How do you calculate overtime pay in New Jersey?

New Jersey’s overtime laws help ensure that employees are fairly compensated for their hard work, especially when they put in long hours. With strong protections in place, it’s important for both workers and employers to understand how overtime pay is calculated.

This guide breaks down the essentials of New Jersey overtime laws, focusing on when overtime applies, how to calculate it, and how to stay compliant.

This Article Covers:

Understanding Overtime in New Jersey

Which Overtime Laws Apply in New Jersey?

In New Jersey, both state and federal overtime laws apply, with state rules enforced by the New Jersey Division of Wage and Hour Compliance. Employers must pay overtime at one and a half times an employee’s regular hourly rate for all hours worked over 40 in a single workweek. These rules apply regardless of how an employee is paid—whether hourly, salaried, or by commission—and employers cannot average hours across multiple weeks to avoid overtime pay.

How are Overtime Laws in New Jersey Different from Federal Laws?

Unlike some states with more expansive regulations, New Jersey’s overtime laws generally align with federal standards under the Fair Labor Standards Act (FLSA).

In addition, the state mandates that overtime must be paid in cash and cannot be offset by non-cash benefits like meals, lodging, or tips—ensuring employees receive actual earnings for their extra time worked.

What is the Regular Rate of Pay in New Jersey?

In New Jersey, the regular rate of pay is the hourly rate used to calculate overtime, and it reflects all compensation an employee receives for their work—whether they are paid hourly, by salary, commission, or piece rate.

This rate is determined by dividing an employee’s total earnings (excluding overtime premiums and specific excluded payments) by the total number of hours worked in the workweek.

Certain types of payments, such as discretionary bonuses, gifts, paid time off, and employer contributions to benefit plans, are not included when calculating the regular rate of pay.

How Much is Overtime Pay in New Jersey?

New Jersey overtime laws require that employees receive overtime pay at a rate of 1.5 times their regular hourly wage for all hours worked beyond 40 in a single workweek. Other specifications include:

No Daily Overtime: New Jersey does not require overtime for working more than eight hours in a day.
No Weekend or Holiday Premiums: Working on Saturdays, Sundays, or holidays does not automatically trigger overtime unless the 40-hour weekly threshold is exceeded.

This means that in New Jersey, overtime pay is based strictly on hours worked in a single workweek, consistent with federal regulations.

Who is Eligible for Overtime Pay in New Jersey?

Most employees in New Jersey are eligible for overtime pay when they work more than 40 hours in a workweek. This includes hourly workers as well as employees paid by salary, commission, or piece rate, as long as they are not classified under one of the state’s recognized exemptions.

Check out our guide on overtime rights in New Jersey.

Who is Exempt from Overtime Pay in New Jersey?

Certain categories of employees are exempt from overtime pay in New Jersey. These include:

Executive and professional employees who meet federal criteria
Administrative employees whose main duty is sales, earn at least $400 per week, and get at least 50% of their pay from commissions
Outside sales employees working mainly away from the employer’s location
Certain commission-based employees in qualifying roles
Computer professionals doing advanced tech work and paid by salary or qualifying hourly rate
Highly compensated employees who meet federal earnings and duties thresholds
Business owners with at least 20% equity and active management roles
Bus drivers working for certified passenger carriers
Employees covered by valid collective bargaining agreements
Most government employees, who are not covered by New Jersey’s wage and hour laws
Specific religious or academic roles exempt under federal standards

Moreover, These exemptions generally depend on the nature of the employee’s duties and how they are compensated, rather than simply their job title.

For a detailed breakdown of the above, view Code of Federal Regulations.

Learn more in detail about New Jersey Salaried Employees Laws.

Overtime for Hourly Rate and Salaried Employees in New Jersey

How Do You Calculate Overtime for Hourly Employees in New Jersey?

In New Jersey, overtime for hourly employees is calculated based on the number of hours worked over 40 in a single workweek.

To calculate overtime:

Identify the regular hourly wage (minimum of $15.49/hour).
Multiply that rate by 1.5 for every hour over 40 in the workweek.

For example, if an hourly employee earns $20 per hour and works 45 hours in one week:

Regular Pay for 40 Hours: 40 × $20 = $800
Overtime Pay for 5 Hours: 5 × $30 ($20 × 1.5) = $150
Total Weekly Pay: $800 + $150 = $950

This example shows how overtime is determined strictly based on hours exceeding 40 in a workweek, following New Jersey’s rules which mirror the federal standard.

How is Overtime Calculated for Salaried Employees in New Jersey?

In New Jersey, salaried employees who are not classified as exempt under state or federal law are still entitled to overtime pay for hours worked over 40 in a workweek. The calculation is based on the employee’s regular hourly rate, which must be determined from their salary.

To calculate overtime for a salaried employee:

1. Convert the Salary to a Weekly Amount: If the employee earns an annual salary, divide it by 52 to get their weekly salary.

2. Determine the Regular Hourly Rate: Divide the weekly salary by 40 hours to find the regular hourly rate.

3. Calculate Overtime Pay: Multiply the regular hourly rate by 1.5, and apply that rate to any hours worked beyond 40 in the week.

For example, a salaried employee earns $1,000 per week and works 45 hours.

Regular Hourly Rate: $1,000 ÷ 40 = $25
Overtime Rate: $25 × 1.5 = $37.50
Overtime Pay (5 hours): 5 × $37.50 = $187.50
Total Weekly Pay: $1,000 + $187.50 = $1,187.50

This example shows how salaried employees in New Jersey can still earn overtime pay when they work more than 40 hours in a week, based on a calculated hourly rate.

