The US Employment Law Basics: Overtime; Breaks; and Pay

Understanding your rights when it comes to overtime, breaks, and pay is essential for every American worker. Whether you're starting a new job, negotiating a raise, or simply want to know if your employer is treating you fairly, knowing the basics of U.S. employment law can protect you and ensure you're getting what you've earned. Let's break down the federal rules that govern how you work, when you're entitled to extra pay, and what your employer must disclose about your compensation.

The Fair Labor Standards Act: Your Foundation for Fair Pay

The backbone of U.S. employment law is the Fair Labor Standards Act (FLSA), a federal law that sets the rules for minimum wage, overtime pay, recordkeeping, and child labor^[2]. This law applies to most workers in the United States, though there are some important exceptions we'll cover later.

The FLSA establishes three main categories of workers: non-exempt employees, exempt employees, and independent contractors^[2]. Your classification matters enormously because it determines whether you're entitled to overtime pay and other protections.

Non-exempt employees are paid an hourly rate and are subject to both minimum wage and overtime requirements. If you're a non-exempt worker, your employer must pay you at least the federal minimum wage and overtime pay when applicable^[2].

Exempt employees are typically salaried workers who are excluded from certain FLSA protections. However, misclassifying a worker as exempt when they should be non-exempt can result in serious penalties for employers, so it's worth understanding where you fit^[2].

Understanding Minimum Wage in 2026

The federal minimum wage remains a critical protection for American workers. While Congress hasn't raised the federal minimum wage since 2009, many states and localities have set their own higher minimum wages^[3]. If you live in a state with a higher minimum wage than the federal rate, your employer must pay you the higher amount.

For example, certain states have implemented agricultural minimum wages. As of January 1, 2026, agricultural employees in some jurisdictions earn $14.56 per hour^[1].

It's important to know what minimum wage applies to your job. Check your state's labor department website or ask your employer about the minimum wage that applies to your position and location.

Overtime Pay: When You're Entitled to Extra Compensation

One of the most important protections under the FLSA is the overtime requirement. For non-exempt employees, the law requires employers to pay overtime at a rate of at least one and a half times your regular hourly rate (often called "time and a half") for any hours worked over 40 hours in a workweek^[2].

Here's what you need to know about overtime:

Your workweek is defined by your employer and typically runs Sunday through Saturday, though it can be any consecutive seven-day period^[2]
Overtime is calculated on a weekly basis, not daily (though some states have daily overtime rules that provide additional protections)
Your employer must track all hours you work, including overtime hours^[2]
Overtime pay must be calculated based on your regular hourly rate, which includes certain allowances but excludes certain types of compensation

If you're a non-exempt employee working more than 40 hours per week, make sure your employer is paying you the overtime rate. If they're not, you may have a wage claim.

Who Is Exempt From Overtime?

Not all employees are entitled to overtime. Exempt employees—typically those in executive, administrative, or professional roles—are excluded from FLSA overtime requirements^[2]. However, to qualify as exempt, an employee must meet specific salary and job duty tests set by the Department of Labor. Simply having a job title that sounds "management" isn't enough.

If you believe you've been misclassified as exempt when you should be non-exempt, you may want to consult with an employment attorney or contact your state's labor department.

Break Time and Meal Periods: What the Law Requires

Many workers assume they're entitled to breaks by federal law, but the FLSA actually doesn't require employers to provide breaks or meal periods^[2]. This is one area where federal law is surprisingly minimal.

However, many states have their own break laws that are more protective. Some states require:

Paid 15-minute breaks for every four hours worked
Unpaid meal periods (typically 30 minutes to one hour)
Rest periods for specific types of workers

The rules vary significantly by state, so you'll need to check your state's labor laws. If your state requires breaks and your employer isn't providing them, you may be entitled to compensation for those missed breaks.

If your employer does provide breaks, short breaks (typically 5 to 20 minutes) must be paid time. Longer meal periods (typically 30 minutes or more) can be unpaid if you're completely relieved of your duties^[2].

