The Fair Labor Standards Act (FLSA) is the federal law that sets the baseline for overtime pay in every state, including Ohio. It applies to nearly every employer with non-exempt hourly or salaried employees, and it is the floor beneath which no employer — regardless of state — may fall. This guide covers exactly what the federal rule requires: how the 1.5x overtime rate works, how a workweek is defined, who qualifies as exempt, and the calculation mistakes that trigger the most wage-and-hour claims.
Many states layer additional overtime requirements on top of the FLSA — things like daily overtime after a set number of hours, double-time for very long shifts, or premium pay for a 7th consecutive workday. Where state law is more generous to the employee than federal law, the employer must follow the state rule. Check with your state labor department or a payroll professional for Ohio-specific requirements; this article focuses on the federal rules that apply everywhere.
Table of Contents
The FLSA Overtime Rule
Under the FLSA, overtime rules for non-exempt employees are straightforward:
- Overtime threshold: 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.
- No daily overtime: Federal law does not require overtime based on daily hours. An employee could work 12 hours on Monday and 4 hours on Tuesday (16 total) with zero federal overtime owed, because the weekly total is under 40.
- No double-time: Federal law has no concept of double-time pay. The maximum overtime rate under the FLSA is 1.5x, no matter how many hours are worked in a day.
- Minimum wage: The federal minimum wage is $7.25 per hour and has been unchanged since 2009. Overtime is always calculated on the employee's actual regular rate, which may be well above minimum wage.
Defining the Workweek
Overtime is always calculated on a single workweek basis under the FLSA:
- A workweek is any fixed, recurring period of 168 hours (seven consecutive 24-hour periods). It does not need to match the calendar week.
- Employers may choose the day and time a workweek begins, but once set, it must remain fixed — it cannot be changed week to week to reduce overtime owed.
- Each workweek stands alone. Hours cannot be averaged across two workweeks, even within the same biweekly or semi-monthly pay period.
You cannot average hours across a two-week pay period to avoid overtime. If an employee works 50 hours in week one and 30 hours in week two, 10 hours of overtime are owed for week one — the lighter second week does not offset it.
Exempt vs. Non-Exempt Employees
Not every employee is entitled to overtime. The FLSA recognizes certain exemptions for employees who meet specific criteria. If an employee qualifies as "exempt," they are not entitled to overtime pay regardless of how many hours they work.
The Three-Part Test for Exemption
To classify an employee as exempt, all three conditions must be met:
- Salary basis test: The employee must be paid a fixed salary that does not vary based on hours worked or the quality or quantity of work performed.
- Salary level test: The salary must meet the minimum federal threshold (see below).
- Duties test: The employee's primary duty must involve executive, administrative, or professional work as defined by the Department of Labor.
Common Exempt Categories
- Executive exemption: Manages a department or subdivision, regularly directs the work of at least two full-time employees, and has authority to hire, fire, or recommend such actions.
- Administrative exemption: Performs office or non-manual work directly related to management or general business operations, and regularly exercises independent judgment on significant matters.
- Professional exemption: Work requiring advanced knowledge in a field of science or learning, customarily acquired through prolonged specialized education (for example, many roles held by doctors, lawyers, engineers, and architects).
- Outside sales exemption: Employees who customarily and regularly work away from the employer's place of business making sales. No salary threshold applies to this exemption, but the duties test still does.
Giving someone a fixed salary and a "manager" title does not make them exempt. All three tests — salary basis, salary level, and duties — must be satisfied. A "shift manager" who spends most of the workday serving customers or stocking shelves, rather than directing the work of others, is very likely still non-exempt.
2026 Federal Salary Threshold for Overtime Exemption
The federal minimum salary for the executive, administrative, and professional exemptions is $684 per week, which equals $35,568 per year. A separate 2024 Department of Labor rule would have raised this threshold significantly, but a federal court vacated that rule in November 2024, and the Department subsequently issued a technical amendment restoring the $684/week figure. For 2026, $684/week is the current, controlling federal threshold — employers should not rely on the higher, vacated 2024 figures.
Calculating the Regular Rate of Pay
Overtime is not simply 1.5 times an employee's base hourly wage. The FLSA requires overtime to be calculated on the employee's regular rate of pay, which is broader than the base wage alone:
- The regular rate includes the base hourly wage plus most other forms of compensation earned that workweek.
- Non-discretionary bonuses (announced in advance, tied to production, attendance, or quality) must be included.
- Shift differentials, piece-rate earnings, and most commissions must also be folded into the regular rate.
- Discretionary bonuses, gifts, and certain benefit-plan contributions are generally excluded.
Calculating overtime on the base hourly wage alone, while ignoring a non-discretionary bonus or shift differential earned the same week, is one of the most common and most expensive overtime mistakes an employer can make. It results in systematic underpayment across every overtime hour, for every employee who receives that pay type.
