The reasoning applied in the foregoing sections does not, of course,
apply to a situation in which the former earnings at both straight time
and overtime are paid to the employee for the reduced workweek. Suppose
an employee was hired at an hourly rate of $5 an hour and regularly
worked 50 hours, earning $275 as his total straight time and overtime
compensation, and the parties now agree to reduce the workweek to 45
hours without any reduction in take-home pay. The parties in such a
situation may agree to an increase in the hourly rate from $5 per hour
to $6 so that for a workweek of 45 hours (the reduced schedule) the
employee's straight time and overtime earnings will be $285. The parties
cannot, however, agree that the employee is to receive exactly $285 as
total compensation (including overtime pay) for a workweek varying, for
example, up to 50 hours, unless he does so pursuant to contracts
specifically permitted in section 7(f) of the Act, as discussed in
Secs. 778.402 through 778.414. An employer cannot otherwise discharge
his statutory obligation to pay overtime compensation to an employee who
does not work the same fixed hours each week by paying a fixed amount
purporting to cover both straight time and overtime compensation for an
``agreed'' number of hours. To permit such a practice without proper
statutory safeguards would result in sanctioning the circumvention of
the provisions of the Act which require that an employee who works more
than 40 hours in any workweek be compensated, in accordance with express
congressional intent, at a rate not less than one and one-half times his
regular rate of pay for the burden of working long hours. In
arrangements of this type, no additional financial pressure would fall
upon the employer and no additional compensation would be due to the
employee under such a plan until the workweek exceeded 50 hours.
[46 FR 7316, Jan. 23, 1981]
