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What are Exempt Employees?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 17 August 2016
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Exempt employees are people who are not covered by the hour and wage laws in the United States addressing overtime pay for extra hours worked. If these employees work more than 40 hours in a week, they are not entitled to overtime. This is a recognition of the fact that they often work long weeks in order to complete their job duties, and they enter their professions in awareness of this. Having to curtail work to avoid hitting overtime limits could result in work of poor quality or danger to clients, in some cases.

Three separate classes of employees fall under the heading of exempt employees. Professionals are people who have received advanced education to offer professional services, like members of the clergy, doctors, and architects. These individuals are not entitled to overtime pay when their work runs over 40 hours in a particular week, although other employment protections still apply; employers cannot, for example, refuse to pay them for their work.

An executive exemption is made for people who supervise multiple employees, have decision making capacity, and are heavily involved in the running of a business. People like department supervisors and chief executive officers fall under this category. A third category, administrative, covers people who participate in activities vital to the running of a business, providing high-level administrative support. These employees may need to exceed regular working hours to get their jobs done in some cases.

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Commonly, exempt employees are salaried by nature of their positions, leading to the common misconception that salaried employees are all exempt. This is not actually the case; if an employee is paid a salary, the employer can still owe overtime pay for hours worked in excess, unless the employee's job duties fall under one of the categories used to describe exempt employees. Employees who are not sure about how they are categorized can ask the human resources department for assistance.

Some people have criticized the exemption system, arguing that it abridges rights and makes these employees vulnerable to exploitation. Many industries have a common expectation that people will work overtime, for example, and people who refuse to go into extra hours without receiving overtime pay may be penalized by failing to receive promotions and other benefits. Advocates believe it would be impossible for companies to provide needed products and services if they had to provide overtime pay to all their currently exempt employees.

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