What is the Difference Between Exempt and Non-Exempt Employees?
Generally, white-collar workers are classified as exempt employees, and blue-collar workers are classified as non-exempt employees. The biggest difference between these two types of employees is whether they can earn overtime wages. In most cases, when it comes to overtime, exempt employees are not able to collect overtime, or they are exempt and non-exempt employees are able to collect overtime wages. Also, exempt employees are usually paid a set salary, while non-exempt employees are paid an hourly wage.
In the United States, under the Fair Labor Standards Act, employees are categorized as exempt and non-exempt employees. Typically, exempt employees work as executives or managers. Non-exempt employees are typically laborers, and considered to be blue-collar workers. The FLSA also determines certain employment laws and employment rights, such as the lowest amount of money that employers can legally pay their employees. This is often referred to as minimum wage.
Exempt employees are often considered to be salaried employees. This means that their employers pay them a certain amount in wages per week, month, or year. This amount is the same whether they work 20 hours in one week, or if they work 60 hour in one week. For example, if an employee is paid a set wage of $500 US Dollars (USD) for each week and he only works 20 hours one week, he will still get paid the full $500(USD). If he works 60 hours, however, he is not entitled to any more than his regular $500(USD).
A non-exempt employee, on the other hand, is usually paid an hourly wage. If he only works 20 hours in one week, he only gets paid for those 20 hours and nothing more. If he happens to work more than a set number of hours for one week, usually 40, he is entitled to earn at least 1 1/2 times his normal pay for each of the extra hours. This is usually referred to as overtime.
There are advantages and disadvantages for both exempt and non-exempt employees. Exempt employees will be paid whether they work or not. On the other hand, if they must work long hours they will not get any extra compensation for this.
Non-exempt employees will only get paid if they work. If they are ill or otherwise unable to show up for work, they will usually have less money in their pay checks. On weeks that they must work long hours, however, since they will usually be paid overtime wages, they will typically get a much larger paycheck than usual.
Yes it is legal and common to control costs and stick to budget.
I work for a company that is strict on timeclocks and chews employees out for being even a minute over. I am paid hourly. Basically, I'm sure they are trying to prevent overtime to hourly workers (because only the hourly workers use timeclocks?)
Is this legal or common for employers to do?
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