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in excess of daily, as well as weekly, standards specified in the subsection. Under these provisions, when an employee works in excess of both the daily and weekly maximum hours standards in any workweek for which such an exemption is claimed, he must be paid at such overtime rate for all hours worked in the workweek in excess of the applicable daily maximum or in excess of the applicable weekly maximum, whichever number of hours is greater. Thus, if his total hours of work in the workweek which are in excess of the daily maximum are 10, and his hours in excess of the weekly maximum are 8, overtime compensation is required for 10 hours, not 18.

(b) Standards under section 7(b). The partial exemptions provided by section 7(b) apply to an employee under the conditions specified in clause (1), (2), or (3) of the subsection "if such employee receives compensation for employment in excess of 12 hours in any workday, or for employment in excess of 56 hours in any workweek, as the case may be, at a rate not less than one and one-half times the regular rate at which he is employed." As an example, suppose an employee is employed under the other conditions specified for an exemption under section 7(b) at an hourly rate of $2.40 and works the following schedule:

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Number of overtime hours: Daily, 5 (hours over 12); weekly, 12 (hours over 56).

Since the weekly overtime hours are greater, the employee is entitled to pay for 12 hours at $3.60 an hour (112×$2.40), a total of $43.20 for the overtime hours, and to pay at his regular rate for the remaining 56 hours (56×$2.40) in the amount of $134.40, or a total of $177.60 for the week. If the employee had not worked the 8 hours on Saturday, his total hours worked in the week would have been 60, of which five were daily overtime hours, and there would have been no weekly overtime hours under the section 7(b) standard. For such a schedule the employee would be entitled to 5 hours of overtime pay at time and one-half (5×

112 $2.40 $18) plus the pay at his regular rate for the remaining 55 hours (55×$2.40 $1.32), making a total of $150 due him for the week.

(c) Standards under section 7(c). The partial exemption from the general overtime provisions provided by section 7(c) applies to an employee employed by an employer in work subject to such exemption "if such employee *** receives compensation for employment by such employer in excess of 10 hours in any workday, or for employment by such employer in excess of 50 hours in any workweek, as the case may be, at a rate not less than one and one-half times the regular rate at which he is employed." This may be illustrated by such an employee working the following schedule, whose regular hourly rate is $2.

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Number of overtime hours: Daily, 6 (hours over 10); weekly, 4 (hours over 50).

Since the daily overtime hours are greater, the employee must receive overtime compensation of $3 an hour for 6 hours (11⁄2× $2×6=18) in addition to his pay at his regular rate for the remaining 48 hours ($2×48-$96) or a total of $114 for the week. If the employee had worked 12 hours instead of eight on Friday, making a total of 58 hours in the week, his daily overtime hours and weekly overtime hours for the week would be equal in number-8 hours for each-in which event $24 would be due for these overtime hours at the $3 rate and $100 would be due for the remaining 50 hours at the regular rate of $2, so that his total pay required for the week would be $124.

(d) Standards under section 7(d). The partial exemptions from the general overtime provisions provided by section 7 (d) apply to an employee employed by an employer in work subject to such an exemption "if such employee *** receives compensation for employment by such employer in excess of 10 hours in any workday, or for employment in excess of 48 hours in any workweek, as the case may be, at a rate not less than one and onehalf times the regular rate at which he is em

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Following the method of computation used in the examples in paragraphs (b) and (c) above of this section, the employee in the first of these weeks would be entitled to pay of $150 (18X12 $2= $54 for overtime plus 48 × $2=$96), and in the second week must be paid $146 (18×12 × $2=$54 for overtime plus 46 × $2-$92) in order to satisfy the requirements of section 7 (d).

(e) Application of section 7(a) in lieu of special provisions. (1) An employer's agreement with his employees' collective bargaining representative under section 7(b) (1) or (2) must include a provision requiring payment, during the period covered by the agreement, for overtime in excess of 12 hours in a workday or 56 hours in a workweek as specified in section 7 (b) if the exemption from the general overtime pay requirements of section 7(a) is to apply. See Cabunac v. National Terminals Corp., 139 F.2d 853.

(2) Under section 7 (b) (3) an employee otherwise qualified for the partial exemption in any workweek who does not receive the daily or weekly overtime compensation specified is required to be paid overtime compensation as prescribed in section 7(a).

