NEMT Driver Overtime in 2027: Who Gets It, Which Hours Count, and How to Figure It

Overtime catches NEMT owners in the gaps of the day: the three-hour dialysis wait, the split shift, the week a driver covers extra will-call returns. The rule itself is short. The work is in deciding which hours count and which rate to multiply. This guide covers both, with worked pay examples you can check against your own payroll.

When NEMT drivers are owed overtime

The Fair Labor Standards Act requires covered employers to pay at least one and a half times the regular rate for every hour over 40 in a workweek (29 U.S.C. 207(a)(1)). It covers every employee of a business with at least $500,000 in yearly sales and two or more employees, and any worker whose own job regularly involves interstate commerce, such as trips to other states (Labor Department Fact Sheet #14). Many states have their own overtime law as well, listed in the Labor Department’s state table (updated July 1, 2026).

The workweek rules are strict:

• One fixed workweek. A workweek is a fixed, recurring period of 168 hours. It can start on any day and hour, but once set it stays put (29 CFR 778.105).
• Each week stands alone. You cannot average 30 hours one week with 50 the next, even if you pay every two weeks (29 CFR 778.104).
• Days do not matter under federal law. Work on a Saturday, Sunday, or holiday earns overtime only if it takes the week past 40, and federal law sets no limit on weekly hours for workers 16 and older.
• Pay it on time. Overtime is due on the regular payday for the period in which the workweek ends (29 CFR 778.106).
• No comp time. Time off in place of overtime pay is allowed only for public agencies (29 U.S.C. 207(o)).
• No 14-day period. The optional 14-day overtime period in 29 CFR 778.601 is limited to hospitals and residential care establishments.

A salary does not remove overtime either. The white-collar exemptions need a salary of at least $684 a week (as of September 2026), plus executive, administrative, or professional duties. They do not apply to blue-collar workers who do routine manual and physical work (29 CFR 541.3).

Calling a driver a contractor does not remove it either. If the driver is an employee under the wage law, every rule on this page applies. See are NEMT drivers 1099 or W-2.

Why the Motor Carrier Act exemption rarely fits NEMT

Section 13(b)(1) of the Act exempts from overtime some drivers whose hours the Department of Transportation can regulate. The Labor Department’s Fact Sheet #19 (revised November 2009) says it applies only when all three of these are true:

1. The employer is a motor carrier. A company that provides motor vehicle transportation for pay is one, so a NEMT company can meet this part.
2. The driver’s work affects safe driving in interstate commerce. Highway trips from one state to another clearly count (29 CFR 782.7(b)(1)). A driver who has not crossed a state line can still qualify if the company does interstate work and the driver could reasonably be sent on such a trip. The exemption then lasts four months from the date the driver made, or could have been called on to make, an interstate trip.
3. The small vehicle exception does not apply. Overtime is owed in any workweek the driver works, even in part, on vehicles of 10,000 pounds or less in interstate commerce. The exception does not cover vehicles designed or used to carry more than 8 passengers, driver included, for pay.

Field Assistance Bulletin 2010-2 (November 4, 2010) explains how the Labor Department measures a vehicle:

• Weight is the gross vehicle weight rating on the door jamb label, not the scale weight.
• Seats come from the vehicle’s current design and the capacity on the door jamb plate.
• Wheelchair spaces count. When seats were removed for a wheelchair, the count is the remaining seats plus 1 for each wheelchair position. Seats you bolt in are not counted unless the vehicle was recertified.

Put together, it looks like this for a NEMT fleet:

Your vehicle	Trips stay in your state	Some paid trips cross a state line
Sedan, minivan, or wheelchair van rated 10,000 pounds or less, 8 or fewer people counting the driver and each wheelchair position	Overtime owed	Overtime owed
Van rated 10,000 pounds or less, more than 8 people counting the driver and each wheelchair position, carrying riders for pay	Overtime owed	The exemption can apply for 4 months after an interstate trip, except in weeks the driver also drives a small vehicle across state lines
Vehicle rated 10,001 pounds or more	Overtime owed	The exemption can apply for 4 months after an interstate trip, except in weeks the driver also drives a small vehicle across state lines

Here is how the count works. A wheelchair van with 4 seats, the driver’s seat included, and 1 wheelchair position counts as 5 people, so it is a small vehicle. A high-roof van with 6 seats, the driver’s included, and 3 wheelchair positions counts as 9, which is over the line.

