FLSA requires that overtime rate of 1.5 x hourly rate is to be paid when 40 hours are physically worked. Most firms, both profit and non-profit, adhere to this standard. Here at the VA, and I imagine many other government agencies, OT at the 1.5 rate is paid whether an employee calls in sick or uses vacation time during the same pay period.
For chronic leave abusers, OT is the perfect way to make extra money and suffer no consequence of their unnecessary abscence.
In my unit, there are several employees who call out sick on a regular basis and are always the first to sign up for overtime to catch up on their work and get paid OT for doing it.
The VA could save countless dollars if the 1.5 x OT rate was paid to only those employees who physically worked 40 hours. OT hours worked during a pay period with some for of leave used would simply be paid at the hourly rate.
This practice would also encourage accountability and quality, reward dependability, and prevent abuse of overtime as a tool to catch up on work that should have been already completed.