How federal overtime law works in the United States

The Fair Labor Standards Act of 1938 (the “FLSA”) is the federal statute that sets the baseline for overtime pay across the United States, codified at 29 U.S.C. §§ 201–219 and administered and enforced by the Department of Labor’s Wage and Hour Division (WHD). It applies nationwide to covered, nonexempt employees, regardless of which state they work in.

The core rule is short: covered, nonexempt employees who work more than 40 hours in a workweek must be paid at least one and one-half times their regular rate of pay for every hour beyond that 40. Everything else in this guide — exemptions, the regular-rate calculation, how states layer on top — is detail around that one sentence.

Federal overtime is triggered by the workweek, not the calendar week or the day. A workweek is a fixed, regularly recurring period of 168 hours — seven consecutive 24-hour periods. It does not have to match the calendar week and can start on any day, at any hour, but once set for an employee or group it stays fixed unless changed permanently and not to dodge the overtime rule.

The regular ratethe 1.5× is applied to is not just the posted hourly wage. It is built from total compensation for the workweek — base pay plus nondiscretionary bonuses, commissions, shift differentials and most other payments tied to the work performed — divided by the hours worked, subject to specific statutory exclusions. Getting that calculation wrong is the single most common way employers underpay overtime without realising it; the detailed method is set out in 29 CFR Part 778.

In plain terms: an exempt employee is one this floor does not cover — no overtime is owed — while a nonexemptemployee is one it does cover, entitled to 1.5× pay after 40 hours. Not every employee is entitled to the 40-hour overtime floor. 29 U.S.C. § 213 exempts several categories from both minimum wage and overtime requirements — most commonly the executive, administrative and professional (“EAP” or “white-collar”) exemptions, plus separate exemptions for computer employees and outside sales employees. Each requires passing both a duties test (what the job actually involves) and, except for outside sales, a salary test (how much and how the employee is paid) — job title alone never qualifies someone as exempt.

The $684/week ($35,568/year)EAP salary threshold is worth flagging as a moving target: the Department of Labor raised it to $844/week from July 2024 and $1,128/week from January 2025, a federal court in Texas vacated that 2024 rule nationwide in November 2024, and the Department’s May 2026 technical amendment formally restored the 2019 figures used above ($684/week for the EAP test, $107,432/year for the HCE test). Always confirm the current figure against the live regulation rather than a cached number.

Take a nonexempt employee paid a base rate of $20.00/hour who works 45 hours in a single workweek, with no bonuses or other pay to fold into the regular rate:

Notice what does not change the answer under federal law: it does not matter that Monday alone might have been a 10-hour day, and it does not matter which five calendar days the 45 hours fell on. Only the workweek total against the 40-hour line decides how much overtime is owed — federal law has no separate daily trigger of its own.

The FLSA is explicit that it sets a minimum, not a maximum. Its savings clause says no provision of the Act excuses noncompliance with any state or local law that sets a higher minimum wage or a lower maximum workweek than the federal one — and no employer may use the FLSA to cut a wage or extend hours that a state law already made more generous.

In practice, this splits state overtime law into two groups:

There is a second, quieter way state law raises the federal floor: because the regular rate the 1.5× multiplier applies to can never fall below the applicable minimum wage, a state with a minimum wage above the federal one raises the dollar value of every overtime hour even in a state that has not added any extra trigger of its own. Between the daily-trigger states and the higher-minimum-wage states, “what is the overtime rate here” genuinely has fifty different answers layered on the one federal law above — which is exactly why each state needs its own answer, not a single national rate.

States cluster below into the four US Census Bureau regions — Northeast, Midwest, South and West. A circle means the state follows the federal floor as-is; a square means it sets its own overtime rules that diverge from that floor — hover or tap a state for its status.

Because the real answer for any US employee depends on the federal floor plus whatever their state adds on top, In A Tick does not ship a fixed, one-size US rate set — there is no built-in US ruleset in the product today. Instead you configure your own premiums— the federal 40-hour/1.5× rule, and any state daily trigger or higher rate that applies — as custom region rules, and the overtime calculation engine buckets and stacks them deterministically. The same timesheet always produces the same result: pay is never left to guesswork or to AI.

What In A Tick enforces regardless of which state’s rules apply: accurate capture of the hours actually worked from real clock times, a complete audit trail of how every figure was reached, and a deterministic, payroll-ready calculation you can hand to whoever runs pay. We expect to help teams model individual state rulesets — starting with the states that diverge most from the federal floor — down the line.