What is a non-exempt employee?

A non-exempt employee is a worker entitled to overtime pay at 1.5 times their regular rate for hours worked over 40 in a workweek under the Fair Labor Standards Act. For professional service firms, non-exempt employees require time tracking and overtime payment when applicable.

Key characteristics

• Entitled to overtime pay

• Must track hours worked

• Overtime after 40 hours weekly

• Paid at least minimum wage

• Most employees are non-exempt

• Protected by FLSA

Why it matters for professional service firms

Non-exempt employees must receive overtime when they work over 40 hours. Failing to pay overtime creates liability for back wages, penalties, and legal fees. Professional service firms must track non-exempt hours accurately and pay overtime promptly.

Real-world example

David's admin assistant worked 48 hours during the busy week. Non-exempt calculation: 40 hours at $28/hour ($1,120) plus 8 overtime hours at $42/hour ($336) equals $1,456 total. Overtime is paid on the same paycheck as hours worked. The time tracking system documented all hours. Proper payment avoided wage and hour claims.