Yes, overlay is in the scrabble dictionary

...and is worth 14 points by itself.

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Overlay Definition

noun

A layer of decoration, such as gold leaf or wood veneer, applied to a surface.
from The American Heritage Dictionary of the English Language, 4th Edition
A transparent sheet containing graphic matter, such as labels or colored areas, placed on illustrative matter to be incorporated into it.
from The American Heritage Dictionary of the English Language, 4th Edition
An area code whose boundaries are the same as another area code.
from The American Heritage Dictionary of the English Language, 4th Edition
Printing A piece of paper used on a press tympan to vary the pressure that produces light and dark tones.
from The American Heritage Dictionary of the English Language, 4th Edition
Something that is laid over or covers something else.
from The American Heritage Dictionary of the English Language, 4th Edition

verb

Past tense of overlie.
from The American Heritage Dictionary of the English Language, 4th Edition
To lay or spread over or across .
from Free Scrabble Dictionary
To prepare an overlay for.
from Free Scrabble Dictionary

verb-transitive

Printing To put an overlay on.
from The American Heritage Dictionary of the English Language, 4th Edition
To cover the surface of with a decorative layer or design: overlay wood with silver.
from The American Heritage Dictionary of the English Language, 4th Edition
To create (a new area code) having the same boundaries as another: In Maryland, area code 240 was overlaid on top of area code 301.
from The American Heritage Dictionary of the English Language, 4th Edition
To embellish superficially: a simple tune that was overlaid with ornate harmonies.
from The American Heritage Dictionary of the English Language, 4th Edition
To lay or spread over or on.
from The American Heritage Dictionary of the English Language, 4th Edition

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Top Words by points

Points

layover

13

2 letter words with OVERLAY

Points

ae

2

al

2

ar

2

ay

5

el

2

er

2

la

2

lo

2

oe

2

or

2

oy

5

re

2

ya

5

ye

5

yo

5

3 letter words with OVERLAY

Points

ale

3

are

3

aro

3

ave

6

avo

6

aye

6

ear

3

era

3

lar

3

lav

6

lay

6

lea

3

lev

6

ley

6

lye

6

oar

3

ole

3

ora

3

ore

3

ova

6

ray

6

rev

6

roe

3

rya

6

rye

6

var

6

voe

6

yar

6

yea

6

4 letter words with OVERLAY

Points

aero

4

aery

7

aloe

4

arvo

7

aryl

7

aver

7

earl

4

eyra

7

lave

7

lear

4

leva

7

levo

7

levy

10

lore

4

lory

7

love

7

lyre

7

olea

4

oral

4

orle

4

oval

7

over

7

oyer

7

rale

4

rave

7

real

4

rely

7

role

4

rove

7

vale

7

vary

10

veal

7

vela

7

vera

7

very

10

vole

7

yare

7

year

7

yore

7

5 letter words with OVERLAY

Points

early

8

laevo

8

laver

8

layer

8

leary

8

leavy

11

lover

8

lovey

11

ovary

11

ravel

8

ravey

11

relay

8

royal

8

valor

8

vealy

11

velar

8

volar

8

6 letter words with OVERLAY

Points

overly

12

volery

12

7 letter words with OVERLAY

Points

layover

13

overlay

13

Found 104 words in 0.24228 seconds