Who Gets Overtime?
The FLSA guarantees overtime to non-exempt workers who log more than 40 hours in a workweek. But not everyone qualifies.
Exempt staff, those who meet specific salary and duties tests, are not entitled to overtime. The salary floor was $43,888 per year ($844 per week) as of July 2024. If you earn below that and perform non-exempt duties, you must receive overtime. If you earn above it, you may still be non-exempt if your primary duties don’t meet the executive, administrative, professional, computer-related, or outside sales tests. Check with the U.S. Department of Labor for the current figure; the 2024 rule faced court challenges and the threshold may have shifted.
Part-time workers are entitled to overtime if they exceed the applicable cutoff. There’s no “part-time exemption.” If a part-time employee works 45 hours in a week, those 5 hours over 40 are overtime.
Independent contractors are not entitled to overtime under the FLSA. Misclassification is a serious legal issue, if you’re treated like an employee but classified as a contractor, you may have a claim.
Salaried personnel can be eligible for overtime if they earn below the cutoff or don’t meet the duties test. Non-exempt salaried workers must receive overtime just like hourly workers.
How Is Overtime Calculated?
The formula is simple: overtime hours × (base rate × 1.5). The base rate is your hourly wage, but it includes more than just your base pay. Bonuses, commissions, and shift differentials must be included. Excluded: discretionary bonuses, gifts, paid time off, expense reimbursements, and benefit plan contributions.
Here’s how time-and-a-half works at different rates and hours:
| Hourly Rate | 40 Hours (Straight Pay) | 45 Hours (5 OT Hours) | 50 Hours (10 OT Hours) | 60 Hours (20 OT Hours) |
|---|---|---|---|---|
| $15/hour | $600.00 | $712.50 ($112.50 OT) | $825.00 ($225.00 OT) | $1,050.00 ($450.00 OT) |
| $20/hour | $800.00 | $950.00 ($150.00 OT) | $1,100.00 ($300.00 OT) | $1,400.00 ($600.00 OT) |
| $25/hour | $1,000.00 | $1,187.50 ($187.50 OT) | $1,375.00 ($375.00 OT) | $1,750.00 ($750.00 OT) |
| $35/hour | $1,400.00 | $1,662.50 ($262.50 OT) | $1,925.00 ($525.00 OT) | $2,450.00 ($1,050.00 OT) |
At $20/hour working 50 hours: 40 straight-time hours at $800.00 plus 10 overtime hours at $30.00 each equals $1,100.00 total. The figures above are arithmetic examples. The overtime cutoffs and exemptions that determine when these rates apply are set by law. Confirm the current salary level and duties tests with the U.S. Department of Labor’s Wage and Hour Division.
Double-time (2x base rate) is not required by federal law. Some states mandate it, California, for example, requires double-time for hours over 12 in a day or for the first 8 hours on the seventh consecutive day.
Overtime and Taxes
Overtime is not taxed at a higher rate. Your actual tax liability is based on total annual income. The IRS withholding tables may withhold more from a big overtime paycheck because they assume that paycheck represents your whole year’s income. But when you file, your actual rate is the same across all your income.
If you want to avoid a surprise tax bill, adjust your W-4 withholding. You can’t change your marginal rate, but you can control what’s withheld.
Overtime and Time Off
Comp time is generally illegal for private businesses. Under federal law, private-sector operations must pay cash for overtime, they can’t substitute paid time off. The only exception: public sector workers (government staff) may receive compensatory time off at 1.5x the overtime rate under certain conditions.
Holiday pay, vacation pay, and sick pay do not count toward the 40-hour cutoff. Only hours actually worked count. If you work 40 hours and take 8 hours of holiday pay, you’ve worked 40 hours, no overtime.
Employer Obligations
Mandatory overtime is generally legal under federal law. Your company can require you to work overtime, and they can discipline you for refusing. Some states have restrictions, for example, California requires one day of rest per week, and some states protect workers from retaliation for refusing unsafe overtime.
