Calculating overtime pay in Tennessee is crucial for ensuring fair compensation and compliance with labor laws. Accurate overtime calculations protect employees’ rights to fair wages for extra work hours while helping employers avoid potential legal issues and penalties. Understanding the overtime pay regulations is essential for employers and employees to maintain a transparent and equitable work environment.

This article provides a comprehensive guide on calculating overtime pay, covering eligibility, exemption, and specific calculations required for different types of employees.

**This Article Covers**

**Understanding Overtime in Tennessee**

- Which Overtime Laws Apply in Tennessee?
- How Much is Overtime Pay in Tennessee?
- Who is Eligible for Overtime Pay in Tennessee?
- Who is Exempt from Overtime Pay in Tennessee?
- What is the Regular Rate of Pay in Tennessee?

**Overtime for Hourly and Salaried Employees in Tennessee**

- How do you Calculate Overtime for Hourly Employees in Tennessee?
- How is Overtime Calculated for Salaried Employees in Tennessee?

**Overtime for Complex Pay Structures in Tennessee**

- How do you Calculate Overtime for Tipped Employees in Tennessee?
- How do you Calculate Overtime for Commission Employees in Tennessee?
- How do you Calculate Overtime for Piece Rates in Tennessee?

**Additional Considerations for Tennessee Overtime**

- What is the Statute of Limitations for Claiming Unpaid Overtime in Tennessee?
- What are the Recordkeeping Requirements for Overtime Wage Compliance in Tennessee?

**Understanding Overtime in Tennessee**

**Which Overtime Laws Apply in Tennessee?**

In Tennessee, overtime laws are primarily governed by the Fair Labor Standards Act (FLSA). The FLSA requires employers to pay overtime at a rate of 1.5 times an employee’s regular rate of pay for any hours worked over 40 in a workweek, applicable to all non-exempt employees. This means non-exempt employees are entitled to overtime pay for hours worked beyond this threshold.

The FLSA also outlines specific exemptions from overtime pay based on job duties and salary levels. These exemptions include executive, administrative, professional employees, and certain highly compensated employees. However, for those who are non-exempt, overtime pay is mandated.

It is important to note that hours worked on weekends or holidays are not automatically considered overtime; instead, overtime pay is only required if these hours exceed the 40-hour threshold within the workweek.

**How Much is Overtime Pay in Tennessee?**

Overtime pay in Tennessee is calculated according to the FLSA regulations. Employees are entitled to receive overtime pay at a rate of one and a half times the employee’s regular rate of pay for any hours worked beyond 40 in a workweek.

If an employee’s regular pay rate is $20 per hour, their overtime rate would be $30 per hour. For any hours worked beyond 40 in a workweek, the employee should receive $30 per hour for those additional hours.

To learn more, check out our guide on Tennessee Overtime Laws.

**Who is Eligible for Overtime Pay in Tennessee?**

Eligibility for overtime pay in Tennessee primarily follows the guidelines set forth by the FLSA. Employees who are eligible for overtime pay include those who are paid on an hourly basis and who are salaried but do not fall into specific exempt categories. These employees should receive 1.5 times their regular hourly rate for any hours worked beyond 40 in a workweek.

Check out our guide on Overtime Rights in Tennessee.

**Who is Exempt from Overtime Pay in Tennessee?**

Certain employees in Tennessee are exempt from overtime pay based on their job duties and salary levels. As of the latest regulations, employees earning at least $844 per week (or $43,888 annually) are generally considered exempt from overtime pay, provided they meet additional criteria. The primary categories of exempt employees include:

**Executive Exemption:**Executive employees are exempt from overtime. To qualify, an employee must primarily manage the enterprise or a department, supervise at least two full-time employees, and have the authority to hire or fire other employees or recommend such actions.**Administrative Exemption:**Employees who perform administrative duties directly related to management or general business operations are exempt. They must exercise discretion and independent judgment in significant matters, and their primary duties should involve performing office or non-manual work.**Professional Exemption:**Employees in professional roles who require advanced knowledge in a field of science or learning, usually obtained through specialized education, are exempt. This category includes both learned professionals and creative professionals.**Highly Compensated Employees:**Employees who earn a total annual compensation of $107,432 or more are considered highly compensated and are exempt from overtime pay if they perform at least one of the duties of an executive, administrative, or professional employee.**Outside Sales Exemption:**Employees primarily engaged in making sales or obtaining orders or contracts for services away from the employer’s place of business are exempt from overtime. They must be paid on a commission basis.

**What is the Regular Rate of Pay in Tennessee?**

In Tennessee, the regular rate of pay is the hourly rate used to calculate overtime compensation under the FLSA. Determining regular hourly rate depends on the type of employee:

- For
**hourly employees**, their regular hourly rate of pay is simply their hourly wage. An employee who earns $7.25 per hour has a regular hourly rate of $7.25. - For
**salaried employees**, the regular hourly rate is calculated by dividing the employee’s weekly salary by the number of hours worked in a workweek. If an employee earns $800 per and is expected to work 40 hours, their regular hourly rate would be $20 ($800 divided by 40). - For
**commission-based**and**piece rate workers**, the regular rate is calculated by dividing the total compensation (including commissions or piece rates) by the total number of hours worked. If an employee worked 40 hours a week, earned a $600 weekly salary and received $250 in commission, their regular hourly rate would be $21.25 ($600 + $250 / 40).

**Overtime for Hourly and Salaried Employees in Tennessee**

**How do you Calculate Overtime for Hourly Employees in Tennessee?**

For hourly employees in Tennessee, overtime is calculated at 1.5 times the employee’s regular hourly rate for any hours worked beyond 40 in a workweek. To calculate the overtime pay:

**Determine the regular hourly rate:**This is the employee’s usual hourly wage.**Calculate the overtime rate:**Multiply the regular hourly rate by 1.5.**Calculate overtime pay:**Multiply the overtime rate by the number of overtime hours worked.

