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pdfSubtitle B—Regulations
Relating to Labor
(Continued)
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CHAPTER V—WAGE AND HOUR DIVISION,
DEPARTMENT OF LABOR
SUBCHAPTER A—REGULATIONS
Part
500
501
502
503
504
505
506
507
508
510
511
515
516
Page
Migrant and seasonal agricultural worker protection .......................................................................
Enforcement of contractual obligations for temporary alien agricultural workers admitted
under section 218 of the Immigration and Nationality Act ...............................................................
Enforcement of contractual obligations for temporary alien agricultural workers admitted
under section 218 of the Immigration and Nationality Act (suspended 6-29-2009) ..............................
Enforcement of obligations for temporary nonimmigrant non-agricultural workers described in
the Immigration and Nationality Act ..................
Attestations by facilities using nonimmigrant
aliens as registered nurses ...................................
Labor standards on projects or productions assisted by grants from the National Endowments
for the Arts and Humanities ................................
Attestations by employers using alien crewmembers for longshore activities in U.S. ports ....
Labor condition applications and requirements for
employers using nonimmigrants on H–1B specialty visas in specialty occupations and as fashion models ............................................................
Attestations filed by employers utilizing F–1 students for off-campus work ....................................
Implementation of the minimum wage provisions
of the 1989 amendments to the Fair Labor Standards Act in Puerto Rico ........................................
Wage order procedure for American Samoa ............
Utilization of State agencies for investigations and
inspections ...........................................................
Records to be kept by employers ............................
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53
68
84
107
107
112
112
112
112
134
141
143
29 CFR Ch. V (7–1–19 Edition)
Part
Page
519
520
521–524
525
527
528
530
531
536
541
547
548
549
550
551
552
553
570
575
578
579
580
Employment of full-time students at subminimum
wages ....................................................................
Employment under special certificate of messengers, learners (including student-learners),
and apprentices ....................................................
[Reserved]
Employment of workers with disabilities under
special certificates ...............................................
[Reserved]
Annulment or withdrawal of certificates for the
employment of student-learners, apprentices,
learners, messengers, handicapped persons, student-workers, and full-time students in agriculture or in retail or service establishments at
special minimum wage rates ................................
Employment of homeworkers in certain industries
Wage payments under the Fair Labor Standards
Act of 1938 ............................................................
Area of production ..................................................
Defining and delimiting the exemptions for executive, administrative, professional, computer and
outside sales employees .......................................
Requirements of a ‘‘Bona fide thrift or savings
plan’’ ....................................................................
Authorization of established basic rates for computing overtime pay .............................................
Requirements of a ‘‘bona fide profit-sharing plan
or trust’’ ...............................................................
Defining and delimiting the term ‘‘talent fees’’ ......
Local delivery drivers and helpers; wage payment
plans .....................................................................
Application of the Fair Labor Standards Act to domestic service ......................................................
Application of the Fair Labor Standards Act to
employees of State and local governments ..........
Child labor regulations, orders and statements of
interpretation ......................................................
Waiver of child labor provisions for agricultural
employment of 10 and 11 year old minors in hand
harvesting of short season crops ..........................
Minimum wage and overtime violations—civil
money penalties ...................................................
Child labor violations—civil money penalties ........
Civil money penalties—procedures for assessing
and contesting penalties ......................................
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167
180
190
192
205
217
218
245
246
261
263
264
268
274
297
349
355
356
361
Wage and Hour Division, Labor
Part
697
Page
Industries in American Samoa ................................
366
SUBCHAPTER B—STATEMENTS OF GENERAL POLICY OR
INTERPRETATION NOT DIRECTLY RELATED TO REGULATIONS
775
776
778
779
780
782
783
784
785
786
788
789
790
791
793
794
General ....................................................................
Interpretative bulletin on the general coverage of
the wage and hours provisions of the Fair Labor
Standards Act of 1938 ...........................................
Overtime compensation ..........................................
The Fair Labor Standards Act as applied to retailers of goods or services .........................................
Exemptions applicable to agriculture, processing
of agricultural commodities, and related subjects
under the Fair Labor Standards Act ....................
Exemption from maximum hours provisions for
certain employees of motor carriers ....................
Application of the Fair Labor Standards Act to
employees employed as seamen ...........................
Provisions of the Fair Labor Standards Act applicable to fishing and operations on aquatic products ......................................................................
Hours worked ..........................................................
Miscellaneous exemptions and exclusions from
coverage ...............................................................
Forestry or logging operations in which not more
than eight employees are employed .....................
General statement on the provisions of section
12(a) and section 15(a)(1) of the Fair Labor Standards Act of 1938, relating to written assurances ...
General statement as to the effect of the Portal-toPortal Act of 1947 on the Fair Labor Standards
Act of 1938 ............................................................
Joint employment relationship under Fair Labor
Standards Act of 1938 ...........................................
Exemption of certain radio and television station
employees from overtime pay requirements
under section 13(b)(9) of the Fair Labor Standards Act ................................................................
Partial overtime exemption for employees of
wholesale or bulk petroleum distributors under
section 7(b)(3) of the Fair Labor Standards Act ...
369
369
408
463
565
640
656
671
697
710
711
716
720
746
747
752
SUBCHAPTER C—OTHER LAWS
801
Application of the Employee Polygraph Protection
Act of 1988 ............................................................
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29 CFR Ch. V (7–1–19 Edition)
Part
Page
825
The Family and Medical Leave Act of 1993 .............
801
SUBCHAPTER D—GARNISHMENT OF EARNINGS
870
871–899
Restriction on garnishment ....................................
[Reserved]
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SUBCHAPTER A—REGULATIONS
500.53 Nontransfer of certificate.
500.54 Change of address.
500.55 Changes to or amendments of certificate authority.
500.56 Replacement of Certificate of Registration or Farm Labor Contractor Employee Certificate.
PART 500—MIGRANT AND SEASONAL AGRICULTURAL WORKER
PROTECTION
Subpart A—General Provisions
Sec.
500.0 Introduction.
500.1 Purpose and scope.
500.2 Compliance with State laws and regulations.
500.3 Effective date of the Act; transition
period; repeal of the Farm Labor Contractor Registration Act.
500.4 Effect of prior judgments and final orders obtained under the Farm Labor Contractor Registration Act.
500.5 Filing of applications, notices and documents.
500.6 Accuracy of information, statements
and data.
500.7 Investigation authority of the Secretary.
500.8 Prohibition on interference with Department of Labor officials.
500.9 Discrimination prohibited.
500.10 Waiver of rights prohibited.
500.20 Definitions.
ADDITIONAL OBLIGATIONS OF FARM LABOR
CONTRACTORS AND FARM LABOR CONTRACTOR EMPLOYEES
500.60 Farm labor contractors’ recruitment,
contractual and general obligations.
500.61 Farm Labor contractors must comply
with all worker protections and all other
statutory provisions.
500.62 Obligations of a person holding a
valid Farm Labor Contractor Employee
Certificate of Registration.
Subpart C—Worker Protections
GENERAL
500.70 Scope of worker protections.
500.71 Utilization of only registered farm
labor contractors.
500.72 Agreements with workers.
500.73 Required purchase of goods or services solely from any person prohibited.
APPLICABILITY OF THE ACT: EXEMPTIONS
500.30
RECRUITING, HIRING AND PROVIDING INFORMATION TO MIGRANT AGRICULTURAL WORKERS
Persons not subject to the Act.
Subpart B—Registration of Farm Labor
Contractors and Employees of Farm
Labor Contractors Engaged in Farm
Labor Contracting Activities
500.75
Disclosure of information.
HIRING AND PROVIDING INFORMATION TO
SEASONAL AGRICULTURAL WORKERS
500.76
REGISTRATION REQUIREMENTS: GENERAL
Disclosure of information.
EMPLOYMENT INFORMATION FURNISHED
500.40 Registration in general.
500.41 Farm labor contractor is responsible
for actions of his farm labor contractor
employee.
500.42 Certificate of Registration to be carried and exhibited.
500.43 Effect of failure to produce certificate.
500.77
500.78
Accuracy of information furnished.
Information in foreign language.
WAGES AND PAYROLL STANDARDS
500.80
500.81
Payroll records required.
Payment of wages when due.
Subpart D—Motor Vehicle Safety and Insurance for Transportation of Migrant
and Seasonal Agricultural Workers,
Housing Safety and Health for Migrant
Workers
APPLICATIONS AND RENEWAL OF FARM LABOR
CONTRACTOR AND FARM LABOR CONTRACTOR
EMPLOYEE CERTIFICATES
500.44 Form of application.
500.45 Contents of application.
500.46 Filing an application.
500.47 Place for filing application.
MOTOR VEHICLE SAFETY
500.100 Vehicle safety obligations.
500.101 Promulgation and adoption of vehicle standards.
500.102 Applicability of vehicle safety standards.
500.103 Activities not subject to vehicle
safety standards.
ACTION ON APPLICATION
500.48 Issuance of certificate.
500.50 Duration of certificate.
500.51 Refusal to issue or to renew, or suspension or revocation of certificate.
500.52 Right to hearing.
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Pt. 500
29 CFR Ch. V (7–1–19 Edition)
500.104 Department of Labor standards for
passenger automobiles and station wagons and transportation of seventy-five
miles or less.
500.105 DOT standards adopted by the Secretary.
500.160
500.161
500.162
Approved State plans.
Audits.
Reports.
500.170
Establishment of registry.
CENTRAL PUBLIC REGISTRY
INSURANCE
Subpart F—Administrative Proceedings
500.120 Insurance policy or liability bond is
required for each vehicle used to transport any migrant or seasonal agricultural worker.
500.121 Coverage and level of insurance required.
500.122 Adjustments in insurance requirements when workers’ compensation coverage is provided under State law.
500.123 Property damage insurance required.
500.124 Liability bond in lieu of insurance
policy.
500.125 Qualifications and eligibility of insurance carrier or surety.
500.126 Duration of insurance or liability
bond.
500.127 Limitations on cancellation of insurance or liability bond of registered farm
labor contractors.
500.128 Cancellation of insurance policy or
liability bond not relief from insurance
requirements.
GENERAL
500.200 Establishment of procedures
rules of practice.
500.201 Applicability of procedures
rules.
PROCEDURES RELATING TO HEARING
PROCEDURES RELATING TO SUBSTITUTED
SERVICE
500.215 Change of address.
500.216 Substituted service.
500.217 Responsibility of Secretary for service.
RULES OF PRACTICE
500.219 General.
500.220 Service of determinations and computation of time.
500.221 Commencement of proceeding.
500.222 Designation of record.
500.223 Caption of proceeding.
HOUSING SAFETY AND HEALTH
REFERRAL FOR HEARING
500.224 Referral to Administrative Law
Judge.
500.225 Notice of docketing.
500.226 Service upon attorneys for the Department of Labor—number of copies.
Subpart E—Enforcement
PROCEDURES BEFORE ADMINISTRATIVE LAW
JUDGE
500.140 General.
500.141 Concurrent actions.
500.142 Representation of the Secretary.
500.143 Civil money penalty assessment.
500.144 Civil money penalties—payment and
collection.
500.145 Registration determinations.
500.146 Continuation of matters involving
violations of FLCRA.
500.147 Continuation of matters involving
violations of section 106 of MSPA.
500.231 Appearances; representation of the
Department of Labor.
500.232 Consent findings and order.
POST-HEARING PROCEDURES
500.262 Decision and order of Administrative
Law Judge.
MODIFICATION OR VACATION OF ORDER OF
ADMINISTRATIVE LAW JUDGE
AGREEMENTS WITH FEDERAL AND STATE
AGENCIES
500.263 Authority of the Secretary.
500.264 Procedures for initiating review.
500.265 Implementation by the Secretary.
500.266 Responsibility of the Office of Administrative Law Judges.
500.267 Filing and Service.
500.268 Final decision of the Secretary.
500.269 Stay pending decision of the Secretary.
500.155 Authority.
500.156 Scope of agreements with Federal
agencies.
500.157 Scope of agreements with State
agencies.
500.158 Functions delegatable.
500.159 Submission of plan.
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500.210 Written notice of determination required.
500.211 Contents of notice.
500.212 Request for hearing.
500.130 Application and scope of safety and
health requirement.
500.131 Exclusion from housing safety and
health requirement.
500.132 Applicable Federal standards: ETA
and OSHA housing standards.
500.133 Substantive Federal and State safety and health standards defined.
500.134 Compliance with State standards.
500.135 Certificate of housing inspection.
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Wage and Hour Division, Labor
§ 500.1
RECORD
500.270
500.271
necessary to carry out the Act consistent with the requirements of chapter 5 of title 5, United States Code.
(b) These regulations implement this
purpose and policy. The regulations
contained in this part are issued in accordance with section 511 of the Act
and establish the rules and regulations
necessary to carry out the Act.
(c) Any farm labor contractor, as defined in the Act, is required to obtain a
Certificate of Registration issued pursuant to the Act from the Department
of Labor or from a State agency authorized to issue such certificates on
behalf of the Department of Labor.
Such a farm labor contractor must ensure that any individual whom he employs to perform any farm labor contracting activities also obtains a Certificate of Registration. The farm labor
contractor is responsible, as well, for
any violation of the Act or these regulations by any such employee whether
or not the employee obtains a certificate. In addition to registering, farm
labor contractors must comply with all
other applicable provisions of the Act
when they recruit, solicit, hire, employ, furnish or transport or, in the
case of migrant agricultural workers,
provide housing.
(d) Agricultural employers and agricultural associations which are subject
to the Act must comply with all of the
worker protections which are applicable under the Act to migrant or seasonal agricultural workers whom they
recruit, solicit, hire, employ, furnish,
or transport or, in the case of migrant
agricultural workers, provide housing.
The obligations will vary, depending on
the types of activities affecting migrant or seasonal agricultural workers.
Agricultural employers and agricultural associations and their employees
need not obtain Certificates of Registration in order to engage in these
activities, even if the workers they obtain are utilized by other persons or on
the premises of another.
(e) The Act empowers the Secretary
of Labor to enforce the Act, conduct
investigations, issue subpenas and, in
the case of designated violations of the
Act, impose sanctions. As provided in
the Act, the Secretary is empowered,
among other things, to impose an assessment and to collect a civil money
Retention of official record.
Certification of official record.
AUTHORITY: Pub. L. 97–470, 96 Stat. 2583 (29
U.S.C. 1801–1872); Secretary’s Order No. 01–
2014 (Dec. 19, 2014), 79 FR 77527 (Dec. 24, 2014);
28 U.S.C. 2461 Note (Federal Civil Penalties
Inflation Adjustment Act of 1990); and Pub.
L. 114–74, 129 Stat 584.
SOURCE: 48 FR 36741, Aug. 12, 1983, unless
otherwise noted.
Subpart A—General Provisions
§ 500.0
Introduction.
(a) The Migrant and Seasonal Agricultural
Worker
Protection
Act
(MSPA), hereinafter referred to as
MSPA or the Act, repeals and replaces
the Farm Labor Contractor Registration Act of 1963, as amended, hereinafter referred to as FLCRA or the
Farm Labor Contractor Registration
Act. Prior judgments and final orders
obtained under FLCRA continue in effect as stated in § 500.4.
(b) These regulations include provisions necessitated by the Immigration
Reform and Control Act’s (IRCA)
amendment to the Immigration and
Nationality Act (INA). IRCA amended
MSPA to remove section 106 thereof
prohibiting the employment of illegal
aliens. Matters concerning certificate
actions or the assessment of civil
money penalties, for a violation of section 106 of MSPA which occurred prior
to June 1, 1987, continue through final
administrative determination as stated
in § 500.147.
[48 FR 36741, Aug. 12, 1983, as amended at 54
FR 13328, Mar. 31, 1989]
§ 500.1 Purpose and scope.
(a) Congress stated, in enacting the
Migrant and Seasonal Agricultural
Worker Protection Act that ‘‘[I]t is the
purpose of this Act to remove the restraints on commerce caused by activities detrimental to migrant and seasonal agricultural workers; to require
farm labor contractors to register
under this Act; and to assure necessary
protections for migrant and seasonal
agricultural workers, agricultural associations, and agricultural employers.’’ It authorized the Secretary to
issue such rules and regulations as are
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§ 500.1
29 CFR Ch. V (7–1–19 Edition)
penalty of not more than $2,505 for
each violation, to seek a temporary or
permanent restraining order in a U.S.
District Court, and to seek the imposition of criminal penalties on persons
who willfully and knowingly violate
the Act or any regulation under the
Act. In accordance with the Act and
with these regulations, the Secretary
may refuse to issue or to renew, or may
suspend or revoke a certificate of registration issued to a farm labor contractor or to a person who engages in
farm labor contracting as an employee
of a farm labor contractor.
(f) The facilities and services of the
U.S. Employment Service, including
State agencies, authorized by the Wagner-Peyser Act may be denied to any
person found by a final determination
by an appropriate enforcement agency
to have violated any employment-related laws including MSPA when notification of this final determination has
been provided to the Job Service by
that enforcement agency. See 20 CFR
658.501(a)(4). The facilities and services
of the U.S. Employment Service shall
be restored immediately upon compliance with 20 CFR 658.502(a)(4).
(g) Subparts A through E set forth
the substantive regulations relating to
farm labor contractors, agricultural
employers and agricultural associations. These subparts cover the applicability of the Act, registration requirements applicable to farm labor
contractors, the obligations of persons
who hold Certificates of Registration,
the worker protections which must be
complied with by all who are subject to
the Act, and the enforcement authority
of the Secretary.
(h) Subpart F sets forth the rules of
practice for administrative hearings
relating to actions involving Certificates of Registration. It also outlines
the procedure to be followed for filing a
challenge to a proposed administrative
action relating to violations and summarizes the methods provided for collection and recovery of a civil money
penalty.
(i)(1) The Act requires that farm
labor contractors obtain a certificate
of registration from the Department of
Labor prior to engaging in farm labor
contracting activities. The Act also requires registration by individuals who
will perform farm labor contracting activities for a farm labor contractor.
Form WH–510 and WH–512 are the applications used to obtain Farm Labor
Contractor and Farm Labor Contractor
Employee Certificates of Registration.
These forms have been approved by the
Office of Management and Budget
(OMB) under control numbers 1215–0038
(WH–510) and 1215–0037 (WH–512). Forms
WH–514 and WH–514a are used when applying for transportation authorization
to furnish proof of compliance with vehicle safety requirements. These forms
have been jointly cleared by OMB
under control number 1215–0036.
(2) The Act further requires disclosure to migrant and seasonal agricultural workers regarding wages, hours
and other working conditions and
housing when provided to migrant
workers. The Department of Labor has
developed optional forms for use in
making the required disclosure. OMB
has approved the following: Worker Information (WH–516) 1215–0145 and Housing Terms and Conditions (WH–521)
1215–0146.
(3) The Act also requires that farm
labor contractors, agricultural employers and agricultural associations make,
keep, preserve and disclose certain
payroll records. Forms WH–501 and
WH–501a (Spanish version) are provided
to assist in carrying out this requirement. In addition, farm labor contractors who are applying for housing authorization must submit information
which identifies the housing to be used
along with proof of compliance with
housing safety and health requirements. There has been no form developed for this purpose. The Act further
requires disclosure by the insurance industry of certain information pertaining to cancellation of vehicle liability insurance policies. The requirements concerning recordkeeping, housing and insurance have been cleared by
OMB under control number 1215–0148.
(4) The Act provides that no farm
labor contractor shall knowingly employ or utilize the services of aliens not
lawfully admitted for permanent residence or who have not been authorized
by the Attorney General to accept employment. Form WH–509 is an optional
form which may be used to self-certify
that the applicant is a citizen of the
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Wage and Hour Division, Labor
§ 500.7
U.S. This form has been cleared by
OMB under control number 1215–0091.
(See § 500.59(a)(11)).
§ 500.5 Filing of applications, notices
and documents.
Unless otherwise prescribed herein,
all applications, notices and other documents required or permitted to be
filed by these regulations shall be filed
in accordance with the provisions of
subpart F of the regulations.
[48 FR 36741, Aug. 12, 1983; 48 FR 38380, Aug.
23, 1983, as amended at 81 FR 43450, July 1,
2016; 82 FR 5381, Jan. 18, 2017; 83 FR 12, Jan.
2, 2018; 84 FR 218, Jan. 23, 2019]
§ 500.2 Compliance with
and regulations.
State
laws
§ 500.6 Accuracy of information, statements and data.
Information, statements and data
submitted in compliance with provisions of the Act or these regulations
are subject to title 18, section 1001, of
the United States Code, which provides:
The Act and these regulations are intended to supplement State law; compliance with the Act or these regulations shall not excuse any
individual from compliance with appropriate State law or regulation.
Section 1001.
§ 500.3 Effective date of the Act; transition period; repeal of the Farm
Labor Contractor Registration Act.
Statements or entries generally.
Whoever, in any matter within the jurisdiction of any department or agency of the
United States knowingly and willfully falsifies, conceals or covers up by any trick,
scheme, or device a material fact, or makes
any false, fictitious or fraudulent statements
or representations, or makes or uses any
false writing or document knowing the same
to contain any false, fictitious or fraudulent
statement or entry, shall be fined not more
than $10,000 or imprisoned not more than five
years, or both.
(a) The provisions of the Migrant and
Seasonal Agricultural Worker Protection Act are effective on April 14, 1983,
and are codified in 29 U.S.C. 1801 et seq.
(b) The Migrant and Seasonal Agricultural Worker Protection Act repeals
the Farm Labor Contractor Registration Act of 1963, as amended, (7 U.S.C.
2041, et seq.), effective April 14, 1983.
(c) Violations of the Farm Labor
Contractor Registration Act occurring
prior to April 14, 1983, may be pursued
by the Department of Labor after that
date.
§ 500.7 Investigation authority of the
Secretary.
(a) The Secretary, either pursuant to
a complaint or otherwise, shall, as may
be appropriate, investigate and, in connection therewith, enter and inspect
such places (including housing and vehicles) and such records (and make
transcriptions thereof), question such
persons and gather such information as
he deems necessary to determine compliance with the Act, or these regulations.
(b) The Secretary may issue subpenas
requiring the attendance and testimony of witnesses or the production of
any evidence in connection with such
investigations. The Secretary may administer oaths, examine witnesses, and
receive evidence. For the purpose of
any hearing or investigation provided
for in the Act, the Authority contained
in sections 9 and 10 of the Federal
Trade Commission Act (15 U.S.C. 49,
50), relating to the attendance of witnesses and the production of books, papers, and documents, shall be available
to the Secretary. The Secretary shall
§ 500.4 Effect of prior judgments and
final orders obtained under the
Farm Labor Contractor Registration Act.
The Secretary may refuse to issue or
to renew, or may suspend or revoke, a
Certificate of Registration under the
Act, if the applicant or holder has
failed to pay any court judgment obtained by the Secretary or any other
person under the Farm Labor Contractor Registration Act, or has failed
to comply with any final order issued
by the Secretary under the Farm Labor
Contractor Registration Act. The Secretary may deny a Certificate of Registration under the Act to any farm
labor contractor who has a judgment
outstanding against him, or is subject
to a final order assessing a civil money
penalty which has not been paid.
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§ 500.8
29 CFR Ch. V (7–1–19 Edition)
(4) Exercised or asserted on behalf of
himself or others any right or protection afforded by the Act.
(b) A migrant or seasonal agricultural worker who believes, with just
cause, that he has been discriminated
against by any person in violation of
this section may, no later than 180 days
after such violation occurs, file a complaint with the Secretary alleging such
discrimination.
conduct investigations in a manner
which protects the confidentiality of
any complainant or other party who
provides information to the Secretary
in good faith.
(c) Any person may report a violation
of the Act or these regulations to the
Secretary by advising any local office
of the Employment Service of the various States, or any office of the Wage
and Hour Division, U.S. Department of
Labor, or any other authorized representative of the Administrator. The
office or person receiving such a report
shall refer it to the appropriate office
of the Wage and Hour Division, for the
region or area in which the reported
violation is alleged to have occurred.
(d) In case of disobedience to a subpena, the Secretary may invoke the aid
of a United States District Court which
is authorized to issue an order requiring the person to obey such subpena.
§ 500.10
Waiver of rights prohibited.
Any agreement by an employee purporting to waive or modify any rights
inuring to said person under the Act or
these regulations shall be void as contrary to public policy, except that a
waiver or modification of rights or obligations hereunder in favor of the Secretary shall be valid for purposes of enforcement of the provisions of the Act
or these regulations. This does not prevent agreements to settle private litigation.
[48 FR 36741, Aug. 12, 1983, as amended at 82
FR 2226, Jan. 9, 2017]
§ 500.8 Prohibition on interference
with Department of Labor officials.
It is a violation of section 512(c) of
the Act for any person to unlawfully
resist, oppose, impede, intimidate, or
interfere with any official of the Department of Labor assigned to perform
an investigation, inspection, or law enforcement function pursuant to the Act
during the performance of such
duties. (Other Federal statutes which
prohibit persons from interfering with
a Federal officer in the course of official duties are found at 18 U.S.C. 111
and 18 U.S.C. 1114.)
§ 500.20
Definitions.
For purposes of this part:
(a) Administrator means the Administrator of the Wage and Hour Division,
United States Department of Labor,
and such authorized representatives as
may be designated by the Administrator to perform any of the functions
of the Administrator under this part.
(b) Administrative Law Judge means a
person appointed as provided in title 5
U.S.C. and qualified to preside at hearings under 5 U.S.C. 557. Chief Administrative Law Judge means the Chief Administrative Law Judge, United States
Department of Labor, 800 K Street,
NW., Suite 400, Washington, DC 20001–
8002.
(c) Agricultural association means any
nonprofit or cooperative association of
farmers, growers, or ranchers, incorporated or qualified under applicable
State law, which recruits, solicits,
hires, employs, furnishes, or transports
any migrant or seasonal agricultural
worker.
(d) Agricultural employer means any
person who owns or operates a farm,
ranch, processing establishment, cannery, gin, packing shed or nursery, or
who produces or conditions seed, and
§ 500.9 Discrimination prohibited.
(a) It is a violation of the Act for any
person to intimidate, threaten, restrain, coerce, blacklist, discharge, or
in any manner discriminate against
any migrant or seasonal agricultural
worker because such worker has, with
just cause:
(1) Filed a complaint with reference
to the Act with the Secretary of Labor;
or
(2) Instituted or caused to be instituted any proceeding under or related
to the Act; or
(3) Testified or is about to testify in
any proceeding under or related to the
Act; or
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§ 500.20
who either recruits, solicits, hires, employs, furnishes, or transports any migrant or seasonal agricultural worker.
Produces seed means the planting, cultivation, growing and harvesting of
seeds of agricultural or horticultural
commodities. Conditions seed means the
in-plant work done after seed production including the drying and aerating
of seed.
(e) Agricultural employment means employment in any service or activity included within the provisions of section
3(f) of the Fair Labor Standards Act of
1938 (29 U.S.C. 203(f)), or section 3121(g)
of the Internal Revenue Code of 1954 (26
U.S.C. 3121(g)) and the handling, planting, drying, packing, packaging, processing, freezing, or grading prior to delivery for storage of any agricultural
or horticultural commodity in its unmanufactured state.
(f) Convicted means that a final judgment of guilty has been rendered by a
court of competent jurisdiction from
which no opportunity for appeal remains.
(g) Day-haul operation means the assembly of workers at a pick-up point
waiting to be hired and employed,
transportation of such workers to agricultural employment, and the return of
such workers to a drop-off point on the
same day. This term does not include
transportation provided by an employer for individuals who are already
employees at the time they are picked
up nor does it include carpooling arrangements by such employees which
are not specifically directed or requested by the employer, farm labor
contractor or agent thereof.
(h)(1) The term employ has the meaning given such term under section 3(g)
of the Fair Labor Standards Act of 1938
(29 U.S.C. 203(g)) for the purposes of implementing the requirements of that
Act. As so defined, employ includes to
suffer or permit to work.
(2) The term employer is given its
meaning as found in the Fair Labor
Standards Act. Employer under section
3(d) of that Act includes any person
acting directly or indirectly in the interest of an employer in relation to an
employee.
(3) The term employee is also given its
meaning as found in the Fair Labor
Standards Act. Employee under section
3(e) of that Act means any individual
employed by an employer.
(4) The definition of the term employ
may include consideration of whether
or not an independent contractor or employment relationship exists under the
Fair Labor Standards Act. Under
MSPA, questions will arise whether or
not a farm labor contractor engaged by
an agricultural employer/association is
a bona fide independent contractor or
an employee. Questions also arise
whether or not the worker is a bona
fide independent contractor or an employee of the farm labor contractor
and/or the agricultural employer/association. These questions should be resolved in accordance with the factors
set out below and the principles articulated by the federal courts in Rutherford Food Corp. v. McComb, 331 U.S. 722
(1947), Real v. Driscoll Strawberry Associates, Inc., 603 F.2d 748 (9th Cir. 1979),
Sec’y of Labor, U.S. Dept. of Labor v.
Lauritzen, 835 F.2d 1529 (7th Cir. 1987),
cert. denied, 488 U.S. 898 (1988); Beliz v.
McLeod, 765 F.2d 1317 (5th Cir. 1985), and
Castillo v. Givens, 704 F.2d 181 (5th Cir.),
cert. denied, 464 U.S. 850 (1983). If it is
determined that the farm labor contractor is an employee of the agricultural employer/association, the agricultural workers in the farm labor contractor’s crew who perform work for
the agricultural employer/association
are deemed to be employees of the agricultural employer/association and an
inquiry into joint employment is not
necessary or appropriate. In determining if the farm labor contractor or
worker is an employee or an independent contractor, the ultimate question is the economic reality of the relationship—whether there is economic
dependence upon the agricultural employer/association or farm labor contractor, as appropriate. Lauritzen at
1538; Beliz at 1329; Castillo at 192; Real at
756. This determination is based upon
an evaluation of all of the circumstances, including the following:
(i) The nature and degree of the putative employer’s control as to the manner in which the work is performed;
(ii) The putative employee’s opportunity for profit or loss depending upon
his/her managerial skill;
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§ 500.20
29 CFR Ch. V (7–1–19 Edition)
(iii) The putative employee’s investment in equipment or materials required for the task, or the putative employee’s employment of other workers;
(iv) Whether the services rendered by
the putative employee require special
skill;
(v) The degree of permanency and duration of the working relationship;
(vi) The extent to which the services
rendered by the putative employee are
an integral part of the putative employer’s business.
(5) The definition of the term employ
includes the joint employment principles
applicable under the Fair Labor Standards Act. The term joint employment
means a condition in which a single individual stands in the relation of an
employee to two or more persons at the
same time. A determination of whether
the employment is to be considered
joint employment depends upon all the
facts in the particular case. If the facts
establish that two or more persons are
completely disassociated with respect
to the employment of a particular employee, a joint employment situation
does not exist. When the putative employers share responsibility for activities set out in the following factors or
in other relevant facts, this is an indication that the putative employers are
not completely disassociated with respect to the employment and that the
agricultural worker may be economically dependent on both persons:
(i) If it is determined that a farm
labor contractor is an independent contractor, it still must be determined
whether or not the employees of the
farm labor contractor are also jointly
employed by the agricultural employer/association. Joint employment
under the Fair Labor Standards Act is
joint employment under the MSPA.
Such joint employment relationships,
which are common in agriculture, have
been addressed both in the legislative
history and by the courts.
(ii) The legislative history of the Act
(H. Rep. No. 97–885, 97th Cong., 2d Sess.,
1982) states that the legislative purpose
in enacting MSPA was ‘‘to reverse the
historical pattern of abuse and exploitation of migrant and seasonal farm
workers * * *,’’ which would only be
accomplished by ‘‘advanc[ing] * * * a
completely new approach’’ (Rept. at 3).
Congress’s incorporation of the FLSA
term employ was undertaken with the
deliberate intent of adopting the FLSA
joint employer doctrine as the ‘‘central
foundation’’ of MSPA and ‘‘the best
means by which to insure that the purposes of this MSPA would be fulfilled’’
(Rept. at 6). Further, Congress intended that the joint employer test
under MSPA be the formulation as set
forth in Hodgson v. Griffin & Brand of
McAllen, Inc. 471 F.2d 235 (5th Cir.), cert.
denied, 414 U.S. 819 (1973) (Rept. at 7). In
endorsing Griffin & Brand, Congress
stated that this formulation should be
controlling in situations ‘‘where an agricultural employer * * * asserts that
the agricultural workers in question
are the sole employees of an independent contractor/crewleader,’’ and
that the ‘‘decision makes clear that
even if a farm labor contractor is found
to be a bona fide independent contractor, * * * this status does not as a
matter of law negate the possibility
that an agricultural employer may be a
joint employer * * * of the harvest
workers’’ together with the farm labor
contractor. Further, regarding the joint
employer doctrine and the Griffin &
Brand formulation, Congress stated
that ‘‘the absence of evidence on any of
the criteria listed does not preclude a
finding that an agricultural association or agricultural employer was a
joint
employer
along
with
the
crewleader’’, and that ‘‘it is expected
that the special aspects of agricultural
employment be kept in mind’’ when applying the tests and criteria set forth
in the case law and legislative history
(Rept. at 8).
(iii) In determining whether or not
an employment relationship exists between the agricultural employer/association and the agricultural worker,
the ultimate question to be determined
is the economic reality—whether the
worker is so economically dependent
upon the agricultural employer/association as to be considered its employee.
(iv) The factors set forth in paragraphs (h)(5)(iv)(A) through (G) of this
section are analytical tools to be used
in determining the ultimate question
of economic dependency. The consideration of each factor, as well as the determination of the ultimate question of
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Wage and Hour Division, Labor
§ 500.20
economic dependency, is a qualitative
rather than quantitative analysis. The
factors are not to be applied as a
checklist. No one factor will be dispositive of the ultimate question; nor must
a majority or particular combination
of factors be found for an employment
relationship to exist. The analysis as
to the existence of an employment relationship is not a strict liability or per
se determination under which any agricultural employer/association would be
found to be an employer merely by retaining or benefiting from the services
of a farm labor contractor. The factors
set forth in paragraphs (h)(5)(iv)(A)
through (G) of this section are illustrative only and are not intended to be
exhaustive; other factors may be significant and, if so, should be considered, depending upon the specific circumstances of the relationship among
the parties. How the factors are
weighed depends upon all of the facts
and circumstances. Among the factors
to be considered in determining whether or not an employment relationship
exists are:
(A) Whether the agricultural employer/association has the power, either alone or through control of the
farm labor contractor to direct, control, or supervise the worker(s) or the
work performed (such control may be
either direct or indirect, taking into
account the nature of the work performed and a reasonable degree of contract performance oversight and coordination with third parties);
(B) Whether the agricultural employer/association has the power, either alone or in addition to another
employer, directly or indirectly, to
hire or fire, modify the employment
conditions, or determine the pay rates
or the methods of wage payment for
the worker(s);
(C) The degree of permanency and duration of the relationship of the parties, in the context of the agricultural
activity at issue;
(D) The extent to which the services
rendered by the worker(s) are repetitive, rote tasks requiring skills which
are acquired with relatively little
training;
(E) Whether the activities performed
by the worker(s) are an integral part of
the overall business operation of the
agricultural employer/association;
(F) Whether the work is performed on
the agricultural employer/association’s
premises, rather than on premises
owned or controlled by another business entity; and
(G) Whether the agricultural employer/association undertakes responsibilities in relation to the worker(s)
which are commonly performed by employers, such as preparing and/or making payroll records, preparing and/or
issuing pay checks, paying FICA taxes,
providing workers’ compensation insurance, providing field sanitation facilities, housing or transportation, or
providing tools and equipment or materials required for the job (taking into
account the amount of the investment).
(i) Farm labor contracting activity
means recruiting, soliciting, hiring,
employing, furnishing, or transporting
any migrant or seasonal agricultural
worker.
(j) Farm labor contractor means any
person—other than an agricultural employer, an agricultural association, or
an employee of an agricultural employer or agricultural association—
who, for any money or other valuable
consideration paid or promised to be
paid, performs any farm labor contracting activity.
(k) Farm Labor Contractor Certificate
of Registration or Certificate of Registration means the certificate issued by the
Administrator which permits a farm
labor contractor to engage in farm
labor contracting activities.
(l) Farm labor contractor employee who
is required to obtain a Certificate of
Registration as an employee of a farm
labor contractor means a person who
performs farm labor contracting activity solely on behalf of a farm labor contractor holding a valid Certificate of
Registration and is not an independent
farm labor contractor who would be required to register under the Act in his
own right.
(m) Farm Labor Contractor Employee
Certificate or Farm Labor Contractor Employee Certificate of Registration or Employee Certificate means the certificate
issued by the Administrator to an employee of a farm labor contractor authorizing the performance of farm
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29 CFR Ch. V (7–1–19 Edition)
labor contracting activities solely on
behalf of such farm labor contractor
and not as an independent farm labor
contractor who would be required to
register in his own right.
(n) Illegal alien means any person who
is not lawfully admitted for permanent
residence in the United States or who
has not been authorized by the Attorney General to accept employment in
the United States.
(o) Immediate family includes only:
(1) A spouse;
(2) Children, stepchildren, and foster
children;
(3) Parents, stepparents, and foster
parents; and
(4) Brothers and sisters.
(p) Migrant agricultural worker means
an individual who is employed in agricultural employment of a seasonal or
other temporary nature, and who is required to be absent overnight from his
permanent place of residence.
(1) Migrant agricultural worker does
not include:
(i) Any immediate family member of
an agricultural employer or a farm
labor contractor; or
(ii) Any temporary nonimmigrant
alien who is authorized to work in agricultural employment in the United
States
under
sections
101(a)(15)(H)(ii)(a) and 214(c) of the Immigration and Nationality Act.
(2) Permanent place of residence, with
respect to an individual, means a domicile or permanent home. Permanent
place of residence does not include seasonal or temporary housing such as a
labor camp. The term permanent place
of residence for any nonimmigrant alien
is that individual’s country of origin.
(q) Person means any individual,
partnership, association, joint stock
company, trust, cooperative, or corporation.
(r) Seasonal agricultural worker means
an individual who is employed in agricultural employment of a seasonal or
other temporary nature and is not required to be absent overnight from his
permanent place of residence:
(1) When employed on a farm or
ranch performing field work related to
planting, cultivating, or harvesting operations; or
(2) When employed in canning, packing, ginning, seed conditioning or re-
lated research, or processing operations, and transported, or caused to be
transported, to or from the place of
employment by means of a day-haul
operation.
(i) Seasonal agricultural worker does
not include:
(A) Any migrant agricultural worker;
(B) Any immediate family member of
an agricultural employer or a farm
labor contractor; or
(C) Any temporary nonimmigrant
alien who is authorized to work in agricultural employment in the United
States
under
sections
101(a)(15)(H)(ii)(a) and 214(c) of the Immigration and Nationality Act.
(ii) Field work related to planting, cultivating or harvesting operations includes
all farming operations on a farm or
ranch which are normally required to
plant, harvest or produce agricultural
or horticultural commodities, including the production of a commodity
which normally occurs in the fields of
a farm or ranch as opposed to those activities which generally occur in a
processing plant or packing shed. A
worker engaged in the placing of commodities in a container in the field and
on-field loading of trucks and similar
transports is included. Nursery, mushroom and similar workers engaged in
activities in connection with planting,
cultivating or harvesting operations
are intended to be covered. An individual operating a machine, such as a
picker, or tractor is not included when
performing such activity.
(s) On a seasonal or other temporary
basis means:
(1) Labor is performed on a seasonal
basis where, ordinarily, the employment pertains to or is of the kind exclusively performed at certain seasons
or periods of the year and which, from
its nature, may not be continuous or
carried on throughout the year. A
worker who moves from one seasonal
activity to another, while employed in
agriculture or performing agricultural
labor, is employed on a seasonal basis
even though he may continue to be employed during a major portion of the
year.
(2) A worker is employed on other
temporary basis where he is employed
for a limited time only or his performance is contemplated for a particular
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Wage and Hour Division, Labor
§ 500.30
piece of work, usually of short duration. Generally, employment, which is
contemplated to continue indefinitely,
is not temporary.
(3) On a seasonal or other temporary
basis does not include the employment
of any foreman or other supervisory
employee who is employed by a specific
agricultural employer or agricultural
association essentially on a year round
basis.
(4) On a seasonal or other temporary
basis does not include the employment
of any worker who is living at his permanent place of residence, when that
worker is employed by a specific agricultural employer or agricultural association on essentially a year round
basis to perform a variety of tasks for
his employer and is not primarily employed to do field work.
(t) Secretary means the Secretary of
Labor or the Secretary’s authorized
representative.
(u)(1) Solicitor of Labor means the Solicitor, United States Department of
Labor, and includes attorneys designated by the Solicitor to perform
functions of the Solicitor under these
regulations.
(2) Associate Solicitor for Fair Labor
Standards means the Associate Solicitor, who, among other duties, is in
charge of litigation for the Migrant
and Seasonal Agricultural Worker Protection Act (MSPA), Office of the Solicitor, U.S. Department of Labor,
Washington, DC 20210.
(3) Regional Solicitors means the attorneys in charge of the various regional offices of the Office of the Solicitor.
(v) State means any of the States of
the United States, the District of Columbia, the Virgin Islands, the Commonwealth of Puerto Rico, and Guam.
State agency means a State agency
vested with all powers necessary to cooperate with the U.S.
Department of Labor for purposes of
entering into agreements to carry out
the Act as provided in section 513
thereof.
(w) Temporary nonimmigrant alien
means a person who has a residence in
a foreign country which he does not intend to abandon and who comes temporarily to the United States, with ap-
proval of the Attorney General, to perform temporary service or labor.
(x) The Wagner-Peyser Act is the Act
of June 6, 1933 (48 Stat. 113; codified in
29 U.S.C. 49 et seq.), providing, inter
alia, for the establishment of the U.S.
Employment Service. Employment Service of the various States means a State
agency vested with all powers necessary to cooperate with the U.S. Employment Service under the WagnerPeyser Act.
(y) The Immigration and Nationality
Act (INA) as amended by the Immigration Reform and Control Act of 1986
(IRCA) to effectively control unauthorized immigration to the United States
and for other purposes, is set out in 8
U.S.C. 1101 et seq.
[48 FR 36741, Aug. 12, 1983; 48 FR 38374, Aug.
23, 1983, as amended at 54 FR 13329, Mar. 31,
1989; 56 FR 54708, Oct. 22, 1991; 62 FR 11747,
Mar. 12, 1997; 82 FR 2227, Jan. 9, 2017]
APPLICABILITY OF THE ACT: EXEMPTIONS
§ 500.30
Persons not subject to the Act.
(a) Family business exemption. Any individual who engages in a farm labor
contracting activity on behalf of a
farm, processing establishment, seed
conditioning establishment, cannery,
gin, packing shed, or nursery, which is
owned or operated exclusively by such
individual or an immediate family
member of such individual, if such activities are performed only for such operation and exclusively by such individual or an immediate family member, but without regard to whether
such individual has incorporated or
otherwise organized for business purposes.
(b) Small business exemption. Any person, other than a farm labor contractor, for whom the man-days exemption for agricultural labor provided
under section 13(a)(6)(A) of the Fair
Labor Standards Act of 1938 (29 U.S.C.
213(a)(6)(A)) is applicable. That exemption applies to an agricultural employer who did not, during any calendar quarter of the preceding calendar
year, use more man-days of agricultural labor than the limit specified
under that statute.
(1) Currently the limit for exemption
is 500 man-days.
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(2) A man-day means any day during
which an employee performs agricultural labor for not less than one (1)
hour. Agricultural labor performed by
an employer’s parent, spouse, child, or
other member of his immediate family,
i.e., step-children, foster children, stepparents and foster parents, brothers,
and sisters is not counted as man-days.
(3) The man-days of agricultural
labor rendered in a joint employment
relationship are counted toward the
man-days of such labor of each employer for purposes of the man-day test
of this exemption.
(c) Common carriers. Any common carrier which would be a farm labor contractor solely because the carrier is engaged in the farm labor contracting activity of transporting any migrant or
seasonal agricultural worker. A ‘‘common carrier’’ by motor vehicle is one
which holds itself out to the general
public to engage in transportation of
passengers for hire, whether over regular or irregular routes, and which
holds a valid certificate of authorization for such purposes from an appropriate local, State or Federal agency.
(d) Labor organizations. Any labor organization, as defined in section 2(5) of
the Labor Management Relations Act
(29 U.S.C. 152(5)) (without regard to the
exclusion of agricultural employees in
that Act) or as defined under applicable
State labor relations law.
(e) Nonprofit charitable organizations.
Any nonprofit charitable organization
or public or private nonprofit educational institution.
(f) Local short-term contracting activity. Any person who engages in any
farm labor contracting activity solely
within a twenty-five mile intrastate
radius of such person’s permanent
place of residence and for not more
than thirteen weeks per year.
(1) Twenty-five mile intrastate radius as
used in section 4(a)(3)(D) of the Act
means that engagement in a farm labor
contracting activity may not go beyond a twenty-five mile intrastate geographical radius. Once this limit is
transcended, the exemption no longer
applies and the person becomes subject
to the requirements of the Act. If, for
example, a person or his employee solicits workers from a distance greater
than twenty-five miles from his perma-
nent residence or from across a State
line, then the person has engaged in a
named activity outside of the permitted scope of the exemption, and is
subject to the requirements of the Act.
A person who uses lines of communication (such as U.S. Mail, telephone, or
advertising) to recruit, solicit, hire, or
furnish workers over a distance greater
than twenty-five miles from his permanent residence or from across a State
line for agricultural employment is
also engaged in a named activity beyond the specified limit of the exemption and is subject to the Act. In the
case of a corporation its permanent
place of residence for these purposes
shall be a single designated location.
(2) For not more than thirteen weeks
per year as used in section 4(a)(3)(D) of
the Act means that farm labor contracting activities may not be engaged
in for more than thirteen weeks in a
year. This does not mean, however,
that persons who engage in intrastate
and short-range farm labor contracting
activities are exempt for the first thirteen weeks of their farm labor contracting activities each year. The number of weeks of contracting activity
during the prior year is also a factor.
When the limit of weeks for the exemption is exceeded in a calendar year, the
person is subject immediately to the
Act and is also presumed subject to the
Act in the next calendar year, unless it
can be shown that the tests of section
4(a)(3)(D) are met.
(g) Custom combine. Any custom combine, hay harvesting, or sheep shearing
operation. Custom combine, hay harvesting, and sheep shearing operation
means the agricultural services and activities involved in combining grain,
harvesting hay and shearing sheep
which are provided to a farmer on a
contract basis by a person who provides the necessary equipment and
labor and who specializes on providing
such services and activities.
(h) Custom poultry operations. Any
custom poultry harvesting, breeding,
debeaking, desexing, or health service
operation, provided the employees of
the operation are not regularly required to be away from their permanent place of residence other than during their normal working hours.
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Wage and Hour Division, Labor
§ 500.41
(i) Seed production exemption. (1) Any
person whose principal occupation or
business is not agricultural employment, when supplying full-time students or other individuals whose principal occupation is not agricultural
employment to detassel, rogue, or otherwise engage in the production of seed
and to engage in related and incidental
agricultural employment, unless such
full-time students or other individuals
are required to be away from their permanent place of residence overnight or
there are individuals under eighteen
years of age who are providing transportation on behalf of such person.
(2) Any person to the extent he is
supplied with students or other individuals for agricultural employment in
accordance with paragraph (i)(1) of this
section by a person who is exempt
thereunder.
(j) Shade grown tobacco. (1) Any person whose principal occupation or business is not agricultural employment,
when supplying full-time students or
other individuals whose principal occupation is not agricultural employment
to string or harvest shade grown tobacco and to engage in related and incidental agricultural employment, unless there are individuals under eighteen years of age who are providing
transportation on behalf of such person.
(2) Any person to the extent he is
supplied with students or other individuals for agricultural employment is accordance with paragraph (j)(1) of this
section by a person who is exempt
thereunder.
(k) Employees of exempt employers.
Any employee of any person described
in paragraphs (c) through (j) of this
section when performing farm labor
contracting activities within the scope
of such exemptions and exclusively for
such person.
Subpart B—Registration of Farm
Labor Contractors and Employees of Farm Labor Contractors Engaged in Farm
Labor Contracting Activities
REGISTRATION REQUIREMENTS; GENERAL
§ 500.40 Registration in general.
Any person who desires to engage in
any activity as a farm labor contractor, as defined in the Act and these
regulations, and is not exempt, is required first to obtain a Certificate of
Registration authorizing each such activity. Any employee of a registered
farm labor contractor who performs
farm labor contracting activities solely
on behalf of such contractor, and who
is not an independent contractor, must
obtain a Farm Labor Contractor Employee Certificate of Registration authorizing each such activity. The employee’s certificate must show the
name of the farm labor contractor for
whom the activities are to be performed. The contractor whose name appears on the employee’s certificate
must hold a valid Certificate of Registration covering the entire period
shown on the employee’s certificate.
§ 500.41 Farm labor contractor is responsible for actions of his farm
labor contractor employee.
(a) A farm labor contractor is responsible for assuring that every employee
who is performing farm labor contracting activities on behalf of such
contractor has obtained either a Farm
Labor Contractor Employee Certificate
of Registration or a Certificate of Registration as an independent farm labor
contractor, as required by the Act and
these regulations, prior to such employee’s engagement in any activity
enumerated in section 3(6) of the Act.
A farm labor contractor who utilizes
the services of another farm labor contractor who is not his employee must
also comply with the provisions of
§ 500.71. The farm labor contractor is
responsible for any violations of the
Act or these regulations committed by
his employee, whether or not the employee has registered as required by
the Act.
(b) Farm Labor Contractor Employee
Certificate of Registration is valid only
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29 CFR Ch. V (7–1–19 Edition)
during the period in which the holder is
an employee of the registered farm
labor contractor named on the Farm
Labor Contractor Employee Certificate. If prior to the expiration of the
Employee
Certificate,
the
holder
through a change in employment,
should become an employee of a different registered farm labor contractor, a replacements Employee Certificate which names the new employer
may be obtained by submitting to the
regional office that issued the original
employee certificate or to any regional
office of the Wage and Hour Division, a
written statement that includes the
date of the change in employment status and the name, the permanent place
of residence and certificate registration number of the new employer. Any
such change should be reported immediately.
APPLICATIONS AND RENEWAL OF FARM
LABOR CONTRACTOR AND FARM LABOR
CONTRACTOR EMPLOYEE CERTIFICATES
§ 500.44
Form of application.
An application for issuance or renewal of a Farm Labor Contractor Certificate of Registration or Farm Labor
Contractor Employee Certificate shall
be made on forms designated by the
Secretary.
§ 500.45
Contents of application.
The application shall set forth the information required thereon which shall
include the following:
(a) A declaration, subscribed and
sworn to by the applicant, stating the
applicant’s permanent place of residence, the farm labor contracting activities for which the certificate is requested, and the address to which official documents should be mailed;
(b) A statement identifying each vehicle to be used to transport any migrant or seasonal agricultural worker
and, if the vehicle is or will be owned
or controlled by the applicant, documentation showing that the applicant
for a Farm Labor Contractor Certificate of Registration is in compliance
with the requirements of section 401 of
the Act with respect to each such vehicle;
(c) A statement identifying each facility or real property to be used to
house any migrant agricultural worker
and, if the facility or real property is
or will be owned or controlled by the
applicant, documentation showing that
the applicant for a Farm Labor Contractor Certificate of Registration is in
compliance with section 203 of the Act
with respect to each such facility or
real property;
(d) A set of fingerprints of the applicant on Form FD 258 as prescribed by
the U.S. Department of Justice;
(e) A declaration, subscribed and
sworn to by the applicant, consenting
to the designation by a court of the
Secretary as an agent available to accept service of summons in any action
against the applicant, if the applicant
has left the jurisdiction in which the
action is commenced or otherwise has
become unavailable to accept service;
and
[48 FR 36741, Aug. 12, 1983, as amended at 82
FR 2227, Jan. 9, 2017]
§ 500.42 Certificate of Registration to
be carried and exhibited.
Each registered farm labor contractor and registered farm labor contractor employee shall carry at all
times while engaging in farm labor
contracting activities, a Certificate of
Registration or a Farm Labor Contractor Employee Certificate as appropriate and, upon request, shall exhibit
that certificate to representatives of
the U.S. Department of Labor and
State Employment Service Agencies
and to all persons with whom he intends to deal as a farm labor contractor or farm labor contractor employee.
§ 500.43 Effect of failure to produce
certificate.
The facilities and the services authorized by the Wagner-Peyser Act
shall be denied to any farm labor contractor upon refusal or failure to
produce, when asked, a Certificate of
Registration. Services shall be provided upon presentation of a valid Certificate of Registration.
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§ 500.48
(f) Such other relevant information
as the Secretary may require.
ance requirements of the Act and these
regulations;
(e) Authorize the activity of driving a
vehicle to transport a migrant or seasonal agricultural worker only upon receipt of (1) A doctor’s certificate on the
prescribed form, with an initial application for a Certificate of Registration
or a Farm Labor Contractor Employee
Certificate, and, when applying for a
renewal, a new completed doctor’s certificate if the previous doctor’s certificate is more than three years old; and
(2) evidence of a valid and appropriate
license, as provided by State law, to
operate the vehicle; and
(f) Authorize the activity of housing
a migrant agricultural worker only
upon receipt of (1) A statement identifying each facility or real property to
be used for housing a migrant agricultural worker during the period for
which registration is sought; and (2) if
the facility or real property is or will
be owned or controlled by the applicant, written proof that the facility or
real property complies with the applicable Federal and State standards of
health and safety. Such written proof
may be either a certification issued by
a State or local health authority or
other appropriate agency, or a copy of
a written request for the inspection of
a facility or real property made to the
appropriate State or local agency at
least forty-five days prior to the date
on which the facility or real property
is to be occupied by migrant agricultural workers, dated and signed by the
applicant or other person who owns or
controls the facility or real property. If
housing authorization is issued based
on a written request for inspection and
the housing facility or real property is
subsequently inspected and does not
meet the appropriate standards, the
housing authorization is null and void.
Should the required written proof for
housing authorization be unavailable
at the time of filing an application, the
applicant must attest in writing that
the applicant will not house any migrant agricultural worker in any facility or real property owned or controlled by the applicant, until such applicant shall have submitted all necessary written proof and obtained a
Farm Labor Contractor Certificate of
Registration showing that housing in
§ 500.46 Filing an application.
Registration under the Act is required whether or not licensing or registration is required under State law.
§ 500.47 Place for filing application.
Application forms may be filed in
any State Employment Service Office
or in any office of the Wage and Hour
Division, U.S. Department of Labor.
ACTION ON APPLICATION
§ 500.48 Issuance of certificate.
The Administrator or authorized representative shall:
(a) Review each application received
and determine whether such application is complete and properly executed;
(b) When appropriate, notify the applicant in writing of any incompleteness or error in the application and return the application for correction and
completion;
(c) Determine, after appropriate investigation, whether the applicant has
complied with the requirements of the
Act and these regulations, and if appropriate, issue a Certificate of
Registration or a Farm Labor Contractor Employee Certificate of Registration authorizing the performance
of one or more activities permitted
under the Act;
(d) Authorize the activity of transporting a migrant or seasonal agricultural worker, subject to the maximum
number of workers authorized to be
transported under the vehicle liability
policy and as indicated on the face of
the Certificate of Registration, only
upon receipt of:
(1) A statement in the manner prescribed by the Secretary identifying
each vehicle to be used, or caused to be
used, by the applicant for the transportation of any migrant or seasonal agricultural worker during the period for
which registration is sought;
(2) Written proof that every such vehicle which is under the applicant’s
ownership or control, is in compliance
with the vehicle safety requirements of
the Act and these regulations; and
(3) Written proof that every such vehicle is in compliance with the insur-
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§ 500.50
29 CFR Ch. V (7–1–19 Edition)
the facility or real property is authorized by the Secretary of Labor. In such
event, if otherwise eligible, the applicant will be issued a Certificate of Registration without a housing authorization. This certificate may be amended
to include an authorization to house at
such time as the required proof is
forthcoming.
the Act and these regulations shall
continue until the renewal application
has been finally determined by the Secretary.
(2) A certificate issued under the Act
and these regulations may be renewed
by the Secretary for additional twelvemonth periods or for periods in excess
of twelve months but not in excess of
twenty-four months.
(3) Eligibility for renewals of certificates for more than twelve months
under the Act and these regulations
shall be limited to those farm labor
contractors and farm labor contractor
employees who have not been cited
during the preceding five years for a
violation of the Act or any regulation
under the Act, or the Farm Labor Contractor Registration Act or any regulation under such Act.
(c) Continuation of certain FLCRA certificates. (1) Certificates issued under
FLCRA, and in effect on April 14, 1983,
that are valid for the services performed under FLCRA, will be continued in effect and be accepted as authorization to perform like services under
the Act and these regulations for the
remainder of calendar year 1983. Such
certificates will be subject to the Act
and these regulations with respect to
determinations to suspend, revoke or
refuse renewal.
(2) Actions pending related to the
suspension, revocation, or refusal to
issue or renew FLCRA certificates
shall continue through to a final determination. Any such certificate which is
considered to be in effect under title 29
CFR 40.21 pending a final determination, will be considered valid under
MSPA, provided application for a certificate under MSPA is made no later
than November 30, 1983.
[48 FR 36741, Aug. 12, 1983, as amended at 61
FR 24865, May 16, 1996]
§ 500.50 Duration of certificate.
(a) Initial certificates of farm labor contractors and farm labor contractor employees. (1) An initial certificate issued
under the Act and these regulations
shall expire twelve months from the
date of issuance unless earlier suspended or revoked.
(2) Certificates applied for during the
period beginning April 14, 1983, and
ending November 30, 1983, may be
issued for a period of up to twenty-four
months for the purpose of an orderly
transition to registration under the
Act.
(3) Certificates issued to employees
of farm labor contractors shall expire
at the suspension, revocation or expiration of the farm labor contractor’s Certificate of Registration under which
such employee was authorized.
(b) Certificate renewal of farm labor
contractors and farm labor contractor employees. (1) A certificate issued under
the Act and these regulations may be
temporarily extended by the filing of a
properly completed and signed application with the Secretary at least thirty
days prior to the expiration date. ‘‘Filing’’ may be accomplished by hand delivery, certified mail, or regular mail.
(i) If the application for renewal is
filed by regular mail or if it is delivered in person by the applicant, it must
be received by the Department of Labor
or an authorized representative of the
Department of Labor at least 30 days
prior to the expiration date shown on
the current certificate.
(ii) If the application for renewal is
filed by certified mail, it must be
mailed at least 30 days prior to the expiration date shown on the current certificate.
Where timely application for renewal
has been filed, the authority to operate
pursuant to a valid certificate under
[48 FR 36741, Aug. 12, 1983, as amended at 54
FR 13329, Mar. 31, 1989]
§ 500.51 Refusal to issue or to renew,
or suspension or revocation of certificate.
The Secretary may suspend or revoke
or refuse to issue or to renew a Certificate of Registration (including a Farm
Labor Contractor Employee Certificate) if the applicant or holder:
(a) Has knowingly made any misrepresentation in the application for
such certificate;
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§ 500.55
(b) Is not the real party in interest in
the application or Certificate of Registration and the real party in interest
is a person who has been refused
issuance or renewal of a certificate, has
had a certificate suspended or revoked,
or does not qualify under this section
for a certificate;
(c) Has failed to comply with the Act
or these regulations;
(d) Has failed to pay any court judgment obtained by the Secretary or any
other person under the Act or these
regulations or under the Farm Labor
Contractor Registration Act of 1963 or
any regulation under such Act;
(e) Has failed to comply with any
final order issued by the Secretary as a
result of a violation of the Act or these
regulations or a violation of the Farm
Labor Contractor Registration Act of
1963 or any regulation under such Act;
(f) Has been convicted within the preceding five years:
(1) Of any crime under State or Federal law relating to gambling, or to the
sale, distribution or possession of alcoholic beverages, in connection with or
incident to any farm labor contracting
activities, or
(2) Of any felony under State or Federal law involving robbery, bribery, extortion, embezzlement, grand larceny,
burglary, arson, violation of narcotics
laws, murder, rape, assault with intent
to kill, assault which inflicts grievous
bodily injury, prostitution, peonage, or
smuggling or harboring individuals
who have entered the United States illegally.
(g) Has been found to have violated
paragraph (1) or (2) of section 274A(a) of
the Immigration and Nationality Act
(INA) by hiring, recruiting, or referring
for a fee, for employment in the United
States, (1) An alien knowing the alien
is an unauthorized alien as defined in
section 274A(h)(3) of INA with respect
to such employment, or (2) an individual without complying with the requirements concerning verification of
the person’s identity and employment
authorization as stated in section
274A(b) of INA.
§ 500.52
Right to hearing.
Any applicant or holder who desires
an administrative hearing on the determination to refuse to issue or to renew,
or to suspend or to revoke, a Certificate of Registration or a Farm Labor
Contractor Employee Certificate of
Registration, shall make a request in
accordance with § 500.212, no later than
thirty (30) days after service of the notice referred to in § 500.210.
§ 500.53
Nontransfer of certificate.
A Certificate of Registration may not
be transferred or assigned.
§ 500.54
Change of address.
During the period for which the Certificate of Registration or Employee
Certificate is in effect, each farm labor
contractor or farm labor contractor
employee shall provide to the Secretary, within thirty (30) days, a notice
of each change of permanent place of
residence in accordance with § 500.215.
§ 500.55 Changes to or amendments of
certificate authority.
(a) During the period for which the
Certificate of Registration is in effect,
a farm labor contractor must apply to
the Secretary to amend the Certificate
of Registration whenever he intends to:
(1) Engage in another farm labor contracting activity;
(2) Use, or cause to be used, another
vehicle than that covered by the certificate to transport any migrant or
seasonal agricultural worker; or
(3) Use, or cause to be used, another
real property or facility to house any
migrant agricultural worker than that
covered by the certificate.
(b) Whenever another vehicle or
housing facility or real property is or
will be owned, operated, or controlled
by the farm labor contractor, the farm
labor contractor must submit the appropriate information to obtain transportation, driving or housing authorization, as applicable, as described in
§ 500.48, within 10 days after the contractor obtains or learns of the intended use of such vehicle or housing
facility or real property.
(c) Notwithstanding submission of
the appropriate information, the farm
labor contractor must comply with all
[48 FR 36741, Aug. 12, 1983, as amended at 54
FR 13329, Mar. 31, 1989]
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§ 500.56
29 CFR Ch. V (7–1–19 Edition)
applicable motor safety, insurance, and
housing safety and health provisions of
the Act and these regulations. With regard to housing, the farm labor contractor must submit the appropriate
housing documentation as well as comply with the housing safety and health
provisions of the Act and these regulations, prior to occupancy by a migrant
agricultural worker.
this Act, shall obtain at each place of
employment and make available for inspection to every worker he furnishes
for employment, a written statement
of the conditions of such employment
as described in sections 201(b) and
301(b) of the Act and §§ 500.75 and 500.76
of these regulations. As with the written
disclosure
statements
under
§§ 500.76 and 500.77, these statements
must be provided to the workers in
English or, as necessary and reasonable, in Spanish or another language
common to migrant or seasonal agricultural workers who are not fluent in
English.
(c)(1) No farm labor contractor shall
violate, without justification, the
terms of any written agreements made
with an agricultural employer or an
agricultural association pertaining to
any contracting activity or worker
protection under the Act. Normally,
‘‘without justification’’ would not include situations in which failure to
comply with the terms of any written
agreements was directly attributable
to Acts of God, due to conditions beyond the control of the person or to
conditions which he could not reasonably foresee.
(2) Written agreements do not relieve
a farm labor contractor of any responsibility that such contractor would
otherwise have under the Act and these
regulations.
(d) All payroll records made by the
farm labor contractor must be retained
by him for a period of three years.
§ 500.56 Replacement of Certificate of
Registration or Farm Labor Contractor Employee Certificate.
If a Certificate of Registration or a
Farm Labor Contractor Employee Certificate is lost or destroyed, a duplicate
certificate may be obtained by the submission to the regional office that
issued it or to any regional office of the
Wage and Hour Division, of a written
statement explaining its loss or destruction, indicating where the original application was filed and requesting that a duplicate be issued.
●82 FR 2227, Jan. 9, 2017]
ADDITIONAL OBLIGATIONS OF FARM
LABOR
CONTRACTORS
AND
FARM
LABOR CONTRACTOR EMPLOYEES
§ 500.60 Farm labor contractors’ recruitment, contractual and general
obligations.
The Act imposes certain specific recruitment, contractual and general obligations on farm labor contractors and
farm labor contractor employees. The
contractor is responsible for any violations under the Act committed by his
employee. Each of the following obligations applies to both farm labor contractors and farm labor contractor employees.
(a) Each farm labor contractor shall
provide to any other farm labor contractor and to any agricultural employer and agricultural association to
which such farm labor contractor has
furnished any migrant or seasonal agricultural worker, copies of all records
for that place of employment which
such farm labor contractor is required
to retain for each worker furnished or
supplied. The recipient of these records
shall keep them for a period of three
years.
(b) Each farm labor contractor, without regard to any other provisions of
§ 500.61 Farm labor contractors must
comply with all worker protections
and all other statutory provisions.
Every farm labor contractor must
comply with all of the provisions of titles I through V of the Act and all of
the subparts of these regulations, unless subject to a specific statutory exemption. In addition to complying with
all of the standards stated in subparts
A and B of these regulations, every
farm labor contractor must comply
with each provision stated in subpart C
and the motor vehicle safety and insurance and housing standards stated in
subpart D.
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§ 500.70
records, payment of wages and the
posting of required posters under
MSPA. In such joint employment situations the responsibility for assuring
these MSPA protections may be carried out by one of the joint employers.
While under a joint employment relationship all joint employers are equally responsible for assuring that the appropriate protections are provided, the
creation of such a joint employment
relationship does not also require unnecessary duplication of effort as, for
example, in relation to the posting of
posters (see §§ 500.75(e) and 500.76(e)) or
the provision of an itemized written
statement of the worker’s pay (see
§ 500.80(d)). Failure to provide protections coming within the joint employment relationship, however, will result
in all joint employers being responsible
for that failure.
(c) Transportation related protections.
Responsibility for compliance with the
motor vehicle safety and insurance
provisions of section 401 of the Act and
§§ 500.100 through 500.128 of these regulations is imposed upon the person or
persons using or causing to be used,
any vehicle for transportation of migrant or seasonal agricultural workers.
As stated in these regulations, the
transportation safety provisions do not
include certain car pooling arrangements. Additionally, these regulations
do not impose responsibility on an agricultural employer or agricultural association for a farm labor contractor’s
failure to adhere to the safety provisions provided in these regulations
when the farm labor contractor is providing the vehicles and directing their
use. However, when an agricultural employer or agricultural association specifically directs or requests a farm
labor contractor to use the contractor’s vehicle to carry out a task for the
agricultural employer or agricultural
association, such direction constitutes
causing the vehicle to be used and the
agricultural employer or agricultural
association is jointly responsible with
the farm labor contractor for assuring
that the vehicle meets the insurance,
and safety and health provisions of
these regulations. In all cases a person
using a farm labor contractor is required to take reasonable steps to determine that the vehicle used by the
§ 500.62 Obligations of a person holding a valid Farm Labor Contractor
Employee Certificate of Registration.
Any person holding a valid Farm
Labor Contractor Employee Certificate
of Registration in accordance with the
Act and these regulations is required
to comply with the Act and these regulations to the same extent as if said
person had been required to obtain a
Certificate of Registration in such person’s own name as a farm labor contractor.
Subpart C—Worker Protections
GENERAL
§ 500.70 Scope of worker protections.
(a) General. The Act provides protections for migrant and seasonal agricultural workers irrespective of whether
they are employed by a farm labor contractor, an agricultural employer or an
agricultural association, or, in the case
where there is joint responsibility, by
more than one of these persons. The
Act’s provisions include standards relating to vehicle safety, housing safety
and health, disclosure of wages, hours
and other conditions of employment,
and recordkeeping. When any person
not otherwise exempt from the Act recruits, solicits, hires, employs, furnishes or transports workers, that person is required to comply with the applicable protective provisions of the
Act. In addition, any person not specifically exempt from coverage of the
Act (irrespective of whether that person is an agricultural employer, an agricultural association or farm labor
contractor) who owns or controls a facility or real property which is used as
housing for any migrant agricultural
workers must ensure that the facility
or real property complies with all substantive Federal and State safety and
health standards made applicable to
that type of housing. (See § 500.132)
(b) Wage related protections. Joint employment under the Fair Labor Standards Act, which establishes responsibility for the maintenance of payroll
records, payment of wages and posting
of notices under that law, is joint employment under MSPA for establishing
responsibility for the maintenance of
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§ 500.71
29 CFR Ch. V (7–1–19 Edition)
farm labor contractor is authorized to
be used for transportation as prescribed in section 402 of the Act and
§ 500.71 of these regulations.
(d) Housing related protections. Responsibility for compliance with the
housing safety and health provisions of
section 203 of the Act and §§ 500.130
through 500.135 of these regulations is
imposed upon the person (or persons)
who owns or controls a facility or real
property used as housing for migrant
agricultural workers. Any agricultural
employer or agricultural association
which has a farm labor contractor operate housing which it owns or controls
is responsible, as well as the farm labor
contractor, for insuring compliance
with the housing safety and health provisions of these regulations. When the
owner or operator of the housing is not
an agricultural employer, agricultural
association or farm labor contractor,
the owner is responsible for that housing meeting the safety and health provisions under the Act and these regulations. This is subject to the exclusion
stated in § 500.131 of these regulations
which provides that the housing safety
and health requirements do not apply
to any person who, in the ordinary
course of that person’s business, regularly provides housing on a commercial
basis to the general public and who
provides housing to any migrant agricultural worker of the same character
and on the same or comparable terms
and conditions as provided to the general public.
Certificate of Registration which on its
face is valid and which authorizes the
activity for which the contractor is
utilized. A person has the alternative
to confirm the contractor’s registration through the central registry maintained by the United States Department of Labor.
§ 500.72
Agreements with workers.
(a) The Act prohibits farm labor contractors, agricultural employers and
agricultural associations from violating, without justification, the terms
of any working arrangements they
have made with migrant or seasonal
agricultural
workers.
Normally,
‘‘without justification’’ would not include situations in which failure to
comply with the terms of any working
arrangements was directly attributable
to acts of God, due to conditions beyond the control of the person or to
conditions which he could not reasonably foresee.
(b) Written agreements do not relieve
any person of any responsibility that
the person would otherwise have under
the Act or these regulations.
§ 500.73 Required purchase of goods or
services solely from any person prohibited.
The Act prohibits a farm labor contractor, agricultural employer or agricultural association from requiring a
migrant or seasonal agricultural worker to purchase goods or services solely
from such farm labor contractor, agricultural employer, or agricultural association, or any other person acting
as an agent for any person subject to
this prohibition.
§ 500.71 Utilization of only registered
farm labor contractors.
The Act prohibits any person from
utilizing the services of a farm labor
contractor to supply migrant or seasonal agricultural workers without
first taking reasonable steps to determine that the farm labor contractor
possesses a valid Certificate of Registration, issued pursuant to the Act,
which authorizes the activity for which
the contractor is to be utilized. This
prohibition also applies to a farm labor
contractor who wishes to utilize the
services of another farm labor contractor (see § 500.41). In making the determination about a contractor’s registration status, a person may rely
upon the contractor’s possession of a
RECRUITING, HIRING AND PROVIDING INFORMATION TO MIGRANT AGRICULTURAL WORKERS
§ 500.75
Disclosure of information.
(a) Where disclosure is required, Department of Labor optional forms may
be used to satisfy the requirements of
disclosure under the Act.
(b) Each farm labor contractor, agricultural employer, and agricultural association which recruits any migrant
agricultural worker shall ascertain to
the best of his ability and disclose, in
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§ 500.75
writing to the extent that he has obtained such information, to such worker at the time of recruitment, the following information:
(1) The place of employment (with as
much specificity as practical, such as
the name and address of the employer
or the association);
(2) The wage rates (including piece
rates) to be paid;
(3) The crops and kinds of activities
on which the worker may be employed;
(4) The period of employment;
(5) The transportation, housing, and
any other employee benefits to be provided, if any, and any costs to be
charged for each of them;
(6) Whether state workers’ compensation or state unemployment insurance
is provided:
(i) If workers’ compensation is provided, the required disclosure must include the name of the workers’ compensation
insurance
carrier,
the
name(s) of the policyholder(s), the
name and telephone number of each
person who must be notified of an injury or death, and the time period
within which such notice must be
given.
(ii) The information requirement in
paragraph (b)(6)(i) of this section may
be satisfied by giving the worker a photocopy of any workers’ compensation
notice required by State law;.
(7) The existence of any strike or
other concerted work stoppage, slowdown, or interruption of operations by
employees at the place of employment;
and
(8) The existence of any arrangements with any owner or agent of any
establishment in the area of employment under which the farm labor contractor, the agricultural employer, or
the agricultural association is to receive a commission or any other benefit resulting from any sales by such
establishment to the workers.
(c) Each farm labor contractor, agricultural employer and agricultural association which employs any migrant
agricultural worker shall post (and
maintain) in a conspicuous place at the
place of employment a poster provided
by the Secretary of Labor, which sets
out the rights and protections for
workers required under the Act.
(d) The employer (other than a farm
labor contractor) of any migrant agricultural worker, shall provide at the
place of employment on request of the
worker, a written statement of the
conditions of employment. A farm
labor contractor shall provide such information in accordance with § 500.60(b)
of these regulations.
(e) In a joint employment situation,
each employer is equally responsible
for displaying and maintaining the
poster and for responding to worker requests for written statements of the
conditions of employment which are
made during the course of employment.
This joint responsibility, however, does
not require needless duplication, such
as would occur if each employer posted
the same poster or provided the same
written statement with respect to the
same employment conditions. Failure
to provide the information required by
a joint employment relationship, however, will result in all joint employers
being responsible for that failure.
(f) Each farm labor contractor, agricultural employer and agricultural association which provides housing for
any migrant agricultural worker shall
post in a conspicuous place (at the site
of the housing) or present in the form
of a written statement to the worker
the following information on the terms
and conditions of occupancy of such
housing, if any:
(1) The name and address of the farm
labor contractor, agricultural employer
or agricultural association providing
the housing;
(2) The name and address of the individual in charge of the housing;
(3) The mailing address and phone
number where persons living in the
housing facility may be reached;
(4) Who may live at the housing facility;
(5) The charges to be made for housing;
(6) The meals to be provided and the
charges to be made for them;
(7) The charges for utilities; and
(8) Any other charges or conditions of
occupancy.
(g) If the terms and conditions of occupancy are posted, the poster shall be
displayed and maintained during the
entire period of occupancy. If the terms
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29 CFR Ch. V (7–1–19 Edition)
and conditions of occupancy are disclosed to the worker through a statement (rather than through a posting),
such statement shall be provided to the
worker prior to occupancy. Department of Labor optional forms may be
used to satisfy this requirement.
(7) The existence of any strike or
other concerted work stoppage, slowdown, or interruption of operations by
employees at the place of employment;
and
(8) The existence of any arrangements with any owner or agent of any
establishment in the area of employment under which the farm labor contractor, the agricultural employer, or
the agricultural association is to receive a commission or any other benefit resulting from any sales by such
establishment to the workers.
(c) Each farm labor contractor, agricultural employer and agricultural association which recruits any seasonal
agricultural worker for employment
through the use of day-haul operation
in canning, packing, ginning, seed conditioning or related research, or processing operations, shall ascertain and
disclose in writing to the worker at the
time of recruitment the information on
employment conditions set out in paragraph (b) of this section.
(d)(1) Each farm labor contractor, agricultural employer and agricultural
association which employs any seasonal agricultural worker shall post
(and maintain) at the place of employment in a conspicuous place readily accessible to the worker a poster provided by the Secretary of Labor which
sets out the rights and protections for
such worker required under the Act.
(2) Such employer shall provide, on
request of the worker, a written statement of the information described in
paragraph (b) of this section.
(e) In a joint employment situation,
each employer is equally responsible
for displaying and maintaining the
poster and for responding to worker requests for written statements of the
conditions of employment which are
made during the course of employment.
This joint responsibility, however, does
not require needless duplication, such
as would occur if each employer posted
the same poster or provided the same
written statement with respect to the
same employment conditions.
[48 FR 36741, Aug. 12, 1983, as amended at 61
FR 24866, May 16, 1996]
HIRING AND PROVIDING INFORMATION TO
SEASONAL AGRICULTURAL WORKERS
§ 500.76 Disclosure of information.
(a) Where disclosure is required, Department of Labor optional forms may
be used to satisfy the requirements of
disclosure under the Act.
(b) Each farm labor contractor, agricultural employer and agricultural association, which recruits any seasonal
agricultural worker for employment on
a farm or ranch to perform field work
related to planting, cultivating or harvesting operations, shall ascertain and,
upon request, disclose in writing the
following information to such worker
when an offer of employment is made:
(1) The place of employment (with as
much specificity as practical, such as
the name and address of the employer
or the association);
(2) The wage rates (including piece
rates) to be paid;
(3) The crops and kinds of activities
on which the worker may be employed;
(4) The period of employment;
(5) The transportation and any other
employee benefits to be provided, if
any, and any costs to be charged for
each of them;
(6) Whether state workers’ compensation or state unemployment insurance
is provided:
(i) If workers’ compensation is provided, the required disclosure must include the name of the workers’ compensation
insurance
carrier,
the
name(s) of the policyholder(s), the
name and telephone number of each
person who must be notified of an injury or death, and the time period
within which such notice must be
given.
(ii) The information requirement in
paragraph (b)(6)(i) of this section may
satisfied giving the worker a photocopy
of any workers’ compensation notice
required by State law;
[48 FR 36741, Aug. 12, 1983, as amended at 61
FR 24866, May 16, 1996]
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Wage and Hour Division, Labor
§ 500.81
spect to each such worker for a period
of three years.
(c) When a farm labor contractor furnishes any migrant or seasonal agricultural worker, and the farm labor contractor is the employer, the farm labor
contractor must furnish the agricultural employer, agricultural association or other farm labor contractor to
whom the workers are furnished, a
copy of all payroll records required
under paragraph (a) of this section
which the farm labor contractor has
made regarding such worker for that
place of employment. The person receiving such records shall maintain
them for a period of three years.
(d) In addition to making records of
this payroll information, the farm
labor contractor, agricultural employer and agricultural association
shall provide each migrant or seasonal
agricultural worker employed with an
itemized written statement of this information at the time of payment for
each pay period which must be no less
often than every two weeks (or semimonthly). Such statement shall also
include the employer’s name, address,
and employer identification number assigned by the Internal Revenue Service. This responsibility does not require needless duplication such as
would occur if each provided the worker with a written itemized statement
for the same work.
EMPLOYMENT INFORMATION FURNISHED
§ 500.77 Accuracy of information furnished.
No farm labor contractor, agricultural employer or agricultural association shall knowingly provide false or
misleading information on the terms,
conditions or existence of agricultural
employment and housing required to be
disclosed by the Act and these regulations to any migrant or seasonal agricultural worker.
§ 500.78 Information
guage.
in
foreign
lan-
Each farm labor contractor, agricultural employer and agricultural association shall make all required written
disclosures to the worker, including
the written disclosures of the terms
and conditions of occupancy of housing
to be provided to any migrant worker,
in English or, as necessary and reasonable, in Spanish or another language
common to migrant or seasonal agricultural workers who are not fluent or
literate in English. The Department of
Labor shall make forms available in
English, Spanish, Haitian-Creole and
other languages, as necessary, which
may be used in providing workers with
such information.
WAGES AND PAYROLL STANDARDS
§ 500.80
Payroll records required.
(a) Each farm labor contractor, agricultural employer and agricultural association which employs any migrant
or seasonal agricultural worker shall
make and keep the following records
with respect to each worker including
the name, permanent address, and Social Security number:
(1) The basis on which wages, are
paid;
(2) The number of piecework units
earned, if paid on a piecework basis;
(3) The number of hours worked;
(4) The total pay period earnings;
(5) The specific sums withheld and
the purpose of each sum withheld; and
(6) The net pay.
(b) Each farm labor contractor, agricultural employer and agricultural association which employs any migrant
or seasonal agricultural worker shall
preserve all payroll records with re-
§ 500.81
Payment of wages when due.
Each farm labor contractor, agricultural employer and agricultural association which employs any migrant or
seasonal agricultural worker must pay
the wages owed such worker when due.
In meeting this responsibility, the
farm labor contractor, agricultural employer and agricultural association
shall pay the worker no less often than
every two weeks (or semi-monthly).
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§ 500.100
29 CFR Ch. V (7–1–19 Edition)
activities under the circumstances set
out in § 500.103.
(b) Compliance required. Any violation
of the standards promulgated by the
Secretary in § 500.104 or adopted by the
Secretary in § 500.105 shall be a violation of the Act and these regulations.
(c) Development of Department of Labor
Standards. In developing the regulations in § 500.104, the Secretary has considered among other factors: (1) The
type of vehicle used, (2) the passenger
capacity of the vehicle, (3) the distance
which such workers will be carried in
the vehicle, (4) the type of roads and
highways on which such workers will
be carried in the vehicle, and (5) the extent to which a proposed standard
would cause an undue burden on agricultural employers, agricultural associations, or farm labor contractors.
(d) Adoption of Department of Transportation (DOT) Standards. In accordance with section 401(b)(2)(C) of the
Act, the Secretary has adopted in
§ 500.105 of these regulations, the DOT
standards, without regard to the mileage and boundary limitations established in 49 U.S.C. 3102(c).
Subpart D—Motor Vehicle Safety
and Insurance for Transportation of Migrant and Seasonal Agricultural Workers,
Housing Safety and Health for
Migrant Workers
MOTOR VEHICLE SAFETY
§ 500.100 Vehicle safety obligations.
(a) General obligations. Each farm
labor contractor, agricultural employer and agricultural association
which uses, or causes to be used, any
vehicle to transport a migrant or seasonal agricultural worker shall ensure
that such vehicle conforms to vehicle
safety standards prescribed by the Secretary of Labor under the Act and with
other applicable Federal and State
safety standards. Each farm labor contractor, agricultural employer and agricultural association shall also ensure
that each driver of any such vehicle
has a currently valid motor vehicle operator’s permit or license, as provided
by applicable State law, to operate the
vehicle.
(b) Proof of compliance with vehicle
safety standards. Prima facie evidence
that safety standards have been met
will be shown by the presence of a current State vehicle inspection sticker.
Such sticker will not, however, relieve
the farm labor contractor, agricultural
employer or agricultural association
from responsibility for maintaining the
vehicle in accordance with § 500.104 or
§ 500.105, as applicable.
(c) Uses or causes to be used. The term
‘‘uses or causes to be used’’ as set forth
in paragraph (a) of this section does
not include carpooling arrangements
made by the workers themselves, using
one of the workers’ own vehicles. However, carpooling does not include any
transportation arrangement in which a
farm labor contractor participates or
which is specifically directed or requested by an agricultural employer or
an agricultural association.
§ 500.102 Applicability of vehicle safety
standards.
(a) Any passenger automobile or station wagon used or caused to be used
by any farm labor contractor, agricultural employer or agricultural association to transport any migrant or seasonal agricultural worker shall meet
the vehicle safety standards prescribed
in § 500.104.
(b) Any vehicle, other than a passenger automobile or station wagon,
used or caused to be used by any farm
labor contractor, agricultural employer or agricultural association to
transport any migrant or seasonal agricultural worker pursuant to a dayhaul operation shall be subject to the
safety standards prescribed under
§ 500.105.
(c) Any vehicle, other than a passenger automobile or station wagon,
which has been or is being used or
caused to be used for any trip of a distance greater than 75 miles by a farm
labor contractor, agricultural employer or agricultural association to
transport any migrant or seasonal agricultural worker, shall be subject to
§ 500.101 Promulgation and adoption
of vehicle standards.
(a) General. All transportation of migrant and seasonal agricultural workers, whether on the farm or on the
road, shall be subject to the vehicle
safety standards of the Act, except for
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§ 500.104
workers carrying out these activities
on such machinery and equipment or
being engaged in transportation incidental thereto. The exclusion does not
include the use of such machinery for
the transportation of any worker under
any other circumstances.
(b) Exclusion for immediate family
transporting family members. The standards of this subpart do not apply to an
individual migrant or seasonal agricultural worker when the only other occupants of that individual’s vehicle consist of his immediate family members
as defined in § 500.20(o).
(c) Carpooling. Vehicle safety standards or insurance requirements of the
Act and these regulations do not apply
to carpooling arrangements made by
the workers themselves, using one of
the workers’ own vehicles and not specifically directed or requested by an
agricultural employer or agricultural
association. Carpooling, however, does
not include any transportation arrangement in which a farm labor contractor participates.
(See also § 500.120)
the safety standards prescribed under
§ 500.105. One trip may have numerous
intermediate stops.
(d) Any vehicle, other than a passenger automobile or station wagon,
used or caused to be used by any farm
labor contractor, agricultural employer or agricultural association to
transport any migrant or seasonal agricultural worker in any manner not
addressed by paragraphs (a), (b), or (c)
of this section shall meet the vehicle
safety standards prescribed in § 500.104.
(e) The use or intended use of a vehicle, other than a passenger automobile
or station wagon, for transportation of
the type identified in § 500.102(b) or
§ 500.102(c) will make the vehicle subject to the standards prescribed under
§ 500.105, so long as the vehicle is used
for transportation subject to the Act
and these regulations.
(f) Any pickup truck used only for
transportation subject to § 500.104 when
transporting passengers only within
the cab shall be treated as a station
wagon.
(g) Pursuant to section 401(b)(2)(C) of
the Act, standards prescribed by the
Secretary shall be in addition to, and
shall not supersede nor modify, any
standards prescribed under part II of
the Interstate Commerce Act and any
successor provision of subtitle IV of
title 49, U.S. Code or the regulations
issued thereunder which is independently applicable to transportation to
which this section applies. A violation
of any such standard shall also constitute a violation of the Act and these
regulations.
§ 500.104 Department of Labor standards for passenger automobiles and
station wagons and transportation
of seventy-five miles or less.
Any farm labor contractor, agricultural employer or agricultural association providing transportation in passenger automobiles and station wagons
and other vehicles used only for transportation as provided in § 500.102(a) and
(d) shall comply with the following vehicle safety standards:
(a) External lights. Head lights, tail
lights, stop lights, back-up lights, turn
signals and hazard warning lights shall
be operable.
(b) Brakes. Every vehicle shall be
equipped with operable brakes for stopping and holding on an incline. Brake
systems shall be free of leaks.
(c) Tires. Tires shall have at least
2/32 inch tread depth, and have no
cracks/defects in the sidewall.
(d) Steering. The steering wheel and
associated mechanism shall be maintained so as to safely and accurately
turn the vehicles.
(e) Horn. Vehicles shall have an operable air or electric horn.
[48 FR 36741, Aug. 12, 1983; 48 FR 38380, Aug.
23, 1983]
§ 500.103 Activities not subject to vehicle safety standards.
(a) Agricultural machinery and equipment excluded. Vehicle safety standards
or insurance requirements issued under
the Act and these regulations do not
apply to the transportation of any seasonal or migrant agricultural worker
on a tractor, combine, harvester, picker, other similar machinery and equipment while such worker is actually engaged in the planting, cultivating, or
harvesting of any agricultural commodity or the care of livestock or poultry. This exclusion applies only to
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§ 500.105
29 CFR Ch. V (7–1–19 Edition)
(f) Mirrors. Mirrors shall provide the
driver full vision of the sides and to the
rear of the vehicle.
(g)
Windshields/windshield
wipers.
Windshields and windows may not have
cracks or opaque obstructions which
obscure vision. Vehicles shall be
equipped with windshield wipers that
are operational to allow the operator
full frontal vision in all weather conditions.
(h) Fuel system. Fuel lines and the
fuel tank shall be free of leaks. The
tank shall be fitted with a cap to securely cover the filling opening.
(i) Exhaust system. The exhaust system shall discharge carbon monoxide
away from the passenger compartment
and be free of leaks beneath the passenger compartment.
(j) Ventilation. Windows will be operational to allow fresh air to the occupants of the vehicle.
(k) Safe loading. Vehicles will not be
driven when loaded beyond the manufacturer’s gross vehicle weight rating.
(l) Seats. A seat securely fastened to
the vehicle will be provided for each
occupant or rider in, or on, any vehicle,
except that transportation which is
primarily on private farm roads will be
excused from this requirement provided the total distance traveled does
not exceed ten (10) miles, and so long
as the trip begins and ends on a farm
owned or operated by the same employer.
(m) Handles and latches. Door handles
and latches shall be provided and maintained to allow exiting capability for
vehicle occupants.
(n) Passenger compartment. Floor and
sides of any part of the vehicle to be
occupied by passengers must be free of
openings, rusted areas or other defects
which are likely to result in injury to
passengers.
(b) The Secretary for the purposes of
this section has adopted from 49 CFR
part 398 the following pertinent standards. (In adopting these standards, editorial changes necessitated by the Act
and these regulations have been made
to conform the language to these regulations):
(1) Qualification of drivers or operators
(Source: 49 CFR 398.3)—(i) Compliance required. Every person subject to this Act
who drives a motor vehicle or is responsible for the hiring, supervision,
training, assignment or dispatching of
drivers shall comply and be conversant
with the requirements of this section.
(ii) Minimum physical requirements. No
such person shall drive, nor shall any
such person require or permit any person to drive, any motor vehicle unless
such person possesses the following
minimum qualifications:
(A) No loss of foot, leg, hand or arm,
(B) No mental, nervous, organic, or
functional disease, likely to interfere
with safe driving.
(C) No loss of fingers, impairment of
use of foot, leg, fingers, hand or arm, or
other structural defect or limitation,
likely to interfere with safe driving.
(D) Eyesight. Visual acuity of at least
20/40 (Snellen) in each eye either without glasses or by correction with glasses; form field of vision in the horizontal meridian shall not be less than a
total of 140 degrees; ability to distinguish colors red, green and yellow;
drivers requiring correction by glasses
shall wear properly prescribed glasses
at all times when driving.
(E) Hearing. Hearing shall not be less
than 10/20 in the better ear, for conversational tones, without a hearing
aid.
(F) Liquor, narcotics and drugs. Shall
not be addicted to the use of narcotics
or habit forming drugs, or the excessive use of alcoholic beverages or liquors.
(G) Initial and periodic physical examination of drivers. No such person shall
drive nor shall any such person require
or permit any person to drive any
motor vehicle unless within the immediately preceding 36-month period such
person shall have been physically examined and shall have been certified in
accordance with the provisions of paragraph (b)(1)(ii)(H) of this section by a
§ 500.105 DOT standards adopted by
the Secretary.
(a) Any farm labor contractor, agricultural employer or agricultural association providing transportation in vehicles other than passenger automobiles and station wagons used for
transportation as provided in § 500.102
(b), (c), and (e) shall comply with the
motor carrier safety standards listed in
paragraph (b) of this section.
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§ 500.105
(D) Knowledge of English. Every driver shall be able to read and speak the
English language sufficiently to understand highway traffic signs and signals
and directions given in English and to
respond to official inquiries.
(E) Driver’s permit. Possession of a
valid permit qualifying the driver to
operate the type of vehicle driven by
him in the jurisdiction by which the
permit is issued.
(2) Driving of motor vehicles (Source: 49
CFR 398.4)—(i) Compliance required.
Every person shall comply with the requirements of this section, shall instruct its officers, agents, representatives and drivers with respect thereto,
and shall take such measures as are
necessary to insure compliance therewith by such persons. All officers,
agents, representatives, drivers, and
employees of persons subject to this
Act directly concerned with the management, maintenance, operation, or
driving of motor vehicles, shall comply
with and be conversant with the requirements of this section.
(ii) Driving rules to be obeyed. Every
motor vehicle shall be driven in accordance with the laws, ordinances,
and regulations of the jurisdiction in
which it is being operated, unless such
laws, ordinances and regulations are at
variance with specific regulations of
the Federal Highway Administration,
which impose a greater affirmative obligation or restraint.
(iii) [Reserved]
(iv) Alcoholic beverages. No driver
shall drive or be required or permitted
to drive a motor vehicle, be in active
control of any such vehicle, or go on
duty or remain on duty, when under
the influence of any alcoholic beverage
or liquor, regardless of its alcoholic
content, nor shall any driver drink any
such beverage or liquor while on duty.
(v) Schedules to conform with speed limits. No person shall permit nor require
the operation of any motor vehicle between points in such period of time as
would necessitate the vehicle being operated at speeds greater than those
prescribed by the jurisdictions in or
through which the vehicle is being operated.
(vi) Equipment and emergency devices.
No motor vehicle shall be driven unless
the driver thereof shall have satisfied
licensed doctor of medicine or osteopathy as meeting the requirements of
this subsection.
(H) Certificate of physical examination.
Every person shall have in his files at
his principal place of business for every
driver employed or used by him a legible certificate of a licensed doctor of
medicine or osteopathy based on a
physical examination as required by
paragraph (b)(1)(ii)(G) of this section or
a legible photographically reproduced
copy thereof, and every driver shall
have in his possession while driving,
such a certificate or a photographically
reproduced copy thereof covering himself.
(I) Doctor’s certificate. The doctor’s
certificate shall certify as follows:
DOCTOR’S CERTIFICATE
(Driver of Migrant Workers)
This is to certify that I have this day examined llllll in accordance with
§ 398.3(b) of the Federal Motor Carrier Safety
Regulations of the Federal Highway Administration and that I find him
Qualified under said rules b
Qualified only when wearing glasses b
I have kept on file in my office a completed examination.
(Date) llllllllllllllllllll
(Place)
lllllllllllllllllll
llllllllllllllllllllllll
(Signature of examining doctor)
llllllllllllllllllllllll
(Address of doctor)
llllllllllllllllllllllll
(Signature of driver)
llllllllllllllllllllllll
(Address of driver)
(iii) Minimum age and experience requirements. No person shall drive, nor
shall any person require or permit any
person to drive, any motor vehicle unless such person possesses the following
minimum qualifications:
(A) Age. Minimum age shall be 21
years.
(B) Driving skill. Experience in driving some type of motor vehicle (including private automobiles) for not less
than one year, including experience
throughout the four seasons.
(C) Knowledge of regulations. Familiarity with the rules and regulations
prescribed in this part pertaining to
the driving of motor vehicles.
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§ 500.105
29 CFR Ch. V (7–1–19 Edition)
himself that the following parts, accessories, and emergency devices are in
good working order; nor shall any driver fail to use or make use of such parts,
accessories, and devices when and as
needed:
the total number of passengers exceeds
the seating capacity which will be permitted
on
seats
prescribed
in
§ 500.105(b)(3)(vi). All passengers carried
on such vehicle shall remain seated
while the motor vehicle is in motion.
(viii) Rest and meal stops. Every person shall provide for reasonable rest
stops at least once between meal stops.
Meal stops shall be made at intervals
not to exceed six hours and shall be for
a period of not less than 30 minutes duration.
(ix) Kinds of motor vehicles in which
workers may be transported. Workers
may be transported in or on only the
following types of motor vehicles: A
bus, a truck with no trailer attached,
or a semitrailer attached to a trucktractor provided that no other trailer
is attached to the semitrailer. Closed
vans without windows or means to assure ventilation shall not be used.
(x) Limitation on distance of travel in
trucks. Any truck when used for the
transportation of migrant or seasonal
agricultural workers, if such workers
are being transported in excess of 600
miles, shall be stopped for a period of
not less than eight consecutive hours
either before or upon completion of 600
miles travel, and either before or upon
completion of any subsequent 600 miles
travel to provide rest for drivers and
passengers.
(xi) Lighting devices and reflectors. No
motor vehicle shall be driven when any
of the required lamps or reflectors are
obscured by the tailboard, by any and
all lighting devices required pursuant
to 49 U.S.C. 3102(c) shall be lighted during darkness or at any other time when
there is not sufficient light to render
vehicles and persons visible upon the
highway at a distance of 500 feet.
(xii) Ignition of fuel; prevention. No
driver or other person shall: (A) Fuel a
motor vehicle with the engine running,
except when it is necessary to run the
engine to fuel the vehicle; (B) smoke or
expose any open flame in the vicinity
of a vehicle being fueled; (C) fuel a
motor vehicle unless the nozzle of the
fuel hose is continuously in contact
with the intake pipe of the fuel tank;
(D) permit any other person to engage
in such activities as would be likely to
result in fire or explosion.
Service brakes, including trailer brake connections.
Parking (hand) brake.
Steering mechanism.
Lighting devices and reflectors.
Tires.
Horn.
Windshield wiper or wipers.
Rear-vision mirror or mirrors.
Coupling devices.
Fire extinguisher, at least one properly
mounted.
Road warning devices, at least one red burning fusee and at least three flares (oil burning pot torches), red electric lanterns, or
red emergency reflectors.
(vii) Safe loading—(A) Distribution and
securing of load. No motor vehicle shall
be driven nor shall any motor carrier
permit or require any motor vehicle to
be driven if it is so loaded, or if the
load thereon is so improperly distributed or so inadequately secured, as to
prevent its safe operation.
(B) Doors, tarpaulins, tailgates and
other equipment. No motor vehicle shall
be driven unless the tailgate, tailboard,
tarpaulins, doors, all equipment and
rigging used in the operation of said
vehicle, and all means of fastening the
load, are securely in place.
(C) Interference with driver. No motor
vehicle shall be driven when any object
obscures his view ahead, or to the right
or left sides, or to the rear, or interferes with the free movement of his
arms or legs, or prevents his free and
ready access to the accessories required for emergencies, or prevents the
free and ready exit of any person from
the cab or driver’s compartment.
(D) Property on motor vehicles. No vehicle transporting persons and property shall be driven unless such property is stowed in a manner which will
assure: (1) Unrestricted freedom of motion to the driver for proper operation
of the vehicle; (2) unobstructed passage
to all exits by any person; and (3) adequate protection to passengers and others from injury as a result of the displacement or falling of such articles.
(E) Maximum passengers on motor vehicles. No motor vehicle shall be driven if
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§ 500.105
(xiii) Reserve fuel. No supply of fuel
for the propulsion of any motor vehicle
or for the operation of any accessory
thereof shall be carried on the motor
vehicle except in a properly mounted
fuel tank or tanks.
(xiv) Driving by unauthorized person.
Except in case of emergency, no driver
shall permit a motor vehicle to which
he is assigned to be driven by any person not authorized to drive such vehicle.
(xv) Protection of passengers from
weather. No motor vehicle shall be driven while transporting passengers unless the passengers therein are protected from inclement weather conditions such as rain, snow, or sleet, by
use of the top or protective devices required by § 500.105(b)(3)(vi)(E).
(xvi) Unattended vehicles; precautions.
No motor vehicle shall be left unattended by the driver until the parking
brake has been securely set, the wheels
chocked, and all reasonable precautions have been taken to prevent
the movement of such vehicle.
(xvii) Railroad grade crossings; stopping required; sign on rear of vehicle.
Every motor vehicle shall, upon approaching any railroad grade crossing,
make a full stop not more than 50 feet,
nor less than 15 feet from the nearest
rail of such railroad grade crossing,
and shall not proceed until due caution
has been taken to ascertain that the
course is clear; except that a full stop
need not be made at:
(A) A street car crossing within a
business or residence district of a municipality;
(B) A railroad grade crossing where a
police officer or a traffic-control signal
(not a railroad flashing signal) directs
traffic to proceed:
(C) An abandoned or exempted grade
crossing which is clearly marked as
such by or with the consent of the
proper state authority, when such
marking can be read from the driver’s
position.
All such motor vehicles shall display a
sign on the rear reading, ‘‘This Vehicle
Stops at Railroad Crossings.’’
(3) Parts and accessories necessary
(Source: 49 CFR 398.5)—(i) Compliance.
Every person and its officers, agents,
drivers, representatives and employees
directly concerned with the installa-
tion and maintenance of equipment
and accessories shall comply and be
conversant with the requirements and
specifications of this part, and no person shall operate any motor vehicle, or
cause or permit it to be operated, unless it is equipped in accordance with
said requirements and specifications.
(ii) Lighting devices. Every motor vehicle shall be equipped with the lighting devices and reflectors required pursuant to 49 U.S.C. 3102 (c).
(iii) Brakes. Every motor vehicle
shall be equipped with brakes as required pursuant to 49 U.S.C. 3102 (c).
(iv) Coupling devices; fifth wheel
mounting and locking. The lower half of
every fifth wheel mounted on any
truck-tractor or dolly shall be securely
affixed to the frame thereof by U-bolts
of adequate size, securely tightened, or
by other means providing at least
equivalent security. Such U-bolts shall
not be of welded construction. The installation shall be such as not to cause
cracking, warping, or deformation of
the frame. Adequate means shall be
provided positively to prevent the
shifting of the lower half of a fifth
wheel on the frame to which it is attached. The upper half of every fifth
wheel shall be fastened to the motor
vehicle with at least the security required for the securing of the lower
half to a truck-tractor or dolly. Locking means shall be provided in every
fifth
wheel
mechanism
including
adapters when used, so that the upper
and lower halves may not be separated
without the operation of a positive
manual release. A release mechanism
operated by the driver from the cab
shall be deemed to meet this requirement. On fifth wheels designed and
constructed so as to be readily separable, the fifth wheel locking devices
shall apply automatically on coupling
for any motor vehicle the date of manufacture of which is subsequent to December 31, 1952.
(v) Tires. Every motor vehicle shall
be equipped with tires of adequate capacity to support its gross weight. No
motor vehicle shall be operated on
tires which have been worn so smooth
as to expose any tread fabric or which
have any other defect likely to cause
failure. No vehicle shall be operated
while transporting passengers while
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using any tire which does not have
tread configurations on that part of
the tire which is in contact with the
road surface. No vehicle transporting
passengers shall be operated with regrooved, re-capped, or re-treaded tires
on front wheels.
(vi) Passenger compartment. Every
motor vehicle transporting passengers,
other than a bus, shall have a passenger compartment meeting the following requirements:
(A) Floors. A substantially smooth
floor, without protruding obstructions
more than two inches high, except as
are necessary for securing seats or
other devices to the floor, and without
cracks or holes.
(B) Sides. Side walls and ends above
the floor at least 60 inches high, by attachment of sideboards to the permanent body construction if necessary.
Stake body construction shall be construed to comply with this requirement
only if all six-inch or larger spaces between stakes are suitably closed to prevent passengers from falling off the vehicle.
(C) Nails, screws, splinters. The floor
and the interior of the sides and ends of
the passenger-carrying space shall be
free of inwardly protruding nails,
screws, splinters, or other projecting
objects likely to be injurious to passengers or their apparel.
(D) Seats. A seat shall be provided for
each worker transported. The seats
shall be: Securely attached to the vehicle during the course of transportation;
not less than 16 inches nor more than
19 inches above the floor; at least 13
inches deep; equipped with backrests
extending to a height of at least 36
inches above the floor, with at least 24
inches of space between the backrests
or between the edges of the opposite
seats when face to face; designed to
provide at least 18 inches of seat for
each passenger; without cracks more
than two inches wide, and the exposed
surfaces, if made of wood, planed or
sanded smooth and free of splinters.
(E) Protection from weather. Whenever
necessary to protect the passengers
from inclement weather conditions, be
equipped with a top at least 80 inches
high above the floor and facilities for
closing the sides and ends of the passenger-carrying compartment. Tarpau-
lins or other such removable devices
for protection from the weather shall
be secured in place.
(F) Exit. Adequate means of ingress
and egress to and from the passenger
space shall be provided on the rear or
at the right side. Such means of ingress
and egress shall be at least 18 inches
wide. The top and the clear opening
shall be at least 60 inches high, or as
high as the side wall of the passenger
space if less than 60 inches. The bottom
shall be at the floor of the passenger
space.
(G) Gates and doors. Gates or doors
shall be provided to close the means of
ingress and egress and each such gate
or door shall be equipped with at least
one latch or other fastening device of
such construction as to keep the gate
or door securely closed during the
course of transportation; and readily
operative without the use of tools.
(H) Ladders or steps. Ladders or steps
for the purpose of ingress or egress
shall be used when necessary. The maximum vertical spacing of footholds
shall not exceed 12 inches, except that
the lowest step may be not more than
18 inches above the ground when the
vehicle is empty.
(I) Hand holds. Hand holds or devices
for similar purpose shall be provided to
permit ingress and egress without hazard to passengers.
(J) Emergency exit. Vehicles with permanently affixed roofs shall be
equipped with at least one emergency
exit having a gate or door, latch and
hand hold as prescribed in paragraphs
(b)(3)(vi) (G) and (I) of this section and
located on a side or rear not equipped
with the exit prescribed in paragraph
(b)(3)(vi)(F) of this section.
(K) Communication with driver. Means
shall be provided to enable the passengers to communicate with the driver. Such means may include telephone,
speaker tubes, buzzers, pull cords, or
other mechanical or electrical means.
(vii) Protection from cold. Every motor
vehicle shall be provided with a safe
means of protecting passengers from
cold or undue exposure, but in no event
shall heaters of the following types be
used:
(A) Exhaust heaters. Any type of exhaust heater in which the engine exhaust gases are conducted into or
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Wage and Hour Division, Labor
§ 500.121
through any space occupied by persons
or any heater which conducts engine
compartment air into any such space.
(B) Unenclosed flame heaters. Any type
of heater employing a flame which is
not fully enclosed.
(C) Heaters permitting fuel leakage.
Any type of heater from the burner of
which there could be spillage or leakage of fuel upon the tilting or overturning of the vehicle in which it is
mounted.
(D) Heaters permitting air contamination. Any heater taking air, heated or
to be heated, from the engine compartment or from direct contact with any
portion of the exhaust system; or any
heater taking air in ducts from the
outside atmosphere to be conveyed
through the engine compartment, unless said ducts are so constructed and
installed as to prevent contamination
of the air so conveyed by exhaust or
engine compartment gases.
(E) Any heater not securely fastened
to the vehicle.
(4) Hours of service of drivers; maximum
driving time (Source: 49 CFR 398.6). No
person shall drive nor shall any person
permit or require a driver employed or
used by it to drive or operate for more
than 10 hours in the aggregate (excluding rest stops and stops for meals) in
any period of 24 consecutive hours, unless such driver be afforded eight consecutive hours rest immediately following the 10 hours aggregate driving.
The term ‘‘24 consecutive hours’’ as
used in this part means any such period starting at the time the driver reports for duty.
(5) Inspection and maintenance of
motor vehicles (Source: 49 CFR 398.7).
Every person shall systematically inspect and maintain or cause to be systematically maintained, all motor vehicles and their accessories subject to
its control, to insure that such motor
vehicles and accessories are in safe and
proper operating condition.
INSURANCE
§ 500.120 Insurance policy or liability
bond is required for each vehicle
used to transport any migrant or
seasonal agricultural worker.
A farm labor contractor, agricultural
employer or agricultural association
shall not transport any migrant or seasonal agricultural worker or his property in any vehicle such contractor,
employer or association owns, operates, controls, or causes to be operated
unless he has an insurance policy or liability bond in effect which insures
against liability for damage to persons
or property arising from the ownership,
operation, or causing to be operated of
such vehicle. Generally, the owner or
lessor of the vehicle will be responsible
for providing the required insurance.
The insurance requirements do not
apply to vehicles involved in carpooling arrangements made by the
workers themselves, using one of the
workers’ own vehicles and not specifically directed or requested by an agricultural employer or agricultural association. However, carpooling does not
include any transportation arrangement in which a farm labor contractor
participates. Activities exempt from
transportation safety standards are
also exempt from insurance requirements. (See also § 500.103.)
§ 500.121 Coverage and level of insurance required.
(a) Except where a liability bond pursuant to § 500.124 of this part has been
approved by the Secretary, a farm
labor contractor, agricultural employer or agricultural association
shall, in order to meet the insurance
requirements in § 500.120, obtain a policy of vehicle liability insurance.
(b) The amount of vehicle liability
insurance shall not be less than $100,000
for each seat in the vehicle, but in no
event is the total insurance required to
be more than $5,000,000 for any one vehicle. The number of seats in the vehicle shall be determined by reference to
§ 500.105(b)(3)(vi). See § 500.122 regarding
insurance requirements where State
workers’ compensation coverage is provided.
(c) The insurance to be obtained
under paragraph (a) of this section
[48 FR 36741, Aug. 12, 1983; 48 FR 38380, Aug.
23, 1983]
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§ 500.122
29 CFR Ch. V (7–1–19 Edition)
shall be issued by an insurance carrier
licensed or otherwise authorized to do
business in the State in which the insurance is obtained.
(d) The vehicle liability insurance to
be obtained under paragraph (a) of this
section shall be endorsed to insure
against liability for personal injury to
employees whose transportation is not
covered by workers’ compensation insurance, and to persons who are not
employees; and for property damage as
specified in (b) of this section.
(e) An agricultural employer or agricultural association may evidence the
purchase of liability insurance which
covers the workers while being transported, as required under paragraph (a)
by obtaining and making available
upon request to the Department of
Labor a completed liability certificate
of insurance showing that insurance
conforming to the limits required by
paragraph (b) and the coverage required by paragraph (d) of this section
is in effect. A farm labor contractor
must obtain such a certificate and provide a copy to the Administrator when
applying for authorization to transport
migrant or seasonal agricultural workers.
(f) With respect to an agricultural
employer or agricultural association,
in the absence of the insurance certificate referred to under paragraph (e) of
this section, the Department of Labor
will look to the actual policy of insurance in determining compliance with
the insurance requirements.
ments relating to having an insurance
policy or liability bond apply:
(1) Except as provided in § 500.123, no
vehicle liability insurance policy or liability bond shall be required of the
employer, if such worker is transported
only under circumstances for which
there is coverage under such State law.
(2) A liability insurance policy or liability bond shall be required of the
employer for circumstances under
which coverage for the transportation
of such worker is not provided under
such State law.
(b) [Reserved]
(c) A farm labor contractor, agricultural employer or agricultural association who is the employer of a migrant
or seasonal agricultural worker may
evidence the issuance of workers’ compensation insurance and passenger insurance under paragraph (a) of this section by obtaining and making available
upon request to the Department of
Labor:
(1) A workers’ compensation coverage
policy of insurance; and
(2) A certificate of liability insurance
covering transportation of all passengers who are not employees and of
workers whose transportation by the
employer is not covered by workers’
compensation insurance. See § 500.121.
(d) In the absence of the insurance
certificate referred to under paragraph
(c)(2) of this section, the Department of
Labor will look to the actual policy of
insurance or liability bond in determining compliance with the Act and
these regulations.
[48 FR 36741, Aug. 12, 1983, as amended at 57
FR 3905, Jan. 31, 1992; 61 FR 24866, May 16,
1996]
[48 FR 36741, Aug. 12, 1983, as amended at 56
FR 30327, July 2, 1991; 61 FR 24866, May 16,
1996]
§ 500.122 Adjustments in insurance requirements when workers’ compensation coverage is provided
under State law.
§ 500.123 Property damage insurance
required.
(a) When a person who is an employer
of a migrant or seasonal agricultural
worker provides workers’ compensation insurance which protects such
worker in the event of bodily injury or
death while the worker is being transported, such person must also obtain
insurance providing a minimum of
$50,000 for loss or damage in any one
accident to the property of others (excluding cargo), or evidence of a general
liability insurance policy that provides
the same protection.
(a) If a farm labor contractor, agricultural employer or agricultural association referred to in § 500.120 is the employer of a migrant or seasonal agricultural worker for purposes of a State
workers’ compensation law and such
employer provides workers’ compensation coverage for such worker in the
case of bodily injury or death as provided by such State law, the following
adjustments in the insurance require-
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Wage and Hour Division, Labor
§ 500.127
(b) Such person may evidence the
purchase of motor carrier insurance or
other appropriate insurance providing
such property damage protection by
obtaining and making available upon
request to the Department of Labor a
vehicle or other liability certificate of
insurance showing that such person has
obtained the property damage insurance required under paragraph (a) of
this section.
(c) In the absence of the insurance
certificate referred to in paragraph (b)
of this section, the Department of
Labor will look to the actual policy of
insurance in determining compliance
with paragraph (a) of this section.
(a) Legally authorized to issue such
policies or bonds in the State in which
the transportation occurs; or
(b) Legally authorized to issue such
policies or bonds in the State in which
the farm labor contractor, agricultural
employer or agricultural association
has its principal place of business or
permanent residence and is willing to
designate a person upon whom process,
issued by or under the authority of any
court having jurisdiction of the subject
matter, may be served in any proceeding at law or equity brought in any
State in which the transportation occurs; or
(c) Legally authorized to issue such
policies or bonds in any State of the
United States and eligible as an excess
or surplus lines insurer in any State in
which business is written and is willing
to designate a person upon whom process, issued by or under the authority of
any court having jurisdiction of the
subject matter, may be served in any
proceeding at law or equity brought in
any State in which the transportation
occurs.
§ 500.124 Liability bond in lieu of insurance policy.
Financial responsibility in lieu of insurance may be evidenced by a liability
bond executed as the ‘‘principal’’ by
the person who will be transporting a
migrant or seasonal agricultural worker, together with a third party identified in the instrument as the ‘‘surety’’,
to assure payment of any liability up
to $500,000 for damages to persons or
property arising out of such person’s
ownership of, operation of, or causing
to be operated any vehicle for the
transportation of such worker in connection with the person’s business, activities, or operations. The ‘‘surety’’
shall be one which appears on the list
contained in Treasury Department Circular 570, or which has been approved
by the Secretary under the Employee
Retirement Income Security Act of
1974 (Pub. L. 93–406). Treasury Department Circular 570 may be obtained
from the U.S. Treasury Department,
Audit Staff, Bureau of Government Financial Operations, Washington, DC
20226.
§ 500.126 Duration of insurance or liability bond.
Any insurance policy or liability
bond which is obtained pursuant to the
Act shall provide the required coverage
for the full period during which the
person shall be engaged in transporting
any migrant or seasonal agricultural
worker within the meaning of the Act.
§ 500.127 Limitations on cancellation
of insurance or liability bond of
registered farm labor contractors.
Any insurance policy or liability
bond obtained by a farm labor contractor who is required to register with
the Department of Labor shall provide
that it shall not be cancelled, rescinded, or suspended, nor become void
for any reason whatsoever during such
period in which the insurance or liability bond is required by the Act to be effective, except upon the expiration of
the term for which it is written; or unless the parties desiring to cancel shall
have first given thirty (30) days notice
to the Administrator. The notice will
include a statement setting forth the
reason for cancellation, rescission, suspension, or any other termination of
§ 500.125 Qualifications and eligibility
of insurance carrier or surety.
A policy of insurance or liability
bond does not satisfy the financial responsibility of requirements of the Act
and these regulations unless the insurer or surety furnishing the policy or
bond to any farm labor contractor, agricultural employer or agricultural association is:
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§ 500.128
29 CFR Ch. V (7–1–19 Edition)
such policy or bond. The notice shall be
in writing and forwarded via certified
or registered mail, addressed to the Administrator of the Wage and Hour Division, U.S. Department of Labor, Washington, DC 20210. Said thirty (30) days
notice shall commence to run from the
date notice is actually received by the
Administrator.
the power or authority to oversee,
manage, superintend or administer the
housing facility or real property either
personally or through an authorized
agent or employee, irrespective of
whether compensation is paid for engaging in any of the aforesaid capacities.
(d) The Occupational Safety and
Health Administration (OSHA) is the
agency of the U.S. Department of
Labor which administers the Occupational Safety and Health Act (29 U.S.C.
651 et seq.) which provides for the establishment of safety and health standards generally.
(e) The Employment and Training
Administration (ETA) is the agency of
the U.S. Department of Labor which
administers the U.S. Employment
Service pursuant to the Wagner-Peyser
Act (29 U.S.C. 49 et seq.) including the
interstate clearance order system.
§ 500.128 Cancellation of insurance
policy or liability bond not relief
from insurance requirements.
Cancellation, rescission, suspension,
or any other termination of any insurance policy or liability bond required
by the Act does not relieve a person
who transports or causes to be transported any migrant or seasonal agricultural worker in any vehicle under
his ownership or control of the responsibility to comply with the insurance
requirements specified in §§ 500.121,
500.122 and 500.123.
§ 500.131 Exclusion from housing safety and health requirement.
HOUSING SAFETY AND HEALTH
§ 500.130 Application and scope
safety and health requirement.
The housing safety and health requirements do not apply to any person
who, in the ordinary course of that person’s business, regularly provides housing on a commercial basis to the general public and who provides housing to
any migrant agricultural worker of the
same character and on the same or
comparable terms and conditions as
provided to the general public. Migrant
labor housing shall not be brought
within this exception simply by offering lodging to the general public.
of
(a) Each person who owns or controls
a facility or real property which is used
as housing for any migrant agricultural worker must ensure that the facility or real property complies with
all substantive Federal and State safety and health standards applicable to
such housing. If more than one person
is involved in providing the housing for
any migrant agricultural worker (for
example, when an agricultural employer owns it and a farm labor contractor or any other person operates
it), both persons are responsible for ensuring that the facility or real property meets the applicable Federal and
State housing standards.
(b) A farm labor contractor, agricultural employer, agricultural association or any other person is deemed an
‘‘owner’’ of a housing facility or real
property if said person has a legal or
equitable interest in such facility or
real property.
(c) A farm labor contractor, agricultural employer, agricultural association or any other person is in ‘‘control’’
of a housing facility or real property,
regardless of the location of such facility, if said person is in charge of or has
§ 500.132 Applicable Federal standards: ETA and OSHA housing standards.
(a) The Secretary has determined
that the applicable Federal housing
standards are the standards promulgated by the Employment and Training
Administration, at 20 CFR 654.404 et
seq. and the standards promulgated by
the Occupational Safety and Health
Administration, at 29 CFR 1910.142. Except as provided in § 500.131, all migrant
housing is subject to either the ETA
standards or the OSHA standards, as
follows:
(1) A person who owns or controls a
facility or real property to be used for
housing any migrant agricultural
worker, the construction of which was
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Wage and Hour Division, Labor
§ 500.135
begun on or after April 3, 1980, and
which was not under a contract for
construction as of March 4, 1980, shall
comply with the substantive Federal
safety and health standards promulgated by OSHA at 29 CFR 1910.142.
These OSHA standards are enforceable
under MSPA, irrespective of whether
housing is, at any particular point in
time, subject to inspection under the
Occupational Safety and Health Act.
(2) A person who owns or controls a
facility or real property to be used for
housing any migrant agricultural
worker which was completed or under
construction prior to April 3, 1980, or
which was under a contract for construction prior to March 4, 1980, may
elect to comply with either the substantive Federal safety and health
standards promulgated by OSHA at 29
CFR 1910.142 or the standards promulgated by ETA at 20 CFR 654.404 et seq.
The ETA standards were established to
provide housing requirements for migrant housing used by an employer obtaining migrant workers through the
U.S. Employment Service. The owner
or operator of such housing may continue to rely on those standards, rather
than OSHA standards, even if the housing is not currently being provided pursuant to a USES job placement program.
ance with applicable substantive State
housing safety and health standards.
§ 500.135 Certificate of housing inspection.
(a) Except as provided in paragraph
(c) of this section, a facility or real
property to be used for housing a migrant agricultural worker shall not be
occupied by any migrant agricultural
worker unless either a State or local
health authority or other appropriate
agency, including a Federal agency,
has certified that the facility or real
property meets applicable safety and
health standards.
(b) Except as provided in paragraph
(c) of this section, the person who owns
or controls a facility or real property
shall not permit it to be occupied by
any migrant agricultural worker unless a copy of a certificate of occupancy from the State, local or Federal
agency which conducted the housing
safety and health inspection is posted
at the site of the facility or real property. The original of such certificate of
occupancy shall be retained by such
person for three years and made available for inspection in accordance with
section 512 of the Act.
(c) If a request for an inspection of a
facility or real property is made to the
appropriate State, local or Federal
agency at least forty-five (45) days
prior to the date on which it is to be
occupied by a migrant agricultural
worker but the agency has not conducted an inspection by such date, the
facility or property may be occupied by
migrant agricultural workers unless
prohibited by State law.
(d) Receipt and posting of a certificate of occupancy as provided under
paragraph (b) of this section, or the
failure of an agency to inspect a facility or property within the forty-five
(45) day time period, shall not relieve
the person who owns or controls a facility or property from the responsibility of ensuring that such facility or
property meets the applicable State
and Federal safety and health standards. Once such facility or property is
occupied, such person shall supervise
and continually maintain such facility
or property so as to ensure that it remains in compliance with the applicable safety and health standards.
§ 500.133 Substantive
Federal
and
State safety and health standards
defined.
Substantive safety and health standards include, but are not limited to,
those that provide fire prevention, an
adequate and sanitary supply of water,
plumbing maintenance, structurally
sound construction of buildings, effective maintenance of those buildings,
provision of adequate heat as weather
conditions require, and reasonable protections for inhabitants from insects
and rodents. Substantive housing
standards do not include technical or
procedural violations of safety and
health standards.
§ 500.134 Compliance with State standards.
Compliance with the substantive
Federal housing safety and health
standards shall not excuse noncompli-
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§ 500.140
29 CFR Ch. V (7–1–19 Edition)
Subpart E—Enforcement
§ 500.140
§ 500.141 Concurrent actions.
The taking of any one of the actions
referred to in § 500.140 shall not be a bar
to the concurrent taking of any other
action authorized by the Act and these
regulations.
General.
Whenever the Secretary believes that
the Act or these regulations have been
violated he shall take such action and
institute such proceedings as he deems
appropriate, including (but not limited
to) the following:
(a) Recommend to the Attorney General the institution of criminal proceedings against any person who willfully and knowingly violates the Act or
these regulations;
(b) Recommend to the Attorney General the institution of criminal proceedings against any farm labor contractor who recruits, hires, employs, or
uses, with knowledge, the services of
any illegal alien, as defined in
§ 500.20(n) of these regulations, if such
farm labor contractor has:
(1) Been refused issuance or renewal
of, or has failed to obtain, a Certificate
of Registration, or
(2) Is a farm labor contractor whose
certificate has been suspended or revoked;
(c) Petition any appropriate District
Court of the United States for temporary or permanent injunctive relief
to prohibit violation of the Act or
these regulations by any person;
(d) Assess a civil money penalty
against any person for any violation of
the Act or these regulations;
(e) Refer any unpaid civil money penalty which has become a final and
unappealable order of the Secretary or
a final judgment of a court in favor of
the Secretary to the Attorney General
for recovery;
(f) Revoke or suspend or refuse to
issue or renew any Certificate of Registration authorized by the Act or
these regulations;
(g) Deny the facilities and services
afforded by the Wagner-Peyser Act to
any farm labor contractor who refuses
or fails to produce, when asked, a valid
Certificate of Registration;
(h) Institute action in any appropriate United States District Court
against any person who, contrary to
the provisions of section 505(a) of the
Act, discriminates against any migrant
or seasonal agricultural worker.
§ 500.142 Representation of the Secretary.
(a) Except as provided in section
518(a) of title 28, U.S. Code, relating to
litigation before the Supreme Court,
the Solicitor of Labor may appear for
and represent the Secretary in any
civil litigation brought under the Act;
but all such litigation shall be subject
to the direction and control of the Attorney General.
(b) The Solicitor of Labor, through
the authorized representatives identified in § 500.231, shall represent the Secretary in all administrative hearings
under the Act and these regulations.
§ 500.143 Civil money penalty assessment.
(a) A civil money penalty may be assessed for each violation of the Act or
these regulations.
(b) In determining the amount of
penalty to be assessed for any violation
of the Act or these regulations the Secretary shall consider the type of violation committed and other relevant factors, including but not limited to the
following:
(1) Previous history of violation or
violations of this Act and the Farm
Labor Contractor Registration Act;
(2) The number of workers affected
by the violation or violations;
(3) The gravity of the violation or
violations;
(4) Efforts made in good faith to comply with the Act (such as when a joint
employer agricultural employer/association provides employment-related
benefits which comply with applicable
law to agricultural workers, or takes
reasonable measures to ensure farm
labor contractor compliance with legal
obligations);
(5) Explanation of person charged
with the violation or violations;
(6) Commitment to future compliance, taking into account the public
health, interest or safety, and whether
the person has previously violated the
Act;
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§ 500.156
(7) The extent to which the violator
achieved a financial gain due to the
violation, or the potential financial
loss or potential injury to the workers.
tive Law Judge on or after April 14,
1983, shall be the rules of practice provided in §§ 500.220 through 500.262 and
the official record shall be maintained
in accordance with §§ 500.270 and 500.271
of these regulations.
(d) The rules of practice for implementation of administrative enforcement for violations of FLCRA referred
to the Office of the Chief Administrative Law Judge prior to April 14, 1983
shall be the rules of practice provided
in 29 CFR 40.201 through 40.262.
[48 FR 36741, Aug. 12, 1983, as amended at 62
FR 11748, Mar. 12, 1997]
§ 500.144 Civil money penalties—payment and collection.
Where the assessment is directed in a
final order by the Secretary or in a
final judgment issued by a United
States District Court, the amount of
the penalty is immediately due and
payable to the United States Department of Labor. The person assessed
such penalty shall remit promptly the
amount thereof, as finally determined,
to the Secretary by certified check or
by money order, made payable to the
order of ‘‘Wage and Hour Division,
Labor.’’ The remittance shall be delivered or mailed either to the Administrator, in Washington, DC, or to the
Wage and Hour Division Regional Office for the area in which the violations
occurred.
§ 500.147 Continuation of matters involving violations of section 106 of
MSPA.
Any matter involving the revocation,
suspension, refusal to issue or to renew
a certificate of registration or any
matter involving the assessment of a
civil money penalty, for a violation of
section 106 of MSPA, which occurred
prior to June 1, 1987, shall continue
through final administrative determination in accordance with the provisions of MSPA and these regulations.
§ 500.145 Registration determinations.
Section 500.51 set forth the standards
under which the Secretary may refuse
to issue or to renew, or may suspend or
revoke, a Certificate of Registration
(including a Farm Labor Contractor
Employee Certificate of Registration).
[54 FR 13329, Mar. 31, 1989]
AGREEMENTS WITH FEDERAL AND STATE
AGENCIES
§ 500.155
Authority.
Section 513 of the Act authorizes the
Secretary to enter into agreements
with Federal and State agencies (a) to
use their facilities and services, (b) to
delegate (subject to subsection 513(b) of
the Act) to Federal and State agencies
such authority (other than rulemaking) as he determines may be useful in carrying out the purposes of the
Act, and (c) to allocate or transfer
funds to, or otherwise pay or reimburse, such agencies for expenses incurred pursuant to paragraphs (a) or
(b) of this section.
§ 500.146 Continuation of matters involving violations of FLCRA.
(a) Any matter involving the revocation, suspension, or refusal to renew a
Certification of Registration issued
under FLCRA and any matter involving the refusal to issue a certificate authorized under FLCRA shall continue
through final administrative determination in accordance with the provisions of FLCRA and the regulations
issued thereunder.
(b) Any matter involving the assessment of a civil money penalty for a
violation of FLCRA will continue
through final administrative determination in accordance with the provisions of FLCRA and the regulations
issued thereunder.
(c) The rules of practice for implementation of administrative enforcement for violations of FLCRA referred
to the Office of the Chief Administra-
§ 500.156 Scope of agreements
Federal agencies.
Every agreement between the Secretary and any other Federal agency
under the authority referred to in
§ 500.155 of this part shall contain terms
and conditions mutually agreeable to
both parties, and shall contain such
delegation of authority as the Secretary deems useful.
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§ 500.157
29 CFR Ch. V (7–1–19 Edition)
(4) The estimated cost of carrying
out such functions.
§ 500.157 Scope of agreements with
State agencies.
(a) Every agreement between the
Secretary and any State agency under
the authority referred to in § 500.155 of
this part shall be in writing.
(b) Any delegation to a State agency
by the Secretary under such authority
shall be made pursuant to approval of a
written State plan submitted in accordance with § 500.159 which shall: (1)
Include a description of each function
to be performed, the method of performing each such function, and the resources to be devoted to the performance of each such function, (2) provide
assurances satisfactory to the Secretary that the State agency will comply with its description under paragraph (b)(1) of this section and that the
State agency’s performance of the delegated functions will be at least comparable to the performance of such
functions by the Department of Labor;
and (3) contain a certification of the
Attorney General of such State, or, if
the Attorney General is not authorized
to make such a statement, the State
official who is so authorized, that an
agreement pursuant to such State plan
is valid under the laws of that State.
§ 500.160
Approved State plans.
(a) The Secretary, in accordance with
the authority referred to in § 500.155 of
this part, has delegated the following
functions to the States listed herein
below:
State
Function
Florida .................
Receive, handle, process applications
and issue certificates of registration.
Receive, handle, process applications
and issue certificates of registration.
Receive, handle, process applications
and issue certificates of registration.
New Jersey .........
Virginia ................
(b) Every State agreement entered
into pursuant to the authority referred
to in § 500.155 of this part shall be available for public inspection and copying
in accordance with 29 CFR part 70.
(c) Every enumerated delegated function shall be valid in all states.
[48 FR 36741, Aug. 12, 1983, as amended at 49
FR 5112, Feb. 10, 1984; 50 FR 42163, Oct. 18,
1985]
§ 500.161
Audits.
The Secretary shall conduct audits
as he deems necessary of the State
plans, but on not less than an annual
basis.
§ 500.158 Functions delegatable.
The Secretary may delegate to the
State such functions as he deems useful including the
(a) Receipt, handling and processing
of applications for certificates of registration;
(b) Issuance of certificates of registration;
(c) Conduct of various investigations;
and
(d) Enforcement of the Act.
§ 500.162
Reports.
The Secretary shall require such reports as he deems necessary of activities conducted pursuant to State plans,
but on not less than an annual basis.
CENTRAL PUBLIC REGISTRY
§ 500.170
§ 500.159 Submission of plan.
(a) Any State agency desiring to
enter into an agreement pursuant to
section 513 of the Act shall submit a
State plan in such form and in such detail as the Secretary shall direct.
(b) Each such plan shall include, at
least, the following:
(1) The delegation sought;
(2) The State authority for performing such delegated functions;
(3) A description of the manner in
which the State intends to carry out
such functions; and
Establishment of registry.
The Administrator shall establish a
central public registry of all persons
issued a Certificate of Registration or a
Farm Labor Contractor Employee Certificate. The central public registry
shall be available at the Regional Offices of the Wage and Hour Division
and its National Office in Washington,
DC. Information filed therein shall be
made available upon request. Requests
for information contained in the registry may also be directed by mail to
the Administrator, Wage and Hour Division. Attn: MSPA, U.S. Department
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Wage and Hour Division, Labor
§ 500.212
(1) In cases involving a determination
relating to a Certificate of Registration applied for by, or issued to, a farm
labor contractor, written notice shall
also be given to every applicant for or
holder of a Certificate of Registration
as an employee of such contractor.
(2) In cases involving a determination
relating to a Farm Labor Contractor
Employee Certificate of Registration,
written notice shall also be given to
the farm labor contractor of such applicant or certificate holder.
(b) Whenever the Secretary determines to assess a civil money penalty
for a violation of the Act or these regulations, the person against whom such
penalty is assessed shall be notified in
writing of such determination.
of Labor, Washington, DC 20210. Alternatively, requests for registry information may be made by telephone by calling 1–866–4US–WAGE (1–866–487–9243), a
toll-free number, during the hours of 8
a.m. to 5 p.m., in your time zone, Monday through Friday.
[67 FR 76986, Dec. 16, 2002]
Subpart F—Administrative
Proceedings
GENERAL
§ 500.200 Establishment of procedures
and rules of practice.
This subpart codifies and establishes
the procedures and rules of practice
necessary for the administrative enforcement of the Act.
§ 500.211
Contents of notice.
The notice required by § 500.210 shall:
(a) Set forth the determination of the
Secretary and the reason or reasons
therefor.
(b) Set forth, in the case of a civil
money penalty assessment:
(1) A description of each violation;
and
(2) The amount assessed for each violation.
(c) Set forth the right to request a
hearing on such determination.
(d) Inform any affected person or persons that in the absence of a timely request for a hearing, the determination
of the Secretary shall become final and
unappealable.
(e) Set forth the time and method for
requesting a hearing, and the procedures relating thereto, as set forth in
§ 500.212.
§ 500.201 Applicability of procedures
and rules.
(a) The procedures and rules contained herein prescribe the administrative process necessary for a determination:
(1) To suspend or revoke, or to refuse
to issue or renew, a Certificate of Registration authorized under the Act and
these regulations; and
(2) To impose an assessment of civil
money penalties for violations of the
Act or of these regulations.
(b) The procedures and rules contained herein also specify the administrative responsibility under section
102(5) of the Act with regard to a designation by a court of the Secretary as
an agent of an applicant for a certificate of registration in any action
against such applicant, if said applicant has left the jurisdiction in which
the action is commenced or otherwise
has become unavailable to accept service.
§ 500.212
Request for hearing.
(a) Any person desiring to request an
administrative hearing on a determination referred to in § 500.210 shall make
such request in writing to the official
who issued the determination, at the
Wage and Hour Division address appearing on the determination notice.
Such request must be made no later
than thirty (30) days after the date of
issuance of the notice referred to in
§ 500.210.
(b) The request for such hearing shall
be delivered in person or by mail to the
Wage and Hour Division office at the
PROCEDURES RELATING TO HEARING
§ 500.210 Written notice of determination required.
(a) Whenever the Secretary determines to suspend or revoke, or to
refuse to issue or renew, a Certificate
of Registration, the applicant for or
the holder of such certificate shall be
notified in writing of such determination.
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§ 500.215
29 CFR Ch. V (7–1–19 Edition)
address appearing on the determination notice upon which the request for
a hearing is based, within the time set
forth in paragraph (a) of this section.
For the affected person’s protection, if
the request is by mail, it should be by
certified mail.
(c) No particular form is prescribed
for any request for hearing permitted
by this part. However, any such request
shall:
(1) Be typewritten or legibly written
on size 81⁄2″ × 11″ paper;
(2) Specify the issue or issues stated
in the notice of determination giving
rise to such request;
(3) State the specific reason or reasons why the person requesting the
hearing believes such determination is
in error;
(4) Be signed by the person making
the request or by an authorized representative of such person; and
(5) Include the address at which such
person or authorized representative desires to receive further communications relating thereto.
(d) Civil money penalties under
FLCRA shall be treated as follows:
(1) Determinations to assess civil
money penalties for violations of
FLCRA made prior to April 14, 1983
shall continue until a final administrative determination shall have been
made in accordance with 29 CFR part
40.
(2) Determinations to assess civil
money penalties for violations of
FLCRA arising prior to April 14, 1983,
made on or after April 14, 1983, shall
continue until a final administrative
determination shall have been made in
accordance with these regulations.
(b) The notification required in paragraph (a) of this section shall be in
writing, by certified mail and addressed to the Administrator, Wage
and Hour Division, 200 Constitution
Avenue NW, Washington, DC 20210.
(c) Such change of address shall be
deemed effective upon receipt by the
Administrator, unless a later date is
specified in the notice.
[48 FR 36741, Aug. 12, 1983, as amended at 82
FR 2227, Jan. 9, 2017]
§ 500.216 Substituted service.
(a) Pursuant to section 102(5) of the
Act, the Secretary, when so designated
by a court, shall accept service of summons in any action arising under the
Act or these regulations against any
applicant for or any holder of a Certificate of Registration who has left the
jurisdiction in which such action is
commenced or otherwise has become
unavailable to accept such service.
(b) Acceptance of service of summons
referred to in paragraph (a) of this section shall be under such terms and conditions as are set by the court in its
designation of the Secretary for the
purpose of section 102(5) of the Act.
(c) To be effective, such service shall
be made by delivery personally or by
certified mail, either to the Administrator of the Wage and Hour Division
in Washington, DC, or to the Administrator’s authorized representative located in the area in which the action
has been commenced.
§ 500.217 Responsibility of Secretary
for service.
Upon receipt of any substituted service, as described in § 500.216, the same
shall be forwarded by certified mail to
the permanent address furnished by the
person for whom service is accepted
and to such other address as may be determined appropriate by the Secretary.
Such mailing shall complete the Secretary’s responsibility in connection
with the substituted service requirement of the Act.
[48 FR 36741, Aug. 12, 1983, as amended at 54
FR 13329, Mar. 31, 1989; 57 FR 5942, Feb. 18,
1992; 71 FR 16665, Apr. 3, 2006]
PROCEDURES RELATING TO SUBSTITUTED
SERVICE
§ 500.215
Change of address.
(a) Pursuant to section 105(1) of the
Act, every holder of a Certificate of
Registration shall notify the Secretary
within thirty (30) days of each change
of permanent place of residence. Said
persons may also furnish additional
mailing addresses.
RULES OF PRACTICE
§ 500.219 General.
Except as specifically provided in
these regulations, the ‘‘Rules of Practice and Procedure for Administrative
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Wage and Hour Division, Labor
§ 500.224
Hearings Before the Office of Administrative Law Judges’’ established by the
Secretary at 29 CFR part 18 shall apply
to administrative proceedings under
MSPA.
revoke Certificate of Registration’’
shall be designated as ‘‘R’’.
(2) Proceedings involving the ‘‘assessment of civil money penalties’’
shall be designated as ‘‘P’’.
(3) Proceedings involving both Certificate of Registration and assessment
of civil money penalties shall be designated as ‘‘R and P’’.
(b) The number, letter(s), and designation assigned to each such proceeding shall be clearly displayed on
each pleading, motion, brief, or other
formal document filed and docketed of
record.
(c) Each administrative proceeding
involving violations of FLCRA prior to
April 14, 1983 and filed with the Office
of the Chief Administrative Law Judge
on or after April 14, 1983, shall be identified of record by a number preceded
by the year and the letters ‘‘FLCRAMSPA’’ and followed by one or more of
the letter designations provided in
paragraphs (a)(1) through (a)(3) of this
section, i.e., (year) –FLCRA-MSPA–(#)–
(R and/or P).
[48 FR 36741, Aug. 21, 1983. Redesignated at 54
FR 13329, Mar. 31, 1989]
§ 500.220 Service of determinations
and computation of time.
(a) Service of determinations to suspend, revoke, refuse to issue, or refuse
to renew a certificate of registration or
to assess a civil money penalty shall be
made by personal service to the individual, officer of a corporation, or attorney of record or by mailing the determination to the last known address
of the individual, officer, or attorney.
If done by certified mail, service is
complete upon mailing. If done by regular mail or in person, service is complete upon receipt by the addressee or
the addressee’s representative;
(b) Time will be computed beginning
with the day following the action and
includes the last day of the period unless it is a Saturday, Sunday, or Federally observed holiday, in which case
the time period includes the next business day; and
(c) When a request for hearing is filed
by mail, five (5) days shall be added to
the prescribed period during which the
party has the right to request a hearing on the determination.
§ 500.223
In The Matter of ll, Respondent.
(b) For the purposes of such administrative proceeding the ‘‘Secretary of
Labor’’ shall be identified as plaintiff
and the person requesting such hearing
shall be named as respondent.
[54 FR 13329, Mar. 31, 1989]
§ 500.221 Commencement
ceeding.
of
pro-
Each administrative proceeding permitted under the Act and these regulations shall be commenced upon receipt
of a timely request for hearing filed in
accordance with § 500.212.
§ 500.222
Caption of proceeding.
(a) Each administrative proceeding
instituted under the Act and these regulations shall be captioned in the name
of the person requesting such hearing,
and shall be styled as follows:
REFERRAL FOR HEARING
§ 500.224 Referral
Law Judge.
to
Administrative
(a) Upon receipt of a timely request
for a hearing filed pursuant to and in
accordance with § 500.212, the Secretary, by the Associate Solicitor for
the Division of Fair Labor Standards
or by the Regional Solicitor for the Region in which the action arose, shall,
by Order of Reference, promptly refer
an authenticated copy of the notice of
administrative determination complained of, and the original or a duplicate copy of the request for hearing
signed by the person requesting such
Designation of record.
Except as provided in paragraph (c)
of this section:
(a) Each administrative proceeding
instituted under the Act and these regulations shall be identified of record by
a number preceded by the year and the
letters ‘‘MSPA’’ and followed by one or
more of the following designations:
(1) Proceedings involving the ‘‘refusal
to issue or to renew, or to suspend or to
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§ 500.225
29 CFR Ch. V (7–1–19 Edition)
hearing or by the authorized representative of such person, to the Chief Administrative Law Judge, for a determination in an administrative proceeding as provided herein. The notice
of administrative determination and
request for hearing shall be filed of
record in the Office of the Chief Administrative Law Judge and shall, respectively, be given the effect of a complaint and answer thereto for purposes
of the administrative proceeding, subject to any amendment that may be
permitted under these regulations.
(b) In cases involving a denial, suspension, or revocation of a Certificate
of Registration (Farm Labor Contractor Certificate; Farm Labor Contractor Employee Certificate) or ‘‘certificate action,’’ including those cases
where the farm labor contractor has requested a hearing on civil money penalty(ies) as well as on the certificate
action, the date of the hearing shall be
not more than sixty (60) days from the
date on which the Order of Reference is
filed. No request for postponement
shall be granted except for compelling
reasons.
(c) A copy of the Order of Reference,
together with a copy of these regulations, shall be served by counsel for the
Secretary upon the person requesting
the hearing, in the manner provided in
29 CFR 18.3.
PROCEDURES BEFORE ADMINISTRATIVE
LAW JUDGE
§ 500.231 Appearances; representation
of the Department of Labor.
The Associate Solicitor, Division of
Fair Labor Standards, and such other
counsel, as designated, shall represent
the Secretary in any proceeding under
these regulations.
§ 500.232
(a) General. At any time after the
commencement of a proceeding under
this part, but prior to the reception of
evidence in any such proceeding, a
party may move to defer the receipt of
any evidence for a reasonable time to
permit negotiation of an agreement
containing consent findings and an
order disposing of the whole or any
part of the proceeding. The allowance
of such deferment and the duration
thereof shall be at the discretion of the
Administrative Law Judge, after consideration of the nature of the proceeding, the requirements of the public
interest, the representations of the
parties, and the probability of an
agreement being reached which will result in a just disposition of the issues
involved.
(b) Content. Any agreement containing consent findings and an order
disposing of a proceeding or any part
thereof shall also provide:
(1) That the order shall have the
same force and effect as an order made
after full hearing;
(2) That the entire record on which
any order may be based shall consist
solely of the notice of administrative
determination (or amended notice, if
one is filed), and the agreement;
(3) A waiver of any further procedural steps before the Administrative
Law Judge; and
(4) A waiver of any right to challenge
or contest the validity of the findings
and order entered into in accordance
with the agreement.
(c) Submission. On or before the expiration of the time granted for negotiations, the parties or their authorized
representatives or their counsel may:
(1) Submit the proposed agreement
for consideration by the Administrative Law Judge; or
[48 FR 36741, Aug. 12, 1983, as amended at 61
FR 24866, May 16, 1996]
§ 500.225
Consent findings and order.
Notice of docketing.
The Chief Administrative Law Judge
shall promptly notify the parties of the
docketing of each matter.
§ 500.226 Service upon attorneys for
the Department of Labor—number
of copies.
Two copies of all pleadings and other
documents required for any administrative proceeding provided herein
shall be served on the attorneys for the
Department of Labor. One copy shall
be served on the Associate Solicitor,
Division of Fair Labor Standards, Office of the Solicitor, U.S. Department
of Labor, 200 Constitution Avenue,
NW., Washington, DC 20210, and one
copy on the Attorney representing the
Department in the proceeding.
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Wage and Hour Division, Labor
§ 500.263
(2) Inform the Administrative Law
Judge that agreement cannot be
reached.
(d) Disposition. In the event an agreement containing consent findings and
an order is submitted within the time
allowed therefor, the Administrative
Law Judge, within thirty (30) days
thereafter, shall, if satisfied with its
form and substance, accept such agreement by issuing a decision based upon
the agreed findings.
lations involving the refusal to issue or
renew a Certificate of Registration.
(e) The decision of the Administrative Law Judge shall include a statement of findings and conclusions, with
reasons and basis therefor, upon each
material issue presented on the record.
The decision shall also include an appropriate order which may be to affirm, deny, reverse, or modify, in whole
or in part, the determination of the
Secretary. The reason or reasons for
such order shall be stated in the decision.
(f) The Administrative Law Judge
shall transmit to the Chief Administrative Law Judge the entire record including the decision. The Chief Administrative Law Judge shall serve copies
of the decision on each of the parties.
(g) The decision when served shall
constitute the final order of the Secretary unless the Secretary, pursuant
to section 103(b)(2) or section 503(b)(2)
of the Act, modifies or vacates the decision and order of the Administrative
Law Judge.
(h) Except as provided in §§ 500.263
through 500.268, the administrative
remedies available to the parties under
the Act will be exhausted upon service
of the decision of the Administrative
Law Judge.
POST-HEARING PROCEDURES
§ 500.262 Decision and order of Administrative Law Judge.
(a) The Administrative Law Judge
shall prepare, as promptly as practicable after the expiration of the time
set for filing proposed findings and related papers a decision on the issues referred by the Secretary.
(b) In cases involving certificate actions as described in § 500.224(b), the
Administrative Law Judge shall issue a
decision within ninety (90) calendar
days after the close of the hearing.
(c) The decision of the Administrative Law Judge shall be limited to a determination whether the respondent
has violated the Act or these regulations, and the appropriateness of the
remedy or remedies imposed by the
Secretary. The Administrative Law
Judge shall not render determinations
on the legality of a regulatory provision or the constitutionality of a statutory provision.
(d) The decision of the Administrative Law Judge, for purposes of the
Equal Access to Justice Act (5 U.S.C.
504), shall be limited to determinations
of attorney fees and/or other litigation
expenses in adversary proceedings requested pursuant to § 500.212 which involve the modification, suspension or
revocation of a Certificate of Registration issued under the Act and these
Regulations, and/or the imposition of a
civil money penalty assessed for a violation of the Act or these Regulations.
The Administrative Law Judge shall
have no power or authority to award
attorney fees and/or other litigation
expenses pursuant to the provisions of
the Equal Access to Justice Act or
Regulations issued thereunder in any
proceeding under MSPA or these Regu-
[48 FR 36741, Aug. 12, 1983, as amended at 61
FR 24866, May 16, 1996]
MODIFICATION OR VACATION OF ORDER
OF ADMINISTRATIVE LAW JUDGE
§ 500.263
Authority of the Secretary.
The Secretary may modify or vacate
the Decision and Order of the Administrative Law Judge whenever he concludes that the Decision and Order:
(a) Is inconsistent with a policy or
precedent established by the Department of Labor,
(b) Encompasses determinations not
within the scope of the authority of the
Administrative Law Judge,
(c) Awards attorney fees and/or other
litigation expenses pursuant to the
Equal Access to Justice Act which are
unjustified or excessive, or
(d) Otherwise warrants modifying or
vacating.
[54 FR 13330, Mar. 31, 1989]
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§ 500.264
29 CFR Ch. V (7–1–19 Edition)
tive Law Judge, the Chief Administrative Law Judge shall, within fifteen
(15) days, index, certify and forward a
copy of the complete hearing record to
the Secretary.
§ 500.264 Procedures for initiating review.
(a) Within twenty (20) days after the
date of the decision of the Administrative Law Judge, the respondent, the
Administrator, or any other party desiring review thereof, may file with the
Secretary an original and two copies of
a petition for issuance of a Notice of
Intent as described under § 500.265. The
petition shall be in writing and shall
contain a concise and plain statement
specifying the grounds on which review
is sought. A copy of the Decision and
Order of the Administrative Law Judge
shall be attached to the petition.
(b) Copies of the petition shall be
served upon all parties to the proceeding and on the Chief Administrative Law Judge.
[48 FR 36741, Aug. 21, 1983. Redesignated at 54
FR 13330, Mar. 31, 1989]
§ 500.267
Filing and service.
(a) Filing. All documents submitted
to the Secretary shall be filed with the
Secretary of Labor, U.S. Department of
Labor, Washington, DC 20210.
(b) Number of copies. An original and
two copies of all documents shall be
filed.
(c) Computation of time for delivery by
mail. Documents are not deemed filed
with the Secretary until actually received by that office. All documents,
including documents filed by mail,
must be received by the Secretary either on or before the due date.
(d) Manner and proof of service. A copy
of all documents filed with the Secretary shall be served upon all other
parties involved in the proceeding.
Service under this section shall be by
personal delivery or by mail. Service
by mail is deemed effected at the time
of mailing to the last known address.
[54 FR 13330, Mar. 31, 1989]
§ 500.265 Implementation by the Secretary.
(a) Whenever, on the Secretary’s own
motion or upon acceptance of a party’s
petition, the Secretary believes that a
Decision and Order may warrant modifying or vacating, the Secretary shall
issue a Notice of Intent to modify or
vacate.
(b) The Notice of Intent to Modify or
Vacate a Decision and Order shall
specify the issue or issues to be considered, the form in which submission
shall be made (i.e., briefs, oral argument, etc.), and the time within which
such presentation shall be submitted.
The Secretary shall closely limit the
time within which the briefs must be
filed or oral presentations made, so as
to avoid unreasonable delay.
(c) The Notice of Intent shall be
issued within thirty (30) days after the
date of the Decision and Order in question.
(d) Service of the Notice of Intent
shall be made upon each party to the
proceeding, and upon the Chief Administrative Law Judge, in person or by
certified mail.
[54 FR 13330, Mar. 31, 1989]
§ 500.268 Final decision of the Secretary.
(a) The Secretary’s final Decision and
Order shall be issued within 120 days
from the notice of intent granting the
petition, except that in cases involving
the review of an Administrative Law
Judge decision in a certificate action
as described in § 500.224(b), the Secretary’s final decision shall be issued
within ninety (90) days from the date
such notice. The Secretary’s Decision
and Order shall be served upon all parties and the Chief Administrative Law
Judge, in person or by certified mail.
(b) Upon receipt of an Order of the
Secretary modifying or vacating the
Decision and Order of an Administrative Law Judge, the Chief Administrative Law Judge shall substitute such
Order for the Decision and Order of the
Administrative Law Judge.
[54 FR 13330, Mar. 31, 1989]
§ 500.266 Responsibility of the Office
of Administrative Law Judges.
Upon receipt of the Secretary’s Notice of Intent to Modify or Vacate a
Decision and Order of an Administra-
[54 FR 13330, Mar. 31, 1989, as amended at 61
FR 24866, May 16, 1996]
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Wage and Hour Division, Labor
Pt. 501
PART
501—ENFORCEMENT
OF
CONTRACTUAL
OBLIGATIONS
FOR TEMPORARY ALIEN AGRICULTURAL WORKERS ADMITTED
UNDER SECTION 218 OF THE IMMIGRATION AND NATIONALITY
ACT
§ 500.269 Stay pending decision of the
Secretary.
(a) The filing of a petition seeking review by the Secretary of a Decision and
Order of an Administrative Law Judge,
pursuant to § 500.264, does not stop the
running of the thirty-day time limit in
which respondent may file an appeal to
obtain a review in the United States
District Court of an administrative
order, as provided in section 103(b)(2) or
section 503(b)(2) of the Act, unless the
Secretary issues a Notice of Intent pursuant to § 500.265.
(b) In the event a respondent has
filed a notice of appeal of the Administrative Law Judge’s Decision and Order
in a United States District Court and
the Secretary issues a Notice of Intent,
the Secretary will seek a stay of proceedings in the Court until such time
as the Secretary issues the final decision, as provided in § 500.268.
(c) Where the Secretary has issued a
Notice of Intent, the time for filing an
appeal under sections 103(b)(2) or
503(b)(2) of the Act shall commence
from the date of the issuance of the
Secretary’s final decision, as provided
in § 500.268.
Subpart A—General Provisions
Sec.
501.0 Introduction.
501.1 Purpose and scope.
501.2 Coordination between Federal agencies.
501.3 Definitions.
501.4 Discrimination prohibited.
501.5 Waiver of rights prohibited.
501.6 Investigation authority of Secretary.
501.7 Cooperation with Federal officials.
501.8 Accuracy of information, statements,
data.
501.9 Surety bond.
Subpart B—Enforcement
501.15 Enforcement.
501.16 Sanctions and remedies—general.
501.17 Concurrent actions.
501.18 Representation of the Secretary.
501.19 Civil money penalty assessment.
501.20 Debarment and revocation.
501.21 Failure to cooperate with investigations.
501.22 Civil money penalties—payment and
collection.
[54 FR 13330, Mar. 31, 1989]
RECORD
§ 500.270
Subpart C—Administrative Proceedings
Retention of official record.
501.30
The official record of every completed administrative hearing provided
by these regulations shall be maintained and filed under the custody and
control of the Chief Administrative
Law Judge.
§ 500.271 Certification
record.
of
Applicability of procedures and rules.
PROCEDURES RELATING TO HEARING
501.31 Written notice of determination required.
501.32 Contents of notice.
501.33 Request for hearing.
RULES OF PRACTICE
official
501.34 General.
501.35 Commencement of proceeding.
501.36 Caption of proceeding.
Upon receipt of timely notice of appeal to a United States District Court
pursuant to section 103(c) or 503(c) of
the Act, the Chief Administrative Law
Judge shall promptly certify and file
with the appropriate United States
District Court, a full, true, and correct
copy of the entire record, including the
transcript of proceedings.
REFERRAL FOR HEARING
501.37 Referral to Administrative Law
Judge.
501.38 Notice of docketing.
501.39 Service upon attorneys for the Department of Labor—number of copies.
PROCEDURES BEFORE ADMINISTRATIVE LAW
JUDGE
501.40
Consent findings and order.
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§ 501.0
29 CFR Ch. V (7–1–19 Edition)
POST-HEARING PROCEDURES
(ii) The employment of the alien in
such labor or services will not adversely affect the wages and working
conditions of workers in the U.S. similarly employed.
(2) The Secretary is authorized to
take actions that assure compliance
with the terms and conditions of employment under 8 U.S.C. 1188, the regulations at 20 CFR part 655, subpart B,
or the regulations in this part, including imposing appropriate penalties, and
seeking injunctive relief and specific
performance of contractual obligations. See 8 U.S.C. 1188(g)(2).
(b) Role of the Employment and Training Administration (ETA). The issuance
and denial of labor certification under
8 U.S.C. 1188 has been delegated by the
Secretary to ETA, an agency within
the U.S. Department of Labor (the Department or DOL), who in turn has delegated that authority to the Office of
Foreign Labor Certification (OFLC). In
general, matters concerning the obligations of an employer of H–2A workers
related to the labor certification process are administered by OFLC, including obligations and assurances made by
employers, overseeing employer recruitment and assuring program integrity. The regulations pertaining to the
issuance, denial, and revocation of
labor certification for temporary foreign workers by the OFLC are found in
20 CFR part 655, subpart B.
(c) Role of the Wage and Hour Division
(WHD). Certain investigatory, inspection, and law enforcement functions to
carry out the provisions under 8 U.S.C.
1188 have been delegated by the Secretary to the WHD. In general, matters
concerning the obligations under a
work contract between an employer of
H–2A workers and the H–2A workers
and workers in corresponding employment are enforced by WHD, including
whether employment was offered to
U.S. workers as required under 8 U.S.C.
1188 or 20 CFR part 655, subpart B, or
whether U.S. workers were laid off or
displaced in violation of program requirements. Included within the enforcement responsibility of WHD are
such matters as the payment of required wages, transportation, meals,
501.41 Decision and order of Administrative
Law Judge.
REVIEW OF ADMINISTRATIVE LAW JUDGE’S
DECISION
501.42 Procedures for initiating and undertaking review.
501.43 Responsibility of the Office of Administrative Law Judges (OALJ).
501.44 Additional information, if required.
501.45 Final decision of the Administrative
Review Board.
RECORD
501.46 Retention of official record.
501.47 Certification.
AUTHORITY: 8 U.S.C. 1101(a)(15)(H)(ii)(a),
1184(c), and 1188; 28 U.S.C. 2461 Note (Federal
Civil Penalties Inflation Adjustment Act of
1990); and Pub. L. 114–74 at § 701.
SOURCE: 75 FR 6978, Feb. 12, 2010, unless
otherwise noted.
Subpart A—General Provisions
§ 501.0 Introduction.
The regulations in this part cover the
enforcement of all contractual obligations, including requirements under 8
U.S.C. 1188 and 20 CFR part 655, subpart
B applicable to the employment of H–
2A workers and workers in corresponding employment, including obligations to offer employment to eligible United States (U.S.) workers and to
not lay off or displace U.S. workers in
a manner prohibited by the regulations
in this part or 20 CFR part 655, subpart
B.
§ 501.1 Purpose and scope.
(a) Statutory standards. 8 U.S.C. 1188
provides that:
(1) A petition to import an alien as
an H–2A worker (as defined at 8 U.S.C.
1188) may not be approved by the Secretary of the Department of Homeland
Security (DHS) unless the petitioner
has applied for and received a temporary labor certification from the
U.S. Secretary of Labor (Secretary).
The temporary labor certification establishes that:
(i) There are not sufficient workers
who are able, willing, and qualified,
and who will be available at the time
and place needed, to perform the labor
or services involved in the petition,
and
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Wage and Hour Division, Labor
§ 501.3
Adverse effect wage rate (AEWR). The
annual weighted average hourly wage
for field and livestock workers (combined) in the States or regions as published annually by the U.S. Department of Agriculture (USDA) based on
its quarterly wage survey.
Agent. A legal entity or person, such
as an association of agricultural employers, or an attorney for an association, that:
(1) Is authorized to act on behalf of
the employer for temporary agricultural labor certification purposes;
(2) Is not itself an employer, or a
joint employer, as defined in this section with respect to a specific Application for Temporary Employment Certification; and
(3) Is not under suspension, debarment, expulsion, or disbarment from
practice before any court, the Department, the Executive Office for Immigration Review, or DHS under 8 CFR
292.3 or 1003.101.
Agricultural association. Any nonprofit or cooperative association of
farmers, growers, or ranchers (including but not limited to processing establishments, canneries, gins, packing
sheds, nurseries, or other similar fixedsite agricultural employers), incorporated or qualified under applicable
State law, that recruits, solicits, hires,
employs, furnishes, houses, or transports any worker that is subject to 8
U.S.C. 1188, 20 CFR part 655, subpart B,
or this part. An agricultural association may act as the agent of an employer, or may act as the sole or joint
employer of any worker subject to 8
U.S.C. 1188.
Area of intended employment. The geographic area within normal commuting
distance of the place of the job opportunity for which the certification is
sought. There is no rigid measure of
distance that constitutes a normal
commuting distance or normal commuting area, because there may be
widely varying factual circumstances
among different areas (e.g., average
commuting times, barriers to reaching
the worksite, or quality of the regional
transportation network). If the place of
intended employment is within a Metropolitan Statistical Area (MSA), including a multistate MSA, any place
within the MSA is deemed to be within
and housing provided during the employment. The WHD has the responsibility to carry out investigations, inspections, and law enforcement functions and in appropriate instances to
impose penalties, to debar from future
certifications, to recommend revocation of existing certification(s), and to
seek injunctive relief and specific performance of contractual obligations,
including recovery of unpaid wages and
reinstatement of laid off or displaced
U.S. workers.
(d) Effect of regulations. The enforcement functions carried out by the WHD
under 8 U.S.C. 1188, 20 CFR part 655,
subpart B, and the regulations in this
part apply to the employment of any
H–2A worker and any other worker in
corresponding employment as the result of any Application for Temporary
Employment Certification filed with the
Department on and after March 15,
2010.
§ 501.2 Coordination between Federal
agencies.
(a) Complaints received by ETA or
any State Workforce Agency (SWA) regarding contractual H–2A labor standards between the employer and the employee will be immediately forwarded
to the appropriate WHD office for appropriate action under the regulations
in this part.
(b) Information received in the
course of processing applications, program integrity measures, or enforcement actions may be shared between
OFLC and WHD or, where applicable to
employer enforcement under the H–2A
program, other agencies as appropriate, including the Department of
State (DOS) and DHS.
(c) A specific violation for which debarment is imposed will be cited in a
single debarment proceeding. OFLC
and the WHD may coordinate their activities to achieve this result. Copies of
final debarment decisions will be forwarded to the DHS promptly.
§ 501.3 Definitions.
(a) Definitions of terms used in this
part.
Administrative Law Judge (ALJ). A person within the Department’s Office of
Administrative Law Judges appointed
pursuant to 5 U.S.C. 3105.
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§ 501.3
29 CFR Ch. V (7–1–19 Edition)
Certification, a valid Federal Employer
Identification Number (FEIN).
Federal holiday. Legal public holiday
as defined at 5 U.S.C. 6103.
Fixed-site employer. Any person engaged in agriculture who meets the definition of an employer, as those terms
are defined in this part, who owns or
operates a farm, ranch, processing establishment, cannery, gin, packing
shed, nursery, or other similar fixedsite location where agricultural activities are performed and who recruits,
solicits, hires, employs, houses, or
transports any worker subject to 8
U.S.C. 1188, 20 CFR part 655, subpart B
or this part, as incident to or in conjunction with the owner’s or operator’s
own agricultural operation.
H–2A Labor Contractor (H–2ALC). Any
person who meets the definition of employer under this part and is not a
fixed-site employer, an agricultural association, or an employee of a fixedsite employer or agricultural association, as those terms are used in this
part, who recruits, solicits, hires, employs, furnishes, houses, or transports
any worker subject to 8 U.S.C. 1188, 20
CFR part 655, subpart B or this part.
H–2A worker. Any temporary foreign
worker who is lawfully present in the
U.S. and authorized by DHS to perform
agricultural labor or services of a temporary or seasonal nature pursuant to 8
U.S.C. 1101(a)(15)(H)(ii)(a).
Job offer. The offer made by an employer or potential employer of H–2A
workers to both U.S. and H–2A workers
describing all the material terms and
conditions of employment, including
those relating to wages, working conditions, and other benefits.
Job opportunity. Full-time employment at a place in the U.S. to which
U.S. workers can be referred.
Job order. The document containing
the material terms and conditions of
employment that is posted by the SWA
on its inter- and intra-state job clearance systems based on the employer’s
Form ETA–790, as submitted to the
SWA.
Joint employment. Where two or more
employers each have sufficient definitional indicia of an employer to be considered the employer of a worker, those
employers will be considered to jointly
employ that worker. Each employer in
normal commuting distance of the
place of intended employment. The
borders of MSAs are not controlling in
the identification of the normal commuting area; a location outside of an
MSA may be within normal commuting
distance of a location that is inside
(e.g., near the border of) the MSA.
Corresponding employment. The employment of workers who are not H–2A
workers by an employer who has an approved H–2A Application for Temporary
Employment Certification in any work
included in the job order, or in any agricultural work performed by the H–2A
workers. To qualify as corresponding
employment the work must be performed during the validity period of
the job order, including any approved
extension thereof.
Date of need. The first date the employer requires the services of H–2A
workers as indicated in the Application
for Temporary Employment Certification.
Employee. A person who is engaged to
perform work for an employer, as defined under the general common law of
agency. Some of the factors relevant to
the determination of employee status
include: The hiring party’s right to
control the manner and means by
which the work is accomplished; the
skill required to perform the work; the
source of the instrumentalities and
tools for accomplishing the work; the
location of the work; the hiring party’s
discretion over when and how long to
work; and whether the work is part of
the regular business of the hiring
party. Other applicable factors may be
considered and no one factor is dispositive.
Employer. A person (including any individual, partnership, association, corporation, cooperative, firm, joint stock
company, trust, or other organization
with legal rights and duties) that:
(1) Has a place of business (physical
location) in the U.S. and a means by
which it may be contacted for employment;
(2) Has an employer relationship
(such as the ability to hire, pay, fire,
supervise or otherwise control the
work of employee) with respect to an
H–2A worker or a worker in corresponding employment; and
(3) Possesses, for purposes of filing an
Application for Temporary Employment
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Wage and Hour Division, Labor
§ 501.3
a joint employment relationship to a
worker is considered a joint employer
of that worker.
Prevailing wage. Wage established
pursuant to 20 CFR 653.501(d)(4).
State Workforce Agency (SWA). State
government agency that receives funds
pursuant to the Wagner-Peyser Act (29
U.S.C. 49 et seq.) to administer the
State’s public labor exchange activities.
Successor in interest. Where an employer has violated 8 U.S.C. 1188, 20
CFR part 655, subpart B, or the regulations in this part, and has ceased doing
business or cannot be located for purposes of enforcement, a successor in interest to that employer may be held
liable for the duties and obligations of
the violating employer in certain circumstances. The following factors, as
used under Title VII of the Civil Rights
Act and the Vietnam Era Veterans’ Readjustment Assistance Act, may be
considered in determining whether an
employer is a successor in interest; no
one factor is dispositive, but all of the
circumstances will be considered as a
whole:
(1) Substantial continuity of the
same business operations;
(2) Use of the same facilities;
(3) Continuity of the work force;
(4) Similarity of jobs and working
conditions;
(5) Similarity of supervisory personnel;
(6) Whether the former management
or owner retains a direct or indirect interest in the new enterprise;
(7) Similarity in machinery, equipment, and production methods;
(8) Similarity of products and services; and
(9) The ability of the predecessor to
provide relief.
For purposes of debarment only, the
primary consideration will be the personal involvement of the firm’s ownership, management, supervisors, and
others associated with the firm in the
violations at issue.
Temporary agricultural labor certification. Certification made by the OFLC
Administrator with respect to an employer seeking to file with DHS a visa
petition to employ one or more foreign
nationals as an H–2A worker, pursuant
to 8 U.S.C. 1101(a)(15)(H)(ii)(a), 1184(a)
and (c), and 1188.
United States (U.S.). The continental
U.S., Alaska, Hawaii, the Commonwealth of Puerto Rico, and the territories of Guam, the Virgin Islands, and
the Commonwealth of the Northern
Mariana Islands (CNMI).
United States worker (U.S. worker). A
worker who is:
(1) A citizen or national of the U.S.;
or
(2) An alien who is lawfully admitted
for permanent residence in the U.S., is
admitted as a refugee under 8 U.S.C.
1157, is granted asylum under 8 U.S.C.
1158, or is an immigrant otherwise authorized (by the Immigration and Nationality Act (INA) or by DHS) to be
employed in the U.S.; or
(3) An individual who is not an unauthorized alien (as defined in 8 U.S.C.
1324a(h)(3)) with respect to the employment in which the worker is engaging.
Wages. All forms of cash remuneration to a worker by an employer in
payment for personal services.
WHD Administrator. The Administrator of the Wage and Hour Division
(WHD), and such authorized representatives as may be designated to perform
any of the functions of the WHD Administrator under this part.
Work contract. All the material terms
and conditions of employment relating
to wages, hours, working conditions,
and other benefits, including those required by 8 U.S.C. 1188, 20 CFR part 655,
subpart B, or this part. The contract
between the employer and the worker
may be in the form of a separate written document. In the absence of a separate written work contract incorporating the required terms and conditions of employment, agreed to by both
the employer and the worker, the work
contract at a minimum will be the
terms of the job order and any obligations required under 8 U.S.C. 1188, 20
CFR part 655, subpart B or this part.
(b) Definition of agricultural labor or
services. For the purposes of this part,
agricultural labor or services, pursuant
to 8 U.S.C. 1101(a)(15)(H)(ii)(a), is defined as: agricultural labor as defined
and applied in sec. 3121(g) of the Internal Revenue Code of 1986 at 26 U.S.C.
3121(g); agriculture as defined and applied in sec. 3(f) of the Fair Labor
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§ 501.3
29 CFR Ch. V (7–1–19 Edition)
Standards Act of 1938 (FLSA) at 29
U.S.C. 203(f); the pressing of apples for
cider on a farm; or logging employment. An occupation included in either
statutory definition shall be agricultural labor or services, notwithstanding the exclusion of that occupation from the other statutory definition. For informational purposes, the
statutory provisions are listed below.
(1) (i) Agricultural labor for the purpose of paragraph (b) of this section
means all service performed:
(A) On a farm, in the employ of any
person, in connection with cultivating
the soil, or in connection with raising
or harvesting any agricultural or horticultural commodity, including the
raising, shearing, feeding, caring for,
training, and management of livestock,
bees, poultry, and fur-bearing animals
and wildlife;
(B) In the employ of the owner or
tenant or other operator of a farm, in
connection with the operation, management, conservation, improvement,
or maintenance of such farm and its
tools and equipment, or in salvaging
timber or clearing land of brush and
other debris left by a hurricane, if the
major part of such service is performed
on a farm;
(C) In connection with the production
or harvesting of any commodity defined as an agricultural commodity in
section 15(g) of the Agricultural Marketing Act, as amended (12 U.S.C.
1141j), or in connection with the ginning of cotton, or in connection with
the operation or maintenance of
ditches, canals, reservoirs, or waterways, not owned or operated for profit,
used exclusively for supplying and storing water for farming purposes;
(D) In the employ of the operator of
a farm in handling, planting, drying,
packing, packaging, processing, freezing, grading, storing, or delivering to
storage or to market or to a carrier for
transportation to market, in its unmanufactured state, any agricultural
or horticultural commodity; but only if
such operator produced more than onehalf of the commodity with respect to
which such service is performed;
(E) In the employ of a group of operators of farms (other than a cooperative
organization) in the performance of
service described in paragraph (b)(1)(iv)
but only if such operators produced all
of the commodity with respect to
which such service is performed. For
purposes of this paragraph, any unincorporated group of operators shall be
deemed a cooperative organization if
the number of operators comprising
such group is more than 20 at any time
during the calendar year in which such
service is performed;
(F) The provisions of paragraphs
(b)(1)(iv) and (b)(1)(v) of this section
shall not be deemed to be applicable
with respect to service performed in
connection with commercial canning
or commercial freezing or in connection with any agricultural or horticultural commodity after its delivery
to a terminal market for distribution
for consumption; or
(G) On a farm operated for profit if
such service is not in the course of the
employer’s trade or business or is domestic service in a private home of the
employer.
(ii) As used in this section, the term
farm includes stock, dairy, poultry,
fruit, fur-bearing animal, and truck
farms, plantations, ranches, nurseries,
ranges, greenhouses or other similar
structures used primarily for the raising of agricultural or horticultural
commodities, and orchards.
(2) Agriculture. For purposes of paragraph (b) of this section, agriculture
means farming in all its branches and
among other things includes the cultivation and tillage of the soil, dairying, the production, cultivation, growing, and harvesting of any agricultural
or horticultural commodities (including commodities defined as agricultural commodities in 1141j(g) of title
12, the raising of livestock, bees, furbearing animals, or poultry, and any
practices (including any forestry or
lumbering operations) performed by a
farmer or on a farm as an incident to
or in conjunction with such farming
operations, including preparation for
market, delivery to storage or to market or to carriers for transportation to
market. See sec. 29 U.S.C. 203(f), as
amended (sec. 3(f) of the FLSA, as codified). Under 12 U.S.C. 1141j(g) agricultural commodities include, in addition
to other agricultural commodities,
crude gum (oleoresin) from a living
tree, and the following products as
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Wage and Hour Division, Labor
§ 501.5
(4) Consulted with an employee of a
legal assistance program or an attorney on matters related to 8 U.S.C. 1188,
or to this subpart or any other Department regulation promulgated pursuant
to 8 U.S.C. 1188; or
(5) Exercised or asserted on behalf of
himself or others any right or protection afforded by 8 U.S.C. 1188 or the
regulations in this part.
(b) Allegations of discrimination
against any person under paragraph (a)
of this section will be investigated by
the WHD. Where the WHD has determined through investigation that such
allegations have been substantiated,
appropriate remedies may be sought.
The WHD may assess civil money penalties, seek injunctive relief, and/or
seek additional remedies necessary to
make the employee whole as a result of
the discrimination, as appropriate, initiate debarment proceedings, and recommend to OFLC revocation of any
such violator’s current labor certification. Complaints alleging discrimination against workers or immigrants
based on citizenship or immigration
status may also be forwarded by the
WHD to the Department of Justice,
Civil Rights Division, Office of Special
Counsel for Immigration-Related Unfair Employment Practices.
processed by the original producer of
the crude gum (oleoresin) from which
derived: Gum spirits of turpentine and
gum rosin. In addition as defined in 7
U.S.C. 92, gum spirits of turpentine
means spirits of turpentine made from
gum (oleoresin) from a living tree and
gum rosin means rosin remaining after
the distillation of gum spirits of turpentine.
(3) Apple pressing for cider. The pressing of apples for cider on a farm, as the
term farm is defined and applied in sec.
3121(g) of the Internal Revenue Code at
26 U.S.C. 3121(g) or as applied in sec.
3(f) of FLSA at 29 U.S.C. 203(f), pursuant to 29 CFR part 780.
(4) Logging employment. Operations
associated with felling and moving
trees and logs from the stump to the
point of delivery, such as, but not limited to, marking danger trees and
trees/logs to be cut to length, felling,
limbing, bucking, debarking, chipping,
yarding, loading, unloading, storing,
and transporting machines, equipment
and personnel to, from and between
logging sites.
(c) Definition of a temporary or seasonal nature. For the purposes of this
part, employment is of a seasonal nature where it is tied to a certain time
of year by an event or pattern, such as
a short annual growing cycle or a specific aspect of a longer cycle, and requires labor levels far above those necessary for ongoing operations. Employment is of a temporary nature where
the employer’s need to fill the position
with a temporary worker will, except
in extraordinary circumstances, last no
longer than 1 year.
§ 501.5
Waiver of rights prohibited.
A person may not seek to have an H–
2A worker, a worker in corresponding
employment, or a U.S. worker improperly rejected for employment or improperly laid off or displaced waive any
rights conferred under 8 U.S.C. 1188, 20
CFR part 655, subpart B, or the regulations in these parts. Any agreement by
an employee purporting to waive or
modify any rights given to said person
under these provisions shall be void as
contrary to public policy except as follows:
(a) Waivers or modifications of rights
or obligations hereunder in favor of the
Secretary shall be valid for purposes of
enforcement; and
(b) Agreements in settlement of private litigation are permitted.
§ 501.4 Discrimination prohibited.
(a) A person may not intimidate,
threaten, restrain, coerce, blacklist,
discharge, or in any manner discriminate against any person who has:
(1) Filed a complaint under or related
to 8 U.S.C. 1188 or the regulations in
this part;
(2) Instituted or caused to be instituted any proceedings related to 8
U.S.C. 1188 or the regulations in this
part;
(3) Testified or is about to testify in
any proceeding under or related to 8
U.S.C. 1188 or the regulations in this
part;
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§ 501.6
29 CFR Ch. V (7–1–19 Edition)
§ 501.6 Investigation authority of Secretary.
(a) General. The Secretary, through
the WHD, may investigate to determine compliance with obligations
under 8 U.S.C. 1188, 20 CFR part 655,
subpart B, or the regulations in this
part, either pursuant to a complaint or
otherwise, as may be appropriate. In
connection with such an investigation,
WHD may enter and inspect any premises, land, property, housing, vehicles,
and records (and make transcriptions
thereof), question any person and gather any information as may be appropriate.
(b) Confidential investigation. The
WHD shall conduct investigations in a
manner that protects the confidentiality of any complainant or other
person who provides information to the
Secretary in good faith.
(c) Report of violations. Any person
may report a violation of the obligations imposed by 8 U.S.C. 1188, 20 CFR
part 655, subpart B, or the regulations
in this part to the Secretary by advising any local office of the SWA, ETA,
WHD or any other authorized representative of the Secretary. The office
or person receiving such a report shall
refer it to the appropriate office of
WHD for the geographic area in which
the reported violation is alleged to
have occurred.
§ 501.8 Accuracy of information, statements, data.
Information, statements and data
submitted in compliance with 8 U.S.C.
1188 or the regulations in this part are
subject to 18 U.S.C. 1001, which provides, with regard to statements or entries generally, that whoever, in any
matter within the jurisdiction of any
department or agency of the U.S.,
knowingly and willfully falsifies, conceals, or covers up a material fact by
any trick, scheme, or device, or makes
any false, fictitious, or fraudulent
statements or representations, or
makes or uses any false writing or document knowing the same to contain
any false, fictitious, or fraudulent
statement or entry, shall be fined not
more than $10,000 or imprisoned not
more than 5 years, or both.
§ 501.9 Surety bond.
(a) Every H–2ALC must obtain a surety bond demonstrating its ability to
discharge financial obligations under
the H–2A program. The original bond
instrument issued by the surety must
be submitted with the Application for
Temporary Employment Certification. At
a minimum, the bond instrument must
identify the name, address, phone number, and contact person for the surety,
and specify the amount of the bond (as
required in paragraph (c) of this section), the date of issuance and expiration and any identifying designation
used by the surety for the bond.
(b) The bond must be payable to the
Administrator, Wage and Hour Division, United States Department of
Labor, 200 Constitution Avenue, NW.,
Room S–3502, Washington, DC 20210.
The bond must obligate the surety to
pay any sums to the WHD Administrator for wages and benefits owed to
an H–2A worker or to a worker engaged
in corresponding employment, or to a
U.S. worker improperly rejected or improperly laid off or displaced, based on
a final decision finding a violation or
violations of this part or 20 CFR part
655, subpart B relating to the labor certification the bond is intended to
cover. The aggregate liability of the
surety shall not exceed the face
amount of the bond. The bond must be
written to cover liability incurred during the term of the period listed in the
§ 501.7 Cooperation with Federal officials.
All persons must cooperate with any
Federal officials assigned to perform
an investigation, inspection, or law enforcement function pursuant to 8
U.S.C. 1188 and the regulations in this
part during the performance of such
duties. The WHD will take such action
as it deems appropriate, including initiating debarment proceedings, seeking
an injunction to bar any failure to cooperate with an investigation and/or
assessing a civil money penalty therefor. In addition, the WHD will report
the matter to OFLC, and may recommend to OFLC that the person’s existing labor certification be revoked. In
addition, Federal statutes prohibiting
persons from interfering with a Federal
officer in the course of official duties
are found at 18 U.S.C. 111 and 18 U.S.C.
114.
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Wage and Hour Division, Labor
§ 501.17
Application for Temporary Employment
Certification for labor certification
made by an H–2ALC, and shall be
amended to cover any extensions of the
labor certification requested by an H–
2ALC.
(c) The bond must be in the amount
of $5,000 for a labor certification for
which an H–2ALC will employ fewer
than 25 workers; $10,000 for a labor certification for which an H–2ALC will
employ 25 to 49 workers; $20,000 for a
labor certification for which an H–
2ALC will employ 50 to 74 workers;
$50,000 for a labor certification for
which an H–2ALC will employ 75 to 99
workers; and $75,000 for a labor certification for which an H–2ALC will employ 100 or more workers. The WHD
Administrator may require that an H–
2ALC obtain a bond with a higher face
value amount after notice and opportunity for hearing when it is shown
based on objective criteria that the
amount of the bond is insufficient to
meet potential liabilities.
(d) The bond must remain in force for
a period of no less than 2 years from
the date on which the labor certification expires. If the WHD has commenced any enforcement action under
the regulations in this part against an
H–2ALC employer or any successor in
interest by that date, the bond shall remain in force until the conclusion of
such action and any related appeal or
related litigation. Surety bonds may
not be canceled or terminated unless 45
days’ notice is provided by the surety
in writing to the WHD Administrator
at the address set forth in paragraph
(b) of this section.
work contract provisions as defined in
§ 501.3(a).
§ 501.16 Sanctions and remedies—general.
Whenever the WHD Administrator
believes that 8 U.S.C. 1188, 20 CFR part
655, subpart B, or the regulations in
this part have been violated, such action shall be taken and such proceedings instituted as deemed appropriate, including (but not limited to)
the following:
(a)(1) Institute appropriate administrative proceedings, including: the recovery of unpaid wages (including recovery of recruitment fees paid in the
absence of required contract clauses
(see 20 CFR 655.135(k)); the enforcement
of provisions of the work contract, 8
U.S.C. 1188, 20 CFR part 655, subpart B,
or the regulations in this part; the assessment of a civil money penalty;
make whole relief for any person who
has been discriminated against; reinstatement and make whole relief for
any U.S. worker who has been improperly rejected for employment, laid off
or displaced; or debarment for up to 3
years.
(2) The remedies referenced in paragraph (a)(1) of this section will be
sought either directly from the employer, or from its successor in interest, as appropriate. In the case of an H–
2ALC, the remedies will be sought from
the H–2ALC directly and/or monetary
relief (other than civil money penalties) from the insurer who issued the
surety bond to the H–2ALC, as required
by 20 CFR part 655, subpart B and § 501.9
of this part.
(b) Petition any appropriate District
Court of the U.S. for temporary or permanent injunctive relief, including to
prohibit the withholding of unpaid
wages and/or for reinstatement, or to
restrain violation of 8 U.S.C. 1188, 20
CFR part 655, subpart B, or the regulations in this part, by any person.
(c) Petition any appropriate District
Court of the U.S. for an order directing
specific performance of covered contractual obligations.
Subpart B—Enforcement
§ 501.15
Enforcement.
The investigation, inspection, and
law enforcement functions to carry out
the provisions of 8 U.S.C. 1188, 20 CFR
part 655, subpart B, or the regulations
in this part, as provided in the regulations in this part for enforcement by
the WHD, pertain to the employment
of any H–2A worker, any worker in corresponding employment, or any U.S.
worker improperly rejected for employment or improperly laid off or displaced. Such enforcement includes the
§ 501.17 Concurrent actions.
OFLC has primary responsibility to
make all determinations regarding the
issuance, denial, or revocation of a
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§ 501.18
29 CFR Ch. V (7–1–19 Edition)
labor certification as described in
§ 501.1(b) of this part and in 20 CFR part
655, subpart B. The WHD has primary
responsibility to make all determinations regarding the enforcement functions as described in § 501.1(c) of this
part. The taking of any one of the actions referred to above shall not be a
bar to the concurrent taking of any
other action authorized by 8 U.S.C.
1188, 20 CFR part 655, subpart B, or the
regulations in this part. OFLC and the
WHD have concurrent jurisdiction to
impose a debarment remedy under 20
CFR 655.182 or under § 501.20 of the regulations in this part.
(5) Explanation from the person
charged with the violation(s);
(6) Commitment to future compliance, taking into account the public
health, interest or safety, and whether
the person has previously violated 8
U.S.C. 1188;
(7) The extent to which the violator
achieved a financial gain due to the
violation, or the potential financial
loss or potential injury to the workers.
(c) A civil money penalty for each
violation of the work contract or a requirement of 8 U.S.C. 1188, 20 CFR part
655, subpart B, or the regulations in
this part will not exceed $1,735 per violation, with the following exceptions:
(1) A civil money penalty for each
willful violation of the work contract,
or of 8 U.S.C. 1188, 20 CFR part 655, subpart B, or the regulations in this part,
or for each act of discrimination prohibited by § 501.4 shall not exceed $5,839;
(2) A civil money penalty for a violation of a housing or transportation
safety and health provision of the work
contract, or any obligation under 8
U.S.C. 1188, 20 CFR part 655, subpart B,
or the regulations in this part, that
proximately causes the death or serious injury of any worker shall not exceed $57,813 per worker;
(3) For purposes of this section, the
term serious injury includes, but is not
limited to:
(i) Permanent loss or substantial impairment of one of the senses (sight,
hearing, taste, smell, tactile sensation);
(ii) Permanent loss or substantial impairment of the function of a bodily
member, organ or mental faculty, including the loss of all or part of an
arm, leg, foot, hand or other body part;
or
(iii) Permanent paralysis or substantial impairment that causes loss of
movement or mobility of an arm, leg,
foot, hand or other body part.
(4) A civil money penalty for a repeat
or willful violation of a housing or
transportation safety and health provision of the work contract, or any obligation under 8 U.S.C. 1188, 20 CFR part
655, subpart B, or the regulations in
this part, that proximately causes the
death or serious injury of any worker,
shall not exceed $115,624 per worker.
§ 501.18 Representation of the Secretary.
The Solicitor of Labor, through authorized representatives, shall represent the WHD Administrator and the
Secretary in all administrative hearings under 8 U.S.C. 1188 and the regulations in this part.
§ 501.19 Civil money penalty assessment.
(a) A civil money penalty may be assessed by the WHD Administrator for
each violation of the work contract, or
the obligations imposed by 8 U.S.C.
1188, 20 CFR part 655, subpart B, or the
regulations in this part. Each failure to
pay an individual worker properly or to
honor the terms or conditions of a
worker’s employment required by 8
U.S.C. 1188, 20 CFR part 655, subpart B,
or the regulations in this part constitutes a separate violation.
(b) In determining the amount of
penalty to be assessed for each violation, the WHD Administrator shall
consider the type of violation committed and other relevant factors. The
factors that may be considered include,
but are not limited to, the following:
(1) Previous history of violation(s) of
8 U.S.C. 1188, 20 CFR part 655, subpart
B, or the regulations in this part;
(2) The number of H–2A workers,
workers in corresponding employment,
or U.S. workers who were and/or are affected by the violation(s);
(3) The gravity of the violation(s);
(4) Efforts made in good faith to comply with 8 U.S.C. 1188, 20 CFR part 655,
subpart B, and the regulations in this
part;
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Wage and Hour Division, Labor
§ 501.20
a debarred agent or attorney, subject
to the time limits set forth in paragraph (c) of this section.
(c) Statute of Limitations and Period of
Debarment. (1) The WHD Administrator
must issue any Notice of Debarment no
later than 2 years after the occurrence
of the violation.
(2) No employer, attorney, or agent
may be debarred under this subpart for
more than 3 years from the date of the
final agency decision.
(d) Definition of violation. For the purposes of this section, a violation includes:
(1) One or more acts of commission or
omission on the part of the employer
or the employer’s agent which involve:
(i) Failure to pay or provide the required wages, benefits or working conditions to the employer’s H–2A workers
and/or workers in corresponding employment;
(ii) Failure, except for lawful, job-related reasons, to offer employment to
qualified U.S. workers who applied for
the job opportunity for which certification was sought;
(iii) Failure to comply with the employer’s obligations to recruit U.S.
workers;
(iv) Improper layoff or displacement
of U.S. workers or workers in corresponding employment;
(v) Failure to comply with one or
more sanctions or remedies imposed by
the WHD Administrator for violation(s)
of contractual or other H–2A obligations, or with one or more decisions or
orders of the Secretary or a court
under 8 U.S.C. 1188, 20 CFR part 655,
subpart B, or the regulations in this
part;
(vi) Impeding an investigation of an
employer under 8 U.S.C. 1188, 20 CFR
part 655, subpart B, or the regulations
in this part;
(vii) Employing an H–2A worker outside the area of intended employment,
or in an activity/activities not listed in
the job order or outside the validity period of employment of the job order, including any approved extension thereof;
(viii) A violation of the requirements
of 20 CFR 655.135(j) or (k);
(ix) A violation of any of the provisions listed in § 501.4(a) of this subpart;
or
(d) A civil money penalty for failure
to cooperate with a WHD investigation
shall not exceed $5,839 per investigation.
(e) A civil money penalty for laying
off or displacing any U.S. worker employed in work or activities that are
encompassed by the approved Application for Temporary Employment Certification for H–2A workers in the area of
intended employment either within 60
days preceding the date of need or during the validity period of the job order,
including any approved extension
thereof, other than for a lawful, job-related reason, shall not exceed $17,344
per violation per worker.
(f) A civil money penalty for improperly rejecting a U.S. worker who is an
applicant for employment, in violation
of 8 U.S.C. 1188, 20 CFR part 655, subpart B, or the regulations in this part,
shall not exceed $17,344 per violation
per worker.
[75 FR 6978, Feb. 12, 2010, as amended at 81
FR 43450, July 1, 2016; 82 FR 5381, Jan. 18,
2017; 83 FR 12, Jan. 2, 2018; 84 FR 218, Jan. 23,
2019]
§ 501.20 Debarment and revocation.
(a) Debarment of an employer. The
WHD Administrator may debar an employer or any successor in interest to
that employer from receiving future
labor certifications under 20 CFR part
655, subpart B, subject to the time limits set forth in paragraph (c) of this
section, if: the WHD Administrator
finds that the employer substantially
violated a material term or condition
of its temporary labor certification,
with respect to H–2A workers, workers
in corresponding employment, or U.S.
workers improperly rejected for employment, or improperly laid off or displaced, by issuing a Notice of Debarment.
(b) Debarment of an agent or an attorney. The WHD Administrator may
debar an agent or attorney from participating in any action under 8 U.S.C.
1188, 20 CFR part 655, subpart B or 29
CFR part 501, if the WHD Administrator finds that the agent or attorney
participated in an employer’s substantial violation, by issuing a Notice of
Debarment. The OFLC Administrator
may not issue future labor certifications to any employer represented by
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§ 501.21
29 CFR Ch. V (7–1–19 Edition)
(x) A single heinous act showing such
flagrant disregard for the law that future compliance with program requirements cannot reasonably be expected.
(2) In determining whether a violation is so substantial as to merit debarment, the factors set forth in § 501.19(b)
shall be considered.
(e) Procedural Requirements. The Notice of Debarment must be in writing,
must state the reason for the debarment finding, including a detailed explanation of the grounds for and the
duration of the debarment, must identify appeal opportunities under § 501.33
and a timeframe under which such
rights must be exercised and must
comply with § 501.32. The debarment
will take effect 30 days from the date
the Notice of Debarment is issued, unless a request for review is properly
filed within 30 days from the issuance
of the Notice of Debarment. The timely
filing of an administrative appeal stays
the debarment pending the outcome of
the appeal as provided in § 501.33(d).
(f) Debarment involving members of associations. If, after investigation, the
WHD Administrator determines that
an individual employer-member of a
joint employer association has committed a substantial violation, the debarment determination will apply only
to that member unless the WHD Administrator determines that the association or another association member
participated in the violation, in which
case the debarment will be invoked
against the association or other
complicit association member(s) as
well.
(g) Debarment involving associations
acting as sole employers. If, after investigation, the WHD Administrator determines that an association acting as
a sole employer has committed a substantial violation, the debarment determination will apply only to the association and any successor in interest
to the debarred association.
(h) Debarment involving associations
acting as joint employers. If, after investigation, the WHD Administrator determines that an association acting as
a joint employer with its members has
committed a substantial violation, the
debarment determination will apply
only to the association, and will not be
applied to any individual employer-
member of the association. However, if
the WHD Administrator determines
that the member participated in, had
knowledge of, or had reason to know of
the violation, the debarment may be
invoked against the complicit association member as well. An association
debarred from the H–2A temporary
labor certification program will not be
permitted to continue to file as a joint
employer with its members during the
period of the debarment.
(i) Revocation. The WHD may recommend to the OFLC Administrator
the revocation of a temporary agricultural labor certification if the WHD
finds that the employer:
(1) Substantially violated a material
term or condition of the approved temporary labor certification.
(2) Failed to cooperate with a DOL
investigation or with a DOL official
performing an investigation, inspection, or law enforcement function
under 8 U.S.C. 1188, 20 CFR part 655,
subpart B, or this part; or
(3) Failed to comply with one or more
sanctions or remedies imposed by the
WHD, or with one or more decisions or
orders of the Secretary or a court order
secured by the Secretary under 8 U.S.C.
1188, 20 CFR part 655, subpart B, or this
part.
§ 501.21 Failure to cooperate with investigations.
(a) No person shall refuse to cooperate with any employee of the Secretary
who is exercising or attempting to exercise this investigative or enforcement authority.
(b) Where an employer (or employer’s
agent or attorney) does not cooperate
with an investigation concerning the
employment of an H–2A worker, a
worker in corresponding employment,
or a U.S. worker who has been improperly rejected for employment or improperly laid off or displaced, WHD
may make such information available
to OFLC and may recommend that
OFLC revoke the existing certification
that is the basis for the employment of
the H–2A workers giving rise to the investigation. In addition, WHD may
take such action as appropriate, including initiating proceedings for the
debarment of the employer from future
certification for up to 3 years, seeking
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Wage and Hour Division, Labor
§ 501.33
an injunction, and/or assessing civil
money penalties against any person
who has failed to cooperate with a
WHD investigation. The taking of any
one action shall not bar the taking of
any additional action.
to proceed administratively to enforce
contractual obligations, or obligations
under 8 U.S.C. 1188, 20 CFR part 655,
subpart B, or the regulations in this
part, including for the recovery of the
monetary relief, the person against
whom such action is taken shall be notified in writing of such determination.
§ 501.22 Civil money penalties—payment and collection.
Where a civil money penalty is assessed in a final order by the WHD Administrator, by an ALJ, or by the Administrative Review Board (ARB), the
amount of the penalty must be received by the WHD Administrator
within 30 days of the date of the final
order. The person assessed such penalty shall remit the amount ordered to
the WHD Administrator by certified
check or by money order, made payable
to the Wage and Hour Division, United
States Department of Labor. The remittance shall be delivered or mailed
to the WHD Regional Office for the
area in which the violations occurred.
§ 501.32
Contents of notice.
The notice required by § 501.31 shall:
(a) Set forth the determination of the
WHD Administrator including the
amount of any monetary relief due or
actions necessary to fulfill a contractual obligation or obligations under 8
U.S.C. 1188, 20 CFR part 655, subpart B,
or the regulations in this part, the
amount of any civil money penalty assessment, whether debarment is sought
and the term, and any change in the
amount of the surety bond, and the
reason or reasons therefor.
(b) Set forth the right to request a
hearing on such determination.
(c) Inform any affected person or persons that in the absence of a timely request for a hearing, the determination
of the WHD Administrator shall become final and unappealable.
(d) Set forth the time and method for
requesting a hearing, and the procedures relating thereto, as set forth in
§ 501.33.
Subpart C—Administrative
Proceedings
§ 501.30 Applicability of procedures
and rules.
The procedures and rules contained
herein prescribe the administrative
process that will be applied with respect to a determination to assess civil
money penalties, to debar, or to increase the amount of a surety bond and
which may be applied to the enforcement of provisions of the work contract, or obligations under 8 U.S.C.
1188, 20 CFR part 655, subpart B, or the
regulations in this part, or to the collection of monetary relief due as a result of any violation. Except with respect to the imposition of civil money
penalties, debarment, or an increase in
the amount of a surety bond, the Secretary may, in the Secretary’s discretion, seek enforcement action in Federal court without resort to any administrative proceedings.
§ 501.33
Request for hearing.
(a) Any person desiring review of a
determination referred to in § 501.32, including judicial review, shall make a
written request for an administrative
hearing to the official who issued the
determination at the WHD address appearing on the determination notice,
no later than 30 days after the date of
issuance of the notice referred to in
§ 501.32.
(b) No particular form is prescribed
for any request for hearing permitted
by this part. However, any such request
shall:
(1) Be typewritten or legibly written;
(2) Specify the issue or issues stated
in the notice of determination giving
rise to such request;
(3) State the specific reason or reasons why the person requesting the
hearing believes such determination is
in error;
PROCEDURES RELATING TO HEARING
§ 501.31 Written notice of determination required.
Whenever the WHD Administrator
decides to assess a civil money penalty,
to debar, to increase a surety bond, or
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§ 501.34
29 CFR Ch. V (7–1–19 Edition)
(4) Be signed by the person making
the request or by an authorized representative of such person; and
(5) Include the address at which such
person or authorized representative desires to receive further communications relating thereto.
(c) The request for such hearing must
be received by the official who issued
the determination, at the WHD address
appearing on the determination notice,
within the time set forth in paragraph
(a) of this section. Requests may be
made by certified mail or by means
normally assuring overnight delivery.
(d) The determination shall take effect on the start date identified in the
written notice of determination, unless
an administrative appeal is properly
filed. The timely filing of an administrative appeal stays the determination
pending the outcome of the appeal proceedings, provided that any surety
bond remains in effect until the conclusion of any such proceedings.
quest for hearing filed in accordance
with § 501.33.
§ 501.36 Caption of proceeding.
(a) Each administrative proceeding
instituted under 8 U.S.C. 1188 and the
regulations in this part shall be captioned in the name of the person requesting such hearing, and shall be
styled as follows:
In the Matter of llllll, Respondent.
(b) For the purposes of such administrative proceedings the WHD Administrator shall be identified as plaintiff
and the person requesting such hearing
shall be named as respondent.
REFERRAL FOR HEARING
Commencement of proceeding.
§ 501.37 Referral to Administrative
Law Judge.
(a) Upon receipt of a timely request
for a hearing filed pursuant to and in
accordance with § 501.33, the WHD Administrator, by the Associate Solicitor
for the Division of Fair Labor Standards or by the Regional Solicitor for
the Region in which the action arose,
will, by Order of Reference, promptly
refer a copy of the notice of administrative determination complained of,
and the original or a duplicate copy of
the request for hearing signed by the
person requesting such hearing or by
the authorized representative of such
person, to the Chief ALJ, for a determination in an administrative proceeding as provided herein. The notice
of administrative determination and
request for hearing shall be filed of
record in the Office of the Chief Administrative Law Judge and shall, respectively, be given the effect of a complaint and answer thereto for purposes
of the administrative proceeding, subject to any amendment that may be
permitted under the regulations in this
part or 29 CFR part 18.
(b) A copy of the Order of Reference,
together with a copy of the regulations
in this part, shall be served by counsel
for the WHD Administrator upon the
person requesting the hearing, in the
manner provided in 29 CFR 18.3.
Each administrative proceeding permitted under 8 U.S.C. 1188 and the regulations in this part shall be commenced upon receipt of a timely re-
§ 501.38 Notice of docketing.
Upon receipt of an Order of Reference, the Chief ALJ shall appoint an
RULES OF PRACTICE
§ 501.34
General.
(a) Except as specifically provided in
the regulations in this part, the Rules
of Practice and Procedure for Administrative Hearings Before the Office of
Administrative Law Judges established
by the Secretary at 29 CFR part 18
shall apply to administrative proceedings described in this part.
(b) As provided in the Administrative
Procedure Act, 5 U.S.C. 556, any oral or
documentary evidence may be received
in proceedings under this part. The
Federal Rules of Evidence and subpart
B of the Rules of Practice and Procedure for Administrative Hearings Before the Office of Administrative Law
Judges (29 CFR part 18, subpart B) will
not apply, but principles designed to
ensure production of relevant and probative evidence shall guide the admission of evidence. The ALJ may exclude
evidence which is immaterial, irrelevant, or unduly repetitive.
§ 501.35
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Wage and Hour Division, Labor
§ 501.41
determination (or amended notice, if
one is filed), and the agreement;
(3) A waiver of any further procedural steps before the ALJ; and
(4) A waiver of any right to challenge
or contest the validity of the findings
and order entered into in accordance
with the agreement.
(c) Submission. On or before the expiration of the time granted for negotiations, the parties or their authorized
representatives or their counsel may:
(1) Submit the proposed agreement
for consideration by the ALJ; or
(2) Inform the ALJ that agreement
cannot be reached.
(d) Disposition. In the event an agreement containing consent findings and
an order is submitted within the time
allowed therefor, the ALJ, within 30
days thereafter, shall, if satisfied with
its form and substance, accept such
agreement by issuing a decision based
upon the agreed findings.
ALJ to hear the case. The ALJ shall
promptly notify all interested parties
of the docketing of the matter and
shall set the time and place of the
hearing. The date of the hearing shall
be not more than 60 days from the date
on which the Order of Reference was
filed.
§ 501.39 Service upon attorneys for the
Department of Labor—number of
copies.
Two copies of all pleadings and other
documents required for any administrative proceeding provided herein
shall be served on the attorneys for the
DOL. One copy shall be served on the
Associate Solicitor, Division of Fair
Labor Standards, Office of the Solicitor, U.S. Department of Labor, 200
Constitution Avenue, NW., Washington, DC 20210, and one copy on the
Attorney representing the Department
in the proceeding.
PROCEDURES BEFORE ADMINISTRATIVE
LAW JUDGE
§ 501.40
POST-HEARING PROCEDURES
§ 501.41 Decision and order of Administrative Law Judge.
Consent findings and order.
(a) General. At any time after the
commencement of a proceeding under
this part, but prior to the reception of
evidence in any such proceeding, a
party may move to defer the receipt of
any evidence for a reasonable time to
permit negotiation of an agreement
containing consent findings and an
order disposing of the whole or any
part of the proceeding. The allowance
of such deferment and the duration
thereof shall be at the discretion of the
ALJ, after consideration of the nature
of the proceeding, the requirements of
the public interest, the representations
of the parties, and the probability of an
agreement being reached which will result in a just disposition of the issues
involved.
(b) Content. Any agreement containing consent findings and an order
disposing of a proceeding or any part
thereof shall also provide:
(1) That the order shall have the
same force and effect as an order made
after full hearing;
(2) That the entire record on which
any order may be based shall consist
solely of the notice of administrative
(a) The ALJ shall prepare, within 60
days after completion of the hearing
and closing of the record, a decision on
the issues referred by the WHD Administrator.
(b) The decision of the ALJ shall include a statement of the findings and
conclusions, with reasons and basis
therefor, upon each material issue presented on the record. The decision shall
also include an appropriate order which
may affirm, deny, reverse, or modify,
in whole or in part, the determination
of the WHD Administrator. The reason
or reasons for such order shall be stated in the decision.
(c) The decision shall be served on all
parties and the ARB.
(d) The decision concerning civil
money penalties, debarment, monetary
relief, and/or enforcement of other contractual obligations under 8 U.S.C.
1188, 20 CFR part 655, subpart B, and/or
this part, when served by the ALJ shall
constitute the final agency order unless the ARB, as provided for in § 501.42,
determines to review the decision.
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§ 501.42
29 CFR Ch. V (7–1–19 Edition)
REVIEW OF ADMINISTRATIVE LAW
JUDGE’S DECISION
maintained and filed under the custody
and control of the Chief ALJ, or, where
the case has been the subject of administrative review, the ARB.
§ 501.42 Procedures for initiating and
undertaking review.
§ 501.47 Certification.
Upon receipt of a complaint seeking
review of a decision issued pursuant to
this part filed in a U.S. District Court,
after the administrative remedies have
been exhausted, the Chief ALJ or,
where the case has been the subject of
administrative review, the ARB shall
promptly index, certify and file with
the appropriate U.S. District Court, a
full, true, and correct copy of the entire record, including the transcript of
proceedings.
(a) A respondent, the WHD, or any
other party wishing review, including
judicial review, of the decision of an
ALJ shall, within 30 days of the decision of the ALJ, petition the ARB to
review the decision. Copies of the petition shall be served on all parties and
on the ALJ. If the ARB does not issue
a notice accepting a petition for review
of the decision within 30 days after receipt of a timely filing of the petition,
or within 30 days of the date of the decision if no petition has been received,
the decision of the ALJ shall be
deemed the final agency action.
(b) Whenever the ARB, either on the
ARB’s own motion or by acceptance of
a party’s petition, determines to review the decision of an ALJ, a notice of
the same shall be served upon the ALJ
and upon all parties to the proceeding.
PART
502—ENFORCEMENT
OF
CONTRACTUAL
OBLIGATIONS
FOR TEMPORARY ALIEN AGRICULTURAL WORKERS ADMITTED
UNDER SECTION 218 OF THE IMMIGRATION AND NATIONALITY
ACT (SUSPENDED 6-29-2009)
§ 501.43 Responsibility of the Office of
Administrative Law Judges (OALJ).
Subpart A—General Provisions
Upon receipt of the ARB’s Notice
pursuant to § 501.42, the OALJ shall
promptly forward a copy of the complete hearing record to the ARB.
Sec.
502.0 Introduction.
502.1 Purpose and scope.
502.2 Coordination of intake between DOL
agencies.
502.3 Discrimination prohibited.
502.4 Waiver of rights prohibited.
502.5 Investigation authority of Secretary.
502.6 Cooperation with DOL officials.
502.7 Accuracy of information, statements,
data.
502.8 Surety bond.
502.10 Definitions.
§ 501.44 Additional information, if required.
Where the ARB has determined to review such decision and order, the ARB
shall notify the parties of:
(a) The issue or issues raised;
(b) The form in which submissions
shall be made (i.e., briefs, oral argument, etc.); and
(c) The time within which such presentation shall be submitted.
Subpart B—Enforcement of Work Contracts
§ 501.45 Final decision of the Administrative Review Board.
The ARB’s final decision shall be
issued within 90 days from the notice
granting the petition and served upon
all parties and the ALJ.
502.15 Enforcement.
502.16 Sanctions and Remedies—General.
502.17 Concurrent actions.
502.18 Representation of the Secretary.
502.19 Civil money penalty assessment.
502.20 Debarment and revocation.
502.21 Failure to cooperate with investigations.
502.22 Civil money penalties—payment and
collection.
RECORD
Subpart C—Administrative Proceedings
502.30
§ 501.46 Retention of official record.
The official record of every completed administrative hearing provided
by the regulations in this part shall be
Applicability of procedures and rules.
PROCEDURES RELATING TO HEARING
502.31 Written notice of determination required.
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Wage and Hour Division, Labor
502.32
502.33
§ 502.1
Contents of notice.
Request for hearing.
certification approved by ETA as a
condition for granting H–2A certification, including any extension thereof. Such U.S. workers hired by H–2A
employers are hereafter referred to as
engaged in corresponding employment.
RULES OF PRACTICE
502.34 General.
502.35 Commencement of proceeding.
502.36 Caption of proceeding.
REFERRAL FOR HEARING
§ 502.1
502.37 Referral to Administrative Law
Judge.
502.38 Notice of docketing.
502.39 Service upon attorneys for the Department of Labor—number of copies.
(a) Statutory standard. Section 218(a)
of the INA provides that:
(1) A petition to import an alien as
an H–2A worker (as defined in the INA)
may not be approved by the Secretary
of the Department of Homeland Security (DHS) unless the petitioner has applied to the Secretary of the United
States Department of Labor (Secretary) for a certification that:
(i) There are not sufficient workers
who are able, willing, and qualified,
and who will be available at the time
and place needed, to perform the labor
or services involved in the petition,
and
(ii) The employment of the alien in
such labor or services will not adversely affect the wages and working
conditions of workers in the U.S. similarly employed.
(2) [Reserved]
(b) Role of the Employment and Training Administration (ETA). The issuance
and denial of labor certification under
sec. 218 of the INA has been delegated
by the Secretary to ETA, an agency
within the U.S. Department of Labor
(the Department or DOL). In general,
matters concerning the obligations of
an employer of H–2A workers related to
the labor certification process are administered and enforced by ETA. Included within ETA’s jurisdiction are
issues such as whether U.S. workers
are available, whether adequate recruitment has been conducted, whether
there is a strike or lockout, the methodology for establishing AEWR, whether workers’ compensation insurance
has been provided, whether employment was offered to U.S. workers as required by sec. 218 of the INA and regulations at 20 CFR part 655, subpart B,
and other similar matters. The regulations pertaining to the issuance and denial of labor certification for temporary alien workers by the ETA are
found in 20 CFR part 655, subpart B.
PROCEDURES BEFORE ADMINISTRATIVE LAW
JUDGE
502.40
Consent findings and order.
POST-HEARING PROCEDURES
502.41 Decision and order of Administrative
Law Judge.
REVIEW OF ADMINISTRATIVE LAW JUDGE’S
DECISION
502.42 Procedures for initiating and undertaking review.
502.43 Responsibility of the Office of Administrative Law Judges.
502.44 Additional information, if required.
502.45 Final decision of the Administrative
Review Board.
RECORD
502.46 Retention of official record.
502.47 Certification.
AUTHORITY: 8 U.S.C.
1184(c), and 1188.
Purpose and scope.
1101(a)(15)(H)(ii)(a),
SOURCE: 73 FR 77229, Dec. 18, 2008, unless
otherwise noted.
EFFECTIVE DATE NOTE: At 74 FR 26008, May
29, 2009, part 501 was redesignated as part 502,
and newly designated part 502 was suspended,
effective June 29, 2009.
Subpart A—General Provisions
§ 502.0 Introduction.
These regulations cover the enforcement of all contractual obligation provisions applicable to the employment
of H–2A workers under sec. 218 of the
Immigration and Nationality Act
(INA), as amended by the Immigration
Reform and Control Act of 1986 (IRCA).
These regulations are also applicable
to the employment of United States
(U.S.) workers newly hired by employers of H–2A workers in the same occupations as the H–2A workers during the
period of time set forth in the labor
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§ 502.2
29 CFR Ch. V (7–1–19 Edition)
(c) Role of the Employment Standards
Administration (ESA), Wage and Hour Division (WHD). (1) The Secretary is authorized to take actions that assure
compliance with the terms and conditions of employment under sec. 218 of
the INA, the regulations at 20 CFR part
655, subpart B, or these regulations, including the assessment of civil money
penalties and seeking injunctive relief
and specific performance of contractual obligations. See 8 U.S.C. 1188(g)(2).
(2) Certain investigatory, inspection,
and law enforcement functions to carry
out the provisions of sec. 218 of the INA
have been delegated by the Secretary
to the ESA, WHD. In general, matters
concerning the obligations under a
work contract between an employer of
H–2A workers and the H–2A workers
and U.S. workers hired in corresponding employment by H–2A employers are enforced by ESA, including
whether employment was offered to
U.S. workers as required under sec. 218
of the INA or 20 CFR part 655, subpart
B, or whether U.S. workers were laid
off or displaced in violation of program
requirements. Included within the enforcement responsibility of WHD are
such matters as the payment of required wages, transportation, meals,
and housing provided during the employment. The WHD has the responsibility to carry out investigations, inspections, and law enforcement functions and in appropriate instances impose penalties, recommend revocation
of existing certification(s) or debarment from future certifications, and
seek injunctive relief and specific performance of contractual obligations,
including recovery of unpaid wages (either directly from the employer or in
the case of an H–2A Labor Contractors
(H–2ALC), from the H–2ALC directly
and/or from the insurer who issued the
surety bond to the H–2ALC as required
by 20 CFR part 655, subpart B and 29
CFR 501.8).
(d) Effect of regulations. The amendments to the INA made by Title III of
the IRCA apply to petitions and applications filed on and after June 1, 1987.
Accordingly, the enforcement functions carried out by the WHD under the
INA and these regulations apply to the
employment of any H–2A worker and
any other U.S. workers hired by H–2A
employers in corresponding employment as the result of any application
filed with the Department on and after
June 1, 1987.
§ 502.2 Coordination of intake between
DOL agencies.
Complaints received by ETA or any
State Workforce Agency (SWA) regarding contractual H–2A labor standards
between the employer and the employee will be immediately forwarded
to the appropriate WHD office for appropriate action under these regulations.
§ 502.3 Discrimination prohibited.
(a) No person shall intimidate,
threaten, restrain, coerce, blacklist,
discharge, or in any manner discriminate against any person who has:
(1) Filed a complaint under or related
to sec. 218 of the INA or these regulations;
(2) Instituted or caused to be instituted any proceedings related to sec.
218 of the INA or these regulations;
(3) Testified or is about to testify in
any proceeding under or related to sec.
218 of the INA or these regulations;
(4) Exercised or asserted on behalf of
himself or others any right or protection afforded by sec. 218 of the INA or
these regulations; or
(5) Consulted with an employee of a
legal assistance program or an attorney on matters related to sec. 218 of
the INA, or to this subpart or any
other Department regulation promulgated pursuant to sec. 218 of the INA.
(b) Allegations of discrimination
against any person under paragraph (a)
of this section will be investigated by
the WHD. Where the WHD has determined through investigation that such
allegations have been substantiated,
appropriate remedies may be sought.
The WHD may assess civil money penalties, seek injunctive relief, and/or
seek additional remedies necessary to
make the employee whole as a result of
the discrimination, as appropriate, and
may recommend to ETA debarment of
any such violator from future labor
certification. Complaints alleging discrimination against U.S. workers and
immigrants based on citizenship or immigration status may also be forwarded by the WHD to the Department
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Wage and Hour Division, Labor
§ 502.7
of Justice, Civil Rights Division, Office
of Special Counsel for Immigration-Related Unfair Employment Practices.
ing civil money penalties, against any
person who has failed to permit the
WHD to make an investigation.
(c) Confidential investigation. The Secretary shall conduct investigations in a
manner that protects the confidentiality of any complainant or other
person who provides information to the
Secretary in good faith.
(d) Report of violations. Any person
may report a violation of the work contract obligations of sec. 218 of the INA
or these regulations to the Secretary
by advising any local office of the
SWA, ETA, WHD, or any other authorized representative of the Secretary.
The office or person receiving such a
report shall refer it to the appropriate
office of DOL, WHD for the geographic
area in which the reported violation is
alleged to have occurred.
§ 502.4 Waiver of rights prohibited.
No person shall seek to have an H–2A
worker, or other U.S. worker hired in
corresponding employment by an H–2A
employer, waive any rights conferred
under sec. 218 of the INA, the regulations at 20 CFR part 655, Subpart B, or
under these regulations. Any agreement by an employee purporting to
waive or modify any rights inuring to
said person under the INA or these regulations shall be void as contrary to
public policy, except that a waiver or
modification of rights or obligations
hereunder in favor of the Secretary
shall be valid for purposes of enforcement of the provisions of the INA or
these regulations. This does not prevent agreements to settle private litigation.
§ 502.6 Cooperation with DOL officials.
All persons must cooperate with any
official of the DOL assigned to perform
an investigation, inspection, or law enforcement function pursuant to the
INA and these regulations during the
performance of such duties. The WHD
will take such action as it deems appropriate, including seeking an injunction to bar any failure to cooperate
with an investigation and/or assessing
a civil money penalty therefore. In addition, the WHD will report the matter
to ETA, and the WHD may recommend
to ETA the debarment of the employer
from future certification and/or recommend that the person’s existing
labor certification be revoked. In addition, Federal statutes prohibiting persons from interfering with a Federal officer in the course of official duties are
found at 18 U.S.C. 111 and 18 U.S.C.
1114.
§ 502.5 Investigation authority of Secretary.
(a) General. The Secretary, either
pursuant to a complaint or otherwise,
shall, as may be appropriate, investigate and, in connection therewith,
enter and inspect such places (including housing) and such vehicles, and
such records (and make transcriptions
thereof), question such persons and
gather such information as deemed
necessary by the Secretary to determine compliance with contractual obligations under sec. 218 of the INA or
these regulations.
(b) Failure to cooperate with an investigation. Where any employer (or employer’s agent or attorney) using the
services of an H–2A worker does not cooperate with an investigation concerning the employment of H–2A workers or U.S. workers hired in corresponding employment, the WHD shall
report such occurrence to ETA and
may recommend that ETA revoke the
existing certification that is the basis
for the employment of the H–2A workers giving rise to the investigation, and
the WHD may recommend to ETA the
debarment of the employer from future
certification for up to 3 years. In addition, the WHD may take such action as
may be appropriate, including the
seeking of an injunction and/or assess-
§ 502.7 Accuracy of information, statements, data.
Information, statements and data
submitted in compliance with provisions of the Act or these regulations
are subject to 18 U.S.C. 1001, which provides, with regard to statements or entries generally, that whoever, in any
matter within the jurisdiction of any
department or agency of the U.S.
knowingly and willfully falsifies, conceals or covers up by any trick,
scheme, or device a material fact, or
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§ 502.8
29 CFR Ch. V (7–1–19 Edition)
makes any false, fictitious or fraudulent statements or representations, or
makes or uses any false writing or document knowing the same to contain
any false, fictitious or fraudulent
statement or entry, shall be fined not
more than $10,000 or imprisoned not
more than 5 years, or both.
after notice and an opportunity for
hearing when it is shown based on objective criteria that the amount of the
bond is insufficient to meet potential
liabilities.
§ 502.10
Definitions.
(a) Definitions of terms used in this
part. For the purpose of this part:
Administrative Law Judge (ALJ) means
a person within the Department’s Office of Administrative Law Judges appointed pursuant to 5 U.S.C. 3105, or a
panel of such persons designated by the
Chief Administrative Law Judge from
the Board of Alien Labor Certification
Appeals (BALCA) established by part
656 of this chapter, which will hear and
decide appeals as set forth at 20 CFR
655.115.
Administrator, WHD means the Administrator of the Wage and Hour Division (WHD), ESA and such authorized
representatives as may be designated
to perform any of the functions of the
Administrator, WHD under this part.
Adverse effect wage rate (AEWR)
means the minimum wage rate that
the Administrator of the Office of Foreign Labor Certification (OFLC) has
determined must be offered and paid to
every H–2A worker employed under the
DOL-approved Application for Temporary Employment Certification in a
particular occupation and/or area, as
well as to U.S. workers hired by employers into corresponding employment during the H–2A recruitment period, to ensure that the wages of similarly employed U.S. workers will not
be adversely affected.
Agent means a legal entity or person,
such as an association of agricultural
employers, or an attorney for an association, that—
(1) Is authorized to act on behalf of
the employer for temporary agricultural labor certification purposes;
(2) Is not itself an employer, or a
joint employer, as defined in this section, with respect to a specific application; and
(3) Is not under suspension, debarment, expulsion, or disbarment from
practice before any court or the Department, the Board of Immigration
Appeals, the immigration judges, or
DHS under 8 CFR 292.3, 1003.101.
§ 502.8 Surety bond.
(a) H–2ALCs shall obtain a surety
bond to assure compliance with the
provisions of this part and 20 CFR part
655, subpart B for each labor certification being sought. The H–2ALC shall
attest on the application for labor certification that such a bond meeting all
the requirements of this section has
been obtained and shall provide on the
labor certification application form information that fully identifies the surety, including the name, address and
phone number of the surety, and which
identifies the bond by number or other
identifying designation.
(b) The bond shall be payable to the
Administrator, Wage and Hour Division, United States Department of
Labor. It shall obligate the surety to
pay any sums to the Administrator,
WHD, for wages and benefits owed to
H–2A and U.S. workers, based on a final
decision finding a violation or violations of this part or 20 CFR part 655,
subpart B relating to the labor certification the bond is intended to cover.
The aggregate liability of the surety
shall not exceed the face amount of the
bond. The bond shall be written to
cover liability incurred during the
term of the period listed in the application for labor certification made by the
H–2ALC, and shall be amended to cover
any extensions of the labor certification requested by the H–2ALC. Surety bonds may not be canceled or terminated unless 30 days’ notice is provided by the surety to the Administrator, WHD.
(c) The bond shall be in the amount
of $5,000 for a labor certification for
which a H–2ALC will employ fewer
than 25 employees, $10,000 for a labor
certification for which a H–2ALC will
employ 25 to 49 employees, and $20,000
for a labor certification for which a H–
2ALC will employ 50 or more employees. The amount of the bond may be increased by the Administrator, WHD
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Wage and Hour Division, Labor
§ 502.10
Agricultural association means any
nonprofit or cooperative association of
farmers, growers, or ranchers (including but not limited to processing establishments, canneries, gins, packing
sheds, nurseries, or other fixed-site agricultural employers), incorporated or
qualified under applicable State law,
that recruits, solicits, hires, employs,
furnishes, houses or transports any
worker that is subject to sec. 218 of the
INA. An agricultural association may
act as the agent of an employer for
purposes of filing an H–2A Application
for Temporary Employment Certification,
and may also act as the sole or joint
employer of H–2A workers.
Application for Temporary Employment
Certification means the Office of Management and Budget (OMB)-approved
form submitted by an employer to secure a temporary agricultural labor
certification determination from DOL.
A complete submission of the Application for Temporary Employment Certification includes the form and the initial
recruitment report.
Area of intended employment means
the geographic area within normal
commuting distance of the place
(worksite address) of the job opportunity for which the certification is
sought. There is no rigid measure of
distance which constitutes a normal
commuting area, because there may be
widely varying factual circumstances
among different areas (e.g., average
commuting times, barriers to reaching
the worksite, quality of the regional
transportation network, etc.). If the
place of intended employment is within
a Metropolitan Statistical Area (MSA),
including a multistate MSA, any place
within the MSA is deemed to be within
normal commuting distance of the
place of intended employment. The
borders of MSAs are not controlling in
the identification of the normal commuting area; a location outside of an
MSA may be within normal commuting
distance of a location that is inside
(e.g., near the border of) the MSA.
Department of Homeland Security
(DHS) means the Federal agency having control over certain immigration
functions that, through its sub-agency,
United States Citizenship and Immigration Services (USCIS), makes the determination under the INA on whether to
grant visa petitions filed by employers
seeking H–2A workers to perform temporary agricultural work in the U.S.
DOL or Department means the United
States Department of Labor.
Eligible worker means an individual
who is not an unauthorized alien (as
defined in sec. 274A(h)(3) of the INA, 8
U.S.C. 1324a(h)(3)) with respect to the
employment in which the worker is engaging.
Employee means employee as defined
under the general common law of agency. Some of the factors relevant to the
determination of employee status include: the hiring party’s right to control the manner and means by which
the work is accomplished; the skill required to perform the work; the source
of the instrumentalities and tools for
accomplishing the work; the location
of the work; the hiring party’s discretion over when and how long to work;
and whether the work is part of the
regular business of the hiring party.
Other applicable factors may be considered and no one factor is dispositive.
Employer means a person, firm, corporation or other association or organization that:
(1) Has a place of business (physical
location) in the U.S. and a means by
which it may be contacted for employment;
(2) Has an employer relationship with
respect to H–2A employees or related
U.S. workers under this part; and
(3) Possesses, for purposes of filing an
Application for Temporary Employment
Certification, a valid Federal Employer
Identification Number (FEIN).
Employment Service (ES) refers to the
system of Federal and state entities responsible for administration of the
labor certification process for temporary and seasonal agricultural employment of nonimmigrant foreign
workers. This includes the SWAs and
OFLC, including the National Processing Centers (NPCs).
Employment Standards Administration
(ESA) means the agency within DOL
that includes the WHD, and which is
charged with carrying out certain investigative and enforcement functions
of the Secretary under the INA.
Employment and Training Administration (ETA) means the agency within the
DOL that includes OFLC.
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§ 502.10
29 CFR Ch. V (7–1–19 Edition)
Federal holiday means a legal public
holiday as defined at 5 U.S.C. 6103.
Fixed-site employer means any person
engaged in agriculture who meets the
definition of an employer as those
terms are defined in this part who owns
or operates a farm, ranch, processing
establishment, cannery, gin, packing
shed, nursery, or other similar fixedsite location where agricultural activities are performed and who recruits,
solicits, hires, employs, houses, or
transports any worker subject to sec.
218 of the INA or these regulations as
incident to or in conjunction with the
owner’s or operator’s own agricultural
operation. For purposes of this part,
person includes any individual, partnership, association, corporation, cooperative, joint stock company, trust, or
other organization with legal rights
and duties.
H–2A Labor Contractor (H–2ALC)
means any person who meets the definition of employer in this section and
is not a fixed-site employer, an agricultural association, or an employee of a
fixed-site employer or agricultural association, as those terms are used in
this part, who recruits, solicits, hires,
employs, furnishes, houses, or transports any worker subject to sec. 218 of
the INA or these regulations.
H–2A worker means any temporary
foreign worker who is lawfully present
in the U.S. to perform agricultural
labor or services of a temporary or seasonal
nature
pursuant
to
sec.
101(a)(15)(H)(ii)(a) of the INA, as
amended.
INA/Act means the Immigration and
Nationality Act, as amended, 8 U.S.C.
1101 et seq.
Job offer means the offer made by an
employer or potential employer of H–
2A workers to eligible workers describing all the material terms and conditions of employment, including those
relating to wages, working conditions,
and other benefits.
Job opportunity means a job opening
for temporary, full-time employment
at a place in the U.S. to which a U.S.
worker can be referred.
Joint employment means that where
two or more employers each have sufficient definitional indicia of employment to be considered the employer of
an employee, those employers will be
considered to jointly employ that employee. Each employer in a joint employment relationship to an employee
is considered a ‘‘joint employer’’ of
that employee.
Office of Foreign Labor Certification
(OFLC) means the organizational component of the ETA that provides national leadership and policy guidance
and develops regulations and procedures to carry out the responsibilities
of the Secretary under the INA concerning the admission of foreign workers to the U.S. to perform work described in sec. 101(a)(15)(H)(ii)(a) of the
INA, as amended.
Positive recruitment means the active
participation of an employer or its authorized hiring agent in recruiting and
interviewing qualified and eligible individuals in the area where the employer’s job opportunity is located and any
other State designated by the Secretary as an area of traditional or expected labor supply with respect to the
area where the employer’s job opportunity is located, in an effort to fill
specific job openings with U.S. workers.
Prevailing means with respect to
practices engaged in by employers and
benefits other than wages provided by
employers, that:
(1) Fifty percent or more of employers in an area and for an occupation engage in the practice or offer the benefit; but only if
(2) This 50 percent or more of employers also employs in aggregate 50 percent or more of U.S. workers in the occupation and area (including H–2A and
non-H–2A employers for purposes of determinations concerning the provision
of family housing, frequency of wage
payments, and workers supplying their
own bedding, but non-H–2A employers
only for determinations concerning the
provision of advance transportation
and the utilization of H–2ALCs).
Prevailing hourly wage means the
hourly wage determined by the SWA to
be prevailing in the area in accordance
with State-based wage surveys.
Prevailing piece rate means that
amount that is typically paid to an agricultural worker per piece (which includes, but is not limited to, a load,
bin, pallet, bag, bushel, etc.) to be determined by the SWA according to a
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§ 502.10
methodology published by the Department. As is currently the case, the unit
of production will be required to be
clearly described; e.g., a field box of oranges (11⁄2 bushels), a bushel of potatoes, and Eastern apple box (11⁄2 metric
bushels), a flat of strawberries (twelve
quarts), etc.
Representative means a person or entity employed by, or duly authorized to
act on behalf of, the employer with respect to activities entered into for,
and/or attestations made with respect
to, the Application for Temporary Employment Certification.
Secretary means the Secretary of the
United States Department of Labor or
the Secretary’s designee.
State Workforce Agency (SWA) means
the State government agency that receives funds pursuant to the WagnerPeyser Act to administer the public
labor exchange delivered through the
State’s One-Stop delivery system in accordance with the Wagner-Peyser Act,
29 U.S.C. 49, et seq. Separately, SWAs
receive ETA grants, administered by
OFLC, to assist them in performing
certain activities related to foreign
labor certification, including conducting housing inspections.
Successor in interest means that, in determining whether an employer is a
successor in interest, the factors used
under Title VII of the Civil Rights Act
and the Vietnam Era Veterans’ Readjustment Assistance Act will be considered. When considering whether an employer is a successor for purposes of
this part, the primary consideration
will be the personal involvement of the
firm’s ownership, management, supervisors, and others associated with the
firm in the violations resulting in a debarment recommendation. Normally,
wholly new management or ownership
of the same business operation, one in
which the former management or
owner does not retain a direct or indirect interest, will not be deemed to be
a successor in interest for purposes of
debarment. A determination of whether or not a successor in interest exists
is based on the entire circumstances
viewed in their totality. The factors to
be considered include:
(1) Substantial continuity of the
same business operations;
(2) Use of the same facilities;
(3) Continuity of the work force;
(4) Similarity of jobs and working
conditions;
(5) Similarity of supervisory personnel;
(6) Similarity in machinery, equipment, and production methods;
(7) Similarity of products and services; and
(8) The ability of the predecessor to
provide relief.
Temporary agricultural labor certification means the certification made by
the Secretary with respect to an employer seeking to file with DHS a visa
petition to employ one or more foreign
nationals as an H–2A worker, pursuant
to secs. 101(a)(15)(H)(ii)(a), 214(a) and
(c), and 218 of the INA that:
(1) There are not sufficient workers
who are able, willing, and qualified,
and who will be available at the time
and place needed, to perform the agricultural labor or services involved in
the petition, and
(2) The employment of the foreign
worker in such agricultural labor or
services will not adversely affect the
wages and working conditions of workers in the U.S. similarly employed as
stated at 8 U.S.C. 1101(a)(15)(H)(ii)(a),
1184(a) and (c), and 1188.
United States (U.S.), when used in a
geographic sense, means the continental United States, Alaska, Hawaii,
the Commonwealth of Puerto Rico, and
the territories of Guam, the Virgin Islands, and, as of the transition program effective date, as defined in the
Consolidated Natural Resources Act of
2008, Public Law 110–229, Title VII, the
Commonwealth of the Northern Mariana Islands.
U.S. worker means a worker who is:
(1) A citizen or national of the U.S.,
or;
(2) An alien who is lawfully admitted
for permanent residence in the U.S., is
admitted as a refugee under sec. 207 of
the INA, is granted asylum under sec.
208 of the INA, or is an immigrant otherwise authorized (by the INA or by
DHS) to be employed in the U.S.
Wages means all forms of cash remuneration to a worker by an employer in
payment for personal services.
Work contract means all the material
terms and conditions of employment
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§ 502.10
29 CFR Ch. V (7–1–19 Edition)
relating to wages, hours, working conditions, and other benefits, required by
the applicable regulations in subpart B
of 20 CFR part 655, Labor Certification
for Temporary Agricultural Employment
of H–2A Aliens in the U.S. (H–2A Workers), or these regulations, including
those terms and conditions attested to
by the H–2A employer, which contract
between the employer and the worker
may be in the form of a separate written document. In the absence of a separate written work contract incorporating the required terms and conditions of employment, agreed to by both
the employer and the worker, the work
contract at a minimum shall be the
terms of the job order, as provided in 20
CFR part 653, subpart F, and covered
provisions of the work contract shall
be enforced in accordance with these
regulations.
(b) Definition of agricultural labor or
services of a temporary or seasonal nature. For the purposes of this part, agricultural labor or services of a temporary
or seasonal nature means the following:
(1) Agricultural labor or services, pursuant to sec. 101(a)(15)(H)(ii)(a) of the INA
(8 U.S.C. 1101(a)(15)(H)(ii)(a)), is defined
as:
(i) Agricultural labor as defined and
applied in sec. 3121(g) of the Internal
Revenue Code of 1954 at 26 U.S.C.
3121(g);
(ii) Agriculture as defined and applied
in sec. 3(f) of the Fair Labor Standards
Act of 1938 (FLSA) at 29 U.S.C. 203(f)
(Work performed by H–2A workers, or
workers in corresponding employment,
that is not defined as agriculture in
sec. 3(f) is subject to the provisions of
the FLSA as provided therein, including the overtime provisions in sec. 7(a)
at 29 U.S.C. 207(a));
(iii) The pressing of apples for cider
on a farm;
(iv) Logging employment; or
(v) Handling, planting, drying, packing, packaging, processing, freezing,
grading, storing, or delivering to storage or to market or to a carrier for
transportation to market, in its unmanufactured state, any agricultural
or horticultural commodity while in
the employ of the operator of a farm
where no H–2B workers are employed
to perform the same work at the same
establishment; or
(vi) Other work typically performed
on a farm that is not specifically listed
on the Application for Temporary Employment Certification and is minor (i.e.,
less than 20 percent of the total time
worked on the job duties and activities
that are listed on the Application for
Temporary Employment Certification) and
incidental to the agricultural labor or
services for which the H–2A worker was
sought.
(2) An occupation included in either
of the statutory definitions cited in
paragraphs (b)(1)(i) and (ii) of this section is agricultural labor or services, notwithstanding the exclusion of that occupation from the other statutory definition.
(i) Agricultural labor for purposes of
paragraph (b)(1)(i) of this section
means all services performed:
(A) On a farm, in the employ of any
person, in connection with cultivating
the soil, or in connection with raising
or harvesting any agricultural or horticultural commodity, including the
raising, shearing, feeding, caring for,
training, and management of livestock,
bees, poultry, and furbearing animals
and wildlife;
(B) In the employ of the owner or
tenant or other operator of a farm, in
connection with the operation or maintenance of such farm and its tools and
equipment, or in salvaging timber or
clearing land of brush and other debris
left by a hurricane, if the major part of
such service is performed on a farm;
(C) In connection with the production
or harvesting of any commodity defined as an agricultural commodity in
sec. 15(g) of the Agricultural Marketing
Act, as amended at 12 U.S.C. 1141j, or in
connection with the ginning of cotton,
or in connection with the operation or
maintenance of ditches, canals, reservoirs, or waterways, not owned or operated for profit, used exclusively for
supplying and storing water for farming purposes;
(D)(1) In the employ of the operator
of a farm in handling, planting, drying,
packing, packaging, processing, freezing, grading, storing, or delivering to
storage or to market or to a carrier for
transportation to market, in its unmanufactured state, any agricultural
or horticultural commodity, but only if
such operator produced more than one-
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Wage and Hour Division, Labor
§ 502.10
half of the commodity with respect to
which such service is performed;
(2) In the employ of a group of operators of farms (other than a cooperative
organization) in the performance of
service
described
in
paragraph
(b)(2)(i)(A) of this section, but only if
such operators produced all of the commodity with respect to which such
service is performed. For purposes of
this paragraph, any unincorporated
group of operators will be deemed a cooperative organization if the number of
operators comprising such group is
more than 20 at any time during the
calendar quarter in which such service
is performed;
(3) The provisions of paragraphs
(b)(2)(i)(D)(1) and (2) of this section do
not apply to services performed in connection with commercial canning or
commercial freezing or in connection
with any agricultural or horticultural
commodity after its delivery to a terminal market for distribution for consumption; or
(4) On a farm operated for profit if
such service is not in the course of the
employer’s trade or business and is not
domestic service in a private home of
the employer.
(E) For the purposes of this section,
the term farm includes stock, dairy,
poultry, fruit, fur-bearing animals, and
truck farms, plantations, ranches,
nurseries, ranges, greenhouses or other
similar structures used primarily for
the raising of agricultural or horticultural commodities, and orchards.
See sec. 3121(g) of the Internal Revenue
Code of 1986 (26 U.S.C. 3121(g)).
(ii) Agriculture. For purposes of paragraph (b)(1)(ii) of this section agriculture means farming in all its
branches and among other things includes the cultivation and tillage of
the soil, dairying, the production, cultivation, growing, and harvesting of
any agricultural or horticultural commodities (including commodities as defined as agricultural commodities in 12
U.S.C. 1141j(g)), the raising of livestock, bees, fur-bearing animals, or
poultry, and any practices (including
any forestry or lumbering operations)
performed by a farmer or on a farm as
an incident to or in conjunction with
such farming operations, including
preparation for market, delivery to
storage or to market or to carriers for
transportation to market. See sec. 29
U.S.C. 203(f), as amended.
(iii) Agricultural commodity. For purposes of paragraph (b)(1)(ii) of this section, agricultural commodity includes, in
addition to other agricultural commodities, crude gum (oleoresin) from a living tree, and gum spirits of turpentine
and gum rosin as processed by the
original producer of the crude gum
(oleoresin) from which derived. Gum
spirits of turpentine means spirits of turpentine made from gum (oleoresin)
from a living tree and gum rosin means
rosin remaining after the distillation
of gum spirits of turpentine. See 12
U.S.C. 1141j(g) (sec. 15(g) of the Agricultural Marketing Act, as amended), and
7 U.S.C. 92.
(3) Of a temporary or seasonal nature—
(i) On a seasonal or other temporary
basis. For the purposes of this part, of a
temporary or seasonal nature means on a
seasonal or other temporary basis, as defined in the WHD’s regulation at 29
CFR 500.20 under the Migrant and Seasonal Agricultural Worker Protection
Act (MSPA).
(ii) MSPA definition. The definition of
on a seasonal or other temporary basis
found in MSPA is summarized as follows:
(A) Labor is performed on a seasonal
basis where, ordinarily, the employment pertains to or is of the kind exclusively performed at certain seasons
or periods of the year and which, from
its nature, may not be continuous or
carried on throughout the year. A
worker who moves from one seasonal
activity to another, while employed in
agriculture or performing agricultural
labor, is employed on a seasonal basis
even though the worker may continue
to be employed during a major portion
of the year.
(B) A worker is employed on other
temporary basis where the worker is employed for a limited time only or the
worker’s performance is contemplated
for a particular piece of work, usually
of short duration. Generally, employment which is contemplated to continue indefinitely is not temporary.
(C) On a seasonal or other temporary
basis does not include
(1) The employment of any foreman
or other supervisory employee who is
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§ 502.15
29 CFR Ch. V (7–1–19 Edition)
employer, a successor in interest, or in
the case of an H–2ALC also by claim
against any surety who issued a bond
to the H–2ALC); the enforcement of
covered provisions of the work contract as set forth in 29 CFR 501.10(a);
the assessment of a civil money penalty; reinstatement; or the recommendation of debarment for up to 3
years.
(b) Petition any appropriate District
Court of the U.S. for temporary or permanent injunctive relief, including the
withholding of unpaid wages and/or reinstatement, to restrain violation of
the H–2A provisions of the INA, 20 CFR
part 655, Subpart B, or these regulations by any person.
(c) Petition any appropriate District
Court of the U.S. for specific performance of covered contractual obligations.
employed by a specific agricultural employer or agricultural association essentially on a year round basis; or
(2) The employment of any worker
who is living at his or her permanent
place of residence, when that worker is
employed by a specific agricultural employer or agricultural association on
essentially a year round basis to perform a variety of tasks for his or her
employer and is not primarily employed to do field work.
(iii) Temporary. For the purposes of
this part, the definition of temporary in
paragraph (b)(3) of this section refers
to any job opportunity covered by this
part where the employer needs a worker for a position for a limited period of
time, including, but not limited, to a
peakload need, which is generally less
than 1 year, unless the original temporary agricultural labor certification
is extended pursuant to 20 CFR 655.110.
§ 502.17 Concurrent actions.
The taking of any one of the actions
referred to above shall not be a bar to
the concurrent taking of any other action authorized by the H–2A provisions
of the Act and these regulations, or the
regulations of 20 CFR part 655.
Subpart B—Enforcement of Work
Contracts
§ 502.15 Enforcement.
The investigation, inspections and
law enforcement functions to carry out
the provisions of sec. 218 of the INA, as
provided in these regulations for enforcement by the WHD, pertain to the
employment of any H–2A worker and
any other U.S. worker hired in corresponding employment by an H–2A
employer. Such enforcement includes
work contract provisions as defined in
§ 501.10(a). The work contract also includes those employment benefits
which are required to be stated in the
job offer, as prescribed in 20 CFR
655.104.
§ 502.18 Representation of the Secretary.
(a) Except as provided in 28 U.S.C.
518(a) relating to litigation before the
Supreme Court, the Solicitor of Labor
may appear for and represent the Secretary in any civil litigation brought
under the Act.
(b) The Solicitor of Labor, through
authorized representatives, shall represent the Administrator, WHD and the
Secretary in all administrative hearings under the H–2A provisions of the
Act and these regulations.
§ 502.16 Sanctions and remedies—General.
Whenever the Secretary believes that
the H–2A provisions of the INA or these
regulations have been violated such action shall be taken and such proceedings instituted as deemed appropriate, including (but not limited to)
the following:
(a) Institute appropriate administrative proceedings, including: The recovery of unpaid wages, including wages
owed to U.S. workers as a result of a
layoff or displacement prohibited by
these rules (either directly from the
§ 502.19 Civil money penalty assessment.
(a) A civil money penalty may be assessed by the Administrator, WHD for
each violation of the work contract as
set forth in § 501.10(a) of these regulations.
(b) In determining the amount of
penalty to be assessed for any violation
of the work contract as provided in the
H–2A provisions of the Act or these
regulations the Administrator, WHD
shall consider the type of violation
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Wage and Hour Division, Labor
§ 502.20
committed and other relevant factors.
The matters which may be considered
include, but are not limited to, the following:
(1) Previous history of violation or
violations of the H–2A provisions of the
Act and these regulations;
(2) The number of H–2A employees,
corresponding U.S. employees or those
U.S. workers individually rejected for
employment affected by the violation
or violations;
(3) The gravity of the violation or
violations;
(4) Efforts made in good faith to comply with the H–2A provisions of the Act
and these regulations;
(5) Explanation of person charged
with the violation or violations;
(6) Commitment to future compliance, taking into account the public
health, interest or safety, and whether
the person has previously violated the
H–2A provisions of the Act;
(7) The extent to which the violator
achieved a financial gain due to the
violation, or the potential financial
loss or potential injury to the workers.
(c) A civil money penalty for violation of the work contract will not exceed $1,000 for each violation committed (with each failure to pay a
worker properly or to honor the terms
or conditions of a worker’s employment that is required by sec. 218 of the
INA, 20 CFR 655, subpart B, or these
regulations constituting a separate
violation), with the following exceptions:
(1) For a willful failure to meet a
covered condition of the work contract,
or for willful discrimination, the civil
money penalty shall not exceed $5,000
for each such violation committed
(with each willful failure to honor the
terms or conditions of a worker’s employment that are required by sec. 218
of the INA, 20 CFR 655, subpart B, or
these regulations constituting a separate violation);
(2) For a violation of a housing or
transportation safety and health provision of the work contract that proximately causes the death or serious injury of any worker, the civil money
penalty shall not exceed $25,000 per
worker, unless the violation is a repeat
or willful violation, in which case the
penalty shall not exceed $50,000 per
worker, or unless the employer failed,
after notification, to cure the specific
violation, in which case the penalty
shall not exceed $100,000 per worker.
(3) For purposes of paragraph (c)(2) of
this section, the term serious injury
means:
(i) Permanent loss or substantial impairment of one of the senses (sight,
hearing, taste, smell, tactile sensation);
(ii) Permanent loss or substantial impairment of the function of a bodily
member, organ, or mental faculty, including the loss of all or part of an
arm, leg, foot, hand or other body part;
or
(iii) Permanent paralysis or substantial impairment that causes loss of
movement or mobility of an arm, leg,
foot, hand or other body part.
(d) A civil money penalty for failure
to cooperate with a WHD investigation
shall not exceed $5,000 per investigation;
(e) For a willful layoff or displacement of any similarly employed U.S.
worker in the occupation that is the
subject of the Application for Temporary
Employment Certification in the area of
intended employment within 60 days of
the date of need other than for a lawful, job-related reason, except that
such layoff shall be permitted where all
H–2A workers were laid off first, the
civil penalty shall not exceed $10,000
per violation per worker.
§ 502.20 Debarment and revocation.
(a) The WHD shall recommend to the
Administrator, OFLC the debarment of
any employer and any successor in interest to that employer (or the employer’s attorney or agent if they are a responsible party) if the WHD finds that
the employer substantially violated a
material term or condition of its temporary labor certification for the employment of domestic or nonimmigrant
workers.
(b) For purposes of this section, a
substantial violation includes:
(1) A pattern or practice of acts of
commission or omission on the part of
the employer or the employer’s agent
which:
(i) Are significantly injurious to the
wages, benefits required to be offered
under the H–2A program, or working
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§ 502.21
29 CFR Ch. V (7–1–19 Edition)
conditions of a significant number of
the employer’s U.S. or H–2A workers;
(ii) Reflect a significant failure to
offer employment to all qualified domestic workers who applied for the job
opportunity for which certification was
being sought, except for lawful job-related reasons;
(iii) Reflect a willful failure to comply with the employer’s obligations to
recruit U.S. workers as set forth in this
subpart; or
(iv) Reflect the employment of an H–
2A worker outside the area of intended
employment, or in an activity/activities, not listed in the job order (other
than an activity minor and incidental
to the activity/activities listed in the
job order), or after the period of employment specified in the job order and
any approved extension;
(2) A significant failure to cooperate
with a DOL investigation or with a
DOL official performing an investigation, inspection, or law enforcement
function under sec. 218 of the INA, 8
U.S.C. 1188, this subpart, or 29 CFR
part 501 (ESA enforcement of contractual obligations); or
(3) A significant failure to comply
with one or more sanctions or remedies
imposed by the ESA for violation(s) of
obligations found by that agency (if applicable), or with one or more decisions
or orders of the Secretary or a court
order secured by the Secretary under
sec. 218 of the INA, 8 U.S.C. 1188, this
subpart, or 29 CFR part 501 (ESA enforcement of contractual obligations);
or
(4) A single heinous act showing such
flagrant disregard for the law that future compliance with program requirements cannot reasonably be expected.
(c) Procedures for Debarment Recommendation. The WHD will send to
the employer a Notice of Recommended
Debarment. The Notice of Recommended
Debarment must be in writing, must
state the reason for the debarment recommendation, including a detailed explanation of the grounds for and the
duration of the recommended debarment. The debarment recommendation
will be forwarded to the Administrator,
OFLC. The Notice of Recommended Debarment shall be issued no later than 2
years after the occurrence of the violation.
(d) The WHD may recommend to the
Administrator, OFLC the revocation of
a temporary agricultural labor certification if the WHD finds that the employer:
(1) Willfully violated a material term
or condition of the approved temporary
agricultural labor certification, work
contract, or this part, unless otherwise
provided
under
paragraphs
(d)(2)
through (4) of this section.
(2) Failed, after notification, to cure
a substantial violation of the applicable housing standards set out in 20 CFR
655.104(d);
(3) Failed to cooperate with a DOL
investigation or with a DOL official
performing an investigation, inspection, or law enforcement function
under sec. 218 of the INA, 8 U.S.C. 1188,
this subpart, or 29 CFR part 501 (ESA
enforcement of contractual obligations); or
(4) Failed to comply with one or more
sanctions or remedies imposed by the
ESA for violation(s) of obligations
found by that agency (if applicable), or
with one or more decisions or orders of
the Secretary or a court order Secured
by the Secretary under sec. 218 of the
INA, 8 U.S.C. 1188, this subpart, or 29
CFR part 501 (ESA enforcement of contractual obligations).
(e) In considering a recommendation
made by the WHD to debar an employer or to revoke a temporary agricultural labor certification, the Administrator, OFLC shall treat final
agency determinations that the employer has committed a violation as res
judicata and shall not reconsider those
determinations.
§ 502.21 Failure to cooperate with investigations.
No person shall refuse to cooperate
with any employee of the Secretary
who is exercising or attempting to exercise this investigative or enforcement authority. As stated in §§ 501.6
and 501.19 of this part, a civil money
penalty may be assessed for each failure to cooperate with an investigation,
and other appropriate relief may be
sought. In addition, the WHD shall report each such occurrence to ETA, and
ETA may debar the employer from future certification. The WHD may also
recommend to ETA that an existing
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Wage and Hour Division, Labor
§ 502.33
certification be revoked. The taking of
any one action shall not bar the taking
of any additional action.
§ 502.32
§ 502.22 Civil money penalties—payment and collection.
Where the assessment is directed in a
final order by the Administrator, WHD,
by an ALJ, or by the ARB, the amount
of the penalty is due within 30 days and
payable to the United States Department of Labor. The person assessed
such penalty shall remit promptly the
amount thereof as finally determined,
to the Administrator, WHD by certified
check or by money order, made payable
to the order of Wage and Hour Division,
United States Department of Labor. The
remittance shall be delivered or mailed
to the WHD Regional Office for the
area in which the violations occurred.
§ 502.33
of
Request for hearing.
(a) Any person desiring review of a
determination referred to in § 501.32, including judicial review, shall make a
written request for an administrative
hearing to the official who issued the
determination at the WHD address appearing on the determination notice,
no later than 30 days after issuance of
the notice referred to in § 501.32.
(b) No particular form is prescribed
for any request for hearing permitted
by this part. However, any such request
shall:
(1) Be typewritten or legibly written;
(2) Specify the issue or issues stated
in the notice of determination giving
rise to such request;
(3) State the specific reason or reasons why the person requesting the
hearing believes such determination is
in error;
(4) Be signed by the person making
the request or by an authorized representative of such person; and
(5) Include the address at which such
person or authorized representative desires to receive further communications relating thereto.
(c) The request for such hearing must
be received by the official who issued
the determination, at the WHD address
appearing on the determination notice,
within the time set forth in paragraph
(a) of this section. For the affected person’s protection, if the request is by
mail, it should be by certified mail.
Subpart C—Administrative
Proceedings
§ 502.30 Applicability
and rules.
Contents of notice.
The notice required by § 501.31 shall:
(a) Set forth the determination of the
Administrator, WHD including the
amount of any unpaid wages due or actions necessary to fulfill a covered contractual obligation, the amount of any
civil money penalty assessment and
the reason or reasons therefore.
(b) Set forth the right to request a
hearing on such determination.
(c) Inform any affected person or persons that in the absence of a timely request for a hearing, the determination
of the Administrator, WHD shall become final and unappealable.
(d) Set forth the time and method for
requesting a hearing, and the procedures relating thereto, as set forth in
§ 501.33.
procedures
The procedures and rules contained
herein prescribe the administrative
process that will be applied with respect to a determination to impose an
assessment of civil money penalties,
and which may be applied to the enforcement of covered provisions of the
work contract as set forth in § 501.10(a),
including the collection of unpaid
wages due as a result of any violation
of the H–2A provisions of the Act or of
these regulations. Except with respect
to the imposition of civil money penalties, the Secretary may, in the Secretary’s discretion, seek enforcement
action in Federal court without resort
to any administrative proceedings.
PROCEDURES RELATING TO HEARING
§ 502.31 Written notice of determination required.
Whenever the Administrator, WHD
decides to assess a civil money penalty
or to proceed administratively to enforce covered contractual obligations,
including the recovery of unpaid wages,
the person against whom such action is
taken shall be notified in writing of
such determination.
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§ 502.34
29 CFR Ch. V (7–1–19 Edition)
(d) The determination shall take effect on the start date identified in the
determination, unless an administrative appeal is properly filed. The timely filing of an administrative appeal
stays the determination pending the
outcome of the appeal proceedings.
ative of such person, to the Chief Administrative Law Judge, for a determination in an administrative proceeding as provided herein. The notice
of administrative determination and
request for hearing shall be filed of
record in the Office of the Chief Administrative Law Judge and shall, respectively, be given the effect of a complaint and answer thereto for purposes
of the administrative proceeding, subject to any amendment that may be
permitted under these regulations or 29
CFR part 18.
(b) A copy of the Order of Reference,
together with a copy of these regulations, shall be served by counsel for the
Administrator, WHD upon the person
requesting the hearing, in the manner
provided in 29 CFR 18.3.
RULES OF PRACTICE
§ 502.34 General.
Except as specifically provided in
these regulations, the Rules of Practice
and Procedure for Administrative Hearings Before the Office of Administrative
Law Judges established by the Secretary at 29 CFR part 18 shall apply to
administrative proceedings described
in this part.
§ 502.35 Commencement of proceeding.
Each administrative proceeding permitted under the Act and these regulations shall be commenced upon receipt
of a timely request for hearing filed in
accordance with § 501.33.
§ 502.38
Notice of docketing.
Upon receipt of an Order of Reference,
the Chief Administrative Law Judge
shall appoint an ALJ to hear the case.
The ALJ shall promptly notify all interested parties of the docketing of the
matter and shall set the time and place
of the hearing. The date of the hearing
shall be not more than 60 days from the
date on which the Order of Reference
was filed.
§ 502.36 Caption of proceeding.
(a) Each administrative proceeding
instituted under the Act and these regulations shall be captioned in the name
of the person requesting such hearing,
and shall be styled as follows:
§ 502.39 Service upon attorneys for the
Department of Labor—number of
copies.
IN THE MATTER OF ll, RESPONDENT.
(b) For the purposes of such administrative proceedings the Administrator,
WHD shall be identified as plaintiff and
the person requesting such hearing
shall be named as respondent.
Two copies of all pleadings and other
documents required for any administrative proceeding provided herein
shall be served on the attorneys for the
DOL. One copy shall be served on the
Associate Solicitor, Division of Fair
Labor Standards, Office of the Solicitor, U.S. Department of Labor, 200
Constitution Avenue, NW., Washington, DC 20210, and one copy on the
Attorney representing the Department
in the proceeding.
REFERRAL FOR HEARING
§ 502.37 Referral to Administrative
Law Judge.
(a) Upon receipt of a timely request
for a hearing filed pursuant to and in
accordance with § 501.33, the Administrator, WHD, by the Associate Solicitor for the Division of Fair Labor
Standards or by the Regional Solicitor
for the Region in which the action
arose, shall, by Order of Reference,
promptly refer a copy of the notice of
administrative determination complained of, and the original or a duplicate copy of the request for hearing
signed by the person requesting such
hearing or by the authorized represent-
PROCEDURES BEFORE ADMINISTRATIVE
LAW JUDGE
§ 502.40
Consent findings and order.
(a) General. At any time after the
commencement of a proceeding under
this part, but prior to the reception of
evidence in any such proceeding, a
party may move to defer the receipt of
any evidence for a reasonable time to
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Wage and Hour Division, Labor
§ 502.42
for, upon each material issue presented
on the record. The decision shall also
include an appropriate order which
may affirm, deny, reverse, or modify,
in whole or in part, the determination
of the Administrator, WHD. The reason
or reasons for such order shall be stated in the decision.
(c) The decision shall be served on all
parties and the Administrative Review
Board (ARB) in person or by certified
mail.
(d) The decision concerning civil
money penalties and/or back wages
when served by the ALJ shall constitute the final agency order unless
the ARB, as provided for in § 501.42, determines to review the decision.
permit negotiation of an agreement
containing consent findings and an
order disposing of the whole or any
part of the proceeding. The allowance
of such deferment and the duration
thereof shall be at the discretion of the
ALJ, after consideration of the nature
of the proceeding, the requirements of
the public interest, the representations
of the parties, and the probability of an
agreement being reached which will result in a just disposition of the issues
involved.
(b) Content. Any agreement containing consent findings and an order
disposing of a proceeding or any part
thereof shall also provide:
(1) That the order shall have the
same force and effect as an order made
after full hearing;
(2) That the entire record on which
any order may be based shall consist
solely of the notice of administrative
determination (or amended notice, if
one is filed), and the agreement;
(3) A waiver of any further procedural steps before the ALJ; and
(4) A waiver of any right to challenge
or contest the validity of the findings
and order entered into in accordance
with the agreement.
(c) Submission. On or before the expiration of the time granted for negotiations, the parties or their authorized
representatives or their counsel may:
(1) Submit the proposed agreement
for consideration by the ALJ; or
(2) Inform the ALJ that agreement
cannot be reached.
(d) Disposition. In the event an agreement containing consent findings and
an order is submitted within the time
allowed therefor, the ALJ, within 30
days thereafter, shall, if satisfied with
its form and substance, accept such
agreement by issuing a decision based
upon the agreed findings.
REVIEW OF ADMINISTRATIVE LAW
JUDGE’S DECISION
§ 502.42 Procedures for initiating and
undertaking review.
(a) A respondent, the WHD, or any
other party wishing review, including
judicial review, of the decision of an
ALJ shall, within 30 days of the decision of the ALJ, petition the ARB to
review the decision. Copies of the petition shall be served on all parties and
on the ALJ. If the ARB does not issue
a notice accepting a petition for review
of the decision concerning civil money
penalties and/or back wages within 30
days after receipt of a timely filing of
the petition, or within 30 days of the
date of the decision if no petition has
been received, the decision of the ALJ
shall be deemed the final agency action. If the ARB does not issue a notice
accepting a petition for review of the
decision concerning the debarment recommendation within 30 days after the
receipt of a timely filing of the petition, or if no petition has been received
by the ARB within 30 days of the date
of the decision, the decision of the ALJ
shall be deemed the final agency action. If a petition for review is accepted, the decision of the ALJ shall be inoperative unless and until the ARB
issues an order affirming the decision.
(b) Whenever the ARB, either on the
ARB’s own motion or by acceptance of
a party’s petition, determines to review the decision of an ALJ, a notice of
the same shall be served upon the ALJ
POST-HEARING PROCEDURES
§ 502.41 Decision and order of Administrative Law Judge.
(a) The ALJ shall prepare, within 60
days after completion of the hearing
and closing of the record, a decision on
the issues referred by the Administrator, WHD.
(b) The decision of the ALJ shall include a statement of findings and conclusions, with reasons and basis there-
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§ 502.43
29 CFR Ch. V (7–1–19 Edition)
and upon all parties to the proceeding
in person or by certified mail.
PART 503—ENFORCEMENT OF OBLIGATIONS
FOR
TEMPORARY
NONIMMIGRANT NON-AGRICULTURAL WORKERS DESCRIBED IN
THE IMMIGRATION AND NATIONALITY ACT
§ 502.43 Responsibility of the Office of
Administrative Law Judges.
Upon receipt of the ARB’s Notice
pursuant to § 501.42 of these regulations, the Office of ALJ shall promptly
forward a copy of the complete hearing
record to the ARB.
Subpart A—General Provisions
Sec.
503.0 Introduction.
503.1 Scope and purpose.
503.2 Territory of Guam.
503.3 Coordination among Governmental
agencies.
503.4 Definition of terms.
503.5 Temporary need.
503.6 Waiver of rights prohibited.
503.7 Investigation authority of Secretary.
503.8 Accuracy of information, statements,
data.
§ 502.44 Additional information, if required.
Where the ARB has determined to review such decision and order, the ARB
shall notify each party of:
(a) The issue or issues raised;
(b) The form in which submissions
shall be made (i.e., briefs, oral argument, etc.); and
(c) The time within which such presentation shall be submitted.
Subpart B—Enforcement
503.15 Enforcement.
503.16 Assurances and obligations of H–2B
employers.
503.17 Documentation retention requirements of H–2B employers.
503.18 Validity of temporary labor certification.
503.19 Violations.
503.20 Sanctions and remedies—general.
503.21 Concurrent actions within the Department of Labor.
503.22 Representation of the Secretary.
503.23 Civil money penalty assessment.
503.24 Debarment.
503.25 Failure to cooperate with investigators.
503.26 Civil money penalties—payment and
collection.
§ 502.45 Final decision of the Administrative Review Board.
The ARB’s final decision shall be
issued within 90 days from the notice
granting the petition and served upon
all parties and the ALJ, in person or by
certified mail.
RECORD
§ 502.46
Retention of official record.
The official record of every completed administrative hearing provided
by these regulations shall be maintained and filed under the custody and
control of the Chief Administrative
Law Judge, or, where the case has been
the subject of administrative review,
the ARB.
Subpart C—Administrative Proceedings
503.40
Applicability of procedures and rules.
PROCEDURES RELATED TO HEARING
§ 502.47
Certification.
503.41
503.42
503.43
Upon receipt of a complaint seeking
review of a decision issued pursuant to
this part filed in a U.S. District Court,
after the administrative remedies have
been exhausted, the Chief Administrative Law Judge or, where the case has
been the subject of administrative review, the ARB shall promptly index,
certify and file with the appropriate
U.S. District Court, a full, true, and
correct copy of the entire record, including the transcript of proceedings.
Administrator, WHD’s determination.
Contents of notice of determination.
Request for hearing.
RULES OF PRACTICE
503.44 General.
503.45 Service of pleadings.
503.46 Commencement of proceeding.
503.47 Caption of proceeding.
503.48 Conduct of proceeding.
PROCEDURES BEFORE ADMINISTRATIVE LAW
JUDGE
503.49
Consent findings and order.
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Wage and Hour Division, Labor
§ 503.1
POST-HEARING PROCEDURES
authority in carrying out the Secretary of Labor’s consultative function
to issue regulations regarding the
issuance of temporary labor certifications. DHS regulations at 8 CFR
214.2(h)(6)(iv) provide that an employer’s petition to employ nonimmigrant
workers on H–2B visas for temporary
non-agricultural employment in the
United States (U.S.), except for Guam,
must be accompanied by an approved
temporary labor certification from the
Secretary of Labor. The temporary
labor certification reflects a determination by the Secretary that:
(1) There are not sufficient U.S.
workers who are qualified and who will
be available to perform the temporary
services or labor for which an employer
desires to hire foreign workers; and
(2) The employment of the foreign
worker will not adversely affect the
wages and working conditions of U.S.
workers similarly employed.
(b) Role of the Employment and Training Administration (ETA). The issuance
and denial of labor certifications for
purposes of satisfying the consultation
requirement in 8 U.S.C. 1184(c), INA
section 214(c), has been delegated by
the Secretary to ETA, an agency within the U.S. Department of Labor
(DOL), which in turn has delegated
that authority to the Office of Foreign
Labor Certification (OFLC). In general,
matters concerning the obligations of
an H–2B employer related to the temporary labor certification process are
administered by OFLC, including obligations and assurances made by employers, overseeing employer recruitment, and assuring program integrity.
The regulations pertaining to the
issuance, denial, and revocation of
labor certification for temporary foreign workers by the OFLC are found in
20 CFR part 655, subpart A.
(c) Role of the Wage and Hour Division
(WHD). Effective January 18, 2009, DHS
has delegated to the Secretary under 8
U.S.C.
1184(c)(14)(B),
section
214(c)(14)(B) of the INA, certain investigatory and law enforcement functions to carry out the provisions under
8 U.S.C. 1184(c), INA section 214(c). The
Secretary has delegated these functions to the WHD. In general, matters
concerning the rights of H–2B workers
503.50 Decision and order of Administrative
Law Judge.
REVIEW OF ADMINISTRATIVE LAW JUDGE’S
DECISION
503.51 Procedures for initiating and undertaking review.
503.52 Responsibility of the Office of Administrative Law Judges (OALJ).
503.53 Additional information, if required.
503.54 Submission of documents to the Administrative Review Board.
503.55 Final decision of the Administrative
Review Board.
RECORD
503.56
Retention of official record.
AUTHORITY: 8 U.S.C. 1101(a)(15)(H)(ii)(b); 8
U.S.C. 1184; 8 CFR 214.2(h); 28 U.S.C. 2461 note
(Federal Civil Penalties Inflation Adjustment Act of 1990); Pub. L. 114–74 at § 701.
SOURCE: 80 FR 24130, Apr. 29, 2015, unless
otherwise noted.
Subpart A—General Provisions
§ 503.0 Introduction.
The regulations in this part cover the
enforcement of all statutory and regulatory obligations, including requirements under 8 U.S.C. 1184(c), section
214(c) of the INA and 20 CFR part 655,
subpart A, applicable to the employment of H–2B workers in nonimmigrant
status under the Immigration and Nationality
Act
(INA),
8
U.S.C.
1101(a)(15)(H)(ii)(b),
section
101(a)(15)(H)(ii)(b) of the INA, and
workers in corresponding employment,
including obligations to offer employment to eligible United States (U.S.)
workers and to not lay off or displace
U.S. workers in a manner prohibited by
the regulations in this part or 20 CFR
part 655, subpart A.
§ 503.1 Scope and purpose.
(a) Consultation standard. Section
214(c)(1) of the INA, 8 U.S.C. 1184(c)(1),
requires the Secretary of Homeland Security to consult with appropriate
agencies before authorizing the classification of aliens as H–2B workers. Department of Homeland Security (DHS)
regulations at 8 CFR 214.2(h)(6)(iii)(D)
recognize the Secretary of Labor as the
appropriate authority with whom DHS
consults regarding the H–2B program,
and recognize the Secretary of Labor’s
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§ 503.2
29 CFR Ch. V (7–1–19 Edition)
and workers in corresponding employment under this part and the employer’s obligations are enforced by the
WHD, including whether employment
was offered to U.S. workers as required
under 20 CFR part 655, subpart A, or
whether U.S. workers were laid off or
displaced in violation of program requirements. The WHD has the responsibility to carry out investigations, inspections, and law enforcement functions and in appropriate instances to
impose penalties, to debar from future
certifications, to recommend revocation of existing certifications, and to
seek remedies for violations, including
recovery of unpaid wages and reinstatement of improperly laid off or displaced U.S. workers.
(d) Effect of regulations. The enforcement functions carried out by the WHD
under 8 U.S.C. 1184(c), INA section
214(c), 20 CFR part 655, subpart A, and
the regulations in this part apply to
the employment of any H–2B worker
and any worker in corresponding employment as the result of an Application for Temporary Employment Certification filed with the Department of
Labor on or after April 29, 2015.
§ 503.2
priate, including the Department of
State (DOS) and DHS.
(c) A specific violation for which debarment is sought will be cited in a
single debarment proceeding. OFLC
and the WHD will coordinate their activities to achieve this result. Copies of
final debarment decisions will be forwarded to DHS promptly.
§ 503.4
Territory of Guam.
This part does not apply to temporary employment in the Territory of
Guam. The Department of Labor does
not certify to DHS the temporary employment of nonimmigrant foreign
workers or enforce compliance with the
provisions of the H–2B visa program in
the Territory of Guam.
§ 503.3 Coordination
mental agencies.
among
Definition of terms.
For purposes of this part:
Act means the Immigration and Nationality Act or INA, as amended, 8
U.S.C. 1101 et seq.
Administrative Law Judge (ALJ) means
a person within the Department’s Office of Administrative Law Judges appointed under 5 U.S.C. 3105.
Administrator, Office of Foreign Labor
Certification (OFLC) means the primary
official of the Office of Foreign Labor
Certification, ETA, or the Administrator’s designee.
Administrator, Wage and Hour Division
(WHD) means the primary official of
the WHD, or the Administrator’s designee.
Agent means:
(1) A legal entity or person who:
(i) Is authorized to act on behalf of
an employer for temporary nonagricultural labor certification purposes;
(ii) Is not itself an employer, or a
joint employer, as defined in this part
with respect to a specific application;
and
(iii) Is not an association or other organization of employers.
(2) No agent who is under suspension,
debarment, expulsion, disbarment, or
otherwise restricted from practice before any court, the Department of
Labor, the Executive Office for Immigration Review under 8 CFR 1003.101, or
DHS under 8 CFR 292.3 may represent
an employer under this part.
Agricultural labor or services means
those duties and occupations defined in
20 CFR part 655, subpart B.
Applicant means a U.S. worker who is
applying for a job opportunity for
which an employer has filed an Application for Temporary Employment Certification (ETA Form 9142B and the appropriate appendices).
Govern-
(a) Complaints received by ETA or
any State Workforce Agency (SWA) regarding noncompliance with H–2B statutory or regulatory labor standards
will be immediately forwarded to the
appropriate WHD office for suitable action under the regulations in this part.
(b) Information received in the
course of processing registrations and
applications, program integrity measures, or enforcement actions may be
shared between OFLC and WHD or,
where applicable to employer enforcement under the H–2B program, may be
forwarded to other agencies as appro-
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Wage and Hour Division, Labor
§ 503.4
Application for Temporary Employment
Certification means the Office of Management and Budget (OMB)-approved
ETA Form 9142B and the appropriate
appendices, a valid wage determination, as required by 20 CFR 655.10, and
a subsequently-filed U.S. worker recruitment report, submitted by an employer to secure a temporary labor certification determination from DOL.
Area of intended employment means
the geographic area within normal
commuting distance of the place
(worksite address) of the job opportunity for which the certification is
sought. There is no rigid measure of
distance that constitutes a normal
commuting distance or normal commuting area, because there may be
widely varying factual circumstances
among different areas (e.g., average
commuting times, barriers to reaching
the worksite, or quality of the regional
transportation network). If the place of
intended employment is within a Metropolitan Statistical Area (MSA), including a multistate MSA, any place
within the MSA is deemed to be within
normal commuting distance of the
place of intended employment. The
borders of MSAs are not controlling in
the identification of the normal commuting area; a location outside of an
MSA may be within normal commuting
distance of a location that is inside
(e.g., near the border of) the MSA.
Attorney means any person who is a
member in good standing of the bar of
the highest court of any State, possession, territory, or commonwealth of
the U.S., or the District of Columbia.
No attorney who is under suspension,
debarment, expulsion, disbarment, or
otherwise restricted from practice before any court, the Department of
Labor, the Executive Office for Immigration Review under 8 CFR 1003.101, or
DHS under 8 CFR 292.3 may represent
an employer under this part.
Certifying Officer (CO) means an
OFLC official designated by the Administrator, OFLC to make determinations on applications under the H–2B
program. The Administrator, OFLC is
the National CO. Other COs may also
be designated by the Administrator,
OFLC to make the determinations required under 20 CFR part 655, subpart
A.
Chief Administrative Law Judge (Chief
ALJ) means the chief official of the Department’s Office of Administrative
Law Judges or the Chief Administrative Law Judge’s designee.
Corresponding employment means:
(1) The employment of workers who
are not H–2B workers by an employer
that has a certified H–2B Application for
Temporary
Employment
Certification
when those workers are performing either substantially the same work included in the job order or substantially
the same work performed by the H–2B
workers, except that workers in the
following two categories are not included in corresponding employment:
(i) Incumbent employees continuously employed by the H–2B employer
to perform substantially the same
work included in the job order or substantially the same work performed by
the H–2B workers during the 52 weeks
prior to the period of employment certified on the Application for Temporary
Employment Certification and who have
worked or been paid for at least 35
hours in at least 48 of the prior 52
workweeks, and who have worked or
been paid for an average of at least 35
hours per week over the prior 52 weeks,
as demonstrated on the employer’s
payroll records, provided that the
terms and working conditions of their
employment are not substantially reduced during the period of employment
covered by the job order. In determining whether this standard was met,
the employer may take credit for any
hours that were reduced by the employee voluntarily choosing not to
work due to personal reasons such as
illness or vacation; or
(ii) Incumbent employees covered by
a collective bargaining agreement or
an individual employment contract
that guarantees both an offer of at
least 35 hours of work each workweek
and continued employment with the H–
2B employer at least through the period of employment covered by the job
order, except that the employee may be
dismissed for cause.
(2) To qualify as corresponding employment, the work must be performed
during the period of the job order, including any approved extension thereof.
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§ 503.4
29 CFR Ch. V (7–1–19 Edition)
Date of need means the first date the
employer requires services of the H–2B
workers as listed on the Application for
Temporary Employment Certification.
Department of Homeland Security
(DHS) means the Federal Department
having jurisdiction over certain immigration-related
functions,
acting
through its component agencies, including U.S. Citizenship and Immigration Services (USCIS).
Employee means a person who is engaged to perform work for an employer, as defined under the general
common law. Some of the factors relevant to the determination of employee status include: The hiring party’s right to control the manner and
means by which the work is accomplished; the skill required to perform
the work; the source of the instrumentalities and tools for accomplishing the
work; the location of the work; the hiring party’s discretion over when and
how long to work; and whether the
work is part of the regular business of
the hiring party. Other applicable factors may be considered and no one factor is dispositive. The terms employee
and worker are used interchangeably in
this part.
Employer means a person (including
any individual, partnership, association, corporation, cooperative, firm,
joint stock company, trust, or other
organization with legal rights and duties) that:
(1) Has a place of business (physical
location) in the U.S. and a means by
which it may be contacted for employment;
(2) Has an employer relationship
(such as the ability to hire, pay, fire,
supervise or otherwise control the
work of employees) with respect to an
H–2B worker or a worker in corresponding employment; and
(3) Possesses, for purposes of filing an
Application for Temporary Employment
Certification, a valid Federal Employer
Identification Number (FEIN).
Employment and Training Administration (ETA) means the agency within the
Department of Labor that includes
OFLC and has been delegated authority
by the Secretary to fulfill the Secretary’s mandate under the DHS regulations for the administration and adjudication of an Application for Tem-
porary Employment Certification and related functions.
Federal holiday means a legal public
holiday as defined at 5 U.S.C. 6103.
Full-time means 35 or more hours of
work per week.
H–2B Petition means the DHS Form I–
129 Petition for a Nonimmigrant Worker,
with H Supplement, or successor form
or supplement, and accompanying documentation required by DHS for employers seeking to employ foreign persons as H–2B nonimmigrant workers.
H–2B Registration means the OMB-approved ETA Form 9155, submitted by
an employer to register its intent to
hire H–2B workers and to file an Application for Temporary Employment Certification.
H–2B worker means any temporary
foreign worker who is lawfully present
in the U.S. and authorized by DHS to
perform nonagricultural labor or services of a temporary or seasonal nature
under 8 U.S.C. 1101(a)(15)(H)(ii)(b), INA
section 101(a)(15)(H)(ii)(b).
Job contractor means a person, association, firm, or a corporation that
meets the definition of an employer
and that contracts services or labor on
a temporary basis to one or more employers, which is not an affiliate,
branch or subsidiary of the job contractor and where the job contractor
will not exercise substantial, direct
day-to-day supervision and control in
the performance of the services or
labor to be performed other than hiring, paying and firing the workers.
Job offer means the offer made by an
employer or potential employer of H–
2B workers to both U.S. and H–2B
workers describing all the material
terms and conditions of employment,
including those relating to wages,
working conditions, and other benefits.
Job opportunity means one or more
openings for full-time employment
with the petitioning employer within a
specified area(s) of intended employment for which the petitioning employer is seeking workers.
Job order means the document containing the material terms and conditions of employment relating to wages,
hours, working conditions, worksite
and other benefits, including obligations and assurances under 29 CFR part
655, subpart A and this subpart that is
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Wage and Hour Division, Labor
§ 503.4
mination, or Application for Temporary
Employment Certification.
Prevailing wage determination (PWD)
means the prevailing wage for the position, as described in 20 CFR 655.10, that
is the subject of the Application for
Temporary Employment Certification.
Secretary means the Secretary of
Labor, the chief official of the U.S. Department of Labor, or the Secretary’s
designee.
Secretary of Homeland Security means
the chief official of the U.S. Department of Homeland Security (DHS) or
the Secretary of Homeland Security’s
designee.
State Workforce Agency (SWA) means
a State government agency that receives funds under the Wagner-Peyser
Act (29 U.S.C. 49 et seq.) to administer
the State’s public labor exchange activities.
Strike means a concerted stoppage of
work by employees as a result of a
labor dispute, or any concerted slowdown or other concerted interruption
of operation (including stoppage by
reason of the expiration of a collective
bargaining agreement).
Successor in interest means:
(1) Where an employer has violated 20
CFR part 655, subpart A, or this part,
and has ceased doing business or cannot be located for purposes of enforcement, a successor in interest to that
employer may be held liable for the duties and obligations of the violating
employer in certain circumstances.
The following factors, as used under
Title VII of the Civil Rights Act and
the Vietnam Era Veterans’ Readjustment Assistance Act, may be considered in determining whether an employer is a successor in interest; no one
factor is dispositive, but all of the circumstances will be considered as a
whole:
(i) Substantial continuity of the
same business operations;
(ii) Use of the same facilities;
(iii) Continuity of the work force;
(iv) Similarity of jobs and working
conditions;
(v) Similarity of supervisory personnel;
(vi) Whether the former management
or owner retains a direct or indirect interest in the new enterprise;
posted between and among the SWAs
on their job clearance systems.
Joint employment means that where
two or more employers each have sufficient definitional indicia of being an
employer to be considered the employer of a worker, those employers
will be considered to jointly employ
that worker. Each employer in a joint
employment relationship to a worker
is considered a joint employer of that
worker.
Layoff means any involuntary separation of one or more U.S. employees
without cause.
Metropolitan Statistical Area (MSA)
means a geographic entity defined by
OMB for use by Federal statistical
agencies in collecting, tabulating, and
publishing Federal statistics. A metro
area contains a core urban area of
50,000 or more population, and a micro
area contains an urban core of at least
10,000 (but fewer than 50,000) population. Each metro or micro area consists of one or more counties and includes the counties containing the core
urban area, as well as any adjacent
counties that have a high degree of social and economic integration (as
measured by commuting to work) with
the urban core.
National Processing Center (NPC)
means the office within OFLC which is
charged with the adjudication of an Application for Temporary Employment Certification or other applications.
Non-agricultural labor and services
means any labor or services not considered to be agricultural labor or services
as defined in 20 CFR part 655, subpart
B. It does not include the provision of
services as members of the medical
profession by graduates of medical
schools.
Offered wage means the wage offered
by an employer in an H–2B job order.
The offered wage must equal or exceed
the highest of the prevailing wage or
Federal, State or local minimum wage.
Office of Foreign Labor Certification
(OFLC) means the organizational component of the ETA that provides national leadership and policy guidance
and develops regulations to carry out
the Secretary’s responsibilities, including determinations related to an employer’s request for H–2B Registration,
Application for Prevailing Wage Deter-
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29 CFR Ch. V (7–1–19 Edition)
(vii) Similarity in machinery, equipment, and production methods;
(viii) Similarity of products and services; and
(ix) The ability of the predecessor to
provide relief.
(2) For purposes of debarment only,
the primary consideration will be the
personal involvement of the firm’s
ownership, management, supervisors,
and others associated with the firm in
the violation(s) at issue.
United States (U.S.) means the continental United States, Alaska, Hawaii,
the Commonwealth of Puerto Rico,
Guam, the U.S. Virgin Islands, and the
Commonwealth of the Northern Mariana Islands (CNMI).
U.S. Citizenship and Immigration Services (USCIS) means the Federal agency
within DHS that makes the determination under the INA whether to grant
petitions filed by employers seeking H–
2B workers to perform temporary nonagricultural work in the U.S.
United States worker (U.S. worker)
means a worker who is:
(1) A citizen or national of the U.S.;
(2) An alien who is lawfully admitted
for permanent residence in the U.S., is
admitted as a refugee under 8 U.S.C.
1157, section 207 of the INA, is granted
asylum under 8 U.S.C. 1158, section 208
of the INA, or is an alien otherwise authorized under the immigration laws to
be employed in the U.S.; or
(3) An individual who is not an unauthorized alien (as defined in 8 U.S.C.
1324a(h)(3), section 274a(h)(3) of the
INA) with respect to the employment
in which the worker is engaging.
Wage and Hour Division (WHD) means
the agency within the Department of
Labor with investigatory and law enforcement authority, as delegated from
DHS, to carry out the provisions under
8 U.S.C. 1184(c), section 214(c) of the
INA.
Wages mean all forms of cash remuneration to a worker by an employer in
payment for personal services.
(b) The employer’s need is considered
temporary if justified to the CO as one
of the following: A one-time occurrence; a seasonal need; a peakload
need; or an intermittent need, as defined by DHS regulations.
§ 503.6
Waiver of rights prohibited.
A person may not seek to have an H–
2B worker, a worker in corresponding
employment, or any other person, including but not limited to a U.S. worker improperly rejected for employment
or improperly laid off or displaced,
waive or modify any rights conferred
under 8 U.S.C. 1184(c), INA section
214(c), 20 CFR part 655, subpart A, or
the regulations in this part. Any agreement by an employee purporting to
waive or modify any rights given to
said person under these provisions will
be void as contrary to public policy except as follows:
(a) Waivers or modifications of rights
or obligations hereunder in favor of the
Secretary will be valid for purposes of
enforcement; and
(b) Agreements in settlement of private litigation are permitted.
§ 503.7 Investigation authority of Secretary.
(a) Authority of the Administrator,
WHD. The Secretary of Homeland Security has delegated to the Secretary,
under 8 U.S.C. 1184(c)(14)(B), INA section 214(c)(14)(B), authority to perform
investigative and enforcement functions. Within the Department of Labor,
the Administrator, WHD will perform
all such functions.
(b) Conduct of investigations. The Secretary, through the WHD, may investigate to determine compliance with
obligations under 8 U.S.C. 1184(c), INA
section 214(c), 20 CFR part 655, subpart
A, or the regulations in this part, either under a complaint or otherwise, as
may be appropriate. In connection with
such an investigation, WHD may enter
and inspect any premises, land, property, worksite, vehicles, structure, facility, place and records (and make
transcriptions, photographs, scans, videos, photocopies, or use any other
means to record the content of the
records or preserve images of places or
objects), question any person, or gather
§ 503.5 Temporary need.
(a) An employer seeking certification
under 20 CFR part 655, subpart A, must
establish that its need for non-agricultural services or labor is temporary, regardless of whether the underlying job
is permanent or temporary.
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Wage and Hour Division, Labor
§ 503.16
any information, in whatever form, as
may be appropriate.
(c) Confidential investigation. The
WHD will conduct investigations in a
manner that protects the confidentiality of any complainant or other
person who provides information to the
Secretary in good faith.
(d) Report of violations. Any person
may report a violation of the obligations imposed by 8 U.S.C. 1184(c), INA
section 214(c), 20 CFR part 655, subpart
A, or the regulations in this part to the
Secretary by advising any local office
of the SWA, ETA, WHD or any other
authorized representative of the Secretary. The office or person receiving
such a report will refer it to the appropriate office of WHD for the geographic
area in which the reported violation is
alleged to have occurred.
§ 503.16 Assurances and obligations of
H–2B employers.
An employer employing H–2B workers and/or workers in corresponding
employment under an Application for
Temporary Employment Certification has
agreed as part of the Application for
Temporary Employment Certification that
it will abide by the following conditions with respect to its H–2B workers
and any workers in corresponding employment:
(a) Rate of pay. (1) The offered wage
in the job order equals or exceeds the
highest of the prevailing wage or Federal minimum wage, State minimum
wage, or local minimum wage. The employer must pay at least the offered
wage, free and clear, during the entire
period of the Application for Temporary
Employment Certification granted by
OFLC.
(2) The offered wage is not based on
commissions, bonuses, or other incentives, including paying on a piece-rate
basis, unless the employer guarantees a
wage earned every workweek that
equals or exceeds the offered wage.
(3) If the employer requires one or
more minimum productivity standards
of workers as a condition of job retention, the standards must be specified in
the job order and the employer must
demonstrate that they are normal and
usual for non-H–2B employers for the
same occupation in the area of intended employment.
(4) An employer that pays on a piecerate basis must demonstrate that the
piece rate is no less than the normal
rate paid by non-H–2B employers to
workers performing the same activity
in the area of intended employment.
The average hourly piece rate earnings
must result in an amount at least
equal to the offered wage. If the worker
is paid on a piece rate basis and at the
end of the workweek the piece rate
does not result in average hourly piece
rate earnings during the workweek at
least equal to the amount the worker
would have earned had the worker been
paid at the offered hourly wage, then
the employer must supplement the
worker’s pay at that time so that the
worker’s earnings are at least as much
§ 503.8 Accuracy of information, statements, data.
Information, statements, and data
submitted in compliance with 8 U.S.C.
1184(c), INA section 214(c), or the regulations in this part are subject to 18
U.S.C. 1001, which provides, with regard
to statements or entries generally,
that whoever, in any matter within the
jurisdiction of any department or agency of the U.S., knowingly and willfully
falsifies, conceals, or covers up a material fact by any trick, scheme, or device, or makes any false, fictitious, or
fraudulent statements or representations, or makes or uses any false writing or document knowing the same to
contain any false, fictitious, or fraudulent statement or entry, will be fined
not more than $250,000 or imprisoned
not more than 5 years, or both.
Subpart B—Enforcement
§ 503.15
Enforcement.
The investigation, inspection, and
law enforcement functions that carry
out the provisions of 8 U.S.C. 1184(c),
INA section 214(c), 20 CFR part 655, subpart A, or the regulations in this part
pertain to the employment of any H–2B
worker, any worker in corresponding
employment, or any U.S. worker improperly rejected for employment or
improperly laid off or displaced.
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as the worker would have earned during the workweek if the worker had instead been paid at the offered hourly
wage for each hour worked.
(b) Wages free and clear. The payment
requirements for wages in this section
will be satisfied by the timely payment
of such wages to the worker either in
cash or negotiable instrument payable
at par. The payment must be made finally and unconditionally and ‘‘free
and clear.’’ The principles applied in
determining whether deductions are
reasonable and payments are received
free and clear and the permissibility of
deductions for payments to third persons are explained in more detail in 29
CFR part 531.
(c) Deductions. The employer must
make all deductions from the worker’s
paycheck required by law. The job
order must specify all deductions not
required by law which the employer
will make from the worker’s pay; any
such deductions not disclosed in the
job order are prohibited. The wage payment requirements of paragraph (b) of
this section are not met where unauthorized deductions, rebates, or refunds
reduce the wage payment made to the
worker below the minimum amounts
required by the offered wage or where
the worker fails to receive such
amounts free and clear because the
worker ‘‘kicks back’’ directly or indirectly to the employer or to another
person for the employer’s benefit the
whole or part of the wages delivered to
the worker. Authorized deductions are
limited to: those required by law, such
as taxes payable by workers that are
required to be withheld by the employer and amounts due workers which
the employer is required by court order
to pay to another; deductions for the
reasonable cost or fair value of board,
lodging, and facilities furnished; and
deductions of amounts which are authorized to be paid to third persons for
the worker’s account and benefit
through his or her voluntary assignment or order or which are authorized
by a collective bargaining agreement
with bona fide representatives of workers which covers the employer. Deductions for amounts paid to third persons
for the worker’s account and benefit
which are not so authorized or are contrary to law or from which the em-
ployer, agent or recruiter, including
any agents or employees of these entities, or any affiliated person derives
any payment, rebate, commission,
profit, or benefit directly or indirectly,
may not be made if they reduce the actual wage paid to the worker below the
offered wage indicated on the Application for Temporary Employment Certification.
(d) Job opportunity is full-time. The job
opportunity is a full-time temporary
position, consistent with § 503.4, and
the employer must use a single workweek as its standard for computing
wages due. An employee’s workweek
must be a fixed and regularly recurring
period of 168 hours—seven consecutive
24-hour periods. It need not coincide
with the calendar week but may begin
on any day and at any hour of the day.
(e) Job qualifications and requirements.
Each job qualification and requirement
must be listed in the job order and
must be bona fide and consistent with
the normal and accepted qualifications
and requirements imposed by non-H–2B
employers in the same occupation and
area of intended employment. The employer’s job qualifications and requirements imposed on U.S. workers must
not be less favorable than the qualifications and requirements that the
employer is imposing or will impose on
H–2B workers. A qualification means a
characteristic that is necessary to the
individual’s ability to perform the job
in question. A requirement means a
term or condition of employment
which a worker is required to accept in
order to obtain the job opportunity.
The CO may require the employer to
submit documentation to substantiate
the appropriateness of any job qualification and/or requirement specified in
the job order.
(f) Three-fourths guarantee. (1) The
employer must guarantee to offer the
worker employment for a total number
of work hours equal to at least threefourths of the workdays in each 12week period (each 6-week period if the
period of employment covered by the
job order is less than 120 days) beginning with the first workday after the
arrival of the worker at the place of
employment or the advertised first
date of need, whichever is later, and
ending on the expiration date specified
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Wage and Hour Division, Labor
§ 503.16
in the job order or in its extensions, if
any. See the exception in paragraph (y)
of this section.
(2) For purposes of this paragraph (f)
a workday means the number of hours
in a workday as stated in the job order.
The employer must offer a total number of hours of work to ensure the provision of sufficient work to reach the
three-fourths guarantee in each 12week period (each 6-week period if the
period of employment covered by the
job order is less than 120 days) during
the work period specified in the job
order, or during any modified job order
period to which the worker and employer have mutually agreed and that
has been approved by the CO.
(3) In the event the worker begins
working later than the specified beginning date the guarantee period begins
with the first workday after the arrival
of the worker at the place of employment, and continues until the last day
during which the job order and all extensions thereof are in effect.
(4) The 12-week periods (6-week periods if the period of employment covered by the job order is less than 120
days) to which the guarantee applies
are based upon the workweek used by
the employer for pay purposes. The
first 12-week period (or 6-week period,
as appropriate) also includes any partial workweek, if the first workday
after the worker’s arrival at the place
of employment is not the beginning of
the employer’s workweek, with the
guaranteed number of hours increased
on a pro rata basis (thus, the first period may include up to 12 weeks and 6
days (or 6 weeks and 6 days, as appropriate)). The final 12-week period (or 6week period, as appropriate) includes
any time remaining after the last full
12-week period (or 6-week period) ends,
and thus may be as short as 1 day, with
the guaranteed number of hours decreased on a pro rata basis.
(5) Therefore, if, for example, a job
order is for a 32-week period (a period
greater than 120 days), during which
the normal workdays and work hours
for the workweek are specified as 5
days a week, 7 hours per day, the worker would have to be guaranteed employment for at least 315 hours in the
first 12-week period (12 weeks × 35
hours/week = 420 hours × 75 percent =
315), at least 315 hours in the second 12week period, and at least 210 hours (8
weeks × 35 hours/week = 280 hours × 75
percent = 210) in the final partial period. If the job order is for a 16-week
period (less than 120 days), during
which the normal workdays and work
hours for the workweek are specified as
5 days a week, 7 hours per day, the
worker would have to be guaranteed
employment for at least 157.5 hours (6
weeks × 35 hours/week = 210 hours × 75
percent = 157.5) in the first 6-week period, at least 157.5 hours in the second
6-week period, and at least 105 hours (4
weeks × 35 hours/week = 140 hours × 75
percent = 105) in the final partial period.
(6) If the worker is paid on a piece
rate basis, the employer must use the
worker’s average hourly piece rate
earnings or the offered wage, whichever
is higher, to calculate the amount due
under the guarantee.
(7) A worker may be offered more
than the specified hours of work on a
single workday. For purposes of meeting the guarantee, however, the worker
will not be required to work for more
than the number of hours specified in
the job order for a workday. The employer, however, may count all hours
actually worked in calculating whether
the guarantee has been met. If during
any 12-week period (6-week period if
the period of employment covered by
the job order is less than 120 days) during the period of the job order the employer affords the U.S. or H–2B worker
less employment than that required
under paragraph (f)(1) of this section,
the employer must pay such worker
the amount the worker would have
earned had the worker, in fact, worked
for the guaranteed number of days. An
employer has not met the work guarantee if the employer has merely offered work on three-fourths of the
workdays in an 12-week period (or 6week period, as appropriate) if each
workday did not consist of a full number of hours of work time as specified
in the job order.
(8) Any hours the worker fails to
work, up to a maximum of the number
of hours specified in the job order for a
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29 CFR Ch. V (7–1–19 Edition)
(i) Earnings statements. (1) The employer must keep accurate and adequate records with respect to the workers’ earnings, including but not limited
to: records showing the nature, amount
and location(s) of the work performed;
the number of hours of work offered
each day by the employer (broken out
by hours offered both in accordance
with and over and above the threefourths guarantee in paragraph (f) of
this section); the hours actually
worked each day by the worker; if the
number of hours worked by the worker
is less than the number of hours offered, the reason(s) the worker did not
work; the time the worker began and
ended each workday; the rate of pay
(both piece rate and hourly, if applicable); the worker’s earnings per pay period; the worker’s home address; and
the amount of and reasons for any and
all deductions taken from or additions
made to the worker’s wages.
(2) The employer must furnish to the
worker on or before each payday in one
or more written statements the following information:
(i) The worker’s total earnings for
each workweek in the pay period;
(ii) The worker’s hourly rate and/or
piece rate of pay;
(iii) For each workweek in the pay
period the hours of employment offered
to the worker (showing offers in accordance with the three-fourths guarantee as determined in paragraph (f) of
this section, separate from any hours
offered over and above the guarantee);
(iv) For each workweek in the pay
period the hours actually worked by
the worker;
(v) An itemization of all deductions
made from or additions made to the
worker’s wages;
(vi) If piece rates are used, the units
produced daily;
(vii) The beginning and ending dates
of the pay period; and
(viii) The employer’s name, address
and FEIN.
(j) Transportation and visa fees—(1)(i)
Transportation to the place of employment. The employer must provide or reimburse the worker for transportation
and subsistence from the place from
which the worker has come to work for
the employer, whether in the U.S. or
abroad, to the place of employment if
workday, when the worker has been offered an opportunity to work in accordance with paragraph (f)(1) of this section, and all hours of work actually
performed (including voluntary work
over 8 hours in a workday), may be
counted by the employer in calculating
whether each 12-week period (or 6-week
period, as appropriate) of guaranteed
employment has been met. An employer seeking to calculate whether
the guaranteed number of hours has
been met must maintain the payroll
records in accordance with this part.
(g) Impossibility of fulfillment. If, before the expiration date specified in the
job order, the services of the worker
are no longer required for reasons beyond the control of the employer due
to fire, weather, or other Act of God, or
similar unforeseeable man-made catastrophic event (such as an oil spill or
controlled flooding) that is wholly outside the employer’s control that makes
the fulfillment of the job order impossible, the employer may terminate the
job order with the approval of the CO.
In the event of such termination of a
job order, the employer must fulfill a
three-fourths guarantee, as described
in paragraph (f) of this section, for the
time that has elapsed from the start
date listed in the job order or the first
workday after the arrival of the worker
at the place of employment, whichever
is later, to the time of its termination.
The employer must make efforts to
transfer the H–2B worker or worker in
corresponding employment to other
comparable employment acceptable to
the worker and consistent with the
INA, as applicable. If a transfer is not
effected, the employer must return the
worker, at the employer’s expense, to
the place from which the worker (disregarding intervening employment)
came to work for the employer, or
transport the worker to the worker’s
next certified H–2B employer, whichever the worker prefers.
(h) Frequency of pay. The employer
must state in the job order the frequency with which the worker will be
paid, which must be at least every 2
weeks or according to the prevailing
practice in the area of intended employment, whichever is more frequent.
Employers must pay wages when due.
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the worker completes 50 percent of the
period of employment covered by the
job order (not counting any extensions). The employer may arrange and
pay for the transportation and subsistence directly, advance at a minimum
the most economical and reasonable
common carrier cost of the transportation and subsistence to the worker
before the worker’s departure, or pay
the worker for the reasonable costs incurred by the worker. When it is the
prevailing practice of non-H–2B employers in the occupation in the area to
do so or when the employer extends
such benefits to similarly situated H–
2B workers, the employer must advance the required transportation and
subsistence costs (or otherwise provide
them) to workers in corresponding employment who are traveling to the employer’s worksite. The amount of the
transportation payment must be no
less (and is not required to be more)
than the most economical and reasonable common carrier transportation
charges for the distances involved. The
amount of the daily subsistence must
be at least the amount permitted in 20
CFR 655.173. Where the employer will
reimburse the reasonable costs incurred by the worker, it must keep accurate and adequate records of: the
costs of transportation and subsistence
incurred by the worker; the amount reimbursed; and the date(s) of reimbursement. Note that the Fair Labor Standards Act (FLSA) applies independently
of the H–2B requirements and imposes
obligations on employers regarding
payment of wages.
(ii) Transportation from the place of
employment. If the worker completes
the period of employment covered by
the job order (not counting any extensions), or if the worker is dismissed
from employment for any reason by
the employer before the end of the period, and the worker has no immediate
subsequent H–2B employment, the employer must provide or pay at the time
of departure for the worker’s cost of return transportation and daily subsistence from the place of employment to
the place from which the worker, disregarding intervening employment, departed to work for the employer. If the
worker has contracted with a subsequent employer that has not agreed in
the job order to provide or pay for the
worker’s transportation from the employer’s worksite to such subsequent
employer’s worksite, the employer
must provide or pay for that transportation and subsistence. If the worker
has contracted with a subsequent employer that has agreed in the job order
to provide or pay for the worker’s
transportation from the employer’s
worksite to such subsequent employer’s worksite, the subsequent employer
must provide or pay for such expenses.
(iii) Employer-provided transportation.
All employer-provided transportation
must comply with all applicable Federal, State, and local laws and regulations and must provide, at a minimum,
the same vehicle safety standards,
driver licensure requirements, and vehicle insurance as required under 49
CFR parts 390, 393, and 396.
(iv) Disclosure. All transportation and
subsistence costs that the employer
will pay must be disclosed in the job
order.
(2) The employer must pay or reimburse the worker in the first workweek
for all visa, visa processing, border
crossing, and other related fees (including those mandated by the government) incurred by the H–2B worker,
but not for passport expenses or other
charges primarily for the benefit of the
worker.
(k) Employer-provided items. The employer must provide to the worker,
without charge or deposit charge, all
tools, supplies, and equipment required
to perform the duties assigned.
(l) Disclosure of job order. The employer must provide to an H–2B worker
outside of the U.S. no later than the
time at which the worker applies for
the visa, or to a worker in corresponding employment no later than
on the day work commences, a copy of
the job order including any subsequent
approved modifications. For an H–2B
worker changing employment from an
H–2B employer to a subsequent H–2B
employer, the copy must be provided
no later than the time an offer of employment is made by the subsequent H–
2B employer. The disclosure of all documents required by this paragraph (l)
must be provided in a language understood by the worker, as necessary or
reasonable.
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(m) Notice of worker rights. The employer must post and maintain in a
conspicuous location at the place of
employment a poster provided by the
Department of Labor that sets out the
rights and protections for H–2B workers and workers in corresponding employment. The employer must post the
poster in English. To the extent necessary, the employer must request and
post additional posters, as made available by the Department of Labor, in
any language common to a significant
portion of the workers if they are not
fluent in English.
(n) No unfair treatment. The employer
has not and will not intimidate, threaten, restrain, coerce, blacklist, discharge or in any manner discriminate
against, and has not and will not cause
any person to intimidate, threaten, restrain, coerce, blacklist, discharge, or
in any manner discriminate against,
any person who has:
(1) Filed a complaint under or related
to 8 U.S.C. 1184(c), section 214(c) of the
INA, 20 CFR part 655, subpart A, or this
part or any other regulation promulgated thereunder;
(2) Instituted or caused to be instituted any proceeding under or related
to 8 U.S.C. 1184(c), section 214(c) of the
INA, 20 CFR part 655, subpart A, or this
part or any other regulation promulgated thereunder;
(3) Testified or is about to testify in
any proceeding under or related to 8
U.S.C. 1184(c), section 214(c) of the INA,
20 CFR part 655, subpart A, or this part
or any other regulation promulgated
thereunder;
(4) Consulted with a workers’ center,
community organization, labor union,
legal assistance program, or an attorney on matters related to 8 U.S.C.
1184(c), section 214(c) of the INA, 20
CFR part 655, subpart A, or this part or
any other regulation promulgated
thereunder; or
(5) Exercised or asserted on behalf of
himself or herself or others any right
or protection afforded by 8 U.S.C.
1184(c), section 214(c) of the INA, 20
CFR part 655, subpart A, or this part or
any other regulation promulgated
thereunder.
(o) Comply with the prohibitions
against employees paying fees. The employer and its attorney, agents, or em-
ployees have not sought or received
payment of any kind from the worker
for any activity related to obtaining H–
2B labor certification or employment,
including payment of the employer’s
attorney or agent fees, application and
H–2B Petition fees, recruitment costs,
or any fees attributed to obtaining the
approved Application for Temporary Employment Certification. For purposes of
this paragraph (o), payment includes,
but is not limited to, monetary payments, wage concessions (including deductions from wages, salary, or benefits), kickbacks, bribes, tributes, inkind payments, and free labor. All
wages must be paid free and clear. This
provision does not prohibit employers
or their agents from receiving reimbursement for costs that are the responsibility and primarily for the benefit of the worker, such as governmentrequired passport fees.
(p) Contracts with third parties to comply with prohibitions. The employer
must contractually prohibit in writing
any agent or recruiter (or any agent or
employee of such agent or recruiter)
whom the employer engages, either directly or indirectly, in recruitment of
H–2B workers to seek or receive payments or other compensation from prospective workers. The contract must
include
the
following
statement:
‘‘Under this agreement, [name of
agent, recruiter] and any agent of or
employee of [name of agent or recruiter] are prohibited from seeking or
receiving payments from any prospective employee of [employer name] at
any time, including before or after the
worker obtains employment. Payments
include but are not limited to, any direct or indirect fees paid by such employees for recruitment, job placement,
processing, maintenance, attorneys’
fees, agent fees, application fees, or petition fees.’’
(q) Prohibition against preferential
treatment of foreign workers. The employer’s job offer must offer to U.S.
workers no less than the same benefits,
wages, and working conditions that the
employer is offering, intends to offer,
or will provide to H–2B workers. Job offers may not impose on U.S. workers
any restrictions or obligations that
will not be imposed on the employer’s
H–2B workers. This does not relieve the
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§ 503.16
employer from providing to H–2B workers at least the minimum benefits,
wages, and working conditions which
must be offered to U.S. workers consistent with this section.
(r) Non-discriminatory hiring practices.
The job opportunity is, and through
the period set forth in paragraph (t) of
this section must continue to be, open
to any qualified U.S. worker regardless
of race, color, national origin, age, sex,
religion, disability, or citizenship. Rejections of any U.S. workers who applied or apply for the job must only be
for lawful, job-related reasons, and
those not rejected on this basis have
been or will be hired. In addition, the
employer has and will continue to retain records of all hired workers and
rejected applicants as required by
§ 503.17.
(s) Recruitment requirements. The employer must conduct all required recruitment activities, including any additional employer-conducted recruitment activities as directed by the CO,
and as specified in 20 CFR 655.40
through 655.46.
(t) Continuing requirement to hire U.S.
workers. The employer has and will
continue to cooperate with the SWA by
accepting referrals of all qualified U.S.
workers who apply (or on whose behalf
a job application is made) for the job
opportunity, and must provide employment to any qualified U.S. worker who
applies to the employer for the job opportunity, until 21 days before the date
of need.
(u) No strike or lockout. There is no
strike or lockout at any of the employer’s worksites within the area of intended employment for which the employer is requesting H–2B certification
at the time the Application for Temporary Employment Certification is filed.
(v) No recent or future layoffs. The employer has not laid off and will not lay
off any similarly employed U.S. worker
in the occupation that is the subject of
the Application for Temporary Employment Certification in the area of intended employment within the period
beginning 120 calendar days before the
date of need through the end of the period of certification. A layoff for lawful, job-related reasons such as lack of
work or the end of a season is permissible if all H–2B workers are laid off be-
fore any U.S. worker in corresponding
employment.
(w) Contact with former U.S. employees.
The employer will contact (by mail or
other effective means) its former U.S.
workers, including those who have
been laid off within 120 calendar days
before the date of need (except those
who were dismissed for cause or who
abandoned the worksite), employed by
the employer in the occupation at the
place of employment during the previous year, disclose the terms of the
job order, and solicit their return to
the job.
(x) Area of intended employment and
job opportunity. The employer must not
place any H–2B workers employed
under the approved Application for Temporary Employment Certification outside
the area of intended employment or in
a job opportunity not listed on the approved Application for Temporary Employment Certification unless the employer has obtained a new approved Application for Temporary Employment Certification.
(y) Abandonment/termination of employment. Upon the separation from
employment of worker(s) employed
under the Application for Temporary Employment Certification or workers in corresponding employment, if such separation occurs before the end date of the
employment specified in the Application for Temporary Employment Certification, the employer must notify OFLC
in writing of the separation from employment not later than 2 work days
after such separation is discovered by
the employer. In addition, the employer must notify DHS in writing (or
any other method specified by the Department of Labor or DHS in the FEDERAL REGISTER or the Code of Federal
Regulations) of such separation of an
H–2B worker. An abandonment or
abscondment is deemed to begin after a
worker fails to report for work at the
regularly scheduled time for 5 consecutive working days without the consent
of the employer. If the separation is
due to the voluntary abandonment of
employment by the H–2B worker or
worker in corresponding employment,
and the employer provides appropriate
notification specified under this paragraph (y), the employer will not be responsible for providing or paying for
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§ 503.17
29 CFR Ch. V (7–1–19 Edition)
the subsequent transportation and subsistence expenses of that worker under
this section, and that worker is not entitled to the three-fourths guarantee
described in paragraph (f) of this section. The employer’s obligation to
guarantee three-fourths of the work described in paragraph (f) ends with the
last full 12-week period (or 6-week period, as appropriate) preceding the
worker’s voluntary abandonment or
termination for cause.
(z) Compliance with applicable laws.
During the period of employment specified on the Application for Temporary
Employment Certification, the employer
must comply with all applicable Federal, State and local employment-related laws and regulations, including
health and safety laws. This includes
compliance with 18 U.S.C. 1592(a), with
respect to prohibitions against employers, the employer’s agents or their attorneys knowingly holding, destroying
or confiscating workers’ passports,
visas, or other immigration documents.
(aa) Disclosure of foreign worker recruitment. The employer, and its attorney or agent, as applicable, must comply with 20 CFR 655.9 by providing a
copy of all agreements with any agent
or recruiter whom it engages or plans
to engage in the recruitment of H–2B
workers, and the identity and location
of the persons or entities hired by or
working for the agent or recruiter, and
any of the agents or employees of those
persons and entities, to recruit foreign
workers. Pursuant to 20 CFR 655.15(a),
the agreements and information must
be filed with the Application for Temporary Employment Certification.
(bb) Cooperation with investigators.
The employer must cooperate with any
employee of the Secretary who is exercising or attempting to exercise the
Department’s authority pursuant to 8
U.S.C.
1184(c)(14)(B),
section
214(c)(14)(B) of the INA.
including but not limited to those specified in paragraph (c) of this section.
(b) Period of required retention. The
employer must retain records and documents for 3 years from the date of certification of the Application for Temporary Employment Certification or from
the date of adjudication if the Application for Temporary Employment Certification is denied or 3 years from the day
the Department of Labor receives the
letter of withdrawal provided in accordance with 20 CFR 655.62.
(c) Documents and records to be retained by all employer applicants. All
employers filing an H–2B Registration
and an Application for Temporary Employment Certification must retain the
following documents and records and
must provide the documents and
records in the event of an audit or investigation:
(1) Documents and records not previously submitted during the registration process that substantiate temporary need;
(2) Proof of recruitment efforts, as
applicable, including:
(i) Job order placement as specified
in 20 CFR 655.16;
(ii) Advertising as specified in 20 CFR
655.41 and 655.42;
(iii) Contact with former U.S. workers as specified in 20 CFR 655.43;
(iv) Contact with bargaining representative(s), copy of the posting of
the job opportunity, and contact with
community-based organizations, if applicable, as specified in 20 CFR
655.45(a), (b) and (c); and
(v) Additional employer-conducted
recruitment efforts as specified in 20
CFR 655.46;
(3) Substantiation of the information
submitted in the recruitment report
prepared in accordance with 20 CFR
655.48, such as evidence of nonapplicability of contact with former workers
as specified in 20 CFR 655.43;
(4) The final recruitment report and
any supporting resumes and contact information as specified in 20 CFR 655.48;
(5) Records of each worker’s earnings,
hours offered and worked, and other information as specified in § 503.16(i);
(6) If appropriate, records of reimbursement of transportation and subsistence costs incurred by the workers,
as specified in § 503.16(j).
§ 503.17 Document retention requirements of H–2B employers.
(a) Entities required to retain documents. All employers filing an Application for Temporary Employment Certification requesting H–2B workers are required to retain the documents and
records proving compliance with 20
CFR part 655, subpart A and this part,
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Wage and Hour Division, Labor
§ 503.19
(7) Evidence of contact with U.S.
workers who applied for the job opportunity in the Application for Temporary
Employment Certification, including documents demonstrating that any rejections of U.S. workers were for lawful,
job-related reasons, as specified in
§ 503.16(r);
(8) Evidence of contact with any
former U.S. worker in the occupation
and the area of intended employment
in the Application for Temporary Employment Certification, including documents demonstrating that the U.S.
worker had been offered the job opportunity in the Application for Temporary
Employment Certification, as specified in
§ 503.16(w), and that the U.S. worker either refused the job opportunity or was
rejected only for lawful, job-related
reasons, as specified in § 503.16(r);
(9) The written contracts with agents
or recruiters, as specified in 20 CFR
655.8 and 655.9, and the list of the identities and locations of persons hired by
or working for the agent or recruiter
and these entities’ agents or employees, as specified in 20 CFR 655.9;
(10) Written notice provided to and
informing OFLC that an H–2B worker
or worker in corresponding employment has separated from employment
before the end date of employment
specified in the Application for Temporary Employment Certification, as specified in § 503.16(y);
(11) The H–2B Registration, job order,
and a copy of the Application for Temporary Employment Certification and the
original signed Appendix B of the Application.
(12) The approved H–2B Petition, including all accompanying documents;
and
(13) Any collective bargaining agreement(s), individual employment contract(s), or payroll records from the
previous year necessary to substantiate any claim that certain incumbent
workers are not included in corresponding employment, as specified in
§ 503.4.
(d) Availability of documents for enforcement purposes. An employer must
make available to the Administrator,
WHD within 72 hours following a request by the WHD the documents and
records required under 20 CFR part 655,
subpart A and this section so that the
Administrator, WHD may copy, transcribe, or inspect them.
§ 503.18 Validity of temporary labor
certification.
(a) Validity period. A temporary labor
certification is valid only for the period of time between the beginning and
ending dates of employment, as approved on the Application for Temporary
Employment Certification. The certification expires on the last day of authorized employment.
(b) Scope of validity. A temporary
labor certification is valid only for the
number of H–2B positions, the area of
intended employment, the job classification and specific services or labor
to be performed, and the employer
specified on the approved Application
for Temporary Employment Certification.
The temporary labor certification may
not be transferred from one employer
to another unless the employer to
which it is transferred is a successor in
interest to the employer to which it
was issued.
§ 503.19 Violations.
(a) Types of violations. Pursuant to
the statutory provisions governing enforcement of the H–2B program, 8
U.S.C. 1184(c)(14), a violation exists
under this part where the Administrator, WHD determines that there has
been a:
(1) Willful misrepresentation of a material fact on the H–2B Registration, Application for Prevailing Wage Determination, Application for Temporary Employment Certification, or H–2B Petition;
(2) Substantial failure to meet any of
the terms and conditions of the H–2B
Registration, Application for Prevailing
Wage Determination, Application for
Temporary Employment Certification, or
H–2B Petition. A substantial failure is a
willful failure to comply that constitutes a significant deviation from
the terms and conditions of such documents; or
(3) Willful misrepresentation of a material fact to the Department of State
during the H–2B nonimmigrant visa application process.
(b) Determining whether a violation is
willful. A willful misrepresentation of a
material fact or a willful failure to
meet the required terms and conditions
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§ 503.20
29 CFR Ch. V (7–1–19 Edition)
occurs when the employer, attorney, or
agent knows its statement is false or
that its conduct is in violation, or
shows reckless disregard for the truthfulness of its representation or for
whether its conduct satisfies the required conditions.
(c) Determining whether a violation is
significant. In determining whether a
violation is a significant deviation
from the terms and conditions of the
H–2B Registration, Application for Prevailing Wage Determination, Application
for Temporary Employment Certification,
or H–2B Petition, the factors that the
Administrator, WHD may consider include, but are not limited to, the following:
(1) Previous history of violation(s)
under the H–2B program;
(2) The number of H–2B workers,
workers in corresponding employment,
or U.S. workers who were and/or are affected by the violation(s);
(3) The gravity of the violation(s);
(4) The extent to which the violator
achieved a financial gain due to the
violation(s), or the potential financial
loss or potential injury to the worker(s); and
(5) Whether U.S. workers have been
harmed by the violation.
(d) Employer acceptance of obligations.
The provisions of this part become applicable upon the date that the employer’s Application for Temporary Employment Certification is accepted. The employer’s submission of the approved H–
2B Registration, Application for Prevailing Wage Determination, the employer’s survey attestation (Form ETA–
9165), Appendix B of the Application for
Temporary Employment Certification, and
H–2B Petition constitute the employer’s
representation that the statements on
the forms are accurate and that it
knows and accepts the obligations of
the program.
§ 503.20 Sanctions and remedies—general.
Whenever the Administrator, WHD
determines that there has been a violation(s), as described in § 503.19, such action will be taken and such proceedings
instituted as deemed appropriate, including (but not limited to) the following:
(a) Institute administrative proceedings, including for: the recovery of
unpaid wages (including recovery of
prohibited recruitment fees paid or impermissible deductions from pay, and
recovery of wages due for improperly
placing workers in areas of employment or in occupations other than
those identified on the Application for
Temporary Employment Certification and
for which a prevailing wage was not obtained); the enforcement of provisions
of the job order, 8 U.S.C. 1184(c), 20 CFR
part 655, subpart A, or the regulations
in this part; the assessment of a civil
money penalty; make whole relief for
any person who has been discriminated
against; reinstatement and make whole
relief for any U.S. worker who has been
improperly rejected for employment,
laid off or displaced; or debarment for
no less than 1 or no more than 5 years.
(b) The remedies referenced in paragraph (a) of this section will be sought
either directly from the employer, or
from its successor in interest, or from
the employer’s agent or attorney, as
appropriate.
§ 503.21 Concurrent actions within the
Department of Labor.
OFLC has primary responsibility to
make all determinations regarding the
issuance, denial, or revocation of a
labor certification as described in
§ 503.1(b) and in 20 CFR part 655, subpart A. The WHD has primary responsibility to make all determinations regarding the enforcement functions as
described in § 503.1(c). The taking of
any one of the actions referred to
above will not be a bar to the concurrent taking of any other action authorized by 8 U.S.C. 1184(c), 20 CFR part 655,
subpart A, or the regulations in this
part. OFLC and the WHD have concurrent jurisdiction to impose a debarment remedy under 20 CFR 655.73 or
under § 503.24.
§ 503.22 Representation
retary.
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The Solicitor of Labor, through authorized representatives, will represent
the Administrator, WHD and the Secretary in all administrative hearings
under 8 U.S.C. 1184(c)(14) and the regulations in this part.
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§ 503.24
§ 503.23 Civil money penalty assessment.
(a) A civil money penalty may be assessed by the Administrator, WHD for
each violation that meets the standards described in § 503.19. Each such
violation involving the failure to pay
an individual worker properly or to
honor the terms or conditions of a
worker’s employment required by the
H–2B Registration, Application for Prevailing Wage Determination, Application
for Temporary Employment Certification,
or H–2B Petition, constitutes a separate
violation.
Civil
money
penalty
amounts for such violations are determined as set forth in paragraphs (b) to
(e) of this section.
(b) Upon determining that an employer has violated any provisions of
§ 503.16 related to wages, impermissible
deductions or prohibited fees and expenses, the Administrator, WHD, may
assess civil money penalties that are
equal to the difference between the
amount that should have been paid and
the amount that actually was paid to
such worker(s), not to exceed $12,695
per violation.
(c) Upon determining that an employer has terminated by layoff or otherwise or has refused to employ any
worker in violation of § 503.16(r), (t), or
(v), within the periods described in
those sections, the Administrator,
WHD may assess civil money penalties
that are equal to the wages that would
have been earned but for the layoff or
failure to hire, not to exceed $12,695 per
violation. No civil money penalty will
be assessed, however, if the employee
refused the job opportunity, or was terminated for lawful, job-related reasons.
(d) The Administrator, WHD, may assess civil money penalties in an
amount not to exceed $12,695 per violation for any other violation that meets
the standards described in § 503.19.
(e) In determining the amount of the
civil money penalty to be assessed
under paragraph (d) of this section, the
Administrator, WHD will consider the
type of violation committed and other
relevant factors. In determining the
level of penalties to be assessed, the
highest penalties will be reserved for
willful failures to meet any of the conditions of the Application for Temporary
Employment Certification and H–2B Peti-
tion that involve harm to U.S. workers.
Other factors which may be considered
include, but are not limited to, the following:
(1) Previous history of violation(s) of
8 U.S.C. 1184(c), 20 CFR part 655, subpart A, or the regulations in this part;
(2) The number of H–2B workers,
workers in corresponding employment,
or improperly rejected U.S. applicants
who were and/or are affected by the
violation(s);
(3) The gravity of the violation(s);
(4) Efforts made in good faith to comply with 8 U.S.C. 1184(c), 20 CFR part
655, subpart A, and the regulations in
this part;
(5) Explanation from the person
charged with the violation(s);
(6) Commitment to future compliance, taking into account the public
health, interest or safety; and
(7) The extent to which the violator
achieved a financial gain due to the
violation, or the potential financial
loss or potential injury to the workers.
[80 FR 24130, Apr. 29, 2015, as amended at 81
FR 42986, July 1, 2016; 82 FR 14149, Mar. 17,
2017; 83 FR 12, Jan. 2, 2018; 84 FR 218, Jan. 23,
2019]
§ 503.24 Debarment.
(a) Debarment of an employer. The Administrator, OFLC may not issue future labor certifications under 20 CFR
part 655, subpart A to an employer or
any successor in interest to that employer, subject to the time limits set
forth in paragraph (c) of this section, if
the Administrator, WHD finds that the
employer committed a violation that
meets the standards of § 503.19. Where
these standards are met, debarrable
violations would include but not be
limited to one or more acts of commission or omission which involve:
(1) Failure to pay or provide the required wages, benefits, or working conditions to the employer’s H–2B workers
and/or workers in corresponding employment;
(2) Failure, except for lawful, job-related reasons, to offer employment to
qualified U.S. workers who applied for
the job opportunity for which certification was sought;
(3) Failure to comply with the employer’s obligations to recruit U.S.
workers;
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§ 503.25
29 CFR Ch. V (7–1–19 Edition)
(4) Improper layoff or displacement
of U.S. workers or workers in corresponding employment;
(5) Failure to comply with one or
more sanctions or remedies imposed by
the Administrator, WHD for violation(s) of obligations under the job
order or other H–2B obligations, or
with one or more decisions or orders of
the Secretary or a court under 20 CFR
part 655, subpart A or this part;
(6) Impeding an investigation of an
employer under this part;
(7) Employing an H–2B worker outside the area of intended employment,
in an activity/activities not listed in
the job order, or outside the validity
period of employment of the job order,
including any approved extension
thereof;
(8) A violation of the requirements of
§ 503.16(o) or (p);
(9) A violation of any of the provisions listed in § 503.16(r);
(10) Any other act showing such flagrant disregard for the law that future
compliance with program requirements
cannot reasonably be expected;
(11) Fraud involving the H–2B Registration, Application for Prevailing Wage
Determination, Application for Temporary
Employment Certification, or H–2B Petition; or
(12) A material misrepresentation of
fact during the registration or application process.
(b) Debarment of an agent or attorney.
If the Administrator, WHD finds, under
this section, that an agent or attorney
committed a violation as described in
paragraph (a) of this section or participated in an employer’s violation, the
Administrator, OFLC may not issue future labor certifications to an employer represented by such agent or attorney, subject to the time limits set
forth in paragraph (c) of this section.
(c) Period of debarment. Debarment
under this subpart may not be for less
than 1 year or more than 5 years from
the date of the final agency decision.
(d) Debarment procedure. If the Administrator, WHD makes a determination to debar an employer, attorney, or
agent, the Administrator, WHD will
send the party a Notice of Debarment.
The notice will state the reason for the
debarment finding, including a detailed
explanation of the grounds for and the
duration of the debarment and inform
the party subject to the notice of its
right to request a debarment hearing
and the timeframe under which such
rights must be exercised under § 503.43.
If the party does not request a hearing
within 30 calendar days of the date of
the Notice of Debarment, the notice is
the final agency action and the debarment will take effect at the end of the
30-day period. The timely filing of an
administrative appeal stays the debarment pending the outcome of the appeal as provided in § 503.43(e).
(e) Concurrent debarment jurisdiction.
OFLC and the WHD have concurrent
jurisdiction debar under 20 CFR 655.73
or under this part. When considering
debarment, OFLC and the WHD will coordinate their activities. A specific violation for which debarment is imposed
will be cited in a single debarment proceeding. Copies of final debarment decisions will be forwarded to DHS and
DOS promptly.
(f) Debarment from other labor certification programs. Upon debarment under
this part or 20 CFR 655.73, the debarred
party will be disqualified from filing
any labor certification applications or
labor condition applications with the
Department of Labor by, or on behalf
of, the debarred party for the same period of time set forth in the final debarment decision.
§ 503.25 Failure to cooperate with investigators.
(a) No person will interfere or refuse
to cooperate with any employee of the
Secretary who is exercising or attempting to exercise the Department’s
investigative or enforcement authority
under 8 U.S.C. 1184(c). Federal statutes
prohibiting persons from interfering
with a Federal officer in the course of
official duties are found at 18 U.S.C. 111
and 18 U.S.C. 114.
(b) Where an employer (or employer’s
agent or attorney) interferes or does
not cooperate with an investigation
concerning the employment of an H–2B
worker or a worker in corresponding
employment, or a U.S. worker who has
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Wage and Hour Division, Labor
§ 503.42
been improperly rejected for employment or improperly laid off or displaced, WHD may make such information available to OFLC and may recommend that OFLC revoke the existing certification that is the basis for
the employment of the H–2B workers
giving rise to the investigation. In addition, WHD may take such action as
appropriate where the failure to cooperate meets the standards in § 503.19,
including initiating proceedings for the
debarment of the employer from future
certification for up to 5 years, and/or
assessing civil money penalties against
any person who has failed to cooperate
with a WHD investigation. The taking
of any one action will not bar the taking of any additional action.
§ 503.26 Civil money penalties—payment and collection.
Where a civil money penalty is assessed in a final order by the Administrator, WHD, by an ALJ, or by the
ARB, the amount of the penalty must
be received by the Administrator, WHD
within 30 calendar days of the date of
the final order. The person assessed the
penalty will remit the amount ordered
to the Administrator, WHD by certified
check or by money order, made payable
to the Wage and Hour Division, United
States Department of Labor. The remittance will be delivered or mailed to
the WHD Regional Office for the area
in which the violations occurred.
Subpart C—Administrative
Proceedings
§ 503.40 Applicability
and rules.
of
procedures
(a) The procedures and rules contained in this subpart prescribe the administrative appeal process that will
be applied with respect to a determination to assess civil money penalties, to
debar, to enforce provisions of the job
order or provisions under 8 U.S.C.
1184(c), 20 CFR part 655, subpart A, or
the regulations in this part, or to the
collection of monetary relief due as a
result of any violation.
(b) With respect to determinations as
listed in paragraph (a) involving provisions under 8 U.S.C. 1184(c), the procedures and rules contained in this sub-
part will apply regardless of the date of
violation.
PROCEDURES RELATED TO HEARING
§ 503.41 Administrator, WHD’s determination.
(a) Whenever the Administrator,
WHD decides to assess a civil money
penalty, to debar, or to impose other
appropriate administrative remedies,
including for the recovery of monetary
relief, the party against which such action is taken will be notified in writing
of such determination.
(b) The Administrator, WHD’s determination will be served on the party by
personal service or by certified mail at
the party’s last known address. Where
service by certified mail is not accepted by the party, the Administrator
may exercise discretion to serve the
determination by regular mail.
§ 503.42 Contents of notice of determination.
The notice of determination required
by § 503.41 will:
(a) Set forth the determination of the
Administrator, WHD, including:
(1) The amount of any monetary relief due; or
(2) Other appropriate administrative
remedies; or
(3) The amount of any civil money
penalty assessment; or
(4) Whether debarment is sought and
the term; and
(5) The reason or reasons for such determination.
(b) Set forth the right to request a
hearing on such determination;
(c) Inform the recipient(s) of the notice that in the absence of a timely request for a hearing, received by the
Chief ALJ within 30 calendar days of
the date of the determination, the determination of the Administrator,
WHD will become final and not appealable;
(d) Set forth the time and method for
requesting a hearing, and the related
procedures for doing so, as set forth in
§ 503.43, and give the addresses of the
Chief ALJ (with whom the request
must be filed) and the representative(s)
of the Solicitor of Labor (upon whom
copies of the request must be served);
and
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§ 503.43
29 CFR Ch. V (7–1–19 Edition)
(e) Where appropriate, inform the recipient(s) of the notice that the Administrator, WHD will notify OFLC and
DHS of the occurrence of a violation by
the employer.
§ 503.43 Request for hearing.
(a) Any party desiring review of a determination issued under § 503.41, including judicial review, must make a
request for such an administrative
hearing in writing to the Chief ALJ at
the address stated in the notice of determination. In such a proceeding, the
Administrator will be the plaintiff, and
the party will be the respondent. If
such a request for an administrative
hearing is timely filed, the Administrator, WHD’s determination will be inoperative unless and until the case is
dismissed or the ALJ issues an order
affirming the decision.
(b) No particular form is prescribed
for any request for hearing permitted
by this section. However, any such request will:
(1) Be dated;
(2) Be typewritten or legibly written;
(3) Specify the issue or issues stated
in the notice of determination giving
rise to such request;
(4) State the specific reason or reasons why the party believes such determination is in error;
(5) Be signed by the party making the
request or by the agent or attorney of
such party; and
(6) Include the address at which such
party or agent or attorney desires to
receive further communications relating thereto.
(c) The request for such hearing must
be received by the Chief ALJ, at the
address stated in the Administrator,
WHD’s notice of determination, no
later than 30 calendar days after the
date of the determination. A party
which fails to meet this 30-day deadline
for requesting a hearing may thereafter participate in the proceedings
only by consent of the ALJ.
(d) The request may be filed in person, by facsimile transmission, by certified or regular mail, or by courier
service within the time set forth in
paragraph (c) of this section. For the
requesting party’s protection, if the request is by mail, it should be by certified mail. If the request is by fac-
simile transmission, the original of the
request, signed by the party or its attorney or agent, must be filed within 25
days.
(e) The determination will take effect on the start date identified in the
written notice of determination, unless
an administrative appeal is properly
filed. The timely filing of an administrative appeal stays the determination
pending the outcome of the appeal proceedings.
(f) Copies of the request for a hearing
will be sent by the party or attorney or
agent to the WHD official who issued
the notice of determination on behalf
of the Administrator, WHD, and to the
representative(s) of the Solicitor of
Labor identified in the notice of determination.
RULES OF PRACTICE
§ 503.44 General.
(a) Except as specifically provided in
the regulations in this part and to the
extent they do not conflict with the
provisions of this part, the Rules of
Practice and Procedure for Administrative Hearings Before the Office of Administrative Law Judges established
by the Secretary at 29 CFR part 18 will
apply to administrative proceedings
described in this part.
(b) As provided in the Administrative
Procedure Act, 5 U.S.C. 556, any oral or
documentary evidence may be received
in proceedings under this part. The
Federal Rules of Evidence and subpart
B of the Rules of Practice and Procedure for Administrative Hearings Before the Office of Administrative Law
Judges (29 CFR part 18, subpart B) will
not apply, but principles designed to
ensure production of relevant and probative evidence will guide the admission of evidence. The ALJ may exclude
evidence which is immaterial, irrelevant, or unduly repetitive.
§ 503.45 Service of pleadings.
(a) Under this part, a party may
serve any pleading or document by regular mail. Service on a party is complete upon mailing to the last known
address. No additional time for filing
or response is authorized where service
is by mail. In the interest of expeditious proceedings, the ALJ may direct
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Wage and Hour Division, Labor
§ 503.49
the parties to serve pleadings or documents by a method other than regular
mail.
(b) Two copies of all pleadings and
other documents in any ALJ proceeding must be served on the attorneys for the Administrator, WHD. One
copy must be served on the Associate
Solicitor, Division of Fair Labor
Standards, Office of the Solicitor, U.S.
Department of Labor, 200 Constitution
Avenue NW., Room N–2716, Washington, DC 20210, and one copy must be
served on the attorney representing
the Administrator in the proceeding.
(c) Time will be computed beginning
with the day following service and includes the last day of the period unless
it is a Saturday, Sunday, or Federallyobserved holiday, in which case the
time period includes the next business
day.
§ 503.46 Commencement of proceeding.
Each administrative proceeding permitted under 8 U.S.C. 1184(c)(14) and
the regulations in this part will be
commenced upon receipt of a timely
request for hearing filed in accordance
with § 503.43.
§ 503.47 Caption of proceeding.
(a) Each administrative proceeding
instituted under 8 U.S.C. 1184(c)(14),
INA section 214(c)(14) and the regulations in this part will be captioned in
the name of the person requesting such
hearing, and will be styled as follows:
In the Matter of llllllllll,
Respondent.
(b) For the purposes of such administrative proceedings the Administrator,
WHD will be identified as plaintiff and
the person requesting such hearing will
be named as respondent.
§ 503.48 Conduct of proceeding.
(a) Upon receipt of a timely request
for a hearing filed under and in accordance with § 503.43, the Chief ALJ will
promptly appoint an ALJ to hear the
case.
(b) The ALJ will notify all parties of
the date, time and place of the hearing.
Parties will be given at least 30 calendar days’ notice of such hearing.
(c) The ALJ may prescribe a schedule
by which the parties are permitted to
file a prehearing brief or other written
statement of fact or law. Any such
brief or statement must be served upon
each other party. Post-hearing briefs
will not be permitted except at the request of the ALJ. When permitted, any
such brief must be limited to the issue
or issues specified by the ALJ, will be
due within the time prescribed by the
ALJ, and must be served on each other
party.
PROCEDURES BEFORE ADMINISTRATIVE
LAW JUDGE
§ 503.49
Consent findings and order.
(a) General. At any time after the
commencement of a proceeding under
this part, but before the reception of
evidence in any such proceeding, a
party may move to defer the receipt of
any evidence for a reasonable time to
permit negotiation of an agreement
containing consent findings and an
order disposing of the whole or any
part of the proceeding. The allowance
of such deferment and the duration
thereof will be at the discretion of the
ALJ, after consideration of the nature
of the proceeding, the requirements of
the public interest, the representations
of the parties, and the probability of an
agreement being reached which will result in a just disposition of the issues
involved.
(b) Content. Any agreement containing consent findings and an order
disposing of a proceeding or any part
thereof will also provide:
(1) That the order will have the same
force and effect as an order made after
full hearing;
(2) That the entire record on which
any order may be based will consist
solely of the notice of administrative
determination (or amended notice, if
one is filed), and the agreement;
(3) A waiver of any further procedural steps before the ALJ; and
(4) A waiver of any right to challenge
or contest the validity of the findings
and order entered into in accordance
with the agreement.
(c) Submission. On or before the expiration of the time granted for negotiations, the parties or their attorney or
agent may:
(1) Submit the proposed agreement
for consideration by the ALJ; or
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§ 503.50
29 CFR Ch. V (7–1–19 Edition)
(2) Inform the ALJ that agreement
cannot be reached.
(d) Disposition. In the event an agreement containing consent findings and
an order is submitted within the time
allowed therefore, the ALJ, within 30
days thereafter, will, if satisfied with
its form and substance, accept such
agreement by issuing a decision based
upon the agreed findings.
POST-HEARING PROCEDURES
§ 503.50 Decision and order of Administrative Law Judge.
(a) The ALJ will prepare, within 60
days after completion of the hearing
and closing of the record, a decision on
the issues referred by the Administrator, WHD.
(b) The decision of the ALJ will include a statement of the findings and
conclusions, with reasons and basis
therefore, upon each material issue
presented on the record. The decision
will also include an appropriate order
which may affirm, deny, reverse, or
modify, in whole or in part, the determination of the Administrator, WHD.
The reason or reasons for such order
will be stated in the decision.
(c) In the event that the Administrator, WHD assesses back wages for
wage violation(s) of § 503.16 based upon
a PWD obtained by the Administrator
from OFLC during the investigation
and the ALJ determines that the Administrator’s request was not warranted, the ALJ will remand the matter to the Administrator for further
proceedings on the Administrator’s determination. If there is no such determination and remand by the ALJ, the
ALJ will accept as final and accurate
the wage determination obtained from
OFLC or, in the event the party filed a
timely appeal under 20 CFR 655.13 the
final wage determination resulting
from that process. Under no circumstances will the ALJ determine the
validity of the wage determination or
require submission into evidence or
disclosure of source data or the names
of establishments contacted in developing the survey which is the basis for
the PWD.
(d) The decision will be served on all
parties.
(e) The decision concerning civil
money penalties, debarment, monetary
relief, and/or other administrative remedies, when served by the ALJ will constitute the final agency order unless
the ARB, as provided for in § 503.51, determines to review the decision.
REVIEW OF ADMINISTRATIVE LAW
JUDGE’S DECISION
§ 503.51 Procedures for initiating and
undertaking review.
(a) A respondent, the WHD, or any
other party wishing review, including
judicial review, of the decision of an
ALJ will, within 30 days of the decision
of the ALJ, petition the ARB to review
the decision. Copies of the petition will
be served on all parties and on the
ALJ.
(b) No particular form is prescribed
for any petition for the ARB’s review
permitted by this part. However, any
such petition will:
(1) Be dated;
(2) Be typewritten or legibly written;
(3) Specify the issue or issues stated
in the ALJ decision and order giving
rise to such petition;
(4) State the specific reason or reasons why the party petitioning for review believes such decision and order
are in error;
(5) Be signed by the party filing the
petition or by an authorized representative of such party;
(6) Include the address at which such
party or authorized representative desires to receive further communications relating thereto; and
(7) Include as an attachment the
ALJ’s decision and order, and any
other record documents which would
assist the ARB in determining whether
review is warranted.
(c) If the ARB does not issue a notice
accepting a petition for review of the
decision within 30 days after receipt of
a timely filing of the petition, or within 30 days of the date of the decision if
no petition has been received, the decision of the ALJ will be deemed the
final agency action.
(d) Whenever the ARB, either on the
ARB’s own motion or by acceptance of
a party’s petition, determines to review the decision of an ALJ, a notice of
the same will be served upon the ALJ
and upon all parties to the proceeding.
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Wage and Hour Division, Labor
§ 505.1
§ 503.52 Responsibility of the Office of
Administrative Law Judges (OALJ).
Upon receipt of the ARB’s notice
under § 503.51, the OALJ will promptly
forward a copy of the complete hearing
record to the ARB.
§ 503.53 Additional information, if required.
Where the ARB has determined to review such decision and order, the ARB
will notify the parties of:
(a) The issue or issues raised;
(b) The form in which submissions
will be made (i.e., briefs, oral argument); and
(c) The time within which such presentation will be submitted.
§ 503.54 Submission of documents to
the Administrative Review Board.
All documents submitted to the ARB
will be filed with the Administrative
Review Board, U.S. Department of
Labor, 200 Constitution Avenue NW.,
Room S–5220, Washington, DC 20210. An
original and two copies of all documents must be filed. Documents are
not deemed filed with the ARB until
actually received by the ARB. All documents, including documents filed by
mail, must be received by the ARB either on or before the due date. Copies
of all documents filed with the ARB
must be served upon all other parties
involved in the proceeding.
§ 503.55 Final decision of the Administrative Review Board.
The ARB’s final decision will be
issued within 90 days from the notice
granting the petition and served upon
all parties and the ALJ.
RECORD
§ 503.56
Retention of official record.
The official record of every completed administrative hearing provided
by the regulations in this part will be
maintained and filed under the custody
and control of the Chief ALJ, or, where
the case has been the subject of administrative review, the ARB.
PART 504—ATTESTATIONS BY FACILITIES USING NONIMMIGRANT
ALIENS AS REGISTERED NURSES
AUTHORITY: 8 U.S.C. 1101(a)(15)(H)(i)(a) and
1182(m); sec. 3(c)(1), Pub. L. 101–238, 103 Stat.
2099, 2103; and sec. 341 (a) and (b), Pub. L. 103–
182, 107 Stat. 2057.
SOURCE: 61 FR 51014, Sept. 30, 1996, unless
otherwise noted.
§ 504.1 Cross-reference.
Regulations governing labor condition attestations by facilities using
nonimmigrant aliens as registered
nurses are found at 20 CFR part 655,
subparts D and E.
PART 505—LABOR STANDARDS ON
PROJECTS OR PRODUCTIONS ASSISTED BY GRANTS FROM THE
NATIONAL ENDOWMENTS FOR
THE ARTS AND HUMANITIES
Sec.
505.1 Purpose and scope.
505.2 Definitions.
505.3 Prevailing minimum compensation.
505.4 Receipt of grant funds.
505.5 Adequate assurances.
505.6 Safety and health standards.
505.7 Failure to comply.
AUTHORITY: Sec. 5(j), Pub. L. 89–209, 79
Stat. 848 (20 U.S.C. 954(i)); sec. 7(g), Pub. L.
94–462, 90 Stat. 1971, as amended by sec.
107(4), Pub. L. 99–194, 99 Stat. 1337 (20 U.S.C.
956(g)); Secretary’s Order No. 01–2014 (Dec. 19,
2014), 79 FR 77527 (Dec. 24, 2014); Secretary’s
Order 01–2012 (Jan. 18, 2012), 77 FR 3912 (Jan.
25, 2012).
SOURCE: 53 FR 23541, June 22, 1988, unless
otherwise noted.
§ 505.1 Purpose and scope.
(a) The regulations contained in this
part set forth the procedures which are
deemed necessary and appropriate to
carry out the provisions of section 5(i)
and section 7(g) of the National Foundation on the Arts and Humanities Act
of 1965, as amended, 20 U.S.C. 954(i), 20
U.S.C. 956(g). As a condition to the receipt of any grant, the grantees must
give adequate assurances that all professional performers and related or supporting professional personnel employed on projects or productions assisted by grants from the National Endowment for the Arts and the National
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§ 505.2
29 CFR Ch. V (7–1–19 Edition)
Endowment for the Humanities shall
receive not less than the prevailing
minimum compensation as determined
by the Secretary of Labor.
(b) Regulations and procedures relating to wages on construction projects
as provided in section 5(j) and section
7(j) of the National Foundation on the
Arts and Humanities Act of 1965, as
amended, may be found in parts 3 and
5 of this title.
(c) Standards of overtime compensation for laborers or mechanics may be
found in the Contract Work Hours and
Safety Standards Act, 76 Stat. 357, 40
U.S.C. 327 et seq. and part 5 of this title.
§ 505.2 Definitions.
(a) The term Act means the National
Foundation on the Arts and the Humanities Act of 1965, as amended, 79
Stat 848, as amended, 20 U.S.C. 951 et
seq.
(b) The term Secretary means the Secretary of Labor.
(c) The term Administrator means the
Administrator of the Wage and Hour
Division, U.S. Department of Labor, or
authorized representative, to whom is
assigned the performance of functions
of the Secretary pertaining to wages
under the National Foundation on the
Arts and the Humanities Act of 1965, as
amended.
(d) The term Assistant Secretary
means the Assistant Secretary for Occupational Safety and Health, U.S. Department of Labor, or authorized representative, to whom is assigned the
performance of functions of the Secretary pertaining to safety and health
under the National Foundation on the
Arts and the Humanities Act of 1965, as
amended.
(e) Professional in the phrase professional performer and related or supporting
professional personnel shall include all
those who work for compensation on a
project or production which is assisted
by a grant from the National Endowment for the Arts or the National Endowment for the Humanities regardless
of whether paid out of grant funds. It
shall not include those whose status is
amateur because their engagement for
performance or supporting work contemplates no compensation. Compensation does not include reimbursement of
expenses (i.e., meals, costumes, make-
up etc.). The words related or supporting
. . . personnel in the same phrase shall
include all those whose work is related
to the particular project or production
such as musicians, stage hands, scenery designers, technicians, electricians and moving picture machine
operators, as distinguished from those
who operate a place for receiving an
audience without reference to the particular project or production being exhibited, such as ushers, janitors, and
those who sell and collect tickets. The
phrase does not include laborers and
mechanics employed by contractors or
subcontractors
on
construction
projects, whose compensation is regulated under section 5(j) and section 7(j)
of the Act. The phrase professional performers and related or supporting professional personnel shall not include persons employed as regular faculty or
staff of an educational institution primarily performing duties commonly
associated with the teaching profession. It shall include persons employed
by educational institutions primarily
to engage in activities customarily
performed by performing artists or by
those who assist in the presentation of
performances assisted by grants from
the National Endowment for the Arts
or the National Endowment for the Humanities.
[48 FR 36741, Aug. 12, 1983, as amended at 82
FR 2227, Jan. 9, 2017]
§ 505.3 Prevailing minimum compensation.
(a)(1) In the absence of an alternative
determination made by the Administrator under paragraph (b) of this section, and except as provided in paragraph (a)(2) of this section, the prevailing minimum compensation required to be paid under the Act to the
various professional performers and related or supporting professional personnel employed on projects or productions assisted by grants from the National Endowment for the Arts and the
National Endowment for the Humanities shall be the compensation (including fringe benefits) contained in collective bargaining agreements negotiated
by the following national or international labor organizations or their
local affiliates:
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Wage and Hour Division, Labor
§ 505.3
Actors’ Equity Association.
Screen Actors Guild, Inc.
Screen Extras Guild, Inc.
American Guild of Musical Artists, Inc.
International Alliance of Theatrical Stage
Employees and Moving Picture Machine
Operators.
American Federation of Musicians.
National Association of Broadcast Employees and Technicians.
American Federation of Television and
Radio Artists.
International Brotherhood of Electrical
Workers.
American Guild of Variety Artists.
Writers Guild.
(2) Professional performers and related or supporting professional personnel who are to perform activities
which do not come within the jurisdiction of any collective bargaining agreement negotiated by the labor organizations named in paragraph (a)(1) of this
section shall be paid minimum compensation as determined by agreement
of the grant applicant or grantee and
the personnel who will perform such
activities or their representatives. Evidence of the agreement reached by the
parties shall be submitted by the grant
applicant to the grant agency, together
with evidence of the prevailing minimum compensation for similar activities. If the parties do not agree on the
minimum compensation to be paid to
such personnel, the matter shall be referred to the Administrator of the
Wage and Hour Division for final determination.
(b)(1) Interested parties, including
grant applicants, grantees, professional
performers or related or supporting
professional personnel and their representatives, may at any time submit
to the Administrator a request for a
determination of prevailing minimum
compensation. The Administrator will
make a determination concerning each
such request in accordance with paragraph (b)(4) of this section.
(2) Any request for a determination
of prevailing minimum compensation
shall include or be accompanied by information as to the locality or localities, the class or classes of professional performers or related or supporting professional personnel for the
project or production in question, the
names and addresses (to the extent
known) of interested parties, and all
available information relating to pre-
vailing minimum compensation currently being paid to such persons or to
persons employed in similar activities.
No particular form is prescribed for
submission of information under this
section.
(3) If the information specified in
paragraph (b)(2) of this section is not
submitted with a request for an alternative determination of prevailing
minimum compensation or is insufficient to permit a determination, the
Administrator may deny the request or
request additional information, at the
Administrator’s discretion. Pertinent
information from any source may be
considered by the Administrator in
connection with any request.
(4) The Administrator will respond to
a request for determination under this
section within 30 days of receipt, by
issuing a determination of alternative
prevailing minimum compensation or
denying the request or advising that
additional time is necessary for a decision. If the Administrator determines
from a preponderance of all relevant
evidence obtained in connection with
the request that the compensation provided for in the agreements negotiated
by the labor organizations set forth in
paragraph (a) of this section does not
prevail for any professional performer
or related or supporting professional
personnel employed on similar activities in the locality, the Administrator
will issue a determination of the prevailing minimum compensation required to be paid under the Act to such
persons. If the Administrator finds
that the compensation provided for in
the agreements negotiated by the labor
organizations set forth in paragraph (a)
of this section does prevail for the professional performers or related or supporting professional personnel in question, the requesting party will be so
notified.
(c) All professional performers and
related or supporting professional personnel (other than laborers or mechanics with respect to whom labor standards are prescribed in section 5(j) and
7(j) of the Act) employed on projects or
productions which are financed in
whole or in part under section 5 or section 7 of the Act will be paid, without
subsequent deduction or rebate on any
account, not less than the prevailing
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§ 505.4
29 CFR Ch. V (7–1–19 Edition)
minimum compensation determined in
accordance with paragraph (a) of this
section, unless an alternative determination is made under paragraph (b)
of this section. Pending the decision of
the Administrator on a request for determination under paragraph (b) of this
section, the grantee may be required to
set aside in a separate escrow account
sufficient funds to satisfy the difference between the compensation (including fringe benefits) actually paid
to the employee(s) in question, and the
compensation (including fringe benefits) required under the applicable collective bargaining agreement negotiated by the labor organization named
in paragraph (a) of this section, or furnish a bond with a surety or sureties
satisfactory to the Administrator for
the protection of the compensation of
the affected employees.
§ 505.4 Receipt of grant funds.
(a) The grantee shall not receive
funds authorized by section 5 or section
7 of the Act until adequate initial assurances have been filed with the
Chairperson of the National Endowment for the Arts or the Chairperson of
the National Endowment for the Humanities, pursuant to sections 5(i) (1)
and (2) and sections 7(g) (1) and (2) of
the Act as provided in § 505.5(a), that
all professional performers and related
or supporting professional personnel
will be paid not less than the prevailing minimum compensation and
that the safety and health requirements will be complied with. Neither
shall the grantee receive any such
funds if and after the Chairperson of
the National Endowment for the Arts
or Chairperson of the National Endowment for the Humanities is advised by
the Secretary that continuing assurances as provided in § 505.5(b) are inadequate or that labor standards contemplated by sections 5(i) (1) and (2) or
sections 7(g) (1) and (2) of the Act have
not been observed.
(b) In order to facilitate such assurances so that the grantee may receive
the grant funds promptly, the Chairpersons of the National Endowment for
the Arts and the National Endowment
for the Humanities will transmit with
the grant letter, to each grantee of a
grant that will provide assistance to
projects or productions employing professional performers or related or supporting professional personnel under
section 5 or section 7 of the Act, a copy
of these regulations together with two
copies of the assurance form (Form No.
ESA–38). The Chairperson will advise
the grantee that before the grant may
be received, the grantee must give assurances that all professional performers and related or supporting professional personnel (other than laborers or mechanics with respect to whom
labor standards are prescribed in section 5(j) and section 7(j) of the Act),
will be paid, without subsequent deduction or rebate on any account not less
than the minimum compensation determined in accordance with § 505.3 (a)
or (b) and that the safety and health
requirements under § 505.6 will be met.
The Chairpersons will maintain on file
in Washington, DC, for a period of
three (3) years and make available
upon request of the Secretary the
original signed Form ESA–38 and a
copy of the grant letter together with
any supplementary documents needed
to give a description of the project or
production to be financed in whole or
in part under the grant.
§ 505.5 Adequate assurances.
(a) Initial assurances. The grantee
shall give adequate initial assurances
that not less than the prevailing minimum compensation determined in accordance with § 505.3 will be paid to all
professional performers and related or
supporting professional personnel, and
that no part of the project or production will be performed under working
conditions which are unsanitary or
hazardous or dangerous to the health
and safety of the employees, by executing and filing with the Chairperson
of the National Endowment for the
Arts or the Chairperson of the National
Endowment for the Humanities, as appropriate, Form ESA–38.
(b) Continuing assurances. (1) The
grantee shall maintain and preserve
sufficient records as an assurance of
compliance with section 5(i) (1) and (2)
and section 7(g) (1) and (2) of the Act
and shall make such reports therefrom
to the Secretary as necessary or appropriate to assure the adequacy of the assurances given. Such records shall be
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Wage and Hour Division, Labor
§ 505.6
kept for a period of three (3) years after
the end of the grant period to which
they pertain. These records shall include the following information relating to each performer and related or
supporting professional personnel to
whom a prevailing minimum compensation determination applies pursuant to § 505.3. In addition the record required in paragraph (b)(1)(vii) of this
section shall be kept for all employees
engaged in the project or production
assisted by the grant.
(i) Name.
(ii) Home address.
(iii) Occupation.
(iv) Basic unit of compensation (such
as the amount of a weekly or monthly
salary, talent or performance fee, hourly rate or other basis on which compensation is computed), including
fringe benefits or amounts paid in lieu
thereof.
(v) Work performed for each pay period expressed in terms of the total
units of compensation fully and partially completed.
(vi) Total compensation paid each
pay period, deductions made, and date
of payment, including amounts paid for
fringe benefits and the person to whom
they were paid, and
(vii) Brief description of any injury
incurred while performing under the
grant and the dates and duration of
disability.
(2) The grantee shall permit the Administrator and the Assistant Secretary or their representatives to investigate and gather data regarding
the wages, hours, safety, health, and
other conditions and practices of employment related to the project or production, and to enter and inspect such
project or production and such records
(and make such transcriptions thereof),
interview such employees during normal working hours, and investigate
such facts, conditions, practices, or
matters as may be deemed necessary or
appropriate to determine whether the
grantee has violated the labor standards contemplated by section 5(i) and
section 7(g) of the Act.
(c) Determination of adequacy. The Administrator and Assistant Secretary
shall determine the adequacy of assurances given pursuant to paragraphs (a)
and (b) of this section within each of
their respective areas of responsibilities, and may revise any such determination at any time.
(The requirements in paragraph (b) were approved by the Office of Management and
Budget under control number 1235–0018)
[53 FR 23541, June 22, 1988; 53 FR 24171, June
27, 1988, as amended at 82 FR 2227, Jan. 9,
2017]
§ 505.6
Safety and health standards.
(a) Standards. Section 5(i)(2) and section 7(g)(2) of the Act provide that ‘‘no
part of any project or production which
is financed in whole or in part under
this section will be performed or engaged in under working conditions
which are unsanitary or hazardous or
dangerous to the health and safety of
the employees engaged in such project
or production. Compliance with the
safety and sanitary laws in the State
in which the performance or part
thereof is to take place shall be prima
facie evidence of compliance. * * *’’
The applicable safety and health standards shall be those set forth in 29 CFR
parts 1910 and 1926, including matters
incorporated by reference therein. Evidence of compliance with State laws
relating to health and sanitation will
be considered prime facie evidence of
compliance with the safety and health
requirements of the Act, and it shall be
sufficient unless rebutted or overcome
by a preponderance of evidence of a
failure to comply with any applicable
safety and health standards set forth in
29 CFR parts 1910 and 1926, including
matters incorporated by reference
therein.
(b) Variances. (1) Variances from
standards applied under paragraph (a)
of this section may be granted under
the same circumstances in which
variances may be granted under section 6(b)(6)(A) or 6(d) of the WilliamsSteiger
Occupational
Safety
and
Health Act of 1970 (29 U.S.C. 655). The
procedures
for
the
granting
of
variances and for related relief are
those published in part 1905 of this
title.
(2) Any requests for variances shall
also
be
considered
requests
for
variances under the Williams-Steiger
Occupational Safety and Health Act of
1970, and any variance from a standard
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§ 505.7
29 CFR Ch. V (7–1–19 Edition)
applied under paragraph (a) of this section and in part 1910 of this title shall
be deemed a variance from the standards under both the National Foundation on the Arts and Humanities Act of
1965 and the Williams-Steiger Occupational Safety and Health Act of 1970.
§ 505.7
Failure to comply.
The Secretary’s representatives shall
maintain a list of those grantees who
are considered to be responsible for instances of failure to comply with the
obligation of the grantees specified in
section 5(i) (1) and (2) and section 7(g)
(1) and (2) of the Act, which are considered to have been willful or of such nature as to cast doubt on the reliability
of formal assurances subsequently
given and there shall be maintained a
similar list where adjustment of the
violations satisfactory to the Secretary was not properly made. Assurances from persons or organizations
placed on either such list or any organization in which they have a substantial interest shall be considered inadequate for purposes of receiving further
grants for a period not to exceed three
(3) years from the date of notification
by the Secretary that they have been
placed on the lists unless, by appropriate application to the Secretary,
they demonstrate a current responsibility to comply with section 5(i) (1)
and (2) and section 7(g) (1) and (2) of the
Act, and demonstrate that correction
of the violations has been made.
PART 506—ATTESTATIONS BY EMPLOYERS USING ALIEN CREWMEMBERS FOR LONGSHORE ACTIVITIES IN U.S. PORTS
AUTHORITY: 8 U.S.C. 1288 (c) and (d).
SOURCE: 61 FR 51014, Sept. 30, 1996, unless
otherwise noted.
§ 506.1
PART 507—LABOR CONDITION APPLICATIONS AND REQUIREMENTS
FOR EMPLOYERS USING NONIMMIGRANTS ON H–1B SPECIALTY VISAS IN SPECIALTY OCCUPATIONS AND AS FASHION
MODELS
AUTHORITY: 8 U.S.C. 1101(a)(15)(H)(i)(b),
1182(n), and 1184; 29 U.S.C. 49 et seq.; Pub. L.
102–232, 105 Stat. 1733, 1748 (8 U.S.C. 1182
note); and sec. 341 (a) and (b), Pub. L. 103–182,
107 Stat. 2057.
SOURCE: 61 FR 51014, Sept. 30, 1996, unless
otherwise noted.
§ 507.1
Cross-reference.
Regulations governing labor condition applications requirements for employers using nonimmigrants on H–1B
specialty visas in specialty occupations
and as fashion models are found at 20
CFR part 655, subparts H and I.
PART 508—ATTESTATIONS FILED BY
EMPLOYERS UTILIZING F–1 STUDENTS FOR OFF-CAMPUS WORK
AUTHORITY: 29 U.S.C. 49 et seq.; and sec.
221(a), Pub. L. 101–649, 104 Stat. 4978, 5027 (8
U.S.C. 1184 note).
SOURCE: 61 FR 51014, Sept. 30, 1996, unless
otherwise noted.
§ 508.1
Cross-reference.
Regulations governing attestations
by employers using F–1 students in offcampus work are found at 20 CFR part
655, subparts J and K.
PART 510—IMPLEMENTATION OF
THE MINIMUM WAGE PROVISIONS OF THE 1989 AMENDMENTS TO THE FAIR LABOR
STANDARDS ACT IN PUERTO
RICO
Cross-reference.
Regulations governing attestations
by employers using alien crewmembers
for longshore activities in U.S. ports
are found at 20 CFR part 655, subparts
F and G.
Subpart A—General
Sec.
510.1
510.2
510.3
Summary.
Purpose and scope of regulations.
Definitions.
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Wage and Hour Division, Labor
§ 510.2
Subpart B—Schedule of Minimum Wage
Rates Applicable in Puerto Rico
510.10 Table of Wage Rates and Effective
dates.
Subpart C—Classification of Industries
510.20 Wage surveys in Puerto Rico.
510.21 SIC codes.
510.22 Industries eligible for minimum wage
phase-in.
510.23 Agricultural activities eligible for
minimum wage phase-in.
510.24 Governmental entities eligible for
minimum wage phase-in.
510.25 Traditional functions of government.
APPENDIX A TO PART 510—MANUFACTURING
INDUSTRIES ELIGIBLE FOR MINIMUM WAGE
PHASE-IN
APPENDIX B TO PART 510—NONMANUFACTURING INDUSTRIES ELIGIBLE FOR MINIMUM
WAGE PHASE-IN
APPENDIX C TO PART 510—GOVERNMENT CORPORATIONS ELIGIBLE FOR MINIMUM WAGE
PHASE-IN
APPENDIX D TO PART 510—MUNICIPALITIES ELIGIBLE FOR MINIMUM WAGE PHASE-IN
AUTHORITY: Sec. 4, Pub. L. 101–157, 103 Stat.
938; 29 U.S.C. 201 et seq.
SOURCE: 55 FR 12120, Mar. 30, 1990, unless
otherwise noted.
Subpart A—General
§ 510.1 Summary.
(a) The Fair Labor Standards Amendments of 1989 (Pub. L. 101–157) were enacted into law on November 17, 1989.
Among other provisions, these amendments to the Fair Labor Standards Act
(FLSA) increased the minimum wage
in section 6(a)(1) of the Act to $3.80 an
hour effective April 1, 1990, and to $4.25
an hour effective April 1, 1991. With respect to certain industries and governmental entities in the Commonwealth
of Puerto Rico, the Amendments provided that these increases would be
phased in over extended periods of
time.
(b) Section 6(c) of the FLSA provides
for four separate categories or tiers for
implementing the minimum wage rate
increases in Puerto Rico.
(1) For Tier 1, which includes employees of the United States, employees of
hotels, motels, or restaurants, retail or
service establishments that employ
such employees primarily in connection with the preparation or offering of
food or beverages for human consump-
tion, and industries in which the average hourly wage is greater than $4.64,
there shall be no phase-in. The wage
rates and effective dates shall be those
specified in section 6(a)(1) of FLSA,
i.e., $3.80 per hour beginning April 1,
1990 and $4.25 per hour beginning April
1, 1991.
(2) For Tier 2, which includes industries in which the average hourly wage
is not less than $4.00 but not more than
$4.64, the increases in the minimum
wage rates shall be phased-in in five
annual increments (rounded to the
nearest 5 cents) beginning April 1, 1990,
and ending April 1, 1994.
(3) For Tier 3, which includes industries in which the average hourly wage
is less than $4.00, the increases in the
minimum wage shall be phased-in in
six annual increments (rounded to the
nearest 5 cents) beginning April 1, 1990,
and ending April 1, 1995.
(4) For Tier 4, which includes certain
employees of the Commonwealth of
Puerto Rico, municipalities, and other
governmental entities of the Commonwealth in which the average hourly
wage is less than $4.00, the increases
shall be phased-in in seven annual increments (rounded to the nearest 5
cents) beginning April 1, 1990 and ending April 1, 1996.
(c) The Amendments also eliminated
reference to Puerto Rico in those sections of FLSA relating to the establishment and conduct of special industry committees which recommend minimum wage rates in certain territories.
These sections now apply only to
American Samoa. (Industry committee
regulations pertaining to American
Samoa are found in 29 CFR parts 511
and 697).
§ 510.2 Purpose and scope of regulations.
(a) The purpose of these regulations
is to implement the 1989 Amendments
to the FLSA with respect to minimum
wage increases in Puerto Rico. These
regulations establish the applicable
wage rates and effective dates in the
four statutory tiers and categorize industries and governmental entities in
Puerto Rico in those tiers according to
average hourly wage rates. In addition,
these regulations explain the methodology used to determine appropriate
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§ 510.3
29 CFR Ch. V (7–1–19 Edition)
tiers, including the use of standard industrial classification (SIC) codes to
categorize industries.
(b) Subpart A of this part summarizes the provisions of the Amendments
as applicable to Puerto Rico and defines the terms used herein. Subpart B
of this part states the specific minimum wage rates for each tier and the
effective dates of those rates. Subpart
C of this part explains how industry
and governmental categories were determined, the general methodology
used to conduct the surveys which provided the data used to determine average hourly wage rates, and special
issues in the classification of governmental entities. Appendix A of this
part contains a listing of manufacturing industries by Standard Industrial Classification (SIC) code and indicates the tier to which each industry is
subject. Appendix B of this part contains a listing of nonmanufacturing industries by SIC code and indicates the
tier to which each industry is subject.
Appendix C of this part contains a listing of government corporations and indicates the tier to which each such corporation is subject. Appendix D of this
part contains a listing of municipalities and indicates the tier to which
each municipality is subject.
(c) Nothing contained in this part
should be construed as precluding the
Puerto Rico Minimum Wage Board,
which has been granted authority to
promulgate minimum wage rates above
the Federal statutory minimum, from
providing for increases in any industry
which would exceed the rates provided
for in these regulations or in section
6(a)(1) of the Act.
§ 510.3 Definitions.
(a) Act or FLSA means the Fair Labor
Standards Act of 1938, as amended (29
U.S.C. 201, et seq.).
(b) Amendments or 1989 Amendments
means the Fair Labor Standards
Amendments of 1989 (Pub. L. 101–157).
(c) Secretary means the Secretary of
Labor, or a duly authorized representative of the Secretary.
(d) Administrator means the Administrator of the Wage and Hour Division
of the Employment Standards Administration, U.S. Department of Labor, or
a duly authorized representative of the
Administrator.
(e) Department means the U.S. Department of Labor.
(f) Tier means one of the four categories established for an extended
phase-in of the statutory increases in
the minimum wage under section 6(c)
of the Act as amended.
