If a nonexempt employee works more than 40 hours in a workweek, federal overtime laws require you to pay at least one and a half times their regular rate for every extra hour. That rule comes from the Fair Labor Standards Act (FLSA), and it applies in every state. Daily overtime, weekend premiums and limits on hours are not part of it.
States can add rules on top, and many do. California pays overtime after 8 hours in a day, Colorado after 12, and New York sets a far higher salary for exempt managers than the federal $684 a week. When both laws cover an employee, the more generous rule wins. This guide explains the federal rules as of November 2026, who is exempt, how state overtime laws differ, and what records you need to keep.
Overtime laws at a glance
The table answers the questions employers ask most often. Each answer is the federal rule, so check the state section below before you apply it.
| Question | Federal answer | Source |
|---|---|---|
| When does overtime start? | After 40 hours worked in a workweek | FLSA, 29 U.S.C. § 207(a)(1) |
| What is the overtime rate? | At least 1.5 times the regular rate of pay | 29 U.S.C. § 207(a)(1) |
| Is there daily overtime? | No, unless a state law adds it | US Department of Labor (DOL) |
| Lowest salary for the main exemptions | $684 a week ($35,568 a year) | 29 CFR 541.600; DOL, May 2026 |
| Is there a limit on weekly hours? | No limit for employees aged 16 and older | DOL Fact Sheet #23 |
| Which law applies if state and federal rules differ? | The one more favorable to the employee | 29 U.S.C. § 218(a) |
Federal overtime law: the FLSA 40 hour rule
The FLSA is the main federal law on overtime. Under 29 U.S.C. § 207(a)(1), covered employees who work more than 40 hours in a workweek must be paid “not less than one and one-half times the regular rate” for the extra hours. The Department of Labor’s Wage and Hour Division enforces it.
Most private employers are covered. The law reaches businesses with at least $500,000 in annual sales, hospitals, schools and public agencies, and also individual employees whose work involves interstate commerce, which in practice includes most office jobs (DOL Fact Sheet #14).
What counts as a workweek
A workweek is a fixed, recurring period of 168 hours, or seven consecutive 24 hour periods. It can start on any day and at any hour, but once you set it, it stays the same. Each workweek stands alone: the DOL states that “averaging of hours over two or more weeks is not permitted” (DOL Fact Sheet #23). So a 46 hour week followed by a 34 hour week means 6 hours of overtime, even though the two weeks add up to 80.
The federal rule also ignores the length of a single day. If an employee works 12 hours on Monday, 8 on Tuesday and nothing else that week, they worked 20 hours and earned no federal overtime.
How overtime pay is calculated
The overtime rate is based on the regular rate of pay, not just the base hourly wage. The regular rate includes all pay for work except items the FLSA excludes, such as expense reimbursements, discretionary bonuses and gifts (29 CFR Part 778). Shift differentials, commissions and bonuses promised in advance for attendance or output all count.
For an employee paid only by the hour, the math is simple. Someone earning $10 an hour who works 43 hours is paid like this:
When the employee also earns a bonus or commission for that week, add it to straight time pay, divide by all hours worked to get the regular rate, and then pay an extra half of that rate for each overtime hour. Our guide to overtime calculation works through bonuses, piece rates and salaried nonexempt staff step by step.
What federal law does not require
Several common beliefs about overtime come from company policy or state law, not from the FLSA. According to the DOL, federal law does not require:
- Extra pay for work on Saturdays, Sundays, holidays or regular days of rest, unless those hours push the week past 40
- Overtime for long days, as long as the weekly total stays at 40 or below
- A cap on how many hours an adult employee can work, which means employers can generally make overtime mandatory
Private employers also cannot replace overtime pay with time off later. Compensatory time instead of cash is allowed only for public agencies, under 29 U.S.C. § 207(o). For holiday premiums that employers offer by choice, see our article on holiday overtime pay.
Who is exempt from overtime
Exempt employees are not owed overtime. The largest group is executive, administrative and professional employees, often called white collar exemptions. To be exempt, an employee generally has to pass three tests: they are paid a fixed salary, the salary is at least the federal minimum, and their main duties match the exemption (DOL Fact Sheet #17A). A job title or a salary alone does not make someone exempt.
