Understanding Exempt vs. Non-Exempt Jobs

The terms "exempt" and "non-exempt" are defined under the Fair Labor Standards Act (FLSA).

FLSA is a federal law that establishes a minimum wage and limits the number of hours that may be worked in a standard work week. It provides standards for equal pay, overtime pay, record keeping, and child labor. Amended in 1967, it extended coverage to private university employees.

Exempt Jobs

Because of their duties, responsibilities, and salaries, employees in exempt jobs are not covered by the overtime provision of the FLSA. "Exempt" is not a title, but a legal classification based largely on job content. MIT's exempt staff are compensated on a salary basis without deductions for quality or quantity of work, except as permitted under the FLSA; for more information see the Personnel Policy Manual Section 7.1.3.

Following is a brief description of the qualifications for the exemption categories relevant to MIT:

Position Primary Duties

Executive
  • Manages the organization, department, or recognized unit/subunit.
  • Directs the work of at least two FTEs.
  • Hires, terminates, and/or makes recommendations regarding the employment status of others.

Administrative
  • Performs office or non-manual work directly related to management or general business operations.
  • Regularly demonstrates high levels of discretion and independent judgment with respect to matters of significance.

    Example: The employee has authority to:

    • formulate, affect, interpret, or implement management policies or operating practices
    • plan long- or short-term business objectives
    • commit MIT in matters of significant financial impact

Professional
(Learned and Creative)

Some professionals perform work that is predominantly intellectual and requires:

  • advanced knowledge of a field of science or learning that is customarily acquired through prolonged, specialized study
  • use of discretion and judgment regularly

Some professionals have primary duties that:

  • require invention, imagination, originality, or talent in a recognized artistic or creative field

Computer Professional
  • Apply systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications; or
  • Design, develop, document, analyze, create, test, or modify computer systems or programs, including prototypes, based on and related to user or system design specifications; or
  • Design, document, test, create, or modify computer programs related to machine operating systems; or
  • Do a combination of these duties that require the same level of skills.

Non-Exempt/Overtime-Eligible

  • Employees in non-exempt jobs are covered by the overtime provisions of the act and must be paid overtime (at one and one-half times the regular rate) for all hours worked over 40 hours per pay period.
  • Overtime may be worked only with prior approval of the supervisor/ manager.
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