Calculating overtime compensation in the US sometimes turns into a challenge: overtime laws differ by state, and accurate calculations require time and effort. The definition of overtime sounds quite simple: the amount of time worked beyond normal working hours. However, accrual and payment rules differ from state to state – and this is why calculating time and payments can sometimes be confusing. In this article, we collected basic facts that you need to know about overtime laws by state. Let’s start with the brief description of federal requirements to overtime accrual and pay.
According to the federal regulations, extra pay for working weekends or nights is a matter of agreement between the employer and the employee (or the employee's representative). However, there are two groups of employees for which the extra pay may differ.
Federal law differentiates exempt and non-exempt employees. For those who are “exempt” from the regulation, employers are not required to pay overtime at a special rate.
For covered, nonexempt employees, the Fair Labor Standards Act (FLSA) requires overtime pay to be at least one and one-half times an employee's regular rate of pay after 40 hours of work in a workweek.
Some exceptions also apply under special circumstances to police and firefighters and to employees of hospitals and nursing homes.
The Contract Work Hours and Safety Standards Act (CWHSSA) requires contractors and subcontractors on most federal contracts over $100,000 for services or construction to pay laborers and mechanics at least one and one-half times their basic rate of pay for all hours worked over 40 in a workweek. CWHSSA also applies to most federally assisted construction contracts.
In cases where an employee is subject to both the state and federal overtime laws, the employee is entitled to overtime according to the standard that will provide the higher overtime pay. So, let’s take a look at how overtime is regulated in specific states.
In 18 states, overtime requirements are based on federal law only. There are no additional state laws that define their own rules.
There are two states and two territories where the 40-hour workweek rule is specified by an 8-hour workday limit. Everything on top of that counts as overtime. Also, state laws provide minor additions to this requirement:
Alaska State law requires overtime pay for any time worked over 8 hours in any workday or 40 hours in any given work week. Employers with less than 4 employees are exempt from the state's overtime pay rule. The Alaska Department of Labor website may have additional specific information.
Overtime is required for time worked beyond 40 hours in a week or 8 hours in a given day. The Nevada Office of the Labor Commissioner website may have additional specific information.
Overtime required after 8 hours in any day or 40 hours in a given workweek. Overtime is also required on the 6th and 7th consecutive days worked. The Virgin Islands Department of Labor website may have more helpful information.
Overtime pay required after 8 hours worked in a day or 40 hours in a week. The Puerto Rico Department of Labor and Human Resources website may have more helpful information on Puerto Rico wage and labor laws.
5 states offer unique overtime rules, with either higher pay for longer hours (like California), or on the contrary – longer workdays and workweeks (up to 46 or 48 hours!) without overtime rates.
Overtime pay of time-and-a-half is required for hours worked over 8 in a day, 40 in a week, and for the first 8 hours of the seventh day worked in a week. Double pay is required for any hours worked over 12 in a day or in excess of eight hours on any seventh day of a workweek. The California Department of Industrial Relations website may have additional specific information.
Overtime pay is required for hours worked over 40 in a week, over 12 hours in a given day, or over 12 consecutive hours. The Colorado Department of Labor and Employment website may have additional specific information.
Overtime required by state law after 46 hours worked in a week. State law does not apply to employment covered under the FLSA; instead, federal wage / overtime requirements will apply for qualified workers and those who work over 40 hours in a week. The Kansas Department of Labor website may have additional specific information.
Overtime pay is required for employees working over 40 hours in a week, and also for any employees who work 7 days in a single work week (overtime will apply on 7th day). The Kentucky Labor Cabinet website may have additional specific information.
Overtime is required after 48 hours worked in a 7-day workweek. Federal wage and overtime laws supersede the state's laws for qualified employees. The Minnesota Department of Labor and Industry website may have additional specific information.
In three states, overtime laws are extended depending on specific areas of business:
Overtime is required for time worked in excess of 40 hours in a week. A few industries, including factories and manufacturing establishments, also have overtime pay required after 10 hours worked in a workday. The Oregon Bureau of Labor and Industries website may have additional specific information.
Overtime is required for time worked in excess of 40 hours in a week. Retail and other specified businesses must also pay overtime for work on Sundays and holidays. The Rhode Island Department of Labor and Training website may have additional specific information.
Overtime pay is required for time worked over 40 hours, but state law exempts a variety of industries, including retailers, hotels, and restaurants, from the overtime rule. Federal overtime requirements may nevertheless apply. The Vermont Department of Labor website may have additional specific information.
The rest 22 States, joined by D.C. and Guam, have their state overtime regulations that are similar to the federal law but provide certain exemptions – like for example “White-collar” exemptions of Hawaii law:
For both employer and employee, it’s essential to know the up-to-date version of overtime accrual rules. By defining which rules apply to different categories of employees, providing for different scenarios, and setting up your time management system in accordance with your state’s overtime laws, you ensure accurate overtime calculation and streamline time and payroll management in your company. Hope our guide helps you with that!