FLSA Overtime Basics: Who Qualifies and How Hours Are Counted (with Regular-Rate Math & Travel/Telework Rules)
FLSA overtime basics: who qualifies and how hours are counted
The Fair Labor Standards Act (FLSA) requires covered, non-exempt employees to receive overtime pay of at least one-and-one-half times the regular rate for all hours worked over 40 in a workweek. A “workweek” is a fixed and recurring period of 168 hours (7 consecutive 24-hour days). Employers may set any start day and time, but once established it must remain consistent for compliance. Importantly, hours cannot be averaged across two or more weeks to avoid overtime. Federal law does not mandate premium pay for weekends or holidays by themselves; those hours count toward the 40-hour threshold like any other.
At a glance
- Overtime begins after 40 hours in the defined workweek.
- Overtime is computed with the regular rate (not just the base hourly rate).
- Job title and salary alone do not decide exemption—duties, salary basis, and salary level do.
- State laws and local ordinances may be more protective (e.g., daily overtime, higher salary thresholds).
Who qualifies: non-exempt versus exempt status
Most employees are non-exempt and therefore entitled to overtime. The FLSA contains specific “white-collar” exemptions—executive, administrative, and professional (EAP)—plus outside sales and certain computer employees. To qualify for an EAP exemption, an employer must satisfy three separate elements:
1) Salary basis
The employee receives a predetermined amount each pay period that is not reduced because of variations in the quality or quantity of work. Permitted deductions are narrow (for example, full-day absences for personal reasons, full-day disciplinary suspensions under a written policy, first or last week of work, or unpaid FMLA leave). If improper deductions are taken, the salary-basis test can be jeopardized.
2) Salary level
Under current federal rules, the salary level for most EAP exemptions is $684 per week (equivalent to $35,568 annually if paid on a 52-week basis). There is also a separate “highly compensated employee” (HCE) option with a much higher annual figure and a relaxed duties screen. Keep in mind that several states set higher thresholds that prevail within their borders.
3) Primary duties
The employee’s actual primary duties must meet the duties test for the claimed exemption. Job descriptions and titles are relevant but not controlling. Examples:
- Executive: primarily manages the enterprise or a department; customarily and regularly directs the work of at least two full-time employees (or the equivalent); and has authority to hire or fire, or recommendations carry particular weight.
- Administrative: office or non-manual work directly related to management or general business operations; exercises discretion and independent judgment on matters of significance.
- Professional: work requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction (e.g., lawyers, physicians, CPAs); or creative professionals whose work is original and creative in a recognized artistic field.
- Computer employees: certain systems analysts, programmers, software engineers (paid salary at or above the threshold or hourly at or above a special rate), performing specified high-level duties.
- Outside sales: primary duty is making sales or obtaining orders; customarily and regularly engaged away from the employer’s place of business; salary threshold does not apply to this category.
Non-exempt by nature: manual labor and “blue-collar” roles (e.g., construction, production, maintenance) are not EAP-exempt regardless of salary. Public-safety personnel (police, firefighters, EMS) have specific rules and are commonly non-exempt unless another exemption independently applies.
How overtime is calculated: the regular rate
The heart of FLSA overtime math is the regular rate. It is the hourly rate actually paid for the workweek and is calculated as total non-excluded remuneration divided by total hours worked in that week. Because the regular rate includes more than just base hourly pay, overtime is not always “1.5 × base rate.” Most nondiscretionary bonuses (e.g., production, attendance, measurable performance), shift differentials, piece-rate earnings, and commissions are included in the regular rate. Typical exclusions include discretionary bonuses (true, not promised), gifts, reimbursements for expenses, certain benefit plan contributions, payments for time not worked (vacation, holiday), and premium payments at or above time-and-a-half for work on specific days—when those premiums meet regulatory conditions.
Weighted-average method for multiple rates
If an employee works at two or more rates in the same week (for example, different jobs or shift differentials), the regular rate is a weighted average based on total straight-time pay divided by total hours.
