An hourly employee is paid for the number of hours they work per week at a determined rate. Per federal law, hourly workers are entitled to overtime pay for hours worked over 40 hours per workweek.1
Employees paid on an hourly basis are paid for actual hours worked. Unlike many salaried employees, hours per week may fluctuate based on a worker’s weekly schedule or rotated shifts, and therefore wages can vary for that employee from week to week.
For example, if your pay rate is $10 an hour and you work 40 hours in a workweek, you’ll be paid $400. If you work overtime, you’ll be paid $15 per hour (time and a half) for the hours you work over 40. If you work 45 hours, you’ll earn $475 that week—$400 in regular pay and $75 (5 hours at $15 an hour) in overtime.
Exempt employees are not entitled to the enforced provisions of the Federal Labor Standards Act (FLSA), such as overtime pay. As of January 1, 2020, a worker can only be designated as an exempt employee if they are paid at least $684 per week ($35,568/year) or they work in an occupation that is exempt from overtime pay provisions.
Non-exempt employees must be paid both minimum wage and overtime pay for any time worked beyond 40 hours in any given workweek. According to the FLSA, non-exempt employees are entitled to 1.5 times their hourly wage for every hour of overtime they work.1
The majority of people working an hourly wage are considered non-exempt employees. Most non-exempt employees in the U.S. are offered employment “at will,” meaning that both they and the employer can terminate the professional relationship at any time for any reason, so long as it is not discriminatory.
