An employer's contribution to a profit-sharing, thrift, or savings plan, or to a bona fide (genuine, not a sham arrangement) benefit plan for old age, retirement, life, accident, or health insurance, does not follow the bonus rules covered in Chapter 7. The Act carves these out separately: section 7(e)(3)(b) excludes sums paid pursuant to a bona fide profit-sharing plan or trust, or a bona fide thrift or savings plan, that meets requirements the Secretary of Labor set out in regulations — 29 CFR (Code of Federal Regulations) parts 547 and 549, the rules profit-sharing and thrift-or-savings plans must satisfy to qualify for exclusion; section 7(e)(4) excludes contributions irrevocably made by the employer to a trustee or third person pursuant to a bona fide plan providing old age, retirement, life, accident, or health insurance or similar benefits. Both exclusions carry a limit shared with the discretionary bonuses excluded under section 7(e)(3)(a) and covered in Chapter 7: the excluded sums can never be credited toward the overtime compensation the Act requires, no matter how the plan is structured.

For a benefit-plan contribution to qualify under section 7(e)(4), five conditions all have to hold. (1) The contribution must be made under a specific plan or program the employer adopted, or agreed to by collective bargaining, and communicated to employees. (2) The plan's primary purpose must be to systematically provide benefits for events like death, disability, advanced age, retirement, illness, medical expenses, hospitalization, accident, unemployment, or legal services, or other events that could cause significant future financial hardship. (3) The plan must fix the benefit or the contribution to a definite formula, satisfied by any of three alternatives: (a) the benefits are specified or actuarially determinable (fixed by calculation of expected future benefit costs, rather than by a contribution formula); (b) there is a definite formula for both the employer's contribution and each employee's benefit; or (c) a contribution formula is paired with a benefit-determination method consistent with the plan's purpose. As an elaboration on the two formula-based alternatives above — (b) and (c), not the actuarially-determinable-benefit alternative in (a), which involves no employer contribution formula at all — a formula that sets a specific, substantial minimum contribution and lets the employer add more within a reasonable range still qualifies — a minimum of 10 percent of profits with discretion up to 20 percent, for example, or 5 percent of compensation up to 15 percent — but a formula with an insignificant minimum and an open-ended maximum does not meaningfully measure anything, and fails the test. (4) The employer's contribution must be paid irrevocably to a trustee or third person under a funded arrangement. (5) The plan must not let an employee assign the benefit or take cash instead of it, apart from narrow exceptions detailed below.

Conditions four and five protect the money once it is committed, and both carry detail worth spelling out. The employer's contribution must be paid irrevocably (permanently, with no right of return) to a trustee or third person under an insurance agreement, trust, or other funded arrangement, with the trustee bound by the usual fiduciary duties (legal responsibilities to manage the funds for employees' benefit, not the employer's); the employer may never recapture the funds or divert them to its own use, though a refund of a genuine overpayment (one resulting from error) made to cover an as-yet-uncertain cost (a cost whose exact required contribution under the plan is not yet known at the time of payment) is not treated as recapture. And the plan cannot let an employee transfer the benefit to someone else or take cash instead of it, apart from narrow, plan-specified exceptions such as a cash-out on severance for reasons other than retirement, disability, or death, or on the plan's own termination. A plan is presumed to meet four of the five conditions — adoption-and-communication, primary-purpose, irrevocability, and no-cash-option (conditions one, two, four, and five) — if it follows one of three paths: a plan or trust the Internal Revenue Service has actually approved under section 401(a), 403(a), or 403(b); a written plan document the plan sponsor reasonably believes satisfies section 401(a), 403(a), 403(b), 408(k), or 408(p), without actual IRS approval being required; or, for a government employer, a written plan the employer reasonably believes satisfies section 457(b). These are Internal Revenue Code sections identifying particular types of employer-sponsored retirement and benefit plans; an employer unsure whether its own plan fits one of these categories can instead check compliance directly against the five conditions listed above. That presumption does not reach condition three: even a plan that is IRS-approved or reasonably relied upon for these Internal Revenue Code sections must still independently establish that its formula satisfies one of the three definite-formula alternatives above. If a contribution fails these tests, it is not excluded at all — it is treated exactly like the bonus payments covered in Chapter 7, apportioned back over the workweeks it was earned, with overtime recomputed on the resulting higher regular rate for each workweek involved.