Before we can fully understand what overtime is, we need to understand how the Fair Labor Standards Act defines a workweek. FLSA says that an employee's workweek is a fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods. It doesn't have to coincide with the calendar week but may begin on any day and at any hour of the day. Averaging hours over two or more weeks is not permitted.
There's no limit on the number of hours employees aged 16 and older may work in any workweek. The FLSA doesn't require overtime pay for work on Saturdays, Sundays, holidays or regular days of rest, unless overtime is worked on such days.
However, an employee's eligibility for overtime pay is based on employee classification — that is, whether they are classified as an exempt or nonexempt worker.
Nonexempt workers
Employees are generally considered nonexempt if they earn less than $684 per week
($35,568 annually) as established by
the FLSA and if their job duties do not meet the criteria for exemptions (see below). Nonexempt workers include such employees as retail staff, clerical employees, customer service
representatives and manual laborers. They may be paid by the hour or by salary.
Under federal regulations, nonexempt employees must be paid at least the minimum wage for all hours actually worked and must be paid the appropriate overtime premium when they work more than 40 hours in a workweek. State law may impose additional obligations. The risk involved in not paying overtime can be substantial — an employer may be required to pay back wages, fines and possibly the employee's legal fees.
Employers covered by FLSA are required to pay the applicable overtime premium to nonexempt employees even if the work resulting in overtime wasn't authorized. However, employers are allowed to implement policies prohibiting unauthorized overtime.
An employee can refuse to work overtime, although in at-will employment states they can be fired for refusing an employer's request. However, regulations that affect public health and safety may limit the amount of overtime an employee may be required to work. Truck drivers, for example, typically have limits on how many hours they can drive, no matter how much they are paid. Employers should consult legal counsel and their state labor department.
Pay for vacations, sick days or personal days is not covered by FLSA, nor does the FLSA address double time, which is an agreement between an employer and employee.
Generally, overtime pay earned in a workweek is paid on the usual payday.
Exempt employees
Exempt employees are not eligible for overtime wages. However, the federal government carefully defines what types of work qualify for the exempt status. Exempt employees typically work in professional, executive or administrative positions that meet the following three requirements:
- Earning at the standard threshold of $684 (though legislation may modify this in the future, so be sure to revisit the threshold yearly)
- Being paid on a salary, rather than hourly, basis
- Performing job duties considered exempt
Professional, executive and administrative duties are nonmanual work that help in managing the business. Job duties considered to be exempt are those that involve the exercise of discretion and judgment; they might also involve managing or supervising two or more full-time employees with authority to hire and fire.
Other employees exempt from overtime pay requirements are outside sales executives; seasonal amusement or recreational workers; seamen employed on foreign vessels; employees engaged in fishing operations; and certain commissioned employees at retail or service establishments. Auto, truck, trailer, farm, boat or aircraft salespeople employed by nonmanufacturing establishments are likewise exempt.
The Department of Labor regards the April 2024 updates to overtime regulations as a commonsense approach to overtime that offers consistency and certainty for employers and clarity and prosperity for American workers.