Overtime on certified payroll: the forty-hour rule, quoted

The governing paragraph is 29 CFR 5.5(b)(1), which implements the Contract Work Hours and Safety Standards Act. It reads: "No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek." Two phrases in that sentence do all the work, and they are the two people get wrong.

The regulation says "in any workweek" and "in excess of forty hours in such workweek". There is no federal daily threshold on Davis-Bacon work. A worker who puts in twelve hours on Tuesday and takes Friday off has worked no federal overtime if the week totals forty. This surprises people who are used to state rules, or who assume eight hours is a federal ceiling. It is not. What matters federally is the total across the workweek. That is also why column (5) of Form WH-347 is headed "TOTAL HOURS WORKED FOR WEEK" and why the daily grid in column (4) has to add up to it — a reviewer checking overtime is looking at the weekly figure.

The second phrase is "one and one-half times the basic rate of pay". The multiplier applies to the base hourly rate. It does not apply to the fringe benefit portion. If a worker's wage determination sets a base rate of forty-eight dollars and ten cents plus fourteen dollars of fringe, the overtime rate is one and a half times forty-eight ten, not one and a half times sixty-two ten. The fringe is still owed for every hour worked, including overtime hours — it is simply owed at its straight rate rather than at time and a half. Getting this backwards inflates your payroll and is one of the easier errors for a reviewer to spot, because the arithmetic does not reconcile against the wage determination.

Form WH-347 gives each worker a single band split into a straight-time row and an overtime row across the day grid. Column (6A) is headed "HOURLY WAGE RATE PAID FOR ST AND OT" and takes both figures stacked in one cell — the straight rate above, the overtime rate below. Column (6B) is the total fringe benefit credit and (6C) is any payment made in lieu of fringes. If you show forty-five hours in the week, a reviewer expects to see five of them on the overtime row and an overtime rate that is at least one and a half times what you put on the straight row.

Federal law sets a floor, not a ceiling, and several states impose daily overtime on public works. California is the most commonly encountered: it requires overtime beyond eight hours in a day and double time beyond twelve, and its own certified payroll format has fields for both. If your project is subject to a state prevailing wage law as well as Davis-Bacon, you owe whichever is more generous to the worker, and you may need to file in the state's format as well as the federal one. Do not assume the federal forty-hour rule is the whole obligation on a state-funded or jointly funded job.

Worth flagging honestly: page 1 of Form WH-347 has a straight-time row and an overtime row, and no double-time row. If you owe double time under a state rule, how you present it on the federal form is not something the form itself resolves. Contractors handle it in different ways, and the right answer depends on what your contracting agency accepts. Ask them rather than guessing — a payroll rejected for presentation is still a rejected payroll, and the agency is the party whose opinion decides it.

When an agency checks your overtime, the sums are simple and mechanical. The daily hours must add to the weekly total. Hours over forty must appear on the overtime row. The overtime rate must be at least one and a half times the straight rate. Gross earned should be consistent with hours times rates, allowing for piecework and shift differentials. And gross for all work minus total deductions must equal net pay. Every one of those is checkable without knowing anything about your business, which is exactly why they are the checks that get run first.