Pay Transparency and What Your Employer Must Disclose

Your employer has legal obligations to be transparent about how you're paid. Under the FLSA, employers must provide employees with specific information about their compensation^[1]. This includes:

The date of payment and the dates of work covered by that payment
Your name and your employer's name, address, and business identification number
Your rate(s) of pay and the basis for payment (hourly, salary, piece rate, commission, etc.)
Gross wages and net wages
The amount and purpose of each deduction made from your paycheck^[1]
Your regular hourly rate, overtime rate, and the number of regular and overtime hours worked^[1]
Information about any allowances claimed as part of minimum wage (such as tips or meals and lodging)
Your employer's policy on sick leave, vacation, personal leave, holidays, and hours^[1]
Whether you're exempt from minimum wage and overtime requirements^[1]
A list of deductions that may be made from your pay^[1]
The regularly scheduled payday and when you'll receive your first payment^[1]

Beyond federal requirements, many states have enacted stronger pay transparency laws. These laws often require employers to post salary ranges in job postings and provide advance notice of promotional opportunities^[5]. As of 2025 and continuing into 2026, states like New Jersey and Vermont have implemented pay transparency requirements that benefit job seekers and current employees^[5].

Recordkeeping: Your Right to Documentation

Your employer is required to keep accurate records of your work hours, wages, and deductions^[1]. These records must include^[2]:

Your full name and Social Security number
Your address, including zip code
Your birthday (if you're under 19)
Your sex and occupation
The time and day your workweek begins
Hours worked each day and total hours worked each week
The basis for how your compensation is determined

You have the right to inspect these records and request copies. If your employer can't produce accurate records of your hours worked, you may be able to challenge wage calculations.

2026 Updates: What's Changing for Workers

The employment law landscape continues to evolve. In 2026, employers must prepare for significant changes at federal, state, and local levels^[4]. Key updates include:

Continuing expansion of paid leave laws across multiple states^[5]
Stricter compliance regulations and recordkeeping requirements^[3]
Ongoing state-level minimum wage increases and pay transparency requirements^[5]
New requirements for employers to provide notices of labor rights to new employees and current employees annually^[4]

Stay informed about changes in your state, as employment laws continue to evolve in 2026 and beyond.

Frequently Asked Questions

Do I have to be paid for unused vacation time when I leave my job?

This depends on your state and your employer's policy. The FLSA doesn't require employers to provide vacation time or pay out unused vacation when you leave^[2]. However, many states have laws requiring employers to pay out accrued vacation time. Check your state's labor department website or your employment contract for specific rules.

Can my employer deduct money from my paycheck?

Your employer can make certain deductions from your paycheck, such as taxes, Social Security, and court-ordered garnishments. However, deductions cannot reduce your pay below the minimum wage. Deductions for uniforms, tools, or other items may be restricted depending on your state. Your employer must disclose what deductions may be made from your pay^[1].

Am I entitled to overtime if I'm salaried?

Not automatically. Whether you're entitled to overtime depends on your job duties and salary level, not just whether you're paid a salary. Many salaried employees are classified as exempt and aren't entitled to overtime. However, some salaried employees are non-exempt and are entitled to overtime pay. Ask your employer about your classification or consult with an employment attorney if you're unsure.

What should I do if my employer isn't paying me correctly?

First, review your pay stubs carefully and compare them to the hours you worked. If you believe there's an error, discuss it with your employer or HR department. If the issue isn't resolved, you can file a wage complaint with your state's labor department or consult with an employment attorney about your options.

How do I know if I'm classified correctly as exempt or non-exempt?

The Department of Labor provides guidance on exempt vs. non-exempt classification. Generally, exempt employees must be paid a salary (not hourly), meet a minimum salary threshold, and perform specific job duties. If you're unsure about your classification, ask your employer for clarification or contact your state's labor department^[2].

Are tips counted toward minimum wage?

This varies by state. In some states, employers can count tips toward minimum wage requirements (with certain limitations), while in others, tips cannot be counted. Your employer should disclose whether tips are claimed as part of your minimum wage^[1]. Check your state's specific rules.

Protecting Your Rights as a Worker

Understanding employment law basics puts you in a stronger position to advocate for yourself at work. Whether it's ensuring you're paid overtime correctly, knowing what breaks you're entitled to, or understanding your employer's obligations around pay transparency, knowledge is power.

Keep copies of your pay stubs, track your hours worked, and don't hesitate to ask questions about how you're being paid. If you believe your rights are being violated, contact your state's labor department—many services are free. You can also consult with an employment attorney if you have concerns about wage and hour violations.

The rules around overtime, breaks, and pay continue to evolve, especially as more states implement stronger protections for workers. Stay informed about changes in your state, and remember that you have the right to fair compensation for your work.

Sources & References

New 2026 Employment Law Changes Every Employer Needs to Know — The Horton Group
Federal Labor Laws - The Complete Guide for 2026 — Employer Pass
5 Major Types of Employment Laws Explained (2026) — TLG Law
Employment Law in 2026: Key Changes and Compliance Tips — myHRcounsel
United States: Employment – 2025 Highlights And 2026 Outlook — Mayer Brown