An exempt employee is one to which the Fair Labor Standards Act (FSLA) does not apply. As such, businesses aren't required to pay exempt employees overtime pay. In some cases, you may not be required to pay them minimum wage, either.However, a business can't simply classify all employees as exempt to avoid overtime and minimum wage laws. For an employee to qualify as exempt, they have to meet certain criteria.The Department of Labor (DOL) has three tests for exempt status. An employee must pass all three tests for the business to classify them as exempt. Those tests are:Keep in mind that states may have their own criteria for determining who can be an exempt employee. For example, in California, exempt employees must spend more than 50% of their work time performing exempt duties, and the employee must earn a minimum monthly salary of at least two times the state's minimum wage for full-time employment. So be sure to check with your state's Department of Labor to ensure you're meeting state-level as well as federal requirements.