(g) Standard Industrial Classification
(SIC) refers to the classifications established in the Standard Industrial Classification Manual, 1987, published by the
Office of Management and Budget, Executive Office of the President.
Subpart B—Schedule of Minimum
Wage Rates Applicable in
Puerto Rico
§ 510.10 Table of wage rates and effective dates.
(a) The following table provides effective dates of minimum wage increases
for the four statutory tiers. Appendices
A and B to these regulations contain
listings of manufacturing and nonmanufacturing industries in Puerto
Rico by SIC code, and indicate which
tier is applicable. Appendices C and D
contain listings of government corporations and municipalities and indicate which tier is applicable.
EFFECTIVE DATES
Tier
4/1/90
One ...........................................................
Two ...........................................................
Three .........................................................
Four ...........................................................
4/1/91
$3.80
3.55
3.50
3.50
4/1/92
$4.25
3.70
3.65
3.60
(b) Tier 1 applies to employees of the
United States, employees of hotels,
$4.25
3.90
3.80
3.75
4/1/93
$4.25
4.05
3.95
3.85
4/1/94
$4.25
4.25
4.10
4.00
4/1/95
$4.25
4.25
4.25
4.10
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$4.25
4.25
4.25
4.25
motels, or restaurants, retail or service
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Wage and Hour Division, Labor
§ 510.21
establishments that employ such employees primarily in connection with
the preparation or offering of food or
beverages for human consumption, and
industries in which the average hourly
wage is greater than $4.64.
(c) Tier 2 applies to industries in
which the average hourly wage is not
less than $4.00 but not more than $4.64.
(d) Tier 3 applies to industries in
which the average hourly wage is less
than $4.00.
(e) Tier 4 applies to certain employees of the Commonwealth of Puerto
Rico, municipalities, and other governmental entities of the Commonwealth
in which the average hourly wage is
less than $4.00.
Subpart C—Classification of
Industries
§ 510.20 Wage surveys in Puerto Rico.
(a) The legislative history to the 1989
Amendments (Conference Report 101–47
on H.R. 2, May 8, 1989) stated that for
any industry to qualify for an extended
minimum wage phase-in, the government of Puerto Rico would be required
to furnish official survey data substantiating that an industry’s average
hourly wage is below either the $4.65 or
$4.00 threshold level. Such data were to
be compiled and submitted for review
to the Department.
(b) Manufacturing industries. For purposes of implementing section 6(c) of
the Act, as amended, Puerto Rico has
submitted its Census of Manufacturing
Industries. The Bureau of Labor Statistics of Puerto Rico regularly gathers
data from manufacturing establishments regarding employment, hours
and earnings. The data include hourly
earnings for production and related
workers and are generally specific to
the four-digit SIC code level.
(c) Non-manufacturing industries. The
Bureau of Labor Statistics of Puerto
Rico designed and executed a survey to
supplement data regularly gathered for
the U.S. Bureau of Labor Statistics
(i.e., that included in the payroll establishment survey published in Employment and Earnings). The supplemental
survey was carried out to determine
average hourly earnings for production
workers or non-supervisory employees
in the private non-agricultural, non-
manufacturing sector. Employment
and payroll information was collected
for the payroll period which included
April 12, 1989. The data provided to the
Department were generally specific to
the four-digit SIC code level.
(d) Agriculture. At the request of the
Department, the Bureau of Labor Statistics of Puerto Rico conducted a survey of wages paid to agricultural workers which included employment and
earnings from at least a specified number of sugarcane farms, coffee farms,
ornamental farms, vegetable farms,
and other farms, following standard
statistical random sampling techniques. The survey included information on earnings, employment, and
hourly wage rates paid to workers for
the workweek including March 11
through March 17, 1990. In addition, applicable collective bargaining agreements were reviewed for sugarcane
farms.
(e) Commonwealth government. In the
case of the Commonwealth Government of Puerto Rico, a census of hourly earnings was undertaken of all government departments, commissions
and other agencies. A separate survey
was conducted of government corporations. Managers, officials and employees in positions which require a college
degree were excluded from the surveys.
(f) Municipalities. In the case of the
municipalities of Puerto Rico, a census
of hourly earnings was conducted.
Managers, officials and employees in
positions which require a college degree were excluded from the survey.
[55 FR 12120, Mar. 30, 1990, as amended at 55
FR 53247, Dec. 27, 1990]
§ 510.21
SIC codes.
(a) The Conference Report specifically cites Puerto Rico’s annual Census
of Manufacturing Industries as a
source of average hourly wage data by
industry. Industries in that census are
organized by Standard Industrial Classification (SIC), the statistical classification system used for a variety of
governmental and statistical purposes.
With respect to non-manufacturing industries, or other industries not included in the Census of Manufacturing,
the Conference Report stated that data
‘‘should be at a level of specificity
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§ 510.22
29 CFR Ch. V (7–1–19 Edition)
comparable to the four digit Standard
Industry Code (SIC) code level.’’
(b) The Standard Industrial Classification (SIC) codes listed in appendix
A and B herein are designated in accordance with the Standard Industrial
Classification (SIC) Manual, 1987, published by the Executive Office of the
President, Office of Management and
Budget. This incorporation by reference was approved by the Director of
the Federal Register in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51.
Copies may be obtained from the National Technical Information Service,
5285 Port Royal Road, Springfield, VA
22161. Copies may be inspected at all
federal depository libraries in the Commonwealth of Puerto Rico; at the district office of the Wage and Hour Division, U.S. Department of Labor, New
San Juan Office Building, 159 Chardon
St., room 102, Hato Rey, PR 00918; at
the Commonwealth of Puerto Rico Department of Labor and Human Resources, Prudencio Rivera Building,
Munoz Rivera Avenue 505, Mato Rey,
PR 00918; or at the National Archives
and Records Administration (NARA).
For information on the availability of
this material at NARA, call 202–741–
6030, or go to: http://www.archives.gov/
federallregister/
codeloflfederallregulations/
ibrllocations.html. Establishments are
classified according to their primary
activity. The classification structure
classifies industries by:
(1) Two-digit major group,
(2) Three digit industry group, or
(3) Four-digit industry code, according to the level of industrial detail
which may be required.
Each operating establishment is assigned an industry code on the basis of
its primary activity, which is determined by its principal product or group
of products produced or distributed, or
services rendered.
[55 FR 12120, Mar. 30, 1990; 55 FR 12778, Apr.
5, 1990, as amended at 69 FR 18803, Apr. 9,
2004]
§ 510.22 Industries eligible for minimum wage phase-in.
(a) Appendix A contains a listing of
all industries included in the Census of
Manufacturing. Appendix B contains a
listing of non-manufacturing indus-
tries. These listing are organized by
SIC numbers, presented by:
(1) Major group (two-digit classification),
(2) Industry group (three-digit classification), and (3) industry (four-digit
classification). In each instance the
phase-in tier which applies to that industry or group is indicated.
(b) Employers are required to utilize
the most detailed classification which
applies to their industry. Where an employer’s four-digit SIC code is listed,
the tier applicable to that code determines the minimum wage phase-in
schedule for that employer. (See
§ 510.10, above).
(c) Where an industry is not listed by
four-digit SIC code, employers shall
utilize the three-digit which applies to
their industry. If a three-digit code is
not listed, employers shall use the applicable two-digit code.
[55 FR 12120, Mar. 30, 1990; 55 FR 12778, Apr.
5, 1990]
§ 510.23 Agricultural activities eligible
for minimum wage phase-in.
Agriculture activities eligible for an
extended phase-in of the minimum
wage in Major groups 01, 02, and 07 have
been incorporated into Appendix B—
Nonmanufacturing Industries Eligible
for Minimum Wage Phase-In. Applicable wage rates are effective retroactive
to April 1, 1990. Employers in the sugarcane farming industry (SIC Number
0133) who are subject to Tier 3 wage
rates but who have paid wage rates
based on Tier 2 wage rates may not
take any action to recoup such payments where those actions would have
the effect of reducing the wage rate
being paid at the time of such
recoupment to below that required
under Tier 3.
[55 FR 53247, Dec. 27, 1990]
§ 510.24 Governmental entities eligible
for minimum wage phase-in.
(a) The Commonwealth government
of Puerto Rico has been determined to
be eligible for treatment under Tier 2,
on the basis of wage data supplied to
the Department.
(b) Appendix C of this part contains a
listing of Commonwealth government
corporations, indicating the phase-in
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Wage and Hour Division, Labor
§ 510.25
tier which applies. Entities which do
not appear on the list are those for
which no wage data were supplied.
These entities are therefore categorized under Tier 1, and are ineligible for an extended phase-in.
(c) Appendix D of the part contains a
listing of municipalities, indicating the
phase-in tier which applies. Municipalities categorized under Tier 1 are those
which failed to supply wage data.
(d) Employees of municipalities who
have reason to believe that the municipality by which they are employed has
been incorrectly categorized, e.g., categorized under Tier 3 instead of Tier 2,
may no later than June 1, 1990, file
with the Administrator a petition for
review. The petition shall be accompanied by any information the employee may have to support a determination that the municipality is incorrectly categorized. In the event the
Administrator determines that a tier
other than that listed in appendix D of
this part applies, the affected municipality shall be liable for retroactive
payment of any back wages found to be
due.
(e) Certain employees of municipalities or government corporations in
which the average wage is less than
$4.00 per hour are eligible to be paid
under Tier 4, rather than Tier 3. Tier 4
applies only to those employees employed by municipalities or government corporations who are principally
engaged in one or more of the ‘‘traditional’’ functions listed in § 510.24 (a) or
(b). All other employees of such entities must be paid in accordance with
Tier 3.
[55 FR 12120, Mar. 30, 1990; 55 FR 12778, Apr.
5, 1990]
§ 510.25 Traditional functions of government.
(a) Section 6(c)(4) of the Act, as
amended, limits the six-year phase-in
of the statutory minimum wage (‘‘Tier
4’’) to those employees with an average
wage of less than $4.00 per hour who
were brought under minimum wage
coverage ‘‘pursuant to an amendment
made by the Fair Labor Standards
Amendments of 1985.’’ The Department
has interpreted this language as referring to section 2(c) of the 1985 FLSA
Amendments, which provided for de-
ferred liability for minimum wage violations (until April 15, 1986) ‘‘with respect to any employee who would not
have been covered under the Secretary’s special enforcement policy’’
published in 29 CFR 775.2 and 775.4. The
latter subsection listed those functions
of State or local government which
were determined by the Supreme
Court’s ruling in National League of Cities v. Usery, 426 U.S. 833 (1976) (subsequently overruled by Garcia v. San Antonio Metropolitan Transit Authority, 469
U.S. 528 (1985)) to be integral operations of the governments in areas of
traditional governmental functions.
The listed ‘‘traditional’’ functions included the following:
(1) Schools.
(2) Hospitals.
(3) Fire prevention.
(4) Police protection.
(5) Sanitation.
(6) Public health.
(7) Parks and recreation.
(8) Libraries.
(9) Museums.
(b) The Supreme Court in National
League of Cities clearly did not limit
‘‘traditional’’ functions of government
to those set out in paragraph (a) of this
section. The Court included within this
concept all those governmental services which the States and their political subdivisions have traditionally afforded their citizens, which the States
have regarded as integral parts of their
governmental activities, and which
State and local governments are created to provide. The Department interprets the Court’s analysis of ‘‘traditional’’ functions as turning in large
part upon whether the States or local
governments had, prior to initial enactment of federal regulatory legislation applicable to a particular field of
service or activity (such as FLSA),
generally established themselves as
providers of the services. The Department therefore views the following
government functions as falling within
the ‘‘traditional’’ category:
(1) Finance (including Auditor, Budget and Comptroller).
(2) Elections.
(3) Personnel.
(4) Public works.
(5) Office of the Mayor.
(6) Legal Affairs.
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Pt. 510, App. A
29 CFR Ch. V (7–1–19 Edition)
(7) Planning.
(8) Waterworks.
(9) Social services.
(10) Street and highway construction
and maintenance.
(11) Automobile licensing.
(12) Sewage treatment.
(c) Employees whose primary function falls within one or more of the activities listed in paragraph (a) or (b) of
this section, are therefore considered
to be engaged in ‘‘traditional’’ functions of government. This would include employees who provide support
functions for such activities, such as
clerical, secretarial, supply and janitorial.
(d) No employees of a municipality or
government corporation may be paid in
accordance with the Tier 4 phase-in
schedule unless the employee:
(1) Is engaged in one of the specific
activities listed in paragraphs (a) and
(b) of this section, and
(2) Is employed by a municipality or
government corporation in which the
average wage is less than $4.00 per
hour.
APPENDIX A TO PART 510—MANUFACTURING INDUSTRIES ELIGIBLE FOR
MINIMUM WAGE PHASE-IN
This appendix contains a listing of all
manufacturing industries for which data
were collected and compiled by the Commonwealth of Puerto Rico for purposes of implementing the 1989 Amendments to FLSA. This
listing follows the order and classifications
used in the SIC Manual, 1987, which is incorporated by reference in these regulations
(§ 510.21).
The data in this appendix are presented by
major industry group (two-digit classification), industry group number (three-digit
classification), and industry number (fourdigit classification). Tiers will not be listed
for industry categories in which there were
fewer than three employers, in conformance
with standard procedures used by the Commonwealth of Puerto Rico in collecting and
publishing these data until such time as
Puerto Rico receives appropriate waivers of
confidentiality from all employers in such
categories. These categories are noted with
an ‘‘a’’ on the following table. In addition, no
tier will be listed where an industry was not
included in the original survey, because it
was not in existence, because the industry
was too small to be included, or for other
reasons.
Employers who do not find the four-digit
classification for their industry shall refer to
the appropriate three-digit classification
under which their establishment falls. If the
appropriate three-digit classification is not
listed, employers shall refer to the appropriate two-digit classification. For example,
no tier is listed for industry number 2034,
dried and dehydrated fruits, vegetables, and
soup mixes. Thus, an employer in industry
2034 must use the tier listed for industry
group 203, i.e. Tier 2.
Further, employers who find the appropriate four-digit designation in this appendix
must use that designation and cannot refer to
a two- or three-digit classification. For example, an employer in industry number 2033,
canned fruits, vegetables, preserves, jams,
and jellies, which has a Tier 1 designation,
cannot use the Tier 2 designation of industry
group 203, canned, frozen, and preserved
fruits, vegetables, and food specialties.
If no four-digit, three-digit, or two-digit
classification is listed for an industry, employees in that group must pay the Tier 1
rates.
Important: In referring to this appendix to
determine appropriate tier designations,
please note that certain categories of employees are subject to treatment under Tier
1 regardless of the average hourly wage rate
for the industry and the tier designation
contained herein. These employees, as listed
in the 1989 Amendments, are those employed
by:
(a) The United States
(b) An establishment that is a hotel, motel,
or restaurant, or
(c) Any other retail or service establishment that employs such employee in connection with the preparation or offering of food
or beverages for human consumption, either
on the premises, or by such services as catering, banquet, box lunch, or curb or counter
service, to the public, to employees, or to
members or guests of clubs.
Please note that these named categories
may not correspond exactly to categories established by the SIC manual.
MANUFACTURING INDUSTRIES
Major
group
Industry
group number
Industry
number
20 .............
....................
201
....................
....................
....................
....................
2011
2013
Tier
Industry
1
2
2
1
Food and kindred products.
Meat products.
Meat packing plants.
Sausages and other prepared meat products.
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Pt. 510, App. A
MANUFACTURING INDUSTRIES—Continued
Major
group
21 .............
22 .............
Industry
group number
Industry
number
....................
202
....................
....................
....................
....................
203
....................
....................
....................
2015
....................
2022
2023
2024
2026
....................
2032
2033
2035
2
1
a
1
1
1
2
a
1
3
....................
....................
204
....................
....................
....................
....................
....................
....................
2037
2038
....................
2041
2043
2044
2045
2046
2048
2
3
1
a
a
1
1
1
1
205
....................
....................
....................
206
....................
....................
....................
....................
....................
208
....................
....................
....................
....................
....................
209
....................
....................
....................
....................
....................
....................
....................
211
....................
212
....................
213
....................
214
....................
....................
221
....................
224
....................
2051
2052
2053
....................
2061
2062
2064
2066
2067
....................
2082
2084
2085
2086
2087
....................
2091
2095
2096
2097
2098
2099
....................
....................
2111
....................
2121
....................
2131
....................
2141
....................
....................
2211
....................
1
1
1
a
1
1
a
1
3
a
1
1
3
1
1
1
1
1
2
1
3
a
2
1
a
a
1
1
1
1
a
a
1
1
1
1
....................
2241
1
225
....................
....................
....................
226
....................
....................
227
....................
228
....................
2251
2253
2254
....................
2261
2262
....................
2273
....................
2
1
2
3
1
3
1
1
1
3
Tier
Industry
Poultry slaughtering and processing.
Dairy products.
Natural, processed, and imitation cheese.
Dry, condensed, and evaporated dairy products.
Ice cream and frozen desserts.
Fluid milk.
Canned, frozen, and preserved fruits, vegetables, and food specialties.
Canned specialties.
Canned fruits, vegetables, preserves, jams, and jellies.
Pickled fruits and vegetables, vegetable sauces and seasonings, and salad
dressings.
Frozen fruits, fruit juices, and vegetables.
Frozen specialties, not elsewhere classified.
Grain mill products.
Flour and other grain mill products.
Cereal breakfast foods.
Rice milling.
Prepared flour mixes and doughs.
Wet corn milling.
Prepared feeds and feed ingredients for animals and fowls, except dogs and
cats.
Bakery products.
Bread and other bakery products, except cookies and crackers.
Cookies and crackers.
Frozen bakery products, except bread.
Sugar and confectionery products.
Cane sugar, except refining.
Cane sugar refining.
Candy and other confectionery products.
Chocolate and cocoa products.
Chewing gum.
Beverages.
Malt beverages.
Wines, brandy, and brandy spirits.
Distilled and blended liquors.
Bottled and canned soft drinks and carbonated waters.
Flavoring extracts and flavoring syrups, not elsewhere classified.
Miscellaneous food preparations and kindred products.
Canned and cured fish and seafoods.
Roasted coffee.
Potato chips, corn chips, and similar snacks.
Manufactured ice.
Macaroni, spaghetti, vermicelli, and noodles.
Food preparations, not elsewhere classified.
Tobacco products.
Cigarettes.
Cigarettes.
Cigars.
Cigars.
Chewing and smoking tobacco and snuff.
Chewing and smoking tobacco and snuff.
Tobacco stemming and redrying.
Tobacco stemming and redrying.
Textile mill products.
Broadwoven fabric mills, cotton.
Broadwoven fabric mills, cotton.
Narrow fabric and other smallwares mills: cotton, wool, silk, and manmade
fiber.
Narrow fabric and other smallwares mills: cotton, wool, silk, and manmade
fiber.
Knitting mills.
Women’s full-length and knee-length hosiery, except socks.
Knit outerwear mills.
Knit underwear and nightwear mills.
Dyeing and finishing textiles, except wool fabrics and knit goods.
Finishers of broadwoven fabrics of cotton.
Finishers of broadwoven fabrics of manmade fiber and silk.
Carpets and rugs.
Carpets and rugs.
Yarn and thread mills.
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29 CFR Ch. V (7–1–19 Edition)
MANUFACTURING INDUSTRIES—Continued
Major
group
23 .............
24 .............
25 .............
26 .............
Industry
group number
Industry
number
....................
....................
231
....................
232
....................
....................
....................
....................
....................
....................
233
....................
....................
....................
....................
234
....................
....................
235
....................
236
....................
....................
238
....................
....................
....................
239
....................
....................
....................
....................
....................
....................
....................
242
....................
243
....................
....................
....................
244
....................
245
....................
249
....................
....................
....................
251
....................
....................
....................
....................
....................
....................
252
....................
....................
253
....................
254
....................
....................
259
....................
....................
....................
261
2281
....................
....................
2311
....................
2321
2322
2323
2325
2326
2329
....................
2331
2335
2337
2339
....................
2341
2342
....................
2353
....................
2361
2369
....................
2385
2387
2389
....................
2391
2392
2393
2395
2396
2399
....................
....................
2421
....................
2431
2434
2435
....................
2448
....................
2451
....................
2491
2499
....................
....................
2511
2512
2514
2515
2517
2519
....................
2521
2522
....................
2531
....................
2541
2542
....................
2591
2599
....................
....................
Tier
Industry
3
2
3
3
2
2
1
2
2
3
3
3
3
3
3
2
2
2
2
3
3
3
3
3
3
3
3
3
3
2
3
3
2
2
3
2
3
3
2
2
2
a
3
3
3
3
2
2
2
2
3
3
3
3
2
3
3
2
a
2
3
3
1
2
1
2
3
a
1
1
Yarn spinning mills.
Apparel and other finished products made from fabrics and similar materials.
Men’s and boys’ suits, coats, and overcoats.
Men’s and boys’ suits, coats, and overcoats.
Men’s and boys’ furnishings, work clothing, and allied garments.
Men’s and boys’ shirts except work shirts.
Men’s and boys’ underwear and nightwear.
Men’s and boys’ neckwear.
Men’s and boys’ separate trousers and slacks.
Men’s and boys’ work clothing.
Men’s and boys’ clothing, not elsewhere classified.
Women’s, misses’, and juniors’ outerwear.
Women’s, misses’, and juniors’ blouses and shirts.
Women’s, misses’, and juniors dresses.
Women’s, misses, and juniors’ suits, skirts, and coats.
Women’s, misses’, and juniors’ outerwear, not elsewhere classified.
Women’s, misses’, children’s, and infants’ undergarments.
Women’s, misses’, children’s, and infants’ underwear and nightwear.
Brassieres, girdles, and allied garments.
Hats, caps, and millinery
Hats, caps, and millinery
Girls’, children’s, and infants’ outerwear.
Girls’, children’s, and infants’ dresses, blouses, and shirts.
Girls’, children’s, and infants’ outerwear, not elsewhere classified.
Miscellaneous apparel and accessories.
Waterproof outerwear.
Apparel belts.
Apparel and accessories, not elsewhere classified.
Miscellaneous fabricated textile products.
Curtains and draperies.
Housefurnishings, except curtains and draperies.
Textile bags.
Pleating, decorative and novelty stitching, and tucking for the trade.
Automotive trimmings, apparel findings, and related products.
Fabricated textile products, not elsewhere classified.
Lumber and wood products, except furniture.
Sawmills and planing mills.
Sawmills and planing mills, general.
Millwork, veneer, plywood, and structural wood members.
Millwork.
Wood kitchen cabinets.
Hardwood veneer and plywood.
Wood containers.
Wood pallets and skids.
Wood buildings and mobile homes.
Mobile homes.
Miscellaneous wood products.
Wood preserving.
Wood products, not elsewhere classified.
Furniture and fixtures.
Household furniture.
Wood household furniture, except upholstered.
Wood household furniture, upholstered.
Metal household furniture.
Mattresses, foundations, and convertible beds.
Wood television, radio, phonograph, and sewing machine cabinets.
Household furniture, not elsewhere classified.
Office furniture.
Wood office furniture.
Office furniture, except wood.
Public building and related furniture.
Public building and related furniture.
Partitions, shelving, lockers, and office and store fixtures.
Wood office and store fixtures, partitions, shelving, and lockers.
Office and store fixtures, partitions, shelving, and lockers, except wood.
Miscellaneous furniture and fixtures.
Drapery hardware and window blinds and shades.
Furniture and fixtures, not elsewhere classified.
Paper and allied products.
Pulp mills.
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Wage and Hour Division, Labor
Pt. 510, App. A
MANUFACTURING INDUSTRIES—Continued
Major
group
27 .............
28 .............
29 .............
Industry
group number
Industry
number
....................
262
....................
263
....................
265
....................
....................
....................
....................
267
....................
....................
....................
....................
....................
....................
....................
....................
....................
271
....................
273
....................
....................
274
....................
275
....................
....................
....................
276
....................
278
....................
279
....................
....................
281
....................
....................
282
2611
....................
2621
....................
2631
....................
2652
2653
2655
2657
....................
2671
2672
2673
2674
2676
2677
2678
2679
....................
....................
2711
....................
2731
2732
....................
2741
....................
2752
2754
2759
....................
2761
....................
2782
....................
2796
....................
....................
2813
2819
....................
1
2
2
a
a
1
1
1
1
1
1
2
a
2
1
1
1
3
a
1
1
1
a
a
3
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
....................
....................
283
....................
....................
....................
....................
284
2821
2822
....................
2833
2834
2835
2836
....................
a
2
1
1
1
1
1
1
....................
....................
....................
285
....................
286
....................
....................
287
....................
....................
289
....................
....................
....................
291
....................
295
2841
2842
2844
....................
2851
....................
2865
2869
....................
2873
2879
....................
2891
2899
....................
....................
2911
....................
1
1
1
1
1
1
1
a
1
1
1
1
1
1
1
1
1
1
Tier
Industry
Pulp mills.
Paper mills.
Paper mills.
Paperboard mills.
Paperboard mills.
Paperboard containers and boxes.
Setup paperboard boxes.
Corrugated and solid fiber boxes.
Fiber cans, tubes, drums, and similar products.
Folding paperboard boxes, including sanitary.
Converted paper and paperboard products, except containers and boxes.
Packaging paper and plastics film, coated and laminated.
Coated and laminated paper, not elsewhere classified.
Plastics, foil, and coated paper bags.
Uncoated paper and multiwall bags.
Sanitary paper products.
Envelopes.
Stationery, tablets, and related products.
Converted paper and paperboard products, not elsewhere classified.
Printing, publishing, and allied industries.
Newspapers: publishing, or publishing and printing.
Newspapers: publishing, or publishing and printing.
Books.
Books: publishing, or publishing and printing.
Book printing.
Miscellaneous publishing.
Miscellaneous publishing.
Commercial printing.
Commercial printing, lithographic.
Commercial printing, gravure.
Commercial printing, not elsewhere classified.
Manifold business forms.
Manifold business forms.
Blankbooks, looseleaf binders, and bookbinding and related work.
Blankbooks, looseleaf binders and devices.
Service industries for the printing trade.
Platemaking and related services.
Chemicals and allied products.
Industrial inorganic chemicals.
Industrial gases.
Industrial inorganic chemicals, not elsewhere classified.
Plastics materials and synthetic resins, synthetic rubber, cellulosic and other
manmade fibers, except glass.
Plastics materials, synthetic resins, and nonvulcanizable elastomers.
Synthetic rubber (vulcanizable elastomers).
Drugs.
Medicinal chemicals and botanical products.
Pharmaceutical preparations.
In vitro and in vivo diagnostic substances.
Biological products, except diagnostic substances.
Soap, detergents, and cleaning preparations; perfumes, cosmetics, and
other toilet preparations.
Soap and other detergents, except specialty cleaners.
Specialty cleaning, polishing, and sanitation preparations.
Perfumes, cosmetics, and other toilet preparations.
Paints, varnishes, lacquers, enamels, and allied products.
Paints, varnishes, lacquers, enamels, and allied products.
Industrial organic chemicals.
Cyclic organic crudes and intermediates, and organic dyes and pigments.
Industrial organic chemicals, not elsewhere classified.
Agricultural chemicals.
Nitrogenous fertilizers.
Pesticides and agricultural chemicals, not elsewhere classified.
Miscellaneous chemical products.
Adhesives and sealants.
Chemicals and chemical preparations, not elsewhere classified.
Petroleum refining and related industries.
Petroleum refining.
Petroleum refining.
Asphalt paving and roofing materials.
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Pt. 510, App. A
29 CFR Ch. V (7–1–19 Edition)
MANUFACTURING INDUSTRIES—Continued
Major
group
30 .............
31 .............
32 .............
33 .............
Industry
group number
Industry
number
....................
....................
299
....................
....................
302
....................
305
2951
2952
....................
2992
....................
....................
3021
....................
1
1
a
a
1
1
1
2
....................
306
....................
308
....................
....................
....................
....................
....................
....................
....................
....................
....................
....................
313
....................
314
....................
....................
....................
....................
315
....................
316
....................
317
....................
....................
....................
321
....................
322
....................
323
....................
324
....................
326
....................
3052
....................
3069
....................
3081
3082
3083
3084
3085
3086
3087
3088
3089
....................
....................
3131
....................
3142
3143
3144
3149
....................
3151
....................
3161
....................
3171
3172
....................
....................
3211
....................
3221
....................
3231
....................
3241
....................
3261
2
2
2
1
a
3
1
a
1
2
3
1
1
2
2
2
2
b
2
1
2
3
3
3
3
2
3
1
1
2
2
1
1
1
1
1
1
3
3
....................
327
....................
....................
....................
....................
....................
328
....................
329
....................
....................
....................
331
....................
....................
334
....................
335
....................
....................
3269
....................
3271
3272
3273
3274
3275
....................
3281
....................
3295
3296
....................
....................
3312
3317
....................
3341
....................
3351
3353
3
1
2
1
1
1
a
1
1
1
a
1
1
1
1
1
1
1
1
1
a
Tier
Industry
Asphalt paving mixtures and blocks.
Asphalt felts and coatings.
Miscellaneous products of petroleum and coal.
Lubricating oils and greases.
Rubber and miscellaneous plastics products.
Rubber and plastics footwear.
Rubber and plastics footwear.
Gaskets, packing, and sealing devices and rubber and plastics hose and
belting.
Rubber and plastics hose and belting.
Fabricated rubber products, not elsewhere classified.
Fabricated rubber products, not elsewhere classified.
Miscellaneous plastics products.
Unsupported plastics film and sheet.
Unsupported plastics profile shapes.
Laminated plastics plate, sheet, and profile shapes.
Plastics pipe.
Plastics bottles.
Plastics foam products.
Custom compounding of purchased plastics resin.
Plastics plumbing fixtures.
Plastics products, not elsewhere classified.
Leather and leather products.
Boot and shoe cut stock and findings.
Boot and shoe cut stock and findings.
Footwear, except rubber.
House slippers.
Men’s footwear, except athletic.
Women’s footwear, except athletic.
Footwear, except rubber, not elsewhere classified.
Leather gloves and mittens.
Leather gloves and mittens.
Luggage.
Luggage.
Handbags and other personal leather goods.
Women’s handbags and purses.
Personal leather goods, except women’s handbags and purses.
Stone, clay, glass, and concrete products.
Flat glass.
Flat glass.
Glass and glassware, pressed or blown.
Glass containers.
Glass products, made of purchased glass.
Glass products, made of purchased glass.
Cement, hydraulic.
Cement, hydraulic.
Pottery and related products.
Vitreous china plumbing fixtures and china and earthenware fittings and
bathroom accessories.
Pottery products, not elsewhere classified.
Concrete, gypsum, and plaster products.
Concrete block and brick.
Concrete products, except block and brick.
Ready-mixed concrete.
Lime.
Gypsum products.
Cut stone and stone products.
Cut stone and stone products.
Abrasive, asbestos, and miscellaneous nonmetallic mineral products.
Minerals and earths, ground or otherwise treated.
Mineral wool.
Primary metal industries.
Steel works, blast furnaces, and rolling and finishing mills.
Steel works, blast furnaces (including coke ovens), and rolling mills.
Steel pipe and tubes.
Secondary smelting and refining of nonferrous metals.
Secondary smelting and refining of nonferrous metals.
Rolling, drawing, and extruding of nonferrous metals.
Rolling, drawing, and extruding of copper.
Aluminum sheet, plate, and foil.
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Wage and Hour Division, Labor
Pt. 510, App. A
MANUFACTURING INDUSTRIES—Continued
Major
group
34 .............
35 .............
36 .............
Industry
group number
Industry
number
....................
336
....................
339
....................
....................
....................
341
....................
....................
342
....................
....................
....................
343
....................
344
....................
....................
....................
....................
....................
....................
345
....................
346
....................
347
....................
349
....................
....................
....................
....................
....................
....................
353
....................
354
....................
....................
....................
3354
....................
3365
....................
3398
3399
....................
....................
3411
3412
....................
3421
3423
3429
....................
3433
....................
3441
3442
3443
3444
3446
3449
....................
3452
....................
3469
....................
3471
....................
3494
3495
3496
3498
3499
....................
....................
3535
....................
3541
3544
3545
1
a
a
1
a
1
1
1
1
1
1
3
a
a
2
2
2
1
2
1
2
3
2
1
1
1
1
2
2
2
1
2
1
a
2
1
a
a
1
a
1
1
355
....................
356
....................
....................
....................
....................
....................
357
....................
....................
....................
....................
358
....................
....................
3555
....................
3562
3563
3564
3568
3569
....................
3571
3572
3577
3579
....................
3585
1
1
1
a
1
a
1
1
1
3
1
1
1
1
1
....................
359
....................
....................
....................
3589
....................
3592
3596
3599
b
2
2
a
1
Tier
Industry
....................
....................
1
361
....................
....................
....................
3612
3613
1
1
1
Aluminum extruded products.
Nonferrous foundries (castings).
Aluminum foundries.
Miscellaneous primary metal products.
Metal heat treating.
Primary metal products, not elsewhere classified.
Fabricated metal products, except machinery and transportation equipment.
Metal cans and shipping containers.
Metal cans.
Metal shipping barrels, drums, kegs, and pails.
Cutlery, handtools, and general hardware.
Cutlery.
Hand and edge tools, except machine tools and handsaws.
Hardware, not elsewhere classified.
Heating equipment, except electric and warm air; and plumbing fixtures.
Heating equipment, except electric and warm air furnaces.
Fabricated structural metal products.
Fabricated structural metal.
Metal doors, sash, frames, molding, and trim.
Fabricated plate work (boiler shops).
Sheet metal work.
Architectural and ornamental metal work.
Miscellaneous structural metal work.
Screw machine products, and bolts, nuts, screws, rivets, and washers.
Bolts, nuts, screws, rivets, and washers.
Metal forgings and stampings.
Metal stampings, not elsewhere classified.
Coating, engraving, and allied services.
Electroplating, plating, polishing, anodizing and coloring.
Miscellaneous fabricated metal products.
Valves and pipe fittings, not elsewhere classified.
Wire springs.
Miscellaneous fabricated wire products.
Fabricated pipe and pipe fittings.
Fabricated metal products, not elsewhere classified.
Industrial and commercial machinery and computer equipment.
Construction, mining, and materials handling machinery and equipment.
Conveyors and conveying equipment.
Metalworking machinery and equipment.
Machine tools, metal cutting types.
Special dies and tools, die sets, jigs and fixtures, and industrial molds.
Cutting tools, machine tool accessories, and machinists’ precision measuring devices.
Special industry machinery, except metalworking machinery.
Printing trades machinery and equipment.
General industrial machinery and equipment.
Ball and roller bearings.
Air and gas compressors.
Industrial and commercial fans and blowers and air purification equipment.
Mechanical power transmission equipment, not elsewhere classified.
General industrial machinery and equipment, not elsewhere classified.
Computer and office equipment.
Electronic computers.
Computer storage devices.
Computer peripheral equipment, not elsewhere classified.
Office machines, not elsewhere classified.
Refrigeration and service industry machinery.
Air-conditioning and warm air heating equipment and commercial and industrial refrigeration equipment.
Service industry machinery, not elsewhere classified.
Miscellaneous industrial and commercial machinery and equipment.
Carburetors, pistons, piston rings, and valves.
Scales and balances, except laboratory.
Industrial and commercial machinery and equipment, not elsewhere classified.
Electronic and other electrical equipment and components, except computer
equipment.
Electronic transmission and distribution equipment.
Power, distribution, and specialty transformers.
Switchgear and switchboard apparatus.
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29 CFR Ch. V (7–1–19 Edition)
MANUFACTURING INDUSTRIES—Continued
Major
group
37
.........
38 .............
Industry
group number
Industry
number
362
....................
....................
....................
....................
363
....................
364
....................
....................
....................
....................
....................
....................
365
....................
....................
366
....................
....................
....................
367
....................
....................
....................
....................
....................
369
....................
....................
....................
371
....................
....................
372
....................
....................
373
....................
....................
379
....................
....................
....................
3621
3624
3625
3629
....................
3639
....................
3641
3643
3644
3645
3646
3648
....................
3651
3652
....................
3661
3663
3669
....................
3672
3674
3677
3678
3679
....................
3692
3694
....................
....................
3713
3714
....................
3721
3728
....................
3731
3732
....................
3792
....................
1
1
1
1
1
a
a
1
1
1
1
a
2
2
1
1
a
1
1
1
1
1
2
1
2
1
1
1
1
1
1
1
1
1
1
a
1
1
a
2
a
a
1
381
....................
1
....................
3812
1
382
....................
1
....................
....................
3821
3822
1
1
....................
3823
1
....................
....................
....................
384
....................
....................
....................
....................
....................
385
....................
386
....................
387
....................
3824
3825
3829
....................
3841
3842
3843
3844
3845
....................
3851
....................
3861
....................
3873
a
1
2
1
1
1
1
a
1
1
1
a
a
1
1
Tier
Industry
Electrical industrial apparatus.
Motors and generators.
Carbon and graphite products.
Relays and industrial controls.
Electrical industrial apparatus, not elsewhere classified.
Household appliances.
Household appliances, not elsewhere classified.
Electric lighting and wiring equipment.
Electric lamp bulbs and tubes.
Current-carrying wiring devices.
Noncurrent-carrying wiring devices.
Residential electric lighting fixtures.
Commercial, industrial, and institutional electric lighting fixtures.
Lighting equipment, not elsewhere classified.
Household audio and video equipment, and audio recordings.
Household audio and video equipment.
Phonograph records and pre-recorded audio tapes and disks.
Communications equipment.
Telephone and telegraph apparatus.
Radio and television broadcasting and communications equipment.
Communications equipment, not elsewhere classified.
Electronic components and accessories.
Printed circuit boards.
Semiconductors and related devices.
Electronic coils, transformers and other inductors.
Electronic connectors.
Electronic components, not elsewhere classified.
Miscellaneous electrical machinery, equipment, and supplies.
Primary batteries, dry and wet.
Electrical equipment for internal combustion engines.
Transportation Equipment.
Motor vehicles and motor vehicle equipment.
Truck and bus bodies.
Motor vehicle parts and accessories.
Aircraft and parts.
Aircraft.
Aircraft parts and auxiliary equipment, not elsewhere classified.
Ship and boat building and repairing.
Ship building and repairing.
Boat building and repairing.
Miscellaneous transportation equipment.
Travel trailers and campers.
Measuring, analyzing, and controlling instruments; photographic, medical,
and optical goods, watches and clocks.
Search, detection, navigation, guidance, aeronautical, and nautical systems,
instruments, and equipment.
Search, detection, navigation, guidance, aeronautical, and nautical systems,
instruments, and equipment.
Laboratory apparatus and analytical, optical, measuring, and controlling instrument.
Laboratory apparatus and furniture.
Automatic controls for regulating residential and commercial environments
and appliances.
Industrial instruments for measurement, display, and control of process variables; and related products.
Totalizing fluid meters and counting devices.
Instruments for measuring and testing of electricity and electrical signals.
Measuring and controlling devices, not elsewhere classified.
Surgical, medical, and dental instruments and supplies.
Surgical and medical instruments and apparatus.
Orthopedic, prosthetic, and surgical appliances and supplies.
Dental equipment and supplies.
X-ray apparatus and tubes and related irradiation apparatus.
Electromedical and electrotherapeutic apparatus.
Ophthalmic goods.
Ophthalmic goods.
Photographic equipment and supplies.
Photographic equipment and supplies.
Watches, clocks, clockwork operated devices, and parts.
Watches, clocks, clockwork operated devices, and parts.
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Wage and Hour Division, Labor
Pt. 510, App. B
MANUFACTURING INDUSTRIES—Continued
Major
group
Industry
group number
Industry
number
39 .............
....................
391
....................
....................
....................
394
....................
....................
395
....................
....................
....................
396
....................
....................
3911
3914
3915
....................
3942
3949
....................
3951
3952
3953
....................
1
1
1
a
1
2
2
2
2
3
a
1
1
....................
....................
399
....................
....................
....................
....................
3961
3965
....................
3991
3993
3995
3999
1
a
1
a
2
2
2
Tier
Industry
Miscellaneous manufacturing industries.
Jewelry, silverware, and plated ware.
Jewelry, precious metal.
Silverware, plated ware, and stainless steel ware.
Jewelers’ findings and materials, and lapidary work.
Dolls, toys, games, and sporting and athletic goods.
Dolls and stuffed toys.
Sporting and athletic goods, not elsewhere classified.
Pens, pencils, and other artists’ materials.
Pens, mechanical pencils, and parts.
Lead pencils, crayons, and artists’ materials.
Marking devices.
Costume jewelry, costume novelties, buttons, and miscellaneous notions,
except precious metal.
Costume jewelry and costume novelties, except precious metal.
Fasteners, buttons, needles, and pins.
Miscellaneous manufacturing industries.
Brooms and brushes.
Signs and advertising specialties.
Burial caskets.
Manufacturing industries, not elsewhere classified.
a = Category contained less than three employers.
[55 FR 12120, Mar. 30, 1990; 55 FR 12778, Apr. 5, 1990, as amended at 55 FR 39575, Sept. 27, 1990;
57 FR 1103, Jan. 10, 1992]
APPENDIX B TO PART 510—NONMANUFACTURING INDUSTRIES ELIGIBLE FOR
MINIMUM WAGE PHASE-IN
This appendix contains a listing of all nonmanufacturing industries (except those in
major groups 01, 02, 08, and 09, pertaining to
agriculture) for which data were collected
and compiled by the Commonwealth of Puerto Rico for purposes of implementing the
1989 Amendments to FLSA. This listing follows the order and classifications used in the
SIC Manual, 1987, which is incorporated by
reference in these regulations (§ 510.21).
The data in this appendix are presented by
major industry group (two-digit classification), industry group number (three-digit
classification), and industry number (fourdigit classification).
Tiers will not be listed for industry categories in which there were fewer than three
responding employers, or one responding employer had more than 80 percent of the employment in the category, in conformance
with practices of the U.S. Bureau of Labor
Statistics in collecting and publishing similar data, until such time as Puerto Rico receives appropriate waivers of confidentiality
from all employers in such categories. These
categories are noted with an ‘‘a’’ on the following table. In situations where one or
more employers declined to furnish a waiver,
categories are noted with a ‘‘b’’ on the following table.
In addition, no tier will be listed where an
industry was not included in the original
survey because it was not in existence, because the industry was too small to be included, or for other reasons.
Employers who do not find the four-digit
classification for their industry shall refer to
the appropriate three-digit classification
under which their establishment falls. If the
appropriate three-digit classification is not
listed, employers shall refer to the appropriate two-digit classification.
For example, no tier is listed for industry
number 1423, crushed and broken granite.
However, a tier is listed for industry group
142, crushed and broken stone, including
riprap. Thus, an employer in industry 1423
must use the tier listed for industry group
142, i.e., Tier 1. Furthermore, employers who
find the appropriate four-digit designation in
this appendix must use that designation and
cannot refer to a two- or three-digit classification. For example, an employer with industry
number
5719,
miscellaneous
homefurnishings stores, which has a Tier 1
designation, cannot refer to industry group
number 571, home furniture and furnishings
stores, which has a Tier 2 designation.
Important: In referring to this appendix to
determine appropriate tier designations,
please note that certain categories of employees are subject to treatment under Tier
1 regardless of the average hourly wage rate
for the industry and the tier designation
contained herein. These employees, as listed
in the 1989 Amendments, are those employed
by:
(a) The United States,
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29 CFR Ch. V (7–1–19 Edition)
(b) An establishment that is a hotel, motel,
or restaurant, or
(c) Any other retail or service establishment that employs such employee in connection with the preparation or offering of food
or beverages for human consumption, either
on the premises, or by such services as catering, banquet, box lunch, or curb or counter
service, to the public, to employees, or to
members or guests of clubs.
Please note that these named categories
may not correspond exactly to categories established by the SIC manual.
If no four-digit, three-digit, or two-digit
classification is listed for an industry, employers in that group must pay the Tier 1
rates.
NONMANUFACTURING INDUSTRIES
Major
group
Industry
group number
Industry
number
01 .............
....................
011
....................
013
....................
....................
016
....................
017
....................
....................
018
....................
019
....................
....................
021
....................
....................
024
....................
025
....................
....................
....................
027
....................
....................
....................
....................
....................
072
....................
074
075
....................
078
....................
....................
....................
144
....................
....................
152
154
....................
161
....................
162
....................
....................
....................
....................
171
....................
172
....................
173
....................
....................
....................
0119
....................
0133
0139
....................
0161
....................
0174
0179
....................
0181
....................
0191
....................
....................
0211
0213
....................
0241
....................
0251
0252
0254
....................
0271
0272
0273
0279
....................
....................
0723
....................
....................
0751
....................
....................
1422
1429
....................
1442
....................
....................
....................
....................
....................
1611
....................
1622
1623
1629
....................
....................
1711
....................
1721
....................
1731
02 .............
07 .............
14 .............
15 .............
16 .............
17 .............
Tier
Industry
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
2
3
3
2
3
3
3
3
3
2
a
a
3
1
2
1
1
1
1
1
1
1
1
1
1
1
1
a
1
1
1
2
2
1
1
Agricultural production—crops.
Cash grains.
Cash grains, not elsewhere classified.
Field crops, except cash grains.
Sugarcane and sugar beets.
Field crops, except cash grains, not elsewhere classified.
Vegetables and melons.
Vegetables and melons.
Fruits and tree nuts.
Citrus fruits.
Fruits and tree nuts, not elsewhere classified.
Horticultural specialties.
Ornamental floriculture and nursery products.
General farms, primarily crop.
General farms, primarily crop.
Agricultural production—livestock and animal specialties.
Livestock, except dairy and poultry.
Beef cattle feedlots.
Hogs.
Dairy farms.
Dairy farms.
Poultry and eggs.
Broiler, fryer, and roaster chickens.
Chicken eggs.
Poultry hatcheries.
Animal specialties.
Fur-bearing animals and rabbits.
Horse and other equines.
Animal aquaculture.
Animal specialties, not else where classified.
Agricultural services.
Crop services.
Crop preparation services for market, except cotton ginning.
Veterinary services.
Animal services except veterinary.
Livestock services, except veterinary.
Landscape and horticultural services.
Mining and quarrying of nonmetallic minerals, except fuels.
Crushed and broken limestone.
Crushed and broken stone, not elsewhere classified.
Sand and gravel.
Construction sand and gravel.
Building construction-general contractors and operative builders.
General building contractors-residential buildings.
General building contractors-nonresidential buildings.
Heavy construction other than building construction-contractors.
Highway and street construction, except elevated highways.
Highway and street construction, except elevated highways.
Heavy construction, except highway and street construction.
Bridge, tunnel, and elevated highway construction.
Water, sewer, pipeline, and communications and power line construction.
Heavy construction, not elsewhere classified.
Construction-special trade contractors.
Plumbing, heating and air-conditioning.
Plumbing, heating and air-conditioning.
Painting and paper hanging.
Painting and paper hanging.
Electrical work.
Electrical work.
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Wage and Hour Division, Labor
Pt. 510, App. B
NONMANUFACTURING INDUSTRIES—Continued
Major
group
Industry
group number
Industry
number
41 .............
174
....................
....................
....................
175
....................
176
....................
179
....................
....................
....................
....................
....................
....................
....................
....................
1741
1742
1743
....................
1751
....................
1761
....................
1791
1793
1794
1795
1796
1799
....................
1
1
1
1
a
a
2
2
1
1
2
a
a
1
1
3
411
....................
412
....................
413
....................
415
....................
....................
421
422
....................
....................
....................
....................
....................
442
....................
444
....................
449
....................
....................
....................
....................
451
....................
452
....................
458
....................
....................
461
....................
....................
472
....................
473
....................
478
....................
....................
4111
....................
4121
....................
4131
....................
4151
....................
....................
....................
4221
4222
4225
4226
....................
....................
4424
....................
4449
....................
4491
4492
4499
....................
....................
4512
....................
4522
....................
4581
....................
....................
4613
....................
....................
4729
....................
4731
....................
4785
2
2
3
3
3
3
a
a
1
1
1
1
a
1
1
1
a
a
1
1
1
1
a
1
1
1
1
a
a
a
a
a
1
1
1
1
1
1
1
1
1
....................
482
....................
483
....................
....................
489
....................
....................
492
....................
....................
....................
4822
....................
4832
4833
....................
4899
....................
....................
4923
1
b
b
1
1
1
3
3
1
1
1
42 .............
44 .............
45 .............
46 .............
47 .............
48 .............
49 .............
Tier
Industry
Masonry, stonework, tile setting, and plastering.
Masonry, stone setting, and other stone work.
Plastering, drywall, acoustical, and insulation work.
Terrazzo, tile, marble, and mosaic work.
Carpentry and floor work.
Carpentry work.
Roofing, siding, and sheet metal work.
Roofing, siding, and sheet metal work.
Miscellaneous special trade contractors.
Structural steel erection.
Glass and glazing work.
Excavation work.
Wrecking and demolition work.
Installation or erection of building equipment, not elsewhere classified.
Special trade contractors, not elsewhere classified.
Local and suburban transit and interurban highway passenger transportation.
Local and suburban passenger transportation.
Local and suburban transit.
Taxicabs.
Taxicabs.
Intercity and rural bus transportation.
Intercity and rural bus transportation.
School buses.
School buses.
Motor freight transportation and warehousing.
Trucking and courier services, except air.
Public warehousing and storage.
Farm product warehousing and storage.
Refrigerated warehousing and storage.
General warehousing and storage.
Special warehousing and storage, not elsewhere classified.
Water transportation.
Deep sea domestic transportation of freight.
Deep sea domestic transportation of freight.
Water transportation of freight, not elsewhere classified.
Water transportation of freight, not elsewhere classified.
Services incidental to water transportation.
Marine cargo handling.
Towing and tugboat services.
Water transportation services, not elsewhere classified.
Transportation by air.
Air transportation, scheduled, and air courier services.
Air transportation, scheduled.
Air transportation, nonscheduled.
Air transportation, nonscheduled.
Airports, flying fields, and airport terminal services.
Airports, flying fields, and airport terminal services.
Pipelines, except natural gas.
Pipelines, except natural gas.
Refined petroleum pipelines.
Transportation services.
Arrangement of passenger transportation.
Arrangement of passenger transportation, not elsewhere classified.
Arrangement of transportation of freight and cargo.
Arrangement of transportation of freight and cargo.
Miscellaneous services incidental to transportation.
Fixed facilities and inspection and weighing services for motor vehicle transportation.
Communications.
Telegraph and other message communications.
Telegraph and other message communications.
Radio and television broadcasting stations.
Radio broadcasting stations.
Television broadcasting stations.
Communications services, not elsewhere classified.
Communications services, not elsewhere classified.
Electric, gas and sanitary services.
Gas production and distribution.
Natural gas transmission and distribution.
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Pt. 510, App. B
29 CFR Ch. V (7–1–19 Edition)
NONMANUFACTURING INDUSTRIES—Continued
Industry
group number
Major
group
50 .............
51 .............
Industry
number
Tier
Industry
....................
4925
1
495
....................
497
....................
....................
501
....................
....................
....................
502
....................
....................
503
....................
....................
504
....................
....................
....................
505
....................
506
....................
....................
4953
....................
4971
....................
....................
5012
5013
5014
....................
5021
5023
....................
5031
5039
....................
5043
5046
5049
....................
5051
....................
5063
1
1
a
a
1
1
a
1
1
1
2
1
2
2
1
1
1
1
1
1
1
1
1
....................
....................
507
....................
....................
....................
....................
508
....................
....................
....................
....................
....................
509
....................
....................
....................
....................
....................
....................
511
....................
....................
....................
512
....................
513
....................
....................
....................
....................
514
....................
....................
....................
....................
....................
....................
....................
....................
....................
515
....................
516
5064
5065
....................
5072
5074
5075
5078
....................
5082
5083
5084
5085
5087
....................
5091
5092
5093
5094
5099
....................
....................
5111
5112
5113
....................
5122
....................
5131
5136
5137
5139
....................
5141
5142
5143
5144
5145
5146
5147
5148
5149
....................
5154
....................
1
1
1
1
1
a
a
1
1
a
1
1
2
1
a
1
1
1
1
1
1
1
3
1
1
1
2
2
1
3
2
1
1
1
a
3
a
a
a
1
1
a
a
1
Mixed, manufactured, or liquefied petroleum gas production and/or distribution.
Sanitary services.
Refuse systems.
Irrigation systems.
Irrigation systems.
Wholesale trade-durable goods.
Motor vehicles and motor vehicle parts and supplies.
Automobiles and other motor vehicles.
Motor vehicle supplies and new parts.
Tires and tubes.
Furniture and homefurnishings.
Furniture.
Homefurnishings.
Lumber and other construction materials.
Lumber, plywood, millwork, and wood panels.
Construction materials, not elsewhere classified.
Professional and commercial equipment and supplies.
Photographic equipment and supplies.
Commercial equipment, not elsewhere classified.
Professional equipment and supplies, not elsewhere classified.
Metals and minerals, except petroleum.
Metals service centers and offices.
Electrical goods.
Electrical apparatus and equipment, wiring supplies and construction materials.
Electrical appliances, television and radio sets.
Electronic parts and equipment, not elsewhere classified.
Hardware, and plumbing and heating equipment and supplies.
Hardware.
Plumbing and heating equipment and supplies (hydronics).
Warm air heating and air-conditioning equipment and supplies.
Refrigeration equipment and supplies.
Machinery, equipment, and supplies.
Construction and mining (except petroleum) machinery and equipment.
Farm and garden machinery and equipment.
Industrial machinery and equipment.
Industrial supplies.
Service establishment equipment and supplies.
Miscellaneous durable goods.
Sporting and recreational goods and supplies.
Toys and hobby goods and supplies.
Scrap and waste materials.
Jewelry, watches, precious stones, and precious metals.
Durable goods, not elsewhere classified.
Wholesale trade—nondurable goods.
Paper and paper products.
Printing and writing paper.
Stationery and office supplies.
Industrial and personal service paper.
Drugs, drug proprietaries, and druggists’ sundries.
Drugs, drug proprietaries, and druggists’ sundries.
Apparel, piece goods, and notions.
Piece goods, notions, and other dry goods.
Men’s and boys’ clothing and furnishings.
Women’s, children’s, and infants’ clothing and accessories.
Footwear.
Groceries and related products.
Groceries, general line.
Packaged frozen foods.
Dairy products, except dried or canned.
Poultry and poultry products.
Confectionery.
Fish and seafoods.
Meats and meat products.
Fresh fruits and vegetables.
Groceries and related products, not elsewhere classified.
Farm-product raw materials.
Livestock.
Chemicals and allied products.
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Wage and Hour Division, Labor
Pt. 510, App. B
NONMANUFACTURING INDUSTRIES—Continued
Major
group
52 .............
53 .............
54 .............
55 .............
56 .............
57 .............
Industry
group number
Industry
number
....................
517
....................
....................
5169
....................
5171
5172
1
1
1
1
518
....................
519
....................
....................
....................
....................
....................
521
....................
523
....................
525
....................
526
....................
....................
531
....................
533
....................
539
....................
....................
541
....................
542
....................
....................
543
....................
546
....................
549
....................
....................
551
....................
552
....................
553
....................
554
....................
....................
561
....................
562
....................
563
....................
564
....................
565
....................
566
....................
569
....................
....................
571
....................
....................
....................
....................
....................
5181
....................
5191
5194
5198
5199
....................
....................
5211
....................
5231
....................
5251
....................
5261
....................
....................
5311
....................
5331
....................
5399
....................
....................
5411
....................
5421
5421
....................
5431
....................
5461
....................
5499
....................
....................
5511
....................
5521
....................
5531
....................
5541
....................
....................
5611
....................
5621
....................
5632
....................
5641
....................
5651
....................
5661
....................
5699
....................
....................
5712
5713
5714
5719
1
1
1
3
3
b
1
2
3
3
1
1
2
2
3
3
1
1
1
2
2
3
3
2
2
2
1
1
a
3
3
3
3
3
3
1
1
1
2
2
1
1
3
3
3
3
3
3
3
3
3
3
3
3
3
2
2
3
3
2
2
2
a
3
1
Tier
Industry
Chemicals and allied products, not elsewhere classified.
Petroleum and petroleum products.
Petroleum bulk stations and terminals.
Petroleum and petroleum products wholesalers, except bulk stations and
terminals.
Beer, wine and distilled alcoholic beverages.
Beer and ale.
Miscellaneous nondurable goods.
Farm supplies.
Tobacco and tobacco products.
Paints, varnishes, and supplies.
Nondurable goods, not elsewhere classified.
Building materials, hardware, garden supply, and mobile home dealers.
Lumber and other building materials dealers.
Lumber and other building materials dealers.
Paint, glass, and wallpaper stores.
Paint, glass, and wallpaper stores.
Hardware stores.
Hardware stores.
Retail nurseries, lawn and garden supply stores.
Retail nurseries, lawn and garden supply stores.
General merchandise stores.
Department stores.
Department stores.
Variety stores.
Variety stores.
Miscellaneous general merchandise stores.
Miscellaneous general merchandise stores.
Food stores.
Grocery stores.
Grocery stores.
Meat and fish (seafood) markets, including freezer provisioners.
Meat and fish (seafood) markets, including freezer provisioners.
Meat and fish (seafood) markets, including freezer provisioners.
Fruit and vegetable markets.
Fruit and vegetable markets.
Retail bakeries.
Retail bakeries.
Miscellaneous food stores.
Miscellaneous food stores.
Automotive dealers and gasoline service stations.
Motor vehicle dealers (new and used).
Motor vehicle dealers (new and used).
Motor vehicle dealers (used only).
Motor vehicle dealers (used only).
Auto and home supply stores.
Auto and home supply stores.
Gasoline service stations.
Gasoline service stations.
Apparel and accessory stores.
Men’s and boys’ clothing and accessory stores.
Men’s and boys’ clothing and accessory stores.
Women’s clothing stores.
Women’s clothing stores.
Women’s accessory and specialty stores.
Women’s accessory and specialty stores.
Children’s and infants’ wear stores.
Children’s and infants’ wear stores.
Family clothing stores.
Family clothing stores.
Shoe stores.
Shoe stores.
Miscellaneous apparel and accessory stores.
Miscellaneous apparel and accessory stores.
Home furniture, furnishings, and equipment stores.
Home furniture and furnishings stores.
Furniture stores.
Floor covering stores.
Drapery, curtain, and upholstery stores.
Miscellaneous homefurnishings stores.
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Pt. 510, App. B
29 CFR Ch. V (7–1–19 Edition)
NONMANUFACTURING INDUSTRIES—Continued
Major
group
58 .............
59 .............
60 .............
61 .............
62 .............
63 .............
Industry
group number
Industry
number
572
....................
573
....................
....................
....................
1 581
....................
591
....................
592
....................
593
....................
594
....................
....................
....................
....................
....................
....................
....................
....................
596
....................
....................
598
....................
599
....................
....................
....................
602
....................
....................
....................
603
....................
....................
606
....................
....................
609
....................
....................
614
....................
615
....................
5722
....................
5731
5735
....................
....................
....................
....................
5912
....................
5921
....................
5932
....................
5941
5942
5943
5944
5945
5946
5947
5949
....................
5962
5963
....................
5984
....................
5992
5999
....................
....................
6021
6022
6029
....................
6035
6036
....................
6061
6062
....................
6099
....................
....................
6141
....................
6153
6159
....................
6162
....................
....................
6211
....................
6221
....................
....................
6311
....................
6321
6324
....................
6331
....................
6351
....................
6361
....................
....................
616
....................
....................
621
....................
622
....................
....................
631
....................
632
....................
....................
633
....................
635
....................
636
....................
637
Tier
Industry
1
1
2
a
1
1
1
1
1
1
a
a
3
3
1
1
1
2
1
3
2
3
3
a
a
a
2
2
1
3
1
1
1
1
1
1
1
1
1
1
1
1
2
2
1
1
1
1
b
1
1
1
1
1
1
a
a
1
1
1
1
1
b
1
1
1
1
b
b
1
Household appliance stores.
Household appliance stores.
Radio, television, consumer electronics, and music stores.
Radio, television, and consumer electronics stores.
Record and prerecorded tape stores.
Eating and drinking places.
Eating and drinking places.
Miscellaneous retail.
Drug stores and proprietary stores.
Drug stores and proprietary stores.
Liquor stores.
Liquor stores.
Used merchandise stores.
Used merchandise stores.
Miscellaneous shopping goods stores.
Sporting goods stores and bicycle shops.
Book stores.
Stationery stores.
Jewelry stores.
Hobby, toy, and game shops.
Camera and photographic supply stores.
Gift, novelty, and souvenir shops.
Sewing, needlework, and piece goods stores.
Nonstore retailers.
Automatic merchandising machine operators.
Direct selling establishments.
Fuel dealers.
Liquefied petroleum gas (bottled gas) dealers.
Retail stores, not elsewhere classified.
Florists.
Miscellaneous retail stores, not elsewhere classified.
Depository institutions.
Commercial banks.
National commercial banks.
State commercial banks.
Commercial banks, not elsewhere classified.
Savings institutions.
Savings institutions, Federally chartered.
Savings institutions, not Federally chartered.
Credit unions.
Credit unions, Federally chartered.
Credit unions, not Federally chartered.
Functions related to depository banking.
Functions related to depository banking, not elsewhere classified.
Nondepository credit institutions.
Personal credit institutions.
Personal credit institutions.
Business credit institutions.
Short-term business credit institutions, except agricultural.
Miscellaneous business credit institutions.
Mortgage bankers and brokers.
Mortgage bankers and loan correspondents.
Security and commodity brokers, dealers, exchanges, and services.
Security brokers, dealers, and flotation companies.
Security brokers, dealers, and flotation companies.
Commodity contracts brokers and dealers.
Commodity contracts brokers and dealers.
Insurance carriers.
Life insurance.
Life insurance.
Accidental and health insurance and medical service plans.
Accident and health insurance.
Hospital and medical service plans.
Fire, marine, and casualty insurance.
Fire, marine, and casualty insurance.
Surety insurance.
Surety insurance.
Title insurance.
Title insurance.
Pension, health, and welfare funds.
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Wage and Hour Division, Labor
Pt. 510, App. B
NONMANUFACTURING INDUSTRIES—Continued
Major
group
64 .............
65 .............
70 .............
72 .............
73 .............
75 .............
Industry
group number
Industry
number
....................
....................
641
....................
....................
651
653
....................
655
....................
....................
....................
701
....................
702
....................
....................
721
722
....................
723
....................
724
....................
725
....................
726
....................
729
....................
....................
731
....................
....................
....................
732
6371
....................
....................
6411
....................
....................
....................
6531
....................
6552
6553
....................
....................
7011
....................
7021
....................
....................
....................
7221
....................
7231
....................
7241
....................
7251
....................
7261
....................
7299
....................
....................
7311
7312
7319
....................
1
1
1
1
1
1
1
1
1
1
a
1
1
1
1
1
1
2
3
3
1
1
1
1
2
2
1
1
1
1
2
1
1
1
a
b
....................
733
7323
....................
b
2
....................
734
....................
....................
735
....................
736
....................
....................
737
7338
....................
7342
7349
....................
7359
....................
7361
7363
....................
2
3
3
3
1
1
2
2
2
1
....................
....................
....................
738
....................
....................
....................
....................
751
....................
....................
752
....................
753
....................
....................
....................
....................
754
7372
7374
7379
....................
7382
7384
7389
....................
....................
7513
7514
....................
7521
....................
7532
7534
7538
7539
....................
1
1
1
3
3
1
1
1
1
3
1
3
3
1
2
1
3
2
3
Tier
Industry
Pension, health, and welfare funds.
Insurance agents, brokers, and service.
Insurance agents, brokers, and service.
Insurance agents, brokers, and service.
Real estate.
Real estate operators (except developers) and lessors.
Real estate agents and managers.
Real estate agents and managers.
Land subdividers and developers.
Land subdividers and developers, except cemeteries.
Cemetery subdividers and developers.
Hotels, rooming houses, camps, and other lodging places.
Hotels and motels.
Hotels and motels.
Rooming and boarding houses.
Rooming and boarding houses.
Personal services.
Laundry, cleaning, and garment services.
Photographic studios, portrait.
Photographic studios, portrait.
Beauty shops.
Beauty shops.
Barber shops
Barber shops.
Shoe repair shops and shoeshine parlors.
Shoe repair shops and shoeshine parlors.
Funeral service and crematories.
Funeral service and crematories.
Miscellaneous personal services.
Miscellaneous personal services, not elsewhere classified.
Business services.
Advertising.
Advertising agencies.
Outdoor advertising services.
Advertising, not elsewhere classified.
Consumer credit reporting agencies, mercantile reporting agencies, and adjustment and collection agencies.
Credit reporting services.
Mailing, reproduction, commercial art and photography, and stenographic
services.
Secretarial and court reporting services.
Services to dwellings and other buildings.
Disinfecting and pest control services.
Building cleaning and maintenance services, not elsewhere classified.
Miscellaneous equipment rental and leasing.
Equipment rental and leasing, not elsewhere classified.
Personnel supply services.
Employment agencies.
Help supply services.
Computer programming, data processing, and other computer related services.
Prepackaged software.
Computer processing and data preparation and processing services.
Computer related services, not elsewhere classified.
Miscellaneous business services.
Security systems services.
Photofinishing laboratories.
Business services, not elsewhere classified.
Automotive repair, services, and parking.
Automotive rental and leasing, without drivers.
Truck rental and leasing, without drivers.
Passenger car rental.
Automobile parking.
Automobile parking.
Automotive repair shops.
Top, body, and upholstery repair shops and paint shops.
Tire retreading and repair shops.
General automotive repair shops.
Automotive repair shops, not elsewhere classified.
Automotive services, except repair.
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Pt. 510, App. B
29 CFR Ch. V (7–1–19 Edition)
NONMANUFACTURING INDUSTRIES—Continued
Major
group
76 .............
78 .............
79 .............
80 .............
81 .............
82 .............
Industry
group number
Industry
number
....................
....................
....................
762
....................
....................
....................
763
....................
764
....................
769
....................
....................
....................
....................
781
....................
782
....................
783
....................
....................
....................
791
....................
792
7542
7549
....................
....................
7622
7623
7629
....................
7631
....................
7641
....................
7692
7694
7699
....................
....................
7812
....................
7822
....................
7832
7833
....................
....................
7911
....................
3
3
1
1
3
1
1
2
2
3
3
1
2
1
1
1
1
1
2
2
3
3
a
1
2
2
a
....................
793
....................
794
....................
....................
799
....................
....................
....................
....................
801
....................
802
....................
803
....................
804
....................
805
....................
806
....................
....................
....................
807
....................
....................
809
....................
....................
811
....................
....................
821
....................
822
....................
....................
824
....................
....................
7929
....................
7933
....................
7941
7948
....................
7993
7997
7999
....................
....................
8011
....................
8021
....................
8031
....................
8049
....................
8059
....................
8062
8063
8069
....................
8071
8072
....................
8099
....................
....................
8111
....................
....................
8211
....................
8221
8222
....................
8243
8244
a
3
3
a
a
a
2
2
1
2
1
1
1
1
1
a
a
1
1
b
b
1
1
1
1
1
1
a
1
1
1
1
1
1
2
2
1
1
1
2
a
2
Tier
Industry
Carwashes.
Automotive services, except repair and carwashes.
Miscellaneous repair services.
Electrical repair shops.
Radio and television repair shops.
Refrigeration and air-conditioning service and repair shops.
Electrical and electronic repair shops, not elsewhere classified.
Watch, clock, and jewelry repair.
Watch, clock, and jewelry repair.
Reupholstery and furniture repair.
Reupholstery and furniture repair.
Miscellaneous repair shops and related services.
Welding repair.
Armature rewinding shops.
Repair shops and related services, not elsewhere classified.
Motion pictures.
Motion picture production and allied services.
Motion picture and video tape production.
Motion picture distribution and allied services.
Motion picture and video tape distribution.
Motion picture theaters.
Motion picture theaters, except drive-in.
Drive-in motion picture theaters.
Amusement and recreation services.
Dance studios, schools, and halls.
Dance studios, schools, and halls.
Theatrical producers (except motion picture), bands, orchestras, and entertainers.
Bands, orchestras, actors, and other entertainers and entertainment groups.
Bowling centers.
Bowling centers.
Commercial sports.
Professional sports clubs and promoters.
Racing, including track operation.
Miscellaneous amusement and recreation services.
Coin-operated amusement devices.
Membership sports and recreation clubs.
Amusement and recreation services not elsewhere classified.
Health services.
Offices and clinics of doctors of medicine.
Offices and clinics of doctors of medicine.
Offices and clinics of dentists.
Offices and clinics of dentists.
Offices and clinics of doctors of osteopathy.
Offices and clinics of doctors of osteopathy.
Offices and clinics of other health practitioners.
Offices and clinics of health practitioners, not elsewhere classified.
Nursing and personal care facilities.
Nursing and personal care facilities, not elsewhere classified.
Hospitals.
General medical and surgical hospitals.
Psychiatric hospitals.
Specialty hospitals, except psychiatric.
Medical and dental laboratories.
Medical laboratories.
Dental laboratories.
Miscellaneous health and allied services, not elsewhere classified.
Health and allied services, not elsewhere classified.
Legal services.
Legal services.
Legal services.
Educational services.
Elementary and secondary schools.
Elementary and secondary schools.
Colleges, universities, professional schools, and junior colleges.
Colleges, universities, and professional schools.
Junior colleges and technical institutes.
Vocational schools.
Data processing schools.
Business and secretarial schools.
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Wage and Hour Division, Labor
Pt. 510, App. C
NONMANUFACTURING INDUSTRIES—Continued
Major
group
83 .............
84 .............
86 .............
87 .............
88 .............
Industry
group number
Industry
number
....................
829
....................
....................
832
....................
833
....................
835
....................
836
....................
839
....................
....................
841
....................
....................
861
....................
862
....................
863
....................
864
....................
866
....................
869
....................
....................
871
....................
872
....................
873
....................
....................
881
....................
8249
....................
8299
....................
....................
8322
....................
8331
....................
8351
....................
8361
....................
8399
....................
....................
8412
....................
....................
8611
....................
8621
....................
8631
....................
8641
....................
8661
....................
8699
....................
....................
8711
....................
8721
....................
8733
....................
....................
8811
Tier
Industry
2
1
1
1
1
1
3
3
1
1
2
2
a
a
3
3
3
1
1
1
1
1
1
1
2
2
2
2
2
2
1
1
1
1
1
1
1
3
3
3
Vocational schools, not elsewhere classified.
Schools and educational services, not elsewhere classified.
Schools and educational services, not elsewhere classified.
Social services.
Individual and family social services.
Individual and family social services.
Job training and vocational rehabilitation services.
Job training and vocational rehabilitation services.
Child day care services.
Child day care services.
Residential care.
Residential care.
Social services, not elsewhere classified.
Social services, not elsewhere classified.
Museums, art galleries, and botanical and zoological gardens.
Museums and art galleries.
Museums and art galleries.
Membership organizations.
Business associations.
Business associations.
Professional membership organizations.
Professional membership organizations.
Labor unions and similar labor organizations.
Labor unions and similar labor organizations.
Civic, social, and fraternal associations.
Civic, social, and fraternal associations.
Religious organizations.
Religious organizations.
Membership organizations, not elsewhere classified.
Membership organizations, not elsewhere classified.
Engineering, accounting, research, management, and related services.
Engineering, architectural, and surveying services.
Engineering services.
Accounting, auditing, and bookkeeping services.
Accounting, auditing, and bookkeeping services.
Research, development, and testing services.
Noncommercial research organizations.
Private households.
Private households.
Private households.
‘‘a’’ = Category contained less than three responding employers or one responding employer had more than 80 percent of the
employment in the category.
‘‘b’’ = Firm(s) declined to furnish waivers in these categories.
1 Survey data reported on the basis of SIC code 5810. Data were not broken down by SIC 5812, Eating places, and 5813
Drinking places (Alcoholic beverages).
[55 FR 12120, Mar. 30, 1990; 55 FR 12778, Apr. 5, 1990, as amended at 55 FR 39577, Sept. 27, 1990;
55 FR 53248, Dec. 27, 1990; 57 FR 1104, Jan. 10, 1992]
APPENDIX C TO PART 510—GOVERNMENT
CORPORATIONS ELIGIBLE FOR MINIMUM WAGE PHASE-IN
data were provided are subject to Tier 1
treatment.
This appendix contains a listing of the public organizations (corporations) in Puerto
Rico for which data have been provided by
the Commonwealth for purposes of implementing the 1989 Amendments to FLSA.
Such Corporations are subject to Tiers 1, 2,
or 3, as set forth below. Corporations which
are listed under Tier 3 may pay rates specified under Tier 4 to employees engaged in
traditional activities, as defined in § 510.25 of
the regulations. All other employees are subject to Tier 3. Organizations for which no
1
Tier
1
2
3
1
2
1
2
1
Organization
Automobile Accidents Compensation Administration.
Cardiovascular Center Corporation of Puerto Rico
and the Caribbean.
Culebra Conservation and Development Authority.
Government Development Bank of Puerto Rico.
Highway Authority.
Industries for the Blind, Mentally Retarded, and
other Disabled Persons of Puerto Rico.
Institute of Puerto Rican Culture.
Corporation for the Development and Administration of Marine, Lacustrine, and Fluvial Resources of Puerto Rico.
Metropolitan Bus Authority.
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29 CFR Ch. V (7–1–19 Edition)
Tier
2
Organization
Tier
Puerto Rico Mineral Resource Development Corporation.
Musical Arts Corporation.
Public Building Authority.
Puerto Rico Institute of Cinematographic and Television Arts and Industries.
Puerto Rico Aqueducts and Sewer Authority.
Puerto Rico Communications Authority.
Puerto Rico Land Administration.
Puerto Rico Marine Shipping Authority.
Puerto Rico Medical Service Administration.
Puerto Rico Ports Authority.
Puerto Rico Musical Performing Arts Corporation.
Puerto Rico Rural Development Corporation.
Puerto Rico Sugar Board.
Puerto Rico Telephone Company.
Puerto Rico Solid Waste Management Authority.
Puerto Rico Housing Bank.
Puerto Rico Tourism Company.
Puerto Rico Renewal and Housing Corporation.
Puerto Rico Industrial Development Bank.
Recreational Development Company.
Right to Work Administration.
1
1
1
1
1
1
1
1
1
1
2
3
1
2
1
1
3
3
3
2
APPENDIX D TO PART 510—MUNICIPALITIES ELIGIBLE FOR MINIMUM WAGE
PHASE-IN
This appendix contains a listing of the municipalities in Puerto Rico and the tier applicable to each. Municipalities with average
hourly earnings below $4.65 but equal to or
greater than $4.00 are subject to Tier 2, as set
forth below. Municipalities with average
hourly earnings under $4.00 are subject to
Tier 3. Municipalities which are listed under
Tier 3 may pay the rates specified under Tier
4 to employees engaged in traditional activities, as defined in § 510.25 of the regulations.
All other employees are subject to Tier 3.
Municipalities which did not submit data are
subject to Tier 1. The tiers set forth below
are subject to petitions for review by affected employees, if filed prior to June 1,
1990. If upon review it is determined that the
municipality should have been subject to
Tier 1 or 2, back wages will have to be paid
to April 1, 1990, to make up the difference between what municipal employees were paid
and what they should have been paid.
Tier
3
3
3
3
3
3
3
3
3
3
3
3
3
3
2
3
3
Municipality
Adjuntas.
Aguada.
Aguadilla.
Aguas Buenas.
Aibonito.
An˜asco.
Arecibo.
Arroyo.
Barceloneta.
Barranquitas.
Bayamon.
Cabo Rojo.
Caguas.
Camuy.
Canovanas.
Carolina.
Catan˜o.
3
2
3
3
3
2
3
3
2
3
3
3
3
2
3
3
3
3
3
3
3
3
3
2
3
3
3
3
3
1
3
3
3
2
3
3
2
3
3
3
3
3
3
3
3
3
3
2
3
3
3
3
3
2
3
3
3
3
3
3
3
Municipality
Cayey.
Ceiba.
Ciales.
Cidra.
Coamo.
Comerio.
Corozal.
Culebra.
Dorado.
Fajardo.
Florida.
Guanica.
Guyama.
Guayanilla.
Guaynabo.
Guarbo.
Hatillo.
Hormigueros.
Humacao.
Isabela.
Jayuya.
Juana Diaz.
Juncos.
Lajas.
Lares.
Las Marias.
Las Piedras.
Loiza.
Luquillo.
Manati.
Maricao.
Maunabo.
Mayaguez.
Moca.
Morovis.
Naguabo.
Naranjito.
Orocovis.
Patillas.
Pen˜uelas.
Ponce.
Quebradillas.
Rincon.
Rio Grande.
Sabana Grande.
Salinas.
San German.
San Juan.
San Lorenzo.
San Sebastian.
Santa Isabel.
Toa Alta.
Toa Baja.
Trujillo Alto.
Utuado.
Vega Alta.
Vega Baja.
Vieques.
Villalba.
Yabucoa.
Yauco.
PART 511—WAGE ORDER PROCEDURE FOR AMERICAN SAMOA
Sec.
511.1 General method for issuance of wage
orders.
511.2 Initiation of proceedings; notices of
hearings.
511.3 Composition and appointment of committees.
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Wage and Hour Division, Labor
§ 511.3
511.4 Compensation of committee members.
511.5 Vacancies and dissolution of committees.
511.6 Investigation.
511.7 Committee staff.
511.8 Prehearing statements.
511.9 Requirements for quorum and decisions.
511.10 Subjects and issues.
511.11 Pertinent data.
511.12 Committee and subcommittee meetings.
511.13 Evidence.
511.14 Procedure for receiving evidence.
511.15 Submittals prior to reports.
511.16 Reports.
511.17 Records.
511.18 Publication and effective date of
wage order.
511.19 Petitions.
AUTHORITY: 29 U.S.C. 205, 206, 208; 5 U.S.C.
551–559.
SOURCE: 21 FR 7669, Oct. 6, 1956, unless otherwise noted.
§ 511.1 General method for issuance of
wage orders.
Pursuant to authority delegated by
the Secretary of Labor, the Administrator of the Wage and Hour Division
publishes the orders that are required
by statute to make the recommendations of industry committees effective
as wage orders under section 6(a)(3) of
the Fair Labor Standards Act. The
wage orders issued by the Administrator must by law give effect to the
recommendations of the industry committees. All wage order proceedings
will be conducted in accordance with
the standards provided in the Administrative Procedure Act as interpreted
and applied in this part.
[55 FR 53298, Dec. 28, 1990]
§ 511.2 Initiation of proceedings; notices of hearings.
(a) Wage order proceedings are initiated by order of the Secretary, published in the FEDERAL REGISTER, giving
notice of hearings by industry committees to recommend the minimum rate
or rates of wages to be paid under section 6 of the Act to employees in American Samoa engaged in commerce or in
the production of goods for commerce
or in any enterprise engaged in commerce or in the production of goods for
commerce. These orders will contain a
definition of the particular industry in
American Samoa, for which the com-
mittee is to make its recommendations, or these orders will direct the
committee to recommend the minimum rate or rates of wages for all industry in American Samoa. All such
orders will make provision for convening the committee. Any particular
industry defined in such an order may
be a trade, business, industry, or
branch thereof, or group of industries,
in which individuals are gainfully employed.
(b) These orders will also give reasonable notice (1) of the time and place of
the commencement of the hearing of
such witnesses and receiving of such
evidence as may be necessary or appropriate to enable the committee to perform its duties and functions under the
Act, (2) of the general nature of the
wage order proceedings and the authority under which they are proposed, (3)
of the subjects and issues involved, and
(4) that the committee will take official notice of the economic report
(note § 511.13) and the parties will have
an opportunity at the hearing to show
any contrary or additional facts.
[26 FR 6513, July 20, 1961, as amended at 55
FR 12120, Mar. 30, 1990]
§ 511.3 Composition and appointment
of committees.
An industry committee will be composed of residents of American Samoa
and residents of the United States outside of American Samoa. The Secretary will appoint as members of each
committee an equal number of persons
representing:
(a) The public,
(b) Employees in the industry, and
(c) Employers in the industry.
The public members shall be disinterested, and the Secretary will designate one as chairperson. For purposes
of this section only, the definition of
the industry shall be considered to include all such industry throughout the
United States, its territories and possessions.
[55 FR 53298, Dec. 28, 1990]
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§ 511.4
29 CFR Ch. V (7–1–19 Edition)
§ 511.4 Compensation of committee
members.
Each member of an industry committee will be allowed per diem compensation at the rate specified in Chapter 304 of the Department of Labor
Supplement to the Federal Personnel
Manual for each day actually spent in
the work of the committee, and will, in
addition, be reimbursed for necessary
transportation and other expenses incident to traveling in accordance with
Standard Government Travel Regulations then in effect. All travel expenses
will be paid on travel vouchers certified by the Administrator or an authorized representative. Any other necessary expenses that are incidental to
the work of the committee may be incurred by the committee upon approval
of, and shall be paid upon, certification
of the Administrator or an authorized
representative.
[58 FR 34524, June 28, 1993]
§ 511.5 Vacancies and dissolution of
committees.
The Secretary will appoint persons to
fill any vacancies occurring in industry
committees. If an industry committee
is unable to arrive at a recommendation within a reasonable time, or refuses to make a recommendation, it
may be dissolved by the Secretary. An
industry committee shall cease to perform further functions when it has
filed with the Administrator its report
containing its findings of fact and recommendations with respect to the matters referred to it, and shall not again
perform any functions with respect to
any matter reported on, unless and
until directed by the Administrator.
An industry committee shall be dissolved automatically when its recommendations are no longer subject to
review under section 10 of the Act.
[27 FR 10651, Nov. 1, 1962]
§ 511.6 Investigation.
The Administrator shall prepare an
economic report containing such data
as can be assembled pertinent to the
matters to be referred to a committee.
A copy of these regulations will be sent
to all members of the committee following their appointment, and a copy
of the economic report when completed
will be furnished promptly. Before
making its report the committee will
decide whether it will conduct any further investigation, apart from the
hearing and the review of the economic
report, in connection with the matters
referred to it.
[55 FR 53298, Dec. 28, 1990]
§ 511.7 Committee staff.
Each industry committee will be furnished a lawyer, to serve as committee
counsel, and an economist, to serve as
committee
economist.
Committee
counsel shall advise the committee on
the issues of law, including interpretations of these regulations and the legal
scope of the committee’s discretion,
which arise during the committee proceedings. The committee counsel and
economist shall be available to advise
and assist the committee at all of its
meetings. The Administrator shall furnish the committee with adequate
stenographic, clerical, and other assistance.
§ 511.8 Prehearing statements.
(a) Every employer, employee, trade
association, trade union, or group of
employers, employees, associations, or
unions in the industry as defined, or in
such industry elsewhere in the United
States, and every other person who, in
the judgment of the committee has an
interest sufficient to justify the participation proposed by such party,
shall be considered an interested person. No member of the committee may
participate as an interested person.
(b) Any interested person who wishes
to participate on his or her own behalf
or by counsel shall file a written prehearing statement within such period
of time as may be prescribed in a notice of hearing, or other notice published in the FEDERAL REGISTER. The
number of copies of such statements
and the time and places for filing them
will be specified in notices of hearings.
The prehearing statement shall describe the person’s interest in the proceeding and shall contain:
(1) The prepared statement he or she
proposes to give, if any;
(2) A statement of the individual
classifications and minimum wage
rates, if any, he or she proposes to support;
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§ 511.10
(3) The written data he or she proposes to introduce in evidence, including all tangible objective data to be
submitted pursuant to § 511.13;
(4) The names and addresses of the
witnesses he or she proposes to call and
a summary of the evidence he or she
proposes to develop;
(5) The name and address of the individual who will present his or her case;
and
(6) A statement of the approximate
length of time his or her case will take.
If the prehearing statement is in conformity with the above requirements,
the person shall have the right to participate as a party. In accordance with
section 6(c) of the Administrative Procedure Act, the industry committee
shall, after considering the advice of
committee counsel, issue subpoenas,
authorized by section 9 of the Fair
Labor Standards Act of 1938, to parties
who make a request therefor accompanied by a clear showing of general
relevance and reasonable scope of the
evidence sought.
(c) Prehearing statements of parties
shall be made available for examination at the offices where they are filed.
Each person who files a prehearing
statement should, if requested, make
himself or herself available for conference with the committee staff to
make any needed clarification of his or
her prehearing statement, and arrange
details of presenting his or her testimony or case.
(d) In exceptional circumstances a
person who has not filed the prehearing
statement required by this section and
who does not appear on a witness list
filed by a party may nevertheless be
permitted, in the discretion of the
committee, to offer testimony.
[25 FR 14024, Dec. 31, 1960, as amended at 55
FR 53298, Dec. 28, 1990]
§ 511.9 Requirements for quorum and
decisions.
Two-thirds of the members of an industry committee shall constitute a
quorum. Approval by a majority of all
of the members of an industry committee or subcommittee shall be required for its report. Except as otherwise provided in this part, the chairperson of the industry committee or
subcommittee may make other deci-
sions for the committee or subcommittee, but each such decision
shall be subject to approval of a majority of the members present if any member objects.
[55 FR 53298, Dec. 28, 1990]
§ 511.10
Subjects and issues.
(a) The declared policy of the Act
with respect to industries or enterprises in American Samoa engaged in
commerce or in the production of goods
for commerce is to reach as rapidly as
is economically feasible without substantially curtailing employment the
object of the minimum wage rate that
would apply in each such industry
under paragraph (1) of section 6(a) but
for section 6(a)(3) of the Act. Each industry committee shall recommend to
the Administrator the highest minimum wage rates for the industry that
it determines, having due regard to
economic and competitive conditions,
will not substantially curtail employment in the industry and will not give
any industry in American Samoa a
competitive advantage over any industry in the United States outside of
American Samoa; except that the committee shall recommend to the Secretary the minimum wage rate prescribed in section 6(a)(1), that would be
applicable but for section 6(a)(3), unless
there is evidence in the record that establishes that the industry, or a predominant portion thereof, is unable to
pay that wage due to such economic
and competitive conditions.
(b) Whenever the industry committee
finds that a higher minimum wage may
be determined for employees engaged
in certain activities or in the manufacture of certain products in the industry
than may be determined for other employees in the industry, the industry
committee shall recommend such reasonable classifications within the industry as it determines to be necessary
for the purpose of fixing for each classification the highest minimum wage
rate (not in excess of that prescribed in
paragraph (1) of section 6(a) of the Act)
that can be determined for it under the
principles set out in this section that
will not substantially curtail employment in such classification and will not
give a competitive advantage to any
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§ 511.11
29 CFR Ch. V (7–1–19 Edition)
group in that industry. No classification shall be made, however, and no
minimum wage rate shall be fixed solely on a regional basis or on the basis of
age or sex. In determining whether
there should be classifications within
an industry, in making such classifications, and in determining the minimum
wage rate for each classification, the
committee shall consider, among other
relevant factors, the following:
(1) Competitive conditions as affected
by transportation, living and production costs;
(2) The wages established for work of
like or comparable character by collective labor agreements negotiated between employers and employees by representatives of their own choosing; and
(3) The wages paid for work of like or
comparable character by employers
who voluntarily maintain minimum
wage standards in the industry.
[55 FR 53298, Dec. 28, 1990]
§ 511.11 Pertinent data.
Among the types of data which may
be considered pertinent to the subjects
and issues delineated in § 511.10, are
those revealing:
(a) Employment and labor conditions
and trends in American Samoa, and on
the mainland, particularly since the
promulgation of the presently applicable wage order, including such items as
present and past employment, present
wage rates and fringe benefits, changes
in average hourly earnings or wage
structure, provisions of collective bargaining agreements, hours of work,
labor turnover, absenteeism, productivity, learning periods, rejection
rates, and similar factors;
(b) Market conditions and trends in
American Samoa, and on the mainland,
including changes in the volume and
value of production, market outlets,
price changes, style factors, consumer
demand, competitive relationships,
tariff rates, and similar marketing factors;
(c) Comparative production costs in
American Samoa, on the mainland, and
in foreign countries, together with the
factors responsible for differences;
(d) Financial conditions and trends
since promulgation of the present wage
order as reflected in profit and loss
statements and balance sheets; and
(e) Data bearing on proper definitions
of classifications within an industry.
[55 FR 12120, Mar. 30, 1990]
§ 511.12 Committee and subcommittee
meetings.
(a) The full committee, or a quorum
thereof, will convene at the time and
place appointed for an initial prehearing meeting as provided in the
Secretary’s order initiating the proceedings (note § 511.2). The full committee acting through a quorum will
decide at that meeting whether it will
preside at the reception at the hearing
or will authorize a subcommittee to
preside. Any resolution authorizing a
subcommittee to hold the hearing shall
provide a period of 30 days after:
(1) The subcommittee has filed its
recommended report and
(2) A transcript of the subcommittee
hearing is made available to the parties, for the parties to file exceptions
to the recommended report, and the
committee shall meet promptly thereafter on call of its chairperson or the
Administrator to consider exceptions
and prepare its final report.
(b) A committee may adjourn its
meeting or hearing, or both, from time
to time, and meet again, at hearing or
otherwise, pursuant to the terms of adjournment, or on call of its chairperson
or the Administrator.
[55 FR 53299, Dec. 28, 1990]
§ 511.13 Evidence.
In accordance with the notice of
hearing, the committee and any authorized subcommittee will take official notice of the facts stated in the
economic report to the extent they are
not refuted by evidence received at the
hearing. Other pertinent evidence
available to the Department of Labor
may be presented at the hearing. The
committee itself may call witnesses
not otherwise scheduled to testify. Oral
or documentary evidence may be received, but the committee shall exclude irrelevant, immaterial, and unduly repetitious evidence. Every interested person who has met the requirements for participation as a party shall
have the right to present his or her
case by oral or documentary evidence,
to submit rebuttal evidence, and to
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Wage and Hour Division, Labor
§ 511.16
conduct such cross-examination of witnesses called by others as may be required for a full and true disclosure of
the facts. Testimony on behalf of an
employer or group of employers as to
inability to pay the minimum wage
rate specified in paragraph (1) of section 6(a) of the Act, or as to inability
to adjust to a higher minimum wage
rate than prescribed by any applicable
wage order of the Secretary, shall be
supported by tangible objective data
filed as part of the prehearing statement under § 511.8. Financial or other
data shall include data for the most recent year or fraction thereof for which
data are available. Financial statements filed in accordance with this
provision, except those relating to a
period of less than a full fiscal year or
a fiscal year ending less than 90 days
prior to the filing of the prehearing
statement, shall be certified by an
independent public accountant or shall
be sworn to conform to and be consistent with the corresponding income
tax returns covering the same years.
Evidence of witnesses not present at
the hearing may be submitted only by
affidavits received with, or as a part of,
a prehearing statement that meets the
requirements of § 511.8 and satisfactorily explains why each affiant cannot
be present. Such affidavits will be received in evidence to the same extent
that testimony from affiants would
have been admitted had they been
present. The committee will give such
weight to these statements as it considers appropriate, and the fact that
such affiants have not been subject to
cross-examination may be considered,
along with other relevant facts, in assessing the weight to be given such evidence.
[55 FR 53299, Dec. 28, 1990]
§ 511.14 Procedure for receiving evidence.
(a) All testimony shall be given
under oath or affirmation. Any party
shall have the right to appear in person, by counsel, or by other specified
representative. Misconduct at any
hearing shall be grounds for summary
exclusion from the hearing. The committee shall limit the testimony of any
witness where appropriate to prevent
the hearing from becoming unduly pro-
longed. The refusal of a witness to answer any question which has been ruled
to be proper shall, in the discretion of
the committee, be ground for striking
all testimony given by the witness on
related matters.
(b) Unless otherwise directed by the
committee, witnesses shall be called in
the following order: The committee
economist qualified to testify concerning the content and preparation of
the economic report, other witnesses
called by the Department of Labor,
witnesses called by the parties, other
witnesses. Unless otherwise directed by
the committee, all witnesses other
than those called by the parties shall
be examined in the following order: By
committee counsel, by committee
economist, by committee members, by
the parties or their representatives.
Witnesses called by the parties shall be
examined first by the party calling
them or by the party’s specified representative, and then in the order herein indicated for all other witnesses. Redirect examination may be permitted
at the discretion of the committee. Rebuttal evidence may be offered in the
order and manner in this section provided for other evidence. To the extent
not specified in this section, the order
for calling and examining witnesses
shall be specified by the chairperson of
the committee or subcommittee.
[21 FR 7669, Oct. 6, 1956, as amended at 55 FR
53299, Dec. 28, 1990]
§ 511.15
Submittals prior to reports.
As soon as the receipt of evidence is
concluded, a committee or subcommittee presiding at a hearing shall
receive any proposed findings of fact
and recommendations together with
the reasons therefor submitted by any
party. These submittals shall be oral
unless otherwise directed by the committee or subcommittee. If, in the discretion of the committee or subcommittee such proposals should be in
writing, it may grant such additional
time as it deems essential.
§ 511.16
Reports.
Promptly after receipt of submissions under § 511.15, the committee or
subcommittee will resolve the issues
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§ 511.17
29 CFR Ch. V (7–1–19 Edition)
before it and prepare a report containing its findings of fact and recommendations. The report shall contain the committee’s or the subcommittee’s findings and conclusions
as well as the reasons or basis therefor
upon all the material issues of fact,
law, or discretion presented on the
record. When a committee, acting
through a quorum, has presided at the
reception of evidence, this report shall
be its final report on the matters referred to it. Where, however, a subcommittee has presided at the reception of evidence, this report shall be an
initial report, and the committee shall
meet thereafter to review the report
and rule on exceptions in its final report. Where the committee presides at
the reception of evidence and proceeds
to final decision, every party shall be
regarded as having objected to any
wage rate or classification at variance
with any the party proposed in the party’s prehearing statements unless the
party accepted such a rate or classification in any submittal made pursuant to § 511.15. A copy of the report
shall be signed by each member of the
committee who approves it, either at a
meeting of the committee or by circulation of one or more copies among
the members of the committee. At any
time within 3 days after the committee
report is signed by those who approve
it, members dissenting therefrom may
collectively or individually submit
signed reports stating the reasons for
their dissent.
[55 FR 53299, Dec. 28, 1990]
§ 511.17 Records.
Each industry committee shall keep
a journal recording the time and place
of all its meetings, the members
present, the votes, and other formal
proceedings, including the appointment of subcommittees. Subcommittees shall keep a similar journal. No report of committee or subcommittee
discussions need be included. All hearings shall be recorded. The record of
any hearing before any subcommittee
shall be transcribed. All hearings before a committee shall also be transcribed in whole or in part whenever
the Administrator so directs upon his
or her own motion or upon the motion
of any party or any person compelled
to submit data or evidence and upon
the payment of costs prescribed by the
Administrator. Promptly after completion of the committee’s final report,
the committee chairperson shall certify the report and transmit it to the
Administrator. As soon as practicable
thereafter, the committee staff shall
transmit to the Administrator:
(a) All committee and subcommittee
journals;
(b) All applications for leave to participate as parties together with the
record of action thereon; and,
(c) The record, including any transcript of the testimony and exhibits,
together with all papers and requests
filed in the proceedings.
These documents shall be available for
inspections and copying by interested
persons at the Office of the Administrator during usual business hours.
[55 FR 53300, Dec. 28, 1990]
§ 511.18 Publication and effective date
of wage order.
Promptly after receipt of the committee report the Administrator shall
publish the committee recommendations in the FEDERAL REGISTER and
shall provide by order that the recommendations contained in such report shall take effect upon the expiration of 15 days after the date of such
publication.
§ 511.19 Petitions.
Any interested person may at any
time file a petition with the Administrator for an amendment to the regulations contained in this part or for an
amendment to a wage order applicable
to that person. In view of the statutory
requirement that the minimum rates
of wages established by order under
section 6 of the Act be reviewed by an
industry committee at least biennially,
substantial cause must be shown in
support of any petition for an amendment of a wage order out of regular
course. Any interested person may also
file a petition at any time with the Administrator for a public hearing under
section 13(e) of the Act to determine
whether economic conditions warrant
rules or regulations providing reasonable limitations or allowing reasonable
variations, tolerances, or exemptions
to or from any or all of the provisions
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Wage and Hour Division, Labor
§ 515.3
of section 7 of the Act with respect to
employees in American Samoa for
whom the Secretary of Labor has established minimum wage rates under
section 6(a)(3) of the Act and the regulations contained in this part. Whenever it appears to the Secretary of
Labor, by reason of such a petition or
otherwise, to be probable that such a
hearing is likely to reveal that economic conditions warrant such action,
notice of such hearing specifying the
procedure to be followed will be published in the FEDERAL REGISTER.
[55 FR 53300, Dec. 28, 1990]
PART 515—UTILIZATION OF STATE
AGENCIES FOR INVESTIGATIONS
AND INSPECTIONS
Sec.
515.1
515.2
515.3
515.4
515.5
515.6
515.7
515.8
515.9
515.10
Definitions.
Agreements with State agencies.
Qualifications of the State agency.
Submission of plan.
Additional requirements.
Audits.
Transmission of official mail.
Enforcement.
Agreements and approved plans.
Amendments and repeal.
AUTHORITY: Sec. 4, 49 Stat. 2038, sec. 11(b),
52 Stat. 1066; 29 U.S.C. 211(b), 41 U.S.C. 38.
SOURCE: 13 FR 2161, 2163, Apr. 22, 1948, unless otherwise noted.
§ 515.1 Definitions.
As used in this part:
(a) Acts. The term Acts means the
Fair Labor Standards Act of 1938 (Act
of June 25, 1938; Chapter 676, 52 Stat.
1060, 29 U.S.C. 201) and the Public Contracts Act (Act of June 30, 1936; 49 Stat.
2036; 41 U.S.C. 35–45).
(b) Administrator. The term Administrator means the Administrator of the
Wage and Hour Division of the United
States Department of Labor.
(c) Division. The term Division means
the Wage and Hour Division of the
United States Department of Labor.
(d) State. The term State means any
State of the United States or the District of Columbia or any Territory or
possession of the United States.
(e) State agency. The term State agency means the agency in the State
charged with the administration of
labor laws which necessitate inspection
of places of employment for (1) enforcement of State child-labor regulations
and (2) enforcement of State maximum-hour or State minimum-wage
regulations.
(f) Official forms. The term official
forms means forms prescribed by the
Administrator or the Secretary of
Labor.
§ 515.2 Agreements with State agencies.
(a) Purpose. The Secretary and the
Administrator may enter into agreements with State agencies for the utilization of services of State and local
agencies and their employees in making investigations and inspections
under the Acts and for reimbursement
therefor, when such State agencies
have submitted plans of cooperation
for such purposes and such plans have
been found to be reasonably appropriate and adequate to carry out the
respective functions of the Secretary
and the Administrator.
(b) Certificates of attorneys general. No
such agreement shall become effective
and operative until a statement of the
Attorney General of the State, or, if
the Attorney General is not authorized
to make such a statement, the State
official who is so authorized, has been
received by the Division and the Secretary of Labor certifying that the
agreement is valid in the form as executed under the laws of the State.
§ 515.3 Qualifications
agency.
of
the
The State agency shall have as its
primary function the administration of
State labor laws and shall be under the
direction of an executive who gives full
time to the work of the agency. The
agency shall be engaged in inspecting
places of employment for (a) enforcement of State child-labor laws and regulations, and (b) enforcement of State
maximum hour or minimum-wage laws
and regulations. An administrative division of the State agency shall be designated to make investigations and inspections under the Acts; qualified
staff, under adequate supervision, shall
be specifically assigned for work connected with State and Federal childlabor, maximum-hour and minimum-
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§ 515.4
29 CFR Ch. V (7–1–19 Edition)
wage laws and regulations; and provision shall be made to inspect any establishment subject to the Acts.
§ 515.4 Submission of plan.
The State agency shall submit a
plan, in quadruplicate, which shall include the following:
(a) A copy of the Act establishing the
State agency, copies of the laws administered by the State agency, and if
there is an act specifically authorizing
the State to cooperate with the Division or the Secretary of Labor, or both,
a copy of such Act.
(b) A description of the organization
of the State agency, illustrated by organization charts, showing the delegation of responsibility and lines of authority to be followed within the agency in the enforcement of the act and
State labor laws.
(c) A description: (1) Of the manner
in which investigations and inspections
under the Acts will be coordinated with
the investigations and inspections for
enforcement of State child-labor, maximum-hour and minimum-wage laws
and regulations; (2) of the location of
offices of the administrative division
designated to make inspections under
the Acts, with the job titles of employees located in each such office and employees assigned to work in connection
with the Acts so designated; and (3) of
the manner in which the work of inspectors will be supervised.
(d) Provisions for the establishment
and maintenance of personnel administration, with respect to personnel engaged in work under the Acts for the
Division and the Secretary of Labor in
accordance with the following standards:
(1) Job classifications based upon an
analysis of the duties and responsibilities of positions;
(2) A compensation schedule adjusted
to State salary schedules for similar
positions: Provided, however, That all
salaries paid by the State for services
rendered in accordance with an agreement entered into pursuant to § 515.2
shall be on the basis of applicable State
laws or regulations, or in the absence
of such applicable laws or regulations,
on the approved and usual scale pair by
the State for similar services and shall
in no case exceed salaries paid for com-
parable Federal positions in the competitive classified service. Allowances
for necessary traveling expenses shall
be on the basis of State laws and regulations governing travel allowances;
(3) Assignment of personnel to Federal work only when their qualifications conform substantially with qualifications of Federal employees engaged
in similar work, such assignment to be
made only after submission to and approval by the Division and the Secretary of Labor of a statement of the
training and experience of each person
who will engage in Federal work;
(4) Appointment of new personnel on
the basis of merit, either (i) from lists
of eligible persons certified in the order
of merit, secured under a merit system
through State-wide competitive examinations which prescribe requirements
of training and experience in substantial conformity with Federal civil service requirements for similar positions
or (ii) from lists taken from Federal
registers established through competitive examinations for similar positions, it being understood that such
registers may be broken down by
States;
(5) Adequate training of staff;
(6) Promotion on the basis of qualifications and performance;
(7) Security of tenure assured satisfactory employees, including right of
notice and hearing prior to demotion
or dismissal;
(8) Prohibition against employees engaging in political activities other
than the exercise of their right to vote
and to express privately their opinions
on political questions.
(e) A budget which shall show, in detail, estimated expenditures by the
State agency on behalf of the Division
and the Secretary of Labor for services
to be rendered in connection with the
administration of the Acts and a budget which shall show estimated expenditure for the enforcement of comparable
State laws and regulations during the
period covered by the agreement; a
statement showing funds appropriated
to or allocated for meeting the budget
for estimated State expenditures; and a
statement showing expenditures by the
State agency for the enforcement of
comparable State laws and regulations
during the last fiscal year.
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Pt. 516
(f) A statement of State requirements in regard to fiscal practices and
to appointment of personnel, together
with copies of the laws and regulations
setting forth such requirements.
(g) A statement from the Attorney
General of the State or, if the Attorney
General is not authorized to make such
a statement, from the State official
who is so authorized certifying that
the State agency has authority to
enter into an Agreement with the Division and the Secretary of Labor in accordance with this part.
§ 515.5 Additional requirements.
(a) The State Agency shall follow the
procedure set forth in the Inspection
Manual for the enforcement of the act
and such supplements to or provisions
thereof as may be issued from time to
time by the Division or the Secretary
of Labor; use official forms for recording findings; make reports as required;
and carry on the work connected with
the administration of the Acts in conformity with the plans and budget
agreed upon and with the instructions
and policies of the Division and the
Secretary of Labor.
(b) Representatives of the Division
and the Secretary of Labor may at any
time, upon notifying the State agency,
make such inspections and investigations and secure such information as
may be necessary for the administration of the Acts.
§ 515.6 Audits.
The accounting records and the supporting data pertaining to expenditures
for investigations and inspections
under the Acts shall be subject to audit
by the Division and the Secretary of
Labor, annually, or so often as the Administrator and the Secretary of
Labor, may require.
§ 515.7 Transmission of official mail.
Subject to the requirements of law
and of the regulations of the Post Office Department, franked self-addressed envelopes may be used for communications from the field staff to a
State official designated by the Division and the Secretary of Labor, and
for communication from the State
agency to the Division or the Secretary
of Labor.
§ 515.8 Enforcement.
All litigation relating to the enforcement of the Acts, other than civil actions for the recovery of wages due instituted pursuant to section 16(b) of
the Fair Labor Standards Act of 1938
and all administrative proceedings instituted pursuant to section 5 of the
Public Contracts Act shall be undertaken by and be under the direction
and control of the Federal Government. Any State agency intending to
institute a civil action in behalf of an
employee or employees for the recovery of wages due, pursuant to section
16(b) of the Fair Labor Standards Act
of 1938 shall notify the Division and the
Secretary of Labor prior to the institution of such action.
§ 515.9 Agreements
and
approved
plans.
Agreements and approved plans incorporated therein may be amended
upon the consent of the parties thereto.
§ 515.10 Amendments and repeal.
This part may be amended or repealed by appropriate joint regulations
issued by the Secretary of Labor and
the Administrator: Provided, however,
That no such amendment or repeal
shall be effective as to any agreement
previously entered into by a State
agency without its consent thereto.
PART 516—RECORDS TO BE KEPT
BY EMPLOYERS
INTRODUCTORY
Sec.
516.0
516.1
Display of OMB control numbers.
Form of records; scope of regulations.
Subpart A—General Requirements
516.2 Employees subject to minimum wage
or minimum wage and overtime provisions pursuant to section 6 or sections 6
and 7(a) of the Act.
516.3 Bona fide executive, administrative,
and professional employees (including
academic administrative personnel and
teachers in elementary or secondary
schools), and outside sales employees
employed pursuant to section 13(a)(1) of
the Act.
516.4 Posting of notices.
516.5 Records to be preserved 3 years.
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§ 516.0
29 CFR Ch. V (7–1–19 Edition)
516.6 Records to be preserved 2 years.
516.7 Place for keeping records and their
availability for inspection.
516.8 Computations and reports.
516.9 Petitions for exceptions.
516.10 [Reserved]
Subpart B—Records Pertaining to Employees Subject to Miscellaneous Exemptions Under the Act; Other Special Requirements
516.11 Employees exempt from both minimum wage and overtime pay requirements under section 13(a) (2), (3), (4), (5),
(8), (10), (12) or 13(d) of the Act.
516.12 Employees exempt from overtime pay
requirements pursuant to section 13(b)
(1), (2), (3), (5), (9), (10), (15), (16), (17), (20),
(21), (24), (27) or (28) of the Act.
516.13 Livestock auction employees exempt
from overtime pay requirements under
section 13(b)(13) of the Act.
516.14 Country elevator employees exempt
from overtime pay requirements under
section 13(b)(14) of the Act.
516.15 Local delivery employees exempt
from overtime pay requirements pursuant to section 13(b)(11) of the Act.
516.16 Commission employees of a retail or
service establishment exempt from overtime pay requirements pursuant to section 7(i) of the Act.
516.17 Seamen exempt from overtime pay
requirements pursuant to section 13(b)(6)
of the Act.
516.18 Employees employed in certain tobacco, cotton, sugar cane or sugar beet
services, who are partially exempt from
overtime pay requirements pursuant to
section 7(m), 13(h), 13(i) or 13(j) of the
Act.
516.19 [Reserved]
516.20 Employees under certain collective
bargaining agreements who are partially
exempt from overtime pay requirements
as provided in section 7(b)(1) or section
7(b)(2) of the Act.
516.21 Bulk petroleum employees partially
exempt from overtime pay requirements
pursuant to section 7(b)(3) of the Act.
516.22 Employees engaged in charter activities of carriers pursuant to section 7(n)
of the Act.
516.23 Employees of hospitals and residential care facilities compensated for overtime work on the basis of a 14-day work
period pursuant to section 7(j) of the Act.
516.24 Employees employed under section
7(f) ‘‘Belo’’ contracts.
516.25 Employees paid for overtime on the
basis of ‘‘applicable’’ rates provided in
sections 7(g)(1) and 7(g)(2) of the Act.
516.26 Employees paid for overtime at premium rates computed on a ‘‘basic’’ rate
authorized in accordance with section
7(g)(3) of the Act.
516.27 ‘‘Board, lodging, or other facilities’’
under section 3(m) of the Act.
516.28 Tipped employees.
516.29 Employees employed by a private entity operating an amusement or recreational establishment located in a national park or national forest or on land
in the National Wildlife Refuge System
who are partially exempt from overtime
pay requirements pursuant to section
13(b)(29) of the Act.
516.30 Learners, apprentices, messengers,
students, or handicapped workers employed under special certificates as provided in section 14 of the Act.
516.31 Industrial homeworkers.
516.32 [Reserved]
516.33 Employees employed in agriculture
pursuant to section 13(a)(6) or 13(b)(12) of
the Act.
516.34 Exemption from overtime pay for
time spent by certain employees receiving remedial education pursuant to section 7(q) of the Act.
AUTHORITY: Sec. 11, 52 Stat. 1066, as amended, 29 U.S.C. 211. Section 516.28 also issued
under Pub. L. 104–188, § 2105(b); Pub. L. 110–28,
121 Stat. 112. Section 516.33 also issued under
52 Stat. 1060, as amended; 29 U.S.C. 201 et seq.
Section 516.34 also issued under Sec. 7, 103
Stat. 944, 29 U.S.C. 207(q).
SOURCE: 52 FR 24896, July 1, 1987, unless
otherwise noted.
INTRODUCTORY
§ 516.0 Display of OMB control numbers.
Currently
assigned
OMB Control
No.
Subpart or section where
information collection
equirement is located
Subpart A .......................................................
Subpart B .......................................................
516.31 also discussed in ...............................
[82 FR 2227, Jan. 9, 2017]
§ 516.1 Form of records; scope of regulations.
(a) Form of records. No particular
order or form of records is prescribed
by the regulations in this part. However, every employer subject to any
provisions of the Fair Labor Standards
Act of 1938, as amended (hereinafter referred to as the ‘‘Act’’), is required to
maintain records containing the information and data required by the specific sections of this part. The records
may be maintained and preserved on
microfilm or other basic source document of an automatic word or data
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§ 516.2
processing memory provided that adequate projection or viewing equipment
is available, that the reproductions are
clear and identifiable by date or pay
period and that extensions or transcriptions of the information required
by this part are made available upon
request.
(b) Scope of regulations. The regulations in this part are divided into two
subparts.
(1) Subpart A of this part contains
the requirements generally applicable
to all employers employing covered
employees, including the requirements
relating to the posting of notices, the
preservation and location of records,
and the recordkeeping requirements for
employers of employees to whom both
the minimum wage provisions of section 6 or the minimum wage provisions
of section 6 and the overtime pay provisions of section 7(a) of the Act apply.
In addition, § 516.3 contains the requirements relating to executive, administrative, and professional employees (including academic administrative personnel or teachers in elementary or
secondary schools), and outside sales
employees.
(2) Subpart B of this part deals with
the information and data which must
be kept for employees (other than executive, administrative, etc., employees)
who are subject to any of the exemptions provided in the Act. This section
also specifies the records needed for deductions from and additions to wages
for ‘‘board, lodging, or other facilities,’’ industrial homeworkers and employees whose tips are credited toward
wages. The sections in subpart B of
this part require the recording of more,
less, or different items of information
or data than required under the generally applicable recordkeeping requirements of subpart A.
(c) Relationship to other recordkeeping
and reporting requirements. Nothing in
29 CFR part 516 shall excuse any party
from complying with any recordkeeping or reporting requirement imposed by any other Federal, State or
local law, ordinance, regulation or
rule.
Subpart A—General Requirements
§ 516.2 Employees subject to minimum
wage or minimum wage and overtime provisions pursuant to section
6 or sections 6 and 7(a) of the Act.
(a) Items required. Every employer
shall maintain and preserve payroll or
other records containing the following
information and data with respect to
each employee to whom section 6 or
both sections 6 and 7(a) of the Act
apply:
(1) Name in full, as used for Social
Security recordkeeping purposes, and
on the same record, the employee’s
identifying symbol or number if such is
used in place of name on any time,
work, or payroll records,
(2) Home address, including zip code,
(3) Date of birth, if under 19,
(4) Sex and occupation in which employed (sex may be indicated by use of
the prefixes Mr., Mrs., Miss., or Ms.)
(Employee’s sex identification is related to the equal pay provisions of the
Act which are administered by the
Equal Employment Opportunity Commission. Other equal pay recordkeeping
requirements are contained in 29 CFR
part 1620.)
(5) Time of day and day of week on
which the employee’s workweek begins
(or for employees employed under section 7(k) of the Act, the starting time
and length of each employee’s work period). If the employee is part of a workforce or employed in or by an establishment all of whose workers have a
workweek beginning at the same time
on the same day, a single notation of
the time of the day and beginning day
of the workweek for the whole workforce or establishment will suffice,
(6)(i) Regular hourly rate of pay for
any workweek in which overtime compensation is due under section 7(a) of
the Act, (ii) explain basis of pay by indicating the monetary amount paid on
a per hour, per day, per week, per
piece, commission on sales, or other
basis, and (iii) the amount and nature
of each payment which, pursuant to
section 7(e) of the Act, is excluded from
the ‘‘regular rate’’ (these records may
be in the form of vouchers or other
payment data),
(7) Hours worked each workday and
total hours worked each workweek (for
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§ 516.3
29 CFR Ch. V (7–1–19 Edition)
purposes of this section, a ‘‘workday’’
is any fixed period of 24 consecutive
hours and a ‘‘workweek’’ is any fixed
and regularly recurring period of 7 consecutive workdays),
(8) Total daily or weekly straighttime earnings or wages due for hours
worked during the workday or workweek, exclusive of premium overtime
compensation,
(9) Total premium pay for overtime
hours. This amount excludes the
straight-time earnings for overtime
hours recorded under paragraph (a)(8)
of this section,
(10) Total additions to or deductions
from wages paid each pay period including employee purchase orders or
wage assignments. Also, in individual
employee records, the dates, amounts,
and nature of the items which make up
the total additions and deductions,
(11) Total wages paid each pay period,
(12) Date of payment and the pay period covered by payment.
(b) Records of retroactive payment of
wages. Every employer who makes retroactive payment of wages or compensation under the supervision of the
Administrator of the Wage and Hour
Division pursuant to section 16(c) and/
or section 17 of the Act, shall:
(1) Record and preserve, as an entry
on the pay records, the amount of such
payment to each employee, the period
covered by such payment, and the date
of payment.
(2) Prepare a report of each such payment on a receipt form provided by or
authorized by the Wage and Hour Division, and (i) preserve a copy as part of
the records, (ii) deliver a copy to the
employee, and (iii) file the original, as
evidence of payment by the employer
and receipt by the employee, with the
Administrator or an authorized representative within 10 days after payment is made.
(c) Employees working on fixed schedules. With respect to employees working on fixed schedules, an employer
may maintain records showing instead
of the hours worked each day and each
workweek as required by paragraph
(a)(7) of this section, the schedule of
daily and weekly hours the employee
normally works. Also,
(1) In weeks in which an employee adheres to this schedule, indicates by
check mark, statement or other method that such hours were in fact actually worked by him, and
(2) In weeks in which more or less
than the scheduled hours are worked,
shows that exact number of hours
worked each day and each week.
§ 516.3 Bona fide executive, administrative, and professional employees
(including academic administrative
personnel and teachers in elementary or secondary schools), and outside sales employees employed pursuant to section 13(a)(1) of the Act.
With respect to each employee in a
bona fide executive, administrative, or
professional capacity (including employees employed in the capacity of
academic administrative personnel or
teachers in elementary or secondary
schools), or in outside sales, as defined
in part 541 of this chapter (pertaining
to so-called ‘‘white collar’’ employee
exemptions), employers shall maintain
and preserve records containing all the
information and data required by
§ 516.2(a) except paragraphs (a) (6)
through (10) and, in addition, the basis
on which wages are paid in sufficient
detail to permit calculation for each
pay period of the employee’s total remuneration for employment including
fringe benefits and prerequisites. (This
may be shown as the dollar amount of
earnings per month, per week, per
month plus commissions, etc. with appropriate addenda such as ‘‘plus hospitalization and insurance plan A,’’
‘‘benefit package B,’’ ‘‘2 weeks paid vacation,’’ etc.)
§ 516.4
Posting of notices.
Every employer employing any employees subject to the Act’s minimum
wage provisions shall post and keep
posted a notice explaining the Act, as
prescribed by the Wage and Hour Division, in conspicuous places in every establishment where such employees are
employed so as to permit them to observe readily a copy. Any employer of
employees to whom section 7 of the Act
does not apply because of an exemption
of broad application to an establishment may alter or modify the poster
with a legible notation to show that
the overtime provisions do not apply.
For example:
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§ 516.7
Overtime Provisions Not Applicable to Taxicab Drivers (section 13(b)(17)).
§ 516.5 Records to be preserved 3
years.
Each employer shall preserve for at
least 3 years:
(a) Payroll records. From the last date
of entry, all payroll or other records
containing the employee information
and data required under any of the applicable sections of this part, and
(b) Certificates, agreements, plans, notices, etc. From their last effective date,
all written:
(1) Collective bargaining agreements
relied upon for the exclusion of certain
costs under section 3(m) of the Act,
(2) Collective bargaining agreements,
under section 7(b)(1) or 7(b)(2) of the
Act, and any amendments or additions
thereto,
(3) Plans, trusts, employment contracts, and collective bargaining agreements under section 7(e) of the Act,
(4) Individual contracts or collective
bargaining agreements under section
7(f) of the Act. Where such contracts or
agreements are not in writing, a written memorandum summarizing the
terms of each such contract or agreement,
(5) Written agreements or memoranda summarizing the terms of oral
agreements or understandings under
section 7(g) or 7(j) of the Act, and
(6) Certificates and notices listed or
named in any applicable section of this
part.
(c) Sales and purchase records. A
record of (1) total dollar volume of
sales or business, and (2) total volume
of goods purchased or received during
such periods (weekly, monthly, quarterly, etc.), in such form as the employer maintains records in the ordinary course of business.
§ 516.6 Records to be preserved 2
years.
(a) Supplementary basic records:
Each employer required to maintain
records under this part shall preserve
for a period of at least 2 years.
(1) Basic employment and earnings
records. From the date of last entry, all
basic time and earning cards or sheets
on which are entered the daily starting
and stopping time of individual employees, or of separate work forces, or
the amounts of work accomplished by
individual employees on a daily, weekly, or pay period basis (for example,
units produced) when those amounts
determine in whole or in part the pay
period earnings or wages of those employees.
(2) Wage rate tables. From their last
effective date, all tables or schedules of
the employer which provide the piece
rates or other rates used in computing
straight-time earnings, wages, or salary, or overtime pay computation.
(b) Order, shipping, and billing
records: From the last date of entry,
the originals or true copies of all customer orders or invoices received, incoming or outgoing shipping or delivery records, as well as all bills of lading
and all billings to customers (not including individual sales slips, cash register tapes or the like) which the employer retains or makes in the usual
course of business operations.
(c) Records of additions to or deductions from wages paid:
(1) Those records relating to individual employees referred to in
§ 516.2(a)(10) and
(2) All records used by the employer
in determining the original cost, operating and maintenance cost, and depreciation and interest charges, if such
costs and charges are involved in the
additions to or deductions from wages
paid.
§ 516.7 Place for keeping records and
their availability for inspection.
(a) Place of records. Each employer
shall keep the records required by this
part safe and accessible at the place or
places of employment, or at one or
more established central recordkeeping
offices where such records are customarily maintained. Where the records
are maintained at a central recordkeeping office, other than in the place
or places of employment, such records
shall be made available within 72 hours
following notice from the Administrator or a duly authorized and designated representative.
(b) Inspection of records. All records
shall be available for inspection and
transcription by the Administrator or
a duly authorized and designated representative.
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§ 516.8
§ 516.8
29 CFR Ch. V (7–1–19 Edition)
§ 516.10
Computations and reports.
Each employer required to maintain
records under this part shall make
such extension, recomputation, or
transcription of the records and shall
submit to the Wage and Hour Division
such reports concerning persons employed and the wages, hours, and other
conditions and practices of employment set forth in the records as the Administrator or a duly authorized and
designated representative may request
in writing.
§ 516.9
Petitions for exceptions.
(a) Submission of petitions for relief.
Any employer or group of employers
who, due to peculiar conditions under
which they must operate, desire authority to maintain records in a manner other than required in this part, or
to be relieved of preserving certain
records for the period specified in this
part, may submit a written petition to
the Administrator requesting such authority, setting forth the reasons
therefor.
(b) Action on petitions. If, after review
of the petition, the Administrator finds
that the authority requested will not
hinder enforcement of the Act, the Administrator may grant such authority
limited by any conditions determined
necessary and subject to subsequent
revocation. Prior to revocation of such
authority because of noncompliance
with any of the prescribed conditions,
the employer will be notified of the
reasons and given an opportunity to
come into compliance.
(c) Compliance after submission of petitions. The submission of a petition or
the delay of the Administrator in acting upon such petition will not relieve
any employer or group of employers
from any obligations to comply with
all the applicable requirements of the
regulations in this part. However, the
Administrator will provide a response
to all petitions as soon as possible.
[Reserved]
Subpart B—Records Pertaining to
Employees Subject to Miscellaneous Exemptions Under
the Act; Other Special Requirements
§ 516.11 Employees exempt from both
minimum wage and overtime pay
requirements under section 13(a)
(2), (3), (4), (5), (8), (10), (12), or 13(d)
of the Act.
With respect to each and every employee exempt from both the minimum
wage and overtime pay requirements of
the Act pursuant to the provisions of
section 13(a) (2), (3), (4), (5), (8), (10),
(12), or 13(d) of the Act, employers shall
maintain and preserve records containing the information and data required by § 516.2(a) (1) through (4).
§ 516.12 Employees exempt from overtime pay requirements pursuant to
section 13(b) (1), (2), (3), (5), (9), (10),
(15), (16), (17), (20), (21), (24), (27), or
(28) of the Act.
With respect to each employee exempt from the overtime pay requirements of the Act pursuant to the provisions of section 13(b) (1), (2), (3), (5), (9),
(10), (15), (16), (17), (20), (21), (24), (27), or
(28) of the Act, shall maintain and preserve payroll or other records, containing all the information and data
required by § 516.2(a) except paragraphs
(a) (6) and (9) and, in addition, information and data regarding the basis on
which wages are paid (such as the monetary amount paid, expressed as earnings per hour, per day, per week, etc.).
§ 516.13 Livestock auction employees
exempt from overtime pay requirements under section 13(b)(13) of the
Act.
With respect to each employee exempt from the overtime pay requirements of the Act pursuant to section
13(b)(13), the employer shall maintain
and preserve records containing the information and data required by
§ 516.2(a) except paragraphs (a) (6) and
(9) and, in addition, for each workweek
in which the employee is employed
both in agriculture and in connection
with livestock auction operations:
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§ 516.17
(a) The total number of hours worked
by each such employee,
(b) The total number of hours in
which the employee was employed in
agriculture and the total number of
hours employed in connection with
livestock auction operations, and
(c) The total straight-time earnings
for employment in livestock auction
operations.
§ 516.14 Country elevator employees
exempt from overtime pay requirements under section 13(b)(14) of the
Act.
(a) With respect to each employee exempt from the overtime pay requirements of the Act pursuant to section
13(b)(14), the employer shall maintain
and preserve records containing the information and data required by
§ 516.2(a) except paragraphs (a) (6) and
(9) and, in addition, for each workweek,
the names and occupations of all persons employed in the country elevator,
whether or not covered by the Act, and
(b) Information demonstrating that
the ‘‘area of production’’ requirements
of part 536 of this chapter are met.
§ 516.15 Local delivery employees exempt from overtime pay requirements pursuant to section 13(b)(11)
of the Act.
With respect to each employee exempt from the overtime pay requirements of the Act pursuant to section
13(b)(11), the employer shall maintain
and preserve payroll or other records,
containing all the information and
data required by § 516.2(a) except paragraphs (a) (6) and (9) and, in addition,
information and data regarding the
basis on which wages are paid (such as
the dollar amount paid per trip; the
dollar amount of earnings per week
plus 3 percent commission on all cases
delivered). Records shall also contain
the following information:
(a) A copy of the Administrator’s
finding under part 551 of this chapter
with respect to the plan under which
such employees are compensated;
(b) A statement or description of any
changes made in the trip rate or other
delivery payment plan of compensation
for such employees since its submission
for such finding;
(c) Identification of each employee
employed pursuant to such plan and
the work assignments and duties; and
(d) A computation for each quarteryear of the average weekly hours of
full-time employees employed under
the plan during the most recent representative annual period as described
in § 551.8(g) (1) and (2) of this chapter.
§ 516.16 Commission employees of a retail or service establishment exempt from overtime pay requirements pursuant to section 7(i) of
the Act.
With respect to each employee of a
retail or service establishment exempt
from the overtime pay requirements of
the Act pursuant to the provisions of
section 7(i), employers shall maintain
and preserve payroll and other records
containing all the information and
data required by § 516.2(a) except paragraphs (a) (6), (8), (9), and (11), and in
addition:
(a) A symbol, letter or other notation
placed on the payroll records identifying each employee who is paid pursuant to section 7(i).
(b) A copy of the agreement or understanding under which section 7(i) is
utilized or, if such agreement or understanding is not in writing, a memorandum summarizing its terms including the basis of compensation, the applicable representative period and the
date the agreement was entered into
and how long it remains in effect. Such
agreements or understandings, or summaries may be individually or collectively drawn up.
(c) Total compensation paid to each
employee each pay period (showing
separately the amount of commissions
and the amount of noncommission
straight-time earnings).
§ 516.17 Seamen exempt from overtime
pay requirements pursuant to section 13(b)(6) of the Act.
With respect to each employee employed as a seaman and exempt from
the overtime pay requirements of the
Act pursuant to section 13(b)(6), the
employer shall maintain and preserve
payroll or other records, containing all
the information required by § 516.2(a)
except paragraphs (a) (5) through (9)
and, in addition, the following:
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§ 516.18
29 CFR Ch. V (7–1–19 Edition)
(a) Basis on which wages are paid
(such as the dollar amount paid per
hour, per day, per month, etc.)
(b) Hours worked each workday and
total hours worked each pay period (for
purposes of this section, a ‘‘workday’’
shall be any fixed period of 24 consecutive hours; the ‘‘pay period’’ shall be
the period covered by the wage payment, as provided in section 6(a)(4) of
the Act),
(c) Total straight-time earnings or
wages for each such pay period, and
(d) The name, type, and documentation, registry number, or other identification of the vessel or vessels upon
which employed.
§ 516.18 Employees employed in certain tobacco, cotton, sugar cane or
sugar beet services, who are partially exempt from overtime pay requirements pursuant to section
7(m), 13(h), 13(i) or 13(j) of the Act.
With respect to each employee providing services in connection with certain types of green leaf or cigar leaf tobacco, cotton, cottonseed, cotton ginning, sugar cane, sugar processing or
sugar beets who are partially exempt
from the overtime pay requirements of
the Act pursuant to 7(m), 13(h), 13(i) or
13(j), the employer shall, in addition to
the records required in § 516.2, maintain
and preserve a record of the daily and
weekly overtime compensation paid.
Also, the employer shall note in the
payroll records the beginning date of
each workweek during which the establishment operates under the particular
exemption.
§ 516.19
[Reserved]
§ 516.20 Employees under certain collective bargaining agreements who
are partially exempt from overtime
pay requirements as provided in
section 7(b)(1) or section 7(b)(2) of
the Act.
(a) The employer shall maintain and
preserve all the information and data
required by § 516.2 and shall record
daily as well as weekly overtime compensation for each employee employed:
(1) Pursuant to an agreement, made
as a result of collective bargaining by
representatives of employees certified
as bona fide by the National Labor Relations Board, which provides that no
employees shall be employed more
than 1,040 hours during any period of 26
consecutive weeks as provided in section 7(b)(1) of the Act, or
(2) Pursuant to an agreement, made
as a result of collective bargaining by
representatives of employees certified
as bona fide by the National Labor Relations Board, which provides that the
employee shall be employed not more
than 2,240 hours during a specified period of 52 consecutive weeks and shall
be guaranteed employment as provided
in section 7(b)(2) of the Act.
(b) The employer shall also keep copies of such collective bargaining agreement and such National Labor Relations Board certification as part of the
records and shall keep a copy of each
amendment or addition thereto.
(c) The employer shall also make and
preserve a record, either separately or
as a part of the payroll:
(1) Listing each employee employed
pursuant to each such collective bargaining agreement and each amendment and addition thereto.
(2) Indicating the period or periods
during which the employee has been or
is employed pursuant to an agreement
under section 7(b)(1) or 7(b)(2) of the
Act, and
(3) Showing the total hours worked
during any period of 26 consecutive
weeks, if the employee is employed in
accordance with section 7(b)(1) of the
Act, or during the specified period of 52
consecutive weeks, if employed in accordance with section 7(b)(2) of the
Act.
§ 516.21 Bulk petroleum employees
partially exempt from overtime pay
requirements pursuant to section
7(b)(3) of the Act.
With respect to each employee partially exempt from the overtime provisions of the Act pursuant to section
7(b)(3), the employer shall maintain
and preserve records containing all the
information and data required by
§ 516.2(a), and, in addition, shall record
the daily as well as the weekly overtime compensation paid to the employees, the rate per hour and the total pay
for time worked between the 40th and
56th hour of the workweek.
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Wage and Hour Division, Labor
§ 516.25
§ 516.22 Employees engaged in charter
activities of carriers pursuant to
section 7(n) of the Act.
With respect to each employee employed in charter activities for a
street, suburban or interurban electric
railway or local trolley or motorbus
carrier pursuant to section 7(n) of the
Act, the employer shall maintain and
preserve records containing all the information and data required by
§ 516.2(a) and, in addition, the following:
(a) Hours worked each workweek in
charter activities; and
(b) A copy of the employment agreement or understanding stating that in
determining the hours of employment
for overtime pay purposes, the hours
spent by the employee in charter activities will be excluded and, also, the
date this agreement or understanding
was entered into.
§ 516.23 Employees of hospitals and
residential care facilities compensated for overtime work on the
basis of a 14-day work period pursuant to section 7(j) of the Act.
With respect to each employee of
hospitals and institutions primarily
engaged in the care of the sick, the
aged, or mentally ill or defective who
reside on the premises compensated for
overtime work on the basis of a work
period of 14 consecutive days pursuant
to an agreement or understanding
under section 7(j) of the Act, employers
shall maintain and preserve.
(a) The records required by § 516.2 except paragraphs (a) (5) and (7) through
(9), and in addition:
(1) Time of day and day of week on
which the employee’s 14-day work period begins,
(2) Hours worked each workday and
total hours worked each 14-day work
period,
(3) Total straight-time wages paid for
hours worked during the 14-day period,
(4) Total overtime excess compensation paid for hours worked in excess of
8 in a workday and 80 in the work period.
(b) A copy of the agreement or understanding with respect to using the 14day period for overtime pay computations or, if such agreement or understanding is not in writing, a memo-
randum summarizing its terms and
showing the date it was entered into
and how long it remains in effect.
§ 516.24 Employees employed under
section 7(f) ‘‘Belo’’ contracts.
With respect to each employee to
whom both sections 6 and 7(f) of the
Act apply, the employer shall maintain
and preserve payroll or other records
containing all the information and
data required by § 516.2(a) except paragraphs (a) (8) and (9), and, in addition,
the following:
(a) Total weekly guaranteed earnings,
(b) Total weekly compensation in excess of weekly guaranty,
(c) A copy of the bona fide individual
contract or the agreement made as a
result of collective bargaining by representatives of employees, or where
such contract or agreement is not in
writing, a written memorandum summarizing its terms.
§ 516.25 Employees paid for overtime
on the basis of ‘‘applicable’’ rates
provided in sections 7(g)(1) and
7(g)(2) of the Act.
With respect to each employee compensated for overtime work in accordance with section 7(g)(1) or 7(f)(2) of the
Act, employers shall maintain and preserve records containing all the information and data required by § 516.2(a)
except paragraphs (a) (6) and (9) and, in
addition, the following:
(a)(1) Each hourly or piece rate at
which the employee is employed, (2)
basis on which wages are paid, and (3)
the amount and nature of each payment which, pursuant to section 7(e) of
the Act, is excluded from the ‘‘regular
rate,’’
(b) The number of overtime hours
worked in the workweek at each applicable hourly rate or the number of
units of work performed in the workweek at each applicable piece rate during the overtime hours,
(c) Total weekly overtime compensation at each applicable rate which is
over and above all straight-time earnings or wages earned during overtime
worked,
(d) The date of the agreement or understanding to use this method of compensation and the period covered. If the
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§ 516.26
29 CFR Ch. V (7–1–19 Edition)
employee is part of a workforce or employed in or by an establishment all of
whose workers have agreed to use this
method of compensation a single notation of the date of the agreement or
understanding and the period covered
will suffice.
of and showing the date and period covered by the oral agreement or understanding to use this method of computation. If the employee is one of a
group, all of whom have agreed to use
this method of computation, a single
memorandum will suffice.
§ 516.26 Employees paid for overtime
at premium rates computed on a
‘‘basic’’ rate authorized in accordance with section 7(g)(3) of the Act.
§ 516.27 ‘‘Board, lodging, or other facilities’’ under section 3(m) of the
Act.
With respect to each employee compensated for overtime hours at a
‘‘basic’’ rate which is substantially
equivalent to the employee’s average
hourly earnings, as authorized in accordance with section 7(g)(3) of the Act
and part 548 of this chapter, employers
shall maintain and preserve records
containing all the information and
data required by § 516.2 except paragraph (a)(6) thereof and, in addition,
the following:
(a)(1) The hourly rates, piece rates,
or commission rates applicable to each
type of work performed by the employee,
(2) The computation establishing the
basic rate at which the employee is
compensated for overtime hours (if the
employee is part of a workforce or employed in or by an establishment all of
whose workers have agreed to accept
this method of compensation, a single
entry of this computation will suffice),
(3) The amount and nature of each
payment which, pursuant to section
7(e) of the Act, is excluded from the
‘‘regular rate.’’
(b)(1) Identity of representative period for computing the basic rate, (2)
the period during which the established
basic rate is to be used for computing
overtime compensation, (3) information which establishes that there is no
significant difference between the pertinent terms, conditions and circumstances of employment in the period selected for the computation of
the basic rate and those in the period
for which the basic rate is used for
computing overtime compensation,
which could affect the representative
character of the period from which the
basic rate is derived.
(c) A copy of the written agreement
or, if there is no such agreement, a
memorandum summarizing the terms
(a) In addition to keeping other
records required by this part, an employer who makes deductions from the
wages of employees for ‘‘board, lodging,
or other facilities’’ (as these terms are
used in sec. 3(m) of the Act) furnished
to them by the employer or by an affiliated person, or who furnishes such
‘‘board, lodging, or other facilities’’ to
employees as an addition to wages,
shall maintain and preserve records
substantiating the cost of furnishing
each class of facility except as noted in
paragraph (c) of this section. Separate
records of the cost of each item furnished to an employee need not be
kept. The requirements may be met by
keeping combined records of the costs
incurred in furnishing each class of facility, such as housing, fuel, or merchandise furnished through a company
store or commissary. Thus, in the case
of an employer who furnishes housing,
separate cost records need not be kept
for each house. The cost of maintenance, utilities, and repairs for all the
houses may be shown together. Original cost and depreciation records may
be kept for groups of houses acquired
at the same time. Costs incurred in furnishing similar or closely related facilities, moreover, may be shown in
combined records. Where cost records
are kept for a ‘‘class’’ of facility rather
than for each individual article furnished to employees, the records must
also show the gross income derived
from each such class of facility; e.g.,
gross rentals in the case of houses,
total sales through the store or commissary, total receipts from sales of
fuel, etc.
(1) Such records shall include
itemized accounts showing the nature
and amount of any expenditures entering into the computation of the reasonable cost, as defined in part 531 of this
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Wage and Hour Division, Labor
§ 516.29
chapter, and shall contain the data required to compute the amount of the
depreciated investment in any assets
allocable to the furnishing of the facilities, including the date of acquisition
or construction, the original cost, the
rate of depreciation and the total
amount of accumulated depreciation
on such assets. If the assets include
merchandise held for sale to employees, the records should contain data
from which the average net investment
in inventory can be determined.
(2)
No
particular
degree
of
itemization is prescribed. However, the
amount of detail shown in these accounts should be consistent with good
accounting practices, and should be
sufficient to enable the Administrator
or authorized representative to verify
the nature of the expenditure and the
amount by reference to the basic
records which must be preserved pursuant to § 516.6(c)(2).
(b) If additions to or deductions from
wages paid (1) so affect the total cash
wages due in any workweek (even
though the employee actually is paid
on other than a workweek basis) as to
result in the employee receiving less in
cash than the applicable minimum
hourly wage, or (2) if the employee
works in excess of the applicable maximum hours standard and (i) any additions to the wages paid are a part of
wages, or (ii) any deductions made are
claimed as allowable deductions under
sec. 3(m) of the Act, the employer shall
maintain records showing on a workweek basis those additions to or deductions from wages. (For legal deductions
not claimed under sec. 3(m) and which
need not be maintained on a workweek
basis, see part 531 of this chapter.)
(c) The records specified in this section are not required with respect to an
employee in any workweek in which
the employee is not subject to the
overtime provisions of the Act and receives not less than the applicable statutory minimum wage in cash for all
hours worked in that workweek. (The
application of section 3(m) of the Act
in nonovertime weeks is discussed in
part 531 of this chapter.)
§ 516.28 Tipped employees.
(a) With respect to each tipped employee whose wages are determined
pursuant to section 3(m) of the Act, the
employer shall maintain and preserve
payroll or other records containing all
the information and data required in
§ 516.2(a) and, in addition, the following:
(1) A symbol, letter or other notation
placed on the pay records identifying
each employee whose wage is determined in part by tips.
(2) Weekly or monthly amount reported by the employee, to the employer, of tips received (this may consist of reports made by the employees
to the employer on IRS Form 4070).
(3) Amount by which the wages of
each tipped employee have been
deemed to be increased by tips as determined by the employer (not in excess of the difference between $2.13 and
the applicable minimum wage specified
in section 6(a)(1) of the Act). The
amount per hour which the employer
takes as a tip credit shall be reported
to the employee in writing each time it
is changed from the amount per hour
taken in the preceding week.
(4) Hours worked each workday in
any occupation in which the employee
does not receive tips, and total daily or
weekly straight-time payment made by
the employer for such hours.
(5) Hours worked each workday in occupations in which the employee receives tips, and total daily or weekly
straight-time earnings for such hours.
(b) [Reserved]
[52 FR 24896, July 1, 1987, as amended at 76
FR 18854, Apr. 5, 2011]
§ 516.29 Employees employed by a private entity operating an amusement
or recreational establishment located in a national park or national
forest or on land in the National
Wildlife Refuge System who are
partially exempt from overtime pay
requirements pursuant to section
13(b)(29) of the Act.
With respect to each employee who is
partially exempt from the overtime
pay requirements of the Act pursuant
to section 13(b)(29), the employer shall
maintain and preserve the records required in § 516.2, except that the record
of the regular hourly rate of pay in
§ 516.2(a)(6) shall be required only in a
workweek when overtime compensation is due under section 13(b)(29).
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§ 516.30
29 CFR Ch. V (7–1–19 Edition)
§ 516.30 Learners, apprentices, messengers, students, or handicapped
workers employed under special
certificates as provided in section
14 of the Act.
(a) With respect to persons employed
as learners, apprentices, messengers or
full-time students employed outside of
their school hours in any retail or service establishment in agriculture, or in
institutions of higher education, or
handicapped workers employed at special minimum hourly rates under Special Certificates pursuant to section 14
of the Act, employers shall maintain
and preserve records containing the
same information and data required
with respect to other employees employed in the same occupations.
(b) In addition, each employer shall
segregate on the payroll or pay records
the names and required information
and data with respect to those learners, apprentices, messengers, handicapped workers and students, employed
under Special Certificates. A symbol or
letter may be placed before each such
name on the payroll or pay records indicating that that person is a ‘‘learner,’’ ‘‘apprentice,’’ ‘‘messenger,’’ ‘‘student,’’ or ‘‘handicapped worker,’’ employed under a Special Certificate.
§ 516.31 Industrial homeworkers.
(a)
Definitions—(1)
Industrial
homeworker and homeworker, as used in
this section, mean any employee employed or suffered or permitted to perform industrial homework for an employer.
(2) Industrial homework, as used in
this section, means the production by
any person in or about a home, apartment, tenement, or room in a residential establishment of goods for an employer who suffers or permits such production, regardless of the source
(whether obtained from an employer or
elsewhere) of the materials used by the
homeworker in such production.
(3) The meaning of the terms person,
employ, employer, employee, goods,
and production as used in this section
is the same as in the Act.
(b) Items required. In addition to all of
the records required by § 516.2, every
employer of homeworkers shall maintain and preserve payroll or other
records containing the following infor-
mation and data with respect to each
and every industrial homeworker employed (excepting those homeworkers
to whom section 13(d) of the Act applies and those homeworkers in Puerto
Rico to whom part 545 of this chapter
applies, or in the Virgin Islands to
whom part 695 of this chapter applies):
(1) With respect to each lot of work:
(i) Date on which work is given out
to worker, or begun by worker, and
amount of such work given out or
begun;
(ii) Date on which work is turned in
by worker, and amount of such work;
(iii) Kind of articles worked on and
operations performed;
(iv) Piece rates paid;
(v) Hours worked on each lot of work
turned in;
(vi) Wages paid for each lot of work
turned in.
(2) With respect to any agent, distributor, or contractor: The name and
address of each such agent, distributor,
or contractor through whom homework
is distributed or collected and the
name and address of each homeworker
to whom homework is distributed or
from whom it is collected by each such
agent, distributor, or contractor.
(c) Homeworker handbook. In addition
to the information and data required in
paragraph (b) of this section, a separate handbook (to be obtained by the
employer from the Wage and Hour Division and supplied by such employer
to each worker) shall be kept for each
homeworker. The employer is required
to insure that the hours worked and
other information required therein is
entered by the homeworker when work
is performed and/or business-related
expenses are incurred. This handbook
must remain in the possession of the
homeworker except at the end of each
pay period when it is to be submitted
to the employer for transcription of
the hours worked and other required
information and for computation of
wages to be paid. The handbooks shall
include
a
provision
for
written
verification by the employer attesting
that the homeworker was instructed to
accurately record all of the required
information
regarding
such
homeworker’s employment, and that,
to the best of his or her knowledge and
belief, the information was recorded
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Wage and Hour Division, Labor
§ 516.33
accurately. Once no space remains in
the handbook for additional entries, or
upon termination of the homeworker’s
employment, the handbook shall be returned to the employer. The employer
shall then preserve this handbook for
at least two years and make it available for inspection by the Wage and
Hour Division on request.
[52 FR 24896, July 1, 1987, as amended at 53
FR 45726, Nov. 10, 1988]
§ 516.32
[Reserved]
§ 516.33 Employees employed in agriculture pursuant to section 13(a)(6)
or 13(b)(12) of the Act.
(a) No records, except as required
under paragraph (f) of this section,
need be maintained by an employer
who did not use more than 500 mandays 1 of agricultural labor in any quarter of the preceding calendar year, unless it can reasonably be anticipated
that more than 500 man-days of agricultural labor will be used in at least
one calendar quarter of the current calendar year. The 500 man-day test includes the work of agricultural workers supplied by crew leaders, or farm
labor contractors, if the farmer is an
employer of such workers, or a joint
employer of such workers with the
crew leader or farm labor contractor.
However, members of the employer’s
immediate family are not included. (A
‘‘man-day’’ is any day during which an
employee does agricultural work for 1
hour or more.)
(b) If it can reasonably be anticipated
that the employer will use more than
500 man-days of agricultural labor in at
least one calendar quarter of the current calendar year, the employer shall
maintain and preserve for each employee records containing all the information and data required by § 516.2(a)
(1), (2) and (4) and, in addition, the following:
(1) Symbols or other identifications
separately designating those employees who are
(i) Members of the employer’s immediate family as defined in section
13(a)(6)(B) of the Act,
1 Sections 3(u) and 13(a)(6) of the Fair
Labor Standards Act (29 U.S.C. 201 et seq.) set
forth and define the term ‘‘man-day.’’
(ii) Hand harvest laborers as defined
in section 13(a)(6) (C) or (D), and
(iii) Employees principally engaged
in the range production of livestock as
defined in section 13(a)(6)(E).
(2) For each employee, other than
members of the employer’s immediate
family, the number of man-days
worked each week or each month.
(c) For the entire year following a
year in which the employer used more
than 500 man-days of agricultural labor
in any calendar quarter, the employer
shall maintain, and preserve in accordance with §§ 516.5 and 516.6, for each
covered employee (other than members
of the employer’s immediate family,
hand harvest laborers and livestock
range employees as defined in sections
13(a)(6) (B), (C), (D), and (E) of the Act)
records containing all the information
and data required by § 516.2(a) except
paragraphs (a) (3) and (8).
(d) In addition to other required
items, the employer shall keep on file
with respect to each hand harvest laborer as defined in section 13(a)(6)(C) of
the Act for whom exemption is taken,
a statement from each such employee
showing the number of weeks employed
in agriculture during the preceding calendar year.
(e) With respect to hand harvest laborers as defined in section 13(a)(6)(D),
for whom exemption is taken, the employer shall maintain in addition to
paragraph (b) of this section, the minor’s date of birth and name of the minor’s parent or person standing in
place of the parent.
(f) Every employer (other than parents or guardians standing in the place
of parents employing their own child or
a child in their custody) who employs
in agriculture any minor under 18
years of age on days when school is in
session or on any day if the minor is
employed in an occupation found to be
hazardous by the Secretary shall maintain and preserve records containing
the following data with respect to each
and every such minor so employed:
(1) Name in full,
(2) Place where minor lives while employed. If the minor’s permanent address is elsewhere, give both addresses,
(3) Date of birth.
(g) Where a farmer and a bona fide
independent contractor or crew leader
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§ 516.34
29 CFR Ch. V (7–1–19 Edition)
are joint employers of agricultural laborers, each employer is responsible for
maintaining and preserving the records
required by this section. Duplicate
records of hours and earnings are not
required. The requirements will be considered met if the employer who actually pays the employees maintains and
preserves the records specified in paragraphs (c) and (f) of this section.
§ 516.34 Exemption from overtime pay
for time spent by certain employees
receiving remedial education pursuant to section 7(q) of the Act.
With respect to each employee exempt from the overtime pay requirements of the Act for time spent receiving remedial education pursuant to
section 7(q) of the Act and § 778.603 of
this title, the employer shall maintain
and preserve records containing all the
information and data required by § 516.2
and, in addition, shall also make and
preserve a record, either separately or
as a notation on the payroll, showing
the hours spent each workday and
total hours each workweek that the
employee is engaged in receiving such
remedial education that does not include any job-specific training but that
is designed to provide reading and
other basic skills at or below the
eighth-grade level or to fulfill the requirements for a high school diploma
(or General Educational Development
certificate), and the compensation (at
not less than the employee’s regular
rate of pay) paid each pay period for
the time so engaged.
[56 FR 61101, Nov. 29, 1991]
PART 519—EMPLOYMENT OF FULLTIME STUDENTS AT SUBMINIMUM
WAGES
Subpart A—Retail or Service
Establishments, and Agriculture
Sec.
519.1 Applicability of the regulations in this
subpart.
519.2 Definitions.
519.3 Application for a full-time student
certificate.
519.4 Procedure for action upon an application.
519.5 Conditions governing issuance of fulltime student certificates.
519.6 Terms and conditions of employment
under full-time student certificates and
under temporary authorization.
519.7 Records to be kept.
519.8 Amendment or replacement of a fulltime student certificate.
519.9 Reconsideration and review.
Subpart B—Institutions of Higher Education
519.11 Applicability of the regulations in
this subpart.
519.12 Definitions.
519.13 Application for a full-time student
certificate.
519.14 Procedure for action upon an application.
519.15 Conditions governing issuance of fulltime student certificates.
519.16 Terms and conditions of employment
under full-time student certificates and
under temporary authorization.
519.17 Records to be kept.
519.18 Amendment or replacement of a fulltime student certificate.
519.19 Reconsideration and review.
AUTHORITY: Secs. 11 and 14, 52 Stat. 1068;
sec. 11, 75 Stat. 74; secs. 501 and 602, 80 Stat.
843, 844 (29 U.S.C. 211, 214).
SOURCE: 40 FR 6329, Feb. 11, 1975, unless
otherwise noted.
Subpart A—Retail or Service
Establishments, and Agriculture
§ 519.1 Applicability of the regulations
in this subpart.
(a) Statutory provisions. Under section
14 of the Fair Labor Standards Act of
1938, as amended, and the authority
and responsibility delegated to him/her
by the Secretary of Labor (36 FR 8755)
and by the Assistant Secretary for Employment Standards (39 FR 33841) the
Administrator of the Wage and Hour
Division is authorized and directed, to
the extent necessary in order to prevent curtailment of opportunities for
employment, to provide by regulation
or order for the employment, under
certificates, of full-time students in retail or service establishments, or in agriculture. That section contains provisions requiring a wage rate in such certificates of not less than 85 percent of
the minimum wage applicable under
section 6 of the Act, limiting weekly
hours of employment, stipulating compliance with the applicable child-labor
standards, and safeguarding against
the reduction of the full-time employment opportunities of employees other
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§ 519.2
than full-time students employed
under certificates.
(b) Source of limitations. Some of the
limitations in this subpart are specifically required in section 14(b) of the
Act. The other limitations implement
the provisions in that section relating
to employment opportunities, i.e., the
‘‘extent necessary to prevent curtailment of opportunities for employment’’
and the avoidance of a ‘‘substantial
probability of reducing the full-time
employment opportunities of persons
other than those to whom the minimum wage rate authorized’’ under section 14(b) is applicable.
[40 FR 6329, Feb. 11, 1975; 40 FR 22546, May 23,
1975]
§ 519.2 Definitions.
(a) Full-time students. A full-time student for the purpose of this subpart is
defined as a student who receives primarily daytime instruction at the
physical location of a bona fide educational institution, in accordance
with the institution’s accepted definition of a full-time student. A full-time
student retains that status during the
student’s Christmas, summer and other
vacations. An individual who was such
a student immediately prior to vacation will be presumed not to have discontinued such status during vacation
if local law requires his/her attendance
at the end of the vacation. In the absence of such requirement his/her status during vacation will be governed by
his/her intention as last communicated
to his/her employer. The phrase in section 14(b) of the statute ‘‘regardless of
age but in compliance with applicable
child-labor laws,’’ among other things,
restricts the employment in a retail or
service establishment to full-time students who are at least 14 years of age
because of the application of section
3(1) of the Act. There is a minimum age
requirement of 16 years in agriculture
for employment during school hours
and in any occupation declared hazardous by the Secretary of Labor (subpart E–1 of part 570 of this title.) In addition, there is a minimum age restriction of 14 years generally for employment in agriculture of a full-time student outside school hours for the
school district where such employee is
living while so employed, except (1) Mi-
nors 12 or 13 years of age may be employed with written parental or guardian consent or they may work on farms
where their parents or guardians are
employed, and (2) minors under 12 may
work on farms owned or operated by
their parents or with parental or
guardian consent on farms whose employees are exempt from section 6 by
section 13 (a)(6)(A) of the Act.
(b) Bona fide educational institution. A
bona fide educational institution is ordinarily an accredited institution. However, a school which is not accredited
may be considered a bona fide educational institution in exceptional circumstances, such as when the school is
too recently established to have received accreditation.
(c) Retail or service establishment. Retail or service establishment means a retail or service establishment as defined
in section 13(a)(2) of the Fair Labor
Standards Act. The statutory definition is interpreted in part 779 of this
chapter.
(d) Agriculture. Agriculture means agriculture as defined in section 3(f) of
the Fair Labor Standards Act. The
statutory definition is interpreted in
part 780 of this chapter.
(e) Student hours of employment. Student hours of employment means hours
during which students are employed
under full-time student certificates
issued under this part and is distinguished from hours of employment of students.
(f) Employer. Section 519.4 permits an
agricultural or retail or service establishment employer to employ not more
than six full-time students at subminimum wages on forwarding an application but before certification. For this
purpose, the term employer looks to the
highest structure of ownership or control, and hence may be more than a
single retail or service establishment
or farm, e.g., the controlling conglomerate or enterprise would be the employer. With respect to public employers who operate retail or service establishments (see 29 CFR part 779), the employer means the highest structure of
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§ 519.3
29 CFR Ch. V (7–1–19 Edition)
control such as the State, municipality, county or other political subdivision.
[40 FR 6329, Feb. 11, 1975, as amended at 42
FR 58745, Nov. 11, 1977; 43 FR 29000, July 5,
1978]
§ 519.3 Application for a full-time student certificate.
(a) Whenever the employment of fulltime students working outside of
school hours in agriculture or in a retail or service establishment at wages
lower than the minimum applicable
under section 6 of the Fair Labor
Standards Act is believed to be necessary to prevent curtailment of opportunities for employment and employment of them will not create a substantial probability of reducing the fulltime employment opportunities of the
other workers, an application for a certificate may be filed by their employer
with the appropriate Regional Office of
the Wage and Hour Division (or the
Denver, Colorado Area Office for Colorado, North Dakota, and South Dakota;
the Salt Lake City, Utah area Office
for Montana, Utah, and Wyoming; and
the Caribbean Office for the area it
covers). Such application shall be
signed by an authorized representative
of the employer.
(b) The application must be filed in
duplicate on official forms or exact
copies thereof. The forms are available
at the offices mentioned in paragraph
(a) of this section. The application
must contain the information as to the
type of products sold or services rendered by the establishment, hours of
employment during the preceding
twelve-month period or data from previous certificates (or applications) as
pertinent to the application, and other
information for which request is made
on the form.
(c) Separate application must be
made for each farm or establishment in
which authority to employ full-time
students at subminimum wage rates is
sought.
(d) Application for renewal of a certificate shall be made either on the
same type of form as is used for a new
application or on an alternate official
form. No certificate in effect shall expire until action on such an application
shall have been finally determined,
provided that such application has
been properly executed, and is received
by the office specified in paragraph (a)
of this section not less than 15 nor
more than 30 days prior to the expiration date. A properly executed application is one which fully and accurately
contains the information required on
the form, and the required certification
by an authorized representative of the
employer.
§ 519.4 Procedure for action upon an
application.
(a) Under certain conditions, an agricultural or retail or service establishment employer may obtain temporary
authorization to employ full-time students at subminimum wages. These
conditions are: (1) Attestation by the
employer that he/she will employ no
more than six full-time students at
subminimum wages on any workday
and that the employment of such students will not reduce the full-time employment opportunities of other persons, and (2) forwarding a properly
completed application to the Wage and
Hour Division not later than the start
of such employment, and (3) posting a
notice of such filing at the place(s)
specified in paragraph (a) of § 519.6 of
this subpart, and (4) compliance during
the temporary authorization period
with the requirements set forth in
paragraphs (b) and (j) through (o) of
§ 519.6 of this subpart.
(b) Temporary authorization under
the conditions set forth in paragraph
(a) of this section is effective from the
date the application is forwarded to the
Wage and Hour Division in conformance with § 519.3 of this subpart. This
authorization shall continue in effect
for one year from the date of forwarding of the application unless,
within 30 days the Administrator or
his/her authorized representative denies the application, issues a certificate with modified terms and conditions, or expressly extends the 30-day
period of review.
(c) Upon receipt of an application for
a certificate, the officer authorized to
act upon such application shall issue a
certificate if the terms and conditions
specified in this subpart are satisfied.
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Wage and Hour Division, Labor
§ 519.6
To the extent he/she deems appropriate, the authorized officer may provide an opportunity to other interested
persons to present data, views, or argument on the application prior to granting or denying a certificate.
(d) Until April 30, 1976, if a certificate
is issued, there shall be published in
the FEDERAL REGISTER a general statement of the terms of such certificate
together with a notice that, pursuant
to § 519.9, for 45 days following such
publication any interested person may
file a written request for reconsideration or review. Thereafter, applications and certificates will be available
for examination in accordance with applicable regulations in Washington,
DC, and in the appropriate Regional Office of the Wage and Hour Division (or
the Denver, Colorado Area Office for
Colorado, North Dakota, and South Dakota; the Salt Lake City, Utah Area
Office for Montana, Utah, and Wyoming; and the Caribbean Office for the
area it covers) for establishments in its
area. A period of 60 days will be provided after certificate issuance during
which any interested person may file a
written request for reconsideration or
review.
(e) If a certificate is denied, notice of
such denial shall be sent to the employer, stating the reason or reasons
for the denial. Such denial shall be
without prejudice to the filing of any
subsequent application.
(c) Abnormal labor conditions such
as a strike or lockout do not exist at
the farm or establishment for which a
full-time student certificate is requested.
(d) The data given on the application
are accurate and based on available
records.
(e) The farms or establishments on
whose experience the applicant relies
meet the requirements of paragraph (h)
of § 519.6.
(f) There are no serious outstanding
violations of the provisions of a fulltime student certificate previously
issued to the employer, nor have there
been any serious violations of the Fair
Labor Standards Act (including ChildLabor Regulation No. 3 and the Hazardous Occupations Orders published in
part 570 of this chapter) which provide
reasonable grounds to conclude that
the terms of a certificate may not be
compiled with, if issued.
(g) The subminimum wage rate(s)
proposed to be paid full-time students
under temporary authorization or
under certificate is not less than 85
percent of the minimum wage applicable under section 6 of the Act.
(h) Certificates will not be issued
where such issuance will result in a reduction of the wage rate paid to a current employee, including current student employees.
[40 FR 6329, Feb. 11, 1975, as amended at 42
FR 58745, Nov. 11, 1977]
§ 519.6 Terms and conditions of employment under full-time student
certificates and under temporary
authorization.
(a) A full-time student certificate
will not be issued for a period longer
than 1 year, nor will it be issued retroactively. It shall specify its effective
and expiration dates. A copy of the certificate shall be posted during its effective period in a conspicuous place or
places in the establishment or at the
farm readily visable to all employees,
for example, adjacent to the time clock
or on the bulletin board used for notices to the employees. If temporary
authorization is in effect under paragraph (a) of § 519.4 of this subpart, a notice thereof shall be similarly posted
during the effective period of such authorization.
§ 519.5 Conditions governing issuance
of full-time student certificates.
Certificates authorizing the employment of full-time students at subminimum wage rates shall not be issued
unless the following conditions are
met:
(a) Full-time students are available
for employment at subminimum rates;
the granting of a certificate is necessary in order to prevent curtailment
of opportunities for employment.
(b) The employment of more than six
full-time students by an employer will
not create a substantial probability of
reducing the full-time employment opportunities for persons other than
those employed under such certificates.
[40 FR 6329, Feb. 11, 1975, as amended at 42
FR 58745, Nov. 11, 1977]
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§ 519.6
29 CFR Ch. V (7–1–19 Edition)
(b) Full-time students may not be
employed under a certificate at less
than 85 percent of the minimum wage
applicable under section 6 of the Act.
(c) For retail or service establishment employers or agricultural employers, the allowable extent of fulltime student employment under certificates varies depending on whether:
(1) The employer proposes to employ no
more than six full-time students at
subminimum wages on any workday,
(2) the applicant requests authority for
not more than 10 percent of the total
hours of all employees during any
month, or (3) the applicant requests authority for more than 10 percent of the
total hours during any month. (For agricultural employers, the month of
full-time student certificated employment may vary somewhat from the
month in a previous year on which the
certificate is based, depending on seasonal factors.)
(d) Retail or service establishment employers or agricultural employers requesting authorization to employ not more
than six full-time students at subminimum
wages on any workday. An application
from such an applicant provides temporary authorization for the employment of full-time students at subminimum wages: Provided, The conditions
set forth in paragraph (a) of § 519.4 of
this subpart are met. Upon review of
the application by the Administration
or his/her authorized representative,
the extent of the temporary authority
may be modified.
(e) Applicants requesting authorization
for not more than 10 percent of the total
hours of all employees during any month.
For such an applicant, certificates may
authorize the employment of full-time
student at subminimum wages for up
to 10 percent of the total hours of all
employees during any month, regardless of past practice of employing students. (Note: An establishment which
has not previously held a certificate
may be authorized 10 percent of the
total hours of all employees during any
month. Applicants requesting authority under this paragraph need not refer
to paragraphs (f), (g), or (h) of this section.)
(f) Applicants requesting authorization
for more than 10 percent of the total
monthly hours of all employees during
any month with records of hours of employment of students and coverage by the
Act prior to May 1974. For such an applicant, certificates may not authorize
full-time student employment at subminimum wages in excess of the highest ratio under any of these three formulas: (1) The proportion of student
hours of employment (i.e., of full-time
students under certificates) to total
hours of all employees for the corresponding month of the preceding
twelve-month period; (2) the maximum
proportion of student hours of employment to total hours of all employees
(in any corresponding month), applicable to the issuance of full-time student
certificates before May 1974; or (3) 10
percent of the total hours of all employees, during any month. (Note: An
establishment which is entitled to
monthly allowances ranging from 5 to
20 percent may be authorized 10 percent for those months which were less
than 10 percent and retain the higher
allowances for those months above 10
percent.)
(g) Applicants requesting authorization
for more than 10 percent of the total hours
of all employees during any month with
records of hours of employment of students and new coverage under the 1974
Amendments. For such an applicant, the
highest permissible allowance under a
certificate during any month is the
highest ratio under any of these three
formulas:
(1) The proportion of hours of employment of full-time students to total
hours of all employees during the corresponding month from May 1973
through April 1974;
(2) The proportion of student hours of
employment (i.e., of hours of full-time
students under certificates) to total
hours of all employees during the corresponding month of the preceding
twelve-month period (an alternative
which is not applicable to all months of
the year until 12 months after May 1,
1974); or
(3) 10 percent of the total hours of all
employees, during any month. (See
notes under paragraphs (e) and (f) of
this section.)
(h) Applicants requesting authorization
for more than 10 percent of the total hours
of all employees during any month without records of student hours worked. For
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Wage and Hour Division, Labor
§ 519.7
such an applicant, the permissible proportion under certificate of full-time
student hours at subminimum wages to
total hours of all employees is based on
the ‘‘practice’’ during the preceding
twelve-month period of: (1) Similar establishments of the same employer in
the same general metropolitan areas in
which such establishment is located:
(2) similar establishments in the same
or nearby communities if such establishment is not in a metropolitan area;
or (3) other establishments of the same
general character operating in the
community or the nearest comparable
community. (‘‘Practice’’ means either
the certificate allowances or the proportion between the actual student
hours of employment to the total hours
of all employees.)
(i) An overestimate of total hours of
employment of all employees for a current month resulting in the employment of the full-time students in excess of the hours authorized in paragraph (e), (f), (g), or (h) of this section
may be corrected by compensating
them for the difference between the
subminimum wages actually paid and
the applicable minimum under section
6 of the Act for the excess hours. Similarly, if an agricultural employer or a
retail or service establishment employer has authorization to employ no
more than six full-time students at
subminimum wages on any workday
but exceeds that number, the excess
may be corrected by compensating the
additional full-time students for the
difference between the subminimum
wages actually paid and the applicable
minimum under section 6 of the Act.
This additional compensation shall be
paid on the regular payday next after
the end of the period.
(j) Full-time students shall not be
permitted to work at subminimum
wages for more than 8 hours a day, nor
for more than 40 hours a week when
school is not in session, nor more than
20 hours a week when school is in session (apart from a full-time student’s
summer vacation), except that when a
full-day school holiday occurs on a day
when the establishment is open for
business, the weekly limitation on the
maximum number of hours which may
be worked shall be increased by 8 hours
for each such holiday but in no event
shall the 40-hour limitation be exceeded. (Note: School is considered to be in
session for a student attending summer
school.) Whenever a full-time student
is employed for more than 20 hours in
any workweek in conformance with
this paragraph, the employer shall note
in his/her payroll records that school
was not in session during all or part of
that workweek or the student was in
his/her summer vacation.
(k) Neither oppressive child labor as
defined in section 3(1) of the Act and
regulations issued under the Act nor
any other employment in violation of a
Federal, State or local child labor law
or ordinance shall come within the
terms of any certificate issued under
this subpart.
(l) Full-time students shall be employed at subminimum wages under
this subpart only outside of their
school hours, i.e., only outside of the
scheduled hours of instruction of the
individual student, or, in the case of
agriculture, only outside of school
hours for the school district where the
employee is living while so employed,
if the employee is under 16 years of
age.
(m) No full-time student shall be
hired under a full-time student certificate while abnormal labor conditions,
such as a strike or lockout, exist at the
establishment or farm.
(n) No provision of any full-time student certificate shall excuse noncompliance with higher standards applicable to full-time students which
may be established under the WalshHealey Public Contracts Act or any
other Federal law, State law, local ordinance, or union or other agreement.
Thus, certificates issued under this law
have no application to employment
under the Service Contract Act.
(o) No full-time student certificate
shall apply to any employee to whom a
certificate issued under section 14 (a)
or (c) of the Act has application.
[40 FR 6329, Feb. 11, 1975; 40 FR 22546, May 23,
1975, as amended at 42 FR 58745, Nov. 11, 1977]
§ 519.7 Records to be kept.
(a) The employer shall designate
each worker employed as a full-time
student under a full-time student certificate at subminimum wages, as provided under part 516 of this chapter.
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§ 519.8
29 CFR Ch. V (7–1–19 Edition)
(b)(1) In addition to the records required under part 516 of this chapter
and this subpart, the employer shall
keep the records specified in paragraph
(b) (2) and (3) of this section specifically relating to full-time students employed at subminimum wages.
(2) The employer shall obtain at the
time of hiring and keep in his records
information from the school attended
that the employee receives primarily
daytime instruction at the physical location of the school in accordance with
the school’s accepted definition of a
full-time student. During a period between attendance at different schools
not longer than the usual summer vacation, a certificate from the school
next to be attended that the student
has been accepted as a full-time student will satisfy the requirements of
this paragraph (b)(2).
(3) The employer operating any farm
or retail or service establishment shall
maintain records of the monthly hours
of employment of full-time students at
subminimum wages and of the total
hours of employment during the month
of all employees in the establishment
except for those employed in agriculture who come within one of the
other exemptions from the minimum
wage provisions of the Act.
(c) The records required in this section, including a copy of any full-time
student certificate issued, shall be kept
for a period of 3 years at the place and
made available for inspection, both as
provided in part 516 of this chapter.
[40 FR 6329, Feb. 11, 1975; 40 FR 22546, May 23,
1975]
§ 519.8 Amendment or replacement of
a full-time student certificate.
In the absence of an objection by the
employer (which may be resolved in
the manner provided in part 528 of this
chapter), the authorized officer upon
his/her own motion may amend the
provisions of a certificate when it is
necessary by reason of the amendment
of these regulations, or may withdraw
a certificate and issue a replacement
certificate when necessary to correct
omissions or apparent defects in the
original certificate.
§ 519.9 Reconsideration and review.
(a) Within 15 days after being informed of a denial of an application for
a full-time student certificate or within 45 days after FEDERAL REGISTER publication of a statement of the terms of
the certificate granted (subsequent to
April 30, 1976, within 60 days after a
certificate is granted), any person aggrieved by the action of an authorized
officer in denying or granting a certificate may:
(1) File a written request for reconsideration thereof by the authorized officer who made the decision in the first
instance, or
(2) File with the Administrator a
written request for review.
(b) A request for reconsideration
shall be accompanied by a statement of
the additional evidence which the applicant believes may materially affect
the decision and a showing that there
were reasonable grounds for failure to
present such evidence in the original
proceedings.
(c) Any person aggrieved by the reconsideration determination of an authorized officer may, within 15 days
after such determination, file with the
Administrator a written request for review.
(d) A request for review shall be
granted where reasonable grounds for
the review are set forth in the request.
(e) If a request for reconsideration or
review is granted, the authorized officer or the Administrator may, to the
extent he/she deems it appropriate, afford other interested persons an opportunity to present data, views, or argument.
[40 FR 6329, Feb. 11, 1975; 40 FR 22546, May 23,
1975]
Subpart B—Institutions of Higher
Education
§ 519.11 Applicability of the regulations in this subpart.
(a) Statutory provisions. Under section
14 of the Fair Labor Standards Act of
1938, as amended, and the authority
and responsibility delegated to him/her
by the Secretary of Labor (36 FR 8755),
the Administrator of the Wage and
Hour Division is authorized and directed, to the extent necessary in order
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§ 519.13
to prevent curtailment of employment
opportunities for employment, to provide by regulation or order for the employment, under certificates, of fulltime students in institutions of higher
education. That section contains provisions requiring a wage rate in such certificates of not less than 85 percent of
the minimum wage applicable under
section 6 of the Act, limiting weekly
hours of employment, stipulating compliance with the applicable child-labor
standards, and safeguarding against
the reduction of the full-time employment opportunities of employees other
than full-time students employed
under certificates.
(b) Source of limitations. Some of the
limitations expressed in this subpart
are specifically required in section
14(b) of the Act. The other limitations
implement the provisions relating to
employment opportunities, i.e., the
‘‘extent necessary in order to prevent
curtailment of opportunities for employment’’ and the requirement that
the regulations shall ‘‘prescribe standards and requirements to insure that
this paragraph will not create a substantial probability of reducing the
full-time employment opportunities of
persons other than those to whom the
minimum wage rate authorized by’’
section 14(b) of the Act is applicable.
[40 FR 6329, Feb. 11, 1975; 40 FR 22546, May 23,
1975, as amended at 82 FR 2227, Jan. 9, 2017]
§ 519.12 Definitions.
(a) Full-time students. A full-time student for the purpose of this subpart is
defined as one who meets the accepted
definition of a full-time student of the
institution of higher education which
employs him/her. A full-time student
retains that status during the student’s
Christmas, summer and other vacations, even when a student is taking
one or more courses during his/her
summer or other vacation. The phrase
in section 14(b) of the statute ‘‘regardless of age but in compliance with applicable child labor laws’’, among other
things restricts the employment in an
institution of higher education to fulltime students who are at least 14 years
of age because of the application of section 3(1) of the Act.
(b) Institution of higher education. An
institution of higher education is an in-
stitution above the secondary level,
such as a college or university, a junior
college, or a professional school of engineering, law, library science, social
work, etc. It is one that is recognized
by a national accrediting agency or association as determined by the U.S.
Commissioner of Education. Generally,
an institution of higher education: (1)
Admits as regular students only individuals having a certificate of graduation from a high school or the recognized equivalent of such a certificate;
and (2) is legally authorized within a
State to provide a program of education beyond high school; and (3) provides an educational program for which
it normally awards a bachelor’s degree,
or provides not less than a two-year
program which is acceptable for full
credit toward such a degree or offers a
two-year program in engineering,
mathematics, or the physical or biological sciences which is designed to
prepare the student to work as a technician and at a semi-professional level
in engineering, scientific, or other
technological fields which require the
understanding and application of basic
engineering, scientific, or mathematical principles of knowledge.
[40 FR 6329, Feb. 11, 1975; 40 FR 22546, May 23,
1975]
§ 519.13 Application for a full-time student certificate.
(a) Whenever the employment of its
full-time students working in an institution at wages lower than the minimum wage applicable under section 6
of the Fair Labor Standards Act is believed to be necessary to prevent curtailment of opportunities for employment and employment of them will not
create a substantial probability of reducing the full-time employment opportunities of other workers, an application for a certificate may be filed by
their employer with the appropriate
Regional Office of the Wage and Hour
Division (or the Denver, Colorado Area
Office for Colorado, North Dakota and
South Dakota; the Salt Lake City,
Utah Area Office for Montana, Utah
and Wyoming; and the Caribbean Office
for the area it covers). Such an application shall be signed by an authorized
representative of the employer.
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§ 519.14
29 CFR Ch. V (7–1–19 Edition)
(b) The application provided for
under § 519.14 must be filed in duplicate
on official forms or exact copies thereof. The forms are available at the offices mentioned in paragraph (a) of this
section. The application must contain
the information on numbers of fulltime students and full-time employees
(other than full-time students), minimum full-time student wages, and
other information for which request is
made on the form.
(c) Separate application must be
made for each campus of an institution
of higher education for which authority to employ full-time students at
subminimum wage rates is sought.
(d) Application for renewal of a certificate shall be made on the same type
of form as is used for a new application. No certificate in effect shall expire until action on such an application
shall have been finally determined,
provided that such application has
been properly executed, and is received
by the office specified in paragraph (a)
of this section not less than 15 nor
more than 30 days prior to the expiration date. A properly executed application is one which fully and accurately
contains the information required on
the form, and the required certification
by an authorized representative of the
employer.
[40 FR 6329, Feb. 11, 1975; 40 FR 22546, May 23,
1975]
§ 519.14 Procedure for action upon an
application.
(a) Under certain conditions, an institution of higher education has temporary authorization to employ fulltime students at subminimum wages.
These conditions are:
(1) Absence of an effective finding by
the Secretary that the institution has
been employing full-time students
under certificates in violation of the
requirements of section 14(b)(3) of the
Act or of these regulations; and
(2) Forwarding of a properly completed application to the Wage and
Hour Division not later than the start
of employment of full-time students at
subminimum wages; and
(3) Posting a notice of such filing at
the place(s) specified in paragraph (a)
of § 519.16 of this subpart; and
(4) Compliance during the temporary
authorization period with the requirements set forth in paragraphs (b) and
(e) through (j) of § 519.16 of this subpart.
(b) Temporary authorization under
the conditions set forth in paragraph
(a) of this section is effective from the
date the application is forwarded to the
Wage and Hour Division in conformance with § 519.13 of this subpart. This
authorization shall continue in effect
for one year from the date of forwarding of the application unless,
within 30 days, the Administrator or
his/her authorized representative denies the application, issues a certificate with modified terms and conditions, or expressly extends the 30-day
period of review.
(c) Upon receipt of an application for
a certificate, the officer authorized to
act upon such application shall issue a
certificate if the terms and conditions
specified in this subpart are satisfied.
To the extent he/she deems appropriate, the authorized officer may provide an opportunity to other interested
persons to present data, views, or argument on the application prior to granting or denying a certificate.
(d) Until April 30, 1976, if a certificate
is issued there shall be published in the
FEDERAL REGISTER a general statement
of the terms of such certificate together with a notice that, pursuant to
§ 519.19, for 45 days following such publication any interested person may file
a written request for reconsideration
or review. Thereafter, applications and
certificates will be available for examination in accordance with applicable
regulations in Washington, DC, and in
the appropriate Regional Office of the
Wage and Hour Division (or the Denver, Colorado Area Office for Colorado,
North Dakota, and South Dakota; the
Salt Lake City, Utah Area Office for
Montana, Utah, and Wyoming; and the
Caribbean Office for the area it covers)
for institutions of higher education in
its area. A period of 60 days will be provided after certificate issuance during
which any interested person may file a
written request for reconsideration or
review.
(e) If a certificate is denied, notice of
such denial shall be sent to the employer, stating the reason or reasons
for the denial. Such denial shall be
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Wage and Hour Division, Labor
§ 519.16
without prejudice to the filing of any
subsequent application.
§ 519.15 Conditions governing issuance
of full-time student certificates.
Certificates authorizing the employment of full-time students at subminimum wage rates shall not be issued
unless the following conditions are
met:
(a) Full-time students are available
for employment at subminimum rates;
the granting of a certificate is necessary in order to prevent curtailment
of opportunities for employment.
(b) The employment of full-time students will not create a substantial
probability of reducing the full-time
employment opportunities for persons
other than those employed under such
certificates.
(c) Abnormal labor conditions such
as a strike or lockout do not exist in
the units of the campus for which a
full-time student certificate is requested.
(d) The data given on the application
are accurate and based on available
records.
(e) There are no serious outstanding
violations of the provisions of a fulltime student certificate previously
issued to the employer, nor have there
been any serious violations of the Fair
Labor Standards Act (including ChildLabor Regulation No. 3 and the Hazardous Occupations Orders published in
part 570 of this chapter) which provide
reasonable grounds to conclude that
the terms of a certificate may not be
complied with, if issued.
(f) The subminimum wage rate(s)
proposed to be paid full-time students
under temporary authorization or
under certificate is not less than 85
percent of the minimum wage applicable under section 6 of the Act.
(g) Full-time students are not to be
employed by an institution of higher
education at subminimum wages under
this subpart in unrelated trades or
businesses as defined and applied under
sections 511 through 515 of the Internal
Revenue Code, such as apartment
houses, stores, or other businesses not
primarily catering to the students of
the institution.
(h) Certificates will not be issued
where such issuance will result in a re-
duction of the wage rate paid to a current employee, including current student employees.
§ 519.16 Terms and conditions of employment under full-time student
certificates and under temporary
authorization.
(a) A full-time student certificate
will not be issued for a period longer
than 1 year, nor will it be issued retroactively. It shall specify its effective
and expiration dates. A copy of the certificate shall be posted during its effective period in a conspicuous place or
places in the institution of higher education readily visible to all employees,
for example, adjacent to the time clock
or on the bulletin board used for notices to the employees. If temporary
authorization is in effect under paragraph (a) of § 519.14, a notice thereof
shall be similarly posted during the effective period of such authorization.
(b) Full-time students may not be
employed under a certificate at less
than 85 percent of the minimum wage
applicable under section 6 of the Act.
(c) An institution of higher education
shall not employ full-time students at
subminimum wages under this subpart
in unrelated trades or businesses as defined and applied under sections 511
through 515 of the Internal Revenue
Code, such as apartment houses, stores,
or other businesses not primarily catering to the students of the institution.
(d) An institution of higher education
subject to a finding by the Secretary
that it is in violation of the requirements of section 14(b)(3) of the Act or
of this subpart must be issued a fulltime student certificate before it can
employ full-time students at wages
below those required by section 6 of the
Act. The Administrator or his/her authorized representative will not issue a
full-time student certificate to such an
institution without adequate assurances and safeguards to insure that the
violations found by the Secretary will
not continue.
(e) Full-time students shall not be
permitted to work at subminimum
wages for more than 8 hours a day, nor
for more than 40 hours a week when
school is not in session, nor more than
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§ 519.17
29 CFR Ch. V (7–1–19 Edition)
20 hours a week when school is in session (apart from a full-time student’s
summer vacation), except that when a
full-day school holiday occurs the
weekly limitation on the maximum
hours which may be worked shall be increased by 8 hours for each such holiday but in no event shall the 40-hour
limitation be exceeded. (Note: School
is considered to be in session for a student taking one or more courses during
a summer or other vacation.) Whenever
a full-time student is employed for
more than 20 hours in any workweek in
conformance with this paragraph, the
employer shall note in his/her payroll
that school was not in session during
all or part of that workweek or the student was in his/her summer vacation.
(f) Neither oppressive child labor as
defined in section 3(1) of the Act and
regulations issued under the Act nor
any other employment in violation of a
Federal, State or local child labor law
or ordinance shall come within the
terms of any certificate issued under
this subpart.
(g) Full-time students shall be employed at subminimum wages under
this subpart only outside of their
school hours, i.e., only outside of the
scheduled hours of instruction of the
individual full-time student.
(h) No full-time student shall be
hired under a full-time student certificate for work in a unit or units of the
campus where abnormal labor conditions, such as a strike or lockout,
exist.
(i) No provision of any full-time student certificate shall excuse noncompliance with higher standards applicable to full-time students which
may be established under the WalshHealey Public Contracts Act or any
other Federal law, State law, local ordinance, or union or other agreement.
Thus, certificates issued under this
subpart have no application to employment under the Service Contract Act.
(j) No full-time student certificate
shall apply to any employee to whom a
certificate issued under section 14(a) or
(c) of the Act has application.
[40 FR 6329, Feb. 11, 1975; 40 FR 22546, May 23,
1975]
§ 519.17
Records to be kept.
(a) The employer shall designate
each worker employed as a full-time
student under a full-time student certificate at subminimum wages, as provided under part 516 of this chapter.
(b)(1) In addition to the records required under part 516 of this chapter
and this subpart, the employer shall
keep the records specified in paragraphs (b)(2) and (3) of this section specifically relating to full-time students
employed at subminimum wages.
(2) The institution shall obtain at the
time of hiring and keep in its records
information that the employee is its
full-time student at the physical location of the institution in accordance
with its accepted definition of a fulltime student. During a period between
attendance at different schools not
longer than the usual summer vacation, the acceptance by the institution
of the full-time student for its next
term will satisfy the requirements of
(b)(2) of this section.
(3) An institution of higher education
shall maintain records showing the
total number of all full-time students
of the type defined in § 519.12(a) employed at the campus of the institution
at less than the minimum wage otherwise applicable under the Act, and the
total number of all employees at the
campus to whom the minimum wage
provision of the Act applies.
(c) The records required in this section, including a copy of any full-time
student certificate issued, shall be kept
for a period of 3 years at the place and
made available for inspection, both as
provided in part 516 of this chapter.
[40 FR 6329, Feb. 11, 1975; 40 FR 22546, May 23,
1975]
§ 519.18 Amendment or replacement of
a full-time student certificate.
In the absence of an objection by the
employer (which may be resolved in
the manner provided in part 528 of this
chapter) the authorized officer upon
his/her own motion may amend the
provisions of a certificate when it is
necessary by reason of the amendment
of these regulations, or may withdraw
a certificate and issue a replacement
certificate when necessary to correct
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Wage and Hour Division, Labor
Pt. 520
omissions or apparent defects in the
original certificates.
§ 519.19
Reconsideration and review.
(a) Within 15 days after being informed of a denial of an application for
a full-time student certificate or within 45 days after FEDERAL REGISTER publication of a statement of the terms of
the certificate granted, (subsequent to
April 30, 1976, within 60 days after a
certificate is granted), any person aggrieved by the action of an authorized
officer in denying or granting a certificate may:
(1) File a written request for reconsideration thereof by the authorized officer who made the decision in the first
instance, or
(2) File with the Administrator a
written request for review.
(b) A request for reconsideration
shall be accompanied by a statement of
the additional evidence which the applicant believes may materially affect
the decision and a showing that there
were reasonable grounds for failure to
present such evidence in the original
proceedings.
(c) Any person aggrieved by the reconsideration of an authorized officer
may, within 15 days after such determination, file with the Administrator a
written request for review.
(d) A request for review shall be
granted where reasonable grounds for
the review are set forth in the request.
(e) If a request for reconsideration or
review is granted, the authorized officer or the Administrator may, to the
extent he/she deems it appropriate, afford other interested persons an opportunity to present data, views, or argument.
[40 FR 6329, Feb. 11, 1975; 40 FR 22546, May 23,
1975]
PART 520—EMPLOYMENT UNDER
SPECIAL CERTIFICATE OF MESSENGERS, LEARNERS (INCLUDING
STUDENT-LEARNERS), AND APPRENTICES
Subpart A [Reserved]
Subpart B—What Are the General Provisions Governing the Employment of
Messengers, Learners (Including Student-Learners), and Apprentices at
Subminimum Wages?
Sec.
520.200 What is the legal authority for payment of wages lower than the minimum
wage required by section 6(a) of the Fair
Labor Standards Act?
520.201 How are those classifications of
workers which may be paid subminimum
wages under section 14(a) of the Fair
Labor Standards Act defined?
520.202 How do persons who want to apply
for a particular certificate find out what
is needed?
520.203 What records does an employer have
to keep when subminimum wage certificates are granted? How long do they have
to be kept?
520.204 If someone does not agree with the
Department of Labor’s decision on a certificate, can the decision be appealed?
520.205 How do these rules affect other Federal, state and local laws and collective
bargaining agreements?
Subpart C—Definitions
520.300
Definitions.
Subpart D—Messengers, Learners (Excluding Student-Learners), and Apprentices
520.400 Who are messengers, learners, and
apprentices?
520.401 Are there any industries, occupations, etc. that do not qualify for a certificate to employ messengers, learners,
or apprentices at subminimum wages?
520.402 How do I obtain authority to employ
messengers, learners, or apprentices at
subminimum wages?
520.403 What information is required when
applying for authority to pay less than
the minimum wage?
520.404 What must I demonstrate in my application for a messenger, learner, or apprentice certificate to receive a favorable
review?
520.405 Must I notify my employees that I
am applying for a certificate to employ
messengers and/or learners at subminimum wages?
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§ 520.200
29 CFR Ch. V (7–1–19 Edition)
520.406 What happens once I have submitted
my request for authorization to pay messengers, learners, or apprentices subminimum wages?
520.407 What is the subminimum wage for
messengers and what must I do to comply with the terms of my certificate?
520.408 What is the subminimum wage for
learners and what must I do to comply
with the terms of my certificate?
520.409 When will authority to pay apprentices special minimum wages become effective and what is the special minimum
wage rate?
520.410 How long does a messenger, learner,
or apprentice certificate remain in effect?
520.411 Does a certificate authorizing payment of subminimum wages to messengers and/or learners remain in effect
during the renewal process?
520.412 What records, in addition to those
required by Part 516 of this chapter and
section 520.203 of this part, must I keep
relating to the employment of messengers, learners, or apprentices under
special certificate?
Subpart E—Student-Learners
520.500 Who is a student-learner?
520.501 How do I obtain authority to employ
student-learners at subminimum wages?
520.502 What information must an application to employ student-learners at subminimum wages contain?
520.503 What must I demonstrate in my application for a student-learner certificate
to receive a favorable review?
520.504 When will authority to pay studentlearners subminimum wages become effective?
520.505 How will I be notified that my request to employ student-learners at subminimum wages has been denied and can
I appeal the denial?
520.506 What is the subminimum wage for
student-learners and what must I do to
comply with the terms of my studentlearner certificate?
520.507 How long does my certificate remain
in effect?
520.508 What records, in addition to those
required by Part 516 of this chapter and
section 520.203 of this part, must I keep
when student-learners are employed?
AUTHORITY: Sec. 14, 52 Stat. 1062, 1064 (29
U.S.C. 214); secs. 2–12, 60 Stat. 237–244; (5
U.S.C. 1001–1011); 52 Stat. 1068, as amended, 29
U.S.C. 214.
SOURCE: 62 FR 64959, Dec. 9, 1997, unless
otherwise noted.
Subpart A [Reserved]
Subpart B—What are the General
Provisions Governing the Employment
of
Messengers,
Learners (Including StudentLearners), and Apprentices at
Subminimum Wages?
§ 520.200 What is the legal authority
for payment of wages lower than
the minimum wage required by section 6(a) of the Fair Labor Standards Act?
Section 14(a) of the Fair Labor
Standards Act provides, in order to
prevent curtailment of employment opportunities, for the payment of special
minimum wage rates to workers employed as messengers, learners (including student-learners), and apprentices
under special certificates issued by the
Department of Labor.
§ 520.201 How are those classifications
of workers which may be paid subminimum wages under section 14(a)
of the Fair Labor Standards Act defined?
(a) A messenger is a worker who is
primarily engaged in delivering letters
and messages for a firm whose principal business is the delivery of such
letters and messages.
(b) A learner is a worker who is being
trained for an occupation, which is not
customarily
recognized
as
an
apprenticeable trade, for which skill,
dexterity and judgment must be
learned and who, when initially employed, produces little or nothing of
value. Except in extraordinary circumstances, an employee cannot be
considered a ‘‘learner’’ once he/she has
acquired a total of 240 hours of job-related and/or vocational training with
the same or other employer(s) or training facility(ies) during the past three
years. An individual qualifying as a
‘‘learner’’ may only be trained in two
qualifying occupations.
(c) A student-learner is a student
who is at least sixteen years of age, or
at least eighteen years of age if employed in an occupation which the Secretary has declared to be particularly
hazardous, who is receiving instruction
in an accredited school, college or university and who is employed on a part-
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Wage and Hour Division, Labor
§ 520.205
time basis, pursuant to a ‘‘bona fide vocational training program’’ as defined
in subpart C of this part.
(d) An apprentice is a worker, at
least sixteen years of age unless a higher minimum age standard is otherwise
fixed by law, who is employed to learn
a skilled trade through a registered apprenticeship program. Training is provided through structured on-the-job
training combined with supplemental
related theoretical and technical instruction. This term excludes pre-apprentices, trainees, learners, and student-learners. The terms learner and
student-learner are defined in subpart
C of this part. Standards governing the
registration of apprenticeship programs are established and administered by the U.S. Department of Labor,
Employment and Training Administration, Bureau of Apprenticeship and
Training (BAT) and are found in Regulations, 29 CFR Part 29.
(e) Additional terms used in this part
are defined in subpart C of this part.
§ 520.202 How do persons who want to
apply for a particular certificate
find out what is needed?
The application process, terms, conditions and requirements of certificates and other matters are discussed
in subparts D and E of this part. Messengers, learners (excluding studentlearners), and apprentices are discussed
in subpart D of this part and studentlearners in subpart E of this part.
§ 520.203 What records does an employer have to keep when subminimum wage certificates are granted? How long do they have to be
kept?
(a) In addition to other records required under the recordkeeping requirements (part 516 of this chapter),
the employer is required to keep
records specific to certification under
section 14(a) of the Fair Labor Standards Act. All workers employed under a
subminimum wage certificate shall be
designated as such on the employer’s
payroll records. Further recordkeeping
requirements are described in each applicable subpart of this part (see
§§ 520.412 and 520.508 of this part).
(b) Employers must maintain and
preserve all required records for at
least three years from the last date of
employment under a subminimum
wage program. The employer’s copy of
the application and the certificate
shall also be maintained for three
years. Such records shall be kept secure and accessible at the place of employment or where payroll records are
customarily maintained. All records
must be available for inspection and
copying by the Administrator.
§ 520.204 If someone does not agree
with the Department of Labor’s decision on a certificate, can the decision be appealed?
(a) Any person, applicant, trade
union, association, etc. who does not
agree with action granting or denying
a certificate (pursuant to §§ 520.406 and
520.505) may, within 60 days of that action or such additional time as the Administrator may allow, file with the
Administrator a petition for review.
The decision of the Administrator becomes final unless such a written request is timely filed.
(b) Such requests should contain a
statement of the additional evidence
which the person believes may materially affect the decision and establish
that there were reasonable grounds for
failure to present such evidence during
the original certification process.
(c) If a request for reconsideration or
review is granted, the Administrator,
to the extent it is deemed appropriate,
may afford other interested persons an
opportunity to present data and views.
(d) The Administrator may conduct
an investigation, which may include a
hearing, prior to taking any action
pursuant to this part.
§ 520.205 How do these rules affect
other Federal, state and local laws
and collective bargaining agreements?
No provision of this part, or of any
special minimum wage certificate
issued thereunder, shall excuse noncompliance with any other Federal or
state law or municipal ordinance or
collective bargaining agreement establishing higher standards.
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§ 520.300
29 CFR Ch. V (7–1–19 Edition)
Subpart C—Definitions
§ 520.300 Definitions.
Administrator means the Administrator of the Wage and Hour Division,
United States Department of Labor, or
his/her authorized representative.
Apparel industry means the manufacturing of the following products as referred to in subpart D of this part:
(1) Rainwear means the manufacture
of waterproofed garments and raincoats from oiled cloth or other materials, whether vulcanized, rubberized,
cravenetted, or otherwise processed.
(2) Leather and sheep-lined clothing
means the manufacture of leather,
leather-trimmed and sheeplined garments for men, women or children.
(3) Women’s apparel division of the
apparel industry for the manufacture
of women’s, misses’, and juniors’
dresses means the production of women’s, misses’ and juniors’ dresses; washable service garments; blouses from
woven or purchased knit fabric; women’s, misses’, children’s and infants’
underwear, nightwear and negligees
from woven fabrics; corsets and other
body supporting garments from any
material; infants’ and children’s outerwear; and other garments similar to
them.
(4) Robes, means the manufacture of
robes from any woven material or from
purchased knitted materials, including, without limitation, men’s, women’s and children’s bath, lounging and
beach robes and dressing gowns.
Apprentice means a worker, at least
sixteen years of age unless a higher
minimum age standard is otherwise
fixed by law, who is employed to learn
a skilled trade through a registered apprenticeship program. Training is provided through structured on-the-job
training combined with supplemental
related theoretical and technical instruction. This term excludes pre-apprentices, trainees, learners, and student-learners. The terms learner and
student-learner are defined in this subpart.
Apprenticeship agreement means a
written agreement between an apprentice and either his/her employer, or an
apprenticeship committee acting as
agent for employer(s), which contains
the terms and conditions of the em-
ployment and training of the apprentice.
Apprenticeship committee means those
persons designated by the sponsor to
act for it in the administration of the
program. A committee may be ‘‘joint’’,
i.e., it is composed of an equal number
of representatives of the employer(s)
and of the employees represented by a
bona fide collective bargaining agent(s)
and has been established to conduct,
operate, or administer an apprenticeship program and enter into apprenticeship agreements with apprentices.
A committee may be ‘‘unilateral’’ or
‘‘non-joint’’ and shall mean a program
sponsor in which a bona fide collective
bargaining agent is not a participant.
Apprenticeship program means a plan
containing all terms and conditions for
the qualification, recruitment, selection, employment and training of apprentices, including such matters as
the requirements for a written apprenticeship agreement.
BAT means the Bureau of Apprenticeship and Training, Employment
and Training Administration, United
States Department of Labor.
Bona fide vocational training program
means a program authorized and approved by a state board of vocational
education or other recognized educational body that provides for parttime employment training which may
be scheduled for a part of the work day
or workweek, for alternating weeks or
for other limited periods during the
year, supplemented by and integrated
with a definitely organized plan of instruction designed to teach technical
knowledge and related industrial information given as a regular part of the
student-learner’s course by an accredited school, college, or university.
Department means the United States
Department of Labor.
Experienced worker means a worker
whose total experience in an authorized learner occupation in the industry,
including vocational training, within
the past three years is equal to or
greater than 240 hours or such other period as authorized by a learner certificate issued pursuant to the regulations
in this part.
Experienced worker available for employment means an experienced worker
residing within the area from which
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Wage and Hour Division, Labor
§ 520.300
the plant/business customarily draws
its labor supply or within a reasonable
commuting distance of such area, and
who is willing and able to accept employment in the plant/business; or an
experienced worker residing outside of
the area from which the plant/business
customarily draws its labor supply,
who has in fact made himself or herself
available for employment at the plant/
business.
FLSA means the Fair Labor Standards Act of 1938 as amended (29 U.S.C.
201 et seq.).
Learner means a worker who is being
trained for an occupation, which is not
customarily
recognized
as
an
apprenticeable trade, for which skill,
dexterity and judgment must be
learned and who, when initially employed produces little or nothing of
value. Except in extraordinary circumstances, an employee cannot be
considered a ‘‘learner’’ once he/she has
acquired a total of 240 hours of job-related and/or vocational training with
the same or other employer(s) or training facility(ies) during the past three
years. An individual qualifying as a
‘‘learner’’ may only be trained in two
qualifying occupations.
Learning period means a period of
time measured in work hours and vocational training hours that is normally
required to fully train an inexperienced
worker in a particular occupation
within an industry where the learner is
employed. The learning period will not
exceed 240 hours for any qualifying occupation except in extraordinary circumstances where the employer demonstrates that the occupation to be
learned requires an extended period of
specialized training.
Men’s and boys’ clothing industry
means the industry which manufactures men’s, youths’, and boys’ suits,
coats, and overcoats.
Messenger means a worker who is primarily engaged in delivering letters
and messages for a firm whose principal business is the delivery of such
letters and messages.
Minimum wage means the wage rate
required by section 6 of FLSA. For purposes of this part, subminimum wage
rates are based exclusively on the applicable minimum wage provided by
section 6(a) of FLSA.
Recognized
apprenticeship
agency
means either a state apprenticeship
agency recognized by the BAT, or if no
such apprenticeship agency exists in
the state, the BAT.
Registered apprenticeship program or
agreement means a program or agreement which has been approved by a
recognized apprenticeship agency as
meeting the basic standards of apprenticeship adopted and published by BAT.
Secretary or Secretary of Labor means
the Secretary of Labor, United States
Department of Labor or his/her authorized representative.
Shoe manufacturing industry means
the manufacture or partial manufacture of footwear from any material and
by any process except knitting, vulcanizing of the entire article or vulcanizing (as distinct from cementing) of
the sole to the upper, including the
manufacturing of the following: athletic shoes; boots; boot tops; burial
shoes; custom-made boots or shoes;
moccasins; puttees, except spiral puttees; sandals; shoes completely rebuilt
in a shoe factory; slippers. This term
also includes the manufacture from
leather or from any shoe-upper material of all cut stock and findings for
footwear, including bows, ornaments,
and trimmings. It also includes the
manufacture of cutsoles; midsoles; insoles; taps; lifts; rands; toplifts; bases;
shanks; boxtoes; counters; stays; stripping; sock linings; and heel pads. Shoe
manufacturing also includes the manufacture of heels from any material except molded rubber, but not including
the manufacture of woodheel blocks;
the manufacture of cut upper parts for
footwear, including linings, vamps and
quarters; and the manufacture of
pasted shoe stock; as well as the manufacture of boot and shoe patterns. However, the manufacture of cut stock and
findings is included within this definition only when performed by companies engaged in the production of shoes
who incorporate most of the cut stock
and findings in the manufacture of
their product(s).
Skilled trade means an apprenticeable
occupation which possesses all of the
following characteristics:
(1) It is customarily learned in a
practical way through a structured,
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§ 520.400
29 CFR Ch. V (7–1–19 Edition)
systematic program of on-the-job supervised training.
(2) It is clearly identified and commonly recognized throughout an industry.
(3) It involves manual, mechanical or
technical skills and knowledge which
require a minimum of 2,000 hours of onthe-job work experience.
(4) It requires related instruction to
supplement the on-the-job training.
(5) It is not merely a part of an
apprenticeable occupation and does not
fall into any of the following categories: marketing; sales administration; administrative support; executive
and managerial; professional and semiprofessional occupations (this category
covers occupations for which entrance
requirements customarily include education of college level).
Standards of apprenticeship means the
apprenticeship program is an organized, written plan embodying the
terms and conditions of employment,
training, and supervision of one or
more apprentices in the apprenticeable
occupation, which meets the requirements established by BAT, and is subscribed to by a sponsor who has undertaken to carry out the apprentice
training program.
State means any state of the United
States or the District of Columbia or
any territory or possession of the
United States.
Student-learner means a student who
is at least sixteen years of age, or at
least eighteen years of age if employed
in an occupation which the Secretary
has declared to be particularly hazardous, who is receiving instruction in
an accredited school, college or university and who is employed by an establishment on a part-time basis, pursuant to a bona fide vocational training
program.
Subminimum wage means the rates
which may be paid under temporary
authorization or under certificate as
provided by section 14(a) of FLSA and
this part.
Vocational Training Program. See
‘‘Bona fide vocational training program’’.
Wage and Hour Division means the
Wage and Hour Division, United States
Department of Labor.
[62 FR 64959, Dec. 9, 1997, as amended at 82
FR 2227, Jan. 9, 2017]
Subpart D—Messengers, Learners
(Excluding Student-Learners),
and Apprentices
§ 520.400 Who are messengers, learners, and apprentices?
The terms messenger, learner, and
apprentice are defined in subpart C of
this part.
§ 520.401 Are there any industries, occupations, etc. that do not qualify
for a certificate to employ messengers, learners, or apprentices at
subminimum wages?
(a) Certificates to employ messengers
at subminimum wages are available to
only those establishments engaged in
the business of providing messenger
service, i.e., the delivery of letters and
messages. Requests for such certificates are uniformly denied to applicants whose principal business purpose
is not the delivery of messages and letters.
(b) All applications for special certificates authorizing the employment
of learners at subminimum wage rates
in the manufacture of products in the
following industries shall be denied
(definitions for all listed activities can
be found in subpart C of this part):
(1) In the apparel industry:
(i) Rainwear
(ii) Leather and sheep-lined clothing
(iii) Women’s apparel division of the
apparel industry for the manufacture
of women’s misses’, and juniors’
dresses;
(iv) Robes
(2) Shoe manufacturing industry
(3) Men’s and boys’ clothing industry.
(c) No certificates will be granted authorizing the employment of learners
at
subminimum
wage
rates
as
homeworkers; in maintenance occupations such as guard, porter, or custodian; in office and clerical occupations
in any industry; or in operations of a
temporary or sporadic nature.
(d) Authorization to employ apprentices at subminimum wages will only
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§ 520.404
be granted if permitted by the BAT
regulations (29 CFR Part 29).
§ 520.402 How do I obtain authority to
employ messengers, learners, or apprentices at subminimum wages?
(a) Employers wishing to employ
messengers, learners, or apprentices as
defined in subpart C of this part at subminimum wages must apply for authority to do so from the Administrator at
the Wage and Hour Division’s Regional
Office having administrative jurisdiction over the geographic area in which
the employment is to take place. To
obtain the address of the Regional Office which services your geographic
area, please contact your local Wage
and Hour Office (under ‘‘Department of
Labor’’ in the blue pages of your local
telephone book).
(b) In the case of messengers, such
application may be filed by an employer or group of employers. Preferential consideration will be given to
applications filed by groups or organizations which are deemed to be representative of the interests of a whole
industry or branch thereof.
§ 520.403 What information is required
when applying for authority to pay
less than the minimum wage?
(a) A separate application must be
made for each plant or establishment
requesting authorization for employment of messengers and/or learners at
subminimum wages, on the official
form furnished by the Wage and Hour
Division, containing all information
required by the form including:
(1) Information concerning efforts
made by the applicant to obtain experienced workers in occupation(s) for
which learners are requested;
(2) The occupations/industry in which
the messenger(s) and/or learner(s) are
to be employed;
(3) A statement explaining why employment of messenger(s) and/or learners(s) at subminimum wages is needed
to prevent curtailment of employment
opportunities;
(4) The number of messengers and/or
learners the applicant anticipates employing at subminimum wages under
special certificate;
(5) If requesting authorization for the
employment of learners at submin-
imum wages for a learning period
greater than 240 hours, information
pertinent to the extraordinary circumstances necessitating such a request. While each such request will be
considered on its own merit, it is anticipated that such authorizations
would be limited to occupations requiring an extended period of specialized
training;
(6) The number of messengers and/or
learners hired at subminimum wages
during the twelve-month period prior
to making application;
(7) Total number of nonsupervisory
workers in the particular plant or establishment for which a certificate is
requested;
(8) The number of experienced workers in the learner occupations and their
straight-time average hourly earnings
during the last payroll period and the
corresponding payroll period in the
prior year; and
(9) The type of equipment to be used
by learners.
(b) For apprentices, the employer or
apprenticeship committee must submit
a copy of the registered apprenticeship
program.
(c) Any applicant may also submit
such additional information as may be
pertinent. Applications which fail to
provide the information required by
the form may be returned to the applicant with a notation of deficiencies and
without prejudice against submission
of a new or revised application.
(The information collection requirements
contained in paragraphs (a), (b), and (c) were
approved by the Office of Management and
Budget under control number 1235–0001)
[62 FR 64959, Dec. 9, 1997, as amended at 82
FR 2227, Jan. 9, 2017]
§ 520.404 What must I demonstrate in
my application for a messenger,
learner, or apprentice certificate to
receive a favorable review?
(a) The application must demonstrate that a certificate is necessary
in order to prevent the curtailment of
opportunities for employment.
(b) The issuance of a messenger and/
or learner certificate must not tend to
create unfair competitive labor cost
advantages nor have the effect of impairing or depressing wage rates or
working standards of experienced
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§ 520.405
29 CFR Ch. V (7–1–19 Edition)
workers performing work of a like or
comparable character in the industry.
(c) Abnormal labor conditions such
as a strike, lock-out, or other similar
condition, must not exist at the plant
or establishment for which a messenger
and/or learner certificate is requested.
(d) It must be shown that an adequate supply of qualified experienced
workers is not available for employment in those occupations for which
authorization to pay subminimum
wages to learners has been requested;
that the experienced workers presently
employed in the plant or establishment
in occupations in which learners are requested are afforded an opportunity, to
the fullest extent possible, for full-time
employment upon completion of the
learning period; and that learners are
available for employment.
(e) Reasonable efforts must have been
made to recruit workers paid at least
the minimum wage in those occupations in which certificates to employ
learners at subminimum wages have
been requested. This includes the
placement of an order with the local
State or Territorial Public Employment Service Office (except in possessions where there is no such office) not
more than fifteen days prior to the
date of application. Written evidence
from such office that the order has
been placed shall be submitted by the
employer with the application.
(f) The occupation or occupations in
which learners are to receive training
must involve a sufficient degree of
skill to necessitate an appreciable
learning period.
(g) An apprenticeship program must
conform with or substantially conform
with the standards of apprenticeship as
defined in subpart C of this part.
(h) There must be no serious outstanding violations involving the employee(s) for whom a certificate is
being requested nor any serious outstanding violations of a certificate previously issued, nor any serious violations of the FLSA which provide reasonable grounds to conclude that the
terms of a certificate may not be complied with, if issued.
§ 520.405 Must I notify my employees
that I am applying for a certificate
to employ messengers and/or learners at subminimum wages?
Upon making application for a messenger and/or learner certificate or for
renewal thereof, an employer shall post
a copy of the first page of the completed application form in a conspicuous place in each department of
the plant or establishment where he/
she proposes to employ messengers
and/or learners at subminimum wage
rates. Such notice shall remain posted
until the application is acted upon by
the Administrator.
(The information collection requirements
contained herein were approved by the Office
of Management and Budget under control
number 1235–0001)
[62 FR 64959, Dec. 9, 1997, as amended at 82
FR 2228, Jan. 9, 2017]
§ 520.406 What happens once I have
submitted my request for authorization to pay messengers, learners, or
apprentices subminimum wages?
(a) All applications submitted for authorization to pay wages lower than
those required by section 6(a) of the
FLSA will be considered and acted
upon (issued or denied) subject to the
conditions specified in §§ 520.403 and
520.404 of this part.
(b) If, in the case of messengers and/
or learners, available information indicates that the requirements of this
part are satisfied, the Administrator
shall issue a special certificate which
will be mailed to the employer. If a
special certificate is denied, the employer shall be given written notice of
the denial. If a messenger and/or learner certificate is denied, notice of such
denial shall be without prejudice to the
filing of any subsequent application.
(c) If, in the case of apprentices, the
apprenticeship agreement and other
available information indicate that the
requirements of this part are satisfied,
the Administrator shall issue a special
certificate. The special certificate, if
issued, shall be mailed to the employer
or the apprenticeship committee and a
copy shall be mailed to the apprentice.
If a special certificate is denied, the
employer or the apprenticeship committee, the apprentice and the recognized apprenticeship agency shall be
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§ 520.409
given written notice of the denial. The
employer shall pay the apprentice the
minimum wage applicable under section 6(a) of the FLSA from the date of
receipt of notice of such denial.
§ 520.407 What is the subminimum
wage for messengers and what must
I do to comply with the terms of my
certificate?
(a) A messenger certificate, if issued,
shall specify:
(1) The subminimum wage rate of not
less than 95 percent of the applicable
minimum wage required by section 6(a)
of the FLSA; and
(2) The effective and expiration dates
of the certificate.
(b) The employer shall post a copy of
the messenger certificate during its effective period in a conspicuous place
where it can be readily seen by employees.
(c) No messenger shall be hired under
a messenger certificate while abnormal
labor conditions such as a strike, lockout, or other similar condition, exist.
§ 520.408 What is the subminimum
wage for learners and what must I
do to comply with the terms of my
certificate?
(a) All learner certificates shall
specify:
(1) The subminimum wage rate of not
less than 95 percent of the applicable
minimum wage required by section 6(a)
of the FLSA;
(2) The number or proportion of
learners authorized to be employed on
any one day;
(3) The occupations in which learners
may be employed;
(4) The authorized learning period of
not more than 240 hours, except in extraordinary situations as discussed in
§ 520.403; and
(5) The effective and expiration dates
of the certificate.
(b) Learners properly hired prior to
the date on which a learner certificate
expires may be continued in employment at subminimum wage rates for
the duration of their authorized learning period under the terms of the certificate, even though the certificate
may expire before the learning period
is completed.
(c) The employer shall post a copy of
the learner certificate during its effec-
tive period and thereafter until all authorized learners have completed their
learning period(s). The certificate shall
be posted in a conspicuous place in
each department of the plant where
learners are to be employed.
(d) No learners shall be hired under a
learner certificate if, at the time the
employment begins, experienced workers capable of equaling the performance of a worker of minimum acceptable skill are available for employment. Before hiring learners during the
effective period of the certificate, the
employer shall place an order for experienced workers with the local State or
Territorial Public Employment Service
Office (except in possessions where
there is no such office) or have such an
active order on file. Written evidence
that an order has been placed or is on
active file shall be maintained in the
employer’s records.
(e) No learner shall be hired under a
learner certificate while abnormal
labor conditions such as a strike, lockout, or other similar condition exist in
the plant or establishment.
(f) For each individual learner, the
number of hours of previous employment and hours of vocational or similar facility(ies) training must be deducted from the authorized learning
period if within the past three years
the learner has been employed or received vocational training in a given
occupation and industry.
(g) If experienced workers are paid on
a piece rate basis, learners shall be
paid at least the same piece rates as
experienced workers employed on similar work in the plant and shall receive
earnings based on such piece rates
whenever such earnings exceed the subminimum wage rates permitted in the
certificate.
§ 520.409 When will authority to pay
apprentices special minimum wages
become effective and what is the
special minimum wage rate?
(a) An apprenticeship program which
has been registered with a recognized
apprenticeship agency shall constitute
a temporary special certificate authorizing the employment of an apprentice
at the wages and under the conditions
specified in such program until a special certificate is issued or denied. This
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29 CFR Ch. V (7–1–19 Edition)
temporary authorization is, however,
conditioned on the requirement that
within 90 days from the beginning date
of employment of the apprentice, the
employer or the apprenticeship committee shall send one copy of each apprenticeship agreement, with evidence
of registration, to the appropriate Regional Office of the Wage and Hour Division.
(b) The wage rate specified by the apprenticeship program becomes the special minimum wage rate that must be
paid unless the Administrator issues a
certificate modifying the terms and
conditions of employment of apprentices at special minimum wages.
§ 520.410 How long does a messenger,
learner, or apprentice certificate
remain in effect?
(a) Messenger and/or learner certificates may be issued for a period of not
longer than one year.
(b) Each special apprentice certificate shall specify the conditions and
limitations under which it is granted,
including the periods of time during
which subminimum wage rates may be
paid pursuant to a registered apprenticeship program.
(c) No certificate may be issued
retroactively.
(d) The Administrator may amend
the provisions of a certificate when
necessary to correct omissions or defects in the original certificate or reflect changes in this part.
§ 520.411 Does a certificate authorizing
payment of subminimum wages to
messengers and/or learners remain
in effect during the renewal process?
(a) Application for renewal of a messenger and/or learner certificate shall
be made on the same form as described
in this section and employees shall be
advised of such renewal application in
the same manner as explained in
§ 520.405. No effective messenger and/or
learner certificate shall expire until
action on an application for renewal
shall have been finally determined,
provided that such application has
been properly executed in accordance
with the requirements, and filed with
and received by the Administrator not
less than fifteen nor more than thirty
days prior to the expiration date. A
final determination means either the
granting of or initial denial of the application for renewal of a messenger
and/or learner certificate, or withdrawal of the application. A ‘‘properly
executed application’’ is one which
contains the complete information required on the form, and the required
certification by the applicant.
(b) A renewal certificate will not be
issued unless there is a clear showing
that the conditions set forth in section
520.404 of this part still prevail.
§ 520.412 What records, in addition to
those required by Part 516 of this
chapter and section 520.203 of this
part, must I keep relating to the
employment of messengers, learners, or apprentices under special
certificate?
(a) Each worker employed as a messenger, learner, or apprentice under a
certificate shall be designated as such
on the employer’s payroll records. All
such messengers, learners, or apprentices shall be listed together as a separate group on the payroll records, with
each messenger’s, learner’s, or apprentice’s occupation being shown.
(b) At the time learners are hired,
the employer shall also obtain and
keep in his/her records a statement
signed by each employee showing all
applicable experience which the learner
had in the employer’s industry, including vocational training, during the preceding three years. The statement
shall contain the dates of such previous
employment, names and addresses of
employers, the occupation or occupations in which the learner was engaged
and the types of products upon which
the learner worked. The statement
shall also contain information concerning pertinent training in vocational training schools or similar
training facilities, including the dates
of such training and the identity of the
vocational school or training facility.
If the learner has had no applicable experience or pertinent training, a statement to that effect signed by the learner shall likewise be kept in the employer’s records.
(c) The employer shall maintain a
file of all evidence and records, including any correspondence, pertaining to
the filing or cancellation of job orders
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Wage and Hour Division, Labor
§ 520.502
placed with the local State or Territorial Public Employment Service Office pertaining to job orders for occupations to be performed by learners.
(d) Every employer who employs apprentices under temporary or special
certificates shall preserve for three
years from the last effective date of
the certificate copies of the apprenticeship program, apprenticeship agreement and special certificate under
which such an apprentice is employed.
(e) Every apprenticeship committee
which holds a certificate under this
part shall keep the following records
for each apprentice under its control
and supervision:
(1) The apprenticeship program, apprenticeship agreement and special
certificate under which the apprentice
is employed by an employer;
(2) The cumulative amount of work
experience gained by the apprentice, in
order to establish the proper wage at
the time of his/her assignment to an
employer; and
(3) A list of the employers to whom
the apprentice was assigned and the period of time he/she worked for each employer.
(f) The records required in this section, including a copy of the application(s) submitted and any special certificate(s) issued, shall be kept and
made available for inspection for at
least three years from the expiration
date of the certificate(s).
Subpart E—Student-Learners
§ 520.500 Who is a student-learner?
The term student-learner is defined
in subpart C.
§ 520.501 How do I obtain authority to
employ student-learners at subminimum wages?
(a) Employers wishing to employ student-learners at subminimum wages
must apply for authority to do so from
the Administrator at the Wage and
Hour Division’s Regional Office having
administrative jurisdiction over the
geographic area in which the employment is to take place. To obtain the
address of the Regional Office which
services your geographic area, please
contact your local Wage and Hour Office (under ‘‘Department of Labor’’ in
the blue pages of your local telephone
book).
(b) Application must be made on the
official form furnished by the Wage and
Hour Division and must be signed by
the employer, the appropriate school
official and the student-learner. A separate application must be filed by the
employer for each student-learner the
employer proposes to employ at subminimum wages.
(The information collection requirements
contained in paragraph (b) were approved by
the Office of Management and Budget under
control number 1235–0001)
[62 FR 64959, Dec. 9, 1997, as amended at 82
FR 2228, Jan. 9, 2017]
§ 520.502 What information must an
application to employ studentlearners at subminimum wages contain?
Student-learner applications must
contain:
(a) A statement clearly outlining the
vocational training program and showing, particularly, the processes in
which the student-learner will be engaged when in training on the job;
(b) A statement clearly outlining the
school instruction directly related to
the job;
(c) The total number of workers employed in the establishment;
(d) The number and hourly wage
rates of experienced workers employed
in the occupation in which the studentlearner is to be trained;
(e) The hourly wage rate or progressive wage schedule which the employer
proposes to pay the student-learner;
(f) The age of the student-learner;
(g) The period of employment training at subminimum wages;
(h) The number of hours of employment training a week and the number
of hours of school instruction a week;
(i) A certification by the appropriate
school official that the student named
on the application form will be receiving instruction in an accredited school,
college, or university and will be employed pursuant to a bona fide vocational training program, as defined in
subpart C of this part. The certification by the school official must satisfy the following conditions:
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29 CFR Ch. V (7–1–19 Edition)
(1) The application must be properly
executed in conformance with § 520.501
of this subpart;
(2) The employment training must
conform with the provisions of § 520.503
(a), (c), (d), and (g) and paragraphs (a)
and (c) of § 520.506;
(3) The occupation must not be one
for which a student-learner application
was previously submitted by the employer and a special certificate was denied by the Administrator.
(The information collection requirements in
paragraphs (a), (b), (c), (d), (e), (f), (g), (h),
and (i) were approved by the Office of Management and Budget under control number
1235–0001)
[62 FR 64959, Dec. 9, 1997, as amended at 82
FR 2228, Jan. 9, 2017]
§ 520.503 What must I demonstrate in
my application for a student-learner certificate to receive a favorable
review?
Each
student-learner
application
must demonstrate that:
(a) The training program under
which the student-learner will be employed is a bona fide vocational training program as defined in subpart C of
this part;
(b) The employment of the studentlearner at subminimum wages authorized by the special certificate must be
necessary to prevent curtailment of opportunities for employment;
(c) The student-learner is at least
sixteen years of age, or at least eighteen years of age if employed in any occupation which the Secretary has declared to be particularly hazardous (see
part 570, subpart E, of this chapter, but
note the specific exemptions for student-learners in several of the orders);
(d) The occupation for which the student-learner is receiving preparatory
training requires a sufficient degree of
skill to necessitate a substantial learning period;
(e) The training is not for the purpose of acquiring manual dexterity and
high production speed in repetitive operations;
(f) The employment of a studentlearner will not have the effect of displacing a worker employed in the establishment;
(g) The employment of the studentlearners at subminimum wages must
not tend to impair or depress the wage
rates or working standards established
for experienced workers for work of a
like or comparable character;
(h) The occupational needs of the
community or industry warrant the
training of student-learners;
(i) There are no serious outstanding
violations of the provisions of a student-learner
certificate
previously
issued to the employer, or serious violations of any other provisions of the
FLSA by the employer which provide
reasonable grounds to conclude that
the terms of the certificate would not
be complied with, if issued;
(j) The issuance of such a certificate
would not tend to prevent the development of apprenticeship programs in accordance with the regulations applicable thereto (subpart D of this part) or
would not impair established apprenticeship standards in the occupation or
industry involved; and
(k) The number of student-learners
to be employed in one establishment is
not more than a small proportion of its
work force.
§ 520.504 When will authority to pay
student-learners
subminimum
wages become effective?
(a) Certification by the appropriate
school official on an application for a
special student-learner certificate shall
constitute a temporary authorization.
This temporary authorization is effective from the date such application is
forwarded to the Wage and Hour Division in conformance with § 520.501.
(b) At the end of 30 days, this application shall become the permanent special student-learner certificate unless,
after review, the Administrator denies
the application, issues a certificate
with modified terms and conditions, or
expressly extends the period of review.
§ 520.505 How will I be notified that
my request to employ student-learners at subminimum wages has been
denied and can I appeal the denial?
(a) If, after review, an application is
denied, notification of denial will be
made to the appropriate school official,
the employer and the student. This notification will occur within 30 days following the date such application was
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§ 520.508
forwarded to the Wage and Hour Division, unless additional time for review
is considered necessary or appropriate.
(b) If additional time for review is
considered necessary or appropriate,
the proper school official, the employer, and the student shall be so notified. To the extent feasible, the Administrator may provide an opportunity to other interested persons to
present data and views on the application before denying a special studentlearner certificate.
(c) Whenever a notification of denial
is mailed to the employer, such denial
shall be without prejudice to any subsequent application, except under the
circumstances
referred
to
in
§ 520.502(i)(3).
(d) Section 520.204 of this part describes the procedures for requesting
reconsideration of a decision to grant
or deny a certificate.
(3) During the school term, when
school is not in session for the entire
week, the student-learner may work at
his/her employment training a number
of hours in the week in addition to
those authorized by the certificate;
provided,
(i) The total hours shall not exceed 40
hours in any such week, and
(ii) A notation shall be made in the
employer’s records to the effect that
school not being in session was the reason additional hours were worked in
such week.
(d) A special student-learner certificate shall not constitute authorization
to pay a subminimum wage rate to a
student-learner in any week in which
he/she is employed for a number of
hours in addition to the number authorized in the certificate, except as
provided in paragraphs (c)(1), (2), and
(3) of this section.
§ 520.506 What is the subminimum
wage for student-learners and what
must I do to comply with the terms
of my student-learner certificate?
§ 520.507 How long does my certificate
remain in effect?
(a) The special minimum wage rate
paid to student-learners shall be not
less than 75 percent of the applicable
minimum under section 6(a) of the
FLSA.
(b) Compliance with items listed for
favorable review of a student-learner
application (§ 540.503) must be demonstrated.
(c)(1) The number of hours of employment training each week at subminimum wages pursuant to a certificate,
when added to the hours of school instruction, shall not exceed 40 hours, except that authorization may be granted
by the Administrator for a greater
number of hours if found to be justified
by extraordinary circumstances.
(2) When school is not in session on
any school day, the student-learner
may work a number of hours in addition to the weekly hours of employment training authorized by the certificate; provided,
(i) The total hours worked shall not
exceed 8 hours on any such day, and
(ii) A notation shall be made in the
employer’s records to the effect that
school not being in session was the reason additional hours were worked on
such day.
(a) A special student-learner certificate shall be effective for a period not
to exceed the length of one school year
unless a longer period is found to be
justified
by
extraordinary
circumstances. These circumstances must
be explained in detail at the time of application. While each such request will
be considered on its own merit, it is anticipated that such authorizations
would be limited to occupations requiring an extended period of specialized
training;
(b) No certificate shall authorize employment training beyond the date of
graduation.
(c) No special student-learner certificate may be issued retroactively.
§ 520.508 What records, in addition to
those required by Part 516 of this
chapter and section 520.203 of this
part, must I keep when studentlearners are employed?
Any worker employed as a studentlearner shall be identified as such on
the payroll records, with each studentlearner’s occupation and rate of pay
being shown. Notations should be made
in the employer’s records when additional hours are worked by reason of
school not being in session.
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Pt. 525
29 CFR Ch. V (7–1–19 Edition)
PARTS 521–524 [RESERVED]
PART
525—EMPLOYMENT
OF
WORKERS
WITH
DISABILITIES
UNDER SPECIAL CERTIFICATES
Sec.
525.1 Introduction.
525.2 Purpose and scope.
525.3 Definitions.
525.4 Patient workers.
525.5 Wage payments.
525.6 Compensable time.
525.7 Application for certificates.
525.8 Special provisions for temporary authority.
525.9 Criteria for employment of workers
with disabilities under certificates at
special minimum wage rates.
525.10 Prevailing wage rates.
525.11 Issuance of certificates.
525.12 Terms and conditions of special minimum wage certificates.
525.13 Renewal of special minimum wage
certificates.
525.14 Posting of notices.
525.15 Industrial homework.
525.16 Records to be kept by employers.
525.17 Revocation of certificates.
525.18 Review.
525.19 Investigations and hearings.
525.20 Relation to other laws.
525.21 Lowering of wage rates.
525.22 Employee’s right to petition.
525.23 Work activities centers.
525.24 Advisory Committee on Special Minimum Wages.
AUTHORITY: 52 Stat. 1060, as amended (29
U.S.C. 201–219); Pub. L. 99–486, 100 Stat. 1229
(29 U.S.C. 214).
SOURCE: 54 FR 32928, Aug. 10, 1989, unless
otherwise noted.
§ 525.1 Introduction.
The Fair Labor Standards Amendments of 1986 (Pub. L. 99–486, 100 Stat.
1229) substantially revised those provisions of the Fair Labor Standards Act
of 1938 (29 U.S.C. 201) (FLSA) permitting the employment of individuals disabled for the work to be performed
(workers with disabilities) at special
minimum wage rates below the rate
that would otherwise be required by
statute. These provisions are codified
at section 14(c) of the FLSA and:
(a) Provide for the employment under
certificates of individuals with disabilities at special minimum wage rates
which are commensurate with those
paid to workers not disabled for the
work to be performed employed in the
vicinity for essentially the same type,
quality, and quantity of work;
(b) Require employers to provide
written assurances that wage rates of
individuals paid on an hourly rate basis
be reviewed at least once every six
months and that the wages of all employees be reviewed at least annually
to reflect changes in the prevailing
wages paid to experienced individuals
not disabled for the work to be performed employed in the locality for essentially the same type of work;
(c) Prohibit employers from reducing
the wage rates prescribed by certificate
in effect on June 1, 1986, for two years;
(d) Permit the continuance or establishment of work activities centers;
and
(e) Provide that any employee receiving a special minimum wage rate pursuant to section 14(c), or the parent or
guardian of such an employee, may petition for a review of that wage rate by
an administrative law judge.
§ 525.2 Purpose and scope.
The regulations in this part govern
the issuance of all certificates authorizing the employment of workers with
disabilities at special minimum wages
pursuant to section 14(c) of FLSA.
§ 525.3 Definitions.
(a) FLSA means the Fair Labor
Standards Act of 1938, as amended.
(b) Secretary means the Secretary of
Labor or the Secretary of Labor’s authorized representative.
(c) Administrator means the Administrator of the Wage and Hour Division,
U.S. Department of Labor, or the Administrator’s authorized representative.
(d) Worker with a disability for the
purpose of this part means an individual whose earning or productive capacity is impaired by a physical or
mental disability, including those relating to age or injury, for the work to
be performed. Disabilities which may
affect earning or productive capacity
include blindness, mental illness, mental retardation, cerebral palsy, alcoholism, and drug addiction. The following, taken by themselves, are not
considered disabilities for the purposes
of this part: Vocational, social, cultural, or educational disabilities;
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Wage and Hour Division, Labor
§ 525.5
chronic unemployment; receipt of welfare benefits; nonattendance at school;
juvenile delinquency; and, correctional
parole or probation. Further, a disability which may affect earning or
productive capacity for one type of
work may not affect such capacity for
another.
(e) Patient worker means a worker
with a disability, as defined above, employed by a hospital or institution providing residential care where such
worker receives treatment or care
without regard to whether such worker
is a resident of the establishment.
(f) Hospital or institution, hereafter referred to as institution, is a public or
private, nonprofit or for-profit facility
primarily engaged in (i.e., more than 50
percent of the income is attributable
to) providing residential care for the
sick, the aged, or the mentally ill or
retarded, including but not limited to
nursing homes, intermediate care facilities, rest homes, convalescent
homes, homes for the elderly and infirm, halfway houses, residential centers for drug addicts or alcoholics, and
the like, whether licensed or not licensed.
(g) Employ is defined in FLSA as to
suffer or permit to work. An employment
relationship arises whenever an individual, including an individual with a
disability, is suffered or permitted to
work. The determination of an employment relationship does not depend
upon the level of performance or
whether the work is of some therapeutic benefit. However, an individual
does not become an employee if engaged in such activities as making
craft products where the individual
voluntarily participates in such activities and the products become the property of the individual making them, or
all of the funds resulting from the sale
of the products are divided among the
participants in the activity or are used
in purchasing additional materials to
make craft products.
(h) Special minimum wage is a wage
authorized under a certificate issued to
an employer under this part that is less
than the statutory minimum wage.
(i) Commensurate wage is a special
minimum wage paid to a worker with a
disability which is based on the worker’s individual productivity in propor-
tion to the wage and productivity of
experienced nondisabled workers performing essentially the same type,
quality, and quantity of work in the vicinity in which the individual under
certificate is employed. For example,
the commensurate wage of a worker
with a disability who is 75% as productive as the average experienced nondisabled worker, taking into consideration the type, quality, and quantity of
work of the disabled worker, would be
set at 75% of the wage paid to the nondisabled worker. For purposes of these
regulations, a commensurate wage is
always a special minimum wage, i.e., a
wage below the statutory minimum.
(j) Vicinity or locality means the geographic area from which the labor force
of the community is drawn.
(k) Experienced worker means a worker who has learned the basic elements
or requirements of the work to be performed, ordinarily by completion of a
probationary or training period. Typically, such a worker will have received
at least one pay raise after successful
completion of the probationary or
training period.
§ 525.4 Patient workers.
With respect to patient workers, as
defined in § 525.3(e), a major factor in
determining if an employment relationship exists is whether the work
performed is of any consequential economic benefit to the institution. Generally, work shall be considered to be
of consequential economic benefit if it
is of the type that workers without disabilities normally perform, in whole or
in part in the institution or elsewhere.
However, a patient does not become an
employee if he or she merely performs
personal housekeeping chores, such as
maintaining his or her own quarters, or
receives a token remuneration in connection with such services. It may also
be possible for patients in family-like
settings such as group homes to rotate
or share household tasks or chores
without becoming employees.
§ 525.5 Wage payments.
(a) An individual whose earning or
productive capacity is not impaired for
the work being performed cannot be
employed under a certificate issued
pursuant to this part and must be paid
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§ 525.6
29 CFR Ch. V (7–1–19 Edition)
at least the applicable minimum wage.
An individual whose earning or productive capacity is impaired to the extent
that the individual is unable to earn at
least the applicable minimum wage
may be paid a commensurate wage, but
only after the employer has obtained a
certificate authorizing payment of special minimum wages from the appropriate office of the Wage and Hour Division of the Department of Labor.
(b) With respect to patient workers
employed in institutions, no deductions can be made from such individuals’ commensurate wages to cover the
cost of room, board, or other services
provided by the facility. Such an individual must receive his or her wages
free and clear, except for amounts deducted for taxes assessed against the
employee and any voluntary wage assignments directed by the employee.
(See part 531 of this title.) However, it
is not the intention of these regulations to preclude the institution thereafter from assessing or collecting
charges for room, board, and other
services actually provided to an individual to the extent permitted by applicable Federal or State law and on
the same basis as it assesses and collects from nonworking patients.
§ 525.6 Compensable time.
Individuals employed subject to this
part must be compensated for all hours
worked. Compensable time includes
not only those hours during which the
individual is actually performing productive work but also includes those
hours when no work is performed but
the individual is required by the employer to remain available for the next
assignment. However, where the individual is completely relieved from duty
and is not required to remain available
for the next assignment, such time will
not be considered compensable time.
For example, an individual employed
by a rehabilitation facility would not
be engaged in a compensable activity
where such individual is completely relieved from duty but is provided therapy or the opportunity to participate
in an alternative program or activity
in the facility not involving work and
not directly related to the worker’s job
(e.g., self-help skills training, recreation, job seeking skills training, inde-
pendent living skills, or adult basic
education). The burden of establishing
that such hours are not compensable
rests with the facility and such hours
must be clearly distinguishable from
compensable hours. (For further information on compensable time in general
under FLSA, see part 785 of this title.)
§ 525.7
Application for certificates.
(a) Application for a certificate may
be filed by any employer with the Regional Office of the Wage and Hour Division having administrative jurisdiction over the geographic area in which
the employment is to take place.
(b) The employer shall provide answers to all of the applicable questions
contained on the application form provided by the Regional Office.
(c) The application shall be signed by
the employer or the employer’s authorized representative.
§ 525.8 Special provisions
porary authority.
for
(a) Temporary authority may be
granted to an employer permitting the
employment of workers with disabilities pursuant to a vocational rehabilitation program of the Veterans Administration for veterans with a service-incurred disability or a vocational rehabilitation program administered by a
State agency.
(b) Temporary authority is effective
for 90 days from the date the appropriate section of the application form
is signed and completed by the duly
designated representative of the State
agency or the Veterans Administration. Such authority may not be renewed or extended by the issuing agency.
(c) The signed application constitutes the temporary authority to
employ workers with disabilities at
special minimum wage rates. A copy of
the application must be forwarded
within 10 days to the appropriate Regional Office of the Wage and Hour Division. Upon receipt, the application
will be reviewed and, where appropriate, a certificate will be issued by
the Regional Office. Where additional
information is required or certification
is denied, the applicant will receive notification from the Regional Office.
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Wage and Hour Division, Labor
§ 525.10
§ 525.9 Criteria for employment of
workers with disabilities under certificates at special minimum wage
rates.
(a) In order to determine that special
minimum wage rates are necessary in
order to prevent the curtailment of opportunities for employment, the following criteria will be considered:
(1) The nature and extent of the disabilities of the individuals employed as
these disabilities relate to the individuals’ productivity;
(2) The prevailing wages of experienced employees not disabled for the
job who are employed in the vicinity in
industry engaged in work comparable
to that performed at the special minimum wage rate;
(3) The productivity of the workers
with disabilities compared to the norm
established for nondisabled workers
through the use of a verifiable work
measurement method (see § 525.12(h)) or
the productivity of experienced nondisabled workers employed in the vicinity on comparable work; and,
(4) The wage rates to be paid to the
workers with disabilities for work comparable to that performed by experienced nondisabled workers.
(b) In order to be granted a certificate authorizing the employment of
workers with disabilities at special
minimum wage rates, the employer
must provide the following written assurances concerning such employment:
(1) In the case of individuals paid
hourly rates, the special minimum
wage rates will be reviewed by the employer at periodic intervals at a minimum of once every six months; and,
(2) Wages for all employees will be
adjusted by the employer at periodic
intervals at a minimum of once each
year to reflect changes in the prevailing wages paid to experienced nondisabled individuals employed in the
locality for essentially the same type
of work.
§ 525.10 Prevailing wage rates.
(a) A prevailing wage rate is a wage
rate that is paid to an experienced
worker not disabled for the work to be
performed. The Department recognizes
that there may be more than one wage
rate for a specific type of work in a
given area. An employer must be able
to demonstrate that the rate being
used as prevailing for determining a
commensurate wage was objectively
determined according to the guidelines
contained in this section.
(b) An employer whose work force
primarily consists of nondisabled workers or who employs more than a token
number of nondisabled workers doing
similar work may use as the prevailing
wage the wage rate paid to that employer’s experienced nondisabled employees performing similar work.
Where an agency places a worker or
workers with disabilities on the premises of an employer described above,
the wage paid to the employer’s experienced workers may be used as prevailing.
(c) An employer whose work force
primarily consists of workers disabled
for the work to be performed may determine the prevailing wage by
ascertaining the wage rates paid to the
experienced nondisabled workers of
other employers in the vicinity. Such
data may be obtained by surveying
comparable firms in the area that employ primarily nondisabled workers
doing similar work. The firms surveyed
must be representative of comparable
firms in terms of wages paid to experienced workers doing similar work. The
appropriate size of such a sample will
depend on the number of firms doing
similar work but should include no less
than three firms unless there are fewer
firms doing such work in the area. A
comparable firm is one which is of
similar size in terms of employees or
which competes for or bids on contracts of a similar size or nature. Employers may contact other sources such
as the Bureau of Labor Statistics or
private or State employment services
where surveys are not practical. If
similar work cannot be found in the
area defined by the geographic labor
market, the closest comparable community may be used.
(d) The prevailing wage rate must be
based upon the wage rate paid to experienced nondisabled workers as defined
elsewhere in these regulations. Employment services which only provide
entry level wage data are not acceptable as sources for prevailing wage information as required in these regulations.
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§ 525.11
29 CFR Ch. V (7–1–19 Edition)
(e) There is no prescribed method for
tabulating the results of a prevailing
wage survey. For example, either a
weighted or unweighted average would
be acceptable provided the employer is
consistent in the methodology used.
(f) The prevailing wage must be based
upon work utilizing similar methods
and equipment. Where the employer is
unable to obtain the prevailing wage
for a specific job to be performed on
the premises, such as collating documents, it would be acceptable to use as
the prevailing wage the wage paid to
experienced individuals employed in
similar jobs such as file clerk or general office clerk, requiring the same
general skill levels.
(g) The following information should
be recorded in documenting the determination of prevailing wage rates:
(1) Date of contact with firm or other
source;
(2) Name, address, and phone number
of firm or other source contacted;
(3) Individual contacted within firm
or source;
(4) Title of individual contacted;
(5) Wage rate information provided;
(6) Brief description of work for
which wage information is provided;
(7) Basis for the conclusion that wage
rate is not based upon an entry level
position. (See also § 525.10(c).)
(h) A prevailing wage may not be less
than the minimum wage specified in
section 6(a) of FLSA.
§ 525.11
Issuance of certificates.
(a) Upon consideration of the criteria
cited in these regulations, a special
certificate may be issued.
(b) If a special minimum wage certificate is issued, a copy shall be sent to
the employer. If denied, the employer
will be notified in writing and told the
reasons for the denial, as well as the
right to petition under § 525.18.
§ 525.12 Terms and conditions of special minimum wage certificates.
(a) A special minimum wage certificate shall specify the terms and conditions under which it is granted.
(b) A special minimum wage certificate shall apply to all workers employed by the employer to which the
special certificate is granted provided
such workers are in fact disabled for
the work they are to perform.
(c) A special minimum wage certificate shall be effective for a period to be
designated by the Administrator.
Workers with disabilities may be paid
wages lower than the statutory minimum wage rate set forth in section 6
of FLSA only during the effective period of the certificate.
(d) Workers paid under special minimum wage certificates shall be paid
wages commensurate with those paid
experienced nondisabled workers employed in the vicinity in which they
are employed for essentially the same
type, quality, and quantity of work.
(e) Workers with disabilities shall be
paid not less than one and one-half
times their regular rates of pay for all
hours worked in excess of the maximum workweek applicable under section 7 of FLSA.
(f) The wages of all workers paid a
special minimum wage under this part
shall be adjusted by the employer at
periodic intervals at a minimum of
once a year to reflect changes in the
prevailing wages paid to experienced
individuals not disabled for the work to
be performed employed in the vicinity
for essentially the same type of work.
(g) Each worker with a disability
and, where appropriate, a parent or
guardian of the worker, shall be informed, orally and in writing, of the
terms of the certificate under which
such worker is employed. This requirement may be satisfied by making copies of the certificate available. Where a
worker with disabilities displays an understanding of the terms of a certificate and requests that other parties
not be informed, it is not necessary to
inform a parent or guardian.
(h) In establishing piece rates for
workers with disabilities, the following
criteria shall be used:
(1) Industrial work measurement
methods such as stop watch time studies,
predetermined
time
systems,
standard data, or other measurement
methods (hereinafter referred to as
‘‘work measurement methods’’) shall
be used by the employer to establish
standard production rates of workers
not disabled for the work to be performed. The Department will accept
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the use of whatever method an employer chooses to use. However, the
employer has the responsibility of
demonstrating that a particular method is generally accepted by industrial
engineers and has been properly executed. No specific training or certification will be required. Where work
measurement methods have already
been applied by another employer or
source, and documentation exists to
show that the methods used are the
same, it is not necessary to repeat
these methods to establish production
standards.
(i) The piece rates shall be based on
the standard production rates (number
of units an experienced worker not disabled for the work is expected to
produce per hour) and the prevailing
industry wage rate paid experienced
nondisabled workers in the vicinity for
essentially the same type and quality
of work or for work requiring similar
skill. (Prevailing industry wage rate
divided by the standard number of
units per hour equals the piece rate.).
(ii) Piece rates shall not be less than
the prevailing piece rates paid experienced workers not disabled for the
work doing the same or similar work in
the vicinity when such piece rates exist
and can be compared with the actual
employment situations of the workers
with disabilities.
(2) Any work measurement method
used to establish piece rates shall be
verifiable through the use of established industrial work measurement
techniques.
(i) If stop watch time studies are
made, they shall be made with a person
or persons whose productivity represents normal or near normal performance. If their productivity does
not represent normal or near normal
performance, adjustments of performance shall be made. Such adjustments,
sometimes called ‘‘performance rating’’ or ‘‘leveling’’ shall be made only
by a person knowledgeable in this technique, as evidenced by successful completion of training in this area. The
persons observed should be given time
to practice the work to be performed in
order to provide them with an opportunity to overcome the initial learning
curve. The persons observed shall be
trained to use the specific work meth-
od and tools which are available to
workers with disabilities employed
under special minimum wage certificates.
(ii) Appropriate time shall be allowed
for personal time, fatigue, and unavoidable delays. Generally, not less than
15% allowances (9–10 minutes per hour)
shall be used in conducting time studies.
(iii) Work measurements shall be
conducted using the same work method
that will be utilized by the workers
with disabilities. When modifications
such as jigs or fixtures are made to
production methods to accommodate
special needs of individual workers
with disabilities, additional work
measurements need not be conducted
where the modifications enable the
workers with disabilities to perform
the work or increase productivity but
would impede a worker without disabilities. Where workers with disabilities
do not have a method available to
them, as for example where an adequate number of machines are not
available, a second work measurement
should be conducted.
(i) Each worker with a disability employed on a piece rate basis should be
paid full earnings. Employers may
‘‘pool’’ earnings only where piece rates
cannot be established for each individual worker. An example of this situation is a team production operation
where each worker’s individual contribution to the finished product cannot be determined separately. However,
in such situations, the employer should
make every effort to objectively divide
the earnings according to the productivity level of each individual worker.
(j) The following terms shall be met
for workers with disabilities employed
at hourly rates:
(1) Hourly rates shall be based upon
the prevailing hourly wage rates paid
to experienced workers not disabled for
the job doing essentially the same type
of work and using similar methods or
equipment in the vicinity. (See also
§ 525.10.)
(2) An initial evaluation of a worker’s
productivity shall be made within the
first month after employment begins in
order to determine the worker’s commensurate wage rate. The results of
the evaluation shall be recorded and
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the worker’s wages shall be adjusted
accordingly no later than the first
complete pay period following the initial evaluation. Each worker is entitled
to commensurate wages for all hours
worked. Where the wages paid to the
worker during pay periods prior to the
initial evaluation were less than the
commensurate wage indicated by the
evaluation, the employer must compensate the worker for any such difference unless it can be demonstrated
that the initial payments reflected the
commensurate wage due at that time.
(3) Upon completion of not more than
six months of employment, a review
shall be made with respect to the quantity and quality of work of each hourly-rated worker with a disability as
compared to that of nondisabled workers engaged in similar work or work requiring similar skills and the findings
shall be recorded. The worker’s productivity shall then be reviewed and the
findings recorded at least every 6
months thereafter. A review and recording of productivity shall also be
made after a worker changes jobs and
at least every 6 months thereafter. The
worker’s wages shall be adjusted accordingly no later than the first complete pay period following each review.
Conducting reviews at six-month intervals should be viewed as a minimum requirement since workers with disabilities are entitled to commensurate
wages for all hours worked. Reviews
must be conducted in a manner and frequency to insure payment of commensurate wages. For example, evaluations
should not be conducted before a worker has had an opportunity to become
familiar with the job or at a time when
the worker is fatigued or subject to
conditions that result in less than normal productivity.
(4) Each review should contain, as a
minimum and in addition to the data
cited above, the following: name of the
individual being reviewed; date and
time of the review; and, name and position of the individual doing the review.
§ 525.13 Renewal of special minimum
wage certificates.
(a) Applications may be filed for renewal of special minimum wage certificates.
(b) If an application for renewal has
been properly and timely filed, an existing special minimum wage certificate shall remain in effect until the application for renewal has been granted
or denied.
(c) Workers with disabilities may not
continue to be paid special minimum
wages after notice that an application
for renewal has been denied.
(d) Except in cases of willfulness or
those in which the public interest requires otherwise, before an application
for renewal is denied facts or conduct
which may warrant such action shall
be called to the attention of the employer in writing and such employer
shall be afforded an opportunity to
demonstrate or achieve compliance
with all legal requirements.
§ 525.14 Posting of notices.
Every employer having workers who
are employed under special minimum
wage certificates shall at all times display and make available to employees
a poster as prescribed and supplied by
the Administrator. The Administrator
will make available, upon request,
posters in other formats such as Braille
or recorded tapes. Such a poster will
explain, in general terms, the conditions under which special minimum
wages may be paid and shall be posted
in a conspicuous place on the employer’s premises where it may be readily
observed by the workers with disabilities, the parents and guardians of such
workers, and other workers. Where an
employer finds it inappropriate to post
such a notice, this requirement may be
satisfied by providing the poster directly to all employees subject to its
terms.
§ 525.15 Industrial homework.
(a) Where the employer is an organization or institution carrying out a
recognized program of rehabilitation
for workers with disabilities and holds
a special certificate issued pursuant to
this part, certification under regulations governing the employment of industrial homeworkers (29 CFR part 530)
is not required.
(b) For all other types of employers,
special rules apply to the employment
of homeworkers in the following industries: Jewelry manufacturing, knitted
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§ 525.19
outerwear, gloves and mittens, buttons
and buckles, handkerchief manufacturing, embroideries, and women’s apparel. (See 29 CFR part 530.)
§ 525.16 Records to be kept by employers.
Every employer, or where appropriate (in the case of records verifying
the workers’ disabilities) the referring
agency or facility, of workers employed under special minimum wage
certificates shall maintain and have
available for inspection records indicating:
(a) Verification of the workers’ disabilities;
(b) Evidence of the productivity of
each worker with a disability gathered
on a continuing basis or at periodic intervals (not to exceed six months in
the case of employees paid hourly wage
rates);
(c) The prevailing wages paid workers
not disabled for the job performed who
are employed in industry in the vicinity for essentially the same type of
work using similar methods and equipment as that used by each worker with
disabilities employed under a special
minimum wage certificate (see also
§ 525.10(b) and (d));
(d) The production standards and
supporting documentation for nondisabled workers for each job being
performed by workers with disabilities
employed under special certificates;
and
(e) The records required under all of
the applicable provisions of part 516 of
this title, except that any provision
pertaining to homeworker handbooks
shall not be applicable to workers with
disabilities who are employed by a recognized nonprofit rehabilitation facility and working in or about a home,
apartment, tenement, or room in a residential establishment. (See § 525.15)
Records required by this section shall
be maintained and preserved for the periods specified in part 516 of this title.
(Approved by the Office of Management and
Budget under control number 1235–0001)
[54 FR 32928, Aug. 10, 1989, as amended at 82
FR 2228, Jan. 9, 2017]
§ 525.17
Revocation of certificates.
(a) A special minimum wage certificate may be revoked for cause at any
time. A certificate may be revoked:
(1) As of the date of issuance, if it is
found that misrepresentations or false
statements have been made in obtaining the certificate or in permitting a
worker with a disability to be employed thereunder;
(2) As of the date of violation, if it is
found that any of the provisions of
FLSA or of the terms of the certificate
have been violated; or
(3) As of the date of notice of revocation, if it is found that the certificate
is no longer necessary in order to prevent curtailment of opportunities for
employment, or that the requirements
of these regulations other than those
referred to in paragraph (a)(2) of this
section have not been complied with.
(b) Except in cases of willfulness or
those in which the public interest requires otherwise, before any certificate
shall be revoked, facts or conduct
which may warrant such action shall
be called to the attention of the employer in writing and such employer
shall be afforded an opportunity to
demonstrate or achieve compliance
with all legal requirements.
§ 525.18
Review.
Any person aggrieved by any action
of the Administrator taken pursuant to
this part may, within 60 days or such
additional time as the Administrator
may allow, file with the Administrator
a petition for review. Such review, if
granted, shall be made by the Administrator. Other interested persons, to the
extent it is deemed appropriate, may
be afforded an opportunity to present
data and views.
§ 525.19
Investigations and hearings.
The Administrator may conduct an
investigation, which may include a
hearing, prior to taking any action
pursuant to these regulations. To the
extent it is deemed appropriate, the
Administrator may provide an opportunity to other interested persons to
present data and views. Proceedings
initiated pursuant to this section are
separate from those taken pursuant to
FLSA section 14(c)(5) and § 525.22.
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§ 525.20
§ 525.20
29 CFR Ch. V (7–1–19 Edition)
Relation to other laws.
No provision of these regulations, or
of any special minimum wage certificate issued thereunder, shall excuse
noncompliance with any other Federal
or State law or municipal ordinance establishing higher standards.
§ 525.21
Lowering of wage rates.
(a) No employer may reduce the minimum hourly wage rate, guaranteed by
a special minimum wage certificate in
effect on June 1, 1986, of any worker
with disabilities from June 1, 1986 until
May 31, 1988, without prior authorization of the Secretary.
(b) This provision applies to those
workers with disabilities who were:
(1) Employed during the pay period
which included June 1, 1986, even if no
work was performed during that pay
period; and
(2) Employed under a group or individual special minimum wage certificate which specified a minimum guaranteed rate, i.e., a special certificate
issued under former section 14(c) (1) or
(2)(b) of FLSA.
(c) In order to obtain authority to
lower the wage rate of a worker with a
disability to whom this provision applies to a rate below the certificate
rate, the employer must submit information as prescribed under this section
to the appropriate Regional Office. The
burden of establishing the necessity of
lowering the wage of a worker with a
disability rests with the employer.
(d) In reviewing a request to lower a
wage rate of a worker with a disability,
documented evidence of the following
will be considered:
(1) Any change in the worker’s disabling condition which has a substantially negative impact on productive
capacity;
(2) Any change in the type of work
being performed in the facility which
would affect the productivity of the
worker with a disability or which
would result in the application of a
lower prevailing wage rate;
(3) Any change in general economic
conditions in the locality in which the
work is performed which results in
lower prevailing wage rates.
(e) A wage rate may not be lowered
until authorization is obtained.
§ 525.22 Employee’s right to petition.
(a) Any employee receiving a special
minimum wage at a rate specified pursuant to subsection 14(c) of FLSA or
the parent or guardian of such an employee may petition the Secretary to
obtain a review of such special minimum wage rate. No particular form of
petition is required, except that a petition must be signed by the individual,
or the parent or guardian of the individual, and should contain the name
and address of the employee and the
name and address of the employee’s
employer. A petition may be filed in
person or by mail with the Administrator of the Wage and Hour Division,
U.S. Department of Labor, Room S3502,
200 Constitution Avenue NW., Washington, DC 20210. The petitioner may be
represented by counsel in any stage of
such proceedings. Upon receipt, the petition shall be forwarded immediately
to the Chief Administrative Law
Judge.
(b) Upon receipt of a petition, the
Chief Administrative Law Judge shall,
within 10 days of the receipt of the petition by the Secretary, appoint an Administrative Law Judge (ALJ) to hear
the case. Upon receipt, the ALJ shall
notify the employer named in the petition. The ALJ shall also notify the employee, the employer, the Administrator, and the Associate Solicitor for
Fair Labor Standards of the time and
place of the hearing. The date of the
hearing shall be not more than 30 days
after the assignment of the case to the
ALJ. All the parties shall be given at
least eight days’ notice of such hearing. Because of the time constraints
imposed by the statute, requests for
postponement shall be granted only
sparingly and for compelling reasons.
(c) Hearings held under this subpart
shall be conducted, consistent with
statutory time limitations, under the
Department’s rules of practice and procedure for administrative hearings
found in 29 CFR part 18. There shall be
a minimum of formality in the proceeding consistent with orderly procedure. Any employer who intends to
participate in the proceeding shall provide to the ALJ, and shall serve on the
petitioner and the Associate Solicitor
for Fair Labor Standards no later than
15 days prior to the commencement of
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Wage and Hour Division, Labor
§ 525.23
the hearing, or as soon as practical depending on when the notice of a hearing as required under paragraph (b) of
this section was received, that documentary evidence pertaining to the
employee or employees identified in
the petition which is contained in the
records required by § 525.16 (a), (b), (c)
and (d). The Administrator shall be
permitted to participate by counsel in
the proceeding upon application.
(d) In determining whether any special minimum wage rate is justified,
the ALJ shall consider, to the extent
evidence is available, the productivity
of the employee or employees identified in the petition and the conditions
under which such productivity was
measured, and the productivity of
other employees performing work of
essentially the same type and quality
for other employers in the same vicinity and the conditions under which
much productivity was mesured. In
these proceedings, the burden of proof
on all matters relating to the propriety
of a wage at issue shall rest with the
employer.
(e) The ALJ shall issue a decision
within 30 days after the termination of
the hearing and shall serve the decision
on the Administrator and all interested
parties by Express Mail or other similar system guaranteeing one-day delivery. The decision shall contain appropriate findings and conclusions and an
order. If the ALJ finds that the special
minimum wage being paid or which has
been paid is not justified, the order
shall specify the lawful rate and the period of employment to which the rate
is applicable. In the absence of evidence sufficient to support the conclusion that the proper wage should be
less than the minimum wage, the ALJ
shall order that the minimum wage be
paid.
(f) Within 15 days after the date of
the decision of the ALJ, the petitioner,
the Administrator, or the employer
who seeks review thereof may request
review by the Secretary. No particular
form of request is required, except that
a request must be in writing and must
attach a copy of the ALJ’s decision.
Requests for review shall be filed with
the Secretary of Labor, 200 Constitution Ave. NW., Washington, DC 20210.
Any other interested party may file a
reply thereto with the Secretary and
the Administrator within 5 working
days of receipt of such request for review. The request for review and reply
thereto shall be transmitted by the Administrator to all interested parties by
Express Mail or other similar system
guaranteeing one-day delivery.
(g) The decision of the ALJ shall be
deemed to be final agency action 30
days after issuance thereof, unless
within 30 days of the date of the decision the Secretary grants a request to
review the decision. Where such request for review is granted, within 30
days after receipt of such request the
Secretary shall review the record and
shall either adopt the decision of the
ALJ or issue exceptions. The decision
of the ALJ, together with any exceptions issued by the Secretary, shall be
deemed to be a final agency action.
(h) Within 30 days of issuance of the
final action of the Secretary reviewing
the decision of the ALJ or declining to
grant such review, any person adversely affected or aggrieved by such
action may seek judicial review pursuant to chapter 7 of title 5, United
States Code. The record of the case, including the record of proceedings before the ALJ, shall be transmitted by
the Secretary to the appropriate court
pursuant to the rules of such court.
[54 FR 32928, Aug. 10, 1989, as amended at 82
FR 2228, Jan. 9, 2017]
§ 525.23
Work activities centers.
Nothing in these regulations shall be
interpreted to prevent an employer
from maintaining or establishing work
activities centers to provide therapeutic activities for workers with disabilities as long as the employer complies with the requirement of these regulations. Work activities centers shall
include centers planned and designed
to provide therapeutic activities for
workers with severe disabilities affecting their productive capacity. Any establishment whose workers with disabilities are employed at special minimum wages must comply with the requirements of this part, regardless of
the designation of such establishment.
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§ 525.24
29 CFR Ch. V (7–1–19 Edition)
§ 525.24 Advisory Committee on Special Minimum Wages.
The Advisory Committee on Special
Minimum Wages, the members of
which are appointed by the Secretary,
shall advise and make recommendations to the Administrator concerning
the administration and enforcement of
these regulations and the need for
amendments thereof and shall serve
such other functions as may be desired
by the Administrator.
PART 527 [RESERVED]
PART 528—ANNULMENT OR WITHDRAWAL OF CERTIFICATES FOR
THE EMPLOYMENT OF STUDENTLEARNERS, APPRENTICES, LEARNERS,
MESSENGERS,
HANDICAPPED PERSONS, STUDENTWORKERS, AND FULL-TIME STUDENTS IN AGRICULTURE OR IN
RETAIL OR SERVICE ESTABLISHMENTS AT SPECIAL MINIMUM
WAGE RATES
Sec.
528.1 Applicability of the regulations in this
part.
528.2 Definition of terms.
528.3 Withdrawal and annulment of certificates.
528.4 According opportunity to demonstrate
or achieve compliance.
528.5 Proceedings for withdrawal or annulment.
528.6 Review.
528.7 Effect of order of annulment or withdrawal.
AUTHORITY: Sec. 14, 52 Stat. 1068, as amended; 29 U.S.C. 214, unless otherwise noted.
§ 528.1 Applicability of the regulations
in this part.
The regulations in this part shall
govern the annulment or withdrawal of
any certificate except a temporary certificate issued pending final action on
an application, issued pursuant to
parts 519, 520, 521, 522, 523, 524, and 527
of this chapter, and having effect under
section 14 of the Fair Labor Standards
Act of 1938.
[27 FR 3994, Apr. 26, 1962]
§ 528.2
Definition of terms.
As used in the regulations contained
in this part, the term:
(a) Withdrawal shall mean termination of validity of a certificate with
prospective effect from the time of the
action of withdrawal.
(b) Annulment shall mean withdrawal
of a certificate with retroactive effect
to the date of issuance.
(c) Authorized representative shall
mean: (1) The Assistant Regional Administrators for the Wage and Hour Division (who are authorized to redelegate this authority) within their respective regions, and (2) the Caribbean
Director of the Wage and Hour Division
for the area covered by the Caribbean
office.
(d) Area director shall include any
area director of the Wage and Hour Division.
(Secretary’s Order No. 16–75, dated Nov. 25,
1975 (40 FR 55913). Employment Standards
Order No. 76–2, dated Feb. 23, 1976 (41 FR
9016))
[43 FR 28469, June 30, 1978]
§ 528.3 Withdrawal and annulment of
certificates.
(a) An authorized representative may
withdraw a certificate from any employer within that representative’s region who, acting under color of any
certificate or application for the employment of learners, handicapped
workers, student workers, student
learners, apprentices, messengers, or
full-time students in agriculture, retail, or service establishments, or in institutions of higher education at subminimum wages under section 14 of the
act, fails to comply with the limitations in such certificate or otherwise
violates the act.
(b) An authorized representative may
annul a certificate affected by mistake
in its issuance if the employer knowingly induced or knowingly took advantage of the mistake. Where the employer did not knowingly induce the
mistake but knowingly took advantage
of it, a new certificate shall be issued
by the authorized representative if, and
on such terms as, such certificate
would have been issued had there been
no mistake limited in its term from
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Wage and Hour Division, Labor
§ 528.5
the date of issuance to the date of annulment of the annulled certificate.
(c) A certificate may be withdrawn in
the public interest by a representative
authorized to issue such type of certificate whenever any part of the exemption it provides is no longer necessary
to prevent curtailment of opportunities
for employment. If appropriate, a more
limited replacement certificate may be
issued by the authorized representative.
(Secretary’s Order No. 16–75, dated Nov. 25,
1975 (40 FR 55913); Employment Standards
Order No. 76–2, dated Feb. 23, 1976 (41 FR
9016))
[43 FR 28469, June 30, 1978]
§ 528.4 According opportunity to demonstrate or achieve compliance.
Prior to instituting proceedings for
withdrawal of a certificate under paragraph (a) of § 528.3, except in cases of
willfullness, an area director shall mail
a letter to the employer setting forth
alleged facts or conduct which may
warrant withdrawal of the certificate,
and fixing a time and a place for a conference at which the employer shall be
accorded an opportunity to show that
no cause for withdrawal under § 528.3(a)
exists or that compliance has been
achieved by paying wages improperly
withheld and by taking steps adequate
to insure that new cause for annulment
or withdrawal will not occur. By written report to the appropriate authorized representative, a copy of which
shall be mailed to the employer, the
area director shall concisely summarize the conference and shall include
conclusions as to whether the employer
demonstrated or achieved compliance.
If the authorized representative is satisfied that the employer either demonstrated or achieved such compliance,
no proceedings shall be instituted
under § 528.3(a) for the withdrawal of
the certificate.
(Secretary’s Order No. 16–75, dated Nov. 25,
1975 (40 FR 55913), Employment Standards
Order 76–2, dated Feb. 23, 1976 (41 FR 9016))
[43 FR 28469, June 30, 1978]
§ 528.5 Proceedings for withdrawal or
annulment.
The representative authorized to
withdraw or annul a certificate under
§ 528.3 shall institute proceedings by a
letter mailed to the employer and,
where appropriate, to the apprenticeship agency (in the case of apprentice
certificates) or the responsible school
official (in the case of student-learner
certificates), setting forth alleged facts
which may warrant such annulment or
withdrawal and advising the employer
that such an annulment or withdrawal
of the scope provided in § 528.7 will take
effect at a time specified unless facts
are presented which convince the authorized representative that such action should not be taken. The letter
shall advise such person, agency, or official of the right to respond by mail or
to appear by or with counsel or by
other duly qualified representative at a
specified time and place. If there is no
timely objection to the withdrawal or
annulment thus proposed, it shall be
deemed effective according to the
terms of the letter instituting the annulment or withdrawal proceeding
without the necessity of any further
action. If objection to the annulment
or withdrawal as proposed is made
within the specified time the further
proceedings shall be as informal as
practicable commensurate with orderly
dispatch and fairness. Department of
Labor investigation files or reports or
portions thereof may be considered in
such proceedings to the extent they are
made available for examination during
the proceedings. If objection to the proposed annulment or withdrawal is
made by such specified time, the authorized representative shall, after
considering all pertinent matters presented, mail a letter to the employer
and, where appropriate, to the apprenticeship agency or the responsible
school official, setting out that representative’s findings of specific pertinent facts and conclusions and that
representative’s order concerning the
proposed annulment or withdrawal. In
proceedings instituted for annulment,
the order may provide for withdrawal
instead of annulment if the proof warrants such withdrawal but fails to support adequately the annulment. Such
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§ 528.6
29 CFR Ch. V (7–1–19 Edition)
an order shall be deemed issued and effective according to its terms when
mailed.
(Secretary’s Order No. 16–75, dated Nov. 25,
1975 (40 FR 55913); Employment Standards
Order No. 76–2, dated Feb. 23, 1976 (41 FR
9016))
[43 FR 28469, June 30, 1978]
§ 528.6
Review.
Any employer and, when appropriate,
any apprenticeship agency or responsible school official, who expressed
timely objection to the proposed action
prior to issuance of an order of annulment or withdrawal may obtain review,
limited to the question of whether the
findings of fact support the order under
the regulations in this part. Application for such review shall be in writing
addressed to the Administrator and
mailed within 15 days after the order is
issued. The Administrator may affirm,
modify, or reverse the order, or may remand it for further proceedings. The
order under review shall not be stayed
in effect pending such review. Any aggrieved person may obtain such review
of an order entered in proceedings instituted under paragraph (c) of § 528.3.
PART
530—EMPLOYMENT
OF
HOMEWORKERS IN CERTAIN INDUSTRIES
Subpart A—General
Sec.
530.1 Definitions.
530.2 Restriction of homework.
530.3 Application
forms
for
individual
homeworker certificates.
530.4 Terms and conditions for the issuance
of individual homeworker certificates.
530.5 Investigation.
530.6 Termination
of
individual
homeworker certificates.
530.7 Revocation and cancellation of individual homeworker certificates.
530.8 Preservation
of
individual
homeworker certificates.
530.9 Records and reports.
530.10 Delegation of authority to grant,
deny,
or
cancel
an
individual
homeworker certificate.
530.11 Petition for review.
530.12 Special provisions.
Subpart B—Homeworker Employer
Certificates
530.101
530.102
530.103
530.104
530.105
[21 FR 5316, July 17, 1956, as amended at 22
FR 5683, July 18, 1957]
§ 528.7 Effect of order of annulment or
withdrawal.
Except as otherwise expressly provided in such order, any order of annulment or withdrawal under paragraph
(a) or (b) of § 528.3 shall be effective to
terminate all certifications to which
the regulations in this part apply in effect at the establishment where the
cause for withdrawal arose or where
the annulled certificate had effect.
After such annulment or withdrawal,
such employer shall be ineligible to obtain or exercise the privileges granted
in such a certificate until he satisfies
the issuing officer that he will not
again give cause for annulment or
withdrawal if a certificate is issued.
(Secretary’s Order No. 16–75, dated Nov. 25,
1975 (40 FR 55913); Employment Standards
Order No 76–2, dated Feb. 23, 1976 (41 FR
9016))
[43 FR 28469, June 30, 1978]
General.
Requests for employer certificates.
Employer assurances.
Bonding or security payments.
Investigations.
Subpart C—Denial/Revocation of
Homeworker Employer Certificates
530.201 Conflict with State law.
530.202 Piece rates—work measurement.
530.203 Outstanding violations and open investigations.
530.204 Discretionary denial or revocation.
530.205 Mandatory denial or revocation.
530.206 Special circumstances.
Subpart D—Civil Money Penalties
530.301 General.
530.302 Amounts of civil money penalties.
530.303 Considerations
in
determining
amounts.
530.304 Procedures for assessment.
Subpart E—Administrative Procedures
530.401 Applicability of procedures and
rules.
530.402 Notice of determination.
530.403 Request for hearing.
530.404 Referral to Administrative Law
Judge.
530.405 General.
530.406 Decision and order of Administrative
Law Judge.
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§ 530.1
530.407 Procedures for initiating and undertaking review.
530.408 Notice of the Secretary to review decision.
530.409 Final decision of the Secretary.
530.410 Special procedures.
530.411 Emergency certificate revocation
procedures.
530.412 Alternative summary proceedings.
530.413 Certification of the record.
530.414 Equal Access to Justice Act.
AUTHORITY: Sec. 11, 52 Stat. 1066 (29 U.S.C.
211) as amended by sec. 9, 63 Stat. 910 (29
U.S.C. 211(d)); Secretary’s Order No. 01–2014
(Dec. 19, 2014), 79 FR 77527 (Dec. 24, 2014); 28
U.S.C. 2461 note (Federal Civil Penalties Inflation Adjustment Act of 1990); Pub. L. 114–
74 at § 701, 129 Stat 584.
SOURCE: 24 FR 729, Feb. 3, 1959, unless otherwise noted.
Subpart A—General
§ 530.1
Definitions.
(a) The meaning of the terms person,
employ, employer, employee, goods,
and production, as used in this part, is
the same as in the Fair Labor Standards Act of 1938, as amended.
(b) Administrator as used in this part
means the Administrator of the Wage
and Hour Division, U.S. Department of
Labor, or an authorized representative
of the Administrator.
(c)
Industrial
homeworker
and
homeworker, as used in this part, mean
any employee employed or suffered or
permitted to perform industrial homework for an employer.
(d) Industrial homework, as used in
this part, means the production by any
person in or about a home, apartment,
tenement, or room in a residential establishment of goods for an employer
who suffers or permits such production,
regardless of the source (whether obtained from an employer or elsewhere)
of
the
materials
used
by
the
homeworker in such production.
(e) The women’s apparel industry is
defined as follows: The production of
women’s, misses’ and juniors’ dresses,
washable service garments, blouses,
and neckwear from woven or purchased
knit fabric; women’s, misses’, children’s and infants’ underwear, nightwear, and negligees from woven fabrics;
corsets and other body supporting garments from any material; other gar-
ments similar to the foregoing; and infants; and children’s outerwear.
(f) The jewelry manufacturing industry is defined as follows:
(1)(i) The manufacturing, processing,
or assembling, wholly or partially from
any material, of jewelry, commonly or
commercially so known. Jewelry as
used herein includes without limitation, religious, school, college, and fraternal insignia; articles of ornament or
adornment designed to be worn on apparel or carried on or about the person,
including, without limitation, cigar
and cigarette cases, holders, and lighters; watch cases; metal mesh bags and
metal watch bracelets; and chain,
mesh, and parts for use in the manufacture of any of the articles included in
this definition. Jewelry as used in this
part does not include pocket knives,
cigar cutters, badges, emblems, military and naval insignia, belt buckles,
and handbag and pocketbook frames
and clasps, or commercial compacts
and vanity cases, except when made
from or embellished with precious metals or precious, semiprecious, synthetic
or imitation stones, or the assaying,
refining, and smelting of base or precious metals.
(ii) The term parts as used in paragraph (e)(1)(i) of this section does not
include parts which are used predominantly for products other than jewelry,
such as springs, blades, and nail files.
The term commercial compacts and vanity cases as used means compacts and
vanity cases which bear the trade name
or mark of a cosmetic manufacturer
and are made for the purpose of distributing or advertising said cosmetics.
(2) The manufacturing, cutting,
polishing, encrusting, engraving, and
setting of precious, semiprecious, synthetic, and imitation stones.
(3) The manufacturing, drilling, and
stringing of pearls, imitation pearls,
and beads designed for use in the manufacture of jewelry.
(4) The term hand-fashioned jewelry as
used in § 530.12(b) means articles of jewelry commonly known as genuine Navajo, Pueblo, Hopi, or Zuni handmade
jewelry which in all elements of design,
fashioning and ornamentation are
handmade by methods and with the
help of only such devices as permit the
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§ 530.1
29 CFR Ch. V (7–1–19 Edition)
maker to determine the shape and design of each individual product: Provided, That silver used in the making of
such jewelry shall be of at least nine
hundred fineness, and that turquoise
and other stones used shall be genuine
stones, uncolored and untreated by artificial means: And provided further,
That power machinery is permitted in
the production of findings, in the cutting and polishing of stones, in the
buffing and polishing of completed
products, and in incidental functions.
Equipment specifically prohibited shall
include hand presses, foot presses, drop
hammers, and similar equipment: And
provided further, That solder may be of
less silver content than nine hundred;
And provided further, That findings may
be mechanically made of any metal by
Indians or others: And provided further,
That turquoise and other stones may
be cut and polished by Indians or others without restrictions as to methods
or equipment used.
(g) The knitted outerwear industry is
defined as follows: The knitting from
any yarn or mixture of yarns and the
further manufacturing, dyeing or other
finishing of knitted garments, knitted
garment sections, or knitted garment
accessories for use as external apparel
or covering which are partially or completely manufactured in the same establishment as that where the knitting
process is performed; and the manufacture of bathing suits from any purchased fabric: Provided, That the manufacturing, dyeing or other finishing of
the following shall not be included:
(1) Knitted fabric, as distinguished
from garment sections or garments, for
sale as such.
(2)
Fulled
suitings,
coatings,
topcoatings, and overcoatings.
(3) Garments or garment accessories
made from purchased fabric, except
bathing suits.
(4) Gloves or mittens.
(5) Hosiery.
(6) Knitted garments or garment accessories for use as underwear, sleeping
wear, or negligees.
(7) Fleece-lined garments made from
knitted fabric containing cotton only
or containing any mixture of cotton
and not more than 25 percent, by
weight, of wool or animal fiber other
than silk.
(8) Knitted shirts of cotton or any
synthetic fiber or any mixture of such
fibers which have been knit on machinery of 10-cut or fine: Provided, That this
exception shall not be construed to exclude from the knitted outerwear industry and the manufacturing, dyeing,
or other finishing of knitted shirts
made in the same establishment as
that where the knitting process is performed, if such shirts are made wholly
or in part of fibers other than those
specified in this clause, or if such
shirts of any fiber are knit on machinery coarser than 10-cut.
(h) The gloves and mittens industry
is defined as follows: The production of
gloves and mittens from any material
or combination of materials, except
athletic gloves and mittens.
(i) The button and buckle manufacturing industry is defined as follows:
The manufacture of buttons, buckles,
and slides, and the manufacture of
blanks and parts for such articles from
any material except metal, for use on
apparel.
(j) The handkerchief manufacturing
industry is defined as follows: The
manufacture of men’s, women’s and
children’s handkerchiefs, plain or ornamented, from any materials.
(k) The embroideries industry is defined as follows: The production of all
kinds of hand and machine-made
embroideries
and
ornamental
stitchings, including but not by way of
limitation, tucking shirring, smocking,
hemstitching, hand rolling, fagoting,
Bonnez embroidery, appliqueing, crochet beading, hand drawing, machine
drawing, rhinestone trimming, sequin
trimming, spangle trimming, eyelets,
passementerie, pleating, the application of rhinestones and nailheads,
stamping and perforating of designs,
Schifli embroidery and laces, burnt-out
laces and velvets, Swiss handmachine
embroidery, thread splitting, embroidery thread cutting, scallop cutting,
lace cutting, lace making-up, makingup of embroidered yard goods, straight
cutting of embroidery and cutting out
of embroidery, embroidery trimmings,
bindings (not made in textile establishments), pipings and emblems: Provided,
That (1) the foregoing when produced
or performed by a manufacturer of a
garment, fabric or other article for use
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Wage and Hour Division, Labor
§ 530.6
on such garment, fabric or other article, and (2) the manufacture of covered
buttons and buckles, shall not be included.
(l) As used throughout this part the
terms ‘‘Secretary’’ or ‘‘Secretary of
Labor’’ shall mean the Secretary of
Labor, U.S. Department of Labor, or
his or her designee.
[24 FR 729, Feb. 3, 1959, as amended at 46 FR
50349, Oct. 9, 1981; 49 FR 22036, May 24, 1984;
53 FR 45722, Nov. 10, 1988; 61 FR 19986, May 3,
1996; 82 FR 2228, Jan. 9, 2017]
§ 530.2
Restriction of homework.
Except as provided in subpart B of
this part, no work in the industries defined in paragraphs (e) through (k) of
§ 530.1 shall be done in or about a home,
apartment, tenement, or room in a residential establishment unless a special
homework certificate issued and in effect pursuant to this part has been obtained for each homeworker or unless
the homeworker is so engaged under
the supervision of a Sheltered Workshop, as defined in § 525.2 of this chapter.
[53 FR 45722, Nov. 10, 1988]
§ 530.3 Application forms for individual homeworker certificates.
Certificates authorizing the employment of industrial homeworkers in the
industries defined in § 530.1 may be
issued on the following terms and conditions upon application therefore on
forms provided by the Wage and Hour
Division. Such forms shall be signed by
both the homeworker and the employer.
(Approved by the Office of Management and
Budget under control number 1235–0001)
[24 FR 729, Feb. 3, 1959, as amended at 49 FR
18294, Apr. 30, 1984; 82 FR 2228, Jan. 9, 2017]
§ 530.4 Terms and conditions for the
issuance of individual homeworker
certificates.
(a)
Upon
application
by
the
homeworker and the employer on
forms provided by the Wage and Hour
Division, certificates may be issued to
the applicant employer authorizing the
employment of a particular worker in
industrial homework in a particular industry, provided that the application is
in proper form and sets forth facts
showing that the worker:
(1)(i) Is unable to adjust to factory
work because of age or physical or
mental disability; or
(ii) Is unable to leave home because
the worker’s presence is required to
care for an invalid in the home; and
(2)(i) Was engaged in industrial
homework in the particular industry
for which the certificate is applied, as
such industry is defined in § 530.1, prior
to: (a) April 4, 1942, in the button and
buckle manufacturing industry; (b) November 2, 1942, in the embroideries industry; (c) April 1, 1941, in the gloves
and mittens industry; (d) October 7,
1942, in the handkerchief manufacturing industry; (e) July 1, 1941, in the
jewelry manufacturing industry; or (f)
March 5, 1942, in the women’s apparel
industry, except that if this requirement shall result in unusual hardship
to the individual homeworker it shall
not be applied; or
(ii) Is engaged in industrial homework under the supervision of a State
Vocational Rehabilitation Agency.
(b) No homeworker shall perform industrial homework for more than one
employer in the same industry, but
homework employment in one industry
shall not be a bar to the issuance of
certificates for other industries.
(Information collection requirements contained in paragraph (a) were approved by the
Office of Management and Budget under control number 1235–0001)
[24 FR 729, Feb. 3, 1959, as amended at 43 FR
28470, June 30, 1978; 46 FR 50349, Oct. 9, 1981;
49 FR 44270, Nov. 5, 1984; 53 FR 45722, Nov. 10,
1988; 82 FR 2228, Jan. 9, 2017]
§ 530.5
Investigation.
An investigation may be ordered in
any case to obtain additional data or
facts. A medical examination of the
worker or invalid may be ordered or a
certification of facts concerning eligibility for the certificate by designated
officers of the State or Federal Government may be required.
§ 530.6 Termination
of
individual
homeworker certificates.
(a) A certificate shall be valid under
the terms set forth in the certificate
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§ 530.7
29 CFR Ch. V (7–1–19 Edition)
for a period to be designated by the Administrator or his authorized representative. Application for renewal of
any certificate shall be filed in the
same manner as an original application
under this part.
(b) No effective certificate shall expire until action on an application for
renewal shall have been finally determined, provided that such application
has been properly executed in accordance with the requirements, and filed
not less than 15 nor more than 30 days
prior to the expiration date. A final determination means either the granting
of or initial denial of the application
for renewal of a certificate, or withdrawal of the application. A ‘‘properly
executed’’ application is one which
contains the complete information required on the form.
[24 FR 729, Feb. 3, 1959, as amended at 27 FR
7020, July 25, 1962]
§ 530.7 Revocation and cancellation of
individual homeworker certificates.
Any certificate may be revoked for
cause at any time. Violation of any
provision of the Fair Labor Standards
Act shall be sufficient grounds for revocation of all certificates issued to an
employer, in which event no certificates shall be issued to the offending
employer for a period of up to one year.
Before any certificate is cancelled,
however, interested parties shall be notified in writing of the facts warranting such cancellation and afforded
an opportunity to demonstrate or
achieve compliance. In appropriate circumstances, the Administrator shall
afford an opportunity for a hearing to
resolve the disputed matter.
[49 FR 44271, Nov. 5, 1984]
§ 530.8 Preservation
of
individual
homeworker certificates.
A copy of all certificates provided to
the employer under this part shall be
maintained for a period of at least
three years after the last employment
under the certificate.
[49 FR 44271, Nov. 5, 1984]
§ 530.9 Records and reports.
The issuance of a certificate shall not
relieve the employer of the duty of
maintaining the records required in the
regulations in part 516 of this chapter
and failure to keep such records shall
be sufficient cause for the cancellation
of certificates issued to such an employer.
§ 530.10 Delegation of authority to
grant, deny, or cancel an individual
homeworker certificate.
The Administrator may from time to
time designate and appoint members of
the Administrator’s staff or State
Agencies as his authorized representatives with full power and authority to
grant, deny, or cancel homework certificates.
[43 FR 28470, June 30, 1978]
§ 530.11 Petition for review.
Any person aggrieved by the action
of an authorized representative of the
Administrator in granting or denying a
certificate may, within 15 days thereafter or within such additional time as
the Administrator for cause shown
may allow, file with the Administrator
a petition for review of the action of
such representative praying for such
relief as is desired. Such petition for
review, if duly filed, will be acted upon
by the Administrator or an authorized
representative of the Administrator
who took no part in the proceeding
being reviewed. All interested parties
will be afforded an opportunity to
present their views in support of or in
opposition to the matters prayed for in
the petition.
§ 530.12 Special provisions.
(a) Gloves and mittens industry. Any
certificate issued to an industrial
homeworker by the New York State
Department of Labor under paragraph
II of Home Work Order No. 4 Restricting Industrial Homework in the Glove
Industry, dated June 28, 1941, will be
given effect by the Administrator as a
certificate permitting the employment
of the homeworker under the terms of
§ 530.4 for the period during which such
certificate shall continue in force.
(b) Jewelry manufacturing industry.
Nothing contained in the regulations
in this part shall be construed to prohibit
the
employment,
as
homeworkers, of American Indians residing on the Navajo, Pueblo, and Hopi
Indian Reservations, who are engaged
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Wage and Hour Division, Labor
§ 530.101
in producing genuine hand-fashioned
jewelry on the Indian reservations
mentioned, provided the employment
of such homeworker is in conformity
with the following conditions:
(1) That each employer of one or
more Indian homeworkers engaged in
making hand-fashioned jewelry on
these Indian reservations shall submit
in duplicate to the regional office of
the Wage and Hour Division for the region in which the employer’s place of
business is located, on April 1, August
1, and December 1 of each year, the
name and address of such employee engaged during the preceding 4-month period in making hand-fashioned jewelry
on Indian reservations;
(2) That each employer of one or
more Indian homeworkers engaged in
making hand-fashioned jewelry on
these Indian reservations shall file copies of the piece rates in duplicate with
the regional office of the Wage and
Hour Division for the region in which
the employer’s place of business is located on April 1, August 1, and December 1 of each year, and
(3) That each employer of one or
more Indian homeworkers engaged in
making hand-fashioned jewelry on
these Indian reservations shall keep,
maintain, and have available for inspection by the Administrator or the
Administrator’s authorized representative at any time, records and reports
showing with respect to each of the
homeworkers engaged in making handfashioned jewelry on these Indian reservations, the following information:
(i) Name of the homeworker.
(ii) Address of the homeworker.
(iii) Date of birth of the homeworker,
if under 19 years of age.
(iv) Description of work performed.
(v) Amount of cash wage payments
made to the homeworker for each pay
period.
(vi) Date of such payment.
(vii) Schedule of piece rates paid.
These records shall be kept by each
employer for each of the employer’s
homeworkers engaged in making handfashioned jewelry on Indian reservations, as provided in this section, in
lieu of the records required under
§§ 516.2 and 516.31 of this chapter: Provided, however, That nothing in this
section shall relieve an employer from
maintaining all other records required
by part 516 of this chapter.
[24 FR 729, Feb. 3, 1959, as amended at 43 FR
28470, June 30, 1978]
Subpart B—Homeworker Employer
Certificates
SOURCE: 53 FR 45722, Nov. 10, 1988, unless
otherwise noted.
§ 530.101
General.
(a) Except as provided in subpart C, a
certificate may be issued to an employer authorizing the employment of
homeworkers in
(1) The knitted outerwear, gloves and
mittens, and embroideries industries as
defined in paragraphs (g), (h), and (k),
respectively, at § 530.1, effective January 9, 1989;
(2) In the button and buckle and
handkerchief manufacturing industries
as defined in paragraphs (i) and (j), respectively, of § 530.1, effective July 9,
1989; and
(3) In the jewelry industry as defined
in paragraph (f) of § 530.1, effective July
9, 1989, but only where the employer’s
homeworkers are engaged exclusively
in the stringing of beads and other jewelry and the carding and packaging of
jewelry. The terms ‘‘carding and packaging of jewelry’’ include the attaching
of jewelry to cards, boxing and wrapping, and the use of common household
glues available to the general public,
but do not include potentially hazardous operations such as the use of industrial glues, epoxies, soldering irons,
or heating elements.
(b) This certificate may be issued irrespective
of
whether
individual
homeworkers meet the conditions set
forth in paragraph (a) of § 530.4 of Subpart A. Unless suspended or revoked,
such certificates are valid for two-year
periods. Applications for renewals must
be submitted no later than thirty (30)
days prior to the expiration date of the
current certificate. Except as provided
in subpart A, in the absence of a certificate,
the
employment
of
homeworkers in these industries is prohibited, and an employer violating this
prohibition is subject to all the sanctions provided in the Fair Labor Standards Act and in this part, including an
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§ 530.102
29 CFR Ch. V (7–1–19 Edition)
injunction restraining the employment
of homeworkers.
(c) Certificates authorizing such employment may be issued on the following terms and conditions upon written application to the Administrator,
Wage and Hour Division, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210.
[53 FR 45722, Nov. 10, 1988, as amended at 82
FR 2228, Jan. 9, 2017]
§ 530.102 Requests for employer certificates.
The initial request for certification
or renewal application shall be signed
by the employer and shall contain the
name of the firm, its mailing address,
the physical location of the firm’s principal place of business and a description of the business operations and
items produced. In addition, the initial
or renewal application shall contain
the names, addresses, and languages (if
other than English) spoken by the
homeworkers that are currently employed (if any) or expected to be employed. The employer shall also provide the Administrator, within thirty
(30) days, a notice of each change of address of the principal place of business.
The notification shall be in writing and
addressed to the Administrator, Wage
and Hour Division, 200 Constitution
Avenue NW., Washington, DC 20210.
[82 FR 2228, Jan. 9, 2017]
§ 530.103
Employer assurances.
In order to be granted a certificate
authorizing the employment of industrial homeworkers, the employer must
provide written assurances concerning
the employment of homeworkers subject to section 11(d) of the Fair Labor
Standards Act to the effect that:
(a) All homeworkers shall be paid in
accordance with the monetary provisions of the Act.
(b) All homeworkers shall be employed in compliance with the child
labor provisions contained in section 12
of the Act and regulations and orders
issued pursuant to section 12. All
homeworkers will be instructed not to
permit minors to work in violation of
such provisions.
(c) Records of hours worked and
wages paid shall be maintained in ac-
cordance with section 11 of the Act and
part 516 of this chapter.
(d) All homeworkers shall complete
homeworker handbooks in accordance
with § 516.31 of part 516.
(e) All homeworkers will be instructed to accurately record all hours
worked, piece work information, and
business-related expenses in the handbooks.
(f) All records shall be made available for inspection and transcription
by the Administrator or a duly authorized and designated representative, or
transcription by the employer upon
written request.
(g) Piece rates paid to homeworkers
shall be established using stop watch
time studies or other work measurement methods.
(h) All homeworkers shall be encouraged to cooperate with the Department
in any investigation that may be made.
(i) With respect to jewelry manufacturing, no operations other than the
stringing of beads and other jewelry
and the carding and packaging of jewelry
will
be
performed
by
homeworkers.
§ 530.104 Bonding or security payments.
(a) Where in the Administrator’s
judgment there is not sufficient reason
to believe that the Act will be complied with or that money will be available if violations of the Act occur, the
Administrator may condition issuance
or renewal of a certificate to an employer upon the furnishing of a bond
with a surety or sureties satisfactory
to the Administrator.
(b) The Administrator shall condition
issuance or reinstatement of a certificate to any employer whose application for a certificate had previously
been denied, or whose certificate had
been revoked, upon the furnishing of a
bond.
(c) Any bond required by the Administrator under paragraph (a) or (b) of
this section shall be in an amount determined by the Administrator, up to
$2500 for each homeworker to be employed by such employer under the certificate. In lieu of a bond, the employer
may furnish a cash payment of equal
amount, to be held in a special deposit
account by the Administrator for the
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Wage and Hour Division, Labor
§ 530.205
period during which the certificate is
in effect. Such bond, or cash payment,
shall be subject to payment or forfeiture, in whole or in part, upon a
final determination that the employer
has failed to pay minimum wages or
overtime
compensation
to
homeworkers in accordance with the
Act. Any sums thus paid or forfeited to
the Administrator shall be disbursed to
affected homeworkers in accordance
with section 16(c) of the Act.
(d) At the Administrator’s discretion,
the obligation of a bond may be relieved, and any cash payment held as
security in lieu thereof may be refunded (together with any interest accrued thereon), upon a subsequent determination that the employer is in
compliance with the Act and that sufficient funds will be available to meet
back wage payment obligations in the
event of violations of the Act.
§ 530.105
Investigations.
Any employer in a restricted industry who requests certification to employ homeworkers will be investigated
promptly after the issuance of the certificate by the Wage and Hour Division.
Where such an employer is found to be
in violation of the FLSA, and the violations are corrected and future compliance is promised, the firm will be reinvestigated to assure that full FLSA
compliance has, in fact, been achieved.
Subpart C—Denial/Revocation of
Homeworker Employer Certificates
SOURCE: 53 FR 45723, Nov. 10, 1988, unless
otherwise noted.
§ 530.201
Conflict with State law.
No certificate will be issued pursuant
to § 530.101 of subpart B above authorizing the employment of homeworkers
in an industry in a State where the
Governor (or authorized representative) has advised the Administrator of
the Wage and Hour Division in writing
that the employment of homeworkers
in such industry, as defined in paragraphs (f) through (k) of § 530.1, is illegal by virtue of a State labor standards
or health and safety law.
§ 530.202 Piece rates—work measurement.
(a) No certificate will be issued pursuant to § 530.101 of subpart B to an employer who pays homeworkers based on
piece rates unless the employer establishes the piece rates for the different
types of items produced using stop
watch time studies or other work
measurement methods. Documentation
of the work measurements used to establish the piece rates, and the circumstances under which such measurements were conducted shall be retained
for three years and made available on
request to the Wage and Hour Division.
(b) The fact that an employer bases
piece rates on work measurements
which indicate that the homeworkers
would receive at least the minimum
wage at such piece rate(s) does not relieve the employer from the Act’s requirement that each homeworker actually receive not less than the minimum
wage for all hours worked.
§ 530.203 Outstanding violations and
open investigations.
A homework certificate will not be
issued or renewed by the Administrator
if, within the previous three years, the
Administrator has found and notified
the applicant of a monetary violation
of the Fair Labor Standards Act in an
amount certain, or the Administrator
has assessed a civil money penalty pursuant to subpart D of these regulations
or part 579 of this chapter (child labor),
and such amounts are unpaid, or if the
applicant is the subject of a revocation
proceeding at the time of the application for renewal, or the applicant is the
subject of an open investigation.
§ 530.204 Discretionary denial or revocation.
Where the Administrator finds that
the employment of homeworkers under
a certificate is likely to result in violations of the Fair Labor Standards Act,
the regulations issued thereunder, or
the assurances required by this part,
the Administrator may deny or revoke
the certificate.
§ 530.205 Mandatory denial or revocation.
The Administrator shall deny or revoke a certificate in accordance with
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§ 530.205
29 CFR Ch. V (7–1–19 Edition)
the following standards and for the period specified in the standards:
(a) Serious wage violations. Upon a
finding by the Administrator of a serious wage violation, a certificate shall
be denied (including refusal to renew)
or revoked for one year. A serious wage
violation is defined as minimum wage
or overtime pay violations of the Act
totalling $10,000 or more with respect
to homeworkers; or minimum wage
violations where 10 percent or more of
a certificate holder’s homeworkers (but
in all cases at least two homeworkers)
failed to receive at least 80 percent of
the minimum wage for all hours
worked for 6 or more weeks in any 3
month period; or minimum wage or
overtime pay violations affecting more
than half of the homeworkers of the
certificate holder for 6 or more weeks
in any 3 month period. All other wage
violations are deemed non-serious wage
violations for purposes of this section.
(b) Repeated wage violations. For repeated wage violations found by the
Administrator, a certificate shall be
denied or revoked for one to three
years, depending on the seriousness
and frequency of the violations.
(c) Child labor violations. Upon a finding by the Administrator of a violation
of the child labor provisions of section
12 of the Fair Labor Standards Act and
the regulations at part 570 of this title,
a certificate shall be denied or revoked
for one year. Upon a second finding by
the Administrator of such a violation,
the certificate shall be denied or revoked for three years.
(d) Failure to pay back wages or civil
money penalties judged owing. Upon the
failure of a certificate holder to pay
within 60 days back wages or civil
money penalties finally judged by a
court, administrative law judge or
other appropriate authority, as the
case may be, to be owed by the certificate holder, or agreed to be paid by the
certificate holder, or within such
longer period as may be specified in the
final order or agreement, a certificate
shall be denied or revoked for up to one
year or for such period as such obligation shall remain unpaid if longer than
one year.
(e) Failure to cooperate in an investigation. Where the Administrator finds obstruction of or other failure to cooper-
ate in a Wage and Hour investigation
by a certificate holder which impedes
the investigation, the certificate shall
be denied or revoked for a period of one
to three years, depending on the circumstances. For purposes of this regulation, cooperation includes providing
records upon request to Wage and Hour
compliance
officers,
identifying
homeworkers of the certificate holder,
and encouraging homeworkers to make
themselves available in connection
with an investigation.
(f) Serious recordkeeping violations.
Upon a finding by the Administrator
that a certificate holder has engaged in
a serious recordkeeping violation, the
certificate may be revoked for up to
one year. Upon a second finding by the
Administrator of a serious recordkeeping violation, a certificate shall be
denied or revoked for one to three
years. A serious recordkeeping violation is defined as one where, either
through errors in or omissions of required information, the name and current address of homeworkers and the
data which is necessary for the accurate determination of hours worked by
or wages paid to homeworkers or data
necessary for the computation of wages
owed to homeworkers is unavailable
with respect to 10 percent or more of
the homeworkers.
(g) Deliberate misstatement in an application for a certificate or in other documents. Upon a finding by the Administrator of a deliberate misstatement of
a material fact in an application for a
certificate, in payroll records, or in
any other information submitted to
the Wage and Hour Division or maintained by the employer pursuant to
these regulations, the certificate shall
be denied or revoked for one to three
years.
(h)
Discrimination
against
a
homeworker. Upon a finding by the Administrator that a certificate holder
has discharged or otherwise discriminated against a homeworker with respect to the homeworker’s compensation or terms, conditions, or privileges
of
employment
because
the
homeworker engaged in protected activity, the certificate shall be denied or
revoked for three years. Protected activity is defined as: (1) Any complaint
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Wage and Hour Division, Labor
§ 530.303
of a violation of the Act to the employer, the Department or other appropriate authority, or (2) any action
which furthers the enforcement of or
compliance with the Act, such as giving information to a Wage and Hour
compliance officer.
§ 530.206 Special circumstances.
At the discretion of the Administrator, a certificate need not be denied
or revoked pursuant to §§ 530.204 or
530.205 of this subpart if the Administrator finds all of the following:
(a) The certificate holder, despite the
exercise of due care, did not know and
did not have reason to know of the violations;
(b) All back wages and civil money
penalties found by the Administrator
to be owing by the certificate holder
have been paid; and
(c) The certificate holder has taken
appropriate steps to prevent recurrence
of the violations.
Subpart D—Civil Money Penalties
SOURCE: 53 FR 45724, Nov. 10, 1988, unless
otherwise noted.
§ 530.301 General.
A system of civil money penalties is
established to provide a remedy for any
violation of the FLSA related to homework (except child labor violations,
which are subject to civil money penalties pursuant to part 579 of this chapter), or for any violation of the
homeworker regulations or employers’
assurances pursuant to this part, which
are not so serious as to warrant denial
or revocation of a certificate. Accordingly, no civil money penalty will be
assessed for conduct which serves as
the basis of proposed denial or revocation of a certificate. (See subpart C of
this part.) Civil money penalties will
be assessed only against employers who
are operating under a certificate or
who are seeking certification.
§ 530.302 Amounts of civil money penalties.
(a) A civil money penalty, not to exceed $1,052 per affected homeworker for
any one violation, may be assessed for
any violation of the Act or of this part
or of the assurances given in connection with the issuance of a certificate.
(b) The amount of civil money penalties shall be determined per affected
homeworker within the limits set forth
in the following schedule, except that
no penalty shall be assessed in the case
of violations which are deemed to be de
minimis in nature:
Penalty per affected homeworker
Nature of violation
Minor
Recordkeeping ..................................................................................................
Monetary violations ...........................................................................................
Employment of homeworkers without a certificate ...........................................
Other violations of statutes, regulations or employer assurances ....................
[81 FR 43450, July 1, 2016, as amended at 82
FR 5381, Jan. 18, 2017; 83 FR 13, Jan. 2, 2018;
84 FR 218, Jan. 23, 2019]
§ 530.303 Considerations
mining amounts.
in
deter-
(a) In determining the amount of a
penalty within any range, the Administrator shall take into account the presence or absence of circumstances such
as the following:
(1) Good faith attempts to comply
with the Act or regulations;
$21–210
21–210
........................
21–210
Substantial
$210–421
210–421
210–421
210–421
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$421–1,052
421–1,052
421–1,052
(2) Extent to which the violation is
under the employer’s control;
(3) Non-culpable ignorance of the requirements of the Act or regulations;
(4) False documents or representations; and
(5) Exercise of due care.
(b) An employer’s financial inability
to meet obligations under the Act shall
not constitute a mitigating or extenuating circumstance.
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intentional
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§ 530.304
29 CFR Ch. V (7–1–19 Edition)
(c) No civil money penalty shall be
assessed against an employer, who applies for a certificate, solely for employing homeworkers, provided the employer is not currently under investigation by the Wage and Hour Division.
§ 530.304 Procedures for assessment.
Assessment of penalties pursuant to
this section, including administrative
proceedings, shall be in accordance
with the procedures set out in subpart
E of this part.
Subpart E—Administrative
Procedures
SOURCE: 53 FR 45725, Nov. 10, 1988, unless
otherwise noted.
§ 530.401 Applicability of procedures
and rules.
The procedures and rules contained
herein prescribe the administrative
process which will be applied with respect to a determination to deny (including refusal to renew) or revoke a
certificate and to a determination to
assess civil money penalties. Special
rules and procedures for the emergency
revocation of certificates are prescribed in § 530.412 of this subpart.
§ 530.402 Notice of determination.
Whenever the Administrator determines to deny or revoke a certificate
or determines to assess a civil money
penalty, the person affected by such determination shall be notified of the determination in writing, by certified
mail to the last known address. The
notice required shall:
(a) Set forth the determination of the
Administrator, including the specific
statutory or regulatory provision or
assurance violated, the reasons for denying or revoking a certificate, or the
amount of any civil money penalty assessment and the reason or reasons
therefor.
(b) Set forth the right to request a
hearing on such determination.
(c) Set forth the time and method for
requesting a hearing, and the procedures relating thereto, as set forth in
§ 530.403 of this subpart.
(d) Inform any affected person or persons that in lieu of formal proceedings
there is available an alternative sum-
mary proceeding under § 530.412 of this
subpart.
(e) Inform any affected persons that
in the absence of a timely request for a
hearing the determination of the Administrator shall become final and
unappealable.
§ 530.403 Request for hearing.
(a) Except in the case of an emergency revocation under § 530.411 of this
subpart, a request for an administrative hearing on a determination referred to in § 530.402 of this subpart
shall be made in writing to the Administrator of the Wage and Hour Division,
U.S. Department of Labor, Washington,
DC 20210, and must be received no later
than thirty (30) days after issuance of
the notice referred to in § 530.402 of this
subpart.
(b) No particular form is prescribed
for any request for a hearing permitted
by this part. However, any such request
shall be typewritten or legibly written;
specify the issue or issues stated in the
notice of determination giving rise to
such request; state the specific reason
or reasons why the person requesting
the hearing believes such determination is in error; be signed by the person
making the request or by an authorized
representative of such person; and include the address at which such person
or authorized representative desires to
receive further communications relating thereto.
(c) In the case of an emergency revocation, a request for an administrative hearing shall be made in writing
to the Chief Administrative Law
Judge, U.S. Department of Labor, 1111
20th Street, NW., suite 700, Washington, DC 20036, and must be received
no later than 20 days after the issuance
of the notice referred to in § 530.402 of
this subpart.
[53 FR 45725, Nov. 10, 1988, as amended at 82
FR 2228, Jan. 9, 2017]
§ 530.404 Referral to Administrative
Law Judge.
Upon receipt of a timely request for a
hearing, the request and a copy of the
notice of administrative determination
complained of, shall, by Order of Reference, be referred to the Chief Administrative Law Judge, for a determination in an administrative proceeding as
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Wage and Hour Division, Labor
§ 530.410
provided herein. The notice of administrative determination and request for
hearing shall, respectively, be given
the effect of a complaint and answer
thereto for purposes of the administrative proceedings, subject to any amendment that may be permitted under 29
CFR part 18.
§ 530.405 General.
Except as specifically provided in
these regulations, the ‘‘Rules of Practice and Procedure for Administrative
Hearings before the Office of Administrative Law Judges’’ established by the
Secretary at 29 CFR part 18 shall apply
to administrative proceedings described in this subpart.
§ 530.406 Decision and order of Administrative Law Judge.
(a) The Administrative Law Judge
shall prepare, after completion of the
hearing and closing of the record, a decision on the issues referred by the Administrator.
(b) The decision of the Administrative Law Judge shall include a statement of findings and conclusions, with
reasons and basis therefor, upon each
material issue presented on the record.
If the Administrative Law Judge finds
that the Administrator has established
by a preponderance of the evidence the
factual basis for the determination to
deny or revoke a certificate or to assess a civil money penalty, that determination shall be affirmed. The decision shall also include an appropriate
order which may affirm, deny, reverse,
or modify, in whole or in part, the determination of the Administrator. The
reason or reasons for such order shall
be stated in the decision.
(c) The decision shall be served on all
parties and the Secretary in person or
by certified mail. The decision when
served by the Administrative Law
Judge shall constitute the final order
of the Department of Labor unless the
Secretary, as provided for in § 530.407 of
this subpart, determines to review the
decision.
§ 530.407 Procedures for initiating and
undertaking review.
Any party desiring review of the decision of the Administrative Law Judge
may petition the Secretary to review
the decision. To be effective, such petition must be received by the Secretary
within 30 days of the date of the decision of the Administrative Law Judge.
Copies of the petition shall be served
on all parties and on the Chief Administrative Law Judge. If the Secretary
does not issue a notice accepting a petition for review within 30 days after
receipt of a timely filing of the petition, or within 30 days of the date of
the decision if no petition has been received, the decision of the Administrative Law Judge shall be deemed the
final agency action.
§ 530.408 Notice of the Secretary to review decision.
Whenever the Secretary determines
to review the decision and order of an
Administrative Law Judge, the Secretary shall notify each party of the
issue or issues raised; the form in
which submission shall be made (i.e.,
briefs, oral argument, etc.); and, the
time within which such presentation
shall be submitted.
§ 530.409 Final decision of the Secretary.
The Secretary’s final decision shall
be served upon all parties and the Administrative Law Judge, in person or
by certified mail.
§ 530.410 Special procedures.
In a revocation proceeding pursuant
to § 530.205(d) of subpart C of this part
arising as a result of a certificate holder’s failure to pay back wages or civil
money penalties judged owing, the Administrator may file a motion for expedited decision, attaching to the notice,
by affidavit or other means, evidence
that a final order has been entered or
agreement signed requiring respondent
to pay back wages or civil money penalties and that the back wages or civil
money penalties have not been paid.
The respondent in the proceeding shall
have 20 days in which to file a countering affidavit or other evidence. If no
evidence countering the material assertions of the Administrator has been
submitted within 20 days, the Administrative Law Judge shall, within 30 days
thereafter, affirm the revocation or denial of the certificate. If the respondent does timely file such evidence, the
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§ 530.411
29 CFR Ch. V (7–1–19 Edition)
Administrative Law Judge shall schedule a hearing pursuant to § 530.411(c) of
this subpart and the case shall be subject to the expeditious procedures following therein.
§ 530.411 Emergency certificate revocation procedures.
(a) When the Administrator determines that immediate revocation of a
homework certificate is necessary to
safeguard the payment of minimum
wages to homeworkers, a notice of proposed emergency revocation of a certificate shall be sent to the certificate
holder pursuant to § 530.402 of this subpart setting forth reasons requiring
emergency revocation of the certificate.
(b) If no request for a hearing pursuant to § 530.403 of this subpart is received within 20 days of the date of receipt of the notice by the certificate
holder, the proposed revocation of the
certificate shall become final.
(c) The Office of Administrative Law
Judges shall notify the parties at their
last known address, of the date, time
and place for the hearing, which shall
be no more than 60 days from the date
of receipt of the request for the hearing. All parties shall be given at least
5 days notice of such hearing. No requests for postponement shall be granted except for compelling reasons.
(d) The Administrative Law Judge
shall issue a decision pursuant to
§ 530.406 of this subpart within 30 days
after the termination of a proceeding
at which evidence was submitted. The
decision shall be served on all parties
and the Secretary by certified mail and
shall constitute the final order of the
Department of Labor unless the Secretary determines to review the decision.
(e) Any party desiring review of the
decision of the Administrative Law
Judge may petition the Secretary to
review the decision of the Administrative Law Judge. To be effective, such
petition must be received by the Secretary within 30 days of the date of the
decision of the Administrative Law
Judge. If the Secretary does not issue a
notice accepting a petition for review
within 15 days after receipt of a timely
filing of the petition, or within 30 days
of the date of the decision if no peti-
tion is filed, the decision of the Administrative Law Judge shall be deemed
the final agency action.
(f) The Secretary’s decision shall be
issued within 60 days of the notice by
the Secretary accepting the submission, and shall be served upon all parties and the Administrative Law
Judge, in person or by certified mail.
§ 530.412 Alternative summary proceedings.
In lieu of an administrative hearing
before an Administrative Law Judge
under the above procedures, an applicant or certificate holder who does not
dispute the factual findings of the Administrator may, within 30 days of the
date of issuance of the notice of denial,
revocation, or assessment (or within 20
days in the case of a notice of emergency revocation) petition the Administrator instead to reconsider the denial or revocation of the certificate or
the assessment of civil money penalties. An applicant or certificate holder electing this informal procedure
may appear before the Administrator
in person, make a written submission
to the Administrator, or both. Such reconsideration by the Administrator
shall be available only upon waiver by
the applicant or certificate holder of
the formal hearing procedures provided
by the above regulations.
§ 530.413 Certification of the record.
Upon receipt of a complaint seeking
review of a final decision issued pursuant to this part filed in a United States
District Court, after the administrative remedies have been exhausted, the
Chief Administrative Law Judge shall
promptly index, certify and file with
the appropriate United States District
Court, a full, true, and correct copy of
the entire record, including the transcript of proceedings.
§ 530.414 Equal Access to Justice Act.
Proceedings under this part are not
subject to the provisions of the Equal
Access to Justice Act. In any hearing
conducted pursuant to these regulations, Administrative Law Judges shall
have no power or authority to award
attorney fees or other litigation expenses pursuant to the Equal Access to
Justice Act.
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Wage and Hour Division, Labor
§ 531.2
PART
531—WAGE
PAYMENTS
UNDER THE FAIR LABOR STANDARDS ACT OF 1938
Subpart A—Preliminary Matters
Sec.
531.1
531.2
Definitions.
Purpose and scope.
Subpart B—Determinations of ‘‘Reasonable
Cost’’ and ‘‘Fair Value’’; Effects of Collective Bargaining Agreements
531.3 General determinations of ‘‘reasonable
cost’’.
531.4 Making determinations of ‘‘reasonable
cost’’.
531.5 Making
determinations
of
‘‘fair
value’’.
531.6 Effects of collective bargaining agreements.
531.7 [Reserved]
Subpart C—Interpretations
531.25 Introductory statement.
531.26 Relation to other laws.
HOW PAYMENTS MAY BE MADE
531.27 Payment in cash or its equivalent required.
531.28 Restrictions applicable where payment is not in cash or its equivalent.
531.29 Board, lodging, or other facilities.
531.30 ‘‘Furnished’’ to the employee.
531.31 ‘‘Customarily’’ furnished.
531.32 ‘‘Other facilities.’’
531.33 ‘‘Reasonable cost’’; ‘‘fair value’’.
531.34 Payment in scrip or similar medium
not authorized.
531.35 ‘‘Free and clear’’ payment; ‘‘kickbacks’’.
PAYMENT WHERE ADDITIONS OR DEDUCTIONS
ARE INVOLVED
531.36 Nonovertime workweeks.
531.37 Overtime workweeks.
PAYMENTS MADE TO PERSONS OTHER THAN
EMPLOYEES
531.38
531.39
to
531.40
Amounts deducted for taxes.
Payments to third persons pursuant
court order.
Payments to employee’s assignee.
Subpart D—Tipped Employees
531.50 Statutory provisions with respect to
tipped employees.
531.51 Conditions for taking tip credits in
making wage payments.
531.52 General characteristics of ‘‘tips.’’
531.53 Payments which constitute tips.
531.54 Tip pooling.
531.55 Examples of amounts not received as
tips.
531.56 ‘‘More than $30 a month in tips.’’
531.57 Receiving the minimum amount
‘‘customarily and regularly.’’
531.58 Initial and terminal months.
531.59 The tip wage credit.
531.60 Overtime payments.
AUTHORITY: Sec. 3(m), 52 Stat. 1060; sec. 2,
75 Stat. 65; sec. 101, 80 Stat. 830; sec. 29(B), 88
Stat. 55, Pub. L. 93–259; Pub. L. 95–151, 29
U.S.C. 203(m) and (t); Pub. L. 104–188,
§ 2105(b); Pub. L. 110–28, 121 Stat. 112.
SOURCE: 32 FR 13575, Sept. 28, 1967, unless
otherwise noted.
Subpart A—Preliminary Matters
§ 531.1 Definitions.
(a) Administrator means the Administrator of the Wage and Hour Division
or his authorized representative. The
Secretary of Labor has delegated to the
Administrator the functions vested in
him under section 3(m) of the Act.
(b) Act means the Fair Labor Standards Act of 1938, as amended.
§ 531.2 Purpose and scope.
(a) Section 3(m) of the Act defines
the term ‘‘wage’’ to include the ‘‘reasonable cost’’, as determined by the
Secretary of Labor, to an employer of
furnishing any employee with board,
lodging, or other facilities, if such
board, lodging, or other facilities are
customarily furnished by the employer
to his employees. In addition, section
3(m) gives the Secretary authority to
determine the ‘‘fair value.’’ of such facilities on the basis of average cost to
the employer or to groups of employers
similarly situated, on average value to
groups of employees, or other appropriate measures of ‘‘fair value.’’ Whenever so determined and when applicable and pertinent, the ‘‘fair value’’ of
the facilities involved shall be includable as part of ‘‘wages’’ instead of the
actual measure of the costs of those facilities. The section provides, however,
that the cost of board, lodging, or
other facilities shall not be included as
part of ‘‘wages’’ if excluded therefrom
by a bona fide collective bargaining
agreement. Section 3(m) also provides
a method for determining the wage of a
tipped employee.
(b) This part 531 contains any determinations made as to the ‘‘reasonable
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§ 531.3
29 CFR Ch. V (7–1–19 Edition)
cost’’ and ‘‘fair value’’ of board, lodging, or other facilities having general
application, and describes the procedure whereby determinations having
general or particular application may
be made. The part also interprets generally the provisions of section 3(m) of
the Act, including the term ‘‘tipped
employee’’ as defined in section 3(t).
Subpart
B—Determinations
of
‘‘Reasonable Cost’’ and ‘‘Fair
Value’’; Effects of Collective
Bargaining Agreements
§ 531.3 General
determinations
of
‘‘reasonable cost.’’
(a) The term reasonable cost as used in
section 3(m) of the Act is hereby determined to be not more than the actual
cost to the employer of the board, lodging, or other facilities customarily furnished by him to his employees.
(b) Reasonable cost does not include a
profit to the employer or to any affiliated person.
(c) Except whenever any determination made under § 531.4 is applicable,
the ‘‘reasonable cost’’ to the employer
of furnishing the employee with board,
lodging, or other facilities (including
housing) is the cost of operation and
maintenance including adequate depreciation plus a reasonable allowance
(not more than 51⁄2 percent) for interest
on the depreciated amount of capital
invested by the employer: Provided,
That if the total so computed is more
than the fair rental value (or the fair
price of the commodities or facilities
offered for sale), the fair rental value
(or the fair price of the commodities or
facilities offered for sale) shall be the
reasonable cost. The cost of operation
and maintenance, the rate of depreciation, and the depreciated amount of
capital invested by the employer shall
be those arrived at under good accounting practices. As used in this paragraph, the term ‘‘good accounting practices’’ does not include accounting
practices which have been rejected by
the Internal Revenue Service for tax
purposes, and the term ‘‘depreciation’’
includes obsolescence.
(d)(1) The cost of furnishing ‘‘facilities’’ found by the Administrator to be
primarily for the benefit or convenience of the employer will not be recog-
nized as reasonable and may not therefore be included in computing wages.
(2) The following is a list of facilities
found by the Administrator to be primarily for the benefit of convenience of
the employer. The list is intended to be
illustrative rather than exclusive: (i)
Tools of the trade and other materials
and services incidental to carrying on
the employer’s business; (ii) the cost of
any construction by and for the employer; (iii) the cost of uniforms and of
their laundering, where the nature of
the business requires the employee to
wear a uniform.
§ 531.4 Making determinations of ‘‘reasonable cost.’’
(a) Procedure. Upon his own motion
or upon the petition of any interested
person, the Administrator may determine generally or particularly the
‘‘reasonable cost’’ to an employer of
furnishing any employee with board,
lodging, or other facilities, if such
board, lodging, or other facilities are
customarily furnished by the employer
to his employees. Notice of proposed
determination shall be published in the
FEDERAL REGISTER, and interested persons shall be afforded an opportunity
to participate through submission of
written data, views, or arguments.
Such notice shall indicate whether or
not an opportunity will be afforded to
make oral presentations. Whenever the
latter opportunity is afforded, the notice shall specify the time and place of
any hearing and the rules governing
such proceedings. Consideration shall
be given to all relevant matter presented in the adoption of any rule.
(b) Contents of petitions submitted by
interested persons. Any petition by an
employee or an authorized representative of employees, an employer or
group of employers, or other interested
persons for a determination of ‘‘reasonable cost’’ shall include the following information:
(1) The name and location of the employer’s or employers’ place or places
of business;
(2) A detailed description of the
board, lodging, or other facilities furnished by the employer or employers,
whether or not these facilities are customarily furnished by the employer or
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Wage and Hour Division, Labor
§ 531.25
employers, and whether or not they are
alleged to constitute ‘‘wages’’;
(3) The charges or deductions made
for the facility or facilities by the employer or employers;
(4) When the actual cost of the facility or facilities is known an itemized
statement of such cost to the employer
or employers of the furnished facility
or facilities;
(5) The cash wages paid;
(6) The reason or reasons for which
the determination is requested, including any reason or reasons why the determinations in § 531.3 should not
apply; and
(7) Whether an opportunity to make
an oral presentation is requested; and
if it is requested, the inclusion of a
summary of any expected presentation.
tive bargaining agreement applicable
to the particular employee.
(b) A collective bargaining agreement shall be deemed to be ‘‘bona fide’’
when it is made with a labor organization which has been certified pursuant
to the provision of section 7(b)(1) or
7(b)(2) of the Act by the National Labor
Relations Board, or which is the certified representative of the employees
under the provisions of the National
Labor Relations Act, as amended, or
the Railway Labor Act, as amended.
(c) Collective bargaining agreements
made with representatives who have
not been so certified will be ruled on
individually upon submission to the
Administrator.
§ 531.5 Making determinations of ‘‘fair
value.’’
(a) Procedure. The procedures governing the making of determinations of
the ‘‘fair value’’ of board, lodging, or
other facilities for defined classes of
employees and in defined areas under
section 3(m) of the Act shall be the
same as that prescribed in § 531.4 with
respect to determinations of ‘‘reasonable cost.’’
(b) Petitions of interested persons. Any
petition by an employee or an authorized representative of employees, an
employer or group of employers, or
other interested persons for a determination of ‘‘fair value’’ under section
3(m) of the Act shall contain the information required under paragraph (b) of
§ 531.4, and in addition, to the extent
possible, the following:
(1) A proposed definition of the class
or classes of employees involved;
(2) A proposed definition of the area
to which any requested determination
would apply;
(3) Any measure of ‘‘fair value’’ of
the furnished facilities which may be
appropriate in addition to the cost of
such facilities.
Subpart C—Interpretations
§ 531.6 Effects of collective bargaining
agreements.
(a) The cost of board, lodging, or
other facilities shall not be included as
part of the wage paid to any employee
to the extent it is excluded therefrom
under the terms of a bona fide collec-
§ 531.7
[Reserved]
§ 531.25 Introductory statement.
(a) The ultimate decisions on interpretations of the Act are made by the
courts (Mitchell v. Zachry, 362 U.S. 310;
Kirschbaum v. Walling, 316 U.S. 517).
Court decisions supporting interpretations contained in this subpart are
cited where it is believed they may be
helpful. On matters which have not
been determined by the courts, it is
necessary for the Secretary of Labor
and the Administrator to reach conclusions as to the meaning and the application of provisions of the law in order
to carry out their responsibilities of
administration
and
enforcement
(Skidmore v. Swift, 323 U.S. 134). In order
that these positions may be made
known to persons who may be affected
by them, official interpretations are
issued by the Administrator on the advice of the Solicitor of Labor, as authorized by the Secretary (Reorganization Plan 6 of 1950, 64 Stat. 1263; Gen.
Order 45A, May 24, 1950, 15 FR 3290).
The Supreme Court has recognized that
such interpretations of this Act ‘‘provide a practical guide to employers and
employees as to how the office representing the public interest in its enforcement will seek to apply it’’ and
‘‘constitute a body of experience and
informed judgment to which courts and
litigants may properly resort for guidance.’’ Further, as stated by the Court:
‘‘Good administration of the Act and
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§ 531.26
29 CFR Ch. V (7–1–19 Edition)
good judicial administration alike require that the standards of public enforcement and those for determining
private rights shall be at variance only
where justified by very good reasons.’’
(Skidmore v. Swift, 323 U.S. 134.)
(b) The interpretations of the law
contained in this subpart are official
interpretations of the Department of
Labor with respect to the application
under described circumstances of the
provisions of law which they discuss.
The interpretations indicate, with respect to the methods of paying the
compensation required by sections 6
and 7 and the application thereto of the
provisions of section 3(m) of the Act,
the construction of the law which the
Secretary of Labor and the Administrator believe to be correct and which
will guide them in the performance of
their administrative duties under the
Act unless and until they are otherwise
directed by authoritative decisions of
the courts or conclude, upon reexamination of an interpretation, that it is
incorrect. Reliance may be placed upon
the interpretations as provided in section 10 of the Portal-to-Portal Act (29
U.S.C. 259) so long as they remain effective and are not modified, amended,
rescinded, or determined by judicial
authority to be incorrect. For discussion of section 10 of the Portal-to-Portal Act, see part 790 of this chapter.
§ 531.26
Relation to other laws.
Various Federal, State, and local legislation requires the payment of wages
in cash; prohibits or regulates the
issuance of scrip, tokens, credit cards,
‘‘dope checks’’ or coupons; prevents or
restricts payment of wages in services
or facilities; controls company stores
and commissaries; outlaws ‘‘kickbacks’’; restrains assignment and garnishment of wages; and generally governs the calculation of wages and the
frequency and manner of paying them.
Where such legislation is applicable
and does not contravene the requirements of the Act, nothing in the Act,
the regulations, or the interpretations
announced
by
the
Administrator
should be taken to override or nullify
the provisions of these laws.
HOW PAYMENTS MAY BE MADE
§ 531.27 Payment in cash or its equivalent required.
(a) Standing alone, sections 6 and 7 of
the Act require payments of the prescribed wages, including overtime compensation, in cash or negotiable instrument payable at par. Section 3(m) provides, however, for the inclusion in the
‘‘wage’’ paid to any employee, under
the conditions which it prescribes of
the ‘‘reasonable cost,’’ or ‘‘fair value’’
as determined by the Secretary, of furnishing such employee with board,
lodging, or other facilities. In addition,
section 3(m) provides that a tipped employee’s wages may consist in part of
tips. It is section 3(m) which permits
and governs the payment of wages in
other than cash.
(b) It should not be assumed that because the term ‘‘wage’’ does not appear
in section 7, all overtime compensation
must be paid in cash and may not be
paid in board, lodging, or other facilities. There appears to be no evidence in
either the statute or its legislative history which demonstrates the intention
to provide one rule for the payment of
the minimum wage and another rule
for the payment of overtime compensation. The principles stated in paragraph (a) of this section are considered
equally applicable to payment of the
minimum hourly wage required by section 6 or of the wages required by the
equal pay provisions of section 6(d),
and to payment, when overtime is
worked, of the compensation required
by section 7. Thus, in determining
whether he has met the minimum wage
and overtime requirements of the Act,
the employer may credit himself with
the reasonable cost to himself of board,
lodging, or other facilities customarily
furnished by him to his employees
when the cost of such board, lodging,
or other facilities is not excluded from
wages paid to such employees under
the term of a bona fide collective bargaining agreement applicable to the
employees. Unless the context clearly
indicates otherwise, the term ‘‘wage’’
is used in this part to designate the
amount due under either section 6 or
section 7 without distinction. It should
be remembered, however, that the wage
paid for a job, within the meaning of
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Wage and Hour Division, Labor
§ 531.32
the equal pay provisions of section 6(d),
may include remuneration for employment which is not included in the employee’s regular rate of pay under section 7(e) of the act or is not allocable
to compensation for hours of work required by the minimum wage provisions of section 6. Reference should be
made to parts 778 and 800 of this chapter for a more detailed discussion of
the applicable principles.
(c) Tips may be credited or offset
against the wages payable under the
Act in certain circumstances, as discussed later in this subpart. See also
the recordkeeping requirements contained in part 516 of this chapter.
§ 531.28 Restrictions applicable where
payment is not in cash or its equivalent.
It appears to have been the clear intention of Congress to protect the basic
minimum wage and overtime compensation required to be paid to the
employee by sections 6 and 7 of the Act
from profiteering or manipulation by
the employer in dealings with the employee. Section 3(m) of the Act and
subpart B of this part accordingly prescribe certain limitations and safeguards which control the payment of
wages in other than cash or its equivalent. (Special recordkeeping requirements must also be met. These are contained in part 516 of this chapter.)
These provisions, it should be emphasized, do not prohibit payment of wages
in facilities furnished either as additions to a stipulated wage or as items
for which deductions from the stipulated wage will be made; they prohibit
only the use of such a medium of payment to avoid the obligation imposed
by sections 6 and 7.
§ 531.29 Board, lodging, or other facilities.
Section 3(m) applies to both of the
following situations: (a) Where board,
lodging, or other facilities are furnished in addition to a stipulated wage;
and (b) where charges for board, lodging, or other facilities are deducted
from a stipulated wage. The use of the
word ‘‘furnishing’’ and the legislative
history of section 3(m) clearly indicate
that this section was intended to apply
to all facilities furnished by the em-
ployer as compensation to the employee, regardless of whether the employer calculates charges for such facilities as additions to or deductions
from wages.
§ 531.30
‘‘Furnished’’ to the employee.
The reasonable cost of board, lodging, or other facilities may be considered as part of the wage paid an employee only where customarily ‘‘furnished’’ to the employee. Not only
must the employee receive the benefits
of the facility for which he is charged,
but it is essential that his acceptance
of the facility be voluntary and
uncoerced. See Williams v. Atlantic
Coast Line Railroad Co. (E.D.N.C.). 1
W.H. Cases 289.
§ 531.31
‘‘Customarily’’ furnished.
The reasonable cost of board, lodging, or other facilities may be considered as part of the wage paid an employee only where ‘‘customarily’’ furnished to the employee. Where such facilities are ‘‘furnished’’ to the employee, it will be considered a sufficient satisfaction of this requirement
if the facilities are furnished regularly
by the employer to his employees or if
the same or similar facilities are customarily furnished by other employees
engaged in the same or similar trade,
business, or occupation in the same or
similar communities. See Walling v.
Alaska Pacific Consolidated Mining Co.,
152 F. (2d) 812 (C.A. 9), cert. denied, 327
U.S. 803; Southern Pacific Co. v. Joint
Council (C.A. 9) 7 W.H. Cases 536. Facilities furnished in violation of any Federal, State, or local law, ordinance or
prohibition will not be considered facilities ‘‘customarily’’ furnished.
§ 531.32
‘‘Other facilities.’’
(a) ‘‘Other facilities,’’ as used in this
section, must be something like board
or lodging. The following items have
been deemed to be within the meaning
of the term: Meals furnished at company restaurants or cafeterias or by
hospitals, hotels, or restaurants to
their employees; meals, dormitory
rooms, and tuition furnished by a college to its student employees; housing
furnished for dwelling purposes; general merchandise furnished at company
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§ 531.33
29 CFR Ch. V (7–1–19 Edition)
stores and commissaries (including articles of food, clothing, and household
effects); fuel (including coal, kerosene,
firewood, and lumber slabs), electricity, water, and gas furnished for
the noncommercial personal use of the
employee; transportation furnished
employees between their homes and
work where the travel time does not
constitute hours worked compensable
under the Act and the transportation is
not an incident of and necessary to the
employment.
(b) Shares of capital stock in an employer company, representing only a
contingent proprietary right to participate in profits and losses or in the assets of the company at some future dissolution date, do not appear to be ‘‘facilities’’ within the meaning of the section.
(c) It should also be noted that under
§ 531.3(d)(1), the cost of furnishing ‘‘facilities’’ which are primarily for the
benefit or convenience of the employer
will not be recognized as reasonable
and may not therefore be included in
computing wages. Items in addition to
those set forth in § 531.3 which have
been held to be primarily for the benefit or convenience of the employer and
are not therefore to be considered ‘‘facilities’’ within the meaning of section
3(m) include: Safety caps, explosives,
and miners’ lamps (in the mining industry); electric power (used for commercial production in the interest of
the employer); company police and
guard protection; taxes and insurance
on the employer’s buildings which are
not used for lodgings furnished to the
employee; ‘‘dues’’ to chambers of commerce and other organizations used, for
example, to repay subsidies given to
the employer to locate his factory in a
particular community; transportation
charges where such transportation is
an incident of and necessary to the employment (as in the case of maintenance-of-way employees of a railroad);
charges for rental of uniforms where
the nature of the business requires the
employee to wear a uniform; medical
services and hospitalization which the
employer is bound to furnish under
workmen’s compensation acts, or similar Federal, State, or local law. On the
other hand, meals are always regarded
as primarily for the benefit and con-
venience of the employee. For a discussion of reimbursement for expenses
such as ‘‘supper money,’’ ‘‘travel expenses,’’ etc., see § 778.217 of this chapter.
§ 531.33 ‘‘Reasonable
cost’’;
‘‘fair
value.’’
(a) Section 3(m) directs the Administrator to determine ‘‘the reasonable
cost * * * to the employer of furnishing
* * * facilities’’ to the employee, and in
addition it authorizes him to determine ‘‘the fair value’’ of such facilities
for defined classes of employees and in
defined areas, which may be used in
lieu of the actual measure of the cost
of such facilities in ascertaining the
‘‘wages’’ paid to any employee. Subpart
B contains three methods whereby an
employer may ascertain whether any
furnished facilities are a part of
‘‘wages’’ within the meaning of section
3(m): (1) An employer may calculate
the ‘‘reasonable cost’’ of facilities in
accordance with the requirements set
forth in § 531.3; (2) an employer may request that a determination of ‘‘reasonable cost’’ be made, including a determination having particular application; and (3) an employer may request
that a determination of ‘‘fair value’’ of
the furnished facilities be made to be
used in lieu of the actual measure of
the cost of the furnished facilities in
assessing the ‘‘wages’’ paid to an employee.
(b) ‘‘Reasonable cost,’’ as determined
in § 531.3 ‘‘does not include a profit to
the employer or to any affiliated person.’’ Although the question of affiliation is one of fact, where any of the
following persons operate company
stores or commissaries or furnish lodging or other facilities they will normally be deemed ‘‘affiliated persons’’
within the meaning of the regulations:
(1) A spouse, child, parent, or other
close relative of the employer; (2) a
partner, officer, or employee in the employer company or firm; (3) a parent,
subsidiary, or otherwise closely connected corporation; and (4) an agent of
the employer.
§ 531.34 Payment in scrip or similar
medium not authorized.
Scrip, tokens, credit cards, ‘‘dope
checks,’’ coupons, and similar devices
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Wage and Hour Division, Labor
§ 531.36
are not proper mediums of payment
under the Act. They are neither cash
nor ‘‘other facilities’’ within the meaning of section 3(m). However, the use of
such devices for the purpose of conveniently and accurately measuring wages
earned or facilities furnished during a
single pay period is not prohibited.
Piecework earnings, for example, may
be calculated by issuing tokens (representing a fixed amount of work performed) to the employee, which are redeemed at the end of the pay period for
cash. The tokens do not discharge the
obligation of the employer to pay
wages, but they may enable him to determine the amount of cash which is
due to the employee. Similarly, board,
lodging, or other facilities may be furnished during the pay period in exchange for scrip or coupons issued prior
to the end of the pay period. The reasonable cost of furnishing such facilities may be included as part of the
wage, since payment is being made not
in scrip but in facilities furnished
under the requirements of section 3(m).
But the employer may not credit himself with ‘‘unused scrip’’ or ‘‘coupons
outstanding’’ on the pay day in determining whether he has met the requirements of the Act because such
scrip or coupons have not been redeemed for cash or facilities within the
pay period. Similarly, the employee
cannot be charged with the loss or destruction of scrip or tokens.
§ 531.35 ‘‘Free and clear’’ payment;
‘‘kickbacks.’’
Whether in cash or in facilities,
‘‘wages’’ cannot be considered to have
been paid by the employer and received
by the employee unless they are paid
finally and unconditionally or ‘‘free
and clear.’’ The wage requirements of
the Act will not be met where the employee ‘‘kicks-back’’ directly or indirectly to the employer or to another
person for the employer’s benefit the
whole or part of the wage delivered to
the employee. This is true whether the
‘‘kick-back’’ is made in cash or in
other than cash. For example, if it is a
requirement of the employer that the
employee must provide tools of the
trade which will be used in or are specifically required for the performance
of the employer’s particular work,
there would be a violation of the Act in
any workweek when the cost of such
tools purchased by the employee cuts
into the minimum or overtime wages
required to be paid him under the Act.
See also in this connection, § 531.32(c).
PAYMENT WHERE ADDITIONS OR
DEDUCTIONS ARE INVOLVED
§ 531.36
Nonovertime workweeks.
(a) When no overtime is worked by
the employees, section 3(m) and this
part apply only to the applicable minimum wage for all hours worked. To illustrate, where an employee works 40
hours a week at a cash wage rate of at
least the applicable minimum wage
and is paid that amount free and clear
at the end of the workweek, and in addition is furnished facilities, no consideration need be given to the question of
whether such facilities meet the requirements of section 3(m) and this
part, since the employee has received
in cash the applicable minimum wage
for all hours worked. Similarly, where
an employee is employed at a rate in
excess of the applicable minimum wage
and during a particular workweek
works 40 hours for which the employee
receives at least the minimum wage
free and clear, the employer having deducted from wages for facilities furnished, whether such deduction meets
the requirement of section 3(m) and
subpart B of this part need not be considered, since the employee is still receiving, after the deduction has been
made, a cash wage of at least the minimum wage for each hour worked. Deductions for board, lodging, or other facilities may be made in nonovertime
workweeks even if they reduce the cash
wage below the minimum wage, provided the prices charged do not exceed
the ‘‘reasonable cost’’ of such facilities.
When such items are furnished the employee at a profit, the deductions from
wages in weeks in which no overtime is
worked are considered to be illegal
only to the extent that the profit reduces the wage (which includes the
‘‘reasonable cost’’ of the facilities)
below the required minimum wage. Facilities must be measured by the requirements of section 3(m) and this
part to determine if the employee has
received the applicable minimum wage
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§ 531.37
29 CFR Ch. V (7–1–19 Edition)
in cash or in facilities which may be legitimately included in ‘‘wages’’ payable under the Act.
(b) Deductions for articles such as
tools, miners’ lamps, dynamite caps,
and other items which do not constitute ‘‘board, lodging, or other facilities’’ may likewise be made in nonovertime workweeks if the employee
nevertheless received the required minimum wage in cash free and clear; but
to the extent that they reduce the
wages of the employee in any such
workweek below the minimum required by the Act, they are illegal.
[32 FR 13575, Sept. 28, 1967, as amended at 76
FR 18855, Apr. 5, 2011]
§ 531.37 Overtime workweeks.
(a) Section 7 requires that the employee receive compensation for overtime hours at ‘‘a rate of not less than
one and one-half times the regular rate
at which he is employed.’’ When overtime is worked by an employee who receives the whole or part of his or her
wage in facilities and it becomes necessary to determine the portion of
wages represented by facilities, all
such facilities must be measured by the
requirements of section 3(m) and subpart B of this part. It is the Administrator’s opinion that deductions may
be made, however, on the same basis in
an overtime workweek as in nonovertime workweeks (see § 531.36), if
their purpose and effect are not to
evade the overtime requirements of the
Act or other law, providing the amount
deducted does not exceed the amount
which could be deducted if the employee had only worked the maximum
number of straight-time hours during
the workweek. Deductions in excess of
this amount for such articles as tools
or other articles which are not ‘‘facilities’’ within the meaning of the Act are
illegal in overtime workweeks as well
as in nonovertime workweeks. There is
no limit on the amount which may be
deducted for ‘‘board, lodging, or other
facilities’’ in overtime workweeks (as
in workweeks when no overtime is
worked), provided that these deductions are made only for the ‘‘reasonable cost’’ of the items furnished.
These principles assume a situation
where bona fide deductions are made
for particular items in accordance with
the agreement or understanding of the
parties. If the situation is solely one of
refusal or failure to pay the full
amount of wages required by section 7,
these principles have no application.
Deductions made only in overtime
workweeks, or increases in the prices
charged for articles or services during
overtime workweeks will be scrutinized to determine whether they are
manipulations to evade the overtime
requirements of the Act.
(b) Where deductions are made from
the stipulated wage of an employee,
the regular rate of pay is arrived at on
the basis of the stipulated wage before
any deductions have been made. Where
board, lodging, or other facilities are
customarily furnished as additions to a
cash wage, the reasonable cost of the
facilities to the employer must be considered as part of the employee’s regular rate of pay. See Walling v. Alaska
Pacific Consolidated Mining Co., 152 F.2d
812 (9th Cir. 1945), cert. denied, 327 U.S.
803.
[76 FR 18855, Apr. 5, 2011]
PAYMENTS MADE TO PERSONS OTHER
THAN EMPLOYEES
§ 531.38
Amounts deducted for taxes.
Taxes which are assessed against the
employee and which are collected by
the employer and forwarded to the appropriate governmental agency may be
included as ‘‘wages’’ although they do
not technically constitute ‘‘board,
lodging, or other facilities’’ within the
meaning of section 3(m). This principle
is applicable to the employee’s share of
social security and State unemployment insurance taxes, as well as other
Federal, State, or local taxes, levies,
and assessments. No deduction may be
made for any tax or share of a tax
which the law requires to be borne by
the employer.
§ 531.39 Payments to third
pursuant to court order.
(a) Where an employer is legally
obliged, as by order of a court of competent and appropriate jurisdiction, to
pay a sum for the benefit or credit of
the employee to a creditor of the employee, trustee, or other third party,
under garnishment, wage attachment,
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Wage and Hour Division, Labor
§ 531.50
trustee process, or bankruptcy proceeding, deduction from wages of the
actual sum so paid is not prohibited:
Provided, That neither the employer
nor any person acting in his behalf or
interest derives any profit or benefit
from the transaction. In such case,
payment to the third person for the
benefit and credit of the employee will
be considered equivalent, for the purposes of the Act, to payment to the employee.
(b) The amount of any individual’s
earnings withheld by means of any
legal or equitable procedure for the
payment of any debt may not exceed
the restriction imposed by section
303(a), title III, Restriction on Garnishment, of the Consumer Credit Protection Act (82 Stat. 163, 164; 15 U.S.C. 1671
et seq.). The application of title III is
discussed in part 870 of this chapter.
When the payment to a third person of
moneys withheld pursuant to a court
order under which the withholdings exceeds that permitted by the CCPA, the
excess will not be considered equivalent to payment of wages to the employee for purpose of the Fair Labor
Standards Act.
[35 FR 10757, July 2, 1970]
§ 531.40 Payments to employee’s assignee.
(a) Where an employer is directed by
a voluntary assignment or order of his
employee to pay a sum for the benefit
of the employee to a creditor, donee, or
other third party, deduction from
wages of the actual sum so paid is not
prohibited: Provided, That neither the
employer nor any person acting in his
behalf or interest, directly or indirectly, derives any profit or benefit
from the transaction. In such case,
payment to the third person for the
benefit and credit of the employee will
be considered equivalent, for purposes
of the Act, to payment to the employee.
(b) No payment by the employer to a
third party will be recognized as a
valid payment of compensation required under the Act where it appears
that such payment was part of a plan
or arrangement to evade or circumvent
the requirements of section 3(m) or
subpart B of this part. For the protection of both employer and employee it
is suggested that full and adequate
record of all assignments and orders be
kept and preserved and that provisions
of the applicable State law with respect to signing, sealing, witnessing,
and delivery be observed.
(c) Under the principles stated in
paragraphs (a) and (b) of this section,
employers have been permitted to treat
as payments to employees for purposes
of the Act sums paid at the employees’
direction to third persons for the following purposes: Sums paid, as authorized by the employee, for the purchase
in his behalf of U.S. savings stamps or
U.S. savings bonds; union dues paid
pursuant to a collective bargaining
agreement with bona fide representatives of the employees and as permitted by law; employees’ store accounts with merchants wholly independent of the employer; insurance
premiums (paid to independent insurance companies where the employer is
under no obligation to supply the insurance and derives, directly or indirectly, no benefit or profit from it);
voluntary contributions to churches
and charitable, fraternal, athletic, and
social organizations, or societies from
which the employer receives no profit
or benefit directly or indirectly.
Subpart D—Tipped Employees
§ 531.50 Statutory provisions with respect to tipped employees.
(a) With respect to tipped employees,
section 3(m) provides that, in determining the wage an employer is required to pay a tipped employee, the
amount paid such employee by the employee’s employer shall be an amount
equal to—
(1) the cash wage paid such employee
which for purposes of such determination shall be not less than the cash
wage required to be paid such an employee on August 20, 1996 [i.e., $2.13];
and
(2) an additional amount on account
of the tips received by such employee
which amount is equal to the difference
between the wage specified in paragraph (1) and the wage in effect under
section 206(a)(1) of this title.
(b) ‘‘Tipped employee’’ is defined in
section 3(t) of the Act as follows:
Tipped employee means any employee
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§ 531.51
29 CFR Ch. V (7–1–19 Edition)
engaged in an occupation in which he
customarily and regularly receives
more than $30 a month in tips.
[76 FR 18855, Apr. 5, 2011]
§ 531.51 Conditions for taking tip credits in making wage payments.
The wage credit permitted on account of tips under section 3(m) may be
taken only with respect to wage payments made under the Act to those employees whose occupations in the workweeks for which such payments are
made are those of ‘‘tipped employees’’
as defined in section 3(t). Under section
3(t), the occupation of the employee
must be one ‘‘in which he customarily
and regularly receives more than $30 a
month in tips.’’ To determine whether
a tip credit may be taken in paying
wages to a particular employee it is
necessary to know what payments constitute ‘‘tips,’’ whether the employee
receives ‘‘more than $30 a month’’ in
such payments in the occupation in
which he is engaged, and whether in
such occupation he receives these payments in such amount ‘‘customarily
and regularly.’’ The principles applicable to a resolution of these questions
are discussed in the following sections.
[32 FR 13575, Sept. 28, 1967, as amended at 76
FR 18855, Apr. 5, 2011]
§ 531.52 General
‘‘tips.’’
characteristics
of
A tip is a sum presented by a customer as a gift or gratuity in recognition of some service performed for him.
It is to be distinguished from payment
of a charge, if any, made for the service. Whether a tip is to be given, and
its amount, are matters determined
solely by the customer, who has the
right to determine who shall be the recipient of the gratuity. Tips are the
property of the employee whether or
not the employer has taken a tip credit
under section 3(m) of the FLSA. The
employer is prohibited from using an
employee’s tips, whether or not it has
taken a tip credit, for any reason other
than that which is statutorily permitted in section 3(m): As a credit
against its minimum wage obligations
to the employee, or in furtherance of a
valid tip pool. Only tips actually received by an employee as money be-
longing to the employee may be counted in determining whether the person
is a ‘‘tipped employee’’ within the
meaning of the Act and in applying the
provisions of section 3(m) which govern
wage credits for tips.
[32 FR 13575, Sept. 28, 1967, as amended at 76
FR 18855, Apr. 5, 2011]
§ 531.53 Payments
tips.
which
constitute
In addition to cash sums presented
by customers which an employee keeps
as his own, tips received by an employee include, within the meaning of
the Act, amounts paid by bank check
or other negotiable instrument payble
at par and amounts transferred by the
employer to the employee pursuant to
directions from credit customers who
designate amounts to be added to their
bills as tips. Special gifts in forms
other than money or its equivalent as
above described such as theater tickets, passes, or merchandise, are not
counted as tips received by the employee for purposes of the Act.
§ 531.54
Tip pooling.
Where employees practice tip splitting, as where waiters give a portion of
their tips to the busboys, both the
amounts retained by the waiters and
those given the busboys are considered
tips of the individuals who retain
them, in applying the provisions of section 3(m) and 3(t). Similarly, where an
accounting is made to an employer for
his information only or in furtherance
of a pooling arrangement whereby the
employer redistributes the tips to the
employees upon some basis to which
they have mutually agreed among
themselves, the amounts received and
retained by each individual as his own
are counted as his tips for purposes of
the Act. Section 3(m) does not impose
a maximum contribution percentage on
valid mandatory tip pools, which can
only include those employees who customarily and regularly receive tips.
However, an employer must notify its
employees of any required tip pool contribution amount, may only take a tip
credit for the amount of tips each employee ultimately receives, and may
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Wage and Hour Division, Labor
§ 531.56
not retain any of the employees’ tips
for any other purpose.
[32 FR 13575, Sept. 28, 1967, as amended at 76
FR 18856, Apr. 5, 2011]
§ 531.55 Examples of amounts not received as tips.
(a) A compulsory charge for service,
such as 15 percent of the amount of the
bill, imposed on a customer by an employer’s establishment, is not a tip
and, even if distributed by the employer to its employees, cannot be
counted as a tip received in applying
the provisions of section 3(m) and 3(t).
Similarly, where negotiations between
a hotel and a customer for banquet facilities include amounts for distribution to employees of the hotel, the
amounts so distributed are not counted
as tips received.
(b) As stated above, service charges
and other similar sums which become
part of the employer’s gross receipts
are not tips for the purposes of the Act.
Where such sums are distributed by the
employer to its employees, however,
they may be used in their entirety to
satisfy the monetary requirements of
the Act.
[76 FR 18856, Apr. 5, 2011]
§ 531.56 ‘‘More than $30 a month in
tips.’’
(a) In general. An employee who receives tips, within the meaning of the
Act, is a ‘‘tipped employee’’ under the
definition in section 3(t) when, in the
occupation in which he is engaged, the
amounts he receives as tips customarily and regularly total ‘‘more than
$30 a month.’’ An employee employed
in an occupation in which the tips he
receives meet this minimum standard
is a ‘‘tipped employee’’ for whom the
wage credit provided by section 3(m)
may be taken in computing the compensation due him under the Act for
employment
in
such
occupation,
whether he is employed in it full time
or part time. An employee employed
full time or part time in an occupation
in which he does not receive more than
$30 a month in tips customarily and
regularly is not a ‘‘tipped employee’’
within the meaning of the Act and
must receive the full compensation required by its provisions in cash or al-
lowable facilities without any deduction for tips received under the provisions of section 3(m).
(b) Month. The definition of tipped
employee does not require that the calendar month be used in determining
whether more than $30 a month is customarily and regularly received as tips.
Any appropriate recurring monthly period beginning on the same day of the
calendar month may be used.
(c) Individual tip receipts are controlling. An employee must himself customarily and regularly receive more
than $30 a month in tips in order to
qualify as a tipped employee. The fact
that he is part of a group which has a
record of receiving more than $30 a
month in tips will not qualify him. For
example, a waitress who is newly hired
will not be considered a tipped employee merely because the other waitresses in the establishment receive tips
in the requisite amount. For the method of applying the test in initial and
terminal months of employment, see
§ 531.58.
(d) Significance of minimum monthly tip
receipts. More than $30 a month in tips
customarily and regularly received by
the employee is a minimum standard
that must be met before any wage credit for tips is determined under section
3(m). It does not govern or limit the determination of the appropriate amount
of wage credit under section 3(m) that
may be taken for tips under section
6(a)(1) (tip credit equals the difference
between the minimum wage required
by section 6(a)(1) and $2.13 per hour).
(e) Dual jobs. In some situations an
employee is employed in a dual job, as
for example, where a maintenance man
in a hotel also serves as a waiter. In
such a situation the employee, if he
customarily and regularly receives at
least $30 a month in tips for his work
as a waiter, is a tipped employee only
with respect to his employment as a
waiter. He is employed in two occupations, and no tip credit can be taken
for his hours of employment in his occupation of maintenance man. Such a
situation is distinguishable from that
of a waitress who spends part of her
time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses. It is
likewise distinguishable from the
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§ 531.57
29 CFR Ch. V (7–1–19 Edition)
counterman who also prepares his own
short orders or who, as part of a group
of countermen, takes a turn as a short
order cook for the group. Such related
duties in an occupation that is a tipped
occupation need not by themselves be
directed toward producing tips.
if qualification as a tipped employee is
based on his receipt of tips in the particular week or weeks of such month at
a rate in excess of $30 a month, where
the employee has worked less than a
month because he started or terminated employment during the month.
[32 FR 13575, Sept. 28, 1967, as amended at 76
FR 18855, Apr. 5, 2011]
[32 FR 13575, Sept. 28, 1967, as amended at 76
FR 18855, Apr. 5, 2011]
§ 531.57 Receiving
the
minimum
amount ‘‘customarily and regularly.’’
The employee must receive more
than $30 a month in tips ‘‘customarily
and regularly’’ in the occupation in
which he is engaged in order to qualify
as a tipped employee under section 3(t).
If it is known that he always receives
more than the stipulated amount each
month, as may be the case with many
employees in occupations such as those
of waiters, bellhops, taxicab drivers,
barbers, or beauty operators, the employee will qualify and the tip credit
provisions of section 3(m) may be applied. On the other hand, an employee
who only occasionally or sporadically
receives tips totaling more than $30 a
month, such as at Christmas or New
Years when customers may be more
generous than usual, will not be
deemed a tipped employee. The phrase
‘‘customarily and regularly’’ signifies a
frequency which must be greater than
occasional, but which may be less than
constant. If an employee is in an occupation in which he normally and recurrently receives more than $30 a month
in tips, he will be considered a tipped
employee even though occasionally because of sickness, vacation, seasonal
fluctuations or the like, he fails to receive more than $30 in tips in a particular month.
§ 531.59 The tip wage credit.
(a) In determining compliance with
the wage payment requirements of the
Act, under the provisions of section
3(m) the amount paid to a tipped employee by an employer is increased on
account of tips by an amount equal to
the formula set forth in the statute
(minimum wage required by section
6(a)(1) of the Act minus $2.13), provided
that the employer satisfies all the requirements of section 3(m). This tip
credit is in addition to any credit for
board, lodging, or other facilities which
may be allowable under section 3(m).
(b) As indicated in § 531.51, the tip
credit may be taken only for hours
worked by the employee in an occupation in which the employee qualifies as
a ‘‘tipped employee.’’ Pursuant to section 3(m), an employer is not eligible
to take the tip credit unless it has informed its tipped employees in advance
of the employer’s use of the tip credit
of the provisions of section 3(m) of the
Act, i.e.: The amount of the cash wage
that is to be paid to the tipped employee by the employer; the additional
amount by which the wages of the
tipped employee are increased on account of the tip credit claimed by the
employer, which amount may not exceed the value of the tips actually received by the employee; that all tips
received by the tipped employee must
be retained by the employee except for
a valid tip pooling arrangement limited to employees who customarily and
regularly receive tips; and that the tip
credit shall not apply to any employee
who has not been informed of these requirements in this section. The credit
allowed on account of tips may be less
than that permitted by statute (minimum wage required by section 6(a)(1)
minus $2.13); it cannot be more. In
order for the employer to claim the
maximum tip credit, the employer
must demonstrate that the employee
[32 FR 13575, Sept. 28, 1967, as amended at 76
FR 18855, Apr. 5, 2011]
§ 531.58 Initial and terminal months.
An exception to the requirement that
an employee, whether full-time, parttime, permanent or temporary, will
qualify as a tipped employee only if he
customarily and regularly receives
more than $30 a month in tips is made
in the case of initial and terminal
months of employment. In such
months the purpose of the provision for
tipped employees would seem fulfilled
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Wage and Hour Division, Labor
§ 536.3
received at least that amount in actual
tips. If the employee received less than
the maximum tip credit amount in
tips, the employer is required to pay
the balance so that the employee receives at least the minimum wage with
the defined combination of wages and
tips. With the exception of tips contributed to a valid tip pool as described in
§ 531.54, the tip credit provisions of section 3(m) also require employers to permit employees to retain all tips received by the employee.
[76 FR 18856, Apr. 5, 2011]
§ 531.60
Overtime payments.
When overtime is worked by a tipped
employee who is subject to the overtime pay provisions of the Act, the employee’s regular rate of pay is determined by dividing the employee’s total
remuneration for employment (except
statutory exclusions) in any workweek
by the total number of hours actually
worked by the employee in that workweek for which such compensation was
paid. (See part 778 of this chapter for a
detailed discussion of overtime compensation under the Act.) In accordance with section 3(m), a tipped employee’s regular rate of pay includes
the amount of tip credit taken by the
employer per hour (not in excess of the
minimum wage required by section
6(a)(1) minus $2.13), the reasonable cost
or fair value of any facilities furnished
to the employee by the employer, as
authorized under section 3(m) and this
part 531, and the cash wages including
commissions and certain bonuses paid
by the employer. Any tips received by
the employee in excess of the tip credit
need not be included in the regular
rate. Such tips are not payments made
by the employer to the employee as remuneration for employment within the
meaning of the Act.
[32 FR 13575, Sept. 28, 1967, as amended at 76
FR 18856, Apr. 5, 2011]
PART 536—AREA OF PRODUCTION
Sec.
536.1–536.2 [Reserved]
536.3 ‘‘Area of production’’ as used in section 13(b)(14) of the Fair Labor Standards
Act.
AUTHORITY: Sec. 13(a)(17), 52 Stat. 1067, as
amended, sec. 9, 75 Stat. 71, as amended, sec.
204(b), 80 Stat. 835; 29 U.S.C. 213(b)(14).
SOURCE: 27 FR 400, Jan. 13, 1962, unless otherwise noted.
§§ 536.1–536.2
[Reserved]
§ 536.3 ‘‘Area of production’’ as used in
section 13(b)(14) of the Fair Labor
Standards Act.
(a) An employee employed by an establishment commonly recognized as a
country elevator and having not more
than five employees (including such an
establishment which sells products and
services used in the operation of a
farm) shall be regarded as employed
within the ‘‘area of production,’’ within the meaning of section 13(b)(14) of
the Fair Labor Standards Act, if the
establishment by which he is employed
is located in the open country or in a
rural community and 95 percent of the
agricultural commodities received by
the establishment for storage or for
market come from normal rural
sources of supply within the following
air-line distances from the establishment:
(1) With respect to grain and soybeans—50 miles;
(2) With respect to any other agricultural commodities—20 miles.
(b) For the purpose of this section:
(1) ‘‘Open country or rural community’’ shall not include any city, town,
or urban place of 2,500 or greater population or any area within:
(i) One air-line mile of the city, town,
or urban place with a population of
2,500 up to by not including 50,000, or
(ii) Three air-line miles of any city,
town, or urban place with a population
of 50,000 up to but not including 500,000,
or
(iii) Five air-line miles of any city
with a population of 500,000 or greater,
according to the latest available
United States Census.
(2) The commodities shall be considered to come from ‘‘normal rural
sources of supply’’ within the specified
distances from the establishment if
they are received: (i) From farms within such specified distances, or (ii) from
farm assemblers or other establishments through which the commodity
customarily moves, which are within
such specified distances and located in
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Pt. 541
29 CFR Ch. V (7–1–19 Edition)
the open country or in a rural community, or (iii) from farm assemblers or
other establishments not located in the
open country or in a rural community
provided it can be demonstrated that
the commodities were produced on
farms within such specified distances.
(3) The period for determining whether 95 percent of the commodities are received from normal rural sources of
supply shall be the last preceding calendar month in which operations were
carried on for two workweeks or more,
except that until such time as an establishment has operated for such a
calendar month the period shall be the
time during which it has been in operation.
(4) The percentage of commodities received from normal rural sources of
supply within the specified distances
shall be determined by weight, volume
or other physical unit of measure, except that dollar value shall be used if
different commodities received in the
establishment are customarily measured in physical units that are not
comparable.
(Sec. 13(a) (17), 52 Stat. 1067, as amended, sec.
9, 75 Stat. 71; 29 U.S.C. 213 (a) (17))
[27 FR 400, Jan. 13, 1962, as amended at 71 FR
16666, Apr. 3, 2006]
PART 541—DEFINING AND DELIMITING THE EXEMPTIONS FOR EXECUTIVE, ADMINISTRATIVE, PROFESSIONAL,
COMPUTER
AND
OUTSIDE SALES EMPLOYEES
Subpart A—General Regulations
Sec.
541.0 Introductory statement.
541.1 Terms used in regulations.
541.2 Job titles insufficient.
541.3 Scope of the section 13(a)(1) exemptions.
541.4 Other laws and collective bargaining
agreements.
Subpart B—Executive Employees
541.100
ees.
541.101
541.102
541.103
541.104
541.105
541.106
General rule for executive employBusiness owner.
Management.
Department or subdivision.
Two or more other employees.
Particular weight.
Concurrent duties.
Subpart C—Administrative Employees
541.200 General rule for administrative employees.
541.201 Directly related to management or
general business operations.
541.202 Discretion and independent judgment.
541.203 Administrative exemption examples.
541.204 Educational establishments.
Subpart D—Professional Employees
541.300 General rule for professional employees.
541.301 Learned professionals.
541.302 Creative professionals.
541.303 Teachers.
541.304 Practice of law or medicine.
Subpart E—Computer Employees
541.400 General rule for computer employees.
541.401 Computer manufacture and repair.
541.402 Executive and administrative computer employees.
Subpart F—Outside Sales Employees
541.500 General rule for outside sales employees.
541.501 Making sales or obtaining orders.
541.502 Away from employer’s place of business.
541.503 Promotion work.
541.504 Drivers who sell.
Subpart G—Salary Requirements
541.600 Amount of salary required.
541.601 Highly compensated employees.
541.602 Salary basis.
541.603 Effect of improper deductions from
salary.
541.604 Minimum guarantee plus extras.
541.605 Fee basis.
541.606 Board, lodging or other facilities.
541.607 Automatic updates to amounts of
salary and compensation required.
Subpart H—Definitions And Miscellaneous
Provisions
541.700 Primary duty.
541.701 Customarily and regularly.
541.702 Exempt and nonexempt work.
541.703 Directly and closely related.
541.704 Use of manuals.
541.705 Trainees.
541.706 Emergencies.
541.707 Occasional tasks.
541.708 Combination exemptions.
541.709 Motion picture producing industry.
541.710 Employees of public agencies.
AUTHORITY: 29 U.S.C. 213; Public Law 101–
583, 104 Stat. 2871; Reorganization Plan No. 6
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Wage and Hour Division, Labor
§ 541.3
of 1950 (3 CFR 1945–53 Comp. p. 1004); Secretary’s Order No. 4–2001 (66 FR 29656).
AUTHORITY: 29 U.S.C. 213; Pub. L. 101–583,
104 Stat. 2871; Reorganization Plan No. 6 of
1950 (3 CFR, 1945–53 Comp., p. 1004); Secretary’s Order 01–2014 (Dec. 19, 2014), 79 FR
77527 (Dec. 24, 2014).
SOURCE: 69 FR 22260, Apr. 23, 2004, unless
otherwise noted.
Subpart A—General Regulations
§ 541.0 Introductory statement.
(a) Section 13(a)(1) of the Fair Labor
Standards Act, as amended, provides
an exemption from the Act’s minimum
wage and overtime requirements for
any employee employed in a bona fide
executive, administrative, or professional capacity (including any employee employed in the capacity of academic administrative personnel or
teacher in elementary or secondary
schools), or in the capacity of an outside sales employee, as such terms are
defined and delimited from time to
time by regulations of the Secretary,
subject to the provisions of the Administrative
Procedure
Act.
Section
13(a)(17) of the Act provides an exemption from the minimum wage and overtime requirements for computer systems analysts, computer programmers,
software engineers, and other similarly
skilled computer employees.
(b) The requirements for these exemptions are contained in this part as
follows: executive employees, subpart
B; administrative employees, subpart
C; professional employees, subpart D;
computer employees, subpart E; outside sales employees, subpart F. Subpart G contains regulations regarding
salary requirements applicable to most
of the exemptions, including salary
levels and the salary basis test. Subpart G also contains a provision for exempting certain highly compensated
employees. Subpart H contains definitions and other miscellaneous provisions applicable to all or several of the
exemptions.
(c) Effective July 1, 1972, the Fair
Labor Standards Act was amended to
include within the protection of the
equal pay provisions those employees
exempt from the minimum wage and
overtime pay provisions as bona fide
executive, administrative, and profes-
sional employees (including any employee employed in the capacity of academic administrative personnel or
teacher in elementary or secondary
schools), or in the capacity of an outside sales employee under section
13(a)(1) of the Act. The equal pay provisions in section 6(d) of the Fair Labor
Standards Act are administered and
enforced by the United States Equal
Employment Opportunity Commission.
§ 541.1
Terms used in regulations.
Act means the Fair Labor Standards
Act of 1938, as amended.
Administrator means the Administrator of the Wage and Hour Division,
United States Department of Labor.
The Secretary of Labor has delegated
to the Administrator the functions
vested in the Secretary under sections
13(a)(1) and 13(a)(17) of the Fair Labor
Standards Act.
§ 541.2
Job titles insufficient.
A job title alone is insufficient to establish the exempt status of an employee. The exempt or nonexempt status of any particular employee must be
determined on the basis of whether the
employee’s salary and duties meet the
requirements of the regulations in this
part.
§ 541.3 Scope of the section 13(a)(1) exemptions.
(a) The section 13(a)(1) exemptions
and the regulations in this part do not
apply to manual laborers or other
‘‘blue collar’’ workers who perform
work involving repetitive operations
with their hands, physical skill and energy. Such nonexempt ‘‘blue collar’’
employees gain the skills and knowledge required for performance of their
routine manual and physical work
through apprenticeships and on-the-job
training, not through the prolonged
course of specialized intellectual instruction required for exempt learned
professional employees such as medical
doctors, architects and archeologists.
Thus, for example, non-management
production-line employees and nonmanagement employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron
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§ 541.4
29 CFR Ch. V (7–1–19 Edition)
workers, craftsmen, operating engineers,
longshoremen,
construction
workers and laborers are entitled to
minimum wage and overtime premium
pay under the Fair Labor Standards
Act, and are not exempt under the regulations in this part no matter how
highly paid they might be.
(b)(1) The section 13(a)(1) exemptions
and the regulations in this part also do
not apply to police officers, detectives,
deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole
or probation officers, park rangers, fire
fighters, paramedics, emergency medical technicians, ambulance personnel,
rescue workers, hazardous materials
workers and similar employees, regardless of rank or pay level, who perform
work such as preventing, controlling or
extinguishing fires of any type; rescuing fire, crime or accident victims;
preventing or detecting crimes; conducting investigations or inspections
for violations of law; performing surveillance; pursuing, restraining and apprehending suspects; detaining or supervising suspected and convicted
criminals, including those on probation
or parole; interviewing witnesses; interrogating and fingerprinting suspects; preparing investigative reports;
or other similar work.
(2) Such employees do not qualify as
exempt executive employees because
their primary duty is not management
of the enterprise in which the employee
is employed or a customarily recognized department or subdivision thereof as required under § 541.100. Thus, for
example, a police officer or fire fighter
whose primary duty is to investigate
crimes or fight fires is not exempt
under section 13(a)(1) of the Act merely
because the police officer or fire fighter
also directs the work of other employees in the conduct of an investigation
or fighting a fire.
(3) Such employees do not qualify as
exempt administrative employees because their primary duty is not the
performance of work directly related
to the management or general business
operations of the employer or the employer’s customers as required under
§ 541.200.
(4) Such employees do not qualify as
exempt professionals because their pri-
mary duty is not the performance of
work requiring knowledge of an advanced type in a field of science or
learning customarily acquired by a
prolonged course of specialized intellectual instruction or the performance
of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor as required under § 541.300. Although some police officers, fire fighters, paramedics, emergency medical
technicians and similar employees
have college degrees, a specialized academic degree is not a standard prerequisite for employment in such occupations.
