Short answer

An exempt employee qualifies for an exemption from specified federal wage protections; a nonexempt employee retains those protections. For the FLSA white-collar exemptions discussed here, duties and applicable compensation requirements—not simply a salary or a managerial title—determine status. Covered nonexempt employees generally receive overtime for hours over 40 in a workweek. 1

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At a glance

QuestionExempt employeeNonexempt employee
Federal protections here?Qualifies for a specified minimum-wage/overtime exemptionRetains minimum-wage and overtime protections
Does title decide?NoNo
Does high pay decide?Not by itselfHigh pay does not necessarily remove protections
Key inquiry?Applicable duties and compensation testsWhether the claimed exemption actually applies

This comparison concerns FLSA-covered employment and the white-collar exemptions in Fact Sheet #17A. 1

What each thing is

“Exempt” identifies the requirements an employee is exempt from: the cited white-collar provisions address federal minimum wage and overtime. It should not be read as a blanket exemption from labor law. “Nonexempt” identifies employees whose covered work remains subject to those wage protections. 1

Key differences

For the standard white-collar exemptions, qualifying duties and compensation work together. Fact Sheet #17A, revised September 2019, generally requires salary-basis pay of at least $684 weekly; the supplied DOL earnings table also lists that amount. Meeting a pay threshold alone does not establish exemption. 1 2

How to tell them apart

Start with the employee’s actual duties, identify the claimed exemption, and then check its applicable compensation requirements. A title such as “manager” is not a shortcut. This rule has a limit: the standard salary test is not universal, so classification requires the requirements for the particular category. 1 2

Where they overlap

Pay amount does not create a clean dividing line. A highly paid employee can remain nonexempt, and some computer employees can qualify for exemption while paid hourly. The supplied table lists $27.63 per hour for that computer-employee pathway; compensation still is not a substitute for qualifying duties. 1 2

Edge cases

Doctors, lawyers, teachers, and outside sales employees are among the categories to which the listed earnings thresholds do not apply. Conversely, covered non-management manual workers do not become exempt under Part 541 just because their earnings are high. Both cases defeat a simple salary-only classification rule. 1 2

Why the distinction exists

The FLSA establishes minimum-wage and overtime protections for most employees while providing specified occupational exemptions. Classification therefore determines whether those federal pay requirements apply, rather than describing an employee’s prestige, seniority, or preferred compensation arrangement. The cited exemptions require the applicable regulatory conditions to be met. 1

Common misconceptions

“Salaried means exempt” and “manager means exempt” are unreliable shortcuts. Another mistake is treating the standard salary threshold as applicable to every exemption category. This article establishes the federal distinction only; the supplied excerpts do not establish a state-specific classification result. 1 2

Examples

Hypothetical case 1: A covered non-management construction worker earns more than the standard salary threshold. High earnings alone do not qualify that worker for a Part 541 exemption. Hypothetical case 2: An employee called “office manager” receives $700 weekly on a salary basis. That exceeds the listed standard level, but exemption still requires qualifying duties and all other applicable requirements. 1 2

Sources

  1. U.S. Department of Labor, Wage and Hour Division: Fact Sheet #17A: Executive, Administrative, Professional, Computer and Outside Sales Exemptions
  2. U.S. Department of Labor, Wage and Hour Division: Earnings thresholds for the executive, administrative, and professional exemption

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