Transitioning from exempt to nonexempt FLSA status entails a change in how an employee is classified in terms of eligibility for overtime pay and employee compensation frequency. Here is a brief comparison of the two FLSA categories:
- Exempt Status: Exempt employees are paid on a salary basis (monthly payroll cycle) and are not eligible for overtime pay. They are exempt from the overtime pay requirements outlined in the FLSA because their job duties primarily meet the executive, administrative, professional, or related exemption tests.
- Nonexempt Status: Nonexempt employees are paid biweekly and are eligible for overtime pay for any time worked beyond 40 hours in a workweek at a rate of one and a half times their regular rate of pay. They are paid on an hourly basis and required to track time worked.