What constitutes an exempt employee?

Asked on December 22, 2010 under Employment Labor Law, California


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

An exempt employee is one who is exempted from overtime regulations and minimum wage laws(as opposed to non-exempt employees who must be paid overtime/minimum wage).  The common misconception by many employers is that all salaried employees are exempt.  However, merely being paid a salary doesn't automatically determine a worker's actual status.  Exempt and non-exempt status has little to do with job titles or whjether or not a salary is paid. The legal definition of "exempt" and "non-exempt" has much more to do with an employee's level of responsibility or his/her status as a professional.  

The U.S. Department of Labor specifically designates certain classes of workers as exempt, including executives, administrative personnel, outside salespeople, highly skilled computer-related employees and licensed professionals (doctors, lawyers, architects, engineers, certified public accountants, etc). In addition, managers who hire and fire employees and who spend less than half their time performing the same duties as their employees are typically also exempt employees. In general, the more responsibility and independence or discretion an employee has, the more likely the employee is to be considered exempt.

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