The federal salary level is $684 a week, or $35,568 a year, and $107,432 a year for highly compensated employees (DOL salary levels). These figures took effect on January 1, 2020. A 2024 rule that would have raised them was struck down by a federal court in Texas, and in May 2026 the DOL formally restored the $684 level in the regulations (DOL news release). Guides that still quote $455 a week are out of date.
The FLSA also exempts some workers by industry or role, fully or from overtime only (29 U.S.C. § 213). The most common groups are:
- Outside sales employees, who have no salary test
- Certain computer professionals, such as systems analysts and software engineers, paid a salary at the federal level or at least $27.63 an hour
- Employees of certain seasonal amusement or recreational businesses
- Certain farm workers
- Certain commissioned employees of retail or service businesses
- Salespeople, parts clerks and mechanics at car, truck, farm equipment, boat and aircraft dealers
- Railroad and air carrier employees, taxi drivers and certain truck drivers covered by federal motor carrier rules
- Domestic workers who live in their employer’s home
Each exemption has conditions, and states can narrow them. Our guides on who is exempt from overtime pay and overtime for salaried employees cover the tests in detail. For a case you cannot settle, your local Wage and Hour Division office is the official point of contact.
Overtime laws by state
State overtime laws fall into three groups. Some states have no overtime statute for private employers and rely on the FLSA. Others copy the 40 hour rule into state law but change who is exempt or raise the minimum wage, which raises the lowest overtime rate. A smaller group adds daily overtime or higher salary thresholds. Federal law sets the floor, and under 29 U.S.C. § 218(a) it does not excuse an employer from a state rule that is more protective.
The table summarizes the states we cover in separate guides. Each guide has worked examples, exemptions and the state sources.
| State | When overtime starts | What differs from federal law |
|---|---|---|
| California | After 8 hours a day, 40 a week, or on the seventh consecutive day | Double time after 12 hours in a day and after 8 hours on the seventh day |
| Colorado | After 40 hours a week, 12 hours a workday, or 12 consecutive hours | Time off cannot replace overtime pay, and weeks cannot be averaged |
| Nevada | After 40 hours a week; after 8 hours a workday for employees paid under $18.00 an hour | A workday is 24 hours from the start of work; agreed four day, ten hour schedules are an exception |
| Oregon | After 40 hours a week for most jobs | Manufacturing pays overtime after 10 hours a day; farmworkers after 48 hours a week, dropping to 40 in 2027 |
| New York | After 40 hours a week; 44 for live in residential employees | Exempt executives and administrators need $1,275 a week downstate and $1,199.10 elsewhere in 2026 |
| Massachusetts | After 40 hours a week | State law exempts some jobs that federal law still covers, so check both |
| Illinois | After 40 hours a week | The One Day Rest in Seven Act limits how mandatory overtime is scheduled |
| Texas | After 40 hours a week (FLSA) | No state overtime statute; the Texas Minimum Wage Act follows the federal minimum wage |
| Arizona | After 40 hours a week (FLSA) | The state overtime statute covers only public employees |
| Florida | After 40 hours a week (FLSA) | No separate overtime statute; the state minimum wage of $15.00 sets the lowest overtime rate at $22.50 |
Sources for the table: California Labor Commissioner overtime FAQ; Colorado 2026 COMPS Order poster, Rule 4; Nevada NRS 608.018 and the 2026 daily overtime bulletin; Oregon BOLI pages on overtime and agricultural overtime; New York Department of Labor FAQ; Massachusetts M.G.L. c. 151, § 1A; Illinois Department of Labor FAQ; Texas Labor Code chapter 62; Arizona A.R.S. 23-391; Florida FloridaCommerce minimum wage.
For any state not listed here, the DOL keeps a directory of state labor offices, which publish the current overtime rules and minimum wages.
Overtime and federal taxes in 2026
Overtime pay is still subject to payroll tax withholding, but for tax years 2025 through 2028 employees can deduct qualified overtime on their federal income tax return. The deduction is capped at $12,500 a year, or $25,000 for joint filers, and phases out above $150,000 of modified adjusted gross income, or $300,000 for joint filers (IRS fact sheet).
Qualified overtime is only the premium the FLSA requires, the “half” in time and a half. For an employee paid $25 an hour who works 45 hours, the qualified amount for that week is 5 x $12.50 = $62.50, while the full overtime pay is 5 x $37.50 = $187.50. Daily overtime under state law and premiums an employer pays by choice do not count. Employers report the qualified amount to employees, so your time records need to separate federal overtime from everything else. Our overtime tracking guide explains what to record.
