Definition: Overtime is pay for hours worked beyond a legal threshold. Under the Fair Labor Standards Act (FLSA), covered non-exempt employees must receive at least 1.5 times their regular rate of pay for every hour worked over 40 in a workweek.
EZTime labor rule alerts flag overtime and missed rest periods before payroll.
Overtime is one of the most common sources of payroll errors for businesses with hourly teams. The rule itself sounds simple, but the details matter: which hours count, how the workweek is defined, what goes into the "regular rate," and whether a state adds its own requirements. This guide walks through the federal baseline, a worked example, and practical steps for keeping overtime accurate and under control.
Federal overtime is calculated one workweek at a time. According to the Department of Labor's Fact Sheet #23 on overtime pay, a workweek is "a fixed and regularly recurring period of 168 hours -- seven consecutive 24-hour periods." It does not have to match the calendar week, and it can begin on any day and at any hour. Once an employer sets a workweek, it should stay consistent.
Within that workweek, every hour over 40 must be paid at one and one-half times the employee's regular rate of pay. The regular rate is not always the same as the base hourly wage. It includes most forms of compensation for work, such as certain bonuses, and it excludes specific items listed in the law.
Maria is a non-exempt warehouse associate who earns $18.00 per hour. Her employer's workweek runs Sunday through Saturday. This week she worked 46 hours and received no bonuses or differentials.
| Line item | Calculation | Amount |
|---|---|---|
| Straight-time hours | 40 hours x $18.00 | $720.00 |
| Overtime rate | $18.00 x 1.5 | $27.00/hour |
| Overtime hours | 6 hours x $27.00 | $162.00 |
| Total gross pay | $720.00 + $162.00 | $882.00 |
The same result can be reached another way: pay all 46 hours at straight time ($828.00), then add a half-time premium of $9.00 for each of the 6 overtime hours ($54.00). Both methods give $882.00. You can check scenarios like this with the EZTime overtime calculator.
The Department of Labor's overtime fact sheet sets out several points employers should know:
The Department of Labor also states in its hours worked fact sheet that work not requested but "suffered or permitted" is work time that must be paid. If a supervisor knows an employee is staying late to finish tasks, those minutes count toward overtime. For a deeper walkthrough, see our FLSA overtime rules guide.
Overtime applies to non-exempt employees. Some salaried employees are exempt if they meet salary and duties tests under the FLSA regulations. The Department of Labor is clear that job titles do not determine exempt status, and that manual laborers and other blue-collar workers are not exempt under those regulations no matter how highly paid they are.
States can set stricter overtime rules, and employers must follow whichever rule is more protective. California is a well-known example. According to the California Division of Labor Standards Enforcement's overtime FAQ, employees are owed 1.5 times the regular rate for hours over eight in a workday or over 40 in a workweek, for the first eight hours on the seventh consecutive day of work in a workweek, and double the regular rate for hours over 12 in a workday and for hours past eight on that seventh consecutive day. If you operate in more than one state, confirm each state's rules with its labor agency.
EZTime gives hourly teams accurate time data from the start, with a GPS mobile time clock with geofencing, NFC tags, a tablet kiosk, and biometric clocks. Managers get overtime and break alerts before hours cross the threshold, AI shift scheduling and shift templates to spread hours more evenly, and timecard corrections with a full audit trail. When the period closes, EZTime produces payroll-ready Excel and PDF exports that work with any payroll software (EZTime does not run payroll itself). Plans start at $2 per employee per month with a 14-day trial. Learn more about the EZTime attendance clock or see pricing.
This is general information, not legal advice.
Not under federal law. The FLSA measures overtime by the workweek, so a long day alone does not trigger it. Some states, such as California, do have daily overtime rules, so check your state’s requirements.
No. The Department of Labor states that averaging hours over two or more weeks is not permitted. Each workweek is evaluated on its own, even when the pay period covers two weeks.
The FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest as such. Those hours count toward the 40-hour threshold like any other hours, and an employer may choose to pay a premium by policy.
Yes. The Department of Labor says work that is suffered or permitted is work time that must be paid. An employer can discipline an employee for breaking an overtime approval policy, but it cannot withhold pay for hours actually worked.