The requirements of section 7 of the Act with respect to the payment
of overtime compensation to an employee for a workweek longer than the
applicable number of hours established in section 7(a) of the Act, will
be met under the provisions of section 7(g)(3) of the Act by payments
which satisfy all the following standards:
(a) Overtime compensation computed in accordance with this part and
section 7(g)(3) of the Act is paid pursuant
to an agreement or understanding arrived at between the employer and the
employee or as a result of collective bargaining before performance of
the work;
(b) A rate is established by such agreement or understanding as the
basic rate to be used in computing overtime compensation thereunder;
(c) The established basic rate is a specified rate or a rate which
can be derived from the application of a specified method of
calculation;
(d) The established basic rate is a bona fide rate and is not less
than the minimum hourly rate required by applicable law;
(e) The basic rate so established is authorized by Sec. 548.3 or is
authorized by the Administrator under Sec. 548.4 as being substantially
equivalent to the average hourly earnings of the employee, exclusive of
overtime premiums, in the particular work over a representative period
of time;
(f) Overtime hours are compensated at a rate of not less than one
and one-half times such established basic rate;
(g) The hours for which the employee is paid not less than one and
one-half times such established basic rate qualify as overtime hours
under section 7(e) (5), (6), or (7) of the Act;
(h) The number of hours for which the employee is paid not less than
one and one-half times such established basic rate equals or exceeds the
number of hours worked by him in any workweek in excess of the maximum
workweek applicable to such employees under subsection 7(a) of the Act;
(i) The employee's average hourly earnings for the workweek
exclusive of payments described in paragraphs (1) through (7) of section
7(e) of the Act are not less than the minimum hourly rate required by
this Act or other applicable law;
(j) Extra overtime compensation is properly computed and paid on
other forms of additional pay which have not been considered in arriving
at the basic rate but which are required to be included in computing the
regular rate.
[20 FR 5679, Aug. 6, 1955, as amended at 26 FR 7731, Aug. 18, 1961]
