Overtime rules for field crews: what federal law counts and what it does not

Field crews blow past 40 hours in busy season. That is normal. The problems start when the hours are counted wrong: drive time left off, a bonus ignored in the overtime math, a crew lead put on salary and assumed exempt. Each of those is a common source of back-pay claims against small service companies, and each is avoidable.

This guide covers the federal rules from the Department of Labor's Wage and Hour Division as published in October 2026. Many states have their own overtime, break and pay rules, some stricter than federal law; the Department of Labor says employers must comply with both. Find your state's labor agency on our state start pages. Treat this page as general information rather than legal advice.

What is the federal overtime rule?

The Department of Labor puts it plainly: covered employees must receive overtime pay for hours worked over 40 in a workweek at a rate not less than one and a half times their regular rate of pay. Three details matter for crews:

• The workweek is fixed. The Department defines it as a fixed block of 168 hours, made of seven straight 24-hour periods, that repeats every week. It does not have to match the calendar week, but once set, it stays put. Pick one and write it down.
• No averaging. Each workweek stands alone, and the Department does not allow multi-week averaging. Fifty hours one week and thirty the next means ten hours of overtime, even though the two-week total is 80.
• No federal daily overtime or weekend premium. The FLSA does not require extra pay for Saturdays, Sundays or holidays, or for long days, as long as the week stays at or under 40. Your state may treat daily hours differently.

Overtime earned in a workweek should generally be paid on the regular payday for that period.

Which hours count for a field crew?

This is where most crews get it wrong. The federal hours-worked rules are laid out in the Department of Labor's Fact Sheet 22, summarized here:

The shop-to-first-job and job-to-shop drives are where weeks quietly cross 40. Our onboarding guide covers how to explain these rules to new hires on day one so the timesheet matches reality.

How do bonuses and commissions change overtime?

Overtime is figured on the regular rate, not just the base hourly wage. The Department of Labor says all compensation for hours worked, services rendered or performance must be included, apart from specific exclusions. In practice:

• Included: nondiscretionary bonuses (production bonuses, attendance bonuses, any bonus announced in advance to encourage work), commissions, shift differentials, piece-rate pay.
• Excluded: truly discretionary bonuses, where both the decision to pay and the amount are at your sole discretion and not promised in advance; gifts not tied to hours or production; paid vacation, holiday and sick pay; expense reimbursements; benefit plan contributions.

The Department's Fact Sheet 56C gives the method and a worked example. An employee paid $10 an hour works 43 hours and earns a $50 nondiscretionary bonus. Total pay of $480 divided by 43 hours gives a regular rate of $11.16. Half of that, $5.58, times 3 overtime hours adds $16.74 of overtime premium. Swap in your own numbers; the steps do not change.

1. Total straight-time pay for all hours plus any included bonus or commission.
2. Divide by total hours worked that week. That is the regular rate.
3. Multiply the regular rate by 0.5, then by the overtime hours. That is the premium owed on top of straight time.

If a bonus or commission covers several weeks and is figured later, federal rules allow you to pay overtime on the base rate first, then go back and pay the extra overtime once the amount is known, spreading it over the weeks it was earned. Our commission guide covers that calculation for sales reps, and our guide to keeping good technicians covers bonus plans worth designing.

Can you put a crew lead or foreman on salary to avoid overtime?

Usually not. Salary is only one part of the test. Under the current rules, most exempt executive, administrative and professional employees must be paid a salary of at least $684 per week ($35,568 a year), the 2019 level the Department of Labor restored after a 2024 increase was vacated in court. On top of that, the job duties must fit an exemption.

For the executive exemption, the Department's Fact Sheet 17A requires that the primary duty be managing the enterprise or a recognized department, that the employee regularly direct the work of at least two full-time employees or the equivalent, and that the employee have authority to hire or fire, or have their recommendations on those decisions given particular weight. The fact sheet also says job titles do not determine exempt status, and that the exemptions do not apply to manual laborers and other blue-collar workers who do repetitive work with their hands, physical skill and energy.

A working foreman who spends most of the day running equipment alongside the crew is very likely nonexempt, salary or not. If you pay a nonexempt employee a salary, you still owe overtime for hours over 40.

What records do you need to keep?

For each nonexempt employee, the FLSA requires you to record hours worked each workday and each workweek, the regular hourly rate, straight-time and overtime earnings, additions and deductions, total wages and pay dates. The Department's recordkeeping fact sheet sets retention at three years for payroll records and two years for time cards. It also says employers may use any timekeeping method they choose, as long as it is complete and accurate.

When a dispute arrives, the employer with clean daily records usually wins the argument, and the employer with "about 50 hours a week" usually writes a check.

What changed with the overtime tax deduction?

For tax years 2025 through 2028, eligible employees can deduct up to $12,500 ($25,000 on a joint return) of qualified overtime compensation from federal taxable income, with a phase-out above $150,000 of modified adjusted gross income ($300,000 joint). The IRS defines qualified overtime as the premium portion, the pay above the regular rate, for overtime required under section 7 of the FLSA. Overtime paid only because of a state law or a contract does not count.

For employers, the practical change is reporting. Starting with 2026 Forms W-2, the qualified overtime amount goes in box 12 with code TT. Overtime is still subject to withholding. Your payroll system can only report the right number if your hours and regular-rate math are right, which is one more reason to fix timekeeping. Our payroll guide covers the rest of the year-end filings.

How do you keep overtime under control?

• Route tighter. Less drive time between jobs means fewer paid hours that produce nothing.
• See the week as it happens. If Thursday morning shows a tech at 38 hours, you can rebalance Friday instead of discovering it at payroll.
• Price for overtime. If busy-season weeks always run long, build the premium into your seasonal pricing.
• Pay it cleanly. Crews who trust the paycheck do not leave over it.

A custom CRM can track clock-ins against the schedule and flag anyone heading past 40 before the week ends, using the workweek you defined. If you want to know where else your operation leaks money, start with our free system quote.

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