A premium in the form of a lump sum which is paid for work performed during overtime hours without regard to the number of overtime hours worked does not qualify as an overtime premium even though the amount of money may be equal to or greater than the sum owed on a per hour basis. For example, an agreement that provides for the payment of a flat sum of $75 to employees who work on Sunday does not provide a premium which will qualify as an overtime premium, even though the employee's straight time rate is $5 an hour and the employee always works less than 10 hours on Sunday. Likewise, where an agreement provides for the payment for work on Sunday of either the flat sum of $75 or time and one-half the employee's regular rate for all hours worked on Sunday, whichever is greater, the $75 guaranteed payment is not an overtime premium. The reason for this is clear. If the rule were otherwise, an employer desiring to pay an employee a fixed salary regardless of the number of hours worked in excess of the applicable maximum hours standard could merely label as overtime pay a fixed portion of such salary sufficient to take care of compensation for the maximum number of hours that would be worked. The Congressional purpose to effectuate a maximum hours standard by placing a penalty upon the performance of excessive overtime work would thus be defeated. For this reason, where extra compensation is paid in the form of a lump sum for work performed in overtime hours, it must be included in the regular rate and may not be credited against statutory overtime compensation due.
[46 FR 7314, Jan. 23, 1981]
Notes of Decisions
R. Alexander Acosta v. Min & Kim, Inc., 919 F.3d 361 (6th Cir. 2019).
“See 29 C.F.R. § 778.310 . That means total pay for Seoul Garden is employees' total weekly pay , the "guaranteed wage," bonus and all, which in turn means a higher overtime rate than Hur and Kim used.”
Alexander v. United States, 28 Fed. Cl. 475 (Fed. Cl. 1993).
· cites it 4× “Additionally, 29 C.F.R. § 778.310 provides that: A premium in the form of a lump sum which is paid for work performed during overtime hours without regard to the number of overtime hours worked does not qualify as an overtime premium even though the amount of money may be equal…”
Hickman v. TL Transp., LLC, 318 F. Supp. 3d 718 (E.D. Pa. 2018).
· cites it 3× “29 C.F.R. § 778.310 (emphasis added). 4 Thus, if an employee's total hours fluctuate from week to week, an employer may use a lump sum payment to satisfy its overtime obligations to the employee only if the sum is based on the number of overtime hours actually worked.”
Regan v. City of Charleston, 131 F. Supp. 3d 541 (D.S.C. 2015).
· cites it 2× “including 29 C.F.R. §§ 778.310 and .311 for its determination in or around December 2007 that the IP overtime pay was required to be added to the [FWW] salary in order to compute the regular rate.”
Mohammadi v. Nwabuisi, 990 F. Supp. 2d 723 (W.D. Tex. 2014).
· cites it 2× “See 29 C.F.R. § 778.310 (“A premium in the form of a lump sum which is paid for work performed during overtime hours without regard to the number of overtime hours worked does not qualify as an overtime premium even though the amount of money may be equal to or greater than the…”
Fed. Air Marshals(Fam) Fam 1 v. United States, 84 Fed. Cl. 585 (Fed. Cl. 2008).
“Specifically, defendant asserts that FAM Availability Pay is an overtime premium because it is tied to the number of hours worked, and is not a “premium in the form of a lump sum” paid “without regard to the number of overtime hours worked,” within the meaning of 29 C.F.R. §…”
Alexander v. United States, 1 Cl. Ct. 653 (Ct. Cl. 1983).
“Equally fatal to plaintiffs’ contention that AUO pay qualifies for the section 7(e)(5) exclusion is the fact that it is not paid for “certain hours,” but is, on the contrary, a fixed sum paid without regard to the actual number of overtime hours worked in a week. AUO pay is…”
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