroll.
Most hourly workers in retail, restaurants, healthcare support, construction, manufacturing, and field services are non-exempt. Classification is one of the most important payroll decisions an employer makes, because it determines whether overtime is owed and which time records must be kept. Getting it wrong can lead to back wages for every hour of unpaid overtime.
Under the FLSA, employees are non-exempt by default. An employer may treat an employee as exempt only if a specific exemption applies. For the common "white-collar" exemptions (executive, administrative, and professional), the Department of Labor's Fact Sheet #17A explains that employees generally must be paid "on a salary basis at not less than $684 per week" and must perform specific primary duties. For example, the executive exemption requires that "the employee's primary duty must be managing the enterprise," or a recognized department or subdivision of it.
Two points from the same fact sheet are especially relevant for hourly teams:
Salary thresholds can change through federal rulemaking and court decisions, and some states set their own higher thresholds. Confirm the current federal level with the Department of Labor and check your state's rules before classifying anyone as exempt.
Priya is a non-exempt shift lead at a quick-service restaurant, paid $19.00 per hour. Her title includes "lead," but she spends most of her time preparing food and serving customers. In one workweek she works 43 hours.
| Item | Calculation | Amount |
|---|---|---|
| Straight time | 40 x $19.00 | $760.00 |
| Overtime | 3 x ($19.00 x 1.5 = $28.50) | $85.50 |
| Total | $845.50 |
If Priya had been incorrectly treated as exempt, the $85.50 in overtime would have gone unpaid that week. Repeated over months, misclassification creates significant back-pay exposure.
For more detail on overtime calculations, see the FLSA overtime rules guide.
| Feature | Non-exempt employee | Exempt employee |
|---|---|---|
| Minimum wage | Required for all hours worked | Not applicable if exemption tests are met |
| Overtime | At least 1.5x regular rate over 40 hours/week | Not required under the FLSA |
| How paid | Hourly, salary, piece rate, or commission | Generally salary basis at or above the threshold |
| Time records | Daily and weekly hours must be recorded | Fewer hour-tracking requirements |
| Basis for status | Default under the FLSA | Must meet salary and duties tests |
When in doubt, treating a role as non-exempt and tracking hours is the lower-risk choice, because it ensures overtime is paid if the role later turns out not to qualify for an exemption. Many employers also find that clear hour tracking helps with scheduling and labor budgeting, not just compliance.
EZTime is built for non-exempt, hourly teams. Employees clock in with a GPS mobile time clock with geofencing, NFC tags, a tablet kiosk, or biometric clocks, and managers get overtime and break alerts before small issues turn into payroll problems. Timecard corrections are recorded with an audit trail, PTO and absence management keeps leave separate from worked hours, and digital HR forms help collect onboarding paperwork. When it is time to pay, payroll-ready Excel and PDF exports work with any payroll software; EZTime does not run payroll. Pricing starts at $2 per employee per month with a 14-day trial. Visit the attendance clock page or see pricing.
This is general information, not legal advice.
Yes. Being paid a salary does not by itself make someone exempt. If the employee does not meet the duties and salary requirements of an exemption, they are non-exempt and must receive overtime for hours over 40 in a workweek.
No. The Department of Labor states that job titles do not determine exempt status. Classification depends on the employee’s actual duties and how and how much they are paid.
The Department of Labor says the white-collar exemptions do not apply to manual laborers or other blue-collar workers, who are not exempt under those regulations no matter how highly paid they are.
The Department of Labor lists items such as hours worked each day, total hours each workweek, regular hourly rate, straight-time and overtime earnings, deductions, and total wages each pay period.