Under US federal law, non-exempt employees must get at least one and a half times their regular rate for every hour over 40 in a workweek. That's the floor. Some states go further: California also requires overtime after eight hours in a day and double time after 12. And outside the US the rules change completely, from Ontario's 44-hour week to the UK, where there's no legal overtime rate at all.
Overtime is one of the most searched employment topics because the rule people remember (time and a half after 40) is only the federal part of the picture. Which rule applies depends on the employee's status and where they work.
The federal rule: the Fair Labor Standards Act
The Department of Labor's Wage and Hour Division sets out the core of the FLSA overtime rule in a few lines:
- Unless exempt, covered employees must receive overtime pay for hours worked over 40 in a workweek, at a rate not less than time and one-half their regular rates of pay.
- There's no limit in the Act on the number of hours employees aged 16 and older may work in a workweek.
- The FLSA doesn't require overtime pay for work on Saturdays, Sundays, holidays or regular days of rest, unless overtime is worked on those days.
- Overtime earned in a workweek must normally be paid on the regular payday for that pay period.
Here's the detail that trips employers up: the workweek. The DOL defines it as a fixed and regularly recurring period of 168 hours, seven consecutive 24-hour periods. It doesn't have to match the calendar week, but averaging hours over two or more weeks isn't permitted. So 50 hours one week and 30 the next isn't an 80-hour fortnight with no overtime; it's 10 hours of overtime in week one.
Who counts as exempt is its own question. Our guide to exempt vs non-exempt employees covers the salary and duties tests, and our FLSA explainer covers the rest of the Act.
State overtime laws: California as the strictest example
States can set rules that are more generous than the federal floor, and when they do, the employee gets the better of the two. California's Labor Commissioner sets out the general rule for non-exempt employees aged 18 or over:
| Hours worked | California overtime rate |
|---|---|
| Over 8 hours in a workday, up to and including 12 | 1.5 times the regular rate |
| Over 40 hours in a workweek | 1.5 times the regular rate |
| First 8 hours on the seventh consecutive day of work in a workweek | 1.5 times the regular rate |
| Over 12 hours in a workday | Double the regular rate |
| Over 8 hours on the seventh consecutive day | Double the regular rate |
One more California rule worth knowing: overtime must be paid whether it was authorized or not. A policy saying 'no overtime without approval' lets you discipline someone for working unapproved hours, but it doesn't let you skip paying for them.
Overtime outside the US
| Country or province | When overtime starts | Legal overtime rate |
|---|---|---|
| US (federal) | Over 40 hours in a fixed workweek | At least 1.5 times the regular rate |
| California | Over 8 hours a day or 40 a week | 1.5 times, rising to double time |
| Ontario, Canada | Over 44 hours in a work week for most employees | 1.5 times the regular rate |
| UK | Whenever the contract says | No legal minimum rate; average pay must stay above the National Minimum Wage |
UK: no right to overtime pay
GOV.UK is blunt: employers don't have to pay workers for overtime. The one limit is that a worker's average pay for the total hours they work mustn't fall below the National Minimum Wage. Any overtime rate, and how it's worked out, comes from the employment contract. That's why two UK workers doing the same extra hours can be paid very differently.
Ontario: 44 hours, and no daily overtime
Ontario's Employment Standards Act guide says overtime begins after 44 hours in a work week for most employees, at one and a half times the regular rate. Unless a contract or collective agreement says otherwise, there's no daily overtime. Employers and employees can agree in writing to average hours over two to four weeks, or to bank overtime as paid time off at one and a half hours for each overtime hour. Managers and supervisors don't qualify if the work they do is managerial or supervisory.
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How to calculate overtime
- Fix the workweek. Choose the seven-day period and keep it consistent.
- Record every hour worked, including time before and after shifts that the employer allows or requires.
- Work out the regular rate for the week. For piece-rate or commission pay, California's Labor Commissioner divides total weekly earnings by total hours worked.
- Apply the higher of the federal and state rule for the hours over the threshold.
- Pay it on the regular payday for that period.
Workers in the US may also be able to deduct part of their overtime pay from federal income tax; our guide to no tax on overtime explains who qualifies.
The verdict
Treat the federal 40-hour rule as the minimum, then check the state or country where each employee works and apply whichever is more generous. The two mistakes that cost employers most are averaging hours across weeks, which the FLSA doesn't allow, and refusing to pay unapproved overtime, which California and federal law both expect you to pay. Record every hour and the rest follows.
Frequently asked questions
What is the federal overtime law?
Under the Fair Labor Standards Act, non-exempt employees must be paid at least one and a half times their regular rate for hours worked over 40 in a workweek.
Is overtime calculated daily or weekly?
Under federal law it's weekly, based on a fixed 168-hour workweek, and hours can't be averaged across two or more weeks. Some states, including California, also require daily overtime after eight hours.
Do employers have to pay overtime in the UK?
No. GOV.UK says employers don't have to pay for overtime, but average pay across all hours worked mustn't fall below the National Minimum Wage. The contract sets any overtime rate.
When does overtime start in Ontario?
For most employees, after 44 hours in a work week, at one and a half times the regular rate. There's no daily overtime unless a contract or collective agreement provides it.
