(a) Applicable principles. Under some employment agreements, an
employee may be paid a minimum of a specified number of hours' pay at
the applicable straight time or overtime rate on infrequent and sporadic
occasions when, after reporting to work at his scheduled starting time
on a regular work
day or on another day on which he has been scheduled to work, he is not
provided with the expected amount of work. The amounts that may be paid
under such an agreement over and above what the employee would receive
if paid at his customary rate only for the number of hours worked are
paid to compensate the employee for the time wasted by him in reporting
for work and to prevent undue loss of pay resulting from the employer's
failure to provide expected work during regular hours. One of the
primary purposes of such an arrangement is to discourage employers from
calling their employees in to work for only a fraction of a day when
they might get full-time work elsewhere. Pay arrangements of this kind
are commonly referred to as ``show-up'' or ``reporting'' pay. Under the
principles and subject to the conditions set forth in subpart B of this
part and Secs. 778.201 through 778.207, that portion of such payment
which represents compensation at the applicable rates for the straight
time or overtime hours actually worked, if any, during such period may
be credited as straight time or overtime compensation, as the case may
be, in computing overtime compensation due under the Act. The amount by
which the specified number of hours' pay exceeds such compensation for
the hours actually worked is considered as a payment that is not made
for hours worked. As such, it may be excluded from the computation of
the employee's regular rate and cannot be credited toward statutory
overtime compensation due him.
(b) Application illustrated. To illustrate, assume that an employee
entitled to overtime pay after 40 hours a week whose workweek begins on
Monday and who is paid $5 an hour reports for work on Monday according
to schedule and is sent home after being given only 2 hours of work. He
then works 8 hours each day on Tuesday through Saturday, inclusive,
making a total of 42 hours for the week. The employment agreement
covering the employees in the plant, who normally work 8 hours a day,
Monday through Friday, provides that an employee reporting for scheduled
work on any day will receive a minimum of 4 hours' work or pay. The
employee thus receives not only the $10 earned in the 2 hours of work on
Monday but an extra 2 hours' ``show-up'' pay, or $10 by reason of this
agreement. However, since this $10 in ``show-up'' pay is not regarded as
compensation for hours worked, the employee's regular rate remains $5
and the overtime requirements of the Act are satisfied if he receives,
in addition to the $210 straight-time pay for 42 hours and the $10
``show-up'' payment, the sum of $5 as extra compensation for the 2 hours
of overtime work on Saturday.
[46 FR 7312, Jan. 23, 1981]
