Are protected veterans non-exempt employees?

I'm not certain about the veteran aspect of your question.  But I can address the general exempt versus non-exempt issue. The fact is that employee misclassification for the purposes of avoiding overtime pay is a deception that many employers attempt to use.  Misclassificationpan occurs when an employer intentionally places a worker into an exempt category when if fact the employee is non-exempt.  It attempts to trick the worker into thinking that their job title makes them ineligible for overtime pay. However, federal law states that an employee's job duties, not their job title, is the main factor in determining who can receive overtime pay.  If an employee's duties will otherwise remain the same, and the only change is their non-exempt to exempt status, they have a claim here. Therefore, just because someone is a salaried doesn't necessarily mean that they are "exempt" from certain labor laws.

By way of background,  being paid on a salary is just part of the test for most forms of exemption, but it's not the only element.  It is possible to be salaried and to get overtime.  As a general rule exempt employees are: Management (they supervise other people); Professionals (their job requires advanced or technical training - engineers, accountants, lawyers, or the like); Administrators (they exercise considerable discretion in their position/duties). If the your husband's job meets these criteria then he an exempt employee and there is no upper limit in how many hours that he can be required to work for his base salary pay.  However, if these criteria do not describe his job duties, then he are a non-exempt employee and is entitled for overtime for any hours that he works over 40 per week. 

You need to contact your state's labor department or file a complaint with the US Department of Labor.  Possibly, just making your husband's employer aware that he knows his rights and can take action will make his employer re-think the change in status.