In the United States, the Fair Labor Standards Act of 1938 applies to employees in industries engaged in, or producing goods for, interstate commerce. The FLSA establishes a standard work week of 40 hours for certain kinds of workers, and mandates payment for overtime hours to those workers of one and one-half times the workers' normal rate of pay for any time worked above 40 hours. The law creates two broad categories of employees, those who are "exempt" from the regulation and those who are "non-exempt". Under the law, employers are not required to pay exempt employees overtime but must do so for non-exempt employees. Independent contractors are not considered employees and are not protected by the FLSA. Several factors determine whether a worker is an employee, who might be entitled to overtime compensation, or an independent contractor, who would not be so entitled. That an employment agreement states that a party is an independent contractor does not mean that this is necessarily so.

Classes of workers who are exempt from the regulation include certain types of administrative, professional, and executive employees. To qualify as an administrative, professional, or executive employee and therefore not be entitled to overtime, three tests must be passed based on salary basis, duties, and salary level. The tests vary between administrative, professional, and executive employees based on their different duties and salary levels. There are many other classes of workers who may be exempt including outside salespeople, certain agricultural employees, certain live-in employees, and certain transportation employees. Employees cannot waive their FLSA protections and cannot abridge them by contract.