Many counties pay time-and-a-half (i.e., premium rate) when non-exempt, courthouse employees work more than 35 hours a week, even though overtime is not required under the FLSA until the employee works more than 40 hours per week. Similarly, many law enforcement agencies also pay a premium rate when employees work more than 80 hours in a 14-day work period, even though overtime is not required under Section 7(k) until the employee has worked more than 86 hours in a 14-day work period. In fact, many times these types of payments are required by collective bargaining agreements.
We’ve received many questions on the NIRMA Helpline of whether counties need to stop making these types of premium payments. In short, no—the OBBBA does not limit the employer’s ability to continue to make those types of premium payments. The OBBBA only limits the employee’s ability to claim a deduction for “qualified overtime compensation.” Therefore, the employee would only be able to claim the deduction for the compensation that constitutes “qualified overtime compensation”—that is, the overtime required by the FLSA. In this case, the half-time compensation paid for hours worked over 40 per work week in the case of the non-exempt courthouse or over 86 hours in the 14-day work period in the case of the law enforcement officer.
Neither the OBBBA or the FLSA prohibit an employer from being more generous—that is, paying premium pay for work outside of the employee’s normal work schedule, even if it is not required by the FLSA. The employee simply cannot claim a deduction under the OBBBA for that compensation.
EXAMPLE: Martin’s employer has a practice of paying overtime at a rate of two times his regular rate of pay. Martin was paid $20,000 in overtime pay under that practice, although 29 U.S.C. § 207 only requires his employer to pay at one and one-half times the regular rate. Martin’s last pay stub for 2025 shows an “overtime premium” of $10,000 paid in 2025 (which is Martin’s overtime premium paid at a rate of two times his regular rate). For purposes of determining the amount of qualified overtime compensation received in tax year 2025, Martin may include $5,000 ($10,000 divided by 2).
