The Fair Labor Standards Act (FLSA) regulates overtime – that is, the extra hours employees work beyond their regular shift. Under federal law, employers must pay time-and-a-half to all nonexempt employees who put in more than 40 hours per week. However, there are some exceptions to this rule that could save you money if your business is not subject to the FLSA or its regulations (for example, if it employs fewer than 500 workers).

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What is overtime?

Overtime is any hours worked in excess of 40 per week, which are paid at one and a half times the employee’s regular rate of pay. In other words, if an employee works more than 40 hours in a week, they’re entitled to 1.5 times their normal hourly wage.

However, if you work more than eight hours on any day (including weekends), then those additional hours do not count as overtime, and do not get paid at an increased rate—they’re just regular old time!

Overtime rules

The Fair Labor Standards Act (FLSA) defines overtime as time worked in excess of 40 hours in a week. The FLSA also requires that employers pay these employees at 1.5 times their regular rate of pay for any hours worked over 8 hours in a day, or 40 hours in a week.

Exemptions from overtime pay

There are exceptions to the 40-hour requirement. Although there is no such thing as “exempt” overtime, several categories of employees do not have to be paid for overtime hours (e.g., certain farmworkers). In addition, workers employed by certain types of businesses may be eligible for limited exemptions from the FLSA’s overtime requirements. For example:

  • If a nonprofit organization has less than $500,000 in annual receipts and provides services related to social welfare, education, or religion; it can pay its workers an hourly rate that does not exceed $23 per hour ($455 weekly), regardless of how many hours they work each week.
  • An employer can also pay a tipped employee only $2.13 per hour if he/she earns enough tips during the week to bring him/her up above that threshold ($18). Tipped employees include waiters/waitresses who usually receive tips from customers as part of their income on top of their hourly wages earned working for their employer; bartenders who earn most of their income through tips rather than salaries; valets who earn tips while performing valet services on behalf of customers; taxi drivers whose primary source of income comes from fares paid by passengers; etc.

Types of overtime

There are three types of overtime – straight time, compensatory time, and premium pay.

Straight-time overtime is paid at the employee’s regular rate of pay for all hours worked in excess of 40 hours per week.

Compensatory time is paid at 1 ½ time the employee’s regular rate of pay for all hours worked in excess of 40 hours per week. This may be used within a 12-month period or “rolled over” to future weeks within that same year if not used within the first 12 months after an employee accrued it; however, if an employee has accrued more than 240 hours over 4 years or more (except if a collective bargaining agreement provides otherwise), then any unused compensatory time must be paid out on termination as additional wages for services rendered at their regular rate(s).

Premium pay consists of any other type of compensation other than straight-time wages and overtime premium compensation which is provided to employees who perform work during late night shifts from 10 pm until 6 am daily; Sunday through Friday (or non-designated holidays); Saturdays where applicable – regardless which day falls on Sunday during which 8 hour days may be worked between 7 am – 5 pm; or when working under emergency conditions such as natural disasters affecting the company’s ability to operate normal business operations due to power outages caused by storms/hurricanes/tropical systems etc.

FAQ

What is overtime?

In federal law, overtime applies after 40 hours. An employee working five days a week for eight hours a day is working 40 hours per week.

Do I have to work overtime?

You only have to work overtime if your contract says so. You don’t have to work overtime if you could show the extra hours would make you earn less than the national minimum wage.

How much is the overtime pay?

Under federal law, overtime compensation is paid at a rate of at least 1.5 times the employee’s regular pay rate, otherwise known as “time and a half.”