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Overtime

Federal Overtime Rules

· 458 words

Federal overtime law is the Fair Labor Standards Act (FLSA): non-exempt employees must earn at least 1.5× their regular rate for every hour worked beyond 40 in a single workweek. There is no federal daily overtime — only the weekly 40-hour line matters at the federal level.

The three pillars

1. The 40-hour workweek

A workweek is a fixed, recurring 168-hour period (seven consecutive 24-hour days) chosen by the employer. Overtime is calculated inside each workweek separately — two weeks can never be averaged. A common payroll error is treating an 80-hour biweekly period as the threshold; the law looks at each week.

2. The 1.5× regular rate

Overtime is 1.5× the regular rate, not necessarily the base wage. The regular rate is total straight-time pay ÷ hours worked, and it must include:

It excludes discretionary bonuses, gifts, PTO payouts and expense reimbursements.

3. Exempt vs. non-exempt

Exempt employees are not owed overtime. To be exempt, a worker generally must meet both:

A job title or a salary by itself does not create an exemption — misclassification is one of the most common wage violations.

What counts as hours worked

Only time actually worked counts toward the 40-hour trigger:

Counts as workedDoes not count
Regular shift hoursPaid holidays
Short rest breaks (5–20 min)Vacation / PTO
Required trainingSick leave
Some travel during the workdayOrdinary commuting

A week with 8 holiday hours plus 36 worked hours has no federal overtime, because only 36 hours were worked.

States can add more (never less)

The FLSA is a floor. States may add protections:

StateExtra rule
CaliforniaDaily OT over 8h, double time over 12h, 7th-day rules
AlaskaDaily OT over 8h
NevadaDaily OT over 8h (lower-wage employees)
ColoradoDaily OT over 12h

Use the overtime calculator and pick your state to apply daily rules; see the California overtime guide for the most complex case.

Putting it together

For a non-exempt worker at $24/hour who works 49 hours in a workweek:

  1. Regular: 40 × $24 = $960
  2. Overtime: 9 × $36 = $324
  3. Gross: $1,284

If a $200 production bonus also applied that week, the regular rate would rise and the overtime owed would increase — the FLSA requires that recalculation.

Frequently asked questions

What is the federal overtime rule?
Is there federal daily overtime?
Who is exempt from federal overtime?
Can an employer give comp time instead of overtime pay?

Sources & further reading

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