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Minimum Wage and Overtime

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Introduction  

Under wage laws like the Fair Labor Standards Act (FLSA), most workers have the right to receive minimum wage and overtime when they work more than 40 hours in one week. There are many exclusions included in laws such as the FLSA that explain how rights might be applicable to different workers, depending on their job duties, classification, and where they are working.  

This section explores the types of wages required to be paid and how to determine eligibility for overtime. Employees who are overtime-eligible (“nonexempt”) may receive overtime, while those who are “exempt” may not.  

Minimum Wage

What is the federal minimum wage? 

The federal minimum wage is the lowest hourly wage employers in the United States can legally pay most workers. As of 2023, the federal minimum wage is $7.25 per hour, a rate that has remained unchanged since July 2009.

Finding out the state or local minimum wage

While the federal minimum wage sets a national floor, many states and cities have raised their minimum wages above the federal level.  

U.S. Department of Labor lists minimum wage laws for each state, as well as links to state labor offices.  

Employer obligations to pay minimum wage

Employers must comply with all applicable federal, state, and local minimum wage laws. Failure to pay the required minimum wage can result in penalties, back pay, and legal action.  

Some exceptions allow lower wage rates, including for tipped workers, younger workers, student learners, agricultural workers, and independent contractors.  

Overtime

The federal overtime provisions are contained in the FLSA. Unless they are not eligible for overtime (exempt), W-2 employees covered by the act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than one and one-half of their regular rate of pay. If an employer pays minimum wage ($7.25), overtime pay would be $10.88 an hour. If an employee earns $15 per hour, overtime pay would be $22.50 per hour. 

Some employees are “exempt” from overtime, meaning they are not entitled to earn overtime pay. 

  • Overtime–exempt employees are typically salaried and may not need to track the exact hours worked. Roles that are exempt typically require higher education and/or extensive experience. Job duties that qualify someone as exempt tend to change depending on the type of exemption (executive, administrative, professional, computer, and outside sales). This fact sheet from the DOL explains more details about exemption for employees in the IT industry. 

Some employees are “nonexempt” from overtime, meaning that they must receive overtime pay if they work more than 40 hours in one week. The qualifications required for nonexempt jobs vary by industry. 

  • Overtime-eligible (nonexempt) employees are typically paid hourly and earn below the salary threshold (see below). 
  • Note that salaried employees may be eligible for overtime depending on their salary level and job duties. 

Salary threshold: Under current regulations, exempt employees generally must earn more than $844 per week ($43,888 annually). This threshold is set to increase to $1,128 per week on January 1, 2025. Some states, like California, set higher thresholds. If an employee earns less than the weekly salary threshold—no matter their job—they must be paid overtime pay for overtime hours worked.

Myth Busting

  • Myth

    IT workers cannot receive overtime pay.

  • Fact

    While many IT professionals are classified as overtime-exempt employees and are not entitled to overtime pay under the FLSA, there are circumstances in which IT workers can still receive overtime compensation.

  • Fact

    Overtime-eligible (nonexempt) status: Some IT workers may be classified as overtime eligible ("nonexempt") if their job duties do not primarily involve high-level technical work or if they earn below the salary threshold set by the FLSA. Nonexempt employees are entitled to overtime pay for hours worked beyond 40 in a workweek.

  • Fact

    State laws: Some states have their own labor laws that provide greater overtime protections than the FLSA. For example, California requires overtime pay for hours worked beyond eight in a day, regardless of the employee's exemption status.

  • Fact

    Union contracts: IT workers who are part of a union may have a collective bargaining agreement (a contract between their employer and the union) that includes provisions for overtime pay, even if they would be classified as overtime exempt under the FLSA.

  • To determine eligibility for overtime pay, IT workers should review their job duties, salary, and applicable state and federal laws. If they believe they have been improperly classified or denied overtime compensation, they should consult with an employment attorney, a workers’ rights organization, and/or their state labor agency for guidance.

  • Overtime eligibility status: If an IT worker is misclassified as exempt when their job duties do not actually meet the criteria for exemption, they may be entitled to overtime pay retroactively. In such cases, the employee can file a claim with the Department of Labor or state labor agency or pursue legal action against their employer.

Average Wage for IT and Tech Sector Jobs

The Bureau of Labor Statistics (BLS) provides detailed wage data for various IT occupations. This information is generalized and not location specific. Here are some examples:

  • Computer support specialists: Median annual wage: $60,810
  • Network and computer systems administrators: Median annual wage: $95,360
  • Information security analysts: Median annual wage: $120,360
  • Software developers: Median annual wage: $130,160
  • Computer and information systems managers: Median annual wage: $159,010   

Resources

U.S. Department of Labor (DOL)

The US Department of Labor (DOL) fosters and promotes the welfare of the job seekers, wage earners, and retirees of the United States by improving their working conditions, advancing their opportunities for training and profitable employment, protecting their retirement and health care benefits, helping employers find workers, strengthening free collective bargaining, and tracking changes in employment, prices, and other national economic measurements and administers a variety of Federal labor laws to carry out this mission.   

State Labor Agencies

State labor agencies perform a variety of functions to regulate and oversee labor-related matters within their state including enforcing labor laws, administering unemployment benefits, managing workforce development and overseeing workplace safety and health. 

Find your state agency’s contact

Up Next

Workplace Safety
The U.S. DOL administers various health and safety protections for all workers, including IT workers, primarily through the Occupational Safety and Health Administration (OSHA).  
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The AFL-CIO Working for America Institute (WAI) has served as the AFL-CIO national workforce intermediary for over 50 years. The WAI brings together unions, employers, joint labor-management partnerships, workforce intermediaries, the workforce system, and community organizations to develop high quality, worker-centered training and Registered Apprenticeship programs and high-quality, family-sustaining jobs.

This workforce product was funded by a grant awarded by the U.S. Department of Labor (DOL)’s Employment and Training Administration (ETA). The product was created by the recipient and does not necessarily reflect the official position of DOL/ETA. DOL/ETA makes no guarantees, warranties, or assurances of any kind, express or implied, with respect to such information, including any information on linked sites and including, but not limited to, accuracy of the information or its completeness, timeliness, usefulness, adequacy, continued availability, or ownership. This product is copyrighted by the institution that created it.