a non-exempt employee is eligible for overtime payments where an exempt employee is not.  An exempt employee must be paid on a salary basis and meet the wage and duties test according to the DOL FLSA guidelines.  A non-exempt employee can be paid salary however they are eligible for any hours over 40 (based on state could be different requirements).  Yes non-exempts should be completing timesheets and you can deduct lunches however you cannot deduct for breaks less than 30 minutes.  This means that if you allow 15 minute breaks then an employee must be paid even if non-exempt. Breaks that are not paid must be at least 30 minutes and uninterrupted and you cannot tell an employee they must remain on site for this break. I'd put policy in place to have non-exempt staff confirm that they have reported all of their time when submitting time sheet.  Most do this on their weekly acknowledgement of their timesheet. Your PTO can still be lump sum with limited carry over (be sure to check state laws as some states differ).  I think I got everything here. 

All non-exempt employees must be paid overtime - salaried or not.  Please make sure they know this and report any overtime work for payment.  And don't forget, work from home after regular business hours is still work and is eligible for ot pay.

Hi there! You may also explore the elaws FLSA Overtime Security Advisor: http://webapps.dol.gov/elaws/overtime.htm . The DOL website offers great resources and fact sheets. Additionally, the electronic Code of Federal Regulations offers excellent information about exempt employees: Title 29, Volume 3, Chapter V, Browse Parts 500-800: https://www.ecfr.gov/cgi-bin/text-idx?SID=a75e174605ca77fae12b0c9250d68076&mc=true&tpl=/ecfrbrowse/Title29/29cfrv3_02.tpl#0