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By continuing, you agree to Monster's privacy policy , terms of use and use of cookies. Search Career Advice. What's the difference between exempt and nonexempt workers? You've probably heard these two terms—exempt and nonexempt—but do you know what the differences are? See how the specifics affect your job and pay. Paul W. Barada, Monster contributor.
Knowing if you're an exempt employee will protect your rights. Related Articles. Browse articles by Requiring an employee to charge absences from work to leave accruals is not a reduction in "pay," because the monetary amount of the employee's paycheck remains the same.
Similarly, paying an employee more than the guaranteed salary amount is not normally inconsistent with salary basis status, because this does not result in any reduction in the base pay.
With some exceptions, the base pay of a salary basis employee may not be reduced based on the "quality or quantity" of work performed provided that the employee does "some" work in the work period. For example, a salary basis pay employee's base pay may not be reduced if there is "no work" to be performed such as for a plant closing or slow period , and a salary basis employee's base pay may not be reduced for partial day absences.
However, employers may "dock" the base pay of salary basis employees in full day increments, for disciplinary suspensions, or for personal leave, or for sickness under a bona fide sick leave plan as for example if the employee has run out of accrued sick leave. Thus, there can be "permissible" and "impermissible" reductions in salary basis pay.
Permissible reductions have no effect on the employee's exempt status. Impermissible reductions may, in that the general rule is that an employee who is subjected to impermissible reductions in salary is no longer paid on a salary basis, and is therefore nonexempt.
However, employers have several avenues by which they can "cure" impermissible reductions in salary basis pay, and as a practical matter these make it unlikely that an otherwise exempt employee would become nonexempt because of salary basis pay problems. The salary basis pay requirement for exempt status does not apply to some jobs for example, doctors, lawyers and schoolteachers are exempt even if the employees are paid hourly.
These FLSA exemptions are limited to employees who perform relatively high-level work. Whether the duties of a particular job qualify as exempt depends on what they are. Job titles or position descriptions are of limited usefulness in this determination. It is the actual job tasks that must be evaluated, along with how the particular job tasks "fit" into the employer's overall operations. There are three typical categories of exempt job duties, called "executive," "professional," and "administrative.
Exempt executive job duties. Job duties are exempt executive job duties if the employee. Supervision means what it implies. The supervision must be a regular part of the employee's job, and must be of other employees. Supervision of non-employees does not meet the standard. The "two employees" requirement may be met by supervising two full-time employees or the equivalent number of part-time employees.
Two half-time employees equal one full-time employee. In addition, the supervisory employee must have "management" as the "primary duty" of the job. These include in addition to supervision :.
Determining whether an employee has management as the primary duty of the position requires case-by-case evaluation. A "rule of thumb" is to determine if the employee is "in charge" of a department or subdivision of the enterprise such as a shift. One handy clue might be to ask who a telephone inquiry would be directed to if the called asked for "the boss.
Thus, for example, if a "sergeant" and a "lieutenant" are each at work at the same time in the same unit or subunit of the organization , only the lieutenant is "in charge" during that time. For example, the night manager at a fast food restaurant may in reality spend most of the shift preparing food and serving customers.
The final requirement for the executive exemption is that the employee have genuine input into personnel matters. This does not require that the employee be the final decision maker on such matters, but rather that the employee's input is given "particular weight. Exempt professional job duties. The job duties of the traditional "learned professions" are exempt. These include lawyers, doctors, dentists, teachers, architects, clergy.
Also included are registered nurses but not LPNs , accountants but not bookkeepers , engineers who have engineering degrees or the equivalent and perform work of the sort usually performed by licensed professional engineers , actuaries, scientists but not technicians , pharmacists, and other employees who perform work requiring "advanced knowledge" similar to that historically associated with the traditional learned professions.
Professionally exempt work means work which is predominantly intellectual, requires specialized education, and involves the exercise of discretion and judgment. Provisions Mandated by the Salary Basis Rules Exempt employees normally must receive their full salary for any week in which they perform any work, without regard to the number of days or hours worked. However, exempt employees need not be paid for any workweek in which they perform no work at all for the organization.
Deductions from pay cannot be made as a result of absences due to the circumstances listed below. Such improper pay deductions are therefore specifically prohibited by [Company Name], regardless of the circumstances.
Managers or supervisors violating this policy will be subject to investigation of their pay practices and appropriate corrective action in accordance with normal procedures. Jury duty. Attendance as a witness. Temporary military leave. Absences caused by the employer. Absences caused by the operating requirements of the business. Partial day amounts other than those specifically discussed below.
The few exceptions to the requirement to pay exempt employees on a salary basis are listed below. In these cases deductions may be permissible as long as they are consistent with other company policies and practices. Absences of one or more full days for personal reasons other than sickness or disability partial days must be paid. These fees may be applied to offset the pay otherwise due to the employee for the week.
No deductions can be made for failure to work for these reasons, however. Penalties imposed by infractions of safety rules of major significance. A deduction from pay as a penalty for violations of major safety rules can be made in any amount.
The preamble to the final rule suggests that "workplace conduct" violations should be of a serious nature, and does not apply to discipline for performance or attendance issues. Legal advice is therefore encouraged before updating any workplace conduct policies to include partial-week suspension as a disciplinary option for exempt employees.
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