US Overtime: Everything You Need to Know

What is overtime pay in the US?

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According to the Fair Labor Standards Act (FLSA) overtime pay is any additional compensation given to employees if they work more than 40 hours in a standard work week.

In some states of the U.S., like Alaska, Nevada, and Colorado, employees are eligible for overtime pay if they work more than 48 hours in a given week. Daily overtime can also be established, such as in California where employees are granted overtime pay if they work more than 8 hours in a day.

What is the standard overtime pay rate in the U.S.?

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In the U.S., an employee is paid overtime at 1.5 times their regular hourly rate. However, in California, if an employee works more than 12 hours in a single day or more than 8 hours on a 7th workday in a row, they are entitled to receive overtime pay at 2 times their usual hourly pay. Find out more about minimum overtime pay in the U.S. with our U.S. Minimum Overtime Wage Poster 2024.

How is overtime pay calculated?

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To calculate overtime pay for an employee, find out their regular hourly wage rate by dividing the salary by the number of hours that salary compensates for. Then, take the hourly pay rate to calculate the overtime rate for the employee using the following formula:

Hourly pay rate x Overtime Hours x Overtime Rate (1.5)

Who is eligible for overtime pay?

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In the U.S., any non-exempt employee who works more than 40 hours in a workweek is eligible for overtime pay at 1.5 times their regular hourly pay.

What is a non-exempt employee?

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Under the FLSA, a non-exempt employee is an employee who is eligible to receive overtime pay at 1.5 times their regular hourly rate if they work for more than 40 hours in a standard workweek.

What is an exempt employee?

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The FLSA states that an exempt employee is an employee who is not eligible for overtime pay, even if they work overtime. These employees include bona fide executive, administrative, professional, outside sales employees, and certain computer employees. These employees must have a minimum weekly earning, as stated by the FLSA, and must pass the job duties test to be considered exempt from overtime pay.

What is the minimum salary threshold for exempt employees?

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As of July 1, 2024, the minimum salary threshold for an employee to be considered ‘exempt’ is $844 per week ($43,888 per year). This rate will be increased on January 1, 2025, to $1,128 per week ($58,656 per year), and will be updated every three years.

For ‘highly compensated employees’, the minimum wage threshold for overtime exemption stands at $132,964 per year (effective July 1, 2024), which will be raised to $151,164 per year (effective January 1, 2025). Learn more about different exemption rates in the U.S. with our U.S. Exemption Rates Poster 2024.

Can I waive my right to overtime pay in the US?

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No, you can’t. Both federal and state laws mandate fair overtime pay; an employee can not voluntarily opt out of overtime compensation under any circumstance.

Can part-time employees receive overtime pay?

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Yes, overtime pay is not based on job status, but on the number of hours worked. Part-time employees can receive overtime pay (depending on company policy) if they work more than 40 hours in any given workweek.

How is overtime calculated for employees with multiple pay rates?

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For an employee who earns a wage based on multiple pay rates, the rate for overtime pay calculation must be derived from the average of all pay rates. For example, if an employee earns $10/hr at one job and $20/hr at a second job, the overtime rate will be calculated at the base rate of the average of both wages:

$10+$20=$30

$30/2= $15

Overtime will be calculated at 1.5 times $15, which will amount to $22.5 for every hour worked overtime.

What is comp time?

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Compensatory time or ‘comp’ time is when an employer grants an employee a paid day off for working overtime, instead of monetary compensation. For eg, if an employee works 50 hours in a workweek, an employer can give them a day off in the following week as overtime compensation.

Under the FLSA, exempt employees in the private sector and some government employees are eligible to receive comp time instead of overtime pay. However, non-exempt employees do not qualify for comp time; they must receive overtime compensation at 1.5 times their regular rate of pay.

Can I lose comp time?

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Yes, you can. According to the FLSA, an employee who earns comp time as overtime compensation must redeem it within 26 pay periods from when it was earned, otherwise, they may lose it.

Does overtime apply to holidays or weekends?

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Overtime in the U.S. is calculated for all hours worked over 40 in a workweek, regardless of whether it is a holiday or the weekend.

Is travel time considered overtime?

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Yes, travel time can be considered overtime if it occurs during regular working hours or is required by the employer.

Are breaks and meal periods included in overtime calculations?

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Short breaks, which can last 5-20 minutes, are included in overtime calculations. However, longer meal breaks (typically 30 minutes or more) are not included.

How does on-call time affect overtime?

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The FLSA considers on-call time as paid work time, as during on-call time, an employee is restricted in a way they cannot use the time effectively for their purposes. Hence, all hours worked overtime during this period must be fairly compensated.

Can my employer require me to work overtime?

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Yes, your employer can require you to work overtime and can discipline or terminate employees for refusing. Your employer is also not required to provide you prior notice to work overtime.

How do I calculate overtime for a fluctuating workweek?

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A fluctuating workweek is where an employee earns a fixed salary for varying work hours each week. Overtime for fluctuating workweeks is calculated at 0.5 times the employee’s hourly wage.

Are independent contractors entitled to overtime?

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No. Independent contractors in the U.S. are not entitled to receive overtime pay.

Does overtime pay apply to seasonal workers in the U.S.?

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Yes. Under the FLSA, seasonal employees are subject to the same overtime policies. If they work for more than 40 hours in a workweek, they should be paid 1.5 times their regular hourly rate.

Can an employer average overtime pay over two weeks?

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No. Overtime pay can only be calculated every week. It can not be averaged over any number of weeks.

Do sick leave or vacation hours count toward overtime?

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Paid time off does not count towards the 40-hour threshold for overtime. Overtime is only calculated for all hours worked.

Are nursing mothers entitled to overtime?

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Nursing mothers in the U.S. are entitled to breaks for expressing milk or breastfeeding at the workplace, however, this time is not classified as work hours and can not be included in overtime pay calculations.

Can salaried employees be paid overtime?

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Yes, Following the FLSA, a salaried employee can be eligible for overtime pay if they are classified as non-exempt and work more than 40 hours in a standard workweek.

Is mandatory overtime legal under the FLSA?

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Yes, mandatory overtime is completely legal under federal law, as long as the employee is rightfully compensated at 1.5 times their regular hourly wage for all hours worked as overtime.

What is the overtime rate for double time?

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Double time is not required by federal law but may be required by state law or company policy; it is typically twice the regular hourly rate. California requires employers to pay double overtime to an employee who works more than 12 hours in a day or more than 8 hours on a consecutive 7th workday.

Can tips be counted towards overtime pay?

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No. Tips can not be counted towards overtime pay. A tipped employee must be paid overtime based on their regular hourly wage, including tip credit. Overtime for tipped employees can not be calculated on their lowered cash wage.

Can an employee be fired for refusing to work overtime in the U.S.?

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Yes, an employer can terminate an employee for refusing to work required overtime, depending on company policy and applicable laws.

What are the penalties for not paying overtime in the U.S.?

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The U.S. DOL has set up strict penalties for employers who do not comply with the FLSA. Violation of the overtime pay law can lead to fines of up to $10,000, and repeat offenders can also face imprisonment. Employers may also be fined $1000 per violation of overtime obligations.

Furthermore, employers are responsible for covering the employee’s unpaid wages and face liquidated damages as well.

My employer has not paid my overtime wages. What do I do?

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If your employer has not paid your overtime wages, you can file a complaint with the U.S. Department of Labor’s Wage and Hour Division. You can also file a complaint with your state/local wage and hour office. It is also advised to seek legal counsel from an attorney to recover your lost wages.

US Overtime FAQs

Your Guide to Overtime in the U.S.

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