How does FLSA 778.213 profit-sharing pay work?

Section 7(e)(3)(b) and 29 CFR 778.213 exclude sums paid under a bona fide profit-sharing plan or trust or a bona fide thrift or savings plan that meets Part 549 or Part 547. Those sums are not in the regular rate and may not be credited toward overtime. Ordinary after-40 half-time still applies to hours worked.

Classic $20 × five 10h + $100 qualifying profit-share?

FLSA after-40 pay $1,100 + excluded $100 share = $1,200. Ordinary /overtime/ is $1,100. Treating the same $100 as a flat nondiscretionary under 778.209 totals $1,210. A 778.210 10% plan on the same punches totals $1,210. California Alvarado on the same $100 totals $1,237.50.

How is 778.213 different from 778.210 and 778.209?

778.210 applies the same percent to ST and OT earnings so the bonus already carries its overtime — no recomputation, and the percent dollars are paid as part of earnings. 778.209 adds a flat nondiscretionary into the regular rate and pays extra half-time on the inflated RR. 778.213 excludes a qualifying profit-sharing / thrift payment from the RR entirely and forbids crediting it toward OT.

What if the plan is not bona fide?

If the plan fails Part 549 / 547 or is used as a device to evade overtime, treat the payment as ordinary nondiscretionary under 778.209 and recompute the regular rate. Classic same punches → $1,210.

Five 8h + $100 with no overtime week?

Straight $800 + excluded $100 = $900 versus /overtime/ $800. There is no overtime premium, but the qualifying share is still paid on top and stays out of any RR computation.

FLSA 778.213 Profit-Sharing / Thrift Plans — Excluded from Regular Rate

FLSA 778.213 profit-sharing and thrift plans — excluded from the regular rate

29 U.S.C. § 207(e)(3)(b) / 29 CFR § 778.213: sums paid under a bona fide profit-sharing plan (Part 549) or thrift / savings plan (Part 547) are excluded from the regular rate and may not be credited toward FLSA overtime. Classic $20 × five 10h + $100 qualifying → $1,200 vs /overtime/ $1,100 vs 778.209 same $ $1,210 vs 778.210 10% $1,210 vs Alvarado $100 $1,237.50.

How 778.213 pays

Exclusion, not recomputation. Section 7(e)(3)(b) and 778.213 keep qualifying profit-sharing / thrift / savings payments out of the regular rate. They are paid in addition to wages, but they do not inflate overtime and they cannot be credited as overtime premiums. Hours worked still earn ordinary extra half-time after 40.

Part 549 / 547 gate. Profit-sharing must meet 29 CFR Part 549 (written plan, paid from profits, definite formula, etc.). Thrift / savings plans must meet Part 547. Uncheck the bona fide toggle — or check evasion — to force the 778.209 inclusion path (classic same $ → $1,210).

Not 778.210. A percentage-of-total-earnings bonus under 778.210 is a different animal: the percent already carries OT on the bonus and skips 778.209 recomputation, but those dollars are earnings under the plan, not an excluded profit share. Classic 10% on the same 50h week is $1,210, not $1,200.

Classic · $20 · five 10h · $100 qualifying → $1,200 (vs /overtime/ $1,100 · 778.209 same $ $1,210 · 778.210 10% $1,210 · Alvarado $100 $1,237.50).
Contrast include in RR · same $100 → $1,210.
Not bona fide · same $100 → $1,210.
Five 8h · $100 qualifying (no OT week) → $900 (vs /overtime/ $800).
$0 share → $1,100 (ordinary after-40).
CFR-scale $12 · 50h · $60 share → $720 (vs 778.209 same $ $726).

Sources

29 CFR § 778.213 — Profit-sharing, thrift, and savings plans (Cornell LII, HTTP 200)
29 CFR § 778.213 — eCFR current (HTTP 200)
29 U.S.C. § 207(e)(3)(b) — statutory exclusion (HTTP 200)
29 CFR Part 549 — Profit-sharing plan requirements (HTTP 200)
29 CFR § 547.1 — Thrift / savings plan essentials (HTTP 200)
WHD Fact Sheet #56A — Regular rate under the FLSA (HTTP 200)
/flsa-778-210-percentage-bonus/ — 778.210 % of total cousin
/flsa-regular-rate/ — 778.209 flat nondiscretionary cousin

FAQ

Classic five 10h + $100 qualifying?

$1,100 FLSA after-40 + $100 excluded share → $1,200 vs /overtime/ $1,100 vs 778.209 $1,210 vs 778.210 10% $1,210 vs Alvarado $1,237.50.

Same as /flsa-778-210-percentage-bonus/?

No. 778.210 is a percent of ST+OT earnings that already includes OT on the bonus. 778.213 excludes a qualifying profit-sharing / thrift payment from the RR entirely.

Same as /flsa-regular-rate/ bonus?

No. Regular-rate pages include a flat nondiscretionary in RR and recompute. 778.213 keeps a qualifying plan payment out of RR.

Not bona fide / evasion?

Uncheck the Part 549/547 toggle or check evasion — force 778.209 inclusion (classic same punches → $1,210).

No overtime in the week?

Five 8h + $100 qualifying → $900 vs /overtime/ $800. The share is still paid on top and stays excluded.