Overtime pay is a fundamental worker protection under U.S. labor laws. Whether you’re punching a clock at a factory or answering emails late at night as a salaried employee, it’s essential to know your rights. Many workers aren’t sure whether they qualify for overtime or how it’s calculated. This confusion can lead to unpaid wages or even legal issues for employers.
This article breaks down the basics of overtime pay in the United States, who qualifies, how it’s calculated, and common misconceptions.
1. What Is Overtime Pay?
Overtime pay is the additional compensation a worker earns for working more than a standard 40-hour workweek. Under the Fair Labor Standards Act (FLSA), which governs most labor practices in the U.S., employees who work more than 40 hours in a workweek must be paid at least one and a half times their regular hourly rate for every extra hour worked.
This is often referred to as “time-and-a-half.”
2. Who Qualifies for Overtime Pay?
Not every worker is eligible for overtime pay. The FLSA divides workers into two main categories:
- Non-exempt employees: These workers are entitled to overtime pay.
- Exempt employees: These workers are not entitled to overtime pay, even if they work more than 40 hours in a week.
To determine whether an employee is exempt or non-exempt, several factors come into play, including salary level, salary basis, and job duties.
Key criteria for exemption include:
- Salary Threshold: As of 2025, employees must earn at least $684 per week ($35,568 annually) to qualify as exempt. If an employee earns less, they are likely non-exempt.
- Salary Basis: Exempt employees must be paid a fixed salary, not hourly wages.
- Job Duties Test: Certain positions are considered exempt based on duties. These include:
- Executive (e.g., management roles)
- Administrative (e.g., office professionals with independent judgment)
- Professional (e.g., lawyers, doctors, engineers)
- Computer Employees
- Outside Sales Employees
If a worker doesn’t meet all of these conditions, they are typically non-exempt and eligible for overtime.
3. How Is Overtime Calculated?
Overtime pay is based on an employee’s regular hourly rate. Here’s the basic formula:
Overtime Pay = Regular Hourly Rate × 1.5 × Number of Overtime Hours
Example:
If you make $20/hour and work 45 hours in a week:
- First 40 hours = $20 × 40 = $800
- Overtime (5 hours) = $20 × 1.5 × 5 = $150
- Total pay = $800 + $150 = $950
Overtime must be calculated weekly, not daily. So even if you work more than 8 hours in a day, it’s not considered overtime unless your weekly total exceeds 40 hours (unless your state has daily overtime laws, like California).
4. Common Overtime Misconceptions
“Salaried employees don’t get overtime.”
This is false. Just because someone is salaried doesn’t mean they’re exempt from overtime. If a salaried employee earns less than the FLSA salary threshold or doesn’t meet the job duties test, they’re still entitled to overtime.
“Comp time is allowed instead of overtime.”
In the private sector, employers cannot offer comp time (extra time off) in place of overtime pay. Public sector employers (like government agencies) may offer comp time under specific regulations.
“Independent contractors get overtime.”
No. Independent contractors are not considered employees under the FLSA and are not entitled to overtime pay. However, misclassification is a major issue—some employers incorrectly label employees as contractors to avoid paying benefits and overtime.
5. State Laws May Offer Greater Protection
Some states have stricter overtime rules than federal law. For example:
- California requires overtime after 8 hours in a workday or 40 hours in a week, and double time after 12 hours in a day.
- Alaska and Nevada have similar daily overtime rules.
- New York may have higher salary thresholds for exemption.
Employees are entitled to the most protective applicable law—federal or state.
6. What Happens If You’re Denied Overtime Pay?
If you believe you’ve been denied rightful overtime wages, you can take action:
- Document your hours worked and pay received.
- Speak with HR or your supervisor for clarification.
- File a complaint with the U.S. Department of Labor’s Wage and Hour Division.
- Consult a labor attorney to consider a private lawsuit for unpaid wages.
Employers who violate overtime laws may be required to pay back wages, liquidated damages, and even legal fees.
7. Tips for Employees
- Track your hours accurately, especially if you’re hourly or unsure of your exempt status.
- Ask questions if your employer says you’re exempt but you’re working 50+ hours a week.
- Know your state’s laws—they may provide better protection than federal rules.
- Stay informed about rule changes. Salary thresholds and exemption rules are periodically updated.
Conclusion
Overtime pay is a key labor right that protects employees from being overworked without proper compensation. While federal law sets the foundation, states may offer even more robust protections. Knowing whether you qualify for overtime, how it’s calculated, and what your rights are can help you ensure fair pay and avoid being taken advantage of.
If you suspect you’re being underpaid or misclassified, don’t stay silent. You have options—and legal protections on your side.