Under the Fair Labor Standards Act (FLSA), a covered, non-exempt employee must be paid at least 1.5 times the regular rate for every hour over 40 in a workweek (29 U.S.C. § 207(a)(1)). A 46 hour week at $20 an hour pays 40 x $20 = $800 plus 6 x $30 = $180, so $980. Federal law has no daily overtime and no premium for weekends or holidays as such.
Four questions decide the actual amount: is the employee covered, which workweek counts, what is the regular rate, and which hours count as work. Each is answered below from the U.S. Department of Labor (DOL), the statute and the regulations.
The rule in short
- Overtime is owed for hours worked over 40 in a workweek, at not less than time and a half the regular rate (DOL overtime pay page).
- There is no limit on weekly hours for employees aged 16 or older. The law requires pay, not a cap.
- Saturdays, Sundays, holidays and days over 8 hours need no premium as such, only hours that push the week over 40 (29 CFR 778.102).
- The regular rate can never be below the minimum wage (29 CFR 778.107).
Who the FLSA covers
An employee is covered in one of two ways (Fact Sheet #14).
Enterprise coverage. Everyone working for a covered enterprise is covered. Under 29 U.S.C. § 203(s)(1) that means:
| Type of employer | Test |
|---|---|
| Most businesses | Employees engaged in commerce or in producing goods for commerce, or handling goods or materials that moved in or were produced for commerce, and annual gross volume of sales or business done of at least $500,000 (not counting separately stated retail excise taxes) |
| Hospitals, residential care, schools, preschools, colleges | Covered regardless of revenue, public or private |
| Public agencies | Covered |
A business whose only regular employees are the owner and the owner's immediate family is not an enterprise (§ 203(s)(2)), and the DOL fact sheet says a covered enterprise has at least two employees.
Individual coverage. Below $500,000, an employee is still covered if their own work regularly involves interstate commerce, for example producing goods shipped out of state, regular calls to other states or handling records of interstate transactions. Domestic service workers are normally covered too.
Coverage is only the first step. Some covered employees are exempt from overtime, and a salary alone does not make someone exempt: the tests are in the guide to overtime on a salary.
The workweek: 168 fixed hours, each week on its own
The 40 hours are counted per workweek, a fixed and regularly recurring period of 168 hours, seven consecutive 24 hour periods (29 CFR 778.105). It can start on any day and hour and stays fixed once set; a change must be permanent and not meant to avoid overtime.
Each workweek stands alone (29 CFR 778.104). Hours are never averaged over two or more weeks, whether the employee is paid weekly, biweekly or monthly. The regulation's own example, priced at $20:
| Hours | Overtime | Pay at $20 | |
|---|---|---|---|
| Week 1 | 30 | 0 | 30 x $20 = $600 |
| Week 2 | 50 | 10 | 40 x $20 + 10 x $30 = $1,100 |
| Two weeks | 80 | 10 | $1,700 |
Averaged as 2 x 40 hours, the same paycheck would be $1,600, which is $100 short. The biweekly timesheet calculator counts each week of a two week pay period separately for that reason.
The regular rate: what goes in, what stays out
Overtime is 1.5 times the regular rate, not necessarily the hourly rate on the offer letter. The regular rate is an hourly figure worked out every week: all pay for employment in that workweek, minus the payments the law excludes, divided by all hours actually worked (29 CFR 778.109). Employer and employee cannot simply agree on a different number (29 CFR 778.108).
Goes in (Fact Sheet #23, Fact Sheet #56C):
- hourly wages, piece rates, salary and commissions,
- shift differentials,
- nondiscretionary bonuses: production, attendance, safety, quality and accuracy bonuses, and any bonus promised in advance,
- the reasonable cost or fair value of goods or facilities provided as pay.
