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May 13, 2009   
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CFR  

Code of Federal Regulations Pertaining to U.S. Department of Labor

Title 29  

Labor

 

Chapter V  

Wage and Hour Division, Department of Labor

 

 

Part 778  

Overtime Compensation

 

 

 

Subpart E  

Exceptions From the Regular Rate Principles


29 CFR 778.407 - The nature of the section 7(f) contract.

  • Section Number: 778.407
  • Section Name: The nature of the section 7(f) contract.

    Payment must be made ``pursuant to a bona fide individual contract 
or pursuant to an agreement made as a result of collective bargaining by 
representatives of employees.'' It cannot be a onesided affair 
determinable only by examination of the employer's books. The employee 
must not only be aware of but must have agreed to the method of 
compensation in advance of performing the work. Collective bargaining 
agreements in general are formal agreements which have been reduced to 
writing, but an individual employment contract may be either oral or 
written. While there is no requirement in section 7(f) that the 
agreement or contract be in writing, it is certainly desirable to reduce 
the agreement to writing, since a contract of this character is rather 
complicated and proof both of its existence and of its compliance with 
the various requirements of the section may be difficult if it is not in 
written form. Furthermore, the contract must be ``bona fide.'' This 
implies that both the making of the contract and the settlement of its 
terms were done in good faith.
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