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OF THE CODE OF FEDERAL REGULATIONS

Overtime

UNIVERSITY
OF MICHIGAN

AUG 6 1958

Compensation

LIBRARY

UNDER THE FAIR LABOR STANDARDS ACT

OF 1938 AS AMENDED

[Text of the Code up to and including January 1957 and Federal Register amendments issued thereafter up to and including March 31, 1958]

UNITED STATES DEPARTMENT OF LABOR
JAMES P. MITCHELL, Secretary

Wage and Hour and Public Contracts Divisions
CLARENCE T. LUNDQUIST, Acting Administrator
WASHINGTON, D. C.

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778.15 "Task" Basis of Payment..

AUTHORITY: Sections 778.0 to 778.27 issued under 52 Stat. 1060, as amended; 29 U. S. C. 201-219. SOURCE: Sections 778.0 to 778.27 appear at 15 F. R. 623, Feb. 4, 1950; 15 F. R. 843, Feb. 16, 1950, except as otherwise noted.

PRIOR ADMENDMENTS

1949: 14 F. R. 3077, June 8; 14 F. R. 4946, Aug. 11.

UNITED STATES OF AMERICA

Section 778.0 INTRODUCTORY

STATEMENT

(a) Scope and significance of this part

1

The Fair Labor Standards Act of 1938, as amended (hereinafter referred to as the act), requires that no employer shall employ any of his employees (who is engaged in commerce or in the production of goods for commerce and who is not exempt from the overtime provisions pursuant to one or more of the specific exemptions provided in the act) for a workweek longer than 40 hours unless such employee receives compensation for his employment in excess of 40 hours at a rate not less than one and one-half times the regular rate at which he is employed. What constitutes proper overtime compensation must be ascertained in the light of the definition of "regular rate" as well as other provisions relating to overtime set forth in the act as amended by the Fair Labor Standards Amendments of 1949 giving due regard to authoritative interpretations by the courts and to the legislative history of the act, as amended. Interpretations of the Administrator of the Wage and Hour Division with respect to overtime compensation are set forth in this part to provide “a practical guide to employers and employees as to how the office representing the public interest in the enforcement of the law will seek to apply it."3 These interpretations, with respect to the maximum hours and overtime provisions of the act, indicate the construction of the law which the Administrator believes to be correct and which will guide him in the performance of his administrative duties under the act unless and until he is otherwise directed by authoritative decisions of the courts or concludes, upon reexamination of an interpretation, that it is incorrect.

Under the Portal-to-Portal Act of 1947,* interpretations of the Administrator may, under certain circumstances, be controlling in deter

129 U. S. C. 201-219, 251-262. 229 U. S. C. 201-208, 211-217.

3 Skidmore v. Swift & Co., 323 U. S. 134.

4 29 U. S. C. 251-262.

mining the rights and liabilities of employers and employees. The interpretations contained in this part are interpretations on which reliance may be placed as provided in section 10 of the Portal-to-Portal Act, so long as they remain effective and are not modified, amended, rescinded, or determined by judicial authority to be incorrect. However, the omission to discuss a particular problem in this part or in interpretations supplementing it should not be taken to indicate the adoption of any position by the Administrator with respect to such problem or to constitute an administrative interpretation or practice or enforcement policy.

CODIFICATION: In paragraph (a), the word "new" appearing in the second sentence immediately before the word "provisions" was deleted and footnotes 1, 2, and 4 were amended to read as set forth below, 21 F. R. 4949, July 4, 1956.

(b) Coverage and exemptions not discussed

This part does not deal with the general coverage of the act or various specific exemptions provided in the statute, under which certain employees within the general coverage of the wage and hours provisions are wholly or partially excluded from the protection of the act's minimum-wage and overtime-pay requirements. Some of these exemptions are selfexecuting; others call for definitions or other action by the Administrator. Regulations and interpretations relating to general coverage and specific exemptions may be found in other parts of this chapter.