Stays out, the eight exclusions in 29 U.S.C. § 207(e):
| § 207(e) | Excluded payment |
|---|---|
| (1) | Gifts and special occasion payments not tied to hours, production or efficiency |
| (2) | Pay for occasional periods with no work (vacation, holiday, illness); expense reimbursements |
| (3) | Discretionary bonuses, bona fide profit sharing or savings plans, talent fees |
| (4) | Employer contributions to retirement, life, accident or health plans |
| (5) | Overtime premiums for hours over 8 a day, over 40 a week or over normal hours |
| (6) | Premiums of at least 1.5x for Saturdays, Sundays, holidays, days of rest, the 6th or 7th day |
| (7) | Contract premiums of at least 1.5x for work outside the agreed workday or workweek |
| (8) | Qualifying stock options and stock purchase plans |
A bonus is discretionary only if the employer decides whether and how much to pay at or near the end of the period, with no prior promise (29 CFR 778.211). An employee of the month award can qualify; a bonus announced in January for June cannot, whatever its label. Unless the law says otherwise, an excluded payment also cannot be counted toward the overtime owed (§ 207(h)).
Worked example 1: a 46 hour week at $20
Monday to Thursday 7:00 AM to 5:30 PM with a 30 minute unpaid lunch, Friday 7:00 AM to 1:00 PM. With hourly pay only, the regular rate is the hourly rate (29 CFR 778.110(a)).
| Hours | Rate | Pay | |
|---|---|---|---|
| Regular | 40 | $20.00 | $800.00 |
| Overtime | 6 | $30.00 | $180.00 |
| Gross | 46 | $980.00 |
In the overtime calculator with the rule "U.S. federal (FLSA): over 40 hours a week" and an hourly rate of 20, the summary shows 40:00 regular, 6:00 overtime, "Regular pay" $800.00, "Overtime pay" $180.00 and "Gross pay" $980.00.
Worked example 2: a bonus raises the regular rate
A production worker earns $18 an hour, works 45 hours and earns a $90 production bonus for that week. The bonus was announced in advance and follows a formula, so it is nondiscretionary and goes into the regular rate. The method is the three steps in Fact Sheet #56C and 29 CFR 778.209(a):
| Step | Calculation | Result |
|---|---|---|
| Straight time for all hours | 45 x $18.00 | $810.00 |
| Add the bonus | $810.00 + $90.00 | $900.00 |
| Regular rate | $900.00 ÷ 45 | $20.00 |
| Half-time premium per overtime hour | $20.00 x 0.5 | $10.00 |
| Overtime premium | 5 x $10.00 | $50.00 |
| Total due | $900.00 + $50.00 | $950.00 |
Only half the rate is added, because straight time for the overtime hours is already in the $810. Ignoring the bonus gives 40 x $18 + 5 x $27 = $855, plus $90, so $945: $5 short (5 overtime hours times half of the $2 the bonus added to the rate).
The calculator does not fold bonuses into the regular rate. Entering 18 shows $855.00. For a bonus that belongs to one week, work out the regular rate by hand and enter 20: the gross shows 40 x $20 + 5 x $30 = $950.00, the right total, though the "Regular pay" and "Overtime pay" split will differ from a payslip that lists the bonus separately.
Bonuses paid monthly or quarterly
For a bonus covering several weeks, overtime can first be paid on the hourly rate. Once the bonus is known, it is spread back over the weeks in which it was earned (equally per week or per hour if it cannot be tied to specific weeks), and each week with overtime gets an extra half rate on its share (29 CFR 778.209).
Example: a $200 attendance bonus for a 4 week month is $50 a week. In a 45 hour week that adds $50 ÷ 45 = about $1.11 an hour; half of it times 5 overtime hours is about $2.78 extra. Weeks without overtime owe nothing extra.
Hours worked: what counts toward the 40
Overtime starts at the 41st hour worked, so what counts as work moves the line:
- Short breaks count. Rest periods of 5 to about 20 minutes are hours worked (29 CFR 785.18).
- Real meal breaks do not. A bona fide meal period, ordinarily 30 minutes or more, is not work time, but only if the employee is completely relieved from duty. Eating at the desk while answering calls is work time (29 CFR 785.19). State meal break rules are in the lunch break laws guide.
