Almost half of Americans work more than 50 hours a week.[1] When you consider that the average working hours is less than 30 hours a week in countries like France, Denmark, the Netherlands and Germany,[2] you realize how overworked the average American must be. So it is even more important to know whether you should be getting paid for those extra hours or not. The Fair Labor Standards Act (FLSA) states that employees need to be categorized as exempt or non-exempt. The most significant difference is the issue of being entitled to overtime pay.
Non-exempt workers must be paid overtime.
A non exempt employee, as the name suggests, is not exempt from the FLSA rules. They must be paid at least the minimum hourly rate. If they work more than 40-hours a week, they must be paid overtime at the rate of not less than 1.5 times their hourly rate for each hour. The current federal minimum wage is $7.25 per hour but some states offer a higher minimum hourly rate.[3] Pros:
You are entitled to overtime rates. You have the option to earn more money (if you wish) by opting to work overtime.
Cons:
You stand to lose money if your hours ever reduced. Depending on the company, you may not have the same benefits and perks as an exempt worker.
Exempt workers are not entitled to overtime pay.
An exempt employee must be paid a salary (as opposed to an hourly rate), which means they will not be entitled to overtime pay. These workers receive above minimum wage rates and must earn at least $455 a week in order to meet the threshold set by the FLSA. They tend to work in the capacity of an executive, administrative, professional or sometimes sales. In November 2016, a federal judge issued an injunction to stop a new rule by that would have increased the exempt salary threshold from $23,600 a year to $47,476 a year. But according to the Society for Human Resource Management, Pros:
You have a reliable and fixed income monthly. You often earn more based on a salary than those who get paid an hourly rate. You often have more access to better benefits and perks.
Cons:
You are not entitled to overtime rates. You may have to work much longer hours in order to meet your workload.
Know your rights and be a smart employee.
Now that you understand the difference between non-exempt and exempt employees, time to evaluate your work and know when you’re entitled to get paid.
1. Be aware of the “clock in and out” system.
If you work on a “clock in and out” system, ensure that you are being paid for all the hours you work. For instance, some employers may force workers to clock out for lunch even if they work through their lunch, or clock out when they end up staying later.
2. Starting early could mean working overtime too.
Some employers may ask you to start early so that there is time to put your uniform on or to attend meetings or trainings, etc. If this happens and you work on a clock system, you are entitled to get paid for that time.
3. Stay up-to-date with salary policies.
The Department of Labor, with the support of many Congress members, is trying to appeal the injunction to change the law for the exempt salary threshold. Check their website to stay up-to-date with any developments. If you have any doubts about your exempt or non-exempt rights, or feel you are not being treated fairly, contact the Department of Labor. Featured photo credit: Flaticon via flaticon.com