§ 541.4 Other laws and collective bargaining agreements.
The Fair Labor Standards Act provides minimum standards that may be
exceeded, but cannot be waived or reduced. Employers must comply, for example, with any Federal, State or municipal laws, regulations or ordinances
establishing a higher minimum wage or
lower maximum workweek than those
established under the Act. Similarly,
employers, on their own initiative or
under a collective bargaining agreement with a labor union, are not precluded by the Act from providing a
wage higher than the statutory minimum, a shorter workweek than the
statutory maximum, or a higher overtime premium (double time, for example) than provided by the Act. While
collective bargaining agreements cannot waive or reduce the Act’s protections, nothing in the Act or the regulations in this part relieves employers
from their contractual obligations
under collective bargaining agreements.
Subpart B—Executive Employees
§ 541.100 General rule for executive
employees.
(a) The term ‘‘employee employed in
a bona fide executive capacity’’ in section 13(a)(1) of the Act shall mean any
employee:
(1) Compensated on a salary basis
pursuant to § 541.600 at a rate per week
of not less than the 40th percentile of
weekly earnings of full-time nonhourly
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Wage and Hour Division, Labor
§ 541.103
workers in the lowest-wage Census Region (or 84 percent of that amount per
week, if employed in American Samoa
by employers other than the Federal
government), exclusive of board, lodging or other facilities. Beginning January 1, 2020, and every three years thereafter, the Secretary shall update the
required salary amount pursuant to
§ 541.607;
(2) Whose primary duty is management of the enterprise in which the
employee is employed or of a customarily recognized department or subdivision thereof;
(3) Who customarily and regularly directs the work of two or more other
employees; and
(4) Who has the authority to hire or
fire other employees or whose suggestions and recommendations as to the
hiring, firing, advancement, promotion
or any other change of status of other
employees are given particular weight.
(b) The phrase ‘‘salary basis’’ is defined at § 541.602; ‘‘board, lodging or
other facilities’’ is defined at § 541.606;
‘‘primary duty’’ is defined at § 541.700;
and ‘‘customarily and regularly’’ is defined at § 541.701.
[69 FR 22260, Apr. 23, 2004, as amended at 81
FR 32549, May 23, 2016]
§ 541.101 Business owner.
The term ‘‘employee employed in a
bona fide executive capacity’’ in section 13(a)(1) of the Act also includes
any employee who owns at least a bona
fide 20-percent equity interest in the
enterprise in which the employee is
employed, regardless of whether the
business is a corporate or other type of
organization, and who is actively engaged in its management. The term
‘‘management’’ is defined in § 541.102.
The requirements of Subpart G (salary
requirements) of this part do not apply
to the business owners described in this
section.
§ 541.102 Management.
Generally, ‘‘management’’ includes,
but is not limited to, activities such as
interviewing, selecting, and training of
employees; setting and adjusting their
rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use
in supervision or control; appraising
employees’ productivity and efficiency
for the purpose of recommending promotions or other changes in status;
handling employee complaints and
grievances;
disciplining
employees;
planning the work; determining the
techniques to be used; apportioning the
work among the employees; determining the type of materials, supplies,
machinery, equipment or tools to be
used or merchandise to be bought,
stocked and sold; controlling the flow
and distribution of materials or merchandise and supplies; providing for the
safety and security of the employees or
the property; planning and controlling
the budget; and monitoring or implementing legal compliance measures.
§ 541.103 Department or subdivision.
(a) The phrase ‘‘a customarily recognized department or subdivision’’ is intended to distinguish between a mere
collection of employees assigned from
time to time to a specific job or series
of jobs and a unit with permanent status and function. A customarily recognized department or subdivision must
have a permanent status and a continuing function. For example, a large
employer’s human resources department might have subdivisions for labor
relations, pensions and other benefits,
equal employment opportunity, and
personnel management, each of which
has a permanent status and function.
(b) When an enterprise has more than
one establishment, the employee in
charge of each establishment may be
considered in charge of a recognized
subdivision of the enterprise.
(c) A recognized department or subdivision need not be physically within
the employer’s establishment and may
move from place to place. The mere
fact that the employee works in more
than one location does not invalidate
the exemption if other factors show
that the employee is actually in charge
of a recognized unit with a continuing
function in the organization.
(d) Continuity of the same subordinate personnel is not essential to the
existence of a recognized unit with a
continuing function. An otherwise exempt employee will not lose the exemption merely because the employee
draws and supervises workers from a
pool or supervises a team of workers
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§ 541.104
29 CFR Ch. V (7–1–19 Edition)
drawn from other recognized units, if
other factors are present that indicate
that the employee is in charge of a recognized unit with a continuing function.
§ 541.104 Two or more other employees.
(a) To qualify as an exempt executive
under § 541.100, the employee must customarily and regularly direct the work
of two or more other employees. The
phrase ‘‘two or more other employees’’
means two full-time employees or their
equivalent. One full-time and two halftime employees, for example, are
equivalent to two full-time employees.
Four half-time employees are also
equivalent.
(b) The supervision can be distributed
among two, three or more employees,
but each such employee must customarily and regularly direct the work of
two or more other full-time employees
or the equivalent. Thus, for example, a
department with five full-time nonexempt workers may have up to two
exempt supervisors if each such supervisor customarily and regularly directs
the work of two of those workers.
(c) An employee who merely assists
the manager of a particular department and supervises two or more employees only in the actual manager’s
absence does not meet this requirement.
(d) Hours worked by an employee
cannot be credited more than once for
different executives. Thus, a shared responsibility for the supervision of the
same two employees in the same department does not satisfy this requirement. However, a full-time employee
who works four hours for one supervisor and four hours for a different supervisor, for example, can be credited
as a half-time employee for both supervisors.
§ 541.105 Particular weight.
To determine whether an employee’s
suggestions and recommendations are
given ‘‘particular weight,’’ factors to
be considered include, but are not limited to, whether it is part of the employee’s job duties to make such suggestions and recommendations; the frequency with which such suggestions
and recommendations are made or re-
quested; and the frequency with which
the employee’s suggestions and recommendations are relied upon. Generally, an executive’s suggestions and
recommendations must pertain to employees whom the executive customarily and regularly directs. It does not
include an occasional suggestion with
regard to the change in status of a coworker. An employee’s suggestions and
recommendations may still be deemed
to have ‘‘particular weight’’ even if a
higher level manager’s recommendation has more importance and even if
the employee does not have authority
to make the ultimate decision as to the
employee’s change in status.
§ 541.106
Concurrent duties.
(a) Concurrent performance of exempt and nonexempt work does not
disqualify an employee from the executive exemption if the requirements of
§ 541.100 are otherwise met. Whether an
employee meets the requirements of
§ 541.100 when the employee performs
concurrent duties is determined on a
case-by-case basis and based on the factors set forth in § 541.700. Generally, exempt executives make the decision regarding when to perform nonexempt
duties and remain responsible for the
success or failure of business operations under their management while
performing the nonexempt work. In
contrast, the nonexempt employee generally is directed by a supervisor to
perform the exempt work or performs
the exempt work for defined time periods. An employee whose primary duty
is ordinary production work or routine,
recurrent or repetitive tasks cannot
qualify for exemption as an executive.
(b) For example, an assistant manager in a retail establishment may perform work such as serving customers,
cooking food, stocking shelves and
cleaning the establishment, but performance of such nonexempt work does
not preclude the exemption if the assistant manager’s primary duty is
management. An assistant manager
can supervise employees and serve customers at the same time without losing the exemption. An exempt employee can also simultaneously direct
the work of other employees and stock
shelves.
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Wage and Hour Division, Labor
§ 541.202
(c) In contrast, a relief supervisor or
working supervisor whose primary
duty is performing nonexempt work on
the production line in a manufacturing
plant does not become exempt merely
because the nonexempt production line
employee occasionally has some responsibility for directing the work of
other nonexempt production line employees when, for example, the exempt
supervisor is unavailable. Similarly, an
employee whose primary duty is to
work as an electrician is not an exempt
executive even if the employee also directs the work of other employees on
the job site, orders parts and materials
for the job, and handles requests from
the prime contractor.
Subpart C—Administrative
Employees
§ 541.200 General rule for administrative employees.
(a) The term ‘‘employee employed in
a bona fide administrative capacity’’ in
section 13(a)(1) of the Act shall mean
any employee:
(1) Compensated on a salary or fee
basis pursuant to § 541.600 at a rate per
week of not less than the 40th percentile of weekly earnings of full-time
nonhourly workers in the lowest-wage
Census Region (or 84 percent of that
amount per week, if employed in American Samoa by employers other than
the Federal government), exclusive of
board, lodging or other facilities. Beginning January 1, 2020, and every
three years thereafter, the Secretary
shall update the required salary
amount pursuant to § 541.607;
(2) Whose primary duty is the performance of office or non-manual work
directly related to the management or
general business operations of the employer or the employer’s customers;
and
(3) Whose primary duty includes the
exercise of discretion and independent
judgment with respect to matters of
significance.
(b) The term ‘‘salary basis’’ is defined
at § 541.602; ‘‘fee basis’’ is defined at
§ 541.605; ‘‘board, lodging or other facilities’’ is defined at § 541.606; and ‘‘primary duty’’ is defined at § 541.700.
[69 FR 22260, Apr. 23, 2004, as amended at 81
FR 32549, May 23, 2016]
§ 541.201 Directly related to management or general business operations.
(a) To qualify for the administrative
exemption, an employee’s primary
duty must be the performance of work
directly related to the management or
general business operations of the employer or the employer’s customers.
The phrase ‘‘directly related to the
management or general business operations’’ refers to the type of work performed by the employee. To meet this
requirement, an employee must perform work directly related to assisting
with the running or servicing of the
business, as distinguished, for example,
from working on a manufacturing production line or selling a product in a
retail or service establishment.
(b) Work directly related to management or general business operations includes, but is not limited to, work in
functional areas such as tax; finance;
accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel
management; human resources; employee benefits; labor relations; public
relations, government relations; computer network, internet and database
administration; legal and regulatory
compliance; and similar activities.
Some of these activities may be performed by employees who also would
qualify for another exemption.
(c) An employee may qualify for the
administrative exemption if the employee’s primary duty is the performance of work directly related to the
management or general business operations of the employer’s customers.
Thus, for example, employees acting as
advisers or consultants to their employer’s clients or customers (as tax
experts or financial consultants, for example) may be exempt.
§ 541.202 Discretion and independent
judgment.
(a) To qualify for the administrative
exemption, an employee’s primary
duty must include the exercise of discretion and independent judgment with
respect to matters of significance. In
general, the exercise of discretion and
independent judgment involves the
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comparison and the evaluation of possible courses of conduct, and acting or
making a decision after the various
possibilities have been considered. The
term ‘‘matters of significance’’ refers
to the level of importance or consequence of the work performed.
(b) The phrase ‘‘discretion and independent judgment’’ must be applied in
the light of all the facts involved in the
particular employment situation in
which the question arises. Factors to
consider when determining whether an
employee exercises discretion and independent judgment with respect to matters of significance include, but are not
limited to: whether the employee has
authority to formulate, affect, interpret, or implement management policies or operating practices; whether
the employee carries out major assignments in conducting the operations of
the business; whether the employee
performs work that affects business operations to a substantial degree, even if
the employee’s assignments are related
to operation of a particular segment of
the business; whether the employee has
authority to commit the employer in
matters that have significant financial
impact; whether the employee has authority to waive or deviate from established policies and procedures without
prior approval; whether the employee
has authority to negotiate and bind the
company
on
significant
matters;
whether the employee provides consultation or expert advice to management; whether the employee is involved in planning long- or short-term
business objectives; whether the employee investigates and resolves matters of significance on behalf of management; and whether the employee
represents the company in handling
complaints, arbitrating disputes or resolving grievances.
(c) The exercise of discretion and
independent judgment implies that the
employee has authority to make an
independent choice, free from immediate direction or supervision. However, employees can exercise discretion
and independent judgment even if their
decisions or recommendations are reviewed at a higher level. Thus, the
term ‘‘discretion and independent judgment’’ does not require that the decisions made by an employee have a fi-
nality that goes with unlimited authority and a complete absence of review. The decisions made as a result of
the exercise of discretion and independent judgment may consist of recommendations for action rather than
the actual taking of action. The fact
that an employee’s decision may be
subject to review and that upon occasion the decisions are revised or reversed after review does not mean that
the employee is not exercising discretion and independent judgment. For example, the policies formulated by the
credit manager of a large corporation
may be subject to review by higher
company officials who may approve or
disapprove these policies. The management consultant who has made a study
of the operations of a business and who
has drawn a proposed change in organization may have the plan reviewed or
revised by superiors before it is submitted to the client.
(d) An employer’s volume of business
may make it necessary to employ a
number of employees to perform the
same or similar work. The fact that
many employees perform identical
work or work of the same relative importance does not mean that the work
of each such employee does not involve
the exercise of discretion and independent judgment with respect to matters of significance.
(e) The exercise of discretion and
independent judgment must be more
than the use of skill in applying wellestablished techniques, procedures or
specific standards described in manuals
or other sources. See also § 541.704 regarding use of manuals. The exercise of
discretion and independent judgment
also does not include clerical or secretarial work, recording or tabulating
data, or performing other mechanical,
repetitive, recurrent or routine work.
An employee who simply tabulates
data is not exempt, even if labeled as a
‘‘statistician.’’
(f) An employee does not exercise discretion and independent judgment with
respect to matters of significance
merely because the employer will experience financial losses if the employee
fails to perform the job properly. For
example, a messenger who is entrusted
with carrying large sums of money
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does not exercise discretion and independent judgment with respect to matters of significance even though serious
consequences may flow from the employee’s neglect. Similarly, an employee who operates very expensive
equipment does not exercise discretion
and independent judgment with respect
to matters of significance merely because improper performance of the employee’s duties may cause serious financial loss to the employer.
§ 541.203 Administrative exemption examples.
(a) Insurance claims adjusters generally meet the duties requirements for
the administrative exemption, whether
they work for an insurance company or
other type of company, if their duties
include activities such as interviewing
insureds, witnesses and physicians; inspecting property damage; reviewing
factual information to prepare damage
estimates; evaluating and making recommendations regarding coverage of
claims; determining liability and total
value of a claim; negotiating settlements; and making recommendations
regarding litigation.
(b) Employees in the financial services industry generally meet the duties
requirements for the administrative
exemption if their duties include work
such as collecting and analyzing information regarding the customer’s income, assets, investments or debts; determining which financial products
best meet the customer’s needs and financial circumstances; advising the
customer regarding the advantages and
disadvantages of different financial
products; and marketing, servicing or
promoting the employer’s financial
products. However, an employee whose
primary duty is selling financial products does not qualify for the administrative exemption.
(c) An employee who leads a team of
other employees assigned to complete
major projects for the employer (such
as purchasing, selling or closing all or
part of the business, negotiating a real
estate transaction or a collective bargaining agreement, or designing and
implementing productivity improvements) generally meets the duties requirements for the administrative exemption, even if the employee does not
have direct supervisory responsibility
over the other employees on the team.
(d) An executive assistant or administrative assistant to a business owner
or senior executive of a large business
generally meets the duties requirements for the administrative exemption if such employee, without specific
instructions or prescribed procedures,
has been delegated authority regarding
matters of significance.
(e) Human resources managers who
formulate, interpret or implement employment policies and management
consultants who study the operations
of a business and propose changes in
organization generally meet the duties
requirements for the administrative
exemption. However, personnel clerks
who ‘‘screen’’ applicants to obtain data
regarding their minimum qualifications and fitness for employment generally do not meet the duties requirements for the administrative exemption. Such personnel clerks typically
will reject all applicants who do not
meet minimum standards for the particular job or for employment by the
company. The minimum standards are
usually set by the exempt human resources manager or other company officials, and the decision to hire from
the group of qualified applicants who
do meet the minimum standards is
similarly made by the exempt human
resources manager or other company
officials. Thus, when the interviewing
and screening functions are performed
by the human resources manager or
personnel manager who makes the hiring decision or makes recommendations for hiring from the pool of qualified applicants, such duties constitute
exempt work, even though routine, because this work is directly and closely
related to the employee’s exempt functions.
(f) Purchasing agents with authority
to bind the company on significant
purchases generally meet the duties requirements for the administrative exemption even if they must consult with
top management officials when making
a purchase commitment for raw materials in excess of the contemplated
plant needs.
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29 CFR Ch. V (7–1–19 Edition)
(g) Ordinary inspection work generally does not meet the duties requirements for the administrative exemption. Inspectors normally perform specialized work along standardized lines
involving well-established techniques
and procedures which may have been
catalogued and described in manuals or
other sources. Such inspectors rely on
techniques and skills acquired by special training or experience. They have
some leeway in the performance of
their work but only within closely prescribed limits.
(h) Employees usually called examiners or graders, such as employees
that grade lumber, generally do not
meet the duties requirements for the
administrative exemption. Such employees usually perform work involving
the comparison of products with established standards which are frequently
catalogued. Often, after continued reference to the written standards, or
through experience, the employee acquires sufficient knowledge so that reference to written standards is unnecessary. The substitution of the employee’s memory for a manual of standards
does not convert the character of the
work performed to exempt work requiring the exercise of discretion and independent judgment.
(i) Comparison shopping performed
by an employee of a retail store who
merely reports to the buyer the prices
at a competitor’s store does not qualify
for the administrative exemption. However, the buyer who evaluates such reports on competitor prices to set the
employer’s prices generally meets the
duties requirements for the administrative exemption.
(j) Public sector inspectors or investigators of various types, such as fire
prevention or safety, building or construction, health or sanitation, environmental or soils specialists and similar employees, generally do not meet
the duties requirements for the administrative exemption because their work
typically does not involve work directly related to the management or
general business operations of the employer. Such employees also do not
qualify for the administrative exemption because their work involves the
use of skills and technical abilities in
gathering factual information, apply-
ing known standards or prescribed procedures, determining which procedure
to follow, or determining whether prescribed standards or criteria are met.
§ 541.204
Educational establishments.
(a) The term ‘‘employee employed in
a bona fide administrative capacity’’ in
section 13(a)(1) of the Act also includes
employees:
(1) Compensated on a salary or fee
basis pursuant to § 541.600 at a rate per
week of not less than the 40th percentile of weekly earnings of full-time
nonhourly workers in the lowest-wage
Census Region (or 84 percent of that
amount per week, if employed in American Samoa by employers other than
the Federal government), exclusive of
board, lodging or other facilities; or on
a salary basis which is at least equal to
the entrance salary for teachers in the
educational establishment by which
employed. Beginning January 1, 2020,
and every three years thereafter, the
Secretary shall update the required
salary amount pursuant to § 541.607;
and
(2) Whose primary duty is performing
administrative functions directly related to academic instruction or training in an educational establishment or
department or subdivision thereof.
(b) The term ‘‘educational establishment’’ means an elementary or secondary school system, an institution of
higher education or other educational
institution. Sections 3(v) and 3(w) of
the Act define elementary and secondary schools as those day or residential schools that provide elementary or
secondary education, as determined
under State law. Under the laws of
most States, such education includes
the curriculums in grades 1 through 12;
under many it includes also the introductory programs in kindergarten.
Such education in some States may
also include nursery school programs
in elementary education and junior
college curriculums in secondary education. The term ‘‘other educational
establishment’’
includes
special
schools for mentally or physically disabled or gifted children, regardless of
any classification of such schools as elementary, secondary or higher. Factors
relevant in determining whether post-
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secondary career programs are educational institutions include whether
the school is licensed by a state agency
responsible for the state’s educational
system or accredited by a nationally
recognized accrediting organization for
career schools. Also, for purposes of the
exemption, no distinction is drawn between public and private schools, or between those operated for profit and
those that are not for profit.
(c) The phrase ‘‘performing administrative functions directly related to
academic instruction or training’’
means work related to the academic
operations and functions in a school
rather than to administration along
the lines of general business operations. Such academic administrative
functions include operations directly
in the field of education. Jobs relating
to areas outside the educational field
are not within the definition of academic administration.
(1) Employees engaged in academic
administrative functions include: the
superintendent or other head of an elementary or secondary school system,
and any assistants, responsible for administration of such matters as curriculum, quality and methods of instructing, measuring and testing the
learning potential and achievement of
students, establishing and maintaining
academic and grading standards, and
other aspects of the teaching program;
the principal and any vice-principals
responsible for the operation of an elementary or secondary school; department heads in institutions of higher
education responsible for the administration of the mathematics department, the English department, the foreign language department, etc.; academic counselors who perform work
such as administering school testing
programs, assisting students with academic problems and advising students
concerning degree requirements; and
other employees with similar responsibilities.
(2) Jobs relating to building management and maintenance, jobs relating to
the health of the students, and academic staff such as social workers, psychologists, lunch room managers or dietitians do not perform academic administrative functions. Although such
work is not considered academic ad-
ministration, such employees may
qualify for exemption under § 541.200 or
under other sections of this part, provided the requirements for such exemptions are met.
[69 FR 22260, Apr. 23, 2004, as amended at 81
FR 32549, May 23, 2016]
Subpart D—Professional
Employees
§ 541.300 General rule for professional
employees.
(a) The term ‘‘employee employed in
a bona fide professional capacity’’ in
section 13(a)(1) of the Act shall mean
any employee:
(1) Compensated on a salary or fee
basis pursuant to § 541.600 at a rate per
week of not less than the 40th percentile of weekly earnings of full-time
nonhourly workers in the lowest-wage
Census Region (or 84 percent of that
amount per week, if employed in American Samoa by employers other than
the Federal government), exclusive of
board, lodging or other facilities. Beginning January 1, 2020, and every
three years thereafter, the Secretary
shall update the required salary
amount pursuant to § 541.607; and
(2) Whose primary duty is the performance of work:
(i) Requiring knowledge of an advanced type in a field of science or
learning customarily acquired by a
prolonged course of specialized intellectual instruction; or
(ii) Requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.
(b) The term ‘‘salary basis’’ is defined
at § 541.602; ‘‘fee basis’’ is defined at
§ 541.605; ‘‘board, lodging or other facilities’’ is defined at § 541.606; and ‘‘primary duty’’ is defined at § 541.700.
[69 FR 22260, Apr. 23, 2004, as amended at 81
FR 32549, May 23, 2016]
§ 541.301 Learned professionals.
(a) To qualify for the learned professional exemption, an employee’s primary duty must be the performance of
work requiring advanced knowledge in
a field of science or learning customarily acquired by a prolonged course of
specialized intellectual instruction.
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This primary duty test includes three
elements:
(1) The employee must perform work
requiring advanced knowledge;
(2) The advanced knowledge must be
in a field of science or learning; and
(3) The advanced knowledge must be
customarily acquired by a prolonged
course of specialized intellectual instruction.
(b) The phrase ‘‘work requiring advanced knowledge’’ means work which
is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment, as distinguished
from performance of routine mental,
manual, mechanical or physical work.
An employee who performs work requiring advanced knowledge generally
uses the advanced knowledge to analyze, interpret or make deductions
from varying facts or circumstances.
Advanced knowledge cannot be attained at the high school level.
(c) The phrase ‘‘field of science or
learning’’ includes the traditional professions of law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy and other
similar occupations that have a recognized professional status as distinguished from the mechanical arts or
skilled trades where in some instances
the knowledge is of a fairly advanced
type, but is not in a field of science or
learning.
(d) The phrase ‘‘customarily acquired
by a prolonged course of specialized intellectual instruction’’ restricts the exemption to professions where specialized academic training is a standard
prerequisite for entrance into the profession. The best prima facie evidence
that an employee meets this requirement is possession of the appropriate
academic degree. However, the word
‘‘customarily’’ means that the exemption is also available to employees in
such professions who have substantially the same knowledge level and
perform substantially the same work
as the degreed employees, but who attained
the
advanced
knowledge
through a combination of work experience and intellectual instruction.
Thus, for example, the learned profes-
sional exemption is available to the occasional lawyer who has not gone to
law school, or the occasional chemist
who is not the possessor of a degree in
chemistry. However, the learned professional exemption is not available for
occupations that customarily may be
performed with only the general
knowledge acquired by an academic degree in any field, with knowledge acquired through an apprenticeship, or
with training in the performance of
routine mental, manual, mechanical or
physical processes. The learned professional exemption also does not apply to
occupations in which most employees
have acquired their skill by experience
rather than by advanced specialized intellectual instruction.
(e)(1) Registered or certified medical
technologists. Registered or certified
medical technologists who have successfully completed three academic
years of pre-professional study in an
accredited college or university plus a
fourth year of professional course work
in a school of medical technology approved by the Council of Medical Education of the American Medical Association generally meet the duties requirements for the learned professional
exemption.
(2) Nurses. Registered nurses who are
registered by the appropriate State examining board generally meet the duties requirements for the learned professional exemption. Licensed practical
nurses and other similar health care
employees, however, generally do not
qualify as exempt learned professionals
because possession of a specialized advanced academic degree is not a standard prerequisite for entry into such occupations.
(3) Dental hygienists. Dental hygienists who have successfully completed
four academic years of pre-professional
and professional study in an accredited
college or university approved by the
Commission on Accreditation of Dental
and Dental Auxiliary Educational Programs of the American Dental Association generally meet the duties requirements for the learned professional exemption.
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(4) Physician assistants. Physician assistants who have successfully completed four academic years of pre-professional and professional study, including graduation from a physician
assistant program accredited by the
Accreditation Review Commission on
Education for the Physician Assistant,
and who are certified by the National
Commission on Certification of Physician Assistants generally meet the duties requirements for the learned professional exemption.
(5) Accountants. Certified public accountants generally meet the duties requirements for the learned professional
exemption. In addition, many other accountants who are not certified public
accountants but perform similar job
duties may qualify as exempt learned
professionals.
However,
accounting
clerks, bookkeepers and other employees who normally perform a great deal
of routine work generally will not
qualify as exempt professionals.
(6) Chefs. Chefs, such as executive
chefs and sous chefs, who have attained
a four-year specialized academic degree
in a culinary arts program, generally
meet the duties requirements for the
learned professional exemption. The
learned professional exemption is not
available to cooks who perform predominantly routine mental, manual,
mechanical or physical work.
(7) Paralegals. Paralegals and legal
assistants generally do not qualify as
exempt learned professionals because
an advanced specialized academic degree is not a standard prerequisite for
entry into the field. Although many
paralegals possess general four-year
advanced degrees, most specialized
paralegal programs are two-year associate degree programs from a community college or equivalent institution.
However, the learned professional exemption is available for paralegals who
possess advanced specialized degrees in
other professional fields and apply advanced knowledge in that field in the
performance of their duties. For example, if a law firm hires an engineer as a
paralegal to provide expert advice on
product liability cases or to assist on
patent matters, that engineer would
qualify for exemption.
(8) Athletic trainers. Athletic trainers
who have successfully completed four
academic years of pre-professional and
professional study in a specialized curriculum accredited by the Commission
on Accreditation of Allied Health Education Programs and who are certified
by the Board of Certification of the National Athletic Trainers Association
Board of Certification generally meet
the duties requirements for the learned
professional exemption.
(9) Funeral directors or embalmers. Licensed funeral directors and embalmers who are licensed by and working in
a state that requires successful completion of four academic years of pre-professional and professional study, including graduation from a college of
mortuary science accredited by the
American Board of Funeral Service
Education, generally meet the duties
requirements for the learned professional exemption.
(f) The areas in which the professional exemption may be available are
expanding. As knowledge is developed,
academic training is broadened and
specialized degrees are offered in new
and diverse fields, thus creating new
specialists in particular fields of
science or learning. When an advanced
specialized degree has become a standard requirement for a particular occupation, that occupation may have acquired the characteristics of a learned
profession. Accrediting and certifying
organizations similar to those listed in
paragraphs (e)(1), (e)(3), (e)(4), (e)(8) and
(e)(9) of this section also may be created in the future. Such organizations
may develop similar specialized curriculums and certification programs
which, if a standard requirement for a
particular occupation, may indicate
that the occupation has acquired the
characteristics of a learned profession.
§ 541.302 Creative professionals.
(a) To qualify for the creative professional exemption, an employee’s primary duty must be the performance of
work requiring invention, imagination,
originality or talent in a recognized
field of artistic or creative endeavor as
opposed to routine mental, manual,
mechanical or physical work. The exemption does not apply to work which
can be produced by a person with general manual or intellectual ability and
training.
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(b) To qualify for exemption as a creative professional, the work performed
must be ‘‘in a recognized field of artistic or creative endeavor.’’ This includes
such fields as music, writing, acting
and the graphic arts.
(c) The requirement of ‘‘invention,
imagination, originality or talent’’ distinguishes the creative professions
from work that primarily depends on
intelligence, diligence and accuracy.
The duties of employees vary widely,
and exemption as a creative professional depends on the extent of the invention, imagination, originality or
talent exercised by the employee. Determination of exempt creative professional status, therefore, must be made
on a case-by-case basis. This requirement generally is met by actors, musicians, composers, conductors, and soloists; painters who at most are given
the subject matter of their painting;
cartoonists who are merely told the
title or underlying concept of a cartoon
and must rely on their own creative
ability to express the concept; essayists, novelists, short-story writers and
screen-play writers who choose their
own subjects and hand in a finished
piece of work to their employers (the
majority of such persons are, of course,
not employees but self-employed); and
persons holding the more responsible
writing positions in advertising agencies. This requirement generally is not
met by a person who is employed as a
copyist, as an ‘‘animator’’ of motionpicture cartoons, or as a retoucher of
photographs, since such work is not
properly described as creative in character.
(d) Journalists may satisfy the duties
requirements for the creative professional exemption if their primary duty
is work requiring invention, imagination, originality or talent, as opposed
to work which depends primarily on intelligence, diligence and accuracy. Employees of newspapers, magazines, television and other media are not exempt
creative professionals if they only collect, organize and record information
that is routine or already public, or if
they do not contribute a unique interpretation or analysis to a news product. Thus, for example, newspaper reporters who merely rewrite press releases or who write standard recounts
of public information by gathering
facts on routine community events are
not exempt creative professionals. Reporters also do not qualify as exempt
creative professionals if their work
product is subject to substantial control by the employer. However, journalists may qualify as exempt creative
professionals if their primary duty is
performing on the air in radio, television or other electronic media; conducting investigative interviews; analyzing or interpreting public events;
writing editorials, opinion columns or
other commentary; or acting as a narrator or commentator.
§ 541.303 Teachers.
(a) The term ‘‘employee employed in
a bona fide professional capacity’’ in
section 13(a)(1) of the Act also means
any employee with a primary duty of
teaching, tutoring, instructing or lecturing in the activity of imparting
knowledge and who is employed and
engaged in this activity as a teacher in
an educational establishment by which
the employee is employed. The term
‘‘educational establishment’’ is defined
in § 541.204(b).
(b) Exempt teachers include, but are
not limited to: Regular academic
teachers; teachers of kindergarten or
nursery school pupils; teachers of gifted or disabled children; teachers of
skilled and semi-skilled trades and occupations; teachers engaged in automobile driving instruction; aircraft
flight instructors; home economics
teachers; and vocal or instrumental
music instructors. Those faculty members who are engaged as teachers but
also spend a considerable amount of
their time in extracurricular activities
such as coaching athletic teams or acting as moderators or advisors in such
areas as drama, speech, debate or journalism are engaged in teaching. Such
activities are a recognized part of the
schools’ responsibility in contributing
to the educational development of the
student.
(c) The possession of an elementary
or secondary teacher’s certificate provides a clear means of identifying the
individuals contemplated as being
within the scope of the exemption for
teaching professionals. Teachers who
possess a teaching certificate qualify
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for the exemption regardless of the terminology (e.g., permanent, conditional,
standard,
provisional,
temporary,
emergency, or unlimited) used by the
State to refer to different kinds of certificates. However, private schools and
public schools are not uniform in requiring a certificate for employment as
an elementary or secondary school
teacher, and a teacher’s certificate is
not generally necessary for employment in institutions of higher education or other educational establishments. Therefore, a teacher who is not
certified may be considered for exemption, provided that such individual is
employed as a teacher by the employing school or school system.
(d) The requirements of § 541.300 and
Subpart G (salary requirements) of this
part do not apply to the teaching professionals described in this section.
§ 541.304 Practice of law or medicine.
(a) The term ‘‘employee employed in
a bona fide professional capacity’’ in
section 13(a)(1) of the Act also shall
mean:
(1) Any employee who is the holder of
a valid license or certificate permitting
the practice of law or medicine or any
of their branches and is actually engaged in the practice thereof; and
(2) Any employee who is the holder of
the requisite academic degree for the
general practice of medicine and is engaged in an internship or resident program pursuant to the practice of the
profession.
(b) In the case of medicine, the exemption applies to physicians and
other practitioners licensed and practicing in the field of medical science
and healing or any of the medical specialties practiced by physicians or
practitioners. The term ‘‘physicians’’
includes medical doctors including general practitioners and specialists, osteopathic physicians (doctors of osteopathy), podiatrists, dentists (doctors
of dental medicine), and optometrists
(doctors of optometry or bachelors of
science in optometry).
(c) Employees engaged in internship
or resident programs, whether or not
licensed to practice prior to commencement of the program, qualify as
exempt professionals if they enter such
internship or resident programs after
the earning of the appropriate degree
required for the general practice of
their profession.
(d) The requirements of § 541.300 and
subpart G (salary requirements) of this
part do not apply to the employees described in this section.
Subpart E—Computer Employees
§ 541.400 General rule for computer
employees.
(a) Computer systems analysts, computer programmers, software engineers
or other similarly skilled workers in
the computer field are eligible for exemption as professionals under section
13(a)(1) of the Act and under section
13(a)(17) of the Act. Because job titles
vary widely and change quickly in the
computer industry, job titles are not
determinative of the applicability of
this exemption.
(b) The section 13(a)(1) exemption applies to any computer employee who is
compensated on a salary or fee basis
pursuant to § 541.600 at a rate per week
of not less than the 40th percentile of
weekly earnings of full-time nonhourly
workers in the lowest-wage Census Region (or 84 percent of that amount per
week, if employed in American Samoa
by employers other than the Federal
government), exclusive of board, lodging or other facilities. Beginning January 1, 2020, and every three years thereafter, the Secretary shall update the
required salary amount pursuant to
§ 541.607. The section 13(a)(17) exemption applies to any computer employee
compensated on an hourly basis at a
rate of not less than $27.63 an hour. In
addition, under either section 13(a)(1)
or section 13(a)(17) of the Act, the exemptions apply only to computer employees whose primary duty consists
of:
(1) The application of systems analysis techniques and procedures, including consulting with users, to determine
hardware, software or system functional specifications;
(2) The design, development, documentation, analysis, creation, testing
or modification of computer systems or
programs, including prototypes, based
on and related to user or system design
specifications;
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§ 541.401
29 CFR Ch. V (7–1–19 Edition)
(3) The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
(4) A combination of the aforementioned duties, the performance of
which requires the same level of skills.
(c) The term ‘‘salary basis’’ is defined
at § 541.602; ‘‘fee basis’’ is defined at
§ 541.605; ‘‘board, lodging or other facilities’’ is defined at § 541.606; and ‘‘primary duty’’ is defined at § 541.700.
[69 FR 22260, Apr. 23, 2004, as amended at 81
FR 32550, May 23, 2016]
§ 541.401 Computer manufacture and
repair.
The exemption for employees in computer occupations does not include employees engaged in the manufacture or
repair of computer hardware and related equipment. Employees whose
work is highly dependent upon, or facilitated by, the use of computers and
computer software programs (e.g., engineers, drafters and others skilled in
computer-aided design software), but
who are not primarily engaged in computer systems analysis and programming or other similarly skilled computer-related occupations identified in
§ 541.400(b), are also not exempt computer professionals.
§ 541.402 Executive and administrative
computer employees.
Computer employees within the
scope of this exemption, as well as
those employees not within its scope,
may also have executive and administrative duties which qualify the employees for exemption under subpart B
or subpart C of this part. For example,
systems analysts and computer programmers generally meet the duties
requirements for the administrative
exemption if their primary duty includes work such as planning, scheduling, and coordinating activities required to develop systems to solve
complex business, scientific or engineering problems of the employer or
the employer’s customers. Similarly, a
senior or lead computer programmer
who manages the work of two or more
other programmers in a customarily
recognized department or subdivision
of the employer, and whose recommendations as to the hiring, firing,
advancement, promotion or other
change of status of the other programmers are given particular weight, generally meets the duties requirements
for the executive exemption.
Subpart F—Outside Sales
Employees
§ 541.500 General rule for outside sales
employees.
(a) The term ‘‘employee employed in
the capacity of outside salesman’’ in
section 13(a)(1) of the Act shall mean
any employee:
(1) Whose primary duty is:
(i) making sales within the meaning
of section 3(k) of the Act, or
(ii) obtaining orders or contracts for
services or for the use of facilities for
which a consideration will be paid by
the client or customer; and
(2) Who is customarily and regularly
engaged away from the employer’s
place or places of business in performing such primary duty.
(b) The term ‘‘primary duty’’ is defined at § 541.700. In determining the
primary duty of an outside sales employee, work performed incidental to
and in conjunction with the employee’s
own outside sales or solicitations, including incidental deliveries and collections, shall be regarded as exempt
outside sales work. Other work that
furthers the employee’s sales efforts
also shall be regarded as exempt work
including, for example, writing sales
reports, updating or revising the employee’s sales or display catalogue,
planning itineraries and attending
sales conferences.
(c) The requirements of subpart G
(salary requirements) of this part do
not apply to the outside sales employees described in this section.
§ 541.501 Making sales or obtaining orders.
(a) Section 541.500 requires that the
employee be engaged in:
(1) Making sales within the meaning
of section 3(k) of the Act, or
(2) Obtaining orders or contracts for
services or for the use of facilities.
(b) Sales within the meaning of section 3(k) of the Act include the transfer
of title to tangible property, and in
certain cases, of tangible and valuable
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§ 541.504
evidences of intangible property. Section 3(k) of the Act states that ‘‘sale’’
or ‘‘sell’’ includes any sale, exchange,
contract to sell, consignment for sale,
shipment for sale, or other disposition.
(c) Exempt outside sales work includes not only the sales of commodities, but also ‘‘obtaining orders or contracts for services or for the use of facilities for which a consideration will
be paid by the client or customer.’’ Obtaining orders for ‘‘the use of facilities’’ includes the selling of time on
radio or television, the solicitation of
advertising for newspapers and other
periodicals, and the solicitation of
freight for railroads and other transportation agencies.
(d) The word ‘‘services’’ extends the
outside sales exemption to employees
who sell or take orders for a service,
which may be performed for the customer by someone other than the person taking the order.
§ 541.502 Away from employer’s place
of business.
An outside sales employee must be
customarily and regularly engaged
‘‘away from the employer’s place or
places of business.’’ The outside sales
employee is an employee who makes
sales at the customer’s place of business or, if selling door-to-door, at the
customer’s home. Outside sales does
not include sales made by mail, telephone or the Internet unless such contact is used merely as an adjunct to
personal calls. Thus, any fixed site,
whether home or office, used by a
salesperson as a headquarters or for
telephonic solicitation of sales is considered one of the employer’s places of
business, even though the employer is
not in any formal sense the owner or
tenant of the property. However, an
outside sales employee does not lose
the exemption by displaying samples in
hotel sample rooms during trips from
city to city; these sample rooms should
not be considered as the employer’s
places of business. Similarly, an outside sales employee does not lose the
exemption by displaying the employer’s products at a trade show. If selling
actually occurs, rather than just sales
promotion, trade shows of short duration (i.e., one or two weeks) should not
be considered as the employer’s place
of business.
§ 541.503 Promotion work.
(a) Promotion work is one type of activity often performed by persons who
make sales, which may or may not be
exempt outside sales work, depending
upon the circumstances under which it
is performed. Promotional work that is
actually performed incidental to and in
conjunction with an employee’s own
outside sales or solicitations is exempt
work. On the other hand, promotional
work that is incidental to sales made,
or to be made, by someone else is not
exempt outside sales work. An employee who does not satisfy the requirements of this subpart may still
qualify as an exempt employee under
other subparts of this rule.
(b) A manufacturer’s representative,
for example, may perform various
types of promotional activities such as
putting up displays and posters, removing damaged or spoiled stock from the
merchant’s shelves or rearranging the
merchandise. Such an employee can be
considered an exempt outside sales employee if the employee’s primary duty
is making sales or contracts. Promotion activities directed toward consummation of the employee’s own sales
are exempt. Promotional activities designed to stimulate sales that will be
made by someone else are not exempt
outside sales work.
(c) Another example is a company
representative who visits chain stores,
arranges the merchandise on shelves,
replenishes stock by replacing old with
new merchandise, sets up displays and
consults with the store manager when
inventory runs low, but does not obtain
a commitment for additional purchases. The arrangement of merchandise on the shelves or the replenishing
of stock is not exempt work unless it is
incidental to and in conjunction with
the employee’s own outside sales. Because the employee in this instance
does not consummate the sale nor direct efforts toward the consummation
of a sale, the work is not exempt outside sales work.
§ 541.504 Drivers who sell.
(a) Drivers who deliver products and
also sell such products may qualify as
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§ 541.600
29 CFR Ch. V (7–1–19 Edition)
exempt outside sales employees only if
the employee has a primary duty of
making sales. In determining the primary duty of drivers who sell, work
performed incidental to and in conjunction with the employee’s own outside sales or solicitations, including
loading, driving or delivering products,
shall be regarded as exempt outside
sales work.
(b) Several factors should be considered in determining if a driver has a
primary duty of making sales, including, but not limited to: a comparison of
the driver’s duties with those of other
employees engaged as truck drivers
and as salespersons; possession of a
selling or solicitor’s license when such
license is required by law or ordinances; presence or absence of customary or contractual arrangements
concerning amounts of products to be
delivered; description of the employee’s
occupation in collective bargaining
agreements; the employer’s specifications as to qualifications for hiring;
sales training; attendance at sales conferences; method of payment; and proportion of earnings directly attributable to sales.
(c) Drivers who may qualify as exempt outside sales employees include:
(1) A driver who provides the only
sales contact between the employer
and the customers visited, who calls on
customers and takes orders for products, who delivers products from stock
in the employee’s vehicle or procures
and delivers the product to the customer on a later trip, and who receives
compensation commensurate with the
volume of products sold.
(2) A driver who obtains or solicits
orders for the employer’s products
from persons who have authority to
commit the customer for purchases.
(3) A driver who calls on new prospects for customers along the employee’s route and attempts to convince
them of the desirability of accepting
regular delivery of goods.
(4) A driver who calls on established
customers along the route and persuades regular customers to accept delivery of increased amounts of goods or
of new products, even though the initial sale or agreement for delivery was
made by someone else.
(d) Drivers who generally would not
qualify as exempt outside sales employees include:
(1) A route driver whose primary
duty is to transport products sold by
the employer through vending machines and to keep such machines
stocked, in good operating condition,
and in good locations.
(2) A driver who often calls on established customers day after day or week
after week, delivering a quantity of the
employer’s products at each call when
the sale was not significantly affected
by solicitations of the customer by the
delivering driver or the amount of the
sale is determined by the volume of the
customer’s sales since the previous delivery.
(3) A driver primarily engaged in
making deliveries to customers and
performing activities intended to promote sales by customers (including
placing point-of-sale and other advertising materials, price stamping commodities, arranging merchandise on
shelves, in coolers or in cabinets, rotating stock according to date, and cleaning and otherwise servicing display
cases), unless such work is in furtherance of the driver’s own sales efforts.
Subpart G—Salary Requirements
§ 541.600 Amount of salary required.
(a) To qualify as an exempt executive, administrative or professional
employee under section 13(a)(1) of the
Act, an employee must be compensated
on a salary basis at a rate per week of
not less than the 40th percentile of
weekly earnings of full-time nonhourly
workers in the lowest-wage Census Region. As of December 1, 2016, and until
a new rate is published in the FEDERAL
REGISTER by the Secretary, such an
employee must be compensated on a
salary basis at a rate per week of not
less than $913 (or $767 per week, if employed in American Samoa by employers other than the Federal government), exclusive of board, lodging or
other facilities. Beginning January 1,
2020, and every three years thereafter,
the Secretary shall update the required
salary amount pursuant to § 541.607. Administrative and professional employees may also be paid on a fee basis, as
defined in § 541.605.
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§ 541.601
(b) The required amount of compensation per week may be translated
into equivalent amounts for periods
longer than one week. The requirement
will be met if the employee is compensated biweekly on a salary basis of
$1,826, semimonthly on a salary basis of
$1,978, or monthly on a salary basis of
$3,956. However, the shortest period of
payment that will meet this compensation requirement is one week. Beginning January 1, 2020, and every three
years thereafter, the Secretary shall
update the required salary amount pursuant to § 541.607 and the updated salary amount may be paid weekly, biweekly, semimonthly, or monthly on a
salaried basis.
(c) In the case of academic administrative employees, the compensation
requirement also may be met by compensation on a salary basis at a rate at
least equal to the entrance salary for
teachers in the educational establishment by which the employee is employed, as provided in § 541.204(a)(1).
(d) In the case of computer employees, the compensation requirement also
may be met by compensation on an
hourly basis at a rate not less than
$27.63 an hour, as provided in
§ 541.400(b).
(e) In the case of professional employees, the compensation requirements in this section shall not apply to
employees engaged as teachers (see
§ 541.303); employees who hold a valid license or certificate permitting the
practice of law or medicine or any of
their branches and are actually engaged in the practice thereof (see
§ 541.304); or to employees who hold the
requisite academic degree for the general practice of medicine and are engaged in an internship or resident program pursuant to the practice of the
profession (see § 541.304). In the case of
medical occupations, the exception
from the salary or fee requirement does
not apply to pharmacists, nurses,
therapists, technologists, sanitarians,
dietitians, social workers, psychologists, psychometrists, or other professions which service the medical profession.
[69 FR 22260, Apr. 23, 2004, as amended at 81
FR 32550, May 23, 2016]
§ 541.601
ees.
Highly compensated employ-
(a) An employee shall be exempt
under section 13(a)(1) of the Act if:
(1) The employee receives total annual compensation of at least the
annualized earnings amount of the 90th
percentile of full-time nonhourly workers nationally; and
(2) The employee customarily and
regularly performs any one or more of
the exempt duties or responsibilities of
an executive, administrative or professional employee identified in subpart
B, C, or D of this part.
(b) As of December 1, 2016, and until
a new amount is published in the FEDERAL REGISTER by the Secretary and
becomes effective, such an employee
must receive total annual compensation of at least $134,004. Beginning January 1, 2020, and every three years
thereafter, the Secretary shall update
the required total annual compensation amount pursuant to § 541.607.
(1) ‘‘Total annual compensation’’
must include at least a weekly amount
equal to the required salary amount required by § 541.600(a) paid on a salary or
fee basis as set forth in §§ 541.602 and
541.605, except that § 541.602(a)(3) shall
not apply to highly compensated employees. Total annual compensation
may also include commissions, nondiscretionary bonuses and other nondiscretionary compensation earned during
a 52-week period. Total annual compensation does not include board, lodging and other facilities as defined in
§ 541.606, and does not include payments
for medical insurance, payments for
life insurance, contributions to retirement plans and the cost of other fringe
benefits.
(2) If an employee’s total annual
compensation does not total at least
the minimum amount established in
paragraph (a) of this section by the last
pay period of the 52-week period, the
employer may, during the last pay period or within one month after the end
of the 52-week period, make one final
payment sufficient to achieve the required level. For example, if the current annual salary level for a highly
compensated employee is $134,004, an
employee may earn $100,000 in base salary, and the employer may anticipate
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§ 541.602
29 CFR Ch. V (7–1–19 Edition)
based upon past sales that the employee also will earn $35,000 in commissions. However, due to poor sales in the
final quarter of the year, the employee
actually only earns $10,000 in commissions. In this situation, the employer
may within one month after the end of
the year make a payment of at least
$24,004 to the employee. Any such final
payment made after the end of the 52week period may count only toward
the prior year’s total annual compensation and not toward the total annual
compensation in the year it was paid.
If the employer fails to make such a
payment, the employee does not qualify as a highly compensated employee,
but may still qualify as exempt under
subparts B, C, or D of this part.
(3) An employee who does not work a
full year for the employer, either because the employee is newly hired after
the beginning of the year or ends the
employment before the end of the year,
may qualify for exemption under this
section if the employee receives a pro
rata portion of the minimum amount
established in paragraph (a) of this section, based upon the number of weeks
that the employee will be or has been
employed. An employer may make one
final payment as under paragraph (b)(2)
of this section within one month after
the end of employment.
(4) The employer may utilize any 52week period as the year, such as a calendar year, a fiscal year, or an anniversary of hire year. If the employer does
not identify some other year period in
advance, the calendar year will apply.
(c) A high level of compensation is a
strong indicator of an employee’s exempt status, thus eliminating the need
for a detailed analysis of the employee’s job duties. Thus, a highly compensated employee will qualify for exemption if the employee customarily
and regularly performs any one or
more of the exempt duties or responsibilities of an executive, administrative or professional employee identified
in subparts B, C or D of this part. An
employee may qualify as a highly compensated executive employee, for example, if the employee customarily
and regularly directs the work of two
or more other employees, even though
the employee does not meet all of the
other requirements for the executive
exemption under § 541.100.
(d) This section applies only to employees whose primary duty includes
performing office or non-manual work.
Thus, for example, non-management
production-line workers and non-management employees in maintenance,
construction and similar occupations
such as carpenters, electricians, mechanics,
plumbers,
iron
workers,
craftsmen, operating engineers, longshoremen, construction workers, laborers and other employees who perform
work involving repetitive operations
with their hands, physical skill and energy are not exempt under this section
no matter how highly paid they might
be.
[69 FR 22260, Apr. 23, 2004, as amended at 81
FR 32550, May 23, 2016]
§ 541.602 Salary basis.
(a) General rule. An employee will be
considered to be paid on a ‘‘salary
basis’’ within the meaning of this part
if the employee regularly receives each
pay period on a weekly, or less frequent basis, a predetermined amount
constituting all or part of the employee’s compensation, which amount is
not subject to reduction because of
variations in the quality or quantity of
the work performed.
(1) Subject to the exceptions provided
in paragraph (b) of this section, an exempt employee must receive the full
salary for any week in which the employee performs any work without regard to the number of days or hours
worked. Exempt employees need not be
paid for any workweek in which they
perform no work.
(2) An employee is not paid on a salary basis if deductions from the employee’s predetermined compensation
are made for absences occasioned by
the employer or by the operating requirements of the business. If the employee is ready, willing and able to
work, deductions may not be made for
time when work is not available.
(3) Up to ten percent of the salary
amount required by § 541.600(a) may be
satisfied by the payment of nondiscretionary bonuses, incentives, and
commissions, that are paid quarterly
or more frequently. If by the last pay
period of the quarter the sum of the
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Wage and Hour Division, Labor
§ 541.602
employee’s weekly salary plus nondiscretionary bonus, incentive, and commission payments received does not
equal 13 times the weekly salary
amount required by § 541.600(a), the employer may make one final payment
sufficient to achieve the required level
no later than the next pay period after
the end of the quarter. Any such final
payment made after the end of the 13week period may count only toward
the prior quarter’s salary amount and
not toward the salary amount in the
quarter it was paid. This provision does
not apply to highly compensated employees under § 541.601.
(b)
Exceptions.
The
prohibition
against deductions from pay in the salary basis requirement is subject to the
following exceptions:
(1) Deductions from pay may be made
when an exempt employee is absent
from work for one or more full days for
personal reasons, other than sickness
or disability. Thus, if an employee is
absent for two full days to handle personal affairs, the employee’s salaried
status will not be affected if deductions
are made from the salary for two fullday absences. However, if an exempt
employee is absent for one and a half
days for personal reasons, the employer
can deduct only for the one full-day absence.
(2) Deductions from pay may be made
for absences of one or more full days
occasioned by sickness or disability
(including work-related accidents) if
the deduction is made in accordance
with a bona fide plan, policy or practice of providing compensation for loss
of salary occasioned by such sickness
or disability. The employer is not required to pay any portion of the employee’s salary for full-day absences for
which the employee receives compensation under the plan, policy or practice.
Deductions for such full-day absences
also may be made before the employee
has qualified under the plan, policy or
practice, and after the employee has
exhausted the leave allowance thereunder. Thus, for example, if an employer maintains a short-term disability insurance plan providing salary
replacement for 12 weeks starting on
the fourth day of absence, the employer may make deductions from pay
for the three days of absence before the
employee qualifies for benefits under
the plan; for the twelve weeks in which
the employee receives salary replacement benefits under the plan; and for
absences after the employee has exhausted the 12 weeks of salary replacement benefits. Similarly, an employer
may make deductions from pay for absences of one or more full days if salary
replacement benefits are provided
under a State disability insurance law
or under a State workers’ compensation law.
(3) While an employer cannot make
deductions from pay for absences of an
exempt employee occasioned by jury
duty, attendance as a witness or temporary military leave, the employer
can offset any amounts received by an
employee as jury fees, witness fees or
military pay for a particular week
against the salary due for that particular week without loss of the exemption.
(4) Deductions from pay of exempt
employees may be made for penalties
imposed in good faith for infractions of
safety rules of major significance.
Safety rules of major significance include those relating to the prevention
of serious danger in the workplace or
to other employees, such as rules prohibiting smoking in explosive plants,
oil refineries and coal mines.
(5) Deductions from pay of exempt
employees may be made for unpaid disciplinary suspensions of one or more
full days imposed in good faith for infractions of workplace conduct rules.
Such suspensions must be imposed pursuant to a written policy applicable to
all employees. Thus, for example, an
employer may suspend an exempt employee without pay for three days for
violating a generally applicable written policy prohibiting sexual harassment. Similarly, an employer may suspend an exempt employee without pay
for twelve days for violating a generally applicable written policy prohibiting workplace violence.
(6) An employer is not required to
pay the full salary in the initial or terminal week of employment. Rather, an
employer may pay a proportionate part
of an employee’s full salary for the
time actually worked in the first and
last week of employment. In such
weeks, the payment of an hourly or
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§ 541.603
29 CFR Ch. V (7–1–19 Edition)
daily equivalent of the employee’s full
salary for the time actually worked
will meet the requirement. However,
employees are not paid on a salary
basis within the meaning of these regulations if they are employed occasionally for a few days, and the employer
pays them a proportionate part of the
weekly salary when so employed.
(7) An employer is not required to
pay the full salary for weeks in which
an exempt employee takes unpaid
leave under the Family and Medical
Leave Act. Rather, when an exempt
employee takes unpaid leave under the
Family and Medical Leave Act, an employer may pay a proportionate part of
the full salary for time actually
worked. For example, if an employee
who normally works 40 hours per week
uses four hours of unpaid leave under
the Family and Medical Leave Act, the
employer could deduct 10 percent of the
employee’s normal salary that week.
(c) When calculating the amount of a
deduction from pay allowed under
paragraph (b) of this section, the employer may use the hourly or daily
equivalent of the employee’s full weekly salary or any other amount proportional to the time actually missed by
the employee. A deduction from pay as
a penalty for violations of major safety
rules under paragraph (b)(4) of this section may be made in any amount.
[69 FR 22260, Apr. 23, 2004, as amended at 81
FR 32550, May 23, 2016]
§ 541.603 Effect of improper deductions from salary.
(a) An employer who makes improper
deductions from salary shall lose the
exemption if the facts demonstrate
that the employer did not intend to
pay employees on a salary basis. An actual practice of making improper deductions demonstrates that the employer did not intend to pay employees
on a salary basis. The factors to consider when determining whether an employer has an actual practice of making improper deductions include, but
are not limited to: the number of improper deductions, particularly as compared to the number of employee infractions warranting discipline; the
time period during which the employer
made improper deductions; the number
and geographic location of employees
whose salary was improperly reduced;
the number and geographic location of
managers responsible for taking the
improper deductions; and whether the
employer has a clearly communicated
policy permitting or prohibiting improper deductions.
(b) If the facts demonstrate that the
employer has an actual practice of
making improper deductions, the exemption is lost during the time period
in which the improper deductions were
made for employees in the same job
classification working for the same
managers responsible for the actual
improper deductions. Employees in different job classifications or who work
for different managers do not lose their
status as exempt employees. Thus, for
example, if a manager at a company facility routinely docks the pay of engineers at that facility for partial-day
personal absences, then all engineers at
that facility whose pay could have been
improperly docked by the manager
would lose the exemption; engineers at
other facilities or working for other
managers, however, would remain exempt.
(c) Improper deductions that are either isolated or inadvertent will not result in loss of the exemption for any
employees subject to such improper deductions, if the employer reimburses
the employees for such improper deductions.
(d) If an employer has a clearly communicated policy that prohibits the
improper pay deductions specified in
§ 541.602(a) and includes a complaint
mechanism, reimburses employees for
any improper deductions and makes a
good faith commitment to comply in
the future, such employer will not lose
the exemption for any employees unless the employer willfully violates the
policy by continuing to make improper
deductions after receiving employee
complaints. If an employer fails to reimburse employees for any improper
deductions or continues to make improper deductions after receiving employee complaints, the exemption is
lost during the time period in which
the improper deductions were made for
employees in the same job classification working for the same managers responsible for the actual improper deductions. The best evidence of a clearly
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§ 541.605
communicated policy is a written policy that was distributed to employees
prior to the improper pay deductions
by, for example, providing a copy of the
policy to employees at the time of hire,
publishing the policy in an employee
handbook or publishing the policy on
the employer’s Intranet.
(e) This section shall not be construed in an unduly technical manner
so as to defeat the exemption.
§ 541.604 Minimum guarantee plus extras.
(a) An employer may provide an exempt employee with additional compensation without losing the exemption or violating the salary basis requirement, if the employment arrangement also includes a guarantee of at
least the minimum weekly-required
amount paid on a salary basis. Thus,
for example, if the current weekly salary level is $913, an exempt employee
guaranteed at least $913 each week paid
on a salary basis may also receive additional compensation of a one percent
commission on sales. An exempt employee also may receive a percentage of
the sales or profits of the employer if
the employment arrangement also includes a guarantee of at least $913 each
week paid on a salary basis. Similarly,
the exemption is not lost if an exempt
employee who is guaranteed at least
$913 each week paid on a salary basis
also receives additional compensation
based on hours worked for work beyond
the normal workweek. Such additional
compensation may be paid on any basis
(e.g., flat sum, bonus payment,
straight-time hourly amount, time and
one-half or any other basis), and may
include paid time off.
(b) An exempt employee’s earnings
may be computed on an hourly, a daily
or a shift basis, without losing the exemption or violating the salary basis
requirement, if the employment arrangement also includes a guarantee of
at least the minimum weekly required
amount paid on a salary basis regardless of the number of hours, days or
shifts worked, and a reasonable relationship exists between the guaranteed
amount and the amount actually
earned. The reasonable relationship
test will be met if the weekly guarantee is roughly equivalent to the em-
ployee’s usual earnings at the assigned
hourly, daily or shift rate for the employee’s normal scheduled workweek.
Thus, for example, if the weekly salary
level is $913, an exempt employee guaranteed compensation of at least $1,000
for any week in which the employee
performs any work, and who normally
works four or five shifts each week,
may be paid $300 per shift without violating the salary basis requirement.
The reasonable relationship requirement applies only if the employee’s
pay is computed on an hourly, daily or
shift basis. It does not apply, for example, to an exempt store manager paid a
guaranteed salary per week that exceeds the current salary level who also
receives a commission of one-half percent of all sales in the store or five percent of the store’s profits, which in
some weeks may total as much as, or
even more than, the guaranteed salary.
[81 FR 32551, May 23, 2016]
§ 541.605 Fee basis.
(a) Administrative and professional
employees may be paid on a fee basis,
rather than on a salary basis. An employee will be considered to be paid on
a ‘‘fee basis’’ within the meaning of
these regulations if the employee is
paid an agreed sum for a single job regardless of the time required for its
completion. These payments resemble
piecework payments with the important distinction that generally a ‘‘fee’’
is paid for the kind of job that is
unique rather than for a series of jobs
repeated an indefinite number of times
and for which payment on an identical
basis is made over and over again. Payments based on the number of hours or
days worked and not on the accomplishment of a given single task are
not considered payments on a fee basis.
(b) To determine whether the fee payment meets the minimum amount of
salary required for exemption under
these regulations, the amount paid to
the employee will be tested by determining the time worked on the job and
whether the fee payment is at a rate
that would amount to at least the minimum salary per week, as required by
§§ 541.600(a) and 541.602(a), if the employee worked 40 hours. Thus, if the
salary level were $913, an artist paid
$500 for a picture that took 20 hours to
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§ 541.606
29 CFR Ch. V (7–1–19 Edition)
complete meets the minimum salary
requirement for exemption since earnings at this rate would yield the artist
$1000 if 40 hours were worked.
[69 FR 22260, Apr. 23, 2004, as amended at 81
FR 32551, May 23, 2016]
§ 541.606 Board, lodging or other facilities.
(a) To qualify for exemption under
section 13(a)(1) of the Act, an employee
must earn the minimum salary amount
set forth in § 541.600, ‘‘exclusive of
board, lodging or other facilities.’’ The
phrase ‘‘exclusive of board, lodging or
other facilities’’ means ‘‘free and
clear’’ or independent of any claimed
credit for non-cash items of value that
an employer may provide to an employee. Thus, the costs incurred by an
employer to provide an employee with
board, lodging or other facilities may
not count towards the minimum salary
amount required for exemption under
this part 541. Such separate transactions are not prohibited between employers and their exempt employees,
but the costs to employers associated
with such transactions may not be considered when determining if an employee has received the full required
minimum salary payment.
(b) Regulations defining what constitutes ‘‘board, lodging, or other facilities’’ are contained in 29 CFR part
531. As described in 29 CFR 531.32, the
term ‘‘other facilities’’ refers to items
similar to board and lodging, such as
meals furnished at company restaurants or cafeterias or by hospitals,
hotels, or restaurants to their employees; meals, dormitory rooms, and tuition furnished by a college to its student employees; merchandise furnished
at company stores or commissaries, including articles of food, clothing, and
household effects; housing furnished
for dwelling purposes; and transportation furnished to employees for ordinary commuting between their homes
and work.
§ 541.607 Automatic
updates
to
amounts of salary and compensation required.
(a) Standard salary level. The amount
required to be paid to an exempt employee on a salary or fee basis, as applicable,
pursuant
to
§§ 541.100(a)(1),
541.200(a)(1), 541.204(a)(1), 541.300(a)(1),
541.400(b), 541.600(a)–(b), 541.601(b)(1),
541.604(a), and 541.605(b), is:
(1) $913 per week as of December 1,
2016; and
(2) Beginning on January 1, 2020, and
every three years thereafter, updated
to equal the 40th percentile of weekly
earnings of full-time nonhourly workers in the lowest-wage Census Region
in the second quarter of the year preceding the update as published by the
Bureau of Labor Statistics.
(b) American Samoa. The amount required to be paid to an exempt employee employed in American Samoa,
on a salary or fee basis, pursuant to
§§ 541.100(a)(1), 541.200(a)(1), 541.204(a)(1),
541.300(a)(1), 541.400(b), and 541.600(a), is:
(1) $767 per week as of December 1,
2016; and
(2) Beginning on January 1, 2020, and
every three years thereafter:
(i) Updated to correspond to 84 percent of the updated salary set in paragraph (a)(2) of this section; and
(ii) Rounded to the nearest multiple
of $1.00;
(3) Provided that when the highest
industry minimum wage for American
Samoa equals the minimum wage
under 29 U.S.C. 206(a)(1), exempt employees employed in all industries in
American Samoa shall be paid the rate
specified in paragraph (a) of this section.
(c) Motion picture producing industry.
The amount required to be paid to an
exempt motion picture producing employee pursuant to § 541.709 is:
(1) $1,397 per week as of December 1,
2016; and
(2) Beginning on January 1, 2020, and
every three years thereafter:
(i) Updated from the previously applicable base rate, adjusted by the
same percentage as the updated salary
set in paragraph (a)(2) of this section;
and
(ii) Rounded to the nearest multiple
of $1.00.
(d) The amount required in total annual compensation for an exempt highly compensated employee pursuant to
§ 541.601, is:
(1) $134,004 per year as of December 1,
2016; and
(2) Beginning on January 1, 2020, and
every three years thereafter, updated
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Wage and Hour Division, Labor
§ 541.702
to correspond to the annualized earnings amount of the 90th percentile of
full-time nonhourly workers nationally
in the second quarter of the year preceding the update as published by the
Bureau of Labor Statistics.
(e) The Secretary will determine the
lowest-wage Census Region for paragraphs (a) and (b) of this section using
the 40th percentile of weekly earnings
of full-time nonhourly workers in the
Census Regions based on data from the
Current Population Survey as published by the Bureau of Labor Statistics.
(f) The Secretary will use the 90th
percentile of weekly earnings data of
full-time nonhourly workers nationally
based on data from the Current Population Survey as published by the Bureau of Labor Statistics for paragraph
(d) of this section.
(g) Not less than 150 days before the
January 1st effective date of the updated earnings requirements for this
section, the Secretary will publish a
notice in the FEDERAL REGISTER stating the updated amounts for paragraphs (a) through (d) of this section.
(h) The Wage and Hour Division will
publish and maintain on its Web site
the applicable earnings requirements
for employees paid pursuant to this
part.
[81 FR 32551, May 23, 2016]
Subpart H—Definitions and
Miscellaneous Provisions
§ 541.700
Primary duty.
(a) To qualify for exemption under
this part, an employee’s ‘‘primary
duty’’ must be the performance of exempt work. The term ‘‘primary duty’’
means the principal, main, major or
most important duty that the employee performs. Determination of an
employee’s primary duty must be based
on all the facts in a particular case,
with the major emphasis on the character of the employee’s job as a whole.
Factors to consider when determining
the primary duty of an employee include, but are not limited to, the relative importance of the exempt duties
as compared with other types of duties;
the amount of time spent performing
exempt work; the employee’s relative
freedom from direct supervision; and
the relationship between the employee’s salary and the wages paid to other
employees for the kind of nonexempt
work performed by the employee.
(b) The amount of time spent performing exempt work can be a useful
guide in determining whether exempt
work is the primary duty of an employee. Thus, employees who spend
more than 50 percent of their time performing exempt work will generally
satisfy the primary duty requirement.
Time alone, however, is not the sole
test, and nothing in this section requires that exempt employees spend
more than 50 percent of their time performing exempt work. Employees who
do not spend more than 50 percent of
their time performing exempt duties
may nonetheless meet the primary
duty requirement if the other factors
support such a conclusion.
(c) Thus, for example, assistant managers in a retail establishment who
perform exempt executive work such as
supervising and directing the work of
other employees, ordering merchandise, managing the budget and authorizing payment of bills may have management as their primary duty even if
the assistant managers spend more
than 50 percent of the time performing
nonexempt work such as running the
cash register. However, if such assistant managers are closely supervised
and earn little more than the nonexempt employees, the assistant managers generally would not satisfy the
primary duty requirement.
§ 541.701 Customarily and regularly.
The phrase ‘‘customarily and regularly’’ means a frequency that must be
greater than occasional but which, of
course, may be less than constant.
Tasks or work performed ‘‘customarily
and regularly’’ includes work normally
and recurrently performed every workweek; it does not include isolated or
one-time tasks.
§ 541.702 Exempt
and
nonexempt
work.
The term ‘‘exempt work’’ means all
work described in §§ 541.100, 541.101,
541.200, 541.300, 541.301, 541.302, 541.303,
541.304, 541.400 and 541.500, and the activities directly and closely related to
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§ 541.703
29 CFR Ch. V (7–1–19 Edition)
such work. All other work is considered ‘‘nonexempt.’’
§ 541.703 Directly and closely related.
(a) Work that is ‘‘directly and closely
related’’ to the performance of exempt
work is also considered exempt work.
The phrase ‘‘directly and closely related’’ means tasks that are related to
exempt duties and that contribute to
or facilitate performance of exempt
work. Thus, ‘‘directly and closely related’’ work may include physical
tasks and menial tasks that arise out
of exempt duties, and the routine work
without which the exempt employee’s
exempt work cannot be performed
properly. Work ‘‘directly and closely
related’’ to the performance of exempt
duties may also include recordkeeping;
monitoring and adjusting machinery;
taking notes; using the computer to
create documents or presentations;
opening the mail for the purpose of
reading it and making decisions; and
using a photocopier or fax machine.
Work is not ‘‘directly and closely related’’ if the work is remotely related
or completely unrelated to exempt duties.
(b) The following examples further illustrate the type of work that is and is
not normally considered as directly
and closely related to exempt work:
(1) Keeping time, production or sales
records for subordinates is work directly and closely related to an exempt
executive’s function of managing a department and supervising employees.
(2) The distribution of materials,
merchandise or supplies to maintain
control of the flow of and expenditures
for such items is directly and closely
related to the performance of exempt
duties.
(3) A supervisor who spot checks and
examines the work of subordinates to
determine whether they are performing
their duties properly, and whether the
product is satisfactory, is performing
work which is directly and closely related to managerial and supervisory
functions, so long as the checking is
distinguishable from the work ordinarily performed by a nonexempt inspector.
(4) A supervisor who sets up a machine may be engaged in exempt work,
depending upon the nature of the in-
dustry and the operation. In some
cases the setup work, or adjustment of
the machine for a particular job, is
typically performed by the same employees who operate the machine. Such
setup work is part of the production
operation and is not exempt. In other
cases, the setting up of the work is a
highly skilled operation which the ordinary production worker or machine
tender typically does not perform. In
large plants, non-supervisors may perform such work. However, particularly
in small plants, such work may be a
regular duty of the executive and is directly and closely related to the executive’s responsibility for the work performance of subordinates and for the
adequacy of the final product. Under
such circumstances, it is exempt work.
(5) A department manager in a retail
or service establishment who walks
about the sales floor observing the
work of sales personnel under the employee’s supervision to determine the
effectiveness of their sales techniques,
checks on the quality of customer service being given, or observes customer
preferences is performing work which
is directly and closely related to managerial and supervisory functions.
(6) A business consultant may take
extensive notes recording the flow of
work and materials through the office
or plant of the client; after returning
to the office of the employer, the consultant may personally use the computer to type a report and create a proposed table of organization. Standing
alone, or separated from the primary
duty, such note-taking and typing
would be routine in nature. However,
because this work is necessary for analyzing the data and making recommendations, the work is directly
and closely related to exempt work.
While it is possible to assign note-taking and typing to nonexempt employees, and in fact it is frequently the
practice to do so, delegating such routine tasks is not required as a condition of exemption.
(7) A credit manager who makes and
administers the credit policy of the
employer, establishes credit limits for
customers, authorizes the shipment of
orders on credit, and makes decisions
on whether to exceed credit limits
would be performing work exempt
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Wage and Hour Division, Labor
§ 541.706
under § 541.200. Work that is directly
and closely related to these exempt duties may include checking the status of
accounts to determine whether the
credit limit would be exceeded by the
shipment of a new order, removing
credit reports from the files for analysis, and writing letters giving credit
data and experience to other employers
or credit agencies.
(8) A traffic manager in charge of
planning a company’s transportation,
including the most economical and
quickest routes for shipping merchandise to and from the plant, contracting
for common-carrier and other transportation facilities, negotiating with carriers for adjustments for damages to
merchandise, and making the necessary rearrangements resulting from
delays, damages or irregularities in
transit, is performing exempt work. If
the employee also spends part of the
day taking telephone orders for local
deliveries, such order-taking is a routine function and is not directly and
closely related to the exempt work.
(9) An example of work directly and
closely related to exempt professional
duties is a chemist performing menial
tasks such as cleaning a test tube in
the middle of an original experiment,
even though such menial tasks can be
assigned to laboratory assistants.
(10) A teacher performs work directly
and closely related to exempt duties
when, while taking students on a field
trip, the teacher drives a school van or
monitors the students’ behavior in a
restaurant.
§ 541.704 Use of manuals.
The use of manuals, guidelines or
other established procedures containing or relating to highly technical,
scientific, legal, financial or other
similarly complex matters that can be
understood or interpreted only by
those with advanced or specialized
knowledge or skills does not preclude
exemption under section 13(a)(1) of the
Act or the regulations in this part.
Such manuals and procedures provide
guidance in addressing difficult or
novel circumstances and thus use of
such reference material would not affect an employee’s exempt status. The
section 13(a)(1) exemptions are not
available, however, for employees who
simply apply well-established techniques or procedures described in
manuals or other sources within closely prescribed limits to determine the
correct response to an inquiry or set of
circumstances.
§ 541.705 Trainees.
The executive, administrative, professional, outside sales and computer
employee exemptions do not apply to
employees training for employment in
an executive, administrative, professional, outside sales or computer employee capacity who are not actually
performing the duties of an executive,
administrative, professional, outside
sales or computer employee.
§ 541.706 Emergencies.
(a) An exempt employee will not lose
the exemption by performing work of a
normally nonexempt nature because of
the existence of an emergency. Thus,
when emergencies arise that threaten
the safety of employees, a cessation of
operations or serious damage to the
employer’s property, any work performed in an effort to prevent such results is considered exempt work.
(b) An ‘‘emergency’’ does not include
occurrences that are not beyond control or for which the employer can reasonably provide in the normal course of
business. Emergencies generally occur
only rarely, and are events that the
employer cannot reasonably anticipate.
(c) The following examples illustrate
the distinction between emergency
work considered exempt work and routine work that is not exempt work:
(1) A mine superintendent who
pitches in after an explosion and digs
out workers who are trapped in the
mine is still a bona fide executive.
(2) Assisting nonexempt employees
with their work during periods of
heavy workload or to handle rush orders is not exempt work.
(3) Replacing a nonexempt employee
during the first day or partial day of an
illness may be considered exempt
emergency work depending on factors
such as the size of the establishment
and of the executive’s department, the
nature of the industry, the consequences that would flow from the
failure to replace the ailing employee
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§ 541.707
29 CFR Ch. V (7–1–19 Edition)
immediately, and the feasibility of filling the employee’s place promptly.
(4) Regular repair and cleaning of
equipment is not emergency work,
even when necessary to prevent fire or
explosion; however, repairing equipment may be emergency work if the
breakdown of or damage to the equipment was caused by accident or carelessness that the employer could not
reasonably anticipate.
§ 541.707 Occasional tasks.
Occasional, infrequently recurring
tasks that cannot practicably be performed by nonexempt employees, but
are the means for an exempt employee
to properly carry out exempt functions
and responsibilities, are considered exempt work. The following factors
should be considered in determining
whether such work is exempt work:
Whether the same work is performed
by any of the exempt employee’s subordinates; practicability of delegating
the work to a nonexempt employee;
whether the exempt employee performs
the task frequently or occasionally;
and existence of an industry practice
for the exempt employee to perform
the task.
§ 541.708 Combination exemptions.
Employees who perform a combination of exempt duties as set forth in
the regulations in this part for executive, administrative, professional, outside sales and computer employees
may qualify for exemption. Thus, for
example, an employee whose primary
duty involves a combination of exempt
administrative and exempt executive
work may qualify for exemption. In
other words, work that is exempt under
one section of this part will not defeat
the exemption under any other section.
§ 541.709 Motion picture producing industry.
The requirement that the employee
be paid ‘‘on a salary basis’’ does not
apply to an employee in the motion
picture producing industry who is compensated, as of December 1, 2016, at a
base rate of at least $1,397 per week (exclusive of board, lodging, or other facilities); and beginning on January 1,
2020, and every three years thereafter,
is compensated at a base rate of at
least the previously applicable base
rate adjusted by the same ratio as the
preceding standard salary level is increased (exclusive of board, lodging, or
other facilities). Thus, an employee in
this industry who is otherwise exempt
under subparts B, C, or D of this part,
and who is employed at a base rate of
at least the applicable current minimum amount a week is exempt if paid
a proportionate amount (based on a
week of not more than 6 days) for any
week in which the employee does not
work a full workweek for any reason.
Moreover, an otherwise exempt employee in this industry qualifies for exemption if the employee is employed at
a daily rate under the following circumstances:
(a) The employee is in a job category
for which a weekly base rate is not provided and the daily base rate would
yield at least the minimum weekly
amount if 6 days were worked; or
(b) The employee is in a job category
having the minimum weekly base rate
and the daily base rate is at least onesixth of such weekly base rate.
[81 FR 32552, May 23, 2016]
§ 541.710
cies.
Employees of public agen-
(a) An employee of a public agency
who otherwise meets the salary basis
requirements of § 541.602 shall not be
disqualified from exemption under
§§ 541.100, 541.200, 541.300 or 541.400 on
the basis that such employee is paid
according to a pay system established
by statute, ordinance or regulation, or
by a policy or practice established pursuant to principles of public accountability, under which the employee accrues personal leave and sick leave and
which requires the public agency employee’s pay to be reduced or such employee to be placed on leave without
pay for absences for personal reasons
or because of illness or injury of less
than one work-day when accrued leave
is not used by an employee because:
(1) Permission for its use has not
been sought or has been sought and denied;
(2) Accrued leave has been exhausted;
or
(3) The employee chooses to use leave
without pay.
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Wage and Hour Division, Labor
§ 547.1
(b) Deductions from the pay of an
employee of a public agency for absences due to a budget-required furlough shall not disqualify the employee
from being paid on a salary basis except in the workweek in which the furlough occurs and for which the employee’s pay is accordingly reduced.
PART 547—REQUIREMENTS OF A
‘‘BONA FIDE THRIFT OR SAVINGS
PLAN’’
Sec.
547.0 Scope and effect of part.
547.1 Essential requirements for qualifications.
547.2 Disqualifying provisions.
AUTHORITY: Sec. 7, 52 Stat. 1063, as amended; 29 U.S.C. 207.
SOURCE: 19 FR 4864, Aug. 3, 1954, unless otherwise noted.
§ 547.0 Scope and effect of part.
(a) The regulations in this part set
forth the requirements of a ‘‘bona fide
thrift or savings plan’’ under section
7(e)(3)(b) of the Fair Labor Standards
Act of 1938, as amended (hereinafter
called the Act). In determining the
total remuneration for employment
which section 7(e) of the Act requires
to be included in the regular rate at
which an employee is employed, it is
not necessary to include any sums paid
to or on behalf of such employee, in
recognition of services performed by
him during a given period, which are
paid pursuant to a bona fide thrift or
savings plan meeting the requirements
set forth herein. In the formulation of
these regulations due regard has been
given to the factors and standards set
forth in section 7(e)(3)(b) of the Act.
(b) Where a thrift or savings plan is
combined in a single program (whether
in one or more documents) with a plan
or trust for providing profit-sharing
payments to employees, or with a plan
or trust for providing old age, retirement, life, accident or health insurance
or similar benefits for employees, contributions made by the employer pursuant to such thrift or savings plan
may be excluded from the regular rate
if the plan meets the requirements of
the regulation in this part and the contributions made for the other purposes
may be excluded from the regular rate
if they meet the tests set forth in regulations. Part 549, or the tests set forth
in Interpretative Bulletin, part 778 of
this chapter, §§ 778.214 and 778.215, as
the case may be.
§ 547.1 Essential
qualifications.
requirements
(a) A ‘‘bona fide thrift or savings
plan’’ for the purpose of section
7(e)(3)(b) of the Act is required to meet
all the standards set forth in paragraphs (b) through (f) of this section
and must not contain the disqualifying
provisions set forth in § 547.2.
(b) The thrift or savings plan constitutes a definite program or arrangement in writing, adopted by the employer or by contract as a result of collective bargaining and communicated
or made available to the employees,
which is established and maintained, in
good faith, for the purpose of encouraging voluntary thrift or savings by
employees by providing an incentive to
employees to accumulate regularly and
retain cash savings for a reasonable period of time or to save through the regular purchase of public or private securities.
(c) The plan specifically shall set
forth the category or categories of employees participating and the basis of
their eligibility. Eligibility may not be
based on such factors as hours of work,
production, or efficiency of the employees’ Provided, however, That hours
of work may be used to determine eligibility of part-time or casual employees.
(d) The amount any employee may
save under the plan shall be specified
in the plan or determined in accordance with a definite formula specified
in the plan, which formula may be
based on one or more factors such as
the straight-time earnings or total
earnings, base rate of pay, or length of
service of the employee.
(e) The employer’s total contribution
in any year may not exceed 15 percent
of the participating employees’ total
earnings during that year. In addition,
the employer’s total contribution in
any year may not exceed the total
amount saved or invested by the participating employees during that year:
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§ 547.2
29 CFR Ch. V (7–1–19 Edition)
Provided, however, That a plan permitting a greater contribution may be submitted to the Administrator and approved by him as a ‘‘bona fide thrift or
savings plan’’ within the meaning of
section 7(e)(3)(b) of the Act if:
(1) The plan meets all the other
standards of this section;
(2) The plan contains none of the disqualifying
factors
enumerated
in
§ 547.2;
(3) The employer’s contribution is
based to a substantial degree upon retention of savings; and
(4) The amount of the employer’s
contribution bears a reasonable relationship to the amount of savings retained and the period of retention.
(f) The employer’s contributions
shall be apportioned among the individual employees in accordance with a
definite formula or method of calculation specified in the plan, which formula or method of calculation is based
on the amount saved or the length of
time the individual employee retains
his savings or investment in the plan:
Provided, That no employee’s share determined in accordance with the plan
may be diminished because of any
other remuneration received by him.
(Approved by the Office of Management and
Budget under control number 1235–0013)
[19 FR 4864, Aug. 3, 1954, as amended at 47 FR
145, Jan. 5, 1982; 71 FR 16666, Apr. 3, 2006; 82
FR 2228, Jan. 9, 2017]
§ 547.2
Disqualifying provisions.
(a) No employee’s participation in
the plan shall be on other than a voluntary basis.
(b) No employee’s wages or salary
shall be dependent upon or influenced
by the existence of such thrift or savings plan or the employer’s contributions thereto.
(c) The amounts any employee may
save under the plan, or the amounts
paid by the employer under the plan
may not be based upon the employee’s
hours of work, production or efficiency.
PART 548—AUTHORIZATION OF ESTABLISHED BASIC RATES FOR
COMPUTING OVERTIME PAY
Subpart A—General Regulations
Sec.
548.1 Scope and effect of regulations.
548.2 General conditions.
548.3 Authorized basic rates.
548.4 Application for authorization
‘‘basic rate.’’
of
a
Subpart B—Interpretations
INTRODUCTION
548.100
Introductory statement.
REQUIREMENTS FOR A BASIC RATE
548.200
Requirements.
AUTHORIZED BASIC RATES
548.300 Introductory statement.
548.301 Salaried employees.
548.302 Average earnings for period other
than a workweek.
548.303 Average earnings for each type of
work.
548.304 Excluding value of lunches furnished.
548.305 Excluding
certain
additions
to
wages.
548.306 Average earnings for year or quarter
year preceding the current quarter.
RATES AUTHORIZED ON APPLICATION
548.400 Procedures.
548.401 Agreement or understanding.
548.402 Applicable overtime provisions.
548.403 Description of method of calculation.
548.404 Kinds of jobs or employees.
548.405 Representative period.
COMPUTATION OF OVERTIME PAY
548.500 Methods of computation.
548.501 Overtime hours based on nonstatutory standards.
548.502 Other payments.
AUTHORITY: Sec. 7, 52 Stat. 1063, as amended; 29 U.S.C. 207, unless otherwise noted.
Subpart A—General Regulations
SOURCE: 20 FR 5679, Aug. 6, 1955, unless otherwise noted.
§ 548.1
Scope and effect of regulations.
The regulations in this part set forth
the requirements for authorization of
established basic rates to be used in
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Wage and Hour Division, Labor
§ 548.3
the computation of overtime pay in accordance with section 7(g)(3) of the
Fair Labor Standards Act of 1938, as
amended. Payment of overtime compensation in accordance with other
subsections of section 7 of the Act is
explained in part 778 of this title (Interpretative Bulletin on Overtime
Compensation).
§ 548.2 General conditions.
The requirements of section 7 of the
Act with respect to the payment of
overtime compensation to an employee
for a workweek longer than the applicable number of hours established in
section 7(a) of the Act, will be met
under the provisions of section 7(g)(3)
of the Act by payments which satisfy
all the following standards:
(a) Overtime compensation computed
in accordance with this part and section 7(g)(3) of the Act is paid pursuant
to an agreement or understanding arrived at between the employer and the
employee or as a result of collective
bargaining before performance of the
work;
(b) A rate is established by such
agreement or understanding as the
basic rate to be used in computing
overtime compensation thereunder;
(c) The established basic rate is a
specified rate or a rate which can be
derived from the application of a specified method of calculation;
(d) The established basic rate is a
bona fide rate and is not less than the
minimum hourly rate required by applicable law;
(e) The basic rate so established is
authorized by § 548.3 or is authorized by
the Administrator under § 548.4 as being
substantially equivalent to the average
hourly earnings of the employee, exclusive of overtime premiums, in the particular work over a representative period of time;
(f) Overtime hours are compensated
at a rate of not less than one and onehalf times such established basic rate;
(g) The hours for which the employee
is paid not less than one and one-half
times such established basic rate qualify as overtime hours under section 7(e)
(5), (6), or (7) of the Act;
(h) The number of hours for which
the employee is paid not less than one
and one-half times such established
basic rate equals or exceeds the number of hours worked by him in any
workweek in excess of the maximum
workweek applicable to such employees under subsection 7(a) of the Act;
(i) The employee’s average hourly
earnings for the workweek exclusive of
payments described in paragraphs (1)
through (7) of section 7(e) of the Act
are not less than the minimum hourly
rate required by this Act or other applicable law;
(j) Extra overtime compensation is
properly computed and paid on other
forms of additional pay which have not
been considered in arriving at the basic
rate but which are required to be included in computing the regular rate.
[20 FR 5679, Aug. 6, 1955, as amended at 26 FR
7731, Aug. 18, 1961]
§ 548.3 Authorized basic rates.
A rate which meets all of the conditions of § 548.2 and which in addition
satisfies all the conditions set forth in
one of the following paragraphs will be
regarded as being substantially equivalent to the average hourly earnings of
the employee, exclusive of overtime
premiums, in the particular work over
a representative period of time and
may be used in computing overtime
compensation for purposes of section
7(g)(3) of the Act, and § 548.2:
(a) A rate per hour which is obtained
by dividing a monthly or semi-monthly
salary by the number of regular working days in each monthly or semimonthly period and then by the number or hours in the normal or regular
workday. Such a rate may be used to
compute overtime compensation for all
the overtime hours worked by the employee during the monthly or semimonthly period for which the salary is
paid.
(b) A rate per hour which is obtained
by averaging the earnings, exclusive of
payments described in paragraphs (1)
through (7) of section 7(e) of the Act, of
the employee for all work performed
during the workday or any other
longer period not exceeding sixteen
calendar days for which such average is
regularly computed under the agreement or understanding. Such a rate
may be used to compute overtime compensation for all the overtime hours
worked by the employee during the
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§ 548.4
29 CFR Ch. V (7–1–19 Edition)
particular period for which the earnings average is computed.
(c) A rate per hour which is obtained
by averaging the earnings, exclusive of
payments described in paragraphs (1)
through (7) of section 7(e) of the Act, of
the employee for each type of work
performed during each workweek, or
any other longer period not exceeding
sixteen calendar days, for which such
average is regularly computed under
the agreement or understanding. Such
a rate may be used to compute overtime compensation, during the particular period for which such average is
computed, for all the overtime hours
worked by the employee at the type of
work for which the rate is obtained.
(d) The rate or rates which may be
used under the Act to compute overtime compensation of the employee but
excluding the cost of meals where the
employer customarily furnishes not
more than a single meal per day.
(e) The rate or rates (not less than
the rates required by section 6 (a) and
(b) of the Act) which may be used
under the Act to compute overtime
compensation of the employee but excluding additional payments in cash or
in kind which, if included in the computation of overtime under the Act,
would not increase the total compensation of the employee by more than 50
cents a week on the average for all
overtime weeks (in excess of the number of hours applicable under section
7(a) of the Act) in the period for which
such additional payments are made.
(f)(1) A rate per hour for each workweek equal to the average hourly remuneration of the employee for employment during the annual period or
the quarterly period immediately preceding the calendar or fiscal quarter
year in which such workweek ends,
provided: (i) It is a fact, confirmed by
proper records of the employer, that
the
terms,
conditions,
and
circumstances of employment during such
prior period, including weekly hours of
work, work assignments and duties,
and the basis of remuneration for employment, were not significantly different from the terms, conditions, and
circumstances of employment which
affect the employee’s regular rates of
pay during the current quarter year, or
differ only because of some change in
basic salary or similar nonfluctuating
factor for which suitable adjustments
have been made in the calculations to
accurately reflect such change and (ii)
such average hourly remuneration during the prior period is computed by the
method or methods authorized in the
following paragraphs.
(2) The average hourly remuneration
on which the rate authorized in paragraph (f)(1) of this section is based
shall be computed: (i) By totaling all
remuneration for employment during
the workweeks ending in the prior period (including all earnings at hourly
or piece rates, bonuses, commission or
other incentive payments, and other
forms of remuneration paid to or on behalf of the employee) except overtime
premiums and other payments excluded from the regular rate pursuant
to provisions of section 7(e) of the Act,
and (ii) by dividing the amount thus
obtained by the number of hours
worked in such prior period for which
such compensation was paid.
(3) Where it is not practicable for an
employer to compute the total remuneration of an employee for employment in the prior period in time to determine obligations under the Act for
the current quarter year (as where
computation of bonus, commission, or
incentive payments cannot be made
immediately at the end of the period),
a one month grace period may be used.
If this one month grace period is used,
it will be deemed in compliance with
paragraph (f)(1) of this section to use
the basic rate authorized therein for
the quarter commencing one month
after the next preceding four-quarter
or quarter-year period (whichever
length period is adopted as the base period for the rate determination). Once
the grace period method of computation is adopted it must be used for each
successive quarter.
(52 Stat. 1060, as amended; 29 U.S.C. 201)
[20 FR 5679, Aug. 6, 1955, as amended at 28 FR
11266, Oct. 22, 1963; 31 FR 6769, May 6, 1966]
§ 548.4 Application for authorization of
a ‘‘basic rate.’’
(a) Application may be made by any
employer or group of employers, for authorization of a basic rate or rates,
other than those approved under § 548.3.
Application must be made jointly with
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Wage and Hour Division, Labor
§ 548.100
any collective bargaining representative of employees covered by the application. Application must be made to
the Administrator of the Wage and
Hour Division, U.S. Department of
Labor, Washington, DC 20210.
(b) Each application shall contain the
following:
(1) A statement of the agreement or
understanding arrived at between the
employer and employee, including the
proposed effective date, the term of the
agreement or understanding, and a
statement of the applicable overtime
provisions, and
(2) A description of the basic rate of
the method or formula to be used in
computing the basic rate for the type
of work or position to which it will be
applicable, and
(3) A statement of the kinds of jobs
or employees covered by the agreement, and
(4) The facts and reasons relied upon
to show that the basic rate so established is substantially equivalent to
the average hourly earnings of the employee, exclusive of overtime premiums, in the particular work over a
representative period of time. For such
showing, a basic rate shall be deemed
‘‘substantially equivalent’’ to the average hourly earnings of the employee if,
during a representative period, the employee’s total overtime earnings calculated at the basic rate in accordance
with the applicable overtime provisions are substantially equivalent to
the amount of such earnings when
computed in accordance with section
7(a) of the Act on the basis of the employee’s average hourly earnings for
each workweek, and
(5) Such additional information as
the Administrator may require.
(c) The Administrator shall require
that notice of the application be given
to affected employees in such manner
as he deems appropriate. The Administrator shall notify the applicants in
writing of his decision as to each application.
(d) In authorizing a basic rate pursuant to this part, the Administrator
shall include such conditions as are
necessary to insure that the basic rate
will be used only so long as it is substantially equivalent to the average
hourly earnings of the employee, exclu-
sive of overtime premiums, in the particular work over a representative period of time, and such other conditions
as are necessary or appropriate to insure compliance with the provisions of
the Act.
(e) The Administrator may at any
time, upon his own motion or upon
written request of any interested party
setting forth reasonable grounds therefor, and after a hearing or other opportunity to interested persons to present
their views, amend or revoke any authorization granted under this part.
Subpart B—Interpretations
INTRODUCTION
§ 548.100
Introductory statement.
(a) This subpart contains material
explaining and illustrating the terms
used in subpart A of this part which
were issued under section 7(g)(3) of the
Fair Labor Standards Act. The purpose
of section 7(g)(3) of the Act, and subpart A of this part, is to provide an exception from the requirements of computing overtime pay at the regular
rate, 1 and to allow, under specific conditions, the use of an established
‘‘basic’’ rate 2 instead. Basic rates are
alternatives to the regular rate of pay
1 The regular rate is the average hourly
earnings of an employee for a workweek. See
§§ 778.107 to 778.122 of this chapter on overtime compensation. Sections 7(g)(1) and
7(g)(2) of the Act permit overtime compensation to be computed, under specified conditions, at time and one-half the bona fide
hourly or piece rate applicable to the work
performed during the overtime hours. See
§§ 778.415 to 778.421 of this chapter.
2 The term ‘‘basic’’ rate as used in this part
means the rate authorized under section
7(g)(3) of the Fair Labor Standards Act. Such
a rate may be used to compute overtime
compensation under the Walsh-Healey Public Contracts Act. (See Rulings and Interpretations No. 3. section 42(e)(1)). However, the
term ‘‘basic’’ rate in this part should not be
confused with the more general use of the
term in the Public Contracts Act to describe
all rates which may be used to compute overtime compensation or the use of the term in
any other statute.
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§ 548.200
29 CFR Ch. V (7–1–19 Edition)
under section 7(a), and their use is optional. The use of basic rates is principally intended to simplify bookkeeping and computation of overtime
pay.
(b) Section 7(g) of the Fair Labor
Standards Act provides that an employer will comply with the overtime
requirements of the Act if:
* * * pursuant to an agreement or understanding arrived at between the employer
and the employee before performance of the
work, the amount paid to the employee for
the number of hours worked by him in such
workweek in excess of the maximum workweek applicable to such employee under such
subsection [7](a):
*
*
*
*
*
(3) is computed at a rate not less than one
and one-half times the rate established by
such agreement or understanding as the
basic rate to be used in computing overtime
compensation thereunder: Provided, That the
rate so established shall be authorized by
regulation by the Secretary of Labor as
being substantially equivalent to the average hourly earnings of the employee, exclusive of overtime premiums, in the particular
work over a representative period of time;
and if (i) the employee’s average hourly
earnings for the workweek exclusive of payments described in paragraphs (1) through (7)
of subsection (e) are not less than the minimum hourly rate required by applicable
law, and (ii) extra overtime compensation is
properly computed and paid on other forms
of additional pay required to be included in
computing the regular rate.
[20 FR 5680, Aug. 6, 1955, as amended at 26 FR
7731, Aug. 18, 1961]
REQUIREMENTS FOR A BASIC RATE
§ 548.200 Requirements.
The following conditions must be satisfied if a ‘‘basic’’ rate is to be considered proper under section 7(g)(3) and
subpart A of this part.
(a) Agreement or understanding. There
must be an agreement or understanding establishing a basic rate or
rates. This agreement must be arrived
at before performance of the work to
which it is intended to apply. It may be
arrived at directly with the employee
or through his representative. The
‘‘basic’’ rate method of computing
overtime may be used for as many of
the employees in an establishment as
the employer chooses, provided he has
reached an agreement or understanding
with these employees prior to the performance of the work. 3
(b) The rate. The established basic
rate may be a specified rate or a rate
which can be derived from the application of a specified method of calculation. For instance, under certain conditions the Regulations permit the use of
the daily average hourly earnings of
the employee as a basis for computing
daily overtime. 4 Thus, a method rather
than a specific rate is authorized. Also,
under certain conditions, the cost of a
single meal a day furnished to employees may be excluded from the computation of overtime pay. 5 It is the exclusion of the cost of the meals that is authorized and each employee’s rate of
pay, whatever it may be—an hourly
rate, a piece rate or a salary—is his
basic rate.
(c) Minimum wage. The employee’s average hourly earnings for the workweek (exclusive of overtime pay and
other pay which may be excluded from
the regular rate) 6 and the established
basic rate used to compute overtime
pay may not be less than the legal minimum. 7
[20 FR 5680, Aug. 6, 1955, as amended at 21 FR
338, Jan. 18, 1956]
AUTHORIZED BASIC RATES
§ 548.300
Introductory statement.
Section 548.3 contains a description
of a number of basic rates any one of
which, when established by agreement
or understanding, is authorized for use
without prior specific approval of the
Administrator. These basic rates have
been found in use in industry and the
Administrator has determined that
they are substantially equivalent to
3 The records which an employer is required to maintain and preserve for an employee compensated for overtime hours on
the basis of a basic rate are described in
§§ 516.5(b)(5) and 516.21 of this subchapter.
4 See § 548.302.
5 See § 548.304.
6 See §§ 778.200 through 778.225 of this chapter for further discussion of what payments
may be excluded.
7 The legal minimum is the highest rate required by the Fair Labor Standards Act or
other Federal, State or local law.
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Wage and Hour Division, Labor
§ 548.301
the straight-time average hourly earnings of the employee over a representative period of time. The authorized
basic rates are described below.
[20 FR 5681, Aug. 6, 1955]
§ 548.301
Salaried employees.
(a) Section 548.3(a) authorizes as an
established basic rate: ‘‘A rate per hour
which is obtained by dividing a monthly or semi-monthly salary by the number of regular working days in each
monthly or semi-monthly period and
then by the number of hours in the normal or regular workday. Such a rate
may be used to compute overtime compensation for all the overtime hours
worked by the employee during the
monthly or semi-monthly period for
which the salary is paid.’’
(b) Section 548.3(a) may be applied to
salaried employees paid on a monthly
or semi-monthly basis. Under section
7(a) of the Act the method of computing the regular rate of pay for an
employee who is paid on a monthly or
semi-monthly salary basis is to reduce
the salary to its weekly equivalent by
multiplying the monthly salary by 12
(the number of months) or the semimonthly salary by 24, and dividing by
52 (the number of weeks). The weekly
equivalent is then divided by the number of hours in the week which the salary is intended to compensate. 8 Section 548.3(a) is designed to provide an
alternative method of computing the
rate for overtime purposes in the case
of an employee who is compensated on
a monthly or semi-monthly salary
basis, where this method is found more
desirable. This method is applicable
only where the salary is paid for a
specified number of days per week and
a specified number of hours per day
normally or regularly worked by the
employee. It permits the employer to
take into account the variations in the
number of regular working days in
each pay period. The basic rate authorized by § 548.3(a) is obtained by dividing
the monthly or semi-monthly salary by
the number of regular working days in
the month or half-month, and then by
the number of hours of the normal or
regular work day.
8 See
Example. An employee is compensated at a
semi-monthly salary of $154 for a workweek
of 5 days of 8 hours each, Monday through
Friday. If a particular half-month begins on
Tuesday and ends on the second Tuesday following, there are 11 working days in that
half-month. The employee’s basic rate would
then be computed by dividing the $154 salary
by 11 working days of 8 hours each, or 88
hours. The basic rate in this situation would
therefore be $1.75 an hour. The basic rate
would remain the same regardless of the fact
that the employee did not actually work 11
days of 8 hours each because of the occurrence of a holiday, or because the employee
took a day off, or because he worked longer
than 8 hours on some days during the period,
or because he worked fewer than 8 hours on
some days, or because he worked more then
11 days. In any of these circumstances the
employee’s basic rate would still be $1.75 an
hour. If in the next semimonthly period
there are 10 working days the rate would be
computed by dividing the salary of $154 by 80
working hours, or 10 days of 8 hours each.
The basic rate would therefore be $1.925 an
hour. The rate would remain $1.925 an hour
even though the employee did not in fact
work ten 8-hour days during the period for
the reasons indicated above, or for any other
reason.
(c) The overtime compensation for
each workweek should be computed at
not less than time and one-half the established basic rate applicable in the
period during which the overtime is
worked. Thus, in the example given
above all overtime worked in the first
half-month would be computed at not
less than time and one-half the basic
rate of $1.75 an hour; in the second
half-month overtime would be paid for
at not less than time and one-half the
rate of $1.925 an hour. Where a workweek overlaps two semimonthly periods part of the overtime may be performed in one semimonthly period and
part in another semimonthly period
with a different basic rate. If it is desired to avoid computing overtime
compensation in the same workweek at
two different rates, the employment
arrangement may provide that overtime compensation for each workweek
should be computed at the established
basic rate applicable in the halfmonthly or monthly period during
which the workweek ends.
(Sec. 1, 52 Stat. 1060, as amended, 29 U.S.C.
201, et seq.)
[20 FR 5681, Aug. 6, 1955, as amended at 32 FR
3293, Feb. 25, 1967]
§ 778.113 of this chapter.
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§ 548.302
29 CFR Ch. V (7–1–19 Edition)
§ 548.302 Average earnings for period
other than a workweek.
(a) Section 548.3(b) authorizes as an
established basic rate: ‘‘A rate per hour
which is obtained by averaging the
earnings, exclusive of payments described in paragraphs (1) through (7) of
section 7(e) of the act, of the employee
for all work performed during the
workday or any other longer period not
exceeding sixteen calendar days for
which such average is regularly computed under the agreement or understanding. Such a rate may be used to
compute overtime compensation for all
the overtime hours worked by the employee during the particular period for
which the earnings average is computed.’’
(b)(1) The ordinary method of computing overtime under the act is at the
employee’s regular rate of pay, obtained by averaging his hourly earnings for each workweek. Section
548.3(b) authorizes overtime to be computed on the basis of the employee’s
average hourly earnings for a period
longer or shorter than a workweek. It
permits the payment of overtime compensation on the basis of average hourly earnings for a day, a week, two
weeks or any period up to 16 calendar
days, if the period is established and
agreed to with the employee prior to
the performance of the work. 9 The
agreement or understanding may contemplate that the basic rate will be the
average hourly earnings for a day or a
specified number of days within the
sixteen day limit, or it may provide
that the basic rate will be the average
hourly earnings for the period required
to complete a specified job or jobs.
Example 1. An employee is employed on a
piece-work basis with overtime after 8 hours
a day and on Saturday. Ordinarily his overtime compensation would be computed by
averaging his earnings for the entire workweek to arrive at the regular rate of pay and
then computing the overtime compensation
due. Under this subsection of the regulations
the employer and the employee may agree to
compute overtime on the basis of the average hourly earnings for each day. Similarly,
in a situation involving a bi-weekly or a
semi-monthly pay period the employer may
9 Averaging over periods in excess of 16 calendar days may in appropriate cases be authorized by the Administrator under § 548.4.
find it convenient to compute overtime on
the basis of the average hourly earnings for
the bi-weekly or semi-monthly period. 10
Example 2. An employee, who normally
would come within the forty hour provision
of section 7(a) of the Act, is paid a fixed
amount of money for the completion of each
job. Each job takes 2 or 3 days to complete.
Under the employment agreement, the employee is entitled to time and one-half an authorized basic rate for all hours worked in
excess of forty in the workweek. The authorized basic rate is the employee’s average
hourly earnings for each job. Suppose he
completes two jobs in a particular workweek
and all his overtime hours are on job No. 2.
The employee’s average hourly earnings on
job No. 2 may be used to compute his overtime pay.
(2) In this connection it should be
noted that although the basic rate is
obtained by averaging earnings over a
period other than a workweek the
number of overtime hours under the
act must be determined on a workweek
basis.
(c) In computing the basic rate under
§ 548.3(b), the employer may exclude
from the computation the payments
which he could exclude in computing
the ‘‘regular’’ rate of pay. 11
[20 FR 5681, Aug. 6, 1955, as amended at 26 FR
7731, Aug. 18, 1961]
§ 548.303 Average earnings for each
type of work.
(a) Section 548.3(c) authorizes as an
established basic rate: ‘‘A rate per hour
which is obtained by averaging the
earnings, exclusive of payments described in paragraphs (1) through (7) of
section 7(e) of the act, of the employee
for each type of work performed during
each workweek, or any other longer period not exceeding sixteen calendar
days, for which such average is regularly computed under the agreement or
understanding. Such a rate may be
used to compute overtime compensation, during the particular period for
which such average is computed, for all
the overtime hours worked by the employee at the type of work for which
the rate is obtained.’’
10 See § 548.301 (c) for a discussion of the
method of computing overtime for an employee paid on a semi-monthly basis.
11 See §§ 778.200 through 778.225 of this chapter for an explanation of what payments may
be excluded.
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Wage and Hour Division, Labor
§ 548.305
(b) Section 548.3(c) differs from
§ 548.3(b) in this way: Section 548.3(b)
provides for the computation of the
basic rate on the average of all earnings during the specified period;
§ 548.3(c) permits the basic rate to be
computed on the basis of the earnings
for each particular type of work. Thus,
if the employee performs different
types of work, each involving a different rate of pay such as different
piece-rate, job rates, or a combination
of these with hourly rates, a separate
basic rate may be computed for each
type of work and overtime computed
on the basis of the rate or rates applicable to the type of work performed
during the overtime hours.
Example. An employee who is paid on a
weekly basis with overtime after 40 hours
works six 8-hour days in a workweek under
an agreement or understanding reached pursuant to this subsection. He performs three
different types of piecework, each at a different rate of pay. The basic rates to be used
for computing overtime in this situation
would be arrived at by dividing the earnings
for each type of work by the number of hours
during which that type of work was performed. There would thus be three different
basic rates, one for each type of work. Since
the overtime hours used in this illustration
occur on the sixth day, the types of work
performed on the sixth day would determine
the basic rate or rates on which overtime
would be computed that week. Thus, if the
average hourly earnings for the three types
of work are respectively $1.70 an hour in type
A, $1.80 an hour in type B, and $2 an hour in
type C, and on the sixth day the employee
works on type B, his overtime premium for
the sixth day would be one-half the basic
rate of $1.80 an hour, multiplied by the 8
hours worked on that day.
(Sec. 1, 52 Stat. 1060, as amended, 29 U.S.C.
201, et seq.)
[20 FR 5681, Aug. 6, 1955, as amended at 32 FR
3293, Feb. 25, 1967]
§ 548.304 Excluding value of lunches
furnished.
(a) Section 548.3(d) authorizes as established basic rates:
The rate or rates which may be used under
the Act to compute overtime compensation
of the employee but excluding the cost of
meals where the employer customarily furnishes not more than a single meal per day.
computation of overtime the cost of a
free daily lunch or other single daily
meal furnished to the employees. The
policy behind § 548.3(d) is derived from
the Administrator’s experience that
the amount of additional overtime
compensation involved in such cases is
trivial and does not justify the bookkeeping required in computing it. Section 548.3(d) is applicable only in cases
where the employer customarily furnishes no more than a single meal a
day. If more than one meal a day is
customarily furnished by the employer
all such meals must be taken into account in computing the regular rate of
pay and the overtime compensation
due. 12 In a situation where the employer furnishes three meals a day to
his employees he may not, under
§ 548.3(d), omit one of the three meals
in computing overtime compensation.
However, if an employer furnishes a
free lunch every day and, in addition,
occasionally pays ‘‘supper money’’ 13
when the employees work overtime,
the cost of the lunches and the supper
money may both be excluded from the
overtime rates.
[20 FR 5682, Aug. 6, 1955, as amended at 21 FR
338, Jan. 18, 1956]
§ 548.305 Excluding certain additions
to wages.
(a) Section 548.3(e) authorizes as established basic rates: ‘‘The rate or
rates (not less than the rates required
by section 6 (a) and (b) of the Act)
which may be used under the Act to
compute overtime compensation of the
employee but excluding additional payments in cash or in kind which, if included in the computation of overtime
under the Act, would not increase the
total compensation of the employee by
more than 50 cents a week on the average for all overtime weeks (in excess of
the number of hours applicable under
section 7(a) of the Act) in the period for
which such additional payments are
made.’’
(b) Section 548.3(e) permits the employer, upon agreement or understanding with the employee, to omit
from the computation of overtime certain incidental payments which have a
(b) It is the purpose of § 548.3(d) to
permit the employer upon agreement
with his employees to omit from the
12 See
13 See
§ 531.37 of this chapter.
§ 778.217(b)(4) of this chapter.
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§ 548.305
29 CFR Ch. V (7–1–19 Edition)
trivial effect on the overtime compensation due. Examples of payments
which may be excluded are: modest
housing, bonuses or prizes of various
sorts, tuition paid by the employer for
the employee’s attendance at a school,
and cash payments or merchandise
awards for soliciting or obtaining new
business. It may also include such
things as payment by the employer of
the employee’s social security tax.
(c) The exclusion of one or more additional payments under § 548.3(e) must
not affect the overtime compensation
of the employee by more than 50 cents
a week on the average for the overtime
weeks.
Example. An employee, who normally
would come within the 40-hour provision of
section 7(a) of the Act, is paid a cost-of-living bonus of $260 each calendar quarter, or
$20 per week. The employee works overtime
in only 2 weeks in the 13-week period, and in
each of these overtime weeks he works 50
hours. He is therefore entitled to $2 as overtime compensation on the bonus for each
week in which overtime was worked (i.e., $20
bonus divided by 50 hours equals 40 cents an
hour; 10 overtime hours, times one-half,
times 40 cents an hour, equals $2 per week).
Since the overtime on the bonus is more
than 50 cents on the average for the 2 overtime weeks, this cost-of-living bonus would
not be excluded from the overtime computation under § 548.3(e).
(d) It is not always necessary to
make elaborate computations to determine whether the effect of the exclusion of a bonus or other incidental payment on the employee’s total compensation will exceed 50 cents a week
on the average. Frequently the addition to regular wages is so small or the
number of overtime hours is so limited
that under any conceivable circumstances exclusion of the additional
payments from the rate used to compute the employee’s overtime compensation would not affect the employee’s total earnings by more than 50
cents a week. The determination that
this is so may be made by inspection of
the payroll records or knowledge of the
normal working hours.
Example. An employer has a policy of giving employees who have a perfect attendance
record during a 4-week period a bonus of $10.
The employee never works more than 50
hours a week. It is obvious that exclusion of
this attendance bonus from the rate of pay
used to compute overtime compensation
could not affect the employee’s total earnings by more than 50 cents a week. 14
(e) There are many situations in
which the employer and employee cannot predict with any degree of certainty the amount of bonus to be paid
at the end of the bonus period. They
may not be able to anticipate with any
degree of certainty the number of
hours an employee might work each
week during the bonus period. In such
situations the employer and employee
may agree prior to the performance of
the work that a bonus will be disregarded in the computation of overtime pay if the employee’s total earnings are not affected by more than 50
cents a week on the average for all
overtime weeks during the bonus period. If it turns out at the end of the
bonus period that the effect on the employee’s total compensation would not
exceed 50 cents a week on the average,
then additional overtime compensation
must be paid on the bonus. (See
§ 778.209 of this chapter, for an explanation of how to compute overtime on
the bonus.)
(f) In order to determine whether the
exclusion of a bonus or other incidental
payment would affect the total compensation of the employee by not more
than 50 cents a week on the average, a
comparison is made between his total
compensation computed under the employment agreement and his total compensation computed in accordance with
the applicable overtime provisions of
the Act.
Example. An employee, who normally
would come within the 40-hour provision of
section 7(a) of the Act, is paid at piece rates
and at one and one-half times the applicable
piece rates for work performed during hours
in excess of 40 in the workweek. The employee is also paid a bonus, which when apportioned over the bonus period, amounts to
$2 a week. He never works more than 50
hours a week. The piece rates could be established as basic rates under the employment
agreement and no additional overtime compensation paid on the bonus. The employee’s
total compensation computed in accordance
with the applicable overtime provision of the
14 For a 50-hour week, an employee’s bonus
would have to amount to $5 a week to affect
his overtime compensation by 50 cents.
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Wage and Hour Division, Labor
§ 548.306
Act, section 7(g)(1) 15 would be affected by
not more than 20 cents in any week by not
paying overtime compensation on the
bonus. 16
(g) Section 548.3(e) is not applicable
to employees employed at subminimum wage rates under learner certificates, or special certificates for handicapped workers, or in the case of employees in Puerto Rico or the Virgin Islands employed at special minimum
rates authorized by wage orders issued
pursuant to the Act.
[31 FR 6769, May 6, 1966]
§ 548.306 Average earnings for year or
quarter year preceding the current
quarter.
(a) Section 548.3(f)(1) authorizes as an
established basic rate:
A rate per hour for each workweek equal
to the average hourly remuneration of the
employee for employment during the annual
period or the quarterly period immediately
preceding the calendar or fiscal quarter year
in which such workweek ends, provided (i) it
is a fact, confirmed by proper records of the
employer, that the terms, conditions, and
circumstances of employment during such
prior period, including weekly hours of work,
work assignments and duties, and the basis
of remuneration for employment, were not
significantly different from the terms, conditions, and circumstances of employment
which affect the employee’s regular rates of
pay during the current quarter year, and (ii)
such average hourly remuneration during
the prior period is computed by the method
or methods authorized in the following subparagraphs.
(b) There may be circumstances in
which it would be impossible or highly
impracticable for an employer at the
end of a pay period to compute, allocate, and pay to an employee certain
kinds of remuneration for employment
during that pay period. This may be
true in the case of such types of compensation as commissions, recurring
bonuses, and other incentive payments
15 Section 7(g)(1) of the Act provides that
overtime compensation may be paid at one
and one-half times the applicable piece rate
but extra overtime compensation must be
properly computed and paid on additional
pay required to be included in computing the
regular rate.
16 Bonus of $2 divided by fifty hours equals
4 cents an hour. Half of this hourly rate multiplied by ten overtime hours equals 20 cents.
which are calculated on work performance over a substantial period of time.
Since the total amount of straighttime remuneration is unknown at the
time of payment the full regular rate
cannot be ascertained and overtime
compensation could not be paid immediately except for the provisions of
§ 548.3(f). In many such situations, the
necessity for any subsequent computation and payment of the additional
overtime compensation due on these
types of remuneration can be avoided
and all overtime premium pay due
under the Act, including premium pay
due on such a commission, bonus or incentive payment, can be paid at the
end of the pay period rather than at
some later date, if the parties to the
employment agreement so desire. This
is authorized by § 548.3(f)(1), which provides an alternate method of paying
overtime premium pay by permitting
an employer, under certain conditions,
to use an established basic rate for
computing overtime premium pay at
the end of each pay period rather than
waiting until some later date when the
exact amounts of the commission,
bonus, or other incentive payment can
be ascertained. Such established rate
may also be used in other appropriate
situations where the parties desire to
avoid the necessity of recomputing the
regular rate from week to week.
(c)(1)
The
rate
authorized
by
§§ 548.3(f)(1) is an average hourly rate
based on earnings and hours worked
during the workweeks ending in a representative period consisting of either
the four quarter-years or the last quarter-year immediately preceding the
calendar or fiscal quarter-year in
which the established rate is to be
used. Such a rate may be used only if
it is a fact, confirmed by proper records
of the employer, that the terms, conditions, and circumstances of employment during this prior period were not
significantly different from those affecting the employee’s regular rates of
pay during the current quarterly period. Significant differences in weekly
hours of work, work assignments and
duties, the basis of remuneration for
employment, or other factors in the
employment which could result in substantial differences in regular rates of
pay as between the two periods will
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§ 548.306
29 CFR Ch. V (7–1–19 Edition)
render the use of an established rate
based on such a prior period inappropriate, and its use is not authorized
under such circumstances.
(2) However, an increase in the basic
salary or other constant factor would
not preclude the use of such a rate provided that accurate adjustments are
made. For instance, assume that during the previous annual period an employee was compensated on the basis of
a weekly salary of $70 plus a commission of 1 percent of sales. If his weekly
salary is raised to $80 for the next annual period (assuming he still receives
his commission of 1 percent of sales)
the annual rate on which the established rate is to be computed must be
adjusted by an increase of $520 ($10 × 52
weeks). For instance, assume the above
employee earned a total of $4,244 and
worked 2,318 hours during the previous
annual period when his salary was $70
per week. Normally his established
basic rate would be computed by dividing 2,318 hours into $4,244, thus arriving
at a rate of $1.83. However, since the
rate must reflect the increase in salary
it must be computed by adding the anticipated increase to the pay received
during the previous annual period
($4,244 + $520 = $4,764). The established
basic rate would then be $2.05.
(d) Establishment of the rate explained in paragraphs (b) and (c) of this
section is authorized under the circumstances there stated, provided it is
computed
in
accordance
with
§ 548.3(f)(2), which prescribes the following method: First, all of the employees’ remuneration for employment
during the workweeks ending in the
representative four-quarter or quarteryear period immediately preceding the
current quarter, except overtime premiums and other payments excluded
from the regular rate under section 7(e)
of the Act, must be totaled. All
straight-time earnings at hourly or
piece rates or in the form of salary,
commissions, bonus or other incentive
payments, and board, lodging, or other
facilities to the extent required under
section 3(m) of the Act and Part 531 of
this chapter, together with all other
forms of remuneration paid to or on behalf of the employee must be included
in the above total. Second, this total
sum must be divided by the total num-
ber of hours worked during all the
workweeks ending in the prior period
for which such remuneration was paid.
The average hourly rate obtained
through this division may be used as
the established rate for computing
overtime compensation in any workweek, in which the employee works in
excess of the applicable maximum
standard number of hours, ending in
the calendar or fiscal quarter-year period following the four-quarter or quarterly period used for determination of
this rate. This is authorized irrespective of any fluctuations of average
straight-time hourly earnings above or
below such rate from workweek to
workweek within the quarter.
(e) As a variant to the method of
computation described in paragraph (d)
of this section, it is provided in
§ 548.3(f)(3), with respect to situations
where it is not practicable for an employer to compute the total remuneration of an employee for employment in
the prior period in time to determine
obligations under the Act for the current quarter year, a one-month grace
period may be used. This method is authorized, for example, in employment
situations where the computation of
bonuses, commissions, or other incentive payments cannot be made immediately at the end of the four-quarter
or quarterly base period. If this one
month grace period is used, it will be
deemed in compliance with § 548.3(f)(1)
to use the basic rate authorized therein
for the quarter commencing one month
after the next preceding four-quarter
or quarter-year period. To illustrate,
suppose an employer and employee
agree that the employee will be paid
for overtime work at one and one-half
times a basic rate computed in accordance with § 548.3(f)(1), but on the pay
day for the first workweek ending in
the current quarter his records do not
show all commissions earned by the
employee in the preceding quarter. The
employer and employee may therefore
elect to use a one month grace period.
This would mean that a basic rate for
the quarter January 1–March 31, for example, which is derived from the prior
four-quarter (January 1–December 31)
or quarterly (October 1–December 31)
period, as the case may be, would be
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Wage and Hour Division, Labor
§ 548.306
applied during a quarterly period commencing one month later (February 1–
April 30) than the period (January 1–
March 31) in which it would otherwise
be applicable. The same adjustment
would be made in succeeding quarters.
Once the grace method of computation
is adopted it must be used for each successive quarter.
(f) The established basic rate must be
designated and substantiated in the
employer’s records as required by part
516 of this chapter, and other requirements of such part with respect to
records must be met. An agreement or
understanding between the parties to
use such rate must be reached prior to
the quarter-year period in which the
work to which it is applied is performed. The agreement or understanding may be limited to a fixed period or may be a continuing one, but
use of the established rate under such
an agreement or understanding is not
authorized for any period in which
terms, conditions, and circumstances
of employment become significantly
different from those obtaining during
the period from which the rate was derived. This method of computation cannot be used if there is any change in
the employee’s position, method of
pay, or amount of salary or if the employee was not employed during the
full period used to determine the rate.
(g) To function properly and to provide, over an extended period, overtime
premium pay substantially equivalent
to the pay the employee would receive
if overtime were paid on the true regular rate, the plan must provide that
overtime be computed on the established basic rate in every overtime
week without regard to the fact that in
some weeks the employee receives
more premium pay than he would using
the true regular rate and in some
weeks less. Plans initiated pursuant to
this section are based on averages and,
if properly applied, will yield substantially the same overtime compensation
in a representative period as the employee would have received if it were
computed on the true regular rate.
(h) The following examples assume
the employee is due overtime premium
pay for hours worked over 40 in the
workweek.
(1) Example. A sales employee whose
applicable maximum hours standard is
40 hours enters into an agreement with
his employer that he will be paid a salary plus a commission based on a certain percentage of sales. He agrees that
this compensation will constitute his
total straight-time earnings for all
hours worked each week, provided such
compensation equals or exceeds the applicable minimum wage.
The employee further agrees that he
is to receive overtime premium pay for
each workweek on the normal pay day
for that week; based each quarter on
one-half his established basic rate derived by taking the hourly average of
the total straight-time remuneration
he received during the workweeks ending in the four-quarter period immediately preceding the current quarter.
For example, his established basic rate
for each workweek ending in the first
quarter of 1964 (January through
March) is determined by computing his
average hourly rate for employment
during all workweeks ending in the
four quarter periods of 1963.
Assume the employee worked the following number of hours and received
the straight-time pay indicated:
Pay
Line
No.
1
2
3
4
Hours worked
Quarters
........
........
........
........
1st—1963 .........
2d—1963 ..........
3d—1963 ..........
4th—1963 .........
$1,074
980
1,069
1,365
..........
$980
1,069
1,365
550
480
542
619
..........
489
542
619
5 ........
6 ........
1, 2, 3, 4—1963
1st—1964 .........
4,488
............
..........
1,168
2,200
..........
..........
531
7 ........
2, 3, 4 (1963) 1
(1964).
............
4,582
..........
2,181
The employee’s basic rate for the first
quarter of 1964 (line 6) is determined by
the hours worked and pay received in
the four previous quarters (lines 1, 2, 3
and 4). Total pay received during that
period ($4,488.00, line 5) is divided by
the total hours worked (2,200 hours,
line 5) to derive the established basic
rate ($2.04 per hour). This is the hourly
rate on which overtime is computed in
each workweek ending in the first
quarter of 1964 in which the employee
worked in excess of the applicable maximum hours standard. For instance, if
in the first week of that quarter the
employee worked 47 hours he would be
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§ 548.400
29 CFR Ch. V (7–1–19 Edition)
due his guaranteed salary, his commission (at a later date) plus $7.14 as overtime premium pay (7 hours × 2.04 × 1/2).
It does not matter that the employee
actually earned and ultimately received $90.71 in salary and commission
as his total straight-time pay for that
week and that his true hourly rate
would be only $1.93 ($90.71 ÷ 47 hours).
The established basic rate is an average rate and is designed to be used, and
must be used, in every overtime week
in the quarter for which it was computed, without regard to the employee’s true hourly rate in the particular
week.
The employee’s basic rate for the second quarter of 1964 will be similarly
computed at the end of the first quarter of that year by adding together the
hours worked and pay received in the
second, third, and fourth quarters of
1963 and the first quarter of 1964 (lines
2, 3, 4 and 6) so that the totals now reflect the figures in line 7. The regular
rate is again computed by dividing pay
received ($4,582.00) by hours worked
(2,181) and the new basic rate would be
$2.10.
(2) Example. Assume that an employee employed under a similar arrangement agrees to receive overtime
premium pay for each workweek on the
normal pay day, based each quarter on
one-half his established basic rate determined by the quarterly method rather than by the annual method previously discussed. His established basic
rate for the first quarter of 1964 would
therefore be determined by computing
his average hourly rate for the last
quarter of 1963. To illustrate, if in the
latter quarter the employee received
$1,156.00 in straight time compensation
and worked 561 hours, his basic rate for
the first quarter of 1964 would therefore
be $2.06 ($1,156.00 ÷ 561 hours). During
the overtime weeks in this quarter
there would be due him, in addition to
his straight time compensation, premium pay of $1.03 ($2.06 × 1/2) for each
hour he works in excess of the applicable maximum hours standard.
As in the previous example the established basic rate must be used in every
overtime week in the quarter for which
it was computed without regard to the
employee’s true hourly rate in the particular quarter.
(Sec. 1, 52 Stat. 1060, 1062, as amended, 29
U.S.C. 201, et seq.)
[28 FR 11266, Oct. 22, 1963, as amended at 32
FR 3293, Feb. 26, 1967]
RATES AUTHORIZED ON APPLICATION
§ 548.400 Procedures.
(a) If an employer wants to use an established basic rate other than one of
those authorized under § 548.3, he must
obtain specific prior approval from the
Administrator. For example, if an employer wishes to compute overtime
compensation for piece workers for
each workweek in a 4-week period at
established basic rates which are the
straight-time average hourly earnings
for each employee for the immediately
preceding 4-week period, he should
apply to the Administrator for authorization. The application for approval of
such a basic rate should be addressed
to the Administrator of the Wage and
Hour Division, U.S. Department of
Labor, Washington, DC 20210. No particular form of application is required
but the minimum necessary information outlined in § 548.4 should be included. The application may be made
by an employer or a group of employers. If any of the employees covered by
the application is represented by a collective bargaining agent, a joint application of the employer and the bargaining agent should be filed. It is not
necessary to file separate applications
for each employee. One application will
cover as many employees as will be
paid at the proposed basic rate or
rates.
(b) Prior approval of the Administrator is also required if the employer
desires to use a basic rate or basic
rates which come within the scope of a
combination of two or more of the
paragraphs in § 548.3 unless the basic
rate or rates sought to be adopted meet
the requirements of a single paragraph
in § 548.3. For instance, an employee
may receive free lunches, the cost of
which, by agreement or understanding,
is not to be included in the rate used to
compute overtime compensation. 17 In
addition, the employee may receive an
17 See
§ 548.304.
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Wage and Hour Division, Labor
§ 548.405
attendance bonus which, by agreement
or understanding, is to be excluded
from the rate used to compute overtime compensation. 18 Since these exclusions involve two paragraphs of
§ 548.3, prior approval of the Administrator would be necessary unless the
exclusion of the cost of the free lunches
together with the attendance bonus do
not affect the employee’s overtime
compensation by more than 50 cents a
week on the average, in which case the
employer and the employee may treat
the situation as one falling within a
single paragraph, § 548.3(e).
(Sec. 1, 52 Stat. 1060, as amended, 29 U.S.C.
201, et seq.)
[20 FR 5682, Aug. 6, 1955, as amended at 21 FR
338, Jan. 18, 1956; 32 FR 3294, Feb. 25, 1967]
§ 548.401 Agreement or understanding.
If the agreement or understanding establishing the basic rate is in writing,
whether incorporated in a collective
bargaining agreement or not, a copy of
the agreement or understanding should
be attached to the application. If it is
not in writing, however, the application to the Administrator for approval
of a basic rate should contain a written
statement describing the substance of
the agreement or understanding, including the proposed effective date and
term of the agreement or understanding. The term of the agreement or
understanding may be of definite duration, or may run indefinitely until
modified or changed. If an agreement
or understanding is modified, a new application for authorization should be
made. 19
[20 FR 5683, Aug. 6, 1955, as amended at 21 FR
338, Jan. 18, 1956]
§ 548.402 Applicable overtime provisions.
The application should also contain a
description of the terms of employment relating to overtime so that the
Administrator can determine how the
established basic rate will be used if it
is approved. For instance, if the employees are to be paid time and one-
half the basic rate for all hours worked
in excess of 35 each workweek, this
should be stated in the application. If
the employees are to be paid double
time for work on Sundays the application should so state.
[20 FR 5683, Aug. 6, 1955]
§ 548.403 Description of method of calculation.
The established basic rate for which
approval will be sought will normally
be a formula or method of calculation
of a rate rather than a specific dollars
and cents rates. 20 The application
should contain a complete description
of the formula or method of calculation of the established basic rate, including any necessary examples which
will enable the Administrator to understand how the rate will be computed
and applied.
[20 FR 5683, Aug. 6, 1955]
§ 548.404 Kinds of jobs or employees.
The application should describe or
otherwise identify the employees to
whom the established basic rate will
apply. The individual employees need
not be identified by name but may be
described in terms of job classification,
department, location or other appropriate identifying characteristics.
[20 FR 5683, Aug. 6, 1955]
§ 548.405 Representative period.
(a) The application must set forth
the facts relied upon to show that the
established basic rate is substantially
equivalent to the average hourly earnings of the employee exclusive of overtime premiums over a representative
period of time. 21 The basic rate will be
considered ‘‘substantially equivalent’’
to the average hourly earnings of the
employee if, during a representative
period, the employee’s total overtime
earnings calculated at the basic rate in
accordance with the applicable overtime provisions are approximately
equal to the employee’s total overtime
earnings computed on his average
20 See
18 See
§ 548.305.
19 See § 548.200 for a further explanation of
the requirements as to the agreement or understanding establishing the basic rate.
§ 548.200.
§§ 778.200 through 778.207 of this chapter for further discussion of overtime premiums which may be excluded from the regular rate of pay.
21 See
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§ 548.500
29 CFR Ch. V (7–1–19 Edition)
hourly earnings for each workweek in
accordance with section 7(a) of the
Act. 22
(b) The length of time constituting a
representative period will depend on
the factors that cause the employee’s
average hourly earnings to vary appreciably from week to week. For instance, if the variation in earnings of
an employee paid on an incentive basis
is due to the difference in availability
of work in the slow and busy seasons
the period used for comparison of overtime earnings would have to include
both a slow and a busy season in order
to be representative. Likewise, if a
piece-worker’s average hourly earnings
vary appreciably from week to week
because of differences in materials or
styles worked on, the period used for
purposes of comparison would have to
include work on the different materials
and styles in order to be representative.
[20 FR 5683, Aug. 6, 1955]
COMPUTATION OF OVERTIME PAY
§ 548.500 Methods of computation.
The methods of computing overtime
pay on the basic rates for piece workers, hourly rated employees, and salaried employees are the same as the
methods of computing overtime pay at
the regular rate.
Example 1. Under an employment agreement the basic rate to be used in computing
overtime compensation for a piece worker
for hours of work in excess of 8 in each day
is the employee’s average hourly earnings
for all work performed during that day. 23
The employee is entitled to one-half the
basic rate for each daily overtime hour in addition to the total piece work earnings for
the day.
Example 2. An employee, who normally
would come within the forty hour provision
of section 7(a) of the Act, has a basic rate
which is his monthly salary divided by the
number of regular hours of work in the
month. 24 If the salary is intended to cover
straight-time compensation for a forty hour
22 See §§ 778.208 through 778.225 of this chapter for further discussion of the exclusion of
vacation pay, holiday pay, discretionary bonuses and other payments from the average
hourly earnings which comprise the employee’s regular rate of pay.
23 See § 548.302.
24 See § 548.301.
week he would be entitled to overtime for
every hour after forty computed on the basis
of one and one-half times the established
basic rate, in addition to his monthly salary.
If the salary is intended to cover a workweek
shorter than forty hours, such as thirty-five
hours, he would be entitled to additional
straight time at the basic rate for the hours
between thirty-five and forty and also to
overtime at one and one-half time that rate
for all hours worked in excess of forty in a
week.
[20 FR 5683, Aug. 6, 1955, as amended at 26 FR
7732, Aug. 18, 1961]
§ 548.501 Overtime hours based on
nonstatutory standards.
Many employees are paid daily overtime pay or Saturday overtime pay or
overtime pay on a basis other than the
statutory standard of overtime pay required by section 7(a) of the Act. In
these cases, the number of hours for
which an employee is paid at least one
and one-half times an established basic
rate must equal or exceed the number
of hours worked in excess of the applicable number of hours established in
section 7(a) of the Act in the workweek. However, only overtime hours
under the employment agreement
which also qualify as overtime hours
under section 7(e) (5), (6), or (7) of the
Act 25 may be offset against the hours
of work in excess of the applicable
number of hours established in section
7(a) of the Act.
[26 FR 7732, Aug. 18, 1961]
§ 548.502 Other payments.
Extra overtime compensation must
be separately computed and paid on
payments such as bonuses or shift differentials which are not included in the
computation of the established basic
rate and which would have been included in the regular rate of pay. 26
Example 1. An employee is paid on an hourly rate basis plus a production bonus, and
also a shift differential of 10 cents for each
hour worked on the second shift. The authorized basic rate under the agreement is the
employee’s daily average hourly earnings,
25 See
§§ 778.201 through 778.207 of this chap-
ter.
26 Unless specifically excluded by agreement or understanding and prior authorization is obtained from the Administrator. See
§ 548.400(b).
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§ 549.1
and under the employment agreement he is
paid one and one-half times the basic rate for
all hours worked in excess of 8 each day.
Suppose his production bonus is included in
the computation of the basic rate, but the
shift differential is not. In addition to overtime compensation computed at the basic
rate the employee must be paid an extra 5
cents for each overtime hour worked on the
second shift.
Example 2. A piece worker, under his employment agreement, is paid overtime compensation for daily overtime and for hours of
work on Saturday based on an authorized
basic rate obtained by averaging his piece
work earnings for the half-month. In addition, he is paid a monthly cost-of-living
bonus which is not included in the computation of the basic rate. It will be necessary for
the employer to compute and pay overtime
compensation separately on the bonus. 27
[20 FR 5683, Aug. 6, 1955]
PART 549—REQUIREMENTS OF A
‘‘BONA FIDE PROFIT-SHARING
PLAN OR TRUST’’
Sec.
549.0 Scope and effect of regulations.
549.1 Essential requirements for qualifications.
549.2 Disqualifying provisions.
549.3 Distinction between plan and trust.
AUTHORITY: Sec. 7, 52 Stat. 1063, as amended; 29 U.S.C. 207.
SOURCE: 18 FR 3292, June 10, 1953, unless
otherwise noted.
§ 549.0 Scope and effect of regulations.
(a) The regulations in this part set
forth the requirements of a ‘‘bona fide
profit-sharing plan or trust’’ under section 7(e)(3)(b) of the Fair Labor Standards Act of 1938, as amended (hereinafter called the Act). In determining
the total remuneration for employment which section 7(e) of the Act requires to be included in the regular
rate at which an employee is employed,
it is not necessary to include any sums
paid to or on behalf of such employee,
in recognition of services performed by
him during a given period, which are
paid pursuant to a bona fide profitsharing plan or trust meeting the requirements set forth herein. In the formulation of these regulations due re27 See § 778.209 of this chapter for an explanation of how to compute overtime on the
bonus.
gard has been given to the factors and
standards set forth in section 7(e)(3)(b)
of the Act.
(b) The inclusion or exclusion from
the regular rate of contributions made
by an employer pursuant to any plan or
trust for providing old age, retirement,
life, accident or health insurance or
similar benefits for employees (regardless of whether the plan or trust is financed out of profits) is governed by
section 7(e)(4) of the Act, the requirements of which are set forth in the Interpretative Bulletin on Overtime
Compensation, part 778, of this chapter,
§§ 778.214 and 778.215. However, where
such a plan or trust is combined in a
single program (whether in one or more
documents) with a plan or trust for
providing profit-sharing payments to
employees, the profit-sharing payments may be excluded from the regular rate if they meet the requirements
of the regulations in this part and the
contributions made by the employer
for providing the benefits described in
section 7(e)(4) of the Act may be excluded from the regular rate if they
meet the tests set forth in the Interpretative Bulletin, part 778, of this
chapter, §§ 778.214 and 778.215.
§ 549.1 Essential
qualifications.
requirements
(a) A bona fide profit-sharing plan or
trust for purposes of section 7(e)(3)(b)
of the Act is required to meet all of the
standards set forth in paragraphs (b)
through (g) of this section and must
not contain any of the disqualifying
provisions set forth in § 549.2.
(b) The profit-sharing plan or trust
constitutes a definite program or arrangement in writing, communicated
or made available to the employees,
which is established and maintained in
good faith for the purpose of distributing to the employees a share of profits as additional remuneration over
and above the wages or salaries paid to
employees which wages or salaries are
not dependent upon or influenced by
the existence of such profit-sharing
plan or trust or the amount of the payments made pursuant thereto.
(c) All contributions or allocations
by the employer to the fund or trust to
be distributed to the employees are:
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29 CFR Ch. V (7–1–19 Edition)
(1) Derived solely from profits of the
employer’s business enterprise, establishment or plant as a whole, or an established branch or division of the
business or enterprise which is recognized as such for general business purposes and for which profits are separately and regularly calculated in accordance with accepted accounting
practice; and
(2) Made periodically, but not more
frequently than is customary or consonant with accepted accounting practice to make periodic determinations
of profit.
(d) Eligibility to share in profits extends:
(1) At least to all employees who are
subject to the minimum wage and overtime provisions of the Act, or to all
such employees in an established part
of the employer’s business as described
in paragraph (c) of this section: Provided, however, That such eligibility
may be determined by factors such as
length of service or minimum schedule
of hours or days of work which are
specified in the plan or trust, and further, that eligibility need not extend to
officers of the employer; or
(2) To such classifications of employees as the employer may designate
with the approval of the Administrator
upon a finding, after notice to interested persons, including employee representatives, and an opportunity to
present their views either orally or in
writing, that it is in accord with the
meaning and intent of the provisions of
section 7(e)(3)(b) of the Act and this
part. The Administrator may give such
notice by requiring the employer to
post a notice approved by the Administrator for a specified period in a place
or places where notices to employees
are customarily posted or at such other
place or places designated by the Administrator, or he may require notice
to be given in such other manner as he
deems appropriate.
(e) The amounts paid to individual
employees are determined in accordance with a definite formula or method
of calculation specified in the plan or
trust. The formula or method of calculation may be based on any one or
more or more of such factors as
straight-time earnings, total earnings,
base rate of pay of the employee,
straight-time hours or total hours
worked by employees, or length of
service, or distribution may be made
on a per capita basis.
(f) An employee’s total share determined in accordance with paragraph (e)
of this section may not be diminished
because of any other remuneration received by him.
(g) Provision is made either for payment to the individual employees of
their respective shares of profits within
a reasonable period after the determination of the amount of profits to be
distributed, or for the irrevocable deposit by the employer of his employees’
distributive shares of profits with a
trustee for deferred distribution to
such employees of their respective
shares after a stated period of time or
upon the occurrence of appropriate
contingencies specified in the plan or
trust: Provided, however, That the right
of an employee to receive his share is
not made dependent upon his continuing in the employ of the employer
after the period for which the determination of profits has been made.
(Approved by the Office of Management and
Budget under control number 1235–0013)
[18 FR 3292, June 10, 1953, as amended at 47
FR 145, Jan. 5, 1982; 71 FR 16666, Apr. 3, 2006;
82 FR 2229, Jan. 9, 2017]
§ 549.2
Disqualifying provisions.
No plan or trust which contains any
one of the following provisions shall be
deemed to meet the requirements of a
bona fide profit-sharing plan or trust
under section 7(e)(3)(b) of the Act:
(a) If the share of any individual employee is determined in substance on
the basis of attendance, quality or
quantity of work, rate of production,
or efficiency;
(b) If the amount to be paid periodically by the employer into the fund or
trust to be distributed to the employees is a fixed sum;
(c) If periodic payments of minimum
amounts to the employees are guaranteed by the employer;
(d) If any individual employee’s
share, by the terms of the plan or
trust, is set at a predetermined fixed
sum or is so limited as to provide in effect for the payment of a fixed sum, or
is limited to or set at a predetermined
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Wage and Hour Division, Labor
§ 550.2
specified rate per hour or other unit of
work or worktime;
(e) If the employer’s contributions or
allocations to the fund or trust to be
distributed to the employees are based
on factors other than profits such as
hours of work, production, efficiency,
sales or savings in cost.
§ 549.3 Distinction between plan and
trust.
As used in this part:
(a) Profit-sharing plan means any such
program or arrangement as qualifies
hereunder which provides for the distribution by the employer to his employees of their respective shares of
profits;
(b) Profit-sharing trust means any
such program or arrangement as qualifies under this part which provides for
the irrevocable deposit by the employer of his employees’ distributive
shares of profits with a trustee for deferred distribution to such employees
of their respective shares.
PART 550—DEFINING AND DELIMITING THE TERM ‘‘TALENT FEES’’
Sec.
550.1 ‘‘Talent fees’’ as used in section
7(e)(3)(c) of the Fair Labor Standards
Act, as amended.
550.2 Definitions.
AUTHORITY: Sec. 7, 52 Stat. 1063, as amended; 29 U.S.C. 207.
§ 550.1 ‘‘Talent fees’’ as used in section
7(e)(3)(c) of the Fair Labor Standards Act, as amended.
The term talent fees in section
7(e)(3)(c) of the Act shall mean extra
payments made to performers, including announcers on radio and television
programs, where the payment is made:
(a) To an employee having regular
duties as a staff performer (including
announcers), as an extra payment for
services as a performer on a particular
commercial program or a particular series of commercial programs (including
commercial spot announcements) or
for special services as a performer on a
particular sustaining program or a particular series of sustaining programs;
(b) In pursuance of an applicable employment agreement or understanding
or an applicable collective bargaining
agreement in a specific amount agreed
upon in advance of the performance of
the services or special services for
which the extra payment is made: Provided, however, That where services described in paragraph (a) of this section
are performed on a program falling
outside of the regular workday or
workweek as established and scheduled
in good faith in accordance with the
provisions of the applicable employment agreement, the Administrator
will not regard the Act as requiring additional compensation as a result of
the time worked on the program if the
parties agree in advance of such program that a special payment made
therefor shall include any increased
statutory compensation attributable to
the additional worktime thereon and if
such special payment, when made, is
actually sufficient in amount to include the statutory straight time and
overtime
compensation
(computed
without regard to talent fees) for the
additional time worked in the workweek resulting from the performer’s
services on such program.
[15 FR 402, Jan. 25, 1950, as amended at 18 FR
5069, Aug. 25, 1953]
§ 550.2 Definitions.
As used in the regulations in this
part:
(a) The term extra payment shall
mean a payment, in a specific amount,
made in addition to the straight-time
and overtime compensation which
would be due the performer under the
agreement applicable to his employment and under the Act if the time
spent in performing the services or special services referred to in paragraph
(a) of § 550.1 had been devoted exclusively to duties as a staff performer;
but shall not include any payment any
part of which is credited or offset
against any remuneration otherwise
payable to the performer under any
contract or statutory provision;
(b) The term performer shall mean a
person who performs a distinctive, personalized service as a part of an actual
broadcast or telecast including an
actor, singer, dancer, musician, comedian, or any person who entertains, affords amusement to, or occupies the interest of a radio or television audience
by acting, singing, dancing, reading,
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29 CFR Ch. V (7–1–19 Edition)
narrating, performing feats of skill, or
announcing, or describing or relating
facts, events and other matters of interest, and who actively participates in
such capacity in the actual presentation of a radio or television program.
It shall not include such persons as
script writers, stand-ins, or directors
who are neither seen nor heard by the
radio or television audience; nor shall
it include persons who participate in
the broadcast or telecast purely as
technicians such as engineers, electricians and stage hands;
(c) The term special services shall
mean services beyond the scope of a
performer’s regular or ordinary duties
as a staff performer under the agreement applicable to the employment.
Under this provision, an employee employed and compensated as described in
the quoted paragraph (11) may be employed without payment of overtime
compensation for a workweek longer
than the maximum workweek applicable to him under section 7(a) of the
Act, but only if it is established by a
finding of the Secretary that the employee is compensated for his employment as a driver or driver’s helper
making local deliveries on the basis of
trip rates or other delivery payment
plan that has the general purpose and
effect stated in section 13(b)(11). Such a
finding is prescribed by the statute as
one of the ‘‘explicit prerequisites to exemption’’. (See Arnold v. Kanowsky, 361
U.S. 388, 392.)
[15 FR 402, Jan. 25, 1950]
§ 551.2 Findings authorized by this
part.
(a) The Administrator, pursuant to
the authority vested in him by the Secretary of Labor, will make and apply
findings under section 13(b)(11) of the
Act as provided in this part. Such findings shall be made only upon petitions
meeting the requirements of this part,
and only as authorized in this section.
(b) For the purpose of establishing
whether a wage payment plan has the
purpose and effect required by section
13(b)(11) for an exemption from the
overtime provisions of the Act, the Administrator shall have authority, upon
a proper showing and in accordance
with the provisions of this part, to
make a finding as to the general purpose and effect of any specific plan of
compensation on the basis of trip rates
or other delivery payment plan, with
respect to the reduction of the length
of the workweeks worked by the employees of any specific employer who
are compensated in accordance with
such plan for their employment by
such employer as drivers or drivers’
helpers making local deliveries.
(c) Any finding made as to the purpose and effect of such a wage payment
plan pursuant to a petition therefor
will be based upon a consideration of
all relevant facts shown or represented
to exist with respect to such plan that
are made available to the Administrator. A finding that such plan has the
general effect of reducing the hours
worked by drivers or drivers’ helpers
PART 551—LOCAL DELIVERY DRIVERS AND HELPERS; WAGE PAYMENT PLANS
Sec.
551.1 Statutory provision.
551.2 Findings authorized by this part.
551.3 Petition for a finding.
551.4 Requirements for a petition.
551.5 Information to be submitted.
551.6 Action on petition.
551.7 Finding.
551.8 Definitions.
551.9 Recordkeeping requirements.
AUTHORITY: Sec. 9, 75 Stat. 74; 29 U.S.C.
213(b).
SOURCE: 30 FR 8585, July 7, 1965, unless otherwise noted.
§ 551.1 Statutory provision.
The following provision for exemption from the overtime pay provision is
contained in section 13(b) of the Fair
Labor Standards Act of 1938, as amended (29 U.S.C. 213(b)):
(b) The provisions of section 7 shall not
apply with respect to:
*
*
*
*
*
(11) any employee employed as a driver or
driver’s helper making local deliveries, who
is compensated for such employment on the
basis of trip rates, or other delivery payment
plan, if the Secretary shall find that such
plan has the general purpose and effect of reducing hours worked by such employees to,
or below, the maximum workweek applicable
to them under section 7(a).
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Wage and Hour Division, Labor
§ 551.5
compensated thereunder to, or below,
the maximum workweek applicable to
them under section 7(a) of the Act is
not authorized under this part unless
the Administrator finds that during
the most recently completed representative period of one year (based on the
experience of the employer in question,
or if such employer has not previously
used such plan, on the experience of another employer using such plan under
substantially the same conditions, all
as defined in § 551.8(g)(1)), the average
weekly hours, taken in the aggregate,
of all full-time employees covered by
the plan are not in excess of the maximum workweek applicable to such employees under section 7(a), or unless
the Administrator makes an interim
finding with respect to such plan that,
notwithstanding a lack of experience
under it for a representative period of 1
year, its provisions and manner of operation, together with the other available information concerning the plan,
indicate clearly that by the end of such
first representative year the effect of
the plan will have been to reduce the
average weekly hours worked by the
employees covered by the plan in such
first year of operation to, or below,
such maximum applicable workweek.
§ 551.3 Petition for a finding.
Any employer desiring to establish
an exemption from the overtime pay
requirements of the Act with respect to
employees whose employment and
compensation may be considered to
qualify therefor under section 13(b)(11)
may petition the Administrator, in
writing, for a finding under such section and this part. If the wage payment
plan with respect to which the finding
is sought has been the subject of collective bargaining with representatives of
employees covered by the plan, the employer shall provide timely notice of
such petition, in writing, to the authorized representatives or representatives of such employees and shall submit a copy of such notice to the Administrator.
§ 551.4 Requirements for petition.
A petition for a finding under section
13(b)(11) of the Act and this part shall
include in such detail as the Administrator may deem necessary for evalua-
tion under the standards provided by
the statute and this part, all the information required by § 551.5. Such information may be presented in any form
convenient to the petitioner; no particular form is prescribed for the petition. The petition shall also include, by
attachment, a copy of any collective
bargaining agreement or other document governing the method of payment
for the work of employees covered by
the wage payment plan with respect to
which a finding is requested. The petition, together with any such documents, shall be filed with the Administrator, Wage and Hour Division, United
States Department of Labor, Washington, DC 20210.
§ 551.5 Information to be submitted.
Every petition filed under §§ 551.3 and
551.4 shall contain the following information:
(a) A full statement of the facts relied upon by the petitioner to establish, under the applicable definitions in
§ 551.8, that the wage payment plan submitted for consideration: (1) Applies to
employees employed (i) as drivers or
drivers’ helpers, or both, (ii) in ‘‘making local deliveries’’ and (2) determines, ‘‘on the basis of trip rates or
other delivery payment plan’’, the
compensation which such employees
receive for such employment; and
(b) A complete description of the
wage payment plan and full information concerning its application showing, among other things: (1) The method of compensation which it provides
and the types of payments made to employees covered by the plan, together
with such information as may be necessary to show how these payments are
computed and how and to what extent
they are actually used in determining
the total compensation received by employees covered by the plan, (2) a full
description of all duties performed by
the employees compensated under the
plan, including information as to the
types of goods delivered, their points of
origin and destination and the purposes
for and geographical area within which
they are transported by the employees,
the relationship of the employer to the
consignor and consignee, and the numbers, (minimum, maximum, and average or typical) of round trips made by
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29 CFR Ch. V (7–1–19 Edition)
such employees in transporting such
goods during the workday and of deliveries made during each such trip, and
(3) other relevant information concerning the employees compensated
under the plan including the total
number of such employees employed
full-time as drivers or drivers’ helpers
making local deliveries under the provisions of the plan during the most recent representative annual period as
defined in § 551.8(g)(1), the weekly hours
worked and the average workweek of
such employees during such period and,
if there are any significant variations
in the number of such employees so
employed in the particular workweeks
within the period, a full statement of
the facts concerning such variations,
information as to any workweeks in
which any employees compensated
under the plan devote less than eighty
percent of their worktime to duties as
drivers or drivers’ helpers making local
deliveries; and
(c) A statement of the facts and reasons based on the history and application of the plan which are relied upon
to support a finding that the plan has
the general purpose and effect of reducing the hours worked by drivers or
drivers’ helpers covered by its provisions to, or below, the statutory maximum workweek applicable to them
under the Act.
§ 551.6 Action on petition.
(a) Upon the filing of a petition as
provided in this part, the Administrator will give consideration thereto,
and make any further inquiry into the
facts that he may deem necessary. The
Administrator may require, before taking further action thereof, that notice
of the petition be given to affected employees in such manner as he shall determine to be appropriate to afford
them an opportunity to submit any
facts or reasons supporting or opposing
the finding prayed for in the petition.
If the Administrator determines that
the petition fails to satisfy any of the
requirements of this part, he shall deny
the request for a finding or, in his discretion, advise petitioners that further
consideration will be given to the submission if the deficiencies are remedied
within a specified time. No further consideration will be given, however, to a
request for a finding if the Administrator determines that the factual situation as described in the petition is not
one in which authority to make the
finding is provided by section 13(b)(11)
and this part.
(b) If the Administrator determines
that a petition meets all requirements
of this part and if he is satisfied from
consideration of all relevant facts and
information available to him that the
wage payment plan submitted has,
within the meaning of section 13(b)(11)
of the Act and this part, the general
purpose and effect with respect to drivers or drivers’ helpers making local deliveries, who are employed pursuant to
its provisions on the basis of trip rates
or other delivery payment plan, of reducing the hours worked by such employees to, or below, the maximum
workweek applicable to them under
section 7(a) of the Act, the Administrator will make an appropriate finding
to this effect, and notify the petitioner;
otherwise the request for such a finding will be denied.
§ 551.7 Finding.
(a) A finding by the Administrator
under paragraph (b) of § 551.6 that a
wage payment plan has the purpose
and effect required for exemption of
employees under section 13(b)(11) and
this part shall be effective in accordance with its terms upon notification
to petitioners as provided in § 551.6(b).
The finding shall include such terms
and conditions and such limitations
with respect to its application as the
Administrator shall deem necessary to
ensure that no exemption will be based
thereon in the event of any significant
change in any of the essential supporting facts.
(b) A finding made pursuant to this
part may be amended or revoked by the
Administrator at any time upon his
own motion or upon written request of
any interested person setting forth reasonable grounds therefor. Before taking such action, the Administrator
shall afford opportunity to interested
persons to present their views and shall
give consideration to any relevant information that they may present.
§ 551.8 Definitions.
As used in this part:
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§ 551.8
(a) Secretary means the Secretary of
Labor.
(b) Administrator means the Administrator of the Wage and Hour Division,
United States Department of Labor.
(c) Finding means a finding made pursuant to section 13(b)(11) of the Fair
Labor Standards Act as provided in
this part.
(d) Making local deliveries includes the
activities customarily and regularly
performed in the physical transfer, to
customers of a business establishment
situated within the rural or urban community or metropolitan area in which
the establishment is located, of goods
sold or otherwise disposed of to such
local customers by such establishment.
Included are activities performed by
the driver or driver’s helpers as an incident to or in conjunction with making
such deliveries, such as picking up and
returning the delivery vehicle at the
beginning and end of the workday,
cleaning the vehicle, checking it to see
that it is in operating condition, loading and unloading or assisting in loading or unloading the goods, and picking
up empty containers or other goods
from customers for return to the establishment. Not included in the making
of local deliveries are such transportation as the carriage of passengers;
the transportation of any load of goods
that would normally require a round
trip longer than a single workday for
delivery and return to the starting
point; any movement of goods which
does not accomplish a transfer of possession from one person to another;
transportation of goods as a part of a
process of production; and transportation of goods within a local community or metropolitan area as an integral part of a carriage of such goods
from a point outside such community
or area to a destination within it, rather than as a part of the activities customarily performed in making local deliveries, as defined in this section, in
the same manner as deliveries of goods
held locally for local disposition.
(e) Employee employed as a driver or
driver’s helper making local deliveries includes any employee who is employed
in any workweek:
(1) To drive a delivery vehicle used in
making local deliveries, or
(2) To assist the driver of such a vehicle in making such deliveries, being required to ride on the vehicle to perform
such work,
and whose work in making local deliveries, as defined in paragraph (d) of this
section, accounts for at least 80 percent
of his hours of work in such workweek.
In making and applying any finding as
provided in this part, no employee
shall be considered to be employed as a
driver or driver’s helper making local
deliveries in any workweek when more
than 20 percent of his hours of work results from the performance of duties
other than those included in making
such local deliveries.
(f) A plan of compensation on the
basis of trip rates or other delivery payment plan means any plan whereby employees employed as drivers or drivers’
helpers making local deliveries are
compensated for their employment on
a basis such that the amount of payment which they receive is governed in
substantial part by a system of wage
payments based on units of work measurement such as numbers of trips
taken, miles driven, stops made, or
units of goods delivered (but not including any plan based solely on the
number of hours worked) so that there
is a substantial inducement to employees to minimize the number of hours
worked.
(g) For purposes of determining
whether and to what extent a plan of
compensation on the basis of trip rates
or other delivery payment plan has the
effect of reducing the weekly hours
worked by employees employed by an
employer as drivers or drivers’ helpers
making local deliveries pursuant to
such plan:
(1) The most recently completed representative period of one year (§ 551.2(c))
or most recent representative annual period (§ 551.5(b)(3)) shall mean a one-year
period within which such employees
were so employed on a regular fulltime basis by such employer (or, if
such employer has not previously used
such plan, by another employer using
the plan under substantially the same
conditions, which period shall include a
calendar or fiscal quarter-year ending
not more than four months prior to the
date as of which the effect of such plan
is to be considered, together with the
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29 CFR Ch. V (7–1–19 Edition)
three quarter-year periods immediately preceding such recently completed quarter-year; and
(2) The average weekly hours or average workweek of the full-time employees so employed during such annual period shall mean the number of hours
obtained by the following computation:
(i) All the hours worked during such
annual period by all the full-time employees regularly employed under the
plan shall be totaled; (ii) the number of
workweeks worked by each such employee during such annual period under
such plan shall be computed, and the
totals added together; and (iii) the average weekly hours, taken in the aggregate, of all such employees shall be
computed by dividing the sum resulting from computation (i) by the sum
resulting from computation (ii).
§ 551.9 Recordkeeping requirements.
The records which must be kept and
the computations which must be made
with respect to employees for whom
the overtime pay exemption under section 13(b)(11) is taken are specified in
§ 516.15 of this chapter.
[35 FR 17841, Nov. 20, 1970]
PART 552—APPLICATION OF THE
FAIR LABOR STANDARDS ACT TO
DOMESTIC SERVICE
Subpart A—General Regulations
Sec.
552.1 Terms used in regulations.
552.2 Purpose and scope.
552.3 Domestic service employment.
552.4 Babysitting services.
552.5 Casual basis.
552.6 Companionship services.
Subpart B—Interpretations
552.99 Basis for coverage of domestic service
employees.
552.100 Application of minimum wage and
overtime provisions.
552.101 Domestic service employment.
552.102 Live-in domestic service employees.
552.103 Babysitting services in general.
552.104 Babysitting services performed on a
casual basis.
552.105 Individuals performing babysitting
services in their own homes.
552.106 Companionship services.
552.107 Yard maintenance workers.
552.108 Child labor provisions.
552.109 Third party employment.
552.110
Recordkeeping requirements.
AUTHORITY: Secs. 13(a)(15) and 13(b)(21) of
the Fair Labor Standards Act, as amended
(29 U.S.C. 213(a)(15), (b)(21)), 88 Stat. 62; Sec.
29(b) of the Fair Labor Standards Amendments of 1974 (Pub. L. 93–259, 88 Stat. 76), unless otherwise noted.
SOURCE: 40 FR 7405, Feb. 20, 1975, unless
otherwise noted.
Subpart A—General Regulations
§ 552.1
Terms used in regulations.
(a) Administrator means the Administrator of the Wage and Hour Division,
U.S. Department of Labor, or the Administrator’s authorized representative.
(b) Act means the Fair Labor Standards Act of 1938, as amended.
§ 552.2
Purpose and scope.
(a) This part provides necessary rules
for the application of the Act to domestic service employment in accordance
with the following amendments made
by the Fair Labor Standards Amendments of 1974, 88 Stat. 55, et seq.
(b) Section 2(a) of the Act finds that
the ‘‘employment of persons in domestic service in households affects commerce.’’ Section 6(f) extends the minimum wage protection under section
6(b) to employees employed as domestic service employees under either of
the following circumstances:
(1) If the employee’s compensation
for such services from his/her employer
would constitute wages under section
209(a)(6) of title II of the Social Security Act, that is, if the cash remuneration during a calendar year is not less
than $1,000 in 1995, or the amount designated for subsequent years pursuant
to the adjustment provision in section
3121(x) of the Internal Revenue Code of
1986; or
(2) If the employee was employed in
such domestic service work by one or
more employers for more than 8 hours
in the aggregate in any workweek.
Section 7(l) extends generally the protection of the overtime provisions of
section 7(a) to such domestic service
employees. Section 13(a)(15) provides
both a minimum wage and overtime exemption for ‘‘employees employed on a
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§ 552.6
casual basis in domestic service employment to provide babysitting services’’ and for domestic service employees employed’’ to provide companionship services for individuals who (because of age or infirmity) are unable to
care for themselves.’’ Section 13(b)(21)
provides an overtime exemption for domestic service employees who reside in
the household in which they are employed.
(c) The definitions required by section 13(a)(15) are contained in §§ 552.3,
552.4, 552.5 and 552.6.
(Sec. 29(b), 88 Stat. 76; (29 U.S.C. 206(f)); Secretary’s Order No. 16–75, dated Nov. 25, 1975
(40 FR 55913), and Employment Standards
Order No. 76–2, dated Feb. 23, 1976 (41 FR
9016))
[40 FR 7405, Feb. 20, 1975, as amended at 44
FR 37221, June 26, 1979; 60 FR 46767, 46768,
Sept. 8, 1995]
§ 552.3
Domestic service employment.
The term domestic service employment
means services of a household nature
performed by an employee in or about
a private home (permanent or temporary). The term includes services
performed by employees such as companions, babysitters, cooks, waiters,
butlers, valets, maids, housekeepers,
nannies, nurses, janitors, laundresses,
caretakers,
handymen,
gardeners,
home health aides, personal care aides,
and chauffeurs of automobiles for family use. This listing is illustrative and
not exhaustive.
[78 FR 60557, Oct. 1, 2013]
§ 552.4
Babysitting services.
As used in section 13(a)(15) of the
Act, the term babysitting services shall
mean the custodial care and protection, during any part of the 24-hour
day, of infants or children in or about
the private home in which the infants
or young children reside. The term
‘‘babysitting services’’ does not include
services relating to the care and protection of infants or children which are
performed by trained personnel, such
as registered, vocational, or practical
nurses. While such trained personnel do
not qualify as babysitters, this fact
does not remove them from the category of a covered domestic service
employee when employed in or about a
private household.
§ 552.5
Casual basis.
As used in section 13(a)(15) of the
Act, the term casual basis, when applied
to babysitting services, shall mean employment which is irregular or intermittent, and which is not performed by
an individual whose vocation is babysitting. Casual babysitting services
may include the performance of some
household work not related to caring
for the children: Provided, however,
That such work is incidental, i.e., does
not exceed 20 percent of the total hours
worked on the particular babysitting
assignment.
§ 552.6
Companionship services.
(a) As used in section 13(a)(15) of the
Act, the term companionship services
means the provision of fellowship and
protection for an elderly person or person with an illness, injury, or disability who requires assistance in caring for himself or herself. The provision of fellowship means to engage the
person in social, physical, and mental
activities, such as conversation, reading, games, crafts, or accompanying
the person on walks, on errands, to appointments, or to social events. The
provision of protection means to be
present with the person in his or her
home or to accompany the person when
outside of the home to monitor the person’s safety and well-being.
(b) The term companionship services
also includes the provision of care if
the care is provided attendant to and
in conjunction with the provision of
fellowship and protection and if it does
not exceed 20 percent of the total hours
worked per person and per workweek.
The provision of care means to assist
the person with activities of daily living (such as dressing, grooming, feeding, bathing, toileting, and transferring) and instrumental activities of
daily living, which are tasks that enable a person to live independently at
home (such as meal preparation, driving, light housework, managing finances, assistance with the physical
taking of medications, and arranging
medical care).
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§ 552.99
29 CFR Ch. V (7–1–19 Edition)
(c) The term companionship services
does not include domestic services performed primarily for the benefit of
other members of the household.
(d) The term companionship services
does not include the performance of
medically related services provided for
the person. The determination of
whether services are medically related
is based on whether the services typically require and are performed by
trained personnel, such as registered
nurses, licensed practical nurses, or
certified nursing assistants; the determination is not based on the actual
training or occupational title of the individual performing the services.
[78 FR 60557, Oct. 1, 2013]
Subpart B—Interpretations
§ 552.99 Basis for coverage of domestic
service employees.
Congress in section 2(a) of the Act
specifically found that the employment
of persons in domestic service in households affects commerce. In the legislative history it was pointed out that
employees in domestic service employment handle goods such as soaps, mops,
detergents, and vacuum cleaners that
have moved in or were produced for
interstate commerce and also that
they free members of the household to
themselves to engage in activities in
interstate commerce (S. Rep. 93–690,
pp. 21–22). The Senate Committee on
Labor and Public Welfare ‘‘took note of
the expanded use of the interstate commerce clause by the Supreme Court in
numerous recent cases (particularly
Katzenbach v. McClung, 379 U.S. 294
(1964)),’’ and concluded ‘‘that coverage
of domestic employees is a vital step in
the direction of ensuring that all workers affecting interstate commerce are
protected by the Fair Labor Standards
Act’’ (S. Rep. 93–690, pp. 21–22).
§ 552.100 Application
of
minimum
wage and overtime provisions.
(a)(1) Domestic service employees
must receive for employment in any
household a minimum wage of not less
than that required by section 6(a) of
the Fair Labor Standards Act.
(2) In addition, domestic service employees who work more than 40 hours
in any one workweek for the same em-
ployer must be paid overtime compensation at a rate not less than one
and one-half times the employee’s regular rate of pay for such excess hours,
unless the employee is one who resides
in the employer’s household. In the
case of employees who reside in the
household where they are employed,
section 13(b)(21) of the Act provides an
overtime, but not a minimum wage, exemption. See § 552.102.
(b) In meeting the wage responsibilities imposed by the Act, employers
may take appropriate credit for the
reasonable cost or fair value, as determined by the Administrator, of food,
lodging and other facilities customarily furnished to the employee by the
employer such as drugs, cosmetics,
drycleaning, etc. See S. Rep. 93–690, p.
19, and section 3(m) of the Act. Credit
may be taken for the reasonable cost
or fair value of these facilities only
when the employee’s acceptance of
them is voluntary and uncoerced. See
regulations, part 531. Where uniforms
are required by the employer, the cost
of the uniforms and their care may not
be included in such credit.
(c) For enforcement purposes, the Administrator will accept a credit taken
by the employer of up to 37.5 percent of
the statutory minimum hourly wage
for a breakfast (if furnished), up to 50
percent of the statutory minimum
hourly wage for a lunch (if furnished),
and up to 62.5 percent of the statutory
minimum hourly wage for a dinner (if
furnished), which meal credits when
combined do not in total exceed 150
percent of the statutory minimum
hourly wage for any day. Nothing herein shall prevent employers from crediting themselves with the actual cost
or fair value of furnishing meals,
whichever is less, as determined in accordance with part 531 of this chapter,
if such cost or fair value is different
from the meal credits specified above:
Provided, however, that employers keep,
maintain and preserve (for a period of 3
years) the records on which they rely
to justify such different cost figures.
(d) In the case of lodging furnished to
live-in domestic service employees, the
Administrator will accept a credit
taken by the employer of up to seven
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§ 552.102
and one-half times the statutory minimum hourly wage for each week lodging is furnished. Nothing herein shall
prevent employers from crediting
themselves with the actual cost or fair
value of furnishing lodging, whichever
is less, as determined in accordance
with part 531 of this chapter, if such
cost or fair value is different from the
amount specified above, provided, however, that employers keep, maintain,
and preserve (for a period of 3 years)
the records on which they rely to justify such different cost figures. In determining reasonable cost or fair value,
the regulations and rulings in 29 CFR
part 531 are applicable.
(Sec. 29(b), 88 Stat. 76; (29 U.S.C. 206(f)); Secretary’s Order No. 16–75, dated Nov. 25, 1975
(40 FR 55913), and Employment Standards
Order No. 76–2, dated Feb. 23, 1976 (41 FR
9016))
[40 FR 7405, Feb. 20, 1975, as amended at 44
FR 6716, Feb. 2, 1979; 60 FR 46768, Sept. 8,
1995]
§ 552.101 Domestic service employment.
(a) The definition of domestic service
employment contained in § 552.3 is derived from the regulations issued under
the Social Security Act (20 CFR
404.1057) and from ‘‘the generally accepted meaning’’ of the term. Accordingly, the term includes persons who
are frequently referred to as ‘‘private
household workers.’’ See. S. Rep. 93–
690, p. 20. The domestic service must be
performed in or about a private home
whether that home is a fixed place of
abode or a temporary dwelling as in
the case of an individual or family
traveling on vacation. A separate and
distinct dwelling maintained by an individual or a family in an apartment
house, condominium or hotel may constitute a private home.
(b) Employees employed in dwelling
places which are primarily rooming or
boarding houses are not considered domestic service employees. The places
where they work are not private homes
but commercial or business establishments. Likewise, employees employed
in connection with a business or professional service which is conducted in a
home (such as a real estate, doctor’s,
dentist’s or lawyer’s office) are not domestic service employees.
(c) In determining the total hours
worked, the employer must include all
time the employee is required to be on
the premises or on duty and all time
the employee is suffered or permitted
to work. Special rules for live-in domestic service employees are set forth
in § 552.102.
[40 FR 7405, Feb. 20, 1975, as amended at 60
FR 46768, Sept. 8, 1995; 78 FR 60557, Oct. 1,
2013]
§ 552.102 Live-in domestic service employees.
(a) Domestic service employees who
reside in the household where they are
employed are entitled to the same minimum wage as domestic service employees who work by the day. However,
section 13(b)(21) provides an exemption
from the Act’s overtime requirements
for domestic service employees who reside in the household where employed.
But this exemption does not excuse the
employer from paying the live-in worker at the applicable minimum wage
rate for all hours worked. In determining the number of hours worked by
a live-in worker, the employee and the
employer may exclude, by agreement
between themselves, the amount of
sleeping time, meal time and other periods of complete freedom from all duties when the employee may either
leave the premises or stay on the premises for purely personal pursuits. For
periods of free time (other than those
relating to meals and sleeping) to be
excluded from hours worked, the periods must be of sufficient duration to
enable the employee to make effective
use of the time. If the sleeping time,
meal periods or other periods of free
time are interrupted by a call to duty,
the interruption must be counted as
hours worked. See regulations part 785,
§ 785.23.
(b) If it is found by the parties that
there is a significant deviation from
the initial agreement, the parties
should reach a new agreement that reflects the actual facts of the hours
worked by the employee.
[40 FR 7405, Feb. 20, 1975, as amended at 78
FR 60557, Oct. 1, 2013]
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§ 552.103
29 CFR Ch. V (7–1–19 Edition)
§ 552.103 Babysitting services in general.
The term ‘‘babysitting services’’ is
defined in § 552.4. Babysitting is a form
of domestic service, and babysitters
other than those working on a casual
basis are entitled to the same benefits
under the Act as other domestic service employees.
§ 552.104 Babysitting
services
performed on a casual basis.
(a) Employees performing babysitting services on a casual basis, as defined in § 552.5 are excluded from the
minimum wage and overtime provisions of the Act. The rationale for this
exclusion is that such persons are usually not dependent upon the income
from rendering such services for their
livelihood. Such services are often provided by (1) Teenagers during nonschool hours or for a short period after
completing high school but prior to entering other employment as a vocation,
or (2) older persons whose main source
of livelihood is from other means.
(b) Employment in babysitting services would usually be on a ‘‘casual
basis,’’ whether performed for one or
more employees, if such employment
by all such employers does not exceed
20 hours per week in the aggregate.
Employment in excess of these hours
may still be on a ‘‘casual basis’’ if the
excessive hours of employment are
without regularity or are for irregular
or intermittent periods. Employment
in babysitting services shall also be
deemed to be on a ‘‘casual basis’’ (regardless of the number of weekly hours
worked by the babysitter) in the case
of individuals whose vocations are not
domestic service who accompany families for a vacation period to take care
of the children if the duration of such
employment does not exceed 6 weeks.
(c) If the individual performing babysitting services on a ‘‘casual basis’’ devotes more than 20 percent of his or her
time to household work during a babysitting assignment, the exemption for
‘‘babysitting services on a casual
basis’’ does not apply during that assignment and the individual must be
paid in accordance with the Act’s minimum wage and overtime requirements. This does not affect the application of the exemption for previous or
subsequent babysitting assignments
where the 20 percent tolerance is not
exceeded.
(d) Individuals who engage in babysitting as a full-time occupation are
not employed on a ‘‘casual basis.’’
[40 FR 7405, Feb. 20, 1975, as amended at 60
FR 46768, Sept. 8, 1995]
§ 552.105 Individuals performing babysitting services in their own homes.
(a) It is clear from the legislative history that the Act’s new coverage of domestic service employees is limited to
those persons who perform such services in or about the private household
of the employer. Accordingly, if such
services are performed away from the
employer’s permanent, or temporary
household there is no coverage under
sections 6(f) and 7(l) of the Act. A typical example would be an individual
who cares for the children of others in
her own home. This type of operation,
however, could, depending on the particular facts, qualify as a preschool or
day care center and thus be covered
under section 3(s)(1)(B) of the Act in
which case the person providing the
service would be required to comply
with the applicable provisions of the
Act.
(b) An individual in a local neighborhood who takes four or five children
into his or her home, which is operated
as a day care home, and who does not
have more than one employee or whose
only employees are members of that individual’s immediate family is not covered by the Fair Labor Standards Act.
[40 FR 7405, Feb. 20, 1975, as amended at 60
FR 46768, Sept. 8, 1995]
§ 552.106
Companionship services.
The term ‘‘companionship services’’
is defined in § 552.6. Persons who provide care and protection for babies and
young children who do not have illnesses, injuries, or disabilities are considered babysitters, not companions.
The companion must perform the services with respect to the elderly person
or person with an illness, injury, or disability and not generally to other persons. The ‘‘casual’’ limitation does not
apply to companion services.
[78 FR 60557, Oct. 1, 2013]
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§ 552.110
§ 552.107 Yard maintenance workers.
Persons who mow lawns and perform
other yard work in a neighborhood
community generally provide their
own equipment, set their own work
schedule and occasionally hire other
individuals. Such persons will be recognized as independent contractors who
are not covered by the Act as domestic
service employees. On the other hand,
gardeners and yardmen employed primarily by one household are not usually independent contractors.
§ 552.108 Child labor provisions.
Congress made no change in section
12 as regards domestic service employees. Accordingly, the child labor provisions of the Act do not apply unless the
underaged minor (a) is individually engaged in commerce or in the production of goods for commerce, or (b) is
employed by an enterprise meeting the
coverage tests of sections 3(r) and
3(s)(1) of the Act, or (c) is employed in
or about a home where work in the production of goods for commerce is performed.
§ 552.109 Third party employment.
(a) Third party employers of employees engaged in companionship services
within the meaning of § 552.6 may not
avail themselves of the minimum wage
and overtime exemption provided by
section 13(a)(15) of the Act, even if the
employee is jointly employed by the
individual or member of the family or
household using the services. However,
the individual or member of the family
or household, even if considered a joint
employer, is still entitled to assert the
exemption, if the employee meets all of
the requirements of § 552.6.
(b) Employees who are engaged in
providing babysitting services and who
are employed by an employer or agency
other than the family or household
using their services are not employed
on a ‘‘casual basis’’ for purposes of the
section 13(a)(15) exemption. Such employees are engaged in this occupation
as a vocation.
(c) Third party employers of employees engaged in live-in domestic service
employment within the meaning of
§ 552.102 may not avail themselves of
the overtime exemption provided by
section 13(b)(21) of the Act, even if the
employee is jointly employed by the
individual or member of the family or
household using the services. However,
the individual or member of the family
or household, even if considered a joint
employer, is still entitled to assert the
exemption.
[40 FR 7405, Feb. 20, 1975, as amended at 78
FR 60557, Oct. 1, 2013]
§ 552.110 Recordkeeping requirements.
(a) The general recordkeeping regulations are found in part 516 of this chapter and they require that every employer having covered domestic service
employees shall keep records which
show for each such employee: (1) Name
in full, (2) social security number, (3)
address in full, including zip code, (4)
total hours worked each week by the
employee for the employer, (5) total
cash wages paid each week to the employee by the employer, (6) weekly
sums claimed by the employer for
board, lodging or other facilities, and
(7) extra pay for weekly hours worked
in excess of 40 by the employee for the
employer. No particular form of
records is required, so long as the
above information is recorded and the
record is maintained and preserved for
a period of 3 years.
(b) In the case of an employee who resides on the premises, the employer
shall keep a copy of the agreement
specified by § 552.102 and make, keep,
and preserve a record showing the
exact number of hours worked by the
live-in domestic service employee. The
provisions of § 516.2(c) of this chapter
shall not apply to live-in domestic
service employees.
(c) With the exception of live-in domestic service employees, where a domestic service employee works on a
fixed schedule, the employer may use a
schedule of daily and weekly hours
that the employee normally works and
either the employer or the employee
may:
(1) Indicate by check marks, statement or other method that such hours
were actually worked; and
(2) When more or less than the scheduled hours are worked, show the exact
number of hours worked.
(d) The employer is required to maintain records of hours worked by each
covered domestic service employee.
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29 CFR Ch. V (7–1–19 Edition)
However, the employer may require the
domestic service employee to record
the hours worked and submit such
record to the employer.
(e) No records are required for casual
babysitters.
[40 FR 7405, Feb. 20, 1975, as amended at 78
FR 60557, Oct. 1, 2013]
PART 553—APPLICATION OF THE
FAIR LABOR STANDARDS ACT TO
EMPLOYEES OF STATE AND
LOCAL GOVERNMENTS
Subpart A—General
INTRODUCTION
Sec.
553.1
553.2
553.3
553.102 Employment by the same public
agency.
553.103 ‘‘Same type of services’’ defined.
553.104 Private individuals who volunteer
services to public agencies.
553.105 Mutual aid agreements.
553.106 Payment of expenses, benefits, or
fees.
Subpart C—Fire Protection and Law Enforcement Employees of Public Agencies
GENERAL PRINCIPLES
553.200 Statutory
provisions:
section
13(b)(20).
553.201 Statutory provisions: section 7(k).
553.202 Limitations.
EXEMPTION REQUIREMENTS
Definitions.
Purpose and scope.
Coverage—general.
553.10 General.
553.11 Exclusion for elected officials and
their appointees.
553.12 Exclusion for employees of legislative
branches.
553.210 Fire protection activities.
553.211 Law enforcement activities.
553.212 Twenty percent limitation on nonexempt work.
553.213 Public agency employees engaged in
both fire protection and law enforcement
activities.
553.214 Trainees.
553.215 [Reserved]
553.216 Other exemptions.
SECTION 7(o)—COMPENSATORY TIME AND
COMPENSATORY TIME OFF
TOUR OF DUTY AND COMPENSABLE HOURS OF
WORK RULES
SECTION 3(e)(2)(C)—EXCLUSIONS
553.20 Introduction.
553.21 Statutory provisions.
553.22 ‘‘FLSA compensatory time’’ and
‘‘FLSA compensatory time off’’.
553.23 Agreement or understanding prior to
performance of work.
553.24 ‘‘Public safety’’, ‘‘emergency response’’, and ‘‘seasonal’’ activities.
553.25 Conditions for use of compensatory
time (‘‘reasonable period’’, ‘‘unduly disrupt’’).
553.26 Cash overtime payments.
553.27 Payments for unused compensatory
time.
553.28 Other compensatory time.
OTHER EXEMPTIONS
553.30 Occasional or sporadic employment—
section 7(p)(2).
553.31 Substitution—section 7(p)(3).
553.32 Other FLSA exemptions.
RECORDKEEPING
553.220 ‘‘Tour of duty’’ defined.
553.221 Compensable hours of work.
553.222 Sleep time.
553.223 Meal time.
553.224 ‘‘Work period’’ defined.
553.225 Early relief.
553.226 Training time.
553.227 Outside employment.
OVERTIME COMPENSATION RULES
553.230 Maximum hours standards for work
periods of 7 to 28 days—section 7(k).
553.231 Compensatory time off.
553.232 Overtime pay requirements.
553.233 ‘‘Regular rate’’ defined.
AUTHORITY: Secs. 1–19, 52 Stat. 1060, as
amended (29 U.S.C. 201–219); Pub. L. 99–150, 99
Stat. 787 (29 U.S.C. 203, 207, 211). Pub. L. 106–
151, 113 Stat. 1731 (29 U.S.C. 203(y)).
SOURCE: 52 FR 2032, Jan. 16, 1987, unless
otherwise noted.
553.50 Records to be kept of compensatory
time.
553.51 Records to be kept for employees paid
pursuant to section 7(k).
Subpart B—Volunteers
553.100
553.101
Subpart A—General
INTRODUCTION
§ 553.1
Definitions.
(a) Act or FLSA means the Fair Labor
Standards Act of 1938, as amended (52
General.
‘‘Volunteer’’ defined.
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§ 553.11
Stat. 1060, as amended; 29 U.S.C. 201–
219).
(b) 1985 Amendments means the Fair
Labor Standards Amendments of 1985
(Pub. L. 99–150).
(c) Public agency means a State, a political subdivision of a State or an
interstate governmental agency.
(d) State means a State of the United
States, the District of Columbia, Puerto Rico, the Virgin Islands, or any
other Territory or possession of the
United States (29 U.S.C. 203(c) and
213(f)).
§ 553.2
Purpose and scope.
(a) The 1985 Amendments to the Fair
Labor Standards Act (FLSA) changed
certain provisions of the Act as they
apply to employees of State and local
public agencies. The purpose of part 553
is to set forth the regulations to carry
out the provisions of these Amendments, as well as other FLSA provisions previously in existence relating
to such public agency employees.
(b) The regulations in this part are
divided into three subparts. Subpart A
interprets and applies the special
FLSA provisions that are generally applicable to all covered and nonexempt
employees of State and local governments. Subpart A also contains provisions concerning certain individuals
(i.e., elected officials, their appointees,
and legislative branch employees) who
are excluded from the definition of
‘‘employee’’ and thus from FLSA coverage. This subpart also interprets and
applies sections 7(o), and 7(p)(2), 7(p)(3),
and 11(c) of the Act regarding compensatory time off, occasional or sporadic
part-time employment, and the performance of substitute work by public
agency employees, respectively.
(c) Subpart B of this part deals with
‘‘volunteer’’ services performed by individuals for public agencies. Subpart
C applies various FLSA provisions as
they relate to fire protection and law
enforcement employees of public agencies.
§ 553.3
Coverage—general.
(a)(1) In 1966, Congress amended the
FLSA to extend coverage to State and
local government employees engaged
in the operation of hospitals, nursing
homes, schools, and mass transit systems.
(2) In 1972, the Education Amendments further extended coverage to
employees of public preschools.
(3) In 1974, the FLSA Amendments
extended coverage to virtually all of
the remaining State and local government employees who were not covered
as a result of the 1966 and 1972 legislation.
(b) Certain definitions already in the
Act were modified by the 1974 Amendments. The definition of the term
‘‘employer’’ was changed to include
public agencies and that of ‘‘employee’’
was amended to include individuals
employed by public agencies. The definition of ‘‘enterprise’’ contained in section 3(r) of the Act was modified to
provide that activities of a public agency are performed for a ‘‘business purpose.’’ The term ‘‘enterprise engaged in
commerce or in the production of goods
for commerce’’ defined in section 3(s)
of the Act was expanded to include
public agencies.
SECTION 3(e)(2)(C)—EXCLUSIONS
§ 553.10
General.
Section 3(e)(2)(C) of the Act excludes
from the definition of ‘‘employee’’, and
thus from coverage, certain individuals
employed by public agencies. This exclusion applies to elected public officials, their immediate advisors, and
certain individuals whom they appoint
or select to serve in various capacities.
In addition, the 1985 Amendments exclude employees of legislative branches
of State and local governments. A condition for exclusion is that the employee must not be subject to the civil
service laws of the employing State or
local agency.
§ 553.11 Exclusion for elected officials
and their appointees.
(a) Section 3(e)(2)(C) provides an exclusion from the Act’s coverage for officials elected by the voters of their jurisdictions. Also excluded under this
provision are personal staff members
and officials in policymaking positions
who are selected or appointed by the
elected public officials and certain advisers to such officials.
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§ 553.12
29 CFR Ch. V (7–1–19 Edition)
(b) The statutory term ‘‘member of
personal staff’’ generally includes only
persons who are under the direct supervision of the selecting elected official
and have regular contact with such official. The term typically does not include individuals who are directly supervised by someone other than the
elected official even though they may
have been selected by the official. For
example, the term might include the
elected official’s personal secretary,
but would not include the secretary to
an assistant.
(c) In order to qualify as personal
staff members or officials in policymaking positions, the individuals in
question must not be subject to the
civil service laws of their employing
agencies. The term ‘‘civil service laws’’
refers to a personnel system established by law which is designed to protect employees from arbitrary action,
personal favoritism, and political coercion, and which uses a competitive or
merit examination process for selection and placement. Continued tenure
of employment of employees under
civil service, except for cause, is provided. In addition, such personal staff
members must be appointed by, and
serve solely at the pleasure or discretion of, the elected official.
(d) The exclusion for ‘‘immediate adviser’’ to elected officials is limited to
staff who serve as advisers on constitutional or legal matters, and who are
not subject to the civil service rules of
their employing agency.
§ 553.12 Exclusion for employees
legislative branches.
of
(a) Section 3(e)(2)(C) of the Act provides an exclusion from the definition
of the term ‘‘employee’’ for individuals
who are not subject to the civil service
laws of their employing agencies and
are employed by legislative branches
or bodies of States, their political subdivisions or interstate governmental
agencies.
(b) Employees of State or local legislative libraries do not come within this
statutory exclusion. Also, employees of
school boards, other than elected officials and their appointees (as discussed
in § 553.11), do not come within this exclusion.
SECTION 7(o)—COMPENSATORY TIME AND
COMPENSATORY TIME OFF
§ 553.20
Introduction.
Section 7 of the FLSA requires that
covered, nonexempt employees receive
not less than one and one-half times
their regular rates of pay for hours
worked in excess of the applicable maximum hours standards. However, section 7(o) of the Act provides an element
of flexibility to State and local government employers and an element of
choice to their employees or the representatives of their employees regarding compensation for statutory overtime hours. The exemption provided by
this subsection authorizes a public
agency which is a State, a political
subdivision of a State, or an interstate
governmental agency, to provide compensatory time off (with certain limitations, as provided in § 553.21) in lieu
of monetary overtime compensation
that would otherwise be required under
section 7. Compensatory time received
by an employee in lieu of cash must be
at the rate of not less than one and
one-half hours of compensatory time
for each hour of overtime work, just as
the monetary rate for overtime is calculated at the rate of not less than one
and one-half times the regular rate of
pay.
§ 553.21
Statutory provisions.
Section 7(o) provides as follows:
(o)(1) Employees of a public agency which
is a State, a political subdivision of a State,
or an interstate governmental agency may
receive, in accordance with this subsection
and in lieu of overtime compensation, compensatory time off at a rate not less than
one and one-half hours for each hour of employment for which overtime compensation
is required by this section.
(2) A public agency may provide compensatory time under paragraph (1) only—
(A) Pursuant to—
(i) Applicable provisions of a collective
bargaining agreement, memorandum of understanding, or any other agreement between the public agency and representatives
of such employees; or
(ii) In the case of employees not covered by
subclause (i), an agreement or understanding
arrived at between the employer and employee before the performance of the work;
and
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Wage and Hour Division, Labor
§ 553.23
(B) If the employee has not accrued compensatory time in excess of the limit applicable to the employee prescribed by paragraph (3).
In the case of employees described in
clause (A)(ii) hired prior to April 15, 1986, the
regular practice in effect on April 15, 1986,
with respect to compensatory time off for
such employees in lieu of the receipt of overtime compensation, shall constitute an
agreement or understanding under such
clause (A)(ii). Except as provided in the previous sentence, the provision of compensatory time off to such employees for hours
worked after April 14, 1986, shall be in accordance with this subsection.
(3)(A) If the work of an employee for which
compensatory time may be provided included work in a public safety activity, an
emergency response activity, or a seasonal
activity, the employee engaged in such work
may accrue not more than 480 hours of compensatory time for hours worked after April
15, 1986. If such work was any other work,
the employee engaged in such work may accrue not more than 240 hours of compensatory time for hours worked after April 15,
1986. Any such employee who, after April 15,
1986, has accrued 480 or 240 hours, as the case
may be, of compensatory time off shall, for
additional overtime hours of work, be paid
overtime compensation.
(B) If compensation is paid to an employee
for accrued compensatory time off, such
compensation shall be paid at the regular
rate earned by the employee at the time the
employee receives such payment.
(4) An employee who has accrued compensatory time off authorized to be provided
under paragraph (1) shall, upon termination
of employment, be paid for the unused compensatory time at a rate of compensation
not less than—
(A) The average regular rate received by
such employee during the last 3 years of the
employee’s employment, or
(B) The final regular rate received by such
employee, whichever is higher.
(5) An employee of a public agency which is
a State, political subdivision of a State, or
an interstate governmental agency—
(A) Who has accrued compensatory time
off authorized to be provided under paragraph (1), and
(B) Who has requested the use of such compensatory time, shall be permitted by the
employee’s employer to use such time within
a reasonable period after making the request
if the use of the compensatory time does not
unduly disrupt the operations of the public
agency.
(6) For purposes of this subsection—
(A) The term overtime compensation means
the compensation required by subsection (a),
and
(B) The terms compensatory time and compensatory time off means hours during which
an employee is not working, which are not
counted as hours worked during the applicable workweek or other work period for purposes of overtime compensation, and for
which the employee is compensated at the
employee’s regular rate.
[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23,
1987]
§ 553.22 ‘‘FLSA compensatory time’’
and ‘‘FLSA compensatory time off’’.
(a) Compensatory time and compensatory time off are interchangeable
terms under the FLSA. Compensatory
time off is paid time off the job which
is earned and accrued by an employee
in lieu of immediate cash payment for
employment in excess of the statutory
hours for which overtime compensation
is required by section 7 of the FLSA.
(b) The Act requires that compensatory time under section 7(o) be
earned at a rate not less than one and
one-half hours for each hour of employment for which overtime compensation
is required by section 7 of the FLSA.
Thus, the 480-hour limit on accrued
compensatory time represents not
more than 320 hours of actual overtime
worked, and the 240-hour limit represents not more than 160 hours of actual overtime worked.
(c) The 480- and 240-hour limits on accrued compensatory time only apply to
overtime hours worked after April 15,
1986. Compensatory time which an employee has accrued prior to April 15,
1986, is not subject to the overtime requirements of the FLSA and need not
be aggregated with compensatory time
accrued after that date.
§ 553.23 Agreement or understanding
prior to performance of work.
(a) General. (1) As a condition for use
of compensatory time in lieu of overtime
payment
in
cash,
section
7(o)(2)(A) of the Act requires an agreement or understanding reached prior to
the performance of work. This can be
accomplished pursuant to a collective
bargaining agreement, a memorandum
of understanding or any other agreement between the public agency and
representatives of the employees. If the
employees do not have a representative, compensatory time may be used
in lieu of cash overtime compensation
only if such an agreement or understanding has been arrived at between
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§ 553.23
29 CFR Ch. V (7–1–19 Edition)
the public agency and the individual
employee before the performance of
work. No agreement or understanding
is required with respect to employees
hired prior to April 15, 1986, who do not
have a representative, if the employer
had a regular practice in effect on
April 15, 1986, of granting compensatory time off in lieu of overtime pay.
(2) Agreements or understandings
may provide that compensatory time
off in lieu of overtime payment in cash
may be restricted to certain hours of
work only. In addition, agreements or
understandings may provide for any
combination of compensatory time off
and overtime payment in cash (e.g.,
one hour compensatory time credit
plus one-half the employee’s regular
hourly rate of pay in cash for each
hour of overtime worked) so long as
the premium pay principle of at least
‘‘time and one-half’’ is maintained. The
agreement or understanding may include other provisions governing the
preservation, use, or cashing out of
compensatory time so long as these
provisions are consistent with section
7(o) of the Act. To the extent that any
provision of an agreement or understanding is in violation of section 7(o)
of the Act, the provision is superseded
by the requirements of section 7(o).
(b) Agreement or understanding between the public agency and a representative of the employees. (1) Where employees have a representative, the agreement or understanding concerning the
use of compensatory time must be between the representative and the public agency either through a collective
bargaining agreement or through a
memorandum of understanding or
other type of oral or written agreement. In the absence of a collective
bargaining agreement applicable to the
employees, the representative need not
be a formal or recognized bargaining
agent as long as the representative is
designated by the employees. Any
agreement must be consistent with the
provisions of section 7(o) of the Act.
(2) Section 2(b) of the 1985 Amendments provides that a collective bargaining agreement in effect on April 15,
1986, which permits compensatory time
off in lieu of overtime compensation,
will remain in effect until the expiration date of the collective bargaining
agreement unless otherwise modified.
However, the terms and conditions of
such agreement under which compensatory time off is provided after April
14, 1986, must not violate the requirements of section 7(o) of the Act and
these regulations.
(c) Agreement or understanding between the public agency and individual
employees. (1) Where employees of a
public agency do not have a recognized
or otherwise designated representative,
the agreement or understanding concerning compensatory time off must be
between the public agency and the individual employee and must be reached
prior to the performance of work. This
agreement or understanding with individual employees need not be in writing, but a record of its existence must
be kept. (See § 553.50.) An employer
need not adopt the same agreement or
understanding with different employees and need not provide compensatory
time to all employees. The agreement
or understanding to provide compensatory time off in lieu of cash overtime
compensation may take the form of an
express condition of employment, provided (i) the employee knowingly and
voluntarily agrees to it as a condition
of employment and (ii) the employee is
informed that the compensatory time
received may be preserved, used or
cashed out consistent with the provisions of section 7(o) of the Act. An
agreement or understanding may be
evidenced by a notice to the employee
that compensatory time off will be
given in lieu of overtime pay. In such a
case, an agreement or understanding
would be presumed to exist for purposes of section 7(o) with respect to
any employee who fails to express to
the employer an unwillingness to accept compensatory time off in lieu of
overtime pay. However, the employee’s
decision to accept compensatory time
off in lieu of cash overtime payments
must be made freely and without coercion or pressure.
(2) Section 2(a) of the 1985 Amendments provides that in the case of employees who have no representative and
were employed prior to April 15, 1986, a
public agency that has had a regular
practice of awarding compensatory
time off in lieu of overtime pay is
deemed to have reached an agreement
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Wage and Hour Division, Labor
§ 553.24
or understanding with these employees
as of April 15, 1986. A public agency
need not secure an agreement or understanding with each employee employed
prior to that date. If, however, such a
regular practice does not conform to
the provisions of section 7(o) of the
Act, it must be modified to do so with
regard to practices after April 14, 1986.
With respect to employees hired after
April 14, 1986, the public employer who
elects to use compensatory time must
follow the guidelines on agreements
discussed in paragraph (c)(1) of this
section.
[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23,
1987]
§ 553.24 ‘‘Public safety’’, ‘‘emergency
response’’, and ‘‘seasonal’’ activities.
(a) Section 7(o)(3)(A) of the FLSA
provides that an employee of a public
agency which is a State, a political
subdivision of a State, or an interstate
governmental agency, may accumulate
not more than 480 hours of compensatory time for FLSA overtime hours
which are worked after April 15, 1986, if
the employee is engaged in ‘‘public
safety’’, ‘‘emergency response’’, or
‘‘seasonal’’ activity. Employees whose
work includes ‘‘seasonal’’, ‘‘emergency
response’’, or ‘‘public safety’’ activities, as well as other work, will not be
subject to both limits of accrual for
compensatory time. If the employee’s
work regularly involves the activities
included in the 480-hour limit, the employee will be covered by that limit. A
public agency cannot utilize the higher
cap by simple classification or designation of an employee. The work performed is controlling. Assignment of
occasional duties within the scope of
the higher cap will not entitle the employer to use the higher cap. Employees whose work does not regularly involve ‘‘seasonal’’, ‘‘emergency response’’, or ‘‘public safety’’ activities
are subject to a 240-hour compensatory
time accrual limit for FLSA overtime
hours which are worked after April 15,
1986.
(b) Employees engaged in ‘‘public
safety’’, ‘‘emergency response’’, or
‘‘seasonal’’ activities, who transfer to
positions subject to the 240-hour limit,
may carry over to the new position any
accrued compensatory time. The em-
ployer will not be required to cash out
the accrued compensatory time which
is in excess of the lower limit. However, the employee must be compensated in cash wages for any subsequent overtime hours worked until the
number of accrued hours of compensatory time falls below the 240-hour
limit.
(c) ‘‘Public safety activities’’: The
term ‘‘public safety activities’’ as used
in section 7(o)(3)(A) of the Act includes
law enforcement, fire fighting or related activities as described in §§ 553.210
(a) and (b) and 553.211 (a)–(c), and (f).
An employee whose work regularly involves such activities will qualify for
the 480-hour accrual limit. However,
the 480-hour accrual limit will not
apply to office personnel or other civilian employees who may perform public
safety activities only in emergency situations, even if they spend substantially all of their time in a particular
week in such activities. For example, a
maintenance worker employed by a
public agency who is called upon to
perform fire fighting activities during
an emergency would remain subject to
the 240-hour limit, even if such employee spent an entire week or several
weeks in a year performing public safety activities. Certain employees who
work in ‘‘public safety’’ activities for
purposes of section 7(o)(3)(A) may qualify for the partial overtime exemption
in section 7(k) of the Act. (See § 553.201)
(d) ‘‘Emergency response activity’’:
The term ‘‘emergency response activity’’ as used in section 7(o)(3)(A) of the
Act includes dispatching of emergency
vehicles and personnel, rescue work
and ambulance services. As is the case
with ‘‘public safety’’ and ‘‘seasonal’’
activities, an employee must regularly
engage in ‘‘emergency response’’ activities to be covered under the 480hour limit. A city office worker who
may be called upon to perform rescue
work in the event of a flood or snowstorm would not be covered under the
higher limit, since such emergency response activities are not a regular part
of the employee’s job. Certain employees who work in ‘‘emergency response’’
activities for purposes of section
7(o)(3)(A) may qualify for the partial
overtime exemption in section 7(k) of
the Act. (See § 553.215.)
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§ 553.25
29 CFR Ch. V (7–1–19 Edition)
(e)(1) ‘‘Seasonal activity’’: The term
‘‘seasonal activity’’ includes work during periods of significantly increased
demand, which are of a regular and recurring nature. In determining whether
employees are considered engaged in a
seasonal activity, the first consideration is whether the activity in which
they are engaged is a regular and recurring aspect of the employee’s work.
The second consideration is whether
the projected overtime hours during
the period of significantly increased
demand are likely to result in the accumulation during such period of more
than 240 compensatory time hours (the
number available under the lower cap).
Such projections will normally be
based on the employer’s past experience with similar employment situations.
(2) Seasonal activity is not limited
strictly to those operations that are
very susceptible to changes in the
weather. As an example, employees
processing tax returns over an extended period of significantly increased
demand whose overtime hours could be
expected to result in the accumulation
during such period of more than 240
compensatory time hours will typically
qualify as engaged in a seasonal activity.
(3) While parks and recreation activity is primarily seasonal because peak
demand is generally experienced in fair
weather, mere periods of short but intense activity do not make an employee’s job seasonal. For example, clerical
employees working increased hours for
several weeks on a special project or
assigned to an afternoon of shoveling
snow off the courthouse steps would
not be considered engaged in seasonal
activities, since the increased activity
would not result in the accumulation
during such period of more than 240
compensatory time hours. Further,
persons employed in municipal auditoriums, theaters, and sports facilities
that are open for specific, limited seasons would be considered engaged in
seasonal activities, while those employed in facilities that operate year
round generally would not.
(4) Road crews, while not necessarily
seasonal workers, may have significant
periods of peak demand, for instance
during the snow plowing season or road
construction season. The snow plow operator/road crew employee may be able
to accrue compensatory time to the
higher cap, while other employees of
the same department who do not have
lengthy periods of peak seasonal demand would remain under the lower
cap.
[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23,
1987]
§ 553.25 Conditions for use of compensatory time (‘‘reasonable period’’,
‘‘unduly disrupt’’).
(a) Section 7(o)(5) of the FLSA provides that any employee of a public
agency who has accrued compensatory
time and requested use of this compensatory time, shall be permitted to use
such time off within a ‘‘reasonable period’’ after making the request, if such
use does not ‘‘unduly disrupt’’ the operations of the agency. This provision,
however, does not apply to ‘‘other compensatory time’’ (as defined below in
§ 553.28), including compensatory time
accrued for overtime worked prior to
April 15, 1986.
(b) Compensatory time cannot be
used as a means to avoid statutory
overtime compensation. An employee
has the right to use compensatory time
earned and must not be coerced to accept more compensatory time than an
employer can realistically and in good
faith expect to be able to grant within
a reasonable period of his or her making a request for use of such time.
(c) Reasonable period. (1) Whether a
request to use compensatory time has
been granted within a ‘‘reasonable period’’ will be determined by considering the customary work practices
within the agency based on the facts
and circumstances in each case. Such
practices include, but are not limited
to (a) the normal schedule of work, (b)
anticipated peak workloads based on
past experience, (c) emergency requirements for staff and services, and (d) the
availability of qualified substitute
staff.
(2) The use of compensatory time in
lieu of cash payment for overtime must
be pursuant to some form of agreement
or understanding between the employer
and the employee (or the representative of the employee) reached prior to
the performance of the work. (See
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§ 553.27
§ 553.23.) To the extent that the (conditions under which an employee can
take compensatory time off are contained in an agreement or understanding as defined in § 553.23, the
terms of such agreement or understanding will govern the meaning of
‘‘reasonable period’’.
(d) Unduly disrupt. When an employer
receives a request for compensatory
time off, it shall be honored unless to
do so would be ‘‘unduly disruptive’’ to
the agency’s operations. Mere inconvenience to the employer is an insufficient basis for denial of a request for
compensatory time off. (See H. Rep. 99–
331, p. 23.) For an agency to turn down
a request from an employee for compensatory time off requires that it
should reasonably and in good faith anticipate that it would impose an unreasonable burden on the agency’s ability
to provide services of acceptable quality and quantity for the public during
the time requested without the use of
the employee’s services.
[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23,
1987]
§ 553.26 Cash overtime payments.
(a) Overtime compensation due under
section 7 may be paid in cash at the
employer’s option, in lieu of providing
compensatory time off under section
7(o) of the Act in any workweek or
work period. The FLSA does not prohibit an employer from freely substituting cash, in whole or part, for
compensatory time off; and overtime
payment in cash would not affect subsequent granting of compensatory time
off in future workweeks or work periods. (See § 553.23(a)(2).)
(b) The principles for computing cash
overtime pay are contained in 29 CFR
part 778. Cash overtime compensation
must be paid at a rate not less than one
and one-half times the regular rate at
which the employee is actually paid.
(See 29 CFR 778.107.)
(c) In a workweek or work period
during which an employee works hours
which are overtime hours under FLSA
and for which cash overtime payment
will be made, and the employee also
takes compensatory time off, the payment for such time off may be excluded
from the regular rate of pay under section 7(e)(2) of the Act. Section 7(e)(2)
provides that the regular rate shall not
be deemed to include
. . . payments made for occasional periods
when no work is performed due to vacation,
holiday, . . . or other similar cause.
As explained in 29 CFR 778.218(d), the
term ‘‘other similar cause’’ refers to
payments made for periods of absence
due to factors like holidays, vacations,
illness, and so forth. Payments made to
an employee for periods of absence due
to the use of accrued compensatory
time are considered to be the type of
payments in this ‘‘other similar cause’’
category.
§ 553.27 Payments for unused compensatory time.
(a) Payments for accrued compensatory time earned after April 14, 1986,
may be made at any time and shall be
paid at the regular rate earned by the
employee at the time the employee receives such payment.
(b) Upon termination of employment,
an employee shall be paid for unused
compensatory time earned after April
14, 1986, at a rate of compensation not
less than—
(1) The average regular rate received
by such employee during the last 3
years of the employee’s employment,
or
(2) The final regular rate received by
such employee, whichever is higher.
(c) The phrase last 3 years of employment means the 3-year period immediately prior to termination. Where an
employee’s last 3 years of employment
are not continuous because of a break
in service, the period of employment
after the break in service will be treated as new employment. However, such
a break in service must have been intended to be permanent and any accrued compensatory time earned after
April 14, 1986, must have been cashed
out at the time of initial separation.
Where the final period of employment
is less than 3 years, the average rate
still must be calculated based on the
rate(s) in effect during such period.
(d) The term ‘‘regular rate’’ is defined in 29 CFR 778.108. As indicated in
§ 778.109, the regular rate is an hourly
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§ 553.28
29 CFR Ch. V (7–1–19 Edition)
rate, although the FLSA does not require employers to compensate employees on an hourly basis.
[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23,
1987]
§ 553.28 Other compensatory time.
(a) Compensatory time which is
earned and accrued by an employee for
employment in excess of a nonstatutory (that is, non-FLSA) requirement
is considered ‘‘other’’ compensatory
time. The term ‘‘other’’ compensatory
time off means hours during which an
employee is not working and which are
not counted as hours worked during
the period when used. For example, a
collective bargaining agreement may
provide that compensatory time be
granted to employees for hours worked
in excess of 8 in a day, or for working
on a scheduled day off in a nonovertime workweek. The FLSA does
not require compensatory time to be
granted in such situations.
(b) Compensatory time which is
earned and accrued by an employee
working hours which are ‘‘overtime’’
hours under State or local law, ordinance, or other provisions, but which
are not overtime hours under section 7
of the FLSA is also considered ‘‘other’’
compensatory time. For example, a
local law or ordinance may provide
that compensatory time be granted to
employees for hours worked in excess
of 35 in a workweek. Under section 7(a)
of the FLSA, only hours worked in excess of 40 in a workweek are overtime
hours which must be compensated at
one and one-half times the regular rate
of pay.
(c) Similarly, compensatory time
earned or accrued by an employee for
employment in excess of a standard established by the personnel policy or
practice of an employer, or by custom,
which does not result from the FLSA
provision, is another example of
‘‘other’’ compensatory time.
(d) The FLSA does not require that
the rate at which ‘‘other’’ compensatory time is earned has to be at a
rate of one and one-half hours for each
hour of employment. The rate at which
‘‘other’’ compensatory time is earned
may be some lesser or greater multiple
of the rate or the straight-time rate
itself.
(e) The requirements of section 7(o)
of the FLSA, including the limitations
on accrued compensatory time, do not
apply to ‘‘other’’ compensatory time as
described above.
OTHER EXEMPTIONS
§ 553.30 Occasional or sporadic
ployment-section 7(p)(2).
(a) Section 7(p)(2) of the FLSA provides that where State or local government employees, solely at their option,
work occasionally or sporadically on a
part-time basis for the same public
agency in a different capacity from
their regular employment, the hours
worked in the different jobs shall not
be combined for the purpose of determining overtime liability under the
Act.
(b) Occasional or sporadic. (1) The
term occasional or sporadic means infrequent, irregular, or occurring in scattered instances. There may be an occasional need for additional resources in
the delivery of certain types of public
services which is at times best met by
the part-time employment of an individual who is already a public employee. Where employees freely and
solely at their own option enter into
such activity, the total hours worked
will not be combined for purposes of determining any overtime compensation
due on the regular, primary job. However, in order to prevent overtime
abuse, such hours worked are to be excluded from computing overtime compensation due only where the occasional or sporadic assignments are not
within the same general occupational
category as the employee’s regular
work.
(2) In order for an employee’s occasional or sporadic work on a part-time
basis to qualify for exemption under
section 7(p)(2), the employee’s decision
to work in a different capacity must be
made freely and without coercion, implicit or explicit, by the employer. An
employer may suggest that an employee undertake another kind of work
for the same unit of government when
the need for assistance arises, but the
employee must be free to refuse to perform such work without sanction and
without being required to explain or
justify the decision.
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Wage and Hour Division, Labor
§ 553.31
(3) Typically, public recreation and
park facilities, and stadiums or auditoriums utilize employees in occasional
or sporadic work. Some of these employment activities are the taking of
tickets, providing security for special
events (e.g., concerts, sports events,
and lectures), officiating at youth or
other recreation and sports events, or
engaging in food or beverage sales at
special events, such as a county fair.
Employment in such activity may be
considered occasional or sporadic for
regular employees of State or local
government agencies even where the
need can be anticipated because it recurs seasonally (e.g., a holiday concert
at a city college, a program of scheduled sports events, or assistance by a
city payroll clerk in processing returns
at tax filing time). An activity does
not fail to be occasional merely because it is recurring. In contrast, for
example, if a parks department clerk,
in addition to his or her regular job,
also regularly works additional hours
on a part-time basis (e.g., every week
or every other week) at a public park
food and beverage sales center operated
by that agency, the additional work
does not constitute intermittent and
irregular employment and, therefore,
the hours worked would be combined in
computing any overtime compensation
due.
(c) Different capacity. (1) In order for
employment in these occasional or sporadic activities not to be considered
subject to the overtime requirements
of section 7 of the FLSA, the regular
government employment of the individual performing them must also be in
a different capacity, i.e., it must not
fall within the same general occupational category.
(2) In general, the Administrator will
consider the duties and other factors
contained in the definitions of the 3digit categories of occupations in the
Dictionary of Occupational Titles (except
in the case of public safety employees
as discussed below in section (3)), as
well as all the facts and circumstances
in a particular case, in determining
whether employment in a second capacity is substantially different from
the regular employment.
(3) For example, if a public park employee primarily engaged in play-
ground maintenance also from time to
time cleans an evening recreation center operated by the same agency, the
additional work would be considered
hours worked for the same employer
and subject to the Act’s overtime requirements because it is not in a different capacity. This would be the case
even though the work was occasional or
sporadic, and, was not regularly scheduled. Public safety employees taking
on any kind of security or safety function within the same local government
are never considered to be employed in
a different capacity.
(4) However, if a bookkeeper for a
municipal park agency or a city mail
clerk occasionally referees for an adult
evening basketball league sponsored by
the city, the hours worked as a referee
would be considered to be in a different
general occupational category than the
primary employment and would not be
counted as hours worked for overtime
purposes on the regular job. A person
regularly employed as a bus driver may
assist in crowd control, for example, at
an event such as a winter festival, and
in doing so, would be deemed to be
serving in a different capacity.
(5) In addition, any activity traditionally associated with teaching (e.g.,
coaching, career counseling, etc.) will
not be considered as employment in a
different capacity. However, where personnel other than teachers engage in
such teaching-related activities, the
work will be viewed as employment in
a different capacity, provided that these
activities are performed on an occasional or sporadic basis and all other
requirements for this provision are
met. For example, a school secretary
could substitute as a coach for a basketball team or a maintenance engineer could provide instruction on auto
repair on an occasional or sporadic
basis.
§ 553.31
Substitution—section 7(p)(3).
(a) Section 7(p)(3) of the FLSA provides that two individuals employed in
any occupation by the same public
agency may agree, solely at their option and with the approval of the public agency, to substitute for one another during scheduled work hours in
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§ 553.32
29 CFR Ch. V (7–1–19 Edition)
performance of work in the same capacity. The hours worked shall be excluded by the employer in the calculation of the hours for which the substituting employee would otherwise be
entitled to overtime compensation
under the Act. Where one employee
substitutes for another, each employee
will be credited as if he or she had
worked his or her normal work schedule for that shift.
(b) The provisions of section 7(p)(3)
apply only if employees’ decisions to
substitute for one another are made
freely and without coercion, direct or
implied. An employer may suggest that
an employee substitute or ‘‘trade
time’’ with another employee working
in the same capacity during regularly
scheduled hours, but each employee
must be free to refuse to perform such
work without sanction and without
being required to explain or justify the
decision. An employee’s decision to
substitute will be considered to have
been made at his/her sole option when
it has been made (i) without fear of reprisal or promise of reward by the employer, and (ii) exclusively for the employee’s own convenience.
(c) A public agency which employs
individuals who substitute or ‘‘trade
time’’ under this subsection is not required to keep a record of the hours of
the substitute work.
(d) In order to qualify under section
7(p)(3), an agreement between individuals employed by a public agency to
substitute for one another at their own
option must be approved by the agency. This requires that the agency be
aware of the arrangement prior to the
work being done, i.e., the employer
must know what work is being done, by
whom it is being done, and where and
when it is being done. Approval is
manifest when the employer is aware
of the substitution and indicates approval in whatever manner is customary.
§ 553.32
Other FLSA exemptions.
(a) There are other exemptions from
the minimum wage and/or overtime requirements of the FLSA which may
apply to certain employees of public
agencies. The following sections provide a discussion of some of the major
exemptions which may be applicable.
This list is not comprehensive.
(b) Section 7(k) of the Act provides a
partial overtime pay exemption for
public agency employees employed in
fire protection or law enforcement activities (including security personnel
in correctional institutions). In addition, section 13(b)(20) provides a complete overtime pay exemption for any
employee of a public agency engaged in
fire protection or law enforcement activities, if the public agency employs
less than five employees in such activities. (See subpart C of this part.)
(c) Section 13(a)(1) of the Act provides an exemption from both the minimum wage and overtime pay requirements for any employee employed in a
bona fide executive, administrative,
professional, or outside sales capacity,
as these terms are defined and delimited in part 541 of this title. An employee will qualify for exemption if he
or she meets all of the pertinent tests
relating to duties, responsibilities, and
salary.
(d) Section 7(j) of the Act provides
that a hospital or residential care establishment may, pursuant to a prior
agreement or understanding with an
employee or employees, adopt a fixed
work period of 14 consecutive days for
the purpose of computing overtime pay
in lieu of the regular 7-day workweek.
Workers employed under section 7(j)
must receive not less than one and onehalf times their regular rates of pay for
all hours worked over 8 in any workday, and over 80 in the 14-day work period. (See § 778.601 of this title.)
(e) Section 13(a)(3) of the Act provides a minimum wage and overtime
pay exemption for any employee employed by an amusement or recreational establishment if (1) it does
not operate for more than 7 months in
any calendar year or (2) during the preceding calendar year, its average receipts for any 6 months of such year
were not more than 331⁄3 percent of its
average receipts for the other 6 months
of such year. In order to meet the requirements of section 13(a)(3)(B), the
establishment in the previous year
must have received at least 75 percent
of its income within 6 months. The 6
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Wage and Hour Division, Labor
§ 553.100
months, however, need not be 6 consecutive months. State and local governments operate parks and recreational areas to which this exemption may apply.
(f) Section 13(b)(1) of the Act provides
an exemption from the overtime pay
requirements for ‘‘Any employee with
respect to whom the Secretary of
Transportation has power to establish
qualifications and maximum hours of
service pursuant to the provisions of
section 204 of the Motor Carrier Act,
1935.’’ (recodified at section 3102, 49
U.S.C.). With regard to State or local
governments, this overtime pay exemption may affect mass transit systems
engaged in interstate commerce. This
exemption is applicable to drivers,
driver’s helpers, loaders, and mechanics employed by a common carrier
whose activities directly affect the
safety of operation of motor vehicles in
the transportation on the public highways of passengers or property. (See
part 782 of this title.)
(g) Section 7(n) of the Act provides
that, for the purpose of computing
overtime pay, the hours of employment
of a mass transit employee do not include the time spent in charter activities if (1) pursuant to a prior agreement the time is not to be so counted,
and (2) such charter activities are not a
part of the employee’s regular employment.
(h) Additional overtime pay exemptions which may apply to emloyees of
public agencies are contained in sections 13(b)(2) (employees of certain
common carriers by rail), 13(b)(9) (certain employees of small market radio
and television stations), and section
13(b)(12) (employees in agriculture) of
the Act. Further, section 13(a)(6) of the
Act provides a minimum wage and
overtime pay exemption for agricultural employees who work on small
farms. (See part 780 of this title.)
RECORDKEEPING
§ 553.50 Records to be kept of compensatory time.
For each employee subject to the
compensatory time and compensatory
time off provisions of section 7(o) of
the Act, a public agency which is a
State, a political subdivision of a State
or an interstate governmental agency
shall maintain and preserve records
containing the basic information and
data required by § 516.2 of this title and,
in addition:
(a) The number of hours of compensatory time earned pursuant to section
7(o) each workweek, or other applicable work period, by each employee at
the rate of one and one-half hour for
each overtime hour worked;
(b) The number of hours of such compensatory time used each workweek, or
other applicable work period, by each
employee;
(c) The number of hours of compensatory time compensated in cash, the
total amount paid and the date of such
payment; and
(d) Any collective bargaining agreement or written understanding or
agreement with respect to earning and
using compensatory time off. If such
agreement or understanding is not in
writing, a record of its existence must
be kept.
§ 553.51 Records to be kept for employees paid pursuant to section 7(k).
For each employee subject to the
partial overtime exemption in section
7(k) of the Act, a public agency which
is a State, a political subdivision of a
State, or an interstate governmental
agency shall maintain and preserve
records containing the information and
data required by § 553.50 and, in addition, make some notation on the payroll records which shows the work period for each employee and which indicates the length of that period and its
starting time. If all the workers (or
groups of workers) have a work period
of the same length beginning at the
same time on the same day, a single
notation of the time of day and beginning day of the work period will suffice
for these workers.
Subpart B—Volunteers
§ 553.100 General.
Section 3(e) of the Fair Labor Standards Act, as amended in 1985, provides
that individuals performing volunteer
services for units of State and local
governments will not be regarded as
‘‘employees’’ under the statute. The
purpose of this subpart is to define the
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§ 553.101
29 CFR Ch. V (7–1–19 Edition)
circumstances under which individuals
may perform hours of volunteer service
for units of State and local governments without being considered to be
their employees during such hours for
purposes of the FLSA.
§ 553.101 ‘‘Volunteer’’ defined.
(a) An individual who performs hours
of service for a public agency for civic,
charitable, or humanitarian reasons,
without promise, expectation or receipt of compensation for services rendered, is considered to be a volunteer
during such hours. Individuals performing hours of service for such a public agency will be considered volunteers for the time so spent and not subject to sections 6, 7, and 11 of the FLSA
when such hours of service are performed in accord with sections 3(e)(4)
(A) and (B) of the FLSA and the guidelines in this subpart.
(b) Congress did not intend to discourage or impede volunteer activities
undertaken for civic, charitable, or humanitarian purposes, but expressed its
wish to prevent any manipulation or
abuse of minimum wage or overtime
requirements through coercion or
undue pressure upon individuals to
‘‘volunteer’’ their services.
(c) Individuals shall be considered
volunteers only where their services
are offered freely and without pressure
or coercion, direct or implied, from an
employer.
(d) An individual shall not be considered a volunteer if the individual is
otherwise employed by the same public
agency to perform the same type of
services as those for which the individual proposes to volunteer.
§ 553.102 Employment by the same
public agency.
(a) Section 3(e)(4)(A)(ii) of the FLSA
does not permit an individual to perform hours of volunteer service for a
public agency when such hours involve
the same type of services which the individual is employed to perform for the
same public agency.
(b) Whether two agencies of the same
State or local government constitute
the same public agency can only be determined on a case-by-case basis. One
factor that would support a conclusion
that two agencies are separate is
whether they are treated separately for
statistical purposes in the Census of
Governments issued by the Bureau of
the Census, U.S. Department of Commerce.
§ 553.103 ‘‘Same type of services’’ defined.
(a) The 1985 Amendments provide
that employees may volunteer hours of
service to their public employer or
agency provided ‘‘such services are not
the same type of services which the individual is employed to perform for
such public agency.’’ Employees may
volunteer their services in one capacity
or another without contemplation of
pay for services rendered. The phrase
‘‘same type of services’’ means similar
or identical services. In general, the
Administrator will consider, but not as
the only criteria, the duties and other
factors contained in the definitions of
the 3-digit categories of occupations in
the Dictionary of Occupational Titles in
determining whether the volunteer activities constitute the ‘‘same type of
services’’ as the employment activities. Equally important in such a determination will be the consideration
of all the facts and circumstances in a
particular case, including whether the
volunteer service is closely related to
the actual duties performed by or responsibilities assigned to the employee.
(b) An example of an individual performing services which constitute the
‘‘same type of services’’ is a nurse employed by a State hospital who proposes to volunteer to perform nursing
services at a State-operated health
clinic which does not qualify as a separate public agency as discussed in
§ 553.102. Similarly, a firefighter cannot
volunteer as a firefighter for the same
public agency.
(c) Examples of volunteer services
which do not constitute the ‘‘same
type of services’’ include: A city police
officer who volunteers as a part-time
referee in a basketball league sponsored by the city; an employee of the
city parks department who serves as a
volunteer city firefighter; and an office
employee of a city hospital or other
health care institution who volunteers
to spend time with a disabled or elderly
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Wage and Hour Division, Labor
§ 553.106
person in the same institution during
off duty hours as an act of charity.
§ 553.104 Private individuals who volunteer services to public agencies.
(a) Individuals who are not employed
in any capacity by State or local government agencies often donate hours of
service to a public agency for civic or
humanitarian reasons. Such individuals are considered volunteers and not
employees of such public agencies if
their hours of service are provided with
no promise expectation, or receipt of
compensation for the services rendered, except for reimbursement for expenses, reasonable benefits, and nominal fees, or a combination thereof, as
discussed in § 553.106. There are no limitations or restrictions imposed by the
FLSA on the types of services which
private individuals may volunteer to
perform for public agencies.
(b) Examples of services which might
be performed on a volunteer basis when
so motivated include helping out in a
sheltered workshop or providing personal services to the sick or the elderly
in hospitals or nursing homes; assisting in a school library or cafeteria; or
driving a school bus to carry a football
team or band on a trip. Similarly, individuals may volunteer as firefighters
or auxiliary police, or volunteer to perform such tasks as working with retarded or handicapped children or disadvantaged youth, helping in youth
programs as camp counselors, soliciting contributions or participating in
civic or charitable benefit programs
and volunteering other services needed
to carry out charitable or educational
programs.
[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23,
1987]
§ 553.105 Mutual aid agreements.
An agreement between two or more
States, political subdivisions, or interstate governmental agencies for mutual aid does not change the otherwise
volunteer character of services performed by employees of such agencies
pursuant to said agreement. For example, where Town A and Town B have
entered into a mutual aid agreement
related to fire protection, a firefighter
employed by Town A who also is a volunteer firefighter for Town B will not
have his or her hours of volunteer service for Town B counted as part of his or
her hours of employment with Town A.
The mere fact that services volunteered to Town B may in some instances involve performance in Town
A’s geographic jurisdiction does not require that the volunteer’s hours are to
be counted as hours of employment
with Town A.
§ 553.106 Payment of expenses, benefits, or fees.
(a) Volunteers may be paid expenses,
reasonable benefits, a nominal fee, or
any combination thereof, for their
service without losing their status as
volunteers.
(b) An individual who performs hours
of service as a volunteer for a public
agency may receive payment for expenses without being deemed an employee for purposes of the FLSA. A
school guard does not become an employee because he or she receives a uniform allowance, or reimbursement for
reasonable cleaning expenses or for
wear and tear on personal clothing
worn while performing hours of volunteer service. (A uniform allowance
must be reasonably limited to relieving
the volunteer of the cost of providing
or maintaining a required uniform
from personal resources.) Such individuals would not lose their volunteer status because they are reimbursed for the
approximate out-of-pocket expenses incurred incidental to providing volunteer services, for example, payment for
the cost of meals and transportation
expenses.
(c) Individuals do not lose their status as volunteers because they are reimbursed for tuition, transportation
and meal costs involved in their attending classes intended to teach them
to perform efficiently the services they
provide or will provide as volunteers.
Likewise, the volunteer status of such
individuals is not lost if they are provided books, supplies, or other materials essential to their volunteer training or reimbursement for the cost
thereof.
(d) Individuals do not lose their volunteer status if they are provided reasonable benefits by a public agency for
whom they perform volunteer services.
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§ 553.200
29 CFR Ch. V (7–1–19 Edition)
Benefits would be considered reasonable, for example, when they involve
inclusion of individual volunteers in
group insurance plans (such as liability, health, life, disability, workers’
compensation) or pension plans or
‘‘length of service’’ awards, commonly
or traditionally provided to volunteers
of State and local government agencies, which meet the additional test in
paragraph (f) of this section.
(e) Individuals do not lose their volunteer status if they receive a nominal
fee from a public agency. A nominal fee
is not a substitute for compensation
and must not be tied to productivity.
However, this does not preclude the
payment of a nominal amount on a
‘‘per call’’ or similar basis to volunteer
firefighters. The following factors will
be among those examined in determining whether a given amount is
nominal: The distance traveled and the
time and effort expended by the volunteer; whether the volunteer has agreed
to be available around-the-clock or
only during certain specified time periods; and whether the volunteer provides services as needed or throughout
the year. An individual who volunteers
to provide periodic services on a yearround basis may receive a nominal
monthly or annual stipend or fee without losing volunteer status.
(f) Whether the furnishing of expenses, benefits, or fees would result in
individuals’ losing their status as volunteers under the FLSA can only be
determined by examining the total
amount of payments made (expenses,
benefits, fees) in the context of the economic realities of the particular situation.
Subpart C—Fire Protection and
Law Enforcement Employees
of Public Agencies
GENERAL PRINCIPLES
§ 553.200 Statutory provisions: section
13(b)(20).
(a) Section 13(b)(20) of the FLSA provides a complete overtime pay exemption for ‘‘any employee of a public
agency who in any workweek is employed in fire protection activities or
any employee of a public agency who in
any workweek is employed in law en-
forcement activities (including security personnel in correctional institutions), if the public agency employs
during the workweek less than 5 employees in fire protection or law enforcement activities, as the case may
be.’’
(b) In determining whether a public
agency qualifies for the section
13(b)(20) exemption, the fire protection
and law enforcement activities are considered separately. Thus, if a public
agency employs less than five employees in fire protection activities, but
five or more employees in law enforcement activities (including security personnel in a correctional institution), it
may claim the exemption for the fire
protection employees but not for the
law enforcement employees. No distinction is made between full-time and
part-time employees, or between employees on duty and employees on
leave status, and all such categories
must be counted in determining whether the exemption applies. Individuals
who are not considered ‘‘employees’’
for purposes of the FLSA by virtue of
section 3(e) of the Act (including persons who are ‘‘volunteers’’ within the
meaning of § 553.101, and ‘‘elected officials and their appointees’’ within the
meaning of § 553.11) are not counted in
determining
whether
the
section
13(b)(20) exemption applies.
(c) The section 13(b)(20) exemption
applies on a workweek basis. It is
therefore possible that employees may
be subject to maximum hours standard
in certain workweeks, but not in others. In those workweeks in which the
section 13(b)(20) exemption does not
apply, the public agency is entitled to
utilize the section 7(k) exemption
which is explained below in § 553.201.
[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23,
1987]
§ 553.201
7(k).
Statutory provisions: section
(a) Section 7(k) of the Act provides a
partial overtime pay exemption for fire
protection and law enforcement personnel (including security personnel in
correctional institutions) who are employed by public agencies on a work period basis. This section of the Act formerly permitted public agencies to pay
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Wage and Hour Division, Labor
§ 553.211
overtime compensation to such employees in work periods of 28 consecutive days only after 216 hours of work.
As further set forth in § 553.230 of this
part, the 216-hour standard has been replaced, pursuant to the study mandated by the statute, by 212 hours for
fire protection employees and 171 hours
for law enforcement employees. In the
case of such employees who have a
work period of at least 7 but less than
28 consecutive days, overtime compensation is required when the ratio of
the number of hours worked to the
number of days in the work period exceeds the ratio of 212 (or 171) hours to
28 days.
(b) As specified in §§ 553.20 through
553.28 of subpart A, workers employed
under section 7(k) may, under certain
conditions, be compensated for overtime hours worked with compensatory
time off rather than immediate overtime premium pay.
§ 553.202 Limitations.
The application of sections 13(b)(20)
and 7(k), by their terms, is limited to
public agencies, and does not apply to
any private organization engaged in
furnishing fire protection or law enforcement services. This is so even if
the services are provided under contract with a public agency.
EXEMPTION REQUIREMENTS
§ 553.210 Fire protection activities.
(a) As used in sections 7(k) and
13(b)(20) of the Act, the term ‘‘any employee * * * in fire protection activities’’ refers to ‘‘an employee, including
a firefighter, paramedic, emergency
medical technician, rescue worker, ambulance personnel, or hazardous materials worker, who—(1) is trained in fire
suppression, has the legal authority
and responsibility to engage in fire
suppression, and is employed by a fire
department of a municipality, county,
fire district, or State; and (2) is engaged in the prevention, control, and
extinguishment of fires or response to
emergency situations where life, property, or the environment is at risk.’’
(b) Not included in the term ‘‘employee in fire protection activities’’ are
the so-called ‘‘civilian’’ employees of a
fire department, fire district, or for-
estry service who engage in such support activities as those performed by
dispatchers, alarm operators, apparatus and equipment repair and maintenance workers, camp cooks, clerks,
stenographers, etc.
[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23,
1987, as amended at 76 FR 18856, Apr. 5, 2011]
§ 553.211 Law enforcement activities.
(a) As used in sections 7(k) and
13(b)(20) of the Act, the term ‘‘any employee . . . in law enforcement activities’’ refers to any employee (1) who is
a uniformed or plainclothed member of
a body of officers and subordinates who
are empowered by State statute or
local ordinance to enforce laws designed to maintain public peace and
order and to protect both life and property from accidental or willful injury,
and to prevent and detect crimes, (2)
who has the power to arrest, and (3)
who is presently undergoing or has undergone or will undergo on-the-job
training and/or a course of instruction
and study which typically includes
physical training, self-defense, firearm
proficiency, criminal and civil law
principles, investigative and law enforcement techniques, community relations, medical aid and ethics.
(b) Employees who meet these tests
are considered to be engaged in law enforcement activities regardless of their
rank, or of their status as ‘‘trainee,’’
‘‘probationary,’’ or ‘‘permanent,’’ and
regardless of their assignment to duties incidental to the performance of
their law enforcement activities such
as equipment maintenance, and lecturing, or to support activities of the
type described in paragraph (g) of this
section, whether or not such assignment is for training or familiarization
purposes, or for reasons of illness, injury or infirmity. The term would also
include rescue and ambulance service
personnel if such personnel form an integral part of the public agency’s law
enforcement activities. See § 553.215.
(c) Typically, employees engaged in
law enforcement activities include city
police; district or local police, sheriffs,
under sheriffs or deputy sheriffs who
are regularly employed and paid as
such; court marshals or deputy marshals; constables and deputy constables
who are regularly employed and paid as
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§ 553.211
29 CFR Ch. V (7–1–19 Edition)
such; border control agents; state
troopers and highway patrol officers.
Other agency employees not specifically mentioned may, depending upon
the particular facts and pertinent statutory provisions in that jurisdiction,
meet the three tests described above. If
so, they will also qualify as law enforcement officers. Such employees
might include, for example, fish and
game wardens or criminal investigative agents assigned to the office of a
district attorney, an attorney general,
a solicitor general or any other law enforcement agency concerned with keeping public peace and order and protecting life and property.
(d) Some of the law enforcement officers listed above, including but not
limited to certain sheriffs, will not be
covered by the Act if they are elected
officials and if they are not subject to
the civil service laws of their particular State or local jurisdiction. Section 3(e)(2)(C) of the Act excludes from
its definition of ‘‘employee’’ elected officials and their personal staff under
the conditions therein prescribed. 29
U.S.C. 203(e)(2)(C), and see § 553.11. Such
individuals, therefore, need not be
counted in determining whether the
public agency in question has less than
five employees engaged in law enforcement activities for purposes of claiming the section 13(b)(20) exemption.
(e) Employees who do not meet each
of the three tests described above are
not engaged in ‘‘law enforcement activities’’ as that term is used in sections 7(k) and 13(b)(20). Employees who
normally would not meet each of these
tests include
(1) Building inspectors (other than
those defined in § 553.213(a)),
(2) Health inspectors,
(3) Animal control personnel,
(4) Sanitarians,
(5) civilian traffic employees who direct vehicular and pedestrian traffic at
specified intersections or other control
points,
(6) Civilian parking checkers who patrol assigned areas for the purpose of
discovering parking violations and
issuing appropriate warnings or appearance notices,
(7) Wage and hour compliance officers,
(8) Equal employment opportunity
compliance officers,
(9) Tax compliance officers,
(10) Coal mining inspectors, and
(11) Building guards whose primary
duty is to protect the lives and property of persons within the limited area
of the building.
(f) The term ‘‘any employee in law
enforcement activities’’ also includes,
by express reference, ‘‘security personnel in correctional instititions.’’ A
correctional institution is any government facility maintained as part of a
penal system for the incarceration or
detention of persons suspected or convicted of having breached the peace or
committed some other crime. Typically, such facilities include penitentiaries, prisons, prison farms, county,
city and village jails, precinct house
lockups and reformatories. Employees
of correctional institutions who qualify
as security personnel for purposes of
the section 7(k) exemption are those
who have responsibility for controlling
and maintaining custody of inmates
and of safeguarding them from other
inmates or for supervising such functions, regardless of whether their duties are performed inside the correctional institution or outside the institution (as in the case of road gangs).
These employees are considered to be
engaged in law enforcement activities
regardless of their rank (e.g., warden,
assistant warden or guard) or of their
status as ‘‘trainee,’’ ‘‘probationary,’’ or
‘‘permanent,’’ and regardless of their
assignment to duties incidental to the
performance of their law enforcement
activities, or to support activities of
the type described in paragraph (g) of
this section, whether or not such assignment is for training or familiarization purposes or for reasons of illness,
injury or infirmity.
(g) Not included in the term ‘‘employee in law enforcement activities’’
are the so-called ‘‘civilian’’ employees
of law enforcement agencies or correctional institutions who engage in such
support activities as those performed
by dispatcher, radio operators, apparatus and equipment maintenance and
repair workers, janitors, clerks and
stenographers. Nor does the term include employees in correctional institutions who engage in building repair
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§ 553.216
and maintenance, culinary services,
teaching, or in psychological, medical
and paramedical services. This is so
even though such employees may,
when assigned to correctional institutions, come into regular contact with
the inmates in the performance of their
duties.
§ 553.212 Twenty percent limitation on
nonexempt work.
(a) Employees engaged in law enforcement activities as described in
§ 553.211 may also engage in some nonexempt work which is not performed as
an incident to or in conjunction with
their law enforcement activities. The
performance of such nonexempt work
will not defeat either the section
13(b)(20) or 7(k) exemptions unless it
exceeds 20 percent of the total hours
worked by that employee during the
workweek or applicable work period. A
person who spends more than 20 percent of his/her working time in nonexempt activities is not considered to
be an employee engaged in law enforcement activities for purposes of this
part.
(b) Public agency fire protection and
law enforcement personnel may, at
their own option, undertake employment for the same employer on an occasional or sporadic and part-time
basis in a different capacity from their
regular employment. (See § 553.30.) The
performance of such work does not affect the application of the section
13(b)(20) or 7(k) exemptions with respect to the regular employment. In
addition, the hours of work in the different capacity need not be counted as
hours worked for overtime purposes on
the regular job, nor are such hours
counted in determining the 20 percent
tolerance for nonexempt work for law
enforcement personnel discussed in
paragraph (a) of this section.
[52 FR 2032, Jan. 16, 1987, as amended at 76
FR 18856, Apr. 5, 2011]
§ 553.213 Public agency employees engaged in both fire protection and
law enforcement activities.
(a) Some public agencies have employees (often called ‘‘public safety officers’’) who engage in both fire protection and law enforcement activities,
depending on the agency needs at the
time. This dual assignment would not
defeat either the section 13(b)(20) or
7(k) exemption, provided that each of
the activities performed meets the appropriate tests set forth in §§ 553.210
and 553.211. This is so regardless of how
the employee’s time is divided between
the two activities. However, all time
spent in nonexempt activities by public
safety officers within the work period,
whether performed in connection with
fire protection or law enforcement
functions, or with neither, must be
combined for purposes of the 20 percent
limitation on nonexempt work discussed in § 553.212.
(b) As specified in § 553.230, the maximum hours standards under section
7(k) are different for employees engaged in fire protection and for employees engaged in law enforcement.
For those employees who perform both
fire protection and law enforcement activities, the applicable standard is the
one which applies to the activity in
which the employee spends the majority of work time during the work period.
§ 553.214 Trainees.
The attendance at a bona fide fire or
police academy or other training facility, when required by the employing
agency, constitutes engagement in activities under section 7(k) only when
the employee meets all the applicable
tests described in § 553.210 or § 553.211
(except for the power of arrest for law
enforcement personnel), as the case
may be. If the applicable tests are met,
then basic training or advanced training is considered incidental to, and
part of, the employee’s fire protection
or law enforcement activities.
§ 553.215
[Reserved]
§ 553.216 Other exemptions.
Although the 1974 Amendments to
the FLSA provided special exemptions
for employees of public agencies engaged in fire protection and law enforcement activities, such workers may
also be subject to other exemptions in
the Act, and public agencies may claim
such other applicable exemptions in
lieu of sections 13(b)(20) and 7(k). For
example, section 13(a)(1) provides a
complete minimum wage and overtime
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§ 553.220
29 CFR Ch. V (7–1–19 Edition)
pay exemption for any employee employed in a bona fide executive, administrative, or professional capacity, as
those terms are defined and delimited
in 29 CFR part 541. The section 13(a)(1)
exemption can be claimed for any fire
protection or law enforcement employee who meets all of the tests specified in part 541 relating to duties, responsibilities, and salary. Thus, high
ranking police officials who are engaged in law enforcement activities,
may also, depending on the facts, qualify for the section 13(a)(1) exemption as
‘‘executive’’ employees. Similarly, certain criminal investigative agents may
qualify as ‘‘administrative’’ employees
under section 13(a)(1). However, the
election to take the section 13(a)(1) exemption for an employee who qualifies
for it will not result in excluding that
employee from the count that must be
made to determine the application of
the section 13(b)(20) exemption to the
agency’s other employees.
TOUR OF DUTY AND COMPENSABLE HOURS
OF WORK RULES
§ 553.220
‘‘Tour of duty’’ defined.
(a) The term ‘‘tour of duty’’ is a
unique concept applicable only to employees for whom the section 7(k) exemption is claimed. This term, as used
in section 7(k), means the period of
time during which an employee is considered to be on duty for purposes of
determining compensable hours. It
may be a scheduled or unscheduled period. Such periods include ‘‘shifts’’ assigned to employees often days in advance of the performance of the work.
Scheduled periods also include time
spent in work outside the ‘‘shift’’
which the public agency employer assigns. For example, a police officer
may be assigned to crowd control during a parade or other special event outside of his or her shift.
(b) Unscheduled periods include time
spent in court by police officers, time
spent handling emergency situations,
and time spent working after a shift to
complete an assignment. Such time
must be included in the compensable
tour of duty even though the specific
work performed may not have been assigned in advance.
(c) The tour of duty does not include
time spent working for a separate and
independent employer in certain types
of special details as provided in
§ 553.227. The tour of duty does not include time spent working on an occasional or sporadic and part-time basis
in a different capacity from the regular
work as provided in § 553.30. The tour of
duty does not include time spent substituting for other employees by mutual agreement as specified in § 553.31.
(d) The tour of duty does not include
time spent in volunteer firefighting or
law enforcement activities performed
for a different jurisdiction, even where
such activities take place under the
terms of a mutual aid agreement in the
jurisdiction in which the employee is
employed. (See § 553.105.)
§ 553.221 Compensable hours of work.
(a) The general rules on compensable
hours of work are set forth in 29 CFR
part 785 which is applicable to employees for whom the section 7(k) exemption is claimed. Special rules for sleep
time (§ 553.222) apply to both law enforcement and employees in fire protection activities for whom the section
7(k) exemption is claimed. Also, special
rules for meal time apply in the case of
employees in fire protection activities
(§ 553.223). Part 785 does not discuss the
special provisions that apply to State
and local government workers with respect to the treatment of substitution,
special details for a separate and independent employer, early relief, and
work performed on an occasional or
sporadic and part-time basis, all of
which are covered in this subpart.
(b) Compensable hours of work generally include all of the time during
which an employee is on duty on the
employer’s premises or at a prescribed
workplace, as well as all other time
during which the employee is suffered
or permitted to work for the employer.
Such time includes all pre-shift and
post-shift activities which are an integral part of the employee’s principal
activity or which are closely related to
the performance of the principal activity, such as attending roll call, writing
up and completing tickets or reports,
and washing and re-racking fire hoses.
(c) Time spent away from the employer’s premises under conditions that
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§ 553.223
are so circumscribed that they restrict
the employee from effectively using
the time for personal pursuits also constitutes compensable hours of work.
For example, where a police station
must be evacuated because of an electrical failure and the employees are expected to remain in the vicinity and return to work after the emergency has
passed, the entire time spent away
from the premises is compensable. The
employees in this example cannot use
the time for their personal pursuits.
(d) An employee who is not required
to remain on the employer’s premises
but is merely required to leave word at
home or with company officials where
he or she may be reached is not working while on call. Time spent at home
on call may or may not be compensable
depending on whether the restrictions
placed on the employee preclude using
the time for personal pursuits. Where,
for example, an employee in fire protection activities has returned home
after the shift, with the understanding
that he or she is expected to return to
work in the event of an emergency in
the night, such time spent at home is
normally not compensable. On the
other hand, where the conditions
placed on the employee’s activities are
so restrictive that the employee cannot
use the time effectively for personal
pursuits, such time spent on call is
compensable.
(e) Normal home to work travel is
not compensable, even where the employee is expected to report to work at
a location away from the location of
the employer’s premises.
(f) A police officer, who has completed his or her tour of duty and who
is given a patrol car to drive home and
use on personal business, is not working during the travel time even where
the radio must be left on so that the officer can respond to emergency calls.
Of course, the time spent in responding
to such calls is compensable.
(g) The fact that employees cannot
return home after work does not necessarily mean that they continue on
duty after their shift. For example, employees in fire protection activities
working on a forest fire may be transported to a camp after their shift in
order to rest and eat a meal. As a practical matter, the employee in fire pro-
tection activities may be precluded
from going to their homes because of
the distance of the fire from their residences.
[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23,
1987, as amended at 76 FR 18857, Apr. 5, 2011;
82 FR 2229, Jan. 9, 2017]
§ 553.222
Sleep time.
(a) Where a public employer elects to
pay overtime compensation to employees in fire protection activities and/or
law enforcement personnel in accordance with section 7(a)(1) of the Act, the
public agency may exclude sleep time
from hours worked if all the conditions
in § 785.22 of this title are met.
(b) Where the employer has elected
to use the section 7(k) exemption, sleep
time cannot be excluded from the compensable hours of work where
(1) The employee is on a tour of duty
of less than 24 hours, which is the general rule applicable to all employees
under § 785.21, and
(2) Where the employee is on a tour
of duty of exactly 24 hours, which is a
departure from the general rules in
part 785.
(c) Sleep time can be excluded from
compensable hours of work, however,
in the case of police officers or employees in fire protection activities who are
on a tour of duty of more than 24
hours, but only if there is an expressed
or implied agreement between the employer and the employees to exclude
such time. In the absence of such an
agreement, the sleep time is compensable. In no event shall the time excluded as sleep time exceed 8 hours in
a 24-hour period. If the sleep time is interrupted by a call to duty, the interruption must be counted as hours
worked. If the sleep period is interrupted to such an extent that the employee cannot get a reasonable night’s
sleep (which, for enforcement purposes
means at least 5 hours), the entire time
must be counted as hours of work.
[52 FR 2032, Jan. 16, 1987, as amended at 76
FR 18857, Apr. 5, 2011]
§ 553.223
Meal time.
(a) If a public agency elects to pay
overtime compensation to employees
in fire protection activities and law enforcement personnel in accordance
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§ 553.224
29 CFR Ch. V (7–1–19 Edition)
with section 7(a)(1) of the Act, the public agency may exclude meal time from
hours worked if all the tests in § 785.19
of this title are met.
(b) If a public agency elects to use
the section 7(k) exemption, the public
agency may, in the case of law enforcement personnel, exclude meal time
from hours worked on tours of duty of
24 hours or less, provided that the employee is completely relieved from
duty during the meal period, and all
the other tests in § 785.19 of this title
are met. On the other hand, where law
enforcement personnel are required to
remain on call in barracks or similar
quarters, or are engaged in extended
surveillance
activities
(e.g.,
‘‘stakeouts’’), they are not considered
to be completely relieved from duty,
and any such meal periods would be
compensable.
(c) With respect to employees in fire
protection activities employed under
section 7(k), who are confined to a duty
station, the legislative history of the
Act indicates Congressional intent to
mandate a departure from the usual
FLSA ‘‘hours of work’’ rules and adoption of an overtime standard keyed to
the unique concept of ‘‘tour of duty’’
under which employees in fire protection activities are employed. Where the
public agency elects to use the section
7(k) exemption for employees in fire
protection activities, meal time cannot
be excluded from the compensable
hours of work where (1) the employee
in fire protection activities is on a tour
of duty of less than 24 hours, and (2)
where the employee in fire protection
activities is on a tour of duty of exactly 24 hours, which is a departure
from the general rules in § 785.22 of this
title.
(d) In the case of police officers or
employees in fire protection activities
who are on a tour of duty of more than
24 hours, meal time may be excluded
from compensable hours of work provided that the tests in §§ 785.19 and
785.22 of this title are met.
[52 FR 2032, Jan. 16, 1987, as amended at 76
FR 18857, Apr. 5, 2011]
§ 553.224 ‘‘Work period’’ defined.
(a) As used in section 7(k), the term
‘‘work period’’ refers to any established
and regularly recurring period of work
which, under the terms of the Act and
legislative history, cannot be less than
7 consecutive days nor more than 28
consecutive days. Except for this limitation, the work period can be of any
length, and it need not coincide with
the duty cycle or pay period or with a
particular day of the week or hour of
the day. Once the beginning and ending
time of an employee’s work period is
established, however, it remains fixed
regardless of how many hours are
worked within the period. The beginning and ending of the work period
may be changed, provided that the
change is intended to be permanent
and is not designed to evade the overtime compensation requirements of the
Act.
(b) An employer may have one work
period applicable to all employees, or
different work periods for different employees or groups of employees.
§ 553.225 Early relief.
It is a common practice among employees engaged in fire protection activities to relieve employees on the
previous shift prior to the scheduled
starting time. Such early relief time
may occur pursuant to employee agreement, either expressed or implied. This
practice will not have the effect of increasing the number of compensable
hours of work for employees employed
under section 7(k) where it is voluntary
on the part of the employees and does
not result, over a period of time, in
their failure to receive proper compensation for all hours actually
worked. On the other hand, if the practice is required by the employer, the
time involved must be added to the employee’s tour of duty and treated as
compensable hours of work.
§ 553.226 Training time.
(a) The general rules for determining
the compensability of training time
under the FLSA are set forth in
§§ 785.27 through 785.32 of this title.
(b) While time spent in attending
training required by an employer is
normally
considered
compensable
hours of work, following are situations
where time spent by employees of
State and local governments in required training is considered to be noncompensable:
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Wage and Hour Division, Labor
§ 553.227
(1) Attendance outside of regular
working hours at specialized or followup training, which is required by law
for certification of public and private
sector employees within a particular
governmental jurisdiction (e.g., certification of public and private emergency
rescue workers), does not constitute
compensable hours of work for public
employees within that jurisdiction and
subordinate jurisdictions.
(2) Attendance outside of regular
working hours at specialized or followup training, which is required for certification of employees of a governmental jurisdiction by law of a higher
level of government (e.g., where a
State or county law imposes a training
obligation on city employees), does not
constitute compensable hours of work.
(3) Time spent in the training described in paragraphs (b) (1) or (2) of
this section is not compensable, even if
all or part of the costs of the training
is borne by the employer.
(c) Police officers or employees in
fire protection activities, who are in
attendance at a police or fire academy
or other training facility, are not considered to be on duty during those
times when they are not in class or at
a training session, if they are free to
use such time for personal pursuits.
Such free time is not compensable.
[52 FR 2032, Jan. 16, 1987, as amended at 76
FR 18857, Apr. 5, 2011]
§ 553.227 Outside employment.
(a) Section 7(p)(1) makes special provision for fire protection and law enforcement employees of public agencies
who, at their own option, perform special duty work in fire protection, law
enforcement or related activities for a
separate and independent employer
(public or private) during their off-duty
hours. The hours of work for the separate and independent employer are not
combined with the hours worked for
the primary public agency employer
for purposes of overtime compensation.
(b) Section 7(p)(1) applies to such
outside employment provided (1) The
special detail work is performed solely
at the employee’s option, and (2) the
two employers are in fact separate and
independent.
(c) Whether two employers are, in
fact, separate and independent can
only be determined on a case-by-case
basis.
(d) The primary employer may facilitate the employment or affect the conditions of employment of such employees. For example, a police department
may maintain a roster of officers who
wish to perform such work. The department may also select the officers for
special details from a list of those
wishing to participate, negotiate their
pay, and retain a fee for administrative
expenses. The department may require
that the separate and independent employer pay the fee for such services directly to the department, and establish
procedures for the officers to receive
their pay for the special details
through the agency’s payroll system.
Finally, the department may require
that the officers observe their normal
standards of conduct during such details and take disciplinary action
against those who fail to do so.
(e) Section 7(p)(1) applies to special
details even where a State law or local
ordinance requires that such work be
performed and that only law enforcement or fire protection employees of a
public agency in the same jurisdiction
perform the work. For example, a city
ordinance may require the presence of
city police officers at a convention center during concerts or sports events. If
the officers perform such work at their
own option, the hours of work need not
be combined with the hours of work for
their primary employer in computing
overtime compensation.
(f) The principles in paragraphs (d)
and (e) of this section with respect to
special details of public agency fire
protection and law enforcement employees under section 7(p)(1) are exceptions to the usual rules on joint employment set forth in part 791 of this
title.
(g) Where an employee is directed by
the public agency to perform work for
a second employer, section 7(p)(1) does
not apply. Thus, assignments of police
officers outside of their normal work
hours to perform crowd control at a parade, where the assignments are not
solely at the option of the officers,
would not qualify as special details
subject to this exception. This would
be true even if the parade organizers
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§ 553.230
29 CFR Ch. V (7–1–19 Edition)
reimburse the public agency for providing such services.
(h) Section 7(p)(1) does not prevent a
public agency from prohibiting or restricting outside employment by its
employees.
OVERTIME COMPENSATION RULES
§ 553.230 Maximum hours standards
for work periods of 7 to 28 days—
section 7(k).
(a) For those employees engaged in
fire protection activities who have a
work period of at least 7 but less than
28 consecutive days, no overtime compensation is required under section 7(k)
until the number of hours worked exceeds the number of hours which bears
the same relationship to 212 as the
number of days in the work period
bears to 28.
(b) For those employees engaged in
law enforcement activities (including
security personnel in correctional institutions) who have a work period of
at least 7 but less than 28 consecutive
days, no overtime compensation is required under section 7(k) until the
number of hours worked exceeds the
number of hours which bears the same
relationship to 171 as the number of
days in the work period bears to 28.
(c) The ratio of 212 hours to 28 days
for employees engaged in fire protection activities is 7.57 hours per day
(rounded) and the ratio of 171 hours to
28 days for employees engaged in law
enforcement activities is 6.11 hours per
day (rounded). Accordingly, overtime
compensation (in premium pay or compensatory time) is required for all
hours worked in excess of the following
maximum hours standards (rounded to
the nearest whole hour):
Maximum hours standards
Work period (days)
Fire protection
28
27
26
25
24
23
22
21
20
19
18
17
16
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
212
204
197
189
182
174
167
159
151
144
136
129
121
Maximum hours standards
Work period (days)
Fire protection
15 ...............................................
14 ...............................................
13 ...............................................
12 ...............................................
11 ...............................................
10 ...............................................
9 .................................................
8 .................................................
7 .................................................
§ 553.231
171
165
159
153
147
141
134
128
122
116
110
104
98
114
106
98
91
83
76
68
61
53
Compensatory time off.
[52 FR 2032, Jan. 16, 1987, as amended at 76
FR 18857, Apr. 5, 2011; 82 FR 2229, Jan. 9, 2017]
Overtime pay requirements.
If a public agency pays employees
subject to section 7(k) for overtime
hours worked in cash wages rather
than compensatory time off, such
wages must be paid at one and one-half
times the employees’ regular rates of
pay. In addition, employees who have
accrued the maximum 480 hours of
compensatory time must be paid cash
wages of time and one-half their regular rates of pay for overtime hours in
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92
86
79
73
67
61
55
49
43
(a) Law enforcement and fire protection employees who are subject to the
section 7(k) exemption may receive
compensatory time off in lieu of overtime pay for hours worked in excess of
the maximum for their work period as
set forth in § 553.230. The rules for compensatory time off are set forth in
§§ 553.20 through 553.28 of this part.
(b) Section 7(k) permits public agencies to balance the hours of work over
an entire work period for law enforcement and fire protection employees.
For example, if an employee engaged in
fire protection activities’ work period
is 28 consecutive days, and he or she
works 80 hours in each of the first two
weeks, but only 52 hours in the third
week, and does not work in the fourth
week, no overtime compensation (in
cash wages or compensatory time)
would be required since the total hours
worked do not exceed 212 for the work
period. If the same employee in fire
protection activities had a work period
of only 14 days, overtime compensation
or compensatory time off would be due
for 54 hours (160 minus 106 hours) in the
first 14 day work period.
§ 553.232
Law enforcement
Law enforcement
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Pt. 570
excess of the maximum for the work
period set forth in § 553.230.
§ 553.233
‘‘Regular rate’’ defined.
The rules for computing an employee’s ‘‘regular rate’’, for purposes of the
Act’s overtime pay requirements, are
set forth in part 778 of this title. These
rules are applicable to employees for
whom the section 7(k) exemption is
claimed when overtime compensation
is provided in cash wages. However,
wherever the word ‘‘workweek’’ is used
in part 778, the words ‘‘work period’’
should be substituted.
PART 570—CHILD LABOR REGULATIONS, ORDERS AND STATEMENTS
OF INTERPRETATION
Subpart A—General
Sec.
570.1
570.2
Definitions.
Minimum age standards.
Subpart B—Certificates of Age
570.5 Certificates of age and their effect.
570.6 Contents and disposition of certificates of age.
570.7 Documentary evidence required for
issuance of a certificate of age.
570.8 Issuance of a Federal certificate of
age.
570.9 States in which State certificates of
age are accepted.
570.10 Rules for certificates of age in the
State of Alaska and the Territory of
Guam.
570.11 Continued acceptability of certificates of age.
570.12 Revoked certificates of age.
PROVISIONS OF OTHER LAWS
570.25 Effect on laws other than the Federal
child labor standards.
Subpart C—Employment of Minors Between 14 and 16 Years of Age (Child
Labor Reg. 3)
570.31 Secretary’s
determinations
concerning the employment of minors 14 and
15 years of age.
570.32 Effect of this subpart.
570.33 Occupations that are prohibited to
minors 14 and 15 years of age.
570.34 Occupations that may be performed
by minors 14 and 15 years of age.
570.35 Hours of work and conditions of employment permitted for minors 14 and 15
years of age.
570.36 Work experience and career exploration program.
570.37 Work-study program.
570.38 Effect of a certificate of age under
this subpart.
570.39 Effect of this subpart on other laws.
Subpart D [Reserved]
Subpart E—Occupations Particularly Hazardous for the Employment of Minors
Between 16 and 18 Years of Age or
Detrimental to Their Health or WellBeing
570.50 General.
570.51 Occupations in or about plants or establishments manufacturing or storing
explosives or articles containing explosive components (Order 1).
570.52 Occupations of motor-vehicle driver
and outside helper (Order 2).
570.53 Coal-mine occupations (Order 3).
570.54 Forest fire fighting and forest fire
prevention occupations, timber tract occupations, forestry service occupations,
logging occupations, and occupations in
the operation of any sawmill, lath mill,
shingle mill, or cooperage stock mill
(Order 4).
570.55 Occupations involved in the operation
of power-driven woodworking machines
(Order 5).
570.57 Exposure to radioactive substances
and to ionizing radiations (Order 6).
570.58 Occupations involved in the operation
of
power-driven
hoisting
apparatus
(Order 7).
570.59 Occupations involved in the operation
of power-driven metal forming, punching,
and shearing machines (Order 8).
570.60 Occupations in connection with mining, other than coal (Order 9).
570.61 Occupations in the operation of
power-driven meat-processing machines
and occupations involving slaughtering,
meat and poultry packing, processing, or
rendering (Order 10).
570.62 Occupations involved in the operation
of bakery machines (Order 11).
570.63 Occupations involved in the operation
of balers, compactors, and paper-products machine (Order 12).
570.64 Occupations involved in the manufacture of brick, tile, and kindred products
(Order 13).
570.65 Occupations involving the operation
of circular saws, band saws, guillotine
shears, chain saws, reciprocating saws,
wood chippers, and abrasive cutting discs
(Order 14).
570.66 Occupations involved in wrecking,
demolition, and shipbreaking operations
(Order 15).
570.67 Occupations in roofing operations and
on or about a roof (Order 16).
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§ 570.1
29 CFR Ch. V (7–1–19 Edition)
570.68 Occupations in excavation operations
(Order 17).
Subpart E–1—Occupations in Agriculture
Particularly Hazardous for the Employment of Children Below the Age of 16
570.70
570.71
570.72
Purpose and scope.
Occupations involved in agriculture.
Exemptions.
570.128 Loading of certain scrap paper balers
and paper box compactors.
570.129 Limited driving of automobiles and
trucks by 17-year-olds.
570.130 Employment of certain youth inside
and outside of places of business that use
power-driven machinery to process wood
products.
ENFORCEMENT
Subpart F [Reserved]
Subpart G—General Statements of Interpretation of the Child Labor Provisions
of the Fair Labor Standards Act of
1938, as Amended
570.140
570.141
570.142
General.
Good faith defense.
Relation to other laws.
SOURCE: 16 FR 7008, July 20, 1951, unless
otherwise noted. Redesignated at 28 FR 1634,
Feb. 21, 1963, and further redesignated and
amended at 36 FR 25156, Dec. 29, 1971.
GENERAL
570.101 Introductory statement.
570.102 General scope of statutory provisions.
570.103 Comparison with wage and hour provisions.
COVERAGE OF SECTION 12(a)
570.104 General.
570.105 ‘‘Producer, manufacturer, or dealer’’.
570.106 ‘‘Ship or deliver for shipment in
commerce’’.
570.107 ‘‘Goods’’.
570.108 ‘‘Produced’’.
570.109 ‘‘Establishment situated in the
United States’’.
570.110 ‘‘In or about’’.
570.111 Removal ‘‘within 30 days’’.
COVERAGE OF SECTION 12(c)
570.112 General.
570.113 Employment ‘‘in commerce or in the
production of goods for commerce’’.
JOINT AND SEPARATE APPLICABILITY OF
SECTIONS 12(a) AND 12(c)
570.114 General.
570.115 Joint applicability.
570.116 Separate applicability.
OPPRESSIVE CHILD LABOR
570.117
570.118
570.119
570.120
570.121
General.
Sixteen-year minimum.
Fourteen-year minimum.
Eighteen-year minimum.
Age certificates.
EXEMPTIONS
570.122 General.
570.123 Agriculture.
570.124 Delivery of newspapers.
570.125 Actors and performers.
570.126 Parental exemption.
570.127 Homeworkers engaged in the making
of evergreen wreaths.
Subpart A—General
AUTHORITY: Secs. 3, 11, 12, 52 Stat. 1060, as
amended, 1066, as amended, 1067, as amended;
29 U.S.C. 203, 211, 212.
SOURCE: 41 FR 26834, June 29, 1976, unless
otherwise noted.
§ 570.1
Definitions.
As used in this part:
(a) Act means the Fair Labor Standards Act of 1938, as amended (52 Stat.
1060, as amended; 29 U.S.C. 201–219).
(b) Oppressive child labor means employment of a minor in an occupation
for which he does not meet the minimum age standards of the Act, as set
forth in § 570.2 of this subpart.
(c) Oppressive child labor age means an
age below the minimum age established under the Act for the occupation
in which a minor is employed or in
which
his
employment
is
contemplated.
(d) A certificate of age means a certificate as provided in § 570.5(b) (1) or (2) of
this part.
(e) [Reserved]
(f) Secretary’’ or Secretary of Labor
means the Secretary of Labor, United
States Department of Labor, or his authorized representative.
(g) Wage and Hour Division means the
Wage and Hour Division, United States
Department of Labor.
(h) Administrator means the Administrator of the Wage and Hour Division
or his authorized representative.
(i) State agency means any officer, executive department, board, bureau or
commission of a State or any division
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Wage and Hour Division, Labor
§ 570.5
or unit thereof authorized to take action with respect to the application of
laws relating to minors.
[41 FR 26834, June 29, 1976, as amended at 82
FR 2229, Jan. 9, 2017]
§ 570.2 Minimum age standards.
(a) All occupations except in agriculture. (1) The Act, in section 3(1), sets
a general 16-year minimum age which
applies to all employment subject to
its child labor provisions in any occupation other than in agriculture, with
the following exceptions:
(i) The Act authorizes the Secretary
of Labor to provide by regulation or by
order that the employment of employees between the ages of 14 and 16 years
in occupations other than manufacturing and mining shall not be deemed
to constitute oppressive child labor, if
and to the extent that the Secretary of
Labor determines that such employment is confined to periods which will
not interfere with their schooling and
to conditions which will not interfere
with their health and well-being (see
subpart C of this part); and
(ii) The Act sets an 18-year minimum
age with respect to employment in any
occupation found and declared by the
Secretary of Labor to be particularly
hazardous for the employment of minors of such age or detrimental to their
health or well-being (see subpart E of
this part).
(2) The Act exempts from its minimum age requirements the employment by a parent of his own child, or
by a person standing in place of a parent of a child in his custody, except in
occupations to which the 18-year age
minimum applies and in manufacturing and mining occupations.
(b) Occupations in agriculture. The Act
sets a 16-year age minimum for employment in agriculture during school
hours for the school district in which
the employed minor is living at the
time, and also for employment in any
occupation in agriculture that the Secretary of Labor finds and declares to be
particularly hazardous except where
such employee is employed by his parent or by a person standing in the place
of his parent on a farm owned or operated by such parent or person (see Subpart E–1 of this part). There is a minimum age requirement of 14 years gen-
erally for employment in agriculture
outside school hours for the school district where such employee is living
while so employed. However, (1) a
minor 12 or 13 years of age may be so
employed with written consent of his
parent or person standing in place of
his parent, or may work on a farm
where such parent or person is also employed, and (2) a minor under 12 years
of age may be employed by his parent
or by a person standing in place of his
parent on a farm owned or operated by
such parent or person, or may be employed with consent of such parent or
person on a farm where all employees
are exempt from the minimum wage
provisions by virtue of section 13(a) (6)
(A) of the Act.
Subpart B—Certificates of Age
AUTHORITY: 29 U.S.C. 203(l), 211, 212.
SOURCE: 41 FR 26835, June 29, 1976, unless
otherwise noted.
§ 570.5 Certificates of age and their effect.
(a) To protect an employer from unwitting violation of the minimum age
standards under the Act, section 3(1) of
the Act provides that ‘‘oppressive child
labor shall not be deemed to exist by
virtue of the employment in any occupation of any person with respect to
whom the employer shall have on file
an unexpired certificate issued and
held pursuant to regulations of the
Secretary of Labor certifying that such
person is above the oppressive childlabor age.’’ The provisions of this subpart provide for age certificates based
on the best available documentary evidence of age. Certificates issued and effective pursuant to this subpart furnish
an employer with proof of the age of a
minor employee upon which he may
rely in determining whether the minor
is at least the minimum age for the occupation in which he is to be employed.
(b) The employment of any minor
shall not be deemed to constitute oppressive child labor under the Act if his
employer shall have on file an unexpired certificate, issued and held in accordance with this subpart, which shall
be either:
(1) A Federal certificate of age,
issued by a person authorized by the
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§ 570.6
29 CFR Ch. V (7–1–19 Edition)
Administrator of the Wage and Hour
Division, showing that such minor is
above the oppressive child-labor age
applicable to the occupation in which
he is employed, or
(2) A State certificate, which may be
in the form of and known as an age,
employment, or working certificate or
permit, issued by or under the supervision of a State agency in a State
which has been designated for this purpose by the Administrator showing
that such minor is above the oppressive
child-labor age applicable to the occupation in which the minor is employed.
States so designated are listed in
§ 570.9(a). Any such certificate shall
have the force and effect specified in
§ 570.9.
(c) The prospective employer of a
minor, in order to protect himself from
unwitting violation of the Act, should
obtain a certificate (as specified in
paragraphs (b) (1) and (2) of this section) for the minor if there is any reason to believe that the minor’s age
may be below the applicable minimum
for the occupation in which he is to be
employed. Such certificate should always be obtained where the minor
claims to be only 1 or 2 years above the
applicable minimum age for the occupation in which he is to be employed. It
should also be obtained for every minor
claiming to be older than 2 years above
the applicable minimum age if his
physical appearance indicates that this
may not be true.
§ 570.6 Contents and disposition of certificates of age.
(a) Except as provided in §§ 570.9 and
570.10, a certificate of age which shall
have the effect specified in § 570.5 shall
contain the following information:
(1) Name and address of minor.
(2) Place and date of birth of minor,
together with a statement indicating
the evidence on which this is based.
The place of birth need not appear on
the certificate if it is obtained and
kept on file by the person issuing the
certificate.
(3) Sex of minor.
(4) Signature of minor.
(5) Name and address of minor’s parent or person standing in place of parent. This information need not appear
on the certificate if it is obtained and
kept on file by the person issuing the
certificate.
(6) Name and address of employer, if
minor is under 18.
(7) Industry of employer, if minor is
under 18.
(8) Occupation of minor, if minor is
under 18.
(9) Signature of issuing officer.
(10) Date and place of issuance.
(b)(1) We will send a certificate of age
for a minor under 18 years of age to the
prospective employer of the minor.
That employer must keep the certificate on file at the minor’s workplace.
When the minor terminates employment, the employer must give the certificate to the minor. The minor may
then present the previously issued certificate to future employers as proof of
age as described in § 570.5.
(2) Whenever a certificate of age is
issued for a minor 18 or 19 years of age
it may be given to the minor by the
person issuing the certificate. Every
minor 18 or 19 years of age shall, upon
entering employment, deliver his certificate of age to his employer for filing and upon the termination of the
employment, the employer shall return
the certificate to the minor.
(The information collection requirements
contained in paragraph (a) were approved by
the Office of Management and Budget under
control number 1235–0018)
[41 FR 26835, June 29, 1976, as amended at 49
FR 18294, Apr. 30, 1984; 69 FR 75402, Dec. 16,
2004; 82 FR 2229, Jan. 9, 2017]
§ 570.7 Documentary
evidence
required for issuance of a certificate
of age.
(a) Except as otherwise provided in
§§ 570.9 and 570.10, a certificate of age
which shall have the effect specified in
§ 570.5 shall be issued only upon application of the minor desiring employment or of the prospective employer to
the person authorized to issue such certificate and only after acceptable documentary evidence of age has been received, examined, and approved. Such
evidence shall consist of one of the following to be required in the order of
preference herein designated:
(1) A birth certificate or attested
transcript thereof or a signed statement of the recorded date and place of
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Wage and Hour Division, Labor
§ 570.9
birth, issued by a registrar of vital statistics or other officer charged with the
duty of recording births.
(2) A record of baptism or attested
transcript thereof showing the date
and place of birth and date and place of
baptism of the minor, or a bona fide
contemporary record of the date and
place of the minor’s birth kept in the
Bible in which the records of the births
in the family of the minor are preserved, or other documentary evidence
satisfactory to the Administrator, such
as a passport showing the age of the
minor, or a certificate of arrival in the
United States issued by the United
States immigration office and showing
the age of the minor, or a life-insurance policy: Provided, That such other
documentary evidence has been in existence at least 1 year prior to the time
it is offered as evidence: And provided
further, That a school record of age or
an affidavit of a parent or a person
standing in place of a parent, or other
written statement of age shall not be
accepted except as specified in paragraph (a) (3) of this section;
(3) The school record or the schoolcensus record of the age of the minor,
together with the sworn statement of a
parent or person standing in place of a
parent as to the age of the minor and
also a certificate signed by a physician
specifying what in his opinion is the
physical age of the minor. Such certificate shall show the height and weight
of the minor and other facts concerning his physical development
which were revealed by such examination and upon which the opinion of the
physician as to the physical age of the
minor is based. If the school or schoolcensus record of age is not obtainable,
the sworn statement of the parent or
person standing in place of a parent as
to the date of birth of the minor, together with a physician’s certificate of
age as hereinbefore specified, may be
accepted as evidence of age.
(b) The officer issuing a certificate of
age for a minor shall require the evidence of age specified in paragraph
(a)(1) of this section in preference to
that specified in paragraphs (a)(2) and
(3) of this section, and shall not accept
the evidence of age permitted by either
subsequent paragraph unless he shall
receive and file evidence that reason-
able efforts have been made to obtain
the preferred evidence required by the
preceding paragraph or paragraphs before accepting any subsequently named
evidence: Provided, That to avoid undue
delay in the issuance of certificates,
evidence specified in paragraph (a)(2) of
this section may be accepted, or if such
evidence is not available, evidence
specified in paragraph (a)(3) of this section may be accepted if a verification
of birth has been requested but has not
been received from the appropriate bureau of vital statistics.
§ 570.8 Issuance of a Federal certificate of age.
A Federal certificate of age which
shall have the effect specified in § 570.5
shall be issued by a person authorized
by the Administrator of the Wage and
Hour Division and shall be issued in accordance with the provisions of §§ 570.6
and 570.7.
§ 570.9 States in which State certificates of age are accepted.
(a) The States in which age, employment, or working certificates or permits have been found by the Administrator to be issued by or under the supervision of a State agency substantially in accordance with the provisions of §§ 570.6 and 570.7 and which are
designated as States in which certificates so issued shall have the force and
effect specified in § 570.5, except as individual certificates may be revoked in
accordance with § 570.11 of this subpart,
are:
Alabama, Arkansas, California, Colorado,
Connecticut, Delaware, District of Columbia,
Florida, Georgia, Hawaii, Illinois, Indiana,
Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Missouri, Montana, Nebraska, Nevada, New
Hampshire, New Jersey, New Mexico, New
York, North Carolina, North Dakota, Ohio,
Oklahoma, Oregon, Pennsylvania, Puerto
Rico, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, West Virginia,
Wisconsin and Wyoming.
(b) State certificates requiring conditions or restrictions additional to
those required by this subpart shall not
be deemed to be inconsistent herewith.
(c) The designation of a State under
this section shall have force and effect
indefinitely unless withdrawal of such
designation is deemed desirable for the
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§ 570.10
29 CFR Ch. V (7–1–19 Edition)
effective administration of the Act. No
withdrawal of the designation of a
State under this section shall make
any certificate invalid if it was issued
by or under the supervision of a State
agency as herein provided prior to such
withdrawal.
§ 570.10 Rules for certificates of age in
the State of Alaska and the Territory of Guam.
The State of Alaska and the Territory of Guam are designated as States
in which any of the following documents shall have the same effect as
Federal certificates of age as specified
in § 570.5:
(a) A birth certificate or attested
transcript thereof, or a signed statement of the recorded date and place of
birth issued by a registrar of vital statistics or other officer charged with the
duty of recording births, or
(b) A record of baptism or attested
transcript thereof showing the date of
birth of the minor, or
(c) With respect to the State of Alaska, a statement on the census records
of the Bureau of Indian Affairs and
signed by an administrative representative thereof showing the name, date of
birth, and place of birth of the minor.
§ 570.11 Continued acceptability
certificates of age.
State agency responsible for the
issuance of certificates, except that in
those States where Federal certificates
of age are issued, action necessary to
establish the correct age of the minor
and to revoke the certificate if it is
found that the minor is under age shall
be taken by the Administrator of the
Wage and Hour Division or his designated representative.
(b) The Administrator shall have
final authority in those States in
which State certificates are accepted
as proof of age under the Act for determining the continued acceptability of
the certificate, and shall have final authority for such determination in those
States in which Federal certificates of
age are issued. When such determination has been made in any case, notice
thereof shall be given to the employer
and the minor. In those cases involving
the continued acceptability of State
certificates, the appropriate State
agency and the official who issued the
certificate shall also be notified.
§ 570.12 Revoked certificates of age.
A certificate which has been revoked
as proof of age under the Act shall be
of no force and effect under the Act
after notice of such revocation.
PROVISIONS OF OTHER LAWS
of
(a) Whenever a person duly authorized to make investigations under this
Act shall obtain substantial evidence
that the age of the minor as given on a
certificate held by an employer subject
to this Act is incorrect, he shall inform
the employer and the minor of such
evidence and of his intention to request
through the appropriate channels that
action be taken to establish the correct
age of the minor and to determine the
continued acceptability of the certificate as proof of age under the Act. The
said authorized person shall request in
writing through the appropriate channels that action be taken on the acceptability of the certificate as proof of
age under the Fair Labor Standards
Act and shall state the evidence of age
of the minor which he has obtained and
the reasons for such request. A copy of
this request shall be sent to the Administrator of the Wage and Hour Division for further handling through the
§ 570.25 Effect on laws other than the
Federal child labor standards.
No provision of this subpart shall
under any circumstances justify or be
construed to permit noncompliance
with the provisions of any other Federal law or of any State law or municipal ordinance establishing higher
standards than those established under
this subpart.
Subpart C—Employment of Minors
Between 14 and 16 Years of
Age (Child Labor Reg. 3)
AUTHORITY: 29 U.S.C. 203(l), 212, 213(c).
§ 570.31 Secretary’s
determinations
concerning the employment of minors 14 and 15 years of age.
The employment of minors between
14 and 16 years of age in the occupations, for the periods, and under the
conditions specified in § 570.34 and
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Wage and Hour Division, Labor
§ 570.33
§ 570.35, does not interfere with their
schooling or with their health and
well-being and shall not be deemed to
be oppressive child labor.
[75 FR 28448, May 20, 2010]
§ 570.32
Effect of this subpart.
This subpart concerns the employment of youth between 14 and 16 years
of age in nonagricultural occupations;
standards for the employment of minors in agricultural occupations are detailed in subpart E–1. The employment
(including suffering or permitting to
work) by an employer of minors 14 and
15 years of age in occupations detailed
in § 570.34, for the periods and under the
conditions specified in § 570.35, shall not
be deemed to be oppressive child labor
within the meaning of the Fair Labor
Standards Act of 1938, as amended. Employment that is not specifically permitted is prohibited.
[75 FR 28448, May 20, 2010]
§ 570.33 Occupations that are prohibited to minors 14 and 15 years of
age.
The following occupations, which is
not an exhaustive list, constitute oppressive child labor within the meaning
of the Fair Labor Standards Act when
performed by minors who are 14 and 15
years of age:
(a) Manufacturing, mining, or processing occupations, including occupations requiring the performance of any
duties in work rooms or work places
where goods are manufactured, mined
or otherwise processed, except as permitted in § 570.34 of this subpart.
(b) Occupations that the Secretary of
Labor may, pursuant to section 3(l) of
the Fair Labor Standards Act, find and
declare to be hazardous for the employment of minors between 16 and 18 years
of age or detrimental to their health or
well-being.
(c) Occupations that involve operating, tending, setting up, adjusting,
cleaning, oiling, or repairing hoisting
apparatus.
(d) Work performed in or about boiler
or engine rooms or in connection with
the maintenance or repair of the establishment, machines, or equipment.
(e) Occupations that involve operating, tending, setting up, adjusting,
cleaning, oiling, or repairing any
power-driven machinery, including but
not limited to lawn mowers, golf carts,
all-terrain vehicles, trimmers, cutters,
weed-eaters, edgers, food slicers, food
grinders, food choppers, food processors, food cutters, and food mixers.
Youth 14 and 15 years of age may, however, operate office equipment pursuant to § 570.34(a) and vacuum cleaners
and floor waxers pursuant to § 570.34(h).
(f) The operation of motor vehicles;
the service as helpers on such vehicles
except those tasks permitted by
§ 570.34(k); and the riding on a motor
vehicle, inside or outside of an enclosed
passenger compartment, except as permitted by § 570.34(o).
(g) Outside window washing that involves working from window sills, and
all work requiring the use of ladders,
scaffolds, or their substitutes.
(h) All baking and cooking activities
except that cooking which is permitted
by § 570.34(c).
(i) Work in freezers and meat coolers
and all work in the preparation of
meats for sale except as permitted by
§ 570.34(j). This section, however, does
not prohibit the employment of 14- and
15-year-olds whose duties require them
to occasionally enter freezers only momentarily to retrieve items as permitted by § 570.34(i).
(j) Youth peddling, which entails the
selling of goods or services to customers at locations other than the
youth-employer’s establishment, such
as the customers’ residences or places
of business, or public places such as
street corners and public transportation stations. Prohibited activities
associated with youth peddling not
only include the attempt to make a
sale or the actual consummation of a
sale, but also the preparatory and concluding tasks normally performed by a
youth peddler in conjunction with his
or her sales such as the loading and unloading of vans or other motor vehicles, the stocking and restocking of
sales kits and trays, the exchanging of
cash and checks with the employer,
and the transportation of minors to
and from the various sales areas by the
employer. Prohibited youth peddling
also includes such promotion activities
as the holding, wearing, or waving of
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§ 570.34
29 CFR Ch. V (7–1–19 Edition)
signs, merchandise, costumes, sandwich boards, or placards in order to attract potential customers, except when
performed inside of, or directly in front
of, the employer’s establishment providing the product, service, or event
being advertised. This provision does
not prohibit a young salesperson from
conducting sales for his or her employer on property controlled by the
employer that is out of doors but may
properly be considered part of the employer’s establishment. Youth may
conduct sales in such employer exterior facilities, whether temporary or
permanent, as garden centers, sidewalk
sales, and parking lot sales, when employed by that establishment. Youth
peddling does not include the activities
of persons who, as volunteers and without compensation, sell goods or services on behalf of eleemosynary organizations or public agencies.
(k) Loading and unloading of goods
or property onto or from motor vehicles, railroad cars, or conveyors, except
the loading and unloading of personal
non-power-driven hand tools, personal
protective equipment, and personal
items to and from motor vehicles as
permitted by § 570.34(k).
(l) Catching and cooping of poultry in
preparation for transport or for market.
(m) Public messenger service.
(n) Occupations in connection with:
(1) Transportation of persons or property by rail, highway, air, water, pipeline, or other means;
(2) Warehousing and storage;
(3) Communications and public utilities;
(4) Construction (including demolition and repair); except such office
work (including ticket office) or sales
work in connection with paragraphs
(n)(1), (2), (3), and (4) of this section, as
does not involve the performance of
any duties on trains, motor vehicles,
aircraft, vessels, or other media of
transportation or at the actual site of
construction operations.
[75 FR 28448, May 20, 2010]
§ 570.34 Occupations that may be performed by minors 14 and 15 years
of age.
This subpart authorizes only the following occupations in which the em-
ployment of minors 14 and 15 years of
age is permitted when performed for
periods and under conditions authorized by § 570.35 and not involving occupations prohibited by § 570.33 or performed in areas or industries prohibited by § 570.33.
(a) Office and clerical work, including the operation of office machines.
(b) Work of an intellectual or artistically creative nature such as, but not
limited to, computer programming, the
writing of software, teaching or performing as a tutor, serving as a peer
counselor or teacher’s assistant, singing, the playing of a musical instrument, and drawing, as long as such employment complies with all the other
provisions contained in §§ 570.33, 570.34,
and 570.35. Artistically creative work is
limited to work in a recognized field of
artistic or creative endeavor.
(c) Cooking with electric or gas grills
which does not involve cooking over an
open flame (Note: This provision does
not authorize cooking with equipment
such as rotisseries, broilers, pressurized equipment including fryolators,
and cooking devices that operate at extremely high temperatures such as
‘‘Neico broilers’’). Cooking is also permitted with deep fryers that are
equipped with and utilize a device
which automatically lowers the baskets into the hot oil or grease and
automatically raises the baskets from
the hot oil or grease.
(d) Cashiering, selling, modeling, art
work, work in advertising departments, window trimming, and comparative shopping.
(e) Price marking and tagging by
hand or machine, assembling orders,
packing, and shelving.
(f) Bagging and carrying out customers’ orders.
(g) Errand and delivery work by foot,
bicycle, and public transportation.
(h) Clean up work, including the use
of vacuum cleaners and floor waxers,
and the maintenance of grounds, but
not including the use of power-driven
mowers, cutters, trimmers, edgers, or
similar equipment.
(i) Kitchen work and other work involved in preparing and serving food
and beverages, including operating machines and devices used in performing
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Wage and Hour Division, Labor
§ 570.34
such work. Examples of permitted machines and devices include, but are not
limited to, dishwashers, toasters,
dumbwaiters, popcorn poppers, milk
shake blenders, coffee grinders, automatic coffee machines, devices used to
maintain the temperature of prepared
foods (such as warmers, steam tables,
and heat lamps), and microwave ovens
that are used only to warm prepared
food and do not have the capacity to
warm above 140 °F. Minors are permitted to clean kitchen equipment
(not otherwise prohibited), remove oil
or grease filters, pour oil or grease
through filters, and move receptacles
containing hot grease or hot oil, but
only when the equipment, surfaces,
containers and liquids do not exceed a
temperature of 100 °F. Minors are also
permitted to occasionally enter freezers momentarily to retrieve items in
conjunction with restocking or food
preparation.
(j) Cleaning vegetables and fruits,
and the wrapping, sealing, labeling,
weighing, pricing, and stocking of
items, including vegetables, fruits, and
meats, when performed in areas physically separate from a freezer or meat
cooler.
(k) The loading onto motor vehicles
and the unloading from motor vehicles
of the light, non-power-driven, hand
tools and personal protective equipment that the minor will use as part of
his or her employment at the work
site; and the loading onto motor vehicles and the unloading from motor vehicles of personal items such as a back
pack, a lunch box, or a coat that the
minor is permitted to take to the work
site. Such light tools would include,
but are not limited to, rakes, hand-held
clippers, shovels, and brooms. Such
light tools would not include items like
trash, sales kits, promotion items or
items for sale, lawn mowers, or other
power-driven lawn maintenance equipment. Such minors would not be permitted to load or unload safety equipment such as barriers, cones, or signage.
(l)(1) Lifeguard. The employment of
15-year-olds (but not 14-year-olds) to
perform permitted lifeguard duties at
traditional swimming pools and water
amusement parks (including such
water park facilities as wave pools,
lazy rivers, specialized activity areas
that may include water falls and sprinkler areas, and baby pools; but not including the elevated areas of powerdriven water slides) when such youth
have been trained and certified by the
American Red Cross, or a similar certifying organization, in aquatics and
water safety.
(2) Definitions. As used in this paragraph (l):
Permitted lifeguard duties include the
rescuing of swimmers in danger of
drowning, the monitoring of activities
at poolside to prevent accidents, the
teaching of water safety, and providing
assistance to patrons. Lifeguards may
also help to maintain order and cleanliness in the pool and pool areas, give
swimming instructions (if, in addition
to being certified as a lifeguard, the 15year-old is also properly certified as a
swimming instructor by the American
Red Cross or some other recognized
certifying organization), conduct or officiate at swimming meets, and administer first aid. Additional lifeguard duties may include checking in and out
items such as towels and personal
items such as rings, watches and apparel. Permitted duties for 15-year-olds
include the use of a ladder to access
and descend from the lifeguard chair;
the use of hand tools to clean the pool
and pool area; and the testing and recording of water quality for temperature and/or pH levels, using all of the
tools of the testing process including
adding chemicals to the test water
sample. Fifteen-year-olds employed as
lifeguards are, however, prohibited
from entering or working in any mechanical room or chemical storage
areas, including any areas where the
filtration and chlorinating systems are
housed. The term permitted lifeguard
duties does not include the operation
or tending of power-driven equipment
including power-driven elevated water
slides often found at water amusement
parks and some swimming pools. Minors under 16 years of age may not be
employed as dispatchers or attendants
at the top of elevated water slides performing such tasks as maintaining
order, directing patrons as to when to
depart the top of the slide, and ensuring that patrons have begun their
‘‘ride’’ safely. Properly certified 15-
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§ 570.34
29 CFR Ch. V (7–1–19 Edition)
year-old lifeguards may, however, be
stationed at the ‘‘splashdown pools’’ located at the bottom of the elevated
water slides to perform those permitted duties listed in this subsection.
Traditional swimming pool means a
water tight structure of concrete, masonry, or other approved materials located either indoors or outdoors, used
for bathing or swimming and filled
with a filtered and disinfected water
supply, together with buildings, appurtenances and equipment used in connection therewith, excluding elevated
‘‘water slides.’’ Not included in the definition of a traditional swimming pool
would be such natural environment
swimming facilities as rivers, streams,
lakes, ponds, quarries, reservoirs,
wharfs, piers, canals, or oceanside
beaches.
Water amusement park means an establishment that not only encompasses
the features of a traditional swimming
pool, but may also include such additional attractions as wave pools; lazy
rivers; specialized activities areas such
as baby pools, water falls, and sprinklers; and elevated water slides. Not
included in the definition of a water
amusement park would be such natural
environment swimming facilities as
rivers, streams, lakes, reservoirs,
wharfs, piers, canals, or oceanside
beaches.
(m)(1) Employment inside and outside
of places of business where machinery is
used to process wood products. The employment of a 14- or 15-year-old who by
statute or judicial order is exempt
from compulsory school attendance beyond the eighth grade inside or outside
places of business where machinery is
used to process wood products if:
(i) The youth is supervised by an
adult relative of the youth or is supervised by an adult member of the same
religious sect or division as the youth;
(ii) The youth does not operate or assist in the operation of power-driven
woodworking machines;
(iii) The youth is protected from
wood particles or other flying debris
within the workplace by a barrier appropriate to the potential hazard of
such wood particles or flying debris or
by maintaining a sufficient distance
from machinery in operation; and
(iv) The youth is required to use, and
uses, personal protective equipment to
prevent exposure to excessive levels of
noise and saw dust.
(2) Compliance. Compliance with the
provisions of paragraphs (m)(1)(iii) and
(m)(1)(iv) of this section will be accomplished when the employer is in compliance with the requirements of the
applicable governing standards issued
by the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) or, in those areas
where OSHA has authorized the state
to operate its own Occupational Safety
and Health Plan, the applicable standards issued by the Office charged with
administering the State Occupational
Safety and Health Plan. The employment of youth under this section must
comply with the other sections of this
subpart, including the hours and time
of day standards established by § 570.35.
(3) Definitions. As used in this paragraph (m):
Inside or outside places of business
shall mean the actual physical location
of the establishment employing the
youth, including the buildings and surrounding land necessary to the business operations of that establishment.
Operate or assist in the operation of
power-driven
woodworking
machines
shall mean the operating of such machines, including supervising or controlling the operation of such machines, feeding material into such machines, helping the operator feed material into such machines, unloading materials from such machines, and helping the operator unload materials from
such machines. The term also includes
the occupations of setting-up, adjusting, repairing, oiling, or cleaning such
machines.
Places of business where machinery is
used to process wood products shall mean
such permanent workplaces as sawmills, lath mills, shingle mills, cooperage stock mills, furniture and cabinet making shops, gazebo and shed
making shops, toy manufacturing
shops, and pallet shops. The term shall
not include construction sites, portable
sawmills, areas where logging is being
performed, or mining operations.
Power-driven woodworking machines
shall mean all fixed or portable machines or tools driven by power and
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Wage and Hour Division, Labor
§ 570.35
used or designed for cutting, shaping,
forming, surfacing, nailing, stapling,
wire stitching, fastening or otherwise
assembling, pressing, or printing wood,
veneer, trees, logs, or lumber.
Supervised by an adult relative or is supervised by an adult member of the same
religious sect or division as the youth has
several components. Supervised means
that the youth’s on-the-job activities
must be directed, monitored, overseen,
and controlled by certain named
adults. Such supervision must be close,
direct, constant, and uninterrupted. An
adult shall mean an individual who is
at least eighteen years of age. A relative shall mean the parent (or someone standing in the place of a parent),
grandparent, sibling, uncle, or aunt of
the young worker. A member of the same
religious sect or division as the youth refers to an individual who professes
membership in the same religious sect
or division to which the youth professes membership.
(n) Work in connection with cars and
trucks if confined to the following: dispensing gasoline and oil; courtesy service;
car
cleaning,
washing
and
polishing by hand; and other occupations permitted by this section, but not
including work involving the use of
pits, racks, or lifting apparatus, or involving the inflation of any tire
mounted on a rim equipped with a removable retaining ring.
(o) Work in connection with riding
inside passenger compartments of
motor vehicles except as prohibited by
§ 570.33(f) or § 570.33(j), or when a significant reason for the minor being a passenger in the vehicle is for the purpose
of performing work in connection with
the transporting—or assisting in the
transporting of—other persons or property. The transportation of the persons
or property does not have to be the primary reason for the trip for this exception to apply. Each minor riding as a
passenger in a motor vehicle must have
his or her own seat in the passenger
compartment; each seat must be
equipped with a seat belt or similar restraining device; and the employer
must instruct the minors that such
belts or other devices must be used. In
addition, each driver transporting the
young workers must hold a State driver’s license valid for the type of driving
involved and, if the driver is under the
age of 18, his or her employment must
comply with the provisions of § 570.52.
[75 FR 28448, May 20, 2010]
§ 570.35 Hours of work and conditions
of employment permitted for minors 14 and 15 years of age.
(a) Hours standards. Except as provided in paragraph (c) of this section,
employment in any of the permissible
occupations to which this subpart is
applicable shall be confined to the following periods:
(1) Outside of school hours;
(2) Not more than 40 hours in any 1
week when school is not in session;
(3) Not more than 18 hours in any 1
week when school is in session;
(4) Not more than 8 hours in any 1
day when school is not in session;
(5) Not more than 3 hours in any 1
day when school is in session, including
Fridays;
(6) Between 7 a.m. and 7 p.m. in any
1 day, except during the summer (June
1 through Labor Day) when the evening
hour will be 9 p.m.
(b) Definitions. As used in this section:
Outside school hours means such periods as before and after school hours,
holidays, summer vacations, weekends,
and any other day or part of a day
when school is not in session as determined by the local public school district in which the minor resides when
employed. Summer school sessions,
held in addition to the regularly scheduled school year, are considered to be
outside of school hours.
School hours refers to the hours that
the local public school district where
the minor resides while employed is in
session during the regularly scheduled
school year.
Week means a fixed and regularly recurring period of 168 hours—seven consecutive 24-hour periods—that is identical to the workweek the employer establishes for the employee under
§ 778.105 of this title.
Week when school is in session refers to
any week the local public school district where the minor resides while employed is in session and students are
required to attend for at least one day
or partial day.
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§ 570.36
29 CFR Ch. V (7–1–19 Edition)
(c) Exceptions. (1) School is not considered to be in session, and exceptions
from the hours limitations standards
listed in paragraphs (a)(1), (3), and (5)
of this section are provided, for any
youth 14 or 15 years of age who:
(i) Has graduated from high school;
(ii) Has been excused from compulsory school attendance by the state or
other jurisdiction once he or she has
completed the eighth grade and his or
her employment complies with all the
requirements of the state school attendance law;
(iii) Has a child to support and appropriate state officers, pursuant to state
law, have waived school attendance requirements for this minor;
(iv) Is subject to an order of a state
or federal court prohibiting him or her
from attending school; or
(v) Has been permanently expelled
from the local public school he or she
would normally attend, unless the
youth is required, by state or local law
or ordinance, or by court order, to attend another school.
(2) In the case of minors 14 and 15
years of age who are employed to perform sports-attending services at professional sporting events, i.e., baseball,
basketball, football, soccer, tennis,
etc., the requirements of paragraphs
(a)(2) through (a)(6) of this section
shall not apply, provided that the duties of the sports-attendant occupation
consist of pre- and post-game or practice setup of balls, items and equipment; supplying and retrieving balls,
items and equipment during a sporting
event; clearing the field or court of debris, moisture, etc., during play; providing ice, drinks, towels, etc., to players during play; running errands for
trainers, managers, coaches, and players before, during, and after a sporting
event; and returning and/or storing
balls, items and equipment in club
house or locker room after a sporting
event. For purposes of this exception,
impermissible duties include grounds
or field maintenance such as grass
mowing, spreading or rolling tarpaulins used to cover playing areas, etc.;
cleaning and repairing equipment;
cleaning locker rooms, showers, lavatories, rest rooms, team vehicles, club
houses, dugouts or similar facilities;
loading and unloading balls, items and
equipment from team vehicles before
and after a sporting event; doing laundry; and working in concession stands
or other selling and promotional activities.
(3) Exceptions from certain of the
hours standards contained in paragraphs (a)(1) and (a)(3) of this section
are provided for the employment of minors who are enrolled in and employed
pursuant to a school-supervised workexperience and career exploration program as detailed in § 570.36.
(4) Exceptions from certain of the
hours standards contained in paragraphs (a)(1) and (a)(5) of this section
are provided for the employment of minors who are participating in a workstudy program designed as described in
§ 570.37.
[75 FR 28448, May 20, 2010]
§ 570.36 Work experience and career
exploration program.
(a) This section varies some provisions of this subpart for the employment of minors between 14 and 16 years
of age who are enrolled in and employed pursuant to a school-supervised
and school-administered work-experience and career exploration program
which meets the requirements of paragraph (b) of this section, in the occupations permitted under paragraph (c) of
this section, and for the periods and
under the conditions specified in paragraph (d) of this section. With these
safeguards, such employment is found
not to interfere with the schooling of
the minors or with their health and
well-being and therefore is not deemed
to be oppressive child labor.
(b)(1) A school-supervised and schooladministered work-experience and career exploration program shall meet
the educational standards established
and approved by the State Educational
Agency in the respective State.
(2) The State Educational Agency
shall file with the Administrator of the
Wage and Hour Division a letter of application for approval of a State program as one not interfering with
schooling or with the health and wellbeing of the minors involved and therefore not constituting oppressive child
labor. The application must include information concerning the criteria listed in paragraph (b)(3) of this section.
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Wage and Hour Division, Labor
§ 570.36
The Administrator of the Wage and
Hour Division shall approve the application, or give prompt notice of any denial and the reasons therefor.
(3) The criteria to be used in consideration of applications are the following:
(i) Eligibility. Any student aged 14 or
15 years who authoritative local school
personnel identify as being able to benefit from the program shall be eligible
to participate.
(ii) Credits. Students shall receive
school credits for both in-school related instruction and on-the-job experience.
(iii) Size. Each program unit shall be
a reasonable size. A unit of 12 to 25 students to one teacher-coordinator would
be generally considered reasonable.
Whether other sizes are reasonable
would depend upon the individual facts
and circumstances involved.
(iv) Instructional schedule. There shall
be (a) allotted time for the required
classroom instruction in those subjects
necessary for graduation under the
State’s standards and (b) regularly
scheduled classroom periods of instruction devoted to job-related and to employability skill instruction.
(v) Teacher-coordinator. Each program
unit shall be under the supervision of a
school official to be designated for the
purpose of the program as a teacher-coordinator, who shall generally supervise the program and coordinate the
work and education aspects of the program and make regularly scheduled
visits to the work stations.
(vi) Written training agreement. No
student shall participate in the program until there has been made a written training agreement signed by the
teacher-coordinator, the employer, and
the student. The agreement shall also
be signed or otherwise consented to by
the student’s parent or guardian.
(vii) Other provisions. Any other provisions of the program providing safeguards ensuring that the employment
permitted under this section will not
interfere with the schooling of the minors or with their health and wellbeing may also be submitted for use in
consideration of the application.
(4) Every State Educational Agency
having students in a program approved
pursuant to the requirements of this
section shall comply with the following:
(i) Permissible occupations. No student
shall be assigned to work in any occupation other than one permitted under
paragraph (c) of this section.
(ii) Records and reports. The names
and addresses of each school enrolling
work experience and career exploration
program students and the number of
enrollees in each unit shall be kept at
the State Educational Agency office. A
copy of the written training agreement
for each student participating in the
program shall be kept in the State
Educational Agency office or in the
local educational office. The records
required for this paragraph shall be
kept for a period of 3 years from the
date of enrollment in the program and
shall be made available for inspection
or transcription to the representatives
of the Administrator of the Wage and
Hour Division.
(c) Employment of minors enrolled in
a program approved pursuant to the requirements of this section shall be permitted in all occupations except the
following:
(1) Manufacturing and mining.
(2) Occupations declared to be hazardous for the employment of minors
between 16 and 18 years of age in subpart E of this part, and occupations in
agriculture declared to be hazardous
for employment of minors below the
age of 16 in subpart E–1 of this part.
(3) Occupations other than those permitted under § 570.34, except upon approval of a variation by the Administrator of the Wage and Hour Division
in acting on the program application of
the State Educational Agency. The Administrator shall have discretion to
grant requests for special variations if
the applicant demonstrates that the
activity will be performed under adequate supervision and training (including safety precautions) and that the
terms and conditions of the proposed
employment will not interfere with the
health or well-being or schooling of the
minor enrolled in an approved program. The granting of a special variation is determined on a case-by-case
basis.
(i) The Administrator’s decision on
whether to grant a special variation
will be based on information provided
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§ 570.37
29 CFR Ch. V (7–1–19 Edition)
in the application filed by the State
Educational Agency, and/or any supplemental information that may be requested by the Administrator.
(ii) The Administrator’s decision
shall be in writing, and may designate
specific equipment safeguards or other
terms and conditions governing the
work-activity approved by variation. If
the request is denied, in whole or part,
the reason(s) for the decision will be
provided to the applicant, who may request reconsideration.
(iii) A special variation will be valid
only during the period covered by an
approved program, and must be renewed with the filing of a new program
application.
(iv) The Administrator shall revoke
or deny a special variation, in whole or
in part, where there is reason to believe that program participants have
been or will be employed contrary to
terms and conditions specified for the
variation, or these regulations, other
provisions of the Fair Labor Standards
Act, or otherwise in conditions detrimental to their health or well-being or
schooling.
(v) Requests for special variations
and related documentation will be
available for examination in the
Branch of Child Labor and Polygraph
Standards, Wage and Hour Division,
Room S3510, 200 Constitution Avenue,
NW., Washington, DC 20210. Any interested person may oppose the granting
of a special variation or may request
reconsideration or revocation of a special variation. Such requests shall set
forth reasons why the special variation
should be denied or revoked.
(d) Employment of minors enrolled in
a program approved pursuant to the requirements of this section shall be confined to not more than 23 hours in any
1 week when school is in session and
not more than 3 hours in any day when
school is in session, any portion of
which may be during school hours. Insofar as these provisions are inconsistent with the provisions of § 570.35,
this section shall be controlling.
(e) The employment of a minor enrolled in a program pursuant to the requirements of this section must not
have the effect of displacing a worker
employed in the establishment of the
employer.
(f) Programs shall be in force and effect for a period of two (2) school years
from the date of their approval by the
Administrator of the Wage and Hour
Division. A new application for approval must be filed at the end of that
period. Failure to meet the requirements of this section may result in
withdrawal of approval.
(The information collection requirements
contained in paragraphs (b)(3)(vi) and (4)
were approved by the Office of Management
and Budget under control number 1235–0018)
[40 FR 40801, Sept. 4, 1975; 40 FR 44130, Sept.
25, 1975; 47 FR 145, Jan. 5, 1982; 47 FR 28095,
June 29, 1982, as amended at 49 FR 18294, Apr.
30, 1984; 60 FR 19339, Apr. 17, 1995. Redesignated and amended at 75 FR 28452, May 20,
2010; 82 FR 2229, Jan. 9, 2017]
§ 570.37 Work-study program.
(a) This section varies the provisions
contained in § 570.35(a)(1) and (a)(5) for
the employment of minors 14 and 15
years of age who are enrolled in and
employed pursuant to a school-supervised and school-administered workstudy program that meets the requirements of paragraph (b) of this section,
in the occupations permitted by
§ 570.34, and for the periods and under
the conditions specified in paragraph
(c) of this section. With these safeguards, such employment is found not
to interfere with the schooling of the
minors or with their health and wellbeing and therefore is not deemed to be
oppressive child labor.
(b)(1) A school-supervised and schooladministered work-study program shall
meet the educational standards established and approved by the State Educational Agency in the respective
state.
(2) The superintendent of the public
or private school system supervising
and administering the work-study program shall file with the Administrator
of the Wage and Hour Division a letter
of application for approval of the workstudy program as one not interfering
with schooling or with the health and
well-being of the minors involved and
therefore not constituting oppressive
child labor. The application shall be
filed at least sixty days before the
start of the school year and must include information concerning the criteria listed in paragraph (b)(3) of this
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Wage and Hour Division, Labor
§ 570.37
section. The Administrator of the Wage
and Hour Division shall approve the application, or give prompt notice of any
denial and the reasons therefor.
(3) The criteria to be used in consideration of applications under this section are the following:
(i) Eligibility. Any student 14 or 15
years of age, enrolled in a college preparatory curriculum, whom authoritative personnel from the school attended by the youth identify as being
able to benefit from the program shall
be able to participate.
(ii) Instructional schedule. Every
youth shall receive, every school year
he or she participates in the workstudy program, at least the minimum
number of hours of classroom instruction, as required by the State Educational Agency responsible for establishing such standards, to complete a
fully-accredited college preparatory
curriculum. Such classroom instruction shall include, every year the
youth participates in the work-study
program, training in workplace safety
and state and federal child labor provisions and rules.
(iii) Teacher-coordinator. Each school
participating in a work-study program
shall designate a teacher-coordinator
under whose supervision the program
will operate. The teacher-coordinator
shall generally supervise and coordinate the work and educational aspects
of the program and make regularly
scheduled visits to the workplaces of
the participating students to confirm
that minors participating in the workstudy program are employed in compliance with all applicable provisions of
this part and section 6 of the Fair
Labor Standards Act. Such confirmation shall be noted in any letters of application filed by the superintendent of
the public or private school system in
accordance with paragraph (b)(2) of
this section when seeking continuance
of its work-study program.
(iv) Written participation agreement.
No student shall participate in the
work-study program until there has
been made a written agreement signed
by the teacher-coordinator, the employer, and the student. The agreement
shall also be signed or otherwise consented to by the student’s parent or
guardian. The agreement shall detail
the objectives of the work-study program; describe the specific job duties
to be performed by the participating
minor as well as the number of hours
and times of day that the minor will be
employed each week; affirm that the
participant will receive the minimum
number of hours of class-room instruction as required by the State Educational Agency for the completion of
a fully-accredited college preparatory
curriculum; and affirm that the employment of the minor will be in compliance with the child labor provisions
of both this part and the laws of the
state where the work will be performed, and the applicable minimum
wage provisions contained in section 6
of the FLSA.
(v) Other provisions. Any other provisions of the program providing safeguards ensuring that the employment
permitted under this section will not
interfere with the schooling of the minors or with their health and wellbeing may also be submitted for use in
considering the application.
(4) Every public or private school district having students in a work-study
program approved pursuant to these requirements, and every employer employing students in a work-study program approved pursuant to these requirements, shall comply with the following:
(i) Permissible occupations. No student
shall be assigned to work in any occupation other than one permitted under
§ 570.34.
(ii) Records and reports. A copy of the
written agreement for each student
participating in the work-study program shall be kept by both the employer and the school supervising and
administering the program for a period
of three years from the date of the student’s enrollment in the program. Such
agreements shall be made available
upon request to the representatives of
the Administrator of the Wage and
Hour Division for inspection, transcription, and/or photocopying.
(c) Employment of minors enrolled in
a program approved pursuant to the requirements of this section shall be confined to not more than 18 hours in any
one week when school is in session, a
portion of which may be during school
hours, in accordance with the following
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29 CFR Ch. V (7–1–19 Edition)
formula that is based upon a continuous four-week cycle. In three of the
four weeks, the participant is permitted to work during school hours on
only one day per week, and for no more
than for eight hours on that day. During the remaining week of the fourweek cycle, such minor is permitted to
work during school hours on no more
than two days, and for no more than
for eight hours on each of those two
days. The employment of such minors
would still be subject to the time of
day and number of hours standards
contained in §§ 570.35(a)(2), (a)(3), (a)(4),
and (a)(6). To the extent that these provisions are inconsistent with the provisions of § 570.35, this section shall be
controlling.
(d) Programs shall be in force and effect for a period to be determined by
the Administrator of the Wage and
Hour Division, but in no case shall be
in effect for longer than two school
years from the date of their approval
by the Administrator of the Wage and
Hour Division. A new application for
approval must be filed at the end of
that period. Failure to meet the requirements of this section may result
in withdrawal of the approval.
§ 570.39 Effect of this subpart on other
laws.
No provision of this subpart shall
under any circumstances justify or be
construed to permit noncompliance
with the wage and hour provisions of
the act or with the provisions of any
other Federal law or of any State law
or municipal ordinance establishing
higher standards than those established under this subpart.
[16 FR 7008, July 20, 1951. Redesignated at 27
FR 4165, May 2, 1962, and 28 FR 1634, Feb. 21,
1963. Redesignated and amended at 36 FR
25156, Dec. 29, 1971. Redesignated at 75 FR
28452, May 20, 2010]
Subpart D [Reserved]
Subpart E—Occupations Particularly Hazardous for the Employment of Minors Between
16 and 18 Years of Age or
Detrimental to Their Health or
Well-Being
(The information collection requirements
contained in § 570.37 were approved by the Office of Management and Budget under control number 1235–0018)
AUTHORITY: 29 U.S.C. 203(l), 212, 213(c).
NOTE: The provisions of this subpart declaring certain occupations to be particularly hazardous for the employment of minors between 16 and 18 years of age or detrimental to their health or well-being do not
apply to employment in agriculture.
[75 FR 28452, May 20, 2010, as amended at 82
FR 2229, Jan. 9, 2017]
§ 570.50
§ 570.38 Effect of a certificate of age
under this subpart.
The employment of any minor in any
of the occupations to which this subpart is applicable, if confined to the periods specified in § 570.35, shall not be
deemed to constitute oppressive child
labor within the meaning of the act if
the employer shall have on file an unexpired certificate, issued in substantially the same manner as that provided for the issuance of certificates in
subpart A of this part relating to certificates of age, certifying that such
minor is of an age between 14 and 16
years.
[16 FR 7008, July 20, 1951. Redesignated at 27
FR 4165, May 2, 1962, and 28 FR 1634, Feb. 21,
1963. Redesignated and amended at 36 FR
25156, Dec. 29, 1971. Redesignated at 75 FR
28452, May 20, 2010]
General.
(a) Higher standards. Nothing in this
subpart shall authorize non-compliance
with any Federal or State law, regulation, or municipal ordinance establishing a higher standard. If more than
one standard within this subpart applies to a single activity the higher
standard shall be applicable.
(b) Apprentices. Some sections in this
subpart contain an exemption for the
employment of apprentices. Such an
exemption shall apply only when: (1)
The apprentice is employed in a craft
recognized as an apprenticeable trade;
(2) the work of the apprentice in the
occupations declared particularly hazardous is incidental to his training; (3)
such work is intermittent and for short
periods of time and is under the direct
and close supervision of a journeyman
as a necessary part of such apprentice
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Wage and Hour Division, Labor
§ 570.51
training; and (4) the apprentice is registered by the Bureau of Apprenticeship and Training of the United States
Department of Labor as employed in
accordance with the standards established by that Bureau, or is registered
by a State agency as employed in accordance with the standards of the
State apprenticeship agency recognized
by the Bureau of Apprenticeship and
Training, or is employed under a written apprenticeship agreement and conditions which are found by the Secretary of labor to conform substantially with such Federal or State
standards.
(c) Student-learners. Some sections in
this subpart contain an exemption for
the employment of student-learners.
Such an exemption shall apply when:
(1) The student-learner is enrolled in
a course of study and training in a cooperative vocational training program
under a recognized State or local educational authority or in a course of
study in a substantially similar program conducted by a private school
and;
(2) Such student-learner is employed
under a written agreement which provides:
(i) That the work of the studentlearner in the occupations declared
particularly hazardous shall be incidental to his training;
(ii) That such work shall be intermittent and for short periods of time, and
under the direct and close supervision
of a qualified and experienced person;
(iii) That safety instructions shall be
given by the school and correlated by
the employer with on-the-job training;
and
(iv) That a schedule of organized and
progressive work processes to be performed on the job shall have been prepared.
Each such written agreement shall
contain the name of student-learner,
and shall be signed by the employer
and the school coordinator or principal. Copies of each agreement shall
be kept on file by both the school and
the employer. This exemption for the
employment of student-learners may
be revoked in any individual situation
where it is found that reasonable precautions have not been observed for the
safety of minors employed thereunder.
A high school graduate may be employed in an occupation in which he
has completed training as provided in
this paragraph as a student-learner,
even though he is not yet 18 years of
age.
[28 FR 3449, Apr. 9, 1963, as amended at 33 FR
12777, Sept. 10, 1968. Redesignated and
amended at 36 FR 25156, Dec. 29, 1971]
§ 570.51 Occupations
in
or
about
plants or establishments manufacturing or storing explosives or articles containing explosive components (Order 1).
(a) Finding and declaration of fact. The
following occupations in or about
plants or establishments manufacturing or storing explosives or articles
containing explosive components are
particularly hazardous for minors between 16 and 18 years of age or detrimental to their health or well-being:
(1) All occupations in or about any
plant or establishment (other than retail establishments or plants or establishments of the type described in paragraph (a)(2) of this section) manufacturing or storing explosives or articles
containing explosive components except where the occupation is performed
in a ‘‘nonexplosives area’’ as defined in
paragraph (b)(3) of this section.
(2) The following occupations in or
about any plant or establishment manufacturing or storing small-arms ammunition not exceeding .60 caliber in
size, shotgun shells, or blasting caps
when manufactured or stored in conjunction with the manufacture of
small-arms ammunition:
(i) All occupations involved in the
manufacturing, mixing, transporting,
or handling of explosive compounds in
the manufacture of small-arms ammunition and all other occupations requiring the performance of any duties in
the explosives area in which explosive
compounds are manufactured or mixed.
(ii) All occupations involved in the
manufacturing, transporting, or handling of primers and all other occupations requiring the performance of any
duties in the same building in which
primers are manufactured.
(iii) All occupations involved in the
priming of cartridges and all other occupations requiring the performance of
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§ 570.52
29 CFR Ch. V (7–1–19 Edition)
any duties in the same workroom in
which rim-fire cartridges are primed.
(iv) All occupations involved in the
plate loading of cartridges and in the
operation of automatic loading machines.
(v) All occupations involved in the
loading, inspecting, packing, shipping
and storage of blasting caps.
(b) Definitions. For the purpose of this
section:
(1) The term plant or establishment
manufacturing or storing explosives or articles containing explosive component
means the land with all the buildings
and other structures thereon used in
connection with the manufacturing or
processing or storing of explosives or
articles containing explosive components.
(2) The terms explosives and articles
containing explosive components mean
and include ammunition, black powder,
blasting caps, fireworks, high explosives, primers, smokeless powder, and
explosives and explosive materials as
defined in 18 U.S.C. 841(c)–(f) and the
implementing regulations at 27 CFR
part 555. The terms include any chemical compound, mixture, or device, the
primary or common purpose of which is
to function by explosion, as well as all
goods identified in the most recent list
of explosive materials published by the
Bureau of Alcohol, Tobacco, Firearms,
and Explosives, Department of Justice.
This list is not intended to be all-inclusive and is updated and published annually in the FEDERAL REGISTER pursuant
to 18 U.S.C. 841(d). A copy of the most
recent version of the list may be found
through the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ Web
site at http://www.atf.gov.
(3) An area meeting all of the criteria
in paragraphs (b)(3) (i) through (iv) of
this section shall be deemed a ‘‘nonexplosives area’’:
(i) None of the work performed in the
area involves the handling or use of explosives;
(ii) The area is separated from the explosives area by a distance not less
than that prescribed in the American
Table of Distances for the protection of
inhabited buildings;
(iii) The area is separated from the
explosives area by a fence or is other-
wise located so that it constitutes a
definite designated area; and
(iv) Satisfactory controls have been
established to prevent employees under
18 years of age within the area from entering any area in or about the plant
which does not meet criteria of paragraphs (b)(3) (i) through (iii) of this
section.
[17 FR 4324, May 13, 1952. Redesignated at 28
FR 1634, Feb. 21, 1963, and amended at 28 FR
3449, Apr. 9, 1963. Redesignated and amended
at 36 FR 25156, Dec. 29, 1971; 69 FR 75403, Dec.
16, 2004]
§ 570.52 Occupations of motor-vehicle
driver and outside helper (Order 2).
(a) Findings and declaration of fact.
Except as provided in paragraph (b) of
this section, the occupations of motorvehicle driver and outside helper on
any public road, highway, in or about
any mine (including open pit mine or
quarry), place where logging or sawmill
operations are in progress, or in any
excavation of the type identified in
§ 570.68(a) are particularly hazardous
for the employment of minors between
16 and 18 years of age.
(b) Exemption—Incidental and occasional driving by 17-year-olds. Minors
who are at least 17 years of age may
drive automobiles and trucks on public
roadways when all the following criteria are met:
(1) The automobile or truck does not
exceed 6,000 pounds gross vehicle
weight, and the vehicle is equipped
with a seat belt or similar restraining
device for the driver and for any passengers and the employer has instructed the employee that such belts
or other devices must be used;
(2) The driving is restricted to daylight hours;
(3) The minor holds a State license
valid for the type of driving involved in
the job performed and has no records of
any moving violations at the time of
hire;
(4) The minor has successfully completed a State-approved driver education course;
(5) The driving does not involve: the
towing of vehicles; route deliveries or
route sales; the transportation for hire
of property, goods, or passengers; urgent, time-sensitive deliveries; or the
transporting at any one time of more
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Wage and Hour Division, Labor
§ 570.53
than three passengers, including the
employees of the employer;
(6) The driving performed by the
minor does not involve more than two
trips away from the primary place of
employment in any single day for the
purpose of delivering goods of the minor’s employer to a customer (except
urgent, time-sensitive deliveries which
are completely banned in paragraph
(b)(5) of this section;
(7) The driving performed by the
minor does not involve more than two
trips away from the primary place of
employment in any single day for the
purpose of transporting passengers
(other than the employees of the employer);
(8) The driving takes place within a
thirty (30) mile radius of the minor’s
place of employment; and,
(9) The driving is only occasional and
incidental to the employee’s employment.
(c) Definitions. For the purpose of this
section:
(1) The term motor vehicle shall mean
any automobile, truck, truck-tractor,
trailer, semitrailer, motorcycle, or
similar vehicle propelled or drawn by
mechanical power and designed for use
as a means of transportation but shall
not include any vehicle operated exclusively on rails.
(2) The term driver shall mean any individual who, in the course of employment, drives a motor vehicle at any
time.
(3) The term outside helper shall mean
any individual, other than a driver,
whose work includes riding on a motor
vehicle outside the cab for the purpose
of assisting in transporting or delivering goods.
(4) The term gross vehicle weight includes the truck chassis with lubricants, water and a full tank or tanks of
fuel, plus the weight of the cab or driver’s compartment, body and special
chassis and body equipment, and payload.
(5) The term occasional and incidental
means no more than one-third of an
employee’s worktime in any workday
and no more than 20 percent of an employee’s worktime in any workweek.
(6) The term urgent, time-sensitive deliveries means trips which, because of
such factors as customer satisfaction,
the rapid deterioration of the quality
or change in temperature of the product, and/or economic incentives, are
subject to time-lines, schedules, and/or
turn-around times which might impel
the driver to hurry in the completion
of the delivery. Prohibited trips would
include, but are not limited to, the delivery of pizzas and prepared foods to
the customer; the delivery of materials
under a deadline (such as deposits to a
bank at closing); and the shuttling of
passengers to and from transportation
depots to meet transport schedules. Urgent, time-sensitive deliveries would not
depend on the delivery’s points of origin and termination, and would include
the delivery of people and things to the
employer’s place of business as well as
from that business to some other location.
[56 FR 58630, Nov. 20, 1991, as amended at 69
FR 75403, Dec. 16, 2004]
§ 570.53
3).
Coal-mine occupations (Order
(a) Finding and declaration of fact. All
occupations in or about any coal mine,
except the occupation of slate or other
refuse picking at a picking table or
picking chute in a tipple or breaker
and occupations requiring the performance of duties solely in offices or in repair or maintenance shops located in
the surface part of any coal-mining
plant, are particularly hazardous for
the employment of minors between 16
and 18 years of age.
(b) Definitions. For the purpose of this
section:
(1) The term coal shall mean any
rank of coal including lignite, bituminous, and the anthracite coals.
(2) The term all occupations in or
about any coal mine shall mean all
types of work performed in any underground working, open-pit, or surface
part of any coal-mining plant, that
contribute to the extraction, grading,
cleaning, or other handling of coal.
[16 FR 7008, July 20, 1951. Redesignated at 28
FR 1634, Feb. 21, 1963, and amended at 28 FR
3449, Apr. 9, 1963. Redesignated and amended
at 36 FR 25156, Dec. 29, 1971]
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§ 570.54
29 CFR Ch. V (7–1–19 Edition)
§ 570.54 Forest fire fighting and forest
fire prevention occupations, timber
tract occupations, forestry service
occupations, logging occupations,
and occupations in the operation of
any sawmill, lath mill, shingle mill,
or cooperage stock mill (Order 4).
(a) Finding and declarations of fact.
All occupations in forest fire fighting
and forest fire prevention, in timber
tracts, in forestry services, logging,
and the operation of any sawmill, lath
mill, shingle mill, or cooperage stock
mill are particularly hazardous for the
employment of minors between 16 and
18 years of age, except the following
when not prohibited by any other section of this subpart:
(1) Work in offices or in repair or
maintenance shops.
(2) Work in the construction, operation, repair, or maintenance of living
and administrative quarters, including
logging camps and fire fighting base
camps.
(3) Work in the repair or maintenance of roads, railroads or flumes and
work in construction and maintenance
of telephone lines, but only if the minors are not engaged in the operation
of power-driven machinery, the handling or use of explosives, the felling or
bucking of timber, the collecting or
transporting of logs, or work on trestles.
(4) The following tasks in forest fire
prevention provided none of these tasks
may be performed in conjunction with
or in support of efforts to extinguish a
forest fire: the clearing of fire trails or
roads; the construction, maintenance,
and patrolling of fire lines; the piling
and burning of slash; the maintaining
of fire fighting equipment; and acting
as a fire lookout or fire patrolman.
(5) Work related to forest marketing
and forest economics when performed
away from the forest.
(6) Work in the feeding or care of animals.
(7) Peeling of fence posts, pulpwood,
chemical wood, excelsior wood, cordwood, or similar products, when not
done in conjunction with and at the
same time and place as other logging
occupations declared hazardous by this
section.
(8) The following additional exceptions apply to the operation of a per-
manent sawmill or the operation of
any lath mill, shingle mill, or cooperage stock mill, but not to a portable
sawmill. In addition, the following exceptions do not apply to work which
entails entering the sawmill building,
except for those minors whose employment meets the requirements of the
limited
exemptions
discussed
in
§§ 570.34(m) and 570.54(c):
(i) Straightening, marking, or tallying lumber on the dry chain or the
dry drop sorter.
(ii) Pulling lumber from the dry
chain, except minors under 16 years of
age may not pull lumber from the dry
chain as such youth are prohibited
from operating or tending power-driven
machinery by § 570.33(e) of this part.
(iii) Clean-up in the lumberyard.
(iv) Piling, handling, or shipping of
cooperage stock in yards or storage
sheds other than operating or assisting
in the operation of power-driven equipment; except minors under 16 years of
age may not perform shipping duties as
they are prohibited from employment
in occupations in connection with the
transportation of property by rail,
highway, air, water, pipeline, or other
means by § 570.33(n)(1) of this part.
(v) Clerical work in yards or shipping
sheds, such as done by ordermen, tallymen, and shipping clerks.
(vi) Clean-up work outside shake and
shingle mills, except when the mill is
in operation.
(vii) Splitting shakes manually from
precut and split blocks with a froe and
mallet, except inside the mill building
or cover.
(viii) Packing shakes into bundles
when done in conjunction with splitting shakes manually with a froe and
mallet, except inside the mill building
or cover.
(ix) Manual loading of bundles of
shingles or shakes into trucks or railroad cars, provided that the employer
has on file a statement from a licensed
doctor of medicine or osteopathy certifying the minor capable of performing
this work without injury to himself,
except minors under 16 years of age
may not load bundles of shingles or
shakes into trucks or railroad cars as
they are prohibited from loading and
unloading goods or property onto or
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Wage and Hour Division, Labor
§ 570.54
from motor vehicles, railroad cars, or
conveyors by § 570.33(k) of this part.
(b) Definitions. As used in this section:
All occupations in forest fire fighting
and forest fire prevention shall include
the controlling and extinguishing of
fires, the wetting down of areas or extinguishing of spot fires, and the patrolling of burned areas to assure the
fire has been extinguished. The term
shall also include the following tasks
when performed in conjunction with, or
in support of, efforts to extinguish a
forest fire: the piling and burning of
slash; the clearing of fire trails or
roads; the construction, maintenance,
and patrolling of fire lines; acting as a
fire lookout or fire patrolman; and the
maintaining of fire fighting equipment.
The prohibition concerning the employment of youth in forest fire fighting and fire prevention applies to all
forest and timber tract locations, logging operations, and sawmill operations, including all buildings located
within such areas.
All occupations in forestry services
shall mean all work involved in the
support of timber production, wood
technology, forestry economics and
marketing, and forest protection. The
term includes such services as timber
cruising, surveying, or logging-engineering parties; estimating timber;
timber valuation; forest pest control;
forest fire fighting and forest fire prevention as defined in this section; and
reforestation. The term shall not include work in forest nurseries, establishments primarily engaged in growing trees for purposes of reforestation.
The term shall not include the gathering of forest products such as balsam
needles, ginseng, huckleberry greens,
maple sap, moss, Spanish moss,
sphagnum moss, teaberries, and tree
seeds; the distillation of gum, turpentine, and rosin if carried on at the gum
farm; and the extraction of pine gum.
All occupations in logging shall mean
all work performed in connection with
the felling of timber; the bucking or
converting of timber into logs, poles,
piles, ties, bolts, pulpwood, chemical
wood, excelsior wood, cordwood, fence
posts, or similar products; the collecting, skidding, yarding, loading,
transporting and unloading of such
products in connection with logging;
the constructing, repairing and maintaining of roads, railroads, flumes, or
camps used in connection with logging;
the moving, installing, rigging, and
maintenance of machinery or equipment used in logging; and other work
performed in connection with logging.
All occupations in the operation of any
sawmill, lath mill, shingle mill, or cooperage-stock mill shall mean all work performed in or about any such mill in
connection with storing of logs and
bolts; converting logs or bolts into
sawn lumber, lathers, shingles, or cooperage stock; storing drying, and shipping lumber, laths, shingles, cooperage
stock, or other products of such mills;
and other work performed in connection with the operation of any sawmill,
lath mill, shingle mill, or cooperagestock mill. The term shall not include
work performed in the planing-mill department or other remanufacturing departments of any sawmill or remanufacturing plant not a part of a sawmill.
All occupations in timber tracts means
all work performed in or about establishments that cultivate, manage or
sell standing timber. The term includes
work performed in timber culture, timber tracts, timber-stand improvement,
and forest fire fighting and fire prevention. It includes work on tree farms,
except those tree farm establishments
that meet the definition of agriculture
contained in 29 U.S.C. 203(f).
Inside or outside places of business
shall mean the actual physical location
of the establishment employing the
youth, including the buildings and surrounding land necessary to the business operations of that establishment.
Operate or assist in the operation of
power-driven woodworking machines includes operating such machines, including supervising or controlling the
operation of such machines, feeding
material into such machines, helping
the operator feed material into such
machines, unloading materials from
such machines, and helping the operator unload materials from such machines. The term also includes the occupations of setting-up, adjusting, repairing, oiling, or cleaning such machines.
Places of business where machinery is
used to process wood products shall mean
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§ 570.55
29 CFR Ch. V (7–1–19 Edition)
such permanent workplaces as sawmills, lath mills, shingle mills, cooperage stock mills, furniture and cabinet making shops, gazebo and shed
making shops, toy manufacturing
shops, and pallet shops. The term shall
not include construction sites, portable
sawmills, areas where logging is being
performed, or mining operations.
Portable
sawmill
shall
mean
a
sawmilling operation where no office
or repair or maintenance shop is ordinarily maintained, and any lumberyard
operated in conjunction with the sawmill is used only for the temporary
storage of green lumber.
Power-driven woodworking machines
shall mean all fixed or portable machines or tools driven by power and
used or designed for cutting, shaping,
forming, surfacing, nailing, stapling,
wire stitching, fastening or otherwise
assembling, pressing or printing wood,
veneer, trees, logs, or lumber.
Remanufacturing
department
shall
mean those departments of a sawmill
where lumber products such as boxes,
lawn furniture, and the like are remanufactured from previously cut lumber. The kind of work performed in
such departments is similar to that
done in planing mill departments in
that rough lumber is surfaced or made
into other finished products. The term
is not intended to denote those operations in sawmills where rough lumber
is cut to dimensions.
Supervised by an adult relative or is supervised by an adult member of the same
religious sect or division as the youth, as
a term, has several components. Supervised refers to the requirement that the
youth’s on-the-job activities be directed, monitored, and controlled by
certain named adults. Such supervision
must be close, direct, constant and uninterrupted. An adult shall mean an individual who is at least eighteen years
of age. A relative shall mean the parent
(or someone standing in place of a parent), grandparent, sibling, uncle, or
aunt of the young worker. A member of
the same religious sect or division as the
youth refers to an individual who professes membership in the same religious sect or division to which the
youth professes membership.
(c) Exemptions. (1) The provisions contained in paragraph (a)(8) of this sec-
tion that prohibit youth between 16
and 18 years of age from performing
any work that entails entering the
sawmill building do not apply to the
employment of a youth who is at least
14 years of age and less than 18 years of
age and who by statute or judicial
order is exempt from compulsory
school attendance beyond the eighth
grade, if:
(i) The youth is supervised by an
adult relative or by an adult member of
the same religious sect or division as
the youth;
(ii) The youth does not operate or assist in the operation of power-driven
woodworking machines;
(iii) The youth is protected from
wood particles or other flying debris
within the workplace by a barrier appropriate to the potential hazard of
such wood particles or flying debris or
by maintaining a sufficient distance
from machinery in operation; and
(iv) The youth is required to use, and
uses, personal protective equipment to
prevent exposure to excessive levels of
noise and saw dust.
(2) Compliance with the provisions of
paragraphs (c)(1)(iii) and (iv) of this
section will be accomplished when the
employer is in compliance with the requirements of the applicable governing
standards issued by the U.S. Department of Labor’s Occupational Safety
and Health Administration (OSHA) or,
in those areas where OSHA has authorized the state to operate its own Occupational Safety and Health Plan, the
applicable standards issued by the Office charged with administering the
State Occupational Safety and Health
Plan.
[75 FR 28453, May 20, 2010]
§ 570.55 Occupations involved in the
operation of power-driven woodworking machines (Order 5).
(a) Finding and declaration of fact. The
following occupations involved in the
operation of power-driven wood-working machines are particularly hazardous for minors between 16 and 18
years of age:
(1) The occupation of operating
power-driven woodworking machines,
including supervising or controlling
the operation of such machines, feeding
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§ 570.57
material into such machines, and helping the operator to feed material into
such machines but not including the
placing of material on a moving chain
or in a hopper or slide for automatic
feeding.
(2) The occupations of setting up, adjusting, repairing, oiling, or cleaning
power-driven woodworking machines.
(3) The occupations of off-bearing
from circular saws and from guillotineaction veneer clippers.
(b) Definitions. As used in this section:
Off-bearing shall mean the removal of
material or refuse directly from a saw
table or from the point of operation.
Operations not considered as off-bearing within the intent of this section include:
(i) The removal of material or refuse
from a circular saw or guillotine-action veneer clipper where the material
or refuse has been conveyed away from
the saw table or point of operation by
a gravity chute or by some mechanical
means such as a moving belt or expulsion roller; and
(ii) The following operations when
they do not involve the removal of materials or refuse directly from a saw
table or point of operation: The carrying, moving, or transporting of materials from one machine to another or
from one part of a plant to another; the
piling, stacking, or arranging of materials for feeding into a machine by another person; and the sorting, tying,
bundling, or loading of materials.
Power-driven woodworking machines
shall mean all fixed or portable machines or tools driven by power and
used or designed for cutting, shaping,
forming, surfacing, nailing, stapling,
wire stitching, fastening or otherwise
assembling, pressing or printing wood,
veneer, trees, logs, or lumber.
(c) Exemptions. This section shall not
apply to the employment of apprentices or student-learners under the conditions prescribed in § 570.50 (b) and (c).
[16 FR 7008, July 20, 1951. Redesignated at 28
FR 1634, Feb. 21, 1963, and amended at 28 FR
3449, Apr. 9, 1963. Redesignated and amended
at 36 FR 25156, Dec. 29, 1971; 75 FR 28455, May
20, 2010]
§ 570.57 Exposure to radioactive substances and to ionizing radiations
(Order 6).
(a) Finding and declaration of fact. The
following occupations involving exposure to radioactive substances and to
ionizing radiations are particularly
hazardous and detrimental to health
for minors between 16 and 18 years of
age:
(1) Any work in any workroom in
which (i) radium is stored or used in
the manufacture of self-luminous compound, (ii) self-luminous compound is
made, processed, or packaged, (iii) selfluminous compound is stored, used, or
worked upon, (iv) incandescent mantles
are made from fabric and solutions
containing thorium salts, or are processed or packaged, (v) other radioactive substances are present in the air
in average concentrations exceeding 10
percent of the maximum permissible
concentrations in the air recommended
for occupational exposure by the National Committee on Radiation Protection, as set forth in the 40-hour week
column of table one of the National Bureau of Standards Handbook No. 69 entitled ‘‘Maximum Permissible Body
Burdens and Maximum Permissible
Concentrations of Radionuclides in Air
and in Water for Occupational Exposure,’’ issued June 5, 1959.
(2) Any other work which involves
exposure to ionizing radiations in excess of 0.5 rem per year.
(b) Definitions. As used in this section:
(1) The term self-luminous compound
shall mean any mixture of phosphorescent
material
and
radium,
mesothorium, or other radioactive element;
(2) The term workroom shall include
the entire area bounded by walls of
solid material and extending from floor
to ceiling;
(3) The term ionizing radiations shall
mean alpha and beta particles, electrons, protons, neutrons, gamma and
X-ray and all other radiations which
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§ 570.58
29 CFR Ch. V (7–1–19 Edition)
produce ionizations directly or indirectly, but does not include electromagnetic radiations other than gamma
and X-ray.
[22 FR 3657, May 24, 1957, as amended at 26
FR 8885, Sept. 21, 1961. Redesignated at 28 FR
1634, Feb. 21, 1963, and amended at 28 FR 3449,
Apr. 9, 1963. Redesignated and amended at 36
FR 25156, Dec. 29, 1971]
§ 570.58 Occupations involved in the
operation of power-driven hoisting
apparatus (Order 7).
(a) Findings and declaration of fact.
The following occupations involved in
the operation of power-driven hoisting
apparatus are particularly hazardous
for minors between 16 and 18 years of
age:
(1) Work of operating, tending, riding
upon, working from, repairing, servicing, or disassembling an elevator,
crane, derrick, hoist, or high-lift truck,
except operating or riding inside an unattended automatic operation passenger elevator. Tending such equipment includes assisting in the hoisting
tasks being performed by the equipment.
(2) Work of operating, tending, riding
upon, working from, repairing, servicing, or disassembling a manlift or
freight elevator, except 16- and 17-yearolds may ride upon a freight elevator
operated by an assigned operator.
Tending such equipment includes assisting in the hoisting tasks being performed by the equipment.
(b) Definitions. As used in this section:
Crane shall mean a power-driven machine for lifting and lowering a load
and moving it horizontally, in which
the hoisting mechanism is an integral
part of the machine. The term shall include all types of cranes, such as cantilever gantry, crawler, gantry, hammerhead, ingot pouring, jib, locomotive,
motor-truck, overhead traveling, pillar
jib, pintle, portal, semi-gantry, semiportal, storage bridge, tower, walking
jib, and wall cranes.
Derrick shall mean a power-driven apparatus consisting of a mast or equivalent members held at the top by guys
or braces, with or without a boom, for
use with a hoisting mechanism or operating ropes. The term shall include all
types of derricks, such as A-frame,
breast, Chicago boom, gin-pole, guy,
and stiff-leg derrick.
Elevator shall mean any power-driven
hoisting
or
lowering
mechanism
equipped with a car or platform which
moves in guides in a substantially
vertical direction. The term shall include both passenger and freight elevators (including portable elevators or
tiering machines), but shall not include
dumbwaiters.
High-lift truck shall mean a powerdriven industrial type of truck used for
lateral transportation that is equipped
with a power-operated lifting device
usually in the form of a fork or platform capable of tiering loaded pallets
or skids one above the other. Instead of
a fork or a platform, the lifting device
may consist of a ram, scoop, shovel,
crane, revolving fork, or other attachments for handling specific loads. The
term shall mean and include highlift
trucks known under such names as
fork lifts, fork trucks, fork lift trucks,
tiering trucks, backhoes, front-end
loaders, skid loaders, skid-steer loaders, Bobcat loaders, or stacking trucks,
but shall not mean low-lift trucks or
low-lift platform trucks that are designed for the transportation of but not
the tiering of materials.
Hoist shall mean a power-driven apparatus for raising or lowering a load by
the application of a pulling force that
does not include a car or platform running in guides. The term shall include
all types of hoists, such as base mounted electric, clevis suspension, hook suspension, monorail, overhead electric,
simple drum, and trolley suspension
hoists.
Manlift shall mean a device intended
for the conveyance of persons that consists of platforms or brackets mounted
on, or attached to, an endless belt,
cable, chain or similar method of suspension; with such belt, cable or chain
operating in a substantially vertical direction and being supported by and
driven through pulleys, sheaves or
sprockets at the top and bottom. The
term shall also include truck- or equipment-mounted aerial platforms commonly referred to as scissor lifts,
boom-type mobile elevating work platforms, work assist vehicles, cherry
pickers, basket hoists, and bucket
trucks.
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Wage and Hour Division, Labor
§ 570.59
(c) Exception. (1) This section shall
not prohibit the operation of an automatic elevator and an automatic signal
operation elevator provided that the
exposed portion of the car interior (exclusive of vents and other necessary
small openings), the car door, and the
hoistway doors are constructed of solid
surfaces without any opening through
which a part of the body may extend;
all hoistway openings at floor level
have doors which are interlocked with
the car door so as to prevent the car
from starting until all such doors are
closed and locked; the elevator (other
than hydraulic elevators) is equipped
with a device which will stop and hold
the car in case of overspeed or if the
cable slackens or breaks; and the elevator is equipped with upper and lower
travel limit devices which will normally bring the car to rest at either
terminal and a final limit switch which
will prevent the movement in either direction and will open in case of excessive over travel by the car.
(2) For the purpose of this exception
the term automatic elevator shall mean
a passenger elevator, a freight elevator, or a combination passenger-freight
elevator, the operation of which is controlled by pushbuttons in such a manner that the starting, going to the
landing selected, leveling and holding,
and the opening and closing of the car
and hoistway doors are entirely automatic.
(3) For the purpose of this exception,
the term automatic signal operation elevator shall mean an elevator which is
started in response to the operation of
a switch (such as a lever or pushbutton) in the car which when operated
by the operator actuates a starting device that automatically closes the car
and hoistway doors—from this point
on, the movement of the car to the
landing selected, leveling and holding
when it gets there, and the opening of
the car and hoistway doors are entirely
automatic.
[16 FR 7008, July 20, 1951, as amended at 20
FR 6386, Aug. 31, 1955. Redesignated at 28 FR
1634, Feb. 21, 1963, and amended at 28 FR 3449,
Apr. 9, 1963; 32 FR 15479, Nov. 7, 1967. Redesignated and amended at 36 FR 25156, Dec. 29,
1971; 75 FR 28455, May 20, 2010]
§ 570.59 Occupations involved in the
operation of power-driven metal
forming, punching, and shearing
machines (Order 8).
(a) Finding and declaration of fact. The
following occupations are particularly
hazardous for the employment of minors between 16 and 18 years of age:
(1) The occupations of operator of or
helper on the following power-driven
metal forming, punching, and shearing
machines:
(i) All rolling machines, such as
beading, straightening, corrugating,
flanging, or bending rolls; and hot or
cold rolling mills.
(ii) All pressing or punching machines, such as punch presses except
those provided with full automatic feed
and ejection and with a fixed barrier
guard to prevent the hands or fingers
of the operator from entering the area
between the dies; power presses; and
plate punches.
(iii) All bending machines, such as
apron brakes and press brakes.
(iv) All hammering machines, such as
drop hammers and power hammers.
(v) All shearing machines, such as
guillotine or squaring shears; alligator
shears; and rotary shears.
(2) The occupations of setting up, adjusting, repairing, oiling, or cleaning
these machines including those with
automatic feed and ejection.
(b) Definitions. (1) The term operator
shall mean a person who operates a
machine covered by this section by performing such functions as starting or
stopping the machine, placing materials into or removing them from the
machine, or any other functions directly involved in operation of the machine.
(2) The term helper shall mean a person who assists in the operation of a
machine covered by this section by
helping place materials into or remove
them from the machine.
(3) The term forming, punching, and
shearing machines shall mean powerdriven metal-working machines, other
than machine tools, which change the
shape of or cut metal by means of
tools, such as dies, rolls, or knives
which are mounted on rams, plungers,
or other moving parts. Types of forming, punching, and shearing machines
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§ 570.60
29 CFR Ch. V (7–1–19 Edition)
enumerated in this section are the machines to which the designation is by
custom applied.
(c) Exemptions. This section shall not
apply to the employment of apprentices or student-learners under the conditions prescribed in § 570.50 (b) and (c).
[16 FR 7008, July 20, 1951, as amended at 25
FR 9848, Oct. 14, 1960. Redesignated at 28 FR
1634, Feb. 21, 1963, and amended at 28 FR 3449,
Apr. 9, 1963. Redesignated at 36 FR 25156, Dec.
29, 1971]
§ 570.60 Occupations in connection
with mining, other than coal (Order
9).
(a) Finding and declaration of fact. All
occupations in connection with mining,
other than coal, are particularly hazardous for the employment of minors
between 16 and 18 years of age or detrimental to their health or well-being
and employment in such occupations is
therefore prohibited under section 12 of
the Fair Labor Standards Act, as
amended, except the following:
(1) Work in offices, in the warehouse
or supply house, in the change house,
in the laboratory, and in repair or
maintenance shops not located underground.
(2) Work in the operation and maintenance of living quarters.
(3) Work outside the mine in surveying, in the repair and maintenance
of roads, and in general clean-up about
the mine property such as clearing
brush and digging drainage ditches.
(4) Work of track crews in the building and maintaining of sections of railroad track located in those areas of
open-cut metal mines where mining
and haulage activities are not being
conducted at the time and place that
such building and maintenance work is
being done.
(5) Work in or about surface placer
mining operations other than placer
dredging operations and hydraulic
placer mining operations.
(6) The following work in metal mills
other than in mercury-recovery mills
or mills using the cyanide process:
(i) Work involving the operation of
jigs, sludge tables, flotation cells, or
drier-filters;
(ii) Work of hand-sorting at picking
table or picking belt;
(iii) General clean-up work:
Provided, however, That nothing in this
section shall be construed as permitting employment of minors in any occupation prohibited by any other hazardous occupations order issued by the
Secretary of Labor.
(b) Definitions. As used in this section: The term all occupations in connection with mining, other than coal
shall mean all work performed underground in mines and quarries; on the
surface at underground mines and underground quarries; in or about opencut mines, open quarries, clay pits, and
sand and gravel operations; at or about
placer mining operations; at or about
dredging operations for clay, sand or
gravel; at or about bore-hole mining
operations; in or about all metal mills,
washer plants, or grinding mills reducing the bulk of the extracted minerals;
and at or about any other crushing,
grinding, screening, sizing, washing or
cleaning operations performed upon
the extracted minerals except where
such operations are performed as a part
of a manufacturing process. The term
shall not include work performed in
subsequent manufacturing or processing operations, such as work performed in smelters, electro-metallurgical
plants,
refineries
reduction
plants, cement mills, plants where
quarried stone is cut, sanded and further processed, or plants manufacturing clay glass or ceramic products.
Neither shall the term include work
performed in connection with coal mining, in petroleum production, in natural-gas production, nor in dredging
operations which are not a part of mining operations, such as dredging for
construction or navigation purposes.
[16 FR 7008, July 20, 1951. Redesignated at 28
FR 1634, Feb. 21, 1963, and amended at 28 FR
3449, Apr. 9, 1963. Redesignated at 36 FR 25156,
Dec. 29, 1971]
§ 570.61 Occupations in the operation
of power-driven meat-processing
machines and occupations involving slaughtering, meat and poultry
packing, processing, or rendering
(Order 10).
(a) Findings and declaration of fact.
The following occupations in or about
slaughtering and meat packing establishments, rendering plants, or wholesale, retail or service establishments
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Wage and Hour Division, Labor
§ 570.61
are particularly hazardous for the employment of minors between 16 and 18
years of age or detrimental to their
health or well-being:
(1) All occupations on the killing
floor, in curing cellars, and in hide cellars, except the work of messengers,
runners, handtruckers, and similar occupations which require entering such
workrooms or workplaces infrequently
and for short periods of time.
(2) All occupations involved in the recovery of lard and oils, except packaging and shipping of such products
and the operation of lard-roll machines.
(3) All occupations involved in tankage or rendering of dead animals, animal offal, animal fats, scrap meats,
blood, and bones into stock feeds, tallow, inedible greases, fertilizer ingredients, and similar products.
(4) All occupations involved in the
operation or feeding of the following
power-driven machines, including setting-up, adjusting, repairing, or oiling
such machines or the cleaning of such
machines or the individual parts or attachments of such machines, regardless
of the product being processed by these
machines (including, for example, the
slicing in a retail delicatessen of meat,
poultry, seafood, bread, vegetables, or
cheese, etc.): meat patty forming machines, meat and bone cutting saws,
poultry scissors or shears; meat slicers,
knives (except bacon-slicing machines),
headsplitters, and guillotine cutters;
snoutpullers and jawpullers; skinning
machines; horizontal rotary washing
machines; casing-cleaning machines
such as crushing, stripping, and finishing machines; grinding, mixing,
chopping, and hashing machines; and
presses (except belly-rolling machines).
Except, the provisions of this subsection shall not apply to the operation
of those lightweight, small capacity,
portable, countertop mixers discussed
in § 570.62(b)(1) of this chapter when
used as a mixer to process materials
other than meat or poultry.
(5) All boning occupations.
(6) All occupations that involve the
pushing or dropping of any suspended
carcass, half carcass, or quarter carcass.
(7) All occupations involving the
handlifting or handcarrying any car-
cass or half carcass of beef, pork, horse,
deer, or buffalo, or any quarter carcass
of beef, horse, or buffalo.
(b) Definitions. As used in this section:
Boning occupations means the removal of bones from meat cuts. It does
not include work that involves cutting,
scraping, or trimming meat from cuts
containing bones.
Curing cellar includes a workroom or
workplace which is primarily devoted
to the preservation and flavoring of
meat, including poultry, by curing materials. It does not include a workroom
or workplace solely where meats are
smoked.
Hide cellar includes a workroom or
workplace where hides are graded,
trimmed, salted, and otherwise cured.
Killing floor includes a workroom,
workplace where such animals as cattle, calves, hogs, poultry, sheep, lambs,
goats, buffalo, deer, or horses are immobilized, shackled, or killed, and the
carcasses are dressed prior to chilling.
Retail/wholesale or service establishments include establishments where
meat or meat products, including poultry, are processed or handled, such as
butcher shops, grocery stores, restaurants and quick service food establishments, hotels, delicatessens, and
meat locker (freezer-locker) companies, and establishments where any
food product is prepared or processed
for serving to customers using machines prohibited by paragraph (a) of
this section.
Rendering plants means establishments engaged in the conversion of
dead animals, animal offal, animal
fats, scrap meats, blood, and bones into
stock feeds, tallow, inedible greases,
fertilizer ingredients, and similar products.
Slaughtering and meat packing establishments means places in or about
which such animals as cattle, calves,
hogs, poultry, sheep, lambs, goats, buffalo, deer, or horses are killed, butchered, or processed. The term also includes establishments which manufacture or process meat or poultry products, including sausage or sausage casings from such animals.
(c) Exemptions. This section shall not
apply to:
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§ 570.62
29 CFR Ch. V (7–1–19 Edition)
(1) The killing and processing of rabbits or small game in areas physically
separated from the killing floor.
(2) The employment of apprentices or
student-learners under the conditions
prescribed in § 570.50(b) and (c).
[56 FR 58631, Nov. 20, 1991, as amended at 75
FR 28455, May 20, 2010]
§ 570.62 Occupations involved in the
operation of bakery machines
(Order 11).
(a) Finding and declaration of fact. The
following occupations involved in the
operation of power-driven bakery machines are particularly hazardous for
the employment of minors between 16
and 18 years of age:
(1) The occupations of operating, assisting to operate, or setting up, adjusting, repairing, oiling, or cleaning
any horizontal or vertical dough mixer;
batter mixer; bread dividing, rounding,
or molding machine; dough brake;
dough sheeter; combination bread slicing and wrapping machine; or cake cutting band saw.
(2) The occupation of setting up or
adjusting a cookie or cracker machine.
(b) Exceptions. (1) This section shall
not apply to the operation, including
the setting up, adjusting, repairing,
oiling and cleaning, of lightweight,
small capacity, portable counter-top
power-driven food mixers that are, or
are comparable to, models intended for
household use. For purposes of this exemption, a lightweight, small capacity
mixer is one that is not hardwired into
the establishment’s power source, is
equipped with a motor that operates at
no more than 1⁄2 horsepower, and is
equipped with a bowl with a capacity of
no more than five quarts. Except, this
exception shall not apply when the
mixer is used, with or without attachments, to process meat or poultry
products as prohibited by § 570.61(a)(4).
(2) This section shall not apply to the
operation of pizza-dough rollers, a type
of dough sheeter, that: have been constructed with safeguards contained in
the basic design so as to prevent fingers, hands, or clothing from being
caught in the in-running point of the
rollers; have gears that are completely
enclosed; and have microswitches that
disengage the machinery if the backs
or sides of the rollers are removed.
This exception applies only when all
the safeguards detailed in this paragraph are present on the machine, are
operational, and have not been overridden. This exception does not apply
to the setting up, adjusting, repairing,
oiling or cleaning of such pizza-dough
rollers.
[17 FR 5610, June 21, 1952, as amended at 25
FR 9849, Oct. 14, 1960. Redesignated at 28 FR
1634, Feb. 21, 1963, and amended at 28 FR 3449,
Apr. 9, 1963. Redesignated and amended at 36
FR 25156, Dec. 29, 1971; 75 FR 28456, May 20,
2010]
§ 570.63 Occupations involved in the
operation of balers, compactors,
and
paper-products
machines
(Order 12).
(a) Findings and declaration of fact.
The following occupations are particularly hazardous for the employment of
minors between 16 and 18 years of age:
(1) The occupations of operation or
assisting to operate any of the following power-driven paper products
machines:
(i) Arm-type wire stitcher or stapler,
circular or band saw, corner cutter or
mitering machine, corrugating and single-or-double facing machine, envelope
die-cutting press, guillotine paper cutter or shear, horizontal bar scorer,
laminating or combining machine,
sheeting machine, scrap paper baler,
paper box compactor, or vertical
slotter.
(ii) Platen die-cutting press, platen
printing press, or punch press which involves hand feeding of the machine.
(2) The occupations of operation or
assisting to operate any baler that is
designed or used to process materials
other than paper.
(3) The occupations of operation or
assisting to operate any compactor
that is designed or used to process materials other than paper.
(4) The occupations of setting up, adjusting, repairing, oiling, or cleaning
any of the machines listed in paragraphs (a)(1), (2), and (3) of this section.
(b) Definitions. As used in this section:
Applicable ANSI Standard means the
American National Standard Institute’s Standard ANSI Z245.5–1990 American National Standard for Refuse Collection, Processing, and Disposal—Baling
Equipment—Safety Requirements (ANSI
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§ 570.63
S245.5–1990) for scrap paper balers or
the American National Standard Institute’s Standard ANSI Z245.2–1992 American National Standard for Refuse Collection, Processing, and Disposal Equipment—Stationary Compactors—Safety Requirements (ANSI Z245.2–1992) for paper
box compactors. Additional applicable
standards are the American National
Standard Institute’s Standard ANSI
Z245.5–1997 American National Standard
for Equipment Technology and Operations for Wastes and Recyclable Materials—Baling Equipment—Safety Requirements (ANSI Z245.5–1997), the American
National Standard Institute’s Standard
ANSI Z245.5–2004 American National
Standard for Equipment Technology and
Operations for Wastes and Recyclable
Materials—Baling Equipment—Safety Requirements for Installation, Maintenance
and Operation (ANSI Z245.5–2004), and
the American National Standard Institute’s Standard ANSI Z245.5–2008 American National Standard for Equipment
Technology and Operations for Wastes
and Recyclable Materials—Baling Equipment—Safety Requirements (ANSI Z245.5–
2008) for scrap paper balers or the
American National Standard Institute’s Standard ANSI Z245.2–1997 American National Standard for Equipment
Technology and Operations for Wastes
and Recyclable Materials—Stationary
Compactors—Safety Requirements (ANSI
Z245.2–1997), the American National
Standard Institute’s Standard ANSI
Z245.2–2004 American National Standard
for Equipment Technology and Operations for Wastes and Recyclable Materials—Stationary Compactors—Safety Requirements for Installation, Maintenance
and Operation (ANSI Z245.2–2004), and
the American National Standard Institute’s Standard ANSI Z245.2–2008 American National Standard for Equipment
Technology and Operations for Wastes
and Recyclable Materials—Stationary
Compactors—Safety Requirements for Installation, Maintenance and Operation
(ANSI Z245.2–2008) for paper box compactors, which the Secretary has certified to be at least as protective of the
safety of minors as Standard ANSI
Z245.5–1990 for scrap paper balers or
Standard ANSI Z245.2–1992 for paper
box compactors. The ANSI standards
for scrap paper balers and paper box
compactors govern the manufacture
and modification of the equipment, the
operation and maintenance of the
equipment, and employee training.
These ANSI standards are incorporated
by reference in this paragraph and have
the same force and effect as other
standards in this part. Only the mandatory provisions (i.e., provisions containing the word ‘‘shall’’ or other mandatory language) of these standards are
adopted as standards under this part.
These standards are incorporated by
reference as they exist on the date of
the approval; if any changes are made
in these standards which the Secretary
finds to be as protective of the safety
of minors as the current standards, the
Secretary will publish a Notice of the
change of standards in the FEDERAL
REGISTER. These incorporations by reference were approved by the Director
of the Federal Register in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51.
Copies of these standards are available
for purchase from the American National Standards Institute (ANSI), 25
West 43rd St., Fourth Floor, New York,
NY 10036. The telephone number for
ANSI is (212) 642–4900 and its Web site is
located at http://www.ansi.org. In addition, these standards are available for
inspection at the National Archives
and Records Administration (NARA).
For information on the availability of
this material at NARA, call (202) 741–
6030, or go to: http://www.archives.gov/
federallregister/
codeloflfederallregulations/
ibrllocations.html. These standards are
also available for inspection at the Occupational Safety and Health Administration’s Docket Office, Room N–2625,
U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC
20210, or any of its regional offices. The
telephone number for the Occupational
Safety and Health Administration’s
Docket Office is (202) 693–2350 and its
Web site is located at http://dockets.osha.gov.
Baler that is designed or used to process
materials other than paper means a powered machine designed or used to compress materials other than paper and
cardboard boxes, with or without binding, to a density or form that will support handling and transportation as a
material unit without requiring a disposable or reusable container.
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§ 570.63
29 CFR Ch. V (7–1–19 Edition)
Compactor that is designed or used to
process materials other than paper means
a powered machine that remains stationary during operation, designed or
used to compact refuse other than
paper or cardboard boxes into a detachable or integral container or into a
transfer vehicle.
Operating or assisting to operate means
all work that involves starting or stopping a machine covered by this section,
placing materials into or removing materials from a machine, including
clearing a machine of jammed materials, paper, or cardboard, or any other
work directly involved in operating the
machine. The term does not include
the stacking of materials by an employee in an area nearby or adjacent to
the machine where such employee does
not place the materials into the machine.
Paper box compactor means a powered
machine that remains stationary during operation, used to compact refuse,
including paper boxes, into a detachable or integral container or into a
transfer vehicle.
Paper products machine means all
power-driven machines used in remanufacturing or converting paper or pulp
into a finished product, including preparing such materials for recycling; or
preparing such materials for disposal.
The term applies to such machines
whether they are used in establishments that manufacture converted
paper or pulp products, or in any other
type of manufacturing or nonmanufacturing establishment. The term also
applies to those machines which, in addition to paper products, process other
material for disposal.
Scrap paper baler means a powered
machine used to compress paper and
possibly other solid waste, with or
without binding, to a density or form
that will support handling and transportation as a material unit without
requiring a disposable or reusable container.
(c) Exemptions. (1) Sixteen- and 17year-olds minors may load materials
into, but not operate or unload, those
scrap paper balers and paper box compactors that are safe for 16- and 17year-old employees to load and cannot
be operated while being loaded. For the
purpose of this exemption, a scrap
paper baler or a paper box compactor is
considered to be safe for 16- and 17year-old to load only if all of the following conditions are met:
(i) The scrap paper baler or paper box
compactor meets the applicable ANSI
standard (the employer must initially
determine if the equipment meets the
applicable ANSI standard, and the Administrator or his/her designee may
make a determination when conducting an investigation of the employer);
(ii) The scrap paper baler or paper
box compactor includes an on-off
switch incorporating a key-lock or
other system and the control of the
system is maintained in the custody of
employees who are 18 years of age or
older;
(iii) The on-off switch of the scrap
paper baler or paper box compactor is
maintained in an off position when the
machine is not in operation; and
(iv) The employer posts a notice on
the scrap paper baler or paper box compactor (in a prominent position and
easily visible to any person loading, operating, or unloading the machine)
that includes and conveys all of the following information:
(A)(1) That the scrap paper baler or
compactor meets the industry safety
standard applicable to the machine, as
specified in paragraph (b) of this section and displayed in the following
table.
In order for employers to take advantage
of the limited exception discussed in this
section, the scrap paper baler must meet
one of the following ANSI Standards:
ANSI Standard Z245.5–1990 ..................
ANSI Standard Z245.5–1997 ..................
ANSI Standard Z245.5–2004 ..................
ANSI Standard Z245.5–2008 ..................
In order for employers to take advantage of the limited exception discussed in this section, the paper
box compactor
must meet one of
the following ANSI
Standards:
ANSI Standard
Z245.2–1992.
ANSI Standard
Z245.2–1997.
ANSI Standard
Z245.2–2004.
ANSI Standard
Z245.2–2008.
(2) The notice shall completely identify the appropriate ANSI standard.
(B) That sixteen- and 17-year-old employees may only load the scrap paper
baler or paper box compactor.
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Wage and Hour Division, Labor
§ 570.65
(C) That no employee under the age
of 18 may operate or unload the scrap
paper baler or paper box compactor.
(2) This section shall not apply to the
employment of apprentices or studentlearners under the conditions prescribed in § 570.50 (b) and (c).
taining free silica as their main constituent.
[56 FR 58632, Nov. 20, 1991, as amended at 69
FR 75403, Dec. 16, 2004; 75 FR 28456, May 20,
2010]
§ 570.65 Occupations involving the operation of circular saws, band saws,
guillotine shears, chain saws, reciprocating saws, wood chippers, and
abrasive cutting discs (Order 14).
§ 570.64 Occupations involved in the
manufacture of brick, tile, and kindred products (Order 13).
(a) Findings and declaration of fact.
The following occupations involved in
the manufacture of clay construction
products and of silica refractory products are particularly hazardous for the
employment of minors between 16 and
18 years of age, and detrimental to
their health and well-being.
(1) All work in or about establishments in which clay construction products are manufactured, except (i) work
in storage and shipping: (ii) work in offices, laboratories, and storerooms; and
(iii) work in the drying departments of
plants manufacturing sewer pipe.
(2) All work in or about establishments in which silica brick or other
silica refractories are manufactured,
except work in offices.
(3) Nothing in this section shall be
construed as permitting employment of
minors in any occupation prohibited by
any other hazardous occupations order
issued by the Secretary of Labor.
(b) Definitions. (1) The term clay construction products shall mean the following clay products: Brick, hollow
structural tile, sewer pipe and kindred
products, refractories, and other clay
products such as architectural terra
cotta, glazed structural tile, roofing
tile, stove lining, chimney pipes and
tops, wall coping, and drain tile. The
term shall not include the following
non-structural-bearing clay products:
Ceramic floor and wall tile, mosaic
tile, glazed and enameled tile, faience,
and similar tile, nor shall the term include non-clay construction products
such as sand-lime brick, glass brick, or
non-clay refractories.
(2) The term silica brick or other silica
refractories shall mean refractory products produced from raw materials con-
[21 FR 5773, Aug. 2, 1956, as amended at 23 FR
6240, Aug. 14, 1958. Redesignated at 28 FR
1634, Feb. 21, 1963, and amended at 28 FR 3450,
Apr. 9, 1963. Redesignated and amended at 36
FR 25156, Dec. 29, 1971]
(a) Findings and declaration of fact.
The following occupations are particularly hazardous for the employment of
minors between 16 and 18 years of age:
(1) The occupations of operator of or
helper on the following power-driven
fixed or portable machines except machines equipped with full automatic
feed and ejection:
(i) Circular saws.
(ii) Band saws.
(iii) Guillotine shears.
(2) The occupations of operator of or
helper on the following power-driven
fixed or portable machines:
(i) Chain saws.
(ii) Reciprocating saws.
(iii) Wood chippers.
(iv) Abrasive cutting discs.
(3) The occupations of setting-up, adjusting, repairing, oiling, or cleaning
circular saws, band saws, guillotine
shears, chain saws, reciprocating saws,
wood chippers, and abrasive cutting
discs.
(b) Definitions. As used in this section:
Abrasive cutting disc shall mean a machine equipped with a disc embedded
with abrasive materials used for cutting materials.
Band saw shall mean a machine
equipped with an endless steel band
having a continuous series of notches
or teeth, running over wheels or pulleys, and used for sawing materials.
Chain saw shall mean a machine that
has teeth linked together to form an
endless chain used for cutting materials.
Circular saw shall mean a machine
equipped with a thin steel disc having
a continuous series of notches or teeth
on the periphery, mounted on shafting,
and used for sawing materials.
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§ 570.66
29 CFR Ch. V (7–1–19 Edition)
Guillotine shear shall mean a machine
equipped with a moveable blade operated vertically and used to shear materials. The term shall not include other
types of shearing machines, using a different form of shearing action, such as
alligator shears or circular shears.
Helper shall mean a person who assists in the operation of a machine covered by this section by helping place
materials into or remove them from
the machine.
Operator shall mean a person who operates a machine covered by this section by performing such functions as
starting or stopping the machine, placing materials into or removing them
from the machine, or any other functions directly involved in operation of
the machine.
Reciprocating saw shall mean a machine equipped with a moving blade
that alternately changes direction on a
linear cutting axis used for sawing materials.
Wood chipper shall mean a machine
equipped with a feed mechanism,
knives mounted on a rotating chipper
disc or drum, and a power plant used to
reduce to chips or shred such materials
as tree branches, trunk segments, landscape waste, and other materials.
(c) Exemptions. This section shall not
apply to the employment of apprentices or student-learners under the conditions prescribed in § 570.50 (b) and (c).