A few more limits keep most NEMT staff out of the exemption:

• Airport rides are not interstate by themselves. Rides between an airport and points in the same state do not count, unless the ride is part of a through ticket or similar arrangement with the airline (Field Operations Handbook 24c04).
• Dispatchers and office staff are never exempt. The exemption covers only drivers, driver’s helpers, loaders, and mechanics (Fact Sheet #19).
• State law is separate. State overtime laws set their own exemptions. Check yours before you rely on the federal one.

The DOT number guide explains which federal safety rules come with interstate trips.

The taxicab exemption

The Act also exempts any driver employed by a business operating taxicabs (section 13(b)(17)). The Labor Department’s Field Operations Handbook (24h01) describes that business as rides in small vehicles to any destination a passenger asks for, run without fixed routes or contracts for recurrent transportation. Broker contracts and standing dialysis rides are contracts for recurrent transportation. Dispatching, general clerical work, and general repair work are not exempt work, and a driver who spends more than 20 percent of a week on them loses the exemption that week (24h03 and 24h04). Plan on paying overtime unless a labor attorney tells you in writing that your company fits.

Which hours count: waits, split shifts, and the drive to the first pickup

Overtime starts once hours worked pass 40, so the first question is always which hours count. The federal hours-worked rules apply to the NEMT day like this:

Time in the day	Counts as work?	Rule
A required pre-trip inspection or cleaning of the van at the start of the day	Yes, and the workday starts then	29 CFR 785.24
Driving between pickups and drop-offs	Yes	29 CFR 785.38
Waiting at a clinic while the driver must stay with the van or the rider	Yes	29 CFR 785.15 and 785.16(b)
Waiting near a clinic for a will-call return with no set time	Yes, when the driver cannot use the time as their own	29 CFR 785.15 and 785.17
A gap where you release the driver in advance until a set time, long enough to use as their own	No	29 CFR 785.16(a)
Free to go home, only asked to answer the phone	No	29 CFR 785.17
Rest breaks of 5 to 20 minutes	Yes	29 CFR 785.18
A meal break of about 30 minutes or more, fully off duty	No	29 CFR 785.19
The normal drive from home to the first pickup	No	29 CFR 785.35
Driving a company van home and back, within your normal commuting area, under an agreement with the driver	No	29 U.S.C. 254(a)
Reporting to your lot to get the van or instructions, then driving to the first pickup	Yes, from the lot	29 CFR 785.38
Finishing trip logs or collecting signatures after clocking out	Yes	29 CFR 785.11 to 785.13
Required training, such as passenger assistance or defensive driving	Yes	29 CFR 785.27

The regulation’s own example fits a long NEMT wait. A truck driver who must wait at the destination and look after the employer’s property is working while waiting. A driver who arrives at noon and is completely and specifically relieved from duty until 6 p.m. is not (29 CFR 785.16(b)). The off-duty rule needs both parts: you tell the driver in advance that they may leave and exactly when to be back, and the gap is long enough to use for their own purposes.

That is how a split shift works too. Take a driver on a dialysis run from 4:30 to 10:00 a.m. and again from 1:00 to 6:00 p.m. The three-hour gap is unpaid only if you released the driver in advance until 1:00 p.m. If the driver has to stay at the center with the van, or wait for a will-call you cannot time, all of it is work. Write the release and return time on the driver timesheet. The scheduling side is in NEMT driver schedules, and will-call returns are explained in will-call trip.

Work you did not ask for still counts if you know about it. A rule against off-the-clock work is not enough. Management must enforce it (29 CFR 785.13).

How to figure the regular rate

Overtime is multiplied from the regular rate, not from the base hourly rate:

Regular rate = the week’s total pay, minus excluded payments ÷ all hours worked that week

For hourly pay, each overtime hour earns one and a half times the rate. For trip, mile, day-rate, and bonus pay, the driver has already been paid straight time for every hour, so you owe an extra half of the regular rate for each hour over 40 (29 CFR 778.111 and 778.112).

