When does overtime apply, eight hours in a day or forty hours in a week?
The FLSA requires that overtime be paid after 40 hours worked in a week. Vacation, personal, sick, holiday or any other form of unworked paid time is not required to be included in the 40 hour calculation.

Hours may not usually be averaged between workweeks except under specific circumstances; the payroll cycle (pay frequency) does not make a difference. Normally, a workweek is defined as a fixed period of 168 hours or seven consecutive 24-hour work periods.

It is not necessary to pay overtime for more than eight hours worked in a given day, unless the employer is in a state with such a requirement. Federal regulations do not address the number of hours worked in a day. Many companies choose to pay overtime after a certain number of hours in a day, or after 32 hours worked in a holiday week, but there is no requirement by the FLSA to do so.

The rate at which overtime is paid is usually 1 1/2 times the regular rate of pay in effect for that workweek. It is important to note that this is not limited to the standard rate of pay for an employee. The regular rate of pay includes supplemental payments made (e.g. bonuses), as well as commissions. If a person worked at several different rates of pay during the week, these must be averaged to determine the actual rate of pay for overtime calculations.

What this means is that the employer should divide the total earnings for the week by the total hours to find the effective rate of pay. This rate is then used to calculate the overtime premium rate.