Overtime Pay Rate, Hours, and Laws Explained

Danika McClure
Overtime Pay Rate
Reading Time: 3 minutes

Many individuals who are employed in professional fields, especially those in the medical, business, or tech industries, have employers who may require that they work overtime on occasion. If so, you may be wondering your rights when it comes to being paid for your labor?

Federal Overtime Laws

If you work more than 40 hours per workweek, it’s likely that you’re covered under the Federal Labor Standards Act’s (FLSA) overtime protections. But what does that mean?

FLSA and Overtime Pay

Under the Fair Labor Standards Act (FLSA), employees must receive overtime pay for hours worked in excess of 40 per workweek. Typically these employees will receive wages of no less than one and one-half times their regular rate of pay, also known as time and a half (see below).

The FLSA does not require overtime pay for work that is performed on Saturdays, Sundays, or holidays unless overtime is performed on those particular days.

The Act applies on a workweek basis, which is a series of seven consecutive days that contain a period of 168 hours. It need not coincide with a calendar week.

What Is Time and a Half?

Time and a half refers to the amount of pay you receive if you work more than 40 hours in one week. In essence, the term means that should you work more than 40 hours in a 168 hour period, as determined by your employer, you are entitled to 1.5 times the amount you typically make for any additional hours work.

This means that if you typically make $10 per hour, every hour in excess of a 40 hours per week would be paid at a rate of $15 per hour.

When Employers Must Pay Overtime

Federal laws impose a weekly overtime standard. The same is true for most states, which means that in a majority of the country nonexempt employees are entitled to overtime for every hour beyond the 40 that they work in a workweek regardless of how many hours they work in a day.

A number of states, however, have laws that mandate that employees must be paid overtime if they work more than 8 hours per day.

In states with these mandates, if you work ten hours a day on Monday and five hours a day on Tuesday (with no additional shifts during the week), you would be entitled for overtime pay on Monday, even if your total hours for the week do not exceed 40 hours.

The states to which this rule applies are:

  • Alaska
  • California
  • Nevada
  • Puerto Rico
  • Virgin Islands

The state of Colorado has similar rules for employees who work more than 12 hours per day.

Overtime Pay for Salaried and Hourly Employees

Many business owners are unaware of whether or not salaried employees ought to be paid overtime. As a result, many businesses have been taken to court and forced to award back wages to employees who they believed didn’t earn overtime pay. Though most salaried employees do not receive overtime pay, there are a number of governmental regulations that allow certain salaried employees to obtain overtime pay.

Unless specifically exempted, employees covered by the FLSA must receive overtime pay for any hours worked above the 40 hour per week standard. Exempt employees are on salary, but not all salaried employees are exempt. If, for example, you are a nurse or a police officer, you can also be considered nonexempt and be eligible to receive overtime pay.

In order to classify an employee as exempt from FLSA protections, there are three criteria that employers must prove:

  1. As of 2018, an exempt employee must make more than $23,660 per year, excluding computer professionals, who must make over $57,470 per year.
  2. Exempt employees must be treated as a salaried employee, meaning they are paid a set amount of dollars at a set interval. In order for an employer to claim that an employee is on salary, they can not be docked pay if they are late for work, or need to attend to a doctor’s visit.
  3. Exempt employees must engage in responsibilities that are considered by and large to be white-collar.

Calculating overtime for salaried employees is slightly different from calculating overtime pay for hourly employees.

Let’s say, for example, you have an employee who operates on a fixed salary of $1000 per week who generally works 36 hours per week. If there is a week where they work 50 hours, you’ll need to calculate the regular hourly rate; calculate what their regular wages up to 40 hours; and determine the overtime they are owed from there.

Mandatory Overtime

According to FLSA guidelines, your employer can require you to work overtime and can eliminate your position should you choose not to. The FLSA does not set limits on how many hours a day or week your employer can require you to work. Instead, it requires that employers pay employees overtime for any hours that are worked beyond the 40 hour work week (this varies by state).

Nurses, for example, are notoriously asked to perform mandatory overtime, especially in rural areas. Similarly, construction workers, IT professionals, warehouse employees, and investment bankers are also very likely to have to perform mandatory overtime.

If you are required to work overtime by your employer, FLSA overtime guidelines still apply.

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