[25 FR 9849, Oct. 14, 1960. Redesignated at 28
FR 1634, Feb. 21, 1963, and amended at 28 FR
3450, Apr. 9, 1963. Redesignated and amended
at 36 FR 25156, Dec. 29, 1971; 75 FR 28457, May
20, 2010]
§ 570.66 Occupations
involved
in
wrecking,
demolition,
and
shipbreaking operations (Order 15).
(a) Finding and declaration of fact. All
occupations in wrecking, demolition,
and shipbreaking operations are particularly hazardous for the employment of minors between 16 and 18 years
of age and detrimental to their health
and well-being.
(b) Definition. The term wrecking,
demolition, and shipbreaking operations
shall mean all work, including clean-up
and salvage work, performed at the site
of the total or partial razing, demolishing, or dismantling of a building,
bridge, steeple, tower, chimney, other
structure, ship or other vessel.
[25 FR 9850, Oct. 14, 1960. Redesignated at 28
FR 1634, Feb. 21, 1963, and amended at 28 FR
3450, Apr. 9, 1963. Redesignated and amended
at 36 FR 25156, Dec. 29, 1971]
§ 570.67 Occupations in roofing operations and on or about a roof
(Order 16).
(a) Finding and declaration of fact. All
occupations in roofing operations and
all occupations on or about a roof are
particularly hazardous for the employment of minors between 16 and 18 years
of age or detrimental to their health.
(b) Definitions. On or about a roof includes all work performed upon or in
close proximity to a roof, including
carpentry and metal work, alterations,
additions, maintenance and repair, including painting and coating of existing roofs; the construction of the
sheathing or base of roofs (wood or
metal), including roof trusses or joists;
gutter and downspout work; the installation and servicing of television and
communication equipment such as
cable and satellite dishes; the installation and servicing of heating, ventilation and air conditioning equipment or
similar appliances attached to roofs;
and any similar work that is required
to be performed on or about roofs.
Roofing operations means all work
performed in connection with the installation of roofs, including related
metal work such as flashing, and applying weatherproofing materials and
substances (such as waterproof membranes, tar, slag or pitch, asphalt prepared paper, tile, composite roofing
materials, slate, metal, translucent
materials, and shingles of asbestos, asphalt, wood or other materials) to roofs
of buildings or other structures. The
term also includes all jobs on the
ground related to roofing operations
such as roofing laborer, roofing helper,
materials handler and tending a tar
heater.
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Wage and Hour Division, Labor
§ 570.70
(c) Exemptions. This section shall not
apply to the employment of apprentices or student-learners under the conditions prescribed in § 570.50 (b) and (c).
[27 FR 102, Jan. 5, 1962. Redesignated at 28
FR 1634, Feb. 21, 1963, and amended at 28 FR
3450, Apr. 9, 1963. Redesignated and amended
at 36 FR 25156, Dec. 29, 1971; 69 FR 57404, Dec.
16, 2004]
§ 570.68 Occupations in excavation operations (Order 17).
(a) Finding and declaration of fact. The
following occupations in excavation
operations are particularly hazardous
for the employment of persons between
16 and 18 years of age:
(1) Excavating, working in, or backfilling (refilling) trenches, except (i)
manually excavating or manually
backfilling trenches that do not exceed
four feet in depth at any point, or (ii)
working in trenches that do not exceed
four feet in depth at any point.
(2) Excavating for buildings or other
structures or working in such excavations, except: (i) Manually excavating to a depth not exceeding four
feet below any ground surface adjoining the excavation, or (ii) working in
an excavation not exceeding such
depth, or (iii) working in an excavation
where the side walls are shored or
sloped to the angle of repose.
(3) Working within tunnels prior to
the completion of all driving and shoring operations.
(4) Working within shafts prior to the
completion of all sinking and shoring
operations.
(b) Exemptions. This section shall not
apply to the employment of apprentices or student-learners under the conditions prescribed in § 570.50 (b) and (c).
[28 FR 3449, Apr. 9, 1963. Redesignated at 36
FR 25156, Dec. 29, 1971]
Subpart E–1—Occupations in Agriculture Particularly Hazardous
for the Employment of Children Below the Age of 16
AUTHORITY: Secs. 12, 13, 18, 52 Stat. 1067,
1069, as amended; 29 U.S.C. 212, 213, 218.
§ 570.70 Purpose and scope.
(a) Purpose. Section 13(c)(2) of the
Fair Labor Standards Act of 1938, as
amended (29 U.S.C. 213(c)(2)) states that
the ‘‘provisions of section 12 [of the
Act] relating to child labor shall apply
to an employee below the age of 16 employed in agriculture in an occupation
that the Secretary of Labor finds and
declares to be particularly hazardous
for the employment of children below
the age of 16, except where such employee is employed by his parent or by
a person standing in the place of his
parent on a farm owned or operated by
such parent or person.’’ The purpose of
this subpart is to apply this statutory
provision.
(b) Exception. This subpart shall not
apply to the employment of a child
below the age of 16 by his parent or by
a person standing in the place of his
parent on a farm owned or operated by
such parent or person.
(c) Statutory definitions. As used in
this subpart, the terms agriculture, employer, and employ have the same meanings as the identical terms contained
in section 3 of the Fair Labor Standards Act of 1938, as amended (29 U.S.C.
203), which are as follows:
(1) Agriculture includes farming in all
its branches and among other things
includes the cultivation and tillage of
soil, dairying, the production, cultivation, growing, and harvesting of any
agricultural or horticultural commodities (including commodities defined as
agricultural commodities in section
15(g) of the Agricultural Marketing
Act, as amended), the raising of livestock, bees, fur-bearing animals, or
poultry, and any practices (including
any forestry or lumbering operations)
performed by a farmer or on a farm as
an incident to or in conjunction with
such farming operations, including
preparation for market, delivery to
storage or to market or to carriers for
transportation to market.
(2) Employer includes any person acting directly or indirectly in the interest of an employer in relation to an
employee but shall not include the
United States or any State or political
subdivision of a State (except with respect to employees of a State or a political subdivision thereof, employed:
(i) In a hospital, institution, or
school referred to in the last sentence
of section (r) of the Act, or
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§ 570.71
29 CFR Ch. V (7–1–19 Edition)
(ii) In the operation of a railway or
carrier referred to in such sentence), or
any labor organization (other than
when acting as an employer), or anyone acting in the capacity of officer or
agent of such labor organization.
(iii) Employ includes to suffer or permit to work.
[35 FR 221, Jan. 7, 1970, as amended at 35 FR
2822, Feb. 11, 1970. Redesignated at 36 FR
25156, Dec. 29, 1971]
§ 570.71 Occupations involved in agriculture.
(a) Findings and declarations of fact as
to specific occupations. The following occupations in agriculture are particularly hazardous for the employment of
children below the age of 16:
(1) Operating a tractor of over 20 PTO
horsepower, or connecting or disconnecting an implement or any of its
parts to or from such a tractor.
(2) Operating or assisting to operate
(including starting, stopping, adjusting, feeding, or any other activity involving physical contact associated
with the operation) any of the following machines:
(i) Corn picker, cotton picker, grain
combine, hay mower, forage harvester,
hay baler, potato digger, or mobile pea
viner;
(ii) Feed grinder, crop dryer, forage
blower, auger conveyor, or the unloading mechanism of a nongravity-type
self-unloading wagon or trailer; or
(iii) Power post-hole digger, power
post driver, or nonwalking type rotary
tiller.
(3) Operating or assisting to operate
(including starting, stopping, adjusting, feeding, or any other activity involving physical contact associated
with the operation) any of the following machines:
(i) Trencher or earthmoving equipment;
(ii) Fork lift;
(iii) Potato combine; or
(iv) Power-driven circular, band, or
chain saw.
(4) Working on a farm in a yard, pen,
or stall occupied by a:
(i) Bull, boar, or stud horse maintained for breeding purposes; or
(ii) Sow with suckling pigs, or cow
with newborn calf (with umbilical cord
present)
(5) Felling, bucking, skidding, loading, or unloading timber with butt diameter of more than 6 inches.
(6) Working from a ladder or scaffold
(painting, repairing, or building structures, pruning trees, picking fruit, etc.)
at a height of over 20 feet.
(7) Driving a bus, truck, or automobile when transporting passengers,
or riding on a tractor as a passenger or
helper.
(8) Working inside:
(i) A fruit, forage, or grain storage
designed to retain an oxygen deficient
or toxic atmosphere;
(ii) An upright silo within 2 weeks
after silage has been added or when a
top unloading device is in operating position;
(iii) A manure pit; or
(iv) A horizontal silo while operating
a tractor for packing purposes.
(9) Handling or applying (including
cleaning or decontaminating equipment, disposal or return of empty containers, or serving as a flagman for aircraft applying) agricultural chemicals
classified under the Federal Insecticide, Fungicide, and Rodenticide Act (7
U.S.C. 135 et seq.) as Category I of toxicity, identified by the word ‘‘poison’’
and the ‘‘skull and crossbones’’ on the
label; or Category II of toxicity, identified by the word ‘‘warning’’ on the
label;
(10) Handling or using a blasting
agent, including but not limited to, dynamite, black powder, sensitized ammonium nitrate, blasting caps, and
primer cord; or
(11) Transporting, transferring, or applying anhydrous ammonia.
(b) Occupational definitions. In applying machinery, equipment, or facility
terms used in paragraph (a) of this section, the Wage and Hour Division will
be guided by the definitions contained
in the current edition of Agricultural
Engineering, a dictionary and handbook, Interstate Printers and Publishers, Danville, Ill. Copies of this dictionary and handbook are available for
examination in Regional Offices of the
Wage and Hour Division, U.S. Department of Labor.
[35 FR 221, Jan. 7, 1970. Redesignated at 36
FR 25156, Dec. 29, 1971]
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Wage and Hour Division, Labor
§ 570.72
§ 570.72
Exemptions.
(a) Student-learners. The findings and
declarations of fact in § 570.71(a) shall
not apply to the employment of any
child as vocational agriculture student-learner in any of the occupations
described in paragraph (1), (2), (3), (4),
(5), or (6) of § 570.71(a) when each of the
following requirements are met:
(1) The student-learner is enrolled in
a vocational education training program in agriculture under a recognized
State or local educational authority,
or in a substantially similar program
conducted by a private school;
(2) Such student-learner is employed
under a written agreement which provides; (i) that the work of the studentlearner is incidental to his training;
(ii) that such work shall be intermittent, for short periods of time, and
under the direct and close supervision
of a qualified and experienced person;
(iii) that safety instruction shall be
given by the school and correlated by
the employer with on-the-job training;
and (iv) that a schedule of organized
and progressive work processes to be
performed on the job have been prepared;
(3) Such written agreement contains
the name of the student-learner, and is
signed by the employer and by a person
authorized to represent the educational
authority or school; and
(4) Copies of each such agreement are
kept on file by both the educational
authority or school and by the employer.
(b) Federal Extension Service. The findings and declarations of fact in
§ 570.71(a) shall not apply to the employment of a child under 16 years of
age in those occupations in which he
has successfully completed one or more
training programs described in paragraph (b) (1), (2), or (3) of this section
provided he has been instructed by his
employer on safe and proper operation
of the specific equipment he is to use;
is continuously and closely supervised
by the employer where feasible; or,
where not feasible, in work such as cultivating, his safety is checked by the
employer at least at midmorning,
noon, and midafternoon.
(1) 4–H tractor operation program. The
child is qualified to be employed in an
occupation described in § 570.71(a)(1)
provided:
(i) He is a 4–H member;
(ii) He is 14 years of age, or older;
(iii) He is familiar with the normal
working hazards in agriculture;
(iv) He has completed a 10-hour training program which includes the following units from the manuals of the
4–H tractor program conducted by, or
in accordance with the requirements
of, the Cooperative Extension Service
of a land grant university:
(a) First-year Manual:
Unit 1—Learning How to be Safe;
Unit 4—The Instrument Panel;
Unit 5—Controls for Your Tractor;
Unit 6—Daily Maintenance and Safety
Check; and
Unit 7—Starting and Stopping Your Tractor;
(b) Second-year Manual:
Unit 1—Tractor Safety on the Farm;
(c) Third-year Manual:
Unit 1—Tractor Safety on the Highway;
Unit 3—Hitches, Power-take-off, and Hydraulic Controls;
(v) He has passed a written examination on tractor safety and has demonstrated his ability to operate a tractor safely with a two-wheeled trailed
implement on a course similar to one
of the 4–H Tractor Operator’s Contest
Courses; and
(vi) His employer has on file with the
child’s records kept pursuant to part
516 of this title (basically, name, address, and date of birth) a copy of a certificate acceptable by the Wage and
Hour Division, signed by the leader
who conducted the training program
and by an Extension Agent of the Cooperative Extension Service of a land
grant university to the effect that the
child has completed all the requirements specified in paragraphs (b)(1) (i)
through (v) of this section.
(2) 4–H machine operation program.
The child is qualified to be employed in
an occupation described in § 570.71(a)(2)
providing:
(i) He satisfies all the requirements
specified in paragraphs (b)(2)(i) through
(v) of this section;
(ii) He has completed an additional
10-hour training program on farm machinery safety, including 4–H Fourth-
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§ 570.72
29 CFR Ch. V (7–1–19 Edition)
Year Manual, Unit 1, Safe Use of Farm
Machinery;
(iii) He has passed a written and
practical examination on safe machinery operation; and
(iv) His employer has on file with the
child’s records kept pursuant to part
516 of this title (basically, name, address, and date of birth) a copy of a certificate acceptable by the Wage and
Hour Division, signed by the leader
who conducted the training program
and by an Extension Agent of the Cooperative Extension Service of a land
grant university, to the effect that the
child has completed all of the requirements specified in paragraphs (b)(2) (i)
through (iii) of this section.
(3) Tractor and machine operation program. The child is qualified to be employed in an occupation described in
§ 570.71(a) (1) and (2) providing:
(i) He is 14 years of age, or older;
(ii) He has completed a 4-hour orientation course familiarizing him with
the normal working hazards in agriculture;
(iii) He has completed a 20-hour
training program on safe operation of
tractors and farm machinery, which
covers all material specified in paragraphs (b) (1)(iv) and (2)(ii) of this section.
(iv) He has passed a written examination on tractor and farm machinery
safety, and has demonstrated his ability to operate a tractor with a twowheeled trailed implement on a course
similar to a 4–H Tractor Operator’s
Contest Course, and to operate farm
machinery safely.
(v) His employer has on file with the
child’s records kept pursuant to part
516 of this title (basically, name, address and date of birth) a copy of a certificate acceptable by the Wage and
Hour Division, signed by the volunteer
leader who conducted the training program and by an Extension Agent of the
Cooperative Extension Service of a
land grant university, to the effect
that all of the requirements of paragraphs (b)(2) (i) through (iv) of this section have been met.
(c) Vocational agriculture training. The
findings and declarations of fact in
§ 570.71(a) shall not apply to the employment of a vocational agriculture
student under 16 years of age in those
occupations in which he has successfully completed one or more training
programs described in paragraph (c)(1)
or (2) of this section and who has been
instructed by his employer in the safe
and proper operation of the specific
equipment he is to use, who is continuously and closely supervised by his employer where feasible or, where not feasible, in work such as cultivating,
whose safety is checked by the employer at least at midmorning, noon,
and midafternoon, and who also satisfies whichever of the following program requirements are pertinent:
(1) Tractor operation program. The student is qualified to be employed in an
occupation described in § 570.71(a)(1)
provided:
(i) He is 14 years of age, or older;
(ii) He is familiar with the normal
working hazards in agriculture;
(iii) He has completed a 15-hour
training program which includes the
required units specified in the Vocational Agriculture Training Program
in Safe Tractor Operation, outlined by
the Office of Education, U.S. Department of Health, Education, and Welfare
and acceptable by the U.S. Department
of Labor. The training program is outlined in Special Paper No. 8, April 1969,
prepared at Michigan State University,
East Lansing, Mich., for the Office of
Education. Copies of this training program outline are available for examination in the Regional Offices of the
Wage and Hour Division, U.S. Department of Labor, and a copy may be obtained from the Office of Education,
U.S. Department of Health, Education,
and Welfare, Washington, DC 20202.
(iv) He has passed both a written test
and a practical test on tractor safety
including a demonstration of his ability to operate safely a tractor with a
two-wheeled trailed implement on a
test course similar to that described in
the Vocational Agriculture Training
Program in Safe Tractor Operation,
outlined by the Office of Education,
U.S. Department of Health, Education,
and Welfare; and
(v) His employer has on file with the
child’s records kept pursuant to part
516 of this title (basically, name, address, and date of birth) a copy of a certificate acceptable by the Wage and
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Wage and Hour Division, Labor
§ 570.102
Hour Division, signed by the Vocational Agriculture teacher who conducted the program to the effect that
the student has completed all the requirements specified in paragraphs
(c)(1)(i) through (iv) of this section.
(2) Machinery operation program. The
student is qualified to be employed in
an occupation described in paragraph
(2) of § 570.71(a) provided he has completed the Tractor Operation Program
described in paragraph (c)(1) of this
section and:
(i) He has completed an additional 10hour training program which includes
the required units specified in the Vocational Agriculture Training Program
in Safe Farm Machinery Operation,
outlined by the Office of Education,
U.S. Department of Health, Education,
and Welfare and approved by the U.S.
Department of Labor;
(ii) He has passed both a written test
and a practical test on safe machinery
operation similar to that described in
the Vocational Agriculture Training
Program in Safe Farm Machinery Operation, outlined by the Office of Education, U.S. Department of Health,
Education, and Welfare; and
(iii) His employer has on file with the
child’s records kept pursuant to part
516 of this title (basically, name, address and date of birth) a copy of a certificate acceptable by the Wage and
Hour Division, signed by the Vocational Agriculture teacher who conducted the program to the effect that
student has completed all the requirements specified in paragraphs (c)(2)(i)
and (ii) of this section.
(d) Agency review. The provisions of
paragraphs (a), (b), and (c) of this section will be reviewed and reevaluated
before January 1, 1972. In addition, determinations will be made as to whether the use of protective frames, crush
resistant cabs, and other personal protective devices should be made a condition of these exemptions.
[35 FR 221, Jan. 7, 1970. Redesignated at 36
FR 25156, Dec. 29, 1971]
Subpart F [Reserved]
Subpart G—General Statements of
Interpretation of the Child
Labor Provisions of the Fair
Labor Standards Act of 1938,
as Amended
AUTHORITY: 52 Stat. 1060–1069, as amended;
29 U.S.C. 201–219; 28 U.S.C. 2461 note (Federal
Civil Penalties Inflation Adjustment Act of
1990); Pub. L. 114–74 at § 701.
GENERAL
§ 570.101 Introductory statement.
(a) This subpart discusses the meaning and scope of the child labor provisions contained in the Fair Labor
Standards Act, as amended (hereinafter
referred to as the Act). These provisions seek to protect the safety,
health, well-being, and opportunities
for schooling of youthful workers and
authorize the Secretary of Labor to
issue legally binding orders or regulations in certain instances and under
certain conditions. The child labor provisions are found in sections 3(1), 11(b),
12, 13 (c) and (d), 15(a)(4), 16(a), and 18 of
the Act. They are administered and enforced by the Secretary of Labor who
has delegated to the Wage and Hour Division the duty of making investigations to obtain compliance, and of developing standards for the issuance of
regulations and orders relating to: (1)
Hazardous occupations, (2) employment
of 14- and 15-year-old children, and (3)
age certificates.
(b) The interpretations of the Secretary contained in this subpart indicate the construction of the law which
will guide him in performing his duties
until he is directed otherwise by authoritative rulings of the courts or
until he shall subsequently decide that
his prior interpretation is incorrect.
[16 FR 7008, July 20, 1951. Redesignated at 28
FR 1634, Feb. 21, 1963. Redesignated and
amended at 36 FR 25156, Dec. 29, 1971]
§ 570.102 General scope of statutory
provisions.
The most important of the child
labor provisions are contained in sections 12(a), 12(c), and 3(l) of the Act.
Section 12(a) provides that no producer, manufacturer, or dealer shall
ship or deliver for shipment in interstate or foreign commerce any goods
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§ 570.103
29 CFR Ch. V (7–1–19 Edition)
produced in an establishment in or
about which oppressive child labor was
employed within 30 days before removal of the goods. The full text of
this subsection is set forth in § 570.104
and its terms are discussed in §§ 570.105
to 570.111, inclusive. Section 12(c) prohibits any employer from employing
oppressive child labor in interstate or
foreign commerce or in the production
of goods for such commerce. The text
and discussion of this provision appear
in §§ 570.112 and 570.113. Section 3(l) of
the Act, which defines the term ‘‘oppressive child labor,’’ is set forth in
§ 570.117 and its provisions are discussed
in §§ 570.118 to 570.121, inclusive. It will
further be noted that the Act provides
various specific exemptions from the
foregoing provisions which are set
forth and discussed in §§ 570.122 to
570.130, inclusive.
[75 FR 28458, May 20, 2010]
§ 570.103 Comparison with wage and
hour provisions.
A comparison of the child labor provisions with the so-called wage and
hours provisions contained in the Act
discloses some important distinctions
which should be mentioned.
(a) The child labor provisions contain
no requirements in regard to wages.
The wage and hours provisions, on the
other hand, provide for minimum rates
of pay for straight time and overtime
pay at a rate not less than one and onehalf times the regular rate of pay for
overtime hours worked. Except as provided in certain exemptions contained
in the Act, these rates are required to
be paid all employees subject to the
wage and hours provisions, regardless
of their age or sex. The fact therefore,
that the employment of a particular
child is prohibited by the child labor
provisions or that certain shipments or
deliveries may be proscribed on account of such employment, does not relieve the employer of the duties imposed by the wage and hours provisions
to compensate the child in accordance
with those requirements.
(b) There are important differences
between the child labor provisions and
the wage and hours provisions with respect to their general coverage. As
pointed out in § 570.114, two separate
and basically different coverage provi-
sions are contained in section 12 relating to child labor. One of these provisions (section 12(c)), which applies to
the employment by an employer of oppressive child labor in commerce or in
the production of goods for commerce,
is similar to the wage and hours coverage provisions, which include employees engaged in commerce or in the
production of goods for commerce or
employed in enterprises having employees so engaged. The other provision (section 12(a)), however, differs
fundamentally in its basic concepts of
coverage from the wage and hours provisions, as will be explained in §§ 570.104
to 570.111.
(c) Another distinction is that the exemptions provided by the Act from the
minimum wage and/or overtime provisions are more numerous and differ
from the exemptions granted from the
child labor provisions. There are only
eight specific child labor exemptions of
which only two apply to the minimum
wage and overtime pay requirements as
well. These are the exemptions for employees engaged in the delivery of
newspapers to the consumer and
homeworkers engaged in the making of
wreaths composed principally of evergreens.3 Apart from these two exceptions, none of the specific exemptions
from the minimum wage and/or overtime pay requirements applies to the
child labor provisions. However, it
should be noted that the exclusion of
certain employers by section 3(d) 4 of
the Act applies to the child labor provisions as well as the wage and hours
provisions.
[16 FR 7008, July 20, 1951. Redesignated at 28
FR 1634, Feb. 21, 1963. Redesignated and
amended at 36 FR 25156, Dec. 29, 1971; 75 FR
28458, May 20, 2010]
3 Both of these exemptions are contained in
section 13(d) of the FLSA.
4 Section 3(d) defines ‘employer‘ as including ‘‘any person acting directly or indirectly
in the interest of an employer in relation to
an employee and includes a public agency,
but does not include any labor organization
(other than when acting as an employer) or
anyone acting in the capacity of officer or
agent of such labor organization.’’
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Wage and Hour Division, Labor
§ 570.106
COVERAGE OF SECTION 12(a)
§ 570.104 General.
Section 12(a) of the Act provides as
follows:
No producer, manufacturer, or dealer shall
ship or deliver for shipment in commerce
any goods produced in an establishment situated in the United States in or about which
within 30 days prior to the removal of such
goods therefrom any oppressive child labor
has been employed: Provided, That any such
shipment or delivery for shipment of such
goods by a purchaser who acquired them in
good faith in reliance on written assurance
from the producer, manufacturer, or dealer
that the goods were produced in compliance
with the requirements of this section, and
who acquired such goods for value without
notice of any such violation, shall not be
deemed prohibited by this subsection: And
provided further, That a prosecution and conviction of a defendant for the shipment or
delivery for shipment of any goods under the
conditions herein prohibited shall be a bar to
any further prosecution against the same defendant for shipments or deliveries for shipment of any such goods before the beginning
of said prosecution.
In determining the applicability of this
provision, consideration of the meaning of the terms used is necessary.
These terms are discussed in §§ 570.105
to 570.111, inclusive.
§ 570.105 ‘‘Producer, manufacturer, or
dealer’’.
It will be observed that the prohibition of section 12(a) with respect to
certain shipments or deliveries for
shipment is confined to those made by
producers, manufacturers, and dealers.
The terms ‘‘producer, manufacturer, or
dealer’’ used in this provision are not
expressly defined by the statute. However, in view of the definition of ‘‘produced’’ in section 3(j), for purposes of
this section a ‘‘producer’’ is considered
to be one who engages in producing,
manufacturing, handling or in any
other manner working on goods in any
State. 5 Since manufacturing is considered a specialized form of production,
the word ‘‘manufacturer’’ does not
have as broad an application as the
word ‘‘producer.’’ Manufacturing generally involves the transformation of
5 For a discussion of the definition of ‘‘produced’’ as it relates to section 12(a), see
§ 570.108.
raw materials or semifinished goods
into new or different articles. A person
may be considered a ‘‘manufacturer’’
even though his goods are made by
hand, as is often true of products made
by homeworkers. Moreover, it is immaterial whether manufacturing is his
sole or main business. Thus, the term
includes retailers who, in addition to
retail selling, engage in such manufacturing activities as the making of slipcovers or curtains, the baking of bread,
the making of candy, or the making of
window frames. The word ‘‘dealer’’ refers to anyone who deals in goods (as
defined in section 3(i) of the Act), 6 including persons engaged in buying,
selling, trading, distributing, delivering, etc. It includes middlemen, factors, brokers, commission merchants,
wholesalers, retailers and the like.
§ 570.106 ‘‘Ship or deliver for shipment
in commerce’’.
(a) Section 12(a) forbids producers,
manufacturers, and dealers to ‘‘ship or
deliver for shipment in commerce’’ the
goods referred to therein. A producer,
manufacturer, or dealer may ‘‘ship’’
goods in commerce either by moving
them himself in interstate or foreign
commerce or by causing them to so
move, as by delivery to a carrier. 7
Thus, a baker ‘‘ships’’ his bread in
commerce whether he carries it in his
own truck across State lines or sends it
by contract or common carrier to his
customers in other States. The word
‘‘ship’’ must be applied in its ordinary
meaning. For example, it does not
apply to the transmission of telegraphic messages. 8
(b) To ‘‘deliver for shipment in commerce’’ means to surrender the custody
of goods to another under such circumstances that the person surrendering the goods knows or has reason
to believe that the goods will later be
6 See
§ 570.107.
3(b) of the Act defines ‘‘commerce’’ to mean ‘‘trade, commerce, transportation, transmission, or communication
among the several States or between any
State and any place outside thereof.’’
8 Western Union Telegraph Co. v. Lenroot, 323
U.S. 490.
7 Section
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§ 570.107
29 CFR Ch. V (7–1–19 Edition)
shipped in commerce. 9 Typical is the
case of a Detroit manufacturer who delivers his goods in Detroit to a distributor who, as the manufacturer is
well aware, will ship the goods into another State. A delivery for shipment in
commerce may also be made where raw
materials are delivered by their producer to a manufacturer in the same
State who converts them into new
products which are later shipped across
State lines. If the producer in such case
is aware or has reason to believe that
the finished products will ultimately
be sent into another State, his delivery
of the raw materials to the manufacturer is a delivery for shipment in commerce. Another example is a paper box
manufacturer who ships a carton of
boxes to a fresh fruit or vegetable
packing shed within the same State,
with knowledge or reason to believe
that the boxes will there be filled with
fruits or vegetables and shipped outside
the State. In such case the box manufacturer has delivered the boxes for
shipment in commerce.
§ 570.107 ‘‘Goods’’. 10
(a) Section 12(a) prohibits the shipment or delivery for shipment in commerce of ‘‘any goods’’ produced in an
establishment which were removed
within 30 days of the employment there
of oppressive child labor. It should be
noted that the statute does not base
the prohibition of section 12(a) upon
the percentage of an establishment’s
output which is shipped in commerce.
(b) The Act furnishes its own definition of ‘‘goods’’ in section 3(i), as follows:
9 Tobin v. Grant, N. D. Calif., 79 Sup. 975
which was a suit for injunction by the Secretary of Labor against a manufacturer of
books and book covers employing oppressive
child labor. The facts showed that the manufactured articles sold by defendant to purchasers in the same State had an ultimate
out-of-State destination which was manifest
to defendant. The court construed the words
‘‘deliver for shipment in commerce’’ as sufficiently broad to cover this situation even
though the purchasers acquired title to the
goods.
10 The term goods is discussed in more detail in part 776 of this title (Interpretative
Bulletin on the coverage of the wage and
hours provisions) issued by the Administrator of the Wage and Hour Division.
Goods means goods (including ships and marine equipment), wares, products, commodities, merchandise, or articles or subjects of
commerce of any character, or any part or
ingredient thereof, but does not include
goods after their delivery into the actual
physical possession of the ultimate consumer
thereof other than a producer, manufacturer,
or processor thereof.
The term includes such things as foodstuffs, clothing, machinery, printed
materials, blueprints and also includes
intangibles such as news, ideas, and intelligence. The statute expressly excludes goods after their delivery into
the actual physical possession of an ultimate consumer other than a producer, manufacturer, or processor
thereof. Accordingly, such a consumer
may lawfully ship articles in his possession although they were ineligible
for shipments (commonly called ‘‘hot
goods’’) before he received them. 11
§ 570.108 ‘‘Produced’’.
The word ‘‘produced’’ as used in the
Act is defined by section 3(j) to mean:
* * * produced, manufactured, mined, handled, or in any other manner worked on in
any state; * * * 12
(a) The prohibition of section 12(a)
cannot apply to a shipment of goods
unless those goods (including any part
or ingredient thereof) were actually
‘‘produced’’ in and removed from an establishment where oppressive child
labor was employed. This provision is
applicable even though the under-age
employee does not engage in the production of the goods themselves if
somewhere in the establishment in or
about which he is employed goods are
‘‘produced’’ which are subsequently
shipped or delivered for shipment in
commerce. In contrast to this restrictive requirement of section 12(a), it
11 For a discussion of the exclusionary
clause in section 3(i) of the Act, see Powell et
al. v. United States Cartridge Co., 70 S. CT. 755.
12 The remaining portion of section 3(j) provides: ‘‘ * * * and for the purposes of this Act
an employee shall be deemed to have been
engaged in the production of goods if such
employee was employed in producing, manufacturing, mining, handling, transporting, or
in any other manner working on such goods,
or in any closely related process or occupation directly essential to the production
thereof, in any State.’’
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Wage and Hour Division, Labor
§ 570.109
will be noted that the employees covered under the wage and hours provisions as engaged in the production of
goods for commerce are not limited to
those in or about establishments where
such goods are being produced. If the
requisite relationship 13 to production
of such goods is present, an employee is
covered for wage and hours purposes
regardless of whether his work brings
him in or near any establishment
where the goods are produced. 14
(b) Since the first word in the definition of ‘‘produced’’ repeats the term
being defined, it seems clear that the
first word must carry the meaning that
it has in everyday language. Goods are
commonly spoken of as ‘‘produced’’ if
they have been brought into being as a
result of the application of work. The
words ‘‘manufactured’’ and ‘‘mined’’ in
the definition refer to special forms of
production. The former term is generally applied to the products of industry where existing raw materials are
transformed into new or different articles by the use of industrial methods,
either by the aid of machinery or by
manual operations. Mining is a type of
productive activity involving the taking of materials from the ground, such
as coal from a coal mine, oil from oil
wells, or stone from quarries. The statute also defines the term ‘‘produced’’
to mean ‘‘handled’’ or ‘‘in any other
manner work on.’’ 15 These words relate
not only to operations carried on in the
course of manufacturing, mining, or
production as commonly described, but
include as well all kinds of operations
which prepare goods for their entry
into the stream of commerce, without
regard to whether the goods are to be
further processed or are so-called ‘‘finished goods.’’ 16 Accordingly, ware13 See
footnote 12.
part 776 of this title (interpretative
Bulletin on the coverage of the wage and
hours provisions) issued by the Administrator of the Wage and Hour Division. Also,
see §§ 570.112 and 570.113.
15 For a more complete discussion of these
words, see § 776.16 of part 776 (bulletin on coverage of the wage and hours provisions) of
chapter V of this title.
16 In Western Union Telegraph Co. v. Lenroot,
323 U.S. 490, the Supreme Court stated that
these words bring within the statutory definition ‘‘every step in putting the subject of
commerce in a state to enter commerce,’’ in14 See
houses, fruit and vegetable packing
sheds, distribution yards, grain elevators, etc., where goods are sorted,
graded, stored, packed, labeled or otherwise handled or worked on in preparation for their shipment out of the
State are producing establishments for
purposes of section 12(a). 17 However,
the handling or working on goods, performed by employees of carriers which
accomplishes the interstate transit or
movement in commerce itself, does not
constitute production under the Act. 18
§ 570.109 ‘‘Establishment situated in
the United States’’.
(a)(1) The statute does not expressly
define ‘‘establishment.’’ Accordingly,
the term should be given a meaning
which is not only consistent with its
ordinary usage, but also designed to accomplish the general purposes of the
Act. As normally used in business and
in Government, the word ‘‘establishment’’ refers to a distinct physical
place of business. This is the meaning
attributed to the term as it is used in
section 13(a)(2) of the Act. 19 Since the
establishments covered under section
12(a) of the Act are those in which
goods are produced, the term ‘‘establishment’’ there refers to a physical
place where goods are produced. Typical producing establishments are industrial plants, mines, quarries, and
the like. The producing establishment,
however, need not have a permanently
fixed location as is the case with a factory or mine. A boat, for instance,
cluding ‘‘all steps, whether manufacture or
not, which lead to readiness for putting
goods into the stream of commerce’’ and
‘‘every kind of incidental operation preparatory to putting goods into the stream of
commerce.’’
17 Lenroot v. Kemp and Lenroot v. Hazlehurst
Mercantile Co., 153 F. 2d 153 (C.A. 5), where
the court directed issuance of injunctions to
restrain violations of the child labor provisions by operators of vegetable packing
sheds at which they bought, then washed,
sorted, crated, and packed cabbage and tomatoes for shipment in interstate commerce.
18 Western Union Telegraph Co. v. Lenroot,
323 U.S. 490.
19 A. H. Phillips, Inc. v. Walling, 324 U.S. 490.
See part 779 (bulletin on the retail and service establishment exemption from the wage
and hours provisions) of chapter V of this
title.
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§ 570.110
29 CFR Ch. V (7–1–19 Edition)
where productive activities such as
catching or canning fish are carried on
is considered a producing establishment for purposes of section 12(a).
(2) Frequently, questions arise as to
what should be considered a single establishment. No hard and fast rule can
be laid down which will fix the area of
all establishments. Accordingly, a determination of the area contained in a
single establishment must be based
upon the facts of each individual situation. Facts which are particularly pertinent in this connection, however, are
those which relate to the physical
characteristics and the manner of operation and control of the business.
Sometimes, an establishment may extend over an area of several square
miles as is common with farms, logging
enterprises, mines, and quarries. On
the other hand, it may be confined to a
few square feet. A typical illustration
of this is a loft building that houses
the workshops of hundreds of independent manufacturing firms. Each of
the workshops is, for purposes of this
section, a separate establishment.
(3) Similar principles are applicable
in determining whether several buildings located on the same premises constitute one establishment or more than
one. For example, where several factory buildings are located on the same
premises and owned and operated by
the same person, they are generally to
be considered as a single establishment. On the other hand, factory buildings located on the same premises, but
owned and operated by different persons, will not ordinarily be treated as a
single establishment. Where the several factories, however, are engaged in
a joint productive enterprise, they may
constitute a single establishment. This
is the case, for example, where a large
shipyard contains the plants of a number of subcontractors who are engaged
in making parts or equipment for the
boats that are built in the yard.
(b) The phrase ‘‘situated in the
United States’’ is construed to include
any of the 50 States or the District of
Columbia or any Territory or possession of the United States.
§ 570.110 ‘‘In or about’’.
(a) Section 12(a) excludes from the
channels of interstate commerce goods
produced in an establishment ‘‘in or
about’’ which oppressive child labor
has been employed. In a great many
situations it is obviously easy to determine whether a minor is employed
‘‘in’’ an establishment. Thus, he is so
employed where he performs his occupational duties on the premises of the
producing establishment. Furthermore,
a minor is also considered as employed
in an establishment where he performs
most of his duties off the premises but
is regularly required to perform certain
occupational duties in the establishment, such as loading or unloading a
truck, checking in or out, or washing
windows. This is true in such cases
even though the minor is employed by
someone other than the owner or operator of the particular establishment.
On the other hand, a minor is not considered to be employed in an establishment other than his employer’s merely
because such establishment is visited
by him for brief periods of time and for
the sole purpose of picking up or delivering a message or other small article.
(b) If, in the light of the statements
in paragraph (a) of this section, the
minor cannot be considered as employed in the establishment, he may,
nevertherless, be employed ‘‘about’’ it
if he performs his occupational duties
sufficiently close in proximity to the
actual place of production to fall within the commonly understood meaning
of the term ‘‘about.’’ This would be
true in a situation where the foregoing
proximity test is met and the occupation of the minor is directly related to
the activities carried on in the producing establishment, in this connection, occupations are considered sufficiently related to the activities carried
on in the producing establishment to
meet the second test above at least
where the requisite relationship to production of goods exists within the
meaning of section 3(j) of the Act. 20 By
way of example, a driver’s helper employed to assist in the distribution of
the products of a bottling company
who regularly boards the delivery
truck immediately outside the premises of the bottling plant is considered
20 See part 776 (bulletin on coverage of the
wage and hours provisions) of this title.
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Wage and Hour Division, Labor
§ 570.112
employed ‘‘in or about’’ such establishment, without regard to whether he
ever enters the plant itself. On the
other hand, employees working entirely within one establishment are not
considered to be employed ‘‘in or
about’’ a wholly different establishment occupying separate premises and
operated by another employer. This
would be true even though the two establishments are contiguous. But in
other situations the distance between
the producing establishment and the
minor’s place of employment may be a
decisive factor. Thus, a minor employed in clearing rights-of-way for
power lines many miles away from the
power plant cannot well be said to be
employed ‘‘in or about’’ such establishment. In view of the great variety of
establishments and employments, however, no hard and fast rule can be laid
down which will once and for all distinguish between employments that are
‘‘about’’ an establishment and those
that are not. Therefore, each case must
be determined on its own merits. In determining whether a particular employment is ‘‘about’’ an establishment,
consideration of the following factors
should prove helpful:
(1) Actual distance between the producing establishment and the minor’s
place of employment;
(2) Nature of the establishment;
(3) Ownership or control of the premises involved;
(4) Nature of the minor’s activities in
relation to the establishment’s purpose;
(5) Identity of the minor’s employer
and the establishment’s owner;
(6) Extent of control by the producing establishment’s owner over the
minor’s employment.
§ 570.111 Removal ‘‘within 30 days’’.
According to section 12(a) goods produced in an establishment in or about
which oppressive child labor has been
employed are barred as ‘‘hot goods’’
from being shipped or delivered for
shipment in commerce in the following
two situations: First, if they were removed from the establishment while
any oppressive child labor was still
being employed in or about it; second,
if they were removed from an establishment in or about which oppressive
child labor was no longer employed but
less than 30 days had then elapsed since
any such employment of oppressive
child labor came to an end. Once any
goods have been removed from a producing establishment within the abovementioned thirty-day period, they are
barred at any time theafter from being
shipped or delivered for shipment in
commerce so long as they remain
‘‘goods’’ for purposes of the Act. 21
Goods are considered removed from an
establishment just as soon as they are
taken away from the establishment as
that term has been defined. 22 The statute does not require that this ‘‘removal’’ from the establishment be
made for the purpose or in the course
of a shipment or delivery for shipment
in commerce. A ‘‘removal’’ within the
meaning of the statute also takes place
where the goods are removed from the
establishment for some other purpose
such as storage, the granting of a lien
or other security interest, or further
processing.
[16 FR 7008, July 20, 1951, as amended at 23
FR 6240, Aug. 14, 1958. Redesignated at 28 FR
1634, Feb. 21, 1963. Redesignated and amended
at 36 FR 25156, Dec. 29, 1971; 75 FR 28458, May
20, 2010]
COVERAGE OF SECTION 12(c)
§ 570.112 General.
(a) Section 12(c) of the Act provides
as follows:
No employer shall employ any oppressive
child labor in commerce or in the production
of goods for commerce or in an enterprise engaged in commerce or in the production of
goods for commerce.
(b) This provision, which was added
by amendments of 1949 and 1961 to the
Act, broadens child labor coverage to
include employment in commerce.
Moreover, it establishes a direct prohibition of the employment of oppressive
child labor in commerce or in the production of goods for commerce. The
legislative history pertaining to this
21 However, section 12(a) contains a provision relieving innocent purchasers from liability thereunder provided certain conditions are met. For a discussion of this provision, see § 570.141.
22 For a discussion of the meaning of ‘‘establishment,’’ see § 570.109.
23 [Reserved]
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§ 570.113
29 CFR Ch. V (7–1–19 Edition)
provision leads to the conclusion that
Congress intend its application to be
generally consistent with that of wage
and hours coverage provisions. The application of the provision depends on
the existence of two necessary elements: (1) The employment of ‘‘oppressive child labor’’ 24 by some employer
and (2) the employment of such oppressive child labor in activities or enterprises which are in commerce or in the
production of goods for commerce
within the meaning of the Act.
[36 FR 25156, Dec. 29, 1971]
§ 570.113 Employment ‘‘in commerce or
in the production of goods for commerce’’.
(a) The term ‘‘employ’’ is broadly defined in section 3(g) of the Act to include ‘‘to suffer or permit to work.’’
The Act expressly provides that the
term ‘‘employer’’ includes ‘‘any person
acting directly or indirectly in the interest of an employer in relation to an
employee’’. The nature of an employeremployee relationship is ordinarily to
be determined not solely on the basis
of the contractual relationship between
the parties but also in the light of all
the facts and circumstances. Moreover,
the terms ‘‘employer’’ and ‘‘employ’’ as
used in the Act are broader than the
common-law concept of employment
and must be interpreted broadly in the
light of the mischief to be corrected.
Thus, neither the technical relationship between the parties nor the fact
that the minor is unsupervised or receives no compensation is controlling
in determining whether an employeremployee relationship exists for purposes of section 12(c) of the Act. However, these are matters which should be
considered along with all other facts
and circumstances surrounding the relationship of the parties in arriving at
such determination. The words ‘‘suffer
or permit to work’’ include those who
suffer by a failure to hinder and those
who permit by acquiescence in addition
to those who employ by oral or written
contract. A typical illustration of employment of oppressive child labor by
suffering or permitting an under-aged
24 ‘‘Oppressive child labor’’ is discussed in
§§ 570.117 to 570.121, inclusive.
25 [Reserved]
minor to work is that of an employer
who knows that his employee is utilizing the services of such a minor as a
helper or substitute in performing his
employer’s work. If the employer acquiesces in the practice or fails to exercise his power to hinder it, he is himself suffering or permitting the helper
to work and is, therefore, employing
him, within the meaning of the Act.
Where employment does exist within
the meaning of the Act, it must, of
course, be in commerce or in the production of goods for commerce or in an
enterprise engaged in commerce or in
the production of goods for commerce
in order for section 12(c) to be applicable.
(b) As previously indicated, the scope
of coverage of section 12(c) of the Act
is, in general, coextensive with that of
the wage and hours provisions. The
basis for this conclusion is provided by
the similarity in the language used in
the respective provisions and by statements appearing in the legislative history concerning the intended effect of
the addition of section 12(c). Accordingly, it may be generally stated that
employees considered to be within the
scope of the phrases ‘‘in commerce or
in the production of goods for commerce’’ for purposes of the wage and
hours provisions are also included
within the identical phrases used in
section 12(c). To avoid needless repetition, reference is herein made to the
full discussion of principles relating to
the general coverage of the wage and
hours provisions contained in parts 776
and 779 of this chapter. In this connection, however, it should be borne in
mind that lack of coverage under the
wage and hours provisions or under
section 12(c) does not necessarily preclude the applicability of section 12(a)
of the Act. 26
[36 FR 25156, Dec. 29, 1971]
JOINT AND SEPARATE APPLICABILITY OF
SECTIONS 12(a) AND 12(c)
§ 570.114 General.
It should be noted that section 12(a)
does not directly outlaw the employment of oppressive child labor. Instead,
it prohibits the shipment or delivery
26 See
§ 570.116
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Wage and Hour Division, Labor
§ 570.116
for shipment in interstate or foreign
commerce of goods produced in an establishment where oppressive child
labor has been employed within 30 days
before removal of the goods. Section
12(c), on the other hand, is a direct prohibition against the employment of oppressive child labor in commerce, or in
the production of goods for commerce.
Moreover, the two subsections provide
different methods for determining the
employees who are covered thereby.
Thus, subsection (a) may be said to
apply to young workers on an ‘‘establishment’’ basis. If the standards for
child labor are not observed in the employment of minors in or about an establishment where goods are produced
and from which such goods are removed within the statutory 30-day period, it becomes unlawful for any producer, manufacturer, or dealer (other
than an innocent purchaser who is in
compliance with the requirements for a
good faith defense as provided in the
subsection) to ship or deliver those
goods for shipment in commerce. It is
not necessary for the minor himself to
have been employed by the producer of
such goods or in their production in
order for the ban to apply. On the other
hand, whether the employment of a
particular minor below the applicable
age standard will subject his employer
to the prohibition of subsection (c) is
dependent upon the minor himself
being employed in commerce or in the
production of goods for commerce, or
in an enterprise engaged in commerce
or in production of goods for commerce
within the meaning of the Act. If such
a minor is so employed by his employer
and is not specifically exempt from the
child labor provisions then his employment under such circumstances constitutes a violation of section 12(c) regardless of where he may be employed
or what his employer may do. Moreover, a violation of section 12(c) occurs
under the foregoing circumstances
without regard to whether there is a
‘‘removal’’ of goods or a shipment or
delivery for shipment in commerce.
[36 FR 25157, Dec. 29, 1971]
§ 570.115 Joint applicability.
The child labor coverage provisions
contained in sections 12(a) and 12(c) of
the Act may be jointly applicable in
certain situations. For example, a
manufacturer of women’s dresses who
ships them in interstate commerce,
employs a minor under 16 years of age
who gathers and bundles scraps of material in the cutting room of the plant.
Since the employment of the minor
under such circumstances constitutes
oppressive child labor and involves the
production of goods for commerce, the
direct prohibition of section 12(c) is applicable to the case. In addition, section 12(a) also applies to the manufacturer if the dresses are removed from
the establishment during the course of
the minor’s employment or within 30
days thereafter. To illustrate further,
suppose that a transportation company
employs a 17-year-old boy as helper on
a truck used for hauling materials between railroads and the plants of its
customers who are engaged in producing goods for shipment in commerce. The employment of the minor
as helper on a truck is oppressive child
labor because such occupation has been
declared particularly hazardous by the
Secretary for children between 16 and
18 years of age. Since his occupation
involves the transportation of goods
which are moving in interstate commerce, his employment in such occupation by the transportation company is,
therefore, directly prohibited by the
terms of section 12(c). If the minor’s
duties in this case should, for example,
include loading and unloading the
truck at the establishments of the customers of his employer, then the provisions of section 12(a) might be applicable with respect to such customers.
This would be true where any goods
which they produce and ship in commerce are removed from the producing
establishment within 30 days after the
minor’s employment there.
§ 570.116 Separate applicability.
There are situations where section
12(c) does not apply because the minor
himself is not considered employed in
commerce or in the production of goods
for commerce. This does not exclude
the possibility of coverage under the
provisions of section 12(a), however. In
those cases where oppressive child
labor is employed in commerce but not
in or about a producing establishment,
coverage exists under section 12(c) but
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§ 570.117
29 CFR Ch. V (7–1–19 Edition)
not under the provisions of section
12(a). The employment of telegraph
messengers under 16 years of age would
normally involve this type of situation. 27 There may also be cases where
oppressive child labor is employed in
occupations closely related and directly essential to the production of
goods in a separate establishment and
therefore covered by section 12(c) but
due to the fact that none of the goods
produced in the establishment where
the minors work are ever shipped or delivered for shipment in commerce either in the same form or as a part or
ingredient of other goods, coverage of
section 12(a) is lacking. An illustration
of this type of situation would be the
employment of a minor under the applicable age minimum in a plant engaged in the production of electricity
which is sold and consumed exclusively
within the same State and some of
which is used by establishments in the
production of goods for commerce.
[36 FR 25157, Dec. 29, 1971]
OPPRESSIVE CHILD LABOR
§ 570.117 General.
(a) Section 3(1) of the Act defines
‘‘oppressive child labor’’ as follows:
Oppressive child labor means a condition of
employment under which (1) any employee
under the age of sixteen years is employed
by an employer (other than a parent or a
person standing in place of a parent employing his own child or a child in his custody
under the age of sixteen years in an occupation other than manufacturing or mining or
an occupation found by the Secretary of
Labor to be particularly hazardous for the
employment of children between the ages of
sixteen and eighteen years or detrimental to
their health or well-being) in any occupation, or (2) any employee between the ages of
sixteen and eighteen years is employed by an
employer in any occupation which the Secretary of Labor shall find and by order declare to be particularly hazardous for the
employment of children between such ages
or detrimental to their health or well-being,
but oppressive child labor shall not be
deemed to exist by virtue of the employment
27 In ‘‘Western Union Telegraph Co. v.
Lenroot,’’ 323 U.S. 490, the court held section
12(a) inapplicable to Western Union on the
grounds that the company does not
‘‘produce’’ or ‘‘ship’’ goods within the meaning of that subsection.
in any occupation of any person with respect
to whom the employer shall have on file an
unexpired certificate issued and held pursuant to regulations of the Secretary of Labor
certifying that such person is above the oppressive child labor age. The Secretary of
Labor shall provide by regulation or by order
that the employment of employees between
the ages of fourteen and sixteen years in occupations other than manufacturing and
mining shall not be deemed to constitute oppressive child labor if and to the extent that
the Secretary of Labor determines that such
employment is confined to periods which
will not interfere with their schooling and to
conditions which will not interfere with
their health and well-being.
(b) It will be noted that the term includes generally the employment of
young workers under the age of 16
years in any occupation. In addition,
the term includes employment of minors 16 and 17 years of age by an employer in any occupation which the
Secretary finds and declares to be particularly hazardous for the employment of children of such ages or detrimental to their health or well-being.
Authority is also given the Secretary
to issue orders or regulations permitting the employment of children 14 and
15 years of age in nonmanufacturing
and nonmining occupations where he
determines that such employment is
confined to periods which will not
interfere with their schooling and to
conditions which will not interfere
with their health and well-being. The
subsection further provides for the
issuance of age certificates pursuant to
regulations of the Secretary which will
protect an employer from unwitting
employment of oppressive child labor.
§ 570.118 Sixteen-year minimum.
The Act sets a 16-year-age minimum
for employment in manufacturing or
mining occupations, although under
FLSA section 13(c)(7), certain youth
between the ages of 14 and 18 may,
under specific conditions, be employed
inside and outside of places of business
that use power-driven machinery to
process wood products. Furthermore,
the 16-year-age minimum for employment is applicable to employment in
all other occupations unless otherwise
provided by regulation or order issued
by the Secretary.
[75 FR 28458, May 20, 2010]
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Wage and Hour Division, Labor
§ 570.119
§ 570.121
Fourteen-year minimum.
With respect to employment in occupations other than manufacturing and
mining and in accordance with the provisions of FLSA section 13(c)(7), the
Secretary is authorized to issue regulations or orders lowering the age minimum to 14 years where he or she finds
that such employment is confined to
periods that will not interfere with the
minors’ schooling and to conditions
that will not interfere with their
health and well-being. Pursuant to this
authority, the Secretary has detailed
in § 570.34 all those occupations in
which 14- and 15-year-olds may be employed when the work is performed
outside school hours and is confined to
other specified limits. The Secretary,
in order to provide clarity and assist
employers in attaining compliance, has
listed in § 570.33 certain prohibited occupations that, over the years, have
been the frequent subject of questions
or violations. The list of occupations in
§ 570.33 is not exhaustive. The Secretary has also set forth, in § 570.35, additional conditions that limit the periods during which 14- and 15-year-olds
may be employed. The employment of
minors under 14 years of age is not permissible under any circumstances if
the employment is covered by the child
labor provisions and not specifically
exempt.
[75 FR 28458, May 20, 2010]
§ 570.120
Eighteen-year minimum.
To protect young workers from hazardous employment, the FLSA provides for a minimum age of 18 years in
occupations found and declared by the
Secretary to be particularly hazardous
or detrimental to the health or wellbeing for minors 16 and 17 years of age.
Hazardous occupations orders are the
means through which occupations are
declared to be particularly hazardous
for minors. Since 1995, the promulgation and amendment of the hazardous
occupations orders have been effectuated under the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq.
The effect of these orders is to raise
the minimum age for employment to 18
years in the occupations covered. Seventeen orders, published in subpart E
of this part, have thus far been issued
under the FLSA and are now in effect.
[75 FR 28458, May 20, 2010]
§ 570.121
Age certificates.
(a) To protect an employer from unwitting violation of the minimum age
standards, it is provided in section
3(1)(2) of the Act that ‘‘oppressive child
labor shall not be deemed to exist by
virtue of the employment in any occupation of any person with respect to
whom the employer shall have on file
an unexpired certificate issued and
held pursuant to regulations of the
Secretary of Labor certifying that such
person is above the oppressive child
labor age.’’ An age certificate is a
statement of a minor’s age issued
under regulations of the Secretary
(Child Labor Regulation No. 1), 31 based
on the best available documentary evidence of age, and carrying the signatures of the minor and the issuing officer. Its purpose is to furnish an employer with reliable proof of the age of
a minor employee in order that he
may, as specifically provided by the
act, protect himself against unintentional violation of the child labor provisions. Pursuant to the regulations of
the Secretary, State employment or
age certificates are accepted as proof of
age in 45 States, the District of Columbia, and Puerto Rico, and Federal certificates of age in Idaho, Mississippi,
South Carolina and Texas. If there is a
possibility that the minor whom he intends to employ is below the applicable
age minimum for the occupation in
which he is to be employed, the employer should obtain an age certificate
for him.
(b) It should be noted that the age
certificate furnishes protection to the
employer as provided by the act only if
it shows the minor to be above the
minimum age applicable thereunder to
the occupation in which he is employed. Thus, a State certificate which
shows a minor’s age to be above the
minimum required by State law for the
occupation in which he is employed
does not protect his employer for purposes of the Fair Labor Standards Act
31 Subpart
A of this part.
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§ 570.122
29 CFR Ch. V (7–1–19 Edition)
unless the age shown on such certificate is also above the minimum provided under that act for such occupation.
EXEMPTIONS
§ 570.122
General.
(a) Specific exemptions from the
child labor requirements of the Act are
provided for:
(1) Employment of children in agriculture outside of school hours for the
school district where they live while so
employed;
(2) Employment of employees engaged in the delivery of newspapers to
the consumer;
(3) Employment of children as actors
or performers in motion pictures or in
theatrical, radio, or television productions;
(4) Employment by a parent or a person standing in a parent’s place of his
own child or a child in his custody
under the age of sixteen years in any
occupation other than manufacturing,
mining, or an occupation found by the
Secretary to be particularly hazardous
for the employment of children between the ages of sixteen and eighteen
years or detrimental to their health or
well-being.
(5) Employment of homeworkers engaged in the making of evergreen
wreaths, including the harvesting of
the evergreens or other forest products
used in making such wreaths.
(6) Employment of 16- and 17-yearolds to load, but not operate or unload,
certain scrap paper balers and paper
box compactors under specified conditions.
(7) Employment of 17-year-olds to
perform limited driving of cars and
trucks during daylight hours under
specified conditions.
(8) Employment of youths between
the ages of 14 and 18 years who, by statute or judicial order, are excused from
compulsory school attendance beyond
the eighth grade, under specified conditions, in places of business that use
power-driven machinery to process
wood products.
(b) When interpreting these provisions, the Secretary will be guided by
the principle that such exemptions
should be narrowly construed and their
application limited to those employees
who are plainly and unmistakably
within their terms. Thus, the fact that
a child’s occupation involves the performance of work which is considered
exempt from the child labor provisions
will not relieve his employer from the
requirements of section 12(c) or the
producer, manufacturer, or dealer from
the requirements of section 12(a) if,
during the course of his employment,
the child spends any part of his time
doing work which is covered but not so
exempt.
[75 FR 28459, May 20, 2010]
§ 570.123 Agriculture.
(a) Section 13(c) of the Act provides
an exemption from the child labor provisions for ‘‘any employee employed in
agriculture outside of school hours for
the school district where such employee is living while he is so employed.’’ This is the only exemption
from the child labor provisions relating
to agriculture or the products of agriculture. The various agricultural exemptions provided by sections 7(b)(3),
7(c), 13(a)(6), 13(a)(10) and 13(b)(5) from
all or part of the minimum wage and
overtime pay requirements are not applicable to the child labor provisions.
This exemption, it will be noted, is
limited to periods outside of school
hours in contrast to the complete exemption for employment in ‘‘agriculture’’ under the wage and hours provisions. Under the original act, the exemption became operative whenever
the applicable State law did not require the minor to attend school. The
legislative history clearly indicates
that in amending this provision, Congress sought to establish a clearer and
simpler test for permissive employment which could be applied without
the necessity of exploring State legal
requirements regarding school attendance in the particular State. It recognized that the original provision fell
short of achieving the objective of permitting agricultural work only so long
as it did not infringe upon the opportunity of children for education. By recasting the exemption on an ‘‘outside
of school hours’’ basis, Congress intended to provide a test which could be
more effectively applied toward carrying out this purpose.
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§ 570.124
(b) The applicability of the exemption to employment in agriculture as
defined in section 3(f) 32 of the Act depends in general upon whether such
employment conflict with school hours
for the locality where the child lives.
Since the phrase ‘‘school hours’’ is not
defined in the Act, it must be given the
meaning that it has in ordinary speech.
Moreover, it will be noted that the
statute speaks of school hours ‘‘for the
school district’’ rather than for the individual child. Thus, the provision does
not depend for its application upon the
individual student’s requirements for
attendance at school. For example, if
an individual student is excused from
his studies for a day or a part of a day
by the superintendent or the school
board, the exemption would not apply
if school was in session then. ‘‘Outside
of school hours’’ generally may be said
to refer to such periods as before or
after school hours, holidays, summer
vacation, Sundays, or any other days
on which the school for the district in
which the minor lives does not assemble. Since ‘‘school hours for the school
district’’ do not apply to minors who
have graduated from high school, the
entire year would be considered ‘‘outside of school hours’’ and, therefore,
their employment in agriculture would
be permitted at any time. While it is
the position of the Department that a
minor who leaves one district where
schools are closed and who moves into
and lives in another district where
schools are in session may not work
during the hours that schools are in
session in the new district, it will not
be asserted that this position prevents
the employment of a minor in a dis32 Agriculture
as defined in section 3(f) includes ‘‘farming in all its branches and
among other things includes the cultivation
and tillage of the soil, dairying, the production, cultivation, growing, and harvesting of
any agricultural or horticultural commodities (including commodities defined as agricultural commodities in section 15(g) of the
Agricultural Marketing Act, as amended),
the raising of livestock, bees, fur-bearing
animals, or poultry, and any practices (including any forestry, or lumbering operations) performed by a farmer or on a farm
as an incident to or in conjunction with such
farming operations, including preparation
for market, delivery to storage or to market
or to carriers for transportation to market.’’
trict where schools are in session, if
the school last attended by the minor
has closed for summer vacation. As a
reasonable precaution, however, no employer should employ a child under
such circumstances before May 15, and
after that date he should do so only if
he is shown by the minor satisfactory
evidence in the form of a written statement signed by a school official stating
that the school with which he is connected is the one last attended by the
minor and that the school is closed for
summer vacation. Such statement
should contain the minor’s name, the
name and address of the school, the
date the school closed for the current
year, the date the statement was
signed, and the title of the school official signing the statement.
(c) Attention is directed to the fact
that by virtue of the parental exemption provided in section 3(1) of the Act,
children under 16 years of age are permitted to work, for their parents on
their parents’ farms at any time provided they are not employed in a manufacturing or mining occupation.
(d) The orders (subpart E of this part)
declaring certain occupations to be
particularly hazardous for the employment of minors between 16 and 18 years
of age or detrimental to their health or
well-being do not apply to employment
in agriculture, pending study as to the
hazardous or detrimental nature of occupations in agriculture. 33
[16 FR 7008, July 20, 1951, as amended at 23
FR 3062, May 8, 1958. Redesignated at 28 FR
1634, Feb. 21, 1963. Redesignated and amended
at 36 FR 25156, Dec. 29, 1971]
§ 570.124
Delivery of newspapers.
Section 13(d) of the Act provides an
exemption from the child labor as well
as the wage and hours provisions for
employees engaged in the delivery of
newspapers to the consumer. This provision applies to carriers engaged in
making deliveries to the homes of subscribers or other consumers of newspapers (including shopping news). It
also includes employees engaged in the
street sale or delivery of newspapers to
the consumer. However, employees engaged in hauling newspapers to drop
33 See
note to subpart E of this part.
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§ 570.125
29 CFR Ch. V (7–1–19 Edition)
stations, distributing centers, newsstands, etc., do not come within the exemption because they do not deliver to
the consumer.
§ 570.125 Actors and performers.
Section 13(c) of the Act provides an
exemption from the child labor provisions for ‘‘any child employed as an
actor or performer in motion pictures
or theatrical productions, or in radio
or television productions.’’ The term
‘‘performer’’ used in this provision is
obviously more inclusive than the term
‘‘actor.’’ In regulations issued pursuant
to section 7(d)(3) of the Act, the Administrator of the Wage and Hour Division has defined a ‘‘performer’’ on radio
and television programs for purposes of
that section. 34 The Secretary will follow this definition in determining
whether a child is employed as a ‘‘* * *
performer * * * in radio or television
productions’’ for purposes of this exemption. Moreover, in many situations
the definition will be helpful in determining whether a child qualifies as a
‘‘* * * performer in motion pictures or
theatrical productions * * *’’ within
the meaning of the exemption.
§ 570.126 Parental exemption.
By the parenthetical phrase included
in section 3(l)(1) of the Act, a parent or
a person standing in place of a parent
may employ his own child or a child in
his custody under the age of 16 years in
any occupation other than the following: (a) Manufacturing; (b) mining;
34 Section 550.2(b) of this title provides:
(b) The term ‘‘performer’’ shall mean a person who performs a distinctive, personalized
service as a part of an actual broadcast or
telecast including an actor, singer, dancer,
musician, comedian, or any person who entertains, affords amusement to, or occupies
the interest of a radio or television audience
by acting, singing, dancing, reading, narrating, performing feats of skill, or announcing, or describing or relating facts, events
and other matters of interest, and who actively participates in such capacity in the
actual presentation of a radio or television
program. It shall not include such persons as
script writers, stand-ins, or directors who
are neither seen nor heard by the radio or
television audience; nor shall it include persons who participate in the broadcast or
telecast purely as technicians such as engineers, electricians and stage hands.
(c) an occupation found by the Secretary to be particularly hazardous or
detrimental to health or well-being for
children between the ages of 16 and 18
years. This exemption may apply only
in those cases where the child is exclusively employed by his parent or a person standing in his parents’ place.
Thus, where a child assists his father
in performing work for the latter’s employer and the child is considered to be
employed both by his father and his father’s employer, the parental exemption would not be applicable. The
words ‘‘parent’’ or a ‘‘person standing
in place of a parent’’ include natural
parents, or any other person, where the
relationship between that person and a
child is such that the person may be
said to stand in place of a parent. For
example, one who takes a child into his
home and treats it as a member of his
own family, educating and supporting
the child as if it were his own, is generally said to stand to the child in
place of a parent. It should further be
noted that occupations found by the
Secretary to be hazardous or detrimental to health or well-being for children between 16 and 18 years of age, as
well as manufacturing and mining occupations, are specifically excluded
from the scope of the exemption.
§ 570.127 Homeworkers engaged in the
making of evergreen wreaths.
FLSA section 13(d) provides an exemption from the child labor provisions, as well as the minimum wage
and
overtime
provisions,
for
homeworkers engaged in the making of
wreaths composed principally of natural holly, pine, cedar, or other evergreens (including the harvesting of the
evergreens or other forest products
used in making such wreaths).
[75 FR 28459, May 20, 2010]
§ 570.128 Loading of certain scrap
paper balers and paper box compactors.
(a) Section 13(c)(5) of the FLSA provides for an exemption from the child
labor provisions for the employment of
16- and 17-year-olds to load, but not operate or unload, certain power-driven
scrap paper balers and paper box compactors under certain conditions. The
provisions of this exemption, which are
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Wage and Hour Division, Labor
§ 570.130
contained in HO 12 (§ 570.63) include
that the scrap paper baler or compactor meet an applicable standard established by the American National
Standards Institute (ANSI) and identified in the statute, or a more recent
ANSI standard that the Secretary of
Labor has found, incorporated by reference (see § 570.63), and declared to be
as protective of the safety of young
workers as the ANSI standard named
in the statute.
(b) These standards have been incorporated into these regulations by reference by the FEDERAL REGISTER as
discussed in § 570.63. In addition, the
scrap paper baler or paper box compactor must include an on-off switch
incorporating a key-lock or other system and the control of the system
must be maintained in the custody of
employees who are at least 18 years of
age. The on-off switch of the scrap
paper baler or paper box compactor
must be maintained in an off position
when the machine is not in operation.
Furthermore, the employer must also
post a notice on the scrap paper baler
or paper box compactor that conveys
certain information, including the
identification of the applicable ANSI
standard that the equipment meets,
that 16- and 17-year-old employees may
only load the scrap paper baler or
paper box compactor, and that no employee under the age of 18 may operate
or unload the scrap paper baler or
paper box compactor.
[75 FR 28459, May 20, 2010]
§ 570.129 Limited driving of automobiles and trucks by 17-year-olds.
Section 13(c)(6) of the FLSA provides
an exemption for 17-year-olds, but not
16-year-olds, who, as part of their employment, perform the occasional and
incidental driving of automobiles and
trucks on public highways under specified conditions. These specific conditions, which are contained in HO 2
(§ 570.52), include that the automobile
or truck may not exceed 6,000 pounds
gross vehicle weight, the driving must
be restricted to daylight hours, the vehicle must be equipped with a seat belt
or similar restraining device for the
driver and for any passengers, and the
employer must instruct the employee
that such belts or other devices must
be used. In addition, the 17-year-old
must hold a State license valid for the
type of driving involved in the job,
have successfully completed a Stateapproved driver education course, and
have no records of any moving violations at the time of his or her hire. The
exemption also prohibits the minor
from performing any driving involving
the towing of vehicles; route deliveries
or route sales; the transportation for
hire of property, goods, or passengers;
urgent, time-sensitive deliveries; or
the transporting of more than three
passengers at any one time. The exemption also places limitations on the
number of trips the 17-year-old may
make each day and restricts the driving to a 30-mile radius of the minor’s
place of employment.
[75 FR 28459, May 20, 2010]
§ 570.130 Employment of certain youth
inside and outside of places of business that use power-driven machinery to process wood products.
Section 13(c)(7) of the FLSA provides
a limited exemption from the child
labor provisions for certain youths between the ages of 14 and 18 years who,
by statute or judicial order, are excused from compulsory school attendance beyond the eighth grade, that permits their employment inside and outside of places of business that use
power-driven machinery to process
wood products. The provisions of this
exemption are contained in subpart C
of this part (§ 570.34(m)) and HO 4
(§ 570.54). Although the exemption allows certain youths between the ages
of 14 and 18 years to be employed inside
and outside of places of business that
use power-driven machines to process
wood products, it does so only if such
youths do not operate or assist in the
operation of power-driven woodworking
machines. The exemption also requires
that the youth be supervised by an
adult relative or by an adult member of
the same religious sect as the youth.
The youth must also be protected from
wood particles or other flying debris
within the workplace by a barrier appropriate to the potential hazard of
such wood particles or flying debris or
by maintaining a sufficient distance
from machinery in operation. For the
exemption to apply, the youth must
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§ 570.140
29 CFR Ch. V (7–1–19 Edition)
also be required to use personal protective equipment to prevent exposure to
excessive levels of noise and sawdust.
[75 FR 28460, May 20, 2010]
ENFORCEMENT
§ 570.140 General.
(a) Section 15(a)(4) of the Act makes
any violation of the provisions of sections 12(a) or 12(c) unlawful. Any such
unlawful act or practice may be enjoined by the United States District
Courts under section 17 upon court action, filed by the Secretary pursuant to
section 12(b) and, if willful will subject
the offender to the criminal penalties
provided in section 16(a) of the Act.
Section 16(a) provides that any person
who willfully violates any of the provisions of section 15 shall upon conviction thereof be subject to a fine of not
more than $10,000, or to imprisonment
for not more than six months, or both.
No person shall be imprisoned under
this subsection except for an offense
committed after the conviction of such
person for a prior offense under this
subsection.
(b) In addition, FLSA section 16(e)
states that any person who violates the
provisions of FLSA sections 12 or 13(c),
relating to child labor, or any regulations issued under those sections, shall
be subject to a civil penalty, not to exceed:
(1) $12,845 for each employee who was
the subject of such a violation; or
(2) $58,383 with regard to each such
violation that causes the death or serious injury of any employee under the
age of 18 years, which penalty may be
doubled where the violation is repeated
or willful.
(c) Part 579 of this chapter, Child
Labor Violations—Civil Money Penalties,
provides for the issuance of the notice
of civil money penalties for any violation of FLSA sections 12 or 13(c) relating to child labor. Part 580 of this chapter, Civil Money Penalties—Procedures
for Assessing and Contesting Penalties,
describes the administrative process
for assessment and resolution of the
civil money penalties. When a civil
money penalty is assessed against an
employer for a child labor violation,
the employer has the right, within 15
days after receipt of the notice of such
penalty, to file an exception to the determination that the violation or violations occurred. When such an exception is filed with the office making the
assessment, the matter is referred to
the Chief Administrative Law Judge,
and a formal hearing is scheduled. At
such a hearing, the employer or an attorney retained by the employer may
present such witnesses, introduce such
evidence and establish such facts as the
employer believes will support the exception. The determination of the
amount of any civil money penalty becomes final if no exception is taken to
the administrative assessment thereof,
or if no exception is filed to the decision and order of the administrative
law judge.
[75 FR 28460, May 20, 2010, as amended at 82
FR 5382, Jan. 18, 2017; 83 FR 13, Jan. 2, 2018;
84 FR 218, Jan. 23, 2019]
§ 570.141
Good faith defense.
A provision is contained in section
12(a) of the Act relieving any purchaser
from liability thereunder who ships or
delivers for shipment in commerce
goods which he acquired in good faith
in reliance on written assurance from
the producer, manufacturer, or dealer
that the goods were produced in compliance with section 12, and which he
acquired for value without notice of
any violation. 36
[16 FR 7008, July 20, 1951. Redesignated at 28
FR 1634, Feb. 21, 1963, and further redesignated and amended at 36 FR 25156, Dec. 29,
1971. Redesignated at 75 FR 28459, May 20,
2010]
§ 570.142
Relation to other laws.
Section 18 provides, in part, that ‘‘no
provision of this act relating to the
employment of child labor shall justify
noncompliance with any Federal or
State law or municipal ordinance establishing a higher standard than the
standard established under this act.’’
The child labor requirements of the
Fair Labor Standards Act, as amended,
36 For a complete discussion of this subject
see part 789 of this title, General Statement
on the Provisions of section 12(a) and section
15(a)(1) of the Fair Labor Standards Act, as
amended, relating to Written Assurances.
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Wage and Hour Division, Labor
§ 575.1
must be complied with as to the employment of minors within their general coverage and not excepted from
their operation by special provision of
the act itself regardless of any State,
local, or other Federal law that may be
applicable to the same employment.
Furthermore, any administrative action pursuant to other laws, such as
the issuance of a work permit to a
minor or the referral by an employment agency of a minor to an employer
does not necessarily relieve a person of
liability under this act. Where such
other legislation is applicable and does
not contravene the requirements of the
Fair Labor Standards Act, however,
nothing in the act, the regulations or
the interpretations announced by the
Secretary should be taken to override
or nullify the provisions of these laws.
Although compliance with other applicable legislation does not constitute
compliance with the act unless the requirements of the act are thereby met,
compliance with the act, on the other
hand, does not relieve any person of liability under other laws that establish
higher child labor standards than those
prescribed by or pursuant to the act.
Moreover, such laws, if at all applicable, continue to apply to the employment of all minors who either are not
within the general coverage of the
child labor provisions of the act or who
are specifically excepted from their requirements.
[16 FR 7008, July 20, 1951. Redesignated at 28
FR 1634, Feb. 21, 1963, and further redesignated and amended at 36 FR 25156, Dec. 29,
1971. Redesignated at 75 FR 28459, May 20,
2010]
PART 575—WAIVER OF CHILD
LABOR PROVISIONS FOR AGRICULTURAL EMPLOYMENT OF 10
AND 11 YEAR OLD MINORS IN
HAND HARVESTING OF SHORT
SEASON CROPS
Sec.
575.1 Purpose and scope.
575.2 Definitions.
575.3 Application for waiver.
575.4 Information to be included in application.
575.5 Supporting data to accompany application.
575.6 Procedure for action on an application.
575.7 Statutory conditions for employment
under the waiver.
575.8 Secretary’s conditions for employment
under the waiver.
575.9 Failure to comply with terms and conditions of the waiver.
AUTHORITY: Secs. 11, 12, 13, 18, 52 Stat. 1067,
1069, as amended; 29 U.S.C. 211, 212, 213, 218;
Secretary’s Order 01–2014 (Dec. 19, 2014), 79
FR 77527 (Dec. 24, 2014).
SOURCE: 43 FR 26562, June 21, 1978, unless
otherwise noted.
§ 575.1
Purpose and scope.
(a) Section 13(c)(4) was added to the
Fair Labor Standards Act of 1938, as
amended, by the Fair Labor Standards
Amendments of 1977. This section provides that:
(A) An employer or group of employers
may apply to the Secretary for a waiver of
the application of section 12 to the employment for not more than 8 weeks in any calendar year of individuals who are less than
12 years of age, but not less than 10 years of
age, as hand harvest laborers in an agricultural operation which has been, and is customarily and generally recognized as being,
paid on a piece rate basis in the region in
which such individuals would be employed.
The Secretary may not grant such a waiver
unless he finds, based on objective data submitted by the applicant, that:
(i) The crop to be harvested is one with a
particularly short harvesting season and the
application of section 12 would cause severe
economic disruption in the industry of the
employer or group of employers applying for
the waiver;
(ii) The employment of the individuals to
whom the waiver would apply would not be
deleterious to their health or well-being;
(iii) The level and type of pesticides and
other chemicals used would not have an adverse effect on the health or well-being of
the individuals to whom the waiver would
apply;
(iv) Individuals age 12 and above are not
available for such employment; and
(v) The industry of such employer or group
of employers has traditionally and substantially employed individuals under 12 years of
age without displacing substantial job opportunities for individuals over 16 years of age.
(B) Any waiver granted by the Secretary
under subparagraph (A) shall require that:
(i) The individuals employed under such
waiver be employed outside of school hours
for the school district where they are living
while so employed;
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§ 575.2
29 CFR Ch. V (7–1–19 Edition)
(ii) Such individuals while so employed
commute daily from their permanent residence to the farm on which they are so employed; and
(iii) Such individuals be employed under
such waiver (I) for not more than 8 weeks between June 1 and October 15 of any calendar
year, and (II) in accordance with such other
terms and conditions as the Secretary shall
prescribe for such individuals’ protection.
(b) The child labor provisions of the
Fair Labor Standards Act, section 12,
require the following age standards for
employment in agriculture:
(1) 16 years of age in any occupation
at any time;
(2) 14 and 15 years of age outside of
school hours except in occupations
found and declared by the Secretary to
be particularly hazardous for the employment of minors under 16 years of
age (subpart E–1, 29 CFR 570.70, et seq.);
(3) 12 and 13 years of age in nonhazardous occupations outside of school
hours if:
(i) Such employment is with the
written consent of a parent or person
standing in the place of a parent of
such minor, or
(ii) Such employment is on the same
farm where such parent or person is
also employed;
(4) Under 12 years of age in nonhazardous occupations outside of school
hours if such employment is with the
written consent of a parent or person
standing in place of a parent of such
minor, on a farm where, because of the
provisions of section 13(a)(6)(A) of the
Act, none of the employees are required to be paid at the wage rate prescribed by section 6(a)(5) of the Act;
(5) 10 and 11 years of age in nonhazardous occupations outside of school
hours employed to hand-harvest short
season crop or crops under a waiver
issued pursuant to section 13(c)(4) of
the Act and this part:
(6) Minors of any age may be employed by their parents or persons
standing in place of their parents at
any time in any occupation on a farm
owned or operated by their parents or
persons standing in place of their parents.
(c) This part provides the procedures
to be used under section 13(c)(4) of the
Act. This part describes the information and defines the supporting data
that the employer or group of employ-
ers must submit when applying for a
waiver of the child labor provisions for
the employment of 10 and 11 year old
minors as hand-harvest laborers in an
agricultural operation. It further explains the specific requirements imposed by the statute for employment
under a waiver and specifies the conditions prescribed by the Secretary for
employment under a waiver.
§ 575.2
Definitions.
As used in this part:
Act means the Fair Labor Standards
Act of 1938, as amended (52 Stat. 1060,
as amended; 29 U.S.C. 201, et seq.).
Administrator means the Administrator of the Wage and Hour Division,
U.S. Department of Labor, and includes
an authorized representative designated by the Administrator to perform any of the functions of the Administrator under this part.
Agriculture means agriculture as defined in section 3(f) of the Act and as
interpreted in part 780 of this chapter.
Commute daily means the minors
shall travel by foot, car, or other vehicle designed for transporting passengers from their permanent residences to the field or farm where they
will work and return thereto at the end
of each workday.
Department means the U.S. Department of Labor.
Employer means employer as defined
in section 3(d) of the Act.
Group of employers means a number of
employers who seek to be considered
together for the purpose of applying for
a waiver under section 13(c)(4) of the
Act.
Hand-harvest laborers means agricultural workers engaged solely in harvesting by hand soil grown crops such
as but not limited to berries, potatoes,
and beans, and as interpreted in
§ 780.312 of this chapter.
Outside school hours means such periods as determined by the school district of the minor’s permanent residence. These periods include before or
after school hours, holidays, summer
vacation, Saturdays, Sundays, or any
other days on which the school for the
school district does not assemble.
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Wage and Hour Division, Labor
§ 575.4
Permanent residence means the place
where the minor and the minor’s parent or person standing in place of a
parent reside year-round.
Secretary means the Secretary of
Labor, United States Department of
Labor, or an authorized representative
of the Secretary.
Waiver means a letter signed by the
Administrator advising the named employer or group of employers that 10
and 11 year old minors may be employed in the hand-harvesting of the
specified short season crop or crops for
the period designated, in accordance
with the terms and conditions set forth
in section 13(c)(4) of the Act and this
part.
(iii) Employment will not be deleterious to the health and well-being of 10
and 11 year olds;
(iv) The level of pesticides will not
adversely affect 10 and 11 year olds;
(v) Individuals 12 years and over are
not available for employment;
(vi) Employer or group of employers
has traditionally used minors under 12
years and this will not displace employees 16 years or older.
(c) The application shall be signed
and dated by the employer or group of
employers requesting the waiver or by
the authorized representative of such
employer or group.
(Approved by the Office of Management and
Budget under control number 1215–0120)
[43 FR 26562, June 21, 1978; 43 FR 28471, June
30, 1978, as amended at 82 FR 2229, Jan. 9,
2017]
[43 FR 26562, June 21, 1978, as amended at 47
FR 145, Jan. 5, 1982; 82 FR 2229, Jan. 9, 2017]
§ 575.3
Application for waiver.
§ 575.4 Information to be included in
application.
(a) An application for a waiver shall
be filed with the Administrator of the
Wage and Hour Division, United States
Department of Labor, Washington, DC
20210. To permit adequate time for
processing, it is recommended that
such applications be filed 6 weeks prior
to the period the waiver is to be in effect.
(b) No particular form is prescribed.
The application, which may be in letter
form, shall be typewritten or clearly
written and shall include the following
information:
(1) The general information as described in § 575.4 of this part:
(i) Name and address of employer or
group of employers;
(ii) Telephone number;
(iii) Location of farm(s);
(iv) Crop or crops to be hand harvested;
(v) Whether payment is customarily
paid on a piece rate basis;
(vi) Requested period of waiver;
(vii) Statement that such employment shall be outside school hours;
(2) The objective data as required in
§ 575.5 of this part to show that:
(i) The crops have a short harvesting
season;
(ii) Without 10 and 11 year olds the
industry would suffer severe economic
disruption;
An application for a waiver pursuant
to section 13(c)(4) of the Act shall contain the following information:
(a) The name, address, and zip code of
the employer, or each employer of a
group of employers, and the authorized
representative, if any, of an employer
or group.
(b) The telephone number and area
code for any employer or authorized
representative from whom additional
information concerning the application
may be obtained.
(c) The address, location, and/or area
(State, county, and/or other geographic
designation), clearly identifying each
employer’s farm(s) or field(s) where 10
and 11 year old hand-harvest laborers
are to be employed.
(d) The specific crop or crops to be
hand-harvested at each designated
farm or field.
(e) Substantiation of the claim that
such agricultural operation ‘‘is customarily and generally recognized as
being paid on a piece rate basis in the
region in which such individuals would
be employed.’’ The Administrator will
accept signed statements to that effect
from agricultural employers and employees and others, such as agricultural extension agents, in the region of
employment who are familiar with
farming operations and practices in the
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§ 575.5
29 CFR Ch. V (7–1–19 Edition)
region and with the method of compensation used in such operations and
practices.
(f) Designated dates of not more than
8 weeks an any calendar year, between
June 1 and October 15, during which it
is anticipated that 10 and 11 year old
minors will be employed in the handharvesting of the specified short season
crop or crops.
(g) A statement that the 10- and 11year old hand harvesters will be employed outside school hours.
§ 575.5 Supporting data to accompany
application.
Objective data, as required by section
13(c)(4) of the Act, shall also be submitted by the employer or group of employers applying for a waiver, to show
that:
(a) The crop to be harvested is one
with a ‘‘particularly short harvesting
season.’’ The variety of each crop to be
harvested must ordinarily be harvested
within 4 weeks in the region in which
the waiver will be applicable. The Administrator will accept the written
statement to that effect from the agricultural extension agent for the county.
(b) The 12-year minimum age prescribed by the Act for such employment would cause ‘‘severe economic
disruption in the industry of the employer or group of employers applying
for the waiver.’’ Severe economic disruption in the industry refers to the
consequences of not meeting a compelling need for the employment of 10- and
11-year olds to avoid loss of a significant portion of the crop. Evidence of
this need includes the projected number of laborers needed to harvest the
acreage planted and evidence that recruitment requirements specified in
paragraph (e) of this section have been
complied with. Data concerning the
number of hand harvest laborers used
in previous years for given acreages
will serve as a basis for evaluating
needs for the current year. If the requisite number of workers cannot be recruited from the labor supply of 12
years and above, this would ordinarily
demonstrate the compelling need for
the employment of 10 and 11 year olds.
(c) The employment of minors under
the waiver ‘‘would not be deleterious to
their health or well-being.’’ This refers
to the prospective effect on the health
or well-being generally (i.e., other than
the tolerance level of pesticides or
other chemicals) of 10 and 11 year-old
hand harvesters. The Administrator
will accept signed statements to that
effect from doctors, or nurses or public
health officials in the region.
(d) The ‘‘level and type of pesticides
and other chemicals used would not
have an adverse effect on the health or
well-being of’’ minors employed under
the waiver. The safe reentry standards
established by the Environmental Protection Agency, and followed by other
Federal and State agencies, were established for adult workers and have not
been shown to be safe for 10 and 11 year
olds. Therefore, the applicant, in order
to satisfy this condition, will either
have to submit a statement that no
pesticides or other chemicals were used
on the crop to be harvested or submit
data which upon study by the Secretary or the Secretary’s designee establishes a safe reentry times for 10
and 11 year olds. If such data, or additional studies conducted by the Secretary or the Secretary’s designee, establish safe reentry standards for 10
and 11 year olds, this section will be
amended to include such standards and
the applicant will then need only identify the type and level of pesticides or
chemicals used and the date of last application of same prior to harvest.
(e) Individuals age 12 and above are
not available for such employment.
Evidence of such unavailability must
be documented by the applicant by:
(1) Placement of intrastate and interstate job orders, in which the piece
rate is specified, with the state employment service sufficiently in advance of the harvest to allow reasonable time for the recruitment of local
and migrant workers. An interstate
order need not be placed if the applicant can demonstrate that suitable
housing is not available.
(2) Placement of at least two advertisements in local papers of general
circulation or advertisements over
local radio stations.
(3) Contact with farm labor contractors, migrant workers, and other potential workers.
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Wage and Hour Division, Labor
§ 575.8
(4) Contact with schools, business
and labor organizations, non-profit organizations and public agencies to enlist their help. Data showing the responses received to these solicitations
must be categorized by age and submitted with the waiver application to
verify that older workers are not available to perform the work.
(f) The ‘‘industry of such employer or
groups of employers has traditionally
and substantially employed individuals
under twelve years of age without displacing substantial job opportunities
for individuals over sixteen years of
age.’’ Documentation that the industry
has traditionally and substantially employed individuals under 12 years of age
may include newspaper reports, magazine articles, research organization reports, or other appropriate sources.
Data to indicate that such employment
did not displace substantial job opportunities for individuals over 16 years of
age may include the signed statement
of an appropriate official of the employment service agency of the State
(or States, if region designated crosses
State lines) certifying to that fact.
This certification must be based on
statistical documentation for at least
the previous year.
(g) When supporting data required by
this section are submitted by an employer or group of employers, the objective data required by paragraph (d)
of this section shall be submitted on
the basis of each individual employer.
However, objective data required by
paragraphs (a), (b), (c), (e), and (f) of
this section may be submitted for the
specific geographic area, e.g., an entire
county, of the employer or group of
employers.
[43 FR 26562, June 21, 1978; 43 FR 28471, June
30, 1978, as amended at 44 FR 22061, Apr. 13,
1979; 44 FR 24059, Apr. 24, 1979; 44 FR 29049,
May 18, 1979; 45 FR 55177, Aug. 19, 1980]
§ 575.6 Procedure for action on an application.
(a) Upon receipt of an application for
a waiver, the Administrator shall review all of the information and supporting data. If sufficient, the Administrator shall grant a waiver; if insufficient, the Administrator may seek further information. If such information
is not made available to the Adminis-
trator, the Administrator shall deny
the waiver.
(b) The Administrator shall deny the
application for a waiver from any employer against whom a final civil
money penalty is outstanding under
section 16(e) of the Act for violation of
the child labor provisions of the Act.
(c) The waiver, in the form of a letter
signed by the Administrator, shall set
forth the terms and conditions for employment under the waiver as provided
in §§ 575.7 and 575.8. The waiver shall be
issued to the employer or group of employers applying for it.
(d) If a waiver is granted there will be
published in the FEDERAL REGISTER a
general notice to that effect setting
forth for each waiver granted: the
name of the employer or the name of
each employer of a group of employers;
the address of each such employer, including city, state, and zip code; and
the dates of the period the waiver will
be in effect.
(e) If a waiver is denied, the Administrator shall give written notice of such
denial to the employer or group of employers applying for a waiver. Such denial will be without prejudice to the
filing of any subsequent application.
§ 575.7 Statutory conditions for employment under the waiver.
Any waiver granted pursuant to section 13(c)(4) of the Act and this part
shall require that:
(a) Employment of 10 and 11 year old
minors pursuant to the waiver be outside school hours.
(b) Individuals employed commute
daily from their permanent residence
to the farms(s) or field(s) where employed.
(c) Such individuals be employed for
not more than 8 weeks between June 1
and October 15 of any calendar year.
When schools are in session, any employment under a waiver shall be confined to outside of school hours.
§ 575.8 Secretary’s conditions for employment under the waiver.
The Secretary prescribes the following terms and conditions for the
protection of minors employed pursuant to a waiver granted under section
13(c)(4) of the Act:
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§ 575.8
29 CFR Ch. V (7–1–19 Edition)
(a) An employer or group of employers granted such a waiver shall obtain
and keep on file a signed statement of
the parent or person standing in the
place of the parent of each 10 and 11year old minor employed consenting to
the employment of such minor under
the waiver.
(b) Any employment pursuant to a
waiver shall be in compliance with applicable Federal and State laws, and
any regulations issued under them.
(c) No employer or group of employers shall employ any 10 or 11 year old
minor pursuant to a waiver for more
than 5 hours in any one day or for more
than 30 hours in any workweek with a
meal break of at least 30 minutes and
two rest breaks of at least 15 minutes
each.
(d) An employer or group of employers granted such a waiver shall provide
immediately adjacent to the field(s) to
be hand harvested: (1) Adequate sanitary facilities, such as portable toilets;
(2) adequate and clean drinking water
in covered containers with spouts, and
an adequate supply of paper or plastic
cups for individual drinking use; and
(3) a specified adult employee, who is
appropriately equipped and is knowledgeable about first-aid treatment and
readily available to give such treatment when needed.
(e) An employer or group of employers granted such a waiver shall provide
emergency transportation either to the
minor’s permanent residence or to the
nearest hospital for any 10 or 11 year
old hand harvester who becomes ill or
is injured during the normal hours of
employment.
(f) No 10 or 11 year old employed
under a waiver shall ride upon or be
employed in the operation of or in the
close proximity to any power driven
machinery or equipment. Generally, a
distance of fifty feet or more will be
construed to meet the requirement
that employment not be in ‘‘close proximity’’ to machinery or equipment.
(g) An employer or group of employers granted such a waiver who owns,
operates, or causes to be operated any
vehicle for the transportation of such
minors shall be responsible for assuring
that:
(1) Every such vehicle is in compliance with all applicable Federal and
State safety and health standards and
with the rules and regulations issued
by the Bureau of Motor Carrier Safety,
Federal Highway Administration of the
U.S. Department of Transportation;
(2) Every such vehicle be designed for
transporting passengers and be operated by a lawfully licensed driver; and
(3) A vehicle liability insurance policy provides insurance in an amount
not less than the amounts applicable to
vehicles used in the transportation of
passengers under the Interstate Commerce Act and its regulations. These
amounts currently are as follows:
INSURANCE REQUIRED FOR PASSENGER
EQUIPMENT
12 or less
passengers
Limit for bodily injuries to or death
of 1 person .................................
Limit for bodily injuries to or death
of all persons injured or killed in
any 1 accident (subject to a
maximum of $100,000 for bodily
injuries to or death of 1 person)
Limit for loss or damage in any 1
accident to property of others
(excluding cargo) .......................
$100,000
$100,000
300,000
500,000
50,000
50,000
(h) A copy of the waiver shall be
posted or readily available at the site
or sites of such employment of such
minors during the entire period.
(i) The employer or group of employers shall maintain and preserve a
record of the name, address, and occupation of each minor employed under
the
waiver
in
accordance
with
§ 516.33(b) of this chapter. In addition,
the record shall also include the date of
birth, the name and address of the
school in which the minor is enrolled,
and the number of hours worked each
day and each week of the designated
period. Each employer required to
maintain records under this part shall
preserve them for a period of at least 2
years.
(j) A waiver shall be effective for the
period designated therein with no provision for amendment
[43 FR 26562, June 21, 1978; 43 FR 28471, June
30, 1978]
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Wage and Hour Division, Labor
§ 578.3
§ 575.9 Failure to comply with the
terms and conditions of the waiver.
If the employer or group of employers granted a waiver pursuant to section 13(c)(4) of the Act and this part do
not comply with the terms and conditions set forth in the waiver and this
part, the waiver shall be null and void
and the employer or group of employers will be subject to civil money penalties under section 16(e) of the Act.
PART 578—MINIMUM WAGE AND
OVERTIME
VIOLATIONS—CIVIL
MONEY PENALTIES
Sec.
578.1
578.2
578.3
a
578.4
What does this part cover?
Definitions.
What types of violations may result in
penalty being assessed?
Determination of penalty.
AUTHORITY: Sec. 9, Pub. L. 101–157, 103 Stat.
938, sec. 3103, Pub. L. 101–508, 104 Stat. 1388–
29 (29 U.S.C. 216(e)), Pub. L. 101–410, 104 Stat.
890 (28 U.S.C. 2461 note), as amended by Pub.
L. 104–134, section 31001(s), 110 Stat. 1321–358,
1321–373, and Pub. L. 114–74, 129 Stat 584.
SOURCE: 57 FR 49129, Oct. 29, 1992, unless
otherwise noted.
§ 578.1 What does this part cover?
Section 9 of the Fair Labor Standards Amendments of 1989 amended section 16(e) of the Act to provide that
any person who repeatedly or willfully
violates the minimum wage (section 6)
or overtime provisions (section 7) of
the Act shall be subject to a civil
money penalty not to exceed $1,000 for
each such violation. The Federal Civil
Penalties Inflation Adjustment Act of
1990 (Pub. L. 101–410), as amended by
the Debt Collection Improvement Act
of 1996 (Pub. L. 104–134, section 31001(s))
and the Federal Civil Penalties Inflation Adjustment Act Improvement Act
of 2015 (Pub. L. 114–74, section 701), requires that inflationary adjustments be
annually made in these civil money
penalties according to a specified costof-living formula. This part defines
terms necessary for administration of
the civil money penalty provisions, describes the violations for which a penalty may be imposed, and describes criteria for determining the amount of
penalty to be assessed. The procedural
requirements for assessing and con-
testing such penalties are contained in
29 CFR part 580.
[66 FR 63503, Dec. 7, 2001, as amended at 81
FR 43451, July 1, 2016]
§ 578.2
Definitions.
(a) Act means the Fair Labor Standards Act of 1938, as amended (52 Stat.
1060 (29 U.S.C. 201 et seq.));
(b) Administrator means the Administrator of the Wage and Hour Division,
U.S. Department of Labor, and includes
any official of the Wage and Hour Division who is authorized by the Administrator to perform any of the functions
of the Administrator under this part.
(c) Person includes any individual,
partnership, corporation, association,
business trust, legal representative, or
organized group of persons.
[57 FR 49129, Oct. 29, 1992, as amended at 82
FR 2229, Jan. 9, 2017]
§ 578.3 What types of violations may
result in a penalty being assessed?
(a) A penalty of up to $2,014 per violation may be assessed against any person who repeatedly or willfully violates
section 6 (minimum wage) or section 7
(overtime) of the Act. The amount of
the penalty will be determined by applying the criteria in § 578.4.
(b) Repeated violations. An employer’s
violation of section 6 or section 7 of the
Act shall be deemed to be ‘‘repeated’’
for purposes of this section:
(1) Where the employer has previously violated section 6 or 7 of the
Act, provided the employer has previously received notice, through a responsible official of the Wage and Hour
Division or otherwise authoritatively,
that the employer allegedly was in violation of the provisions of the Act; or
(2) Where a court or other tribunal
has made a finding that an employer
has previously violated section 6 or 7 of
the Act, unless an appeal therefrom
which has been timely filed is pending
before a court or other tribunal with
jurisdiction to hear the appeal, or unless the finding has been set aside or
reversed by such appellate tribunal.
(c) Willful violations. (1) An employer’s violation of section 6 or section 7
of the Act shall be deemed to be ‘‘willful’’ for purposes of this section where
the employer knew that its conduct
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§ 578.4
29 CFR Ch. V (7–1–19 Edition)
was prohibited by the Act or showed
reckless disregard for the requirements
of the Act. All of the facts and circumstances surrounding the violation
shall be taken into account in determining whether a violation was willful.
(2) For purposes of this section, an
employer’s conduct shall be deemed
knowing, among other situations, if
the employer received advice from a responsible official of the Wage and Hour
Division to the effect that the conduct
in question is not lawful.
(3) For purposes of this section, an
employer’s conduct shall be deemed to
be in reckless disregard of the requirements of the Act, among other situations, if the employer should have inquired further into whether its conduct
was in compliance with the Act, and
failed to make adequate further inquiry.
[57 FR 49129, Oct. 29, 1992; 57 FR 57280, Dec. 3,
1992, as amended at 66 FR 63503, Dec. 7, 2001;
81 FR 43451, July 1, 2016; 82 FR 5382, Jan. 18,
2017; 83 FR 13, Jan. 2, 2018; 84 FR 219, Jan. 23,
2019]
§ 578.4 Determination of penalty.
(a) In determining the amount of
penalty to be assessed for any repeated
or willful violation of section 6 or section 7 of the Act, the Administrator
shall consider the seriousness of the
violations and the size of the employer’s business.
(b) Where appropriate, the Administrator may also consider other relevant
factors in assessing the penalty, including but not limited to the following:
(1) Whether the employer has made
efforts in good faith to comply with the
provisions of the Act and this part;
(2) The employer’s explanation for
the violations, including whether the
violations were the result of a bona
fide dispute of doubtful legal certainty;
(3) The previous history of violations,
including whether the employer is subject to injunction against violations of
the Act;
(4) The employer’s commitment to
future compliance;
(5) The interval between violations;
(6) The number of employees affected; and
(7) Whether there is any pattern to
the violations.
PART 579—CHILD LABOR VIOLATIONS—CIVIL MONEY PENALTIES
Sec.
579.1 Purpose and scope.
579.2 Definitions.
579.3 Violations for which child labor civil
money penalties may be assessed.
579.4 [Reserved]
579.5 Determining the amount of the penalty and assessing the penalty.
AUTHORITY: 29 U.S.C. 203(l), 211, 212, 213(c),
216; Reorg. Plan No. 6 of 1950, 64 Stat. 1263, 5
U.S.C. App; secs. 25, 29, 88 Stat. 72, 76; Secretary of Labor’s Order No. 01–2014 (Dec. 19,
2014), 79 FR 77527 (Dec. 24, 2014); 28 U.S.C. 2461
Note (Federal Civil Penalties Inflation Adjustment Act of 1990); and Pub. L. 114–7, 129
Stat 584.
§ 579.1
Purpose and scope.
(a) Section 16(e), added to the Fair
Labor Standards Act of 1938, as amended, by the Fair Labor Standards
Amendments of 1974, and as further
amended by the Fair Labor Standards
Amendments of 1989, the Omnibus
Budget Reconciliation Act of 1990, the
Compactor and Balers Safety Standards Modernization Act of 1996, and the
Genetic Information Nondiscrimination Act of 2008, provides for the imposition of civil money penalties in the
following manner:
(1)(i) Any person who violates the
provisions of sections 212 or 213(c) of
the FLSA, relating to child labor, or
any regulation issued pursuant to such
sections, shall be subject to a civil penalty not to exceed:
(A) $12,845 for each employee who was
the subject of such a violation; or
(B) $58,383 with regard to each such
violation that causes the death or serious injury of any employee under the
age of 18 years, which penalty may be
doubled where the violation is a repeated or willful violation.
(ii) For purposes of paragraph
(a)(1)(i)(B) of this section, the term
‘‘serious injury’’ means:
(A) Permanent loss or substantial
impairment of one of the senses (sight,
hearing, taste, smell, tactile sensation);
(B) Permanent loss or substantial impairment of the function of a bodily
member, organ, or mental faculty, including the loss of all or part of an
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Wage and Hour Division, Labor
§ 579.2
arm, leg, foot, hand or other body part;
or
(C) Permanent paralysis or substantial impairment that causes loss of
movement or mobility of an arm, leg,
foot, hand or other body part.
(2) Any person who repeatedly or
willfully violates section 206 or 207 of
the FLSA, relating to wages, shall be
subject to a civil penalty not to exceed
$2,014 for each such violation.
(3) In determining the amount of any
penalty under section 216(e) of the
FLSA, the appropriateness of such penalty to the size of the business of the
person charged and the gravity of the
violation shall be considered. The
amount of any penalty under section
216(e) of the FLSA, when finally determined, may be:
(i) Deducted from any sums owing by
the United States to the person
charged;
(ii) Recovered in a civil action
brought by the Secretary in any court
of competent jurisdiction, in which
litigation the Secretary shall be represented by the Solicitor of Labor; or
(iii) Ordered by the court, in an action brought for a violation of section
215(a)(4) or a repeated or willful violation of section 215(a)(2) of the FLSA, to
be paid to the Secretary.
(4) Any administrative determination
by the Secretary of the amount of any
penalty under section 216(e) of the
FLSA shall be final, unless within 15
days after receipt of notice thereof by
certified mail the person charged with
the violation takes exception to the determination that the violations for
which the penalty is imposed occurred,
in which event final determination of
the penalty shall be made in an administrative proceeding after opportunity
for hearing in accordance with section
554 of title 5, United States Code, and
regulations to be promulgated by the
Secretary.
(5) Except for civil penalties collected for violations of section 212 of
the FLSA, sums collected as penalties
pursuant to section 216(e) of the FLSA
shall be applied toward reimbursement
of the costs of determining the violations and assessing and collecting such
penalties, in accordance with the provision of section 202 of the Act entitled
‘‘An Act to authorize the Department
of Labor to make special statistical
studies upon payment of the cost
thereof and for other purposes’’ (29
U.S.C. 9a). Civil penalties collected for
violations of section 212 shall be deposited in the general fund of the Treasury.
(b) The Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L.
101–410), as amended by the Debt Collection Improvement Act of 1996 (Pub.
L. 104–134, section 31001(s)) and the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015
(Pub. L. 114–74, section 701), requires
that Federal agencies annually adjust
their civil money penalties for inflation according to a specified cost-ofliving formula.
(c) This part explains our procedures
for issuing a notice of civil penalty to
an employer that has violated section
12 or section 13(c)(5) of the Act, or any
regulation issued under those sections;
describes the types of violations for
which we may impose a penalty and
the factors we will consider in assessing the amount of the penalty; outlines
the procedure for a person charged
with violations to file an exception to
the determination that the violations
occurred; and summarizes the methods
we will follow for collecting and recovering the penalty.
[40 FR 25792, June 18, 1975, as amended at 56
FR 8679, Feb. 28, 1991; 66 FR 63503, Dec. 7,
2001; 69 FR 75405, Dec. 16, 2004; 75 FR 28460,
May 20, 2010; 81 FR 43451, July 1, 2016; 82 FR
5382, Jan. 18, 2017; 83 FR 13, Jan. 2, 2018; 84 FR
219, Jan. 23, 2019]
§ 579.2
Definitions.
As used in this part and part 580 of
this chapter:
Act means the Fair Labor Standards
Act of 1938, as amended (52 Stat. 1060,
as amended; 29 U.S.C. 201, et seq.).
Administrative law judge means a person appointed as provided in 5 U.S.C.
3105 and subpart B of part 930 of title 5
of the CFR, and qualified to preside at
hearings under 5 U.S.C. 554–557.
Administrator means the Administrator of the Wage and Hour Division,
U.S. Department of Labor, and includes
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§ 579.3
29 CFR Ch. V (7–1–19 Edition)
an authorized representative designated by the Administrator to perform any of the functions of the Administrator under this part and part
580 of this chapter.
Agency has the meaning given it by 5
U.S.C. 551.
Chief Administrative Law Judge means
the Chief Administrative Law Judge,
Office of Administrative Law Judges,
U.S. Department of Labor, 800 K
Street, NW., Suite 400, Washington, DC
20001–8002.
Department means the U.S. Department of Labor.
Person includes any individual, partnership, corporation, association, business trust, legal representative, or organized group of persons.
Repeated violations has two components. An employer’s violation of section 12 or section 13(c) of the Act relating to child labor or any regulation
issued pursuant to such sections shall
be deemed to be repeated for purposes of
this section:
(1) Where the employer has previously violated section 12 or section
13(c) of the Act relating to child labor
or any regulation issued pursuant to
such sections, provided the employer
has previously received notice, through
a responsible official of the Wage and
Hour Division or otherwise authoritatively, that the employer allegedly
was in violation of the provisions of
the Act; or,
(2) Where a court or other tribunal
has made a finding that an employer
has previously violated section 12 or
section 13(c) of the Act relating to
child labor or any regulation issued
pursuant to such sections, unless an
appeal therefrom which has been timely filed is pending before a court or
other tribunal with jurisdiction to hear
the appeal, or unless the finding has
been set aside or reversed by such appellate tribunal.
Secretary means the Secretary of
Labor, U.S. Department of Labor, or an
authorized representative of the Secretary.
Serious injury means:
(1) Permanent loss or substantial impairment of one of the senses (sight,
hearing, taste, smell, tactile sensation);
(2) Permanent loss or substantial impairment of the function of a bodily
member, organ, or mental faculty, including the loss of all or part of an
arm, leg, foot, hand or other body part;
or,
(3) Permanent paralysis or substantial impairment that causes loss of
movement or mobility of an arm, leg,
foot, hand or other body part.
Solicitor of Labor means the Solicitor,
U.S. Department of Labor, and includes
attorneys designated by the Solicitor
to perform functions of the Solicitor
under this part and part 780 of this
chapter.
Willful violations under this section
has several components. An employer’s
violation of section 12 or section 13(c)
of the Act relating to child labor or
any regulation issued pursuant to such
sections, shall be deemed to be willful
for purposes of this section where the
employer knew that its conduct was
prohibited by the Act or showed reckless disregard for the requirements of
the Act. All of the facts and circumstances surrounding the violation
shall be taken into account in determining whether a violation was willful.
In addition, for purposes of this section, an employer’s conduct shall be
deemed knowing, among other situations, if the employer received advice
from a responsible official of the Wage
and Hour Division to the effect that
the conduct in question is not lawful.
For purposes of this section, an employer’s conduct shall be deemed to be
in reckless disregard of the requirements of the Act, among other situations, if the employer should have inquired further into whether its conduct
was in compliance with the Act, and
failed to make adequate further inquiry.
[75 FR 28461, May 20, 2010]
§ 579.3 Violations for which child labor
civil money penalties may be assessed.
(a) What constitutes the violation. Each
of the following constitutes a violation
of the Act and/or the Secretary’s regulations for which a penalty as provided
by section 16(e) of the Act and this part
may be imposed, unless employment of
the minor or minors referred to is
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§ 579.3
shown to come within a specific exemption or exception described in paragraph (c) of this section:
(1) Each shipment or delivery for
shipment in commerce by a producer,
manufacturer, or dealer of any goods
produced in an establishment situated
in the United States in or about which,
within thirty days prior to the removal
of such goods therefrom, there has been
employed any minor as described in
paragraph (b) of this section;
(2) Each employment by an employer
of any minor as described in paragraph
(b) of this section, for any period in
commerce or in the production of goods
for commerce or in any enterprise engaged in commerce or in the production of goods for commerce;
(3)–(4) [Reserved]
(5) The failure by an employer employing any minor for whom records
must be kept under any provision of
part 516 of this title to maintain and
preserve, as required by such provision,
such records concerning the date of the
minor’s birth and concerning the proof
of the minor’s age as specified therein;
and
(6) The failure by an employer employing any minor subject to any provision of 29 CFR part 570, to take or
cause to be taken such action as is necessary to assure compliance with all
requirements of such provision which,
by the regulations in such part, are
made conditions for lawful employment of such minor.
(b) Minors whose employment may result in violation. The violations described in paragraph (a) may result
from employment of any of the following minors as described:
(1) Any minor under the age of 18
years in any occupation (other than in
agriculture) in which employment, as
set forth in subpart E of part 570 of this
chapter, has been found and declared
by the Secretary to be particularly
hazardous for or detrimental to the
health or well-being of minors below
such age;
(2) Any minor under the age of 16
years:
(i) In agriculture during school hours
for the school district where such
minor is living while so employed; or
(ii) In agriculture in any occupation
found and declared by the Secretary as
set forth in subpart E–1 of part 570 of
this chapter, to be particularly hazardous for the employment of minors
below such age; or
(iii) In any manufacturing or mining
occupation; or
(iv) In any other occupation other
than in agriculture unless it is established that such minor is at least 14
years of age and the employment of
such minor in such occupation is specifically permitted by and in accord
with regulations of the Secretary as
set forth in subpart C of part 570 of this
chapter;
(3) Any minor under the age of 14
years:
(i) In any occupation other than in
agriculture; or
(ii) In agriculture, outside of school
hours for the school district where
such minor is living while so employed,
unless it is established either:
(A) That such minor is not less than
12 years of age and either (1) that such
employment is with the written consent of a parent or person standing in
place of a parent of such minor, or (2)
that such employment is on the same
farm where such parent or person is
also employed; or
(B) That such minor, if less than 12
years of age, is employed as described
in paragraph (b)(4)(i) or (b)(4)(ii) of this
section; and
(4) Any minor under the age of 12
years, unless it is established that such
minor is employed in agriculture outside of school hours for the school district where such minor is living while
so employed, and:
(i) Is employed by a parent or by a
person standing in place of a parent of
such minor, on a farm owned or operated by such parent or person; or
(ii) Is employed with the written consent of a parent or person standing in
place of a parent of such minor, on a
farm where, because of the provisions
of section 13(a)(6) of the Act, none of
the employees are required to be paid
at the wage rate prescribed by section
6(a)(5) of the Act.
(c) Exemptions and exceptions. Conduct
which otherwise might constitute a
violation of the Act as described in
paragraphs (a) and (b) of this section
may be shown to be not violative of the
child labor provisions by evidence that
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§ 579.4
29 CFR Ch. V (7–1–19 Edition)
a specific exemption or exception provided in the Act makes such conduct
permissible. Thus, the Act provides:
(1) That none of the child labor provisions of section 12 shall apply to: (i)
Any child employed as an actor or performer in motion pictures or theatrical
productions, or in radio or television
productions; (ii) any employee engaged
in the delivery of newspapers to the
consumer; (iii) any homeworker engaged in the making of wreaths composed principally of natural holly, pine,
cedar, or other evergreens (including
the harvesting of the evergreens or
other forest products used in making
such wreaths); or (iv) any employee
whose services during the workweek
are performed in a workplace within a
foreign country or within territory
under the jurisdiction of the United
States other than the States, territories, and possessions listed in section
13(f) of the Act (see Act, sections
13(c)(3), 13(d), 13(f));
(2) That, with respect to the violations described in paragraph (a)(1) of
this section, any such shipment or delivery for shipment of such goods by a
purchaser who acquired them in good
faith in reliance on written assurance
from the producer, manufacturer, or
dealer that the goods were produced in
compliance with the requirements of
section 12 of the Act, and who acquired
such goods for value without notice of
any such violation, shall not be deemed
prohibited (see Act, section 12(a) and 29
CFR part 789);
(3) That, with respect to violations
described in paragraph (a)(2) of this
section resulting from employment of
minors as described in paragraph (b)
(2)(iv), a parent or person standing in
place of a parent may lawfully employ
his or her own child or a child in his or
her custody under the age of 16 years in
an occupation other than: (i) Manufacturing or (ii) mining or (iii) an occupation found and declared by the Secretary of Labor to be particularly hazardous for the employment of children
between the ages of 16 and 18 years or
detrimental to their health or wellbeing, and an employer may lawfully
employ a young worker between 14 and
16 years of age in an occupation permitted and under conditions prescribed
by 29 CFR part 570, subpart C;
(4) That, with respect to violations
described in paragraph (a)(2) of this
section resulting from employment of
minors in agriculture as described in
paragraph (b)(2)(iii), a parent or person
standing in place of a parent may lawfully employ on a farm owned or operated by such parent or person, his or
her own child or a child in his or her
custody under the age of 16 years in an
occupation in agriculture found and declared by the Secretary of Labor to be
particularly hazardous for the employment of children below such age;
(5) That, with respect to violations
described in paragraph (a)(2) of this
section resulting from employment of
minors in agriculture as described in
paragraph (b)(3)(ii), employment of minors 12 or 13 years of age is lawful
under the conditions prescribed in
paragraph (b)(3)(ii)(A) of this section
and employment of minors under 12
years of age is lawful under the conditions
prescribed
in
paragraph
(b)(3)(ii)(B) of this section; and
(6) That, with respect to violations
described in paragraph (a)(2) of this
section resulting from employment of
minors in agriculture as described in
paragraph (b)(4), employment of minors under 12 years of age is lawful
under the conditions prescribed in
paragraph (b)(4)(i) or (ii) of this section.
[40 FR 25792, June 18, 1975, as amended at 41
FR 26836, June 29, 1976; 69 FR 75405, Dec. 16,
2004]
§ 579.4
[Reserved]
§ 579.5 Determining the amount of the
penalty and assessing the penalty.
(a) The administrative determination
of the amount of the civil penalty for
each employee who was the subject of a
violation of section 12 or section 13(c)
of the Act relating to child labor or of
any regulation under those sections
will be based on the available evidence
of the violation or violations and will
take into consideration the size of the
business of the person charged and the
gravity of the violations as provided in
paragraphs (b) through (d) of this section.
(b) In determining the amount of
such penalty there shall be considered
the appropriateness of such penalty to
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Pt. 580
the size of the business of the person
charged with the violation or violations, taking into account the number
of employees employed by that person
(and if the employment is in agriculture, the man-days of hired farm
labor used in pertinent calendar quarters), dollar volume of sales or business
done, amount of capital investment
and financial resources, and such other
information as may be available relative to the size of the business of such
person.
(c) In determining the amount of
such penalty there shall be considered
the appropriateness of such penalty to
the gravity of the violation or violations, taking into account, among
other things, any history of prior violations; any evidence of willfulness or
failure to take reasonable precautions
to avoid violations; the number of minors illegally employed; the age of the
minors so employed and records of the
required proof of age; the occupations
in which the minors were so employed;
exposure of such minors to hazards and
any resultant injury to such minors;
the duration of such illegal employment; and, as appropriate, the hours of
the day in which it occurred and
whether such employment was during
or outside school hours.
(d) Based on all the evidence available, including the investigation history of the person so charged and the
degree of willfulness involved in the
violation, it shall further be determined, where appropriate,
(1) Whether the evidence shows that
the violation is ‘‘de minimis’’ and that
the person so charged has given credible assurance of future compliance,
and whether a civil penalty in the circumstances is necessary to achieve the
objectives of the Act; or
(2) Whether the evidence shows that
the person so charged had no previous
history of child labor violations, that
the violations themselves involved no
intentional or heedless exposure of any
minor to any obvious hazard or detriment to health or well-being and
were inadvertent, and that the person
so charged has given credible assurance
of future compliance, and whether a
civil penalty in the circumstances is
necessary to achieve the objectives of
the Act.
(e) An administrative determination
of the amount of the civil money penalty for a particular violation or particular violations of section 12 or section 13(c) relating to child labor or any
regulation issued under those sections
shall become final 15 days after receipt
of the notice of penalty by certified
mail by the person so charged unless
such person has, pursuant to § 580.6
filed with the Secretary an exception
to the determination that the violation
or violations for which the penalty is
imposed occurred.
(f) A determination of the penalty
made in an administrative proceeding
after opportunity for hearing as provided in section 16(e) of the Act and
pursuant to Part 580 of this chapter
shall be final.
[40 FR 25792, June 18, 1975, as amended at 56
FR 8679, Feb. 28, 1991; 66 FR 63503, Dec. 7,
2001; 75 FR 28461, May 20, 2010; 81 FR 43451,
July 1, 2016]
PART 580—CIVIL MONEY PENALTIES—PROCEDURES FOR ASSESSING AND CONTESTING PENALTIES
Sec.
580.1 Definitions.
580.2 Applicability of procedures and rules.
580.3 Written notice of determination required.
580.4 Contents of notice.
580.5 Finality of notice.
580.6 Exception to determination of penalty
and request for hearing.
RULES OF PRACTICE
580.7
580.8
580.9
General.
Service and computation of time.
Commencement of proceeding.
REFERRAL FOR HEARING
580.10 Referral to Administrative Law
Judge.
580.11 Appointment of Administrative Law
Judge and notification of prehearing conference and hearing date.
580.12 Decision and Order of Administrative
Law Judge.
580.13 Procedures for appeals to the Administrative Review Board.
580.14 [Reserved]
580.15 Responsibility of the Office of Administrative Law Judges for the administrative record.
580.16 Final decision of the Administrative
Review Board.
580.17 Retention of official record.
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§ 580.1
580.18
29 CFR Ch. V (7–1–19 Edition)
Collection and recovery of penalty.
AUTHORITY: 29 U.S.C. 9a, 203, 209, 211, 212,
213(c), 216; Reorg. Plan No. 6 of 1950, 64 Stat.
1263, 5 U.S.C. App; secs. 25, 29, 88 Stat. 72, 76;
Secretary’s Order 01–2014 (Dec. 19, 2014), 79
FR 77527 (Dec. 24, 2014); 5 U.S.C. 500, 503, 551,
559; 103 Stat. 938.
SOURCE: 56 FR 24991, May 31, 1991, unless
otherwise noted.
§ 580.1 Definitions.
As used in this part:
Act means the Fair Labor Standards
Act of 1938, as amended (52 Stat. 1060 as
amended; 29 U.S.C. 201 et seq.).
Administrative law judge means a person appointed as provided in 5 U.S.C.
3105 and subpart B of part 930 of title 5
of the CFR, and qualified to preside at
hearings under 5 U.S.C. 554–557.
Administrator means the Administrator of the Wage and Hour Division,
U.S. Department of Labor, and includes
any official of the Wage and Hour Division authorized by the Administrator
to perform any of the functions of the
Administrator under this part and
parts 578 and 579 of this chapter.
Chief Administrative Law Judge means
the Chief Administrative Law Judge,
Office of the Administrative Law
Judges, U.S. Department of Labor,
Washington, DC 20210.
Department means the U.S. Department of Labor.
Person includes any individual, partnership, corporation, association, business trust, legal representative, or organized group of persons.
Secretary means the Secretary of
Labor, U.S. Department of Labor, or a
designated representative of the Secretary.
Solicitor of Labor means the Solicitor,
U.S. Department of Labor, and includes
attorneys of the Office of the Solicitor
authorized by the Solicitor to perform
functions of the Solicitor under this
part.
[56 FR 24991, May 31, 1991, as amended at 82
FR 2230, Jan. 9, 2017]
§ 580.2 Applicability of procedures and
rules.
The procedures and rules contained
in this part prescribe the administrative process for assessment of civil
money penalties for any violation of
the child labor provisions at section 12
of the Act and any regulation thereunder as set forth in part 579, and for
assessment of civil money penalties for
any repeated or willful violation of the
minimum wage provisions of section 6
or the overtime provisions of section 7
of the Act or the regulations thereunder set forth in 29 CFR subtitle B,
chapter V. The substantive requirements for assessment of civil money
penalties are set forth at 29 CFR part
579 (child labor) and part 578 (minimum
wage and overtime).
§ 580.3 Written notice of determination
required.
Whenever the Administrator determines that there has been a violation
by any person of section 12 of the Act
relating to child labor or any regulation issued under that section, or determines that there has been a repeated or willful violation by any person of section 6 or section 7 of the Act,
and determines that imposition of a
civil money penalty for such violation
is appropriate, the Administrator shall
issue and serve a notice of such penalty
on such person in person or by certified
mail. Where service by certified mail is
not accepted by the party, notice shall
be deemed received on the date of attempted delivery. Where service is not
accepted, the Administrator may exercise discretion to serve the notice by
regular mail.
§ 580.4
Contents of notice.
The notice required by § 580.3 of this
part shall:
(a) Set forth the determination of the
Administrator as to the amount of the
penalty and the reason or reasons
therefor;
(b) Set forth the right to take exception to the assessment of penalties and
set forth the right to request a hearing
on such determination;
(c) Inform any affected person or persons that in the absence of a timely exception to a determination of penalty
and a request for a hearing received
within 15 days of the date of receipt of
the notice, the determination of the
Administrator shall become final and
unappealable; and
(d) Set forth the time and method for
taking exception to the determination
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Wage and Hour Division, Labor
§ 580.8
and requesting a hearing, and the procedures relating thereto, as set forth in
§ 580.6 of this part.
§ 580.5
Finality of notice.
If the person charged with violations
does not, within 15 days after receipt of
the notice, take exception to the determination that the violation or violations for which the penalty is imposed
occurred, the administrative determination by the Administrator of the
amount of such penalty shall be
deemed final and not subject to administrative or judicial review. Upon the
determination becoming final in such a
manner, collection and recovery of the
penalty shall be instituted pursuant to
§ 580.18.
[69 FR 75405, Dec. 16, 2004]
§ 580.6 Exception to determination of
penalty and request for hearing.
(a) Any person desiring to take exception to the determination of penalty, or to seek judicial review, shall
request an administrative hearing pursuant to this part. The exception shall
be in writing to the official who issued
the determination at the Wage and
Hour Division address appearing on the
determination notice, and must be received no later than 15 days after the
date of receipt of the notice referred to
in § 580.3. No additional time shall be
added where service of the determination of penalties or of the exception
thereto is made by mail. If such a request for an administrative hearing is
timely filed, the Administrator’s determination shall be inoperative unless
and until the case is dismissed or the
Administrative Law Judge issues a decision affirming the determination.
(b) No particular form is prescribed
for any exception to determination of
penalty and request for hearing permitted by this part. However, any such
request shall:
(1) Be dated;
(2) Be typewritten or legibly written;
(3) Specify the issue(s) stated in the
notice of determination giving rise to
such request;
(4) State the specific reason(s) why
the person requesting the hearing believes such determination is in error;
(5) Be signed by the person making
the request or by an authorized representative of such person; and
(6) Include the address at which such
person or authorized representative desires to receive further communications relating thereto.
[56 FR 24991, May 31, 1991, as amended at 60
FR 17222, Apr. 5, 1995; 69 FR 75405, Dec. 16,
2004]
RULES OF PRACTICE
§ 580.7 General.
(a) Except as specifically provided in
this subpart, and to the extent they do
not conflict with the provisions of this
subpart, the Rules of Practice and Procedure for Administrative Hearings Before the Office of Administrative Law
Judges established by the Secretary at
29 CFR part 18 shall apply to administrative proceedings under this subpart.
(b) Subpart B of the Rules of Practice
and Procedure for Administrative
Hearings Before the Office of Administrative Law Judges (29 CFR part 18,
subpart B) shall apply except as follows: Notwithstanding the provisions
of subpart B, including the hearsay
rule (§ 18.802), testimony of current or
former Department of Labor employees
concerning information obtained in the
course of investigations and conclusions thereon, as well as any documents contained in Department of
Labor files (other than the investigation file concerning the violation(s) as
to which the penalty in litigation has
been assessed), shall be admissible in
proceedings under this subpart. Nothing in this paragraph is intended to
limit the admissibility of any evidence
which is otherwise admissible under 29
CFR part 18, subpart B.
§ 580.8 Service and computation of
time.
(a) Service of documents under this
subpart shall be made by delivery to
the individual, an officer of a corporation, or attorney of record or by mailing the determination to the last
known address of the individual, officer, or attorney. If done by mail, service is complete upon mailing. If done in
person, service is complete upon handing it to the attorney, officer or party;
by leaving it at the office with a clerk
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§ 580.9
29 CFR Ch. V (7–1–19 Edition)
or person in charge, or leaving it at a
conspicuous place in the office if no
one is in charge; or by leaving it at the
attorney’s or party’s residence.
(b) Two (2) copies of all pleadings and
other documents required for any administrative proceeding provided by
this subpart shall be served on the attorneys for the Department of Labor.
One copy shall be served on the Associate Solicitor, Division of Fair Labor
Standards, Office of the Solicitor, U.S.
Department of Labor, 200 Constitution
Avenue NW., Washington, DC 20210, and
one copy on the attorney representing
the Department in the proceeding.
(c) Time will be computed beginning
with the day following the action and
includes the last day of the period unless it is a Saturday, Sunday, or federally-observed holiday, in which case
the time period includes the next business day.
§ 580.9
Commencement of proceeding.
Each administrative proceeding permitted under the Act and these regulations shall be commenced upon receipt
of a timely request for hearing filed in
accordance with § 580.6 of this subpart.
REFERRAL FOR HEARING
§ 580.10 Referral
Law Judge.
to
Administrative
(a) Upon receipt of a timely exception to a determination of penalties
and request for a hearing filed pursuant to and in accordance with § 580.6 of
this subpart, the Administrator, by the
Associate Solicitor for the Division of
Fair Labor Standards or by the Regional Solicitor for the Region in
which the action arose, shall, by Order
of Reference, refer the matter to the
Chief Administrative Law Judge, for a
determination in an administrative
proceeding as provided herein. A copy
of the notice of administrative determination and of the request for hearing
shall be attached to the Order of Reference and shall, respectively, be given
the effect of a complaint and answer
thereto for purposes of the administrative proceeding, subject to any amendment that may be permitted under this
subpart and 29 CFR part 18.
(b) A copy of the Order of Reference
and attachments thereto, together
with a copy of this part, shall be served
by counsel for the Administrator upon
the person requesting the hearing, in
the manner provided in § 580.8 of this
subpart.
§ 580.11 Appointment of Administrative Law Judge and notification of
prehearing conference and hearing
date.
Upon receipt from the Administrator
of an Order of Reference, the Chief Administrative Law Judge shall appoint
an Administrative Law Judge to hear
the case. The Administrative Law
Judge shall notify all interested parties of the time and place of a prehearing conference and of the hearing.
§ 580.12 Decision and Order of Administrative Law Judge.
(a) The Administrative Law Judge
shall render a decision on the issues referred by the Administrator.
(b) The decision of the Administrative Law Judge shall be limited to a determination of whether the respondent
has committed a violation of section
12, or a repeated or willful violation of
section 6 or section 7 of the Act, and
the appropriateness of the penalty assessed by the Administrator. The Administrative Law Judge shall not
render determinations on the legality
of a regulatory provision or the constitutionality of a statutory provision.
(c) The decision of the Administrative Law Judge shall include a statement of findings and conclusions, with
reasons and basis therefor, upon each
material issue presented on the record.
The decision shall also include an appropriate order which may affirm,
deny, reverse, or modify, in whole or in
part, the determination of the Administrator.
(d) The Administrative Law Judge
shall serve copies of the decision on
each of the parties.
(e) The decision of the Administrative Law Judge shall constitute the
final order of the Secretary unless, pursuant to § 580.13 of this part, there is an
appeal to the Secretary.
§ 580.13 Procedures for appeals to the
Administrative Review Board.
(a) Any party desiring review of a decision of the Administrative Law
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Wage and Hour Division, Labor
§ 580.18
Judge, including judicial review, must
file a petition for review with the Department’s
Administrative
Review
Board (Board). To be effective, such petition must be received by the Board
within 30 days of the date of the decision of the Administrative Law Judge.
Copies of the appeal shall be served on
all parties and on the Chief Administrative Law Judge. If such a petition
for review is timely filed, the decision
of the Administrative Law Judge shall
be inoperative unless and until the
Board dismisses the appeal or issues a
decision affirming the decision of the
Administrative Law Judge.
(b) All documents submitted to the
Board shall be filed with the Administrative Review Board, Room S–4309,
U.S. Department of Labor, Washington,
DC 20210. An original and two copies of
all documents must be filed.
(c) Documents are not deemed filed
with the Board until actually received
by the Board, either on or before the
due date. No additional time shall be
added where service of a document requiring action within a prescribed time
was made by mail.
(d) A copy of each document filed
with the Board shall be served upon all
other parties involved in the proceeding. Such service shall be by personal delivery or by mail. Service by
mail is deemed effected at the time of
mailing to the last known address of
the party.
[69 FR 75405, Dec. 16, 2004]
§ 580.14
[Reserved]
§ 580.15 Responsibility of the Office of
Administrative Law Judges for the
administrative record.
Upon receipt of a petition seeking review of the Decision and Order of an
Administrative Law Judge, the Chief
Administrative
Law
Judge
shall
promptly forward a copy of the complete hearing record to the Secretary.
§ 580.16 Final decision of the Administrative Review Board.
The Board’s final decision shall be
served upon all parties and the Chief
Administrative Law Judge, in person
or by mail to the last known address.
[69 FR 75405, Dec. 16, 2004]
§ 580.17 Retention of official record.
The official record of every completed administrative hearing provided
by this part shall be maintained and
filed under the custody and control of
the Chief Administrative Law Judge.
§ 580.18 Collection and recovery of
penalty.
(a) When the determination of the
amount of any civil money penalty
provided for in this part becomes final
under § 580.5 in accordance with the administrative assessment thereof, or
pursuant to the decision and order of
an Administrative Law Judge in an administrative proceeding as provided in
§ 580.12, or the decision of the Board
pursuant to § 580.16, the amount of the
penalty as thus determined is immediately due and payable to the U.S. Department of Labor. The person against
whom such penalty has been assessed
or imposed shall promptly remit the
amount thereof, as finally determined.
The payment shall be by certified
check or by money order, made payable
to the order of the Wage and Hour Division, and shall be delivered or mailed
to the District Office of the Wage and
Hour Division which issued and served
the original notice of the penalty.
(b) Pursuant to section 16(e) of the
Act, the amount of the penalty, finally
determined as provided in § 580.5,
§ 580.12 or § 580.16, may be:
(1) Deducted from any sums owing by
the United States to the person
charged. To effect this, any agency
having sums owing from the United
States to such person shall, on the request of the Secretary, withhold the
specific amount of the penalty from
the sums owed to the person so charged
and remit the amount to the Secretary
to satisfy the amount of the penalty
assessed;
(2) Recovered in a civil action
brought by the Secretary in any court
of competent jurisdiction, in which
litigation the Secretary shall be represented by the Solicitor of Labor.
When the person against whom a final
determination assessing a civil money
penalty has been made does not voluntarily remit the amount of such penalty to the Secretary within a reasonable time after notification to do so,
the Solicitor of Labor may institute
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29 CFR Ch. V (7–1–19 Edition)
such an action to recover the amount
of the penalty; or
(3) Ordered by the court, in an action
brought for a violation of section
15(a)(4) or a repeated or willful violation of section 15(a)(2), to be paid to
the Secretary. Any such unlawful act
or practice may be enjoined by the
United States district courts under section 17 upon court action, filed by the
Secretary; and failure of the person so
enjoined to comply with the court
order may subject such person to contempt proceedings. A willful violation
of section 6, 7, or 12 of the Act may subject the offender to the penalties provided in section 16(a) of the Act, enforced by the Department of Justice in
criminal proceedings in the United
States courts. In any of the foregoing
civil or criminal proceedings, the court
may order the payment to the Secretary of the civil penalty finally assessed by the Secretary.
[56 FR 24991, May 31, 1991, as amended at 69
FR 75406, Dec. 16, 2004]
PART 697—INDUSTRIES IN
AMERICAN SAMOA
Sec.
697.1 Wage rates and industry definitions.
697.2 Industry wage rates and effective
dates.
697.3 Notices.
697.4 Effective dates.
AUTHORITY: 29 U.S.C. 205, 206, 208.
§ 697.1 Industry definitions.
(a) Government employees. This industry includes all activities of employees
of the Government of American Samoa.
This industry does not include any employees of the United States or its
agencies.
(b) Fish canning and processing. This
industry shall include the canning,
freezing, preserving, and other processing of any kind of fish, shellfish, and
other aquatic forms of animal life, the
manufacture of any by-product thereof,
and the manufacture of cans and related activities.
(c) Petroleum marketing. This industry
shall include the wholesale marketing
and distribution of gasoline, kerosene,
lubricating oils, diesel and marine
fuels, and other petroleum products,
bunkering operations in connection
therewith, and repair and maintenance
of petroleum storage facilities.
(d) Shipping and transportation. This
industry shall include the transportation of passengers and cargo by
water or by air, and all activities in
connection therewith, including storage and lighterage operations: Provided, however, that this industry shall
not include the operation of tourist bureaus and of travel and ticket agencies.
Provided, further, that this industry
shall not include bunkering of petroleum products or activities engaged in
by seamen on American vessels which
are documented or numbered under the
laws of the United States, which operate exclusively between points in the
Samoan Islands, and which are not in
excess of 350 tons net capacity. Within
this industry there shall be three classifications:
(1) Classification A: Stevedoring, lighterage and maritime shipping agency activities. This classification shall include
all employees of employers who engage
in each of the following three services:
stevedoring, lighterage and maritime
shipping agency activities.
(2) Classification B: Unloading of fish.
This classification shall include the
unloading of raw and/or frozen fish
from vessels.
(3) Classification C: All other activities.
This classification shall include all
other activities in the shipping and
transportation industry.
(e) Construction. This industry shall
include all construction, reconstruction, structural renovation and demolition, on public or private account, of
buildings, housing, highways and
streets, catchments, dams, and any
other structure.
(f)
Retailing,
wholesaling
and
warehousing. This industry includes all
activities in connection with the selling of goods or services at retail, including the operation of retail stores
and other retail establishments, the
wholesaling and warehousing and other
distribution of commodities including
but without limitation the wholesaling, warehousing and other distribution activities of jobbers, importers
and exporters, manufacturers’ sales
branches and sales offices engaged in
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Wage and Hour Division, Labor
§ 697.1
the distribution of products manufactured outside of American Samoa, industrial distributors, mail order establishments, brokers and agents, and
public warehouses: Provided, however,
that this industry shall not include retailing and wholesaling activities included within other industry wage orders which are applicable in American
Samoa.
(g) Bottling, brewing and dairy products. The bottling, brewing and dairy
products industry includes the bottling, sale and distribution of malt beverages and soft drinks in bottles and
other containers and the processing or
recombining of fluid milk and cream
for wholesale and retail distribution
and the manufacture of malt beverages, butter, natural and processed
cheese, condensed and evaporated
milk, malted milk, ice cream and frozen desserts; including also any
warehousing operation incidental to
the above activities of firms engaged in
these activities.
(h) Printing. The printing industry is
that industry which is engaged in
printing, job printing, and duplicating.
This industry shall not include printing performed by an employer who publishes a newspaper, magazine, or similar publications.
(i) Publishing. This industry is that
industry which is engaged in the publishing of newspapers, magazines, or
similar publications other than the
publishing of a weekly, semiweekly or
daily newspaper with a circulation of
less than 4,000, the major part of which
circulation is within the county or
counties contiguous thereto.
(j) Finance and insurance. The finance
and insurance industry includes all
banks (whether privately or government owned in whole or in part) and
trust companies, credit agencies other
than banks, holding companies, other
investment companies, collection agencies, brokers and dealers in securities
and commodity contracts, as well as
carriers of all types of insurance, and
insurance agents and brokers.
(k) Ship maintenance. This industry is
defined as all work activity associated
with ship repair and maintenance, including marine, railway, and dry dock
operation.
(l) Hotel. This industry shall include
all activities in connection with the
operation of hotels (whether privately
or government owned in whole or in
part), motels, apartment hotels, and
tourist courts engaged in providing
lodging, with or without meals, for the
general public, including such laundry
and cleaning and other activities as are
engaged in by a hotel or motel or other
lodging facility on its own linens or on
garments of its guests.
(m) Tour and travel services. This industry shall include the operation of
tourist bureaus and of travel and passenger ticket services and agencies:
Provided, however, that this industry
shall not include the operation of a
freight-shipping agency.
(n) Private hospitals and educational
institutions. This industry shall include
all activities performed in connection
with the operation of private hospitals,
nursing homes, and related institutions
primarily engaged in the care of the
sick, the aged or the mentally or physically disabled or for gifted children,
preschools, elementary or secondary
schools, or institutions of higher education: Provided, however, that this industry shall not include employees of
the Government of American Samoa or
employees of any agency or corporation of the Government of American
Samoa.
(o) Garment manufacturing. This industry is defined as the manufacture
from any material of articles of apparel and clothing made by knitting,
spinning, crocheting, cutting, sewing,
embroidering, dyeing, or any other
processes and includes but is not limited to all the following clothing:
men’s, women’s, and children’s suits,
clothing and other products; hosiery;
gloves and mittens; sweaters and other
outerwear; swimwear; leather, leather
goods, and related products; handkerchief, scarf, and art linen products;
shirts; blouses; and underwear; uniforms and work clothing; and includes
assembling, tagging, ironing, and packing apparel for shipping. This industry
does not include manufacturing, processing or mending of apparel in retail
or service establishments, including
clothing stores, laundries, and other
stores.
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§ 697.2
29 CFR Ch. V (7–1–19 Edition)
(p) Miscellaneous activities. This industry shall include every activity not included in any other industry defined
herein.
[66 FR 44968, Aug. 27, 2001]
§ 697.2 Industry wage rates and effective dates.
Every employer shall pay to each employee in American Samoa, who in any
workweek is engaged in commerce or
in the production of goods for commerce, or is employed in any enterprise
engaged in commerce or in the production of goods for commerce, as these
terms are defined in section 3 of the
Fair Labor Standards Act of 1938,
wages at a rate not less than the minimum rate prescribed in this section
for the industries and classifications in
which such employee is engaged.
Minimum wage
Industry
Effective
October 3, 2005
(a) Government Employees ............................................................
(b) Fish Canning and Processing ...................................................
(c) Petroleum Marketing ..................................................................
(d) Shipping and Transportation:
(1) Classification A ............................................................
(2) Classification B ............................................................
(3) Classification C ............................................................
(e) Construction ...............................................................................
(f) Retailing, Wholesaling, and Warehousing ..................................
(g) Bottling, Brewing, and Dairy Products .......................................
(h) Printing .......................................................................................
(i) Publishing ....................................................................................
(j) Finance and Insurance ...............................................................
(k) Ship Maintenance ......................................................................
(l) Hotel ............................................................................................
(m) Tour and Travel Services .........................................................
(n) Private Hospitals and Educational Institutions ..........................
(o) Garment Manufacturing .............................................................
(p) Miscellaneous Activities .............................................................
[70 FR 57723, Oct. 3, 2005]
§ 697.3 Notices.
Every employer subject to the provisions of § 697.2 shall post in a conspicuous place in each department of
his establishment where employees
subject to the provisions of § 697.2 are
working such notices of this part as
shall be prescribed from time to time
by the Administrator of the Wage and
Hour Division of the U.S. Department
Effective
October 18, 2005
Effective
October 1, 2006
$2.77
3.26
3.85
$2.84
3.26
3.85
$2.91
3.26
3.85
4.09
3.92
3.88
3.60
3.10
3.19
3.50
3.63
3.99
3.34
2.86
3.31
3.33
2.68
2.57
4.09
3.92
3.88
3.60
3.10
3.19
3.50
3.63
3.99
3.42
2.93
3.39
3.33
2.68
2.63
4.09
3.92
3.88
3.60
3.10
3.19
3.50
3.63
3.99
3.51
3.00
3.48
3.33
2.68
2.70
of Labor, and shall give such other notice as the Administrator may prescribe.
[41 FR 24121, June 15, 1976. Redesignated and
amended at 66 FR 44969, Aug. 27, 2001]
§ 697.4
Effective dates.
The wage rates specified in § 697.2
shall be effective on October 18, 2005,
except as otherwise specified.
[70 FR 57724, Oct. 3, 2005]
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SUBCHAPTER B—STATEMENTS OF GENERAL POLICY OR
INTERPRETATION NOT DIRECTLY RELATED TO REGULATIONS
PART 775—GENERAL
Sec.
775.0 General enforcement policy.
775.1 Advisory interpretations announced
by the Administrator.
AUTHORITY: 52 Stat. 1060, 29 U.S.C. 201 et
seq., 61 Stat. 84, 29 U.S.C. 251 et seq., 49 Stat.
2036, 41 U.S.C. 35 et seq.
§ 775.0
General enforcement policy.
(a) In order to clarify at this time the
practices and policies which will guide
the administration and enforcement of
the Fair Labor Standards Act of 1938,
as amended (52 Stat. 1060, 29 U.S.C. 201–
219), and the Walsh-Healey Act as
amended (49 Stat. 2036, 41 U.S.C. 35–45),
as affected by the Portal-to-Portal Act
of 1947 (61 Stat. 84; 29 U.S.C. Sup. 251 et
seq.), the following policy is announced
effective June 30, 1947.
(b) The investigation, inspection and
enforcement activities of all officers
and agencies of the Department of
Labor as they relate to the Fair Labor
Standards Act and the Walsh-Healey
Act will be carried out on the basis
that all employers in all industries
whose activities are subject to the provisions of the Fair Labor Standards
Act or the Walsh-Healey Act are responsible for strict compliance with
the provisions thereof and the regulations issued pursuant thereto.
(c) Any statements, orders, or instructions inconsistent herewith are
rescinded.
PART 776—INTERPRETATIVE BULLETIN ON THE GENERAL COVERAGE OF THE WAGE AND
HOURS PROVISIONS OF THE FAIR
LABOR STANDARDS ACT OF
1938
Subpart A—General
Sec.
776.0 Subpart limited
ployee coverage.
[11 FR 14099, Dec. 5, 1946]
Introductory statement.
HOW COVERAGE IS DETERMINED
ENGAGING ‘‘IN COMMERCE’’
776.8 The statutory provisions.
776.9 General scope of ‘‘in commerce’’ coverage.
776.10 Employees participating in the actual
movement of commerce.
776.11 Employees doing work related to instrumentalities of commerce.
776.12 Employees traveling across State
lines.
776.13 Commerce
crossing
international
boundaries.
ENGAGING IN ‘‘THE PRODUCTION OF GOODS
FOR COMMERCE’’
776.14 Elements of ‘‘production’’ coverage.
776.15 ‘‘Production.’’
776.16 Employment in ‘‘producing, . . . or
in any other manner working on’’ goods.
776.17 Employment in a ‘‘closely related
process or occupation directly essential
to’’ production of goods.
776.18 Employees of producers for commerce.
776.19 Employees of independent employers
meeting needs of producers for commerce.
776.20 ‘‘Goods.’’
776.21 ‘‘For’’ commerce.
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776.1 General interpretative guides.
776.2 Employee basis of coverage.
776.3 Persons engaging in both covered and
noncovered activities.
776.4 Workweek standard.
776.5 Coverage not dependent on method of
compensation.
776.6 Coverage not dependent on place of
work.
776.7 Geographical scope of coverage.
an-
Advisory interpretations announced
by the Administrator serve only to indicate the construction of the law
which will guide the Administrator in
the performance of his administrative
duties unless he is directed otherwise
by the authoritative ruling of the
courts, or unless he shall subsequently
decide that his prior interpretation is
incorrect.
individual
INDIVIDUAL EMPLOYEE COVERAGE
776.0a
[12 FR 3915, June 17, 1947]
§ 775.1 Advisory interpretations
nounced by the Administrator.
to
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§ 776.0
29 CFR Ch. V (7–1–19 Edition)
Subpart B—Construction Industry
776.22 Subpart limited to individual employee coverage.
ENTERPRISE COVERAGE
776.22a Extension of coverage to employment in certain enterprises.
INDIVIDUAL EMPLOYEE COVERAGE IN THE
CONSTRUCTION INDUSTRY
answered in published statements of
the Department of Labor may be addressed to the Administrator of the
Wage and Hour Division, Department
of Labor, Washington, DC 20210 or assistance may be requested from any of
the Regional or District Offices of the
Division.
[35 FR 5543, Apr. 3, 1970]
776.22b Guiding principles.
776.23 Employment in the construction industry.
776.24 Travel in connection with construction projects.
776.25 Regular and recurring activities as
basis of coverage.
776.26 Relationship of the construction
work to the covered facility.
776.27 Construction which is related to covered production.
776.28 Covered preparatory activities.
776.29 Instrumentalities and channels of
interstate commerce.
776.30 Construction performed on temporarily idle facilities.
AUTHORITY: 52 Stat. 1060, as amended; 29
U.S.C. 201–219.
Subpart A—General
SOURCE: 15 FR 2925, May 17, 1950, unless
otherwise noted.
§ 776.0 Subpart limited to individual
employee coverage.
This subpart, which was adopted before the amendments of 1961 and 1966 to
the Fair Labor Standards Act, is limited to discussion of general coverage
of the Act on the traditional basis of
engagement by individual employees
‘‘in commerce or in the production of
goods for commerce’’. The 1961 and 1966
amendments broadened coverage by extending it to other employees on an
‘‘enterprise’’ basis, when ‘‘employed in
an enterprise engaged in commerce or
in the production of goods for commerce’’ as defined in section 3 (r), (s),
of the present Act. Employees covered
under the principles discussed in this
subpart remain covered under the Act
as amended; however, an employee who
would not be individually covered
under the principles discussed in this
subpart may now be subject to the Act
if he is employed in a covered enterprise as defined in the amendments.
Questions of ‘‘enterprise coverage’’ not
INDIVIDUAL EMPLOYEE COVERAGE
§ 776.0a
Introductory statement.
(a) Scope and significance of this part.
(1) The Fair Labor Standards Act of
1938 1 (hereinafter referred to as the
Act), brings within the general coverage of its wage and hours provisions
every employee who is ‘‘engaged in
commerce or in the production of goods
for commerce.’’ 2 What employees are
so engaged must be ascertained in the
light of the definitions of ‘‘commerce’’,
‘‘goods’’, and ‘‘produced’’ which are set
forth in the Act as amended by the
Fair Labor Standards Amendments of
1 Pub. L. 718, 75th Cong., 3d sess. (52 Stat.
1060), as amended by the Act of June 26, 1940
(Pub. Res. No. 88, 76th Cong., 3d sess., 54
Stat. 616); by Reorganization Plan No. 2 (60
Stat. 1095), effective July 16, 1946; by the Portal-to-Portal Act of 1947, approved May 14,
1947 (61 Stat. 84); and by the Fair Labor
Standards Amendments of 1949, approved October 26, 1949 (Pub. L. 393, 81st Cong., 1st
sess., 63 Stat. 910); by Reorganization Plan
No. 6 of 1950 (15 FR 3174), effective May 24,
1950; and by the Fair Labor Standards
Amendments of 1955, approved August 12,
1955 (Pub. L. 381, 84th Cong., 1st sess., C. 867,
69 Stat. 711).
2 The requirement of section 6 as to minimum wages is: ‘‘Every employer shall pay
to each of his employees who is engaged in
commerce or in the production of goods for
commerce wages at the following rates—’’
(not less than $1.00 an hour, except in Puerto
Rico and the Virgin Islands to which special
provisions apply).
The requirement of section 7 as to maximum hours which an employee may work
without receiving extra pay for overtime is:
‘‘no employer shall employ any of his employees who is engaged in commerce or in
the production of goods for commerce for a
workweek longer than forty hours, unless
such employee receives compensation for his
employment in excess of the hours above
specified at a rate not less than one and onehalf times the regular rate at which he is
employed.’’
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Wage and Hour Division, Labor
§ 776.0a
1949, 3 giving due regard to authoritative interpretations by the courts
and to the legislative history of the
Act, as amended. Interpretations of the
Administrator of the Wage and Hour
Division with respect to this general
coverage are set forth in this part to
provide ‘‘a practical guide to employers and employees as to how the office
representing the public interest in its
enforcement will seek to apply it.’’ 4
These interpretations with respect to
the general coverage of the wage and
hours provisions of the Act, indicate
the construction of the law which the
Administrator believes to be correct
and which will guide him in the performance of his administrative duties
under the Act unless and until he is
otherwise directed by authoritative decisions of the courts or concludes, upon
reexamination of an interpretation,
that it is incorrect.
(2) Under the Portal-to-Portal Act of
1947, 5 interpretations of the Administrator
may,
under
certain
circumstances, be controlling in determining the rights and liabilities of employers and employees. The interpretations contained in this bulletin are interpretations on which reliance may be
placed as provided in section 10 of the
Portal-to-Portal Act, so long as they
remain effective and are not modified,
amended, rescinded, or determined by
judicial authority to be incorrect. However, the omission to discuss a particular problem in this part or in interpretations supplementing it should not
be taken to indicate the adoption of
any position by the Administrator with
respect to such problem or to constitute an administrative interpretation or practice or enforcement policy.
(b) Exemptions and child labor provisions not discussed. This part does not
deal with the various specific exemp3 Pub. L. 393, 81st Cong., 1st sess. (63 Stat.
910). These amendments, effective January
25, 1950, leave the existing law unchanged except as to provisions specifically amended
and the addition of certain new provisions.
Section 3(b) of the Act, defining ‘‘commerce’’, and section 3(j), defining ‘‘produced’’, were specifically amended as explained in §§ 776.13 and 776.17(a) herein.
4 Skidmore v. Swift & Co., 323 U.S. 134, 138.
5 Pub. L. 49, 80th Cong., 1st sess. (61 Stat.
84), discussed in part 790 of this chapter.
tions provided in the statute, under
which certain employees engaged in
commerce or in the production of goods
for commerce and thus within the general coverage of the wage and hours
provisions are wholly or partially excluded from the protection of the Act’s
minimum-wage and overtime-pay requirements. Some of these exemptions
are self-executing; others call for definitions or other action by the Administrator. Regulations and interpretations
relating to specific exemptions may be
found in other parts of this chapter.
Coverage and exemptions under the
child labor provisions of the Act are
discussed in a separate interpretative
bulletin (§§ 570.101 to 570.121 of this
chapter) issued by the Secretary of
Labor.
(c) Earlier interpretations superseded.
All general and specific interpretations
issued prior to July 11, 1947, with respect to the general coverage of the
wage and hours provisions of the Act
were rescinded and withdrawn by
§ 776.0(b) of the general statement on
this subject, published in the FEDERAL
REGISTER on that date as part 776 of
this chapter (12 FR 4583). To the extent
that interpretations contained in such
general statement or in releases, opinion letters, and other statements
issued on or after July 11, 1947, are inconsistent with the provisions of the
Fair Labor Standards Amendments of
1949, they do not continue in effect
after January 24, 1950. 6 Effective on the
date of its publication in the FEDERAL
6 Section 16(c) of the Fair Labor Standards
Amendments of 1949 (63 Stat. 910) provides:
‘‘Any order, regulation, or interpretation
of the Administrator of the Wage and Hour
Division or of the Secretary of Labor, and
any agreement entered into by the Administrator or the Secretary, in effect under the
provisions of the Fair Labor Standards Act
of 1938, as amended, on the effective date of
this Act, shall remain in effect as an order,
regulation, interpretation, or agreement of
the Administrator or the Secretary, as the
case may be, pursuant to this Act, except to
the extent that any such order, regulation,
interpretation, or agreement may be inconsistent with the provisions of this Act, or
may from time to time be amended, modified, or rescinded by the Administrator or
the Secretary, as the case may be, in accordance with the provisions of this Act.’’
371
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§ 776.1
29 CFR Ch. V (7–1–19 Edition)
REGISTER, subpart A of this interpretative bulletin replaces and supersedes
the general statement previously published as part 776 of this chapter, which
statement is withdrawn. All other administrative rulings, interpretations,
practices and enforcement policies relating to the general coverage of the
wages and hours provisions of the Act
and not withdrawn prior to such date
are, to the extent that they are inconsistent with or in conflict with the
principles stated in this interpretative
bulletin, hereby rescinded and withdrawn.
[15 FR 2925, May 17, 1950, as amended at 21
FR 1448, Mar. 6, 1956. Redesignated at 35 FR
5543, Apr. 3, 1970]
HOW COVERAGE IS DETERMINED
§ 776.1
General interpretative guides.
The congressional policy under which
employees ‘‘engaged in commerce or in
the production of goods for commerce’’
are brought within the general coverage of the Act’s wage and hours provisions is stated in section 2 of the Act.
This section makes it clear that the
congressional power to regulate interstate and foreign commerce is exercised in this Act in order to remedy
certain evils, namely, ‘‘labor conditions detrimental to the maintenance
of the minimum standards of living
necessary for health, efficiency, and
the general well being of workers’’
which Congress found ‘‘(a) causes commerce and the channels and instrumentalities of commerce to be used to perpetuate such labor conditions among
the workers of the several States; (b)
burdens commerce and the free flow of
goods in commerce; (c) constitutes an
unfair method of competition in commerce; (d) leads to labor disputes burdening and obstructing commerce and
the free flow of goods in commerce and
(e) interferes with the orderly and fair
marketing of goods in commerce.’’ In
carrying out these broad remedial purposes, however, the Congress did not
choose to make the scope of the Act coextensive in all respects with the limits of its power over commerce or to
apply it to all activities affecting com-
merce. 7 Congress delimited the area in
which the Act operates by providing
for certain exceptions and exemptions,
and by making wage-hour coverage applicable only to employees who are
‘‘engaged in’’ either ‘‘commerce’’, as
defined in the Act, or ‘‘production’’ of
‘‘goods’’ for such commerce, within the
meaning of the Act’s definitions of
these terms. The Fair Labor Standards
Amendments of 1949 indicate an intention to restrict somewhat the category
of employees within the reach of the
Act under the former definition of
‘‘produced’’ and to expand to some extent the group covered under the
former definition of ‘‘commerce.’’ In
his interpretations, the Administrator
will endeavor to give effect to both the
broad remedial purposes of the Act and
the limitations on its application,
seeking guidance in his task from the
terms of the statute, from authoritative court decisions, and from the
legislative history of the Act, as
amended. 8
§ 776.2 Employee basis of coverage.
(a) The coverage of the Act’s wage
and hours provisions as described in
sections 6 and 7 does not deal in a blanket way with industries as a whole.
Thus, in section 6, it is provided that
every employer shall pay the statutory
7 Kirschbaum v. Walling, 316 U.S. 517; Walling
v. Jacksonville Paper Co., 317 U.S. 564; 10 East
40th St. Bldg. Co. v. Callus, 325 U.S. 578; A. H.
Phillips, Inc. v. Walling, 324 U.S. 490; Fleming
v. Hawkeye Pearl Button Co., 113 F. 2d 52 (C.A.
8); Armstrong v. Walling, 161 F. 2d 515 (C.A. 1);
Bowie v. Gonzalez, 117 F. 2d 11 (C.A. 1).
8 Footnote references to some of the relevant court decisions are made for the assistance of readers who may be interested in
such decisions.
Footnote reference to the legislative history of the 1949 amendments are made at
points in this part where it is believed they
may be helpful. References to the Statement
of the Managers on the part of the House, appended to the Conference Report on the
amendments (H. Rept. No. 1453, 81st Cong.,
1st sess.) are abbreviated: H. Mgrs. St. 1949,
p. ll. References to the Statement of a majority of the Senate Conferees, 95 Cong. Rec.,
October 19, 1949 at 15372–15377 are abbreviated: Sen. St., 1949 Cong. Rec. References
to the Congressional Record are to the 1949
daily issues, the permanent volumes being
unavailable at the time this part was prepared.
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Wage and Hour Division, Labor
§ 776.4
minimum wage to ‘‘each of his employees who is engaged in commerce or in
the production of goods for commerce.’’
It thus becomes primarily an individual matter as to the nature of the
employment of the particular employee. Some employers in a given industry may have no employees covered
by the Act; other employers in the industry may have some employees covered by the Act, and not others; still
other employers in the industry may
have all their employees within the
Act’s coverage. If, after considering all
relevant factors, employees are found
to be engaged in covered work, their
employer cannot avoid his obligations
to them under the Act on the ground
that he is not ‘‘engaged in commerce or
in the production of goods for commerce.’’ To the extent that his employees are so engaged, he is himself so engaged. 9
(b) In determining whether an individual employee is within the coverage
of the wage and hours provisions, however, the relationship of an employer’s
business to commerce or to the production of goods for commerce may sometimes be an important indication of the
character of the employee’s work. 10 It
is apparent, too, from the 1949 amendment to the definition of ‘‘produced’’
and its legislative history that an examination of the character of the employer’s business will in some borderline situations be necessary in determining whether the employees’ occupation bears the requisite close relationship to production for commerce. 11
§ 776.3 Persons engaging in both covered and noncovered activities.
The Act applies to employees ‘‘engaged in commerce or in the production of goods for commerce’’ without
9 Kirschbaum v. Walling, 316 U.S. 517. See
also Walling v. Jacksonville Paper Co., 317 U.S.
564; McLeod v. Threlkeld, 319 U.S. 491; Mabee
v. White Plains Pub. Co., 327 U.S. 178.
10 Borden Co. v. Borella, 325 U.S. 679; 10 E.
40th St. Bldg. Co. v. Callus, 325 U.S. 578; Armour & Co. v. Wantock, 323 U.S. 126; Donovan
v. Shell Oil Co., 168 F. 2d 229 (C.A. 4); Hertz
Driveurself Stations v. United States, 150 F. 2d
923 (C.A. 8); Horton v. Wilson & Co., 223 N.C.
71, 25 S.E. 2d 437.
11 H. Mgrs. St., 1949, pp. 14, 15; Sen. St. 1949
Cong. Rec. 15372.
regard to whether such employees, or
their employer, are also engaged in
other activities which would not bring
them within the coverage of the Act.
The Act makes no distinction as to the
percentage, volume, or amount of activities of either employee or employer
which constitute engaging in commerce or in the production of goods for
commerce. Sections 6 and 7 refer to
‘‘each’’ and ‘‘any’’ employee so engaged, and section 15(a)(1) prohibits the
introduction into the channels of interstate or foreign commerce of ‘‘any’’
goods in the production of which ‘‘any’’
employee was employed in violation of
section 6 or section 7. Although employees doing work in connection with
mere isolated, sporadic, or occasional
shipments in commerce of insubstantial amounts of goods will not be considered covered by virtue of that fact
alone, the law is settled that every employee whose engagement in activities
in commerce or in the production of
goods for commerce, even though small
in amount, is regular and recurring, is
covered by the Act. 12 This does not,
however, necessarily mean that an employee who at some particular time
may engage in work which brings him
within the coverage of the Act is, by
reason of that fact, thereafter indefinitely entitled to its benefits.
§ 776.4 Workweek standard.
(a) The workweek is to be taken as
the standard in determining the applicability of the Act. 13 Thus, if in any
workweek an employee is engaged in
both covered and noncovered work he
is entitled to both the wage and hours
12 United States v. Darby, 312 U.S. 100; Mabee
v. White Plains Pub. Co., 327 U.S. 178; Schmidt
v. Peoples Telephone Union of Maryville, Missouri, 138 F. 2d 13 (C.A. 8); New Mexico Public
Service Co. v. Engel, 145 F. 2d 636 (C.A. 10); Sun
Pub. Co. v. Walling, 140 F. 2d 445 (C.A. 6), certiorari denied 322 U.S. 728; Davis v. Goodman
Lumber Co., 133 F. 2d 52 (C.A. 4).
13 See Gordon’s Transports v. Walling, 162 F.
2d 203 (C.A. 6), certiorari denied 332 U.S. 774;
Walling v. Fox-Pelletier Detective Agency, 4
W.H. Cases 452 (W.D. Tenn.), 8 Labor Cases
62,219; Walling v. Black Diamond Coal Mining
Co., 59 F. Supp. 348 (W.D. Ky.); Fleming v.
Knox, 42 F. Supp. 948 (S.D. Ga.); Roberg v.
Henry Phipps Estate, 156 F. 2d 958 (C.A. 2). For
a definition of the workweek, see § 778.2(c) of
this chapter.
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§ 776.5
29 CFR Ch. V (7–1–19 Edition)
benefits of the Act for all the time
worked in that week, unless exempted
therefrom by some specific provision of
the Act. The proportion of his time
spent by the employee in each type of
work is not material. If he spends any
part of the workweek in covered work
he will be considered on exactly the
same basis as if he had engaged exclusively in such work for the entire period. Accordingly, the total number of
hours which he works during the workweek at both types of work must be
compensated for in accordance with
the minimum wage and overtime pay
provisions of the Act.
(b) It is thus recognized that an employee may be subject to the Act in one
workweek and not in the next. It is
likewise true that some employees of
an employer may be subject to the Act
and others not. But the burden of effecting segregation between covered
and noncovered work as between particular workweeks for a given employee or as between different groups
of employees is upon the employer.
Where covered work is being regularly
or recurrently performed by his employees, and the employer seeks to segregate such work and thereby relieve
himself of his obligations under sections 6 and 7 with respect to particular
employees in particular workweeks, he
should be prepared to show, and to
demonstrate from his records, that
such employees in those workweeks did
not engage in any activities in interstate or foreign commerce or in the
production of goods for such commerce,
which would necessarily include a
showing that such employees did not
handle or work on goods or materials
shipped in commerce or used in production of goods for commerce, or engage
in any other work closely related and
directly essential to production of
goods for commerce. 14 The Division’s
experience has indicated that much socalled ‘‘segregation’’ does not satisfy
these tests and that many so-called
‘‘segregated’’ employees are in fact engaged in commerce or in the production of goods for commerce.
14 See
Guess v. Montague, 140 F. 2d 500 (C.A.
4).
§ 776.5 Coverage not dependent
method of compensation.
The Act’s individual employee coverage is not limited to employees
working on an hourly wage. The requirements of section 6 as to minimum
wages are that ‘‘each’’ employee described therein shall be paid wages at a
rate not less than a specified rate ‘‘an
hour’’. 15 This does not mean that employees cannot be paid on a piecework
basis or on a salary, commission, or
other basis; it merely means that
whatever the basis on which the workers are paid, whether it be monthly,
weekly, or on a piecework basis, they
must receive at least the equivalent of
the minimum hourly rate. ‘‘Each’’ and
‘‘any’’ employee obviously and necessarily includes one compensated by a
unit of time, by the piece, or by any
other measurement. 16 Regulations prescribed by the Administrator (part 516
of this chapter) provide for the keeping
of records in such form as to enable
compensation on a piecework or other
basis to be translated into an hourly
rate. 17
[35 FR 5543, Apr. 3, 1970]
§ 776.6 Coverage not
place of work.
dependent
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Except for the general geographical
limitations discussed in § 776.7, the Act
contains no prescription as to the place
where the employee must work in
order to come within its coverage. It
follows that employees otherwise coming within the terms of the Act are entitled to its benefits whether they perform their work at home, in the factory, or elsewhere. 18 The specific provisions of the Act relative to regulation
of homework serve to emphasize this
fact. 19
15 Special exceptions are made for Puerto
Rico, the Virgin Islands, and American
Samoa.
16 United States v. Rosenwasser, 323 U.S. 360.
17 For methods of translating other forms
of compensation into an hourly rate for purposes of sections 6 and 7, see parts 531 and 778
of this chapter.
18 Walling v. American Needlecrafts, 139 F. 2d
60 (C.A. 6); Walling v. Twyeffort Inc., 158 F. 2d
944 (C.A. 2); McComb v. Homeworkers’ Handicraft Cooperative, 176 F. 2d 633 (C.A. 4).
19 See 6(a)(2); Sec. 11(d).
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Wage and Hour Division, Labor
§ 776.8
§ 776.7 Geographical scope of coverage.
(a) The geographical areas within
which the employees are to be deemed
‘‘engaged in commerce or in the production of goods for commerce’’ within
the meaning of the Act, and thus within its coverage are governed by definitions in section 3 (b), (c), and (j). In the
definition of ‘‘produced’’ in section 3(j),
‘‘production’’ is expressly confined to
described employments ‘‘in any State.’’
(See § 776.15 (a).) ‘‘Commerce’’ is defined to mean described activities
‘‘among the several States or between
any State and any place outside thereof.’’ (See § 776.8.) ‘‘State’’ is defined in
section 3(c) to mean ‘‘any State of the
United States or the District of Columbia or any Territory or possession of
the United States.’’
(b) Under the definitions in paragraph (a) of this section, employees
within the District of Columbia; Puerto Rico; the Virgin Islands; Outer Continental Shelf lands defined in the
Outer Continental Shelf Lands Act (ch.
345, 67 Stat. 462, 43 U.S.C. 1331); American Samoa; Guam; Wake Island;
Enewetok Atoll; Kwajalein Atoll;
Johnston Island; and the Canal Zone
are dealt with on the same basis as employees working in any of the 50
States. 20 Congress did not exercise the
20 An amendment to the Fair Labor Standards Act of 1938, 71 Stat. 514 (approved Aug.
30, 1957) provides that no employer shall be
subject to any liability or punishment under
the Act with respect to work performed at
any time in work places excluded from the
Act’s coverage by this law or for work performed prior to Nov. 29, 1957, on Guam, Wake
Island, or the Canal Zone; or for work performed prior to the establishment, by the
Secretary, of a minimum wage rate applicable to such work in American Samoa. Work
performed by employees in ‘‘a work place
within a foreign country or within territory
under the jurisdiction of the United States’’
other than those enumerated in this paragraph is exempt by this amendment from
coverage under the Act. When part of the
work performed by an employee for an employer in any workweek is covered work performed in any State, it makes no difference
where the remainder of such work is performed; the employee is entitled to the benefits of the Act for the entire workweek unless he comes within some specific exemption. The reference in 71 Stat. 514 to liability
for work performed in American Samoa is an
national legislative power over the District of Columbia or the Territories or
possessions referred to by extending
the Act to purely local commerce within them.
[15 FR 2925, May 17, 1950, as amended at 35
FR 5543, Apr. 3, 1970]
ENGAGING ‘‘IN COMMERCE’’
§ 776.8 The statutory provisions.
(a) The activities constituting ‘‘commerce’’ within the meaning of the
phrase ‘‘engaged in commerce’’ in sections 6 and 7 of the Act are defined in
section 3(b) as follows:
Commerce means trade, commerce, transportation, transmission, or communication
among the several States, or between any
State and any place outside thereof. 21
As has been noted in § 776.7, the word
‘‘State’’ in this definition refers not
only to any of the fifty States but also
to the District of Columbia and to any
Territory or possession of the United
States.
(b) It should be observed that the
term commerce is very broadly defined.
The definition does not limit the term
to transportation, or to the ‘‘commercial’’ transactions involved in ‘‘trade,’’
although these are expressly included.
Neither is the term confined to commerce in ‘‘goods.’’ Obviously, ‘‘transportation’’ or ‘‘commerce’’ between
any State and any place outside its
boundaries includes a movement of
persons as well as a movement of
goods. And ‘‘transmission’’ or ‘‘communication’’ across State lines constitutes ‘‘commerce’’ under the definition, without reference to whether anything so transmitted or communicated
is ‘‘goods.’’ 22
The inclusion of the term ‘‘commerce’’
in the definition of the same term as
used in the Act implies that no special
or limited meaning is intended; rather,
that the scope of the term for purposes
of the Act is at least as broad as it
extension of the relief granted by the American Samoa Labor Standards Amendments of
1956 (29 U.S.C. Supp. IV, secs. 206, 213, and
216).
21 As amended by section 3(a) of the Fair
Labor Standards Amendments of 1949.
22 ‘‘Goods’’ is, however, broadly defined in
the Act. See § 776.20(a).
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§ 776.9
29 CFR Ch. V (7–1–19 Edition)
would be under concepts of ‘‘commerce’’ established without reference
to this definition.
§ 776.9 General scope of ‘‘in commerce’’
coverage.
Under the definitions quoted above,
it is clear that the employees who are
covered by the wage and hours provisions of the Act as employees ‘‘engaged
in commerce’’ are employees doing
work involving or related to the movement of persons or things (whether
tangibles or intangibles, and including
information and intelligence) ‘‘among
the several States or between any
State and any place outside thereof.’’ 23
Although this does not include employees engaged in activities which merely
‘‘affect’’ such interstate or foreign
commerce, the courts have made it
clear that coverage of the Act based on
engaging in commerce extends to every
employee employed ‘‘in the channels
of’’ such commerce or in activities so
closely related to such commerce, as a
practical matter, that they should be
considered a part of it. 24 The courts
have indicated that the words ‘‘in commerce’’ should not be so limited by
construction as to defeat the purpose
of Congress, but should be interpreted
in a manner consistent with their practical meaning and effect in the particular situation. One practical question to be asked is whether, without
the particular service, interstate or
foreign commerce would be impeded,
impaired, or abated; 25 others are
whether the service contributes materially to the consummation of transactions in interstate or foreign com23 ‘‘Any place outside thereof’’ is not limited in meaning to another State or country.
Any movement between a State and a place
‘‘outside thereof’’ is ‘‘commerce’’ for purposes of the Act, such as ship-to-shore communication, or transportation out of a State
by ship of food, fuel, or ice to be consumed at
sea before arrival at another port.
24 Walling v. Jacksonville Paper Co., 317 U.S.
564; Overstreet v. North Shore Corp., 318 U.S.
125; McLeod v. Threlkeld, 319 U.S. 491; Boutell
v. Walling, 327 U.S. 463; Pedersen v. J. F. Fitzgerald Constr. Co., 318 U.S. 740 and 324 U.S.
720.
25 Republic Pictures Corp. v. Kappler, 151 F.
2d 543 (C.A. 8), affirmed 327 U.S. 757; New
Mexico Public Service Co. v. Engel, 145 F. 2d 636
(C.A. 10).
merce 26 or makes it possible for existing instrumentalities of commerce 27 to
accomplish the movement of such commerce effectively and to free it from
burdens or obstructions. 28
§ 776.10 Employees participating in
the actual movement of commerce.
(a) Under the principles stated in
§ 776.9, the wage and hours provisions of
the Act apply typically, but not exclusively, to employees such, as those in
the telephone, 29 telegraph, 30 television, radio, 31 transportation and
shipping 32 industries, since these industries serve as the actual instrumentalities and channels of interstate and
foreign commerce. Similarly, employees of such businesses as banking, insurance, newspaper publishing, 33 and
26 Walling v. Sondock, 132 F. 2d 77 (C.A. 5),
certiorari denied 318 U.S. 772. See also Horton
v. Wilson & Co., 223 N.C. 71, 25 S.E. 2d 437, in
which the court stated that an employee is
engaged ‘‘in commerce’’ if his services—not
too remotely but substantially and directly—aid in such commerce as defined in
the Act.
27 For a list of such instrumentalities, see
§ 776.11.
28 Overstreet v. North Shore Corp., 318 U.S.
125; J. F. Fitzgerald Constr. Co. v. Pedersen, 324
U.S. 720; Ritch v. Puget Sound Bridge & Dredging Co., 156 F. 2d 334 (C.A. 9); Walling v.
McCrady Constr. Co., 156 F. 2d 932 (C.A. 3);
Bennett v. V. P. Loftis, 167 F. 2d 286 (C.A. 4);
Walling v. Patton-Tully Transp. Co., 134 F. 2d
945 (C.A. 6).
29 Schmidt v. Peoples Telephone Union of
Maryville, Mo., 138 F. 2d 13 (C.A. 8); North
Shore Corp. v. Barnett, 143 F. 2d 172 (C.A. 5);
Strand v. Garden Valley Telephone Co., 51 F.
Supp. 898 (D. Minn.).
30 Western Union Telegraph Co. v. Lenroot,
323 U.S. 490; Western Union Telegraph Co. v.
McComb, 165 F. 2d 65 (C.A. 6), certiorari denied 333 U.S. 862; Moss v. Postal Telegraph
Cable Co., 42 F. Supp. 807 (M.D. Ga.).
31 Wilson v. Shuman, 140 F. 2d 644 (C.A. 8);
Wabash Radio Corp. v. Walling, 162 F. 2d 391
(C.A. 6).
32 Overnight Motor Co. v. Missel, 316 U.S. 572;
Hargis v. Wabash R. Co., 163 F. 2d 607 (C.A. 7);
Rockton & Rion R.R. v. Walling 146 F. 2d 111
(C.A. 4), certiorari denied 334 U.S. 880;
Walling v. Keansburg Steamboat Co., 162 F. 2d
405 (C.A. 3); Knudsen v. Lee & Simmons, 163 F.
2d 95 (C.A. 2); Walling v. Southwestern Greyhound Lines, 65 F. Supp. 52 (W.D. Mo.);
Walling v. Atlantic Greyhound Corp., 61 F.
Supp. 992 (E.D. S.C.).
33 Sun Pub. Co. v. Walling, 140 F. 2d 445 (C.A.
6), certiorari denied 322 U.S. 728. See also
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§ 776.11
others which regularly utilize the
channels of interstate and foreign commerce in the course of their operations,
are generally covered by the Act.
(b) Employees whose work is an essential part of the stream of interstate
or foreign commerce, in whatever type
of business they are employed, are
likewise engaged in commerce and
within the Act’s coverage. This would
include, for example, employees of a
warehouse whose activities are connected with the receipt or distribution
of goods across State lines. 34 Also,
since ‘‘commerce’’ as used in the Act
includes not only ‘‘transmission’’ of
communications but ‘‘communication’’
itself, employees whose work involves
the continued use of the interstate
mails, telegraph, telephone or similar
instrumentalities for communication
across State lines are covered by the
Act. 35 This does not mean that any use
by an employee of the mails and other
channels of communication is sufficient to establish coverage. But if the
employee, as a regular and recurrent
part of his duties, uses such instrumentalities in obtaining or communicating
information or in sending or receiving
written reports or messages, or orders
for goods or services, or plans or other
documents across State lines, he comes
within the scope of the Act as an employee directly engaged in the work of
‘‘communication’’ between the State
and places outside the State.
[15 FR 2925, May 17, 1950, as amended at 22
FR 5684, July 18, 1957]
§ 776.11 Employees doing work related
to instrumentalities of commerce.
(a) Another large category of employees covered as ‘‘engaged in commerce’’
is comprised of employees performing
the work involved in the maintenance,
repair, or improvement of existing instrumentalities of commerce. (See the
Oklahoma Press Pub. Co. v. Walling, 327 U.S.
186, and McComb v. Dessau, 9 W.H. Cases 332
(S.D. Calif.) 17 Labor Cases, 65, 643.
34 Phillips Co. v. Walling, 324 U.S. 490; Clyde
v. Broderick, 144 F. 2d 348 (C.A. 10).
35 McComb v. Weller, 9 W.H. Cases 53 (W.D.
Tenn.); Yunker v. Abbye Employment Agency,
32 N.Y.S. 2d 715; (Munic. Ct. N.Y.C.); Phillips
v. Meeker Coop. Light & Power Asso., 63 F.
Supp. 733 (D. Minn.); Anderson Bros. Corp. v.
Flynn, 218 S.W. 2d 653 (C.A. Ky.).
cases cited in footnote 28 to § 776.9. See
also the discussion of coverage of employees engaged in building and construction work, in subpart B of this
part.) Typical illustrations of instrumentalities of commerce include railroads, highways, city streets, pipe
lines, telephone lines, electrical transmission lines, rivers, streams, or other
waterways over which interstate or
foreign commerce more or less regularly moves; airports; railroad, bus,
truck, or steamship terminals; telephone exchanges, radio and television
stations, post offices and express offices; bridges and ferries carrying traffic moving in interstate or foreign
commerce (even though within a single
State); bays, harbors, piers, wharves
and docks used for shipping between a
State and points outside; dams, dikes,
revetments and levees which directly
facilitate the uninterrupted movement
of commerce by enhancing or improving the usefulness of waterways, railways, and highways through control of
water depth, channels or flow in
streams or through control of flood
waters; warehouses or distribution depots devoted to the receipt and shipment of goods in interstate or foreign
commerce; ships, vehicles, and aircraft
regularly used in transportation of persons or goods in commerce; and similar
fixed or movable facilities on which the
flow of interstate and foreign commerce depends.
(b) It is well settled that the work of
employees involved in the maintenance, repair, or improvement of such
existing instrumentalities of commerce
is so closely related to interstate or
foreign commerce as to be in practice
and in legal contemplation a part of it.
Included among the employees who are
thus ‘‘engaged in commerce’’ within
the meaning of the Act are employees
of railroads, telephone companies, and
similar instrumentalities who are engaged in maintenance-of-way work; 36
employees (including office workers,
guards, watchmen, etc.) engaged in
36 Davis v. Rockton & Rion R.R., 65 F. Supp.
67 affirmed in 159 F. 2d 291 (C.A. 4); North
Shore Corp. v. Barnett, 143 F. 2d 172 (C.A. 5);
Palmer v. Howard, 12 Lab. Cas. (CCH) par. 63,
756 (W.D. Tenn.); Williams v. Atlantic Coast
Lines R.R. Co., 1 W.M. Cases 289 (E.D. N.C.
1940), 2 Labor Cases (CCH) par. 18, 564.
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§ 776.11
29 CFR Ch. V (7–1–19 Edition)
work on contracts or projects for the
maintenance, repair, reconstruction or
other improvement of such instrumentalities of commerce as the transportation facilities of interstate railroads,
highways, waterways, or other interstate transportation facilities, or interstate telegraph, telephone, or electrical transmission facilities (see subpart B of this part); and employees engaged in the maintenance or alteration
and repair of ships 37 or trucks 38 used
as instrumentalities of interstate or
foreign commerce. Also, employees
have been held covered as engaged in
commerce where they perform such
work as watching or guarding ships or
vehicles which are regularly used in
commerce 39 or maintaining, watching,
or guarding warehouses, railroad or
equipment yards, etc., where goods
moving in interstate commerce are
temporarily held, 40 or acting as porters, janitors, or in other maintenance
capacities in bus stations, railroad stations, airports, or other transportation
terminals. 41
37 Slover v. Wathen, 140 F. 2d 258 (C.A. 4);
Walling v. Keansburg Steamboat Co., 162 F. 2d
405 (C.A. 3).
38 Boutell v. Walling, 327 U.S. 463; Morris v.
McComb, 332 U.S. 422; Skidmore v. John J.
Casale, Inc., 160 F. 2d 527 (C.A. 2), certiorari
denied 331 U.S. 812; Hertz Drivurself Stations v.
United States, 150 F. 2d 923 (C.A. 8); Walling v.
Sturm & Sons, Inc., 6 W.H. Cases 131 (D.N.J.)
10 Labor Cases (CCH) par. 62, 980.
As to exemptions from the overtime requirements for mechanics employed by
motor carriers, see part 782 of this chapter.
For exemptions applicable to retail or service establishments, see part 779 of this chapter.
39 Slover v. Wathen, 140 F. 2d 258 (C.A. 4);
Agosto v. Rocafort, 5 W.H. Cases 176 (D.P.R.),
9 Labor Cases (CCH) par. 62, 610; Cannon v.
Miller, 155 F. 2d 500 (S. Ct. Wash.).
40 Engebretson v. E. J. Albrecht Co., 150 F. 2d
602 (C.A. 7); Mid-Continent Petroleum Corp. v.
Keen, 157 F. 2d 310 (C.A. 8); Walling v. Mutual
Wholesale Food & Supply Co., 141 F. 2d 331
(C.A. 8); Walling v. Sondock, 132 F. 2d 77 (C.A.
5); certiorari denied 318 U.S. 772; Reliance
Storage & Insp. Co. v. Hubbard, 50 F. Supp.
1012 (W.D. Va.); Walling v. Fox-Pelletier Detective Agency, 4 W.H. Cases 452 (W.D. Tenn.
1944); 8 Labor Cases (CCH) par. 62, 219;
McComb v. Russell Co., 9 W.H. Cases 258 (D.
Miss. 1949), 17 Labor Cases (CCH) par. 65, 519.
41 Mornford v. Andrews, 151 F. 2d 511 (C.A. 5);
Hargis v. Wabash R. Co. 163 F. 2d 607 (C.A. 7);
Walling v. Atlantic Greyhound Corp., 61 F.
(c) On the other hand, work which is
less immediately related to the functioning of instrumentalities of commerce than is the case in the foregoing
examples may be too remote from
interstate or foreign commerce to establish coverage on the ground that
the employee performing it is ‘‘engaged
in commerce.’’ This has been held true,
for example, of a cook preparing meals
for workmen who are repairing tracks
over which interstate trains operate, 42
and of a porter caring for washrooms
and lockers in a garage which is not an
instrumentality of commerce, where
trucks used both in intrastate and
interstate commerce are serviced. 43
(d) There are other situations in
which employees are engaged ‘‘in commerce’’ and therefore within the coverage of the Act because they contribute directly to the movement of
commerce by providing goods or facilities to be used or consumed by instrumentalities of commerce in the direct
furtherance of their activities of transportation,
communication,
transmission, or other movement in interstate or foreign commerce. Thus, for
example, employees are considered engaged ‘‘in commerce’’ where they provide to railroads, radio stations, airports, telephone exchanges, or other
similar instrumentalities of commerce
such things as electric energy, 44 steam,
fuel, or water, which are required for
the movement of the commerce carried
by such instrumentalities. 45 Such work
is ‘‘so related to the actual movement
of commerce as to be considered an essential and indispensable part thereof,
Supp. 992 (E.D. S.C.); Rouch v. Continental Oil
Co., 55 F. Supp. 315 (D. Kans.); see also Williams v. Jacksonville Terminal Co., 315 U.S. 386.
42 McLeod v. Threlkeld, 319 U.S. 491.
43 Skidmore v. John J. Casale, Inc., 160 F. 2d
527, certiorari denied 331 U.S. 812 (use in
interstate commerce of trucks serviced was
from 10 to 25 percent of total use).
44 New Mexico Public Service Co. v. Engel, 145
F. 2d 636 (C.A. 10); Walling v. Connecticut Co.,
154 F. 2d 552 (C.A. 2).
45 Such employees would also be covered as
engaged in the production of goods for commerce. See Lewis v. Florida Power & Light Co.,
154 F. 2d 751 (C.A. 5); Walling v. Connecticut
Co., 154 F. 2d 552 (C.A. 2); also § 776.21(b).
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§ 776.14
and without which it would be impeded
or impaired.’’ 46
the basis of the facts in each individual
case.
§ 776.12 Employees
State lines.
§ 776.13 Commerce
crossing
national boundaries.
traveling
across
Questions are frequently asked as to
whether the fact that an employee
crosses State lines in connection with
his employment brings him within the
Act’s coverage as an employee ‘‘engaged in commerce.’’ Typical of the
employments in which such questions
arise are those of traveling service
men, traveling buyers, traveling construction crews, collectors, and employees of such organizations as circuses, carnivals, road shows, and orchestras. The area of coverage in such
situations cannot be delimited by any
exact formula, since questions of degree are necessarily involved. If the
employee transports material or equipment or other persons across State
lines or within a particular State as a
part of an interstate movement, it is
clear of course, that he is engaging in
commerce. 47 And as a general rule, employees who are regularly engaged in
traveling across State lines in the performance of their duties (as distinguished from merely going to and from
their homes or lodgings in commuting
to a work place) are engaged in commerce and covered by the Act. 48 On the
other hand, it is equally plain that an
employee who, in isolated or sporadic
instances, happens to cross a State line
in the course of his employment, which
is otherwise intrastate in character, is
not, for that sole reason, covered by
the Act. Nor would a man who occasionally moves to another State in
order to pursue an essentially local
trade or occupation there become an
employee ‘‘engaged in commerce’’ by
virtue of that fact alone. Doubtful
questions arising in the area between
the two extremes must be resolved on
46 New Mexico Public Service Co. v. Engel, 145
F. 2d 636, 640 (C.A. 10).
47 The employee may, however, be exempt
from the overtime provisions of the Act
under section 13(b)(1). See part 792 of this
chapter.
48 Reck v. Zarmocay, 264 App. Div. 520, 36
N.Y.S. 2d 394; Colbeck v. Dairyland Creamery
Co., 17 N.W. 2d 262 (S. Ct. S.D.).
Under the Act, as amended, an employee engaged in ‘‘trade commerce,
transportation, transmission, or communication’’ between any State and
any place outside thereof is covered by
the Act regardless of whether the
‘‘place outside’’ is another State or is a
foreign country or is some other place.
Before the amendment to section 3(b)
which became effective January 25,
1950, employees whose work related
solely to the flow of commerce into a
State from places outside it which were
not ‘‘States’’ as defined in the Act were
not employees engaged in ‘‘commerce’’
for purposes of the Act, although employees whose work was concerned
with the flow of commerce out of the
State to such places were so engaged. 49
This placed employees of importers in
a less favorable position under the Act
than the employees of exporters. This
inequality was removed by the amendment to section 3(b). 50 Accordingly,
employees performing work in connection with the importation of goods
from foreign countries are engaged ‘‘in
commerce’’ and covered by the Act, as
amended. The coverage of such employees, as of those performing work in
connection with the exportation of
goods to foreign countries, is determined by the same principles as in the
case of employees whose work is connected with goods procured from or
sent to other States.
ENGAGING IN ‘‘THE PRODUCTION OF
GOODS FOR COMMERCE’’
§ 776.14 Elements of ‘‘production’’ coverage.
Sections 6 and 7 of the Act, as has
been noted, cover not only employees
who are engaged ‘‘in commerce’’ as explained above, but also ‘‘each’’ and
‘‘any’’ employee who is engaged in the
49 The definition of ‘‘commerce’’ previously
referred to commerce ‘‘from any State to
any place outside thereof.’’ The amendment
substituted ‘‘between’’ for ‘‘from’’ and ‘‘and’’
for ‘‘to’’ in this clause.
50 H. Mgrs. St., 1949, pp. 13, 14.
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§ 776.15
29 CFR Ch. V (7–1–19 Edition)
‘‘production’’ of ‘‘goods’’ for ‘‘commerce’’. What employees are so engaged can be determined only by references to the very comprehensive definitions which Congress has supplied to
make clear what is meant by ‘‘production’’, by ‘‘goods,’’ and by ‘‘commerce’’
as those words are used in sections 6
and 7. In the light of these definitions,
there are three interrelated elements
of coverage to be considered in determining whether an employee is engaged in the production of goods for
commerce: (a) There must be ‘‘production’’; (b) such production must be of
‘‘goods’’; (c) such production of goods
must be ‘‘for commerce’’; all within the
meaning of the Act. 51 The three elements of ‘‘production’’ coverage are
discussed in order in the sections following.
§ 776.15 ‘‘Production.’’
(a) The statutory provisions. The activities
constituting
‘‘production’’
within the meaning of the phrase ‘‘engaged in * * * production of goods for
commerce’’ are defined in the Act 52 as
follows:
Produced means produced, manufactured,
mined, handled, or in any other manner
worked on in any State; and for the purposes
of this Act an employee shall be deemed to
have been engaged in the production of goods
if such employee was employed in producing,
manufacturing, mining, handling, transporting, or in any other manner working on
such goods, or in any closely related process
or occupation directly essential to the production thereof, in any State.
The Act bars from interstate commerce
‘‘any’’ goods in the production of which
‘‘any’’ employee was employed in violation of the minimum-wage or overtime-pay provisions, 53 and provides
51 These elements need not be considered if
the employee would be covered in any event
because engaged ‘‘in commerce’’ under the
principles discussed in preceding sections of
this part.
52 Act, section 3(j). This definition is also
applicable in determining coverage of the
child labor provisions of the Act. See part 4
of this title.
53 Act, section 15(a)(1). The only exceptions
are stated in the section itself, which provides that ‘‘it shall be unlawful for any person—(1) to transport, offer for transportation, ship, deliver, or sell in commerce, or
to ship, deliver, or sell with knowledge that
that in determining, for purposes of
this provision, whether an employee
was employed in the production of such
goods:
* * * proof that any employee was employed
in any place of employment where goods
shipped or sold in commerce were produced,
within ninety days prior to the removal of
the goods from such place of employment,
shall be prima facie evidence that such employee was engaged in the production of such
goods. 54
(b) General scope of ‘‘production’’ coverage. The statutory provisions quoted
in paragraph (a) of this section, show
that for purposes of the Act, wherever
goods are being produced for interstate
or foreign commerce, the employees
who are covered as ‘‘engaged in the
production’’ of such goods, include, in
general, all those whose work may fairly be said to be a part of their employer’s production of such goods, 55 and include those whose work is closely related and directly essential thereto, 56
whether employed by the same or a different employee. (See §§ 776.17 to 776.19.)
Typically, but not exclusively, this includes that large group of employees
engaged in mines, oil fields, quarries,
shipment or delivery or sale thereof in commerce is intended, any goods in the production of which any employee was employed in
violation of section 6 or section 7, or in violation of any regulation or order of the Administrator issued under section 14; except
that no provision of this Act shall impose
any liability upon any common carrier for
the transportation in commerce in the regular course of its business of any goods not
produced by such common carrier, and no
provision of this Act shall excuse any common carrier from its obligation to accept
any goods for transportation; and except
that any such transportation, offer, shipment, delivery, or sale of such goods by a
purchaser who acquired them in good faith
in reliance on written assurance from the
producer that the goods were produced in
compliance with the requirements of the
Act, and who acquired such goods for value
without notice of any such violation, shall
not be deemed unlawful;’’
54 Act, sec. 15(b).
55 Borden Co. v. Borella, 325 U.S. 679; Armour
& Co. v. Wantock, 323 U.S. 126. See also paragraph (c) of this section.
56 Kirschbaum v. Walling, 316 U.S. 517; Roland Electrical Co. v. Walling, 326 U.S. 657; H.
Mgrs. St., 1949, p. 14; Sen. St. 1949 Cong. Rec.
p. 15372.
380
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§ 776.16
and manufacturing, processing, or distributing plants where goods are produced for commerce. The employees
covered as engaged in ‘‘production’’ are
not limited, however, to those engaged
in actual physical work on the product
itself or to those in the factories,
mines, warehouses, or other place of
employment where goods intended for
commerce are being produced. If the
requisite relationship to production of
such goods is present, an employee is
covered, regardless of whether his work
brings him into actual contact with
such goods or into the establishments
where they are produced, and even
though his employer may be someone
other than the producer of the goods
for commerce. 57 As explained more
fully in the sections following, the
Act’s ‘‘production’’ coverage embraces
many employees who serve productive
enterprises in capacities which do not
involve working directly on goods produced but which are nevertheless closely related and directly essential to successful operations in producing goods
for interstate or foreign commerce.
And as a general rule, in conformity
with the provisions of the Act quoted
in paragraph (a) of this section, an employee will be considered to be within
the general coverage of the wage and
hours provisions if he is working in a
place of employment where goods sold
or shipped in interstate commerce or
foreign commerce are being produced,
unless the employer maintains the burden of establishing that the employee’s
functions are so definitely segregated
from such production that they should
not be regarded as closely related and
directly essential thereto. 58
§ 776.16 Employment in ‘‘producing, * *
* or in any other manner working
on’’ goods.
(a) Coverage in general. Employees
employed in ‘‘producing, manufacturing, mining, handling, or in any
other manner working on’’ goods (as
defined in the Act, including parts or
ingredients thereof) for interstate or
57 Borden Co. v. Borella, 325 U.S. 679; Roland
Electrical Co. v. Walling. 326 U.S. 657;
Kirschbaum v. Walling, 316 U.S. 517; Walton v.
Southern Package Corp. 320 U.S. 540.
58 Guess v. Montague, 140 F. 2d 500 (C.A. 4).
Cf. Armour & Co. v. Wantock, 323 U.S. 126.
foreign commerce are considered actually engaged in the ‘‘production’’ of
such goods, within the meaning of the
Act. Such employees have been within
the general coverage of the wage and
hours provisions since enactment of
the Act in 1938, and remain so under
the Fair Labor Standards Amendments
of 1949. 59
(b) Activities constituting actual ‘‘production’’ under statutory definition. It
will be noted that the actual productive work described in this portion of
the definition of ‘‘produced’’ includes
not only the work involved in making
the products of mining, manufacturing,
or processing operations, but also includes ‘‘handling, transporting, or in
any other manner working on’’ goods.
This is so, regardless of whether the
goods are to be further processed or are
so-called ‘‘finished goods.’’ The Supreme Court has stated that this language of the definition brings within
the scope of the term ‘‘production,’’ as
used in the Act, ‘‘every step in putting
the subject to commerce in a state to
enter commerce,’’ including ‘‘all steps,
whether manufacture or not, which
lead to readiness for putting goods into
the stream of commerce,’’ and ‘‘every
kind of incidental operation preparatory to putting goods into the
stream of commerce.’’ 60
However, where employees of a common carrier, by handling or working on
goods, accomplish the interstate transit or movement in commerce itself,
such handling or working on the goods
is not ‘‘production.’’ The employees in
59 H. Mgrs. St., 1949, p. 14; Sen. St., 1949
Cong. Rec., p. 15372.
60 Western Union Tel. Co. v. Lenroot, 323 U.S.
490. See, to the same effect, Walling v. Friend,
156 F. 2d 429 (C.A. 8); Walling v. Commet Carriers, 151 F. 2d 107 (C.A. 2); Phillips v. Star
Overall Dry Cleaning Laundry Co., 149 F. 2d
416 (C.A. 2); certiorari denied 327 U.S. 780;
Walling v. Griffin Cartage Co., 62 F. Supp. 396,
affirmed in 153 F. 2d 587 (C.A. 6). For examples, see paragraphs (c) and (d) of this section. Employees who are not engaged in the
actual production Activities described in
section 3(j) of the Act are not engaged in
‘‘production’’ unless their work is ‘‘closely
related’’ and ‘‘directly essential’’ to such
production. See §§ 776.17–776.19.
381
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that event are covered only under the
phrase ‘‘engaged in commerce.’’ 61
(c) Physical labor. It is clear from the
principles stated in paragraphs (a) and
(b) of this section, that employees in
shipping rooms, warehouses, distribution yards, grain elevators, etc., who
sort, screen, grade, store, pack, label,
address or otherwise handle or work on
goods in preparation for shipment of
the goods out of the State are engaged
in the production of goods for commerce within the meaning of the Act. 62
The same has been held to be true of
employees doing such work as handling
ingredients (scrap iron) of steel used in
building ships which will move in commerce; 63 handling and caring for livestock at stockyards where the livestock are destined for interstate shipment as such 64 or as meat products; 65
handling or transporting containers to
be used in shipping products interstate; 66 transporting, within a single
State, oil to a refinery 67 or lumber to
a mill, 68 where products of the refinery
or mill will be sent out of the State;
transporting parts or ingredients of
other types of goods or the finished
goods themselves between processors,
manufacturers, and storage places located in a single State, where goods so
transported will leave the State in the
61 Western Union Tel. Co. v. Lenroot, 323 U.S.
490. For examples, see paragraph (c) of this
section.
62 McComb v. Wyandotte Furn. Co., 169 F. 2d
766 (C.A. 8); Walling v. Mutual Wholesale Food
& Supply Co., 141 F. 2d 331 (C.A. 8); West Kentucky Coal Co. v. Walling, 153 F. 2d 582 (C.A.
6); Walling v. Home Loose Leaf Tobacco Warehouse Co., 51 F. Supp. 914 (E.D. Ky.); Walling
v. Yeakley, 3 W.H. Cases 27, modified and affirmed in 140 F. 2d 830 (C.A. 10); Shain v. Armour & Co., 50 F. Supp. 907 (W.D. Ky.);
Walling v. McCracken County Peach Growers
Assn., 50 F. Supp. 900 (W.D. Ky). See also
Clyde v. Broderick, 144 F. 2d 348 (C.A. 10).
63 Bracey v. Luray, 138 F. 2d 8 (C.A. 4).
64 Walling v. Friend, 156 F. 2d 429 (C.A. 8).
65 Fleming v. Swift & Co., 41 F. Supp. 825, affirmed in 131 F. 2d 249 (C.A. 7); McComb v.
Benz Co., 9 W.H. Cases 277 (S.D. Ind.).
66 Walling v. Villaume Box & Lbr. Co., 58 F.
Supp. 150 (D. Minn.).
67 Mid-Continent Pipe Line Co. v. Hargrave,
129 F. 2d 655 (C.A. 10); Boling v. R. J. Allison
Co., Inc., 4 W.H. Cases 500 (N.D. Okla.).
68 Hanson v. Lagerstrom, 133 F. 2d 120 (C.A.
8).
same or an altered form; 69 and repairing or otherwise working on ships, 70
vehicles, 71 machinery, 72 clothing, 73 or
other goods which may be expected to
move in interstate commerce.
These examples are, of course, illustrative rather than exhaustive. Some
of them relate to situations in which
the handling or working on goods for
interstate or foreign commerce may
constitute not only ‘‘production for
commerce’’ but also engaging ‘‘in commerce’’ because the activities are so
closely related to commerce as to be
for all practical purposes a part of it. 74
However, as noted in paragraph (b) of
this section, handling or working on
goods
constitutes
engagement
in
‘‘commerce’’ only and not engagement
in ‘‘production’’ of the goods when it is
done by employees of a common carrier
and is itself the means whereby interstate transit or movement of the goods
by the carrier is accomplished. Thus,
employees of a telegraph company preparing messages for interstate transmission,
television
cameramen
photographing sports or news events
for simultaneous viewing at television
receiving sets in other State, and railroad train crews or truck drivers hauling goods from one State to another
are not engaged in the ‘‘production’’ of
goods by virtue of such activities, but
are covered by the Act only as employees ‘‘engaged in commerce.’’
69 Walling v. Griffin Cartage Co., 62 F. Supp.
696, affirmed in 153 F. 2d 587 (C.A. 6); Walling
v. Comet Carriers, 151 F. 2d 107 (C.A. 2).
70 Slover v. Walthen, 140 F. 2d 258 (C.A. 4).
71 Hertz Drivurself Stations v. United States,
150 F. 2d 923 (C.A. 8); Walling v. Armbruster, 51
F. Supp. 166 (W.D. Ark.); McComb v. Weller, 9.
W.H. Cases 53 (W.D. Tenn.), 17 Labor Cases
(CCH) par. 65, 332; Walling v. Strum & Sons, 6
W.H. Cases 131 (D. N.J.), 11 Labor Cases
(CCH) par. 63, 249.
72 Engebretson v. Albrecht, 150 F. 2d 602 (C.A.
7); Guess v. Montague, 140 F. 2d 500 (C.A. 4).
73 Walling v. Belikoff, 147 F. 2d 1008 (C.A. 2);
Campbell v. Zavelo, 243 Ala. 361, 10 So. 2d 29;
Phillips v. Star Overall Dry Cleaning Laundry
Co., 149 F. 2d 416 (C.A. 2), certiorari denied
327 U.S. 780.
74 Slover v. Walthen, 140 F. 2d 258 (C.A. 4);
Hertz Drivurself Stations v. United States, 150
F. 2d 923 (C.A. 8); Engebretson v. Albrecht, 150
F. 2d 602 (C.A. 7); Walling v. Strum & Sons, 6
W.H. Cases 131 (D. N.J.).
382
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§ 776.17
(d) Nonmanual work. The ‘‘production’’ described by the phrase ‘‘producing * * * or in any other manner
working on’’ goods includes not only
the manual, physical labor involved in
processing and working on the tangible
products of a producing enterprise, but
equally the administration, planning,
management, and control of the various physical processes together with
the accompanying accounting and clerical activities. 75 An enterprise producing goods for commerce does not
accomplish the actual production of
such goods solely with employees performing physical labor on them. Other
employees may be equally important
in actually producing the goods, such
as employees who conceive and direct
policies of the enterprise; employees
who dictate, control, and coordinate
the steps involved in the physical production of goods; employees who maintain detailed and meticulous supervision of productive activities; and employees who direct the purchase of raw
materials and supplies, the methods of
production, the amounts to be produced, the quantity and character of
the labor, the safety measures, the
budgeting and financing, the labor policies, and the maintenance of the plants
and equipment. (For regulations governing exemption from the wage and
hours provisions of employees employed in a bona fide executive, administrative, or professional capacity, see
part 541 of this chapter.) Employees
who perform these and similar activities are an integral part of the coordinated productive pattern of a modern
industrial organization. The Supreme
Court of the United States has held
that from a productive standpoint and
for purposes of the Act the employees
who perform such activities ‘‘are actually engaged in the production of goods
for commerce just as much as are those
who process and work on the tangible
products’’ in the manufacturing plant
or other producing facilities of the enterprise. 76
75 Borden
Co. v. Borella, 325 U.S. 679; Hertz
Drivurself Stations. v. United States, 150 F. 2d
923 (C.A. 8); Callus v. 10 E. 40th St. Bldg., 146
F. 2d 438 (C.A. 2), reversed on other grounds
in 325 U.S. 578.
76 Borden Co. v. Borella, 325 U.S. 679, 683.
§ 776.17 Employment in a ‘‘closely related process or occupation directly
essential to’’ production of goods.
(a) Coverage in general. Employees
who are not actually ‘‘producing * * *
or in any other manner working on’’
goods for commerce are, nevertheless,
engaged in the ‘‘production’’ of such
goods within the meaning of the Act
and therefore within its general coverage if they are employed ‘‘in any
closely related process or occupation
directly essential to the production
thereof, in any State.’’ 77 Prior to the
Fair Labor Standards Amendments of
1949, this was true of employees engaged ‘‘in any process or occupation
necessary to the production’’ of goods
for commerce. The amendments deleted the word ‘‘necessary’’ and substituted the words ‘‘closely related’’
and ‘‘directly essential’’ contained in
the present law. The words ‘‘directly
essential’’ were adopted by the Conference Committee in lieu of the word
‘‘indispensable’’
contained
in
the
amendments as first passed by the
House of Representatives. Under the
amended language, an employee is covered if the process or occupation in
which he is employed is both ‘‘closely
related’’ and ‘‘directly essential’’ to
the production of goods for interstate
or foreign commerce.
The legislative history shows that the
new language in the final clause of section 3(j) of the Act is intended to narrow, and to provide a more precise
guide to, the scope of its coverage with
respect to employees (engaged neither
‘‘in commerce’’ nor in actually ‘‘producing or in any other manner working
on’’ goods for commerce) whose coverage under the Act formerly depended
on whether their work was ‘‘necessary’’
to the production of goods for commerce. Some employees whose work
might meet the ‘‘necessary’’ test are
now outside the coverage of the Act because their work is not ‘‘closely related’’ and ‘‘directly essential’’ to such
77 If coverage of an employee is determined
to exist on either basis, it is, of course, not
necessary to determine whether the employee would also be covered on the other
ground. See Warren-Bradshaw Drilling Co. v.
Hall, 124 F. 2d 42 (C.A. 5), affirmed in 317 U.S.
88.
383
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production; others, however, who
would have been excluded if the indispensability of their work to production
had been made the test, remain within
the coverage under the new language. 78
The scope of coverage under the
‘‘closely related’’ and ‘‘directly essential’’ language is discussed in the paragraphs following. In the light of explanations provided by managers of the
legislation in Congress 78 including expressions of their intention to leave
undisturbed the areas of coverage established under court decisions containing similar language, 79 this new
language should provide a more definite guide to the intended coverage
under the final clause of section 3(j)
than did the earlier ‘‘necessary’’ test.
However, while the coverage or noncoverage of many employees may be determined with reasonable certainty, no
precise line for inclusion or exclusion
may be drawn; there are bound to be
borderline problems of coverage under
the new language which cannot be finally determined except by authoritative decisions of the courts.
(b) Meaning of ‘‘closely related’’ and
‘‘directly essential’’. The terms ‘‘closely
related’’ and ‘‘directly essential’’ are
not susceptible of precise definition; as
used in the Act they together describe
a situation in which, under all the
facts and circumstances, the process or
occupation in which the employee is
employed bears a relationship to the
production of goods for interstate or
foreign commerce: (1) Which may reasonably be considered close, as distinguished from remote or tenuous, and
(2) in which the work of the employee
directly aids production in a practical
sense by providing something essential
to the carrying on in an effective, efficient, and satisfactory manner of an
78 H. Mgrs. St., 1949, p. 14; Sen. St., 1949
Cong. Rec. p. 15372; Statement of the Chairman of the Committee on Education and
Labor explaining the conference agreement
to the House of Representatives, 1949 Cong.
Rec., p. 15135; colloquy between Representatives McConnell and Javits, 1949 Cong. Rec.,
p. 15129; of statements of Representative
Barden (1949 Cong. Rec. p. 15131), Representative Brehm (1949 Cong. Rec. p. 15132), and
Senator Taft (1950 Cong. Rec., p. A–1162).
79 See Kirschbaum Co. v. Walling, 316 U.S.
517.
employer’s operations
such goods. 80
in
producing
Not all activities that are ‘‘closely related’’ to production will be ‘‘directly
essential’’ to it, nor will all activities
‘‘directly essential’’ to production
meet the ‘‘closely related’’ test. For example, employees employed by an employer in an enterprise, or portion
thereof, which is devoted to the production of goods for interstate or foreign commerce will, as a general rule,
be considered engaged in work ‘‘closely
related’’ to such production, but some
such employees may be outside the
coverage of the Act because their work
is not ‘‘directly essential’’ to production of the goods. (For a discussion of
this point and specific illustration, see
§ 776.18(b).) Similarly, there are some
situations in which an employee performing work ‘‘directly essential’’ to
production by an employer other than
his own may not be covered because
the kind of work and the circumstances under which it is performed show the employee’s activities
to be so much a part of an essentially
local business operated by his employer
that it would be unrealistic to consider
them ‘‘closely related’’ to the productive activities of another. (For a more
detailed discussion and specific illustrations see § 776.19.)
(c) Determining whether activities are
‘‘closely related’’ and ‘‘directly essential’’.
(1) The close relationship of an activity
to production, which may be tested by
a wide variety of relevant factors, is to
be distinguished from its direct essentiality to production, which is dependent solely on considerations of need or
function of the activity in the productive enterprise. The words ‘‘directly essential’’ refer only to the relationship
of the employee’s work to production.
Work ‘‘directly essential’’ to production remains so no matter whose employee does it and regardless of the nature or purpose of the employer’s business. It seems clear, on the other hand,
that the criteria for determining
whether a process or occupation is
‘‘closely related’’ to production cannot
be limited to those which show its
80 See H. Mgrs. St. 1949, pp. 14, 15; Sen. St.,
1949 Cong. Rec., p. 15372; cf. Kirschbaum Co. v.
Walling, 316 U.S. 517.
384
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closeness in terms of need or function. 81 It may also be important to ascertain, for instance, whether the activity of the employee bears a relationship to production which is close in
terms either of the place or the time of
its performance, or in terms of the purposes with which the activity is performed by the particular employer
through the employee, or in terms of
relative directness or indirectness of
the activity’s effect in relation to such
production, or in terms of employment
within or outside the productive enterprise. (Examples of the application of
these principles may be found in
§§ 776.18 and 776.19.)
(2) The determination of whether an
activity is closely or only remotely related to production may thus involve
consideration of such factors, among
others, as the contribution which the
activity makes to the production; who
performs the activity; where, when and
how it is performed in relation to the
production to which it pertains; whether its performance is with a view to
aiding production or for some different
purpose; how immediate or delayed its
effect on production is; the number and
nature of any intervening operations or
processes between the activity and the
production in question; and, in an appropriate case, the characteristics and
purposes of the employer’s business. 82
Moreover, in some cases where particular work ‘‘directly essential’’ to
production is performed by an employer other than the producer the degree of such essentiality may be a significant factor in determining whether
the work is also ‘‘closely related’’ to
81 Of course, if the need of function of the
activity in production is such that the tie
between them is both close and immediate
(cf. Kirschbaum Co. v. Walling, 316 U.S. 517),
as for example, where an employee is employed to repair electric motors which are
used in factories in the production of goods
for commerce, this fact may be sufficient to
show both the direct essentiality and the
close relationship of the employee’s work to
production. See Roland Electrical Co. v.
Walling, 326 U.S. 657. See also § 776.19 and H.
Mgrs. St., 1949, pp. 14, 15.
82 Cf. Kirschbaum Co. v. Walling, 316 U.S. 517;
10 E. 40th St. Bldg. v. Callus, 325 U.S. 578;
Schulte Co. v. Gangi, 328 U.S. 108; Borden Co.
v. Borella, 325 U.S. 679; Armour & Co. v.
Wantock, 323 U.S. 126.
such production. (See § 776.19.) No one
of the factors listed in this paragraph
is necessarily controlling, and other
factors may assume importance. Some
may have more significance than others in particular cases, depending upon
the facts. They are merely useful
guides for determining whether the
total situation in respect to a particular process or occupation demonstrates the requisite ‘‘close and immediate tie’’ 83 to the production of
goods for interstate or foreign commerce. It is the sum of the factors relevant to each case that determines
whether the particular activity is
‘‘closely related’’ to such production.
The application of the principles in
this paragraph is further explained and
illustrated in §§ 776.18 and 776.19.
(3) In determining whether an activity is ‘‘directly essential’’ to production, a practical judgment is required
as to whether, in terms of the function
and need of such activity in successful
production operations, it is ‘‘essential’’
and ‘‘directly’’ so to such operations.
These are questions of degree; even
‘‘directly’’ essential activities (for example, machinery repair, custodial,
and clerical work in a producing plant)
(for other examples, see §§ 776.18(a) and
776.19) will vary in the degree of their
essentiality and in the directness of
the aid which they provide to production. An activity may be ‘‘directly essential’’ without being indispensable in
the sense that it cannot be done without; yet some activities which, in a
long chain of causation, might be indispensable to production, such as the
manufacture of brick for a new factory,
or even the construction of the new
factory itself, are not ‘‘directly’’ essential. 84 An activity which provides
something essential to meet the immediate needs of production, as, for example, the manufacture of articles like
machinery or tools or dies for use in
the production of goods for commerce
(see § 776.19(b)) will, however, be no less
‘‘directly’’ essential because intervening activities must be performed in
the distribution, transportation, and
83 See
Kirschbaum Co. v. Walling, 316 U.S.
517.
84 Cf. 10 E. 40th St. Bldg. v. Callus, 325 U.S.
578; Sen. St. 95 Cong. Rec., October 19, 1949,
at 15372.
385
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installation of such products before
they can be used in production. 85 The
application of the principles in this
paragraph is further explained and illustrated in §§ 776.18 and 776.19.
§ 776.18 Employees of producers for
commerce.
(a) Covered employments illustrated.
Some illustrative examples of the employees employed by a producer of
goods for interstate or foreign commerce who are or are not engaged in
the ‘‘production’’ of such goods within
the meaning of the Act have already
been given. Among the other employees of such a producer, doing work in
connection with his production of
goods for commerce, who are covered
because their work, if not actually a
part of such production, is ‘‘closely related’’ and ‘‘directly essential’’ to it, 86
are such employees as bookkeepers,
stenographers, clerks, accountants and
auditors, employees doing payroll,
timekeeping and time study work,
draftsmen, inspectors, testers and research workers, industrial safety men,
employees in the personnel, labor relations, advertising, promotion, and public relations activities of the producing
enterprise, work instructors, and other
office and white collar workers; employees maintaining, servicing, repairing or improving the buildings, 87 machinery, equipment, vehicles, or other
facilities used in the production of
goods for commerce, 88 and such custodial and protective employees as
85 See Walling v. Hamner, 64 F. Supp. 690
(W.D. Va.).
86 See H. Mgrs. St., 1949, p. 14; Sen. St., 1949
Cong. Rec., p. 15372. See also Borden Co. v.
Borella, 325 U.S. 679.
87 No distinction of economic or statutory
significance can be drawn between such work
in a building where the production of goods
is carried on physically and in one where
such production is administered, managed,
and controlled. Borden Co. v. Borella, 324 U.S.
679.
88 Such mechanics and laborers as machinists, carpenters, electricians, plumbers,
steamfitters, plasters, glaziers, painters,
metal workers, bricklayers, hod carriers,
roofers, stationary engineers, their apprentices and helpers, elevator starters and operators, messengers, janitors, charwomen, porters, handy men, and other maintenance
workers would come within this category.
watchmen, guards, firemen, patrolmen,
caretakers, stockroom workers, and
warehousemen;
and
transportation
workers bringing supplies, materials,
or equipment to the producer’s premises, removing slag or other waste materials therefrom, or transporting materials or other goods, or performing
such other transportation activities, as
the needs of production may require.
These examples are intended as illustrative, rather than exhaustive of the
group of employees of a producer who
are ‘‘engaged in the production’’ of
goods for commerce, within the meaning of the Act, and who are therefore
entitled to its wage and hours benefits
unless specifically exempted by some
provision of the Act.
(b) Employments not directly essential
to production distinguished. Employees
of a producer of goods for commerce
are not covered as engaged in such production if they are employed solely in
connection with essentially local activities which are undertaken by the
employer independently of his productive operations or at most as a dispensable, collateral incident to them and
not with a view to any direct function
which the activities serve in production. It is clear, for example, that an
employee would not be covered merely
because he works as a domestic servant
in the home of an employer whose factory produces goods for commerce,
even though he is carried on the factory payroll. To illustrate further, a
producer may engage in essentially
local
activities
as
a
landlord,
restauranteur, or merchant in order to
utilize the opportunity for separate
and additional profit from such ventures or to provide a convenient means
of meeting personal needs of his employees. Employees exclusively employed in such activities of the producer are not engaged in work ‘‘closely
related’’ and ‘‘directly essential’’ to his
production of goods for commerce
merely because they provide residential, eating, or other living facilities
for his employees who are engaged in
the production of such goods. 89 Such
employees are to be distinguished from
89 H. Mgrs. St., 1949, pp. 14, 15; see also Brogan v. National Surety Co., 246 U.S. 257. Cf.
Sen. St., 1949 Cong. Rec., p. 15372.
386
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employees like cooks, cookees, and
bull cooks in isolated lumber camps or
mining camps, where the operation of a
cookhouse may in fact be ‘‘closely related’’ and ‘‘directly essential’’ or, indeed, indispensable to the production
of goods for commerce. 90
Some specific examples of the application of these principles may be helpful.
Such services as watching, guarding,
maintaining or repairing the buildings,
facilities, and equipment used in the
production of goods for commerce are
‘‘directly essential’’ as well as ‘‘closely
related’’ to such production as it is carried on in modern industry. 91 But such
services performed with respect to private dwellings tenanted by employees
of the producer, as in a mill village,
would not be ‘‘directly essential’’ to
production merely because the dwellings were owned by the producer and
leased to his employees. 92 Similarly,
employees of the producer or of an
independent employer who are engaged
only in maintaining company facilities
for entertaining the employer’s customers, or in providing food, refreshments, or recreational facilities, including restaurants, cafeterias, and
snack bars, for the producer’s employees in a factory, or in operating a children’s nursery for the convenience of
employees who leave young children
there during working hours, would not
be doing work ‘‘directly essential’’ to
the production of goods for commerce. 93
90 See Brogan v. National Surety Co., 246 U.S.
257; Consolidated Timber Co. v. Womack, 132 F.
2d 101 (C.A. 9); Hanson v. Lagerstrom, 133 F. 2d
120 (C.A. 8); cf. H. Mgrs. St., 1949, pp. 14, 15
and Sen. St., 1949 Cong. Rec., p. 15372.
91 H. Mgrs. St., 1949, p. 14; Sen. St., 1949
Cong. Rec., p. 15372; Kirschbaum v. Walling,
316 U.S. 517; Borden Co. v. Borella, 325 U.S.
679; Walton v. Southern Package Corp. 320 U.S.
540; Armour & Co. v. Wantock, 325 U.S. 126.
92 H. Mgrs. St., 1949, pp. 14, 15; Morris v.
Beaumont Mfg. Co., 84 F. Supp. 909 (W.D.
S.C.); cf. Wilson v. Reconstruction Finance
Corp., 158 F. 2d 564 (C.A. 5), certiorari denied,
331 U.S. 810. Cf. Brogan v. National Surety Co.,
246 U.S. 257; Consolidated Timber Co. v.
Womack, 132 F. 2d 101 (C.A. 9); Hanson v.
Lagerstrom, 133 F. 2d 120 (C.A. 8).
93 Cf. H. Mgrs. St., 1949, pp. 14, 15.
§ 776.19 Employees of independent employers meeting needs of producers
for commerce.
(a) General statement. (1) If an employee of a producer of goods for commerce would not, while performing particular work, be ‘‘engaged in the production’’ of such goods for purposes of
the Act under the principles heretofore
stated, an employee of an independent
employer performing the same work on
behalf of the producer would not be so
engaged. Conversely, as shown in the
paragraphs following, the fact that employees doing particular work on behalf of such a producer are employed
by an independent employer rather
than by the producer will not take
them outside the coverage of the Act if
their work otherwise qualifies as the
‘‘production’’ of ‘‘goods’’ for ‘‘commerce.’’
(2) Of course, in view of the Act’s definition of ‘‘goods’’ as including ‘‘any
part or ingredient’’ of goods (see § 776.20
(a), (c)), employees of an independent
employer providing other employers
with materials or articles which become parts or ingredients of goods produced by such other employers for
commerce are actually employed by a
producer of goods for commerce and
their coverage under the Act must be
considered in the light of this fact. For
example, an employee of such an independent employer who handles or in
any manner works on the goods which
become parts or ingredients of such
other producer’s goods is engaged in
actual production of goods (parts of ingredients) for commerce, and the question of his coverage is determined by
this fact without reference to whether
his work is ‘‘closely related’’ and ‘‘directly essential’’ to the production by
the other employer of the goods in
which such parts or ingredients are incorporated. So also, if the employee is
not engaged in the actual production of
such parts or ingredients, his coverage
will depend on whether as an employee
of a producer of goods for commerce,
his work is ‘‘closely related’’ and ‘‘directly essential’’ to the production of
the parts or ingredients, rather than on
the principles applicable in determining the coverage of employees of an
independent employer who does not
387
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§ 776.19
29 CFR Ch. V (7–1–19 Edition)
himself produce the goods for commerce. 94
(3) Where the work of an employee
would be ‘‘closely related’’ and ‘‘directly essential’’ to the production of
goods for commerce if he were employed by a producer of the goods, the
mere fact that the employee is employed by an independent employer
will not justify a different answer. 95
This does not necessarily mean that
such work in every case will remain
‘‘closely related’’ to production when
performed by employees of an independent employer. It will, of course, be
as ‘‘directly essential’’ to production in
the one case as in the other. (See
§ 776.17(c)). But in determining whether
an employee’s work is ‘‘closely’’ or
only remotely related to the production of goods for commerce by an employer other than his own, the nature
and purpose of the business in which he
is employed and in the course of which
he performs the work may sometimes
become important.
Such factors may prove decisive in particular situations where the employee’s
work, although ‘‘directly essential’’ to
the production of goods by someone
other than his employer, is not far
from the borderline between those activities which are ‘‘directly essential’’
and those which are not. In such a situation, it may appear that his performance of the work is so much a part of
an essentially local business carried on
by his employer without any intent or
purpose of aiding production of goods
for commerce by others that the work,
as thus performed, may not reasonably
be considered ‘‘closely related’’ to such
production. 96 In other situations, however, where the degree to which the
work is directly essential to production
by the producer is greater the fact that
94 Bracey v. Luray, 138 F. 2d 8 (C.A. 4);
Walling v. Peoples Packing Co., 132 F. 2d 236
(C.A. 10), certiorari denied 318 U.S. 774; MidContinent Pipe Line Co. v. Hargrave, 129 F. 2d
655 (C.A. 10); Walling v. W. D. Haden Co., 153
F. 2d 196 (C.A. 5).
95 See Kirschbaum Co. v. Walling, 316 U.S.
517; Roland Electrical Co. v. Walling, 326 U.S.
657; Farmers Reservoir Co. v. McComb, 337 U.S.
755; H. Mgrs. St., 1949, p. 14. See also Sen. St.,
1949 Cong. Rec., p. 15372.
96 M. Mgrs. St., 1949, pp. 14, 15, 10 E. 40th St.
Bldg. Co. v. Callus, 325 U.S. 578.
the independent employer is engaged in
a business having local aspects may
not be sufficient to negate a close relationship between his employees’ work
and such production. 97 And it seems
clear that where the independent employer operates a business which, unlike that of the ordinary local merchant, is directed to providing producers with materials or services directly essential to the production of
their goods for commerce, the activities of such a business may be found to
be ‘‘closely related’’ to such production. 98 In such event, all the employees
of the independent employer whose
work is part of his integrated effort to
meet such needs of producers are covered as engaged in work closely related
and directly essential to production of
goods for commerce. 99
(b) Extent of coverage under ‘‘closely
related’’ and ‘‘directly essential’’ clause
illustrated. In paragraphs (b)(1) to (5) of
this section, the principles discussed
97 H. Mgrs. St., 1949, p. 14; Kirschbaum Co. v.
Walling, 316 U.S. 517; Warren-Bradshaw Drilling Co. v. Hall, 317 U.S. 88.
98 See H. Mgrs. St., p. 14, and 10 E. 40th St.
Bldg. Co. v. Callus, 325 U.S. 578.
99 Kirschbaum Co. v. Walling, 316 U.S. 517
(Stationary engineers and firemen, watchmen, elevator operators, electricians, carpenters, carpenters’ helper, engaged in maintaining and servicing loft building for producers); Roland Electrical Co. v. Walling, 326
U.S. 657 (foremen, trouble shooters, mechanics, helpers, and office employees of company
selling and servicing electric motors, generators, and equipment for commercial and industrial firms); Meeker Coop. Light & Power
Assn. v. Phillips, 158 F. 2d 698 (C.A. 8) (outside
employees and office employees of light and
power company serving producers); Walling
v. New Orleans Private Patrol Service, 57 F.
Supp. 143 (E. D. La.) (guards, watchmen, and
office employees of company providing patrol service for producers); Walling v. Thompson, 65 F. Supp. 686 (S.D. Cal.) (installation
and service men, shopmen, bookkeeper,
salesman, dispatcher of company supplying
burglar alarm service to producers).
In H. Mgrs. St., 1949, p. 14 it is said, ‘‘Employees engaged in such maintenance, custodial and clerical work will remain subject to
the Act, notwithstanding they are employed
by an independent employer performing such
work on behalf of the manufacturer, mining
company, or other producer for commerce.
All such employees perform activities that
are closely related and directly essential to
the production of goods for commerce.’’
388
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Wage and Hour Division, Labor
§ 776.19
above are illustrated by reference to a
number of typical situations in which
goods or services are provided to producers of goods for commerce by the
employees of independent employers.
These examples are intended not only
to answer questions as to coverage in
the particular situations discussed, but
to provide added guideposts for determining whether employees in other situations are doing work closely related
and directly essential to such production.
(1) Many local merchants sell to local
customers within the same State goods
which do not become a part or ingredient (as to parts or ingredients, see
§ 776.20(c)) of goods produced by any of
such customers. Such a merchant may
sell to his customers, including producers for commerce, such articles, for
example, as paper towels, or record
books, or paper clips, or filing cabinets,
or automobiles and trucks, or paint, or
hardware, not specially designed for
use in the production of other goods.
Where such a merchant’s business is essentially local in nature, selling its
goods to the usual miscellany of local
customers without any particular intent or purpose of aiding production of
other goods for commerce by such customers, the local merchant’s employees are not doing work both ‘‘closely
related’’ and ‘‘directly essential’’ to
production, so as to bring them within
the reach of the Act, merely ‘‘because
some of the customers * * * are producing goods for interstate [or foreign]
commerce.’’ 1 Therefore, if they do not
otherwise engage ‘‘in commerce’’ (see
§§ 776.8 to 776.13) or in the ‘‘production’’
of goods for commerce, they are not
covered by the Act.
In such a situation, moreover, even
where the work done by the employees
is ‘‘directly essential’’ to such production by their employer’s customers, it
may not meet the ‘‘closely related’’
test. But the more directly essential to
the production of goods for commerce
such work is, the more likely it is that
a close and immediate tie between it
and such production exists which will
be sufficient, notwithstanding the local
aspect of the employer’s business, to
bring the employees within the cov1 H.
Mgrs. St., 1949, pp. 14, 15.
erage of the Act on the ground that
their work is ‘‘closely related’’ as well
as ‘‘directly essential’’ to production
by the employer’s customers.
Such a close and immediate tie with
production exists, for example, where
the independent employer, through his
employees, supplies producers of goods
for commerce with things as directly
essential to production as electric motors or machinery or machinery parts
for use in producing the goods of a
manufacturer, for mining operations,
or for production of oil, or for other
production operations or the power,
water, or fuel required in such production operations, to mention a few typical examples. 2 The fact that these
needs of producers are supplied through
the agency of businesses having certain
local aspects cannot alter the obvious
fact that the employees of such businesses who supply these needs are
doing work both ‘‘closely related’’ and
‘‘directly essential’’ to production by
the employer’s customers. As the
United States Supreme Court has stated: ‘‘Such sales and services must be
immediately available to * * * [the
customers] or their production will
stop.’’ 3
It should be noted that employees of
independent employers providing such
essential goods and services to producers will not be removed from coverage because an unsegregated portion
of their work is performed for customers other than producers of goods
for commerce. For example, employees
of public utilities, furnishing gas, electricity or water to firms within the
State engaged in manufacturing, mining, or otherwise producing goods for
2 See H. Mgrs. St., 1949, p. 14; Sen. St., 95
Cong. Rec., October 19, 1949, at 15372; Statement of the Chairman of the Committee on
Education and Labor explaining the conference agreement to the House of Representatives, 1949 Cong. Rec., p. 15135; Roland
Electrical Co. v. Walling, 326 U.S. 657; Reynolds
v. Salt River Valley Water Users Assn., 143 F.
2d 863 (C.A. 9); Meeker Coop. Light & Power
Assn. v. Phillips, 158 F. 2d 698 (C.A. 8); Walling
v. Hammer, 64 F. Supp. 690 (W.D. Va.); Holland
v. Amoskeag Machine Co., 44 F. Supp. 884 (D.
N.H.); Princeton Mining Co. v. Veach, 63 N.E.
2d 306 (Ind. App.).
3 Roland Electrical Co. v. Walling, 326 U.S.
657, 664.
389
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§ 776.19
29 CFR Ch. V (7–1–19 Edition)
On the other hand, the legislative history makes it clear that employees of a
‘‘local architectural firm’’ are not
brought within the coverage of the Act
by reason of the fact that their activities ‘‘include the preparation of plans
for the alteration of buildings within
the State which are used to produce
goods for interstate commerce.’’ Such
activities are not ‘‘directly essential’’
enough to the production of goods in
the buildings to establish the required
close relationship between their performance and such production when
they are performed by employees of
such a ‘‘local’’ firm. 8 Of course, this result is even more apparent where the
activities of the employees of such a
‘‘local’’ business may not be viewed as
‘‘directly essential’’ to production. It is
clear, for example, that Congress did
not believe ‘‘employees of an independently owned and operated restaurant’’
should be brought under the coverage
of the Act because the restaurant is
‘‘located in a factory.’’ To establish
coverage on ‘‘production’’ grounds, an
employee must be ‘‘shown to have a
closer and more direct relationship to
the producing * * * activity’’ than
this. 9
(3) Some further examples may help
to clarify the line to be drawn in such
cases. The work of employees constructing a dike to prevent the flooding
of an oil field producing oil for commerce would clearly be work not only
‘‘directly essential’’ but also ‘‘closely
related’’ to the production of the oil.
However, employees of a materialman
quarrying, processing, and transporting stone to the construction site
for use in the dike would be doing work
too far removed from production of the
oil to be considered ‘‘closely related’’
thereto. 10 Similarly, the sale of sawmill equipment to a producer of mine
props which are in turn sold to mines
within the same State producing coal
for commerce is too remote from production of the coal to be considered
‘‘closely related’’ thereto, but production of the mine props, like the manufacture of tools, dies, or machinery for
use in producing goods for commerce,
has such a close and immediate tie
with production of the goods for commerce that it meets the ‘‘closely related’’ (as well as the ‘‘directly essential’’) test. 11
4 Meeker Coop. Light & Power Assn. v. Phillips, 158 F. 2d 698 (C.A. 8); H. Mgrs. St., 1949,
p. 14. For another illustration see H. Mgrs.
St., 1949, p. 26, with reference to industrial
laundries.
5 H. Mgrs. St., 1949, p. 14; Sen. St., 1949
Cong. Rec., p. 15372.
6 Walling v. Amidon, 153 F. 2d 159 (C.A. 10);
Sen. St., 95 Cong. Rec., October 19, 1949, at
15372.
7 H. Mgrs. St., 1949, p. 26; Sen. St., 95 Cong.
Rec., October 19, 1949, at 15372. See also
Koerner v. Associated Linen Laundry Suppliers,
270 App. Div. 986, 62 N.Y.S. 2d 774.
8 H. Mgrs. St., 1949, p. 15. See also McComb
v. Turpin, 81 F. Supp. 86, 1948 (D. Md.).
9 H. Mgrs. St., 1949, p. 14. Cf. Bayer v.
Courtemanche, 76 F. Supp. 193 (D. Conn.). See
also § 776.18(b).
10 See E. C. Schroeder Co. v. Clifton, 153 F. 2d
385 (C.A. 10) (opinion of Judge Phillips) and
H. Mgrs. St., 1949, p. 15.
11 See Wailing v. Hamner, 64 F. Supp. 690
(W.D. Va.), and statement of the Chairman of
the Committee on Education and Labor explaining the conference agreement to the
House of Representatives, 1949 Cong. Rec., p.
15135.
commerce, are subject to the Act notwithstanding such gas, electricity or
water is also furnished to consumers
who do not produce goods for commerce. 4
(2) On similar principles, employees
of independent employers providing to
manufacturers, mining companies, or
other producers such goods used in
their production of goods for commerce
as tools and dies, patterns, designs, or
blueprints are engaged in work ‘‘closely related’’ as well as ‘‘directly essential’’ to the production of the goods for
commerce; 5 the same is true of employees of an independent employer engaged in such work as producing and
supplying to a steel mill, sand meeting
the mill’s specifications for cast shed,
core, and molding sands used in the
production by the mill of steel for commerce. 6 Another illustration of such
covered work, according to managers
of the bill in Congress, is that of employees of industrial laundry and linen
supply companies serving the needs of
customers engaged in manufacturing
or mining goods for commerce. 7
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Wage and Hour Division, Labor
§ 776.19
(4) A further illustration of the distinction between work that is, and
work that is not, ‘‘closely related’’ to
the production of goods for commerce
may be found in situations involving
activities which are directly essential
to the production by farmers of farm
products which are shipped in commerce. Employees of an employer furnishing to such farmers, within the
same State, water for the irrigation of
their crops, power for use in their agricultural production for commerce, or
seed from which the crops grow, are engaged in work ‘‘closely related’’ as well
as ‘‘directly essential’’ to the production of goods for commerce. 12 On the
other hand, it is apparent from the legislative history that Congress did not
regard, as ‘‘closely related’’ to the production of farm products for commerce, the activities of employees in a
local fertilizer plant producing fertilizer for use by farmers within the
same State to improve the productivity of the land used in growing such
products. 13 Fertilizer is ordinarily
thought to be assimilated by the soil
rather than by the crop and, in the ordinary case, may be considered less directly essential to production of farm
products than the water or seed, without which such production would not
be possible. Probably the withdrawal
from coverage of such employees (who
were held ‘‘necessary’’ to production of
goods for commerce under the Act
prior to the 1949 amendments 14) rests
wholly or in part on the principles
stated in paragraph (a)(3) of this section and paragraph (b)(1) of this section. Heretofore the Department has
taken the position that producing or
supplying feed for poultry and livestock to be used by farmers within the
State in the production of poultry or
12 See Farmers Reservoir Co. v. McComb, 337
U.S. 755; Reynolds v. Salt River Valley Water
Users Assn., 143 F. 2d 863 (C.A. 9); Meeker
Coop. Light & Power Assn. v. Phillips, 158 F. 2d
698 (C.A. 8).
Reference should be made to section 13 (a)
(6) of the Act providing an exemption from
the wage and hours provisions for employees
employed in agriculture and for certain employees of nonprofit and sharecrop irrigation
companies.
13 H. Mgrs. St. 1949, p. 15.
14 McComb v. Super-A Fertilizer Works, 165 F.
2d 824 (C.A. 1).
cattle for commerce was covered. The
case of Mitchell v. Garrard Mills 15 has
reached a contrary conclusion as to a
local producer of such feed in a situation where all of the feed was sold to
farmers and dealers for use exclusively
within the State. For the time being,
and until further clarification from the
courts, the Divisions will not assert
the position that coverage exists under
the factual situation which existed in
this case.
(5) Managers of the legislation in
Congress stated that all maintenance,
custodial, and clerical employees of
manufacturers, mining companies, and
other producers of goods for commerce
perform activities that are both
‘‘closely related’’ and ‘‘directly essential’’ to the production of goods for
commerce, and that the same is true of
employees of an independent employer
performing such maintenance, custodial, and clerical work ‘‘on behalf of’’
such producers.
Typical of the employees in this covered group are those repairing or maintaining the machinery or buildings
used by the producer in his production
of goods for commerce and employees
of a watchman or guard or patrol or
burglar alarm service protecting the
producer’s premises. 16 On the other
hand, the House managers of the bill
made it clear that employees engaged
in cleaning windows or cutting grass at
the plant of a producer of goods for
commerce were not intended to be included as employees doing work
‘‘closely related’’ to production on ‘‘on
behalf of’’ the producer where they
were employed by a ‘‘local windowcleaning company’’ or a ‘‘local independent nursery concern,’’ merely because the customers of the employer
happen to include producers of goods
for commerce. 17 A similar view was expressed with respect to employees of a
‘‘local exterminator service firm’’
working wholly within the State exterminating pests in private homes, in a
15 241
F. 2d 249 (C.A. 6).
H. Mgrs. St., 1949, p. 14; Sen. St. 1949
Cong. Rec. p. 15372; Kirschbaum Co. v. Walling,
316 U.S. 517; Roland Electrical Co. v. Walling,
326 U.S. 657; Walling v. Sondock, 132 F. 2d 77
(C.A. 5); Holland v. Amoskeag Machine Co., 44
F. Supp. 884 (D.N.H.).
16 See
391
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§ 776.20
29 CFR Ch. V (7–1–19 Edition)
variety of local establishments, ‘‘and
also in buildings within the State used
to produce goods for interstate commerce.’’ 17
[15 FR 2925, May 17, 1950, as amended at 22
FR 9692, Dec. 4, 1957]
§ 776.20
‘‘Goods.’’
(a) The statutory provision. An employee is covered by the wage and
hours provisions of the Act if he is engaged in the ‘‘production’’ (as explained in §§ 776.15 through 776.19) ‘‘for
commerce’’ (as explained in § 776.21) of
anything defined as ‘‘goods’’ in section
3(i) of the Act. This definition is:
Goods means goods (including ships and
marine equipment), wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any
part or ingredient thereof, but does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof other than a producer, manufacturer, or processor thereof.
(b) ‘‘Articles or subjects of commerce of
any character.’’ It will be observed that
‘‘goods’’ as defined in the Act are not
limited to commercial goods or articles
of trade, or, indeed, to tangible property, but include ‘‘articles or subjects
of commerce of any character (emphasis
supplied). 18 It is well settled that
things such as ‘‘ideas, * * * orders, and
intelligence’’ are ‘‘subjects of commerce.’’ Telegraphic messages have,
accordingly, been held to be ‘‘goods’’
within the meaning of the Act. 19 Other
articles or subjects of commerce which
fall within the definition of ‘‘goods’’ include written materials such as newspapers, magazines, brochures, pamphlets,
bulletins,
and
announcements; 20 written reports, fiscal and
17 H.
Mgrs. St., 1949, page 15.
pointed out in Lenroot v. Western
Union Tel. Co., 141 F. 2d 400 (C.A. 2), the legislative history shows that the definition was
originally narrower, and that subjects of
commerce were added by a Senate amendment.
19 Western Union Tel. Co. v. Lenroot 323 U.S.
490.
20 Mabee v. White Plains Pub. Co., 327 U.S.
178; Yunker v. Abbye Employment Agency, 32
N.Y.S. 2d 715; Berry v. 34 Irving Place Corp., 52
F. Supp. 875 (S.D. N.Y.); Ullo v. Smith, 62 F.
Supp. 757, affirmed in 177 F. 2d 101 (C.A. 2);
see also opinion of the four dissenting jus18 As
other statements and accounts, correspondence, lawyers’ briefs and other
documents; 21 advertising, motion picture, newspaper and radio copy, artwork and manuscripts for publication; 22 sample books; 23 letterheads, envelopes, shipping tags, labels, check
books, blank books, book covers, advertising circulars and candy wrappers. 24 Insurance policies are ‘‘goods’’
within the meaning of the Act; 25 so are
bonds, stocks, bills of exchange, bills of
lading, checks, drafts, negotiable notes
and other commercial paper. 26 ‘‘Goods’’
includes gold; 27 livestock; 28 poultry
tices in 10 E. 40th St. Bldg. v. Callus, 325 U.S.
at p. 586.
Waste paper collected for shipment in commerce is goods. See Fleming v. Schiff, 1 W.H.
Cases 893 (D. Colo.), 15 Labor Cases (CCH)
par. 60,864.
21 Phillips v. Meeker Coop. Light & Power
Asso., 63 F. Supp. 733, affirmed in 158 F. 2d 698
(C.A. 8); Lofther v. First Nat. Bank of Chicago,
48 F. Supp. 692 (N.D. Ill.) See also Rausch v.
Wolf, 72 F. Supp. 658 (N.D. Ill). There are
other cases (e.g., Kelly v. Ford, Bacon &
Davis, 162 F. 2d 555 (C.A. 3) and Bozant v.
Bank of New York, 156 F. 2d 787 (C.A. 2) which
suggest that such things are ‘‘goods’’ only
when they are articles of trade. Although the
Supreme Court has not settled the question,
such a view appears contrary to the express
statutory definitions of ‘‘goods’’ and ‘‘commerce’’.
22 Robert v. Henry Phipps Estate, 156 F. 2d 958
(C.A. 2); Baldwin v. Emigrant Industrial Sav.
Bank, 150 F. 2d 524 (C.A. 2), certiorari denied
326 U.S. 757; Bittner v. Chicago Daily News Ptg.
Co., 4 W.H. Cases 837 (N.D. Ill.), 29 Labor
Cases (CCH) par. 62,479; Schinck v. 386 Fourth
Ave. Corp., 49 N.Y.S. 2d 872.
23 Walling v. Higgins, 47 F. Supp. 856 (E.D.
Pa.).
24 McAdams v. Connelly, 8 W.H. Cases 498
(W.D. Ark.), 16 Labor Cases (CCH) par. 64,963;
Walling v. Lacy, 51 F. Supp. 1002 (D. Colo.);
Tobin v. Grant 8 W.H. Cases 361 (N.D. Calif.).
See also Walling v. Sieving, 5 W.H. Cases 1009
(N.D. Ill.), 11 Labor Cases (CCH) par. 63,098.
25 Darr v. Mutual Life Ins. Co., 169 F. 2d 262
(C.A. 2), certiorari denied 335 U.S. 871.
26 Bozant v. Bank of New York, 156 F. 2d 787
(C.A. 2).
27 Walling v. Haile Gold Mines, 136 F. 2d 102
(C.A. 4); Fox v. Summit King Mines, 143 F. 2d
926 (C.A. 9).
28 Walling v. Friend, 156 F. 2d 429 (C.A. 8).
392
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§ 776.20
and eggs; 29 vessels; 30 vehicles; 31 aircraft; 32 garments being laundered or
rented; 33 ice; 34 containers, as, for example, cigar boxes or wrapping paper
and packing materials for other goods
shipped in commerce; 35 electrical energy or power, gas, etc.; 36 and by-products, 37 to mention only a few illustrations of the articles or subjects of
‘‘trade,
commerce,
transportation,
transmission,
or
communication
among the several States, or between
any State and any place outside thereof’’ which the Act refers to as ‘‘goods.’’
The Act’s definitions do not, however,
include as ‘‘goods’’ such things as
dams, river improvements, highways
and viaducts, or railroad lines. 38
(c) ‘‘Any part or ingredient.’’ Section
3(i) draws no distinction between goods
and their ingredients and in fact defines goods to mean ‘‘goods’’ * * * or
any part or ingredient thereof.’’ The
fact that goods are processed or
changed in form by several employers
before going into interstate or foreign
commerce does not affect the character
of the original product as ‘‘goods’’ produced for commerce. Thus, if a garment manufacturer sends goods to an
independent contractor within the
State to have them sewn, after which
he further processes and ships them in
interstate commerce, the division of
the production functions between the
two employees does not alter the fact
that the employees of the independent
contractor are actually producing
29 Walling v. DeSoto Creamery & Produce Co.,
51 F. Supp. 938 (D. Minn).
30 Slover v. Wathen, 140 F. 2d 258 (C.A. 4).
31 Hertz Drivurself Stations v. United States,
150 F. 2d 923 (C.A. 8).
32 Jackson v. Northwest Airlines, 75 F. Supp.
32 (D. Minn.).
33 Phillips v. Star Overall Dry Cleaning Laundry Co., 149 F. 2d 416 (C.A. 2).
34 Hamlet Ice Co. v. Fleming, 127 F. 2d 165
(C.A. 4); Atlantic Co. v. Walling, 131 F. 2d 518
(C.A. 5).
35 Enterprise Box Co. v. Fleming, 125 F. 2d 897
(C.A. 5), certiorari denied, 316 U.S. 704; Fleming v. Schiff, 1 W.H. Cases 883 (D. Colo.), 5
Labor Cases (CCH) par. 60,864.
36 Walling v. Connecticut Co.; 62 F. Supp. 733
(D. Conn.), affirmed 154 F. 2d 552 (C.A. 2).
37 Walling v. Peoples Packing Co., 132 F. 2d
236 (C.A. 10), certiorari denied 318 U.S. 774.
38 Engebretsen v. Albrecht, 150 F. 2d 602 (C.A.
7); Kenny v. Wigton-Abbott Corp., 80 F. Supp.
489 (D. N.J.).
(‘‘working on’’) the ‘‘goods’’ (parts or
ingredients of goods) which enter the
channels of commerce. 39
Similarly, if a manufacturer of buttons
sells his products within the State to a
manufacturer of shirts, who ships the
shirts in interstate commerce, the employees of the button manufacturer
would be engaged in the production of
goods for commerce; or, if a lumber
manufacturer sells his lumber locally
to a furniture manufacturer who sells
furniture in interstate commerce, the
employees of the lumber manufacturer
would likewise come within the scope
of the Act. Any employee who is engaged in the ‘‘production’’ (as explained in § 776.15) of any part or ingredient of goods produced for trade, commerce, transportation, transmission, or
communication among the several
States or between any State and any
place outside thereof is engaged in the
production of ‘‘goods’’ for commerce
within the meaning of the Act. 40
(d) Effect of the exclusionary clause.
The exclusionary clause in the definition that excepts ‘‘goods after their delivery into the actual physical possession of the ultimate consumer thereof
other than a producer, manufacturer,
or processor thereof,’’ is intended to
protect ultimate consumers other than
producers, manufacturers, or processors of the goods in question 41 from
the ‘‘hot goods’’ provisions of section
15(a)(1) of the Act. 42 Section 15(a)(1)
makes it unlawful for any person ‘‘to
transport * * * (or * * * ship * * * in
commerce * * * any goods’’ produced in
39 Schulte
Co. v. Gangi, 328 U.S. 108.
Electrical Co. v. Walling, 326 U.S.
657; Bracy v. Luray, 138 F. 2d 8 (C.A. 4);
Walling v. W. J. Haden Co., 153 F. 2d 196 (C.A.
5); Mid-Continent Pipe Line Co. v. Hargrave,
129 F. 2d 655 (C.A. 10); Boiling v. Allison, 4 W.
H. Cases 500 (N.D. Okla.); Hanson v.
Lagerstrom, 133 F. 2d 120 (C.A. 8); Walling v.
Comet Carriers, 151 F. 2d 107 (C.A. 2); Walling
v. Griffin Cartage Co., 62 F. Supp. 396, affirmed in 153 F. 2d 587 (C.A. 6); Walling v.
Kerr, 47 F. Supp. 852 (E.D. Pa.).
41 Southern Advance Bag & Paper Co. v.
United States, 183 F. 2d 449 (C.A. 5); Phillips v.
Star Overall Dry Cleaning Laundry Co, 149 F.
2d 485 (C.A. 2), certiorari denied 327 U.S. 780.
42 Jackson v. Northwest Airlines, 70 F. Supp.
501.
40 Roland
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§ 776.21
29 CFR Ch. V (7–1–19 Edition)
violation of the wage and hours standards established by the Act. (Exceptions are made subject to specified conditions for common carriers and for
certain purchasers acting in good faith
reliance on written statements of compliance. See footnote 53 to § 776.15(a).)
By defining ‘‘goods’’ in section 3(i) so
as to exclude goods after their delivery
into the actual physical possession of
the ultimate consumer (other than a
producer, manufacturer, or processor
thereof) Congress made it clear that it
did not intend to hold the ultimate
consumer as a violator of section
15(a)(1) if he should transport ‘‘hot
goods’’ across a State line. 43 Thus, if a
person purchases a pair of shoes for
himself from a retail store 44 and carries the shoes across a State line, the
purchaser is not guilty of a violation of
section 15(a)(1) if the shoes were produced in violation of the wage or hours
provisions of the statute. But the fact
that goods produced for commerce lose
their character as ‘‘goods’’ after they
come into the actual physical possession of an ultimate consumer who does
not further process or work on them,
does not affect their character as
‘‘goods’’ while they are still in the actual physical possession of the producer, manufacturer or processor who
is handling or working on them with
the intent or expectation that they
will subsequently enter interstate or
foreign commerce. 45 Congress clearly
did not intend to permit an employer
to avoid the minimum wage and maximum hours standards of the Act by
making delivery within the State into
the actual physical possession of the
ultimate consumer who transports or
ships the goods outside of the State.
Thus, employees engaged in building a
boat for delivery to the purchaser at
the boatyard are considered within the
coverage of the Act if the employer, at
the time the boat is being built, in43 Hamlet Ice Co. v. Fleming, 127 F. 2d 165
(C.A. 4), certiorari denied 317 U.S. 634.
44 Note that the retail or service establishment exemption in section 13(a)(2) does not
protect the retail store from a violation of
the ‘‘hot goods’’ provision if it sells in interstate commerce goods produced in violation
of section 6 or 7.
45 See cases cited above in footnotes 41, 42,
43, this section.
tends, hopes, or has reason to believe
that the purchase will sail it outside
the State. 46
§ 776.21
‘‘For’’ commerce.
(a) General principles. As has been
made clear previously, where ‘‘goods’’
(as defined in the Act) are produced
‘‘for commerce,’’ every employee engaged in the ‘‘production’’ (as explained in §§ 776.15 through 776.19) of
such goods (including any part or ingredient thereof) is within the general
coverage of the wage and hours provisions of the Act. Goods are produced
for ‘‘commerce’’ if they are produced
for ‘‘trade, commerce, transporation,
transmission,
or
communication
among the several States or between
any State and any place outside thereof.’’ 47 Goods are produced ‘‘for’’ such
commerce where the employer intends,
hopes, expects, or has reason to believe
that the goods or any unsegregated
part of them will move (in the same or
in an altered form or as a part or ingredient of other goods) in such interstate
or foreign commerce. 48 If such movement of the goods in commerce can be
reasonably anticipated by the employer when his employees perform
work defined in the Act as ‘‘production’’ of such goods, it makes no difference whether he himself, or a subsequent owner or possessor of the goods,
put the goods in interstate or foreign
commerce. 49 The fact that goods do
move in interstate or foreign commerce is strong evidence that the employer intended, hoped, expected, or
had reason to believe that they would
so move.
Although it is generally well understood that goods are produced ‘‘for’’
commerce if they are produced for
46 Walling v. Lowe, 5 W.H. Cases (S.D. Fla.),
10 Labor Cases (CCH) 63,033. See also Walling
v. Armbruster, 51 F. Supp. 166 (W.D. Ark.);
Joshua Hendy Corp. v. Mills, 169 F. 2d 898 (C.A.
9); St. Johns River Shipbuilding Co. v. Adams,
164 F. 2d 1012 S. (C.A. 5).
47 Fair Labor Standards Act, section 3(b).
48 United States v. Darby, 312 U.S. 100; Warren-Bradshaw Drilling Co. v. Hall, 371 U.S. 88;
Schulte Co. v. Gangi, 328 U.S. 108.
49 Schulte Co. v. Gangi, 328 U.S. 108; WarrenBradshaw Drilling Co. v. Hall, 417 U.S. 88. See
paragraph (d) of this section.
394
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Wage and Hour Division, Labor
§ 776.21
movement in commerce to points outside the State, questions have been
raised as to whether work done on
goods may constitute production ‘‘for’’
commerce even though the goods do
not ultimately leave the State. As is
explained more fully in the paragraphs
following, there are certain situations
in which this may be true, either under
the principles above stated (see paragraph (c) of this section), or because it
appears that the goods are produced
‘‘for’’ commerce in the sense that they
are produced for use directly in the furtherance, within the particular State,
of the actual movement to, from, or
across such State or interstate or foreign commerce. (See paragraph (b) of
this section).
(b) Goods produced for direct furtherance of interstate movement. (1) The
Act’s definition of ‘‘commerce,’’ as has
been seen, describes a movement,
among the several States or between
any State and any outside place, of
trade,
commerce,
transportation,
transmission,
or
communication.’’
Whenever goods are produced ‘‘for’’
such movement, such goods are produced ‘‘for commerce,’’ whether or not
there is any expectation or reason to
anticipate that the particular goods
will leave the State. 50
(2) The courts have held that particular goods are produced ‘‘for’’ commerce when they are produced with a
view to their use, whether within or
without the State, in the direct furtherance of the movement of interstate
or foreign commerce. Thus, it is well
settled that ice is produced ‘‘for’’ commerce when it is produced for use by
interstate rail or motor carriers in the
refrigeration or cooling of the equipment in which the interstate traffic actually moves, even though the particular ice may melt before the equipment in which it is placed leaves the
State. 51 The goods (ice) produced for
50 Fleming v. Atlantic Co., 40 F. Supp. 654, affirmed in 131 F. 2d 518 (C.A. 5).
51 Hamlet Ice Co. v. Fleming, 127 F. 2d 165
(C.A. 4), certiorari denied 317 U.S. 634; Atlantic Co. v. Walling, 131 F. 2d 518 (C.A. 5); Chapman v. Home Ice Co.; 136 F. 2d 353 (C.A. 6) certiorari denied 320 U.S. 761; Southern United
Ice Co. v. Hendrix, 153 F. 2d 689 (C.A. 6); Hansen v. Salinas Valley Ice Co., 62 Cal. App. 357,
144 F. 2d 896.
such use ‘‘enter into the very means of
transportation by which the burdens of
traffic are borne.’’ 52 The same may be
said of electrical energy produced and
sold within a single State for such uses
as lighting and operating signals on
railroads and at airports to guide interstate traffic, lighting and operating
radio stations transmitting programs
interstate, and lighting and message
transmission of telephone and telegraph companies. 53 Similar principles
would apply to the production of fuel
or water for use in the operation of
railroads with which interstate and
foreign commerce is carried on; the
production of radio or television
scripts which provide the basis for programs transmitted interstate; the production of telephone and telegraph
poles for use in the necessary repair,
maintenance, or improvement of interstate communication systems; the production of crushed rock, ready-mixed
concrete, cross-ties, concrete culvert
pipe, bridge timbers, and similar items
for use in the necessary repair, maintenance, or improvement of railroad
roadbeds and bridges which serve as
the instrumentalities over which interstate traffic moves.
Similarly, in the case of highways, pipe
lines, and waterways which serve as instrumentalities of interstate and foreign commerce, the production of
goods for use in the direct furtherance
of the movement of commerce thereon
would be the production of goods ‘‘for
commerce.’’ The production of materials 54 for use in the necessary maintenance, repair, or improvement of the
instrumentality so that the flow of
commerce will not be impeded or impaired is an example of this. Thus,
stone or ready-mixed concrete, crushed
52 Hamlet Ice Co. v. Fleming, 127 F. 2d 165
(C.A. 4).
53 Lewis v. Florida Power & Light Co., 154 F.
2d 751 (C.A. 5); see also Walling v. Connecticut
Co., 154 F. 2d 552 (C.A. 2).
54 Walling v. Staffen, 5 W.H. Cases 1002 (W.D.
N.Y.), 11 Labor Cases (CCH) par. 63, 102;
McCombs v. Carter, 8 W.H. Cases 498 (E.D.
Va.), 16 Labor Cases (CCH) par. 64, 964.
Contra, McComb v. Trimmer, 85 F. Supp. 565
(D. N.J.). Cf. Engebretson v. Albrecht, 150 F. 2d
602 (C.A. 7).
395
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§ 776.21
29 CFR Ch. V (7–1–19 Edition)
rock, sand, gravel, and similar materials for bridges or dams; like materials or bituminous aggregate or oil for
road surfacing; concrete or galvanized
pipe for road drainage; bridge planks
and timbers; paving blocks; and other
such materials may be produced ‘‘for’’
commerce even though they do not
leave the State.
(3) This does not, however, necessarily mean that the production of
such materials within a State is always
production ‘‘for’’ commerce when the
materials are used in the same State
for the maintenance, repair, or improvement of highways or other instrumentalities carrying interstate traffic.
In determining whether the production
is actually ‘‘for’’ commerce in a situation where there is no reason to believe
that the goods will leave the State, a
practical judgment is required. Some
illustrations may be helpful.
On the one hand, there are situations
where there is little room for doubt
that the goods are produced ‘‘for’’ commerce in the sense that the goods are
intended for the direct furtherance of
the movement of commerce over the
instrumentalities of transportation
and communication. The most obvious
illustration is that of special-purpose
goods such as cross-ties for railroads,
telephone or telegraph poles, or concrete pipe designed for highway use.
Another illustration is sand and gravel
for highway repair or reconstruction
which is produced from a borrow pit
opened expressly for that purpose, or
from the pits of an employer whose
business operations are conducted
wholly or in the substantial part with
the intent or purpose of filling highway
contracts. (The fact that a substantial
portion of the employer’s gross income
is derived from supplying such materials for highway repair and reconstruction would be one indication that
a substantial part of his business is directed to the purpose of meeting such
needs of commerce.)
On the other hand, there are situations
where materials or other goods used in
maintaining,
repairing,
or
reconstructing instrumentalities of commerce are produced and supplied by
local
materialmen
under
circumstances which may require the conclusion that the goods are not produced
‘‘for’’ commerce. Thus, a materialman
may be engaged in an essentially local
business serving the usual miscellany
of local customers, without any substantial part of such business being directed to meeting the needs of highway
repair or reconstruction. If, on occasion, he happens to produce or supply
some materials which are used within
the State to meet such highway needs,
and he does so as a mere incident of his
essentially local business, the Administrator will not consider that his employees handling or working on such
materials are producing goods ‘‘for’’
commerce. This is, rather, a typically
local activity of the kind the Act was
not intended to cover. The same may
be said of the production of ice by an
essentially local ice plant where the
only basis of coverage is the delivery of
ice for the water cooler in the community railroad station. The employees
producing ice in the ice plant for local
use would not by reason of this be covered as engaged in the production of
goods ‘‘for’’ commerce.
Other illustrations might be given but
these should emphasize the essential
distinction which must be kept in
mind. Borderline cases will, of course,
arise. In each such case the facts must
be examined and a determination made
as to whether or not the goods may
fairly be viewed as produced ‘‘for’’ use
in the direct furtherance of the movement of interstate or foreign commerce, and thus ‘‘for’’ commerce.
(c) Controlling effect of facts at time
‘‘production’’ occurs. (1) Whether employees are engaged in the production
of goods ‘‘for’’ commerce depends upon
circumstances as they exist at the time
the goods are being produced, not upon
some subsequent event. Thus, if a lumber manufacturer produces lumber to
fill an out-of-State order, the employees working on the lumber are engaged
in the production of goods for commerce and within the coverage of the
Act’s wage and hours provisions, even
though the lumber does not ultimately
leave the State because it is destroyed
by fire before it can be shipped. Similarly, employees drilling for oil which
the employer expects to leave the
State either as crude oil or refined
products are engaged in the production
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Wage and Hour Division, Labor
§ 776.22
of goods for commerce while the drilling operations are going on and are entitled to be paid on that basis notwithstanding some of the wells drilled may
eventually prove to be dry holes. 55
(2) On the other hand, if the lumber
manufacturer first mentioned produces
lumber to fill the order of a local contractor in the expectation that it will
be used to build a schoolhouse within
the State, the employees producing the
lumber are not engaged in the production of goods ‘‘for’’ commerce and are
not covered by the Act. This would remain true notwithstanding the contractor subsequently goes bankrupt
and the lumber is sold to a purchaser
who moves it to another State; the status of the employees for purposes of
coverage cannot in this situation, any
more than in the others, be retroactively changed by the subsequent
event.
(d) Goods disposed of locally to persons
who place them in commerce. It is important to remember that if, at the time
when employees engage in activities
which constitute ‘‘production of goods’’
within the meaning of the Act, their
employer intends, hopes, expects, or
has reason to believe that such goods
will be taken or sent out of the State
by a subsequent purchaser or other person into whose possession the goods
will come, this is sufficient to establish
that such employees are engaged in the
production of such goods ‘‘for’’ commerce and covered by the Act. Whether
the producer passes title to the goods
to another within the State is immaterial. 56 The goods are produced ‘‘for’’
commerce in such a situation whether
they are purchased f.o.b. the factory
and are taken out of the State by the
purchaser, or whether they are sold
within the State to a wholesaler or retailer or manufacturer or processor
who in turn sells them, either in the
same form or after further processing,
in interstate or foreign commerce. The
same is true where the goods worked
on by the producer’s employees are not
owned by the producer and are re55 Culver v. Bell & Loffland, 146 F. 2d 29 (C.A.
9); see also Warren-Bradshaw Drilling Co. v.
Hall, 317 U.S. 88.
56 Hamlet Ice Co. v. Fleming, 127 F. 2d 165
(C.A. 4). certiorari denied 317 U.S. 634; Bracey
v. Luray, 138 F. 2d 8 (C.A. 4).
turned, after the work is done, to the
possession of the owner who takes or
sends them out of the State. 57 Similarly, employees are engaged in the
production of goods ‘‘for’’ commerce
when they are manufacturing, handling, working on, or otherwise engaging in the production of boxes, barrels,
bagging, crates, bottles, or other containers, wrapping or packing material
which their employer has reason to believe will be used to hold the goods of
other producers which will be sent out
of the State in such containers or
wrappings. It makes no difference that
such other producers are located in the
same State and that the containers are
sold and delivered to them there. 58
Subpart B—Construction Industry
SOURCE: 21 FR 5439, July 20, 1956, unless
otherwise noted.
§ 776.22 Subpart limited to individual
employee coverage.
This subpart, which was adopted before the amendments of 1961 and 1966 to
the Fair Labor Standards Act, is limited to discussion of the traditional
general coverage of employees employed in activities of the character
performed in the construction industry, which depends on whether such
employees are, individually, ‘‘engaged
in commerce or in the production of
goods for commerce’’ within the meaning of the Act. The 1961 and 1966
57 Schulte Co. v. Gangi, 328 U.S. 108; WarrenBradshaw Drilling Co. v. Hall, 317 U.S. 88;
Walling v. Kerr, 47 F. Supp. 852 (E.D. Pa.).
58 Enterprise Box Co. v. Fleming, 125 F. 2d 897
(C.A. 5), certiorari denied 316 U.S. 704; Dize v.
Maddrix, 144 F. 2d 584 (C.A. 4), affirmed 324
U.S. 697; Walling v. Burch, 5 W. H. Cases 323
(S.D. Ga.); 9 Labor Cases (CCH) par. 62, 613;
Fleming v. Schiff, 1 W.H. Cases 893 (D. Colo.),
5 Labor Cases (CCH) par. 60, 864.
It should be noted that where empty containers are purchased, loaded, or transported
within a single State as a part of their movement, as empty containers, out of the State,
an employee engaged in such purchasing,
loading, or transporting operations is covered by the Act as engaged ‘‘in commerce.’’
Atlantic Co. v. Weaver, 150 F. 2d 843 (C.A. 4);
Klotz v. Ippolito, 40 F. Supp. 422 (S.D. Tex.);
Orange Crush Bottling Co. v. Tuggle, 70 Ga.
App. 144, 27 S.E. 2d 769.
397
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§ 776.22a
29 CFR Ch. V (7–1–19 Edition)
amendments broadened coverage by extending it to other employees of the
construction industry on an ‘‘enterprise’’ basis, as explained in § 776.22a.
Employees covered under the principles discussed in this subpart remain
covered under the Act as amended;
however, an employee who would not
be individually covered under the principles discussed in this subpart may
now be subject to the Act if he is employed in an enterprise engaged in covered construction as defined in the
amendments.
[35 FR 5543, Apr. 3, 1970]
ENTERPRISE COVERAGE
have been moved in or produced for commerce by any person, and which:
*
*
*
*
Questions of ‘‘enterprise coverage’’ in
the construction industry which are
not answered in published statements
of the Department of Labor may be addressed to the Administrator of the
Wage and Hour Division, Department
of Labor, Washington, DC 20210, or assistance may be requested from any of
the Regional or District Offices of the
Division.
[35 FR 5543, Apr. 3, 1970]
§ 776.22a Extension of coverage to employment in certain enterprises.
INDIVIDUAL EMPLOYEE COVERAGE IN THE
CONSTRUCTION INDUSTRY
Whether or not individually covered
on the traditional basis, an employee is
covered on an ‘‘enterprise’’ basis by the
Act as amended in 1961 and 1966 if he is
‘‘employed in an enterprise engaged in
commerce or in the production of goods
for commerce’’ as defined in section 3
(r), (s), of the Act. ‘‘Enterprise’’ is defined generally by section 3(r) to mean
‘‘the related activities performed (either through unified operation or common control) by any person or persons
for a common business purpose, and includes all such activities whether performed in one or more establishments
or by one or more corporate or other
organizational units.’’ If an ‘‘enterprise’’ as thus defined is an ‘‘enterprise
engaged in commerce or in the production of goods for commerce’’ as defined
and described in section 3(s) of the Act
as amended, any employee employed in
such enterprise is subject to the provisions of the Act to the same extent as
if he were individually engaged ‘‘in
commerce or in the production of goods
for commerce’’, unless specifically exempt, section 3(s), insofar as pertinent
to the construction industry, reads as
follows:
§ 776.22b Guiding principles.
(a) Scope of bulletin and general coverage statement. This subpart contains
the opinions of the Administrator of
the Wage and Hour Division with respect to the applicability of the Fair
Labor Standards Act to employees engaged in the building and construction
industry. The provisions of the Act expressly make its application dependent
on the character of an employee’s activities, that is, on whether he is engaged ‘‘in commerce’’ or in the ‘‘production of goods for commerce including any closely related process or occupation directly essential to such production.’’ Under either of the two prescribed areas of covered work, coverage
cannot be determined by a rigid or
technical formula. The United States
Supreme Court has said of both phases
that coverage must be given ‘‘a liberal
construction’’ determined ‘‘by practical considerations, not by technical
conceptions.’’ 1 The Court has specifically rejected the technical ‘‘new construction’’ concept, as a reliable test
for determining coverage under this
Act. 2
Enterprise engaged in commerce or in the
production of goods for commerce means an
enterprise which has employees engaged in
commerce or in the production of goods for
commerce, including employees handling,
selling, or otherwise working on goods that
So far as construction work specifically is concerned, the courts have cast
the relevant tests for determining the
1 Mitchell v. Vollmer & Co., 349 U.S. 427;
Kirschbaum Co. v. Walling, 316 U.S. 517; Alstate
Construction Co. v. Durkin, 345 U.S. 13.
2 Mitchell v. Vollmer & Co., ante.
398
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*
(3) Is engaged in the business of construction or reconstruction, or both.
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Wage and Hour Division, Labor
§ 776.23
scope of ‘‘in commerce’’ coverage in
substantially similar language as they
have used in construing the ‘‘production’’ phase of coverage. Thus the Act
applies to construction work which is
so intimately related to the functioning of interstate commerce as to
be, in practical effect, a part of it, as
well as to construction work which has
a close and immediate tie with the
process of production. 3
(b) Engagement in commerce. The
United States Supreme Court has held
that the ‘‘in commerce’’ phase of coverage extends ‘‘throughout the farthest
reaches of the channels of interstate
commerce,’’ and covers not only construction work physically in or on a
channel or instrumentality of interstate commerce but also construction
work ‘‘so directly and vitally related to
the functioning of an instrumentality
or facility of interstate commerce as to
be, in practical effect, a part of it,
rather than isolated, local activity.’’ 4
(c) Production of goods for commerce.
The ‘‘production’’ phase of coverage includes ‘‘any closely related process or
occupation directly essential’’ to production of goods for commerce. An employee need not be engaged in activities indispensable to production in
order to be covered. Conversely, even
indispensable or essential activities, in
the sense of being included in the long
line of causation which ultimately results in production of finished goods,
may not be covered. The work must be
both closely related and directly essential to the covered production. 5
(d) State and national authority. Consideration must also be given to the relationship between state and national
authority because Congress intended
‘‘to leave local business to the protection of the State.’’ 6 Activities which
superficially appear to be local in character, when isolated, may in fact have
3 Mitchell v. Vollmer & Co., ante; Cf. Armour
& Co. v. Wantock, 323 U.S. 126.
4 Mitchell v. Vollmer & Co., ante; Walling v.
Jacksonville Paper Co., 317 U.S. 564; Overstreet
v. North Shore Corp., 318 U.S. 125.
5 Armour & Co. v. Wantock, ante; Kirschbaum
v. Walling, 316 U.S. 417; Cf. 10 E. 40th St. Co.
v. Callus, 325 U.S. 578.
6 Walling v. Jacksonville Paper Co., ante;
Kirschbaum v. Walling, ante; Phillips Co. v.
Walling, 324 U.S. 490, 497.
the required close or intimate relationship with the area of commerce to
which the Act applies. The courts have
stated that a project should be viewed
as a whole in a realistic way and not
broken down into its various phases so
as to defeat the purposes of the Act. 7
(e) Interpretations. In his task of distinguishing covered from non-covered
employees the Administrator will be
guided by authoritative court decisions. To the extent that prior administrative rulings, interpretations, practices and enforcement policies relating
to employees in the construction industry are inconsistent or in conflict
with the principles stated in this subpart, they are hereby rescinded and
withdrawn.
[21 FR 5439, July 20, 1956. Redesignated at 35
FR 5543, Apr. 3, 1970]
§ 776.23 Employment in the construction industry.
(a) In general. The same principles for
determining coverage under the Fair
Labor Standards Act generally apply
to employees in the building and construction industry. As in other situations, it is the employee’s activities
rather than the employer’s business
which is the important consideration,
and it is immaterial if the employer is
an independent contractor who performs the construction work for or on
behalf of a firm which is engaged in
interstate commerce or in the production of goods for such commerce. 8
(b) On both covered and non-covered
work. If the employee is engaged in
both covered and non-covered work
during the workweek he is entitled to
the benefits of the Act for the entire
7 Walling v. Jacksonville Paper Co., ante;
Bennett v. V. P. Loftis Co., 167 F. (2d) 286
(C.A.4); Tobin v. Pennington-Winter Const. Co.,
198 F. (2d) 334 (C.A.10), certiorari denied 345
U.S. 915; See General Coverage Bulletin,
§§ 776.19 (a), (b), and 776.21(b).
8 Mitchell v. Joyce Agency, 348 U.S. 945, affirming 110 F. Supp. 918; Fleming v. Sondeck,
132 F. (2d) 77 (C.A. 5), certiorari denied 318
U.S. 772; Kirschbaum v. Walling, ante; Walling
v. McCrady Construction Co., 156 F. (2d) 932.
certiorari denied 329 U.S. 785; Mitchell v.
Brown Engineering Co., 224 F. (2d) 359 (C.A. 8),
certiorari denied 350 U.S. 875; Chambers Construction Co. and L. H. Chambers v. Mitchell,
decided June 5, 1965 (C.A. 8).
399
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§ 776.24
29 CFR Ch. V (7–1–19 Edition)
week regardless of the amount of covered activities which are involved. The
covered activities must, however, be
regular or recurring rather than isolated, sporadic or occasional. 9
(c) On covered construction projects.
All employees who are employed in
connection with construction work
which is closely or intimately related
to the functioning of existing instrumentalities and channels of interstate
commerce or facilities for the production of goods for such commerce are
within the scope of the Act. Closely or
intimately related construction work
includes the maintenance, repair, reconstruction, redesigning, improvement, replacement, enlargement or extension of a covered facility. 10 If the
construction project is subject to the
Act, all employees who participate in
the integrated effort are covered, including not only those who are engaged
in work at the site of the construction
such as mechanics, laborers, handymen, truckdrivers, watchmen, guards,
timekeepers, inspectors, checkers, surveyors, payroll workers, and repair
men, but also office, clerical, bookkeeping, auditing, promotional, drafting, engineering, custodial and stock
room employees. 11
(d)
On
non-covered
construction
projects. (1) A construction project
maybe purely local and, therefore, not
covered, but some individual employees may nonetheless be covered on
independent ground by reason of their
interstate activities. Under the principle that coverage depends upon the
particular activities of the employee
and not on the nature of the business of
the employer, individual employees engaged in interstate activities are covered even though their activities may
be performed in connection with a noncovered construction project. Thus, the
9 See General Coverage Bulletin, §§ 776.2 and
776.4
10 Walling v. McCrady Const. Co., 156 F. (2d)
932, certiorari denied 329 U.S. 785; Chambers
Construction Co. and L. H. Chambers v. Mitchell, decided June 5, 1956 (C.A. 8); Tobin v. Pennington-Winter Const. Co. ante; Mitchell v.
Vollmer & Co., ante.
11 Mitchell v. Brown Engineering Co., ante;
Chambers Construction Co. and L. H. Chambers
v. Mitchell, ante; Ritch v. Puget Sound Bridge
& Dredging Co., 156 F. (2d) 334 (C.A. 9).
Act is applicable to employees who are
regularly engaged in ordering or procuring materials and equipment from
outside the State or receiving, unloading, checking, watching or guarding
such goods while they are still in transit. For example, laborers on a noncovered construction project who regularly unload materials and equipment
from vehicles or railroad cars which
are transporting such articles from
other States are performing covered
work. 12
(2) Similarly, employees who regularly use instrumentalities of commerce, such as the telephone, telegraph
and mails for interstate communication are within the scope of the Act, as
are employees who are regularly engaged in preparing, handling, or otherwise working on goods which will be
sent to other States. This includes the
preparation of plans, orders, estimates,
accounts, reports and letters for interstate transmittal.
§ 776.24 Travel in connection with construction projects.
The Act also applies to employees
who regularly travel across State lines
in the performance of their duties, even
though the construction project itself
is not covered. 13 If an employee regularly transports persons, materials, or
equipment between jobs across State
lines, or to a covered project, even
within the State, as part of his duties
for the contractor, he would be covered. As in other situations, the Act
would not apply if crossing State lines
or transporting persons, materials or
equipment by the employee was isolated or sporadic rather than regular
and recurring. Also, ordinary home-towork travel, even across State lines, is
not covered.
12 Clyde v. Broderick, 144 F. (2d) 348 (C.A. 10);
Durnil v. J. E. Dunn Construction Co. 186 F
(2d) 27 (C.A. 8), Donahue v. George A. Fuller
Co., 104 F. Supp. 145; Cf. Mitchell v. Royal
Baking Co., 219 F. (2d) 532 (C.A. 5).
13 Reck v. Zarmacay, 264 App. Div. 520, 36
N.Y.S. (2d) 394; Colbeck v. Dairyland Creamery
Co., 17 N.W. (2d) 262 (S. Ct. S.D.).
400
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§ 776.27
§ 776.25 Regular and recurring activities as basis of coverage.
Regular and recurring may mean a
very small amount and is not to be determined by volume or percentages.
Coverage depends on the character
rather than the volume of the employee’s activities. For example, if an employee in the course of his duties regularly engages in covered work even
though the covered work constitutes
only a small part of his duties, he
would be covered in any week when he
performs such covered work. 14
§ 776.26 Relationship of the construction work to the covered facility.
Unless the construction work is
physically or functionally integrated
or closely identified with an existing
covered facility it is not regarded as
covered construction because it is not
closely enough related to or integrated
with the production of goods for commerce or the engagement in commerce.
For this reason the erection, maintenance or repair of dwellings, apartments, hotels, churches and schools are
not covered projects. 15 Similarly the
construction of a separate, wholly new,
factory building, not constructed as an
integral part or as an improvement of
an existing covered production plant, is
not covered (Cf. § 776.27(c)). Coverage of
any construction work, whether new or
repair work, depends upon how closely
integrated it is with, and how essential
it is to the functioning of, existing covered facilities. Neither the mere fact
that the construction is ‘‘new construction’’ nor the fact that it is physically separated from an existing covered plant, is determinative. Moreover,
the court decisions make it clear that
the construction project itself need not
be actually employed in commerce or
in the production of goods for commerce during the time of its construction in order to be covered. 16 Such fac14 Walling v. Jacksonville Paper Co., ante;
Mabee v. White Plains Publishing Co., 327 U.S.
178.
15 Cf. § 776.18(b).
16 Mitchell v. Vollmer, ante; Bennett v. V. P.
Loftis Co., ante; Mitchell v. Chambers Const.
Co., 214 F. (2d) 515 (C.A. 10); Walling v.
McCrady Const. Co., ante; Tobin v. Pennington-Winter Const. Co., 198 F. (2d) 334 (C.A.
5), certiorari denied, 345 U.S. 915.
tors may be considered in determining
whether as a practical matter the work
is directly and vitally related to the
functioning of the covered facility but
would not be decisive.
§ 776.27 Construction which is related
to covered production.
(a) Existing production establishments.
(1) Covered production facilities within
the concept of the Act include mines,
oil wells, banks, manufacturing, packing and processing plants, filtration,
sewage treatment, electric power and
water plants, shipyards, warehouses in
which goods are broken down, packed
or handled preparatory to being sent in
interstate commerce, and similar establishments.
(2) The repair or maintenance of a
covered production unit is essential for
its continued operation and has a close
and immediate tie with the production
of goods for commerce. 17 The Act is
also applicable to other construction
which is an integral part of a covered
production unit, such as the replacement, enlargement, reconstruction, extension or other improvement of the
premises, the buildings, the machinery,
tools and dies and other equipment.
Functionally such work is like maintenance and repair and is necessary for
the continued, efficient and effective
operation of the facility as a unit. Thus
the construction of new appurtenances
of a covered production establishment
such as parking aprons, access roads,
railroad spurs, drainage ditches, storm,
waste and sanitary sewers or adjacent
integrated buildings is subject to the
Act. Similarly, the Act applies to the
installation of telephone, electric, gas
and water lines, machinery and other
equipment on the premises of such a facility.
(3) On the other hand, the production
and furnishings, within the State, of
construction materials, such as sand,
gravel, brick and other construction
materials produced for general local
use, is not covered even if the producer
also supplies such materials to construction companies which use them
within the State in the repair, maintenance or improvement of facilities for
17 Kirschbaum Co. v. Walling, ante; Walling
v. McCrady Const. Co., ante.
401
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§ 776.27
29 CFR Ch. V (7–1–19 Edition)
the production of goods for commerce.
Employees of the materialman in such
a situation would not have such a close
and immediate tie to the production of
goods for commerce as to be considered
‘‘closely related’’ and ‘‘directly essential’’ to such production. 18
(b) Utilities which serve production establishments. The Act applies to employees of public utilities which furnish gas, electricity, water or fuel to
firms engaged within the same State in
manufacturing, processing, producing,
or mining goods for commerce. 19 Construction work performed upon the
plant and facilities of such a utility is
covered as in the case of any other covered production establishment. 20 The
extension of the lines or other facilities of a covered utility for the first
time to the premises of an establishment which produces goods for commerce would be subject to the Act, because such extension is simply an improvement or enlargement of an existing covered utility. 21 Furthermore, the
maintenance or repair of the wires,
pipes, or other conduits of a covered
utility which serves business and manufacturing as well as residential areas
would also be within the Act. On the
other hand, extension or repair of lines
or other facilities serving only residential areas would not be covered unless
the electricity, gas, fuel, or water
comes from out of the State.
(c) New construction which is not integrated with existing production facilities.
(1) Construction of a new factory building, even though its use for interstate
production upon completion may be
contemplated, will not ordinarily be
18 See
General
Coverage
Bulletin,
§ 776.19(b)(3); but see § 776.19 (b) (1), (2) and (3);
on coverage of furnishing materials ‘‘specially designed’’, or meeting particular specifications, for use in production of particular
kinds of goods for commerce; and paragraph
(d) of this section, on coverage of producing
and furnishing materials for use in construction work on instrumentalities of commerce.
19 House Manager’s Statement, 1949 Amendments.
20 See decisions cited in footnotes 10 and 11,
of this subpart.
21 Meeker Cooperative Light & Power Ass’n v.
Phillips, 158 F. (2d) 698 (C.A. 8); Cf. New Mexico
Public Service Co. v. Engel, 145 F. (2d) 636 (C.A.
10); Lewis v. Florida Power & Light Co., 154 F.
(2d) 75 (C.A. 5).
considered covered. However, if the
new building is designed as a replacement of or an addition or an improvement to, an existing interstate production facility, its construction will be
considered subject to the Act.
(2) If the new building, though not
physically attached to an existing
plant which produces goods for commerce, is designed to be an integral
part of the improved, expanded or enlarged plant, the construction, like
maintenance and repair, it would be
subject to the Act. 22
(d) Production of materials for use in
construction work on interstate instrumentalities. (1) The Act applies to employees who are engaged, at the job
site or away from it, in the production
of goods to be used within the State for
the maintenance, repair, extension, enlargement, improvement, replacement
or reconstruction of an instrumentality of interstate commerce. The
goods need not go out of the State
since the Act applies to the production
of goods ‘‘for’’ commerce, including for
use in commerce, and is not limited to
‘‘production of goods for transportation in commerce,’’ that is, to be
sent across State lines. 23
(2) The Act would also apply to the
production of such items as electricity,
fuel or water, for use in the operation
of railroads or other instrumentalities
of commerce. 24 Therefore, as in the
case of other production units, the
maintenance, repair or other improvement of the premises or buildings or
the appurtenances, including the machinery, tools and dies and equipment,
of the facilities which are used to
produce such goods, are subject to the
Act.
(3) Coverage also extends to employees who produce sand, gravel, asphalt,
cement, crushed rock, railroad ties,
pipes, conduits, wires, concrete pilings
and other materials which are to be
used in the construction of instrumentalities which serve as the means for
22 Walling
v. McCrady Const. Co., ante.
Construction Co. v. Durkin, 345 U.S.
13; Tobin v. Johnson, 198 F. (2d) 130 (C.A. 8);
Mitchell v. Emulsified Asphalt Products Co., 222
F. (2) 913 (C.A. 6).
24 Sections 776.19(b)(2) and 776.21. See also
paragraph (b) of this section.
23 Alstate
402
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Wage and Hour Division, Labor
§ 776.29
the interstate movement of goods or
persons.
(4) This does not mean, however, that
in every case where employees produce
such materials which are used within
the State in the maintenance, repair,
or reconstruction of an instrumentality of commerce, the production of
such materials is necessarily considered as production ‘‘for’’ commerce. A
material supply company may be engaged in an independent business which
is essentially local in nature, selling
its materials to the usual miscellany of
local customers without any particular
intent or purpose of supplying materials for the maintenance, repair, or reconstruction of instrumentalities of
commerce, and without any substantial portion of its business being directed to such specific uses. Employees
of such an ‘‘essentially local business’’
are not covered by the Act merely because as an incident to its essentially
local business, the company, on occasion, happens to produce or supply
some materials which are used within
the State to meet the needs of instrumentalities of commerce. 25
§ 776.28 Covered
ties.
preparatory
activi-
(a) Before production begins. (1) The
United States Supreme Court has held
that the Act is applicable to employees
of a company which was engaged in
preliminary oil well drilling, even
though the holes were drilled to a specified depth which was short of where
the oil was expected to be found. 26 The
Act would also apply to drilling operations even though no oil was discovered. 27 Laborers employed in erecting
drilling rigs would also be covered. 28
Other preparatory work before drilling
begins in an oil field, such as staking
oil claims, surveying, clearing the
land, assembling materials and equipment, erecting sheds, derricks or dikes
would also be within the scope of the
25 See §§ 776.19 (a) and (b) and 776.21(b)(3).
See also cases cited in footnote 22 of this
subpart.
26 Warren-Bradshaw Drilling Co. v. Hall, 317
U.S. 8.
27 Culver v. Bell & Loffland, 146 F. (2d) 20.
28 Devine v. Levy, 39 F. Supp. 44.
Act. 29 Preliminary work such as the
foregoing has the requisite close and
immediate tie with the production of
goods for commerce to be within the
coverage of the Act.
(2) Similarly, coverage extends to
employees engaged in the installation
of machinery to be used in covered production in a new factory building, even
though the construction of the building
itself may not have been subject to the
Act. Such installation is considered to
be a preliminary production activity
rather than simply part of the construction of the building.
(3) If the construction project is subject to the Act, preliminary activities,
such as surveying, clearing, draining
and leveling the land, erecting necessary buildings to house materials and
equipment, or the demolition of structures in order to begin building the
covered facility, are subject to the
Act. 30
(b) Facilities used in aid of the covered
construction. The installation of facilities, and the repair and maintenance of
trucks, tools, machinery and other
equipment to be used by a contractor
in the furtherance of his covered construction work, are activities subject
to the Act.
§ 776.29 Instrumentalities and channels of interstate commerce.
(a) Typical examples. Instrumentalities and channels which serve as the
media for the movement of goods and
persons in interstate commerce or for
interstate
communications
include
railroads, highways, city streets; telephone, gas, electric and pipe line systems; radio and television broadcasting
facilities; rivers, canals and other waterways; airports; railroad, bus, truck
or steamship terminals; freight depots,
bridges, ferries, bays, harbors, docks,
wharves, piers; ships, vehicles and aircraft which are regularly used in interstate commerce. 31
(b) General character of an instrumentality of interstate commerce. (1) An instrumentality of interstate commerce
need not stretch across State lines but
29 Straughn v. Schlumberger Well Surveying
Corp., 72 F. Supp. 511.
30 Coverage of preparation of plans and designs is discussed in § 776.19(b) (2).
31 General coverage bulletin, § 776.11.
403
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§ 776.29
29 CFR Ch. V (7–1–19 Edition)
may operate within a particular State
as a link in a chain or system of conduits through which interstate commerce moves. 32 Obvious examples of
such facilities are railroad terminals,
airports which are components of a
system of air transportation, bridges
and canals. A facility may be used for
both interstate and intrastate commerce but when it is so used it is nonetheless an interstate instrumentality.
Such double use does not exclude construction employees from being engaged in commerce.
(2) The term instrumentality of
interstate commerce may refer to one
unit or the entire chain of facilities.
An instrumentality such as a railroad
constitutes a system or network of facilities by which the interstate movement of goods and persons is accomplished. Each segment of the network
is integrally connected with the whole
and must be viewed as part of the system as a whole, not as an isolated local
unit.
(3) A construction project which
changes the interstate system as a
whole, or any of its units, would have a
direct bearing on the flow of interstate
commerce throughout the network.
Thus, the new construction of an alternate route or an additional unit which
alters the system or any segment of it,
would have such a direct and vital relationship to the functioning of the instrumentality of interstate commerce
as to be, in practical effect, a part of
such commerce rather than isolated
local activity. For example, such construction as the maintenance, repair,
replacement, expansion, enlargement,
extension, reconstruction, redesigning,
or other improvement, of a railroad
system as a whole, or of any part of it,
would have a close and intimate relationship with the movement of goods
and persons across State lines. All such
construction, therefore, is subject to
the Act.
(4) The same would be true with respect to other systems of interstate
32 Mitchell v. Vollmer, ante; Bennett. v. V. P.
Loftis, 167 F. (2d) 286 (C.A. 4); Overstreet v.
North Shore Corp., ante; Rockton & Rion R. R.
v. Walling, 146 F. (2d) 111, certiorari denied
324 U.S. 880; National Labor Relations Board v.
Central Missouri Tel. Co., 115 F. (2d) 563 (C.A.
8).
transportation or communication such
as roads, waterways, airports, pipe, gas
and electric lines, and ship, bus, truck,
telephone and broadcasting facilities.
Consequently, construction projects for
lengthening, widening, deepening, relocating, redesigning, replacing and adding new, substitute or alternate facilities; shortening or straightening routes
or lines; providing cutoffs, tunnels,
trestles, causeways, overpasses, underpasses and bypasses are subject to the
Act. Furthermore, the fact that such
construction serves another purpose as
well as the improvement of the interstate facility, or that the improvement
to the interstate facility was incidental to other non-covered work,
would not exclude it from the Act’s
coverage. 33
(c) Examples of construction projects
which are subject to the Act. Coverage
extends to employees who are engaged
on such work as repairing or replacing
abutments and superstructures on a
washed out railroad bridge; 34 replacing
an old highway bridge with a new one
at a different location; 35 removing an
old railroad bridge and partially rebuilding a new one; repairing a railroad
roundhouse, signal tower, and storage
building; relocating portions of a county road; erecting new bridges with new
approaches in different locations from
the old ones; widening a city street; relocating, improving or extending interstate telephone facilities including the
addition of new conduits and new
trunk lines. 36 Also within the scope of
the Act are employees who are engaged
in the construction, maintenance and
repair of ships, barges and other vessels
used for interstate commerce, including those belonging to the Government, 37 and facilities used in the production and transmission of electric,
fuel, water, steam and other powers to
33 Tobin v. Pennington-Winter Const. Co.,
ante; Oklahoma v. Atkinson Co., 313 U.S. 508;
Cuascut v. Standard Dredging Corp., 94 F.
Supp. 197.
34 Pedersen v. J. F. Fitzgerald, 318 U.S. 740.
35 Bennett v. V. P. Loftis Co., 167 F. (2d) 286
(C.A. 4).
36 Walling v. McCrady Const. Co., ante.
37 Divins v. Hazeltine Electronics Corp., 163 F.
(2d) 100 (C.A. 2); Cf. Walling v. Haile Gold
Mines, Inc., 136 F. (2d) 102 (C.A. 4).
404
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§ 776.29
instrumentalities of interstate commerce. 38
(d) Construction of new facilities. (1) In
a case before the United States Supreme Court, the question was presented whether the Act applied to the
construction of a new canal at some
distance from the one then in use. The
new canal was to be an alternate route
for entering the Mississippi River and
would relieve traffic congestion in the
existing canal. The latter would continue in operation but could not be
widened because of its location in a
highly developed industrial section of
New Orleans. The Court in holding the
construction of the new canal to be
within the coverage of the Act stated
that the new construction was as intimately related to the improvement of
navigation on the Gulf Intercoastal
Waterway as dredging in the existing
canal would be and that the project
was ‘‘part of the redesigning of an existing facility of interstate commerce.’’ 39 Thus the construction of a
new facility in a network of instrumentalities of interstate commerce, in
order to serve the system, or to function as an alternate route, or to relieve
traffic congestion in another unit, or
to replace an outmoded facility, is subject to the Act.
(2) Similarly, the construction of a
new unit, such as a new airport which
is an addition to the entire interstate
system of air transportation although
not physically attached to any other
unit, would, as a practical matter, necessarily expand, promote and facilitate
the movement of interstate commerce
over the airway system, and consequently, would be subject to the Act.
In such a situation the interstate system, although composed of physically
separate local units, is, as a whole, the
instrumentality of commerce which is
improved. In most cases such an addition would also directly enhance, improve or replace some particular nearby unit in the interstate network. The
new addition would thus relieve traffic
38 New Mexico Public Service Co. v. Engel,
ante; Lewis v. Florida Light & Power Co., ante;
Mitchell v. Mercer Water Co., 208 F. (2d) 900
(C.A. 3); Mitchell v. Brown Engineering Co.,
ante.
39 Mitchell v. Vollmer & Co., ante; see also
Bennett v. V. P. Loftis, ante.
congestion and facilitate the interstate
movement of commerce over the existing instrumentality as a whole, as well
as at the particular nearby units. The
same principle would apply to highways, turnpikes and similar systems of
interstate facilities.
(3) In like manner, the reconstruction, extension or expansion of a small
unit in a system of interstate facilities,
such as the enlargement of a small airport which is regularly used for interstate travel or transportation, is covered, regardless of the relative sizes of
the original unit and the new one. The
construction in such situations facilitates and improves the interstate commerce served by, and is directly related
to the continued, efficient and effective
operation of, both the particular original unit and the interstate system as a
whole. Also, the construction of facilities such as hangars, repair shops and
the like at a covered airport, which are
‘‘directly and vitally related to the
functioning’’ of the instrumentality of
commerce, would be subject to the
Act. 40
(e) Construction on waterways. Courts
have consistently held that the engagement in interstate commerce includes
the maintenance, repair or improvement of navigable waterways even
when the construction work is performed on the non-navigable parts of
the instrumentality such as at the
headwaters and watersheds or in tributary streams. 41
Construction which improves rivers
and waterways serving as instrumentalities of interstate commerce includes dredging; the building, maintenance, repair, replacement, reconstruction, improvement, or enlargement of
dikes, revetments, levees, harbor facilities, retaining walls, channels, berths,
piers, wharves, canals, dams, reservoirs
and similar projects; also the removal
of debris and other impediments in the
40 Mitchell
v. Vollmer & Co., ante.
v. Pennington-Winter Const. Co.,
ante; Oklahoma v. Atkinson Co., ante; United
States v. Appalachian Power Co., 311 U.S. 426.
41 Tobin
405
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29 CFR Ch. V (7–1–19 Edition)
waterway and flood control work in
general. 42
The Act applies to construction work
which increases the navigability of a
waterway, protects it from floods or
otherwise improves or maintains its
use as an instrumentality of interstate
commerce. The courts have held that a
program for controlling floods is inseparably related to the stabilization
and maintenance of the navigable
channel of the river, since levees,
dams, dikes and like structures, which
hold back the waters in time of flood,
at the same time confine a more efficient body of water during other periods by increasing its velocity and
scouring and deepening its channels. 43
(1) Flood control work in non-navigable
parts of a waterway. Both Congress and
the courts have considered that watersheds and headwaters are keys to the
control of floods on navigable streams
and that the control over the non-navigable parts of a river is essential for
the prevention of overflows on the navigable portions. It is also well settled
that in order to control floods on a
navigable stream it is necessary to
take flood control measures on its tributaries.
(2) Basis of coverage. (i) The construction of a levee, dam or other improvement in any part of a river or its tributaries for the purpose of preventing
floods or aiding navigation must be
considered as an integral part of a single comprehensive project for improvement of the river system. Even though
a particular levee or dike, by itself,
may not effect an improvement, the
courts have made it clear that the
combined effect of a chain of such
structures serves as the basis for determining coverage. The construction of a
particular river structure may, therefore, be subject to the Act simply because it is part of a comprehensive system of structures, whose combined effect will achieve the improvement of
the navigable channel. Thus, it has
42 Walling v. Patton-Tulley Transportation
Co., 134 F. (2d) 945 (C.A. 6); Ritch v. Puget
Sound Bridge & Dredging Co., 156 F. (2d) 334.
43 Tobin v. Pennington-Winter Const. Co.,
ante; Tobin v. Ramey, 206 F. (2d) 505 (C.A. 5)
certiorari denied, sub nom Hughes Construction Co. v. Secretary of Labor, 346 U.S. 925;
Jackson v. U.S., 230 U.S. 1.
been held that site clearance work in
the construction of a multiple-purpose
dam on a non-navigable stream is covered by the Act where the work is an
integral part of a comprehensive system for the control of floods and the
betterment of navigation on the Arkansas and Mississippi Rivers. 44 Similarly, the enlargement of a set-back
levee, located from two to six miles
from the banks of the Mississippi, was
held to be covered because it was part
of the Mississippi levee system even
though the set-back levee, when viewed
separately, was not directly related to
the functioning of the Mississippi as an
instrumentality of commerce. 45
(ii) The principle involved applies
also to other instrumentalities of
interstate commerce. As in the case of
covered waterway projects, individual
additions or improvements to other instrumentalities of interstate commerce
may for coverage purposes be considered as part of a whole program rather
than separately. The Act will apply to
the construction in such situations if
the unit, considered by itself or as part
of a larger program, promotes the efficient or effective operation of the instrumentality of interstate commerce.
(3) Construction of wharves, piers and
docks. The Act also applies to the construction of new piers, wharves, docks
and other facilities if they are integrated with the interstate commerce
functions of an existing harbor. Similarly, the new construction of such facilities in other locations along the waterway is subject to the Act if they are
regularly used by vessels carrying
goods or persons in interstate commerce.
(f) Highways, county roads and city
streets—(1) Typical examples. As a generic term highways includes bridges,
underpasses,
overpasses,
bypasses,
county roads, access roads, city streets
and alternate roads, draw bridges, toll
bridges, toll roads and turnpikes, but
does not include roads or parking facilities on privately owned land and
44 Tobin v. Pennington-Winter Const. Co.,
ante.
45 Tobin v. Ramey, 205 F. (2d) 606, rehearing
denied 206 F. (2d) 505 (C.A. 5) certiorari denied, sub nom Hughes Construction Co. v. Secretary of Labor, 346 U.S. 925.
406
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Wage and Hour Division, Labor
§ 776.29
which are not for use by the general
public for interstate traffic.
(2) Basis of coverage. The general rules
for determining the coverage of employees engaged in the construction of
other instrumentalities of interstate
commerce apply to highway construction work. The United States Supreme
Court has stated that in applying the
Act to highway construction as to
other coverage problems, practical
rather than technical constructions are
decisive. 46 After the Court remanded
the Overstreet case to the district
court, the latter held that the employees engaged in maintaining and repairing the facilities regularly used and
available for interstate commerce were
engaged in commerce, regardless of the
extent of the interstate traffic. 47 The
court recognized that although the
amount of the interstate commerce in
the Overstreet case was very small it
was regular and recurring and not occasional nor incidental. Thus, under
the authoritative decision a percentage
test is not regarded as a practical guide
for ascertaining whether a particular
facility is an instrumentality of interstate commerce. 48 Employees who are
engaged in the repair, maintenance, extension, enlargement, replacement, reconstruction, redesigning or other improvement of such a road are subject to
the Act. The fact that the road is
owned or controlled by the State or
Federal Government or by any subdivision thereof would not affect the applicability of the Act. The same would be
true if State or Federal funds were
used to finance the construction. It
should be noted, however, that if the
employees are actually employees of a
State, or a political subdivision thereof, they are excepted from coverage of
the Act under section 3(d).
(3) City streets. The construction, reconstruction or repair of a city street,
whether residential or not, which is
part of an interstate highway or which
directly connects with any interstate
highway is so closely related to the
interstate commerce moving on the existing highway as to be a part of it.
46 Overstreet
v. North Shore Corp., ante.
F. Supp. 503.
48 North Shore Corp. v. Barnett, 143 F. (2d)
172 (C.A. 5); Schmidt v. Peoples Telephone
Union of Maryville, Mo., 138 F. (2d) 13 (C.A. 8).
47 52
Construction of other streets, which
are not a part of a public road building
program and are constructed on private property as a part of a new residential development, will not be considered covered until further clarification from the courts.
(4) New highway construction. Although a number of appellate court decisions have held that the construction
of new highways is not within the coverage of the Act, these decisions relied
upon the technical ‘‘new construction’’
concept which the United States Supreme Court has subsequently held to
be inapplicable as the basis for determining coverage under this Act. 49
Under the principles now established
by that Court’s decision, which require
determination of coverage on the basis
of realistic, practical considerations,
the construction of new expressways
and highways that will connect with an
interstate highway system is so ‘‘related to the functioning of an instrumentality or facility of interstate commerce as to be, in practical effect, a
part of it, rather than isolated, local
activity.’’ 50 Such highways and expressways not only are so designed as
necessarily to become a part of or additions to an existing interstate highway
system, but their construction is plainly of a national rather than a local
character, as evidenced by the Federal
financial contribution to their construction. And neither the fact that
they are not dedicated to interstate
use during their construction, nor the
fact that they will constitute alternate
routes rather than replacement of existing road, constitute sufficient basis,
under the controlling court decisions,
for excluding them from the coverage
of the Act. 51 Accordingly, unless and
49 Compare Mitchell v. Vollmer, ante, with
Koepfie v. Garavaglia, 200 F. (2d) 191 (C.A. 6);
Moss v. Gillioz Const. Co., 206 F. (2d) 819 (C.A.
10); and Van Klaveren v. Killian House, 210 F.
(2d) 510 (C.A. 5). The Vollmer decision specifically rejected the applicability of the decision construing the Federal Employer’s Liability Act, on which the cited appellate
court decision relied.
50 Mitchell v. Vollmer, ante; Walling v. Jacksonville Paper Co., ante; and Overstreet v.
North Shore Corp., ante.
51 Mitchell v. Vollmer & Co., ante; Tobin v.
Pennington-Winter Const. Co., 198 F. (2d) 334,
Continued
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§ 776.30
29 CFR Ch. V (7–1–19 Edition)
until authoritative court decision in
the future hold otherwise, the construction of such new highways and expressways will be regarded as covered.
§ 776.30 Construction performed on
temporarily idle facilities.
The Act applies to work on a covered
interstate instrumentality or production facility even though performed
during periods of temporary non-use or
idleness. 52 The courts have held the
Act applicable to performance of construction work upon a covered facility
even though the use of the facility was
temporarily interrupted or discontinued. 53 It is equally clear that the repair or maintenance of a covered facility (including its machinery, tools,
dies, and other equipment) though performed during the inactive or dead season, is subject to the Acts. 54
PART 778—OVERTIME
COMPENSATION
Subpart A—General Considerations
Sec.
778.0 Introductory statement.
778.1 Purpose of interpretative bulletin.
778.2 Coverage and exemptions not discussed.
778.3 Interpretations made, continued, and
superseded by this part.
778.4 Reliance on interpretations.
778.5 Relation to other laws generally.
778.6 Effect of Davis-Bacon Act.
778.7 Effect of Service Contract Act of 1965.
Subpart B—The Overtime Pay
Requirements
PRINCIPLES FOR COMPUTING OVERTIME PAY
BASED ON THE ‘‘REGULAR RATE’’
778.107 General standard for overtime pay.
778.108 The ‘‘regular rate’’.
778.109 The regular rate is an hourly rate.
778.110 Hourly rate employee.
778.111 Pieceworker.
778.112 Day rates and job rates.
778.113 Salaried employees—general.
778.114 Fixed salary for fluctuating hours.
778.115 Employees working at two or more
rates.
778.116 Payments other than cash.
778.117 Commission payments—general.
778.118 Commission paid on a workweek
basis.
778.119 Deferred commission payments—
general rules.
778.120 Deferred commission payments not
identifiable as earned in particular workweeks.
778.121 Commission
payments—delayed
credits and debits.
778.122 Computation of overtime for commission employees on established basic
rate.
Subpart C—Payments That May Be
Excluded From the ‘‘Regular Rate’’
THE STATUTORY PROVISIONS
778.200 Provisions governing inclusion, exclusion, and crediting of particular payments.
EXTRA COMPENSATION PAID FOR OVERTIME
INTRODUCTORY
778.100
778.101 Maximum nonovertime hours.
778.102 Application of overtime provisions
generally.
778.103 The workweek as the basis for applying section 7(a).
778.104 Each workweek stands alone.
778.105 Determining the workweek.
778.106 Time of payment.
The maximum-hours provisions.
certiorari denied 345 U.S. 915; and Bennett v.
V. P. Loftis Co., 167 F. (2d) 286.
52 Walton v. Southern Package Corp., 320 U.S.
540; Slover v. Wathen & Co., 140 F. (2d) 258
(C.A. 4); Bodden v. McCormick Shipping Corp.,
188 F. (2d) 733; and Russell Co. v. McComb, 187
F. (2d) 524 (C.A. 5).
53 Pedersen v. J. F. Fitzgerald Construction
Co., ante; Bennett v. V. P. Loftis, ante;
Walling v. McCrady Const. Co., ante; and
Bodden v. McCormick Shipping Corp., 188 F.
(2d) 733.
54 Maneja v. Waialua Agricultural Co., 349
U.S. 254; Bowie v. Gonzalez, 117 F. (2d) 11;
Weaver v. Pittsburgh Steamship Co., 153 F. (2d)
597, certiorari denied 328 U.S. 858; Walling v.
Keensburg Steamship Co., 462 F. (2d) 405.
778.201 Overtime premiums—general.
778.202 Premium pay for hours in excess of a
daily or weekly standard.
778.203 Premium pay for work on Saturdays,
Sundays, and other ‘‘special days’’.
778.204 ‘‘Clock pattern’’ premium pay.
778.205 Premiums for weekend and holiday
work—example.
778.206 Premiums for work outside basic
workday or workweek—examples.
778.207 Other types of contract premium
pay distinguished.
BONUSES
778.208 Inclusion and exclusion of bonuses in
computing the ‘‘regular rate’’.
778.209 Method of inclusion of bonus in regular rate.
778.210 Percentage of total earnings as
bonus.
778.211 Discretionary bonuses.
408
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Wage and Hour Division, Labor
Pt. 778
778.212 Gifts, Christmas and special occasion bonuses.
778.213 Profit-sharing, thrift, and savings
plans.
778.214 Benefit plans; including profit-sharing plans or trusts providing similar benefits.
778.215 Conditions for exclusion of benefitplan contributions under section 7(e)(4).
PAYMENTS NOT FOR HOURS WORKED
778.216 The provisions of section 7(e)(2) of
the Act.
778.217 Reimbursement for expenses.
778.218 Pay for certain idle hours.
778.219 Pay for foregoing holidays and vacations.
778.220 ‘‘Show-up’’ or ‘‘reporting’’ pay.
778.221 ‘‘Call-back’’ pay.
778.222 Other payments similar to ‘‘callback’’ pay.
778.223 Pay for non-productive hours distinguished.
778.224 ‘‘Other similar payments’’.
TALENT FEES IN THE RADIO AND TELEVISION
INDUSTRY
778.225 Talent fees excludable under regulations.
Subpart D—Special Problems
INTRODUCTORY
778.300
Scope of subpart.
CHANGE IN THE BEGINNING OF THE WORKWEEK
778.301 Overlapping when change of workweek is made.
778.302 Computation of overtime due for
overlapping workweeks.
ADDITIONAL PAY FOR PAST PERIOD
778.303
Retroactive pay increases.
HOW DEDUCTIONS AFFECT THE REGULAR RATE
778.304 Amounts
deducted
from
cash
wages—general.
778.305 Computation where particular types
of deductions are made.
778.306 Salary reductions in short workweeks.
778.307 Disciplinary deductions.
LUMP SUM ATTRIBUTED TO OVERTIME
778.308 The overtime rate is an hourly rate.
778.309 Fixed sum for constant amount of
overtime.
778.310 Fixed sum for varying amounts of
overtime.
778.311 Flat rate for special job performed in
overtime hours.
‘‘TASK’’ BASIS OF PAYMENT
778.312 Pay for task without regard to actual hours.
778.313 Computing overtime pay under the
Act for employees compensated on task
basis.
778.314 Special situations.
EFFECT OF FAILURE TO COUNT OR PAY FOR
CERTAIN WORKING HOURS
778.315 Payment for all hours worked in
overtime workweek is required.
778.316 Agreements or practices in conflict
with statutory requirements are ineffective.
778.317 Agreements not to pay for certain
nonovertime hours.
778.318 Productive and nonproductive hours
of work.
EFFECT OF PAYING FOR BUT NOT COUNTING
CERTAIN HOURS
778.319 Paying for but not counting hours
worked.
778.320 Hours that would not be hours
worked if not paid for.
REDUCTION IN WORKWEEK SCHEDULE WITH NO
CHANGE IN PAY
778.321 Decrease in hours without decrease
in pay—general.
778.322 Reducing the fixed workweek for
which a salary is paid.
778.323 Effect if salary is for variable workweek.
778.324 Effect on hourly rate employees.
778.325 Effect on salary covering more than
40 hours’ pay.
778.326 Reduction of regular overtime workweek without reduction of take-home
pay.
778.327 Temporary or sporadic reduction in
schedule.
778.328 Plan for gradual permanent reduction in schedule.
778.329 Alternating workweeks of different
fixed lengths.
PRIZES AS BONUSES
778.330 Prizes or contest awards generally.
778.331 Awards for performance on the job.
778.332 Awards for activities not normally
part of employee’s job.
778.333 Suggestion system awards.
Subpart E—Exceptions From the Regular
Rate Principles
COMPUTING OVERTIME PAY ON AN
‘‘ESTABLISHED’’ RATE
778.400 The provisions of section 7(g)(3) of
the Act.
778.401 Regulations issued under section
7(g)(3).
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§ 778.0
29 CFR Ch. V (7–1–19 Edition)
GUARANTEED COMPENSATION WHICH INCLUDES
OVERTIME PAY
778.402 The statutory exception provided by
section 7(f) of the Act.
778.403 Constant pay for varying workweeks
including overtime is not permitted except as specified in section 7(f).
778.404 Purposes of exemption.
778.405 What types of employees are affected.
778.406 Nonovertime hours as well as overtime hours must be irregular if section
7(f) is to apply.
778.407 The nature of the section 7(f) contract.
778.408 The specified regular rate.
778.409 Provision for overtime pay.
778.410 The guaranty under section 7(f).
778.411 Sixty-hour limit on pay guaranteed
by contract.
778.412 Relationship between amount guaranteed and range of hours employee may
be expected to work.
778.413 Guaranty must be based on rates
specified in contract.
778.414 ‘‘Approval’’ of contracts under section 7(f).
COMPUTING OVERTIME PAY ON THE RATE APPLICABLE TO THE TYPE OF WORK PERFORMED
IN OVERTIME HOURS (SECS. 7(g)(1) AND (2))
778.415 The statutory provisions.
778.416 Purpose of provisions.
778.417 General requirements of section 7(g).
778.418 Pieceworkers.
778.419 Hourly workers employed at two or
more jobs.
778.420 Combined hourly rates and piece
rates.
778.421 Offset hour for hour.
Subpart F—Pay Plans Which Circumvent
the Act
DEVICES TO EVADE THE OVERTIME
REQUIREMENTS
778.500
778.501
Artificial regular rates.
The ‘‘split-day’’ plan.
PSEUDO-BONUSES
778.502 Artificially labeling part of the regular wages a ‘‘bonus’’.
778.503 Pseudo ‘‘percentage bonuses’’.
Subpart G—Miscellaneous
778.600 Veterans’ subsistence allowances.
778.601 Special overtime provisions available for hospital and residential care establishments under section 7(j).
778.602 Special overtime provisions under
section 7(b).
778.603 Special overtime provisions for certain employees receiving remedial education under section 7(q).
AUTHORITY: 52 Stat. 1060, as amended; 29
U.S.C. 201 et seq. Section 778.200 also issued
under Pub. L. 106–202, 114 Stat. 308 (29 U.S.C.
207(e) and (h)).
SOURCE: 33 FR 986, Jan. 26, 1968, unless otherwise noted.
Subpart A—General
Considerations
§ 778.0 Introductory statement.
The Fair Labor Standards Act, as
amended, hereinafter referred to as the
Act, is a Federal statute of general application which establishes minimum
wage, overtime pay, child labor, and
equal pay requirements that apply as
provided in the Act. All employees
whose employment has the relationship to interstate or foreign commerce
which the Act specifies are subject to
the prescribed labor standards unless
specifically exempted from them. Employers having such employees are required to comply with the Act’s provisions in this regard unless relieved
therefrom by some exemption in the
Act. Such employers are also required
to comply with specified recordkeeping
requirements contained in part 516 of
this chapter. The law authorizes the
Department of Labor to investigate for
compliance and, in the event of violations, to supervise the payment of unpaid wages or unpaid overtime compensation owing to any employee. The
law also provides for enforcement in
the courts.
§ 778.1 Purpose of interpretative bulletin.
This part 778 constitutes the official
interpretation of the Department of
Labor with respect to the meaning and
application of the maximum hours and
overtime pay requirements contained
in section 7 of the Act. It is the purpose
of this bulletin to make available in
one place the interpretations of these
provisions which will guide the Secretary of Labor and the Administrator
in the performance of their duties
under the Act unless and until they are
otherwise directed by authoritative decisions of the courts or conclude, upon
reexamination of an interpretation,
that it is incorrect. These official interpretations are issued by the Administrator on the advice of the Solicitor
410
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Wage and Hour Division, Labor
§ 778.6
of Labor, as authorized by the Secretary (Reorg. Pl. 6 of 1950, 64 Stat.
1263; Gen. Ord. 45A, May 24, 1950, 15 FR
3290).
§ 778.2 Coverage and exemptions not
discussed.
This part 778 does not deal with the
general coverage of the Act or various
specific exemptions provided in the
statute, under which certain employees
within the general coverage of the
wage and hours provisions are wholly
or partially excluded from the protection of the Act’s minimum-wage and
overtime-pay requirements. Some of
these exemptions are self-executing;
others call for definitions or other action by the Administrator. Regulations
and interpretations relating to general
coverage and specific exemptions may
be found in other parts of this chapter.
§ 778.3 Interpretations made, continued, and superseded by this part.
On and after publication of this part
in the FEDERAL REGISTER, the interpretations contained therein shall be in effect and shall remain in effect until
they are modified, rescinded or withdrawn. This part supersedes and replaces the interpretations previously
published in the FEDERAL REGISTER
and Code of Federal Regulations as
part 778 of this chapter. Prior opinions,
rulings and interpretations and prior
enforcement policies which are not inconsistent with the interpretations in
this part or with the Fair Labor Standards Act as amended are continued in
effect; all other opinions, rulings, interpretations, and enforcement policies
on the subjects discussed in the interpretations in this part are rescinded
and withdrawn. Questions on matters
not fully covered by this part may be
addressed to the Administrator of the
Wage and Hour Division, U.S. Department of Labor, Washington, DC 20210,
or to any Regional Office of the Division.
[46 FR 7309, Jan. 23, 1981]
§ 778.4 Reliance on interpretations.
The interpretations of the law contained in this part 778 are official interpretations which may be relied upon as
provided in section 10 of the Portal-toPortal Act of 1947 (61 Stat. 84).
§ 778.5 Relation to other laws generally.
Various Federal, State, and local
laws require the payment of minimum
hourly, daily or weekly wages different
from the minimum set forth in the
Fair Labor Standards Act, and the payment of overtime compensation computed on bases different from those set
forth in the Fair Labor Standards Act.
Where such legislation is applicable
and does not contravene the requirements of the Fair Labor Standards Act,
nothing in the act, the regulations or
the interpretations announced by the
Administrator should be taken to override or nullify the provisions of these
laws. Compliance with other applicable
legislation does not excuse noncompliance with the Fair Labor Standards
Act. Where a higher minimum wage
than that set in the Fair Labor Standards Act is applicable to an employee
by virtue of such other legislation, the
regular rate of the employee, as the
term is used in the Fair Labor Standards Act, cannot be lower than such applicable minimum, for the words ‘‘regular rate at which he is employed’’ as
used in section 7 must be construed to
mean the regular rate at which he is
lawfully employed.
§ 778.6 Effect of Davis-Bacon Act.
Section 1 of the Davis-Bacon Act (46
Stat. 1494, as amended; 40 U.S.C. 276a)
provides for the inclusion of certain
fringe benefits in the prevailing wages
that are predetermined by the Secretary of Labor, under that Act and related statutes, as minimum wages for
laborers and mechanics employed by
contractors and subcontractors performing construction activity on Federal and federally assisted projects. Laborers and mechanics performing work
subject to such predetermined minimum wages may, if they work overtime, be subject to overtime compensation provisions of other laws which
may apply concurrently to them, including the Fair Labor Standards Act.
In view of this fact, specific provision
was made in the Davis-Bacon Act for
the treatment of such predetermined
fringe benefits in the computation of
overtime compensation under other applicable statutes including the Fair
Labor Standards Act. The application
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§ 778.7
29 CFR Ch. V (7–1–19 Edition)
of this provision is discussed in § 5.32 of
this title, which should be considered
together with the interpretations in
this part 778 in determining any overtime compensation payable under the
Fair Labor Standards Act to such laborers and mechanics in any workweek
when they are subject to fringe benefit
wage determinations under the DavisBacon and related acts.
§ 778.7 Effect of Service Contract Act
of 1965.
The McNamara-O’Hara Service Contract Act of 1965, which provides for
the predetermination and the specification in service contracts entered into
by the Federal Government or the District of Columbia, of the minimum
wages and fringe benefits to be received by employees of contractors and
subcontractors employed in work on
such contracts, contains the following
provision:
SEC. 6. In determining any overtime pay to
which such service employees are entitled
under any Federal law, the regular or basic
hourly rate of pay of such an employee shall
not include any fringe benefit payments
computed hereunder which are excluded
from the regular rate under the Fair Labor
Standards Act by provisions of section 7(e)*
thereof. (*Subsection designation changed in
text from section 7(d) to 7(e) to conform with
the relettering enacted by the Fair Labor
Standards Amendments of 1966.)
Where the fringe benefits specified in
such a service contract are furnished to
an employee, the above provision permits exclusion of such fringe benefits
from the employee’s regular rate of pay
under the Fair Labor Standards Act
pursuant to the rules and principles set
forth in subpart C of this part 778. However, the McNamara-O’Hara Act permits an employer to discharge his obligation to provide the specified fringe
benefits by furnishing any equivalent
combinations of bona fide fringe benefits or by making equivalent or differential payments in cash. Permissible methods of doing this are set
forth in part 4 of this title, subpart B.
If the employer furnishes equivalent
benefits or makes cash payments, or
both, to an employee as therein authorized, the amounts thereof, to the
extent that they operate to discharge
the employer’s obligation under the
McNamara-O’Hara Act to furnish such
specified fringe benefits, may be excluded pursuant to such Act from the
employee’s regular or basic rate of pay
in computing any overtime pay due the
employee under the Fair Labor Standards Act, pursuant to the rule provided
in § 4.55 of this title. This means that
such equivalent fringe benefits or cash
payments which are authorized under
the McNamara-O’Hara Act to be provided in lieu of the fringe benefits specified in determinations issued under
such Act are excludable from the regular rate in applying the overtime provisions of the Fair Labor Standards
Act if the fringe benefits specified
under the McNamara-O’Hara Act would
be so excludable if actually furnished.
This is true regardless of whether the
equivalent benefits or payments themselves meet the requirements of section 7(e) of the Fair Labor Standards
Act and subpart C of this part 778.
Subpart B—The Overtime Pay
Requirements
INTRODUCTORY
§ 778.100 The maximum-hours provisions.
Section 7(a) of the Act deals with
maximum hours and overtime compensation for employees who are within the general coverage of the Act and
are not specifically exempt from its
overtime pay requirements. It prescribes the maximum weekly hours of
work permitted for the employment of
such employees in any workweek without extra compensation for overtime,
and a general overtime rate of pay not
less than one and one-half times the
employee’s regular rate which the employee must receive for all hours
worked in any workweek in excess of
the applicable maximum hours. The
employment by an employer of an employee in any work subject to the Act
in any workweek brings these provisions into operation. The employer is
prohibited from employing the employee in excess of the prescribed maximum hours in such workweek without
paying him the required extra compensation for the overtime hours
worked at a rate meeting the statutory
requirement.
412
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Wage and Hour Division, Labor
§ 778.101 Maximum
hours.
§ 778.105
nonovertime
As a general standard, section 7(a) of
the Act provides 40 hours as the maximum number that an employee subject to its provisions may work for an
employer in any workweek without receiving additional compensation at not
less than the statutory rate for overtime. Hours worked in excess of the
statutory maximum in any workweek
are overtime hours under the statute; a
workweek no longer than the prescribed maximum is a nonovertime
workweek under the Act, to which the
pay requirements of section 6 (minimum wage and equal pay) but not
those of section 7(a) are applicable.
[46 FR 7309, Jan. 23, 1981]
§ 778.102 Application of overtime provisions generally.
Since there is no absolute limitation
in the Act (apart from the child labor
provisions and regulations thereunder)
on the number of hours that an employee may work in any workweek, he
may work as many hours a week as he
and his employer see fit, so long as the
required overtime compensation is paid
him for hours worked in excess of the
maximum workweek prescribed by section 7(a). The Act does not generally
require, however, that an employee be
paid overtime compensation for hours
in excess of eight per day, or for work
on Saturdays, Sundays, holidays or
regular days of rest. If no more than
the maximum number of hours prescribed in the Act are actually worked
in the workweek, overtime compensation pursuant to section 7(a) need not
be paid. Nothing in the Act, however,
will relieve an employer of any obligation he may have assumed by contract
or of any obligation imposed by other
Federal or State law to limit overtime
hours of work or to pay premium rates
for work in excess of a daily standard
or for work on Saturdays, Sundays,
holidays, or other periods outside of or
in excess of the normal or regular
workweek or workday. (The effect of
making such payments is discussed in
§§ 778.201 through 778.207 and 778.219.)
[46 FR 7309, Jan. 23, 1981]
§ 778.103 The workweek as the basis
for applying section 7(a).
If in any workweek an employee is
covered by the Act and is not exempt
from its overtime pay requirements,
the employer must total all the hours
worked by the employee for him in
that workweek (even though two or
more unrelated job assignments may
have been performed), and pay overtime compensation for each hour
worked in excess of the maximum
hours applicable under section 7(a) of
the Act. In the case of an employee employed jointly by two or more employers (see part 791 of this chapter), all
hours worked by the employee for such
employers during the workweek must
be totaled in determining the number
of hours to be compensated in accordance with section 7(a). The principles
for determining what hours are hours
worked within the meaning of the Act
are discussed in part 785 of this chapter.
§ 778.104 Each workweek stands alone.
The Act takes a single workweek as
its standard and does not permit averaging of hours over 2 or more weeks.
Thus, if an employee works 30 hours
one week and 50 hours the next, he
must receive overtime compensation
for the overtime hours worked beyond
the applicable maximum in the second
week, even though the average number
of hours worked in the 2 weeks is 40.
This is true regardless of whether the
employee works on a standard or
swing-shift schedule and regardless of
whether he is paid on a daily, weekly,
biweekly, monthly or other basis. The
rule is also applicable to pieceworkers
and employees paid on a commission
basis. It is therefore necessary to determine the hours worked and the compensation earned by pieceworkers and
commission employees on a weekly
basis.
§ 778.105 Determining the workweek.
An employee’s workweek is a fixed
and regularly recurring period of 168
hours—seven consecutive 24-hour periods. It need not coincide with the calendar week but may begin on any day
and at any hour of the day. For purposes of computing pay due under the
Fair Labor Standards Act, a single
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§ 778.106
29 CFR Ch. V (7–1–19 Edition)
workweek may be established for a
plant or other establishment as a
whole or different workweeks may be
established for different employees or
groups of employees. Once the beginning time of an employee’s workweek
is established, it remains fixed regardless of the schedule of hours worked by
him. The beginning of the workweek
may be changed if the change is intended to be permanent and is not designed to evade the overtime requirements of the Act. The proper method of
computing overtime pay in a period in
which a change in the time of commencement of the workweek is made,
is discussed in §§ 778.301 and 778.302.
§ 778.106
Time of payment.
There is no requirement in the Act
that overtime compensation be paid
weekly. The general rule is that overtime compensation earned in a particular workweek must be paid on the
regular pay day for the period in which
such workweek ends. When the correct
amount of overtime compensation cannot be determined until some time
after the regular pay period, however,
the requirements of the Act will be satisfied if the employer pays the excess
overtime compensation as soon after
the regular pay period as is practicable. Payment may not be delayed
for a period longer than is reasonably
necessary for the employer to compute
and arrange for payment of the amount
due and in no event may payment be
delayed beyond the next payday after
such computation can be made. Where
retroactive wage increases are made,
retroactive overtime compensation is
due at the time the increase is paid, as
discussed in § 778.303. For a discussion
of overtime payments due because of
increases by way of bonuses, see
§ 778.209.
PRINCIPLES FOR COMPUTING OVERTIME
PAY BASED ON THE ‘‘REGULAR RATE’’
§ 778.107 General standard for overtime pay.
The general overtime pay standard in
section 7(a) requires that overtime
must be compensated at a rate not less
than one and one-half times the regular rate at which the employee is actually employed. The regular rate of
pay at which the employee is employed
may in no event be less than the statutory minimum. (The statutory minimum is the specified minimum wage
applicable under section 6 of the Act,
except in the case of workers specially
provided for in section 14 and workers
in Puerto Rico, the Virgin Islands, and
American Samoa who are covered by
wage orders issued pursuant to section
8 of the Act.) If the employee’s regular
rate of pay is higher than the statutory
minimum, his overtime compensation
must be computed at a rate not less
than one and one-half times such higher rate. Under certain conditions prescribed in section 7 (f), (g), and (j), the
Act provides limited exceptions to the
application of the general standard of
section 7(a) for computing overtime
pay based on the regular rate. With respect to these, see §§ 778.400 through
778.421 and 778.601 and part 548 of this
chapter. The Act also provides, in section 7(b), (i), (k) and (m) and in section
13, certain partial and total exemptions
from the application of section 7(a) to
certain employees and under certain
conditions. Regulations and interpretations concerning these exemptions are
outside the scope of this part 778 and
reference should be made to other applicable parts of this chapter.
[46 FR 7309, Jan. 23, 1981]
§ 778.108 The ‘‘regular rate’’.
The ‘‘regular rate’’ of pay under the
Act cannot be left to a declaration by
the parties as to what is to be treated
as the regular rate for an employee; it
must be drawn from what happens
under the employment contract (Bay
Ridge Operating Co. v. Aaron, 334 U.S.
446). The Supreme Court has described
it as the hourly rate actually paid the
employee for the normal, nonovertime
workweek for which he is employed—
an
‘‘actual
fact’’
(Walling
v.
Youngerman-Reynolds Hardwood Co., 325
U.S. 419). Section 7(e) of the Act requires inclusion in the ‘‘regular rate’’
of ‘‘all remuneration for employment
paid to, or on behalf of, the employee’’
except payments specifically excluded
by paragraphs (1) through (7) of that
subsection. (These seven types of payments, which are set forth in § 778.200
and discussed in §§ 778.201 through
778.224, are hereafter referred to as
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Wage and Hour Division, Labor
§ 778.111
‘‘statutory exclusions.’’) As stated by
the Supreme Court in the YoungermanReynolds case cited above: ‘‘Once the
parties have decided upon the amount
of wages and the mode of payment the
determination of the regular rate becomes a matter of mathematical computation, the result of which is unaffected by any designation of a contrary
‘regular rate’ in the wage contracts.’’
§ 778.109 The regular rate is an hourly
rate.
The ‘‘regular rate’’ under the Act is a
rate per hour. The Act does not require
employers to compensate employees on
an hourly rate basis; their earnings
may be determined on a piece-rate, salary, commission, or other basis, but in
such case the overtime compensation
due to employees must be computed on
the basis of the hourly rate derived
therefrom and, therefore, it is necessary to compute the regular hourly
rate of such employees during each
workweek, with certain statutory exceptions discussed in §§ 778.400 through
778.421. The regular hourly rate of pay
of an employee is determined by dividing his total remuneration for employment (except statutory exclusions) in
any workweek by the total number of
hours actually worked by him in that
workweek for which such compensation was paid. The following sections
give some examples of the proper
method of determining the regular rate
of pay in particular instances: (The
maximum hours standard used in these
examples is 40 hours in a workweek).
§ 778.110
Hourly rate employee.
(a) Earnings at hourly rate exclusively.
If the employee is employed solely on
the basis of a single hourly rate, the
hourly rate is the ‘‘regular rate.’’ For
overtime hours of work the employee
must be paid, in addition to the
straight time hourly earnings, a sum
determined by multiplying one-half the
hourly rate by the number of hours
worked in excess of 40 in the week.
Thus a $12 hourly rate will bring, for an
employee who works 46 hours, a total
weekly wage of $588 (46 hours at $12
plus 6 at $6). In other words, the employee is entitled to be paid an amount
equal to $12 an hour for 40 hours and
$18 an hour for the 6 hours of overtime,
or a total of $588.
(b) Hourly rate and bonus. If the employee receives, in addition to the
earnings computed at the $12 hourly
rate, a production bonus of $46 for the
week, the regular hourly rate of pay is
$13 an hour (46 hours at $12 yields $552;
the addition of the $46 bonus makes a
total of $598; this total divided by 46
hours yields a regular rate of $13). The
employee is then entitled to be paid a
total wage of $637 for 46 hours (46 hours
at $13 plus 6 hours at $6.50, or 40 hours
at $13 plus 6 hours at $19.50).
[76 FR 18857, Apr. 5, 2011]
§ 778.111 Pieceworker.
(a) Piece rates and supplements generally. When an employee is employed
on a piece-rate basis, the regular hourly rate of pay is computed by adding
together total earnings for the workweek from piece rates and all other
sources (such as production bonuses)
and any sums paid for waiting time or
other hours worked (except statutory
exclusions). This sum is then divided
by the number of hours worked in the
week for which such compensation was
paid, to yield the pieceworker’s ‘‘regular rate’’ for that week. For overtime
work the pieceworker is entitled to be
paid, in addition to the total weekly
earnings at this regular rate for all
hours worked, a sum equivalent to onehalf this regular rate of pay multiplied
by the number of hours worked in excess of 40 in the week. (For an alternative method of complying with the
overtime requirements of the Act as
far as pieceworkers are concerned, see
§ 778.418.) Only additional half-time pay
is required in such cases where the employee has already received straighttime compensation at piece rates or by
supplementary payments for all hours
worked. Thus, for example, if the employee has worked 50 hours and has
earned $491 at piece rates for 46 hours
of productive work and in addition has
been compensated at $8.00 an hour for 4
hours of waiting time, the total compensation, $523.00, must be divided by
the total hours of work, 50, to arrive at
the regular hourly rate of pay—$10.46.
For the 10 hours of overtime the employee is entitled to additional compensation of $52.30 (10 hours at $5.23).
415
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§ 778.112
29 CFR Ch. V (7–1–19 Edition)
For the week’s work the employee is
thus entitled to a total of $575.30
(which is equivalent to 40 hours at
$10.46 plus 10 overtime hours at $15.69).
(b) Piece rates with minimum hourly
guarantee. In some cases an employee is
hired on a piece-rate basis coupled with
a minimum hourly guaranty. Where
the total piece-rate earnings for the
workweek fall short of the amount
that would be earned for the total
hours of work at the guaranteed rate,
the employee is paid the difference. In
such weeks the employee is in fact paid
at an hourly rate and the minimum
hourly guaranty is the regular rate in
that week. In the example just given, if
the employee was guaranteed $11 an
hour for productive working time, the
employee would be paid $506 (46 hours
at $11) for the 46 hours of productive
work (instead of the $491 earned at
piece rates). In a week in which no
waiting time was involved, the employee would be owed an additional
$5.50 (half time) for each of the 6 overtime hours worked, to bring the total
compensation up to $539 (46 hours at $11
plus 6 hours at $5.50 or 40 hours at $11
plus 6 hours at $16.50). If the employee
is paid at a different rate for waiting
time, the regular rate is the weighted
average of the 2 hourly rates, as discussed in § 778.115.
[76 FR 18857, Apr. 5, 2011]
§ 778.112 Day rates and job rates.
If the employee is paid a flat sum for
a day’s work or for doing a particular
job, without regard to the number of
hours worked in the day or at the job,
and if he receives no other form of
compensation for services, his regular
rate is determined by totaling all the
sums received at such day rates or job
rates in the workweek and dividing by
the total hours actually worked. He is
then entitled to extra half-time pay at
this rate for all hours worked in excess
of 40 in the workweek.
§ 778.113 Salaried employees—general.
(a) Weekly salary. If the employee is
employed solely on a weekly salary
basis, the regular hourly rate of pay,
on which time and a half must be paid,
is computed by dividing the salary by
the number of hours which the salary
is intended to compensate. If an em-
ployee is hired at a salary of $350 and if
it is understood that this salary is
compensation for a regular workweek
of 35 hours, the employee’s regular rate
of pay is $350 divided by 35 hours, or $10
an hour, and when the employee works
overtime the employee is entitled to
receive $10 for each of the first 40 hours
and $15 (one and one-half times $10) for
each hour thereafter. If an employee is
hired at a salary of $375 for a 40-hour
week the regular rate is $9.38 an hour.
(b) Salary for periods other than workweek. Where the salary covers a period
longer than a workweek, such as a
month, it must be reduced to its workweek equivalent. A monthly salary is
subject to translation to its equivalent
weekly wage by multiplying by 12 (the
number of months) and dividing by 52
(the number of weeks). A semimonthly
salary is translated into its equivalent
weekly wage by multiplying by 24 and
dividing by 52. Once the weekly wage is
arrived at, the regular hourly rate of
pay will be calculated as indicated
above. The regular rate of an employee
who is paid a regular monthly salary of
$1,560, or a regular semimonthly salary
of $780 for 40 hours a week, is thus
found to be $9 per hour. Under regulations of the Administrator, pursuant to
the authority given to him in section
7(g)(3) of the Act, the parties may provide that the regular rates shall be determined by dividing the monthly salary by the number of working days in
the month and then by the number of
hours of the normal or regular workday. Of course, the resultant rate in
such a case must not be less than the
statutory minimum wage.
[46 FR 7310, Jan. 23, 1981, as amended at 76
FR 18857, Apr. 5, 2011]
§ 778.114 Fixed salary for fluctuating
hours.
(a) An employee employed on a salary basis may have hours of work
which fluctuate from week to week and
the salary may be paid him pursuant to
an understanding with his employer
that he will receive such fixed amount
as straight time pay for whatever
hours he is called upon to work in a
workweek, whether few or many.
Where there is a clear mutual understanding of the parties that the fixed
salary is compensation (apart from
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Wage and Hour Division, Labor
§ 778.115
overtime premiums) for the hours
worked each workweek, whatever their
number, rather than for working 40
hours or some other fixed weekly work
period, such a salary arrangement is
permitted by the Act if the amount of
the salary is sufficient to provide compensation to the employee at a rate not
less than the applicable minimum wage
rate for every hour worked in those
workweeks in which the number of
hours he works is greatest, and if he receives extra compensation, in addition
to such salary, for all overtime hours
worked at a rate not less than one-half
his regular rate of pay. Since the salary in such a situation is intended to
compensate the employee at straight
time rates for whatever hours are
worked in the workweek, the regular
rate of the employee will vary from
week to week and is determined by dividing the number of hours worked in
the workweek into the amount of the
salary to obtain the applicable hourly
rate for the week. Payment for overtime hours at one-half such rate in addition to the salary satisfies the overtime pay requirement because such
hours have already been compensated
at the straight time regular rate, under
the salary arrangement.
(b) The application of the principles
above stated may be illustrated by the
case of an employee whose hours of
work do not customarily follow a regular schedule but vary from week to
week, whose total weekly hours of
work never exceed 50 hours in a workweek, and whose salary of $600 a week
is paid with the understanding that it
constitutes the employee’s compensation, except for overtime premiums, for
whatever hours are worked in the
workweek. If during the course of 4
weeks this employee works 40, 37.5, 50,
and 48 hours, the regular hourly rate of
pay in each of these weeks is $15.00,
$16.00, $12.00, and $12.50, respectively.
Since the employee has already received straight-time compensation on
a salary basis for all hours worked,
only additional half-time pay is due.
For the first week the employee is entitled to be paid $600; for the second
week $600.00; for the third week $660
($600 plus 10 hours at $6.00 or 40 hours
at $12.00 plus 10 hours at $18.00); for the
fourth week $650 ($600 plus 8 hours at
$6.25, or 40 hours at $12.50 plus 8 hours
at $18.75).
(c) The ‘‘fluctuating workweek’’
method of overtime payment may not
be used unless the salary is sufficiently
large to assure that no workweek will
be worked in which the employee’s average hourly earnings from the salary
fall below the minimum hourly wage
rate applicable under the Act, and unless the employee clearly understands
that the salary covers whatever hours
the job may demand in a particular
workweek and the employer pays the
salary even though the workweek is
one in which a full schedule of hours is
not worked. Typically, such salaries
are paid to employees who do not customarily work a regular schedule of
hours and are in amounts agreed on by
the parties as adequate straight-time
compensation for long workweeks as
well as short ones, under the circumstances of the employment as a
whole. Where all the legal prerequisites
for use of the ‘‘fluctuating workweek’’
method of overtime payment are
present, the Act, in requiring that ‘‘not
less than’’ the prescribed premium of 50
percent for overtime hours worked be
paid, does not prohibit paying more. On
the other hand, where all the facts indicate that an employee is being paid
for his overtime hours at a rate no
greater than that which he receives for
nonovertime hours, compliance with
the Act cannot be rested on any application of the fluctuating workweek
overtime formula.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7310, Jan. 23, 1981; 76 FR 18857, Apr. 5, 2011]
§ 778.115 Employees working at two or
more rates.
Where an employee in a single workweek works at two or more different
types of work for which different nonovertime rates of pay (of not less than
the applicable minimum wage) have
been established, his regular rate for
that week is the weighted average of
such rates. That is, his total earnings
(except statutory exclusions) are computed to include his compensation during the workweek from all such rates,
and are then divided by the total number of hours worked at all jobs. Certain
statutory exceptions permitting alternative methods of computing overtime
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§ 778.116
29 CFR Ch. V (7–1–19 Edition)
pay in such cases are discussed in
§§ 778.400 and 778.415 through 778.421.
§ 778.116 Payments other than cash.
Where payments are made to employees in the form of goods or facilities
which are regarded as part of wages,
the reasonable cost to the employer or
the fair value of such goods or of furnishing such facilities must be included in the regular rate. (See part 531
of this chapter for a discussion as to
the inclusion of goods and facilities in
wages and the method of determining
reasonable cost.) Where, for example,
an employer furnishes lodging to his
employees in addition to cash wages
the reasonable cost or the fair value of
the lodging (per week) must be added
to the cash wages before the regular
rate is determined.
[46 FR 7310, Jan. 23, 1981]
§ 778.117 Commission payments—general.
Commissions (whether based on a
percentage of total sales or of sales in
excess of a specified amount, or on
some other formula) are payments for
hours worked and must be included in
the regular rate. This is true regardless
of whether the commission is the sole
source of the employee’s compensation
or is paid in addition to a guaranteed
salary or hourly rate, or on some other
basis, and regardless of the method,
frequency, or regularity of computing,
allocating and paying the commission.
It does not matter whether the commission earnings are computed daily,
weekly,
biweekly,
semimonthly,
monthly, or at some other interval.
The fact that the commission is paid
on a basis other than weekly, and that
payment is delayed for a time past the
employee’s normal pay day or pay period, does not excuse the employer
from including this payment in the employee’s regular rate.
[36 FR 4981, Mar. 16, 1971]
§ 778.118 Commission paid on a workweek basis.
When the commission is paid on a
weekly basis, it is added to the employee’s other earnings for that workweek
(except overtime premiums and other
payments excluded as provided in sec-
tion 7(e) of the Act), and the total is divided by the total number of hours
worked in the workweek to obtain the
employee’s regular hourly rate for the
particular workweek. The employee
must then be paid extra compensation
at one-half of that rate for each hour
worked in excess of the applicable maximum hours standard.
§ 778.119 Deferred commission
ments—general rules.
If the calculation and payment of the
commission cannot be completed until
sometime after the regular pay day for
the workweek, the employer may disregard the commission in computing
the regular hourly rate until the
amount
of
commission
can
be
ascertained. Until that is done he may
pay compensation for overtime at a
rate not less than one and one-half
times the hourly rate paid the employee, exclusive of the commission.
When the commission can be computed
and paid, additional overtime compensation due by reason of the inclusion of the commission in the employee’s regular rate must also be paid. To
compute this additional overtime compensation, it is necessary, as a general
rule, that the commission be apportioned back over the workweeks of the
period during which it was earned. The
employee must then receive additional
overtime compensation for each week
during the period in which he worked
in excess of the applicable maximum
hours standard. The additional compensation for that workweek must be
not less than one-half of the increase in
the hourly rate of pay attributable to
the
commission
for
that
week
multipled by the number of hours
worked in excess of the applicable maximum hours standard in that workweek.
§ 778.120 Deferred commission payments not identifiable as earned in
particular workweeks.
If it is not possible or practicable to
allocate the commission among the
workweeks of the period in proportion
to the amount of commission actually
earned or reasonably presumed to be
earned each week, some other reasonable and equitable method must be
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Wage and Hour Division, Labor
§ 778.120
adopted. The following methods may be
used:
(a) Allocation of equal amounts to each
week. Assume that the employee
earned an equal amount of commission
in each week of the commission computation period and compute any additional overtime compensation due on
this amount. This may be done as follows:
(1) For a commission computation
period of 1 month, multiply the commission payment by 12 and divide by 52
to get the amount of commission allocable to a single week. If there is a
semimonthly computation period, multiply the commission payment by 24
and divide by 52 to get each week’s
commission. For a commission computation period of a specific number of
workweeks, such as every 4 weeks (as
distinguished from every month) divide
the total amount of commission by the
number of weeks for which it represents additional compensation to get
the amount of commission allocable to
each week.
(2) Once the amount of commission
allocable to a workweek has been
ascertained for each week in which
overtime was worked, the commission
for that week is divided by the total
number of hours worked in that week,
to get the increase in the hourly rate.
Additional overtime due is computed
by multiplying one-half of this figure
by the number of overtime hours
worked in the week. A shorter method
of obtaining the amount of additional
overtime compensation due is to multiply the amount of commission allocable to the week by the decimal
equivalent of the fraction
Overtime hours
————————
Total hours × 2
A coefficient table (WH–134) has been
prepared which contains the appropriate decimals for computing the
extra half-time due.
Examples: (i) If there is a monthly commission payment of $416, the amount of commission allocable to a single week is $96 ($416 ×
12 = $4,992 ÷ 52 = $96). In a week in which an
employee who is due overtime compensation
after 40 hours works 48 hours, dividing $96 by
48 gives the increase to the regular rate of $2.
Multiplying one-half of this figure by 8 over-
time hours gives the additional overtime pay
due of $8. The $96 may also be multiplied by
0.083 (the appropriate decimal shown on the
coefficient table) to get the additional overtime pay due of $8.
(ii) An employee received $384 in commissions for a 4-week period. Dividing this by 4
gives him a weekly increase of $96. Assume
that he is due overtime compensation after
40 hours and that in the 4-week period he
worked 44, 40, 44 and 48 hours. He would be
due additional compensation of $4.36 for the
first and third week ($96 ÷ 44 = $2.18 ÷ 2 = $1.09
× 4 overtime hours = $4.36), no extra compensation for the second week during which
no overtime hours were worked, and $8 for
the fourth week, computed in the same manner as weeks one and three. The additional
overtime pay due may also be computed by
multiplying the amount of the weekly increase by the appropriate decimal on the coefficient table, for each week in which overtime was worked.
(b) Allocation of equal amounts to each
hour worked. Sometimes, there are
facts which make it inappropriate to
assume equal commission earnings for
each workweek. For example, the number of hours worked each week may
vary significantly. In such cases, rather than following the method outlined
in paragraph (a) of this section, it is
reasonable to assume that the employee earned an equal amount of commission in each hour that he worked
during the commission computation
period. The amount of the commission
payment should be divided by the number of hours worked in the period in
order to determine the amount of the
increase in the regular rate allocable
to the commission payment. One-half
of this figure should be multiplied by
the number of statutory overtime
hours worked by the employee in the
overtime workweeks of the commission
computation period, to get the amount
of additional overtime compensation
due for this period.
Example: An employee received commissions of $192 for a commission computation
period of 96 hours, including 16 overtime
hours (i.e., two workweeks of 48 hours each).
Dividing the $192 by 96 gives a $2 increase in
the hourly rate. If the employee is entitled
to overtime after 40 hours in a workweek, he
is due an additional $16 for the commission
computation period, representing an additional $1 for each of the 16 overtime hours.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7310, Jan. 23, 1981]
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§ 778.121
29 CFR Ch. V (7–1–19 Edition)
§ 778.121 Commission
payments—delayed credits and debits.
If there are delays in crediting sales
or debiting returns or allowances
which affect the computation of commissions, the amounts paid to the employee for the computation period will
be accepted as the total commission
earnings of the employee during such
period, and the commission may be allocated over the period from the last
commission computation date to the
present commission computation date,
even though there may be credits or
debits resulting from work which actually occurred during a previous period.
The hourly increase resulting from the
commission may be computed as outlined in the preceding paragraphs.
§ 778.122 Computation of overtime for
commission employees on established basic rate.
Overtime pay for employees paid
wholly or partly on a commission basis
may be computed on an established
basic rate, in lieu of the method described above. See § 778.400 and part 548
of this chapter.
Subpart C—Payments That May
Be Excluded From the ‘‘Regular Rate’’
THE STATUTORY PROVISIONS
§ 778.200 Provisions governing inclusion, exclusion, and crediting of
particular payments.
(a) Section 7(e). This subsection of the
Act provides as follows:
As used in this section the ‘‘regular rate’’
at which an employee is employed shall be
deemed to include all remuneration for employment paid to, or on behalf of, the employee, but shall not be deemed to include:
(1) Sums paid as gifts; payments in the nature of gifts made at Christmas time or on
other special occasions, as a reward for service, the amounts of which are not measured
by or dependent on hours worked, production, or efficiency; [discussed in § 778.212].
(2) Payments made for occasional periods
when no work is performed due to vacation,
holiday, illness, failure of the employer to
provide sufficient work, or other similar
cause; reasonable payments for traveling expenses, or other expenses, incurred by an employee in the furtherance of his employer’s
interests and properly reimbursable by the
employer; and other similar payments to an
employee which are not made as compensation for his hours of employment; [discussed
in §§ 778.216 through 778.224].
(3) Sums paid in recognition of services
performed during a given period if either, (a)
both the fact that payment is to be made and
the amount of the payment are determined
at the sole discretion of the employer at or
near the end of the period and not pursuant
to any prior contract, agreement, or promise
causing the employee to expect such payments regularly; or (b) the payments are
made pursuant to a bona fide profit-sharing
plan or trust or bona fide thrift or savings
plan, meeting the requirements of the Secretary of Labor set forth in appropriate regulations which he shall issue, having due regard among other relevant factors, to the extent to which the amounts paid to the employee are determined without regard to
hours of work, production, or efficiency; or
(c) the payments are talent fees (as such talent fees are defined and delimited by regulations of the Secretary) paid to performers,
including announcers, on radio and television programs; [discussed in §§ 778.208
through 778.215 and 778.225].
(4) Contributions irrevocably made by an
employer to a trustee or third person pursuant to a bona fide plan for providing old-age,
retirement, life, accident, or health insurance or similar benefits for employees; [discussed in §§ 778.214 and 778.215].
(5) Extra compensation provided by a premium rate paid for certain hours worked by
the employee in any day or workweek because such hours are hours worked in excess
of eight in a day or in excess of the maximum workweek applicable to such employee
under subsection (a) or in excess of the employee’s normal working hours or regular
working hours, as the case may be; [discussed in §§ 778.201 and 778.202].
(6) Extra compensation provided by a premium rate paid for work by the employee on
Saturdays, Sundays, holidays, or regular
days of rest, or on the sixth or seventh day
of the workweek, where such premium rate
is not less than one and one-half times the
rate established in good faith for like work
performed in nonovertime hours on other
days; or [discussed in §§ 778.203, 778.205, and
778.206].
(7) Extra compensation provided by a premium rate paid to the employee, in pursuance of an applicable employment contract
or collective bargaining agreement, for work
outside of the hours established in good faith
by the contract or agreement as the basic,
normal, or regular workday (not exceeding
eight hours) or workweek (not exceeding the
maximum workweek applicable to such employee under subsection (a)), where such premium rate is not less than one and one-half
times the rate established in good faith by
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Wage and Hour Division, Labor
§ 778.202
the contract or agreement for like work performed during such workday or workweek;
[discussed in §§ 778.201 and 778.206].
(8) Any value or income derived from employer-provided grants or rights provided
pursuant to a stock option, stock appreciation right, or bona fide employee stock purchase program which is not otherwise excludable under any of paragraphs (a)(1)
through (a)(7) of this section if—
(i) Grants are made pursuant to a program,
the terms and conditions of which are communicated to participating employees either
at the beginning of the employee’s participation in the program or at the time of the
grant;
(ii) In the case of stock options and stock
appreciation rights, the grant or right cannot be exercisable for a period of at least 6
months after the time of grant (except that
grants or rights may become exercisable because of an employee’s death, disability, retirement, or a change in corporate ownership, or other circumstances permitted by
regulation), and the exercise price is at least
85 percent of the fair market value of the
stock at the time of grant;
(iii) Exercise of any grant or right is voluntary; and
(iv) Any determinations regarding the
award of, and the amount of, employer-provided grants or rights that are based on performance are—
(A) Made based upon meeting previously
established performance criteria (which may
include hours of work, efficiency, or productivity) of any business unit consisting of at
least 10 employees or of a facility, except
that, any determinations may be based on
length of service or minimum schedule of
hours or days of work; or
(B) Made based upon the past performance
(which may include any criteria) of one or
more employees in a given period so long as
the determination is in the sole discretion of
the employer and not pursuant to any prior
contract.
(b) Section 7(h). This subsection of the
Act provides as follows:
(1) Except as provided in paragraph (2),
sums excluded from the regular rate pursuant to subsection (e) shall not be creditable
toward wages required under section 6 or
overtime compensation required under this
section.
(2) Extra compensation paid as described in
paragraphs (5), (6), and (7) of subsection (e) of
this section shall be creditable toward overtime compensation payable pursuant to this
section.
(c) Only the statutory exclusions are
authorized. It is important to determine the scope of these exclusions,
since all remuneration for employment
paid to employees which does not fall
within one of these seven exclusionary
clauses must be added into the total
compensation received by the employee before his regular hourly rate of
pay is determined.
[33 FR 986, Jan. 26, 1968, as amended at 76 FR
18858, Apr. 5, 2011]
EXTRA COMPENSATION PAID FOR
OVERTIME
§ 778.201 Overtime
premiums—general.
(a) Certain premium payments made
by employers for work in excess of or
outside of specified daily or weekly
standard work periods or on certain
special days are regarded as overtime
premiums. In such case, the extra compensation provided by the premium
rates need not be included in the employee’s regular rate of pay for the purpose of computing overtime compensation due under section 7(a) of the Act.
Moreover, under section 7(h) this extra
compensation may be credited toward
the overtime payments required by the
Act.
(b) The three types of extra premium
payments which may thus be treated
as overtime premiums for purposes of
the Act are outlined in section 7(e) (5),
(6), and (7) of the Act as set forth in
§ 778.200(a). These are discussed in detail in the sections following.
(c) Section 7(h) of the Act specifically states that the extra compensation provided by these three types of
payments may be credited toward overtime compensation due under section
7(a) for work in excess of the applicable
maximum hours standard. No other
types of remuneration for employment
may be so credited.
§ 778.202 Premium pay for hours in excess of a daily or weekly standard.
(a) Hours in excess of 8 per day or statutory weekly standard. Many employment contracts provide for the payment of overtime compensation for
hours worked in excess of 8 per day or
40 per week. Under some contracts such
overtime compensation is fixed at one
and one-half times the base rate; under
others the overtime rate may be greater or less than one and one-half times
the base rate. If the payment of such
contract overtime compensation is in
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§ 778.203
29 CFR Ch. V (7–1–19 Edition)
fact contingent upon the employee’s
having worked in excess of 8 hours in a
day or in excess of the number of hours
in the workweek specified in section
7(a) of the Act as the weekly maximum, the extra premium compensation paid for the excess hours is excludable from the regular rate under section 7(e)(5) and may be credited toward
statutory overtime payments pursuant
to section 7(h) of the Act. In applying
these rules to situations where it is the
custom to pay employees for hours during which no work is performed due to
vacation, holiday, illness, failure of the
employer to provide sufficient work, or
other similar cause, as these terms are
explained in §§ 778.216 to 778.224, it is
permissible (but not required) to count
these hours as hours worked in determining the amount of overtime premium pay, due for hours in excess of 8
per day or the applicable maximum
hours standard, which may be excluded
from the regular rate and credited toward the statutory overtime compensation.
(b) Hours in excess of normal or regular
working hours. Similarly, where the
employee’s normal or regular daily or
weekly working hours are greater or
less than 8 hours and 40 hours respectively and his contract provides for the
payment of premium rates for work in
excess of such normal or regular hours
of work for the day or week (such as 7
in a day or 35 in a week) the extra compensation provided by such premium
rates, paid for excessive hours, is a true
overtime premium to be excluded from
the regular rate and it may be credited
toward overtime compensation due
under the Act.
(c) Premiums for excessive daily hours.
If an employee whose maximum hours
standard is 40 hours is hired at the rate
of $5.75 an hour and receives, as overtime compensation under his contract,
$6.25 per hour for each hour actually
worked in excess of 8 per day (or in excess of his normal or regular daily
working hours), his employer may exclude the premium portion of the overtime rate from the employee’s regular
rate and credit the total of the extra
50-cent payments thus made for daily
overtime hours against the overtime
compensation which is due under the
statute for hours in excess of 40 in that
workweek. If the same contract further
provided for the payment of $6.75 for
hours in excess of 12 per day, the extra
$1 payments could likewise be credited
toward overtime compensation due
under the Act. To qualify as overtime
premiums under section 7(e)(5), the
daily overtime premium payments
must be made for hours in excess of 8
hours per day or the employee’s normal
or regular working hours. If the normal
workday is artificially divided into a
‘‘straight time’’ period to which one
rate is assigned, followed by a so-called
‘‘overtime’’ period for which a higher
‘‘rate’’ is specified, the arrangement
will be regarded as a device to contravene the statutory purposes and the
premiums will be considered part of
the regular rate. For a fuller discussion
of this problem, see § 778.501.
(d) Hours in excess of other statutory
standard. Where payment at premium
rates for hours worked in excess of a
specified daily or weekly standard is
made pursuant to the requirements of
another applicable statute, the extra
compensation provided by such premium rates will be regarded as a true
overtime premium.
(e) Premium pay for sixth or seventh
day worked. Under section 7(e)(6) and
7(h), extra premium compensation paid
pursuant to contract or statute for
work on the sixth or seventh day
worked in the workweek is regarded in
the same light as premiums paid for
work in excess of the applicable maximum hours standard or the employee’s
normal or regular workweek.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7311, Jan. 23, 1981]
§ 778.203 Premium pay for work on
Saturdays, Sundays, and other
‘‘special days’’.
Under section 7(e)(6) and 7(h) of the
Act, extra compensation provided by a
Premium rate of at least time and onehalf which is paid for work on Saturdays, Sundays, holidays, or regular
days of rest or on the sixth or seventh
day of the workweek (hereinafter referred to as ‘‘special days’’) may be
treated as an overtime premium for the
purposes of the Act. If the premium
rate is less than time and one-half, the
extra compensation provided by such
rate must be included in determining
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Wage and Hour Division, Labor
§ 778.203
the employee’s regular rate of pay and
cannot be credited toward statutory
overtime due, unless it qualifies as an
overtime
premium
under
section
7(e)(5).
(a) ‘‘Special days’’ rate must be at
least time and one-half to qualify as
overtime premium: The premium rate
must be at least ‘‘one and one-half
times the rate established in good faith
for like work performed in nonovertime hours on other days.’’ Where
an employee is hired on the basis of a
salary for a fixed workweek or at a single hourly rate of pay, the rate paid for
work on ‘‘special days’’ must be at
least time and one-half his regular
hourly rate in order to qualify under
section 7(e)(6). If the employee is a
pieceworker or if he works at more
than one job for which different hourly
or piece rates have been established
and these are bona fide rates applicable
to the work when performed during
nonovertime hours, the extra compensation provided by a premium rate
of at least one and one-half times either (1) the bona fide rate applicable to
the type of job the employee performs
on the ‘‘special days’’, or (2) the average hourly earnings in the week in
question, will qualify as an overtime
premium under this section. (For a
fuller discussion of computation on the
average rate, see § 778.111; on the rate
applicable to the job, see §§ 778.415
through 778.421; on the ‘‘established’’
rate, see § 778.400.)
(b) Bona fide base rate required. The
statute authorizes such premiums paid
for work on ‘‘special days’’ to be treated as overtime premiums only if they
are actually based on a ‘‘rate established in good faith for like work performed in nonovertime hours on other
days.’’ This phrase is used for the purpose of distinguishing the bona fide
employment standards contemplated
by section 7(e)(6) from fictitious
schemes and artificial or evasive devices as discussed in Subpart F of this
part. Clearly, a rate which yields the
employee less than time and one-half
the minimum rate prescribed by the
Act would not be a rate established in
good faith.
(c) Work on the specified ‘‘special
days’’: To qualify as an overtime premium under section 7(e)(6), the extra
compensation must be paid for work on
the specified days. The term ‘‘holiday’’
is read in its ordinary usage to refer to
those days customarily observed in the
community in celebration of some historical or religious occasion. A day of
rest arbitrarily granted to employees
because of lack of work is not a ‘‘holiday’’ within the meaning of this section, nor is it a ‘‘regular day of rest.’’
The term ‘‘regular day of rest’’ means
a day on which the employee in accordance with his regular prearranged
schedule is not expected to report for
work. In some instances the ‘‘regular
day of rest’’ occurs on the same day or
days each week for a particular employee; in other cases, pursuant to a
swing shift schedule, the schedule day
of rest rotates in a definite pattern,
such as 6 days work followed by 2 days
of rest. In either case the extra compensation provided by a premium rate
for work on such scheduled days of rest
(if such rate is at least one and onehalf times the bona fide rate established for like work during nonovertime hours on other days) may be
treated as an overtime premium and
thus need not be included in computing
the employee’s regular rate of pay and
may be credited toward overtime payments due under the Act.
(d) Payment of premiums for work
performed on the ‘‘special day’’: To
qualify as an overtime premium under
section 7(e)(6), the premium must be
paid because work is performed on the
days specified and not for some other
reason which would not qualify the
premium as an overtime premium
under section 7(e)(5), (6), or (7). (For examples distinguishing pay for work on
a holiday from idle holiday pay, see
§ 778.219.) Thus a premium rate paid to
an employee only when he received less
than 24 hours’ notice that he is required to report for work on his regular
day of rest is not a premium paid for
work on one of the specified days; it is
a premium imposed as a penalty upon
the employer for failure to give adequate notice to compensate the employee for the inconvenience of disarranging his private life. The extra
compensation is not an overtime premium. It is part of his regular rate of
pay unless such extra compensation is
paid the employee on infrequent and
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§ 778.204
29 CFR Ch. V (7–1–19 Edition)
sporadic occasions so as to qualify for
exclusion under section 7(e)(2) in which
event it need not be included in computing his regular rate of pay, as explained in § 778.222.
§ 778.204 ‘‘Clock
pattern’’
premium
pay.
(a) Overtime premiums under section
7(e)(7). Where a collective bargaining
agreement or other applicable employment contract in good faith establishes
certain hours of the day as the basic,
normal, or regular workday (not exceeding 8 hours) or workweek (not exceeding the maximum hours standard
applicable under section 7(a)) and provides for the payment of a premium
rate for work outside such hours, the
extra compensation provided by such
premium rate will be treated as an
overtime premium if the premium rate
is not less than one and one-half times
the rate established in good faith by
the contract or agreement for like
work performed during the basic, normal or regular workday or workweek.
(b) Premiums for hours outside established working hours. To qualify as an
overtime premium under section 7(e)(7)
the premium must be paid because the
work was performed during hours
‘‘outside of the hours established * * *
as the basic * * * workday or workweek’’ and not for some other reason.
Thus, if the basic workday is established in good faith as the hours from
8 a.m. to 5 p.m. a premium of time and
one-half paid for hours between 5 p.m.
and 8 a.m. would qualify as an overtime premium. However, where the
contract does not provide for the payment of a premium except for work between midnight and 6 a.m. the premium would not qualify under this section since it is not a premium paid for
work outside the established workday
but only for certain special hours outside the established workday, in most
instances because they are undesirable
hours. Similarly, where payments of
premium rates for work are made after
5 p.m. only if the employee has not had
a meal period or rest period, they are
not regarded as overtime premiums;
they are premiums paid because of undesirable working conditions.
(c) Payment in pursuance of agreement.
Premiums of the type which section
7(e)(7) authorizes to be treated as overtime premiums must be paid ‘‘in pursuance of an applicable employment contract or collective bargaining agreement,’’ and the rates of pay and the
daily and weekly work periods referred
to must be established in good faith by
such contract or agreement. Although
as a general rule a collective bargaining agreement is a formal agreement which has been reduced to writing, an employment contract for purposes of section 7(e)(7) may be either
written or oral. Where there is a written employment contract and the practices of the parties differ from its provisions, it must be determined whether
the practices of the parties have modified the contract. If the practices of the
parties have modified the written provisions of the contract, the provisions
of the contract as modified by the practices of the parties will be controlling
in determining whether the requirements of section 7(e)(7) are satisfied.
The determination as to the existence
of the requisite provisions in an applicable oral employment contract will
necessarily be based on all the facts,
including those showing the terms of
the oral contract and the actual employment and pay practices thereunder.
§ 778.205 Premiums for weekend and
holiday work—example.
The application of section 7(e)(6) may
be illustrated by the following example: Suppose an agreement of employment calls for the payment of $7.50 an
hour for all hours worked on a holiday
or on Sunday in the operation of machines by operators whose maximum
hours standard is 40 hours and who are
paid a bona fide hourly rate of $5 for
like work performed during nonovertime hours on other days. Suppose
further that the workweek of such an
employee begins at 12:01 a.m. Sunday,
and in a particular week he works a
schedule of 8 hours on Sunday and on
each day from Monday through Saturday, making a total of 56 hours worked
in the workweek. Tuesday is a holiday.
The payment of $320 to which the employee is entitled under the employment agreement will satisfy the requirements of the Act since the employer may properly exclude from the
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Wage and Hour Division, Labor
§ 778.207
regular rate the extra $20 paid for work
on Sunday and the extra $20 paid for
holiday work and credit himself with
such amount against the statutory
overtime premium required to be paid
for the 16 hours worked over 40.
[46 FR 7311, Jan. 23, 1981]
§ 778.206 Premiums for work outside
basic workday or workweek—examples.
