International Employment Lawyer Publishes Article by Noah Finkel and Alex Simon on “No Tax on Tips and Overtime” Rule

International Employment Lawyer featured an article by Noah Finkel and Alex Simon: “Trump’s ‘No Tax on Tips and Overtime’ Rule: A Well-Intended Measure with Unintended Consequences.” Published on December 9, 2025, the piece examines how two temporary tax deductions introduced under the One Big Beautiful Bill Act (OBBBA) are reshaping payroll operations and sparking new compliance challenges.

In the piece, Finkel and Simon explain that while the deductions aim to reduce tax burdens for tipped and overtime-eligible employees, they have created significant complexity for employers. From recalibrating payroll systems to distinguishing FLSA-mandated overtime from other premium pay, businesses face operational hurdles and heightened litigation risk.

"Employees who do not receive overtime pay because they are classified as exempt often sue their employers, claiming that they now should receive back overtime pay and other damages and penalties. The OBBBA in a sense adds insult to injury for those employees classified as exempt: not only do they not receive overtime pay, but they also now do not get the benefit of a tax deduction. That insult may make it more likely that they sue to challenge their exempt classification."

The full article is available here.