Wage and Hour Division, Labor § 778.111

§ 778.109 The regular rate is an hourly $3.10, or 40 hours at $6.20 plus 6 hours at rate. $9.30). The ‘‘regular rate’’ under the Act is a [46 FR 7309, Jan. 23, 1981] rate per hour. The Act does not require employers to compensate employees on § 778.111 Pieceworker. an hourly rate basis; their earnings (a) Piece rates and supplements gen- may be determined on a piece-rate, sal- erally. When an employee is employed ary, commission, or other basis, but in on a piece-rate basis, his regular hour- such case the overtime compensation ly rate of pay is computed by adding due to employees must be computed on together his total earnings for the the basis of the hourly rate derived workweek from piece rates and all therefrom and, therefore, it is nec- other sources (such as production bo- essary to compute the regular hourly nuses) and any sums paid for waiting rate of such employees during each time or other hours worked (except workweek, with certain statutory ex- statutory exclusions): This sum is then ceptions discussed in §§ 778.400 through divided by the number of hours worked 778.421. The regular hourly rate of pay in the week for which such compensa- of an employee is determined by divid- tion was paid, to yield the piece- ing his total remuneration for employ- worker’s ‘‘regular rate’’ for that week. ment (except statutory exclusions) in For his overtime work the piece-work- any workweek by the total number of er is entitled to be paid, in addition to hours actually worked by him in that his total weekly earnings at this reg- workweek for which such compensa- ular rate for all hours worked, a sum tion was paid. The following sections equivalent to one-half this regular rate give some examples of the proper of pay multiplied by the number of method of determining the regular rate hours worked in excess of 40 in the of pay in particular instances: (The week. (For an alternative method of maximum hours standard used in these complying with the overtime require- examples is 40 hours in a workweek). ments of the Act as far as pieceworkers are concerned, see § 778.418.) Only addi- § 778.110 Hourly rate employee. tional half-time pay is required in such (a) Earnings at hourly rate exclusively. cases where the employee has already If the employee is employed solely on received straight-time compensation at the basis of a single hourly rate, the piece rates or by supplementary pay- hourly rate is his ‘‘regular rate.’’ For ments for all hours worked. Thus, if his overtime work he must be paid, in the employee has worked 50 hours and addition to his straight time hourly has earned $245.50 at piece rates for 46 earnings, a sum determined by multi- hours of productive work and in addi- plying one-half the hourly rate by the tion has been compensated at $5.00 an number of hours worked in excess of 40 hour for 4 hours of waiting time, his in the week. Thus a $6 hourly rate will total compensation, $265.50 must be di- bring, for an employee who works 46 vided by his total hours of work, 50, to hours, a total weekly wage of $294 (46 arrive at his regular hourly rate of hours at $6 plus 6 at $3). In other words, pay—$5.31. For the 10 hours of overtime the employee is entitled to be paid an the employee is entitled to additional amount equal to $6 an hour for 40 hours compensation of $26.55 (10 hours at and $9 an hour for the 6 hours of over- $2.655). For the week’s work he is thus time, or a total of $294. entitled to a total of $292.05 (which is (b) Hourly rate and bonus. If the em- equivalent to 40 hours at $5.31 plus 10 ployee receives, in addition to his earn- overtime hours at $7.965). ings at the hourly rate, a production (b) Piece rates with minimum hourly bonus of $9.20, the regular hourly rate guarantee. In some cases an employee is of pay is $6.20 an hour (46 hours at $6 hired on a piece-rate basis coupled with yields $276; the addition of the $9.20 a minimum hourly guaranty. Where bonus makes a total of $285.20; this the total piece-rate earnings for the total divided by 46 hours yields a rate workweek fall short of the amount of $6.20). The employee is then entitled that would be earned for the total to be paid a total wage of $303.80 for 46 hours of work at the guaranteed rate, hours (46 hours at $6.20 plus 6 hours at the employee is paid the difference. In

