U.S. DEPARTMENT OF LABOR
EMPLOYMENT STANDARDS ADMINISTRATION
WASHINGTON, D.C. 20210
September 5, 1972
MEMORANDUM #106
TO: All Government Contracting Agencies of the Federal
Government and the District of Columbia
SUBJECT: Computing Liquidated Damages Under the Contract Work
Hours and Safety Standards Act
We have had recent inquiries regarding the proper method of computing
liquidated damages for violations of the Contract Work Hours and
Safety Standards Act, especially in those instances where the
contractor has paid some overtime.
The enclosed principles regarding "computation of liquidated damages"
are followed by the Wage and Hour Division in carrying out its
enforcement and administrative responsibilities under the Contract
Work Hours and Safety Standards Act. They are furnished for your
assistance and guidance in carrying out your responsibilities under
that Act.
Section 102(b)(2) of the Contract Work Hours and Safety Standards
Act dealing with liquidated damages requires that "liquidated damages
shall be computed, with respect to each individual employed as a
laborer or mechanic in violation of any provision of this Act, in
the sum of .$10 for each calendar day on which such individual was
required or permitted to work in excess of eight hours or in excess
of the standard workweek of 40 hours without payment of the overtime
wages required by this Act."
When computing liquidated damages it has been determined that such
damages may not be computed independently of the wage payment obligations
provided in the Act. Consequently, when the Act requires that a
contractor or subcontractor pay either weekly or daily overtime,
depending upon which is most beneficial to the employee involved,
liquidated damages may be computed only to the extent that the
contractor has failed to meet his obligations. This principle may
be best illustrated by the following examples where no overtime
was paid:

2 .
If the daily overtime hours equal or exceed the weekly overtime hours,
liquidated damages should be computed for the calendar days upon which
daily overtime is worked. On the other hand, if the weekly overtime
hours exceed the daily overtime hours, liquidated damages should be
computed for the days on which the weekly overtime hours were worked.
Thus:
Example 1
Computation of
Overtime
     M T W T F  S S          Daily    Weekly
OT   1 2 3 4 2              12       12 (no overtime
                0 0                      paid)
ST   8 8 8 8 8              40       40
In the above example, where the daily overtime hours equal the weekly
overtime hours, liquidated damages should be computed for the calendar
days upon which daily overtime is worked. In this case $50 in liquidated
damages would be computed.
Example 2
Computation of
Overtime
     M T W T F S S           Daily   Weekly
OT   2 3 4 2                  11       3 (no overtime
             0 0 0                        paid)
ST   8 8 8 8                  32       40
In this case, the daily overtime exceeds the weekly overtime so
liquidated damages would be computed for Monday, Tuesday, Wednesday,
and Thursday, or $40.
Example 3
Computation of
Overtime
     M T W T F S S           Daily   Weekly
OT   2 4 5 1   3              15      23   (no overtime
                 0                          paid)
ST   8 8 8 8 8 8              48      40

3
In the above example, liquidated damages would be computed for the weekly
overtime hours, because they exceed the daily overtime hours. Weekly
overtime hours were worked on three calendar days, Thursday, Friday,
and Saturday and thus $30 in liquidated damages would be computed.
In some cases, the contractor may pay weekly overtime (after 40 or 42
or 44 hours per week) but not daily overtime. If the daily overtime
hours in such cases equal or exceed the weekly overtime hours, the
weekly overtime hours for which payment has been made may be used to
offset the daily hours as they accrue. On the other hand, if the weekly
overtime hours exceed the daily overtime hours, liquidated damages
should be computed for the days on which the weekly overtime hours not
paid for at time and one half were worked. The following examples will
illustrate the application of this principle.
Example 4
Computation of
Overtime
    M T W T F S S          Daily   Weekly
OT  3   1 1                  5       2 (2 hours over-
              0 0                       time paid)
ST  8 8 8 8 5                37      40
In the above example the employer paid weekly overtime after 40 hours
per week thus, the 2 weekly overtime hours paid for at time and one half
will offset only 2 of the daily overtime hours worked on Monday, still
leaving Monday as an "overtime" day. Therefore, liquidated damages
should be computed for Monday, Wednesday, and Thursday and would be $30.
Example 5
Computation of
Overtime
                           Daily    Weekly
    M T W T F S S
OT  1 1     3                 5       2 (2 hours
                                         overtime paid)
ST  8 8 8 5 8                37      40

4
In the above example the employer paid weekly overtime after 40 hours
per week. Thus, the 2 weekly overtime hours paid for at time and one half
will offset all the daily overtime hours worked on Monday and Tuesday.
Therefore, liquidated damages should be computed for Friday only and
would be $10.
Example 6
Computation of
Overtime
    M T W T F S S           Daily    Weekly
OT  3   4   4                11       11  (7 hours
              0 0                          overtime paid)
ST  8 8 8 8 8                40       40
In the above example, the contractor paid weekly overtime after 44 hours
in the workweek. The 7 weekly overtime hours paid for at time and one
half will offset the daily overtime hours on Monday and Wednesday.
Therefore, liquidated damages should be computed for Friday only, or $10.
Example 7
Computation of
Dyertime
    M T W T F S S           Daily    Weekly
OT      1 1                   2        7 (3 hours over-
              5 0                         time paid)
ST  8 8 8 8 8                45       40
In this example, the contractor paid weekly overtime after 44 hours in
the workweek (3 hours at time and one half). Weekly overtime hours not
paid for at time and one half occurred on Saturday only and thus $10
would be computed in damages.
Horace E. Menasco
Deputy Assistant Secretary