⏱️ Overtime Rules for Construction
Overtime calculation in construction is more complex than most industries. Between federal FLSA rules, state-specific laws, prevailing wage requirements, union agreements, and daily vs. weekly overtime — there are dozens of ways to get it wrong. And every mistake is money out of your pocket or a compliance violation waiting to happen.
Know which rules stack, and which ones override. Federal, state, and contract rules can all apply simultaneously. When they conflict, you generally must follow the rule most favorable to the worker. Build your payroll system to handle the most restrictive rules for each project.
Federal Overtime (FLSA)
The Fair Labor Standards Act (FLSA) is the baseline federal overtime law:
The Basic Rule
| Rule | Details |
|---|---|
| Overtime trigger | Over 40 hours in a workweek |
| Overtime rate | 1.5× the regular rate of pay |
| Who's covered | Most construction workers (non-exempt) |
| Workweek | Any fixed, recurring 168-hour (7-day) period |
| No daily OT | FLSA does not require daily overtime (states may) |
What Counts as "Hours Worked"
| Activity | Counts? |
|---|---|
| Time on the jobsite performing work | Yes |
| Required travel between jobsites during the day | Yes |
| Commute from home to jobsite | No (generally) |
| Required training or safety meetings | Yes |
| Waiting time (if required to stay on site) | Yes |
| On-call time (if freedom is restricted) | Yes |
| Meal breaks (if completely relieved of duties) | No |
| Donning/doffing PPE (if required by employer) | Often yes |
Who's Exempt from FLSA Overtime?
Most construction workers are non-exempt (entitled to overtime). Possible exemptions:
| Role | Likely Exempt? | Why |
|---|---|---|
| Project Manager | Yes — if salaried + duties test met | Executive/administrative exemption |
| Superintendent | Maybe — depends on duties | Must genuinely manage, not just supervise |
| Estimator | Maybe — depends on duties | Administrative exemption if independent judgment |
| Foreman | Usually no | Working foremen performing manual labor are non-exempt |
| Office staff (salaried) | Maybe — depends on duties and salary | Must meet salary + duties test |
| Field workers (hourly) | No | Non-exempt — overtime required |
Calling someone "salaried" or giving them a "manager" title doesn't make them exempt. The DOL uses a duties test — the employee must actually perform exempt-level duties (managing, exercising independent judgment, etc.) as their primary function. Misclassifying non-exempt workers as exempt is one of the most common wage violations.
State Overtime Rules
States with Daily Overtime
Most states follow FLSA (weekly OT only). A few key states require daily overtime:
| State | Daily OT Trigger | Daily DT Trigger | Weekly OT |
|---|---|---|---|
| California | Over 8 hrs/day = 1.5× | Over 12 hrs/day = 2× | Over 40 hrs/week = 1.5× |
| Nevada | Over 8 hrs/day = 1.5× | None | Over 40 hrs/week = 1.5× |
| Colorado | Over 12 hrs/day = 1.5× | None | Over 40 hrs/week = 1.5× |
| Alaska | Over 8 hrs/day = 1.5× | None | Over 40 hrs/week = 1.5× |
California Overtime (The Most Complex)
California has the most detailed overtime rules in the country:
Daily Overtime
| Hours Worked | Rate |
|---|---|
| 0–8 hours | Straight time (1×) |
| 8–12 hours | Overtime (1.5×) |
| Over 12 hours | Double time (2×) |
7th Consecutive Day
| Hours on 7th Day | Rate |
|---|---|
| 0–8 hours | Overtime (1.5×) |
| Over 8 hours | Double time (2×) |
Weekly Overtime
| Hours in Week | Rate |
|---|---|
| 0–40 hours | Straight time |
| Over 40 hours | 1.5× (but only if not already paid at OT rate due to daily OT) |
You don't stack daily and weekly overtime. If a worker already received daily OT for hours 9–10 on a given day, those hours aren't counted again for weekly OT purposes. The worker gets the higher of the daily or weekly overtime rate, not both.
