United States Laws on Overtime Pay

Some employees may have more than enough work that it forces them to stay in the office for more hours.  Under federal law, these excess hours (called overtime) should be paid by the employers.  The cost of providing overtime payment is half of an employee’s hourly rate.  This means that aside from the hourly rate a worker receives, half of the rate is added to determine the overtime pay for each employee.

However, not every employee is eligible to receive overtime pay, as it would still depend on your state’s law, job duties, and how many hours you have worked.

Scope and limitations

Not all employers are required to provide overtime pay to their workers.  As a general rule, a business that has US$500,000 or more in annual sales are required to give overtime pay. However, if the employer has a smaller worker population, his or her company is still covered by the Fair Labor Standards Act (FLSA) as long as they conduct interstate commerce-or doing business between states. 

Acts of committing interstate commerce include making phone calls to or from another state, sending mail out of state, or handling goods that have come from or will go to another state.  To know more whether your state is covered by the FLSA, call your state’s labor determent.


An employer covered by the FLSA must pay overtime to all eligible employees, except if they fit into an exception to the law.  Executive, administrative, and professional employees are exempted from taking overtime pay. The following employees are also exempted: volunteers, independent contractors, certain computer specialists, employees of organized camps, seamen, domestic baby sisters, and newspaper deliverers, among others.

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