[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: 29CFR778.200]

[Page 413-414]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 778_OVERTIME COMPENSATION--Table of Contents
 
    Subpart C_Payments That May Be Excluded From the ``Regular Rate''
 
Sec. 778.200  Provisions governing inclusion, exclusion, and crediting 
of particular payments.

                        The Statutory Provisions


    (a) Section 7(e). This subsection of the Act provides as follows:

    As used in this section the ``regular rate'' at which an employee is 
employed shall be deemed to include all remuneration for employment paid 
to, or on behalf of, the employee, but shall not be deemed to include:
    (1) Sums paid as gifts; payments in the nature of gifts made at 
Christmas time or on other special occasions, as a reward for service, 
the amounts of which are not measured by or dependent on hours worked, 
production, or efficiency; [discussed in Sec. 778.212].
    (2) Payments made for occasional periods when no work is performed 
due to vacation, holiday, illness, failure of the employer to provide 
sufficient work, or other similar cause; reasonable payments for 
traveling expenses, or other expenses, incurred by an employee in the 
furtherance of his employer's interests and properly reimbursable by the 
employer; and other similar payments to an employee which are not made 
as compensation for his hours of employment; [discussed in Sec. Sec. 
778.216 through 778.224].
    (3) Sums paid in recognition of services performed during a given 
period if either, (a) both the fact that payment is to be made and the 
amount of the payment are determined at the sole discretion of the 
employer at or near the end of the period and not pursuant to any prior 
contract, agreement, or promise causing the employee to expect such 
payments regularly; or (b) the payments are made pursuant to a bona fide 
profit-sharing plan or trust or bona fide thrift or savings plan, 
meeting the requirements of the Secretary of Labor set forth in 
appropriate regulations which he shall issue, having due regard among 
other relevant factors, to the extent to which the amounts paid to the 
employee are determined without regard to hours of work, production, or 
efficiency; or (c) the payments are talent fees (as such talent fees are 
defined and delimited by regulations of the Secretary) paid to 
performers, including announcers, on radio and television programs; 
[discussed in Sec. Sec. 778.208 through 778.215 and 778.225].
    (4) Contributions irrevocably made by an employer to a trustee or 
third person pursuant to a bona fide plan for providing old-age, 
retirement, life, accident, or health insurance or similar benefits for 
employees; [discussed in Sec. Sec. 778.214 and 778.215].
    (5) Extra compensation provided by a premium rate paid for certain 
hours worked by the employee in any day or workweek because such hours 
are hours worked in excess of eight in a day or in excess of the maximum 
workweek applicable to such employee under subsection (a) or in excess 
of the employee's normal working hours or regular working hours, as the 
case may be; [discussed in Sec. Sec. 778.201 and 778.202].
    (6) Extra compensation provided by a premium rate paid for work by 
the employee on Saturdays, Sundays, holidays, or regular days of rest, 
or on the sixth or seventh day of the workweek, where such premium rate 
is not less than one and one-half times the rate established in good 
faith for like work performed in nonovertime hours on other days; or 
[discussed in Sec. Sec. 778.203, 778.205, and 778.206].
    (7) Extra compensation provided by a premium rate paid to the 
employee, in pursuance of an applicable employment contract or 
collective bargaining agreement, for work outside of the hours 
established in good faith by the contract or agreement as the basic, 
normal, or regular workday (not exceeding eight hours) or workweek (not 
exceeding the maximum workweek applicable to such employee under 
subsection (a)), where such premium rate is not less than one and one-
half times the rate established in good faith by the contract or 
agreement for like work performed during such workday or workweek; 
[discussed in Sec. Sec. 778.201 and 778.206].
    (b) Section 7(h). This subsection of the Act provides as follows:


[[Page 414]]


    Extra compensation paid as described in paragraphs (5), (6), and (7) 
of subsection (e) shall be creditable toward overtime compensation 
payable pursuant to this section.

    (c) Only the statutory exclusions are authorized. It is important to 
determine the scope of these exclusions, since all remuneration for 
employment paid to employees which does not fall within one of these 
seven exclusionary clauses must be added into the total compensation 
received by the employee before his regular hourly rate of pay is 
determined.

                  Extra Compensation Paid for Overtime