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What is the meaning of salaried, nonexempt employee?

The designation of an employee as "salaried, nonexempt" means that the employer has designated an employee as nonexempt from the federal Fair Labor Standards Act (FLSA), and chooses to pay a weekly salary that equates to at least minimum wage for all hours worked. On a federal level, this designation means the employee is entitled to overtime pay in addition to the salary for work weeks in which his or her time worked exceeds 40 hours. Some state laws may require daily overtime calculations.

Nonexempt employees are often thought of as hourly employees; however, there is no requirement that they be paid on an hourly basis. Under the FLSA, nonexempt employees can be paid hourly, salary, piece rate, commission, etc., as long as their weekly compensation equals at least minimum wage for all hours worked and overtime is paid for hours in excess of 40 in a workweek.

Although the employer pays the salaried, nonexempt employee on a salary basis, it must still track and record actual time worked by this employee, and, if overtime is worked, it must calculate the regular hourly rate on which the overtime rate is based and pay for all overtime worked. See Are companies required to pay overtime to employees classified as salaried nonexempt? If so, how is overtime calculated? and Can employers dock the pay of salaried, nonexempt employees for absences?


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