Varnum recently hosted a webinar addressing employee bonuses, overtime calculations, Fair Labor Standards Act (FLSA) compliance, and new reporting obligations under the One Big Beautiful Bill Act (OBBBA). The program provided practical guidance for HR professionals, payroll administrators, and employers managing wage and hour compliance obligations in 2026 and beyond.
Below are key takeaways regarding overtime pay requirements, nondiscretionary bonuses, and OBBBA reporting obligations.
Many employers use bonuses to support employee retention, productivity, and performance goals. However, under the FLSA, certain bonuses must be included in an employee’s regular rate of pay when calculating overtime compensation.
At the same time, the OBBBA introduces new payroll reporting requirements related to qualified overtime compensation and qualified tips for tax years 2025 through 2028. Employers should review payroll systems and compensation practices now to reduce compliance risks.
The FLSA requires nonexempt employees to receive overtime pay at one and one-half times their regular rate of pay for hours worked over 40 in a workweek. A workweek is typically a fixed and recurring period of 168 hours. Compensable time may include work performed at home, travel time, waiting time, training, and probationary periods.
The regular rate of pay is not always the same as an employee’s hourly wage....
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