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Employment Law: Overtime Pay

Image by @Saigon

Image by @Saigon

Most people know that employers are required to pay overtime to employees who work extra. But, few people know the details of when employers must pay overtime and how much employees are entitled to. This article will take you through the basics of who is entitled to overtime, when they’re entitled to it, and how much they’re entitled to.


Most employees are covered by either Federal or State overtime laws.  However, the following categories of workers are left out: executive, administrative, and professional employees; some computer professionals, employees of some seasonal recreational industries; farm workers on small farms; and automobile salespeople. There are other exceptions, but these are the major ones.

One common issue in overtime cases is whether someone is an administrative, executive, or professional employee. It’s often hard to work out whether someone is covered by this or not, but here’s the general rule:

You are an administrative employee and not entitled to overtime if you are involved in management decision making and you use your independent judgment to carry out your job duties.

You are an executive/supervisor if you are a salaried employee who supervises at least two full-time employees and have the authority to hire and fire them.

You are a professional employee if you are a salaried employee who used knowledge gained through specialized study and are employed in the field you were trained in. Even if you’re not salaried, you may still be a professional employee if you are paid at least $27.63 per hour.


So, you’re an employee that’s covered by the overtime laws. Now what do you have to do to be entitled to overtime.

This is pretty simple: for most workers, you’re entitled to overtime when you work more than 12 hours in a day or 40 hours in a week. There are a couple of exceptions to this (some healthcare workers’ overtime is calculated based on a 14-day period rather than a 7-day work week for example), but other than that, it’s straightforward.

How Much?

Employees who are entitled to overtime must be paid time-and-a-half of their regular pay for the overtime they work.The regular rate of pay is the total amount you were paid for one work week divided by number of hours you worked. It includes shift differentials, non-discretionary bonuses, production bonuses, and commissions. But, business expenses, bona fide gifts, discretionary bonuses, employer investment contributions, vacation pay, holiday pay, sick leave, and jury duty are not included.

Ok, so there it is: the who, when, and how much of overtime pay.  Hit the comments section if you want to get in touch.