Non-exempt employee

What is a non-exempt employee?

A non-exempt employee is a US-based worker who is entitled to minimum wage and overtime pay protections under the federal Fair Labour Standards Act (FLSA).

These employees must receive at least the federal minimum wage and are entitled to overtime pay — typically 1.5 times their regular hourly rate — for any hours worked over 40 in a standard workweek.

Unlike exempt employees (whose roles and salaries place them outside of FLSA wage protections), non-exempt employees must have their hours tracked and compensated accordingly.

See also:What is the difference between exempt and non-exempt employees?

Job types commonly classified as non-exempt include:

• Administrative assistants
• Customer service agents
• Retail workers
• Entry-level office staff

However, it’s important to note that classification depends on the nature of the employee’s duties and whether their earnings fall below the pay threshold defined by the Department of Labour. Misclassifying an employee as exempt when they should be non-exempt can result in fines, back pay liabilities, and reputational damage.

Why is this important for employers?

As mentioned, employers are legally responsible for correctly classifying workers as exempt or non-exempt. For non-exempt employees, this means implementing accurate time-tracking systems, calculating overtime properly, and maintaining full compliance with wage and hour laws. These requirements apply to both full-time and part-time staff and may vary slightly depending on state-specific regulations.

Incorrect classification — whether accidental or deliberate — can trigger audits, lawsuits, and penalties. For companies hiring in the US for the first time or scaling a remote team, understanding the distinction is critical to avoiding compliance risks.

How can Remote help?

When employing non-exempt workers in the US through Remote, our platform automatically handles time tracking, wage calculations, and overtime compliance. This helps ensure your business remains aligned with federal and state labour laws without manual oversight, saving you time, resources, and countless administrative headaches. Learn more.