Union Workers: Know Your Overtime Rights & Tax Rules

Union membership provides critical protections, especially regarding fair pay for extra hours. Here’s a breakdown of your rights and the current tax landscape.

Collective Bargaining and the FLSA

The Fair Labor Standards Act (FLSA) is the federal law that establishes minimum wage, overtime pay, recordkeeping, and youth employment standards. It's the baseline protection for most workers in the United States.

Your Collective Bargaining Agreement (CBA), the contract negotiated by your union, builds on top of the FLSA. A CBA cannot waive your FLSA rights, but it can—and often does—provide superior benefits:

• Higher Overtime Rates: While the FLSA mandates at least 1.5x your regular rate, a CBA might secure double-time pay for Sunday or holiday work.
• Stricter Workday Definitions: A CBA may require overtime pay for any hours worked beyond 8 in a single day, whereas the FLSA only looks at hours worked over 40 in a week.
• Inclusion of Differentials: The agreement will specify how things like night shift differentials are included in your regular rate of pay when calculating overtime.

The Davis-Bacon Act & Prevailing Wage

For union members in the construction trades, the Davis-Bacon and Related Acts are particularly important. On any federally funded construction project valued at more than $2,000, contractors must pay workers the "prevailing wage."

This prevailing wage is determined by the Department of Labor and reflects the wages and fringe benefits typically paid for similar work in that specific local area. This ensures that government contracts don't drive down local wages and working conditions. Check out our post on OBBB savings for construction workers for more info.

A Note on Union Dues

A significant change for union members came with the Tax Cuts and Jobs Act of 2017. Previously, you could deduct union dues as a miscellaneous itemized deduction. This deduction has been eliminated for W-2 employees.

This means you can no longer write off your union dues on your federal tax return. This provision is set to expire after 2025, but for now, it's not a deductible expense.

To understand your full tax picture, use our tax calculator and review our general guides on overtime deductions and tax write-offs.