The regular rate covered in Chapter 1 is not simply whatever hourly figure appears on a pay stub — it is total compensation for the workweek divided by hours worked, and an employer cannot shrink the workweek's overtime bill by choosing a lower number to write down. The regulation is direct about this: the overtime provisions of the Act cannot be avoided by setting an artificially low hourly rate upon which overtime pay is based and making up the rest of an employee's pay through some other channel. An hourly figure counts as the regular rate only when hourly earnings are the employee's sole source of pay. Under § 778.500(c), once facilities (such as lodging or meals the employer furnishes), commissions, or bonuses and other payments not excluded under section 7(e) — the Act's narrow list of payments that may be left out of the regular rate — supplement that hourly figure, the true regular rate becomes everything the employee actually earned divided by the hours actually worked that week — and overtime figured on the low hourly rate alone falls short of what the Act requires.

One long-standing scheme, known as the split-day or “Poxon” plan, tries to get around this by dividing the ordinary workday itself into a low-paid “straight time” portion and a higher-paid “overtime” portion — for example, a low rate for the first four hours of an eight-hour day and one and one-half times that rate for the last four, arranged so the day's total lands exactly where a normal hourly rate would have put it. Because these “overtime” hours are not actually hours beyond the regular workday, and the labeled “straight time” rate is artificially low — not the employee's true straight-time rate — the split is fictitious rather than real. The Supreme Court settled the point decades ago: the employee's regular rate is still total weekly pay divided by total hours worked, and once the applicable maximum hours standard is exceeded, additional overtime is owed on that real regular rate no matter how the day was carved up on paper.

The same logic defeats schemes that relabel part of an employee's ordinary wages as a “bonus.” A true bonus is extra pay for extra effort, loyal service, or a gift — not a portion of wages the employee was already entitled to under the pay arrangement. An employer who guarantees $300 a week regardless of hours, then arbitrarily breaks that sum into an hourly wage plus a “bonus” that shrinks as hours climb, has not created a bonus at all. Because the employee is still guaranteed the same fixed sum, none of it is a true bonus, and the regular rate is the full $300 divided by whatever hours were actually worked that week. The trick can even be dressed up as a percentage: a “bonus” calculated as a percentage of earnings that shrinks in dollar amount as hours climb — so it always brings the total back to the same flat weekly figure — is not tied to hours worked in any meaningful sense. It is an artificially low hourly rate wearing a different label, and it draws the same result as every other version of this scheme.