California Alternative Workweek (4×10)
With a properly adopted Alternative Workweek Schedule:
| Schedule | OT Trigger |
|---|---|
| 4 days × 10 hours (4/10) | Over 10 hrs/day = 1.5×; Over 12 hrs/day = 2× |
| 3 days × 12 hours (3/12) | Over 12 hrs/day = 2× |
Requirements to adopt:
- Proposal must be in writing
- Secret ballot election with 2/3 employee approval
- Filed with DLSE within 30 days of election
- Must offer a regular 5/8 schedule as an alternative
Prevailing Wage Overtime
Federal (Davis-Bacon + CWHSSA)
The Contract Work Hours and Safety Standards Act (CWHSSA) governs overtime on federal construction:
| Rule | Details |
|---|---|
| Trigger | Over 40 hours/week |
| Rate | 1.5× the basic rate (not total rate) |
| Fringes | Straight-time fringe rate applies to ALL hours (including OT) |
| Penalty for violations | $10/day per worker for each day of violation |
Calculation Example
Carpenter: Basic rate $52.00, Fringe $38.50
| Hours | Basic Wage | Fringe | Total |
|---|---|---|---|
| 40 hrs ST | $52.00 × 40 = $2,080.00 | $38.50 × 40 = $1,540.00 | $3,620.00 |
| 8 hrs OT | $78.00 × 8 = $624.00 | $38.50 × 8 = $308.00 | $932.00 |
| Week Total | $2,704.00 | $1,848.00 | $4,552.00 |
Key point: The OT premium applies only to the basic rate ($52.00 × 1.5 = $78.00). Fringes stay at the straight-time rate ($38.50) for all hours.
State Prevailing Wage Overtime
Each state has its own rules. Key variations:
| State | OT Calculation Base | Daily OT? | DT? |
|---|---|---|---|
| California | Basic rate (check determination) | Yes (over 8 hrs) | Yes (over 12 hrs, 7th day, Sat/Sun) |
| New York | Total rate including supplements | No | No (but Saturday/Sunday premiums in some determinations) |
| Illinois | Basic rate | No | No |
| Massachusetts | Basic rate | No | No (but Sunday/holiday premium) |
Union Overtime Rules
Union CBAs often have overtime rules that exceed legal minimums:
Common Union OT Provisions
| Provision | Typical Rule |
|---|---|
| Daily OT | After 8 hours (even in states without daily OT laws) |
| Saturday | All hours at 1.5× (some trades: first 8 at 1.5×, over 8 at 2×) |
| Sunday | All hours at 2× |
| Holidays | All hours at 2× (plus holiday pay if in the fund) |
| Shift work | Shift differential (2nd shift: 8 hrs pay for 7.5 hrs; 3rd shift: 8 hrs pay for 7 hrs) |
| Show-up time | Minimum 2–4 hours pay if worker reports and is sent home |
| Call-back | Minimum 4 hours at OT rate if called back after regular shift |
| Travel time | May trigger OT if travel + work exceeds 8 hours |
Named Holidays (Typical)
| Holiday | Status |
|---|---|
| New Year's Day | Double time |
| Martin Luther King Jr. Day | Double time (varies) |
| Presidents' Day | Double time (varies) |
| Memorial Day | Double time |
| Independence Day (July 4th) | Double time |
| Labor Day | Double time |
| Columbus Day / Indigenous Peoples' Day | Double time (varies) |
| Veterans Day | Double time (varies) |
| Thanksgiving Day | Double time |
| Day after Thanksgiving | Double time (many CBAs) |
| Christmas Eve | Double time (some CBAs) |
| Christmas Day | Double time |
| New Year's Eve | Double time (some CBAs) |
Union overtime rules are CBA-specific. Read your agreement carefully — what triggers OT, what triggers DT, how holidays are handled, and whether show-up time applies. These provisions directly impact your labor cost estimates.
Shift Differentials
What Are Shift Differentials?
