How Overtime Pay Works in the US
Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive overtime pay at a rate of at least 1.5 times their regular rate of pay for all hours worked over 40 in a workweek. A workweek is a fixed recurring period of 168 hours — 7 consecutive 24-hour periods. Employers can designate any day as the start of the workweek, but once established, it must remain consistent. Overtime is calculated on a weekly basis — hours cannot be averaged across two weeks to avoid overtime obligations.
Who Is Entitled to Overtime?
Non-exempt employees covered by the FLSA are entitled to overtime. Most hourly workers are automatically non-exempt. Salaried employees may be exempt from overtime under the FLSA's white-collar exemptions if they meet both a salary threshold (currently $684/week as of 2020, with updates periodically proposed) and a duties test for executive, administrative, or professional roles. Many states have higher salary thresholds or broader overtime protections than federal law — California, New York, and Washington have some of the most protective state overtime laws.
Calculating Overtime Pay
The calculation is straightforward for hourly workers. Regular pay = regular hours × hourly rate. Overtime pay = overtime hours × (hourly rate × 1.5). Total pay = regular pay + overtime pay. For an employee earning $25/hour who works 50 hours in a week: Regular pay = 40 × $25 = $1,000. Overtime pay = 10 × $37.50 = $375. Total pay = $1,375. The regular rate of pay for overtime calculation purposes includes most forms of hourly compensation — base rate plus production bonuses, shift differentials, and certain other additions.
Double Time
Some states, most notably California, require double time pay (2x regular rate) for certain hours worked. California requires double time for hours worked over 12 in a single workday and for all hours worked on the 7th consecutive day in a workweek. Some union contracts also specify double time for holidays and other premium situations. Double time is not required under federal FLSA law — it is a state or contractual requirement.
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Frequently Asked Questions
Is overtime required for salaried employees?
Only for non-exempt salaried employees. Exempt salaried employees (meeting both salary level and duties tests) are not entitled to overtime under the FLSA.
Can my employer give me comp time instead of overtime pay?
Private sector employers generally cannot substitute comp time for overtime pay under the FLSA. Government employers may offer comp time under specific conditions.
What if I work overtime without my employer's permission?
Under the FLSA, you must be paid for all hours worked, including unauthorized overtime. However, your employer can discipline you for working unauthorized overtime while still being required to pay you for those hours.
Does overtime apply to part-time workers?
Yes, if a part-time employee works more than 40 hours in a workweek. Hours below 40 are paid at the regular rate regardless of what was originally scheduled.
How does holiday pay affect overtime?
Holiday pay for days not worked is generally not included in the regular rate for overtime calculation. However, if you actually work on a holiday and receive holiday premium pay, those hours count toward the 40-hour overtime threshold.
What is the penalty for not paying overtime?
Employers who violate FLSA overtime requirements are liable for unpaid overtime wages plus an equal amount in liquidated damages, plus attorney's fees. Willful violations can result in criminal prosecution.
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