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Belo Plan Contracts

One of the requirements in the FLSA to prove that an employee is under salary and not an hourly employee for the purposes of paying overtime is the concept of a “constant weekly wage,” where the employee gets a set salary for set hours worked per week. Any variance on that theme can result in the employee collecting overtime.

But there are some jobs that just don’t fit that description. There is an exception to that “constant wage” rule, but it is very narrow and very specific and needs to be in writing. It is called a “Belo Plan,” named after the Supreme Court case that allowed the exception, (Walling v. A.H. Belo Co., 316 U.S. 624 (1942)), and provides for a constant wage, even though overtime is actually worked.

The CFR lists a few jobs that fall under the category of having irregular hours, including “outside buyers, on-call servicemen, insurance adjusters, newspaper reporters and photographers, propmen, script girls and others engaged in similar work in the motion picture industry, firefighters, troubleshooters and the like.” [29 CFR 778.405].

But before an employer can tell you that you’re on a Belo Plan, and not collecting overtime compensation, there are a number of hoops that the employer needs to jump through.

An allowable Belo plan must be in writing, and must meet the following criteria, all of which are delineated in CFR 778 et. seq.:

  • The nature of the employment must necessitate irregular hours of work. As stated in the CFR, “the nature of the employee’s duties must be such that neither he nor his employer can either control or anticipate with any degree of certainty the number of hours he must work from week to week.”
  • There must be significant variations in weekly hours of work both above and below the maximum limit of 40 hours of work.
  • The regular rate of pay may not be less than the minimum hourly rate.
  • The employee’s regular rate of pay has to be specified, and can only include hours worked, and not any other form of compensation.
  • The employer must guarantee time and one-half the regular rate for hours worked over 40.
  • The maximum number of hours worked for the guaranteed compensation cannot be for more than 60 hours per week. After that, it is time and a half.

If you have any questions about this very complicated area, you should contact an employment law attorney.

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