I am trying to clear up this issue. We are the prime contractor and have several companies that provide labor for us as a subcontractor. I know that when the subcontractor is paying their employees, they are required to include holiday hours in the base for computing their OT rate. My question is are we required to include holiday hours in what the subcontractor bills us, or do they have to work 40 billable hours before we start paying them their OT rate? As an example, in a week with a holiday, if a subcontractor's employee works 35 hours, would we be responsible for paying the subcontractor 32 hours at the straight time rate and 3 hours at the overtime rate, or since they only have 35 billable hours, would we pay the subcontactor 35 hours at the straight time rate? Thanks so much!

On 4/21/2025 at 1:08 PM, Keith Faulconer said:

I know that when the subcontractor is paying their employees, they are required to include holiday hours in the base for computing their OT rate.

How do you know this? What regulation or contract clause requires this? Please be specific.

If what you are saying is that "A contractor must include paid time off hours in its calculations of hours worked in order to determine whether or not OT has been worked" then that seems to be a different thing than what you posted.

Regardless, OT laws vary state by state. In what state is the work being performed? What does that state's labor laws require regarding your question?