Legal Definitions - exempt employee

Exempt employee

An exempt employee is someone who is not eligible for overtime pay or minimum wage according to the Fair Labor and Standards Act. These employees are typically in professional, administrative, executive, outside sales, and computer-related positions and earn a base pay of at least $35,568 per year. Exempt employees are paid for the work they accomplish, not the time they work, and may receive bonuses instead of overtime pay.

• A manager who earns a salary of $50,000 per year and is not eligible for overtime pay.
• An IT professional who earns a salary of $60,000 per year and is not eligible for overtime pay.
• A sales representative who earns a salary of $40,000 per year and is not eligible for overtime pay.

These examples illustrate the definition of an exempt employee because they are all in professional, administrative, executive, outside sales, or computer-related positions and earn a base pay of at least $35,568 per year. They are not eligible for overtime pay and are paid for the work they accomplish, not the time they work.