The Ultimate Guide to Missouri Overtime Laws & Compliance

Missouri employers need to stay informed about overtime laws to avoid compliance issues and payroll mistakes. Even small errors in calculating overtime pay can lead to financial penalties and strained relationships with employees. A clear understanding of state and federal requirements helps keep operations running smoothly.

Missouri largely follows federal overtime rules, but there are specific details employers must know to calculate pay accurately. Keeping precise records of hours worked is not just a suggestion—it's a mandatory practice for meeting payroll obligations. Employers who overlook these requirements risk significant consequences.

Below, we break down Missouri's overtime thresholds, including weekly limits, record-keeping responsibilities, and how industry-specific exceptions may apply to certain workplaces.

Understanding Missouri's Overtime Threshold

Missouri follows the Fair Labor Standards Act (FLSA) for overtime pay requirements. Employees who work more than 40 hours in a single workweek must receive overtime pay at 1.5 times their regular hourly rate. This rule applies to all non-exempt employees, regardless of their industry or type of employment.

Unlike some states, Missouri does not require daily overtime pay for hours worked beyond eight in a single day. The focus remains on the total hours worked during the workweek. However, specific industries may have separate rules requiring daily overtime pay. Employers in industries with unique regulations should verify compliance with both state and federal guidelines.

Tracking employee hours accurately is essential for meeting overtime requirements. Employers should document start times, end times, breaks, and total hours worked each week. Detailed records protect employers in disputes over unpaid wages and ensure payroll calculations remain accurate.

Determining Eligibility: Exempt vs. Non-Exempt

Employee classification directly impacts overtime pay eligibility under Missouri law. Most employees fall into the non-exempt category, meaning they must receive overtime pay for any hours worked beyond 40 in a single workweek. However, certain roles meet criteria for exemption, and employers must apply these standards carefully to avoid legal or financial consequences.

Key Exemption Standards

Exempt employees must meet three specific criteria outlined by the FLSA:

1. Salary Level: Employees must earn a minimum salary of $844 per week, which equals $43,888 annually for full-time roles. This threshold excludes hourly workers and ensures exempt employees are paid on a consistent salary basis.

2. Duties Requirements: Job responsibilities must align with one of three exemption categories:

3. Executive Roles: Include managing two or more employees and having decision-making authority over hiring or firing.

4. Administrative Roles: Focus on office or non-manual work directly related to business operations, requiring independent judgment.

5. Professional Roles: Involve work requiring advanced knowledge in a field of science or learning, typically obtained through specialized education.

6. Consistent Salary Basis: Exempt employees must receive a fixed salary, regardless of the number of hours worked. While bonuses or commissions can be part of their compensation, the base salary must meet the required threshold.

Misclassification Consequences

Misclassifying non-exempt employees as exempt can lead to significant repercussions. Employers may owe unpaid overtime, face penalties, and risk employee lawsuits. Even unintentional misclassification doesn't shield businesses from liability. Reviewing job descriptions and pay structures regularly helps ensure compliance and protects against costly errors.

Overtime Pay Calculations

Accurate overtime calculations ensure compliance and fair compensation. Employers must calculate overtime pay at 1.5 times the employee's regular rate of pay for all hours worked over 40 in a single workweek. However, determining the regular rate involves more than just the hourly wage.

Regular Rate of Pay Breakdown

The regular rate of pay includes all earnings tied to the employee's work, not just base wages. This includes:

• Commissions: Any commission earned must be allocated across the relevant workweek(s) and added to the regular rate.

• Nondiscretionary Bonuses: Bonuses tied to performance, attendance, or other measurable goals must be included.

• Shift Differentials: Additional pay for working specific shifts, such as nights or weekends, must also be factored in.

To calculate the regular rate, divide all qualifying earnings for the week by the total hours worked. This provides the baseline for overtime pay calculations.

Time-and-a-Half Calculation

Once the regular rate is determined, multiply it by 1.5 to find the overtime rate. Apply this rate to all hours worked beyond 40 in the workweek.

For example:
An employee earns $15 per hour and works a night shift with a $2 per hour differential. If they work 45 hours in the week:

• Regular rate = $15 base + $2 differential = $17/hour

• Overtime rate = $17 x 1.5 = $25.50/hour

• Overtime pay = 5 overtime hours x $25.50 = $127.50

Employers must include all applicable earnings—such as bonuses or commissions—when determining the regular rate for each workweek. Overlooking any part of an employee's compensation can lead to underpayment and compliance issues. Accurate calculations protect both employers and employees.

Tipped and Commission-Based Employees

Overtime laws in Missouri apply to tipped and commission-based employees just as they do to hourly and salaried workers. Employers must calculate overtime accurately to ensure compliance and avoid costly mistakes.

