FLSA Exempt vs Non-Exempt Glossary (2026)

One of the three EAP white-collar exemptions. Requires: salary basis at $684/week+, primary duty of office or non-manual work related to management or general business operations, and exercise of discretion and independent judgment on matters of significance. The most commonly misapplied FLSA exemption.

Unpaid compensation an employee is owed due to a violation of the FLSA. In the exempt misclassification context, back wages are the unpaid overtime that the employee was entitled to receive as a non-exempt employee but did not receive because they were incorrectly classified as exempt. The lookback period is 2 years (3 for willful violations).

A lawsuit brought by one or more employees on behalf of themselves and similarly situated coworkers. Unlike Rule 23 class actions, FLSA collectives are opt-in - individual employees must affirmatively file a consent to sue form. A single collective action can cover hundreds of employees at one employer.

FLSA exemption for software engineers, systems analysts, and similarly skilled computer workers. Uniquely, can be satisfied by either a $684/week salary or a $27.63/hour hourly rate. Covers systems analysis, software design/development/testing/modification. Helpdesk and hardware technicians do not qualify.

FLSA exemption for employees whose primary duty is the performance of work requiring invention, imagination, originality, or talent in a recognised field of artistic or creative endeavour. No educational requirement. Examples: journalists writing original reporting, graphic designers producing original work, novelists, composers.

A standard used in multiple FLSA exemptions. Means more than occasionally but less than constantly. Used in the executive exemption (must 'customarily and regularly' direct 2+ employees), the HCE exemption (must 'customarily and regularly' perform at least one exempt duty), and elsewhere in Part 541.

The division of the U.S. Department of Labor responsible for enforcing the FLSA. Accepts employee complaints (free, confidential), investigates employers, recovers back wages, and assesses civil money penalties. The WHD represents the public interest; it does not serve as individual employees' attorney.

A key requirement of the administrative exemption. Involves comparing and evaluating possible courses of conduct and making real decisions with real consequences. Distinguished from applying established procedures and standards: even a highly skilled employee who applies specific rules does not exercise 'discretion and independent judgment on matters of significance.'

The third requirement (after salary basis and salary level) for white-collar FLSA exemption. The employee's primary duty must fall within one of the six exempt categories: executive, administrative, professional, computer employee, outside sales, or highly compensated. Job title is irrelevant; actual duties control.

Collective term for the Executive, Administrative, and Professional exemptions - the three 'white collar' exemptions that form the core of FLSA exempt classification. All three require salary basis, salary level ($684/week), and the applicable duties test. The statutory basis is FLSA § 213(a)(1).

One of two routes to FLSA coverage. An employer is subject to the FLSA if it has annual gross revenues of at least $500,000 and has two or more employees engaged in interstate commerce. Nearly all businesses of any meaningful scale meet this threshold.

FLSA exemption requiring: salary $684/week+, primary duty of management of the enterprise or a customarily recognised department or subdivision, customary and regular direction of two or more full-time employees, and genuine hire/fire authority (or recommendations given particular weight). Job title does not determine executive-exempt status.

The federal law enacted in 1938 that establishes minimum wage, overtime pay requirements, child labor prohibitions, and employer recordkeeping requirements. Section 213(a)(1) creates the white-collar exemptions. Enforced by the DOL Wage and Hour Division. Employees also have a private right of action under § 216(b).

A method of paying non-exempt salaried employees where the salary covers all hours worked (including overtime), and overtime is calculated as a half-time premium on the regular rate for each overtime hour (rather than the standard 1.5x). Can significantly reduce overtime costs for employees with variable schedules. Subject to specific requirements including a clear mutual understanding.

A defence available to employers in FLSA cases that allows reduction or elimination of liquidated damages if the employer can show it acted in good faith and had reasonable grounds to believe its conduct did not violate the FLSA. Good faith means genuine inquiry into compliance, not mere ignorance of requirements. The burden is on the employer to demonstrate good faith.

An FLSA exemption for employees earning at least $107,432 total annual compensation (including at least $684/week in salary), who perform non-manual work, and who customarily and regularly perform at least one exempt executive, administrative, or professional duty. Manual workers never qualify regardless of earnings.

All time during which an employee is required to be on the employer's premises, on duty, or at a prescribed workplace - whether or not work is required or merely permitted. Includes short rest breaks (under 20 min) and authorised overtime. Excludes bona fide meal breaks (30+ min with complete relief), commuting time, and off-call time when employees can use the time freely.

One of two routes to FLSA coverage. An individual employee is covered if they are personally engaged in interstate commerce or in the production of goods for commerce, regardless of employer size or revenues. Since most office workers regularly use phones, internet, or mail across state lines, individual coverage applies broadly.

