Common Overtime Mistakes That Cost Pay

Most overtime mistakes are not exotic. They come from using the wrong hours, the wrong regular rate, the wrong state rule, or the wrong exemption label.

This checklist covers the mistakes that most often lead to underpaid overtime and shows where to verify the calculation inside OvertimeIQ.

1. Averaging two workweeks together

Overtime is usually calculated by workweek. A 48-hour week and a 32-hour week do not cancel each other out under the federal weekly overtime rule.

2. Treating salary as automatically exempt

Salary is only one part of the exemption analysis. Duties, salary basis, and salary level also matter. If the worker is salaried but non-exempt, overtime may still be owed.

3. Ignoring bonuses and premiums

Non-discretionary bonuses, commissions, shift differentials, and some incentive payments can increase the regular rate. If payroll excludes them, overtime may be too low. Use the regular rate of pay calculator to recalculate the correct rate when bonuses or commissions are in the same workweek.

4. Missing daily overtime states

A federal-only calculation can miss overtime in states with daily triggers, double-time rules, seventh-day rules, or industry-specific wage orders.

5. Leaving remote work off the clock

Off-hours messages, short support tasks, required logins, and interrupted meal breaks can count as hours worked. Remote teams need a clear reporting process and a way to correct missed time before payroll closes.