Tipped Employees

Tipped employees, such as waitstaff or bartenders, must receive overtime pay based on Missouri's full minimum wage, not their reduced tipped wage. For 2025, the minimum wage in Missouri is $13.75 per hour. The overtime rate is calculated by multiplying the full minimum wage by 1.5.

• Example Calculation: $13.75 x 1.5 = $20.63 per overtime hour.

Employers may use a tip credit to count tips toward meeting the minimum wage, but this does not reduce the base rate used for overtime calculations. If tips don't bring an employee's pay to at least the full minimum wage for regular or overtime hours, employers must make up the difference.

Commission-Based Employees

For commission-based employees, overtime pay is calculated using the regular rate of pay, which includes both base hourly wages (if applicable) and commissions earned during the workweek. Employers must determine the total compensation for the week and divide it by the total hours worked to establish the regular rate.

• Steps to Calculate Overtime for Commission Employees:

• Add all commissions earned during the workweek to any base hourly wages.

• Divide the total compensation by the total hours worked to find the regular rate.

• Multiply the regular rate by 1.5 for all hours worked over 40.

For example, if a commissioned sales employee earns $400 in commissions and works 45 hours in one week, with a $10 hourly base wage:

• Total compensation = $400 (commissions) + $400 (40 hours x $10/hour) = $800.

• Regular rate = $800 ÷ 45 hours = $17.78/hour.

• Overtime rate = $17.78 x 1.5 = $26.67/hour.

• Overtime pay = 5 hours x $26.67 = $133.35.

Important Considerations

Employers cannot use tip credits or commission structures to bypass overtime obligations. All earnings, including nondiscretionary bonuses tied to performance or sales, must be included when calculating the regular rate. Missteps in these calculations can result in underpayment, back wages, and penalties.

Accurate payroll practices for tipped and commission-based employees protect businesses from compliance risks and ensure fair pay for workers.

Mandatory vs. Voluntary Overtime

Employers in Missouri have the right to require employees to work overtime, provided all overtime hours are compensated correctly under Missouri labor laws. For non-exempt employees, this means paying time-and-a-half for any hours worked over 40 in a single workweek under state and federal law. The ability to mandate overtime gives employers flexibility to address workload demands but requires careful consideration of employee rights and workplace dynamics.

Advance Notice for Overtime Assignments

Missouri labor laws do not mandate advance notice for scheduling overtime. Employers can assign overtime on short notice, even for the same day. While this is legally permissible, frequent unplanned overtime can disrupt employees' personal schedules and create additional stress. Setting clear expectations about overtime policies during onboarding or in employee handbooks can prevent misunderstandings and reduce last-minute frustrations.

For example, an employer might outline that overtime may occasionally be required during peak business periods, such as holiday seasons or major project deadlines. Providing context for why overtime is necessary helps employees understand its purpose while setting realistic expectations for scheduling.

Balancing Workplace Needs and Employee Morale

Requiring overtime can impact employee morale, especially if it becomes frequent or feels unfairly distributed. Overworked employees may experience burnout, lower engagement, or even seek employment elsewhere. To avoid these issues, employers should consider how mandatory overtime is assigned and communicated.

Some practical approaches include:

• Assigning overtime equitably among team members to avoid overburdening specific employees.

• Offering voluntary overtime opportunities before making it mandatory.

• Recognizing employees who consistently step up for overtime with bonuses, gift cards, or additional paid time off.

Listening to employee concerns about mandatory overtime is equally important. Regularly asking for feedback through team meetings or anonymous surveys can help employers identify patterns of dissatisfaction or stress. Taking proactive steps to address these concerns shows employees their well-being matters, building trust while meeting operational needs.

Recordkeeping and Compliance

Accurate timekeeping is key to complying with overtime laws in Missouri. Every hour worked, from start to finish, must be documented clearly and consistently. For businesses managing remote or flexible schedules, reliable time tracking becomes even more important to avoid payroll mistakes.

Employers are required to retain timesheets and payroll records for at least three years. These records act as proof of compliance in the event of wage disputes or audits. Missing or incomplete documentation can lead to serious legal and financial repercussions.

What Details to Record

Detailed records ensure payroll accuracy and compliance. The following data points should always be captured for every non-exempt employee:

• Start and End Times: Log the exact times employees begin and end their shifts. Avoid rounding unless it aligns with regulations.

• Break Periods: Record all unpaid or paid breaks, including meal periods. Ensure breaks are accurately categorized to avoid payroll discrepancies.

• Overtime Hours: Track hours worked beyond 40 in a single workweek separately from regular hours.

Consistency in tracking these details helps maintain compliance and reduces the risk of disputes over wages.

How to Store Records Safely

Maintaining records is only effective if they are stored securely and easily accessible. Employers should prioritize systems that protect employee data and streamline retrieval processes:

1. Digital Timekeeping Systems: Use software that logs employee hours automatically, reduces manual entry errors, and provides backup options.

