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The statement that exempt employees must be paid overtime is false. Exempt employees are those who are excluded from the overtime provisions of the Fair Labor Standards Act (FLSA). This means they are not entitled to receive overtime pay for hours worked beyond the standard workweek, typically defined as 40 hours.

Exempt status usually applies to positions that meet specific criteria based on job duties and salary level, including executive, administrative, and professional roles. These employees generally receive a fixed salary regardless of the number of hours worked. This classification is designed to give employers more flexibility in managing their workforce.

Understanding why exempt employees do not receive overtime pay is essential for accurately interpreting labor regulations and ensuring compliance. Each state may have additional labor laws that provide different provisions, but the FLSA's definition of exempt status fundamentally determines overtime eligibility. Therefore, the correct response accurately reflects the legal framework surrounding exempt employees and their payment structures.