Under the FLSA, employers must pay at least one and one-half times an employee’s regular rate of pay for each hour worked in excess of forty hours in a workweek. Other than for minors, the FLSA does not limit the number of hours employees can be required to work. Instead, the act gives employers a financial incentive to limit overtime because those hours of work must be compensated at a premium.

That premium is expressed in terms of an employee’s regular rate of pay. If an employee is paid an hourly wage, the hourly wage is the regular rate (barring receipt of certain other payments). However, if the employee is paid a weekly salary for a fluctuating number of hours, the regular rate would be the weekly salary divided by the number of hours actually worked each week. Computing the regular rate in this manner is nonetheless legal (although a potential labor relations nightmare) provided that the employer previously informed the employee that overtime pay would be calculated in this manner.

The basic unit of time for determining compliance with both the FLSA’s minimum wage and overtime requirements is the workweek. The workweek is any fixed and recurring period of seven consecutive days (168 hours). The workweek does not necessarily correspond to the calendar week or begin at the start of a workday. Work does not necessarily occur on every day of the workweek. With just a few exceptions, FLSA overtime is earned on a weekly basis.

It does not matter how many hours an employee works on a particular day; the relevant issue is the number of hours worked in the workweek. (However, daily overtime might be required under a collective bargaining agreement or state law.) Just as there is no daily overtime under the FLSA, hours of work generally cannot be averaged across workweeks (e.g., a long workweek followed by a short one) to avoid overtime liability. However, employers can rearrange hours within workweeks to avoid incurring overtime liability.