Overtime

Overtime is additional pay owed to eligible employees when they work more than the number of hours set by applicable wage-and-hour law.

Under federal law, many nonexempt employees earn an overtime premium after exceeding the applicable weekly hours threshold, while some states have additional rules. Employers need accurate time records and correct employee classifications to calculate overtime properly. Policies should also explain approval procedures without suggesting that unapproved overtime can simply go unpaid when the law requires payment.

Frequently asked questions

Can an employer offer time off instead of overtime pay?

Compensatory time may substitute for cash overtime for eligible state and local government employees under specific FLSA conditions. Private-sector employers generally cannot use it to replace legally required overtime pay for covered nonexempt employees. Review the applicable rules before adopting a comp-time arrangement.