An exempt employee is one who is not subject to overtime rules, while non-exempt employees must be paid overtime based on federal laws (or state if more stringent).
Employees are usually non-exempt unless they fall into one of these categories:
Salary level: Employees who are paid less than $23,600 per year ($455 per week) are nonexempt, while employees who earn more than $100,000 per year are almost certainly exempt.
Administrative employees: Their work must be office or non-manual work, must be directly related to management or general business operations of the employer or the employer’s customers, and also must primarily involve independent judgment and discretion about significant matters.
Executive employees: They must regularly supervise two or more other employees, have some genuine input into the job status of other employees (such as hiring, firing, promotions, or assignments), and also must have management as the primary duty of the position.
Computer Employees: They must apply system analysis techniques and procedures including consulting with users to determine hardware, software, or system functional specifications and design, development, documentation, analysis, creation, testing, or modification of computer systems or programs.
Exempt Professionals: Professionally exempt work must be predominantly intellectual, require specialized education, and involve the exercise of discretion and judgment. Professionally exempt workers must have education beyond high school (and usually beyond college) in fields that are more “academic” than the mechanical arts or skilled trades. Advanced degrees are the most common measure of this, but are not absolutely necessary if an employee has attained a similar level of advanced education and performs essentially the same kind of work as similar employees who do have advanced degrees.
Creative professionals: This includes actors, musicians, composers, writers, cartoonists and some journalists. It is meant to include employees who contribute a unique interpretation or analysis in jobs whose work requires invention, imagination, originality or talent.
For more detailed information on this topic, see http://www.dol.gov/whd/regs/compliance/fairpay/fs17a_overview.pdf