Records you must keep and penalties for unpaid overtime
Under 29 CFR 516.2, you must keep these records for each nonexempt employee:
- Hours worked each workday and the total for each workweek
- The regular hourly rate for weeks with overtime
- Straight time earnings for the day or week
- Total overtime premium pay for the workweek
- The time and day the workweek begins
The FLSA does not require a particular timekeeping method, as long as the records are complete and accurate. Payroll records must be kept for at least three years, and the time cards and schedules behind them for two (29 CFR Part 516).
Unapproved overtime still has to be paid. Work an employer allows to happen counts as hours worked, even if no one asked for it (29 CFR 785.11). You can discipline an employee for breaking an overtime policy, but you cannot withhold the pay. If overtime goes unpaid, employees can recover the back wages plus an equal amount in liquidated damages (29 U.S.C. § 216(b)), usually for the past two years, or three if the violation was willful (29 U.S.C. § 255(a)). Several states allow more, such as treble damages in Massachusetts and Illinois, as our state guides explain.
Tools and resources to help you comply with overtime laws
Most overtime errors start with miscounted hours. A spreadsheet works for a few employees, but once people work different schedules or in different states, it gets hard to see who crossed 40 hours in which workweek before payroll runs.
actiTIME is time tracking software that records hours in a weekly timesheet or a calendar view with start and stop times. You set company wide or individual work schedules, and actiTIME calculates overtime according to state and company rules. Managers review and approve timesheets, then lock them so approved hours cannot change after payroll. The Time Balance and Overtime report shows overtime across the team, and with individual overtime rates in each profile, the Cost of Work report shows what that overtime costs. Data exports to CSV, and the QuickBooks Online integration imports time records for payroll.
For a quick check of a single paycheck, use our free overtime calculator. The DOL’s overtime pages collect fact sheets and interpretive guidance for employers and employees, and they are the primary source for the federal rules in this article.
FAQ
What is the federal overtime law?
The Fair Labor Standards Act requires employers to pay nonexempt employees at least 1.5 times their regular rate for every hour over 40 in a workweek. It sets no daily overtime and no limit on weekly hours for adults. The US Department of Labor’s Wage and Hour Division enforces it.
Is overtime after 8 hours or 40 hours?
Under federal law, overtime starts after 40 hours in a workweek, and the length of a single day does not matter. A few states add daily overtime: California after 8 hours, Colorado after 12, and Nevada after 8 for employees paid under $18.00 an hour. Oregon uses 10 hours a day for manufacturing.
Do salaried employees get overtime?
Only if they are nonexempt. A salaried employee who earns less than $684 a week, or whose duties do not meet an exemption, is owed overtime like an hourly worker. Some states, including New York, set a higher salary for exempt status.
If I earn $25 an hour, how much overtime will I get?
At time and a half, each overtime hour pays $37.50. For a 45 hour week, that is 40 x $25 = $1,000 in regular pay plus 5 x $37.50 = $187.50 in overtime, or $1,187.50 in total. If you also earn a nondiscretionary bonus or commission, your regular rate and overtime rate are higher.
Can an employer require overtime?
Federal law sets no limit on the hours an employee aged 16 or older can work, so an employer can generally require overtime as long as it pays for it. Some states restrict this for certain jobs or require a day of rest, such as Illinois under the One Day Rest in Seven Act.
Do employers have to pay for overtime that was not approved?
Yes. Under 29 CFR 785.11, work an employer allows is hours worked even if no one requested it. The employer can enforce its overtime policy through discipline, but it still has to pay for the hours.
Is overtime taxed in 2026?
Overtime is taxed and withheld like other wages. For tax years 2025 through 2028, employees can deduct the FLSA overtime premium on their federal return, up to $12,500 a year or $25,000 for joint filers, with a phaseout at higher incomes. State income tax rules differ.
Which law applies when state and federal overtime laws differ?
The employer has to meet both, which in practice means following whichever rule gives the employee more. If a state requires daily overtime or a higher exempt salary, the FLSA does not override it.
Get the hours right first
Overtime laws start with the FLSA’s 40 hour week, then change from state to state, so accurate daily and weekly hours are what keep payroll compliant. Start a free 30-day trial of actiTIME, or book a demo if you want a walkthrough.
