Overtime Laws in Kentucky 2026: Pay Rates, Exemptions & Tax Deduction (2026)

Does Kentucky have overtime laws?

Yes. Kentucky has its own overtime law under KRS § 337.285, which requires employers to pay nonexempt employees at 1.5 times their regular rate for all hours worked over 40 in a workweek. Kentucky also has a unique 7th consecutive day rule under KRS § 337.050, requiring overtime pay for all hours worked on the 7th consecutive day of a workweek when the employee has been permitted to work all seven days.

What is the overtime rate in Kentucky in 2026?

The overtime rate in Kentucky is 1.5 times the employee’s regular rate of pay. Based on the Kentucky minimum wage of $7.25/hour, the minimum overtime rate is $10.875/hour. Kentucky does not require double time at any threshold.

Does Kentucky require daily overtime?

No. Overtime in Kentucky is calculated on a weekly basis only. Working more than 8 hours in a single day does not trigger overtime under Kentucky or federal law unless total hours in the workweek exceed 40. The only day-specific rule Kentucky has is the 7th consecutive day provision under KRS § 337.050.

What is the 7th day overtime rule in Kentucky?

Under KRS § 337.050, if an employee works all 7 consecutive days within a single workweek and the employer has permitted this, all hours worked on the 7th day are paid at 1.5× the regular rate — regardless of whether the employee’s total weekly hours reach 40. The employer may credit this 7th-day overtime payment against any overtime already owed under the 40-hour weekly rule for those same hours.

Is mandatory overtime legal in Kentucky?

Under federal law, employers can generally require adult employees to work overtime. Kentucky does not have state-level general restrictions on mandatory overtime. Kentucky is an at-will employment state, and employees who refuse mandatory overtime may face disciplinary action or termination, unless a contract or collective bargaining agreement provides otherwise. All mandatory overtime hours must be paid at the applicable overtime rate.

Am I exempt from overtime in Kentucky?

Exemption depends on both salary level and job duties. Under the FLSA, employees must earn at least $684/week on a salary basis AND perform executive, administrative, professional, computer, or outside sales duties. Kentucky does not set a higher state salary threshold. State-law exemptions also cover agricultural workers, qualifying retail/service establishment employees, and certain domestic service workers.

Can salaried employees get overtime in Kentucky?

Yes. Being paid a salary does not automatically make an employee exempt from overtime. Salaried employees who earn less than $684/week, or who do not perform the qualifying duties under 29 C.F.R. Part 541 and 803 KAR 1:070, are nonexempt and entitled to overtime pay for hours over 40 in a workweek.

Is overtime taxed in Kentucky?

Overtime pay is subject to both federal income tax and Kentucky state income tax at the current 4% rate. For federal taxes, FLSA-covered nonexempt employees may deduct up to $12,500 ($25,000 for joint filers) of the premium portion of their overtime from federal taxable income for tax years 2025–2028 under the One Big Beautiful Bill Act (IRC § 225). However, this federal deduction does not apply to the Kentucky state income tax return for tax year 2025, as Kentucky’s IRC conformity date predates the federal law. Monitor the Kentucky LRC for updates on HB 26, which would create a separate state exclusion if enacted.

How do I calculate the federal overtime tax deduction?

For time-and-a-half pay, the deductible amount (qualified overtime compensation) equals one-third of total overtime pay. For example, if you earned $6,000 in total overtime at time-and-a-half, the qualified overtime compensation is $2,000. The IRS confirms this calculation method in Notice 2025-69. The deduction is claimed on Schedule 1-A of Form 1040.

Source: IRS Notice 2025-69 — https://www.irs.gov/newsroom/questions-and-answers-about-the-new-deduction-for-qualified-overtime-compensation

How do I file an overtime complaint in Kentucky?

File a wage claim online with the Kentucky Education and Labor Cabinet, Division of Wages and Hours at https://apps.labor.ky.gov/onlinecomplaint/, or call (502) 564-3534. Alternatively, contact the U.S. DOL Wage and Hour Division at 1-866-487-9243 or online at https://www.dol.gov/agencies/whd/contact/complaints. The Kentucky statute of limitations for wage claims is 3 years; the FLSA deadline is 2 years (3 if willful).

Can my employer fire me for refusing overtime in Kentucky?

In most cases, yes. Kentucky is an at-will employment state, and employers may discipline or terminate employees who refuse overtime, unless a law, contract, or collective bargaining agreement provides otherwise. However, employers cannot retaliate against employees for filing a wage complaint or participating in an overtime investigation under KRS § 337.990 and 29 U.S.C. § 215(a)(3).

Can my employer give comp time instead of overtime pay in Kentucky?

Under Kentucky law and the FLSA, private-sector employers cannot substitute comp time for overtime wages. Employees of private employers who work overtime must be paid at 1.5× their regular rate in cash. The Kentucky Education and Labor Cabinet states: “Comp time may not be given to an employee who is subject to the overtime law.” Public-sector employers (county, charter county, urban-county, and consolidated local government) may provide comp time in lieu of overtime upon written request by the employee, at 1.5 hours of comp time per overtime hour worked (KRS § 337.285).

Does working on weekends or holidays count as overtime in Kentucky?

Not automatically. Under both the FLSA and KRS § 337.285, working on weekends or holidays does not by itself constitute overtime. Overtime depends on total hours worked in the workweek (over 40) or the 7th-consecutive-day rule. However, if weekend work causes total hours to exceed 40 in the workweek, those additional hours are overtime.

What is the statute of limitations for overtime claims in Kentucky?

Under Kentucky law: 3 years from the date of the violation (KRS § 337.385, as amended by HB 320, effective July 15, 2024). Under the FLSA: 2 years (3 years if the violation is willful). Employees with claims arising before July 15, 2024, may still be able to file under the prior 5-year period. The longer applicable deadline governs.

What happens if my employer doesn’t pay overtime in Kentucky?

Employees may recover unpaid overtime wages, liquidated damages equal to the unpaid amount, reasonable attorney’s fees, and court costs under both KRS § 337.385 and 29 U.S.C. § 216(b). In cases involving forced labor, KRS § 337.385 provides for punitive damages of at least 3× the back wages owed. The employer may avoid liquidated damages by demonstrating good faith and reasonable grounds for believing no violation occurred.

What is the Kentucky 7th day rule and how does it interact with weekly overtime?

Under KRS § 337.050, employees who work 7 consecutive days in a workweek are entitled to 1.5× pay for all hours on the 7th day. This rule only applies when the employer has permitted the employee to work all seven days and is limited by certain exemptions (supervisors, railway workers, telephone exchange employees with fewer than 500 subscribers, and others). Critically, the employer may credit the 7th-day overtime payment against any weekly overtime pay owed under KRS § 337.285 for the same hours — the employee cannot receive double overtime for the same hours.