Where a retroactive pay increase is awarded to employees as a result
of collective bargaining or otherwise, it operates to increase the
regular rate of pay of the employees for the period of its
retroactivity. Thus, if an employee is awarded a retroactive increase of
10 cents per hour, he is owed, under the Act, a retroactive increase of
15 cents for each overtime hour he has worked during the period, no
matter what the agreement of the parties may be. A retroactive pay
increase in the form of a lump sum for a particular period must be
prorated back over the hours of the period to which it is allocable to
determine the resultant increases in the regular rate, in precisely the
same manner as a lump sum bonus. For a discussion of the method of
allocating bonuses based on employment in a prior period to the
workweeks covered by the bonus payment, see Sec. 778.209.
