Overtime pay requirements of the FLSA

This fact sheet provides general information concerning the application of the overtime pay provisions of the FLSA.


An employer who requires or permits an employee to work overtime is generally required to pay the employee premium pay for such overtime work.


Unless specifically exempted, employees covered by the Act must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, as such.

The Act applies on a workweek basis. An employee's workweek is a fixed and regularly recurring period of 168 hours -- seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks 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 workweek must be paid on the regular pay day for the pay period in which the wages were earned.

The regular rate of pay cannot be less than the minimum wage. The regular rate includes all remuneration for employment except certain payments excluded by the Act itself. Payments which are not part of the regular rate include pay for expenses incurred on the employer's behalf, premium payments for overtime work or the true premiums paid for work on Saturdays, Sundays, and holidays, discretionary bonuses, gifts and payments in the nature of gifts on special occasions, and payments for occasional periods when no work is performed due to vacation, holidays, or illness.

Earnings may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings. This is calculated by dividing the total pay for employment (except for the statutory exclusions noted above) in any workweek by the total number of hours actually worked.

Where an employee in a single workweek works at two or more different types of work for which different straight-time rates have been established, the regular rate for that week is the weighted average of such rates. That is, the earnings from all such rates are added together and this total is then divided by the total number of hours worked at all jobs. In addition, section 7(g)(2) of the FLSA allows, under specified conditions, the computation of overtime pay based on one and one-half times the hourly rate in effect when the overtime work is performed. The requirements for computing overtime pay pursuant to section 7(g)(2) are prescribed in 29 CFR 778.415 through 778.421. 

Example of how to use the weighted average method:

An employee works 40 regular and 4.5 overtime hours at $10 per hour for clerical work at the office. During the same workweek, she also works eight hours at $8 per hour answering the phone at her house, resulting in 52.5 total hours worked at both jobs during the workweek.

If you are using the weighted average method, you would take her earnings from the clerical job (44.5 hours at $10/hour, or $445.00) plus her earnings from answering the phone at home (8 hours at $8/hour, or $64.00), to get a total of $509.00. You then divide the total earnings by the total hours ($509.00 / 52.5) to arrive at the weighted average regular rate of $9.70 per hour. Now, remember that the total earnings of $509.00 represent the straight-time pay she has earned for the 52.5 hours, i.e., she has already been paid straight time for those hours, and so she only needs half-time for the 12.5 overtime hours to bring her up to the required time and a half. Half-time for the weighted regular rate is $4.85/hour, so multiply that times the 12.5 overtime hours and add it to the straight-time pay to get the total pay for the workweek. That would be $4.85 times 12.5, or $60.63, and that added to $509.00 equals $569.63, the total pay including overtime. A mistake sometimes made is to compute the weighted average correctly, but then apply it erroneously, such as by taking the weighted average, multiplying it by 1.5, and then multiplying that times the number of overtime hours worked and adding that to the straight-time pay. Such a calculation ($509.00 plus 12.5 hours at $14.55 per hour) would result in a figure of $690.88, which would actually result in a large overpayment. The first thing to remember is that when you do a weighted average, it is as if you are pretending that she really worked "x" number of hours at the weighted average rate. The second main thing to keep in mind is that the weighted average times the number of hours worked equals the total straight-time earnings for the workweek, and an employee only needs to be paid the straight time once. Any time you use an overtime calculation method that depends upon a total straight time figure, the overtime hours will be paid at "half time", instead of time and a half. A similar situation exists in the case of employees who are paid a fixed salary for fluctuating workweeks. The salary in that particular case is considered to be straight-time pay for all hours worked, so the overtime hours only need to be compensated at half-time to bring the person up to time and a half. You can use the calculator below to see how the weighted-average regular rate of pay is calculated and how it affects the overtime pay and gross pay for a workweek (note: you must have JavaScript enabled in your browser to use the calculator below; this utility is not intended to be a substitute for the advice or assistance of a payroll professional, nor is it an official pay calculator - it is here only to help illustrate the principles behind the overtime pay calculation when the weighted-average method applies):

Please download the FLSA document attached to this article for more examples.


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