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- Code of Federal Regulations
- 2023 Edition
- Title 29. Labor
- Subtitle B. Regulations Relating to Labor
- Chapter V. Wage and Hour Division, Department of Labor
- Subchapter B. Statements of General Policy Or Interpretation Not Directly Related to Regulations
- Part 778. Overtime Compensation
- Subpart E. Exceptions From the Regular Rate Principles
- Guaranteed Compensation Which Includes Overtime Pay
29 C.F.R. § 778.412 Relationship Between Amount Guaranteed and Range of Hours Employee May Be Expected to Work
Library | Code of Federal Regulations |
Edition | 2023 Edition |
Currency | Current through September 30, 2023 |
While the guaranteed pay may not cover more than 60 hours, the contract may guarantee pay for a lesser number of hours. In order for a contract to qualify as a bona fide contract for an employee whose duties necessitate irregular hours of work, the number of hours for which pay is guaranteed must bear a reasonable relation to the number of hours the employee may be expected to work. A guaranty of pay for 60 hours to an employee whose duties necessitate irregular hours of work which can reasonably be expected to range no higher than 50 hours would not qualify as a bona fide contract under this section. The rate specified in such a contract would be wholly fictitious and therefore would not be a "regular rate" as discussed above. When the parties enter into a guaranteed pay contract, therefore, they should determine, as far as possible, the range of hours the employee is likely to work. In deciding the amount of the guaranty they should not choose a guaranty of pay to cover the maximum number of hours which the employee will be likely to work at any time but should rather select a figure low enough so that it may reasonably be expected that the rate will be operative in a significant number of workweeks. In both
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