Last reviewed: July 4, 2026 | By US Legal Brain Editorial Team
The Fair Labor Standards Act (FLSA) is the federal law that governs minimum wage, overtime pay, recordkeeping, and child labor. It covers most employers with annual revenue of $500,000 or more, as well as hospitals, schools, and government agencies.
Under the FLSA, non-exempt employees must receive overtime pay at 1.5 times their regular rate of pay for all hours worked over 40 in a workweek. A workweek is defined as a fixed, recurring period of 168 hours (7 consecutive days).
To qualify as exempt, all three tests must be met:
Common exemptions:
| Exemption Type | Job Duties Required | Common Examples |
|---|---|---|
| Executive | Manage 2+ employees, authority to hire/fire | Managers, directors |
| Administrative | Office work requiring discretion and independent judgment | HR, finance, operations |
| Professional | Advanced knowledge in a field of science or learning | Doctors, lawyers, architects |
| Computer Professional | Systems analysis, programming, software engineering | Software engineers ($27.63/hr minimum) |
| Outside Sales | Customarily engaged away from employer's place of business | Sales representatives |
Misclassification is common. Just because your employer calls you "exempt" doesn't make it legal. If your salary is below the threshold, or if your duties don't match the exemption, you may be entitled to unpaid overtime.
| State | Minimum Wage | Daily Overtime | Tipped Minimum |
|---|---|---|---|
| California | $16.00/hr (large employers) | 1.5x over 8 hrs, 2x over 12 hrs | $16.00 (same) |
| Washington | $16.28/hr | None | $16.28 |
| New York City | $15.00/hr | 1.5x over 10 hrs | $10.00 (food service) |
| Massachusetts | $15.00/hr | None | $6.75 |
| New Jersey | $15.13/hr | None | $5.26 |
| Florida | $12.00/hr | None | $8.98 |
| Illinois | $15.00/hr | None | $9.00 |
| Texas | $7.25/hr (federal) | None | $2.13 |
| Georgia | $7.25/hr (federal) | None | $2.13 |
California has the most employee-friendly overtime laws in the country:
The regular rate of pay includes not just your hourly wage, but also:
Example: If you earn $20/hour and receive a $200 weekly bonus, your regular rate is $25/hour ($20 + $200/40). Overtime rate = $37.50/hour (1.5 x $25).
Tips cannot be used to offset the overtime premium. If you earn $5/hour plus tips, your overtime rate is based on the full minimum wage, not the tipped rate.
| Violation | What It Looks Like | What to Do |
|---|---|---|
| Off-the-clock work | Asked to prep before shift or clean up after clocking out | Track actual hours; file wage claim |
| Misclassification as exempt | Salaried but earning under $43,888 and doing routine work | File FLSA claim or lawsuit |
| Misclassification as contractor | Treated as employee (set hours, directed work) but paid as 1099 | File SS-8 with IRS; state wage claim |
| Comp time instead of overtime | Given time off instead of 1.5x pay for overtime | Illegal in private sector; file claim |
| Unpaid meal breaks | Required to work through lunch but not paid | File state labor complaint |
| Automatic deductions | Meal break auto-deducted even when you worked through it | Keep records; file claim |
Employers may classify workers as contractors to avoid paying overtime, minimum wage, payroll taxes, and benefits. This is often illegal.
A worker is an employee unless all three are true:
If any one fails, the worker is an employee.
The IRS uses a 20-factor test focusing on behavioral control, financial control, and relationship type. File Form SS-8 if you believe you're misclassified.
Non-exempt employees — those paid hourly or below the salary threshold ($43,888/year). Exempt employees (salary above threshold + executive/administrative/professional duties) are not entitled to overtime.
$7.25/hour (unchanged since 2009). However, 30+ states and many cities have higher minimums. The higher of federal, state, or local minimum applies.
No. Under the FLSA, all hours worked must be paid. If your employer requires pre-shift work, post-shift cleanup, or work during unpaid breaks, that's compensable time. File a wage claim.
Non-exempt employees get overtime pay and minimum wage. Exempt employees don't. To be exempt: (1) paid a salary, (2) earn above $43,888/year, (3) perform executive, professional, or administrative duties.
File with the DOL (dol.gov/wec) or your state labor department. The process is free. You can also sue in court. You can recover 2 years of unpaid wages (3 for willful violations) plus liquidated damages equal to the unpaid amount.
In the private sector, no. Comp time in lieu of overtime pay is illegal under the FLSA. Government employees may receive comp time under specific conditions. If your private employer offers comp time, file a claim.
Questions about your overtime rights? Ask our AI legal assistant - available 24/7 in English and Chinese.