Examples
Hourly plus production bonus. Suppose an employee earns $20/hour and works 46 hours. They also earn a $60 nondiscretionary production bonus. Straight-time earnings are 46 × $20 = $920. Add the bonus for total remuneration of $980. The regular rate is $980 ÷ 46 = $21.30. Overtime premium is paid at 0.5 × the regular rate for each overtime hour (because straight-time for those hours is already covered in the $980), so 6 × $10.65 = $63.90 in premium. Total due for the week: $1,043.90.
Salaried, non-exempt. Weekly salary is $1,000 and the employee works 50 hours. The regular rate is $1,000 ÷ 50 = $20.00. Overtime premium is 10 × $10.00 = $100. Total due: $1,100. Paying a salary does not make the position exempt; unless a valid exemption applies, overtime is owed.
Two rates in a week. The employee works 20 hours at $18/hr and 30 hours at $22/hr. Straight-time pay is (20 × $18) + (30 × $22) = $360 + $660 = $1,020. Total hours are 50, so the regular rate is $1,020 ÷ 50 = $20.40. Overtime premium is 10 × $10.20 = $102. Add the $1,020 straight time for a total of $1,122.
Practice tip: If your payroll system adds “time-and-a-half” on top of an overtime hour’s full base rate without first converting bonuses into the regular rate, it may underpay overtime. Audit nondiscretionary bonuses, commissions, and differentials each pay period.
What counts as hours worked
“Hours worked” includes all time an employee is required, suffered, or permitted to work. Employers must pay for work they know or should know is being performed, even if not requested or authorized. Sound policies, accurate timekeeping, and prompt correction of off-the-clock work are essential.
Rest breaks and meal periods
- Short rest breaks (typically about 5–20 minutes) are compensable and count toward overtime.
- Bona fide meal periods (generally 30 minutes or more) are not hours worked if the employee is completely relieved from duty—no required tasks, monitoring, or interruptions.
- These principles apply to remote work as well as on-site settings.
Training, lectures, and meetings
Attendance is part of hours worked unless all the following are true: it occurs outside normal hours, is voluntary, is not directly job-related, and the employee performs no productive work during attendance.
Waiting time and on-call
Waiting is work time when employees are engaged to wait—their time is primarily for the employer’s benefit and they cannot use it effectively for their own purposes. On-call arrangements are evaluated case by case. The more the restrictions (e.g., short response times, geographical limits, frequent call-ins), the more likely the time is compensable.
Travel time
- Ordinary home-to-work commute is not work time.
- Same-day out-of-town travel as a passenger is generally compensable, less the employee’s normal commute time.
- Job-site to job-site travel during the workday is compensable.
- Overnight travel is compensable when it occurs during the employee’s normal working hours, even on non-working days.
Pre- and post-shift activities
Activities that are integral and indispensable to principal work (for example, certain donning/doffing of required protective gear, or mandatory equipment checks) are hours worked. Truly preliminary or postliminary activities are not.
Telework and small increments of time
Employers must exercise reasonable diligence to track telework and pay for it. Employees should accurately record all work time; employers may rely on reasonable reporting procedures as long as they do not discourage truthful reporting.
Workweek definition reminder: The workweek is a fixed, repeating 7-day period. No averaging across weeks is allowed to reduce overtime liability.
Recordkeeping and pay-practice essentials
Employers must maintain accurate records of hours worked and wages paid. For non-exempt employees, that typically includes daily and weekly hours, regular rate computations when applicable, and additions to or deductions from wages. Good practice includes clear timekeeping policies, training for managers on approving and correcting time, and routine audits to catch rounding issues or off-the-clock work.
Rounding
Time-clock rounding to the nearest 5 minutes, tenth, or quarter hour can be permissible if, over time, it is neutral—that is, it does not systematically undercount actual work time. Many modern systems track to the minute, which reduces risk.
Compensatory time
In the private sector, “comp time” in lieu of overtime pay is generally not allowed. Public agencies have special rules that permit comp time under defined conditions and caps.
Quick guide (English)
- • Overtime triggers after 40 hours in a workweek; no daily federal overtime.
- • Most employees are non-exempt. Exemptions are narrow and require salary basis + salary level + duties.