Businesses must include all hours worked when calculating overtime. Off-the-clock work, post-shift tasks, and certain waiting time count. The Portal-to-Portal Act excludes ordinary commuting and certain preliminary/postliminary activities, but the rules are specific.
Common mistakes operations make: - Using the wrong base rate (forgetting to include bonuses or commissions) - Averaging hours over two weeks (biweekly averaging is illegal, the workweek stands alone) - Classifying people as exempt when they don’t meet the duties test - Not counting all hours worked, including off-the-clock tasks
State-Specific Questions
Federal law sets a floor, not a ceiling. States can mandate more generous overtime rules. California and Alaska require daily overtime, over 8 hours in a day is overtime, and over 12 hours is double-time. Nevada requires daily overtime over 8 hours for certain wage levels; a 2024 ballot measure changed some rules, so confirm current status with the Nevada Labor Commissioner. Colorado has its own daily and weekly rules.
Some states have agricultural worker provisions that differ from federal law. Montana and Minnesota, for example, have special rules for farmworkers. California phased in agricultural overtime under AB 1066, as of 2022, the cutoff is 40 hours per week for operations with 26 or more workers.
Which state’s law applies if you work remotely? Generally, the law of the state where you physically perform the work applies. If you’re in State A working remotely for a business in State B, State A’s overtime laws typically govern. For multi-state workers, the most protective standard may apply, or the state where the majority of work is performed.
Special Situations
Tipped workers: Operations may take a tip credit, but they must pay at least the full minimum wage and calculate overtime on the full minimum wage, not the cash wage. The base rate for tipped staff is the full minimum wage before tip credit.
Piece-rate workers: Overtime is calculated on the piece-rate earnings divided by hours worked. You must receive at least 1.5x the minimum wage for overtime hours. The piece-rate overtime calculation method covers the details.
Salaried staff: If you’re non-exempt and salaried, your overtime rate is your weekly salary divided by 40, then multiplied by 1.5. For example, an $800/week salary equals a $20/hour base rate; overtime hours are paid at $30/hour. Some operations use the “fluctuating workweek” method, which pays 0.5x for overtime because the salary covers straight time for all hours, but this method is subject to regulatory changes. Confirm its current legal status with the Wage and Hour Division. The overtime pay for salaried employees breakdown explains further.
Remote workers: State law where you work generally applies, even if the business is in another state. Some states have specific rules for multi-state operations. The overtime rules for remote workers explain this.
On-call time: Time you must be available may or may not be compensable, depending on restrictions. If you can’t use the time for your own purposes and you’re required to stay near the workplace, it’s likely compensable.
De minimis time: Courts may disregard insignificant amounts of time (a few minutes) for overtime purposes. But there’s no hard cutoff, it depends on the circumstances.
Common Misconceptions
“My company can just give me comp time instead of overtime pay.” False for private businesses. Cash is required. Public employers may offer comp time at 1.5x.
“If I work through lunch, those hours count as overtime.” If you work during an unpaid break, those hours count toward the 40-hour cutoff. But a true unpaid break where you’re relieved of duties doesn’t count.
“Holiday pay counts toward overtime.” False. Only hours worked count. Holiday pay is excluded.
“Double-time is required by federal law.” No federal double-time requirement exists. State law may require it.
“Independent contractors get overtime.” No. FLSA protections apply only to employees.
“Part-time workers don’t get overtime.” False. Any non-exempt worker who exceeds the cutoff gets overtime.
“Overtime is calculated on take-home pay.” No. It’s calculated on gross pay, the base rate before taxes and deductions.
“Salaried employees never get overtime.” False. Non-exempt salaried staff must receive overtime.
Using an Overtime Calculator
The overtime pay formula tool supports federal, California, Alaska, and Nevada rules. It applies the larger number when daily and weekly cutoffs overlap. It also shows total straight and overtime hours, average hourly rate, and a daily breakdown.
Common mistakes people make: - Forgetting to include all hours worked - Mixing daily and weekly cutoffs - Applying double-time too early - Using the wrong base rate (not including shift differentials or bonuses)
Recalculate if you receive a bonus or commission that affects your base rate. Always verify results with your employer or accountant.