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What Business Owners Get Wrong about Overtime and The FLSA

Faith, Hope and Payroll Podcast

Most business owners think they understand overtime—until an audit reveals years of miscalculations and a back-pay liability they never saw coming. Eric Jones and David Franzonello of Workforce PayHub break down everything you actually need to know: how the FLSA defines overtime, who qualifies as exempt and why, how the new no-tax-on-overtime benefit works at tax time, and how to calculate weighted average overtime correctly before it becomes a costly compliance problem.  In This Episode: * How the FLSA actually defines overtime—and why the common assumption that 10 hours in a day triggers overtime pay is wrong * What the no-tax-on-overtime law delivers for your employees, how the premium is calculated, and why withholding still comes out of every paycheck * The salary threshold and three duties tests (executive, administrative, and professional) that determine whether your employees are legally exempt from overtime * How weighted average overtime works when employees earn multiple pay rates in the same week—and the back-pay and IRS penalties that accumulate when you calculate it wrong for years * When it makes sense to voluntarily pay overtime to exempt employees, how salaried non-exempt arrangements work, and what union contracts mean for your overtime obligations Chapters: * 00:00: Introduction * 00:28: What Is Overtime? * 02:14: No Tax on Overtime Explained * 06:35: Healthcare Workers' Special Rule * 11:29: The Salary Threshold Test * 13:27: The 2024 Salary Rule Fight * 17:29: The Three Duties Tests * 24:27: Weighted Average Overtime * 31:10: Salaried Non-Exempt Options * 35:26: Holiday Pay & Voluntary Overtime * 37:44: Union Contracts & Overtime * 41:37: Sundays, Employee Dignity & Overtime Policy Resources Mentioned: * Workforce PayHub * Overtime Pay — U.S. Department of Labor * One, Big, Beautiful Bill Provisions — IRS Produced by Saint Kolbe Studios