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VerDate Jul<17>2002 08:31 Jul 21, 2002 Jkt 197105 PO 00000 Frm 00389 Fmt 8010 Sfmt 8010 Y:\SGML\197105T.XXX pfrm17 PsN: 197105T § 778.112 29 CFR Ch. V (7–1–02 Edition)

such weeks the employee is in fact paid longer than a workweek, such as a at an hourly rate and the minimum month, it must be reduced to its work- hourly guaranty which he was paid is week equivalent. A monthly salary is his regular rate in that week. In the subject to translation to its equivalent example just given, if the employee weekly wage by multiplying by 12 (the was guaranteed $5.50 an hour for pro- number of months) and dividing by 52 ductive working time, he would be paid (the number of weeks). A semimonthly $253 (46×$5.50) for the 46 hours of pro- salary is translated into its equivalent ductive work (instead of the $245.50 weekly wage by multiplying by 24 and earned at piece rates). In a week in dividing by 52. Once the weekly wage is which no waiting time was involved, he arrived at, the regular hourly rate of would be owed an additional $2.75 (half pay will be calculated as indicated time) for each of the 6 overtime hours above. The regular rate of an employee worked, to bring his total compensa- who is paid a regular monthly salary of tion up to $269.50 (46 hours at $5.50 plus $1,040, or a regular semimonthly salary 6 hours at $2.75 or 40 hours at $5.50 plus of $520 for 40 hours a week, is thus 6 hours at $8.25). If he is paid at a dif- found to be $6 per hour. Under regula- ferent rate for waiting time, his reg- tions of the Administrator, pursuant to ular rate is the weighted average of the the authority given to him in section 2 hourly rates, as discussed in § 778.115. 7(g)(3) of the Act, the parties may pro- vide that the regular rates shall be de- [46 FR 7309, Jan. 23, 1981] termined by dividing the monthly sal- § 778.112 Day rates and job rates. ary by the number of working days in the month and then by the number of If the employee is paid a flat sum for hours of the normal or regular work- a day’s work or for doing a particular day. Of course, the resultant rate in job, without regard to the number of such a case must not be less than the hours worked in the day or at the job, statutory minimum wage. and if he receives no other form of compensation for services, his regular [46 FR 7310, Jan. 23, 1981] rate is determined by totaling all the sums received at such day rates or job § 778.114 Fixed salary for fluctuating rates in the workweek and dividing by hours. the total hours actually worked. He is (a) An employee employed on a sal- then entitled to extra half-time pay at ary basis may have hours of work this rate for all hours worked in excess which fluctuate from week to week and of 40 in the workweek. the salary may be paid him pursuant to an understanding with his employer § 778.113 Salaried employees—general. that he will receive such fixed amount (a) Weekly salary. If the employee is as straight time pay for whatever employed solely on a weekly salary hours he is called upon to work in a basis, his regular hourly rate of pay, on workweek, whether few or many. which time and a half must be paid, is Where there is a clear mutual under- computed by dividing the salary by the standing of the parties that the fixed number of hours which the salary is in- salary is compensation (apart from tended to compensate. If an employee overtime premiums) for the hours is hired at a salary of $182.70 and if it worked each workweek, whatever their is understood that this salary is com- number, rather than for working 40 pensation for a regular workweek of 35 hours or some other fixed weekly work hours, the employee’s regular rate of period, such a salary arrangement is pay is $182.70 divided by 35 hours, or permitted by the Act if the amount of $5.22 an hour, and when he works over- the salary is sufficient to provide com- time he is entitled to receive $5.22 for pensation to the employee at a rate not each of the first 40 hours and $7.83 (one less than the applicable minimum wage and one-half times $5.22) for each hour rate for every hour worked in those thereafter. If an employee is hired at a workweeks in which the number of salary of $220.80 for a 40-hour week his hours he works is greatest, and if he re- regular rate is $5.52 an hour. ceives extra compensation, in addition (b) Salary for periods other than work- to such salary, for all overtime hours week. Where the salary covers a period worked at a rate not less than one-half

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