Payroll Information
Fair Labor Standards Act (FLSA)
Exempt & Non-Exempt Status
(Updated 2/28/2007)

Exempt or Non-Exempt?

The FLSA status (exempt or non-exempt) of an employee is determined by the duties of the position and the employee in the position. Status is not determined based on the classification (unclassified or classified) or the title of the position.

Employees with salaries below the FLSA threshold of $455 per week ($23,660 per year) are automatically non-exempt and eligible for overtime pay. This is true for all employees, including part-time workers. The salary is not prorated to equal a full-time salary. The only exception to the salary requirement is for teaching faculty.

Even when the minimum salary is reached, each position is considered to be non-exempt unless a formal review has been conducted. Reviewing a position for exempt status involves examining the position description and organizational chart, auditing the job and the employee, verifying degree requirements as indicated for the professional exemption, and applying the tests for exemption as set forth by the FLSA. HRS may utilize the FLSA Questionnaire and/or FLSA Compliance Checklist to assist with the review.

There are four categories of exempt status used at PSU: Executive, Administrative, Professional and Computer.

Exempt Employees

Exempt employees are paid a salary that covers the amount of time required to perform the job. That salary cannot be reduced because of variations in the quality or quantity of work performed. Because of this, exempt employees are only required to report leave, not time worked. An exempt employee is "exempt" from the overtime liability regulations and will not receive overtime pay for hours worked in excess of 40. Click here for more information on Time & Leave Reporting for exempt employees.

Non-Exempt Employees

A non-exempt employee will receive overtime compensation pay or compensatory time at one and one-half times the regular rate for hours worked in a workweek beyond 40. Non-exempt employees are paid on an hourly basis; the number of hours worked in any given workweek is reported along with any leave time used. Click here for more information on Time & Leave Reporting for Non-Exempt Employees.

If a non-exempt employee's status changes to exempt, all accrued compensatory time must be paid out or granted as time off, or a combination of both, before the change can take place.