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CFR  

Code of Federal Regulations Pertaining to ESA

Title 29  

Labor

 

Chapter V  

Wage and Hour Division, Department of Labor

 

 

Part 778  

Overtime Compensation

 

 

 

Subpart E  

Exceptions From the Regular Rate Principles


29 CFR 778.406 - Nonovertime hours as well as overtime hours must be irregular if section 7(f) is to apply.

  • Section Number: 778.406
  • Section Name: Nonovertime hours as well as overtime hours must be irregular if section 7(f) is to apply.

    Any employment in which the employee's hours fluctuate only in the 
overtime range above the maximum workweek prescribed by the statute 
lacks the irregularity of hours for which the Supreme Court found the 
so-called ``Belo'' contracts appropriate and so fails to meet the 
requirements of section 7(f) which were designed to validate, subject to 
express statutory limitations, contracts of a like kind in situations of 
the type considered by the Court (see Sec. 778.404). Nothing in the 
legislative history of section 7(f) suggests any intent to suspend the 
normal application of the general overtime provisions of section 7(a) in 
situations where the weekly hours of an employee fluctuate only when 
overtime work in excess of the prescribed maximum weekly hours is 
performed. Section 7(a) was specifically designed to deal with such a 
situation by making such regular resort to overtime more costly to the 
employer and thus providing an inducement to spread the work rather than 
to impose additional overtime work on employees regularly employed for a 
workweek of the maximum statutory length. The ``security of a regular 
weekly income'' which the Supreme Court viewed as an important feature 
of the ``Belo'' wage plan militating against a holding that the 
contracts were invalid under the Act is, of course, already provided to 
employees who regularly work at least the maximum number of hours 
permitted without overtime pay under section 7(a). Their situation is 
not comparable in this respect to employees whose duties cause their 
weekly hours to fluctuate in such a way that some workweeks are short 
and others long and they cannot, without some guarantee, know in advance 
whether in a particular workweek they will be entitled to pay for the 
regular number of hours of nonovertime work contemplated by section 
7(a). It is such employees whose duties necessitate ``irregular hours'' 
within the meaning of section 7(f) and whose ``security of a regular 
weekly income'' can be assured by a guarantee under that section which 
will serve to increase their hourly earnings in short workweeks under 
the statutory maximum hours. It is this benefit to the employee that the 
Supreme Court viewed, in effect, as a quid pro quo which could serve to 
balance a relaxation of the statutory requirement, applicable in other 
cases, that any overtime work should cost the employer 50
percent more per hour. In the enactment of section 7(f), as in the 
enactment of section 7(b) (1) and (2), the benefits that might inure to 
employees from a balancing of long workweeks against short workweeks 
under prescribed safeguards would seem to be the reason most likely to 
have influenced the legislators to provide express exemptions from the 
strict application of section 7(a). Consequently, where the fluctuations 
in an employee's hours of work resulting from his duties involve only 
overtime hours worked in excess of the statutory maximum hours, the 
hours are not ``irregular'' within the purport of section 7(f) and a 
payment plan lacking this factor does not qualify for the exemption. 
(See Goldberg v. Winn-Dixie Stores (S.D. Fla.), 15 WH Cases 641; Wirtz 
v. Midland Finance Co. (N.D. Ga.), 16 WH Cases 141; Trager v. J. E. 
Plastics Mfg. Co. (S.D.N.Y.), 13 WH Cases 621; McComb v. Utica Knitting 
Co., 164 F. 2d 670; Foremost Dairies v. Wirtz, 381 F. 2d 653 (C.A. 5).)
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