[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: 29CFR548.502]

[Page 264-265]
 
                             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. 548.502  Other payments.

    Extra overtime compensation must be separately computed and paid on 
payments such as bonuses or shift differentials which are not included 
in the computation of the established basic rate and which would have 
been included in the regular rate of pay. \26\
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    \26\ Unless specifically excluded by agreement or understanding and 
prior authorization is obtained from the Administrator. See Sec. 
548.400(b).

    Example 1. An employee is paid on an hourly rate basis plus a 
production bonus, and also a shift differential of 10 cents for each

[[Page 265]]

hour worked on the second shift. The authorized basic rate under the 
agreement is the employee's daily average hourly earnings, and under the 
employment agreement he is paid one and one-half times the basic rate 
for all hours worked in excess of 8 each day. Suppose his production 
bonus is included in the computation of the basic rate, but the shift 
differential is not. In addition to overtime compensation computed at 
the basic rate the employee must be paid an extra 5 cents for each 
overtime hour worked on the second shift.
    Example 2. A piece worker, under his employment agreement, is paid 
overtime compensation for daily overtime and for hours of work on 
Saturday based on an authorized basic rate obtained by averaging his 
piece work earnings for the half-month. In addition, he is paid a 
monthly cost-of-living bonus which is not included in the computation of 
the basic rate. It will be necessary for the employer to compute and pay 
overtime compensation separately on the bonus. \27\
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    \27\ See Sec. 778.209 of this chapter for an explanation of how to 
compute overtime on the bonus.

[20 FR 5683, Aug. 6, 1955]