What Is an Exempt Employee?
An exempt employee is someone who doesn't get paid overtime, period, no matter how many hours they work in a week. Generally, there are two things that matter to be considered exempt; you have to make above a certain salary (the government sets that number, and it changes sometimes), and your job has to actually involve decision-making, like managing people or running a part of the business.
Here’s what people get wrong a lot giving someone a fancy title does not exclude them.What they actually do every day is what counts.Picture your restaurant's general manager, the person hiring staff, building the schedule, dealing with problems as they come up. That's exempt. The line cooks and servers who work under them? Not exempt. Mixing this up, even innocently, can mean owing someone back pay once it gets caught.
One nice thing about exempt employees is their paycheck stays the same every period, hours or no hours, which makes budgeting a little easier. But you still have to be careful with things like deductions and time off. And as you open new locations or promote people into management, keeping everyone's classification straight only gets harder. This is exactly why a lot of businesses lean on payroll software that tracks who's exempt and applies the right rules without you having to double-check every paycheck.