Overtime Pay Rules: Federal FLSA Requirements Explained
Federal overtime law under the Fair Labor Standards Act (FLSA) is frequently misunderstood — and frequently violated. Here's a clear breakdown of who qualifies, how it's calculated, and what your rights are.
The Basic Federal Rule
Under the FLSA, non-exempt employees must be paid at least 1.5× their regular rate of pay for all hours worked over 40 in a single workweek. This applies in all 50 states; several states have more generous rules (California pays overtime after 8 hours in a single day).
- Workweek: Any fixed, regularly recurring 7-day period — doesn't have to be Monday–Sunday
- Regular rate: Includes most forms of compensation — shift differentials, non-discretionary bonuses, commissions — not just base pay
Exempt vs. Non-Exempt: Who Gets Overtime
The three common "white collar" exemptions require ALL of the following:
- Salary basis test: Paid a fixed salary, not docked for partial-day absences
- Salary level test: Salary at or above $684/week ($35,568/year) — pending DOL increase to $1,059/week
- Duties test: Primary duties must qualify under executive, administrative, or professional definitions
Meeting only the salary tests doesn't create an exemption — the duties test must also be satisfied. Job title doesn't matter; actual duties do.
Calculating Overtime for Different Pay Types
Hourly workers: OT pay = (hours over 40) × (hourly rate × 1.5)
Salaried non-exempt workers: First calculate the regular hourly rate: weekly salary ÷ hours actually worked. Then pay 0.5× that rate for each hour over 40 (the regular rate is already included in the salary — you only owe the extra half).
Workers with non-discretionary bonuses: Non-discretionary bonuses must be included in the regular rate before calculating overtime. Many employers omit this step — it's a common wage theft violation.
Common Violations to Watch For
- Off-the-clock work: Required work before/after a shift or during unpaid breaks must be counted and compensated
- Averaging hours across weeks: You can't average two 45-hour weeks as two 42.5-hour weeks — each workweek stands alone
- Misclassifying as independent contractors: If the employer controls how and when you work, you may be an employee regardless of your contract
If you believe you're owed unpaid overtime, the DOL Wage and Hour Division accepts complaints at dol.gov/agencies/whd. The statute of limitations is 2 years for non-willful violations, 3 years for willful. Use our overtime pay calculator to calculate what you should have been paid.