Is hourly employee overtime pay dictated by state or federal law?

The correct answer is that both state and federal laws govern hourly employee overtime pay. The Fair Labor Standards Act (FLSA) is the primary federal law that establishes standards for minimum wage and overtime pay. According to the FLSA, non-exempt employees must receive overtime pay at a rate of not less than one and one-half times their regular rate for hours worked over 40 in a workweek.

However, states can have their own laws regarding overtime pay, which may be more stringent than federal regulations. For instance, some states might have a lower threshold for overtime eligibility or higher overtime pay rates. Therefore, employers must comply with the applicable state law if it provides greater benefits to employees than the federal law. Because of the interaction between state and federal laws, it is essential to consider both when determining overtime pay obligations.