Define "exempt" status in relation to overtime pay.

Exempt status in relation to overtime pay refers to employees who do not receive overtime pay for hours worked beyond the standard workweek, typically defined as 40 hours. This classification means that these employees are excluded from the overtime provisions of the Fair Labor Standards Act (FLSA).

Employees classified as exempt are often in specific roles that meet certain criteria, such as executive, administrative, professional, or outside sales positions. These roles usually require specialized knowledge, decision-making authority, and higher levels of responsibility, which justify their exemption from overtime pay. As a result, regardless of the number of hours they work, exempt employees receive a fixed salary and are not entitled to additional pay for overtime hours worked.

In contrast, non-exempt employees are entitled to receive overtime pay, often at a rate of 1.5 times their regular pay for hours worked beyond 40 in a week, which illustrates the significance of understanding the distinction between these two classifications in payroll processing and compliance.