Wage theft from overtime violations is one of the most common forms of labour law non-compliance in the United States. The Department of Labor recovers hundreds of millions of dollars in unpaid overtime wages annually — yet many workers still don't know whether they are entitled to overtime, how it is calculated, or what to do when they are not paid correctly.
The federal rule: the Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) is the federal law governing overtime. It requires covered employers to pay time-and-a-half (1.5×) the regular rate of pay for every hour worked over 40 hours in a single workweek.
Key points about how the FLSA works:
- The calculation is per workweek (7 consecutive days), not per pay period, bi-weekly, or monthly. A pay period of two weeks is two separate overtime calculations.
- There is no daily overtime requirement under federal law — only weekly. Some states (notably California, Nevada, and Alaska) have daily overtime rules.
- The FLSA covers employers with at least $500,000 in annual sales, or who are engaged in interstate commerce (which includes most businesses in practice).
- Overtime cannot be waived by agreement — an employee cannot agree to work overtime without extra pay. Any such agreement is unenforceable.
Exempt vs. non-exempt: who is entitled to overtime?
The FLSA exempts certain categories of workers from overtime. The most significant exemptions are for white-collar workers (executive, administrative, and professional employees) who meet both a salary and duties test:
Salary threshold
Since January 2025, the minimum salary for the executive, administrative, and professional exemptions is $1,128/week ($58,656/year). Workers paid below this threshold are entitled to overtime regardless of their job duties.
Note: In November 2024, a federal court vacated the DOL's July 2024 rule that raised the threshold to $844/week; as of 2026, the pre-July 2024 threshold of $684/week applies under the reinstated 2019 rule. Check the DOL website for the most current figure as this is subject to ongoing litigation.
Duties test
Meeting the salary threshold alone is not enough — the employee must also perform specific exempt duties:
- Executive exemption: Primary duty is managing the enterprise or a department, customarily directs 2+ employees, and has authority to hire/fire (or significant input on personnel decisions).
- Administrative exemption: Primary duty is office or non-manual work directly related to general business operations, and exercises discretion and independent judgment on matters of significance.
- Professional exemption: Primary duty involves advanced knowledge in a field of science or learning requiring a degree (learned professionals), or requires invention, imagination, or talent in a recognised artistic field.
- Computer employee exemption: Systems analysts, programmers, software engineers earning at least $684/week or $27.63/hour.
- Outside sales exemption: Primary duty is making sales away from the employer's place of business. No salary requirement.
Job titles are irrelevant — what matters is what the employee actually does. A worker titled "manager" who spends most of their time on non-managerial tasks may not be exempt.
How to calculate your regular rate and overtime rate
The overtime rate is 1.5× the regular rate of pay — which is not simply the hourly wage. The regular rate includes:
- Hourly wages or salary converted to hourly
- Non-discretionary bonuses and commissions earned in the workweek (allocated to the hours worked)
- Shift differentials
- On-call pay
It excludes: discretionary bonuses, gifts, vacation/sick/holiday pay, and reimbursements for expenses.
Example: If you earn $20/hour and work 50 hours in a week, your overtime for the 10 extra hours is: $20 × 1.5 = $30/hour. Total pay: (40 × $20) + (10 × $30) = $800 + $300 = $1,100.
For salaried non-exempt employees, divide the weekly salary by the number of hours it is intended to cover (typically 40) to get the regular rate, then apply the 1.5× multiplier.
State overtime laws
Many states have overtime rules that are more protective than federal law. Where state law is more favourable, it applies:
- California: Daily overtime (1.5× after 8 hours/day, 2× after 12 hours/day), weekly overtime after 40 hours, and double-time on the 7th consecutive day of work in a workweek.
- Alaska: Daily overtime after 8 hours, weekly overtime after 40 hours.
- Nevada: Daily overtime after 8 hours if the employee earns below 1.5× the state minimum wage, and they did not choose a 4×10 schedule.
- Colorado: Daily overtime after 12 hours, weekly overtime after 40 hours.
- Most other states: Follow FLSA — overtime after 40 hours per week only.
What to do if your employer is not paying overtime
- Document your hours: Keep your own record of hours worked — start and end times, any off-clock work, and any time you were told not to record. Compare to your pay stubs.
- Calculate the shortfall: Work out the difference between what you were paid and what you should have been paid under FLSA and your state's law.
- File a complaint with the DOL: The Wage and Hour Division (WHD) of the Department of Labor investigates FLSA violations. You can file online at dol.gov or by calling 1-866-4-US-WAGE. Complaints are confidential — your employer cannot retaliate.
- File a state wage claim: Your state's Department of Labor (or equivalent agency) handles state overtime violations. State agencies often have shorter investigation timelines and broader authority than the federal WHD.
- Sue in federal or state court: You can sue your employer under FLSA for unpaid overtime. If you win, you are entitled to: the unpaid wages, an equal amount as liquidated (double) damages, and attorney's fees. The statute of limitations is 2 years (3 years for wilful violations). Many employment attorneys take FLSA cases on contingency.
Retaliation is illegal
FLSA prohibits your employer from retaliating against you for: asserting your right to overtime, filing a complaint with the DOL, or testifying in an investigation. Retaliation includes: firing, demotion, pay cuts, reduced hours, or any other adverse action. If you face retaliation, file a separate complaint with the WHD — and consult an employment attorney promptly, as the retaliation claim has its own time limit.