As we are interested in employment, we are also interested in salaries and the process of payment. Many jobs don’t belong to the public sector and don’t offer the same financial advantages. That’s why there are two basic types of employees, usually known as “exempt employees” and “non-exempt employees.” In this post, I will discover the difference between them and in which kind of jobs, we can find these professional labels. Let’s get started.

Salaried Employees

This is a fascinating label. A salaried employee is paid a specific amount, usually known as a salary that is defined and stated in the job contract. Salaried employees can receive payment every month or every two weeks, depending on the type of projects they do. Besides, salaried employees are classified as exempt employees. We will explain this new label to you in the following section. You can also read;

What is the Difference Between Salaried and Hourly Employees?

Exempt Employees:

Exempt employees are paid overtime. Fair Labor Standard Act defines that the minimum payment is associated with a schedule that doesn’t overpass 40 hours of work weekly. Exempt employees get this minimum payment, which is not based on an hourly rate. It is instead based on the tasks they have performed. Now, we can say that an exempt employee is a salaried employee and not an hourly worker or employee. An exempt employee is not also a seasonal employee.

What Kind of Jobs that an Exempt Employee Can Take?

Since exempt employees are not seasonal employees nor hourly based workers. So they take long term jobs such as administrative and executive job titles. They can also take jobs related to management. There are also many types of exempt employees. Check this article to learn about the fields in which exempt employees operate;

WHAT IS AN EXEMPT EMPLOYEE OR POSITION?

Non-exempt Employees:

This label is the opposite of an exempt employee. A non-exempt employee can be both a salaried and a non-salaried employee. That is, a non-exempt employee can be an average employee, an hourly based worker, a seasonal employee, a temporary employee, or an independent contractor. This means that a non-exempt employee doesn’t have a long term schedule, as the working conditions can change. But, they cannot be considered as interns or volunteers, because they can get paid at the end of the day. You can also read;

What Does Being Non-Exempt Mean in Employment?

Exempt Vs. Non-exempt Employees

There are many differences between exempt and non-exempt employees:

-The difference in payment: exempt employees are considered as salaried employees, while non-exempt employees get paid differently. They can get paid per project per hour, and they don’t have a fixed salary. Their payment dependence on the tasks they do.

-The difference in schedule: exempt employees can have similar schedules, like 9 to 5 employees. Non-exempt employees have a more flexible schedule.

-Professional advantages: exempt employees are excluded from the Fair Labor Standard Act protections. The reason is that they are paid a salary before finishing the required work. Their salary is the same, whether they have worked more or less 40 hours a week.

-Additional work: exempt employees do not get extra payment for other tasks. As we said before, the salary remains the same whether they have worked more than average working hours. Besides, non-exempt employees get extra payment adding to the wage they already have for mediocre work.

-Taxation: All employees are supposed to contribute to taxation expenses. Both exempt and non-exempt employees are taxed. The amount of taxation depends on the income of both categories.

-Work benefits: if we compare between both types, we will notice that exempt employees are excluded from extra payment and other rights dedicated to non-exempt employees. That is, non-exempt employees receive more professional benefits granted by federal law.

-Risk of unemployment: non exempt employees tend to lose their jobs because they have a different working contract, which is not the same case for exempt employees. Moreover, in the US, unemployment benefits are not the same in every state. Therefore, both exempt and non-exempt employees have unemployment benefits, depending on the state they belong to. Read about this rule from here;

Unemployment benefits

After exploring the differences between both employment categories, let’s see which type is better?

Nowadays, many employees choose to be non-exempt employees because they don’t feel comfortable with administrative or executive work. Moreover, hourly based work seems more lucrative than a 9 to 5 job.

This choice does not deny the fact that many employees are comfortable with the exempt type of work. This type of employment is very classical, and the fixed salary of exempt employees is superior to that of non-exempt workers. Therefore, the choice depends on what employees want and what they are ready to offer in return.

This was all about salaried employees, be it they are exempt employees or non-exempt employees. Although both categories sound ambiguous and strange, they are indeed what can be adopted in the US, as a classification for employees. Despite the differences, employees find this classification very fair and rewarding for both employees.