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Overtime Pay in the US: How the FLSA Actually Works

US overtime law comes down to one federal law and one key distinction: whether you're classified as 'exempt' or 'non-exempt.' Here's what that actually means for your paycheck.

The Fair Labor Standards Act sets the federal baseline

The FLSA is the federal law that sets minimum wage and overtime requirements nationwide. States and even some cities can set their own additional rules that are more generous to workers, but never less generous than the federal floor.

Overtime kicks in after 40 hours in a single workweek

Under federal law, overtime is calculated per workweek, not per day β€” working ten hours on Monday doesn't trigger overtime on its own, only total hours over 40 within that same defined workweek do. Some states, notably California, also require daily overtime after a certain number of hours in a single day.

Overtime pay is 1.5 times your regular rate

Eligible employees must be paid at least one and a half times their regular hourly rate for each hour worked beyond 40 in the workweek. The 'regular rate' isn't always just your stated hourly wage β€” it can include certain bonuses and other compensation, which can raise the true overtime rate above a simple 1.5x of base pay.

Exempt employees generally don't get overtime at all

Employees classified as 'exempt' β€” typically certain salaried employees in executive, administrative, professional, outside sales, or specific computer-related roles who meet both a salary and job-duties test β€” are not entitled to overtime pay under federal law, no matter how many hours they work.

Being salaried doesn't automatically make you exempt

A common misconception is that all salaried employees are automatically exempt from overtime. In reality, exemption requires meeting specific federal criteria on both pay structure and actual job duties β€” simply being paid a salary instead of an hourly wage isn't enough on its own.

The minimum salary threshold for exemption changes periodically

The Department of Labor sets and periodically updates a minimum salary level an employee must earn to even be considered for exempt status, and this threshold has been the subject of new rules and legal challenges in recent years. Always check the Department of Labor's current figure rather than relying on an older number.

Independent contractors aren't covered by FLSA overtime at all

Overtime rules only apply to employees, not independent contractors. Worker misclassification β€” labeling someone a contractor when they're functionally an employee β€” is a common source of wage disputes and government enforcement action.

State law can require more than federal law

Beyond California's daily overtime rules, other states have their own quirks, such as different overtime multipliers for specific industries or lower weekly thresholds. When state and federal overtime rules differ, the employee is generally entitled to whichever rule is more favorable to them.

Why the exempt/non-exempt distinction causes so much confusion

Job titles alone don't determine exemption status β€” a role titled 'manager' isn't automatically exempt if the actual day-to-day duties don't meet the federal duties test, and misclassifying employees (intentionally or not) is one of the most common wage-and-hour violations employers face. If your actual responsibilities don't match what the exemption categories describe, the job title on your business card doesn't override the law.

What to do if you think you're owed overtime

If you believe you've been misclassified as exempt or simply weren't paid required overtime, options generally include raising it with your employer's HR department, filing a complaint with the US Department of Labor's Wage and Hour Division, or consulting an employment attorney, particularly if back pay may be owed. This page explains how the rule works, not legal advice for a specific situation.

Frequently Asked Questions

Does working through lunch or answering after-hours emails count toward overtime?

It can, if the employer knew or should have known the work was happening and it pushed total hours over 40 for the week β€” non-exempt employees generally must be paid for all hours actually worked, even informally, though proving unrecorded hours can be a practical challenge.

Can my employer just give me time off instead of overtime pay?

For private-sector non-exempt employees, federal law generally requires actual overtime pay rather than 'comp time' (paid time off in lieu of overtime pay), with comp time arrangements being far more common and more clearly permitted in public-sector government jobs instead.

Are tipped employees entitled to overtime?

Yes β€” tipped employees are still covered by federal overtime rules, though the underlying calculation involving the tipped minimum wage and tip credit adds an extra layer of complexity compared to a standard hourly employee.

Do part-time employees get overtime?

Overtime eligibility depends on hours actually worked in a week and exemption status, not full-time versus part-time labels β€” a part-time employee who happens to work over 40 hours in a given week is generally still entitled to overtime for those extra hours if they are non-exempt.