DECA Human Resources Management Practice Exam

What does the term “non-exempt employee” refer to?

1. Employees who are paid a fixed salary

2. Employees entitled to overtime pay

3. Employees working part-time only

4. Employees in management positions

The correct answer is: Employees entitled to overtime pay

The term "non-exempt employee" refers specifically to employees who are entitled to overtime pay according to the Fair Labor Standards Act (FLSA). This classification is significant because non-exempt employees typically earn less than a specified salary threshold, which mandates that they receive compensation for any hours worked over 40 in a workweek at a rate of at least 1.5 times their regular hourly wage. This distinction is crucial for employers as it determines the legal obligations regarding wage and hour laws. Non-exempt employees often include those in manual labor, service positions, and certain types of clerical work, making them eligible for overtime compensation. In contrast, the other options do not accurately depict the definition of non-exempt employees. Employees who are paid a fixed salary may or may not be non-exempt, depending on their job duties and salary level. Part-time employees can be both exempt and non-exempt, and many management positions are often classified as exempt, therefore, they wouldn’t typically qualify for overtime pay. Understanding these classifications is essential for proper compliance with labor regulations.