The subject of overtime pay is possibly the most confusing subject for workers seeking to learn more about their employment rights. Many workers do not understand whether or not they are eligible for overtime, or what they should do in the event their employer is not paying them accurately (or at all) for the extra time that they work. Complicating an already difficult subject is the new set of overtime regulations which went into effect in August 2004. (For more information, please see our page on exemptions from overtime.) Many of these regulations are the subject of vastly different interpretations, and have not yet been ruled upon by courts.
On this page, we'll do our best to clarify this complicated subject for you, but if you have remaining questions, you may wish to speak to a local attorney who is knowledgeable about overtime, since it is impossible to anticipate every problem that may have arisen in your workplace.
This page provides answers to the following questions:
11. My employer pays a flat sum for working on Sundays, regardless of how many hours we have already worked that week, or whether working on Sunday would qualify us for overtime pay. Is this considered overtime pay?
It may surprise some to learn that there is no federal law limiting the number of hours that an employee may work in a week, unless the employee is a minor. What keeps employers from requiring employees to work an unlimited amount of hours each week is the requirement that certain workers receive overtime pay. Eligible workers who work more that 40 hours in one week must be paid not less than one and one-half times their regular pay for every hour worked in excess of forty hours. Some states also have overtime pay laws. If both state and federal overtime laws apply, the employee is entitled to whichever overtime protection is most strict and provides the most protection to you as an employee.
The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Some states also have overtime laws. For more information, see the agency in your state which handles wage and hour/labor standards violations, listed on our site's state government agencies page.
More than eighty million American workers are protected (or "covered") by the FLSA; however, not all of these workers are eligible for overtime. The first step in determining whether you are eligible for overtime is to determine whether your employer is covered by the FLSA. There are two ways in which an employee can be covered: "enterprise coverage" and "individual coverage." Either standard is sufficient for the employer to be subject to the FLSA's overtime provisions.
Enterprise coverage: Employees who work for certain businesses or organizations (or "enterprises") are covered by the FLSA. These enterprises, which must have at least two employees, are:
those which do at least $500,000 a year in business; or
hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies
Individual coverage: Even when there is no enterprise coverage, employees are protected by the FLSA if their work regularly involves them in commerce between states ("interstate commerce"). In its own words, the law covers individual workers who are "engaged in commerce or in the production of goods for commerce."
Examples of employees who are involved in interstate commerce include those who: produce goods (such as a worker assembling components in a factory or a secretary typing letters in an office) that will be sent out of state, regularly make telephone calls to persons located in other States, handle records of interstate transactions, travel to other States on their jobs, and do janitorial work in buildings where goods are produced for shipment outside the State.
Domestic service workers (such as housekeepers, full-time babysitters, chauffeurs and cooks) are normally covered by the law, as long as:
their cash wages from one employer are at least $1,000 in a calendar year (or the amount designated pursuant to an adjustment provision in the Internal Revenue Code), or
they work a total of more than 8 hours a week for one or more employers.
Construction Activities: Employees of construction firms may be subject to the FLSA when they work on certain types of projects. To determine if you are covered in these situations, you must analyze the character of the construction project. The FLSA covers construction work in or on a channel or facility of interstate commerce (i.e. highway, telephone lines, etc). The FLSA also covers construction work which is closely tied with the process of producing goods for interstate commerce, for example, construction which improves, replaces, or expands a covered production facility that ships its products across state lines. Covered construction activity includes:
(1) Repair, maintenance, and construction of instrumentalities of interstate commerce. An instrumentality of interstate commerce includes railroads, highways and city streets, pipe lines, telephone and/or electrical transmission lines, airports, bus/truck/steamship terminals, radio or TV stations and river/streams/waterways over which interstate or foreign commerce regularly moves.
(2) Repair, maintenance, reconstruction, redesign, improvement or extension or enlargement of an existing facility engaged in the production of goods for interstate commerce. The construction of a new production facility would not be a covered project.
An employee working on projects such as these is considered to be essential to interstate commerce or the production of goods for interstate commerce.
Employers whose enterprises are covered by the FLSA, or who have employees engaged in interstate commerce are required by the FLSA to pay overtime to eligible employees. Unlike some other laws relating to employment, the standard does not hinge upon how many employees the employer has, but instead looks at the nature of the work performed by the enterprise and the employee to determine whether interstate commerce is involved. For more information, please see the previous question.
Not necessarily. First, the type of job you do may be one that is specifically excluded from protection under the FLSA or its overtime provisions. Second, if you are paid a salary and perform the duties of an exempt employee, you will not be eligible for overtime. These distinctions are covered on our site's page on exemptions from overtime.
6. I am eligible for overtime, but I am not sure whether my employer is calculating it correctly. How is overtime calculated?
Unless specifically exempted, eligible employees must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the FLSA on the number of hours employees aged 16 and older may work in any workweek. The FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, as such.
There are some states that require payment for hours worked in excess of eight in one day, but the federal law and the law of most states is based on a 40-hour workweek. For more information on state overtime laws, see the agency in your state which handles wage and hour/labor standards violations, listed on our site's state government agencies page.
An employee's workweek is a fixed and regularly recurring period of 168 hours -- seven consecutive 24-hour periods. It does not have to coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted. Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned.
While a workweek customarily begins on Monday, that is not a legal requirement. However, an employer must follow a fixed pattern and cannot manipulate the start of the workweek to avoid paying overtime.
The overtime requirement may not be waived by agreement between the employer and employees. An agreement that only 8 hours a day or only 40 hours a week will be counted as working time also fails to comply with the law. An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, also will not impair the employee's right to compensation for compensable overtime hours that are worked.
8. My employer pays me a salary, but I think I am eligible for overtime. How do I calculate how much extra overtime pay I should be receiving?
FLSA overtime is calculated at time and one-half of an employee's "regular rate" of pay. Subject to some special rules, the regular rate is the total non-overtime compensation received by an employee (for work) divided by the number of non-overtime hours these wages are intended to compensate. Most wage "augments" must be included in the regular rate, such as productivity bonuses, longevity pay, or shift differentials.
The regular rate of pay cannot be less than the minimum wage. The regular rate includes all pay for employment except certain payments excluded by the FLSA. Payments which are not part of the regular rate include:
pay for expenses incurred on the employer's behalf,
premium payments for overtime work or the true premiums paid for work on Saturdays, Sundays, and holidays,
gifts and payments in the nature of gifts on special occasions, and
payments for occasional periods when no work is performed due to vacation, holidays, or illness.
Earnings may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings. This is calculated by dividing the total pay for employment (except for the noted statutory exclusions) in any workweek by the total number of hours actually worked.
For example, you are paid a salary of $400 a week, and typically receive a $120 bonus every 12 weeks as a "productivity bonus," based upon the entire department's efforts and not your individual efforts (so it's not considered a discretionary bonus.) Because your salary is below $455 each week, you are eligible for overtime pay. In a week where you work 50 hours, your pay should be calculated as follows:
Regular rate of pay: $400 (weekly pay) plus $10 (bonus pay per w-eek) equals:
$410 per week or $8.20 per hour worked.
Calculating overtime hours: 10 hours worked times 1.5 (overtime rate) equals:
15 hours, or 5 additional overtime hours
Calculating overtime pay rate: $8.20/hour times .5 (half the regular rate) equals:
$4.10/hour or $20.50 in overtime pay.
Your weekly paycheck should be: $410 regular pay (for 50 hours) plus $20.50 overtime pay (for additional 5 "time-and-a-half" hours):