Employees within the general coverage of the Fair Labor Standards Act (FLSA) and who are not specifically exempted from the overtime requirements must be paid time and one-half the regular rate for all hours worked in excess of the weekly maximum. Each workweek is a separate unit for overtime purposes; hours may not be averaged over two or more weeks.This is another common misconception of employers.
The FLSA Amendments of 1985 provide for special rules for state and local government employees concerning overtime and compensatory time. There are substantial variations in the way the FLSA now treats private sector versus public sector employees. In the private sector, there is no such thing as swapping overtime pay for "comp time" for nonexempt employees.
Where an employee is paid a flat hourly rate with no incentive bonus or other additional compensation, the employee's hourly rate is the regular rate of pay. In order to compute overtime, the employee's pay must be converted to an hourly rate (i.e., the regular rate) and then paid at one and one-half times the regular rate for all hours worked over 40.
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