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FLSA OT Premium (FLSA OT PREM)

One Big Beautiful Bill Act (OB3) – Overtime Premium Reporting

Resources

One Big Beautiful Bill Act (OB3) – Overtime Premium Reporting: What You Need to Know

How Do I Change the FLSA OT Premium Amount That Has Been Reported So Far This Year?

Client Setup Instructions

1. Update Time Entry Options

Navigate to: Payroll Processing → Payroll Entry Setup → Time Entry Options

Update the following settings:

  • Average Overtime Weeks
    • Leave blank for Weekly
    • 2 = Bi-Weekly
    • 3 = Semi-Monthly
    • 5 = Monthly
  • For Semi-Monthly and Monthly payrolls, check the box:
    “Blended Overtime Based on Work Week.”
    FLSA OT PREM 1

  • 2. Verify Memo Calculation Setup

    Confirm the FLSA OT PREM memo calculation is configured correctly.

    • Ensure “Block Display on Reports” is unchecked.
    • The sequence number for the FLSA OT PREM memo calc must be higher than any earning that should be included in the calculation.
    • Any earnings that should not be included must have a sequence number above the FLSA OT PREM memo calc.
    • FLSA OT PREM 3

      3. Verify After the First Payroll Run

      After the first payroll is processed:

      1. Select an employee with FLSA OT PREM on their payroll.

      2. Confirm the calculation is correct.

      Calculation Method

      1. Identify hours worked over 40.

      2. Multiply overtime hours by 1/3 of the overtime rate.

      Important:
      FLSA OT PREM represents the 0.5 portion of the 1.5 overtime rate.

      Example

      Employee: Joe
      Rate: $15/hr
      Hours Worked: 45

      Pay Type

      Calculation

      Amount

      Regular Pay

      40 × $15

      $600

      Overtime Pay

      5 × $22.50

      $112.50

      FLSA OT PREM

      ($22.50 ÷ 3) × 5

      $37.50

      If the FLSA OT PREM calculation is incorrect:

      • Review Hours Worked accumulators

      • Review Regular Earnings accumulators

      • Ensure the correct earnings are included in the calculation.

      If further adjustments are needed, submit a ticket to OPS.

    If FLSA OT PREM Calculates on an Exempt Employee

    If the FLSA OT PREM memo calculation appears for an exempt employee, follow these steps:

    Navigate to: Employee Management → Employee Pay → Memo Calculations

    • Change the Schedule Override to Disabled.

    FLSA OT PREM 3

    Important Notes

    • If an employee does not have an overtime earning on the check, the FLSA OT PREM memo will be $0.
    • This applies to both salaried and hourly employees.
    • The update ensures only employees with overtime earnings receive the FLSA overtime premium calculation.
    • Effective: March 6, 2026
    • This change will not retroactively adjust previously run payrolls.

    Adjustments for Prior Payrolls

    To adjust previously reported amounts:

    How Do I Change the FLSA OT Premium Amount That Has Been Reported So Far This Year?
    https://learning.myisolved.com/library/articles/6819

    Additionally:

    • The “OT and Tips – Employer 2026 Recalc” report will be released March 20, 2026 to assist with prior payroll adjustments.

     

    Client Responsibilities

    Time Clients

    No additional action is required.

    Time Entry Clients

    Clients must report all hours by week using the Time Entry Grid.

    Example:

    • Week 1 → First line
    • Week 2 → Second line
    • Week 3 → Third line

    To additional lines:

    • Press CTRL + ENTER
    • (Mac users may require a different shortcut depending on keyboard settings.)

    Once hours are entered by week, processing continues as normal.

  • FLSA OT PREM 4