The effect of section 7(e)(7) where
‘‘clock pattern’’ premiums are paid
may be illustrated by reference to provisions typical of the applicable collective bargaining agreements traditionally in effect between employers and
employees in the longshore and stevedoring industries. These agreements
specify straight time rates applicable
during the hours established in good
faith under the agreement as the basic,
normal, or regular workday and workweek. Under one such agreement, for
example, such workday and workweek
are established as the first 6 hours of
work, exclusive of mealtime, each day,
Monday through Friday, between the
hours of 8 a.m. and 5 p.m. Under another typical agreement, such workday
and workweek are established as the
hours between 8 a.m. and 12 noon and
between 1 p.m. and 5 p.m., Monday
through Friday. Work outside such
workday and workweek is paid for at
premium rates not less than one and
one-half times the bona fide straighttime rates applicable to like work
when performed during the basic, normal, or regular workday or workweek.
The extra compensation provided by
such premium rates will be excluded in
computing the regular rate at which
the employees so paid are employed
and may be credited toward overtime
compensation due under the Act. For
example, if an employee is paid $5 an
hour under such an agreement for handling general cargo during the basic,
normal, or regular workday and $7.50
per hour for like work outside of such
workday, the extra $2.50 will be excluded from the regular rate and may
be credited to overtime pay due under
the Act. Similarly, if the straight time
rate established in good faith by the
contract should be higher because of
handling dangerous or obnoxious cargo,
recognition of skill differentials, or
similar reasons, so as to be $7.50 an
hour during the hours established as
the basic or normal or regular workday
or workweek, and a premium rate of
$11.25 an hour is paid for the same work
performed during other hours of the
day or week, the extra $3.75 may be excluded from the regular rate of pay and
may be credited toward overtime pay
due under the Act. Similar principles
are applicable where agreements following this general pattern exist in
other industries.
[46 FR 7311, Jan. 23, 1981]
§ 778.207 Other types of contract premium pay distinguished.
(a) Overtime premiums are those defined
by the statute. The various types of contract premium rates which provide
extra compensation qualifying as overtime premiums to be excluded from the
regular rate (under section 7(e) (5), (6),
and (7) and credited toward statutory
overtime pay requirements (under section 7(h)) have been described in
§§ 778.201 through 778.206. The plain
wording of the statute makes it clear
that extra compensation provided by
premium rates other than those described cannot be treated as overtime
premiums. Wherever such other premiums are paid, they must be included
in the employee’s regular rate before
statutory overtime compensation is
computed; no part of such premiums
may be credited toward statutory overtime pay.
(b) Nonovertime premiums. The Act requires the inclusion in the regular rate
of such extra premiums as nightshift
differentials (whether they take the
form of a percent of the base rate or an
addition of so many cents per hour)
and premiums paid for hazardous, arduous or dirty work. It also requires inclusion of any extra compensation
which is paid as an incentive for the
rapid performance of work, and since
any extra compensation in order to
qualify as an overtime premium must
be provided by a premium rate per
hour, except in the special case of
pieceworkers as discussed in § 778.418,
lump sum premiums which are paid
without regard to the number of hours
worked are not overtime premiums and
must be included in the regular rate.
For example, where an employer pays 8
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§ 778.208
29 CFR Ch. V (7–1–19 Edition)
hours’ pay for a particular job whether
it is performed in 8 hours or in less
time, the extra premium of 2 hours’
pay received by an employee who completes the job in 6 hours must be included in his regular rate. Similarly,
where an employer pays for 8 hours at
premium rates for a job performed during the overtime hours whether it is
completed in 8 hours or less, no part of
the premium paid qualifies as overtime
premium under sections 7(e) (5), (6), or
(7). (For a further discussion of this
and related problems, see §§ 778.308 to
778.314.)
BONUSES
§ 778.208 Inclusion and exclusion of
bonuses in computing the ‘‘regular
rate.’’
Section 7(e) of the Act requires the
inclusion in the regular rate of all remuneration for employment except
eight specified types of payments.
Among these excludable payments are
discretionary bonuses, gifts and payments in the nature of gifts on special
occasions, contributions by the employer to certain welfare plans and
payments made by the employer pursuant to certain profit-sharing, thrift and
savings plans. These are discussed in
§§ 778.211 through 778.214. Bonuses
which do not qualify for exclusion from
the regular rate as one of these types
must be totaled in with other earnings
to determine the regular rate on which
overtime pay must be based. Bonus
payments are payments made in addition to the regular earnings of an employee. For a discussion on the bonus
form as an evasive bookkeeping device,
see §§ 778.502 and 778.503.
[33 FR 986, Jan. 26, 1968, as amended at 76 FR
18858, Apr. 5, 2011]
§ 778.209 Method of inclusion of bonus
in regular rate.
(a) General rules. Where a bonus payment is considered a part of the regular
rate at which an employee is employed,
it must be included in computing his
regular hourly rate of pay and overtime compensation. No difficulty arises
in computing overtime compensation if
the bonus covers only one weekly pay
period. The amount of the bonus is
merely added to the other earnings of
the employee (except statutory exclusions) and the total divided by total
hours worked. Under many bonus
plans, however, calculations of the
bonus may necessarily be deferred over
a period of time longer than a workweek. In such a case the employer may
disregard the bonus in computing the
regular hourly rate until such time as
the amount of the bonus can be
ascertained. Until that is done he may
pay compensation for overtime at one
and one-half times the hourly rate paid
by the employee, exclusive of the
bonus. When the amount of the bonus
can be ascertained, it must be apportioned back over the workweeks of the
period during which it may be said to
have been earned. The employee must
then receive an additional amount of
compensation for each workweek that
he worked overtime during the period
equal to one-half of the hourly rate of
pay allocable to the bonus for that
week multiplied by the number of statutory overtime hours worked during
the week.
(b) Allocation of bonus where bonus
earnings cannot be identified with particular workweeks. If it is impossible to
allocate the bonus among the workweeks of the period in proportion to
the amount of the bonus actually
earned each week, some other reasonable and equitable method of allocation must be adopted. For example, it
may be reasonable and equitable to assume that the employee earned an
equal amount of bonus each week of
the period to which the bonus relates,
and if the facts support this assumption additional compensation for each
overtime week of the period may be
computed and paid in an amount equal
to one-half of the average hourly increase in pay resulting from bonus allocated to the week, multiplied by the
number of statutory overtime hours
worked in that week. Or, if there are
facts which make it inappropriate to
assume equal bonus earnings for each
workweek, it may be reasonable and
equitable to assume that the employee
earned an equal amount of bonus each
hour of the pay period and the resultant hourly increase may be determined
by dividing the total bonus by the
number of hours worked by the employee during the period for which it is
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Wage and Hour Division, Labor
§ 778.211
paid. The additional compensation due
for the overtime workweeks in the period may then be computed by multiplying the total number of statutory
overtime hours worked in each such
workweek during the period by onehalf this hourly increase.
§ 778.210 Percentage of total earnings
as bonus.
In some instances the contract or
plan for the payment of a bonus may
also provide for the simultaneous payment of overtime compensation due on
the bonus. For example, a contract
made prior to the performance of services may provide for the payment of
additional compensation in the way of
a bonus at the rate of 10 percent of the
employee’s straight-time earnings, and
10 percent of his overtime earnings. In
such instances, of course, payments according to the contract will satisfy in
full the overtime provisions of the Act
and no recomputation will be required.
This is not true, however, where this
form of payment is used as a device to
evade the overtime requirements of the
Act rather than to provide actual overtime compensation, as described in
§§ 778.502 and 778.503.
§ 778.211 Discretionary bonuses.
(a) Statutory provision. Section 7(e)
(3)(a) of the Act provides that the regular rate shall not be deemed to include ‘‘sums paid in recognition of
services performed during a given period if * * * (a) both the fact that payment is to be made and the amount of
the payment are determined at the sole
discretion of the employer at or near
the end of the period and not pursuant
to any prior contract, agreement, or
promise causing the employee to expect such payments regularly * * *’’.
Such sums may not, however, be credited toward overtime compensation due
under the Act.
(b) Discretionary character of excluded
bonus. In order for a bonus to qualify
for exclusion as a discretionary bonus
under section 7(e)(3)(a) the employer
must retain discretion both as to the
fact of payment and as to the amount
until a time quite close to the end of
the period for which the bonus is paid.
The sum, if any, to be paid as a bonus
is determined by the employer without
prior promise or agreement. The employee has no contract right, express or
implied, to any amount. If the employer promises in advance to pay a
bonus, he has abandoned his discretion
with regard to it. Thus, if an employer
announces to his employees in January
that he intends to pay them a bonus in
June, he has thereby abandoned his
discretion regarding the fact of payment by promising a bonus to his employees. Such a bonus would not be excluded from the regular rate under section 7(e)(3)(a). Similarly, an employer
who promises to sales employees that
they will receive a monthly bonus computed on the basis of allocating 1 cent
for each item sold whenever, is his discretion, the financial condition of the
firm warrants such payments, has
abandoned discretion with regard to
the amount of the bonus though not
with regard to the fact of payment.
Such a bonus would not be excluded
from the regular rate. On the other
hand, if a bonus such as the one just
described were paid without prior contract, promise or announcement and
the decision as to the fact and amount
of payment lay in the employer’s sole
discretion, the bonus would be properly
excluded from the regular rate.
(c) Promised bonuses not excluded. The
bonus, to be excluded under section
7(e)(3)(a), must not be paid ‘‘pursuant
to any prior contract, agreement, or
promise.’’ For example, any bonus
which is promised to employees upon
hiring or which is the result of collective bargaining would not be excluded
from the regular rate under this provision of the Act. Bonuses which are announced to employees to induce them
to work more steadily or more rapidly
or more efficiently or to remain with
the firm are regarded as part of the
regular rate of pay. Attendance bonuses, individual or group production
bonuses, bonuses for quality and accuracy of work, bonuses contingent upon
the employee’s continuing in employment until the time the payment is to
be made and the like are in this category. They must be included in the
regular rate of pay.
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§ 778.212
29 CFR Ch. V (7–1–19 Edition)
§ 778.212 Gifts, Christmas and special
occasion bonuses.
(a) Statutory provision. Section 7(e)(1)
of the Act provides that the term
‘‘regular rate’’ shall not be deemed to
include ‘‘sums paid as gifts; payments
in the nature of gifts made at Christmas time or on other special occasions,
as a reward for service, the amounts of
which are not measured by or dependent on hours worked, production, or efficiency * * *’’. Such sums may not,
however, be credited toward overtime
compensation due under the Act.
(b) Gift or similar payment. To qualify
for exclusion under section 7(e)(1) the
bonus must be actually a gift or in the
nature of a gift. If it is measured by
hours worked, production, or efficiency, the payment is geared to wages
and hours during the bonus period and
is no longer to be considered as in the
nature of a gift. If the payment is so
substantial that it can be assumed that
employees consider it a part of the
wages for which they work, the bonus
cannot be considered to be in the nature of a gift. Obviously, if the bonus is
paid pursuant to contract (so that the
employee has a legal right to the payment and could bring suit to enforce
it), it is not in the nature of a gift.
(c) Application of exclusion. If the
bonus paid at Christmas or on other
special occasion is a gift or in the nature of a gift, it may be excluded from
the regular rate under section 7(e)(1)
even though it is paid with regularity
so that the employees are led to expect
it and even though the amounts paid to
different employees or groups of employees vary with the amount of the
salary or regular hourly rate of such
employees or according to their length
of service with the firm so long as the
amounts are not measured by or directly dependent upon hours worked,
production, or efficiency. A Christmas
bonus paid (not pursuant to contract)
in the amount of two weeks’ salary to
all employees and an equal additional
amount for each 5 years of service with
the firm, for example, would be excludable from the regular rate under this
category.
§ 778.213 Profit-sharing, thrift, and
savings plans.
Section 7(e)(3)(b) of the Act provides
that the term ‘‘regular rate’’ shall not
be deemed to include ‘‘sums paid in
recognition of services performed during a given period if * * * the payments
are made pursuant to a bona fide profit-sharing plan or trust or bona fide
thrift or savings plan, meeting the requirements of the Secretary of Labor
set forth in appropriate regulations
* * *’’. Such sums may not, however,
be credited toward overtime compensation due under the Act. The regulations issued under this section are
parts 547 and 549 of this chapter. Payments in addition to the regular wages
of the employee, made by the employer
pursuant to a plan which meets the requirements of the regulations in part
547 or 549 of this chapter, will be properly excluded from the regular rate.
§ 778.214 Benefit plans; including profit-sharing plans or trusts providing
similar benefits.
(a) Statutory provision. Section 7(e)(4)
of the Act provides that the term
‘‘regular rate’’ shall not be deemed to
include: ‘‘contributions irrevocably
made by an employer to a trustee or
third person pursuant to a bona fide
plan for providing old age, retirement,
life, accident, or health insurance or
similar benefits for employees * * *.’’
Such sums may not, however, be credited toward overtime compensation due
under the Act.
(b) Scope and application of exclusion
generally. Plans for providing benefits
of the kinds described in section 7(e)(4)
are referred to herein as ‘‘benefit
plans’’. It is section 7(e)(4) which governs the status for regular rate purposes of any contributions made by an
employer pursuant to a plan for providing the described benefits. This is
true irrespective of any other features
the plan may have. Thus, it makes no
difference whether or not the benefit
plan is one financed out of profits or
one which by matching employee contributions or otherwise encourages
thrift or savings. Where such a plan or
trust is combined in a single program
(whether in one or more documents)
with a plan or trust for providing profit-sharing payments to employees, the
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Wage and Hour Division, Labor
§ 778.215
profit-sharing payments may be excluded from the regular rate if they
meet the requirements of the ProfitSharing Regulations, part 549 of this
chapter, and the contributions made by
the employer for providing the benefits
described in section 7(e)(4) of the Act
may be excluded from the regular rate
if they meet the tests set forth in
§ 778.215. Advance approval by the Department of Labor is not required.
(c) Tests must be applied to employer
contributions. It should be emphasized
that it is the employer’s contribution
made pursuant to the benefit plan that
is excluded from or included in the regular rate according to whether or not
the requirements set forth in § 778.215
are met. If the contribution is not
made as provided in section 7(e)(4) or if
the plan does not qualify as a bona fide
benefit plan under that section, the
contribution is treated the same as any
bonus payment which is part of the
regular rate of pay, and at the time the
contribution is made the amount
thereof must be apportioned back over
the workweeks of the period during
which it may be said to have accrued.
Overtime compensation based upon the
resultant increases in the regular hourly rate is due for each overtime hour
worked during any workweek of the period. The subsequent distribution of accrued funds to an employee on account
of severance of employment (or for any
other reason) would not result in any
increase in his regular rate in the week
in which the distribution is made.
(d) Employer contributions when included in fringe benefit wage determinations under Davis-Bacon Act. As noted in
§ 778.6 where certain fringe benefits are
included in the wage predeterminations of the Secretary of Labor for laborers and mechanics performing contract work subject to the Davis-Bacon
Act and related statutes, the provisions of Public Law 88–349 discussed in
§ 5.32 of this title should be considered
together with the interpretations in
this part 778 in determining the excludability of such fringe benefits from the
regular rate of such employees. Accordingly, reference should be made to § 5.32
of this title as well as to § 778.215 for
guidance with respect to exclusion
from the employee’s regular rate of
contributions made by the employer to
any benefit plan if, in the workweek or
workweeks involved, the employee performed work as a laborer or mechanic
subject to a wage determination made
by the Secretary pursuant to part 1 of
this title, and if fringe benefits of the
kind represented by such contributions
constitute a part of the prevailing
wages required to be paid such employee in accordance with such wage
determination.
(e) Employer contributions or equivalents pursuant to fringe benefit determinations under Service Contract Act of
1965. Contributions by contractors and
subcontractors to provide fringe benefits specified under the McNamaraO’Hara Service Contract Act of 1965,
which are of the kind referred to in section 7(e)(4), are excludable from the
regular rate under the conditions set
forth in § 778.215. Where the fringe benefit contributions specified under such
Act are so excludable, equivalent benefits or payments provided by the employer in satisfaction of his obligation
to provide the specified benefits are
also excludable from the regular rate if
authorized under part 4 of this title,
subpart B, pursuant to the McNamaraO’Hara Act, and their exclusion therefrom is not dependent on whether such
equivalents, if separately considered,
would meet the requirements of
§ 778.215. See § 778.7.
[33 FR 986, Jan. 26, 1968, as amended at 36 FR
4699, Mar. 11, 1971]
§ 778.215 Conditions for exclusion of
benefit-plan contributions under
section 7(e)(4).
(a) General rules. In order for an employer’s contribution to qualify for exclusion from the regular rate under
section 7(e)(4) of the Act the following
conditions must be met:
(1) The contributions must be made
pursuant to a specific plan or program
adopted by the employer, or by contract as a result of collective bargaining, and communicated to the employees. This may be either a companyfinanced plan or an employer-employee
contributory plan.
(2) The primary purpose of the plan
must be to provide systematically for
the payment of benefits to employees
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§ 778.215
29 CFR Ch. V (7–1–19 Edition)
on account of death, disability, advanced age, retirement, illness, medical expenses, hospitalization, and the
like.
(3) In a plan or trust, either:
(i) The benefits must be specified or
definitely determinable on an actuarial
basis; or
(ii) There must be both a definite formula for determining the amount to be
contributed by the employer and a definite formula for determining the benefits for each of the employees participating in the plan; or
(iii) There must be both a formula for
determining the amount to be contributed by the employer and a provision
for determining the individual benefits
by a method which is consistent with
the purposes of the plan or trust under
section 7(e)(4) of the Act.
(iv) NOTE: The requirements in paragraphs (a)(3) (ii) and (iii) of this section
for a formula for determining the
amount to be contributed by the employer may be met by a formula which
requires a specific and substantial minimum contribution and which provides
that the employer may add somewhat
to that amount within specified limits;
provided, however, that there is a reasonable relationship between the specified minimum and maximum contributions. Thus, formulas providing for a
minimum contribution of 10 percent of
profits and giving the employer discretion to add to that amount up to 20
percent of profits, or for a minimum
contribution of 5 percent of compensation and discretion to increase up to a
maximum of 15 percent of compensation, would meet the requirement.
However, a plan which provides for insignificant minimum contributions and
permits a variation so great that, for
all practical purposes, the formula becomes meaningless as a measure of
contributions, would not meet the requirements.
(4) The employer’s contributions
must be paid irrevocably to a trustee
or third person pursuant to an insurance agreement, trust or other funded
arrangement. The trustee must assume
the usual fiduciary responsibilities imposed upon trustees by applicable law.
The trust or fund must be set up in
such a way that in no event will the
employer be able to recapture any of
the contributions paid in nor in any
way divert the funds to his own use or
benefit. (It should also be noted that in
the case of joint employer-employee
contributory plans, where the employee contributions are not paid over
to a third person or to a trustee unaffiliated with the employer, violations
of the Act may result if the employee
contributions cut into the required
minimum or overtime rates. See part
531 of this chapter.) Although an employer’s contributions made to a trustee or third person pursuant to a benefit
plan must be irrevocably made, this
does not prevent return to the employer of sums which he had paid in excess of the contributions actually
called for by the plan, as where such
excess payments result from error or
from the necessity of marking payments to cover the estimated cost of
contributions at a time when the exact
amount of the necessary contributions
under the plan is not yet ascertained.
For example, a benefit plan may provide for definite insurance benefits for
employees in the event of the happening of a specified contingency such
as death, sickness, accident, etc., and
may provide that the cost of such definite benefits, either in full or any balance in excess of specified employee
contributions, will be borne by the employer. In such a case the return by the
insurance company to the employer of
sums paid by him in excess of the
amount required to provide the benefits which, under the plan, are to be
provided through contributions by the
employer, will not be deemed a recapture or diversion by the employer of
contributions made pursuant to the
plan.
(5) The plan must not give an employee the right to assign his benefits
under the plan nor the option to receive any part of the employer’s contributions in cash instead of the benefits under the plan: Provided, however,
That if a plan otherwise qualified as a
bona fide benefit plan under section
7(e)(4) of the Act, it will still be regarded as a bona fide plan even though
it provides, as an incidental part thereof, for the payment to an employee in
cash of all or a part of the amount
standing to his credit (i) at the time of
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Wage and Hour Division, Labor
§ 778.217
the severance of the employment relation due to causes other than retirement, disability, or death, or (ii) upon
proper termination of the plan, or (iii)
during the course of his employment
under circumstances specified in the
plan and not inconsistent with the general purposes of the plan to provide the
benefits described in section 7(e)(4) of
the Act.
(b) Plans under section 401(a) of the Internal Revenue Code. Where the benefit
plan or trust has been approved by the
Bureau of Internal Revenue as satisfying the requirements of section 401(a)
of the Internal Revenue Code in the absence of evidence to the contrary, the
plan or trust will be considered to meet
the conditions specified in paragraphs
(a)(1), (4), and (5) of this section.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7312, Jan. 23, 1981]
PAYMENTS NOT FOR HOURS WORKED
§ 778.216 The provisions of section
7(e)(2) of the Act.
Section 7(e)(2) of the Act provides
that the term ‘‘regular rate’’ shall not
be deemed to include ‘‘payments made
for occasional periods when no work is
performed due to vacation, holiday, illness, failure of the employer to provide
sufficient work, or other similar cause;
reasonable payments for traveling expenses, or other expenses, incurred by
an employee in the furtherance of his
employer’s interests and properly reimbursable by the employer; and other
similar payments to an employee
which are not made as compensation
for his hours of employment * * *.’’
However, since such payments are not
made as compensation for the employee’s hours worked in any workweek, no
part of such payments can be credited
toward overtime compensation due
under the Act.
§ 778.217 Reimbursement for expenses.
(a) General rule. Where an employee
incurs expenses on his employer’s behalf or where he is required to expend
sums solely by reason of action taken
for the convenience of his employer,
section 7(e)(2) is applicable to reimbursement for such expenses. Payments made by the employer to cover
such expenses are not included in the
employee’s regular rate (if the amount
of the reimbursement reasonably approximates the expenses incurred).
Such payment is not compensation for
services rendered by the employees
during any hours worked in the workweek.
(b) Illustrations. Payment by way of
reimbursement for the following types
of expenses will not be regarded as part
of the employee’s regular rate:
(1) The actual amount expended by
an employee in purchasing supplies,
tools, materials, or equipment on behalf of his employer.
(2) The actual or reasonably approximate amount expended by an employee
in purchasing, laundering or repairing
uniforms or special clothing which his
employer requires him to wear.
(3) The actual or reasonably approximate amount expended by an employee, who is traveling ‘‘over the
road’’ on his employer’s business, for
transportation (whether by private car
or common carrier) and living expenses
away from home, other travel expenses, such as taxicab fares, incurred
while traveling on the employer’s business.
(4) ‘‘Supper money’’, a reasonable
amount given to an employee, who ordinarily works the day shift and can
ordinarily return home for supper, to
cover the cost of supper when he is requested by his employer to continue
work during the evening hours.
(5) The actual or reasonably approximate amount expended by an employee
as temporary excess home-to-work
travel expenses incurred (i) because the
employer has moved the plant to another town before the employee has
had an opportunity to find living quarters at the new location or (ii) because
the employee, on a particular occasion,
is required to report for work at a
place other than his regular workplace.
The foregoing list is intended to be illustrative rather than exhaustive.
(c) Payments excluding expenses. It
should be noted that only the actual or
reasonably approximate amount of the
expense is excludable from the regular
rate. If the amount paid as ‘‘reimbursement’’
is
disproportionately
large, the excess amount will be included in the regular rate.
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§ 778.218
29 CFR Ch. V (7–1–19 Edition)
(d) Payments for expenses personal to
the employee. The expenses for which
reimbursement is made must in order
to merit exclusion from the regular
rate under this section, be expenses incurred by the employee on the employer’s behalf or for his benefit or convenience. If the employer reimburses the
employee for expenses normally incurred by the employee for his own
benefit, he is, of course, increasing the
employee’s regular rate thereby. An
employee normally incurs expenses in
traveling to and from work, buying
lunch, paying rent, and the like. If the
employer reimburses him for these normal everyday expenses, the payment is
not excluded from the regular rate as
‘‘reimbursement for expenses.’’ Whether the employer ‘‘reimburses’’ the employee for such expenses or furnishes
the facilities (such as free lunches or
free housing), the amount paid to the
employee (or the reasonable cost to the
employer or fair value where facilities
are furnished) enters into the regular
rate of pay as discussed in § 778.116. See
also § 531.37(b) of this chapter.
§ 778.218 Pay for certain idle hours.
(a) General rules. Payments which are
made for occasional periods when the
employee is not at work due to vacation, holiday, illness, failure of the employer to provide sufficient work, or
other similar cause, where the payments are in amounts approximately
equivalent to the employee’s normal
earnings for a similar period of time,
are not made as compensation for his
hours of employment. Therefore, such
payments may be excluded from the
regular rate of pay under section 7(e)(2)
of the Act and, for the same reason, no
part of such payments may be credited
toward overtime compensation due
under the Act.
(b) Limitations on exclusion. This provision of section 7(e)(2) deals with the
type of absences which are infrequent
or sporadic or unpredictable. It has no
relation to regular ‘‘absences’’ such as
lunch periods nor to regularly scheduled days of rest. Sundays may not be
workdays in a particular plant, but
this does not make them either ‘‘holidays’’ or ‘‘vacations,’’ or days on which
the employee is absent because of the
failure of the employer to provide suffi-
cient work. The term holiday is read in
its ordinary usage to refer to those
days customarily observed in the community in celebration of some historical or religious occasion; it does not
refer to days of rest given to employees
in lieu of or as an addition to compensation for working on other days.
(c) Failure to provide work. The term
‘‘failure of the employer to provide sufficient work’’ is intended to refer to occasional, sporadically recurring situations where the employee would normally be working but for such a factor
as machinery breakdown, failure of expected supplies to arrive, weather conditions affecting the ability of the employee to perform the work and similarly unpredictable obstacles beyond
the control of the employer. The term
does not include reduction in work
schedule (as discussed in §§ 778.321
through 778.329), ordinary temporary
layoff situations, or any type of routine, recurrent absence of the employee.
(d) Other similar cause. The term
‘‘other similar cause’’ refers to payments made for periods of absence due
to factors like holidays, vacations,
sickness, and failure of the employer to
provide work. Examples of ‘‘similar
causes’’ are absences due to jury service, reporting to a draft board, attending a funeral of a family member, inability to reach the workplace because
of weather conditions. Only absences of
a nonroutine character which are infrequent or sporadic or unpredictable are
included in the ‘‘other similar cause’’
category.
§ 778.219 Pay for foregoing holidays
and vacations.
(a) Sums payable whether employee
works or not. As explained in § 778.218,
certain payments made to an employee
for periods during which he performs
no work because of a holiday or vacation are not required to be included in
the regular rate because they are not
regarded as compensation for working.
Suppose an employee who is entitled to
such a paid idle holiday or paid vacation foregoes his holiday or vacation
and performs work for the employer on
the holiday or during the vacation period. If, under the terms of his employment, he is entitled to a certain sum as
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Wage and Hour Division, Labor
§ 778.219
holiday or vacation pay, whether he
works or not, and receives pay at his
customary rate (or higher) in addition
for each hour that he works on the holiday or vacation day, the certain sum
allocable to holiday or vacation pay is
still to be excluded from the regular
rate. It is still not regarded as compensation for hours of work if he is
otherwise compensated at his customary rate (or at a higher rate) for
his work on such days. Since it is not
compensation for work it may not be
credited toward overtime compensation due under the Act. Two examples
in which the maximum hours standard
is 40 hours may serve to illustrate this
principle:
(1) An employee whose rate of pay is
$5 an hour and who usually works a 6day 48-hour week is entitled, under his
employment contract, to a week’s paid
vacation in the amount of his usual
straight-time earnings—$240. He foregoes his vacation and works 50 hours in
the week in question. He is owed $250
as his total straight-time earnings for
the week, and $240 in addition as his
vacation pay. Under the statute he is
owed an additional $25 as overtime premium (additional half-time) for the 10
hours in excess of 40. His regular rate
of $5 per hour has not been increased
by virtue of the payment of $240 vacation pay, but no part of the $240 may be
offset against the statutory overtime
compensation which is due. (Nothing in
this example is intended to imply that
the employee has a statutory right to
$240 or any other sum as vacation pay.
This is a matter of private contract between the parties who may agree that
vacation pay will be measured by
straight-time earnings for any agreed
number of hours or days, or by total
normal or expected take-home pay for
the period or that no vacation pay at
all will be paid. The example merely illustrates the proper method of computing overtime for an employee whose
employment contract provides $240 vacation pay.)
(2) An employee who is entitled under
his employment contract to 8 hours’
pay at his rate of $5 an hour for the
Christmas holiday, foregoes his holiday
and works 9 hours on that day. During
the entire week he works a total of 50
hours. He is paid under his contract,
$250 as straight-time compensation for
50 hours plus $40 as idle holiday pay. He
is owed, under the statute, an additional $25 as overtime premium (additional half-time) for the 10 hours in excess of 40. His regular rate of $5 per
hour has not been increased by virtue
of the holiday pay but no part of the
$40 holiday pay may be credited toward
statutory overtime compensation due.
(b) Premiums for holiday work distinguished. The example in paragraph
(a)(2) of this section should be distinguished from a situation in which an
employee is entitled to idle holiday
pay under the employment agreement
only when he is actually idle on the
holiday, and who, if he foregoes his holiday also, under his contract, foregoes
his idle holiday pay.
(1) The typical situation is one in
which an employee is entitled by contract to 8 hours’ pay at his rate of $5 an
hour for certain named holidays when
no work is performed. If, however, he is
required to work on such days, he does
not receive his idle holiday pay. Instead he receives a premium rate of
$7.50 (time and one-half) for each hour
worked on the holiday. If he worked 9
hours on the holiday and a total of 50
hours for the week, he would be owed,
under his contract, $67.50 (9 × $7.50) for
the holiday work and $205 for the other
41 hours worked in the week, a total of
$272.50. Under the statute (which does
not require premium pay for a holiday)
he is owed $275 for a workweek of 50
hours at a rate of $5 an hour. Since the
holiday premium is one and one-half
times the established rate for nonholiday work, it does not increase the regular rate because it qualifies as an
overtime
premium
under
section
7(e)(6), and the employer may credit it
toward statutory overtime compensation due and need pay the employee
only the additional sum of $2.50 to
meet the statutory requirements. (For
a discussion of holiday premiums see
§ 778.203.)
(2) If all other conditions remained
the same but the contract called for
the payment of $10 (double time) for
each hour worked on the holiday, the
employee would receive, under his contract $90 (9 × $10) for the holiday work
in addition to $205 for the other 41
hours worked, a total of $295. Since
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§ 778.220
29 CFR Ch. V (7–1–19 Edition)
this holiday premium is also an overtime premium under section 7(e)(6), it
is excludable from the regular rate and
the employer may credit it toward
statutory overtime compensation due.
Because the total thus paid exceeds the
statutory requirements, no additional
compensation is due under the Act. In
distinguishing this situation from that
in the example in paragraph (a)(2) of
this section, it should be noted that
the contract provisions in the two situations are different and result in the
payment of different amounts. In example (2) the employee received a total
of $85 attributable to the holiday: 8
hours’ idle holiday pay at $5 an hour,
due him whether he worked or not, and
$45 pay at the nonholiday rate for 9
hours’ work on the holiday. In the situation discussed in this paragraph the
employee received $90 pay for working
on the holiday—double time for 9 hours
of work. Thus, clearly, all of the pay in
this situation is paid for and directly
related to the number of hours worked
on the holiday.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7312, Jan. 23, 1981]
§ 778.220 ‘‘Show-up’’
or
‘‘reporting’’
pay.
(a) Applicable principles. Under some
employment agreements, an employee
may be paid a minimum of a specified
number of hours’ pay at the applicable
straight time or overtime rate on infrequent and sporadic occasions when,
after reporting to work at his scheduled starting time on a regular work
day or on another day on which he has
been scheduled to work, he is not provided with the expected amount of
work. The amounts that may be paid
under such an agreement over and
above what the employee would receive
if paid at his customary rate only for
the number of hours worked are paid to
compensate the employee for the time
wasted by him in reporting for work
and to prevent undue loss of pay resulting from the employer’s failure to provide expected work during regular
hours. One of the primary purposes of
such an arrangement is to discourage
employers from calling their employees in to work for only a fraction of a
day when they might get full-time
work elsewhere. Pay arrangements of
this kind are commonly referred to as
‘‘show-up’’ or ‘‘reporting’’ pay. Under
the principles and subject to the conditions set forth in subpart B of this part
and §§ 778.201 through 778.207, that portion of such payment which represents
compensation at the applicable rates
for the straight time or overtime hours
actually worked, if any, during such
period may be credited as straight time
or overtime compensation, as the case
may be, in computing overtime compensation due under the Act. The
amount by which the specified number
of hours’ pay exceeds such compensation for the hours actually worked is
considered as a payment that is not
made for hours worked. As such, it
may be excluded from the computation
of the employee’s regular rate and cannot be credited toward statutory overtime compensation due him.
(b) Application illustrated. To illustrate, assume that an employee entitled to overtime pay after 40 hours a
week whose workweek begins on Monday and who is paid $5 an hour reports
for work on Monday according to
schedule and is sent home after being
given only 2 hours of work. He then
works 8 hours each day on Tuesday
through Saturday, inclusive, making a
total of 42 hours for the week. The employment agreement covering the employees in the plant, who normally
work 8 hours a day, Monday through
Friday, provides that an employee reporting for scheduled work on any day
will receive a minimum of 4 hours’
work or pay. The employee thus receives not only the $10 earned in the 2
hours of work on Monday but an extra
2 hours’ ‘‘show-up’’ pay, or $10 by reason of this agreement. However, since
this $10 in ‘‘show-up’’ pay is not regarded as compensation for hours
worked, the employee’s regular rate remains $5 and the overtime requirements of the Act are satisfied if he receives, in addition to the $210 straighttime pay for 42 hours and the $10
‘‘show-up’’ payment, the sum of $5 as
extra compensation for the 2 hours of
overtime work on Saturday.
[46 FR 7312, Jan. 23, 1981]
§ 778.221 ‘‘Call-back’’ pay.
(a) General. In the interest of simplicity and uniformity, the principles
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Wage and Hour Division, Labor
§ 778.223
discussed in § 778.220 are applied also
with respect to typical minimum ‘‘callback’’ or ‘‘call-out’’ payments made
pursuant to employment agreements.
Typically, such minimum payments
consist of a specified number of hours’
pay at the applicable straight time or
overtime rates which an employee receives on infrequent and sporadic occasions when, after his scheduled hours of
work have ended and without prearrangement, he responds to a call
from his employer to perform extra
work.
(b) Application illustrated. The application of these principles to call-back
payments may be illustrated as follows: An employment agreement provides a minimum of 3 hours’ pay at
time and one-half for any employee
called back to work outside his scheduled hours. The employees covered by
the agreement, who are entitled to
overtime pay after 40 hours a week,
normally work 8 hours each day, Monday through Friday, inclusive, in a
workweek beginning on Monday, and
are paid overtime compensation at
time and one-half for all hours worked
in excess of 8 in any day or 40 in any
workweek. Assume that an employee
covered by this agreement and paid at
the rate of $5 an hour works 1 hour
overtime or a total of 9 hours on Monday, and works 8 hours each on Tuesday through Friday, inclusive. After he
has gone home on Friday evening he is
called back to perform an emergency
job. His hours worked on the call total
2 hours and he receives 3 hours’ pay at
time and one-half, or $22.50, under the
call-back provision, in addition to $200
for working his regular schedule and
$7.50 for overtime worked on Monday
evening. In computing overtime compensation due this employee under the
Act, the 43 actual hours (not 44) are
counted as working time during the
week. In addition to $215 pay at the $5
rate for all these hours, he has received
under the agreement a premium of
$2.50 for the 1 overtime hour on Monday and of $5 for the 2 hours of overtime work on the call, plus an extra
sum of $7.50 paid by reason of the provision for minimum call-back pay. For
purposes of the Act, the extra premiums paid for actual hours of overtime work on Monday and on the Fri-
day call (a total of $7.50) may be excluded as true overtime premiums in
computing his regular rate for the
week and may be credited toward compensation due under the Act, but the
extra $7.50 received under the call-back
provision is not regarded as paid for
hours worked; therefore, it may be excluded from the regular rate, but it
cannot be credited toward overtime
compensation due under the Act. The
regular rate of the employee, therefore,
remains $5, and he has received an
overtime premium of $2.50 an hour for
3 overtime hours of work. This satisfies
the requirements of section 7 of the
Act. The same would be true, of course,
if in the foregoing example, the employee was called back outside his
scheduled hours for the 2-hour emergency job on another night of the week
or on Saturday or Sunday, instead of
on Friday night.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7313, Jan. 23, 1981]
§ 778.222 Other payments similar to
‘‘call-back’’ pay.
The principles discussed in §§ 778.220
and 778.221 are also applied with respect to certain types of extra payments which are similar to call-back
pay, such as: (a) Extra payments made
to employees, on infrequent and sporadic occasions, for failure to give the
employee sufficient notice to report for
work on regular days of rest or during
hours outside of his regular work
schedule; and (b) extra payments made,
on infrequent and sporadic occasions,
solely because the employee has been
called back to work before the expiration of a specified number of hours between shifts or tours of duty, sometimes referred to as a ‘‘rest period.’’
The extra payment, over and above the
employee’s earnings for the hours actually worked at his applicable rate
(straight time or overtime, as the case
may be), is considered as a payment
that is not made for hours worked.
§ 778.223 Pay for non-productive hours
distinguished.
Under the Act an employee must be
compensated for all hours worked. As a
general rule the term ‘‘hours worked’’
will include: (a) All time during which
an employee is required to be on duty
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§ 778.224
29 CFR Ch. V (7–1–19 Edition)
or to be on the employer’s premises or
at a prescribed workplace and (b) all
time during which an employee is suffered or permitted to work whether or
not he is required to do so. Thus, working time is not limited to the hours
spent in active productive labor, but
includes time given by the employee to
the employer even though part of the
time may be spent in idleness. Some of
the hours spent by employees, under
certain circumstances, in such activities as waiting for work, remaining ‘‘on
call’’, traveling on the employer’s business or to and from workplaces, and in
meal periods and rest periods are regarded as working time and some are
not. The governing principles are discussed in part 785 of this chapter (interpretative
bulletin
on
‘‘hours
worked’’) and part 790 of this chapter
(statement of effect of Portal-to-Portal
Act of 1947). To the extent that these
hours are regarded as working time,
payment made as compensation for
these hours obviously cannot be characterized as ‘‘payments not for hours
worked.’’ Such compensation is treated
in the same manner as compensation
for any other working time and is, of
course, included in the regular rate of
pay. Where payment is ostensibly made
as compensation for such of these
hours as are not regarded as working
time under the Act, the payment is
nevertheless included in the regular
rate of pay unless it qualifies for exclusion from the regular rate as one of a
type of ‘‘payments made for occasional
periods when no work is performed due
to * * * failure of the employer to provide sufficient work, or other similar
cause’’ as discussed in § 778.218 or is excludable on some other basis under section 7(e)(2). For example, an employment contract may provide that employees who are assigned to take calls
for specific periods will receive a payment of $5 for each 8–hour period during which they are ‘‘on call’’ in addition to pay at their regular (or overtime) rate for hours actually spent in
making calls. If the employees who are
thus on call are not confined to their
homes or to any particular place, but
may come and go as they please, provided that they leave word where they
may be reached, the hours spent ‘‘on
call’’ are not considered as hours
worked. Although the payment received by such employees for such ‘‘on
call’’ time is, therefore, not allocable
to any specific hours of work, it is
clearly paid as compensation for performing a duty involved in the employee’s job and is not of a type excludable
under section 7(e)(2). The payment
must therefore be included in the employee’s regular rate in the same manner as any payment for services, such
as an attendance bonus, which is not
related to any specific hours of work.
[46 FR 7313, Jan. 23, 1981]
§ 778.224
‘‘Other similar payments’’.
(a) General. The preceding sections
have enumerated and discussed the
basic types of payments for which exclusion from the regular rate is specifically provided under section 7(e)(2) because they are not made as compensation for hours of work. Section 7(e) (2)
also authorizes exclusion from the regular rate of ‘‘other similar payments to
an employee which are not made as
compensation for his hours of employment.’’ Since a variety of miscellaneous payments are paid by an employer to an employee under peculiar
circumstances, it was not considered
feasible to attempt to list them. They
must, however, be ‘‘similar’’ in character to the payments specifically described in section 7(e)(2). It is clear
that the clause was not intended to
permit the exclusion from the regular
rate of payments such as bonuses or
the furnishing of facilities like board
and lodging which, though not directly
attributable to any particular hours of
work are, nevertheless, clearly understood to be compensation for services.
(b) Examples of other excludable payments. A few examples may serve to illustrate some of the types of payments
intended to be excluded as ‘‘other similar payments’’:
(1) Sums paid to an employee for the
rental of his truck or car.
(2) Loans or advances made by the
employer to the employee.
(3) The cost to the employer of conveniences furnished to the employee
such as parking space, restrooms, lockers, on-the-job medical care and recreational facilities.
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Wage and Hour Division, Labor
§ 778.302
TALENT FEES IN THE RADIO AND
TELEVISION INDUSTRY
§ 778.225 Talent fees excludable under
regulations.
Section 7(e)(3) provides for the exclusion from the regular rate of ‘‘talent
fees (as such talent fees are defined and
delimited by regulations of the Secretary) paid to performers, including
announcers, on radio and television
programs.’’ Regulations defining ‘‘talent fees’’ have been issued as part 550
of this chapter. Payments which accord
with this definition are excluded from
the regular rate.
Subpart D—Special Problems
INTRODUCTORY
§ 778.300
Scope of subpart.
This subpart applies the principles of
computing overtime to some of the
problems that arise frequently.
CHANGE IN THE BEGINNING OF THE
WORKWEEK
§ 778.301 Overlapping when change of
workweek is made.
As stated in § 778.105, the beginning of
the workweek may be changed for an
employee or for a group of employees if
the change is intended to be permanent
and is not designed to evade the overtime requirements of the Act. A change
in the workweek necessarily results in
a situation in which one or more hours
or days fall in both the ‘‘old’’ workweek as previously constituted and the
‘‘new’’ workweek. Thus, if the workweek in the plant commenced at 7 a.m.
on Monday and it is now proposed to
begin the workweek at 7 a.m. on Sunday, the hours worked from 7 a.m. Sunday to 7 a.m. Monday will constitute
both the last hours of the old workweek and the first hours of the newly
established workweek.
§ 778.302 Computation of overtime due
for overlapping workweeks.
(a) General rule. When the beginning
of the workweek is changed, if the
hours which fall within both ‘‘old’’ and
‘‘new’’ workweeks as explained in
§ 778.301 are hours in which the employee does no work, his statutory
compensation for each workweek is, of
course, determinable in precisely the
same manner as it would be if no overlap existed. If, on the other hand, some
of the employee’s working time falls
within hours which are included in
both workweeks, the Department of
Labor, as an enforcement policy, will
assume that the overtime requirements
of section 7 of the Act have been satisfied if computation is made as follows:
(1) Assume first that the overlapping
hours are to be counted as hours
worked only in the ‘‘old’’ workweek
and not in the new; compute straight
time and overtime compensation due
for each of the 2 workweeks on this
basis and total the two sums.
(2) Assume now that the overlapping
hours are to be counted as hours
worked only in the new workweek and
not in the old, and complete the total
computation accordingly.
(3) Pay the employee an amount not
less than the greater of the amounts
computed by methods (1) and (2).
(b) Application of rule illustrated. Suppose that, in the example given in
§ 778.301, the employee, who receives $5
an hour and is subject to overtime pay
after 40 hours a week, worked 5 hours
on Sunday, March 7, 1965. Suppose also
that his last ‘‘old’’ workweek commenced at 7 a.m. on Monday, March 1,
and he worked 40 hours March 1
through March 5 so that for the workweek ending March 7 he would be owed
straight time and overtime compensation for 45 hours. The proposal is to
commence the ‘‘new’’ workweek at 7
a.m. on March 7. If in the ‘‘new’’ workweek of Sunday, March 7, through Saturday, March 13, the employee worked
a total of 40 hours, including the 5
hours worked on Sunday, it is obvious
that the allocation of the Sunday
hours to the old workweek will result
in higher total compensation to the
employee for the 13-day period. He
should, therefore, be paid $237.50 (40 × $5
+ 5 × $7.50) for the period of March 1
through March 7, and $175 (35 × $5) for
the period of March 8 through March
13.
(c) Nonstatutory obligations unaffected.
The fact that this method of compensation is permissible under the Fair
Labor Standards Act when the beginning of the workweek is changed will
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§ 778.303
29 CFR Ch. V (7–1–19 Edition)
not alter any obligation the employer
may have under his employment contract to pay a greater amount of overtime compensation for the period in
question.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7314, Jan. 23, 1981]
ADDITIONAL PAY FOR PAST PERIOD
§ 778.303
Retroactive pay increases.
Where a retroactive pay increase is
awarded to employees as a result of
collective bargaining or otherwise, it
operates to increase the regular rate of
pay of the employees for the period of
its retroactivity. Thus, if an employee
is awarded a retroactive increase of 10
cents per hour, he is owed, under the
Act, a retroactive increase of 15 cents
for each overtime hour he has worked
during the period, no matter what the
agreement of the parties may be. A retroactive pay increase in the form of a
lump sum for a particular period must
be prorated back over the hours of the
period to which it is allocable to determine the resultant increases in the regular rate, in precisely the same manner
as a lump sum bonus. For a discussion
of the method of allocating bonuses
based on employment in a prior period
to the workweeks covered by the bonus
payment, see § 778.209.
HOW DEDUCTIONS AFFECT THE REGULAR
RATE
§ 778.304 Amounts deducted from cash
wages—general.
(a) The word ‘‘deduction’’ is often
loosely used to cover reductions in pay
resulting from several causes:
(1) Deductions to cover the cost to
the employer of furnishing ‘‘board,
lodging or other facilities,’’ within the
meaning of section 3(m) of the Act.
(2) Deductions for other items such
as tools and uniforms which are not regarded as ‘‘facilities.’’
(3) Deductions authorized by the employee (such as union dues) or required
by law (such as taxes and garnishments).
(4) Reductions in a fixed salary paid
for a fixed workweek in weeks in which
the employee fails to work the full
schedule.
(5) Deductions for disciplinary reasons.
(b) In general, where such deductions
are made, the employee’s ‘‘regular
rate’’ is the same as it would have been
if the occasion for the deduction had
not arisen. Also, as explained in part
531 of this chapter, the requirements of
the Act place certain limitations on
the making of some of the above deductions.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7314, Jan. 23, 1981]
§ 778.305 Computation
where
particular types of deductions are
made.
The regular rate of pay of an employee whose earnings are subject to
deductions of the types described in
paragraphs (a)(1), (2), and (3) of § 778.304
is determined by dividing his total
compensation (except statutory exclusions) before deductions by the total
hours worked in the workweek. (See
also §§ 531.36–531.40 of this chapter.)
§ 778.306 Salary reductions in short
workweeks.
(a) The reductions in pay described in
§ 778.304(a)(4) are not, properly speaking, ‘‘deductions’’ at all. If an employee
is compensated at a fixed salary for a
fixed workweek and if this salary is reduced by the amount of the average
hourly earnings for each hour lost by
the employee in a short workweek, the
employee is, for all practical purposes,
employed at an hourly rate of pay.
This hourly rate is the quotient of the
fixed salary divided by the fixed number of hours it is intended to compensate. If an employee is hired at a
fixed salary of $200 for a 40-hour week,
his hourly rate is $5. When he works
only 36 hours he is therefore entitled to
$180. The employer makes a ‘‘deduction’’ of $20 from his salary to achieve
this result. The regular hourly rate is
not altered.
(b) When an employee is paid a fixed
salary for a workweek of variable
hours (or a guarantee of pay under the
provisions of section 7(f) of the Act, as
discussed in §§ 778.402 through 778.414),
the understanding is that the salary or
guarantee is due the employee in short
workweeks as well as in longer ones
and ‘‘deductions’’ of this type are not
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Wage and Hour Division, Labor
§ 778.309
made. Therefore, in cases where the understanding of the parties is not clearly shown as to whether a fixed salary is
intended to cover a fixed or a variable
workweek the practice of making ‘‘deductions’’ from the salary for hours not
worked in short weeks will be considered strong, if not conclusive, evidence
that the salary covers a fixed workweek.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7314, Jan. 23, 1981]
§ 778.307
Disciplinary deductions.
Where deductions as described in
§ 778.304(a)(5) are made for disciplinary
reasons, the regular rate of an employee is computed before deductions
are made, as in the case of deductions
of the types in paragraphs (a) (1), (2),
and (3) of § 778.304. Thus where disciplinary deductions are made from a pieceworker’s earnings, the earnings at
piece rates must be totaled and divided
by the total hours worked to determine
the regular rate before the deduction is
applied. In no event may such deductions (or deductions of the type described in § 778.304(a)(2)) reduce the
earnings to an average below the applicable minimum wage or cut into any
part of the overtime compensation due
the employee. For a full discussion of
the limits placed on such deductions,
see part 531 of this chapter. The principles set forth therein with relation to
deductions have no application, however, to situations involving refusal or
failure to pay the full amount of wages
due. See part 531 of this chapter; also
§ 778.306. It should be noted that although an employer may penalize an
employee for lateness subject to the
limitations stated above by deducting
a half hour’s straight time pay from
his wages, for example, for each half
hour, or fraction thereof of his lateness, the employer must still count as
hours worked all the time actually
worked by the employee in determining the amount of overtime compensation due for the workweek.
[46 FR 7314, Jan. 23, 1981]
LUMP SUM ATTRIBUTED TO OVERTIME
§ 778.308 The overtime rate is an hourly rate.
(a) Section 7(a) of the Act requires
the payment of overtime compensation
for hours worked in excess of the applicable maximum hours standard at a
rate not less than one and one-half
times the regular rate. The overtime
rate, like the regular rate, is a rate per
hour. Where employees are paid on
some basis other than an hourly rate,
the regular hourly rate is derived, as
previously explained, by dividing the
total compensation (except statutory
exclusions) by the total hours of work
for which the payment is made. To
qualify as an overtime premium under
section 7(e)(5), (6), or (7), the extra
compensation for overtime hours must
be paid pursuant to a premium rate
which is likewise a rate per hour (subject to certain statutory exceptions
discussed in §§ 778.400 through 778.421).
(b) To qualify under section 7(e)(5),
the overtime rate must be greater than
the regular rate, either a fixed amount
per hour or a multiple of the nonovertime rate, such as one and onethird, one and one-half or two times
that rate. To qualify under section 7(e)
(6) or (7), the overtime rate may not be
less than one and one-half times the
bonafide rate established in good faith
for like work performed during nonovertime hours. Thus, it may not be
less than time and one-half but it may
be more. It may be a standard multiple
greater than one and one-half (for example, double time); or it may be a
fixed sum of money per hour which is,
as an arithmetical fact, at least one
and one-half times the nonovertime
rate for example, if the nonovertime
rate is $5 per hour, the overtime rate
may not be less than $7.50 but may be
set at a higher arbitrary figure such as
$8 per hour.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7314, Jan. 23, 1981]
§ 778.309 Fixed
sum
for
amount of overtime.
Where an employee works a regular
fixed number of hours in excess of the
statutory maximum each workweek, it
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§ 778.310
29 CFR Ch. V (7–1–19 Edition)
is, of course, proper to pay him, in addition to his compensation for nonovertime hours, a fixed sum in any
such week for his overtime work, determined by multiplying his overtime
rate by the number of overtime hours
regularly worked.
§ 778.310 Fixed
sum
for
amounts of overtime.
varying
A premium in the form of a lump
sum which is paid for work performed
during overtime hours without regard
to the number of overtime hours
worked does not qualify as an overtime
premium even though the amount of
money may be equal to or greater than
the sum owed on a per hour basis. For
example, an agreement that provides
for the payment of a flat sum of $75 to
employees who work on Sunday does
not provide a premium which will qualify as an overtime premium, even
though the employee’s straight time
rate is $5 an hour and the employee always works less than 10 hours on Sunday. Likewise, where an agreement
provides for the payment for work on
Sunday of either the flat sum of $75 or
time and one-half the employee’s regular rate for all hours worked on Sunday, whichever is greater, the $75 guaranteed payment is not an overtime premium. The reason for this is clear. If
the rule were otherwise, an employer
desiring to pay an employee a fixed salary regardless of the number of hours
worked in excess of the applicable maximum hours standard could merely
label as overtime pay a fixed portion of
such salary sufficient to take care of
compensation for the maximum number of hours that would be worked. The
Congressional purpose to effectuate a
maximum hours standard by placing a
penalty upon the performance of excessive overtime work would thus be defeated. For this reason, where extra
compensation is paid in the form of a
lump sum for work performed in overtime hours, it must be included in the
regular rate and may not be credited
against statutory overtime compensation due.
[46 FR 7314, Jan. 23, 1981]
§ 778.311 Flat rate for special job performed in overtime hours.
(a) Flat rate is not an overtime premium. The same reasoning applies
where employees are paid a flat rate
for a special job performed during overtime hours, without regard to the time
actually consumed in performance.
(This situation should be distinguished
from ‘‘show-up’’ and ‘‘call-back’’ pay
situations
discussed
in
§§ 778.220
through 778.222 and from payment at a
rate not less than one and one-half
times the applicable rate to pieceworkers for work performed during
overtime hours, as discussed in
§§ 778.415 through 778.421). The total
amount paid must be included in the
regular rate; no part of the amount
may be credited toward statutory overtime compensation due.
(b) Application of rule illustrated. It
may be helpful to give a specific example illustrating the result of paying an
employee on the basis under discussion.
(1) An employment agreement calls
for the payment of $5 per hour for work
during the hours established in good
faith as the basic workday or workweek; it provides for the payment of
$7.50 per hour for work during hours
outside the basic workday or workweek. It further provides that employees doing a special task outside the
basic workday or workweek shall receive 6 hours’ pay at the rate of $7.50
per hour (a total payment of $45) regardless of the time actually consumed
in performance. The applicable maximum hours standard is 40 hours in a
workweek.
(2) Suppose an employee under such
an agreement works the following
schedule:
M
Hours within
basic workday
Pay under contract ................
Hours outside
basic workday
Pay under contract ................
1 Hours
T
W
T
F
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8
8
7
8
8
0
0
$40
$40
$35
$40
$40
0
0
2
21
1
0
0
4
0
$15
$45
$7.50
0
0
$30
0
spent in the performance of special work.
(3) To determine the regular rate, the
total compensation (except statutory
exclusions) must be divided by the
total number of hours worked. The
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Wage and Hour Division, Labor
§ 778.312
only sums to be excluded in this situation are the extra premiums provided
by a premium rate (a rate per hour) for
work outside the basic workday and
workweek, which qualify for exclusion
under section 7(e)(7) of the Act, as discussed in § 778.204. The $15 paid on Monday, the $7.50 paid on Wednesday and
the $30 paid on Saturday are paid pursuant to rates which qualify as premium rates under section 7(e)(7) of the
Act. The total extra compensation
(over the straight time pay for these
hours) provided by these premium
rates is $17.50. The sum of $17.50 should
be subtracted from the total of $292.50
due the employee under the employment agreement. No part of the $45
payment for the special work performed on Tuesday qualifies for exclusion. The remaining $275 must thus be
divided by 48 hours to determine the
regular rate—$5.73 per hour. The employee is owed an additional one-half
this rate under the Act for each of 8
overtime hours worked—$22.92. The
extra compensation in the amount of
$17.50 payable pursuant to contract
premium rates which qualify as overtime premiums may be credited toward
the $22.92 owed as statutory overtime
premiums. No part of the $45 payment
may be so credited. The employer must
pay the employee an additional $5.42 as
statutory overtime pay—a total of
$297.92 for the week.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7315, Jan. 23, 1981]
‘‘TASK’’ BASIS OF PAYMENT
§ 778.312 Pay for task without regard
to actual hours.
(a) Under some employment agreements employees are paid according to
a job or task rate without regard to the
number of hours consumed in completing the task. Such agreements take
various forms but the two most usual
forms are the following:
(1) It is determined (sometimes on
the basis of a time study) that an employee (or group) should complete a
particular task in 8 hours. Upon the
completion of the task the employee is
credited with 8 ‘‘hours’’ of work though
in fact he may have worked more or
less than 8 hours to complete the task.
At the end of the week an employee en-
titled to statutory overtime compensation for work in excess of 40 hours is
paid at an established hourly rate for
the first 40 of the ‘‘hours’’ so credited
and at one and one-half times such rate
for the ‘‘hours’’ so credited in excess of
40. The number of ‘‘hours’’ credited to
the employee bears no necessary relationship to the number of hours actually worked. It may be greater or less.
‘‘Overtime’’ may be payable in some
cases after 20 hours of work; in others
only after 50 hours or any other number of hours.
(2) A similar task is set up and 8
hours’ pay at the established rate is
credited for the completion of the task
in 8 hours or less. If the employee fails
to complete the task in 8 hours he is
paid at the established rate for each of
the first 8 hours he actually worked.
For work in excess of 8 hours or after
the task is completed (whichever occurs first) he is paid one and one-half
times the established rate for each
such hour worked. He is owed overtime
compensation under the Act for hours
worked in the workweek in excess of 40
but is paid his weekly overtime compensation at the premium rate for the
hours in excess of 40 actual or ‘‘task’’
hours (or combination thereof) for
which he received pay at the established rate. ‘‘Overtime’’ pay under this
plan may be due after 20 hours of work,
25 or any other number up to 40.
(b) These employees are in actual
fact compensated on a daily rate of pay
basis. In plans of the first type, the established hourly rate never controls
the compensation which any employee
actually receives. Therefore, the established rate cannot be his regular rate.
In plans of the second type the rate is
operative only for the slower employees who exceed the time allotted to
complete the task; for them it operates
in a manner similar to a minimum
hourly guarantee for piece workers, as
discussed in § 778.111. On such days as it
is operative it is a genuine rate; at
other times it is not.
(c) Since the premium rates (at one
and one-half times the established
hourly rate) are payable under both
plans for hours worked within the basic
or normal workday (if one is established) and without regard to whether
the hours are or are not in excess of 8
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§ 778.313
29 CFR Ch. V (7–1–19 Edition)
per day or 40 per week, they cannot
qualify as overtime premiums under
section 7(e) (5), (6), or (7) of the Act.
They must therefore be included in the
regular rate and no part of them may
be credited against statutory overtime
compensation due. Under plans of the
second type, however, where the pay of
an employee on a given day is actually
controlled by the established hourly
rate (because he fails to complete the
task in the 8-hour period) and he is
paid at one and one-half times the established rate for hours in excess of 8
hours actually worked, the premium
rate paid on that day will qualify as an
overtime
premium
under
section
7(e)(5).
§ 778.313 Computing
overtime
pay
under the Act for employees compensated on task basis.
(a) An example of the operation of a
plan of the second type discussed in
§ 778.312 may serve to illustrate the effects on statutory overtime computations of payment on a task basis. Assume the following facts: The employment agreement establishes a basic
hourly rate of $5 per hour, provides for
the payment of $7.50 per hour for overtime work (in excess of the basic workday or workweek) and defines the basic
workday as 8 hours, and the basic
workweek as 40 hours, Monday through
Friday. It further provides that the assembling of a machine constitutes a
day’s work. An employee who completes the assembling job in less than 8
hours will be paid 8 hours’ pay at the
established rate of $5 per hour and will
receive pay at the ‘‘overtime’’ rate for
hours worked after the completion of
the task. An employee works the following hours in a particular week:
Hours spent on task ............................................................................
Day’s pay under contract ....................................................................
Additional hours ..................................................................................
Additional pay under contract .............................................................
(b) In the example in paragraph (a) of
this section the employee has actually
worked a total of 48 hours and is owed
under the contract a total of $305 for
the week. The only sums which can be
excluded as overtime premiums from
this total before the regular rate is determined are the extra $2.50 payments
for the extra hour on Thursday and
Friday made because of work actually
in excess of 8 hours. The payment of
the other premium rates under the contract is either without regard to
whether or not the hours they compensated were in excess of a bona fide
daily or weekly standard or without regard to the number of overtime hours
worked. Thus only the sum of $5 is excluded from the total. The remaining
$300 is divided by 48 hours to determine
the regular rate—$6.25 per hour. Onehalf this rate is due under the Act as
extra compensation for each of the 8
overtime hours—$25. The $5 payment
under the contract for actual excess
hours may be credited and the bal-
M
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7
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$40
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ance—$20—is owed in addition to the
$305 due under the contract.
[46 FR 7315, Jan. 23, 1981]
§ 778.314
Special situations.
There may be special situations in
which the facts demonstrate that the
hours for which contract overtime
compensation is paid to employees
working on a ‘‘task’’ or ‘‘stint’’ basis
actually qualify as overtime hours
under section 7(e)(5), (6), or (7). Where
this is true, payment of one and onehalf times an agreed hourly rate for
‘‘task’’ or ‘‘stint’’ work may be equivalent to payment pursuant to agreement
of one and one-half time a piece rate.
The alternative methods of overtime
pay computation permitted by section
7(g)(1) or (2), as explained in §§ 778.415
through 778.421 may be applicable in
such a case.
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Wage and Hour Division, Labor
§ 778.318
EFFECT OF FAILURE TO COUNT OR PAY
FOR CERTAIN WORKING HOURS
§ 778.317 Agreements not to pay for
certain nonovertime hours.
§ 778.315 Payment
for
all
hours
worked in overtime workweek is required.
An agreement not to compensate employees for certain nonovertime hours
stands on no better footing since it
would have the same effect of diminishing the employee’s total overtime
compensation. An agreement, for example, to pay an employee whose maximum hours standard for the particular
workweek is 40 hours, $5 an hour for
the first 35 hours, nothing for the hours
between 35 and 40 and $7.50 an hour for
the hours in excess of 40 would not
meet the overtime requirements of the
Act. Under the principles set forth in
§ 778.315, the employee would have to be
paid $25 for the 5 hours worked between
35 and 40 before any sums ostensibly
paid for overtime could be credited toward overtime compensation due under
the Act. Unless the employee is first
paid $5 for each nonovertime hour
worked, the $7.50 per hour payment
purportedly for overtime hours is not
in fact an overtime payment.
In determining the number of hours
for which overtime compensation is
due, all hours worked (see § 778.223) by
an employee for an employer in a particular workweek must be counted.
Overtime compensation, at a rate not
less than one and one-half times the
regular rate of pay, must be paid for
each hour worked in the workweek in
excess of the applicable maximum
hours standard. This extra compensation for the excess hours of overtime
work under the Act cannot be said to
have been paid to an employee unless
all the straight time compensation due
him for the nonovertime hours under
his contract (express or implied) or
under any applicable statute has been
paid.
§ 778.316 Agreements or practices in
conflict with statutory requirements are ineffective.
While it is permissible for an employer and an employee to agree upon
different base rates of pay for different
types of work, it is settled under the
Act that where a rate has been agreed
upon as applicable to a particular type
of work the parties cannot lawfully
agree that the rate for that work shall
be lower merely because the work is
performed during the statutory overtime hours, or during a week in which
statutory overtime is worked. Since a
lower rate cannot lawfully be set for
overtime hours it is obvious that the
parties cannot lawfully agree that the
working time will not be paid for at
all. An agreement that only the first 8
hours of work on any days or only the
hours worked between certain fixed
hours of the day or only the first 40
hours of any week will be counted as
working time will clearly fail of its
evasive purpose. An announcement by
the employer that no overtime work
will be permitted, or that overtime
work will not be compensated unless
authorized in advance, will not impair
the employee’s right to compensation
for work which he is actually suffered
or permitted to perform.
[46 FR 7315, Jan. 23, 1981]
§ 778.318 Productive and nonproductive hours of work.
(a) Failure to pay for nonproductive
time worked. Some agreements provide
for payment only for the hours spent in
productive work; the work hours spent
in waiting time, time spent in travel
on the employer’s behalf or similar
nonproductive time are not made compensable and in some cases are neither
counted nor compensated. Payment
pursuant to such an agreement will not
comply with the Act; such nonproductive working hours must be counted
and paid for.
(b) Compensation payable for nonproductive hours worked. The parties
may agree to compensate nonproductive hours worked at a rate (at least
the minimum) which is lower than the
rate applicable to productive work. In
such a case, the regular rate is the
weighted average of the two rates, as
discussed in § 778.115 and the employee
whose maximum hours standard is 40
hours is owed compensation at his regular rate for all of the first 40 hours
and at a rate not less than one and one-
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§ 778.319
29 CFR Ch. V (7–1–19 Edition)
half times this rate for all hours in excess of 40. (See § 778.415 for the alternative method of computing overtime
pay on the applicable rate.) In the absence of any agreement setting a different rate for nonproductive hours,
the employee would be owed compensation at the regular hourly rate set for
productive work for all hours up to 40
and at a rate at least one and one-half
times that rate for hours in excess of
40.
(c) Compensation attributable to both
productive and nonproductive hours. The
situation described in paragraph (a) of
this section is to be distinguished from
one in which such nonproductive hours
are properly counted as working time
but no special hourly rate is assigned
to such hours because it is understood
by the parties that the other compensation received by the employee is
intended to cover pay for such hours.
For example, while it is not proper for
an employer to agree with his pieceworkers that the hours spent in downtime (waiting for work) will not be paid
for or will be neither paid for nor
counted, it is permissible for the parties to agree that the pay the employees will earn at piece rates is intended
to compensate them for all hours
worked, the productive as well as the
nonproductive hours. If this is the
agreement of the parties, the regular
rate of the pieceworker will be the rate
determined by dividing the total piecework earnings by the total hours
worked (both productive and nonproductive) in the workweek. Extra
compensation (one-half the rate as so
determined) would, of course, be due
for each hour worked in excess of the
applicable maximum hours standard.
EFFECT OF PAYING FOR BUT NOT
COUNTING CERTAIN HOURS
§ 778.319 Paying for but not counting
hours worked.
In some contracts provision is made
for payment for certain hours, which
constitute working time under the Act,
coupled with a provision that these
hours will not be counted as working
time. Such a provision is a nullity. If
the hours in question are hours
worked, they must be counted as such
in determining whether more than the
applicable maximum hours have been
worked in the workweek. If more hours
have been worked, the employee must
be paid overtime compensation at not
less than one and one-half times his
regular rate for all overtime hours. A
provision that certain hours will be
compensated only at straight time
rates is likewise invalid. If the hours
are actually hours worked in excess of
the applicable maximum hours standard, extra half-time compensation will
be due regardless of any agreement to
the contrary.
§ 778.320 Hours that would not be
hours worked if not paid for.
In some cases an agreement provides
for compensation for hours spent in
certain types of activities which would
not be regarded as working time under
the Act if no compensation were provided. Preliminary and postliminary
activities and time spent in eating
meals between working hours fall in
this category. The agreement of the
parties to provide compensation for
such hours may or may not convert
them into hours worked, depending on
whether or not it appears from all the
pertinent facts that the parties have
agreed to treat such time as hours
worked. Except for certain activity
governed by the Portal-to-Portal Act
(see paragraph (b) of this section), the
agreement of the parties will be respected, if reasonable.
(a) Parties have agreed to treat time as
hours worked. Where the parties have
reasonably agreed to include as hours
worked time devoted to activities of
the type described above, payments for
such hours will not have the mathematical effect of increasing or decreasing the regular rate of an employee if
the hours are compensated at the same
rate as other working hours. The requirements of section 7(a) of the Act
will be considered to be met where
overtime compensation at one and onehalf times such rate is paid for the
hours so compensated in the workweek
which are in excess of the statutory
maximum.
(b) Parties have agreed not to treat time
as hours worked. Under the principles
set forth in § 778.319, where the payments are made for time spent in an
activity which, if compensable under
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Wage and Hour Division, Labor
§ 778.323
contract, custom, or practice, is required to be counted as hours worked
under the Act by virtue of Section 4 of
the Portal-to-Portal Act of 1947 (see
parts 785 and 790 of this chapter), no
agreement by the parties to exclude
such compensable time from hours
worked would be valid. On the other
hand, in the case of time spent in activity which would not be hours
worked under the Act if not compensated and would not become hours
worked under the Portal-to-Portal Act
even if made compensable by contract,
custom, or practice, the parties may
reasonably agree that the time will not
be counted as hours worked. Activities
of this type include eating meals between working hours. Where it appears
from all the pertinent facts that the
parties have agreed to exclude such activities from hours worked, payments
for such time will be regarded as qualifying for exclusion from the regular
rate under the provisions of section
7(e)(2), as explained in §§ 778.216 to
778.224. The payments for such hours
cannot, of course, qualify as overtime
premiums creditable toward overtime
compensation under section 7(h) of the
Act.
[46 FR 7315, Jan. 23, 1981]
REDUCTION IN WORKWEEK SCHEDULE
WITH NO CHANGE IN PAY
§ 778.321 Decrease in hours without
decreasing pay—general.
Since the regular rate of pay is the
average hourly rate at which an employee is actually employed, and since
this rate is determined by dividing his
total remuneration for employment
(except statutory exclusions) for a
given workweek by the total hours
worked in that workweek for which
such remuneration was paid, it necessarily follows that if the schedule of
hours is reduced while the pay remains
the same, the regular rate has been increased.
§ 778.322 Reducing the fixed workweek for which a salary is paid.
If an employee whose maximum
hours standard is 40 hours was hired at
a salary of $200 for a fixed workweek of
40 hours, his regular rate at the time of
hiring was $5 per hour. If his workweek
is later reduced to a fixed workweek of
35 hours while his salary remains the
same, it is the fact that it now takes
him only 35 hours to earn $200, so that
he earns his salary at the average rate
of $5.71 per hour. His regular rate thus
becomes $5.71 per hour; it is no longer
$5 an hour. Overtime pay is due under
the Act only for hours worked in excess
of 40, not 35, but if the understanding of
the parties is that the salary of $200
now covers 35 hours of work and no
more, the employee would be owed $5.71
per hour under his employment contract for each hour worked between 35
and 40. He would be owed not less than
one and one-half times $5.71 ($8.57) per
hour, under the statute, for each hour
worked in excess of 40 in the workweek. In weeks in which no overtime is
worked only the provisions of section 6
of the Act, requiring the payment of
not less than the applicable minimum
wage for each hour worked, apply so
that the employee’s right to receive
$5.71 per hour is enforceable only under
his contract. However, in overtime
weeks the Administrator has the duty
to insure the payment of at least one
and one-half times the employee’s regular rate of pay for hours worked in excess of 40 and this overtime compensation cannot be said to have been paid
until all straight time compensation
due the employee under the statute or
his employment contract has been
paid. Thus if the employee works 41
hours in a particular week, he is owed
his salary for 35 hours—$200, 5 hours’
pay at $5.71 per hour for the 5 hours between 35 and 40—$28.55, and 1 hour’s
pay at $8.57 for the 1 hour in excess of
40—$8.57, or a total of $237.12 for the
week.
[46 FR 7316, Jan. 23, 1981]
§ 778.323 Effect if salary is for variable
workweek.
The discussion in the prior section
sets forth one result of reducing the
workweek from 40 to 35 hours. It is not
either the necessary result or the only
possible result. As in all cases of employees hired on a salary basis, the regular rate depends in part on the agreement of the parties as to what the salary is intended to compensate. In reducing the customary workweek schedule to 35 hours the parties may agree
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§ 778.324
29 CFR Ch. V (7–1–19 Edition)
to change the basis of the employment
arrangement by providing that the salary which formerly covered a fixed
workweek of 40 hours now covers a
variable workweek up to 40 hours. If
this is the new agreement, the employee receives $200 for workweeks of
varying lengths, such as 35, 36, 38, or 40
hours. His rate thus varies from week
to week, but in weeks of 40 hours or
over, it is $5 per hour (since the agreement of the parties is that the salary
covers up to 40 hours and no more) and
his overtime rate, for hours in excess of
40, thus remains $7.50 per hour. Such a
salary arrangement presumably contemplates that the salary will be paid
in full for any workweek of 40 hours or
less. The employee would thus be entitled to his full salary if he worked only
25 or 30 hours. No deductions for hours
not worked in short workweeks would
be made. (For a discussion of the effect
of deductions on the regular rate, see
§§ 778.304 to 778.307.)
[46 FR 7316, Jan. 23, 1981; 46 FR 33516, June 30,
1981]
scheduled workweek is later reduced to
50 hours, with the understanding between the parties that the salary will
be paid as the employee’s nonovertime
compensation for each workweek of 55
hours or less, his regular rate in any
overtime week of 55 hours or less is determined by dividing the salary by the
number of hours worked to earn it in
that particular week, and additional
half-time, based on that rate, is due for
each hour in excess of 40. In weeks of 55
hours or more, his regular rate remains
$5 per hour and he is due, in addition to
his salary, extra compensation of $2.50
for each hour over 40 but not over 55
and full time and one-half, or $7.50, for
each hour worked in excess of 55. If,
however, the understanding of the parties is that the salary now covers a
fixed workweek of 50 hours, his regular
rate is $5.50 per hour in all weeks. This
assumes that when an employee works
less than 50 hours in a particular week,
deductions are made at a rate of $5.50
per hour for the hours not worked.
[46 FR 7316, Jan. 23, 1981]
§ 778.324 Effect on hourly rate employees.
A similar situation is presented
where employees have been hired at an
hourly rate of pay and have customarily worked a fixed workweek. If the
workweek is reduced from 40 to 35
hours without reduction in total pay,
the average hourly rate is thereby increased as in § 778.322. If the reduction
in work schedule is accompanied by a
new agreement altering the mode of
compensation from an hourly rate
basis to a fixed salary for a variable
workweek up to 40 hours, the results
described in § 778.323 follow.
§ 778.325 Effect on salary covering
more than 40 hours’ pay.
The same reasoning applies to salary
covering straight time pay for a longer
workweek. If an employee whose maximum hours standard is 40 hours was
hired at a fixed salary of $275 for 55
hours of work, he was entitled to a
statutory overtime premium for the 15
hours in excess of 40 at the rate of $2.50
per hour (half-time) in addition to his
salary, and to statutory overtime pay
of $7.50 per hour (time and one-half) for
any hours worked in excess of 55. If the
§ 778.326 Reduction of regular overtime workweek without reduction
of take-home pay.
The reasoning applied in the foregoing sections does not, of course,
apply to a situation in which the
former earnings at both straight time
and overtime are paid to the employee
for the reduced workweek. Suppose an
employee was hired at an hourly rate
of $5 an hour and regularly worked 50
hours, earning $275 as his total straight
time and overtime compensation, and
the parties now agree to reduce the
workweek to 45 hours without any reduction in take-home pay. The parties
in such a situation may agree to an increase in the hourly rate from $5 per
hour to $6 so that for a workweek of 45
hours (the reduced schedule) the employee’s straight time and overtime
earnings will be $285. The parties cannot, however, agree that the employee
is to receive exactly $285 as total compensation (including overtime pay) for
a workweek varying, for example, up to
50 hours, unless he does so pursuant to
contracts specifically permitted in section 7(f) of the Act, as discussed in
§§ 778.402 through 778.414. An employer
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Wage and Hour Division, Labor
§ 778.328
cannot otherwise discharge his statutory obligation to pay overtime compensation to an employee who does not
work the same fixed hours each week
by paying a fixed amount purporting to
cover both straight time and overtime
compensation for an ‘‘agreed’’ number
of hours. To permit such a practice
without proper statutory safeguards
would result in sanctioning the circumvention of the provisions of the
Act which require that an employee
who works more than 40 hours in any
workweek be compensated, in accordance with express congressional intent,
at a rate not less than one and one-half
times his regular rate of pay for the
burden of working long hours. In arrangements of this type, no additional
financial pressure would fall upon the
employer and no additional compensation would be due to the employee
under such a plan until the workweek
exceeded 50 hours.
[46 FR 7316, Jan. 23, 1981]
§ 778.327 Temporary or sporadic reduction in schedule.
(a) The problem of reduction in the
workweek is somewhat different where
a temporary reduction is involved. Reductions for the period of a dead or
slow season follow the rules announced
above. However, reduction on a more
temporary or sporadic basis presents a
different problem. It is obvious that as
a matter of simple arithmetic an employer might adopt a series of different
rates for the same work, varying inversely with the number of overtime
hours worked in such a way that the
employee would earn no more than his
straight time rate no matter how many
hours he worked. If he set the rate at $6
per hour for all workweeks in which
the employee worked 40 hours or less,
approximately $5.93 per hour for workweeks of 41 hours, approximately $5.86
for workweeks of 42 hours, approximately $5.45 for workweeks of 50 hours,
and so on, the employee would always
receive (for straight time and overtime
at these ‘‘rates’’) $6 an hour regardless
of the number of overtime hours
worked. This is an obvious bookkeeping device designed to avoid the
payment of overtime compensation and
is not in accord with the law. See
Walling v. Green Head Bit & Supply Co.,
138 F. 2d 453. The regular rate of pay of
this employee for overtime purposes is,
obviously, the rate he earns in the normal nonovertime week—in this case, $6
per hour.
(b) The situation is different in degree but not in principle where employees who have been at a bona fide $6 rate
usually working 50 hours and taking
home $330 as total straight time and
overtime pay for the week are, during
occasional weeks, cut back to 42 hours.
If the employer raises their rate to
$7.65 for such weeks so that their total
compensation is $328.95 for a 42-hour
week the question may properly be
asked, when they return to the 50–hour
week, whether the $6 rate is really
their regular rate. Are they putting in
8 additional hours of work for that
extra $1.05 or is their ‘‘regular’’ rate
really now $7.65 an hour since this is
what they earn in the short workweek?
It seems clear that where different
rates are paid from week to week for
the same work and where the difference is justified by no factor other
than the number of hours worked by
the individual employee—the longer he
works the lower the rate—the device is
evasive and the rate actually paid in
the shorter or nonovertime week is his
regular rate for overtime purposes in
all weeks.
[46 FR 7317, Jan. 23, 1981; 46 FR 33516, June 30,
1981]
§ 778.328 Plan for gradual permanent
reduction in schedule.
In some cases, pursuant to a definite
plan for the permanent reduction of
the normal scheduled workweek from
say, 48 hours to 40 hours, an agreement
is entered into with a view to lessening
the shock caused by the expected reduction in take-home wages. The
agreement may provide for a rising
scale of rates as the workweek is
gradually reduced. The varying rates
established by such agreement will be
recognized as bona fide in the weeks in
which they are respectively operative
provided that (a) the plan is bona fide
and there is no effort made to evade
the overtime requirements of the Act;
(b) there is a clear downward trend in
the duration of the workweek throughout the period of the plan even though
fluctuations from week-to-week may
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§ 778.329
29 CFR Ch. V (7–1–19 Edition)
not be constantly downward; and (c)
the various rates are operative for substantial periods under the plan and do
not vary from week-to-week in accordance with the number of hours which
any particular employee or group happens to work.
§ 778.329 Alternating workweeks of
different fixed lengths.
In some cases an employee is hired
on a salary basis with the understanding that his weekly salary is intended to cover the fixed schedule of
hours (and no more) and that this fixed
schedule provides for alternating workweeks of different fixed lengths. For
example, many offices operate with
half staff on Saturdays and, in consequence, employees are hired at a
fixed salary covering a fixed working
schedule of 7 hours a day Monday
through Friday and 5 hours on alternate Saturdays. The parties agree that
extra compensation is to be paid for all
hours worked in excess of the schedule
in either week at the base rate for
hours between 35 and 40 in the short
week and at time and one-half such
rate for hours in excess of 40 in all
weeks. Such an arrangement results in
the employee’s working at two different rates of pay—one thirty-fifth of
the salary in short workweeks and onefourtieth of the salary in the longer
weeks. If the provisions of such a contract are followed, if the nonovertime
hours are compensated in full at the
applicable regular rate in each week
and overtime compensation is properly
computed for hours in excess of 40 at
time and one-half the rate applicable
in the particular workweek, the overtime requirements of the Fair Labor
Standards Act will be met. While this
situation bears some resemblance to
the one discussed in § 778.327 there is
this significant difference; the arrangement is permanent, the length of the
respective workweeks and the rates for
such weeks are fixed on a permanentschedule basis far in advance and are
therefore not subject to the control of
the employer and do not vary with the
fluctuations in business. In an arrangement of this kind, if the employer required the employee to work on Saturday in a week in which he was scheduled for work only on the Monday
through Friday schedule, he would be
paid at his regular rate for all the Saturday hours in addition to his salary.
PRIZES AS BONUSES
§ 778.330 Prizes or contest awards generally.
All compensation (except statutory
exclusions) paid by or on behalf of an
employer to an employee as remuneration for employment must be included
in the regular rate, whether paid in the
form of cash or otherwise. Prizes are
therefore included in the regular rate if
they are paid to an employee as remuneration for employment. If therefore
it is asserted that a particular prize is
not to be included in the regular rate,
it must be shown either that the prize
was not paid to the employee for employment, or that it is not a thing of
value which is part of wages.
§ 778.331 Awards for performance on
the job.
Where a prize is awarded for the quality, quantity or efficiency of work done
by the employee during his customary
working hours at his normal assigned
tasks (whether on the employer’s
premises or elsewhere) it is obviously
paid as additional remuneration for
employment. Thus prizes paid for cooperation, courtesy, efficiency, highest
production, best attendance, best quality of work, greatest number of overtime hours worked, etc., are part of the
regular rate of pay. If the prize is paid
in cash, the amount paid must be allocated (for the method of allocation see
§ 778.209) over the period during which
it was earned to determine the resultant increase in the average hourly rate
for each week of the period. If the prize
is merchandise, the cost to the employer is the sum which must be allocated. Where the prize is either cash or
merchandise, with the choice left the
employee, the amount to be allocated
is the amount (or the cost) of the actual prize he accepts.
§ 778.332 Awards for activities not normally part of employee’s job.
(a) Where the prize is awarded for activities outside the customary working
hours of the employee, beyond the
scope of his customary duties or away
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Wage and Hour Division, Labor
§ 778.400
from the employer’s premises, the
question of whether the compensation
is remuneration for employment will
depend on such factors as the amount
of time, if any, spent by the employee
in competing, the relationship between
the contest activities and the usual
work of the employee, whether the
competition involves work usually performed by other employees for employers, whether an employee is specifically urged to participate or led to believe that he will not merit promotion
or advancement unless he participates.
(b) By way of example, a prize paid
for work performed in obtaining new
business for an employer would be regarded as remuneration for employment. Although the duties of the employees who participate in the contest
may not normally encompass this type
of work, it is work of a kind normally
performed by salesmen for their employers, and the time spent by the employee in competing for such a prize
(whether successfully or not) is working time and must be counted as such
in determining overtime compensation
due under the Act. On the other hand a
prize or bonus paid to an employee
when a sale is made by the company’s
sales representative to a person whom
he recommended as a good sales prospect would not be regarded as compensation for services if in fact the
prize-winner performed no work in securing the name of the sales prospect
and spent no time on the matter for
the company in any way.
value to the company of the suggestion
which is submitted; and
(b) The prize represents a bona fide
award for a suggestion which is the result of additional effort or ingenuity
unrelated to and outside the scope of
the usual and customary duties of any
employee of the class eligible to participate and the prize is not used as a
substitute for wages; and
(c) No employee is required or specifically urged to participate in the
suggestion system plan or led to believe that he will not merit promotion
or advancement (or retention of his existing job) unless he submits suggestions; and
(d) The invitation to employees to
submit suggestions is general in nature
and no specific assignment is outlined
to employees (either as individuals or
as a group) to work on or develop; and
(e) There is no time limit during
which suggestions must be submitted;
and
(f) The employer has, prior to the
submission of the suggestion by an employee, no notice or knowledge of the
fact that an employee is working on
the preparation of a suggestion under
circumstances indicating that the company approved the task and the schedule of work undertaken by the employee.
§ 778.333
§ 778.400 The provisions of section
7(g)(3) of the Act.
Section 7(g)(3) of the Act provides the
following exception from the provisions of section 7(a):
Suggestion system awards.
The question has been raised whether
awards made to employees for suggestions submitted under a suggestion
system plan are to be regarded as part
of the regular rate. There is no hard
and fast rule on this point as the term
‘‘suggestion system’’ has been used to
describe a variety of widely differing
plans. It may be generally stated, however, that prizes paid pursuant to a
bona fide suggestion system plan may
be excluded from the regular rate at
least in situations where it is the fact
that:
(a) The amount of the prize has no relation to the earnings of the employee
at his job but is rather geared to the
Subpart E—Exceptions From the
Regular Rate Principles
COMPUTING OVERTIME PAY ON AN
‘‘ESTABLISHED’’ RATE
(g) No employer shall be deemed to have
violated subsection (a) by employing any
employee for a workweek in excess of the
maximum workweek applicable to such employee under such subsection if, pursuant to
an agreement or understanding arrived at
between the employer and the employee before performance of the work, the amount
paid to the employee for the number of hours
worked by him in such workweek in excess
of the maximum workweek applicable to
such employee under such subsection:
*
*
*
*
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*
§ 778.401
29 CFR Ch. V (7–1–19 Edition)
(3) is computed at a rate not less than one
and one-half times the rate established by
such agreement or understanding as the
basic rate to be used in computing overtime
compensation thereunder: Provided, That the
rate so established shall be authorized by
regulation by the Secretary of Labor as
being substantially equivalent to the average hourly earnings of the employee, exclusive of overtime premiums, in the particular
work over a representative period of time;
and if (1) the employee’s average hourly
earnings for the workweek exclusive of payments described in paragraphs (1) through (7)
of subsection (e) are not less than the minimum hourly rate required by applicable
law, and (ii) extra overtime compensation is
properly computed and paid on other forms
of additional pay required to be included in
computing the regular rate.
§ 778.401 Regulations
section 7(g)(3).
issued
under
Regulations issued pursuant to section 7(g) (3) of the Act are published as
Part 548 of this chapter. Payments
made in conformance with these regulations satisfy the overtime pay requirements of the Act.
GUARANTEED COMPENSATION WHICH
INCLUDES OVERTIME PAY
§ 778.402 The statutory exception provided by section 7(f) of the Act.
Section 7(f) of the Act provides the
following exception from the provisions of section 7(a):
(f) No employer shall be deemed to have
violated subsection (a) by employing any
employee for a workweek in excess of the
maximum workweek applicable to such employee under subsection (a) if such employee
is employed pursuant to a bona fide individual contract, or pursuant to an agreement
made as a result of collective bargaining by
representatives of employees, if the duties of
such employee necessitate irregular hours of
work, and the contract or agreement (1)
specifies a regular rate of pay of not less
than the minimum hourly rate provided in
subsection (a) or (b) of section 6 (whichever
may be applicable) and compensation at not
less than one and one-half times such rate
for all hours worked in excess of such maximum workweek, and (2) provides a weekly
guaranty of pay for not more than 60 hours
based on the rates so specified.
§ 778.403 Constant pay for varying
workweeks including overtime is
not permitted except as specified in
section 7(f).
Section 7(f) is the only provision of
the Act which allows an employer to
pay the same total compensation each
week to an employee who works overtime and whose hours of work vary
from week to week. (See in this connection the discussion in §§ 778.207,
778.321–778.329, and 778.308–778.315.) Unless the pay arrangements in a particular situation meet the requirements of section 7(f) as set forth, all
the compensation received by the employee under a guaranteed pay plan is
included in his regular rate and no part
of such guaranteed pay may be credited
toward overtime compensation due
under the Act. Section 7(f) is an exemption from the overtime provisions of
the Act. No employer will be exempt
from the duty of computing overtime
compensation for an employee under
section 7(a) unless the employee is paid
pursuant to a plan which actually
meets all the requirements of the exemption. These requirements will be
discussed separately in the ensuing sections.
§ 778.404
Purposes of exemption.
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;
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Wage and Hour Division, Labor
§ 778.406
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).
§ 778.405 What types of employees are
affected.
The type of employment agreement
permitted under section 7(f) can be
made only with (or by his representatives on behalf of) an employee whose
‘‘duties * * * necessitate irregular
hours of work.’’ It is clear that no contract made with an employee who
works a regularly scheduled workweek
or whose schedule involves alternating
fixed workweeks will qualify under this
subsection. Even if an employee does in
fact work a variable workweek, the
question must still be asked whether
his duties necessitate irregular hours
of work. The subsection is not designed
to apply in a situation where the hours
of work vary from week to week at the
discretion of the employer or the employee, nor to a situation where the
employee works an irregular number of
hours according to a predetermined
schedule. The nature of the employee’s
duties must be such that neither he nor
his employer can either control or anticipate with any degree of certainty
the number of hours he must work
from week to week. Furthermore, for
the reasons set forth in § 778.406, his duties must necessitate significant variations in weekly hours of work both
below and above the statutory weekly
limit on nonovertime hours. Some examples of the types of employees whose
duties may necessitate irregular hours
of work would be outside buyers, oncall servicemen, insurance adjusters,
newspaper
reporters
and
photographers, propmen, script girls and others engaged in similar work in the motion picture industry, firefighters,
troubleshooters and the like. There are
some employees in these groups whose
hours of work are conditioned by factors beyond the control of their employer or themselves. However, the
mere fact that an employee is engaged
in one of the jobs just listed, for example, does not mean that his duties necessitate irregular hours. It is always a
question of fact whether the particular
employee’s duties do or do not necessitate irregular hours. Many employees
not listed here may qualify. Although
office employees would not ordinarily
qualify, some office employees whose
duties compel them to work variable
hours could also be in this category.
For example, the confidential secretary of a top executive whose hours
of work are irregular and unpredictable
might also be compelled by the nature
of her duties to work variable and unpredictable hours. This would not ordinarily be true of a stenographer or file
clerk, nor would an employee who only
rarely or in emergencies is called upon
to work outside a regular schedule
qualify for this exemption.
§ 778.406 Nonovertime hours as well as
overtime hours must be irregular if
section 7(f) is to apply.
Any employment in which the employee’s hours fluctuate only in the
overtime range above the maximum
workweek prescribed by the statute
lacks the irregularity of hours for
which the Supreme Court found the socalled ‘‘Belo’’ contracts appropriate
and so fails to meet the requirements
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§ 778.407
29 CFR Ch. V (7–1–19 Edition)
of section 7(f) which were designed to
validate, subject to express statutory
limitations, contracts of a like kind in
situations of the type considered by
the Court (see § 778.404). Nothing in the
legislative history of section 7(f) suggests any intent to suspend the normal
application of the general overtime
provisions of section 7(a) in situations
where the weekly hours of an employee
fluctuate only when overtime work in
excess of the prescribed maximum
weekly hours is performed. Section 7(a)
was specifically designed to deal with
such a situation by making such regular resort to overtime more costly to
the employer and thus providing an inducement to spread the work rather
than to impose additional overtime
work on employees regularly employed
for a workweek of the maximum statutory length. The ‘‘security of a regular
weekly income’’ which the Supreme
Court viewed as an important feature
of the ‘‘Belo’’ wage plan militating
against a holding that the contracts
were invalid under the Act is, of
course, already provided to employees
who regularly work at least the maximum number of hours permitted without overtime pay under section 7(a).
Their situation is not comparable in
this respect to employees whose duties
cause their weekly hours to fluctuate
in such a way that some workweeks
are short and others long and they cannot, without some guarantee, know in
advance whether in a particular workweek they will be entitled to pay for
the regular number of hours of nonovertime work contemplated by section 7(a). It is such employees whose
duties necessitate ‘‘irregular hours’’
within the meaning of section 7(f) and
whose ‘‘security of a regular weekly income’’ can be assured by a guarantee
under that section which will serve to
increase their hourly earnings in short
workweeks under the statutory maximum hours. It is this benefit to the
employee that the Supreme Court
viewed, in effect, as a quid pro quo
which could serve to balance a relaxation of the statutory requirement, applicable in other cases, that any overtime work should cost the employer 50
percent more per hour. In the enactment of section 7(f), as in the enactment of section 7(b) (1) and (2), the ben-
efits that might inure to employees
from a balancing of long workweeks
against short workweeks under prescribed safeguards would seem to be
the reason most likely to have influenced the legislators to provide express
exemptions from the strict application
of section 7(a). Consequently, where
the fluctuations in an employee’s hours
of work resulting from his duties involve only overtime hours worked in
excess of the statutory maximum
hours, the hours are not ‘‘irregular’’
within the purport of section 7(f) and a
payment plan lacking this factor does
not qualify for the exemption. (See
Goldberg v. Winn-Dixie Stores (S.D.
Fla.), 15 WH Cases 641; Wirtz v. Midland
Finance Co. (N.D. Ga.), 16 WH Cases 141;
Trager v. J. E. Plastics Mfg. Co.
(S.D.N.Y.), 13 WH Cases 621; McComb v.
Utica Knitting Co., 164 F. 2d 670; Foremost Dairies v. Wirtz, 381 F. 2d 653 (C.A.
5).)
§ 778.407 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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Wage and Hour Division, Labor
§ 778.409
§ 778.408 The specified regular rate.
(a) To qualify under section 7(f), the
contract must specify ‘‘a regular rate
of pay of not less than the minimum
hourly rate provided in subsection (a)
or (b) of section 6 (whichever may be
applicable).’’ The word ‘‘regular’’ describing the rate in this provision is
not to be treated as surplusage. To understand the nature of this requirement it is important to consider the
past history of this type of agreement
in the courts. In both of the two cases
before it, the Supreme Court found
that the relationship between the hourly rate specified in the contract and
the amount guaranteed was such that
the employee in a substantial portion
of the workweeks of the period examined by the court worked sufficient
hours to earn in excess of the guaranteed amount and in those workweeks
was paid at the specified hourly rate
for the first 40 hours and at time and
one-half such rate for hours in excess
of 40 (Walling v. A. H. Belo Company, 316
U.S. 624, and Walling v. Halliburton Oil
Well Cementing Company, 331 U.S.17).
The fact that section 7(f) requires that
a contract, to qualify an employee for
exemption under section 7(f), must
specify a ‘‘regular rate,’’ indicates that
this criterion of these two cases is still
important.
(b) The regular rate of pay specified
in the contract may not be less than
the applicable minimum rate. There is
no requirement, however, that the regular rate specified be equal to the regular rate at which the employee was
formerly employed before the contract
was entered into. The specified regular
rate may be any amount (at least the
applicable minimum wage) which the
parties agree to and which can reasonably be expected to be operative in controlling the employee’s compensation.
(c) The rate specified in the contract
must also be a ‘‘regular’’ rate which is
operative in determining the total
amount of the employee’s compensation. Suppose, for example, that the
compensation of an employee is normally made up in part by regular bonuses, commissions, or the like. In the
past he has been employed at an hourly
rate of $5 per hour in addition to which
he has received a cost-of-living bonus
of $7 a week and a 2-percent commis-
sion on sales which averaged $70 per
week. It is now proposed to employ him
under a guaranteed pay contract which
specifies a rate of $5 per hour and guarantees $200 per week, but he will continue to receive his cost-of-living
bonus and commissions in addition to
the guaranteed pay. Bonuses and commissions of this type are, of course, included in the ‘‘regular rate’’ as defined
in section 7(e). It is also apparent that
the $5 rate specified in the contract is
not a ‘‘regular rate’’ under the requirements of section 7(f) since it never controls or determines the total compensation he receives. For this reason,
it is not possible to enter into a guaranteed pay agreement of the type permitted under section 7(f) with an employee whose regular weekly earnings
are made up in part by the payment of
regular bonuses and commissions of
this type. This is so because even in
weeks in which the employee works
sufficient hours to exceed, at his hourly rate, the sum guaranteed, his total
compensation is controlled by the
bonus and the amount of commissions
earned as well as by the hourly rate.
(d) In order to qualify as a ‘‘regular
rate’’ under section 7(f) the rate specified in the contract together with the
guarantee must be the actual measure
of the regular wages which the employee receives. However, the payment
of extra compensation, over and above
the guaranteed amount, by way of
extra premiums for work on holidays,
or for extraordinarily excessive work
(such as for work in excess of 16 consecutive hours in a day, or for work in
excess of 6 consecutive days of work),
year-end bonuses and similar payments
which are not regularly paid as part of
the employee’s usual wages, will not
invalidate a contract which otherwise
qualifies under section 7(f).
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7317, Jan. 23, 1981]
§ 778.409 Provision for overtime pay.
The section 7(f) contract must provide for compensation at not less than
one and one-half times the specified
regular rate for all hours worked in excess of the applicable maximum hours
standard for the particular workweek.
All excessive hours, not merely those
covered by the guarantee, must be
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§ 778.410
29 CFR Ch. V (7–1–19 Edition)
compensated at one and one-half times
(or a higher multiple) of the specified
regular rate. A contract which guaranteed a weekly salary of $169, specified a
rate of $3.60 per hour, and provided that
not less than one and one-half times
such rate would be paid only for all
hours up to and including 462⁄3 hours
would not qualify under this section.
The contract must provide for payment
at time and one-half (or more) for all
hours in excess of the applicable maximum hours standard in any workweek. A contract may provide a specific overtime rate greater than one
and one-half times the specified rate,
for example, double time. If it does provide a specific overtime rate it must
provide that such rate will be paid for
all hours worked in excess of the applicable maximum hours standard.
[46 FR 7317, Jan. 23, 1981]
§ 778.410 The guaranty under section
7(f).
(a) The statute provides that the
guaranty must be a weekly guaranty.
A guaranty of monthly, semimonthly,
or biweekly pay (which would allow
averaging wages over more than one
workweek) does not qualify under this
paragraph. Obviously guarantees for
periods less than a workweek do not
qualify. Whatever sum is guaranteed
must be paid in full in all workweeks,
however short in which the employee
performs any amount of work for the
employer. The amount of the guaranty
may not be subject to proration or deduction in short weeks.
(b) The contract must provide a guaranty of pay. The amount must be specified. A mere guaranty to provide work
for a particular number of hours does
not qualify under this section.
(c) The pay guaranteed must be ‘‘for
not more than 60 hours based on the
rate so specified.’’
§ 778.411 Sixty-hour limit on pay guaranteed by contract.
The amount of weekly pay guaranteed may not exceed compensation due
at the specified regular rate for the applicable maximum hours standard and
at the specified overtime rate for the
additional hours, not to exceed a total
of 60 hours. Thus, if the maximum
hours standard is 40 hours and the spec-
ified regular rate is $5 an hour the
weekly guaranty cannot be greater
than $350. This does not mean that an
employee employed pursuant to a guaranteed pay contract under this section
may not work more than 60 hours in
any week; it means merely that pay in
an amount sufficient to compensate for
a greater number of hours cannot be
covered by the guaranteed pay. If he
works in excess of 60 hours he must be
paid, for each hour worked in excess of
60, overtime compensation as provided
in the contract, in addition to the
guaranteed amount.
[46 FR 7317, Jan. 23, 1981]
§ 778.412 Relationship
between
amount guaranteed and range of
hours employee may be expected to
work.
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 Walling v. A. H. Belo Co.,
316 U.S. 624 and Walling v. Halliburton
Oil Well Cementing Co., 331 U.S. 17 the
court found that the employees did actually exceed the number of hours (60
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Wage and Hour Division, Labor
§ 778.414
and 84 respectively) for which pay was
guaranteed on fairly frequent occasions
so that the hourly rate stipulated in
the contract in each case was often operative and did actually control the
compensation received by the employees. In cases where the guaranteed
number of hours has not been exceeded
in a significant number of workweeks,
this fact will be weighed in the light of
all the other facts and circumstances
pertinent to the agreement before
reaching a conclusion as to its effect
on the validity of the pay arrangement.
By a periodic review of the actual operation of the contract the employer can
determine whether a stipulated contract rate reasonably expected by the
parties to be operative in a significant
number of workweeks is actually so operative or whether adjustments in the
contract are necessary to ensure such
an operative rate.
§ 778.413 Guaranty must be based on
rates specified in contract.
The guaranty of pay must be ‘‘based
on the rate so specified,’’ in the contract. If the contract specifies a regular rate of $5 and an overtime rate of
$7.50 and guarantees pay for 50 hours
and the maximum hours standard is 40
hours, the amount of the guaranty
must be $275, if it is to be based on the
rates so specified. A guaranty of $290 in
such a situation would not, obviously,
be based on the rates specified in the
contract. Moreover, a contract which
provides a variety of different rates for
shift differentials, arduous or hazardous work, stand-by time, piece-rate
incentive bonuses, commissions or the
like in addition to a specified regular
rate and a specified overtime rate with
a guaranty of pay of, say, $290 from all
sources would not qualify under this
section, since the guaranty of pay in
such a case is not based on the regular
and overtime rates specified in the contract.
[46 FR 7318, Jan. 23, 1981]
§ 778.414 ‘‘Approval’’
of
contracts
under section 7(f).
(a) There is no requirement that a
contract, to qualify under section 7(f),
must be approved by the Secretary of
Labor or the Administrator. The question of whether a contract which pur-
ports to qualify an employee for exemption under section 7(f) meets the
requirements is a matter for determination by the courts. This determination will in all cases depend not
merely on the wording of the contract
but upon the actual practice of the parties thereunder. It will turn on the
question of whether the duties of the
employee in fact necessitate irregular
hours, whether the rate specified in the
contract is a ‘‘regular rate’’—that is,
whether it was designed to be actually
operative in determining the employee’s compensation—whether the contract was entered into in good faith,
whether the guaranty of pay is in fact
based on the regular and overtime
rates specified in the contract. While
the Administrator does have the authority to issue an advisory opinion as
to whether or not a pay arrangement
accords with the requirements of section 7(f) he can do so only if he has
knowledge of these facts.
(b) As a guide to employers, it may
be helpful to describe a fact situation
in which the making of a guaranteed
salary contract would be appropriate
and to set forth the terms of a contract
which would comply, in the circumstances described, with the provisions of section 7(f).
Example: An employee is employed as an
insurance claims adjuster; because of the
fact that he must visit claimants and witnesses at their convenience, it is impossible
for him or his employer to control the hours
which he must work to perform his duties.
During the past 6 months his weekly hours of
work have varied from a low of 30 hours to a
high of 58 hours. His average workweek for
the period was 48 hours. In about 80 percent
of the workweeks he worked less than 52
hours. It is expected that his hours of work
will continue to follow this pattern. The parties agree upon a regular rate of $5 per hour.
In order to provide for the employee the security of a regular weekly income the parties further agree to enter into a contract
which provides a weekly guaranty of pay. If
the applicable maximum hours standard is 40
hours, guaranty of pay for a workweek somewhere between 48 hours (his average week)
and 52 would be reasonable. In the circumstances described the following contract
would be appropriate.
The X Company hereby agrees to employ
John Doe as a claims adjuster at a regular
hourly rate of pay of $5 per hour for the first
40 hours in any workweek and at the rate of
$7.50 per hour for all hours in excess of 40 in
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§ 778.415
29 CFR Ch. V (7–1–19 Edition)
any workweek, with a guarantee that John
Doe will receive, in any week in which he
performs any work for the company, the sum
of $275 as total compensation, for all work
performed up to and including 50 hours in
such workweek.
(c) The situation described in paragraph (b) of this section is merely an
example and nothing herein is intended
to imply that contracts which differ
from the example will not meet the requirements of section 7(f).
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7318, Jan. 23, 1981]
COMPUTING OVERTIME PAY ON THE RATE
APPLICABLE TO THE TYPE OF WORK
PERFORMED IN OVERTIME HOURS
(SECS. 7(g)(1) AND (2))
§ 778.415
The statutory provisions.
Sections 7(g) (1) and (2) of the Act
provide:
(g) No employer shall be deemed to have
violated subsection (a) by employing any
employee for a workweek in excess of the
maximum workweek applicable to such employee under such subsection if, pursuant to
an agreement or understanding arrived at
between the employer and the employee before performance of the work, the amount
paid to the employee for the number of hours
worked by him in such workweek in excess
of the maximum workweek applicable to
such employee under such subsection:
(1) In the case of an employee employed at
piece rates, is computed at piece rates not
less than one and one-half times the bona
fide piece rates applicable to the same work
when performed during nonovertime hours;
or
(2) In the case of an employee performing
two or more kinds of work for which different hourly or piece rates have been established, is computed at rates not less than one
and one-half times such bona fide rates applicable to the same work when performed
during nonovertime hours;
*
*
*
*
*
and if (i) the employee’s average hourly
earnings for the workweek exclusive of payments described in paragraphs (1) through (7)
of subsection (e) are not less than the minimum hourly rate required by applicable
law, and (ii) extra overtime compensation is
properly computed and paid on other forms
of additional pay required to be included in
computing the regular rate.
§ 778.416
Purpose of provisions.
The purpose of the provisions set
forth in § 778.415 is to provide an exception from the requirement of computing overtime pay at not less than
one and one-half times the regular rate
for hours worked in excess of the applicable maximum hours standard for a
particular workweek and to allow,
under specified conditions, a simpler
method of computing overtime pay for
employees paid on the basis of a piece
rate, or at a variety of hourly rates or
piece rates, or a combination thereof.
This provision is not designed to exclude any group of employees from the
overtime benefits of the Act. The intent of the provision is merely to simplify the method of computation while
insuring the receipt by the affected
employees of substantially the same
amount of overtime compensation.
§ 778.417 General requirements of section 7(g).
The following general requirements
must be met in every case before the
overtime
computation
authorized
under section 7(g)(1) or (2) may be utilized.
(a) First, in order to insure that the
method of computing overtime pay
permitted in this section will not in
any circumstances be seized upon as a
device for avoiding payment of the
minimum wage due for each hour, the
requirement must be met that employee’s average hourly earnings for the
workweek (exclusive of overtime pay
and of all other pay which is excluded
from the regular rate) are not less than
the minimum. This requirement insures that the employer cannot pay
subminimum nonovertime rates with a
view to offsetting part of the compensation earned during the overtime
hours against the minimum wage due
for the workweek.
(b) Second, in order to insure that
the method of computing overtime pay
permitted in this section will not be
used to circumvent or avoid the payment of proper overtime compensation
due on other sums paid to employees,
such as bonuses which are part of the
regular rate, the section requires that
extra overtime compensation must be
properly computed and paid on other
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Wage and Hour Division, Labor
§ 778.421
forms of additional pay required to be
included in computing the regular rate.
§ 778.418 Pieceworkers.
(a) Under section 7(g)(1), an employee
who is paid on the basis of a piece rate
for the work performed during nonovertime hours may agree with his employer in advance of the performance
of the work that he shall be paid at a
rate not less than one and one-half
times this piece rate for each piece produced during the overtime hours. No
additional overtime pay will be due
under the Act provided that the general conditions discussed in § 778.417 are
met and:
(1) The piece rate is a bona fide rate;
(2) The overtime hours for which the
overtime rate is paid qualify as overtime hours under section 7(e) (5), (6), or
(7);
(3) The number of overtime hours for
which such overtime piece rate is paid
equals or exceeds the number of hours
worked in excess of the applicable maximum hours standard for the particular
workweek; and
(4) The compensation paid for the
overtime hours is at least equal to pay
at one and one-half times the applicable minimum rate for the total number
of hours worked in excess of the applicable maximum hours standard.
(b) The piece rate will be regarded as
bona fide if it is the rate actually paid
for work performed during the nonovertime hours and if it is sufficient to
yield at least the minimum wage per
hour.
(c) If a pieceworker works at two or
more kinds of work for which different
straight time piece rates have been established, and if by agreement he is
paid at a rate not less than one and
one-half whichever straight time piece
rate is applicable to the work performed during the overtime hours, such
piece rate or rates must meet all the
tests set forth in this section and the
general tests set forth in § 778.417 in
order to satisfy the overtime requirements of the Act under section 7(g) (2).
§ 778.419 Hourly workers employed at
two or more jobs.
(a) Under section 7(g)(2) an employee
who performs two or more different
kinds of work, for which different
straight time hourly rates are established, may agree with his employer in
advance of the performance of the work
that he will be paid during overtime
hours at a rate not less than one and
one-half times the hourly nonovertime
rate established for the type of work he
is performing during such overtime
hours. No additional overtime pay will
be due under the act provided that the
general requirements set forth in
§ 778.417 are met and;
(1) The hourly rate upon which the
overtime rate is based in a bona fide
rate;
(2) The overtime hours for which the
overtime rate is paid qualify as overtime hours under section 7(e) (5), (6), or
(7); and
(3) The number of overtime hours for
which the overtime rate is paid equals
or exceeds the number of hours worked
in excess of the applicable maximum
hours standard.
(b) An hourly rate will be regarded as
a bona fide rate for a particular kind of
work it is equal to or greater than the
applicable minimum rate therefor and
if it is the rate actually paid for such
work when performed during nonovertime hours.
§ 778.420 Combined hourly rates and
piece rates.
Where an employee works at a combination of hourly and piece rates, the
payment of a rate not less than one
and one-half times the hourly or piece
rate applicable to the type of work
being performed during the overtime
hours will meet the overtime requirements of the Act if the provisions concerning piece rates (as discussed in
§ 778.418) and those concerning hourly
rates (as discussed in § 778.419) are respectively met.
§ 778.421 Offset hour for hour.
Where overtime rates are paid pursuant to statute or contract for hours in
excess of 8 in a day, or in excess of the
applicable maximum hours standard,
or in excess of the employees’ normal
working hours or regular working
hours (as under section 7(e)(5) or for
work on ‘‘special days’’ (as under section 7(e)(6), or pursuant to an applicable employment agreement for work
outside of the hours established in good
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§ 778.500
29 CFR Ch. V (7–1–19 Edition)
faith by the agreement as the basic,
normal, or regular workday (not exceeding 8 hours) or workweek (not exceeding the applicable maximum hours
standard) (under section 7(e) (7), the requirements of section 7(g) (1) and
7(g)(2) will be met if the number of
such hours during which overtime
rates were paid equals or exceeds the
number of hours worked in excess of
the applicable maximum hours standard for the particular workweek. It is
not necessary to determine whether
the total amount of compensation paid
for such hours equals or exceeds the
amount of compensation which would
be due at the applicable rates for work
performed during the hours after the
applicable maximum in any workweek.
Subpart F—Pay Plans Which
Circumvent the Act
DEVICES TO EVADE THE OVERTIME
REQUIREMENTS
§ 778.500 Artificial regular rates.
(a) Since the term regular rate is defined to include all remuneration for
employment (except statutory exclusions) whether derived from hourly
rates, piece rates, production bonuses
or other sources, the overtime provisions of the act cannot be avoided by
setting an artificially low hourly rate
upon which overtime pay is to be based
and making up the additional compensation due to employees by other
means. The established hourly rate is
the ‘‘regular rate’’ to an employee only
if the hourly earnings are the sole
source of his compensation. Payment
for overtime on the basis of an artificial ‘‘regular’’ rate will not result in
compliance with the overtime provisions of the Act.
(b) It may be helpful to describe a few
schemes that have been attempted and
to indicate the pitfalls inherent in the
adoption of such schemes. The device
of the varying rate which decreases as
the length of the workweek increases
has already been discussed in §§ 778.321
through 778.329. It might be well, however, to re-emphasize that the hourly
rate paid for the identical work during
the hours in excess of the applicable
maximum hours standard cannot be
lower than the rate paid for the non-
overtime hours nor can the hourly rate
vary from week to week inversely with
the length of the workweek. It has
been pointed out that, except in limited situations under contracts which
qualify under section 7(f), it is not possible for an employer lawfully to agree
with his employees that they will receive the same total sum, comprising
both straight time and overtime compensation, in all weeks without regard
to the number of overtime hours (if
any) worked in any workweek. The result cannot be achieved by the payment of a fixed salary or by the payment of a lump sum for overtime or by
any other method or device.
(c) Where the employee is hired at a
low hourly rate supplemented by facilities furnished by the employer, bonuses
(other than those excluded under section 7(e)), commissions, pay ostensibly
(but not actually) made for idle hours,
or the like, his regular rate is not the
hourly rate but is the rate determined
by dividing his total compensation
from all these sources in any workweek
by the number of hours worked in the
week. Payment of overtime compensation based on the hourly rate alone in
such a situation would not meet the
overtime requirements of the Act.
(d) One scheme to evade the full penalty of the Act was that of setting an
arbitrary low hourly rate upon which
overtime compensation at time and
one-half would be computed for all
hours worked in excess of the applicable maximum hours standard; coupled
with this arrangement was a guarantee
that if the employee’s straight time
and overtime compensation, based on
this rate, fell short, in any week, of the
compensation that would be due on a
piece-rate basis of x cents per piece,
the employee would be paid on the
piece-rate basis instead. The hourly
rate was set so low that it never (or
seldom) was operative. This scheme
was found by the Supreme Court to be
violative of the overtime provisions of
the Act in the case of Walling v.
Youngerman-Reynolds Hardwood Co., 325
U.S. 427. The regular rate of the employee involved was found to be the
quotient of total piece-rate earnings
paid in any week divided by the total
hours worked in such week.
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Wage and Hour Division, Labor
§ 778.502
(e) The scheme is no better if the employer agrees to pay straight time and
overtime compensation on the arbitrary hourly rates and to make up the
difference between this total sum and
the piece-rate total in the form of a
bonus to each employee. (For further
discussion of the refinements of this
plan, see §§ 778.502 and 778.503.)
§ 778.501 The ‘‘split-day’’ plan.
(a) Another device designed to evade
the overtime requirements of the Act
was a plan known as the ‘‘Poxon’’ or
‘‘split-day’’ plan. Under this plan the
normal or regular workday is artificially divided into two portions one of
which is arbitrarily labeled the
‘‘straight time’’ portion of the day and
the other the ‘‘overtime’’ portion.
Under such a plan, an employee who
would ordinarily command an hourly
rate of pay well in excess of the minimum for his work is assigned a low
hourly rate (often the minimum) for
the first hour (or the first 2 or 4 hours)
of each day. This rate is designated as
the regular rate: ‘‘time and one-half’’
based on such rate is paid for each additional hour worked during the workday. Thus, for example, an employee is
arbitrarily assigned an hourly rate of
$5 per hour under a contract which provides for the payment of so-called
‘‘overtime’’ for all hours in excess of 4
per day. Thus, for the normal or regular 8-hour day the employee would receive $20 for the first 4 hours and $30
for the remaining 4 hours; and a total
of $50 for 8 hours. (This is exactly what
he would receive at the straight time
rate of $6.25 per hour.) On the sixth 8hour day the employee likewise receives $50 and the employer claims to
owe no additional overtime pay under
the statute since he has already compensated the employee at ‘‘overtime’’
rates for 20 hours of the workweek.
(b) Such a division of the normal 8hour workday into 4 straight time
hours and 4 overtime hours is purely
fictitious. The employee is not paid at
the rate of $5 an hour and the alleged
overtime rate of $7.50 per hour is not
paid for overtime work. It is not geared
either to hours ‘‘in excess of the employee’s normal working hours or regular working hours’’ (section 7(e)(5) or
for work ‘‘outside of the hours estab-
lished in good faith * * * as the basic,
normal, or regular workday’’ (section
7(e) (7)) and it cannot therefore qualify
as an overtime rate. The regular rate
of pay of the employee in this situation
is $6.25 per hour and he is owed additional overtime compensation, based
on this rate, for all hours in excess of
the applicable maximum hours standard. This rule was settled by the Supreme Court in the case of Walling v.
Helmerich & Payne, 323 U.S. 37, and its
validity has been reemphasized by the
definition of the term ‘‘regular rate’’ in
section 7(e) of the Act as amended.
[46 FR 7318, Jan. 23, 1981; 46 FR 33516, June 30,
1981]
PSEUDO-BONUSES
§ 778.502 Artificially labeling part of
the regular wages a ‘‘bonus’’.
(a) The term ‘‘bonus’’ is properly applied to a sum which is paid as an addition to total wages usually because of
extra effort of one kind or another, or
as a reward for loyal service or as a
gift. The term is improperly applied if
it is used to designate a portion of regular wages which the employee is entitled to receive under his regular wage
contract.
(b) For example, if an employer has
agreed to pay an employee $300 a week
without regard to the number of hours
worked, the regular rate of pay of the
employee is determined each week by
dividing the $300 salary by the number
of hours worked in the week. The situation is not altered if the employer
continues to pay the employee, whose
applicable maximum hours standard is
40 hours, the same $300 each week but
arbitrarily breaks the sum down into
wages for the first 40 hours at an hourly rate of $4.80 an hour, overtime compensation at $7.20 per hour and labels
the balance a ‘‘bonus’’ (which will vary
from week to week, becoming smaller
as the hours increase and vanishing entirely in any week in which the employee works 55 hours or more). The
situation is in no way bettered if the
employer, standing by the logic of his
labels, proceeds to compute and pay
overtime compensation due on this
‘‘bonus’’ by prorating it back over the
hours of the workweek. Overtime compensation has still not been properly
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§ 778.503
29 CFR Ch. V (7–1–19 Edition)
computed for this employee at his regular rate.
(c) An illustration of how the plan
works over a 3-week period may serve
to illustrate this principle more clearly:
(1) In the first week the employee
whose applicable maximum hours
standard is 40 hours, works 40 hours
and receives $300. The books show he
has received $192 (40 hours × $4.80 an
hour) as wages and $108 as bonus. No
overtime has been worked so no overtime compensation is due.
(2) In the second week he works 45
hours and receives $300. The books
show he has received $192 for the first
40 hours and $36 (5 hours × $7.20 an
hour) for the 5 hours over 40, or a total
of $228 as wages, and the balance as a
bonus of $72. Overtime compensation is
then computed by the employer by dividing $72 by 45 hours to discover the
average hourly increase resulting from
the bonus—$1.60 per hour—and half this
rate is paid for the 5 overtime hours—
$4. This is improper. The employee’s
regular rate in this week is $6.67 per
hour. He is owed $316.85 not $304.
(3) In the third week the employee
works 50 hours and is paid $300. The
books show that the employee received
$192 for the first 40 hours and $72 (10
hours × $7.20 per hour) for the 10 hours
over 40, for a total of $264 and the balance as a bonus of $36. Overtime pay
due on the ‘‘bonus’’ is found to be $3.60.
This is improper. The employee’s regular rate in this week is $6 and he is
owed $330, not $303.60.
(d) Similar schemes have been devised for piece-rate employees. The
method is the same. An employee is assigned an arbitrary hourly rate (usually the minimum) and it is agreed
that his straight-time and overtime
earnings will be computed on this rate
but that if these earnings do not
amount to the sum he would have
earned had his earnings been computed
on a piece-rate basis of ‘‘x’’ cents per
piece, he will be paid the difference as
a ‘‘bonus.’’ The subterfuge does not
serve to conceal the fact that this employee is actually compensated on a
piece-rate basis, that there is no bonus
and his regular rate is the quotient of
piece-rate earnings divided by hours
worked (Walling v. Youngerman-Reynolds Hardwood Company, 325 U.S. 419).
(e) The general rule may be stated
that wherever the employee is guaranteed a fixed or determinable sum as his
wages each week, no part of this sum is
a true bonus and the rules for determining overtime due on bonuses do not
apply.
[33 FR 986, Jan. 26, 1968; 33 FR 3172, Feb. 20,
1968, as amended at 46 FR 7318, Jan. 23, 1981]
§ 778.503 Pseudo
nuses.’’
‘‘percentage
As explained in § 778.210 of this part, a
true bonus based on a percentage of
total wages—both straight time and
overtime wages—satisfies the Act’s
overtime requirements, if it is paid unconditionally. Such a bonus increases
both straight time and overtime wages
by the same percentage, and thereby
includes proper overtime compensation
as an arithmetic fact. Some bonuses,
however, although expressed as a percentage of both straight time and overtime wages, are in fact a sham. Such
bonuses, like the bonuses described in
§ 778.502 of this part, are generally separated out of a fixed weekly wage and
usually decrease in amount in direct
proportion to increases in the number
of hours worked in a week in excess of
40. The hourly rate purportedly paid
under such a scheme is artificially low,
and the difference between the wages
paid at the hourly rate and the fixed
weekly compensation is labeled a percentage of wage ‘‘bonus.’’
Example: An employer’s wage records show
an hourly rate of $5.62 per hour, and an overtime rate of one and one-half times that
amount, or $8.43 per hour. In addition, the
employer pays an alleged percentage of wage
bonus on which no additional overtime compensation is paid:
Week 1—40 hours worked:
40 hours at $5.62 per hour ..............................
Percentage of total earnings bonus at 33.45%
of $224.80 .....................................................
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$224.80
75.20
Total ...........................................................
300.00
Week 2—43 hours worked:
40 hours at $5.62 per hour ..............................
3 hours at $8.43 per hour ................................
224.80
25.29
Subtotal .....................................................
250.09
Percentage of total earnings bonus at 19.96% of
$250.09 ................................................................
49.91
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Wage and Hour Division, Labor
§ 778.601
Total ...........................................................
300.00
Week 3—48 hours worked:
40 hours at $5.62 per hour ..............................
8 hours at $8.43 per hour ................................
224.80
67.44
Subtotal .....................................................
Percentage of total earnings bonus at 2.66% of
$292.24 ................................................................
292.24
Total ...........................................................
300.00
7.76
This employee is in fact being paid no overtime compensation at all. The records in fact
reveal that the employer pays exactly $300
per week, no matter how many hours the
employee works. The employee’s regular
rate is $300 divided by the number of hours
worked in the particular week, and his overtime compensation due must be computed as
shown in § 778.114.
[46 FR 7319, Jan. 23, 1981]
Subpart G—Miscellaneous
§ 778.600 Veterans’ subsistence allowances.
Subsistence allowances paid under
Public Law 346 (commonly known as
the G.I. bill of rights) to a veteran employed in on-the-job training program
work may not be used to offset the
wages to which he is entitled under the
Fair Labor Standards Act. The subsistence allowances provided by Public
Law 346 for payment to veterans are
not paid as compensation for services
rendered to an employer nor are they
intended as subsidy payments for such
employer. In order to qualify as wages
under either section 6 or section 7 of
the Act, sums paid to an employee
must be paid by or on behalf of the employer. Since veterans’ subsistence allowances are not so paid, they may not
be used to make up the minimum wage
or overtime pay requirements of the
Act nor are they included in the regular rate of pay under section 7.
§ 778.601 Special overtime provisions
available for hospital and residential care establishments under section 7(j).
(a) The statutory provision. Section
7(j) of the Act provides, for hospital
and residential care establishment employment, under prescribed conditions,
an exemption from the general requirement of section 7(a) that overtime
compensation be computed on a workweek basis. It permits a 14-day period
to be established for the purpose of
computing overtime compensation by
an agreement or understanding between an employer engaged in the operation of a hospital or residential care
establishment, and any of his employees employed in connection therewith.
The exemption provided by section 7(j)
applies:
if, pursuant to an agreement or understanding arrived at between the employer
and employee before performance of the
work, a work period of 14 consecutive days is
accepted in lieu of the workweek of 7 consecutive days for purposes of overtime computation and if, for his employment in excess
of 8 hours in any workday and in excess of 80
hours in such 14-day period, the employee receives compensation at a rate not less than
one and one-half times the regular rate at
which he is employed.
(b) Conditions for application of exemption. As conditions for use of the 14-day
period in lieu of the workweek in computing overtime, section 7(j) requires,
first, an agreement or understanding
between the employer and the employee before performance of the work
that such period is to be used, and second, the payment to the employee of
overtime compensation at a rate not
less than one and one-half times his
regular rate for all hours worked in excess of eight in any workday within
such period and in excess of 80 during
the period as a whole.
(c) The agreement or understanding.
The agreement or understanding between the employer and employee to
use the 14-day period for computing
overtime must be entered into before
the work to which it is intended to
apply is performed. It may be arrived
at directly with the employee or
through his representative. It need not
be in writing, but if it is not, a special
record concerning it must be kept as
required by part 516 of this chapter.
The 14-day period may begin at any
hour of any day of the week; it need
not commence at the beginning of a
calendar day. It consists of 14 consecutive 24-hour periods, at the end of
which a new 14-day period begins. The
election to use the 14-day period in lieu
of the workweek must, like selection of
an employee’s workweek (§ 778.105) be
with the intent to use such period permanently or for a substantial period of
time. Changes from such period to the
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§ 778.602
29 CFR Ch. V (7–1–19 Edition)
workweek and back again to take advantage of less onerous overtime pay
liabilities with respect to particular
work schedules under one system than
under the other are not permissible.
(d) Payment for overtime under the special provisions. If the parties have the
necessary agreement or understanding
to use the 14-day period, computation
of overtime pay on the workweek basis
as provided in section 7(a) is not required so long as the employee receives
overtime compensation at a rate not
less than one and one-half times his
regular rate of pay ‘‘for his employment in excess of 8 hours in any workday and in excess of 80 hours in such 14day period.’’ Such compensation is required for all hours in such period in
excess of eight in any workday or
workdays therein which are worked by
the employee, whether or not more
than 80 hours are worked in the period.
The first workday in the period, for
purposes of this computation, begins at
the same time as the 14-day period and
ends 24 hours later. Each of the 13 consecutive 24-hour periods following constitutes an additional workday of the
14-day period. Overtime compensation
at the prescribed time and one-half
rate is also required for all hours
worked in excess of 80 in the 14-day period, whether or not any daily overtime is worked during the first 80
hours. However, under the provisions of
section 7(h) and 7(e)(5) of the Act, any
payments at the premium rate for
daily overtime hours within such period may be credited toward the overtime compensation due for overtime
hours in excess of 80.
(e) Use of 14-day period in lieu of workweek. Where the 14-day period is used
as authorized in section 7(j), such period is used in lieu of the workweek in
computing the regular rate of pay of
employees to whom it applies (i.e.,
those of the hospital’s or residential
care establishment’s employees with
whom the employer has elected to
enter into the necessary agreement or
understanding as explained in paragraph (c) of this section). With this exception, the computation of the regular
rate and the application of statutory
exclusions therefrom is governed by
the general principles set forth in this
part 778.
[33 FR 986, Jan. 26, 1968, as amended at 46 FR
7319, Jan. 23, 1981; 46 FR 33516, June 30, 1981]
§ 778.602 Special overtime provisions
under section 7(b).
(a) Daily and weekly overtime standards. The general overtime pay requirements of the Act provide for such pay
only when the number of hours worked
exceeds the standard specified for the
workweek; no overtime compensation
on a daily basis is required. However,
section 7 of the Act, in subsection (b),
provides certain partial exemptions
from the general overtime provisions,
each of which is conditioned upon the
payment to the employee of overtime
compensation at a rate not less than
one and one-half times his regular rate
of pay for his hours worked in the
workweek in excess of daily, as well as
weekly, standards specified in the subsection. Under these provisions, when
an employee works in excess of both
the daily and weekly maximum hours
standards in any workweek for which
such an exemption is claimed, he must
be paid at such overtime rate for all
hours worked in the workweek in excess of the applicable daily maximum
or in excess of the applicable weekly
maximum, whichever number of hours
is greater. Thus, if his total hours of
work in the workweek which are in excess of the daily maximum are 10, and
his hours in excess of the weekly maximum are 8, overtime compensation is
required for 10 hours, not 8.
(b) Standards under section 7(b). The
partial exemptions provided by section
7(b) apply to an employee under the
conditions specified in clause (1), (2), or
(3) of the subsection ‘‘if such employee
receives compensation for employment
in excess of 12 hours in any workday, or
for employment in excess of 56 hours in
any workweek, as the case may be, at
a rate not less than one and one-half
times the regular rate at which he is
employed.’’ As an example, suppose an
employee is employed under the other
conditions specified for an exemption
under section 7(b) at an hourly rate of
$5.20 and works the following schedule:
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Wage and Hour Division, Labor
Pt. 779
Hours
M
T
W
T
F
S
S
Tot.
Worked ....................
14
9
10
15
12
8
0
68
Number of overtime hours: Daily, 5 (hours over 12); weekly,
12 (hours over 56).
Since the weekly overtime hours are
greater, the employee is entitled to pay
for 12 hours at $7.80 an hour (11⁄2 ×
$5.20), a total of $93.60 for the overtime
hours, and to pay at his regular rate
for the remaining 56 hours (56 × $5.20) in
the amonut of $291.20 or a total of
$384.80 for the week. If the employee
had not worked the 8 hours on Saturday, his total hours worked in the
week would have been 60, of which five
were daily overtime hours, and there
would have been no weekly overtime
hours under the section 7(b) standard.
For such a schedule the employee
would be entitled to 5 hours of overtime pay at time and one-half (5 × 11⁄2
× $5.20 = $39) plus the pay at his regular
rate for the remaining 55 hours (55 ×
$5.20 = $286), making a total of $325 due
him for the week.
[33 FR 986, Jan. 26, 1968, as amended at 34 FR
144, Jan. 4, 1969; 46 FR 7319, Jan. 23, 1981]
§ 778.603 Special overtime provisions
for certain employees receiving remedial education under section
7(q).
Section 7(q) of the Act, enacted as
part of the 1989 Amendments, provides
an exemption from the overtime pay
requirements for time spent by certain
employees who are receiving remedial
education. The exemption provided by
section 7(q), as implemented by these
regulations, allows any employer to require that an employee spend up to 10
hours in the aggregate in any workweek in remedial education without
payment of overtime compensation
provided that the employee lacks a
high school diploma or educational attainment at the eighth-grade level; the
remedial education is designed to provide reading and other basic skills at
an eighth-grade level or below, or to
fulfill the requirements for a high
school diploma or General Educational
Development (GED) certificate; and
the remedial education does not include job-specific training. Employees
must be compensated at their regular
rate of pay for the time spent receiving
such remedial education. The employer
must maintain a record of the hours
that an employee is engaged each
workday and each workweek in receiving remedial education, and the compensation paid each pay period for the
time so engaged, as described in 29 CFR
516.34. The remedial education must be
conducted during discrete periods of
time set aside for such a program, and,
to the maximum extent practicable,
away from the employee’s normal work
station. An employer has the burden to
establish compliance with all applicable requirements of this special overtime provision as set forth in section
7(q) of the Act and in this section of
the regulations. Section 7(q) is solely
an exemption from the overtime provisions of section 7(a) of the Act. It is not
an exemption from the requirements of
any other law that regulates employment practices, including the standards that are used to select individuals
for employment. An employer creating
a remedial education program pursuant
to section 7(q) should be mindful not to
violate other applicable requirements.
See, for example, title VII of the Civil
Rights Act of 1964, as amended, 42
U.S.C. 2000e et seq.; Executive Order
11246, as amended, 3 CFR part 339 (1964–
1965 Compilation), reprinted in 42 U.S.C.
2000e note; the Rehabilitation Act of
1973, as amended, 29 U.S.C. 701 et seq.;
and the Uniform Guidelines on Employee Selection Procedures published
at 41 CFR part 60–3.
[56 FR 61101, Nov. 29, 1991]
PART 779—THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES
Subpart A—General
INTRODUCTORY
Sec.
779.0 Purpose of interpretative bulletin.
779.1 General scope of the Act.
779.2 Previous and new coverage.
779.3 Pay standards for employees subject
to previous coverage of the Act.
779.4 Pay standards for newly covered employment.
779.5 Matters discussed in this part.
779.6 Matters discussed in other interpretative bulletins.
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Pt. 779
29 CFR Ch. V (7–1–19 Edition)
INTERPRETATIONS OF THE LAW
779.119
779.7 Significance of official interpretations.
779.8 Basic support for interpretations.
779.9 Reliance on interpretations.
779.10 Interpretations made, continued, and
superseded by this part.
SOME BASIC DEFINITIONS
779.11 General statement.
779.12 Commerce.
779.13 Production.
779.14 Goods.
779.15 Sale and resale.
779.16 State.
779.17 Wage and wage payments to tipped
employees.
779.18 Regular rate.
779.19 Employer, employee, and employ.
779.20 Person.
779.21 Enterprise.
779.22 Enterprise engaged in commerce or in
the production of goods for commerce.
779.23 Establishment.
779.24 Retail or service establishment.
Subpart B—Employment to Which the Act
May Apply: Basic Principles and Individual Coverage
Exempt occupations.
Subpart C—Employment to Which the Act
May Apply; Enterprise Coverage
ENTERPRISE; THE BUSINESS UNIT
779.200 Coverage expanded by 1961 and 1966
amendments.
779.201 The place of the term ‘‘enterprise’’
in the Act.
779.202 Basic concepts of definition.
779.203 Distinction between ‘‘enterprise,’’
‘‘establishment,’’ and ‘‘employer.’’
779.204 Common types of ‘‘enterprise.’’
RELATED ACTIVITIES
779.205 Enterprise must consist of ‘‘related
activities.’’
779.206 What are ‘‘related activities.’’
779.207 Related activities in retail operations.
779.208 Auxiliary activities which are ‘‘related activities.’’
779.209 Vertical activities which are ‘‘related activities.’’
779.210 Other activities which may be part
of the enterprise.
779.211 Status of activities which are not
‘‘related.’’
COMMON BUSINESS PURPOSE
GENERAL PRINCIPLES
779.100 Basic coverage in general.
779.101 Guiding principles for applying coverage and exemption provisions.
779.102 Scope of this subpart.
EMPLOYEES ENGAGED IN COMMERCE OR IN THE
PRODUCTION OF GOODS FOR COMMERCE
779.212 Enterprise must consist of related
activities performed for a ‘‘common business purpose.’’
779.213 What is a common business purpose.
779.214 ‘‘Business’’ purpose.
UNIFIED OPERATION OR COMMON CONTROL
779.103 Employees ‘‘engaged in commerce.’’
779.104 Employees ‘‘engaged in the production of goods for commerce.’’
779.105 Employees engaged in activities
‘‘closely related’’ and ‘‘directly essential’’ to the production of goods for commerce.
779.106 Employees employed by an independent employer.
779.107 Goods defined.
779.108 Goods produced for commerce.
779.109 Amount of activities which constitute engaging in commerce or in the
production of goods for commerce.
779.110 Employees in retailing whose activities may bring them under the Act.
779.111 Buyers and their assistants.
779.112 Office employees.
779.113 Warehouse and stock room employees.
779.114 Transportation employees.
779.115 Watchmen and guards.
779.116 Custodial and maintenance employees.
779.117 Salesmen and sales clerks.
779.118 Employees providing central services for multi-unit organizations.
779.215 General scope of terms.
779.216 Statutory construction of the terms.
779.217 ‘‘Unified operation’’ defined.
779.218 Methods to accomplish ‘‘unified operation.’’
779.219 Unified operation may be achieved
without common control or common
ownership.
779.220 Unified operation may exist as to
separately owned or controlled activities
which are related.
779.221 ‘‘Common control’’ defined.
779.222 Ownership as factor.
779.223 Control where ownership vested in
individual or single organization.
779.224 Common control in other cases.
LEASED DEPARTMENTS, FRANCHISE AND OTHER
BUSINESS ARRANGEMENTS
779.225 Leased departments.
779.226 Exception for an independently
owned retail or service establishment
under certain franchise and other arrangements.
779.227 Conditions which must be met for
exception.
779.228 Types of arrangements contemplated
by exception.
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Wage and Hour Division, Labor
Pt. 779
779.229 Other arrangements.
779.230 Franchise and other arrangements.
779.231 Franchise arrangements which do
not create a larger enterprise.
779.232 Franchise or other arrangements
which create a larger enterprise.
779.233 Independent contractors performing
work ‘‘for’’ an enterprise.
779.234 Establishments whose only regular
employees are the owner or members of
his immediate family.
779.235 Other ‘‘enterprises.’’
779.256 Conditions for enterprise coverage of
gasoline service establishments.
779.257 Exemption applicable to gasoline
service establishments under the prior
Act.
ANNUAL GROSS VOLUME OF SALES MADE OR
BUSINESS DONE
779.258 Sales made or business done.
779.259 What is included in annual gross volume.
779.260 Trade-in allowances.
COVERED ENTERPRISES
EXCISE TAXES
779.236 In general.
779.237 Enterprise engaged in commerce or
in the production of goods for commerce.
779.238 Engagement in described activities
determined on annual basis.
779.239 Meaning of ‘‘engaged in commerce or
in the production of goods for commerce.’’
EMPLOYEES HANDLING, SELLING, OR OTHERWISE WORKING ON GOODS THAT HAVE BEEN
MOVED IN OR PRODUCED FOR COMMERCE BY
ANY PERSON
779.240 Employees ‘‘handling * * * or otherwise working on goods.’’
779.241 Selling.
779.242 Goods that ‘‘have been moved in’’
commerce.
779.243 Goods that have been ‘‘produced for
commerce by any person.’’
COVERED RETAIL ENTERPRISE
779.244 ‘‘Covered enterprises’’ of interest to
retailers of goods or services.
779.245 Conditions for coverage of retail or
service enterprises.
INTERSTATE INFLOW TEST UNDER PRIOR ACT
779.246 Inflow test under section 3(s)(1) of
the Act prior to 1966 amendments.
779.247 ‘‘Goods’’ defined.
779.248 Purchase or receive ‘‘goods for resale.’’
779.249 Goods which move or have moved
across State lines.
779.250 Goods that have not lost their outof-State identity.
779.251 Goods that have lost their out-ofState identity.
779.252 Not in deliveries from the reselling
establishment.
779.253 What is included in computing the
total annual inflow volume.
THE GASOLINE SERVICE ESTABLISHMENT
ENTERPRISE
779.254 Summary of coverage and exemptions prior to and following the 1966
amendments.
779.255 Meaning of ‘‘gasoline service establishment.’’
779.261
779.262
779.263
779.264
Statutory provision.
Excise taxes at the retail level.
Excise taxes not at the retail level.
Excise taxes separately stated.
COMPUTING THE ANNUAL VOLUME
779.265 Basis for making computations.
779.266 Methods of computing annual volume of sales or business.
779.267 Fluctuations in annual gross volume
affecting enterprise coverage and establishment exemptions.
779.268 Grace period of 1 month for computation.
779.269 Computations for a new business.
Subpart D—Exemptions for Certain Retail
or Service Establishments
GENERAL PRINCIPLES
779.300
779.301
Purpose of subpart.
Statutory provisions.
‘‘ESTABLISHMENT’’ BASIS OF EXEMPTIONS
779.302 Exemptions depend on character of
establishment.
779.303 ‘‘Establishment’’
defined;
distinguished from ‘‘enterprise’’ and ‘‘business.’’
779.304 Illustrations of a single establishment.
779.305 Separate establishments on the
same premises.
779.306 Leased departments not separate establishments.
779.307 Meaning and scope of ‘‘employed by’’
and ‘‘employee of.’’
779.308 Employed within scope of exempt
business.
779.309 Employed ‘‘in’’ but not ‘‘by.’’
779.310 Employees of employers operating
multi-unit businesses.
779.311 Employees working in more than
one establishment of same employer.
STATUTORY MEANING OF RETAIL OR SERVICE
ESTABLISHMENT
779.312 ‘‘Retail or service establishment’’,
defined in section 13(a)(2).
779.313 Requirements summarized.
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Pt. 779
29 CFR Ch. V (7–1–19 Edition)
MAKING SALES OF GOODS AND SERVICES
‘‘RECOGNIZED AS RETAIL’’
COMPUTING ANNUAL DOLLAR VOLUME AND
COMBINATION OF EXEMPTIONS
779.314 ‘‘Goods’’ and ‘‘services’’ defined.
779.315 Traditional local retail or service establishments.
779.316 Establishments outside ‘‘retail concept’’ not within statutory definition;
lack first requirement.
779.317 Partial list of establishments lacking ‘‘retail concept.’’
779.318 Characteristics and examples of retail or service establishments.
779.319 A retail or service establishment
must be open to general public.
779.320 Partial list of establishments whose
sales or service may be recognized as retail.
779.321 Inapplicability of ‘‘retail concept’’
to some types of sales or services of an
eligible establishment.
779.342 Methods of computing annual volume of sales.
779.343 Combinations of exemptions.
ENGAGING IN MANUFACTURING AND
PROCESSING ACTIVITIES; SECTION 13(a)(4)
779.345 Exemption
provided
in
section
13(a)(4).
779.346 Requirements for exemption summarized.
779.347 Exemption limited to ‘‘recognized
retail establishment’’; factories not exempt.
779.348 Goods must be made at the establishment which sells them.
779.349 The 85-percent requirement.
779.350 The section 13(a)(4) exemption does
not apply to service establishments.
‘‘RECOGNIZED’’ AS RETAIL ‘‘IN THE
PARTICULAR INDUSTRY’’
ENGAGING IN CONTRACT TELEGRAPH AGENCY
OPERATIONS; SECTION 13(a)(11)
779.322 Second requirement for qualifying as
a ‘‘retail or service establishment.’’
779.323 Particular industry.
779.324 Recognition ‘‘in.’’
779.325 Functions of the Secretary and the
courts.
779.326 Sources of information.
779.327 Wholesale sales.
779.328 Retail and wholesale distinguished.
779.329 Effect of type of customer and type
of goods or services.
SALES NOT MADE FOR RESALE
779.330 Third requirement for qualifying as
a ‘‘retail or service establishment.’’
779.331 Meaning of sales ‘‘for resale.’’
779.332 Resale of goods in an altered form or
as parts or ingredients of other goods or
services.
779.333 Goods sold for use as raw materials
in other products.
779.334 Sales of services for resale.
779.335 Sales of building materials for residential or farm building construction.
779.336 Sales of building materials for commercial property construction.
GENERAL TESTS OF EXEMPTION UNDER
SECTION 13(a)(2)
779.337 Requirements of exemption summarized.
779.338 Effect of 1961 and 1966 amendments.
779.351
779.352
Exemption provided.
Requirements for exemption.
CLASSIFICATION OF SALES AND
ESTABLISHMENTS IN CERTAIN INDUSTRIES
779.353
Basis for classification.
LUMBER AND BUILDING MATERIALS DEALERS
779.354 Who may qualify as exempt 13(a)(2)
or 13(a)(4) establishments.
779.355 Classification of lumber and building
materials sales.
779.356 Application of exemptions to employees.
COAL DEALERS
779.357 May qualify as exempt 13(a)(2) establishments; classification of coal sales.
ICE MANUFACTURERS AND ICE DEALERS
779.358 May qualify as exempt 13(a)(2) or
13(a)(4) establishments.
LIQUEFIED-PETROLEUM-GAS AND FUEL OIL
DEALERS
779.359 May qualify as exempt 13(a)(2) establishments.
779.360 Classification
of
liquefied-petroleum-gas sales.
779.361 Classification of other fuel oil sales.
SALES MADE WITHIN THE STATE
FEED DEALERS
779.339 More than 50 percent intrastate
sales required.
779.340 Out-of-State customers.
779.341 Sales ‘‘made within the State’’ and
‘‘engagement in commerce’’ distinguished.
779.362 May qualify as exempt 13(a)(2) or
13(a)(4) establishments.
MONUMENT DEALERS
779.363 May qualify as exempt 13(a)(2) or
13(a)(4) establishments.
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Wage and Hour Division, Labor
Pt. 779
FROZEN-FOOD LOCKER PLANTS
779.364 May qualify as exempt 13(a)(2) or
13(a)(4) establishments.
AUTOMOTIVE TIRE ESTABLISHMENTS
779.365 May qualify as exempt 13(a)(2) or
13(a)(4) establishments.
779.366 Recapping or retreading tires for
sale.
779.388 Exemption provided for food or beverage service employees.
Subpart E—Provisions Relating to Certain
Employees of Retail or Service Establishments
GENERAL PRINCIPLES
779.400
Purpose of subpart.
EXECUTIVE, ADMINISTRATIVE, AND PROFESSIONAL EMPLOYEES AND OUTSIDE SALES-
COMMERCIAL STATIONERS
779.367 Commercial stationers may qualify
as exempt 13(a)(2) establishments.
779.368 Printing and engraving establishments not recognized as retail.
MEN
CEMETERIES
779.401 Statutory provision.
779.402 ‘‘Executive’’ and ‘‘administrative’’
employees defined.
779.403 Administrative and executive employees in covered enterprises employed
in other than retail or service establishments.
779.404 Other section 13(a)(1) employees employed in covered enterprises.
779.370 Cemeteries may qualify as exempt
13(a)(2) establishments.
STUDENTS, LEARNERS, AND HANDICAPPED
WORKERS
AUTOMOBILE, TRUCK AND FARM IMPLEMENT
SALES AND SERVICES, AND TRAILER, BOAT
AND AIRCRAFT SALES
779.405 Statutory provisions.
779.406 ‘‘Student-learners.’’
779.407 Learners other than ‘‘student-learners.’’
779.408 ‘‘Full-time students.’’
779.409 Handicapped workers.
FUNERAL HOMES
779.369 Funeral home establishments may
qualify as exempt 13(a)(2) establishments.
779.371 Some automobile, truck, and farm
implement establishments may qualify
for exemption under section 13(a)(2).
779.372 Nonmanufacturing
establishments
with certain exempt employees under
section 13(b)(10).
OTHER ESTABLISHMENTS FOR WHICH SPECIAL
EXCEPTIONS OR EXEMPTIONS ARE PROVIDED
779.381 Establishments within special exceptions or exemptions.
HOTELS AND MOTELS
779.382 May qualify as exempt 13(a)(2) establishments.
779.383 ‘‘Hotel’’ and ‘‘motel’’ exemptions
under section 13(b)(8).
MOTION PICTURE THEATERS
779.384 May qualify as exempt establishments.
SEASONAL AMUSEMENT OR RECREATIONAL
ESTABLISHMENTS
779.385 May qualify as exempt establishments.
RESTAURANTS AND ESTABLISHMENTS
PROVIDING FOOD AND BEVERAGE SERVICE
779.386 Restaurants may qualify as exempt
13(a) (2) establishments.
779.387 ‘‘Restaurant’’ exemption under section 13(b) (8).
EMPLOYEES COMPENSATED PRINCIPALLY BY
COMMISSIONS
779.410 Statutory provision.
779.411 Employee of a ‘‘retail or service establishment.’’
779.412 Compensation
requirements
for
overtime pay exemption under section
7(i).
779.413 Methods of compensation of retail
store employees.
779.414 Types of employment in which this
overtime pay exemption may apply.
779.415 Computing employee’s compensation
for the representative period.
779.416 What
compensation
‘‘represents
commissions.’’
779.417 The ‘‘representative period’’ for testing employee’s compensation.
779.418 Grace period for computing portion
of compensation representing commissions.
779.419 Dependence of the section 7(i) overtime pay exemption upon the level of the
employee’s ‘‘regular rate’’ of pay.
779.420 Recordkeeping requirements.
779.421 Basic rate for computing overtime
compensation of nonexempt employees
receiving commissions.
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§ 779.0
29 CFR Ch. V (7–1–19 Edition)
Subpart F—Other Provisions Which May
Affect Retail Enterprises
GENERAL
779.500
Purpose of subpart.
779.501
Statutory provisions.
EQUAL PAY PROVISIONS
CHILD LABOR PROVISIONS
779.502 Statutory provisions; regulations in
Part 1500 of this title.
779.503 The retailer and section 12(a).
779.504 The retailer and section 12(c).
779.505 ‘‘Oppressive child labor’’ defined.
779.506 Sixteen-year minimum.
779.507 Fourteen-year minimum.
779.508 Eighteen-year minimum.
DRIVER OR DRIVER’S HELPER MAKING LOCAL
DELIVERIES
779.509 Statutory provision.
779.510 Conditions that must be met for section 13(b) (11) exemption.
779.511 ‘‘Finding by Secretary.’’
RECORDS TO BE KEPT BY EMPLOYERS
779.512
779.513
779.514
779.515
The recordkeeping regulations.
Order and form of records.
Period for preserving records.
Regulations should be consulted.
AUTHORITY: Secs. 1–19, 52 Stat. 1060, as
amended; 75 Stat. 65; Sec. 29(B), Pub. L. 93–
259, 88 Stat. 55; 29 U.S.C. 201–219.
SOURCE: 35 FR 5856, Apr. 9, 1970, unless otherwise noted.
Subpart A—General
INTRODUCTORY
§ 779.0 Purpose of interpretative bulletin.
It is the purpose of this part to provide an official statement of the views
of the Department of Labor with respect to the application and meaning of
those provisions of the Fair Labor
Standards Act, hereinafter referred to
as the Act, which govern rights and obligations of employees and employers
in the various enterprises in which retail sales of goods or services are made.
The application of the Act to employment in such enterprises was greatly
broadened by amendments effective
September 3, 1961. The Act’s application was extended to employment in
additional retail and service enterprises by the Fair Labor Standards
Amendments of 1966, effective Feb-
ruary 1, 1967. Under the amended Act,
there are many employees employed by
retail or service establishments and in
enterprises having such establishments
engaged in the retail selling of goods or
services who must be employed in compliance with its provisions. It is an objective of this part to make available
in one place, for the guidance of those
who may be concerned with the provisions of the law, the official interpretations of these provisions by which the
Department of Labor will be guided in
carrying out its responsibilities under
the Act.
§ 779.1 General scope of the Act.
The Fair Labor Standards Act of 1938,
as amended, is a Federal statute of
general application which establishes
minimum wage, maximum hours, overtime pay, equal pay, and child labor requirements that apply as provided in
the Act. Employers and employees in
enterprises in which retail sales of
goods or services are made need to
know how the Act applies to employment in these enterprises so that they
may understand their rights and obligations under the law. All employees
whose employment has the relationship to interstate or foreign commerce
which the Act specifies are subject to
the prescribed labor standards unless
specifically exempted from them. Employers having such employees are required to comply with the Act’s provisions in this regard and with specified
recordkeeping requirements contained
in Part 516 of this chapter. The law authorizes the Department of Labor to
investigate for compliance and, in the
event of violations, to supervise the
payment of unpaid minimum wages or
unpaid overtime compensation owing
to any employee. The law also provides
for enforcement in the courts.
§ 779.2 Previous and new coverage.
Under the Act as amended in 1966, an
employer may have some employees
subject to its minimum wages, maximum hours, overtime pay, equal pay,
or child labor provisions who would be
covered by such provisions under the
prior law even if the amendments had
not been enacted, and other employees
whose coverage under such provisions
was provided for the first time by the
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Wage and Hour Division, Labor
§ 779.4
1966 amendments. As explained in subparts B and C such provisions of the
amended Act may apply to an employee by reason of the activities in
which he is individually engaged, or because he is employed in an enterprise
whose activities satisfy the conditions
prescribed in the law prior to the
amendments. On the other hand, such
provisions of the amended Act may
apply to an employee solely because he
is employed in an enterprise whose activities satisfy only the conditions provided in the Act as it was amended in
1966. Previously covered employment
in retail and service enterprise is subject to different monetary standards
than newly covered employment in
such enterprises until February 1, 1971.
On and after that date, every such employee subject to the minimum wage
provisions will be entitled to not less
than $1.60 an hour. However, beginning
February 1, 1969, every such employee
subject to the overtime provisions is
entitled to overtime pay for all hours
worked in excess of 40 in a workweek
at a rate not less than one and one-half
times his regular rate of pay. During
the period for which different minimum wage provisions were made applicable, beginning with the effective
date of the 1966 amendments on February 1, 1967, and ending on January 31,
1971, a lower minimum wage rate is authorized for employees in employment
brought under the minimum wage provisions of the Act for the first time by
the amendments than for those subject
to the minimum wage provisions under
the prior Act. Also, in the period beginning with the effective date of the
amendments and ending on January 31,
1969, employees in employment brought
under the overtime pay provisions for
the first time by the amendments
could be employed for a longer workweek without overtime pay, as specified in the Act. Accordingly, employers
who do not wish to pay aIl covered employees for employment during such
periods the minimum wages and overtime pay required for employment covered under the prior provisions will
need to identify those employees who
are covered under the prior provisions
and those who are covered under the
new provisions when wages are computed and paid under the Act.
§ 779.3 Pay standards for employees
subject to previous coverage of the
Act.
Before the 1966 amendments, the Act
applied, as it still applies, to employees
individually engaged in interstate or
foreign commerce or in the production
of goods for such commerce, and to employees in certain enterprises, including enterprises in which retail sales of
goods or services are made. The tests
by which coverage based on the employee’s individual activities is determined were not changed by the 1966
amendments and are described in subpart B of this part. An employee in an
enterprise whose activities satisfy the
conditions prescribed in the law prior
to the 1966 amendments (discussed in
subpart C) is covered under the present
Act. Any employee whose employment
satisfies the tests by which individual
or enterprise coverage is determined
under the Act prior to the 1966 amendments and who would not have come
within some exemption in the law prior
to the amendments is subject to the
monetary provisions prescribed in the
law for previously covered employees
and is entitled to a minimum wage of
at least $1.40 an hour beginning February 1, 1967, and not less than $1.60 an
hour beginning February 1, 1968, unless
expressly exempted by some provision
of the amended Act. (In each instance
where there is an increase in the minimum wage, the new minimum wage
rate becomes effective 12:01 a.m., on
the date indicated.) Such an employee
is also entitled to overtime pay for
hours worked in excess of 40 in any
workweek at a rate not less than one
and one-half times his regular rate of
pay. (Minimum wage rates in Puerto
Rico, the Virgin Islands, and American
Samoa are governed by special provisions of the Act. Information on these
rates is available at any office of the
Wage and Hour Division.)
§ 779.4 Pay standards for newly covered employment.
There are many employees of retailers as well as other employees who
would not be subject to the minimum
wage or overtime pay provisions of the
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§ 779.5
29 CFR Ch. V (7–1–19 Edition)
Act as it was prior to the 1966 amendments, either because of their individual activities or because of the activities of the enterprise in which they
are employed, but who are brought
under the minimum wage or overtime
provisions, or both, for the first time
by the changed enterprise coverage
provisions or changes in exemptions, or
both, which were enacted as part of the
amendments and made effective February 1, 1967. The following pay standards apply to this newly covered employment, unless a specific exemption
has been retained or provided in the
amendments; such employees must be
paid not less than the minimum wages
for hours worked and not less than one
and one-half times their regular rates
of pay for overtime, as shown in the
following schedule:
Minimum wage
$1.00
$1.15
$1.30
$1.45
$1.60
an
an
an
an
an
hour
hour
hour
hour
hour
Beginning
.................
.................
.................
.................
.................
February
February
February
February
February
1,
1,
1,
1,
1,
1967.
1968.
1969.
1970.
1971 and thereafter.
In each instance where there is an increase in the minimum wage, the new
minimum wage rate becomes effective
12:01 a.m., on the date indicated. (Minimum wage rates for newly covered employees in Puerto Rico, the Virgin Islands, and American Samoa are set by
wage order under special industry committee procedures. Information on
these rates and their effective dates
may be obtained at any office of the
Wage and Hour Division.)
Overtime pay
sions of the Act which refer specifically to such employers and employees
and such enterprises or establishments.
The criteria for determining the employments in which these employers
and employees may be subject to the
law are discussed in subparts B and C
of this part and the criteria for exclusion from its provisions under specific
exemptions are discussed in subpart D
of this part. Other provisions of special
interest to retailers and their employees are discussed in subparts E and F of
this part.
§ 779.6 Matters discussed in other interpretative bulletins.
Bulletins having general application
to others subject to the law as well as
to retailers and their employees have
been issued on a number of subjects of
general interest. These will be found in
other parts of this chapter of the Code
of Federal Regulations. Reference
should be made to them for guidance
on matters which they discuss in detail
and which this part does not undertake
to do. They include part 776 of this
chapter, discussing general coverage,
including the employer-employee relationship under the Act; part 531 of this
chapter, discussing methods of payment of wages; part 778 of this chapter,
discussing computation and payment
of overtime compensation; part 785 of
this chapter, discussing the calculation
of hours worked; and part 800 of this
chapter, discussing equal pay for equal
work.
Beginning
After 44 hours in a workweek ...................
After 42 hours in a workweek ...................
After 40 hours in a workweek and thereafter.
INTERPRETATIONS OF THE LAW
Feb. 1, 1967.
Feb. 1, 1968.
Feb. 1, 1969.
§ 779.7 Significance of official interpretations.
In each instance where a new overtime
pay standard is applicable, it shall be
effective as to any workweek beginning
on or after the date indicated.
§ 779.5 Matters discussed in this part.
This part discusses generally the provisions of the Act which govern its application to employers and employees
in enterprises and establishments that
make retail sales of goods or services.
It discusses in some detail those provi-
The regulations in this part contain
the official interpretations of the Department of Labor with respect to the
application
under
described
circumstances of the provisions of law
which they discuss. These interpretations indicate the construction of the
law which the Secretary of Labor and
the Administrator believe to be correct
and which will guide them in the performance of their duties under the Act
unless and until they are otherwise directed by authoritative decisions of the
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Wage and Hour Division, Labor
§ 779.10
courts or conclude, upon reexamination of an interpretation, that it is incorrect.
§ 779.8 Basic support for interpretations.
The ultimate decisions on interpretations of the Act are made by the courts
(Mitchell v. Zachry, 362 U.S. 310;
Kirschbaum v. Walling, 316 U.S. 517).
Court decisions supporting interpretations contained in this bulletin are
cited where it is believed they may be
helpful. On matters which have not
been determined by the courts, it is
necessary for the Secretary of Labor
and the Administrator to reach conclusions as to the meaning and the application of provisions of the law in order
to carry out their responsibilities of
administration
and
enforcement
(Skidmore v. Swift, 323 U.S. 134). In order
that these positions may be made
known to persons who may be affected
by them, official interpretations are
issued by the Administrator on the advice of the Solicitor of Labor, as authorized by the Secretary (Reorg. Pl. 6
of 1950, 64 Stat. 1263; Gen. Ord. 45A,
May 24, 1950; 15 FR 3290). As included in
the regulations in this part, these interpretations are believed to express
the intent of the law as reflected in its
provisions as constructed by the courts
and evidenced by its legislative history. References to pertinent legislative history are made in this part
where it appears that they will contribute to a better understanding of
the interpretations.
§ 779.9 Reliance on interpretations.
The interpretations of the law contained in this part are official interpretations which may be relied upon as
provided in section 10 of the Portal-toPortal Act of 1947. In addition, the Supreme Court has recognized that such
interpretations of the Act ‘‘provide a
practical guide to employers and employees as to how the office representing the public interest in its enforcement will seek to apply it’’ and
‘‘constitute a body of experience and
informed judgment to which courts and
litigants may properly resort for guidance.’’ Further, as stated by the Court:
‘‘Good administration of the Act and
good judicial administration alike re-
quire that the standards of public enforcement and those for determining
private rights shall be at variance only
where justified by very good reasons.’’
(Skidmore v. Swift, 323 U.S. 134.) Some of
the interpretations in subpart D of this
part relating to the scope of the exemption provided for retail or service establishments are interpretations of
this exemption as it appeared in the
original Act before amendment in 1949
and 1961, which have remained unchanged because they were consistent
with the amendments. These interpretations may be said to have Congressional sanction because ‘‘When Congress amended the Act in 1949 it provided that pre-1949 rulings and interpretations by the Administrator should
remain in effect unless inconsistent
with the statute as amended. 63 Stat.
920.’’ (Mitchell v. Kentucky Finance Co.,
359 U.S. 290.)
§ 779.10 Interpretations made, continued, and superseded by this part.
On and after publication of this part
in the FEDERAL REGISTER, the interpretations contained therein shall be in effect and shall remain in effect until
they are modified, rescinded, or withdrawn. This part supersedes and replaces the interpretations previously
published in the FEDERAL REGISTER
and Code of Federal Regulations as
part 779 of this chapter. Prior opinions,
rulings and interpretations and prior
enforcement policies which are not inconsistent with the interpretations in
this part or with the Fair Labor Standards Act as amended by the Fair Labor
Standards Amendments of 1961 are continued in effect; all other opinions, rulings, interpretations, and enforcement
policies on the subjects discussed in
the interpretations in this part are rescinded and withdrawn. The interpretations in this part provide statements of
general principles applicable to the
subjects discussed and illustrations of
the application of these principles to
situations that frequently arise. They
do not and cannot refer specifically to
every problem which may be met by retailers in the application of the Act.
The omission to discuss a particular
problem in this part or in interpretations supplementing it should not be
taken to indicate the adoption of any
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§ 779.11
29 CFR Ch. V (7–1–19 Edition)
position by the Secretary of Labor or
the Administrator with respect to such
problem or to constitute an administrative interpretation or practice or
enforcement policy. Questions on matters not fully covered by this part may
be addressed to the Administrator of
the Wage and Hour Division, U.S. Department of Labor, Washington, DC
20210, or to any Regional or District Office of the Division.
SOME BASIC DEFINITIONS
§ 779.11 General statement.
The meaning and application of the
provisions of law discussed in this part
depend in large degree on the definitions of terms used in these provisions.
The Act itself defines some of these
terms. Others have been defined and
construed in decisions of the courts. In
the following sections some of these
basic definitions are set forth for ready
reference in connection with the part’s
discussion of the various provisions in
which they appear. Some of these definitions and their application are considered in detail in other interpretative
bulletins. The application of the others
is considered in the sections of this
part where the particular provisions
containing the defined terms are discussed.
§ 779.12 Commerce.
Commerce as used in the Act includes
interstate and foreign commerce. It is
defined in section 3(b) of the Act to
mean ‘‘trade, commerce, transportation, transmission or communication
among the several States or between
any State and any place outside thereof.’’ (For the definition of ‘‘State’’ see
§ 779.16.) The application of this definition and the kinds of activities which
it includes are discussed at length in
the interpretative bulletin on general
coverage of the Act, part 776 of this
chapter.
§ 779.13 Production.
To understand the meaning of ‘‘production’’ of goods for commerce as used
in the Act it is necessary to refer to
the definition in section 3(j) of the
term ‘‘produced.’’ A detailed discussion
of the application of the term as defined is contained in the interpretative
bulletin on general coverage of the Act,
part 776 of this chapter. Section 3(j)
provides that ‘‘produced’’ as used in
the Act ‘‘means produced, manufactured, mined, handled, or in any other
manner worked on in any State; and
for the purposes of this Act an employee shall be deemed to have been
engaged in the production of goods if
such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other
manner working on such goods, or in
any closely related process or occupation directly essential to the production thereof, in any State.’’ (For the
definition of ‘‘State,’’ see § 779.16.)
§ 779.14 Goods.
The definition in section 3(i) of the
Act states that goods, as used in the
Act, means ‘‘goods (including ships and
marine equipment), wares, products,
commodities, merchandise, or articles
or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after
their delivery into the actual physical
possession of the ultimate consumer
thereof other than a producer, manufacturer, or processor thereof.’’ The interpretative bulletin on general coverage of the Act, part 776 of this chapter, contains a detailed discussion of
the application of this definition and
what is included in it.
§ 779.15 Sale and resale.
(a) Section 3(k) of the Act provides
that ‘‘Sale’’ or ‘‘sell’’, as used in the
Act, ‘‘includes any sale, exchange, contract to sell, consignment for sale,
shipment for sale, or other disposition.’’ Since ‘‘goods’’, as defined, includes any part or ingredient of goods
(see § 779.14), a ‘‘resale’’ of goods includes their sale in a different form
than when first purchased or sold, such
as the sale of goods of which they have
become a component part (Arnold v.
Kanowsky, 361 U.S. 388). The Act, in
section 3(n), provides one exception to
this rule by declaring that ‘‘resale’’, as
used in the Act, ‘‘shall not include the
sale of goods to be used in residential
or farm building construction, repair,
or maintenance: Provided, That the sale
is recognized as a bona fide retail sale
in the industry.’’ A resale of goods is
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Wage and Hour Division, Labor
§ 779.17
not confined to resale of the goods as
such, but under section 3(k) may include an ‘‘other disposition’’ of the
goods in which they are disposed of in
a transaction of a different kind; thus
the sale by a restaurant to an airline of
prepared meals to be served in flight to
passengers whose tickets entitle them
to a ‘‘complimentary’’ meal is a sale of
goods ‘‘for resale’’. (Mitchell v. Sherry
Corine Corp., 264 F 2d 831 (C.A. 4), cert.
denied 360 U.S. 934.)
(b) In construing section 3(s)(1) of the
Act as it was prior to the 1966 amendments it should be noted that section
3(n) of the prior Act defined ‘‘resale’’
by declaring that this term, ‘‘except as
used in subsection (s)(1), shall not include the sale of goods to be used in
residential or farm building construction, repair, or maintenance: Provided,
That the sale is recognized as a bona
fide retail sale in the industry.’’ Thus,
although section 3(n) of the prior Act
also provided the one exception to the
meaning of ‘‘resale’’, it made clear that
the exception was inapplicable in determining under section 3(s)(1) of the
prior Act, ‘‘if such enterprise purchases
or receives goods for resale that move
or have moved across State lines (not
in deliveries from the reselling establishment) which amount in total volume to $250,000 or more’’. The application of the inflow test under section
3(s) (1) of the prior Act is discussed
fully in subpart C of this part.
§ 779.16 State.
As used in the Act, State means ‘‘any
State of the United States or the District of Columbia or any Territory or
possession of the United States’’ (Act,
section 3(c)). The application of this
definition in determining questions of
coverage under the Act’s definition of
‘‘commerce’’ and ‘‘produced’’ (see
§§ 779.12, 779.13) is discussed in the interpretative bulletin on general coverage, part 776 of this chapter. This definition is also important in determining whether goods ‘‘for resale’’ purchased or received by an enterprise
move or have moved across State lines
within the meaning of former section
3(s)(1) of the Act (prior to the 1966
amendments) and whether sales of
goods or services are ‘‘made within the
State’’ within the meaning of the retail
or service establishment exemption in
section 13(a)(2), as discussed in subpart
D of this part.
§ 779.17 Wage and wage payments to
tipped employees.
Section 3(m) of the Act provides that
as used in the Act, ‘‘wage’’ paid to any
employee:
includes the reasonable cost, as determined
by the Secretary of Labor, to the employer
of furnishing such employee with board,
lodging, or other facilities, if such board,
lodging or other facilities are customarily
furnished by such employer to his employees: Provided, That the cost of board, lodging,
or other facilities shall not be included as a
part of the wage paid to any employee to the
extent it is excluded therefrom under the
terms of a bona fide collective-bargaining
agreement applicable to the particular employee: Provided further, That the Secretary
is authorized to determine the fair value of
such board, lodging, or other facilities for defined classes of employees and in defined
areas, based on average cost to the employer
or to groups of employers similarly situated,
or average value to groups of employees, or
other appropriate measures of fair value.
Such evaluations, where applicable and pertinent, shall be used in lieu of actual measure of cost in determining the wage paid to
any employee. In determining the wage of a
tipped employee, the amount paid such employee by his employer shall be deemed to be
increased on account of tips by an amount
determined by the employer, but not by an
amount in excess of 50 per centum of the applicable minimum wage rate, except that in
the case of an employee who (either himself
or acting through his representative) shows
to the satisfaction of the Secretary that the
actual amount of tips received by him was
less than the amount determined by the employer as the amount by which the wage paid
him was deemed to be increased under this
sentence, the amount paid such employee by
his employer shall be deemed to have been
increased by such lesser amount.
As explained in part 531 of this chapter,
section 3(m) of the Act governs the
payment of wages required by the Act,
including payment in other than cash
and in tips. Part 531 of this chapter
contains the regulations under which
the reasonable cost or fair value of
such facilities furnished may be computed for inclusion as part of wages required by the Act. Section 3(m) provides a method for determining the
wage of a ‘‘tipped employee’’ and this
term as defined in section 3(t) of the
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§ 779.18
29 CFR Ch. V (7–1–19 Edition)
Act ‘‘means any employee engaged in
an occupation in which he customarily
and regularly receives more than $20 a
month in tips’’. Regulations under
which wage credits are permitted on
account of tips paid to ‘‘tipped employees’’ are also contained in part 531 of
this chapter.
§ 779.18 Regular rate.
As explained in the interpretative
bulletin on overtime compensation,
part 778 of this chapter, employees subject to the overtime pay provisions of
the Act must generally receive for
their overtime work in any workweek
as provided in the Act not less than
one and one-half times their regular
rates of pay. Section 7(e) of the Act defines ‘‘regular rate’’ in the following
language:
(e) As used in this section the regular rate
at which an employee is employed shall be
deemed to include all remuneration for employment paid to, or on behalf of, the employee, but shall not be deemed to include:
(1) Sums paid as gifts; payments in the nature of gifts made at Christmas time or on
other special occasions, as a reward for service, the amounts of which are not measured
by or dependent on hours worked, production, or efficiency;
(2) Payments made for occasional periods
when no work is performed due to vacation,
holiday, illness, failure of the employer to
provide sufficient work, or other similar
cause; reasonable payments for traveling expenses or other expenses, incurred by an employee in the furtherance of his employer’s
interests and properly reimbursable by the
employer; and other similar payments to an
employee which are not made as compensation for his hours of employment;
(3) Sums paid in recognition of services
performed during a given period if either, (a)
both the fact that payment is to be made and
the amount of the payment are determined
at the sole discretion of the employer at or
near the end of the period and not pursuant
to any prior contract, agreement, or promise
causing the employee to expect such payments regularly; or (b) the payments are
made pursuant to a bona fide profit-sharing
plan or trust or bona fide thrift or savings
plan, meeting the requirements of the Secretary of Labor set forth in appropriate regulation which he shall issue, having due regard among other relevant factors, to the extent to which the amounts paid to the employee are determined without regard to
hours of work, production, or efficiency; or
(c) the payments are talent fees (as such talent fees are defined and delimited by regula-
tions of the Secretary) paid to performers,
including announcers, on radio and television programs;
(4) Contributions irrevocably made by an
employer to a trustee or third person pursuant to a bona fide plan for providing old age,
retirement, life, accident, or health insurance or similar benefits for employees;
(5) Extra compensation provided by a premium rate paid for certain hours worked by
the employee in any day or workweek because such hours are hours worked in excess
of eight in a day or in excess of the maximum workweek applicable to such employee
under subsection (a) or in excess of the employee’s normal working hours or regular
working hours, as the case may be;
(6) Extra compensation provided by a premium rate paid for work by the employee on
Saturdays, Sundays, holidays, or regular
days of rest, or on the sixth or seventh day
of the workweek, where such premium rate
is not less than one and one-half times the
rate established in good faith for like work
performed in nonovertime hours on other
days; or
(7) Extra compensation provided by a premium rate paid to the employee, in pursuance of an applicable employment contract
or collective-bargaining agreement, for work
outside of the hours established in good faith
by the contract or agreement as the basic,
normal, or regular workday (not exceeding 8
hours) or workweek (not exceeding the maximum workweek applicable to such employee
under subsection (a), where such premium
rate is not less than one and one-half times
the rate established in good faith by the contract or agreement for like work performed
during such workday or workweek.
This definition, which is discussed at
length in part 778 of this chapter, also
governs the computation of ‘‘regular
rate’’ for purposes of the special overtime exemption of certain commission
employees of retail or service establishments which is contained in section
7(i) of the Act and is discussed in subpart E of this part.
§ 779.19 Employer, employee, and employ.
The Act’s major provisions impose
certain requirements and prohibitions
on every ‘‘employer’’ subject to their
terms. The employment by an ‘‘employer’’ of an ‘‘employee’’ is, to the extent specified in the Act, made subject
to minimum wage and overtime pay requirements and to prohibitions against
the employment of oppressive child
labor. The Act provides its own definitions of ‘‘employer,’’ ‘‘employee’’, and
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§ 779.21
‘‘employ’’, under which ‘‘economic reality’’ rather than ‘‘technical concepts’’ determines whether there is employment subject to its terms (Goldberg
v. Whitaker House Cooperative, 366 U.S.
28; United States v. Silk, 331 U.S. 704;
Rutherford Food Corp. v. McComb, 331
U.S. 722). An ‘‘employer’’, as defined in
section 3(d) of the Act, ‘‘includes any
person acting directly or indirectly in
the interest of an employer in relation
to an employee but shall not include
the United States or any State or political subdivision of a State (except
with respect to employees of a State or
a political subdivision thereof, employed (a) in a hospital, institution, or
school referred to in the last sentence
of subsection (r) of this section, or (b)
in the operation of a railway or carrier
referred to in such sentence), or any
labor organization (other than when
acting as an employer), or anyone acting in the capacity of officer or agent
of such labor organization’’. An ‘‘employee’’, as defined in section 3(e) of
the Act, ‘‘includes any individual employed by an employer’’ (except that
the term is further qualified for purposes of counting man-days of employment by an employer in agriculture).
‘‘Employ’’, as used in the Act, is defined in section 3(g) to include ‘‘to suffer or permit to work’’. It should be
noted, as explained in the interpretative bulletin on general coverage, part
776 of this chapter, that in appropriate
circumstances two or more employers
may be jointly responsible for compliance with the statutory requirements
applicable to employment of a particular employee. It should also be
noted that ‘‘employer’’, ‘‘enterprise’’,
and ‘‘establishment’’ are not synonymous terms, as used in the Act. An employer may have an enterprise with
more than one establishment, or he
may have more than one enterprise, in
which he employs employees within
the meaning of the Act. Also, there
may be different employers who employ employees in a particular establishment or enterprise.
§ 779.20 Person.
As used in the Act (including the definition of ‘‘enterprise’’ set forth in
§ 779.21), ‘‘person’’ is defined as meaning
‘‘an individual, partnership, associa-
tion, corporation, business trust, legal
representative, or any organized group
of persons.’’ (Act, section 3(a).)
§ 779.21
Enterprise.
(a) Section 3(r) of the Act provides, in
pertinent part that ‘‘enterprise’’ as
used in the Act:
means the related activities performed (either through unified operation or common
control) by any person or persons for a common business purpose, and includes all such
activities whether performed in one or more
establishments or by one or more corporate
or other organizational units including departments of an establishment operated
through leasing arrangements, but shall not
include the related activities performed for
such enterprise by an independent contractor: Provided, That, within the meaning
of this subsection, a retail or service establishment which is under independent ownership shall not be deemed to be so operated or
controlled as to be other than a separate and
distinct enterprise by reason of any arrangement, which includes, but is not necessarily
limited to, an agreement, (a) that it will sell,
or sell only, certain goods specified by a particular manufacturer, distributor, or advertiser, or (b) that it will join with other such
establishments in the same industry for the
purpose of the collective purchasing, or (c)
that it will have the exclusive right to sell
the goods or use the brand name of a manufacturer, distributor, or advertiser within a
specified area, or by reason of the fact that
it occupies premises leased to it by a person
who also leases premises to other retail or
service establishments * * *
The scope and application of this definitional language is discussed in subpart C of this part.
(b) The 1966 amendments added two
clauses to the above language of the
definition to make it clear that ‘‘the
activities performed by any person or
persons’’ will be regarded as performed
for a business purpose if they are performed:
(1) In connection with the operation of a
hospital, an institution primarily engaged in
the care of the sick, the aged, the mentally
ill or defective who reside on the premises of
such institution, a school for mentally or
physically handicapped or gifted children, an
elementary or secondary school, or an institution of higher education (regardless of
whether or not such hospital, institution, or
school is public or private or operated for
profit or not for profit); or
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§ 779.22
29 CFR Ch. V (7–1–19 Edition)
(2) In connection with the operation of a
street, suburban, or interurban electric railway, or local trolley or motorbus carrier, if
the rates and services of such railway or carrier are subject to regulation by a State or
local agency (regardless of whether or not
such railway or carrier is public or private or
operated for profit or not for profit).
A discussion of the scope and application of this added language is contained in part 776 of this chapter.
§ 779.22 Enterprise engaged in commerce or in the production of goods
for commerce.
The portions of the former and
present definitions of ‘‘enterprise engaged in commerce or in the production of goods for commerce’’ (contained
in section 3(s) of the Act prior to the
1966 amendments and as amended in
1966) which are important to a determination of the application of provisions of the Act to employees employed
by retailers generally and by certain
retail or service establishments are as
follows:
Previous coverage (prior to the 1966
amendments):
(s) Enterprise engaged in commerce or in
the production of goods for commerce means
any of the following in the activities of
which employees are so engaged, including
employees handling, selling, or otherwise
working on goods that have been moved in or
produced for commerce by any person:
(1) Any such enterprise which has one or
more retail or service establishments if the
annual gross volume of sales of such enterprise is not less than $1 million, exclusive of
excise taxes at the retail level which are separately stated and if such enterprise purchases or receives goods for resale that move
or have moved across State lines (not in deliveries from the reselling establishment)
which amount in total annual volume to
$250,000 or more;
*
*
*
*
*
(5) Any gasoline service establishment if
the annual gross volume of sales of such establishment is not less than $250,000, exclusive of excise taxes at the retail level which
are separately stated:
Provided, That an establishment shall not
be considered to be an enterprise engaged in
commerce or in the production of goods for
commerce, or a part of an enterprise engaged
in commerce or in the production of goods
for commerce, and the sales of such establishment shall not be included for the purpose of determining the annual gross volume
of sales of any enterprise for the purpose of
this subsection, if the only employees of
such establishment are the owner thereof or
persons standing in the relationship of parent, spouse, or child of such owner.
New coverage (beginning with the 1966
amendments):
(s) Enterprise engaged in commerce or in the
production of goods for commerce means an enterprise which has employees engaged in
commerce or in the production of goods for
commerce, including employees handling,
selling, or otherwise working on goods that
have been moved in or produced for commerce by any person, and which:
(1) During the period February 1, 1967,
through January 31, 1969, is an enterprise
whose annual gross volume of sales made or
business done is not less than $500,000 (exclusive of excise taxes at the retail level which
are separately stated) or is a gasoline service
establishment whose annual gross volume of
sales is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated), and beginning February 1,
1969, is an enterprise whose annual gross volume of sales made or business done is not
less than $250,000 (exclusive of excise taxes at
the retail level which are separately stated);
*
*
*
*
§ 779.23 Establishment.
As used in the Act, the term establishment, which is not specially defined
therein, refers to a ‘‘distinct physical
place of business’’ rather than to ‘‘an
entire business or enterprise’’ which
may include several separate places of
business. This is consistent with the
meaning of the term as it is normally
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(4) Is engaged in the operation of a hospital, an institution primarily engaged in
the care of the sick, the aged, the mentally
ill or defective who reside on the premises of
such institution, a school for mentally or
physically handicapped or gifted children, an
elementary or secondary school, or an institution of higher education (regardless of
whether or not such hospital, institution, or
school is public or private or operated for
profit or not for profit).
Any establishment which has as its only
regular employees the owner thereof or the
parent, spouse, child, or other member of the
immediate family of such owner shall not be
considered to be an enterprise engaged in
commerce or in the production of goods for
commerce or a part of such an enterprise,
and the sales of such establishment shall not
be included for the purpose of determining
the annual gross volume of sales of any enterprise for the purpose of this subsection.
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§ 779.100
used in business and in government, is
judicially settled, and has been recognized in the Congress in the course of
enactment of amendatory legislation
(Phillips v. Walling, 324 U.S. 490; Mitchell
v. Bekins Van & Storage Co., 352 U.S.
1027; 95 Cong. Rec. 12505, 12579, 14877; H.
Rept. No. 1453, 81st Cong., 1st Sess., p.
25). As appears more fully elsewhere in
this part, this is the meaning of the
term as used in sections 3(r), 3(s), 6(d),
7(i), 13(a), 13(b), and 14 of the Act.
§ 779.24 Retail or service establishment.
In the 1949 amendments to the Act,
the term ‘‘retail or service establishment’’, which was not previously defined in the law, was given a special
definition for purposes of the Act. The
legislative history of the 1961 and the
1966 amendments to the Act, which use
the same term in a number of provisions relating to coverage and exemptions, indicates that no different meaning was intended by the term ‘‘retail or
service establishment’’ as used in the
new provisions from that already established by the Act’s definition. On
the contrary, the existing definition
was reenacted in section 13(a)(2) of the
Act as amended in 1961 and 1966 as follows: ‘‘A ‘retail or service establishment’ shall mean an establishment 75
per centum of whose annual dollar volume of sales of goods or services (or of
both) is not for resale and is recognized
as retail sales or services in the particular industry’’. The application of
this definition, which has had much judicial construction since its original
enactment, is considered at length in
subpart D of this part. As is apparent
from the quoted language, not every
establishment which engages in retail
selling of goods or services will constitute a ‘‘retail or service establishment’’ within the meaning of the Act.
Subpart B—Employment to Which
the Act May Apply: Basic
Principles and Individual Coverage
GENERAL PRINCIPLES
§ 779.100 Basic coverage in general.
Except as otherwise provided in specific exemptions, the minimum wage,
maximum hours, overtime pay, equal
pay, and child labor provisions of the
Act have applied and continue to apply
subsequent to the 1966 amendments to
employees who are individually engaged in interstate commerce or in the
production of goods for such commerce
as these terms are defined in the Act
and to employees in certain enterprises
described in the amended section 3(s)
which were covered under section 3(s)
of the Act prior to the amendments.
Through the broadening of the definition of a covered enterprise the Act’s
coverage was extended to additional
employees because of their employment in certain enterprises beginning
February 1, 1967, and in certain other
enterprises beginning February 1, 1969.
Such covered enterprises are described
in section 3(s) as enterprises engaged in
commerce or in the production of goods
for commerce and further described in
sections 3(s) (1) through (4) of the
amended Act. A detailed discussion of
the coverage of employees in those enterprises covered under the prior and
amended Act of interest to the retail
industry is contained in subpart C of
this part. The employer must comply
with the minimum wage and overtime
requirements of the Act with respect to
all employees who are covered either
because they are individually engaged
in interstate or foreign commerce or in
the production of goods for such commerce, or because of their employment
in an enterprise covered under the
prior or amended enterprise definition
of the Act, except those who may be
denied one or both of these benefits by
virtue of some specific exemption provision of the Act. Of special interest to
the retailer in a covered enterprise is
the exemption from the minimum wage
and overtime provisions for certain
small retail or service establishments
of such enterprise. This exemption is
applicable under the conditions and
subject to exceptions stated in section
13(a) (2) of the Act to any retail or
service establishment which has an annual dollar volume of sales of less than
$250,000 (exclusive of certain excise
taxes) even if the establishment is a
part of an enterprise that is covered by
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§ 779.101
29 CFR Ch. V (7–1–19 Edition)
the Act. This exemption and other exemptions of particular interest to retailers and their employees are discussed in subparts D and E of this part.
The child labor provisions as they
apply to retail or service businesses are
discussed in subpart F of this part.
§ 779.101 Guiding principles for applying coverage and exemption provisions.
It is clear that Congress intended the
Fair Labor Standards Act to be broad
in its scope. ‘‘Breadth of coverage is
vital to its mission.’’ (Powell v. U.S.
Cartridge Co., 339 U.S. 497.) An employer
who claims an exemption under the
Act has the burden of showing that it
applies. (Walling v. General Industries
Co., 330 U.S. 545; Mitchell v. Kentucky
Finance Co., 359 U.S. 290; Fleming v.
Hawkeye Pearl Button Co., 113 F. 2d 52.)
Conditions specified in the language of
the Act are ‘‘explicit prerequisites to
exemption.’’ (Arnold v. Kanowsky, 361
U.S. 388.) ‘‘The details with which the
exemptions in this Act have been made
preclude their enlargement by implication.’’ (Addison v. Holly Hill, 322 U.S. 60;
Maneja v. Waialua, 349 U.S. 254.) Exemptions provided in the Act ‘‘are to
be narrowly construed against the employer seeking to assert them’’ and
their application limited to those who
come plainly and unmistakably within
their terms and spirit; this restricted
or narrow construction of the exemptions is necessary to carry out the
broad objectives for which the Act was
passed. (Phillips v. Walling, 324 U.S. 490;
Mitchell v. Kentucky Finance Co., supra;
Arnold v. Kanowsky, supra; Calaf v.
Gonzalez, 127 F. 2d 934; Bowie v. Gonzalez, 117 F. 2d 11; Mitchell v. Stinson,
217 F. 2d 210; Fleming v. Hawkeye Pearl
Button Co., 113 F. 2d 52.)
§ 779.102 Scope of this subpart.
The Act has applied since 1938 and
continues to apply to all employees,
not specifically exempted, who are engaged: (a) In interstate or foreign commerce or (b) in the production of goods
for such commerce, which is defined to
include any closely related process or
occupation directly essential to such
production. (See §§ 779.12–779.16 for definitions governing the scope of this coverage.) Prior to the 1961 amendments a
retailer was not generally concerned
with the coverage provisions as they
applied to his individual employees because retail or service establishments
ordinarily were exempt. However, in
some cases such coverage was applicable as where employees were employed
in central offices of warehouses of retail chain store systems and, therefore,
were not exempt. (See § 779.118.) Some
exemptions for retail or service establishments were narrowed as a result of
the 1961 amendments and further revised or eliminated by the 1966 amendments effective February 1, 1967. Therefore, discussion of the individual coverage provisions of the Act is pertinent
and this subpart will discuss briefly the
principles of such coverage with particular reference to employment in the
retail or service trades. A more comprehensive discussion with respect to
employees engaged in commerce or in
the production of goods for commerce
may be found in part 776 of this chapter, the general coverage bulletin.
EMPLOYEES ENGAGED IN COMMERCE OR
IN THE PRODUCTION OF GOODS FOR
COMMERCE
§ 779.103 Employees ‘‘engaged in commerce.’’
Employees are ‘‘engaged in commerce’’ within the meaning of the Act
when they are performing work involving or related to the movement of persons or things (whether tangibles or intangibles, and including information
and intelligence) among the several
States or between any State and any
place outside thereof. (The statutory
definition of commerce is contained in
section 3(b) of the Act and is set forth
in § 779.12.) The courts have made it
clear that this includes every employee
employed in the channels of such commerce or in activities so closely related
to this commerce, as to be considered a
part of it as a practical matter. (Court
cases are cited in the discussion of this
term in §§ 776.9–776.13 of this chapter).
Typically, but not exclusively, employees engaged in interstate or foreign
commerce include employees in distributing industries, such as wholesaling or retailing, who sell, handle or
otherwise work on goods moving in
interstate commerce as well as workers
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Wage and Hour Division, Labor
§ 779.107
who order, receive, pack, ship, or keep
records of such goods; clerical and
other workers who regularly use the
mails, telephone or telegraph for interstate communication; and employees
who regularly travel across State lines
while working.
§ 779.104 Employees ‘‘engaged in the
production of goods for commerce.’’
The activities constituting ‘‘production’’ within the meaning of the phrase
‘‘engaged in * * * the production of
goods for commerce’’ are defined in
section 3(j) of the Act. (The statutory
definition is set forth in § 779.13.) The
handling or otherwise working on
goods intended for shipment out of the
State, directly or indirectly, in engagement in the ‘‘production’’ of goods for
commerce. Thus, employees in retail
stores who sell, pack, or otherwise
work on goods which are to be shipped
or delivered outside of the State are
engaged in the production of goods for
commerce. Typically, but not exclusively, employees engaged in the production of goods for interstate or foreign commerce, include those who
work in manufacturing, processing and
distributing establishments, including
wholesale or retail establishments,
that produce goods for interstate or
foreign commerce. This includes everyone, including office, management,
sales and shipping personnel, and maintenance, custodial and protective employees, whether they are employed by
the producer or an intermediary. Employees may be covered even if their
employer does not ship his goods directly in such commerce. The goods
may leave the State through another
firm. The workers may produce goods
which become a part or ingredient of
goods shipped in interstate or foreign
commerce by another firm. Also covered are workers who are engaged in a
closely related process or occupation
directly essential to such production.
(See § 779.105.)
§ 779.105 Employees engaged in activities ‘‘closely related’’ and ‘‘directly
essential’’ to the production of
goods for commerce.
Some employees are covered because
their work, although not actually a
part of such production, is ‘‘closely re-
lated’’ and ‘‘directly essential’’ to it.
This group of employees includes bookkeepers, stenographers, clerks, accountants and auditors and other office
and white collar workers, and employees doing payroll, timekeeping and
time study work for the producer of
goods; employees in the personnel,
labor relations, advertising, promotion,
and public relations activities of the
producing enterprise; work instructors
for the producer; employees maintaining, servicing, repairing or improving
the buildings, machinery, equipment,
vehicles or other facilities used in the
production of goods for commerce, and
such custodial and protective employees as watchmen, guards, firemen, patrolmen, caretakers, stockroom workers, and warehousemen; and transportation workers bringing supplies, materials, or equipment to the producer’s
premises, removing waste materials
therefrom, or transporting materials or
other goods, or performing such other
transportation activities, as the needs
of production may require. These examples are illustrative, rather than exhaustive, of the group of employees of
a producer who are ‘‘engaged in the
production of goods for commerce’’ by
reason of performing activities closely
related and directly essential to such
production.
§ 779.106 Employees employed by an
independent employer.
Where the work of an employee
would be closely related and directly
essential to the production of goods for
commerce if he were employed by a
producer of the goods, the mere fact
that the employee is employed by an
independent employer will not justify a
different answer. (See §§ 776.17(c) and
776.19 of this chapter.)
§ 779.107 Goods defined.
The term goods is defined in section
3(i) of the Act and has a well established meaning under the Act since it
has been contained in the statute from
the date of its enactment in 1938. A
comprehensive statement of the meaning of the term ‘‘goods’’ is contained in
part 776 of this chapter, which also
cites the court cases in which the term
was construed. The statutory definition of ‘‘goods’’ is set forth in § 779.14.
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§ 779.108
29 CFR Ch. V (7–1–19 Edition)
It will be observed that the term
‘‘goods’’ includes any part or ingredient of the goods. Also that ‘‘goods’’
as defined in the Act are not limited to
commercial goods, or articles of trade,
or, indeed, to tangible property, but include ‘‘articles or subjects of commerce
of any character.’’ Thus telegraphic
messages have been held to be ‘‘goods’’
within the meaning of the Act (Western
Union Tel. Co. v. Lenroot, 323 U.S. 490).
Some of the ‘‘articles or subjects of
commerce’’ which fall within the definition of ‘‘goods’’ include written materials such as newspapers, magazines,
brochures, pamphlets, bulletins, and
announcements; written reports, fiscal
and other statements and accounts,
correspondence, and other documents;
advertising, motion pictures, newspaper and radio copy; art work and
manuscripts for publication; sample
books, letterheads, envelopes, shipping
tags, labels, checkbooks, blankbooks,
book covers, advertising circulars, and
wrappers and other packaging materials.
ing of the Act, as explained in part 776
of this chapter.
§ 779.108 Goods produced for commerce.
Goods are ‘‘produced for commerce’’
if they are ‘‘produced, manufactured,
mined, handled or in any other manner
worked on’’ in any State for sale,
trade, transportation, transmission,
shipment or delivery, to any place outside thereof. Goods are produced for
commerce where the producer intends,
hopes, expects, or has reason to believe
that the goods or any unsegregated
part of them will move (in the same or
in an altered form or as a part or ingredient of other goods) in interstate or
foreign commerce. If such movement of
the goods in commerce can reasonably
be anticipated by the producer when
the goods are produced, it makes no
difference whether he himself or the
person to whom the goods are transferred puts the goods in interstate or
foreign commerce. The fact that goods
do move in interstate or foreign commerce is strong evidence that the producer intended, hoped, expected, or had
reason to believe that they would so
move. Goods produced to serve the
movement of interstate commerce
within the same State are also produced for commerce within the mean-
§ 779.110 Employees in retailing whose
activities may bring them under the
Act.
§ 779.109 Amount of activities which
constitute engaging in commerce or
in the production of goods for commerce.
The Act makes no distinction as to
the percentage, volume, or amount of
activities of either the employee or the
employer which constitute engaging in
commerce or in the production of goods
for commerce. However, an employee
whose in-commerce or production activities are isolated, sporadic, or occasional and involve only insubstantial
amounts of goods will not be considered ‘‘engaged in commerce or in the
production of goods for commerce’’ by
virtue of that fact alone. The law is
settled that every employee whose activities in commerce or in the production of goods for commerce, even
though small in amount are regular
and recurring, is considered ‘‘engaged
in commerce or in the production of
goods for commerce’’.
The discussion in §§ 779.103 to 779.109
included general reference to types of
employees in the retail or service field
whose individual activities constitute
engagement in interstate or foreign
commerce or in the production of goods
for such commerce within the meaning
of the Act. There are many classes of
employees customarily employed by
retail or service establishments or enterprises whose individual activities
ordinarily constitute engagement in
commerce or in the production of goods
for commerce within the meaning of
the Act. The groups of employees discussed in the following §§ 779.111 to
779.118, are illustrative only. There are
other employees whose activities may
be covered; also there are other activities performed by the groups discussed
which would result in individual coverage under the Act.
§ 779.111
Buyers and their assistants.
Buyers and their assistants, employed by retail businesses, as a regular part of their duties, generally
travel across State lines, or use the
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§ 779.118
mails, telegraph, or telephone for
interstate communication to order
goods; or they regularly send or receive, across State lines, written reports, messages or other documents.
These activities of such employees constitute engagement ‘‘in commerce’’
within the meaning of the Act.
§ 779.112
Office employees.
Similarly office employees of retail
businesses who regularly and recurrently check records of and make payments for goods shipped to their employer from outside of the State, or
regularly and recurrently keep records
of or otherwise work on the accounts of
their employer’s out-of-State customers, or who regularly and recurrently prepare or mail letters, checks,
reports or other documents to out-ofState points, are engaged both in commerce and in the production of goods
for commerce within the meaning of
the Act. Likewise, timekeepers who
regularly and recurrently prepare and
maintain payrolls for and pay employees who are engaged in commerce or in
the production of goods for commerce
are themselves engaged in covered activities.
§ 779.113 Warehouse and stock room
employees.
Warehouse and stock room employees of retail businesses who regularly
and recurrently engage in the loading
or unloading of goods moving in commerce, or who regularly and recurrently handle, pack or otherwise work
on goods that are destined to out-ofState points are engaged in covered activities.
§ 779.114
Transportation employees.
Transportation employees of retail
businesses, such as truck drivers or
truck drivers’ helpers, who regularly
and recurrently cross State lines to
make deliveries or to pick up goods for
their employer; or who regularly and
recurrently pick up at rail heads, air,
bus or other such terminals goods originating out of State, or deliver to such
terminals goods destined to points out
of State; and dispatchers who route,
plan or otherwise control such out-ofState deliveries and pick ups, are en-
gaged in interstate commerce within
the meaning of the Act.
§ 779.115 Watchmen and guards.
Watchmen or guards employed by retail businesses who protect the warehouses, workshops, or store premises
where goods moving in interstate or
foreign commerce are kept or where
goods are produced for such commerce,
are covered under the Act.
§ 779.116 Custodial and maintenance
employees.
Custodial and maintenance employees who perform maintenance and custodial work on the machinery, equipment, or premises where goods regularly are produced for commerce or
from which goods are regularly shipped
in interstate commerce are engaged in
covered activities.
§ 779.117 Salesmen and sales clerks.
A salesman or a sales clerk who regularly and recurrently takes orders for,
or sells, or selects merchandise for delivery to points outside the State or
which are to be shipped or delivered to
a customer from a point outside the
State, i.e. drop shipments; or who
wraps, packs, addresses or otherwise
prepares goods for out-of-State shipments is performing covered activities.
§ 779.118 Employees providing central
services for multi-unit organizations.
Employees providing central services
for a multiunit organization may be
engaged both ‘‘in commerce’’ and ‘‘in
the production of goods for commerce’’
within the meaning of the Act. For example, employees engaged in work relating to the coordinated purchasing,
warehousing and distribution (and in
the administrative and clerical work
relating to such activities) for various
retail units of a chain are covered
under the Act. (See Phillips Co. v.
Walling, 324 U.S. 490; Walling v. Jacksonville Paper Co., 317 U.S. 564, affirming,
128 F. 2d 935 (CA–5); Mitchell v. C. & P.
Stores, 286 F. 2d 109 (CA–5); Mitchell v. E.
G. Shinner & Co., Inc., 221 F. 2d 260 (CA–
7); Donovan v. Shell Oil Co., 168 F. 2d 776
(CA–8).) In addition, employees who
regularly and recurrently correspond
and maintain records of activities of
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29 CFR Ch. V (7–1–19 Edition)
out-of-State stores and such employees
as traveling auditors, inventory men,
window display men, etc., who regularly travel from State to State in the
performance of their duties are covered
under the Act. (See Mitchell v. Kroger
Co., 248 F. 2d 935 (CA–8).)
§ 779.119 Exempt occupations.
Of course, it should be noted that although employees may be engaged in
commerce or in the production of goods
for commerce within the meaning of
the Act, they may be exempt from the
Act’s minimum wage or overtime provisions (or both). For a complete list of
such exemptions the Act should be consulted. Those exemptions, however,
which are of particular interest to employers and employees in the retail
field are discussed in subparts D, E,
and F of this part.
Subpart C—Employment to Which
the Act May Apply; Enterprise
Coverage
ENTERPRISE; THE BUSINESS UNIT
§ 779.200 Coverage expanded by 1961
and 1966 amendments.
The 1961 amendments for the first
time since the enactment of the Fair
Labor Standards Act of 1938 provided
that all employees in a particular business unit are covered by the Act. Prior
to the 1961 amendments each employee’s coverage depended on whether that
employee’s activities were in commerce or constituted the production of
goods for commerce. All employees employed in an ‘‘enterprise’’ described in
section 3(s)(1) through (5) of the Act as
it was amended in 1961 and section
3(s)(1) through (4) of the Act as amended in 1966 are also covered. Thus, it is
necessary to consider the meaning of
the term ‘‘enterprise’’ as used in the
Act.
§ 779.201 The place of the term ‘‘enterprise’’ in the Act.
The term ‘‘enterprise’’ is defined in
section 3(r) of the Act and, wherever
used in the Act, is governed by this definition. (§ 779.21(a) provides that portion of the definition of ‘‘enterprise’’
which is pertinent with respect to retail and service enterprises.) The term
is a key in determining the applicability of the Act to these businesses.
The ‘‘enterprise’’ is the unit for determining whether the conditions of section 3(s)(1) through (5) of the prior Act
and section 3(s)(1) through (4) of the
amended Act, including, where applicable, the requisite dollar volume are
met. The ‘‘enterprise’’ is also the unit
for determining which employees not
individually covered by the Act are entitled to the minimum wage, overtime,
and equal pay benefits, and to the child
labor protection, under sections 6, 7,
and 12 of the Act. In general, if the
‘‘enterprise’’ comes within any of the
categories described in section 3(s)(1)
through (5) of the prior Act or section
3(s)(1) through (4) of the amended Act,
all employees employed in the ‘‘enterprise’’ are covered by the Act and, regardless of their duties, are entitled to
the Act’s benefits unless a specific exemption applies.
§ 779.202
Basic concepts of definition.
Under the definition, the ‘‘enterprise’’ consists of ‘‘the related activities performed * * * for a common business purpose.’’ All of the activities
comprising the enterprise must be ‘‘related.’’ Activities serving a single business purpose may be related, although
different, but other activities which
are not related are not included in the
enterprise. The definition makes clear
that the enterprise includes all such related activities which are performed
through ‘‘unified operation’’ or ‘‘common control.’’ This is true even if they
are performed by more than one person, or in more than one establishment, or by more than one corporate or
other organizational unit. Specifically
included, as a part of the enterprise,
are departments of an establishment
operated through leasing arrangements. On the other hand, the definition excludes from the ‘‘enterprise’’ activities only performed ‘‘for’’ the enterprise rather than as a part of it by an
independent contractor even if they are
related to the activities of the enterprise. Also, it makes clear that a truly
independent retail or service establishment does not become a part of a larger enterprise merely because it enters
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§ 779.204
into certain types of franchise or collective purchasing arrangements or because it has a common landlord with
other such retail establishments.
§ 779.203 Distinction between ‘‘enterprise,’’ ‘‘establishment,’’ and ‘‘employer.’’
The coverage, exemption and other
provisions of the Act depend, in part,
on the scope of the terms employer, establishment, or enterprise. As explained
more fully in part 776 of this chapter,
these terms are not synonymous. The
term employer has been defined in the
Act since its inception and has a well
established meaning. As defined in section 3(d), it includes, with certain stated exceptions, any person acting directly or indirectly in the interest of
an employer in relation to an employee. (See § 779.19.) The term establishment means a distinct physical place
of business rather than an entire business
or enterprise. (See § 779.23.) The term enterprise was not used in the Act prior to
the 1961 amendments, but the careful
definition and the legislative history of
the 1961 and 1966 amendments provide
guidance as to its meaning and application. As defined in the Act, the term
enterprise is roughly descriptive of a
business rather than of an establishment or of an employer although on occasion the three may coincide. The enterprise may consist of a single establishment (see § 779.204(a)) which may be
operated by one or more employers; or
it may be composed of a number of establishments which may be operated
by one or more employers (see
§ 779.204(b)). The enterprise is not necessarily coextensive with the entire
business activities of an employer; a
single employer may operate more
than one enterprise (see § 779.204(c)).
The Act treats as separate enterprises
different businesses which are unrelated to each other even if they are operated by the same employer.
§ 779.204 Common
prise.’’
types
of
‘‘enter-
(a) The single establishment business.
In the simplest type of organization—
the entire business ordinarily is one
enterprise. The entire business activity
of the single owner-employer may be
performed in one establishment, as in
the typical independently owned and
controlled retail store. In that case the
establishment and the enterprise are
one and the same. All of the activities
of the store are ‘‘related’’ and are performed for a single business purpose
and there is both unified operation and
common control. The entire business is
the unit for applying the statutory
tests. If the coverage tests are met, all
of the employees employed by the establishment are employed in the enterprise and will be entitled to the benefits of the Act unless otherwise exempt.
(b) The multiunit business. In many
cases, as in the typical chain of retail
stores, one company conducts its single
business in a number of establishments. All of the activities ordinarily
are related and performed for one business purpose, the single company
which owns the chain also controls the
entire business, and the entire business
is a single enterprise. The dollar volume of the entire business from all of
its establishments is added together to
determine whether the requisite dollar
volume tests are met. If the coverage
tests are met, all of the employees employed in the business will be entitled
to the benefits of the Act unless otherwise exempt.
(c) Complex business organizations. In
complex retail and service organizations, questions may arise as to whether certain activities are a part of a particular enterprise. In some cases one
employer may operate several separate
enterprises; in others, several employers may conduct their business activities in such a manner that they are
part of a single enterprise. The answer,
in each case, as to whether or not the
‘‘enterprise’’ includes certain activities
will depend upon whether the particular activities are ‘‘related’’ to the
business purpose of such enterprise and
whether they are performed with its
other activities through ‘‘unified operation’’ or ‘‘common control,’’ or whether, on the other hand, they are performed for a separate and distinct business purpose. As the Senate Report
states,
related activities conducted by separate
business entities will be considered a part of
the same enterprise where they are joined either through unified operation or common
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§ 779.205
29 CFR Ch. V (7–1–19 Edition)
control into a unified business system or
economic unit to serve a common business
purpose.
(S. Rept. 145, 87th Cong., 1st Sess., p. 41; see
also H. Rept. 1366, 89th Cong., 2d Sess., p. 9.)
§§ 779.205 through 779.211 discuss the terms of
the definition and may aid in making these
determinations.
RELATED ACTIVITIES
§ 779.205 Enterprise must consist of
‘‘related activities.’’
The enterprise must consist of certain ‘‘related activities’’ performed for
a common business purpose; activities
which are not ‘‘related’’ are not a part
of the enterprise even if performed by
the same employer. Moreover, even if
activities are ‘‘related’’ they may be
excluded from the enterprise if they
are performed only ‘‘for’’ the enterprise
and not as a part of it by an independent contractor. This is discussed
separately in § 779.206.
§ 779.206 What are ‘‘related activities.’’
(a) The Senate Report on the 1961
amendments states as follows, with respect to the meaning of related activities:
Within the meaning of this term, activities
are ‘‘related’’ when they are the same or
similar, such as those of the individual retail
or service stores in a chain, or departments
of an establishment operated through leasing
arrangements. They are also ‘‘related’’ when
they are auxiliary and service activities such
as central office and warehousing activities
and bookkeeping, auditing, purchasing, advertising and other services. Likewise, activities are ‘‘related’’ when they are part of
a vertical structure such as the manufacturing, warehousing, and retailing of a particular product or products under unified operation or common control for a common
business purpose. (Senate Report No. 145,
87th Cong., 1st Sess., Page 41.)
Thus, activities will be regarded as
‘‘related’’ when they are the same or
similar or when they are auxiliary or
service activities such as warehousing,
bookkeeping, purchasing, advertising,
including, generally, all activities
which are necessary to the operation
and maintenance of the particular
business. So also, all activities which
are performed as a part of the unified
business operation will be ‘‘related,’’
including, in appropriate cases, the
manufacturing, warehousing, and dis-
tribution of its goods, the repair and
maintenance of its equipment, machinery and its premises, and all other activities which are performed for the
common business purpose of the enterprise. The Senate Report on the 1966
amendments makes it plain that related, even if somewhat different, business activities can frequently be part
of the same enterprise, and that activities having a reasonable connection
with the major purpose of an enterprise
would be considered related. (Senate
Report No. 1487, 89th Cong., 2d Sess.,
Page 7.) A more comprehensive discussion of ‘‘related activities’’ will be
found in part 776 of this chapter.
(b) Generally, the answer to the question whether particular activities are
‘‘related’’ or not, will depend in each
case upon whether the activities serve
a business purpose common to all the
activities of the enterprise, or whether
they serve a separate and unrelated
business purpose. For example, where a
company operates retail or service establishments, and also engages in a
separate and unrelated construction
business, the construction activities
will not be ‘‘related’’ and will constitute a separate enterprise if they are
conducted independently and apart
from the retail operations. Where, however, the retail and construction activities are conducted for a common
business purpose, they may be ‘‘related,’’ and if they are performed
through unified operation or common
control, they will be a part of a single
enterprise. Thus, a retail store enterprise may engage in construction activities as an additional outlet for
building materials which it sells, or
otherwise to serve its retail operations.
It may act as its own contractor in
constructing or reconstructing its own
stores and related facilities. In such a
case, the construction activities will be
‘‘related’’ activities. Other examples
may also be cited. The answer in each
case will necessarily depend upon all
the facts.
§ 779.207 Related activities in retail
operations.
In the case of an enterprise which has
one or more retail or service establishments, all of the activities which are
performed for the furtherance of the
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Wage and Hour Division, Labor
§ 779.209
common business purpose of operating
the retail or service establishments are
‘‘related activities.’’ It is not material
that the enterprise sells different goods
or provides different services, or that it
operates separate retail or service establishments. As stated in the definition, the enterprise includes all related
activities whether performed ‘‘in one
or more establishments.’’ Since the activities performed by one retail or
service establishment are the ‘‘same or
similar’’ to the activities performed by
another, they are, as such, ‘‘related activities.’’ (See Senate Report No. 145,
87th Cong. 1st Sess. p. 41.) For example,
in operations of a single retailing business a drug store may sell a large variety of different products, and a grocery
store may sell clothing and furniture
and other goods. Clearly all of these activities are ‘‘related.’’ Similarly it is
clear that all activities of a department store are ‘‘related activities,’’
even if the store sells a great variety of
different types of goods and services
and even if, as in some cases, the departmentalized business is conducted
in more than one location, as where
the department selling garden supplies
or electrical appliances is located on
separate premises. Whether on the
same premises or at separate locations,
the activities involved in retail selling
of goods or services, of any type, are
related activities and they will be considered one enterprise where they are
performed, through unified operation
or common control, for a common business purpose.
§ 779.208 Auxiliary activities which are
‘‘related activities.’’
As stated in Senate Report No. 145,
87th Congress, 1st Session, cited in
§ 779.206, auxiliary and service activities, such as central office and
warehousing activities and bookkeeping, auditing, purchasing, advertising and other similar services, also
are ‘‘related activities.’’ When such activities are performed through unified
operation or common control, for a
common business purpose, they will be
included in the enterprise. The following are some additional examples of
auxiliary activities which are ‘‘related
activities’’ and which may be included
in the enterprise:
(a) Credit rating and collection services;
(b) Promotional activities including
advertising, sign painting, display services, stamp redemptions, and prize contests;
(c) Maintenance and repair services
of plant machinery and equipment including painting, decorating, and similar services;
(d) Store or plant engineering, site
location and related survey activities;
(e) Detective, guard, watchmen, and
other protective services;
(f) Delivery services;
(g) The operation of employee or customer parking lots;
(h) The recruitment, hiring and
training activities, and other managerial services;
(i) Recreational and health facilities
for customers or employees including
eating and drinking facilities (note
that employees primarily engaged in
certain food service activities in retail
establishments may be exempt from
the overtime provisions under section
13(b)(18) of the Act if the specific conditions are met; see § 779.388);
(j) The operation of employee benefit
and insurance plans; and
(k) Repair and alteration services on
goods for sale or sold to customers.
§ 779.209 Vertical activities which are
‘‘related activities.’’
(a) The Senate Report also states (see
§ 779.206 that activities are ‘‘related’’
when they are ‘‘part of a vertical structure such as the manufacturing,
warehousing, and retailing of a particular product or products.’’ Where
such activities are performed through
unified operation or common control
for a common business purpose they
will be regarded as a part of the enterprise.
(b) Whether activities are vertically
‘‘related’’ activities and part of a single
enterprise, or whether they constitute
separate businesses are separate enterprises, depends upon the facts in each
case. In all of these cases of so-called
‘‘vertical operations,’’ the determination whether the activities are ‘‘related,’’ depends upon the extent to
which the various business activities,
such as a wholesaling and retailing or
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§ 779.210
29 CFR Ch. V (7–1–19 Edition)
manufacturing and retailing, are interrelated and interdependent and are performed to serve a business objective
common to all. The mere fact that
they are under common ownership is
not, by itself, sufficient to bring them
within the same enterprise. Thus,
where a manufacturing business is carried on separately from and wholly
independently of a retail business, with
neither serving the business purpose of
the other, they are separate businesses
even if they are under common ownership. However, where the manufacturing operations are performed in substantial part for the purpose of distributing the goods through the retail
stores, or the retail outlet serves to
carry out a business purpose of the
manufacturing plant, retailing and
manufacturing will be ‘‘related’’ activities and performed for a ‘‘common
business purpose,’’ and they will be a
single enterprise if they are performed
through unified operations or common
control.
(c) In these cases of ‘‘vertical operations’’ a practical judgment will be
required to determine whether the activities are maintained and operated as
separate and distinct businesses with
different objectives or whether they, in
fact, constitute a single integrated
business enterprise. The answer necessarily will depend upon all the facts
in each case.
§ 779.210 Other activities which may
be part of the enterprise.
(a) An enterprise may perform certain activities that appear entirely foreign to its principal business but which
may be a part of the enterprise because
of the manner in which they are performed. In some cases these activities
may be a very minor and incidental
part of its business operations. For example a retail store may accept payments of utility bills, provide a notarial service, sell stamps, bus and theater
tickets, or travellers’ checks, etc.
These and other activities may be entirely different from the enterprise’s
principal business but they may be performed on the same premises and by
the same employees or otherwise under
such circumstances as to be a part of
the enterprise.
(b) Sometimes such activities are
performed as an adjunct to the principal business to create good will or to
attract customers. In other cases, the
businessman may engage in them primarily for the additional revenue.
Some such foreign activities may be
conducted in a more elaborate manner,
as where the enterprise operates a bus
stop or a post office substation as an
adjunct to a principal business such as
a hotel or a retail store. Where in such
a case the activities are performed in a
physically separate ‘‘establishment’’
(see §§ 779.303–779.308) from the other
business activities of the enterprise
and are functionally operated as a separate business, separately controlled,
with separate employees, separate
records, and a distinct business objective of its own, they may constitute a
separate enterprise. Where, however,
such activities are intermingled with
the other activities of the enterprise
and have a reasonable connection to
the same business purpose they will be
a part of the enterprise.
§ 779.211 Status of activities which are
not ‘‘related.’’
Activities which are not related even
if performed by the same employer are
not included as a part of the enterprise.
The receipts from the unrelated activities will not be counted toward the annual dollar volume of sales or business
under section 3(s) and the employees
performing such unrelated activities
will not be covered merely because
they work for the same employer. Common ownership standing alone does not
bring unrelated activities within the
scope of the same enterprise. If, for example, one individual owns or controls
a bank, a filing station, and a factory,
the mere fact of common ownership
will not make them one enterprise.
However, if it appears that there is a
reasonable relationship of all the activities to a single business purpose a
different conclusion might be warranted. Activities which are not ‘‘related’’ will be treated separately for
purposes of the tests contained in section 3(s)(1) through (5) of the prior Act
and section 3(s)(1) through (4) of the
amended Act. For example, in the case
where a single company operates retail
grocery stores and also engages in an
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Wage and Hour Division, Labor
§ 779.214
unrelated business of constructing
homes, one ‘‘enterprise’’ for purposes of
section 3(s)(1) of both the prior and the
amended Act will consist of the retail
grocery stores and any activities related to them, and home construction
activities will constitute a separate enterprise. The latter will not be included
in determining whether the retail business enterprise meets the conditions of
section 3(s)(1), and the construction
employees will not be covered merely
because the retail business is covered.
The construction business will be considered separately under section 3(s)(4)
of the poor Act and section 3(s)(3) of
the amended Act.
COMMON BUSINESS PURPOSE
§ 779.212 Enterprise must consist of related activities performed for a
‘‘common business purpose.’’
The related activities described in
section 3(r) as included in the statutory enterprise are those performed for
a ‘‘common business purpose.’’ (See the
comprehensive discussion in 29 CFR
part 776.) The term ‘‘common business
purpose’’ as used in the definition does
not have a narrow concept and is not
intended to be limited to a single business establishment or a single type of
business. As pointed out above, retailing, wholesaling and manufacturing
may, under certain circumstances be
engaged in for a ‘‘common business
purpose.’’ (See § 779.209.) An example
was also cited where retailing and construction were performed for a common
business purpose. (See § 779.206.) On the
other hand, it is clear that even a single individual or corporation may perform activities for different business
purposes. (See § 779.211.) Thus the reports of the House of Representatives
cite, as an example of this, the case of
a single company which owns several
retail apparel stores and is also engaged in the lumbering business. It
concludes that these activities are not
part of a single enterprise. (H. Rept. 75,
87th Cong.,1st Sess., p. 7 and H. Rept.
1366, 89th Cong. 2d Sess., p. 9.)
§ 779.213 What is a common business
purpose.
Generally, the term ‘‘common business purpose’’ will encompass activities
whether performed by one person or by
more than one person, or corporation,
or other business organization, which
are directed to the same business objective or to similar objectives in
which the group has an interest. The
scope of the term ‘‘enterprise’’ encompasses a single business entity as well
as a unified business system which performs related activities for a common
business purpose. What is a ‘‘common
business purpose’’ in any particular
case involves a practical judgment
based on the facts in the light of the
statutory provisions and the legislative
intent. The answer ordinarily will be
readily apparent from the facts. The
facts may show that the activities are
related to a single business objective or
that they are so operated or controlled
as to form a part of a unified business
system which is directed to a single
business objective. In such cases, it
will follow that they are performed for
a common business purpose. Where,
however, the facts show that the activities are not performed as a part of
such enterprise but for an entirely separate and unrelated business, they will
be considered performed for a different
business purpose and will not be a part
of that enterprise. The application of
these principles is considered in more
detail in part 776 of this chapter.
§ 779.214
‘‘Business’’ purpose.
The activities described in section
3(r) are included in an enterprise only
when they are performed for a ‘‘business’’ purpose. Activities of eleemosynary, religious, or educational organization may be performed for a business
purpose. Thus, where such organizations engage in ordinary commercial
activities, such as operating a printing
and publishing plant, the business activities will be treated under the Act
the same as when they are performed
by the ordinary business enterprise.
(See Mitchell v. Pilgrims Holiness Church
Corp., 210 F. 2d 879 (CA-7); cert. den. 347
U.S. 1013.) However, the nonprofit educational, religious, and eleemosynary
activities will not be included in the
enterprise unless they are of the types
which the last sentence of section 3(r),
as amended in 1966, declares shall be
deemed to be performed for a business
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§ 779.215
29 CFR Ch. V (7–1–19 Edition)
purpose. Such activities were not regarded as performed for a business purpose under the prior Act and are not so
considered under the Act as it was
amended in 1966 except for those activities listed in the last sentence of
amended section 3(r). (See § 779.21.)
UNIFIED OPERATION OR COMMON
CONTROL
§ 779.215
General scope of terms.
(a) Under the definition related activities performed for a common business purpose will be a part of the enterprise when they are performed either
through ‘‘unified operation’’ or ‘‘common control.’’ It should be noted that
these conditions are stated in the alternative. Thus if it is established that
the described activities are performed
through ‘‘common control,’’ it is unnecessary to show that they are also
performed through ‘‘unified operation,’’ although frequently both conditions may exist.
(b) Under the definition the terms
‘‘unified operation’’ and ‘‘common control’’ refer to the performance of the
‘‘related activities.’’ They do not refer
to the ownership of the activities. Although ownership may be a significant
factor in determining control (see
§ 779.222), the related activities will be a
part of the enterprise even if they are
not under common ownership, so long
as they are performed for a common
business purpose through unified operation or common control. Further,
under the definition the terms ‘‘unified
operation’’ and ‘‘common control’’
refer to the performance only of the
particular related activities and not to
other activities which may be performed by the various persons, corporations, or other business organizations,
comprising the enterprise. Thus where
two or more individual or business organizations perform certain of their activities through unified operation or
common control, these activities will
be part of a single enterprise, assuming
of course they are related activities
performed for a common business purpose. Finally, the definition in section
3(r) makes clear that the described activities may be performed through unified operation or common control ‘‘in
one or more establishments or by one
or more corporate or other organizational units.’’ The Senate Report on
the 1966 amendments makes the following comment with respect to this:
Also, the operations through substantial
ownership or control of a number of firms
engaged in similar types of business activities constitute, in the committee’s view, related activities performed through unified
operation or common control within the
meaning of the definition of enterprise. The
fact the firms are independently incorporated or physically separate or under the
immediate direction of local management, as
in Wirtz v. Hardin, 16 Wage Hour Cases 722
(N.D. Ala.), is not determinative of this question. (Sen. Rept. No. 1487, 89th Congress, 2nd
session, page 7.)
But where, as in the case of a retail
store owned by a partnership and another store owned by one of the partners providing similar goods or services, it appears that the activities of
the separate stores have no functional
interdependence and that they are separately conducted to serve the business
purpose of the partnership on the one
hand and the business purpose of the
individual on the other hand, the requirement of performance ‘‘through
common control’’ of ‘‘related activities’’ for a ‘‘common business purpose’’
may not be sufficiently met.
§ 779.216 Statutory construction of the
terms.
The terms ‘‘unified operation’’ and
‘‘common control’’ do not have a fixed
legal or technical meaning. As used in
the definition, these and other terms
must be given an interpretation consistent with the Congressional intention to be ascertained from the context
in which they are used, the legislation
of which they form a part, and the legislative history. In extending coverage
of the Act on an ‘‘enterprise’’ basis, the
Congress intended, by the 1961 and 1966
amendments to cover, among others,
business organizations and chain store
systems which may perform their related activities through complex business arrangements or business structures, whether they perform their activities for a common business purpose
through unified operation or through
the retention or exercise of control.
For these reasons, the definition of the
term ‘‘enterprise’’ is stated in broad
general terms. This legislative intent
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Wage and Hour Division, Labor
§ 779.220
is evidenced both by the statements in
the Committee Reports and by the definition itself, particularly the broad references to the inclusion in the ‘‘enterprise’’ of ‘‘all such activities’’ whether
performed ‘‘in one or more establishments’’ or ‘‘by one or more corporate
or other organizational units.’’ When
the Act was amended in 1966 the Congress further broadened coverage by redefining an enterprise engaged in commerce or in the production of goods for
commerce in section 3(s). (See § 779.22.)
Where the Congress intended to exclude certain arrangements or activities from the ‘‘enterprise’’ it did so by
specific provision under the prior and
amended Act.
§ 779.217 ‘‘Unified operation’’ defined.
Webster defines the word ‘‘unify’’ to
mean ‘‘to cause to be one; to make into
a unit; to unite.’’ The pertinent definition of ‘‘operation’’ is a method or way
of operating, working or functioning.
Since the term ‘‘unified operation’’ has
reference to the method of performing
the related activities, it means combining, uniting, or organizing their performance so that they are in effect a
single business unit or an organized
business system which is an economic
unit directed to the accomplishment of
a common business purpose. The term
‘‘unified operation’’ thus includes a
business which may consist of separate
segments but which is conducted or operated as a unit or as a single business
for a common business purpose.
§ 779.218 Methods to accomplish ‘‘unified operation.’’
There are many instances where several establishments, persons, corporations, or other business organizations,
join together to perform some or all of
their activities as a unified business or
business system. They may accomplish
such unification through agreements,
franchises, grants, leases, or other arrangements which have the effect of
aligning or integrating the activities of
one company with the activities of others so that they constitute a single
business or unified business system.
Whether in any particular case the activities are performed through ‘‘unified
operation’’ and have the effect of creating a single enterprise, will depend
upon all the facts, including the manner in which the activities are performed, the agreements and arrangements which govern their performance,
and the other relationships between
the parties, considered in the light of
the statutory provision and the legislative intent. (cf Wirtz v. Wornom’s Pharmacy (E.D. Va.), 18 WH Cases 289, 365; 57
Labor Cases 32,006, 32,030.)
§ 779.219 Unified operation may be
achieved without common control
or common ownership.
The performance of related activities
through ‘‘unified operation’’ to serve a
common business purpose may be
achieved without common control and
without common ownership. In particular cases ownership or control of
the related activities may be factors to
be considered, along with all facts and
circumstances, in determining whether
the activities are performed through
‘‘unified operation.’’ It is clear from
the definition that if the described activities are performed through unified
operation they will be part of the enterprise whether they are performed by
one company or by more than one corporate or other organizational unit.
The term ‘‘unified operation’’ has reference particularly to enterprises composed of a number of separate companies as is clear in the quotation from
the Senate Report in § 779.215. Where
the related activities are performed by
a single company, or under other single
ownership, they will ordinarily be performed through ‘‘common control,’’
and the question of whether they are
also performed through unified operation will not need to be decided. (Wirtz
v. Barnes Grocer Co., 398 F. 2d 718 (C.A.
8).)
§ 779.220 Unified operation may exist
as to separately owned or controlled activities which are related.
Whether there is unified operation of
related activities will thus be of concern primarily in those cases where the
related activities are separately owned
or controlled but where, through arrangement, agreement or otherwise,
they are so performed as to constitute
a unified business system organized for
a common business purpose. For example, a group of separately incorporated,
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§ 779.221
29 CFR Ch. V (7–1–19 Edition)
separately owned companies, may
agree to conduct their activities in
such manner as to be for all intents
and purposes a single business system
except for the fact that the ownership
and control of the individual segments
of the business are retained, in part or
in whole, by the individual companies
comprising the unified business system. The various units may operate
under a single trade name; construct
their establishment to appear identical; use identical equipment; sell generally the same goods or provide the
same type of services, and, in some
cases, at uniform standardized prices;
and in other respects appear to the persons utilizing their services or purchasing their goods as being the same
business. They also may arrange for
group purchasing and warehousing; for
advertising as a single business; and for
standardization of their records, as
well as their credit, employment, and
other business policies and practices.
In such circumstances the activities
may well be performed through ‘‘unified operation’’ sufficient to consider
all of the related activities performed
by the group of units as constituting
one enterprise, despite the separate
ownership of the various segments and
despite the fact that the individual
units or segments may retain control
as to some or all of their own activities. That this is in accord with the
congressional intent is plain, since
where the Congress intended that such
arrangements shall not bring a group
of certain individual retail or service
establishments into a single enterprise,
provision to accomplish such exception
was specifically included. (See § 779.226,
discussing the proviso in section 3(r)
with respect to certain franchise and
other specified arrangements entered
into between independently owned retail or service establishments and
other businesses.)
§ 779.221 ‘‘Common control’’ defined.
Under the definition the ‘‘enterprise’’
includes all related activities performed through ‘‘common control’’ for
a common business purpose. The word
‘‘control’’ may be defined as the act of
fact of controlling; power or authority
to control; directing or restraining
domination. ‘‘Control’’ thus includes
the power or authority to control. In
relation to the performance of the described activities, the ‘‘control,’’ referred to in the definition in section
3(r) includes the power to direct, restrict, regulate, govern, or administer
the performance of the activities.
‘‘Common’’ control includes the sharing of control and it is not limited to
sole control or complete control by one
person or corporation. ‘‘Common’’ control therefore exists where the performance of the described activities are
controlled by one person or by a number of persons, corporations, or other
organizational units acting together.
This is clearly supported by the definition which specifically includes in the
‘‘enterprise’’ all such activities whether performed by ‘‘one or more corporate or other organizational units.’’
The meaning of ‘‘common control’’ is
discussed comprehensively in part 776
of this chapter.
§ 779.222 Ownership as factor.
As pointed out in § 779.215 ‘‘unified
operation’’ and ‘‘common control’’ do
not refer to the ownership of the described activities but only to their performance. It is clear, however, that
ownership may be an important factor
in determining whether the activities
are performed through ‘‘unified operation or common control.’’ Thus common control may exist where there is
common ownership. Where the right to
control, one of the prerogatives of ownership, exists, there may be sufficient
‘‘control’’ to meet the requirements of
the statute. Ownership, or sufficient
ownership to exercise control, will be
regarded as sufficient to meet the requirement
of
‘‘common
control.’’
Where there is such ownership, it is immaterial that some segments of the related activities may operate on a semiautonomous basis, superficially free of
actual control, so long as the power to
exercise control exists through such
ownership. (See Wirtz v. Barnes Grocer
Co., 398 F. 2d 718 (C.A. 8).) For example,
a parent corporation may operate a
chain of retail or service establishments which, for business reasons, may
be divided into several geographic
units. These units may have certain
autonomy as to purchasing, marketing,
labor relations, and other matters.
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§ 779.225
They may be separately incorporated,
and each unit may maintain its own
records, including records of its profits
or losses. All the units together, in
such a case, will constitute a single enterprise with the parent corporation.
They would constitute a single business organization under the ‘‘common
control’’ of the parent corporation so
long as they are related activities performed for a common business purpose.
The common ownership in such cases
provides the power to exercise the
‘‘control’’ referred to in the definition.
It is clear from the Act and the legislative history that the Congress did not
intend that such a chain organization
should escape the effects of the law
with respect to any segment of its business merely by separately incorporating or otherwise dividing the related activities performed for a common business purpose.
§ 779.223 Control where ownership
vested in individual or single organization.
Ownership, sufficient to exercise
‘‘control,’’ of course, exists where total
ownership is vested in a single person,
family unit, partnership, corporation,
or other single business organization.
Ownership sufficient to exercise ‘‘control’’ exist also where there is more
than 50 percent ownership of voting
stock. (See West v. Wal-Mart, 264 F.
Supp. 168 (W.D. Ark.).) But ‘‘control’’
may exist with much more limited
ownership, and, in certain cases exists
in the absence of any ownership. The
mere ownership of stock in a corporation does not by itself establish the existence of the ‘‘control’’ referred to in
the definition. The question whether
the ownership in a particular case includes the right to exercise the requisite ‘‘control’’ will necessarily depend upon all the facts in the light of
the statutory provisions.
§ 779.224 Common
cases.
control
in
other
(a) As stated in § 779.215 ‘‘common
control’’ may exist with or without
ownership. The actual control of the
performance of the related activities is
sufficient to establish the ‘‘control’’ referred to in the definition. In some
cases an owner may actually relinquish
his control to another, or by agreement
or other arrangement, he may so restrict his right to exercise control as to
abandon the control or to share the
control of his business activities with
other persons or corporations. In such
a case, the activities may be performed
under ‘‘common control.’’ In other
cases, the power to control may be reserved through agreement or arrangement between the parties so as to vest
the control of the activities of one
business in the hands of another.
(b) Activities are considered to be
performed under ‘‘common control’’
even if, because of the particular methods of operation, the power to control
is only seldom used, as where the business has been in operation for a long
time without change in methods of operation and practically no actual direction is necessary; also common control
may exist where the control, although
rarely visibly exercised, is evidenced
by the fact that mere suggestions are
adopted readily by the business being
controlled.
(c) In the retail industry, particularly, there are many instances where,
for business reasons, related activities
performed by separate companies are
so unified or controlled as to constitute a single enterprise. A common
example, specifically named in the definition, is the leased department. This
and other examples are discussed in
§§ 779.225 through 779.235.
LEASED DEPARTMENTS, FRANCHISE AND
OTHER BUSINESS ARRANGEMENTS
§ 779.225
Leased departments.
(a) As stated in section 3(r) of the enterprise includes ‘‘departments of an
establishment operated through leasing arrangements.’’ This statutory provision is based on the fact that ordinarily the activities of such leased departments are related to the activities
of the establishment in which they are
located, and they are performed for a
common
business
purpose
either
through ‘‘unified operation’’ or ‘‘common control.’’ A general discussion will
be found in part 776 of this chapter.
(b) In the ordinary case, a retail or
service establishment may control
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§ 779.226
29 CFR Ch. V (7–1–19 Edition)
many of the operations of a leased department therein and unify its operation with its own. Thus, they may operate under a common trade name: The
host establishment may determine, or
have the power to determine, the
leased department’s space location, the
type of merchandise it will sell, its
pricing policy, its hours of operation
and some or all of its hiring, firing and
other personnel policies; advertising,
adjustment and credit operations, may
be unified, and insurance, taxes, and
other matters may be included as a
part of the total operations of the establishment. Some or all of these and
other functions, which are the normal
prerogatives of an independent businessman, may be controlled or unified
with the store’s other activities in such
a way as to constitute a single enterprise under the Act.
(c) Since the definition specifically
includes in the ‘‘enterprise,’’ for the
purpose of this Act, ‘‘departments of an
establishment operated through leasing arrangements,’’ any such department will be considered a part of the
host establishment’s enterprise in the
absence of special facts and circumstances warranting a different conclusion.
(d) Whether, in a particular case, the
relationship is such as to constitute
the lessee’s operation to be a separate
establishment of a different enterprise
rather than a ‘‘leased department’’ of
the host establishment as described in
the definition, will depend upon all the
facts including the agreements and arrangements between the parties as well
as the manner in which the operations
are conducted. If, for example, the
facts show that the lessee occupies a
physically separate space with (or even
without) a separate entrance, and operates under a separate name, with his
own separate employees and records,
and in other respects conducts his business independently of the lessor’s, the
lessee may be operating a separate establishment or place of business of his
own and the relationship of the parties
may be only that of landlord and tenant. In such a case, the lessee’s operation will not be regarded as a ‘‘leased
department’’ and will not be included
in the same enterprise with the lessor.
(e) The employees of a leased department would not be covered on an enterprise basis if such leased department is
located in an establishment which is
not itself a covered enterprise or part
of a covered enterprise. Likewise, the
applicability of exemptions for certain
retail or service establishments from
the Act’s minimum wage or overtime
pay provisions, or both, to employees
of a leased department would depend
upon the character of the establishment in which the leased department is
located. Other sections of this subpart
discuss the coverage of leased retail
and service departments in more detail
while subpart D of this part explains
how exemptions for certain retail and
service establishments apply to leased
department employees.
§ 779.226 Exception for an independently owned retail or service establishment under certain franchise
and other arrangements.
While certain franchise and other arrangements may operate to bring the
one to whom the franchise is granted
into another enterprise (see § 779.232),
section 3(r) contains a specific exception for certain arrangements entered
into by a retail or service establishment which is under independent ownership. The specific exception in section 3(r) reads as follows:
Provided, That, within the meaning of this
subsection, a retail or service establishment
which is under independent ownership shall
not be deemed to be so operated or controlled as to be other than a separate and
distinct enterprise by reason of any arrangement, which includes, but is not necessarily
limited to, an agreement, (1) that it will sell,
or sell only, certain goods specified by a particular manufacturer, distributor, or advertiser, (2) that it will join with other such establishments in the same industry for the
purpose of collective purchasing, or (3) that
it will have the exclusive right to sell the
goods or use the brand name of a manufacturer, distributor, or advertiser within a
specified area, or by reason of the fact that
it occupies premises leased to it by a person
who also leases premises to other retail or
service establishments.
§ 779.227 Conditions which must be
met for exception.
This exception, in accordance with
its specific terms, will apply to exclude
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Wage and Hour Division, Labor
§ 779.229
an establishment from enterprise coverage only if the following conditions
are met:
(a) The establishment must be a ‘‘retail or service establishment’’ as this
term is defined in section 13(a)(2) of the
Act (see discussion of this term in
§§ 779.312 and 779.313); and
(b) The retail or service establishment must not be an ‘‘enterprise’’
which is large enough to come within
the scope of section 3(s) of the Act; and
(c) The retail or service establishment must be under independent ownership.
§ 779.228 Types of arrangements contemplated by exception.
If the retail or service establishment
meets the requirements in paragraphs
(a) through (c) of § 779.227, it may enter
into the following arrangements without becoming a part of the larger enterprise, that is, without losing its status as a ‘‘separate and distinct enterprise’’ to which section 3(s) would not
otherwise apply:
(a) Any arrangement, whether by
agreement, franchise or otherwise, that
it will sell, or sell only certain goods
specified by a particular manufacturer,
distributor, or advertiser.
(b) Any such arrangement that it will
have the exclusive right to sell the
goods or use the brand name of a manufacturer, distributor, or advertiser
within a specified area.
(c) Any such arrangement by which
it will join with other similar retail or
service establishments in the same industry for the purpose of collective
purchasing. Where an agreement for
‘‘collective purchasing’’ is involved,
further requirements are imposed,
namely, that all of the other establishments joining in the agreement must
be retail or service establishments
under independent ownership, and that
all of the establishments joining in the
collective
purchasing
arrangement
must be ‘‘in the same industry.’’ This
has reference to such arrangements by
a group of grocery stores, or by some
other trade group in the retail industry.
(d) Any arrangement whereby the establishment’s premises are leased from
a person who also leases premises to
other retail or service establishments.
In connection with this rental arrangement, the Senate Report cites as an example the retail establishment which
rents its premises from a shopping center operator (S. Rept. 145, 87th Cong.,
1st Sess., p. 41). It is clear that this exception was not intended to apply to
the usual leased department in an establishment, which is specifically included within the larger enterprise
under the definition of section 3(r).
(See discussion under § 779.225.)
§ 779.229 Other arrangements.
With respect to those arrangements
specifically described in the proviso
contained in the definition, an independently owned retail or service establishment will not be considered to
be other than a separate and distinct
enterprise, if other arrangements the
establishment makes do not have the
effect of bringing the establishment
within a larger enterprise. Whether or
not other arrangements have such an
effect will necessarily depend upon all
the facts. The Senate Report makes
the following observations with respect
to this:
Thus the mere fact that a group of independently owned and operated stores join together to combine their purchasing activities or to run combined advertising will not
for these reasons mean that their activities
are performed through unified operation or
common control and they will not for these
reasons be considered a part of the same
‘‘enterprise.’’ This is also the case in food retailing because of the great extent to which
local independent food store operators have
joined together in many phases of their business. While maintaining their stores as independently owned units, they have affiliated
together not just for the purchasing of merchandise, but also for providing numerous
other
services
such
as
(1)
central
warehousing; (2) advertising; (3) sales promotions; (4) managerial advice; (5) store engineering; (6) accounting systems; (7) site locations; and (8) hospitalization and life insurance protection. (S. Rept. 145, 87th Cong.,
1st Sess., p. 42.)
The report continues with the following observations:
Whether such arrangements bring the establishment within the franchisor’s, lessor’s,
or grantor’s ‘‘enterprise’’ is a question to be
determined on all the facts. The facts may
show that the arrangements reserve the necessary right of control in the grantor or
unify the operations among the separate
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§ 779.230
29 CFR Ch. V (7–1–19 Edition)
‘‘franchised’’ establishments so as to create
an economic unity of related activities for a
common business purpose. In that case, the
‘‘franchised’’ establishment will be considered a part of the same ‘‘enterprise.’’ For example, whether a franchise, lease, or other
contractual arrangement between a distributor and a retail dealer has the effect of
bringing the dealer’s establishments within
the enterprise of the distributor will depend
upon the terms of the agreements and the related facts concerning the relationship between the parties.
There may be a number of different types
of arrangements established in such cases.
The key in each case may be found in the answer to the question, ‘‘Who receives the profits, suffers the losses, sets the wages and
working conditions of employees, or otherwise manages the business in those respects
which are the common attributes of an independent businessman operating a business
for profit?’’
For instance, a bona fide independent automobile dealer will not be considered a part of
the enterprise of the automobile manufacturer or of the distributor. Likewise, the
same result will also obtain with respect to
the independent components of a shopping
center.
In all of these cases if it is found on the
basis of all the facts and circumstances that
the arrangements are so restrictive as to
products, prices, profits, or management as
to deny the ‘‘franchised’’ establishment the
essential prerogatives of the ordinary independent businessman, the establishment, the
dealer, or concessionaire will be considered
an integral part of the related activities of
the enterprise which grants the franchise,
right, or concession. (S. Rept. 145, 87th Cong.,
1st Sess., p. 42.)
Thus, there may be a number of different types of arrangements established in such cases, and the determination as to whether the arrangements create a larger ‘‘enterprise’’ will
necessarily depend on all the facts.
Some arrangements which do not create a larger enterprise and some which
do are discussed in §§ 779.230 through
779.235.
§ 779.230 Franchise and other arrangements.
(a) There are many different and
complex arrangements by which businesses may join to perform their activities for a common purpose. A general discussion will be found in part 776
of this chapter. The quotation in
§ 779.229 from the Senate Report shows
that Congress recognized that some
franchise, lease, or other arrangements
have the effect of creating a larger enterprise and whether they do or not depends on the facts. The facts may show
that the arrangements are so restrictive as to deprive the individual establishment of those prerogatives which
are the essential attributes of an independent business. (Compare Wirtz v.
Lunsford, 404 F. 2d, 693 (C.A. 6).) An establishment through such arrangements may transfer sufficient ‘‘control’’ so that it becomes in effect a unit
in a unified chain operation. In such
cases the result of the arrangement
will be to create a larger enterprise
composed of the various segments, including the establishment which relinquishes its control.
(b) The term ‘‘franchise’’ is not susceptible of precise definition. The extent to which a businessman relinquishes the control of his business or
the extent to which a franchise results
in the performance of the activities
through unified operation or common
control depends upon the terms of the
contract and the other relationships
between the parties. Ultimately the determination of the precise scope of
such arrangements which result in creating larger enterprises rests with the
courts.
§ 779.231 Franchise
arrangements
which do not create a larger enterprise.
(a) While it is clear that in every
franchise a businessman surrenders
some rights, it equally is clear that
every franchise does not create a larger
enterprise. In the ordinary case a franchise may involve no more than an
agreement to sell the particular product of the one granting the franchise.
It may also prohibit the sale of a competing product. Such arrangements,
standing alone, do not deprive the individual businessman of his ‘‘control’’ so
as to bring him into a larger enterprise
with the one granting the franchise.
(b) The portion of the Senate Report
quoted in the § 779.229 cites a ‘‘bona fide
independent automobile dealer’’ as an
example of such a franchise arrangement. (It is recognized that salesmen,
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§ 779.232
mechanics, and partsmen primarily engaged in selling or servicing automobiles, trucks, trailers, farm implements, or aircraft, employed by nonmanufacturing
establishments
primarily engaged in the business of selling such vehicles to ultimate purchasers are specifically exempt from
the overtime pay provisions under section 13(b)(10) of the Act. Section 779.372
discusses the exemption provided by
section 13(b)(10) and its application
whether or not the establishment
meets the Act’s definition of a retail or
service establishment. The automobile
dealer is used here only as an example
of the type of franchise arrangement
which, within the intent of the Congress, does not result in creating a
larger enterprise.) The methods of operation of the independent automobile
dealer are widely known. While he operates under a franchise to sell a particular make of automobile and also
may be required to stock certain parts
and to maintain specified service facilities, it is clear that he retains the control of the management of his business
in those respects which characterize an
independent businessman. He determines the prices for which he sells his
merchandise. Even if prices are suggested by the manufacturer, it is well
known that the dealer exercises wide
discretion in this respect, free of control by the manufacturer or distributor. Also the automobile dealer
retains control with respect to the
management of his business, the determination of his employment practices,
the operation of his various departments, and his business policies. The
type of business in which he is engaged
leaves him wide latitude for the exercise of his judgment and for decisions
with respect to important aspects of
his business upon which its success or
failure depends. On the basis of these
considerations, it is evident why the
independent automobile dealer was
cited as an example of the type of franchise which does not create a larger enterprise encompassing the dealer, the
manufacturer or the distributor. Similar facts will lead to the same conclusion in other such arrangements.
§ 779.232 Franchise or other arrangements which create a larger enterprise.
(a) In other instances, franchise arrangements do result in bringing a
dealer’s business into a larger enterprise with the one granting the franchise. Where the franchise arrangement results in vesting control over
the operations of the dealer’s business
in the one granting the franchise, the
result is to place the dealer in a larger
enterprise with the one granting the
franchise. Where there are multiple
units to which such franchises have
been granted, the several dealers are
considered to be subject to the common
control of the one granting the franchise and all would be included in the
same larger enterprise.
(b) It is not possible to lay down specific rules to determine whether a franchise or other agreement is such that a
single enterprise results because all the
facts and circumstances must be examined in the light of the definition of the
term ‘‘enterprise’’ as discussed above
in this subpart. However, the following
example illustrates a franchising company and independently owned retail
establishments which would constitute
a single enterprise:
(1) The franchisor had developed a
system of retail food store operations,
built up a large volume of buying
power, formulated rules and regulations for the successful operation of
stores together constituting a system
which for many years proved in practice to be of commercial value to the
separate stores; and
(2) The franchisor desired to extend
its business through the operation of
associated franchise stores, by responsible persons in various localities to
act as limited agents, and to be parts
of the system, to the end that the advantages of and the profits from the
business could be enjoyed by those so
associated as well as by the franchisor;
and
(3) The stores were operated under
the franchise as part of the general system and connected with the home office of the franchisor from which general administrative jurisdiction was
exercised over all franchised stores,
wherever located; and
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§ 779.233
29 CFR Ch. V (7–1–19 Edition)
(4) The stores operated under the
franchise agreement were always subject to the general administrative jurisdiction of the franchisor and agreed
to comply with it; and
(5) The stores operated under the
franchise agreed to install appliances,
fixtures, signs, etc. according to plans
and specifications provided by the
franchisor and to purchase their merchandise through the franchisor except
to the extent that the latter may authorize local purchase of certain items;
and
(6) The stores operated under the
franchise agreed to participate in special promotions, sales and advertising
as directed by the franchisor, to attend
meetings of franchise store operators
and to pay a fee to the franchisor at
the rate of one-half of 1 percent of total
gross sales each month for the privileges to them and the advantages and
profits derived from operating a local
unit of the franchisor’s system; and
(7) The franchisor under the franchise
agreement had the right to place on a
prohibited list any merchandise which
it considered undesirable for sale in a
franchise store, and the stores operated
pursuant to the franchise agreed to immediately discontinue sale of any such
blacklisted merchandise.
(c) It is clear from the facts and circumstances surrounding this franchise
arrangement described in paragraph (b)
of this section that the operators of the
franchised establishments are denied
the essential prerogatives of the ordinary independent businessman because
of restrictions as to products, prices,
profits and management. The last paragraph of the Senate Report quoted in
§ 779.229 makes clear that in such cases
the franchised establishment, dealer,
or concessionaire will be considered an
integral part of the related activities
of the enterprise which grants the franchise, right, or concession.
§ 779.233 Independent contractors performing work ‘‘for’’ an enterprise.
(a) The definition in section 3(r) specifically provides that the ‘‘enterprise’’
shall not include ‘‘the related activities performed for such enterprise by
an independent contractor.’’ This exclusion will apply where the related activities are performed ‘‘for’’ the enter-
prise and if such activities are performed by ‘‘an independent contractor.’’ This provision is discussed
generally in part 776 of this chapter.
(b) The Senate Report in referring to
this exception states as follows:
It does not include the related activities
performed for such an enterprise by an independent contractor, such as an independent
accounting firm or sign service or advertising company, * * * (S. Rept. No. 145, 87th
Cong., 1st Sess., p. 40).
The term ‘‘independent contractor’’ as
used in section 3(r) has reference to an
independent business which performs
services for other businesses as an established part of its own business activities. The term ‘‘independent contractor’’ as used in 3(r) thus has reference to an independent business
which is a separate ‘‘enterprise,’’ and
which deals in the ordinary course of
its own business operations, at arms
length, with the enterprises for which
it performs services.
(c) There are many instances in industry where one business performs activities for separate businesses without
becoming a part of a larger enterprise.
In addition to the examples cited in the
Report they may include such services
as repairs, window cleaning, transportation, warehousing, collection services, and many others. The essential
test in each case will be whether such
services are performed ‘‘for’’ the enterprise by an independent, separate enterprise, or whether the related activities are performed for a common purpose through unified operation or common control. In the latter case the activities will be considered performed
‘‘by’’ the enterprise, rather than ‘‘for’’
the enterprise, and will be a part of the
enterprise. The distinction in the ordinary case will be readily apparent from
the facts. In those cases where questions arise a determination must be
made on the basis of all the facts in the
light of the statute and the legislative
history.
§ 779.234 Establishments whose only
regular employees are the owner or
members of his immediate family.
Section 3(s) provides that any ‘‘establishment which has as its only regular employees the owner thereof or
the parent, spouse, child, or other
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Wage and Hour Division, Labor
§ 779.238
member of the immediate family of
such owner’’ shall not be considered to
be an ‘‘enterprise’’ as described in section 3(r) or a part of any other enterprise. Further the sales of such establishment are not included for the purpose of determining the annual gross
volume of sales of any enterprise for
the purpose of section 3(s). The term
‘‘other member of the immediate family of such owner’’ is considered to include relationships such as brother, sister, grandchildren, grandparents, and
in-laws but not distant relatives from
separate households. The 1966 amendments extended the exception to include family operated establishments
which only employ persons other than
members of the immediate family infrequently, irregularly, and sporadically. (See general discussion in part
776 of this chapter.)
§ 779.235 Other ‘‘enterprises.’’
No attempt has been made in the discussion of the term ‘‘enterprise,’’ to
consider every possible situation which
may, within the meaning of section
3(r), constitute an ‘‘enterprise’’ under
the Act. The discussion is designed to
explain and illustrate the application
of the term in some cases; in others,
the discussion may serve as a guide in
applying the criteria of the definition
to the particular fact situation. A more
complete discussion is contained in
part 776 of this chapter.
COVERED ENTERPRISES
§ 779.236 In general.
Sections 779.201 through 779.235 discuss the various criteria for determining what business unit or units
constitute an ‘‘enterprise’’ within the
meaning of the Act. Sections 779.237
through 779.245 discuss the criteria for
determining what constitutes a ‘‘covered enterprise’’ under the Act with respect to the conditions for coverage of
those enterprises in which retail sale of
goods or services are made. As explained in §§ 779.2 through 779.4, previously covered employment in retail
and service enterprises will be subject
to different monetary standards than
newly covered employment in such enterprises until February 1, 1971. For
this reason the enterprise coverage
provisions of both the prior and the
amended Act are discussed in the following sections of this subpart.
§ 779.237 Enterprise engaged in commerce or in the production of goods
for commerce.
Under section 3(s) the ‘‘enterprise’’ to
be covered must be an ‘‘enterprise engaged in commerce or in the production of goods for commerce.’’ This is
defined in section 3(s) as follows:
Enterprise engaged in commerce or in the
production of goods for commerce means an
enterprise which has employees engaged in
commerce or in the production of goods for
commerce, including employees handling,
selling or otherwise working on goods that
have been moved in or produced for commerce by any person * * *.
In order for an enterprise to come
within the coverage of the Act, it
must, therefore, be established that the
enterprise has some employees who
are:
(a) Engaged in commerce or in the
production of goods for commerce, including
(b) Employees handling, selling or
otherwise working on goods that have
been moved in or produced for commerce by any person.
The legislative history of the 1966
amendments does not indicate a difference between the meaning of the
above wording and the wording used in
the prior Act. (See § 779.22.) For a complete discussion of the employees who
come within the quoted language see
subpart B of the Interpretative Bulletin on general coverage, part 776 of
this chapter.
§ 779.238 Engagement in described activities determined on annual basis.
As set forth in the preceding section
an enterprise to be a ‘‘covered enterprise’’ must have at least some employees engaged in certain described activities. This requirement will be determined on an annual basis in order to
give full effect to the intent of Congress. Thus, it is not necessary that the
enterprise have two or more employees
engaged in the named activities every
week. An enterprise described in section 3(s)(1) or (5) of the prior Act or in
section 3(s)(1) of the Act as it was
amended in 1966 will be considered to
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§ 779.239
29 CFR Ch. V (7–1–19 Edition)
have employees engaged in commerce
or in the production of goods for commerce, including the handling, selling
or otherwise working on goods that
have been moved in or produced for
commerce by any person, if during the
annual period which it uses in calculating its annual sales for purposes of
the other conditions of these sections,
it regularly and recurrently has at
least two or more employees engaged
in such activities. On the other hand, it
is plain that an enterprise that has employees engaged in such activities only
in isolated or sporadic occasions, will
not meet this condition.
§ 779.239 Meaning of ‘‘engaged in commerce or in the production of goods
for commerce.’’
The term ‘‘engaged in commerce or
in the production of goods for commerce,’’ as used in section 3(s) of the
Act in reference to employees who are
so engaged is the same as the term
which has been used in the Act for
many years. The statutory definitions
of these terms are set forth in §§ 779.12
through 779.16. The interpretative bulletin on general coverage part 776 of
this chapter) contains the Division’s
interpretations as to which employees
are ‘‘engaged in commerce or in the
production of goods for commerce.’’
These interpretations are equally applicable under section 3(s) in determining which employees are ‘‘engaged
in commerce or in the production of
goods for commerce’’ within the meaning of this section. A brief discussion of
the guiding principles of retail or service establishments are ‘‘engaged in
commerce or in the production of goods
for commerce’’ is set forth in subpart B
of this part.
EMPLOYEES HANDLING, SELLING, OR
OTHERWISE WORKING ON GOODS THAT
HAVE BEEN MOVED IN OR PRODUCED
FOR COMMERCE BY ANY PERSON
§ 779.240 Employees ‘‘handling * * * or
otherwise working on goods.’’
(a) ‘‘Goods’’ upon which the described
activities are performed. Employees will
be considered to be handling, selling, or
otherwise working on goods within the
meaning of section 3(s) if they engage
in the described activities on ‘‘goods’’
which ‘‘have been moved in or produced
for commerce by any person.’’ They
may be handling or working on such
goods which the enterprise does not
sell. The term ‘‘goods’’ is defined in
section 3(i) of the Act. The definition is
explained in § 779.107 and discussed
comprehensively in part 776 of this
chapter. As defined in section 3(i) of
the Act, the term includes any part or
ingredient of ‘‘goods’’ and, in general,
includes ‘‘articles or subjects of commerce of any character.’’ Thus the
term ‘‘goods,’’ as used in section 3(s),
includes all goods which have been
moved in or produced for commerce,
such as stock-in-trade, or raw materials that have been moved in or produced for commerce.
(b) ‘‘Handling * * * or otherwise working on goods.’’ The term ‘‘handling * * *
or otherwise working on goods’’ used in
section 3(s) is substantially the same
as the term used since 1938 in section
3(j) of the Act. Both terms will therefore be considered to have essentially
the same meaning. (See part 776 of this
chapter, the interpretative bulletin on
the general coverage of the Act.) Thus,
the activities encompassed in the term
‘‘handling or in any other manner
working on goods’’ in section 3(s) are
the same as the activities, encompassed in the similar term in section
3(j), by which goods are ‘‘produced’’
within the meaning of the Act. In general, the term ‘‘handling * * * or otherwise working on goods’’ includes employees who sort, screen, grade, store,
pack, label, address, transport, deliver,
print, type, or otherwise handle or
work on the goods. The same will be
true of employees who handle or work
on ‘‘any part of ingredient of the
goods’’ referred to in the discussion of
the term ‘‘goods’’ in § 779.107. An employee will be considered engaged in
‘‘handling * * * or otherwise working
on goods,’’ within the meaning of section 3(s), only if he performs the described activities on goods that ‘‘have
been moved in or produced for commerce by any person.’’ This requirement is discussed in §§ 779.242 and
779.243.
§ 779.241
Selling.
The statutory definition of the term
‘‘sale’’ or ‘‘sell’’ is quoted in § 779.15. As
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Wage and Hour Division, Labor
§ 779.245
long as the employee in any way participates in the sale of the goods he
will be considered to be ‘‘selling’’ the
goods, whether he physically handles
them or not. Thus, if the employee performs any work that, in a practical
sense is an essential part of consummating the ‘‘sale’’ of the particular
goods, he will be considered to be
‘‘selling’’ the goods. ‘‘Selling’’ goods,
under section 3(s) has reference only to
goods which ‘‘have been moved in or
produced for commerce by any person,’’
as discussed in §§ 779.242 and 779.243.
§ 779.242 Goods that ‘‘have been moved
in’’ commerce.
For the purpose of section 3(s), goods
will be considered to ‘‘have been moved
* * * in commerce’’ when they have
moved across State lines before they
are handled, sold, or otherwise worked
on by the employees. It is immaterial
in such a case that the goods may have
‘‘come to rest’’ within the meaning of
the term ‘‘in commerce’’ as interpreted
in other respects, before they are handled, sold, or otherwise worked on by
the employees in the enterprise. Such
movement in commerce may take
place before they have reached the enterprise, or within the enterprise, such
as from a warehouse of the enterprise
in one State to a retail store of the
same enterprise located in another
State. Thus, employees will be considered to be ‘‘handling, selling, or otherwise working on goods that have been
moved in * * * commerce’’ where they
are engaged in the described activities
on ‘‘goods’’ that have moved across
State lines at any time in the course of
business, such as from the manufacturer to the distributor, or to the ‘‘enterprise,’’ or from one establishment to
another within the ‘‘enterprise.’’ See
the general discussion in part 776 of
this chapter.
duced for commerce’’ within the meaning of the Act. The term ‘‘produced’’ is
defined in section 3(j) of the Act and, as
explained above, has a well-established
meaning under the existing law. (See
§ 779.104 and part 776 of this chapter.)
The word as it is used in the context of
the phrase ‘‘goods * * * produced for
commerce by any person’’ in section
3(s) has the same meaning as in 3(j).
Therefore, where goods are considered
‘‘produced for commerce’’ within the
meaning of section 3(j) of the Act they
also will be considered ‘‘produced for
commerce’’ within the meaning of section 3(s). A discussion of when goods
are produced for commerce within the
meaning of section 3(j) is contained in
§ 779.108. Of course, within the meaning
of section 3(s), the goods will be considered ‘‘produced for commerce’’ when
they are so produced ‘‘by any person.’’
COVERED RETAIL ENTERPRISE
§ 779.243 Goods that have been ‘‘produced for commerce by any person.’’
§ 779.244 ‘‘Covered enterprises’’ of interest to retailers of goods or services.
Retailers of goods or services are primarily concerned with the enterprises
described in sections 3(s)(1) and 3(s)(5)
of the prior Act and section 3(s)(1) of
the Act as amended in 1966. Although
section 3(s)(1) of the prior Act (under
the 1961 amendments) had exclusive application to the retail and service industry, section 3(s)(1) of the Act as
amended in 1966 may apply to any enterprise. This part is concerned only
with retail or service establishments
and enterprises. Enterprises described
in clauses (2), (3), and (4) of section 3(s)
are discussed herein only with respect
to the application to them of provisions relating to retail or service establishments. Coverage of such enterprises
and the application of section 3(s)(1) of
the amended Act to enterprises generally are discussed in part 776 of this
chapter. The statutory definitions of
enterprises of interest to retailers
under the prior Act and the Act as
amended in 1966 are quoted in § 779.22.
An employee will be considered to be
handling, selling, or otherwise working
on goods that have been ‘‘produced for
commerce by any person’’ within the
meaning of section 3(s), if he is performing the described activities with
respect to goods which have been ‘‘pro-
§ 779.245 Conditions for coverage of
retail or service enterprises.
(a) Retail or service enterprises may
be covered under section 3(s)(1) of the
prior Act or section 3(s)(1) of the
amended Act although the latter is not
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§ 779.246
29 CFR Ch. V (7–1–19 Edition)
limited to retail or service enterprises.
A retail or service enterprise will be a
covered enterprise under section 3(s)(1)
of the amended Act if both the following conditions are met:
(1) The enterprise is ‘‘an enterprise
engaged in commerce or in the production of goods for commerce.’’ This requirement, which is discussed in
§§ 779.237 through 779.243, applies to all
covered enterprises under the provisions of both the prior and the amended Act; and,
(2) During the period February 1,
1967, through January 31, 1969, the enterprise has an annual gross volume of
sales made or business done, exclusive
of excise taxes at the retail level which
are separately stated, of at least
$500,000; or on and after February 1,
1969, the enterprise has an annual gross
volume of sales made or business done
of at least $250,000, exclusive of excise
taxes at the retail level which are separately stated.
(b) A retail or service enterprise will
be covered under section 3(s)(1) of the
Act prior to the amendments if all four
of the following conditions are met:
(1) The enterprise is ‘‘an enterprise
engaged in commerce or in the production of goods for commerce’’ as explained above in paragraph (a)(1) of
this section and,
(2) The enterprise has one or more
‘‘retail or service establishments’’ (the
statutory definition of the term ‘‘retail
or service establishment’’ is contained
in § 779.24 and discussed in subpart D of
this part) and,
(3) The enterprise has an annual
gross volume of sales of $1 million or
more, exclusive of excise taxes at the
retail level which are separately stated
and,
(4) The enterprise ‘‘purchases or receives goods for resale that move or
have moved across State lines (not in
deliveries from the reselling establishment) which amount in total annual
volume to $250,000 or more.’’ (This requirement is discussed in §§ 779.246
through 779.253.)
(c) Sections 779.258 through 779.260
discuss the meaning of ‘‘annual gross
volume of sales made or business done’’
and §§ 779.261 through 779.264 discuss
what excise taxes may be excluded
from the annual gross volume. Sections
779.265 through 779.269 discuss the
method of computing the annual gross
volume where it is necessary to determine monetary obligations to employees under the Act.
INTERSTATE INFLOW TEST UNDER PRIOR
ACT
§ 779.246 Inflow test under section
3(s)(1) of the Act prior to 1966
amendments.
To come within the scope of section
3(s)(1) of the prior Act, the enterprise,
in addition to the other conditions,
must purchase or receive goods for resale that move or have moved across
State lines (not in deliveries from the
reselling establishment) which amount
in total annual volume to $250,000 or
more. To meet this condition, it must
be shown that (a) the enterprise purchases or receives goods for resale
(§ 779.248), (b) that such goods move or
have
moved
across
State
lines
(§ 779.249), and (c) that such purchases
and receipts amount in total annual
volume to $250,000 or more (§ 779.253).
Enterprises which do not meet this test
may be covered under section 3(s)(1) of
the present Act, which contains no
interstate inflow requirement.
§ 779.247
‘‘Goods’’ defined.
The term ‘‘goods’’ as used in section
3(s) of the prior and amended Act is defined in section 3(i) of the Act. The
statutory definition is quoted in
§ 779.14, and is discussed in detail in
part 776 of this chapter.
§ 779.248 Purchase or receive ‘‘goods
for resale.’’
(a) Goods will be considered purchased or received ‘‘for resale’’ for purposes of the inflow test contained in
section 3(s)(1) of the prior Act if they
are purchased or received with the intention of being resold. This includes
goods, such as stock in trade which is
purchased or received by the enterprise
for resale in the ordinary course of
business. It does not include machinery, equipment, supplies, and other
goods which the enterprise purchases
to use in conducting its business. This
is true even if such capital goods or
other equipment, which the enterprise
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Wage and Hour Division, Labor
§ 779.251
originally purchased for use in conducting its business, are at some later
date actually resold. The distinction is
to be found in whether the goods are
purchased or received by the enterprise
with the intention of reselling them in
the same form or after further processing or manufacturing, or whether
they are purchased with the intent of
being consumed or used by the enterprise itself in the performance of its
activities.
(b) Goods, such as raw materials or
ingredients, are considered purchased
or received by the enterprise ‘‘for resale,’’ even if such goods are purchased
or received for the purpose of being
processed or used as parts or ingredients in the manufacture of other goods
which the enterprise intends to sell.
For example, where the enterprise purchases flour for use in baking bread or
pastries for sale, the goods will be considered to have been purchased ‘‘for resale.’’ It is immaterial whether the
goods will be resold by the enterprise
at retail or at wholesale.
§ 779.249 Goods which move or have
moved across State lines.
In order to be included in the annual
dollar volume for purposes of this test,
the goods which the enterprise purchases or receives for resale must be
goods that ‘‘move or have moved across
the State lines.’’ Goods which have not
moved across State lines before they
are resold by the enterprise will not be
included. The movement to which the
phrase ‘‘move or have moved’’ has reference is that movement which the
goods follow in their journey to the enterprise or within the enterprise to the
establishment which sells the goods.
Thus, if goods have moved across State
lines at some stage in the flow of trade
before they are actually sold by the enterprise, they will be considered to
have moved across State lines. It is not
material that the goods may have
‘‘come to rest’’ at some time before
they are purchased or received and sold
by the enterprise; nor is it material
that some time may have elapsed between the time the goods have moved
across State lines and the time they
are purchased or received and sold by
the enterprise. It is sufficient if at any
time such goods have moved across
State lines in the ordinary course of
trade before resale by the enterprise.
Much of the goods purchased by retailers are produced from a local intrastate supplier. In many instances these
goods may have been stored at the supplier’s establishment for some time.
However, as long as the particular
goods purchased have moved across
State lines at some stage in the flow of
trade to the retailer, they would have
to be included in determining whether
or not the enterprise has purchased or
received for resale such out-of-State
goods amounting to $250,000.
§ 779.250 Goods that have not lost
their out-of-State identity.
Goods which are purchased or received by the enterprise from within
the State will be considered goods
which ‘‘have moved across State lines’’
if they have previously been moved
across State lines and have not lost
their identity as out-of-State goods before they are purchased or received by
the enterprise. Also goods which have
been assembled within the State after
they were moved across State lines but
before they are purchased or received
by the enterprise will still be regarded
as goods which ‘‘have moved across
State lines.’’ Such goods are still identifiable as goods brought into the
State. This is also true in certain cases
where goods are processed to some extent without losing their identity as
out-of-State goods. For example, outof-State furniture or television sets
which are put together within the
State, or milk from outside the State
which is pasteurized and bottled within
the State, before being purchased or received by the enterprise, are goods
which ‘‘have moved across State
lines.’’ They have already moved across
State lines and they retain their outof-State identity, despite the assembly
or processing within the State.
§ 779.251 Goods that have lost their
out-of-State identity.
(a) Goods which are purchased or received by the enterprise within the
State will not be considered goods
which have ‘‘moved across State lines’’
if the goods, although they came from
outside the State, had been processed
or manufactured so as to have lost
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§ 779.252
29 CFR Ch. V (7–1–19 Edition)
their identity as out-of-State goods before they are purchased or received by
the enterprise. This assumes, of course,
that the goods so manufactured or
processed do not move across State
lines before they are sold by the enterprise. Thus where an enterprise buys
bread baked within the State which
does not move across State lines before
it is resold by the enterprise, the bread
is not ‘‘goods, which have moved across
State lines’’ even if the flour and other
ingredients came from outside the
State. The same conclusion will follow,
under the same circumstances, where
clothing is manufactured from out-ofState fabrics.
(b) In those cases where goods are
composed in part of goods which have,
and in part of goods which have not,
moved across State lines, the entire
product will be considered as goods
which have moved across State lines,
if, as a practical matter, it substantially consists of goods which are identifiable as out-of-State goods. Whether
goods have been so changed as to have
lost their out-of-State identity is question which will depend upon all the
facts in a particular case.
§ 779.252 Not in deliveries from the reselling establishment.
Goods which move across State lines
only in the course of deliveries from
the reselling establishment of the enterprise are not included as goods
which ‘‘move or have moved across
State lines.’’ Thus, goods delivered by
the enterprise to its customers outside
of the State are not, for that reason,
considered goods which ‘‘move or have
moved across State lines.’’ The purpose
of the provision excepting ‘‘deliveries
from the reselling establishment’’ is to
limit the test to goods which flow into
the enterprise and to exclude those
goods which only cross State lines
when they flow out of the enterprise as
an incident of the sale of such goods by
the enterprise. In other words, this is
an inflow test and not an outflow test.
§ 779.253 What is included in computing the total annual inflow volume.
The goods which the establishment
purchases or receives for resale that
move or have moved across State lines
must ‘‘amount in total annual volume
to $250,000 or more.’’ It will be noted
that taxes are not excluded in measuring this annual dollar volume. Thus,
the total cost to the enterprise of such
goods will be included in calculating
the $250,000. This will include all taxes
and other charges which the enterprise
must pay for such goods. Generally, all
charges will be included in the invoice
of the goods. But whether included in
the invoice or not, the total amount
which the enterprise is required to pay
for such goods, including charges for
transportation, insurance, delivery,
storage and any other will be included
in computing the $250,000. The dollar
volume of the goods purchased or received by the enterprise is the ‘‘annual’’ volume. The method of calculating the annual dollar volume is explained in § 779.266.
THE GASOLINE SERVICE ESTABLISHMENT
ENTERPRISE
§ 779.254 Summary of coverage and exemptions prior to and following the
1966 amendments.
The ordinary gasoline service establishment is a covered enterprise under
the Act if it has an annual gross volume of sales made or business done of
not less than $250,000 a year, exclusive
of excise taxes at the retail level which
are separately stated, and meets the
other tests of section 3(s)(5) of the prior
Act and section 3(s)(1) of the amended
Act. Beginning February 1, 1969, enterprise coverage extends to any gasoline
service establishment in an enterprise
which has an annual gross volume in
such amount, even if the establishment’s annual gross volume is less.
However, a gasoline service establishment with gross sales of less than
$250,000, exclusive of excise taxes at the
retail level which are separately stated, may qualify for the minimum wage
and overtime pay exemption provided
in section 13(a)(2) of the Act if it meets
the requirements of that section. Section 779.313 summarizes the requirements. An overtime pay exemption,
which was repealed by the 1966 amendments, existed until February 1, 1967,
for employees of ordinary gasoline
service establishments under the prior
Act. Thus, nonexempt employees of a
covered gasoline service establishment
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Wage and Hour Division, Labor
§ 779.256
enterprise are subject to the minimum
wage standards for previously covered
employment and the overtime pay requirements for newly covered employment as listed below:
Minimum wage:
Beginning
$1.40 an hour ...............................
$1.60 an hour ...............................
Overtime pay after:
44 hours in a workweek ...............
42 hours in a workweek ...............
40 hours in a workweek ...............
February 1, 1967.
February 1, 1968 and
thereafter.
February 1, 1967.
February 1, 1968.
February 1, 1969 and
thereafter.
The particular considerations affecting
coverage and exemptions are discussed
in subsequent sections. The statutory
language contained in section 3(s)(5) of
the prior Act and 3(s)(1) of the amended
Act may be found in § 779.22.
§ 779.255 Meaning of ‘‘gasoline service
establishment.’’
(a) A gasoline service station or establishment is one which is typically a
physically separate place of business
engaged primarily (‘‘primarily’’ meaning 50 percent or more) in selling gasoline and lubricating oils to the general
public at the station or establishment.
It may also sell other merchandise or
perform minor repair work as an incidental part of the business. (See S.
Rept. 145, 87th Cong., first session, p.
32.) No difference in application of the
terms ‘‘gasoline service establishment’’
and ‘‘gasoline service station’’ was intended by Congress (see Senate Report
cited above) and both carry the same
meaning.
(b) Under section 3(s)(5) of the prior
Act and until February 1, 1969, under
section 3(s)(1) of the amended Act, the
covered enterprise is always a single
establishment—a gasoline service establishment, even though such establishment may be a part of some larger
enterprise for purposes of other provisions of the ‘‘enterprise’’ coverage of
the new amendments. As noted above
this term refers to what is commonly
known as a gasoline service station, a
separate ‘‘establishment.’’ What constitutes a separate establishment is
discussed in §§ 779.303 through 779.306.
While receipts from incidental sales
and services are included and counted
in determining the establishment’s an-
nual gross volume of sales for purposes
of enterprise coverage, the establishment’s primary source of receipts must
be from the sale of gasoline and lubricating oils. (See Senate Report cited
above.) An establishment which derives
the greater part of its income from the
sales of goods other than gasoline or
lubricating oils will not be considered
a ‘‘gasoline service establishment.’’
The mere fact that an establishment
has a gasoline pump as an incidental
part of other business activities in
which it is principally engaged does
not constitute it ‘‘a gasoline service establishment’’ within the meaning and
for the purposes of these sections.
§ 779.256 Conditions for enterprise
coverage of gasoline service establishments.
(a) The requirement that the enterprise must be ‘‘an enterprise engaged
in commerce or in the production of
goods for commerce’’ is discussed in
§§ 779.237 through 779.243. Those sections explain which employees are engaged in commerce or in the production of goods for commerce, including
employees handling, selling, or otherwise working on goods that have been
moved in or produced for commerce by
any person. In connection with the discussion in those sections as it concerns
employees of gasoline service establishments, it should be noted that as a
general rule such employees normally
are ‘‘engaged in commerce or in the
production of goods for commerce’’
within the meaning of the Act. For example, gasoline filling station employees servicing motor vehicles used in
interstate transportation or in the production of goods for commerce have always been regarded as being ‘‘engaged
in commerce or in the production of
goods for commerce’’ within the meaning of the Act. Such employees will
also be considered as engaged in handling, selling or otherwise working on
goods that have been moved in or produced for commerce by any person, if
the gasoline or lubricating oils or the
other goods with respect to which they
perform the described activities have
come from outside the State in which
the establishment is located.
(b) For periods before February 1,
1969, a gasoline service establishment
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§ 779.257
29 CFR Ch. V (7–1–19 Edition)
was within the scope of the enterprise
coverage provisions of the Act only if
its annual gross volume of sales was
not less than $250,000, exclusive of excise taxes at the retail level which are
separately stated. Until such date, a
gasoline service establishment which
did not have such an annual gross volume of sales was not a covered enterprise, and enterprise coverage did not
extend to it by virtue of the fact that
it is an establishment of an enterprise
which meets coverage tests of section
3(s). In determining whether the establishment has the requisite annual gross
volume of sales the receipts from all
sales of the establishment are included
without limitation to the receipts from
sales of gasoline and lubricating oil. In
computing the annual gross volume of
sales the gross receipts from all types
of sales during a 12-month period are
included. These gross receipts are
measured by the price paid by the purchaser of the goods or services sold by
the establishment (Sen. Rept. 1487, 89th
Cong. second session p. 7). Thus, where
the establishment sells gasoline for an
oil company on commission, annual
gross volume is based on the retail sale
price and not on the smaller amount
retained or received as commissions. A
further discussion of what sales are included in the annual gross volume is
contained in §§ 779.258 through 779.260.
(c) In computing the annual gross
volume of sales, excise taxes at the retail level which are separately stated
are not counted. A discussion of the excise taxes which may be excluded under
this provision is contained in §§ 779.261
through 779.264. Whether the particular
taxes are ‘‘excise taxes at the retail
level’’ depends upon the facts in each
case. If the taxes are ‘‘excise taxes at
the retail level’’ they will be excludable only if they are ‘‘separately stated.’’ Where a gasoline station posts a
sign on or alongside the gasoline
pumps indicating that a certain
amount per gallon is for a specific excise tax, this will meet the requirement of being ‘‘separately stated’’. The
method of calculating annual gross volume of sales is explained in greater detail in §§ 779.265 through 779.269.
§ 779.257 Exemption applicable to gasoline service establishments under
the prior Act.
Section 13(b)(8) of the prior Act (before the 1966 amendments) contained
an exemption from the overtime pay
requirements for ‘‘any employee of a
gasoline service station’’. This exemption was applicable prior to February 1,
1967, without regard to the annual
gross volume of sales of the gasoline
service station by which the employee
was employed. The removal of this exemption by the 1966 amendments
brought non-exempt employees of covered gasoline service stations within
the purview of the overtime requirements of the Act for the first time.
ANNUAL GROSS VOLUME OF SALES MADE
OR BUSINESS DONE
§ 779.258
Sales made or business done.
The Senate Report on the 1966
amendments reaffirmed the intent to
measure the ‘‘dollar volume of sales or
business’’ including ‘‘the gross receipts
or gross business’’ to determine whether an enterprise is covered. This concept was first expressed in the Senate
Report on the 1961 amendment (S.
Rept. No. 145, 87th Congress, first session, p. 38). The phrase ‘‘business done’’
added by the 1966 amendments to section 3(s) merely reflects with more
clarity the economic test of business
size expressed in the prior Act in terms
of ‘‘annual gross volume of sales’’ and
conforms the language of the Act with
the Congressional view expressed in the
legislative history of the 1961 amendments. Thus, the annual gross volume
of an enterprise must include any business activity in which it engages which
can be measured on a dollar basis irrespective of whether the enterprise is
tested under the prior or amended Act.
The Senate Report on the 1966 amendments states:
The intent to measure the ‘‘dollar volume
of sales or business’’ including the ‘‘gross receipts or gross business’’ in determining coverage of such an enterprise was expressed in
the Senate report above cited at page 38. The
addition of the term ‘‘business done’’ to the
statutory language should make this intent
abundantly plain for the future and remove
any possible reason for misapprehension. The
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Wage and Hour Division, Labor
§ 779.260
annual gross volume of sales made or business done by an enterprise, within the meaning of section 3(s), will thus continue to include both the gross dollar volume of the
sales (as defined in sec. 3(k)) which it makes,
as measured by the price paid by the purchaser for the property or service sold to him
(exclusive of any excise taxes at the retail
level which are separately stated), and the
gross dollar volume of any other business activity in which the enterprise engages which
can be similarly measured on a dollar basis.
This would include, for example, such activity by an enterprise as making loans or renting or leasing property of any kind. (S. Rept.
No. 1487, 89th Congress, second session, pp. 7–
8.)
§ 779.259 What is included in annual
gross volume.
(a) The annual gross volume of sales
made or business done of an enterprise
consists of its gross receipts from all
types of sales made and business done
during a 12-month period. The gross
volume of sales made or business done
means the gross dollar volume (not
limited to income) derived from all
sales and business transactions including, for example, gross receipts from
service, credit, or other similar
charges. Credits for goods returned or
exchanged and rebates and discounts,
and the like, are not ordinarly included
in the annual gross volume of sales or
business. The gross volume of sales or
business includes the receipts from
sales made or business done by the retail or service establishments of the
enterprise as well as the sales made or
business done by any other establishments of the enterprise, exclusive of
the internal transactions between
them. Gross volume is measured by the
price paid by the purchaser for the
property or service sold to him, as stated in the Senate Committee Report
(§ 779.258). It is not measured by profit
on goods sold or commissions on sales
made for others. The dollar value of
sales or business of the entire enterprise in all establishments is added together to determine whether the applicable dollar test is met. The fact that
one or more of the retail or service establishments of the enterprise may
have less than $250,000 in annual dollar
volume and may meet the other requirements for exemption from the pay
provisions of the Act under section
13(a)(2), does not exclude the dollar vol-
ume of sales or business of that establishment from the annual gross volume
of the enterprise. However, the dollar
volume of an establishment derived
from transactions with other establishments in the same enterprise does not
ordinarily constitute part of the annual gross volume of the enterprise as
a whole. The computation of the annual gross volume of sales or business
of the enterprise is made ‘‘exclusive of
excise taxes at the retail level which
are separately stated’’. The taxes
which may be excluded are discussed in
§§ 779.261 through 779.264. The methods
of calculating the annual gross volume
of sales of an enterprise are set forth in
§§ 779.265 through 779.269.
(b) In the ordinary case the functions
of a leased department are controlled
or unified in such a way that it is included in the establishment and therefore in the enterprise in which it is located, as discussed in § 779.225. The applicability of enterprise coverage and
certain exemptions to such a leased department depends upon the enterprise
coverage and the exemption status of
the establishment in which the leased
department is located. The annual
gross volume of such a leased department is included in the annual gross
volume of the establishment in which
it is located as well as in the annual
gross volume of the enterprise of which
such establishment is a part.
(c) Likewise, where franchise or
other arrangements result in the creation of a larger enterprise by means of
operational restrictions so that the establishment, dealer, or concessionaire
is an integral part of the related activities of the enterprise which grants the
franchise, right, or concession, as discussed in §§ 779.229 and 779.232, it will
follow that the annual gross volume of
sales made or business done of such an
enterprise includes the dollar volume
of sales or business of each related establishment dealer, or concessionaire.
§ 779.260 Trade-in allowances.
Where merchandise is taken in trade
when a sale is made, the annual gross
volume of sales or business will include
the gross amount of the sale before deduction of the allowance on such tradein merchandise. This is so even though
an overallowance or excessive value is
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§ 779.261
29 CFR Ch. V (7–1–19 Edition)
allowed on the trade-in merchandise.
In turn, when the trade-in merchandise
is sold the amount of the sale will be
included in the annual gross volume.
or local government provided that the
tax is ‘‘levied at the retail level’’ and
‘‘separately stated’’.
§ 779.262 Excise taxes at the retail
level.
EXCISE TAXES
§ 779.261 Statutory provision.
Sections 3(s)(1) and 13(a)(2) of the
amended Act as well as sections 3(s)(1),
3(s)(2), 3(s)(5), and 13(a)(2)(iv) of the
prior Act provide for the exclusion of
‘‘excise taxes at the retail level which
are separately stated’’ in computing
the gross annual volume of sales or
business or the annual dollar volume of
sales for purposes of certain of the provisions contained in those sections.
The Senate Committee report states as
follows with respect to this provision:
* * * in determining whether the enterprise
or establishment, as the case may be, has the
requisite annual dollar volume of sales, excise taxes will not be counted if they are
taxes that are collected at the retail level
and are separately identified in the price
charged the customer for the goods or services at the time of the sale. Excise taxes
which are levied at the manufacturer’s,
wholesaler’s, or other distributive level will
not be excluded in calculating the dollar volume of sales nor will excise taxes be excluded in cases where the customer is
charged a single price for the merchandise or
services and the taxes are not separately
identified when the sale is made. (S. Rept.,
145, 87th Cong., first session, p. 39.)
In applying the above rules to determine annual gross volume of sales or
business under section 3(s) or annual
dollar volume of sales for purposes of
the $250,000 test under section 13(a)(2),
excise taxes which (a) are levied at the
retail level and (b) are separately stated and identified in the charge to the
customer at the time of sale need not
be included in the calculation of the
gross or dollar volume of sales. Excise
taxes which are levied at the manufacturer’s, wholesaler’s or other distributive level will not, ordinarily, be excluded in calculating the volume of
sales, nor will excise taxes, even if levied at the retail level, be excluded in
cases where the customer is charged a
single price for the merchandise or
services and the taxes are not separately identified when the sale is made.
Excise taxes will be excludable whether
they are levied by the Federal, State,
(a) Federal excise taxes are imposed
at the retail level on highway vehicle
fuels other than gasoline under the
provisions of 26 U.S.C. 4041. Such excise
taxes are levied at the retail level on
any liquid fuel sold for use, or used in
a diesel-powered highway vehicle. A
similar tax is imposed on the sale of
such special motor fuels as benzene and
liquefied petroleum gas when used as a
motor fuel. To the extent that these
taxes are separately stated to the customer, they may be excluded from
gross volume of sales. The extent to
which State taxes are levied at the retail level, and thus excludable when
separately stated, depends, of course,
upon the law of the State concerned.
However, as a general rule, State,
county, and municipal sales taxes are
levied at the retail level, and to the extent that they are separately stated,
may be excluded. All State excise taxes
on gasoline are, for purposes of section
3(s), taxes levied at the retail level,
which, if separately stated, may be excluded.
(b) The circumstances surrounding
the levying and collection of the Federal excise taxes on gasoline, tires, and
inner tubes reflect that, although they
are listed under the title of ‘‘Manufacturers Excise Taxes,’’ they are, in practical operation, taxes ‘‘at the retail
level.’’ Federal excise taxes on gasoline, tires, and inner tubes, when ‘‘separately stated,’’ may therefore be excluded in computing the annual gross
volume of an enterprise for the purpose
of determining coverage under section
3(s)(1) of the Act and section 13(a)(2) for
purposes of applying the $250,000 test
for determining the retail and service
establishment exemption of an establishment in a covered enterprise.
§ 779.263 Excise taxes not at the retail
level.
There are also a wide variety of taxes
levied at the manufacturer’s or distributor’s level and not at the retail
level. It should be noted, however, that
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Wage and Hour Division, Labor
§ 779.266
the circumstances surrounding the levying and collection of taxes must be
carefully considered. The facts concerning the levying and collection of
Federal excise taxes on alcoholic beverages and tobacco reflect that such
taxes are upon the manufacture of
these products and that they are neither levied nor collected at the retail
level and thus are not excludable. However, in some cases the circumstances
may reflect that despite the fact that
such taxes may be levied upon the
manufacturer or distributor, nevertheless they may be, in practical operation, taxes at the retail level and may
be so regarded for the purpose of this
provision.
§ 779.264
ed.
Excise taxes separately stat-
A tax is separately stated where it
clearly appears that it has been added
to the sales price as a separate, identifiable amount, even though there was
no invoice or sales slip. In the absence
of a sales slip or invoice, the amount of
the tax may either be separately stated
orally at the time of sale, or visually
by means of a poster or other sign reasonable designed to inform the purchaser that the amount of the tax, either as a stated sum per unit or measured by the gross amount of the sale,
or as a percentage of the price, is included in the sales price. A sign on a
gasoline pump indicating in cents per
gallon the amount of State and Federal
highway fuel excise taxes is an example of ‘‘separately stated’’ taxes.
COMPUTING THE ANNUAL VOLUME
§ 779.265 Basis for making computations.
The annual gross dollar volume of
sales made or business done of an enterprise or establishment consists of
the gross receipts from all of its sales
or its volume of business done during a
12-month period. Where a computation
of the annual gross volume is necessary
to determine monetary obligations to
employees under the Act whether in an
enterprise which has one or more retail
or service establishments, or in any establishment in such enterprise, or in
any gasoline service establishment, it
must be based on the most recent prior
experience which it is practicable to
use. This was recognized in the Congress when the legislation was under
consideration. (S. Rept. No. 145, 87th
Cong., first session, p. 38 discusses in
detail the calculation of the annual
gross volume.) When gross receipts of
an enterprise show that the annual dollar volume of sales made or business
done meets the statutory tests for coverage and nonexemption, the employer
must comply with the Act’s monetary
provisions from that time on or until
such time as the tests are not met.
(See § 779.266.)
§ 779.266 Methods of computing annual volume of sales or business.
(a) No computations of annual gross
dollar volume are necessary to determine coverage or exemption in those
enterprises in which the gross receipts
regularly derived each year from the
business are known by the employers
to be substantially in excess or substantially under the minimum dollar
volume specified in the applicable provision of the Act. Also, where the enterprise or establishment, during the
portion of its current income tax year
up to the end of the current payroll period, has already had a gross volume of
sales or business in excess of the dollar
amount specified in the statute, it is
plain that its annual dollar volume
currently is in excess of the statutory
amount, and that the Act applies accordingly. The computation described
in paragraph (b) of this section, therefore need not be made. Nor is it required where the enterprise or establishment has not yet in such current
year exceeded the statutory amount in
its gross volume of sales or business, if
it has had, in the most recently ended
year used by it for income tax purposes, a gross volume of sales made and
business done in excess of the amount
specified in the Act. In such event, the
enterprise or establishment will be
deemed to have an annual gross volume
in excess of the statutory amount unless the employer establishes, through
use of the method set forth in paragraph (b) of this section, an annual
gross volume of sales made or business
done which is less than the amount
specified in the Act. The method described in paragraph (b) of this section
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§ 779.267
29 CFR Ch. V (7–1–19 Edition)
shall be used, as intended by the Congress (see S. Rept. 145, 87th Cong. first
session, p. 38), for computation of annual dollar volume in all cases when
such a computation becomes necessary
in order to determine the applicability
of provisions of the Act.
(b) In order to determine, when there
may be doubt, whether an enterprise or
establishment has an annual gross volume of sales made or business done in
excess of the amount specified in the
statute, and analysis will be made at
the beginning of each quarter-year so
that the employer will know whether
or not the dollar volume tests have
been met for the purpose of complying
with the law in the workweeks ending
in the current quarter-year. The total
of the gross receipts from all its sales
or business during a 12-month period
which immediately precedes the quarter-year being tested will be the basis
for analysis. When it is necessary to
make a determination for enterprises
or establishments which are operated
on a calendar year basis for income tax
or sales or other accounting purposes
the quarter-year periods tested will coincide with the calendar quarters (January 1–March 31; April 1–June 30; July
1–September 30; October 1–December
31). On the other hand, where enterprises or establishments are operated
on a fiscal year basis, which consists of
an annual period different from the calendar year, the four quarters of the fiscal period will be used in lieu of calendar quarters in computing the annual volume. Once either basis has
been adopted it must be used in making subsequent calculations. The sales
records maintained as a result of the
accounting procedures used for tax or
other business purposes may be utilized
in computing the annual dollar volume
provided the same accounting procedure is used consistently and that such
procedure accurately reflects the annual volume of sales or business.
§ 779.267 Fluctuations in annual gross
volume affecting enterprise coverage and establishment exemptions.
It is possible that the analysis performed at the beginning of each quarter to determine the applicability of
the monetary provisions of the Act
may reveal changes in the annual gross
volume or other determinative factors
which result in the enterprise or establishment meeting or ceasing to meet
one or more of the tests for enterprise
coverage or establishment exemption.
Thus, enterprise coverage may result
where the annual volume increases
from an amount under to an amount
over $250,000. Also, an enterprise having an annual gross volume of more
than $1 million and meeting the requirements for a covered retail enterprise under the prior Act on the basis
of previous sales analyses may fall
below $1 million when the annual gross
volume is computed at the beginning of
the quarter being tested and as a result
qualify only as a newly covered enterprise for the current quarter under the
amended Act. Similarly, an enterprise
previously subject to new coverage pay
standards, having an annual gross volume of more than $250,000 but less than
$1 million on the basis of previous sales
analyses, may increase its annual gross
volume to $1 million or more when recomputed at the beginning of the quarter being tested. It will thus become
for the current quarter an enterprise in
which employees are subject to the pay
standards for employment covered
under the Act prior to the amendments, provided that it meets the other
conditions as discussed in § 779.245.
§ 779.268 Grace period of 1 month for
computation.
Where it is not practicable to compute the annual gross volume of sales
or business under paragraph (b) of
§ 779.266 in time to determine obligations under the Act for the current
quarter, an enterprise or establishment
may use a 1-month grace period. If this
1-month grace period is used, the computations made under this section will
determine its obligations under the Act
for the 3-month period commencing 1
month after the end of the preceding
calendar or fiscal quarter. Once adopted the same basis must be used for each
successive 3-month period.
§ 779.269 Computations for a new business.
When a new business is commenced
the employer will necessarily be unable
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Wage and Hour Division, Labor
§ 779.301
for a time to determine its annual dollar volume on the basis of a full 12month period as described above. In
many cases it is readily apparent that
the enterprise or establishment will or
will not have the requisite annual dollar volume specified in the Act. For example, where the new business consists
of a large department store, or a supermarket, it may be clear from the outset that the business will meet the annual dollar volume tests so as to be
subject to the requirements of the Act.
In other cases, where doubt exists, the
gross receipts of the new business during the first quarter year in which it
has been in operation will be taken as
representative of its annual dollar volume, in applying the annual volume
tests of sections 3(s) and 13(a)(2), for
purposes of determining its obligations
under the Act in workweeks falling in
the following quarter year period.
Similarly, for purposes of determining
its obligations under the Act in workweeks falling within ensuing quarter
year periods, the gross receipts of the
new business for the completed quarter
year periods will be taken as representative of its annual dollar volume in applying the annual volume tests of the
Act. After the new business has been in
operation for a full calendar or fiscal
year, the analysis can be made by the
method described in paragraph (b) of
§ 779.266 with use of the grace period described in § 779.268, if necessary.
Subpart D—Exemptions for Certain
Retail or Service Establishments
GENERAL PRINCIPLES
§ 779.300 Purpose of subpart.
Subpart C of this part has discussed
the various criteria for determining
coverage under the Act of employers
and employees in enterprises and establishments that make retail sales of
goods and services. This subpart deals
primarily with the exemptions from
the Act’s minimum wage and overtime
provisions found in section 13(a) (2), (4),
(11), and 13(b)(18) for employees of retail or service establishments. Also discussed are some exemptions for special
categories of establishments engaged
in retailing goods or services, which do
not require for exemption that the par-
ticular establishment be a retail or
service establishment as defined in the
Act. If all the requirements set forth in
any of these exemptions are met, to
the extent provided therein the employer is relieved from complying with
the minimum wage and/or overtime
provisions of the Act even though his
employees are engaged in interstate or
foreign commerce or in the production
of goods for such commerce or employed in covered enterprises.
§ 779.301
Statutory provisions.
(a) Section 13(a) (2), (4), (11), and section 13(b)(18) of the Act, as amended,
grant exemption from the minimum
wage provisions of section 6 and the
maximum hours provisions of section 7
as follows:
(1) Section 13(a)(2) exempts from
minimum wages and overtime pay:
Any employee employed by any retail or
service establishment (except an establishment or employee engaged in laundering,
cleaning, or repairing clothing or fabrics or
an establishment engaged in the operation of
a hospital, institution, or school described in
section 3(s)(4), if more than 50 per centum of
such establishment’s annual dollar volume of
sales of goods or services is made within the
State in which the establishment is located,
and such establishment is not in an enterprise described in section 3(s) or such establishment has an annual dollar volume of
sales which is less than $250,000 (exclusive of
excise taxes at the retail level which are separately stated). A ‘‘retail or service establishment’’ shall mean an establishment 75
per centum of whose annual dollar volume of
sales of goods or services (or of both) is not
for resale and is recognized as retail sales or
services in the particular industry.
(2) Section 13(a)(4) exempts from
minimum wages and overtime pay:
Any employee employed by an establishment which qualifies as an exempt retail establishment under clause (2) of this sub-section and is recognized as a retail establishment in the particular industry notwithstanding that such establishment makes or
processes at the retail establishment the
goods that it sells: Provided, That more than
85 per centum of such establishment’s annual
dollar volume of sales of goods so made or
processed is made within the State in which
the establishment is located.
(3) Section 13(a)(11) exempts from
minimum wages and overtime pay:
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§ 779.302
29 CFR Ch. V (7–1–19 Edition)
Any employee or proprietor in a retail or
service establishment which qualifies as an
exempt retail or service establishment under
clause (2) of this subsection with respect to
whom the provisions of sections 6 and 7
would not otherwise apply, engaged in handling telegraphic messages for the public
under an agency or contract arrangement
with a telegraph company where the telegraph message revenue of such agency does
not exceed $500 a month.
(4) Section 13(b)(18) exempts from
overtime pay only:
Any employee of a retail or service establishment who is employed primarily in connection with the preparation or offering of
food or beverages for human consumption,
either on the premises, or by such services as
catering, banquet, box lunch, or curb or
counter service, to the public, to employees,
or to members or guests of members of clubs.
(b) Sections 13(a)(2), (4), (13), (19), and
(20) of the prior Act granted exemptions from both the minimum wage
provisions of section 6 and the maximum hours provisions of section 7 as
follows:
(1) Section 13(a)(2) exempted:
Any employee employed by any retail or
service establishment, more than 50 per centum of which establishment’s annual dollar
volume of sales of goods or services is made
within the state in which the establishment
is located, if such establishment—
(i) Is not in an enterprise described in section 3(s), or
(ii) Is in such an enterprise and is a hotel,
motel or restaurant, or motion picture theater; or is an amusement or recreational establishment that operates on a seasonal
basis, or
(iii) Is in such an enterprise and is a hospital, or an institution which is primarily
engaged in the care of the sick, the aged, the
mentally ill or defective, residing on the
premises of such institution, or a school for
physically or mentally handicapped or gifted
children, or
(iv) Is in such an enterprise and has an annual dollar volume of sales (exclusive of excise taxes at the retail level which are separately stated) which is less than $250,000.
A ‘‘retail or service establishment’’ shall
mean an establishment 75 per centum of
whose annual dollar volume of sales of goods
or services (or both) is not for resale and is
recognized as retail sales or services in the
particular industry.
(2) Section 13(a)(4) provided the same
exemption as it now does.
(3) Section 13(a)(13) provided the
same exemption as section 13(a)(11) of
the present Act.
(4) Section 13(a)(19) exempted:
Any employee of a retail or service establishment which is primarily engaged in the
business of selling automobiles, trucks, or
farm implements.
(5) Section 13(a)(20) exempted those
employees who are now exempt from
the overtime provisions only under section 13(b)(18) of the present Act.
(c) Employees who were exempt from
the minimum wage and overtime pay
requirements under a provision of the
prior Act set forth in paragraph (b) of
this section, but are no longer exempt
from one or both of such requirements
under the present Act must be paid
minimum wages or overtime pay, as
the case may be, in accordance with
the pay standards provided for newly
covered employment, in any workweek
when they perform work within the individual or enterprise coverage of the
Act.
‘‘ESTABLISHMENT’’ BASIS OF
EXEMPTIONS
§ 779.302 Exemptions depend on character of establishment.
Some exemptions depend on the character of the establishment by which an
employee is employed. These include
the ‘‘retail or service establishment’’
exemptions in sections 13(a) (2), (4), and
(11) and the exemptions available to
the establishments of the character
specified in sections 13(a) (3), (9), and
13(b)(8) (first part). Therefore, if the establishment meets the tests enumerated in these sections, employees ‘‘employed by’’ that establishment are generally exempt from sections 6 and 7.
(See §§ 779.307 to 779.309 discussing
‘‘employed by.’’) Other exemptions establish two criteria, the character of
the establishment and the nature of
the conditions of the employment of
the particular employee. Such exemptions are set forth in section 13(b)(8)
(second part), and section 13(b)(18) and
(19). To determine whether the exemptions of these sections apply it is necessary to determine both that the establishment meets the enumerated
tests and that the employee is engaged
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Wage and Hour Division, Labor
§ 779.305
in the enumerated activities or employed under the conditions specified.
Thus, under section 13(b)(18) some of
the employees of a given employer may
be exempt from the overtime pay requirements (but not the minimum
wage) of the Act, while others may not.
§ 779.303 ‘‘Establishment’’ defined; distinguished from ‘‘enterprise’’ and
‘‘business.’’
As previously stated in § 779.23, the
term establishment as used in the Act
means a distinct physical place of business. The ‘‘enterprise,’’ by reason of
the definition contained in section 3(r)
of the Act and the tests enumerated in
section 3(s) of the Act, may be composed of a single establishment. The
term ‘‘establishment,’’ however, is not
synonymous with the words ‘‘business’’
or ‘‘enterprise’’ when those terms are
used to describe multiunit operations.
In such a multiunit operation some of
the establishments may qualify for exemption, others may not. For example,
a manufacturer may operate a plant
for production of its goods, a separate
warehouse for storage and distribution,
and several stores from which its products are sold. Each such physically separate place of business is a separate establishment. In the case of chain store
systems, branch stores, groups of independent stores organized to carry on
business in a manner similar to chain
store systems, and retail outlets operated by manufacturing or distributing
concerns, each separate place of business ordinarily is a separate establishment.
§ 779.304 Illustrations of a single establishment.
(a) The unit store ordinarily will constitute
the
establishment
contemplated by the exemptions. The
mere fact that a store is departmentalized will not alter the rule. For example, the typical large department store
carries a wide variety of lines which ordinarily are segregated or departmentalized not only as to location within
the store, but also as to operation and
records. Where such departments are
operated as integral parts of a unit, the
departmentalized unit taken as a whole
ordinarily will be considered to be the
establishment contemplated by the ex-
emptions, even if there is diversity of
ownership of some of the departments,
such as leased departments.
(b) Some stores, such as bakery or
tailor shops, may produce goods in a
back room and sell them in the adjoining front room. In such cases if there is
unity of ownership and if the back
room and the front room are operated
by the employer as a single store, the
entire premises ordinarily will be considered to be a single establishment for
purposes of the tests of the exemption,
notwithstanding the fact that the two
functions of making and selling the
goods, are separated by a partition or a
wall. (See H. Mgrs. St., 1949, p. 27.)
§ 779.305 Separate establishments on
the same premises.
Although, as stated in the preceding
section, two or more departments of a
business may constitute a single establishment, two or more physically separated portions of a business though located on the same premises, and even
under the same roof in some circumstances may constitute more than
one establishment for purposes of exemptions. In order to effect such a result physical separation is a prerequisite. In addition, the physically
separated portions of the business also
must be engaged in operations which
are functionally separated from each
other. Since there is no such functional
separation between activities of selling
goods or services at retail, the Act recognizes that food service activities of
such retail or service establishments as
drugstores, department stores, and
bowling alleys are not performed by a
separate establishment which ‘‘is’’ a
‘‘restaurant’’ so as to qualify for the
overtime exemption provided in section 13(b)(8) and accordingly provides a
separate overtime exemption in section
13(b)(18) for employees employed by
any ‘‘retail or service establishments’’
in such activities in order to equalize
the application of the Act between restaurant establishments and retail or
service establishments of other kinds
which frequently compete with them
for customers and labor. (See Sen.
Rept. 1487, 89th Cong. first session, p.
32.) For retailing and other functionally unrelated activities performed on
the same premises to be considered as
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§ 779.306
29 CFR Ch. V (7–1–19 Edition)
performed in separate establishments,
a distinct physical place of business engaged in each category of activities
must be identifiable. The retail portion
of the business must be distinct and
separate from and unrelated to that
portion of the business devoted to
other activities. For example, a firm
may engage in selling groceries at retail and at the same place of business
be engaged in an unrelated activity,
such as the incubation of chicks for
sale to growers. The retail grocery portion of the business could be considered
as a separate establishment for purposes of the exemption, if it is physically segregated from the hatchery
and has separate employees and separate records. In other words, the retail
portion of an establishment would be
considered a separate establishment
from the unrelated portion for the purpose of the exemption if (a) It is physically separated from the other activities; and (b) it is functionally operated
as a separate unit having separate
records, and separate bookkeeping; and
(c) there is no interchange of employees between the units. The requirement
that there be no interchange of employees between the units does not
mean that an employee of one unit
may not occasionally, when circumstances require it, render some
help in the other units or that one employee of one unit may not be transferred to work in the other unit. The
requirement has reference to the indiscriminate use of the employee in both
units without regard to the segregated
functions of such units.
§ 779.306 Leased departments not separate establishments.
It does not follow from the principles
discussed in § 779.305 that leased departments engaged in the retail sale of
goods or services in a departmentalized
store are separate establishments. To
the contrary, it is only in rare instances that such leased departments
would be separate establishments for
purposes of the exemptions. For example, take a situation where the departmentalized retail store, having leased
departments, controls the space location, determines the type of goods that
may be sold, determines the pricing
policy, bills the customers, passes on
customers’ credit, receives payments
due, handles complaints, determines
the personnel policies, and performs
other functions as well. In such situations the leased department is an integral part of the retail store and considered to be such by the customers. It is
clear that such departments are not
separate establishments but rather a
part of the retail store establishment
and will be considered as such for purposes of the exemptions. The same result may follow in the case of leased
departments engaged in the retail sale
of goods or services in a departmentalized store where all or most of the departments are leased or otherwise individually owned, but which operate
under one common trade name and
hold themselves out to the public as
one integrated business unit.
§ 779.307 Meaning and scope of ‘‘employed by’’ and ‘‘employee of.’’
Section 13(a)(2) as originally enacted
in 1938 exempted any employee ‘‘engaged in’’ any retail or service establishment. The 1949 amendments to that
section, however, as contained in section 13(a)(2) and (4) exempted any employee ‘‘employed by’’ any establishment described in those exemptions.
The 1961 and 1966 amendments retained
the ‘‘employed by’’ language of these
exemptions. Thus, where it is found
that any of those exemptions apply to
an establishment owned or operated by
the employer the employees ‘‘employed
by’’ that establishment of the employer are exempt from the minimum
wage and overtime provisions of the
Act without regard to whether such
employees perform their activities inside or outside the establishment.
Thus, such employees as collectors, repair and service men, outside salesmen,
merchandise buyers, consumer survey
and promotion workers, and delivery
men actually employed by an exempt
retail or service establishment are exempt from the minimum wage and
overtime provisions of the Act although they may perform the work of
the establishment away from the premises. As used in section 13 of the Act,
the phrases ‘‘employee of’’ and ‘‘employed by’’ are synonymous.
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Wage and Hour Division, Labor
§ 779.310
§ 779.308 Employed within scope of exempt business.
of the chain (Mitchell v. Kroger Co.,
supra.)
In order to meet the requirement of
actual employment ‘‘by’’ the establishment, an employee, whether performing his duties inside or outside the
establishment, must be employed by
his employer in the work of the exempt
establishment itself in activities within the scope of its exempt business.
(See Davis v. Goodman Lumber Co., 133
F. 2d 52 (CA–4) (holding section 13(a)(2)
exemption inapplicable to employees
working in manufacturing phase of employer’s retail establishment); Wessling
v. Carroll Gas Co., 266 F. Supp. 795 (N.D.
Iowa); Oliveira v. Basteiro, 18 WH Cases
668 (S.D. Texas). See also, Northwest
Airlines v. Jackson, 185 F. 2d 74 (CA–8);
Walling v. Connecticut Co., 154 F. 2d 522
(CA–2) certiorari denied, 329 U.S. 667;
and Wabash Radio Corp. v. Walling, 162
F. 2d 391 (CA–6).)
§ 779.310 Employees of employers operating multi-unit businesses.
(a) Where the employer’s business operations are conducted in more than
one establishment, as in the various
units of a chain-store system or where
branch establishments are operated in
conjunction with a main store, the employer is entitled to exemption under
section 13(a)(2) or (4) for those of his
employees in such business operations,
and those only, who are ‘‘employed by’’
an establishment which qualifies for
exemption under the statutory tests.
For example, the central office or central warehouse of a chain-store operation even though located on the same
premises as one of the chain’s retail
stores would be considered a separate
establishment for purposes of the exemption, if it is physically separated
from the area in which the retail operations are carried on and has separate
employees and records. (Goldberg v.
Sunshine Department Stores, 15 W.H.
Cases 169 (CA–5) Mitchell v. Miller Drugs,
Inc., 255 F. 2d 574 (CA–1); Walling v.
Goldblatt Bros., 152 F. 2d 475 (CA–7).)
(b) Under this test, employees in the
warehouse and central offices of
chainstore systems have not been exempt prior to, and their nonexempt
status is not changed by, the 1961
amendments. Typically, chain-store organizations are merchandising institutions of a hybrid retail-wholesale nature, whose wholesale functions are
performed through their warehouses
and central offices and similar establishments which distribute to or serve
the various retail outlets. Such central
establishments clearly cannot qualify
as exempt establishments. (A. H. Phillips, Inc. v. Walling, 324 U.S. 490; Mitchell v. C & P Stores, 286 F. 2d 109 (CA–5).)
The employees working there are not
‘‘employed by’’ any single exempt establishment of the business; they are,
rather, ‘‘employed by’’ an organization
of a number of such establishments.
Their status obviously differs from
that of employees of an exempt retail
or service establishment, working in a
warehouse operated by and servicing
such establishment exclusively, who
are exempt as employees ‘‘employed
§ 779.309
Employed ‘‘in’’ but not ‘‘by.’’
Since the exemptions by their terms
apply to the employees ‘‘employed by’’
the exempt establishment, it follows
that those exemptions will not extend
to other employees who, although actually working in the establishment
and even though employed by the same
person who is the employer of all under
section 3(d) of the Act, are not ‘‘employed by’’ the exempt establishment.
Thus, traveling auditors, manufacturers’ demonstrators, display-window arrangers, sales instructors, etc., who are
not ‘‘employed by’’ an exempt establishment in which they work will not
be exempt merely because they happen
to be working in such an exempt establishment, whether or not they work for
the same employer. (Mitchell v. Kroger
Co., 248 F. 2d 935 (CA–8).) For example,
if the manufacturer sends one of his
employees to demonstrate to the public
in a customer’s exempt retail establishment the products which he has
manufactured, the employee will not
be considered exempt under section
13(a)(2) since he is not employed by the
retail establishment but by the manufacturer. The same would be true of an
employee of the central offices of a
chain-store organization who performs
work for the central organization on
the premises of an exempt retail outlet
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§ 779.311
29 CFR Ch. V (7–1–19 Edition)
by’’ the exempt establishment regardless of whether or not the warehouse
operation is conducted in the same
building as the selling or servicing activities.
§ 779.311 Employees working in more
than one establishment of same employer.
(a) An employee who is employed by
an establishment which qualifies as an
exempt establishment under section
13(a)(2) or (4) is exempt from the minimum wage and overtime requirements
of the Act even though his employer
also operates one or more establishments which are not exempt. On the
other hand, it may be stated as a general rule that if such an employer employs an employee in the work of both
exempt and nonexempt establishments
during the same workweek, the employee is not ‘‘employed by’’ an exempt
establishment during such workweek.
It is recognized, however, that employees performing an insignificant amount
of such incidental work or performing
work sporadically for the benefit of another establishment of their employer
nevertheless, are ‘‘employed by’’ their
employer’s retail establishment. For
example, there are situations where an
employee of an employer in order to
discharge adequately the requirements
of his job for the exempt establishment
by which he is employed incidentally
or sporadically may be called upon to
perform some work for the benefit of
another establishment. For example,
an elevator operator employed by a retail store, in performance of his regular
duties for the store incidentally may
carry personnel who have a central office or warehouse function. Similarly,
a maintenance man employed by such
store incidentally may perform work
which is for the benefit of the central
office or warehouse activities. Also, a
sales clerk employed in a retail store
in one of its sales departments sporadically may be called upon to release
some of the stock on hand in the department for the use of another store.
(b) The application of the principles
discussed in § 779.310 and in paragraph
(a) of this section would not preclude
the applicability of the exemption to
the employee whose duties require him
to spend part of his week in one exempt
retail establishment and the balance of
the week in another of his employer’s
exempt retail establishments; provided
that his work in each of the establishments will qualify him as ‘‘employed’’
by such a retail establishment at all
times within the individual week. As
an example, a shoe clerk may sell shoes
for part of a week in one exempt retail
establishment of his employer and in
another of his employer’s exempt retail
establishments for the remainder of
the workweek. In that entire workweek he would be considered to be employed by an exempt retail establishment. In such a situation there is no
central office or warehouse concept,
nor is the employee considered as performing services for the employer’s
business organization as a whole since
there is no period during the week in
which the employee is not ‘‘employed
by’’ a single exempt retail establishment.
STATUTORY MEANING OF RETAIL OR
SERVICE ESTABLISHMENT
§ 779.312 ‘‘Retail or service establishment’’, defined in section 13(a)(2).
The 1949 amendments to the Act defined the term ‘‘retail or service establishment’’ in section 13(a)(2). That definition was retained in section 13(a)(2)
as amended in 1961 and 1966 and is as
follows:
A ‘‘retail or service establishment’’ shall
mean an establishment 75 per centum of
whose annual dollar volume of sales of goods
or services (or of both) is not for resale and
is recognized as retail sales or services in the
particular industry.
It is clear from the legislative history
of the 1961 amendments to the Act that
no different meaning was intended by
the term ‘‘retail or service establishment’’ from that already established
by the Act’s definition, wherever used
in the new provisions, whether relating
to coverage or to exemption. (See S.
Rept. 145, 87th Cong., first session p. 27;
H.R. 75, 87th Cong., first session p. 9.)
The legislative history of the 1949
amendments and existing judicial pronouncements regarding section 13(a)(2)
of the Act, therefore, will offer guidance to the application of this definition.
514
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Wage and Hour Division, Labor
§ 779.316
§ 779.313 Requirements summarized.
The statutory definition of the term
‘‘retail or service establishment’’ found
in section 13(a)(2), clearly provides that
an establishment to be a ‘‘retail or
service establishment’’: (a) Must engage in the making of sales of goods or
services; and (b) 75 percent of its sales
of goods or services, or of both, must be
recognized as retail in the particular
industry; and (c) not over 25 percent of
its sales of goods or services, or of
both, may be sales for resale. These requirements are discussed below in
§§ 779.314 through 779.341.
MAKING SALES OF GOODS AND SERVICES
‘‘RECOGNIZED AS RETAIL’’
§ 779.314 ‘‘Goods’’ and ‘‘services’’ defined.
The term ‘‘goods’’ is defined in section 3(i) of the Act and has been discussed above in § 779.14. The Act, however, does not define the term ‘‘services.’’ The term ‘‘services,’’ therefore,
must be given a meaning consistent
with its usage in ordinary speech, with
the context in which it appears and
with the legislative history of the exemption as it explains the scope, the
purposes and the objectives of the exemption. Although in a very general
sense every business might be said to
perform a service it is clear from the
context and the legislative history that
all business establishments are not
making sales of ‘‘services’’ of the type
contemplated in the Act; that is, services rendered by establishments which
are traditionally regarded as local retail service establishments such as the
restaurants, hotels, barber shops, repair shops, etc. (See §§ 779.315 through
779.320.) It is to these latter services
only that the term ‘‘service’’ refers.
§ 779.315 Traditional local retail or
service establishments.
The term ‘‘retail’’ whether it refers
to establishments or to the sale of
goods or services is susceptible of various interpretations. When used in a
specific law it can be defined properly
only in terms of the purposes and objectives and scope of that law. In enacting the section 13(a)(2) exemption,
Congress had before it the specific object of exempting from the minimum
wage and overtime requirements of the
Act employees employed by the traditional local retail or service establishment, subject to the conditions specified in the exemption. (See statements
of Rep. Lucas, 95 Cong. Rec. pp. 11004
and 11116, and of Sen. Holland, 95 Cong.
Rec. pp. 12502 and 12506.) Thus, the
term ‘‘retail or service establishment’’
as used in the Act denotes the traditional local retail or service establishment whether pertaining to the coverage or exemption provisions.
§ 779.316 Establishments outside ‘‘retail concept’’ not within statutory
definition; lack first requirement.
The term ‘‘retail’’ is alien to some
businesses or operations. For example,
transactions of an insurance company
are not ordinarily thought of as retail
transactions. The same is true of an
electric power company selling electrical energy to private consumers. As
to establishments of such businesses,
therefore, a concept of retail selling or
servicing does not exist. That it was
the intent of Congress to exclude such
businesses from the term ‘‘retail or
service establishment’’ is clearly demonstrated by the legislative history of
the 1949 amendments and by the judicial construction given said term both
before and after the 1949 amendments.
It also should be noted from the judicial pronouncements that a ‘‘retail
concept’’ cannot be artificially created
in an industry in which there is no traditional concept of retail selling or
servicing. (95 Cong. Rec. pp. 1115, 1116,
12502, 12506, 21510, 14877, and 14889;
Mitchell v. Kentucky Finance Co., 359
U.S. 290; Phillips Co. v. Walling, 324 U.S.
490; Kirschbaum Co. v. Walling, 316 U.S.
517; Durkin v. Joyce Agency, Inc., 110 F.
Supp. 918 (N.D. Ill.) affirmed sub nom
Mitchell v. Joyce Agency, Inc., 348 U.S.
945; Goldberg v. Roberts 291 F. 2d 532
(CA–9); Wirtz v. Idaho Sheet Metal
Works, 335 F. 2d 952 (CA–9), affirmed in
383 U.S. 190; Telephone Answering
Service v. Goldberg, 290 F. 2d 529 (CA–
1).) It is plain, therefore, that the term
‘‘retail or service establishment’’ as
used in the Act does not encompass establishments in industries lacking a
‘‘retail concept’’. Such establishments
not having been traditionally regarded
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§ 779.317
29 CFR Ch. V (7–1–19 Edition)
as retail or service establishments cannot under any circumstances qualify as
a ‘‘retail or service establishment’’
within the statutory definition of the
Act, since they fail to meet the first requirement of the statutory definition.
Industry usage of the term ‘‘retail’’ is
not in itself controlling in determining
when business transactions are retail
sales under the Act. Judicial authority
is quite clear that there are certain
goods and services which can never be
sold at retail. (Idaho Sheet Metal Works,
Inc. v. Wirtz, 383 U.S. 190, 202, rehearing
denied 383 U.S. 963; Wirtz v. Steepleton
General Tire Company, Inc., 383 U.S. 190,
202, rehearing denied 383 U.S. 963.)
§ 779.317 Partial list of establishments
lacking ‘‘retail concept.’’
There are types of establishments in
industries where it is not readily apparent whether a retail concept exists
and whether or not the exemption can
apply. It, therefore, is not possible to
give a complete list of the types of establishments that have no retail concept. It is possible, however, to give a
partial list of establishments to which
the retail concept does not apply. This
list is as follows:
Accounting firms.
Adjustment and credit bureaus and collection agencies (Mitchell v. Rogers d.b.a.
Commercial Credit Bureau, 138 F. Supp. 214
(D. Hawaii); Mill v. United States Credit
Bureau, 1 WH Cases 878, 5 Labor Cases par.
60,992 (S.D.Calif.).
Advertising agencies including billboard advertising.
Air-conditioning and heating systems contractors.
Aircraft and aeronautical equipment; establishments engaged in the business of dealing in.
Airplane crop dusting, spraying and seeding
firms.
Airports, airport servicing firms and fixed
base operators.
Ambulance service companies.
Apartment houses.
Armored car companies.
Art; commercial art firms.
Auction houses (Fleming v. Kenton Whse., 41
F. Supp. 255).
Auto-wreckers’ and junk dealers’ establishments (Bracy v. Luray, 138 F. 2d 8 (CA–4);
Edwards v. South Side Auto Parts (Mo. App.)
180 SW 2d 1015. (These typically sell for resale.)
Automatic vending machinery; establishments engaged in the business of dealing
in.
Banks (both commercial and savings).
Barber and beauty parlor equipment; establishments engaged in the business of dealing in.
Blacksmiths; industrial.
Blue printing and photostating establishments.
Booking agencies for actors and concert artists.
Bottling and bottling equipment and canning
machinery; establishments engaged in the
business of dealing in.
Broadcasting companies.
Brokers, custom house; freight brokers; insurance brokers, stock or commodity brokers.
Building and loan associations.
Building contractors.
Burglar alarms; establishments engaged in
furnishing, installing and repairing for
commercial establishments (Walling v.
Thompson, 65 F. Supp. 686 (S.D. Calif.)).
Burial associations (Gilreath v. Daniel (C.A.
8), 19 WH Cases 370).
Butchers’ equipment; establishments engaged in the business of dealing in.
Chambers of Commerce.
Chemical equipment; establishments engaged in the business of dealing in.
Clubs and fraternal organizations with a select or restricted membership.
Common and contract carriers; establishments engaged in providing services, fuel,
equipment, or other goods or facilities for
the operation of such carriers (Idaho Sheet
Metal Works v. Wirtz, 383 U.S. 190, rehearing
denied 383 U.S. 963; Wirtz v. Steepleton General Tire Co., Inc. 383 U.S. 190, rehearing denied 383 U.S. 963; Boutell v. Whaling).
Common carrier stations and terminals.
Construction contractors.
Contract Post Offices.
Credit companies, including small loan and
personal loan companies (Mitchell v. Kentucky Finance Co., 359 U.S. 290).
Credit rating agencies.
Dentists’ offices.
Dentists supply and equipment establishments.
Detective agencies.
Doctors’ offices.
Dry cleaners (see 95 Cong. Rec., p. 12503 and
§ 779.337 (b) of this part).
Drydock companies.
Drydock
Dye houses, commercial (Walling v. Kerr, 47
F. Supp. 852 (E.D. Pa)).
Duplicating, addressing, mailing, mail listings, and letter stuffing establishments
(Goldberg v. Roberts d.b.a. Typing and Mailing Unlimited, 15 WH Cases 100, 42 L.C. par.
31,126 (CA–9; Durkin v. Shone, 112 F. Supp.
375 (E.D. Tenn.); Hanzley v. Hooven Letters,
44 N.Y.S. 2d 398 (City Ct. N.Y. 1943).
516
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Wage and Hour Division, Labor
§ 779.317
Educational institutions (for express exclusion see § 779.337(b)).
Electric and gas utilities (Meeker Cooperative
Light & Power Assn. v. Phillips, 158 F. 2d 698
(CA–8); New Mexico Public Service Co. v.
Engel, 145 F. 2d 636 (CA–10); Brown v.
Minngas Co., 51 F. Supp. 363 (D. Minn.)).
Electric signs; establishments engaged in
making, installing and servicing.
Elevators; establishments engaged in repairing (Cf. Muldowney v. Seaberg Elevator Co.,
39 F. Supp. 275 (E.D.N.Y.)).
Employment Agencies (Yunker v. Abbye Employment Agency, Inc., 32 N.Y.S. 2d 715
(N.Y.C. Munic. Ct. 1942)).
Engineering firms.
Factors.
Filling station equipment; establishments
engaged in the business of dealing in.
Finance companies (Mitchell v. Kentucky Finance Co., 359 U.S. 290).
Flying schools.
Gambling establishments.
Geological surveys; firms engaged in making.
Heating and air conditioning systems contractors.
Hospital equipment (such as operating instruments, X-ray machines, operating tables, etc.); establishments engaged in the
business of dealing in.
Insurance; mutual, stock and fraternal benefit, including insurance brokers, agents,
and claims adjustment offices.
Income tax return preparers.
Investment counseling firms.
Jewelers’ equipment; establishments engaged in the business of dealing in.
Job efficiency checking and rating; establishments engaged in the business of supplying.
Labor unions.
Laboratory equipment; establishments engaged in the business of dealing in.
Landscaping contractors.
Laundries (see 95 Cong. Rec. p. 12503 and
§ 779.337 (b) of this part).
Laundry; establishments engaged in the
business of dealing in commercial laundry
equipment.
Lawyers’ offices.
Legal concerns engaged in compiling and distributing information regarding legal developments.
License and legal document service firms.
Loan offices (see credit companies).
Loft buildings or office buildings, concerns
engaged in renting and maintenance of
(Kirschbaum v. Walling, 316 U.S. 517; Statement of Senator Holland, 95 Cong. Rec., p.
12505).
Machinery and equipment, including tools—
establishments engaged in selling or servicing of construction, mining, manufacturing and industrial machinery, equipment and tools (Roland Electric Co. v.
Walling, 326 U.S. 657; Guess v. Montaque, 140
F. 2d 500 (CA–4); cf. Walling v. Thompson, 65
F. Supp. 686 (S.D. Calif.)).
Magazine subscription agencies (Wirtz v.
Keystone Serv. (C.A. 5), 418 F. 2d 249).
Medical and dental clinics.
Medical and dental laboratories.
Medical and dental laboratory supplies; establishments engaged in the business of
dealing in.
Messenger; firms engaged in furnishing commercial messenger service (Walling v. Allied
Messenger
Service,
47
F.
Supp.
773
(S.D.N.Y.)).
Newspaper and magazine publishers.
Oil well drilling; companies engaged in contract oil well drilling.
Oil well surveying firms (Straughn v.
Schlumberger Well Surveying Corp., 72 F.
Supp. 511 (S.D. Tex.)).
Packing companies engaged in slaughtering
livestock (Walling v. Peoples Packing Co.,
132 F. 2d 236 (CA–10)).
Painting contractors.
Pharmacists’ supplies; establishments engaged in the business of dealing in.
Photography, commercial, establishments
engaged in.
Plumbers’ equipment; establishments engaged in the business of dealing in.
Plumbing contractors.
Press clipping bureaus.
Printers’ and lithographers’ supplies; establishments engaged in the business of dealing in.
Printing and binding establishments (Casa
Baldridge, Inc. v. Mitchell, 214 F. 2d 703 (CA–
1)).
Protection and Shopping services for industry; establishments engaged in supplying
(Durkin v. Joyce Agency, Inc., 110 F. Supp.
918 (N.D. Ill.) affirmed sub nom. Mitchell v.
Joyce Agency, Inc., 348 U.S. 945).
Quarris (Walling v. Partee, 3 WH Cases 543, 7
Labor Cases, par. 61,721 (M.D. Tenn.)).
Radio and television broadcasting stations
and studios.
Ready-mix concrete suppliers.
Real estate companies.
Roofing contractors.
Schools (except schools for mentally or physically handicapped or gifted children): (All
now excluded, see § 779.337(b)).
School supply distributors.
Security dealers.
Sheet metal contractors.
Ship equipment, commercial; establishments
engaged in the business of dealing in.
Shopping analysts services.
Siding and insulation contractors.
Sign-painting shops.
Special trade contractors (construction industry).
Stamp and coupon redemption stores.
Statistical reporting, business and financial
data; establishments engaged in furnishing.
517
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§ 779.318
29 CFR Ch. V (7–1–19 Edition)
Store equipment; establishments engaged in
the business of dealing in.
Tax services.
Telegraph and cable companies.
Telephone companies; (Schmidt v. Peoples
Telephone Union of Maryville, Mo., 138 F. 2d
13 (CA–8)).
Telephone answer service; establishments
engaged in furnishing. (Telephone Answering Service v. Goldberg, 15 WH Cases 67, 4
L.C. par. 31,104 (CA–1)).
Title and abstract companies.
Tobacco auction warehouses (Fleming v. Kenton Loose Leaf Tobacco Warehouse Co., 41 F.
Supp. 255 (E.D. Ky.); Walling v. Lincoln
Loose Leaf Warehouse Co., 59 F. Supp. 601
(E.D. Tenn.)).
Toll bridge companies.
Trade associations.
Transportation equipment, commercial; establishments engaged in the business of
dealing in.
Transportation companies.
Travel agencies.
Tree removal firms.
Truck stop establishments (Idaho Sheet Metal
Works, Inc., v. Wirtz, 383 U.S. 190, rehearing
denied 383 U.S. 963; Wirtz v. Steepleton General Tire Co., Inc., 383 U.S. 190, rehearing denied 383 U.S. 963).
Trust companies.
Undertakers’ supplies; establishments engaged in the business of dealing in.
Wagers, establishments accepting, as business in which they are engaged.
Warehouse companies; commercial or industrial (Walling v. Public Quick Freezing and
Cold Storage Co., 62 F. Supp. 924 (S.D. Fla.)).
Warehouses equipment and supplies; establishments engaged in the business of dealing in.
Waste removal contractors.
Watchmen, guards and detectives for industries; establishments engaged in supplying
(Walling v. Sondock, 132 F. 2d 77 (CA–5);
Walling v. Wattam, 3 WH Cases 726, 8 Labor
Cases, par. 62,023 (W.D. Tenn., 1943); Walling
v. Lum, 4 WH Cases 465, 8 Labor Cases, par.
62,185 (S.D. Miss., 1944); Walling v. New Orleans Private Patrol Service 57 F. Supp. 143
(E.D. La., 1944); Haley v. Central Watch Service, 4 WH Cases 158, 8 Labor Cases, par.
62,002 (N.D. Ill., 1944)).
Water supply companies (Reynolds v. Salt
River Valley Water Users Assn., 143 F. 2d (863
(CA–9).)
Water well drilling contractors.
Window displays; establishments engaged in
the business of dealing in.
Wrecking contractors.
§ 779.318 Characteristics and examples
of retail or service establishments.
(a) Typically a retail or service establishment is one which sells goods or
services to the general public. It serves
the everyday needs of the community
in which it is located. The retail or
service establishment performs a function in the business organization of the
Nation which is at the very end of the
stream of distribution, disposing in
small quantities of the products and
skills of such organization and does not
take part in the manufacturing process. (See, however, the discussion of
section 13(a)(4) in §§ 779.346 to 779.350.)
Such an establishment sells to the general public its food and drink. It sells
to such public its clothing and its furniture, its automobiles, its radios and
refrigerators, its coal and its lumber,
and other goods, and performs incidental services on such goods when
necessary. It provides the general public its repair services and other services for the comfort and convenience of
such public in the course of its daily
living. Illustrative of such establishments are: Grocery stores, hardware
stores, clothing stores, coal dealers,
furniture stores, restaurants, hotels,
watch repair establishments, barber
shops, and other such local establishments.
(b) The legislative history of the section 13(a)(2) exemption for certain retail or service establishments shows
that Congress also intended that the
retail exemption extend in some measure beyond consumer goods and services to embrace certain products almost never purchased for family or
noncommercial use. A precise line between such articles and those which
can never be sold at retail cannot be
drawn. But a few characteristics of
items like small trucks and farm implements may offer some guidance;
their use is very widespread as is that
of consumer goods; they are often distributed in stores or showrooms by
means not dissimilar to those used for
consumer goods; and they are frequently used in commercial activities
of limited scope. The list of strictly
commercial items whose sale can be
deemed retail is very small and a determination as to the application of
the retail exemption in specific cases
would depend upon the consideration of
all the circumstances relevant to the
situation. (Idaho Sheet Metal Works,
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Wage and Hour Division, Labor
§ 779.321
Inc. v. Wirtz and Wirtz v. Steepleton General Tire Company, Inc., 383 U.S. 190, 202,
rehearing denied 383 U.S. 963.)
[35 FR 5856, Apr. 9, 1970, as amended at 36 FR
14466, Aug. 6, 1971]
§ 779.319 A retail or service establishment must be open to general public.
The location of the retail or service
establishment, whether in an industrial plant, an office building, a railroad depot, or a government park, etc.,
will make no difference in the application of the exemption and such an establishment will be exempt if it meets
the tests of the exemption. Generally,
however, an establishment, wherever
located, will not be considered a retail
or service establishment within the
meaning of the Act, if it is not ordinarily available to the general consuming public. An establishment, however, does not have to be actually frequented by the general public in the
sense that the public must actually
visit it and make purchases of goods or
services on the premises in order to be
considered as available and open to the
general public. A refrigerator repair
service shop, for example, is available
and open to the general public even if
it receives all its orders on the telephone and performs all of its repair
services on the premises of its customers.
§ 779.320 Partial list of establishments
whose sales or service may be recognized as retail.
Antique shops.
Auto courts.
Automobile dealers’ establishments.
Automobile laundries.
Automobile repair shops.
Barber shops.
Beauty shops.
Bicycle shops.
Billiard parlors.
Book stores.
Bowling alleys.
Butcher shops.
Cafeterias.
Cemeteries.
China, glassware stores.
Cigar stores.
Clothing stores.
Coal yards.
Confectionery stores.
Crematories.
Dance halls.
Delicatessen stores.
Department stores.
Drapery stores.
Dress-suit rental establishments.
Drug stores.
Dry goods stores.
Embalming establishments.
Farm implement dealers.
Filling stations.
Floor covering stores.
Florists.
Funeral homes.
Fur repair and storage shops.
Fur shops.
Furniture stores.
Gift, novelty and souvenir shops.
Grocery stores.
Hardware stores.
Hosiery shops.
Hotels.
Household appliance stores.
Household furniture storage and moving establishments.
Household refrigerator service and repair
shops.
Infants’ wear shops.
Jewelry stores.
Liquor stores.
Luggage stores.
Lumber yards.
Masseur establishments.
Millinery shops.
Musical instrument stores and repair shops.
Newsstands.
Paint stores.
Public parking lots.
Photographic supply and camera shops.
Piano tuning establishments.
Public baths.
Public garages.
Recreational camps.
Reducing establishments.
Restaurants.
Roadside diners.
Scalp-treatment establishments.
Shoe repair shops.
Shoeshine parlors.
Sporting goods stores.
Stationery stores.
Taxidermists.
Theatres.
Tourist homes.
Trailer camps.
Undertakers.
Variety shops.
Watch, clock and jewelry repair establishments.
[36 FR 14466, Aug. 6, 1971]
§ 779.321 Inapplicability of ‘‘retail concept’’ to some types of sales or services of an eligible establishment.
(a) Only those sales or services to
which the retail concept applies may
be recognized as retail sales of goods or
services for purposes of the exemption.
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§ 779.321
29 CFR Ch. V (7–1–19 Edition)
The fact that the particular establishment
may
have
a
concept
of
retailability, in that it makes sales of
types which may be recognized as retail, is not determinative unless the
requisite portion of its annual dollar
volume is derived from particular sales
of its goods and services which have a
concept of retailability. Thus, the mere
fact that an establishment is of a type
noted in § 779.320 does not mean that
any particular sales of such establishment are within the retail concept. As
to each particular sale of goods or services, an initial question that must be
answered is whether the sales of goods
or services of the particular type involved can ever be recognized as retail.
The Supreme Court in Wirtz v.
Steepleton General Tire Co., 383 U.S. 190,
confirmed the Department’s position
that (1) The concept of ‘‘retailability’’
must apply to particular sales of the
establishment, as well as the establishment or business as a whole, and (2)
even as to the establishment whose
sales are ‘‘variegated’’ and include retail sales, that nonetheless classification of particular sales of goods or
services as ever coming within the concept of retailability must be made.
Sales of some particular types of goods
or services may be decisively classified
as nonretail on the ground that such
particular types of goods or services
cannot ever qualify as retail whatever
the terms of sale, regardless of the industry usage or classification.
(b) An establishment is, therefore,
not automatically exempt upon a finding that it is of the type to which the
retail concept of selling or servicing is
applicable; it must meet all the tests
specified in the Act in order to qualify
for exemption. Thus, for example, an
establishment may be engaged in repairing household refrigerators, and in
addition it may be selling and repairing manufacturing machinery for manufacturing establishments. The retail
concept does not apply to the latter activities. In such case, the exemption
will not apply if the annual dollar volume derived from the selling and servicing of such machinery, and from any
other sales and services which are not
recognized as retail sales or services,
and from sales of goods or services for
resale exceeds 25 percent of the estab-
lishment’s total annual dollar volume
of sales of goods or services.
(c) Since there is no retail concept in
the construction industry, gross receipts from construction activities of
any establishment also engaged in retail selling must be counted as dollar
volume from sales not recognized as retail in applying the percentage tests of
section 13(a)(2). Also, since construction and the distribution of goods are
entirely dissimilar activities performed
in industries traditionally recognized
as wholly separate and distinct from
each other, an employee engaged in
construction activities is not employed
within the scope of his employer’s otherwise exempt retail business in any
week in which the employee engages in
such construction work, and is therefore (see § 779.308) not employed ‘‘by’’ a
retail or service establishment within
the meaning of the Act in such workweek.
(d) Certain business establishments
engage in the retail sale to the general
public, as goods delivered to purchasers
at a stipulated price, of items such as
certain plumbing and heating equipment, electrical fixtures and supplies,
and fencing and siding for residential
installation. In addition to selling the
goods they may also install, at an additional charge, the goods which are sold.
Installation which is incidental to a retail sale (as distinguished from a construction or reconstruction contract to
do a building alteration, or repair job
at a contract price for materials and
labor required, see § 779.355(a)(1) is considered an exempt activity. By way of
example, if the installation for the customer of such goods sold to him at retail requires only minor carpentry,
plumbing or electrical work (as may be
the case where ordinary plumbing fixtures, or household items such as
stoves, garbage disposals, attic fans, or
window air conditioners are being installed or replaced), or where only
labor of the type required for the usual
installation of chain link fences around
a home or small business establishment is involved, will normally be considered as incidental to the retail sale
of the goods involved (unless, of course,
the transaction between the parties is
for a construction job at an overall
price for the job, involving no retail
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Wage and Hour Division, Labor
§ 779.324
sale of goods as such). In determining
whether such an installation is incidental to a retail sale or constitutes a
nonretail construction activity, it is
necessary to consider the general characteristics of the entire transaction.
Where one or more of the following
conditions are present, the installation
will normally be considered a construction activity rather than incidental to
a retail sale:
(1) The cost to the purchaser of the
installation in relation to the sale
price of the goods is substantial;
(2) The installation involves substantial structural changes, extensive
labor, planning or the use of specialized
equipment;
(3) The goods are being installed in
conjunction with the construction of a
new home or other structure; or
(4) The goods installed are of a specialized type which the general consuming public does not ordinarily have
occasion to use.
(e) An auxiliary employee of an exempt retail or service establishment
performing clerical, maintenance, or
custodial work in the exempt establishment which is related to the establishment’s construction activities will, for
enforcement purposes, be considered
exempt in any workweek if no more
than 20 percent of his time is spent in
such work.
‘‘RECOGNIZED’’ AS RETAIL ‘‘IN THE
PARTICULAR INDUSTRY’’
§ 779.322 Second
requirement
for
qualifying as a ‘‘retail or service establishment.’’
If the business is one to which the retail concept is applicable then the second requirement for qualifying as a
‘‘retail or service establishment’’ within that term’s statutory definition is
that 75 percent of the establishment’s
annual dollar volume must be derived
from sales of goods or services (or of
both) which are recognized as retail
sales or services in the particular industry. Under the Act, this requirement is distinct from the requirement
that 75 percent of annual dollar volume
be from sales of goods or services ‘‘not
for resale’’ (§ 779.329); many sales which
are not for resale lack a retail concept
and the fact that a sale is not for resale
cannot establish that it is recognized
as retail in a particular industry. (See
Wirtz v. Steepleton General Tire Co., 383
U.S. 190.) To determine whether the
sales or services of an establishment
are recognized as retail sales or services in the particular industry, we
must inquire into what is meant by the
terms ‘‘recognized’’ and ‘‘in the particular industry,’’ and into the functions of the Secretary and the courts in
determining whether the sales are recognized as retail in the industry.
§ 779.323 Particular industry.
In order to determine whether a sale
or service is recognized as a retail sale
or service in the ‘‘particular industry’’
it is necessary to identify the ‘‘particular’’ industry to which the sale or
service belongs. Some situations are
clear and present no difficulty. The
sale of clothes, for example, belongs to
the clothing industry and the sale of
ice belongs to the ice industry. In other
situations, a sale or service is not so
easily earmarked and a wide area of
overlapping exists. Household appliances are sold by public utilities as
well as by department stores and by
stores specializing in the sale of such
goods; and tires are sold by manufacturers’ outlets, by independent tire
dealers and by other types of outlets.
In these cases, a fair determination as
to whether a sale or service is recognized as retail in the ‘‘particular’’ industry may be made by giving to the
term ‘‘industry’’ its broad statutory
definition as a ‘‘group of industries’’
and thus including all industries
wherein a significant quantity of the
particular product or service is sold.
For example, in determining whether a
sale of lumber is a retail sale, it is the
recognition the sale of lumber occupies
in the lumber industry generally which
decides its character rather than the
recognition such sales occupies in any
branch of that industry.
§ 779.324 Recognition ‘‘in.’’
The express terms of the statutory
provision requires the ‘‘recognition’’ to
be ‘‘in’’ the industry and not ‘‘by’’ the
industry. Thus, the basis for the determination as to what is recognized as
retail ‘‘in the particular industry’’ is
wider and greater than the views of an
employer in a trade or business, or an
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§ 779.325
29 CFR Ch. V (7–1–19 Edition)
association of such employers. It is
clear from the legislative history and
judicial pronouncements that it was
not the intent of this provision to delegate to employers in any particular industry the power to exempt themselves
from the requirements of the Act. It
was emphasized in the debates in Congress that while the views of an industry are significant and material in determining what is recognized as a retail sale in a particular industry, the
determination is not dependent on
those views alone. (See 95 Cong. Rec.
pp. 12501, 12502, and 12510; Wirtz v.
Steepleton General Tire Co., 383 U.S. 190;
Mitchell v. City Ice Co., 273 F. 2d 560
(CA–5); Durkin v. Casa Baldrich, Inc., 111
F. Supp. 71 (DCPR) affirmed 214 F. 2d
703 (CA–1); see also Aetna Finance Co. v.
Mitchell, 247 F. 2d 190 (CA–1).) Such a
determination must take into consideration the well-settled habits of business, traditional understanding and
common knowledge. These involve the
understanding and knowledge of the
purchaser as well as the seller, the
wholesaler as well as the retailer, the
employee as well as the employer, and
private and governmental research and
statistical organizations. The understanding of all these and others who
have knowledge of recognized classifications in an industry, would all be
relevant in the determination of the
question.
§ 779.325 Functions of the Secretary
and the courts.
It may be necessary for the Secretary
in the performance of his duties under
the Act, to determine in some instances whether a sale or service is recognized as a retail sale or particular industry. In the exceptional case where
the determination cannot be made on
the basis of common knowledge or
readily accessible information, the
Secretary may gather the information
needed for the purpose of making such
determinations. Available information
on usage and practice in the industry is
carefully considered in making such
determinations, but the ‘‘word-usage of
the industry’’ does not have controlling force; the Secretary ‘‘cannot be
hamstrung by the terminology of a
particular trade’’ and possesses considerable discretion as the one responsible
for the actual administration of the
Act. (Wirtz v. Steepleton General Tire
Co., 383 U.S. 190; and see 95 Cong. Rec.
12501–12502, 12510.) The responsibility
for making final decisions, of course,
rests with the courts. An employer disagreeing with the determinations of
the Secretary and claiming exemption
has the burden of proving in a court
proceeding that the prescribed percentage of the establishment’s sales or
services are recognized as retail in the
industry and that his establishment
qualifies for the exemption claimed by
him. (See Wirtz v. Steepleton, cited
above, and 95 Cong. Rec. 12510.)
§ 779.326 Sources of information.
In determining whether a sale or
service is recognized as a retail sale or
service in a particular industry, there
are available to the Secretary a number of sources of information to aid
him in arriving at a conclusion. These
sources include: (a) The legislative history of the Act as originally enacted in
1938 and the legislative history of the
1949, 1961, and 1966 amendments to the
Act pertaining to those sections in
which the term ‘‘retail or service establishment’’ is found, particularly in
the section 13(a)(2) exemption; (b) the
decisions of the courts during the intervening years; and (c) the Secretary’s
experience in the intervening years in
interpreting and administering the
Act. These sources of information enable the Secretary to lay down certain
standards and criteria, as discussed in
this subpart, for determining generally
and in some cases specifically what
sales or services are recognized as retail sales or services in particular industries.
§ 779.327 Wholesale sales.
A wholesale sale, of course, is not
recognized as a retail sale. If an establishment derives more than 25 percent
of its annual dollar volume from sales
made at wholesale, it clearly cannot
qualify as a retail and service establishment. It must be remembered, however, that what is a retail sale for purposes of a sales tax law is not necessarily a retail sale for purposes of the
statutory definition of the term ‘‘retail
or service establishment’’. Similarly, a
showing that sales of goods or services
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Wage and Hour Division, Labor
§ 779.328
are not wholesale or are made to the
ultimate consumer and are not for resale does not necessarily prove that
such sales or services are recognized in
the particular industry as retail. (Wirtz
v. Steepleton General Tire Co., 388 U.S.
190.)
§ 779.328 Retail and wholesale distinguished.
(a) The distinction between a retail
sale and a wholesale sale is one of fact.
Typically, retail sales are made to the
general consuming public. The sales
are numerous and involve small quantities of goods or services. Wholesale
establishments usually exclude the
general consuming public as a matter
of established business policy and confine their sales to other wholesalers,
retailers, and industrial or business
purchasers in quantities greater than
are normally sold to the general consuming public at retail. What constitutes a small quantity of goods depends, of course, upon the facts in the
particular case and the quantity will
vary with different commodities and in
different trades and industries. Thus, a
different quantity would be characteristic of retail sales of canned tomato juice, bed sheets, furniture, coal,
etc. The quantity test is a well-recognized business concept. There are reasonably definite limits as to the quantity of a particular commodity which
the general consuming public regularly
purchases at any given time at retail
and businessmen are aware of these
buying habits. These buying habits set
the standard for the quantity of goods
which is recognized in an industry as
the subject of a retail sale. Quantities
which are materially in excess of such
a standard are generally regarded as
wholesale and not retail quantities.
(b) The sale of goods or services in a
quantity approximating the quantity
involved in a normal wholesale transaction and as to which a special discount from the normal retail price is
given is generally regarded as a wholesale sale in most industries. Whether
the sale of such a quantity must always involve a discount in order to be
considered a wholesale sale depends
upon industry practice. If the practice
in a particular industry is such that a
discount from the normal retail price
is not regarded in the industry as significant in determining whether the
sale of a certain quantity is a wholesale sale, then the question of whether
the sale of such a quantity will be considered a wholesale sale would be determined without reference to the
price. In some industries, the sale of a
small quantity at a discount may also
be regarded as a wholesale sale, in
which case it will be so treated for purposes of the exemption. Generally, as
the Supreme Court has recognized
(Wirtz v. Steepleton General Tire Co., 383
U.S. 1900), both the legislative history
and common parlance suggest that
‘‘the term retail becomes less apt as
the quantity and the price discount increases in a particular transaction.’’
(c) In some cases, a purchaser contracts for the purchase of a large quantity of goods or services to be delivered
or performed in smaller quantities or
jobs from time to time as the occasion
requires. In other cases, the purchaser
instead of entering into a single contract for the entire amount of goods, or
services, receives a series of regular deliveries of performances pursuant to a
quotation, bid, estimate, or general
business
arrangement
or
understanding. In these situations, if the
total quantity of goods or services
which is sold is materially in excess of
the total quantity of goods or services
which might reasonably be purchased
by a member of the general consuming
public during the same period, it will
be treated as a wholesale quantity for
purposes of the statutory definition of
the term ‘‘retail or service establishment’’, in the absence of clear evidence
that under such circumstances such a
quantity is recognized as a retail quantity in the particular industry. For example, if a food service firm contracts
with a college to provide meals for the
latter’s boarding students for a term,
in consideration of payment by the college of a stipulated sum based on the
number of students registered or provided with meals, the services are
being sold in a wholesale, rather than a
retail quantity. If such a contract is
entered into as a result of formal bids,
as noted in paragraph (d) of this section, this would be an additional reason for nonrecognition of the transaction as a retail sale of such services.
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§ 779.329
29 CFR Ch. V (7–1–19 Edition)
(d) Sales made pursuant to formal bid
procedures, such as those utilized by
the agencies of Federal, State, and
local governments and oftentimes by
commercial and industrial concerns involving the issuance by the buyer of a
formal invitation to bid on certain
merchandise or services for delivery in
accordance with prescribed terms and
specifications, are not recognized as retail sales.
§ 779.329 Effect of type of customer
and type of goods or services.
In some industries the type of goods
or services sold or the type of purchaser of goods or services are determining factors in whether a sale or
service is recognized as retail in the
particular industry. In other industries
a sale or service may be recognized as
retail regardless of the type of goods or
services sold or the type of customer.
Where a sale is recognized as retail regardless of the type of customer, its
character as such will not be affected
by the character of the customer, with
reference to whether he is a private individual or a business concern, or by
the use the purchaser makes of the
purchased commodity. For example, if
the sale of a single automobile to anyone for any purpose is recognized as a
retail sale in the industry, it will be
considered as a retail sale for purposes
of the exemption whether the customer
be a private individual or an industrial
concern or whether the automobile is
used by the purchaser for pleasure purposes or for business purposes. If a sale
of a particular quantity of coal is recognized in the industry as a retail sale,
its character as such will not be affected by the fact that it is sold for the
purpose of heating an office building as
distinguished from a private dwelling.
If the repair of a wash basin is recognized in the industry as a retail service, its character as such will not be affected by the fact that it is a wash
basin in a factory building as distinguished from a wash basin in a private
dwelling house. It must be remembered
that these principles apply only to
those sales of goods or services which
have a retail concept, that is, where
the subject matter is ‘‘retailable.’’ See
§ 779.321. The ‘‘industry-recognition’’
question as to whether such sales are
recognized as retail in the industry has
no relevancy if in fact the goods and
services sold are not of a ‘‘retailable’’
character, as previously explained. If
the subject of the sale does not come
within the concept of retailable items
contemplated by the statute, there can
be no recognition in any industry of
the sale of the goods or services as retail, for purposes of the Act, even
though the nomenclature used by the
industry members may put a retail
label on the transaction. (See Wirtz v.
Steepleton General Tire Co., 383 U.S. 190;
Mitchell v. Kentucky Finance Co., 359
U.S. 290.)
SALES NOT MADE FOR RESALE
§ 779.330 Third requirement for qualifying as a ‘‘retail or service establishment.’’
The third requirement for qualifying
as a ‘‘retail or service establishment’’
within that term’s statutory definition
is that 75 percent of the retail or service establishment’s annual dollar volume must be from sales of goods or of
services (or of both) which are not
made for resale. At least three-fourths
of the total sales of goods or services
(or of both) (measured by annual dollar
volume) must not be made for resale.
Except under the special provision in
section 3(n) of the Act, discussed in
§ 779.335, the requirement that 75 percent of the establishment’s dollar volume be from sales of goods or services
‘‘not for resale’’ is a separate test and
a sale which ‘‘for resale’’ cannot be
counted toward the required 75 percent
even if it is recognized as retail in the
particular industry. The prescribed 75
percent must be from sales which are
both not for resale and recognized as
retail.
§ 779.331
Meaning of sales ‘‘for resale.’’
Except with respect to a specific situation regarding certain building materials, the word ‘‘resale’’ is not defined
in the Act. The common meaning of
‘‘resale’’ is the act of ‘‘selling again.’’
A sale is made for resale where the seller knows or has reasonable cause to believe that the goods or services will be
resold, whether in their original form,
or in an altered form, or as a part,
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Wage and Hour Division, Labor
§ 779.334
component or ingredient of another article. Where the goods or services are
sold for resale, it does not matter what
ultimately happens to such goods or
services. Thus, the fact that the goods
are consumed by fire or no market is
found for them, and are, therefore,
never resold does not alter the character of the sale which is made for resale. Similarly, if at the time the sale
is made, the seller has no knowledge or
reasonable cause to believe that the
goods are purchased for the purpose of
resale, the fact that the goods later are
actually resold is not controlling. In
considering whether there is a sale of
goods or services and whether such
goods or services are sold for resale in
any specific situation, the term ‘‘sale’’
includes, as defined in section 3(k) of
the Act, ‘‘any sale, exchange, contract
to sell, consignment for sale, shipment
for sale, or other disposition.’’ Thus,
under the definition sales by an establishment to a competitor are regarded
as sales for resale even though made
without profit. (Northwestern-Hanna
Fuel Co. v. McComb, 166 F. 2d 932 (CA–
8).) Similarly, sales for distribution by
the purchaser for business purposes are
sales for resale under the ‘‘other disposition’’ language of the definition of
‘‘sale’’ even though distributed at no
cost to the ultimate recipient. (See
Mitchell v. Duplicate Photo Service, 13
WH Cases 71, 31 L.C. Par. 70,287 (S.D.
Cal. 1956) accord, Mitchell v. Sherry
Corine Corporation, 264 F. 2d 831 (CA–4)
(sale of meals to airlines for distribution to their passengers).) It should be
noted, however, that occasional transfer of goods from the stock of one retail or service establishment to relieve
a shortage in another such establishment under the same ownership will
not be considered as sales for resale.
§ 779.332 Resale of goods in an altered
form or as parts or ingredients of
other goods or services.
Sale for resale includes the sale of
goods which will be resold in their
original form, in an altered form, or as
a part or ingredient of another article.
A sale of goods which the seller knows,
or has reasonable cause to believe, will
be resold after processing or manufacture is a sale for resale. Thus, sales of
parts with the expectation that they
will be incorporated in aircraft and
that the aircraft will be sold clearly
are sales for resale. (Arnold v. Ben
Kanowsky, Inc., 361 U.S. 388.) Similarly,
the sale of lumber to furniture or box
factories, or the sale of textiles to
clothing manufacturers, is a sale for
resale even though the goods are resold
in the form of furniture or clothing.
The principle is also illustrated in
cases where the article sold becomes a
part or an ingredient of another, such
as scrap metal in steel, dyes in fabrics,
flour in bread and pastries, and salt in
food or ice in beverages. (Mitchell v.
Douglas Auto Parts Co., 11 WH Cases 807,
25 L.C. Par. 68, 119 (N.D. Ill., 1954).) The
fact that goods sold will be resold as a
part of a service in which they are used
or as a part of a building into which
they are incorporated does not negate
the character of the sale as one ‘‘for resale.’’ (Mitchell v. Furman Beauty Supply, 300 F. 2d 16 (CA–3); Mayol v. Mitchell, 280 F. 2d 477 (CA–1), cert. denied 364
U.S. 902; Goldberg v. Kleban Eng. Corp.,
303 F. 2d 855 (CA–5).)
§ 779.333 Goods sold for use as raw
materials in other products.
Goods are sold for resale where they
are sold for use as a raw material in
the production of a specific product to
be sold, such as sales of coal for the
production of coke, coal gas, or electricity, or sales of liquefied-petroleumgas for the production of chemicals or
synthetic rubber. However, the goods
are not considered sold for resale if
sold for general industrial or commercial uses, such as coal for use in laundries, bakeries, nurseries, canneries, or
for space heating, or ice for use by grocery stores or meat markets in cooling
and preserving groceries and meat to
be sold. Similarly, ice used for cooling
soft drinks while in storage will not be
considered sold for resale. On the other
hand, ice or ice cubes sold for serving
soft drinks or other beverages will be
considered as sales for resale.
§ 779.334 Sales of services for resale.
The same principles apply in the case
of sales of services for resale. A sale of
services where the seller knows or has
reasonable cause to believe will be resold is a sale for resale. Where, for example, an establishment reconditions
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§ 779.335
29 CFR Ch. V (7–1–19 Edition)
and repairs watches for retail jewelers
who resell the services to their own
customers, the services constitute a
sale for resale. Where a garage repairs
automobiles for a secondhand automobile dealer with the knowledge or
reasonable cause to believe that the
automobile on which the work is performed will be sold, the service performed by the garage is a sale for resale. The services performed by a dental laboratory in the making of artificial teeth for the dentist for the use of
his patients is a sale of services (as
well as of goods) for resale. The services of a fur repair and storage establishment performed for other establishments who sell these services to their
own customers, constitute sales for resale. As in the case of the sale of goods,
in certain circumstances, sales of services to a business for a specific use in
performing a different service which
such business renders to its own customers are in economic effect sales for
resale as a part of the service that the
purchaser in turn sells to his customers, even though such services are
consumed in the process of performance of the latter service. For example,
if a storage establishment uses mothproofing services in order to render satisfactory storage services for its customers, the sale of such mothproofing
services to that storage establishment
will be considered a sale for resale.
§ 779.335 Sales of building materials
for residential or farm building construction.
Section 3(n) of the Act, as amended,
excludes from the category of sales for
resale ‘‘the sale of goods to be used in
residential or farm building construction, repair or maintenance: Provided,
That the sale is recognized as a bona
fide retail sale in the industry.’’ Under
this section a sale of building materials to a building contractor or a
builder for use in residential or farm
building, repair or maintenance is not
a sale for resale, provided, the sale is
otherwise recognized as a bona fide retail sale in the industry. If the sale is
not so recognized it will be considered
a sale for resale. Thus, only bona fide
retail sales of building materials to a
building contractor or a builder for the
uses described would be taken out of
the category of sales for resale. (Sucrs.
De A. Mayol & Co. v. Mitchell, 280 F. 2d
477 (CA–1); Elder v. Phillips & Buttroff
Mfg. Co., 23 L.C. Par. 67,524 (Tenn.,
1958).) The legislative history of the
amendment indicates that it is not the
intent of its sponsors to remove from
the category of sales for resale such
sales, for example, as sales of lumber to
a contractor to build a whole residential subdivision. (See 95 Cong. Rec.
12533–12535; Sen. St. ibid; 14877.)
§ 779.336 Sales of building materials
for commercial property construction.
Sales of building materials to a contractor or speculative builder for the
construction, maintenance or repair of
commercial property or any other
property not excepted in section 3(n) of
the Act, as explained above, will be
considered as sales for resale. (See
§§ 779.332 and 779.335.) Some employers
who are dealers in building materials
are also engaged in the business of
building contractors or speculative
builders. Building materials for the
carrying on of the employer’s contracting or speculative building business often are supplied by the employer
himself from or through his building
materials establishment. In the analysis of the sales of the building materials establishment for the purpose of
determining the qualification of such
establishment as a ‘‘retail or service
establishment’’ all transfers of stock
made by the employer from or through
his building materials establishment to
his building business for the construction, maintenance or repair of commercial property or any other property not
excepted in section 3 (n) of the Act will
be considered as sales made by such establishment for resale.
GENERAL TESTS OF EXEMPTION UNDER
SECTION 13(a)(2)
§ 779.337 Requirements of exemption
summarized.
(a) An establishment which is a ‘‘retail or service establishment’’ within
the Act’s statutory definition of that
term (See discussion in §§ 779.312 to
779.336) must, to qualify as an exempt
retail or service establishment under
section 13(a)(2) of the Act (See
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Wage and Hour Division, Labor
§ 779.338
§ 779.301), meet both of the following
tests:
(1) More than 50 percent of the retail
or service establishment’s total annual
dollar volume of sales must be derived
from sales of goods or services (or both)
which are made within the State in
which the establishment is located; and
(2) Either:
(i) The retail or service establishment must not be in an enterprise of
the type described in section 3(s), or
(ii) If the retail or service establishment is in an enterprise of the type described in 3(s), it has an annual volume
of sales (exclusive of excise taxes at
the retail level which are separately
stated) of less than $250,000.
(b) The language of the statute in
section 13(a)(2) expressly excludes from
the exemption an establishment or employee engaged in laundering, cleaning,
or repairing clothing or fabrics or an
establishment engaged in the operation
of a hospital, institution, or school described in section 3(s)(4) of the Act. No
exemption for these is provided under
this section even if the establishment
meets the tests set forth in paragraph
(a) of this section. (See § 779.338(b).)
With respect to laundering and drycleaning establishments, which Congress found to lack a retail concept
(See § 779.317) and had provided with a
separate exemption in former section
13(a)(3) of the Act, repealed by the 1966
amendments, this exclusion simply
clarifies the congressional intent to
cover employees in such work under
section 3(s)(2) of the present Act and to
make sure that no exemption under
13(a)(2) will be construed so as to defeat
the purpose of repealing the prior special exemption.
§ 779.338 Effect of 1961 and 1966
amendments.
(a) The 1961 amendments to the Fair
Labor Standards Act narrowed the exemption for retail or service establishments by permitting section 13(a)(2) to
be applied only to an establishment
which was not in a covered enterprise,
or (if it was in such an enterprise)
which had an annual gross volume of
sales of less than $250,000 (exclusive of
specified taxes). There were certain exemptions to this general principle.
These exceptions were set out in sec-
tion 13(a)(2)(ii) and (iii). The establishments enumerated therein were exempt
whether or not they were in a covered
enterprise and regardless of the annual
dollar volume of sales. They were: Hotels, motels, restaurants, motion picture theaters, seasonally operated
amusement or recreational establishments, hospitals, institutions primarily engaged in the care of the sick,
the aged, the mentally ill or defective
residing on the premises of the institution, and schools for physically or mentally handicapped or gifted children.
These establishments were exempt if
they met the basic 50 percent in State
sales test and the 75 percent retail
sales test of section 13(a)(2). The 1966
amendments to the Act repealed sections 13(a)(2)(ii) and (iii). Now to be exempt under section 13(a)(2) hotels, motels, and restaurants must meet the
same tests as other retail or service establishments (see § 779.337). Seasonal
amusement or recreational establishments and motion picture theaters now
have special exemptions from both the
minimum wage and overtime pay provisions of the Act as provided by the
1966 amendments in sections 13(a)(3)
and 13(a)(9) respectively.
(b) Certain establishments which
were previously exempt under section
13(a)(2) prior to the 1966 amendments
have been specifically excluded from
this exemption as a result of the
amendments, even though they may
still qualify as retail or service establishments under the definition of such
an establishment in that section. These
are hospitals, institutions primarily
engaged in the care of the sick, the
aged, the mentally ill or defective residing on the premises of the institution, and schools for physically or mentally handicapped or gifted children.
However, such institutions have been
recognized as having a retail concept
and where the nature of their operations has not changed and where they
otherwise satisfy the Act’s definition
of a ‘‘retail or service establishment’’,
certain food service employees employed by such institutions will be considered to be exempt from the Act’s
overtime pay provisions under section
13(b)(18), exemptions for their administrative or executive employees will not
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§ 779.339
29 CFR Ch. V (7–1–19 Edition)
be defeated by nonexempt work occupying less than 40 percent of the employee’s time, and full-time students
may be employed in accordance with
the special minimum wage provisions
of section 14 of the Act and part 519 of
this chapter.
SALES MADE WITHIN THE STATE
§ 779.339 More than 50 percent intrastate sales required.
The first test specified in section 13
(a)(2) is that more than 50 percent of
the sales of goods or of services (or of
both) of a ‘‘retail or service establishment’’ (Measured by annual dollar volume) must be made ‘‘within the State
in which the establishment is located’’.
This limitation means that such establishment must be primarily engaged
(more than 50 percent) in selling to or
serving customers within its State. If
the establishment is engaged to the extent of 50 percent or more in selling to
or serving customers outside the State
of its location, the requirement is not
met and the establishment cannot
qualify for exemption.
§ 779.340
Out-of-State customers.
Whether the sale or service is made
to an out-of-State customer is a question of fact. In order for a customer to
be considered an out-of-State customer, some specific relationship between him and the seller has to exist to
indicate his out-of-State character.
Sales made to the casual cash-andcarry customer of a retail or service establishment, who, for all practical purposes, is indistinguishable from the
mass of customers who visit the establishment, are sales made within the
State even though the seller knows or
has reason to believe, because of his
proximity to the State line or because
he is frequented by tourists, that some
of the customers who visit his establishment reside outside the State. If
the customer is of that type, sales
made to him are sales made within the
State even if the seller knows in the
particular instance that the customer
resides outside the State. On the other
hand, a sale is made to an out-of-State
customer and, therefore, is not a sale
made ‘‘within the State’’ in which the
establishment is located, if delivery of
the goods is made outside the State. It
should be noted that sales of goods or
services that are conditioned upon acceptance or rejection by an out-ofState source are interstates sales and
not sales made within the State for
purposes of section 13(a)(2). For example, a contract entered into in the
State where the customer resides for
the delivery of a magazine to the customer’s residence, is an interstate sale
if the contract must be approved by the
out-of-State home office of the company publishing the magazine before it
becomes effective.
§ 779.341 Sales
‘‘made
within
the
State’’ and ‘‘engagement in commerce’’ distinguished.
