The Basics of Overtime Law
The Fair Labor Standards Act (FLSA) requires employers to pay eligible workers 1.5 times their regular rate for every hour worked beyond 40 in a workweek. This applies to "non-exempt" employees. The key question is whether you are correctly classified as exempt or non-exempt.
The 2025 Salary Threshold
To be classified as "exempt" (not eligible for overtime), you must meet two tests:
- Salary basis test: You must earn at least $58,656 per year ($1,128/week) on a salary basis (2025 threshold)
- Duties test: Your primary duties must involve executive, administrative, professional, computer, or outside sales work
If you earn less than $58,656 on salary, you are automatically eligible for overtime regardless of your job duties. This threshold increase from $35,568 (pre-2024) has made millions of additional workers eligible for overtime.
How to Calculate Overtime Pay
| Scenario | Regular Rate | OT Rate (1.5x) | Weekly Pay (45 hrs) |
|---|---|---|---|
| $15/hour worker | $15.00 | $22.50 | $712.50 |
| $25/hour worker | $25.00 | $37.50 | $1,187.50 |
| $40/hour worker | $40.00 | $60.00 | $1,900.00 |
| $50,000 salary / 40 hrs | $24.04 | $36.06 | $1,141.35 |
Common Misclassification Traps
Many employers incorrectly classify workers as exempt to avoid paying overtime. Red flags that you may be misclassified:
- Your title says "manager" but you do not supervise anyone or make independent decisions
- You earn a salary under the threshold but are told you are not eligible for overtime
- You perform the same work as hourly coworkers but are classified differently
- Your employer calls you an "independent contractor" but controls your schedule, location, and methods
State Overtime Laws
Several states have overtime rules that exceed the federal standard:
- California — overtime after 8 hours in a day (not just 40 in a week), double time after 12 hours
- Alaska — overtime after 8 hours per day
- Colorado — overtime after 12 hours per day or 40 hours per week
- Nevada — overtime after 8 hours per day if hourly rate is less than 1.5x minimum wage
What to Do If You Are Owed Overtime
If you believe your employer owes you unpaid overtime, you can:
- File a complaint with the Department of Labor's Wage and Hour Division (free, no lawyer needed)
- Claims can go back 2 years (3 years if the violation was willful)
- You may be entitled to back pay plus an equal amount in liquidated damages
- Retaliation for filing a wage complaint is illegal under the FLSA
The DOL recovers hundreds of millions of dollars in unpaid overtime each year. If your employer is not paying you correctly, you are likely not the only affected worker.