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A Guide to US Overtime Pay Laws By State (2024)

US Payroll
Legal & compliance

Author

Shannon Hodgen

Published

June 06, 2024

Last Update

July 16, 2024

Table of Contents

Federal overtime pay laws

State overtime pay laws

Variations in overtime eligibility across sectors

Combining state overtime laws with FLSA

Consequences of overtime non-compliance

Best overtime compliance practices for employers

Achieve overtime compliance with Deel

US overtime pay laws are legal guidelines that require employers to pay eligible employees a higher rate when they work longer than the standard workweek. These guidelines protect workers from exploitation and ensure non-exempt employees get paid fairly for additional work.

Although the federal government regulates overtime pay, many states have their own overtime laws. As an employer, you must understand and follow these laws to avoid penalties.

Fortunately, many of these guidelines are easy to understand. Below, we have compiled a handy guide detailing all the federal and state overtime pay laws you must comply with to remain fully compliant. 

Note: This content should not be considered legal or tax advice. Rates and regulations in this guide are accurate as of June 2024—check with the local authorities in your state to ensure compliance.

Federal overtime pay laws

According to the US Department of Labor (DOL), overtime laws in the US are established under the Fair Labor Standards Act (FLSA). The FLSA dictates wage and hour guidelines for most US employers and employees. Here is a look at who and what it covers: 

Calculating overtime pay

The FLSA entitles eligible employees to overtime pay at time and half their regular hourly wage. Simply put, you must pay employees 1.5 times their hourly wage for every hour of overtime they give you.

Overtime is calculated as each hour worked over the 40-hour standard workweek. A workweek is defined as seven consecutive days, not necessarily aligning with the calendar week, or 168 hours. To establish a workweek, count 7 days or 168 hours of an employee’s fixed or regularly occurring schedule.

The FLSA does not limit the number of overtime hours employees can work in a workweek. It also does not mandate you to pay overtime for work done on holidays, Saturdays, Sundays, or days of rest. This is unless the employee works overtime on these days as well.

Stay compliant with Deel

Deel's Compliance Hub updates you on local laws, including minimum wage, overtime rates, and termination requirements.

Our always-on support helps you stay on top of state and federal requirements to implement changes as your business grows.

Exempt employees

Some employees are exempt from overtime pay under the FLSA, including executive, administrative, and professional (EAP) employees.  

However, on April 23, 2024, the DOL announced a final rule to revise and update the regulation for those workers, which will take effect July 1, 2024. This means that most standard salaried workers who earn less than $844 USD per week (up from $684) will become eligible for overtime pay. 

The rule also increases the highly compensated employee's total annual compensation threshold to $132,964 (up from $107,432).

It also includes a mechanism that provides updates of these earnings thresholds to reflect current earnings data: An additional increase will take effect January 1, 2025, then again every three years, starting on July 1, 2027.

Some labor laws prevent agricultural sector workers, salespeople, vehicle drivers, and seasonal workers from earning overtime. Exemptions may also apply to specific positions and job titles, including:

  • Computer professionals
  • Mechanics, driver’s helpers, and loaders
  • Staff at recreational establishments
  • Small-farm workers
  • Commissioned sales employees

Learn more: What is an exempt employee?

Non-exempt employees

A non-exempt employee is an employee eligible to receive overtime pay. Some jobs and industries are typically classified as non-exempt under the FLSA. They include:

  • Retail
  • Restaurants
  • Cleaning companies with hourly staff
  • Service businesses

Learn more: What is a non-exempt employee?

Because the FLSA covers the entire country, always consult a payroll expert for accurate information on handling wage requirements in your state.

Deel PEO and Deel US Payroll are designed to help you handle HR operations and maintain payroll compliance at the state and federal levels.

State overtime pay laws

About half the states and jurisdictions in the country default to the federal law. In these states, you must provide overtime pay for hours employees work above the 40-hour workweek at a 1.5 rate.

They include:

Wisconsin, West Virginia, Washington, Vermont, Rhode Island, Puerto Rico, Pennsylvania, Oregon, Ohio, North Dakota, North Carolina, New York, New Mexico, New Jersey, New Hampshire, Montana, Missouri, Michigan, Massachusetts, Maryland, Maine, Kentucky, Indiana, Illinois, Hawaii, District of Columbia, Connecticut, and Arkansas.

