Detroit evening times. (Detroit, Mich) 1921-1958, 1942-06-09
Alt
Overtime Rule
Is Clarified
U. S. Supreme Court
Hand, Down Two
Important Decisions

important Decisions
WASHINGTON, June q - The
Supreme Court has ruled on sppli.
cation of the wage.Hour Acts re-
ouirements of overtime pay "a
employees who work irregular hours
in decisions just handed down.
The court threw out as illegal
one contract between employer
and employee which fixed no hourly
rate and made no mention Of over
time. The court held that this con-
tract violated the act even though
wage paid under II always ex-
ceeded the minimum wage required
by the law. plus one and half
times that minimum rate for all
hours worked over 40 per week.
AT the same time the court, IN a
five TO four decision. upheld an
other contract which the wage
hour administrators had attacked
and which provided a weekly guar
antee 10 workers who were en-
ployed at a stated hourly rate for
Irregular hours each week.
NEWSPAPER UPHELD
The following was the arrange
mont which the court. with JUS
tees Reed, Black, Douglas and
Murphy dissenting. held TO be In
conformity with the Wage-Hour
Acts overtime requirement.
A. III. Belo Corporation. pub
Usher OF the Dallas Morning News,
contracted with each OF Its en-
ployes for basic hourly rate OF pay,
for one and half times that rate
for all hours over 40 a week, and
for basic guaranteed wage of $40
a week. Basic hourly rate was
fixed in each case SO that an en-
ploye would work 54ik hours each
week before his regular and over
time pay exceeded the guarantee
of $40 a week.
The wage-hour administration
had attacked these contracts as an
evasion of the law. II argued that
the $40 guarantee really fixed the
basic rate and that hourly rates
named in the contract were so
computed as TO avoid any increase
in the company's wages even
though II continued to work its
employees more hours per week
than the act contemplated. The
administrators demanded that the
company compute its basic rate of
pay by dividing maximum number
OF hours into the $40 week and
that the company pay III times
this rate for all hours over the
legal maximum.
The court rejected this conten-
ton and held that the contract ar
rangements are legal.
Nothing in the act bars an en-
ployer from contracting with his
employees to pay them the same
wages they received previously so
long as the new rate equals or
exceeds the minimum required by
the act, the court said.
However. in another decision,
there was no contract fixing a
basic rate or mentioning overtime.
the court, with Justice Roberts
dissenting, held that employer had
violated the act. Following Is the
ARRANGEMENT which the court held
Illegal:
NO BASIC RATE
Overnight Motor Transport
Company employed rate clerk al
$3.50 per week. His duties re.
quired him TO work irregular hours
averaging IS per week. The com.
pany in its contract with him made
no mention of basic rate of pay or
which time and a half for hour:
over 90 could be computed. 1t pait
no overtime for hours over tn,
maximum on the theory that i
already was paying him more thar
the Wage-Hour Act minimum plu'
~ times that minimum for all o
The hours per week over thu
maximum.
The court held that overtim,
must be computed not on the basi
of minimum rates OF pay in TIT
act but on the basis of regular rat
Of pay for each employe. Since II
this case no basic hourly rate hal
been fixed. the court held that tn
basic hourly rate should be deter
mined each week by dividing IN
weekly wage of $3.50 by the mum
Der OF hours worked that week
Since the number OF hours works.
varied each week. the basic rat
would vary each week. the cour
admitted. However. the court he'll
the employe is entitled to u
times this varying basic rate 70