[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: 29CFR778.108]

[Page 407-408]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 778_OVERTIME COMPENSATION--Table of Contents
 
                 Subpart B_The Overtime Pay Requirements
 
Sec. 778.108  The ``regular rate''.

    The ``regular rate'' of pay under the Act cannot be left to a 
declaration by the parties as to what is to be treated as the regular 
rate for an employee; it must be drawn from what happens under the 
employment contract (Bay Ridge Operating Co. v. Aaron, 334 U.S. 446). 
The Supreme Court has described it as the hourly rate actually paid the 
employee for the normal, nonovertime workweek for which he is employed--
an ``actual fact'' (Walling v. Youngerman-Reynolds Hardwood Co., 325 
U.S. 419). Section 7(e) of the Act requires inclusion in the ``regular 
rate'' of ``all remuneration for employment paid to, or on behalf of, 
the employee'' except payments specifically excluded by paragraphs (1) 
through (7) of that subsection. (These seven types of payments, which 
are set forth in Sec. 778.200 and discussed in Sec. Sec. 778.201 
through 778.224, are hereafter referred to as

[[Page 408]]

``statutory exclusions.'') As stated by the Supreme Court in the 
Youngerman-Reynolds case cited above: ``Once the parties have decided 
upon the amount of wages and the mode of payment the determination of 
the regular rate becomes a matter of mathematical computation, the 
result of which is unaffected by any designation of a contrary `regular 
rate' in the wage contracts.''