Perhaps I confused you by quoting the exempt employee part of the provision.
Exempt vs non-exempt I believe is largely defined by federal law. It describes whether you are obligated to pay them over-time or not, based on a couple of factors.
In general, to be considered an “exempt” employee, you must be paid by salary (not hourly) and must perform executive, administrative, or professional duties.
My underlying point is that the answer to some of your questions are defined by law.
