The schedule on the kitchen wall says 47 hours this week, and the question that follows is worth real money: are those last seven hours paid at time and a half, or at your plain hourly rate? For most hourly workers the answer is time and a half, guaranteed by federal law. But the rules have moved around in the past two years, and a stubborn set of myths about salaries, job titles, and “manager” badges costs workers overtime they are legally owed.
The governing law is the Fair Labor Standards Act, enforced by the Labor Department’s Wage and Hour Division, whose overtime pages lay out the framework. Here is where the law stands in mid-2026, including the salary threshold that snapped back this spring and a new tax break that changes what overtime is worth after taxes.
The federal baseline: 1.5 times pay after 40 hours
Unless you fall into an exemption, your employer must pay at least one and a half times your regular rate for every hour past 40 in a workweek. The workweek is the unit that matters: federal law has no daily overtime, no weekend premium, and no holiday premium. Fifty hours one week followed by thirty the next means ten overtime hours in week one, even though the two-week total looks ordinary. Some states layer on more, California requires daily overtime past eight hours, for example, so your state labor department may add rights on top of the federal floor. There is also no federal cap on how many hours an adult can be scheduled; the law regulates the price of those hours, not the number.
Salaried does not mean exempt
The most expensive myth in American payroll is that a salary switches overtime off. Exemption from overtime, for the so-called white-collar exemptions, requires passing three tests at once: you are paid on a salary basis, the salary meets a minimum level, and your actual duties are genuinely executive, administrative, or professional. Per the Labor Department’s current salary levels page, the standard threshold is $684 per week, or $35,568 a year, with a separate $107,432 total-compensation test for certain highly compensated employees.
Miss any leg of the test and the overtime right survives. A salaried assistant manager earning $36,000 who spends most shifts running a register and stocking shelves fails the duties test and is owed time and a half regardless of the title. Job descriptions do not decide exemption; actual duties do.
Why the threshold is $684 again
If that number sounds lower than you remember, it is. A 2024 rule had lifted the threshold to $844 per week that July and scheduled a jump to $1,128 in January 2025, but a federal district court in Texas vacated the rule in November 2024, and the appeals that followed did not revive it. This May, the department formally restored the prior regulatory text, announcing in a May 14, 2026 technical amendment that the $684 weekly standard and the $107,432 highly compensated threshold are back on the books. Practical upshot for workers: fewer salaried people are exempt-eligible than would have been under the 2024 rule, but the tests above still control, and duties still trump titles.
Your regular rate is bigger than your base wage
Time and a half is computed on the regular rate, which includes more than the number on your offer letter. Nondiscretionary bonuses, shift differentials, and most commissions must be folded in before the overtime premium is calculated. A worker at $18 an hour with a $100 weekly production bonus has a regular rate above $18, and overtime priced off the bare wage is an underpayment, a common and quiet one.
New for 2026: overtime comes with a tax deduction
The 2025 tax law added a temporary federal income tax deduction for the premium portion of overtime pay, the extra “half” in time and a half required by the FLSA. Through 2028, workers can deduct up to $12,500 of qualified overtime premium pay per year, or $25,000 on a joint return, phasing out above $150,000 of modified adjusted gross income ($300,000 joint), and it applies whether or not you itemize. Details, including the requirement that qualified overtime be separately reported on 2026 W-2s, are in the IRS explainer on the no tax on overtime deduction. Note the limits: it is an income tax deduction, not an exemption, and Social Security and Medicare taxes still come out of every overtime dollar.
If your paycheck comes up short
Start with payroll or HR; genuine errors are common and often fixed in a cycle. Keep your own record of hours worked, which is powerful evidence if the employer’s records are thin. If the problem persists, you can file a confidential complaint with the Wage and Hour Division at 1-866-487-9243, and federal law forbids retaliation for doing so. Back wages are routinely recovered, and the law generally reaches two years back, three if the violation was willful.
Overtime rights do not depend on your employer’s generosity, your job title, or whether you are paid weekly or by salary. They depend on the tests above. Forty-seven hours on the schedule should mean seven of them at a premium, and in 2026, a bit less of that premium goes to the IRS.
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