FLSA Overtime Rules Explained
how overtime is calculated

The 40-hour workweek, the regular rate, bonuses and multiple pay rates, state daily overtime and worked examples, with a checklist for employers.
Managers reviewing overtime hours before payroll

The short answer

Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must get at least 1.5 times their regular rate for every hour worked over 40 in a fixed workweek. Federal law has no daily overtime, but some states do. The regular rate includes most pay, such as nondiscretionary bonuses and shift differentials. You can’t average hours across weeks, and private employers can’t give comp time instead of overtime pay.

Most overtime errors come from small things: a bonus left out of the rate, hours averaged across a biweekly pay period, or a shift that ran long without anyone noticing. This guide covers the FLSA overtime rules that matter most, shows how overtime is calculated with worked examples, and ends with a checklist.

On this page

The core FLSA overtime rule

Covered employers must pay non-exempt employees at least one and one-half times the regular rate for hours worked over 40 in a workweek. In practice:

  • The trigger is hours actually worked in the workweek, not hours scheduled and not hours in the pay period.
  • Weekends, holidays and nights don’t trigger federal overtime on their own. Premium pay for that work comes from company policy or agreement, unless state law requires it.
  • The multiplier applies to the regular rate, which can be higher than the base wage.

The DOL’s Wage and Hour Division summarizes these rules in Fact Sheet #23: Overtime Pay Requirements of the FLSA.

Workweek overtime: defining the workweek

A workweek is a fixed and regularly recurring period of 168 hours, meaning seven consecutive 24-hour periods. It can start on any day and at any hour, such as Wednesday at 12:00 a.m. Once you set it, keep it fixed. You can change it only if the change is meant to be permanent and isn’t made to avoid paying overtime.

Each workweek stands alone. Averaging hours across two or more weeks isn’t allowed. If someone works 50 hours in week one and 30 in week two, you owe 10 overtime hours for week one, even though the pay period totals 80.

How is overtime calculated? Start with the regular rate

The regular rate is generally total pay for the workweek, minus the payments the law excludes, divided by total hours worked that week. To run the numbers for a specific week, try our free overtime calculator.

Usually included

  • Hourly wages, salary, piece-rate earnings and commissions
  • Nondiscretionary bonuses, such as announced attendance, production or safety bonuses
  • Shift differentials, such as extra hourly pay for night shifts

Generally excluded

  • Truly discretionary bonuses, where both the payment and the amount are at the employer’s sole discretion and nothing was promised in advance
  • Special-occasion gifts that aren’t tied to hours or production
  • Pay for time not worked, such as vacation, holidays, sick leave and PTO
  • Business expense reimbursements
  • Certain true premium payments and qualifying benefit-plan contributions

Each exclusion has conditions, and calling a bonus “discretionary” doesn’t make it so. See the DOL’s Fact Sheet #56A on the regular rate and 29 CFR Part 778.

Worked overtime examples

Example 1: Straight hourly pay

$20 per hour, 46 hours worked:

  • Straight time: 40 x $20 = $800
  • Overtime: 6 x $30 = $180
  • Total: $980

Example 2: Hourly plus a nondiscretionary bonus

$18 per hour, 46 hours, plus a $92 weekly production bonus:

  • Straight time for all hours: 46 x $18 = $828
  • Plus the bonus: $828 + $92 = $920
  • Regular rate: $920 / 46 = $20.00
  • Overtime premium (the extra half): 6 x $10.00 = $60
  • Total: $980

If you left the bonus out of the rate, the premium would be only $54. A bonus that covers several weeks, such as a quarterly bonus, generally has to be allocated back over the weeks in which it was earned.

Example 3: Two rates in one week (weighted average)

Under 29 CFR 778.115, an employee who works at two or more rates in one workweek usually gets a weighted-average regular rate. Say 30 hours as a cashier at $16 and 15 hours as a shift lead at $22:

  • Straight time: $480 + $330 = $810 for 45 hours
  • Regular rate: $810 / 45 = $18.00
  • Overtime premium: 5 x $9.00 = $45
  • Total: $855

The regulations also allow overtime to be paid at 1.5 times the rate for the work done during the overtime hours, if the employer and employee agree in advance. That option has conditions, so confirm them before relying on it.

No federal daily overtime, but some states have it

The FLSA looks only at weekly hours. When state law is more generous to the employee, you generally have to follow the state rule. Some examples:

  • California: 1.5x for hours over 8 in a workday, over 40 in a workweek, and for the first 8 hours on the seventh consecutive day worked in a workweek. Double time applies to hours over 12 in a workday and over 8 on that seventh day (see the California Labor Commissioner’s overtime FAQ). Exemptions and alternative workweek schedules can change this.
  • Alaska: Overtime after 8 hours a day and 40 a week, generally for employers with four or more employees. Approved voluntary flexible schedules can move the daily trigger to 10 hours.
  • Nevada: Daily overtime after 8 hours in a 24-hour period applies to employees earning less than 1.5 times the state minimum wage. Exceptions exist, such as qualifying written 4×10 schedule agreements.
  • Colorado: Overtime for hours over 40 in a workweek, over 12 in a workday, or over 12 consecutive hours, whichever pays the employee more.

Other states and cities have their own overtime and scheduling rules, and these change. Check your state labor department. For California break rules, see our guide to California meal and rest break rules.