(3) Under section 7(c) or 7(d), which operate only as partial exemptions from the overtime requirements of section 7(a), the fact that an employee otherwise subject to the exemption works overtime in excess of the specified daily hours on 1 or more days in the workweek will not

make the employer liable for any payment at overtime rates if the employee's total hours of work in the workweek are not in excess of the maximum applicable to him under section 7 (a). For example, an employee who works two 15-hour days in the workweek (30 hours) is not required to be paid for overtime on either a daily or a weekly basis under the Act. Different rules apply, however, to employees whose hours of work in a workweek exceed the maximum specified in section 7(a). These rules are discussed in subparagraphs (4) and (5) of this paragraph.

(4) Whenever hours in excess of those specified in section 7(a) are worked by an employee in any workweek which has been selected for application of the provisions of section 7(c) or 7(d) to the employees at the establishment by which he is employed as described in § 526.10, § 526.11, or § 526.12 of this chapter (see also §§ 516.18-516.19 of this chapter), such employee, if otherwise qualified for application of section 7 (c) or 7 (d) to him, must be paid overtime compensation as required by the special standards of the applicable subsection. An employer who chooses to apply the partial overtime exemption provided therein to his operations at a particular establishment must apply the conditions prescribed by the applicable subsection to all his eligible employees, not otherwise exempt, who are employed there. Thus, if an employee otherwise qualified for the partial exemption provided by section 7 (c) works three 15-hour days in a workweek selected by the employer for application of such exemption to employees in the establishment where the employee is employed, at least time-and-one-half overtime compensation must be paid him for the 15 hours he has worked in excess of the 10-hour daily standard prescribed in that subsection. The employer, having chosen the particular workweek for application of the exemption to his employees qualified there for who are engaged in the work of the establishment, cannot avoid liability under the special overtime provisions of section 7(c) through the device of withdrawing his claim of exemption for an individual employee because in such workweek the hours worked by the employee happen to be such that section 7(a), if section 7(c) were not applicable, would be satisfied by the payment of a lesser amount of overtime compensation. Thus, in the exa laiven the Act and the applicable regula

REGULATIONS-PART 778

tions do not permit the employer to satisfy his overtime obligation by electing to pay for 5 hours of weekly overtime under section 7(a) in lieu of the 15 hours of daily overtime under section 7(c). As stated in the Senate Report (S. Rept. No. 1487, 89th Cong. 2d sess., pp. 15, 16, 31) with respect to the provisions of section 7 (c) and (d), during the workweeks which they specify as "the maximum aggregate period of exemption available to an employer" the statute "will require compensation for hours worked in excess of" the daily or weekly hours specified in the applicable subsection which "must be at least 111⁄2 times the regular rate of pay."

(5) In any workweek in which an employer is operating under such partial exemption at an establishment and in which the overtime compensation due an employee would be greater under section 7(a) than under the special overtime provisions of such partial exemption, a failure by the employer to compensate the employee in accordance with the special provisions leaves the employer liable for the larger amount of overtime compensation required by section 7(a) in that week. For example, if an employee subject to the special overtime provisions of section 7(c) or 7 (d) worked 11 hours on 1 day and 8 hours on each of 4 other days for a total of 43 hours in the workweek, failure to pay daily overtime compensation for 1 hour as required by the special provisions would leave the employer liable for an overtime payment for 3 overtime hours under section 7(a). This is so because these partial exemptions from the overtime requirements of section 7(a) are made conditional upon payment of overtime compensation in accordance with the special overtime provisions prescribed for the exemption and an em

ployer who fails to make such payment is accordingly not relieved of his overtime obligation under section 7(a). See Wirtz v. Osceola Farms Co., 372 F. 2d 584 (C.A. 5); Holtville Alfalfa Mills v. Wyatt, 230 F. 2d 298.

Section 778.603 Special overtime provisions for residential care establishments under section 13(b) (8) and for bowling establishments under section 13(b)(19).

The Act provides partial exemptions from its general overtime provisions for any employee employed by an establishment which is a residential care institution (other than a hospital) described in section 13 (b) (8) or a bowling establishment as set forth in section 13(b) (19), if such employee "receives compensation for employment in excess of 48 hours in any workweek at a rate not less than one and one-half times the regular rate at which he is employed." These provisions permit employment of such an employee for as many as 48 hours in any workweek without payment of extra compensation for overtime, if the employee is paid at least one and one-half times his regular rate for all hours worked in excess of that number. The regular rate is determined in the same manner as under section 7(a) of the Act in accordance with the principles discussed in this part. An employee otherwise qualified for the partial overtime exemption under one of these provisions who does not receive the specified overtime compensation for hours worked in excess of 48 in any workweek is required to be paid overtime compensation as precribed in section 7(a) for hours worked in excess of the maximum workweek applicable under that subsection.

U.S. GOVERNMENT PRINTING OFFICE: 1969

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