Answer – March 27, 2012

Q: When must an employer pay overtime?

A:  Federal law requires employers to pay overtime to nonexempt employees when they work over 40 hours in a workweek.  States may, however, have daily addiitonal overtime requirements.


Federal law requires ovetime to be paid at time and one half the employee’s regular rate of pay.  The regular rate of pay is determined by adding the employee’s total compensation together and dividing by the hours worked in a week.  Examples of compensation that must be included in the regular rate are: on-call pay, production and incentive bonuses, comissions, shift differenatials, and piece-rate pay.



Only actual hours worked must be included in overtime.  Paid time off is not included.  Hours worked includes all time the employee is “suffered or permitted” to work such as: pre- and post-liminary activities, time spent waiting to work, unduly restricted on-call, breaks of less than 30 minutes,travel time, and sleeping time.



The employer sets its workweek for the purpose of caculating overtime. The workweek is a regualrly recurring period of 168 hours or seven consecutive 24-hour periods.  Employers can declare different workweeks for different locations, departments, or groups of employees.

If your company could benefit from a Wage and Hour audit, click here​.