(a) Overtime premiums are those defined by the statute. The various
types of contract premium rates which provide extra compensation
qualifying as overtime premiums to be excluded from the regular rate
(under section 7(e) (5), (6), and (7) and credited toward statutory
overtime pay requirements (under section 7(h)) have been described in
Secs. 778.201 through 778.206. The plain wording of the statute makes it
clear that extra compensation provided by premium rates other than those
described cannot be treated as overtime premiums. Wherever such other
premiums are paid, they must be included in the employee's regular rate
before statutory overtime compensation is computed; no part of such
premiums may be credited toward statutory overtime pay.
(b) Nonovertime premiums. The Act requires the inclusion in the
regular rate of such extra premiums as nightshift differentials (whether
they take the form of a percent of the base rate or an addition of so
many cents per hour) and premiums paid for hazardous, arduous or dirty
work. It also requires inclusion of any extra compensation which is paid
as an incentive for the rapid performance of work, and since any extra
compensation in order to qualify as an overtime premium must be provided
by a premium rate per hour, except in the special case of pieceworkers
as discussed in Sec. 778.418, lump sum premiums which are paid without
regard to the number of hours worked are not overtime premiums and must
be included in the regular rate. For example, where an employer pays 8
hours' pay for a particular job whether it is performed in 8 hours or in
less time, the extra premium of 2 hours' pay received by an employee who
completes the job in 6 hours must be included in his regular rate.
Similarly, where an employer pays for 8 hours at premium rates for a job
performed during the overtime hours whether it is completed in 8 hours
or less, no part of the premium paid qualifies as overtime premium under
sections 7(e) (5), (6), or (7). (For a further discussion of this and
related problems, see Secs. 778.308 to 778.314.)
