I am a Manager at a Florida based company. My direct reports are scattered throughout the country. I have direct reports in two states (CA and IL) who are compensated more than me and are also non-exempt. Is this legal?

Thanks for your time.

Sure. No laws say that exempt employees must be paid more than non-exempt employees (skilled tool and die makers can make six figures with overtime) or that the boss has to be paid more than his or her subordinates (same example as above.)

Whether you are being paid fairly for your market value as well as what internal equity dictates you be paid is a separate matter but it's not a legal issue. If you don't feel your compensation is adequate, that's a discussion you need to have with your boss.