- Off the clock work counts. Work not requested but "suffered or permitted" is work time, also at home, if the employer knows or has reason to believe it is done (29 CFR 785.11 to 785.12). A rule against it is not enough; management must actually stop the work (29 CFR 785.13).
- On call depends on freedom. On call at or so near the workplace that the time cannot be used for oneself is work; only leaving word where one can be reached is not (29 CFR 785.17).
What an employer cannot do, and when overtime is due
- Average two weeks. Not allowed, whatever the pay period (see the table above).
- Agree it away. The overtime requirement cannot be waived by agreement. An agreement to count only 8 hours a day or 40 a week also fails (Fact Sheet #23).
- Refuse to pay unapproved overtime. A policy that overtime is not paid unless approved in advance does not remove the right to pay for overtime that was actually worked.
- Pay a flat sum. A lump sum that does not depend on the overtime hours worked is not an overtime premium (29 CFR 778.500).
Overtime is due on the regular payday for the period in which that workweek ends. If the amount cannot be known yet, such as a pending bonus, it is due as soon as practicable and no later than the next payday after it can be calculated (29 CFR 778.106).
When time off can replace overtime pay is in the comp time guide.
Records the employer must keep
For each non-exempt employee, 29 CFR 516.2 requires, among other items, the day and time the workweek begins, hours worked each workday and each workweek, the regular rate in weeks with overtime, straight-time earnings and the overtime premium separately, deductions, total wages and the payment date.
Payroll records are kept at least 3 years (§ 516.5); time cards with daily start and stop times at least 2 years (§ 516.6).
Recovering unpaid overtime
What the statute says:
- An employer that violates the overtime rule owes the unpaid overtime plus an equal amount as liquidated damages (29 U.S.C. § 216(b)).
- Employees can sue in federal or state court for themselves and others similarly situated; each employee must consent in writing to join. If they win, the court also awards a reasonable attorney's fee and costs, paid by the employer.
- The suit must be filed within 2 years after the claim arose, or 3 years for a willful violation (29 U.S.C. § 255(a)).
State law can add more
The FLSA is a floor and a state can require more, such as daily overtime; the overtime laws by state guide lists the state rules.
What the overtime calculator shows and what it does not
The overtime calculator counts hours per workweek from start, end and break times, applies the federal 40 hour rule or a preset for California, Alaska, Nevada or Colorado (other states can have their own rules), and shows regular and overtime hours and pay. The workweek start day is a setting, and over 2 weeks or a month overtime is still counted per workweek.
It does not:
- decide whether you are covered or exempt; it assumes overtime is owed,
- fold bonuses, commissions, shift differentials or a second hourly rate into the regular rate; it multiplies the one rate you enter (use the hand method above),
- model the fluctuating workweek method for salaried non-exempt employees,
- calculate damages or taxes.
This is a calculation, not legal advice. For a specific case, the DOL's Wage and Hour Division or your state labor agency can help.
FAQ
What does the FLSA say about overtime pay?
Covered, non-exempt employees get at least 1.5 times their regular rate for every hour over 40 in a workweek. There is no federal daily overtime and no weekend or holiday premium as such.
Does the FLSA apply to small businesses?
Often yes. Enterprise coverage needs $500,000 in annual sales (no minimum for hospitals, schools and public agencies), but below that an employee whose own work regularly involves interstate commerce is still covered individually.
Do bonuses count toward overtime?
Nondiscretionary bonuses do: production, attendance, safety, quality and any promised bonus. They raise the regular rate, so each overtime hour that week earns more. Discretionary bonuses and gifts not tied to hours or output do not.
Can my employer average my hours over two weeks?
No. Each workweek stands alone: 30 hours and then 50 means 10 hours of overtime, even on a biweekly paycheck.
How far back can I claim unpaid overtime?
Two years under 29 U.S.C. § 255(a), three for a willful violation, for the unpaid overtime plus an equal amount in liquidated damages.