How to Calculate Federal Overtime: A Step-by-Step Example
Let's walk through a real-world example. Say an employee, Maria, earns $20/hour and works the following schedule in one workweek:
- Monday: 10 hours
- Tuesday: 9 hours
- Wednesday: 8 hours
- Thursday: 13 hours
- Friday: 6 hours
- Saturday: Off
- Sunday: Off
Total hours: 46
Under the federal rule, only hours worked over 40 in the workweek earn overtime — it does not matter how the hours were distributed across the five days.
- Regular hours: 40 at $20/hour = $800
- Overtime hours: 6 at $30/hour (1.5x) = $180
Total weekly pay: $800 + $180 = $980.
If Maria also earned a $46 non-discretionary attendance bonus that week, the regular rate would need to be recalculated to include it (($800 + $46) ÷ 46 hours = $18.39/hour regular rate), which would raise both the base pay and the overtime premium slightly. Skipping this step is exactly the kind of mistake described above.
Common Overtime Mistakes Employers Make
Overtime violations are one of the largest sources of wage-and-hour claims nationwide. Here are the mistakes we see most frequently:
1. Misclassifying Employees as Exempt
Meeting only one or two of the three exemption tests is not enough. Employers frequently assume a salaried employee is automatically exempt, without checking the salary level or actual job duties.
2. Averaging Hours Across Pay Periods
Each workweek is evaluated on its own. A heavy week and a light week in the same biweekly pay period cannot be blended together to avoid paying overtime for the heavy week.
3. Leaving Bonuses and Commissions Out of the Regular Rate
As covered above, non-discretionary bonuses, shift differentials, and most commissions must be folded into the regular rate before the 1.5x overtime multiplier is applied.
4. Not Paying for All Hours Worked
Any time an employee is "suffered or permitted to work" must be compensated — including time spent answering work emails after hours, working through an unpaid lunch break, or arriving early to set up. If the employer knew or should have known the work was happening, it must be paid, including at overtime rates when applicable.
5. Ignoring State-Law Requirements That Are Stricter Than Federal Law
Some states require daily overtime, double-time, or other premiums that the FLSA does not. Applying only the federal weekly-overtime rule in a state with stricter requirements is a common and costly oversight.
Overtime violations can mean back wages, liquidated damages equal to the unpaid amount, and attorney's fees under the FLSA — and some states add their own penalties on top of that. Accurate timekeeping, a correctly calculated regular rate, and a periodic review of exempt classifications are the cheapest insurance against a wage claim.
State Overtime Rules May Add More
The FLSA sets the federal floor, but it is not the only law that may apply. Many states impose additional overtime requirements — daily overtime after a set number of hours in a single workday, double-time for very long shifts, or extra pay for a 7th consecutive day worked in a week. Where state and federal rules conflict, employers must follow whichever rule is more favorable to the employee. Consult your state labor department or a payroll professional familiar with Ohio law for the specific rules that apply to your business.
Frequently Asked Questions
What is the FLSA overtime rule?
Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must be paid 1.5 times their regular rate of pay for every hour worked over 40 in a single workweek. The FLSA does not require daily overtime or double-time pay — those are state-law concepts that vary by location.
Do salaried employees get overtime?
Salaried employees generally must receive overtime unless they meet all three tests for exemption: salary basis, salary level, and job duties. For 2026 the federal salary level is $684 per week ($35,568 per year). A salary alone does not make an employee exempt.
What counts toward the regular rate of pay used to calculate overtime?
The regular rate includes the base hourly wage plus most other compensation, such as non-discretionary bonuses, shift differentials, and commissions. Calculating overtime on the base wage alone typically underpays the employee.
What happens if an employer doesn't pay required overtime?
Employers who fail to pay required overtime may owe back wages, an equal amount in liquidated damages, and the employee's attorney's fees under the FLSA. Some states add their own penalties on top of these federal remedies.
Manually tracking overtime for every employee, every pay period, is error-prone and time-consuming. Payroll software that automatically applies the current federal overtime rate, tracks the regular rate correctly, and flags exempt-classification risk reduces both administrative time and wage-claim exposure. See our Best Payroll Software for 2026 guide for a full comparison.
Legal & Tax Disclaimer
This article is for general informational purposes only and does not constitute legal, tax, or professional advice. Employment laws, tax regulations, and compliance requirements change frequently. The information on this page reflects our understanding as of the date noted above and may not reflect recent changes in federal or Ohio state law.
Do not act or refrain from acting based solely on the information in this article. Always consult a qualified attorney, CPA, or HR professional familiar with Ohio law before making payroll or compliance decisions for your business.