Sales to customers located in the
same State as the establishment are
sales made ‘‘within the State’’ even
though such sales may constitute engagement in interstate commerce as
where the sale: (a) Is made pursuant to
prior orders from customers for goods
to be obtained from outside the State;
(b) contemplates the purchase of goods
from outside the State to fill a customer’s order; or (c) is made to a customer for use in interstate commerce
or in production of goods for such commerce.
COMPUTING ANNUAL DOLLAR VOLUME
AND COMBINATION OF EXEMPTIONS
§ 779.342 Methods of computing annual volume of sales.
The tests as to whether an establishment qualifies for exemption under
section 13(a)(2) of the Act are specified
in terms of the ‘‘annual dollar volume
of sales’’ of goods or of services (or
both) and percentages thereof. The
‘‘annual dollar volume of sales’’ of an
establishment consists of the gross receipts from all sales of the establishment during a 12-month period. The
methods of computing it for purposes
of determining whether the establishment qualifies under the tests of the
exemption are the same as the methods
of calculating whether the annual
gross volume of sales or business of an
enterprise or an establishment meets
the statutory dollar tests for coverage.
These are discussed in §§ 779.265 to
779.269. However, for purposes of the exemption tests the specified percentages
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Wage and Hour Division, Labor
§ 779.346
are based on annual dollar volume before deduction of those taxes which are
excluded in determining whether the
$250,000 test is met. The exemption
tests are in terms of the annual dollar
volume of the establishment. This will
include dollar volume from transactions with other establishments in
the same enterprise, even though such
transactions within an enterprise may
not be part of the annual gross volume
of the enterprise’s sales made or business done (see § 779.259).
§ 779.343 Combinations of exemptions.
(a) An employee may be engaged in a
particular workweek in two or more
types of activities for each of which a
specific exemption is provided by the
Act. The combined work of the employee during such a workweek may
not satisfy the requirements of either
exemption. It is not the intent of the
Act, however, that an exemption based
on the performance of one exempt activity should be defeated by the performance of another activity which has
been made the basis of an equivalent
exemption under another provision of
the Act. Thus, where an employee during a particular workweek is exclusively engaged in performing two or
more activities to which different exemptions are applicable, each of which
activities considered separately would
be an exempt activity under the applicable exemption if it were the sole activity of the employee for the whole
workweek in question, as a matter of
enforcement policy the employee will
be considered exempt during such
workweek. If the scope of such exemptions is not the same, the exemption
applicable to the employee will be
equivalent to that provided by whichever exemption provision is more limited in scope.
(b) In the case of an establishment
which sells both goods and services at
retail and which qualifies as an exempt
establishment under section 13(a)(2),
but cannot, as a whole, meet the tests
of section 13(a)(4) because it sells services as well as goods, a combination of
section 13(a)(2) and 13(a)(4) exemptions
may nevertheless be available for employees of the establishment who make
or process, on the premises, goods
which it sells. Such employees em-
ployed by an establishment which, as a
whole, meets the tests set forth in section 13(a)(2), will be considered exempt
under this combination exemption if
the establishment, on the basis of all
its activities other than sales of services, would meet the tests of section
13(a)(4).
(c) Where two or more exemptions
are applicable to an employee’s work
or employment during a workweek and
where he may be exempt under a combination of exemptions stated above,
the availability of a combination exemption will depend on whether the
employee meets all the requirements of
each exemption which it is sought to
combine.
ENGAGING IN MANUFACTURING AND
PROCESSING ACTIVITIES; SECTION 13(a)(4)
§ 779.345 Exemption provided in section 13(a)(4).
The section 13(a)(4) exemption (see
§ 779.301) exempts any employee employed by a retail establishment which
meets the requirements for exemption
under section 13(a)(2), even though the
establishment makes or processes on
its own premises the goods that it
sells, provided, that more than 85 percent of such establishment’s annual
dollar volume of sales of the goods so
made or processed is made within the
State in which the establishment is located, and other prescribed tests are
met.
§ 779.346 Requirements for exemption
summarized.
An establishment to qualify for exemption under section 13(a)(4) must be
an exempt retail establishment under
section 13(a)(2); that is, 75 percent of
its annual dollar volume of sales of
goods must not be for resale, 75 percent
of its annual dollar volume of sales of
goods must be recognized as retail in
its industry, over 50 percent of its annual dollar volume of sales of goods
must be made within the State in
which the establishment is located, and
its annual dollar volume of sales must
be under $250,000. In addition, the establishment must meet the following
three tests:
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§ 779.347
29 CFR Ch. V (7–1–19 Edition)
(a) The establishment must be recognized as a retail establishment in the
particular industry.
(b) The goods which the exempt establishment makes or processes must
be made or processed at the establishment which sells the goods.
(c) More than 85 percent of the establishment’s annual dollar volume of
sales of the goods which it makes or
processes must be made within the
State in which the establishment is located. (See Act, section 13(a)(2); H.
Rept. No. 1453, 81st Cong. first session,
p. 27; Arnold v. Ben Kanowsky, Inc., 361
U.S. 388.)
§ 779.347 Exemption limited to ‘‘recognized retail establishment’’; factories not exempt.
The section 13(a)(4) exemption requires the establishment to be recognized as a retail establishment in the
particular industry. This test limits
the exemption to retail establishments
only, and excludes factories as such
and establishments to which the retail
concept does not apply. In other words
this test requires that the establishment as a whole be recognized as a retail establishment although it makes
or processes at the establishment the
goods it sells. Typical of the establishment which may be recognized as retail
establishments under the exemption
are custom tailor shops, candy shops,
ice cream parlors, bakeries, drug
stores, optometrist establishments, retail ice plants and other local retail establishments which make or process
the goods they sell and meet the other
tests for exemption. Clearly factories
as such are not ‘‘recognized retail establishments’’ and would not be eligible for this exemption. (See 95 Cong.
Rec. pp. 11001, 11200, 11216, and 14942.)
§ 779.348 Goods must be made at the
establishment which sells them.
(a) Further to make certain that the
exemption applies to retail establishments only and not to factories, an additional requirement of the exemption
is that the goods which the exempt establishment makes or processes must
be made or processed at the establishment which sells the goods. The exemption does not apply to an establishment which makes or processes goods
for sale to customers who will go to
other places to buy them. Thus an establishment that makes or processes
any goods which the employer will sell
from another establishment, is not exempt. If the establishment making the
goods does not sell such goods but
makes them for the purpose of selling
them at other establishments the establishment making the goods is a factory and not a retail establishment.
(b) Where the making or processing
of the goods takes place away from the
selling establishment, the section
13(a)(4) requirement that both the
making or processing and selling take
place at the same establishment cannot be met. This will be true even
though the place at which the goods
are made or processed services the retail selling establishment exclusively.
In such a situation, while the selling
establishment may qualify for exemption under section 13(a)(2), the separate
establishment at which the goods are
made or processed will not be exempt.
The latter is a manufacturing establishment. For example, a candy kitchen manufacturing candy for sale at separate retail outlets is a manufacturing
establishment and not a retail establishment. (Fred Wolferman, Inc. v. Gustafson, 169 F. 2d 759 (CA–8.))
(c) The fact that goods made or processed on the premises of a bona fide retail establishment are sold by the establishment through outside salesmen
(as, for example, department store
salesmen taking orders from housewives for draperies) will not defeat the
exemption if otherwise applicable. On
the other hand, in the case of a factory
or similar establishment devoted to
making or processing goods, the fact
that its goods are sold at retail by outside salesmen provides no ground for
recognizing the establishment as a retail establishment or qualifying it for
exemption.
§ 779.349
The 85-percent requirement.
The final requirement for the section
13(a)(4) exemption is that more than 85
percent of the establishment’s sales of
the goods it makes or processes, measured by annual dollar volume, must
consist of sales made within the State
in which the establishment is located.
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Wage and Hour Division, Labor
§ 779.353
A retail establishment of the type intended to be exempt under this exemption may also sell goods which it does
not make or process; the 85-percent requirement applies only to the sales of
goods which are made or processed at
the establishment. This must not be
confused with the additional test which
requires that the establishment, to be
exempt, must derive more than 50 percent of its entire annual dollar volume
of sales of goods from sales made within the State. (See § 779.339.) In other
words, more than 85 percent of the establishment’s annual dollar volume of
sales of goods made or processed at the
establishment, and more than 50 percent of the establishment’s total annual dollar volume of sales of all the
goods sold by the establishment, must
be derived from sales made within the
State. An establishment will not lose
an otherwise applicable exemption
under section 13(a)(4) merely because
some of its sales of goods made or processed at the establishment are sales for
resale or are not recognized as retail
sales in the particular industry. Sales
for resale, such as wholesale sales, and
other sales not recognized as retail
sales in the industry, will be counted in
the 25-percent tolerance permitted by
the exemption. (Cf. Arnold v. Ben
Kanowsky, Inc., 361 U.S. 388.) Thus, for
example, a bakery otherwise meeting
the tests of 13(a)(4) making and selling
baked goods on the premises nevertheless will qualify as an exempt retail establishment even though it engages in
the sale of baked goods to grocery
stores for resale if such sales, together
with other sales not recognized as retail in the industry, do not exceed 25
percent of the total annual dollar volume of the establishment.
§ 779.350 The section 13(a)(4) exemption does not apply to service establishments.
The section 13(a)(4) exemption applies to retail establishments engaged
in the selling of goods. It does not
apply to service establishments. If the
establishment is a service establishment, it must qualify under section
13(a)(2) in order to be exempt. A retail
establishment selling goods, however,
also may perform services incidental or
necessary to the sale of such goods,
such as a delivery service by a bakery
store or installation of antennas by a
radio dealer for his customers, without
affecting the character of the establishment as a retail establishment
qualified for exemption under section
13(a)(4).
ENGAGING IN CONTRACT TELEGRAPH
AGENCY OPERATIONS; SECTION 13(a)(11)
§ 779.351
Exemption provided.
Section 13(a)(11) (See § 779.301) exempts from sections 6 and 7 of the Act
any employee or proprietor who is engaged in handling telegraphic messages
for the public in a retail or service establishment which qualifies as an exempt retail or service establishment
under section 13(a)(2), if the conditions
specified in section 13(a)(11) are met
and the provisions of section 6 and 7 of
the Act would not otherwise apply.
§ 779.352
Requirements for exemption.
The requirements of the exemption
are: (a) The establishment in which the
employee or proprietor works must
qualify as an exempt retail or service
establishment under section 13(a)(2) of
the Act; (b) the employee or proprietor
must be engaged in handling telegraphic messages for the public pursuant to an agency or contract arrangement with a telegraph company; (c)
such employee or proprietor must be
one to whom the minimum wage and
overtime pay provisions of the Act
would not apply in the absence of such
handling of telegraphic messages (See
Western Union Tel. Co. v. McComb 165 F.
2d. 65 (CA–6), certiorari denied, 333 U.S.
362); and (d) the exemption applies only
where the telegraphic message revenue
does not exceed $500 a month. For purposes of this exemption only, in determining whether a retail or service establishment meets the percentage tests
contained in section 13(a)(2) of the Act,
the receipts from the telegraphic message agency will not be included.
CLASSIFICATION OF SALES AND ESTABLISHMENTS IN CERTAIN INDUSTRIES
§ 779.353
Basis for classification.
The general principles governing the
application of the 13(a)(2) and 13(a)(4)
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§ 779.354
29 CFR Ch. V (7–1–19 Edition)
exemptions are explained in detail earlier in the subpart. It is the purpose of
the following sections to show how
these principles apply to establishments in certain specific industries. In
these industries the Divisions have
made special studies, held hearings or
consulted with representatives of industry and labor, to ascertain the
facts. Based upon these facts the following determinations have been made
as to which sales or establishments
are, and which are not, recognized as
retail in the particular industry.
LUMBER AND BUILDING MATERIALS
DEALERS
§ 779.354 Who may qualify as exempt
13(a)(2) or 13(a)(4) establishments.
(a) Section 13(a)(2). An establishment
engaged in selling lumber and building
materials may qualify as an exempt retail or service establishment under section 13(a)(2) of the Act if it meets all
the requirements of that exemption. It
must appear that:
(1) The establishment is not in an enterprise described in section 3(s) of the
Act or, if it is, its annual dollar volume
of sales (exclusive of excise taxes at
the retail level which are separately
stated) is less than $250,000; and
(2) More than 50 percent of the establishment’s annual dollar volume of
sales of goods or services is made within the State in which the establishment is located; and
(3) 75 percent or more of the establishment’s annual dollar volume of
sales of goods or services (or of both) is
made from sales which are not for resale and are recognized as retail sales
of goods or services in the industry.
These requirements are further explained in §§ 779.301 through 779.343.
(b) Section 13(a)(4). An establishment
which makes or processes lumber and
building materials which it sells may
qualify as an exempt establishment
under section 13(a)(4) of the Act if it
meets all the requirements (see Arnold
v. Kanowsky, 361 U.S. 388) of that exemption. It must appear that:
(1) The establishment qualifies as an
exempt retail establishment under section 13(a)(2) (see paragraph (a) of this
section and § 779.350); and
(2) The establishment is recognized
as a retail establishment in the industry (see § 779.347 and paragraph (c) of
this section); and
(3) The goods which such establishment makes or processes for sale are
made or processed at the retail establishment
which
sells
them
(see
§ 779.348); and
(4) More than 85 percent of the annual dollar volume derived by the retail establishment from sales of goods
so made or processed therein is made
within the State in which the establishment is located (see §§ 779.349,
779.339 through 779.341).
(c) Establishments recognized as retail
in the industry. An establishment which
meets the requirements for exemption
under section 13(a)(4) which are stated
in paragraphs (b)(1), (3), and (4) of this
section is recognized as retail establishment in the industry within the
meaning of paragraph (b)(2) of this section if its annual dollar volume of sales
of goods made or processed at the establishment does not exceed 50 percent
of the annual dollar volume which it
derives from sales that are recognized
as retail and are not made for resale.
(d) Establishments lacking a ‘‘retail
concept.’’ The exemptions provided by
sections 13(a)(2) and 13(a)(4) of the Act
do not apply to establishments in an
industry in which there is no traditional concept of retail selling or servicing (see § 779.316), such as the establishment of a building contractor (see
§ 779.317; Goldberg v. Dakota Flooring
Co., 15 WH Cases 305), or a factory (see
§ 779.347).
§ 779.355 Classification of lumber and
building materials sales.
(a) General. In determining, for purposes of the section 13(a)(2) and (4) exemptions, whether 75 percent of the annual dollar volume of the establishment’s sales which are not for resale
and are recognized as retail in the industry, such sales will be considered to
include all sales of lumber and building
materials by the establishment which
meet all the requirements for such
classification as previously explained
in this subpart, but will not be considered to include the transactions noted
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in paragraphs (b) and (c) of this section, which do not meet the statutory
tests:
(b) Transactions not recognized as retail
sales. (See §§ 779.314 through 779.329.)
Dollar volume derived from the following is not made from sales or services which are recognized as retail in
the industry:
(1) Contracts to build, maintain, or
repair buildings or other structures, or
sales of services involving performance
of typical construction activity or any
other work recognized as an activity of
a contracting business rather than a
function of a retail merchant;
(2) Sales of lumber and building materials in which the seller agrees to install them for the purchaser, where the
installation is not limited to services
that are merely incidental to the sale
and delivery of such materials but includes a substantial amount of activity
such as construction work which is not
recognized as retail (for example, sale
and installation of roofing, siding, or
insulation). A sale of such materials
which would otherwise be recognized as
retail (contracts described in paragraph (b)(1) of this section are outside
this category) may be so recognized
notwithstanding the installation agreement, however, to the extent that the
sales value of the materials is segregated and separately identified in the
transaction;
(3) Sales in direct carload shipments;
that is, where the materials are
shipped direct in carload lots from the
dealer’s supplier to the dealer’s customer;
(4) Sales of specialized goods (some
examples are logs, ties, pulpwood, telephone poles, and pilings). Such specialized items are of the type which the
general consuming public does not ordinarily have occasion to use (cf.
§ 779.318 and Mitchell v. Raines, 238 F. 2d
186), and the sales of such items are not
recognized as retail in the industry;
(5) Sales made pursuant to formal bid
procedures, such as those utilized by
the Federal, State, and local governments and their agencies, involving the
issuance by the buyer of a formal invitation to bid on certain merchandise
for delivery in accordance with prescribed terms and specifications.
(c) Sales for resale. (See §§ 779.330–
779.336.) Examples of sales which cannot be counted toward the required 75
percent because they are for resale include:
(1) Sales of lumber and building materials sold to other dealers for resale
in the same form;
(2) Sales to industrial concerns for
resale in any altered form or as a part
or ingredient of other goods;
(3) Sales to contractors or builders
for use in the construction, repair, or
maintenance of commercial or industrial structures or any other structures
not specifically included in section 3(n)
of the Act (Sucrs. de Mayal v. Mitchell,
280 F. 2d 477, certiorari denied 364 U.S.
902; and see Arnold v. Kanowsky, 361
U.S. 388, 394, footnote 10, and §§ 779.335–
779.336);
(4) Transfers of goods by an employer, who is a dealer in lumber and
building materials and who also acts in
the capacity of a building contractor or
speculative builder, from or through
his building materials establishment to
his building business for the construction maintenance, or repair of commercial property or any other property not
excepted in section 3(n) of the Act. (See
§ 779.336.)
§ 779.356 Application of exemptions to
employees.
(a) Employees who may be exempt
under sections 13(a)(2) and 13(a)(4).
These exemptions apply on an establishment basis (see §§ 779.302–779.306).
Accordingly, where an establishment of
a dealer in lumber and building materials qualifies as an exempt retail or
service establishment under section
13(a)(2) or as an exempt establishment
under section 13(a)(4), as explained in
§ 779.354, the exemption from the minimum wage and overtime pay requirements of the Act provided by such section will apply, subject to the limitations hereafter noted in this section, to
all employees who are employed ‘‘by’’
such establishment (see §§ 779.307–
779.311) in activities within the scope of
its business (§ 779.308) and who are not
employed by the employer in performing central office or warehouse
work of an organization operating several such establishments (§ 779.310;
McComb v. W. E. Wright Co., 168 F. 2d 40,
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§ 779.357
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cert. denied 335 U.S. 854). Neither exemption extends to employees employed in performing the work of a
nonexempt establishment (§ 779.311) or
such activities as construction work.
Employees employed in making and
processing of lumber and building materials for sale do not come within the
section 13(a)(2) exemption; they are exempt only if employed by an establishment which qualifies as an exempt establishment under section 13(a)(4) as
explained in § 779.354 and if their work
in the making or processing of such
materials is done at such establishment. How duties relating to the processing or manufacturing of such materials affect the application of these exemptions is discussed in further detail
in paragraphs (b) and (c) of this section.
(b) Processing and manufacturing activities. The performance, in an establishment which sells lumber and building materials at retail, of activities
such as cutting lumber to a smaller
size or dressing lumber in accordance
with a customer’s request or assembling window and door frames received
in ‘‘knocked-down’’ condition, constitutes processing incidental to the
sales of such materials. Such activities
are not considered manufacturing and
will not affect the applicability of the
section 13(a)(2) exemption to the establishment or to the employees who perform them. However, whenever lumber
is cut or dressed for sale, or fabricated
products are manufactured for sale (for
example, windows, door frames, benches, pig troughs, pallets, molding,
sashes, cabinets, boxes), there is no exemption under section 13(a)(2). Employees performing such manufacturing activities at the establishment
are exempt only if all the tests set
forth in section 13(a)(4) are met (see
pars. (b), (c), and (d) of § 779.354). Employees engaged in such activities at a
manufacturing plant, central yard, or
other place not qualifying as an exempt establishment under section 13(a)
(2) and (4) are not exempt.
(c) Employees serving exempt and nonexempt operations. In lumber and building materials establishments which
qualify for exemption under section
13(a)(2) but engage in some activities in
which their employees are not exempt,
such as construction or the making or
processing of materials for sale where
no exemption under section 13(a)(4) is
applicable, there may be auxiliary employees of the establishment whose duties relate to both the exempt sales
portion of the business and the non-exempt operations. For example, office
workers may keep records of both the
retail sales and construction or manufacturing activities; custodial workers
may clean the entire premises, including portions devoted to nonexempt
manufacturing; and warehousemen,
messengers, and stock clerks may handle material for all departments, including material used in the nonexempt operations. These employees do
not qualify for the exemption except
when they are primarily engaged in the
sales portion of the business and only
incidentally perform clerical, custodial, or messenger service for the other
operations. As an enforcement policy,
such an employee will not be considered to be engaged in nonexempt activities which render him ineligible for
exemption under section 13(a)(2) if, in
the particular workweek, an insubstantial amount of his time (20 percent or
less) is allocable to the clerical, custodial, or messenger services performed
by him which relate to such nonexempt
operations of the employer.
COAL DEALERS
§ 779.357 May
qualify
as
exempt
13(a)(2) establishments; classification of coal sales.
(a) General. A coal dealer’s establishment may qualify as an exempt retail
or service establishment under section
13(a)(2) of the Act if it meets all the requirements of that exemption. In determining for purposes of the 13(a)(2)
exemption, whether 75 percent of the
establishment’s sales are recognized as
retail in the particular industry, sales
of coal to the consumer from a dealer’s
yard storage, where bulk is broken, are
recognized as retail if they meet the requirements for such classification as
previously explained in this subpart. It
has been determined that the following
sales do not meet such requirements
and are not so recognized even if made
from a dealer’s yard storage:
(1) Sales where the delivery is made
by railroad car or cargo vessel.
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§ 779.358
(2) Sales in a carload quantity or
more for continuous delivery by truck
from a dock, mine or public railroad facility.
(3) Sales of coal at a wholesale price. A
wholesale price is a price comparable
to or lower than the establishment’s
price in sales described in paragraphs
(a)(1) and (2) of this section or in sales
to dealers (but not peddlers) for resale.
If the establishment makes no such
sales, the wholesale price is the price
comparable to or lower than the price
prevailing in the immediate area in
sales described in paragraphs (a)(1) and
(2) of this section or in sales to dealers
(but not peddlers) for resale.
(4) Sales of coal for use in the production of a specific product to be sold in
which coal is an essential ingredient or
the principal raw material, such as
sales of coal for the production of coke,
coal gas, coal tar, or electricity.
(b) ‘‘Sales for resale.’’ In determining
for purposes of the 13(a)(2) exemption,
whether 75 percent of the establishment’s sales are not made for resale,
‘‘sales for resale’’ will include sales of
coal to other dealers, to peddlers, and
sales of coal for use in the production
of a specific product to be sold, in
which coal is an essential ingredient or
the principal raw material, such as
sales of coal for the production of coke,
coal gas, coal tar, or electricity. This is
distinguished from sales of coal for use
in the general manufacturing or industrial process such as the use in laundries, bakeries, nurseries, canneries,
etc., or for space heating, which are
not sales made for resale.
ICE MANUFACTURERS AND ICE DEALERS
§ 779.358 May
qualify
as
exempt
13(a)(2) or 13(a)(4) establishments.
(a) An establishment engaged in selling ice may qualify as an exempt retail
or service establishment under section
13(a)(2) of the Act if it meets all the requirements of that exemption. Similarly, an establishment making the ice
it sells may qualify as an exempt establishment under section 13(a)(4) of
the Act if it meets all the requirements
of that exemption.
(b) In determining whether the requirements of the 13(a)(2) exemption
that 75 percent of the establishment’s
sales must not be made for resale and
must be recognized as retail sales in
the industry are met, sales of ice which
meet all the requirements for such
classification as previously explained
in this subpart will be regarded as retail. The following sales have been determined not to qualify under the applicable tests for recognition as retail:
(1) Sales for resale.
(2) Sales of ice for icing railroad cars
and for icing cargo trucks. However,
sales of ice for the re-icing of cargo
trucks are recognized as retail if such
sales do not fall into the nonretail categories described in paragraphs (b) (4)
and (5) of this section.
(3) Sales of ice in railroad car lots.
(4) Sales of ice of a ton or more.
(5) Sales of ice at a price comparable
to that charged by the establishment
to dealers or, if no sales are made to
dealers by the establishment, at a price
comparable to or lower than the prevailing price to dealers in the area.
(c) The legislative history indicates
that iceplants making the ice they sell
are among the establishments which
may qualify as retail establishments
under the section 13(a)(4) exemption. It
appears that all iceplants which sell at
retail are establishments of the same
general type, permitting no separate
classifications with respect to recognition as retail establishments. Any iceplant which meets the tests of section
13(a)(2) will, therefore, be considered to
be recognized as a retail establishment
in the industry. Of course, the establishment must also meet all the other
tests of section 13(a)(4) to qualify for
the exemption.
(d) There are some iceplants which
meet the section 13(a)(2) exemption requirements, but do not meet all of the
section 13(a)(4) requirements. In such
establishments, there may be some employees whose duties relate to both the
sales portion of the business and the
making or processing of ice. These employees will not qualify for exemption.
However, in such establishment, there
may be some employees who work primarily for the retail sales portion of
the business and also perform incidental clerical, custodial, or messenger
service for the manufacturing operation. For example, office workers may
keep records of both the manufacturing
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§ 779.359
29 CFR Ch. V (7–1–19 Edition)
activities and of the retail sales departments, maintenance workers may
clean up in both parts of the establishment, and messengers may perform
services for both activities. If these
employees spend relatively little time
in the work related to the ice manufacturing portion of the business, they
will not, as an enforcement policy, be
regarded as engaged in the making or
processing of ice. Such an auxiliary
employee will thus be exempt under
section 13(a)(2) in any workweek in
which an insubstantial amount of his
time (20 percent or less) is allocable to
the clerical, messenger, or custodial
work of the ice manufacturing operations.
LIQUEFIED-PETROLEUM-GAS AND FUEL
OIL DEALERS
§ 779.359 May
qualify
as
13(a)(2) establishments.
exempt
A liquefied-petroleum-gas or fuel oil
dealer’s establishment may qualify as
an exempt retail or service establishment under section 13(a)(2) of the Act if
it meets all the requirements of that
exemption. (It should be noted, however, that employees of certain enterprises engaged in the wholesale or bulk
distribution of petroleum products may
be partially exempt from the overtime
provisions of the Act under section
7(b)(3). This overtime exemption is discussed in a separate bulletin, part 794
of this chapter. Liquefied-petroleumgas means butane, propane and mixtures of butane and propane gases.
§ 779.360 Classification of liquefied-petroleum-gas sales.
(a) General. In determining, under the
13(a)(2) exemption, whether 75 percent
of the establishment’s sales are not for
resale and are recognized as retail sales
in the industry, sales to the ultimate
consumer of liquefied-petroleum-gas,
whether delivered in portable cylinders
or in bulk to the customer’s storage
tanks, are recognized as retail in the
industry if they meet all the requirements for such classification as previously explained in this subpart. The
following are not recognized as retail:
(1) Sales in single lot deliveries exceeding 1,000 gallons;
(2) Sales made on a competitive bid
basis (this term covers sales made pursuant to an invitation to bid, particularly sales to Federal, State and local
governments; sales made in a like manner to commercial and industrial concerns and institutions are also included); and
(3) Sales for use in the production of
a specific product in which the gas is
an essential ingredient or principal raw
material, such as sales of liquefied-petroleum-gas for the production of
chemicals and synthetic rubber; and
(4) Sales of liquefied-petroleum-gas
for use as truck or bus fuel and the repair and servicing of trucks and buses
used in over-the-road commercial
transportation (including parts and accessories for such vehicles).
(b) Sales or repairs of tanks. Sales or
repairs of tanks for the storage of liquefied-petroleum-gas are recognized as
retail in the industry, except: (1) Any
tank exceeding 1,000 gallons in capacity; (2) any tank sold or repaired on the
basis described in paragraph (a) (2) of
this section or for the purposes described in paragraph (a)(3) of this section; and (3) sales in quantity larger
than involved in the ordinary sales to a
farm or household customer.
(c) Conversion units. Sales and installation of units for converting pumps,
stoves, furnaces and other equipment
and appliances to the use of liquefiedpetroleum-gas, are recognized as retail
sales except: (1) Sales of the installation of such conversion units which involve substantial modification of the
appliance or equipment; (2) sales and
installation of such units to be used in
industrial machinery or equipment; (3)
sales and installations made on the
basis described in paragraph (a)(2) of
this section or in quantity as described
in § 779.327; and (4) sales and installation of such units for vehicles mentioned in paragraph (a) (4) of this section.
§ 779.361 Classification of other fuel oil
sales.
(a) Sales of fuel oil (as differentiated
from sales of butane and propane gases)
are classified as retail and nonretail
sales as follows:
(1) Retail sales—all sales of grades
No. 1, No. 2, and No. 3 of fuel oil direct
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§ 779.363
to housholders for their own domestic
uses;
(2) Nonretail sales:
(i) All sales of grades No. 4, No. 5, and
No. 6 fuel oil as these heavy oils are
‘‘special purpose’’ goods to which the
retail sales concept has no application
(See § 779.321);
(ii) All sales for resale including such
sales to peddlers and other dealers (See
§§ 779.331–779.334);
(iii) All sales made pursuant to a formal invitation to bid (See § 779.328(d)).
(b) In some cases the retail or nonretail status of an establishment may
turn on sales other than those listed
above. In such cases all the facts relative to such sales shall be considered
in arriving at a determination. The
classification of such sales depends
upon whether they are recognized as
retail sales. In such cases particular attention shall be given to the quantities
involved and the prices charged.
FEED DEALERS
§ 779.362 May
qualify
as
exempt
13(a)(2) or 13(a)(4) establishments.
(a) An establishment engaged in selling feed may qualify as an exempt retail or service establishment under section 13(a)(2) of the Act if it meets all
the requirements of that exemption.
Similarly an establishment making
and processing the feed it sells may
qualify as an exempt establishment
under section 13(a)(4) of the Act if it
meets all the requirements of that exemption.
(b) In determining whether, under
the 13(a)(2) exemption, 75 percent of the
establishment’s sales are not for resale
and are recognized as retail sales in the
industry, sales of feed to feeders will
generally meet the requirements for
such classification as previously explained in this subpart and will ordinarily be considered to be retail sales
except for the following which do not
meet the requirements and are not recognized as retail: Any sale of feed for
shipment by railcar direct to the feeder; and sales made at a quantity discount which results in a price comparable to or lower than the establishment’s price to dealers for resale or, if
the establishment makes no sales to
other dealers, at a price comparable to
or lower than the price prevailing in
the immediate area in sales by similar
establishments to dealers for resale.
(c) The custom grinding and mixing
of feed (including the addition of supplements) for feeders from the grain
they themselves bring in will be regarded as the performance of a service,
and not the making or processing of
goods for sale under section 13(a)(4).
Such services are recognized as retail
services in the industry and the revenue derived therefrom will be included
with the retail receipts of the establishment.
(d) Employees employed in the grinding and mixing of feed for sale (as distinguished from the grinding and mixing services discussed in paragraph (c)
of this section) are engaged in the
making or processing of goods and are
therefore not exempt under section
13(a)(2). In order for these employees to
be exempt, the establishment by which
they are employed must meet all the
requirements of section 13(a)(4), including the requirement that the establishment must be recognized as a retail establishment in the particular industry.
The typical small feed mill engaged in
selling goods to farmers appears to be
recognized as retail in the industry.
There are, of course, large mills which
are essentially factories which are not
so recognized. As an enforcement policy an establishment which qualifies
for exemption under section 13(a)(2)
will be considered to have met this requirement: (1) If less than 50 percent of
its retail sales are composed of feed
manufactured at the establishment; or
(2) if its sales of feeds manufactured at
the establishment do not exceed 2,000
tons a year. In determining these tests
for the applicability of the exemption,
the computation of the sales of feed
manufactured will be made on an annual basis in the same manner as set
forth in §§ 779.265 through 779.269 for the
computation of sales.
MONUMENT DEALERS
§ 779.363 May
qualify
as
exempt
13(a)(2) or 13(a)(4) establishments.
(a) An establishment engaged in the
sale of monuments and memorials may
qualify as an exempt retail or service
establishment under section 13(a)(2) of
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29 CFR Ch. V (7–1–19 Edition)
the Act if it meets all the requirements
of that exemption. Similarly, an establishment making or processing the
monuments it sells may qualify as an
exempt establishment under section
13(a)(4) of the Act if it meets all the requirements of that exemption.
(b) Monument dealers’ establishments may be roughly divided into four
types;
(1) Establishments which are engaged
exclusively in selling monuments and
memorials from designs. They receive
their monuments from a manufacturer
completely finished and lettered and
they then erect the monuments.
(2) Establishments which purchase
finished monuments from manufacturers, display them, carve or sand-blast
lettering or incidental decoration to
order, and set them in cemeteries or
elsewhere.
(3) Establishments which purchase
finished and semi-finished work. The
semifinished work consists of sawed,
steeled, or polished granite slabs or
sand-rubbed marble. In such a case the
establishments will cut ends, tops, or
joints on dies and may shape a base.
(4) Establishments which purchase
stone in rough form and perform all
the fabricating operations in their own
plants. In such a case the establishments may saw or line-up the rough
stones, machine surface and polish the
stone and then perform the other operations necessary to complete the
monument. They may finish the monuments for display or on special order
and then erect them.
(c) In determining whether, under the
13(a)(2) exemption, 75 percent of the establishment’s sales are not for resale
and are recognized as retail sales in the
industry, the ordinary sale of a single
tombstone or monument to the ultimate purchaser will be considered as a
retail sale within the meaning of the
exemption. If the monument dealer establishment meets all the tests of the
13(a)(2) exemption all employees employed by it will be exempt under that
exemption except those employees who
are engaged in the making or processing of the goods. However, carving
or sandblasting of lettering or incidental decoration or erecting the
monuments, is considered processing
incidental to the making of retail sales
and would not defeat the 13(a)(2) exemption for employees performing such
work. Employees who engage in processing semifinished or rough granite or
marble or other stone into finished
monuments such as the work performed in establishments described in
paragraphs (b) (3) and (4) of this section
are engaged in the making or processing of goods and are, for that reason, not exempt under section 13(a)(2).
In order for those employees to be exempt the establishment by which they
are employed must meet all the requirements of the 13(a)(4) exemption.
(d) One of the requirements of the
section 13(a)(4) exemption is that an establishment which makes or processes
goods must be recognized as a retail establishment in the industry. Generally
an establishment described in paragraph (b)(3) of this section which receives finished stock and in addition
receives some semifinished work, including sawed, steeled, or polished
granite slabs or sand-rubbed marble,
etc., and performs such operations as
cutting ends, tops, or joints on the
dies, is a type of establishment which
is recognized as a retail establishment
in the industry. On the other hand,
those establishments which characteristically engage in the sawing or lining
up of rough stone, or in the machine
surfacing and polishing of stone, such
as the activities performed in an establishment described in paragraph (b)(4)
of this section, are not recognized as
retail establishments in the particular
industry within the meaning of section
13(a)(4). Therefore, their employees
who engage in such processing of
monuments are not exempt under this
section of the Act.
FROZEN-FOOD LOCKER PLANTS
§ 779.364 May
qualify
as
exempt
13(a)(2) or 13(a)(4) establishments.
(a) An establishment engaged in providing frozen-food locker service to
farmers and other private individuals
and rendering services thereto may
qualify as an exempt retail or service
establishment under section 13(a)(2) of
the Act if it meets all the requirements
of that exemption. Similarly, a frozenfood locker plant which also engages in
slaughtering and dressing livestock or
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§ 779.365
poultry for sale may qualify as an exempt establishment under section
13(a)(4) of the Act if it meets all the requirements of that exemption.
(b) Activities of frozen-food locker
plants. Frozen-food locker plants provide locker service for the cold storage
of frozen meats, fruits, and vegetables
and engage in incidental activities
such as the cutting of meat, cleaning,
packaging or wrapping and quick freezing, of meats, fruits, or vegetables for
such locker service. In such establishments lockers are rented principally to
farmers and other private individuals
for the purpose of storage by them of
such goods for their own personal or
family use. Storage space and related
services may also be provided for business or commercial use such as to hotels, stores or restaurants, or to farmers or other customers who use it to
store meat and other goods for future
sale. Such locker plants may also engage in such activities as the custom
slaughtering and dressing of livestock
or poultry and the curing, smoking, or
other processing of meat owned by
farmers and other private individuals
for storage by those customers either
in their home freezers or in locker
plants for the customers’ personal or
family use. The custom slaughtering or
processing activities of such locker establishments may be performed on the
premises of the establishments or at
some location away from the establishment.
(c) Classification of sales. In determining whether, under the 13(a)(2) exemption, 75 percent of the establishment’s sales are not for resale and are
recognized as retail sales in the industry, the receipts from the locker service and the incidental activities mentioned in the first sentence of this section and from the slaughtering, dressing, or other processing of livestock or
poultry performed for farmers and
other private individuals for their own
use, but not where the goods are to be
sold to others by the customer, will be
counted as receipts from sales of services recognized as retail in the industry. Receipts from commercial storage
and activities incidental thereto and
from the sale of hides, offal or other
byproducts will be counted as receipts
from sales of goods or services made for
resale or which are not recognized as
retail sales of goods or services in the
industry.
(d) Some locker plant establishments
also include a meat market of the type
which slaughters its own livestock or
poultry (as distinguished from the
slaughtering performed as a service to
customers on the customers’ own livestock) and processes such meat for sale
by it to the general public. In performing such operations as the slaughtering, curing, and smoking of meat
and the rendering of fats for sale, the
establishment is making or processing
goods that it sells and is not performing retail services for its customers. Employees engaged in these
activities in such an establishment,
therefore, are not exempt under section
13(a)(2) but may be exempt if the establishment meets the tests of a combination 13(a)(2)–13(a)(4) exemption in accordance with the principles stated in
§ 779.343. As a general rule, such a meat
market which slaughters its own livestock and sells its meat to the general
public is a type of establishment which
may be recognized as a retail establishment in the industry within the meaning of the 13(a)(4) exemption. Whether
a particular establishment, however, is
so recognized depends upon the facts of
the case. It should be noted that where
such slaughtering, curing or smoking
is, for any reason, performed away
from the premises of the establishment
where the meat is sold, the employees
engaged in such activities are not employees employed by a retail establishment which ‘‘makes or processes at the
retail establishment the goods that it
sells’’ within the meaning of the
13(a)(4) exemption and cannot, therefore, be exempt under that section.
AUTOMOTIVE TIRE ESTABLISHMENTS
§ 779.365 May
qualify
as
exempt
13(a)(2) or 13(a)(4) establishments.
(a) An establishment engaged in the
selling of tires, tubes, accessories and
of repair services on tires may qualify
as an exempt retail or service establishment under section 13(a)(2) of the
Act if it meets all the requirements of
that exemption. Similarly, an establishment engaged in retreading or recapping tires may qualify as an exempt
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§ 779.366
29 CFR Ch. V (7–1–19 Edition)
establishment under section 13(a)(4) of
the Act if it meets all the requirements
of that exemption.
(b)(1) In determining whether, under
the 13(a)(2) exemption, 75 percent of the
establishment’s sales are not made for
resale and are recognized as retail sales
in the industry, sales other than those
described hereinafter in the subparagraphs of this paragraph may be so
counted if they meet all the requirements for such classification as previously explained in this subpart. Not
eligible for inclusion in the requisite 75
percent are sales of goods that cannot
be the subject of a retail sale because
the goods are not of a ‘‘retailable’’ type
or the sales of such goods lack the ‘‘retail concept’’ (see § 779.321). Nor can
sales for resale be counted toward the
75 percent. For example, sales of tires,
tubes, accessories or services to garages, service stations, repair shops,
tire dealers and automobile dealers, to
be sold or to be used in reconditioning
vehicles for sale are sales for resale.
Further, the sales of tires, tubes, accessories and tire repair services, including retreading and recapping, which
are described in the following paragraphs (b) (2) through (7), are not recognized as retail in the industry.
(2) Sales made pursuant to a formal
invitation to bid: Such sales are made
under a procedure involving the
issuance by the buyer of a formal invitation to bid on certain merchandise
for delivery in accordance with prescribed terms and specifications. Sales
to the Federal, State and local governments are typically made in this manner.
(3) Sales to ‘‘national accounts’’ as
known in the trades; that is, sales
where delivery is made by the local tire
dealer under a centralized pricing arrangement between the customer’s national office and the tire manufacturer;
payment may be made either to the
local dealer or direct to the tire manufacturer under a centralized billing arrangement with the customer’s national office.
(4) Sales to fleet accounts at wholesale prices: As used in this section, a
‘‘fleet account’’ is a customer operating five or more automobiles or
trucks for business purposes. Wholesale
prices for tires, tubes, and accessories
are prices equivalent to, or less than,
those typically charged on sales for resale. If the establishment makes no
sales of passenger car tires for resale,
the wholesale price of such tires will be
taken to be the price typically charged
in the area on sales of passenger car
tires for resale. If the establishment
makes no sales of truck tires for resale,
the wholesale price of such tires will be
taken to be the price charged by the establishment on sales of truck tires to
fleet accounts operating 10 or more
commercial vehicles, or if the establishment makes no such sales, the
wholesale price will be taken to be the
price typically charged in the area on
sales of truck tires to fleet accounts
operating 10 or more commercial vehicles. (See Wirtz v. Steepleton General
Tire, 383 U.S. 190, 202, rehearing denied
383 U.S. 963.)
(5) Sales of a tire rental service on a
mileage basis known in the trade as
‘‘mileage contracts’’: This is a leasing
arrangement under which a tire dealer
agrees to provide and maintain tires or
tubes for motor vehicles of a fleet account.
(6) Sales of servicing and repair work
performed under a fleet maintenance
arrangement on tires for trucks and
other automotive vehicles whereby the
establishment undertakes to maintain
the tires or tubes for a fleet account at
a price below the prevailing retail
price.
(7) Sales, repair, recapping, or rental
of truck or machinery tires suitable for
use only on trucks or equipment of a
specialized kind that cannot themselves be the subject of a retail sale because their lack of a concept of
‘‘retailability’’ as previously explained
precludes the recognition of their sale
as ‘‘retail;’’ to any industry.
§ 779.366 Recapping
or
retreading
tires for sale.
(a) Some automotive tire establishments engage in recapping and retreading work on tires which the establishment expects to sell in their reconditioned form. Such activities are not
performed as a service for a customer
but constitute manufacturing goods for
sale. Employees performing such work
may be exempt only if they are employed by an establishment which
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Wage and Hour Division, Labor
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meets all the requirements of the
13(a)(4) exemption.
(b) For purposes of meeting the retail
recognition requirement of section
13(a)(4), an establishment engaged in
retreading or recapping of tires which
qualifies for exemption under section
13(a)(2) is recognized as a retail establishment in the industry if not more
than 50 percent of the annual dollar
volume of its sales resulting from its
retreading and recapping operations
comes from the sale of tires retreaded
and recapped for sale.
COMMERCIAL STATIONERS
§ 779.367 Commercial stationers may
qualify as exempt 13(a)(2) establishments.
(a) A commercial stationer’s establishment may qualify as an exempt retail or service establishment under section 13(a)(2) of the Act if it meets all
the requirements of that exemption.
Where the establishment meets these
requirements all employees employed
by the establishment will be exempt,
except any employees who are engaged
in the making or processing of goods,
such as printing and engraving. The
commercial stationer ordinarily has a
store on the street level located in the
shopping section of the community
where other stores are located and
many people pass by. He has store
clerks who sell over the counter to the
consuming public and may have outside salesmen who sell to offices. He
makes very few, if any, sales to other
dealers for resale. He keeps in stock
and displays the various items sold
over the counter and by outside salesmen. The number of items in stock
typically ranges from 5,000 to 15,000.
Primarily, items sold are stationery,
pens, pencils, blotters, briefcases, calendars, clocks, greeting cards, thumbtacks, typewriter ribbons, carbon
paper, paper clips, ink, commercial envelopes and typewriter paper, filing
supplies and similar items. In addition
he may also sell filing cabinets, office
desks and chairs, other items of office
furniture and supplies and equipment
generally, as well as standard and portable typewriters and certain other
small office machines.
(b) In determining whether, under
the 13(a)(2) exemption, 75 percent of the
establishment’s sales are recognized as
retail sales, in the case of commercial
stationery establishments which in
general
operate
as
described
in
§ 779.367(a), the sales made which are of
‘‘Retailable’’ items and are not for resale will be recognized as retail if they
meet the requirements for such classification as previously explained in this
subpart. The following position is
adopted for enforcement purposes: All
sales other than for resale of stationery, office supplies and equipment,
office furniture and office machinery
commonly stocked by commercial
stationers for sale to individual consumers as well as businesses, including
typewriters, adding machines, small
duplicating machines, checkwriters,
and the like, will be considered to be
retail except for the sales set out
below:
(1) Sales made on a competitive bid
basis. This term covers sales made pursuant to an invitation to bid, particularly sales to Federal, State, and local
governments; sales made in a like manner to commercial and industrial concerns and institutions are also included.
(2) Sales made pursuant to a requirements contract or other contractual
arrangement involving the sale of a
large quantity of goods over a period of
time with a substantially lower price
structure for the individual deliveries
than would prevail for the usual sales
of the quantities delivered.
(3) Sales made at quantity discount
of 30 percent or more from the price of
the ordinary unit of sale.
(4) Sales of school supplies to municipalities, boards of education, or schools
in the same manner as the sales of
school supply distributors.
(5) Sales of job printing and engraving other than (i) sales of social printing and engraving and (ii) sales of
printing and engraving of business envelopes, letterheads, and calling cards.
(6) Sales of specialized machinery
and equipment.
§ 779.368 Printing and engraving establishments not recognized as retail.
(a) An establishment which is engaged in printing and engraving is not
recognized as a retail establishment for
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purposes of section 13(a)(4). Therefore,
employees of a stationery establishment engaged in printing and/or engraving do not come within the exemption. This fact will not affect the exemption under section 13(a)(2) of employees of stationery establishments
who are not engaged in printing or engraving.
(b) In a combined stationery and
printing or engraving establishment
there are employees who operate the
machines in the printing or engraving
department and there may be other
employees who also perform work primarily or exclusively for that department. There are in addition various
employees in such combined establishments whose work relates to the stationery portion of the business but who
also perform some work for the printing department. For example, office
workers may keep records of both the
printing plant and stationery department, maintenance workers may clean
up in both departments; and warehousemen, messengers and stock clerks
may handle material for both departments. In some establishments these
workers spend relatively little time in
the work of the printing department.
As an enforcement policy an auxiliary
employee will not be considered to be
engaged in the making or processing of
goods for purposes of the exemption
under section 13(a)(2) in any workweek
in which an insubstantial amount of
his time (20 percent or less) is allocable
to the clerical, messenger, or custodial
work of the printing department.
FUNERAL HOMES
§ 779.369 Funeral home establishments
may qualify as exempt 13(a)(2) establishments.
(a) General. A funeral home establishment may qualify as an exempt retail
or service establishment under section
13(a)(2) of the Act if it meets all the requirements of that section. Where the
establishment meets these requirements generally all employees employed by the establishment will be exempt except any employees who perform any work in connection with burial insurance operations (see paragraph
(b)) or who spend a substantial portion
of their workweek in ambulance serv-
ice operations, as described in paragraph (e) below.
(b) Burial insurance operations. There
is no retail concept applicable to the
insurance business (see § 779.317). Burial
associations which enter into burial insurance contracts are generally regulated by the State and the regulations
governing such associations are included in State statutes under Insurance. The contracts issued are very
similar in form and content to ordinary life insurance policies. Income received from such operations is nonretail income and employees engaged
in such work are not employed in work
within the scope of the retail exemption (see § 779.308).
(c) Accommodation items. Amounts
paid to funeral homes to cover the cost
of ‘‘accommodation’’ items are part of
the gross receipts of the establishment
and are included in its annual gross
volume of sales made or business done.
Such items may include goods or services procured by the funeral home on
behalf of the bereaved with or without
profit but on its own credit or through
cash payment by it, such as telegrams,
long distance calls, newspaper notices,
flowers, livery service, honoraria to
participating personnel, transportation
by common carrier, clothing for the deceased, and transcripts of necessary
forms. For the purposes of determining
the applicability of the retail or service establishment exemption, receipts
of the funeral home in reimbursement
for such services are considered derived
from sales or services recognized as retail in the industry. Cash advances
made as a convenience to a bereaved
family are not included in computing
the gross volume of sales made of business done when repaid. Of course, if interest is charged it would be included
in the gross volume of sales and nonretail income.
(d) Nonretail services. Calling for and
preparing bodies and crematory service
for other funeral homes, burial insurance operations, and ambulance or livery transportation service (as distinguished from the use of ambulances or
other vehicles as a necessary part of
the undertaking, funeral, or burial
services of the establishment), are
some examples of a funeral home providing goods or services which will be
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§ 779.370
‘‘resold’’ or which are not recognized as
retail.
(e) Ambulance service. The typical ambulance service establishment, engaged
exclusively or nearly so in providing a
specialized form of transportation for
sick, injured, aged, or handicapped persons, is a part or branch of the transportation industry. Since there is no
traditional retail concept in the transportation industry, such ambulance
service establishments cannot qualify
for the section 13(a)(2) exemption (see
§ 779.317). Income from the same typical
ambulance services would be considered nonretail in applying the 25 percent tolerance for nonretail income in
a funeral home. If an establishment engaged in a combination of funeral
home and ambulance services meets all
the tests for exemption under section
13(a)(2), as applied to the combined
sales of both types of services, those of
its employees who are engaged in the
funeral home’s activities and functions
will be exempt as employees of a retail
or service establishment. This exemption, however, does not apply to any
employee regularly engaged in nonexempt ambulance transportation activities in any workweek when he devotes a substantial amount of his
working time to such nonexempt work.
More than 20 percent of the employee’s
working time in the workweek will, for
enforcement purposes, be considered
substantial.
(f) Out-of-State sales. An arrangement
with a funeral home to embalm and
ship human remains to a point outside
the State for burial is not a sale within
the State. The reverse situation where
an out-of-State funeral director ships
the remains to a funeral home to arrange for local interment also is not a
sale within the State.
(g) Work for more than one establishment. Employees performing central office, supply, or warehouse functions for
more than one funeral home establishment are not within the exemption (see
§ 779.310). However, where certain mortuaries may operate more than one exempt establishment and where employees such as embalmers employed by an
exempt funeral home may be called
upon in a given workweek to perform
for another exempt establishment or
establishments in the same enterprise
work which is a part of the funeral
home services sold by that establishment or establishments to customers,
such employees do not lose the exemption where at all times during the
workweek the employee is employed by
one or the other of such exempt establishments either inside or outside the
establishment in the activities within
the scope of its own exempt business
(see § 779.311(b)). In addition, where an
establishment offering complete funeral home services also has outlying
chapels where only the funeral services
of the deceased persons are conducted,
employees of the main establishment
who are otherwise exempt do not lose
the exemption by virtue of the activities which they may perform in connection with the funeral services held
at the chapel. These activities are in
such a case part of their employment
by the exempt main establishment.
CEMETERIES
§ 779.370 Cemeteries may qualify as
exempt 13(a)(2) establishments.
(a) General. A cemetery may qualify
as an exempt retail or service establishment under section 13(a)(2) of the
Act if it meets all the requirements of
that section, including the requirement
that the retail or service establishment
be open to the general public. So long
as a cemetery is open to any persons of
a particular religion rather than merely the members of a specific organization or place of worship, it will be considered for enforcement purposes to be
‘‘open to the general public.’’
(b) Annual dollar volume. As used in
the Act, annual gross volume means
the gross receipts from all the business
activities of the establishment during a
12-month period (see §§ 779.265 through
779.269). Sums received from the following types of transactions are part of
the annual gross volume of sales made
or business done:
(1) Sales of lots or plots.
(2) Annual tax or assessment levied
on lot owners, and
(3) Gifts or bequests.
Interest from any trust funds for permanent or current maintenance is also
included in the annual gross volume of
sales made or business done. The allocation of the gross receipts to any
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trust funds or other accounts of the establishment does not affect the annual
gross volume.
(c) Nonretail sales or income. Sales of
lots or plots to a burial society or a
fraternal organization for the use of
the members are sales for resale and as
such may not be counted as part of the
75 percent of annual dollar volume of
sales of goods or services which is not
for resale and recognized as retail in
the industry under section 13(a)(2).
Such sales are counted as part of the
annual gross volume in the period in
which the transaction between the
cemetery and the burial society or fraternal organization is completed. Any
interest from trust funds or other investments also is not recognized as retail receipts under section 13(a)(2).
AUTOMOBILE, TRUCK AND FARM IMPLEMENT SALES AND SERVICES, AND
TRAILER, BOAT AND AIRCRAFT SALES
§ 779.371 Some automobile, truck, and
farm
implement
establishments
may qualify for exemption under
section 13(a)(2).
(a) General. The specific exemption
from the provisions of sections 6 and 7
of the Act that was provided in section
13(a)(19) prior to the 1966 amendments
for employees of a retail or service establishment which is primarily engaged in the business of selling automobiles, trucks, or farm implements
was repealed. However, some such establishments may qualify for exemption from both the minimum wage and
overtime pay provisions of the Act
under section 13(a)(2) as retail or service establishments. These are establishments whose annual dollar volume
is smaller than the amount specified in
section 13(a)(2) or in section 3(s)(1) and
which meet all the other requirements
of section 13(a)(2) (see § 779.337). (Such
establishments which do not qualify
for exemption under section 13(a)(2)
may have certain employees who are
exempt only from the overtime pay
provisions of the Act under section
13(b)(10). Section 13(b)(10) is applicable
not only to automobile, truck, and
farm implement dealers but also to
dealers in trailers, boats, and aircraft.
The section 13(b)(10) exemption is discussed in § 779.372 below.)
(b) Application of the 75-percent test. In
determining whether, under the section
13(a)(2) exemption, 75 percent of an
automobile, truck, or farm implement
establishment’s sales of goods or services are not for resale and are recognized as retail, the requirements for
such classification, including the existence of a retail concept, as explained
previously in this subpart, and the specific applications in the industry of
these requirements in accordance with
the following principles, will govern
the classification of sales made by such
establishments. The sales of goods or
services described in paragraph (c) of
this section and in paragraphs (e)(1)
through (5) of this section may not be
counted toward the required 75 percent.
Such sales do not qualify as retail because they either are for resale, are
outside the retail concept, or have been
determined to lack the requisite recognition as retail sales or services.
Other sales of goods or services by the
dealer can qualify if they meet the requirements previously explained.
(c) Nonretail automobile and truck sales
and servicing. None of the following
sales of automobiles, trucks, automotive parts, accessories, servicing and
repair work will be considered as retail:
(1) Sales for resale. For example, sales
of new or used automobiles and trucks,
tires, accessories or services, to service
stations, repair shops and automobile
or truck dealers, where these establishments resell the various items or where
they use them in repairing customers’
vehicles or in reconditioning used cars
for resale, are sales for resale. (Note
that a ‘‘sale’’ for purposes of the Act
need not be for profit under section
3(k) it includes any ‘‘exchange * * * or
other disposition’’.) However, internal
transfers of such items between departments within the dealer’s establishment, such as transfers of parts from
the parts department to the service department of an automobile dealer’s establishment, will not be considered
sales for resale. Such transfers from
one department to another will be disregarded in computing the establishment’s sales for determining the applicability of this exemption.
(2) Sales made pursuant to a formal invitation to bid. Such sales are made
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under a procedure involving the
issuance by the buyer of a formal invitation to bid on certain merchandise
for delivery in accordance with prescribed terms and specifications. Sales
to the Federal, State, and local governments are typically made in this manner.
(3) Fleet sales. Sales in a fleet quantity for business purposes (a sale of five
or more cars or trucks at a time, for
example); and sales to fleet accounts as
described in paragraphs (c)(3) (i) and
(ii) of this section. (As here used, a
‘‘fleet account’’ is a customer operating five or more automobiles or
trucks for business purposes.)
(i) Automobiles and trucks. Sales and
term leases of automobiles and trucks
to national fleet accounts as designated by the various automotive
manufacturers, at fleet discounts, and
sales and term leases to other fleet accounts at discounts equivalent to those
provided in sales to national fleet owners are not recognized as retail.
(ii) Automotive parts and accessories.
Sales of parts and accessories to fleet
accounts at wholesale prices are not
recognized as retail. Wholesale prices
are prices equivalent to, or less than,
those typically charged on sales for resale.
(4) Sales and term leases of specialized heavy motor vehicles or bodies
(16,000 pounds and over gross vehicle
weight) and of tires, parts, and accessories designed for use on such specialized equipment. The following is a partial list illustrating the types of items
of equipment not considered to qualify
as subjects of retail sale:
(i) Single unit trucks, including:
Armored (money carrying).
Buses (integral).
Coal.
Drilling.
Dump.
Hook and ladder (fire department).
Chemical wagons (fire department).
Garbage.
Mixer.
Refrigerator.
Special public utility.
Steel haulers.
Street-cleaning.
Tank.
Wrecker.
(ii) Full trailers and semitrailers
(tractors and semitrailer and truck and
trailer combinations), including:
Auto carrier.
Coal.
Dump.
Garbage.
House carrier.
Low bed carry all.
Pole (lumber).
Refrigerator.
Tank.
Van.
(5) Sales of servicing and repair work
peculiar to the servicing and repair of
specialized vehicles referred to in paragraph (c)(4) of this section, or performed under a fleet maintenance arrangement on trucks and other automotive vehicles whereby the establishment undertakes to maintain a customer’s fleet at a price below the prevailing retail prices.
(6) Sales to motor carriers of services, fuel, equipment, or other goods or
facilities by establishments commonly
referred to as truck stops. Such establishments, which are physically laid
out and specially equipped to meet the
highway needs of the motor transportation industry, offer a variety of services to truckers on a ‘‘one-stop’’ basis,
and provide services principally to
motor carriers and their crews. They
are an integral part of the interstate
transportation industry and are not
within the traditional retail establishments (see paragraphs (c) (4) and (5) of
this section).
(7) Sales of diesel fuel (and LP gas)
for use as truck or bus fuel and the repair and servicing of trucks and buses
used in over-the-road commercial
transportation (including parts and accessories for such vehicles) are specialized goods and services ‘‘which can
never be sold at retail * * * whatever
the terms of the sale.’’ (Idaho Sheet
Metal Works, Inc. v. Wirtz, 383 U.S. 190,
202, rehearing denied 383 U.S. 963; Wirtz
v. Steepleton General Tire Company, Inc.,
383 U.S. 190, 202, rehearing denied 383
U.S. 963.) Sales of these items are nonretail whether made by truck stops or
other establishments (see paragraphs
(c) (4) and (5) of this section).
(d) Nonspecialized truck parts, accessories and services. Sales of parts and
accessories which are of the type used
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by small trucks engaged in local transportation or by farm vehicles and are
not nonretail under paragraph (c)(6) of
this section will be tested under paragraphs (b) and (c)(3) (ii) of this section,
even when made on occasion for use in
larger vehicles. Likewise, repairs and
servicing of a minor nature (such as
tire repair, battery recharging, cleaning of fuel lines, or minor electrical rewiring) performed on any type vehicle
will be considered retail in nature unless nonretail under paragraph (c)(6) of
this section or unless a fleet maintenance arrangement as in paragraph
(c)(5) of this section is present.
(e) Farm implement sales. Sales of farm
machinery, such as equipment necessary for plowing, planting, thinning,
weeding, fertilizing, irrigating, and
harvesting of crops, and raising of livestock on the farm, and the repair work
thereon, will be considered as retail
(whether sold to farmers or nonfarmers) when they satisfy the tests referred to in paragraph (b) of this section. The following, which fail to satisfy these tests, must be classified as
nonretail:
(1) Sales for resale. For example, sales
of new or used machinery, parts, accessories or services to service stations,
repair shops and other dealers, where
these establishments resell these items
or where they use them in repairing
customers’ farm implements or in reconditioning used farm implements for
resale, are sales for resale. However,
this does not apply to internal transfers of such items between departments
within the dealer’s establishment.
Transfers of parts from the parts department to the service department of
a farm implement dealer’s establishment will not be considered sales for
resale, and will be disregarded in computing the establishment’s sales for determining the applicability of the section 13(a)(2) exemption.
(2) Sales made pursuant to formal invitation to bid. Such sales are made under
a procedure involving the issuance by
the buyer of a formal invitation to bid
on certain merchandise for delivery in
accordance with prescribed terms and
specifications. Sales to Federal, State
and local governments are typically
made in this manner.
(3) Sales of specialized equipment not
ordinarily used by farmers, such as:
Bulldozers.
Scrapers.
Land levelers.
Graders.
Cotton ginning machinery.
Canning and packing equipment.
(4) Sales of junk.
(5) Sales of machinery or equipment
which are sold ‘‘installed’’, where the installation involves construction work. Installations which require extensive
planning, labor and use of specialized
equipment ordinarily constitute construction work. In such cases the cost
of installation ordinarily is substantial
in relation to the cost of the goods installed.
(f) Quantity sales to farmers. It should
be noted that the concept of fleet sales
discussed in paragraphs (c)(3) and (5) of
this section is not applied to sales to
farmers, even though the farmer uses
five or more vehicles on his farm.
(g) Particular activities which lack a retail concept. Any receipts derived from
warehousing, construction, including
water well drilling, or manufacturing
activities performed by the automobile, truck, or farm implement dealer are not receipts from retail sales.
These activities and the manufacturing
of farm implements are not retail activities.
[35 FR 5856, Apr. 9, 1970, as amended at 76 FR
18858, Apr. 5, 2011]
§ 779.372 Nonmanufacturing establishments with certain exempt employees under section 13(b)(10).
(a) General. A specific exemption
from only the overtime pay provisions
of section 7 of the Act is provided in
section 13(b)(10) for certain employees
of nonmanufacturing establishments
engaged in the business of selling automobiles, trucks, farm implements,
trailers, boats, or aircraft. Section
13(b)(10)(A) states that the provisions
of section 7 shall not apply with respect to ‘‘any salesman, partsman, or
mechanic primarily engaged in selling
or servicing automobiles, trucks, or
farm implements, if he is employed by
a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate
purchasers.’’
Section
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Wage and Hour Division, Labor
§ 779.372
13(b)(10)(B) states that the provisions
of section 7 shall not apply with respect to ‘‘any salesman primarily engaged in selling trailers, boats, or aircraft, if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling trailers, boats, or aircraft to ultimate purchasers.’’ This exemption will apply irrespective of the annual dollar volume
of sales of the establishment or of the
enterprise of which it is a part.
(b) Character of establishment and employees exempted. (1) An establishment
will qualify for this exemption if the
following two tests are met:
(i) The establishment must not be engaged in manufacturing; and
(ii) The establishment must be primarily engaged in the business of selling automobiles, trucks, or farm implements to the ultimate purchaser for
section 13(b)(10)(A) to apply. If these
tests are met by an establishment the
exemption will be available for salesmen, partsmen and mechanics, employed by the establishment, who are
primarily engaged during the work
week in the selling or servicing of the
named items. Likewise, the establishment must be primarily engaged in the
business of selling trailers, boats, or
aircraft to the ultimate purchaser for
the section 13(b)(10)(B) exemption to be
available for salesmen employed by the
establishment who are primarily engaged during the work week in selling
these named items. An explanation of
the term ‘‘employed by’’ is contained
in §§ 779.307 through 779.311. The exemption is intended to apply to employment by such an establishment of the
specified categories of employees even
if they work in physically separate
buildings or areas, or even if, though
working in the principal building of the
dealership, their work relates to the
work of physically separate buildings
or areas, so long as they are employed
in a department which is functionally
operated as part of the dealership.
(2) This exemption, unlike the former
exemption in section 13(a)(19) of the
Act prior to the 1966 amendments, is
not limited to dealerships that qualify
as retail or service establishments nor
is it limited to establishments selling
automobiles, trucks, and farm imple-
ments, but also includes dealers in
trailers, boats, and aircraft.
(c) Salesman, partsman, or mechanic.
(1) As used in section 13(b)(10)(A), a
salesman is an employee who is employed for the purpose of and is primarily engaged in making sales or obtaining orders or contracts for sale of
the automobiles, trucks, or farm implements that the establishment is primarily engaged in selling. As used in
section 13(b)(10)(B), a salesman is an
employee who is employed for the purpose of and is primarily engaged in
making sales or obtaining orders or
contracts for sale of trailers, boats, or
aircraft that the establishment is primarily engaged in selling. Work performed incidental to and in conjunction with the employee’s own sales or
solicitations, including incidental deliveries and collections, is regarded as
within the exemption.
(2) As used in section 13(b)(10)(A), a
partsman is any employee employed
for the purpose of and primarily engaged in requisitioning, stocking, and
dispensing parts.
(3) As used in section 13(b)(10)(A), a
mechanic is any employee primarily
engaged in doing mechanical work
(such as get ready mechanics, automotive, truck, or farm implement mechanics, used car reconditioning mechanics, and wrecker mechanics) in the
servicing of an automobile, truck or
farm implement for its use and operation as such. This includes mechanical work required for safe operation,
as an automobile, truck, or farm implement. The term does not include employees primarily performing such nonmechanical work as washing, cleaning,
painting, polishing, tire changing, installing seat covers, dispatching, lubricating, or other nonmechanical work.
Wrecker mechanic means a service department mechanic who goes out on a
tow or wrecking truck to perform mechanical servicing or repairing of a
customer’s vehicle away from the shop,
or to bring the vehicle back to the shop
for repair service. A tow or wrecker
truck driver or helper who primarily
performs nonmechanical repair work is
not exempt.
(d) Primarily engaged. As used in section 13(b)(10), primarily engaged means
the major part or over 50 percent of the
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§ 779.381
29 CFR Ch. V (7–1–19 Edition)
salesman’s, partsman’s, or mechanic’s
time must be spent in selling or servicing the enumerated vehicles. As applied to the establishment, primarily
engaged means that over half of the establishments annual dollar volume of
sales made or business done must come
from sales of the enumerated vehicles.
[35 FR 5856, Apr. 9, 1970, as amended at 38 FR
7549, Mar. 23, 1973; 76 FR 18858, Apr. 5, 2011]
OTHER ESTABLISHMENTS FOR WHICH
SPECIAL EXCEPTIONS OR EXEMPTIONS
ARE PROVIDED
§ 779.381 Establishments within special exceptions or exemptions.
(a) As stated in § 779.338, the special
exceptions provided in the 1961 amendments for hotels, motels, restaurants,
hospitals, institutions for the sick, the
aged, the mentally ill or defective, and
schools for physically or mentally
handicapped or gifted children have
been removed. Seasonally operated
amusement or recreational establishments and motion picture theaters also
no longer are specifically exempt under
section 13(a)(2), but have specific exemptions set out for them in sections
13(a)(3) and 13(a)(9) of the Act as
amended in 1966.
(b) Hotels, motels, and restaurants
continue to be eligible for exemption
under section 13(a)(2), but must meet
all the requirements of that section for
exemption in the same manner as other
retail or service establishments. However, a special overtime exemption is
provided for such establishments, regardless of size, in the first part of section 13(b)(8). Hospitals, residential care
establishments, and schools for physically or mentally handicapped or gifted children are specifically excluded by
the Act from consideration for exemption under section 13(a)(2); however,
residential care establishments are exempt from the overtime pay requirements of the Act under the second part
of section 13(b)(8) as long as overtime
premium of not less than one and onehalf times the employee’s regular rate
of pay is paid to him for time worked
in excess of 48 hours in the workweek.
In addition, section 7(j) of the amended
Act provides a special overtime arrangement for hospital employees
whereby overtime pay is due an em-
ployee after 8 hours in a day or 80
hours in a 14-day work period rather
than on the basis of the 7-day workweek as is normally required by the
Act. This provision, though, requires
an agreement or understanding on the
part of both the employer and the employee prior to the performance of the
work. See § 778.601 of this chapter.
(c) The amendments of 1966 also repealed the exemption from both the
minimum wage and overtime pay provisions which was in the Act for certain food service employees employed
by retail or service establishments that
were not exempt under section 13(a)(2).
This exemption (formerly found in section 13(a)(20) is now an exemption from
the overtime provisions only and is set
out in section 13(b)(18). Those establishments now excluded by the Act
from consideration for exemption
under section 13(a)(2) (hospitals, residential care establishments, etc.) may
utilize this exemption where they meet
the Act’s definition of retail or service
establishment in the last sentence of
section 13(a)(2) and the conditions set
out in section 13(b)(18). Likewise, the
special exemption for any employee of
a retail or service establishment primarily engaged in the business of selling automobiles, trucks, or farm implements was repealed by the 1966 amendments. In its stead the overtime exemption set out in section 13(b)(10) and
previously discussed in § 779.372 was
provided for certain employees of any
nonmanufacturing establishment primarily engaged in the business of selling automobiles, trailers, trucks, farm
implements, or aircraft to the ultimate
consumer.
(d) A special exemption from the
overtime pay requirements is also included in the amended Act for bowling
establishments which do not meet the
tests under section 13(a)(2) for exemption as a retail or service establishment. Section 13(b)(19) states that the
overtime pay requirements of the Act
shall not apply with respect to ‘‘any
employee of a bowling establishment if
such employee receives compensation
for employment in excess of 48 hours in
any workweek at a rate not less than
one and one-half times the regular rate
at which he is employed.’’ Unlike the
overtime pay exemption in section
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Wage and Hour Division, Labor
§ 779.383
13(b)(18), this exemption is not dependent upon the establishment meeting
the definition of retail or service establishment.
HOTELS AND MOTELS
§ 779.382 May
qualify
as
13(a)(2) establishments.
exempt
A hotel or motel establishment may
qualify as an exempt retail or service
establishment under section 13(a)(2) of
the Act. However, the establishment
must meet all of the requirements of
section 13(a)(2) (see § 779.337). In determining whether an establishment is a
retail or service establishment within
the meaning of section 13(a)(2) the dollar volume received from the leasing or
rental of space to other than transient
members of the general public cannot
be counted as derived from retail sales
of goods or services. Therefore, receipts
from tenants who are not transient
guests (see § 779.383(c)) must be included in the 25 percent tolerance provided for sales for resale or sales not
recognized as retail.
§ 779.383 ‘‘Hotel’’ and ‘‘motel’’ exemptions under section 13(b)(8).
(a) General. A hotel or motel establishment may qualify for exemption
from the Act’s overtime pay requirements, even if it is in an enterprise described in section 3(s) and is not exempt under section 13(a)(2) because it
exceeds the monetary test for exemption under that section. The first part
of section 13(b)(8) provides that the
overtime provisions of section 7 of the
Act shall not apply with respect to
‘‘any employee employed by an establishment which is a hotel, motel * * *.’’
The 13(b)(8) exemption is applicable irrespective of the annual dollar volume
of sales of a hotel or motel establishment or of the enterprise of which it is
a part.
(b) Definition of ‘‘hotel’’. The term
hotel as used in section 13(b)(8) means
an establishment known to the public
as a hotel, which is primarily engaged
in providing lodging or lodging and
meals for the general public. Included
are hotels operated by membership organizations and open to the general
public and apartment hotels which provide accommodations for transients.
However, an establishment whose income is primarily from providing a permanent place of residence or from providing residential facilities complete
with bedrooms and kitchen for leased
periods longer than 3 months would not
be considered a hotel within the meaning of the Act. An apartment or residential hotel is not considered a hotel
for purposes of section 13(b)(8) unless
more than half of its annual dollar volume is derived from providing transient guests representative of the general public with lodging or lodging and
meals. (See paragraph (c) of this section.) Establishments in which lodging
accommodations are not available to
the public are not included. Also excluded from the category of hotels are
rooming and boarding houses, and private residences commonly known as
tourist homes. Resort or other hotels
even if they operate seasonally are regarded as hotel. (See Cong. Rec., August 25, 1966, pages 19729–19732; Cong
Rec., August 26, 1966, pages 19907–19911.)
(c) ‘‘Transient guests’’. In determining
who are ‘‘transient guests’’ within the
meaning of § 779.382 and paragraph (b)
of this section, as a general rule the
Department of Labor would consider as
transient a guest who is free to come
and go as he pleases and who does not
sojourn in the establishment for a specified time or permanently. A transient
is one who is entertained from day to
day without any express contract or
lease and whose stay is indefinite although to suit his convenience it may
extend for several weeks or a season.
(d) Definition of ‘‘motel’’. The term
motel as used in section 13(b)(8) means
an establishment which provides services similar to that of a ‘‘hotel’’ described in paragraph (b) of this section,
but which caters mostly to the motoring public, providing it with motor car
parking facilities either adjacent to
the room or cabin rented or at some
other easily accessible place. Included
in the term ‘‘motel’’ are those establishments known to the public as
motor hotels, motor lodges, motor
courts, motor inns, tourist courts,
tourist lodges and the like.
(e) Hotel and motel establishments engaged in other activities. The primary
function of a hotel or motel is to provide lodging facilities to the public. In
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§ 779.384
29 CFR Ch. V (7–1–19 Edition)
addition, most hotels or motels provide
food for their guests and many sell alcoholic beverages. These establishments also may engage in some minor
revenue producing activities; such as,
the operation of valet services offering
cleaning and laundering service for the
garments of their guests, news stands,
hobby shops, the renting out of their
public rooms for meetings, lectures,
dances, trade exhibits and weddings.
The exception provided for ‘‘hotels’’
and ‘‘motels’’ in section 13(b)(8) will
not be defeated simply because a
‘‘hotel’’ or a ‘‘motel’’ engages in all or
some of these activities, if it is primarily engaged in providing lodging facilities, food and drink to the public.
MOTION PICTURE THEATERS
§ 779.384 May qualify as exempt establishments.
Section 13(a)(9) of the Act as amended in 1966 exempts from the minimum
wage and overtime pay requirements
‘‘any employee employed by an establishment which is a motion picture
theater.’’ This exemption will be applicable irrespective of the annual dollar
volume of sales of such establishment
or of the enterprise of which it is a
part. A motion picture theater may
also qualify as an exempt retail or
service establishment under section
13(a)(2) of the Act if the establishment
meets all requirements of the exemption, discussed above in §§ 779.337 to
779.341. The term ‘‘motion picture theater’’ as used in section 13(a)(9) means
a commercially operated theater primarily engaged in the exhibition of
motion pictures with or without vaudeville presentations. It includes ‘‘drivein motion picture theaters’’ commonly
known as ‘‘open air’’ or ‘‘drive-in’’ theaters, but does not include such incidental exhibition of motion pictures as
those offered to passengers on aircraft.
‘‘Legitimate theaters’’ primarily engaged in exhibiting stage productions
are not ‘‘motion picture theaters.’’
SEASONAL AMUSEMENT OR
RECREATIONAL ESTABLISHMENTS
§ 779.385 May qualify as exempt establishments.
An amusement or recreational establishment operating on a seasonal basis
may qualify as an exempt establishment under section 13(a)(3) of the Act,
added by the 1966 amendments, even if
it does not meet all the requirements
of the 13(a)(2) exemption. Section
13(a)(3) exempts from the minimum
wage and overtime pay requirements of
the Act ‘‘any employee employed by an
establishment which is an amusement
or recreational establishment, if (a) it
does not operate for more than seven
months in any calendar year or (b) during the preceding calendar year, its average receipts for any 6 months of the
year were not more than 331⁄3
percentum of its average receipts for
the other 6 months of such year’’.
‘‘Amusement or recreational establishments’’ as used in section 13(a)(3) are
establishments frequented by the public for its amusement or recreation and
which are open for 7 months or less a
year or which meet the seasonal receipts test provided in clause (B) of the
exemption. Typical examples of such
are the concessionaires at amusement
parks and beaches. (S. Rept. 145, 87th
Cong., first session, p. 28; H. Rept. 75,
87th Cong., 1st Sess., p. 10.)
RESTAURANTS AND
PROVIDING FOOD
SERVICE
ESTABLISHMENTS
AND BEVERAGE
§ 779.386 Restaurants may qualify as
exempt 13(a)(2) establishments.
(a) A restaurant may qualify as an
exempt retail or service establishment
under section 13(a)(2) of the Act. However, the establishment must meet all
of the requirements of section 13(a)(2)
(see § 779.337). It should be noted that a
separate exemption from the overtime
pay provisions of the Act only is provided in section 13(b)(18) for certain
food service employees employed by establishments other than restaurants if
the establishment meets the definition
of a retail or service establishment as
defined in the last sentence of section
13(a)(2). Privately owned and operated
restaurants conducted as separate and
independent business establishments in
industrial plants, office buildings, government installations, hospitals, or
colleges, such as were involved in
McComb v. Factory Stores, 81 F. Supp.
403 (N.D. Ohio) continue to be exempt
under section 13(a)(2) where the tests of
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Wage and Hour Division, Labor
§ 779.388
the exemption are met (S. Rept. 145,
87th Cong., first session, p. 28; H. Rept.
75, 87th Cong., first session, p. 10). However, they would not be met if the food
service is carried on as an activity of
the larger, nonretail establishment in
which the facility is located and there
is no independent, separate and distinct place of business offering the restaurant service to individual customers
from the general public, who purchase
the meals selected by them directly
from the establishment which serves
them. An establishment serving meals
to individuals, pursuant to a contract
with an organization or person paying
for such meals because the latter has
assumed a contractual obligation to
furnish them to the individuals concerned, is selling to such organization
or firm, and the sales are for resale
within the meaning of section 13(a)(2).
See also § 779.387.
§ 779.387 ‘‘Restaurant’’
exemption
under section 13(b) (8).
(a) As amended in 1966, the Act, in
section 13(b) (8), exempts from its overtime pay provisions ‘‘any employee
employed by an establishment which is
a * * * restaurant’’. The term restaurant as used in section 13(b)(8) of the
Act means an establishment which is
primarily engaged in selling and serving to purchasers at retail prepared
food and beverages for immediate consumption on the premises. This includes such establishments commonly
known as lunch counters, refreshment
stands, cafes, cafeterias, coffee shops,
diners, dining rooms, lunch rooms, or
tea rooms. The term ‘‘restaurant’’ does
not include drinking establishments,
such as bars or cocktail lounges, whose
sales of alcoholic beverages exceed the
receipts from sales of prepared foods
and nonalcoholic beverages. Certain
food or beverage service employees of
establishments such as bars and cocktail lounges, however, may be exempt
under section 13(b)(18).
(b) Not all places where food is served
for immediate consumption on the
premises are ‘‘restaurant’’ establishments within the meaning of section
13(b)(8). Such service is sometimes provided as an incidental activity of an establishment of another kind, rather
than by an establishment possessing
the physical and functional characteristics of a separate place of business
engaged in restaurant operations. In
such event, the establishment providing the meal service is not an establishment ‘‘which is’’ a restaurant as
section 13(b)(8) requires for exemption.
Further, not every place which serves
meals, even if it should qualify as a
separate food service establishment,
possesses the characteristics of a ‘‘restaurant.’’ The meals served by restaurants are characteristically priced,
offered, ordered, and served for consumption by and paid for by the customer on an individual meal basis. A
restaurant functions principally, and
not merely incidentally, to meet the
immediate needs and desires of the individual customer for refreshment at
the particular time that he visits the
establishment for the purpose. A separate transaction to accommodate these
needs and desires takes place on the occasion of each such visit. A ‘‘restaurant’’, therefore, is to be distinguished from an establishment offering
meal service on a boarding or term
basis or providing such service only as
an incident to the operation of an enterprise of another kind and primarily
to meet institutional needs for continuing meal service to persons whose
continued presence is required for such
operation. Accordingly, a boarding
house is not a ‘‘restaurant’’ within the
meaning of section 13(b)(8), nor are the
dining facilities of a boarding school,
college or university which serve its
students and faculty, nor are the
luncheon facilities provided for private
and public day school students, nor are
other institutional food service facilities providing long-term meal service
to stable groups of individuals as an incident to institutional operations in a
manner wholly dissimilar to the typical transactions between a restaurant
and its customers.
§ 779.388 Exemption provided for food
or beverage service employees.
(a) A special exemption is provided in
section 13(b)(18) of the Act for certain
food or beverage service employees of
retail or service establishments. This
section excludes from the overtime pay
provisions in section 7 of the Act, ‘‘any
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§ 779.388
29 CFR Ch. V (7–1–19 Edition)
employee of a retail or service establishment who is employed primarily in
connection with the preparation or offering of food or beverages for human
consumption, either on the premises,
or by such services as catering, banquet, box lunch, or curb or counter
service, to the public, to employees, or
to members or guests of members of
clubs.’’ This is an employee exemption,
intended to apply to employees engaged in the named activities for such
establishments as ‘‘drug stores, department stores, bowling alleys, and the
like.’’ (S. Rept. No. 1487, 89th Cong.,
second session, p. 32.)
(b) The 13(b)(18) exemption will apply
only if the following two tests are met:
(1) The employee must be an employee of a retail or service establishment (as defined in section 13(a)(2) of
the Act); and
(2) The employee must be employed
primarily in connection with the specified food or beverage service activities.
If both of the above criteria are met,
the employee is exempt from the overtime pay provisions of the Act.
(c) The establishment by which the
employee is employed must be a ‘‘retail or service establishment.’’ This
term is defined in section 13(a)(2) of the
Act and the definition is quoted in
§ 779.24; the application of the definition is considered at length earlier in
this subpart. In accordance with this
definition, the establishment will be a
‘‘retail or service establishment’’ for
purposes of section 13(b) (18) if 75 percent or more of the establishment’s annual dollar volume of sales of goods or
services (or of both) is not for resale
and is recognized as retail sales or
services in the particular industry.
(d) If the establishment comes within
the above definition it is immaterial
that the establishment is in an enterprise or part of an enterprise described
in section 3(s). Thus section 13(b)(18)
will be applicable regardless of the annual dollar volume of sales of the establishment or of the enterprise of
which it is a part. It should also be
noted that it is not required that the
establishment make more than 50 percent of its annual dollar volume of
sales within the State in which it is located. The establishment by which the
employee is employed, provided it
qualifies as a ‘‘retail or service establishment,’’ may be a drug store, department store, cocktail lounge, night
club, and the like.
(e) This exemption does not apply to
employees of the ordinary bakery or
grocery store who handle, prepare or
sell food or beverages for human consumption since such food or beverages
are not prepared or offered for consumption ‘‘on the premises, or by such
services as catering, banquet, box
lunch, or curb or counter service
* * *.’’
(f) If the establishment by which the
employee is employed is a ‘‘retail or
service establishment,’’ as explained
above, he will be exempt under section
13(b)(18) provided he is employed primarily in connection with the preparation or offering of food or beverages for
human consumption either on the
premises, or by such services as catering, banquet, box lunch, or curb or
counter service, to the public, to employees, or to members or guests of
members of clubs. An employee employed in the actual preparation or
serving of the food or beverages or in
activities closely related and directly
essential to the preparation and serving will be regarded as engaged in the
described activities. The exemption,
therefore, extends not only to employees actually cooking, packaging or
serving food or beverages, but also to
employees such as cashiers, hostesses,
dishwashers, busboys, and cleanup
men. Also, where the food or beverages
are served away from the establishment, the exemption extends to employees of the retail or service establishment who make ready the serving
place, serve the food, clean up, and
transport the equipment, food and beverages to and from the serving place.
(g) For the exemption to apply, the
employee must be engaged ‘‘primarily’’
in performing the described activities.
A sales clerk in a drug store, department store or other establishment, who
as an incident to his other duties, occasionally prepares or otherwise handles
food or beverages for human consumption on the premises will not come
within the scope of this exemption. The
exemption is intended for employees
who devote all or most of their time to
the described food or beverage service
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Wage and Hour Division, Labor
§ 779.403
activities. For administrative purposes
this exemption will not be considered
defeated for an employee in any workweek in which he devotes more than
one-half of his time worked to such activities.
Subpart E—Provisions Relating to
Certain Employees of Retail or
Service Establishments
GENERAL PRINCIPLES
§ 779.400 Purpose of subpart.
The 1966 amendments to the Act
changed certain existing provisions and
added other provisions pertaining to
exemptions from the requirements of
sections 6 and 7 with respect to certain
employees. This subpart deals with
those exemptions provisions of interest
to retail or service enterprises or establishments.
EXECUTIVE, ADMINISTRATIVE, AND PROFESSIONAL EMPLOYEES AND OUTSIDE
SALESMEN
§ 779.401 Statutory provision.
Section 13(a)(1) of the Act provides
that the provisions of sections 6 and 7
shall not apply with respect to:
Any employee employed in a bona fide executive, administrative, or professional capacity (including any employee employed in
the capacity of academic administrative personnel or teacher in elementary or secondary
schools), or in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the
Secretary, subject to the provisions of the
Administrative Procedure Act, except that
an employee of a retail or service establishment shall not be excluded from the definition of employee employed in a bona fide executive or administrative capacity because
of the number of hours in his workweek
which he devotes to activities not directly or
closely related to the performance of executive or administrative activities, if less than
40 per centum of his hours worked in the
workweek are devoted to such activities).
§ 779.402 ‘‘Executive’’ and ‘‘administrative’’ employees defined.
The terms ‘‘executive’’ and ‘‘administrative’’ as used in section 13(a)(1) of
the Act are defined and delimited in
subpart A of part 541 of this chapter
and explained in subpart B of that part.
These regulations are applicable under
the amended section 13(a)(1) in determining which employees are bona fide
executive or administrative employees.
The clause that is enclosed in parentheses in section 13(a)(1) and which
reads ‘‘including any employee employed in the capacity of academic administrative personnel for teacher in
elementary or secondary schools’’ was
added by the 1966 amendments to the
Act. This clause will not have any affect in the application of the regulations to retail or service establishments. The Act and the regulations
point out the fact that an executive or
administrative employee of a retail or
service establishment may devote up to
40 percent of his hours worked in a
workweek to activities which are not
directly and closely related to the performance of executive or administrative activities and still qualify as a
bona fide executive or administrative
employee. However, in other types of
establishments such a tolerance is limited to 20 percent, except where special
provisions are made in part 541 of this
chapter.
§ 779.403 Administrative and executive
employees in covered enterprises
employed in other than retail or
service establishments.
The up-to-40 percent tolerance for
nonexecutive or nonadministrative duties discussed in the preceding section,
does not apply to executive or administrative employees of an establishment
other than a ‘‘retail or service establishment.’’ For example, an executive
or administrative employee of a central office or a central warehouse of a
chain store system is not an employee
of a ‘‘retail or service establishment,’’
and therefore must still devote not
more than 20 percent of his hours
worked in a workweek to activities
which are not directly and closely related to the performance of executive
or administrative duties in order to
qualify as a bona fide executive or administrative employee under section
13(a)(1), except where special provisions
are made in the regulations issued
under that section of the Act.
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§ 779.404
29 CFR Ch. V (7–1–19 Edition)
§ 779.404 Other section 13(a)(1) employees employed in covered enterprises.
The ‘‘professional’’ employee or the
‘‘outside salesman’’ employed by a retail or service establishment in a covered enterprise, in order to qualify as a
bona fide ‘‘professional employee’’ or
as an ‘‘outside salesman,’’ must meet
all the requirements set forth in the
regulations issued and found in part
541, subpart A of this chapter, and further explained in subpart B thereof.
The up-to-40 percent tolerance discussed in § 779.403 for ‘‘administrative
and executive employees’’ of a retail or
service establishment does not apply to
the ‘‘professional employee’’ or the
‘‘outside salesman.’’
STUDENTS, LEARNERS, AND
HANDICAPPED WORKERS
§ 779.405 Statutory provisions.
Section 13(a)(7) of the Act provides
that the provisions of sections 6 and 7
shall not apply to:
Any employee to the extent that such employee is exempted by regulations, order, or
certificate of the Secretary issued under section 14.
Section 14 of the Act provides, in pertinent part, as follows:
LEARNERS, APPRENTICES, STUDENTS, AND
HANDICAPPED WORKERS
SEC. 14. (a) The Secretary of Labor, to the
extent necessary in order to prevent curtailment of opportunities for employment, shall
by regulations or by orders provide for the
employment of learners, of apprentices, and
of messengers employed primarily in delivering letters and messages, under special certificates issued pursuant to regulations of
the Secretary, at such wages lower than the
minimum wage applicable under section 6
and subject to such limitations as to time,
number, proportion, and length of service as
the Secretary shall prescribe.
(b) The Secretary, to the extent necessary
in order to prevent curtailment of opportunities for employment, shall by regulation or
order provide for the employment of fulltime students, regardless of age but in compliance with applicable child labor laws, on a
part-time basis in retail or service establishments (not to exceed twenty hours in any
workweek) or on a part-time or a full-time
basis in such establishments during school
vacations, under special certificates issued
pursuant to regulations of the Secretary, at
a wage rate not less than 85 per centum of
the minimum wage applicable under section
6, except that the proportion of student
hours of employment to total hours of employment of all employees in any establishment may not exceed (1) such proportion for
the corresponding month of the 12-month period preceding May 1, 1961, (2) in the case of
a retail or service establishment whose employees (other than employees engaged in
commerce or in the production of goods for
commerce) are covered by this Act for the
first time on or after the effective date of the
Fair Labor Standards Amendments of 1966,
such proportion for the corresponding month
of the 12-month period immediately prior to
such date, or (3) in the case of a retail or
service establishment coming into existence
after May 1, 1961, or a retail or service establishment for which records of student hours
worked are not available, a proportion of
student hours of employment to total hours
of employment of all employees based on the
practice during the 12-month period preceding May 1, 1961, in (A) similar establishments of the same employer in the same general metropolitan area in which the new establishment is located, (B) similar establishments of the same employer in the same or
nearby counties if the new establishment is
not in a metropolitan area, or (C) other establishments of the same general character
operating in the community or the nearest
comparable community. Before the Secretary may issue a certificate under this subsection he must find that such employment
will not create a substantial probability of
reducing the full-time employment opportunities of persons other than those employed
under this subsection.
*
*
*
*
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(d)(1) Except as otherwise provided in paragraphs (2) and (3) of this subsection, the Secretary of Labor, to the extent necessary in
order to prevent curtailment of opportunities for employment, shall by regulation or
order provide for the employment under special certificates of individuals * * * whose
earning or productive capacity is impaired
by age or physical or mental deficiency or
injury, at wages which are lower than the
minimum wage applicable under section 6 of
this Act but not less than 50 per centum of
such wage and which are commensurate with
those paid nonhandicapped workers in industry in the vicinity for essentially the same
type, quality, and quantity of work.
(2) The Secretary, pursuant to such regulations as he shall prescribe and upon certification of the State agency administering or
supervising the administration of vocational
rehabilitation services, may issue special
certificates for the employment of—
(A) handicapped workers engaged in work
which is incidental to training or evaluation
programs, and
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Wage and Hour Division, Labor
§ 779.408
(B) multihandicapped individuals and
other individuals whose earning capacity is
so severly impaired that they are unable to
engage in competitive employment,
at wages which are less than those required
by this subsection and which are related to
the worker’s productivity.
(3)(A) The Secretary may by regulation or
order provide for the employment of handicapped clients in work activities centers
under special certificates at wages which are
less than the minimums applicable under
section 6 of this Act or prescribed by paragraph (1) of this subsection and which constitute equitable compensation for such clients in work activities centers.
(B) For purposes of this section, the term
‘‘work activities centers’’ shall mean centers
planned and designed exclusively to provide
therapeutic activities for handicapped clients whose physical or mental impairment is
so severe as to make their productive capacity inconsequential.
§ 779.406
‘‘Student-learners’’.
(a) Applicable regulations. In accordance with section 14 of the Act regulations have been issued to provide for
employment under special certificates
of student-learners at wages lower than
the minimum wage applicable under
section 6 of the Act. These regulations
are set forth in part 520 of this chapter
and govern the issuance of special certificates for student-learners in covered employments generally as well as
such employments in retail or service
establishments.
(b) Definitions. The regulations in
§ 520.2 of this chapter define ‘‘studentlearners’’ and ‘‘bona fide vocational
training program’’ as follows:
(1) A student-learner is defined as ‘‘a
student who is receiving instruction in
an accredited school, college or university and who is employed on a parttime basis, pursuant to a bona fide vocational training program.’’
(2) A bona fide vocational training program is defined as ‘‘one authorized and
approved by a State board of vocational education or other recognized
educational body and provides for parttime employment training which may
be scheduled for a part of the workday
or workweek, for alternating weeks or
for other limited periods during the
year, supplemented by and integrated
with a definitely organized plan of instruction designed to teach technical
knowledge and related industrial infor-
mation given as a regular part of the
student-learner’s course by an accredited school, college or university.’’
§ 779.407 Learners
dent-learners’’.
other
than
Regulations have been issued in accordance with the authority in section
14 of the Act to provide for employment under special certificates of
learners at wages lower than the minimum wage applicable under section 6
of the Act. Part 522 of this chapter contains the general regulations for learners and those for learners in particular
industries. General learner regulations
are set forth in §§ 522.1 to 522.11 of this
chapter.
§ 779.408
‘‘Full-time students’’.
The 1961 Amendments added to section 14 of the Act, the authority to
issue special certificates for the employment of ‘‘full-time students,’’
under certain specified conditions, at
wages lower than the minimum wage
applicable under section 6. The student, to qualify for a special certificate
must attend school full time and his
employment must be outside of his
school hours and his employment must
be in a retail or service establishment.
In addition, the student’s employment
must not be of the type ordinarily
given to a full-time employee. ‘‘The
purpose of this provision,’’ as made
clear in the legislative history, ‘‘is to
provide employment opportunities for
students who desire to work part time
outside of their school hours without
the displacement of adult workers’’ (S.
Rept. 145, 87th Cong., first session, p.
29). The application of this provision
was amplified by the 1966 Amendments
to provide for the employment of fulltime students regardless of age but in
compliance with applicable child labor
laws in retail or service establishments
and in agriculture (not to exceed 20
hours in any workweek) or on a parttime or a full-time basis during school
vacations at a wage rate not less than
85 percent of the applicable minimum
wage (H. Rept. 1366, 89th Cong., second
session, pp. 34 and 35). Regulations authorizing the issuance of certificates
under this provision of the Act are published in part 519 of this chapter.
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§ 779.409
29 CFR Ch. V (7–1–19 Edition)
§ 779.409 Handicapped workers.
Regulations have been issued under
the authority in section 14 of the Act
to provide for employment under special certificate of handicapped workers
at wages lower than the minimum
wage applicable under section 6 of the
Act. These regulations are set forth in
part 524 of this chapter. In these regulations handicapped workers are defined as individuals whose earning capacity is impaired by age or physical or
mental deficiency or injury for the
work they are to perform.
EMPLOYEES COMPENSATED PRINCIPALLY
BY COMMISSIONS
§ 779.410 Statutory provision.
Section 7 of the Act provides, in subsection (i):
(i) No employer shall be deemed to have
violated subsection (a) by employing any
employee of a retail or service establishment
for a workweek in excess of the applicable
workweek specified therein, if (1) the regular
rate of pay of such employee is in excess of
one and one-half times the minimum hourly
rate applicable to him under section 6, and
(2) more than half his compensation for a
representative period (not less than 1 month)
represents commissions on goods or services.
In determining the proportion of compensation representing commissions, all earnings
resulting from the application of a bona fide
commission rate shall be deemed commissions on goods or services without regard to
whether the computed commissions exceed
the draw or guarantee.
There are briefly set forth in §§ 779.411
to 779.421 some guiding principles for
determining whether an employee’s
employment and compensation meet
the conditions set forth in section 7(i).
§ 779.411 Employee of a ‘‘retail or service establishment’’.
In order for an employee to come
within the exemption from the overtime pay requirement provided by section 7(i) for certain employees receiving commissions, the employee must
be employed by a retail or service establishment. The term ‘‘retail or service establishment’’ is defined in section
13(a)(2) of the Act. The definition is set
forth in § 779.24; its application is considered at length in subpart D of this
part. As used in section 7(i), as in other
provisions of the Act, the term ‘‘retail
or service establishment’’ means an establishment 75 per centum of whose annual dollar volume of sales of goods or
services (or of both) is not for resale
and is recognized as retail sales or
services in the particular industry.
§ 779.412 Compensation requirements
for overtime pay exemption under
section 7(i).
An employee of a ‘‘retail or service
establishment’’ who is paid on a commission basis or whose pay includes
compensation representing commissions need not be paid the premium
compensation prescribed by section
7(a) for overtime hours worked in a
workweek, provided the following conditions are met:
(a) The ‘‘regular rate’’ of pay of such
employee must be more than one and
one-half times the minimum hourly
rate applicable to him under section 6,
and
(b) More than half his compensation
for a ‘‘representative period’’ (not less
than one month) must represent commissions on goods or services.
§ 779.413 Methods of compensation of
retail store employees.
(a) Retail or service establishment
employees are generally compensated
(apart from any extra payments for
overtime or other additional payments) by one of the following methods:
(1) Straight salary or hourly rate:
Under this method of compensation the
employee receives a stipulated sum
paid weekly, biweekly, semimonthly,
or monthly or a fixed amount for each
hour of work.
(2) Salary plus commission: Under
this method of compensation the employee receives a commission on all
sales in addition to a base salary (see
paragraph (a)(1) of this section).
(3) Quota bonus: This method of compensation is similar to paragraph (a)(2)
of this section except that the commission payment is paid on sales over and
above a predetermined sales quota.
(4) Straight commission without advances: Under this method of compensation the employee is paid a flat
percentage on each dollar of sales he
makes.
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Wage and Hour Division, Labor
§ 779.415
(5) Straight commission with ‘‘advances,’’ ‘‘guarantees,’’ or ‘‘draws.’’
This method of compensation is similar to paragraph (a)(4) of this section
except that the employee is paid a
fixed weekly, biweekly, semimonthly,
or monthly ‘‘advance,’’ ‘‘guarantee,’’ or
‘‘draw.’’ At periodic intervals a settlement is made at which time the payments already made are supplemented
by any additional amount by which his
commission
earnings
exceed
the
amounts previously paid.
(b) The above listing in paragraph (a)
of this section which reflects the typical methods of compensation is not, of
course, exhaustive of the pay practices
which may exist in retail or service establishments. Although typically in retail or service establishments commission payments are keyed to sales, the
requirement of the exemption is that
more than half the employee’s compensation represent commissions ‘‘on
goods or services,’’ which would include all types of commissions customarily based on the goods or services
which the establishment sells, and not
exclusively those measured by ‘‘sales’’
of these goods or services.
§ 779.414 Types of employment in
which this overtime pay exemption
may apply.
Section 7(i) was enacted to relieve an
employer from the obligation of paying
overtime compensation to certain employees of a retail or service establishment paid wholly or in greater part on
the basis of commissions. These employees are generally employed in socalled ‘‘big ticket’’ departments and
those establishments or parts of establishments where commission methods
of payment traditionally have been
used, typically those dealing in furniture, bedding and home furnishings,
floor covering, draperies, major appliances, musical instruments, radios and
television, men’s clothing, women’s
ready to wear, shoes, corsets, home insulation, and various home custom orders. There may be other segments in
retailing where the proportionate
amount of commission payments would
be great enough for employees employed in such segments to come within the exemption. Each such situation
will be examined, where exemption is
claimed, to make certain the employees treated as exempt from overtime
compensation under section 7(i) are
properly within the statutory exclusion.
§ 779.415 Computing employee’s compensation for the representative period.
(a) In determining for purposes of
section 7(i) whether more than half of
an employee’s compensation ‘‘represents commissions on goods or services’’ it is necessary first to total all
compensation paid to or on behalf of
the employee as remuneration for his
employment during the period. All
such compensation in whatever form or
by whatever method paid should be included, whether calculated on a time,
piece, incentive or other basis, and
amounts representing any board, lodging or other facilities furnished should
be included in addition to cash payments, to the extent required by section 3(m) of the Act and part 531 of this
chapter. Payments excludable from the
employee’s ‘‘regular rate’’ under section 7(e) may be excluded from this
computation if, but only if, they are
payments of a kind not made as compensation for his employment during
the period. (See part 778 of this chapter.)
(b) In computing the employee’s total
compensation for the representative
period it will in many instances become clear whether more than half of
it represents commissions. Where this
is not clear, it will be necessary to
identify and total all portions of the
compensation which represent commissions on the goods or services that the
retail or service establishment sells. In
determining what compensation ‘‘represents commissions on goods or services’’ it is clear that any portion of the
compensation paid, as a weekly, biweekly, semimonthly, monthly, or
other periodic salary, or as an hourly
or daily rate of pay, does not ‘‘represent commissions’’ paid to the employee. On the other hand, it is equally
clear that an employee paid entirely by
commissions on the goods or services
which the retail or service establishment sells will, in any representative
period which may be chosen, satisfy
the requirement that more than half of
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§ 779.416
29 CFR Ch. V (7–1–19 Edition)
his compensation represents commissions. The same will be true of an employee receiving both salary and commission payments whose commissions
always exceed the salary. If, on the
other hand, the commissions paid to an
employee receiving a salary are always
a minor part of his total compensation
it is clear that he will not qualify for
the exemption provided by section 7(i).
§ 779.416 What compensation ‘‘represents commissions.’’
(a) Employment arrangements which
provide for a commission on goods or
services to be paid to an employee of a
retail or service establishment may
also provide, as indicated in § 779.413,
for the payment to the employee at a
regular pay period of a fixed sum of
money, which may bear a more or less
fixed relationship to the commission
earnings which could be expected, on
the basis of experience, for an average
period of the same length. Such periodic payments, which are variously described in retail or service establishments as ‘‘advances,’’ ‘‘draws,’’ or
‘‘guarantees,’’ are keyed to a time base
and are usually paid at weekly or other
fixed intervals which may in some instances be different from and more frequent than, the intervals for payment
of any earnings computed exclusively
on a commission basis. They are normally smaller in amount than the commission earnings expected for such a
period and if they prove to be greater,
a deduction of the excess amount from
commission earnings for a subsequent
period, if otherwise lawful, may or may
not be customary under the employment arrangement. A determination of
whether or to what extent such periodic payments can be considered to
represent commissions may be required
in those situations where the employment arrangement is that the employee will be paid the stipulated sum,
or the commission earnings allocable
to the same period, whichever is the
greater amount. The stipulated sum
can never represent commissions, of
course, if it is actually paid as a salary.
If, however, it appears from all the
facts and circumstances of the employment that the stipulated sum is not so
paid and that it actually functions as
an integral part of a true commission
basis of payment, then such compensation may qualify as compensation
which ‘‘represents commissions on
goods or services’’ within the meaning
of clause (2) of the section 7(i) exemption.
(b) The express statutory language of
section 7(i), as amended in 1966, provides that ‘‘In determining the proportion of compensation representing
commissions, all earnings resulting
from the application of a bona fide
commission rate shall be deemed commissions on goods or services without
regard to whether the computed commissions exceed the draw or guarantee’’ which may be paid to the employee. Thus an employee who is paid a
guarantee or draw against commissions
computed in accordance with a bona
fide commission payment plan or formula under which the computed commissions vary in accordance with the
employee’s performance on the job will
qualify for exemption provided the conditions of 7(i)(1) are met as explained in
§ 779.419. Under a bona fide commission
plan all of the computed commissions
will be counted as compensation representing commissions even though the
amount of commissions may not equal
or exceed the guarantee or draw in
some workweeks. The exemption will
also apply in the case of an employee
who is paid a fixed salary plus an additional amount of earned commissions
if the amount of commission payments
exceeds the total amount of salary payments for the representative period.
(c) A commission rate is not bona
fide if the formula for computing the
commissions is such that the employee, in fact, always or almost always earns the same fixed amount of
compensation for each workweek (as
would be the case where the computed
commissions seldom or never equal or
exceed the amount of the draw or guarantee). Another example of a commission plan which would not be considered as bona fide is one in which the
employee receives a regular payment
consituting nearly his entire earnings
which is expressed in terms of a percentage of the sales which the establishment or department can always be
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Wage and Hour Division, Labor
§ 779.417
expected to make with only a slight addition to his wages based upon a greatly reduced percentage applied to the
sales above the expected quota.
§ 779.417 The ‘‘representative period’’
for testing employee’s compensation.
(a)
Whether
compensation
representing
commissions
constitutes
most of an employee’s pay, so as to satisfy the exemption condition contained
in clause (2) or section 7(i), must be determined by testing the employee’s
compensation for a ‘‘representative period’’ of not less than 1 month. The Act
does not define a representative period,
but plainly contemplates a period
which can reasonably be accepted by
the employer, the employee, and disinterested persons as being truly representative of the compensation aspects of the employee’s employment on
which this exemption test depends. A
representative period within the meaning of this exemption may be described
generally as a period which typifies the
total characteristics of an employee’s
earning pattern in his current employment situation, with respect to the
fluctuations of the proportion of his
commission earnings to his total compensation.
(b) To this end the period must be as
recent a period, of sufficient length
(see paragraph (c) of this section) to
fully and fairly reflect all such factors,
as can practicably be used. Thus, as a
general rule, if a month is long enough
to reflect the necessary factors, the
most recent month for which necessary
computations can be made prior to the
payday for the first workweek in the
current month should be chosen. Similarly, if it is necessary to use a period
as long as a calendar or fiscal quarter
year to fully represent such factors,
the quarterly period used should ordinarily be the one ending immediately
prior to the quarter in which the current workweek falls. If a period longer
than a quarter year is required in order
to include all the factors necessary to
make it fully and fairly representative
of the current period of employment
for purposes of section 7(i), the end of
such period should likewise be at least
as recent as the end of the quarter year
immediately preceding the quarter in
which the current workweek falls.
Thus, in the case of a representative
period of 6 months or of 1 year, recomputation each quarter would be required so as to include in it the most
recent two quarter-years or four quarter-years, as the case may be. The
quarterly recomputation would tend to
insure that the period used reflects any
gradual changes in the characteristics
of the employment which could be important in determining the ratio between compensation representing commissions and other compensation in
the current employment situation of
the employee.
(c) The representative period for determining whether more than half of
an employee’s compensation represents
commissions cannot, under the express
terms of section 7(i), be less than 1
month. The period chosen should be
long enough to stabilize the measure of
the balance between the portions of the
employee’s compensation which respectively represent commissions and other
earnings, against purely seasonal or
plainly temporary changes. Although
the Act sets no upper limit on the
length of the period, the statutory intent would not appear to be served by
any recognition of a period in excess of
1 year as representative for purposes of
this exemption. There would seem to
be no employment situation in a retail
or service establishment in which a period longer than a year would be needed to represent the seasonal and other
fluctuations in commission compensation.
(d) Accordingly, for each employee
whose exemption is to be tested in any
workweek under clause (2) of section
7(i), an appropriate representative period or a formula for establishing such
a period must be chosen and must be
designated and substantiated in the
employer’s records (see § 516.16 of this
chapter). When the facts change so
that the designated period or the period established by the designated formula is no longer representative, a new
representative period or formula therefor must be adopted which is appropriate and sufficient for the purpose,
and designated and substantiated in
the employer’s records. Although the
period selected and designated must be
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§ 779.418
29 CFR Ch. V (7–1–19 Edition)
one which is representative with respect to the particular employee for
whom exemption is sought, and the appropriateness of the representative period for that employee will always depend on his individual earning pattern,
there may be situations in which the
factors affecting the proportionate relationship between total compensation
and compensation representing commissions will be substantially identical
for a group or groups of employees in a
particular occupation or department of
a retail or service establishment or in
the establishment as a whole. Where
this can be demonstrated to be a fact,
and is substantiated by pertinent information in the employer’s records, the
same representative period or formula
for establishing such a period may
properly be used for each of the similarly situated employees in the group.
§ 779.418 Grace period for computing
portion
of
compensation
representing commissions.
Where it is not practicably possible
for the employer to compute the commission earnings of the employee for
all workweeks ending in a prior representative period in time to determine
the overtime pay obligations, if any,
for the workweek or workweeks immediately following, 1 month of grace
may be used by the retail or service establishment. This month of grace will
not change the length of the current
period in which the prior period is used
as representative. It will merely allow
an interval of 1 month between the end
of the prior period and the beginning of
the current period in order to permit
necessary computations for the prior
period to be made. For example, assume that the representative period
used is the quarter-year immediately
preceding the current quarter, and
commissions for the prior period cannot be computed in time to determine
the overtime pay obligations for the
workweeks included in the first pay period in the current quarter. By applying a month of grace, the next earlier
quarterly period may be used during
the first month of the current quarter;
and the quarter-year immediately preceding the current quarter will then be
used for all workweeks ending in a
quarter-year period which begins 1
month after the commencement of the
current quarter. Thus, a January 1–
March 31 representative period may be
used for purposes of section 7(i) in a
quarterly period beginning May 1 and
ending July 31, allowing the month of
April for necessary commission computations for the representative period.
Once this method of computation is
adopted it must be used for each successive period in like manner. The
prior period used as representative
must, of course, as in other cases, meet
all the requirements of a representative period as previously explained.
§ 779.419 Dependence of the section
7(i) overtime pay exemption upon
the level of the employee’s ‘‘regular
rate’’ of pay.
(a) If more than half of the compensation of an employee of a retail or
service establishment for a representative period as previously explained represents commissions on goods or services, one additional condition must be
met in order for the employee to be exempt under section 7(i) from the overtime pay requirement of section 7(a) of
the Act in a workweek when his hours
of work exceed the maximum number
specified in section (a). This additional
condition is that his ‘‘regular rate’’ of
pay for such workweek must be more
than one and one-half times the minimum hourly rate applicable to him
from the minimum wage provisions of
section 6 of the Act. If it is not more
than one and one-half times such minimum rate, there is no overtime pay
exemption for the employee in that
particular workweek.
(b) The meaning of the ‘‘regular
rate’’ of pay under the Act is well established. As explained by the Supreme
Court of the United States, it is ‘‘the
hourly rate actually paid the employee
for the normal, nonovertime workweek
for which he is employed’’ and ‘‘by its
very nature must reflect all payments
which the parties have agreed shall be
received regularly during the workweek, exclusive of overtime payments.’’ (Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419.) It is a
rate per hour, computed for the particular workweek by a mathematical
computation in which hours worked
are divided into straight-time earnings
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Wage and Hour Division, Labor
§ 779.501
for such hours to obtain the statutory
regular rate (Overnight Motor Co. v.
Missel, 316 U.S. 572). By definition (Act,
section 7(e), the ‘‘regular rate’’ as used
in section 7 of the Act includes ‘‘all remuneration paid to, or on behalf of, the
employee’’ except payments expressly
excluded by the seven numbered
clauses of section 7(e). The computation of the regular rate for purposes of
the Act is explained in part 778 of this
chapter. The ‘‘regular rate’’ is not synonymous with the ‘‘basic rate’’ which
may be established by agreement or
understanding of the parties to the employment agreement under the provisions of section 7(g)(3) of the Act; that
section, like section 7(i), merely provides an exemption from the general
requirement of overtime compensation
based on the regular rate contained in
section 7(a), if certain prescribed conditions are met (in section 7(g)(3) these
include payment of overtime compensation on a basic rate established
and authorized in accordance with its
terms). The requirement of section 7(i)
with respect to the ‘‘regular rate’’ of
pay of an employee who may come
within the exemption which it provides
is a simple one: ‘‘the regular rate of
pay of such employee,’’ when employed
‘‘for a workweek in excess of the applicable workweek specified’’ in section
7(a), must be ‘‘in excess of one and onehalf times the minimum hourly rate
applicable to him under section 6.’’ The
employee’s ‘‘regular rate’’ of pay must
be computed, in accordance with the
principles discussed above, on the basis
of his hours of work in that particular
workweek and the employee’s compensation attributable to such hours.
The hourly rate thus obtained must be
compared with the applicable minimum rate of pay of the particular employee under the provisions of section 6
of the Act. If the latter rate is $1.60 an
hour, for example, then the employee’s
regular rate must be more than $2.40 an
hour if the exemption is to apply.
§ 779.420
Recordkeeping requirements.
The records which must be kept with
respect to employees for whom the
overtime pay exemption under section
7(i) is taken are specified in § 516.16 of
this chapter.
§ 779.421 Basic rate for computing
overtime compensation of nonexempt employees receiving commissions.
The overtime compensation due employees of a retail or service establishment who do not meet the exemption
requirements of section 7(i) may be
computed under the provisions of section 7(g)(3) of the Act if the employer
and employee agree to do so under the
conditions there provided. Section
7(g)(3) permits the use of a basic rate
established, pursuant to agreement or
understanding in advance of the work,
in lieu of the regular rate for the purpose of computing overtime compensation. The use of such a basic rate for
employees of a retail or service establishment compensated wholly or partly
by commissions is authorized under the
conditions set forth in part 548 of this
chapter.
Subpart F—Other Provisions Which
May Affect Retail Enterprises
GENERAL
§ 779.500 Purpose of subpart.
In Subpart A of this part, reference
was made to a number of regulations
which discuss provisions of the Act,
such as general coverage, overtime
compensation,
joint
employment,
hours worked, and methods of payment
of wages, which are applicable to others as well as to retailers and their employees. (See § 779.6.) In addition to
those provisions, the act contains
other provisions of interest to retailers
and their employees. It is the purpose
of this subpart to focus attention on
several of the more significant provisions in these categories.
EQUAL PAY PROVISIONS
§ 779.501 Statutory provisions.
Section 6(d) of the Act provides:
(1) No employer having employees subject
to any provisions of this section shall discriminate, within any establishment in
which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he
pays wages to employees of the opposite sex
in such establishment for equal work on jobs
the performance of which requires equal
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§ 779.502
29 CFR Ch. V (7–1–19 Edition)
skill, effort, and responsibility, and which
are performed under similar working conditions, except where such payment is made
pursuant to (i) a seniority system; (ii) a
merit system; (iii) a system which measures
earnings by quantity or quality of production; or (iv) a differential based on any other
factor other than sex: Provided, That an employer who is paying a wage rate differential
in violation of this subsection shall not, in
order to comply with the provisions of this
subsection, reduce the wage rate of any employee.
(2) No labor organization, or its agents,
representing employees of an employer having employees subject to any provisions of
this section shall cause or attempt to cause
such an employer to discriminate against an
employee in violation of paragraph (1) of this
subsection.
(3) For purposes of administration and enforcement, any amounts owing to any employee which have been withheld in violation
of this subsection shall be deemed to be unpaid minimum wages or unpaid overtime
compensation under this Act.
(4) As used in this subsection, the term
‘‘labor organization’’ means any organization of any kind, or any agency or employee
representation committee or plan, in which
employees participate and which exists for
the purpose, in whole or in part, of dealing
with employers concerning grievances, labor
disputes, wages, rates of pay, hours of employment, or conditions of work.
Official interpretations of the Department of Labor with respect to the
provisions of section 6(d) are found in
part 800 of this chapter.
CHILD LABOR PROVISIONS
§ 779.502 Statutory provisions; regulations in part 1500 of this title.
(a) The Act’s prohibitions in relation
to employment of child labor, which
may have application to retailers, are
found in section 12(a) and section 12(c).
Section 12(a) reads as follows:
No producer, manufacturer, or dealer shall
ship or deliver for shipment in commerce
any goods produced in an establishment situated in the United States in or about which
within 30 days prior to the removal of such
goods therefrom any oppressive child labor
has been employed: Provided, That any such
shipment or delivery for shipment of such
goods by a purchaser who acquired them in
good faith in reliance on written assurance
from the producer, manufacturer, or dealer
that the goods were produced in compliance
with the requirements of this section, and
who acquired such goods for value without
notice of any such violation, shall not be
deemed prohibited by this subsection and
conviction of a defendant for the shipment or
delivery for shipment of any goods under the
conditions herein prohibited shall be a bar to
any further prosecution against the same defendant for shipments or deliveries for shipment of any such goods before the beginning
of said prosecution.
Section 12(c) provides:
No employer shall employ any oppressive
child labor in commerce or in the production
of goods for commerce or in any enterprise
engaged in commerce or in the production of
goods for commerce.
(b) ‘‘Oppressive child labor’’ is defined by the Act, for purposes of the
foregoing provisions, in the language
set forth in § 779.505.
(c) Sections 570.1 to 570.129 of this
chapter contain applicable regulations
and a detailed discussion of the child
labor provisions of the Act. Although
those sections offer guidance for all including retailers, there are set forth in
§§ 779.503 through 779.508 pertinent provisions and a brief discussion of the
standards which are of particular interest to those in the retail field.
§ 779.503 The retailer and section
12(a).
Section 12(a) prohibits certain shipments or deliveries for shipment by
‘‘producers,’’
‘‘manufacturers’’
‘‘or
dealers.’’ These terms having appeared
in this section prior to the 1961 amendments are defined and described in
§ 570.105 of this chapter, and said definitions remain unchanged. It should be
noted that the term ‘‘manufacturer’’ as
used in section 12(a) includes retailers
who, in addition to retail selling, engage in such manufacturing activities
as the making of slipcovers or curtains,
the baking of bread, the making of
candy, or the making of window
frames. Further, the term ‘‘dealers’’ refers to anyone who deals in goods including persons engaged in buying,
selling, trading, distributing, delivering, etc. ‘‘Dealers,’’ therefore, as used
in section 12(a) include retailers.
Therefore, where a retailer’s business
unit is covered under the Act and he is
a producer, manufacturer or dealer
within the meaning of this section, the
retailer must comply with the requirements of section 12(a). If a retailer’s
business unit which is covered under
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Wage and Hour Division, Labor
§ 779.507
the Act is exempt as a retail or service
establishment under section 13 of the
Act from the monetary requirements of
the Act, the requirements of the child
labor provisions must still be met.
Thus, retail or service establishments,
in covered enterprises, doing less than
$250,000 annually, must comply with
the child labor requirements even if
they are exempt from minimum wage
and overtime provisions under section
13(a)(2) of the Act.
§ 779.504 The retailer and section
12(c).
Section 12(c) was amended in 1961 to
prohibit the employment of oppressive
child labor in any enterprise engaged
in commerce or in the production of
goods for commerce. Thus, employers
in every enterprise which is covered
under the Act must comply with section 12(c) of the child labor provisions
of the Act. As stated in § 779.503, compliance with this provision is necessary
even though the employers in a particular establishment or establishments of a covered enterprise are exempt from the requirement of compensating employees in accordance with
sections 6 and 7 of the Act.
§ 779.505 ‘‘Oppressive child labor’’ defined.
Section 3(1) of the Act defines oppressive child labor as follows:
‘‘Oppressive child labor’’ means a condition
of employment under which (1) any employee
under the age of 16 years is employed by an
employer (other than a parent or a person
standing in place of a parent employing his
own child or a child in his custody under the
age of 16 years in an occupation other than
manufacturing or mining or an occupation
found by the Secretary of Labor to be particularly hazardous for the employment of
children between the ages of 16 and 18 years
or detrimental to their health or well-being)
in any occupation, or (2) any employee between the ages of 16 and 18 years is employed
by an employer in any occupation which the
Secretary of Labor shall find and by order
declare to be particularly hazardous for the
employment of children between such ages
or detrimental to their health or well-being;
but oppressive child labor shall not be
deemed to exist by virtue of the employment
in any occupation of any person with respect
to whom the employer shall have on file an
unexpired certificate issued and held pursuant to regulations of the Secretary of Labor
certifying that such person is above the op-
pressive child labor age. The Secretary of
Labor shall provide by regulation or by order
that the employment of employees between
the ages of 14 and 16 years in occupations
other than manufacturing and mining shall
not be deemed to constitute oppressive child
labor if and to the extent that the Secretary
of Labor determines that such employment
is confined to periods which will not interfere with their schooling and to conditions
which will not interfere with their health
and well-being.
§ 779.506
Sixteen-year minimum.
The Act sets a 16-year minimum for
employment in manufacturing or mining occupations. Furthermore, this age
minimum is applicable to employment
in all other occupations unless otherwise provided by regulation or order
issued by the Secretary.
§ 779.507
Fourteen-year minimum.
(a) Prohibited occupations. With respect to employment in occupations
other than manufacturing and mining,
the Secretary is authorized to issue
regulations or orders lowering the age
minimum to 14 years where he finds
that such employment is confined to
periods which will not interfere with
the minors’ schooling and to conditions
which will not interfere with their
health and well-being. Pursuant to this
authority, the Secretary permits the
employment of 14- and 15-year-old children in a limited number of occupations where the work is performed outside school hours and is confined to
other specified limits. Under the provisions of Child Labor Regulations, subpart C (§§ 570.31 through 570.38 of this
chapter), employment of minors in this
age group is not permitted in the following occupations:
(1) Manufacturing, mining, or processing occupations including occupations requiring the performance of any
duties in a workroom or workplace
where goods are manufactured, mined,
or otherwise processed;
(2) Occupations involving the operation or tending of hoisting apparatus
or of any power-driven machinery
other than office machines;
(3) The operation of motor vehicles or
service as helpers on such vehicles;
(4) Public messenger service;
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§ 779.508
29 CFR Ch. V (7–1–19 Edition)
(5) Occupations declared to be particularly hazardous or detrimental to
health or well-being by the Secretary;
(6) Occupations in connection with (i)
transportation of persons or property
by rail, highway, air, water, pipeline,
or other means; (ii) warehousing and
storage; (iii) communications and public utilities; and (iv) construction (including demolition and repair). Office
and sales work performed in connection with the occupations specified in
this subparagraph is permitted if such
work is not performed on trains or any
other media of transportation or at the
actual site of construction operations.
(b) Permissible occupations; conditions.
Employment of 14- and 15-year-olds in
all occupations other than those in
paragraph (a) of this section is permitted by the regulation under certain
conditions specified in the regulation.
The permissible occupations for minors
between 14 and 16 years of age in retail,
food service, and gasoline service establishments are listed in § 570.34. The
periods and conditions of employment
for such minors are set out in § 570.35.
§ 779.508 Eighteen-year minimum.
To protect young workers from hazardous employment, the Act provides
for a minimum age of 18 years in occupations found and declared by the Secretary to be particularly hazardous or
detrimental to health or well-being of
minors 16 and 17 years of age. These occupations may be found in §§ 570.51
through 570.68 of this chapter. Of particular interest to retailers are
§§ 570.52, 570.58, 570.62 and 570.63 of this
chapter pertaining to the occupations
of motor-vehicle driver and outside
helper, and occupations involving the
operation of power-driven hoisting apparatus, bakery machines, and paper
products machines.
DRIVER OR DRIVER’S HELPER MAKING
LOCAL DELIVERIES
plan has the general purpose and effect of reducing hours worked by such employees to,
or below, the maximum workweek applicable
to them under section 7(a).
This is an exemption from the overtime pay requirements only.
§ 779.510 Conditions that must be met
for section 13(b)(11) exemption.
In order that an employee be exempt
from the overtime provisions of the
Act under section 13(b)(11) he must be
employed as a driver or driver’s helper
making local deliveries, and, he must
be compensated for such employment
on a trip rate basis or other delivery
payment plan, and such plan must be
found by the Secretary to have the
general purpose and effect of reducing
the hours worked by the driver or driver’s helper to, or below, the maximum
workweek applicable to him under section 7(a) of the Act. If all the preceding
conditions are not met the exemption
is inapplicable.
§ 779.511
‘‘Finding by Secretary.’’
As stated in § 779.510, before the section 13(b)(11) exemption may be
claimed, the Secretary must find that
the trip rate basis of compensation, or
other delivery payment plan used to
compensate a driver or a driver’s helper making local deliveries, has the general purpose and effect of reducing the
hours worked by these employees to, or
below, the maximum workweek applicable to them under section 7(a) of the
Act. The conditions under which such
findings may be made, amended, or revoked, and the procedure for obtaining
such a finding are set forth in the regulations in part 551 of this chapter.
RECORDS TO BE KEPT BY EMPLOYERS
§ 779.512 The
tions.
§ 779.509 Statutory provision.
Section 13(b)(11) exempts from the
provisions of section 7 of the Act:
Any employee employed as a driver or
driver’s helper making local deliveries, who
is compensated for such employment on the
basis of trip rates, or other delivery payment
plan, if the Secretary shall find that such
recordkeeping
Every employer who is subject to any
of the provisions of the Act is required
to maintain certain records. The recordkeeping requirements are set forth
in regulations which have been published in subparts A and B of part 516 of
this chapter. Subpart A contains the
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Wage and Hour Division, Labor
Pt. 780
requirements applicable to all employers employing covered employees, including the general requirements relating to the posting of notices, the preservation and location of records and
similar general provisions. Subpart A
also contains the requirements relating
to the records which must be kept for
exempt executive, administrative, and
professional employees and outside
salesmen. Subpart B deals with information and data which must be kept
with respect to employees who are subject to other exemptions and provisions
of the Act.
§ 779.513
Order and form of records.
No particular order or form of
records is prescribed by the regulations. However, the records which the
employer keeps must contain the information and data required by the specific sections of the regulations which
are applicable. In addition, where the
employer claims an exemption from
the minimum wage or overtime or
other requirements of the Act, he
should also maintain those records
which serve to support his claim for exemption, such as records of sales, purchases, and receipts.
§ 779.514 Period
records.
for
preserving
Basic records, such as payroll
records, certificates issued or required
under the Act, and employment agreements and other basic records must be
preserved for at least 3 years. Supplementary records such as time and earnings cards or sheets, wage rate tables,
work time schedules, or order, shipping
and billing records, and similar records
need be preserved for only 2 years.
§ 779.515 Regulations should be consulted.
This discussion in subpart F of this
part is intended only to indicate the
general requirements of the recordkeeping regulations. Each employer
subject to any provision of the Act
should consult the regulations to determine what records he must maintain and the period for which they
must be preserved.
PART 780—EXEMPTIONS APPLICABLE TO AGRICULTURE, PROCESSING OF AGRICULTURAL COMMODITIES, AND RELATED SUBJECTS UNDER THE FAIR LABOR
STANDARDS ACT
Subpart A—Introductory
Sec.
780.0 Purpose of interpretative bulletins in
this part.
780.1 General scope of the Act.
780.2 Exemptions from Act’s requirements.
780.3 Exemptions discussed in this part.
780.4 Matters not discussed in this part.
780.5 Significance of official interpretations.
780.6 Basic support for interpretations.
780.7 Reliance on interpretations.
780.8 Interpretations made, continued, and
superseded by this part.
780.9 Related exemptions are interpreted together.
780.10 Workweek standard in applying exemptions.
780.11 Exempt and nonexempt work during
the same workweek.
780.12 Work exempt under another section
of the Act.
Subpart B—General Scope of Agriculture
INTRODUCTORY
780.100 Scope and significance of interpretative bulletin.
780.101 Matters discussed in this subpart.
780.102 Pay requirements for agricultural
employees.
780.103 ‘‘Agriculture’’ as defined by the Act.
780.104 How modern specialization affects
the scope of agriculture.
780.105 ‘‘Primary’’ and ‘‘secondary’’ agriculture under section 3(f).
EXEMPTION FOR ‘‘PRIMARY’’ AGRICULTURE
GENERALLY
780.106 Employment in ‘‘primary’’ agriculture is farming regardless of why or
where work is performed.
FARMING IN ALL ITS BRANCHES
780.107 Scope of the statutory term.
780.108 Listed activities.
780.109 Determination of whether unlisted
activities are ‘‘farming.’’
CULTIVATION AND TILLIAGE OF THE SOIL
780.110 Operations included in ‘‘cultivation
and tillage of the soil.’’
DAIRYING
780.111
‘‘Dairying’’ as a farming operation.
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AGRICULTURAL OR HORTICULTURAL
COMMODITIES
780.112 General meaning of ‘‘agricultural or
horticultural commodities.’’
780.113 Seeds, spawn, etc.
780.114 Wild commodities.
780.115 Forest products.
780.116 Commodities included by reference
to the Agricultural Marketing Act.
‘‘PRODUCTION, CULTIVATION, GROWING, AND
HARVESTING’’ OF COMMODITIES
780.117
780.118
‘‘Production, cultivation, growing.’’
‘‘Harvesting.’’
RAISING OF LIVESTOCK, BEES, FUR-BEARING
ANIMALS, OR POULTRY
780.119 Employment in the specified operations generally.
780.120 Raising of ‘‘livestock.’’
780.121 What constitutes ‘‘raising’’ of livestock.
780.122 Activities relating to race horses.
780.123 Raising of bees.
780.124 Raising of fur-bearing animals.
780.125 Raising of poultry in general.
780.126 Contract arrangements for raising
poultry.
780.127 Hatchery operations.
780.142 Practices on a farm not related to
farming operations.
780.143 Practices on a farm not performed
for the farmer.
PERFORMANCE OF THE PRACTICE ‘‘AS AN INCIDENT TO OR IN CONJUNCTION WITH’’ THE
FARMING OPERATIONS
780.144 ‘‘As an incident to or in conjunction
with’’ the farming operations.
780.145 The relationship is determined by
consideration of all relevant factors.
780.146 Importance of relationship of the
practice to farming generally.
780.147 Practices performed on farm products—special factors considered.
PRACTICES INCLUDED WHEN PERFORMED AS
PROVIDED IN SECTION 3(f)
780.148 ‘‘Any’’ practices meeting the requirements will qualify for exemption.
780.149 Named practices as well as others
must meet the requirements.
PREPARATION FOR MARKET
780.150 Scope and limits of ‘‘preparation for
market.’’
780.151 Particular operations on commodities.
SPECIFIED DELIVERY OPERATIONS
PRACTICES EXEMPT UNDER ‘‘SECONDARY’’
MEANING OF AGRICULTURE GENERALLY
780.128 General statement on ‘‘secondary’’
agriculture.
780.129 Required relationship of practices to
farming operations.
PRACTICES PERFORMED ‘‘BY A FARMER’’
780.130 Performance ‘‘by a farmer’’ generally.
780.131 Operations which constitute one a
‘‘farmer.’’
780.132 Operations must be performed ‘‘by’’
a farmer.
780.133 Farmers’ cooperative as a ‘‘farmer.’’
PRACTICES PERFORMED ‘‘ON A FARM’’
780.134 Performance ‘‘on a farm’’ generally.
780.135 Meaning of ‘‘farm.’’
780.136 Employment in practices on a farm.
780.152 General scope of specified delivery
operations.
780.153 Delivery ‘‘to storage.’’
780.154 Delivery ‘‘to market.’’
780.155 Delivery ‘‘to carriers for transportation to market.’’
TRANSPORTATION OPERATIONS NOT MENTIONED
IN SECTION 3(f)
780.156 Transportation of farm products
from the fields or farm.
780.157 Other transportation incident to
farming.
OTHER UNLISTED PRACTICES WHICH MAY BE
WITHIN SECTION 3(f)
780.158 Examples of other practices within
section 3(f) if requirements are met.
780.159 Forest products.
Subpart C—Agriculture as It Relates to
Specific Situations
‘‘SUCH FARMING OPERATIONS’’—OF THE
FARMER
780.137 Practices must be performed in connection with farmer’s own farming.
780.138 Application of the general principles.
780.139 Pea vining.
780.140 Place of performing the practice as a
factor.
‘‘SUCH FARMING OPERATIONS’’—ON THE FARM
780.141 Practices must relate to farming operations on the particular farm.
FORESTRY OR LUMBERING OPERATIONS
780.200 Inclusion of forestry or lumbering
operations in agriculture is limited.
780.201 Meaning of ‘‘forestry or lumbering
operations.’’
780.202 Subordination to farming operations
is necessary for exemption.
780.203 Performance of operations on a farm
but not by the farmer.
780.204 Number of employees engaged in operations not material.
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NURSERY AND LANDSCAPING OPERATIONS
780.205 Nursery activities generally.
780.206 Planting and lawn mowing.
780.207 Operations with respect to wild
plants.
780.208 Forest and Christmas tree activities.
780.209 Packing, storage, warehousing, and
sale of nursery products.
HATCHERY OPERATIONS
780.210 The typical hatchery operations constitute ‘‘agriculture.’’
780.211 Contract production of hatching
eggs.
780.212 Hatchery employees working on
farms.
780.213 Produce business.
780.214 Feed sales and other activities.
780.215 Meaning of forestry or lumbering operations.
780.216 Nursery activities generally and
Christmas tree production.
780.217 Forestry activities.
Subpart D—Employment in Agriculture That
Is Exempted From the Minimum Wage
and Overtime Pay Requirements Under
Section 13(a)(6)
STATUTORY PROVISIONS
780.300 Statutory exemptions in section
13(a) (6).
780.301 Other pertinent statutory provisions.
780.302 Basic conditions of section 13(a) (6)
(A).
780.303 Exemption applicable on employee
basis.
780.304 ‘‘Employed by an employer.’’
780.305 500 man-day provision.
780.306 Calendar quarter of the preceding
calendar year defined.
780.307 Exemption for employer’s immediate family.
780.308 Definition of immediate family.
780.309 Man-day exclusion.
780.310 Exemption for local hand harvest laborers.
780.311 Basic conditions of section 13(a) (6)
(C).
780.312 ‘‘Hand harvest laborer’’ defined.
780.313 Piece rate basis.
780.314 Operations customarily * * * paid on
a piece rate basis * * *.
780.315 Local hand harvest laborers.
780.316 Thirteen week provision.
780.317 Man-day exclusion.
780.318 Exemption for nonlocal minors.
780.319 Basic conditions of exemption.
780.320 Nonlocal minors.
780.321 Minors 16 years of age or under.
780.322 Is employed on the same farm as his
parent or persons standing in the place of
his parent.
780.323 Exemption for range production of
livestock.
780.324 Requirements for the exemption to
apply.
780.325 Principally engaged.
780.326 On the range.
780.327 Production of livestock.
780.328 Meaning of livestock.
780.329 Exempt work.
780.330 Sharecroppers and tenant farmers.
780.331 Crew leaders and labor contractors.
780.332 Exchange of labor between farmers.
Subpart E—Employment in Agriculture of
Irrigation That Is Exempted From the
Overtime Pay Requirements Under
Section 13(b)(12)
780.400 Statutory provisions.
780.401 General explanatory statement.
780.402 The general guides for applying the
exemption.
780.403 Employee basis of exemption under
section 13(b) (12).
780.404 Activities of the employer considered in some situations.
THE IRRIGATION EXEMPTION
780.405 Exemption is direct and does not
mean activities are agriculture.
780.406 Exemption is from overtime only.
780.407 System must be nonprofit or operated on a share-crop basis.
780.408 Facilities of system at least 90 percent of which was used for agricultural
purposes.
780.409 Employment ‘‘in connection with
the operation or maintenance’’ is exempt.
Subpart F—Employment or Agricultural Employees in Processing Shade-Grown
Tobacco; Exemption From Minimum
Wage and Overtime Pay Requirements
Under Section 13(a) (14)
INTRODUCTORY
780.500 Scope and significance of interpretative bulletin.
780.501 Statutory provision.
780.502 Legislative history of exemption.
780.503 What determines the application of
the exemption.
REQUIREMENTS FOR EXEMPTION
780.504
Basic conditions of exemption.
SHADE-GROWN TOBACCO
780.505 Definition of ‘‘shade-grown tobacco.’’
780.506 Dependence of exemption on shadegrown tobacco operations.
780.507 ‘‘Such tobacco.’’
780.508 Application of the exemption.
780.509 Agriculture.
780.510 ‘‘Any agricultural employee.’’
780.511 Meaning of ‘‘agricultural employee.’’
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780.512 ‘‘Employed in the growing and harvesting.’’
780.513 What employment in growing and
harvesting is sufficient.
780.514 ‘‘Growing’’ and ‘‘harvesting.’’
EXEMPT PROCESSING
780.515 Processing requirements of section
13(a) (14).
780.516 ‘‘Prior to the stemming process.’’
780.517 ‘‘For use as Cigar-wrapper tobacco.’’
780.518 Exempt processing operations.
780.519 General scope of exempt operations.
780.520 Particular operations which may be
exempt.
780.521 Other processing operations.
780.522 Nonprocessing employees.
Subpart G—Employment in Agriculture and
Livestock Auction Operations Under
the Section 13(b)(13) Exemption
INTRODUCTORY
780.600 Scope and significance of interpretative bulletin.
780.601 Statutory provision.
780.602 General explanatory statement.
REQUIREMENTS FOR EXEMPTION
780.603 What determines application of exemption.
780.604 General requirements.
780.605 Employment in agriculture.
780.606 Interpretation
of
term
‘‘agriculture.’’
780.607 ‘‘Primarily employed’’ in agriculture.
780.608 ‘‘During his workweek.’’
780.609 Workweek unit in applying the exemption.
780.610 Workweek exclusively in exempt
work.
780.611 Workweek
exclusively
in
agriculture.
780.612 Employment by a ‘‘farmer.’’
780.613 ‘‘By such farmer.’’
780.614 Definition of a farmer.
780.615 Raising of livestock.
780.616 Operations included in raising livestock.
780.617 Adjunct livestock auction operations.
780.618 ‘‘His own account’’—‘‘in conjunction
with other farmers.’’
780.619 Work ‘‘in connection with’’ livestock
auction operations.
780.620 Minimum wage for livestock auction
work.
EFFECT OF EXEMPTION
780.621
No overtime wages in exempt week.
Subpart H—Employment by Small Country
Elevators Within Area of Production;
Exemption From Overtime Pay Requirements Under Section 13(b)(14)
INTRODUCTORY
780.700 Scope and significance of interpretative bulletin.
780.701 Statutory provision.
780.702 What determines application of the
exemption.
780.703 Basic requirements for exemption.
ESTABLISHMENT COMMONLY RECOGNIZED AS A
COUNTRY ELEVATOR
780.704 Dependence of exemption on nature
of employing establishment.
780.705 Meaning of ‘‘establishment.’’
780.706 Recognition of character of establishment.
780.707 Establishments ‘‘commonly recognized’’ as country elevators.
780.708 A country elevator is located near
and serves farmers.
780.709 Size and equipment of a country elevator.
780.710 A country elevator may sell products and services to farmers.
780.711 Exemption of mixed business applies
only to country elevators.
EMPLOYMENT OF ‘‘NO MORE THAN FIVE
EMPLOYEES’’
780.712 Limitation of exemption to establishments with five or fewer employees.
780.713 Determining the number of employees generally.
780.714 Employees employed ‘‘in such operations’’ to be counted.
780.715 Counting employees ‘‘employed in
the establishment.’’
EMPLOYEES ‘‘EMPLOYED * * * BY’’ THE
COUNTRY ELEVATOR ESTABLISHMENT
780.716 Exemption of employees ‘‘employed
* * * by’’ the establishment.
780.717 Determining whether there is employment ‘‘by’’ the establishment.
780.718 Employees who may be exempt.
780.719 Employees not employed ‘‘by’’ the
elevator establishment.
EMPLOYMENT ‘‘WITHIN THE AREA OF
PRODUCTION’’
780.720 ‘‘Area of production’’ requirement of
exemption.
WORKWEEK APPLICATION OF EXEMPTION
780.721 Employment in the particular workweek as test of exemption.
780.722 Exempt workweeks.
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Wage and Hour Division, Labor
Pt. 780
780.723 Exempt and nonexempt employment.
780.724 Work exempt under another section
of the Act.
780.903 General scope of exemption.
780.904 What determines the exemption.
780.905 Employers who may claim exemption.
Subpart I—Employment in Ginning of Cotton and Processing of Sugar Beets,
Sugar-Beet Molasses, Sugarcane, or
Maple Sap Into Sugar or Syrup; Exemption From Overtime Pay Requirements Under Section 13(b)(15)
EXEMPT OPERATIONS ON FRUITS OR
VEGETABLES
INTRODUCTORY
780.800 Scope and significance of interpretative bulletin.
780.801 Statutory provisions.
780.802 What determines application of the
exemption.
780.803 Basic conditions of exemption; first
part, ginning of cotton.
780.906 Requisites for exemption generally.
780.907 ‘‘Fruits or vegetables.’’
780.908 Relation of employee’s work to specified transportation.
780.909 ‘‘Transportation.’’
780.910 Engagement in transportation and
preparation.
780.911 Preparation for transportation.
780.912 Exempt preparation.
780.913 Nonexempt preparation.
780.914 ‘‘From the farm.’’
780.915 ‘‘Place of first processing.’’
780.916 ‘‘Place of * * * first marketing.’’
780.917 ‘‘Within the same State.’’
GINNING OF COTTON FOR MARKET
780.804 ‘‘Ginning’’ of cotton.
780.805 Ginning of ‘‘cotton.’’
780.806 Exempt ginning limited to first
processing.
780.807 Cotton must be ginned ‘‘for market.’’
EMPLOYEES ‘‘ENGAGED IN’’ GINNING
780.808 Who may qualify for the exemption
generally.
780.809 Employees engaged in exempt operations.
780.810 Employees not ‘‘engaged in’’ ginning.
COUNTY WHERE COTTON IS GROWN IN
COMMERCIAL QUANTITIES
780.811 Exemption dependent upon place of
employment generally.
780.812 ‘‘County.’’
780.813 ‘‘County where cotton is grown.’’
780.814 ‘‘Grown in commercial quantities.’’
780.815 Basic conditions of exemption; second part, processing of sugar beets,
sugar-beet molasses, sugarcane, or maple
sap.
780.816 Processing of specific commodities.
780.817 Employees engaged in processing.
780.818 Employees not engaged in processing.
780.819 Production must be of unrefined
sugar or syrup.
Subpart J—Employment in Fruit and Vegetable Harvest Transportation; Exemption From Overtime Pay Requirements
Under Section 13(b)(16)
INTRODUCTORY
780.900 Scope and significance of interpretative bulletin.
780.901 Statutory provisions.
780.902 Legislative history of exemption.
EXEMPT TRANSPORTATION OF FRUIT OR
VEGETABLE HARVEST EMPLOYEES
780.918 Requisites for exemption generally.
780.919 Engagement ‘‘in transportation’’ of
harvest workers.
780.920 Workers transported must be fruit or
vegetable harvest workers.
780.921 Persons ‘‘employed or to be employed’’ in fruit or vegetable harvesting.
780.922 ‘‘Harvesting’’ of fruits or vegetables.
780.923 ‘‘Between the farm and any point
within the same State.’’
Subpart K—Employment of Homeworkers
in Making Wreaths; Exemption From
Minimum Wage, Overtime Compensation, and Child Labor Provisions Under
Section 13(d)
INTRODUCTORY
780.1000 Scope and significance of interpretative bulletin.
780.1001 General explanatory statement.
REQUIREMENTS FOR EXEMPTION
780.1002 Statutory requirements.
780.1003 What determines the application of
the exemption.
780.1004 General requirements.
780.1005 Homeworkers.
780.1006 In or about a home.
780.1007 Exemption
is
inapplicable
if
wreath-making is not in or about a
home.
780.1008 Examples of places not considered
homes.
780.1009 Wreaths.
780.1010 Principally.
780.1011 Evergreens.
780.1012 Other evergreens.
780.1013 Natural evergreens.
780.1014 Harvesting.
780.1015 Other forest products.
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§ 780.0
29 CFR Ch. V (7–1–19 Edition)
780.1016 Use of evergreens and forest products.
AUTHORITY: Secs. 1–19, 52 Stat. 1060, as
amended; 75 Stat. 65; 29 U.S.C. 201–219. Pub.
L. 105–78, 111 Stat. 1467.
SOURCE: 37 FR 12084, June 17, 1972, unless
otherwise noted.
Subpart A—Introductory
§ 780.0 Purpose of interpretative bulletins in this part.
It is the purpose of the interpretative
bulletins in this part to provide an official statement of the views of the Department of Labor with respect to the
application and meaning of the provisions of the Fair Labor Standards Act
of 1938, as amended, which exempt certain employees from the minimum
wage or overtime pay requirements, or
both, when employed in agriculture or
in certain related activities or in certain operations with respect to agricultural or horticultural commodities.
§ 780.1
General scope of the Act.
The Fair Labor Standards Act is a
Federal statute of general application
which establishes minimum wage,
overtime pay, equal pay, and child
labor requirements that apply as provided in the Act. These requirements
are applicable, except where exemptions are provided, to employees in
those workweeks when they are engaged in interstate or foreign commerce or in the production of goods for
such commerce or are employed in enterprises so engaged within the meaning of definitions set forth in the Act.
Employers having such employees are
required to comply with the Act’s provisions in this regard unless relieved
therefrom by some exemption in the
Act, and with specified recordkeeping
requirements contained in part 516 of
this chapter. The law authorizes the
Department of Labor to investigate for
compliance and, in the event of violations, to supervise the payment of unpaid minimum wages or unpaid overtime compensation owing to any employee. The law also provides for enforcement in the courts.
§ 780.2 Exemptions from Act’s requirements.
The Act provides a number of specific
exemptions from the general requirements described in § 780.1. Some are exemptions from the overtime provisions
only. Others are from the child labor
provisions only. Several are exemptions from both the minimum wage and
the overtime requirements of the Act.
Finally, there are some exemptions
from all three—minimum wage, overtime pay, and child labor requirements.
An employer who claims an exemption
under the Act has the burden of showing that it applies (Walling v. General
Industries Co., 330 U.S. 545; Mitchell v.
Kentucky Finance Co., 359 U.S. 290).
Conditions specified in the language of
the Act are ‘‘explicit prerequisites to
exemption’’ (Arnold v. Kanowsky, 361
U.S. 388). ‘‘The details with which the
exemptions in this Act have been made
preclude their enlargement by implication’’ and ‘‘no matter how broad the
exemption, it is meant to apply only
to’’ the specified activities (Addison v.
Holly Hill, 322 U.S. 607; Maneja v.
Waialua, 349 U.S. 254). Exemptions provided in the Act ‘‘are to be narrowly
construed against the employer seeking to assert them’’ and their application limited to those who come ‘‘plainly and unmistakably within their
terms and spirit’’ (Phillips v. Walling,
334 U.S. 490; Mitchell v. Kentucky Finance Co., 359 U.S. 290; Arnold v.
Kanowsky, 361 U.S. 388).
§ 780.3 Exemptions discussed in this
part.
(a) The specific exemptions which the
Act provides for employment in agriculture and in certain operations more
or less closely connected with the agricultural industry are discussed in this
part 780. These exemptions differ substantially in their terms, scope, and
methods of application. Each of them
is therefore separately considered in a
subpart of this part which, together
with this subpart A, constitutes the official interpretative bulletin of the Department of Labor with respect to that
exemption. Exemptions from minimum
wages and overtime pay and the subparts in which they are considered include the section 13(a)(6) exemptions
for employees on small farms, family
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Wage and Hour Division, Labor
§ 780.6
members, local hand harvest laborers,
migrant hand harvest workers under
16, and range production employees discussed in subpart D of this part, and
the section 13(a)(14) exemption for agricultural employees processing shadegrown tobacco discussed in subpart F
of this part.
(b) Exemptions from the overtime
pay provisions and the subparts in
which these exemptions are discussed
include the section 13(b)(12) exemption
(agriculture and irrigation) discussed
in subpart E of this part, the section
13(b)(13) exemption (agriculture and
livestock auction operations) discussed
in subpart G of this part, the section
13(b)(14) exemption (country elevators)
discussed in subpart H of this part, the
section 13(b)(15) exemption (cotton ginning and sugar processing) discussed in
subpart I of this part, and the section
13(b)(16) exemption (fruit and vegetable
harvest transportation) discussed in
subpart J of this part.
(c) An exemption in section 13(d) of
the Act from the minimum wage, overtime pay, and child labor provisions for
certain homeworkers making holly and
evergreen wreaths is discussed in subpart K of this part.
§ 780.4 Matters not discussed in this
part.
The application of provisions of the
Fair Labor Standards Act other than
the exemptions referred to in § 780.3 is
not considered in this part 780. Interpretative bulletins published elsewhere
in the Code of Federal Regulations deal
with such subjects as the general coverage of the Act (part 776 of this chapter) and of the child labor provisions
(subpart G of part 1500 of this title
which includes a discussion of the exemption for children employed in agriculture outside of school hours), partial overtime exemptions provided for
industries of a seasonal nature under
sections 7(c) and 7(d) (part 526 of this
chapter) and for industries with
marked seasonal peaks of operations
under section 7(d) (part 526 of this
chapter), methods of payment of wages
(part 531 of this chapter), computation
and payment of overtime compensation
(part 778 of this chapter), and hours
worked (part 785 of this chapter). Regulations on recordkeeping are contained
in part 516 of this chapter and regulations defining exempt administrative,
executive, and professional employees,
and outside salesmen are contained in
part 541 of this chapter. Regulations
and interpretations on other subjects
concerned with the application of the
Act are listed in the table of contents
to this chapter. Copies of any of these
documents may be obtained from any
office of the Wage and Hour Division.
§ 780.5 Significance of official interpretations.
The regulations in this part contain
the official interpretations of the Department of Labor with respect to the
application
under
described
circumstances of the provisions of law
which they discuss. These interpretations indicate the construction of the
law which the Secretary of Labor and
the Administrator believe to be correct
and which will guide them in the performance of their duties under the Act
unless and until they are otherwise directed by authoritative decisions of the
courts or conclude, upon reexamination of an interpretation, that it is incorrect.
§ 780.6 Basic support for interpretations.
The ultimate decisions on interpretations of the Act are made by the courts
(Mitchell v. Zachry, 362 U.S. 310;
Kirschbaum v. Walling, 316 U.S. 517).
Court decisions supporting interpretations contained in this bulletin are
cited where it is believed they may be
helpful. On matters which have not
been determined by the courts, it is
necessary for the Secretary of Labor
and the Administrator to reach conclusions as to the meaning and the application of provisions of the law in order
to carry out their responsibilities of
administration
and
enforcement
(Skidmore v. Swift, 323 U.S. 134). In order
that these positions may be made
known to persons who may be affected
by them, official interpretations are
issued by the Administrator on the advice of the Solicitor of Labor, as authorized by the Secretary (Reorg. Pl. 6
of 1950, 64 Stat. 1263; Gen. Ord. 45A,
May 24, 1950; 15 FR 3290; Secretary’s
Order 13–71, May 4, 1971, FR; Secretary’s Order 15–71, May 4, 1971, FR).
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§ 780.7
29 CFR Ch. V (7–1–19 Edition)
Interpretative rules under the Act as
amended in 1966 are also authorized by
section 602 of the Fair Labor Standards
Amendments of 1966 (80 Stat. 830),
which provides: ‘‘On and after the date
of the enactment of this Act the Secretary is authorized to promulgate necessary rules, regulations, or orders
with regard to the amendments made
by this Act.’’ As included in the regulations in this part, these interpretations
are believed to express the intent of
the law as reflected in its provisions
and as construed by the courts and evidenced by its legislative history. References to pertinent legislative history
are made in this bulletin where it appears that they will contribute to a
better understanding of the interpretations.
§ 780.7 Reliance on interpretations.
The interpretations of the law contained in this part are official interpretations which may be relied upon as
provided in section 10 of the Portal-toPortal Act of 1947. In addition, the Supreme Court has recognized that such
interpretations of this Act ‘‘provide a
practical guide to employers and employees as to how the office representing the public interest in its enforcement will seek to apply it’’ and
‘‘constitute a body of experience and
informed judgment to which courts and
litigants may properly resort for guidance.’’ Further, as stated by the Court:
‘‘Good administration of the Act and
good judicial administration alike require that the standards of public enforcement and those for determining
private rights shall be at variance only
where justified by very good reasons.’’
(Skidmore v. Swift, 323 U.S. 134). Some of
the interpretations in this part are interpretations of exemption provisions
as they appeared in the original Act before amendment in 1949, 1961, and 1966,
which have remained unchanged because they are consistent with the
amendments. These interpretations
may be said to have congressional
sanction because ‘‘When Congress
amended the Act in 1949 it provided
that pre-1949 rulings and interpretations by the Administrator should remain in effect unless inconsistent with
the statute as amended. 63 Stat. 920.’’
(Mitchell v. Kentucky Finance Co., 359
U.S. 290; accord, Maneja v. Waialua, 349
U.S. 254.)
§ 780.8 Interpretations made, continued, and superseded by this part.
On and after publication of this part
780 in the FEDERAL REGISTER, the interpretations contained therein shall be in
effect and shall remain in effect until
they are modified, rescinded, or withdrawn. This part supersedes and replaces the interpretations previously
published in the FEDERAL REGISTER
and Code of Federal Regulations as this
part 780. Prior opinions, rulings, and
interpretations and prior enforcement
policies which are not inconsistent
with the interpretations in this part or
with the Fair Labor Standards Act as
amended by the Fair Labor Standards
Amendments of 1966 are continued in
effect; all other opinions, rulings, interpretations, and enforcement policies
on the subjects discussed in the interpretations in this part are rescinded
and withdrawn. The interpretations in
this part provide statements of general
principles applicable to the subjects
discussed and illustrations of the application of these principles to situations
that frequently arise. They do not and
cannot refer specifically to every problem which may be met in the consideration of the exemptions discussed. The
omission to discuss a particular problem in this part or in interpretations
supplementing it should not be taken
to indicate the adoption of any position by the Secretary of Labor or the
Administrator with respect to such
problem or to constitute an administrative interpretation or practice or
enforcement policy. Questions on matters not fully covered by this bulletin
may be addressed to the Administrator
of the Wage and Hour Division, U.S.
Department of Labor, Washington, DC
20210, or to any Regional Office of the
Division.
§ 780.9 Related exemptions are interpreted together.
The interpretations contained in the
several subparts of this part 780 consider separately a number of exemptions which affect employees who perform activities in or connected with
agriculture and its products. These exemptions deal with related subject
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Wage and Hour Division, Labor
§ 780.12
matter and varying degrees of relationships between them were the subject of
consideration in Congress before their
enactment. Together they constitute
an expression in some detail of existing
Federal policy on the lines to be drawn
in the industries connected with agriculture and agricultural products between those employees to whom the
pay provisions of the Act are to be applied and those whose exclusion in
whole or in part from the Act’s requirements has been deemed justified. The
courts have indicated that these exemptions, because of their relationship
to one another, should be construed together insofar as possible so that they
form a consistent whole. Consideration
of the language and history of a related
exemption or exemptions is helpful in
ascertaining the intended scope and application of an exemption whose effect
might otherwise not be clear (Addison
v. Holly Hill, 322 U.S. 607; Maneja v.
Waialua, 349 U.S. 254; Bowie v. Gonzales
(C.A. 1), 117 F. 2d 11). In the interpretations of the several exemptions discussed in the various subparts of this
part 780, effect has been given to these
principles and each exemption has been
considered in its relation to others in
the group as well as to the combined
effect of the group as a whole.
§ 780.10 Workweek standard in applying exemptions.
The workweek is the unit of time to
be taken as the standard in determining the applicability of an exemption. An employee’s workweek is a
fixed and regularly recurring period of
168 hours—seven consecutive 24-hour
periods. It need not coincide with the
calendar week. If in any workweek an
employee does only exempt work, he is
exempt from the wage and hour provisions of the Act during that workweek,
irrespective of the nature of his work
in any other workweek or workweeks.
An employee may thus be exempt in 1
workweek and not in the next. But the
burden of effecting segregation between exempt and nonexempt work as
between particular workweeks is upon
the employer.
§ 780.11 Exempt and nonexempt work
during the same workweek.
Where an employee in the same
workweek performs work which is exempt under one section of the Act and
also engages in work to which the Act
applies but is not exempt under some
other section of the Act, he is not exempt that week, and the wage and hour
requirements of the Act are applicable
(see Mitchell v. Hunt, 263 F. 2d 913;
Mitchell v. Maxfield, 12 WH Cases 792
(S.D. Ohio), 29 Labor Cases 69, 781; Jordan v. Stark Bros. Nurseries, 45 F. Supp.
769; McComb v. Puerto Rico Tobacco Marketing Co-op Ass’n, 80 F. Supp. 953, affirmed 181 F. 2d 697; Walling v. Peacock
Corp., 58 F. Supp. 880–883). On the other
hand, an employee who performs exempt activities during a workweek will
not lose the exemption by virtue of the
fact that he performs other activities
outside the scope of the exemption if
the other activities are not covered by
the Act.
§ 780.12 Work exempt under another
section of the Act.
The combination (tacking) of exempt
work under one exemption with exempt
work under another exemption is permitted. For instance, the overtime pay
requirements are not considered applicable to an employee who does work
within section 13(b)(12) for only part of
a workweek if all of the covered work
done by him during the remainder of
the workweek is within one or more
equivalent exemptions under other provisions of the Act. If the scope of such
exemptions is not the same, however,
the exemption applicable to the employee is equivalent to that provided
by whichever exemption provision is
more limited in scope. For instance, an
employee who devotes part of a workweek to work within section 13(b)(12)
and the remainder to work exempt
under section 7(c) must receive the
minimum wage and must be paid time
and one-half for his overtime work during that week for hours over 10 a day or
50 a week, whichever provides the
greater compensation. Each activity is
tested separately under the applicable
exemption as though it were the sole
activity of the employee for the whole
workweek in question. The availability
of a combination exemption depends on
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§ 780.100
29 CFR Ch. V (7–1–19 Edition)
whether the employee meets all the requirements of each exemption which is
sought to combine.
Subpart B—General Scope of
Agriculture
INTRODUCTORY
§ 780.100 Scope and significance of interpretative bulletin.
Subpart A of this part 780, this subpart B and subparts C, D, and E of this
part together constitute the official interpretative bulletin of the Department of Labor with respect to the
meaning and application of sections
3(f), 13(a)(6), and 13(b)(12) of the Fair
Labor Standards Act of 1938, as amended. Section 3(f) defines ‘‘agriculture’’
as the term is used in the Act. Section
13(a)(6) provides exemption from the
minimum wage and overtime pay provisions of the Act for certain employees employed in ‘‘agriculture,’’ as so
defined. Section 13(b)(12) provides an
overtime exemption for any employee
employed in agriculture. As appears
more fully in subpart A of this part 780,
interpretations in this bulletin with respect to the provisions of the Act discussed are official interpretations upon
which reliance may be placed and
which will guide the Secretary of
Labor and the Administrator in the
performance of their duties under the
Act.
§ 780.101 Matters discussed in this subpart.
Section 3(f) defines ‘‘agriculture’’ as
this term is used in the Act. Those
principles and rules which govern the
interpretation of the meaning and application of the Act’s definition of
‘‘agriculture’’ in section 3(f) and of the
terms used in it are set forth in this
subpart B. Included is a discussion of
the application of the definition in section 3(f) to the employees of farmers’
cooperative associations. In addition,
the official interpretations of section
3(f) of the Act and the terms which appear in it are to be taken into consideration in determining the meaning intended by the use of like terms in particular related exemptions which are
provided by the Act.
§ 780.102 Pay requirements for agricultural employees.
Section 6(a)(5) of the Act provides
that any employee employed in agriculture must be paid at least $1.30 an
hour beginning February 1, 1969. However, there are certain exemptions provided in the Act for agricultural workers, as previously mentioned. (See
§§ 780.3 and 780.4.)
§ 780.103 ‘‘Agriculture’’ as defined by
the Act.
Section 3(f) of the Act defines ‘‘agriculture’’ as follows:
‘‘Agriculture’’ includes farming in all its
branches and among other things includes
the cultivation and tillage of the soil, dairying, the production, cultivation, growing,
and harvesting of any agricultural or horticultural commodities (including commodities defined as agricultural commodities in
section 15(g) of the Agricultural Marketing
Act, as amended), the raising of livestock,
bees, fur-bearing animals, or poultry, and
any practices (including any forestry or lumbering operations) performed by a farmer or
on a farm as an incident to or in conjunction
with such farming operations, including
preparation for market, delivery to storage
or to market or to carriers for transportation to market.
§ 780.104 How modern specialization
affects the scope of agriculture.
The effect of modern specialization
on agriculture has been discussed by
the U.S. Supreme Court as follows:
Whether a particular type of activity is agricultural depends, in large measure, upon
the way in which that activity is organized
in a particular society. The determination
cannot be made in the abstract. In less advanced societies the agricultural function includes many types of activity which, in others, are not agricultural. The fashioning of
tools, the provision of fertilizer, the processing of the product, to mention only a few
examples, are functions which, in some societies, are performed on the farm by farmers
as part of their normal agricultural routine.
Economic progress, however, is characterized by a progressive division of labor and
separation of function. Tools are made by a
tool manufacturer, who specializes in that
kind of work and supplies them to the farmer. The compost heap is replaced by factory
produced fertilizers. Power is derived from
electricity and gasoline rather than supplied
by the farmer’s mules. Wheat is ground at
the mill. In this way functions which are
necessary to the total economic process of
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Wage and Hour Division, Labor
§ 780.107
supplying an agricultural produce become, in
the process of economic development and
specialization, separate and independent productive functions operated in conjunction
with the agricultural function but no longer
a part of it. Thus the question as to whether
a particular type of activity is agricultural
is not determined by the necessity of the activity to agriculture nor by the physical similarity of the activity to that done by farmers in other situations. The question is
whether the activity in the particular case is
carried on as part of the agricultural function or is separately organized as an independent productive activity. The farmhand
who cares for the farmer’s mules or prepares
his fertilizer is engaged in agriculture. But
the maintenance man in a powerplant and
the packer in a fertilizer factory are not employed in agriculture, even if their activity
is necessary to farmers and replaces work
previously done by farmers. The production
of power and the manufacture of fertilizer
are independent productive functions, not
agriculture (see Farmers Reservoir Co. v.
McComb, 337 U.S. 755 cf. Maneja v. Waialua,
349 U.S. 254).
§ 780.105 ‘‘Primary’’ and ‘‘secondary’’
agriculture under section 3(f).
(a) Section 3(f) of the Act contains a
very comprehensive definition of the
term ‘‘agriculture.’’ The definition has
two distinct branches (see Farmers Reservoir Co. v. McComb, 337 U.S. 755). One
has relation to the primary meaning of
agriculture; the other gives to the term
a somewhat broader secondary meaning for purposes of the Act (NLRB v.
Olaa Sugar Co., 242 F. 2d 714).
(b) First, there is the primary meaning. This includes farming in all its
branches. Listed as being included
‘‘among other things’’ in the primary
meaning are certain specific farming
operations such as cultivation and tillage of the soil, dairying the production, cultivation, growing and harvesting of any agricultural or horticultural commodities and the raising
of livestock, bees, fur-bearing animals
or poultry. If an employee is employed
in any of these activities, he is engaged
in agriculture regardless of whether he
is employed by a farmer or on a farm.
(Farmers Reservoir Co. v. McComb, supra;
Holtville Alfalfa Mills v. Wyatt, 230 F. 2d
398.)
(c) Then there is the secondary meaning of the term. The second branch includes operations other than those
which fall within the primary meaning
of the term. It includes any practices,
whether or not they are themselves
farming practices, which are performed
either by a farmer or on a farm as an
incident to or in conjunction with
‘‘such’’ farming operations (Farmers
Reservoir Co. v. McComb, supra; NLRB v.
Olaa Sugar Co., 242 F. 2d 714; Maneja v.
Waialua, 349 U.S. 254).
(d) Employment not within the scope
of either the primary or the secondary
meaning of ‘‘agriculture’’ as defined in
section 3(f) is not employment in agriculture. In other words, employees not
employed in farming or by a farmer or
on a farm are not employed in agriculture.
EXEMPTION FOR ‘‘PRIMARY’’
AGRICULTURE GENERALLY
§ 780.106 Employment in ‘‘primary’’ agriculture is farming regardless of
why or where work is performed.
When an employee is engaged in direct farming operations included in the
primary definition of ‘‘agriculture,’’
the purpose of the employer in performing the operations is immaterial.
For example, where an employer owns
a factory and a farm and operates the
farm only for experimental purposes in
connection with the factory, those employees who devote all their time during a particular workweek to the direct
farming operations, such as the growing and harvesting of agricultural commodities, are considered as employed
in agriculture. It is also immaterial
whether the agricultural or horticultural commodities are grown in enclosed houses, as in greenhouses or
mushroom cellars, or in an open field.
Similarly, the mere fact that production takes place in a city or on industrial premises, such as in hatcheries,
rather than in the country or on premises possessing the normal characteristics of a farm makes no difference (see
Jordan v. Stark Brothers Nurseries, 45 F.
Supp. 769; Miller Hatcheries v. Boyer, 131
F. 2d 283; Damutz v. Pinchbeck, 158 F. 2d
882).
FARMING IN ALL ITS BRANCHES
§ 780.107 Scope of the statutory term.
The language ‘‘farming in all its
branches’’
includes
all
activities,
whether listed in the definition or not,
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§ 780.108
29 CFR Ch. V (7–1–19 Edition)
which constitute farming or a branch
thereof under the facts and circumstances.
§ 780.108
Listed activities.
Section 3(f), in defining the practices
included as ‘‘agriculture’’ in its statutory secondary meaning, refers to the
activities specifically listed in the earlier portion of the definition (the ‘‘primary’’ meaning) as ‘‘farming’’ operations. They may therefore be considered as illustrative of ‘‘farming in all
its branches’’ as used in the definition.
§ 780.109 Determination of whether
unlisted activities are ‘‘farming.’’
Unlike the specifically enumerated
operations, the phrase ‘‘farming in all
its branches’’ does not clearly indicate
its scope. In determining whether an
operation constitutes ‘‘farming in all
its branches,’’ it may be necessary to
consider various circumstances such as
the nature and purpose of the operations of the employer, the character
of the place where the employee performs his duties, the general types of
activities there conducted, and the purpose and function of such activities
with respect to the operations carried
on by the employer. The determination
may involve a consideration of the
principles contained in § 780.104. For example, fish farming activities fall within the scope of the meaning of ‘‘farming in all its branches’’ and employers
engaged in such operations would be
employed in agriculture. On the other
hand, so-called ‘‘bird dog’’ operations
of the citrus fruit industry consisting
of the purchase of fruit unsuitable for
packing and of the transportation and
sale of the fruit to canning plants do
not qualify as ‘‘farming’’ and, consequently, employees engaged in such
operations are not employed in agriculture. (See Chapman v. Durkin, 214 F.
2d 360 cert. denied 348 U.S. 897; Fort
Mason Fruit Co. v. Durkin, 214 F. 2d 363
cert. denied, 348 U.S. 897.) However, employees gathering the fruit at the
groves are considered agricultural
workers because they are engaged in
harvesting operations. (For exempt
transportation, see subpart J of this
part.)
CULTIVATION AND TILLAGE OF THE SOIL
§ 780.110 Operations included in ‘‘cultivation and tillage of the soil.’’
‘‘Cultivation and tillage of the soil’’
includes all the operations necessary to
prepare a suitable seedbed, eliminate
weed growth, and improve the physical
condition of the soil. Thus, grading or
leveling land or removing rock or other
matter to prepare the ground for a
proper seedbed or building terraces on
farmland to check soil erosion are included. The application of water, fertilizer, or limestone to farmland is also
included. (See in this connection
§§ 780.128 et seq. Also see Farmers Reservoir Co. v. McComb, 337 U.S. 755.)
Other operations such as the commercial production and distribution of fertilizer are not included within the
scope of agriculture. (McComb v. SuperA Fertilizer Works, 165 F. 2d 824; Farmers
Reservoir Co. v. McComb, 337 U.S. 755.)
DAIRYING
§ 780.111 ‘‘Dairying’’ as a farming operation.
‘‘Dairying’’ includes the work of caring for and milking cows or goats. It
also includes putting the milk in containers, cooling it, and storing it where
done on the farm. The handling of milk
and cream at receiving stations is not
included. Such operations as separating cream from milk, bottling milk
and cream, or making butter and
cheese may be considered as ‘‘dairying’’ under some circumstances, or
they may be considered practices under
the ‘‘secondary’’ meaning of the definition when performed by a farmer or on
a farm, if they are not performed on
milk produced by other farmers or produced on other farms. (See the discussions in §§ 780.128 et seq.)
AGRICULTURAL OR HORTICULTURAL
COMMODITIES
§ 780.112 General meaning of ‘‘agriculture or horticultural commodities.’’
Section 3(f) of the Act defines as
‘‘agriculture’’ the ‘‘production, cultivation, growing, and harvesting’’ of ‘‘agricultural or horticultural commodities,’’ and employees employed in such
operations are engaged in agriculture.
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Wage and Hour Division, Labor
§ 780.116
In general, within the meaning of the
Act, ‘‘agricultural or horticultural
commodities’’ refers to commodities
resulting from the application of agricultural or horticultural techniques.
Insofar as the term refers to products
of the soil, it means commodities that
are planted and cultivated by man.
Among such commodities are the following: Grains, forage crops, fruits,
vegetables, nuts, sugar crops, fiber
crops, tobacco, and nursery products.
Thus, employees engaged in growing
wheat, corn, hay, onions, carrots, sugar
cane, seed, or any other agricultural or
horticultural commodity are engaged
in ‘‘agriculture.’’ In addition to such
products of the soil, however, the term
includes domesticated animals and
some of their products such as milk,
wool, eggs, and honey. The term does
not include commodities produced by
industrial techniques, by exploitation
of mineral wealth or other natural resources, or by uncultivated natural
growth. For example, peat humus or
peat moss is not an agricultural commodity. Wirtz v. Ti Ti Peat Humus Co.,
373 f(2d) 209 (C.A.4).
§ 780.113 Seeds, spawn, etc.
Seeds and seedlings of agricultural
and horticultural plants are considered
‘‘agricultural or horticultural commodities.’’ Thus, since mushrooms and
beans are considered ‘‘agricultural or
horticultural commodities,’’ the spawn
of mushrooms and bean sprouts are
also so considered and the production,
cultivation, growing, and harvesting of
mushroom spawn or bean sprouts is
‘‘agriculture’’ within the meaning of
section 3(f).
§ 780.114 Wild commodities.
Employees engaged in the gathering
or harvesting of wild commodities such
as mosses, wild rice, burls and laurel
plants, the trapping of wild animals, or
the appropriation of minerals and
other uncultivated products from the
soil are not employed in ‘‘the production, cultivation, growing, and harvesting of agricultural or horticultural
commodities.’’ However, the fact that
plants or other commodities actually
cultivated by men are of a species
which ordinarily grows wild without
being cultivated does not preclude
them from being classed as ‘‘agricultural or horticultural commodities.’’
Transplanted branches which were cut
from plants growing wild in the field or
forest are included within the term.
Cultivated blueberries are also included.
§ 780.115 Forest products.
Trees grown in forests and the lumber derived therefrom are not ‘‘agricultural or horticultural commodities.’’ Christmas trees, whether wild
or planted, are also not so considered.
It follows that employment in the production, cultivation, growing, and harvesting of such trees or timber products is not sufficient to bring an employee within section 3(f) unless the operation is performed by a farmer or on
a farm as an incident to or in conjunction with his or its farming operations.
On the latter point, see §§ 780.160
through 780.164 which discuss the question of when forestry or lumbering operations are incident to or in conjunction with farming operations so as to
constitute ‘‘agriculture.’’ For a discussion of the exemption in section
13(a)(13) of the Act for certain forestry
and logging operations in which not
more than eight employees are employed, see part 788 of this chapter.
[74 FR 26014, May 29, 2009]
§ 780.116 Commodities included by reference to the Agricultural Marketing Act.
(a) Section 3(f) expressly provides
that the term ‘‘agricultural or horticultural commodities’’ shall include
the commodities defined as agricultural commodities in section 15(g) of
the Agricultural Marketing Act, as
amended (12 U.S.C. 1141–1141j). Section
15(g) of that Act provides: ‘‘As used in
this act, the term ‘agricultural commodity’ includes, in addition to other
agricultural commodities, crude gum
(oleoresin) from a living tree, and the
following products as processed by the
original producers of the crude gum
(oleoresin) from which derived: Gum
spirits of turpentine, and gum resin, as
defined in the Naval Stores Act, approved March 3, 1923’’ (7 U.S.C. 91–99).
As defined in the Naval Stores Act,
‘‘ ‘gum spirits of turpentine’ means
spirits of turpentine made from gum
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§ 780.117
29 CFR Ch. V (7–1–19 Edition)
(oleoresin) from a living tree’’ and
‘‘ ‘gum rosin’ means rosin remaining
after the distillation of gum spirits of
turpentine.’’ The production of these
commodities is therefore within the
definition of ‘‘agriculture.’’
(b) Since the only oleoresin included
within section 15(g) of the Agricultural
Marketing Act is that derived from a
living tree, the production of oleoresin
from stumps or any sources other than
living trees is not within section 3(f). If
turpentine or rosin is produced in any
manner other than the processing of
crude gum from living trees, as by
digging up pine stumps and grinding
them or by distilling the turpentine
with steam from the oleoresin within
or extracted from the wood, the production of the turpentine or rosin is
not included in section 3(f).
(c) Similarly, the production of gum
turpentine or gum rosin is not included
when these are produced by anyone
other than the original producer of the
crude gum from which they are derived. Thus, if a producer of turpentine
or rosin from oleoresin from living
trees makes such products not only
from oleoresin produced by him but
also from oleoresin delivered to him by
others, he is not producing a product
defined as an agricultural commodity
and employees engaged in his production operations are not agricultural
employees. (For an explanation of the
inclusion of the word ‘‘production’’ in
section 3(f), see § 780.117(b).) It is to be
noted, however, that the production of
gum turpentine and gum rosin from
crude gum (oleoresin) derived from a
living tree is included within section
3(f) when performed at a central still
for and on account of the producer of
the crude gum. But where central stills
buy the crude gum they process and
are the owners of the gum turpentine
and gum rosin that are derived from
such crude gum and which they market
for their own account, the production
of such gum turpentine and gum rosin
is not within section 3(f).
‘‘PRODUCTION, CULTIVATION, GROWING,
AND HARVESTING’’ OF COMMODITIES
§ 780.117 ‘‘Production,
growing.’’
cultivation,
(a) The words ‘‘production, cultivation, growing’’ describe actual raising
operations which are normally intended or expected to produce specific
agricultural or horticultural commodities. The raising of such commodities
is included even though done for purely
experimental purposes. The ‘‘growing’’
may take place in growing media other
than soil as in the case of hydroponics.
The words do not include operations
undertaken or conducted for purposes
not concerned with obtaining any specific agricultural or horticultural commodity. Thus operations which are
merely preliminary, preparatory or incidental to the operations whereby
such commodities are actually produced are not within the terms ‘‘production, cultivation, growing’’. For example, employees of a processor of
vegetables who are engaged in buying
vegetable plants and distributing them
to farmers with whom their employer
has acreage contracts are not engaged
in the ‘‘production, cultivation, growing’’ of agricultural or horticultural
commodities. The furnishing of mushroom spawn by a canner of mushrooms
to growers who supply the canner with
mushrooms grown from such spawn
does not constitute the ‘‘growing’’ of
mushrooms. Similarly, employees of
the employer who is engaged in servicing insecticide sprayers in the farmer’s orchard and employees engaged in
such operations as the testing of soil or
genetics research are not included
within the terms. (However, see
§§ 780.128, et seq., for possible exemption
on other grounds.) The word ‘‘production,’’ used in conjunction with ‘‘cultivation, growing, and harvesting,’’ refers, in its natural and unstrained
meaning, to what is derived and produced from the soil, such as any farm
produce. Thus, ‘‘production’’ as used in
section 3(f) does not refer to such operations as the grinding and processing
of sugarcane, the milling of wheat into
flour, or the making of cider from apples. These operations are clearly the
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Wage and Hour Division, Labor
§ 780.120
processing of the agricultural commodities and not the production of them
(Bowie v. Gonzalez, 117 F. 2d 11).
(b) The word ‘‘production’’ was added
to the definition of ‘‘agriculture’’ in
order to take care of a special situation—the production of turpentine and
gum rosins by a process involving the
tapping of living trees. (See S. Rep. No.
230, 71st Cong., second sess. (1930); H.R.
Rep. No. 2738, 75th Cong., third sess. p.
29 (1938).) To insure the inclusion of
this process within the definition, the
word ‘‘production’’ was added to section 3(f) in conjunction with the words
‘‘including commodities defined as agricultural commodities in section 15(g)
of the Agricultural Marketing Act, as
amended’’ (Bowie v. Gonzalez, 117 F. 2d
11). It is clear, therefore, that ‘‘production’’ is not used in section 3(f) in the
artificial and special sense in which it
is defined in section 3(j). It does not exempt an employee merely because he is
engaged in a closely related process or
occupation directly essential to the
production of agricultural or horticultural commodities. To so construe
the term would render unnecessary the
remainder of what Congress clearly intended to be a very elaborate and comprehensive definition of ‘‘agriculture.’’
The legislative history of this part of
the definition was considered by the
U.S. Supreme Court in reaching these
conclusions in Farmers Reservoir Co. v.
McComb, 337 U.S. 755.
§ 780.118 ‘‘Harvesting.’’
(a) The term ‘‘Harvesting’’ as used in
section 3(f) includes all operations customarily performed in connection with
the removal of the crops by the farmer
from their growing position (Holtville
Alfalfa Mills v. Wyatt, 230 F. 2d 398;
NLRB v. Olaa Sugar Co., 242 F. 2d 714).
Examples include the cutting of grain,
the picking of fruit, the stripping of
bluegrass seed, and the digging up of
shrubs and trees grown in a nursery.
Employees engaged on a plantation in
gathering sugarcane as soon as it has
been cut, loading it, and transporting
the cane to a concentration point on
the farm are engaged in ‘‘Harvesting’’
(Vives v. Serralles, 145 F. 2d 552).
(b) The combining of grain is exempt
either as harvesting or as a practice
performed on a farm in conjunction
with or as an incident to farming operations. (See in this connection Holtville
Alfalfa Mills v. Wyatt, 230 F. 2d 398.)
‘‘Harvesting’’ does not extend to operations subsequent to and unconnected
with the actual process whereby agricultural or horticultural commodities
are severed from their attachment to
the soil or otherwise reduced to possession. For example, the processing of
sugarcane into raw sugar (Bowie v.
Gonzalez, 117 F. 2d 11, and see Maneja v.
Waialua, 349 U.S. 254), or the vining of
peas are not included. For a further
discussion on vining employees, see
§ 780.139. While transportation to a concentration point on the farm may be
included, ‘‘harvesting’’ never extends
to transportation or other operations
off the farm. Off-the-farm transportation can only be ‘‘agriculture’’ when
performed by the farmer as an incident
to his farming operations (Chapman v.
Durkin, 214 F. 2d 360 cert. denied 348
U.S. 897; Fort Mason Fruit Co. v. Durkin,
214 F. 2d 363 cert. denied 348 U.S. 897).
For further discussion of this point, see
§§ 780.144 through 780.147; §§ 780.152
through 780.157.
RAISING OF LIVESTOCK, BEES, FURBEARING ANIMALS, OR POULTRY
§ 780.119 Employment in the specified
operations generally.
Employees are employed in the raising of livestock, bees, fur-bearing animals or poultry only if their operations
relate to animals of the type named
and constitute the ‘‘raising’’ of such
animals. If these two requirements are
met, it makes no difference for what
purpose the animals are raised or
where the operations are performed.
For example, the fact that cattle are
raised to obtain serum or virus or that
chicks are hatched in a commercial
hatchery does not affect the status of
the operations under section 3(f).
§ 780.120
Raising of ‘‘livestock.’’
The meaning of the term ‘‘livestock’’
as used in section 3(f) is confined to the
ordinary use of the word and includes
only domestic animals ordinarily
raised or used on farms. That Congress
did not use this term in its generic
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§ 780.121
29 CFR Ch. V (7–1–19 Edition)
sense is supported by the specific enumeration of activities, such as the raising of fur-bearing animals, which
would be included in the generic meaning of the word. The term includes the
following animals, among others: Cattle (both dairy and beef cattle), sheep,
swine, horses, mules, donkeys, and
goats. It does not include such animals
as albino and other rats, mice, guinea
pigs, and hamsters, which are ordinarily used by laboratories for research
purposes (Mitchell v. Maxfield, 12 WH
Cases 792 (S.D. Ohio), 29 Labor Cases 68,
781). Fish are not ‘‘livestock’’ (Dunkly
v. Erich, 158 F. 2d 1), but employees employed in propagating or farming of
fish may qualify for exemption under
section 13(a)(6) or 13(b)(12) of the Act as
stated in § 780.109 as well as under section 13(a)(5), as explained in part 784 of
this chapter.
§ 780.121 What constitutes ‘‘raising’’ of
livestock.
The term ‘‘raising’’ employed with
reference to livestock in section 3(f) includes such operations as the breeding,
fattening, feeding, and general care of
livestock. Thus, employees exclusively
engaged in feeding and fattening livestock in stock pens where the livestock
remains for a substantial period of
time are engaged in the ‘‘raising’’ of
livestock. The fact that the livestock
is purchased to be fattened and is not
bred on the premises does not characterize the fattening as something other
than the ‘‘raising’’ of livestock. The
feeding and care of livestock does not
necessarily or under all circumstances
constitute the ‘‘raising’’ of such livestock, however. It is clear, for example,
that animals are not being ‘‘raised’’ in
the pens of stockyards or the corrals of
meat packing plants where they are
confined for a period of a few days
while en route to slaughter or pending
their sale or shipment. Therefore, employees employed in these places in
feeding and caring for the constantly
changing group of animals cannot reasonably be regarded as ‘‘raising’’ livestock (NLRB v. Tovrea Packing Co., 111
F. 2d 626, cert. denied 311 U.S. 668;
Walling v. Friend, 156 F. 2d 429). Employees of a cattle raisers’ association
engaged in the publication of a magazine about cattle, the detection of cat-
tle thefts, the location of stolen cattle,
and apprehension of cattle thieves are
not employed in raising livestock and
are not engaged in agriculture.
§ 780.122 Activities relating to race
horses.
Employees engaged in the breeding,
raising, and training of horses on farms
for racing purposes are considered agricultural employees. Included are such
employees as grooms, attendants, exercise boys, and watchmen employed at
the breeding or training farm. On the
other hand, employees engaged in the
racing, training, and care of horses and
other activities performed off the farm
in connection with commercial racing
are not employed in agriculture. For
this purpose, a training track at a
racetrack is not a farm. Where a farmer is engaged in both the raising and
commercial racing of race horses, the
activities performed off the farm by his
employees as an incident to racing,
such as the training and care of the
horses, are not practices performed by
the farmer in his capacity as a farmer
or breeder as an incident to his raising
operations. Employees engaged in the
feeding, care, and training of horses
which have been used in commercial
racing and returned to a breeding or
training farm for such care pending
entry in subsequent races are employed
in agriculture.
§ 780.123 Raising of bees.
The term ‘‘raising of * * * bees’’ refers to all of those activities customarily performed in connection with the
handling and keeping of bees, including
the treatment of disease and the raising of queens.
§ 780.124 Raising of fur-bearing animals.
(a) The term ‘‘fur-bearing animals’’
has reference to animals which bear fur
of marketable value and includes,
among other animals, rabbits, silver
foxes, minks, squirrels, and muskrats.
Animals whose fur lacks marketable
value, such as albino and other rats,
mice, guinea pigs, and hamsters, are
not ‘‘fur-bearing animals’’ which within the meaning of section 3(f).
(b) The term ‘‘raising’’ of fur-bearing
animals includes all those activities
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Wage and Hour Division, Labor
§ 780.128
customarily performed in connection
with breeding, feeding and caring for
fur-bearing animals, including the
treatment of disease. Such treatment
of disease has reference only to disease
of the animals being bred and does not
refer to the use of such animals or
their fur in experimenting with disease
or treating diseases in others. The fact
that muskrats or other fur-bearing animals are propagated in open water or
marsh areas rather than in pens does
not prevent the raising of such animals
from constituting the ‘‘raising of furbearing animals.’’ Where wild fur-bearing animals propagate in their native
habitat and are not raised as above described, the trapping or hunting of
such animals and activities incidental
thereto are not included within section
3(f).
§ 780.125 Raising of poultry in general.
(a) The term ‘‘poultry’’ includes domesticated fowl and game birds. Ducks
and pigeons are included. Canaries and
parakeets are not included.
(b) The ‘‘raising’’ of poultry includes
the breeding, hatching, propagating,
feeding, and general care of poultry.
Slaughtering, which is the antithesis of
‘‘raising,’’ is not included. To constitute
‘‘agriculture,’’
slaughtering
must come within the secondary meaning of the term ‘‘agriculture.’’ The
temporary feeding and care of chickens
and other poultry for a few days pending sale, shipment or slaughter is not
the ‘‘raising’’ of poultry. However,
feeding, fattening and caring for poultry over a substantial period may constitute the ‘‘raising’’ of poultry.
§ 780.126 Contract arrangements for
raising poultry.
Feed dealers and processors sometimes enter into contractual arrangements with farmers under which the
latter agree to raise to marketable size
baby chicks supplied by the former who
also undertake to furnish all the required feed and possibly additional
items. Typically, the feed dealer or
processor retains title to the chickens
until they are sold. Under such an arrangement, the activities of the farmers and their employees in raising the
poultry are clearly within section 3(f).
The activities of the feed dealer or
processor, on the other hand, are not
‘‘raising of poultry’’ and employees engaged in them cannot be considered agricultural employees on that ground.
Employees of the feed dealer or processor who perform work on a farm as
an incident to or in conjunction with
the raising of poultry on the farm are
employed in ‘‘secondary’’ agriculture
(see §§ 780.137 et seq. and Johnston v. Cotton Producers Assn., 244 F. 2d 553).
§ 780.127
Hatchery operations.
Hatchery operations incident to the
breeding of poultry, whether performed
in a rural or urban location, are the
‘‘raising of poultry’’ (Miller Hatcheries
v. Boyer, 131 F. 2d 283). The application
of section 3(f) to employees of hatcheries is further discussed in §§ 780.210
through 780.214.
EXEMPT
UNDER
‘‘SECPRACTICES
ONDARY’’ MEANING OF AGRICULTURE
GENERALLY
§ 780.128 General statement on ‘‘secondary’’ agriculture.
The discussion in §§ 780.106 through
780.127 relates to the direct farming operations which come within the ‘‘primary’’ meaning of the definition of
‘‘agriculture.’’ As defined in section 3(f)
‘‘agriculture’’ includes not only the
farming activities described in the
‘‘primary’’ meaning but also includes,
in its ‘‘secondary’’ meaning, ‘‘any practices (including any forestry or lumbering operations) performed by a
farmer or on a farm as an incident to
or in conjunction with such farming
operations, including preparation for
market delivery to storage or to market or to carriers for transportation to
market.’’
The
legislative
history
makes it plain that this language was
particularly included to make certain
that independent contractors such as
threshers of wheat, who travel around
from farm to farm to assist farmers in
what is recognized as a purely agricultural task and also to assist a farmer
in getting his agricultural goods to
market in their raw or natural state,
should be included within the definition of agricultural employees (see
Bowie v. Gonzalez, 117 F. 2d 11; 81 Cong.
Rec. 7876, 7888).
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§ 780.129
29 CFR Ch. V (7–1–19 Edition)
§ 780.129 Required
relationship
of
practices to farming operations.
To come within this secondary meaning, a practice must be performed either by a farmer or on a farm. It must
also be performed either in connection
with the farmer’s own farming operations or in connection with farming
operations conducted on the farm
where the practice is performed. In addition, the practice must be performed
‘‘as an incident to or in conjunction
with’’ the farming operations. No matter how closely related it may be to
farming operations, a practice performed neither by a farmer nor on a
farm is not within the scope of the
‘‘secondary’’ meaning of ‘‘agriculture.’’
Thus, employees employed by commission brokers in the typical activities
conducted at their establishments,
warehouse employees at the typical tobacco warehouses, shop employees of
an employer engaged in the business of
servicing machinery and equipment for
farmers, plant employees of a company
dealing in eggs or poultry produced by
others, employees of an irrigation company engaged in the general distribution of water to farmers, and other employees similarly situated do not generally come within the secondary
meaning of ‘‘agriculture.’’ The inclusion of industrial operations is not
within the intent of the definition in
section 3(f), nor are processes that are
more akin to manufacturing than to
agriculture (see Bowie v. Gonzales, 117
F. 2d 11; Fleming v. Hawkeye Pearl Button Co., 113 F. 2d 52; Holtville Alfalfa
Mills v. Wyatt, 230 F. 2d 398; Maneja v.
Waialua, 349 U.S. 254; Mitchell v. Budd,
350 U.S. 473).
PRACTICES PERFORMED ‘‘BY A FARMER’’
§ 780.130 Performance ‘‘by a farmer’’
generally.
Among other things, a practice must
be performed by a farmer or on a farm
in order to come within the secondary
portion of the definition of ‘‘agriculture.’’ No precise lines can be drawn
which will serve to delimit the term
‘‘farmer’’ in all cases. Essentially, however, the term is an occupational title
and the employer must be engaged in
activities of a type and to the extent
that the person ordinarily regarded as
a ‘‘farmer’’ is engaged in order to qualify for the title. If this test is met, it
is immaterial for what purpose he engages in farming or whether farming is
his sole occupation. Thus, an employer’s status as a ‘‘farmer’’ is not altered
by the fact that his only purpose is to
obtain products useful to him in a nonfarming enterprise which he conducts.
For example, an employer engaged in
raising nursery stock is a ‘‘farmer’’ for
purposes of section 3(f) even though his
purpose is to supply goods for a separate establishment where he engages in
the retail distribution of nursery products. The term ‘‘farmer’’ as used in section 3(f) is not confined to individual
persons. Thus an association, a partnership, or a corporation which engages in actual farming operations
may be a ‘‘farmer’’ (see Mitchell v.
Budd, 350 U.S. 473). This is so even
where it operates ‘‘what might be
called the agricultural analogue of the
modern industrial assembly line’’
(Maneja v. Waialua, 349 U.S. 254).
§ 780.131 Operations which constitute
one a ‘‘farmer.’’
Generally, an employer must undertake farming operations of such scope
and significance as to constitute a distinct activity, for the purpose of yielding a farm product, in order to be regarded as a ‘‘farmer.’’ It does not necessarily follow, however, that any employer is a ‘‘farmer’’ simply because he
engages in some actual farming operations of the type specified in section
3(f). Thus, one who merely harvests a
crop of agricultural commodities is not
a ‘‘farmer’’ although his employees
who actually do the harvesting are employed in ‘‘agriculture’’ in those weeks
when exclusively so engaged. As a general rule, a farmer performs his farming operations on land owned, leased,
or controlled by him and devoted to his
own use. The mere fact, therefore, that
an employer harvests a growing crop,
even under a partnership agreement
pursuant to which he provides credit,
advisory or other services, is not generally considered to be sufficient to
qualify the employer so engaged as a
‘‘farmer.’’ Such an employer would
stand, in packing or handling the product, in the same relationship to the
produce as if it were from the fields or
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Wage and Hour Division, Labor
§ 780.134
groves of an independent grower. One
who engaged merely in practices which
are incidental to farming is not a
‘‘farmer.’’ For example, a company
which merely prepares for market,
sells, and ships flowers and plants
grown and cultivated on farms by affiliated corporations is not a ‘‘farmer.’’
The fact that one has suspended actual
farming operations during a period in
which he performs only practices incidental to his part or prospective farming operations does not, however, preclude him from qualifying as a ‘‘farmer.’’ One otherwise qualified as a farmer does not lose his status as such because he performs farming operations
on land which he does not own or control, as in the case of a cattleman
using public lands for grazing.
§ 780.132 Operations must be performed ‘‘by’’ a farmer.
‘‘Farmer’’ includes the employees of
a farmer. It does not include an employer merely because he employs a
farmer or appoints a farmer as his
agent to do the actual work. Thus, the
stripping of tobacco, i.e., removing
leaves from the stalk, by the employees of an independent warehouse is not
a practice performed ‘‘by a farmer’’
even though the warehouse acts as
agent for the tobacco farmer or employs the farmer in the stripping operations. One who merely performs services or supplies materials for farmers
in return for compensation in money or
farm products is not a ‘‘farmer.’’ Thus,
a person who provides credit and management services to farmers cannot
qualify as a ‘‘farmer’’ on that account.
Neither can a repairman who repairs
and services farm machinery qualify as
a ‘‘farmer’’ on that basis. Where crops
are grown under contract with a person
who provides a market, contributes
counsel and advice, make advances and
otherwise assists the grower who actually produces the crop, it is the grower
and not the person with whom he contracts who is the farmer with respect
to that crop (Mitchell v. Huntsville Nurseries, 267 F. 2d 286).
§ 780.133 Farmers’ cooperative as a
‘‘farmer.’’
(a) The phrase ‘‘by a farmer’’ covers
practices performed either by the farm-
er himself or by the farmer through his
employees. Employees of a farmers’ cooperative association, however, are employed not by the individual farmers
who compose its membership or who
are its stockholders, but by the cooperative association itself. Cooperative associations whether in the corporate
form or not, are distinct, separate entities from the farmers who own or compose them. The work performed by a
farmers’ cooperative association is not
work performed ‘‘by a farmer’’ but for
farmers. Therefore, employees of a
farmers’ cooperative association are
not generally engaged in any practices
performed ‘‘by a farmer’’ within the
meaning of section 3(f) (Farmers Reservoir Co. v. McComb, 337 U.S. 755; Goldberg v. Crowley Ridge Ass’n., 295 F. 2d 7;
McComb v. Puerto Rico Tobacco Marketing Co-op Ass’n., 80 F. Supp. 953, 181
F. 2d 697). The legislative history of the
Act supports this interpretation. Statutes usually cite farmers’ cooperative
associations in express terms if it is intended that they be included. The
omission of express language from the
Fair Labor Standards Act is significant
since many unsuccessful attempts were
made on the floor of Congress to secure
special treatment for such cooperatives.
(b) It is possible that some farmers’
cooperative associations may themselves engage in actual farming operations to an extent and under circumstances sufficient to qualify as a
‘‘farmer.’’ In such case, any of their
employees who perform practices as an
incident to or in conjunction with such
farming operations are employed in
‘‘agriculture.’’
PRACTICES PERFORMED ‘‘ON A FARM’’
§ 780.134 Performance
generally.
‘‘on
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farm’’
If a practice is not performed by a
farmer, it must, among other things,
be performed ‘‘on a farm’’ to come
within the secondary meaning of ‘‘agriculture’’ in section 3(f). Any practice
which cannot be performed on a farm,
such as ‘‘delivery to market,’’ is necessarily excluded, therefore, when performed by someone other than a farmer
(see Farmers Reservoir Co. v. McComb,
337 U.S. 755; Chapman v. Durkin, 214 F.
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§ 780.135
29 CFR Ch. V (7–1–19 Edition)
2d 360, cert. denied 348 U.S. 897; Fort
Mason Fruit Co. v. Durkin, 214 F. 2d 363,
cert. denied 348 U.S. 897). Thus, employees of an alfalfa dehydrator engaged in hauling chopped or unchopped
alfalfa away from the farms to the dehydrating plant are not employed in a
practice performed ‘‘on a farm.’’
§ 780.135 Meaning of ‘‘farm.’’
A ‘‘farm’’ is a tract of land devoted
to the actual farming activities included in the first part of section 3(f).
Thus, the gathering of wild plants in
the woods for transplantation in a
nursery is not an operation performed
‘‘on a farm.’’ (For a further discussion,
see § 780.207.) The total area of a tract
operated as a unit for farming purposes
is included in the ‘‘farm,’’ irrespective
of the fact that some of this area may
not be utilized for actual farming operations (see NLRB v. Olaa Sugar Co., 242
F. 2d 714; In re Princeville Canning Co.,
14 WH Cases 641 and 762). It is immaterial whether a farm is situated in the
city or in the country. However, a
place in a city where no primary farming operations are performed is not a
farm even if operated by a farmer
(Mitchell v. Huntsville Nurseries, 267 F.
2d 286).
§ 780.136 Employment in practices on
a farm.
Employees engaged in building terraces or threshing wheat and other
grain, employees engaged in the erection of silos and granaries, employees
engaged in digging wells or building
dams for farm ponds, employees engaged in inspecting and culling flocks
of poultry, and pilots and flagmen engaged in the aerial dusting and spraying of crops are examples of the types
of employees of independent contractors who may be considered employed
in practices performed ‘‘on a farm.’’
Whether such employees are engaged in
‘‘agriculture’’ depends, of course, on
whether the practices are performed as
an incident to or in conjunction with
the farming operations on the particular farm, as discussed in §§ 780.141
through 780.147; that is, whether they
are carried on as a part of the agricultural function or as a separately organized productive activity (§§ 780.104
through 780.144). Even though an em-
ployee may work on several farms during a workweek, he is regarded as employed ‘‘on a farm’’ for the entire
workweek if his work on each farm pertains solely to farming operations on
that farm. The fact that a minor and
incidental part of the work of such an
employee occurs off the farm will not
affect this conclusion. Thus, an employee may spend a small amount of
time within the workweek in transporting necessary equipment for work
to be done on farms. Field employees of
a canner or processor of farm products
who work on farms during the planting
and growing season where they supervise the planting operations and consult with the grower on problems of
cultivation are employed in practices
performed ‘‘on a farm’’ so long as such
work is done entirely on farms save for
an incidental amount of reporting to
their employer’s plant. Other employees of the above employers employed
away from the farm would not come
within section 3(f). For example, airport employees such as mechanics,
loaders, and office workers employed
by a crop dusting firm would not be agriculture employees (Wirtz v. Boyls dba
Boyls Dusting and Spraying Service 230
F. Supp. 246, aff’d per curiam 352 F. 2d
63; Tobin v. Wenatchee Air Service, 10 WH
Cases 680, 21 CCH Lab Cas. Paragraph
67,019 (E.D. Wash.)).
‘‘SUCH FARMING OPERATION’’—OF THE
FARMER
§ 780.137 Practices must be performed
in connection with farmer’s own
farming.
‘‘Practices * * * performed by a farmer’’ must be performed as an incident
to or in conjunction with ‘‘such farming operations’’ in order to constitute
‘‘agriculture’’ within the secondary
meaning of the term. Practices performed by a farmer in connection with
his nonfarming operations do not satisfy this requirement (see Calaf v. Gonzalez, 127 F. 2d 934; Mitchell v. Budd, 350
U.S. 473). Furthermore, practices performed by a farmer can meet the above
requirement only in the event that
they are performed in connection with
the farming operations of the same
farmer who performs the practices.
Thus, the requirement is not met with
respect to employees engaged in any
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Wage and Hour Division, Labor
§ 780.140
practices performed by their employer
in connection with farming operations
that are not his own (see Farmers Reservoir Co. v. McComb, 337 U.S. 755;
Mitchell v. Hunt, 263 F. 2d 913; NLRB v.
Olaa Sugar Co., 242 F. 2d 714; Mitchell v.
Huntsville Nurseries, 267 F. 2d 286; Bowie
v. Gonzalez, 117 F. 2d 11). The processing by a farmer of commodities of
other farmers, if incident to or in conjunction with farming operations, is incidental to or in conjunction with the
farming operations of the other farmers and not incidental to or in conjunction with the farming operations of the
farmer doing the processing (Mitchell v.
Huntsville Nurseries, supra; Farmers Reservoir Co. v. McComb, supra; Bowie v.
Gonzalez, supra).
§ 780.138 Application of the general
principles.
Some examples will serve to illustrate the above principles. Employees
of a fruit grower who dry or pack fruit
not grown by their employer are not
within section (f). This is also true of
storage operations conducted by a
farmer in connection with products
grown by someone other than the farmer. Employees of a grower-operator of a
sugarcane mill who transport cane
from fields to the mill are not within
section 3(f), where such cane is grown
by independent farmers on their land
as well as by the mill operator (Bowie
v. Gonzalez, 117 F. 2d 11). Employees of
a tobacco grower who strip tobacco
(i.e., remove the leaves from the stalk)
are not agricultural employees when
performing this operation on tobacco
not grown by their employer. On the
other hand, where a farmer rents some
space in a warehouse or packinghouse
located off the farm and the farmer’s
own employees there engage in handling or packing only his own products
for market, such operations by the
farmers are within section 3(f) if performed as an incident to or in conjunction with his farming operations. Such
arrangements are distinguished from
those where the employees are not actually employed by the farmer. The
fact that a packing shed is conducted
by a family partnership, packing products exclusively grown on lands owned
and operated by individuals constituting the partnership, does not alter
the status of the packing activity.
Thus, if in a particular case an individual farmer is engaged in agriculture, a family partnership which
performs the same operations would
also
be
engaged
in
agriculture.
(Dofflemeyer v. NLRB, 206 F. 2d 813.)
However, an incorporated association
of farmers that does not itself engage
in farming operations is not engaged in
agriculture though it processes at its
packing shed produce grown exclusively by the farmer members of the
association. (Goldberg v. Crowley Ridge
and Fruit Growers Association, 295 F. 2d
7 (C.A. 8).)
§ 780.139
Pea vining.
Vining employees of a pea vinery located on a farm, who vine only the peas
grown on that particular farm, are engaged in agriculture. If they also vine
peas grown on other farms, such operations could not be within section 3(f)
unless the farmer-employer owns or operates the other farms and vines his
own peas exclusively. However, the
work of vining station employees in
weeks in which the stations vine only
peas grown by a canner on farms owned
or leased by him is considered part of
the canning operations. As such, the
cannery operations, including the
vining operations, are within section
3(f) only if the canners can crops which
he grows himself and if the canning operations are subordinate to the farming
operations.
§ 780.140 Place of performing the practice as a factor.
So long as the farming operations to
which a farmer’s practice pertains are
performed by him in his capacity as a
farmer, the status of the practice is not
necessarily altered by the fact that the
farming operations take place on more
than one farm or by the fact that some
of the operations are performed off his
farm (NLRB v. Olaa Sugar Co., 242 F. 2d
714). Thus, where the practice is performed with respect to products of
farming operations, the controlling
consideration is whether the products
were produced by the farming operations of the farmer who performs the
practice rather than at what place or
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§ 780.141
29 CFR Ch. V (7–1–19 Edition)
on whose land he produced them. Ordinarily, a practice performed by a farmer in connection with farming operations conducted on land which he
owns or leases will be considered as
performed in connection with the farming operations of such farmer in the absence of facts indicating that the farming operations are actually those of
someone else. Conversely, a contrary
conclusion will ordinarily be justified
if such farmer is not the owner or a
bona fide lessee of such land during the
period when the farming operations
take place. The question of whose
farming operations are actually being
conducted in cases where they are performed pursuant to an agreement or
arrangement, not amounting to a bona
fide lease, between the farmer who performs the practice and the landowner
necessarily involves a careful scrutiny
of the facts and circumstances surrounding the arrangement. Where commodities are grown on the farm of the
actual grower under contract with another, practices performed by the latter on the commodities, off the farm
where they were grown, relate to farming operations of the grower rather
than to any farming operations of the
contract purchaser. This is true even
though the contract purports to lease
the land to the latter, give him the
title to the crop at all times, and confer on him the right to supervise the
growing operations, where the facts as
a whole show that the contract purchaser provides a farm market, cash
advances, and advice and counsel but
does not really perform growing operations (Mitchell v. Huntsville Nurseries,
267 F. 2d 286).
‘‘SUCH FARMING OPERATIONS’’—ON THE
FARM
§ 780.141 Practices must relate to
farming operations on the particular farm.
‘‘Practices * * * performed * * * on a
farm’’ must be performed as an incident to or in conjunction with ‘‘such
farming operations’’ in order to constitute ‘‘agriculture’’ within the secondary meaning of the term. No practice performed with respect to farm
commodities is within the language
under discussion by reason of its performance on a farm unless all of such
commodities are the products of that
farm. Thus, the performance on a farm
of any practice, such as packing or
storing, which may be incidental to
farming operations cannot constitute a
basis for considering the employees engaged in agriculture if the practice is
performed upon any commodities that
have been produced elsewhere than on
such farm (see Mitchell v. Hunt, 263 F.
2d 913). The construction by an independent contractor of granary on a
farm is not connected with ‘‘such’’
farming operations if the farmer for
whom it is built intends to use the
structure for storing grain produced on
other farms. Nor is the requirement
met with respect to employees engaged
in any other practices performed on a
farm, but not by a farmer, in connection with farming operations that are
not conducted on that particular farm.
The fact that such a practice pertains
to farming operations generally or to
those performed on a number of farms,
rather than to those performed on the
same farm only, is sufficient to take it
outside the scope of the statutory language. Area soil surveys and genetics
research activities, results of which are
made available to a number of farmers,
are typical of the practices to which
this principle applies and which are not
within section 3(f) under this provision.
§ 780.142 Practices on a farm not related to farming operations.
Practices performed on a farm in
connection with nonfarming operations
performed on or off such farm do not
meet the requirement stated in
§ 780.141. For example, if a farmer operates a gravel pit on his farm, none of
the practices performed in connection
with the operation of such gravel pit
would be within section 3(f). Whether
or not some practices are performed in
connection with farming operations
conducted on the farm where they are
performed must be determined with
reference to the purpose of the farmer
for whom the practice is performed.
Thus, land clearing operations may or
may not be connected with such farming operations depending on whether or
not the farmer intends to devote the
cleared land to farm use.
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Wage and Hour Division, Labor
§ 780.145
§ 780.143 Practices on a farm not performed for the farmer.
The fact that a practice performed on
a farm is not performed by or for the
farmer is a strong indication that it is
not performed in connection with the
farming operations there conducted.
Thus, where such an employer other
than the farmer performs certain work
on a farm solely for himself in furtherance of his own enterprise, the practice
cannot ordinarily be regarded as performed in connection with farming operations conducted on the farm. For
example, it is clear that the work of
employees of a utility company in
trimming and cutting trees for power
and communications lines is part of a
nonfarming enterprise outside the
scope of agriculture. When a packer of
vegetables or dehydrator of alfalfa
buys the standing crop from the farmer, harvests it with his own crew of employees, and transports the harvested
crop to his off-the-farm packing or dehydrating plant, the transporting and
plant employees, who are not engaged
in ‘‘primary’’ agriculture as are the
harvesting employees (see NLRB v.
Olaa Sugar Co., 242 F. 2d 714), are clearly not agricultural employees. Such an
employer cannot automatically become an agricultural employer by
merely transferring the plant operations to the farm so as to meet the
‘‘on a farm’’ requirement. His employees will continue outside the scope of
agriculture if the packing or dehydrating is not in reality done for the
farmer. The question of for whom the
practices are performed is one of fact.
In determining the question, however,
the fact that prior to the performance
of the packing or dehydrating operations, the farmer has relinquished
title and divested himself of further responsibility with respect to the product, is highly significant.
PERFORMANCE OF THE PRACTICE ‘‘AS AN
INCIDENT TO OR IN CONJUNCTION
WITH’’ THE FARMING OPERATIONS
§ 780.144 ‘‘As an incident to or in conjunction with’’ the farming operations.
In order for practices other than actual farming operations to constitute
‘‘agriculture’’ within the meaning of
section 3(f) of the Act, it is not enough
that they be performed by a farmer or
on a farm in connection with the farming operations conducted by such farmer or on such farm, as explained in
§§ 780.129 through 780.143. They must
also be performed ‘‘as an incident to or
in conjunction with’’ these farming operations. The line between practices
that are and those that are not performed ‘‘as an incident to or in conjunction with’’ such farming operations is not susceptible of precise definition. Generally, a practice performed
in connection with farming operations
is within the statutory language only
if it constitutes an established part of
agriculture, is subordinate to the farming operations involved, and does not
amount to an independent business. Industrial operations (Holtville Alfalfa
Mills v. Wyatt, 230 F. 2d 398) and processes that are more akin to manufacturing than to agriculture (Maneja v.
Waialua, 349 U.S. 254; Mitchell v. Budd,
350 U.S. 473) are not included. This is
also true when on-the-farm practices
are performed for a farmer. As to when
practices may be regarded as performed for a farmer, see § 780.143.
§ 780.145 The relationship is determined by consideration of all relevant factors.
The character of a practice as a part
of the agricultural activity or as a distinct business activity must be determined by examination and evaluation
of all the relevant facts and circumstances in the light of the pertinent language and intent of the Act.
The result will not depend on any mechanical application of isolated factors
or tests. Rather, the total situation
will control (Maneja v. Waialua, 349
U.S. 254; Mitchell v. Budd, 350 U.S. 473).
Due weight should be given to any
available criteria which may indicate
whether performance of such a practice
may properly be considered an incident
to farming within the intent of the
Act. Thus, the general relationship, if
any, of the practice to farming as evidenced by common understanding,
competitive factors, and the prevalence
of its performance by farmers (see
§ 780.146), and similar pertinent matters
should be considered. Other factors to
be considered in determining whether a
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§ 780.146
29 CFR Ch. V (7–1–19 Edition)
practice may be properly regarded as
incidental to or in conjunction with
the farming operations of a particular
farmer or farm include the size of the
operations and respective sums invested in land, buildings and equipment for the regular farming operations and in plant and equipment for
performance of the practice, the
amount of the payroll for each type of
work, the number of employees and the
amount of time they spend in each of
the activities, the extent to which the
practice is performed by ordinary farm
employees and the amount of interchange of employees between the operations, the amount of revenue derived
from each activity, the degree of industrialization involved, and the degree of
separation established between the activities. With respect to practices performed on farm products (see § 780.147)
and in the consideration of any specific
practices (see §§ 780.148–780.158 and
780.205–780.214), there may be special
factors in addition to those above mentioned which may aid in the determination.
§ 780.146 Importance of relationship of
the practice to farming generally.
The inclusion of incidental practices
in the definition of agriculture was not
intended to include typical factory
workers or industrial operations, and
the sponsors of the bill made it clear
that the erection and operation on a
farm by a farmer of a factory, even one
using raw materials which he grows,
‘‘would not make the manufacturing
* * * a farming operation’’ (see 81
Cong. Rec. 7658; Maneja v. Waialua, 349
U.S. 254). Accordingly, in determining
whether a given practice is performed
‘‘as an incident to or in conjunction
with’’ farming operations under the intended meaning of section 3(f), the nature of the practice and the circumstances under which it is performed must be considered in the light
of the common understanding of what
is agricultural and what is not, or the
facts indicating whether performance
of the practice is in competition with
agricultural or with industrial operations, and of the extent to which such
a practice is ordinarily performed by
farmers incidentally to their farming
operations (see Bowie v. Gonzales, 117 F.
2d 11; Calaf v. Gonzalez, 127 F. 2d 934;
Vives v. Seralles, 145 F. 2d 552; Mitchell v.
Hunt, 263 F. 2d 913; Holtville Alfalfa Mills
v. Wyatt, 230 F. 2d 398; Mitchell v. Budd,
350 U.S. 473; Maneja v. Waialua, supra).
Such an inquiry would appear to have
a direct bearing on whether a practice
is an ‘‘established’’ part of agriculture.
The fact that farmers raising a commodity on which a given practice is
performed do not ordinarily perform
such a practice has been considered a
significant indication that the practice
is not ‘‘agriculture’’ within the secondary meaning of section 3(f) (Mitchell
v. Budd, supra; Maneja v. Waialua,
supra). The test to be applied is not the
proportion of those performing the
practice who produce the commodities
on which it is performed but the proportion of those producing such commodities who perform the practice
(Maneja v. Waialua, supra). In Mitchell
v. Budd, supra, the U.S. Supreme Court
found that the following two factors
tipped the scales so as to take the employees of tobacco bulking plants outside the scope of agriculture: Tobacco
farmers do not ordinarily perform the
bulking operation; and, the bulking operation is a process which changes tobacco leaf in many ways and turns it
into an industrial product.
§ 780.147 Practices performed on farm
products—special factors considered.
In determining whether a practice
performed on agricultural or horticultural commodities is incident to or
in conjunction with the farming operations of a farmer or a farm, it is also
necessary to consider the type of product resulting from the practice—as
whether the raw or natural state of the
commodity has been changed. Such a
change may be a strong indication that
the practice is not within the scope of
agriculture (Mitchell v. Budd, 350 U.S.
473); the view was expressed in the legislative debates on the Act that it
marks the dividing line between processing as an agricultural function and
processing as a manufacturing operation (Maneja v. Waialua, 349 U.S. 254,
citing 81 Cong. Rec. 7659–7660, 7877–
7879). Consideration should also be
given to the value added to the product
as a result of the practice and whether
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Wage and Hour Division, Labor
§ 780.151
a sales organization is maintained for
the
disposal
of
the
product.
Seasonality of the operations involved
in the practice would not be very helpful as a test to distinguish between operations incident to agriculture and operations of commercial or industrial
processors who handle a similar volume of the same seasonal crop. But the
length of the period during which the
practice is performed might cast some
light on whether the operations are
conducted as a part of agriculture or as
a separate undertaking when considered together with the amount of investment, payroll, and other factors. In
some cases, the fact that products resulting from the practice are sold
under the producer’s own label rather
than under that of the purchaser may
furnish an indication that the practice
is conducted as a separate business activity rather than as a part of agriculture.
PRACTICES INCLUDED WHEN PERFORMED
AS PROVIDED IN SECTION 3(f)
§ 780.148 ‘‘Any’’ practices meeting the
requirements will qualify for exemption.
The language of section 3(f) of the
Act, in defining the ‘‘secondary’’ meaning of ‘‘agriculture,’’ provides that any
practices performed by a farmer or on
a farm as an incident to or in conjunction with such (his or its) farming operations are within the definition. The
practices which may be exempt as ‘‘agriculture’’ if so performed are stated to
include forestry or lumbering operations, preparation for market, and delivery to storage or to market or to
carriers for transportation to market.
The specification of these practices is
illustrative rather than limiting in nature. The broad language of the definition clearly includes all practices thus
performed and not merely those named
(see Maneja v. Waialua, 349 U.S. 254).
§ 780.149 Named practices as well as
others must meet the requirements.
The specific practices named in section 3(f) must, like any others, be performed by a farmer or on a farm as an
incident to or in conjunction with such
farming operations, for this condition
applies to ‘‘any’’ practices brought
within the secondary meaning of agri-
culture as defined in that section of the
Act. Thus the preparation for market,
by a farmer’s employees on a farm of
animals to be sold at a livestock auction is not within section 3(f) if animals from other farmers and other
farms are also handled. The practice is
not performed as an incident to or in
conjunction with ‘‘such’’ farming operations, that is, the operations of the
farmer by whom, or of the farm on
which, the livestock is raised (Mitchell
v. Hunt, 263 F. 2d 913).
PREPARATION FOR MARKET
§ 780.150 Scope and limits of ‘‘preparation for market.’’
‘‘Preparation for market’’ is also
named as one of the practices which
may be included in ‘‘agriculture.’’ The
term includes the operations normally
performed upon farm commodities to
prepare them for the farmer’s market.
The farmer’s market normally means
the wholesaler, processor, or distributing agency to which the farmer delivers his products. ‘‘Preparation for
market’’ clearly has reference to activities which precede ‘‘delivery to
market.’’ It is not, however, synonymous with ‘‘preparation for sale.’’ The
term must be treated differently with
respect to various commodities. It is
emphasized that ‘‘preparation for market,’’ like other practices, must be performed ‘‘by a farmer or on a farm as an
incident to or in conjunction with such
farming operations’’ in order to be
within section 3(f).
§ 780.151 Particular
commodities.
operations
Subject to the rules heretofore discussed, the following activities are,
among others, activities that may be
performed in the ‘‘preparation for market’’ of the indicated commodities and
may come within section 3(f):
(a) Grain, seed, and forage crops.
Weighing, binning, stacking, drying,
cleaning, grading, shelling, sorting,
packing, and storing.
(b) Fruits and vegetables. Assembling,
ripening, cleaning, grading, sorting,
drying, preserving, packing, and storing. (See In the Matter of J. J.
Crosetti, 29 LRRM 1353, 98 NLRB 268; In
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§ 780.152
29 CFR Ch. V (7–1–19 Edition)
the Matter of Imperial Garden Growers, 91 NLRB 1034, 26 LRRM 1632;
Lenroot v. Hazelhurst Mercantitle Co., 59
F. Supp. 595; North Whittier Heights Citrus Ass’n v. NLRB, 109 F.2d 76;
Dofflemeyer v. NLRB, 206 F.2d 813.)
(c) Peanuts and nuts (pecans, walnuts,
etc.). Grading, cracking, shelling,
cleaning, sorting, packing, and storing.
(d) Eggs. Handling, cooling, grading,
candling, and packing.
(e) Wool. Grading and packing.
(f) Dairy products. Separating, cooling, packing, and storing.
(g) Cotton. Weighing, ginning, and
storing cotton; hulling, delinting,
cleaning, sacking, and storing cottonseed.
(h) Nursery stock. Handling, sorting,
grading, trimming, bundling, storing,
wrapping, and packing. (See Jordan v.
Stark Brothers Nurseries, 45 F. Supp. 769;
Mitchell v. Huntsville Nurseries, 267 F.2d
286.)
(i) Tobacco. Handling, grading, drying, stripping from stalk, tying, sorting, storing, and loading.
(j) Livestock. Handling and loading.
(k) Poultry. Culling, grading, cooping,
and loading.
(l) Honey. Assembling, extracting,
heating, ripening, straining, cleaning,
grading, weighing, blending, packaging, and storing.
(m) Fur. Removing the pelt, scraping,
drying, putting on boards, and packing.
SPECIFIED DELIVERY OPERATIONS
§ 780.152 General scope of specified
delivery operations.
Employment in ‘‘secondary’’ agriculture, under section 3(f), includes
employment in ‘‘delivery to storage or
to market or to carriers for transportation to market’’ when performed by a
farmer as an incident to or in conjunction with his own farming operations.
To the extent that such deliveries may
be accomplished without leaving the
farm where the commodities delivered
are grown, the exemption extends also
to employees of someone other than
the farmer who raised them if they are
performing such deliveries for the
farmer. However, normally such deliveries require travel off the farm, and
where this is the case, only employees
of a farmer engaged in making them
can come within section 3(f). Such em-
ployees would not be engaged in agriculture in any workweek when they delivered commodities of other farmers,
however, because such deliveries would
not be performed as an incident to or
in conjunction with ‘‘such’’ farming operations, as explained previously. If the
‘‘delivery’’ trip is within section 3(f)
the necessary return trip to the farm is
also included.
§ 780.153 Delivery ‘‘to storage.’’
The term ‘‘delivery to storage’’ includes taking agricultural or horticultural commodities, dairy products,
livestock, bees or their honey, fur-bearing animals or their pelts, or poultry
to the places where they are to be
stored or held pending preparation for
or delivery to market. The fact that
the commodities have been subjected
to some other practice ‘‘by a farmer or
on a farm as an incident to or in conjunction with such farming operations’’ does not preclude the inclusion
of ‘‘delivery to storage’’ within section
3(f). The same is true with respect to
‘‘delivery to market’’ and ‘‘delivery to
carriers for transporation to market.’’
§ 780.154 Delivery ‘‘to market.’’
The term ‘‘delivery * * * to market’’
includes taking agricultural or horticultural commodities, dairy products,
livestock, bees or their honey, fur-bearing animals or their pelts, or poultry
to market. It ordinarily refers to the
initial journey of the farmer’s products
from the farm to the market. The market referred to is the farmer’s market
which normally means the distributing
agency, cooperative marketing agency,
wholesaler or processor to which the
farmer delivers his products. Delivery
to market ends with the delivery of the
commodities at the receiving platform
of such a farmer’s market (Mitchell v.
Budd, 350 U.S. 473). When the delivery
involves travel off the farm (which
would normally be the case) the delivery must be performed by the employees employed by the farmer in order to
constitute an agricultural practice. Delivery by an independent contractor for
the farmer or a group of farmers or by
a ‘‘bird-dog’’ operator who has purchased the commodities on the farm
from the farmer is not an agricultural
practice (see Chapman v. Durkin, 214 F.
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Wage and Hour Division, Labor
§ 780.157
2d 360, cert. denied 348 U.S. 897; Fort
Mason Fruit Co. v. Durkin, 214 F. 2d 363,
cert. denied 348 U.S. 897). However, in
the case of fruits or vegetables, the Act
provides a special overtime pay exemption for intrastate transportation of
the freshly harvested commodities
from the farm to a place of first marketing or first processing, which may
apply to employees engaged in such
transportation regardless of whether
they are employed by the farmer. See
subpart J of this part 780, discussing
the exemption provided by section
13(b)(16).
§ 780.155 Delivery ‘‘to carriers
transportation to market.’’
for
The term ‘‘delivery * * * to carriers
for transportation to market’’ includes
taking agricultural or horticultural
commodities, dairy products, livestock, bees or their honey, fur-bearing
animals or their pelts, and poultry to
any carrier (including carriers by
truck, rail, water, etc.) for transportation by such carrier to market. The
market referred to is the farmer’s market which normally means the distributing agency, cooperative marketing
agency, wholesaler, or processor to
which the farmer delivers his products.
As in the case of ‘‘delivery to market,’’
when it involves travel off the farm (as
would normally be the case) the delivery must be performed by the farmer’s
own employees in order to constitute
an agricultural practice. Employees of
the carrier who transport to market
the commodities which are delivered to
it are not within the scope of agriculture.
TRANSPORTATION OPERATIONS NOT
MENTIONED IN SECTION 3(f)
§ 780.156 Transportation of farm products from the fields or farm.
Transportation of farm products
from the fields where they are grown or
from the farm to other places may be
within the ‘‘secondary’’ meaning of agriculture, regardless of whether the
transportation is included as ‘‘delivery
to storage or to market or to carriers
for transportation to market’’: Provided only, That it is performed by a
farmer or on a farm as an incident to
or in conjunction with the farming op-
erations of that farmer or that farm. Of
course, any transportation operations
which are part of, and not subsequent
to, the ‘‘primary’’ farming operations
are also within section 3(f). These principles have been recognized by the
courts in the following cases, among
others: Maneja v. Waialua, 349 U.S. 254;
NLRB v. Olaa Sugar Co., 242 F. 2d 714;
Bowie v. Gonzales, 117 F. 2d 11; Calaf v.
Gonzales, 127 F. 8d 934; Vives v. Serralles,
145 F. 2d 552; Holtville Alfalfa Mills v.
Wyatt, 230 F. 2d 398. If not performed by
the farmer, transportation beyond the
limits of the farm is not within section
3(f), even when performed by a purchaser of the unharvested commodities
who has harvested the crop. The scope
of section 3(f) includes the harvesting
employees but does not extend to the
employees transporting the commodities off the farm (Chapman v. Durkin,
214 F. 2d 360, cert. denied, 348 U.S. 897;
Fort Mason Fruit Co. v. Durkin, 214 F. 2d
363, cert. denied, 348 U.S. 897).
§ 780.157 Other transportation incident to farming.
(a) Transportation by a farmer or on
a farm as an incident to or in conjunction with the farming operations of the
farmer or of that farm is within the
scope of agriculture even though things
other than farm commodities raised by
the farmer or on the farm are being
transported. As previously indicated,
transportation of commodities raised
by other farmers or on other farms
would not be within section 3(f). The
definition of agriculture clearly covers
the transportation by the farmer, as an
incident to or in conjunction with his
farming activities, of farm implements,
supplies, and fieldworkers to and from
the fields, regardless of whether such
transportation involves travel on or off
the farm and regardless of the method
used. The Supreme Court of the United
States so held in Maneja v. Waialua, 349
U.S.
254.
Transportation
of
fieldworkers to or from the farm by
persons other than the farmer does not
come within section 3(f). However,
under section 13(b)(16) of the Act, discussed in subpart J of this part 780, an
overtime pay exemption is provided for
transportation, whether or not performed by the farmer, of fruit or vegetable harvest workers to and from the
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§ 780.158
29 CFR Ch. V (7–1–19 Edition)
farm, within the same State where the
farm is located. In the case of transportation to the farm of materials or supplies, it seems clear that transportation to the farm by the farmer of materials and supplies for use in his farming operations, such as seed, animal or
poultry feed, farm machinery or equipment, etc., would be incidental to the
farmer’s actual farming operations.
Thus, truckdrivers employed by a
farmer to haul feed to the farm for
feeding pigs are engaged in ‘‘agriculture.’’
(b) With respect to the practice of
transporting farm products from farms
to a processing establishment by employees of a person who owns both the
farms and the establishment, such
practice may or may not be incident to
or in conjunction with the employer’s
farming operations depending on all
the pertinent facts. For example, the
transportation is clearly incidental to
milling operations, rather than to
farming, where the employees engaged
in it are hired by the mill, carried on
its payroll, do no agricultural work on
the farms, and report for and end their
daily duties at the mill where the
transportation vehicles are kept (Calaf
v. Gonzales, 127 F. 2d 934). On the other
hand, a different result is reached
where the facts show that the transportation workers are farm employees
whose work is closely integrated with
harvesting and other direct farming operations (NLRB v. Olaa Sugar Co., 242 F.
2d 714; and see Vives v. Serralles, 145 F.
2d 552). The method by which the transportation is accomplished is not material (Maneja v. Waialua, 349 U.S. 254).
OTHER UNLISTED PRACTICES WHICH MAY
BE WITHIN SECTION 3(f)
§ 780.158 Examples of other practices
within section 3(f) if requirements
are met.
(a) As has been noted above, the term
‘‘agriculture’’ includes other practices
performed by a farmer or on a farm as
an incident to or in conjunction with
the farming operations conducted by
such farmer or on such farm in addition to the practices listed in section
3(f). The selling (including selling at
roadside stands or by mail order and
house to house selling) by a farmer and
his employees of his agricultural com-
modities, dairy products, etc., is such a
practice provided it does not amount to
a separate business. Other such practices are office work and maintenance
and protective work. Section 3(f) includes, for example, secretaries, clerks,
bookkeepers, night watchmen, maintenance workers, engineers, and others
who are employed by a farmer or on a
farm if their work is part of the agricultural activity and is subordinate to
the farming operations of such farmer
or on such farm. (Damutz v. Pinchbeck,
66 F. Supp. 667, aff’d. 158 F. 2d 882). Employees of a farmer who repair the mechanical implements used in farming,
as a subordinate and necessary task incident to their employer’s farming operations, are within section 3(f). It
makes no difference that the work is
done by a separate labor force in a repair shop maintained for the purpose,
where the size of the farming operations is such as to justify it. Only employees engaged in the repair of equipment used in performing agricultural
functions would be within section 3(f),
however; employees repairing equipment used by the employer in industrial or other nonfarming activities
would be outside the scope of agriculture. (Maneja v. Waialua, 349 U.S.
254.) The repair of equipment used by
other farmers in their farming operations would not qualify as an agricultural practice incident to the farming
operations of the farmer employing the
repair workers.
(b) The following are other examples
of practices which may qualify as ‘‘agriculture’’ under the secondary meaning in section 3(f), when done on a
farm, whether done by a farmer or by a
contractor for the farmer, so long as
they do not relate to farming operations on any other farms: The operation of a cook camp for the sole purpose of feeding persons engaged exclusively in agriculture on that farm; artificial insemination of the farm animals; custom corn shelling and grinding of feed for the farmer; the packing
of apples by portable packing machines
which are moved from farm to farm
packing only apples grown on the particular farm where the packing is being
performed;
the
culling,
catching,
cooping, and loading of poultry; the
threshing of wheat; the shearing of
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Wage and Hour Division, Labor
§ 780.201
sheep; the gathering and baling of
straw.
(c) It must be emphasized with respect to all practices performed on
products for which exemption is
claimed that they must be performed
only on the products produced or raised
by the particular farmer or on the particular farm (Mitchell v. Huntsville
Nurseries, 267 F. 2d 286; Bowie v. Gonzalez, 117 F. 2d 11; Mitchell v. Hunt, 263
F. 2d 913; NLRB v. Olaa Sugar Co., 242 F.
2d 714; Farmers Reservoir Co. v. McComb,
337 U.S. 755; Walling v. Peacock Corp., 58
F. Supp. 880; Lenroot v. Hazelhurst Mercantile Co., 153 F. 2d 153; Jordan v. Stark
Bros. Nurseries, 45 F. Supp. 769).
§ 780.159
Forest products.
Trees grown in forests and the lumber derived therefrom are not agricultural or horticultural commodities, for
the purpose of the FLSA. (See § 780.205
regarding production of Christmas
trees.) It follows that employment in
the production, cultivation, growing,
and harvesting of such trees or timber
products is not sufficient to bring an
employee within sec. 3(f) unless the operation is performed by a farmer or on
a farm as an incident to or in conjunction with his or its farming operations.
On the latter point, see §§ 780.200
through 780.209 discussing the question
of when forestry or lumbering operations are incident to or in conjunction
with farming operations so as to constitute agriculture. For a discussion of
the exemption in sec. 13(b)(28) of the
Act for certain forestry and logging operations in which not more than eight
employees are employed, see part 788 of
this chapter.
[73 FR 77238, Dec. 18, 2008. Redesignated at 74
FR 26014, May 29, 2009]
EFFECTIVE DATE NOTE: At 74 FR 26014, May
29, 2009, § 780.115 was redesignated as § 780.159
and newly designated § 780.159 was suspended,
effective June 29, 2009.
Subpart C—Agriculture as It
Relates to Specific Situations
FORESTRY OR LUMBERING OPERATIONS
§ 780.200 Inclusion of forestry or lumbering operations in agriculture is
limited.
Employment in forestry or lumbering
operations is expressly included in agriculture if the operations are performed ‘‘by a farmer or on a farm as an
incident to or in conjunction with such
farming operation.’’ While ‘‘agriculture’’ is sometimes used in a broad
sense as including the science and art
of cultivating forests, the language
quoted in the preceding sentence is a
limitation on the forestry and lumbering operations which will be considered agricultural for purposes of section 3(f). It follows that employees of
an employer engaged exclusively in
forestry or lumbering operations are
not considered agricultural employees.
§ 780.201 Meaning of ‘‘forestry or lumbering operations.’’
The term ‘‘forestry or lumbering operations’’ refers to the cultivation and
management of forests, the felling and
trimming of timber, the cutting, hauling, and transportation of timber, logs,
pulpwood, cordwood, lumber, and like
products, the sawing of logs into lumber or the conversion of logs into ties,
posts, and similar products, and similar operations. It also includes the piling, stacking, and storing of all such
products. The gathering of wild plants
and of wild or planted Christmas trees
are included. (See the related discussion in §§ 780.205 through 780.209 and in
part 788 of this chapter which considers
the section 13(a)(13) exemption for forestry or logging operations in which
not more than eight employees are employed.) ‘‘Wood working’’ as such is not
included in ‘‘forestry’’ or ‘‘lumbering’’
operations. The manufacture of charcoal under modern methods is neither a
‘‘forestry’’ nor ‘‘lumbering’’ operation
and cannot be regarded as ‘‘agriculture.’’
[74 FR 26014, May 29, 2009]
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§ 780.202
29 CFR Ch. V (7–1–19 Edition)
§ 780.202 Subordination to farming operations is necessary for exemption.
While section 3(f) speaks of practices
performed ‘‘in conjunction with’’ as
well as ‘‘incident to’’ farming operations, it would be an unreasonable
construction of the Act to hold that all
practices were to be regarded as agricultural if the person performing the
practice did any farming, no matter
how little, or resorted to tilling a small
acreage for the purpose of qualifying
for exemption (Ridgeway v. Warren, 60
F. Supp. 363 (M.D. Tenn.); in re Combs,
5 WH Cases 595, 10 Labor Cases 62,802
(M.D. Ga.)). To illustrate, where an employer owns several thousand acres of
timberland on which he carries on lumbering operations and cultivates about
100 acres of farm land which are contiguous to such timberland, he would not
be engaged in agriculture so far as his
forestry or lumbering operations are
concerned. In such case, the forestry or
lumbering operations would clearly not
be subordinate to the farming operations but rather the principal or a
separate business of the ‘‘farmer.’’
§ 780.203 Performance of operations
on a farm but not by the farmer.
Logging or sawmill operations on a
farm undertaken on behalf of the farmer or on behalf of the buyer of the logs
or the resulting lumber by a contract
logger or sawmill owner are not within
the scope of agriculture unless it can
be shown that these logging or sawmill
operations are clearly incidental to
farming operations on the farm on
which the logging or sawmill operations are being conducted. For example, the clearing of additional land for
cultivation by the farmer or the preparation of timber for construction of his
farm buildings would appear to constitute operations incidental to ‘‘such
farming operations.’’
§ 780.204 Number of employees engaged in operations not material.
The fact that the employer employs
fewer than a certain number of employees in forestry and lumbering operations does not provide a basis for their
being considered as agricultural employees. This is to be distinguished
from the exemption provided by section 13(a)(13) (discussed in part 788 of
this chapter) which is limited to employers employing not more than eight
employees in the forestry or logging
operations described therein.
NURSERY AND LANDSCAPING OPERATIONS
§ 780.205 Nursery activities generally.
The employees of a nursery who are
engaged in the following activities are
employed in ‘‘agriculture’’:
(a) Sowing seeds and otherwise propagating fruit, nut, shade, vegetable,
and ornamental plants or trees (but
not Christmas trees), and shrubs, vines,
and flowers;
(b) Handling such plants from propagating frames to the field;
(c) Planting, cultivating, watering,
spraying, fertilizing, pruning, bracing,
and feeding the growing crop.
[74 FR 26015, May 29, 2009]
§ 780.206 Planting and lawn mowing.
(a) The planting of trees and bushes
is within the scope of agriculture
where it constitutes a step in the production, cultivation, growing, and harvesting of agricultural or horticultural
commodities, or where it constitutes a
practice performed by a farmer or on a
farm as an incident to or in conjunction with farming operations (as where
it is part of the subordinate marketing
operations of the grower of such trees
or bushes). Thus, employees of the
nurseryman who raised such nursery
stock are doing agricultural work when
they plant the stock on private or public property, trim, spray, brace, and
treat the planted stock, or perform
other duties incidental to its care and
preservation.
Similarly,
employees
who plant fruit trees and berry stock
not raised by their employer would be
considered as engaged in agriculture if
the planting is done on a farm as an incident to or in conjunction with the
farming operation on that farm.
(b) On the other hand, the planting of
trees and bushes on residential, business, or public property is not agriculture when it is done by employees of
an employer who has not grown the
trees and bushes, or who, if he has
grown them, engages in the planting
operations as an incident, not to his
farming operations, but to landscaping
operations which include principally
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Wage and Hour Division, Labor
§ 780.211
the laying of sod and the construction
of pools, walks, drives, and the like.
(c) The mowing of lawns, except
where it can be considered incidental
to farming operations, is not agricultural work.
§ 780.207 Operations with respect to
wild plants.
Nurseries frequently obtain plants
growing wild in the woods or fields
which are to be further cultivated by
the nursery before they are sold by it.
Obtaining such plants is a practice
which is incidental to farming operations. The activities are therefore
within the scope of agriculture if performed by a farmer or on a farm. Thus,
employees of the nursery are engaged
in agriculture when performing these
activities. On the other hand, employees of an independent contractor performing these activities off the farm
would not be engaged in agriculture.
The transplanting of such wild plants
in the nursery is performed ‘‘on a
farm’’ and is an agricultural activity
whether performed by employees of an
independent contractor or by employees of the nursery.
§ 780.208 Forest and Christmas tree activities.
Operations in a forest tree nursery
such as seeding new beds and growing
and transplanting forest seedlings are
not farming operations. The planting,
tending, and cutting of Christmas trees
do not constitute farming operations.
If such operations on forest products
are within section 3(f), they must qualify under the second part of the definition dealing with incidental practices.
(See § 780.201.)
to his farming operations. Such employees are not employed in agriculture when they handle the products
of other growers (Mitchell v. Huntsville
Nurseries, 267 F. 2d 286; Jordan v. Stark
Bros. Nurseries & Orchards Co., 45 F.
Supp. 769). Agricultural activities
would typically include employees engaged in the balling and storing of
shrubs and trees grown in the nursery.
Where a grower of nursery stock operates, as a separate enterprise, a processing establishment or an establishment for the wholesale of retail distribution of such commodities, the employees in such separate enterprise are
not engaged in agriculture (see Walling
v. Rocklin, 132 F. 2d 3; Mitchell v. Huntsville Nurseries, 267 F. 2d 286). Although
the handling and the sale of nursery
commodities by the grower at or near
the place where they were grown may
be incidental to his farming operations,
the character of these operations
changes when they are performed in an
establishment set up as a marketing
point to aid the distribution of those
products.
HATCHERY OPERATIONS
§ 780.210 The typical hatchery operations constitute ‘‘agriculture.’’
As stated in § 780.127, the typical
hatchery is engaged in ‘‘agriculture,’’
whether in a rural or city location.
Where the hatchery is engaged solely
in procuring eggs for hatching, performing the hatching operations, and
selling the chicks, all the employees
including office and maintenance
workers are engaged in agriculture (see
Miller Hatcheries v. Boyer, 131 F. 2d 283).
[74 FR 26015, May 29, 2009]
§ 780.211 Contract
hatching eggs.
production
§ 780.209 Packing,
storage,
warehousing, and sale of nursery
products.
Employees of a grower of nursery
stock who work in packing and storage
sheds sorting the stock, grading and
trimming it, racking it in bins, and
packing it for shipment are employed
in ‘‘agriculture’’ provided they handle
only products grown by their employer
and their activities constitute an established part of their employer’s agricultural activities and are subordinate
It
is
common
practice
for
hatcherymen to enter into arrangements with farmer poultry raisers for
the production of hatching eggs which
the hatchery agrees to buy. Ordinarily,
the farmer furnishes the facilities, feed
and labor and the hatchery furnishes
the basic stock of poultry. The farmer
undertakes a specialized program of
care and improvement of the flock in
cooperation with the hatchery. The
hatchery may at times have a surplus
of eggs, including those suitable for
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of
§ 780.212
29 CFR Ch. V (7–1–19 Edition)
hatching and culled eggs which it sells.
Activities such as grading and packing
performed by the hatchery employees
in connection with the disposal of
these eggs, are an incident to the
breeding of poultry by the hatchery
and are within the scope of agriculture.
§ 780.212 Hatchery employees working
on farms.
The work of hatchery employees in
connection with the maintenance of
the quality of the poultry flock on
farms is also part of the ‘‘raising’’ operations. This includes testing for
disese, culling, weighing, cooping, loading, and transporting the culled birds.
The catching and loading of broilers on
farms by hatchery employees for transportation to market are agricultural
operations.
§ 780.213 Produce business.
In some instances, hatcheries also
engage in the produce business as such
and commingle with the culled eggs
and chickens other eggs and chickens
which they buy for resale. In such a
case that work which relates to both
the hatchery and produce types of activities would not be within the scope
of agriculture.
§ 780.214 Feed sales and other activities.
In some situations, the hatchery also
operates a feed store and furnishes feed
to the growers. As in the case of the
produce business operated by a hatchery, this is not an agricultural activity
and employees engaged therein, such as
truckdrivers hauling feed to growers,
are not agricultural employees. Also
office workers and other employees are
not employed in agriculture when their
duties relate to nonagricultural activities.
§ 780.215 Meaning of forestry or lumbering operations.
The term forestry or lumbering operations refers to the cultivation and
management of forests, the felling and
trimming of timber, the cutting, hauling, and transportation of timber, logs,
pulpwood, cordwood, lumber, and like
products, the sawing of logs into lumber or the conversion of logs into ties,
posts, and similar products, and simi-
lar operations. It also includes the piling, stacking, and storing of all such
products. The gathering of wild plants
and of wild Christmas trees is included.
(See the related discussion in §§ 780.205
through 780.209 and in part 788 of this
chapter which considers the sec.
13(b)(28) exemption for forestry or logging operations in which not more than
eight employees are employed.) Wood
working as such is not included in forestry or lumbering operations. The
manufacture of charcoal under modern
methods is neither a forestry nor lumbering operation and cannot be regarded as agriculture.
[73 FR 77238, Dec. 18, 2008. Redesignated at 74
FR 26014, May 29, 2009]
EFFECTIVE DATE NOTE: At 74 FR 26014, May
29, 2009, § 780.201 was redesignated as § 780.215
and newly designated § 780.215 was suspended,
effective June 29, 2009.
§ 780.216 Nursery activities generally
and Christmas tree production.
(a) The employees of a nursery who
are engaged in the following activities
are employed in agriculture:
(1) Sowing seeds and otherwise propagating fruit, nut, shade, vegetable, and
ornamental plants or trees, and shrubs,
vines, and flowers;
(2) Handling such plants from propagating frames to the field;
(3) Planting, cultivating, watering,
spraying, fertilizing, pruning, bracing,
and feeding the growing crop.
(b) Trees produced through the application of extensive agricultural or horticulture techniques to be harvested
and sold for seasonal ornamental use as
Christmas trees are considered to be
agricultural or horticultural commodities. Employees engaged in the application of agricultural and horticultural
techniques to produce Christmas trees
as ornamental horticultural commodities such as the following are employed in agriculture:
(1) Planting seedlings in a nursery;
on-going treatment with fertilizer, herbicides, and pesticides as necessary;
(2) After approximately three years,
re-planting in lineout beds;
(3) After two more seasons, lifting
and re-planting the small trees in cultivated soil with continued treatment
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Wage and Hour Division, Labor
§ 780.301
with fertilizers, herbicides, and pesticides as indicated by testing to see if
such applications are necessary;
(4) Pruning or shearing yearly;
(5) Harvesting of the tree for seasonal
ornamental use, typically within 7 to
10 years of planting.
(c) Trees to be used as Christmas
trees which are gathered in the wild,
such as from forests or uncultivated
land and not produced through the application of agricultural or horticultural techniques are not agricultural or horticultural commodities for
purposes of sec. 3(f).
[73 FR 77239, Dec. 18, 2008. Redesignated at 74
FR 26015, May 29, 2009]
EFFECTIVE DATE NOTE: At 74 FR 26015, May
29, 2009, § 780.205 was redesignated as § 780.216
and newly designated § 780.216 was suspended,
effective June 29, 2009.
§ 780.217 Forestry activities.
Operations in a forest tree nursery
such as seeding new beds and growing
and transplanting forest seedlings are
not farming operations. For such operations to fall within sec. 3(f), they
must qualify under the second part of
the definition dealing with incidental
practices. See § 780.201.
[73 FR 77239, Dec. 18, 2008. Redesignated at 74
FR 26015, May 29, 2009]
EFFECTIVE DATE NOTE: At 74 FR 26015, May
29, 2009, § 780.208 was redesignated as § 780.217
and newly designated § 780.217 was suspended,
effective June 29, 2009.
Subpart D—Employment in Agriculture That Is Exempted From
the Minimum Wage and
Overtime Pay Requirements
Under Section 13(a)(6)
STATUTORY PROVISIONS
§ 780.300 Statutory exemptions in section 13(a)(6).
Section 13(a)(6) of the Act exempts
from the minimum wage requirements
of section 6 and from the overtime pay
requirements of section 7:
Any employee employed in agriculture: (A)
If such employee is employed by an employer
who did not, during any calendar quarter
during the preceding calendar year, use more
than 500 man-days of agricultural labor, (B)
if such employee is the parent, spouse, child,
or other member of his employer’s immediate family, (C) if such employee (i) is employed as a hand harvest laborer and is paid
on a piece-rate basis in an operation which
has been, and is customarily and generally
recognized as having been, paid on a piecerate basis in the region of employment, (ii)
commutes daily from his permanent residence to the farm on which he is so employed, and (iii) has been employed in agriculture less than 13 weeks during the preceding calendar year, (D) if such employee
(other than an employee described in clause
(C) of this subsection) (i) is 16 years of age or
under and is employed as a hand harvest laborer, is paid on a piece-rate basis in an operation which has been, and is customarily
and generally recognized as having been,
paid on a piece-rate basis in the region of
employment, (ii) is employed on the same
farm as his parent or person standing in the
place of his parent, and (iii) is paid at the
same piece rate as employees over age 16 are
paid on the same farm, or (E) if such employee is principally engaged in the range
production of livestock.
§ 780.301 Other pertinent statutory
provisions.
(a) Man-day is defined by section 3(u)
of the Act as follows:
‘‘Man-day’’ means any day during which an
employee performs any agriculture labor for
not less than 1 hour.
(b) Under section 3(e) of the Act the
term employee does not include certain
individuals in determining mandays of
labor. Section 3(e) provides that:
‘‘Employee’’ includes any individual employed by an employer, except that such
term shall not, for the purposes of section
3(u) include:
(1) Any individual employed by an employer engaged in agriculture if such individual is the parent, spouse, child, or other
member of the employer’s immediate family,
or
(2) Any individual who is employed by an
employer engaged in agriculture if such individual (A) is employed as a hand harvest laborer and is paid on a piece rate basis in an
operation which has been, and is customarily
and generally recognized as having been,
paid on a piece-rate basis in the region of
employment, and (B) commutes daily from
his permanent residence to the farm on
which he is so employed, and (C) has been
employed in agriculture less than 13 weeks
during the preceding calendar year.
(c) The legislative history of the 1966
amendments to the Fair Labor Standards Act indicates that the Congress in
enacting minimum wage protection
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§ 780.302
29 CFR Ch. V (7–1–19 Edition)
(section 6(a)(5)) for agriculture workers
for the first time sought to provide a
minimum wage floor for the farmworkers on large farms or agri-business
enterprises. The section 13(a)(6)(A) exemption was intended to exempt those
farmworkers
on
the
smaller
or
familysize farms. In keeping with this
intention, a labor requirement of 500
man-days was incorporated into the exemption, and certain workers were specifically excluded from the man-day
count, as provided in section 3(e) (1)
and (2).
§ 780.302 Basic conditions of section 13
(a)(6)(A).
Section 13(a)(6)(A) applies to an employee provided all the following conditions are met:
(a) He must be ‘‘employed in agriculture’’
(b) By an ‘‘employer’’
(c) Who did not use more than ‘‘500
man-days’’ of agriculture labor
(d) During any ‘‘calendar quarter of
the preceding calendar year.’’
The following sections discuss the
meaning and application of these requirements.
§ 780.303 Exemption applicable on employee basis.
Section 13(a)(6)(A) exempts ‘‘any employee employed in agriculture * * * by
an employer * * *.’’ It is clear from
this language that it is the activities of
the employee rather than those of his
employer which determine the application of the exemption. In other words,
the exemption applies only to employees who are engaged in agricultural activities. Thus some employees of the
employer may be exempt while others
may not. In any case the burden of effecting segregation between exempt
and nonexempt work as between different groups of employees is upon the
employer. For a more detailed discussion of what constitutes employment
in agriculture, see subpart B of this
part.
§ 780.304
‘‘Employed by an employer.’’
(a) The employer may be an individual, a partnership, or a corporation.
It is not necessary that the employer
be a farmer as defined in § 780.131. It is
sufficient that he ‘‘uses’’ agricultural
labor.
(b) In applying this exemption, one of
the main criteria is the number of
man-days of agricultural labor used by
the employer. Section 13(a)(6)(A) provides that the exemption shall not
apply to an employee employed in agriculture ‘‘if such employee is employed
by an employer who did not * * * use
more than 500 man-days of agricultural
labor * * *.’’ From this language of the
statute, the man-days of all agricultural workers, unless specifically excluded, of an employer whether he be
the owner of a single farm, the owner
of an enterprise consisting of several
farms, a tenant farmer, an independent
contractor, etc., are to be counted for
purposes of section 13(a)(6)(A) whether
they are employed at one place or several widely scattered places. For example if an employer owns and operates
two farms, it is the total number of
man-days used on both farms and not
that used on each individual farm that
determines whether he meets the 500
man-day test. Likewise independent
contractor who harvests crops on different farms during the harvesting season must total all the man-days of agricultural labor used on all such farms
except those excludable under section
3(e) in determining whether he meets
the 500 man-day test.
§ 780.305 500 man-day provision.
(a) Section 3(u) of the Act defines
man-day to mean ‘‘any day during
which an employee performs agricultural labor for not less than 1 hour.’’
500 man-days is approximately the
equivalent of seven employees employed full-time in a calendar quarter.
However, a farmer who hires temporary or part-time employees during
part of the year, such as the harvesting
season, may exceed the man-day test
even though he may have only two or
three full-time employees.
(b) All of the employer’s employees
who are engaged in ‘‘agricultural
labor’’ except those specifically excluded by section 3(e) (see § 780.301) and
those exempt under section 13(a)(14)
(see subpart F of this part) must be
counted in determining whether the 500
man-day test is met. This is true even
though an employee may be exempt
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Wage and Hour Division, Labor
§ 780.309
from the monetary provisions under
another section of the Act. For example, a general manager of a farm may
be an exempt executive employee
under section 13(a)(1) or a sheepherder
may meet the requirements of section
13(a)(6)(E). Regardless of those exemptions, their man-days of employment
would be included in the man-day
count of the employer.
(c) A farmer whose crops are harvested by an independent contractor is
considered to be a joint employer with
the contractor who supplies the harvest hands if the farmer has the power
to direct, control or supervise the
work, or to determine the pay rates or
method of payment for the harvest
hands. (See § 780.331.) Each employer
must include the contractor’s employees in his man-day count in determining whether his own man-day test
is met. Each employer will be considered responsible for compliance with
the minimum wage and child labor requirements of the Act with respect to
the employees who are jointly employed.
[37 FR 12084, June 17, 1972, as amended at 38
FR 27520, Oct. 4, 1973]
§ 780.306 Calendar quarter of the preceding calendar year defined.
In applying section 13(a)(6)(A), it is
necessary to consider each of the four
calendar quarters (January 1–March 31;
April 1–June 30; July 1–September 30;
October 1–December 31) in the preceding calendar year (January 1–December 31). If in any calendar quarter
of the preceding calendar year the employer used more than 500 man-days of
agricultural labor, he must comply
with the minimum wage requirements
of section 6(a)(5) with respect to any
employee not otherwise exempt in the
current year. Compliance with the Act
is required in the current year regardless of the number of man-days of agricultural labor used in the current year.
On the other hand, if in the preceding
calendar year the number of man-days
used did not exceed 500 in any calendar
quarter, there is no requirement to
comply with respect to employment of
agricultural labor in the current calendar year regardless of how many
man-days are used in any calendar
quarter of the current calendar year.
Such employees are exempt under the
basic provisions of section 13(a)(6)(A).
§ 780.307 Exemption for employer’s immediate family.
Section 13(a)(6)(B) of the Fair Labor
Standards Amendments of 1966 provides a minimum wage and overtime
exemption in the case of ‘‘any employee engaged in agriculture * * * if
such employee is the parent, spouse,
child, or other member of the employer’s immediate family.’’ The requirements of this exemption, evident from
the statutory language, are that the
employee be employed in agriculture
and that he be a close blood relative,
spouse or member of the employer’s
immediate family. Reference is made
to subpart B of this part as to what
constitutes employment in agriculture.
The section 13(a)(6)(B) exemption applies to such an individual even though
he is employed by an employer who
otherwise used more than 500 man-days
of agricultural labor in a calendar
quarter of the preceding calendar year,
as discussed in § 780.305.
§ 780.308
ily.
Definition of immediate fam-
The Act does not define the scope of
‘‘immediate family.’’ Whether an individual other than a parent, spouse or
child will be considered as a member of
the employer’s immediate family, for
purposes
of
sections
3(e)(1)
and
13(a)(6)(b), does not depend on the fact
that he is related by blood or marriage.
Other than a parent, spouse or child,
only the following persons will be considered to qualify as part of the employer’s immediate family: Step-children, foster children, step-parents and
foster parents. Other relatives, even
when living permanently in the same
household as the employer, will not be
considered to be part of the ‘‘immediate family.’’
[38 FR 17726, July 3, 1973]
§ 780.309
Man-day exclusion.
Section 3(e)(1) specifically excludes
from the employer’s man-day total (as
defined in section 3(u)) employees who
qualify for exemption under section
13(a)(6)(B). See § 780.301. This man-day
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§ 780.310
29 CFR Ch. V (7–1–19 Edition)
count is a basic factor in the application of the section 13(a)(6)(A) exemption. See § 780.302 et seq.
§ 780.310 Exemption for local hand
harvest laborers.
Section 13(a)(6)(C) was added to the
Act by the Fair Labor Standards
Amendments of 1966. The legislative
history of the exemption indicates that
it was intended to apply to the local
worker who goes out on a temporary
basis during the harvest season to harvest crops. The exemption was not intended to apply to a full-time farmworker, that is, one who earns a livelihood at farming. For instance, migrant
laborers who travel from farm to farm
were not intended to be within the
scope of this exemption.
§ 780.311 Basic conditions of section
13(a)(6)(C).
(a) Section 13(a)(6)(C) of the Act applies to an employee who:
(1) Is employed in agriculture.
(2) Is employed as a hand harvest laborer.
(3) Is paid on a piece-rate basis.
(4) Is paid piece-rates in an operation
which has been, and is customarily and
generally recognized as having been,
paid on a piece-rate basis in the region
of employment.
(5) Commutes daily from his permanent residence to the farm on which he
is so employed.
(6) Has been employed in agriculture
less than 13 weeks during the preceding
calendar year.
(b) In order for the exemption to
apply to an employee, all of the requirements must be met. Since a hand
harvest laborer is normally an agricultural worker, while so engaged, such an
employee would meet the basic requirements that he be employed in agriculture. Subpart B of this part contains a more detailed discussion of
what constitutes employment in agriculture. The meaning and application
of the remaining requirements are discussed in the following sections.
§ 780.312 ‘‘Hand harvest laborer’’ defined.
(a) The term hand harvest laborer for
purposes of this exemption refers to
farm workers engaged in harvesting by
hand, or with hand tools, soil grown
crops such as cotton, tobacco, grains,
fruits, and vegetables. The term would
not include harvesting operations performed by an employee with an electrically powered mechanical device,
such as a ‘‘blueberry picking tool.’’
‘‘Hand-harvesting’’ refers only to soilgrown crops and does not include any
operation involving animals, such as
shearing or lambing of sheep and
catching chickens. Hand-harvesting is
defined as manually gathering or severing the crop from the soil, stems, or
roots at its growing position in the
fields. Included are integral related operations, closely related geographically
and in point of time, which are performed before the transportation to
concentration points on the farm.
For example:
(1) Employees who take tobacco leaves
from the pickers and string them on poles by
hand qualify as ‘‘hand harvest laborers’’ because the stringing operation is performed in
the field almost simultaneously with the
picking and before transportation to the concentration point on the farm (drying shed).
(2) The picking up of tomatoes by hand
after hand pulling from the vines is ‘‘handharvesting,’’ as it is performed where the
crop is severed and prior to its transportation to the packing shed.
(b) The definition is limited to harvesting, and the performance by the
hand harvester of any nonharvesting
operation in the same workweek would
cause the loss of the section 13(a)(6)(C)
exemption.
For example:
(1) Employees who wrap tomatoes in a
packing shed would not qualify, as the wrapping is a nonharvesting operation. (Schultz v.
Durrence (S.D. Ga.) 63 CCH. Lab. Cas. 32,387;
19 W.H. Cases 747.)
(2) Employees who hand pick small undesirable fruit prior to harvesting in order to
insure a better crop would not qualify for the
exemption. This is a preharvest culling operation performed as a part of the cultivation
and growing operations not harvesting.
(3) Employees who chop cotton, since this
is a nonharvesting operation.
§ 780.313 Piece rate basis.
The exemption provides that the employee must be paid on a piece-rate
basis. To be exempt the employee must
be compensated solely on piece rates
during the workweek. The exemption
does not apply in any workweek in
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Wage and Hour Division, Labor
§ 780.316
which the employee is compensated on
any other basis. For example, if an employee is compensated on an hourly
rate for part of the week and on a piece
rate for part of the week, the exemption would not be available. Also, if
any pieceworker who is otherwise subject to the minimum wage provisions
of the Act does not meet all the requirements set forth in this section he
must be paid at least the minimum
wage for each hour worked in a particular workweek, regardless of the
fact he is paid on piece rate unless he
is exempted by some other provision of
the Act.
§ 780.314 Operations customarily * * *
paid on a piece rate basis * * *.
A significant test of the exemption is
that the hand harvest operation ‘‘has
been, and is customarily and generally
recognized as having been, paid on a
piece rate basis in the region of employment.’’ The legislative history is
silent on who must customarily and
generally recognize the hand harvest
operation as having been paid on a
piece rate basis. However, considering
the context in which the term is used,
such recognition must be on the part of
agricultural employers and employees
and other individuals in the region of
employment who are familiar with
farming operations and practices in the
region and the method of compensation
utilized in such operations and practices.
§ 780.315 Local hand harvest laborers.
(a) A requirement of the exemption is
that an employee must commute each
day from his permanent residence to
the farm where he is employed. Thus,
the exemption does not apply to a migrant worker who travels to different
areas of the country during the harvesting seasons. This would be true
even though the worker may remain in
the area for a considerable period of
time. On the other hand, if a migrant
worker actually changes his place of
residence and thereafter commutes
daily from his permanent residence,
the exemption applies from the date of
the change of residence if the other
tests are met.
(b) The fact that a worker may live
on the farm where the operations are
performed would not be a reason for
disqualification. For example, if the
other tests for the exemption are met,
members of a tractor driver’s family
who reside on the farm could be employed in picking cotton within the
terms of the exemption. Such family
members would be considered to be
commuting daily from their permanent
residence despite the fact that their
residence may be located on the farm
at which they are employed.
§ 780.316 Thirteen week provision.
(a) The exemption provides that an
‘‘employee must have been employed in
agriculture less than 13 weeks during
the preceding calendar year.’’ For purposes of determining whether a worker
has been employed in agriculture less
than 13 weeks during the preceding calendar year, a week is considered to be
a fixed and regularly recurring period
of 168 hours consisting of seven consecutive 24-hour periods during which
the employee worked at least 1 ‘‘manday.’’ Section 3(u) of the Act defines a
man-day as ‘‘any day during which an
employee performs any agricultural
labor for not less than 1 hour.’’
(b) In defining the term ‘‘week’’ in
this manner for purposes of section
13(a)(6)(C) (as well as section 3(e)(2))
comports with the traditional definition of week used in administering all
the other provisions of the law. On this
basis, the phrase ‘‘employed in agriculture less than 13 weeks’’ means that
an employee has spent less than 13
weeks in agricultural work, regardless
of the number of hours he worked during each one of the 13 weekly units.
This position recognizes and accommodates to situations where an employee
works very long as well as very short
hours during the week. This would accord with the legislative history of this
exemption which clearly indicates that
it was meant to apply only to temporary workers whose hours of work
would undoubtedly vary in length, and
would, thereby effectuate the legislative intent.
(c) In determining the 13-week period, not only that work for the current employer in the preceding calendar year is counted, but also that agricultural work for all employers in the
previous year. It is the total of all
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§ 780.317
29 CFR Ch. V (7–1–19 Edition)
weeks of agricultural employment by
the employee for all employers in the
preceding calendar year that determines whether he meets the 13-week
test. In this respect a self-employed
farmer who works as a hand harvest laborer during part of the year is considered to be ‘‘employed’’ in agriculture
only during those weeks when he is an
employee of other farmers. Thus, such
weeks of employment are to be counted
but any weeks when he works only for
himself are not counted toward the 13
weeks.
(d) The 13-week test applies to each
individual worker. It does not apply on
a family basis. To carry the example in
the preceding section further, members
of a tractor driver’s family who reside
on the farm could be employed in picking cotton within the terms of the exemption even though the driver had
been employed in agriculture as much
as 13 weeks in the previous calendar
year, so long as the family members
themselves had not.
(e) If an employer claims this exemption, it is the employer’s responsibility
to obtain a statement from the employee showing the number of weeks he
was employed in agriculture during the
preceding calendar year. This requirement is contained in the recordkeeping
regulations in § 516.33 (d) of this chapter.
§ 780.317 Man-day exclusion.
Section 3(e)(2) specifically excludes
from the employer’s man-day total (as
defined in section 3(u)) employees who
qualify for exemption under section
13(a)(6)(C). (See § 780.301.) This man-day
count is a basic factor in the application of the section 13(a)(6)(A) exemption. (See § 780.302 et seq.)
§ 780.318 Exemption for nonlocal minors.
(a) Section 13(a)(6)(D) of the 1966
Amendments to the Fair Labor Standards Act exempts from the minimum
wage and overtime provisions ‘‘any employee employed in agriculture * * * if
such employee (other than an employee
described in clause (C) of this subsection): (1) Is 16 years of age or under
and is employed as a hand harvest laborer, is paid on a piece rate basis in an
operation which has been, and is cus-
tomarily and generally recognized as
having been, paid on a piece rate basis
in the region of employment, (2) is employed on the same farm as his parent
of persons standing in the place of his
parent, and (3) is paid at the same piece
rate as employees over age 16 are paid
on the same farm.’’
(b) It is clear from the legislative history of the amendments that the exemption was intended to apply, where
the other specific tests are met, only to
minors 16 years of age or under who are
not ‘‘local’’ in the sense that they are
away from their permanent home when
employed in agriculture. Specifically
the exemption was intended to apply in
the case of the children of migrants
who typically accompany their parents
in harvesting and other agricultural
work. (S. Rept. No. 1487, 89th Cong.,
second sess., to accompany H.R. 13712,
pp. 9 and 10)
§ 780.319
tion.
Basic conditions of exemp-
(a) Section 13(a)(6)(D) applies to an
employee engaged in agriculture who
meets all of the following tests:
(1) Is not a local hand harvest laborer,
(2) Is 16 years of age or under,
(3) Is employed as a hand harvest laborer,
(4) Is paid on a piece rate basis,
(5) Is employed in an operation which
has been, and is customarily and generally recognized as having been, paid
on a piece rate basis in the region of
employment,
(6) Is employed on the same farm as
his parent or person standing in the
place of his parent, and
(7) Is paid at the same piece rate as
employees over age 16 are paid on the
same farms.
(b) Some of these requirements which
are common to both sections 13(a)(6)(C)
and 13(a)(6)(D) have already been discussed in connection with section
13(a)(6)(C) and need not be repeated.
They are found in §§ 780.311 (employed
in agriculture), 780.312 (hand harvest
laborer), 780.313 (piece rate basis), and
780.314 (operations customarily * * *
paid on a piece rate basis). The other
requirements are discussed in the following sections.
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Wage and Hour Division, Labor
§ 780.324
§ 780.320 Nonlocal minors.
The exemption applies only to migrant or other than local hand harvest
workers 16 years of age or under who do
come within the scope of section
13(a)(6)(C) (application to all local hand
harvest laborers who commute daily
from their permanent residences). (See
§ 780.315.) A local youth under the prescribed age who commutes daily from
his permanent residence to the farm to
perform work is not exempt under section 13(a)(6)(D). The exemption may,
however, be available for the specified
minors who work for short periods of
several days or weeks without returning daily to their homes on farms beyond commuting distances from their
permanent homes.
§ 780.321 Minors 16 years of age or
under.
Section 13(a)(6)(D) by its very terms
is available only to employees 16 years
of age or under. Accordingly, even
though all the other tests of the exemption are met, the exemption is inapplicable in the case of an employee
over 16 years of age and the employer
must pay to such an employee the applicable statutory minimum wage unless his operations come within the
reach of some other exemption, such as
section 13(a)(6)(A). Furthermore, although section 13(a)(6)(D) provides a
minimum wage and overtime exemption for minors 16 years of age or
under, the employer must nevertheless
comply with the child labor provisions
of the Act prohibiting the employment
of minors in agriculture except under
certain conditions and circumstances.
These provisons are discussed in part
1500, subpart G of this title.
§ 780.322 Is employed on the same
farm as his parent or persons
standing in the place of his parent.
(a) The words ‘‘employed on the same
farm’’ are accorded their natural meaning with the usual caution, however,
that as in the case of all other exemptions, the exemptive language is to be
construed narrowly. (See § 780.2.)
(b) Individuals who are considered as
‘‘his parent or persons standing in
place of his parent’’ include natural
parents, or any other person where the
relationship between that person and a
child is such that the person may be
said to stand in place of a parent. For
example, one who takes a child into his
home and treats it as a member of his
own family, educating and supporting
the child as if it were his own, is generally said to stand to the child in
place of a parent.
§ 780.323 Exemption for range production of livestock.
Section 13(a)(6)(E) which was added
to the Act by the Fair Labor Standards
Amendments of 1966 provides an exemption from the minimum wage and
overtime requirements of the Act for
any employee ‘‘employed in agriculture’’ if he is ‘‘principally engaged
in the range production of livestock.’’
It is apparent from the language of section 13(a)(6)(E) that the application of
this exemption depends on the type of
work performed by the individual employee for whom exemption is sought
and on where the work is done. A determination of whether an employee is exempt therefore requires an examination of that employee’s duties and
where they are performed. Some employees of the employer may be exempt
while others may not.
§ 780.324 Requirements for the exemption to apply.
(a) All the following conditions must
be met in order for the exemption to
apply to an employee:
(1) He must be ‘‘engaged in agriculture’’;
(2) Be ‘‘principally engaged’’;
(3) On the ‘‘range’’, and
(4) In the ‘‘production of livestock.’’
(b) Since the raising of livestock is
included in the definition of agriculture under section 3(f) of the Act
(see §§ 780.119–780.121 of subpart B of
this part), the range production of livestock would normally be deemed agriculture work, and, consequently, an
employee, during this time he is engaged in such activities, would meet
the basic requirement of the exemption
that he be ‘‘employed in agriculture.’’
The following sections discuss the
meaning and application of the other
requirements.
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§ 780.325
29 CFR Ch. V (7–1–19 Edition)
§ 780.325 Principally engaged.
(a) To determine whether an employee is ‘‘principally engaged’’ in the
range production of livestock, one
must consider the nature of his duties
and responsibilities. To qualify for this
exemption the primary duty and responsibility of a range employee must
be to take care of the animals actively
or to stand by in readiness for that purpose. A determination of whether an
employee has range production of livestock as his primary duty must be
based on all the facts in a particular
case. The amount of time spent in the
performance of the range production
duties is a useful guide in determining
whether this is the primary duty of the
employee. In the ordinary case it will
be considered that the primary duty
means the major part, or over 50 percent, of the employee’s time.
(b) Under this principle, an employee
who spends more than 50 percent of his
time during the year on the range in
the duties designated as range production duties would be exempt. This is
true even though the employee may
perform some activities not directly
related to the range production of livestock, such as putting up hay or constructing dams or digging irrigation
ditches.
§ 780.326 On the range.
(a) For purposes of this exemption,
‘‘range’’ is defined generally as land
that is not cultivated. It is land that
produces native forage for animal consumption, and includes land that is revegetated naturally or artificially to
provide a forage cover that is managed
like range vegetation. ‘‘Forage’’ as
used here means ‘‘browse’’ or herbaceous food that is available to livestock or game animals.
(b) The range may be on private or
Federal or State land, and need not be
open. Typically it is not only noncultivated land, but land that is not suitable for cultivation because it is rocky,
thin, semiarid, or otherwise poor. Typically, also, many acres of range land
are required to graze one animal unit
(five sheep or one cow) for 1 month. By
its nature, range production of livestock is most typically conducted over
wide expanses of land, such as thousands of acres.
§ 780.327 Production of livestock.
For an employee to be engaged in the
production of livestock, he must be actively taking care of the animals or
standing by in readiness for that purpose. Thus, such activities as herding,
handling, transporting, feeding, watering, caring for, branding, tagging, protecting, or otherwise assisting in the
raising of livestock and in such immediately incidental duties as inspecting
and repairing fences, wells, and windmills would be considered as the production of livestock. On the other
hand, such work as terracing, reseeding, haying, and constructing dams,
wells, and irrigation ditches would not
be considered as the production of livestock within the meaning of the exemption.
§ 780.328 Meaning of livestock.
The term ‘‘livestock’’ includes cattle,
sheep, horses, goats, and other domestic animals ordinarily raised or used on
the farm. This is further discussed in
§ 780.120. Turkeys or domesticated fowl
are considered poultry and not livestock within the meaning of this exemption.
§ 780.329 Exempt work.
(a) The standard that must be used to
determine whether the individual employee is exempt is that his primary
duty must be the range production of
livestock and that this duty necessitates his constant attendance on the
range, on a standby basis, for such periods of time so as to make the computation of hours worked extremely
difficult. The fact that an employee
generally returns to his place of residence at the end of each day would not
affect the application of the exemption.
(b) Thus, exempt work must be performed away from the ‘‘headquarters.’’
The headquarters is not, however, to be
confused
with
the
‘‘headquarters
ranch.’’ The term headquarters has reference to the place for the transaction
of the business of the ranch (administrative center), as distinguished from
buildings or lots used for convenience
elsewhere. It is a particular location
for the discharge of the management
duties. Accordingly, the term ‘‘headquarters’’ would not embrace large
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Wage and Hour Division, Labor
§ 780.330
acreage, but only the ranchhouse,
barns,
sheds,
pen,
bunkhouse,
cookhouse, and other buildings in the
vicinity. The balance of the ‘‘headquarters ranch’’ would be the ‘‘range.’’
(c) Furthermore, the legislative history indicates that this exemption was
not intended to apply to feed lots or to
any area where the stock involved
would be near headquarters. Its sponsors stated that the exemption would
apply only to those employees principally engaged in activities which require constant attendance on a standby
basis, away from headquarters, such as
herding, where the computation of
hours worked would be extremely difficult. Such constant surveillance of
livestock that graze and reproduce on
range lands is necessary to see that the
animals receive adequate care, water,
salt, minerals, feed supplements, and
protection from insects, parasites, disease, predators, adverse weather, etc.
(d) The man-days of labor of employees principally engaged in the range
production of livestock, even though
the employees are exempt from the
wage and hour requirements of the Act,
are included in the employer’s man-day
count for purposes of application of
section 13(a)(6)(A). Thus, if a cattle
rancher in a particular calendar quarter uses 200 man-days of such range
production labor and 400 man-days of
agricultural labor performed by individuals not so engaged, he is required
to pay the minimum wage to the latter
employees in the following year.
§ 780.330 Sharecroppers and tenant
farmers.
(a) The test of coverage for sharecroppers and tenant farmers is the
same as that applied under the Act to
determine whether any other person is
an employee or not. Certain so-called
sharecroppers or tenants whose work
activities are closely guided by the
landowner or his agent are covered.
Those individuals called sharecroppers
and tenants whose work is closeIy directed and who have no actual discretion in controlling farm operations are
in fact employees by another name.
True independent-contractor sharecroppers or tenant farmers who actually control their farm operations are
not employees, but if they employ
other workers they may be responsible
as employers under the Act.
(b) In determining whether such individuals are employees or independent
contractors, the criteria laid down by
the courts in interpreting the Act’s
definitions of employment, such as
those enunciated by the Supreme Court
in Rutherford Food Corporation v.
McComb, are utilized. This case, as well
as others, made it clear that the answer to the question of whether an individual is an employee or an independent contractor under the definitions in this Act lies in the relationship in its entirety, and is not determined by common law concepts. It does
not depend upon isolated factors but on
the ‘‘whole activity.’’ An employee is
one who as a matter of economic reality follows the usual path of an employee. Each case must be decided on
the basis of all facts and circumstances, and as an aid in the assessment, one considers such factors as
the following:
(1) The extent to which the services
rendered are an integral part of the
principal’s business;
(2) The permanency of the relationship;
(3) The opportunities for profit or
loss;
(4) The initiative, judgment, or foresight exercised by the one who performs the services;
(5) The amount of investment; and
(6) The degree of control which the
principal has in the situation.
(c) Where a tenant or sharecropper is
found to be an employee, he and any
members of his family who work with
him on the crop are also to be included
in the 500 man-day count of the owner
or operator of the farm. Thus, where a
sharecropper is an employee and his
wife and children help in chopping cotton, all the family members are employees of the farm owner or operator
and all their man-days of work are
counted.
(d) On the other hand, a sharecropper
or tenant who qualifies as a bona fide
independent contractor is considered
the same as any other employer, and
only the man-days of agricultural labor
performed by employees of such a
sharecropper or tenant are counted toward the man-days used by him. If he
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§ 780.331
29 CFR Ch. V (7–1–19 Edition)
does not meet the 500 man-day test, he
is not required to pay his employees
the minimum wage even though those
employees are entitled to the minimum wage when working for a separate employer who met the man-day
test.
investment in equipment and his business decisions and judgments materially affect his opportunity for profit or
loss. In the overall picture, the contractor is not following the usual path
of an employee, but that of an independent contractor.
§ 780.331 Crew leaders and labor contractors.
(a) Whether a crew leader or a labor
contractor is the employer of the workers he supplies is a question of fact.
The tests here are the same as those
used to determine whether a sharecropper or tenant is an independent
contractor. A crew leader who merely
assembles a crew and brings them to
the farm to be supervised and paid directly by the farmer, and who does the
same work and receives the same pay
as the crewmembers, is an employee of
the farmer, and both he and his crew
are counted as such and paid accordingly if the farmer is not exempt under
the 500 man-day test. The situation is
not significantly different if under the
same circumstances, the crew is hired
at so much per acre for their work.
This is in effect a group piecework arrangement.
(b) The situation is different where
the farmer only establishes the general
manner for the work to be done. Where
this is the case, the labor contractor is
the employer of the workers if he
makes the day-to-day decisions regarding the work and has an opportunity
for profit or loss through his supervision of the crew and its output. As
the employer, he has the authority to
hire and fire the workers and direct
them while working in the fields. Complaints by the farmer about the quality
or quantity of the work or about a
worker are made to the contractor or
his representatives, who takes whatever action he deems appropriate. His
opportunity for profit or loss comes
from his control over the time and
manner of performance of work by his
crew and his authority to determine
the wage rates paid to his workers.
(c) There is also the common and
general practice of an individual who
performs custom work such as crop
dusting or grain harvesting and threshing or sheepshearing. In the typical
case this contractor has a substantial
For example: A sheepshearing contractor
who operates in the following manner is considered an independent contractor and therefore an agricultural employer in his own
right—he operates his own equipment including power supply from his own trucks or
trailers, boards his shearing crew and has
complete responsibility for their work and
compensation, has complete charge of the
sheep from the time they enter the shearing
pen until they are shorn and turned out, and
contracts with the rancher for the complete
operation at an agreed rate per head.
(d) Whether or not a labor contractor
or crew leader is found to be a bona
fide independent contractor, his employees are considered jointly employed by him and the farmer who is
using their labor if the farmer has the
power to direct, control or supervise
the work, or to determine the pay rates
or method of payment. (Hodgson v.
Okada (C.A. 10), 20 W.H. Cases 1107;
Hodgson v. Griffin & Brand (C.A. 5) 20
W.H. Cases 1051; Mitchell v. Hertzke, 234
F. 2d 183, 12 W.H. Cases 877 (C.A. 10).) In
a joint employment situation, the
man-days of agricultural labor rendered are counted toward the man-days
of such labor of each employer. Each
employer is considered equally responsible for compliance with the Act. With
respect to the recordkeeping regulations in 29 CFR 516.33, the employer
who actually pays the employees will
be considered primarily responsible for
maintaining and preserving the records
of hours worked and employees’ earnings specified in paragraph (c) of § 516.33
of this chapter.
[37 FR 12084, June 17, 1972, as amended at 38
FR 27521, Oct. 4, 1973]
§ 780.332 Exchange of labor between
farmers.
(a) Occasionally a farmer may help
his neighbor with the harvest of his
crop. For instance, Farmer B helps his
neighbor Farmer A harvest his wheat.
In return Farmer A helps Farmer B
with the harvest at his farm.
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Wage and Hour Division, Labor
§ 780.402
(b) In a case where neighboring farmers exchange their own work under an
arrangement where the work of one
farmer is repaid by the labor of the
other farmer and there is no monetary
compensation for these services paid or
contemplated, the Department of
Labor would not assert that either
farmer is an employee of the other.
(c) In addition, there may be instances where employees of a farmer
also work for neighboring farmers during harvest time. For example, employees of Farmer A may help Farmer B
with his harvest, and later, Farmer B’s
employees may help Farmer A. These
employees would be included in the
man-day count of the farmer for whom
the work is performed on the day in
question. Since the Act defines manday to mean any day during which an
employee performs any agricultural
labor for not less than 1 hour, there
may be days on which these employees
work for both Farmer A and Farmer B
for a ‘‘man-day.’’ In that event they
would be included for that day in the
man-day count of both Farmer A and
Farmer B.
Subpart E—Employment in Agriculture or Irrigation That Is Exempted From the Overtime
Pay Requirements Under Section 13(b)(12)
§ 780.400 Statutory provisions.
Section 13(b)(12) of the Fair Labor
Standards Act exempts from the overtime provisions of section 7 any employee employed in agriculture or in
connection with the operation or maintenance of ditches, canals, reservoirs,
or waterways, not owned or operated
for profit, or operated on a sharecrop
basis, and which are used exclusively
for supply and storing of water, at
least 90 percent of which was ultimately delivered for agricultural purposes during the preceding calendar
year.
[76 FR 18859, Apr. 5, 2011]
§ 780.401 General explanatory statement.
(a) Section 13(b)(12) of the Act contains the same wording exempting any
employee employed in agriculture as
did section 13(a)(6) prior to the 1966
amendments. The effect of this is to
provide a complete overtime exemption
for any employee employed in ‘‘agriculture’’ who does not qualify for exemption under section 13(a)(6) (A), (B),
(C), (D), and (E) of the 1966 amendments.
(b) In addition to exempting employees engaged in agriculture, section
13(b)(12) also exempts from the overtime provisions of the Act employees
employed in specified irrigation activities. The effect of the 1997 amendment
to section 13(b)(12) is to expand the
overtime exemption for any employee
employed in specified irrigation activities used for supply and storing of
water for agricultural purposes by substituting ‘‘water, at least 90 percent of
which was ultimately delivered for agricultural purposes during the preceding calendar year’’ for the prior requirement that all the water be used
for agricultural purposes. Prior to the
1966 amendments employees employed
in specified irrigation activities were
exempt from the minimum wage and
overtime pay requirements of the Act.
(c) For exempt employment in ‘‘agriculture,’’ see subpart B of this part.
[37 FR 12084, June 17, 1972, as amended at 76
FR 18859, Apr. 5, 2011]
§ 780.402 The general guides for applying the exemption.
(a) Like other exemptions provided
by the Act, the section 13(b)(12) exemption is narrowly construed (Phillips,
Inc. v. Walling, 334 U.S. 490; Bowie v.
Gonzalez, 117 F. 2d 11; Calaf v. Gonzalez,
127 F. 2d 934; Fleming v. Hawkeye Pearl
Button Co., 113 F. 2d 52; Fleming v. Swift
& Co., 41 F. Supp. 825; Miller Hatcheries
v. Boyer, 131 F. 2d 283; Walling v. Friend,
156 F. 2d 429; see also § 780.2 of subpart
A of this part 780). An employer who
claims the exemption has the burden of
showing that it applies. (See § 780.2)
The section 13(b)(12) exemption for employment in agriculture is intended to
cover all agriculture, including ‘‘extraordinary methods’’ of agriculture as
well as the more conventional ones and
large operators as well as small ones.
Nevertheless, it was meant to apply
only to agriculture. It does not extend
to processes that are more akin to
manufacturing than to agriculture.
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§ 780.403
29 CFR Ch. V (7–1–19 Edition)
Practices performed off the farm by
nonfarmers are not within the exemption, except for the irrigation activities specifically described in section
13(b)(12). Practices performed by a
farmer do not come within the exemption for agriculture if they are neither
a part of farming nor performed by him
as an incident to or in conjunction
with his own farming operations. These
principles have been well established
by the courts in such cases as Mitchell
v. Budd, 350 U.S. 473; Maneja v.
Waialua, 349 U.S. 254; Farmers Reservoir
Co. v. McComb, 337 U.S. 755; Addison v.
Holly Hill Fruit Products, 322 U.S. 607;
Calaf v. Gonzalez, 127 F. 2d 934; Chapman v. Durkin, 214 F. 2d 363, certiorari
denied, 348 U.S. 897; McComb v. Puerto
Rico Tobacco Marketing Co-op. Ass’n. 80
F. Supp. 953, 181 F. 2d 697.
(b) When the Congress, in the 1961
amendments, provided special exemptions for some activities which had
been held not to be included in the exemption for agriculture (see subparts F
and J of this part 780), it was made
very clear that no implication of disagreement with ‘‘the principles and
tests governing the application of the
present agriculture exemption as enunciated by the courts’’ was intended
(Statement of the Managers on the
part of the House, Conference Report,
H. Rept. No. 327, 87th Cong. first sess.,
p. 18). Accordingly, an employee is considered an exempt agricultural or irrigation employee if, but only if, his
work falls clearly within the specific
language of section 3(f) or section
13(b)(12).
§ 780.403 Employee basis of exemption
under section 13(b)(12).
Section 13(b)(12) exempts ‘‘any employee employed in * * *.’’ It is clear
from this language that it is the activities of the employee rather than those
of his employer which ultimately determine the application of the exemption. Thus the exemption may not
apply to some employees of an employer engaged almost exclusively in
activities within the exemption, and it
may apply to some employees of an
employer engaged almost exclusively
in other activities. But the burden of
effecting segregation between exempt
and nonexempt work as between dif-
ferent groups of employees is upon the
employer.
§ 780.404 Activities of the employer
considered in some situations.
Although the activities of the individual employee, as distinguished from
those of his employer, constitute the
ultimate test for applying the exemption, it is necessary in some instances
to examine the activities of the employer. For example, in resolving the
status of the employees of an irrigation
company for purposes of the agriculture exemption, the U.S. Supreme
Court, found it necessary to consider
the nature of the employer’s activities
(Farmers Reservoir Co. v. McComb, 337
U.S. 755).
THE IRRIGATION EXEMPTION
§ 780.405 Exemption is direct and does
not mean activities are agriculture.
The exemption provided in section
13(b)(12) for irrigation activities is a direct exemption which depends for its
application on its own terms and not
on the meaning of ‘‘agriculture’’ as defined in section 3(f). This exemption
was added by an amendment to section
13(a)(6) in 1949 to alter the effect of the
decision of the U.S. Supreme Court in
Farmers Reservoir Company v. McComb,
337 U.S. 755, so as to exclude the type of
employees involved in that case from
certain requirements of the Act. Congress chose to accomplish this result,
not by expanding the definition of agriculture in section 3(f), but by adding a
further exemption. In view of this approach, it can well be said that Congress agreed with the Supreme Court’s
holding that such workers are not employed in agriculture. (Goldberg v.
Crowley Ridge Assn., 295 F. 2d 7.) Irrigation workers who are employed in any
workweek exclusively by a farmer or
on a farm in irrigation work which
meets the requirement of performance
as an incident to or in conjunction
with the primary farming operations of
such farmer or such farm, as previously
explained, are considered as employed
in agriculture under section 3(f) and
may qualify for the minimum wage and
overtime exemption under section
13(a)(6) or for the overtime exemption
provided agricultural workers under
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Wage and Hour Division, Labor
§ 780.500
section 13(b)(12). Where they are not so
employed, they are not considered as
agricultural workers (Farmers Reservoir
Co. v. McComb, supra), but may qualify
for the overtime exemption under section 13(b)(12) relating to irrigation
work if their duties and the irrigation
system on which they work come within the express language of the statute.
Where this is the case, it is not material whether the employees are employed in agriculture.
§ 780.406 Exemption is from overtime
only.
This exemption applies only to the
overtime provisions of the Act and does
not affect the minimum wage, child
labor, recordkeeping, and other requirements of the Act.
[76 FR 18859, Apr. 5, 2011]
§ 780.407 System must be nonprofit or
operated on a share-crop basis.
The exemption does not apply to employees employed in the described operations on facilities of any irrigation
system unless the ditches, canals, reservoirs, or waterways in connection
with which their work is done meet the
statutory requirement that they either
be not owned or operated for profit, or
be operated on a share-crop basis. The
employer is paid on a share-crop basis
when he receives, as his total compensation, a share of the crop of the
farmers serviced.
§ 780.408 Facilities of system at least
90 percent of which was used for
agricultural purposes.
Section 13(b)(12) requires for exemption of irrigation work that the
ditches, canals, reservoirs, or waterways in connection with which the employee’s work is done be ‘‘used exclusively for supply and storing of water
at least 90 percent of which was ultimately delivered for agricultural purposes during the preceding calendar
year.’’ If a water supplier supplies
water of which more than 10 percent is
used for purposes other than ‘‘agricultural purposes’’ during the preceding
calendar year, the exemption would
not apply. For example, the exemption
would not apply where more than 10
percent of the water supplier’s water is
delivered to a municipality to be used
for general, domestic, and commercial
purposes. Water used for watering livestock raised by a farmer is ‘‘for agricultural purposes.’’
[76 FR 18859, Apr. 5, 2011]
§ 780.409 Employment ‘‘in connection
with the operation or maintenance’’
is exempt.
The irrigation exemption provided by
section 13(b)(12) applies to ‘‘any employee employed * * * in connection
with the operation or maintenance of
ditches, canals, reservoirs, or waterways’’ of an irrigation system which
qualifies for the exemption. The employee, to be exempt, must be employed ‘‘in connection with the operation or maintenance’’ of the named facilities; other employees of the irrigation system, not employed in connection with the named activities, are not
exempt. The exemption may apply to
employees engaged in insect, rodent,
and weed control along the canals and
waterways of the irrigation system.
Subpart F—Employment or Agricultural Employees in Processing
Shade-Grown
Tobacco; Exemption From Minimum Wage and Overtime
Pay Requirements Under Section 13(a)(14)
INTRODUCTORY
§ 780.500 Scope and significance of interpretative bulletin.
Subpart A of this part 780 and this
subpart F together constitute the official interpretative bulletin of the Department of Labor with respect to the
meaning and application of section
13(a)(14) of the Fair Labor Standards
Act of 1938, as amended. This section
provides an exemption from the minimum wage and overtime pay provisions of the Act for certain agricultural employees engaged in the processing, prior to stemming, or shadegrown tobacco for use as cigar wrapper
tobacco. As appears more fully in subpart A, interpretations in this bulletin
with respect to provisions of the Act
discussed are official interpretations
upon which reliance may be placed and
which will guide the Secretary of
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§ 780.501
29 CFR Ch. V (7–1–19 Edition)
Labor and the Administrator in the
performance of their duties under the
Act. The exemptions provided in section 13(a)(6) of the Act for employees
employed in agriculture is not discussed in this subpart except in its relation to section 13(a)(14). The meaning
and application of the section 13(a)(6)
exemption is fully considered in subpart D of this part 780.
§ 780.501
Statutory provision.
Section 13(a)(14) of the Fair Labor
Standards Act exempts from the minimum wage requirements of section 6
of the Act and from the overtime provisions of section 7:
Any agricultural employee employed in
the growing and harvesting of shade-grown
tobacco who is engaged in the processing (including, but not limited to, drying, curing,
fermenting, bulking, rebulking, sorting,
grading, aging, and baling) of such tobacco,
prior to the stemming process, for use as
cigar wrapper tobacco.
§ 780.502
tion.
Legislative history of exemp-
The exemption for shade-grown tobacco workers was added to the Act by
the Fair Labor Standards Amendments
of 1961. The intent of the committee
which inserted the provision in the
amendments which were reported to
the House (see H. Rept. No. 75, 87th
Cong., first sess., p. 29) was to exclude
from the minimum wage and overtime
requirements of the Act ‘‘employees
engaged prior to the stemming process
in processing shade-grown tobacco for
use as cigar wrapper tobacco, but only
if the employees were employed in the
growing and harvesting of such tobacco’’. The Report also pointed out
that ‘‘such operations were assumed to
be exempt prior to the case of Mitchell
v. Budd, 350 U.S. 473 (1956), as a continuation of the agricultural process
occurring in the vicinity where the tobacco was grown’’. The original provision in the House-passed bill was in the
form of an amendment to the Act’s definition of agriculture. In that form, it
would have altered the effect of the Supreme Court’s decision in the case of
Mitchell v. Budd, cited above, by bringing the described employees under the
exemption provided for agriculture in
section 13(a)(6) of the Act. (H. Rept. No.
75, p. 26, and H. Rept. No. 327, p. 17, 87th
Cong., first sess.) The Conference Committee, in changing the provision to
provide a separate exemption, made it
clear that it was ‘‘not intended by the
committee of conference to change
* * * by the exemption for employees
engaged in the named operations on
shade-grown tobacco the application of
the Act to any other employees. Nor is
it intended that there be any implication of disagreement by the conference
committee with the principles and
tests governing the application of the
present agricultural exemption as
enunciated by the courts.’’ (H. Rept.
No. 327, supra, p. 18.)
§ 780.503 What determines the application of the exemption.
The application of the section
13(a)(14) exemption depends upon the
nature of the work performed by the
individual employee for whom exemption is sought and not upon the character of the work of the employer. A
determination of whether an employee
is exempt therefore requires an examination of that employee’s duties.
Some employees of the employer may
therefore be exempt while others may
not.
REQUIREMENTS FOR EXEMPTION
§ 780.504
tion.
Basic conditions of exemp-
Under section 13(a)(14) of the Act all
the following conditions must be met
in order for the exemption to apply to
an employee:
(a) He must work on ‘‘shade-grown
tobacco.’’
(b) He must be an ‘‘agricultural employee’’ employed ‘‘in the growing and
harvesting’’ of shade-grown tobacco.
(c) He must be engaged ‘‘in the processing * * * of such tobacco’’ and this
processing must be both ‘‘prior to the
stemming process’’ and to prepare the
tobacco ‘‘for use as cigar wrapper tobacco.’’ These requirements are discussed in the foIlowing sections of this
subpart.
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Wage and Hour Division, Labor
§ 780.508
SHADE-GROWN TOBACCO
§ 780.508 Application of the exemption.
(a) As indicated in § 780.504, an employee qualifies for exemption under
section 13(a)(14) only if he is an agricultural employee employed in the growing and harvesting of shade-grown tobacco and is engaged in the processing
of such tobacco. However, both operations do not have to be performed during the same workweek. Section
13(a)(14) of the Act is intended to exempt any agricultural employee from
the minimum wage and overtime provisions of the Act in any workweek when
he is employed in the growing and harvesting of shade-grown tobacco, irrespective of the provisions of section
13(a)(6) and whether or not in such
workweek he is also engaged in the
processing of the tobacco as described
in section 13(a)(14). The exemption
would also apply in any workweek in
which the employee, who grew and harvested shade-grown tobacco, is exclusively engaged in such processing.
(b) An employee so employed in any
workweek is considered to be excluded
from the ‘‘employee employed in agriculture’’ whose exemption from the
pay provisions of the Act is governed
by section 13(a)(6). Therefore, his mandays of exempt labor under section
13(a)(14) in any such workweek are not
to be counted as man-days of agricultural labor within the meaning of section 3(u) of the Act and to which section 13(a)(6) refers.
(c) However, since section 3(u) defines man-day to mean ‘‘any day during which an employee performs any
agricultural labor for not less than 1
hour’’ in the case of an employee who
qualifies for the exemption in some
workweeks but not in others under section 13(a)(14), all such man-days of his
agricultural labor in the workweeks
when he is not exempt under section
13(a)(14) will be counted. In this connection, the performance of some agricultural work which does not relate to
shade-grown tobacco by an agricultural
employee of a grower of such tobacco
will not be considered as the performance of nonexempt work outside the
section 13(a)(14) exemption in any
workweek in which such an employee
is employed by such an employer in the
growing and harvesting of such tobacco
or in its processing prior to stemming,
§ 780.505 Definition
tobacco.’’
of
‘‘shade-grown
Shade-grown tobacco to which the
exemption applies is Connecticut Valley Shade-Grown U.S. Type 61 and
Georgia-Florida
Shade-Grown
U.S.
Type 62.
§ 780.506 Dependence of exemption on
shade-grown tobacco operations.
The exemption provided by section
13(a)(14) of the Act is limited to the
performance of certain operations with
respect to the specified commodity,
shade-grown tobacco. Work in connection with any other kind of tobacco, or
any other commodity, including any
other farm product, is not exempt
under this section. An employee must
be an agricultural employee variously
employed in the growing and harvesting of ‘‘shade-grown tobacco’’ and
in the described processing of ‘‘such tobacco’’ in order that the section
13(a)(14) exemption may apply.
§ 780.507
‘‘Such tobacco.’’
To be within the exemption, the
processing activities with respect to
shade-grown tobacco must be performed by an employee who has been
employed in growing and harvesting
‘‘such tobacco.’’ The term ‘‘such tobacco’’ clearly is limited to the specified type of tobacco named in the section, that is, shade-grown tobacco.
While a literal interpretation of the
term ‘‘such tobacco’’ might lead to a
conclusion that the exemption extends
only to the processing of the tobacco
which the employee grew or harvested,
it appears from the legislative history
that the intent was to extend the exemption to the processing of such tobacco which may be viewed ‘‘as a continuation of the agricultural process,
occurring in the vicinity where the tobacco was grown.’’ (H. Rept. 75, 87th
Cong., first sess., p. 26.) Thus, it appears that the term ‘‘such tobacco’’ has
reference to the local crop of shadegrown tobacco, raised by other local
growers as well as by the processor,
and which is being processed as a continuation of the growing and harvesting of such crop in the vicinity.
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§ 780.509
29 CFR Ch. V (7–1–19 Edition)
or both, and engages in other agricultural work only incidentally or to an
insubstantial extent.
§ 780.509
Agriculture.
The definition of ‘‘agriculture,’’ as
contained in section 3(f) of the Act, is
discussed in subpart B of this part 780.
The principles there discussed should
be referred to as guides to the meaning
of the terms ‘‘agricultural employee’’
and ‘‘growing and harvesting’’ as used
in section 13(a)(14).
§ 780.510
‘‘Any agricultural employee.’’
The section 13(a)(14) exemption applies to ‘‘any agricultural employee’’
who is employed in the specified activities. The term ‘‘any agricultural employee’’ includes not only agricultural
employees of the tobacco grower but
also such employees of other farmers
or independent contractors. ‘‘Any agricultural employee’’ employed in the
growing and harvesting of shade-grown
tobacco will qualify for exemption if he
engages in the specified processing operations. The use of the word ‘‘agricultural’’ before ‘‘employee’’ makes it apparent that separate consideration
must be given to whether an employee
is an ‘‘agricultural employee’’ and to
whether he is employed in the specified
‘‘growing and harvesting’’ within the
meaning of the Act.
§ 780.511 Meaning of ‘‘agricultural employee.’’
An ‘‘agricultural employee,’’ for purposes of section 13(a)(14), may be defined as an employee employed in activities which are included in the definition of ‘‘agriculture’’ in section 3(f)
of the Act (see § 780.103), and who is employed in these activities with sufficient regularity or continuity to characterize him as a person who engages
in them as an occupation. Isolated or
sporadic instances of engagement by an
employee in activities defined as ‘‘agriculture’’ would not ordinarily establish that he is an ‘‘agricultural employee.’’ His engagement in agriculture
should be sufficiently substantial to
demonstrate some dedication to agricultural work as a means of livelihood.
§ 780.512 ‘‘Employed in the growing
and harvesting.’’
Section 13(a)(14) exempts processing
operations on shade-grown tobacco
only when performed by agricultural
employees ‘‘employed in the growing
and harvesting’’ of such tobacco. The
use of the term ‘‘and’’ in the phrase
‘‘growing and harvesting’’ may be in
recognition of the fact that in the raising of shade-grown tobacco the two operations are typically intermingled;
however, it is not considered that the
word ‘‘and’’ would preclude a determination on the particular facts that
an employee is qualified for the exemption if he is employed only in ‘‘growing’’ or only in ‘‘harvesting.’’ Employment in work other than growing and
harvesting of shade-grown tobacco will
not satisfy the requirement that the
employee be employed in growing and
harvesting, even if such work is on
shade-grown tobacco and constitutes
‘‘agriculture’’ as defined in section 3(f)
of the Act. For example, delivery of the
tobacco by an employee of the farmer
to the receiving platform of the bulking plant would be a ‘‘delivery to market’’ included in ‘‘agriculture’’ when
performed by the farmer as an incident
to or in conjunction with his farming
operations (Mitchell v. Budd, 350 U.S.
473), but it would not be part of ‘‘growing and harvesting.’’
§ 780.513 What employment in growing
and harvesting is sufficient.
To qualify for exemption the employee must be one of those who ‘‘were
employed in the growing and harvesting of such tobacco’’ (H. Rept. No.
75, 87th Cong., First Sess., p. 29) and
one whose processing work could be
viewed as a ‘‘continuation of the agricultural process, occurring in the vicinity where the tobacco was grown.’’
(Ibid. p. 26.) This appears to require
that such employment be in connection
with the crop of shade-grown tobacco
which is being processed; it appears to
preclude an employee who has had no
such employment in the current crop
season from qualifying for this exemption even if in some past season he was
employed in growing and harvesting
such tobacco. Bona fide employment in
growing and harvesting shade-grown
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Wage and Hour Division, Labor
§ 780.516
tobacco would also appear to be necessary. An attempt to qualify an employee for the processing exemption by
sending him to the fields for growing or
harvesting work for a few hours or days
would not establish the bona fide employment in growing and harvesting
contemplated by the Act. It would not
seem sufficient that an employee has
been engaged in growing or harvesting
operations only occasionally or casually or incidentally for a small fraction of his work time. (See Walling v.
Haden, 153 F. 2d 196.) Employment for a
significant period in the current crop
season or on some regular recurring
basis during this season would appear
to be necessary before an agricultural
employee could reasonably be described as one ‘‘employed in the growing and harvesting of shade-grown tobacco.’’ The determination in a doubtful case will, therefore, require a careful examination and consideration of
the particular facts.
on the farm, where they are strung on
sticks and dried by heat. Before the
drying process is completed, the leaves
are allowed to absorb moisture. Then
they are dried again. It is not until the
end of this drying operation that the
leaves are packed in boxes and taken
from the farm to a building plant for
further processing (see Mitchell v.
Budd, 350 U.S. 473). Under the general
principles stated above, ‘‘harvesting’’
of shade-grown tobacco is considered to
include the removal of the tobacco
leaves from the plant and moving the
tobacco from the field to the drying
barn on the farm, together with the
performance of other work as a necessary part of such operations. Subsequent operations such as the drying of
the tobacco in the barn on the farm
and packing of the tobacco for transportation to the bulking plant are not
included in ‘‘harvesting.’’
EXEMPT PROCESSING
§ 780.514 ‘‘Growing’’ and ‘‘harvesting.’’
The general meaning of ‘‘growing’’
and ‘‘harvesting’’ of agricultural commodities is explained in §§ 780.117 and
780.118 of subpart B of this part 780,
where the meaning of these terms as
used in the Act’s definition of agriculture is fully discussed. As there indicated, these terms include the actual
raising of the crop and the operations
customarily performed in connection
with the removal of the crops by the
farmer from their growing position,
but do not extend to operations subsequent to and unconnected with the actual process whereby the agricultural
commodities are severed from their attachment to the soil. Thus, while
transportation to a concentration
point on the farm may be included,
‘‘harvesting’’ never extends to transportation or other operations off the
farm. The ‘‘growing’’ of shade-grown
tobacco is considered to include such
work as preparing the soil, planting, irrigating, fertilizing, and other activities. This type of tobacco requires special cultivation and is grown in fields
that are completely enclosed and covered with cheesecloth shade. The leaves
of the plant are picked in stages, as
they mature. The leaves are taken
immediateIy to a tobacco barn, located
§ 780.515 Processing requirements of
section 13(a)(14).
When it has been determined that an
employee is an ‘‘agricultural employee
employed in the growing and harvesting of shade-grown tobacco,’’ to
whom section 13(a)(14) of the Act may
apply, it then becomes necessary to ascertain whether he is ‘‘engaged in the
processing * * * of such tobacco, prior
to the stemming process, for use as
Cigar-wrapper tobacco.’’
§ 780.516
ess.’’
‘‘Prior to the stemming proc-
The exemption provided by section
13(a)(14) applies only to employees
whose processing operations on shadegrown tobacco are performed ‘‘prior to
the stemming process.’’ (See H. Rept.
No. 75, 87th Cong., first sess., p. 26).
This means that an employee engaged
in stemming, the removal of the midrib
from the tobacco leaf (McComb v. Puerto Rico Tobacco Marketing Co-op. Ass’n.,
80 F. Supp. 953, affirmed 181 F. 2d 697),
or in any operations on the tobacco
which are performed after stemming
has begun will not come within the exemption. Stemming and all subsequent
operations are nonexempt work.
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§ 780.517
29 CFR Ch. V (7–1–19 Edition)
§ 780.517 ‘‘For use as Cigar-wrapper tobacco.’’
The phrase ‘‘for use as Cigar-wrapper
tobacco’’ limits the type of end product
which may be produced by the exempt
operations. As its name indicates,
cigar-wrapper tobacco is used as a
cigar wrapper and is distinguished from
other types of tobacco which serve
other purposes such as filler, pipe,
chewing, and other kinds of tobacco.
Normally, shade-grown tobacco is used
only for cigar wrappers. However, if the
tobacco is not being processed by the
employer for such specific and limited
use, the employee is not engaged in exempt processing operations.
§ 780.518 Exempt
processing
operations.
The processing operations under section 13(a)(14) include, but are not limited to, ‘‘drying, curing, fermenting,
bulking, rebulking, sorting, grading,
aging, and baling’’ of the shade-grown
tobacco. As previously noted, these operations are exempt only if performed
on shade-grown tobacco prior to the
stemming process to prepare the tobacco for use as cigar wrapper tobacco.
§ 780.519 General scope of exempt operations.
All operations normally performed in
the processing of shade-grown tobacco
for use as cigar wrapper tobacco, if performed prior to the stemming process
and for such use, are included in the
exemption. As a whole, this processing
substantially changes the physical
properties and chemical content of the
tobacco, improves its color, increases
its combustibility, and eliminates the
rawness and harshness of the freshly
cured leaf. In the process the leaves are
piled in ‘‘bulks’’ of about 4,000 pounds
each to undergo a ‘‘sweating’’ or ‘‘fermentation’’ process in which temperature and humidity are carefully controlled. Proper heat control includes,
among other things, breaking up the
bulk, redistributing the tobacco, and
adding water. Proper fermentation or
aging requires the bulk to be reconstructed several times. This bulking
process may last from 4 to 8 months.
When the tobacco is properly dried,
cured, fermented, and aged, it is moved
to long tables where the leaves are in-
dividually graded and sorted, after
which they are tied in bundles called
‘‘hands’’ of about 30 to 35 leaves each,
which are then baled for shipment.
Equipment required for the work may
include a steam-heated plant, platforms, thermometers, bulk covers,
baling boxes and presses, baling mats
and packing, sorting, and grading tables. (See Mitchell v. Budd, 350 U.S. 473,
475.) Employees performing any part of
this processing prior to the stemming
process,
including
the
operations
named in section 13(a)(14), may come
within the exemption if they are otherwise qualified and if the tobacco on
which they work is being processed for
use as cigar wrapper tobacco.
§ 780.520 Particular operations which
may be exempt.
(a) General. Section 13(a)(14) lists a
number of operations as being included
in the processing of shade-grown tobacco. Some of these are, and others
are not, themselves ‘‘processing’’ in the
sense that performance of the operations changes the natural form of the
commodity on which it is performed.
All of the operations named and described in paragraph (b) of this section,
however, are a necessary and integral
part of the overall process of preparing
shade-grown tobacco for use as cigar
wrapper tobacco and, when performed
as part of that process and prior to
stemming of the tobacco, by an employee qualified under the terms of the
section, will provide the basis for his
exemption from the minimum wage
and overtime provisions of the Act.
(b) Particular operations—(1) Drying.
Drying includes the removal or lowering of the moisture content of the tobacco, whether by natural means or by
exposure to heat from ovens, furnaces,
etc.
(2) Curing. Curing includes removing
the tobacco to the curing shed or barn
and stringing the tobacco over slats.
(3) Fermenting. Fermenting includes
the operations controlling the chemical changes which take place in the
tobacco as the result of bulking and rebulking.
(4) Bulking. Bulking includes piling
the tobacco in piles or bulks of about
4,000 pounds each for the purpose of fermenting the tobacco.
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Wage and Hour Division, Labor
§ 780.602
(5) Rebulking. Rebulking includes the
breaking down of the tobacco bulks or
piles and rearranging them so that the
tobacco on the inside will be placed on
the outside of the bulk and tobacco on
the outside will be placed inside.
(6) Sorting. Sorting includes segregation of the tobacco leaves in connection with the grading and classifying of
the cured tobacco.
(7) Grading. Grading includes sorting
or classifying as to size and quality.
(8) Aging. Aging includes the curing
process brought about by bulking.
(9) Baling. Baling includes the tying
of the tobacco into ‘‘hands’’ and placing them in bales for shipment.
§ 780.521 Other processing operations.
The language of the section, namely,
‘‘including, but not limited to,’’ extends the exemption for processing to
include other operations in the processing of shade-grown tobacco besides
those specifically enumerated. These
additional operations include only
those which are a necessary and integral part of preparing the shade-grown
tobacco for use as cigar wrapper tobacco. These additional operations,
like those enumerated in section
13(a)(14), must be performed before the
tobacco has been stemmed. Stemming
work and further work on the tobacco
after stemming has been performed are
nonexempt.
§ 780.522 Nonprocessing employees.
Only those employees who actually
engaged in the growing and harvesting
of shade-grown tobacco and the specified exempt processing activities are
exempt. Clerical, maintenance and custodial workers are not included.
Subpart G—Employment in Agriculture and Livestock Auction
Operations Under the Section
13(b)(13) Exemption
INTRODUCTORY
§ 780.600 Scope and significance of interpretative bulletin.
Subpart A of this part 780 and this
subpart G together constitute the official interpretative bulletin of the Department of Labor with respect to the
meaning and application of section
13(b)(13) of the Fair Labor Standards
Act of 1938, as amended. This section
provides an exemption from the overtime pay provisions of the Act for certain employees who, in the same workweek, are employed by a farmer in agriculture and also in the farmer’s livestock auction operations. As appears
more fully in subpart A of this part, interpretations in this bulletin with respect to provisions of the Act discussed
are official interpretations upon which
reliance may be placed and which will
guide the Secretary of Labor and the
Administrator in the performance of
their duties under the Act. The general
exemptions provided in sections 13(a)(6)
and 13(b)(12) of the Act for employees
employed in agriculture are not discussed in this subpart except in its relation to section 13(b)(13). The meaning
and application of these exemptions
are fully considered in subparts D and
E of this part 780.
§ 780.601 Statutory provision.
Section 13(b)(13) of the Fair Labor
Standards Act exempts from the overtime provisions of section 7:
Any employee with respect to his employment in agriculture by a farmer, notwithstanding other employment of such employee in connection with livestock auction
operations in which such farmer is engaged
as an adjunct to the raising of livestock, either on his own account or in conjunction
with other farmers, if such employee (A) is
primarily employed during his workweek in
agriculture by such farmer, and (B) is paid
for his employment in connection with such
livestock auction operations at a wage rate
not less than that prescribed by section
6(a)(1).
§ 780.602 General explanatory statement.
Ordinarily, as discussed in subparts D
and E of this part 780, an employee who
in the same workweek engages in work
which is exempt as agriculture under
section 13(a)(6) or 13(b)(12) of the Act
and also performs nonexempt work to
which the Act applies is not exempt in
that week (§ 780.11). Employees of a
farmer are not employed in work exempt as ‘‘agriculture’’ while engaged in
livestock auction operations in which
the livestock offered at auction includes livestock raised by other farmers (Mitchell v. Hunt, 263 F. 2d 913) (C.A.
615
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§ 780.603
29 CFR Ch. V (7–1–19 Edition)
5); Hearnsberger v. Gillespie, 435 F. 2d 926
(C.A. 8). However, under section
13(b)(13) an employee who is employed
by a farmer in agriculture as well as in
livestock auction operations in the
same workweek will not lose the overtime exemption for that workweek, if
certain conditions are met. These conditions and their meaning and application are discussed in this subpart.
REQUIREMENTS FOR EXEMPTION
§ 780.603 What determines application
of exemption.
The application of the section
13(b)(13) exemption depends largely
upon the nature of the work performed
by the individual employee for whom
exemption is sought. The character of
the employer’s business also determine
the application of the exemption.
Whether an employee is exempt therefore depends upon his duties as well as
the nature of the employer’s activities.
Some employees of the employer may
be exempt in some weeks and others
may not.
§ 780.604 General requirements.
The general requirements for exemption under section 13(b)(13) are as follows:
(a) Employment of the employee
‘‘primarily’’ in agriculture in the particular workweek.
(b) This primary employment by a
farmer.
(c) Engagement by the farmer in raising livestock.
(d) Engagement by the farmer in livestock auction operations ‘‘as an adjunct to’’ the raising of livestock.
(e) Payment of the minimum wage
required by section 6(a)(1) of the Act
for all hours spent in livestock auction
work by the employee.
These requirements will be separately
discussed in the following sections of
this subpart.
§ 780.605 Employment in agriculture.
One requirement for exemption is
that the employee be employed in ‘‘agriculture.’’ ‘‘Agriculture,’’ as used in
the Act, is defined in section 3(f) as follows:
(f) ‘‘Agriculture’’ includes farming in all
its branches and among other things in-
cludes the cultivation and tillage of the soil,
dairying, the production, cultivation, growing, and harvesting of any agricultural or
horticultural commodities (including commodities defined as agricultural commodities in section 15(g) of the Agricultural Marketing Act, as amended), the raising of livestock, bees, fur-bearing animals, or poultry,
and any practices (including any forestry or
lumbering operations) performed by a farmer
or on a farm as an incident to or in conjunction with such farming operations, including
preparation for market, delivery to storage
or to market or to carriers for transportation to market.
An employee meets the tests of being
employed in agriculture when he either
engages in any one or more of the
branches of farming listed in the first
part of the above definition or performs, as an employee of a farmer or on
a farm, practices incident to such
farming operations as mentioned in the
second part of the definition (Farmers
Reservoir & Irrigation Co. v. McComb, 337
U.S. 755). The exemption applies to
‘‘any employee’’ of a farmer whose employment meets the tests for exemption. Accordingly, any employee of the
farmer who is employed in ‘‘agriculture,’’ including laborers, clerical,
maintenance, and custodial employees,
harvesters, dairy workers, and others
may qualify for the exemption under
section 13(b)(13) if the other conditions
of the exemption are met.
§ 780.606 Interpretation of term ‘‘agriculture.’’
Section 3(f) of the Act, which defines
‘‘agriculture,’’ has been extensively interpreted by the Department of Labor
and the courts. Subpart B of this part
780 contains those interpretations
which have full application in construing the term ‘‘agriculture’’ as used
in the 13(b)(13) exemption.
§ 780.607 ‘‘Primarily employed’’ in agriculture.
Not only must the employee be employed in agriculture, but he must be
‘‘primarily’’ so employed during the
particular workweek or weeks in which
the 13(b)(13) exemption is to be applied.
The word ‘‘primarily’’ may be considered to mean chiefly or principally
(Agnew v. Board of Governors, 153 F. 2d
785). This interpretation is consistent
with the view, expressed by the sponsor
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Wage and Hour Division, Labor
§ 780.614
of the exemption at the time of its
adoption on the floor of the Senate (107
Cong. Rec. (daily ed., April 19, 1961), p.
5879), that the word means ‘‘most of his
time.’’ The Department of Labor will
consider that an employee who spends
more than one-half of his hours worked
in the particular workweek in agriculture, as defined in the Act, is ‘‘primarily’’ employed in agriculture during that week.
§ 780.608 ‘‘During his workweek.’’
Section 13(b)(13) specifically requires
that the unit of time to be used in determining whether an employee is primarily employed in agriculture is
‘‘during his workweek.’’ The employee’s own workweek, and not that of any
other person, is to be used in applying
the exemption. The employee’s employment must meet the ‘‘primarily’’
test in each workweek in which the exemption is applied to him.
§ 780.609 Workweek unit in applying
the exemption.
The unit of time to be used in determining the application of the exemption to an employee is the workweek.
(See Overnight Transportation Co. v.
Missel, 316 U.S. 572.) A workweek is a
fixed and regularly recurring interval
of seven consecutive 24-hour periods. It
may begin at any hour of any day set
by the employer and need not coincide
with the calendar week. Once the
workweek has been set it commences
each succeeding week on the same day
and at the same hour. Changing of the
workweek for the purpose of escaping
the requirements of the Act is not permitted.
§ 780.610 Workweek exclusively in exempt work.
An employee who engages exclusively in a workweek in duties which
come within the exemption under section 13(b)(13) and is paid in accordance
with the requirements of that exemption, is exempt in that workweek from
the overtime requirements of the Act.
§ 780.611 Workweek exclusively in agriculture.
In any workweek in which the employee works exclusively in agriculture, performing no duty in respect
to livestock auction operations, his exemption for that week is determined by
application of sections 13(a)(6) and
13(b)(12) to his activities. (See subparts
D and E of this part.)
§ 780.612
Employment by a ‘‘farmer.’’
A further requirement for exemption
is the expressed statutory one that the
employee must be employed in agriculture by a ‘‘farmer.’’ Employment by
a nonfarmer will not qualify an employee for the exemption.
§ 780.613
‘‘By such farmer.’’
The employee’s primary employment
in agriculture during the exempt week
is also required to be by ‘‘such farmer.’’
The phrase ‘‘such farmer’’ refers to the
particular farmer by whom the employee is employed in agriculture and
who engages in the livestock auction
operations as an adjunct to his raising
of livestock. Even if an employee may
spend more than half of his work time
in a workweek in agriculture, he would
not be exempt if such employment in
agriculture were engaged in for various
persons so that less than the primary
portion of his workweek was performed
in his employment in agriculture by
such farmer. For example, an employee
may work a 60-hour week and be employed in agriculture for 50 of those
hours, of which 20 hours are worked in
his employment by the farmer who is
engaged in the livestock auction operations, the other 30 being performed for
a neighboring farmer. Although this
employee was primarily employed in
agriculture during the workweek he is
not exempt. His primary employment
in agriculture was not by the farmer
described in section 13(b)(13) as required.
§ 780.614
Definition of a farmer.
The Act does not define the term
‘‘farmer.’’ Whether an employer is a
‘‘farmer’’ within the meaning of section 13(b)(13) must be determined by
consideration of the particular facts,
keeping in mind the purpose of the exemption. A full discussion of the meaning of the term ‘‘farmer’’ as used in the
Act’s definition of agriculture is contained in §§ 780.130 through 780.133. Generally, as indicated in that discussion,
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§ 780.615
29 CFR Ch. V (7–1–19 Edition)
a farmer under the Act is one who engages, as an occupation, in farming operations as a distinct activity for the
purpose of producing a farm crop. A
corporation or a farmers’ cooperative
may be a ‘‘farmer’’ if engaged in actual
farming of the nature and extent there
indicated.
§ 780.615
Raising of livestock.
Livestock auction operations are
within the 13(b)(13) exemption only
when they are conducted as an adjunct
to the raising of livestock by the farmer. The farmer is required to engage in
the raising of livestock as a prerequisite for the exemption of an employee employed in the operations described in section 13(b) (13). Engagement by the farmer in one or more of
the other branches of farming will not
meet this requirement.
§ 780.616 Operations included in raising livestock.
Raising livestock includes such operations as the breeding, fattening, feeding, and care of domestic animals ordinarily raised or used on farms. A fuller
discussion of the meaning of raising
livestock is contained in §§ 780.119
through 780.122.
§ 780.617 Adjunct livestock auction operations.
The livestock auction operations referred to in section 13(b)(13) are those
engaged in by the farmer ‘‘as an adjunct’’ to the raising of livestock. This
phrase limits the relative extent to
which the farmer may conduct livestock auctions and claim exemption
under section 13(b)(13). To qualify
under the exemption provision, the
auction operations should be an established part of the farmer’s raising of
the livestock and subordinate to it.
(Hearnsberger v. Gillespie, 435 F. 2d 926
(C.A. 8).) The auction operations should
not be conducted on so large a scale as
to predominate over the raising of livestock. The livestock auction should be
adjunct to the farmer’s raising of livestock not only when he engages in it
on his own account, but also when he
joins with other farmers to hold an
auction.
§ 780.618 ‘‘His own account’’—‘‘in conjunction with other farmers.’’
Under the terms of section 13(b)(13),
the farmer may operate a livestock
auction solely for his own benefit or he
may join with ‘‘other farmers’’ to auction livestock for their mutual benefit.
(See § 780.614 with regard to the definition of ‘‘farmer.’’) Unless the auction is
conducted by the farmer alone or with
others who are ‘‘farmers’’ the exemption does not apply.
§ 780.619 Work ‘‘in connection with’’
livestock auction operations.
An employee whose agricultural employment meets the tests for exemption may engage in ‘‘other’’ employment ‘‘in connection with’’ his employer’s livestock auction operations under
the conditions stated in section
13(b)(13). The work which an employee
may engage in under the phrase ‘‘in
connection with’’ includes only those
activities which are a necessary incident to conducting a livestock auction
of the limited type permitted under the
exemption. Such work as transporting
the livestock and caring for it, custodial, maintenance, and clerical duties
are included. Work which cannot be
considered necessarily incident to the
livestock auction is not exempt.
§ 780.620 Minimum wage for livestock
auction work.
The application of the exemption is
further determined by whether another
condition has been met. That condition
is that the employee, in the workweek
in which he engages in livestock auction activities, must be paid at a wage
rate not less than the minimum rate
required by section 6(a)(1) of the Act
for the time spent in livestock auction
work. The exemption does not apply
unless there is payment for all hours
spent in livestock auction work at not
less than the applicable minimum rate
prescribed in the Act.
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Wage and Hour Division, Labor
§ 780.704
EFFECT OF EXEMPTION
§ 780.621 No overtime wages in exempt
week.
In a workweek in which all the requirements of the section 13(b)(13) exemption are met, the employee is exempt from the overtime requirements
of section 7 for that entire workweek.
Subpart H—Employment by Small
Country Elevators Within Area
of
Production;
Exemption
From Overtime Pay Requirements
Under
Section
13(b)(14)
INTRODUCTORY
§ 780.700 Scope and significance of interpretative bulletin.
Subpart A of this part 780 and this
subpart together constitute the official
interpretative bulletin of the Department of Labor with respect to the
meaning and application of section
13(b)(14) of the Fair Labor Standards
Act of 1938, as amended. This section
provides an exemption from the overtime pay provisions of the Act for employees employed by certain country
elevators ‘‘within the area of production,’’ as defined by the Secretary of
Labor in part 536 of this chapter.
§ 780.701 Statutory provision.
Section 13(b)(14) of the Fair Labor
Standards Act exempts from the overtime provisions of section 7:
Any employee employed within the area of
production (as defined by the Secretary) by
an establishment commonly recognized as a
country elevator, including such an establishment which sells products and services
used in the operation of a farm: Provided,
That no more than five employees are employed in the establishment in such operations * * *.
§ 780.702 What determines application
of the exemption.
The application of the section
13(b)(14) exemption depends on te employment of the employee by an establishment of the kind described in the
section, and on such employment
‘‘within the area of production’’ as defined by regulation. In any workweek
when an employee is employed in coun-
try elevator activities by such an establishment within the area of production, the overtime pay requirements of
the Act will not apply to him.
§ 780.703 Basic requirements for exemption.
The basic requirements for exemption of country elevator employees
under section 13(b)(14) of the Act are as
follows:
(a) The employing establishment
must:
(1) Be an establishment ‘‘commonly
recognized as a country elevator,’’ and
(2) Have not more than five employees employed in its operations as such;
and
(b) The employee must:
(1) Be ‘‘employed by’’ such establishment, and
(2) Be employed ‘‘within the area of
production,’’ as defined by the Secretary of Labor.
All the requirements must be met in
order for the exemption to apply to an
employee in any workweek. The requirements in section 13(b)(14) are ‘‘explicit prerequisites to exemption’’ and
the burden of showing that they are
satisfied rests upon the employer who
asserts that the exemption applies
(Arnold v. Kanowsky, 361 U.S. 388). In
accordance with the general rules stated in § 780.2 of subpart A of this part,
this exemption is to be narrowly construed and applied only to those establishments plainly and unmistakably
within its terms and spirit. The requirements for its application will be
separately discussed below.
ESTABLISHMENT COMMONLY RECOGNIZED
AS A COUNTRY ELEVATOR
§ 780.704 Dependence of exemption on
nature of employing establishment.
If an employee is to be exempt under
section 13(b)(14), he must be employed
by an ‘‘establishment’’ which is ‘‘commonly recognized as a country elevator.’’ If he is employed by such an establishment, the fact that it may be
part of a larger enterprise which also
engages in activities that are not recognized as those of country elevators
(see Tobin v. Flour Mills, 185 F. 2d 596)
would not make the exemption inapplicable.
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§ 780.705
§ 780.705
29 CFR Ch. V (7–1–19 Edition)
Meaning of ‘‘establishment.’’
The word ‘‘establishment’’ has long
been interpreted by the Department of
Labor and the courts to mean a distinct physical place of business and not
to include all the places of business
which may be operated by an organization (Phillips v. Walling, 334 U.S. 490;
Mitchell v. Bekins Van and Storage Co.,
352 U.S. 1027). Thus, in the case of a
business organization which operates a
number of country elevators (see Tobin
v. Flour Mills, 185 F. 2d 596), each individual elevator or other place of business would constitute an establishment, within the meaning of the Act.
Country elevators are usually one-unit
places of business with, in some cases,
an adjoining flat warehouse. No problem exists of determining what is the
establishment in such cases. However,
where separate facilities are used by a
country elevator, a determination
must be made, based on their proximity to the elevator and their relationship to its operations, on whether
the facilities and the elevator are one
or more than one establishment. If
there are more than one, it must be determined by which establishment the
employee is employed and whether
that establishment meets the requirements of section 13(b)(14) before the application of the exemption to the employee can be ascertained (compare
Mitchell v. Cammill, 245 F. 2d 207; Remington v. Shaw (W.D. Mich.), 2 WH
Cases 262).
§ 780.706 Recognition of character of
establishment.
A further requirement for exemption
is that the establishment must be
‘‘commonly recognized’’ as a country
elevator. The word ‘‘commonly’’ means
ordinarily or generally and the term
‘‘recognized’’ means known. An elevator should be generally known by the
public as a country elevator. This requirement imposes, on the establishment for whose employees exemption
is sought, the obligation to demonstrate that it engages in the type of
work and has the attributes which will
cause the general public to know it as
a country elevator. The recognition
which the statute requires must be
shown to exist if the employer seeks to
take the benefit of the exemption (see
Arnold v. Kanowsky, 361 U.S. 388, 395).
§ 780.707 Establishments
‘‘commonly
recognized’’ as country elevators.
In determining whether a particular
establishment is one that is ‘‘commonly recognized’’ as a country elevator—and this must be true of the particular establishment if the exemption
is to apply—it should be kept in mind
that the intent of section 13(b)(14) is to
‘‘exempt country elevators that market farm products, mostly grain, for
farmers’’ (107 Cong. Rec. (daily ed.) p.
5883). It is also appropriate to consider
the characteristics and functions which
the courts and government agencies
have recognized as those of ‘‘country
elevators’’ and the distinctions which
have been recognized between country
elevators and other types of establishments. For example, in proceedings to
determine industries of a seasonal nature under part 526 of the regulations
in this chapter, ‘‘country’’ grain elevators, public terminal and subterminal grain elevators, wheat flour mill
elevators, non-elevator-type bulk grain
storing establishments, and ‘‘flat warehouses’’ in which grain is stored in
sacks, have been recognized as distinct
types of establishments engaged in
grain storage. (See 24 FR 2584; 3581.) As
the legislative history of the exemption cited above makes clear, country
elevators handle ‘‘mostly grain.’’ The
courts have recognized that the terms
‘‘country elevator’’ and ‘‘country grain
elevator’’ are interchangeable (the
term ‘‘country house’’ has also been
recognized as synonymous), and that
there are significant differences between country elevators and other
types of establishments engaged in
grain storage (see Tobin v. Flour Mils,
185 F. 2d 596; Mitchell v. Sampson Const.
Co. (D. Kan.) 14 WH Cases 269).
§ 780.708 A country elevator is located
near and serves farmers.
Country elevators, as commonly recognized, are typically located along
railroads in small towns or rural areas
near grain farmers, and have facilities
especially designed for receiving bulk
grain by wagon or truck from farms,
elevating it to storage bins, and direct
loading of the grain in its natural state
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Wage and Hour Division, Labor
§ 780.710
into railroad boxcars. The principal
function of such elevators is to provide
a point of initial concentration for
grain grown in their local area and to
handle, store for limited periods, and
load out such grain for movement in
carload lots by rail from the producing
area to its ultimate destination. They
also perform a transport function in facilitating the even and orderly movement of grain over the interstate network of railroads from the producing
areas to terminal elevators, markets,
mills, processors, consumers, and to
seaboard ports for export. The country
elevator is typically the farmer’s market for his grain or the point at which
his grain is delivered to carriers for
transportation to market. The elevator
may purchase the grain from the farmer or store and handle it for him, and it
may also store and handle substantial
quantities of grain owned by or pledged
to the Government under a price-support program. Country elevators customarily receive, weigh, test, grade,
clean, mix, dry, fumigate, store, and
load out grain in its natural state, and
provide certain incidental services and
supplies to farmers in the locality. The
foregoing attributes of country elevators have been recognized by the
courts. See, for example, Mitchell v.
Sampson Const. Co. (D. Kan.) 14 WH
Cases 269; Tobin v. Flour Mills, 185 F. 2d
596; Holt v. Barnesville Elevator Co., 145
F. 2d 250; Remington v. Shaw (W.D.
Mich.), 2 WH Cases 262.
§ 780.709 Size and equipment of a
country elevator.
Typically, the establishments commonly recognized as country elevators
are small. Most of the establishments
intended to come within the exemption
have only one or two employees (107
Cong. Rec. (daily ed.) p. 5883), although
some country elevators have a larger
number. (See Holt v. Barnesville Elevator
Co., 145 F. 2d 250.) Establishments with
more than five employees are not within the exemption. (See § 780.712.) The
storage capacity of a country elevator
may be as small as 6,000 bushels (see
Tobin v. Flour Mills, 185 F. 2d 596) and
will generally range from 15,000 to
50,000 bushels. As indicated in § 780.708,
country elevators are equipped to receive grain in wagons or trucks from
farmers and to load it in railroad boxcars. The facilities typically include
scales for weighing the farm vehicles
loaded with grain, grain bins, cleaning
and mixing machinery, driers for
prestorage drying of grain and endless
conveyor belts or chain scoops to carry
grain from the ground to the top of the
elevator. The facilities for receiving
grain in truckloads or wagonloads from
farmers and the limited storage capacity, together with location of the elevator in or near the grain-producing
area, serve to distinguish country elevators from terminal or subterminal
elevators, to which the exemption is
not applicable. The latter are located
at terminal or interior market points,
receive grain in carload lots, and receive the bulk of their grain from country elevators. Although some may receive grain from farms in the immediate areas, they are not typically
equipped to receive grain except by
rail. (See Tobin v. Flour Mills, supra;
Mitchell v. Sampson Const. Co. (D. Kan.)
14 WH Cases 269.) It is the facilities of
a country elevator for the elevation of
bulk grain and the discharge of such
grain into rail cars that make it an
‘‘elevator’’ and distinguish it from
warehouses that perform similar functions in the flat warehousing, storage,
and marketing for farmers of grain in
sacks. Such warehouses are not ‘‘elevators’’ and therefore do not come
within the section 13(b)(14) exemption.
§ 780.710 A country elevator may sell
products and services to farmers.
Section 13(b)(14) expressly provides
that an establishment commonly recognized as a country elevator, within
the meaning of the exemption, includes
‘‘such an establishment which sells
products and services used in the operation of a farm.’’ This language makes
it plain that if the establishment is
‘‘such an establishment,’’ that is, if its
functions and attributes are such that
it is ‘‘commonly recognized as a country elevator’’ but not otherwise, exemption of its employees under this
section will not be lost solely by reason
of the fact that it sells products and
services used in the operation of a
farm. Establishments commonly recognized as country elevators, especially
the smaller ones, not only engage in
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§ 780.711
29 CFR Ch. V (7–1–19 Edition)
the storing of grain but also conduct
various merchandising or ‘‘sideline’’
operations as well. They may distribute feed grains to feeders and other
farmers, sell fuels for farm use, sell and
treat seeds, and sell other farm supplies such as fertilizers, farm chemicals, mixed concentrates, twine, lumber, and farm hardware supplies and
machinery. (See Tobin v. Flour Mills,
185 F. 2d 596; Holt v. Barnesville Elevator
Co., 145 F. 2d 250). Services performed
for farmers by country elevators may
include grinding of feeds, cleaning and
fumigating seeds, supplying bottled
gas, and gasoline station services. As
conducted by establishments commonly recognized as country elevators,
the selling of goods and services used
in the operation of a farm is a minor
and incidental secondary activity and
not a main business of the elevator (see
Tobin v. Flour Mills, supra; Holt v.
Barnesville Elevator Co., supra).
§ 780.711 Exemption of mixed business
applies only to country elevators.
The language of section 13(b)(14) permitting application of the exemption
to country elevators selling products
and services used in the operation of a
farm does not extend the exemption to
an establishment selling products and
services to farmers merely because of
the fact that it is also equipped to provide elevator services to its customers.
The exemption will not apply if the extent of its business of making sales to
farmers is such that the establishment
is not commonly known as a ‘‘country
elevator’’ or is commonly recognized as
an establishment of a different kind.
As the legislative history of the exemption indicates, its purpose is limited to
exempting country elevators that market farm products, mostly grain, for
farmers who are working long workweeks and need to have the elevator facilities open and available for disposal
of their crops during the same hours
that are worked by the farmers. (See
107 Cong. Rec. (daily ed.) p.5883.) The
reason for the exemption does not justify its application to employees selling products and services to farmers
otherwise than as an incidental and
subordinate part of the business of a
country elevator as commonly recognized. An establishment making such
sales must be ‘‘such an establishment’’
to come within this exemption. An employer may, however, be engaged in the
business of making sales of goods and
services to farmers in an establishment
separate from the one in which he provides the recognized country elevator
services. In such event, the exemption
of employees who work in both establishments may depend on whether the
work in the sales establishment comes
within another exemption provided by
the Act. (See Remington v. Shaw (W.D.
Mich.), 2 WH Cases 262, and infra,
§ 780.724.)
EMPLOYMENT OF ‘‘NO MORE THAN FIVE
EMPLOYEES’’
§ 780.712 Limitation of exemption to
establishments with five or fewer
employees.
If the operations of an establishment
are such that it is commonly recognized as a country elevator, its employees may come within the section
13(b)(14) exemption provided that ‘‘no
more than five employees are employed
in the establishment in such operations’’. The exemption is intended, as
explained by its sponsor, to ‘‘affect
only institutions that have five employees or less’’ (107 Cong. Rec. (daily
ed.) p. 5883). Since the Act is applied on
a workweek basis, a country elevator is
not an exempt place of work in any
workweek in which more than five employees are employed in its operations.
§ 780.713 Determining the number of
employees generally.
The number of employees referred to
in section 13(b)(14) is the number ‘‘employed in the establishment in such operations’’. The determination of the
number of employees so employed involves a consideration of the meaning
of employment ‘‘in the establishment’’
and ‘‘in such operations’’ in relation to
each other. If, in any workweek, an
employee is ‘‘employed in the establishment in such operations’’ for more
than a negligible period of time, he
should be counted in determining
whether, in that workweek, more than
five employees were so employed. An
employee so employed must be counted
for this purpose regardless of whether
he would, apart from this exemption,
be within the coverage of the Act. Also,
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Wage and Hour Division, Labor
§ 780.716
as noted in the following discussion,
the employees to be counted are not
necessarily limited to employees directly employed by the country elevator but may include employees directly
employed by others who are engaged in
performing operations of the elevator
establishment.
§ 780.714 Employees employed ‘‘in such
operations’’ to be counted.
(a) The five-employee limitation on
the exemption for country elevators relates to the number of employees employed in the establishment ‘‘in such
operations.’’ This means that the employees to be counted include those
employed in, and do not include any
who are not employed in, the operations of the establishment commonly
recognized as a country elevator, including the operations of such an establishment in selling products and
services used in the operation of a
farm, as previously explained.
(b) In some circumstances, an employee employed in an establishment
commonly recognized as a country elevator may, during his workweek, be
employed in work which is not part of
the operations of the elevator establishment. This would be true, for example, in the case of an employee who
spends his entire workweek in the construction of an overflow warehouse for
the elevator. Such an employee would
not be counted in that workweek because constructing a warehouse is not
part of the operations of the country
elevator but is an entirely distinct activity.
(c) Employees employed by the same
employer in a separate establishment
in which he is engaged in a different
business, and not employed in the operations of the elevator establishment,
would not be counted.
(d) Employees not employed by the
elevator establishment who come there
sporadically, occasionally, or casually
in the course of their duties for other
employers are not employed in the operations of the establishment commonly recognized as a country elevator
and would not be counted in determining whether the five-employee limitation is exceeded in any workweek.
Examples of such employees are employees of a restaurant who bring food
and beverages to the elevator employees, and employees of other employers
who make deliveries to the establishment.
§ 780.715 Counting employees ‘‘employed in the establishment.’’
(a) Employees employed ‘‘in the establishment,’’ if employed ‘‘in such operations’’ as previously explained, are
to be counted in determining whether
the five-employee limitation on the exemption is exceeded.
(b) Employees employed ‘‘in’’ the establishment clearly include all employees engaged, other than casually or
sporadically, in performing any duties
of their employment there, regardless
of whether they are direct employees of
the country elevator establishment or
are employees of a farmer, independent
contractor, or other person who are
suffered or permitted to work (see Act,
section 3(g)) in the establishment.
However, tradesmen, such as dealers
and their salesmen, for example, are
not employed in the elevator simply
because they visit the establishment to
do business there. Neither are workers
who deliver, on behalf of their employers, goods used in the sideline business
of the establishment to be considered
employed in the elevator.
(c) The use of the language ‘‘employed in’’ rather than ‘‘engaged in’’
makes it plain also that the employees
to be counted include all those employed by the establishment in its operations without regard to whether
they are engaged in the establishment
or away from it in performing their duties. This has been the consistent interpretation of similar language in
other sections of the Act.
EMPLOYEES ‘‘EMPLOYED * * * BY’’ THE
COUNTRY ELEVATOR ESTABLISHMENT
§ 780.716 Exemption
of
employees
‘‘employed * * * by’’ the establishment.
If the establishment is a country elevator establishment qualified for exemption as previously explained, and if
the ‘‘area of production’’ requirement
is met (see § 780.720), any employee
‘‘employed * * * by’’ such establishment will come within the section
13(b)(14) exemption. This will bring
within the exemption employees who
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§ 780.717
29 CFR Ch. V (7–1–19 Edition)
are engaged in duties performed away
from the establishment as well as those
whose duties are performed in the establishment itself, so long as such employees are ‘‘employed * * * by’’ the
country elevator establishment within
the meaning of the Act. The employees
employed ‘‘by’’ the establishment, who
may come within the exemption if the
other requirements are met, are not
necessarily identical with the employees employed ‘‘in the establishment in
such operations’’ who must be counted
for purposes of the five-employee limitation since some of the latter employees may be employed by another employer. (See §§ 780.712 through 780.715.)
§ 780.717 Determining whether there is
employment ‘‘by’’ the establishment.
(a) No single test will determine
whether a worker is in fact employed
‘‘by’’ a country elevator establishment.
This question must be decided on the
basis of the total situation (Rutherford
Food Corp. v. McComb, 331 U.S. 722; U.S.
v. Silk, 331 U.S. 704). Clearly, an employee is so employed where he is hired
by the elevator, engages in its work, is
paid by the elevator and is under its
supervision and control.
(b) ‘‘Employed by’’ requires that
there be an employer-employee relationship between the worker and the
employer engaged in operating the elevator. The fact, however, that the employer carries an employee on the payroll of the country elevator establishment which qualifies for exemption
does not automatically extend the exemption to that employee. In order to
be exempt an employee must actually
be ‘‘employed by’’ the exempt establishment. This means that whether the
employee is performing his duties inside or outside the establishment, he
must be employed in the work of the
exempt establishment itself in activities within the scope of its exempt
business in order to meet the requirement of actual employment ‘‘by’’ the
establishment (see Walling v. Connecticut Co., 154 F. 2d 552).
(c) In the case of employers who operate multiunit enterprises and conduct
business operations in more than one
establishment (see Tobin v. Flour Mills,
185 F. 2d 596; Remington v. Shaw (W.D.
Mich.) 2 WH Cases 262), there will be
employees of the employer who perform
central
office
or
central
warehousing activities for the enterprise or for more than one establishment, and there may be other employees who spend time in the various establishments of the enterprise performing duties for the enterprise rather than for the particular establishment in which they are working at the
time. Such employees are employed by
the enterprise and not by any particular establishment of the employer
(Mitchell v. Miller Drugs, 255 F. 2d 574;
Mitchell v. Kroger Co., 248 F. 2d 935). Accordingly, so long as they perform such
functions for the enterprise they would
not be exempt as employees employed
by a country elevator establishment
operated as part of such an enterprise,
even while stationed in it or placed on
its payroll.
§ 780.718 Employees who may be exempt.
Employees employed ‘‘by’’ a country
elevator establishment which qualifies
for exemption will be exempt, if the
‘‘area of production’’ requirement is
met, while they are engaged in any of
the customary operations of the establishment which is commonly recognized as a country elevator. Included
among such employees are those who
are engaged in selling the elevator’s
goods or services, keeping its books, receiving, handling, and loading out
grain, grinding and mixing feed or
treating seed for farmers, performing
ordinary maintenance and repair of the
premises and equipment or engaging in
any other work of the establishment
which is commonly recognized as part
of its operations as a country elevator.
An employee employed by such an elevator is not restricted to performing
his work inside the establishment. He
may also engage in his exempt duties
away from the elevator. For example, a
salesman who visits farmers on their
farms to discuss the storage of their
grain in the elevator is performing exempt work while on such visits. It is
sufficient that an employee employed
by an elevator is, while working away
from the establishment, doing the exempt work of the elevator. If the establishment is engaged only in activities
commonly recognized as those of a
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Wage and Hour Division, Labor
§ 780.721
country elevator and none of its employees engaged in any other activities, all the employees employed by the
country elevator will come within the
exemption if no more than five employees are employed in the establishment
in such operations and if the ‘‘area of
production’’ requirement is met.
§ 780.719 Employees not employed ‘‘by’’
the elevator establishment.
Since the exemption depends on employment ‘‘by’’ an establishment qualified for exemption rather than simply
the work of the employee, employees
who are not employed by the country
elevator are not exempt. This is so
even though they work in the establishment and engage in duties which
are part of the services which are commonly recognized as those of a country
elevator. Since they are not employed
by the elevator, employees of independent contractors, farmers and others who work in or for the elevator are
not exempt under section 13(b)(14) simply because they work in or for the elevator (see Walling v. Friend, 156 F. 2d
429; Mitchell v. Kroger, 248 F. 2d 935;
Durkin v. Joyce Agency, 110 F. Supp. 918,
affirmed sub. nom. Mitchell v. Joyce
Agency, 348 U.S. 945). Thus an employee
of an independent contractor who
works inside the elevator in drying
grain for the elevator is not exempt
under this section.
EMPLOYMENT ‘‘WITHIN THE AREA OF
PRODUCTION’’
§ 780.720 ‘‘Area of production’’ requirement of exemption.
(a) In addition to the requirements
for exemption previously discussed,
section 13(b)(14) requires that the employee employed by an establishment
commonly recognized as a country elevator be ‘‘employed within the area of
production (as defined by the Secretary).’’ Regulations defining employment within the ‘‘area of production’’
for purposes of section 13(b)(14) are contained in part 536 of this chapter. All
the requirements of the applicable regulations must be met in order for the
exemption to apply.
(b) Under the regulations, an employee is considered to be employed
within ‘‘the area of production’’ within
the meaning of section 13(b)(14) if the
country elevator establishment by
which he is employed is located in the
‘‘open country or a rural community,’’
as defined in the regulations, and receives 95 percent or more of the agricultural commodities handled through
its elevator services from normal rural
sources of supply within specified distances from the country elevator. A
definition of ‘‘area of production’’ in
terms of such criteria has been upheld
by the U.S. Supreme Court in Mitchell
v. Budd, 350 U.S. 473. Reference should
be made to part 536 of this chapter for
the precise requirements of the definition.
(c) However, it is appropriate to
point out here that nothing in the definition places limits on the distance
from which commodities come to the
elevator for purposes other than the
storage of marketing of farm products.
The commodities, 95 percent of which
are required by definition to come from
specified
distances,
are
those
agriculural commodities received by
the elevator with respect to which it
performs the primary concentration,
storage, and marketing functions of a
country elevator as previously explained (see § 780.708). This is consistent
with the emphasis given, in the legislative history, to the country elevator’s
function of marketing farm products,
mostly grain, for farmers (see 107 Cong.
Rec. (daily ed.) p. 5883). Commodities
brought or shipped to a country elevator establishment not for storage or for
market but in connection with its secondary, incidental, or side-line functions of selling products and services
used in the operation of a farm (see
§ 780.610) are not required to be counted
in determining whether 95 percent of
the agricultural commodities handled
come from rural sources of supply
within the specified distances.
WORKWEEK APPLICATION OF EXEMPTION
§ 780.721 Employment in the particular workweek as test of exemption.
The period for determining whether
the ‘‘area of production’’ requirement
of section 13(b)(14) is met is prescribed
in the regulations in part 536 of this
chapter. Whether or not an establishment is one commonly recognized as a
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§ 780.722
29 CFR Ch. V (7–1–19 Edition)
country elevator must be tested by
general functions and attributes over a
representative period of time, as previously explained, and requires reexamination for exemption purposes only
if these change. But insofar as the exemption depends for its application on
the employment of employees, it applies on a workweek basis. An employee employed by the establishment
is not exempt in any workweek when
more than five employees ‘‘are employed in the establishment in such operations,’’ as previously explained (see
§§ 780.712 through 780.715). Nor is any
employee within the exemption in a
workweek when he is not employed
‘‘by’’ the establishment within the
meaning of section 13(b)(14) (see
§§ 780.716 through 780.719). This is in accordance with the general rule that the
unit of time to be used in determining
the application of the Act and its exemptions to an employee is the workweek. (See Overnight Motor Transportation Co. v. Missel, 316 U.S. Mitchell v.
Hunt, 263 F. 2d 913; McComb v. Puerto
Rico Tobacco Marketing Co-op. Ass’n, 80
F. Supp. 953, affirmed 181 F. 2d 697.) A
workweek is a fixed and regularly recurring interval of seven consecutive
24-hour periods. It may begin at any
hour of any day set by the employer
and need not coincide with the calendar week. Once the workweek has
been set it commences each succeeding
week on the same day and at the same
hour. Changing the workweek for the
purpose of escaping the requirements
of the Act is not permitted.
§ 780.722 Exempt workweeks.
An employee performing work for an
establishment commonly recognized as
a country elevator is exempt under section 13(b)(14) in any workweek when he
is, for the entire workweek, employed
‘‘by’’ such establishment, if no more
than five employees are ‘‘employed in
the establishment in such operations’’,
and if the ‘‘area of production’’ requirement is met.
§ 780.723 Exempt and nonexempt employment.
Under section 13(b)(14), where an employee, for part of his workweek, is employed ‘‘by’’ an ‘‘exempt’’ establishment (one commonly recognized as a
country elevator which has five employees or less employed in the establishment in such operations in that
workweek) and the employee is, in his
employment by the establishment, employed ‘‘within the area of production’’
as defined by the regulations, but in
the remainder of the workweek is employed by his employer in an establishment or in activities not within this or
another exemption provided by the
Act, in the course of which he performs
any work to which the Act applies, the
employee is, not exempt for any part of
that workweek (see Mitchell v. Hunt,
263 F. 2d 913; Waialua v. Maneja, 77 F.
Supp. 480; Walling v. Peacock Corp., 58
F. Supp. 880; McComb v. Puerto Rico Tobacco Marketing Co-op. Ass’n, 181 F. 2d
697).
§ 780.724 Work exempt under another
section of the Act.
Where an employee’s employment
during part of his workweek would
qualify for exemption under section
13(b)(14) if it continued throughout the
workweek, and the remainder of his
workweek is spent in employment
which, if it continued throughout the
workweek, would qualify for exemption
under another section or sections of
the Act, the exemptions may be combined (see Remington v. Shaw (W.D.
Mich.) 2 WH Cases 262). The employee,
however, qualifies for exemption only
to the extent of the exemption which is
more limited in scope (see Mitchell v.
Hunt, 263 F. 2d 913). For example, if
part of the work is exempt from both
minimum wage and overtime compensation under one section of the Act
and the rest is exempt only from the
overtime pay provisions under another
section, the employee is exempt that
week from the overtime provisions, but
not from the minimum wage requirements. In this connection, attention is
directed to another exemption in the
Act which relates to work in grain elevators, which may apply in appropriate
circumstances, either in combination
with section 13(b)(14) or to employees
for whom the requirements of section
13(b)(14) cannot be met. This other exemption is that provided by section
7(c). Section 7(c), which is discussed in
part 526 of this chapter, provides a limited overtime exemption for employees
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Wage and Hour Division, Labor
§ 780.804
employed in the seasonal industry of
storing grain in country grain elevators, public terminal and sub-terminal elevators, wheat flour mills,
nonelevator bulk storing establishments
and
flat
warehouses,
§ 526.10(b)(14) of this chapter.
Subpart I—Employment in Ginning
of Cotton and Processing of
Sugar Beets, Sugar-Beet Molasses, Sugarcane, or Maple
Sap into Sugar or Syrup; Exemption From Overtime Pay
Requirements Under Section
13(b)(15)
INTRODUCTORY
§ 780.800 Scope and significance of interpretative bulletin.
Subpart A of this part 780 and this
subpart I constitute the official interpretative bulletin of the Department of
Labor with respect to the meaning and
application of section 13(b)(15) of the
Fair Labor Standards Act of 1938, as
amended. This section provides an exemption from the overtime pay provisions of the Act for two industries (a)
for employees engaged in ginning of
cotton for market in any place of employment located in a county where
cotton is grown in commercial quantities and (b) for employees engaged in
the processing of sugar beets, sugarbeet molasses, sugarcane or maple sap,
into sugar (other than refined sugar) or
syrup. The limited overtime exemptions provided for cotton ginning and
for sugar processing under sections 7(c)
and 7(d) (see part 526 of this chapter)
are not discussed in this subpart.
§ 780.801 Statutory provisions.
Section 13(b)(15) of the Fair Labor
Standards Act exempts from the overtime requirements of section 7:
Any employee engaged in ginning of cotton
for market, in any place of employment located in a county where cotton is grown in
commercial quantities, or in the processing
of sugar beets, sugar-beet molasses, sugarcane, or maple sap, into sugar (other than refined sugar) or syrup.
Section 13(b)(15) supplants two exemptions that were contained in the Act
prior to the Fair Labor Standards
Amendments of 1966. The first is
former section 13(a)(18), having identical language, which provided a complete exemption for those employed in
the ginning of cotton. The second is
the former section 7(c) which provided
an overtime exemption for the employees of an employer engaged in sugar
processing operations resulting in
unrefined sugar or syrup.
§ 780.802 What determines application
of the exemption.
It is apparent from the language of
section 13(b)(15) that the application of
this exemption depends upon the nature and purpose of the work performed
by the individual employee for whom
exemption is sought, and in the case of
ginning of cotton on the location of the
place of employment where the work is
done and other factors as well. It does
not depend upon the character of the
business of the employer. A determination of whether an employee is exempt
therefore requires an examination of
that employee’s duties. Some employees of the employer may be exempt
while others may not.
§ 780.803 Basic conditions of exemption; first part, ginning of cotton.
Under the first part of section
13(b)(15) of the Act, the ginning of cotton, all the following conditions must
be met in order for the exemption to
apply to an employee:
(a) He must be ‘‘engaged in ginning.’’
(b) The commodity ginned must be
cotton.
(c) The ginning of the cotton must be
‘‘for market.’’
(d) The place of employment in which
this work is done must be ‘‘located in
a county where cotton is grown in commercial quantities.’’ The following sections discuss the meaning and application of these requirements.
GINNING OF COTTON FOR MARKET
§ 780.804
‘‘Ginning’’ of cotton.
The term ‘‘ginning’’ refers to operations performed on ‘‘seed cotton’’ to
separate the seeds from the spinnable
fibers. (Moore v. Farmer’s Manufacturing
and Ginning Co., 51 Ariz., 378, 77 F. 2d
209; Frazier v. Stone, 171 Miss. 56, 156 So.
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§ 780.805
29 CFR Ch. V (7–1–19 Edition)
596). ‘‘Seed cotton’’ is cotton in its natural state (Burchfield v. Tanner, 142
Tex. 404, 178 S.W. 2d 681, 683) and the
ginning to which section 13(b)(15) refers
is the ‘‘first processing’’ of this agricultural commodity (107 Cong. Rec. (daily
ed.) p. 5887), which converts it into the
marketable product commonly known
as ‘‘lint cotton’’ (Wirtz v. Southern
Pickery Inc. (W.D. Tenn.) 278 F. Supp.
729; Mangan v. State, 76 Ala. 60, 66) by
removing the seed from the lint and
then pressing and wrapping the lint
into bales.
§ 780.805 Ginning of ‘‘cotton.’’
Only the ginning of ‘‘cotton’’ is within the first part of the exemption. An
employee engaged in ginning of moss,
for example, would not be exempt. The
reconditioning of cotton waste resulting from spinning or oil mill operations is not included, since such waste
is not the agricultural commodity in
its natural state for whose first processing the exemption was provided.
(See 107 Cong. Rec. (daily ed.) p. 5887.)
The ‘‘cotton,’’ ‘‘seed cotton,’’ and ‘‘lint
cotton’’ ginned by ordinary gins do not
include ‘‘linter’’ or ‘‘Grabbot’’ cotton,
obtained by reginning cotton seed and
hard locks of cotton mixed with hulls,
bolls, and other substances which could
not be removed by ordinary ginning
(Mississippi Levee Com’rs v. Refuge Cotton Oil Co., 91 Miss. 480, 44 So. 828, 829).
Mote ginning, the process whereby raw
motes (leaves, trash, sticks, dirt, and
immature cotton with some cottonseed) are run through a ginning process
to extract the short-fiber cotton, is not
included in the ginning of cotton unless it is done as a part of the whole
ginning process in one gin establishment as a continuous and uninterrupted series of operations resulting in
useful cotton products including the
regular ‘‘gin’’ bales, the ‘‘mote’’ bales
(short-fiber cotton), and the cottonseed.
§ 780.806 Exempt ginning limited to
first processing.
As indicated in § 780.804, the ginning
for which the exemption is intended is
the first processing of the agricultural
commodity, cotton, in its natural
form, into lint cotton for market. It
does not include further operations
which may be performed on the cottonseed or the cotton lint, even though
such operations are performed in the
same establishment where the ginning
is done. Delinting, which is the removal of short fibers and fuzz from cottonseed, is not exempt under section
13(b)(15). It is not first processing of
the seed cotton; rather, it is performed
on cottonseed, usually in cottonseed
processing establishments, and even if
regarded as ginning (Mitchell v. Burgess,
239 F. 2d 484) it is not the ginning of
cotton for market contemplated by
section 13(b)(15). It may come within
the overtime exemption provided in
section 7(d) of the Act for certain seasonal industries. (See § 526.11(b)(1) of
part 526 of this chapter.) Compressing
of cotton, which is the pressing of bales
into higher density bales than those
which come from the gin, is a further
processing of the cotton entirely removed from ginning (Peacock v. Lubbock Compress Co., 252 F. 2d 892). Employees engaged in compressing may,
however, be subject to exemption from
overtime pay under section 7(c). (See
§ 526.10(b)(8) of this chapter.)
§ 780.807 Cotton must be ginned ‘‘for
market.’’
As noted in § 780.804, it is ginning of
seed cotton which converts the cotton
to marketable form. Section 13(b)(15),
however, provides an exemption only
where the cotton is actually ginned
‘‘for market.’’ (Wirtz v. Southern
Pickery, Inc. (W.D. Tenn.) 278 F. Supp.
729.) The ginning of cotton for some
other purpose is not exempt work. Cotton is not ginned ‘‘for market’’ if it is
not to be marketed in the form in
which the ginning operation leaves it.
Cotton is not ginned ‘‘for market’’ if it
is being ginned preliminary to further
processing operations to be performed
on the cotton by the same employer before marketing the commodity in an
altered form. (Compare Mitchell v. Park
(D. Minn.), 14 WH Cases 43, 36 Labor
Cases 65, 191; Bush v. Wilson & Co., 157
Kans. 82, 138 P. 2d 457; Gaskin v. Clell
Coleman & Sons, 2 WH Cases 977.)
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Wage and Hour Division, Labor
§ 780.811
EMPLOYEES ‘‘ENGAGED IN’’ GINNING
§ 780.808 Who may qualify for the exemption generally.
The exemption applies to ‘‘any employee engaged in’’ ginning of cotton.
This means that the exemption may
apply to an employee so engaged, no
matter by whom he is employed. Employees of the gin operator, of an independent contractor, or of a farmer may
come within the exemption in any
workweek when all other conditions of
the exemption are met. To come within
the exemption, however, an employee’s
work must be an integral part of ginning of cotton, as previously described.
The courts have uniformly held that
exemptions in the Act must be construed strictly to carry out the purpose
of the Act. (See § 780.2, in subpart A of
this part.) No operation in which an
employee engages in a place of employment where cotton is ginned is exempt
unless it comes within the meaning of
the term ‘‘ginning.’’
§ 780.809 Employees engaged in exempt operations.
Employees engaged in actual ginning
operations, as described in § 780.804 will
come within the exemption if all other
conditions of section 13(b)(15) are met.
The following activities are among
those within the meaning of the term
‘‘engaged in ginning of cotton’’:
(a) ‘‘Spotting’’ vehicles in the gin
yard or in nearby areas before or after
being weighed.
(b) Moving vehicles in the gin yard or
from nearby areas to the ‘‘Suction’’
and reparking them subsequently.
(c) Weighing the seed cotton prior to
ginning, weighing lint cotton and seed
subsequent to ginning (including preparation of weight records and tickets in
connection with weighing operations).
(d) Placing seed cotton in temporary
storage at the gin and removing the
cotton from such storage to be ginned.
(e) Operating the suction feed.
(f) Operating the gin stands and
power equipment.
(g) Making gin repairs during the
ginning season.
(h) Operating the press, including the
handling of bagging and ties in connection with the ginning operations of
that gin.
(i) Removing bales from the press to
holding areas on or near the gin premises.
(j) Others whose work is so directly
and physically connected with the ginning process itself that it constitutes
an integral part of its actual performance.
§ 780.810 Employees not ‘‘engaged in’’
ginning.
Since an employee must actually be
‘‘engaged in’’ ginning of cotton to come
within the exemption, an employee engaged in other tasks, not an integral
part of ‘‘ginning’’ operations, will not
be exempt. (See, for rule that only the
employees performing the work described in the exemption are exempt,
Wirtz v. Burton Mercantile and Gin Co.,
Inc., 234 F. Supp. 825, aff’d per curiam
338 F. 2d 414, cert. denied 380 U.S. 965;
Wirtz v. Kelso Gin Co., Inc. (E.D. Ark.)
50 Labor Cases 31, 631, 16 WH Cases 663;
Mitchell v. Stinson, 217 F. 2d 210; Phillips
v. Meeker Cooperative Light and Power
Ass’n 63 F. Supp. 743, affirmed 158 F. 2d
698; Jenkins v. Durkin, 208 F. 2d 941;
Heaburg v. Independent Oil Mill, Inc., 46
F. Supp. 751; Abram v. San Joaquin Cotton Oil Co., 46 F. Supp. 969.) The following activities are among those not
within the meaning of the term ‘‘engaged in ginning of cotton’’:
(a) Transporting seed cotton from
farms or other points to the gin.
(b) General maintenance work (as opposed to operating repairs).
(c) General office and custodial duties.
(d) ‘‘Watching’’ duties.
(e) Working in the seed house.
(f) Transporting seed, hulls, and
ginned bales away from the gin.
(g) Any activity performed during
the ‘‘off-season.’’
COUNTY WHERE COTTON IS GROWN IN
COMMERCIAL QUANTITIES
§ 780.811 Exemption dependent upon
place of employment generally.
Under the first part of section
13(b)(15), if the employee’s work meets
the requirements for exemption, the location of the place of employment
where he performs it will determine
whether the exemption is applicable.
This location is required to be in a
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§ 780.812
29 CFR Ch. V (7–1–19 Edition)
county where cotton is grown in commercial quantities. The exemption will
apply, however, to an employee who
performs such work in ‘‘any’’ place of
employment in such a county. The
place of employment in which he engages in ginning need not be an establishment exclusively or even principally devoted to such operations; nor
is it important whether the place of
employment is on a farm or in a town
or city in such a county, or whether or
to what extent the cotton ginned there
comes from the county in which the
ginning is done or from nearby or distant sources. It is enough if the place
of employment where the employee is
engaged in ginning cotton for market
is ‘‘located’’ in such a county.
§ 780.812 ‘‘County.’’
As used in the section 13(b)(15) exemption, the term ‘‘county’’ refers to
the political subdivision of a State
commonly known as such, whether or
not such a unit bears that name in a
particular State. It would, for example,
refer to the political subdivision known
as a ‘‘parish’’ in the State of Louisiana.
A place of employment would not be located in a county, within the meaning
of the exemption, if it were located in
a city which, in the particular State,
was not a part of any county.
§ 780.813 ‘‘County where cotton is
grown.’’
For the exemption to apply, the employee must be ginning cotton in a
place of employment in a county where
cotton ‘‘is grown’’ in the described
quantities. It is the cotton grown, not
the cotton ginned in the place of employment, to which the quantity test is
applicable. The quantities of cotton
ginned in the county do not matter, so
long as the requisite quantities are
grown there.
§ 780.814 ‘‘Grown in commercial quantities.’’
Cotton must be ‘‘grown in commercial quantities’’ in the county where
the place of employment is located if
an employee ginning cotton in such
place is to be exempt under section
13(b)(15). The term ‘‘commercial quantities’’ is not defined in the statute,
but in the cotton-growing areas of the
country there should be little question
in most instances as to whether commercial quantities of cotton are grown
in the county where the ginning is
done. If it should become necessary to
determine whether commercial quantities are grown in a particular county,
it would appear appropriate in view of
crop-year variations to consider average quantities produced over a representative period such as 5 years. On
the question of whether the quantities
grown are ‘‘commercial’’ quantities,
the trade understanding of what are
‘‘commercial’’ quantities of cotton
would be important. It would appear
appropriate also to measure ‘‘commercial’’ quantities in terms of marketable
lint cotton in bales rather than by
acreage or amounts of seed cotton
grown, since seed cotton is not a commercially marketable product (Mangan
v. State, 76 Ala. 60). Also, production of
a commodity in ‘‘commercial’’ quantities generally involves quantities sufficient for sale with a reasonable expectation of some return to the producers in excess of costs (Bianco v. Hess
(Ariz.), 339 P. 2d 1038; Nystel v. Thomas
(Tex. Civ. App.) 42 S.W. 2d 168).
