(a) The problem of reduction in the workweek is somewhat different
where a temporary reduction is involved. Reductions for the period of a
dead or slow season follow the rules announced above. However, reduction
on a more temporary or sporadic basis presents a different problem. It
is obvious that as a matter of simple arithmetic an employer might adopt
a series of different rates for the same work, varying inversely with
the number of overtime hours worked in such a way that the employee
would earn no more than his straight time rate no matter how many hours
he worked. If he set the rate at $6 per hour for all workweeks in which
the employee worked 40 hours or less, approximately $5.93 per hour for
workweeks of 41 hours, approximately $5.86 for workweeks of 42 hours,
approximately $5.45 for workweeks of 50 hours, and so on, the employee
would always receive (for straight time and overtime
at these ``rates'') $6 an hour regardless of the number of overtime
hours worked. This is an obvious bookkeeping device designed to avoid
the payment of overtime compensation and is not in accord with the law.
See Walling v. Green Head Bit & Supply Co., 138 F. 2d 453. The regular
rate of pay of this employee for overtime purposes is, obviously, the
rate he earns in the normal nonovertime week--in this case, $6 per hour.
(b) The situation is different in degree but not in principle where
employees who have been at a bona fide $6 rate usually working 50 hours
and taking home $330 as total straight time and overtime pay for the
week are, during occasional weeks, cut back to 42 hours. If the employer
raises their rate to $7.65 for such weeks so that their total
compensation is $328.95 for a 42-hour week the question may properly be
asked, when they return to the 50-hour week, whether the $6 rate is
really their regular rate. Are they putting in 8 additional hours of
work for that extra $1.05 or is their ``regular'' rate really now $7.65
an hour since this is what they earn in the short workweek? It seems
clear that where different rates are paid from week to week for the same
work and where the difference is justified by no factor other than the
number of hours worked by the individual employee--the longer he works
the lower the rate--the device is evasive and the rate actually paid in
the shorter or nonovertime week is his regular rate for overtime
purposes in all weeks.
[46 FR 7317, Jan. 23, 1981; 46 FR 33516, June 30, 1981]
