What does 'exempt' status mean for an employee?

The 'exempt' status for an employee is predominantly associated with the Fair Labor Standards Act (FLSA) regulations, which dictate how employees are classified regarding pay. Employees classified as exempt are not entitled to overtime pay when they work more than the standard 40 hours in a workweek. This classification typically applies to salaried employees who meet certain responsibilities, duties, and salary thresholds.

The purpose of this distinction is to differentiate between roles where employees are expected to manage their own schedules and workloads and those for whom overtime pay is a requirement to compensate for extra hours worked. As such, exempt employees are often in professional, managerial, or executive positions.

In contrast, the other options reflect different employment aspects that do not specifically pertain to exempt status. Commission pay can apply to various roles, benefits eligibility is dictated by company policy and not by exempt status, and flexible schedules can be available to both exempt and non-exempt employees. Thus, the characteristic that defines exempt status within the context of payroll and labor laws is the absence of eligibility for overtime compensation.