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:
- shift differentials,
- non-discretionary bonuses (production, attendance),
- commissions.
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 duties test (executive, administrative, professional, computer, or outside sales), and
- a salary threshold (paid on a salary basis above the federal minimum).
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 worked | Does not count |
|---|---|
| Regular shift hours | Paid holidays |
| Short rest breaks (5–20 min) | Vacation / PTO |
| Required training | Sick leave |
| Some travel during the workday | Ordinary 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:
| State | Extra rule |
|---|---|
| California | Daily OT over 8h, double time over 12h, 7th-day rules |
| Alaska | Daily OT over 8h |
| Nevada | Daily OT over 8h (lower-wage employees) |
| Colorado | Daily 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:
- Regular: 40 × $24 = $960
- Overtime: 9 × $36 = $324
- 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.