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. Employees are eligible for 1.5x their regular rate of pay for any hours worked over 40 in a seven-day workweek. However, some states, like California, require overtime pay for hours worked over 8 in a day. If an hourly employee earns above the salary threshold ($684 per week) and performs job duties that qualify them for an exemption (e.g., executive or administrative roles), they may not be entitled to overtime pay. Employers must carefully evaluate both the employee’s salary and duties to determine their overtime eligibility. The new rule from the Department of Labor raises the threshold used to determine if a salaried worker is exempt from overtime pay.

Who Enforces Federal Overtime Law?

Some employers offer a flat rate for overtime hours, assuming it satisfies FLSA requirements as long as the total pay is sufficient. Many people believe that if someone is paid a salary instead of an hourly wage, they’re automatically exempt from overtime pay. A workweek is defined as a fixed and regularly recurring period of 168 hours—seven consecutive 24-hour periods. It can start on any day and at any hour, and employers can set different workweeks for different employees or groups. Federal overtime law is part of the Fair Labor Standards Act (FLSA), a cornerstone of U.S. labor law that ensures workers are treated fairly when it comes to pay, hours, and working conditions.

How Does the IRS Tax Overtime Pay? Are Overtime Taxes Going Away?

• This new rule could have significant consequences for workers and employers throughout the country.
• Labor advocates, however, remain firm in their support for the overtime law, ensuring equal rights for farm workers.
• Mt. Clemens states that when an employer fails to keep accurate time records, an employee can rely on reasonable estimations and inferences to prove the amount of overtime worked, but the burden of proving liability remains with the employee at all times.
• States like California have specific protections, such as the one-day rest rule, which prohibits employers from requiring employees to work more than six consecutive days in a workweek.
• The first part of the increase scheduled for July 1 follows the process for wage-threshold increases established in the 2019 rule, Jessica Looman, administrator of DOL’s Wage and Hour Division, said during a press call Tuesday.
• The exemption applies to roles like software developers and systems analysts but excludes general IT support or helpdesk workers.
• Questions and Answers about Overtime Pay – Answers questions ranging from when overtime pay is due and how many hours an employee may work.

The secretary leads the Labor Department and its agencies, including the Bureau of Labor Statistics, the Occupational Safety and Health Administration (OSHA) and the Office of Workers’ Compensation Programs. The department also enforces more than 180 federal labor policies and laws such as those pertaining to hourly and overtime pay u s. department of labor overtime pay, unemployment insurance and workers’ rights to safe working environments. Your total annual income, not your hourly and overtime rates, determines how much tax you pay. But when rules change unexpectedly and state rules clash with federal provisions, keeping up with overtime laws can sometimes feel like work. Long-standing practices–like paying overtime only after 80 hours of work, which is prevalent in the construction industry–further complicate matters. This 2025 guide covers updated rules, eligibility, and how to calculate overtime pay accurately.

FLSA Posters

She added that HR can ensure compliance by meeting the strictest AI standards, which will be in Colorado’s upcoming AI law. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here’s how employers and employees can successfully manage generative AI and other AI-powered systems. The raised salary-level thresholds may particularly burden small businesses, forcing some to choose between cutting jobs and raising prices, said Ted Hollis, an attorney with Quarles & Brady in Indianapolis. The final rule, which will affect millions of workers, is, as of 2025, an increase of nearly 65 percent. “It’s a very big jump,” said Natalie Bare, an attorney with Duane Morris in Philadelphia.

• The company violated the Fair Labor Standards Act (FLSA) by failing to pay workers for pre-shift activities like loading tools and traveling to worksites, which, when combined with onsite hours, exceeded 40 hours per week without overtime pay.
• These changes are expected to bring millions of workers throughout the country under the new threshold, securing time-and-a-half pay for many salaried workers for their overtime work.
• The DOL further states that overtime pay must be “at least one and one-half times” the rate of regular pay.
• An employer may not make deductions from an exempt employee’s pay for absences caused by the employer or by the operating requirements of the business.
• Here’s a detailed guide on how to compute overtime, complete with examples and tips to avoid common mistakes.

FederalSpecific Overtime Provisions for Manual Laborers

Effective July 1, the Fair Labor Standards Act’s (FLSA’s) annual salary-level threshold for white-collar exemptions to overtime requirements will increase from $35,568 to $43,888. The court’s opinion highlights the need for employees to provide specific and detailed evidence when pursuing claims for unpaid overtime, even when the employers fail to maintain accurate time records. But it is also a valuable reminder for employers about the importance of diligent recordkeeping, even if the ultimate burden of proof remains with the employee.

I.   Wages and Hours Worked

Verify their classification based on salary, payment type, and job duties. Salaried employees earning below $684 per week or not meeting the job duties test for exemptions are eligible for overtime pay. Under the Fair Labor Standards Act (FLSA), employees must meet specific salary thresholds to be considered exempt from overtime pay.

The overtime rule cleared White House review weeks ago, though, and one source told HR Dive at the time that its publication was expected at any moment. Labor advocates, however, remain firm in their support for the overtime law, ensuring equal rights for farm workers. He expressed his frustration with the legislation as he and 14 farm workers joined 300 others from across Eastern Washington to rally against the overtime law for the first time last year.