How are 'exempt' employees classified under the Fair Labor Standards Act?

Under the Fair Labor Standards Act (FLSA), 'exempt' employees are classified as those who are not entitled to overtime pay. This classification typically applies to certain types of roles that meet specific criteria regarding job duties and responsibilities, such as executive, administrative, professional, and certain highly skilled positions.

Being classified as exempt means that these employees are compensated on a salary basis and their role is generally expected to require a degree of autonomy, decision-making authority, and specialized knowledge that justifies their exempt status. Consequently, they do not receive extra compensation for hours worked beyond the standard 40 hours in a week, distinguishing them from non-exempt employees, who are eligible for overtime pay. This structure encourages organizations to engage employees in responsible positions without the financial burden of additional overtime costs for hours worked beyond the typical workweek.