Section 7(f) of the FLSA allows for the payment of a constant amount for different overtime if: a payment plan meets the Requirement of the Fair Labor Standards Act (FLSA) that overtime be calculated on the basis of each work week if it is calculated by the payment of a constant weekly wage, on the basis of a normal week of 40 hours plus 10 hours of weekly overtime, regardless of the time actually worked up to the guarantee of 50 hours. A constant weekly wage, based on a fixed amount of overtime, even if irregular hours are worked, may be paid, under certain conditions, in accordance with Article 7 (f) of the FLSA and the accompanying rules. 29 CFR § 778.404. The authorized waiver is known as the “belo-treaty,” named after the U.S. Supreme Court case, which authorized its use. Walling v.A.H. Belo Co., 316 US 624 (1942). Another option is a Belo contract, named after the Supreme Court decision authorizing FLSA for the first time (Walling v.A.A. Belo Co., 316 U.S. 624 (1942)).
Under a belo contract, the employer may pay a non-exempt worker a fixed weekly wage covering all hours worked by the employee up to an agreed amount, as long as the amount does not exceed 60 hours. For example, if the parties agree that a weekly wage of $500 compensates the employee up to 50 hours per week, the employer owes the employee only $500 and does not have to pay overtime pay until the employee`s hours exceed 50 hours. It is only when the worker works more than the agreed number of hours that he owes something that goes beyond the agreed wage. Of course, the Belo contract could significantly reduce overtime costs, but it is only available if all these requirements are met: · The employer must guarantee the payment of a certain number of overtime hours exceeding 40 hours at a rate equal to or greater than one and a half times the standard rate. The essence of a Belo contract is that it allows employers to pay a constant salary, which includes precisely time and predetermined overtime pay, regardless of the number of hours worked this week. The Belo Plan is named after the Supreme Court case on which it is based, Walling v.A.H. Belo Corporation. Given the strict application of the requirements to qualify for the exception, the best practice is to make the terms of the Belo contract explicit and written for each employee.
Courts require an employer to strictly adhere to registration requirements in order to maintain a Belo plan. For example, the hourly wage must have an “appropriate” response to the weekly guarantee, so that the hourly wage indicated is proportional to what employees actually receive and not “fictitious”. To complete the relationship test, the employer must keep accurate records of time completed and pay overtime when an employee exceeds the number of hours covered by the contract. McComb v. Sterling Ice Co., 165 F2d 265 (10th Cir 1947); Tobin v. Morristown Poultry Co., 10 Wage and Hour Cases (ED Tenn 1952). Neither step-by-step pay nor quarterly bonuses were included in the calculation of overtime, but the defendants stated that they paid overtime for more than sixty hours and not forty hours worked. Thus, the applicants sought a partial summary judgment in respect of the defendants who had not paid overtime as requested by the FLSA. In the hypothesis, Tom`s salary for his hours, which worked between 40 and 45 during a work week, is exactly the same, whether he works one or five overtime hours.
Therefore, neither the U.S. Department of Labor nor a court would likely consider any of Tom`s $760 salary as an overtime bonus under the FLSA. The only way to pay a fixed amount including the overtime bonus for a different number of overtime hours is through the use of a so-called “Belo” contract. This term comes from the 1942 U.S. Supreme Court decision in Walling v. == Belo Corporation, which approved such an agreement. However, Congress subsequently amended the FLSA to limit the conditions under which this can occur. For workers who work irregularly, the use of a belo contract allows the employer to pay a fixed wage every week, with the exception of those where the number of hours is exceptionally high. .