See also: Pay Transparency Laws in the US – A Definitive Guide

Some states, however, impose state-specific exceptions. Here is a closer look:

States with laws different from the FLSA

California

California is the only US state with double-time pay rules. As an employer in California, you must pay employees one-and-a-half times their regular pay as stipulated under the FLSA. You must also pay employees double their regular hourly rate if they work:

  • 8 hours on the 7th consecutive workday in a workweek
  • 12 hours in a workday 

Colorado

Overtime pay laws in Colorado generally align with the FLSA. However, the state is unique in that employers must pay overtime for hours an employee works during a single workday over:

  • 12 hours per workday
  • 12 consecutive hours regardless of when the shift started or ended

Some employees are also exempt in Colorado that are not in other states, including:

  • Employees of the ski industry
  • Employees who provide food and beverage services at on-mountain establishments
  • Retail or service industry employees who earn more than 75% of their salary from commissions
  • Medical transportation employees scheduled to work 24-hour shifts 

New York

In New York, employers must provide premium pay for overtime work at FLSA standards. However, state labor laws extend the workweek to 44 hours for certain domestic or residential workers. They also qualify some sectors for overtime that are exempt under the FLSA, including:

  • Private schools

  • Charter schools

  • Not-for-profit corporations

  • Non-teaching staff at school districts

New York labor laws do not cover local, state, or federal government employees. The exempt salary threshold is also higher in New York, at $1,200 per week or $62,400 per year.

Nevada

In Nevada, employers must provide overtime at 1.5 pay to employees who work more than 40 hours in a workweek (in line with federal law). Employees may also receive daily overtime pay if:

  • They work more than 8 hours in a work day, and
  • Their regular wage is less than 1.5 times the Nevada minimum wage rate

You must consider the minimum wage rate together with qualified health benefits where they apply. This means that, currently, employees who qualify for daily overtime pay in Nevada earn less than:

  • $14.25 per hour (with healthcare)
  • $15.75 per hour (without healthcare)
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States with industry-specific overtime rules

Alaska

The overtime pay rules in Alaska are very similar to the federal law. However, the employees covered vary in some ways from the FLSA. Under the Alaska Wage and Hour Act, employees who engage in agricultural and aquatic work are exempt. This includes agricultural workers, workers who handpick shrimp, and employees involved in the taking of aquatic life. Alaska state law also does not cover employers with fewer than four employees.

See also: A guide to PEO in Arizona

Washington

Unlike Alaska, Washington has overtime protections for agricultural workers, including piece-rate employees. Starting January 1, 2024, non-dairy agricultural employees in the state have been eligible for overtime compensation for hours worked over 40 hours. Dairy agricultural workers have been eligible. Other usually-exempt employees who may be eligible for overtime pay in Washington include:

  • Commissioned retail or service employees (only if commissions account for more than half their weekly wage)
  • Bus and truck drivers (only if the Washington Department of Labor & Industries approves their employer) 
  • Police and firefighters (only when they work certain hours)

The exempt salary threshold in Washington is higher than the FLSA rate, at $1,320 per week or $67,724 per year as of January 1, 2024.

Oregon

Oregon’s overtime pay laws are similar to FLSA regulations except for special rules that apply to:

  • Some agricultural employers
  • Canneries
  • Hospitals
  • Manufacturing companies
  • Public works projects
  • Government agencies

While other non-exempt employees receive overtime for work done over 40 hours, the standard workweek for agricultural workers in Oregon is 55 hours. Some agricultural workers are also exempt, including:

  • Workers who work in livestock range production
  • Migrant hand harvesters 16 or younger are paid at the same piece rate as workers over 16
  • Local hand pruning and harvest piece-rate workers who worked less than 13 weeks the previous calendar year
  • Members of an employer's immediate family

In 2022, new legislation was passed in Oregon that prohibits bakery and tortilla factory employers from taking adverse action against employers who refuse to work mandatory overtime. This is unless the employer had notified the employee about the shift at least five days in advance. 

States with unique overtime pay calculation methods

Pennsylvania

Pennsylvania previously allowed employers to calculate overtime using the fluctuating workweek method. However, the Pennsylvania Supreme Court ruled this method unfair in 2019 and prohibited it under state law. Calculations now default to federal law. The fluctuating week calculation method is also prohibited or limited in six other states, including:

  • New Jersey
  • Alaska
  • New Mexico
  • California
  • Connecticut
  • Montana

Connecticut

In addition to the regular overtime pay rate (1.5 times the regular rate for hours above 40 in a workweek), Connecticut has unique calculations for different overtime scenarios.

