Nowadays, employers are having a difficult time trying to stretch their budget to fund the needs of their company. A common problem that adds more to this burden is the responsibility to pay employees for overtime work. Working overtime is nothing bad, but sometimes employees work beyond office hours even if they are not required to do that. This only adds up to the company's financial problem that the employer is trying to solve.

To avoid these situations from happening, an employer should only allow a certain group of employees to work overtime. The following are some guidelines to help an employer determine which employees are exempted, and which or not:

Positions that are exempted

  • Administrative – Job positions that require personal judgments in evaluating the performance of other employees at work

  • Executive – Positions that direct instructions to two or more employees.

  • Professional – Employees who either finished a specific field of study, or have creative ability or skill

  • Computer experts – Employees who are knowledgeable in handling computer software and hardware

  • Outside sales – Sales representatives whose jobs are often away from the company's working location

Positions that are not exempted

Employees whose job positions do not fall under the categories given above are considered non-exempt employees. Some examples of these jobs include utility workers, service-related positions, construction workers, etc.


An employee's salary may also be a basis to determine whether he is an exempt or non-exempt worker. In most cases, workers who have salaries that fall near the federal minimum wage are not exempted from overtime. Because professionals, administrative positions, and experts have higher salary rates, they are exempted from working overtime.

Once an employer has considered these things, he can begin cost-cutting by minimizing labor costs. However, he should avoid committing certain mistakes that may cost him even more money. The mistakes include:

  • Insufficient planning

  • Not following an exemption rule

  • Changing an employee's status

  • Failure to issue a legal release incentive

If you are an employer, make sure that all the steps you are going to take are legal and necessary. Always take your employees' welfare into consideration. Think about their needs and rights first, and then their obligations. Remember, you cannot run a company without a reliable and effective workforce.