Overtime pay is the most-litigated area of US employment law, and the rules are simpler than employers pretend. The federal Fair Labor Standards Act (FLSA) mandates that non-exempt employees receive at least 1.5× their 'regular rate of pay' for every hour worked over 40 in a workweek. That's it — no daily overtime, no weekend premium, no holiday pay required. States can (and many do) impose stricter rules, but they can never weaken this floor.

The 'regular rate' is where employers most often shortchange workers. It's not just your base hourly wage — it must include non-discretionary bonuses, production bonuses, commissions, shift differentials and even the fair value of some fringe benefits. If you receive a $500 quarterly attendance bonus and work overtime, your OT rate for that quarter should be recomputed higher. Most payroll systems don't do this automatically; check your paystubs.

Who qualifies as non-exempt is more complex than most workers realise. Salaried does not equal exempt. To be exempt, an employee generally must be paid on a salary basis of at least $684 per week ($35,568 per year), AND perform specific executive, administrative, professional, computer or outside-sales duties. A 'manager' who spends most of their day doing the same work as their team is usually non-exempt regardless of title. Misclassification is one of the largest sources of wage theft in America.

California layers substantial additional protections. Overtime kicks in after 8 hours per day (not just 40 per week), and double-time applies after 12 hours per day or after 8 hours on the seventh consecutive workday. Alaska, Nevada, Puerto Rico and a handful of other jurisdictions have similar daily OT rules. If you work in one of these states, always compute both daily and weekly overtime — the higher number applies.

Holiday and weekend work is not automatically premium pay under federal law. If your employer offers 'time-and-a-half on Sundays' or 'double-time on Christmas', that's a benefit, not a legal right. Union contracts and state laws in a few jurisdictions may require it. When taking a new job, always ask whether holiday premiums are part of written policy or discretionary — the difference is worth thousands per year for hourly workers.

Private-sector employers cannot offer 'comp time' instead of paying overtime. Every hour over 40 must be paid in cash at 1.5× within the normal pay period. Only public-sector (state and local government) employees can bank comp time at 1.5 hours per OT hour, up to 240 hours. If your private-sector boss tells you 'take a day off next week instead', that's illegal — document it and file a complaint with the Department of Labor Wage and Hour Division. Use this calculator to verify every paystub and to model whether extra OT hours are worth the extra tax bracket you may cross.