There are several classification for employees. The two most common are Exempt and Non-Exempt employees. What is the difference? The federal Fair Labor Standard Act (FLSA) requires that employers pay minimum wage and in addition pay overtime to employees that work over 40 hours during a work week. There are exception base on the state the employee works in. Many states have their own wage and hour laws. Make sure to verify with your State Department of Labor.

A non-exempt employee, (under FLSA) that work over 40 hours during the workweek are due overtime. Employers must pay them one-and-half times their regular rate of pay. 

Exempt employees are also known as white collar workers and are exempt from overtime pay. The white collar exempt employee are for administrative, executive and other professional.

However, effective December 1, 2016 The Department of Labor (DOL) has released final overtime regulations, effective December 1, 2016, that increase the salary threshold for exemption from $455 per week to $913 per week. On an annual basis, this is a salary increase from $23,660 to $47,476 per year. The DOL will automatically update the standard salary and compensation levels every three years going forward. The DOL has set the total annual compensation for exempt highly compensated employees at $134,004, up from $100,000. Employers will be able to count nondiscretionary bonuses, incentive payments, and commissions towards as much as 10 percent of the salary threshold beginning December 1, 2016. In order to count, these payments must be made on a quarterly or more frequent basis.