Overtime pay rules in 2026: what you're owed

Quick answer: Under the Fair Labor Standards Act, non-exempt employees must be paid 1.5x their regular rate for all hours over 40 in a workweek. The salary threshold for exemption in 2026 is $684/week ($35,568/year) -- employees earning below this must receive overtime regardless of job duties. "We don't pay overtime" is not legally valid for covered employees.

Overtime disputes are one of the most common wage complaints filed with the Department of Labor. Many employees do not know they qualify; many employers either do not know the rules or rely on workers not asking. The core rules are straightforward.

Who must be paid overtime

The FLSA divides workers into exempt and non-exempt categories.

Non-exempt employees must receive overtime pay for all hours over 40 in a workweek. Most hourly employees are non-exempt by default. Salaried employees earning less than $684/week ($35,568/year) are also non-exempt regardless of what duties their job involves.

Exempt employees are not entitled to FLSA overtime. To be classified as exempt, an employee must meet BOTH criteria:

1. Salary basis test: Paid a predetermined fixed salary not subject to reduction based on hours worked, at least $684/week.
2. Duties test: Job duties fall into one of the defined exempt categories below.

The "just because you're salaried" myth is widespread. A salaried employee earning $50,000/year is NOT automatically exempt. They must also pass the duties test.

The duties tests: who qualifies as exempt

Executive exemption: Primary duty is managing the enterprise or a recognized department. Regularly supervises two or more full-time employees. Has authority to hire, fire, or whose recommendations carry significant weight.

Administrative exemption: Primary duty is office or non-manual work directly related to management or general business operations. Must include the exercise of discretion and independent judgment on significant matters. Customer service reps, data entry clerks, and most administrative assistants typically do NOT qualify.

Professional exemption: Primary duty requires advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. Doctors, lawyers, engineers, CPAs, and teachers commonly qualify. Paralegals, lab technicians, and bookkeepers typically do not.

Computer employee exemption: Systems analysts, programmers, software engineers meeting specific salary or hourly rate thresholds ($27.63/hour or $684/week salary). Help desk staff and most IT support roles do not qualify.

Outside sales exemption: Primary duty is making sales away from the employer's place of business. Inside sales reps are not covered.

Highly compensated employees: Employees earning $107,432+ annually who perform at least one executive, administrative, or professional duty may be exempt under a relaxed duties test.

How overtime is calculated

The workweek rule: Overtime is calculated on a workweek basis, not a pay period basis. A workweek is any fixed, recurring 168-hour period (seven consecutive 24-hour periods). Your employer defines which day the workweek starts.

Regular rate: Overtime is paid at 1.5x the "regular rate," which includes not just hourly wages but also production bonuses, shift differentials, and most other non-discretionary compensation. Pure discretionary bonuses (not tied to any performance metric or promised in advance) are excluded.

Example: An employee earns $20/hour and works 48 hours in a week. Regular hours: 40 x $20 = $800. Overtime hours: 8 x $30 = $240. Total: $1,040.

Salaried non-exempt employees: If a salaried non-exempt employee (earning below the salary threshold) works overtime, their regular rate is calculated by dividing their salary by the hours the salary was intended to cover (typically 40), then paying 0.5x that rate for each overtime hour -- the "fluctuating workweek" method if applicable.

State overtime laws

Several states have stricter overtime rules than federal law:

• California: Overtime for hours over 8 in a single workday, double time for hours over 12 in a day. Also requires daily overtime, not just weekly.
• Alaska, Nevada, Colorado: Daily overtime rules.
• Various states: Higher salary thresholds for exemption.

Your employer must follow whichever law -- state or federal -- is more protective of the employee.

Common misclassification situations

"Manager" title without actual management duties: Giving an employee a manager title to justify exempt classification without actual supervisory responsibilities is a common misclassification. If you supervise fewer than two employees, do not hire or fire, and your primary duty is the same work as your team members, the executive exemption likely does not apply.

Non-discretionary bonus exclusion: Including bonuses in the overtime base calculation is required. If your employer pays a weekly productivity bonus and does not factor it into your overtime rate, that is a FLSA violation.

Comp time instead of overtime pay: Private sector employers cannot substitute compensatory time off ("comp time") for overtime cash payment. Government employers can offer comp time; private employers cannot. "We'll give you a day off next week instead of overtime" is not a valid FLSA practice in the private sector.

Off-the-clock work: Any time your employer knows about or reasonably should know about must be compensated. If you are checking work email at home, responding to client calls after hours, or staying late without clocking the time because you were asked not to, that time may be compensable.

For how overtime pay connects to your broader compensation and total earnings picture, see what is total compensation and how to read a pay stub.

What to do if you are not being paid correctly

1. Document the hours worked, including start and end times and any off-the-clock work. Keep records outside your employer's systems.
2. Research the relevant FLSA and state law for your role and industry.
3. Raise the issue with HR or payroll in writing, explaining the specific underpayment.
4. If unresolved, file a complaint with the Department of Labor's Wage and Hour Division (online at dol.gov/agencies/whd). The statute of limitations for FLSA claims is two years (three years for willful violations).
5. Consult an employment attorney. Many take wage and hour cases on contingency because the FLSA provides for attorney's fee awards.

Frequently asked questions

Can my employer require me to work overtime?

Yes -- most employers can require overtime work as a condition of employment and can discipline employees who refuse. You are entitled to be paid for it; you are not entitled to refuse it unless a state law or collective bargaining agreement provides otherwise.

Does overtime apply to part-time employees?

Yes. A part-time hourly employee who works more than 40 hours in a workweek is owed overtime for those excess hours. There is no "part-time" exemption from overtime.

My employer calls me "salaried exempt" but I earn $40,000. Do I qualify for overtime?

Possibly. You must meet BOTH the salary threshold ($684/week / $35,568/year) AND the duties test. At $40,000, you clear the salary threshold. Whether you are exempt then depends on whether your actual job duties qualify under the executive, administrative, or professional tests. If your primary duties do not fit, you may be misclassified as exempt.

What is the lookback period for unpaid overtime?

Under the FLSA, you can recover unpaid overtime going back two years (three years for willful violations). If you discover you have been underpaid, the clock has been running. Document what you can and act promptly.

Can overtime vary by industry?

Yes. Some industries have sector-specific rules -- motor carrier employees, railroad workers, and farm workers are governed by different regulations. If you are in a specialized industry, consult the relevant DOL wage guidance for your sector.

Paste your hours and compensation into SalaryCheck to understand how overtime factors into your total annual earnings.