The Fair Labor Standards Act, also known as the FLSA, establishes standards for many facets of payment of wages for labor, including overtime. The FLSA regulates over 130 million workers, according to the United States Department of Labor. The FLSA covers both public and private sector workers in both full- and part-time positions. However, if a business or firm does not generate $500,000 or more in annual business revenue, employees of the business may not be covered.
The FLSA requires employers who allow or mandate overtime work to pay the employee for the overtime. Overtime is considered work in excess of 40 hours per week. The FLSA does not regulate the amount of time individuals aged 16 and over may work in a week. Nor does the FLSA require that overtime be paid for work completed on Saturdays, Sundays, holidays, or regular vacation or "rest" days, unless those days coincide with overtime, or 40 or more hours of work completed in the week. A week is any seven consecutive day period of time, but need not start on a Monday for billing hours purposes.
Employers are required to pay an employee no less than time and a half of his or her regular pay. The rate can be derived on salary, commission, or another basis, but must meet minimum wage requirements as set forth in the FLSA. The overtime wage must also be computed on the basis of average hourly rate. If an employee works at different tasks with different time-rate mechanisms, such as salaried and commission-based simultaneously within the same week, the earnings from all positions should be added together and then divided by the number of hours worked to determine an hourly wage.
Some states also offer overtime laws, including Alabama, Texas and Virginia. If the state provides more protection for employees, employers are required to follow the state rather than the federal law, even if it far surpasses the minimum requirements of the FLSA. The opposite is also true; if a state's laws are much more lenient than the FLSA, the employer is required to meet the minimum requirements of the FLSA.