Review information on which employees qualify for overtime pay, how much they can earn, and when overtime is paid.
What Is Overtime Pay?
When an employee works additional hours, they may be entitled to extra pay beyond their regular pay rate for those hours. Employees covered by federal law are entitled to a rate not less than one and a half times their regular rates of pay for hours worked over 40 in a week. There are occupations that are exempt from overtime pay requirements, including certain executive, administrative, professional, computer, outside sales employees, and some seasonal workers, drivers, and farmworkers, for example. Some states have additional overtime pay requirements. For example, Alaska, California, Nevada, Puerto Rico, and the Virgin Islands have daily overtime laws for employees who work over eight hours a day.
How Much You Will Get Paid for Overtime
Non-exempt hourly employees covered by the Fair Labor Standards Act (FLSA) must be paid overtime for hours worked over 40 hours per week.
Time and a Half
When an employee is entitled to overtime pay, the rate cannot be less than one and a half times (time and a half) an employee’s regular rate of pay. For example, if your hourly rate of pay is $10/hour, the overtime rate is $15/hour.
Double Time
In some cases, overtime may be paid as double time (when working on a holiday, for example). However, in most cases, double time is an agreement between an employer and employee or is provided for by state law. There are no federal laws requiring that double time be paid.
Federal Overtime Rules
From January 1, 2020, the rules governing overtime pay are:
The “standard salary level” to exempt executive, administrative, and professional employees from the FLSA minimum wage and overtime pay requirements is $684 per week (equivalent to $35,568 per year for a full-time worker).The annual compensation requirement for exemption from overtime for “highly compensated employees” is $107,432 per year.Employers can use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level, in recognition of evolving pay practices.The employee’s job responsibilities must involve executive, administrative, computer, outside sales, or professional duties or be an occupation that is otherwise exempt from overtime rules.
State Overtime Pay Laws
State laws may provide for additional overtime or double-time pay. For example, California requires time-and-a-half or double-time pay based on hours worked, with some exceptions. For example, if you are paid double time and your regular hourly rate is $12.55/hour, the double-time rate would be $25.10/hour. In addition, some states may have a higher overtime earnings threshold than the federal level. Check your state department of labor website for information on overtime rules in your location.
How to Calculate Overtime Pay
Here’s information on how overtime pay is calculated. When you want to see how much overtime pay you will earn, you can use this Overtime Calculator from the U.S. Department of Labor to help you determine if you’re eligible for overtime pay and to calculate how much overtime you will receive for a typical pay period.
When You Work Nights, Weekends, or Holidays
The FLSA does not require overtime pay for nights, weekends, or holidays unless the hours push the worker over the 40-hour threshold. Many employers have policies in place to add a differential to the wages of workers who work evenings, weekends, or holidays, but this is voluntary.
Pay for Mandatory Overtime
The Fair Labor Standards Act requires employers to pay time and a half to any non-exempt employees who work more than 40 hours in a week. Employers are not required to pay overtime to exempt employees.
Limits on Overtime Work
There are some states that limit how many hours some employees can work. Consult your state department of labor to investigate any laws that might impact your occupation. Federal regulations restrict the number of hours that can be worked in safety-sensitive occupations like pilots, nuclear power plant staff, certain railroad and marine personnel, and truckers, for example. Some unions or individuals will negotiate collective bargaining agreements or employment contracts that prohibit employers from requiring overtime. Certain employers have enacted policies that place restrictions on the amount of overtime that is permissible. In those cases, workers can take up the issue with supervisors and/or human resources representatives and request clarification of the policy.
Employees Who Don’t Receive Overtime Pay
Exempt employees are not entitled to overtime pay. A complex criterion exists in order to determine whether an employee should be classified as exempt. Most organizations err on the side of classifying jobs as non-exempt if there is significant uncertainty about their status, to avoid lawsuits claiming back overtime pay after the fact.
Workers Exempt from Overtime Pay Requirements
There are a variety of occupations where workers are exempt from overtime pay requirements, including the following.
Aircraft salespeople Airline employees Amusement/recreational employees in national parks/forests/Wildlife Refuge System Babysitters on a casual basis Boat salespeople Buyers of agricultural products Commission sales employeesCompanions for the elderly Computer professionalCountry elevator workers (rural) Domestic employees who live inDrivers, driver’s helpers, loaders, and mechanicsExecutive, administrative, professional, and outside sales employeesFarmworkers Farm implement salespeopleFederal criminal investigatorsFirefighters working in small (fewer than five firefighters) public fire departments FishingForestry employees of small (fewer than nine employees) firmsFruit & vegetable transportation employees Homeworkers making wreathsHouseparents in non-profit educational institutionsLivestock auction workers Local delivery drivers and driver’s helpers Lumber operations employees of small (fewer than nine employees) firmsMotion picture theater employees Newspaper delivery Newspaper employees of limited-circulation newspapers Police officers working in small (fewer than five officers) public police departments Radio station employees in small marketsRailroad employees Salesmen, partsmen, and mechanics employed by automobile dealershipsSeamen on American vesselsSeamen on non-American vesselsSeasonal and recreational workersSugar processing employeesSwitchboard operators Taxicab drivers Television station employees in small markets Truck and trailer salespeople
