FLSA Overtime Rules: A Simple Guide for Employers

The Fair Labor Standards Act (FLSA) is the federal law that sets the baseline for overtime pay in the US. If you employ people, understanding its overtime rules keeps you compliant and helps you avoid costly back-pay claims. This is a simple overview, not legal advice — always confirm specifics with the Department of Labor or an advisor.

The core rule: overtime after 40 hours

Under the FLSA, non-exempt employees must be paid overtime at at least 1.5× their regular rate for hours worked over 40 in a workweek. There's no federal daily overtime — it's based on the week, not the day (though some states add daily rules).

What a "workweek" means

A workweek is a fixed, recurring period of 168 hours — seven consecutive 24-hour days. It doesn't have to start Monday or align with your pay period; it just has to be consistent. Overtime is calculated per workweek, so each week stands on its own.

Who qualifies for overtime

Only non-exempt employees earn overtime. Exempt employees (who meet the salary basis, salary level, and duties tests) don't. Classification depends on how someone is paid and their actual job duties — not their title. Misclassifying a non-exempt worker as exempt is a common and costly error.

The "regular rate" isn't always the base wage

Overtime is 1.5× the regular rate, which can include more than the base hourly wage. Nondiscretionary bonuses, shift differentials, and certain other payments may need to be folded in, raising the rate the 1.5× applies to. Using only the base wage can under-calculate overtime.

What counts as hours worked

The FLSA counts more than just scheduled shift time. Compensable time can include:

• Required pre- and post-shift tasks (setup, cleanup)
• Required training
• Certain travel time during the workday
• Short rest breaks (typically paid)
• Time worked "off the clock" that the employer knew or should have known about

Record-keeping requirements

Employers must keep accurate records of hours worked and wages paid for non-exempt employees, and retain them for the required period. If overtime is ever questioned, those records are your defense — and their absence is a serious liability.

Stay compliant with accurate records

FLSA compliance rests on two things: correct overtime math and solid records. Timesheet Maker totals hours by workweek, applies overtime at your rate automatically, and keeps a clear, retained record — so overtime is calculated correctly and documented in case it's ever reviewed.

Frequently asked questions

When is overtime required under the FLSA? For non-exempt employees, overtime (at least 1.5× the regular rate) is required for hours worked over 40 in a workweek.

Does the FLSA require daily overtime? No. Federal overtime is based on the 40-hour workweek, not a daily limit. Some states have their own daily overtime rules.

What counts as hours worked? Scheduled shifts plus required training, certain pre/post-shift tasks and travel, short paid breaks, and off-the-clock work the employer knew about.

What records must employers keep? Accurate records of hours worked and wages paid for non-exempt employees, retained for the period the law requires. These are your evidence if overtime is disputed.

Get overtime compliance right

Pay 1.5× over 40 a week, classify correctly, use the true regular rate, and keep records. To automate overtime and record-keeping, try Timesheet Maker free.