Learn more in detail about your rights as an hourly employee in New Jersey.

Overtime for Complex Pay Structures in New Jersey

How Do You Calculate Overtime for Piece Rate or Commission Employees in New Jersey?

In New Jersey, employees who are paid through piecework or commissions are still entitled to overtime pay for hours worked over 40 in a single workweek.

The state’s regulations ensure that regardless of how an employee is compensated, they must receive fair pay that meets or exceeds the state minimum wage and proper overtime premiums.

Here’s how the regular hourly rate is calculated and how overtime is applied:

Step 1: Determine the Regular Hourly Rate

For piece-rate or commission workers, New Jersey law requires calculating the regular hourly rate by dividing total weekly earnings (excluding overtime premium pay) by the total number of hours worked in the same week.

Regular Rate = Total Weekly Earnings ÷ Total Hours Worked

This includes all compensation—such as commissions, bonuses (if non-discretionary), and piecework payments—but does not include tips, gifts, or overtime premiums.

Step 2: Apply the Overtime Rate

Once the regular hourly rate is determined, any hours worked over 40 in a workweek must be paid at 1.5 times that rate.

Overtime Rate = Regular Rate × 1.5

Overtime Pay = Overtime Hours × Overtime Rate

For example, an employee is paid solely through commissions and earns $775 in total commissions during one workweek. They worked 45 hours that week.

Step 1: Calculate the Regular Hourly Rate

Regular Rate = Total Weekly Earnings ÷ Total Hours Worked
Regular Rate = $775 ÷ 45 = $17.22/hour

Step 2: Calculate Overtime Rate and Pay

Overtime Hours = 45 − 40 = 5 hours
Overtime Rate = $17.22 × 1.5 = $25.83/hour
Overtime Pay = 5 × $25.83 = $129.15

Total Weekly Pay

Base Earnings = $775
Overtime Pay = $129.15
Total Pay = $904.15

The example shows how commission-based employees must still receive overtime pay for hours worked beyond 40, with the overtime premium calculated based on their actual weekly earnings.

How Do You Calculate Overtime with Multiple Pay Rates in New Jersey?

In New Jersey, when an employee works at more than one pay rate in the same workweek, employers must calculate overtime using the weighted average method. This ensures that overtime pay reflects the employee’s actual earnings across all roles, rather than just applying overtime to one specific rate.

To determine the weighted average regular rate, employers must:

1. Add all regular earnings from each pay rate for the week.

2. Divide total earnings by total hours worked to find the average hourly rate.

3. Multiply the overtime hours by half of that rate, then add it to the employee’s base pay.

Consider an employee working two roles during the same week—15 hours as a cashier earning $16.00 per hour, and 32 hours as a stock associate at $18.00 per hour, totaling 47 hours for the week.

15 hours × $16.00/hour = $240.00
32 hours × $18.00/hour = $576.00
Total weekly earnings = $240.00 + $576.00 = $816.00

To calculate the regular (blended) hourly rate, divide the total compensation by the total hours worked:

$816.00 ÷ 47 hours = $17.36/hour (rounded)

Since the employee worked 7 hours of overtime (47 – 40), they are entitled to a half-time premium on top of their regular earnings for those hours:

Half-time premium = $17.36 ÷ 2 = $8.68/hour
Overtime premium pay = 7 × $8.68 = $60.76

Total Pay for the Week = $816.00 + $60.76 = $876.76

The method ensures the employee is fairly compensated for overtime when working multiple jobs.

Additional Considerations for New Jersey Overtime

Are there Industry-Specific Overtime Rules in New Jersey?

Yes, certain healthcare roles are subject to special mandatory overtime rules. While most workers can be required to work overtime, healthcare workers have additional protections. Employers must follow separate regulations when requiring overtime from healthcare staff.

For most other industries, the standard rule applies: overtime is owed after 40 hours of actual work in a 7-day workweek, regardless of the day the hours are worked.

Do Employees in New Jersey Get Extra Overtime Pay for Working on Sundays or Holidays?

No. In New Jersey, overtime pay is only triggered when an employee works more than 40 hours in a workweek—regardless of whether those hours fall on a holiday, Saturday, or Sunday. Simply working on a weekend or holiday does not entitle an employee to extra pay unless those hours push the total worked time above 40 for the week.

Also, holiday pay or other paid time off (like vacation or sick time) does not count as “hours worked” toward the 40-hour threshold for overtime.

How can Employers Ensure Compliance with New Jersey Overtime Laws?

Compliance with New Jersey’s overtime laws starts with accurate recordkeeping and timely wage payments. Employers are required to track the exact number of hours each employee works daily and weekly—including regular and overtime hours—and retain these records for at least six years. This includes maintaining timecards, pay statements, and documentation of any wage deductions.

For effective compliance, using a digital time-tracking system—like Jibble—can help automate hour logging, generate accurate payroll reports, and reduce the risk of violating New Jersey labor laws. These tools also support audit readiness in case of state investigations or employee complaints.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.

<-Back to US State Labor Laws

100% FREE Time Tracking for Unlimited Users!

Jibble is your all-in-one solution for time tracking, attendance, project tracking and more.

Create an account and take the hassle out of time tracking - it's FREE forever for unlimited users!

Start Now 👋 Book Demo