Calculating Overtime in 2025: How to Get it Right Every Time

Description:

Calculating overtime pay for nonexempt employees might seem simple on the surface—just count the hours worked beyond 40 in a week and multiply them by 1.5 times the hourly rate, right? Unfortunately, it’s not that straightforward.

The truth is, calculating overtime correctly under the Fair Labor Standards Act (FLSA) requires an understanding of a critical and often misunderstood concept: the regular rate of pay. Introduced in 1938, the regular rate of pay includes far more than just hourly wages—it can encompass nondiscretionary bonuses, commissions, shift differentials, on-call pay, certain cash benefits from Section 125 Cafeteria Plans, and even the reasonable value of meals and lodging.

And once you’ve calculated the regular rate, applying it to determine the correct overtime can get even more complex—especially when bonuses or other variable payments are involved. For instance:

• Does the overtime adjustment apply when the bonus is earned or when it’s paid?
• How do you handle bonuses that cover an entire quarter or year?
• What happens if an error is discovered—can it be costly?

The answer is yes. In FY 2021 alone, the U.S. Department of Labor recovered over $230 million in back wages—more than $138 million of that was for overtime violations. Getting it wrong could expose your business to audits, penalties, civil lawsuits, or even criminal charges in extreme cases.

Key Topics Covered:

• Understanding the FLSA’s definition of overtime—it’s not what most people assume
• How the Portal-to-Portal Act impacts overtime pay
• Calculating the regular rate of pay (with real-world examples)
• Proper tracking of hours worked, including legal rounding practices
• The eight specific exceptions to payments that must be included in the regular rate
• When to include bonuses and how they affect overtime calculations
• How to apply the overtime premium rate correctly
• Calculating overtime when bonuses cover multiple workweeks
• When and how to use the weighted average method
• Understanding the fluctuating workweek method—and when it applies
• The “alternate” method of calculating overtime and its legal limitations
  

Why You Should Attend:

This session will walk you through the step-by-step process of accurately calculating overtime in 2025—using updated DOL guidance. With practical examples, regulatory insights, and common pitfalls to avoid, this webinar is essential for anyone responsible for payroll, HR compliance, or employee compensation.

Who Should Attend:

• Payroll Executives, Managers, and Administrators
• HR Executives, Professionals, and Compliance Officers
• Accountants and Bookkeepers
• Business Owners and Operational Leaders
• Attorneys, Legal Advisors, and Lawmakers
• Anyone handling wage and hour compliance