2. Restricted Access: Limit access to payroll systems and timesheets to authorized personnel. Implement encryption and strong passwords to safeguard sensitive information.

3. Routine Reviews: Conduct regular checks of timekeeping and payroll records. Address any inaccuracies immediately to maintain compliance and avoid penalties.

Clear, organized, and secure recordkeeping protects employers from liability and ensures employees are paid fairly for their work.

Handling Overtime Exemptions and Errors

Missteps in classifying employees for overtime exemptions can lead to compliance issues and financial penalties. One common error is assuming all salaried employees qualify as exempt without verifying if their job duties meet the required standards. Employers must go beyond job titles and salaries to ensure classifications align with federal and state regulations.

Common Misclassification Errors

• Skipping the Duties Test: Employers often overlook the specific job responsibilities needed to meet exemption criteria, such as supervising employees or exercising independent judgment in their roles.

• Failing to Adjust for Updated Salary Requirements: Exempt employees must earn a minimum salary threshold, which changes periodically. Ignoring these updates can result in misclassified employees.

• Neglecting Compensation Rules: Nondiscretionary bonuses or commissions can count toward salary thresholds, but only under strict guidelines. Misapplying these rules can create payroll discrepancies.

Misclassification errors don't just violate wage laws—they can also lead to employee dissatisfaction and audits. Regularly reviewing job descriptions and pay structures helps prevent these issues.

Steps to Correct Payroll Errors

If payroll mistakes occur, addressing them promptly is necessary to prevent further complications. Employers should take the following steps:

1. Audit Payroll Records: Review work hours and compensation data to identify the scope of the error.

2. Calculate Overtime Owed: Determine the unpaid overtime for each affected employee, factoring in all eligible earnings like bonuses and shift differentials.

3. Issue Corrected Payments: Pay back wages promptly and provide a detailed breakdown to employees, showing how the corrections were calculated.

4. Document the Process: Maintain detailed records of the error, the resolution, and any changes made to payroll processes to prevent recurrence.

Taking immediate action demonstrates good faith and can protect employers from additional penalties.

Seeking Expert Guidance

Employee classifications and payroll compliance can be complex, especially for businesses with diverse roles or fluctuating work hours. When issues arise or uncertainty exists, seeking professional advice can mitigate risks.

• Legal Advisors: Employment attorneys can assess classifications, identify noncompliance, and recommend solutions to meet legal standards.

• HR Professionals: Consultants can provide audits, training, and tools to ensure payroll processes meet regulatory requirements.

Proactive measures reduce the likelihood of future errors and maintain trust with employees.

Frequently Asked Questions (FAQ)

Missouri's overtime laws can often raise practical concerns for employers. Below are direct answers to common questions to help clarify how to manage overtime pay accurately and fairly.

Do I have to pay overtime if my employee works unauthorized extra hours?

Yes, employers must pay for all hours worked, including unapproved overtime. If an employee exceeds 40 hours in a workweek, overtime pay is mandatory under both state and federal law.

While you can enforce workplace policies to prevent unauthorized overtime, such as requiring pre-approval, withholding overtime pay is not an option. Disciplinary measures like issuing warnings or revising schedules can address unauthorized work without violating wage laws.

Are paid holidays counted toward the 40-hour threshold?

No, paid time off for holidays or vacations does not count as hours worked when calculating overtime eligibility. Only actual hours worked during the week are considered for overtime pay calculations.

However, if an employment contract or company policy states that paid holidays are included in overtime calculations, employers are obligated to follow those terms. Always review internal policies to ensure they align with payroll practices.

Is there a maximum number of overtime hours allowed under Missouri law?

Missouri law does not limit the number of overtime hours an employee can work. Employers can require employees to work as many hours as needed, provided all hours beyond 40 in a workweek are compensated at the overtime rate.

While legally permissible, excessive overtime can impact employee morale and productivity. Employers should balance operational demands with reasonable work schedules to minimize burnout.

Can employees waive overtime rights in Missouri?

No, employees cannot waive their right to overtime pay. Agreements between employers and employees to forgo overtime compensation are not legally valid.

For example, even if an employee agrees to work extra hours at their regular hourly rate, employers are still required to pay overtime for all hours exceeding 40 in a workweek. Compliance with state and federal law is non-negotiable, regardless of informal arrangements.

For employers managing overtime compliance, clear policies and accurate tracking systems are key to avoiding disputes.

Navigating overtime laws in Missouri requires attention to detail and a commitment to fair pay practices. By understanding the nuances of employee classifications, calculating overtime accurately, and maintaining detailed records, you can protect your business from compliance risks and build trust with your team. If you're looking for a comprehensive solution to streamline your HR processes and ensure payroll accuracy, book a demo with GoCo today to see how we can help.