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Overtime Pay: Answers to Frequently Asked Questions

Frequently Asked Questions

1.    Q. Who is entitled to overtime pay under federal law?
A. Most employees covered by the Fair Labor Standards Act ("FLSA") must be paid at least one and one-half times their regular rate of pay for any hours they work beyond 40 in a workweek. An employer who requires or permits an employee to work overtime is generally required to pay the employee premium pay for such overtime work.

2.    Q. Who is covered by the Fair Labor Standards Act (FLSA)?
A. The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.


Generally, employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more are covered by the FLSA. In addition, employees of certain businesses are covered by the FLSA regardless of the amount of gross volume of sales or business done. These businesses include: hospitals, businesses providing medical or nursing care for residents; schools (whether operated for profit or not for profit); and public agencies.

3.    Q. Does the FLSA and the Department's proposed overtime rule for white collar workers apply to state or local government workers?
A. Yes, state and local government employers are subject to the FLSA and the Department's proposed regulations concerning white collar employees.

4.    Q. Is there a small business exemption from the FLSA or the Department's proposed overtime rule for white collar workers?
A. The FLSA does not provide an exemption for small businesses. Generally, the FLSA and the proposed rule apply to employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more, and certain other businesses. The FLSA creates a level playing field for businesses by setting a floor below which employers may not pay their employees.

5.    Q. Is there an exemption for non-profit organizations from the FLSA or the Department's proposed overtime rule for white collar workers?
A. There is no exemption for non-profit organizations under the FLSA or in the proposed rule. Thus, the proposed rule may impact non-profit organizations having an annual dollar volume of sales or business done of at least $500,000. In determining coverage, only activities performed for a business purpose are considered and not charitable, religious, educational, or similar activities of organizations operated on a non-profit basis where such activities are not in substantial competition with other businesses.

6.    Q. How is overtime pay determined?
A. Unless exempt, employees covered by the FLSA must receive overtime pay for all hours worked over 40 in a workweek at a rate not less than one and one-half times their regular rates of pay.

7.    Q. What are the white collar exemptions to the FLSA?
A. The FLSA's white collar exemptions exclude certain executive, administrative, and professional employees from federal minimum wage and overtime requirements. Certain computer professionals and outside sales employees are also excluded from these requirements.

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Frequently Asked Questions