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Code of Federal Regulations Pertaining to U.S. Department of Labor |
| Labor |
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| Wage and Hour Division, Department of Labor |
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| Overtime Compensation |
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| Exceptions From the Regular Rate Principles |
29 CFR 778.400 - The provisions of section 7(g)(3) of the Act. Computing Overtime Pay on an ``Established'' Rate
- Section Number: 778.400
- Section Name: The provisions of section 7(g)(3) of the Act. Computing Overtime Pay on an ``Established'' Rate
Section 7(g)(3) of the Act provides the following exception from the
provisions of section 7(a):
(g) No employer shall be deemed to have violated subsection (a) by
employing any employee for a workweek in excess of the maximum workweek
applicable to such employee under such subsection if, pursuant to an
agreement or understanding arrived at between the employer and the
employee before performance of the work, the amount paid to the employee
for the number of hours worked by him in such workweek in excess of the
maximum workweek applicable to such employee under such subsection:
* * * * *
(3) is computed at a rate not less than one and one-half times the
rate established by such agreement or understanding as the basic rate to
be used in computing overtime compensation thereunder: Provided, That
the rate so established shall be authorized by regulation by the
Secretary of Labor 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; and if (1) the
employee's average hourly earnings for the workweek exclusive of
payments described in paragraphs (1) through (7) of subsection (e) are
not less than the minimum hourly rate required by applicable law, and
(ii) extra overtime compensation is properly computed and paid on other
forms of additional pay required to be included in computing the regular
rate.
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