C.F.R. » Title 29 » CHAPTER V—WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR › SUBCHAPTER B—STATEMENTS OF GENERAL POLICY OR INTERPRETATION NOT DIRECTLY RELATED TO REGULATIONS › PART 778—OVERTIME COMPENSATION › Subpart C—Payments That May Be Excluded From the “Regular Rate”

29 C.F.R. § 778.202

Premium pay for hours in excess of a daily or weekly standard

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(a) Hours in excess of 8 per day or statutory weekly standard. A written or unwritten employment contract, agreement, understanding, handbook, policy, or practice may provide for the payment of overtime compensation for hours worked in excess of 8 per day or 40 per week. If the payment of such overtime compensation is in fact contingent upon the employee's having worked in excess of 8 hours in a day or in excess of the number of hours in the workweek specified in section 7(a) of the Act as the weekly maximum and such hours are reflected in an agreement or by established practice, the extra premium compensation paid for the excess hours is excludable from the regular rate under section 7(e)(5) of the Act and may be credited toward statutory overtime payments pursuant to section 7(h) of the Act. In applying the rules in this paragraph (a) to situations where it is the custom to pay employees for hours during which no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause, as these terms are explained in §§ 778.216 through 778.224, it is permissible (but not required) to count these hours as hours worked in determining the amount of overtime premium pay, due for hours in excess of 8 per day or the applicable maximum hours standard, which may be excluded from the regular rate and credited toward the statutory overtime compensation.

(b) Hours in excess of normal or regular working hours. Similarly, where the employee's normal or regular daily or weekly working hours are greater or fewer than 8 hours and 40 hours respectively and such hours are reflected in an agreement or by established practice, and the employee receives payment of premium rates for work in excess of such normal or regular hours of work for the day or week (such as 7 in a day or 35 in a week), the extra compensation provided by such premium rates, paid for excessive hours, is a true overtime premium to be excluded from the regular rate and it may be credited toward overtime compensation due under the Act.

(c) Premiums for excessive daily hours. If an employee whose maximum hours standard is 40 hours is hired at the rate of $12 an hour and receives, as overtime compensation under his contract, $12.50 per hour for each hour actually worked in excess of 8 per day (or in excess of his normal or regular daily working hours), his employer may exclude the premium portion of the overtime rate from the employee's regular rate and credit the total of the extra 50-cent payments thus made for daily overtime hours against the overtime compensation which is due under the statute for hours in excess of 40 in that workweek. If the same contract further provided for the payment of $13 for hours in excess of 12 per day, the extra $1 payments could likewise be credited toward overtime compensation due under the Act. To qualify as overtime premiums under section 7(e)(5) of the Act, the daily overtime premium payments must be made for hours in excess of 8 hours per day or the employee's normal or regular working hours. If the normal workday is artificially divided into a “straight time” period to which one rate is assigned, followed by a so-called “overtime” period for which a higher “rate” is specified, the arrangement will be regarded as a device to contravene the statutory purposes and the premiums will be considered part of the regular rate. For a fuller discussion of this problem, see § 778.501.

(d) Hours in excess of other statutory standard. Where payment at premium rates for hours worked in excess of a specified daily or weekly standard is made pursuant to the requirements of another applicable statute, the extra compensation provided by such premium rates will be regarded as a true overtime premium.

(e) Premium pay for sixth or seventh day worked. Under sections 7(e)(6) and 7(h), extra premium compensation paid for work on the sixth or seventh day worked in the workweek (where the workweek schedule is reflected in an agreement or by established practice) is regarded in the same light as premiums paid for work in excess of the applicable maximum hours standard or the employee's normal or regular workweek.

