[Code of Federal Regulations]
[Title 29, Volume 3]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR778.202]

[Page 369-370]
 
                             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. 778.202  Premium pay for hours in excess of a daily or weekly 
standard.

    (a) Hours in excess of 8 per day or statutory weekly standard. Many 
employment contracts provide for the payment of overtime compensation 
for hours worked in excess of 8 per day or 40 per week. Under some 
contracts such overtime compensation is fixed at one and one-half times 
the base rate; under others the overtime rate may be greater or less 
than one and one-half times the base rate. If the payment of such 
contract overtime compensation is in fact contingent upon the employee's 
having worked in excess of 8 hours in a day or in excess of the number 
of hours in the workweek specified in section 7(a) of the Act as the 
weekly maximum, the extra premium compensation paid for the excess hours 
is excludable from the regular rate under section 7(e)(5) and may be 
credited toward statutory overtime payments pursuant to section 7(h) of 
the Act. In applying these rules to situations where it is the custom to 
pay employees for hours during which no work is performed due to 
vacation, holiday, illness, failure of the employer to provide 
sufficient work, or other similar cause, as these terms are explained in 
Sec. Sec. 778.216 to 778.224, it is permissible (but not required) to 
count these hours as hours worked in determining the amount of overtime 
premium pay, due for hours in excess of 8 per day or the applicable 
maximum hours standard, which may be excluded from the regular rate and 
credited toward the statutory overtime compensation.
    (b) Hours in excess of normal or regular working hours. Similarly, 
where the employee's normal or regular daily or weekly working hours are 
greater or less than 8 hours and 40 hours respectively and his contract 
provides for the payment of premium rates for work in excess of such 
normal or regular hours of work for the day or week (such as 7 in a day 
or 35 in a week) the extra compensation provided by such premium rates, 
paid for excessive hours, is a true overtime premium to be excluded from 
the regular rate and it may be credited toward overtime compensation due 
under the Act.
    (c) Premiums for excessive daily hours. If an employee whose maximum 
hours standard is 40 hours is hired at the rate of $5.75 an hour and 
receives, as overtime compensation under his contract, $6.25 per hour 
for each hour actually worked in excess of 8 per day (or in excess of 
his normal or regular daily

[[Page 370]]

working hours), his employer may exclude the premium portion of the 
overtime rate from the employee's regular rate and credit the total of 
the extra 50-cent payments thus made for daily overtime hours against 
the overtime compensation which is due under the statute for hours in 
excess of 40 in that workweek. If the same contract further provided for 
the payment of $6.75 for hours in excess of 12 per day, the extra $1 
payments could likewise be credited toward overtime compensation due 
under the Act. To qualify as overtime premiums under section 7(e)(5), 
the daily overtime premium payments must be made for hours in excess of 
8 hours per day or the employee's normal or regular working hours. If 
the normal workday is artificially divided into a ``straight time'' 
period to which one rate is assigned, followed by a so-called 
``overtime'' period for which a higher ``rate'' is specified, the 
arrangement will be regarded as a device to contravene the statutory 
purposes and the premiums will be considered part of the regular rate. 
For a fuller discussion of this problem, see Sec. 778.501.
    (d) Hours in excess of other statutory standard. Where payment at 
premium rates for hours worked in excess of a specified daily or weekly 
standard is made pursuant to the requirements of another applicable 
statute, the extra compensation provided by such premium rates will be 
regarded as a true overtime premium.
    (e) Premium pay for sixth or seventh day worked. Under section 
7(e)(6) and 7(h), extra premium compensation paid pursuant to contract 
or statute for work on the sixth or seventh day worked in the workweek 
is regarded in the same light as premiums paid for work in excess of the 
applicable maximum hours standard or the employee's normal or regular 
workweek.

[33 FR 986, Jan. 26, 1968, as amended at 46 FR 7311, Jan. 23, 1981)