(c) Earlier interpretations superseded.

All general and specific interpretations issued prior to August 11, 1949, with respect to the overtime provisions of the act were rescinded and withdrawn by section 778.3 of the general statement on this subject, published in the Federal Register on that date as Part 778 of this chapter to the extent that they were inconsistent or in conflict with the principles stated therein." To the extent that interpre

514 F. R. 4946. Certain prior interpretations were superseded earlier as explained in statements published in the Federal Register on August 6, 1948, 13 F. R. 4534, and June 8, 1949, 14 F. R. 3077.

tations contained in such general statement or in releases, opinion letters, and other statements issued on or after August 11, 1949, are inconsistent with the provisions of the Fair Labor Standards Amendments of 1949, they do not continue in effect after January 24, 1950. Effective on January 25, 1950, this interpretative bulletin (Sections 778.0 to 778.27 of this part) replaces and supersedes the general statement previously published as Part 778 of this chapter, which statement is withdrawn. Effective on January 25, 1950, all other administrative rulings, interpretations, practices and enforcement policies relating to the overtime provisions of the act and not withdrawn prior to such date are, to the extent that they are inconsistent with or in conflict with the principles stated in this interpretative bulletin, rescinded and withdrawn.

CODIFICATION: Footnote 6 to paragraph (c) was amended to read as set forth below, 21 F. R. 4949, July 4, 1956.

Section 778.1 RELATION TO OTHER

LAWS

Various Federal, State and local laws require the payment of minimum hourly, daily or weekly wages different from the minimum set forth in the Fair Labor Standards Act, and the payment of overtime compensation computed on bases different from those set forth in the Fair Labor Standards Act. Where such legislation is applicable and does not contravene the requirements of the Fair Labor Standards Act, nothing in the act, the regulations or the interpretations announced by the Administrator should be taken to override or nullify the provisions of these laws. Compliance with other

Section 16 (c) of the Fair Labor Standards Amendments of 1949 (set out as note under 29 U. S. C. 208) provides:

Any order, regulation, or interpretation of the Administrator of the Wage and Hour Division or of the Secretary of Labor, and any agreement entered into by the Administrator or the Secretary, in effect under the provisions of the Fair Labor Standards Act of 1938, as amended, on the effective date of this act, shall remain in effect as an order, regulation, interpretation, or agreement of the Administrator or the Secretary, as the case may be, pursuant to this act, except to the extent that any such order, regulation, interpretation, or agreement may be inconsistent with the provisions of this act, or may from time to time be amended, modified, or rescinded by the Administrator or the Secretary, as the case may be, in accordance with the provisions of this act.

applicable legislation does not excuse noncompliance with the Fair Labor Standards Act. Where a higher minimum wage than that set in the Fair Labor Standards Act is applicable to an employee by virtue of such other legislation, the regular rate of the employee, as the term is used in the Fair Labor Standards Act, cannot be lower than such applicable minimum, for the words "regular rate at which he is employed" as used in section 7 must be construed to mean the regular rate at which he is lawfully employed.

THE OVERTIME PAY
REQUIREMENTS

Section 778.2 THE 40-HOUR MAXIMUM (a) The statutory requirements

Section 7 of the Fair Labor Standards Act deals with maximum hours and overtime compensation for employees who are covered by the act and are not exempt from its overtime requirements. Section 7 (a) provides that an employer may not employ any such employee for a workweek longer than 40 hours "unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." The term "regular rate" is defined in section 7 (d) "to include all remuneration for employment paid to, or on behalf of, the employee" except payments of seven types which are specifically described and enumerated. These seven types of payments will hereafter be referred to as "statutory exclusions.""

