A premium in the form of a lump sum which is paid for work performed
during overtime hours without regard to the number of overtime hours
worked does not qualify as an overtime premium even though the amount of
money may be equal to or greater than the sum owed on a per hour basis.
For example, an agreement that provides for the payment of a flat sum of
$75 to employees who work on Sunday does not provide a premium which
will qualify as an overtime premium, even though the employee's straight
time rate is $5 an hour and the employee always works less than 10 hours
on Sunday. Likewise, where an agreement provides for the payment for
work on Sunday of either the flat sum of $75 or time and one-half the
employee's regular rate for all hours worked on Sunday, whichever is
greater, the $75 guaranteed payment is not an overtime premium. The
reason for this is clear. If the rule were otherwise, an employer
desiring to pay an employee a fixed salary regardless of the number of
hours worked in excess of the applicable maximum hours standard could
merely label as overtime pay a fixed portion of such salary sufficient
to take care of compensation for the maximum number of hours that would
be worked. The
Congressional purpose to effectuate a maximum hours standard by placing
a penalty upon the performance of excessive overtime work would thus be
defeated. For this reason, where extra compensation is paid in the form
of a lump sum for work performed in overtime hours, it must be included
in the regular rate and may not be credited against statutory overtime
compensation due.
[46 FR 7314, Jan. 23, 1981]