- • Current federal salary level for most EAP exemptions is $684/week (states may set higher thresholds).
- • Regular rate includes nondiscretionary bonuses, differentials, piece-rate, and commissions.
- • Count short breaks, most training (unless 4-factor exception), job-site travel, and remote time you know or should know about.
- • Do not count ordinary commute or bona fide meal periods; rounding must be neutral.
- • Keep precise records; pay for all hours worked and address policy violations separately.
- • Always check state law for stricter rules (daily OT, meal/rest premiums, higher thresholds).
Reference table — exemption snapshot (federal)
| Category | Salary basis? | Salary level? | Core duties signal |
|---|---|---|---|
| Executive | Yes | Yes (most cases: $684/week) | Manages a unit, directs 2+ FTEs, hiring/firing authority or equivalent weight |
| Administrative | Yes | Yes | Office/non-manual work related to management or general operations; discretion & judgment |
| Professional (learned/creative) | Yes | Yes | Advanced knowledge in a field of science/learning, or original/creative work |
| Computer employee | Yes (or hourly alternative) | Yes (or hourly at special rate) | Specified systems analysis/programming/software engineer duties |
| Outside sales | Not required | Not required | Sales or orders, customarily away from employer’s place of business |
FAQ (English)
Does the FLSA require overtime after 8 hours in a day?
No. Federal law uses a weekly standard. Some states impose daily overtime—verify local rules.
Are salaried employees automatically exempt?
No. Salary alone is not enough. The salary basis, salary level, and primary duties tests must all be satisfied.
What salary level applies now for EAP exemptions?
The current federal salary level is $684 per week for most EAP categories. Always check for future federal updates and state-specific thresholds.
Do we have to pay for unauthorized overtime?
Yes. If work is performed and the employer knows or should know about it, it must be paid. Handle policy violations through counseling or discipline, not by withholding wages.
How do short breaks and meal periods count for remote workers?
Short breaks (about 5–20 minutes) are paid; bona fide meal periods (about 30 minutes or more) are not paid if the employee is fully relieved from duty. The same rules apply when teleworking.
Is commute time paid?
Ordinary home-to-work commuting is not paid. Job-site travel during the day and certain out-of-town travel are compensable under the rules explained above.
Can we round time entries to the nearest 15 minutes?
Yes, provided the rounding practice is neutral over time and does not systematically undercount hours.
Can private-sector employers give “comp time” instead of overtime pay?
Generally no. Comp time in lieu of overtime is restricted to public agencies under specific conditions.
What if an employee works at two rates in one week?
Use the weighted-average method to compute the regular rate and then apply the 0.5× overtime premium to hours over 40.
Are volunteers and interns covered?
True volunteer service for public agencies or charity is different from employment. For private employers, “unpaid intern” arrangements are narrow; evaluate carefully against DOL’s primary-beneficiary test to avoid misclassification.
Technical basis & legal references (English)
- 29 U.S.C. § 207 (overtime); 29 U.S.C. § 213 (exemptions); Portal-to-Portal Act (travel, preliminary/postliminary).
- 29 CFR Part 778 (regular-rate principles and overtime calculations).
- 29 CFR Part 785 (what counts as hours worked: training, travel, waiting, breaks, sleep time).
- 29 CFR Part 541 (EAP, computer, outside sales exemptions; salary basis/level; duties tests).
- 29 CFR Part 516 (recordkeeping).
- DOL guidance on telework, reasonable diligence in tracking remote time, and neutral rounding practices.
Because federal and state wage-hour rules evolve, confirm current thresholds and any state-specific requirements before making classification or pay-practice decisions.
Conclusion
Overtime compliance under the FLSA comes down to two pillars: classify correctly and count every compensable hour. Determine exemption status with the salary basis, salary level, and duties tests, remembering that most workers are non-exempt. Then, build robust timekeeping for both on-site and remote work, calculate the regular rate correctly when bonuses or multiple rates are in play, and apply the overtime premium after 40 hours in each fixed workweek. With consistent policies, clear manager training, and periodic audits, employers can pay employees accurately and reduce legal risk while employees receive the overtime pay the law requires.
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