Goes into the regular rate	Stays out of it
Hourly, per-trip, per-mile, and day-rate pay	Mileage and other expense reimbursements that reasonably match the cost, such as for a driver’s own car (29 CFR 778.217)
On-time, attendance, and other bonuses you announce in advance	Bonuses where both whether to pay and how much are up to you at or near the end of the period (29 CFR 778.211)
A lower rate you set for waiting time, averaged in with the driving rate (29 CFR 778.318)

Three more rules matter:

• The state minimum is the floor. Where a state minimum wage is higher than $7.25, the regular rate cannot be lower than it (29 CFR 778.5).
• Bonuses paid later still count. A monthly or quarterly bonus is spread back over the weeks it covers, and each week with overtime earns an extra half-time amount on its share (29 CFR 778.209).
• Nonproductive hours must be paid. A plan that pays only for trips and ignores waits breaks the law. You may pay waits at a lower rate, at least the minimum wage, if you agree on it in advance (29 CFR 778.318).

Worked pay examples

Each example is one workweek. The pay rates and hours are examples, not market rates. See NEMT driver pay for real pay data.

Hourly driver with an on-time bonus

$17 an hour, 50 hours worked, and a $50 on-time bonus promised in advance.

Line	Amount
Straight time, 50 hours × $17	$850.00
On-time bonus	$50.00
Regular rate, $900 ÷ 50 hours	$18.00
Overtime premium, 10 hours × half of $18.00	$90.00
Total pay	$990.00

Paying 10 hours at $25.50 on the base rate and adding the bonus comes to $985.00. That is $5.00 short, every week the driver earns the bonus.

Per-trip driver in a busy week and a week of long waits

$14 for each completed one-way trip, 50 hours worked both weeks, in Missouri, where the minimum wage is $15.00 as of July 1, 2026.

	Busy week	Week of long waits
Trips	58	42
Trip pay at $14	$812.00	$588.00
Trip pay per hour worked	$16.24	$11.76
Minimum wage top-up, 50 hours at $15.00	$0	$162.00
Regular rate	$16.24	$15.00
Overtime premium, 10 hours × half the regular rate	$81.20	$75.00
Total pay	$893.20	$825.00

The slow week costs you $825 for 42 trips, about $19.64 a trip, against about $15.40 in the busy week. Put your own trip counts into the NEMT driver cost calculator.

Lower rate for waiting time

By written agreement made in advance, $18 an hour driving and $12 an hour waiting. The driver works 36 driving hours and 12 waiting hours, in a state with no daily overtime and a minimum wage of $12 or less, such as Pennsylvania or Texas ($7.25 as of July 1, 2026).

Line	Amount
Driving, 36 hours × $18	$648.00
Waiting, 12 hours × $12	$144.00
Regular rate, $792 ÷ 48 hours	$16.50
Overtime premium, 8 hours × half of $16.50	$66.00
Total pay	$858.00

Without an agreement on a waiting rate, every hour is owed at the $18 driving rate: 40 hours at $18 plus 8 hours at $27, or $936.00 (29 CFR 778.318(b)).

Day rate for a dialysis route

$160 a day for a fixed dialysis route, 5 days, 47 hours worked including the waits between runs.

Line	Amount
Day pay, 5 × $160	$800.00
Regular rate, $800 ÷ 47 hours	$17.02
Overtime premium, 7 hours × half of $17.02	$59.57
Total pay	$859.57

Driver who also dispatches

$17 an hour for 32 hours of driving and $20 an hour for 12 hours of dispatching, 44 hours in all.

Line	Amount
Driving, 32 × $17	$544.00
Dispatching, 12 × $20	$240.00
Regular rate, the weighted average, $784 ÷ 44 hours	$17.82
Overtime premium, 4 hours × half of $17.82	$35.64
Total pay	$819.64

You may instead agree in advance to pay overtime hours at one and a half times the rate for the work done in those hours (29 CFR 778.419). See how to hire a NEMT dispatcher.

Salaried driver

A salary of $800 for a 40-hour week makes the regular rate $20 (29 CFR 778.113). In a 45-hour week, the driver earns the $800 plus 5 hours at $30, or $950. A fluctuating workweek salary, which covers all hours whatever the count, is allowed only under the conditions in 29 CFR 778.114, including a clear understanding with the driver and a salary that meets minimum wage in the longest weeks.

