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Key Facts
- Federal level: Covered nonexempt employees generally must receive at least 1.5 times their regular rate for hours worked over 40 in a fixed workweek.
- Federal level: The 2024 federal overtime salary-threshold rule was vacated, and the Department of Labor applies the 2019 threshold of $684 per week for most executive, administrative, and professional exemptions.
- Federal level: Salary alone does not create an exemption; the employee generally must satisfy the salary-basis, salary-level, and applicable duties tests.
- Federal level: Overtime is based on the regular rate, which can include nondiscretionary bonuses, commissions, and other compensation beyond an hourly wage.
- Federal and state: State law may require overtime in more situations, use higher exemption thresholds, or apply daily overtime, so both systems must be checked.
Federal overtime law is mainly found in the Fair Labor Standards Act, or FLSA. It protects covered employees unless a specific exemption or exception applies.
Being salaried, holding a managerial title, or agreeing not to claim overtime does not by itself remove federal overtime rights. Classification depends on actual pay practices, job duties, coverage, and the governing law.
The federal 40-hour rule
A covered nonexempt employee generally earns overtime after working more than 40 hours in a workweek. The premium must be at least one and one-half times the employee’s regular rate.
A workweek is a fixed, regularly recurring period of 168 hours: seven consecutive 24-hour periods. It can begin on any day and need not match a calendar week or payroll period.
Hours may not be averaged across two workweeks to avoid overtime. Working 35 hours one week and 45 the next generally produces five overtime hours in the second week, not an 80-hour average.
The FLSA does not generally require extra pay merely because work occurs on a Saturday, Sunday, holiday, or night. A contract, policy, or state law may provide such premiums.
The current federal salary threshold in 2026
The Department of Labor issued a 2024 rule that would have raised salary thresholds in stages. A federal district court vacated that rule on November 15, 2024.
In May 2026, the Department published a technical amendment removing the vacated language and restoring the operative 2019 regulatory text. The standard federal salary level is therefore $684 per week, equivalent to $35,568 for a full-year worker.
The highly compensated employee test uses total annual compensation of $107,432, including at least $684 per week on a salary or fee basis. Paying those amounts does not automatically make an employee exempt.
Salary and duties both matter
Most employees claimed as exempt executive, administrative, or professional workers must satisfy three components. They must be paid on a salary basis, meet the salary level, and primarily perform duties defined by the particular exemption.
The executive exemption generally involves management as the primary duty, directing at least two full-time employees or their equivalent, and meaningful authority or influence over hiring or firing. The administrative exemption focuses on office or nonmanual work related to management or general business operations and discretion on matters of significance.
The learned professional exemption generally requires advanced knowledge in a field of science or learning customarily acquired through prolonged specialized instruction. Separate rules apply to creative professionals, computer employees, outside sales employees, teachers, doctors, and lawyers.
Job titles do not determine exempt status. Actual duties and compensation control.
How the regular rate is calculated
The regular rate is an hourly rate derived from the compensation attributable to the workweek, not necessarily the employee’s stated base rate. It generally includes all remuneration for employment unless the FLSA specifically permits an exclusion.
Nondiscretionary bonuses, shift differentials, and many commissions generally must be included. True discretionary bonuses, qualifying expense reimbursements, gifts, and certain premium payments may be excluded.
For a straightforward hourly employee, overtime is usually the hourly rate multiplied by 1.5. More complex methods apply to salaries for nonexempt work, piece rates, multiple rates, commissions, retroactive bonuses, and qualifying fluctuating-workweek arrangements.
A fixed lump sum labeled “overtime” does not necessarily satisfy the law. The payment must meet the statutory rules and cover the actual overtime owed.
Which hours count as work?
Employers must count work they require or permit, including work they know or have reason to believe is being performed. A rule requiring advance overtime approval may support discipline, but it does not erase pay for overtime actually worked.
Compensable time can include pre-shift or post-shift tasks, work performed remotely, training, travel, waiting, or on-call time depending on the facts and federal standards. Bona fide meal periods and ordinary home-to-work commuting are generally excluded.
Rounding and automatic meal deductions can create underpayments when they fail to reflect compensable time. Employers must maintain accurate records of hours worked by nonexempt employees.
Common exemptions and special rules
The white-collar exemptions are not the only FLSA exclusions. Other provisions address outside sales, certain computer workers, some commissioned retail employees, motor carriers, agriculture, seasonal recreation, and particular transportation or service occupations.
Police, firefighters, hospitals, and residential care establishments can have special work-period rules when statutory conditions are met. Public agencies may sometimes provide compensatory time instead of cash overtime under detailed limits and agreements.
An exemption must be evaluated under its own elements. Similar job titles in different workplaces can produce different outcomes.
State overtime law can be more protective
The FLSA sets a federal floor and generally preserves more protective state requirements. Some states use higher salary thresholds, narrower duties tests, daily overtime, special spread-of-hours rules, or different treatment of particular industries.
When federal and state law both apply, the employee generally receives the greater protection. Compliance with the $684 federal salary threshold does not establish compliance with a higher state threshold.
State-law calculations, limitation periods, penalties, and claim procedures can also differ. Work location usually matters more than the employer’s headquarters when identifying applicable state wage law.
Enforcement and record review
The Department of Labor’s Wage and Hour Division investigates federal overtime complaints and may supervise payment of back wages. The FLSA also permits private civil actions subject to statutory requirements and deadlines.
Federal claims can involve unpaid overtime, an equal amount as liquidated damages, attorney’s fees, costs, and additional relief where retaliation occurs. The ordinary limitations period is two years and can extend to three years for a willful violation.
Useful records include schedules, time entries, pay stubs, bonus and commission plans, messages about off-clock work, job descriptions, and evidence of actual duties. The classification overview for a nonexempt employee explains the threshold question, while our guide to the FLSA provides broader wage-and-hour context.
Sources
- U.S. Department of Labor — Overtime Pay
- DOL Fact Sheet 23 — Overtime Requirements
- DOL — Overtime Rulemaking and Vacatur
- DOL — 2026 Technical Amendment
- DOL — Current Salary Levels
- DOL Fact Sheet 17A — White-Collar Exemptions
- DOL — Regular Rate Requirements
- DOL — FLSA Handy Reference Guide
- 29 C.F.R. Part 541 — Exemptions
- 29 C.F.R. Part 778 — Overtime Compensation
