The Fair Labor Standards Act (FLSA) requires most US employers to pay non-exempt employees at least 1.5x their regular rate for all hours over 40 in a workweek. Sounds simple — and it is for hourly workers with a straightforward schedule. It gets more complex with shift differentials, piece rates, non-discretionary bonuses, and state law variations.

Who Is Covered — Exempt vs. Non-Exempt

Exempt employees — typically salaried professionals earning above the FLSA salary threshold ($684/week as of 2024, pending increases) in executive, administrative, or professional roles — are not entitled to overtime under federal law. Non-exempt employees, regardless of whether they are paid hourly or salary, must receive OT.

The Regular Rate of Pay

OT is calculated at 1.5x the regular rate — which is not always the same as the hourly rate. The regular rate includes: hourly wages, commissions, piece-rate earnings, and most non-discretionary bonuses (bonuses that employees have reason to expect). It excludes: discretionary bonuses, gifts, overtime premium pay already paid, and employee benefits.

State Laws That Go Further

California

• Daily OT: 1.5x for hours 8-12 in a single workday
• Daily double time: 2x for hours beyond 12 in a workday
• 7th consecutive day of work in a workweek: first 8 hours at 1.5x, beyond 8 at 2x

Nevada

OT after 8 hours in a day for employees earning less than 1.5x minimum wage.

Alaska and Puerto Rico

Also have daily OT requirements. Always verify current state requirements — laws change.

Salaried Non-Exempt Workers

A salaried employee can still be non-exempt. Their regular rate = weekly salary / hours worked that week. If a salaried non-exempt employee works 50 hours and earns $800/week, their regular rate is $800/50 = $16/hr. They are owed an additional 0.5x premium for the 10 OT hours: 10 x $8 = $80 additional, total $880.