What is an exempt employee?

Updated on October 11, 2023

  1. OnPay
  2. Payroll Software
  3. Terms and Definitions
  4. Exempt Employee

Exempt employee definition and meaning

An exempt employee is not covered by the Fair Labor and Standards Act (FLSA), which means they receive an annual salary for work performed instead of being paid by the hour. These salaried workers are not eligible for minimum wage or overtime pay — per the FLSA — unless certain tests regarding salary levels and job duties are satisfied.


More about exempt employees

You might hear salaried and hourly employees referred to as exempt and non-exempt, respectively. Salaried workers receive a fixed amount of pay each pay period, regardless of hours worked.


Some examples of exempt employees might include an operations director that manages two or more employees. Or a human resources manager that has input on who is hired or fired. They can also be professionals with a specific skill set or advanced education such as teachers, doctors, lawyers, or architects.

Using exempt employee in a sentence

“Our project leaders are exempt employees, so it’s okay if they decide to work late, but before they ask their teams to stay late, they’ll need to have any overtime for those hourly employees approved.”

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