[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: 29CFR778.207]

[Page 418]
 
                             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. 778.207  Other types of contract premium pay distinguished.

    (a) Overtime premiums are those defined by the statute. The various 
types of contract premium rates which provide extra compensation 
qualifying as overtime premiums to be excluded from the regular rate 
(under section 7(e) (5), (6), and (7) and credited toward statutory 
overtime pay requirements (under section 7(h)) have been described in 
Sec. Sec. 778.201 through 778.206. The plain wording of the statute 
makes it clear that extra compensation provided by premium rates other 
than those described cannot be treated as overtime premiums. Wherever 
such other premiums are paid, they must be included in the employee's 
regular rate before statutory overtime compensation is computed; no part 
of such premiums may be credited toward statutory overtime pay.
    (b) Nonovertime premiums. The Act requires the inclusion in the 
regular rate of such extra premiums as nightshift differentials (whether 
they take the form of a percent of the base rate or an addition of so 
many cents per hour) and premiums paid for hazardous, arduous or dirty 
work. It also requires inclusion of any extra compensation which is paid 
as an incentive for the rapid performance of work, and since any extra 
compensation in order to qualify as an overtime premium must be provided 
by a premium rate per hour, except in the special case of pieceworkers 
as discussed in Sec. 778.418, lump sum premiums which are paid without 
regard to the number of hours worked are not overtime premiums and must 
be included in the regular rate. For example, where an employer pays 8 
hours' pay for a particular job whether it is performed in 8 hours or in 
less time, the extra premium of 2 hours' pay received by an employee who 
completes the job in 6 hours must be included in his regular rate. 
Similarly, where an employer pays for 8 hours at premium rates for a job 
performed during the overtime hours whether it is completed in 8 hours 
or less, no part of the premium paid qualifies as overtime premium under 
sections 7(e) (5), (6), or (7). (For a further discussion of this and 
related problems, see Sec. Sec. 778.308 to 778.314.)

                                 Bonuses