Overtime Pay

Pay at 1.5x your regular rate for hours worked over 40 in a workweek — a federal FLSA right for non-exempt employees that employers frequently misapply.

Under the Fair Labor Standards Act (FLSA), non-exempt employees must be paid at least 1.5 times their regular rate of pay for any hours worked beyond 40 in a single workweek. This is commonly called 'time and a half.' The FLSA sets the federal floor; some states have stronger overtime rules — California, for example, requires daily overtime (1.5x after 8 hours in a day, 2x after 12 hours), and several states use 32-hour or 36-hour thresholds for certain industries. Overtime is calculated per workweek — you cannot average hours across two weeks to avoid overtime liability.

The critical distinction for overtime eligibility is exempt vs. non-exempt classification. Exempt employees — those classified as executive, administrative, professional, or outside sales under FLSA exemptions — are not entitled to overtime pay regardless of hours worked. To qualify as exempt, an employee must (a) be paid a fixed salary above the minimum threshold (currently $684/week federally, with states like California setting higher floors) and (b) primarily perform duties that meet the relevant exemption test. Job title alone does not determine exemption status — a 'manager' who has no direct reports and spends most time on individual tasks may be misclassified as exempt. Misclassification of employees as exempt is one of the most common wage theft violations employers face.

Common overtime violations include: requiring off-the-clock work (answering emails outside hours, pre-shift prep, post-shift cleanup), failing to count training time or travel time between job sites, applying comp time instead of cash overtime pay for private-sector workers (illegal — only government employers can do this), and paying salary to workers who are legally non-exempt to avoid overtime liability. Employees who believe they've been denied overtime can file a complaint with the Department of Labor's Wage and Hour Division or pursue a private civil lawsuit — and may be entitled to recover back wages, an equal amount as 'liquidated damages,' and attorney's fees.

Exempt vs. Non-Exempt: How to Know

  • Salary alone doesn't determine exemption: you must be paid above the threshold AND your job duties must meet an exemption test.
  • Executive exemption: primary duty is management, supervises 2+ employees, has authority over hiring/firing decisions. A 'manager' title without actual management authority doesn't qualify.
  • Administrative exemption: primary duty is office/non-manual work directly related to management or business operations, with discretion and independent judgment on significant matters. Clerks and support staff rarely qualify.
  • Professional exemption: primary duty requires advanced knowledge in a field of science or learning, customarily acquired through a prolonged course of specialized intellectual instruction (e.g., attorneys, engineers, CPAs, doctors). Many white-collar jobs do not meet this standard.
  • Highly compensated employees (HCE): employees earning over $107,432/year are exempt if they perform at least one duty of an exempt executive, administrative, or professional employee.
  • When in doubt, assume non-exempt: misclassifying an employee as exempt exposes the employer to back-pay liability plus liquidated damages. The burden of proof for exemption is on the employer.

How Overtime Pay Is Calculated

Overtime is calculated on the 'regular rate of pay,' which is broader than base hourly wages. If a non-exempt employee also receives non-discretionary bonuses, commissions, or piece-rate pay, those amounts must be factored into the regular rate before calculating overtime. For example, an employee paid $20/hour who earns a $200 non-discretionary production bonus during a 50-hour workweek has a regular rate of ($20 × 50 + $200) / 50 = $24/hour. The overtime premium for the 10 overtime hours is 0.5 × $24 × 10 = $120 — not just 0.5 × $20 × 10 = $100. Most employers get this wrong, resulting in chronic underpayment of overtime on bonus-earning non-exempt workers.

Example

A warehouse supervisor is paid a $600/week salary and classified as 'exempt' because of her manager title. But she directly supervises only one employee, spends 80% of her time picking orders alongside her team, and has no authority over hiring or firing. She regularly works 50-hour weeks. Her employer's classification is likely wrong — she doesn't meet the executive exemption's duty test. If she files a DOL complaint, she could recover 10 hours × ($600/40 hours = $15/hour regular rate × 1.5) = $22.50/hour × 10 hours × 52 weeks = $11,700 in back wages, plus an equal amount in liquidated damages.