It means that, for example, I don't get docked in pay if I work a few less hours this week. It means I don't punch a timeclock.
We just had a bit of a big deal about this at work. Some of us were taking parts of days off, and marking them as such in our system: "I took two hours off today." HR told us to stop. Apparently, there's some kind of a legal/liability issue they were getting into, where exempt employees don't have to do that. We can just take a couple hours off, without using up vacation time to do it. (I don't know the details about it. I can't tell you how to make your HR department see it this way. To me, it was just one more of those random HR policy changes. But the point is, exempt is a different set of rules, and some of those rules are pretty nice.)
Exempt also means, once in a while, that I get called in after hours, or that I work unpaid overtime. I accept that, as long as it doesn't happen too often. I accept the bad part of the deal in order to also get the good part.
If you refuse to work unpaid overtime, are you also willing to let go of the good parts of the deal?
Regarding exempt employees having to take PTO, recent court challenges in California have come out in favor of the employer. See Rhea V. General Atomics. http://caselaw.findlaw.com/ca-court-of-appeal/1673316.html
Asking for more labor in return for no more pay is wrong and allowing this kind of immorality to happen by willingly participating in it is also wrong. Therefore, living a moral life is incompatible with unpaid overtime.
In today's business environment, everything seems to be both urgent and important. I think that a lot of that is due to who is in charge and what they think is pressing at the time. Everything cannot be urgent and important, only some small percentage of what needs to be done should be labeled as such.
The only way to fix this in the short term is for everyone to start saying "No" to chronic overtime. I define chronic overtime to be a work week which exceeds 48 hours over a 6 week average. Maybe then, companies will decide which tasks are really worthwhile and only direct efforts to them, or if they are understaffed, hire enough staff to get the important stuff done.
In the longer term, we need to reform the Fair Labor Standards Act of 1938 to eliminate unpaid overtime except in unusual situations. The European Working Time Directive is an excellent example of model legislation. We just have to keep nagging our congresspersons, and beat back the US Chamber of Commerce's lobbying efforts.
You've got to train the bozos that, once you're off, you're off.
At drinks after work, the co-founder of a startup complained about people leaving the co-working space at 5:00 every day. "What's the matter with them? Don't they like money?"
If you're having trouble envisioning that kind of environment, it means you're a good, empathetic person. And it means you've had the luck of only working for managers who believe in work/life balance and a healthy approach to the job. Hopefully their example sank in, because if you're not a manger already you're well on your way to being one of the good ones.
If you're not taking the hours off later than you're just working for free. Which, yes, is silly.