Nonexempt employee

A nonexempt employee is an individual who must be paid overtime by the employer when the person works in excess of 40 hours per week. This means the employer pays the person a time-and-a-half rate for all hours worked in excess of 40 hours. This designation is applied to an employee who is covered by the provisions of the Fair Labor Standards Act (FLSA). The FLSA provides a number of tests that can be used to determine whether an individual should be classified as a nonexempt employee. Examples of these tests are a minimum pay level, the existence of a guaranteed minimum amount of compensation being paid, and the presence or absence of certain job duties. Additional regulations apply in certain states, where the state governments have imposed stricter overtime pay requirements on employers.

Related Courses

Human Resources Guidebook 
Payroll Management