E-503-1.5

Proper Overtime Wage Rate: While overtime
compensation may not be computed on a rate
less than the minimum hourly wage rate, it
may be computed on a rate in excess of the
minimum hourly wage rate. If an employer nor-
mally pays an employee at a rate of $2.50
per hour as a straight-time cash wage, not
including fringe benefit payments, while the
applicable wage decision requires a wage rate
of only $2.00 per hour, the employee is
entitled to receive overtime wages based on
the agreed upon regular hourly wage rate of
$2.50. In this example, the overtime wage
rate must be not less than $3.75 per hour.

E-503-2 Overtime Wage Rates Not Including Fringe Benefits: Assuming that the Secretary of Labor has found that the prevailing practice in the area is not to pay fringe benefits for any hours worked over 8 in a day or 40 in a workweek, the following examples illustrate methods for determining the proper overtime wage rate:

E-503-2.1

A laborer is paid a basic hourly wage rate of $2.00 per hour, plus $0.45 in fringe benefits. His employer makes the fringe benefit payments directly to an established program. The laborer is entitled to an overtime wage rate of one and one-half times his basic hourly rate, not including fringe benefit payments. Therefore, in this case, the proper overtime wage rate would be $3.00 ($2.00 per hour as the basic hourly wage rate plus $1.00 per hour as the overtime premium.)

E-503-2.2 Under a similar situation, the employer pays $0.20 to the laborer in cash payments and $0.25 to an established fringe benefit program, making a total fringe benefit payment of $0.45 per hour as required by the applicable wage decision. Although the laborer receives $2.20 per hour in cash for all straight-time hours worked, he is still entitled to only $3.00 per hour as an overtime wage rate ($2.00 per hour as the basic hourly wage rate plus $1.00 per hour as the overtime premium.

E-503-2.3

A laborer is paid a regular wage rate of
$2.40 per hour plus $0.45 in fringe benefit
payments, under a wage determination which
requires a minimum hourly wage rate of $2.00
per hour plus $0.45 in fringe benefit pay-
ments. Since overtime must be computed on
the hourly wage rate actually paid, when such
rate exceeds the predetermined rate, the
laborer is entitled to an overtime wage rate
of $3.60 per hour ($2.40 per hour as the
regular hourly wage rate plus $1.20 per hour
as the overtime premium.)

E-503-2.4 In this example, the applicable wage determination requires a minimum hourly wage rate of $2.00 for laborers plus $0.45 in fringe benefit payments. The employer, in addition to paying the required $0.45 in fringes, also pays $0.20 per hour to a fringe benefit program which was not found by the Secretary of Labor to be prevailing in the area. A laborer, receiving the minimum wage rate of $2.00 per hour, is paid $1.80 per hour in cash, plus $0.65 in fringe benefit payments. Since, when computing the wage rate upon which overtime compensation is based, such rate may never be less than the minimum hourly wage rate shown on the applicable wage determination, the laborer is entitled to an overtime wage rate of $3.00 ($2.00 as the minimum

hourly wage rate shown on the wage decision, plus $1.00 per hour as the overtime premium.)

E-503-3 Overtime Wage Rates Including Fringe Benefits: Unless the wage determination specifies otherwise, the prevailing practice is to pay fringe benefits for any hours worked over 8 in a day or 40 in a workweek. The following examples illustrate methods for determining the proper overtime wage rate:

E-503-3.1

E-503-3.2

A laborer who is paid a predetermined minimum
hourly wage rate of $2.00 plus $0.45 in fringe
benefit payments is entitled to receive an hourly
overtime wage rate of $3.45 per hour ($2.00
as the basic hourly wage rate, plus $1.00 as
the overtime premium, plus $0.45 per hour
for fringe benefit payments.) The $0.45
may be paid in cash or contributed to the
fringe benefit program.

Under a wage decision which establishes a
wage rate for laborers at $2.00 per hour plus
$0.45 in fringe benefit payments, an employer
pays $1.80 per hour plus $0.65 in fringes.
The laborer is entitled to an overtime wage
rate of $3.45 ($2.00 as the minimum hourly
wage rate shown on the wage decision, plus
$1.00 per hour as the overtime premium, plus
$0.45 per hour for fringe benefit payments,
as required by the wage decision.)
The
employer may then deduct the $0.65 normally
paid to the fringe benefit program with the
result that the employee would receive a cash
overtime wage rate of $2.80 per hour.

26

D-5(5)

Preconstruction conference

Subject to labor standards --

Appalachian Regional Development Act of 1965, as amended:

Cited and described

AM 1-10.2, paragraph 19:

Reproduced

see. also, Authorities

Appeal of Wage Determinations:

See, Wage Determinations

Appeals:

General

Liquidated Damages (overtime violations):

To Federal Highway Administrator

To Secretary of Labor

To the Court of Claims

123, 167

125

125

125

Apprentices:

Contracting agency's duties

Contracting agency's responsibilities

Defined

Division Engineer's duties

Employment of: general

Laborers and helpers distinguished

Manpower training programs

Poverty programs

Preconstruction conference

Ratios -

Registration evidence

Secretary of Transportation skill training

programs

Violations

Wage rates for

Youth opportunity programs

Area Wage Determinations:

see Wage Determinations

Assembly Yards:

see Site of the Work

Authorities:

AM 1-10.2, paragraph 19: reproduced

FHWA Order 1-2, paragraphs 2 and 3: reproduced
FHWA Order 1-2.3, paragraphs 2, 3, 4(b)(6):
reproduced

FHWA Order 1-2.7, paragraphs 2, 3: reproduced
Basic Rate:

Defined

Described

Batch Plants:

see, Site of the Work

Borrow Pits:

Construction activities

see also, subheading under Offsite Construction

Activities

Building or Work:

Defined