The FLSA sets a floor for pay and a premium for hours. Both are fixed numbers, and the overtime trigger is weekly, never daily.
The two wage rates
- Federal minimum wage for covered nonexempt workers: $7.25 per hour, effective July 24, 2009.
- Minimum direct cash wage for a tipped employee: $2.13 per hour.
$5.12 is the difference between $7.25 and $2.13 - it is the gap tips must fill, not the cash wage. Candidates misremember it as the cash wage constantly. And $7.25 is the level the cash wage plus tips must reach, not the required direct cash wage itself.
The overtime rule
Overtime is owed at not less than one and one-half times the regular rate of pay for hours worked over 40 in a workweek.
Two traps sit in that sentence:
- The FLSA sets no daily overtime requirement. An 8-hours-in-a-day rule comes from some state laws, not federal law.
- The premium is built on the employee's regular rate, not on the minimum wage, and the multiplier is 1.5, not 2.
Work the math
A nonexempt employee with a regular rate of $20.00 works 46 hours in a workweek:
- Straight time for the first 40 hours: 40 x $20.00 = $800.00
- Overtime rate: 1.5 x $20.00 = $30.00
- Overtime pay: 6 x $30.00 = $180.00
- Total gross pay: $800.00 + $180.00 = $980.00
The wrong answers come from three predictable slips: paying all 46 hours at straight time, applying the premium to only some of the excess hours, or paying every hour at $30.00.
Carry this in
Split the week at 40, price the first block at the regular rate and the rest at 1.5 times that same rate, then add. Do not reach for $7.25 unless the question is about the floor.