This is an employee that is entitled to earn the federal minimum wage and qualifies for overtime pay. Non-exempt employees are paid for the hours they work, including any overtime hours beyond 40 hours a week. Once a non-exempt employee surpasses 40 hours a week, they must receive 1.5 times their hourly wage.
What are the advantages of non-exempt employees?
1. Flexibility in the wage structure
Unlike exempt employees, non-exempt employees can be paid either on an hourly or a salaried basis – offering employers higher flexibility in the type of wage structure. Furthermore, non-exempt employees that are being paid minimum wage cost lesser to hire than their exempt counterparts.
2. Incentive to work
By guaranteeing employees minimum overtime pay of 1.5x their hourly wage, employers can motivate them to work harder towards achieving the company’s goals. On the other hand, exempt employees are less likely to be as motivated to work after-hours since they get paid a fixed amount.
3. Flexibility in roles and job duties
Non-exempt employees can work in roles ranging from administrative to managerial. It provides the employer and the employee more flexibility with regard to work, increasing the potential for cross-department work.