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the process should not overlook effective communication of the changes. Good communication on these issues starts with identifying what has changed, what they mean for employers and employees, and how the new provisions will be implemented. A Separate Overtime Accumulator OBBBA’s overtime provision requires employers, for the first time, to separately report overtime pay amounts on Form W-2, Employee Wage and Tax Statement. What gets reported, however, is only on a portion— generally one-third--of the total gross overtime pay as normally calculated. This is because the law only created a deduction for the “half-time” premium portion of overtime pay that is in addition to the straight time-worked amount for those extra hours. In addition, the law does not recognize additional overtime paid under state law that is more beneficial to workers than the federal standard, such as daily overtime pay, which a few states require. Only amounts for hours worked in excess of 40 in a workweek are qualified to be reported.
Payroll professionals and service providers have enough pieces to put the compliance puzzle for these issues together to avoid compliance exposure, but in the process should not overlook effective communication of the changes.
minimally helpful. Employer penalties related to reporting amounts were waived, and the implementation of another OBBBA provision affecting employers, Trump Accounts, was still far off. This year, with no penalty waiver in sight, employers have more official guidance on the OBBBA, including proposed regulations on the Trump Account program for children. Payroll professionals and service providers have enough pieces to put the compliance puzzle for these issues together to avoid compliance exposure, but in
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GLOBAL PAYROLL MAGAZINE ISSUE 28
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