§ 780.815 Basic conditions of exemption; second part, processing of
sugar beets, sugar-beet molasses,
sugarcane, or maple sap.
Under the second part of section
13(b)(15) of the Act, the following conditions must be met in order for the exemption to apply to an employee:
(a) He must be engaged in the processing of sugar beets, sugar-beet molasses, sugarcane, or maple sap.
(b) The product of the processing
must be sugar (other than refined
sugar) or syrup.
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Wage and Hour Division, Labor
§ 780.819
§ 780.816 Processing of specific commodities.
Only the processing of sugar beets,
sugar-beet molasses, sugarcane, or
maple sap is within the exemption. Operations performed on commodities
other than those named are not exempt
under this section even though they result in the production of unrefined
sugar or syrup. For example, sorghum
cane or refinery syrup (which is a byproduct of refined syrup) are not
named commodities and employees engaged in processing these products are
not exempt under this section even
though the resultant product is raw
sugar. The loss of exemption would obtain for the same reason for employees
engaged in processing sugar, glucose,
or ribbon cane syrup into syrup.
§ 780.817 Employees engaged in processing.
Only those employees who are engaged in the processing will come within the exemption. The processing of
sugarcane to which the exemption applies and in which the employee must
be engaged in order to come within it
is considered to begin when the processor receives the cane for processing
and to end when the cane is processed
‘‘into sugar (other than refined sugar)
or syrup.’’ Employees engaged in the
following activities of a sugarcane
processing mill are considered to be engaged in ‘‘the processing of’’ the sugarcane into the named products, within
the meaning of the exemption:
(a) Loading of the sugarcane in the
field or at a concentration point and
hauling the cane to the mill ‘‘if performed by employees of the mill.’’
(Such activities performed by employees of some other employer, such as an
independent contractor, are not considered to be within the exemption.)
(b) Weighing, unloading, and stacking the cane at the mill yard.
(c) Performing sampling tests (such
as a trash test or sucrose content test)
on the incoming cane.
(d) Washing the cane, feeding it into
the mill crushers and crushing.
(e) Operations on the extracted cane
juice in the making of raw sugar and
molasses: Juice weighing and measurement, heating, clarification, filtration,
evaporating,
crystallization,
centrifuging, and handling and storing
the raw sugar or molasses at the plant
during the grinding season.
(f) Laboratory analytical and testing
operations at any point in the processing or at the end of the process.
(g) Loading out raw sugar or molasses during the grinding season.
(h) Handling, baling, or storing bagasse during the grinding season.
(i) Firing boilers and other activities
connected with the overall operation of
the plant machinery during grinding
operations, including cleanup and
maintenance work and day-to-day repairs. (This includes shop employees,
mechanics, electricians, and employees
maintaining stocks of various items
used in repairs.)
§ 780.818 Employees not engaged in
processing.
Employees engaged in operations
which are not an integral part of processing of the named commodities will
not come within the exemption. The
following activities are not considered
exempt under section 13(b)(15):
(a) Office and general clerical work.
(b) Feeding and housing millhands
and visitors (typically this is called the
‘‘boarding house’’).
(c) Hauling raw sugar or molasses
away from the mill.
(d) Any work outside the grinding
season.
§ 780.819 Production
must
unrefined sugar or syrup.
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of
The second part of the section
13(b)(15) exemption is specifically limited to the production ‘‘of sugar (other
than refined sugar) or syrup.’’ The production of ‘‘refined sugar’’ a term
which is commonly understood to refer
to the refinement of ‘‘raw sugar’’ is expressly excluded. Thus, the exemption
does not apply to the manufacture of
sugar that is produced by melting
sugar, purifying the melted sugar solution through a carbon medium process
and the recrystallization of the sugar
from this solution. Nor does the exemption apply to the processing of cane
syrup into refined sugar or to the further processing of sugar, as for example, beet sugar into powdered or liquid
sugar.
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§ 780.900
29 CFR Ch. V (7–1–19 Edition)
Subpart J—Employment in Fruit
and Vegetable Harvest Transportation; Exemption From
Overtime Pay Requirements
Under Section 13(b)(16)
INTRODUCTORY
§ 780.900 Scope and significance of interpretative bulletin.
Subpart A of this part 780 and this
subpart J together constitute the official interpretative bulletin of the Department of Labor with respect to the
meaning and application of section
13(b)(16) of the Fair Labor Standards
Act of 1938, as amended. This section
provides exemption from the overtime
pay provisions of the Act for employees
engaging in specified transportation
activities when fruits and vegetables
are harvested. As appears more fully in
subpart A of this part, interpretations
in this bulletin with respect to the provisions of the Act discussed are official
interpretations upon which reliance
may be placed and which will guide the
Secretary of Labor and the Administrator in the performance of their duties under the Act. The general exemption provided in sections 13(a)(6) and
13(b)(12) of the Act for employees employed in agriculture, are not discussed
in this subpart except in their relation
to section 13(b)(16). The meaning and
application of these exemptions are
fully considered in subparts D and E,
respectively, of this part 780.
§ 780.901
Statutory provisions.
Section 13(b)(16) of the Act exempts
from the overtime provisions of section
7:
Any employee engaged (A) in the transportation and preparation for transportation of
fruits or vegetables, whether or not performed by the farmer, from the farm to a
place of first processing or first marketing
within the same State, or (B) in transportation, whether or not performed by the
farmer, between the farm and any point
within the same State of persons employed
or to be employed in the harvesting of fruits
or vegetables.
§ 780.902
tion.
Legislative history of exemp-
Since the language of section
13(b)(16) and its predecessor, section
13(a)(22) is identical, the legislative
history of former section 13(a)(22) still
retains its pertinency and vitality. The
former section 13(a)(22) was added to
the Act by the Fair Labor Standards
Amendments of 1961. The original provision in the House-passed bill was in
the form of an amendment to the Act’s
definition of agriculture. It would have
altered the effect of holdings of the
courts that operations such as those
described in the amendment are not
within the agriculture exemption provided by section 13(a)(6) when performed by employees of persons other
than the farmer. (Chapman v. Durkin,
214 F. 2d 360, certiorari denied 348 U.S.
897; Fort Mason Fruit Co. v. Durkin, 214
F. 2d 363, certiorari denied, 348 U.S.
897.) The amendment was offered to exempt operations which, in the sponsor’s view, were meant to be exempt
under the original Act. (See 107 Cong.
Rec. (daily ed.) p. 4523.) The Conference
Committee, in changing the provision
to make it a separate exemption made
it clear that is was ‘‘not intended by
the committee of conference to change
by this exemption (for the described
transportation employees) * * * the application of the Act to any other employees. Nor is it intended that there
be any implication of disagreement by
the conference committee with the
principles and tests governing the application of the present agricultural
exemption as enunciated by the
courts.’’ (H. Rept. No. 327, 87th Cong.,
first session, p. 18.)
§ 780.903 General scope of exemption.
The exemption provided by section
13(b)(16) is in two parts, subsection (A),
which exempts employees engaged in
the described transportation and preparation for transportation of fruits or
vegetables, and subsection (B) which
exempts employees engaged in the
specified transportation of employees
who harvest fruits or vegetables. The
transportation and preparation for
transportation of fruits and vegetables
must be from the farm to a place of
first processing or first marketing located in the same State where the farm
is located; the transportation of harvesters must be between the farm and
a place located in the same State as
the farm.
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Wage and Hour Division, Labor
§ 780.909
§ 780.904 What determines the exemption.
The application of the exemption
provided by section 13(b)(16) depends on
the nature of the employee’s work and
not on the character of the employer’s
business. An employee is not exempt in
any workweek unless his employment
in that workweek meets all the requirements for exemption. To determine whether an employee is exempt
an examination should be made of the
duties which that employee performs.
Some employees of the employer may
be exempt and others may not.
§ 780.905 Employers who may claim
exemption.
A nonfarmer, as well as a farmer,
who has an employee engaged in the
operations specified in section 13(b)(16)
may take advantage of the exemption.
Employees of contractual haulers,
packers, processors, wholesalers, ‘‘birddog’’ operators, and others may qualify
for exemption. If an employee is engaged in the specified operations, the
exemption will apply ‘‘whether or not’’
these operations are ‘‘performed by the
farmer’’ who has grown the harvested
fruits and vegetables. Where such operations are performed by the farmer, the
engagement by his employee in them
will provide a basis for exemption
under section 13(b)(16) without regard
to whether the farmer is performing
the operations as an incident to or in
conjunction with his farming operations.
EXEMPT OPERATIONS ON FRUITS OR
VEGETABLES
§ 780.906 Requisites
for
exemption
generally.
Section 13(b)(16), in clause (A), provides an exemption from the overtime
pay provision of the Act for an employee during any workweek in which
all the following conditions are satisfied:
(a) The employee must be engaged
‘‘in the transportation and preparation
for transportation of fruits and vegetables’’; and
(b) Such transportation must be
transportation ‘‘from the farm’’; and
(c) The destination to which the
fruits or vegetables are transported
must be ‘‘a place of first processing or
first marketing’’; and
(d) The transportation must be from
the farm to such destination ‘‘within
the same State’’.
§ 780.907 ‘‘Fruits or vegetables.’’
The exempt operations of preparing
for transportation and transporting
must be performed with respect to
‘‘fruits or vegetables.’’ The intent of
section 13(b)(16) is to exempt such operations on fruits or vegetables which are
‘‘just-harvested’’ and still in their raw
and natural state. As explained at the
time of adoption of the amendment on
the floor of the House, the exemption
was intended to eliminate the difference in treatment of farmers and
nonfarmers with respect to exemption
of such ‘‘handling or hauling of fruit or
vegetables in their raw or natural
state.’’ (See 107 Cong. Rec. (daily ed.) p.
4523.) Transporting and preparing for
transportation other farm products
which are not fruits or vegetables are
not exempt under section 13(b)(16). For
example, operations on livestock, eggs,
tobacco, or poultry are nonexempt.
Sugarcane is not a fruit or vegetable
for purposes of this exemption (Wirtz v.
Osceola Farms Co., 372 F. 2d 584).
§ 780.908 Relation of employee’s work
to specified transportation.
In order for the exemption to apply
to an employee, he must be engaged
‘‘in the transportation and preparation
for transportation’’ of the just-harvested fruits or vegetables from the
farm to the specified places within the
same State. Engagement in other activities is not exempt work. The employee must be actually engaged in the
described operations. The exemption is
not available for other employees of
the employer, such as office, clerical,
and maintenance workers.
§ 780.909 ‘‘Transportation.’’
‘‘Transportation,’’ as used in section
13(b)(16), refers to the movement by
any means of conveyance of fruits or
vegetables from the farm to a place of
first processing or first marketing in
the same State. It includes only those
activities which are immediately necessary to move the fruits or vegetables
to the specified points and the return
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§ 780.910
29 CFR Ch. V (7–1–19 Edition)
trips. Drivers, drivers’ helpers, loaders,
and checkers perform work which is exempt. Transportation ends with delivery at the receiving platform of the
place to which the fruits or vegetables
are transported. (Mitchell v. Budd, 350
U.S. 473.) Thus, unloading at the delivery point by employees who did not
transport the commodities would not
be a part of the transportation activities under section 13(b)(16).
§ 780.910 Engagement
in
transportation and preparation.
Since transportation and preparation
for transportation are both exempt activities, an employee who engages in
both is performing exempt work. In referring to ‘‘the transportation and
preparation for transportation’’ of the
fruits or vegetables, the statute recognizes the two activities as interrelated
parts of the single task of moving the
commodities from the farm to the designated points. Accordingly, the word
‘‘and’’ between the words ‘‘transportation’’ and ‘‘preparation’’ is not considered to require that any employee
be employed in both parts of the task
in order to be exempt. The exemption
may apply to an employee engaged either in transporting or preparing the
commodities for transportation if he
otherwise
qualifies
under
section
13(b)(16).
§ 780.911 Preparation for transportation.
The ‘‘preparation for transportation’’
of fruits or vegetables includes only
those activities which are necessary to
prepare the fruits or vegetables for
transportation from the farm to the
places described in section 13(b)(16).
These preliminary activities on the
farm will vary with the commodity involved, with the means of the transportation to be used, and with the nature
of operations to be performed on the
commodity after delivery.
§ 780.912 Exempt preparation.
The following operations, if required
in order to move the commodities from
the farm and to deliver them to a place
of first marketing or first processing,
are considered preparation for transportation: Assembling, weighing, placing the fruits or vegetables in con-
tainers such as lugs, crates, boxes or
bags, icing, marking, labeling or fastening containers, and moving the
commodities from storage or concentration areas on the farm to loading
sites.
§ 780.913
Nonexempt preparation.
(a) Retail packing. Since the exemption, as expressly stated in section
13(b)(16), includes the transportation of
the fruits or vegetables only to places
of first marketing or first processing,
packing or preparing for retail or further distribution beyond the place of
first processing or first marketing is
not exempt as ‘‘preparation for transportation.’’ (Schultz v. Durrence (D.
Ga.), 19 WH Cases 747, 63 CCH Lab. Cas.
secs. 32, 387.)
(b) Preparation for market. No exemption is provided under section 13(b)(16)
for operations performed on the farm
in preparation for market (such as ripening, cleaning, grading, or sorting)
rather than in preparation for the
transportation described in the section.
Exemption, if any, for these activities
should be considered under sections
13(a)(6) and 13(b)(12). (See subparts D
and E of this part 780.)
(c) Processing or canning. Processing
is not exempt preparation for transportation. Thus, the canning of fruits or
vegetables is not under section
13(b)(16).
§ 780.914
‘‘From the farm.’’
The exemption applies only to employees whose work relates to transportation of fruits or vegetables ‘‘from
the farm.’’ The phrase ‘‘from the farm’’
makes it clear that the preparation of
the fruits or vegetables should be performed on the farm and that the first
movement of the commodities should
commence at the farm. A ‘‘farm’’ has
been interpreted under the Act to mean
a tract of land devoted to one or more
of the primary branches of farming
outlined in the definition of ‘‘agriculture’’ in section 3(f) of the Act.
These expressly include the cultivation
and tillage of the soil and the growing
and harvesting of any agricultural or
horticultural commodities.
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Wage and Hour Division, Labor
§ 780.915
§ 780.918
‘‘Place of first processing.’’
Under section 13(b)(16) the fruits or
vegetables may be transported to only
two types of places. One is a ‘‘place of
first processing’’, which includes any
place where canning, freezing, drying,
preserving, or other operations which
first change the form of the fresh fruits
or vegetables from their raw and natural state are performed. (For overtime
exemption applicable to ‘‘first processing,’’ see part 526 of this chapter.) A
plant which grades and packs only is
not a place of first processing (Walling
v. DeSoto Creamery and Produce Co., 51
F. Supp. 938). However, a packer’s plant
may qualify as a place of first marketing. (See § 780.916.)
§ 780.916 ‘‘Place
keting.’’
of
* * *
first
mar-
A ‘‘place of * * * first marketing’’ is
the second of the two types of places to
which the freshly harvested fruits or
vegetables may be transported from
the farm under the exemption provided
by section 13(b)(16). Typically, a place
of first marketing is a farmer’s market
of the kind to which ‘‘delivery to market’’ is made within the meaning of
section 3(f) of the Act when a farmer
delivers such commodities there as an
incident to or in conjunction with his
own farming operations. Under section
13(b)(16), of course, there is no requirement that the transportation be performed by or for a farmer or as an incident to or in conjunction with any
farming operations. A place of first
marketing may be described in general
terms as a place at which the freshly
harvested fruits or vegetables brought
from the farm are first delivered for
marketing, such as a packing plant or
an establishment of a wholesaler or
other distributor, cooperative marketing agency, or processor to which
the fruits or vegetables are first
brought from the farm and delivered
for sale. A place of first marketing may
also be a place of first processing (see
Mitchell v. Budd, 350 U.S. 473) but it
need not be. The ‘‘first place of packing’’ to which the just-harvested fruits
or vegetables are transported from the
farm is intended to be included. (See
107 Cong. Rec. (daily ed.) p. 4523.)
Transportation to places which are not
first processing or first
places is not exempt.
§ 780.917
marketing
‘‘Within the same State.’’
To qualify for exemption under section 13(b)(16), the transportation of the
fruits or vegetables must be made to
the specified places ‘‘within the same
State’’ in which the farm is located.
Transportation is made to a place
‘‘within the same State’’ when the
commodities are taken from the farm,
hauled and delivered within the same
State to first markets or first processors for sale or processing at the
place of delivery. The exemption is not
provided for transportation to any
place of first marketing or first processing across State lines and does not
apply to any part of the transportation
within the State of fruits or vegetables
destined for a place in another State at
which they are to be first marketed or
first processed. Transportation from
the farm to an intermediate point in
such a journey located within the same
State would not qualify for exemption;
it would make no difference that the
intermediate point is a place of first
marketing or first processing for other
fruits or vegetables if it is not actually
such for the fruits or vegetables being
transported. On the other hand, where
the place to which fruits or vegetables
are transported from the farm within
the same State is actually the place of
first marketing or first processing of
those very commodities, transportation of the goods across State lines
by the first-market operator or first
processor, after such delivery to him
within the State, does not affect the
nature of the delivery to him as one
made within the State.
EXEMPT TRANSPORTATION OF FRUIT OR
VEGETABLE HARVEST EMPLOYEES
§ 780.918 Requisites
generally.
for
exemption
Section 13(b)(16), in clause (B), provides an exemption from the minimum
wage and overtime pay provisions of
the Act for an employee during any
workweek in which all the following
conditions are satisfied:
(a) The employee must be engaged
‘‘in transportation’’ of harvest workers; and
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§ 780.919
29 CFR Ch. V (7–1–19 Edition)
(b) The harvest workers transported
must be ‘‘persons employed or to be
employed in the harvesting of fruits or
vegetables’’; and
(c) The employee’s transportation of
such harvest workers must be ‘‘between the farm and any point within
the same State.’’
§ 780.919 Engagement ‘‘in transportation’’ of harvest workers.
In order for the exemption to apply,
the employees must be engaged ‘‘in
transportation’’ of the specified harvest workers between the points stated
in the statute. Actual engagement ‘‘in
transportation’’ of such workers is required. Engagement in other activities
is not exempt work. Drivers, driver’s
helpers, and others who are engaged in
the actual movement of the persons
transported may qualify for the exemption. Office employees, garage mechanics, and other employees of the employer who may perform supporting activities but do not engage in the actual
transportation work do not come within the exemption. There is no restriction in the statute as to the means of
conveyance used; the exempt transportation may be by land, air, or water in
any vehicle or conveyance appropriate
for the purpose. Employees of any employer who are engaged in the specified
transportation activities may qualify
for exemption; it is not necessary that
the transportation be performed by the
farmer. (See § 780.905.)
§ 780.920 Workers transported must be
fruit or vegetable harvest workers.
Clause (B) of section 13(b)(16) exempts only those transportation employees who are engaged in transportation ‘‘of persons employed or to be
employed in the harvesting of fruits or
vegetables.’’ Transportation of harvest
workers is not exempt unless the workers are fruit and vegetable harvest
workers; transportation of workers employed or to be employed in harvesting
or other commodities is not exempt
work under section 13(b)(16). Wirtz v.
Osceola Farms Co., 372 F. (2d) 584 (C.A.
5). Nor does the exemption apply to the
transportation of persons for the purpose of planting or cultivating any
crop, whether or not it is a fruit or a
vegetable crop.
§ 780.921 Persons ‘‘employed or to be
employed’’ in fruit or vegetable harvesting.
The exemption applies to the transportation of persons ‘‘employed or to
be employed’’ in the harvesting of
fruits or vegetables. Included in this
phrase are persons who at the time of
transportation are currently employed
in harvesting fruits or vegetables and
others who, regardless of their occupation at such time, are being transported to be employed in such harvesting. The conveying of persons to a
farm from a factory, packinghouse or
processing plant would be exempt
where their transportation is for the
purpose of their employment in harvesting the named commodities. On the
other hand, the transportation of harvest workers, who have been employed
in the fruit or vegetable harvest, to
such a plant for the purpose of their
employment in the plant would not be
exempt. The transportation must come
within the intended scope of section
13(b)(16) which is to provide exemption
for ‘‘transportation of the harvest crew
to and from the farm’’ (see 107 Cong.
Rec. daily ed. p. 4523).
§ 780.922 ‘‘Harvesting’’
vegetables.
of
fruits
Only transportation of employees
employed or to be employed in the
‘‘harvesting’’ of fruits or vegetables is
exempt under clause (B) of section
13(b)(16). As indicated in § 780.920, such
harvest workers do not include employees employed or to be employed in
planting or cultivating the crop. Nor
do they include employees employed or
to be employed in operations subsequent to harvesting, even where such
operations constitute ‘‘agriculture’’
within the definition in section 3(f) of
the Act. ‘‘Harvesting’’ refers to the removal of fruits or vegetables from
their growing position in the fields,
and as explained in § 780.118 of this
part, includes the operations customarily performed in connection with this
severance of the crops from the soil
(see Vives v. Serralles, 145 F. 2d 552), but
does not extend to operations subsequent to and unconnected with the actual severance process or to operations
performed off the farm. It may include
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Wage and Hour Division, Labor
§ 780.1001
moving the fruits or vegetables to concentration points on the farm, but
would not include packingshed or other
operations performed in preparation
for market rather than as part of harvesting, such as ripening, cleaning,
grading, sorting, drying, and storing. If
the workers are employed or to be employed in ‘‘harvesting’’, it does not
matter for purposes of the exemption
whether a farmer or someone else employs them or does the harvesting. It is
the character of their employment as
‘‘harvesting’’ and not the identity of
their employer or the owner of the crop
which determines whether their transportation to and from the farm will
provide a basis for exemption of the
transportation of employees.
§ 780.923 ‘‘Between the farm and any
point within the same State.’’
The transportation of fruit or vegetable harvest workers is permitted
‘‘between the farm and any point within the same State’’. The exempt transportation of such harvest workers
therefore includes their movement to
and from the farm (see 107 Cong. Rec.
(daily ed.) p. 4523). Such transportation
must, however, be from or to points
‘‘within the same State’’ in which the
farm is located. Crossing of State lines
is not contemplated. Thus, the exemption would not apply to day-haul transportation of fruit or vegetable harvest
workers between a town in one State
and farms located in another State.
Also, the intent to exempt ‘‘transportation of the harvest crew to and from
the farm’’ (see 107 Cong. Rec. (daily ed.)
p. 4523) within a single State would not
justify exemption of the transportation
of workers from one State to another
to engage in harvest work in the latter
State. The exemption does not apply to
transportation of persons on any trip,
or any portion of a trip, in which the
point of origin or point of destination
is in another State. Subject to these
limitations, however, where employees
are being transported for employment
in harvesting they may be picked up in
any place within the State, including
other farms, packing or processing establishments, factories, transportation
terminals, and other places. The broad
term ‘‘any point’’ must be interpreted
in the light of the purpose of the ex-
emption to facilitate the harvesting of
fruits or vegetables. Transportation
from a farm to ‘‘any point’’ within the
same State (such as a factory or processing plant) where some other purpose
than harvesting is served is not exempt.
Subpart K—Employment of Homeworkers in Making Wreaths;
Exemption From Minimum
Wage, Overtime Compensation, and Child Labor Provisions Under Section 13(d)
INTRODUCTORY
§ 780.1000 Scope and significance of interpretative bulletin.
Subpart A of this part 780 and this
subpart K together constitute the official interpretative bulletin of the Department of Labor with respect to the
meaning and application of section
13(d) of the Fair Labor Standards Act
of 1938, as amended. This section provides an exemption from the minimum
wage, overtime pay, and child labor
provisions of the Act for certain
homeworkers employed in making
wreaths from evergreens and in harvesting evergreens and other forest
products for use in making wreaths.
Attention is directed to the fact that a
limited overtime exemption for employees employed in the decoration
greens industry is provided under section 7(c) of the Act (see part 526 of this
chapter). The section 7(c) exemption is
not limited to homeworkers.
§ 780.1001
ment.
General explanatory state-
Workers in rural areas sometimes engage, as a family unit, around the
Christmas holidays, in gathering evergreens and making them into wreaths
in their homes. Such workers, under
well-settled interpretations by the Department of Labor and the courts, have
been held to be employees of the firm
which purchases the wreaths and furnishes the workers with wire used in
making such wreaths.
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§ 780.1002
29 CFR Ch. V (7–1–19 Edition)
REQUIREMENTS FOR EXEMPTION
§ 780.1002 Statutory requirements.
Section 13(d) of the Fair Labor
Standards Act exempts from the minimum wage provisions of section 6, the
overtime requirements of section 7 and
the child labor restrictions of section
12:
Any homeworker engaged in the making of
wreaths composed principally of natural
holly, pine, cedar, or other evergreens (including the harvesting of the evergreens or
other forest products used in making such
wreaths).
§ 780.1003 What determines the application of the exemption.
The application of this exemption depends on the nature of the employee’s
work and not on the character of the
employer’s business. To determine
whether an employee is exempt an examination should be made of the activities which that employee performs
and the conditions under which he performs them. Some employees of the
employer may be exempt and others
may not.
§ 780.1004 General requirements.
The general requirements of the exemption are that:
(a) The employee must be a
homeworker;
(b) The employee must be engaged in
making wreaths as a homeworker;
(c) The wreaths must be made principally of evergreens;
(d) Any harvesting of the evergreens
and other forest products by the
homeworkers must be for use in making the wreaths by homeworkers.
§ 780.1005 Homeworkers.
The exemption applies to ‘‘any
homeworker.’’ A homeworker within
the meaning of the Act is a person who
works for an employer in or about a
home, apartment, tenement, or room
in a residential establishment.
§ 780.1006 In or about a home.
Whether the work of an employee is
being performed ‘‘in or about a home,’’
so that he may be considered a
homeworker, must be determined on
the facts in the particular case. In general, however the phrase ‘‘in or about a
home’’ includes any home, apartment,
or other dwelling place and surrounding premises, such yards, garages, sheds or basements. A convent,
orphanage or similar institution is considered a home.
§ 780.1007 Exemption is inapplicable if
wreath-making is not in or about a
home.
The section 13(d) exemption does not
apply when the wreaths are made in or
about a place which is not considered a
‘‘home’’. Careful consideration is required in many cases to determine
whether work is being performed in or
about a home. Thus, the circumstances
under which an employee may engage
in work in what ostensibly is a ‘‘home’’
may require the conclusion, on an examination of all the facts, that the
work is not being performed in or
about a home within the intent of the
term and for purposes of section 13(d)
of the Act.
§ 780.1008 Examples of places not considered homes.
The following are examples of workplaces which, on examination, have
been considered not to be a ‘‘home’’:
(a) Living quarters allocated to and
regularly used solely for production
purposes, where workers work regular
schedules and are under constant supervision by the employer, are not considered to be a home.
(b) While a convent, orphanage or
similar institution is considered a
home, an area in such place which is
set aside for and used for sewing or
other productive work under supervision is not a home.
(c) Where an employee performs work
on wreaths in a home and also engages
in work on the wreaths for the employer during that workweek in a factory, he is not exempt in that week,
since some of his work is not performed
in a home.
§ 780.1009
Wreaths.
The only product which may be produced under the section 13(d) exemption by a homeworker is a wreath having no less than the specified evergreen
content. The making of a product other
than a wreath is nonexempt even
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§ 780.1016
though it is made principally of evergreens.
§ 780.1010 Principally.
The exemption is intended to apply
to the making of an evergreen wreath.
Such a wreath is one made ‘‘principally’’ of evergreens. Principally
means chiefly, in the main or mainly
(Hartford Accident and Indemnity Co. v.
Casualty Underwriters Insurance Co., 130
F. Supp. 56). A wreath is made ‘‘principally’’ of evergreens when it is comprised mostly of evergreens. For example, where a wreath is composed of evergreens and other kinds of material,
the evergreens should comprise a
greater part of the wreath than all the
other materials together, including
materials such as frames, stands, and
wires. The principal portion of a
wreath may consist of any one or any
combination of the evergreens listed in
section 13(d), including ‘‘other evergreens.’’ The making of wreaths in
which natural evergreens are a secondary component is not exempt.
§ 780.1011 Evergreens.
The material which must principally
be used in making the wreaths is listed
as ‘‘natural holly, pine, cedar, or other
evergreens.’’ Other plants or materials
cannot be used to satisfy this requirement.
§ 780.1012 Other evergreens.
The ‘‘other evergreens’’ of which the
wreath may be principally made include any plant which retains its
greenness through all the seasons of
the year, such as laurel, ivy, yew, fir,
and others. While plants other than evergreens may be used in making the
wreaths, such plants, whether they are
forest products cultivated plants, cannot be considered as part of the required principal evergreen component
of the wreath.
§ 780.1013 Natural evergreens.
Only ‘‘natural’’ evergreens may comprise the principal part of the wreath.
The word ‘‘natural’’ qualifies all of the
evergreens listed in the section, including ‘‘other evergreens.’’ The term natural means that the evergreens at the
time they are being used in making a
wreath must be in the raw and natural
state in which they have been harvested. Artificial evergreens (Herring
Magic v. U.S., 258 F. 2d 197; Cal. Casualty Indemnity Exchange v. Industrial
Accident Commission of Cal. 90 P. 2d 289)
or evergreens which have been processed as by drying and spraying with
tinsel or by other means are not included. It is immaterial whether the
natural evergreen used in making a
wreath has been cultivated or is a product of the woods or forest.
§ 780.1014
Harvesting.
The homeworker is permitted to harvest evergreens and other forest products to be used in making the wreath.
The word harvesting means the removal
of evergreens and other forest products
from their growing positions in the
woods or forest, including transportation of the harvested products to the
home of the homeworker and the performance of other duties necessary for
such harvesting.
§ 780.1015
Other forest products.
The homeworker may also harvest
‘‘other forest products’’ for use in making wreaths. The term other forest products means any plant of the forest and
includes, of course, deciduous plants as
well.
§ 780.1016 Use of evergreens and forest
products.
Harvesting of evergreens and other
forest products is exempt only when
these products will be ‘‘used in making
such wreaths.’’ The phrase ‘‘used in
making such wreaths’’ places a definite
limitation on the purpose for which evergreens may be harvested under section 13(d). Harvesting of these materials for a use other than making
wreaths is nonexempt. Also, such harvesting is nonexempt when the evergreens are used for wreathmaking by
persons other than the homeworkers
(see Mitchell v. Hunt, 263 F. 2d 913). For
example, harvesting of evergreens for
sale or distribution to an employer who
uses them in his factory to make
wreaths is not exempt.
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Pt. 782
29 CFR Ch. V (7–1–19 Edition)
PART
782—EXEMPTION
FROM
MAXIMUM HOURS PROVISIONS
FOR CERTAIN EMPLOYEES OF
MOTOR CARRIERS
Sec.
782.0 Introductory statement.
782.1 Statutory provisions considered.
782.2 Requirements for exemption in general.
782.3 Drivers.
782.4 Drivers’ helpers.
782.5 Loaders.
782.6 Mechanics.
782.7 Interstate commerce requirements of
exemption.
782.8 Special classes of carriers.
AUTHORITY: 52 Stat. 1060, as amended; 29
U.S.C. 201 et seq.
SOURCE: 36 FR 21778, Nov. 13, 1971, unless
otherwise noted.
§ 782.0 Introductory statement.
(a) Since the enactment of the Fair
Labor Standards Act of 1938, the views
of the Administrator of the Wage and
Hour Division as to the scope and applicability of the exemption provided
by section 13(b)(1) of the act have been
expressed in interpretations issued
from time to time in various forms.
This part, as of the date of its publication in the FEDERAL REGISTER, supersedes and replaces such prior interpretations. Its purpose is to make available in one place general interpretations of the Administrator which will
provide ‘‘a practical guide to employers and employees as to how the office
representing the public interest in enforcement of the law will seek to apply
it.’’ (Skidmore v. Swift & Co., 323 U.S.
134)
(b) The interpretations contained in
this part indicate, with respect to the
scope and applicability of the exemption provided by section 13(b)(1) of the
Fair Labor Standards Act, the construction of the law which the Secretary of Labor and the Administrator
believe to be correct in the light of the
decisions of the courts, the Interstate
Commerce Commission, and since October 15, 1966, its successor, the Secretary of Transportation, and which
will guide them in the performance of
their administrative duties under the
act unless and until they are otherwise
directed by authoritative decisions of
the courts or conclude upon reexamination of an interpretation that it is incorrect.
(c) Public Law 89–670 (80 Stat. 931)
transferred to and vested in the Secretary of Transportation all functions,
powers, and duties of the Interstate
Commerce Commission: (1) Under section 204 (a)(1) and (a)(2) to the extent
they relate to qualifications and maximum hours of service of employees
and safety of operations and equipment, and (2) under section 204(a)(5) of
the Motor Carrier Act. The interpretations contained in this part are interpretations on which reliance may be
placed as provided in section 10 of the
Portal-to-Portal Act (Pub. L. 49, 80th
Cong., first sess. (61 Stat. 84), discussed
in part 790, statement on effect of Portal-to-Portal Act of 1947), so long as
they remain effective and are not
modified, amended, rescinded, or determined by judicial authority to be incorrect.
§ 782.1 Statutory
ered.
provisions
(a) Section 13(b)(1) of the Fair Labor
Standards Act provides an exemption
from the maximum hours and overtime
requirements of section 7 of the act,
but not from the minimum wage requirements of section 6. The exemption
is applicable to any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act of
1935, (part II of the Interstate Commerce Act, 49 Stat. 546, as amended; 49
U.S.C. 304, as amended by Pub. L. 89–
670, section 8e which substituted ‘‘Secretary of Transportation’’ for ‘‘Interstate Commerce Commission’’—Oct. 15,
1966) except that the exemption is not
applicable to any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service solely by virtue of section 204(a)(3a)
of part II of the Interstate Commerce
Act. (Pub. L. 939, 84th Cong., second
sess., Aug. 3, 1956, secs. 2 and 3) The
Fair Labor Standards Act confers no
authority on the Secretary of Labor or
the Administrator to extend or restrict
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§ 782.2
the scope of this exemption. It is settled by decisions of the U.S. Supreme
Court that the applicability of the exemption to an employee otherwise entitled to the benefits of the Fair Labor
Standards Act is determined exclusively by the existence of the power
conferred under section 204 of the
Motor Carrier Act to establish qualifications and maximum hours of service with respect to him. It is not material whether such qualifications and
maximum hours of service have actually been established by the Secretary
of Transportation; the controlling consideration is whether the employee
comes within his power to do so. The
exemption is not operative in the absence of such power, but an employee
with respect to whom the Secretary of
Transportation has such power is excluded, automatically, from the benefits of section 7 of the Fair Labor
Standards Act. (Southland Gasoline Co.
v. Bayley, 319 U.S. 44; Boutell v. Walling,
327 U.S. 463; Levinson v. Spector Motor
Service, 330 U.S. 649; Pyramid Motor
Freight Corp. v. Ispass, 330 U.S. 695; Morris v. McComb, 332 U.S. 422)
(b) Section 204 of the Motor Carrier
Act, 1935, provides that it shall be the
duty of the Interstate Commerce Commission (now that of the Secretary of
Transportation (see § 782.0(c))) to regulate common and contract carriers by
motor vehicle as provided in that act,
and that ‘‘to that end the Commission
may establish reasonable requirements
with respect to * * * qualifications and
maximum hours of service of employees, and safety of operation and equipment.’’ (Motor Carrier Act, sec.
204(a)(1)(2), 49 U.S.C. 304(a)(1)(2)) Section 204 further provides for the establishing of similar regulations with respect to private carriers of property by
motor vehicle, if need therefor is
found.
(Motor
Carrier
Act,
sec.
204(a)(3), 49 U.S.C. 304(a)(3))
(c) Other provisions of the Motor Carrier Act which have a bearing on the
scope of section 204 include those which
define common and contract carriers
by motor vehicle, motor carriers, private carriers of property by motor vehicle (Motor Carrier Act, sec. 203(a)
(14), (15), (16), (17), 49 U.S.C. sec. 303(a)
(14), (15), (16), (17)) and motor vehicle
(Motor Carrier Act, sec. 203(a)(13));
those which confer regulatory powers
with respect to the transportation of
passengers or property by motor carriers engaged in interstate or foreign
commerce (Motor Carrier Act, sec.
202(a)), as defined in the Motor Carrier
Act, sec. 203(a) (10), (11), and reserve to
each State the exclusive exercise of the
power of regulation of intrastate commerce by motor carriers on its highways (Motor Carrier Act, sec. 202(b));
and those which expressly make section 204 applicable to certain transportation in interstate or foreign commerce which is in other respects excluded from regulation under the act.
(Motor Carrier Act, sec. 202(c))
§ 782.2 Requirements for exemption in
general.
(a) The exemption of an employee
from the hours provisions of the Fair
Labor Standards Act under section
13(b)(1) depends both on the class to
which his employer belongs and on the
class of work involved in the employee’s job. The power of the Secretary of
Transportation to establish maximum
hours and qualifications of service of
employees, on which exemption depends, extends to those classes of employees and those only who: (1) Are employed by carriers whose transportation of passengers or property by
motor vehicle is subject to his jurisdiction under section 204 of the Motor
Carrier Act (Boutell v. Walling, 327 U.S.
463; Walling v. Casale, 51 F. Supp. 520;
and see Ex parte Nos. MC–2 and MC–3,
in the Matter of Maximum Hours of
Service of Motor Carrier Employees, 28
M.C.C. 125, 132), and (2) engage in activities of a character directly affecting the safety of operation of motor vehicles in the transportation on the public highways of passengers or property
in interstate or foreign commerce
within the meaning of the Motor Carrier Act. United States v. American
Trucking Assns., 310 U.S. 534; Levinson v.
Spector Motor Service, 330 U.S. 649; Ex
parte No. MC–28, 13 M.C.C. 481; Ex parte
Nos. MC–2 and MC–3, 28 M.C.C. 125;
Walling v. Comet Carriers, 151 F. (2d) 107
(C.A. 2).
(b)(1) The carriers whose transportation activities are subject to the Secretary of Transportation jurisdiction
are specified in the Motor Carrier Act
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§ 782.2
29 CFR Ch. V (7–1–19 Edition)
itself (see § 782.1). His jurisdiction over
private carriers is limited by the statute to private carriers of property by
motor vehicle, as defined therein, while
his jurisdiction extends to common and
contract carriers of both passengers
and property. See also the discussion of
special classes of carriers in § 782.8. And
see paragraph (d) of this section. The
U.S. Supreme Court has accepted the
Agency determination, that activities
of this character are included in the
kinds of work which has been defined
as the work of drivers, driver’s helpers,
loaders, and mechanics (see §§ 782.3 to
782.6) employed by such carriers, and
that no other classes of employees employed by such carriers perform duties
directly affecting such ‘‘safety of operation.’’ Ex parte No. MC–2, 11 M.C.C.
203; Ex parte No. MC–28, 13 M.C.C. 481;
Ex parte No. MC–3, 23 M.C.C. 1; Ex
parte Nos. MC–2 and MC–3, 28 M.C.C.
125; Levinson v. Spector Motor Service,
330 U.S. 649; Pyramid Motor Freight
Corp. v. Ispass, 330 U.S. 695; Southland
Gasoline Co. v. Bayley, 319 U.S. 44. See
also paragraph (d) of this section and
§§ 782.3 through 782.8.
(2) The exemption is applicable,
under decisions of the U.S. Supreme
Court, to those employees and those
only whose work involves engagement
in activities consisting wholly or in
part of a class of work which is defined:
(i) As that of a driver, driver’s helper,
loader, or mechanic, and (ii) as directly
affecting the safety of operation of
motor vehicles on the public highways
in transportation in interstate or foreign commerce within the meaning of
the Motor Carrier Act. Pyramid Motor
Freight Corp. v. Ispass, 330 U.S. 695;
Levinson v. Spector Motor Service, 330
U.S. 649; Morris v. McComb, 332 U.S. 442.
Although the Supreme Court recognized that the special knowledge and
experience required to determine what
classifications of work affects safety of
operation of interstate motor carriers
was applied by the Commission, it has
made it clear that the determination
whether or not an individual employee
is within any such classification is to
be determined by judicial process.
(Pyramid Motor Freight Corp. v. Ispass,
330 U.S. 695; Cf. Missel v. Overnight
Motor Transp., 40 F. Supp. 174 (D. Md.),
reversed on other grounds 126 F. (2d) 98
(C.A. 4), affirmed 316 U.S. 572; West v.
Smoky Mountains Stages, 40 F. Supp. 296
(N.D. Ga.); Magann v. Long’s Baggage
Transfer Co., 39 F. Supp. 742 (W.D. Va.);
Walling v. Burlington Transp. Co. (D.
Nebr.), 5 W.H. Cases 172, 9 Labor Cases
par. 62,576; Hager v. Brinks, Inc., 6 W.H.
Cases 262 (N.D. Ill.)) In determining
whether an employee falls within such
an exempt category, neither the name
given to his position nor that given to
the work that he does is controlling
(Pyramid Motor Freight Corp. v. Ispass,
330 U.S. 695; Porter v. Poindexter, 158
F.—(2d) 759 (C.A. 10); Keeling v. Huber &
Huber Motor Express, 57 F. Supp. 617
(W.D. Ky.); Crean v. Moran Transp.
Lines (W.D. N.Y.) 9 Labor Cases, par.
62,416 (see also earlier opinion in 54 F.
Supp. 765)); what is controlling is the
character of the activities involved in
the performance of his job.
(3) As a general rule, if the bona fide
duties of the job performed by the employee are in fact such that he is (or, in
the case of a member of a group of drivers, driver’s helpers, loaders, or mechanics employed by a common carrier
and engaged in safety-affecting occupations, that he is likely to be) called
upon in the ordinary course of his work
to perform, either regularly or from
time to time, safety-affecting activities of the character described in paragraph (b)(2) of this section, he comes
within the exemption in all workweeks
when he is employed at such job. This
general rule assumes that the activities involved in the continuing duties
of the job in all such workweeks will
include activities which have been determined to affect directly the safety
of operation of motor vehicles on the
public highways in transportation in
interstate commerce. Where this is the
case, the rule applies regardless of the
proportion of the employee’s time or of
his activities which is actually devoted
to such safety-affecting work in the
particular workweek, and the exemption will be applicable even in a workweek when the employee happens to
perform no work directly affecting
‘‘safety of operation.’’ On the other
hand, where the continuing duties of
the employee’s job have no substantial
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§ 782.2
direct effect on such safety of operation or where such safety-affecting activities are so trivial, casual, and insignificant as to be de minimis, the exemption will not apply to him in any
workweek so long as there is no change
in his duties. (Pyramid Motor Freight
Corp. v. Ispass, 330 U.S. 695; Morris v.
McComb, 332 U.S. 422; Levinson v.
Spector Motor Service, 330 U.S. 649; Rogers Cartage Co. v. Reynolds, 166 F. (2d)
317 (C.A. 6); Opelika Bottling Co. v. Goldberg, 299 F. (2d) 37 (C.A. 5); Tobin v.
Mason & Dixon Lines, Inc., 102 F. Supp.
466 (E.D. Tenn.)) If in particular workweeks other duties are assigned to him
which result, in those workweeks, in
his performance of activities directly
affecting the safety of operation of
motor vehicles in interstate commerce
on the public highways, the exemption
will be applicable to him those workweeks, but not in the workweeks when
he continues to perform the duties of
the non-safety-affecting job.
(4) Where the same employee of a
carrier is shifted from one job to another periodically or on occasion, the
application of the exemption to him in
a particular workweek is tested by application of the above principles to the
job or jobs in which he is employed in
that workweek. Similarly, in the case
of an employee of a private carrier
whose job does not require him to engage regularly in exempt safety-affecting activities described in paragraph
(b)(1) of this section and whose engagement in such activities occurs sporadically or occasionally as the result of
his work assignments at a particular
time, the exemption will apply to him
only in those workweeks when he engages in such activities. Also, because
the jurisdiction of the Secretary of
Transportation over private carriers is
limited to carriers of property (see
paragraph (b)(1) of this section) a driver, driver’s helper, loader, or mechanic
employed by a private carrier is not
within the exemption in any workweek
when his safety-affecting activities relate only to the transporation of passengers and not to the transportation
of property.
(c) The application of these principles may be illustrated as follows:
(1) In a situation considered by the
U.S. Supreme Court, approximately 4
percent of the total trips made by drivers employed by a common carrier by
motor vehicle involved in the hauling
of interstate freight. Since it appeared
that employer, as a common carrier,
was obligated to take such business,
and that any driver might be called
upon at any time to perform such
work, which was indiscriminately distributed among the drivers, the Court
considered that such trips were a natural, integral, and apparently inseparable part of the common carrier service performed by the employer and
driver employees. Under these circumstances, the Court concluded that
such work, which directly affected the
safety of operation of the vehicles in
interstate commerce, brought the entire classification of drivers employed
by the carrier under the power of the
Interstate Commerce Commission to
establish qualifications and maximum
hours of service, so that all were exempt even though the interstate driving on particular employees was sporadic and occasional, and in practice
some drivers would not be called upon
for long periods to perform any such
work. (Morris v. McComb, 332 U.S. 422)
(2) In another situation, the U.S.
Court of Appeals (Seventh Circuit) held
that the exemption would not apply to
truckdrivers employed by a private
carrier on interstate routes who engaged in no safety-affecting activities
of the character described above even
though other drivers of the carrier on
interstate routes were subject to the
jurisdiction of the Motor Carrier Act.
The court reaffirmed the principle that
the exemption depends not only upon
the class to which the employer belongs but also the activities of the individual employee. (Goldberg v. Faber Industries, 291 F. (2d) 232)
(d) The limitations, mentioned in
paragraph (a) of this section, on the
regulatory power of the Secretary of
Transportation (as successor to the
Interstate
Commerce
Commission)
under section 204 of the Motor Carrier
Act are also limitations on the scope of
the exemption. Thus, the exemption
does not apply to employees of carriers
who are not carriers subject to his jurisdiction, or to employees of noncarriers such as commercial garages,
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§ 782.2
29 CFR Ch. V (7–1–19 Edition)
firms engaged in the business of maintaining and repairing motor vehicles
owned and operated by carriers, firms
engaged in the leasing and renting of
motor vehicles to carriers and in keeping such vehicles in condition for service pursuant to the lease or rental
agreements. (Boutell v. Walling, 327 U.S.
463; Walling v. Casale, 51 F. Supp. 520).
Similarly, the exemption does not
apply to an employee whose job does
not involve engagement in any activities which have been defined as those
of drivers, drivers’ helpers, loaders, or
mechanics, and as directly affecting
the ‘‘safety of operation’’ of motor vehicles. (Pyramid Motor Freight Corp. v.
Ispass, 330 U.S. 695; Levinson v. Spector
Motor Service, 330 U.S. 649; United States
v. American Trucking Assn., 310 U.S. 534;
Gordon’s Transports v. Walling, 162 F.
(2d) 203 (C.A. 6); Porter v. Poindexter, 158
F. (2d) 759 (C.A. 10)) Except insofar as
the Commission has found that the activities of drivers, drivers’ helpers,
loaders, and mechanics, as defined by
it, directly affect such ‘‘safety of operation,’’ it has disclaimed its power to
establish qualifications of maximum
hours of service under section 204 of
the Motor Carrier Act. (Pyramid Motor
Freight Corp. v. Ispass, 330 U.S. 695)
Safety of operation as used in section 204
of the Motor Carrier Act means ‘‘the
safety of operation of motor vehicles in
the transportation of passengers or
property in interstate or foreign commerce, and that alone.’’ (Ex parte Nos.
MC–2 and MC–3 (Conclusions of Law
No. 1), 28 M.C.C. 125, 139) Thus the activities of drivers, drivers’ helpers,
loaders, or mechanics in connection
with transportation which is not in
interstate of foreign commerce within
the meaning of the Motor Carrier Act
provide no basis for exemption under
section 13(b)(1) of the Fair Labor
Standards Act. (Walling, v. Comet Carriers, 151 F. (2d) 107 (C.C.A. 2); Hansen v.
Salinas Valley Ice Co. (Cal. App.) 144 P.
(2d) 896; Reynolds v. Rogers Cartage Co.,
71 F. Supp. 870 (W.D. Ky.), reversed on
other grounds, 166 F. (d) 317 (C.A. 6);
Earle v. Brinks, Inc., 54 F. Supp. 676
(S.D. N.Y.); Walling v. Villaume Box &
Lumber Co., 58 F. Supp. 150 (D. Minn.);
Hager v. Brinks, Inc., 11 Labor Cases,
par. 63,296 (N.D. Ill.), 6 W.H. Cases 262;
Walling v. DeSoto Creamery & Produce
Co., 51 F. Supp. 938 (D. Minn.); Dallum
v. Farmers Cooperative Trucking Assn., 46
F. Supp. 785 (D. Minn.); McLendon v.
Bewely Mills (N.D. Tex.); 3 Labor Cases,
par. 60,247, 1 W.H. Cases 934; Gibson v.
Glasgow (Tenn. Sup. Ct.), 157 S.W. (2d)
814; cf. Morris v. McComb, 332 U.S. 422.
See also § 782.1 and §§ 782.7 through
782.8.)
(e) The jurisdiction of the Secretary
of Transportation under section 204 of
the Motor Carrier Act relates to safety
of operation of motor vehicles only,
and ‘‘to the safety of operation of such
vehicles on the highways of the country, and that alone.’’ (Ex parte Nos.
MC–2 and MC–3, 28 M.C.C. 125, 192. See
also United States v. American Trucking
Assns., 319 U.S. 534, 548.) Accordingly,
the exemption does not extend to employees merely because they engage in
activities affecting the safety of operation of motor vehicles operated on
private premises. Nor does it extend to
employees engaged solely in such activities as operating freight and passenger elevators in the carrier’s terminals of moving freight or baggage
therein or the docks or streets by hand
trucks, which activities have no connection with the actual operation of
motor vehicles. (Gordon’s Transport v.
Walling, 162 F. (2d) 203 (C.A. 6),
certorari denied 322 U.S. 774; Walling v.
Comet Carriers, 57 F. Supp. 1018, affirmed, 151 F. (2d) 107 (C.A. 2), certiorari dismissed, 382 U.S. 819; Gibson v.
Glasgow (Tenn. Sup. Ct.), 157 S.W. (2d)
814; Ex parte Nos. MC–2 and MC–3, 28
M.C.C. 125, 128. See also Pyramid Motor
Freight Corp. v. Ispass, 330 U.S. 695;
Levinson v. Spector Motor Serv., 330 U.S.
949.)
(f) Certain classes of employees who
are not within the definitions of drivers, driver’s helpers, loaders, and mechanics are mentioned in §§ 782.3–782.6,
inclusive. Others who do not come
within these definitions include the
following, whose duties are considered
to affect safety of operation, if at all,
only indirectly; stenographers (including those who write letters relating to
safety or prepare accident reports);
clerks of all classes (including rate
clerks, billing clerks, clerks engaged in
preparing schedules, and filing clerks
in charge of filing accident reports,
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§ 782.3
hours-of-service records, inspection reports, and similar documents); foremen, warehousemen, superintendents,
salesmen, and employees acting in an
executive capacity. (Ex parte Nos. MC–
2 and MC–3, 28 M.C.C. 125; Ex parte No.
MC–28, 13 M.C.C. 481. But see §§ 782.5(b)
and 782.6(b) as to certain foremen and
superintendents.) Such employees are
not within the section 13(b)(1) exemption. (Overnight Motor Transp. Co. v.
Missel, 316 U.S. 572 (rate clerk who performed incidental duties as cashier and
dispatcher); Levinson v. Spector Motor
Service,
330
U.S.
649;
Porter
v.
Poindexter, 158 F. (2d) 759 (C.A. 10)
(checker of freight and bill collector);
Potashnik, Local Truck System v. Archer
(Ark. Sup. Ct.), 179 S.W. (2d) 696 (night
manager who did clerical work on waybills, filed day’s accumulation of bills
and records, billed out local accumulation of shipments, checked mileage on
trucks and made written reports, acted
as night dispatcher, answered telephone calls, etc.).)
§ 782.3 Drivers.
(a) A ‘‘driver,’’ as defined for Motor
Carrier Act jurisdiction (49 CFR parts
390–395; Ex parte No. MC–2, 3 M.C.C. 665;
Ex parte No. MC–3, 23 M.C.C.1; Ex parte
No. MC–4, 1 M.C.C. 1), is an individual
who drives a motor vehicle in
transporation which is, within the
meaning of the Motor Carrier Act, in
interstate or foreign commerce. (As to
what is considered transportation in
interstate or foreign commerce within
the meaning of the Motor Carrier Act,
see § 782.7). This definition does not require that the individual be engaged in
such work at all times; it is recognized
that even full-duty drivers devote some
of their working time to activities
other than such driving. ‘‘Drivers,’’ as
thus officially defined, include, for example, such partial-duty drivers as the
following, who drive in interstate or
foreign commerce as part of a job in
which they are required also to engage
in other types of driving or nondriving
work: Individuals whose driving duties
are concerned with transportation
some of which is in intrastate commerce and some of which is in interstate or foreign commerce within the
meaning of the Motor Carrier Act; individuals who ride on motor vehicles en-
gaged in transportation in interstate
or foreign commerce and act as assistant or relief drivers of the vehicles in
addition to helping with loading, unloading, and similar work; drivers of
chartered buses or of farm trucks who
have many duties unrelated to driving
or safety of operation of their vehicles
in interstate transportation on the
highways; and so-called ‘‘driver-salesmen’’ who devote much of their time to
selling goods rather than to activities
affecting such safety of operation.
(Levinson v. Spector Motor Service, 300
U.S. 649; Morris v. McComb, 332 U.S. 422;
Richardson v. James Gibbons Co., 132 F.
(2d) 627 (C.A. 4), affirmed 319 U.S. 44;
Gavril v. Kraft Cheese Co., 42 F. Supp.
702 (N.D. Ill.); Walling v. Craig, 53 F.
Supp. 479 (D. Minn.); Vannoy v. Swift &
Co. (Mo. S. Ct.), 201 S.W. (2d) 350; Ex
parte No. MC–2, 3 M.C.C. 665; Ex parte
No. MC–3, 23 M.C.C. 1; Ex parte Nos.
MC–2 and MC–3, 28 M.C.C. 125; Ex parte
No. MC–4, 1 M.C.C. 1. Cf. Colbeck v.
Dairyland Creamery Co. (S.D. Supp. Ct.),
17 N.W. (2d) 262, in which the court held
that the exemption did not apply to a
refrigeration mechanic by reason solely of the fact that he crossed State
lines in a truck in which he transported himself to and from the various
places at which he serviced equipment
belonging to his employer.)
(b) The work of an employee who is a
full-duty or partial-duty ‘‘driver,’’ as
the term ‘‘driver’’ is above defined, directly affects ‘‘safety of operation’’
within the meaning of section 204 of
the Motor Carrier Act whenever he
drives a motor vehicle in interstate or
foreign commerce within the meaning
of that act. (Levinson v. Spector Motor
Service, 330 U.S. 649, citing Richardson
v. James Gibbons Co., 132 F. (2d) 627 (C.A.
4), affirmed 319 U.S. 44; Morris v.
McComb, 332 U.S. 422; Ex parte No. MC–
28, 13 M.C.C. 481, 482, 488; Ex parte Nos.
MC–2 and MC–3, 28 M.C.C. 125, 139 (Conclusion of Law No. 2). See also Ex parte
No. MC–2, 3 M.C.C. 665; Ex parte No.
MC–3, 23 M.C.C. 1; Ex parte No. MC–4, 1
M.C.C. 1.) The Secretary has power to
establish, and has established, qualifications and maximum hours of service for such drivers employed by common and contract carriers or passengers or property and by private carriers of property pursuant to section
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§ 782.4
29 CFR Ch. V (7–1–19 Edition)
204, of the Motor Carrier Act. (See Ex
parte No. MC–4, 1 M.C.C. 1; Ex parte
No. MC–2, 3 M.C.C. 665; Ex parte No.
MC–3, 23 M.C.C. 1; Ex parte No. MC–28,
13 M.C.C. 481; Levinson v. Spector Motor
Service, 330 U.S. 649; Southland Gasoline
Co. v. Bayley, 319 U.S. 44; Morris v.
McComb, 332 U.S. 422; Safety Regulations (Carriers by Motor Vehicle), 49
CFR parts 390, 391, 395) In accordance
with principles previously stated (see
§ 782.2), such drivers to whom this regulatory power extends are, accordingly,
employees exempted from the overtime
requirements of the Fair Labor Standards Act by section 13(b)(1). (Southland
Gasoline Co. v. Bayley, 319 U.S. 44;
Levinson v. Spector Motor Service, 330
U.S. 649; Morris v. McComb, 332 U.S. 422;
Rogers Cartage Co. v. Reynolds, 166 F.
(2d) 317 (C.A. 6). This does not mean
that an employee of a carrier who
drives a motor vehicle is exempted as a
‘‘driver’’ by virtue of that fact alone.
He is not exempt if his job never involves transportation in interstate or
foreign commerce within the meaning
of the Motor Carrier Act (see §§ 782.2 (d)
and (e), 782.7, and 782.8, or if he is employed by a private carrier and the
only such transportation called for by
his job is not transportation of property. (See § 782.2. See also Ex parte No.
MC–28, 13 M.C.C. 481, Cf. Colbeck v.
Dairyland Creamery Co. (S. Ct. S.D.), 17
N.W. (2d) 262 (driver of truck used only
to transport himself to jobsites, as an
incident of his work in servicing his
employer’s refrigeration equipment,
held non exempt).) It has been held
that so-called ‘‘hostlers’’ who ‘‘spot’’
trucks and trailers at a terminal dock
for loading and unloading are not exempt as drivers merely because as an
incident of such duties they drive the
trucks and tractors in and about the
premises of the trucking terminal.
(Keegan v. Ruppert (S.D. N.Y.), 7 Labor
Cases, par. 61,726 6 Wage Hour Rept.
676, cf. Walling v. Silver Fleet Motor Express, 67 F. Supp. 846)
§ 782.4 Drivers’ helpers.
(a) A Driver’s ‘‘helper,’’ as defined for
Motor Carrier Act jurisdiction (Ex
Parte Nos. MC–2 and MC–3, 28 M.C.C.
125, 135, 136, 138, 139), is an employee
other than a driver, who is required to
ride on a motor vehicle when it is being
operated in interstate or foreign commerce within the meaning of the Motor
Carrier Act. (The term does not include
employees who ride on the vehicle and
act as assistants or relief drivers. Ex
parte Nos. MC–2 and MC–3, supra. See
§ 782.3.) This definition has classified
all such employees, including armed
guards
on
armored
trucks
and
conductorettes on buses, as ‘‘helpers’’
with respect to whom he has power to
establish qualifications and maximum
hours of service because of their engagement in some or all of the following activities which, in his opinion,
directly affect the safety of operation
of such motor vehicles in interstate or
foreign commerce (Ex parte Nos. MC–2
and MC–3, 28 M.C.C. 125, 135–136): Assist
in loading the vehicles (they may also
assist in unloading (Ex parte Nos. MC–
2 and MC–3, supra), an activity which
has been held not to affect ‘‘safety of
operation,’’ see § 782.5(c); as to what it
meant by ‘‘loading’’ which directly affects ‘‘safety of operation,’’ see
§ 782.5(a)); dismount when the vehicle
approaches a railroad crossing and flag
the driver across the tracks, and perform a similar duty when the vehicle is
being turned around on a busy highway
or when it is entering or emerging from
a driveway; in case of a breakdown: (1)
Place the flags, flares, and fuses as required by the safety regulations. (2) go
for assistance while the driver protects
the vehicle on the highway, or vice
versa, or (3) assist the driver in changing tires or making minor repairs; and
assist in putting on or removing
chains.
(b) An employee may be a ‘‘helper’’
under the official definition even
though such safety-affecting activities
constitute but a minor part of his job.
Thus, although the primary duty of
armed guards on armored trucks is to
protect the valuables in the case of attempted robberies, they are classified
as ‘‘helpers’’ where they ride on such
trucks being operated in interstate or
foreign commerce, because, in the case
of an accident or other emergency and
in other respects, they act in a capacity somewhat similar to that of the
helpers described in the text. Similarly, conductorettes on buses whose
primary duties are to see to the comfort of the passengers are classified as
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§ 782.5
‘‘helpers’’ whose such buses are being
operated in interstate or foreign commerce, because in instances when accidents occur, they help the driver in obtaining aid and protect the vehicle
from oncoming traffic.
(c) In accordance with principles previously stated (see § 782.2), the section
13(b)(1) exemption applies to employees
who are, under the Secretary of
Transporation’s definitions, engaged in
such activities as full- or partial-duty
‘‘helpers’’ on motor vehicles being operated in transporation in interstate or
foreign commerce within the meaning
of the Motor Carrier Act. (Ispass v. Pyramid Motor Freight Corp., 152 F. (2d) 619
(C.A. 2); Walling v. McGinley Co. (E.D.
Tenn.), 12 Labor Cases, par. 63,731, 6
W.H. Cases 916. See also Levinson v.
Spector Motor Service, 330 U.S. 649; Pyramid Motor Freight Corp. v. Ispass, 330
U.S. 695; Dallum v. Farmers, Coop Trucking Assn. 46 F. Supp. 785 (D. Minn.).)
The exemption has been held inapplicable to so-called helpers who ride on
motor vehicles but do not engage in
any of the activities of ‘‘helpers’’ which
have been found to affect directly the
safety of operation of such vehicles in
interstate
or
foreign
commerce.
(Walling v. Gordon’s Transports (W.D.
Tenn.) 10 Labor Cases par. 62,934, 6 W.H.
Cases 831, affirmed 162 F. (2d) 203 (C.A.
6), certiorari denied, 332 U.S. 774 (helpers on city ‘‘pickup and delivery
trucks’’ where it was not shown that
the loading in any manner affected
safety of operation and the helper’s activities were ‘‘in no manner similar’’ to
those of a driver’s helper in over-theroad operation).) It should be noted
also that an employee, to be exempted
as a driver’s ‘‘helper’’ under the Secretary’s definitions, must be ‘‘required’’ as part of his job to ride on a
motor vehicle when it is being operated
in interstate or foreign commerce; an
employee of a motor carrier is not exempted as a ‘‘helper’’ when he rides on
such a vehicle, not as a matter of fixed
duty, but merely as a convenient
means of getting himself to, from, or
between places where he performs his
assigned work. (See Pyramid Motor
Freight Corp. v. Ispass, 330 U.S. 695,
modifying, on other grounds, 152 F. (2d)
619 (C.A. 2).)
§ 782.5
Loaders.
(a) A ‘‘loader,’’ as defined for Motor
Carrier Act jurisdiction (Ex parte Nos.
MC–2 and MC–3, 28 M.C.C. 125, 133, 134,
139), is an employee of a carrier subject
to section 204 of the Motor Carrier Act
(other than a driver or driver’s helper
as defined in §§ 782.3 and 782.4) whose
duties include, among other things, the
proper loading of his employer’s motor
vehicles so that they may be safely operated on the highways of the country.
A ‘‘loader’’ may be called by another
name, such as ‘‘dockman,’’ ‘‘stacker,’’
or ‘‘helper,’’ and his duties will usually
also include unloading and the transfer
of freight between the vehicles and the
warehouse, but he engages, as a ‘‘loader,’’ in work directly affecting ‘‘safety
of operation’’ so long as he has responsibility when such motor vehicles are
being loaded, for exercising judgment
and discretion in planning and building
a balanced load or in placing, distributing, or securing the pieces of freight
in such a manner that the safe operation of the vehicles on the highways
in interstate or foreign commerce will
not be jeopardized. (Levinson v. Spector
Motor Service, 300 U.S. 649; Pyramid
Motor Freight Corp. v. Ispass, 330 U.S.
695; Walling v. Gordon’s Transport (W.D.
Tenn.), 10 Labor Cases, par. 62,934, affirmed 162 F. (2d) 203 (C.A. 6), certiorari
denied 332 U.S. 774; Walling v. Huber &
Huber Motor Express, 67 F. Supp. 855; Ex
parte Nos. MC–2 and MC–3, 28 M.C.C.
125, 133, 134)
(b) The section 13(b)(1) exemption applies, in accordance with principles
previously stated (see § 782.2), to an employee whose job involves activities
consisting wholly or in part of doing,
or immediately directing, a class of
work defined: (1) As that of a loader,
and (2) as directly affecting the safety
of operation of motor vehicles in interstate or foreign commerce within the
meaning of the Motor Carrier Act,
since such an employee is an employee
with respect to whom the Secretary of
Transporation has power to establish
qualifications and maximum hours of
service. (Levinson v. Spector Motor Service, 330 U.S. 649; Pyramid Motor Freight
Corp. v. Ispass, 330 U.S. 695; Walling v.
Silver Fleet Motor Express, 67 F. Supp.
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29 CFR Ch. V (7–1–19 Edition)
846; Walling v. Huber & Huber Motor Express, 67 F. Supp. 855; Walling v. Gordon’s Transports (W.D. Tenn.); 10 Labor
Cases, par. 62,934, affirmed 162 F. (2d)
203 (C.A. 6) certiorari denied 332 U.S.
774; Tinerella v. Des Moines Transp. Co.,
41 F. Supp. 798.) Where a checker, foreman, or other supervisor plans and immediately directs the proper loading of
a motor vehicle as described above, he
may come within the exemption as a
partial-duty loader. (Levinson v. Spector
Motor Service, 330 U.S. 649; Walling v.
Gordon’s Transports (W.D. Tenn.), 10
Labor Cases, par. 62,934; affirmed 162 F.
(2d) 203 (C.A. 6), certiorari denied 332
U.S. 774; Walling v. Huber & Huber
Motor Express, 67 F. Supp. 885; Walling
v. Silver Fleet Motor Express, 67 F. Supp.
846; Crean v. Moran Transporation Lines,
57 F. Supp. 212 (W.D. N.Y.). See also 9
Labor Cases, par. 62,416; Walling v. Commercial Motor Freight (S.D. Ind.), 11
Labor Cases, par. 63,451; Hogla v. Porter
(E.D. Okla.), 11 Labor Cases, par. 63,389
6 W. H. Cases 608.)
(c) An employee is not exempt as a
loader where his activities in connection with the loading of motor vehicles
are confined to classes of work other
than the kind of loading described
above, which directly affects ‘‘safety of
operation.’’ (Pyramid Motor Freight
Corp. v. Ispass, 330 U.S. 695; Levinson v.
Spector Motor Service, 330 U.S. 649) The
mere handling of freight at a terminal,
before or after loading, or even the
placing of certain articles of freight on
a motor carrier truck may form so
trivial, casual, or occasional a part of
an employee’s activities, or his activities may relate only to such articles or
to such limited handling of them, that
his activities will not come within the
kind of ‘‘loading’’ which directly affects ‘‘safety of operation.’’ Thus the
following activities have been held to
provide no basis for exemption: Unloading; placing freight in convenient
places in the terminal, checking bills
of lading; wheeling or calling freight
being loaded or unloaded; loading vehicles for trips which will not involve
transportation in interstate or foreign
commerce within the meaning of the
Motor Carrier Act; and activities relating to the preservation of the freight as
distinguished from the safety of operation of the motor vehicles carrying
such freight on the highways. (Pyramid
Motor Freight Corp. v. Ispass, 330 U.S.
695; Levinson v. Spector Motor Service,
330 U.S. 649; Porter v. Poindexter, 158 F.
(2d) 759 (C.A. 10); McKeown v. Southern
Calif. Freight Forwarders, 49 F. Supp.
543; Walling v. Gordon’s Transports (W.D.
Tenn.), 10 Labor Cases, par. 62,934, affirmed 162 F. (2d) 203 (C.A. 6), certiorari
denied 332 U.S. 774; Walling v. Huber &
Huber Motor Express, 67 F. Supp. 855;
Walling v. Silver Fleet Motor Express, 67
F. Supp. 846; Crean v. Moran Transp.
Lines, 50 F. Supp. 107, 54 F. Supp. 765
(cf. 57 F. Supp. 212); Gibson v. Glasgow
(Tenn. Sup. Ct.) 157 S.W. (2d) 814. See
also Keeling v. Huber & Huber Motor Express, 57 F. Supp. 617.) As is apparent
from opinion in Ex parte Nos. MC–2 and
MC–3, 28 M.C.C. 125, red caps of bus
companies engaged in loading baggage
on buses are not loaders engaged in
work directly affecting safety of operation of the vehicles. In the same opinion, it is expressly recognized that
there is a class of freight which, because it is light in weight, probably
could not be loaded in a manner which
would adversely affect ‘‘safety of operations.’’ Support for this conclusion is
found in Wirtz v. C&P Shoe Corp. 335 F.
(2d) 21 (C.A. 5), wherein the court held
the loading of boxes of shoes, patterned
on the last in, first out principle clearly was not of a safety affecting character ‘‘in view of the light weight of
the cargo involved.’’ In the case of coal
trucks which are loaded from stockpiles by the use of an electric bridge
crane and a mechanical conveyor, it
has been held that employees operating
such a crane or conveyor in the loading
process are not exempt as ‘‘loaders’’
under section 13(b)(1). (Barrick v. South
Chicago Coal & Dock Co. (N.D. Ill.), 8
Labor Cases, par. 62,242, affirmed 149 F.
(2d) 960 (C.A. 7).) It seems apparent
from the foregoing discussion that an
employee who has no responsibility for
the proper loading of a motor vehicle is
not within the exemption as a ‘‘loader’’
merely because he furnishes physical
assistance when necessary in loading
heavy pieces of freight, or because he
deposits pieces of freight in the vehicle
for someone else to distribute and secure inplace, or even because he does
the physical work of arranging pieces
of freight in the vehicle where another
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§ 782.6
employee tells him exactly what to do
in each instance and he is given no
share in the exercise of discretion as to
the manner in which the loading is
done. (See Pyramid Motor Freight Corp.
v. Ispass, 330 U.S. 695; Yellow Transit
Freight Lines Inc. v. Balven, 320 F. (2d)
495 (C.A. 8); Foremost Dairies v. Ivey, 204
F. (2d) 186 (C.A. 5); Ispass v. Pyramid
Motor Freight Corp., 78 F. Supp. 475
(S.D. N.Y.); Mitchell v. Meco Steel Supply Co., 183 F. Supp. 779 (S.D. Tex.);
Garton v. Sanders Transfer & Storage
Co., 124 F. Supp. 84 (M.D. Tenn.);
McKeown v. Southern Calif. Freight Forwarders, 49 F. Supp. 543; Walling v. Gordon’s Transports (W.D. Tenn.) 10 Labor
Cases, par. 62,934, affirmed 162 F. (2d)
203 (C.A. 6), certiorari denied 332 U.S.
774; Crean v. Moran Transporation Lines,
50 F. Supp. 107 (see also further opinion
in 54 F. Supp. 765, and cf. the court’s
holding in 57 F. Supp. 212 with Walling
v. Gordon’s Transports, cited above). See
also Levinson v. Spector Motor Service,
330 U.S. 649.) Such activities would not
seem to constitute the kind of ‘‘loading’’ which directly affects the safety
of operation of the loaded vehicle on
the public highways, under the official
definitions. (See Ex parte Nos. MC–2
and MC–3, 28 M.C.C. 125, 133, 134).
§ 782.6 Mechanics.
(a) A ‘‘mechanic,’’ for purposes of
safety regulations under the Motor
Carrier Act is an employee who is employed by a carrier subject to the Secretary’s jurisdiction under section 204
of the Motor Carrier Act and whose
duty it is to keep motor vehicles operated in interstate or foreign commerce
by his employer in a good and safe
working condition. (Ex parte, Nos. MC–
2 and MC–3, 28 M.C.C. 125, 132, 133. Ex
parte No. MC–40 (Sub. No. 2), 88 M.C.C.
710 (repair of refrigeration equipment).
See also Morris v. McComb, 332 U.S. 422.)
It has been determined that the safety
of operation of such motor vehicles on
the highways is directly affected by
those activities of mechanics, such as
keeping the lights and brakes in a good
and safe working condition, which prevent the vehicles from becoming potential hazards to highway safety and thus
aid in the prevention of accidents. The
courts have held that mechanics perform work of this character where they
actually do inspection, adjustment, repair or maintenance work on the motor
vehicles themselves (including trucks,
tractors and trailers, and buses) and
are, when so engaged, directly responsible for creating or maintaining physical conditions essential to the safety
of the vehicles on the highways
through the correction or prevention of
defects which have a direct causal connection with the safe operation of the
unit as a whole. (Walling v. Silver Bros.,
136 F. (2d) 168 (C.A. 1); McDuffie v.
Hayes Freight Lines, 71 F. Supp. 755;
Walling v. Silver Fleet Motor Express, 67
F. Supp. 846; Keeling v. Huber & Huber
Motor Express, 57 F. Supp. 617; Walling
v. Huber & Huber Motor Express, 67 F.
Supp. 855; Tinerella v. Des Moines
Transp. Co., 41 F. Supp. 798; Robbins v.
Zabarsky, 44 F. Supp. 867; West V. Smoky
Mt. Stages, 40 F. Supp. 296; Walling v.
Cumberland & Liberty Mills Co. (S.D.
Fla.), 6 Labor Cases, par. 61,184; Esibill
v. Marshall (D. N.J.), 6 Labor Cases,
par. 61,256; Keegan v. Ruppert (S.D.
N.Y.), 7 Labor Cases, par. 61,726; Baker
v. Sharpless Hendler Ice Cream Co. (E.D.
Pa.), 10 Labor Cases, par. 62,956; Kentucky Transport Co. v. Drake (Ky. Ct.
App.). 182 SW (2d) 960.) The following
activities performed by mechanics on
motor vehicles operated in interstate
or foreign commerce are illustrative of
the specific kinds of activities which
the courts, in applying the foregoing
principles, have regarded as directly affecting ‘‘safety of operation’’: The inspection, repair, adjustment, and maintenance for safe operation of steering
apparatus, lights, brakes, horns, windshield wipers, wheels and axles, bushings, transmissions, differentials, motors, starters and ignition, carburetors,
fifth wheels, springs and spring hangers, frames, and gasoline tanks
(McDuffie v. Hayes Freight Lines, 71 F.
Supp. 755; Walling v. Silver Fleet Motor
Express, 67 F. Supp. 846; Wolfe v. Union
Transfer & Storage Co., 48 F. Supp. 855;
Mason & Dixon Lines v. Ligon (Tenn. Ct.
App.) 7 Labor Cases, par. 61,962; Walling
v. Palmer, 67 F. Supp. 12; Kentucky
Transport Co. v. Drake (Ky. Ct. App.),
182 SW (2d) 960.) Inspecting and checking air pressure in tires, changing
tires, and repairing and rebuilding tires
for immediate replacement on the vehicle from which they were removed
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have also been held to affect safety of
operation directly. (Walling v. Silver
Fleet Motor Express, 67 F. Supp. 846;
Walling v. Palmer, 67 F. Supp. 12. See
also McDuffie v. Hayes Freight Lines, 71
F. Supp. 755.) The same is true of hooking up tractors and trailers, including
light and brake connections, and the
inspection of such hookups. (Walling v.
Silver Fleet Motor Express, 67 F. Supp.
846; Walling v. Palmer, 67 F. Supp. 12.
See also Walling v. Gordon’s Transports
(W.D. Tenn.). 10 Labor cases, par.
62,934, affirmed 162 F. (2d) 203 (C.A. 6),
certiorari denied 332 U.S. 744.)
(b) The section 13(b)(1) exemption applies, in accordance with principles
previously stated (see § 782.2), to an employee whose job involves activities
consisting wholly or in part of doing,
or immediately directing, a class of
work which, under the definitions referred to above, is that of a ‘‘mechanic’’ and directly affects the safety
of operation of motor vehicles on the
public highways in interstate or foreign commerce, within the meaning of
the Motor Carrier Act. The power
under the Motor Carrier Act to establish qualifications and maximum hours
of service for such an employee has
been sustained by the courts. (Morris v.
McComb, 332 U.S. 422. See also Pyramid
Motor Freight Corp. v. Ispass. 330 U.S.
695; Levinson v. Spector Motor Service,
330 U.S. 649; Walling v. Silver Bros., 136
F. (2d) 168 (C.C.A. 1)). A supervisory
employee who plans and immediately
directs and checks the proper performance of this class of work may come
within the exemption as a partial-duty
mechanic. (Robbins v. Zabarsky, 44 F.
Supp. 867; Mason & Dixon Lines v. Ligon
(Tenn. Ct. App.), 7 Labor Cases par.
61,962; cf. Morris v. McComb, 332 U.S. 422
and Levinson v. Spector Motor Service,
330 U.S. 649)
(c)(1) An employee of a carrier by
motor vehicle is not exempted as a
‘‘mechanic’’ from the overtime provisions of the Fair Labor Standards Act
under section 13(b)(1) merely because
he works in the carrier’s gargage, or
because he is called a ‘‘mechanic,’’ or
because he is a mechanic by trade and
does mechanical work. (Wirtz v. Tyler
Pipe & Foundry Co., 369 F. 2d 927 (C.A.
5).) The exemption applies only if he is
doing a class of work defined as that of
a ‘‘mechanic’’, including activities
which directly affect the safety of operation
of
motor
vehicles
in
transporation on the public highways
in interstate or foreign commerce.
(Morris v. McComb, 332 U.S. 422; Keeling
v. Huber & Huber Motor Express, 57 F.
Supp. 617; Walling v. Huber & Huber
Motor Express, 67 F. Supp. 855; Walling
v. Silver Fleet Motor Express, 67 F. Supp.
846; McDuffie v. Hayes Freight Lines, 71
F. Supp. 755; Anuchick v. Transamerican
Freight Lines, 46 F. Supp. 861; Walling v.
Burlington Transp. Co. (D. Nebr.), 9
Labor Cases, par. 62,576. Compare Ex
parte No. MC–40 (Sub. No. 2), 88 M.C.C.
710 with Colbeck v. Dairyland Creamery
Co. (S.D. Sup. Ct.), 17 N.W. (2d) 262. See
also Pyramid Motor Freight Corp. v.
Ispass 330 U.S. 695.) Activities which do
not directly affect such safety of operation include those performed by employees whose jobs are confined to such
work as that of dispatchers, carpenters, tarpaulin tailors vehicle painters, or servicemen who do nothing but
oil, gas, grease, or wash the motor vehicles. (Ex parte Nos. MC–2 and MC–3,
28 M.C.C. 125, 132, 133, 135) To these may
be added activities such as filling radiators, checking batteries, and the
usual work of such employees as stockroom personnel, watchmen, porters,
and garage employees performing menial nondiscretionary tasks or disassembling work. Employees whose
work is confined to such ‘‘nonsafety’’
activities are not within the exemption, even though the proper performance of their work may have an indirect effect on the safety of operation of
the motor vehicles on the highways.
(Morris v. McComb, 332 U.S. 422; Campbell v. Riss & Co. (W.D. Mo.), 5 Labor
Cases, par. 61,092 (dispatcher); McDuffie
v. Hayes Freight Lines, 71 F. Supp. 755
(work of janitor and caretaker, carpentry work, body building, removing
paint, preparing for repainting, and
painting); Walling v. Silver Fleet Motor
Express, 67 F. Supp. 846 (body building,
construction work, painting and lettering); Hutchinson v. Barry, 50 F. Supp.
292 (washing vehicles); Walling v. Palmer, 67 F. Supp. 12 (putting water in radiators and batteries, oil and gas in vehicles, and washing vehicles); Anuchick v.
Transamerican Freight Lines, 46 F. Supp.
861 (body builders, tarpaulin worker,
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stockroom boy, night watchman, porter); Bumpus v. Continental Baking Co.
(W.D. Tenn.), 1 Wage Hour Cases 920
(painter), reversed on other grounds 124
F. (2d) 549; Green v. Riss & Co., 45 F.
Supp. 648 (night watchman and gas
pump attendant); Walling v. Burlington
Transp. Co. (D. Nebr.), 9 Labor Cases,
par. 62,576 (body builders); Keegan v.
Ruppert (S.D. N.Y.), 7 Labor Cases, par.
61,726 (greasing and washing); Walling
v. East Texas Freight Lines (N.D. Tex.),
8 Labor Cases, par. 62,083 (Menial
tasks); Collier v. Acme Freight Lines, unreported (S.D. Fla., Oct. 1943) (same);
Potashnik Local Truck System v. Archer
(Ark. Sup. Ct.). 179 S.W. (2d) 696 (checking trucks in and out and acting as
night dispatcher, among other duties);
Overnight Motor Corp. v. Missel, 316 U.S.
572 (rate clerk with part-time duties as
dispatcher).) The same has been held
true of employees whose activities are
confined to construction work, manufacture or rebuilding of truck, bus, or
trailer bodies, and other duties which
are concerned with the safe carriage of
the contents of the vehicle rather than
directly with the safety of operation on
the public highways of the motor vehicle itself (Anuchick v. Transamerican
Freight Lines, 46 F. Supp. 816; Walling v.
Silver Fleet Motor Express, 67 F. Supp.
846; McDuffie v. Hayes Freight Lines 71
F. Supp. 755; Walling v. Burlington
Transp. Co. (D. Nebr.), 9 Labor Cases,
par.
62,576.
Compare
Colbeck
v.
Dairyland Creamery Co. (S.D. Sup. Ct.)
17 N.W. (2d) 262 with Ex parte No. MC–
40 (Sub. No. 2), 88 M.C.C. 710.)
(2) The distinction between direct
and indirect effects on safety of operation is exemplified by the comments
in rejecting the contention in Ex parte
Nos. MC–2 and MC–3, 28 M.C.C. 125, 135,
that the activities of dispatchers directly affect safety of operation. It was
stated: ‘‘It is contended that if a dispatcher by an error in judgment assigns a vehicle of insufficient size and
weight-carrying capacity to transport
the load, or calls a driver to duty who
is sick, fatigued, or otherwise not in
condition to operate the vehicle, or requires or permits the vehicle to depart
when the roads are icy and the country
to be traversed is hilly, an accident
may result. While this may be true, it
is clear that such errors in judgment
are not the proximate causes of such
accidents, and the dispatchers engage
in no activities which directly affect
the safety of operation of motor vehicles in interstate or foreign commerce.’’
(3) Similarly, the exemption has been
held inapplicable to mechanics repairing and rebuilding parts, batteries, and
tires removed from vehicles where a direct causal connection between their
work and the safe operation of motor
vehicles on the highways is lacking because they do no actual work on the
vehicles themselves and entirely different employees have the exclusive responsibility for determining whether
the products of their work are suitable
for use, and for the correct installation
of such parts, on the vehicles. (Keeling
v. Huber & Huber Motor Express, 57 F.
Supp. 617; Walling v. Huber & Huber
Motor Express, 67 F. Supp. 855) Mechanical work on motor vehicles of a carrier
which is performed in order to make
the vehicles conform to technical legal
requirements rather than to prevent
accidents on the highways has not been
regarded by the courts as work directly
affecting
‘‘safety
of
operation.’’
(Kentucky Transport Co. v. Drake (Ky.
Ct. App.), 182 S.W. (2d) 960; Anuchick v.
Transamerican Freight Lines, 46 F. Supp.
861; Yellow Transit Freight Lines Inc. v.
Balsen 320 F. (2d) 495 (C.A. 8)) And it is
clear that no mechanical work on
motor vehicles can be considered to affect safety of operation of such vehicles in interstate or foreign commerce
if the vehicles are never in fact used in
transportation in such commerce on
the public highways. (Baker v. Sharpless
Hendler Ice Cream Co. (E.D. Pa.), 10
Labor Cases, par. 62,956)
§ 782.7 Interstate commerce requirements of exemption.
(a) As explained in preceding sections
of this part, section 13(b)(1) of the Fair
Labor Standards Act does not exempt
an employee of a carrier from the act’s
overtime provisions unless it appears,
among other things, that his activities
as a driver, driver’s helper, loader, or
mechanic directly affect the safety of
operation of motor vehicles in transportation in interstate or foreign commerce within the meaning of the Motor
Carrier Act. What constitutes such
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§ 782.7
29 CFR Ch. V (7–1–19 Edition)
transportation in interstate or foreign
commerce, sufficient to bring such an
employee within the regulatory power
of the Secretary of Transportation
under section 204 of that act, is determined by definitions contained in the
Motor Carrier Act itself. These definitions are, however, not identical with
the definitions in the Fair Labor
Standards Act which determine whether an employee is within the general
coverage of the wage and hours provisions as an employee ‘‘engaged in
(interstate or foreign) commerce.’’ For
this reason, the interstate commerce
requirements of the section 13(b)(1) exemption are not necessarily met by establishing that an employee is ‘‘engaged in commerce’’ within the meaning of the Fair Labor Standards Act
when performing activities as a driver,
driver’s helper, loader, or mechanic,
where these activities are sufficient in
other respects to bring him within the
exemption. (Hager v. Brinks, Inc. (N.D.
Ill.), 11 Labor Cases, par. 63,296, 6 W.H.
Cases 262; Earle v. Brinks, Inc., 54 F.
Supp. 676 (S.D. N.Y.); Thompson v.
Daugherty, 40 F. Supp. 279 (D. Md.). See
also, Walling v. Villaume Box & Lbr. Co.,
58 F. Supp. 150 (D. Minn.). And see in
this connection paragraph (b) of this
section and § 782.8.) To illustrate, employees of construction contractors
are, within the meaning of the Fair
Labor Standards Act, engaged in commerce where they operate or repair
motor vehicles used in the maintenance, repair, or reconstruction of instrumentalities of interstate commerce
(for example, highways over which
goods and persons regularly move in
interstate commerce). (Walling v. Craig,
53 F. Supp. 479 (D. Minn). See also
Engbretson v. E. J. Albrecht Co., 150 F.
(2d) 602 (C.A. 7); Overstreet v. North
Shore Corp., 318 U.S. 125; Pedersen v. J.
F. Fitzgerald Constr. Co., 318 U.S. 740,
742.) Employees so engaged are not,
however, brought within the exemption
merely by reason of that fact. In order
for the exemption to apply, their activities, so far as interstate commerce
is concerned, must relate directly to
the transportation of materials moving
in interstate or foreign commerce
within the meaning of the Motor Carrier Act. Asphalt distributor-operators,
although not exempt by reason of their
work in applying the asphalt to the
highways, are within the exemption
where they transport to the road site
asphalt moving in interstate commerce. See Richardson v. James Gibbons
Co., 132 F. (2d) 627 (C.A. 4), affirmed 319
U.S. 44 (and see reference to this case
in footnote 18 of Levinson v. Spector
Motor Service, 330 U.S. 649); Walling v.
Craig, 53 F. Supp. 479 (D. Minn.).
(b)(1) Highway transportation by
motor vehicle from one State to another, in the course of which the vehicles cross the State line, clearly constitutes interstate commerce under
both acts. Employees of a carrier so engaged, whose duties directly affect the
safety of operation of such vehicles, are
within the exemption in accordance
with principles previously stated.
(Southland Gasoline Co. v. Bayley, 319
U.S. 44; Plunkett v. Abraham Bros., 129
F. (2d) 419 (C.A. 6); Vannoy v. Swift &
Co. (Mo. Sup. Ct.), 201 S.W. (2d) 350; Nelson v. Allison & Co. (E.D. Tenn.), 13
Labor Cases, par. 64,021; Reynolds v.
Rogers Cartage Co. (W.D. Ky.), 13 Labor
Cases, par. 63,978, reversed on other
grounds 166 F. (2d) 317 (C.A. 6); Walling
v. McGinley Co. (E.D. Tenn.), 12 Labor
Cases, par. 63,731; Walling v. A. H. Phillips, Inc., 50 F. Supp. 749, affirmed (C.A.
1) 144 F. (2d) 102,324 U.S. 490. See §§ 782.2
through 782.8.) The result is no different where the vehicles do not actually cross State lines but operate solely within a single State, if what is
being transported is actually moving in
interstate commerce within the meaning of both acts; the fact that other
carriers transport it out of or into the
State is not material. (Morris v.
McComb, 68 S. Ct. 131; Pyramid Motor
Freight Corp. v. Ispass, 330 U.S. 695;
Walling v. Silver Bros. Co. 136 F. (2d) 168
(C.A. 1); Walling v. Mutual Wholesale
Food & Supply Co., 141 F. (2d) 331 (C.A.
8); Dallum v. Farmers Cooperative Trucking Assn., 46 F. Supp. 785 (D. Minn.);
Gavril v. Kraft Cheese Co., 42 F. Supp.
702 (N.D. Ill.); Keegan v. Rupport (S.D.
N.Y.), 7 Labor Cases, par. 61,726, 3 W.H.
Cases 412; Baker v. Sharpless Hendler Ice
Cream Co. (E.D. Pa.), 10 Labor Cases,
par. 62,956, 5 W.H. Cases 926). Transportation within a single State is in interstate commerce within the meaning of
the Fair Labor Standards Act where it
forms a part of a ‘‘practical continuity
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of movement’’ across State lines from
the point of origin to the point of destination. (Walling v. Jacksonville Paper
Co., 317 U.S. 564; Walling v. Mutual
Wholesale Food & Supply Co., 141 F. (2d)
331 (C.A. 8); Walling v. American Stores
Co., 133 F. (2d) 840 (C.A. 3); Baker v.
Sharpless Hendler Ice Cream Co. (E.D.
Pa.), 10 Labor Cases, par. 62,956 5 W.H.
Cases 926) Since the interstate commerce regulated under the two acts is
not identical (see paragraph (a) of this
section), such transportation may or
may not be considered also a movement in interstate commerce within
the meaning of the Motor Carrier Act.
Decisions of the Interstate Commerce
Commission prior to 1966 seemingly
have limited the scope of the Motor
Carrier Act more narrowly than the
courts have construed the Fair Labor
Standards Act. (see § 782.8.) It is
deemed necessary, however, as an enforcement policy only and without
prejudice to any rights of employees
under section 16 (b) of the Act, to assume that such a movement in interstate commerce under the Fair Labor
Standards Act is also a movement in
interstate commerce under the Motor
Carrier Act, except in those situations
where the Commission has held or the
Secretary of Transportation or the
courts hold otherwise. (See § 782.8(a);
and compare Beggs v. Kroger Co., 167 F.
(2d) 700, with the Interstate Commerce
Commission’s holding in Ex parte No.
MC–48, 71 M.C.C. 17, discussed in paragraph (b)(2) of this section.) Under this
enforcement policy it will ordinarily be
assumed by the Administrator that the
interstate commerce requirements of
the section 13(b)(1) exemption are satisfied where it appears that a motor
carrier employee is engaged as a driver, driver’s helper, loader, or mechanic
in transportation by motor vehicle
which, although confined to a single
State, is a part of an interstate movement of the goods or persons being
thus transported so as to constitute
interstate commerce within the meaning of the Fair Labor Standards Act.
This policy does not extend to drivers,
driver’s helpers, loaders, or mechanics
whose transportation activities are ‘‘in
commerce’’ or ‘‘in the production of
goods for commerce’’ within the meaning of the act but are not a part of an
interstate movement of the goods or
persons carried (see, e.g., Wirtz v. Crystal Lake Crushed Stone Co., 327 F. 2d 455
(C.A. 7)). Where, however, it has been
authoritatively held that transportation of a particular character within
a single State is not in interstate commerce as defined in the Motor Carrier
Act (as has been done with respect to
certain transportation of petroleum
products from a terminal within a
State to other points within the same
State—see paragraph (b)(2) of this section), there is no basis for an exemption under section 13(b)(1), even though
the facts may establish a ‘‘practical
continuity of movement’’ from out-ofState sources through such in-State
trip so as to make the trip one in interstate commerce under the Fair Labor
Standards Act. Of course, engagement
in local transportation which is entirely in intrastate commerce provides
no basis for exempting a motor carrier
employee. (Kline v. Wirtz, 373 F. 2d 281
(C.A. 5). See also paragraph (b) of this
section.)
(2) The Interstate Commerce Commission held that transportation confined to points in a single State from a
storage terminal of commodities which
have had a prior movement by rail,
pipeline, motor, or water from an origin in a different State is not in interstate or foreign commerce within the
meaning of part II of the Interstate
Commerce Act if the shipper has no
fixed and persisting transportation intent beyond the terminal storage point
at the time of shipment. See Ex parte
No. MC–48 (71 M.C.C. 17, 29). The Commission specifically ruled that there is
not fixed and persisting intent where:
(i) At the time of shipment there is no
specific order being filled for a specific
quantity of a given product to be
moved through to a specific destination beyond the terminal storage, and
(ii) the terminal storage is a distribution point or local marketing facility
from which specific amounts of the
product are sold or allocated, and (iii)
transportation in the furtherance of
this distribution within the single
State is specifically arranged only
after sale or allocation from storage. In
Baird v. Wagoner Transportation Co., 425
F. (2d) 407 (C.A. 6), the court found each
of these factors to be present and held
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§ 782.7
29 CFR Ch. V (7–1–19 Edition)
the intrastate transportation activities
were not ‘‘in interstate commerce’’
within the meaning of the Motor Carrier Act and denied the section 13(b)(1)
exemption. While ex parte No. MC–48
deals with petroleum and petroleum
products, the decision indicates that
the same reasoning applies to general
commodities moving interstate into a
warehouse for distribution (71 M.C.C.
at 27). Accordingly, employees engaged
in such transportation are not subject
to the Motor Carrier Act and therefore
not within the section 13(b)(1) exemption. They may, however, be engaged in
commerce within the meaning of the
Fair Labor Standards Act. (See in this
connection, Mid-Continent Petroleum
Corp. v. Keen, 157 F. 2d 310 (C.A. 8);
DeLoach v. Crowley’s Inc., 128 F. 2d 378
(C.A. 5); Walling v. Jacksonville Paper
Co., 69 F. Supp. 599, affirmed 167 F. 2d
448, reversed on another point in 336
U.S. 187; and Standard Oil Co. v. Trade
Commission, 340 U.S. 231, 238).
(c) The wage and hours provisions of
the Fair Labor Standards Act are applicable not only to employees engaged
in commerce, as defined in the act, but
also to employees engaged in the production of goods for commerce. Employees engaged in the ‘‘production’’ of
goods are defined by the act as including those engaged in ‘‘handling, transporting, or in any other manner working on such goods, or in closely related
process or occupation directly essential to the production thereof, in any
State.’’ (Fair Labor Standards Act, sec.
3(j), 29 U.S.C., sec. 203(j), as amended by
the Fair Labor Standards Amendments
of 1949, 63 Stat. 910. See also the Division’s Interpretative Bulletin, part 776
of this chapter on general coverage of
the wage and hours provisions of the
act.) Where transportation of persons
or property by motor vehicle between
places within a State falls within this
definition, and is not transportation in
interstate or foreign commerce within
the meaning of the Motor Carrier Act
because movement from points out of
the State has ended or because movement to points out of the State has not
yet begun, the employees engaged in
connection with such transportation
(this applies to employees of common,
contract, and private carriers) are covered by the wage and hours provisions
of the Fair Labor Standards Act and
are not subject to the jurisdiction of
the Secretary of Transportation. Examples are: (1) Drivers transporting
goods in and about a plant producing
goods for commerce; (2) chauffeurs or
drivers of company cars or buses transporting officers or employees from
place to place in the course of their
employment in an establishment which
produces goods for commerces; (3) drivers who transport goods from a producer’s plant to the plant of a processor, who, in turn, sells goods in interstate commerce, the first producer’s
goods being a part or ingredient of the
second producer’s goods; (4) drivers
transporting goods between a factory
and the plant of an independent contractor who performs operations on the
goods, after which they are returned to
the factory which further processes the
goods for commerce; and (5) drivers
transporting goods such as machinery
or tools and dies, for example, to be
used or consumed in the production of
other goods for commerce. These and
other employees engaged in connection
with the transportation within a State
of persons or property by motor vehicle
who are subject to the Fair Labor
Standards Act because engaged in the
production of goods for commerce and
who are not subject to the Motor Carrier Act because not engaged in interstate or foreign commerce within the
meaning of that act, are not within the
exemption provided by section 13(b)(1).
(Walling v. Comet Carriers, 151 F. (2d) 107
(C.A. 2); Griffin Cartage Co. v. Walling,
153 F. (2d) 587 (C.A. 6); Walling v. Morris,
155 F. (2d) 832 (C.A. 6), reversed on
other grounds in Morris v. McComb, 332
U.S. 422; West Kentucky Coal Co. v.
Walling, 153 F. (2d) 582 (C.A. 6); Hamlet
Ice Co. v. Fleming, 127 F. (2d) 165 (C.A.
4); Atlantic Co. v. Walling, 131 F. (2d) 518
(C.A. 5); Chapman v. Home Ice Co., 136 F.
(2d) 353 (C.A. 6); Walling v. Griffin Cartage Co., 62 F. Supp. 396 (E.D. Mich.), affirmed 153 F. (2d) 587 (C.A. 6); Dallum v.
Farmers Coop. Trucking Assn., 46 F.
Supp. 785 (D. Minn.); Walling v. Villaume
Box & Lbr. Co., 58 F. Supp. 150 (D.
Minn); Walling v. DeSoto Creamery &
Produce Co., 51 F. Supp. 938 (D. Minn.);
Reynolds v. Rogers Cargate Co., 71 F.
Supp. 870 (W.D. Ky.), reversed on other
grounds 166 F. (2d) 317 (C.A. 6), Hansen
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§ 782.8
v. Salinas Valley Ice Co. (Cal. App.), 144
P. (2d) 896).
§ 782.8 Special classes of carriers.
(a) The Interstate Commerce Commission consistently maintained that
transportation
with
a
State
of
consumable goods (such as food, coal,
and ice) to railroad, docks, etc., for use
of trains and steamships is not such
transportation as is subject to its jurisdiction. (New Pittsburgh Coal Co. v.
Hocking Valley Ry. Co., 24 I.C.C. 244; Corona Coal Co. v. Secretary of War, 69
I.C.C. 389; Bunker Coal from Alabama
to Gulf Ports, 227 I.C.C. 485.) The intrastate delivery of chandleries, including
cordage, canvas, repair parts, wire
rope, etc., to ocean-going vessels for
use and consumption aboard such vessels which move in interstate or foreign commerce falls within this category. Employees of carriers so engaged are considered to be engaged in
commerce, as that term is used in the
Fair Labor Standards Act. These employees may also be engaged in the
‘‘production of goods for commerce’’
within the meaning of section 3(j) of
the Fair Labor Standards Act. See
cases cited in § 782.7(c), and see Mitchell
v. Independent Ice Co., 294 F. 2d 186
(C.A. 5), certiorari denied 368 U.S. 952,
and part 776 of this chapter. Since the
Commission has disclaimed jurisdiction over this type of operation (see, in
this connection § 782.7(b)), it is the Division’s opinion that drivers, driver’s
helpers, loaders, and mechanics employed by companies engaged in such
activities are covered by the wage and
hours provisions of the Fair Labor
Standards Act, and are not within the
exemption contained in section 13(b)(1).
(See Hansen v. Salinas Valley Ice Co.
(Cal. App.), 144 P. (2d) 896.)
(b) Prior to June 14, 1972, when the
Department of Transportation published a notice in the FEDERAL REGISTER (37 FR 11781) asserting its power
to establish qualifications and maximum hours of service of employees of
contract mail haulers, thereby reversing the long-standing position of the
Interstate Commerce Commission, the
Administrator of the Wage and Hour
Division had taken the position that
employees engaged in the transportation of mail under contract with the
Postal Service were not within the exemption provided by section 13(b)(1) of
the Fair Labor Standards Act. As the
result of the notice of June 14, 1972, the
Administrator will no longer assert
that employees of contract mail carriers are not within the 13(b)(1) exemption for overtime work performed after
June 14, 1972, pending authoritative
court decisions to the contrary. This
position is adopted without prejudice
to the rights of individual employees
under section 16(b) of the Fair Labor
Standards Act.
(c) Section 202(c)(2) of the Motor Carrier Act, as amended on May 16, 1942,
makes section 204 of that act ‘‘relative
to qualifications and maximum hours
of service of employees and safety of
operations and equipment,’’ applicable
‘‘to transportation by motor vehicle by
any person (whether as agent or under
a contractual arrangement) for a * * *
railroad * * * express company * * *
motor carrier * * * water carrier * * *
or a freight forwarder * * * in the performance within terminal areas of
transfer, collection, or delivery service.’’ Thus, drivers, drivers’ helpers,
loaders, and mechanics of a motor carrier performing pickup and delivery
service for a railroad, express company,
or water carrier are to be regarded as
within the 13(b)(1) exemption. (See
Levinson v. Spector Motor Service, 330
U.S. 649 (footnote 10); cf. Cedarblade v.
Parmelee Transp. Co. (C.A. 7), 166 F. (2d)
554, 14 Labor Cases, par. 64,340.) The
same is true of drivers, drivers’ helpers,
loaders, and mechanics employed directly by a railroad, a water carrier or
a freight forwarder in pickup and delivery service. Section 202(c)(1) of the
Motor Carrier Act, as amended on May
16, 1942, includes employees employed
by railroads, water carriers, and
freight forwarders, in transfer, collection, and delivery service in terminal
areas by motor vehicles within the
Interstate Commerce Commission’s
regulatory power under section 204 of
the same act. See Morris v. McComb, 332
U.S. 422 and § 782.2(a). (Such employees
of a carrier subject to part I of the
Interstate Commerce Act may come
within the exemption from the overtime requirements provided by section
13(b)(2). Cf. Cedarblade v. Parmelee
Transp. Co. (C.A. 7), 166 F. (2d) 554, 14
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29 CFR Ch. V (7–1–19 Edition)
Labor Cases, par. 64,340. Thus, only employees of a railroad, water carrier, or
freight forwarder outside of the scope
of part I of the Interstate Commerce
Act and of the 13(b)(2) exemption are
affected by the above on and after the
date of the amendment.) Both before
and after the amendments referred to,
it has been the Division’s position that
the 13(b)(1) exemption is applicable to
drivers, drivers’ helpers, loaders, and
mechanics employed in pickup and delivery service to line-haul motor carrier depots or under contract with forwarding companies, since the Interstate Commerce Commission had determined that its regulatory power
under section 204 of the Motor Carrier
Act extended to such employees.
(d) The determinations of the Interstate Commerce Commission discussed
in paragraphs (a), (b), and (c) of this
section have not been amended or revoked by the Secretary of Transportation. These determinations will continue to guide the Administrator of the
Wage and Hour Division in his enforcement of section 13(b)(1) of the Fair
Labor Standards Act.
[36 FR 21778, Nov. 13, 1971, as amended at 37
FR 23638, Nov. 7, 1972]
783.14 ‘‘Goods’’.
783.15 ‘‘State’’.
783.16 ‘‘Wage’’.
783.17 ‘‘American vessel’’.
APPLICATION IN GENERAL OF THE ACT’S
PROVISIONS
783.18 Commerce activities of employees.
783.19 Commerce activities of enterprises in
which employee is employed.
783.20 Exemptions from the Act’s provisions.
783.21 Guiding principles for applying coverage and exemption provisions.
783.22 Pay standards for employees subject
to ‘‘old’’ coverage of the Act.
783.23 Pay standards for ‘‘newly covered’’
employees.
THE STATUTORY PROVISIONS REGARDING
SEAMEN
783.24 The section 13(a)(14) exemption.
783.25 The section 13(b)(6) exemption.
783.26 The section 6(b)(2) minimum wage requirement.
783.27 Scope of the provisions regarding
‘‘seamen’’.
LEGISLATIVE HISTORY AND JUDICIAL
CONSTRUCTION OF THE EXEMPTIONS
783.28 General legislative history.
783.29 Adoption of the exemption in the
original 1938 Act.
783.30 The 1961 Amendments.
WHO IS ‘‘EMPLOYED AS A SEAMAN’’
PART 783—APPLICATION OF THE
FAIR LABOR STANDARDS ACT TO
EMPLOYEES EMPLOYED AS SEAMEN
INTRODUCTORY
Sec.
783.0 Purpose of this part.
783.1 General scope of the Act.
783.2 Matters discussed in this part.
783.3 Significance of official interpretations.
783.4 Basic support for interpretations.
783.5 Interpretations made, continued, and
superseded by this part.
SOME BASIC DEFINITIONS
783.6 Definitions of terms used in the Act.
783.7 ‘‘Employer’’, ‘‘employee’’, and ‘‘employ’’.
783.8 ‘‘Person’’.
783.9 ‘‘Enterprise’’.
783.10 ‘‘Establishment’’.
783.11 ‘‘Enterprise engaged in commerce or
in the production of goods for commerce’’.
783.12 ‘‘Commerce’’.
783.13 ‘‘Production’’.
783.31 Criteria for employment ‘‘as a seaman’’.
783.32 ‘‘Seaman’’ includes crew members.
783.33 Employment ‘‘as a seaman’’ depends
on the work actually performed.
783.34 Employees aboard vessels who are not
‘‘seamen’’.
783.35 Employees serving as ‘‘watchmen’’
aboard vessels in port.
783.36 Barge tenders.
783.37 Enforcement policy for nonseaman’s
work.
WHAT IS AN ‘‘AMERICAN VESSEL’’
783.38 Statutory definition of ‘‘American
vessel’’.
783.39 ‘‘Vessel’’ includes all means of water
transportation.
783.40 ‘‘Documented’’ vessel.
783.41 ‘‘Numbered’’ vessel.
783.42 Vessels neither ‘‘documented’’ nor
‘‘numbered’’.
COMPUTATION OF WAGES AND HOURS
783.43 Computation of seaman’s minimum
wage.
783.44 Board and lodging as wages.
783.45 Deductions from wages.
783.46 Hours worked.
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783.47
§ 783.3
Off-duty periods.
APPLICATION OF THE EXEMPTIONS
783.48 Factors determining application of
exemptions.
783.49 Workweek unit in applying the exemptions.
783.50 Work exempt under another section
of the Act.
783.51 Seamen on a fishing vessel.
AUTHORITY: Secs. 1–19, 52 Stat. 1060, as
amended; 29 U.S.C. 201–219.
SOURCE: 27 FR 8309, Aug. 21, 1962, unless
otherwise noted.
INTRODUCTORY
§ 783.0 Purpose of this part.
This part 783 is the official interpretation of the Department of Labor with
respect to the meaning and application
of sections 6(b)(2), 13(a)(14), and 13(b)(6)
of the Fair Labor Standards Act, as
amended, which govern the application
of the minimum wage and overtime
pay requirements of the Act to employees employed as seamen. Prior to the
Fair Labor Standards Amendments of
1961, which became effective on September 3, 1961, all employees employed
as seamen were exempt from both the
minimum wage and overtime pay provisions of the Act. The 1961 amendments have narrowed this exemption so
as to extend the minimum wage provisions of the Act to employees employed
as seamen on American vessels. Employees employed as seamen on vessels
other than American vessels continue
to be exempt from both the minimum
wage and the overtime pay requirements of the Act. It is the purpose of
this part to make available in one
place the interpretations of the law relating to employees employed as seamen which will guide the Secretary of
Labor and the Administrator in the
performance of their duties under the
Act.
§ 783.1 General scope of the Act.
The Fair Labor Standards Act, as
amended, is a Federal statute of general application which establishes minimum wage, overtime pay, and child
labor requirements that apply as provided in the Act. All employees, whose
employment has the relationship to
interstate or foreign commerce which
the Act specifies, are subject to the
prescribed labor standards unless specifically exempt from them. Employers
having such employees are required to
comply with the Act’s provisions in
this regard unless relieved therefrom
by some exemption in the Act. Such
employers are also required to comply
with specified recordkeeping requirements contained in part 516 of this
chapter. The law authorizes the Department of Labor to investigate for
compliance and, in the event of violations, to supervise the payment of unpaid wages or unpaid overtime compensation owing to any employee. The
law also provides for enforcement in
the courts.
§ 783.2 Matters discussed in this part.
This part 783 discusses the meaning
and application of the exemptions provided in sections 13(a)(14) and 13(b)(6) of
the Act. The provisions of section
6(b)(2) of the Act, which relate to the
calculation of minimum wages and the
hours worked by seamen on American
vessels, are also discussed in this part.
Other provisions of the Act are discussed only to make clear their relevance to these provisions and are not
considered in detail in this part. Interpretations and regulations also published elsewhere in this title deal in
some detail with such subjects as the
general coverage of the Act (part 776 of
this chapter), methods of payment of
wages (part 531 of this chapter), hours
worked (part 785 of this chapter), recordkeeping requirements (part 516 of
this chapter), and qualifications for exempt executive, administrative, and
professional employees (part 541 of this
chapter). Reference should also be
made to subpart G of part 570 of this
chapter which contains the official interpretations of the child labor provisions of the Act. Copies of any of these
documents may be obtained from any
office of the Wage and Hour Division.
§ 783.3 Significance of official interpretations.
This part contains the official interpretations of the Department of Labor
pertaining to the provisions of section
6(b)(2) and the exemptions provided in
sections 13(a)(14) and 13(b)(6) of the
Act. It is intended that the positions
stated concerning the Act will serve as
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§ 783.4
29 CFR Ch. V (7–1–19 Edition)
‘‘a practical guide to employers and
employees as to how the office representing the public interest in its enforcement will seek to apply it’’
(Skidmore v. Swift, 323 U.S. 134). The
Secretary of Labor and the Administrator will follow these interpretations
in the performance of their duties
under the Act, unless and until they
are otherwise directed by authoritative
decisions of the courts or conclude
upon re-examination of an interpretation that it is incorrect. The interpretations contained herein may be relied
upon in accordance with section 10 of
the Portal-to-Portal Act (29 U.S.C. 251–
262), so long as they remain effective
and are not modified, amended, rescinded, or determined by judicial authority to be incorrect.
§ 783.4 Basic support for interpretations.
The ultimate decisions on interpretations of the Act are made by the courts
(Mitchell v. Zachry, 362 U.S. 310;
Kirschbaum v. Walling, 316 U.S. 517).
Court decisions supporting interpretations contained in this part are cited
where it is believed they may be helpful. On matters which have not been
determined by the courts, it is necessary for the Secretary of Labor and
the Administrator to reach conclusions
as to the meaning and the application
of provisions of the law in order to
carry out their responsibilities of administration
and
enforcement
(Skidmore v. Swift, 323 U.S. 134). In order
that these positions may be made
known to persons who may be affected
by them, official interpretations are
issued by the Administrator on the advice of the Solicitor of Labor, as authorized by the Secretary (reorg. Pl. 6
of 1950, 64 Stat. 1263; Gen. Ord. 45A,
May 24, 1950, 15 FR 3290). As included in
this part, these interpretations are believed to express the intent of the law
as reflected in its provisions and as
construed by the courts and evidenced
by its legislative history. References to
pertinent legislative history are made
in this part where it appears that they
will contribute to a better understanding of the interpretations.
§ 783.5 Interpretations made, continued, and superseded by this part.
On and after publication of this part
783 in the FEDERAL REGISTER, the interpretations contained therein shall be in
effect and shall remain in effect until
they are modified, rescinded or withdrawn. This part supersedes and replaces the interpretations previously
published in the FEDERAL REGISTER
and Code of Federal Regulations as
part 783 of this chapter. Prior opinions,
rulings, and interpretations and prior
enforcement policies which are not inconsistent with the interpretations in
this part or with the Fair Labor Standards Act as amended by the Fair Labor
Standards Amendments of 1961 are continued in effect; all other opinions, rulings, interpretations, and enforcement
policies on the subjects discussed in
the interpretations in this part are rescinded and withdrawn. The interpretations in this part provide statements of
general principles applicable to the
subjects discussed and illustrations of
the application of these principles to
situations that frequently arise. They
do not and cannot refer specifically to
every problem which may be met by
employers and employees in the application of the Act. The omission to discuss a particular problem in this part
or in interpretations supplementing it
should not be taken to indicate the
adoption of any position by the Secretary of Labor or the Administrator
with respect to such problem or to constitute an administrative interpretations or practice or enforcement policy. Questions on matters not fully
covered by this part may be addressed
to the Administrator of the Wage and
Hour Division, U.S. Department of
Labor, Washington, DC 20210, or to any
Regional Office of the Division.
SOME BASIC DEFINITIONS
§ 783.6 Definitions of terms used in the
Act.
The meaning and application of the
provisions of law discussed in this part
depend in large degree on the definitions of terms used in these provisions.
The Act itself defines some of these
terms. Others have been defined and
construed in decisions of the courts. In
the following sections some of these
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§ 783.10
basic definitions are set forth for ready
reference in connection with the part’s
discussion of the various provisions in
which they appear. These definitions
and their application are further considered in other statements of interpretations to which reference is made, and
in the sections of this part where the
particular provisions containing the
defined terms are discussed.
§ 783.7 ‘‘Employer’’, ‘‘employee’’, and
‘‘employ’’.
The Act’s major provisions impose
certain requirements and prohibitions
on every ‘‘employer’’ subject to their
terms. The employment by an ‘‘employer’’ of an ‘‘employee’’ is, to the extent specified in the Act, made subject
to minimum wage and overtime pay requirements and to prohibitions against
the employment of oppressive child
labor. The Act provides its own definitions of ‘‘employer’’, ‘‘employee’’, and
‘‘employ’’, under which ‘‘economic reality’’ rather than ‘‘technical concepts’’ determines whether there is employment subject to its terms (Goldberg
v. Whitaker House Cooperative, 366 U.S.
28; United States v. Silk, 331 U.S. 704;
Rutherford Food Corp. v. McComb, 331
U.S. 772). An ‘‘employer’’, as defined in
section 3(d) of the Act, ‘‘includes any
person acting directly or indirectly in
the interest of an employer in relation
to an employee but shall not include
the United States or any State or political subdivision of a State, or any
labor organization (other than when
acting as an employer), or anyone acting in the capacity of officer or agent
of such labor organization’’. An ‘‘employee’’, as defined in section 3(e) of
the Act, ‘‘includes any individual employed by an employer’’, and ‘‘employ’’, as used in the Act, is defined in
section 3(g) to include ‘‘to suffer or permit to work’’. It should be noted, as explained in part 791 of this chapter, dealing with joint employment, that in appropriate circumstances two or more
employers may be jointly responsible
for compliance with the statutory requirements applicable to employment
of a particular employee. It should also
be noted that ‘‘employer’’, ‘‘enterprise’’, and ‘‘establishment’’ are not
synonymous terms, as used in the Act.
An employer may have an enterprise
with more than one establishment, or
he may have more than one enterprise,
in which he employs employees within
the meaning of the Act. Also, there
may be different employers who employ employees in a particular establishment or enterprise.
§ 783.8 ‘‘Person’’.
As used in the Act (including definition of ‘‘enterprise’’ set forth below in
§ 783.9), ‘‘person’’ is defined as meaning
‘‘an individual, partnership, association, corporation, business trust, legal
representative, or any organized group
of persons’’ (Act, section 3(a)).
§ 783.9 ‘‘Enterprise’’.
The term ‘‘enterprise’’ which may, in
some situations, be pertinent in determining coverage of this Act of employees employed by employers on vessels,
is defined in section 3(r) of the Act.
Section 3(r) states:
Enterprise means the related activities
performed (either through unified operation
or common control) by any person or persons
for a common business purpose, and includes
all such activities whether performed in one
or more establishments or by one or more
corporate or other organizational units including departments of an establishment operated through leasing arrangements, but
shall not include the related activities performed for such enterprise by an independent
contractor * * *.
The scope and application of this definition is discussed in part 776 of this
chapter and in §§ 779.200 through 779.235
of this chapter.
§ 783.10 ‘‘Establishment’’.
As used in the Act (including the provision quoted below in § 783.11), the
term ‘‘establishment’’, which is not
specifically defined therein, refers to a
‘‘distinct physical place of business’’
rather than to ‘‘an entire business or
enterprise’’ which may include several
separate places of business. This is consistent with the meaning of the term
as it is normally used in business and
in government, is judicially settled,
and has been recognized in the Congress in the course of enactment of
amendatory legislation (Phillips v.
Walling 334 U.S. 490; Mitchell v. Bekins
Van & Storage Co., 352 U.S. 1027; 95
Cong. Rec. 12505, 12579, 14877; H. Rept.
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§ 783.11
29 CFR Ch. V (7–1–19 Edition)
No. 1453, 81st Cong., 1st sess. p. 35). This
is the meaning of the term as used in
sections 3(r), 3(s), and 6(b) of the Act.
An establishment may have employees
employed away from the establishment
as well as within it (H. Rept. No. 1453,
supra).
§ 783.11 ‘‘Enterprise engaged in commerce or in the production of goods
for commerce’’.
Portions of the definition of ‘‘enterprise engaged in commerce or in the
production of goods for commerce’’
(Act section 3(s)) which may in some
situations determine the application of
provisions of the Act to employees employed by employers on vessels are as
follows:
(s) ‘‘Enterprise engaged in commerce or in
the production of goods for commerce’’
means any of the following in the activities
of which employees are so engaged, including
employees handling, selling, or otherwise
working on goods that have been moved in or
produced for commerce by any person:
*
*
*
*
*
(3) any establishment of any such enterprise * * * which has employees engaged in
commerce or in the production of goods for
commerce if the annual gross volume of
sales of such enterprise is not less than
$1,000,000.
*
*
*
*
*
The application of this definition is
considered in part 776 of this chapter.
§ 783.12 ‘‘Commerce’’.
‘‘Commerce’’ as used in the Act includes interstate and foreign commerce. It is defined in section 3(b) of
the Act to mean ‘‘trade, commerce,
transportation, transmission, or communication among the several States
or between any State and any place
outside thereof.’’ (For the definition of
‘‘State’’, see § 783.15.) The application
of this definition and the kinds of activities which it includes are discussed
at length in part 776 of this chapter
dealing with the general coverage of
the Act.
§ 783.13 ‘‘Production’’.
To understand the meaning of ‘‘production’’ of goods for commerce as used
in the Act it is necessary to refer to
the definition in section 3(j) of the
term ‘‘produced’’. A detailed discussion
of the application of the terms as defined is contained in part 776 of this
chapter, dealing with the general coverage of the Act. Section 3(j) provides
that ‘‘produced’’ as used in the Act
‘‘means
produced,
manufactured,
mined, handled, or in any other manner worked on in any State; and for the
purposes of this Act an employee shall
be deemed to have been engaged in the
production of goods if such employee
was employed in producing, manufacturing, mining, handling, transporting,
or in any other manner working on
such goods, or in any closely related
process or occupation directly essential to the production thereof, in any
State.’’ (For the definition of ‘‘State’’
see § 783.15.)
§ 783.14 ‘‘Goods’’.
The definition in section 3(i) of the
Act states that ‘‘goods’’, as used in the
Act means ‘‘goods (including ships and
marine equipment), wares, products,
commodities, merchandise, or articles
or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after
their delivery into the actual physical
possession of the ultimate consumer
thereof other than a producer, manufacturer, or processor thereof.’’ Part
776 of this chapter, dealing with the
general coverage of the Act, contains a
detailed discussion of the application
of this definition and what is included
in it.
§ 783.15 ‘‘State’’.
As used in the Act, ‘‘State’’ means
‘‘any State of the United States or the
District of Columbia or any Territory
or possession of the United States’’
(Act, section 3(c)). The application of
this definition in determining questions of coverage under the Acts’ definition of ‘‘commerce’’ and ‘‘produced’’
(see §§ 783.12, 783.13) is discussed in part
776 of this chapter, dealing with general coverage.
§ 783.16 ‘‘Wage’’.
‘‘Wage’’ paid to an employee is defined in section 3(m) of the Act to include ‘‘the reasonable cost, as determined by the Secretary of Labor, to
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§ 783.20
the employer of furnishing such employee with board, lodging, or other facilities, if such board, lodging, or other
facilities are customarily furnished by
such employer to his employees: Provided, That the cost of board, lodging,
or other facilities shall not be included
as a part of the wage paid to any employee to the extent it is excluded
therefrom under the terms of a bona
fide collective bargaining agreement
applicable to the particular employee:
Provided further, That the Secretary is
authorized to determine the fair value
of such board, lodging, or other facilities for defined classes of employees
and in defined areas, based on average
cost to the employer or to groups of
employers similarly situated, or average value to groups of employees, or
other appropriate measure of fair
value. Such evaluations, where applicable and pertinent, shall be used in lieu
of actual measure of cost in determining the wage paid to any employee’’. Although there is some incidental discussion in this part of this
definition and its impact, a fuller discussion of its meaning and the regulations pertaining thereto are set forth
in part 531 of this chapter.
§ 783.17
‘‘American vessel’’.
Section 3(p) of the Act, added by the
1961 Amendments, defines ‘‘American
vessel’’ to include ‘‘any vessel which is
documented or numbered under the
laws of the United States.’’ This definition and its effect with respect to the
application of the Act to employment
of individuals as seamen are discussed
in subsequent sections of this part.
APPLICATION IN GENERAL OF THE ACT’S
PROVISIONS
§ 783.18 Commerce activities of employees.
Prior to the 1961 Amendments, the
Fair Labor Standards Act applied to all
employees, not specifically exempted,
who are engaged (a) in interstate or
foreign commerce or (b) in the production of goods for such commerce, which
is defined to include any closely related process or occupation directly,
essential to such production (29 U.S.C.
206(a), 207(a); and see §§ 783.12 to 783.15
for definitions governing the scope of
this coverage). The Act as amended in
1961 continues this coverage. In general, employees of businesses concerned with the transportation of
goods or persons on navigable waters
are engaged in interstate or foreign
commerce, or in the production of
goods for such commerce, as defined in
the Act, and are subject to the Act’s
provisions except as otherwise provided
in sections 13(a)(14) and 13(b)(6) or
other express exemptions. A detailed
discussion of the activities in commerce or in the production of goods for
commerce which will bring an employee under the Act is contained in
part 776 of this chapter, dealing with
general coverage.
§ 783.19 Commerce activities of enterprises in which employee is employed.
Under amendments to the Fair Labor
Standards Act effective September 3,
1961, employees not covered by reason
of their personal engagement in interstate commerce activites, as explained
in § 783.18, are nevertheless brought
within the coverage of the Act if they
are employed in an enterprise which is
defined in section 3(s) of the Act as an
enterprise engaged in commerce or in
the production of goods for commerce,
or by an establishment described in
section 3(s)(3) of the Act (see § 783.11).
Such employees, if not exempt from
the minimum wage and overtime pay
requirements under section 13(a)(14) or
exempt from the overtime pay requirements under section 13(b)(6), will have
to be paid in accordance with those
monetary standards of the Act unless
expressly exempt under some other
provision. This would generally be true
of employees employed in enterprises
and by establishments engaged in a
business concerned with transportation
of goods or persons by vessels, where
the enterprise has an annual gross
sales volume of $1,000,000 or more. Enterprise coverage is more fully discussed in part 776 of this chapter, dealing with general coverage.
§ 783.20 Exemptions
provisions.
from
the
The Act provides a number of specific
exemptions from the general requirements previously described. Some are
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§ 783.21
29 CFR Ch. V (7–1–19 Edition)
exemptions from the overtime provisions only. Others are from the child
labor provisions only. Several are exemptions from both the minimum wage
and the overtime requirements of the
Act. Finally, there are some exemptions from all three—minimum wage,
overtime pay, and child labor requirements. An examination of the terminology in which the exemptions from
the general coverage of the Fair Labor
Standards Act are stated discloses language patterns which reflect congressional intent. Thus, Congress specified
in varying degree the criteria for application of each of the exemptions and in
a number of instances differentiated as
to whether employees are to be exempt
because they are employed by a particular kind of employer, employed in
a particular type of establishment, employed in a particular industry, employed in a particular capacity or occupation, or engaged in a specified operation. (See 29 U.S.C. 203(d); 207 (b), (c),
(h); 213 (a), (b), (c), (d). And see Addison
v. Holly Hill, 322 U.S. 607; Walling v.
Haden, 153 F. 2d 196, certiorari denied
328 U.S. 866; Mitchell v. Stinson, 217 F. 2d
210.) In general, there are no exemptions from the child labor requirements
that apply in enterprises or establishments engaged in transportation or
shipping (see part 570, subpart G of this
chapter). Such enterprises or establishments will, however, be concerned with
the exemption from overtime pay in
section 13(b)(6) of the Act for employees employed as seamen and the exemption from the minimum wage and
overtime pay requirements provided by
section 13(a)(14) for employees so employed on vessels other than American
vessels. These exemptions, which are
subject to the general rules stated in
§ 783.21, are discussed at length in this
part.
§ 783.21 Guiding principles for applying coverage and exemption provisions.
It is clear that Congress intended the
Fair Labor Standards Act to be broad
in its scope (Helena Glendale Ferry Co.
v. Walling, 132 F. 2d 616). ‘‘Breadth of
coverage is vital to its mission’’ (Powell
v. U.S. Cartridge Co., 339 U.S. 497). An
employer who claims an exemption
under the Act has the burden of show-
ing that it applies (Walling v. General
Industries Co., 330 U.S. 545; Mitchell v.
Kentucky Finance Co., 359 U.S. 290;
Tobin v. Blue Channel Corp. 198 F. 2d
245, approved in Mitchell v. Myrtle Grove
Packing Co., 350 U.S. 891; Fleming v.
Hawkeye Pearl Button Co., 113 F. 2d 52).
Conditions specified in the language of
the Act are ‘‘explicit prerequisites to
exemption’’ (Arnold v. Kanowsky, 361
U.S. 388; and see Walling v. Haden, 153
F. 2d 196). In their application, the purpose of the exemption as shown in its
legislative history as well as its language should be given effect. However,
‘‘the details with which the exemptions
in this Act have been made preclude
their enlargement by implication’’ and
‘‘no matter how broad the exemption,
it is meant to apply only to’’ the specified activities (Addison v. Holly Hill, 322
U.S. 607; Maneja v. Waialua, 349 U.S.
254). Exemptions provided in the Act
‘‘are to be narrowly construed against
the employer seeking to assert them’’
and their application limited to those
who come ‘‘plainly and unmistakably
within their terms and spirits.’’ This
construction of the exemptions is necessary to carry out the broad objectives for which the Act was passed
(Phillips v. Walling, 324 U.S. 490; Mitchell
v. Kentucky Finance Co., supra; Arnold
v. Kanowsky, supra; Helena Glendale
Ferry Co. v. Walling, supra; Mitchell v.
Stinson, 217 F. 2d 210; Flemming v. Hawkeye Pearl Button Co., 113 F. 2d 52;
Walling v. Bay State Dredging & Contracting Co., 149 F. 2d 346, certiorari denied 326 U.S. 760; Anderson v. Manhattan Lighterage Corp., 148 F. 2d 971, certiorari denied 326 U.S. 722; Sternberg
Dredging Co. v. Walling, 158 F. 2d 678).
§ 783.22 Pay standards for employees
subject to ‘‘old’’ coverage of the Act.
The 1961 amendments did not change
the tests described in § 783.18 by which
coverage based on the employee’s individual activities is determined. Any
employee whose employment satisfies
these tests and would not have come
within some exemption (such as section 13(a)(14)) in the Act prior to the
1961 amendments is subject to the
‘‘old’’ provisions of the law and entitled to a minimum wage of at least
$1.15 an hour beginning September 3,
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§ 783.26
1961, and not less than $1.25 an hour beginning September 3, 1963 (29 U.S.C.
206(a)(1)), unless expressly exempted by
some provision of the amended Act.
Such an employee is also entitled to
overtime pay for hours worked in excess of 40 in any workweek at a rate
not less than one and one-half times
his regular rate of pay (29 U.S.C.
207(a)(1)), unless expressly exempt from
overtime by some exemption such as
section 13(b)(6). (Minimum wage rates
in Puerto Rico, the Virgin Islands, and
American Samoa are governed by special provisions of the Act (26 U.S.C.
206(a)(3); 206(c)(2).) Information on
these rates is available at any office of
the Wage and Hour Division.
§ 783.23 Pay standards for ‘‘newly covered’’ employees.
There are some employees whose individual activities would not bring
them within the minimum wage or
overtime pay provisions of the Act as
it was prior to the 1961 amendments,
but who are brought within minimum
wage or overtime coverage or both for
the first time by the new ‘‘enterprise’’
coverage provisions or changes in exemptions, or both, which were enacted
as part of the amendments and made
effective September 3, 1961. Typical of
such employees are those who, regardless of any engagement in commerce or
in the production of goods for commerce, are employed as seamen and
would therefore have been exempt from
minimum wage as well as overtime pay
requirements by virtue of section
13(a)(14) of the Act until the 1961
amendments if so employed during
that period, but who by virtue of these
amendments are exempt only from the
overtime pay requirements on and
after September 3, 1961, under section
13(b)(6) of the amended Act. These
‘‘newly covered’’ employees for whom
no specific exemption has been retained or provided in the amendments
must be paid not less than the minimum wages shown in the schedule
below for hours worked, computed, in
the case of employees employed as seamen, in accordance with the special
provisions of section 6(b)(2) which are
discussed in subsequent sections of this
part. Any ‘‘newly covered’’ employees
who are not exempted by section
13(b)(6) because of their employment as
seamen must be paid, unless exempted
by some other provision, not less than
one and one-half times their regular
rates of pay for overtime, as shown in
the schedule below.
Beginning
Minimum wage (29
U.S.C. 206(b))
Sept. 3, 1961 ..
Sept. 3, 1963 ..
$1 an hour ...............
No change ...............
Sept. 3, 1964 ..
$1.15 an hour ..........
1965 1
Sept. 3,
and thereafter.
$1.25 an hour ..........
Overtime pay (29
U.S.C. 207(a)(2))
None required.
After 44 hours in a
workweek
After 42 hours in a
workweek.
After 40 hours in a
workweek.
1 Requirements identical to those for employees under ‘‘old’’
coverage. (Minimum wage rates for newly covered employees, in Puerto Rico, the Virgin Islands, and American Samoa
are set by wage order on recommendations of special industry committees (29 U.S.C. 206(a)(3); 206(c)(2). Information on
these rates may be obtained at any office of the Wage and
Hour and Public Contracts Divisions.)
THE STATUTORY PROVISIONS REGARDING
SEAMEN
§ 783.24 The section 13(a)(14) exemption.
Section 13(a)(14) of the Fair Labor
Standards Act exempts from the minimum wage and overtime pay requirements of the Act, but not from its child
labor provisions, ‘‘any employee employed as a seaman on a vessel other
than an American vessel’’.
§ 783.25 The section 13(b)(6) exemption.
Section 13(b)(6) of the Act exempts
from the overtime pay requirements of
the Act, but not from its other requirements, ‘‘any employee employed as a
seaman’’.
§ 783.26 The section 6(b)(2) minimum
wage requirement.
Section 6(b), with paragraph (2)
thereof, requires the employer to pay
to an employee, ‘‘if such employee is
employed as a seaman on an American
vessel, not less than the rate which
will provide to the employee, for the
period covered by the wage payment,
wages equal to compensation at the
hourly rate prescribed by paragraph (1)
of this subsection for all hours during
such period when he was actually on
duty (including periods aboard ship
when the employee was on watch or
was, at the direction of a superior officer, performing work or standing by,
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§ 783.27
29 CFR Ch. V (7–1–19 Edition)
but not including off-duty periods
which are provided pursuant to the employment agreement).’’ The ‘‘hourly
rate prescribed by’’ paragraph (1) of the
subsection is the minimum wage rate
applicable according to the schedule
shown in § 783.23.
§ 783.27 Scope of the provisions regarding ‘‘seamen’’.
In accordance with the above provisions of the Act as amended, an employee employed as a seaman is exempt
only from its overtime pay provisions
under the new section 13(b)(6), unless
the vessel on which he is employed is
not an American vessel. Section
13(a)(14) as amended continues the
prior exemption, from minimum wages
as well as overtime pay, for any employees employed as a seaman on a vessel other than an American vessel.
Thus, to come within this latter exemption an employee now must be
‘‘employed as’’ a ‘‘seaman’’ on a vessel
other than an ‘‘American vessel’’,
while to come within the overtime exemption provided by section 13(b)(6) an
employee need only be ‘‘employed as’’
a ‘‘seaman’’. The minimum wage requirements of the Act, as provided in
section 6(b) and paragraph (2) of that
subsection apply if the employee is
‘‘employed as’’ a ‘‘seaman’’ on an
‘‘American vessel’’. The meaning and
scope of these key words, ‘‘employed as
a seaman’’ and ‘‘American vessel’’ are
discussed in subsequent sections of this
part. Of course, if an employee is not
‘‘employed as’’ a ‘‘seaman’’ within the
meaning of this term as used in the
Act, these exemptions and section
6(b)(2) would have no relevancy and his
status under the Act would depend, as
in the case of any other employee,
upon the other facts of his employment, (§§ 783.18 through 783.20).
LEGISLATIVE HISTORY AND JUDICIAL
CONSTRUCTION OF THE EXEMPTIONS
§ 783.28
General legislative history.
As originally enacted in 1938, section
13(a)(3) of the Fair Labor Standards
Act exempted from both the minimum
wage and overtime pay requirements
‘‘any employee employed as a seaman’’
(52 Stat. 1050). In 1949 when several
amendments were made to the Act (63
Stat. 910), this exemption was not
changed except that it was renumbered
section 13(a)(14). In the 1961 amendments (75 Stat. 65), a like exemption
was retained but it was limited to one
employed as a seaman on a vessel other
than an American vessel (section
13(a)(14)); an overtime exemption was
provided for all employees employed as
seamen (section 13(b)(6)), and those employed as seamen on an American vessel were brought within the minimum
wage provisions (sec. 6(b)(2)).
§ 783.29 Adoption of the exemption in
the original 1938 Act.
(a) The general pattern of the legislative history of the Act shows that Congress intended to exempt, as employees
‘‘employed as’’ seamen, only workers
performing water transportation services. The original bill considered by the
congressional committees contained no
exemption for seamen or other transportation workers. At the joint hearings before the Senate and House Committees on Labor, representatives of
the principal labor organizations representing seamen and other transportation workers testified orally and by
writing that the peculiar needs of their
industry and the fact that they were
already under special governmental
regulation made it unwise to bring
them within the scope of the proposed
legislation (see Joint Hearings before
Senate Committee on Education and
Labor and House Committee on Labor
on S. 2475 and H.R. 7200, 75th Cong., 1st
sess., pp. 545, 546, 547, 549, 1216, 1217).
The committees evidently acquiesced
in this view and amendments were accepted (81 Cong. Rec. 7875) and subsequently adopted in the law, exempting
employees employed as seamen (sec.
13(a)(3)), certain employees of motor
carriers (sec. 13(b)(1)), railroad employees (sec. 13(b)(2)), and employees of carriers by air (sec. 13(a)(4), now sec.
13(b)(3)).
(b) That the exemption was intended
to exempt employees employed as
‘‘seamen’’ in the ordinary meaning of
that word is evidenced by the fact that
the chief proponents for the seamen’s
exemption were the Sailors Union of
the Pacific and the National Maritime
Union. The former wrote asking for an
exemption for ‘‘seamen’’ for the reason
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§ 783.31
that they were already under the jurisdiction of the Maritime Commission
pursuant to the Merchant Marine Act
of 1936 (Joint Hearings before the Committees on Labor on S. 2475 and H.R.
7200, 75th Cong., 1st sess., pp. 1216, 1217).
The representative of the latter union
also asked that ‘‘seamen’’ be exempted
for the same reason saying * * * ‘‘We
feel that in a general interpretation of
the whole bill that the way has been
left open for the proposed Labor Standards Board to have jurisdiction over
those classes of workers who are engaged in transportation. While this
may not have an unfavorable effect
upon the workers engaged in transportation by water, we feel that it may
conflict with the laws now in effect regarding the jurisdiction of the government machinery now set up to handle
these problems’’ (id. at p. 545). And he
went on to testify, ‘‘What we would
like is an interpretation of the bill
which would provide a protective
clause for the ‘seamen’ ’’ (id. at p. 547).
(c) Consonant with this legislative
history, the courts in interpreting the
phrase ‘‘employee employed as a seaman’’ for the purpose of the Act have
given it its commonly accepted meaning, namely, one who is aboard a vessel
necessarily and primarily in aid of its
navigation (Walling v. Bay State Dredging and Contracting Co., 149 F. 2d 346;
Walling v. Haden, 153 F. 2d 196; Sternberg
Dredging Co. v. Walling, 158 F. 2d 678). In
arriving at this conclusion the courts
recognized that the term ‘‘seaman’’
does not have a fixed and precise meaning but that its meaning is governed by
the context in which it is used and the
purpose of the statute in which it is
found. In construing the Fair Labor
Standards Act, as a remedial statute
passed for the benefit of all workers engaged in commerce, unless exempted,
the courts concluded that giving a liberal interpretation of the meaning of
the term ‘‘seaman’’ as used in an exemptive provision of the Act would
frustrate rather than accomplish the
legislative purpose (Helena Glendale
Ferry Co. v. Walling, 132 F. 2d 616;
Walling v. Bay State Dredging and Contracting Co., supra; Sternberg Dredging
Co. v. Walling, supra; Walling v. Haden,
supra).
§ 783.30 The 1961 Amendments.
One of the steps Congress took in the
1961 Amendments to extend the monetary provisions of the Act to more
workers was to limit the scope of the
exemption which excluded all employees employed as seamen from application of the minimum wage and overtime provisions. This it did by extending the minimum wage provisions of
the Act to one employed as a seaman
on an American vessel (section 6(b)(2)),
by adding to the language of section
13(a)(14) to make the exemption applicable only to a seaman employed on a
vessel other than an American vessel,
and finally by the addition of a new exemption, section 13(b)(6), relieving employers of overtime pay requirements
with respect to those employees employed as seamen who do not come
within the scope of the amended section 13(a)(14). (H. Rep. No. 75, 87th
Cong., 1st sess., pp. 33, 36; Sen. Rep. No.
145, 87th Cong., 1st sess., pp. 32, 50;
Statement of the Managers on the part
of the House, H. (Cong.) Rep. No. 327,
87th Cong., 1st sess., p. 16.) In view of
the retention in the 1961 amendments
of the basic language of the original
exemption, ‘‘employee employed as a
seaman’’, the legislative history and
prior judicial construction (see § 783.29)
of the scope and meaning of this phrase
would seem controlling for purposes of
the amended Act.
WHO IS ‘‘EMPLOYED AS A SEAMAN’’
§ 783.31 Criteria for employment ‘‘as a
seaman.’’
In accordance with the legislative
history and authoritative decisions as
discussed in §§ 783.28 and 783.29, an employee will ordinarily be regarded as
‘‘employed as a seaman’’ if he performs, as master or subject to the authority, direction, and control of the
master aboard a vessel, service which
is rendered primarily as an aid in the
operation of such vessel as a means of
transportation, provided he performs
no substantial amount of work of a different character. This is true with respect to vessels navigating inland
waters as well as ocean-going and
coastal vessels (Sternberg Dredging Co.
v. Walling, 158 F. 2d 678; Walling v.
Haden, 153 F. 2d 196, certiorari denied
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§ 783.32
29 CFR Ch. V (7–1–19 Edition)
328 U.S. 866; Walling v. Great Lakes
Dredge & Dock Co., 149 F. 2d 9, certiorari denied 327 U.S. 722; Douglas v. Dixie
Sand and Gravel Co., (E.D. Tenn.) 9 WH
Cases 285). The Act’s provisions with
respect to seamen apply to a seaman
only when he is ‘‘employed as’’ such
(Walling v. Haden, supra); it appears
also from the language of section
6(b)(2) and 13(a)(14) that they are not
intended to apply to any employee who
is not employed on a vessel.
§ 783.32 ‘‘Seaman’’ includes crew members.
The term ‘‘seaman’’ includes members of the crew such as sailors, engineers, radio operators, firemen, pursers, surgeons, cooks, and stewards if, as
is the usual case, their service is of the
type described in § 783.31. In some cases
it may not be of that type, in which
event the special provisions relating to
seamen
will
not
be
applicable
(Sternberg Dredging Co. v. Walling, 158 F.
2d 678; Cuascut v. Standard Dredging Co.,
94 F. Supp. 197; Woods Lumber Co. v.
Tobin, 199 F. 2d 455). However, an employee employed as a seaman does not
lose his status as such simply because,
as an incident to such employment, he
performs some work not connected
with operation of the vessel as a means
of transportation, such as assisting in
the loading or unloading of freight at
the beginning or end of a voyage, if the
amount of such work is not substantial.
§ 783.33 Employment ‘‘as a seaman’’ depends on the work actually performed.
Whether an employee is ‘‘employed
as a seaman’’, within the meaning of
the Act, depends upon the character of
the work he actually performs and not
on what it is called or the place where
it is performed (Walling v. Haden, 153 F.
2d 196; Cuascut v. Standard Dredging
Corp., 94 F. Supp. 197). Merely because
one works aboard a vessel (Helena Glendale Ferry Co. v. Walling, 132 F. 2d 616;
Walling v. Bay State Dredging & Contracting Co., 149 F. 2d 346), or may be
articled as a seaman (see Walling v.
Haden, supra), or performs some maritime duties (Walling v. Bay State Dredging & Contracting Co., 149 F. 2d 346; Anderson v. Manhattan Lighterage Corp.,
148 F. 2d 971) one is not employed as a
seaman within the meaning of the Act
unless one’s services are rendered primarily as an aid in the operation of the
vessel as a means of transportation, as
for example services performed substantially as an aid to the vessel in
navigation. For this reason it would
appear that employees making repairs
to vessels between navigation seasons
would not be ‘‘employed as’’ seamen
during such a period. (See Desper v.
Starved Rock Ferry Co., 342 U.S. 187; but
see Walling v. Keansburg Steamboat Co.,
162 F. 2d 405 in which the seaman exemption was allowed in the case of an
article employee provided he also
worked in the ensuing navigation period but not in the case of unarticled
employees who only worked during the
lay-up period.) For the same and other
reasons, stevedores and longshoremen
are not employed as seamen. (Knudson
v. Lee & Simmons, Inc., 163 F. 2d 95.)
Stevedores or roust-abouts traveling
aboard a vessel from port to port whose
principal duties require them to load
and unload the vessel in port would not
be employed as seamen even though
during the voyage they may perform
from time to time certain services of
the same type as those rendered by
other employees who would be regarded
as seamen under the Act.
§ 783.34 Employees aboard vessels who
are not ‘‘seamen’’.
Concessionaires and their employees
aboard a vessel ordinarily do not perform their services subject to the authority, direction, and control of the
master of the vessel, except incidentally, and their services are ordinarily
not rendered primarily as an aid in the
operation of the vessel as a means of
transportation. As a rule, therefore,
they are not employed as seamen for
purposes of the Act. Also, other employees working aboard vessels, whose
service is not rendered primarily as an
aid to the operation of the vessel as a
means of transportation are not employed as seamen (Knudson v. Lee &
Simmons, Inc., 163 F. 2d 95; Walling v.
Haden, 153 F. 2d 196, certiorari denied 32
U.S. 866). Thus, employees on floating
equipment who are engaged in the construction of docks, levees, revetments
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Wage and Hour Division, Labor
§ 783.37
or other structures, and employees engaged in dredging operations or in the
digging or processing of sand, gravel,
or other materials are not employed as
seamen within the meaning of the Act
but are engaged in performing essentially industrial or excavation work
(Sternberg Dredging Co. v. Walling, 158 F.
2d 678; Walling v. Haden, supra; Walling
v. Bay State Dredging & Contracting Co.,
149 F. 2d 346; Walling v. Great Lakes
Dredge & Dock Co., 149 F. 2d 9, certiorari denied 327 U.S. 722). Thus, ‘‘captains’’ and ‘‘deck hands’’ of launches
whose dominant work was industrial
activity performed as an integrated
part of harbor dredging operations and
not in furtherance of transportation
have been held not to be employed as
seamen within the meaning of the Act
(Cuascut v. Standard Dredging Corp. 94
F. Supp. 197).
§ 783.35 Employees serving as ‘‘watchmen’’ aboard vessels in port.
Various situations are presented with
respect to employees rendering watchman or similar service aboard a vessel
in port. Members of the crew, who
render such services during a temporary stay in port or during a brief
lay-up for minor repairs, are still employed as ‘‘seamen’’. Where the vessel
is laid up for a considerable period,
members of the crew rendering watchman or similar services aboard the vessel during this period would not appear
to be within the special provisions relating to seamen because their services
are not rendered primarily as an aid in
the operation of the vessel as a means
of transportation. See Desper v. Starved
Rock Ferry Co., 342 U.S. 187. Furthermore, employees who are furnished by
independent contractors to perform
watchman or similar services aboard a
vessel while in port would not be employed as seamen regardless of the period of time the vessel is in port, since
such service is not of the type described in § 783.31. The same considerations would apply in the case of members of a temporary or skeleton crew
hired merely to maintain the vessel
while in port so that the regular crew
may be granted shore leave. On the
other hand, licensed relief officers engaged during relatively short stays in
port whose duty it is to maintain the
ship in safe and operational condition
and who exercise the authority of the
master in his absence, including keeping the log, checking the navigation
equipment, assisting in the movement
of the vessel while in port, are employed as seamen within the meaning
of the exemptions. The same may be
true of licensed relief engineers employed under the same circumstances
whose duty it is to maintain the ship’s
auxiliary machinery in operation and
repair (see Pratt v. Alaska Packers Asso.
(N.D. Calif.) 9 WH Cases 61).
§ 783.36 Barge tenders.
Barge tenders on non-selfpropelled
barges who perform the normal duties
of their occupation, such as attending
to the lines and anchors, putting out
running and mooring lights, pumping
out bilge water, and other similar activities necessary and usual to the
navigation of barges, are considered to
be employed as ‘‘seamen’’ for the purposes of the Act unless they do a substantial amount of ‘‘non-seaman’s’’
work (Gale v. Union Bag & Paper Corp.,
116 F. (2d) 27 (C.A. 5, 1940), cert. den. 313
U.S. 559 (1941)). However, there are employees who, while employed on vessels
such as barges and lighters, are primarily or substantially engaged in performing duties such as loading and unloading or custodial service which do
not constitute service performed primarily as an aid in the operation of
these vessels as a means of transportation and consequently are not employed as ‘‘seamen’’ (McCarthy v.
Wright & Cobb Lighterage Co., 163 F. (2d)
92; Anderson v. Manhattan Lighterage
Corp., 148 F. (2d) 971, certiorari denied
326 U.S. 722; Woods Lumber Co. v. Tobin,
20 Labor Cases 66, 640 (W.D. Tenn, 1951),
aff’d, 199 F. (2d) 455). Whether an employee is on board a vessel primarily to
perform maritime services as a seaman
or loading and unloading services typical of such shore-bases personnel as
longshoremen is a question of fact and
can be determined only after reviewing
all the facts in the particular case.
§ 783.37 Enforcement policy for nonseaman’s work.
In the enforcement of the Act, an employee will be regarded as ‘‘employed
as a seaman’’ if his work as a whole
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§ 783.38
29 CFR Ch. V (7–1–19 Edition)
meets the test stated in § 783.31, even
though during the workweek he performs some work of a nature other
than that which characterizes the service of a seaman, if such nonseaman’s
work is not substantial in amount. For
enforcement purposes, the Administrator’s position is that such differing
work is ‘‘substantial’’ if it occupies
more than 20 percent of the time
worked by the employee during the
workweek.
WHAT IS AN ‘‘AMERICAN VESSEL’’
§ 783.38 Statutory definition of ‘‘American vessel’’.
The provisions of section 6(b)(2) prescribe special methods for computing
minimum wages and hours worked
under the Act which are applicable
only to seamen who are employed on
American vessels. An ‘‘American vessel’’, which would appear to signify a
vessel of the United States as distinguished from a foreign vessel, ‘‘includes’’, under the terms of the definition in section 3(p) of the Act, ‘‘any
vessel which is documented or numbered under the laws of the United
States.’’ The Department of the Treasury, Bureau of Customs and the United
States Coast Guard, respectively, are
responsible for documentation and
numbering of vessels.
§ 783.39 ‘‘Vessel’’ includes all means of
water transportation.
Since the Act does not define ‘‘vessel’’ it is appropriate to apply the
difinition of ‘‘vessel’’ as set forth in the
United States Code (1 U.S.C. 3). The
Code defines ‘‘vessel’’ as including
‘‘every description of watercraft or
other artificial contrivance used, or capable of being used, as a means of
transportation on water’’. But the Federal Boating Act of 1958, (under which
the U.S. Coast Guard is responsible for
numbering vessels) and the Documentation Regulations administered
by the Bureau of Customs, utilize this
basic definition, with the addition of
specific exclusions for ‘‘seaplanes’’ and
‘‘aircraft’’ (46 U.S.C. 527; 19 CFR 3.1(a)).
§ 783.40
‘‘Documented’’ vessel.
A vessel ‘‘documented * * * under the
laws of the United States’’ is typically
a vessel which has been registered, enrolled and licensed, or licensed by the
Bureau of Customs under the laws of
the United States (46 U.S.C. 11, 193, 251–
252, 258, 840). Although Bureau of Customs regulations provide for three
types of documentations, distinctions
between the categories of vessels subject to them are immaterial for the
purposes of the Fair Labor Standards
Act, since a vessel with any of the
three kinds of documentation is an
‘‘American vessel’’ within the section
3(p) definition. Generally, any vessel of
five net tons or more which is owned
by a citizen of the United States is
‘‘entitled to’’ documentation. Complete
information on the documentation requirements may be found in 19 CFR
part 3.
§ 783.41 ‘‘Numbered’’ vessel.
A vessel ‘‘numbered under the laws of
the United States’’ means a vessel
numbered pursuant to the provisions of
Federal law, including vessels numbered under any State numbering system approved by the Secretary of the
Department under which the U.S.
Coast Guard is operating, in accordance with section 2(c) of the Federal
Boating Act of 1958 (46 U.S.C. 527–527h).
Generally, any vessel, which is not required to have and does not have, a
valid marine document issued by the
Bureau of Customs and is propelled by
machinery of more than 10 horsepower,
whether or not such machinery is the
principal source of propulsion, is required to be numbered in conformity
with the Federal Boating Act of 1958 if
it uses the navigable waters of the
United States, its Territories, or the
District of Columbia, or is owned in a
State and uses the high seas (46 U.S.C.
527(a)). The requirements and procedures of this Act are explained in detail
in 46 CFR part 170.
§ 783.42 Vessels neither ‘‘documented’’
nor ‘‘numbered’’.
An ‘‘American vessel’’ on which employment as a seaman is subject to the
minimum wage under the provisions of
section 6(b)(2) and section 13(a)(14) is
not limited by the language of the Act
to those vessels which are ‘‘documented’’ or ‘‘numbered’’ as described
above in §§ 783.40 and 783.41. Since the
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§ 783.44
term ‘‘American vessel’’ has traditionally been applied to regularly documented vessels (see U.S. v. Rogers, 27
Fed. Cas. 890; Badger v. Entierrez, 111
U.S. 734; 18 Op. A.G. 234 (1885); 48 Am.
Jur. 40), the inclusion of numbered vessels in the statutory definition of
‘‘American vessel’’ would indicate that
the work ‘‘includes’’ is used in the
sense of ‘‘embracing’’, as an enlargement and not as a word of limitation.
The term may therefore apply to other
vessels that do not fall within the illustrations given. For example, neither
the documenting laws nor the numbering laws apply to vessels plying the
purely internal waters of a State which
do not join up with navigable waters
touching on another State (19 CFR
3.5(a)(4); 33 CFR 2.10–5), but, nevertheless, the Fair Labor Standards Act does
apply in those areas and it clearly
would not comport with the remedial
purpose of the Act to exclude from its
minimum wage provisions seamen engaged in commerce or in the production of goods for commerce in those
areas though the vessels are not documented or numbered. On the contrary,
the legislative history shows the affirmative purpose to improve, though
to a limited extent, the status of seamen (Sen. Rep. No. 145, 87th Cong., 1st
sess., p. 32, 50).
COMPUTATION OF WAGES AND HOURS
§ 783.43 Computation of seaman’s minimum wage.
Section 6(b) requires, under paragraph (2) of the subsection, that an employee employed as a seaman on an
American vessel be paid wages at not
less than the rate which will provide to
the employee, for the period covered by
the wage payment, wages which are
equal to compensation for all hours on
duty in such period at the hourly rate
prescribed for employees newly covered
by the Act’s minimum wage requirements by reason of the 1961 Amendments (see §§ 783.23 and 783.26). Although the Act takes the workweek as
the unit of time to be used in determining compliance with the minimum
wage of overtime requirements and in
applying the exemptions, Congress, in
recognition of the unique working conditions of seamen and of the customs in
the industry, made this special provision. Under section 6(b)(2) periods other
than a workweek may be used, in accordance with established customs in
the industry, as the basis for calculating wages for covered seamen provided the wages equal the compensation at the applicable minimum hourly
rate which would be due to the employee for his hours actually spent on
duty in the period. This would mean
that the wage period may properly
cover, for example, the period of a
month or of a voyage so long as the
seaman receives at the appropriate
time compensation at least equal to
the prescribed minimum rate for each
compensable hour in that pay period.
(See also § 531.26 of this chapter concerning requirements of other laws
governing calculation of wages and frequency and manner of payment.) To illustrate, where seamen have customarily been paid monthly under an arrangement to perform seamen’s duties
during stipulated periods and to be off
duty during stipulated periods during
the month, if such a seaman works 300
hours during the month and receives
his monthly compensation in an
amount equal to a payment for that
number of hours at the applicable minimum rate, there would be compliance
with the requirements of section
6(b)(2). The fact that this seaman
works a varying number of hours during the weeks comprising the monthly
period or that the monthly compensation is disbursed in two or four partial
payments to the seaman during the
month would not warrant a contrary
conclusion.
§ 783.44 Board and lodging as wages.
The wages for the period covered by
the wage payment include all remuneration for employment paid to or on
behalf of the employee for all hours actually on duty intended to be compensated by such wage payment. The
reasonable cost or fair value, as determined by the Secretary of Labor pursuant to section 3(m) of the Act, of board
and lodging furnished the employee
during such period, if customarily furnished by the employer to his employees, is also included as part of the
wages for the actual hours worked in
the period (see § 783.16). However, the
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§ 783.45
29 CFR Ch. V (7–1–19 Edition)
cost of board and lodging would not be
included as part of the wages paid to
the employee to the extent it is excluded from the employee’s wages
under terms of a bona fide collective
bargaining agreement applicable to
such employee, whether or not customarily furnished to the employee. Where
such an exclusion is not provided for in
any bona fide collective bargaining
agreement applicable to the employee,
the reasonable cost or fair value thereof, whichever is appropriate, as determined in accordance with the standards set forth in the regulations in part
531 of this chapter, is included as part
of the wage paid to such employee.
Part 531 of this chapter also contains
the official regulations and interpretations of the Department of Labor concerning the application of section 3(m)
to other facilities as well as board and
lodging furnished to an employee.
§ 783.45 Deductions from wages.
Where deductions are made from the
wages of a seaman subject to section
6(b) of the Act, consideration must be
given as to whether or not such deductions are permitted to be made when
they result in the seaman receiving
cash wages which are less than the applicable minimum wage rate for each
hour actually on duty during the period covered by the wage payments.
Such considerations are to be based
upon the principles and interpretations
governing such deductions. These are
set forth and discussed in part 531 of
this chapter. The methods of paying
the compensation required by section 6
and the application thereto of the provisions of section 3(m) of the Act,
which are set forth and explained in
the said part 531, are applicable to seamen subject to the minimum wage provisions of the Act.
§ 783.46 Hours worked.
The provisions of section 6(b)(2) of
the Act require that a seaman employed on an American vessel be paid
wages equal to compensation at not
less than the prescribed minimum wage
rate for all of the hours the employee
‘‘was actually on duty (including periods aboard ship when the employee was
on watch or was, at the direction of a
superior officer, performing work or
standing by, but not including off-duty
periods which are provided pursuant to
the employment agreement)’’. The Act
in this portion of section 6(b)(2) is reflecting concepts that are well established in the law, and existing precedents (in such cases as Armour & Co. v.
Wantock, 323 U.S. 126; Skidmore v. Swift
& Co., 323 U.S. 134; Steiner v. Mitchell,
350 U.S. 247; Mitchell v. King Packing
Co., 350 U.S. 260; Tennessee Coal, Iron &
R. Co. v. Muscoda Local N. 123, 321 U.S.
590; and General Electric Co. v. Porter,
208 F. 2d 805, certiorari denied, 347 U.S.
951, 975) would be applicable in determining what time constitutes hours
worked. See also the general discussion
of hours worked in part 785 of this
chapter.
§ 783.47
Off-duty periods.
Off-duty periods include not only
such periods as shore leave but also
generally those hours spent by a seaman on the vessel outside his watch or
normal or regular working hours and
his standby periods during which hours
he is not required to perform and does
not perform work of any kind but is
free to utilize his time for his own purpose. The fact that during such offduty periods the employee is subject to
call in case of emergency situations affecting the safety and welfare of the
vessel upon which he is employed, or of
its passengers, crew, or cargo or for
participation in life boat or fire drills
will not render such off-duty periods,
excluded by employment agreement
applicable to the employee, ‘‘hours
worked’’. Responding to such calls,
however, as well as the performance of
work in response thereto constitute
compensable work time. For further
and more detailed discussion on what
generally are regarded as ‘‘hours
worked’’ under the Act, see part 785 of
this chapter.
APPLICATION OF THE EXEMPTIONS
§ 783.48 Factors determining application of exemptions.
The application of the exemptions
provided by section 13(a)(14) and section 13(b)(6) of the Act is determined in
accordance with their language and
scope as explained in §§ 783.24, 783.25,
and 783.27, with regard to the principles
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Pt. 784
set forth in § 783.20 and the legislative
history and judicial construction outlined in §§ 783.28 through 783.30. Whether a particular employee is exempt depends on what he does, as explained in
§§ 783.31 through 783.37. Whether he is
exempt from the overtime pay provisions only or from minimum wages as
well depends on whether his employment is or is not on an American vessel, which is determined as indicated in
§§ 783.38 through 783.42. In addition, sections 13(a)(14) and 13(b)(6), like other
exemptions in the Act, apply on a
workweek basis as mentioned in § 783.43
and explained in §§ 783.49 and 783.50.
§ 783.49 Workweek unit in applying
the exemptions.
The unit of time to be used in determining the application of the exemption provided by section 13(b)(6) or
13(a)(14) to an employee is the workweek. (See Overnight Transportation Co.
v. Missel, 316 U.S. 572; Sternberg Dredging Co. v. Walling, 158 F. 2d 678.) This is
the period used in determining whether
a substantial amount of non-seaman’s
work has been performed so as to make
the
exemption
inapplicable.
See
§ 783.37. A workweek is a fixed and regularly recurring interval of 7 consecutive 24-hour periods. It may begin at
any hour of any day set by the employer and need not coincide with the
calendar week. Once the workweek has
been set it commences each succeeding
week on the same day and at the same
hour. Changing of the workweek for
the purpose of escaping the requirements of the Act is not permitted.
§ 783.50 Work exempt under another
section of the Act.
Where an employee performs work
during his workweek, some of which is
exempt under one section of the Act,
and the remainder of which is exempt
under another section or sections of
the Act, the exemptions may be combined. The employee’s combination exemption is controlled in such case by
that exemption which is narrower in
scope. For example, if part of his work
is exempt from both minimum wage
and overtime compensation under one
section of the Act, and the rest is exempt only from the overtime pay requirements under section 13(b)(6), the
employee is exempt that week from the
overtime pay provisions but not from
the minimum wage requirements.
§ 783.51 Seamen on a fishing vessel.
In extending the minimum wage to
seamen on American vessels by limiting the exemption from minimum
wages and overtime provided by section 13(a)(14) of the Act to ‘‘any employee employed as a seaman on a vessel other than an American vessel,’’
and at the same time extending the
minimum wage to ‘‘onshore’’ but not
‘‘offshore’’ operations concerned with
aquatic products, the Congress, in the
1961 Amendments to the Act, did not
indicate any intent to remove the
crews of fishing vessels engaged in operations named in section 13(a)(5) from
the exemption provided by that section. The exemption provided by section 13(a)(14), and the general exemption in section 13(b)(6) from overtime
for ‘‘any employee employed as a seaman’’ (whether or not on an American
vessel) apply, in general, to employees,
working aboard vessels, whose services
are rendered primarily as an aid to
navigation (§§ 783.31–783.37). It appears,
however, that it is not the custom or
practice in the fishing industry for a
fishing vessel to have two crews; namely, a fishing crew whose duty it is primarily to fish and to perform other duties incidental thereto and a navigational crew whose duty it is primarily
to operate the boat. Where, as is the
typical situation, there is but one crew
which performs all these functions, the
section 13(a)(5) exemption from both
the minimum wage and the overtime
provisions would apply to its members.
For a further explanation of the fishery
exemption see part 784 of this chapter.
PART 784—PROVISIONS OF THE
FAIR LABOR STANDARDS ACT
APPLICABLE TO FISHING AND
OPERATIONS
ON
AQUATIC
PRODUCTS
Subpart A—General
INTRODUCTORY
Sec.
784.0
784.1
784.2
Purpose.
General scope of the Act.
Matters discussed in this part.
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29 CFR Ch. V (7–1–19 Edition)
784.3 Matters discussed in other interpretations.
784.4 Significance of official interpretations.
784.5 Basic support for interpretations.
784.6 Interpretations made, continued, and
superseded by this part.
SOME BASIC DEFINITIONS
784.7 Definition of terms used in the Act.
784.8 ‘‘Employer,’’ ‘‘employee,’’ and ‘‘employ.’’
784.9 ‘‘Person.’’
784.10 ‘‘Enterprise.’’
784.11 ‘‘Establishment.’’
784.12 ‘‘Commerce.’’
784.13 ‘‘Production.’’
784.14 ‘‘Goods.’’
784.15 ‘‘State.’’
784.16 ‘‘Regular rate.’’
GENERAL CHARACTER AND SCOPE OF THE
SECTION 13(a)(5) EXEMPTION
APPLICATION OF COVERAGE AND EXEMPTIONS
PROVISIONS OF THE ACT
784.17 Basic coverage in general.
784.18 Commerce activities of employees.
784.19 Commerce activities of enterprise in
which employee is employed.
784.20 Exemptions from the Act’s provisions.
784.21 Guiding principles for applying coverage and exemption provisions.
Subpart B—Exemptions Provisions Relating
to Fishing and Aquatic Products
THE STATUTORY PROVISIONS
784.100
784.101
784.113 Work related to named operations
performed in off- or dead-season.
784.114 Application of exemptions on a
workweek basis.
784.115 Exempt and noncovered work performed during the workweek.
784.116 Exempt and nonexempt work in the
same workweek.
784.117 Combinations of exempt work.
The section 13(a)(5) exemption.
The section 13(b)(4) exemption.
LEGISLATIVE HISTORY OF EXEMPTIONS
784.102 General legislative history.
784.103 Adoption of the exemption in the
original 1938 Act.
784.104 The 1949 amendments.
784.105 The 1961 amendments.
PRINCIPLES APPLICABLE TO THE TWO
EXEMPTIONS
784.106 Relationship of employee’s work to
the named operations.
784.107 Relationship of employee’s work to
operations on the specified aquatic products.
784.108 Operations not included in named
operations on forms of aquatic ‘‘life.’’
784.109 Manufacture of supplies for named
operations is not exempt.
784.110 Performing operations both on nonaquatic products and named aquatic
products.
784.111 Operations on named products with
substantial amounts of other ingredients
are not exempt.
784.112 Substantial amounts of nonaquatic
products; enforcement policy.
784.118 The exemption is intended for work
affected by natural factors.
784.119 Effect of natural factors on named
operations.
784.120 Application of exemption to ‘‘offshore’’ activities in general.
784.121 Exempt fisheries operations.
784.122 Operations performed as an integrated part of fishing.
784.123 Operations performed on fishing
equipment.
784.124 Going to and returning from work.
784.125 Loading and unloading.
784.126 Operation of the fishing vessel.
784.127 Office and clerical employees under
section 13(a)(5).
FIRST PROCESSING, CANNING, OR PACKING OF
MARINE PRODUCTS UNDER SECTION 13(a)(5)
784.128 Requirements for exemption of first
processing, etc., at sea.
784.129 ‘‘Marine products.’’
784.130 ‘‘At sea.’’
784.131 ‘‘As an incident to, or in conjunction
with,’’ fishing operations.
784.132 The exempt operations.
784.133 ‘‘First processing.’’
784.134 ‘‘Canning.’’
784.135 ‘‘Packing.’’
GENERAL CHARACTER AND SCOPE OF THE
SECTION 13(b)(4) EXEMPTION
784.136 ‘‘Shore’’ activities exempted under
section 13(b)(4).
784.137 Relationship of exemption to exemption for ‘‘offshore’’ activities.
784.138 Perishable state of the aquatic product as affecting exemption.
784.139 Scope of exempt operations in general.
784.140 Fabrication and handling of supplies
for use in named operations.
784.141 Examples of nonexempt employees.
‘‘CANNING’’
784.142 Meaning and scope of ‘‘canning’’ as
used in section 13(b)(4).
784.143 ‘‘Necessary preparatory operations.’’
784.144 Preliminary processing by the canner.
784.145 Preliminary processing by another
employer as part of ‘‘canning.’’
784.146 ‘‘Subsequent operations.’’
784.147 Employees ‘‘employed in’’ canning.
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Wage and Hour Division, Labor
§ 784.3
PROCESSING, FREEZING, AND CURING
784.148 General scope of processing, freezing, and curing activities.
784.149 Typical operations that may qualify
for exemption.
784.150 Named operations performed on previously processed aquatic products.
784.151 Operations performed after product
is rendered nonperishable.
784.152 Operations performed on by-products.
MARKETING, STORING, PACKING FOR SHIPMENT,
AND DISTRIBUTING
784.153 General scope of named operations.
784.154 Relationship to other operations as
affecting exemption.
784.155 Activities performed in wholesale establishments.
APPLICATION OF SECTION 13(b)(4) IN CERTAIN
ESTABLISHMENTS
784.156 Establishments exclusively devoted
to named operations.
AUTHORITY: Secs. 1–19, 52 Stat. 1060, as
amended, 75 Stat. 65; 29 U.S.C. 201–219.
SOURCE: 35 FR 13342, Aug. 20, 1970, unless
otherwise noted.
Subpart A—General
INTRODUCTORY
§ 784.0 Purpose.
It is the purpose of this part to provide an official statement of the views
of the Department of Labor with respect to the meaning and application of
sections 13(a)(5) and 13(b)(4) of the Fair
Labor Standards Act, which govern the
application of the minimum wage and
overtime pay requirements of the Act
to employees engaged in fishing and related activities and in operations on
aquatic products. It is an objective of
this part to make available in one
place, the interpretations of law relating to such employment which will
guide the Secretary of Labor and the
Administrator in carrying out their responsibilities under the Act.
§ 784.1 General scope of the Act.
The Fair Labor Standards Act, as
amended, is a Federal statute of general application which establishes minimum wage, overtime pay, equal pay,
and child labor requirements that
apply as provided in the Act. Employers and employees in enterprises en-
gaged in fishing and related activities,
or in operations on aquatic products on
shore, need to know how the Act applies to employment in these enterprises so that they may understand
their rights and obligations under the
law. All employees whose employment
has the relationship to interstate or
foreign commerce which the Act specifies are subject to the prescribed labor
standards unless specifically exempted
from them. Employers having such employees are required to comply with
the Act’s provisions in this regard and
with specified recordkeeping requirements contained in part 516 of this
chapter. The law authorizes the Department of Labor to investigate for
compliance and, in the event of violations, to supervise the payment of unpaid minimum wages or unpaid overtime compensation owing to any employee. The law also provides for enforcement in the courts.
§ 784.2 Matters discussed in this part.
This part discusses generally the provisions of the Act which govern its application to employers and employees
in enterprises and establishments of
the fisheries, seafood processing, and
related industries. It discusses in some
detail those exemption provisions of
the Act in sections 13(a)(5) and 13(b)(4)
which refer specifically to employees
employed in described activities with
respect to seafood and other forms of
aquatic life.
§ 784.3 Matters discussed in other interpretations.
Interpretations having general application to others subject to the law, as
well as to fishermen and seafood canners, processors, or distributors and
their employees, have been issued on a
number of subjects of general interest.
These will be found in other parts of
this chapter. Reference should be made
to them for guidance on matters which
they discuss in detail, which this part
does not undertake to do. They include
part 776 of this chapter, discussing coverage; part 531 of this chapter, discussing payment of wages; part 778 of
this chapter, discussing computation
and payment of overtime compensation; part 785 of this chapter, discussing the calculation of hours
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§ 784.4
29 CFR Ch. V (7–1–19 Edition)
worked; and part 800 of this chapter,
discussing equal pay for equal work.
Reference should also be made to subpart G of part 570 of this chapter, which
contains the official interpretations of
the child labor provisions of the Act.
§ 784.4 Significance of official interpretations.
The regulations in this part contain
the official interpretations of the Department of Labor pertaining to the
exemptions provided in sections 13(a)(5)
and 13(b)(4) of the Fair Labor Standards Act of 1938, as amended. It is intended that the positions stated will
serve as ‘‘a practical guide to employers and employees as to how the office
representing the public interest in its
enforcement will seek to apply it’’
(Skidmore v. Swift, 323 U.S. 134, 138).
These interpretations indicate the construction of the law which the Secretary of Labor and the Administrator
believe to be correct and which will
guide them in the performance of their
duties under the Act, unless and until
they are otherwise directed by authoritative decisions of the courts or conclude upon re-examination of an interpretation that it is incorrect. The interpretations contained herein may be
relied upon in accordance with section
10 of the Portal-to-Portal Act (29
U.S.C. 251–262), so long as they remain
effective and are not modified, amended, rescinded, or determined by judicial
authority to be incorrect.
§ 784.5 Basic support for interpretations.
The ultimate decisions on interpretations of the Act are made by the courts
(Mitchell v. Zachry, 362 U.S. 310;
Kirschbaum v. Walling, 316 U.S. 517).
Court decisions supporting interpretations contained in this part are cited
where it is believed they may be helpful. On matters which have not been
determined by the courts, it is necessary for the Secretary of Labor and
the Administrator to reach conclusions
as to the meaning and the application
of provisions of the law in order to
carry out their responsibilities of administration
and
enforcement
(Skidmore v. Swift, 323 U.S. 134). In order
that these positions may be made
known to persons who may be affected
by them, official interpretations are
issued by the Administrator on the advice of the Solicitor of Labor, as authorized by the Secretary (Reorganization Plan 6 of 1950, 64 Stat. 1263; Gen.
Ord. 45 A, May 24, 1950; 15 FR 3290). As
included in the regulations in this part,
these interpretations are believed to
express the intent of the law as reflected in its provisions and as construed by the courts and evidenced by
its legislative history. References to
pertinent legislative history are made
in this part where it appears that they
will contribute to a better understanding of the interpretations.
§ 784.6 Interpretations made, continued, and superseded by this part.
On and after publication of this part
784 in the FEDERAL REGISTER, the interpretations contained therein shall be in
effect, and shall remain in effect until
they are modified, rescinded, or withdrawn. This part supersedes and replaces the interpretations previously
published in the FEDERAL REGISTER
and Code of Federal Regulations as
part 784 of this chapter. Prior opinions,
rulings, and interpretations and prior
enforcement policies which are not inconsistent with the interpretations in
this part or with the Fair Labor Standards Act as amended are continued in
effect; all other opinions, rulings, interpretations, and enforcement policies
on the subjects discussed in the interpretations in this part are rescinded
and withdrawn. The interpretations in
this part provide statements of general
principles applicable to the subjects
discussed and illustrations of the application of these principles to situations
that frequently arise. They do not and
cannot refer specifically to every problem which may be met by employers
and employees in the application of the
Act. The omission to discuss a particular problem in this part or in interpretations supplementing it should not
be taken to indicate the adoption of
any position by the Secretary of Labor
or the Administrator with respect to
such problem or to constitute an administrative interpretation or practice
or enforcement policy. Questions on
matters not fully covered by this bulletin may be addressed to the Administrator of the Wage and Hour Division,
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Wage and Hour Division, Labor
§ 784.10
U.S. Department of Labor, Washington,
DC 20210, or to any Regional Office of
the Division.
SOME BASIC DEFINITIONS
§ 784.7 Definition of terms used in the
Act.
The meaning and application of the
provisions of law discussed in this part
depend in large degree on the definitions of terms used in these provisions.
The Act itself defines some of these
terms. Others have been defined and
construed in decisions of the courts. In
the following sections some of these
basic definitions are set forth for ready
reference in connection with the part’s
discussion of the various provisions in
which they appear. These definitions
and their application are further considered in other interpretative bulletins to which reference is made, and
in the sections of this part where the
particular provisions containing the
defined terms are discussed.
§ 784.8 ‘‘Employer,’’
‘‘employ.’’
‘‘employee,’’
and
The Act’s major provisions impose
certain requirements and prohibitions
on every ‘‘employer’’ subject to their
terms. The employment by an ‘‘employer’’ of an ‘‘employee’’ is, to the extent specified in the Act, made subject
to minimum wage and overtime pay requirements and to prohibitions against
the employment of oppressive child
labor. The Act provides its own definitions of ‘‘employer,’’ ‘‘employee’’ and
‘‘employ,’’ under which ‘‘economic reality’’ rather than ‘‘technical concepts’’ determines whether there is employment subject to its terms (Goldberg
v. Whitaker House Cooperative, 366 U.S.
28; United States v. Silk, 331 U.S. 704;
Rutherford Food Corp. v. McComb, 331
U.S. 722). An ‘‘employer,’’ as defined in
section 3(d) of the Act, ‘‘includes any
person acting directly or indirectly in
the interest of an employer in relation
to an employee but shall not include
the United States or any State or political subdivision of a State or any
labor organization (other than when
acting as an employer), or anyone acting in the capacity of officer or agent
of such labor organization.’’ An ‘‘employee,’’ as defined in section 3(e) of
the Act, ‘‘includes any individual employed by an employer,’’ and ‘‘employ,’’ as used in the Act, is defined in
section 3(g) to include ‘‘to suffer or permit to work.’’ It should be noted, as explained in part 791 of this chapter, dealing with joint employment that in appropriate circumstances two or more
employers may be jointly responsible
for compliance with the statutory requirements applicable to employment
of a particular employee. It should also
be noted that ‘‘employer,’’ ‘‘enterprise,’’ and ‘‘establishment’’ are not
synonymous terms, as used in the Act.
An employer may have an enterprise
with more than one establishment, or
he may have more than one enterprise
in which he employs employees within
the meaning of the Act. Also, there
may be different employers who employ employees in a particular establishment or enterprise.
§ 784.9
‘‘Person.’’
As used in the Act (including the definition of ‘‘enterprise’’ set forth below
in § 784.10), ‘‘person’’ is defined as
meaning ‘‘an individual, partnership,
association,
corporation,
business
trust, legal representative, or any organized group of persons’’ (Act, section
3(a)).
§ 784.10
‘‘Enterprise.’’
The term ‘‘enterprise’’ which may, in
some situations, be pertinent in determining coverage of this Act to employees employed by employers engaged in
the procurement, processing, or distribution of aquatic products, is defined in section 3(r) of the Act, section
3(r) states:
Enterprise means the related activities
performed (either through unified operation
or common control) by any person or persons
for a common business purpose, and includes
all such activities whether performed in one
or more establishments or by one or more
corporate or other organizational units including departments of an establishment operated through leasing arrangements, but
shall not include the related activities performed for such enterprise by an independent
contractor * * *.
The scope and application of this definition is discussed in part 776 of this
chapter.
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§ 784.11
29 CFR Ch. V (7–1–19 Edition)
§ 784.11 ‘‘Establishment.’’
As used in the Act, the term ‘‘establishment’’, which is not specially defined therein, refers to a ‘‘distinct
physical place of business’’ rather than
to ‘‘an entire business or enterprise’’
which may include several separate
places of business. This is consistent
with the meaning of the term as it is
normally used in business and in government, is judicially settled, and has
been recognized in the Congress in the
course of enactment of amendatory
legislation (Phillips v. Walling, 324 U.S.
490; Mitchell v. Bekins Van & Storage
Co., 352 U.S. 1027; 95 Cong. Rec. 12505,
12579, 14877; H. Rept. No. 1453, 81st
Cong., first session, p. 25). This is the
meaning of the term as used in sections
3(r) and 3(s) of the Act.
§ 784.12 ‘‘Commerce.’’
‘‘Commerce’’ as used in the Act includes interstate and foreign commerce. It is defined in section 3(b) of
the Act to mean ‘‘trade, commerce,
transportation, transmission, or communication among the several States
or between any State and any place
outside thereof.’’ (For the definition of
‘‘State,’’ see § 784.15.) The application
of this definition and the kinds of activities which it includes are discussed
at length in part 776 of this chapter
dealing with the general coverage of
the Act.
§ 784.13 ‘‘Production.’’
To understand the meaning of ‘‘production’’ of goods for commerce as used
in the Act it is necessary to refer to
the definition in section 3(j) of the
term ‘‘produced.’’ A detailed discussion
of the application of the term as defined is contained in part 776 of this
chapter, dealing with the general coverage of the Act. Section 3(j) provides
that ‘‘produced’’ as used in the Act
‘‘means
produced,
manufactured,
mined, handled, or in any other manner worked on in any State; and for the
purposes of this Act an employee shall
be deemed to have been engaged in the
production of goods if such employee
was employed in producing, manufacturing, mining, handling, transporting,
or in any other manner working on
such goods, or in any closely related
process or occupation directly essen-
tial to the production thereof, in any
State.’’ (For the definition of ‘‘State’’
see § 784.15.)
§ 784.14 ‘‘Goods.’’
The definition in section 3(i) of the
Act states that ‘‘goods,’’ as used in the
Act, means ‘‘goods (including ships and
marine equipment), wares, products,
commodities, merchandise, or articles
or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after
their delivery into the actual physical
possession of the ultimate consumer
thereof other than a producer, manufacturer, or processor thereof.’’ Part
776 of this chapter, dealing with the
general coverage of the Act, contains a
detailed discussion of the application
of this definition and what is included
in it.
§ 784.15 ‘‘State.’’
As used in the Act, ‘‘State’’ means
‘‘any State of the United States or the
District of Columbia or any Territory
or possession of the United States’’
(Act, section 3(c)). The application of
this definition in determining questions of ‘‘coverage under the Act’s definition of ‘‘commerce’’ and ‘‘produced’’
(see §§ 784.12, 784.13) is discussed in part
776 of this chapter, dealing with general coverage.
§ 784.16 ‘‘Regular rate.’’
As explained in part 778 of this chapter, dealing with overtime compensation, employees subject to the overtime pay provisions of the Act must
generally receive for their overtime
work in any workweek as provided in
the Act not less than one and one-half
times their regular rates of pay. Section 7(e) of the Act defines the term
‘‘regular rate’’ ‘‘to include all remuneration for employment paid to, or on
behalf of, the employee’’ except certain
payments which are expressly described in and excluded by the statutory definition. This definition, which
is discussed at length in part 778 of this
chapter, determines the regular rate
upon which time and one-half overtime
compensation must be computed under
section 7(a) of the Act for employees
within its general coverage who are not
exempt from the overtime provisions
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Wage and Hour Division, Labor
§ 784.20
under either of the fishery and seafood
exemptions
provided
by
sections
13(a)(5) and 13(b)(4) or under some other
exemption contained in the Act.
APPLICATION OF COVERAGE AND
EXEMPTIONS PROVISIONS OF THE ACT
§ 784.17
Basic coverage in general.
Except as otherwise provided in specific exemptions, the minimum wage,
overtime pay, and child labor standards of the Act are generally applicable
to employees who engage in specified
activities concerned with interstate or
foreign commerce. The employment of
oppressive child labor in or about establishments producing goods for such
commerce is also restricted by the Act.
The monetary and child labor standards of the Act are also generally applicable to other employees, not specifically exempted, who are employed in
specified enterprises engaged in such
commerce or in the production of goods
for such commerce. The employer must
observe the monetary standards with
respect to all such employees in his
employ except those who may be denied one or both of these benefits by
virtue of some specific exemption provision of the Act, such as section
13(a)(5) or 13(b)(4). It should be noted
that enterprises having employees subject to these exemptions may also have
other employees who may be exempt
under section 13(a)(1) of the Act, subject to conditions specified in regulations, as employees employed in a bona
fide executive, administrative, or professional capacity, or in the capacity of
outside salesman. The regulations governing these exemptions are set forth
and explained in part 541 of this chapter.
§ 784.18 Commerce activities of employees.
The Fair Labor Standards Act has
applied since 1938 to all employees, not
specifically exempted, who are engaged
(a) in interstate or foreign commerce
or (b) in the production of goods for
such commerce, which is defined to include any closely related process or occupation directly essential to such production (29 U.S.C. 206(a), 207(a); and see
§§ 784.12 to 784.15 for definitions governing the scope of this coverage). In
general, employees of businesses concerned with fisheries and with operations on seafood and other aquatic
products are engaged in interstate or
foreign commerce, or in the production
of goods for such commerce, as defined
in the Act, and are subject to the Act’s
provisions except as otherwise provided
in sections 13(a)(5) and 13(b)(4) or other
express exemptions. A detailed discussion of the activities in commerce or in
the production of goods for commerce
which will bring an employee under the
Act is contained in part 776 of this
chapter, dealing with general coverage.
§ 784.19 Commerce activities of enterprise in which employee is employed.
Under amendments to the Fair Labor
Standards Act employees not covered
by reason of their personal engagement
in interstate commerce activities, as
explained in § 784.18, are nevertheless
brought within the coverage of the Act
if they are employed in an enterprise
which is defined in section 3(s) of the
Act as an enterprise engaged in commerce or in the production of goods for
commerce. Such employees, if not exempt from minimum wages and overtime pay under section 13(a)(5) or exempt from overtime pay under section
13(b)(4), will have to be paid in accordance with the monetary standards of
the Act unless expressly exempt under
some other provision. This would generally be true of employees employed
in enterprises and by establishments
engaged in the procurement, processing, marketing, or distribution of
seafood and other aquatic products,
where the enterprise has an annual
gross sales volume of not less than
$250,000. Enterprise coverage is more
fully discussed in part 776 of this chapter, dealing with general coverage.
§ 784.20 Exemptions
provisions.
from
the
The Act provides a number of specific
exemptions from the general requirements previously described. Some are
exemptions from the overtime provisions only. Several are exemptions
from both the minimum wage and the
overtime requirements of the Act. Finally, there are some exemptions from
all three—minimum wage, overtime
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§ 784.21
29 CFR Ch. V (7–1–19 Edition)
pay, and child labor requirements. An
examination of the terminology in
which the exemptions from the general
coverage of the Fair Labor Standards
Act are stated discloses language patterns which reflect congressional intent. Thus, Congress specified in varying degree the criteria for application
of each of the exemptions and in a
number of instances differentiated as
to whether employees are to be exempt
because they are employed by a particular kind of employer, employed in
a particular type of establishment, employed in a particular industry, employed in a particular capacity or occupation or engaged in a specified operation. (See 29 U.S.C. 203(d); 207 (b), (c),
(i); 213 (a), (b), (c), (d). And see Addison
v. Holly Hill, 322 U.S. 607; Mitchell v.
Trade Winds, Inc., 289 F. 2d 278; Mitchell
v. Stinson, 217 F. 2d (210). In general
there are no exemptions from the child
labor requirements that apply in enterprises or establishments engaged in
fishing or in operations on aquatic
products (see part 570, subpart G, of
this chapter). Such enterprises or establishments will, however, be concerned with the exemption from overtime pay in section 13(b)(4) of the Act
for employees employed in specified
‘‘on-shore’’ operations (see § 784.101),
and the exemption from minimum
wages and overtime pay provided by
section 13(a)(5) for employees employed
in fishing, fish-farming, and other specified ‘‘off-shore’’ operations on aquatic
products. These exemptions, which are
subject to the general rules stated in
§ 784.21, are discussed at length in subpart B of this part 784.
§ 784.21 Guiding principles for applying coverage and exemption provisions.
It is clear that Congress intended the
Fair Labor Standards Act to be broad
in its scope. ‘‘Breadth of coverage is
vital to its mission’’ (Powell v. U.S.
Cartridge Co., 339 U.S. 497). An employer
who claims an exemption under the
Act has the burden of showing that it
applies (Walling v. General Industries
Co., 330 U.S. 545; Mitchell v. Kentucky
Finance Co., 359 U.S. 290: Tobin v. Blue
Channel Corp., 198 F. 2d 245, approved in
Mitchell v. Myrtle Grove Packing Co., 350
U.S. 891; Fleming v. Hawkeye Pearl But-
ton Co., 113 F. 2d 52). Conditions specified in the language of the Act are
‘‘explicit prerequisites to exemption’’
(Arnold v. Kanowsky, 361 U.S. 388). In
their application, the purpose of the
exemption as shown in its legislative
history as well as its language should
be given effect. However, ‘‘the details
with which the exemptions in this Act
have been made preclude their enlargement by implication’’ and ‘‘no matter
how broad the exemption, it is meant
to apply only to’’ the specified activities (Addison v. Holly Hill, 322 U.S. 607;
Maneja v. Waialua, 349 U.S. 254). Exemptions provided in the Act ‘‘are to
be narrowly construed against the employer seeking to assert them’’ and
their application limited to those who
come ‘‘plainly and unmistakably within their terms and spirit.’’ This construction of the exemptions is necessary to carry out the broad objectives for which the Act was passed
(Phillips v. Walling, 324 U.S. 490; Mitchell
v. Kentucky Finance Co., supra; Arnold
v. Kanowsky, supra; Calaf v. Gonzales,
127 F. 2d 934; Bowie v. Gonzales, 117 F. 2d
11; Mitchell v. Stinson, 217 F. 2d 210;
Fleming v. Hawkeye Pearl Button Co., 113
F. 2d 52).
Subpart B—Exemptions Provisions
Relating to Fishing and Aquatic Products
THE STATUTORY PROVISIONS
§ 784.100
tion.
The section 13(a)(5) exemp-
Section 13(a)(5) grants an exemption
from both the minimum wage and the
overtime requirements of the Act and
applies to ‘‘any employee employed in
the catching, taking, propagating, harvesting, cultivating, or farming of any
kind of fish, shellfish, crustacea,
sponges, seaweeds, or other aquatic
forms of animal and vegetable life, or
in the first processing, canning, or
packing of such marine products at sea
as an incident to, or in conjunction
with, such fishing operations, including
the going to and returning from work
and loading and unloading when performed by any such employee.’’
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Wage and Hour Division, Labor
§ 784.103
LEGISLATIVE HISTORY OF EXEMPTIONS
the Act as between canning employees
and employees employed in other processing, marketing, and distributing of
aquatic products on shore, to whom
minimum wage protection, formerly
provided only for canning employees,
was extended by this action. The 1961
amendments, however, left employees
employed in fishing, in fish farming,
and in related occupations concerned
with procurement of aquatic products
from nature, under the existing exemption from minimum wages as well as
overtime pay.
§ 784.102 General legislative history.
(a) As orginally enacted in 1938, the
Fair Labor Standards Act provided an
exemption from both the minimum
wage requirements of section 6 and the
overtime pay requirements of section 7
which was made applicable to ‘‘any employee employed in the catching, taking, harvesting, cultivating, or farming
of any kind of fish, shellfish, crustacea,
sponges, seaweeds or other aquatic
forms of animal and vegetable life, including the going to and returning
from work and including employment
in the loading, unloading, or packing of
such products for shipment or in propagating, processing, marketing, freezing, canning, curing, storing, or distributing the above products or by
products thereof’’ (52 Stat. 1060, sec.
13(a)(5)).
(b) In 1949 the minimum wage was extended to employees employed in canning such products by deleting the
word ‘‘canning’’ from the above exemption, adding the parenthetical phrase
‘‘(other than canning)’’ after the word
‘‘processing’’ therein, and providing a
new exemption in section 13(b)(4), from
overtime pay provisions only, applicable to ‘‘any employee employed in the
canning of any kind of fish, shellfish,
or other aquatic forms of animal or
vegetable life, or any byproduct thereof’’. All other employees included in
the original minimum wage and overtime exemption remained within it (63
Stat. 910).
(c) By the Fair Labor Standards
Amendments of 1961, both these exemptions were further revised to read as
set forth in §§ 784.100 and 784.101. The effect of this change was to provide a
means of equalizing the application of
§ 784.103 Adoption of the exemption in
the original 1938 Act.
Although in the course of consideration of the legislation in Congress before passage in 1938, provisions to exempt employment in fisheries and
aquatic products activities took various forms, section 13(a)(5), as drafted
by the conference committee and finally approved, followed the language
of an amendment adopted during consideration of the bill by the House of
Representatives on May 24, 1938, which
was proposed by Congressman Bland of
Virginia. He had earlier on the same
day, offered an amendment which had
as its objective the exemption of the
‘‘fishery industry,’’ broadly defined.
The amendment had been defeated (83
Cong. Rec. 7408), as had an amendment
subsequently offered by Congressman
Mott of Oregon (to a pending amendment proposed by Congressman Coffee
of Nebraska) which would have provided an exemption for ‘‘industries engaged in producing, processing, distributing, or handling * * * fishery or seafood products which are seasonal or
perishable’’ (83 Cong. Rec. 7421–7423).
Against this background, when Congressman Bland offered his amendment
which ultimately became section
13(a)(5) of the Act he took pains to explain: ‘‘This amendment is not the
same. In the last amendment I was trying to define the fishery industry. I am
now dealing with those persons who are
exempt, and I call the attention of the
Committee to the language with respect to the employment of persons in
agriculture * * * I am only asking for
the seafood and fishery industry that
which has been done for agriculture.’’
It was after this explanation that the
§ 784.101 The section 13(b)(4) exemption.
Section 13(b)(4) grants an exemption
only from the overtime requirements
of the Act and applies to ‘‘any employee employed in the canning, processing, marketing, freezing, curing,
storing, packing for shipment, or distributing of any kind of fish shellfish,
or other aquatic forms of animal or
vegetable life, or any byproduct thereof.’’
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§ 784.104
29 CFR Ch. V (7–1–19 Edition)
amendment was adopted (83 Cong. Rec.
7443). When the conference committee
included in the final legislation this
provision from the House bill, it omitted from the bill another House provision granting an hours exemption for
employees ‘‘in any place of employment’’ where the employer was ‘‘engaged in the processing of or in canning fresh fish or fresh seafood’’ and
the provision of the Senate bill providing an hours exemption for employees ‘‘employed in connection with’’ the
canning or other packing of fish, etc.
(see Mitchell v. Stinson, 217 F. 2d 210;
McComb v. Consolidated Fisheries, 75 F.
Supp. 798). The indication in this legislative history that the exemption in its
final form was intended to depend upon
the employment of the particular employee in the specified activities is in
accord with the position of the Department of Labor and the weight of judicial authority.
§ 784.104 The 1949 amendments.
In deleting employees employed in
canning aquatic products from the section 13(a)(5) exemption and providing
them with an exemption in like language from the overtime provisions
only in section 13(b)(4), the conferees
on the Fair Labor Standards Amendments of 1949 did not indicate any intention to change in any way the category of employees who would be exempt as ‘‘employed in the canning of’’
the aquatic products. As the Supreme
Court has pointed out in a number of
decisions, ‘‘When Congress amended
the Act in 1949 it provided that pre-1949
rulings and interpretations by the Administrator should remain in effect unless inconsistent with the statute as
amended 63 Stat. 920’’ (Mitchell v. Kentucky Finance Co., 359 U.S. 290). In connection with this exemption the conference report specifically indicates
what operations are included in the
canning process (see § 784.142). In a case
decided before the 1961 amendments to
the Act, this was held to ‘‘indicate that
Congress intended that only those employees engaged in operations physically essential in the canning of fish,
such as cutting the fish, placing it in
cans, labelling and packing the cans for
shipment are in the exempt category’’
(Mitchell v. Stinson, 217 F. 2d 210).
§ 784.105
The 1961 amendments.
(a) The statement of the Managers on
the Part of the House in the conference
report on the Fair Labor Standards
Amendments of 1961 (H. Rept. No. 327,
87th Cong., first session, p. 16) refers to
the fact that the changes made in sections 13(a)(5) and 13(b)(4) originated in
the Senate amendment to the House
bill and were not in the bill as passed
by the House. In describing the Senate
provision which was retained in the
final legislation, the Managers stated
that it ‘‘changes the exemption in the
act for’’ the operations transferred to
section 13(b)(4) from section 13(a)(5)
‘‘from a minimum wage and overtime
exemption to an overtime only exemption.’’ They further stated: ‘‘The
present complete exemption is retained
for employees employed in catching,
propagating, taking, harvesting, cultivating, or farming fish and certain
other marine products, or in the first
processing, canning, or packing such
marine products at sea as an incident
to, or in conjunction with, such fishing
operations, including the going to and
returning from work and loading and
unloading when performed by such an
employee.’’ In the report of the Senate
committee on the provision included in
the Senate bill (S. Rept. No. 145, 87th
Cong., first session, p. 33), the committee stated: ‘‘The bill would modify
the minimum wage and overtime exemption in section 13(a)(5) of the Act
for employees engaged in fishing and in
specified activities on aquatic products.’’ In further explanation, the report states that the bill would amend
this section ‘‘to remove from this exemption those so-called on-shore activities and leave the exemption applicable to ‘offshore’ activities connected
with the procurement of the aquatic
products, including first processing,
canning, or packing at sea performed
as an incident to fishing operations, as
well as employment in loading and unloading such products for shipment
when performed by any employee engaged in these procurement operations.’’ It is further stated in the report that ‘‘persons who are employed
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Wage and Hour Division, Labor
§ 784.106
in the activities removed from the section 13(a)(5) exemption will have minimum wage protection but will continue to be exempt from the Act’s overtime requirements under an amended
section 13(b)(4). The bill will thus have
the effect of placing fish processing and
fish canning on the same basis under
the Act. There is no logical reason for
treating them differently and their inclusion within the Act’s protection is
desirable and consistent with its objectives.’’
(b) The language of the Managers on
the Part of the House in the conference
report and of the Senate committee in
its report, as quoted above, is consistent with the position supported by
the earlier legislative history and by
the courts, that the exemption of an
employee under these provisions of the
Act depends on what he does. The Senate report speaks of the exemption ‘‘for
employees engaged in fishing and in
specified activities’’ and of the ‘‘activities now enumerated in this section.’’ While this language confirms
the legislative intent to continue to
provide exemptions for employees employed in specified activities rather
than to grant exemption on an industry, employer, or establishment basis
(see Mitchell v. Trade Winds, Inc., 289 F.
2d 278), the report also refers with apparent approval to certain prior judicial interpretations indicating that the
list of activities set out in the exemption provisions is intended to be ‘‘a
complete catalog of the activities involved in the fishery industry’’ and
that an employee to be exempt, need
not engage directly in the physical acts
of catching, processing, canning, etc. of
aquatic products which are included in
the operation specifically named in the
statute (McComb v. Consolidated Fisheries Co., 174 F. 2d 74). It was stated
that an interpretation of section
13(a)(5) and section 13(b)(4) which would
include within their purview ‘‘any employee who participates in activities
which are necessary to the conduct of
the operations specifically described in
the exemptions’’ is ‘‘consistent with
the congressional purpose’’ of the 1961
amendments. (See Sen. Rep. No. 145, 87
Cong., first session, p. 33; Statement of
Representative Roosevelt, 107 Cong.
Rec. (daily ed.) p. 6716, as corrected
May 4, 1961.) From this legislative history the intent is apparent that the application of these exemptions under the
Act as amended in 1961 is to be determined by the practical and functional
relationship of the employee’s work to
the performance of the operations specifically named in section 13(a)(5) and
section 13(b)(4).
PRINCIPLES APPLICABLE TO THE TWO
EXEMPTIONS
§ 784.106 Relationship of employee’s
work to the named operations.
It is clear from the language of section 13(a)(5) and section 13(b)(4) of the
Act, and from their legislative history
as discussed in §§ 784.102–784.105, that
the exemptions which they provide are
applicable only to those employees who
are ‘‘employed in’’ the named operations. Under the Act as amended in
1961 and in accordance with the evident
legislative intent (see § 784.105), an employee will be considered to be ‘‘employed in’’ an operation named in section 13(a)(5) or 13(b)(4) where his work
is an essential and integrated step in
performing such named operation (see
Mitchell v. Myrtle Grove Packing Co., 350
U.S. 891, approving Tobin v. Blue Channel Corp., 198 F. 2d 245; Mitchell v.
Stinson, 217 F. 2d 210), or where the employee is engaged in activities which
are functionally so related to a named
operation under the particular facts
and circumstances that they are necessary to the conduct of such operation
and his employment is, as a practical
matter, necessarily and directly a part
of carrying on the operation for which
exemption was intended (Mitchell v.
Trade Winds, Inc., 289 F. 2d 278; see also
Waller v. Humphreys, 133 F. 2d 193 and
McComb v. Consolidated Fisheries Co.,
174 F. 2d 74). Under these principles,
generally an employee performing
functions without which the named operations could not go on is, as a practical matter, ‘‘employed in’’ such operations. It is also possible for an employee to come within the exemption
provided by section 13(a)(5) or section
13(b)(4) even though he does not directly participate in the physical acts
which are performed on the enumerated marine products in carrying on
the operations which are named in that
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§ 784.107
29 CFR Ch. V (7–1–19 Edition)
section of the Act. However, it is not
enough to establish the applicability of
such an exemption that an employee is
hired by an employer who is engaged in
one or more of the named operations or
that the employee is employed by an
establishment or in an industry in
which operations enumerated in section 13(a)(5) or section 13(b)(4) are performed. The relationship between what
he does and the performance of the
named operations must be examined to
determine whether an application of
the above-stated principles to all the
facts and circumstances will justify the
conclusion that he is ‘‘employed in’’
such operations within the intendment
of the exemption provision.
§ 784.107 Relationship of employee’s
work to operations on the specified
aquatic products.
It is also necessary to the application
of the exemptions that the operation of
which the employee’s work is a part be
performed on the marine products
named in the Act. Thus the operations
described in section 13(a)(5) must be
performed with respect to ‘‘any kind of
fish, shellfish, crustacea, sponges, seaweeds, or other aquatic forms of animal and vegetable life.’’ The operations
enumerated in section 13(b)(4) must be
performed with respect to ‘‘any kind of
fish, shellfish, or other aquatic forms
of animal or vegetable life, or any byproduct thereof’’. Work performed on
products which do not fall within these
descriptions is not within the exemptions (Fleming v. Hawkeye Pearl Button
Co., 113 F. 2d 52; Mitchell v. Trade Winds,
Inc., 289 F. 2d 278; Walling v. Haden, 153
F. 2d 196).
§ 784.108 Operations not included in
named operations on forms of
aquatic ‘‘life.’’
Since the subject matter of the exemptions is concerned with ‘‘aquatic
forms of animal and vegetable life,’’
the courts have held that the manufacture of buttons from clam shells or the
dredging of shells to be made into lime
and cement are not exempt operations
because the shells are not living things
(Fleming v. Hawkeye Pearl Button Co.,
113 F. 2d 52; Walling v. Haden, 153 F. 2d
196, certiorari denied 328 U.S. 866).
Similarly, the production of such items
as crushed shell and grit, shell lime,
pearl buttons, knife handles, novelties,
liquid glue, isinglass, pearl essence,
and fortified or refined fish oil is not
within these exemptions.
§ 784.109 Manufacture of supplies for
named operations is not exempt.
Employment in the manufacture of
supplies for the named operations is
not employment in the named operations on aquatic forms of life. Thus,
the exemption is not applicable to the
manufacture of boxes, barrels, or ice by
a seafood processor for packing or shipping its seafood products or for use of
the ice in its fishing vessels. These operations, when performed by an independent manufacturer, would likewise
not be exempt (Dize v. Maddix, 144 F.
284 (C.A. 4), affirmed 324 U.S. 667, and
approved on this point in Farmers’ Reservoir Co. v. McComb, 337 U.S. 755).
§ 784.110 Performing operations both
on nonaquatic products and named
aquatic products.
By their terms, sections 13(a)(5) and
13(b)(4) provide no exemption with respect to operations performed on any
products other than the aquatic products named in these subsections (see
§ 784.107). Accordingly, neither of the
exemptions is applicable to the making
of any commodities from ingredients
only part of which consist of such
aquatic products, if a substantial
amount of other products is contained
in the commodity so produced (compare Walling v. Bridgeman-Russell Co., 6
Labor Cases 61, 422, 2 WH Cases 785 (D.
Minn.) and Miller v. Litchfield Creamery
Co., 11 Labor Cases 63, 274, 5 WH Cases
1039 (N.D. Ind.), with Mitchell v. Trade
Winds, Inc., 289 F. 2d 278). Thus, the
first processing, canning, or processing
of codfish cakes, clam chowder, dog
food, crab cakes, or livestock food containing aquatic products is often not
exempt within the meaning of the relevant exemptions.
§ 784.111 Operations on named products with substantial amounts of
other ingredients are not exempt.
To exempt employees employed in
first processing, canning, or processing
products composed of the named commodities and a substantial amount of
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Wage and Hour Division, Labor
§ 784.113
ingredients not named in the exemptions would be contrary to the language and purposes of such exemptions
which specifically enumerate the commodities on which exempt operations
were intended to be performed. Consequently, in such situations all operations performed on the mixed products at and from the time of the addition of the foreign ingredients, including those activities which are an integral part of first processing, canning,
or processing are nonexempt activities.
However, activities performed in connection with such operations on the
named aquatic products prior to the
addition of the foreign ingredients are
deemed exempt operations under the
applicable exemption. Where the commodity produced from named aquatic
products contains an insubstantial
amount of products not named in the
exemption, the operations will be considered as performed on the aquatic
products and handling and preparation
of the foreign ingredients for use in the
exempt operations will also be considered as exempt activities.
§ 784.112 Substantial amounts of nonaquatic products; enforcement policy.
As an enforcement policy in applying
the principles stated in §§ 784.110 and
784.111, if more than 20 percent of a
commodity consists of products other
than aquatic products named in section
13(a)(5) or 13(b)(4), the commodity will
be deemed to contain a substantial
amount of such nonaquatic products.
§ 784.113 Work related to named operations performed in off- or deadseason.
Generally, during the dead or inactive season when operations named in
section 13(a)(5) or 13(b)(4) are not being
performed on the specified aquatic
forms of life, employees performing
work relating to the plant or equipment which is used in such operations
during the active seasons are not exempt. Illustrative of such employees
are those who repair, overhaul, or recondition fishing equipment or processing or canning equipment and machinery during the off-season periods
when fishing, processing, or canning is
not going on. An exemption provided
for employees employed ‘‘in’’ specified
operations is plainly not intended to
apply to employees employed in other
activities during periods when the
specified operations are not being carried on, where their work is functionally remote from the actual conduct of
the operations for which exemption is
provided and is unaffected by the natural factors which the Congress relied
on as reason for exemption. The courts
have recognized these principles. See
Maneja v. Waialua, 349 U.S. 254; Mitchell
v. Stinson, 217 F. 2d 210; Maisonet v. Central Coloso, 6 Labor Cases (CCH) par.
61,337, 2 WH Cases 753 (D. P.R.); Abram
v. San Joaquin Cotton Oil Co., 49 F.
Supp. 393 (S.D. Calif.), and Heaburg v.
Independent Oil Mill Inc., 46 F. Supp. 751
(W.D. Tenn.). On the other hand, there
may be situations where employees
performing
certain
preseason
or
postseason
activities
immediately
prior or subsequent to carrying on operations named in sections 13(a)(5) or
section 13(b)(4) are properly to be considered as employed ‘‘in’’ the named
operations because their work is so
close in point of time and function to
the conduct of the named operations
that the employment is, as a practical
matter, necessarily and directly a part
of carrying on the operation for which
exemption was intended. Depending on
the facts and circumstances, this may
be true, for example, of employees who
perform such work as placing boats and
other equipment in condition for use at
the beginning of the fishing season, and
taking the necessary protective measures with respect to such equipment
which are required in connection with
termination of the named operations at
the end of the season. Where such work
is integrated with and is required for
the actual conduct of the named operations on the specified aquatic forms of
life, and is necessarily performed immediately before or immediately after
such named operations, the employees
performing it may be considered as employed in the named operations, so as
to come within the exemption. It
should be kept in mind that the relationship between the work of an employee and the named operations which
is required for exemption is not necessarily identical with the relationship
between such work and the production
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§ 784.114
29 CFR Ch. V (7–1–19 Edition)
of goods for commerce which is sufficient to establish its general coverage
under the Act. Thus, repair, overhaul,
and reconditioning work during the inactive season which does not come
within the exemption is nevertheless
closely related and directly essential
to the production of goods for commerce which takes place during the active season and, therefore, is subject to
the provisions of the Act (Farmers’ Reservoir Co. v. McComb, 337 U.S. 755;
Mitchell v. Stinson, 217 F. 2d 210; Bowie
v. Gonzalez, 117 F. 2d 11; Weaver v. Pittsburgh Steamship Co., 153 F. 2d 597, cert.,
den., 328 U.S. 858).
§ 784.114 Application of exemptions on
a workweek basis.
The general rule that the unit of
time to be used in determining the application of the exemption to an employee is the workweek (see Overnight
Motor Transportation Co. v. Missel, 316
U.S. 572; Mitchell v. Stinson, 217 F. 2d
210; Mitchell v. Hunt. 263 F. 2d 913; Puerto Rico Tobacco Marketing Co-op. Ass’n.
v. McComb, 181 F. 2d 697). Thus, the
workweek is the unit of time to be
taken as the standard in determining
the applicability to an employee of section 13(a)(5) or section 13(b)(4) (Mitchell
v. Stinson, supra). An employee’s workweek is a fixed and regularly recurring
period of 168 hours—seven consecutive
24-hour periods. It may begin at an
hour of any day set by the employer
and need not coincide with the calendar week. Once the workweek has
been set it commences each succeeding
week on the same day and at the same
hour. Changing the workweek for the
purpose of escaping the requirements
of the Act is not permitted. If in any
workweek an employee does only exempt work he is exempt from the wage
and hours provisions of the Act during
that workweek, irrespective of the nature of his work in any other workweek or workweeks. An employee may
thus be exempt in one workweek and
not the next (see Mitchell v. Stinson,
supra). But the burden of effecting segregation between exempt and nonexempt work as between particular
workweeks is on the employer (see
Tobin v. Blue Channel Corp., 198 F. 2d
245).
§ 784.115 Exempt
and
noncovered
work performed during the workweek.
The wage and hours requirements of
the Act do not apply to any employees
during any workweek in which a portion of his activities falls within section 13(a)(5) if no part of the remainder
of his activities is covered by the Act.
Similarly, the overtime requirements
are inapplicable in any workweek in
which a portion of an employee’s activities falls within section 13(b)(4) if
no part of the remainder of his activities is covered by the Act. Covered activities for purposes of the above statements mean engagement in commerce,
or in the production of goods for commerce, or in an occupation closely related or directly essential to such production or employment in an enterprise engaged in commerce or in the
production of goods for commerce, as
explained in §§ 784.17 through 784.19.
§ 784.116 Exempt and nonexempt work
in the same workweek.
Where an employee, during any
workweek, performs work that is exempt under section 13(a)(5) or 13(b)(4),
and also performs nonexempt work,
some part of which is covered by the
Act, the exemption will be deemed inapplicable unless the time spent in performing nonexempt work during that
week is not substantial in amount. For
enforcement purposes, nonexempt work
will be considered substantial in
amount if more than 20 percent of the
time worked by the employee in a
given workweek is devoted to such
work (see Mitchell v. Stinson, 217 F. 2d
210). Where exempt and nonexempt
work is performed during a workweek
by an employee and is not or cannot be
segregated so as to permit separate
measurement of the time spent in each,
the employee will not be exempt (see
Tobin v. Blue Channel Corp., 198 F. 2d
245; Walling v. Public Quick Freezing and
Cold Storage Co., 62 F. Supp. 924).
§ 784.117 Combinations
work.
The
under
one of
under
of
combination of exempt work
sections 13(a)(5) and 13(b)(4), or
these sections with exempt work
another section of the Act, is
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Wage and Hour Division, Labor
§ 784.121
permitted. Where a part of an employee’s covered work in a workweek is exempt under section 13(a)(5) and the remainder is exempt under another section which grants an exemption from
the minimum wage and overtime provisions of the Act, the wage and hours requirements are not applicable. If the
scope of the exemption is not the same,
however, the exemption applicable to
the employee is that provided by
whichever exemption provision is more
limited in scope unless, of course, the
time spent in performing work which is
nonexempt under the broader exemption is not substantial. For example,
an employee may devote part of his
workweek to work within section
13(b)(4) and the remainder to work exempt from both the minimum wage and
overtime requirements under another
section of the Act. In such a case he
must receive the minimum wage but is
not required to receive time and onehalf for his overtime work during that
week (C.F. Mitchell v. Myrtle Grove
Packing Co., 350 U.S. 891; Tobin v. Blue
Channel Corp., 198 F. 2d 245). Each activity is tested separately under the
applicable exemption as though it were
the sole activity of the employee for
the whole workweek in question. Unless the employee meets all the requirements of each exemption a combination exemption would not be available.
GENERAL CHARACTER AND SCOPE OF THE
SECTION 13(a)(5) EXEMPTION
§ 784.118 The exemption is intended
for work affected by natural factors.
As indicated by the legislative history, the purpose of the section 13(a)(5)
exemption is to exempt from the minimum wage and overtime provisions of
the Act employment in those activities
in the fishing industry that are controlled or materially affected by natural factors or elements, such as the
vicissitudes of the weather, the changeable conditions of the water, the run of
the catch, and the perishability of the
products obtained (83 Cong. Rec. 7408,
7443; S. Rep. No. 145, p. 33 on H.R. 3935,
87th Cong., first session; Fleming v.
Hawkeye Pearl Button Co., 113 F. 2d 52;
Walling v. Haden, 153 F. 2d 196, certiorari denied 328 U.S. 866).
§ 784.119 Effect of natural factors on
named operations.
The various activities enumerated in
section 13(a)(5)—the catching, taking,
propagating, harvesting, cultivating,
or farming of aquatic forms of animal
or vegetable life as well as ‘‘the going
to and returning from work’’ are materially controlled and affected by the
natural elements. Similarly, the activities of ‘‘first processing, canning, or
packing of such marine products at sea
as an incident to, or in conjunction
with, such fishing operations’’ are subject to the natural factors mentioned
above. The ‘‘loading and unloading’’ of
such aquatic products when performed
at sea are also subject to the natural
forces.
§ 784.120 Application of exemption to
‘‘offshore’’ activities in general.
The expression ‘‘offshore activities’’
is used to describe the category of
named operations pertaining to the acquisition from nature of aquatic forms
of animal and vegetable life. As originally enacted in 1938, section 13(a)(5)
exempted not only employees employed in such ‘‘offshore’’ or ‘‘trip’’ activities but also employees employed
in related activities on shore which
were similarly affected by the natural
factors
previously
discussed
(see
§ 784.103, and Fleming v. Hawkeye Pearl
Button Co., 113 F. 2d 52). However, the
intent of the 1961 amendments to the
Act was to remove from the exemption
the so-called onshore activities and
‘‘leave the exemption applicable to ‘offshore’ activities connected with the
procurement of the aquatic products’’
(S. Rep. 145, 87th Cong., first session, p.
33). Despite its comprehensive reach
(see §§ 784.105 and 784.106), the exemption, like the similar exemption is the
Act for agriculture, is ‘‘meant to apply
only’’ to the activities named in the
statute (see Maneja v. Waialua, 349 U.S.
254; Farmers Reservoir Co. v. McComb,
337 U.S. 755).
§ 784.121
Exempt fisheries operations.
Employees engaged in the named operations, such at ‘‘catching’’ or ‘‘taking,’’ are clearly exempt. As indicated
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§ 784.122
29 CFR Ch. V (7–1–19 Edition)
in § 784.106, employees engaged in activities that are ‘‘directly and necessarily a part of’’ an enumerated operation are also exempt (Mitchell v. Trade
Winds, Inc., 289 F. 2d 278). The ‘‘catching, taking, propagating, harvesting,
cultivating, or farming’’ of the various
forms of aquatic life includes not only
the actual performance of the activities, but also the usual duties inherent
in the occupations of those who perform the activities. Thus, the fisherman who is engaged in ‘‘catching’’ and
‘‘taking’’ must see to it that his lines,
nets, seines, traps, and other equipment are not fouled and are in working
order. He may also have to mend or replace his lines or nets or repair or construct his traps. Such activities are an
integral part of the operations of
‘‘catching’’ and ‘‘taking’’ of an aquatic
product.
§ 784.122 Operations performed as an
integrated part of fishing.
Certain other activities performed on
a fishing vessel in connection with
named operations are, functionally and
as a practical matter, directly and necessarily a part of such operations. For
example, maintenance work performed
by members of the fishing crew during
the course of the trip on the fishing
boat would necessarily be a part of the
fishing operation, since the boat itself
is as much a fishing instrument as the
fishing rods or nets. Similarly, work
required on the vessel to keep in good
operating condition any equipment
used for processing, canning, or packing the named aquatic products at sea
is so necessary to the conduct of such
operations that it must be considered a
part of them and exempt.
§ 784.123 Operations
performed
on
fishing equipment.
On the principle stated in § 784.122 the
replacement, repair, mending, or construction of the fisherman’s equipment
performed at the place of the fishing
operation would be exempt. Such activities performed in contemplation of
the trip are also within the exemption
if the work is so closely related both in
point of time and function to the acquisition of the aquatic life that it is
really a part of the fishing operation or
of ‘‘going to * * * work.’’ For example,
under appropriate facts, the repair of
the nets, or of the vessel, or the building of fish trap frames on the shore immediately prior to the opening of the
fishing season would be within the exemption. Activities at the termination
of a fishing trip which are similarly related in time and function to the actual conduct of fishing operations or
‘‘returning from work’’ may be within
the exemption on like principles. Similarly, the fact that the exemption is intended generally for ‘‘offshore’’ activities does not mean that it may not
apply to employment in other activities performed on shore which are so
integrated with the conduct of actual
fishing operations and functionally so
necessary thereto that the employment
is, in practical effect, directly and necessarily a part of the fishing operations
for which the exemption is intended. In
such circumstances the exemption will
apply, for example, to an employee employed by a vessel owner to watch the
fishing vessel, its equipment, and the
catch when it comes to port, checks
the mooring lines, operate bilge pumps
and heating and cooling systems on the
vessel, and assist in the loading and
unloading of the fishing equipment and
the catch. Work of the kinds referred
to may be exempt when performed by
the fisherman himself or necessary to
the conduct of the fishing organization.
However, the exemption would not
apply to employees of a manufacturer
of supplies or to employees of independent shops which repair boats and
equipment. (Dize v. Maddix, 144 F. 2d
584, affirmed 324 U.S. 697.)
§ 784.124 Going to and returning from
work.
The phrase ‘‘including the going to
and returning from work’’ relates to
the preceding named operations which
pertain to the procuring and appropriation of seafood and other forms of
aquatic life from nature. The expression obviously includes the time spent
by fishermen and others who go to and
from the fishing grounds or other locations where the aquatic life is reduced
to possession. If going to work requires
fishermen to prepare and carry the
equipment required for the fishing operation, this would be included within
the exemption. In performing such
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Wage and Hour Division, Labor
§ 784.127
travel the fishermen may be required
to row, guide or sail the boat or otherwise assist in its operation. Similarly,
if an employee were digging for clams
or other shellfish or gathering seaweed
on the sand or rocks it might be necessary to drive a truck or other vehicle
to reach his destination. Such activities are exempt within the meaning of
this language. However, the phrase
does not apply to employees who are
not employed in the activities involved
in the acquisition of aquatic animal or
vegetable life, such as those going to or
returning from work at processing or
refrigerator plants or wholesale establishments.
§ 784.125 Loading and unloading.
The term ‘‘loading and unloading’’
applies to activities connected with the
removal of aquatic products from the
fishing vessel and their initial movement to markets or processing plants.
The term, however, is not without limitation. The statute by its clear language makes these activities exempt
only when performed by any employee
employed in the procurement activities
enumerated in section 13(a)(5). This
limitation is confirmed by the legislative history of the 1961 amendments
which effectuated this change in the
application of this term (S. Rep. 145,
87th Cong., first session, p. 33). Consequently, members of the fishing crew
engaged in loading and unloading the
catch of the vessel to another vessel at
sea, or at the dockside would be engaging in exempt activities within the
meaning of section 13(a)(5). On the
other hand, dock workers performing
the same kind of tasks would not be
within the exemption.
§ 784.126 Operation of the fishing vessel.
In extending the minimum wage to
seamen on American vessels by limiting the exemption from minimum
wages and overtime provided by section 13(a)(12) of the Act to ‘‘any employee employed as a seaman on a vessel other than an American vessel’’,
and at the same time extending the
minimum wage to ‘‘onshore’’ but not
‘‘offshore’’ operations concerned with
aquatic products, the Congress, in the
1961 amendments to the Act, did not in-
dicate any intent to remove the crews
of fishing vessels engaged in operations
named in section 13(a)(5) from the exemption provided by that section. The
exemption
provided
by
section
13(a)(12), above noted, and the general
exemption in section 13(b)(6) from overtime for ‘‘any employee employed as a
seaman’’ (whether or not on an American vessel) apply, in general to employees, working aboard vessels, whose
services are rendered primarily as an
aid to navigation. It appears, however,
that it is not the custom or practice in
the fishing industry for a fishing vessel
to have two crews; namely, a fishing
crew whose duty it is primarily to fish
and to perform other duties incidental
thereto and a navigational crew whose
duty it is primarily to operate the
boat. Where, as is the typical situation,
there is but one crew which performs
all these functions, the section 13(a)(5)
exemptions would apply to its members. For a further explanation of the
seaman’s exemption, see part 783 of
this chapter.
§ 784.127 Office and clerical employees
under section 13(a)(5).
Office and clerical employees, such as
bookkeepers, stenographers, typists,
and others who perform general office
work of a firm engaged in operating
fishing boats are not for that reason
within the section 13(a)(5) exemption.
Under the principles stated in § 784.106,
their general office activities are not a
part of any of the named operations
even when they are selling, taking, and
putting up orders, on recording sales,
taking cash or making telephone connections for customer or dealer calls.
Employment in the specific activities
enumerated in the preceding sentence
would ordinarily, however, be exempt
under section 13(b)(4) since such activities constitute ‘‘marketing’’ or ‘‘distributing’’ within the meaning of that
exemption (see § 784.153). In certain circumstances, office or clerical employees may come within the section
13(a)(5) exemption. If, for example, it is
necessary to the conduct of the fishing
operations that such employees accompany a fishing expedition to the fishing
grounds to perform certain work required there in connection with the
catch, their employment under such
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§ 784.128
29 CFR Ch. V (7–1–19 Edition)
circumstances may, as a practical matter, be directly and necessarily a part
of the operations for which exemption
was intended, in which event the exemption would apply to them.
FIRST PROCESSING, CANNING, OR PACKING OF MARINE PRODUCTS UNDER SECTION 13(a)(5)
§ 784.128 Requirements for exemption
of first processing, etc., at sea.
A complete exemption from minimum and overtime wages is provided
by section 13(a)(5) for employees employed in the operations of first processing, canning, or packing of marine
products at sea as an incident to, or in
conjunction with ‘‘such’’ fishing operations—that is, the fishing operations
of the fishing vessel (S. Rep. 145, 87th
Cong., first session, p. 33). To qualify
under this part of the exemption, there
must be a showing that: (a) The work
of the employees is such that they are,
within the meaning of the Act, employed in one or more of the named operations of first processing, canning or
packing, (b) such operations are performed as an incident to, or in conjunction with, fishing operations of the vessel, (c) such operations are performed
at sea, and (d) such operations are performed on the marine product specified
in the statute.
§ 784.129 ‘‘Marine products’’.
The marine products which form the
basis of the exemption are the ‘‘fish,
shellfish, crustaceas, sponges, seaweeds, or other aquatic forms of animal and vegetable life’’ mentioned in
section 13(a)(5). The exemption contemplates aquatic products currently
or recently acquired and in the form
obtained from the sea, since the language of the exemption clearly indicates the named operations of first
processing, canning, or packing must
be performed ‘‘at sea’’ and ‘‘as an incident to or in conjunction with’’, fishing
operations. Also, such ‘‘marine products’’ are limited to aquatic forms of
‘‘life.’’
§ 784.130 ‘‘At sea.’’
The ‘‘at sea’’ requirement must be
construed in context and in such manner as to accomplish the statutory ob-
jective. The section 13(a)(5) exemption
is for the ‘‘catching, taking, propagating, harvesting,’’ etc., of ‘‘aquatic
forms of animal and vegetable life.’’
There is no limitation as to where
these activities must take place other
than, as the legislative history indicates, that they are ‘‘offshore’’ activities. Since the purpose of the 1961
amendments is to exempt the ‘‘first
processing, canning, or packing such
marine products at sea as an incident
to, or in conjunction with, such fishing
operations,’’ it would frustrate this objective to give the phrase ‘‘at sea’’ a
technical or special meaning. For example, to define ‘‘at sea’’ to include
only bodies of water subject to the ebb
and flow of the tides or to saline waters
would exclude the Great Lakes which
obviously would not comport with the
legislative intent. On the other hand,
one performing the named activities of
first processing, canning, or packing
within the limits of a port or harbor is
not performing them ‘‘at sea’’ within
the meaning of the legislative intent
although the situs of performance is
subject to tidewaters. In any event it
would not appear necessary to draw a
precise line as to what constitutes ‘‘at
sea’’ operations, for, as a practical
matter, such first processing, canning,
or packing operations are those closely
connected with the physical catching
of the fish and are performed on the
fishing vessel shortly or immediately
following the ‘‘catching’’ and ‘‘taking’’
of the fish.
§ 784.131 ‘‘As an incident to, or in conjunction with’’, fishing operations.
The statutory language makes clear
that the ‘‘first processing, canning, or
packing,’’ unlike the other named operations of ‘‘catching, taking, propagating, harvesting, cultivating, or
farming’’ are not exempt operations in
and of themselves. They are exempt
only when performed ‘‘as an incident
to, or in conjunction with such fishing
operations’’ (see Farmers Reservoir Co.
v. McComb, 337 U.S. 755). It is apparent
from the context that the language
‘‘such fishing operations’’ refers to the
principal named operations of ‘‘catching, taking, propagating, harvesting,
cultivating, or farming’’ as performed
by the fishermen or fishing vessel
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Wage and Hour Division, Labor
§ 784.134
(compare Bowie v. Gonzales, 117 F. 2d
11). Therefore to be ‘‘an incident to, or
in conjunction with such fishing operations’’, the first processing, canning,
or packing must take place upon the
vessel that is engaged in the physical
catching, taking, etc., of the fish. This
is made abundantly clear by the legislative history. In Senate Report No.
145, 87th Congress, first session, at page
33, it pointed out:
For the same reasons, there was included
in section 13(a)(5) as amended by the bill an
exemption for the ‘‘first processing, canning,
or packing’’ of marine products ‘‘at sea as an
incident to, or in conjunction with such fishing operations.’’ The purpose of this additional provision is to make certain that the
Act will be uniformly applicable to all employees on the fishing vessel including those
employees on the vessel who may be engaged
in these activities at sea as an incident to
the fishing operations conducted by the vessel.
In accordance with this purpose of the
section, the exemption is available to
an employee on a fishing vessel who is
engaged in first processing fish caught
by fishing employees of that same fishing vessel; it would not be available to
such an employee if some or all of the
fish being first processed were obtained
from other fishing vessels, regardless of
the relationship, financial or otherwise, between such vessels (cf. Mitchell
v. Hunt, 263 F. 2d 913; Farmers Reservoir
Co. v. McComb, 337 U.S. 755).
§ 784.132 The exempt operations.
The final requirement is that the employee on the fishing vessel must be
employed in ‘‘the first processing, canning or packing’’ of the marine products. The meaning and scope of these
operations when performed at sea as an
incident to the fishing operations of
the vessel are set forth in §§ 784.133 to
784.135. To be ‘‘employed in’’ such operations the employee must, as previously explained (see §§ 784.106 and
784.121), be engaged in work which is
clearly part of the named activity.
§ 784.133 ‘‘First processing.’’
Processing connotes a change from
the natural state of the marine product
and first processing would constitute
the first operation or series of continuous operations that effectuate this
change. It appears that the first processing operations ordinarily performed
on the fishing vessels at sea consist for
the most part of eviscerating, removal
of the gills, beheading certain fish that
have large heads, and the removal of
the scallop from its shell. Icing or
freezing operations, which ordinarily
immediately follow these operations,
would also constitute an integral part
of the first processing operations, as
would such activities as filleting, cutting, scaling, or salting when performed as part of a continuous series of
operations. Employment aboard the
fishing vessel in freezing operations
thus performed is within the exemption
if the first processing of which it is a
part otherwise meets the conditions of
section 13(a)(5), notwithstanding the
transfer by the 1961 amendments of
‘‘freezing’’, as such, from this exemption to the exemption from overtime
only provided by section 13(b)(4). Such
preliminary operations as cleaning,
washing, and grading of the marine
products, though not exempt as first
processing since they effect no change,
would be exempt as part of first processing when done in preparation for the
first processing operation described
above including freezing. The same
would be true with respect to the removal of the waste products resulting
from the above described operations on
board the fishing vessel.
§ 784.134 ‘‘Canning.’’
The term ‘‘canning’’ was defined in
the legislative history of the 1949
amendments (House (Conference) Report No. 1453, 81st Cong., first session;
95 Cong. Rec. 14878, 14932–33). These
amendments made the ‘‘canning’’ of
marine products or byproducts exempt
from overtime only under a separate
exemption (section 13(b)(4), and subject
to the minimum wage requirements of
the Act (see § 784.136 et seq.). The same
meaning will be accorded to ‘‘canning’’
in section 13(a)(5) as in section 13(b)(4)
(see § 784.142 et seq.) subject, of course,
to the limitations necessarily imposed
by the context in which it is found. In
other words, although certain operations as described in § 784.142 et seq.
qualify as canning, they are, nevertheless, not exempt under section 13(a)(5)
unless they are performed on marine
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§ 784.135
29 CFR Ch. V (7–1–19 Edition)
products by employees of the fishing
vessel at sea as an incident to, or in
conjunction with the fishing operations
of the vessel.
§ 784.135
‘‘Packing.’’
The packing of the various named
marine products at sea as an incident
to, or in conjunction with, the fishing
operations of the vessel is an exempt
operation. The term ‘‘packing’’ refers
to the placing of the named product in
containers, such as boxes, crates, bags,
and barrels. Activities such as washing,
grading, sizing, and placing layers of
crushed ice in the containers are
deemed a part of packing when performed as an integral part of the packing operation. The packing operation
may be a simple or complete and complex operation depending upon the nature of the marine product, the length
of time out and the facilities aboard
the vessel. Where the fishing trip is of
short duration, the packing operation
may amount to no more than the simple operation, of packing the product
in chipped or crushed ice in wooden
boxes, as in the case of shrimp, or placing the product in wooden boxes and
covering with seaweed as in the case of
lobsters. Where the trips are of long
duration, as for several weeks or more,
packing the operations on fishing vessels with the proper equipment sometimes are integrated with first processing operations so that together
these operations amount to readying
the product in a marketable form. For
example, in the case of shrimp, the
combined operations may consist of
the following series of operations—
washing, grading, sizing, placing 5pound boxes already labeled for direct
marketing, placing in trays with other
boxes, loading into a quick freezer
locker,
removing
after
freezing,
emptying the box, glazing the contents
with a spray of fresh water, replacing
the box, putting them in 50-pound master cartons and finally stowing in refrigerated locker.
GENERAL CHARACTER AND SCOPE OF THE
SECTION 13(a)(4) EXEMPTION
§ 784.136 ‘‘Shore’’ activities exempted
under section 13(b)(4).
Section 13(b)(4) provides an exemption from the overtime but not from
the minimum wage provisions of the
Act for ‘‘any employee employed in the
canning, processing, marketing, freezing, curing, storing, packing for shipment, or distributing’’ aquatic forms of
animal and vegetable life or any byproducts thereof. Orginally, all these
operations were contained in the exemption provided by section 13(a)(5)
but, as a result of amendments, first
‘‘canning’’, in 1949, and then the other
operations in 1961, were transferred to
section 13(b)(4). (See the discussion in
§§ 784.102 to 784.105.) These activities
are ‘‘shore’’ activities and in general
have to do with the movement of the
perishable aquatic products to a nonperishable state or to points of consumption (S. Rept. 145, 87th Cong., first
session, p. 33).
§ 784.137 Relationship of exemption to
exemption for ‘‘offshore’’ activities.
The reasons advanced for exemption
of employment in ‘‘shore’’ operations,
now listed in section 13(b)(4), at the
time of the adoption of the original exemption in 1938, had to do with the difficulty of regulating hours of work of
those whose operations, like those of
fishermen, were stated to be governed
by the time, size, availability, and perishability of the catch, all of which
were considered to be affected by natural factors that the employer could
not control (see 83 Cong. Rec. 7408, 7422,
7443). The intended limited scope of the
exemption in this respect was not
changed by transfer of the ‘‘shore’’ activities from section 13(a)(5) to section
13(b)(4). The exemption of employment
in these ‘‘shore’’ operations may be
considered, therefore, as intended to
implement and supplement the exemption for employment in ‘‘offshore’’ operations provided by section 13(a)(5), by
exempting from the hours provisions of
the Act employees employed in those
‘‘shore’’ activities which are necessarily somewhat affected by the same
natural factors. These ‘‘shore’’ activities are affected primarily, however, by
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Wage and Hour Division, Labor
§ 784.140
fluctuations in the supply of the product or by the necessity for consumption or preservation of such products
before spoilage occurs (see Fleming v.
Hawkeye Pearl Button Co., 113 F. 2d 52;
cf. McComb v. Consolidated Fisheries, 174
F. 2d 74).
§ 784.138 Perishable state of the aquatic product as affecting exemption.
(a) Activities performed after conversion of an aquatic product to a nonperishable state cannot form the basis
for application of the section 13(b)(4)
exemption unless the subsequent operation is so integrated with the performance of exempt operations on the
aquatic forms of animal and vegetable
life mentioned in the section that functionally and as a practical matter it
must be considered a part of the operations for which exemption was intended.
The
exemption
is,
consequently, not available for the handling or shipping of nonperishable
products by an employer except where
done as a part of named operations
commenced on the product when it was
in a perishable state. Thus, employees
of dealers in or distributors of such
nonperishable products as fish oil and
fish meal, or canned seafood, are not
within the exemption. Similarly, there
is no basis for application of the exemption to employees employed in further processing of or manufacturing
operations on products previously rendered nonperishable, such as refining
fish oil or handling fish meal in connection with the manufacture of feeds.
Further specific examples of application of the foregoing principle are
given in the subsequent discussion of
particular operations named in section
13(b)(4).
(b) In applying the principle stated in
paragraph (a) of this section, the Department has not asserted that the exemption is inapplicable to the performance of the operations described in section 13(b)(4) on frozen, smoked, salted,
or cured fish. The Department will continue to follow this policy until further
clarification from the courts.
§ 784.139 Scope of exempt operations
in general.
Exemption under section 13(b)(4),
like exemption under section 13(a)(5),
depends upon the employment in the
actual activities named in the section,
and an employee performing a function
which is not necessary to the actual
conduct of a named activity, as explained in § 784.106, is not within the exemption. It is also essential to exemption that the operations named in section 13(b)(4) be performed on the forms
of aquatic life specified in the section
and not on other commodities a substantial part of which consists of materials or products other than the named
aquatic products. Application of these
principles has been considered generally in the earlier discussion, and
further applications will be noted in
the following sections and in the subsequent discussion of particular operations mentioned in the section 13(b)(4)
exemption.
§ 784.140 Fabrication and handling of
supplies for use in named operations.
(a) As noted in § 784.109, the exemption for employees employed ‘‘in’’ the
named operations does not extend to
an employee by reason of the fact that
he engages in fabricating supplies for
the named operations. Employment in
connection with the furnishing of supplies for the processing or canning operations named in section 13(b)(4) is
not exempt as employment ‘‘in’’ such
named operations unless the functional
relationship of the work to the actual
conduct of the named operations is
such that, as a practical matter, the
employment is directly and necessarily
a part of the operations for which exemption is intended. Employees who
meet the daily needs of the canning or
processing operations by delivering
from stock, handling, and working on
supplies such as salt, condiments,
cleaning supplies, containers, etc.,
which must be provided as needed if
the named operations are to continue,
are within the exemption because such
work is, in practical effect, a part of
the operations for which exemption is
intended. On the other hand, the receiving, unloading, and storing of such
supplies during seasons when the
named operations are not being carried
on for subsequent use in the operations
expected to be performed during the
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§ 784.141
29 CFR Ch. V (7–1–19 Edition)
active season, are ordinarily too remote from the actual conduct of the
named operations to come within the
exemption (see § 784.113), and are not affected by the natural factors (§ 784.137)
which were considered by the Congress
to constitute a fundamental reason for
providing the exemption. Whether the
receiving, unloading, and storing of
supplies during periods when the
named operations are being carried on
are functionally so related to the actual conduct of the operations as to be,
in practical effect, a part of the named
operations and within the exemption,
will depend on all the facts and circumstances of the particular situation
and the manner in which the named operations are carried on. Normally
where such activities are directed to
building up stock for use at a relatively remote time and there is no direct integration with the actual conduct of the named operations, the exemption will not apply.
(b) It may be that employees are engaged in the same workweek in performing exempt and nonexempt work.
For example, a shop machinist engaged
in making a new part to be used in the
repair of a machine currently used in
canning operations would be doing exempt work. If he also in the same
workweeks makes parts to be used in a
manufacturing plant operated by his
employer, this work, since it does not
directly or necessarily contribute to
the conduct of the canning operations,
would be nonexempt work causing the
loss of the exemption if such work occupied a substantial amount (for enforcement purposes, more than 20 percent) of the employee’s worktime in
that workweek (see § 784.116 for a more
detailed discussion).
§ 784.141 Examples of nonexempt employees.
An employer who engaged in operations specified in section 13(b)(4)
which he performs on the marine products and byproducts described in that
section may operate a business which
engages also in operations of a different character or one in which some
of the activities carried on are not
functionally necessary to the conduct
of operations named in section 13(b)(4).
In such a business there will ordinarily
be, in addition to the employees employed in such named operations, other
employees who are nonexempt because
their work is concerned entirely or in
substantial part with carrying on activities which constitute neither the
actual engagement in the named operations nor the performance of functions which are, as a practical matter,
directly and necessarily a part of their
employer’s conduct of such named operations. Ordinarily, as indicated in
§ 784.156, such nonexempt employees
will not be employed in an establishment which is exclusively devoted by
the employer to the named operations
during the period of their employment.
It is usually when the named operations are not being carried on, or in
places wholly or partly devoted to
other operations, that employees of
such an employer will be performing
functions which are not so necessarily
related to the conduct of the operations named in section 13(b)(4) as to
come within the exemption. Typical illustrations of the occupations in which
such nonexempt workers may be found
(although employment in such an occupation does not necessarily mean that
the worker is nonexempt) are the following: General office work (such as
maintaining employment, social security, payroll and other records, handling general correspondence, etc., as
distinguished from ‘‘marketing’’ or
‘‘distributing’’ work like that described
in § 784.155), custodial, maintenance,
watching, and guarding occupations;
furnishing food, lodging, transportation, or nursing services to workers;
and laboratory occupations such as
those concerned with development of
new products. Such workers are, of
course, not physically engaged in operations named in section 13(b)(4) in the
ordinary case, and they are not exempt
unless they can be shown to be ‘‘employed in’’ such operations on other
grounds. But any of them may come
within the exemption in a situation
where the employer can show that the
functions which they perform, in view
of all the facts and circumstances
under which the named operations are
carried on, are actually so integrated
with or essential to the conduct of the
named operations as to be, in practical
effect directly and necessarily a part of
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Wage and Hour Division, Labor
§ 784.144
the operations for which exemption
was intended. Thus, for example, if
canning operations described in section
13(b)(4) are carried on in a location
where the canning employees cannot
obtain necessary food unless the canner provides it, his employment of culinary employees to provide such food is
functionally so necessary to the conduct of the canning operations that
their work is, as a practical matter, a
part of such operations, and the exemption will apply to them. On like principle, the exemption may apply to a
watchman whose services are required
during performance of the named operations in order to guard against spontaneous combustion of the products of
such operations and other occurrences
which may jeopardize the conduct of
the operations.
‘‘CANNING’’
§ 784.142 Meaning and scope of ‘‘canning’’ as used in section 13(b)(4).
Section 13(b)(4) exempts any employee employed in the canning of
aquatic forms of animal or vegetable
life or byproducts thereof from the
overtime requirements of the Act. As
previously stated, it was made a limited exemption by the Fair Labor
Standards Amendments of 1949. The
legislative history of this section in
specifically explaining what types of
activities are included in the term
‘‘canning’’ and the antecedents from
which this section evolved make it
clear that the exemption applies to
those employees employed in the activities that Congress construed as
being embraced in the term and not to
all those engaged in the fish canning
industry (Mitchell v. Stinson, 217 F. 2d
214). Congress defined Report No. 1453,
81st Cong., first session 95 Cong. Rec.
14878, 14932–33) as follows:
Under the conference agreement ‘‘canning’’
means hermetically sealing and sterilizing
or pasteurizing and has reference to a process involving the performance of such operations. It also means other operations performed in connection therewith such as necessary preparatory operations performed on
the products before they are placed in bottles, cans, or other containers to be hermetically sealed, as well as the actual placing of
the commodities in such containers. Also included are subsequent operations such as the
labeling of the cans or other cases or boxes
whether such subsequent operations are performed as part of an uninterrupted or interrupted process. It does not include the placing of such products or byproducts thereof in
cans or other containers that are not hermetically sealed as such an operation is
‘‘processing’’ as distinguished from ‘‘canning’’ and comes within the complete exemption contained in section 13(a)(5).
Of course, the processing other than
canning, referred to in the last sentence quoted above, is now like canning, in section 13(a)(5).
§ 784.143 ‘‘Necessary preparatory operations.’’
All necessary preparatory work performed on the named aquatic products
as an integral part of a single uninterrupted canning process is subject to
section 13(b)(4) (see Tobin v. Blue Channel Corp., 198 F. 2d 245, approved in
Mitchell v. Myrtle Grove Packing Co., 350
U.S. 891). Such activities conducted as
essential and integrated steps in the
continuous and uninterrupted process
of canning are clearly within the definition of ‘‘canning’’ as contemplated
by Congress and cannot be viewed in
isolation from the canning process as a
whole. Exempt preparatory operations
include the necessary weighing, cleaning, picking, peeling, shucking, cutting, heating, cooling, steaming, mixing, cooking, carrying, conveying, and
transferring to the containers the exempt aquatic products (see Mitchell v.
Stinson, 217 F. 2d 214). But the preparatory operations do not include operations specified in section 13(a)(5)
pertaining to the acquisition of the exempt products from nature. Therefore,
if a canner employs fishermen or others to catch, take, harvest, cultivate or
farm aquatic animal and vegetable life,
section 13(a)(5) and not section 13(b)(4)
would apply to these particular operations.
§ 784.144 Preliminary
the canner.
processing
The mere fact that operations preparatory to canning are physically separated from the main canning operations of hermetically sealing and
sterilizing or pasteurizing would not be
sufficient to remove them from the
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§ 784.145
29 CFR Ch. V (7–1–19 Edition)
scope of section 13(b)(4). Where preparatory operations such as the steaming or shucking of oysters are performed in an establishment owned, operated, or controlled by a canner of
seafood as part of a process consisting
of continuous series of operations in
which such products are hermetically
sealed in containers and sterilized or
pasteurized, all employees who perform
any part of such series of operations on
any portion of such aquatic products
for canning purposes are within the
scope of the term ‘‘canning.’’
employees of the cannery in connection
with its canned products, during weeks
in which canning operations are going
on, to make room for the canned products coming off the line or to make
storage room, come within the exemption. The fact that such activities relate in part to products canned during
the previous weeks or seasons would
not affect the application of the exemption, provided canning operations
such as hermetic sealing and sterilizing, or labeling, are currently being
carried on.
§ 784.145 Preliminary processing by
another employer as part of ‘‘canning.’’
If the operations of separate processors are integrated in producing
canned seafood products all employees
of such processors who perform any
part of the described continuous series
of operations to accomplish this result
would be ‘‘employed in the canning of’’
such products. Moreover, preliminary
operations performed in a separately
owned processing establishment which
are directed toward the particular requirements of a cannery pursuant to
some definite arrangement between the
operators of the two establishments
would generally appear to be integrated with the cannery operations
within the meaning of the above principles, so that the employees engaged
in the preliminary operations in the
separate establishment would be employed in ‘‘canning’’ within the meaning of section 13(b)(4) of the Act.
Whether or not integration exists in a
specific case of this general nature will
depend, of course, upon all the relevant
facts and circumstances in such case.
§ 784.147 Employees
canning.
§ 784.146 ‘‘Subsequent operations.’’
Canning, within the meaning of the
exemption, includes operations performed after hermetic sealing of the
cans or other containers, such as labeling of them and placing of them in
cases or boxes, which are required to
place the canned product in the form in
which it will be sold or shipped by the
canner. This is so whether or not such
operations immediately follow the actual canning operations as a part of an
uninterrupted process. Storing and
shipping operations performed by the
‘‘employed
All employees whose activities are
directly and necessarily a part of the
canning of the specified aquatic forms
of life are within the exemption provided by section 13(b)(4). Thus, employees engaged in handling the fish or seafood, placing it into the cans, providing
steam for cooking it or operating the
machinery that seals the cans or the
equipment that sterilizes the canned
product are engaged in exempt activities. In addition, can loft workers,
those engaged in removing and carrying supplies from the stock room for
current use in canning operations, and
employees whose duty it is to re-form
cans, when canning operations are
going on, for current use, are engaged
in exempt activities. Similarly, the repairing, oiling, or greasing during the
active season of canning machinery or
equipment currently used in the actual
canning operations are exempt activities. The making of repairs in the production room such as to the floor
around the canning machinery or
equipment would also be deemed exempt activities where the repairs are
essential to the continued canning operations or to prevent interruptions in
the canning operations. These examples are illustrative but not exhaustive. Employees engaged in other activities which are similarly integrated
with and necessary to the actual conduct of the canning operations will also
come within the exemption. Employees
whose work is not directly and necessarily a part of the canning operations are not exempt. See §§ 784.106,
784.140, and 784.141.
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Wage and Hour Division, Labor
§ 784.152
PROCESSING, FREEZING, AND CURING
§ 784.148 General scope of processing,
freezing, and curing activities.
Processing, freezing, and curing embrace a variety of operations that
change the form of the ‘‘aquatic forms
of animal and vegetable life.’’ They include such operations as filleting, cutting, scaling, salting, smoking, drying,
pickling, curing, freezing, extracting
oil, manufacturing meal or fertilizer,
drying seaweed preparatory to the
manufacture of agar, drying and cleaning sponges (Feming v. Hawkeye Pearl
Button Co., 113 F. 2d 52).
§ 784.149 Typical operations that may
qualify for exemption.
Such operations as transporting the
specified aquatic products to the processing plant; moving the products from
place to place in the plant; cutting,
trimming, eviscerating, peeling, shelling, and otherwise working on the
products; packing the products; and
moving the products from the production line to storage or to the shipping
platform are typical of the operations
in processing plants which are included
in the exemption. Removal of waste,
such as clam and oyster shells, operation of processing and packing machinery, and providing steam and brine
for the processing operations (see
Mitchell v. Trade Winds Inc., 289 F. 2d
278, explaining Waller v. Humphreys, 133
F. 2d 193) are also included. As for the
application of the exemption to office,
maintenance, warehouse, and other
employees, see the discussion in
§ 784.106 et seq., and §§ 784.140 and 784.141.
§ 784.150 Named operations performed
on previously processed aquatic
products.
It will be noted that section 13(b)(4)
refers to employees employed in
‘‘processing’’ the named aquatic commodities and not just to ‘‘first processing’’ as does the provision in section
13(a)(5) for such processing at sea. Accordingly, if the aquatic products,
though subjected to a processing operation, are still in a perishable state,
the subsequent performance of any of
the enumerated operations on the still
perishable products will be within the
exemption no matter who the employer
performing the exempt operations may
be. He may be the same employer who
performed the prior processing or other
exempt operation, another processor,
or a wholesaler, as the case may be. As
noted in § 784.138(b), the Department
has not questioned the applicability of
the foregoing rule where the operation
is performed on frozen, salted, smoked,
or cured fish.
§ 784.151 Operations performed after
product is rendered nonperishable.
As indicated in § 784.138, after the
character of the aquatic products as
taken from nature has been altered by
the performance of the enumerated operations so as to render them nonperishable (e.g., drying and cleaning
sponges) section 13(b)(4) provides no exemption for any subsequent operations
on the preserved products, unless the
subsequent operation is performed as
an integrated part of the operations
named in the exemption which are performed by an employer on aquatic commodities described in section 13(b)(4)
after receiving them in the perishable
state. In the case of an employer who is
engaged in performing on perishable
aquatic forms of life specified in section 13(b)(4) any operations named in
that section which result in a nonperishable product, the employment of
his employees in the storing, marketing, packing for shipment, or distributing of nonperishable products resulting from such operations performed
by him (including products processed
during previous weeks or seasons) will
be considered to be an integrated part
of his operations on the perishable
aquatic forms of life during those
workweeks when he is actively engaged
in such operations. The employees employed by him in such work on the nonperishable products are, accordingly,
within the exemption in such workweeks.
§ 784.152 Operations performed on byproducts.
The principles stated in the two preceding sections would also be applicable where the specified operations are
performed on perishable byproducts.
Any operation performed on perishable
fish scraps, an unsegregated portion of
which is to be canned, would come
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§ 784.153
29 CFR Ch. V (7–1–19 Edition)
within the canning (not the processing)
part of the exemption. Fish-reduction
operations performed on the inedible
and still perishable portions of fish resulting from processing or canning operations, to produce fish oil or meal,
would come within the processing part
of the exemption. Subsequent operations on the oil to fortify it would not
be exempt, however, since fish oil is
nonperishable in the sense that it may
be held for a substantial period of time
without deterioration.
MARKETING, STORING, PACKING FOR
SHIPMENT, AND DISTRIBUTING
§ 784.153 General scope of named operations.
The exemption from the overtime
pay requirements provided by section
13(b)(4) of the Act extends to employees
‘‘employed in the * * * marketing * * *
storing, packing for shipment, or distributing of any kind of’’ perishable
aquatic product named in the section.
An employee’s work must be functionally so related to the named activity as
to be, in practical effect, a part of it,
and the named activity must be performed with respect to the perishable
aquatic commodities listed in section
13(b)(4), in order for the exemption to
apply to him. The named activities include the operations customarily performed in the marketing, storing,
packing for shipment, or distributing
of perishable marine products. For example, an employee engaged in placing
perishable marine products in boxes,
cartons, crates, bags, barrels, etc., preparatory to shipment and placing the
loaded containers on conveyances for
delivery to customers would be employed in the ‘‘packing for shipment’’
of such products. Salesmen taking orders for the perishable aquatic products named in the section would be employed in the ‘‘marketing’’ of them.
Employees of a refrigerated warehouse
who perform only duties involved in
placing such perishable marine products in the refrigerated space, removing them from it, and operating the refrigerating equipment, would be employed in ‘‘storing’’ or ‘‘distributing’’
such products, depending on the facts.
On the other hand, employees of a public warehouse handling aquatic prod-
ucts which have been canned or otherwise rendered nonperishable, or handling perishable products which contain substantial amount of ingredients
not named in section 13(b)(4), would
not be within the exemption. Office,
clerical, maintenance, and custodial
employees are not exempt by reason of
the fact that they are employed by employers engaged in marketing, storing,
packing for shipment, or distributing
seafood and other aquatic products.
Such employees are exempt only when
the facts of their employment establish
that they are performing functions so
necessary to the actual conduct of such
operations by the employer that, as a
practical matter, their employment is
directly and necessarily a part of the
operations intended to be exempted
(see, for some examples, § 784.155).
§ 784.154 Relationship to other operations as affecting exemption.
Employment in marketing, storing,
distributing, and packing for shipment
of the aquatic commodities described
in section 13(b)(4) is, as such, exempted
from the overtime pay provisions of
the Act. This means that the employees actually employed in such operations on the named commodities are
within the exemption without regard
to the intimacy or remoteness of the
relationship between their work and
processing operations also performed
on the commodities, so long as any
prior processing has not rendered the
commodity nonperishable (as in the
case of a canned product) and therefore
removed it from the category of marine products referred to by section
13(b)(4). If the commodity has previously been rendered nonperishable,
the marketing, storing, distributing, or
packing for shipment of it by an employee can come within the exemption
only if the activity is one performed by
his employer as an integrated part of a
series of the named operations which
commenced with operations on the perishable marine products to which section 13(b)(4) refers. Some examples of
this situation are given in §§ 784.146 and
784.151.
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Wage and Hour Division, Labor
Pt. 785
§ 784.155 Activities
performed
in
wholesale establishments.
The section 13(b)(4) exemption for
employment in ‘‘marketing * * * storing, or distributing’’ the named aquatic
products or byproducts, as applied to
the wholesaling of fish and seafood, affords exemption to such activities as
unloading the aquatic product at the
establishment, icing or refrigerating
the product and storing it, placing the
product into boxes, and loading the
boxes on trucks or other transportation facilities for shipment to retailers or other receivers. Transportation
to and from the establishment is also
included (Johnson v. Johnson & Company, Inc., N.D. Ga., 47 F. Supp. 650).
Office and clerical employees of a
wholesaler who perform general office
work such as posting to ledgers, sending bills and statements, preparing tax
returns, and making up payrolls, are
not exempt unless these activities can
be shown to be functionally necessary,
in the particular fact situation, to the
actual conduct of the operations named
in section 13(b)(4). Such activities as
selling, taking, and putting up orders,
recording sales, and taking cash are,
however, included in employment in
‘‘marketing’’ or ‘‘distributing’’ within
the exemption. Employees of a wholesaler engaged in the performance of
any of the enumerated operations on
fresh fish or fish products will be engaged in exempt work. However, any
such operations which they perform on
aquatic products which have been
canned or otherwise rendered nonperishable are nonexempt in accordance with the principles stated in
§§ 784.138 and 784.154.
APPLICATION OF SECTION 13(b)(4) IN
CERTAIN ESTABLISHMENTS
§ 784.156 Establishments
exclusively
devoted to named operations.
As noted in § 784.106 and elsewhere in
the previous discussion, the section
13(b)(4) exemption depends on employment of the employee in the operations
named in that section and does not
apply on an establishment basis. However, the fact that an establishment is
exclusively devoted to operations specified in section 13(b)(4) is, in the absence of evidence to the contrary, an
indication that the employees employed there are employed in the
named operations either directly or
through the performance of functions
so necessary to conducting the operations that the employment should, in
practical effect, be considered a part of
the activity intended to be exempted.
Where this is the case, it is consistent
with the legislative intent to avoid segmentation and treat all employees of
the establishment in the same manner
(see Sen. Rep. No. 145, 87th Cong. first
session, p. 33). Accordingly, where it
can be demonstrated that an establishment is, during a particular workweek,
devoted exclusively to the performance
of the operations named in section
13(b)(4), on the forms of aquatic life
there specified, any employee of the establishment who is employed there
during such workweek will be considered to be employed in such operations
and to come within the exemption if
there are no other facts pertinent to
his employment that require a particular examination of the functions
which he performs in connection with
the conduct of the named operations.
If, however, there are any facts (for example, the employment of the same
employee at the establishment or the
engagement by other employees in like
duties there during periods when none
of the named operations are being carried on) which raise questions as to
whether he is actually engaged in the
exempt activities, it will be necessary
to scrutinize what he is actually doing
during the conduct of the operations
named in section 13(b)(4) in order to determine the applicability of the exemption to him. This is necessary because
an employee who would not otherwise
be within the exemption such as a carpenter doing repair work during the
dead season, does not become exempt
as ‘‘employed in’’ one of the named activities merely because the establishment begins canning or processing fish.
PART 785—HOURS WORKED
Subpart A—General Considerations
Sec.
785.1 Introductory statement.
785.2 Decisions on interpretations; use of interpretations.
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§ 785.1
29 CFR Ch. V (7–1–19 Edition)
785.3 Period of effectiveness of interpretations.
785.4 Application to Walsh-Healey Public
Contracts Act.
Subpart B—Principles for Determination of
Hours Worked
785.5 General requirements of sections 6 and
7 of the Fair Labor Standards Act.
785.6 Definition of ‘‘employ’’ and partial
definition of ‘‘hours worked’’.
785.7 Judicial construction.
785.8 Effect of custom, contract, or agreement.
785.9 Statutory exceptions.
Subpart C—Application of Principles
785.10
ADJUSTING GRIEVANCES, MEDICAL ATTENTION,
CIVIC AND CHARITABLE WORK, AND SUGGESTION SYSTEMS
785.42
785.43
785.44
785.45
Scope of subpart.
EMPLOYEES ‘‘SUFFERED OR PERMITTED’’ TO
WORK
785.11 General.
785.12 Work performed away from the premises or job site.
785.13 Duty of management.
WAITING TIME
785.14 General.
785.15 On duty.
785.16 Off duty.
785.17 On-call time.
Adjusting grievances.
Medical attention.
Civic and charitable work.
Suggestion systems.
Subpart D—Recording Working Time
785.46 Applicable
regulations
governing
keeping of records.
785.47 Where records show insubstantial or
insignificant periods of time.
785.48 Use of time clocks.
Subpart E—Miscellaneous Provisions
785.49 Applicable provisions of the Fair
Labor Standards Act.
785.50 Section 4 of the Portal-to-Portal Act.
REST AND MEAL PERIODS
785.18
785.19
785.34 Effect of section 4 of the Portal-toPortal Act.
785.35 Home to work; ordinary situation.
785.36 Home to work in emergency situations.
785.37 Home to work on special one-day assignment in another city.
785.38 Travel that is all in the day’s work.
785.39 Travel away from home community.
785.40 When private automobile is used in
travel away from home community.
785.41 Work performed while traveling.
Rest.
Meal.
AUTHORITY: 52 Stat. 1060; 29 U.S.C. 201–219;
29 U.S.C. 254. Pub. L. 104–188, 100 Stat. 1755.
SLEEPING TIME AND CERTAIN OTHER
ACTIVITIES
SOURCE: 26 FR 190, Jan. 11, 1961, unless otherwise noted.
785.20 General.
785.21 Less than 24-hour duty.
785.22 Duty of 24 hours or more.
785.23 Employees residing on employer’s
premises or working at home.
Subpart A—General
Considerations
PREPARATORY AND CONCLUDING ACTIVITIES
785.24 Principles noted in Portal-to-Portal
Bulletin.
785.25 Illustrative U.S. Supreme Court decisions.
785.26 Section 3(o) of the Fair Labor Standards Act.
LECTURES, MEETINGS AND TRAINING
PROGRAMS
785.27 General.
785.28 Involuntary attendance.
785.29 Training directly related to employee’s job.
785.30 Independent training.
785.31 Special situations.
785.32 Apprenticeship training.
TRAVELTIME
785.33
General.
§ 785.1
Introductory statement.
Section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206) requires
that each employee, not specifically
exempted, who is engaged in commerce, or in the production of goods for
commerce, or who is employed in an
enterprise engaged in commerce, or in
the production of goods for commerce
receive a specified minimum wage. Section 7 of the Act (29 U.S.C. 207) provides
that persons may not be employed for
more than a stated number of hours a
week without receiving at least one
and one-half times their regular rate of
pay for the overtime hours. The
amount of money an employee should
receive cannot be determined without
knowing the number of hours worked.
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Wage and Hour Division, Labor
§ 785.7
This part discusses the principles involved in determining what constitutes
working time. It also seeks to apply
these principles to situations that frequently arise. It cannot include every
possible situation. No inference should
be drawn from the fact that a subject
or an illustration is omitted. If doubt
arises inquiries should be sent to the
Administrator of the Wage and Hour
Division, U.S. Department of Labor,
Washington, DC 20210, or to any area or
Regional Office of the Division.
[35 FR 15289, Oct. 1, 1970]
§ 785.2 Decisions on interpretations;
use of interpretations.
sions of the Walsh-Healey Public Contracts Act.
[35 FR 15289, Oct. 1, 1970]
Subpart B—Principles for
Determination of Hours Worked
§ 785.5 General requirements of sections 6 and 7 of the Fair Labor
Standards Act.
Section 6 requires the payment of a
minimum wage by an employer to his
employees who are subject to the Act.
Section 7 prohibits their employment
for more than a specified number of
hours per week without proper overtime compensation.
The ultimate decisions on interpretations of the act are made by the courts.
The Administrator must determine in
the first instance the positions he will
take in the enforcement of the Act.
The regulations in this part seek to inform the public of such positions. It
should thus provide a ‘‘practical guide
for employers and employees as to how
the office representing the public interest in its enforcement will seek to
apply it.’’ (Skidmore v. Swift, 323 U.S.
134, 138 (1944).)
[26 FR 7732, Aug. 18, 1961]
§ 785.3 Period of effectiveness of interpretations.
§ 785.7 Judicial construction.
The United States Supreme Court
originally stated that employees subject to the act must be paid for all time
spent in ‘‘physical or mental exertion
(whether burdensome or not) controlled or required by the employer and
pursued necessarily and primarily for
the benefit of the employer and his
business.’’ (Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123, 321 U.
S. 590 (1944)) Subsequently, the Court
ruled that there need be no exertion at
all and that all hours are hours worked
which the employee is required to give
his employer, that ‘‘an employer, if he
chooses, may hire a man to do nothing,
or to do nothing but wait for something to happen. Refraining from other
activity often is a factor of instant
readiness to serve, and idleness plays a
part in all employments in a stand-by
capacity. Readiness to serve may be
hired, quite as much as service itself,
and time spent lying in wait for
threats to the safety of the employer’s
property may be treated by the parties
These interpretations will remain in
effect until they are rescinded, modified or withdrawn. This will be done
when and if the Administrator concludes upon reexamination, or in the
light of judicial decision, that a particular interpretation, ruling or enforcement policy is incorrect or unwarranted. All other rulings, interpretations or enforcement policies inconsistent with any portion of this part
are superseded by it. The Portal-toPortal Bulletin (part 790 of this chapter) is still in effect except insofar as it
may not be consistent with any portion
hereof. The applicable statutory provisions are set forth in § 785.50.
§ 785.4 Application to Walsh-Healey
Public Contracts Act.
The principles set forth in this part
are also followed by the Administrator
of the Wage and Hour Division in determining hours worked by employees
performing work subject to the provi-
§ 785.6 Definition of ‘‘employ’’ and partial definition of ‘‘hours worked’’.
By statutory definition the term
‘‘employ’’ includes (section 3(g)) ‘‘to
suffer or permit to work.’’ The act,
however, contains no definition of
‘‘work’’. Section 3(o) of the Fair Labor
Standards Act contains a partial definition of ‘‘hours worked’’ in the form
of a limited exception for clotheschanging and wash-up time.
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§ 785.8
29 CFR Ch. V (7–1–19 Edition)
as a benefit to the employer.’’ (Armour
& Co. v. Wantock, 323 U.S. 126 (1944);
Skidmore v. Swift, 323 U.S. 134 (1944))
The workweek ordinarily includes ‘‘all
the time during which an employee is
necessarily required to be on the employer’s premises, on duty or at a prescribed work place’’. (Anderson v. Mt.
Clemens Pottery Co., 328 U.S. 680 (1946))
The Portal-to-Portal Act did not
change the rule except to provide an
exception
for
preliminary
and
postliminary activities. See § 785.34.
[26 FR 190, Jan. 11, 1961, as amended at 76 FR
18859, Apr. 5, 2011]
§ 785.8 Effect of custom, contract, or
agreement.
The principles are applicable, even
though there may be a custom, contract, or agreement not to pay for the
time so spent with special statutory
exceptions discussed in §§ 785.9 and
785.26.
[35 FR 15289, Oct. 1, 1970]
§ 785.9
Statutory exemptions.
(a) The Portal-to-Portal Act. The Portal-to-Portal Act (secs. 1–13, 61 Stat.
84–89, 29 U.S.C. 251–262) eliminates from
working time certain travel and walking time and other similar ‘‘preliminary’’ and ‘‘postliminary’’ activities
performed ‘‘prior’’ or ‘‘subsequent’’ to
the ‘‘workday’’ that are not made compensable by contract, custom, or practice. It should be noted that ‘‘preliminary’’ activities do not include ‘‘principal’’ activities. See §§ 790.6 to 790.8 of
this chapter. The use of an employer’s
vehicle for travel by an employee and
activities that are incidental to the use
of such vehicle for commuting are not
considered ‘‘principal’’ activities when
meeting the following conditions: The
use of the employer’s vehicle for travel
is within the normal commuting area
for the employer’s business or establishment and the use of the employer’s
vehicle is subject to an agreement on
the part of the employer and the employee or the representative of such
employee. Section 4 of the Portal-toPortal Act does not affect the computation of hours worked within the
‘‘workday’’. ‘‘Workday’’ in general,
means the period between ‘‘the time on
any particular workday at which such
employee commences (his) principal
activity or activities’’ and ‘‘the time
on any particular workday at which he
ceases such principal activity or activities.’’ The ‘‘workday’’ may thus be
longer than the employee’s scheduled
shift, hours, tour of duty, or time on
the production line. Also, its duration
may vary from day to day depending
upon when the employee commences or
ceases his ‘‘principal’’ activities. With
respect to time spent in any ‘‘preliminary’’ or ‘‘postliminary’’ activity compensable by contract, custom, or practice, the Portal-to-Portal Act requires
that such time must also be counted
for purposes of the Fair Labor Standards Act. There are, however, limitations on this requirement. The ‘‘preliminary’’ or ‘‘postliminary’’ activity
in question must be engaged in during
the portion of the day with respect to
which it is made compensable by the
contract, custom, or practice. Also,
only the amount of time allowed by the
contract or under the custom or practice is required to be counted. If, for
example, the time allowed is 15 minutes but the activity takes 25 minutes,
the time to be added to other working
time would be limited to 15 minutes.
(Galvin v. National Biscuit Co., 82 F.
Supp. 535 (S.D.N.Y. 1949) appeal dismissed, 177 F. 2d 963 (C.A. 2, 1949))
(b) Section 3(o) of the Fair Labor
Standards Act. Section 3(o) gives statutory effect, as explained in § 785.26, to
the exclusion from measured working
time of certain clothes-changing and
washing time at the beginning or the
end of the workday by the parties to
collective bargaining agreements.
[26 FR 190, Jan. 11, 1961, as amended at 30 FR
9912, Aug. 10, 1965; 76 FR 18859, Apr. 5, 2011]
Subpart C—Application of
Principles
§ 785.10 Scope of subpart.
This subpart applies the principles to
the problems which arise frequently.
EMPLOYEES ‘‘SUFFERED OR PERMITTED’’
TO WORK
§ 785.11 General.
Work not requested but suffered or
permitted is work time. For example,
an employee may voluntarily continue
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Wage and Hour Division, Labor
§ 785.16
to work at the end of the shift. He may
be a pieceworker, he may desire to finish an assigned task or he may wish to
correct errors, paste work tickets, prepare time reports or other records. The
reason is immaterial. The employer
knows or has reason to believe that he
is continuing to work and the time is
working time. (Handler v. Thrasher, 191,
F. 2d 120 (C.A. 10, 1951); Republican Publishing Co. v. American Newspaper Guild,
172 F. 2d 943 (C.A. 1, 1949; Kappler v. Republic Pictures Corp., 59 F. Supp. 112
(S.D. Iowa 1945), aff’d 151 F. 2d 543 (C.A.
8, 1945); 327 U.S. 757 (1946); Hogue v. National Automotive Parts Ass’n. 87 F.
Supp. 816 (E.D. Mich. 1949); Barker v.
Georgia Power & Light Co., 2 W.H. Cases
486; 5 CCH Labor Cases, para. 61,095
(M.D. Ga. 1942); Steger v. Beard & Stone
Electric Co., Inc., 1 W.H. Cases 593; 4
Labor Cases 60,643 (N.D. Texas, 1941))
§ 785.12 Work performed away from
the premises or job site.
The rule is also applicable to work
performed away from the premises or
the job site, or even at home. If the employer knows or has reason to believe
that the work is being performed, he
must count the time as hours worked.
§ 785.13 Duty of management.
In all such cases it is the duty of the
management to exercise its control and
see that the work is not performed if it
does not want it to be performed. It
cannot sit back and accept the benefits
without compensating for them. The
mere promulgation of a rule against
such work is not enough. Management
has the power to enforce the rule and
must make every effort to do so.
may show that he waited to be engaged.’’ (Skidmore v. Swift, 323 U.S. 134
(1944)) Such questions ‘‘must be determined in accordance with common
sense and the general concept of work
or employment.’’ (Central Mo. Tel. Co.
v. Conwell, 170 F. 2d 641 (C.A. 8, 1948))
§ 785.15
A stenographer who reads a book
while waiting for dictation, a messenger who works a crossword puzzle
while awaiting assignments, fireman
who plays checkers while waiting for
alarms and a factory worker who talks
to his fellow employees while waiting
for machinery to be repaired are all
working during their periods of inactivity. The rule also applies to employees who work away from the plant. For
example, a repair man is working while
he waits for his employer’s customer to
get the premises in readiness. The time
is worktime even though the employee
is allowed to leave the premises or the
job site during such periods of inactivity. The periods during which these
occur are unpredictable. They are usually of short duration. In either event
the employee is unable to use the time
effectively for his own purposes. It belongs to and is controlled by the employer. In all of these cases waiting is
an integral part of the job. The employee is engaged to wait. (See:
Skidmore v. Swift, 323 U.S. 134, 137 (1944);
Wright v. Carrigg, 275 F. 2d 448, 14 W.H.
Cases (C.A. 4, 1960); Mitchell v. Wigger,
39 Labor Cases, para. 66,278, 14 W.H.
Cases 534 (D.N.M. 1960); Mitchell v. Nicholson, 179 F. Supp, 292,14 W.H. Cases 487
(W.D.N.C. 1959))
§ 785.16
WAITING TIME
§ 785.14 General.
Whether waiting time is time worked
under the Act depends upon particular
circumstances. The determination involves ‘‘scrutiny and construction of
the agreements between particular parties, appraisal of their practical construction of the working agreement by
conduct, consideration of the nature of
the service, and its relation to the
waiting time, and all of the circumstances. Facts may show that the
employee was engaged to wait or they
On duty.
Off duty.
(a) General. Periods during which an
employee is completely relieved from
duty and which are long enough to enable him to use the time effectively for
his own purposes are not hours worked.
He is not completely relieved from
duty and cannot use the time effectively for his own purposes unless he is
definitely told in advance that he may
leave the job and that he will not have
to commence work until a definitely
specified hour has arrived. Whether the
time is long enough to enable him to
use the time effectively for his own
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§ 785.17
29 CFR Ch. V (7–1–19 Edition)
purposes depends upon all of the facts
and circumstances of the case.
(b) Truck drivers; specific examples. A
truck driver who has to wait at or near
the job site for goods to be loaded is
working during the loading period. If
the driver reaches his destination and
while awaiting the return trip is required to take care of his employer’s
property, he is also working while
waiting. In both cases the employee is
engaged to wait. Waiting is an integral
part of the job. On the other hand, for
example, if the truck driver is sent
from Washingtion, DC to New York
City, leaving at 6 a.m. and arriving at
12 noon, and is completely and specifically relieved from all duty until 6 p.m.
when he again goes on duty for the return trip the idle time is not working
time. He is waiting to be engaged.
(Skidmore v. Swift, 323 U.S. 134, 137
(1944); Walling v. Dunbar Transfer &
Storage, 3 W.H. Cases 284; 7 Labor Cases
para. 61,565 (W.D. Tenn. 1943); Gifford v.
Chapman, 6 W.H. Cases 806; 12 Labor
Cases para. 63,661 (W.D. Okla., 1947);
Thompson v. Daugherty, 40 Supp. 279 (D.
Md. 1941))
§ 785.17 On-call time.
An employee who is required to remain on call on the employer’s premises or so close thereto that he cannot
use the time effectively for his own
purposes is working while ‘‘on call’’.
An employee who is not required to remain on the employer’s premises but is
merely required to leave word at his
home or with company officials where
he may be reached is not working while
on call. (Armour & Co. v. Wantock, 323
U.S. 126 (1944); Handler v. Thrasher, 191
F. 2d 120 (C.A. 10, 1951); Walling v. Bank
of Waynesboro, Georgia, 61 F. Supp. 384
(S.D. Ga. 1945))
REST AND MEAL PERIODS
§ 785.18 Rest.
Rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. They
promote the efficiency of the employee
and are customarily paid for as working time. They must be counted as
hours worked. Compensable time of
rest periods may not be offset against
other working time such as compen-
sable waiting time or on-call time.
(Mitchell v. Greinetz, 235 F. 2d 621, 13
W.H. Cases 3 (C.A. 10, 1956); Ballard v.
Consolidated Steel Corp., Ltd., 61 F.
Supp. 996 (S.D. Cal. 1945))
§ 785.19
Meal.
(a) Bona fide meal periods. Bona fide
meal periods are not worktime. Bona
fide meal periods do not include coffee
breaks or time for snacks. These are
rest periods. The employee must be
completely relieved from duty for the
purposes of eating regular meals. Ordinarily 30 minutes or more is long
enough for a bona fide meal period. A
shorter period may be long enough
under special conditions. The employee
is not relieved if he is required to perform any duties, whether active or inactive, while eating. For example, an
office employee who is required to eat
at his desk or a factory worker who is
required to be at his machine is working while eating. (Culkin v. Glenn L.
Martin, Nebraska Co., 97 F. Supp. 661 (D.
Neb. 1951), aff’d 197 F. 2d 981 (C.A. 8,
1952), cert. denied 344 U.S. 888 (1952);
Thompson v. Stock & Sons, Inc., 93 F.
Supp. 213 (E.D. Mich 1950), aff’d 194 F.
2d 493 (C.A. 6, 1952); Biggs v. Joshua
Hendy Corp., 183 F. 2d 515 (C. A. 9, 1950),
187 F. 2d 447 (C.A. 9, 1951); Walling v.
Dunbar Transfer & Storage Co., 3 W.H.
Cases 284; 7 Labor Cases para. 61.565
(W.D. Tenn. 1943); Lofton v. Seneca Coal
and Coke Co., 2 W.H. Cases 669; 6 Labor
Cases para. 61,271 (N.D. Okla. 1942);
aff’d 136 F. 2d 359 (C.A. 10, 1943); cert.
denied 320 U.S. 772 (1943); Mitchell v.
Tampa Cigar Co., 36 Labor Cases para.
65, 198, 14 W.H. Cases 38 (S.D. Fla. 1959);
Douglass v. Hurwitz Co., 145 F. Supp. 29,
13 W.H. Cases (E.D. Pa. 1956))
(b) Where no permission to leave premises. It is not necessary that an employee be permitted to leave the premises if he is otherwise completely freed
from duties during the meal period.
SLEEPING TIME AND CERTAIN OTHER
ACTIVITIES
§ 785.20
General.
Under certain conditions an employee is considered to be working even
though some of his time is spent in
sleeping or in certain other activities.
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Wage and Hour Division, Labor
§ 785.24
§ 785.21 Less than 24-hour duty.
An employee who is required to be on
duty for less than 24 hours is working
even though he is permitted to sleep or
engage in other personal activities
when not busy. A telephone operator,
for example, who is required to be on
duty for specified hours is working
even though she is permitted to sleep
when not busy answering calls. It
makes no difference that she is furnished facilities for sleeping. Her time
is given to her employer. She is required to be on duty and the time is
worktime. (Central Mo. Telephone Co. v.
Conwell, 170 F. 2d 641 (C.A. 8, 1948);
Strand v. Garden Valley Telephone Co.,
51 F. Supp. 898 (D. Minn. 1943); Whitsitt
v. Enid Ice & Fuel Co., 2 W. H. Cases 584;
6 Labor Cases para. 61,226 (W.D. Okla.
1942).)
§ 785.22 Duty of 24 hours or more.
(a) General. Where an employee is required to be on duty for 24 hours or
more, the employer and the employee
may agree to exclude bona fide meal
periods and a bona fide regularly scheduled sleeping period of not more than 8
hours from hours worked, provided adequate sleeping facilities are furnished
by the employer and the employee can
usually enjoy an uninterrupted night’s
sleep. If sleeping period is of more than
8 hours, only 8 hours will be credited.
Where no expressed or implied agreement to the contrary is present, the 8
hours of sleeping time and lunch periods constitute hours worked. (Armour
v. Wantock, 323 U.S. 126 (1944); Skidmore
v. Swift, 323 U.S. 134 (1944); General Electric Co. v. Porter, 208 F. 2d 805 (C.A. 9,
1953), cert. denied, 347 U.S. 951, 975
(1954); Bowers v. Remington Rand, 64 F.
Supp. 620 (S.D. Ill, 1946), aff’d 159 F. 2d
114 (C.A. 7, 1946) cert. denied 330 U.S.
843 (1947); Bell v. Porter, 159 F. 2d 117
(C.A. 7, 1946) cert. denied 330 U.S. 813
(1947); Bridgeman v. Ford, Bacon &
Davis, 161 F. 2d 962 (C.A. 8, 1947); Rokey
v. Day & Zimmerman, 157 F. 2d 736 (C.A.
8, 1946); McLaughlin v. Todd & Brown,
Inc., 7 W.H. Cases 1014; 15 Labor Cases
para. 64,606 (N.D. Ind. 1948); Campbell v.
Jones & Laughlin, 70 F. Supp. 996 (W.D.
Pa. 1947).)
(b) Interruptions of sleep. If the sleeping period is interrupted by a call to
duty, the interruption must be counted
as hours worked. If the period is interrupted to such an extent that the employee cannot get a reasonable night’s
sleep, the entire period must be counted. For enforcement purposes, the
Divisons have adopted the rule that if
the employee cannot get at least 5
hours’ sleep during the scheduled period the entire time is working time.
(See Eustice v. Federal Cartridge Corp.,
66 F. Supp. 55 (D. Minn. 1946).)
§ 785.23 Employees residing on employer’s premises or working at
home.
An employee who resides on his employer’s premises on a permanent basis
or for extended periods of time is not
considered as working all the time he
is on the premises. Ordinarily, he may
engage in normal private pursuits and
thus have enough time for eating,
sleeping, entertaining, and other periods of complete freedom from all duties
when he may leave the premises for
purposes of his own. It is, of course, difficult to determine the exact hours
worked under these circumstances and
any reasonable agreement of the parties which takes into consideration all
of the pertinent facts will be accepted.
This rule would apply, for example, to
the pumper of a stripper well who resides on the premises of his employer
and also to a telephone operator who
has the switchboard in her own home.
(Skelly Oil Co. v. Jackson, 194 Okla. 183,
148 P. 2d 182 (Okla. Sup. Ct. 1944;
Thompson v. Loring Oil Co., 50 F. Supp.
213 (W.D. La. 1943).)
PREPARATORY AND CONCLUDING
ACTIVITIES
§ 785.24 Principles noted in Portal-toPortal Bulletin.
In November, 1947, the Administrator
issued the Portal-to-Portal Bulletin
(part 790 of this chapter). In dealing
with this subject, § 790.8 (b) and (c) of
this chapter said:
(b) The term ‘‘principal activities’’ includes all activities which are an integral
part of a principal activity. Two examples of
what is meant by an integral part of a principal activity are found in the report of the
Judiciary Committee of the Senate on the
Portal-to-Portal bill. They are the following:
(1) In connection with the operation of a
lathe, an employee will frequently, at the
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§ 785.25
29 CFR Ch. V (7–1–19 Edition)
commencement of his workday, oil, grease,
or clean his machine, or install a new cutting tool. Such activities are an integral
part of the principal activity, and are included within such term.
(2) In the case of a garment worker in a
textile mill, who is required to report 30 minutes before other employees report to commence their principal activities, and who
during such 30 minutes distributes clothing
or parts of clothing at the workbenches of
other employees and gets machines in readiness for operation by other employees, such
activities are among the principal activities
of such employee.
Such preparatory activities, which the Administrator has always regarded as work and
as compensable under the Fair Labor Standards Act, remain so under the Portal Act, regardless of contrary custom or contract.
(c) Among the activities included as an integral part of a principal activity are those
closely related activities which are indispensable to its performance. If an employee in a
chemical plant, for example, cannot perform
his principal activities without putting on
certain clothes, changing clothes on the employer’s premises at the beginning and end of
the workday would be an integral part of the
employee’s principal activity. On the other
hand, if changing clothes is merely a convenience to the employee and not directly related to his principal activities, it would be
considered
as
a
‘‘preliminary’’
or
‘‘postliminary’’ activity rather than a principal part of the activity. However, activities
such as checking in and out and waiting in
line to do so would not ordinarily be regarded as integral parts of the principal activity or activities.
§ 785.25 Illustrative
Court decisions.
U.S.
Supreme
These principles have guided the Administrator in the enforcement of the
Act. Two cases decided by the U.S. Supreme Court further illustrate the
types of activities which are considered
an integral part of the employees’ jobs.
In one, employees changed their
clothes and took showers in a battery
plant where the manufacturing process
involved the extensive use of caustic
and toxic materials. (Steiner v. Mitchell,
350 U.S. 247 (1956).) In another case,
knifemen in a meatpacking plant
sharpened their knives before and after
their scheduled workday (Mitchell v.
King Packing Co., 350 U.S. 260 (1956)). In
both cases the Supreme Court held
that these activities are an integral
and indispensable part of the employees’ principal activities.
§ 785.26 Section 3(o) of the Fair Labor
Standards Act.
Section 3(o) of the Act provides an
exception to the general rule for employees under collective bargaining
agreements. This section provides for
the exclusion from hours worked of
time spent by an employee in changing
clothes or washing at the beginning or
end of each workday which was excluded from measured working time
during the week involved by the express terms of or by custom or practice
under a bona fide collective-bargaining
agreement applicable to the particular
employee. During any week in which
such clothes-changing or washing time
was not so excluded, it must be counted as hours worked if the changing of
clothes or washing is indispensable to
the performance of the employee’s
work or is required by law or by the
rules of the employer. The same would
be true if the changing of clothes or
washing
was
a
preliminary
or
postliminary activity compensable by
contract, custom, or practice as provided by section 4 of the Portal-to-Portal Act, and as discussed in § 785.9 and
part 790 of this chapter.
[30 FR 9912, Aug. 10, 1965]
LECTURES, MEETINGS AND TRAINING
PROGRAMS
§ 785.27
General.
Attendance at lectures, meetings,
training programs and similar activities need not be counted as working
time if the following four criteria are
met:
(a) Attendance is outside of the employee’s regular working hours;
(b) Attendance is in fact voluntary;
(c) The course, lecture, or meeting is
not directly related to the employee’s
job; and
(d) The employee does not perform
any productive work during such attendance.
§ 785.28
Involuntary attendance.
Attendance is not voluntary, of
course, if it is required by the employer. It is not voluntary in fact if the
employee is given to understand or led
to believe that his present working
conditions or the continuance of his
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Wage and Hour Division, Labor
§ 785.34
employment would be adversely affected by nonattendance.
§ 785.29 Training directly related to
employee’s job.
The training is directly related to
the employee’s job if it is designed to
make the employee handle his job
more effectively as distinguished from
training him for another job, or to a
new or additional skill. For example, a
stenographer who is given a course in
stenography is engaged in an activity
to make her a better stenographer.
Time spent in such a course given by
the employer or under his auspices is
hours worked. However, if the stenographer takes a course in bookkeeping,
it may not be directly related to her
job. Thus, the time she spends voluntarily in taking such a bookkeeping
course, outside of regular working
hours, need not be counted as working
time. Where a training course is instituted for the bona fide purpose of preparing for advancement through upgrading the employee to a higher skill,
and is not intended to make the employee more efficient in his present
job, the training is not considered directly related to the employee’s job
even though the course incidentally
improves his skill in doing his regular
work.
[30 FR 9912, Aug. 10, 1965]
§ 785.30 Independent training.
Of course, if an employee on his own
initiative attends an independent
school, college or independent trade
school after hours, the time is not
hours worked for his employer even if
the courses are related to his job.
§ 785.31 Special situations.
There are some special situations
where the time spent in attending lectures, training sessions and courses of
instruction is not regarded as hours
worked. For example, an employer may
establish for the benefit of his employees a program of instruction which corresponds to courses offered by independent bona fide institutions of learning. Voluntary attendance by an employee at such courses outside of working hours would not be hours worked
even if they are directly related to his
job, or paid for by the employer.
§ 785.32 Apprenticeship training.
As an enforcement policy, time spent
in an organized program of related,
supplemental instruction by employees
working under bona fide apprenticeship
programs may be excluded from working time if the following criteria are
met:
(a) The apprentice is employed under
a written apprenticeship agreement or
program which substantially meets the
fundamental standards of the Bureau
of Apprenticeship and Training of the
U.S. Department of Labor; and
(b) Such time does not involve productive work or performance of the apprentice’s regular duties. If the above
criteria are met the time spent in such
related supplemental training shall not
be counted as hours worked unless the
written agreement specifically provides that it is hours worked. The mere
payment or agreement to pay for time
spent in related instruction does not
constitute an agreement that such
time is hours worked.
TRAVELTIME
§ 785.33 General.
The principles which apply in determining whether or not time spent in
travel is working time depend upon the
kind of travel involved. The subject is
discussed in §§ 785.35 to 785.41, which are
preceded by a brief discussion in § 785.34
of the Portal-to-Portal Act as it applies to traveltime.
§ 785.34 Effect of section 4 of the Portal-to-Portal Act.
The Portal Act provides in section
4(a) that except as provided in subsection (b) no employer shall be liable
for the failure to pay the minimum
wage or overtime compensation for
time spent in ‘‘walking, riding, or traveling to and from the actual place of
performance of the principal activity
or activities which such employee is
employed to perform either prior to the
time on any particular workday at
which such employee commences, or
subsequent to the time on any particular workday at which he ceases,
such principal activity or activities.’’
Section 4(a) further provides that the
use of an employer’s vehicle for travel
by an employee and activities that are
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§ 785.35
29 CFR Ch. V (7–1–19 Edition)
incidental to the use of such vehicle for
commuting are not considered principal activities when the use of such
vehicle is within the normal commuting area for the employer’s business or establishment and is subject to
an agreement on the part of the employer and the employee or the representative of such employee. Subsection (b) provides that the employer
shall not be relieved from liability if
the activity is compensable by express
contract or by custom or practice not
inconsistent with an express contract.
Thus traveltime at the commencement
or cessation of the workday which was
originally considered as working time
under the Fair Labor Standards Act
(such as underground travel in mines
or walking from time clock to workbench) need not be counted as working
time unless it is compensable by contract, custom or practice. If compensable by express contract or by custom
or practice not inconsistent with an express contract, such traveltime must
be counted in computing hours worked.
However, ordinary travel from home to
work (see § 785.35) need not be counted
as hours worked even if the employer
agrees to pay for it. (See Tennessee
Coal, Iron & RR. Co. v. Musecoda Local,
321 U.S. 590 (1946); Anderson v. Mt.
Clemens Pottery Co., 328 U.S. 690 (1946);
Walling v. Anaconda Copper Mining Co.,
66 F. Supp. 913 (D. Mont. (1946).)
[26 FR 190, Jan. 11, 1961, as amended at 76 FR
18860, Apr. 5, 2011]
§ 785.35 Home to work; ordinary situation.
An employee who travels from home
before his regular workday and returns
to his home at the end of the workday
is engaged in ordinary home to work
travel which is a normal incident of
employment. This is true whether he
works at a fixed location or at different
job sites. Normal travel from home to
work is not worktime.
§ 785.36 Home to work in emergency
situations.
There may be instances when travel
from home to work is overtime. For example, if an employee who has gone
home after completing his day’s work
is subsequently called out at night to
travel a substantial distance to per-
form an emergency job for one of his
employer’s customers all time spent on
such travel is working time. The Divisions are taking no position on whether travel to the job and back home by
an employee who receives an emergency call outside of his regular hours
to report back to his regular place of
business to do a job is working time.
§ 785.37 Home to work on special oneday assignment in another city.
A problem arises when an employee
who regularly works at a fixed location
in one city is given a special 1-day
work assignment in another city. For
example, an employee who works in
Washington, DC, with regular working
hours from 9 a.m. to 5 p.m. may be
given a special assignment in New
York City, with instructions to leave
Washington at 8 a.m. He arrives in New
York at 12 noon, ready for work. The
special assignment is completed at 3
p.m., and the employee arrives back in
Washington at 7 p.m. Such travel cannot be regarded as ordinary home-towork travel occasioned merely by the
fact of employment. It was performed
for the employer’s benefit and at his
special request to meet the needs of the
particular and unusual assignment. It
would thus qualify as an integral part
of the ‘‘principal’’ activity which the
employee was hired to perform on the
workday in question; it is like travel
involved in an emergency call (described in § 785.36), or like travel that is
all in the day’s work (see § 785.38). All
the time involved, however, need not
be counted. Since, except for the special assignment, the employee would
have had to report to his regular work
site, the travel between his home and
the railroad depot may be deducted, it
being in the ‘‘home-to-work’’ category.
Also, of course, the usual meal time
would be deductible.
§ 785.38 Travel that is all in the day’s
work.
Time spent by an employee in travel
as part of his principal activity, such
as travel from job site to job site during the workday, must be counted as
hours worked. Where an employee is
required to report at a meeting place
to receive instructions or to perform
other work there, or to pick up and to
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Wage and Hour Division, Labor
§ 785.45
carry tools, the travel from the designated place to the work place is part
of the day’s work, and must be counted
as hours worked regardless of contract,
custom, or practice. If an employee
normally finishes his work on the
premises at 5 p.m. and is sent to another job which he finishes at 8 p.m.
and is required to return to his employer’s premises arriving at 9 p.m., all of
the time is working time. However, if
the employee goes home instead of returning to his employer’s premises, the
travel after 8 p.m. is home-to-work
travel and is not hours worked.
(Walling v. Mid-Continent Pipe Line Co.,
143 F. 2d 308 (C. A. 10, 1944))
§ 785.39 Travel away from home community.
Travel that keeps an employee away
from home overnight is travel away
from home. Travel away from home is
clearly worktime when it cuts across
the employee’s workday. The employee
is simply substituting travel for other
duties. The time is not only hours
worked on regular working days during
normal working hours but also during
the corresponding hours on nonworking days. Thus, if an employee
regularly works from 9 a.m. to 5 p.m.
from Monday through Friday the travel time during these hours is worktime
on Saturday and Sunday as well as on
the other days. Regular meal period
time is not counted. As an enforcement
policy the Divisions will not consider
as worktime that time spent in travel
away from home outside of regular
working hours as a passenger on an airplane, train, boat, bus, or automobile.
§ 785.40 When private automobile is
used in travel away from home
community.
If an employee is offered public
transporation but requests permission
to drive his car instead, the employer
may count as hours worked either the
time spent driving the car or the time
he would have had to count as hours
worked during working hours if the
employee had used the public conveyance.
§ 785.41 Work performed while traveling.
Any work which an employee is required to perform while traveling
must, of course, be counted as hours
worked. An employee who drives a
truck, bus, automobile, boat or airplane, or an employee who is required
to ride therein as an assistant or helper, is working while riding, except during bona fide meal periods or when he
is permitted to sleep in adequate facilities furnished by the employer.
ADJUSTING GRIEVANCES, MEDICAL ATTENTION,
CIVIC
AND
CHARITABLE
WORK, AND SUGGESTION SYSTEMS
§ 785.42
Adjusting grievances.
Time spent in adjusting grievances
between an employer and employees
during the time the employees are required to be on the premises is hours
worked, but in the event a bona fide
union is involved the counting of such
time will, as a matter of enforcement
policy, be left to the process of collective bargaining or to the custom or
practice under the collective bargaining agreement.
§ 785.43
Medical attention.
Time spent by an employee in waiting for and receiving medical attention
on the premises or at the direction of
the employer during the employee’s
normal working hours on days when he
is working constitutes hours worked.
§ 785.44
Civic and charitable work.
Time spent in work for public or
charitable purposes at the employer’s
request, or under his direction or control, or while the employee is required
to be on the premises, is working time.
However, time spent voluntarily in
such activities outside of the employee’s normal working hours is not hours
worked.
§ 785.45
Suggestion systems.
Generally, time spent by employees
outside of their regular working hours
in developing suggestions under a general suggestion system is not working
time, but if employees are permitted to
work on suggestions during regular
working hours the time spent must be
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§ 785.46
29 CFR Ch. V (7–1–19 Edition)
counted as hours worked. Where an employee is assigned to work on the development of a suggestion, the time is
considered hours worked.
Subpart D—Recording Working
Time
§ 785.46 Applicable regulations governing keeping of records.
Section 11(c) of the Act authorizes
the Secretary to promulgate regulations requiring the keeping of records
of hours worked, wages paid and other
conditions of employment. These regulations are published in part 516 of this
chapter. Copies of the regulations may
be obtained on request.
§ 785.47 Where records show insubstantial or insignificant periods of
time.
In recording working time under the
Act, insubstantial or insignificant periods of time beyond the scheduled working hours, which cannot as a practical
administrative matter be precisely recorded for payroll purposes, may be
disregarded. The courts have held that
such trifles are de minimis. (Anderson
v. Mt. Clemens Pottery Co., 328 U.S. 680
(1946)) This rule applies only where
there are uncertain and indefinite periods of time involved of a few seconds or
minutes duration, and where the failure to count such time is due to considerations justified by industrial realities. An employer may not arbitrarily
fail to count as hours worked any part,
however small, of the employee’s fixed
or regular working time or practically
ascertainable period of time he is regularly required to spend on duties assigned to him. See Glenn L. Martin Nebraska Co. v. Culkin, 197 F. 2d 981, 987
(C.A. 8, 1952), cert. denied, 344 U.S. 866
(1952), rehearing denied, 344 U.S. 888
(1952), holding that working time
amounting to $1 of additional compensation a week is ‘‘not a trivial matter to a workingman,’’ and was not de
minimis; Addison v. Huron Stevedoring
Corp., 204 F. 2d 88, 95 (C.A. 2, 1953), cert.
denied 346 U.S. 877, holding that ‘‘To
disregard workweeks for which less
than a dollar is due will produce capricious and unfair results.’’ Hawkins v. E.
I. du Pont de Nemours & Co., 12 W.H.
Cases 448, 27 Labor Cases, para. 69,094
(E.D. Va., 1955), holding that 10 minutes a day is not de minimis.
§ 785.48 Use of time clocks.
(a) Differences between clock records
and actual hours worked. Time clocks
are not required. In those cases where
time clocks are used, employees who
voluntarily come in before their regular starting time or remain after their
closing time, do not have to be paid for
such periods provided, of course, that
they do not engage in any work. Their
early or late clock punching may be
disregarded. Minor differences between
the clock records and actual hours
worked cannot ordinarily be avoided,
but major discrepancies should be discouraged since they raise a doubt as to
the accuracy of the records of the
hours actually worked.
(b) ‘‘Rounding’’ practices. It has been
found that in some industries, particularly where time clocks are used, there
has been the practice for many years of
recording the employees’ starting time
and stopping time to the nearest 5 minutes, or to the nearest one-tenth or
quarter of an hour. Presumably, this
arrangement averages out so that the
employees are fully compensated for
all the time they actually work. For
enforcement purposes this practice of
computing working time will be accepted, provided that it is used in such
a manner that it will not result, over a
period of time, in failure to compensate the employees properly for all
the time they have actually worked.
Subpart E—Miscellaneous
Provisions
§ 785.49 Applicable provisions of the
Fair Labor Standards Act.
(a) Section 6. Section 6 of the Fair
Labor Standards Act of 1938 (29 U.S.C.
206) requires that each employee, not
specifically exempted, who is engaged
in commerce, or in the production of
goods for commerce, or who is employed in an enterprise engaged in
commerce, or in the production of
goods for commerce receive a specified
minimum wage.
(b) Section 7. Section 7(a) of the Act
(29 U.S.C. 207) provides that persons
may not be employed for more than a
stated number of hours a week without
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Wage and Hour Division, Labor
§ 785.50
receiving at least one and one-half
times their regular rate of pay for the
overtime hours.
(c) Section 3(g). Section 3(g) of this
act provides that: ‘‘ ‘Employ’ includes
to suffer or permit to work.’’
(d) Section 3(o). Section 3(o) of this
act provides that: ‘‘Hours worked—in
determining for the purposes of sections 6 and 7 the hours for which an
employee is employed, there shall be
excluded any time spent in changing
clothes or washing at the beginning or
end of each workday which was excluded from the measured working
time during the week involved by the
express terms of or by custom or practice under a bona fide collective-bargaining agreement applicable to the
particular employees.’’
[26 FR 190, Jan. 11, 1961, as amended at 26 FR
7732, Aug. 18, 1961]
§ 785.50 Section 4 of the Portal-to-Portal Act.
Section 4 of this Act provides that:
(a) Except as provided in paragraph
(b), of this section, no employer shall
be subject to any liability or punishment under the Fair Labor Standards
Act of 1938, as amended, the WalshHealey Act, or the Davis-Bacon Act, on
account of the failure of such employer
to pay an employee minimum wages, or
to pay an employee overtime compensation, for or on account of any of
the following activities of such employee engaged in, on, or after May 14,
1947:
(1) Walking, riding, or traveling to
and from the actual place of performance of the principal activity or activities which such employee is employed
to perform, and
(2) Activities which are preliminary
to or postliminary to said principal activity or activities, which occur either
prior to the time on any particular
workday at which such employee commences, or subsequent to the time on
any particular workday which he
ceases, such principal activity or activities. For purposes of this subsection, the use of an employer’s vehicle for travel by an employee and activities performed by an employee
which are incidental to the use of such
vehicle for commuting shall not be
considered part of the employee’s prin-
cipal activities if the use of such vehicle for travel is within the normal commuting area for the employer’s business or establishment and the use of
the employer’s vehicle is subject to an
agreement on the part of the employer
and the employee or representative of
such employee.
(b) Notwithstanding the provisions of
paragraph (a) of this section which relieve an employer from liability and
punishment with respect to an activity
the employer shall not be so relieved if
such activity is compensable by either:
(1) An express provision of a written
or nonwritten contract in effect, at the
time of such activity, between such
employee, his agent, or collective-bargaining representative and his employer; or
(2) A custom or practice in effect, at
the time of such activity, at the establishment or other place where such employee is employed, covering such activity, not inconsistent with a written
or nonwritten contract, in effect at the
time of such activity, between such
employee, his agent, or collective-bargaining representative and his employer.
(c) For the purposes of paragraph (b)
of this section, an activity shall be
considered as compensable, under such
contract provision or such custom or
practice only when it is engaged in during the portion of the day with respect
to which it is so made compensable.
(d) In the application of the minimum wage and overtime compensation provisions of the Fair Labor
Standards Act of 1938, as amended, of
the Walsh-Healey Act, or of the DavisBacon Act, in determining the time for
which an employer employs an employee with respect to walking, riding,
traveling, or other preliminary or
postliminary activities described in
paragraph (a) of this section, there
shall be counted all that time, but only
that time, during which the employee
engages in any such activity which is
compensable within the meaning of
paragraphs (b) and (c) of this section.
[26 FR 190, Jan. 11, 1961, as amended at 76 FR
18860, Apr. 5, 2011]
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Pt. 786
29 CFR Ch. V (7–1–19 Edition)
PART 786—MISCELLANEOUS EXEMPTIONS AND EXCLUSIONS
FROM COVERAGE
Subpart A—Carriers by Air
considered substantial if it occupies
more than 20 percent of the time
worked by the employed during the
workweek.
[21 FR 5056, July 7, 1956]
Sec.
786.1 Enforcement policy concerning performance of nonexempt work.
Subpart B [Reserved]
Subpart B [Reserved]
Subpart C—Switchboard Operator
Exemption
Subpart C—Switchboard Operator
Exemption
786.100 Enforcement policy concerning performance of nonexempt work.
Subpart D—Employers Subject to Part 1 of
Interstate Commerce Act
786.150 Enforcement policy concerning performance of nonexempt work.
Subpart E—Taxicab Operators
786.200 Enforcement policy concerning performance of nonexempt work.
Subpart F—Newspaper Publishing
786.250
Enforcement policy.
Subpart G—Youth Opportunity Wage
786.300 Application
tunity wage.
of
the
youth
oppor-
§ 786.100 Enforcement
policy
concerning performance of nonexempt
work.
The Division has taken the position
that the exemption provided by section
13(a)(10) of the Fair Labor Standards
Act will be deemed applicable even
though some nonexempt work (that is,
work of a nature other than that which
characterizes the exemption) is performed by the employee during the
workweek, unless the amount of such
nonexempt work is substantial. For enforcement purposes, the amount of
nonexempt work will be considered
substantial if it occupies more than 20
percent of the time worked by the employee during the workweek.
[32 FR 15426, Nov. 4, 1967]
Subpart H—Volunteers at Private Non-Profit
Food Banks
786.350 Exclusion from definition of ‘‘employee’’ of volunteers at private nonprofit food banks.
AUTHORITY: 52 Stat. 1060, as amended; 29
U.S.C. 201–219. Pub. L. 104–188, 100 Stat. 1755.
Pub. L. 105–221, 112 Stat. 1248, 29 U.S.C. 203(e).
Subpart A—Carriers by Air
§ 786.1 Enforcement policy concerning
performance of nonexempt work.
The Division has taken the position
that the exemption provided by section
13(b)(3) of the Fair Labor Standards
Act of 1938, as amended, will be deemed
applicable even though some nonexempt work (that is, work of a nature
other than that which characterizes
the exemption) is performed by the employee during the workweek, unless the
amount of such nonexempt work is
substantial. For enforcement purposes,
the amount of nonexempt work will be
Subpart D—Employers Subject to
Part 1 of Interstate Commerce Act
§ 786.150 Enforcement
policy
concerning performance of nonexempt
work.
The Division has taken the position
that the exemption provided by section
13(b)(2) of the Fair Labor Standards
Act will be deemed applicable even
though some nonexempt work (that is,
work of a nature other than that which
characterizes the exemption) is performed by the employee during the
workweek, unless the amount of such
nonexempt work is substantial. For enforcement purposes, the amount of
nonexempt work will be considered
substantial if it occupies more than 20
percent of the time worked by the employee during the workweek.
[13 FR 1377, Mar. 17, 1948]
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Wage and Hour Division, Labor
Pt. 788
Subpart E—Taxicab Operators
§ 786.200 Enforcement
policy
concerning performance of nonexempt
work.
The Division has taken the position
that the exemption provided by section
13(b)(17) of the Fair Labor Standards
Act will be deemed applicable even
though some nonexempt work (that is,
work of a nature other than that which
characterizes the exemption) is performed by the employee during the
workweek, unless the amount of such
nonexempt work is substantial. For enforcement purposes, the amount of
nonexempt work will be considered
substantial if it occupies more than 20
percent of the time worked by the employee during the workweek.
Subpart G—Youth Opportunity
Wage
§ 786.300 Application of the youth opportunity wage.
Section 6(g) of the Fair Labor Standards Act allows any employer to pay
any employee who has not attained the
age of 20 years a wage of not less than
$4.25 an hour during the first 90 consecutive calendar days after such employee is initially employed by such
employer. For the purposes of hiring
workers at this wage, no employer may
take any action to displace employees,
including partial displacements such as
reducing hours, wages, or employment
benefits. Any employer that violates
these provisions is considered to have
violated section 15(a)(3) of the Act.
[76 FR 18860, Apr. 5, 2011]
[32 FR 15426, Nov. 4, 1967]
Subpart H—Volunteers at Private
Non-Profit Food Banks
Subpart F—Newspaper Publishing
§ 786.250
Enforcement policy.
The exemption provided by paragraph 13(a)(8) of the Fair Labor Standards Act of 1938 applies to ‘‘any employee employed in connection with
the publication of any weekly, semiweekly, or daily newspaper with a circulation of less than four thousand the
major part of which circulation is
within the county where published or
counties contiguous thereto.’’ For the
purpose of enforcement, it is the Divisions’ position that such an employee
is within the exemption even though he
is also engaged in job printing activities. if less than 50 percent of the employee’s worktime during the workweek is spent in job printing work,
some of which is subject to the Act. If
none of the job printing activities are
within the general coverage of the Act,
the exemption applies even if the job
printing activities equal or exceed 50
percent of the employee’s worktime.
However, this exemption is not applicable if the employee spends 50 percent or
more of his worktime in a workweek
on job printing, any portion of which is
within the general coverage of the Act
on an individual or enterprise basis.
[32 FR 15426, Nov. 4, 1967]
§ 786.350 Exclusion from definition of
‘‘employee’’ of volunteers at private
non-profit food banks.
Section 3(e)(5) of the Fair Labor
Standards Act excludes from the definition of the term ‘‘employee’’ individuals who volunteer their services solely
for humanitarian purposes at private
non-profit food banks and who receive
groceries from the food banks.
[76 FR 18860, Apr. 5, 2011]
PART 788—FORESTRY OR LOGGING
OPERATIONS IN WHICH NOT
MORE THAN EIGHT EMPLOYEES
ARE EMPLOYED
Sec.
788.1 Statutory provisions.
788.2 Matters not discussed in this part.
788.3 Purpose of this part.
788.4 Significance of official interpretations.
788.5 Reliance on official interpretations.
788.6 Scope of the section 13(a)(13) exemption.
788.7 ‘‘Planting or tending trees.’’
788.8 ‘‘Cruising, surveying, or felling timber.’’
788.9 ‘‘Preparing * * * logs.’’
788.10 ‘‘Preparing* * * other forestry products.’’
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§ 788.1
29 CFR Ch. V (7–1–19 Edition)
788.11 ‘‘Transporting [such] products to the
mill, processing plant, railroad, or other
transportation terminal.’’
788.12 Limitation of exemption to specific
operations in which ‘‘number of employees * * * does not exceed eight.’’
788.13 Counting the eight employees.
788.14 Number employed in other than specified operations.
788.15 Multiple crews.
788.16 Employment relationship.
788.17 Employees employed in both exempt
and nonexempt work.
788.18 Preparing other forestry products.
AUTHORITY: Secs. 1–19, 52 Stat. 1060, as
amended; 29 U.S.C. 201–219.
SOURCE: 34 FR 15794, Oct. 14, 1969, unless
otherwise noted.
§ 788.1 Statutory provisions.
Section 13(a)(13) of the Fair Labor
Standards Act of 1938, as amended, provides an exemption from the minimum
wage and overtime requirements of the
Act, as follows:
The provisions of sections 6 and 7 shall not
apply with respect to * * * any employee employed in planting or tending trees, cruising,
surveying, or felling timber, or in preparing
or transporting logs or other forestry products to the mill, processing plant, railroad,
or other transportation terminal, if the number of employees employed by his employer
in such forestry or lumbering operations
does not exceed eight.
This exemption, formerly section
13(a)(15) of the Act, was amended by
the Fair Labor Standards Amendments
of 1966 (80 Stat. 830) to change the number of employees limitation from 12 to
eight, and to redesignate it as section
13(a)(13).
§ 788.2 Matters not discussed in this
part.
The exemption in section 13(a)(13) of
the Act need not be considered unless
the employee is ‘‘engaged in commerce
or the production of goods for commerce’’ or is employed in an ‘‘enterprise engaged in commerce or in the
production of goods for commerce,’’ as
those words are defined in the Act, so
as to come within the general scope of
sections 6 and 7. The principles of coverage are discussed in part 776 of this
chapter and the discussion will not be
repeated in this part. Neither does this
part discuss the exemptions provided in
section 13(a)(6) and 13(b)(12), or section
3(f) which includes in the definition of
agriculture forestry or lumbering operations performed by a farmer or on a
farm as an incident to or in conjunction with certain farming operations.
(See part 780 of this chapter.)
§ 788.3
Purpose of this part.
The purpose of this part is to make
available in one place the views of the
Department of Labor with respect to
the application and meaning of the provisions of section 13(a)(13) of the Act
which will provide ‘‘a practical guide
to employers and employees as to how
the office representing the public interest in enforcement of the law will seek
to apply it’’ (Skidmore v. Swift & Co., 324
U.S. 134).
§ 788.4 Significance of official interpretations.
The interpretations contained in this
part indicate, with respect to section
13(a)(13) of the Act which refers to
small forestry or lumbering operations,
the construction of the law which the
Secretary of Labor and the Administrator believes to be correct and which
will guide them in the performance of
their duties under the Act unless and
until they are otherwise directed by
authoratative decisions of the courts
or conclude, upon reexamination of an
interpretation, that it is incorrect.
§ 788.5 Reliance on official interpretations.
Under section 10 of the Portal-to-Portal Act of 1947 (29 U.S.C. 259), official
interpretation issued under the Fair
Labor Standards Act of 1938 may, under
certain circumstances, be controlling
in determining the rights and liabilities of employers and employees. The
interpretations of the law contained in
this part are official interpretations on
which reliance may be placed as provided in section l0 of the Portal-to-Portal Act so long as they remain effective
and are not modified, rescinded, or determined by judicial authority to be incorrect. However, the failure to discuss
a particular problem in this part or in
the interpretations supplementing it
should not be taken to indicate the
adoption of any position by the Secretary of Labor or the Administrator
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Wage and Hour Division, Labor
§ 788.11
with respect to such problem or to constitute an administrative interpretation or practice or enforcement policy.
§ 788.6 Scope of the section 13(a)(13)
exemption.
Employees will not be held exempt
under section 13(a)(13) unless they are
clearly shown to come within its
terms. (Wirtz v. F. M. Sloan Co., 4ll F.
2d 56 (C.A. 3), 18 WH Cases 878; Gatlin
Lumber Co. v. Mitchell, 287 F. 2d 76 (C.A.
5) cert. denied, 366 U.S. 963.) By its
terms, the exemption is limited to
those employed in the named operations by an employer who employs
not more than eight employees therein.
The named operations are described in
terms of ordinary speech and mean
what they mean in ordinary intercourse in this context. These operations include the incidental activities
normally performed by persons employed in them, but do not include mill
operations.
§ 788.7 ‘‘Planting or tending trees.’’
Employees employed in ‘‘planting or
tending trees’’ include those engaged in
weeding, preparing firebreaks, removing ‘‘seeding, planting seedlings, pruning, rot or rusts, spraying, and similar
operations when the object is to bring
about, protect, or foster the growth of
trees.’’ ‘‘Tending trees’’ would also include watching the timberland to
guard against thefts and fire (Gatlin
Lumber Co. v. Mitchell, 287 F. 2d 76, cert.
den. 366 U.S. 963).
§ 788.8 ‘‘Cruising, surveying, or felling
timber.’’
Employees engaged in ‘‘cruising * * *
timber’’ include all those members of a
field crew whose purpose is to estimate
and report on the volume of marketable timber. Employees engaged in
‘‘surveying * * * timber’’ include the
customary members of a crew accomplishing that function such as the
chairmen, the transit men, the rodmen,
and the axmen who clear the ground of
brush or trees in order that the transit
men may obtain a clear sight. Similarly, the usual members of a crew
which go to the woods for the purpose
of felling timber and preparing and
transporting logs are engaged in operations described in the exemption.
Typically included, when members of
such a crew, are fellers, limbers, skidders, buckers, loaders, swampers, scalers, and log truck drivers.
§ 788.9
‘‘Preparing * * * logs.’’
Preparing logs includes, where appropriate, removing the limbs and top,
cutting them into lengths, removing
the bark, and splitting or facing them
when done at the felling site, but does
not include such operations when done
at a mill. Employees engaged in sawmill, tie mill, and other operations in
connection with the processing of logs,
such as the production of lumber, are
not exempt.
§ 788.10 ‘‘Preparing
estry products.’’
* * *
other
As used in the exemption, ‘‘other forestry products’’ mean plants of the forest and the natural properties or substances of such plants and trees. Included among these are decorative
greens such as holly, ferns and Christmas trees, roots, stems, leaves, Spanish
moss, wild fruit, and brush. Gathering
and preparing such forestry products as
well as transporting them to the mill,
processing plant, railroad, or other
transportation terminal are among the
described operations. Preparing such
forestry products does not include operations which change the natural
physical or chemical condition of the
products or which amount to extracting as distinguished from gathering,
such as shelling nuts, or mashing berries to obtain juices.
[74 FR 26015, May 29, 2009]
§ 788.11 ‘‘Transporting [such] products
to the mill, processing plant, railroad, or other transportation terminal.’’
The transportation or movement of
logs or other forestry products to a
‘‘mill processing plant, railroad, or
other transportation terminal’’ is
among the described operations. Loading and unloading, when performed by
employees employed in the named operations, are included as exempt operations. Loading logs or other forestry
products onto railroad cars or other
transportation facilities for further
shipment if performed as part of the
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§ 788.12
29 CFR Ch. V (7–1–19 Edition)
exempt transportation will be considered a step in the exempt transportation (Woods Lumber Co. v. Tobin, 199
F. 2d 455 (C.A.5)). However, any other
loading, transportation, or other activities performed in connection with
the logs or other forestry products
after they have been unloaded at one of
the described destinations is not exempt. ‘‘Other transportation terminal’’
refers to any place where there are established facilities or equipment for
the shipment or transportation of logs
or other forestry products. Motor carrier yards, docks, wharves, or similar
facilities are examples of other transportation terminals, but the place
where logs are picked up by contract
motor carriers or haulers at the site of
the woods operations for transportation to the mill, processing plant, or
railroad is not such a terminal.
§ 788.12 Limitation of exemption to
specific operations in which ‘‘number of employees * * * does not exceed eight.’’
Regardless of his duties, no employee
is exempt under section 13(a)(13) unless
‘‘the number of employees employed by
his employer in such forestry or lumbering operations does not exceed
eight.’’
§ 788.13
Counting the eight employees.
The determination of the number of
employees employed in the named operations is to be made on an occupational and a workweek basis. Thus the
exemption will be available in one
workweek when eight or less employees are employed in the exempt operations and not in another workweek
when more than that number are so
employed. For a discussion of the term
‘‘workweek’’ see part 778 of this chapter. The exemption will not be defeated, however, if one or more of the
eight employees so engaged is replaced
during the workweek, for example, by
reason of illness. But if additional employees are employed during the workweek in the named operations, even if
they work on a different shift, the exemption would no longer be available if
the total number exceed eight. Similarly, all of an employer’s employees
employed in any workweek in the
named operations must be counted in
the eight regardless of where the work
is performed or how it is divided. Thus
if an employer employs four employees
in felling timber and preparing logs at
one location and five at another location in those operations, the exemption
would not be available. Similarly, if he
employs six employees in such operations and three other employees in
transportation work as discussed in
§ 788.11, the exemption could not apply.
Under such circumstances he would be
employing more than eight employees
in the named operations. The fact that
some of these employees may not be
engaged in commerce or the production
of goods for commerce or may be engaged in other exempt operations will
not affect these conclusions (Woods
Lumber Co. v. Tobin, 199 F. 2d 455 (C.A.
5)). Except for replacements, therefore,
all of an employer’s employees employed in the named operations in a
workweek must be counted, regardless
of where they perform their work or in
which of the named operations or combinations of such operations they are
employed. The length of time an employee is employed in the named operations during a workweek is also immaterial for the purpose of applying
the numerical limitation. Thus, even if
an employee would not himself be exempt because he is engaged substantially in nonexempt work (see § 788.17),
nevertheless, if, as a regular part of his
duties, he is also engaged in the operations named in the exemption, he
must be counted in determining whether the eight employee limitation is satisfied.
§ 788.14 Number employed in other
than specified operations.
The exemption is available to an employer, however, even if he has a total
of nine or more employees, if only
eight of them or less are employed in
the named operations. Thus, if such an
employer employs only eight employees in the named operations and others
in operations not named in the exemption, such as sawmill operations, the
exemption is not defeated because of
the fact that he employs more than
eight employees altogether. It will not
apply, however, to those engaged in the
operations not named in the exemption.
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Wage and Hour Division, Labor
§ 788.17
§ 788.15 Multiple crews.
In many cases an employer who operates a sawmill or concentration yard
will be supplied with logs or other forestry products by several crews of persons who are engaged in the named operations. Frequently some or all of
such crews, separately considered, do
not employ more than eight persons
but the total number of such employees is in excess of eight. Whether the
exemption will apply to the members
of the individual crews which do not
exceed eight will depend on whether
they are employees of the sawmill or
concentration yard to which the logs
or other forestry products are delivered
or whether each such crew is a truly
independently owned and operated
business. If the number of employees in
such a truly independently owned and
operated business does not exceed
eight, the exemption will apply. On the
other hand, the Secretary and the Administrator will assume that the
courts will be reluctant to approve as
bona fide a plan by which an employer
of a large number of woods employees
splits his employees into several allegedly ‘‘independent businesses’’ in order
to take advantage of the exemption.
§ 788.16 Employment relationship.
(a) The Supreme Court has made it
clear that there is no single rule or test
for determining whether an individual
is an employee or an independent contractor, but that the ‘‘total situation
controls’’ (see Rutherford Food Corp. v.
McComb, 331 United States 722; United
States v. Silk, 331 United States 704;
Harrison v. Greyvan Lines, 331 United
States 704; Bartels v. Birmingham, 332
United States 126). In general an employee, as distinguished from a person
who is engaged in a business of his
own, is one who ‘‘follows the usual path
of an employee’’ and is dependent on
the business which he serves. As an aid
in assessing the total situation the
Court mentioned some of the characteristics of the two classifications
which should be considered. Among
these are: The extent to which the
services rendered are an integral part
of the principal’s business, the permanency of the relationship, the opportunities for profit or loss, the initiative
judgment or foresight exercised by the
one who performs the services, the
amount of investment, and the degree
of control which the principal has in
the situation. The Court specifically
rejected the degree of control retained
by the principal as the sole criterion to
be applied.
(b) At least in one situation it is possible to be specific: (1) Where the sawmill or concentration yard to which
the products are delivered owns the
land or the appropriation rights to the
timber or other forestry products; (2)
the crew boss has no very substantial
investment in tools or machinery used;
and (3) the crew does not transfer its
relationship as a unit from one sawmill
or concentration yard to another, the
crew boss and the employees working
under him will be considered employees of the sawmill or concentration
yard. Other situations, where one or
more of these three factors is not
present, will be considered as they
arise on the basis of the criteria mentioned in paragraph (a) of this section.
Where all of these three criteria are
present, however, it will make no difference if the crew boss receives the entire compensation for the production
from the sawmill or concentration yard
and distributes it in any way he chooses to the crew members. Similarly, it
will make no difference if the hiring,
firing, and supervising of the crew
members is left in the hands of the
crew boss. (See Tobin v. LaDuke, 190 F.
2d 977 (C.A. 9); Tobin v. Anthony-Williams Mfg. Co., 196 F. 2d 547 (C.A. 8).)
§ 788.17 Employees employed in both
exempt and nonexempt work.
The exemption for an employee employed in exempt work will be defeated
in any workweek in which he performs
a substantial amount of nonexempt
work. For enforcement purposes nonexempt work will be considered substantial in amount if more than 20 percent of the time worked by the employee in a given workweek is devoted
to such work. Where two types of work
cannot be segregated, however, so as to
permit separate measurement of the
time spent in each, the employee will
not be exempt.
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§ 788.18
29 CFR Ch. V (7–1–19 Edition)
§ 788.18 Preparing other forestry products.
As used in the exemption, other forestry products means plants of the forest and the natural properties or substances of such plants and trees. Included among these are decorative
greens such as holly, ferns, roots,
stems, leaves, Spanish moss, wild fruit,
and brush. Christmas trees are only included where they are gathered in the
wild from forests or from uncultivated
land and not produced through the application of extensive agricultural or
horticultural techniques. See 29 CFR
780.205 for further discussion. Gathering and preparing such forestry products as well as transporting them to
the mill, processing plant, railroad, or
other transportation terminal are
among the described operations. Preparing such forestry products does not
include operations that change the natural physical or chemical condition of
the products or that amount to extracting (as distinguished from gathering) such as shelling nuts, or that
mash berries to obtain juices.
[73 FR 77239, Dec. 18, 2008. Redesignated at 74
FR 26015, May 29, 2009]
EFFECTIVE DATE NOTE: At 74 FR 26015, May
29, 2009, § 788.10 was redesignated as § 788.18
and newly designated § 788.18 was suspended,
effective June 29, 2009.
PART 789—GENERAL STATEMENT
ON THE PROVISIONS OF SECTION
12(a) AND SECTION 15(a)(1) OF
THE FAIR LABOR STANDARDS ACT
OF 1938, RELATING TO WRITTEN
ASSURANCES
Sec.
789.0 Introductory statement.
789.1 Statutory provisions and legislative
history.
789.2 ‘‘* * * in reliance on written assurance
from the producer * * *’’
789.3 ‘‘* * * goods were produced in compliance with’’ * * * the requirements referred to.
789.4 Scope and content of assurances of
compliance.
789.5 ‘‘* * * acquired * * * in good faith
* * * for value without notice * * *’’.
AUTHORITY: 52 Stat. 1060, as amended; 29
U.S.C. 201–219.
SOURCE: 15 FR 5047, Aug. 5, 1950, unless otherwise noted.
§ 789.0 Introductory statement.
(a) Section 12(a) and section 15(a)(1)
of the Fair Labor Standards Act of
1938 1 (hereinafter referred to as the
(Act) contain certain prohibitions
against putting into interstate or foreign commerce any goods ineligible for
shipment
(commonly
called
‘‘hot
goods’’), in the production of which the
child-labor or wage-hour standards of
the Act were not observed. These sections were amended by the Fair Labor
Standards Amendments of 1949 2 to provide, among other things, protection
against these ‘‘hot goods’’ prohibitions
with respect to purchasers ‘‘who acquired such goods for value without notice of such violation’’ if they did so
‘‘in good faith in reliance on’’ a specified ‘‘written assurance.’’
(b) These amendments to the Act relating to purchasers in good faith and
written assurances are for the protection of purchasers. The Act does not
provide that a purchaser must secure
such an assurance or that a supplier
must give it. The amendments confer
no express authority for the Department of Labor to require the use of
these assurances or to prescribe their
form or content. Whether any particular written assurance affords the
statutory protection to a purchaser
who acquires his goods in good faith
and for value without notice of an applicable violation, is left for determination by the courts. Opinions
issued by the Department of Labor on
this question are advisory only and
represent simply the Department’s best
judgment as to what the courts may
hold.
1 Pub. L. 718, 75th Cong., 3d sess. (52 Stat.
1060), as amended by the Act of June 26, 1940
(Pub. Res. No. 88, 76th Cong., 3d sess., 54
Stat. 616); by Reorganization Plan No. 2 (60
Stat. 616); by Reorganization Plan No. 2 (60
Stat. 1095), effective July 16, 1946; by the Portal-to-Portal Act of 1947, approved May 14,
1947 (61 Stat. 84); by the Fair Labor Standards Amendments of 1949, approved October
26, 1949 (Pub. L. 393, 81st Cong., 1st sess., 63
Stat. 910); by Reorganization Plan No. 6 of
1950 (15 FR 3174), effective May 24, 1950; and
by the Fair Labor Standards Amendments of
1955, approved August 12, 1955 (Pub. L. 381,
84th Cong., 1st sess., C. 867, 69 Stat. 711).
2 Pub. L. 393, 81st Cong., 1st sess. 963 Stat.
910.
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Wage and Hour Division, Labor
§ 789.2
(c) The interpretations contained in
this general statement are confined to
the statutory protection accorded
these purchasers in section 12(a) and
section 15(a)(1) of the Act. These interpretations, with respect to this protection of purchasers, indicate the construction of the law which the Secretary of Labor and the Administrator
of the Wage and Hour Division 3 believe
to be correct and which will guide
them in the performance of their administrative duties under the Act unless and until they are otherwise directed by authoritative decisions of the
courts or conclude, upon re-examination of an interpretation, that it is incorrect.
[15 FR 5047, Aug. 5, 1950, as amended at 21 FR
1450, Mar. 6, 1956]
§ 789.1 Statutory provisions and legislative history.
Section 12(a) of the Act provides, in
part that no producer, manufacturer or
dealer shall ship or deliver for shipment in commerce any goods produced
in an establishment situated in the
United States in or about which within
30 days prior to the removal of such
goods therefrom, any oppressive child
labor has been employed. Section 12(a)
then provides an exception from this
prohibition in the following language:
Provided, That any such shipment or delivery for shipment of such goods by a purchaser who acquired them in good faith in
reliance on written assurance from the producer, manufacturer, or dealer that the
goods were produced in compliance with the
requirements of this section, and who acquired such goods for value without notice of
any such violation, shall not be deemed prohibited by this subsection * * *.
Section 15(a)(1) provides, in part, that
it shall be unlawful for any person to
transport, offer for transportation,
ship, deliver, or sell with knowledge
that shipment or delivery or sale thereof in commerce is intended, any goods
in the production of which any employee was employed in violation of
section 6 or 7 of the Act or any regulation or order of the Administrator
issued under section 14. Section 15(a)(1)
3 The functions of the Secretary and the
Administrator under the Act are delineated
in 13 FR 2195, 12 FR 6971, and 15 FR 3290.
also provides the following exception
with respect to this ‘‘hot goods’’ restriction:
* * * any such transportation, offer, shipment, delivery, or sale of such goods by a
purchaser who acquired them in good faith
in reliance on written assurance from the
producer that the goods were produced in
compliance with the requirements of the
Act, and who acquired such goods for value
without notice of any such violation, shall
not be deemed unlawful.
The most important portion of the legislative history of those provisions in
sections 12(a) and 15(a)(1) which relate
to the protection of purchasers is found
in the following discussion of the
amendment to section 15(a)(1), contained in the Statement of the Managers on the part of the House appended to the Conference Report on the
Fair Labor Standards Amendments of
1949: 4
This provision protects an innocent purchaser from an unwitting violation and also
protects him from having goods which he has
purchased in good faith ordered to be withheld from shipment in commerce by a ‘‘hot
goods’’ injunction. An affirmative duty is
imposed upon him to assure himself that the
goods in question were produced in compliance
with the Act, and he must have secured written assurance to that effect from the producer
of the goods. The requirement that he must
have made the purchase in good faith is comparable to similar requirements imposed on
purchasers in other fields of law, and is to be
subjected to the test of what a reasonable,
prudent man, acting with due diligence,
would have done in the circumstances. (Emphasis supplied.)
This discussion would appear to be generally applicable also to the similar
provisions of the Act contained in section 12(a).
§ 789.2 ‘‘ * * * in reliance on written
assurance from the producer * * *.’’
In order for a purchaser to be protected under these provisions of the
Act, he must acquire the goods ‘‘in reliance on written assurance * * *.’’ The
written assurance specified in section
15(a)(1) is one from the ‘‘producer’’ and
in section 12(a) it is one from the ‘‘producer, manufacturer or dealer.’’
4 H.
Rept. No. 1453, 81st Cong. 1st sess., p.
31.
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§ 789.3
29 CFR Ch. V (7–1–19 Edition)
Since the acquisition of the goods by
the purchaser must be ‘‘in reliance’’
upon such written assurance it is obvious that the Act contemplates a written assurance given to the purchaser as
a part of the transaction by which the
goods are acquired and on which he can
rely at the time of their acquisition.
Thus, where the purchaser does not receive a written assurance at the time
he acquires particular goods, he cannot
be said to have acquired the goods ‘‘in
reliance on’’ the specified written assurance merely because the producer
later furnishes an assurance that all
goods which the purchaser has previously acquired from him were produced in compliance with the Fair
Labor Standards Act.
The assurances described in the Act are
assurances in writing ‘‘from’’ the producer or ‘‘from’’ the producer, manufacturer, or dealer, as the case may be.
It is therefore clear that the following
procedures will not amount to ‘‘written
assurance from the producer’’ within
the meaning of the Act:
(a) The purchaser stamps his purchase order with the statement that
the order is valid only for goods produced in compliance with the requirements of the Fair Labor Standards Act.
No written statement concerning the
production of the goods is made to the
purchaser by the producer. The producer ships the goods which the purchaser has ordered.
(b) The purchaser stamps the above
statement on his purchase order and in
addition notifies the producer that
shipment of the goods so ordered will
be construed by the purchaser as a
guarantee by the producer that the
goods were produced in compliance
with the Act. The producer ships the
goods to the purchaser.
In neither of these situations can the
purchase order be deemed to contain a
written assurance from the producer to
the purchaser. A statement concerning
the circumstances under which the
order will be valid is sent to the producer, but no written instrument at all
is given the purchaser by the producer.
Although, in these situations, the shipment of the goods by the producer may
establish a contractual relationship between the parties, the conditions of the
statute are not satisfied because there
is in neither situation any written assurance from the producer to the purchaser that the goods were produced in
compliance with applicable provisions
of the Act referred to in sections 12(a)
and 15(a)(1).
§ 789.3 ‘‘* * * goods were produced in
compliance with’’ * * * the requirements referred to.
It is apparent from the language of
the statute and the statement appended to the Conference Report 5 that
the written assurance referred to is one
with respect to specific goods in being,
assuring the purchaser that the ‘‘goods
in question were produced in compliance’’ with the requirements referred
to in sections 12(a) and 15(a) (1). A written statement made prior to production of the particular goods is not the
type of assurance contemplated by the
statute.
A so-called ‘‘general and continuing’’
assurance or ‘‘blanket guarantee’’ stating, for instance, that all goods to be
shipped to the purchaser during a
twelve-month period following a certain date ‘‘will be or were produced’’ in
compliance with applicable provisions
of the Act would not afford the purchaser the statutory protection with
respect to any production of such goods
after the assurance is given. This type
of assurance attempts to assure the
purchaser concerning the future production of goods. With respect to any
production of goods after the assurance
is given, this ‘‘general and continuing’’
assurance would, at most, be an assurance that the goods will be produced in
compliance with the Act.
The definitions of the terms ‘‘goods’’
and ‘‘produced’’ in sections 3(i) and 3(j)
of the Act 6 respectively, should be considered in interpreting the requirement
5 H.
Rept. No. 1453, 81st Cong., 1st sess., p.
31.
6 Section 3(i) defines ‘‘goods’’ to mean
‘‘goods (including ships and marine equipment), wares, products, commodities, merchandise, or articles or subjects of commerce
of any character, or any part or ingredient
thereof, but does not include goods after
their delivery into the actual physical possession of the ultimate consumer thereof
other than a producer, manufacturer, or
processor thereof.’’
718
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Wage and Hour Division, Labor
§ 789.4
that the written assurance must relate
to goods which were produced in compliance with applicable provisions of
the Act. These definitions make it apparent, for instance that the raw materials from which a machine has been
made retain their identity as ‘‘goods’’
even though these raw materials have
been converted into an entirely different finished product in which the
raw materials are merely a part.
Since ‘‘goods,’’ as defined in the Act,
‘‘does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof
other than a producer, manufacturing,
or processor thereof,’’ the ‘‘hot goods’’
restrictions of section 12(a) and section
15(a)(1) do not apply to such ultimate
consumers. There appears to be no
need, therefore, for such consumers to
secure these written assurances from
their suppliers.
§ 789.4 Scope and content of assurances of compliance.
A question frequently asked is
whether a single written assurance of
compliance will suffice for purposes
both of section 12(a), relating to child
labor, and section 15(a)(1), relating to
wage and hour standards. A single assurance would appear to be sufficient,
provided it is specific enough to meet
all the conditions of the two sections.
Although it is possible that the courts
might find assurances referring generally to compliance ‘‘with the requirements of the Act’’ adequate for all purposes, the safer course to pursue would
be to phrase the assurance in terms of
compliance with the specific sections
of the Act whose violation would bar
the goods from interstate or foreign
commerce.
The language of the statute gives support to this view. It will be noted that
Section 3(j) defines ‘‘produced’’ to mean
‘‘produced, manufactured, mined, handled, or
in any other manner worked on in any state;
and for the purposes of this Act an employee
shall be deemed to have been engaged in the
production of goods if such employee was
employed in producing, manufacturing, mining, handling, transporting, or in any other
manner working on such goods, or in any
closely related process or occupation directly essential to the production thereof, in
any State.’’
the written assurance referred to in
section 15(a)(1) is described as one of
‘‘compliance with the requirements of
the Act * * *,’’ whereas the written assurance referred to in section 12(a) is
described as one of ‘‘compliance with
this section.’’ In view of the differences
in wording of the two sections, a court
might conclude that a general assurance of compliance with the Act is not
sufficient to include a specific assurance of compliance with section 12, on
the theory that if Congress had intended an assurance of compliance
with the Act to be sufficient under the
child-labor provisions, there would
have been no reason for the use of the
more specific language which it placed
in section 12. Also, it is possible that a
court might conclude that Congress intended, under section 15(a)(1), that the
assurance should refer specifically to
the particular sections of the Act mentioned therein, since unless there is
some violation of one of those sections
in the production of goods, a subsequent purchaser is not prohibited from
putting them in commerce.
There is no prescribed form or language that must be followed in order
for the written assurance of compliance to afford the desired protection.
However, in view of the considerations
mentioned above, the following is suggested as a guide for the type of language which would appear to provide
the maximum degree of certainty that
a purchaser who acquired the goods in
good faith in reliance on the written
assurance would receive the protection
intended by the amendments:
We hereby certify that these goods were
produced in compliance with all applicable
requirements of sections 6, 7, and 12 of the
Fair Labor Standards Act, as amended, and
of regulations and orders of the United
States Department of Labor issued under
section 14 thereof:
The question has also arisen as to what
method should be used to give a purchaser a proper written assurance
which would adequately identify the
particular goods to which such assurance relates. Although other means of
giving proper written assurances may
be found to be more practical and convenient, it appears that one simple and
feasible method of giving such assurance is for the producer to stamp or
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§ 789.5
29 CFR Ch. V (7–1–19 Edition)
print the assurance on the invoice
which covers the particular goods and
which is given to the purchaser as a
part of the transaction whereby the
goods are acquired.
§ 789.5 ‘‘* * * acquired * * * in good
faith * * * for value without notice
* * *.’’
Section 12(a) and section 15(a)(1) of
the Act provide that a purchaser must
acquire the goods in good faith in reliance on the specified written assurance
in order to be accorded the statutory
protection.
The legislative history of the amendments indicates that a purchaser’s
good faith is not to be determined
merely from the actual state of his
mind but that good faith also depends
upon an objective test—that of what a
‘‘reasonable, prudent man, acting with
due diligence, would have done in the
circumstances.’’ This good faith requirement is, in the words of the House
Managers, ‘‘comparable to similar requirements imposed on purchasers in
other fields of law.’’ The final determination of what will amount to good
faith can be made only upon the basis
of the pertinent facts in each situation.
It is clear, however, that good faith as
used in the Act, not only requires honesty of intention but also that a purchaser must not know, have reason to
know, or have knowledge of circumstances which ought to put him on
inquiry that the goods in question were
produced in violation of any of the provisions of the Act referred to in sections 12(a) and 15(a)(1).
These good faith provisions are reinforced by the requirement in sections
12(a) and 15(a)(1) that the purchaser
must also acquire his goods ‘‘for value
without notice’’ of an applicable violation of the Act.
To illustrate the application of the
above principles, let us assume that a
purchaser of goods for value acquires
them in reliance upon a written assurance from the producer, manufacturer,
or dealer that the particular goods
were produced in compliance with all
applicable requirements of the Act, and
that the form and content of the assurance is sufficient to meet the conditions of sections 12 and 15(a)(1) of the
Act. If a reasonable, prudent man in
the purchaser’s position, acting with
the diligence, would have no reason to
question the truth of the assurance
that the applicable requirements has
been complied with, the purchaser’s reliance on such written assurance would
be considered to be in good faith and
without notice of any violation, and
the purchaser would be protected in
the event that violations of the childlabor or the wage-hour standards of the
Act had actually occurred in the production of such goods by the vendor or
by prior producers of the goods. In such
circumstances, the purchaser’s protection would not be contingent on his securing separate written assurances
from the prior producers or on his assuring himself that his vendor had secured specific guarantees from them
with respect to compliance.
PART 790—GENERAL STATEMENT
AS TO THE EFFECT OF THE PORTAL-TO-PORTAL ACT OF 1947 ON
THE FAIR LABOR STANDARDS ACT
OF 1938
GENERAL
Sec.
790.1
790.2
Introductory statement.
Interrelationship of the two Acts.
PROVISIONS RELATING TO CERTAIN ACTIVITIES
ENGAGED IN BY EMPLOYEES ON OR AFTER
MAY 14, 1947
790.3 Provisions of the statute.
790.4 Liability of employer; effect of contract, custom, or practice.
790.5 Effect of Portal-to-Portal Act on determination of hours worked.
790.6 Periods within the ‘‘workday’’ unaffected.
790.7 ‘‘Preliminary’’ and ‘‘postliminary’’ activities.
790.8 ‘‘Principal’’ activities.
790.9 ‘‘Compensable * * * by an express provision of a written or nonwritten contract.’’
790.10 ‘‘Compensable * * * by a custom or
practice.’’
790.11 Contract, custom or practice in effect
‘‘at the time of such activity.’’
790.12 ‘‘Portion of the day.’’
DEFENSE OF GOOD FAITH RELIANCE ON
ADMINISTRATIVE REGULATIONS, ETC.
790.13
790.14
790.15
General nature of defense.
‘‘In conformity with.’’
‘‘Good faith.’’
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§ 790.1
790.16 ‘‘In reliance on.’’
790.17 ‘‘Administrative regulation, order,
ruling, approval, or interpretation.’’
790.18 ‘‘Administrative practice or enforcement policy.’’
790.19 ‘‘Agency of the United States.’’
RESTRICTIONS AND LIMITATIONS ON EMPLOYEE
SUITS
790.20 Right of employees to sue; restrictions on representative actions.
790.21 Time for bringing employee suits.
790.22 Discretion of court as to assessment
of liquidated damages.
AUTHORITY: 52 Stat. 1060, as amended; 110
Stat. 1755; 29 U.S.C. 201–219; 29 U.S.C. 254.
SOURCE: 12 FR 7655, Nov. 18, 1947, unless
otherwise noted.
GENERAL
§ 790.1 Introductory statement.
(a) The Portal-to-Portal Act of 1947
was approved May 4, 1947. 1 It contains
provisions which, in certain circumstances, affect the rights and liabilities of employees and employers
with regard to alleged underpayments
of minimum or overtime wages under
the provisions of the Fair Labor Standards Act of 1938, 2 the Walsh-Healey
Public Contracts Act, and the BaconDavis Act. The Portal Act also establishes time limitations for the bringing
of certain actions under these three
Acts, limits the jurisdiction of the
courts with respect to certain claims,
and in other respects affects employee
suits and proceedings under these Acts.
For the sake of brevity, this Act is referred
to in the following discussion as the Portal
Act.
(b) It is the purpose of this part to
outline and explain the major provisions of the Portal Act as they affect
1 An act to relieve employers from certain
liabilities and punishments under the Fair
Labor Standards Act of 1938, as amended, the
Walsh-Healey Act, and the Bacon-Davis Act,
and for other purposes (61 Stat. 84; 29 U.S.C.,
Sup., 251 et seq.).
2 52 Stat. 1060, as amended; 29 U.S.C. 201 et
seq. In the Fair Labor Standards Act, the
Congress exercised its power over interstate
commerce to establish basic standards with
respect to minimum and overtime wages and
to bar from interstate commerce goods in
the production of which these standards were
not observed. For the nature of liabilities
under this Act, see footnote 17.
the application to employers and employees of the provisions of the Fair
Labor Standards Act. The effect of the
Portal Act in relation to the WalshHealey Act and the Bacon-Davis Act is
not within the scope of this part, and is
not discussed herein. Many of the provisions of the Portal Act do not apply
to claims or liabilities arising out of
activities engaged in after the enactment of the Act. These provisions are
not discussed at length in this part, 3
because the primary purpose of this
part is to indicate the effect of the Portal Act upon the future administration
and enforcement of the Fair Labor
Standards Act, with which the Administrator of the Wage and Hour Division
is charged under the law. The discussion of the Portal Act in this part is
therefore directed principally to those
provisions that have to do with the application of the Fair Labor Standards
Act on or after May 14, 1947.
(c) The correctness of an interpretation of the Portal Act, like the correctness of an interpretation of the Fair
Labor Standards Act, can be determined finally and authoritatively only
by the courts. It is necessary, however,
for the Administrator to reach informed conclusions as to the meaning
of the law in order to enable him to
carry out his statutory duties of administration and enforcement. It would
seem desirable also that he makes
these conclusions known to persons affected by the law. 4 Accordingly, as in
the case of the interpretative bulletins
previously issued on various provisions
of the Fair Labor Standards Act, the
interpretations set forth herein are intended to indicate the construction of
the law which the Administration believes to be correct 5 and which will
3 Sections 790.23 through 790.29 in the prior
edition of this part 790 have been omitted in
this revision because of their obsolescence in
that they dealt with those sections of the
Act concerning activities prior to May 14,
1947, the effective date of the Portal-to-Portal Act.
4 See Skidmore v. Swift & Co., 323 U.S. 134;
Kirschbaum Co. v. Walling, 316 U.S. 517; Portal-to-Portal Act, sec. 10.
5 The interpretations expressed herein are
based on studies of the intent, purpose, and
interrelationship of the Fair Labor Standards Act and the Portal Act as evidenced by
Continued
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§ 790.2
29 CFR Ch. V (7–1–19 Edition)
guide him in the performance of his administrative duties under the Fair
Labor Standards Act, unless and until
he is directed otherwise by authoritative rulings of the courts or concludes, upon reexamination of an interpretation, that it is incorrect. As the
Supreme Court has pointed out, such
interpretations provide a practical
guide to employers and employees as to
how the office representing the public
interest in 6 enforcement of the law will
seek to apply it. As has been the case
in the past with respect to other interpretative bulletins, the Administrator
will receive and consider statements
suggesting change of any interpretation contained in this part.
[12 FR 7655, Nov. 18, 1947, as amended at 35
FR 7383, May 12, 1970]
§ 790.2 Interrelationship of the two
acts.
(a) The effect on the Fair Labor
Standards Act of the various provisions
of the Portal Act must necessarily be
determined by viewing the two acts as
interelated parts of the entire statutory scheme for the establishment of
basic fair labor standards. 7 The Portal
Act contemplates that employers will
be relieved, in certain circumstances,
from liabilities or punishments to
their language and legislative history, as
well as on decisions of the courts establishing legal principles believed to be applicable in interpreting the two Acts. These interpretations have been adopted by the Administrator after due consideration of relevant knowledge and experience gained in
the administration of the Fair Labor Standards Act of 1938 and after consultation with
the Solicitor of Labor.
6 Skidmore v. Swift & Co., 323 U.S. 134. See
also Roland Electrical Co. v. Walling, 326 U.S.
657; United States v. American Trucking Assn.,
310 U.S. 534; Overnight Motor Transp. Co. v.
Missel, 316 U.S. 572.
7 As appears more fully in the following
sections of this part, the several provisions
of the Portal Act relate, in pertinent part, to
actions, causes of action, liabilities, or punishments based on the nonpayment by employers to their employees of minimum or
overtime wages under the provision of the
Fair Labor Standards Act. Section 13 of the
Portal Act provides that the terms, ‘‘employer,’’ ‘‘employee,’’ and ‘‘wage’’, when used
in the Portal Act, in relation to the Fair
Labor Standards Act, have the same meaning as when used in the latter Act.
which they might otherwise be subject
under the Fair Labor Standards Act. 8
But the act makes no express change in
the national policy, declared by Congress in section 2 of the Fair Labor
Standards Act, of eliminating labor
conditions ‘‘detrimental to the maintenance of the minimum standard of living necessary for health, efficiency,
and general well-being of workers.’’
The legislative history indicates that
the Portal Act was not intended to
change this general policy. 9 The Congressional declaration of policy in section 1 of the Portal Act is explicitly directed to the meeting of the existing
emergency and the correction, both
retroactively and prospectively, of existing evils referred to therein. 10 Sponsors of the legislation in both Houses of
Congress asserted that it ‘‘in no way
repeals the minimum wage requirements and the overtime compensation
8 Portal Act, sections 1, 2, 4, 6, 9, 10, 11, 12.
Sponsors of the legislation asserted that
the provisions of the Portal Act do not deprive any person of a contract right or other
right which he may have under the common
law or under a State statute. See colloquy
between Senators Donnell, Hatch and Ferguson, 93 Cong. Rec. 2098; colloquy between
Senators Donnell and Ferguson, 93 Cong.
Rec. 2127; statement of Representative
Gwynne, 93 Cong. Rec. 1557.
9 See references to this policy at page 5 of
the Senate Committee Report on the bill
(Senate Rept. 48, 80th Cong., 1st sess.), and in
statement of Senator Donnell, 93 Cong. Rec.
2177; see also statement of Senator Morse, 93
Cong. Rec. 2274; statement of Representative
Walter, 93 Cong. Rec. 4389.
10 Cf. House Rept. No. 71; Senate Rept. No.
48; House (Conf.) Rept. No. 326, 80th Cong.,
1st sess. (referred to hereafter as House Report, Senate Report, and Conference Report);
statement of Representative Michener, 93
Cong. Rec. 4390; statement of Senator Wiley,
93 Cong. Rec. 4269, 4270; statement of Representative Gwynne, 93 Cong. Rec. 1572;
statements of Senator Donnell, 93 Cong. Rec.
2133–2135, 2176–2178; statement of Representative Robison, 93 Cong. Rec. 1499; Message of
the President to Congress, May 14, 1947 on
approval of the Act (93 Cong. Rec. 5281).
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Wage and Hour Division, Labor
§ 790.3
requirements of the Fair Labor Standards Act’’ 11 that it ‘‘protects the legitimate claims’’ under that Act, 12 and
that one of the objectives of the sponsors was to ‘‘preserve to the worker the
rights he has gained under the Fair
Labor Standards Act.’’ 13 It would
therefore appear that the Congress did
not intend by the Portal Act to change
the general rule that the remedial provisions of the Fair Labor Standards
Act are to be given a liberal interpretation 14 and exemptions therefrom are to
be narrowly construed and limited to
those who can meet the burden of
showing that they come ‘‘plainly and
unmistakably within (the) terms and
spirit’’ of such an exemption. 15
(b) It is clear from the legislative history of the Portal Act that the major
provisions of the Fair Labor Standards
Act remain in full force and effect, although the application of some of them
is affected in certain respects by the
1947 Act. The provisions of the Portal
Act do not directly affect the provisions of section 15(a)(1) of the Fair
Labor Standards Act banning shipments in interstate commerce of ‘‘hot’’
goods produced by employees not paid
in accordance with the Act’s requirements, or the provisions of section 11(c)
requiring employers to keep records in
accordance with the regulations prescribed by the Administrator. The Portal Act does not affect in any way the
provision in section 15(a)(3) banning
discrimination against employees who
assert their rights under the Fair
11 Statements of Senator Wiley, explaining
the conference agreement to the Senate, 93
Cong. Rec. 4269 and 4371. See also statement
of Senator Cooper, 93 Cong. Rec. 2295; statement of Representative Robsion, 93 Cong.
Rec. 1499, 1500.
12 Statement of Representative Michener,
explaining the conference agreement to the
House of Representatives, 93 Cong. Rec. 4391.
See also statement of Representative
Keating, 93 Cong. Rec. 1512.
13 Statement of Senator Cooper, 93 Cong.
Rec. 2300; see also statements of Senator
Donnell, 93 Cong. Rec. 2361, 2362, 2364; statements of Representatives Walter and
Robsion, 93 Cong. Rec. 1496, 1498.
14 Roland Electrical Co. v. Walling, 326 U.S.
657; United States v. Rosenwasser, 323 U.S. 360;
Brooklyn Savings Bank v. O’Neil, 324 U.S. 697.
15 See Phillips Co. v. Walling, 324 U.S. 490;
Walling v. General Industries Co., 330 U.S. 545.
Labor Standards Act, or the provisions
of section 12(a) of the Act banning from
interstate commerce goods produced in
establishments in or about which oppressive child labor is employed. The
effect of the Portal Act in relation to
the minimum and overtime wage requirements of the Fair Labor Standards Act is considered in this part in
connection with the discussion of specific provisions of the 1947 Act.
PROVISIONS RELATING TO CERTAIN ACTIVITIES ENGAGED IN BY EMPLOYEES
ON OR AFTER MAY 14, 1947
§ 790.3
Provisions of the statute.
Section 4 of the Portal Act, which relates to so-called ‘‘portal-to-portal’’ activities engaged in by employees on or
after May 14, 1947, provides as follows:
(a) Except as provided in subsection (b), no
employer shall be subject to any liability or
punishment under the Fair Labor Standards
Act of 1938, as amended, * * * on account of
the failure of such employer to pay an employee minimum wages, or to pay an employee overtime compensation, for or on account of any of the following activities of
such employee engaged in on or after the
date of the enactment of this Act:
(1) Walking, riding, or traveling to and
from the actual place of performance of the
principal activity or activities which such
employee is employed to perform, and
(2) Activities which are preliminary to or
postliminary to said principal activity or activities
which occur either prior to the time on any
particular workday at which such employee
commences, or subsequent to the time on
any particular workday at which he ceases,
such principal activity or activities. For purposes of this subsection, the use of an employer’s vehicle for travel by an employee
and activities performed by an employee
which are incidental to the use of such vehicle for commuting shall not be considered
part of the employee’s principal activities if
the use of such vehicle for travel is within
the normal commuting area for the employer’s business or establishment and the use of
the employer’s vehicle is subject to an agreement on the part of the employer and the
employee or representative of such employee.
(b) Notwithstanding the provisions of subsection (a) which relieve an employer from
liability and punishment with respect to an
activity, the employer shall not be so relieved if such activity is compensable by either:
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§ 790.4
29 CFR Ch. V (7–1–19 Edition)
(1) An express provision of a written or
nonwritten contract in effect, at the time of
such activity, between such employee, his
agent, or collective-bargaining representative and his employer; or
(2) A custom or practice in effect, at the
time of such activity, at the establishment
or other place where such employee is employed, covering such activity, not inconsistent with a written or nonwritten contract, in effect at the time of such activity,
between such employee, his agent, or collective-bargaining representative and his employer.
(c) For the purpose of subsection (b), an activity shall be considered as compensable
under such contract provision or such custom or practice only when it is engaged in
during the portion of the day with respect to
which it is so made compensable.
(d) In the application of the minimum
wage and overtime compensation provisions
of the Fair Labor Standards Act of 1938, as
amended, * * * in determining the time for
which an employer employs an employee
with respect to walking, riding, traveling, or
other preliminary or postliminary activities
described in subsection (a) of this section,
there shall be counted all that time, but only
that time, during which the employee engages in any such activity which is compensable within the meaning of subsections (b)
and (c) of this section.
[12 FR 7655, Nov. 18, 1947, as amended at 76
FR 18860, Apr. 5, 2011]
§ 790.4 Liability of employer; effect of
contract, custom, or practice.
(a) Section 4 of the Portal Act,
quoted above, applies to situations
where an employee, on or after May 14,
1974, has engaged in activities of the
kind described in this section and has
not been paid for or on account of these
activities in accordance with the statutory standards established by the Fair
Labor Standards Act. 16 Where, in these
circumstances such activities are not
compensable by contract, custom, or
practice as described in section 4, this
section relieves the employer from certain liabilities or punishments to
which he might otherwise be subject
under the provisions of the Fair Labor
16 The Fair Labor Standards Act, as amended, requires the payment of the applicable
minimum wage for all hours worked and
overtime compensation for all hours in excess of 40 in a workweek at a rate not less
than one and one-half times the employees
regular rate of pay, unless a specific exemption applies.
Standards Act. 17 The primary Congressional objectives in enacting section 4
of the Portal Act, as disclosed by the
statutory language and legislative history were:
(1) To minimize uncertainty as to the
liabilities of employers which it was
felt might arise in the future if the
compensability under the Fair Labor
Standards Act of such preliminary or
postliminary activities should continue to be tested solely by existing
criteria 18 for determining compensable
worktime, independently of contract,
custom, or pratice; 19 and
(2) To leave in effect, with respect to
the workday proper, the interpretations by the courts and the Administrator of the requirements of the Fair
Labor Standards Act with regard to
the compensability of activities and
17 The failure of an employer to compensate
employees subject to the Fair Labor Standards Act in accordance with its minimum
wage and overtime requirements makes him
liable to them for the amount of their unpaid
minimum wages and unpaid overtime compensation together with an additional equal
amount (subject to section 11 of the Portalto-Portal Act, discussed below in § 790.22) as
liquidated damages (section 16(b) of the Act);
and, if his Act or omission is willful, subjects
him to criminal penalties (section 16(a) of
the Act). Civil actions for injunction can be
brought by the Administrator (sections 11(a)
and 17 of the Act).
18 Employees subject to the minimum and
overtime wage provisions of the Fair Labor
Standards Act have been held to be entitled
to compensation in accordance with the statutory standards, regardless of contrary custom or contract, for all time spent during
the workweek in ‘‘physical or mental exertion (whether burdensome or not), controlled
or required by the employer and pursued necessarily and primarily for the benefit of the
employer and his business’’ (Tennessee Coal
Iron & R.R. Co. v. Muscoda Local, 321 U.S. 590,
598), as well as for all time spent in active or
inactive duties which such employees are engaged to perform (Armour & Co. v. Wantock,
323 U.S. 126, 132–134; Skidmore v. Swift & Co.,
323, U.S. 134, 136–137).
19 Portal Act, section 1: Senate Report, pp.
41, 42, 46–49; Conference Report, pp. 12, 13;
statements of Senator Wiley, 93 Cong. Rec.
2084, 4269–4270; statements of Senator
Donnell, 93 Cong. Rec. 2089, 2121, 2122, 2181,
2182, 2362, 2363; statements of Senator Cooper, 93 Cong. Rec. 2292–2300.
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Wage and Hour Division, Labor
§ 790.5
time to be included in computing hours
worked. 20
(b) Under section 4 of the Portal Act,
an employer who fails to pay an employee minimum wages or overtime
compensation for or on account of activities engaged in by such employee is
relieved from liability or punishment
therefor if, and only if, such activities
meet the following three tests:
(1) They constitute ‘‘walking, riding,
or traveling’’ of the kind described in
the statute, or other activities ‘‘preliminary’’ or ‘‘postliminary’’ to the
‘‘principal activity or activities’’ which
the employee is employed to perform;
and
(2) They take place before or after
the performance of all the employee’s
‘‘principal activities’’ in the workday;
and
(3) They are not compensable, during
the portion of the day when they are
engaged in, by virtue of any contract,
custom, or practice of the kind described in the statute.
(c) It will be observed that section 4
of the Portal Act relieves an employer
of liability or punishment only with respect to activities of the kind described, which have not been made
compensable by a contract or by a custom or practice (not inconsistent with
a contract) at the place of employment, in effect at the time the activities are performed. The statute states
that ‘‘the employer shall not be so relieved’’ if such activities are so compensable; 21 it does not matter in such a
situation that they are so-called ‘‘portal-to-portal’’ activities. 22
Accordingly, an employer who fails to
take such activities into account in
paying compensation to an employee
20 Senate Report, pp. 46–49; Conference Report, pp. 12, 13; statements of Senator
Donnell, 93 Cong. Rec. 2181, 2182, 2362; statements of Senator Cooper, 93 Cong. Rec. 2294,
2296, 2297, 2299, 2300; statement of Representative Gwynne, 93 Cong. Rec. 4388; statements
of Senator Wiley, 93 Cong. Rec. 2084, 4269–
4270.
21 Section 4(b) of the Act (quoted in § 790.3).
22 Conference Report, pp. 12, 13; colloquy
between Senators Donnell and Hakes, 93
Cong. Rec. 2181–2182; colloquy between Senators Cooper and McGrath, 93 Cong. Rec.
2297–2298, cf. colloquy between Senators
Donnell and Hawkes, 93 Cong. Rec. 2179.
who is subject to the Fair Labor Standards Act is not protected from liability
or punishment in either of the following situations.
(1) Where, at the time such activities
are performed there is a contract,
whether written or not, in effect between the employer and the employee
(or the employee’s agent or collectivebargaining representative), and by an
express provision of this contract the
activities are to be paid for; 23 or
(2) Where, at the time such activities
are performed, there is in effect at the
place of employment a custom or practice to pay for such activities, and this
custom or practice is not inconsistent
with any applicable contract between
such parties. 24
In applying these principles, it should
be kept in mind that under the provisions of section 4(c) of the Portal-toPortal
Act,
‘‘preliminary’’
or
‘‘postliminary’’ activities which take
place outside the workday ‘‘before the
morning whistle’’ or ‘‘after the evening
whistle’’ are, for purposes of the statute, not to be considered compensable
by a contract, custom or practice if
such contract, custom or practice
makes them compensable only during
some other portion of the day. 25
[12 FR 7655, Nov. 18, 1947, as amended at 35
FR 7383, May 12, 1970]
§ 790.5 Effect of Portal-to-Portal Act on
determination of hours worked.
(a) In the application of the minimum wage and overtime compensation provisions of the Fair Labor
Standards Act to activities of employees on or after May 14, 1947, the determination of hours worked is affected
by the Portal Act only to the extent
stated in section 4(d). This section requires that:
. . . in determining the time for which an
employer employs an employee with respect
to walking, riding, traveling or other preliminary or postliminary activities described
(in section 4(a)) there shall be counted all
23 Statements of Senator Donnell, 93 Cong.
Rec. 2179, 2181, 2182; statements of Senator
Cooper, 93 Cong. Rec. 2297, 2298, 2299.
24 Statements of Senator Donnell, 93 Cong.
Rec. 2181, 2182.
25 Conference Report, pp. 12, 13. See also
§ 790.12.
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§ 790.6
29 CFR Ch. V (7–1–19 Edition)
that time, but only that time, during which
the employee engages in any such activity
which is compensable (under contract, custom, or practice within the meaning of section 4 (b), (c)). 26
This provision is thus limited to the
determination of whether time spent in
such ‘‘preliminary’’ or ‘‘postliminary’’
activities, performed before or after
the employee’s ‘‘principal activities’’
for the workday 27 must be included or
excluded in computing time worked. 28
If time spent in such an activity would
be time worked within the meaning of
the Fair Labor Standards Act if the
Portal Act had not been enacted, 29
then the question whether it is to be
included or excluded in computing
hours worked under the law as changed
by this provision depends on the compensability of the activity under the
relevant contract, custom, or practice
applicable to the employment. Time
occupied by such an activity is to be
excluded in computing the time
worked if, when the employee is so engaged, the activity is not compensable
by a contract, custom, or practice
within the meaning of section 4; otherwise it must be included as worktime
in calculating minimum or overtime
wages due. 30 Employers are not relieved of liability for the payment of
minimum wages or overtime compensation for any time during which an
employee engages in such activities
thus compensable by contract, custom,
or practice. 31 But where, apart from
the Portal Act, time spent in such an
activity would not be time worked
within the meaning of the Fair Labor
Standards Act, although made compensable by contract, custom, or practice,
such compensability will not make it
time worked under section 4(d) of the
Portal Act.
(b) The operation of section 4(d) may
be illustrated by the common situation
of underground miners who spend time
in traveling between the portal of the
26 The full text of section 4 of the Act is set
forth in § 790.3.
27 See § 709.6. Section 4(d) makes plain that
subsections (b) and (c) of section 4 likewise
apply only to such activities.
28 Conference Report, p. 13.
29 See footnote 18.
30 See Conference Report, pp. 10, 13.
31 Conference Report, p. 10.
mine and the working face at the beginning and end of each workday. Before enactment of the Portal Act, time
thus spent constituted hours worked.
Under the law as changed by the Portal
Act, if there is a contract between the
employer and the miners calling for
payment for all or a part of this travel,
or if there is a custom or practice to
the same effect of the kind described in
section 4, the employer is still required
to count as hours worked, for purposes
of the Fair Labor Standards Act, all of
the time spent in the travel which is so
made compensable. 32 But if there is no
such contract, custom, or practice,
such time will be excluded in computing worktime for purposes of the
Act. And under the provisions of section 4(c) of the Portal Act, 33 if a contract, custom, or practice of the kind
described makes such travel compensable only during the portion of the
day before the miners arrive at the
working face and not during the portion of the day when they return from
the working face to the portal of the
mine, the only time spent in such travel which the employer is required to
count as hours worked will be the time
spent in traveling from the portal to
the working face at the beginning of
the workday.
§ 790.6 Periods within the ‘‘workday’’
unaffected.
(a) Section 4 of the Portal Act does
not affect the computation of hours
worked within the ‘‘workday’’ proper,
roughly described as the period ‘‘from
whistle to whistle,’’ and its provisions
have nothing to do with the compensability under the Fair Labor Standards
Act of any activities engaged in by an
employee during that period. 34 Under
32 Cf. colloquies between Senators Donnell
and Hawkes, 93 Cong. Rec. 2179, 2181, 2182;
colloquy between Senators Ellender and Cooper, 83 Cong. Rec. 2296–2297; colloquy between
Senators McGrath and Cooper, 93 Cong. Rec.
2297–2298. See also Senate Report, p. 48.
33 See § 790.3 and Conference Report pp. 12,
13. See also Senate Report, p. 48.
34 The report of the Senate Judiciary Committee states (p. 47), ‘‘Activities of an employee which take place during the workday
are * * * not affected by this section (section
4 of the Portal-to-Portal Act, as finally enacted) and such activities will continue to be
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Wage and Hour Division, Labor
§ 790.7
the provisions of section 4, one of the
conditions that must be present before
‘‘preliminary’’ or ‘‘postliminary’’ activities are excluded from hours
worked is that they ‘occur either prior
to the time on any particular workday
at which the employee commences, or
subsequent to the time on any particular workday at which he ceases’
the principal activity or activities
which he is employed to perform. Accordingly, to the extent that activities
engaged in by an employee occur after
the employee commences to perform
the first principal activity on a particular workday and before he ceases
the performance of the last principal
activity on a particular workday, the
provisions of that section have no application. Periods of time between the
commencement of the employee’s first
principal activity and the completion
of his last principal activity on any
workday must be included in the computation of hours worked to the same
extent as would be required if the Portal Act had not been enacted. 35 The
principles
for
determining
hours
worked within the ‘‘workday’’ proper
will continue to be those established
under the Fair Labor Standards Act
without reference to the Portal Act, 36
which is concerned with this question
only as it relates to time spent outside
the ‘‘workday’’ in activities of the kind
described in section 4. 37
(b) ‘‘Workday’’ as used in the Portal
Act means, in general, the period between the commencement and completion on the same workday of an emcompensable or not without regard to the
provisions of this section.’’
