Payroll
What is an Exempt Employee?
An exempt employee is a worker who is not entitled to minimum wage or overtime pay protections under the FLSA. To be exempt, they generally must be paid a salary above a certain threshold and perform executive, professional, or administrative duties.
The Three Tests for Exemption
- 1Salary Basis: Paid a predetermined, fixed salary.
- 2Salary Level: Paid above the FLSA minimum threshold.
- 3Duties Test: Primary duties involve management, specialized knowledge, or independent judgment.
Why Track Their Time?
Even though they don't get overtime, tracking exempt employee time is vital for job costing, client billing, FMLA eligibility, and ensuring workloads are sustainable.
Project Tracking for Salaried Staff
ClockIt streamlines time tracking for exempt staff with 'bulk entry' features, focusing on project allocation rather than punch-in/out policing.
Get Started with ClockItFrequently Asked Questions
- Can I dock an exempt employee's pay for missing work?
- Generally no. Deductions for partial day absences can jeopardize their exempt status, though full day deductions for personal reasons are sometimes permitted.
- Do exempt employees need to clock in?
- Legally no, but companies often require it for billing, PTO tracking, or data analysis purposes.
- How does the salary threshold change?
- The Department of Labor periodically updates the minimum salary threshold; employees earning below the new limit may become non-exempt and eligible for overtime.
Related Terms
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