FLSA exemption requiring: salary $684/week+, primary duty of work requiring advanced knowledge in a field of science or learning, that knowledge must be customarily acquired by a prolonged course of specialised intellectual instruction. RNs, engineers, CPAs, and attorneys typically qualify. LPNs, paralegals, and trade technicians typically do not.

In the FLSA context, an amount equal to the unpaid back wages that is automatically added to a damages award unless the employer demonstrates good faith and reasonable grounds for believing it was not violating the Act. Effectively doubles the recovery for successful FLSA plaintiffs. Mandatory unless the employer overcomes the good-faith presumption.

A qualifier for the administrative exemption's 'discretion and independent judgment' requirement. The discretion must be exercised with respect to matters that have a meaningful impact on the business or its customers - not trivial decisions. Factors courts consider: whether the decisions commit the employer, affect substantial business decisions, or impact the business to a significant degree.

Incorrectly classifying a non-exempt employee as exempt (or vice versa) under the FLSA. In the exempt misclassification context, means treating an employee as exempt from overtime requirements when they do not in fact meet all three tests (salary basis, salary level, and duties test). Exposes employers to back wages, liquidated damages, attorney fees, and civil penalties.

An employee who is subject to the overtime and minimum wage provisions of the FLSA. Non-exempt employees must be paid at least the applicable minimum wage and must receive overtime pay (1.5x their regular rate) for all hours worked over 40 in a workweek. Most employees in the United States are non-exempt.

FLSA exemption for employees whose primary duty is making sales or obtaining orders away from the employer's place of business. No salary requirement - the only white-collar exemption that requires neither a salary level nor a salary basis. Must customarily and regularly work away from the employer's premises.

Under the FLSA, compensation at a rate of not less than 1.5 times the employee's regular rate of pay for all hours worked over 40 in a workweek. Federal law calculates overtime on a weekly basis; some states (California, Alaska) also require daily overtime for hours over 8 in a single workday. Applies only to non-exempt employees.

The principal, main, major, or most important duty of an employee for purposes of the FLSA duties tests. Based on all the facts of the employment situation. Not simply the duty that takes the most time. Factors: relative importance, time spent, freedom from direct supervision, and salary premium over other employees. California requires more than 50% of work time on exempt duties - the federal test is more flexible.

EAP exemption with two sub-categories: learned professional (advanced knowledge from prolonged specialised instruction) and creative professional (invention, imagination, originality, or talent in an artistic or creative field). Salary requirement $684/week+ with exceptions for teachers, licensed attorneys, and licensed physicians.

The rate used to calculate overtime. For a purely salaried non-exempt employee, the regular rate is the weekly salary divided by the actual hours worked that week (if using the half-time method) or divided by 40 (if using a fixed-workweek method). For hourly employees, the regular rate is typically the hourly rate. Overtime is paid at 1.5x the regular rate.

Prohibited employer conduct: discharging or discriminating against an employee because the employee has filed a complaint, instituted a proceeding, or testified in any FLSA matter. Protection applies to informal internal complaints, not just formal DOL complaints. Remedies include reinstatement, lost wages, liquidated damages, and attorney fees.

Requirement that an exempt employee be paid a predetermined amount each pay period not subject to reduction because of variations in the quality or quantity of work. The employer must pay the full salary for any week in which the employee performs any work. Improper deductions from salary - even occasional ones as part of a practice - can break the salary basis and cost the exemption.

Requirement that an exempt employee's salary meet a minimum threshold. Currently $684/week ($35,568/yr) under the federal rule (2019 rule, in force as of April 2026 after the November 2024 Texas court vacatur of the Biden-era increases). State thresholds: California $1,352/wk, Washington $1,541.70/wk, New York metro $1,275/wk. The higher of federal or state applies.

Time limit for bringing an FLSA claim. Two years from the date of each violation for ordinary (non-willful) violations. Three years for willful violations. Each unpaid payday constitutes a separate violation. Employees who file DOL complaints or initiate legal action stop the clock from running on future violations from that date.

Common term for the executive, administrative, and professional exemptions (EAP) created by FLSA § 213(a)(1) and implemented through 29 CFR Part 541. The term comes from the traditional distinction between 'white collar' (office/professional) and 'blue collar' (manual/production) work. The regulations also include the computer employee and outside sales exemptions in Part 541.

The section of the Code of Federal Regulations where the DOL defines and implements the white-collar FLSA exemptions. Published by the DOL pursuant to authority granted by FLSA § 213(a)(1). The definitive legal reference for all exempt classification questions. Key subparts: 541.100 (executive), 541.200 (administrative), 541.300 (professional), 541.400 (computer), 541.500 (outside sales), 541.600 (salary), 541.601 (HCE).