Regular Time: What It Means for Employers

What it means in practice

In payroll, "regular time" is the bucket of hours that sits below the overtime line. The Fair Labor Standards Act (FLSA) does not use the phrase itself. The statute says no covered employer may employ an employee for a workweek longer than forty hours unless the hours above that are paid at not less than one and one-half times the regular rate (29 U.S.C. 207(a)(1)), and the Department of Labor's regulations describe 40 hours as the "maximum nonovertime hours" an employee may work in a workweek without additional compensation (29 CFR 778.101). So for a covered, non-exempt employee, regular time is every hour worked in the workweek up to and including the 40th, and overtime is every hour after it. This entry is about the hours; the dollar amount is covered in our entry on straight time pay.

Regular time is not the regular rate of pay. The two phrases are easy to mix up. Regular time is a number of hours. The "regular rate" is a dollar figure per hour, and it is the rate on which overtime is priced. The regulations say the regular rate cannot be set by the parties' declaration; it is drawn from what actually happens under the employment contract, and section 7(e) of the Act requires it to include "all remuneration for employment paid to, or on behalf of, the employee" except specific statutory exclusions (29 CFR 778.108). It is computed each workweek by dividing total remuneration (minus those exclusions) by the total hours actually worked in that workweek (29 CFR 778.109), which means the overtime hours are part of the divisor. Fact Sheet #56A adds that it cannot be lower than the applicable minimum wage and "cannot be circumvented by an agreement." In short, regular time tells you which hours get the premium; the regular rate tells you how big it is.

Why the base rate and the regular rate can differ. The posted hourly wage is the rate for regular-time hours, but other pay can push the regular rate higher. In the regulations' illustration, a $12-an-hour employee who works 46 hours and earns a $46 production bonus has a regular rate of $13 ($598 divided by 46), so each overtime hour is worth $19.50, not $18 (29 CFR 778.110).

Who has regular time. The split between regular time and overtime matters for employees who are covered by the Act and not exempt from its overtime requirement (29 CFR 778.103). For employees who qualify for an exemption, federal law does not require the employer to divide hours this way, although a state may. Classification is explained in exempt vs. non-exempt employees. Being paid a salary does not end the question: a non-exempt employee on salary still has regular-time and overtime hours, and the regular rate is the salary divided by the hours it is intended to cover (29 CFR 778.113; see salaried non-exempt).

The workweek sets the boundary. Regular time is always measured inside one workweek. The employer picks when the 168-hour period starts and may change it only if the change is meant to be permanent and is not designed to evade overtime (29 CFR 778.105). Each workweek stands alone: the regulations' example is an employee who works 30 hours one week and 50 the next, who is owed overtime for the second week even though the two-week average is 40 (29 CFR 778.104). A two-week pay period therefore holds two separate 40-hour regular-time limits, not one 80-hour limit.

What counts toward the 40. Only hours worked fill the regular-time bucket, and the rules for what is work time are in 29 CFR Part 785 and our entry on hours worked. The employer must total all hours worked for it in the workweek, even if the employee did two or more unrelated jobs, and for an employee jointly employed by two or more employers, all hours for those employers are totaled (29 CFR 778.103). Work not requested but suffered or permitted is work time, including work at home the employer knows or has reason to believe is happening; a rule against it is not enough (29 CFR 785.11 to 785.13). Rounding is accepted only if, over time, it does not shortchange employees (29 CFR 785.48). On the other side, paying for certain time does not by itself make it hours worked: compensated meal periods and similar time are not counted unless the parties have treated that time as hours worked (29 CFR 778.320).

How an employer sorts the week, step by step. Confirm the employee is covered and non-exempt; identify the fixed workweek; total every hour worked in it across all jobs; place hours 1 through 40 in regular time and the rest in overtime; compute the regular rate from all pay and all hours; then pay overtime hours at not less than one and one-half times that rate. For a single hourly rate, the regulations describe this as straight-time earnings for every hour plus one-half the rate for each hour over 40 (29 CFR 778.110). Overtime earned in a workweek is generally due on the regular payday for the period in which that workweek ends (29 CFR 778.106).

