Overtime Laws: Federal and State

Last Updated: Aug 17, 2015 01:03PM EDT
Knowing the overtime laws that apply to your business is crucially important in making sure you are operating in accordance with state and federal regulations. The following is a brief overview of the laws that state the circumstances under which overtime is owed, to whom overtime is owed, and at what rate overtime is owed. 
 
Federal Overtime Pay Laws

 
  • According to the Fair Labor Standards Act (FLSA) most employees are entitled to overtime pay after exceeding 40 hours in a work week (see nonexempt employees here). 
  • Employers are required to pay these employees a rate not less than one and one-half times their regular rates of pay.
  • Employees working on Saturdays, Sundays, holidays, nights, and regular days of rest are not entitled to overtime pay for working on these days unless they have already exceeded working 40 hours in the work week.
  • Extra pay for working nights, weekends, or any of the aforementioned days is a matter of agreement between an employer and their employees. 
  • The work week is defined as a fixed and regularly recurring period of seven consecutive 24-hour periods. 
  • The work week can begin on any day and at any hour of the day, and does not need to coincide with the calendar week as long as it consists of seven consecutive 24-hour days. 
  • Different work weeks may be established for different employees or groups of employees.
  • Averaging of hours over two or more weeks is not permitted.
  • Normally, overtime pay earned in a particular work week must be paid on the regular pay day for the pay period in which the wages were earned.
  • Federal and most state laws operate by a weekly overtime standard stating that employers must pay employees overtime for hours exceeding 40 in a work week. There is no federal law limiting how many hours an employee can work in a day. However, some state laws operate on a daily standard, such as California.

State Overtime Pay Laws
 
Many states have their own overtime laws. California and a few other states have a daily overtime standard. Where an employee is subject to both the state and Federal overtime laws, the employee is entitled to overtime according to the higher standard (i.e., the standard that will provide the higher rate of pay).
 
 
California Overtime Pay Laws

 
  • According to California state laws, nonexempt employees 18 years of age and older are entitled to overtime pay at a rate of one and one-half times their regular rate of pay for every hour worked over 8 hours in a work day and 40 hours in a work week.
  • Employees working past 8 hours up to 12 hours in a work day are entitled to time and a half. For the first eight hours worked on the seventh consecutive day of work in a work week, employees are also entitled to time and a half.
  • Employees are entitled to double their regular rate of pay for all hours exceeding 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a work week.
 
There are a number of
 exceptions to the general overtime law stated above.

 
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