(a) General rules. Payments which are made for occasional periods
when the employee is not at work due to vacation, holiday, illness,
failure of the employer to provide sufficient work, or other similar
cause, where the payments are in amounts approximately equivalent to the
employee's normal earnings for a similar period of time, are not made as
compensation for his hours of employment. Therefore, such payments may
be excluded from the regular rate of pay under section 7(e)(2) of the
Act and, for the same reason, no part of such payments may be credited
toward overtime compensation due under the Act.
(b) Limitations on exclusion. This provision of section 7(e)(2)
deals with the type of absences which are infrequent or sporadic or
unpredictable. It has no relation to regular ``absences'' such as lunch
periods nor to regularly scheduled days of rest. Sundays may not be
workdays in a particular plant, but this does not make them either
``holidays'' or ``vacations,'' or days on which the employee is absent
because of the failure of the employer to provide sufficient work. The
term holiday is read in its ordinary usage to refer to those days
customarily observed in the community in celebration of some historical
or religious occasion; it does not refer to days of rest given to
employees in lieu of or as an addition to compensation for working on
other days.
(c) Failure to provide work. The term ``failure of the employer to
provide sufficient work'' is intended to refer to occasional,
sporadically recurring situations where the employee would normally be
working but for such a factor as machinery breakdown, failure of
expected supplies to arrive, weather conditions affecting the ability of
the employee to perform the work and similarly unpredictable obstacles
beyond the control of the employer. The term does not include reduction
in work schedule (as discussed in Secs. 778.321 through 778.329),
ordinary temporary layoff situations, or any type of routine, recurrent
absence of the employee.
(d) Other similar cause. The term ``other similar cause'' refers to
payments made for periods of absence due to factors like holidays,
vacations, sickness, and failure of the employer to provide work.
Examples of ``similar causes'' are absences due to jury service,
reporting to a draft board, attending a funeral of a family member,
inability to reach the workplace because of weather conditions. Only
absences of a nonroutine character which are infrequent or sporadic or
unpredictable are included in the ``other similar cause'' category.