State overtime rules that add to federal law

State rules add to the federal ones, and meeting one never excuses the other (29 CFR 778.5). The Labor Department’s state table, updated July 1, 2026, includes these extra rules that hit NEMT schedules:

State	What it adds
California	Time and a half after 8 hours in a day, after 40 in a week, and for the first 8 hours on the seventh day of work in a week. Double time after 12 hours in a day and after 8 hours on the seventh day (Labor Code 510).
Alaska	Time and a half after 8 hours in a day or 40 in a week, except at employers with fewer than 4 employees
Nevada	Time and a half after 8 hours in a day for employees earning less than 1.5 times the state minimum wage
Kentucky	Time and a half on the seventh day for employees who work all seven days of the workweek

California has two exceptions to know. Its transportation wage order, IWC Order 9, drops its overtime section for employees whose hours are set by the federal hours-of-service rules or by the California Highway Patrol’s hours rules, and for taxicab drivers (sections 3(L) and 3(M)). The Highway Patrol regulates buses, which in California include paid vehicles designed or used for more than 10 people, driver included (Vehicle Code 233 and 34500). Federal overtime after 40 hours still applies unless a federal exemption does. Ask a California employment attorney which rules reach your drivers.

Overtime on the 2026 W-2 and the new tax deduction

From 2025 through 2028, workers can deduct up to $12,500 a year ($25,000 on a joint return) of qualified overtime compensation, under P.L. 119-21. The IRS defines it as pay above the regular rate that section 7 of the Fair Labor Standards Act requires, such as the “half” in time and a half (Publication 15, 2026). In the examples above, the overtime premium lines are that amount. For a driver paid $17 an hour with no bonus, it is $8.50 of each $25.50 overtime hour.

What you do as the employer:

1. Track the required premium separately in payroll. Overtime paid only because of a state rule, such as California’s daily overtime, is not required by section 7, so keep it apart.
2. Report it on the 2026 W-2 in box 12 with code TT, a new code for 2026 (Instructions for Forms W-2 and W-3, 2026). The IRS gave employers transition relief for 2025.
3. File by February 1, 2027, the deadline for 2026 Forms W-2 with the Social Security Administration.
4. Keep withholding Social Security and Medicare on overtime pay. The deduction is for income tax only. Drivers may file a new Form W-4 to lower their withholding, and you must use it.

See NEMT business taxes for your other payroll filings.

What overtime mistakes cost

• Back pay, doubled. An employer who breaks the overtime rule owes the unpaid overtime plus an equal amount as liquidated damages (29 U.S.C. 216(b)).
• Two or three years back. Claims reach 2 years of pay, or 3 years if the violation was willful (29 U.S.C. 255(a)).
• Penalties. Repeated or willful violations can bring a civil penalty of up to $2,515 per violation, as of September 2026 (29 CFR 578.3).

Your records are your defense. For each driver, keep the day and time the workweek starts, the hours worked each workday and each workweek, the basis of pay, and the regular rate in any week with overtime (29 CFR 516.2). Keep payroll records for 3 years, and time cards and rate tables for 2 years (29 CFR 516.5 and 516.6). Rounding punches to the nearest 5, 6, or 15 minutes is accepted only if it averages out and never shorts drivers over time (29 CFR 785.48). Your trip logs back up the hours, so keep them in the same file. See NEMT trip documentation.

How to keep overtime under control

1. Set one workweek in writing, such as Sunday at 12:00 a.m. through Saturday at 11:59 p.m., and keep it.
2. Record every start, stop, wait, and release on a timesheet, including the time a driver is told to be back.
3. Release drivers in writing during long gaps, with a return time, when you do not need them near the van.
4. Check each driver’s week by Thursday, and give Friday and Saturday trips to part-time drivers before a full-time driver passes 40. See part-time NEMT drivers.
5. Put every bonus rule in writing, and add promised bonuses into the regular rate.
6. Count dispatch and office hours worked by drivers in the same week.
7. Price overtime into your trip rates before you accept a new broker or facility contract, with the NEMT driver cost calculator.
8. Recheck state minimum wages and overtime rules before each January 1, and rerun your trip, day-rate, and salary plans against them.