If an hourly employee earns $15 per hour and works 50 hours in a week, the employee’s regular pay is $15. The overtime rate is $22.50 per overtime hour. For the ten overtime hours, the overtime pay would be $225 ($22.50 x 10).

Read our guide on Your Rights as an Hourly Employee in Tennessee to learn more.

**How is Overtime Calculated for Salaried Employees in Tennessee?**

Overtime pay is calculated differently for salaried employees. The process involves determining the employee’s regular hourly rate based on their weekly salary and then calculating the overtime rate. To calculate the overtime pay:

**Determine the weekly salary:**This is the total salary the employee earns per week. Non-exempt employees earn less than $844 weekly.**Calculate the regular hourly rate:**Divide the weekly salary by 40 (the standard number of hours in a workweek).**Calculate the overtime rate:**Multiply the regular hourly rate by 1.5.**Calculate overtime pay:**Multiply the overtime rate by the number of overtime hours worked.

If a salaried employee earns $800 per week and works 50 hours in a week, the regular hourly rate is $20 ($800 / 40), making the overtime rate $30 per hour ($20 x 1.5). For the ten overtime hours, the pay would be $300 ($30 x 10).

Check out our guide on Your Rights as a Salaried Employee in Tennessee.

**How do you Calculate Overtime for Tipped Employees in Tennessee?**

Tipped employees in Tennessee, such as waitstaff or bartenders, may be paid a lower direct hourly wage, known as the tip credit, as long as their total earnings (including tips) meet or exceed the minimum wage. Overtime for tipped employees is calculated as follows:

**Determine the minimum cash wage:**Minimum cash wage is the wage paid directly to the employee, which can be lower than the minimum wage if tips make up the difference.**Calculate the tip credit:**Subtract the minimum cash wage from the hourly minimum wage to determine the tip credit amount.**Determine the regular hourly rate of pay:**Add the minimum cash wage and tip credit.**Calculate the overtime rate:**Multiply the regular rate of pay by 1.5.**Calculate the overtime pay:**Multiply the overtime rate by the overtime hours worked.

If a tipped employee earns $4 per hour in cash wages (with a tip credit to meet minimum wage), their regular rate of pay (assuming the minimum wage is $7.25) is $7.25. The overtime rate is $10.88 ($7.25 x 1.5). If the tipped employee worked 50 hours in a week, the pay for 10 overtime hours would be $108.80 ($10.88 x 10).

**Overtime for Complex Pay Structures in Tennessee**

### How do you Calculate Overtime for Commission Employees in Tennessee?

For employees who earn commissions, the regular rate of pay is calculated based on their total compensation and the number of hours worked. Here’s how to calculate overtime for commission employees:

**Determine total weekly compensation:**Combine the base salary and commission earned in the week.**Calculate the regular hourly rate:**Divide the total weekly compensation by the number of hours worked in the week.**Calculate the overtime rate:**Multiply the regular hourly rate by 1.5.**Calculate the overtime pay:**Multiply the overtime rate by the number of overtime hours worked.

If a commission employee earns $600 in commissions for a 50-hour workweek, the regular hourly rate would be $12 ($600 / 50). The overtime rate of $12 per hour is $18 ($12 x 1.5). If the employee worked 50 hours, the employee worked ten overtime hours. For 10 overtime hours, the pay would be $180 ($18 x 10).

### How do you Calculate Overtime for Piece Rates in Tennessee?

Piece rate employees are paid based on the number of units they produce or complete. To calculate overtime:

**Determine the piece rate:**Identify how much the employee is paid per unit of work completed, such as per item produced or task completed.**Calculate the total earnings:**Multiply the number of units completed by the piece rate to find the employee’s weekly earnings.**Calculate the regular hourly rate:**Divide the total earnings by the total number of hours worked in the workweek.**Determine the overtime rate:**Multiply the regular hourly rate by 1.5.**Determine the number of overtime hours worked in the week**: All hours worked beyond 40 in a workweek are considered overtime.**Calculate overtime pay:**Multiply the overtime hours by the overtime rate.

For example, if a piece rate employee earns $700 for a 45-hour workweek, the regular hourly rate is $15.56 ($700 / 45). The overtime rate is $15.56 x 1.5 = $23.33. For five overtime hours, the pay would be $116.67 ($23.33 x 5).

**Additional Considerations for Tennessee Overtime**

**What is the Statute of Limitations for Claiming Unpaid Overtime in Tennessee?**

In Tennessee, the statute of limitations for claiming unpaid overtime is governed by the FLSA for federal claims. Under the FLSA, employees have two years from when the overtime pay was due. If the employer’s violation is found to be willful, the statute of limitations is extended to three years.

### What are the Recordkeeping Requirements for Overtime Wage Compliance in Tennessee?

Tennessee employers must keep specific records to ensure compliance with overtime wage regulations, which include:

- Number of hours worked each day and each workweek for each employee. This includes recording start and end times for each shift.
- Wages paid to employees, including the total amount of wages and the rate of pay for both regular and overtime hours.
- Employee information, such as names, addresses, and job titles.
- Detailed payroll that includes deductions or additions to pay.

Employers can use various methods for recording hours worked, including manual timesheets, electronic time clocks, or automated time and attendance software. Maintaining these records helps ensure compliance with state and federal wage and hour laws. They must be kept for at least three years, as they are crucial in audits or wage disputes.

**Learn more about Tennessee Labor Laws through our detailed guide.**

**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.