Understanding the
Differences between exempt and
nonexempt salaried employees
If an employee is paid a salary are they automatically exempt from overtime
and other Minimum Wage Act protections?
No. A salary is a form of payment and does not determine exemption status.
Exempt and nonexempt employees can both be paid on a salary basis.
Definition of a salary
A salary is a method of paying an employee where the employee regularly
receives a fixed, pre-determined amount of money (the salary) for every pay
period (which may be one week or longer, up to one month). You can find a more
detailed definition in L&I’s Administrative Policy ES.A.9.1.
Classifying employees as exempt or nonexempt
Employees can be classified as exempt from the protections of the Minimum
Wage Act if they meet the requirements in one of the exemption categories
outlined in the law. Most exemption categories require exempt employees to be
paid on a salary basis. Employees who meet the requirements for exemption, are
paid on a salary basis, and the salary meets or exceeds the salary threshold are
considered salaried exempt.
Employees who do not meet the requirements to be classified as exempt from the
Minimum Wage Act are considered nonexempt. Nonexempt employees may be
paid on a salary, hourly or other basis. Employees who do not qualify for an
exemption but are paid on a salary basis are considered salaried nonexempt.
Salaried exempt employees
Employees generally must meet a salary basis, salary level, and duties test to be
exempted from the Minimum Wage Act as an executive, administrative or
professional employee under RCW 49.46.010(3)(c).
An exempt employee’s salary cannot be subject to deductions because of
variations in the quantity or quality of the work performed. Unauthorized
reductions in a salary destroy the salary basis requirement, which means the
affected employee does not meet the requirements to be exempt from the
Minimum Wage Act.
Salaried exempt employees are exempt from all Minimum Wage Act protections
including overtime and paid sick leave.
Salaried nonexempt employees
Employers must provide all nonexempt employees with the protections outlined
in the Minimum Wage Act.
There are no salary or other pay-basis requirements in order for nonexempt
employees to receive Minimum Wage Act protections. Therefore, reductions in a
nonexempt employee’s salary may be permissible under certain, appropriate
circumstances.
Learn more
L&I overtime rule change
webpage: You can learn more
about the changes in the state’s
overtime rules at Lni.wa.gov/
OvertimeRulemaking
Online course: Employment
Standards has created an online
course that
features a
section that
explains the
details of
the changes
in the overtime rules, as well as a
section that can help an employer
determine if an employee should
be classified as exempt or
nonexempt.
Common questions: The
Employment Standards outreach
team has developed answers to
common questions related to the
rule changes.
Additional tools: On the
Resource Center web page, you
can find fact sheets, charts, case
studies and technical documents
related to the updates in the rules.
For more info
You can call Employment
Standards at 360-902-5316 or
toll free 1-886-219-7321.
Sign up for email updates:
Lni.wa.gov/wagenews
