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Overtime Pay

If you are required to work more that 8 hours a day or more than the standard 40-hour workweek, you can expect to be compensated for the extra time, either by payment at an overtime rate, or by time off on an hour-for-hour basis (known as compensatory time off).

Premium Pay Essentials:

  • Overtime work generally falls into two categories: regularly scheduled overtime work and irregular or occasional overtime.
  • Compensatory time is in lieu of payment for irregular or occasional overtime work. You can only earn compensatory time for regularly scheduled overtime if you are on a flexible work schedule. In that case, you can chose to earn compensatory time off for the irregular or occasional or regularly scheduled overtime work instead of overtime payment.
  • Certain compensatory time policies are established by operating unit heads, so you may find that different parts of Commerce have different policies. For example, one operating unit may limit the number of hours that you may earn while another may not.

Regularly Scheduled Overtime Work

This is overtime that is scheduled by management before the week in which it is worked.

  • Employees are paid at their regular overtime rate for regularly scheduled overtime. The Office of Personnel Management (OPM) maintains tables that show what your hourly base rates and overtime rates are.
  • Overtime pay for regularly scheduled overtime work is credited and paid in ¼ hour units; even a few minutes worked earn an additional ¼ hour.

Irregular or Occasional Overtime Work

This is overtime that is not scheduled in advance, meaning it is irregular or occasional in nature.

  • FLSA non-exempt employees are paid at their regular overtime rate for irregular or occasional overtime.
  • FLSA exempt employees whose rate of pay is above the rate for GS-10, step 10, may be required to take compensatory time off instead of overtime pay. This depends on the policy established for your operating unit.
  • If higher-ranking employees can be given compensatory time, then other employees can choose to take compensatory time instead of overtime pay, but the choice is theirs.
  • Overtime pay for irregular or occasional overtime work is credited and paid at the nearest ¼ hour. A few extra minutes worked does not earn an additional ¼ hour.

Compensatory Time

Since compensatory time is a liability, operating unit heads may set policies governing its accrual. For instance, they can decide whether – or not – FLSA exempt employees above the GS-10 level will be given compensatory time for overtime hours worked. They can also allow lower grade employees to choose compensatory time instead of overtime. They may also set limits on how much compensatory time employees may earn.

There are special rules on the timeframes for use of compensatory time:

  • All employees, FLSA exempt and FLSA nonexempt, must use any compensatory time off that has been earned by the end of the 26th pay period after the pay period during which it was earned.
  • There are also special rules on the payment for compensatory time, and they may be different depending on if you are FLSA exempt or FLSA nonexempt.

For FLSA Nonexempt Employees

  • If you have unused compensatory time at the end of the 26 pay periods, transfer to another agency, or leave the Federal Government, you must be paid for the compensatory time you have left.
  • You will be paid at the overtime rate in effect when you earned the compensatory time.

For FLSA Exempt Employees

  • If you have unused compensatory time at the end of the 26 pay periods, transfer to another agency, or leave the Federal Government, you may get paid for it or you may have to forfeit it. The decision depends on your operating unit policy.

There are some instances where you must be paid for compensatory time and your FLSA status does not make a difference.

  • If you have compensatory time off not used by the end of the 26th pay period and are unable to use it because of separation or placement in a leave without pay status to (1) to perform service in the uniformed services, or (2) due to an on-the-job injury with entitlement to injury compensation under 5 U.S.C. chapter 81.

Miscellaneous Compensatory Time Facts

  • You can’t use compensatory time to reduce or eliminate a balance of advanced sick leave or annual leave.
  • If you transfer to another unit or agency within Commerce, you may be able to transfer any unused compensatory time - it’s up to the new unit - so the amount may be limited. If this happens, you must be paid for the amount that was not transferred, based on your FLSA status (as indicated above).

Biweekly Premium Pay Cap

There is a maximum limit on how much you can be paid each biweekly pay period for your base pay and premium pay, including overtime and compensatory time. This is called the biweekly premium pay cap, or the pay cap.

This is cap on your pay that prevents you from making more during a two-week pay period than either (1) the biweekly rate for a General Schedule (GS) Grade 15, Step 10, employee which is the highest pay rate on the GS pay scale or (2) the pay rate for Level V of the Executive Schedule. The cap is the total of your base pay and premium pay and includes:

  • Sunday differential
  • Sunday differential with night differential
  • Night differential
  • Overtime over 8 hours in a day
  • Overtime over 40 hours in a week
  • Overtime over 8 hours in a day and with night differential
  • Overtime over 40 hours in a week with night differential
  • Overtime call back
  • Holiday worked
  • Compensatory time
  • AUO/ Standby/Availability Pay
  • FLSA overtime

Additional Pay Cap Considerations:

  • If you can’t receive overtime pay because of the pay cap, you also can’t elect to receive compensatory time instead of overtime pay for those hours.
  • If you work over the pay cap, you will not be compensated for it, nor change the time worked to credit hours.
  • The pay cap changes each year if the President authorizes an across-the-board pay increase (or a cost of living allowance).

Compensatory Time for Religious Observance

Everyone – including Senior Foreign Service Officers and Senior Executive Service members – may earn and use compensatory time for religious observance.

  • You can choose to work extra hours and accumulate them so that you can use them later (without using personal leave), if your religious beliefs require you to be absent from work during certain periods of the work week or work day.
  • The extra hours can be earned before or after the time off is taken.
  • If you accumulate religious compensatory time and don’t use it, you can’t be paid at the overtime rate for it.
  • If you leave the Department, you will be paid at your base rate for unused religious compensatory time hours.

For other types of religious observance, such as attending church services on a certain day, you should use alternatives such as annual leave, accrued compensatory time, accrued compensatory time off for travel, leave without pay, and/or credit hours (if you work a flexible schedule).