dissenting:
We must decide whether the Postal Service’s method for computing employees’ overtime pays Postal Service employees “no less than one and one-half times the regular rate,” 29 U.S.C. § 207(a)(1) (1989), for hours worked over forty hours per workweek. See also 29 C.F.R. § 788.107 (1990). We are required to approve unless the method used is “plainly erroneous or inconsistent with the language of the [applicable statutes] and regulation[s].” Stone Forest Indus. v. Robertson, 936 F.2d 1072, 1074 (9th Cir.1991). The Postal Service acted in good faith as the majority holds, but I would not reach that issue because the Postal Service’s method for computing overtime is not plainly erroneous.
As the majority explains, if an employee works fifty hours in a given workweek and receives a basic rate of ten dollars ($10) per hour and a TCOLA payment of one hundred dollars ($100), then the employee’s regular rate is twelve dollars ($12) per hour. See supra at 592. In such a case, the TCOLA payment adds two dollars ($2) per hour to the regular rate because it is “spread over a 50-hour week.” Id. Thus, according to McQuigg, the employee should receive no less than one hundred and eighty dollars ($180) (10 X IV2 X $12/hour) for the ten hours of overtime. McQuigg argues, however, that the Postal Service’s formula pays only one hundred and sixty dollars ($160) ((10 X $10/hour) + (10 x % X $12/hour)) for these hours. This simply is not true.
Specifically, the Postal Service pays the employee a total of one hundred and eighty dollars ($180) for the ten hours of overtime by allocating twenty dollars ($20) of the TCOLA payment to those hours. In other words, because overtime hours constitute twenty percent (10 hours/50 hours) of the employee’s total hours worked, twenty dollars ($20) (20% X $100) of the TCOLA payment can be allocated to overtime. The prorated TCOLA is two dollars ($2) per hour. Eighty dollars ($80) (40 hours X $2/ hour) of the TCOLA payment compensates the employee for the basic workweek, and twenty dollars ($20) (10 hours X $2/hour) of the TCOLA payment compensates the employee for the ten hours of overtime. The employee thus receives no less than one and one-half times the regular rate for hours worked over forty hours per workweek. Section 207(a)(1) is therefore satisfied.
The same is true of an employee who works sixty hours in a given workweek. The employee’s regular rate is eleven dollars and sixty-seven cents ($11.67) per hour (($600 + $100)/60 hours). See supra at 592-93. Thus, the employee should receive three hundred and fifty dollars ($350) (20 hours X IV2 X $11.67) for the twenty hours of overtime. The Postal Service begins by paying the employee two hundred dollars ($200) (20 hours X $10/hour). Because overtime hours now constitute thirty-three percent (20 hours/60 hours) of the employee’s total hours worked, the Postal Service next allocates thirty-three dollars ($33) (33% X $100) of the TCOLA payment to overtime. The Postal Service then pays the employee an additional one hundred *601and seventeen dollars ($117) (20 x lk x $11.67). In sum, the employee receives three hundred and fifty dollars ($350) ($200 + $33 + $117), and section 207(a)(1) again is satisfied.
The majority puts the question: Do the applicable statutes and regulations allow the Postal Service to allocate the TCOLA payment over all hours worked? See id. at 596. More properly stated, the question is: Is allocating the TCOLA payment over all hours worked plainly erroneous or inconsistent with the language of the applicable statutes and regulations?
The majority argues persuasively that prorating the TCOLA violates Congress’ policy of "equal pay for equal work,” see 5 U.S.C. § 5301 (1991), because an employee who works forty hours receives more for those forty hours than an employee who works sixty hours (even though the employee who works forty hours receives less overall). See supra at 597. When Congress enacted section 5301, however, it was aware that this “anomaly” exists whenever employees receive a salary or fixed bonus and work a different number of hours. Thus, Congress’ policy can be interpreted as requiring only that employees who work equal hours receive equal compensation. The Postal Service’s method for computing employees’ overtime compensation satisfies this requirement. If we were writing on a clean slate, I might adopt the view of the majority. But, the question is whether the plan adopted by the Postal Service is plainly erroneous or inconsistent with the language of the statute. Since it is not, we should not strain to find it so because we believe another plan to be better. That is not the function of appellate review.
Moreover, the Postal Service’s method for computing employees’ overtime compensation is supported by the Department of Labor, in general, and the Administrator of the Wage and Hour Division, in particular. According to 29 C.F.R. § 788.110(b) (1990):
Hourly rate and bonus. If [an] employee [who works forty-six hours per week and has a base salary of $6 per hour] receives, in addition to his earnings at an hourly rate, a production bonus of $9.20, the regular hourly rate of pay is $6.20 an hour (46 hours at $6 yields $276; the addition of the $9.20 bonus makes a total of $285.20; this total divided by 46 hours yields a [regular] rate of $6.20). The employee is then entitled to be paid a total wage of $303.80 for 46 hours (46 hours at $6.20 plus 6 hours at $3.10_)
After considering both the Postal Service’s and McQuigg’s methods for computing employees’ overtime compensation, the Administrator of the Wage and Hour Division concluded that the Postal Service “is computing overtime compensation in accordance with the provisions of the [Fair Labor Standards Act].” Letter from William M. Otter, Administrator, U.S. Dept, of Labor, Wage and Hour Div., to Bruce H. Simon, Attorney for Nat’l Ass’n of Letter Carriers 3 (May 13, 1983).
Although the TCOLA payment is computed like an hourly wage, nothing in the applicable statutes and regulations prohibits the Postal Service from subsequently treating the payment like a salary or fixed bonus. These provisions allow the Postal Service to spread TCOLA payments “more and more thinly as the employee works more and more overtime,” supra at 592, when it computes an employee’s regular rate. Similarly, the Postal Service may do likewise when it pays the employee for hours worked over forty hours per workweek. The Postal Service’s interpretation of these provisions is not plainly erroneous. The majority decision amounts to unjustified interference with the day-to-day operations of the Postal Service. I would reverse.