The exception to the requirements of section 7(a) provided by
section 7(f) of the Act is designed to provide a means whereby the
employer of an employee whose duties necessitate irregular hours of work
and whose total wages if computed solely on an hourly rate basis would
of necessity vary widely from week to week, may guarantee the payment,
week-in, week-out, of at least a fixed amount based on his regular
hourly rate. Section 7(f) was proposed and enacted in 1949 with the
stated purpose of giving express statutory validity, subject to
prescribed limitations, to a judicial ``gloss on the Act'' by which an
exception to the usual rule as to the actual regular rate had been
recognized by a closely divided Supreme Court as permissible with
respect to employment in such situations under so-called ``Belo''
contracts. See McComb v. Utica Knitting Co., 164 F. 2d 670, rehearing
denied 164 F. 2d 678 (C.A. 2); Walling v. A. H. Belo Co., 316 U.S. 624;
Walling v. Halliburton Oil Well Cementing Co., 331 U.S. 17; 95 Cong.
Rec. 11893, 12365, 14938, A2396, A5233, A5476. Such a contract affords
to the employee the security of a regular weekly income and benefits the
employer by enabling him to anticipate and control in advance at least
some part of his labor costs. A guaranteed wage plan also provides a
means of limiting overtime computation costs so that wide leeway is
provided for working employees overtime without increasing the cost to
the employer, which he would otherwise incur under the Act for working
employees in excess of the statutory maximum hours standard. Recognizing
both the inherent advantages and disadvantages of guaranteed wage plans,
when viewed in this light, Congress sought to strike a balance between
them which would, on the one hand, provide a feasible method of
guaranteeing pay to employees who needed this protection without, on the
other hand, nullifying the overtime requirements of the Act. The
provisions of section 7(f) set forth the conditions under which, in the
view of Congress, this may be done. Plans which do not meet these
conditions were not thought to provide sufficient advantage to the
employee to justify Congress in relieving employers of the overtime
liability section 7(a).