Regular-time hours must be paid in full first. Overtime cannot be said to have been paid unless all the straight-time compensation due for the nonovertime hours, under the contract or any statute, has been paid (29 CFR 778.315). The regulations give the example of an agreement to pay $5 an hour for the first 35 hours, nothing for hours 36 to 40 and $7.50 for hours over 40; that does not meet the Act, and the $25 for hours 36 to 40 must be paid before any overtime payment can be credited (29 CFR 778.317). Likewise, an agreement that only the first 40 hours of a week will count as working time fails (29 CFR 778.316), and waiting time or travel for the employer must be counted and paid, though at an agreed lower rate of at least the minimum if the parties choose (29 CFR 778.318).

Two rates in one week. Hours at different nonovertime rates in one workweek count together toward 40, and the regular rate is their weighted average (29 CFR 778.115).

Where states differ. The regulations state that the FLSA does not relieve an employer of any obligation under contract or other federal or state law to pay premium rates for work beyond a daily standard or on weekends and holidays (29 CFR 778.102), so in some states regular time ends earlier than hour 40. As one example, the California Department of Industrial Relations overtime FAQ says employees may not be employed more than eight hours in any workday or 40 hours in any workweek without overtime, with time and one-half through the twelfth hour, double time after 12 hours, and special rules for the seventh consecutive day of work in a workweek. California's glossary defines a workday as a consecutive 24-hour period and bars averaging daily hours across workdays. The FAQ says overtime is calculated on hours actually worked, so holiday or sick pay for a day off does not count, and it discusses alternative workweek schedules. Other states differ; the Department of Labor lists state labor offices.

Why the split matters at tax time. The IRS describes a federal income tax deduction for tax years 2025 through 2028 for "qualified overtime compensation," the pay required by the FLSA that exceeds the regular rate, such as the "half" in time and one-half. Its FS-2026-13 FAQs say overtime not required by the FLSA is not eligible, and that for most employees the qualified amount for a workweek is FLSA hours worked over 40, times one-half, times the FLSA regular rate. In the $18 example above, that is 4 x 0.5 x $18 = $36; the $72 of straight-time pay for the 4 overtime hours is not part of it. In the California example, no hours exceed 40, so the daily overtime is not required by the FLSA and none of it is qualified overtime compensation. Starting with tax year 2026, employers report the qualified amount on the Form W-2 in box 12 using code TT. The IRS says overtime remains subject to income tax withholding and employment taxes; the deduction's dollar limits and income phase-out are on the IRS page cited below.

Recordkeeping. For each non-exempt employee, the federal recordkeeping rule asks for the time of day and day of week the workweek begins; the regular hourly rate for any week with overtime and the basis of pay; hours worked each workday and total hours each workweek; total daily or weekly straight-time earnings for hours worked, exclusive of premium overtime pay; and total premium pay for overtime hours, which excludes the straight-time earnings for those hours (29 CFR 516.2(a)). For employees on fixed schedules, an employer may record the normal schedule, mark weeks when it was worked, and record exact hours in weeks that differ (29 CFR 516.2(c)). Payroll records must be kept at least 3 years, and time cards and wage rate tables used to compute straight-time and overtime pay at least 2 years (29 CFR 516.5 and 516.6). Many employers also show regular and overtime hours on the pay stub and the payroll register.

Questions employers ask. Do paid holidays or PTO count as regular time toward 40? Under the FLSA, overtime is based on hours actually worked; pay for time not worked does not become hours worked unless the parties treat it that way, though an employer may choose to count them when computing a contractual daily or weekly overtime premium (29 CFR 778.202(a) and 778.320). Can we start overtime at 37.5 hours? Yes, by contract or policy, and a true premium for hours over the normal workweek can be credited toward federal overtime (29 CFR 778.202(b)); federal law only requires it after 40. Does a full-time schedule mean 40 regular hours? Not necessarily; the FLSA counts hours worked, not the label on the schedule, as discussed in full-time hours.

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