Overview
Employers face special challenges when calculating overtime for non-exempt employees, whether paid on an hourly, piece work, or salaried basis. Payroll professionals must take into consideration commissions, bonuses and other special wage payments, piece rates, shift differentials, multiple pay rates, and actual hours worked during a workweek when making their calculations. The One Big Beautiful Bill Act allows employees and independent contractors a tax deduction for qualified overtime compensation. Employers and other payors are required to file information returns with the SSA or the IRS and furnish statements to taxpayers showing the amount of qualified overtime compensation paid to them during the year.
Why Should You Attend
Calculating overtime is not necessarily as simple as taking computing one- and one-half times the employee’s hourly rate. Issues include determination of which employees are eligible for overtime, calculation of the regular rate of pay for overtime-eligible salaried employees, proper handling of bonus, incentive and shift-differential payments. There is a lot more to overtime calculation than initially meets the eye. Mistakes, even honest ones, can be costly. State and federal labor departments regularly issue fines and back pay awards where employers have failed to properly compensate employees for overtime. It is important that payroll professionals know and properly apply the overtime rules.
Learning Objectives
By attending this session you will learn:
· To describe the workweek and explain why it is important
· How to compute the regular rate of pay
· Exceptions to the general computation of the regular rate of pay
· How to convert piece rates to hourly rates
· How to convert salary basis payments to hourly rates
· How to factor non-cash wages into the regular hourly rate
· Which compensation may be excluded from the regular rate of pay
· How to handle special problems that affect the regular rate of pay (retro pay, change in workweek)
· About noncompliant compensation schemes
· New overtime reporting requirements under the OBBBA.
Areas Covered
· Avoiding the pitfalls of artificial wage rates
· When bonus payments must be included in the regular rate of pay
· Computing the regular rate of pay for non-exempt salaried employees
· Allocating retroactive pay increases to affected pay periods
· Computing overtime rates when an employee has multiple regular pay rates
· Salary rates that include overtime pay
· The special challenge of semi-monthly pay periods
· Computing the overtime rate for piece rate workers
