(a) Overtime premiums under section 7(e)(7). Where a collective
bargaining agreement or other applicable employment contract in good
faith establishes certain hours of the day as the basic, normal, or
regular workday (not exceeding 8 hours) or workweek (not exceeding the
maximum hours standard applicable under section 7(a)) and provides for
the payment of a premium rate for work outside such hours, the extra
compensation provided by such premium rate will be treated as an
overtime premium if the 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 the basic, normal or regular workday or
workweek.
(b) Premiums for hours outside established working hours. To qualify
as an overtime premium under section 7(e)(7) the premium must be paid
because the work was performed during hours ``outside of the hours
established * * * as the basic * * * workday or workweek'' and not for
some other reason. Thus, if
the basic workday is established in good faith as the hours from 8 a.m.
to 5 p.m. a premium of time and one-half paid for hours between 5 p.m.
and 8 a.m. would qualify as an overtime premium. However, where the
contract does not provide for the payment of a premium except for work
between midnight and 6 a.m. the premium would not qualify under this
section since it is not a premium paid for work outside the established
workday but only for certain special hours outside the established
workday, in most instances because they are undesirable hours.
Similarly, where payments of premium rates for work are made after 5
p.m. only if the employee has not had a meal period or rest period, they
are not regarded as overtime premiums; they are premiums paid because of
undesirable working conditions.
(c) Payment in pursuance of agreement. Premiums of the type which
section 7(e)(7) authorizes to be treated as overtime premiums must be
paid ``in pursuance of an applicable employment contract or collective
bargaining agreement,'' and the rates of pay and the daily and weekly
work periods referred to must be established in good faith by such
contract or agreement. Although as a general rule a collective
bargaining agreement is a formal agreement which has been reduced to
writing, an employment contract for purposes of section 7(e)(7) may be
either written or oral. Where there is a written employment contract and
the practices of the parties differ from its provisions, it must be
determined whether the practices of the parties have modified the
contract. If the practices of the parties have modified the written
provisions of the contract, the provisions of the contract as modified
by the practices of the parties will be controlling in determining
whether the requirements of section 7(e)(7) are satisfied. The
determination as to the existence of the requisite provisions in an
applicable oral employment contract will necessarily be based on all the
facts, including those showing the terms of the oral contract and the
actual employment and pay practices thereunder.
