(a) The statutory provision. Section 7(j) of the Act provides, for
hospital and residential care establishment employment, under prescribed
conditions, an exemption from the general requirement of section 7(a)
that overtime compensation be computed on a workweek basis. It permits a
14-day period to be established for the purpose of
computing overtime compensation by an agreement or understanding between
an employer engaged in the operation of a hospital or residential care
establishment, and any of his employees employed in connection
therewith. The exemption provided by section 7(j) applies:
if, pursuant to an agreement or understanding arrived at between the
employer and employee before performance of the work, a work period of
14 consecutive days is accepted in lieu of the workweek of 7 consecutive
days for purposes of overtime computation and if, for his employment in
excess of 8 hours in any workday and in excess of 80 hours in such 14-
day period, the employee receives compensation at a rate not less than
one and one-half times the regular rate at which he is employed.
(b) Conditions for application of exemption. As conditions for use
of the 14-day period in lieu of the workweek in computing overtime,
section 7(j) requires, first, an agreement or understanding between the
employer and the employee before performance of the work that such
period is to be used, and second, the payment to the employee of
overtime compensation at a rate not less than one and one-half times his
regular rate for all hours worked in excess of eight in any workday
within such period and in excess of 80 during the period as a whole.
(c) The agreement or understanding. The agreement or understanding
between the employer and employee to use the 14-day period for computing
overtime must be entered into before the work to which it is intended to
apply is performed. It may be arrived at directly with the employee or
through his representative. It need not be in writing, but if it is not,
a special record concerning it must be kept as required by part 516 of
this chapter. The 14-day period may begin at any hour of any day of the
week; it need not commence at the beginning of a calendar day. It
consists of 14 consecutive 24-hour periods, at the end of which a new
14-day period begins. The election to use the 14-day period in lieu of
the workweek must, like selection of an employee's workweek
(Sec. 778.105) be with the intent to use such period permanently or for
a substantial period of time. Changes from such period to the workweek
and back again to take advantage of less onerous overtime pay
liabilities with respect to particular work schedules under one system
than under the other are not permissible.
(d) Payment for overtime under the special provisions. If the
parties have the necessary agreement or understanding to use the 14-day
period, computation of overtime pay on the workweek basis as provided in
section 7(a) is not required so long as the employee receives overtime
compensation at a rate not less than one and one-half times his regular
rate of pay ``for his employment in excess of 8 hours in any workday and
in excess of 80 hours in such 14-day period.'' Such compensation is
required for all hours in such period in excess of eight in any workday
or workdays therein which are worked by the employee, whether or not
more than 80 hours are worked in the period. The first workday in the
period, for purposes of this computation, begins at the same time as the
14-day period and ends 24 hours later. Each of the 13 consecutive 24-
hour periods following constitutes an additional workday of the 14-day
period. Overtime compensation at the prescribed time and one-half rate
is also required for all hours worked in excess of 80 in the 14-day
period, whether or not any daily overtime is worked during the first 80
hours. However, under the provisions of section 7(h) and 7(e)(5) of the
Act, any payments at the premium rate for daily overtime hours within
such period may be credited toward the overtime compensation due for
overtime hours in excess of 80.
(e) Use of 14-day period in lieu of workweek. Where the 14-day
period is used as authorized in section 7(j), such period is used in
lieu of the workweek in computing the regular rate of pay of employees
to whom it applies (i.e., those of the hospital's or residential care
establishment's employees with whom the employer has elected to enter
into the necessary agreement or understanding as explained in paragraph
(c) of this section). With this exception, the computation of the
regular rate and the application of statutory exclusions therefrom is
governed by
the general principles set forth in this part 778.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR 7319, Jan. 23, 1981; 46
FR 33516, June 30, 1981]
