The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards. The terms “exempt” and “non-exempt” are defined under the Fair Labor Standards Act (FLSA) for purposes of classifying employees who are and are not subject to overtime requirements.

A key provision of the Act is that employees classified as FLSA Non‐Exempt must be paid time and one‐half for all overtime hours worked within a designated workweek. The most common threshold for overtime is 40 hours per workweek.

FLSA Exempt

The Fair Labor Standards Act contains dozens of exemptions under which specific categories of employers and employees are exempted from overtime requirements. The most common exemptions are the white‐collar exemptions for administrative, executive, and professional employees, computer professionals, and outside sales employees. The primary distinction of exempt employees is that they are not paid overtime, no matter how many hours they work. Employees in exempt jobs are not eligible to receive overtime pay or accrue comp leave for working more than 40 hours in a week. They receive a set salary, paid every other week, for the work they perform. 

FLSA Non‐Exempt

All FLSA non‐exempt employees are entitled to overtime pay under the Fair Labor Standards Act. Employers must pay them one‐and‐a‐half times their regular rate of pay when they work more than 40 hours in a designated workweek. Employees who are FLSA non‐exempt can choose to receive overtime or accrue compensatory time (accrued at time and one‐half) for every hour worked over 40 hours in a designated workweek. Employees in non-exempt jobs are eligible to receive overtime pay or accrue comp leave for working more than 40 hours in a week. They earn an hourly wage for time worked or leave time taken.  

Change your Overtime Election

To change your overtime election, employees need to complete the Overtime/Comp Election Form.