You have an employee who earns $25 per hour and works a regular schedule of 40 hours a week. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here’s how employers and employees can successfully manage generative AI and other AI-powered systems. Income limitations apply to be phased out for taxpayers with modified adjusted gross income (MAGI) above $150,000 (single) or $300,000 (joint). Overtime pay was initially subject to the same tax withholding and calculation procedures as regular pay. This final rule rescinds the Independent Contractor Status Under the Fair Labor Standards Act rule (2021 IC Rule, 86 FR 1168), that was published on January 7, 2021.
While collective bargaining agreements cannot waive or reduce FLSA protections, nothing in the FLSA or the Part 541 regulation relieves employers from their contractual obligations under such bargaining agreements. These apply to employees working in bona fide Executive, Administrative, Professional (EAP), Computer, and Outside Sales roles. Earnings may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings.
Employers that have already raised compensation amounts based on the final rule might be considering whether to now decrease amounts based on prior DOL requirements. If you are planning to decrease amounts or are planning to not increase amounts in the future that have been previously communicated (e.g., increases that were planned for January 1, 2025), then you should discuss your strategy with legal counsel. By adhering to FLSA overtime regulations, businesses can avoid penalties, foster a positive work environment, and ensure fair compensation for employees. When determining whether an employee is exempt or non-exempt from receiving overtime, employers in Illinois need to review their employee’s classification against both the federal Fair Labor Standards Act (FLSA) and Illinois Minimum Wage Law. In college football, teams alternate possessions starting on the 25-yard line. If the first team has a turnover that doesn’t result in a touchdown for the defense, then the other team will get a possession on the 25-yard line to try and score.
Wages and the Fair Labor Standards Act
Overall, it seems that fans and analysts alike enjoy college football not ending in a tie for the most part, but very few are happy with the alternating two-point conversions. The popular college sports news site said that the „two-point conversion shootout undermines the integrity of traditional college football.“ CDA will share the IRS’s guidance in the newsroom and weekly member newsletter, Inside California Dentistry, when it’s available.
Determine the Regular Hourly Rate
Payroll taxes are unchanged as Social Security and Medicare taxes (7.65% each) still apply to all overtime earnings. The “no tax on overtime” deduction is then taken by the employee on their individual income tax return, Form 1040. Section in the recently passed legislation, H.R.1, or the One Big Beautiful Bill Act, which was signed into law in 2025, includes a federal tax deduction that could significantly impact overtime-eligible workers and their employers. The “no tax on overtime” provision allows eligible employees to reduce their year-end federal adjusted gross income (AGI) by up to $12,500 ($25,000 for joint filers) when they file their taxes for years 2025 – 2028. Workweeks that exceed 40 hours and result in qualifying overtime pay may be less common in some professions, and the change is primarily an administrative one for employers. Still, employers will need to work with those responsible for processing payroll or contact their payroll provider to ensure they are compliantly tracking and reporting any qualifying overtime pay to the IRS and on W-2 forms and paystubs.
College football overtime rules debate
- The overtime pay rate under FLSA is $25 x 1.5 for a total of $37.50.
- In the NFL’s regular season, there are 10 minutes added to the game clock.
- The rule does not affect overtime requirements for workers who are paid hourly.
- The exemptions do not apply to manual laborers or other “blue-collar” workers who perform work involving repetitive operations with their hands, physical skill and energy.
- Department of Labor (DOL) is the agency responsible for administering and enforcing the FLSA for most employment.
Exempt employees, because of their rate of pay and type of work that they do, are not eligible for overtime pay for hours worked over 40 in a workweek. Nonexempt employees must be paid time and a half for any hours worked more than 40 in a workweek. Even if an employee meets the salary basis and salary level tests, they must also meet specific requirements related to their job duties to qualify for an EAP exemption. The employee’s “primary duty” – the principal, main, or most important duty they perform – is key.
How long is overtime in college football?
This new federal income tax deduction specifically targets the premium portion of overtime pay — or the additional 0.5x regular rate that employees earn for hours worked beyond 40 in a workweek. The deduction applies only to federal income tax withheld from this overtime premium, not regular pay-rate compensation. On April 23, 2024, the United States Department of Labor (DOL) released a final rule on overtime exemption.
- FLSA overtime pay is due on the regular pay day for the period in which the overtime was worked.
- Here are the latest college football overtime rules and how they compare to the NFL.
- Employers must comply, for example, with any Federal, State or municipal laws, regulations or ordinances establishing a higher minimum wage or lower maximum workweek than those established under the FLSA.
- Stated that Draft Form W-2 for 2026 now includes Box 12 codes “TP” (tips) and “TT” (qualified overtime compensation), and new Box 14b for occupation codes.
Crucially, “hours worked” also includes any additional time the employee is “suffered or permitted” to work. This means that if an employer knows or has reason to believe that an employee is performing work (even if it wasn’t requested or authorized), that time generally counts as hours worked and must be paid for. We will explore specific examples of what counts as hours worked in more detail in a later section.
Your Legal Guide: What Is The Future Outlook Of The No Tax On Overtime Law?
The Final Rule substantially increases the number of employees eligible for overtime pay. It is critical that employers understand the rule and its implications for their business. On November 15, 2024, a Texas federal court blocked the increase that was scheduled to go into effect on January 1, 2025 and invalidated the July 1, 2024 increase nationwide.
Applicable Laws and Regulations
Ideal for employers and HR professionals, this members-only toolkit offers essential information on eligibility, salary thresholds, and job duties to ensure compliance and effective workforce management. The rule does not affect overtime requirements for workers who are paid hourly. Where non-cash payments are made to employees in the form of goods or facilities, the reasonable cost to the employer or fair value of such goods or facilities must be included in the regular rate. If you believe an employer has violated the FLSA, please continue through the FLSA Advisor and review the information concerning exemptions, recordkeeping and hours of work prior to contacting the nearest Wage and Hour District Office. Please consult the FLSA Child Labor Advisor prior to contacting the nearest Wage and Hour District Office for further information concerning the child labor provisions of the FLSA.
However, after the implementation of the newly passed law on overtime taxation, the overtime wages of employees have been freed from federal income taxes. For example, healthcare employers frequently face issues with automatic meal break deductions and properly compensating for on-call time or using the “8 and 80” overtime calculation correctly. The construction industry often sees violations related to misclassifying workers as independent contractors, failing to pay for travel time between job sites, or improperly paying piece rates or day rates without accounting for overtime.
As artificial intelligence technology continues to develop, the demand for workers with the ability to work alongside and manage AI systems will increase. This means that workers who are not able to adapt and learn these new skills will be left behind in the job market. Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees. Enter the “No Tax on Overtime” provision, part of the broader One Big Beautiful Bill (OBBBA), enacted into law on July 4, 2025.
There isn’t a time limit on overtime in college football, which prevents the game from ending in a tie. Overtime is decided overall by which team can score the most points in a given overtime period. Once a team scores more points than their opponents in a given OT period, and their opponent is unsuccessful in tying them, the game is over. Here are the latest college football overtime rules and how they compare to the NFL.
According to Akerman LLP, only the overtime premium required by the FLSA qualifies. Overtime mandated by state law or contracts (e.g., daily overtime) is not eligible. Additionally, there will be no changes in the federal income tax withholding tables during the implementation or rollout of the One Big Beautiful Bill Act. The authoritative body announced that we can anticipate new instructions and forms for 2026. However, it is important for you to understand what this law really flsa overtime rules means.