2026 federal OT vs. state

Summary:

One Big Beautiful Bill Act is requiring for 2026 to report the federal OT premium on W2s. This means companies that have employees in states with overtime rules that do not match federal, like California, will have to calculate federal OT hours and feed that to payroll too. Not to pay that OT but to report that amount on the W2 and not the California premium amount. If you use time and labor and have California employees, what are you doing?

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