When work is performed outside normal daytime hours, many agreements (union and prevailing wage) require a premium or different pay structure:
Typical Shift Arrangements
| Shift | Hours | Pay Structure |
|---|---|---|
| Day shift (1st) | 7:00 AM – 3:30 PM (8 hrs) | Regular rate for 8 hours |
| Swing shift (2nd) | 3:30 PM – 12:00 AM (7.5 hrs) | 8 hours pay for 7.5 hours worked |
| Graveyard shift (3rd) | 12:00 AM – 7:00 AM (7 hrs) | 8 hours pay for 7 hours worked |
Shift Premium Calculations
Some agreements use an hourly shift premium instead:
| Shift | Premium |
|---|---|
| 2nd shift | Base rate + $2.00–$5.00/hr |
| 3rd shift | Base rate + $3.00–$7.00/hr |
Special Overtime Situations
Multiple Rates in One Week
When a worker works at different pay rates during the same week (different projects, different classifications):
Weighted average method (FLSA):
- Calculate total straight-time earnings: $40/hr × 30 hrs + $50/hr × 20 hrs = $2,200
- Calculate the weighted average rate: $2,200 ÷ 50 hours = $44.00/hr
- OT premium for hours over 40: $44.00 × 0.5 × 10 OT hours = $220.00
- Total pay: $2,200 + $220 = $2,420.00
Travel Time
| Situation | Compensable? | OT Impact |
|---|---|---|
| Normal commute (home to jobsite) | No | N/A |
| Travel between jobsites during the day | Yes | Counts toward daily/weekly hours |
| Travel to distant jobsite (beyond normal commute) | Excess travel time may be compensable | May trigger OT |
| Out-of-town overnight travel | Per DOL rules — partial compensation | Complex rules apply |
| Prevailing wage zone pay / travel pay | Per wage determination | Separate from OT |
Makeup Time
Some states allow "makeup time" — working extra hours one day to make up for a short day without triggering daily OT:
| State | Makeup Time Allowed? | Conditions |
|---|---|---|
| California | Yes | Written employee request, same workweek, max 11 hrs/day |
| Most other states | N/A (no daily OT) | Only relevant in daily OT states |
Common Overtime Mistakes
| Mistake | Correct Approach |
|---|---|
| Not paying daily OT in California | California requires OT after 8 hrs/day — even if weekly total is under 40 |
| Applying OT to total PW rate (federal) | Federal PW OT applies to basic rate only; fringes stay at ST |
| Pyramiding daily and weekly OT | Worker gets the higher of daily or weekly OT, not both |
| Ignoring union OT rules | CBA OT may exceed legal minimums — always check the agreement |
| Not paying show-up time | If the CBA requires it and the worker reports, you must pay minimum show-up |
| Counting lunch as work time | Bona fide 30-min meal periods (completely relieved) are not work time |
| Using wrong workweek | The workweek must be a fixed, recurring period — you can't change it to avoid OT |
| Averaging hours over 2 weeks | FLSA requires weekly OT calculation — you can't average across pay periods (except hospitals/nursing homes under 8/80) |
| Not paying OT on Saturday/Sunday per CBA | Even if weekly hours are under 40, CBA may require premium for Saturday/Sunday |
Overtime and Estimating
Estimating Overtime Costs
When building labor estimates for projects that involve overtime:
| Factor | Impact |
|---|---|
| OT wage premium | 1.5× or 2× base rate for OT/DT hours |
| Fringe rate | Usually stays at ST rate (check your rules) |
| Payroll taxes | FICA/Medicare on higher wages |
| Workers' comp | Premium on higher gross payroll |
| Productivity loss | OT productivity drops: ~90% in week 1, ~80% by week 3, ~65% sustained |
Productivity Impact of Extended Overtime
| Schedule | Week 1 | Week 2 | Week 3 | Week 4+ |
|---|---|---|---|---|
| 50 hrs/week (5×10) | 92% | 88% | 84% | 80% |
| 60 hrs/week (6×10) | 85% | 78% | 72% | 65% |
| 70 hrs/week (7×10) | 78% | 68% | 60% | 55% |
Source: Construction Industry Institute studies
A 50-hour week doesn't give you 25% more production — it gives you roughly 15% more (after productivity loss). By week 4, you're paying 50% more hours for only 20% more production. Always compare the true cost of overtime vs. adding crew members.
Setting Up Your Payroll System
Checklist for Overtime Compliance
- Identify which laws apply (federal, state, prevailing wage, union CBA)
- Configure your payroll system for the most restrictive rules
- Set up project-level OT rules (different projects may have different requirements)
- Configure daily OT tracking for California and other daily OT states
- Set up shift differential calculations if applicable
- Test OT calculations with sample scenarios before going live
- Train field supervisors on proper time reporting (round time? nearest quarter hour? exact?)
- Document your workweek definition (e.g., Monday 12:01 AM through Sunday midnight)
Related Resources
- Prevailing Wage Guide — How overtime interacts with prevailing wage
- California Prevailing Wage & DIR — CA daily OT rules
- Union Construction Guide — CBA overtime provisions
- Fringe Benefits in Construction — Fringes and overtime
- Worker Classifications — How classification affects OT rates
- Certified Payroll Guide — Reporting OT on certified payroll