(b) The nature of statutory overtime limi

tations

It is clear that there is no absolute limitation in Section 7 of the Fair Labor Standards Act on the number of hours that an employee may work in any workweek. If he is paid time and a half his regular rate for the overtime

7 These statutory exclusions are set forth in section 778.4 and discussed in sections 778.4-778.8. Exceptions from the overtime requirements of section 7 (a) are set forth in subsections 7 (e) and 7 (f) of the act and discussed herein in sections 778.18, 778.19, and 778.20.

hours, he may work as many hours a week as he and his employer see fit. Section 7 contains no requirement for the payment of overtime compensation except for hours in excess of 40 in the workweek. It does not require that an employee be paid overtime compensation for hours in excess of eight per day, or for work on Saturdays, Sundays, holidays or regular days of rest. If no more than a total of 40 hours is actually worked in the workweek, overtime compensation need not be paid. Nothing in the act, however, will relieve an employer of any obligation he may have assumed by contract or of any obligation imposed by other Federal or State law to pay premium rates for work in excess of a daily standard or for work on Saturdays, Sundays, holidays, or other periods outside of or in excess of the normal or regular workweek or workday.8

(c) The workweek

If in any workweek an employee is covered by the act and is not exempt from its overtime pay requirements, the employer must total all the hours worked by the employee for him in that workweek (even though two or more unrelated job assignments may have been performed), and pay overtime compensation for each hour worked in excess of 40 in the workweek. An employee's workweek is a fixed and regularly recurring period of 168 hours-seven consecutive 24-hour periods. It need not coincide with the calendar week but may begin on any day and at any hour of the day. For purposes of computing pay due under the Fair Labor Standards Act, the workweek may be established for the plant as a whole or different workweeks may be established for different employees or groups of employees within the plant. Once the beginning time of an employee's workweek is established, it remains fixed regardless of the schedule of hours worked by him. The beginning of the workweek may be changed if the change is intended to be permanent and is not designed to evade the overtime requirements of the act."

* The effect of making such payments is discussed in sections 778.5 and 778.7 (d).

For a discussion of the proper method of computing overtime pay in a period in which a change in the time of commencement of the workweek is made, see section 778.10.

(d) Each workweek stands alone

The act takes a single workweek as its standard and does not permit averaging of hours over two or more weeks. Thus, if an employee works 30 hours one week and 50 hours the next, he must receive overtime compensation for the 10 overtime hours worked in the second week, even though the average number of hours worked in the two weeks is 40. This is true regardless of whether the employee works on a standard or swing-shift schedule and regardless of whether he is paid on a daily, weekly, biweekly, monthly or other basis. The rule is also applicable to pieceworkers. It is therefore necessary to determine the hours worked and the compensation earned by pieceworkers on a weekly basis.

(e) Time of payment

There is, however, no requirement that overtime compensation be paid weekly. Overtime compensation earned in a particular workweek must be paid on the regular pay day for the period in which such workweek ends.10 Where retroactive wage increases are made, retroactive overtime compensation is due at the time the increase is paid."

Section 778.3 COMPUTING OVERTIME PAY BASED ON THE "REGULAR RATE"-DEFINITION

(a) "Regular rate" distinguished from “minimum rate"

Overtime must be compensated at a rate not less than one and one-half times the regular rate at which the employee is actually employed. The regular rate of pay at which the employee is employed may not be less than the statutory minimum.12 If the employee's regular rate of

10 When the correct amount of overtime compensation cannot be determined until some time after the regular pay period, the requirements of the act will be satisfied if the employer pays the excess overtime compensation as soon after the regular pay period as is practicable. Payment may not be delayed for a period longer than is reasonably necessary for the employer to compute and arrange for payment of the amount due and in no event may payment be delayed beyond the next pay day after such computation can be made.

See section 778.11. For a discussion of overtime payments due because of increases by way of bonuses, see section 778.6 (b).

12 Except as to workers specially provided for in section 14 and workers in Puerto Rico and the Virgin Islands covered by wage orders issued by the Administrator pursuant to section 8 of the act, the statutory minimum is $1.00 per hour.

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