Start with workweeks, not pay periods
For a covered, nonexempt employee, the federal Fair Labor Standards Act generally requires time and one-half the regular rate for hours over 40 in a workweek. A payroll system may pay every two weeks, but a busy week is not normally averaged with a quiet week simply because the cheque covers both.
The regular rate is not always the posted rate
The regular rate is the hourly rate used to calculate the overtime premium. Depending on the payment, it can include nondiscretionary bonuses, commissions, shift differentials, and other compensation connected to the work. The federal regulations in 29 CFR Part 778 describe inclusions and exclusions. A worksheet that accepts only a base rate is a starting point, not a payroll audit.
Record what was paid for the overtime hour
If an employee was paid straight time for an overtime hour, the unpaid federal premium may be the additional half-time amount in a simple example. If no pay was made for the hour, the shortfall is different. Pay stubs and time records should be read together so the same hour is not counted twice or omitted.
Salary does not end the analysis
A salary label does not by itself establish an exemption. Federal exemptions usually involve both pay and duties, and the work actually performed matters. A job title or an employer’s statement may be evidence, but it is not the complete test.
Build a source-backed work log
- Keep each week’s dates and total hours separate.
- Save pay stubs, schedules, timecards, clock-in records, and contemporaneous notes.
- Identify bonuses, commissions, multiple rates, and payments that may affect the regular rate.
- Mark where an entry is an estimate and where it is documented.
Federal is only a baseline
Some states require daily overtime, have different exemptions, or allow additional remedies and longer lookback periods. When both laws apply, the more protective rule may control. Check the relevant state labor agency and any collective bargaining agreement before relying on a federal-only illustration.
Official sources
Read the Department of Labor overtime overview, Fact Sheet #23, and the current 29 CFR Part 778. Use your state labor office for the rules that may add protections.
A good overtime record pairs each workweek and pay component with a source. A simple multiplier cannot answer coverage, exemption, or state-law questions by itself.