(a) An example of the operation of a plan of the second type
discussed in Sec. 778.312 may serve to illustrate the effects on
statutory overtime computations of payment on a task basis. Assume the
following facts: The employment agreement establishes a basic hourly
rate of $5 per hour, provides for the payment of $7.50 per hour for
overtime work (in excess of the basic workday or workweek) and defines
the basic workday as 8 hours, and the basic workweek as 40 hours, Monday
through Friday. It further provides that the assembling of a machine
constitutes a day's work. An employee who completes the assembling job
in less than 8 hours will be paid 8 hours' pay at the established rate
of $5 per hour and will receive pay at the ``overtime'' rate for hours
worked after the completion of the task. An employee works the following
hours in a particular week:
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M T W T F S S
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Hours spent on task..................................... 6 7 7 9 8\1/2\ 6 0
Day's pay under contract................................ $40 $40 $40 $40 $40 $60 0
Additional hours........................................ 2 0 2 0 \1/2\ 0 0
Additional pay under contract........................... $15 0 $15 $7.50 $7.50 0 0
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(b) In the example in paragraph (a) of this section the employee has
actually worked a total of 48 hours and is owed under the contract a
total of $305 for the week. The only sums which can be excluded as
overtime premiums from this total before the regular rate is determined
are the extra $2.50 payments for the extra hour on Thursday and Friday
made because of work actually in excess of 8 hours. The payment of the
other premium rates under the contract is either without regard to
whether or not the hours they compensated were in excess of a bona fide
daily or weekly standard or without regard to the number of overtime
hours worked. Thus only the sum of $5 is excluded from the total. The
remaining $300 is divided by 48 hours to determine the regular rate--
$6.25 per hour. One-half this rate is due under the Act as extra
compensation for each of the 8 overtime hours--$25. The $5 payment under
the contract for actual excess hours may be credited and the balance--
$20--is owed in addition to the $305 due under the contract.
[46 FR 7315, Jan. 23, 1981]
