Exempt v. Nonexempt Employees

The Department of Labor sets laws and regulations to protect workers who do not work in an administrative, professional, executive, computer or outside sales role or who earn below a certain threshold determined by the Department of Labor. As a new rule has been proposed for restoring and extending overtime protections, it is almost certain that in 2024, that threshold will change from $35,568/year to $55,068/year. 

With this new rule, many more employees will become nonexempt. It’s timely then that we review and better understand the difference between exempt and nonexempt employees and the implications for classifying employees correctly. 

The Fair Labor Standards Act is a Federal law that protects the wages and benefits of employees. Some states will have laws that require more benefit to employees than the Federal law. For instance, in certain states, overtime is paid on a daily basis, i.e., in CA 8 hours or more per day, in CO 12 hours or more per day. Employers should always meet the laws of the state of residence for each employee. 

Here is an overview of the the difference between exempt and nonexempt employees:

It is imperative that employers classify employees correctly. Improperly classifying employees can result in fines and penalties and open the employer up to lawsuits for unpaid overtime wages. 

Auxilio consults with our clients on the classification of employees and helps reclassify employees when needed. If your church or nonprofit is hiring, we recommend talking with your Auxilio team about the proper classification of each role prior to making any job offer. 

Helping churches and nonprofits manage their HR and payroll operations is one way that Auxilio brings needed expertise and reduces operational burden. If you’re not an Auxilio client and would like to learn more, contact us at hello@auxilio.partners.