Time Tracking, Overtime & Payroll: The Rules That Matter
The Fair Labor Standards Act requires covered employers to pay 1.5x the regular rate for any hours worked beyond 40 in a single workweek. A workweek is a fixed 7-day period — employers cannot average hours across two weeks or use rolling lookback periods to avoid overtime.
1. Federal Overtime (FLSA)
The Fair Labor Standards Act requires covered employers to pay 1.5x the regular rate for any hours worked beyond 40 in a single workweek. A workweek is a fixed 7-day period — employers cannot average hours across two weeks or use rolling lookback periods to avoid overtime.
2. State Daily Overtime
- California: 1.5x after 8 hrs/day or 40 hrs/week; 2x after 12 hrs/day
- Colorado: 1.5x after 12 hrs/day or 40 hrs/week
- Alaska: 1.5x after 8 hrs/day or 40 hrs/week
- Nevada: 1.5x after 8 hrs/day for workers earning <1.5x min wage
3. Break Laws
Federal law does not require breaks. State laws vary widely. California mandates a 30-minute unpaid meal break for shifts over 5 hours. Many states require paid 10-15 minute rest breaks for every 4 hours worked. ToolWise subtracts break minutes from worked hours automatically — adjust if your state requires paid breaks.
4. Tracking Best Practices
- Use digital time clocks (not handwritten cards)
- Round to the nearest minute or quarter-hour (never larger)
- Track start of workweek — it cannot change week-to-week
- Store records for at least 3 years (FLSA requirement)
- Separate multiple positions or rates by day if needed
Overtime and Payroll Rules That Matter
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