For salaried non-exempt employees, the regular rate is calculated as the salary divided by the number of hours the salary is intended to compensate. This regular rate is then multiplied by the number of overtime hours worked and the standard 1.5 overtime rate.

If a salaried employee’s regular hours are less than 40, they are paid their regular rate for every hour up to 40 and then 1.5 times their regular rate for every hour after 40.

For employees who are paid commissions, overtime is calculated similarly to the federal law. Commissions earned must be included in the regular hour rate. However, they only receive overtime pay at half their commission rate for every overtime hour (plus 1.5 times their regular rate).

Variations in overtime eligibility across sectors

Some state overtime pay laws qualify employees for overtime pay who are otherwise exempt under the FLSA. West Virginia, for instance, protects veterans from exemption regardless of the job. Pennsylvania law mandates you pay computer professionals overtime, although they are federally exempt.

Other states have differing overtime laws for the same sector. In Rhode Island and Arkansas, emergency responders like EMTs, firefighters, and police officers are exempt from overtime. This same group of employees may receive compensatory time in Texas and Ohio. 

Many states also exempt more employees from overtime than the FSLA. A few notable examples include:

  • Colorado: Property managers, interstate drivers, students working in sororities, fraternities, or work-study programs, machine loaders
  • Illinois: Employees in companies with three or fewer employees, salespersons, and mechanics in vehicle companies, staff members in religious organizations 
  • California: Student nurses, drivers, certain journalists, actors

For the most part, however, most states defer to the FLSA.

See also: How to select an employee benefits provider in 9 steps

Combining state overtime laws with FLSA

You must default to the federal law if your state does not have overtime laws. If your state does have its own overtime laws, add these laws to FLSA regulations when drafting your payroll policy. As a general rule of thumb, however, always follow the law that benefits employees most.

If you have remote workers working in different states, calculate their overtime based on the laws of the state where they are physically located. Do this even when your company is located in a different state.

Consequences of overtime non-compliance

The US government has laws in place to protect employees from workplace exploitation. As it concerns overtime pay, willful or repeated violation of US overtime pay laws carries a civil money penalty of up to $1,000 per violation. The FLSA also maintains the right to effect the following penalties:

  • Payment of back wages supervised by wage and hour
  • A legal suit for back wages and damages brought by the Secretary of Labor
  • A private suit for back pay, damages, court costs, and attorney fees brought by the unpaid employee
  • An injunction to restrain an employer from violating the FLSA obtained by the Secretary of Labor

See also: 7 strategies to reduce payroll tax management risks

Best overtime compliance practices for employers

Civil money penalties, lawsuits, and prosecutions can ruin your brand’s reputation. If employees or the US government fault you for breaching overtime laws, you may have trouble attracting employees and clients, losing your credibility. You can avoid this problem altogether by:

  • Staying informed about state and federal overtime laws and how they impact compliance
  • Regularly reviewing and updating your payroll policies in line with current regulations
  • Training your employees on overtime practices and regulations to promote awareness
  • Leveraging payroll and compliance technology, such as overtime tracking for accurate overtime management and reporting
  • Establishing clear and consistent channels for requesting and approving overtime

When it comes to US payroll, the amount of money saved exceeds thousands of dollars since we didn't have to hire consultants to set up and maintain our payroll. We can just do it ourselves through Deel's easy-to-use all-in-one global platform.

Amir Podensky,

CEO & Co-founder, Strada

Achieve overtime compliance with Deel

State and federal FLSA overtime pay laws exist to protect employees from being overworked and underpaid. As an employer, overtime helps you maintain a happy and productive workplace.

The differences between state and federal overtime pay laws may present a compliance hurdle. To avoid penalties and lawsuits, you must proactively review and update your payroll policies.

Deel's payroll experts and compliance tools monitor overtime regulation changes and bolster your internal processes to protect you from legal pitfalls. 

Whether you are hiring locally, across states, or internationally, we want to help you identify and address overtime compliance issues before they threaten your business.

Book a demo to talk to an expert about our Deel PEO and Deel US Payroll services.

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