Overtime pay rules can be confusing for temporary workers because you technically have two entities involved in your work: the staffing agency that employs you and the client company where you work. Understanding how overtime is calculated and who is responsible for paying it protects your earnings.
The Basic Rule: 40 Hours in a Workweek
Under the federal Fair Labor Standards Act (FLSA), non-exempt employees — which includes most hourly temp workers — must be paid at least one and a half times their regular hourly rate for any hours worked beyond 40 in a single workweek. Some states have stricter rules, including daily overtime thresholds. Your state’s labor department website is a good resource for local rules.
Who Pays Your Overtime: The Agency or the Employer?
Because the staffing agency is your employer of record, the agency is typically responsible for calculating and paying your overtime. The client company pays the agency a higher bill rate for overtime hours, but your paycheck comes from the agency.
This means overtime is based on your total hours reported to the agency, not just hours worked at a single client site. If you work at two different client locations in the same week and together they exceed 40 hours, you may still be owed overtime for those additional hours — even though no single employer reached 40 on their own.
Common Overtime Misunderstandings
- Comp time instead of overtime pay: In private-sector employment, offering “time off in lieu of overtime” is generally not permitted under federal law for non-exempt workers. If an agency or employer suggests this, ask your agency for clarification.
- Overtime exemptions: Some workers are classified as exempt from overtime (usually salaried workers in professional, executive, or administrative roles). If you are uncertain about your classification, ask your agency directly.
- Off-the-clock work: If a supervisor asks you to perform tasks before clocking in or after clocking out, those hours count toward your 40-hour threshold. Document them.
What to Do If You Think You Were Not Paid Correctly
Start by reviewing your timesheet and pay stub carefully. If you believe there is an error, contact your recruiter and explain the discrepancy with specific dates and hours. If the issue is not resolved, you have the right to file a wage complaint with your state labor department or the federal Department of Labor. For complex disputes, an employment attorney can provide guidance specific to your situation.
Keeping detailed records of your hours — even a simple notes app log — is one of the easiest ways to protect yourself.