Overtime Rules: When You Must Pay Time and a Half

The federal rule

Who: non-exempt employees. Exempt employees are not owed overtime (see exempt vs non-exempt).
When: every hour worked over 40 in a workweek.
How much: at least one and a half times the employee's regular rate of pay.
Payday: overtime earned in a workweek must be paid on the regular payday for that pay period.
No waivers: an employee cannot agree to give up overtime, even in writing.

The FLSA does not require extra pay for working on Saturdays, Sundays or holidays as such. Those hours only earn overtime if they push the week past 40, unless your state or your own policy says otherwise.

What counts as a workweek

A workweek is a fixed and regularly recurring period of 168 hours: seven consecutive 24-hour periods. It can start on any day and at any hour, but once you set it, it stays put. Each workweek stands alone, and averaging hours over two or more weeks is not allowed.

Example: an employee works 45 hours one week and 35 the next. Even on a two-week pay period, they are owed 5 hours of overtime for the first week. The short second week does not cancel it out.

The regular rate includes more than the hourly wage

Overtime is based on the regular rate, which is total pay for the workweek (minus a few excluded items) divided by total hours worked that week.

What goes into the regular rate
Included	Excluded
Hourly wages and salary for non-exempt staff	Discretionary bonuses, where both the decision to pay and the amount are up to you
Nondiscretionary bonuses, such as promised performance or attendance bonuses	Gifts and special-occasion payments
Shift differentials	Pay for vacation, holidays, sick leave and other paid time off
Commissions	Business expense and travel reimbursements

Example: an employee earns $20 an hour, works 45 hours, and earns a $90 nondiscretionary bonus that week. Straight-time pay is $900 plus $90, or $990. The regular rate is $990 divided by 45 hours, which is $22. They are owed an extra half of $22 ($11) for each of the 5 overtime hours, $55, for a total of $1,045. Leaving the bonus out would underpay overtime.

Comp time is not allowed for private employers

Giving time off later instead of paying overtime (compensatory time, or "comp time") is only allowed under special rules for state and local government employers. DOL lists granting comp time in place of overtime pay as a typical violation by new businesses. Colorado says the same in its own rules. A private employer has to pay the overtime in cash.

States with daily overtime

Where state law is more generous, it applies on top of the federal 40-hour rule. These states pay overtime based on hours in a day:

Daily overtime rules
State	Time and a half	Double time
California	Over 8 hours (up to 12) in a workday, over 40 in a workweek, and the first 8 hours on the seventh consecutive day of work in a workweek	Over 12 hours in a workday, and over 8 hours on the seventh consecutive day of work in a workweek
Colorado	Over 40 hours in a workweek, over 12 hours in a workday, or over 12 consecutive hours	None
Alaska	Over 8 hours in a day or 40 in a workweek, for employers with 4 or more employees	None

A few other states have their own overtime rules too, so check your state labor department. See the state pages for California and Colorado.

Records and common mistakes

For every non-exempt employee, keep the hours worked each day, total hours each workweek, the regular rate, overtime earnings and total pay each period. Keep payroll records at least 3 years and time cards 2 years. Any timekeeping method is fine as long as it is complete and accurate.

Treating salaried employees as exempt without checking the duties and salary tests.
Not paying for all hours worked, like setup, cleanup, inventory or paperwork outside the scheduled shift.
Averaging hours across two weeks of a pay period.
Leaving nondiscretionary bonuses or commissions out of the regular rate.
Offering comp time instead of overtime pay.

One tax change to know: for tax years 2025 through 2028, employees can deduct up to $12,500 ($25,000 if married filing jointly) of qualified overtime pay, meaning the "half" in time and a half, on their federal income tax return. Employers report qualified overtime on Form W-2. Overtime is still subject to Social Security, Medicare and FUTA tax.

Common questions

Do I have to pay overtime for weekend or holiday work?

Not under federal law. The FLSA only requires overtime for hours over 40 in a workweek, so weekend or holiday hours earn overtime only if they push the week past 40, unless state law or your policy says otherwise.

Can an employee agree to skip overtime pay?

No. The FLSA overtime requirement cannot be waived by agreement between the employer and the employee.

Do salaried employees get overtime?

Salaried non-exempt employees do. Only employees who pass the salary basis, salary level and duties tests are exempt.

Can I give comp time instead of overtime?

Not as a private employer. Comp time in place of overtime pay is only allowed under special rules for state and local governments.

How MambaHR handles this

MambaHR answers federal and state overtime questions with the law cited and sends anything unclear to a person. Every hire, raise, leave and exit becomes a payroll change, sent as a change file to your current provider or to Deel-managed payroll (Powered by Deel), and a person approves every payroll run.

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Sources

Last reviewed October 2, 2026. This page is general information, not legal advice. Laws change and exceptions apply, so check the sources above or an employment lawyer before you act on a specific case.