Overtime Pay Rules: Are You Getting What You're Owed?

Overtime sounds simple — work more than 40 hours, get paid 1.5x. But exemptions, salary thresholds, and state laws create a lot of room for confusion (and underpayment). Here's what the rules actually say.

The FLSA Baseline

The Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees 1.5x their regular rate for all hours worked beyond 40 in a workweek. That's time-and-a-half — not double time, unless your employer or state law provides for it. The FLSA sets a floor; states can be more generous but not less.

The workweek is a fixed, recurring 168-hour period (seven consecutive 24-hour days). Your employer defines when the workweek starts. Hours don't carry over between weeks — 50 hours one week and 30 the next doesn't average to 40; you're owed overtime for week one regardless.

Who Is Exempt?

This is where most confusion lives. "Exempt" employees don't qualify for overtime exemptions under the FLSA. To be exempt, an employee must generally meet both a salary test and a duties test.

• Salary threshold

  As of 2024, employees must earn at least $684/week ($35,568/year) to be classified as exempt under most white-collar exemptions. Below that threshold, they are non-exempt regardless of job title.

• Duties test

  The employee must primarily perform executive, administrative, or professional duties. A "manager" title doesn't automatically make someone exempt — the actual job functions have to meet the definition.

Hourly workers are almost always non-exempt and entitled to overtime. When you're evaluating a role, this is one reason the salary vs. hourly distinction matters beyond just how your paycheck is structured.

How to Calculate Overtime Pay

For hourly workers, it's straightforward: multiply your hourly rate by 1.5, then multiply by overtime hours.

• Regular rate: $20/hour
• Overtime rate: $20 × 1.5 = $30/hour
• Hours in week: 47 (40 regular + 7 overtime)
• Weekly pay: (40 × $20) + (7 × $30) = $800 + $210 = $1,010

For salaried non-exempt workers, calculate the regular rate by dividing weekly salary by hours worked in the week, then apply the 1.5x multiplier to excess hours. This matters in roles where hours fluctuate.

Factoring Overtime Into a Job Offer

If a role regularly expects overtime — especially in fields like nursing, manufacturing, finance, or emergency services — the true annual compensation can be significantly higher than the base rate implies. Ask directly: "What are the typical weekly hours? Is overtime common, and how is it compensated?"

When negotiating your salary, factoring in expected overtime hours can reframe the conversation. If the role typically runs 50 hours/week and you're non-exempt, that's 10 hours of overtime pay per week — a meaningful addition to base.

Conversely, if you're being offered an exempt salary for a role that historically works 55+ hour weeks, your real hourly rate may be lower than a non-exempt role paying less on paper. Do the math before accepting.

What to Ask Your Employer

• Am I classified as exempt or non-exempt under the FLSA?
• What is the standard workweek, and when does overtime typically occur?
• Does the company offer comp time instead of overtime pay? (Private employers generally cannot substitute comp time for overtime pay for non-exempt workers.)
• What state overtime laws apply to my role?

If something feels off about how overtime is being tracked or paid, the Department of Labor's Wage and Hour Division handles FLSA complaints. Misclassification — labeling non-exempt workers as exempt to avoid overtime — is one of the most common wage violations.