[Code of Federal Regulations]
[Title 29, Volume 3]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR548.200]

[Page 254-255]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 548_AUTHORIZATION OF ESTABLISHED BASIC RATES FOR COMPUTING OVERTIME 
PAY--Table of Contents
 
                        Subpart B_Interpretations
 
Sec. 548.200  Requirements.

    The following conditions must be satisfied if a ``basic'' rate is to 
be considered proper under section 7(g)(3) and subpart A of this part.
    (a) Agreement or understanding. There must be an agreement or 
understanding establishing a basic rate or rates. This agreement must be 
arrived at before performance of the work to which it is intended to 
apply. It may be arrived at directly with the em ployee or through his 
representative. The ``basic'' rate method of computing overtime may be 
used for as many of the employees in an establishment as the employer 
chooses, provided he has reached an agreement or understanding with 
these employees prior to the performance of the work. \3\
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    \3\ The records which an employer is required to maintain and 
preserve for an employee compensated for overtime hours on the basis of 
a basic rate are described in Sec. Sec. 516.5(b)(5) and 516.21 of this 
subchapter.
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    (b) The rate. The established basic rate may be a specified rate or 
a rate which can be derived from the application of a specified method 
of calculation. For instance, under certain conditions the Regulations 
permit the use of the daily average hourly earnings of the employee as a 
basis for computing daily overtime. \4\ Thus, a method rather than a 
specific rate is authorized. Also, under certain conditions, the cost of 
a single meal a day furnished to employees may be excluded from the 
computation of overtime pay. \5\ It is the exclusion of the cost of the 
meals that is authorized and each employee's rate of pay, whatever it 
may be--an hourly rate, a piece rate or a salary--is his basic rate.
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    \4\ See Sec. 548.302.
    \5\ See Sec. 548.304.

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[[Page 255]]

    (c) Minimum wage. The employee's average hourly earnings for the 
workweek (exclusive of overtime pay and other pay which may be excluded 
from the regular rate) \6\ and the established basic rate used to 
compute overtime pay may not be less than the legal minimum. \7\
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    \6\ See Sec. Sec. 778.200 through 778.225 of this chapter for 
further discussion of what payments may be excluded.
    \7\ The legal minimum is the highest rate required by the Fair Labor 
Standards Act or other Federal, State or local law.

[20 FR 5680, Aug. 6, 1955, as amended at 21 FR 338, Jan. 18, 1956]

                         Authorized Basic Rates