What Is Overtime Pay? FLSA Rules for Hourly Workers

Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must receive 1.5 times their regular rate of pay for any hours worked over 40 in a single workweek. A workweek is any fixed and regularly recurring period of 168 consecutive hours (7 × 24).

Worked example:

• Regular rate: $20/hour
• Hours worked Mon-Sun: 45
• Pay = (40 × $20) + (5 × $20 × 1.5) = $800 + $150 = $950

What counts as 'hours worked'?

• All time on duty (including required meetings and short rest breaks under 20 minutes)
• On-call time if you're not free to use it for your own purposes
• Required training time
• Travel between jobsites during the workday

See DOL — Overtime Pay for the official rule. This is a federal floor — states can require more, but not less.

Most hourly workers are non-exempt and entitled to FLSA overtime. 'Exempt' workers — generally salaried executive, administrative, professional, computer, and outside sales employees — are not entitled to overtime.

To be exempt under the FLSA, an employee generally must:

1. Be paid on a salary basis (a fixed amount per pay period regardless of hours), AND
2. Be paid at or above the salary threshold ($684/week as of 2024 — verify the current threshold at DOL — Fact Sheet #17A), AND
3. Perform the type of duties the FLSA defines as exempt (managing other employees, exercising independent judgment on significant matters, requiring advanced knowledge, etc.)

If any one of these tests fails, the worker is non-exempt and entitled to overtime — even if the employer calls them 'salaried' or 'manager.'

Common misclassifications to watch for:

• 'Manager' titles for workers who don't actually manage other people
• 'Salaried non-exempt' workers (real category — they're salaried but still get overtime over 40 hours)
• 1099 workers who are functionally employees (the IRS / DOL look at the working relationship, not the label)

The 1.5x multiplier is applied to your regular rate of pay, which can include more than just your hourly wage:

• Hourly wage × hours
• • Non-discretionary bonuses (production, attendance, longevity)
• • Shift differentials
• • Commissions
• ÷ Total hours worked = Regular rate

Example with a shift differential:

• 40 regular hours × $20/hour = $800
• 5 night-shift hours × $5 differential = $25
• Total straight-time pay = $825
• Total hours = 45
• Regular rate = $825 / 45 = $18.33 (this is wrong, let's redo)

Actually, the FLSA 'regular rate' calculation is:

• 40 hrs × $20 + 5 hrs × $25 (the actual rate including differential) = $800 + $125 = $925 in straight-time pay
• Regular rate = $925 / 45 hours = $20.56
• Overtime premium = 5 hrs × $20.56 × 0.5 = $51.40 (the 0.5 is the additional half on top of the straight-time already paid)
• Total pay = $925 + $51.40 = $976.40

Tips and overtime: For tipped workers, overtime is calculated on the full minimum wage (not the lower tipped minimum wage) plus any tip credit applied against it. See DOL Fact Sheet #15A for the exact mechanics.

States can require more overtime than the FLSA — and several do.

Daily overtime rules (over 8 hrs/day):

• California — 1.5x for hours over 8/day; 2x for hours over 12/day; 1.5x for the first 8 hours on the 7th consecutive day
• Alaska — 1.5x for hours over 8/day or over 40/week
• Nevada — 1.5x for hours over 8/day for employees earning less than 1.5x the state minimum wage
• Colorado — 1.5x for hours over 12/day or over 12 consecutive hours
• Puerto Rico — 1.5x for hours over 8/day

'Day of rest' rules:

• Several states require overtime on the 7th consecutive workday

Stricter exemption tests:

• California, Washington, and other states use higher salary thresholds for exempt status than the federal $684/week

For your state's exact rules, check your state Department of Labor or DOL — State Labor Laws.

If your employer is not paying overtime you believe you are owed:

1. Track your hours. Keep your own records of start and stop times daily. Pay stubs, time clock printouts, schedules, texts, and emails about scheduling are all evidence.

2. Check classification. Confirm you are non-exempt. If you are paid hourly with no salary, you almost certainly are. If you are paid a salary, verify against the three-part test in DOL Fact Sheet #17A.

3. Talk to your employer. Sometimes it's a payroll error rather than an intentional violation.

4. File a Wage and Hour Division complaint. Free, confidential, no attorney needed: DOL WHD — How to File a Complaint. The DOL can investigate and recover back wages.

5. Check state options. Many state labor departments have their own enforcement and may be more accessible than federal. In some states, you can recover double damages.

6. Statute of limitations. Federal claims must be filed within 2 years (3 if the violation was willful). Don't wait too long.

This is general information, not legal advice. For complex cases, consult an employment attorney — many take wage-and-hour cases on contingency (no fee unless they win).