Under section 7(e)(6) and 7(h) of the Act, extra compensation
provided by a Premium rate of at least time and one-half which is paid
for work on Saturdays, Sundays, holidays, or regular days of rest or on
the sixth or seventh day of the workweek (hereinafter referred to as
``special days'') may be treated as an overtime premium for the purposes
of the Act. If the premium rate is less than time and one-half, the
extra compensation provided by such rate must be included in determining
the employee's regular rate of pay and cannot be credited toward
statutory overtime due, unless it qualifies as an overtime premium under
section 7(e)(5).
(a) ``Special days'' rate must be at least time and one-half to
qualify as overtime premium: The premium rate must be at least ``one and
one-half times the rate established in good faith for like work
performed in nonovertime hours on other days.'' Where an employee is
hired on the basis of a salary for a fixed workweek or at a single
hourly rate of pay, the rate paid for work on ``special days'' must be
at least time and one-half his regular hourly rate in order to qualify
under section 7(e)(6). If the employee is a pieceworker or if he works
at more than one job for which different hourly or piece rates have been
established and these are bona fide rates applicable to the work when
performed during nonovertime hours, the extra compensation provided by a
premium rate of at least one and one-half times either (1) the bona fide
rate applicable to the type of job the employee performs on the
``special days'', or (2) the average hourly earnings in the week in
question, will qualify as an overtime premium under this section. (For a
fuller discussion of computation on the average rate, see Sec. 778.111;
on the rate
applicable to the job, see Secs. 778.415 through 778.421; on the
``established'' rate, see Sec. 778.400.)
(b) Bona fide base rate required. The statute authorizes such
premiums paid for work on ``special days'' to be treated as overtime
premiums only if they are actually based on a ``rate established in good
faith for like work performed in nonovertime hours on other days.'' This
phrase is used for the purpose of distinguishing the bona fide
employment standards contemplated by section 7(e)(6) from fictitious
schemes and artificial or evasive devices as discussed in Subpart F of
this part. Clearly, a rate which yields the employee less than time and
one-half the minimum rate prescribed by the Act would not be a rate
established in good faith.
(c) Work on the specified ``special days'': To qualify as an
overtime premium under section 7(e)(6), the extra compensation must be
paid for work on the specified days. The term ``holiday'' is read in its
ordinary usage to refer to those days customarily observed in the
community in celebration of some historical or religious occasion. A day
of rest arbitrarily granted to employees because of lack of work is not
a ``holiday'' within the meaning of this section, nor is it a ``regular
day of rest.'' The term ``regular day of rest'' means a day on which the
employee in accordance with his regular prearranged schedule is not
expected to report for work. In some instances the ``regular day of
rest'' occurs on the same day or days each week for a particular
employee; in other cases, pursuant to a swing shift schedule, the
schedule day of rest rotates in a definite pattern, such as 6 days work
followed by 2 days of rest. In either case the extra compensation
provided by a premium rate for work on such scheduled days of rest (if
such rate is at least one and one-half times the bona fide rate
established for like work during nonovertime hours on other days) may be
treated as an overtime premium and thus need not be included in
computing the employee's regular rate of pay and may be credited toward
overtime payments due under the Act.
(d) Payment of premiums for work performed on the ``special day'':
To qualify as an overtime premium under section 7(e)(6), the premium
must be paid because work is performed on the days specified and not for
some other reason which would not qualify the premium as an overtime
premium under section 7(e)(5), (6), or (7). (For examples distinguishing
pay for work on a holiday from idle holiday pay, see Sec. 778.219.) Thus
a premium rate paid to an employee only when he received less than 24
hours' notice that he is required to report for work on his regular day
of rest is not a premium paid for work on one of the specified days; it
is a premium imposed as a penalty upon the employer for failure to give
adequate notice to compensate the employee for the inconvenience of
disarranging his private life. The extra compensation is not an overtime
premium. It is part of his regular rate of pay unless such extra
compensation is paid the employee on infrequent and sporadic occasions
so as to qualify for exclusion under section 7(e)(2) in which event it
need not be included in computing his regular rate of pay, as explained
in Sec. 778.222.
