FLSA Overtime Requirements

General Rule

An employer who requires or permits an employee to work overtime is generally required to pay the employee premium pay for such overtime work. Unless specifically exempted, non-exempt employees must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rate of pay.

There is no limit on the number of hours employees aged 16 and older may work in a workweek, and the FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest—unless such work results in hours over 40 in a workweek.

Defining the Workweek

The FLSA applies on a workweek basis. A workweek is a fixed and regularly recurring period of 168 hours—seven consecutive 24-hour periods—which may begin on any day and at any hour. Averaging hours over two or more weeks is not permitted. Overtime pay earned in a particular workweek must generally be paid on the regular payday for the pay period in which the wages were earned.

Regular Rate of Pay

The regular rate of pay includes all compensation for employment except certain statutory exclusions. It cannot be less than the minimum wage. Exclusions include reimbursements for expenses, true premiums for weekend or holiday work, discretionary bonuses, gifts, and payments for periods when no work is performed (such as vacation or sick leave).

Calculating Overtime

Overtime pay must be calculated using the average hourly rate derived from total compensation (excluding statutory exclusions) divided by total hours worked. This applies regardless of whether pay is based on an hourly, piece-rate, salary, or commission basis. For employees performing different types of work at different rates, the regular rate is the weighted average of those rates.

Section 7(g)(2) of the FLSA permits, under specific conditions, overtime computation based on the hourly rate in effect when overtime is worked. Requirements are outlined in 29 CFR §§ 778.415–778.421. Non-cash compensation, such as goods or facilities, must also be included in the regular rate based on their reasonable cost or fair value to the employer.

Common Problems

Fixed Sum for Varying Overtime: Lump sum payments for overtime—regardless of the number of hours worked—do not qualify as overtime premiums and must be included in the regular rate calculation.

Fixed Salary for More than 40 Hours: A fixed weekly salary covering more than 40 hours does not fulfill FLSA obligations. Overtime must still be paid for hours worked beyond 40 at one-half the regular rate.

Waiver Not Permitted: Employers and employees may not waive the right to overtime pay. Policies stating that unauthorized overtime will not be paid do not relieve employers of their FLSA responsibilities.

Regular Rate Examples

(1) Hourly: An employee making $20/hour works 44 hours. Total pay is $800 for the first 40 hours, plus $120 for 4 overtime hours (at $30/hour), totaling $920.

(2) Piece Rate: An employee earns $450 for 45 hours of piecework. Regular rate is $10.00/hour. Overtime is 5 x $5.00 = $25.00, for a total of $475.00. Alternatively, the employer may pay 1.5x the piece rate during overtime if agreed beforehand and it meets the minimum wage requirement.

(3) Salary: For a salaried employee working variable hours, divide the salary by total hours worked. For example, $1,000/week for 50 hours = $20.00/hour. Overtime for 10 hours is 10 x $10.00 = $100. Total pay is $1,100.

If the employee works 60 hours, the regular rate is $16.67/hour. Overtime for 20 hours = 20 x $8.34 = $166.80. Total pay is $1,166.80.

If the salary is not weekly, it must be converted: half-month salary x 24 ÷ 52; monthly salary x 12 ÷ 52.

The information provided above is for general informational purposes only and does not constitute legal advice. The Fair Labor Standards Act and related employment laws can be complex, and how they apply may vary based on the specific facts of your situation. If you believe your workplace rights have been violated, you should consult with an experienced employment attorney to obtain advice tailored to your individual circumstances.