Overtime is the number of hours an employee works above their standard work schedule. This is typically over 40 hours per week or 8 hours per day, depending on the state, industry, or employer. 

For example, if an employee works 50 hours in a single workweek, they have worked 10 hours of overtime that week.

It is not considered overtime if an employee is required to work evenings, weekends, or public holidays, as long as they do not exceed the hours set out in the Fair Labor Standards Act (FLSA).

Overtime Pay

Qualifying employees are compensated for overtime at a higher pay rate, often at least one and a half times their regular hourly wage, known as “time and a half.” 

For example, if the employee’s regular hourly rate is $30, the overtime rate would be $45 per hour. This means that if an employee works 55 hours in a single workweek, they are compensated at $30 per hour for the first 40 hours and at $45 per hour for the next 15 hours. 

To work out the hourly rate for salaried employees, divide their weekly earnings by the number of hours they are expected to work per week. Alternatively, divide their annual salary by the hours worked per year.

Do All States Follow The Same Overtime Rules?

The US Department of Labor (DOL) outlines the federal overtime pay and eligibility requirements employers must follow in the FLSA. However, some states have made their own laws to increase protections, including:

  • California: Employers must pay double (2x) the employee’s regular rate if they work more than 12 hours in a day or more than 8 hours on their seventh consecutive day of work.
  • Alaska: Employers must pay their employees time and a half (1.5x) the regular pay rate if they work more than 8 hours in a day.
  • Colorado: Employers must pay their employees time and a half (1.5x) the regular pay rate if they work more than 12 hours in a day or 12 consecutive hours.
  • Florida: Overtime pay is required for manual laborers who work more than 10 hours a day.
  • Nevada: Employers must pay their employees time and a half (1.5x) the regular pay rate if they work more than 8 hours in a day and earn less than 1.5 times the minimum wage
  • Oregon: Employers must pay employees in mill, factory, or manufacturing jobs time and a half (1.5x) the regular pay rate if they work more than 10 hours a day. For employees in timber jobs, employers must pay them time and a half after 8 hours a day.

Are All Employees Entitled To Overtime Pay?

Eligibility for overtime pay depends on the FLSA’s classification of an employee. 

Non-exempt employees are eligible for overtime pay at a rate of at least one and a half times their regular hourly wage. These employees are usually paid on an hourly basis, earn no more than $1,128 per week or $58,656 per year, and don’t hold managerial roles. 

Meanwhile, exempt employees are not eligible for overtime pay and are required to work as much or as little as needed to fulfill the duties of their role. Employees become exempt when they meet specific criteria set by the Department of Labor regarding their job duties and salary.

In addition, agricultural workers and independent contractors are not eligible for overtime pay under the rules of the FLSA.

How Can Overtime Affect Employers and Employees?

Overtime can affect both employers and employees. Firstly, paying overtime rates can be expensive for the employer, leading to increased payroll costs and decreased profits.

Meanwhile, if an employee is required to work overtime, it can lead to fatigue and decreased productivity, especially if they are not given time off to recover. Additionally, overtime can disrupt an employee’s work-life balance, leading to stress and reduced morale.