[33 FR 986, Jan. 26, 1968, as amended at 46 FR 7311, Jan. 23, 1981; 84 FR 68771, Dec. 16, 2019]
Notes of Decisions
Cited in 27 cases (2 in the last 5 years), 1986–2025 · leading case: Conzo v. City of New York, 667 F. Supp. 2d 279 (S.D.N.Y. 2009).
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Conzo v. City of New York, 667 F. Supp. 2d 279 (S.D.N.Y. 2009). · cites it 4× “See 29 C.F.R. § 778.202 . This interpretation provides, among other things, that an employer may credit increased rates paid for hours worked in excess of eight per day “against the overtime compensation which is due under the statute for hours in excess of 40 in that workweek”…”
Hesseltine v. Goodyear Tire & Rubber Co., 391 F. Supp. 2d 509 (E.D. Tex. 2005). · cites it 3× “§ 207 (h)(2); 29 C.F.R. § 778.202 (a) (2004) (citing 29 U.”
Keun-Jae Moon v. Joon Gab Kwon, 248 F. Supp. 2d 201 (S.D.N.Y. 2002). “116; 29 C.F.R. 778.202; see Marshall v. Valhalla Inn, 590 F.”
Ronald L. Howard, Scott R. Kincaid, Donald M. Loftus v. City of Springfield, Illinois, 274 F.3d 1141 (7th Cir. 2001). “See also 29 C.F.R. § 778.202 (c) (credits may be given for daily compensation “against the overtime compensation which is due under the statute for hours in excess of 40 in that workweek” [emphasis added]).”
Lee v. Vance Exec. Prot., Inc., 7 F. App'x 160 (4th Cir. 2001). · cites it 2× “29 C.F.R. § 778.202 (c) (2000). Exemptions must be narrowly construed and the burden is on Vance “to show that it is entitled to the benefits of th[e] exceptions.”
Scott v. City of New York, 592 F. Supp. 2d 475 (S.D.N.Y. 2008). · cites it 2× “29 C.F.R. § 778.202 (c). Accord id. § 778.”
Alexis M. Herman, Sec'y of Labor, United States Dep't of Labor v. Fabri-Centers of Am., Inc., 308 F.3d 580 (6th Cir. 2002). “Thus, while the plain language of § 207(h)(2) does not speak directly to the present issue and while the Secretary has not promulgated or published any regulation pertaining to this statutory provision, these other provisions in the FLSA and its implementing regulations lend…”
Nolan v. City of Chicago, 125 F. Supp. 2d 324 (N.D. Ill. 2000). · cites it 2× “” *331 29 C.F.R. § 778.202 (a). This is precisely the type of extra compensation Plaintiffs receive under Article 20 of the CBA for all hours worked in excess of the normal work day (eight hours) and the normal work week (forty hours).”
Abbey v. City of Jackson, 883 F. Supp. 181 (E.D. Mich. 1995). · cites it 2× “29 C.F.R. § 778.202 . 5 In this case, defendant is compensating plaintiffs under an employment contract, the CBA, at a rate greater than lié times the regular rate.”
Rubin v. Wal-Mart Stores, Inc., 599 F. Supp. 2d 1176 (N.D. Cal. 2009). · cites it 2× “To the contrary, federal regulations are clear that “payment at premium rates .”
Alexander v. United States, 28 Fed. Cl. 475 (Fed. Cl. 1993). · cites it 3× “202 (d) states that: [w]here payment at premium rates for hours worked in excess of a specified daily or weekly standard is made pursuant to the requirements of another applicable statute, the extra compensation provided by such premium rates will be regarded as a true overtime…”
Rudy v. City of Lowell, 777 F. Supp. 2d 255 (D. Mass. 2011). “With regard to the exact issue before the Court, 29 C.F.R. § 778.202 (c) explains that credits pursuant to § 207(h) may be given for overtime due “in that workweek”.”
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— 29 C.F.R. § 778.202(e) — 1 case
Alexander v. United States, 28 Fed. Cl. 475 (Fed. Cl. 1993). “202 (d) states that: [w]here payment at premium rates for hours worked in excess of a specified daily or weekly standard is made pursuant to the requirements of another applicable statute, the extra compensation provided by such premium rates will be regarded as a true overtime…”
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