Exempt vs. non-exempt basics

The most common overtime exemptions are the “white-collar” exemptions for executive, administrative and professional employees (29 CFR Part 541). These generally require:

  1. Salary basis: a fixed, predetermined salary that isn’t reduced based on the quality or quantity of work.
  2. Salary level: pay at or above the federal minimum salary.
  3. Duties: primary duties that fit the exemption. Job titles don’t count.

The salary level needs a careful read. A 2024 DOL rule would have raised the threshold, but a federal court in Texas vacated it in November 2024. In May 2026 the DOL published a technical amendment that formally rescinded the 2024 rule and restored the earlier regulations. As of this writing, the federal minimum is $684 per week ($35,568 per year), and the highly compensated employee threshold is $107,432 in total annual compensation. Several states, including California, Colorado, New York and Washington, set higher thresholds. Confirm the current federal and state figures before you classify anyone. If you’re unsure about a role, treat the employee as non-exempt or get legal advice.

No comp time instead of overtime (private employers)

Under the FLSA, compensatory time off in place of overtime pay is generally available only to public-sector employers, under specific rules. Private employers must pay overtime in wages. Bills to allow private-sector comp time have been introduced in Congress, but as of this writing none has become law.

Off-the-clock work counts

Work you “suffer or permit” is generally hours worked, whether or not you asked for it. That includes answering messages before a shift, finishing tasks after clocking out, or working through an unpaid meal break. If you knew or should have known about the work, you generally have to pay for it, including any overtime it creates. You can enforce an overtime-approval policy through discipline, but not by refusing to pay for hours already worked. Rounding practices that consistently favor the employer cause similar problems. See our guide to time clock rounding rules.

Recordkeeping

Under 29 CFR Part 516, employers must keep records for non-exempt employees that include hours worked each workday and workweek, the regular rate, straight-time and overtime earnings, and when the workweek begins. Payroll records generally have to be kept for at least three years, and time cards and wage-calculation records for at least two. Some states require longer.

An accurate employee time clock helps. EZTime records punches through a GPS mobile time clock app or NFC tap-to-clock-in and produces payroll-ready exports for you to review. Your payroll process still has to apply the correct rates and rules.

Controlling overtime with scheduling and alerts

  • Schedule against the workweek. Check each employee’s projected weekly hours before you publish the schedule. Employee scheduling software with AI shift scheduling can help balance coverage and hours.
  • Watch shift swaps. One swap can push someone past 40 hours or past a state daily limit.
  • Use overtime and break alerts so managers see who’s approaching a threshold during the week.
  • Review exceptions before payroll, such as missed punches and unapproved overtime. See our guide to overtime exception review.
  • Plan for peaks. Read how to prevent overtime surprises with scheduling.

FLSA overtime compliance checklist

  1. Set a written, fixed workweek, including the day and hour it starts.
  2. Confirm each role’s exempt status under the duties, salary basis and salary level tests, both federal and state.
  3. Identify any state daily overtime, double time or seventh-day rules that apply.
  4. Decide whether each pay type, such as bonuses, differentials and commissions, goes into the regular rate.
  5. Calculate overtime per workweek. Never average across weeks.
  6. Use weighted-average rates for employees with multiple rates, unless a valid alternative agreement applies.
  7. Pay overtime in wages, with no comp time for private-sector employees.
  8. Prohibit off-the-clock work in writing, train managers, and pay for all hours worked.
  9. Review rounding, meal-break and missed-punch practices.
  10. Keep time and payroll records for at least the required retention periods.
  11. Review the rules, especially salary thresholds, at least once a year.

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Frequently asked questions

No. The FLSA requires overtime only after 40 hours in a workweek. Some states, including California, Alaska, Nevada (for certain lower-wage employees) and Colorado (after 12 hours), have daily rules.

Not if the employee also earns pay that belongs in the regular rate, such as nondiscretionary bonuses or shift differentials. You have to include those, and they usually raise the overtime rate.

No. Each workweek stands alone, so a 50-hour week followed by a 30-hour week means 10 overtime hours.

Generally yes, if the employee worked the hours and you knew or should have known. You can discipline employees for breaking the policy, but you still have to pay for the time.

As of this writing, it’s $684 per week ($35,568 per year), the level restored after the 2024 rule was vacated and then formally rescinded in 2026. Many states set higher thresholds.

Yes. Paying a salary doesn’t make someone exempt on its own. If the employee fails the duties test or earns below the threshold, they’re owed overtime.

State guides: see our Texas labor laws for employers and California meal and rest break rules.

Related US labor guides

Time clock rounding rules

How time clock rounding works under the FLSA and when it becomes risky.

California meal and rest break rules

Meal and rest break timing, waivers and premium pay in California.

Predictive scheduling (Fair Workweek) laws

Fair Workweek rules compared by state and city.

PTO accrual and PTO policy guide

Accrual methods, caps, carryover and payout rules for PTO policies.

Free weekly timesheet template (Excel)

Download the free Excel template and learn how to fill it out.

This article is general information about U.S. overtime rules and isn’t legal advice. Laws, thresholds and interpretations change, and state and local rules vary. For your specific situation, consult a qualified employment attorney or your state labor department. EZTime provides time tracking and scheduling tools. It doesn’t guarantee legal compliance or calculate pay.

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