35 See Senate Report, pp. 47, 48; Conference
Report, p. 12; statement of Senator Wiley,
explaining the conference agreement to the
Senate, 93 Cong. Rec. 4269 (also 2084, 2085);
statement of Representative Gwynne, explaining the conference agreement to the
House of Representatives, 93 Cong. Rec. 4388;
statements of Senator Cooper, 93 Cong. Rec.
2293–2294, 2296–2300; statements of Senator
Donnell, 93 Cong. Rec. 2181, 2182, 2362.
36 The
determinations of hours worked
under the Fair Labor Standards Act, as
amended is discussed in part 785 of this chapter.
37 See statement of Senator Wiley explaining the conference agreement to the Senate,
93 Cong. Rec. 3269. See also the discussion in
§§ 790.7 and 790.8.
ployee’s principal activity or activities. It includes all time within that
period whether or not the employee engages in work throughout all of that
period. For example, a rest period or a
lunch period is part of the ‘‘workday’’,
and section 4 of the Portal Act therefore plays no part in determining
whether such a period, under the particular circumstances presented, is or
is not compensable, or whether it
should be included in the computation
of hours worked. 38 If an employee is required to report at the actual place of
performance of his principal activity at
a certain specific time, his ‘‘workday’’
commences at the time he reports
there for work in accordance with the
employer’s requirement, even though
through a cause beyond the employee’s
control, he is not able to commence
performance of his productive activities until a later time. In such a situation the time spent waiting for work
would be part of the workday, 39 and
section 4 of the Portal Act would not
affect its inclusion in hours worked for
purposes of the Fair Labor Standards
Act.
[12 FR 7655, Nov. 18, 1947, as amended at 35
FR 7383, May 12, 1970]
§ 790.7 ‘‘Preliminary’’
and
‘‘postliminary’’ activities.
(a) Since section 4 of the Portal Act
applies only to situations where employees engage in ‘‘preliminary’’ or
‘‘postliminary’’ activities outside the
workday proper, it is necessary to consider what activities fall within this
description. The fact that an employee
devotes some of his time to an activity
of this type is, however, not a sufficient reason for disregarding the time
devoted to such activity in computing
hours worked. If such time would otherwise be counted as time worked
under the Fair Labor Standards Act,
section 4 may not change the situation.
Whether such time must be counted or
may be disregarded, and whether the
38 Senate Report, pp. 47, 48. Cf. statement of
Senator Wiley explaining the conference
agreement to the Senate, 93 Cong. Rec. 4269;
statement of Senator Donnell, 93 Cong. Rec.
2362; statements of Senator Cooper, 93 Cong.
Rec. 2297, 2298.
39 Colloquy between Senators Cooper and
McGrath, 93 Cong. Rec. 2297, 2298.
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§ 790.7
29 CFR Ch. V (7–1–19 Edition)
relief from liability or punishment afforded by section 4 of the Portal Act is
available to the employer in such a situation will depend on the compensability of the activity under contract,
custom, or practice within the meaning
of that section. 40 On the other hand,
the criteria described in the Portal Act
have no bearing on the compensability
or the status as worktime under the
Fair Labor Standards Act of activities
that
are
not
‘‘preliminary’’
or
‘‘postliminary’’ activities outside the
workday. 41 And even where there is a
contract, custom, or practice to pay for
time spent in such a ‘‘preliminary’’ or
‘‘postliminary’’ activity, section 4(d) of
the Portal Act does not make such
time hours worked under the Fair
Labor Standards Act, if it would not be
so counted under the latter Act
alone. 42
(b) The words ‘‘preliminary activity’’
mean an activity engaged in by an employee before the commencement of his
‘‘principal’’ activity or activities, and
the words ‘‘postliminary activity’’
means an activity engaged in by an
employee after the completion of his
‘‘principal’’ activity or activities. No
categorical list of ‘‘preliminary’’ and
‘‘postliminary’’ activities except those
named in the Act can be made, since
activities which under one set of circumstances may be ‘‘preliminary’’ or
‘‘postliminary’’ activities, may under
other conditions be ‘‘principal’’ activities. The following ‘‘preliminary’’ or
‘‘postliminary’’ activities are expressly
mentioned in the Act: ‘‘Walking,
riding, or traveling to or from the actual place of performance of the prin40 See Conference Report. pp. 10, 12, 13;
statements of Senator Donnell, 93 Cong. Rec.
2178–2179, 2181, 2182; statements of Senator
Cooper, 93 Cong. Rec. 2297, 2298. See also
§§ 790.4 and 790.5.
41 See Conference Report, p. 12; Senate Report, pp. 47, 48; statement of Senator Wiley,
explaining the conference agreement to the
Senate, 93 Cong. Rec. 4269; statement of Representative Gwynne, explaining the conference agreement to the House of Representatives, 93 Cong. Rec. 4388. See also
§ 790.6.
42 See § 790.5(a).
cipal activity or activities which (the)
employee is employed to perform.’’ 43
(c) The statutory language and the
legislative history indicate that the
‘‘walking, riding or traveling’’ to which
section 4(a) refers is that which occurs,
whether on or off the employer’s premises, in the course of an employee’s ordinary daily trips between his home or
lodging and the actual place where he
does what he is employed to do. It does
not, however, include travel from the
place of performance of one principal
activity to the place of performance of
another, nor does it include travel during the employee’s regular working
hours. 44 For example, travel by a repairman from one place where he performs repair work to another such
place, or travel by a messenger delivering messages, is not the kind of
‘‘walking, riding or traveling’’ described in section 4(a). Also, where an
employee travels outside his regular
working hours at the direction and on
the business of his employer, the travel
would not ordinarily be ‘‘walking,
riding, or traveling’’ of the type referred to in section 4(a). One example
would be a traveling employee whose
duties require him to travel from town
to town outside his regular working
hours; another would be an employee
who has gone home after completing
his day’s work but is subsequently
called out at night to travel a substantial distance and perform an emergency job for one of his employer’s customers. 45 In situations such as these,
43 Portal Act, subsections 4(a), 4(d). See
also Conference Report, p. 13; statement of
Senator Donnell, 93 Cong. Rec. 2181, 2362.
44 These conclusions are supported by the
limitation, ‘‘to and from the actual place of
performance of the principal activity or activities which (the) employee is employed to
perform,’’ which follows the term ‘‘walking,
riding or traveling’’ in section 4(a), and by
the additional limitation applicable to all
‘‘preliminary’’ and ‘‘postliminary’’ activities
to the effect that the Act may affect them
only if they occur ‘‘prior to’’ or ‘‘subsequent
to’’ the workday. See, in this connection the
statements of Senator Donnell, 93 Conf. Rec.
2121, 2181, 2182, 2363; statement of Senator
Cooper, 93 Cong. Rec. 2297. See also Senate
Report, pp. 47, 48.
45 The report of the Senate Judiciary Committee (p. 48) emphasized that this section of
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Wage and Hour Division, Labor
§ 790.7
where an employee’s travel is not of
the kind to which section 4(a) of the
Portal Act refers, the question whether
the travel time is to be counted as
worktime under the Fair Labor Standards Act will continue to be determined by principles established under
this Act, without reference to the Portal Act. 46
(d) An employee who walks, rides or
otherwide travels while performing active duties is not engaged in the activities described in section 4(a). An illustration of such travel would be the carrying by a logger of a portable power
saw or other heavy equipment (as distinguished from ordinary hand tools)
on his trip into the woods to the cutting area. In such a situation, the
walking, riding, or traveling is not
segreable from the simultaneous performance of his assigned work (the carrying of the equipment, etc.) and it
does not constitute travel ‘‘to and from
the actual place of performance’’ of the
principal activities he is employed to
perform. 47
(e) The report of the Senate Committee on the Judiciary (p. 47) describes the travel affected by the statute as ‘‘Walking, riding, or traveling to
and from the actual place of performance of the principal activity or activities within the employer’s plant, mine,
building, or other place of employment, irrespective of whether such
walking, riding, or traveling occur on
or off the premises of the employer or
before or after the employee has
checked in or out.’’ The phrase, actual
place of performance,’’ as used in secthe Act ‘‘does not attempt to cover by specific language that many thousands of situations that do not readily fall within the pattern of the ordinary workday.’’
46 These principles are discussed in part 785
of this chapter.
47 Senator Cooper, after explaining that the
‘‘principal’’ activities referred to include activities which are an integral part of a
‘‘principal’’ activity (Senate Report, pp. 47,
48), that is, those which ‘‘are indispensable
to the performance of the productive work,’’
summarized this provision as it appeared in
the Senate Bill by stating: ‘‘We have clearly
eliminated from compensation walking,
traveling, riding, and other activities which
are not an integral part of the employment
for which the worker is employer.’’ 93 Cong.
Rec. 2299.
tion 4(a), thus emphasizes that the ordinary travel at the beginning and end
of the workday to which this section
relates includes the employee’s travel
on the employer’s premises until he
reaches his workbench or other place
where he commences the performance
of the principal activity or activities,
and the return travel from that place
at the end of the workday. However
where an employee performs his principal activity at various places (common examples would be a telephone
lineman, a ‘‘trouble-shooter’’ in a manufacturing plant, a meter reader, or an
exterminator) the travel between those
places is not travel of the nature described in this section, and the Portal
Act has not significance in determining
whether the travel time should be
counted as time worked.
(f) Examples of walking, riding, or
traveling which may be performed outside the workday and would normally
be
considered
‘‘preliminary’’
or
‘‘postliminary’’ activities are (1) walking or riding by an employee between
the plant gate and the employee’s
lathe, workbench or other actual place
of performance of his principal activity
or activities; (2) riding on buses between a town and an outlying mine or
factory where the employee is employed; and (3) riding on buses or trains
from a logging camp to a particular
site at which the logging operations
are actually being conducted. 48
(g) Other types of activities which
may be performed outside the workday
and, when performed under the conditions normally present, would be considered
‘‘preliminary’’
or
‘‘postliminary’’
activities,
include
checking in and out and waiting in line
to do so, changing clothes, washing up
or showering, and waiting in line to receive pay checks. 49
48 See Senate Report, p. 47; statements of
Senator Donnell, 93 Cong. Rec. 2121, 2182,
3263.
49 See Senate Report p. 47. Washing up after
work, like the changing of clothes, may in
certain situations be so directly related to
the specific work the employee is employed
to perform that it would be regarded as an
integral part of the employee’s ‘‘principal
activity’’. See colloquy between Senators
Cooper and McGrath, 93 Cong. Rec. 2297–2298.
Continued
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§ 790.8
29 CFR Ch. V (7–1–19 Edition)
(h) As indicated above, an activity
which
is
a
‘‘preliminary’’
or
‘‘postliminary’’ activity under one set
of circumstances may be a principal
activity under other conditions. 50 This
may be illustrated by the following example: Waiting before the time established for the commencement of work
would be regarded as a preliminary activity when the employee voluntarily
arrives at his place of employment earlier than he is either required or expected to arrive. Where, however, an
employee is required by his employer
to report at a particular hour at his
workbench or other place where he performs his principal activity, if the employee is there at that hour ready and
willing to work but for some reason beyond his control there is no work for
him to perform until some time has
elapsed, waiting for work would be an
integral part of the employee’s principal activities. 51 The difference in the
two situations is that in the second the
employee was engaged to wait while in
the first the employee waited to be engaged. 52
[12 FR 7655, Nov. 18, 1947, as amended at 35
FR 7383, May 12, 1970]
§ 790.8
‘‘Principal’’ activities.
(a) An employer’s liabilities and obligations under the Fair Labor Standards Act with respect to the ‘‘principal’’ activities his employees are employed to perform are not changed in
any way by section 4 of the Portal Act,
and time devoted to such activities
must be taken into account in computing hours worked to the same extent as it would if the Portal Act had
not been enacted. 53 But before it can be
See also paragraph (h) of this section and
§ 790.8(c). This does not necessarily mean,
however, that travel between the washroom
or clothes-changing place and the actual
place of performance of the specific work the
employee is employed to perform, would be
excluded from the type of travel to which
section 4(a) refers.
50 See paragraph (b) of this section. See
also footnote 49.
51 Colloquy between Senators Cooper and
McGrath, 93 Cong. Rec. 2298.
52 See Skidmore v. Swift & Co., 323 U.S. 134,
7 WHR 1165.
53 See §§ 790.4 through 790.6 of this bulletin
and part 785 of this chapter, which discusses
determined whether an activity is
‘‘preliminary or postliminary to (the)
principal activity or activities’’ which
the employee is employed to perform,
it is generally necessary to determine
what are such ‘‘principal’’ activities. 54
The use by Congress of the plural form
‘‘activities’’ in the statute makes it
clear that in order for an activity to be
a ‘‘principal’’ activity, it need not be
predominant in some way over all
other activities engaged in by the employee in performing his job; 55 rather,
an employee may, for purposes of the
Portal-to-Portal Act be engaged in several ‘‘principal’’ activities during the
workday. The ‘‘principal’’ activities referred to in the statute are activities
which the employee is ‘‘employed to
perform’’; 56 they do not include noncompensable ‘‘walking, riding, or traveling’’ of the type referred to in section
4 of the Act. 57 Several guides to determine what constitute ‘‘principal activities’’ was suggested in the legislative
debates. One of the members of the
conference committee stated to the
House of Representatives that ‘‘the realities of industrial life,’’ rather than
arbitrary standards, ‘‘are intended to
be applied in defining the term ‘principal activity or activities’,’’ and that
these words should ‘‘be interpreted
with due regard to generally established compensation practices in the
particular industry and trade.’’ 58 The
legislative history further indicates
that Congress intended the words
the principles for determining hours worked
under the Fair Labor Standards Act, as
amended.
54 Although
certain ‘‘preliminary’’ and
‘‘postliminary’’ activities are expressly mentioned in the statute (see § 790.7(b)), they are
described with reference to the place where
principal activities are performed. Even as
to these activities, therefore, identification
of certain other activities as ‘‘principal’’ activities is necessary.
55 Cf. Edward F. Allison Co., Inc. v. Commissioner of Internal Revenue, 63 F. (2d) 553
(C.C.A. 8, 1933).
56 Cf. Armour & Co. v. Wantock, 323 U.S. 126,
132–134; Skidmore v. Swift & Co., 323 U.S. 134,
136–137.
57 See statement of Senator Cooper, 93
Cong. Rec. 2297.
58 Remarks of Representative Walter, 93
Cong. Rec. 4389. See also statements of Senator Cooper, 93 Cong. Rec. 2297, 2299.
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Wage and Hour Division, Labor
§ 790.8
‘‘principal activities’’ to be construed
liberally in the light of the foregoing
principles to include any work of consequence performed for an employer,
no matter when the work is performed. 59 A majority member of the
committee which introduced this language into the bill explained to the
Senate that it was considered ‘‘sufficiently broad to embrace within its
terms such activities as are indispensable to the performance of productive
work.’’ 60
(b) The term ‘‘principal activities’’
includes all activities which are an integral part of a principal activity. 61
Two examples of what is meant by an
integral part of a principal activity are
found in the Report of the Judiciary
Committee of the Senate on the Portal-to-Portal Bill. 62 They are the following:
(1) In connection with the operation
of a lathe an employee will frequently
at the commencement of his workday
oil, grease or clean his machine, or install a new cutting tool. Such activities are an integral part of the principal activity, and are included within
such term.
(2) In the case of a garment worker in
a textile mill, who is required to report
30 minutes before other employees report to commence their principal activities, and who during such 30 minutes distributes clothing or parts of
clothing at the work-benches of other
employees and gets machines in readiness for operation by other employees,
such activities are among the principal
activities of such employee.
Such preparatory activities, which the
Administrator has always regarded as
work and as compensable under the
Fair Labor Standards Act, remain so
59 See statements of Senator Cooper, 93
Cong. Rec. 2296–2300. See also Senate Report,
p. 48, and the President’s message to Congress on approval of the Portal Act, May 14,
1947 (93 Cong. Rec. 5281).
60 See statement of Senator Cooper, 93
Cong. Rec. 2299.
61 Senate Report, p. 48; statements of Senator Cooper, 93 Cong. Rec. 2297–2299.
62 As stated in the Conference Report (p.
12), by Representative Gwynne in the House
of Representatives (93 Cong. Rec. 4388) and
by Senator Wiley in the Senate (93 Cong.
Rec. 4371), the language of the provision here
involved follows that of the Senate bill.
under the Portal Act, regardless of contrary custom or contract. 63
(c) Among the activities included as
an integral part of a principal activity
are those closely related activities
which are indispensable to its performance. 64 If an employee in a chemical
plant, for example, cannot perform his
principal activities without putting on
certain clothes, 65 changing clothes on
the employer’s premises at the beginning and end of the workday would be
an integral part of the employee’s principal activity. 66 On the other hand, if
changing clothes is merely a convenience to the employee and not directly
related to his principal activities, it
would be considered as a ‘‘preliminary’’
or ‘‘postliminary’’ activity rather than
a principal part of the activity. 67 However, activities such as checking in and
out and waiting in line to do so would
not ordinarily be regarded as integral
parts of the principal activity or activities. 67
[12 FR 7655, Nov. 18, 1947, as amended at 35
FR 7383, May 12, 1970]
63 Statement of Senator Cooper, 93 Cong.
Rec. 2297; colloquy between Senators Barkley and Cooper, 93 Cong. Rec. 2350. The fact
that a period of 30 minutes was mentioned in
the second example given by the committee
does not mean that a different rule would
apply where such preparatory activities take
less time to perform. In a colloquy between
Senators McGrath and Cooper, 93 Cong. Rec.
2298, Senator Cooper stated that ‘‘There was
no definite purpose in using the words ‘30
minutes’ instead of 15 or 10 minutes or 5 minutes or any other number of minutes.’’ In
reply to questions, he indicated that any
amount of time spent in preparatory activities of the types referred to in the examples
would be regarded as a part of the employee’s principal activity and within the compensable workday. Cf. Anderson v. Mt.
Clemens Pottery Co., 328 U.S. 680, 693.
64 See statements of Senator Cooper, 93
Cong. Rec. 2297–2299, 2377; colloquy between
Senators Barkley and Cooper, 93 Cong. Rec.
2350.
65 Such a situation may exist where the
changing of clothes on the employer’s premises is required by law, by rules of the employer, or by the nature of the work. See
footnote 49.
66 See colloquy between Senators Cooper
and McGrath, 93 Cong. Rec. 2297–2298.
67 See Senate Report, p. 47; statements of
Senator Donnell, 93 Cong. Rec. 2305–2306,
Continued
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§ 790.9
29 CFR Ch. V (7–1–19 Edition)
§ 790.9 ‘‘Compensable * * * by an express provision of a written or nonwritten contract.’’
(a) Where an employee engages in a
‘‘preliminary’’ or ‘‘postliminary’’ activity of the kind described in section
4(a) of the Portal Act and this activity
is ‘‘compensable * * * by an express
provision of a written or nonwritten
contract’’ applicable to the employment, section 4 does not operate to relieve the employer of liability or punishment under the Fair Labor Standards Act with respect to such activity, 68 and does not relieve the employer of any obligation he would otherwise have under that Act to include
time spent in such activity in computing hours worked. 69
(b) The word ‘‘compensable,’’ is used
in subsections (b), (c), and (d) of section
4 without qualification. 70 It is apparent
from these provisions that ‘‘compensable’’ as used in the statute, means
compensable in any amount. 71
(c) The phrase ‘‘compensable by an
express provision of a written or nonwritten contract’’ in section 4(b) of the
Portal Act offers no difficulty where a
written contract states that compensation shall be paid for the specific activities in question, naming them in
explicit terms or identifying them
through any appropriate language.
Such a provision clearly falls within
the statutory description. 72 The existence or nonexistence of an express provision making an activity compensable
is more difficult to determine in the
case of a nonwritten contract since
there may well be conflicting recollections as to the exact terms of the
agreement. The words ‘‘compensable by
an express provision’’ indicate that
both the intent of the parties to con2362; statements of Senator Cooper, 93 Cong.
Rec. 2296–2297, 2298.
68 See § 790.4.
69 See §§ 790.5 and 790.7.
70 The word is also so used throughout section 2 of the Act which relates to past
claims. See §§ 790.28–790.25.
71 Cf. Conference Report, pp. 9, 10, 12, 13;
message of the President to the Congress on
approval of the Portal-to-Portal Act, May 14,
1947 (93 Cong. Rec. 5281).
72 See colloquy between Senators Donnell
and Lodge, 93 Cong. Rec. 2178; colloquies between Senators Donnell and Hawkes, 93
Cong. Rec. 2179, 2181–2182.
tract with respect to the activity in
question and their intent to provide
compensation for the employee’s performance of the activity must satisfactorily appear from the express terms of
the agreement.
(d) An activity of an employee is not
‘‘compensable by * * * a written or
nonwritten contract’’ within the meaning of section 4(b) of the Portal Act unless the contract making the activity
compensable is one ‘‘between such employee, 72 his agent, or collective-bargaining representative and his employer.’’ 73 Thus, a provision in a contract between a government agency
and the employer, relating to compensation of the contractor’s employees, would not in itself establish the
compensability by ‘‘contract’’ of an activity, for purposes of section 4.
§ 790.10 ‘‘Compensable * * * by a custom or practice.’’
(a)
A
‘‘preliminary’’
or
‘‘postliminary’’ activity of the type described in section 4(a) of the Portal Act
may be ‘‘compensable’’ within the
meaning of section 4(b), by a custom or
practice as well as by a contract. If it
is so compensable, the relief afforded
by section 4 is not available to the employer with respect to such activity, 74
and section 4(d) does not operate to exclude the time spent in such activity
from hours worked under the Fair
Labor Standards Act. 75 Accordingly, in
the event that no ‘‘express provision of
a written or nonwritten contract’’
makes compensable the activity in
question, it is necessary to determine
whether the activity is made compensable by a custom or practice, not inconsistent with such a contract, in effect at the establishment or other
place where the employee was employed. 76
73 The terms ‘‘employee’’ and ‘‘employer’’
have the same meaning as when used in the
Fair Labor Standards Act. Portal-to-Portal
Act, section 13(a).
74 See § 790.4.
75 See §§ 790.5 and 790.7.
76 See Senate Report, p. 49.
The same is true with respect to the activities referred to in section 2 of the Portal Act
in an action or proceeding relating to activities performed before May 14, 1947. See Senate Report, p. 45. See also § 790.23.
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Wage and Hour Division, Labor
§ 790.11
(b) The meaning of the word ‘‘compensable’’ is the same, for purposes of
the statute, whether a contract or a
custom or practice is involved. 77
(c) The phrase, ‘‘custom or practice,’’
is one which, in common meaning, is
rather broad in scope. The meaning of
these words as used in the Portal Act is
not stated in the statute; it must be
ascertained from their context and
from other available evidence of the
Congressional intent, with such aid as
may be had from the many judicial decisions interpreting the words ‘‘custom’’ and ‘‘practice’’ as used in other
connections. Although the legislative
history casts little light on the precise
limits of these terms, it is believed
that the Congressional reference to
contract, custom or practice was a deliberate use of non-technical words
which are commonly understood and
broad enough to cover every normal
situation under which an employee
works or an employer for compensation. 78 Accordingly, ‘‘custom’’ and
‘‘practice,’’ as used in section 4(b) of
the Portal Act, may be said to be descriptive generally of those situations
where an employer, without being compelled to do so by an express provision
of a contract, has paid employees for
certain activities performed. One of the
sponsors of the legislation in the House
of Representatives indicated that the
intention was not only ‘‘to protect
every collective bargaining agreement
about these activities’’ but ‘‘to protect
the agreement between one workman
and his employer’’ and ‘‘every practice
or custom which we assume must have
entered into the minds of the people
when they made the contract.’’ 79
(d) The words, ‘‘custom or practice,’’
as used in the Portal Act, do not refer
to industry custom or the habits of the
community which are familiar to the
people; these words are qualified by the
phrase ‘‘in effect * * * at the establish77 See
§ 790.9(b).
colloquy between Senators Donnell
and Tydings, 93 Cong. Rec. 2125, 2126; colloquy between Senators Donnell, Lodge, and
Hawkes, 93 Cong. Rec. 2178, 2179; colloquy between Senators Donnell and Hawkes, 93
Cong. Rec. 2181, 2182. Statements of Senator
Cooper, 93 Cong. Rec. 2293.
79 Statements of Representative Gwynne, 93
Cong. Rec. 1566.
ment or other place where such employee was employed.’’ The compensability of an activity under custom or
practice, for purposes of this Act, is
tested by the custom or the practice at
the ‘‘particular place of business,’’
‘‘plant,’’ ‘‘mine,’’ ‘‘factory,’’ ‘‘forest,’’
etc. 80
(e) ‘‘The custom or practice’’ by
which compensability of an activity is
tested under the statute is one ‘‘covering such activity.’’ Thus, a custom or
practice to pay for washing up in the
plant after the end of the workday, for
example, would not necessarily establish the compensability of walking
time thereafter from the washroom in
the plant to the plant gate. It is
enough, however, if there is a custom
or practice covering ‘‘such activity’’;
there is no provision, as there is with
regard to contracts, that the custom or
practice be one ‘‘between such employee, his agent, or collective-bargaining representative, and his employer.’’ 81
(f) Another qualification of the ‘‘custom or practice’’ referred to in the
statute is that it be ‘‘not inconsistent
with a written or non-written contract’’ of the kind mentioned therein.
If the contract is silent on the question
of compensability of the activity, a
custom or practice to pay for it would
not be inconsistent with the contract. 82 However, the intent of the provision is that a custom or practice
which is inconsistent with the terms of
any such contract shall not be taken
into account in determining whether
such an activity is compensable. 83
§ 790.11 Contract, custom or practice
in effect ‘‘at the time of such activity.’’
The ‘‘contract,’’ ‘‘custom’’ or ‘‘practice’’ on which the compensability of
the activities referred to in section 4 of
the Portal Act may be based, is a contract, custom or practice in effect ‘‘at
the time of such activity.’’ Thus, the
78 See
80 Senate Report, p. 45; colloquy between
Senators Donnell and Hawkes, 93 Cong. Rec.
2179.
81 See § 790.9(d).
82 Senate Report, pp. 45, 49; colloquy between Senators Donnell and Hawkes, 93
Cong. Rec. 2179.
83 Senate Report, pp. 45, 49.
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§ 790.12
29 CFR Ch. V (7–1–19 Edition)
compensability of such an activity, and
its inclusion in computation of hours
worked, is not determinable by a custom or practice which had been terminated before the activity was engaged
in or was adopted some time after the
activity was performed. This phrase
would also seem to permit recognition
of changes in customs, practices and
agreements which reflect changes in
labor-management relations or policies.
§ 790.12 ‘‘Portion of the day.’’
A ‘‘preliminary’’ or ‘‘postliminary’’
activity of the kind referred to in section 4 of the Portal Act is compensable
under a contract, custom, or practice
within the meaning of that section
‘‘only when it is engaged in during the
portion of the day with respect to
which it is so made compensable.’’ 84
This provision in no way affects the
compensability of activities performed
within the workday proper or the computation of hours worked within such
workday for purposes of the Fair Labor
Standards Act; 85 the provision is applicable only to walking, riding, traveling
or
other
‘‘preliminary’’
or
‘‘postliminary’’ activities of the kind
described in section 4(a) of the Portal
Act, 86 which are engaged in outside the
workday, during the portions of the
day before performance of the first
principal activity and after performance of the last principal activity of
the employee. 87
DEFENSE OF GOOD FAITH RELIANCE ON
ADMINISTRATIVE REGULATIONS, ETC.
§ 790.13 General nature of defense.
(a) Under the provisions of sections 9
and 10 of the Portal Act, an employer
has a defense against liability or punishment in any action or proceeding
brought against him for failure to com84 Section 4(c) of the Portal Act (set out in
full in § 790.3).
85 See §§ 790.4–790.6.
86 Conference Report, pp. 12, 13.
87 See Conference Report, p. 13; §§ 790.4(c)
and 790.5(b).
The scope of section 4(c) is narrower in this
respect than that of section 2(b), which is
couched in identical language. Cf. Conference Report, pp. 9, 10; pp. 12, 13. See also
§ 790.23.
ply with the minimum wage and overtime provisions of the Fair Labor
Standards Act, where the employer
pleads and proves that ‘‘the act or
omission complained of was in good
faith in conformity with and in reliance on any administrative regulation,
order, ruling, approval, or interpretation’’ or ‘‘any administrative practice
or enforcement policy * * * with respect to the class of employers to
which he belonged.’’ In order to provide
a defense with respect to acts or omissions occurring on or after May 14, 1947
(the effective date of the Portal Act),
the regulation, order, ruling, approval,
interpretation, administrative practice
or enforcement policy relied upon and
conformed with must be that of the
‘‘Administrator of the Wage and Hour
Division of the Department of Labor,’’
and a regulation, order, ruling, approval, or interpretation of the Administrator may be relied on only if it is in
writing. 88 But where the acts or omissions complained of occurred before
May 14, 1947, the employer may show
that they were in good faith in conformity with and in reliance on ‘‘any’’
(written or nonwritten) administrative
regulation, order, ruling, or interpretation of ‘‘any agency of the United
States,’’ or any administrative practice
or enforcement policy of ‘‘any such
agency’’ with respect to the class of
employers to which he belonged. 89 In
all cases, however, the act or omission
complained of must be both ‘‘in conformity with’’ 90 and ‘‘in reliance on’’ 91
the administrative regulation, order,
ruling, approval, interpretation, practice, or enforcement policy, as the case
may be, and such conformance and reliance and such act or omission must be
88 Portal Act, sec. 10; Conference Report, p.
16; statements of Senator Wiley, explaining
the conference agreement to the Senate, 93
Cong. Rec. 4270; statements of Representatives Gwynne and Walter, explaining the
conference agreement to the House of Representatives, 93 Cong. Rec. 4388, 4389. See
also §§ 790.17 and 790.19.
89 Portal Act, sec. 10; Conference Report, p.
16; statement of Senator Wiley, explaining
the conference agreement to the Senate, 93
Cong. Rec. 4270; statements of Representatives Gwynne and Walter, 93 Cong. Rec. 4388,
4389. See also § 790.19.
90 See § 790.14.
91 See § 790.16.
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§ 790.14
‘‘in good faith.’’ 92 The relief from liability or punishment provided by sections 9 and 10 of the Portal Act is limited by the statute to employers who
both plead and prove all the requirements of the defence. 93
(b) The distinctions mentioned in
paragraph (a) of this section, depending
on whether the acts or omissions complained of occurred before or after May
14, 1947, may be illustrated as follows:
Assume that an employer, on commencing performance of a contract
with X Federal Agency extending from
January 1, 1947 to January 1, 1948, received an opinion from the agency that
employees working under the contract
were not covered by the Fair Labor
Standards Act. Assume further that
the employer may be said to have relied in good faith upon this opinion and
therefore did not compensate such employees during the period of the contract in accordance with the provisions
of the Act. After completion of the contract on January 1, 1948, the employees, who have learned that they are
probably covered by the Act, bring suit
against their employer for unpaid overtime compensation which they claim is
due them. If the court finds that the
employees were performing work subject to the Act, they can recover for
the period commencing May 14, 1947,
even though the employer pleads and
proves that his failure to pay overtime
was in good faith in conformity with
and in reliance on the opinion of X
Agency, because for that period the defense would, under section 10 of the
92 See
§ 790.15.
93 Conference
Report, pp. 15, 16; statements
of Representatives Gwynne and Walter, explaining the conference agreement to the
House of Representatives, 93 Cong. Rec. 4388,
4389; statements of Senators Cooper and
Donnell, 93 Cong. Rec. 4372, 4451, 4452. See
also the President’s message of May 14, 1947,
to the Congress on approval of the Act (93
Cong. Rec. 5281).
The requirements of the statute as to
pleading and proof emphasize the continuing
recognition by Congress of the remedial nature of the Fair Labor Standards Act and of
the need for safeguarding the protection
which Congress intended it to afford employees. See § 790.2; of. statements of Senator
Wiley, 93 Cong. Rec. 4270; Senator Donnell, 93
Cong. Rec. 4452, and Representative Walter,
93 Cong. Rec. 4388, 4389.
Portal Act, have to be based upon written administrative regulation, order,
ruling, approval, or interpretation, or
an administrative practice or enforcement policy of the Administrator of
the Wage and Hour Division. The defense would, however, be good for the
period from January 1, 1947 to May 14,
1947, and the employer would be freed
from liability for that period under the
provisions of section 9 of the statute.
§ 790.14 ‘‘In conformity with.’’
(a) The ‘‘good faith’’ defense is not
available to an employer unless the
acts or omissions complained of were
‘‘in conformity with’’ the regulation,
order, ruling, approval, interpretation,
administrative practice or enforcement
policy upon which he relied. 94 This is
true even though the employer erroneously believes he conformed with it
and in good faith relied upon it; actual
conformity is necessary.
(b) An example of an employer not
acting ‘‘in conformity with’’ an administrative regulation, order, ruling, approval, practice, or enforcement policy
is a situation where an employer receives a letter from the Administrator
of the Wage and Hour Division, stating
that if certain specified circumstances
and facts regarding the work performed
by the employer’s employees exist, the
employees are, in his opinion, exempt
from provisions of the Fair Labor
Standards Act. One of these hypothetical circumstances upon which the
opinion was based does not exist regarding these employees, but the employer, erroneously assuming that this
circumstance is irrelevant, relies upon
the Administrator’s ruling and fails to
compensate the employees in accordance with the Act. Since he did not act
‘‘in conformity’’ with that opinion, he
has no defense under section 9 or 10 of
the Portal Act.
(c) As a further example of the requirement of conformity, reference is
made to the illustration given in
§ 790.13(b), where an employer, who had
a contract with the X Federal Agency
covering the period from January 1,
94 Statement of Senator Cooper, 93 Cong.
Rec. 4451; message of the President to Congress on approval of the Act, May 14, 1947, 93
Cong. Rec. 5281.
735
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§ 790.15
29 CFR Ch. V (7–1–19 Edition)
1947 to January 1, 1948, received an
opinion from the agency that employees working on the contract were not
covered by the Fair Labor Standards
Act. Assume (1) that the X Agency’s
opinion was confined solely and exclusively to activities performed under
the particular contract held by the employer with the agency and made no
general statement regarding the status
under the Act of the employer’s employees while performing other work;
and (2) that the employer, erroneously
believing the reasoning used in the
agency’s opinion also applied to other
and different work performed by his
employees, did not compensate them
for such different work, relying upon
that opinion. As previously pointed
out, the opinion from the X Agency, if
relied on and conformed with in good
faith by the employer, would form the
basis of a ‘‘good faith’’ defense for the
period prior to May 14, 1947, insofar as
the work performed by the employees
on this particular contract with that
agency was concerned. The opinion
would not, however, furnish the employer a defense regarding any other
activities of a different nature performed by his employees, because it
was not an opinion concerning such activities, and insofar as those activities
are concerned, the employer could not
act ‘‘in conformity’’ with it.
§ 790.15 ‘‘Good faith.’’
(a) One of the most important requirements of sections 9 and 10 is proof
by the employer that the act or omission complained of and his conformance with and reliance upon an administrative regulation, order, ruling, approval, interpretation, practice or enforcement policy, were in good faith.
The legislative history of the Portal
Act makes it clear that the employer’s
‘‘good faith’’ is not to be determined
merely from the actual state of his
mind. Statements made in the House
and Senate indicate that ‘‘good faith’’
also depends upon an objective test—
whether the employer, in acting or
omitting to act as he did, and in relying upon the regulation, order, ruling,
approval, interpretation, administrative practice or enforcement policy,
acted as a reasonably prudent man
would have acted under the same or
similar circumstances. 95 ‘‘Good faith’’
requires that the employer have honesty of intention and no knowledge of
circumstances which ought to put him
upon inquiry. 96
(b) Some situations illustrating the
application of the principles stated in
paragraph (a) of this section may be
mentioned. Assume that a ruling from
the Administrator, stating positively
that the Fair Labor Standards Act does
not apply to certain employees, is received by an employer in response to a
request which fully described the duties of the employees and the circumstances surrounding their employment. It is clear that the employer’s
employment of such employees in such
duties and under such circumstances in
reliance on the Administrator’s ruling,
without compensating them in accordance with the Act, would be in good
faith so long as the ruling remained
unrevoked and the employer had no notice of any facts or circumstances
which would lead a reasonably prudent
man to make further inquiry as to
whether the employees came within
the Act’s provisions. Assume, however,
that the Administrator’s ruling was expressly based on certain court decisions holding that employees so engaged in commerce or in the production of goods for commerce, and that
the employer subsequently learned
from his attorney that a higher court
had reversed these decisions or had
cast doubt on their correctness by
holding employees similarly situated
to be engaged in an occupation necessary to the production of goods for
interstate commerce. Assume further
that the employer, after learning of
this, made no further inquiry but continued to pay the employees without
regard to the requirements of the Act
in reliance on the Administrator’s earlier ruling. In such a situation, if the
employees later brought an action
against the employer, the court might
determine that they were entitled to
95 Colloquy
between
Representatives
Reeves and Devitt, 93 Cong. Rec. 1593; colloquy between Senators Ferguson and
Donnell, 93 Cong. Rec. 4451–4452.
96 See statement of Senator McGrath, 93
Cong. Rec. 2254–2255; statement of Representative Keating, 93 Cong. Rec. 4391; statement
of Representative Walter, 93 Cong. Rec. 4389.
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§ 790.16
the benefits of the Act and might decide that the employer, after learning
of the decision of the higher court,
knew facts which would put a reasonably prudent man upon inquiry and
therefore had not provided his good
faith in relying upon the Administrator’s ruling after receiving this advice.
(c) In order to illustrate further the
test of ‘‘good faith,’’ suppose that the X
Federal Agency published a general
bulletin
regarding
manufacturing,
which contained the erroneous statement that all foremen are exempt
under the Fair Labor Standards Act as
employed in a ‘‘bona fide executive
* * * capacity.’’ Suppose also that an
employer knowing that the Administrator of the Wage and Hour Division is
charged with the duties of administering the Fair Labor Standards Act
and of defining the phrase ‘‘bona fide
executive * * * capacity’’ in that Act,
nevertheless relied upon the above bulletin without inquiring further and, inconformity with this advice, failed to
compensate his nonexempt foremen in
accordance with the overtime provisions of the Fair Labor Standards Act
for work subject to that Act, performed
before May 14, 1947. If the employer had
inquired of the Administrator or had
consulted the Code of Federal Regulations, he would have found that his
foremen were not exempt. In a subsequent action brought by employees
under section 16(b) of the Fair Labor
Standards Act, the court may decide
that the employer knew facts which
ought to have put him as a reasonable
man upon further inquiry, and, consequently, that he did not rely ‘‘in
good faith’’ within the meaning of section 9, upon the bulletin published by
the X Agency. 97
(d) Insofar as the period prior to May
14, 1947, is concerned, the employer
may have received an interpretation
from an agency which conflicted with
an interpretation of the Administrator
of the Wage and Hour Division of which
he was also aware. If the employer
chose to reply upon the interpretation
of the other agency, which interpreta97 See
statement
of
Representative
Gwynne, 93 Cong. Rec. 1563, and colloquy between Senators Connally and Donnell, 93
Cong. Rec. 4453.
tion worked to his advantage, considerable weight may well be given to the
fact that the employer ignored the interpretation of the agency charged
with the administration of the Fair
Labor Standards Act and chose instead
to rely upon the interpretation of an
outside agency. 98 Under these circumstances ‘‘the question could properly be considered as to whether it was
a good faith reliance or whether the
employer was simply choosing a course
which was most favorable to him.’’ 99
This problem will not arise in regard to
any acts or omissions by the employer
occurring on or after May 14, 1947, because section 10 provides that the employer, insofar as the Fair Labor
Standards Act is concerned, may rely
only upon regulations, orders, rulings,
approvals, interpretations, administrative practices and enforcement policies
of the Administrator of the Wage and
Hour Division. 100
§ 790.16 ‘‘In reliance on.’’
(a) In addition to acting (or omitting
to act) in good faith and in conformity
with an administrative regulation,
98 This view was expressed several times
during the debates. See statements of Representative Keating, 93 Cong. Rec. 1512 and
4391; colloquy between Representatives
Keating and Devitt, 93 Cong. Rec. 1515; statement of Representative Walter, 93 Cong. Rep.
4389;
statement
of
Representative
MacKinnon, 93 Cong. Rec. 4391; statement of
Representative Gwynne, 93 Cong. Rec. 1563;
statement of Senator Cooper, 93 Cong. Rec.
4451; colloquy between Senators Connally
and Donnell, 93 Cong. Rec. 4452–4453.
99 Statement of Senator Cooper, 93 Cong.
Rec. 4451. Representative Walter, a member
of the Conference Committee, made the following explanatory statement to the House
of Representatives (93 Cong. Rec. 4390): ‘‘The
defense of good faith is intended to apply
only where an employer innocently and to
his detriment, followed the law as it was laid
down to him by Government agencies, without notice that such interpretations were
claimed to be erroneous or invalid. It is not
intended that this defense shall apply where
an employer had knowledge of conflicting
rules and chose to act in accordance with the
one most favorable to him.’’ Representative
Gwynne made a similar statement (93 Cong.
Rec. 1563).
100 Statement of Senator Wiley explaining
Conference agreement to the Senate, 93
Cong. Rec. 4270; statement of Representative
Walter, 93 Cong. Rec. 4389.
737
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29 CFR Ch. V (7–1–19 Edition)
order, ruling, approval, interpretation,
enforcement policy or practice, the employer must also prove that he actually
relied upon it. 101
(b) Assume, for example, that an employer failed to pay his employees in
accordance with the overtime provisions of the Fair Labor Standards Act.
After an employee suit has been
brought against him, another employer
calls his attention to a letter that had
been written by the Administrator of
the Wage and Hour Division, in which
the opinion was expressed that employees of the type employed by the defendant were exempt from the overtime
provisions of the Fair Labor Standards
Act. The defendant had no previous
knowledge of this letter. In the pending
employee suit, the court may decide
that the opinion of the Administrator
was erroneous and that the plaintiffs
should have been paid in accordance
with the overtime provisions of the
Fair Labor Standards Act. Since the
employer had no knowledge of the administrator’s interpretation at the
time of his violations, his failure to
comply with the overtime provisions
could not have been ‘‘in reliance on’’
that interpretation; consequently, he
has no defense under section 9 or section 10 of the Portal Act.
§ 790.17 ‘‘Administrative
regulation,
order, ruling, approval, or interpretation.’’
(a) Administrative regulations, orders, rulings, approvals, and interpretations are all grouped together in sections 9 and 10, with no distinction
being made in regard to their function
under the ‘‘good faith’’ defense. Accordingly, no useful purpose would be
served by an attempt to precisely define and distinguish each term from
the others, especially since some of
101 In a colloquy between Senators Thye
and Cooper (93 Cong. Rec. 4451), Senator Cooper pointed out that the purpose of section 9
was to provide a defense for an employer who
pleads and proves, among other things, that
his failure to bring himself under the Act
‘‘grew out of reliance upon’’ the ruling of an
agency. See also statement of Representative Keating, 93 Cong. Rec. 1512; colloquy between Representatives Keating and Devitt,
93 Cong. Rec. 1515; cf. colloquy between Senators Donnell and Ball, 93 Cong. Rec. 4372.
these terms are often employed interchangeably as having the same meaning.
(b) The terms ‘‘regulation’’ and
‘‘order’’ are variously used to connote
the great variety of authoritative rules
issued pursuant to statute by an administrative agency, which have the
binding effect of law, unless set aside
upon judicial review as arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 102
(c) The term ‘‘interpretation’’ has
been used to describe a statement ‘‘ordinarily of an advisory character, indicating merely the agency’s present belief concerning the meaning of applicable statutory language.’’ 103 This would
include bulletins, releases, and other
statements issued by an agency which
indicate its interpretation of the provisions of a statute.
(d) The term ‘‘ruling’’ commonly refers to an interpretation made by an
agency ‘‘as a consequence of individual
requests for rulings upon particular
questions.’’ 104 Opinion letters of an
agency expressing opinions as to the
application of the law to particular
facts presented by specific inquiries
fall within this description.
(e) The term ‘‘approval’’ includes the
granting of licenses, permits, certificates or other forms of permission by
an agency, pursuant to statutory authority. 105
(f) The terms ‘‘administrative regulation order, ruling, approval, or interpretation’’ connote affirmative action
on the part of an agency. 106 A failure
102 See Final Report of Attorney General’s
Committee on Administrative Procedure,
Senate Document No. 8, 77th Cong. 1st sess.
(1941) p. 27; 1 Vom Baur, Federal Administrative Law (1942) p. 486; sections 2(c), 2(d) and
10(e) of the Administrative Procedure Act, 5
U.S.C.A. section 1001.
103 Final Report of the Attorney General’s
Committee on Administrative Procedure,
Senate Document No. 8, 77th Cong., 1st sess.
(1941), p. 27.
104 Final Report of the Attorney General’s
Committee, page 27. To the same effect in 1
Vom Baur, Federal Administrative Law
(1942), p. 492.
105 See section 2(e) of the Administrative
Procedure Act, 5 U.S.C.A. sec. 1001.
106 See Final Report of Attorney General’s
Committee, p. 27; 1 Vom Baur, Federal Administrative Law, pp. 486, 492; Conference
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§ 790.17
to act or a failure to reply to an inquiry on the part of an administrative
agency is not a ‘‘regulation, order, ruling, approval, or interpretation’’ within the meaning of sections 9 and 10. 107
Thus, suppose that an employer writes
a letter to the Administrator of the
Wage and Hour Division, setting forth
the facts concerning his business. He
goes on to state in his letter that he
believes his employees are not covered
by the Fair Labor Standards Act, and
that unless he hears to the contrary
from the Administrator, he will not
pay them in accordance with its provisions. When the employer does not receive a reply to his letter within what
he regards as a reasonable time, he assumes that the Administrator agrees
with his (the employer’s) interpretation of the Act and he acts accordingly.
The employer’s reliance under such circumstances is not a reliance upon an
administrative regulation, order, ruling, approval or interpretation, within
the meaning of sections 9 and 10.
(g) The affirmative action taken by
the agency must be one which actually
results in a ‘‘regulation, order, ruling,
approval, or interpretation.’’ If for example, the agency declines to express
an opinion as to the application of the
law in a particular fact situation, the
agency is refraining from interpreting
the law rather than giving an interpretation. 108
(h) An employer does not have a defense under these two sections unless
the regulation, order, ruling, approval,
or interpretation, upon which he relies,
is in effect and operation at the time of
his reliance. To the extent that it has
been rescinded, modified, or deterReport, p. 16; statements of Representative
Walter, 93 Cong. Rec. 4389; statements of
Representative Gwynne, 93 Cong. Rec. 1491;
statements of Senator Donnell, 93 Cong. Rec.
2185; President’s message of May 14, 1947, on
approval of the Portal-to-Portal Act (93
Cong. Rec. 5281).
107 That this is true on and after the effective date of the Act is clear from the requirement in section 10 that the regulation, order,
ruling, approval or interpretation relied on
must be that of the Administrator in writing. As to section 9, the terms appear to have
no different meaning.
108 See Final Report of Attorney General’s
Committee on Administrative Procedure, p.
33.
mined by judicial authority to be invalid, it is no longer a ‘‘regulation,
order, ruling, approval, or interpretation,’’ and, consequently, an employer’s subsequent reliance upon it offers
him no defense under section 9 and
10. 109 On the other hand, the last sentence in section 9 and in section 10 expressly provides that where the employer’s good faith reliance on a regulation, order, ruling, approval or interpretation occurs before it is rescinded,
modified, or determined by judicial authority to be invalid, his claim of a
‘‘good faith’’ defense for such earlier
period is not defeated by the subsequent rescission or modification or by
the subsequent determination of invalidity.
(i) To illustrate these principles, assume that the Administrator of the
Wage and Hour Division, in reply to an
inquiry received from a particular employer, sends him a letter, in which the
opinion is expressed that employees
performing a particular type of work
are not covered by the Fair Labor
Standards Act. The employer relied
upon the Administrator’s letter and did
not pay his employees who were engaged in such work, in accordance with
the provisions of the Fair Labor Standards Act. Several months later the Administrator issues a general statement,
published in the FEDERAL REGISTER
and given general distribution, that recent court decisions have persuaded
him that the class of employees referred to above are within the coverage
of the Fair Labor Standards Act. Accordingly, the statement continues,
the Administrator hereby rescinds all
his previous interpretations and rulings to the contrary. The employer
who had received the Administrator’s
109 See House Report, p. 7, and statements
of Representative Gwynne, 93 Cong. Rec.
1491, 1492, 1563. It will be noted that the provisions of section 12 of the Act, affording relief of employers who acted in conformity
with the invalidated ‘‘area of production’’
regulations, would have been unnecessary if
reliance could be placed on a regulation no
longer in effect. See statement of Representative Gwynne, 93 Cong. Rec. 4388, and cf. remarks of Senator McCarran, discussing the
bill before section 12 was added by the conference committee, 93 Cong. Rec. 2247.
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§ 790.18
29 CFR Ch. V (7–1–19 Edition)
letter, not learning of the Administrator’s subsequent published statement
rescinding his contrary interpretations, continued to rely upon the Administrator’s letter after the effective
date of the published statement. Under
these circumstances, the employer
would, from the date he received the
Administrator’s letter to the effective
date of the published statement rescinding the position expressed in the
letter, have a defense under section 9
or 10, assuming he relied upon and conformed with that letter in good faith.
However, in spite of the fact that this
employer did not receive actual notice
of the subsequent published statement,
he has no defense for his reliance upon
the letter during the period after the
effective date of the public statement,
because the letter, having been rescinded, was no longer an ‘‘administrative * * * ruling * * * or interpretation’’ within the meaning of sections 9
and 10. 110
§ 790.18 ‘‘Administrative practice or
enforcement policy.’’
(a) The terms ‘‘administrative practice or enforcement policy’’ refer to
courses of conduct or policies which an
agency has determined to follow 111 in
the administration and enforcement of
a statute, either generally, or with respect to specific classes of situations. 112 Administrative practices and
110 See Final Report of Attorney General’s
Gwynne, 93 Cong. Rec. 1563; colloquy between
Representative Gwynne and Lee Pressman,
Hearings before House Subcommittee on the
Judiciary, pp. 156–7.
The fact that an employer has no defense
under section 9 or 10 of the Portal Act in the
situation stated in the text would not, of
course, preclude a court from finding that he
acted in good faith having reasonable
grounds to believe he was not in violation of
the law. In such event, section 11 of the Act
would permit the court to reduce or eliminate the employer’s liability for liquidated
damages in an employee suit. See § 790.22.
111 The agency may have determined to follow the course of conduct or policy for a limited time only (see paragraphs (c) and (f),
this section) or for an indefinite time (see
paragraph (b), this section), or for a period
terminable by the happening of some contingency, such as a final decision in pending
litigation.
112 See United States v. Minnesota, 270 U.S.
181 (1926); United States v. Boston & Maine
enforcement policies may be set forth
in statements addressed by the agency
to the public. 113 Although they may be,
and frequently are, based upon decisions or views which the agency has set
forth in its regulations, orders, rulings,
approvals, or interpretations, nevertheless administrative practices and enforcement policies differ from these
forms of agency action in that such
practices or policies are not limited to
matters concerned with the meaning or
legal effect of the statutes administered by the agency and may be based
wholly or in part on other considerations.
(b) To illustrate this distinction, suppose the Administrator of the Wage
and Hour Division issues a general
statement indicating that in his opinion a certain class of employees come
within a specified exemption from provisions of the Fair Labor Standards
Act in any workweek when they do not
engage in a substantial amount of nonexempt work. Such a statement is an
‘‘interpretation’’ within the meaning of
sections 9 and 10 of the Portal Act. Assume that at the same time, the Administrator states that for purposes of
enforcement, until further notice such
an employee will be considered as engaged in a substantial amount of nonexempt work in any workweek when he
spends in excess of a specified percentage of his time in such nonexempt
work. This latter type of statement announces an ‘‘administrative practice or
R.R. Co., 279 U.S. 732 (1929); Lucas v. American
Code Co., 280 U.S. 445 (1930); Estate of Sanford
v. Commissioner of Internal Revenue, 308 U.S.
39 (1939). See also Final Report of Attorney
General’s Committee on Administrative Procedure in Government Agencies, pp. 26–29; 1
Von Baur, Federal Administrative Law
(1942), p. 474.
As to requirement that practice or policy
be one with respect to a ‘‘class of employers,’’ see paragraph (g) of this section.
113 Pursuant to section 3 of the Administrative Procedure Act, statements of general
policy formulated and adopted by the agency
for the guidance of the public are published
in the FEDERAL REGISTER. An example is the
statement of the Secretary of Labor and the
Administrator of the Wage and Hour Division, dated June 16, 1947, published in 12 FR
3915.
740
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Wage and Hour Division, Labor
§ 790.18
enforcement policy’’ within the meaning of sections 9 and 10 of the Portal
Act.
(c) An administrative practice or enforcement policy may, under certain
circumstances be at variance with the
agency’s current interpretation of the
law. For example, suppose the Administrator announces that as a result of
court decisions he has changed his view
as to coverage of a certain class of employees under the Fair Labor Standards Act. However, he may at the same
time announce that in order to give affected employers an opportunity to
make the adjustments necessary for
compliance with the changed interpretation, the Wage and Hour Division
will not commence to enforce the Act
on the basis of the new interpretation
until the expiration of a specified period.
(d) In the statement of the managers
on the part of the House, accompanying the report of the Conference
Committee on the Portal-to-Portal
Act, it is indicated (page 16) that under
sections 9 and 10 ‘‘an employer will be
relieved from liability, in an action by
an employee, because of reliance in
good faith on an administrative practice or enforcement policy only (1)
where such practice or policy was
based on the ground that an act or
omission was not a violation of the
(Fair Labor Standards) Act, or (2)
where a practice or policy of not enforcing the Act with respect to acts or
omissions led the employer to believe
in good faith that such acts or omissions were not violations of the Act.’’
(e) The statement explaining the
Conference Committee Report goes on
to say, ‘‘However, the employer will be
relieved from criminal proceedings or
injunctions brought by the United
States, not only in the cases described
in the preceding paragraph, but also
where the practice or policy was such
as to lead him in good faith to believe
that he would not be proceeded against
by the United States.’’
(f) The statement explaining the Conference Committee Report gives the
following illustrations of the above
rules:
An employer will not be relieved from liability under the Fair Labor Standards Act
of 1938 to his employees (in an action by
them) for the period December 26, 1946, to
March 1, 1947, if he is not exempt under the
‘‘Area of Production’’ regulations published
in the FEDERAL REGISTER of December 25,
1946, notwithstanding the press release
issued by the Administrator of the Wage and
Hour Division of the Department of Labor, in
which he stated that he would not enforce
the Fair Labor Standards Act of 1938 on account of acts or omissions occurring prior to
March 1, 1947. On the other hand, he will, by
reason of the enforcement policy set forth in
such press releases, have a good defense to a
criminal proceeding or injunction brought by
the United States based on an act or omission prior to March 1, 1947.
(g) It is to be noted that, under the
language of sections 9 and 10, an employer has a defense for good faith reliance on an administrative practice or
an enforcement policy only when such
practice or policy is ‘‘with respect to
the class of employers to which he belonged.’’ 114 Thus where an enforcement
policy has been announced pertaining
to laundries and linen-supply companies serving industrial or commercial
establishments the operator of an establishment furnishing window-washing service to industrial and commercial concerns, who relied upon that policy in regard to his employees, has no
defense under sections 9 and 10. The enforcement policy upon which he
claimed reliance did not pertain to
‘‘the class of employers to which he belonged.’’
(h) Administrative practices and enforcement policies, similar to administrative regulations, orders, rulings, approvals and interpretations required affirmative action by an administrative
agency. 115 This should not be construed
114 This provision, which appeared for the
first time in the conference bill, to which the
term ‘‘practice’’ was restored after elimination by the Senate, was apparently designed to meet some of the objections which
led to elimination of the word ‘‘practice’’
from the bill reported by the Senate judiciary Committee. Cf. remarks of Senator Murray, 93 Cong. Rec. 2238; remarks of Senator
Johnston, 93 Cong. Rec. 2373; colloquy between Senators Lucas and Donnell, 93 Cong.
Rec. 2185; remarks of Senator McGrath, 93
Cong. Rec. 2254–2256.
115 See Union Stockyards & Transit Co. v.
United States, 308 U.S. 213, 223 (1939); and
United States v. American Union Transport,
Inc., 327 U.S. 437, 454 (1946). Cf. Federal Trade
Continued
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§ 790.19
29 CFR Ch. V (7–1–19 Edition)
as meaning that an agency may not
have administrative practices or policies to refrain from taking certain action as well as practices or policies
contemplating positive acts of some
kind. 116 But before it can be determined that an agency actually has a
practice or policy to refrain from acting, there must be evidence of its adoption by the agency through some affirmative action establishing it as the
practice or policy of the agency. 117
Suppose, for example, that shoe factories in a particular area were not investigated by Wage and Hour Division
inspectors operating in the area. This
fact would not establish the existence
of a practice or policy of the Administrator to treat the employees of such
establishments, for enforcement purposes, as not subject to the provisions
of the Fair Labor Standards Act, in the
absence of proof of some affirmative
action by the Administrator adopting
such a practice or policy. A failure to
inspect might be due to any one of a
number of different reasons. It might,
for instance, be due entirely to the fact
that the inspectors’ time was fully occupied in inspections of other industries in the area.
(i) It was pointed out above that sections 9 and 10 do not offer a defense to
the employer who relies upon a regulation, order, ruling, approval or interpretation which at the time of his reliance has been rescinded, modified or
determined by judicial authority to be
Commission v. Bunte Brothers, Inc., 312 U.S.
349, 351 (1941). See also President’s message
of May 14, 1947, 93 Cong. Rec. 5281.
116 See, for example, Mintz v. Baldwin, 289
U.S. 346, 349 (1933), where the Department of
Agriculture announced ‘‘its policy for the
present is to leave the control (of Bang’s disease) with the various States.’’ See also in
this connection the statement of June 23,
1947, by the Senate Committee on the Judiciary regarding the President’s message of
May 14, 1947, on the Portal-to-Portal Act, 93
Cong. Rec. 5281.
117 Union Stockyards & Transit Co. v. United
States, supra. It may be noted in this connection that examples given by the sponsors of
the legislation, in discussing the terms ‘‘administrative practice or enforcement policy,’’ involved situations in which affirmative action had been taken by the agency.
Conference Report, p. 16; 93 Cong. Rec. 2185,
2198, 4389–4391.
invalid. The same is true regarding administrative practices and enforcement
policies. 118 However, a plea of a ‘‘good
faith’’ defense is not defeated by the
fact that after the employer’s reliance,
the practice or policy is rescinded,
modified, or declared invalid.
§ 790.19 ‘‘Agency of the United States.’’
(a) In order to provide a defense
under section 9 or section 10 of the Portal Act, the regulation, order, ruling,
approval, interpretation, administrative practice or enforcement policy relied upon and conformed with must be
that of an ‘‘agency of the United
States.’’ Insofar as acts or omissions
occurring on or after May 14, 1947 are
concerned, it must be that of the
‘‘agency of the United States specified
in’’ section 10(b), which, in the case of
the Fair Labor Standards Act, is ‘‘the
Administrator of the Wage and House
Division of the Department of Labor.’’
However, with respect to acts or omissions occurring prior to May 14, 1947,
section 9 of the Act permits the employer to show that he relied upon and
conformed with a regulation, order,
ruling, approval, interpretation, administrative practice or enforcement
policy of ‘‘any agency of the United
States.’’ 119
(b) The Portal Act contains no comprehensive definition of ‘‘agency’’ as
used in sections 9 and 10, but an indication of the meaning intended by Congress may be found in section 10. In
that section, where the ‘‘agency’’
whose regulation, order, ruling, approval, interpretation, administrative
practice or enforcement policy may be
relied on is confined to ‘‘the agency of
the United States’’ specified in the section, the Act expressly limits the
meaning of the term to the official or
officials actually vested with final authority under the statutes involved. 120
118 See § 790.17 (h) and (i), and footnotes 111
and 112.
119 The differences in the provisions of the
two sections are explained and illustrated in
§ 790.13.
120 In regard to the Walsh-Healey Act,
‘‘agency’’ is defined in section 10 of the Portal-to-Portal Act as including, in addition to
the Secretary of Labor, ‘‘any Federal officer
utilized by him in the administration of such
Act.’’ The legislative history of the Portal-
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Wage and Hour Division, Labor
§ 790.20
Similarly, the definitions of ‘‘agency’’
in other Federal statutes 121 indicate
that the term has customarily been restricted in its usage by Congress to the
persons vested under the statutes with
the real power to act for the Government—those who actually have the
power to act as (rather than merely
for) the highest administrative authority of the Government establishment. 122 furthermore, it appears from
the statement of the managers on the
part of the House accompanying the
Conference Committee Report, that the
term ‘‘agency’’ as appearing in the Portal Act was employed in this sense. As
there stated (p. 16), the regulations, orders, ruling, approvals, interpretations,
administrative practices and enforcement policies relied upon and conformed with ‘‘must be those of an
‘agency’ and not of an individual officer or employee of the agency. Thus, if
inspector A tells the employer that the
agency interpretation is that the employer is not subject to the (Fair Labor
Standards) Act, the employer is not relieved from liability, despite his reliance in good faith on such interpretations, unless it is in fact the interpretation of the agency.’’ 123 Similarly, the
Chairman of the Senate Judiciary
Committee, in explaining the conference agreement to the Senate, made
the following statement concerning the
‘‘good faith’’ defense. ‘‘It will be noted
that the relief from liability must be
based on a ruling of a Federal agency,
and not a minor official thereof. I,
to-Portal Act (93 Cong. Rec. 2239–2240) reveals that this clause was added because of
the language in the Walsh-Healey Act authorizing the Secretary of Labor to administer the Act ‘‘and to utilize such Federal officers and employees * * * as he may find
necessary in the administration.’’
121 FEDERAL REGISTER Act, 44 U.S.C. 304;
Federal Reports Act, 5 U.S.C. 139; Administrative Procedure Act, 5 U.S.C. 1001.
122 See Cudahy Packing Co. v. Holland, 315
U.S. 357 (1942); United States v. Watashe, 102 F.
(2d) 428 (C.A. 10, 1939); 39 Opinions Attorney
General 15 (1925). Cf. Keyser v. Hitz, 133 U.S.
138 (1890); 39 Opinions Attorney General 541
(1933); 13 George Washington Law Review 144
(1945).
123 See also statement by Representative
Gwynne, 93 Cong. Rec. 1563; and statement
by Senator Wiley explaining the conference
agreement to the Senate, 93 Cong. Rec. 4270.
therefore, feel that the legitimate interest of labor will be adequately protected under such a provision, since the
agency will exercise due care in the
issuance of any such ruling.’’ 124
(c) Accordingly, the defense provided
by sections 9 and 10 of the Portal Act is
restricted to those situations where
the employer can show that the regulation, order, ruling, approval, interpretation, administrative practice or enforcement policy with which he conformed and on which he relied in good
faith was actually that of the authority vested with power to issue or adopt
regulations, orders, rulings, approvals,
interpretations, administrative practices or enforcement policies of a final
nature as the official act or policy of
the agency. 125 Statements made by
other officials or employees are not
regulations, orders, rulings, approvals,
interpretations, administrative practices or enforcement policies of the
agency within the meaning of sections
9 and 10.
RESTRICTIONS AND LIMITATIONS ON
EMPLOYEE SUITS
§ 790.20 Right of employees to sue; restrictions on representative actions.
Section 16(b) of the Fair Labor
Standards Act, as amended by section 5
of the Portal Act, no longer permits an
employee or employees to designate an
agent or representative (other than a
member of the affected group) to maintain, an action for and in behalf of all
employees similarly situated. Collective actions brought by an employee or
employees (a real party in interest) for
and in behalf of himself or themselves
and other employees similarly situated
may still be brought in accordance
with the provisions of section 16(b).
With respect to these actions, the
amendment provides that no employee
shall be a party plaintiff to any such
action unless he gives his consent in
writing to become such a party and
124 Statement of Senator Wiley, 93 Cong.
Rec. 4270.
125 Statement by Representative Gwynne,
93 Cong. Rec. 1563; statements by Representative Walter, 93 Cong. Rec. 1496–1497, 4389;
statement by Representative Robsion, 93
Cong. Rec. 1500; statement by Senator Thye,
93 Cong. Rec. 4452.
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247118
§ 790.21
29 CFR Ch. V (7–1–19 Edition)
such consent is filed in the court in
which such action is brought. The
amendment is expressly limited to actions which are commenced on or after
the date of enactment of the Portal
Act. Representative actions which were
pending on May 14, 1947 are not affected by this amendment. 126 However,
under sections 6 and 8 of the Portal
Act, a collective or representative action commenced prior to such date will
be barred as to an individual claimant
who was not specifically named as a
party plaintiff to the action on or before September 11, 1947, if his written
consent to become such a party is not
filed with the court within a prescribed
period. 127
§ 790.21 Time for bringing employee
suits.
(a) The Portal Act 128 provides a statute of limitations fixing the time limits within which actions by employees
under section 16(b) of the Fair Labor
Standards Act 129 may be commenced,
as follows:
(1) Actions to enforce causes of action accruing on or after May 14, 1947; two years.
(2) Actions to enforce causes of action accruing before May 14, 1947. 130 Two years or
126 Conference
Report, p. 13.
Report, pp. 14, 15. The claimant must file this consent within the shorter
of the following two periods: (1) Two years,
or (2) the period prescribed by the applicable
State Statute of limitations. See Conference
Report, p. 15.
128 See sections 6–8 inclusive.
129 Sponsors of the legislation stated that
the time limitations prescribed therein
apply only to the statutory actions, brought
under the special authority contained in section 16(b), in which liquidated damages may
be recovered, and do not purport to affect
the usual application of State statutes of
limitation to other actions brought by employees to recover wages due them under
contract, at common law, or under State
statutes. Statements of Representative
Gwynne, 93 Cong. Rec. 1491, 1557–1588; colloquy between Representative Robsion,
Vorys, and Celler, 93 Cong. Rec. 1495.
130 This refers to actions commenced after
September 11, 1947. Such actions commenced
on or between May 14, 1947 and September 11,
1947 were left subject to State statutes of
limitations. As to collective and representatives actions commenced before May 14, 1947,
section 8 of the Portal Act makes the period
of limitations stated in the text applicable
127 Conference
period prescribed by applicable State statute
of limitations, whichever is shorter.
These are maximum periods for bringing such actions, measured from the
time the employee’s cause of action accrues to the time his action is commenced. 131
(b) The courts have held that a cause
of action under the Fair Labor Standards Act for unpaid minimum wages or
unpaid overtime compensation and for
liquidated damages ‘‘accrues’’ when the
employer fails to pay the required compensation for any workweek at the regular pay day for the period in which
the workweek ends. 132 The Portal
Act 133 provides that an action to enforce such a cause of action shall be
considered to be ‘‘commenced’’:
(1) In individual actions, on the date
the complaint is filed;
(2) In collective or class actions, as to
an individual claimant.
(i) On the date the complaint is filed,
if he is specifically named therein as a
party plaintiff and his written consent
to become such is filed with the court
on that date, or
(ii) On the subsequent date when his
written consent to become a party
plaintiff is filed in the court, if it was
not so filed when the complaint was
filed or if he was not then named therein as a party plaintiff. 134
to the filing, by certain individual claimants, of written consents to become parties
plaintiff. See Conference Report, p. 15;
§ 790.20 of this part.
131 Conference Report, pp. 13–15.
132 Reid v. Solar Corp., 69 F. Supp. 626 (N.D.
Iowa); Mid-Continent Petroleum Corp. v. Keen,
157 F. (2d) 310, 316 (C.A. 8). See also Brooklyn
Savings Bank v. O’Neil, 324 U.S. 697;
Rigopoulos v. Kervan, 140 F. (2d) 506 (C.A. 2).
In some instances an employee may receive, as a part of his compensation, extra
payments under incentive or bonus plans,
based on factors which do not permit computation and payment of the sums due for a
particular workweek or pay period until
some time after the pay day for that period.
In such cases it would seem that an employee’s cause of action, insofar as it may be
based on such payments, would not accrue
until the time when such payment should be
made. Cf. Walling v. Harnischfeger Corp., 325
U.S. 427.
133 Section 7. See also Conference Report, p.
14.
134 This is also the rule under section 8 of
the Portal Act as to individual claimants, in
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Wage and Hour Division, Labor
§ 790.22
(c) The statute of limitations in the
Portal Act is silent as to whether or
not the running of the two-year period
of limitations may be suspended for
any cause. 135 In this connection, attention is directed to section 205 of the
Soldiers’ and Sailors’ Civil Relief Act
of 1940, 136 as amended, which provides
that the period of military service
shall not be included in the period limited by law for the bringing of an action or proceeding, whether the cause
of action shall have accrued prior to or
during the period of such service.
§ 790.22 Discretion of court as to assessment of liquidated damages.
(a) Section 11 of the Portal Act provides that in any action brought under
the Fair Labor Standards Act to recover unpaid minimum wages, unpaid
overtime, compensation, or liquidated
damages, the court may, subject to
prescribed conditions, in its sound discretion award no liquidated damages or
award any amount of such damages not
to exceed the amount specified in section 16 (b) of the Fair Labor Standards
Act. 137
collective or representative actions commenced before May 14, 1947, who were not
specifically named as parties plaintiff on or
before September 11, 1947.
135 A limited suspension provision was contained in section 2(d) of the House bill, but
was eliminated by the Senate. Neither the
Senate debates, the Senate committee report, nor the conference committee report,
indicate the reason for this. While the courts
have held that in a proper case, a statute of
limitations may be suspended by causes not
mentioned in the statute itself (Braun v.
Sauerwein, 10 Wall. 218, 223; see also Richards
v. Maryland Ins. Co., 8 Cranch 84, 92;
Bauserman v. Blunt, 147 U.S. 647), they have
also held that when the statute has once
commenced to run, its operation is not suspended by a subsequent disability to sue, and
that the bar of the statute cannot be postponed by the failure of the creditor (employee) to avail himself of any means within
his power to prosecute or to preserve his
claim. Bauserman v. Blunt, 147 U.S. 647, 657;
Smith v. Continental Oil Co., 59 F. Supp. 91, 94.
136 Act of October 17, 1940, ch. 888, 54 Stat.
1178, as amended by the act of October 6,
1942, ch. 581, 56 Stat. 769 (50 U.S.C.A. App.
sec. 525).
137 Section 16(b) of the Fair Labor Standards Act provides that an employer who violates the minimum—wage or overtime provisions of the act shall be liable to the affected
(b) The conditions prescribed as prerequisites to such an exercise of discretion by the court are two: (1) The employers must show to the satisfaction
of the court that the act or omission
giving rise to such action was in good
faith; and (2) he must show also, to the
satisfaction of the court, that he had
reasonable grounds for believing that
his act or omission was not a violation
of the Fair Labor Standards Act. If
these conditions are met by the employer against whom the suit is
brought, the court is permitted, but
not required, in its sound discretion to
reduce or eliminate the liquidated
damages which would otherwise be required in any judgment against the employer. This may be done in any action
brought under section 16(b) of the Fair
Labor Standards Act, regardless of
whether the action was instituted prior
to or on or after May 14, 1947, and regardless of when the employee activities on which it is based were engaged
in. If, however, the employer does not
show to the satisfaction of the court
that he has met the two conditions
mentioned above, the court is given no
discretion by the statute, and it continues to be the duty of the court to
award liquidated damages. 138
(c) What constitutes good faith on
the part of an employer and whether he
had reasonable grounds for believing
employees not only for the amount of the
unpaid minimum wages or unpaid overtime
compensation, as the case may be, but also
for an additional equal amount as liquidated
damages. The courts have held that this provision is ‘‘not penal in its nature’’ but rather
that such damages ‘‘constitute compensation
for the retention of a workman’s pay’’ where
the required wages are not paid ‘‘on time.’’
Under this provision of the law, the courts
have held that the liability of an employer
for liquidated damages in an amount equal
to his underpayments of required wages become fixed at the time he fails to pay such
wages when due, and the courts were given
no discretion, prior to the enactment of the
Portal-to-Portal Act, to relieve him of any
portion of this liability. See Brooklyn Savings
Bank v. O’Neil, 324 U.S. 697; Overnight Motor
Transp. Co. v. Missel, 316 U.S. 572.
138 See Conference Report, p. 17; remarks of
Representative Walter, 93 Cong. Rec. 1496–
1497; President’s message of May 14, 1947, to
the Congress on approval of the Portal Act,
93 Cong. Rec. 5281.
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Pt. 791
29 CFR Ch. V (7–1–19 Edition)
that his act or omission was not a violation of the Fair Labor Standards Act
are mixed questions of fact and law,
which should be determined by objective tests. 139 Where an employer makes
the required showing, it is for the court
to determine in its sound discretion
what would be just according to the
law on the facts shown.
(d) Section 11 of the Portal Act does
not change the provisions of section
16(b) of the Fair Labor Standards Act
under which attorney’s fees and court
costs are recoverable when judgment is
awarded to the plaintiff.
the extent that prior administrative
rulings, interpretations, practices, and
enforcement policies relating to sections 3 (d), (e) and (g) of the Act, which
define the terms ‘‘employer’’, ‘‘employee’’, and ‘‘employ’’, are inconsistent or in conflict with the principles stated in this part they are hereby rescinded. The interpretations contained in this part may be relied upon
in accordance with section 10 of the
Portal-to-Portal Act, 3 so long as they
remain effective and are not modified,
amended, rescinded, or determined by
judicial authority to be incorrect.
PART 791—JOINT EMPLOYMENT RELATIONSHIP UNDER FAIR LABOR
STANDARDS ACT OF 1938
[23 FR 5905, Aug. 5, 1958]
Sec.
791.1
791.2
Introductory statement.
Joint employment.
AUTHORITY: 52 Stat. 1060, as amended; 29
U.S.C. 201–219.
§ 791.1 Introductory statement.
The purpose of this part is to make
available in one place the general interpretations of the Department of
Labor pertaining to the joint employment relationship under the Fair Labor
Standards Act of 1938. 1 It is intended
that the positions stated will serve as
‘‘a practical guide to employers and
employees as to how the office representing the public interest in its enforcement will seek to apply it.’’ 2
These interpretations contain the construction of the law which the administrator believes to be correct and which
will guide him in the performance of
his duties under the Act, unless and
until he is otherwise directed by authoritative decisions of the courts or
he concludes upon reexamination of an
interpretation that it is incorrect. To
139 Cf.
§§ 790.13 to 790.16.
U.S.C. 201–219. Under Reorganization
Plan No. 6 of 1950 and pursuant to General
Order No. 45–A, issued by the Secretary of
Labor on May 24, 1950, interpretations of the
provisions (other than the child labor provisions) of the act are issued by the Administrator of the Wage and Hour Division on the
advice of the Solicitor of Labor. See 15 FR
3290.
2 Skidmore v. Swift and Company, 323 U.S.
134, 138.
1 29
§ 791.2
Joint employment.
(a) A single individual may stand in
the relation of an employee to two or
more employers at the same time
under the Fair Labor Standards Act of
1938, since there is nothing in the act
which prevents an individual employed
by one employer from also entering
into an employment relationship with
a different employer. A determination
of whether the employment by the employers is to be considered joint employment or separate and distinct employment for purposes of the act depends upon all the facts in the particular case. If all the relevant facts establish that two or more employers are
acting entirely independently of each
other and are completely disassociated
with respect to the employment of a
particular employee, who during the
same workweek performs work for
more than one employer, each employer may disregard all work performed by the employee for the other
employer (or employers) in determining his own responsibilities under
the Act. 4 On the other hand, if the
facts establish that the employee is
employed jointly by two or more employers, i.e., that employment by one
employer is not completely disassociated from employment by the other
employer(s), all of the employee’s work
for all of the joint employers during
the workweek is considered as one employment for purposes of the Act. In
3 61
Stat. 84; 29 U.S.C. 251–262.
v. Friend, et al., 156 F. 2d 429 (C. A.
4 Walling
8).
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Wage and Hour Division, Labor
Pt. 793
this event, all joint employers are responsible, both individually and jointly, for compliance with all of the applicable provisions of the act, including
the overtime provisions, with respect
to the entire employment for the particular workweek. 5 In discharging the
joint obligation each employer may, of
course, take credit toward minimum
wage and overtime requirements for all
payments made to the employee by the
other joint employer or employers.
(b) Where the employee performs
work which simultaneously benefits
two or more employers, or works for
two or more employers at different
times during the workweek, a joint employment relationship generally will be
considered to exist in situations such
as:
(1) Where there is an arrangement between the employers to share the employee’s services, as, for example, to
interchange employees; 6 or
(2) Where one employer is acting directly or indirectly in the interest of
the other employer (or employers) in
relation to the employee; 7 or
(3) Where the employers are not completely disassociated with respect to
the employment of a particular employee and may be deemed to share
control of the employee, directly or in5 Both the statutory language (section 3(d)
defining ‘‘employer’’ to include anyone acting directly or indirectly in the interest or
an employer in relation to an employee) and
the Congressional purpose as expressed in
section 2 of the Act, require that employees
generally should be paid overtime for working more than the number of hours specified
in section 7(a), irrespective of the number of
employers they have. Of course, an employer
should not be held responsible for an employee’s action in seeking, independently, additional part-time employment. But where two
or more employers stand in the position of
‘‘joint employers’’ and permit or require the
employee to work more than the number of
hours specified in section 7(a), both the letter and the spirit of the statute require payment of overtime.
6 Mid-Continent
Pipeline Co., et al. v.
Hargrave, 129 F. 2d 655 (C.A. 10); Slover v.
Wathen, 140 F. 2d 258 (C.A. 4); Mitchell v. Bowman, 131 F. Supp., 520 (M.D. Ala. 1954); Mitchell v. Thompson Materials & Construction Co.,
et al., 27 Labor Cases Para. 68, 888; 12 WH
Cases 367 (S.D. Calif. 1954).
7 Section 3(d) of the Act; Greenberg v. Arsenal Building Corp., et al., 144 F. 2d 292 (C.A. 2).
directly, by reason of the fact that one
employer controls, is controlled by, or
is under common control with the
other employer. 8
[23 FR 5905, Aug. 5, 1958, as amended at 26 FR
7732, Aug. 18, 1961]
PART 793—EXEMPTION OF CERTAIN RADIO AND TELEVISION
STATION
EMPLOYEES
FROM
OVERTIME PAY REQUIREMENTS
UNDER SECTION 13(b)(9) OF THE
FAIR LABOR STANDARDS ACT
INTRODUCTORY
Sec.
793.0
793.1
793.2
Purpose of interpretative bulletin.
Reliance upon interpretations.
General explanatory statement.
REQUIREMENTS FOR EXEMPTION
793.3 Statutory provision.
793.4 General requirements for exemption.
793.5 What determines application of the exemption.
793.6 Exemption limited to employees in
named occupations.
793.7 ‘‘Announcer.’’
793.8 ‘‘News editor.’’
793.9 ‘‘Chief engineer.’’
793.10 Primary employment in named occupations.
793.11 Combination announcer, news editor
and chief engineer.
793.12 Related and incidental work.
793.13 Limitation on related and incidental
work.
793.14 Employed by.
793.15 Duties away from the station.
793.16 ‘‘Radio or television station.’’
793.17 ‘‘Major studio.’’
793.18 Location of ‘‘major studio.’’
WORKWEEK APPLICATION OF EXEMPTION
793.19 Workweek is used in applying the exemption.
793.20 Exclusive engagement in exempt
work.
793.21 Exempt and nonexempt work.
AUTHORITY: Secs. 1–19, 52 Stat. 1060, as
amended; 75 Stat. 65; 29 U.S.C. 201–219.
SOURCE: 26 FR 10275, Nov. 2, 1961, unless
otherwise noted.
8 Dolan v. Day & Zimmerman, Inc., et al., 65
F. Supp. 923 (D. Mass. 1946); McComb v. Midwest Rust Proof Co., et al., 16 Labor Cases
Para. 64, 927; 8 WH Cases 460 (E.D. Mo. 1948);
Durkin v. Waldron., et al., 130 F. Supp., 501
(W.D. La. 1955). See also Wabash Radio Corp.
v. Walling, 162 F. 2d 391 (C.A. 6).
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§ 793.0
29 CFR Ch. V (7–1–19 Edition)
INTRODUCTORY
§ 793.0 Purpose of interpretative bulletin.
This part 793 constitutes the official
interpretative bulletin of the Department of Labor with respect to the
meaning and application of section
13(b)(9) of the Fair Labor Standards
Act of 1938, as amended. This section
provides an exemption from the overtime pay provisions of the Act for certain employees employed by certain
small market radio and television stations. This exemption was added to the
Act by the 1961 amendments. It is the
purpose of this bulletin to make available in one place the interpretations of
the provisions in section 13(b) (9) which
will guide the Secretary of Labor and
the Administrator in the performance
of their duties under the Act unless
and until they are otherwise directed
by authoritative decisions of the courts
or conclude, upon re-examination of an
interpretation, that it is incorrect.
§ 793.1 Reliance upon interpretations.
The interpretations of the law contained in this part are official interpretations which may be relied upon as
provided in section 10 of the Portal-toPortal Act of 1947. All prior opinions,
rulings and interpretations which are
inconsistent with the interpretations
in this bulletin are rescinded and withdrawn.
§ 793.2 General explanatory statement.
Some employees of radio and television stations perform work which
may be exempt from the minimum
wage and overtime requirements under
section 13(a)(1) of the Act. This 13(a)(1)
exemption applies to employees employed in a bona fide executive, administrative or professional capacity, or in
the capacity of outside salesman, as
these terms are defined and delimited
by regulations of the Secretary. This
exemption continues to be available for
employees of radio and television stations who meet the requirements for
exemption specified in part 541 of this
chapter. The section 13(b) (9) exemption, which is an exemption from the
overtime provisions of the Act, but not
from the minimum wage requirements,
applies to a limited classification of
employees employed by small market
radio and television stations whose employment meets the requirements for
the exemption. These requirements and
their meaning and application are discussed in this bulletin.
REQUIREMENTS FOR EXEMPTION
§ 793.3
Statutory provision.
Section 13(b) (9) of the Act exempts
from the overtime requirements of section 7, but not from the minimum wage
provisions of section 6, of the Act:
any employee employed as an announcer,
news editor, or chief engineer by a radio or
television station the major studio of which
is located (A) in a city or town of one hundred thousand population or less, according
to the latest available decennial census figures as compiled by the Bureau of the Census
except where such city or town is part of a
standard metropolitan statistical area, as
defined and designated by the Bureau of the
Budget, which has a total population in excess of one hundred thousand, or (B) in a city
or town of twenty-five thousand population
or less, which is part of such an area but is
at least 40 airline miles from the principal
city in such area.
§ 793.4 General requirements for exemption.
All of the following requirements
must be met in order that an employee
may be exempt under section 13(b) (9):
(a) The employee must be ‘‘employed
as’’ an announcer, or a news editor, or
a chief engineer.
(b) The employee must be employed
‘‘by’’ a radio or television station.
(c) The major studio of such radio or
television station must be located in a
city or town which meets the prescribed population and locality tests.
§ 793.5 What determines application of
the exemption.
The exemption applies only to an employee who is ‘‘employed as’’ an announcer, news editor, or chief engineer
under the conditions specified in section 13(b) (9). Although the nature of
the employer’s business is important in
applying the exemption to a particular
employee in one of the named occupations, employment in the named occupation is an essential prerequisite for
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Wage and Hour Division, Labor
§ 793.10
exemption. Whether an employee is exempt therefore depends upon an examination of his duties as well as the nature of the employer’s activities. Some
employees of the employer may be exempt and others may not.
§ 793.6 Exemption limited to employees in named occupations.
The legislative history of section
13(b)(9) makes it clear that the exemption is specifically limited to employees employed in the specified occupations (S. Rept. 145, 87th Cong. 1st sess.,
p. 37). To be exempt, therefore, an employee must be employed in the named
occupations of announcer, a news editor, or a chief engineer. In applying
this test to an employee, his title or
job description is not determinative.
His aggregate duties, as evidenced by
the work which he actually performs in
his everyday activities, determines the
nature of his occupation. The employee’s duties, taken as a whole, must
characterize the occupation of the employee as that of announcer, news editor, or chief engineer, if the statutory
requirement that he be ‘‘employed as’’
such an employee is to be satisfied (see
Walling v. Haden, 153 F. 2d 196, cert. denied 328 U.S. 866). This exemption does
not apply to employees who are employed in occupations other than those
of announcer, news editor, or chief engineer.
§ 793.7
‘‘Announcer.’’
An announcer is an employee who appears before the microphone or camera
to introduce programs, read news announcements, present commercial messages, give station identification and
time signals, and present other similar
routine on-the-air material. In small
stations, an announcer may, in addition to these duties, operate the studio
control board, give cues to the control
room for switching programs, make recordings, make the necessary preparations for the day’s programs, play
records, or write advertising, promotional or similar type copy. An employee who is primarily engaged in the
above described activities and in activities which are an integral part
thereof will be considered to be employed as an announcer within the
meaning of the exemption in section
13(b)(9).
§ 793.8 ‘‘News editor.’’
A news editor is an employee who
gathers, edits and rewrites the news.
He may also select and prepare news
items for broadcast and present the
news on the air. An employee who is
primarily engaged in the above duties
and in activities which are an integral
part thereof will be considered to be
employed as a news editor within the
meaning of the exemption in section
13(b)(9).
§ 793.9 ‘‘Chief engineer.’’
A chief engineer is an employee who
primarily supervises the operation
maintenance and repair of all electronic equipment in the studio and at
the transmitter and is licensed by the
Federal Communications Commission
as a Radio Telephone Operator First
Class. In small stations, only one such
engineer may be employed, and in some
cases he may be assisted by part-time
workers from other departments. The
engineer in such cases will be regarded
as employed as the ‘‘chief engineer’’ for
purposes of the section 13(b) (9) exemption provided that he performs the duties described above and is properly licensed by the Federal Communications
Commission. Where two or more engineers are employed by a station, only
one may qualify as ‘‘chief engineer’’—
that one who, on the basis of the factual situation, is in charge of the engineering work.
§ 793.10 Primary
employment
in
named occupation.
The legislative history of the exemption is explicit that the exemption applies only to an employee who is employed ‘‘primarily’’ as an announcer,
news editor, or chief engineer. Thus the
Senate Report states: ‘‘The exemption
is specifically limited to those employees who are employed primarily in the
named occupations * * *’’ (S. Rept. 145,
87th Cong., 1st sess., p. 37). No specific
rule can be established for determining
whether in any given case an employee
is employed ‘‘primarily’’ in the named
occupations. Generally, however, where
an employee spends more than half of
the hours he works in a workweek in a
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§ 793.11
29 CFR Ch. V (7–1–19 Edition)
named occupation, he will be considered to be primarily employed in such
occupation during that workweek. The
answer will necessarily depend upon
the facts in each case.
§ 793.11 Combination announcer, news
editor and chief engineer.
The 13(b)(9) exemption, as was made
clear during the debate on the amendment, is intended to apply to employees employed in the named occupations
by small market radio and television
stations. It is known at the time of
such debate that these stations employ
only a small number of employees and
that, at times, an employee of such a
station may perform a variety of duties
in connection with the operation of the
station. For example, an employee may
perform work both as an announcer
and as a news editor. In such cases, the
primary employment test under the
section 13(b)(9) exemption will be considered to be met by an employee who
is employed primarily in any one or
any combination of the named occupations. Thus an employee who works
both as an announcer and news editor
for the greater part of the workweek
will be considered to be primarily employed in the named occupations during that week.
§ 793.12
Related and incidental work.
An employee who is employed primarily in one or more of the named occupations may also be engaged in other
duties pertaining to the operation of
the station by which he is employed.
The Senate Report states that, for purposes of this exemption, employees who
are primarily employed in the named
occupation ‘‘may engage in related activities, including the sale of broadcasting time for the broadcasting company by which they are employed, as
an incident to their principal occupation’’, (S. Rept. 145, 87th Cong., 1st
sess., p. 37). Time spent in such duties
will not be considered to defeat the exemption if the employee is primarily
employed in the named occupations
and if the other requirements of the exemption are met.
§ 793.13 Limitation on related and incidental work.
The related work which an employee
may perform is clearly limited in nature and extent by a number of requirements. One limitation is that the work
must be an incident to the employee’s
primary occupation. The work therefore may not predominate over his primary job. He is not ‘‘employed as’’ an
announcer, news editor, or chief engineer if his dominant employment is in
work outside such occupations (see
Walling v. Haden, 153 F. 2d 196, cert. denied 328 U.S. 866). For instance, an announcer who spends 40 hours of his 48
hour workweek in selling broadcasting
time would not be considered to be
‘‘incidentally’’ engaged in such selling.
Selling would in such circumstances be
his primary occupation. His duties as
an announcer must constitute his primary job. Another requirement is that
the work of the employees must be performed ‘‘for the broadcasting company
by which they are employed * * *’’ (see
S. Rept. cited in § 793.12). Sale of broadcasting time for a company which does
not employ the employee as an announcer, news editor, or chief engineer,
is not exempt work. Work which is not
performed for the station by which the
employee is employed, is not intended
to be exempt. For a discussion of the
effect on the exemption of nonexempt
work see §§ 793.19 to 793.21.
§ 793.14 Employed by.
The application of the exemption is
limited to employees ‘‘employed by’’ a
radio or television station. The question whether a worker is employed
‘‘by’’ a radio or television station depends on the particular facts. (See
Rutherford Food Corporation v. McComb,
331 U.S. 722; U.S. v. Silk, 331 U.S. 704.) In
general, however, an employee is so
employed where he is hired by the
radio or television station, engages in
its work, is paid by the radio or television station and is under its supervision and control. Employees of independent contractors and of others who
work for a radio or television station
but who are not ‘‘employed by’’ such
station are not exempt under this exemption even if they engage in the
named occupation. (Mitchell v. Kroger,
248, F. 2d 935.)
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Wage and Hour Division, Labor
§ 793.15
§ 793.18
Duties away from the station.
An employee who is ‘‘employed by’’ a
radio or television station in one or
more of the named occupations may
perform his work at the station or
away from the station so long as his
activities meet the requirements for
exemption.
§ 793.16
‘‘Radio or television station.’’
The employee must be employed by a
‘‘radio or television station.’’ A radio
or television station is one which is
designated and licensed as such by the
Federal Communications Commission.
§ 793.17
‘‘Major studio.’’
The exemption further depends on
whether ‘‘the major studio’’ of the
radio or television station which employes the employee is in a city or
town as defined in section 13(b)(9). The
location of secondary studios of the
radio or television station is immaterial. It is the location of the ‘‘major’’
studio that determines the qualification of the employer for the exemption.
A major studio for purposes of the exemption is the main studio of the radio
or television station as designated on
the station’s license by the Federal
Communications Commission. It is this
major studio which must be located in
the city or town as defined in section
13(b)(9) of the Act.
§ 793.18
Location of ‘‘major studio.’’
Section (b)(9) specifies that the
‘‘major studio’’ must be located ‘‘(A) in
a city or town of one hundred thousand
population or less according to the latest available decennial census figures
as compiled by the Bureau of the Census, except where such city or town is
part of a standard metropolitan statistical area, as defined and designated by
the Bureau of the Budget, which has a
total population in excess of one hundred thousand or (B) in a city or town
of twenty-five thousand population or
less, which is part of such an area but
is at least 40 airline miles from the
principal city in such area.’’ These
tests may be summarized as follows:
(a) A city or town with more than
100,000 population. The exemption does
not apply to any employee of a radio or
television station the major studio of
which is located in any city or town
with a population in excess of 100,000.
(b) A city or town with 100,000 population or less. The exemption may apply
if the major studio is located in a city
or town of not more than 100,000 population: Provided, That the city or town
is not within a standard metropolitan
statistical area which has more than
100,000 population.
(c) A city or town with 25,000 population or less. The exemption may apply
even if the major studio is located in a
city or town that is within a standard
metropolitan statistical area which has
more than 100,000 population: Provided,
That such city or town has a population or not more than 25,000 and the
city or town is at least 40 airline miles
from the principal city in such area.
(d) Sources of information. The Bureau
of the Budget issues periodically a
booklet entitled ‘‘Standard Metropolitan Statistical Areas’’, which lists and
describes these areas in the United
States and Puerto Rico. The booklet
lists the standard metropolitan statistical areas by name and shows their
population according to the latest
available decennial census figures as
compiled by the Bureau of the Census.
The booklet also lists the major cities
within each standard metropolitan statistical area and the population of
these cities. From time to time, new
areas are designated as ‘‘standard metropolitan statistical areas’’ and areas
once designated as such are deleted
from the area definitions. This booklet
may be purchased, for 25 cents, from
the Superintendent of Documents, U.S.
Government Printing Office, Washington, DC 20402.
(e) Principal city. The term ‘‘principal
city’’, as used in section 13(b)(9), means
the ‘‘central city’’, or cities, of the
standard metropolitan statistical area,
which are defined and designated as
such by the Bureau of the Census. The
name of the ‘‘central city’’ is incorporated in the name of the standard
metropolitan statistical area. Where
two or more cities are designated by
the Bureau of the Census as the ‘‘central cities’’, the names of such cities
appear in the title of the standard metropolitan statistical area. For example,
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§ 793.19
29 CFR Ch. V (7–1–19 Edition)
the ‘‘Duluth-Superior’’ standard metropolitan statistical area, has two ‘‘central’’ cities, namely Duluth and Superior; both appear in the title of the
standard metropolitan statistical area,
and both are regarded as ‘‘principal’’
cities for purposes of the section
13(b)(9) exemption. Where, as in the example, more than one city is designated as the ‘‘central’’ city airline
mileage will be measured from that
‘‘central’’ city which is nearest to the
city or town in which the major studio
of the radio or television station is located.
(f) Determining the population. The
population of a city or town, or of a
standard metropolitan statistical area,
will be determined by the latest available decennial census figures as compiled by the U.S. Bureau of the Census.
(g) Measuring airline miles. Airline
miles for purposes of the section
13(b)(9) exemption are measured, with a
straight edge on a map, from the zero
milestone, or the city hall, of the
‘‘central’’ city, to the zero milestone,
or city or town hall, of the city or town
in which the major studio of the radio
or television station is located.
WORKWEEK APPLICATION OF EXEMPTION
§ 793.19 Workweek is used in applying
the exemption.
The unit of time to be used in determining the application of the exemption under section 13(b)(9) to an employee is the workweek. (See Overnight
Motor Transportation Co. v. Missel, 316
U.S. 572; McComb v. Puerto Rico Tobacco
Marketing Co-op Ass’n., 80 F. Supp. 953,
affirmed, 181 F. 2d 697.) A workweek is
a fixed and regularly recurring period
of 7 consecutive 24-hour periods. It may
begin at any hour of any day set by the
employer and need not coincide with
the calendar week. Once the workweek
has been set it commences each succeeding week on the same day and at
the same hour. The workweek may not
be changed for the purpose of evading
the requirements of the Act.
§ 793.20 Exclusive engagement in exempt work.
An employee who engages exclusively in a workweek in work which is
exempt under section 13(b)(9) is exempt
from the Act’s overtime requirements
for the entire week.
§ 793.21
Exempt and nonexempt work.
Where an employee in the same
workweek performs work which is exempt from the overtime requirements
of the Act under section 13(b)(9), and
also engages in work to which the overtime requirements apply, he is not exempt from overtime provisions of the
Act in that week. (See McComb v. Puerto Rico Tobacco Marketing Co-op Ass’n.,
80 F. Supp. 953, affirmed, 181 F. 2d 697;
Mitchell v. Hunt, 263 F. 2d 913; Abram v.
San Joaquin Cotton Oil Co., 46 F. Supp.
969; McComb v. del Valle, 80 F. Supp. 945;
Walling v. Peacock Corp., 58 F. Supp.
880.) As explained in § 793.13, work
which does not come within the occupational duties of an announcer, news
editor, or chief engineer, or which is
not related and incidental thereto, is
not exempt work under section 13(b)(9).
The mere isolated or occasional performance of insubstantial amounts of
such nonexempt work will not defeat
the exemption for the employee.
Where, however, an employee, in a particular workweek, performs a substantial amount of nonexempt work to
which the overtime provisions of the
Act are applicable, the employee is not
exempt under section 13(b)(9) in that
workweek. For administrative purposes an employee who spends 20 percent or more of the hours he works in
a workweek in such nonexempt work,
will not be considered exempt under
section 13(b)(9) in that workweek.
PART 794—PARTIAL OVERTIME EXEMPTION FOR EMPLOYEES OF
WHOLESALE OR BULK PETROLEUM
DISTRIBUTORS UNDER SECTION
7(b)(3) OF THE FAIR LABOR
STANDARDS ACT
Subpart A—General
Sec.
794.1 General scope of the Act.
794.2 Purpose of this part.
794.3 Matters discussed in this part.
794.4 Significance of official interpretations.
794.5 Basic support for interpretations.
794.6 Reliance on interpretations.
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Wage and Hour Division, Labor
§ 794.1
794.7 Interpretations made, continued, and
superseded by this part.
Subpart B—Exemption From Overtime Pay
Requirements Under Section 7(b)(3) of
the Act
SCOPE AND APPLICATION IN GENERAL
794.100 The statutory provision.
794.101 Intended scope of exemption.
794.102 Guides for construing exemptions.
794.103 Dependence of exemption on engagement in described distribution.
794.104 Enterprises engaged in described distribution and in other activities.
794.105 Other requirements for exemption.
THE ‘‘ENTERPRISE’’
794.106 Statutory definition of ‘‘enterprise.’’
794.107 ‘‘Establishment’’ distinguished.
794.108 Scope of enterprise must be known
before exemption tests can be applied.
794.109 Statutory basis for inclusion of activities in enterprise.
794.110 Activities excluded from the enterprise by the statute.
794.111 General characteristics of the statutory enterprise.
‘‘INDEPENDENTLY OWNED AND CONTROLLED
LOCAL ENTERPRISE’’
794.112 Only independent and local enterprises qualify for exemption.
794.113 The enterprise must be ‘‘local.’’
794.114 The enterprise must be ‘‘independently owned and controlled.’’
794.115 ‘‘Independently owned.’’
794.116 ‘‘Independently * * * controlled.’’
794.117 Effect of franchises and other arrangements.
794.118 Effect of unrelated activities.
ANNUAL GROSS VOLUME OF SALES
794.119 Dependence of exemption on sales
volume of the enterprise.
794.120 Meaning of ‘‘annual gross volume of
sales.’’
794.121 Exclusion of excise taxes.
794.122 Ascertainment of ‘‘annual’’ gross
sales volume.
794.123 Method of computing annual volume
of sales.
794.124 Computations on a fiscal year basis.
794.125 Grace period of 1 month for compliance.
794.126 Computations for a new business.
SALES MADE WITHIN THE STATE
794.127 Exemption conditioned on making 75
percent of sales within the State.
794.128 Sales made to out-of-State customers.
794.129 Sales ‘‘made within the State’’ not
limited to noncovered activity.
SALES MADE TO OTHER BULK DISTRIBUTORS
794.130 Not more than 25 percent of sales
may be to customers engaged in bulk distribution of petroleum products for resale.
794.131 ‘‘Customer * * * engaged in bulk distribution.’’
794.132 ‘‘Petroleum products.’’
794.133 ‘‘Bulk’’ distribution.
794.134 Distribution ‘‘for resale.’’
APPLICATION OF EXEMPTION TO EMPLOYEES
794.135 Employees who are exempt.
794.136 Employees whose activities may
qualify them for exemption.
794.137 Effect of activities other than
‘‘wholesale or bulk distribution of petroleum products.’’
794.138 Workweek unit in applying the exemption.
794.139 Exempt and nonexempt activities in
the workweek.
794.140 Compensation requirements for a
workweek under section 7(b)(3).
794.141 Workweeks when hours worked do
not exceed 12 in any day or 56 in the
week; compensation requirements.
794.142 Special compensation when overtime in excess of 12 daily or 56 weekly
hours is worked in the workweek.
794.143 Work exempt under another section
of the Act.
RECORDS TO BE KEPT BY EMPLOYERS
794.144
Records to be maintained.
AUTHORITY: Secs. 1–19, 52 Stat. 1060, as
amended; 29 U.S.C. 201–219.
SOURCE: 35 FR 16510, Oct. 22, 1970, unless
otherwise noted.
Subpart A—General
§ 794.1 General scope of the Act.
The Fair Labor Standards Act, as
amended, hereinafter referred to as the
Act, is a Federal statute of general application which establishes minimum
wage, overtime pay, equal pay and
child labor requirements that apply as
provided in the Act. All employees
whose employment has the relationship to interstate or foreign commerce
which the Act specifies are subject to
the prescribed labor standards unless
specifically exempted from them. Employers having such employees are required to comply with the Act’s provisions in this regard unless relieved
therefrom by some exemption in the
Act. Such employers are also required
to comply with specified recordkeeping
requirements contained in part 516 of
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§ 794.2
29 CFR Ch. V (7–1–19 Edition)
this chapter. The law authorizes the
Department of Labor to investigate for
compliance and, in the event of violations, to supervise the payment of unpaid wages or unpaid overtime compensation owing to any employee. The
law also provides for enforcement in
the courts.
§ 794.2 Purpose of this part.
This part 794 constitutes the official
interpretation of the Department of
Labor with respect to the meaning and
application of section 7(b)(3) of the Act.
This section provides a limited partial
exemption from the overtime provisions of section 7 of the Act (but not
from the minimum wage, child labor,
equal pay, or recordkeeping provisions)
with respect to employees of an independently owned and controlled local
enterprise engaged in the wholesale or
bulk distribution of petroleum products, if the enterprise meets certain
specified conditions. This exemption
was added to the Act by the 1966
Amendments, which repealed a complete overtime exemption previously
available for employees of such enterprises (section 13(b)(10) of the Act as
amended in 1961). It is the purpose of
this part to make available in one
place the interpretations of the law
governing this exemption which will
guide the Secretary of Labor and the
Administrator in the performance of
their duties under the Act.
§ 794.3 Matters discussed in this part.
This part primarily discusses the
meaning and application of the section
7(b)(3) exemption. The meaning and application of other provisions of the
Fair Labor Standards Act are discussed
only to make clear their relevance to
the 7(b)(3) exemption and are not considered in detail in this part. Interpretations published elsewhere in this
title deal with such subjects as the
general coverage of the Act (part 776 of
this chapter), methods of payment of
wages (part 531, subpart C, of this chapter), computation and payment of overtime compensation (part 778 of this
chapter), computation and payment of
overtime compensation (part 778 of this
chapter), retailing of goods or services
(part 779 of this chapter), hours worked
(part 785 of this chapter), and child
labor provisions (part 570 of this chapter). Regulations on recordkeeping are
contained in part 516 of this chapter,
and regulations defining exempt bona
fide executive, administrative, and professional employees are contained in
part 541 of this chapter. The equal pay
provisions are discussed in part 800 of
this chapter. Regulations and interpretations on other subjects concerned
with the application of the Act are listed in the table of contents to this chapter. Copies of any of these documents
may be obtained from any office of the
Wage and Hour Division.
§ 794.4 Significance of official interpretations.
The interpretations of the law contained in this part are official interpretations of the Department of Labor
with respect to the application under
described circumstances of the provisions of law which they discuss. These
interpretations indicate the construction of the law which the Secretary of
Labor and the Administrator believe to
be correct and which will guide them in
the performance of their duties under
the Act unless and until they are otherwise directed by authoritative decisions of the courts or conclude, upon
re-examination of an interpretation,
that it is incorrect. The interpretations in this part provide statements of
general principles applicable to the
subjects discussed and illustrations of
the application of these principles to
situations that frequently arise. They
do not and cannot refer specifically to
every problem which may be met in the
consideration of the exemption discussed. The omission to discuss a particular problem in this part or in interpretations supplementing it should not
be taken to indicate the adoption of
any position by the Secretary of Labor
or the Administrator with respect to
such problem or to constitute an administrative interpretation or practice
or enforcement policy. Questions on
matters not fully covered by this part
may be addressed to the Administrator
of the Wage and Hour Division, U.S.
Department of Labor, Washington, DC
20210 or to any Regional or Area Office
of the Division.
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Wage and Hour Division, Labor
§ 794.100
§ 794.5 Basic support for interpretations.
The ultimate decisions on interpretations of the Act are made by the courts
(Mitchell v. Zachry, 362 U.S. 310;
Kirschbaum v. Walling, 316 U.S. 517).
Court decisions supporting interpretations contained in this part are cited
where it is believed they may be helpful. On matters which have not been
determined by the courts, it is necessary for the Secretary of Labor and
the Administrator to reach conclusions
as to the meaning and the application
of provisions of the law in order to
carry out their responsibilities of administration
and
enforcement
(Skidmore v. Swift, 323 U.S. 134). In order
that these positions may be made
known to persons who may be affected
by them, official interpretations are
issued by the Administrator on the advice of the Solicitor of Labor, as authorized by the Secretary (Reorg. Plan
6 of 1950, 64 Stat. 1263; Gen. Ord. 45A,
May 24, 1950, 15 FR 3290). As included in
the regulations in this part, these interpretations are believed to express
the intent of the law as reflected in its
provisions and as construed by the
courts and evidenced by its legislative
history. References to pertinent legislative history are made in this part
where it appears that they will contribute to a better understanding of
the interpretations.
‘‘Good administration of the Act and
good judicial administration alike require that the standards of public enforcement and those for determining
private rights shall be at variance only
where justified by very good reasons.’’
(Skidmore v. Swift, 323 U.S. 134).
§ 794.6 Reliance on interpretations.
As previously stated, the interpretations of the law contained in this part
are official interpretations. So long as
they remain effective and are not
modified, amended, rescinded or determined by judicial authority to be incorrect, they may be relied upon as
provided in section 10 of the Portal-toPortal Act of 1947 (63 Stat. 910, 29
U.S.C. 251 et seq., discussed in part 790
of this chapter). In addition, the Supreme Court has recognized that such
interpretations of this Act ‘‘provide a
practical guide to employers and employees as to how the office representing the public interest in its enforcement will seek to apply it’’ and
‘‘constitute a body of experience and
informed judgment to which courts and
litigants may properly resort for guidance.’’ Further, as stated by the Court:
Section 7(b)(3) of the Act provides a
partial exemption from the overtime
pay requirements of section 7 (but not
from the minimum wage, equal pay or
child labor requirements) for any employee employed
§ 794.7 Interpretations made, continued, and superseded by this part.
On and after publication of this part
in the FEDERAL REGISTER, the interpretations contained therein shall be in effect and shall remain in effect until
they are modified, rescinded, or withdrawn. Prior opinions, rulings, and interpretations and prior enforcement
policies which are not inconsistent
with the interpretations in this part or
with the Fair Labor Standards Act as
amended by the Fair Labor Standards
Amendment of 1966 and which were in
effect at the time of such publication
are continued in effect; all other opinions, rulings, interpretations, and enforcement policies on the subjects discussed in the interpretations in this
part are rescinded and withdrawn.
Subpart B—Exemption From Overtime Pay Requirements Under
Section 7(b)(3) of the Act
SCOPE AND APPLICATION IN GENERAL
§ 794.100
The statutory provision.
by an independently owned and controlled
local enterprise (including an enterprise
with more than one bulk storage establishment) engaged in the wholesale or bulk distribution of petroleum products if:
(A) The annual gross volume of sales of
such enterprise is less than $1 million exclusive of excise taxes;
(B) More than 75 per centum of such enterprise’s annual dollar volume of sales is made
within the State in which such enterprise is
located, and
(C) Not more than 25 per centum of the annual dollar volume of sales of such enterprise
is to customers who are engaged in the bulk
distribution of such products for resale, and
such employee receives compensation for
employment in excess of 40 hours in any
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§ 794.101
29 CFR Ch. V (7–1–19 Edition)
workweek at a rate not less than one and
one-half times the minimum wage applicable
to him under section 6, and if such employee
receives compensation for employment in excess of 12 hours in any workday, or for employment in excess of 56 hours in any workweek, as the case may be, at a rate not less
than one and one-half times the regular rate
at which he is employed.
§ 794.101 Intended scope of exemption.
Under section 7(b)(3) of the Act, the
intent of the exemption must be given
effect in determining the scope of its
application to an enterprise and to the
employees of an enterprise. The statutory language must be applied to the
facts in a manner consistent with the
purpose of the exemption as evidenced
by its legislative history. This purpose
is to relieve the described enterprises
from the application of the Act’s general overtime pay requirements (in the
limited manner specified in the exemption) to employment in their activities
of distributing petroleum products.
Such employment was stated to be affected by climatic, seasonal, and other
pertinent factors characteristic of business operations in the distribution of
such products. (See, in this connection,
the following documents of 87th Cong.,
first sess.; H. Rept. No. 75, pp. 26, 27, 36;
105 Congressional Record (daily edition) p. 4519; S. Rept. No. 145, pp. 37, 50;
H. Rept. No. 327, p. 18; Hearings before
Senate Subcommittee on Labor on S.
256, S. 879, and S. 895, at pp. 411–424;
Hearings before House Special Subcommittee on Labor on H.R. 2935, at
pp. 422–425 and 627–629; and these documents of the 89th Cong., second sess.;
H. Rept. No. 1366, pp. 12, 13, and 43;
Cong. Record (daily edition) p. 10745; S.
Rept. No. 1487, pp. 32 and 51.)
§ 794.102 Guides for construing exemptions.
It is judicially settled that ‘‘The details with which the exemptions in this
Act have been made preclude their enlargement by implication’’ and ‘‘no
matter how broad the exemption, it is
meant to apply only to’’ the employment specified in the statute. Conditions specified in the language of the
Act are ‘‘explicit prerequisities to exemption.’’ Accordingly, it is the wellestablished rule that exemptions from
the Act ‘‘are to be narrowly construed
against the employer seeking to assert
them’’ and their applications is limited
to those who come ‘‘plainly and unmistakably within their terms and spirit.’’
An employer who claims such an exemption has the burden of showing
that it applies. See Wirtz v. Lunsford,
404 F. 2d 693 (C.A. 6); Addison v. Holly
Hill, 322 U.S. 607; Maneja v. Waialua, 349
U.S. 254; Phillips v. Walling, 334 U.S. 490;
Arnold v. Kanowsky, 361 U.S. 388; Mitchell v. Kentucky Finance Co., 359 U.S. 290;
Walling v. General Industries Co., 330
U.S. 545.
§ 794.103 Dependence of exemption on
engagement in described distribution.
By its terms, section 7(b)(3) provides
a partial and contingent exemption
from the general overtime pay requirements of the Act applicable to ‘‘any
employee * * * employed * * * by an
* * * enterprise * * * engaged in the
wholesale or bulk distribution of petroleum product * * *.’’ Thus, engagement
in the described distribution is an ‘‘explicit prerequisite to exemption’’
(Arnold v. Kanowsky, 361 U.S. 388), as
are the other express conditions set
forth in the section. A natural reading
of the statutory language suggests that
the employee as well as the enterprise
must be so engaged in order for the exemption to apply (see Porto Rico Light
Co. v. Mor, 253 U.S. 345). To the extent
that its employees are engaged in the
described distribution, the enterprise is
itself so engaged (see Kirshbaum v.
Walling, 316 U.S. 517; and see § 794.104).
Also, whenever an enterprise is so engaged, any of its employees will be considered to be ‘‘employed by an * * * enterprise * * * engaged in the wholesale
or bulk distribution of petroleum products’’ if the duties of his employment
require him to perform any operations
or provide any services in carrying on
such activities of his employer, and if
the employee is not engaged in a substantial portion of his workweek in
other activities which do not provide a
basis for exemption under section
7(b)(3). Such an interpretation of the
quoted language is believed necessary
to give effect to the intended scope of
the exemption as explained in § 794.101.
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Wage and Hour Division, Labor
§ 794.105
Where an enterprise is exclusively engaged in the wholesale or bulk distribution of petroleum products and
meets all the other requirements of
section 7(b)(3), all of its employees who
are paid for their hours of work in accordance with section 6 of the Act and
the special pay provisions of section
7(b)(3) (see § 778.602 of this chapter and
§§ 794.135 through 794.136) will be exempt from the overtime pay requirements of the Act under the principles
stated above. What products are included in the term ‘‘petroleum products’’ and what constitutes the ‘‘bulk
distribution’’ of such products within
the meaning of section 7(b)(3) are discussed in §§ 794.132 through 794.133.
§ 794.104 Enterprises engaged in described distribution and in other
activities.
An enterprise may be engaged in the
wholesale or bulk distribution of petroleum products, within the meaning of
section 7(b)(3), without being exclusively so engaged. Such engagement
may be only one of the several related
activities, performed through unified
operation or common control for a
common business purpose, which constitute the enterprise (see § 794.106)
under section 3(r) of the Act. If engaging in such distribution is a regular
and significant part of its business, an
enterprise which meets the other tests
for exception under section 7(b)(3) will
be relieved of overtime pay obligations
with respect to employment of its employees in such distribution activities,
in accordance with the intended scope
(see § 794.101) of the exemption. The
same will be true with respect to employment of its employees in those related activities which are customarily
performed as an incident to or in conjunction with the wholesale or bulk
distribution of petroleum products in
the enterprises of the industry engaged
in such distribution. There is no requirement that engaging in such activities constitute any particular percentage of the enterprises’s business.
However, in the case of an enterprise
engaged in other activities as well as in
the wholesale or bulk distribution of
petroleum products (including related
activities customarily performed in the
enterprises of the industry as an inci-
dent thereto or in conjunction therewith), an employee employed in such
other activities of the enterprise is not
engaged in employment which the exemption was intended to reach (see
§ 794.101). Such an employee is not
brought within the exemption by virtue of the fact that the enterprise by
which he is employed is engaged with
other employees in the distribution activities described in section 7(b)(3).
This accords with the judicial construction of other exemptions in the
Act which are similarly worded. See
Connecticut Co. v. Walling, 154 F. 2d 522,
Certiorari denied, 329 U.S. 667; Northwest Airlines v. Jackson, 185 F. 2d 74;
Davis v. Goodman Lumber Co., 133 F. 2d
52; Fleming v. Swift & Co., 41 F. Supp.
825, aff’d 131 F. 2d 249.
§ 794.105 Other requirements for exemption.
The limited overtime pay exemption
provided by section 7(b)(3) applies to
any employee compensated in accordance with its terms who is ‘‘employed
* * * by an * * * enterprise * * * engaged in the wholesale or bulk distribution of petroleum products’’ as explained in §§ 794.103 through 794.104 if
the enterprise which employs him
meets all of the following requirements: (a) It is a ‘‘local’’ enterprise; (b)
it is ‘‘independently owned and controlled’’; (c) it has an annual gross volume of sales of less than $1 million exclusive of excise taxes; (d) it makes
more than 75 percent of its annual dollar volume of sales within the State in
which it is located; and (e) not more
than 25 percent of such annual dollar
volume of sales is to customers who are
engaged in the bulk distribution of petroleum products for resale. In order to
determine whether all these requirements are met, it is necessary to know
what constitutes the ‘‘enterprise’’ to
which reference is made, the meaning
of ‘‘the wholesale or bulk distribution
of petroleum products’’ in which engagement is required as a prerequisite
to exemption, what is meant by a
‘‘local’’ enterprise and what characterizes it as ‘‘independently owned and
controlled’’, and the criteria for application of the dollar volume tests.
These matters will be discussed in
some detail in the sections following.
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§ 794.106
29 CFR Ch. V (7–1–19 Edition)
THE ‘‘ENTERPRISE’’
§ 794.106 Statutory definition of ‘‘enterprise.’’
The term ‘‘enterprise’’ is defined in
section 3(r) of the Act. That definition
(insofar as it affects a wholesale or
bulk petroleum distributor) is as follows:
‘‘Enterprise’’ means the related activities
performed (either through unified operation
or common control) by any person or persons
for a common business purpose, and includes
all such activities whether performed in one
or more establishments or by one or more
corporate or other organizational units including departments of an establishment operated through leasing arrangements, but
shall not include the related activities performed for such enterprise by an independent
contractor: Provided, That within the meaning of this subsection, a retail or service establishment which is under independent
ownership shall not be deemed to be so operated or controlled as to be other than a separate and distinct enterprise by reason of any
arrangement, which includes, but is not necessarily limited to, an agreement (1) that it
will sell, or sell only, certain goods specified
by a particular manufacturer, distributor, or
advertiser, or (2) that it will join with other
such establishments in the same industry for
the purpose of collective purchasing, or (3)
that it will have the exclusive right to sell
the goods or use the brand name of a manufacturer, distributor, or advertiser within a
specified area, or by reason of the fact that
it occupies premises leased to it by a person
who also leases premises to other retail or
service establishments.
§ 794.107 ‘‘Establishment’’
distinguished.
The ‘‘enterprise’’ referred to in the
section 7(b)(3) exemption is to be distinguished from an ‘‘establishment’’.
As used in the Act, the term ‘‘establishment’’, which is not specially defined therein, refers to a ‘‘distinct
physical place of business’’ rather than
to ‘‘an entire business or enterprise’’
which may include several separate
places of business. (See Phillips v.
Walling, 324 U.S. 490; Mitchell v. Bekins
Van & Storage Co., 352 U.S. 1027; 95 Congressional Record 12505, 12579, 14877; H.
Rept. No. 1453, 81st Cong., first session,
p. 25.) It will be noted from the definition of ‘‘enterprise’’ in section 3(r), as
set forth in § 794.106, that the activities
of the enterprise may be ‘‘performed in
one or more establishments,’’ and sec-
tion 7(b)(3) specifies that the enterprises to which its exemption requirements are applicable will include ‘‘an
enterprise with more than one bulk
storage establishment.’’
§ 794.108 Scope of enterprise must be
known before exemption tests can
be applied.
The scope of the ‘‘enterprise’’ as defined by section 3(r) of the Act must be
ascertained before it is possible to
apply the tests for exemption contained in section 7(b)(3) which are
based on the dollar volume of sales of
the ‘‘enterprise’’. The activities included in the enterprise must be
known, and any activities not a part of
the enterprise must be excluded before
the dollar volume of sales derived from
the activities of the enterprise can be
computed.
§ 794.109 Statutory basis for inclusion
of activities in enterprise.
The ‘‘enterprise’’ for purposes of enterprise coverage under section 3(s) and
the exemption provision in section
7(b)(3), is defined in section 3(r)
(§ 794.106) in terms of the activities in
which it is engaged. All the ‘‘related
activities’’ which are ‘‘performed * * *
by any person or persons for a common
business purpose’’ are included if they
are performed ‘‘either through unified
operation or common control.’’ This is
true even if they are performed by
more than one person, or in more than
one establishment or by more than one
corporate or other organizational unit.
The definition specifically includes as
a part of the enterprise, departments of
an establishment operated through
leasing arrangements. These statutory
criteria are discussed in more detail in
subsequent sections.
§ 794.110 Activities excluded from the
enterprise by the statute.
The circumstances under which certain activities will be excluded from
the ‘‘enterprise’’ referred to in the Act
are made clear by the definition quoted
in § 794.106. The definition distinguishes
between the related activities performed through unified operation and
common control for a common business
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Wage and Hour Division, Labor
§ 794.113
purpose by the participants in the enterprise, and activities which are related to these activities but are performed for the enterprise by a bona fide
independent contractor (for example,
an independent accounting or auditing
firm). The latter activities are expressly excluded from the ‘‘enterprise’’
as defined. In addition, the definition
contains a proviso detailing certain
circumstances under which a retail or
service establishment under independent ownership will not lose its status as a separate and distinct enterprise by reason of certain franchise and
other arrangements which it may enter
into with others. This proviso, the effect of which is more fully explained in
parts 776 and 779 of this chapter, may
be important to wholesale or bulk distributors of petroleum products in determining whether the effect of particular arrangements which they may
make with retailers of their products
will be to include activities of the latter with their own activities in the
same enterprise for purposes of the
Act.
§ 794.111 General characteristics of the
statutory enterprise.
As defined in the Act, the term ‘‘enterprise’’ is roughly descriptive of a
business rather than of an establishment or of an employer although on occasion the three may coincide. The enterprise, however, is not necessarily coextensive with the entire business activities of an employer. The enterprise
may consist of a single establishment
which may be operated by one or more
employers; or it may be composed of a
number of establishments which may
be operated by one or more employers.
On the other hand, a single employer
may operate more than one enterprise.
The Act treats as separate enterprises
different businesses which are unrelated to each other and lack any common business purpose, even if they are
operated by the same employer.
‘‘INDEPENDENTLY OWNED AND
CONTROLLED LOCAL ENTERPRISE’’
§ 794.112 Only independent and local
enterprises qualify for exemption.
The legislative history of the exemption (§ 794.101) shows that the pro-
ponents of an amendment to provide
the relief which it grants from the
overtime pay provisions of the Act
were organizations of independent
local merchants who did not as a rule
engage extensively in interstate operations such as those typical of major
oil companies, and who functioned primarily at the local level in distributing
petroleum products at wholesale or in
bulk. As a result the exemption provided by the Act, like that requested,
was limited to enterprises which are
‘‘local’’ (§ 794.113) and are ‘‘independently owned and controlled’’ (§§ 794.114–
794.118).
§ 794.113 The enterprise must be
‘‘local.’’
It is clear from the language of section 7(b)(3) that the exemption which it
provides is available to an enterprise
only if it is a ‘‘local enterprise’’. The
other tests of exemption must also, of
course be met. A ‘‘local’’ enterprise is
not defined in the Act, and the word
‘‘local’’, which appears in a different
context elsewhere in the Act (see
clause (2) of the last sentence of section 3(r) and sections 13(b)(7), 13(b)(11)),
is likewise given no express definition.
There is no fixed legal meaning of the
term ‘‘local’’; it is usually a flexible
and comparative term whose meaning
may vary in different contexts. As used
here, certain guides are available from
the context in which it is used, the legislative history surrounding adoption
of section 7(b)(3), and the law of which
it forms a part. A ‘‘local’’ enterprise
engaged in the wholesale or bulk distribution of petroleum products is
clearly intended to embrace the kind of
enterprise operated by the merchants
who requested the amendment; that is,
one which provides farmers, homeowners, country merchants, and others
in its locality with petroleum products
in bulk quantities or at wholesale. The
language of section 7(b)(3) makes it
clear also that the enterprise will not
be regarded as other than ‘‘local’’
merely because it has more than one
bulk storage establishment. On the
other hand, the section makes it equally clear that ordinarily an enterprise
which is not located within a single
State is not a local enterprise of the
kind to which the exemption will
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§ 794.114
29 CFR Ch. V (7–1–19 Edition)
apply. This follows from the express requirement that more than 75 percent of
the enterprise’s annual dollar volume
of sales must be made ‘‘within the
State in which such enterprise is located.’’ The legislative history provides further evidence of this intent.
At the hearings before the Senate
Labor Subcommittee a proponent of
the amendment which eventually was
enacted in somewhat different language (sec. 13(b)(10) of the Act which
was repealed by the 1966 Amendments
to the Act and replaced by section
7(b)(3)), stated with respect to the significance of the word ‘‘local’’:
* * * the language which we have suggested in the proposed amendment ‘‘locally
owned and controlled establishments’’, I
admit that can point up some trouble and
make some work for lawyers.
We, however, in our endeavor to show our
sincerity of only trying to cover local intrastate establishments, went overboard on this
language.
You will note that 75 percent of our business has to be performed in one State. I
think that ‘‘locally owned and controlled establishments’’ language should better read
‘‘independently owned and controlled local
enterprises or establishment.’’ (Sen. Hearings on amendments to the Fair Labor
Standards Act, 87th Cong., first session, p.
416.)
The same witness also quoted from the
Congressional Record of August 18,
1960, the discussion in the course of the
consideration of the amendments to
the Act by the Senate during the 86th
Congress, second session, as follows:
These wholesale and bulk distributors of
petroleum products, commonly referred to as
oil jobbers, are primarily local businessmen
who acquire these products from their suppliers’ bulk terminal in the State in which
the jobber does business and sell these products to service stations, farmers, and homeowners in the State in which they maintain
their place of business * * * I am advised
that 98.3 percent of all the oil jobbers in the
United States sell their products only in the
State in which their place of business is located thus qualifying by any definition as
local merchants. (Sen. Hearings on amendments to the Fair Labor Standards Act 87th
Cong., first session, pp. 415–416.)
It thus appears that the word ‘‘local’’
was intended to confine the exemption
to enterprises of such local merchants.
The enterprise need not, of course, conduct all of its business within the State
in which it is physically located, since
the exemption specifically provides
that it may make a portion of its sales
outside the State in which it is located.
§ 794.114 The enterprise must be
‘‘independently owned and controlled.’’
Another requirement for exemption
under section 7(b)(3) is that the enterprise must be ‘‘independently owned
and controlled’’. Since this requirement is in the conjunctive, it must be
established that the enterprise which is
engaged in the wholesale or bulk distribution of petroleum products is both
independently owned and independently controlled. (Wirtz v. Lunsford, 404
F. 2d 693 (C.A. 6).) At the hearing before
the Senate Labor Subcommittee, when
the amendment was proposed which
eventually was incorporated in the Act
as section 13(b)(10) by the 1961 amendments (later repealed by the 1966
amendments to the Act and replaced
by section 7(b)(3)), a spokesman for
proponents of the amendment made the
following statement, which bears on
this requirement for exemption:
The designation ‘‘independent’’ as applied
to an oil jobber means that he owns his own
office, bulk storage, and delivery facilities;
pays his own personnel, and in all respects
conducts his business as any other independent businessman.
It also means that the jobber is not a subsidiary of nor controlled by any so-called
major oil company, although the jobber may
sell the branded products of such a company.
Some jobbers own service stations which
they lease to independent dealers and a
small percentage of jobbers may operate one
or more service stations with their own salaried personnel. (Senate Hearings on the
Amendments to the Fair Labor Standards
Act, 87th Cong., first session, p. 411.)
It appears, therefore, that the purpose
of the requirement limiting the exemption to the enterprises which are
‘‘independently owned and controlled,’’
is to confine the exemption to those petroleum jobbers who own their own facilities and equipment and who are not
subsidiaries nor controlled by any producer, refinery, terminal supplier or socalled major oil company. (See Wirtz v.
Lunsford, cited above.) The fact that
the petroleum jobber sells a branded
product of a major oil company will
not, of itself, affect the status of his
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Wage and Hour Division, Labor
§ 794.117
enterprise as one which is ‘‘independently owned and controlled’’. So also
the fact that the jobber owns gasoline
service stations, which he leases or
which he operates himself, will not affect the status of his enterprise as
being ‘‘independently owned and controlled’’.
§ 794.115 ‘‘Independently owned.’’
Ownership of the enterprise may be
vested in an individual petroleum jobber, or a partnership, or a corporation,
so long as such ownership is not shared
by a major oil company, or other producer, refiner, distributor or supplier of
petroleum products, so as to affect the
independent ownership of the enterprise. As noted in § 794.114, an enterprise will not be considered independently owned where it does not own its
own office, bulk storage, and delivery
facilities. The enterprise may also not
be considered ‘‘independently owned’’
where it does not own its stock-intrade. (See Wirtz v. Lunsford, 404 F.2d
693 (C.A. 6).) It is recognized that, in
the ordinary course of business dealings, an independently owned enterprise may purchase its goods on credit
and this, of course, will not affect its
characterization as being ‘‘independently owned’’ within the meaning of
the exemption. However, there may
well be a question as to whether the
enterprise is ‘‘independently owned’’
where the enterprise receives its petroleum products on consignment and the
supplier lays claim to the ownership of
the account receivable. Of possible relevance also is the intent evident in the
statutory language to provide exemption only for an enterprise which can
meet the specified tests which depend
on ‘‘the sales of such enterprise.’’ The
determination in such cases, as in
other cases involving questions of independent ownership, will necessarily depend on all the facts.
§ 794.116 ‘‘Independently * * * controlled.’’
As explained in § 794.114, the enterprise in addition to being independently owned must also be ‘‘independently controlled.’’ The test here is
whether the individual, partnership, or
corporation which owns the enterprise
also controls the enterprise as an inde-
pendent businessman, free of control
by any so-called major oil company or
other person engaged in the petroleum
business. Control by others may be evidenced by ownership; but control may
exist in the absence of any ownership.
For example where an enterprise engaged in the wholesale or bulk distribution of petroleum products enters
into franchise or other arrangements
which have the effect of restricting the
products it distributes, the prices it
may charge, or otherwise controlling
the activities of the enterprise in those
respects which are the common attributes of an independent businessman, these facts may establish that
the enterprise is not ‘‘independently
controlled’’ as required by the exemption under section 7(b)(3). (Wirtz v.
Lunsford, 404 F. 2d 693 (C.A. 6).)
§ 794.117 Effect of franchises and other
arrangements.
Whether a franchise or other contractual arrangement affects the status of
the enterprise as ‘‘an independently
owned and controlled * * * enterprise,’’
depends upon all the facts including
the terms of the agreements and arrangements between the parties as well
as the other relationships that have
been established. The term ‘‘franchise’’
is not susceptible of precise definition.
While it is clear that in every franchise
a business surrenders some rights, it is
equally clear that every franchise does
not necessarily deprive an enterprise of
its character as an independently
owned and operated business. This
matter was the subject of legislative
consideration in connection with other
provisions of the 1961 amendments to
the Act. The Senate Report on the
amendments, in discussing the effects
of franchises and similar arrangements
on the scope of the ‘‘enterprise’’ under
section 3(r) of the Act, stated as follows:
There may be a number of different types
of arrangements established in such cases.
The key in each case may be found in the answer to the question, ‘‘Who receives the profits, suffers the losses, sets the wages and
working conditions of employees, or otherwise manages the business in those respects
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§ 794.118
29 CFR Ch. V (7–1–19 Edition)
which are the common attributes of an independent businessman operating a business
for profit?’’
ucts as an ‘‘independently controlled’’
enterprise.
ANNUAL GROSS VOLUME OF SALES
*
*
*
*
*
In all of these cases if it is found on the
basis of all the facts and circumstances that
the arrangements are so restrictive as to
products, prices, profits, or management as
to deny the ‘‘franchised’’ establishment the
essential prerogative of the ordinary independent businessman, the establishment, the
dealer, or concessionaire will be considered
an integral part of the related activities of
the enterprise which grants the franchise,
rights or concession. (S. Rep. 145, 87th Cong.,
first session, p. 42.)
Thus there may be a number of different types of arrangements established in such cases and the determination as to whether the arrangements
have the effect of depriving the enterprise of its independent ownership or
control will necessarily depend on all
the facts. The fact that the distributor
hires and controls the employees engaged in distribution of the product
does not establish the requisite independence of the distributor; it is only
one factor to be considered (Wirtz v.
Lunsford, 404 F. 2d 693 (C.A. 6).) Ultimately the determination of the precise scope of such arrangements and
their effect upon the independent ownership and control of the enterprise
under section 7(b)(3), as well as on the
question whether such arrangements
result in creating a larger enterprise,
rests with the courts.
§ 794.118
Effect of unrelated activities.
The term ‘‘independently owned and
controlled’’ has reference to independence of ownership and control by others. Accordingly, the fact that the petroleum jobber may himself engage in
other businesses which are not related
to the enterprise engaged in the wholesale or bulk distribution of petroleum
products, will not affect the question
whether the petroleum enterprise is
independently owned or controlled. For
example, the fact that the wholesale or
bulk petroleum distributor also owns
or controls a wholly sep- arate tourist
lodge enterprise or job printing business will not affect the status of his enterprise engaged in the wholesale or
bulk distribution of petroleum prod-
§ 794.119 Dependence of exemption on
sales volume of the enterprise.
It is a requirement of the section
7(b)(3) exemption that the annual gross
volume of sales of the enterprise must
be less than $1 million exclusive of excise taxes. This dollar volume test is
separate and distinct from the $250,000
annual gross volume (of sales made or
business done) test in section 3(s)(1) of
the Act. This latter test is for the purpose of determining coverage as an enterprise engaged in commerce or in the
production of goods for commerce;
whereas the $1 million test is for limiting the 7(b)(3) exemption to enterprises with annual sales of less than
that amount.
§ 794.120 Meaning of ‘‘annual gross volume of sales.’’
The annual gross volume of sales of
an enterprise consists of its gross receipts from all types of sales during a
12-month period (§ 794.122). The gross
volume derived from all sales transactions is included, and will embrace
among other things receipts from service, credit, or similar charges. However, credits for goods returned or exchanged (as distinguished from ‘‘tradeins’’), rebates, discounts, and the like
are not ordinarily included in the annual gross volume of sales. In determining whether the million dollar
limit on annual gross sales volume is
or is not exceeded, the sales volume
from all the related activities which
constitute the enterprise must be included; the dollar volume of the entire
business in all establishments is added
together. Thus, the gross volume of
sales will include the receipts from
sales made by any gasoline service stations of the enterprise, as well as the
sales made by any other establishments of the enterprise. These principles and their application are considered in more detail in parts 776 and 779
of this chapter, which contain general
discussions of ‘‘annual gross volume’’
as used in other provisions of the Act.
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Wage and Hour Division, Labor
§ 794.126
§ 794.121 Exclusion of excise taxes.
The computation of the annual gross
volume of sales of the enterprise for
purposes of section 7(b)(3) is made ‘‘exclusive of excise taxes.’’ It will be
noted that the excise taxes excludable
under section 7(b)(3) are not, like those
referred to in section 3(s)(1) and section
13(a)(2), limited to those ‘‘at the retail
level which are separately stated.’’
Under section 7(b)(3), therefore, all excise taxes which are included in the
sales price may be excluded in computing the annual gross volume of the
enterprise.
§ 794.122 Ascertainment of ‘‘annual’’
gross sales volume.
The annual gross volume of sales of
an enterprise engaged in the wholesale
or bulk distribution of petroleum products consists of its gross dollar volume
of sales during a 12-month period.
Where a computation of annual gross
volume of sales is necessary to determine the status of the enterprise under
section 7(b)(3) of the Act, it must be
based on the most recent prior experience which it is practicable to use.
§ 794.123 Method of computing annual
volume of sales.
(a) Where the enterprise, during the
portion of its current income tax year
up to the end of the current payroll period, has already had a gross volume of
sales in excess of the amount specified
in the statute, it is plain that its annual gross volume of sales currently is
in excess of the statutory amount.
(b) Where the enterprise has not yet
in such current year exceeded the statutory amount in its gross volume of
sales, but has had, in the most recently
ended year used by it for income tax
purposes, a gross volume of sales in excess of the amount specified in the Act,
the enterprise will be deemed to have
an annual gross volume of sales in excess of such statutory amount, unless
use of the method set forth in paragraph (c) of this section establishes a
gross annual volume less than the statutory amount.
(c) When it is necessary to make a
computation of the annual gross volume of sales of the enterprise the following method shall be used: At the beginning of each calendar quarter (Jan.
1–Mar. 31; Apr. 1–June 30; July 1–Sept.
30; Oct. 1–Dec. 31), the gross receipts
from all of its sales during the annual
period (12 calendar months) which immediately precedes the current calendar quarter, is totaled. In this manner the employer, by calculating the
sales of his enterprise, will know
whether or not the dollar volume tests
have been met for the purpose of complying with the law in the workweeks
ending in the current calendar quarter.
§ 794.124 Computations on a fiscal
year basis.
Some enterprises operate on a fiscal
year, consisting of an annual period
different from the calendar year, for
income tax or sales or other accounting purposes. Such enterprises in applying the method of computation in
§ 794.123(c) may use the four quarters of
the fiscal period instead of the four
quarters of the calendar year. Once
adopted, the same basis must be used
in subsequent calculations.
§ 794.125 Grace period of 1 month for
compliance.
Where it is not practicable to compute the annual gross volume of sales
under § 794.123 or § 794.124 in time to determine obligations under the Act for
the current quarter, an enterprise may
use a 1-month grace period. If this 1month grace period is used, the computations made under those sections
will determine its obligations under
the Act for the 3-month period commencing 1 month after the end of the
preceding calendar or fiscal quarter.
Once adopted the same basis must be
used for each successive 3-month period.
§ 794.126 Computations for a new business.
When a new business is commenced
the employer will necessarily be unable
for a time to determine its annual dollar volume on the basis of a full 12month period as described in §§ 794.123
and 794.124. In many cases, it is readily
apparent that the enterprise will or
will not have the requisite annual dollar volume specified in the Act. For example, the new business may be so
large that it is clear from the outset
that the business will exceed the $1
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§ 794.127
29 CFR Ch. V (7–1–19 Edition)
million test of the exemption. In other
cases, where doubt exists, the gross receipts of the new business during the
first quarter year in which it has been
in operation will be taken as representative of its annual dollar volume tests
for purposes of determining its status
under section 7(b)(3) of the Act in
workweeks falling in the following
quarter-year period. Similarly, for purposes of determining its status under
the Act in workweeks falling within
ensuing quarter-year periods, the gross
receipts of the new business for the
completed quarter-year periods will be
taken as representative of its annual
dollar volume in applying the annual
volume tests of the Act. After the new
business has been in operation for a
full calendar or fiscal year, the analysis can be made by the methods described in §§ 794.123 and 794.124.
SALES MADE WITHIN THE STATE
§ 794.127 Exemption conditioned on
making 75 percent of sales within
the State.
A further requirement of the section
7(b)(3) exemption is that more than 75
percent of the sales of the enterprise
engaged in the wholesale or bulk distribution of petroleum products (measured by annual dollar volume) must be
made ‘‘within the State in which such
enterprise is located.’’ This means that
over 75 percent of the annual dollar
volume of sales must be from sales to
customers within the same State in
which the enterprise is located. If 25
percent or more of its sales volume is
from sales to customers outside the
State of its location, the requirement
is not met and the enterprise cannot
qualify for exemption.
§ 794.128 Sales made to out-of-State
customers.
Whether the sale of goods or services
is made to an out-of-State customer is
a question of fact. In order for a customer to be considered an out-of-State
customer, some specific relationship
between him and the seller has to exist
to indicate his out-of-State character.
On the one hand, sales made to the casual cash-and-carry customer (such as
at a gasoline station owned or operated
by the enterprise), who, for all practical purposes, is indistinguishable
from the mass of customers who visit
the establishment, are sales made
within the State even though the seller
knows or has reason to believe, because
of his proximity to the State line or because he is frequented by tourists, that
some of the customers who visit his establishment reside outside the State. If
the customer is of that type, sales
made to him are sales made within the
State even if the seller knows in the
particular instance that the customer
resides outside the State. On the other
hand, a sale is made to an out-of-State
customer and therefore, is not a sale
made ‘‘within the State’’ in which the
enterprise is located, if delivery of the
goods is made outside that State, or if
the relationship with the customer is
such as to indicate his out-of-State
character. Such a relationship would
exist, for example, where an out-ofState company in the regular course of
dealing picks up the petroleum products at the bulk storage station of the
enterprise and transports them out of
the State in its own trucks.
§ 794.129 Sales
‘‘made
within
the
State’’ not limited to noncovered activity.
Sales to customers located in the
same State as the establishment are
sales made ‘‘within the State’’ even
though such sales may constitute activity within the interstate commerce
coverage of the Act, as where the sale
(a) is made pursuant to prior orders
from customers for goods to be obtained from outside the State; (b) contemplates the purchase of goods from
outside the State to fill a customer’s
orders; or (c) is made to a customer for
his use in interstate or foreign commerce or in the production of goods for
such commerce.
SALES MADE TO OTHER BULK
DISTRIBUTORS
§ 794.130 Not more than 25 percent of
sales may be to customers engaged
in bulk distribution of petroleum
products for resale.
As a further requirement for exemption, section 7(b)(3) limits to not more
than 25 percent (measured by annual
dollar volume) the sales which an enterprise engaged in the wholesale or
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Wage and Hour Division, Labor
§ 794.134
bulk distribution of petroleum products may make to customers who are
engaged in the bulk distribution of
such products for resale. It should be
noted that this limitation does not depend on whether the goods sold by the
enterprise to such customers are sold
by it for resale, or on whether the
goods sold to such customers are petroleum products. It is whether the customer is engaged in selling petroleum
products for resale that is controlling.
A sale of any goods must be included in
this 25 percent limitation so long as it
is made to a customer who, as described in section 7(b)(3), can be characterized as one ‘‘engaged in the bulk
distribution of such products for resale’’. It should be also noted that this
provision does not in any way limit the
sales which the enterprise may make
to customers who are not engaged in
the bulk distribution of petroleum
products for resale. Thus, there is no
limitation on the sales the enterprise
may make to gasoline service stations
which sell such products for resale but
do no engage in the ‘‘bulk distribution’’ of the products so sold, or to any
other customers except those specified
in the exemption in section 7(b)(3). Who
is a ‘‘customer engaged in the bulk distribution of such products for resale’’
is discussed in §§ 794.131–794.133.
§ 794.131 ‘‘Customer * * * engaged in
bulk distribution’’.
A sale to a customer of an enterprise
engaged in the wholesale or bulk distribution of petroleum products will be
considered to come within the 25 percent limitation for purposes of the exemption under section 7(b)(3) if it is
made to a ‘‘customer who is engaged in
the bulk distribution of such products
for resale’’. The identity of such customers is generally well known in the
trade. For example, this would generally include other petroleum jobbers,
brokers, wholesalers, and any others
who engaged in the bulk distribution of
petroleum products for resale. Thus a
sale to a petroleum jobber who is engaged in selling petroleum products to
gasoline stations would clearly be a
sale to a customer described in section
7(b)(3). The essential tests are: first,
that the customer must be one who is
engaged in the distribution of ‘‘such
products’’, which means petroleum
products; second, that he must engage
in ‘‘the bulk distribution’’ of such
products; and finally, that he must be
engaged in such distribution ‘‘for resale’’. These three requirements are
discussed in §§ 794.132 through 794.134.
§ 794.132
‘‘Petroleum products’’.
A sale by an enterprise engaged in
the wholesale or bulk distribution of
petroleum products will be included in
the 25 percent limitation under the exemption only if it is made to a customer who engages in the distribution,
in bulk and for resale, of ‘‘petroleum
products’’. The term ‘‘petroleum products’’ as used in section 7(b)(3) includes
such products as gasoline, kerosene,
diesel fuel, lubricating oils, fuel oils,
greases, and liquified-petroleum gas.
Sales to customers who are not engaged in the distribution of petroleum
products will not be included in the 25
percent limitation.
§ 794.133
‘‘Bulk’’ distribution.
‘‘Bulk’’ distribution of petroleum
products typically connotes those
methods of distribution in which large
quantities of the product are distributed in a single delivery or delivery
trip. Thus, ‘‘bulk’’ distribution includes deliveries from bulk storage facilities at the establishment to the
tank truck of a customer (whether or
not at ‘‘wholesale’’). It also includes
deliveries made in series on a single
trip on a delivery route to the storage
tanks or facilities of a number of customers from a bulk supply of the product transported by tank truck, motor
transport, or other motor carrier operated by the enterprise. Such deliveries
are to be contrasted with such typical
small-quantity individual deliveries as
those made into the tank of a motor
vehicle for use in its propulsion.
§ 794.134
Distribution ‘‘for resale.’’
A sale made to a customer engaged in
the bulk distribution of petroleum
products will be included in the 25 percent limitation only if the customer
engages in the bulk distribution of petroleum products ‘‘for resale’’. Except
with respect to a specific exclusion in
section 3(n) regarding certain building
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§ 794.135
29 CFR Ch. V (7–1–19 Edition)
materials, the word ‘‘resale’’ is not defined in the Act. The common meaning
of ‘‘resale’’ is the act of ‘‘selling
again’’. A sale is made for resale when
the seller knows or has reasonable
cause to believe that what is sold by
him will be resold by the purchaser in
the same or a different form. Where the
sale is thus made for resale, it does not
matter what ultimately happens to the
subject of the sale. Thus, the fact that
goods sold for resale are consumed by
fire or no market is found for them and
they are therefore never resold does
not alter the character of the sale
which is made for resale. In considering
whether there is a sale of petroleum
products for resale in any specific situation, the term ‘‘sale’’ includes, as defined in section 3(k) of the Act, ‘‘any
sale, exchange, contract to sell, consignment for sale, shipment for sale, or
other disposition.’’
tivities customarily performed as an
incident to or in conjunction with such
distribution in the enterprises of the
industry which distributes such products, are employees for whom the employer may take the exemption provided they are paid in accordance with
the special compensation provisions of
section 7(b)(3). Thus, so long as these
payment requirements are met, the exemption is applicable not only to such
employees as drivers, helpers, loaders,
dispatchers, and warehousemen engaged in the bulk delivery and storage
of petroleum products, but also to such
employees as office, management, and
sales personnel, maintenance, custodial, protective personnel, and any others, who engage in related functions
customarily carried on by such enterprises in the industry in conjunction
with the wholesale and bulk distribution of the petroleum products.
APPLICATION OF EXEMPTION TO
EMPLOYEES
§ 794.137 Effect of activities other than
‘‘wholesale or bulk distribution of
petroleum products.’’
§ 794.135
Employees who are exempt.
If an enterprise engaged in distribution of petroleum products satisfies all
the conditions specified in section
7(b)(3) as previously discussed, the partial exemption provided by this section
from the Act’s general overtime pay requirements will be applicable to all
employees employed by their employer
in activities of the enterprise for which
the exemption was intended if, but
only if, such employees are compensated in accordance with the compensation requirements of section
7(b)(3) (see § 794.100).
§ 794.136 Employees whose activities
may qualify them for exemption.
The activities for which the section
7(b)(3) partial exemption was intended
are discussed generally in §§ 794.103
through 794.104. In accordance with the
principles there set forth, those employees employed in an enterprise
which qualifies for application of the
exemption, who are engaged in the
storage and delivery of petroleum products for the enterprise, and those employees whose work is required for the
performance of the activities in the
wholesale or bulk distribution of the
petroleum products or the related ac-
As previously noted, in some cases
the
related
activities
performed
through unified operation or common
control for a common business purpose
which are included in the enterprise
under the definition in section 3(r) of
the Act may include activities other
than the wholesale or bulk distribution
of petroleum products. Examples are
tire recapping or gasoline station services, the sale and servicing of oil burners, or the distribution of coal, ice,
feed, building supplies, paint, etc. In
some instances, as in the case of oilburner servicing, these other activities
are customarily performed as an incident to or in conjunction with the
wholesale or bulk distribution of petroleum products in the enterprises of the
industry engaged in such distribution.
As indicated in § 794.104, employees of
the enterprise who engage in such activities are within the general scope of
the exemption. However, activities
which are not customary practices of
enterprises in the industry of wholesale
or bulk distribution of petroleum products are not within the scope of the intent of the section 7(b)(3) exemption.
For example, construction activities,
operation of a sporting goods store,
scrap paper and metal activities, the
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Wage and Hour Division, Labor
§ 794.139
operation of a general repair garage,
etc., are not the type of activities for
which the section 7(b)(3) exemption was
intended. Thus, where an enterprise engaged in the wholesale or bulk distribution of petroleum products operates a general repair garage, a mechanic servicing the automobiles and
trucks brought to the garage by customers will not for that reason be
within the exemption provided by section 7(b)(3), although the exemption
provided by section 13(a)(2) may apply
to him if the garage qualifies as an exempt retail or service establishment
under the tests provided in that section
of the Act. On the other hand, mechanics employed by an enterprise engaged
in the wholesale or bulk distribution of
petroleum products for the purpose of
keeping the distribution equipment of
the enterprise in good repair would
come within the 7(b)(3) exemption.
§ 794.138 Workweek unit in applying
the exemption.
(a) As is true generally with respect
to provisions of the Act concerning
compensation for overtime hours of
work (see §§ 778.100 through 778.105 of
this chapter, Overnight Transportation
Co. v. Missel, 316 U.S. 572), the unit of
time to be used in determining the application of all provisions of the section 7(b)(3) exemption to an employee
is the workweek. As defined in § 778.105
of this chapter, an employee’s workweek is a fixed and regularly recurring
period of 168 hours—seven consecutive
24-hour periods. It may begin at any
hour of any day set by the employer
and need not coincide with the calendar week. Once the workweek has
been set it commences each succeeding
week on the same day and at the same
hour. Changing the workweek for the
purpose of escaping the requirements
of the Act is not permitted.
(b) By its terms (§ 794.100), section
7(b)(3) exempts an employer from any
statutory responsibility he might otherwise have for a violation of section
7(a) of the Act ‘‘by employing any employee for a workweek in excess of that
specified in such subsection’’ without
paying the overtime compensation prescribed therein, ‘‘if such employee is so
employed * * * by an * * * enterprise’’
qualifying under section 7(b)(3) for ap-
plication of its provisions to such employment and if such employee receives the compensation which section
7(b)(3) requires. Accordingly, for section 7(b)(3) to apply to any workweek
when an employee is employed for
hours in excess of those specified in
section 7(a), it must be established that
in such workweek he is employed by
his employer in the exempt activities
of an enterprise described in section
7(b)(3) and that the compensation received by him for his work in such
workweek satisfies the special pay requirements of section 7(b)(3).
§ 794.139 Exempt and nonexempt activities in the workweek.
The general nature of the activities
of a wholesale or bulk petroleum distribution enterprise in which an employee must be engaged in order to
come within the intent of the section
7(b)(3) exemption is discussed in
§§ 794.136 through 794.137. In each case
where an employee of the enterprise is
engaged for a substantial portion of his
workweek in activities which do not
appear to be a part of the wholesale or
bulk distribution of petroleum products, it will be necessary to examine
such activities and the manner and extent of their performance to determine
whether they are included in or are foreign to the activities customarily performed as an incident to or in conjunction with such distribution in the enterprises of the industry which distributes such products. If they are foreign
to the activities thus customarily performed, engagement in them by the
employee for a substantial portion of
his workweek will render section
7(b)(3) inapplicable to him for that
workweek. On the other hand, where an
employee, who is otherwise engaged in
the exempt activities (the wholesale or
bulk distribution of petroleum products, including activities which are a
necessary part thereof, and in activities customarily performed in the enterprises of the industry as an incident
thereto or in conjunction therewith),
devotes an insubstantial amount of
time (for administrative purposes, not
more than 20 percent in a workweek) to
these foreign activities, the section
7(b)(3) exemption will not for that reason be considered inapplicable to him.
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§ 794.140
29 CFR Ch. V (7–1–19 Edition)
§ 794.140 Compensation requirements
for a workweek under section
7(b)(3).
(a) Exemption of an employee in any
workweek under section 7(b)(3) is expressly conditioned on and limited by
the special compensation provisions
which it contains. These are set forth
in full text in § 794.100. They require
payment to the employee of compensation at specified rates for certain periods within the workweek when such periods are included in his hours of work.
Their application requires an increase
of at least 50 percent in the minimum
wage rate otherwise applicable to the
employee in such workweek ‘‘for employment in excess of forty hours’’ and,
in addition, if such employment is ‘‘in
excess of twelve hours in any workday,
or * * * in excess of fifty-six hours in
any workweek, as the case may be,’’
the employee must be paid overtime
compensation ‘‘at a rate not less than
one and one-half times the regular rate
at which he is employed’’ for all hours
worked in the workweek in excess of
the specified daily standard or in excess of the specified weekly standard,
whichever is the greater number of
overtime hours. The sections following
discuss separately the application of
these provisions to workweeks when
the employee’s hours of work do not
exceed the daily or weekly standard
specified in section 7(b)(3), and to
workweeks when hours in excess of the
daily or the weekly standard are
worked.
(b) The special compensation requirements of section 7(b)(3) apply to an employee otherwise eligible for the exemption whenever he works more than
40 hours in a workweek for an enterprise described in and operating under
this subsection. In any workweek in
which the employee does not work
more than 40 hours for his employer
only the minimum wage requirements
of section 6 are applicable. This is because section 7(b)(3) operates only as
an exemption from the requirement of
section 7(a) that compensation at a
rate not less than one and one-half
times the employee’s regular rate must
be paid for all hours worked by him in
excess of 40 in the workweek. (This
general 40-hour workweek standard has
been applicable since Feb. 1, 1969, to all
employment within the general coverage of the Act, regardless of whether
any overtime pay requirements were
previously applicable to such employment before the provisions added by
the Fair Labor Standards Amendments
of 1966 became effective.)
§ 794.141 Workweeks
when
hours
worked do not exceed 12 in any day
or 56 in the week; compensation requirements.
(a) The overtime pay exemption provided by section 7(b)(3) is ‘‘limited to 12
hours a day and 56 hours a week’’ in
any workweek; the exemption is provided ‘‘for employment up to 12 hours
in any workday and up to 56 hours in
any workweek’’ without any payment
for overtime hours at one and one-half
times the regular rate being required.
However, the exemption from any such
time-and-one-half payment is limited
to workweeks when ‘‘no more’’ than
the specified hours are worked and is
contingent on payment to the employee in such a workweek of ‘‘compensation for hours between 40 and 56’’
at a rate ‘‘not less than one and onehalf times the applicable minimum
wage.’’ (H. Rept. No. 1366, pp. 12–13, 43,
and S. Rept. No. 1487, p. 32, 89th Cong.,
second sess.) Thus, the exemption will
be applicable to an employee otherwise
eligible under the principles previously
discussed in this part in any workweek
when his hours of work do not exceed
12 in any day or 56 in the week if, and
only if, his ‘‘compensation for employment in excess of forty hours’’ is ‘‘at a
rate not less than one and one-half
times the minimum wage rate applicable to him under section 6’’, as provided in section 7(b)(3). This means
that in addition to the requirement of
section 6, under which the first 40
hours of work must be paid for at a
rate not less than the minimum hourly
wage rate therein specified, the compensation requirements applicable to
such an employee for whom the 7(b)(3)
exemption is claimed include any increase in his regular straight-time pay
rate for the hours worked in excess of
40 which may be necessary in order to
raise the wage rate for such hours to a
level of 50 percent above the rate required under section 6. Of course, if the
employee is employed at a regular
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Wage and Hour Division, Labor
§ 794.142
straight-time rate for all his hours of
work which is as great or greater than
one and one-half times the minimum
wage applicable to him under section 6,
no increase for the hours in excess of 40
will be required under the provisions of
section 7(b)(3).
(b) The general minimum wage rate
applicable to employees in employment
that was subject to the minimum wage
provisions of the Act prior to the effective date of the Fair Labor Standards
Amendments of 1966 is $1.60 an hour.
Under section 7(b)(3) an employee of a
wholesale or bulk petroleum products
distributor to whom this rate is applicable must be paid at least $2.40 an
hour for hours worked in excess of 40 in
the workweek in order for the exemption to apply. Many employees of such
distributors are subject to the $1.60
minimum wage rate under section 6 either because they are traditionally
covered as employees individually engaged in commerce or in the production of goods for commerce as defined
in the Act or because the enterprise
coverage provisions in effect prior to
the 1966 amendments (applicable to enterprises with an annual gross volume
of $1 million or more including excise
taxes) would subject their employment
to the minimum wage provisions if the
1966 amendments had not been enacted.
In the case, however, of an employee of
such a distributor whose employment
comes within the minimum wage provisions only because of the 1966 amendments (which reduced the annual gross
volume for covered enterprises to
$500,000 on Feb. 1, 1967, and to $250,000
on Feb. 1, 1969, exclusive of specified
separately stated excise taxes at the
retail level), the minimum wage rate
applicable under section 6 was $1.30 an
hour until February 1, 1970, when it increased to $1.45 an hour. Beginning
February 1, 1971, the minimum wage
rate applicable to such an employee
will be the same ($1.60 an hour) as that
presently applicable to employment
covered by the provisions of the prior
Act. For employees subject to the $1.30
minimum wage rate the rate required
for work over 40 hours under section
7(b)(3) was accordingly $1.95 an hour;
for those subject to the $1.45 rate beginning February 1, 1970, such rate is
$2.175. A discussion of the present and
prior coverage of the Act will be found
in part 776 of this chapter, when a revision of such part discussing enterprise
coverage is published.
§ 794.142 Special compensation when
overtime in excess of 12 daily or 56
weekly hours is worked in the
workweek.
(a) As noted in § 794.141, the partial
exemption provided by section 7(b)(3)
from the requirement that overtime
hours be paid for at not less than one
and one-half times the employee’s regular rate applies only to ‘‘employment
up to 12 hours in any workday and up
to 56 hours in any workweek.’’ The
statute makes it plain that in any
workweek when an employee otherwise
eligible for the exemption works more
than the specified daily or weekly
hours the exemption applies only ‘‘if
such employee receives compensation
for employment in excess of 12 hours in
any workday, or for employment in excess of 56 hours in any workweek, as
the case may be, at a rate not less than
one and one-half times the regular rate
at which he is employed.’’ Failure of
the employer to pay overtime compensation under these special standards defeat the exemption. (See Wirtz v.
Osceola Farms Co., 372 F. 2d 584 (C.A. 5);
Holtville Alfalfa Mills v. Wyatt, 230 F. 2d
298 (C.A. 9).)
(b) Under this provision, the number
of hours worked in the workweek
which are in excess of 12 in any workday or workdays therein, or the number in excess of 56 in the week, whichever is the greater number, must be
compensated as provided in section
7(b)(3). Thus, the requisite time-andone-half compensation must be paid for
all daily overtime hours in excess of 12
per day worked by an employee in a
workweek when his hours worked do
not exceed 56 in the week; and for all
weekly overtime hours in excess of 56
which he works in a workweek when he
does not work more than 12 hours in
any day. When an employee works in
excess of both the daily and weekly
maximum hours standards in any
workweek for which the exemption is
claimed, he must be paid at such overtime rate for all hours worked in the
workweek in excess of the applicable
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§ 794.142
29 CFR Ch. V (7–1–19 Edition)
daily maximum or in excess of the applicable weekly maximum, whichever
number of hours is greater. Thus, if his
total hours of work in the workweek
which are in excess of the daily maximum are 10 and his hours in excess of
the weekly maximum are 8, overtime
compensation is required for 10 hours,
not 18. As an example, suppose an employee employed at an hourly rate of
$2.40 is employed under the other conditions specified for exemption under
section 7(b)(3) and works the following
schedule:
Hours
M
T
W
T
F
S
S
Tot.
Worked ....................
14
9
10
15
12
8
0
68
Number of overtime hours in excess of 56 in the workweek,
12; number of hours in excess of 12 per day, five.
Since the weekly overtime hours are
greater, the employee is entitled to
overtime pay for 12 hours at $3.60 an
hour (11⁄2 × $2.40), a total of $43.60 for
the overtime hours, in addition to pay
at his regular rate for the remaining 56
hours (56 × $2.40) in the amount of
$134.40, or a total of $177.60 for the
week. If the employee had not worked
the 8 hours on Saturday, his total
hours worked in the week would have
been 60, of which five were daily overtime hours, and there would have been
4 weekly overtime hours under the section 7(b) standard. For such a schedule
the employee would be entitled to 5
hours of overtime pay at time and onehalf (5 × 11⁄2 × $2.40 = $18) plus the pay
at his regular rate for the remaining 55
hours (55 × $2.40 = $132) making a total
of $150 due him for the week.
(c) The overtime compensation payable to an employee under section
7(b)(3) when his hours worked in the
workweek are in excess of 12 in any
workday or in excess of 56 in the week
must be ‘‘at a rate not less than one
and one-half times the regular rate at
which he is employed.’’ This extra compensation for the excess hours cannot
be said to have been paid to an employee unless all the straight time
compensation due him for the nonovertime hours under his contract (express or implied) or under any applicable statute has been paid (§ 778.315 of
this chapter). In computing the extra
compensation due, the ‘‘regular rate’’
of the employee is calculated in accordance with section 7(e) of the Act,
as explained in § 778.107 of this chapter,
et seq., and can in no event be less than
the minimum required by the Act (see
§ 778.107 of this chapter). Since, for exemption from section 7(a) under section 7(b)(3) in workweeks exceeding 40
hours, the Act requires that the employee receive not only compensation
for 40 hours at not less than the minimum rate prescribed in section 6 but
also ‘‘compensation for employment in
excess of 40 hours’’ at a rate not less
than one and one-half times such minimum rate, the ‘‘regular rate’’, on
which time-and-one-half overtime pay
must be computed for daily hours
worked in excess of 12 or weekly hours
worked in excess of 56, must be calculated in conformity with these minimum standards.
(d) The following illustrations of the
application of these principles in the
case of an employee whose applicable
minimum wage rate under section 6 is
$1.60 an hour may be helpful. First,
suppose the ‘‘regular rate’’ at which
such an employee is employed, calculated in accordance with section 7(e)
of the Act and part 778 of this chapter,
is $2.40 an hour or more. This would be
true of an employee employed solely at
a single hourly rate of pay of $2.40 or
more which he receives as straight
time compensation for every hour of
work. It would likewise be true of an
employee,
however
compensated
(whether by a salary for a fixed or variable number of hours, by commissions,
piece rates, day rates or other pay systems or by a combination of these),
whose pay for all hours worked in the
workweek (except amounts excluded
under section 7(e)) yields him average
hourly straight-time earnings of $2.40
or more an hour. Since the employee’s
regular rate received for all nonovertime hours of work is in such a
case not less than one and one-half
times his applicable minimum rate
under section 6, the compensation requirements of section 7(b)(3) are satisfied for all nonovertime as well as
overtime hours worked if he receives
compensation at his ‘‘regular rate’’ of
$2.40 or more an hour for all hours
worked in his workweek which are not
in excess of 12 in his workday or 56 in
his workweek, together with extra
compensation for overtime in an
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Wage and Hour Division, Labor
§ 794.144
amount sufficient to provide compensation for all his hours worked in
excess of such daily or weekly hours,
whichever are greater, at a rate at
least 50 percent higher than such regular rate (at least $3.60 an hour if the
regular rate is $2.40 an hour). A somewhat different situation is presented,
however, where the employee whose applicable minimum wage under section 6
is $1.60 an hour is paid, as the Act permits, at a wage rate for nonovertime
hours up to 40 in the workweek which
is not less than the $1.60 minimum but
is not as much as the $2.40 required for
hours of employment in excess of 40. As
an example, suppose he is paid $2 an
hour for 40 hours and $2.40 as required
by section 7(b)(3) for hours in excess of
40, and works 60 hours in a workweek
in which 10 of his hours worked are in
excess of 12 in a workday for which
overtime compensation must be paid at
not less than one and one-half times
his regular rate of pay. Since payment
of the $2 and $2.40 rates for hours
worked up to and in excess of 40, respectively, satisfies the straight-time
requirements for compensation under
section 7(b)(3), all the compensation requirements for exemption thereunder
will be satisfied if, in addition, he is
paid for the 10 daily overtime hours an
extra sum equal to one-half his ‘‘regular rate’’ multiplied by 10. His regular
rate is computed for the workweek by
dividing his total straight-time compensation for the week by the number
of hours worked for which it is paid
and is accordingly $2.133 an hour ($2 ×
40 = $80; $2.40 × 20 = $48; $80 + 48 = $128;
$128 ÷ 60 = $2.133; see § 778.115 of this
chapter). Thus, the section 7(b)(3) compensation requirements are satisfied by
payment of straight-time compensation in the amount of $80 for 40 hours of
work and in the amount of $48 for the
20 additional hours worked, together
with $10.67 as overtime premium for
the 10 daily overtime hours ($2.133 × 1⁄2
× 10), or total pay of $138.67 for the
week.
§ 794.143 Work exempt under another
section of the Act.
Where an employee performs work
during his workweek, some of which is
exempt under one section of the Act,
and the remainder of which is exempt
under another section or sections, of
the Act, the exemptions may be combined. The employee’s combination exemption is controlled in such case by
that exemption which is narrower in
scope. For example, if part of his work
is exempt from both minimum wage
and overtime compensation under one
section of the Act, and the rest is exempt only from the overtime pay requirements by virtue of section 7(b)(3),
the employee is exempt that week from
the overtime pay provisions, but not
from the minimum wage requirements.
Similarly, an employee who spends
part of his workweek in work which
would, if done throughout the week,
exempt him completely from the overtime pay requirements, and the remainder of the week in work exempt
from such requirements only to the extent and under the conditions specified
in section 7(b)(3), could be exempt from
overtime pay only to such extent and
under such conditions. Thus where an
employee spends part of his workweek
in transporting petroleum products by
tank truck for an employer in an enterprise described in section 7(b)(3),
and the remainder of his workweek in
driving a taxicab for the employer’s
taxi business (work exempt from the
overtime provisions under section
13(b)(17)), he is eligible for exemption
from overtime pay only if he is compensated in such workweek in accordance with the provisions of section
7(b)(3) and only to the extent which
that section provides.
RECORDS TO BE KEPT BY EMPLOYERS
§ 794.144
Records to be maintained.
(a) Form of records. No particular
order or form of records is prescribed
by the recordkeeping regulations (part
516 of this chapter). Every employer operating under section 7(b)(3) of the Act
is, however, required to maintain and
preserve records containing the information and data as set out in §§ 516.2
and 516.21 of this chapter.
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SUBCHAPTER C—OTHER LAWS
PART 801—APPLICATION OF THE
EMPLOYEE POLYGRAPH PROTECTION ACT OF 1988
Subpart F—Administrative Proceedings
GENERAL
801.50
Applicability of procedures and rules.
PROCEDURES RELATING TO HEARING
Subpart A—General
801.51 Written notice of determination required.
801.52 Contents of notice.
801.53 Request for hearing.
Sec.
801.1 Purpose and scope.
801.2 Definitions.
801.3 Coverage.
801.4 Prohibitions on lie detector use.
801.5 Effect on other laws or agreements.
801.6 Notice of protection.
801.7 Authority of the Secretary.
801.8 Employment relationship.
RULES OF PRACTICE
801.58 General.
801.59 Service and computation of time.
801.60 Commencement of proceeding.
801.61 Designation of record.
801.62 Caption of proceeding.
Subpart B—Exemptions
REFERRAL FOR HEARING
801.10 Exclusion for public sector employers.
801.11 Exemption for national defense and
security.
801.12 Exemption for employers conducting
investigations of economic loss or injury.
801.13 Exemption for employers authorized
to manufacture, distribute, or dispense
controlled substances.
801.14 Exemption for employers providing
security services.
801.63 Referral to Administrative
Judge.
801.64 Notice of docketing.
PROCEDURES BEFORE ADMINISTRATIVE LAW
JUDGE
801.65 Appearances; representation of the
Department of Labor.
801.66 Consent findings and order.
801.67 Decision and Order of Administrative
Law Judge.
MODIFICATION OR VACATION OF DECISION AND
ORDER OF ADMINISTRATIVE LAW JUDGE
Subpart C—Restrictions on Polygraph
Usage Under Exemptions
801.20 Adverse employment action under ongoing investigation exemption.
801.21 Adverse employment action under security service and controlled substance
exemptions.
801.22 Rights of examinee—general.
801.23 Rights of examinee—pretest phase.
801.24 Rights of examinee—actual testing
phase.
801.25 Rights of examinee—post-test phase.
801.26 Qualifications of and requirements
for examiners.
801.68 Authority of the Secretary.
801.69 Procedures for initiating review.
801.70 Implementation by the Secretary.
801.71 Filing and service.
801.72 Responsibility of the Office of Administrative Law Judges.
801.73 Final decision of the Secretary.
RECORD
801.74 Retention of official record.
801.75 Certification of official record.
APPENDIX A TO PART 801—NOTICE TO EXAMINEE
Subpart D—Recordkeeping and Disclosure
Requirements
AUTHORITY: Pub. L. 100–347, 102 Stat. 646, 29
U.S.C. 2001–2009; 28 U.S.C. 2461 note (Federal
Civil Penalties Inflation Adjustment Act of
1990); Pub. L. 114–74 at § 701, 129 Stat 584.
801.30
801.35
SOURCE: 56 FR 9064, Mar. 4, 1991, unless otherwise noted.
Records to be preserved for 3 years.
Disclosure of test information.
Subpart E—Enforcement
Subpart A—General
801.40 General.
801.41 Representation of the Secretary.
801.42 Civil money penalties—assessment.
801.43 Civil money penalties—payment and
collection.
§ 801.1 Purpose and scope.
(a) Effective December 27, 1988, the
Employee Polygraph Protection Act of
1988 (EPPA or the Act) prohibits most
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Wage and Hour Division, Labor
§ 801.2
private employers (Federal, State, and
local government employers are exempted from the Act) from using any
lie detector tests either for pre-employment screening or during the
course of employment. Polygraph
tests, but no other types of lie detector
tests, are permitted under limited circumstances subject to certain restrictions. The purpose of this part is to set
forth the regulations to carry out the
provisions of EPPA.
(b) The regulations in this part are
divided into six subparts. Subpart A
contains the provisions generally applicable to covered employers, including the requirements relating to the
prohibitions on lie detector use and the
posting of notices. Subpart A also sets
forth interpretations regarding the effect of section 10 of the Act on other
laws or collective bargaining agreements. Subpart B sets forth rules regarding the statutory exemptions from
application of the Act. Subpart C sets
forth the restrictions on polygraph
usage under such exemptions. Subpart
D sets forth the recordkeeping requirements and the rules on the disclosure
of polygraph test information. Subpart
E deals with the authority of the Secretary of Labor and the enforcement
provisions under the Act. Subpart F
contains the procedures and rules of
practice necessary for the administrative enforcement of the Act.
§ 801.2 Definitions.
For purposes of this part:
(a) Act or EPPA means the Employee
Polygraph Protection Act of 1988 (Pub.
L. 100–347, 102 Stat. 646, 29 U.S.C. 2001–
2009).
(b) (1) The term commerce has the
meaning provided in section 3(b) of the
Fair Labor Standards Act of 1938 (29
U.S.C. 203(b)). As so defined, commerce
means trade, commerce, transportation, transmission, or communication among the several States or between any State and any place outside
thereof.
(2) The term State means any of the
fifty States and the District of Columbia and any Territory or possession of
the United States.
(c) The term employer means any person acting directly or indirectly in the
interest of an employer in relation to
an employee or prospective employee.
A polygraph examiner either employed
for or whose services are retained for
the sole purpose of administering polygraph tests ordinarily would not be
deemed an employer with respect to the
examinees.
(d) (1) The term lie detector means a
polygraph, deceptograph, voice stress
analyzer, psychological stress evaluator, or any other similar device
(whether mechanical or electrical) that
is used, or the results of which are
used, for the purpose of rendering a diagnostic opinion regarding the honesty
or dishonesty of an individual. Voice
stress analyzers, or psychological
stress evaluators, include any systems
that utilize voice stress analysis,
whether or not an opinion on honesty
or dishonesty is specifically rendered.
(2) The term lie detector does not include medical tests used to determine
the presence or absence of controlled
substances or alcohol in bodily fluids.
Also not included in the definition of
lie detector are written or oral tests
commonly referred to as ‘‘honesty’’ or
‘‘paper and pencil’’ tests, machinescored or otherwise; and graphology
tests commonly referred to as handwriting tests.
(e) The term polygraph means an instrument that—
(1) Records continuously, visually,
permanently,
and
simultaneously
changes in cardiovascular, respiratory,
and electrodermal patterns as minimum instrumentation standards; and
(2) Is used, or the results of which are
used, for the purpose of rendering a diagnostic opinion regarding the honesty
or dishonesty of an individual.
(f) The terms manufacture, dispense,
distribute, and deliver have the meanings set forth in the Controlled Substances Act, 21 U.S.C. 812.
(g) The term Secretary means the Secretary of Labor or authorized representative.
(h) Wage and Hour Division means the
organizational unit of the Department
of Labor to which is assigned primary
responsibility for enforcement and administration of the Act.
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§ 801.3
29 CFR Ch. V (7–1–19 Edition)
(i) Administrator means the Administrator of the Wage and Hour Division,
or authorized representative.
[56 FR 9064, Mar. 4, 1991, as amended at 82 FR
2230, Jan. 9, 2017]
§ 801.3
Coverage.
(a) The coverage of the Act extends
to ‘‘any employer engaged in or affecting commerce or in the production of
goods for commerce.’’ (Section 3 of
EPPA; 29 U.S.C. 2002.) In interpreting
the phrase ‘‘affecting commerce’’ in
other statutes, courts have found coverage to be coextensive with the full
scope of the Congressional power to
regulate commerce. See, for example,
Godwin v. Occupational Safety and
Health Review Commission, 540 F. 2d 1013,
1015 (9th Cir. 1976). Since most employers engage in one or more types of activities that would be regarded as ‘‘affecting commerce’’ under the principles established by a large body of
court cases, virtually all employers are
deemed subject to the provisions of the
Act, unless otherwise exempt pursuant
to section 7 (a), (b), or (c) of the Act
and §§ 801.10 or 801.11 of this part.
(b) The Act also extends to all employees of covered employers regardless of their citizenship status, and to
foreign corporations operating in the
United States. Moreover, the provisions of the Act extend to any actions
relating to the administration of lie
detector, including polygraph, tests
which occur within the territorial jurisdiction of the United States, e.g.,
the preparation of paperwork by a foreign corporation in a Miami office relating to a polygraph test that is to be
administered on the high seas or in
some foreign location.
[56 FR 9064, Mar. 4, 1991; 56 FR 14469, Apr. 10,
1991]
§ 801.4 Prohibitions
use.
on
lie
detector
(a) Section 3 of EPPA provides that,
unless otherwise exempt pursuant to
section 7 of the Act and §§ 801.10
through 801.14 of this part, covered employers are prohibited from:
(1) Requiring, requesting, suggesting
or causing, directly or indirectly, any
employee or prospective employee to
take or submit to a lie detector test;
(2) Using, accepting, or inquiring
about the results of a lie detector test
of any employee or prospective employee; and
(3) Discharging, disciplining, discriminating against, denying employment or promotion, or threatening any
employee or prospective employee to
take such action for refusal or failure
to take or submit to such test, on the
basis of the results of a test, for filing
a complaint, for testifying in any proceeding, or for exercising any rights afforded by the Act.
(b) An employer who reports a theft
or other incident involving economic
loss to police or other law enforcement
authorities is not engaged in conduct
subject to the prohibitions under paragraph (a) of this section if, during the
normal course of a subsequent investigation, such authorities deem it necessary to administer a polygraph test
to an employee(s) suspected of involvement in the reported incident. Employers who cooperate with police authorities during the course of their investigations into criminal misconduct are
likewise not deemed engaged in prohibitive conduct provided that such cooperation is passive in nature. For example, it is not uncommon for police
authorities to request employees suspected of theft or criminal activity to
submit to a polygraph test during the
employee’s tour of duty since, as a general rule, suspect employees are often
difficult to locate away from their
place of employment. Allowing a test
on the employer’s premises, releasing
an employee during working hours to
take a test at police headquarters, and
other similar types of cooperation at
the request of the police authorities
would not be construed as ‘‘requiring,
requesting, suggesting, or causing, directly or indirectly, any employee * * *
to take or submit to a lie detector
test.’’ Cooperation of this type must be
distinguished from actual participation
in the testing of employees suspected
of wrongdoing, either through the administration of a test by the employer
at the request or direction of police authorities, or through employer reimbursement of tests administered by police authorities to employees. In some
communities, it may be a practice of
police authorities to request employer
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Wage and Hour Division, Labor
§ 801.7
testing of employees before a police investigation is initiated on a reported
incident. In other communities, police
examiners are available to employers,
on a cost reimbursement basis, to conduct tests on employees suspected by
an employer of wrongdoing. All such
conduct on the part of employers is
deemed within the Act’s prohibitions.
(c) The receipt by an employer of information from a polygraph test administered by police authorities pursuant to an investigation is prohibited by
section 3(2) of the Act. (See paragraph
(a)(2) of this section.)
(d) The simulated use of a polygraph
instrument so as to lead an individual
to believe that an actual test is being
or may be performed (e.g., to elicit
confessions or admissions of guilt) constitutes conduct prohibited by paragraph (a) of this section. Such use includes the connection of an employee
or prospective employee to the instrument without any intention of a diagnostic purpose, the placement of the
instrument in a room used for interrogation unconnected to the employee or
prospective employee, or the mere suggestion that the instrument may be
used during the course of the interview.
[56 FR 9064, Mar. 4, 1991; 56 FR 14469, Apr. 10,
1991]
§ 801.5 Effect on other laws or agreements.
(a) Section 10 of EPPA provides that
the Act, except for subsections (a), (b),
and (c) of section 7, does not preempt
any provision of a State or local law,
or any provision of a collective bargaining agreement, that prohibits lie
detector tests or is more restrictive
with respect to the use of lie detector
tests.
(b)(1) This provision applies to all aspects of the use of lie detector tests, including procedural safeguards, the use
of test results, the rights and remedies
provided examinees, and the rights,
remedies, and responsibilities of examiners and employers.
(2) For example, if the State prohibits the use of polygraphs in all private employment, polygraph examinations could not be conducted pursuant
to the limited exemptions provided in
section 7 (d), (e) or (f) of the Act; a col-
lective bargaining agreement that provides greater protection to an examinee would apply in addition to the protection provided in the Act; or more
stringent licensing or bonding requirements in a State law would apply in
addition to the Federal bonding requirement.
(3) On the other hand, industry exemptions and applicable restrictions
thereon, provided in EPPA, would preempt less restrictive exemptions established by State law for the same industry, e.g., random testing of current employees in the drug industry not prohibited by State law but limited by
this Act to tests administered in connection with ongoing investigations.
(c) EPPA does not impede the ability
of State and local governments to enforce existing statutes or to enact subsequent legislation restricting the use
of lie detectors with respect to public
employees.
(d) Nothing in section 10 of the Act
restricts or prohibits the Federal Government from administering polygraph
tests to its own employees or to experts, consultants, or employees of
contractors, as provided in subsections
7(b) and 7(c) of the Act, and § 801.11 of
this part.
§ 801.6
Notice of protection.
Every employer subject to EPPA
shall post and keep posted on its premises a notice explaining the Act, as prescribed by the Secretary. Such notice
must be posted in a prominent and conspicuous place in every establishment
of the employer where it can readily be
observed by employees and applicants
for employment. Copies of such notice
may be obtained from local offices of
the Wage and Hour Division.
§ 801.7
Authority of the Secretary.
(a) Pursuant to section 5 of the Act,
the Secretary is authorized to:
(1) Issue such rules and regulations
as may be necessary or appropriate to
carry out the Act;
(2) Cooperate with regional, State,
local, and other agencies, and cooperate with and furnish technical assistance to employers, labor organizations,
and employment agencies to aid in effectuating the purposes of the Act; and
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§ 801.8
29 CFR Ch. V (7–1–19 Edition)
(3) Make investigations and inspections as necessary or appropriate,
through complaint or otherwise, including inspection of such records (and
copying or transcription thereof), questioning of such persons, and gathering
such information as deemed necessary
to determine compliance with the Act
or these regulations; and
(4) Require the keeping of records
necessary or appropriate for the administration of the Act.
(b) Section 5 of the Act also grants
the Secretary authority to issue subpoenas requiring the attendance and
testimony of witnesses or the production of any evidence in connection with
any investigation or hearing under the
Act. The Secretary may administer
oaths, examine witnesses, and receive
evidence. For the purpose of any investigation or hearing provided for in the
Act, the authority contained in sections 9 and 10 of the Federal Trade
Commission Act (15 U.S.C. 49, 50), relating to the attendance of witnesses
and the production of books, papers,
and documents, shall be available to
the Secretary.
(c) In case of disobedience to a subpoena, the Secretary may invoke the
aid of a United States District Court
which is authorized to issue an order
requiring the person to obey such subpoena.
(d) Any person may report a violation of the Act or these regulations to
the Secretary by advising any local office of the Wage and Hour Division,
U.S. Department of Labor, or any authorized representative of the Administrator. The office or person receiving
such a report shall refer it to the appropriate office of the Wage and Hour
Division for the region or area in which
the reported violation is alleged to
have occurred.
(e) The Secretary shall conduct investigations in a manner which, to the
extent practicable, protects the confidentiality of any complainant or
other party who provides information
to the Secretary in good faith.
(f) It is a violation of these regulations for any person to resist, oppose,
impede, intimidate, or interfere with
any official of the Department of Labor
assigned to perform an investigation,
inspection, or law enforcement func-
tion pursuant to the Act during the
performance of such duties.
[56 FR 9064, Mar. 4, 1991, as amended at 82 FR
2230, Jan. 9, 2017]
§ 801.8
Employment relationship.
(a) EPPA broadly defines ‘‘employer’’
to include ‘‘any person acting directly
or indirectly in the interest of an employer in relationship to an employee
or prospective employee’’ (EPPA section 2(2)).
(b) EPPA restrictions apply to State
Employment Services, private employment placement agencies, job recruiting firms, and vocational trade schools
with respect to persons who may be referred to potential employers. Such entities are not liable for EPPA violations, however, where the referrals are
made to employers for whom no reason
exists to know that the latter will perform polygraph testing of job applicants or otherwise violate the provisions of EPPA.
(c) EPPA prohibitions against discrimination apply to former employees
of an employer. For example, an employee may quit rather than take a lie
detector test. The employer cannot discriminate or threaten to discriminate
in any manner against that person
(such as by providing bad references in
the future) because of that person’s refusal to be tested, or because that person files a complaint, institutes a proceeding, testifies in a proceeding, or
exercises any right under EPPA.
Subpart B—Exemptions
§ 801.10 Exclusion
employers.
for
public
(a) Section 7(a) provides an exclusion
from the Act’s coverage for the United
States Government, any State or local
government, or any political subdivision of a State or local government,
acting in the capacity of an employer.
This exclusion from the Act also extends to any interstate governmental
agency.
(b) The term United States Government
means any agency or instrumentality,
civilian or military, of the executive,
legislative, or judicial branches of the
Federal Government, and includes
independent agencies, wholly-owned
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Wage and Hour Division, Labor
§ 801.12
government corporations, and nonappropriated fund instrumentalities.
(c) The term any political subdivision
of a State or local government means any
entity which is either.
(1) Created directly by a state or
local government, or
(2) Administered by individuals who
are responsible to public officials (i.e.,
appointed by an elected public official(s) and/or subject to removal procedures for public officials, or to the general electorate.
(d) This exclusion from the Act applies only to the Federal, State, and
local government entity with respect
to its own public employees. Except as
provided in sections 7 (b) and (c) of the
Act, and § 801.11 of the regulations, this
exclusion does not extend to contractors or nongovernmental agents of a
government entity, nor does it extend
to government entities with respect to
employees of a private employer with
which the government entity has a
contractual or other business relationship.
§ 801.11 Exemption for national defense and security.
(a) The exemptions allowing for the
administration of lie detector tests in
the following paragraphs (b) through
(e) of this section apply only to the
Federal Government; they do not allow
private employers/contractors to administer such tests.
(b) Section 7(b)(1) of the Act provides
that nothing in the Act shall be construed to prohibit the administration
of any lie detector test by the Federal
Government, in the performance of any
counterintelligence function, to any
expert, consultant or employee of any
contractor under contract with the Department of Defense; or with the Department of Energy, in connection
with the atomic energy defense activities of such Department.
(c) Section 7(b)(2)(A) provides that
nothing in the Act shall be construed
to prohibit the administration of any
lie detector test by the Federal Government, in the performance of any intelligence or counterintelligence function of the National Security Agency,
the Defense Intelligence Agency, or the
Central Intelligence Agency, to any individual employed by, assigned to, or
detailed to any such agency; or any expert or consultant under contract to
any such agency; or any employee of a
contractor to such agency; or any individual applying for a position in any
such agency; or any individual assigned
to a space where sensitive cryptologic
information is produced, processed, or
stored for any such agency.
(d) Section 7(b)(2)(B) provides that
nothing in the Act shall be construed
to prohibit the administration of any
lie detector test by the Federal Government, in the performance of any intelligence or counterintelligence function, to any expert, or consultant (or
employee of such expert or consultant)
under contract with any Federal Government department, agency, or program whose duties involve access to information that has been classified at
the level of top secret or designated as
being within a special access program
under section 4.2 (a) of Executive Order
12356 (or a successor Executive Order).
(e) Section 7(c) provides that nothing
in the Act shall be construed to prohibit the administration of any lie detector test by the Federal Government,
in the performance of any counterintelligence function, to any employee of a
contractor of the Federal Bureau of Investigation of the Department of Justice who is engaged in the performance
of any work under a contract with the
Bureau.
(f) Counterintelligence for purposes of
the above paragraphs means information gathered and activities conducted
to protect against espionage and other
clandestine intelligence activities, sabotage, terrorist activities, or assassinations conducted for or on behalf of foreign governments, or foreign or domestic organizations or persons.
(g) Lie detector tests of persons described in the above paragraphs will be
administered in accordance with applicable Department of Defense directives
and regulations, or other regulations
and directives governing the use of
such tests by the United States Government, as applicable.
§ 801.12 Exemption for employers conducting investigations of economic
loss or injury.
(a) Section 7(d) of the Act provides a
limited exemption from the general
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§ 801.12
29 CFR Ch. V (7–1–19 Edition)
prohibition on lie detector use in private employment settings for employers conducting ongoing investigations
of economic loss or injury to the employer’s business. An employer may request an employee, subject to the conditions set forth in sections 8 and 10 of
the Act and §§ 801.20, 801.22, 801.23,
801.24, 801.25, 801.26, and 801.35 of this
part, to submit to a polygraph test, but
no other type of lie detector test, only
if—
(1) The test is administered in connection with an ongoing investigation
involving economic loss or injury to
the employer’s business, such as theft,
embezzlement, misappropriation or an
act of unlawful industrial espionage or
sabotage;
(2) The employee had access to the
property that is the subject of the investigation;
(3) The employer has a reasonable
suspicion that the employee was involved in the incident or activity under
investigation;
(4) The employer provides the examinee with a statement, in a language
understood by the examinee, prior to
the test which fully explains with particularity the specific incident or activity being investigated and the basis
for testing particular employees and
which contains, at a minimum:
(i) An identification with particularity of the specific economic loss or
injury to the business of the employer;
(ii) A description of the employee’s
access to the property that is the subject of the investigation;
(iii) A description in detail of the
basis of the employer’s reasonable suspicion that the employee was involved
in the incident or activity under investigation; and
(iv) Signature of a person (other than
a polygraph examiner) authorized to
legally bind the employer; and
(5) The employer retains a copy of
the statement and proof of service described in paragraph (a)(4) of this section for at least 3 years and makes it
available for inspection by the Wage
and Hour Division on request. (See
§ 801.30(a).)
(Approved by the Office of Management and
Budget under control number 1225–0170)
(b) For the exemption to apply, the
condition of an ‘‘ongoing investiga-
tion’’ must be met. As used in section
7(d) of the Act, the ongoing investigation must be of a specific incident or
activity. Thus, for example, an employer may not request that an employee or employees submit to a polygraph test in an effort to determine
whether or not any thefts have occurred. Such random testing by an employer is precluded by the Act. Further, because the exemption is limited
to a specific incident or activity, an
employer is precluded from using the
exemption in situations where the socalled ‘‘ongoing investigation’’ is continuous. For example, the fact that
items in inventory are frequently missing from a warehouse would not be a
sufficient basis, standing alone, for administering a polygraph test. Even if
the employer can establish that unusually high amounts of inventory are
missing from the warehouse in a given
month, this, in and of itself, would not
be a sufficient basis to meet the specific incident requirement. On the
other hand, polygraph testing in response to inventory shortages would be
permitted where additional evidence is
obtained through subsequent investigation of specific items missing through
intentional wrongdoing, and a reasonable suspicion that the employee to be
polygraphed was involved in the incident under investigation. Administering a polygraph test in circumstances where the missing inventory is merely unspecified, statistical
shortages, without identification of a
specific incident or activity that produced the inventory shortages and a
‘‘reasonable suspicion that the employee was involved,’’ would amount to
little more than a fishing expedition
and is prohibited by the Act.
(c)(1)(i) The terms economic loss or injury to the employer’s business include
both direct and indirect economic loss
or injury.
(ii) Direct loss or injury includes
losses or injuries resulting from theft,
embezzlement, misappropriation, industrial espionage or sabotage. These
examples, cited in the Act, are intended to be illustrative and not exhaustive. Another specific incident
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Wage and Hour Division, Labor
§ 801.12
which would constitute direct economic loss or injury is the misappropriation of confidential or trade secret
information.
(iii) Indirect loss or injury includes
the use of an employer’s business to
commit a crime, such as check-kiting
or money laundering. In such cases, the
ongoing investigation must be limited
to criminal activity that has already
occurred, and to use of the employer’s
business operations (and not simply
the use of the premises) for such activity. For example, the use of an employer’s vehicles, warehouses, computers or
equipment to smuggle or facilitate the
importing of illegal substances constitutes an indirect loss or injury to
the employer’s business operations.
Conversely, the mere fact that an illegal act occurs on the employer’s premises (such as a drug transaction that
takes place in the employer’s parking
lot or rest room) does not constitute an
indirect economic loss or injury to the
employer.
(iv) Indirect loss or injury also includes theft or injury to property of
another for which the employer exercises fiduciary, managerial or security
responsibility, or where the firm has
custody of the property (but not property of other firms to which the employees have access by virtue of the
business relationship). For example, if
a maintenance employee of the manager of an apartment building steals
jewelry from a tenant’s apartment, the
theft results in an indirect economic
loss or injury to the employer because
of the manager’s management responsibility with respect to the tenant’s
apartment. A messenger on a delivery
of confidential business reports for a
client firm who steals the reports
causes an indirect economic loss or injury to the messenger service because
the messenger service is custodian of
the client firm’s reports, and therefore
is responsible for their security. Similarly, the theft of property protected
by a security service employer is considered an economic loss or injury to
that employer.
(v) A theft or injury to a client firm
does not constitute an indirect loss or
injury to an employer unless that employer has custody of, or management,
or security responsibility for, the prop-
erty of the client that was lost or stolen or injured. For example, a cleaning
contractor has no responsibility for the
money at a client bank. If money is
stolen from the bank by one of the
cleaning contractor’s employees, the
cleaning contractor does not suffer an
indirect loss or injury.
(vi) Indirect loss or injury does not
include loss or injury which is merely
threatened or potential, e.g., a threatened or potential loss of an advantageous business relationship.
(2) Economic losses or injuries which
are the result of unintentional or lawful conduct would not serve as a basis
for the administration of a polygraph
test. Thus, apparently unintentional
losses or injuries stemming from truck,
car, workplace, or other similar type
accidents or routine inventory or cash
register shortages would not meet the
economic loss or injury requirement.
Any economic loss incident to lawful
union or employee activity also would
not satisfy this requirement. It makes
no difference that an employer may be
obligated to directly or indirectly
incur the cost of the incident, as
through payment of a ‘‘deductible’’
portion under an insurance policy or
higher insurance premiums.
(3) It is the business of the employer
which must suffer the economic loss or
injury. Thus, a theft committed by one
employee against another employee of
the same employer would not satisfy
the requirement.
(d) While nothing in the Act prohibits the use of medical tests to determine the presence of controlled substances or alcohol in bodily fluids, the
section 7(d) exemption does not permit
the use of a polygraph test to learn
whether an employee has used drugs or
alcohol, even where such possible use
may have contributed to an economic
loss to the employer (e.g., an accident
involving a company vehicle).
(e) Section 7(d)(2) provides that, as a
condition for the use of the exemption,
the employee must have had access to
the property that is the subject of the
investigation.
(1) The word access, as used in section
7(d)(2), refers to the opportunity which
an employee had to cause, or to aid or
abet in causing, the specific economic
loss or injury under investigation. The
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29 CFR Ch. V (7–1–19 Edition)
term ‘‘access’’, thus, includes more
than direct or physical contact during
the course of employment. For example, as a general matter, all employees
working in or with authority to enter a
warehouse storage area have ‘‘access’’
to unsecured property in the warehouse. All employees with the combination to a safe have ‘‘access’’ to the
property in a locked safe. Employees
also have ‘‘access’’ who have the ability to divert possession or otherwise affect the disposition of the property
that is the subject of investigation. For
example, a bookkeeper in a jewelry
store with access to inventory records
may aid or abet a clerk who steals an
expensive watch by removing the
watch from the employer’s inventory
records. In such a situation, it is clear
that the bookkeeper effectively has
‘‘access’’ to the property that is the
subject of the investigation.
(2) As used in section 7(d)(2), property
refers to specifically identifiable property, but also includes such things of
value as security codes and computer
data, and proprietary, financial or
technical information, such as trade
secrets, which by its availability to
competitors or others would cause economic harm to the employer.
(f)(1) As used in section 7(d)(3), the
term reasonable suspicion refers to an
observable, articulable basis in fact
which indicates that a particular employee was involved in, or responsible
for, an economic loss. Access in the
sense of possible or potential opportunity, standing alone, does not constitute a basis for ‘‘reasonable suspicion’’. Information from a co-worker,
or an employee’s behavior, demeanor,
or conduct may be factors in the basis
for reasonable suspicion. Likewise, inconsistencies between facts, claims, or
statements that surface during an investigation can serve as a sufficient
basis for reasonable suspicion. While
access or opportunity, standing alone,
does not constitute a basis for reasonable suspicion, the totality of circumstances surrounding the access or
opportunity (such as its unauthorized
or unusual nature or the fact that access was limited to a single individual)
may constitute a factor in determining
whether there is a reasonable suspicion.
(2) For example, in an investigation
of a theft of an expensive piece of jewelry, an employee authorized to open
the establishment’s safe no earlier
than 9 a.m., in order to place the jewelry in a window display case, is observed opening the safe at 7:30 a.m. In
such a situation, the opening of the
safe by the employee one and one-half
hours prior to the specified time may
serve as the basis for reasonable suspicion. On the other hand, in the example given, if the employer asked the
employee to bring the piece of jewelry
to his or her office at 7:30 a.m., and the
employee then opened the safe and reported the jewelry missing, such access, standing alone, would not constitute a basis for reasonable suspicion
that the employee was involved in the
incident unless access to the safe was
limited solely to the employee. If no
one other than the employee possessed
the combination to the safe, and all
other possible explanations for the loss
are ruled out, such as a break-in, the
employer may formulate a basis for
reasonable suspicion based on sole access by one employee.
(3) The employer has the burden of
establishing that the specific individual or individuals to be tested are
‘‘reasonably suspected’’ of involvement
in the specific economic loss or injury
for the requirement in section 7(d)(3) to
be met.
(g)(1) As discussed in paragraph (a)(4)
of this section, section 7(d)(4) of the
Act sets forth what information, at a
minimum, must be provided to an employee if the employer wishes to claim
the exemption.
(2) The statement required under
paragraph (a)(4) of this section must be
received by the employee at least 48
hours, excluding weekend days and
holidays, prior to the time of the examination. The statement must set forth
the time and date of receipt by the employee and be verified by the employee’s signature. This will provide the
employee with adequate pre-test notice
of the specific incident or activity
being investigated and afford the employee sufficient time prior to the test
to obtain and consult with legal counsel or an employee representative.
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§ 801.13
(3) The statement to be provided to
the employee must set forth with particularity the specific incident or activity being investigated and the basis
for testing particular employees. Section 7(d)(4)(A) requires specificity beyond the mere assertion of general
statements regarding economic loss,
employee access, and reasonable suspicion. For example, an employer’s assertion that an expensive watch was
stolen, and that the employee had access to the watch and is therefore a
suspect, would not meet the ‘‘with particularity’’ criterion. If the basis for an
employer’s requesting an employee (or
employees) to take a polygraph test is
not articulated with particularity, and
reduced to writing, then the standard
is not met. The identity of a co-worker
or other individual providing information used to establish reasonable suspicion need not be revealed in the
statement.
(4) It is further required that the
statement provided to the examinee be
signed by the employer, or an employee
or other representative of the employer
with authority to legally bind the employer. The person signing the statement must not be a polygraph examiner unless the examiner is acting solely in the capacity of an employer with
respect to his or her own employees
and does not conduct the examination.
The standard would not be met, and
the exemption would not apply if the
person signing the statement is not authorized to legally bind the employer.
(h) Polygraph tests administered pursuant to this exemption are subject to
the limitations set forth in sections 8
and 10 of the Act, as discussed in
§§ 801.20, 801.22, 801.23, 801.24, 801.25,
801.26, and 801.35 of this part. As provided in these sections, the exemption
will apply only if certain requirements
are met. Failure to satisfy any of the
specified requirements nullifies the
statutory authority for polygraph test
administration and may subject the
employer to the assessment of civil
money penalties and other remedial actions, as provided for in section 6 of the
Act (see subpart E, § 801.42 of this part).
The administration of such tests is also
subject to State or local laws, or collective bargaining agreements, which
may either prohibit lie detector tests,
or contain more restrictive provisions
with respect to polygraph testing.
§ 801.13 Exemption of employers authorized to manufacture, distribute,
or dispense controlled substances.
(a) Section 7(f) provides an exemption from the Act’s general prohibition
regarding the use of polygraph tests for
employers authorized to manufacture,
distribute, or dispense a controlled substance listed in schedule I, II, III, or IV
of section 202 of the Controlled Substances Act (21 U.S.C. 812). This exemption permits the administration of
polygraph tests, subject to the conditions set forth in sections 8 and 10 of
the Act and §§ 801.21, 801.22, 801.23,
801.24, 801.25, 801.26, and 801.35 of this
part, to:
(1) A prospective employee who
would have direct access to the manufacture, storage, distribution, or sale of
any such controlled substance; or
(2) A current employee if the following conditions are met:
(i) The test is administered in connection with an ongoing investigation
of criminal or other misconduct involving, or potentially involving, loss or injury to the manufacture, distribution,
or dispensing of any such controlled
substance by such employer; and
(ii) The employee had access to the
person or property that is the subject
of the investigation.
(b)(1) The terms manufacture, distribute, distribution, dispense, storage,
and sale, for the purposes of this exemption, are construed within the
meaning of the Controlled Substances
Act (21 U.S.C. 812 et seq.), as administered by the Drug Enforcement Administration (DEA), U.S. Department of
Justice.
(2) The exemption in section 7(f) of
the Act applies only to employers who
are authorized by DEA to manufacture,
distribute, or dispense a controlled substance. Section 202 of the Controlled
Substances Act (21 U.S.C. 812) requires
every person who manufactures, distributes, or dispenses any controlled
substance to register with the Attorney General (i.e., with DEA). Common
or contract carriers and warehouses
whose possession of the controlled substance is in the usual course of their
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business or employment are not required to register. Since this exemption is intended to apply only to employees and prospective employees of
persons or entities registered with
DEA, and is not intended to apply to
truck drivers employed by persons or
entities who are not so registered, it
has no application to employees of
common or contract carriers or public
warehouses. Truck drivers and warehouse employees of the persons or entities registered with DEA and authorized to manufacture, distribute, or dispense controlled substances, are within
the scope of the exemption where they
have direct access or access to the controlled substances, as discussed below.
(c) In order for a polygraph examination to be performed, section 7(f) of the
Act requires that a prospective employee have ‘‘direct access’’ to the controlled substance(s) manufactured, dispensed, or distributed by the employer.
Where a current employee is to be tested as a part of an ongoing investigation, section 7(f) requires that the employee have ‘‘access’’ to the person or
property that is the subject of the investigation.
(1) A prospective employee would
have ‘‘direct access’’ if the position
being applied for has responsibilities
which include contact with or which
affect the disposition of a controlled
substance, including participation in
the process of obtaining, dispensing, or
otherwise distributing a controlled
substance. This includes contact or direct involvement in the manufacture,
storage, testing, distribution, sale or
dispensing of a controlled substance
and may include, for example, packaging, repackaging, ordering, licensing,
shipping, receiving, taking inventory,
providing security, prescribing, and
handling of a controlled substance. A
prospective employee would have ‘‘direct access’’ if the described job duties
would give such person access to the
products in question, whether such employee would be in physical proximity
to controlled substances or engaged in
activity which would permit the employee to divert such substances to his
or her possession.
(2) A current employee would have
‘‘access’’ within the meaning of section
7(f) if the employee had access to the
specific person or property which is the
subject of the on-going investigation,
as discussed in § 801.12(e) of this part.
Thus, to test a current employee, the
employee need not have had ‘‘direct’’
access to the controlled substance, but
may have had only infrequent, random,
or opportunistic access. Such access
would be sufficient to test the employee if the employee could have
caused, or could have aided or abetted
in causing, the loss of the specific property which is the subject of the investigation. For example, a maintenance
worker in a drug warehouse, whose job
duties include the cleaning of areas
where the controlled substances which
are the subject of the investigation
were present, but whose job duties do
not include the handling of controlled
substances, would be deemed to have
‘‘access’’, but normally not ‘‘direct access’’, to the controlled substances. On
the other hand, a drug warehouse truck
loader, whose job duties include the
handling of outgoing shipment orders
which contain controlled substances,
would have ‘‘direct access’’ to such
controlled substances. A pharmacy department in a supermarket is another
common situation which is useful in illustrating the distinction between ‘‘direct access’’ and ‘‘access’’. Store personnel receiving pharmaceutical orders, i.e., the pharmacist, pharmacy intern, and other such employees working in the pharmacy department, would
ordinarily have ‘‘direct access’’ to controlled substances. Other store personnel whose job duties and responsibilities do not include the handling of
controlled substances but who had occasion to enter the pharmacy department where the controlled substances
which are the subject of the investigation were stored, such as maintenance
personnel or pharmacy cashiers, would
have ‘‘access’’. Certain other store personnel whose job duties do not permit
or require entrance into the pharmacy
department for any reason, such as
produce or meat clerks, checkout cashiers, or baggers, would not ordinarily
have ‘‘access.’’ However, any current
employee, regardless of described job
duties, may be polygraphed if the employer’s investigation of criminal or
other misconduct discloses that such
employee in fact took action to obtain
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Wage and Hour Division, Labor
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‘‘access’’ to the person or property that
is the subject of the investigation—
e.g., by actually entering the drug storage area in violation of company rules.
In the case of ‘‘direct access’’, the prospective employee’s access to controlled substances would be as a part of
the manufacturing, dispensing or distribution process, while a current employee’s ‘‘access’’ to the controlled substances which are the subject of the investigation need only be opportunistic.
(d) The term prospective employee, for
the purposes of this section, includes a
current employee who presently holds
a position which does not entail direct
access to controlled substances, and
therefore is outside the scope of the exemption’s provisions for preemployment polygraph testing, provided the
employee has applied for and is being
considered for transfer or promotion to
another position which entails such direct access. For example, an office secretary may apply for promotion to a
position in the vault or cage areas of a
drug warehouse, where controlled substances are kept. In such a situation,
the current employee would be deemed
a ‘‘prospective employee’’ for the purposes of this exemption, and thus could
be subject to preemployment polygraph screening, prior to such a change
in position. However, any adverse action which is based in part on a polygraph test against a current employee
who is considered a ‘‘prospective employee’’ for purposes of this section
may be taken only with respect to the
prospective position and may not affect
the employee’s employment in the current position.
(e) Section 7(f) of the Act makes no
specific reference to a requirement
that employers provide current employees with a written statement prior
to polygraph testing. Thus, employers
to whom this exemption is available
are not required to furnish a written
statement such as that specified in section 7(d) of the Act and § 801.12(a)(4) of
this part.
(f) For the section 7(f) exemption to
apply, the polygraph testing of current
employees must be administered in
connection with an ongoing investigation of criminal or other misconduct
involving, or potentially involving,
loss or injury to the manufacture, dis-
tribution, or dispensing of any such
controlled substance by such employer.
(1) Current employees may only be
administered polygraph tests in connection with an ongoing investigation
of criminal or other misconduct, relating to a specific incident or activity, or
potential incident or activity. Thus, an
employer is precluded from using the
exemption in connection with continuing investigations or on a random
basis to determine if thefts are occurring. However, unlike the exemption in
section 7(d) of the Act for employers
conducting ongoing investigations of
economic loss or injury, the section 7(f)
exemption includes ongoing investigations of misconduct involving potential
drug losses. Nor does the latter exemption include the requirement for ‘‘reasonable suspicion’’ contained in the
section 7(d) exemption. Thus, a drug
store employer is permitted to polygraph all current employees who have
access to a controlled substance stolen
from the inventory, or where there is
evidence that such a theft is planned.
Polygraph testing based on an inventory shortage of the drug during a particular accounting period would not be
permitted unless there is extrinsic evidence of misconduct.
(2) In addition, the test must be administered in connection with loss or
injury, or potential loss or injury, to
the manufacture, distribution, or dispensing of a controlled substance.
(i) Retail drugstores and wholesale
drug warehouses typically carry inventory of so-called health and beauty
aids,
cosmetics,
over-the-counter
drugs, and a variety of other similar
products, in addition to their product
lines of controlled drugs. The noncontrolled products usually constitute the
majority of such firms’ sales volumes.
An economic loss or injury related to
such noncontrolled substances would
not constitute a basis of applicability
of the section 7(f) exemption. For example, an investigation into the theft
of a gross of cosmetic products could
not be a basis for polygraph testing
under section 7(f), but the theft of a
container of valium could be.
(ii) Polygraph testing, with respect
to an ongoing investigation concerning
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products other than controlled substances might be initiated under section 7(d) of the Act and § 801.12 of this
part. However, the exemption in section 7(f) of the Act and this section is
limited solely to losses or injury associated with controlled substances.
(g) Polygraph tests administered pursuant to this exemption are subject to
the limitations set forth in sections 8
and 10 of the Act, as discussed in
§§ 801.21, 801.22, 801.23, 801.24, 801.25,
801.26, and 801.35 of this part. As provided in these sections, the exemption
will apply only if certain requirements
are met. Failure to satisfy any of the
specified requirements nullifies the
statutory authority for polygraph test
administration and may subject the
employer to the assessment of civil
money penalties and other remedial actions, as provided for in section 6 of the
Act (see subpart E, § 801.40 of this part).
The administration of such tests is also
subject to State or local laws, or collective bargaining agreements, which
may either prohibit lie detector tests,
or contain more restrictive provisions
with respect to polygraph testing.
[56 FR 9064, Mar. 4, 1991; 56 FR 14469, Apr. 10,
1991]
§ 801.14 Exemption for employers providing security services.
(a) Section 7(e) of the Act provides an
exemption from the general prohibition against polygraph tests for certain
armored car, security alarm, and security guard employers. Subject to the
conditions set forth in sections 8 and 10
of the Act and §§ 801.21, 801.22, 801.23,
801.24, 801.25, 801.26, and 801.35 of this
part, section 7(e) permits the use of
polygraph tests on certain prospective
employees provided that such employers have as their primary business purpose the providing of armored car personnel, personnel engaged in the design, installation, and maintenance of
security alarm systems, or other uniformed or plainclothes security personnel; and provided the employer’s
function includes protection of:
(1) Facilities, materials, or operations having a significant impact on
the health or safety of any State or political subdivision thereof, or the national security of the United States,
such as—
(i) Facilities engaged in the production, transmission, or distribution of
electric or nuclear power,
(ii) Public water supply facilities,
(iii) Shipments or storage of radioactive or other toxic waste materials,
and
(iv) Public transportation; or
(2) Currency, negotiable securities,
precious commodities or instruments,
or proprietary information.
(b)(1) Section 7(e) permits the administration of polygraph tests only to
prospective employees. However, security service employers may administer
polygraph tests to current employees
in connection with an ongoing investigation, subject to the conditions of
section 7(d) of the Act and § 801.12 of
this part.
(2) The term prospective employee generally refers to an individual who is
not currently employed by and who is
being considered for employment by an
employer. However, the term ‘‘prospective employee’’ also includes current employees under circumstances
similar to those discussed in paragraph
(d) of § 801.13 of this part, i.e., if the employee was initially hired for a position
which was not within the exemption
provided by section 7(e) of the Act, and
subsequently applies for, and is under
consideration for, transfer to a position
for which pre-employment testing is
permitted. Thus, for example, a security guard may be hired for a job outside the scope of the exemption’s provisions for pre-employment polygraph
testing, such as a position at a supermarket. If subsequently this guard is
under consideration for transfer or promotion to a job at a nuclear power
plant, this currently-employed individual would be considered to be a
‘‘prospective employee’’ for purposes of
this exemption, prior to such proposed
transfer or promotion. However, any
adverse action which is based in part
on a polygraph test against a current
employee who is considered to be a
‘‘prospective employee’’ for purposes of
this exemption may be taken only with
respect to the prospective position and
may not affect the employee’s employment in the current position.
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Wage and Hour Division, Labor
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(c) Section 7(e) applies to certain private employers whose ‘‘primary business purpose’’ consists of providing armored car personnel, personnel engaged in the design, installation, and
maintenance of security alarm systems, or other uniformed or plainclothes security personnel. Thus, the
exemption is limited to firms primarily
in the business of providing such security services, and does not apply to
firms primarily in some other business
who employ their own security personnel. (For example, a utility company which employs its own security
personnel could not qualify.) In the
case of diversified firms, the term primary business purpose shall mean that
at least 50% of the employer’s annual
dollar volume of business is derived
from the provision of the types of security services specifically identified in
section 7(e). Where a parent corporation includes a subsidiary corporation
engaged in providing security services,
the annual dollar volume of business
test is applied to the legal entity (or
entities) which is the employer, i.e.,
the subsidiary corporation, not the
parent corporation.
(d)(1) As used in section 7(e)(1)(A),
the terms facilities, materials, or operations having a significant impact on the
health or safety of any State or political
subdivision thereof, or the national security of the United States include protection of electric or nuclear power
plants, public water supply facilities,
radioactive or other toxic waste shipments or storage, and public transportation. These examples are intended to
be illustrative, and not exhaustive.
However, the types of ‘‘facilities, materials, or operations’’ within the scope
of the exemption are not to be construed so broadly as to include low priority or minor security interests. The
‘‘facilities, materials, or operations’’ in
question consist only of those having a
‘‘significant impact’’ on public health
or safety, or national security. However, the ‘‘facilities, materials, or operations’’ may be either privately or publicly owned.
(2) The specific ‘‘facilities, materials,
or operations’’ contemplated by this
exemption include those against which
acts of sabotage, espionage, terrorism,
or other hostile, destructive, or illegal
acts could significantly impact on the
general public’s safety or health, or national security. In addition to the specific examples set forth in the Act and
in paragraph (d)(1) of this section, the
terms would include:
(i) Facilities, materials, and operations owned or leased by Federal,
State, or local governments, including
instrumentalities or interstate agencies thereof, for which an authorized
public official has determined that a
need for security exists, as evidenced
by the establishment of security requirements utilizing private armored
car, security alarm system, or uniformed or plainclothes security personnel, or a combination thereof. Examples of such facilities, materials and
operations include:
(A) Government office buildings;
(B) Prisons and correction facilities;
(C) Public schools;
(D) Public libraries;
(E) Water supply;
(F) Military reservations, installations, posts, camps, arsenals, laboratories, Government-owned and contractor operated (GOCO) or Government-owned and Government-operated
(GOGO) industrial plants, and other
similar facilities subject to the custody, jurisdiction, or administration of
any Department of Defense (DOD) component;
(ii) Commercial and industrial assets
and operations which—
(A) Are protected pursuant to security requirements established in contracts with the United States or other
directives by a Federal agency (such as
those of defense contractors and researchers), including factories, plants,
buildings, or structures used for researching, designing, testing, manufacturing, producing, processing, repairing, assembling, storing, or distributing products or components related
to the national defense; or
(B) Are protected pursuant to security requirements imposed on registrants under the Controlled Substances Act; or
(C) Would pose a serious threat to
public health or safety in the event of
a breach of security (this would include, for example, a plant engaged in
the manufacture or processing of hazardous materials or chemicals but
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would not include a plant engaged in
the manufacture of shoes);
(iii) Public and private energy and
precious mineral facilities, supplies,
and reserves, including—
(A) Public or private power plants
and utilities;
(B) Oil or gas refineries and storage
facilities;
(C) Strategic petroleum reserves; and
(D) Major dams, such as those which
provide hydroelectric power;
(iv) Major public or private transportation and communication facilities
and operations, including—
(A) Airports;
(B) Train terminals, depots, and
switching and control facilities;
(C) Major bridges and tunnels;
(D) Communications centers, such as
receiving and transmission centers,
and control centers;
(E) Transmission and receiving operations for radio, television, and satellite signals; and
(F) Network computer systems containing data important to public
health and safety or national security;
(v) The Federal Reserve System and
stock and commodity exchanges;
(vi) Hospitals and health research facilities;
(vii) Large public events, such as political conventions and major parades,
concerts, and sporting events; and
(viii) Large enclosed shopping centers (malls).
(3) If an employer believes that ‘‘facilities, materials, or operations’’
which are not listed in this subsection
fall within the contemplated purview
of this exemption, a request for a ruling may be filed with the Administrator. A ruling that such ‘‘facilities,
materials, or operations’’ are included
within this exemption must be obtained prior to the administration of a
polygraph test or any other action prohibited by section 3 of the Act. It is not
possible to exhaustively account for all
‘‘facilities, materials, or operations’’
which fall within the purview of section 7(e) (1) (A). While it is likely that
additional entities may fall within the
exemption’s scope, any such ‘‘facilities,
materials, or operations’’ must meet
the ‘‘significant impact’’ test. Thus,
‘‘facilities, materials, or operations’’
which would be of vital importance
during periods of war or civil emergency, or whose sabotage would greatly
affect the public health or safety, could
fall within the scope of the term ‘‘significant impact’’.
(e)(1) Section 7(e)(1)(B) of the Act extends the exemption to firms whose
function includes protection of ‘‘currency, negotiable securities, precious
commodities or instruments, or proprietary information’’. These terms collectively are construed to include assets primarily handled by financial institutions such as banks, credit unions,
savings and loan institutions, stock
and commodity exchanges, brokers, or
security dealers.
(2) The terms ‘‘currency, negotiable
securities, precious commodities or instruments or proprietary information’’
refer to assets which are typically handled by, protected for and transported
between and among commercial and financial institutions. Services provided
by the armored car industry are thus
clearly within the scope of the exemption, as are security alarm and security guard services provided to financial and similar institutions of the
type referred to above. Also included
are the cash assets handled by casinos,
racetracks, lotteries, or other businesses where the cash constitutes the
inventory or stock in trade. Similarly,
security services provided to businesses
engaged in the sale or exchange of precious commodities such as gold, silver,
or diamonds, including jewelry stores
that stock such precious commodities
prior to transformation into pieces of
jewelry, are also included. The term
‘‘proprietary information’’ generally
refers to business assets such as trade
secrets, manufacturing processes, research and development data, and cost/
pricing data. Security alarm or guard
services provided to protect the premises of private homes, or businesses not
primarily engaged in handling, trading,
transferring, or storing currency, negotiable securities, precious commodities
or instruments, or proprietary information, on the other hand, are normally outside the scope of the exemption. This is true even though such
places may physically house some such
assets. However, where such security
alarm or guard service is specifically
designed or limited to the protection of
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the types of assets identified above,
whether located in businesses or residences, or elsewhere, the security services provided are within the scope of
the exemption. For example, a security
system specially designed to protect
diamonds kept in a home vault of a diamond merchant would be within the
exemption. However, a security system
installed generally to protect the
premises of the home of the same merchant would not be within the exemption. A guard sent to a client firm to
secure a restricted office in which only
proprietary research data is developed
and stored is within the scope of the
exemption. Another guard sent to the
same firm to protect the building entrance from unwanted intruders is not
within the scope of the exemption even
though the building contains the restricted room in which the proprietary
research data is developed and stored,
since the security system is not specifically designed to protect the proprietary information.
(f) An employer who falls within the
scope of the exemption is one ‘‘whose
function includes’’ protection of ‘‘facilities, materials, or operations’’, discussed in paragraph (d) of this section
or of ‘‘currency, negotiable securities,
precious commodities or instruments,
or proprietary information’’ discussed
in paragraph (e) of this section. Thus,
assuming that the employer has met
the ‘‘primary business purpose’’ test,
as set forth in paragraph (c) of this section, the employer’s operations then
must simply ‘‘include’’ protection of at
least one of the facilities within the
scope of the exemption.
(g)(1) Section 7(e)(2) provides that the
exemption shall not apply if a polygraph test is administered to a prospective employee who would not be employed to protect the ‘‘facilities, materials, operations, or assets’’ referred to
in section 7(e)(1) of the Act, and discussed in paragraphs (d) and (e) of this
section. Thus, while the exemption applies to employers whose function ‘‘includes’’ protection of certain facilities,
employers would not be permitted to
administer polygraph tests to prospective employees who are not being employed to protect such functions.
(2) The phrase ‘‘employed to protect’’
in section 7(e)(2) has reference to a
wide spectrum of prospective employees in the security industry, and includes any job applicant who would
likely protect the security of any
qualifying ‘‘facilities, materials, operations, or assets.’’
(3) In many cases, it will be readily
apparent that certain positions within
security companies would, by virtue of
the individual’s official job duties, entail ‘‘protection’’. For example, armored car drivers and guards, security
guards, and alarm system installers
and maintenance personnel all would
be employed to protect in the most direct and literal sense of the term.
(4) The scope of the exemption is not
limited, however, to those security personnel having direct, physical access to
the facilities being protected. Various
support personnel may also, as a part
of their job duties, have access to the
process of providing security services
due to the position’s exposure to
knowledge of security plans and operations, employee schedules, delivery
schedules, and other such activities.
Where a position entails the opportunity to cause or participate in a
breach of security, an employee to be
hired for the position would also be
deemed to be ‘‘employed to protect’’
the facility.
(i) For example, in the armored car
industry, the duties of personnel other
than guards and drivers may include
taking customer orders for currency
and commodity transfers, issuing security badges to guards, coordinating
routes of travel and times for pick-up
and delivery, issuing access codes to
customers, route planning and other
sensitive responsibilities. Similarly, in
the security alarm industry, several
types of employees would have access
to the process of providing security
services, such as designers of security
systems, system monitors, service
technicians, and billing clerks (where
they review the system design drawings to ensure proper customer billing).
In the security industry, generally, administrative employees may have access to customer accounts, schedules,
information relating to alarm system
failures, and other security information, such as security employee absences due to illness that create
‘‘holes’’ in a security plan. Employees
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29 CFR Ch. V (7–1–19 Edition)
of this type are a part of the overall security services provided by the employer. Such employees possess the
ability to affect, on an opportunistic
basis, the security of protected operations, by virtue of the knowledge
gained through their job duties.
(ii) On the other hand, there are certainly some types of employees in the
security industry who ‘‘would not be
employed to protect’’ the facilities or
assets within the purview of the exemption, and who would not be in the
process of providing exempt security
services. For example, custodial and
maintenance
employees
typically
would not have access, either directly
or indirectly as a part of their job duties, to the operations or clients of the
employer. Any employee whose ‘‘access’’ to secured areas or to sensitive
information is on a controlled basis,
such as by escort, would also be outside
the scope of the exemption. In cases
where security service companies also
provide janitorial, food and beverage,
or other services unrelated to security,
the exemption would clearly not extend to any employee considered for
employment in such activity.
(5) The phrase ‘‘employed to protect’’
includes any job applicant who, if not
hired specifically to protect the listed
facilities or assets, would likely be so
employed, as through a systematic assignment process, such as rotation of
work assignments or selection from a
pool of available employees, even if selection for such work is unpredictable
or infrequent. A prospective employee
whose job assignment to perform qualifying protective functions would be
made by selection from a pool of available employees (all of whom have an
equal chance of being selected), or an
employee who is to be rotated through
different job assignments which include some qualifying protective functions, is included within the exemption. However, if there is only a remote
possibility that a prospective employee, if hired, would perform exempt
protective functions, such as on an
emergency basis, or if a prospective
employee by reason of his or her position, qualifications, or level of experience or for other reasons, would when
hired, not ordinarily be assigned to
protect qualifying facilities, such an
employee would be deemed to have not
been hired to protect such facilities
and would be excluded from the exemption.
(h) Polygraph tests administered pursuant to this exemption are subject to
the limitations set forth in sections 8
and 10 of the Act, as discussed in
§§ 801.21, 801.22, 801.23, 801.24, 801.25,
801.26, and 801.35 of this part. As provided in these sections, the exemption
will apply only if certain requirements
are met. Failure to satisfy any of the
specified requirements nullifies the
statutory authority for polygraph test
administration and may subject the
employer to the assessment of civil
money penalties and other remedial actions, as provided for in section 6 of the
Act (see subpart E, § 801.42 of this part).
The administration of such tests is also
subject to State or local laws, or collective bargaining agreements, which
may either prohibit lie detectors test,
or contain more restrictive provisions
with respect to polygraph testing.
Subpart C—Restrictions on Polygraph Usage Under Exemptions
§ 801.20 Adverse employment action
under ongoing investigation exemption.
(a) Section 8(a) (1) of the Act provides
that the limited exemption in section
7(d) of the Act and § 801.12 of this part
for ongoing investigations shall not
apply if an employer discharges, disciplines, denies employment or promotion or otherwise discriminates in
any manner against a current employee based upon the analysis of a
polygraph test chart or the refusal to
take a polygraph test, without additional supporting evidence.
(b) ‘‘Additional supporting evidence’’,
for purposes of section 8(a) of the Act,
includes, but is not limited to, the following:
(1)(i) Evidence indicating that the
employee had access to the missing or
damaged property that is the subject of
an ongoing investigation; and
(ii) Evidence leading to the employer’s reasonable suspicion that the employee was involved in the incident or
activity under investigation; or
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Wage and Hour Division, Labor
§ 801.22
(2) Admissions or statements made
by an employee before, during or following a polygraph examination.
(c) Analysis of a polygraph test chart
or refusal to take a polygraph test may
not serve as a basis for adverse employment action, even with additional supporting evidence, unless the employer
observes all the requirements of sections 7(d) and 8(b) of the Act, as described in §§ 801.12, 801.22, 801.23, 801.24,
and 801.25 of this part.
§ 801.21 Adverse employment action
under security service and controlled substance exemptions.
(a) Section 8(a) (2) of the Act provides
that the security service exemption in
section 7(e) of the Act and § 801.14 of
this part and the controlled substance
exemption in section 7(f) of the Act and
§ 801.13 of this part shall not apply if an
employer discharges, disciplines, denies employment or promotion, or otherwise discriminates in any manner
against a current employee or prospective employee based solely on the analysis of a polygraph test chart or the refusal to take a polygraph test.
(b) Analysis of a polygraph test chart
or refusal to take a polygraph test may
serve as one basis for adverse employment actions of the type described in
paragraph (a) of this section, provided
that the adverse action was also based
on another bona fide reason, with supporting evidence therefor. For example, traditional factors such as prior
employment experience, education, job
performance, etc. may be used as a
basis for employment decisions. Employment decisions based on admissions or statements made by an employee or prospective employee before,
during or following a polygraph examination may, likewise, serve as a basis
for such decisions.
(c) Analysis of a polygraph test chart
or the refusal to take a polygraph test
may not serve as a basis for adverse
employment action, even with another
legitimate basis for such action, unless
the employer observes all the requirements of section 7 (e) or (f) of the Act,
as appropriate, and section 8(b) of the
Act, as described in §§ 801.13, 801.14,
801.22, 801.23, 801.24, and 801.25 of this
part.
§ 801.22 Rights of examinee—general.
(a) Pursuant to section 8(b) of the
Act, the limited exemption in section
7(d) of the Act for ongoing investigations, and the security service and controlled substance exemptions in 7(e)
and (f) of the Act (described in § 801.12,
801.13, and 801.14 of this part) shall not
apply unless all of the requirements set
forth in this section and §§ 801.23
through 801.25 of this part are met.
(b) During all phases of the polygraph
testing the person being examined has
the following rights:
(1) The examinee may terminate the
test at any time.
(2) The examinee may not be asked
any questions in a degrading or unnecessarily intrusive manner.
(3) The examinee may not be asked
any questions dealing with:
(i) Religious beliefs or affiliations;
(ii) Beliefs or opinions regarding racial matters;
(iii) Political beliefs or affiliations;
(iv) Sexual preferences or behavior;
or
(v) Beliefs, affiliations, opinions, or
lawful activities concerning unions or
labor organizations.
(4) The examinee may not be subjected to a test when there is sufficient
written evidence by a physician that
the examinee is suffering from any
medical or psychological condition or
undergoing any treatment that might
cause abnormal responses during the
actual testing phase. ‘‘Sufficient written evidence’’ shall constitute, at a
minimum, a statement by a physician
specifically describing the examinee’s
medical or psychological condition or
treatment and the basis for the physician’s opinion that the condition or
treatment might result in such abnormal responses.
(5) An employee or prospective employee who exercises the right to terminate the test, or who for medical
reasons with sufficient supporting evidence is not administered the test,
shall be subject to adverse employment
action only on the same basis as one
who refuses to take a polygraph test,
as described in §§ 801.20 and 801.21 of
this part.
(c) Any polygraph examination shall
consist of one or more pretest phases,
actual testing phases, and post-test
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§ 801.23
29 CFR Ch. V (7–1–19 Edition)
phases, which must be conducted in accordance with the rights of examinees
described in §§ 801.23 through 801.25 of
this part.
§ 801.23 Rights of examinee—pretest
phase.
(a) The pretest phase consists of the
questioning and other preparation of
the prospective examinee before the actual use of the polygraph instrument.
During the initial pretest phase, the
examinee must be:
(1) Provided with written notice, in a
language understood by the examinee,
as to when and where the examination
will take place and that the examinee
has the right to consult with counsel or
an employee representative before each
phase of the test. Such notice shall be
received by the examinee at least
forty-eight hours, excluding weekend
days and holidays, before the time of
the examination, except that a prospective employee may, at the employee’s option, give written consent to administration of a test anytime within
48 hours but no earlier than 24 hours
after receipt of the written notice. The
written notice or proof of service must
set forth the time and date of receipt
by the employee or prospective employee and be verified by his or her signature. The purpose of this requirement is to provide a sufficient opportunity prior to the examination for the
examinee to consult with counsel or an
employee representative. Provision
shall also be made for a convenient
place on the premises where the examination will take place at which the examinee may consult privately with an
attorney or an employee representative
before each phase of the test. The attorney or representative may be excluded from the room where the examination is administered during the actual testing phase.
(2) Informed orally and in writing of
the nature and characteristics of the
polygraph instrument and examination, including an explanation of the
physical operation of the polygraph instrument and the procedure used during the examination.
(3) Provided with a written notice
prior to the testing phase, in a language understood by the examinee,
which shall be read to and signed by
the examinee. Use of appendix A to this
part, if properly completed, will constitute compliance with the contents of
the notice requirement of this paragraph. If a format other than in appendix A is used, it must contain at least
the following information:
(i) Whether or not the polygraph examination area contains a two-way
mirror, a camera, or other device
through which the examinee may be
observed;
(ii) Whether or not any other device,
such as those used in conversation or
recording will be used during the examination;
(iii) That both the examinee and the
employer have the right, with the other’s knowledge, to make a recording of
the entire examination;
(iv) That the examinee has the right
to terminate the test at any time;
(v) That the examinee has the right,
and will be given the opportunity, to
review all questions to be asked during
the test;
(vi) That the examinee may not be
asked questions in a manner which degrades, or needlessly intrudes;
(vii) That the examinee may not be
asked any questions concerning religious beliefs or opinions; beliefs regarding racial matters; political beliefs
or affiliations; matters relating to sexual behavior; beliefs, affiliations, opinions, or lawful activities regarding
unions or labor organizations;
(viii) That the test may not be conducted if there is sufficient written evidence by a physician that the examinee
is suffering from a medical or psychological condition or undergoing treatment that might cause abnormal responses during the examination;
(ix) That the test is not and cannot
be required as a condition of employment;
(x) That the employer may not discharge, dismiss, discipline, deny employment or promotion, or otherwise
discriminate against the examinee
based on the analysis of a polygraph
test, or based on the examinee’s refusal
to take such a test, without additional
evidence which would support such action;
(xi)(A) In connection with an ongoing
investigation, that the additional evidence required for the employer to
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Wage and Hour Division, Labor
§ 801.24
take adverse action against the examinee, including termination, may be
evidence that the examinee had access
to the property that is the subject of
the investigation, together with evidence supporting the employer’s reasonable suspicion that the examinee
was involved in the incident or activity
under investigation;
(B) That any statement made by the
examinee before or during the test may
serve as additional supporting evidence
for an adverse employment action, as
described in paragraph (a)(3)(x) of this
section, and that any admission of
criminal conduct by the examinee may
be transmitted to an appropriate government law enforcement agency;
(xii) That information acquired from
a polygraph test may be disclosed by
the examiner or by the employer only:
(A) To the examinee or any other
person specifically designated in writing by the examinee to receive such information;
(B) To the employer that requested
the test;
(C) To a court, governmental agency,
arbitrator, or mediator pursuant to a
court order;
(D) To a U.S. Department of Labor
official when specifically designated in
writing by the examinee to receive
such information;
(E) By the employer, to an appropriate governmental agency without a
court order where, and only insofar as,
the information disclosed is an admission of criminal conduct;
(xiii) That if any of the examinee’s
rights or protections under the law are
violated, the examinee has the right to
file a complaint with the Wage and
Hour Division of the U.S. Department
of Labor, or to take action in court
against the employer. Employers who
violate this law are liable to the affected examinee, who may recover such
legal or equitable relief as may be appropriate, including, but not limited
to, employment, reinstatement, and
promotion, payment of lost wages and
benefits, and reasonable costs, including attorney’s fees. The Secretary of
Labor may also bring action to obtain
compliance with the Act, and may assess civil money penalties against the
employer;
(xiv) That the examinee has the right
to obtain and consult with legal counsel or other representative before each
phase of the test, although the legal
counsel or representative may be excluded from the room where the test is
administered during the actual testing
phase.
(xv) That the employee’s rights under
the Act may not be waived, either voluntarily or involuntarily, by contract
or otherwise, except as part of a written settlement to a pending action or
complaint under the Act, agreed to and
signed by the parties.
(b) During the initial or any subsequent pretest phases, the examinee
must be given the opportunity, prior to
the actual testing phase, to review all
questions in writing that the examiner
will ask during each testing phase.
Such questions may be presented at
any point in time prior to the testing
phase.
§ 801.24 Rights of examinee—actual
testing phase.
(a) The actual testing phase refers to
that time during which the examiner
administers the examination by using
a polygraph instrument with respect to
the examinee and then analyzes the
charts derived from the test. Throughout the actual testing phase, the examiner shall not ask any question that
was not presented in writing for review
prior to the testing phase. An examiner
may, however, recess the testing phase
and return to the pre-test phase to review additional relevant questions with
the examinee. In the case of an ongoing
investigation, the examiner shall ensure that all relevant questions (as distinguished from technical baseline
questions) pertain to the investigation.
(b) No testing period subject to the
provisions of the Act shall be less than
ninety minutes in length. Such ‘‘test
period’’ begins at the time that the examiner begins informing the examinee
of the nature and characteristics of the
examination and the instruments involved, as prescribed in section 8(b)
(2)(B) of the Act and § 801.23 (a)(2) of
this part, and ends when the examiner
completes the review of the test results
with the examinee as provided in
§ 801.25 of this part. The ninety-minute
minimum duration shall not apply if
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§ 801.25
29 CFR Ch. V (7–1–19 Edition)
the examinee voluntarily acts to terminate the test before the completion
thereof, in which event the examiner
may not render an opinion regarding
the employee’s truthfulness.
§ 801.25 Rights of examinee—post-test
phase.
(a) The post-test phase refers to any
questioning or other communication
with the examinee following the use of
the polygraph instrument, including
review of the results of the test with
the examinee. Before any adverse employment action, the employer must:
(1) Further interview the examinee
on the basis of the test results; and
(2) Give to the examinee a written
copy of any opinions or conclusions
rendered in response to the test, as
well as the questions asked during the
test, with the corresponding charted
responses. The term ‘‘corresponding
charted responses’’ refers to copies of
the entire examination charts recording the employee’s physiological responses, and not just the examiner’s
written report which describes the
examinee’s responses to the questions
as ‘‘charted’’ by the instrument.
§ 801.26 Qualifications of and requirements for examiners.
(a) Section 8 (b) and (c) of the Act
provides that the limited exemption in
section 7(d) of the Act for ongoing investigations, and the security service
and controlled substances exemptions
in section 7 (e) and (f) of the Act, shall
not apply unless the person conducting
the polygraph examination meets specified qualifications and requirements.
(b) An examiner must meet the following qualifications:
(1) Have a valid current license, if required by the State in which the test is
to be conducted; and
(2) Carry a minimum bond of $50,000
provided by a surety incorporated
under the laws of the United States or
of any State, which may under those
laws guarantee the fidelity of persons
holding positions of trust, or carry an
equivalent amount of professional liability coverage.
(c) An examiner must also, with respect to examinees identified by the
employer pursuant to § 801.30(c) of this
part:
(1) Observe all rights of examinees, as
set out in §§ 801.22, 801.23, 801.24, and
801.25 of this part;
(2) Administer no more than five
polygraph examinations in any one calendar day on which a test or tests subject to the provisions of EPPA are administered, not counting those instances where an examinee voluntarily
terminates an examination prior to the
actual testing phase;
(3) Administer no polygraph examination subject to the provisions of the
Act which is less than ninety minutes
in duration, as described in § 801.24(b) of
this part;
(4) Render any opinion or conclusion
regarding truthfulness or deception in
writing. Such opinion or conclusion
must be based solely on the polygraph
test results. The written report shall
not contain any information other
than admissions, information, case
facts, and interpretation of the charts
relevant to the stated purpose of the
polygraph test and shall not include
any recommendation concerning the
employment of the examinee; and
(5) Maintain all opinions, reports,
charts, written questions, lists, and
other records relating to the test, including
statements
signed
by
examinees advising them of rights
under the Act (as described in § 801.23
(a)(3) of this part) and any electronic
recordings of examinations, for at least
three years from the date of the administration of the test. (See § 801.30 of this
part for recordkeeping requirements.)
Subpart D—Recordkeeping and
Disclosure Requirements
§ 801.30 Records to be preserved for 3
years.
(a) The following records shall be
kept for a minimum period of three
years from the date the polygraph examination is conducted (or from the
date the examination is requested if no
examination is conducted):
(1) Each employer who requests an
employee to submit to a polygraph examination in connection with an ongoing investigation involving economic
loss or injury shall retain a copy of the
statement that sets forth the specific
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Wage and Hour Division, Labor
§ 801.35
incident or activity under investigation and the basis for testing that particular employee, as required by section 7(d)(4) of the Act and described in
§ 801.12 (a)(4) of this part.
(2) Each employer who administers a
polygraph examination under the exemption provided by section 7(f) of the
Act (described in § 801.13 of this part) in
connection with an ongoing investigation of criminal or other misconduct
involving, or potentially involving,
loss or injury to the manufacture, distribution or dispensing of a controlled
substance, shall retain records specifically identifying the loss or injury in
question and the nature of the employee’s access to the person or property
that is the subject of the investigation.
(3) Each employer who requests an
employee or prospective employee to
submit to a polygraph examination
pursuant to any of the exemptions
under section 7(d), (e) or (f) of the Act
(described in §§ 801.12, 801.13, and 801.14)
shall retain a copy of the written statement that sets forth the time and place
of the examination and the examinee’s
right to consult with counsel, as required by section 8 (b)(2)(A) of the Act
and described in § 801.23(a)(1) of this
part.
(4) Each employer shall identify in
writing to the examiner persons to be
examined pursuant to any of the exemptions under section 7 (d), (e) or (f)
of the Act (described in §§ 801.12, 801.13,
and 801.14 of this part), and shall retain
a copy of such notice.
(5) Each employer who retains an examiner to administer examinations
pursuant to any of the exemptions
under section 7 (d), (e) or (f) of the Act
(described in §§ 801.12, 801.13, and 801.14
of this part) shall maintain copies of
all opinions, reports or other records
furnished to the employer by the examiner relating to such examinations.
(6) Each examiner retained to administer examinations to persons identified by employers under paragraph
(a)(4) of this section shall maintain all
opinions, reports, charts, written questions, lists, and other records relating
to polygraph tests of such persons. In
addition, the examiner shall maintain
records of the number of examinations
conducted during each day in which
one or more tests are conducted pursu-
ant to the Act, and, with regard to
tests administered to persons identified by their employer under paragraph
(a)(4) of this section, the duration of
each test period, as defined in § 801.24(b)
of this part.
(b) Each employer shall keep the
records required by this part safe and
accessible at the place or places of employment or at one or more established
central recordkeeping offices where
employment records are customarily
maintained. If the records are maintained at a central recordkeeping office, other than in the place or places
of employment, such records shall be
made available within 72 hours following notice from the Secretary or an
authorized representative.
(c) Each examiner shall keep the
records required by this part safe and
accessible at the place or places of
business or at one or more established
central recordkeeping offices where examination records are customarily
maintained. If the records are maintained at a central recordkeeping office, other than in the place or places
of business, such records shall be made
available within 72 hours following notice from the Secretary or an authorized representative.
(d) All records shall be available for
inspection and copying by the Secretary or an authorized representative.
Information for which disclosure is restricted under section 9 of the Act and
§ 801.35 of this part shall be made available to the Secretary or the Secretary’s representative where the examinee has designated the Secretary,
in writing, to receive such information,
or by order of a court of competent jurisdiction.
(Approved by the Office of Management and
Budget under control number 1235–0005)
[56 FR 9064, Mar. 4, 1991, as amended at 82 FR
2230, Jan. 9, 2017]
§ 801.35 Disclosure of test information.
Section 9 of the Act prohibits the unauthorized disclosure of any information obtained during a polygraph test
by any person, other than the examinee, directly or indirectly, except as
follows:
(a) A polygraph examiner or an employer (other than an employer exempt
under section 7 (a), (b), or (c) of the Act
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§ 801.40
29 CFR Ch. V (7–1–19 Edition)
(described in §§ 801.10 and 801.11 of this
part)) may disclose information acquired from a polygraph test only to:
(1) The examinee or an individual
specifically designated in writing by
the examinee to receive such information;
(2) The employer that requested the
polygraph test pursuant to the provisions of this Act (including management personnel of the employer where
the disclosure is relevant to the carrying out of their job responsibilities);
(3) Any court, governmental agency,
arbitrator, or mediator pursuant to an
order from a court of competent jurisdiction requiring the production of
such information;
(4) The Secretary of Labor, or the
Secretary’s representative, when specifically designated in writing by the
examinee to receive such information.
(b) An employer may disclose information from the polygraph test at any
time to an appropriate governmental
agency without the need of a court
order where, and only insofar as, the
information disclosed is an admission
of criminal conduct.
(c) A polygraph examiner may disclose test charts, without identifying
information (but not other examination materials and records), to another
examiner(s) for examination and analysis, provided that such disclosure is
for the sole purpose of consultation and
review of the initial examiner’s opinion
concerning the indications of truthfulness or deception. Such action would
not constitute disclosure under this
part provided that the other examiner
has no direct or indirect interest in the
matter.
Subpart E—Enforcement
§ 801.40 General.
(a) Whenever the Secretary believes
that the provisions of the Act or these
regulations have been violated, such
action shall be taken and such proceedings instituted as deemed appropriate, including the following:
(1) Petitioning any appropriate District Court of the United States for
temporary or permanent injunctive relief to restrain violation of the provisions of the Act or this part by any person, and to require compliance with
the Act and this part, including such
legal or equitable relief incident thereto as may be appropriate, including,
but not limited to, employment, reinstatement, promotion, and the payment of lost wages and benefits;
(2) Assessing a civil penalty against
any employer who violates any provision of the Act or this part in an
amount of not more than $10,000 for
each violation, in accordance with regulations set forth in this part; or
(3) Referring any unpaid civil money
penalty which has become a final and
unappealable order of the Secretary or
a final judgment of a court in favor of
the Secretary to the Attorney General
for recovery.
(b)(1) Any employer who violates this
Act shall be liable to the employee or
prospective employee affected by such
violation for such legal or equitable relief as may be appropriate, including,
but not limited to, employment, reinstatement, promotion, and the payment of lost wages and benefits.
(2) An action under this subsection
may be maintained against the employer in any Federal or State court of
competent jurisdiction by an employee
or prospective employee for or on behalf of such employee, prospective employee and others similarly situated.
Such action must be commenced within a period not to exceed 3 years after
the date of the alleged violation. The
court, in its discretion, may allow reasonable costs (including attorney’s
fees) to the prevailing party.
(c) The taking of any one of the actions referred to in paragraph (a) of
this section shall not be a bar to the
concurrent taking of any other appropriate action.
§ 801.41 Representation
retary.
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(a) Except as provided in section
518(a) of title 28, U.S. Code, relating to
litigation before the Supreme Court,
the Solicitor of Labor may appear for
and represent the Secretary in any
civil litigation brought under section 6
of the Act, as described in § 801.40 of
this part.
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Wage and Hour Division, Labor
§ 801.43
(b) The Solicitor of Labor, through
authorized representatives, shall represent the Administrator in all administrative hearings under the provisions
of section 6 of the Act and this part.
§ 801.42 Civil money penalties—assessment.
(a) A civil money penalty in an
amount not to exceed $21,039 for any
violation may be assessed against any
employer for:
(1) Requiring, requesting, suggesting
or causing an employee or prospective
employee to take a lie detector test or
using, accepting, referring to or inquiring about the results of any lie detector test of any employee or prospective
employee, other than as provided in
the Act or this part;
(2) Taking an adverse action or discriminating in any manner against any
employee or prospective employee on
the basis of the employee’s or prospective employee’s refusal to take a lie detector test, other than as provided in
the Act or this part;
(3) Discriminating or retaliating
against an employee or prospective employee for the exercise of any rights
under the Act;
(4) Disclosing information obtained
during a polygraph test, except as authorized by the Act or this part;
(5) Failing to maintain the records
required by the Act or this part;
(6) Resisting, opposing, impeding, intimidating, or interfering with an official of the Department of Labor during
the performance of an investigation,
inspection, or other law enforcement
function under the Act or this part; or
(7) Violating any other provision of
the Act or this part.
(b) In determining the amount of
penalty to be assessed for any violation
of the Act or this part, the Administrator will consider the previous record
of the employer in terms of compliance
with the Act and regulations, the gravity of the violations, and other pertinent factors. The matters which may
be considered include, but are not limited to, the following:
(1) Previous history of investigation(s) or violation(s) of the Act or this
part;
(2) The number of employees or prospective employees affected by the violation or violations;
(3) The seriousness of the violation or
violations;
(4) Efforts made in good faith to comply with the provisions of the Act and
this part;
(5) If the violations resulted from the
actions or inactions of an examiner,
the steps taken by the employer to ensure the examiner complied with the
Act and the regulations in this part,
and the extent to which the employer
could reasonably have foreseen the examiner’s actions or inactions;
(6) The explanation of the employer,
including whether the violations were
the result of a bona fide dispute of
doubtful legal certainty;
(7) The extent to which the employee(s) or prospective employee(s)
suffered loss or damage;
(8) Commitment to future compliance, taking into account the public
interest and whether the employer has
previously violated the provisions of
the Act or this part.
[56 FR 9064, Mar. 4, 1991; 56 FR 14469, Apr. 10,
1991, as amended at 81 FR 43452, July 1, 2016;
82 FR 5382, Jan. 18, 2017; 83 FR 13, Jan. 2, 2018;
84 FR 219, Jan. 23, 2019]
§ 801.43 Civil money penalties—payment and collection.
Where the assessment is directed in a
final order of the Department, the
amount of the penalty is immediately
due and payable to the United States
Department of Labor. The person assessed such penalty shall remit
promptly the amount thereof as finally
determined, to the Administrator by
certified check or by money order,
made payable to the order of ‘‘Wage
and Hour Division, Labor’’. The remittance shall be delivered or mailed to
the Wage and Hour Division Regional
Office for the area in which the violations occurred.
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§ 801.50
29 CFR Ch. V (7–1–19 Edition)
Subpart F—Administrative
Proceedings
GENERAL
§ 801.50 Applicability
and rules.
of
procedures
The procedures and rules contained
in this subpart prescribe the administrative process for assessment of civil
money penalties for violations of the
Act or of these regulations.
PROCEDURES RELATING TO HEARING
§ 801.51 Written notice of determination required.
Whenever the Administrator determines to assess a civil money penalty
for a violation of the Act or this part,
the person against whom such penalty
is assessed shall be notified in writing
of such determination. Such notice
shall be served in person or by certified
mail.
§ 801.52
Contents of notice.
The notice required by § 801.51 of this
part shall:
(a) Set forth the determination of the
Administrator and the reason or reasons therefor;
(b) Set forth a description of each
violation and the amount assessed for
each violation;
(c) Set forth the right to request a
hearing on such determination;
(d) Inform any affected person or persons that in the absence of a timely request for a hearing, the determination
of the Administrator shall become
final and unappealable; and
(e) Set forth the time and method for
requesting a hearing, and the procedures relating thereto, as set forth in
§ 801.53 of this part.
§ 801.53
Request for hearing.
(a) Any person desiring to request an
administrative hearing on a civil
money penalty assessment pursuant to
this part shall make such request in
writing to the official who issued the
determination at the Wage and Hour
Division address appearing on the determination notice, no later than 30
days after the date of receipt of the notice referred to in § 801.51 of this part.
(b) The request for hearing must be
received by the Administrator at the
address set forth in the notice issued
pursuant to § 801.52 of this part, within
the time set forth in paragraph (a) of
this section. For the affected person’s
protection, if the request is by mail, it
should be by certified mail, return receipt requested.
(c) No particular form is prescribed
for any request for hearing permitted
by this subpart. However, any such request shall:
(1) Be typewritten or legibly written;
(2) Specify the issue or issues stated
in the notice of determination giving
rise to such request;
(3) State the specific reason or reasons why the person requesting the
hearing believes such determination is
in error;
(4) Be signed by the person making
the request or by an authorized representative of such person; and
(5) Include the address at which such
person or authorized representative desires to receive further communications relating thereto.
[56 FR 9064, Mar. 4, 1991; 56 FR 14469, Apr. 10,
1991, as amended at 60 FR 46531, Sept. 7, 1995]
RULES OF PRACTICE
§ 801.58 General.
Except as provided in this subpart,
and to the extent they do not conflict
with the provisions of this subpart, the
‘‘Rules of Practice and Procedure for
Administrative Hearings Before the Office of Administrative Law Judges’’ established by the Secretary at 29 CFR
part 18 shall apply to administrative
proceedings under this subpart.
§ 801.59 Service and computation of
time.
(a) Service of documents under this
subpart shall be made by personal service to the individual, officer of a corporation, or attorney of record or by
mailing the determination to the last
known address of the individual, officer, or attorney. If done by certified
mail, service is complete upon mailing.
If done by regular mail, service is complete upon receipt by addressee.
(b) Two (2) copies of all pleadings and
other documents required for any administrative proceeding provided by
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Wage and Hour Division, Labor
§ 801.66
this part shall be served on the attorneys for the Department of Labor. One
copy shall be served on the Associate
Solicitor, Division of Fair Labor
Standards, Office of the Solicitor, U.S.
Department of Labor, 200 Constitution
Avenue NW., Washington, DC 20210, and
one copy on the Attorney representing
the Department in the proceeding.
(c) Time will be computed beginning
with the day following the action and
includes the last day of the period unless it is a Saturday, Sunday, or federally-observed holiday, in which case
the time period includes the next business day.
(d) When a request for hearing is
served by mail, five (5) days shall be
added to the prescribed period during
which the party has the right to request a hearing on the determination.
§ 801.60
Commencement of proceeding.
Each administrative proceeding permitted under the Act and these regulations shall be commenced upon receipt
of a timely request for hearing filed in
accordance with § 801.53 of this part.
§ 801.61
Designation of record.
(a) Each administrative proceeding
instituted under the Act and this part
shall be identified of record by a number preceded by the year and the letters ‘‘EPPA’’.
(b) The number, letter, and designation assigned to each such proceeding
shall be clearly displayed on each
pleading, motion, brief, or other formal
document filed and docketed of record.
§ 801.62
REFERRAL FOR HEARING
§ 801.63 Referral to Administrative
Law Judge.
(a) Upon receipt of a timely request
for a hearing filed pursuant to and in
accordance with § 801.53 of this part,
the Administrator, by the Associate
Solicitor for the Division of Fair Labor
Standards or by the Regional Solicitor
for the Region in which the action
arose, shall by Order of Reference,
promptly refer a copy of the notice of
administrative determination complained of, and the original or a duplicate copy of the request for hearing
signed by the person requesting such
hearing or the authorized representative of such person, to the Chief Administrative Law Judge, for a determination in an administrative proceeding as provided herein. The notice
of administrative determination and
request for hearing shall be filed of
record in the Office of the Chief Administrative Law Judge and shall, respectively, be given the effect of a complaint and answer thereto for purposes
of the administrative proceeding, subject to any amendment that may be
permitted under this part.
(b) A copy of the Order of Reference,
together with a copy of this part, shall
be served by counsel for the Secretary
upon the person requesting the hearing, in the manner provided in 29 CFR
18.3.
§ 801.64 Notice of docketing.
The Chief Administrative Law Judge
shall promptly notify the parties of the
docketing of each matter.
PROCEDURES BEFORE ADMINISTRATIVE
LAW JUDGE
Caption of proceeding.
(a) Each administrative proceeding
instituted under the Act and this part
shall be captioned in the name of the
person requesting such hearing, and
shall be styled as follows:
In Matter of llllllllll, Respondent.
§ 801.65 Appearances; representation
of the Department of Labor.
The Associate Solicitor, Division of
Fair Labor Standards, or Regional Solicitor shall represent the Department
in any proceeding under this part.
(b) For the purposes of administrative proceedings under the Act and this
part the ‘‘Secretary of Labor’’ shall be
identified as plaintiff and the person
requesting such hearing shall be named
as respondent.
§ 801.66 Consent findings and order.
(a) General. At any time after the
commencement of a proceeding under
this part, but prior to the reception of
evidence in any such proceeding, a
party may move to defer the receipt of
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§ 801.67
29 CFR Ch. V (7–1–19 Edition)
any evidence for a reasonable time to
permit negotiation of an agreement
containing consent findings and an
order disposing of the whole or any
part of the proceeding. The allowance
of such deferment and the duration
thereof shall be at the discretion of the
Administrative Law Judge, after consideration of the nature of the proceeding, the requirements of the public
interest, the representations of the
parties, and the probability of an
agreement being reached which will result in a just disposition of the issues
involved.
(b) Content. Any agreement containing consent findings and an order
disposing of a proceeding or any part
thereof shall also provide:
(1) That the order shall have the
same force and effect as an order made
after full hearing;
(2) That the entire record on which
any order may be based shall consist
solely of the notice of administrative
determination (or amended notice, if
one is filed), and the agreement;
(3) A waiver of any further procedural steps before the Administrative
Law Judge; and
(4) A waiver of any right to challenge
or contest the validity of the findings
and order entered into, in accordance
with the agreement.
(c) Submission. On or before the expiration of the time granted for negotiations, the parties or their authorized
representatives or their counsel may:
(1) Submit the proposed agreement
for consideration by the Administrative Law Judge; or
(2) Inform the Administrative Law
Judge that agreement cannot be
reached.
(d) Disposition. In the event an agreement containing consent findings and
an order is submitted within the time
allowed therefor, the Administrative
Law Judge, within thirty (30) days
thereafter, shall, if satisfied with its
form and substance, accept such agreement by issuing a decision based upon
the agreed findings.
set for filing proposed findings and related papers, a decision on the issues
referred by the Secretary.
(b) The decision of the Administrative Law Judge shall be limited to a determination whether the respondent
has violated the Act or these regulations and the appropriateness of the
remedy or remedies imposed by the
Secretary. The Administrative Law
Judge shall not render determinations
on the legality of a regulatory provision or the constitutionality of a statutory provision.
(c) The decision of the Administrative Law Judge, for purposes of the
Equal Access to Justice Act (5 U.S.C.
504), shall be limited to determinations
of attorney fees and/or other litigation
expenses in adversary proceedings requested pursuant to § 801.53 of this part
which involve the imposition of a civil
money penalty assessed for a violation
of the Act or this part.
(d) The decision of the Administrative Law Judge shall include a statement of findings and conclusions, with
reasons and basis therefor, upon each
material issue presented on the record.
The decision shall also include an appropriate order which may be to affirm, deny, reverse, or modify, in whole
or in part, the determination of the
Secretary. The reason or reasons for
such order shall be stated in the decision.
(e) The Administrative Law Judge
shall serve copies of the decision on
each of the parties.
(f) If any party desires review of the
decision of the Administrative Law
Judge, a petition for issuance of a Notice of Intent shall be filed in accordance with § 801.69 of this subpart.
(g) The decision of the Administrative Law Judge shall constitute the
final order of the Secretary unless the
Secretary, pursuant to § 801.70 of this
subpart issues a Notice of Intent to
Modify or Vacate the Decision and
Order.
§ 801.67 Decision and Order of Administrative Law Judge.
(a) The Administrative Law Judge
shall prepare, as promptly as practicable after the expiration of the time
[56 FR 9064, Mar. 4, 1991; 56 FR 14469, Apr. 10,
1991]
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Wage and Hour Division, Labor
§ 801.71
MODIFICATION OR VACATION OF DECISION
AND ORDER OF ADMINISTRATIVE LAW
JUDGE
§ 801.68 Authority of the Secretary.
(a) The Secretary may modify or vacate the Decision and Order of the Administrative Law Judge whenever the
Secretary concludes that the Decision
and Order:
(1) Is inconsistent with a policy or
precedent established by the Department of Labor;
(2) Encompasses determinations not
within the scope of the authority of the
Administrative Law Judge;
(3) Awards attorney fees and/or other
litigation expenses pursuant to the
Equal Access to Justice Act which are
unjustified or excessive; or
(4) Otherwise warrants modifying or
vacating.
(b) The Secretary may modify or vacate a finding of fact only where the
Secretary determines that the finding
is clearly erroneous.
§ 801.69 Procedures for initiating review.
(a) Within twenty (20) days after the
date of the decision of the Administrative Law Judge, the respondent, the
Administrator, or any other party desiring review thereof, may file with the
Secretary an original and two copies of
a petition for issuance of a Notice of
Intent as described under § 801.70. The
petition shall be in writing and shall
contain a concise and plain statement
specifying the grounds on which review
is sought. A copy of the Decision and
Order of the Administrative Law Judge
shall be attached to the petition.
(b) Copies of the petition shall be
served upon all parties to the proceeding and on the Chief Administrative Law Judge.
[56 FR 9064, Mar. 4, 1991; 56 FR 14469, Apr. 10,
1991]
§ 801.70 Implementation by the Secretary.
(a) Review of the Decision and Order
by the Secretary shall not be a matter
of right but of the sound discretion of
the Secretary. At any time within 30
days after the issuance of the Decision
and Order of the Administrative Law
Judge the Secretary may, upon the
Secretary’s own motion or upon the acceptance of a party’s petition, issue a
Notice of Intent to modify or vacate
the Decision and Order in question.
(b) The Notice of Intent to Modify or
Vacate a Decision and Order shall
specify the issue or issues to be considered, the form in which submission
shall be made (i.e., briefs, oral argument, etc.), and the time within which
such presentation shall be submitted.
The Secretary shall closely limit the
time within which the briefs must be
filed or oral presentations made, so as
to avoid unreasonable delay.
(c) The Notice of Intent shall be
issued within thirty (30) days after the
date of the Decision and Order in question.
(d) Service of the Notice of Intent
shall be made upon each party to the
proceeding, and upon the Chief Administrative Law Judge, in person or by
certified mail.
§ 801.71
Filing and service.
(a) Filing. All documents submitted
to the Secretary shall be filed with the
Secretary of Labor, U.S. Department of
Labor, Washington, DC 20210.
(b) Number of copies. An original and
two copies of all documents shall be
filed.
(c) Computation of time for delivery
by mail. Documents are not deemed
filed with the Secretary until actually
received by the Secretary. All documents, including documents filed by
mail, must be received by the Secretary either on or before the due date.
No additional time shall be added
where service of a document requiring
action within a prescribed time thereafter was made by mail.
(d) Manner and proof of service. A
copy of all documents filed with the
Secretary shall be served upon all
other parties involved in the proceeding. Service under this section
shall be by personal delivery or by
mail. Service by mail is deemed effected at the time of mailing to the
last known address.
[56 FR 9064, Mar. 4, 1991; 56 FR 14469, Apr. 10,
1991]
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§ 801.72
29 CFR Ch. V (7–1–19 Edition)
§ 801.72 Responsibility of the Office of
Administrative Law Judges.
Upon receipt of the Secretary’s Notice of Intent to Modify or Vacate the
Decision and Order of an Administrative Law Judge, the Chief Administrative Law Judge shall, within fifteen
(15) days, forward a copy of the complete hearing record to the Secretary.
§ 801.73 Final
retary.
decision
of
the
Sec-
The Secretary’s final Decision and
Order shall be served upon all parties
and the Chief Administrative Law
Judge.
RECORD
§ 801.74
Retention of official record.
The official record of every completed administrative hearing provided
by this part shall be maintained and
filed under the custody and control of
the Chief Administrative Law Judge.
§ 801.75
Certification of official record.
Upon receipt of timely notice of appeal to a United States District Court
of a Decision and Order issued under
this part, the Chief Administrative
Law Judge shall promptly certify and
file with the appropriate United States
District Court, a full, true, and correct
copy of the entire record, including the
transcript of proceedings.
APPENDIX A TO PART 801—NOTICE TO
EXAMINEE
Section 8(b) of the Employee Polygraph
Protection Act, and Department of Labor
regulations (29 CFR 801.22, 801.23, 801.24, and
801.25) require that you be given the following information before taking a polygraph examination:
1. (a) The polygraph examination area
[does] [does not] contain a two-way mirror, a
camera, or other device through which you
may be observed.
(b) Another device, such as those used in
conversation or recording, [will] [will not] be
used during the examination.
(c) Both you and the employer have the
right, with the other’s knowledge, to record
electronically the entire examination.
2. (a) You have the right to terminate the
test at any time.
(b) You have the right, and will be given
the opportunity, to review all questions to
be asked during the test.
(c) You may not be asked questions in a
manner which degrades, or needlessly intrudes.
(d) You may not be asked any questions
concerning: Religious beliefs or opinions; beliefs regarding racial matters; political beliefs or affiliations; matters relating to sexual preference or behavior; beliefs, affiliations, opinions, or lawful activities regarding unions or labor organizations.
(e) The test may not be conducted if there
is sufficient written evidence by a physician
that you are suffering from a medical or psychological condition or undergoing treatment that might cause abnormal responses
during the examination.
(f) You have the right to consult with legal
counsel or other representative before each
phase of the test, although the legal counsel
or other representative may be excluded
from the room where the test is administered during the actual testing phase.
3. (a) The test is not and cannot be required as a condition of employment.
(b) The employer may not discharge, dismiss, discipline, deny employment or promotion, or otherwise discriminate against
you based on the analysis of a polygraph
test, or based on your refusal to take such a
test without additional evidence which
would support such action.
(c)(1) In connection with an ongoing investigation, the additional evidence required for
an employer to take adverse action against
you, including termination, may be (A) evidence that you had access to the property
that is the subject of the investigation, together with (B) the evidence supporting the
employer’s reasonable suspicion that you
were involved in the incident or activity
under investigation.
(2) Any statement made by you before or
during the test may serve as additional supporting evidence for an adverse employment
action, as described in 3(b) above, and any
admission of criminal conduct by you may
be transmitted to an appropriate government law enforcement agency.
4. (a) Information acquired from a polygraph test may be disclosed by the examiner
or by the employer only:
(1) To you or any other person specifically
designated in writing by you to receive such
information;
(2) To the employer that requested the
test;
(3) To a court, governmental agency, arbitrator, or mediator that obtains a court
order;
(4) To a U.S. Department of Labor official
when specifically designated in writing by
you to receive such information.
(b) Information acquired from a polygraph
test may be disclosed by the employer to an
appropriate governmental agency without a
court order where, and only insofar as, the
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Wage and Hour Division, Labor
Pt. 825
information disclosed is an admission of
criminal conduct.
5. If any of your rights or protections
under the law are violated, you have the
right to file a complaint with the Wage and
Hour Division of the U.S. Department of
Labor, or to take action in court against the
employer. Employers who violate this law
are liable to the affected examinee, who may
recover such legal or equitable relief as may
be appropriate, including, but not limited to,
employment, reinstatement, and promotion,
payment of lost wages and benefits, and reasonable costs, including attorney’s fees. The
Secretary of Labor may also bring action to
restrain violations of the Act, or may assess
civil money penalties against the employer.
6. Your rights under the Act may not be
waived, either voluntarily or involuntarily,
by contract or otherwise, except as part of a
written settlement to a pending action or
complaint under the Act, and agreed to and
signed by the parties.
I acknowledge that I have received a copy
of the above notice, and that it has been read
to me.
llllllllllllllllllllllll
(Date)
llllllllllllllllllllllll
(Signature)
[56 FR 9064, Mar. 4, 1991; 56 FR 14469, Apr. 10,
1991]
PART 825—THE FAMILY AND
MEDICAL LEAVE ACT OF 1993
Subpart A—Coverage Under the Family
and Medical Leave Act
Sec.
825.100 The Family and Medical Leave Act.
825.101 Purpose of the Act.
825.102 Definitions.
825.103 [Reserved]
825.104 Covered employer.
825.105 Counting employees for determining
coverage.
825.106 Joint employer coverage.
825.107 Successor in interest coverage.
825.108 Public agency coverage.
825.109 Federal agency coverage.
825.110 Eligible employee.
825.111 Determining whether 50 employees
are employed within 75 miles.
825.112 Qualifying reasons for leave, general
rule.
825.113 Serious health condition.
825.114 Inpatient care.
825.115 Continuing treatment.
825.116–825.118 [Reserved]
825.119 Leave for treatment of substance
abuse.
825.120 Leave for pregnancy or birth.
825.121 Leave for adoption or foster care.
825.122 Definitions of covered servicemember, spouse, parent, son or daughter, next
of kin of a covered servicemember, adoption, foster care, son or daughter on covered active duty or call to covered active
duty status, son or daughter of a covered
servicemember, and parent of a covered
servicemember.
825.123 Unable to perform the functions of
the position.
825.124 Needed to care for a family member
or covered servicemember.
825.125 Definition of health care provider.
825.126 Leave because of a qualifying exigency.
825.127 Leave to care for a covered servicemember with a serious injury or illness
(military caregiver leave).
Subpart B—Employee Leave Entitlements
Under the Family and Medical Leave Act
825.200 Amount of leave.
825.201 Leave to care for a parent.
825.202 Intermittent leave or reduced leave
schedule.
825.203 Scheduling of intermittent or reduced schedule leave.
825.204 Transfer of an employee to an alternative position during intermittent leave
or reduced schedule leave.
825.205 Increments of FMLA leave for intermittent or reduced schedule leave.
825.206 Interaction with the FLSA.
825.207 Substitution of paid leave.
825.208 [Reserved]
825.209 Maintenance of employee benefits.
825.210 Employee payment of group health
benefit premiums.
825.211 Maintenance
of
benefits
under
multi-employer health plans.
825.212 Employee failure to pay health plan
premium payments.
825.213 Employer recovery of benefit costs.
825.214 Employee right to reinstatement.
825.215 Equivalent position.
825.216 Limitations on an employee’s right
to reinstatement.
825.217 Key employee, general rule.
825.218 Substantial and grievous economic
injury.
825.219 Rights of a key employee.
825.220 Protection for employees who request leave or otherwise assert FMLA
rights.
Subpart C—Employee and Employer Rights
and Obligations Under the Act
825.300 Employer notice requirements.
825.301 Designation of FMLA leave.
825.302 Employee notice requirements for
foreseeable FMLA leave.
825.303 Employee notice requirements for
unforeseeable FMLA leave.
825.304 Employee failure to provide notice.
825.305 Certification, general rule.
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§ 825.100
29 CFR Ch. V (7–1–19 Edition)
825.306 Content of medical certification for
leave taken because of an employee’s
own serious health condition or the serious health condition of a family member.
825.307 Authentication and clarification of
medical certification for leave taken because of an employee’s own serious
health condition or the serious health
condition of a family member; second
and third opinions
825.308 Recertifications for leave taken because of an employee’s own serious
health condition or the serious health
condition of a family member.
825.309 Certification for leave taken because
of a qualifying exigency.
825.310 Certification for leave taken to care
for a covered servicemember (military
caregiver leave).
825.311 Intent to return to work.
825.312 Fitness-for-duty certification.
825.313 Failure to provide certification.
825.702 Interaction with Federal and State
anti-discrimination laws.
Subpart H—Definitions Special Rules Applicable to Airline Flight Crew Employees
825.800 Definitions. Special rules for airline
flight crew employees, general.
825.801 Special rules for airline flight crew
employees, hours of service requirement.
825.802 Special rules for airline flight crew
employees, calculation of leave.
825.803 Special rules for airline flight crew
employees, recordkeeping requirements.
AUTHORITY: 29 U.S.C. 2654; 28 U.S.C. 2461
Note (Federal Civil Penalties Inflation Adjustment Act of 1990); and Pub. L. 114–74 at
§ 701.
SOURCE: 78 FR 8902, Feb. 6, 2013, unless otherwise noted.
Subpart A—Coverage Under the
Family and Medical Leave Act
Subpart D—Enforcement Mechanisms
825.400 Enforcement, general rules.
825.401 Filing a complaint with the Federal
Government.
825.402 Violations of the posting requirement.
825.403 Appealing the assessment of a penalty for willful violation of the posting
requirement.
825.404 Consequences for an employer when
not paying the penalty assessment after
a final order is issued.
Subpart E—Recordkeeping Requirements
825.500
Recordkeeping requirements.
Subpart F—Special Rules Applicable to
Employees of Schools
825.600 Special rules for school employees,
definitions.
825.601 Special rules for school employees,
limitations on intermittent leave.
825.602 Special rules for school employees,
limitations on leave near the end of an
academic term.
825.603 Special rules for school employees,
duration of FMLA leave.
825.604 Special rules for school employees,
restoration to ‘‘an equivalent position.’’
Subpart G—Effect of Other Laws, Employer
Practices, and Collective Bargaining
Agreements on Employee Rights
Under FMLA
825.700
825.701
Interaction with employer’s policies.
Interaction with State laws.
§ 825.100 The
Leave Act.
Family
and
(a) The Family and Medical Leave
Act of 1993, as amended, (FMLA or Act)
allows eligible employees of a covered
employer to take job-protected, unpaid
leave, or to substitute appropriate paid
leave if the employee has earned or accrued it, for up to a total of 12 workweeks in any 12 months (see § 825.200(b))
because of the birth of a child and to
care for the newborn child, because of
the placement of a child with the employee for adoption or foster care, because the employee is needed to care
for a family member (child, spouse, or
parent) with a serious health condition, because the employee’s own serious health condition makes the employee unable to perform the functions
of his or her job, or because of any
qualifying exigency arising out of the
fact that the employee’s spouse, son,
daughter, or parent is a military member on active duty or call to covered
active duty status (or has been notified
of an impending call or order to covered active duty). In addition, eligible
employees of a covered employer may
take job-protected, unpaid leave, or
substitute appropriate paid leave if the
employee has earned or accrued it, for
up to a total of 26 workweeks in a single 12-month period to care for a covered servicemember with a serious injury or illness. In certain cases, FMLA
802
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Wage and Hour Division, Labor
§ 825.101
leave may be taken on an intermittent
basis rather than all at once, or the
employee may work a part-time schedule.
(b) An employee on FMLA leave is
also entitled to have health benefits
maintained while on leave as if the employee had continued to work instead
of taking the leave. If an employee was
paying all or part of the premium payments prior to leave, the employee
would continue to pay his or her share
during the leave period. The employer
may recover its share only if the employee does not return to work for a
reason other than the serious health
condition of the employee or the employee’s covered family member, the
serious injury or illness of a covered
servicemember, or another reason beyond the employee’s control.
(c) An employee generally has a right
to return to the same position or an
equivalent position with equivalent
pay, benefits, and working conditions
at the conclusion of the leave. The taking of FMLA leave cannot result in the
loss of any benefit that accrued prior
to the start of the leave.
(d) The employer generally has a
right to advance notice from the employee. In addition, the employer may
require an employee to submit certification to substantiate that the leave is
due to the serious health condition of
the employee or the employee’s covered family member, due to the serious
injury or illness of a covered servicemember, or because of a qualifying exigency. Failure to comply with these requirements may result in a delay in
the start of FMLA leave. Pursuant to a
uniformly applied policy, the employer
may also require that an employee
present a certification of fitness to return to work when the absence was
caused by the employee’s serious
health condition (see §§ 825.312 and
825.313). The employer may delay restoring the employee to employment
without such certificate relating to the
health condition which caused the employee’s absence.
§ 825.101 Purpose of the Act.
(a) FMLA is intended to allow employees to balance their work and family life by taking reasonable unpaid
leave for medical reasons, for the birth
or adoption of a child, for the care of a
child, spouse, or parent who has a serious health condition, for the care of a
covered servicemember with a serious
injury or illness, or because of a qualifying exigency arising out of the fact
that the employee’s spouse, son, daughter, or parent is a military member on
covered active duty or call to covered
active duty status. The Act is intended
to balance the demands of the workplace with the needs of families, to promote the stability and economic security of families, and to promote national interests in preserving family
integrity. It was intended that the Act
accomplish these purposes in a manner
that accommodates the legitimate interests of employers, and in a manner
consistent with the Equal Protection
Clause of the Fourteenth Amendment
in minimizing the potential for employment discrimination on the basis
of sex, while promoting equal employment opportunity for men and women.
(b) The FMLA was predicated on two
fundamental concerns—the needs of
the American workforce, and the development of high-performance organizations. Increasingly, America’s children
and elderly are dependent upon family
members who must spend long hours at
work. When a family emergency arises,
requiring workers to attend to seriously-ill children or parents, or to
newly-born or adopted infants, or even
to their own serious illness, workers
need reassurance that they will not be
asked to choose between continuing
their employment, and meeting their
personal and family obligations or
tending to vital needs at home.
(c) The FMLA is both intended and
expected to benefit employers as well
as their employees. A direct correlation exists between stability in the
family and productivity in the workplace. FMLA will encourage the development of high-performance organizations. When workers can count on durable links to their workplace they are
able to make their own full commitments to their jobs. The record of hearings on family and medical leave indicate the powerful productive advantages of stable workplace relationships,
and the comparatively small costs of
guaranteeing that those relationships
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will not be dissolved while workers attend to pressing family health obligations or their own serious illness.
§ 825.102 Definitions.
For purposes of this part:
Act or FMLA means the Family and
Medical Leave Act of 1993, Public Law
103–3 (February 5, 1993), 107 Stat. 6 (29
U.S.C. 2601 et seq., as amended).
ADA means the Americans With Disabilities Act (42 U.S.C. 12101 et seq., as
amended).
Administrator means the Administrator of the Wage and Hour Division,
U.S. Department of Labor, and includes
any official of the Wage and Hour Division authorized to perform any of the
functions of the Administrator under
this part.
Airline flight crew employee means an
airline flight crewmember or flight attendant as those terms are defined in
regulations of the Federal Aviation Administration. See also § 825.800(a).
Applicable monthly guarantee means:
(1) For an airline flight crew employee who is not on reserve status
(line holder), the minimum number of
hours for which an employer has
agreed to schedule such employee for
any given month; and
(2) For an airline flight crew employee who is on reserve status, the
number of hours for which an employer
has agreed to pay the employee for any
given month. See also § 825.801(b)(1).
COBRA means the continuation coverage requirements of Title X of the
Consolidated Omnibus Budget Reconciliation Act of 1986, as amended
(Pub. L. 99–272, title X, section 10002;
100 Stat 227; 29 U.S.C. 1161–1168).
Commerce and industry or activity affecting commerce mean any activity,
business, or industry in commerce or in
which a labor dispute would hinder or
obstruct commerce or the free flow of
commerce, and include ‘‘commerce’’
and any ‘‘industry affecting commerce’’ as defined in sections 501(1) and
501(3) of the Labor Management Relations Act of 1947, 29 U.S.C. 142(1) and
(3).
Contingency operation means a military operation that:
(1) Is designated by the Secretary of
Defense as an operation in which members of the Armed Forces are or may
become involved in military actions,
operations, or hostilities against an
enemy of the United States or against
an opposing military force; or
(2) Results in the call or order to, or
retention on, active duty of members
of the uniformed services under section
688, 12301(a), 12302, 12304, 12305, or 12406
of Title 10 of the United States Code,
chapter 15 of Title 10 of the United
States Code, or any other provision of
law during a war or during a national
emergency declared by the President or
Congress. See also § 825.126(a)(2).
Continuing treatment by a health care
provider means any one of the following:
(1) Incapacity and treatment. A period
of incapacity of more than three consecutive, full calendar days, and any
subsequent treatment or period of incapacity relating to the same condition,
that also involves:
(i) Treatment two or more times,
within 30 days of the first day of incapacity,
unless
extenuating
circumstances exist, by a health care provider, by a nurse under direct supervision of a health care provider, or by
a provider of health care services (e.g.,
physical therapist) under orders of, or
on referral by, a health care provider;
or
(ii) Treatment by a health care provider on at least one occasion, which
results in a regimen of continuing
treatment under the supervision of the
health care provider.
(iii) The requirement in paragraphs
(i) and (ii) of this definition for treatment by a health care provider means
an in-person visit to a health care provider. The first in-person treatment
visit must take place within seven days
of the first day of incapacity.
(iv) Whether additional treatment
visits or a regimen of continuing treatment is necessary within the 30-day period shall be determined by the health
care provider.
(v) The term ‘‘extenuating circumstances’’ in paragraph (i) means
circumstances beyond the employee’s
control that prevent the follow-up visit
from occurring as planned by the
health care provider. Whether a given
set of circumstances are extenuating
depends on the facts. See also
§ 825.115(a)(5).
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(2) Pregnancy or prenatal care. Any period of incapacity due to pregnancy, or
for prenatal care. See also § 825.120.
(3) Chronic conditions. Any period of
incapacity or treatment for such incapacity due to a chronic serious health
condition. A chronic serious health
condition is one which:
(i) Requires periodic visits (defined as
at least twice a year) for treatment by
a health care provider, or by a nurse
under direct supervision of a health
care provider;
(ii) Continues over an extended period of time (including recurring episodes of a single underlying condition);
and
(iii) May cause episodic rather than a
continuing period of incapacity (e.g.,
asthma, diabetes, epilepsy, etc.).
(4) Permanent or long-term conditions.
A period of incapacity which is permanent or long-term due to a condition
for which treatment may not be effective. The employee or family member
must be under the continuing supervision of, but need not be receiving active treatment by, a health care provider. Examples include Alzheimer’s, a
severe stroke, or the terminal stages of
a disease.
(5) Conditions requiring multiple treatments. Any period of absence to receive
multiple treatments (including any period of recovery therefrom) by a health
care provider or by a provider of health
care services under orders of, or on referral by, a health care provider, for:
(i) Restorative surgery after an accident or other injury; or
(ii) A condition that would likely result in a period of incapacity of more
than three consecutive full calendar
days in the absence of medical intervention or treatment, such as cancer
(chemotherapy, radiation, etc.), severe
arthritis (physical therapy), kidney
disease (dialysis).
(6) Absences attributable to incapacity under paragraphs (2) or (3) of
this definition qualify for FMLA leave
even though the employee or the covered family member does not receive
treatment from a health care provider
during the absence, and even if the absence does not last more than three
consecutive full calendar days. For example, an employee with asthma may
be unable to report for work due to the
onset of an asthma attack or because
the employee’s health care provider
has advised the employee to stay home
when the pollen count exceeds a certain level. An employee who is pregnant may be unable to report to work
because of severe morning sickness.
Covered active duty or call to covered
active duty status means:
(1) In the case of a member of the
Regular Armed Forces, duty during the
deployment of the member with the
Armed Forces to a foreign country;
and,
(2) In the case of a member of the Reserve components of the Armed Forces,
duty during the deployment of the
member with the Armed Forces to a
foreign country under a Federal call or
order to active duty in support of a
contingency operation pursuant to:
Section 688 of Title 10 of the United
States Code, which authorizes ordering
to active duty retired members of the
Regular Armed Forces and members of
the retired Reserve who retired after
completing at least 20 years of active
service; Section 12301(a) of Title 10 of
the United States Code, which authorizes ordering all reserve component
members to active duty in the case of
war or national emergency; Section
12302 of Title 10 of the United States
Code, which authorizes ordering any
unit or unassigned member of the
Ready Reserve to active duty; Section
12304 of Title 10 of the United States
Code, which authorizes ordering any
unit or unassigned member of the Selected Reserve and certain members of
the Individual Ready Reserve to active
duty; Section 12305 of Title 10 of the
United States Code, which authorizes
the suspension of promotion, retirement or separation rules for certain
Reserve components; Section 12406 of
Title 10 of the United States Code,
which authorizes calling the National
Guard into Federal service in certain
circumstances; chapter 15 of Title 10 of
the United States Code, which authorizes calling the National Guard and
state military into Federal service in
the case of insurrections and national
emergencies; or any other provision of
law during a war or during a national
emergency declared by the President or
Congress so long as it is in support of
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a contingency operation. See 10 U.S.C.
101(a)(13)(B). See also § 825.126(a).
Covered servicemember means:
(1) A current member of the Armed
Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation,
or therapy, is otherwise in outpatient
status, or is otherwise on the temporary disability retired list, for a serious injury or illness, or
(2) A covered veteran who is undergoing medical treatment, recuperation,
or therapy for a serious injury or illness.
Covered veteran means an individual
who was a member of the Armed
Forces (including a member of the National Guard or Reserves), and was discharged or released under conditions
other than dishonorable at any time
during the five-year period prior to the
first date the eligible employee takes
FMLA leave to care for the covered
veteran. See § 825.127(b)(2).
Eligible employee means:
(1) An employee who has been employed for a total of at least 12 months
by the employer on the date on which
any FMLA leave is to commence, except that an employer need not consider any period of previous employment that occurred more than seven
years before the date of the most recent hiring of the employee, unless:
(i) The break in service is occasioned
by the fulfillment of the employee’s
Uniformed Services Employment and
Reemployment Rights Act (USERRA),
38 U.S.C. 4301, et seq., covered service
obligation (the period of absence from
work due to or necessitated by
USERRA-covered service must be also
counted in determining whether the
employee has been employed for at
least 12 months by the employer, but
this section does not provide any greater entitlement to the employee than
would be available under the USERRA;
or
(ii) A written agreement, including a
collective bargaining agreement, exists
concerning the employer’s intention to
rehire the employee after the break in
service (e.g., for purposes of the employee furthering his or her education
or for childrearing purposes); and
(2) Who, on the date on which any
FMLA leave is to commence, has met
the hours of service requirement by
having been employed for at least 1,250
hours of service with such employer
during the previous 12-month period, or
for an airline flight crew employee, in
the previous 12 months, having worked
or been paid for not less than 60 percent of the applicable total monthly
guarantee and having worked or been
paid for not less than 504 hours, not
counting personal commute time, or
vacation, medical or sick leave (see
§ 825.801(b)), except that:
(i) An employee returning from fulfilling his or her USERRA-covered
service obligation shall be credited
with the hours of service that would
have been performed but for the period
of absence from work due to or necessitated by USERRA-covered service in
determining whether the employee met
the hours of service requirement (accordingly, a person reemployed following absence from work due to or necessitated by USERRA-covered service
has the hours that would have been
worked for the employer (or, for an airline flight crew employee, would have
been worked for or paid by the employer) added to any hours actually
worked (or, for an airline flight crew
employee, actually worked or paid)
during the previous 12-month period to
meet the hours of service requirement);
and
(ii) To determine the hours that
would have been worked (or, for an airline flight crew employee, would have
been worked or paid) during the period
of absence from work due to or necessitated by USERRA-covered service,
the employee’s pre-service work schedule can generally be used for calculations; and
(3) Who is employed in any State of
the United States, the District of Columbia or any Territories or possession
of the United States.
(4) Excludes any Federal officer or
employee covered under subchapter V
of chapter 63 of title 5, United States
Code.
(5) Excludes any employee of the
United States House of Representatives
or the United States Senate covered by
the Congressional Accountability Act
of 1995, 2 U.S.C. 1301.
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(6) Excludes any employee who is employed at a worksite at which the employer employs fewer than 50 employees if the total number of employees
employed by that employer within 75
miles of that worksite is also fewer
than 50.
(7) Excludes any employee employed
in any country other than the United
States or any Territory or possession
of the United States.
Employ means to suffer or permit to
work.
Employee has the meaning given the
same term as defined in section 3(e) of
the Fair Labor Standards Act, 29 U.S.C.
203(e), as follows:
(1) The term employee means any individual employed by an employer;
(2) In the case of an individual employed by a public agency, employee
means—
(i) Any individual employed by the
Government of the United States—
(A) As a civilian in the military departments (as defined in section 102 of
Title 5, United States Code),
(B) In any executive agency (as defined in section 105 of Title 5, United
States Code), excluding any Federal officer or employee covered under subchapter V of chapter 63 of Title 5,
United States Code,
(C) In any unit of the legislative or
judicial branch of the Government
which has positions in the competitive
service, excluding any employee of the
United States House of Representatives
or the United States Senate who is covered by the Congressional Accountability Act of 1995,
(D) In a nonappropriated fund instrumentality under the jurisdiction of the
Armed Forces, or
(ii) Any individual employed by the
United States Postal Service or the
Postal Regulatory Commission; and
(iii) Any individual employed by a
State, political subdivision of a State,
or an interstate governmental agency,
other than such an individual—
(A) Who is not subject to the civil
service laws of the State, political subdivision, or agency which employs the
employee; and
(B) Who—
(1) Holds a public elective office of
that State, political subdivision, or
agency,
(2) Is selected by the holder of such
an office to be a member of his personal staff,
(3) Is appointed by such an officeholder to serve on a policymaking
level,
(4) Is an immediate adviser to such
an officeholder with respect to the constitutional or legal powers of the office
of such officeholder, or
(5) Is an employee in the legislative
branch or legislative body of that
State, political subdivision, or agency
and is not employed by the legislative
library of such State, political subdivision, or agency.
Employee employed in an instructional
capacity. See the definition of Teacher
in this section.
Employer means any person engaged
in commerce or in an industry or activity affecting commerce who employs 50
or more employees for each working
day during each of 20 or more calendar
workweeks in the current or preceding
calendar year, and includes—
(1) Any person who acts, directly or
indirectly, in the interest of an employer to any of the employees of such
employer;
(2) Any successor in interest of an
employer; and
(3) Any public agency.
Employment benefits means all benefits provided or made available to employees by an employer, including
group life insurance, health insurance,
disability insurance, sick leave, annual
leave, educational benefits, and pensions, regardless of whether such benefits are provided by a practice or written policy of an employer or through
an employee benefit plan as defined in
section 3(3) of the Employee Retirement Income Security Act of 1974, 29
U.S.C. 1002(3). The term does not include non-employment related obligations paid by employees through voluntary deductions such as supplemental insurance coverage. See also
§ 825.209(a).
FLSA means the Fair Labor Standards Act (29 U.S.C. 201 et seq.).
Group health plan means any plan of,
or contributed to by, an employer (including a self-insured plan) to provide
health care (directly or otherwise) to
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the employer’s employees, former employees, or the families of such employees or former employees. For purposes of FMLA the term group health
plan shall not include an insurance
program providing health coverage
under which employees purchase individual policies from insurers provided
that:
(1) No contributions are made by the
employer;
(2) Participation in the program is
completely voluntary for employees;
(3) The sole functions of the employer
with respect to the program are, without endorsing the program, to permit
the insurer to publicize the program to
employees,
to
collect
premiums
through payroll deductions and to
remit them to the insurer;
(4) The employer receives no consideration in the form of cash or otherwise in connection with the program,
other than reasonable compensation,
excluding any profit, for administrative services actually rendered in connection with payroll deduction; and,
(5) The premium charged with respect to such coverage does not increase in the event the employment relationship terminates.
Health care provider means:
(1) The Act defines health care provider as:
(i) A doctor of medicine or osteopathy who is authorized to practice
medicine or surgery (as appropriate) by
the State in which the doctor practices; or
(ii) Any other person determined by
the Secretary to be capable of providing health care services.
(2) Others ‘‘capable of providing
health care services’’ include only:
(i) Podiatrists, dentists, clinical psychologists, optometrists, and chiropractors (limited to treatment consisting of manual manipulation of the
spine to correct a subluxation as demonstrated by X-ray to exist) authorized
to practice in the State and performing
within the scope of their practice as defined under State law;
(ii) Nurse practitioners, nurse-midwives, clinical social workers and physician assistants who are authorized to
practice under State law and who are
performing within the scope of their
practice as defined under State law;
(iii) Christian Science Practitioners
listed with the First Church of Christ,
Scientist in Boston, Massachusetts.
Where an employee or family member
is receiving treatment from a Christian
Science practitioner, an employee may
not object to any requirement from an
employer that the employee or family
member
submit
to
examination
(though not treatment) to obtain a second or third certification from a health
care provider other than a Christian
Science practitioner except as otherwise provided under applicable State or
local law or collective bargaining
agreement.
(iv) Any health care provider from
whom an employer or the employer’s
group health plan’s benefits manager
will accept certification of the existence of a serious health condition to
substantiate a claim for benefits; and
(v) A health care provider listed
above who practices in a country other
than the United States, who is authorized to practice in accordance with the
law of that country, and who is performing within the scope of his or her
practice as defined under such law.
(3) The phrase ‘‘authorized to practice in the State’’ as used in this section means that the provider must be
authorized to diagnose and treat physical or mental health conditions.
Incapable of self-care means that the
individual requires active assistance or
supervision to provide daily self-care in
several of the ‘‘activities of daily living’’ (ADLs) or ‘‘instrumental activities of daily living’’ (IADLs). Activities
of daily living include adaptive activities such as caring appropriately for
one’s grooming and hygiene, bathing,
dressing and eating. Instrumental activities of daily living include cooking,
cleaning, shopping, taking public
transportation, paying bills, maintaining a residence, using telephones and
directories, using a post office, etc.
Instructional employee: See the definition of Teacher in this section.
Intermittent leave means leave taken
in separate periods of time due to a single illness or injury, rather than for
one continuous period of time, and may
include leave of periods from an hour
or more to several weeks. Examples of
intermittent leave would include leave
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taken on an occasional basis for medical appointments, or leave taken several days at a time spread over a period
of six months, such as for chemotherapy.
Invitational travel authorization (ITA)
or Invitational travel order (ITO) are orders issued by the Armed Forces to a
family member to join an injured or ill
servicemember at his or her bedside.
See also § 825.310(e).
Key employee means a salaried
FMLA-eligible employee who is among
the highest paid 10 percent of all the
employees employed by the employer
within 75 miles of the employee’s worksite. See also § 825.217.
Mental disability: See the definition of
Physical or mental disability in this section.
Military caregiver leave means leave
taken to care for a covered servicemember with a serious injury or illness
under the Family and Medical Leave
Act of 1993. See also § 825.127.
Next of kin of a covered servicemember
means the nearest blood relative other
than the covered servicemember’s
spouse, parent, son, or daughter, in the
following order of priority: blood relatives who have been granted legal custody of the covered servicemember by
court decree or statutory provisions,
brothers and sisters, grandparents,
aunts and uncles, and first cousins, unless the covered servicemember has
specifically designated in writing another blood relative as his or her nearest blood relative for purposes of military caregiver leave under the FMLA.
When no such designation is made, and
there are multiple family members
with the same level of relationship to
the covered servicemember, all such
family members shall be considered the
covered servicemember’s next of kin
and may take FMLA leave to provide
care to the covered servicemember, either consecutively or simultaneously.
When such designation has been made,
the designated individual shall be
deemed
to
be
the
covered
servicemember’s only next of kin. See
also § 825.127(d)(3).
Outpatient status means, with respect
to a covered servicemember who is a
current member of the Armed Forces,
the status of a member of the Armed
Forces assigned to either a military
medical treatment facility as an outpatient; or a unit established for the
purpose of providing command and control of members of the Armed Forces
receiving medical care as outpatients.
See also § 825.127(b)(1).
Parent means a biological, adoptive,
step or foster father or mother, or any
other individual who stood in loco
parentis to the employee when the employee was a son or daughter as defined
below. This term does not include parents ‘‘in law.’’
Parent of a covered servicemember
means a covered servicemember’s biological, adoptive, step or foster father
or mother, or any other individual who
stood in loco parentis to the covered
servicemember. This term does not include parents ‘‘in law.’’ See also
§ 825.127(d)(2).
Person means an individual, partnership, association, corporation, business
trust, legal representative, or any organized group of persons, and includes
a public agency for purposes of this
part.
Physical or mental disability means a
physical or mental impairment that
substantially limits one or more of the
major life activities of an individual.
Regulations at 29 CFR part 1630, issued
by the Equal Employment Opportunity
Commission under the Americans with
Disabilities Act (ADA), 42 U.S.C. 12101
et seq., as amended, define these terms.
Public agency means the government
of the United States; the government
of a State or political subdivision
thereof; any agency of the United
States (including the United States
Postal Service and Postal Regulatory
Commission), a State, or a political
subdivision of a State, or any interstate governmental agency. Under section 101(5)(B) of the Act, a public agency is considered to be a ‘‘person’’ engaged in commerce or in an industry or
activity affecting commerce within the
meaning of the Act.
Reduced leave schedule means a leave
schedule that reduces the usual number of hours per workweek, or hours
per workday, of an employee.
Reserve components of the Armed
Forces, for purposes of qualifying exigency leave, include the Army National Guard of the United States,
Army Reserve, Navy Reserve, Marine
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Corps Reserve, Air National Guard of
the United States, Air Force Reserve,
and Coast Guard Reserve, and retired
members of the Regular Armed Forces
or Reserves who are called up in support of a contingency operation. See
also § 825.126(a)(2)(i).
Secretary means the Secretary of
Labor or authorized representative.
Serious health condition means an illness, injury, impairment or physical or
mental condition that involves inpatient care as defined in § 825.114 or continuing treatment by a health care provider as defined in § 825.115. Conditions
for which cosmetic treatments are administered (such as most treatments
for acne or plastic surgery) are not serious health conditions unless inpatient hospital care is required or unless
complications
develop.
Restorative
dental or plastic surgery after an injury or removal of cancerous growths
are serious health conditions provided
all the other conditions of this regulation are met. Mental illness or allergies may be serious health conditions,
but only if all the conditions of § 825.113
are met.
Serious injury or illness means: (1) In
the case of a current member of the
Armed Forces, including a member of
the National Guard or Reserves, an injury or illness that was incurred by the
covered servicemember in the line of
duty on active duty in the Armed
Forces or that existed before the beginning of the member’s active duty and
was aggravated by service in the line of
duty on active duty in the Armed
Forces and that may render the servicemember medically unfit to perform
the duties of the member’s office,
grade, rank, or rating; and
(2) In the case of a covered veteran,
an injury or illness that was incurred
by the member in the line of duty on
active duty in the Armed Forces (or existed before the beginning of the member’s active duty and was aggravated
by service in the line of duty on active
duty in the Armed Forces) and manifested itself before or after the member
became a veteran, and is:
(i) A continuation of a serious injury
or illness that was incurred or aggravated when the covered veteran was a
member of the Armed Forces and rendered the servicemember unable to per-
form the duties of the servicemember’s
office, grade, rank, or rating; or
(ii) A physical or mental condition
for which the covered veteran has received a U.S. Department of Veterans
Affairs Service-Related Disability Rating (VASRD) of 50 percent or greater,
and such VASRD rating is based, in
whole or in part, on the condition precipitating the need for military caregiver leave; or
(iii) A physical or mental condition
that substantially impairs the covered
veteran’s ability to secure or follow a
substantially gainful occupation by
reason of a disability or disabilities related to military service, or would do
so absent treatment; or
(iv) An injury, including a psychological injury, on the basis of which
the covered veteran has been enrolled
in the Department of Veterans Affairs
Program of Comprehensive Assistance
for
Family
Caregivers.
See
also
§ 825.127(c).
Son or daughter means a biological,
adopted, or foster child, a stepchild, a
legal ward, or a child of a person standing in loco parentis, who is either
under age 18, or age 18 or older and
‘‘incapable of self-care because of a
mental or physical disability’’ at the
time that FMLA leave is to commence.
Son or daughter of a covered servicemember
means
a
covered
servicemember’s biological, adopted, or
foster child, stepchild, legal ward, or a
child for whom the covered servicemember stood in loco parentis, and
who is of any age. See also § 825.127(d)(1).
Son or daughter on covered active duty
or call to covered active duty status
means
the
employee’s
biological,
adopted, or foster child, stepchild,
legal ward, or a child for whom the employee stood in loco parentis, who is on
covered active duty or call to covered
active duty status, and who is of any
age. See also § 825.126(a)(5).
Spouse, as defined in the statute,
means a husband or wife. For purposes
of this definition, husband or wife refers to the other person with whom an
individual entered into marriage as defined or recognized under state law for
purposes of marriage in the State in
which the marriage was entered into
or, in the case of a marriage entered
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Wage and Hour Division, Labor
§ 825.104
into outside of any State, if the marriage is valid in the place where entered into and could have been entered
into in at least one State. This definition includes an individual in a samesex or common law marriage that either:
(1) Was entered into in a State that
recognizes such marriages; or
(2) If entered into outside of any
State, is valid in the place where entered into and could have been entered
into in at least one State.
State means any State of the United
States or the District of Columbia or
any Territory or possession of the
United States.
Teacher (or employee employed in an
instructional capacity, or instructional
employee) means an employee employed principally in an instructional
capacity by an educational agency or
school whose principal function is to
teach and instruct students in a class,
a small group, or an individual setting,
and includes athletic coaches, driving
instructors, and special education assistants such as signers for the hearing
impaired. The term does not include
teacher assistants or aides who do not
have as their principal function actual
teaching or instructing, nor auxiliary
personnel such as counselors, psychologists, curriculum specialists, cafeteria
workers, maintenance workers, bus
drivers, or other primarily noninstructional employees.
TRICARE is the health care program
serving active duty servicemembers,
National Guard and Reserve members,
retirees, their families, survivors, and
certain former spouses worldwide.
[78 FR 8902, Feb. 6, 2013, as amended at 80 FR
10000, Feb. 25, 2015]
§ 825.103
[Reserved]
§ 825.104 Covered employer.
(a) An employer covered by FMLA is
any person engaged in commerce or in
any industry or activity affecting commerce, who employs 50 or more employees for each working day during
each of 20 or more calendar workweeks
in the current or preceding calendar
year. Employers covered by FMLA also
include any person acting, directly or
indirectly, in the interest of a covered
employer to any of the employees of
the employer, any successor in interest
of a covered employer, and any public
agency. Public agencies are covered
employers without regard to the number of employees employed. Public as
well as private elementary and secondary schools are also covered employers without regard to the number
of employees employed. See § 825.600.
(b) The terms commerce and industry
affecting commerce are defined in accordance with section 501(1) and (3) of
the Labor Management Relations Act
of 1947 (LMRA) (29 U.S.C. 142(1) and (3)),
as set forth in the definitions at
§ 825.102 of this part. For purposes of
the FMLA, employers who meet the 50employee coverage test are deemed to
be engaged in commerce or in an industry or activity affecting commerce.
(c) Normally the legal entity which
employs the employee is the employer
under FMLA. Applying this principle, a
corporation is a single employer rather
than its separate establishments or divisions.
(1) Where one corporation has an
ownership interest in another corporation, it is a separate employer unless it
meets the joint employment test discussed in § 825.106, or the integrated
employer test contained in paragraph
(c)(2) of this section.
(2) Separate entities will be deemed
to be parts of a single employer for
purposes of FMLA if they meet the integrated employer test. Where this test
is met, the employees of all entities
making up the integrated employer
will be counted in determining employer coverage and employee eligibility. A determination of whether or
not separate entities are an integrated
employer is not determined by the application of any single criterion, but
rather the entire relationship is to be
reviewed in its totality. Factors considered in determining whether two or
more entities are an integrated employer include:
(i) Common management;
(ii) Interrelation between operations;
(iii) Centralized control of labor relations; and
(iv) Degree of common ownership/financial control.
(d) An employer includes any person
who acts directly or indirectly in the
interest of an employer to any of the
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§ 825.105
29 CFR Ch. V (7–1–19 Edition)
employer’s employees. The definition
of employer in section 3(d) of the Fair
Labor Standards Act (FLSA), 29 U.S.C.
203(d), similarly includes any person
acting directly or indirectly in the interest of an employer in relation to an
employee. As under the FLSA, individuals such as corporate officers ‘‘acting
in the interest of an employer’’ are individually liable for any violations of
the requirements of FMLA.
[78 FR 8902, Feb. 6, 2013, as amended at 82 FR
2230, Jan. 9, 2017]
§ 825.105 Counting employees for determining coverage.
(a) The definition of employ for purposes of FMLA is taken from the Fair
Labor Standards Act, § 3(g), 29 U.S.C.
203(g). The courts have made it clear
that the employment relationship
under the FLSA is broader than the
traditional common law concept of
master and servant. The difference between the employment relationship
under the FLSA and that under the
common law arises from the fact that
the term ‘‘employ’’ as defined in the
Act includes ‘‘to suffer or permit to
work.’’ The courts have indicated that,
while ‘‘to permit’’ requires a more positive action than ‘‘to suffer,’’ both
terms imply much less positive action
than required by the common law.
Mere knowledge by an employer of
work done for the employer by another
is sufficient to create the employment
relationship under the Act. The courts
have said that there is no definition
that solves all problems as to the limitations of the employer-employee relationship under the Act; and that determination of the relation cannot be
based on isolated factors or upon a single characteristic or technical concepts, but depends ‘‘upon the circumstances of the whole activity’’ including the underlying ‘‘economic reality.’’ In general an employee, as distinguished from an independent contractor who is engaged in a business of
his/her own, is one who ‘‘follows the
usual path of an employee’’ and is dependent on the business which he/she
serves.
(b) Any employee whose name appears on the employer’s payroll will be
considered employed each working day
of the calendar week, and must be
counted whether or not any compensation is received for the week. However,
the FMLA applies only to employees
who are employed within any State of
the United States, the District of Columbia or any Territory or possession
of the United States. Employees who
are employed outside these areas are
not counted for purposes of determining employer coverage or employee
eligibility.
(c) Employees on paid or unpaid
leave, including FMLA leave, leaves of
absence, disciplinary suspension, etc.,
are counted as long as the employer
has a reasonable expectation that the
employee will later return to active
employment. If there is no employer/
employee relationship (as when an employee is laid off, whether temporarily
or permanently) such individual is not
counted. Part-time employees, like
full-time employees, are considered to
be employed each working day of the
calendar week, as long as they are
maintained on the payroll.
(d) An employee who does not begin
to work for an employer until after the
first working day of a calendar week,
or who terminates employment before
the last working day of a calendar
week, is not considered employed on
each working day of that calendar
week.
(e) A private employer is covered if it
maintained 50 or more employees on
the payroll during 20 or more calendar
workweeks (not necessarily consecutive workweeks) in either the current
or the preceding calendar year.
(f) Once a private employer meets the
50 employees/20 workweeks threshold,
the employer remains covered until it
reaches a future point where it no
longer has employed 50 employees for
20 (nonconsecutive) workweeks in the
current and preceding calendar year.
For example, if an employer who met
the 50 employees/20 workweeks test in
the calendar year as of September 1,
2008, subsequently dropped below 50
employees before the end of 2008 and
continued to employ fewer than 50 employees in all workweeks throughout
calendar year 2009, the employer would
continue to be covered throughout calendar year 2009 because it met the coverage criteria for 20 workweeks of the
preceding (i.e., 2008) calendar year.
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Wage and Hour Division, Labor
§ 825.106
§ 825.106 Joint employer coverage.
(a) Where two or more businesses exercise some control over the work or
working conditions of the employee,
the businesses may be joint employers
under FMLA. Joint employers may be
separate and distinct entities with separate owners, managers, and facilities.
Where the employee performs work
which simultaneously benefits two or
more employers, or works for two or
more employers at different times during the workweek, a joint employment
relationship generally will be considered to exist in situations such as:
(1) Where there is an arrangement between employers to share an employee’s services or to interchange employees;
(2) Where one employer acts directly
or indirectly in the interest of the
other employer in relation to the employee; or,
(3) Where the employers are not completely disassociated with respect to
the employee’s employment and may
be deemed to share control of the employee, directly or indirectly, because
one employer controls, is controlled
by, or is under common control with
the other employer.
(b)(1) A determination of whether or
not a joint employment relationship
exists is not determined by the application of any single criterion, but rather
the entire relationship is to be viewed
in its totality. For example, joint employment will ordinarily be found to
exist when a temporary placement
agency supplies employees to a second
employer.
(2) A type of company that is often
called a Professional Employer Organization (PEO) contracts with client employers to perform administrative
functions such as payroll, benefits, regulatory paperwork, and updating employment policies. The determination
of whether a PEO is a joint employer
also turns on the economic realities of
the situation and must be based upon
all the facts and circumstances. A PEO
does not enter into a joint employment
relationship with the employees of its
client companies when it merely performs such administrative functions.
On the other hand, if in a particular
fact situation, a PEO has the right to
hire, fire, assign, or direct and control
the client’s employees, or benefits from
the work that the employees perform,
such rights may lead to a determination that the PEO would be a joint employer with the client employer, depending upon all the facts and circumstances.
(c) In joint employment relationships, only the primary employer is responsible for giving required notices to
its employees, providing FMLA leave,
and maintenance of health benefits.
Factors considered in determining
which is the primary employer include
authority/responsibility to hire and
fire, assign/place the employee, make
payroll, and provide employment benefits. For employees of temporary placement agencies, for example, the placement agency most commonly would be
the primary employer. Where a PEO is
a joint employer, the client employer
most commonly would be the primary
employer.
(d) Employees jointly employed by
two employers must be counted by
both employers, whether or not maintained on one of the employer’s payroll, in determining employer coverage
and employee eligibility. For example,
an employer who jointly employs 15
workers from a temporary placement
agency and 40 permanent workers is
covered by FMLA. (A special rule applies to employees jointly employed
who physically work at a facility of the
secondary employer for a period of at
least one year. See § 825.111(a)(3).) An
employee on leave who is working for a
secondary employer is considered employed by the secondary employer, and
must be counted for coverage and eligibility purposes, as long as the employer has a reasonable expectation
that that employee will return to employment with that employer. In those
cases in which a PEO is determined to
be a joint employer of a client employer’s employees, the client employer
would only be required to count employees of the PEO (or employees of
other clients of the PEO) if the client
employer jointly employed those employees.
(e) Job restoration is the primary responsibility of the primary employer.
The secondary employer is responsible
for accepting the employee returning
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§ 825.107
29 CFR Ch. V (7–1–19 Edition)
from FMLA leave in place of the replacement employee if the secondary
employer continues to utilize an employee from the temporary placement
agency, and the agency chooses to
place the employee with the secondary
employer. A secondary employer is also
responsible for compliance with the
prohibited acts provisions with respect
to its jointly employed employees,
whether or not the secondary employer
is covered by FMLA. See § 825.220(a).
The prohibited acts include prohibitions against interfering with an employee’s attempt to exercise rights
under the Act, or discharging or discriminating against an employee for
opposing a practice which is unlawful
under FMLA. A covered secondary employer will be responsible for compliance with all the provisions of the
FMLA with respect to its regular, permanent workforce.
§ 825.107 Successor
erage.
in
interest
cov-
(a) For purposes of FMLA, in determining whether an employer is covered
because it is a ‘‘successor in interest’’
to a covered employer, the factors used
under Title VII of the Civil Rights Act
and the Vietnam Era Veterans’ Adjustment Act will be considered. However,
unlike Title VII, whether the successor
has notice of the employee’s claim is
not a consideration. Notice may be relevant, however, in determining successor liability for violations of the
predecessor. The factors to be considered include:
(1) Substantial continuity of the
same business operations;
(2) Use of the same plant;
(3) Continuity of the work force;
(4) Similarity of jobs and working
conditions;
(5) Similarity of supervisory personnel;
(6) Similarity in machinery, equipment, and production methods;
(7) Similarity of products or services;
and
(8) The ability of the predecessor to
provide relief.
(b) A determination of whether or
not a successor in interest exists is not
determined by the application of any
single criterion, but rather the entire
circumstances are to be viewed in their
totality.
(c) When an employer is a successor
in interest, employees’ entitlements
are the same as if the employment by
the predecessor and successor were
continuous employment by a single
employer. For example, the successor,
whether or not it meets FMLA coverage criteria, must grant leave for eligible employees who had provided appropriate notice to the predecessor, or
continue leave begun while employed
by the predecessor, including maintenance of group health benefits during
the leave and job restoration at the
conclusion of the leave. A successor
which meets FMLA’s coverage criteria
must count periods of employment and
hours of service with the predecessor
for purposes of determining employee
eligibility for FMLA leave.
§ 825.108 Public agency coverage.
(a) An employer under FMLA includes any public agency, as defined in
section 3(x) of the Fair Labor Standards Act, 29 U.S.C. 203(x). Section 3(x)
of the FLSA defines public agency as
the government of the United States;
the government of a State or political
subdivision of a State; or an agency of
the United States, a State, or a political subdivision of a State, or any
interstate governmental agency. State
is further defined in Section 3(c) of the
FLSA to include any State of the
United States, the District of Columbia, or any Territory or possession of
the United States.
(b) The determination of whether an
entity is a public agency, as distinguished from a private employer, is determined by whether the agency has
taxing authority, or whether the chief
administrative officer or board, etc., is
elected by the voters-at-large or their
appointment is subject to approval by
an elected official.
(c)(1) A State or a political subdivision of a State constitutes a single
public agency and, therefore, a single
employer for purposes of determining
employee eligibility. For example, a
State is a single employer; a county is
a single employer; a city or town is a
single employer. Whether two agencies
of the same State or local government
constitute the same public agency can
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Wage and Hour Division, Labor
§ 825.110
only be determined on a case-by-case
basis. One factor that would support a
conclusion that two agencies are separate is whether they are treated separately for statistical purposes in the
Census of Governments issued by the
Bureau of the Census, U.S. Department
of Commerce.
(2) The Census Bureau takes a census
of governments at five-year intervals.
Volume I, Government Organization,
contains the official counts of the number of State and local governments. It
includes tabulations of governments by
State, type of government, size, and
county location. Also produced is a
universe list of governmental units,
classified according to type of government. Copies of Volume I, Government
Organization, and subsequent volumes
are available from the Superintendent
of Documents, U.S. Government Printing Office, Washington, DC 20402, U.S.
Department of Commerce District Offices, or can be found in Regional and
selective depository libraries, or online
at
http://www.census.gov/govs/www/
index.html. For a list of all depository
libraries, write to the Government
Printing Office, 710 N. Capitol St. NW.,
Washington, DC 20402.
(d) All public agencies are covered by
the FMLA regardless of the number of
employees; they are not subject to the
coverage threshold of 50 employees carried on the payroll each day for 20 or
more weeks in a year. However, employees of public agencies must meet
all of the requirements of eligibility,
including the requirement that the employer (e.g., State) employ 50 employees at the worksite or within 75 miles.
§ 825.109 Federal agency coverage.
(a) Most employees of the government of the United States, if they are
covered by the FMLA, are covered
under Title II of the FMLA (incorporated in Title V, Chapter 63, Subchapter 5 of the United States Code)
which is administered by the U.S. Office of Personnel Management (OPM).
OPM has separate regulations at 5 CFR
Part 630, Subpart L. Employees of the
Government Printing Office are covered by Title II. While employees of the
Government Accountability Office and
the Library of Congress are covered by
Title I of the FMLA, the Comptroller
General of the United States and the
Librarian of Congress, respectively,
have responsibility for the administration of the FMLA with respect to these
employees. Other legislative branch
employees, such as employees of the
Senate and House of Representatives,
are covered by the Congressional Accountability Act of 1995, 2 U.S.C. 1301.
(b) The Federal Executive Branch
employees within the jurisdiction of
these regulations include:
(1) Employees of the Postal Service;
(2) Employees of the Postal Regulatory Commission;
(3) A part-time employee who does
not have an established regular tour of
duty during the administrative workweek; and,
(4) An employee serving under an
intermittent appointment or temporary appointment with a time limitation of one year or less.
(c) Employees of other Federal executive agencies are also covered by these
regulations if they are not covered by
Title II of FMLA.
(d) Employees of the judicial branch
of the United States are covered by
these regulations only if they are employed in a unit which has employees
in the competitive service. For example, employees of the U.S. Tax Court
are covered by these regulations.
(e) For employees covered by these
regulations, the U.S. Government constitutes a single employer for purposes
of determining employee eligibility.
These employees must meet all of the
requirements for eligibility, including
the requirement that the Federal Government employ 50 employees at the
worksite or within 75 miles.
§ 825.110 Eligible employee.
(a) An eligible employee is an employee of a covered employer who:
(1) Has been employed by the employer for at least 12 months, and
(2) Has been employed for at least
1,250 hours of service during the 12month period immediately preceding
the commencement of the leave (see
§ 825.801 for special hours of service requirements for airline flight crew employees), and
(3) Is employed at a worksite where
50 or more employees are employed by
the employer within 75 miles of that
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§ 825.110
29 CFR Ch. V (7–1–19 Edition)
worksite. See § 825.105(b) regarding employees who work outside the U.S.
(b) The 12 months an employee must
have been employed by the employer
need not be consecutive months, provided
(1) Subject to the exceptions provided
in paragraph (b)(2) of this section, employment periods prior to a break in
service of seven years or more need not
be counted in determining whether the
employee has been employed by the
employer for at least 12 months.
(2) Employment periods preceding a
break in service of more than seven
years must be counted in determining
whether the employee has been employed by the employer for at least 12
months where:
(i) The employee’s break in service is
occasioned by the fulfillment of his or
her Uniformed Services Employment
and
Reemployment
Rights
Act
(USERRA), 38 U.S.C. 4301, et seq., covered service obligation. The period of
absence from work due to or necessitated by USERRA-covered service
must be also counted in determining
whether the employee has been employed for at least 12 months by the
employer. However, this section does
not provide any greater entitlement to
the employee than would be available
under the USERRA; or
(ii) A written agreement, including a
collective bargaining agreement, exists
concerning the employer’s intention to
rehire the employee after the break in
service (e.g., for purposes of the employee furthering his or her education
or for childrearing purposes).
(3) If an employee is maintained on
the payroll for any part of a week, including any periods of paid or unpaid
leave (sick, vacation) during which
other benefits or compensation are provided by the employer (e.g., workers’
compensation, group health plan benefits, etc.), the week counts as a week of
employment. For purposes of determining
whether
intermittent/occasional/casual employment qualifies as
at least 12 months, 52 weeks is deemed
to be equal to 12 months.
(4) Nothing in this section prevents
employers from considering employment prior to a continuous break in
service of more than seven years when
determining whether an employee has
met the 12-month employment requirement. However, if an employer chooses
to recognize such prior employment,
the employer must do so uniformly,
with respect to all employees with
similar breaks in service.
(c)(1) Except as provided in paragraph
(c)(2) of this section and in § 825.801 containing the special hours of service requirement for airline flight crew employees, whether an employee has
worked the minimum 1,250 hours of
service is determined according to the
principles established under the Fair
Labor Standards Act (FLSA) for determining compensable hours of work. See
29 CFR part 785. The determining factor is the number of hours an employee
has worked for the employer within the
meaning of the FLSA. The determination is not limited by methods of recordkeeping, or by compensation agreements that do not accurately reflect
all of the hours an employee has
worked for or been in service to the
employer. Any accurate accounting of
actual hours worked under FLSA’s
principles may be used.
(2) An employee returning from
USERRA-covered service shall be credited with the hours of service that
would have been performed but for the
period of absence from work due to or
necessitated by USERRA-covered service in determining the employee’s eligibility for FMLA-qualifying leave. Accordingly, a person reemployed following USERRA-covered service has
the hours that would have been worked
for the employer added to any hours
actually worked during the previous 12month period to meet the hours of
service requirement. In order to determine the hours that would have been
worked during the period of absence
from work due to or necessitated by
USERRA-covered service, the employee’s pre-service work schedule can generally be used for calculations. See
§ 825.801(c) for special rules applicable
to airline flight crew employees.
(3) In the event an employer does not
maintain an accurate record of hours
worked by an employee, including for
employees who are exempt from
FLSA’s requirement that a record be
kept of their hours worked (e.g., bona
fide executive, administrative, and professional employees as defined in FLSA
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Wage and Hour Division, Labor
§ 825.111
Regulations, 29 CFR part 541), the employer has the burden of showing that
the employee has not worked the requisite hours. An employer must be able
to clearly demonstrate, for example,
that full-time teachers (see § 825.102 for
definition) of an elementary or secondary school system, or institution of
higher education, or other educational
establishment or institution (who often
work outside the classroom or at their
homes) did not work 1,250 hours during
the previous 12 months in order to
claim that the teachers are not eligible
for FMLA leave. See § 825.801(d) for special rules applicable to airline flight
crew employees.
(d) The determination of whether an
employee meets the hours of service requirement and has been employed by
the employer for a total of at least 12
months must be made as of the date
the FMLA leave is to start. An employee may be on non-FMLA leave at
the time he or she meets the 12-month
eligibility requirement, and in that
event, any portion of the leave taken
for an FMLA-qualifying reason after
the employee meets the eligibility requirement would be FMLA leave. See
§ 825.300(b) for rules governing the content of the eligibility notice given to
employees.
(e) Whether 50 employees are employed within 75 miles to ascertain an
employee’s eligibility for FMLA benefits is determined when the employee
gives notice of the need for leave.
Whether the leave is to be taken at one
time or on an intermittent or reduced
leave schedule basis, once an employee
is determined eligible in response to
that notice of the need for leave, the
employee’s eligibility is not affected by
any subsequent change in the number
of employees employed at or within 75
miles of the employee’s worksite, for
that specific notice of the need for
leave. Similarly, an employer may not
terminate employee leave that has already started if the employee count
drops below 50. For example, if an employer employs 60 employees in August, but expects that the number of
employees will drop to 40 in December,
the employer must grant FMLA benefits to an otherwise eligible employee
who gives notice of the need for leave
in August for a period of leave to begin
in December.
§ 825.111 Determining whether 50 employees are employed within 75
miles.
(a) Generally, a worksite can refer to
either a single location or a group of
contiguous locations. Structures which
form a campus or industrial park, or
separate facilities in proximity with
one another, may be considered a single site of employment. On the other
hand, there may be several single sites
of employment within a single building, such as an office building, if separate employers conduct activities within the building. For example, an office
building with 50 different businesses as
tenants will contain 50 sites of employment. The offices of each employer will
be considered separate sites of employment for purposes of FMLA. An employee’s worksite under FMLA will ordinarily be the site the employee reports to or, if none, from which the employee’s work is assigned.
(1) Separate buildings or areas which
are not directly connected or in immediate proximity are a single worksite if
they are in reasonable geographic proximity, are used for the same purpose,
and share the same staff and equipment. For example, if an employer
manages a number of warehouses in a
metropolitan area but regularly shifts
or rotates the same employees from
one building to another, the multiple
warehouses would be a single worksite.
(2) For employees with no fixed worksite, e.g., construction workers, transportation workers (e.g., truck drivers,
seamen, pilots), salespersons, etc., the
worksite is the site to which they are
assigned as their home base, from
which their work is assigned, or to
which they report. For example, if a
construction company headquartered
in New Jersey opened a construction
site in Ohio, and set up a mobile trailer
on the construction site as the company’s on-site office, the construction
site in Ohio would be the worksite for
any employees hired locally who report
to the mobile trailer/company office
daily for work assignments, etc. If that
construction company also sent personnel such as job superintendents,
foremen, engineers, an office manager,
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§ 825.112
29 CFR Ch. V (7–1–19 Edition)
etc., from New Jersey to the job site in
Ohio, those workers sent from New Jersey continue to have the headquarters
in New Jersey as their worksite. The
workers who have New Jersey as their
worksite would not be counted in determining eligibility of employees
whose home base is the Ohio worksite,
but would be counted in determining
eligibility of employees whose home
base is New Jersey. For transportation
employees, their worksite is the terminal to which they are assigned, report for work, depart, and return after
completion of a work assignment. For
example, an airline pilot may work for
an airline with headquarters in New
York, but the pilot regularly reports
for duty and originates or begins
flights from the company’s facilities
located in an airport in Chicago and returns to Chicago at the completion of
one or more flights to go off duty. The
pilot’s worksite is the facility in Chicago. An employee’s personal residence
is not a worksite in the case of employees, such as salespersons, who travel a
sales territory and who generally leave
to work and return from work to their
personal residence, or employees who
work at home, as under the concept of
flexiplace or telecommuting. Rather,
their worksite is the office to which
they report and from which assignments are made.
(3) For purposes of determining that
employee’s eligibility, when an employee is jointly employed by two or
more employers (see § 825.106), the employee’s worksite is the primary employer’s office from which the employee is assigned or reports, unless
the employee has physically worked for
at least one year at a facility of a secondary employer, in which case the
employee’s worksite is that location.
The employee is also counted by the
secondary employer to determine eligibility for the secondary employer’s
full-time or permanent employees.
(b) The 75-mile distance is measured
by surface miles, using surface transportation over public streets, roads,
highways and waterways, by the shortest route from the facility where the
employee needing leave is employed.
Absent available surface transportation between worksites, the distance
is measured by using the most fre-
quently utilized mode of transportation (e.g., airline miles).
(c) The determination of how many
employees are employed within 75
miles of the worksite of an employee is
based on the number of employees
maintained on the payroll. Employees
of educational institutions who are employed permanently or who are under
contract are maintained on the payroll
during any portion of the year when
school is not in session. See § 825.105(c).
§ 825.112 Qualifying reasons for leave,
general rule.
(a) Circumstances qualifying for leave.
Employers covered by FMLA are required to grant leave to eligible employees:
(1) For birth of a son or daughter, and
to care for the newborn child (see
§ 825.120);
(2) For placement with the employee
of a son or daughter for adoption or
foster care (see § 825.121);
(3) To care for the employee’s spouse,
son, daughter, or parent with a serious
health condition (see §§ 825.113 and
825.122);
(4) Because of a serious health condition that makes the employee unable
to perform the functions of the employee’s job (see §§ 825.113 and 825.123);
(5) Because of any qualifying exigency arising out of the fact that the
employee’s spouse, son, daughter, or
parent is a military member on covered active duty (or has been notified
of an impending call or order to covered active duty status (see §§ 825.122
and 825.126); and
(6) To care for a covered servicemember with a serious injury or illness if
the employee is the spouse, son, daughter, parent, or next of kin of the covered servicemember. See §§ 825.122 and
825.127.
(b) Equal application. The right to
take leave under FMLA applies equally
to male and female employees. A father, as well as a mother, can take
family leave for the birth, placement
for adoption, or foster care of a child.
(c) Active employee. In situations
where the employer/employee relationship has been interrupted, such as an
employee who has been on layoff, the
employee must be recalled or otherwise
be re-employed before being eligible for
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Wage and Hour Division, Labor
§ 825.115
FMLA
leave.
Under
such
circumstances, an eligible employee is
immediately entitled to further FMLA
leave for a qualifying reason.
§ 825.113 Serious health condition.
(a) For purposes of FMLA, serious
health condition entitling an employee
to FMLA leave means an illness, injury, impairment or physical or mental
condition that involves inpatient care
as defined in § 825.114 or continuing
treatment by a health care provider as
defined in § 825.115.
(b) The term incapacity means inability to work, attend school or perform
other regular daily activities due to
the serious health condition, treatment
therefore, or recovery therefrom.
(c) The term treatment includes (but
is not limited to) examinations to determine if a serious health condition
exists and evaluations of the condition.
Treatment does not include routine
physical examinations, eye examinations, or dental examinations. A regimen of continuing treatment includes,
for example, a course of prescription
medication (e.g., an antibiotic) or therapy requiring special equipment to resolve or alleviate the health condition
(e.g., oxygen). A regimen of continuing
treatment that includes the taking of
over-the-counter medications such as
aspirin, antihistamines, or salves; or
bed-rest, drinking fluids, exercise, and
other similar activities that can be initiated without a visit to a health care
provider, is not, by itself, sufficient to
constitute a regimen of continuing
treatment for purposes of FMLA leave.
(d) Conditions for which cosmetic
treatments are administered (such as
most treatments for acne or plastic
surgery) are not serious health conditions unless inpatient hospital care is
required or unless complications develop. Ordinarily, unless complications
arise, the common cold, the flu, ear
aches, upset stomach, minor ulcers,
headaches other than migraine, routine
dental or orthodontia problems, periodontal disease, etc., are examples of
conditions that do not meet the definition of a serious health condition and
do not qualify for FMLA leave. Restorative dental or plastic surgery after an
injury or removal of cancerous growths
are serious health conditions provided
all the other conditions of this regulation are met. Mental illness or allergies may be serious health conditions,
but only if all the conditions of this
section are met.
§ 825.114 Inpatient care.
Inpatient care means an overnight
stay in a hospital, hospice, or residential medical care facility, including
any period of incapacity as defined in
§ 825.113(b), or any subsequent treatment in connection with such inpatient
care.
§ 825.115 Continuing treatment.
A serious health condition involving
continuing treatment by a health care
provider includes any one or more of
the following:
(a) Incapacity and treatment. A period
of incapacity of more than three consecutive, full calendar days, and any
subsequent treatment or period of incapacity relating to the same condition,
that also involves:
(1) Treatment two or more times,
within 30 days of the first day of incapacity,
unless
extenuating
circumstances exist, by a health care provider, by a nurse under direct supervision of a health care provider, or by
a provider of health care services (e.g.,
physical therapist) under orders of, or
on referral by, a health care provider;
or
(2) Treatment by a health care provider on at least one occasion, which
results in a regimen of continuing
treatment under the supervision of the
health care provider.
(3) The requirement in paragraphs
(a)(1) and (2) of this section for treatment by a health care provider means
an in-person visit to a health care provider. The first (or only) in-person
treatment visit must take place within
seven days of the first day of incapacity.
(4) Whether additional treatment visits or a regimen of continuing treatment is necessary within the 30-day period shall be determined by the health
care provider.
(5) The term extenuating circumstances
in paragraph (a)(1) of this section
means circumstances beyond the employee’s control that prevent the follow-up visit from occurring as planned
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§§ 825.116–825.118
29 CFR Ch. V (7–1–19 Edition)
by the health care provider. Whether a
given set of circumstances are extenuating depends on the facts. For example, extenuating circumstances exist if
a health care provider determines that
a second in-person visit is needed within the 30-day period, but the health
care provider does not have any available appointments during that time period.
(b) Pregnancy or prenatal care. Any
period of incapacity due to pregnancy,
or for prenatal care. See also § 825.120.
(c) Chronic conditions. Any period of
incapacity or treatment for such incapacity due to a chronic serious health
condition. A chronic serious health
condition is one which:
(1) Requires periodic visits (defined
as at least twice a year) for treatment
by a health care provider, or by a nurse
under direct supervision of a health
care provider;
(2) Continues over an extended period
of time (including recurring episodes of
a single underlying condition); and
(3) May cause episodic rather than a
continuing period of incapacity (e.g.,
asthma, diabetes, epilepsy, etc.).
(d) Permanent or long-term conditions.
A period of incapacity which is permanent or long-term due to a condition
for which treatment may not be effective. The employee or family member
must be under the continuing supervision of, but need not be receiving active treatment by, a health care provider. Examples include Alzheimer’s, a
severe stroke, or the terminal stages of
a disease.
(e) Conditions requiring multiple treatments. Any period of absence to receive
multiple treatments (including any period of recovery therefrom) by a health
care provider or by a provider of health
care services under orders of, or on referral by, a health care provider, for:
(1) Restorative surgery after an accident or other injury; or
(2) A condition that would likely result in a period of incapacity of more
than three consecutive, full calendar
days in the absence of medical intervention or treatment, such as cancer
(chemotherapy, radiation, etc.), severe
arthritis (physical therapy), or kidney
disease (dialysis).
(f) Absences attributable to incapacity under paragraph (b) or (c) of this
section qualify for FMLA leave even
though the employee or the covered
family member does not receive treatment from a health care provider during the absence, and even if the absence does not last more than three
consecutive, full calendar days. For example, an employee with asthma may
be unable to report for work due to the
onset of an asthma attack or because
the employee’s health care provider
has advised the employee to stay home
when the pollen count exceeds a certain level. An employee who is pregnant may be unable to report to work
because of severe morning sickness.
§§ 825.116–825.118
[Reserved]
§ 825.119 Leave for treatment of substance abuse.
(a) Substance abuse may be a serious
health condition if the conditions of
§§ 825.113 through 825.115 are met. However, FMLA leave may only be taken
for treatment for substance abuse by a
health care provider or by a provider of
health care services on referral by a
health care provider. On the other
hand, absence because of the employee’s use of the substance, rather than
for treatment, does not qualify for
FMLA leave.
(b) Treatment for substance abuse
does not prevent an employer from
taking employment action against an
employee. The employer may not take
action against the employee because
the employee has exercised his or her
right to take FMLA leave for treatment. However, if the employer has an
established policy, applied in a non-discriminatory manner that has been
communicated to all employees, that
provides under certain circumstances
an employee may be terminated for
substance abuse, pursuant to that policy the employee may be terminated
whether or not the employee is presently taking FMLA leave. An employee
may also take FMLA leave to care for
a covered family member who is receiving treatment for substance abuse. The
employer may not take action against
an employee who is providing care for
a covered family member receiving
treatment for substance abuse.
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Wage and Hour Division, Labor
§ 825.120
§ 825.120 Leave for pregnancy or birth.
(a) General rules. Eligible employees
are entitled to FMLA leave for pregnancy or birth of a child as follows:
(1) Both parents are entitled to
FMLA leave for the birth of their child.
(2) Both parents are entitled to
FMLA leave to be with the healthy
newborn child (i.e., bonding time) during the 12-month period beginning on
the date of birth. An employee’s entitlement to FMLA leave for a birth expires at the end of the 12-month period
beginning on the date of the birth. If
state law allows, or the employer permits, bonding leave to be taken beyond
this period, such leave will not qualify
as FMLA leave. See § 825.701 regarding
non-FMLA leave which may be available under applicable State laws. Under
this section, both parents are entitled
to FMLA leave even if the newborn
does not have a serious health condition.
(3) Spouses who are eligible for
FMLA leave and are employed by the
same covered employer may be limited
to a combined total of 12 weeks of leave
during any 12-month period if the leave
is taken for birth of the employee’s son
or daughter or to care for the child
after birth, for placement of a son or
daughter with the employee for adoption or foster care or to care for the
child after placement, or to care for
the employee’s parent with a serious
health condition. This limitation on
the total weeks of leave applies to
leave taken for the reasons specified as
long as the spouses are employed by
the same employer. It would apply, for
example, even though the spouses are
employed at two different worksites of
an employer located more than 75
miles from each other, or by two different operating divisions of the same
company. On the other hand, if one
spouse is ineligible for FMLA leave,
the other spouse would be entitled to a
full 12 weeks of FMLA leave. Where
spouses both use a portion of the total
12-week FMLA leave entitlement for
either the birth of a child, for placement for adoption or foster care, or to
care for a parent, the spouses would
each be entitled to the difference between the amount he or she has taken
individually and 12 weeks for FMLA
leave for other purposes. For example,
if each spouse took six weeks of leave
to care for a healthy, newborn child,
each could use an additional six weeks
due to his or her own serious health
condition or to care for a child with a
serious health condition. Note, too,
that many state pregnancy disability
laws specify a period of disability either before or after the birth of a child;
such periods would also be considered
FMLA leave for a serious health condition of the birth mother, and would not
be subject to the combined limit.
(4) The expectant mother is entitled
to FMLA leave for incapacity due to
pregnancy, for prenatal care, or for her
own serious health condition following
the birth of the child. Circumstances
may require that FMLA leave begin before the actual date of birth of a child.
An expectant mother may take FMLA
leave before the birth of the child for
prenatal care or if her condition makes
her unable to work. The expectant
mother is entitled to leave for incapacity due to pregnancy even though
she does not receive treatment from a
health care provider during the absence, and even if the absence does not
last for more than three consecutive
calendar days. For example, a pregnant
employee may be unable to report to
work because of severe morning sickness.
(5) A spouse is entitled to FMLA
leave if needed to care for a pregnant
spouse who is incapacitated or if needed to care for her during her prenatal
care, or if needed to care for her following the birth of a child if she has a
serious health condition. See § 825.124.
(6) Both parents are entitled to
FMLA leave if needed to care for a
child with a serious health condition if
the requirements of §§ 825.113 through
825.115 and 825.122(d) are met. Thus,
spouses may each take 12 weeks of
FMLA leave if needed to care for their
newborn child with a serious health
condition, even if both are employed by
the same employer, provided they have
not exhausted their entitlements during the applicable 12-month FMLA
leave period.
(b) Intermittent and reduced schedule
leave. An eligible employee may use
intermittent or reduced schedule leave
after the birth to be with a healthy
newborn child only if the employer
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§ 825.121
29 CFR Ch. V (7–1–19 Edition)
agrees. For example, an employer and
employee may agree to a part-time
work schedule after the birth. If the
employer agrees to permit intermittent or reduced schedule leave for the
birth of a child, the employer may require the employee to transfer temporarily, during the period the intermittent or reduced leave schedule is required, to an available alternative position for which the employee is qualified and which better accommodates
recurring periods of leave than does the
employee’s regular position. Transfer
to an alternative position may require
compliance with any applicable collective bargaining agreement, Federal law
(such as the Americans with Disabilities Act), and State law. Transfer to
an alternative position may include altering an existing job to better accommodate the employee’s need for intermittent or reduced leave. The employer’s agreement is not required for
intermittent leave required by the serious health condition of the expectant
mother
or
newborn
child.
See
§§ 825.202—825.205 for general rules governing the use of intermittent and reduced schedule leave. See § 825.121 for
rules governing leave for adoption or
foster care. See § 825.601 for special rules
applicable to instructional employees
of schools. See § 825.802 for special rules
applicable to airline flight crew employees.
[78 FR 8902, Feb. 6, 2013, as amended at 80 FR
10000, Feb. 25, 2015]
§ 825.121 Leave for adoption or foster
care.
(a) General rules. Eligible employees
are entitled to FMLA leave for placement with the employee of a son or
daughter for adoption or foster care as
follows:
(1) Employees may take FMLA leave
before the actual placement or adoption of a child if an absence from work
is required for the placement for adoption or foster care to proceed. For example, the employee may be required
to attend counseling sessions, appear
in court, consult with his or her attorney or the doctor(s) representing the
birth parent, submit to a physical examination, or travel to another country to complete an adoption. The
source of an adopted child (e.g., wheth-
er from a licensed placement agency or
otherwise) is not a factor in determining eligibility for leave for this
purpose.
(2) An employee’s entitlement to
leave for adoption or foster care expires at the end of the 12-month period
beginning on the date of the placement. If state law allows, or the employer permits, leave for adoption or
foster care to be taken beyond this period, such leave will not qualify as
FMLA leave. See § 825.701 regarding
non-FMLA leave which may be available under applicable State laws. Under
this section, the employee is entitled
to FMLA leave even if the adopted or
foster child does not have a serious
health condition.
(3) Spouses who are eligible for
FMLA leave and are employed by the
same covered employer may be limited
to a combined total of 12 weeks of leave
during any 12-month period if the leave
is taken for the placement of the employee’s son or daughter or to care for
the child after placement, for the birth
of the employee’s son or daughter or to
care for the child after birth, or to care
for the employee’s parent with a serious health condition. This limitation
on the total weeks of leave applies to
leave taken for the reasons specified as
long as the spouses are employed by
the same employer. It would apply, for
example, even though the spouses are
employed at two different worksites of
an employer located more than 75
miles from each other, or by two different operating divisions of the same
company. On the other hand, if one
spouse is ineligible for FMLA leave,
the other spouse would be entitled to a
full 12 weeks of FMLA leave. Where
spouses both use a portion of the total
12-week FMLA leave entitlement for
either the birth of a child, for placement for adoption or foster care, or to
care for a parent, the spouses would
each be entitled to the difference between the amount he or she has taken
individually and 12 weeks for FMLA
leave for other purposes. For example,
if each spouse took six weeks of leave
to care for a healthy, newly placed
child, each could use an additional six
weeks due to his or her own serious
health condition or to care for a child
with a serious health condition.
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Wage and Hour Division, Labor
§ 825.122
(4) An eligible employee is entitled to
FMLA leave in order to care for an
adopted or foster child with a serious
health condition if the requirements of
§§ 825.113 through 825.115 and 825.122(d)
are met. Thus, spouses may each take
12 weeks of FMLA leave if needed to
care for an adopted or foster child with
a serious health condition, even if both
are employed by the same employer,
provided they have not exhausted their
entitlements during the applicable 12month FMLA leave period.
(b) Use of intermittent and reduced
schedule leave. An eligible employee
may use intermittent or reduced schedule leave after the placement of a
healthy child for adoption or foster
care only if the employer agrees. Thus,
for example, the employer and employee may agree to a part-time work
schedule after the placement for bonding purposes. If the employer agrees to
permit intermittent or reduced schedule leave for the placement for adoption or foster care, the employer may
require the employee to transfer temporarily, during the period the intermittent or reduced leave schedule is required, to an available alternative position for which the employee is qualified and which better accommodates
recurring periods of leave than does the
employee’s regular position. Transfer
to an alternative position may require
compliance with any applicable collective bargaining agreement, federal law
(such as the Americans with Disabilities Act), and State law. Transfer to
an alternative position may include altering an existing job to better accommodate the employee’s need for intermittent or reduced leave. The employer’s agreement is not required for
intermittent leave required by the serious health condition of the adopted or
foster child. See §§ 825.202–825.205 for
general rules governing the use of
intermittent and reduced schedule
leave. See § 825.120 for general rules governing leave for pregnancy and birth of
a child. See § 825.601 for special rules applicable to instructional employees of
schools. See § 825.802 for special rules
applicable to airline flight crew employees.
[78 FR 8902, Feb. 6, 2013, as amended at 80 FR
10000, Feb. 25, 2015]
§ 825.122 Definitions of covered servicemember, spouse, parent, son or
daughter, next of kin of a covered
servicemember, adoption, foster
care, son or daughter on covered
active duty or call to covered active
duty status, son or daughter of a
covered servicemember, and parent
of a covered servicemember.
(a) Covered servicemember means: (1)
A current member of the Armed
Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation
or therapy, is otherwise in outpatient
status, or is otherwise on the temporary disability retired list, for a serious injury or illness; or
(2) A covered veteran who is undergoing medical treatment, recuperation,
or therapy for a serious injury or illness. Covered veteran means an individual who was a member of the Armed
Forces (including a member of the National Guard or Reserves), and was discharged or released under conditions
other than dishonorable at any time
during the five-year period prior to the
first date the eligible employee takes
FMLA leave to care for the covered
veteran. See § 825.127(b)(2).
(b) Spouse, as defined in the statute,
means a husband or wife. For purposes
of this definition, husband or wife refers to the other person with whom an
individual entered into marriage as defined or recognized under state law for
purposes of marriage in the State in
which the marriage was entered into
or, in the case of a marriage entered
into outside of any State, if the marriage is valid in the place where entered into and could have been entered
into in at least one State. This definition includes an individual in a samesex or common law marriage that either:
(1) Was entered into in a State that
recognizes such marriages; or
(2) If entered into outside of any
State, is valid in the place where entered into and could have been entered
into in at least one State.
(c) Parent. Parent means a biological,
adoptive, step or foster father or mother, or any other individual who stood
in loco parentis to the employee when
the employee was a son or daughter as
defined in paragraph (d) of this section.
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§ 825.122
29 CFR Ch. V (7–1–19 Edition)
This term does not include parents ‘‘in
law.’’
(d) Son or daughter. For purposes of
FMLA leave taken for birth or adoption, or to care for a family member
with a serious health condition, son or
daughter means a biological, adopted,
or foster child, a stepchild, a legal
ward, or a child of a person standing in
loco parentis, who is either under age
18, or age 18 or older and ‘‘incapable of
self-care because of a mental or physical disability’’ at the time that FMLA
leave is to commence.
(1) Incapable of self-care means that
the individual requires active assistance or supervision to provide daily
self-care in three or more of the activities of daily living (ADLs) or instrumental activities of daily living
(IADLs). Activities of daily living include adaptive activities such as caring
appropriately for one’s grooming and
hygiene, bathing, dressing and eating.
Instrumental activities of daily living
include cooking, cleaning, shopping,
taking public transportation, paying
bills, maintaining a residence, using
telephones and directories, using a post
office, etc.
(2) Physical or mental disability means
a physical or mental impairment that
substantially limits one or more of the
major life activities of an individual.
Regulations at 29 CFR 1630.2(h), (i), and
(j), issued by the Equal Employment
Opportunity Commission under the
Americans with Disabilities Act (ADA),
42 U.S.C. 12101 et seq., define these
terms.
(3) Persons who are ‘‘in loco
parentis’’ include those with day-today responsibilities to care for and financially support a child, or, in the
case of an employee, who had such responsibility for the employee when the
employee was a child. A biological or
legal relationship is not necessary.
(e) Next of kin of a covered servicemember means the nearest blood relative
other
than
the
covered
servicemember’s spouse, parent, son, or
daughter, in the following order of priority: blood relatives who have been
granted legal custody of the covered
servicemember by court decree or statutory provisions, brothers and sisters,
grandparents, aunts and uncles, and
first cousins, unless the covered serv-
icemember has specifically designated
in writing another blood relative as his
or her nearest blood relative for purposes of military caregiver leave under
the FMLA. When no such designation
is made, and there are multiple family
members with the same level of relationship to the covered servicemember,
all such family members shall be considered the covered servicemember’s
next of kin and may take FMLA leave
to provide care to the covered servicemember, either consecutively or simultaneously. When such designation has
been made, the designated individual
shall be deemed to be the covered
servicemember’s only next of kin. See
§ 825.127(d)(3).
(f) Adoption means legally and permanently assuming the responsibility of
raising a child as one’s own. The source
of an adopted child (e.g., whether from
a licensed placement agency or otherwise) is not a factor in determining eligibility for FMLA leave. See § 825.121
for rules governing leave for adoption.
(g) Foster care means 24-hour care for
children in substitution for, and away
from, their parents or guardian. Such
placement is made by or with the
agreement of the State as a result of a
voluntary agreement between the parent or guardian that the child be removed from the home, or pursuant to a
judicial determination of the necessity
for foster care, and involves agreement
between the State and foster family
that the foster family will take care of
the child. Although foster care may be
with relatives of the child, State action
is involved in the removal of the child
from parental custody. See § 825.121 for
rules governing leave for foster care.
(h) Son or daughter on covered active
duty or call to covered active duty status
means
the
employee’s
biological,
adopted, or foster child, stepchild,
legal ward, or a child for whom the employee stood in loco parentis, who is on
covered active duty or call to covered
active duty status, and who is of any
age. See § 825.126(a)(5).
(i) Son or daughter of a covered servicemember
means
the
covered
servicemember’s biological, adopted, or
foster child, stepchild, legal ward, or a
child for whom the covered servicemember stood in loco parentis, and
who is of any age. See § 825.127(d)(1).
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Wage and Hour Division, Labor
§ 825.125
(j) Parent of a covered servicemember
means a covered servicemember’s biological, adoptive, step or foster father
or mother, or any other individual who
stood in loco parentis to the covered
servicemember. This term does not include
parents
‘‘in
law.’’
See
§ 825.127(d)(2).
(k) Documenting relationships. For
purposes of confirmation of family relationship, the employer may require
the employee giving notice of the need
for leave to provide reasonable documentation or statement of family relationship. This documentation may
take the form of a simple statement
from the employee, or a child’s birth
certificate, a court document, etc. The
employer is entitled to examine documentation such as a birth certificate,
etc., but the employee is entitled to
the return of the official document submitted for this purpose.
[78 FR 8902, Feb. 6, 2013, as amended at 80 FR
10001, Feb. 25, 2015]
§ 825.123 Unable to perform the functions of the position.
(a) Definition. An employee is unable
to perform the functions of the position where the health care provider
finds that the employee is unable to
work at all or is unable to perform any
one of the essential functions of the
employee’s position within the meaning of the Americans with Disabilities
Act (ADA), as amended, 42 U.S.C. 12101
et seq., and the regulations at 29 CFR
1630.2(n). An employee who must be absent from work to receive medical
treatment for a serious health condition is considered to be unable to perform the essential functions of the position during the absence for treatment.
(b) Statement of functions. An employer has the option, in requiring certification from a health care provider,
to provide a statement of the essential
functions of the employee’s position for
the health care provider to review. A
sufficient medical certification must
specify what functions of the employee’s position the employee is unable to
perform so that the employer can then
determine whether the employee is unable to perform one or more essential
functions of the employee’s position.
For purposes of FMLA, the essential
functions of the employee’s position
are to be determined with reference to
the position the employee held at the
time notice is given or leave commenced, whichever is earlier. See
§ 825.306.
§ 825.124 Needed to care for a family
member or covered servicemember.
(a) The medical certification provision that an employee is needed to care
for a family member or covered servicemember encompasses both physical
and psychological care. It includes situations where, for example, because of
a serious health condition, the family
member is unable to care for his or her
own basic medical, hygienic, or nutritional needs or safety, or is unable to
transport himself or herself to the doctor. The term also includes providing
psychological comfort and reassurance
which would be beneficial to a child,
spouse or parent with a serious health
condition who is receiving inpatient or
home care.
(b) The term also includes situations
where the employee may be needed to
substitute for others who normally
care for the family member or covered
servicemember, or to make arrangements for changes in care, such as
transfer to a nursing home. The employee need not be the only individual
or family member available to care for
the family member or covered servicemember.
(c) An employee’s intermittent leave
or a reduced leave schedule necessary
to care for a family member or covered
servicemember includes not only a situation where the condition of the family member or covered servicemember
itself is intermittent, but also where
the employee is only needed intermittently—such as where other care is
normally available, or care responsibilities are shared with another member
of the family or a third party. See
§§ 825.202–825.205 for rules governing the
use of intermittent or reduced schedule
leave.
§ 825.125 Definition of health care provider.
(a) The Act defines health care provider as:
(1) A doctor of medicine or osteopathy who is authorized to practice
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§ 825.126
29 CFR Ch. V (7–1–19 Edition)
medicine or surgery (as appropriate) by
the State in which the doctor practices; or
(2) Any other person determined by
the Secretary to be capable of providing health care services.
(b) Others capable of providing health
care services include only:
(1) Podiatrists, dentists, clinical psychologists, optometrists, and chiropractors (limited to treatment consisting of manual manipulation of the
spine to correct a subluxation as demonstrated by X-ray to exist) authorized
to practice in the State and performing
within the scope of their practice as defined under State law;
(2) Nurse practitioners, nurse-midwives, clinical social workers and physician assistants who are authorized to
practice under State law and who are
performing within the scope of their
practice as defined under State law;
(3) Christian Science Practitioners
listed with the First Church of Christ,
Scientist in Boston, Massachusetts.
Where an employee or family member
is receiving treatment from a Christian
Science practitioner, an employee may
not object to any requirement from an
employer that the employee or family
member
submit
to
examination
(though not treatment) to obtain a second or third certification from a health
care provider other than a Christian
Science practitioner except as otherwise provided under applicable State or
local law or collective bargaining
agreement;
(4) Any health care provider from
whom an employer or the employer’s
group health plan’s benefits manager
will accept certification of the existence of a serious health condition to
substantiate a claim for benefits; and
(5) A health care provider listed
above who practices in a country other
than the United States, who is authorized to practice in accordance with the
law of that country, and who is performing within the scope of his or her
practice as defined under such law.
(c) The phrase authorized to practice
in the State as used in this section
means that the provider must be authorized to diagnose and treat physical
or mental health conditions.
§ 825.126 Leave because of a qualifying
exigency.
(a) Eligible employees may take
FMLA leave for a qualifying exigency
while the employee’s spouse, son,
daughter, or parent (the military member or member) is on covered active
duty or call to covered active duty status (or has been notified of an impending call or order to covered active
duty).
(1) Covered active duty or call to covered active duty status in the case of a
member of the Regular Armed Forces
means duty during the deployment of
the member with the Armed Forces to
a foreign country. The active duty orders of a member of the Regular components of the Armed Forces will generally specify if the member is deployed to a foreign country.
(2) Covered active duty or call to covered active duty status in the case of a
member of the Reserve components of
the Armed Forces means duty during
the deployment of the member with
the Armed Forces to a foreign country
under a Federal call or order to active
duty in support of a contingency operation pursuant to: Section 688 of Title
10 of the United States Code, which authorizes ordering to active duty retired
members of the Regular Armed Forces
and members of the retired Reserve
who retired after completing at least 20
years of active service; Section 12301(a)
of Title 10 of the United States Code,
which authorizes ordering all reserve
component members to active duty in
the case of war or national emergency;
Section 12302 of Title 10 of the United
States Code, which authorizes ordering
any unit or unassigned member of the
Ready Reserve to active duty; Section
12304 of Title 10 of the United States
Code, which authorizes ordering any
unit or unassigned member of the Selected Reserve and certain members of
the Individual Ready Reserve to active
duty; Section 12305 of Title 10 of the
United States Code, which authorizes
the suspension of promotion, retirement or separation rules for certain
Reserve components; Section 12406 of
Title 10 of the United States Code,
which authorizes calling the National
Guard into Federal service in certain
circumstances; chapter 15 of Title 10 of
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Wage and Hour Division, Labor
§ 825.126
the United States Code, which authorizes calling the National Guard and
state military into Federal service in
the case of insurrections and national
emergencies; or any other provision of
law during a war or during a national
emergency declared by the President or
Congress so long as it is in support of
a contingency operation. See 10 U.S.C.
101(a)(13)(B).
(i) For purposes of covered active
duty or call to covered active duty status, the Reserve components of the
Armed Forces include the Army National Guard of the United States,
Army Reserve, Navy Reserve, Marine
Corps Reserve, Air National Guard of
the United States, Air Force Reserve
and Coast Guard Reserve, and retired
members of the Regular Armed Forces
or Reserves who are called up in support of a contingency operation pursuant to one of the provisions of law
identified in paragraph (a)(2).
(ii) The active duty orders of a member of the Reserve components will
generally specify if the military member is serving in support of a contingency operation by citation to the relevant section of Title 10 of the United
States Code and/or by reference to the
specific name of the contingency operation and will specify that the deployment is to a foreign country.
(3) Deployment of the member with the
Armed Forces to a foreign country means
deployment to areas outside of the
United States, the District of Columbia, or any Territory or possession of
the United States, including international waters.
(4) A call to covered active duty for
purposes of leave taken because of a
qualifying exigency refers to a Federal
call to active duty. State calls to active duty are not covered unless under
order of the President of the United
States pursuant to one of the provisions of law identified in paragraph
(a)(2) of this section.
(5) Son or daughter on covered active
duty or call to covered active duty status
means
the
employee’s
biological,
adopted, or foster child, stepchild,
legal ward, or a child for whom the employee stood in loco parentis, who is on
covered active duty or call to covered
active duty status, and who is of any
age.
(b) An eligible employee may take
FMLA leave for one or more of the following qualifying exigencies:
(1) Short-notice deployment. (i) To address any issue that arises from the
fact that the military member is notified of an impending call or order to
covered active duty seven or less calendar days prior to the date of deployment;
(ii) Leave taken for this purpose can
be used for a period of seven calendar
days beginning on the date the military member is notified of an impending call or order to covered active
duty;
(2) Military events and related activities. (i) To attend any official ceremony, program, or event sponsored by
the military that is related to the covered active duty or call to covered active duty status of the military member; and
(ii) To attend family support or assistance programs and informational
briefings sponsored or promoted by the
military, military service organizations, or the American Red Cross that
are related to the covered active duty
or call to covered active duty status of
the military member;
(3) Childcare and school activities. For
the purposes of leave for childcare and
school activities listed in (i) through
(iv) of this paragraph, a child of the
military member must be the military
member’s biological, adopted, or foster
child, stepchild, legal ward, or child for
whom the military member stands in
loco parentis, who is either under 18
years of age or 18 years of age or older
and incapable of self-care because of a
mental or physical disability at the
time that FMLA leave is to commence.
As with all instances of qualifying exigency leave, the military member must
be the spouse, son, daughter, or parent
of the employee requesting qualifying
exigency leave.
(i) To arrange for alternative
childcare for a child of the military
member when the covered active duty
or call to covered active duty status of
the military member necessitates a
change in the existing childcare arrangement;
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§ 825.126
29 CFR Ch. V (7–1–19 Edition)
(ii) To provide childcare for a child of
the military member on an urgent, immediate need basis (but not on a routine, regular, or everyday basis) when
the need to provide such care arises
from the covered active duty or call to
covered active duty status of the military member;
(iii) To enroll in or transfer to a new
school or day care facility a child of
the military member when enrollment
or transfer is necessitated by the covered active duty or call to covered active duty status of the military member; and
(iv) To attend meetings with staff at
a school or a daycare facility, such as
meetings with school officials regarding disciplinary measures, parentteacher conferences, or meetings with
school counselors, for a child of the
military member, when such meetings
are necessary due to circumstances
arising from the covered active duty or
call to covered active duty status of
the military member;
(4) Financial and legal arrangements.
(i) To make or update financial or legal
arrangements to address the military
member’s absence while on covered active duty or call to covered active duty
status, such as preparing and executing
financial and healthcare powers of attorney, transferring bank account signature authority, enrolling in the Defense Enrollment Eligibility Reporting
System (DEERS), obtaining military
identification cards, or preparing or
updating a will or living trust; and
(ii) To act as the military member’s
representative before a federal, state,
or local agency for purposes of obtaining, arranging, or appealing military
service benefits while the military
member is on covered active duty or
call to covered active duty status, and
for a period of 90 days following the
termination of the military member’s
covered active duty status;
(5) Counseling. To attend counseling
provided by someone other than a
health care provider, for oneself, for
the military member, or for the biological, adopted, or foster child, a stepchild, or a legal ward of the military
member, or a child for whom the military member stands in loco parentis,
who is either under age 18, or age 18 or
older and incapable of self-care because
of a mental or physical disability at
the time that FMLA leave is to commence, provided that the need for
counseling arises from the covered active duty or call to covered active duty
status of the military member;
(6) Rest and Recuperation. (i) To spend
time with the military member who is
on short-term, temporary, Rest and
Recuperation leave during the period of
deployment;
(ii) Leave taken for this purpose can
be used for a period of 15 calendar days
beginning on the date the military
member commences each instance of
Rest and Recuperation leave;
(7) Post-deployment activities. (i) To attend arrival ceremonies, reintegration
briefings and events, and any other official ceremony or program sponsored
by the military for a period of 90 days
following the termination of the military member’s covered active duty status; and
(ii) To address issues that arise from
the death of the military member
while on covered active duty status,
such as meeting and recovering the
body of the military member, making
funeral arrangements, and attending
funeral services;
(8) Parental care. For purposes of
leave for parental care listed in (i)
through (iv) of this paragraph, the parent of the military member must be incapable of self-care and must be the
military member’s biological, adoptive,
step, or foster father or mother, or any
other individual who stood in loco
parentis to the military member when
the member was under 18 years of age.
A parent who is incapable of self-care
means that the parent requires active
assistance or supervision to provide
daily self-care in three or more of the
activities of daily living or instrumental activities of daily living. Activities of daily living include adaptive
activities such as caring appropriately
for one’s grooming and hygiene, bathing, dressing, and eating. Instrumental
activities of daily living include cooking, cleaning, shopping, taking public
transportation, paying bills, maintaining a residence, using telephones and
directories, using a post office, etc. As
with all instances of qualifying exigency leave, the military member must
be the spouse, son, daughter, or parent
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Wage and Hour Division, Labor
§ 825.127
of the employee requesting qualifying
exigency leave.
(i) To arrange for alternative care for
a parent of the military member when
the parent is incapable of self-care and
the covered active duty or call to covered active duty status of the military
member necessitates a change in the
existing care arrangement for the parent;
(ii) To provide care for a parent of
the military member on an urgent, immediate need basis (but not on a routine, regular, or everyday basis) when
the parent is incapable of self-care and
the need to provide such care arises
from the covered active duty or call to
covered active duty status of the military member;
(iii) To admit to or transfer to a care
facility a parent of the military member when admittance or transfer is necessitated by the covered active duty
or call to covered active duty status of
the military member; and
(iv) To attend meetings with staff at
a care facility, such as meetings with
hospice or social service providers for a
parent of the military member, when
such meetings are necessary due to circumstances arising from the covered
active duty or call to covered active
duty status of the military member but
not for routine or regular meetings;
(9) Additional activities. To address
other events which arise out of the
military member’s covered active duty
or call to covered active duty status
provided that the employer and employee agree that such leave shall qualify as an exigency, and agree to both
the timing and duration of such leave.
§ 825.127 Leave to care for a covered
servicemember with a serious injury or illness (military caregiver
leave).
(a) Eligible employees are entitled to
FMLA leave to care for a covered servicemember with a serious illness or injury.
(b) Covered servicemember means:
(1) A current member of the Armed
Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation,
or therapy, is otherwise in outpatient
status; or is otherwise on the temporary disability retired list, for a seri-
ous injury or illness. Outpatient status
means the status of a member of the
Armed Forces assigned to either a
military medical treatment facility as
an outpatient or a unit established for
the purpose of providing command and
control of members of the Armed
Forces receiving medical care as outpatients.
(2) A covered veteran who is undergoing medical treatment, recuperation
or therapy for a serious injury or illness. Covered veteran means an individual who was a member of the Armed
Forces (including a member of the National Guard or Reserves), and was discharged or released under conditions
other than dishonorable at any time
during the five-year period prior to the
first date the eligible employee takes
FMLA leave to care for the covered
veteran. An eligible employee must
commence leave to care for a covered
veteran within five years of the veteran’s active duty service, but the single 12-month period described in paragraph (e)(1) of this section may extend
beyond the five-year period.
(i) For an individual who was a member of the Armed Forces (including a
member of the National Guard or Reserves) and who was discharged or released under conditions other than dishonorable prior to the effective date of
this Final Rule, the period between October 28, 2009 and the effective date of
this Final Rule shall not count towards
the determination of the five-year period for covered veteran status.
(c) A serious injury or illness means:
(1) In the case of a current member of
the Armed Forces, including a member
of the National Guard or Reserves,
means an injury or illness that was incurred by the covered servicemember
in the line of duty on active duty in
the Armed Forces or that existed before the beginning of the member’s active duty and was aggravated by service in the line of duty on active duty in
the Armed Forces, and that may render
the member medically unfit to perform
the duties of the member’s office,
grade, rank or rating; and,
(2) In the case of a covered veteran,
means an injury or illness that was incurred by the member in the line of
duty on active duty in the Armed
Forces (or existed before the beginning
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§ 825.127
29 CFR Ch. V (7–1–19 Edition)
of the member’s active duty and was
aggravated by service in the line of
duty on active duty in the Armed
Forces) and manifested itself before or
after the member became a veteran,
and is:
(i) a continuation of a serious injury
or illness that was incurred or aggravated when the covered veteran was a
member of the Armed Forces and rendered the servicemember unable to perform the duties of the servicemember’s
office, grade, rank, or rating; or
(ii) a physical or mental condition
for which the covered veteran has received a U.S. Department of Veterans
Affairs Service-Related Disability Rating (VASRD) of 50 percent or greater,
and such VASRD rating is based, in
whole or in part, on the condition precipitating the need for military caregiver leave; or
(iii) a physical or mental condition
that substantially impairs the covered
veteran’s ability to secure or follow a
substantially gainful occupation by
reason of a disability or disabilities related to military service, or would do
so absent treatment; or
(iv) an injury, including a psychological injury, on the basis of which
the covered veteran has been enrolled
in the Department of Veterans Affairs
Program of Comprehensive Assistance
for Family Caregivers.
(d) In order to care for a covered
servicemember, an eligible employee
must be the spouse, son, daughter, or
parent, or next of kin of a covered servicemember.
(1) Son or daughter of a covered servicemember
means
the
covered
servicemember’s biological, adopted, or
foster child, stepchild, legal ward, or a
child for whom the covered servicemember stood in loco parentis, and
who is of any age.
(2) Parent of a covered servicemember
means a covered servicemember’s biological, adoptive, step or foster father
or mother, or any other individual who
stood in loco parentis to the covered
servicemember. This term does not include parents ‘‘in law.’’
(3) Next of kin of a covered servicemember means the nearest blood relative,
other
than
the
covered
servicemember’s spouse, parent, son, or
daughter, in the following order of pri-
ority: blood relatives who have been
granted legal custody of the servicemember by court decree or statutory
provisions, brothers and sisters, grandparents, aunts and uncles, and first
cousins, unless the covered servicemember has specifically designated in
writing another blood relative as his or
her nearest blood relative for purposes
of military caregiver leave under the
FMLA. When no such designation is
made, and there are multiple family
members with the same level of relationship to the covered servicemember,
all such family members shall be considered the covered servicemember’s
next of kin and may take FMLA leave
to provide care to the covered servicemember, either consecutively or simultaneously. When such designation has
been made, the designated individual
shall be deemed to be the covered
servicemember’s only next of kin. For
example, if a covered servicemember
has three siblings and has not designated a blood relative to provide
care, all three siblings would be considered the covered servicemember’s next
of kin. Alternatively, where a covered
servicemember has a sibling(s) and designates a cousin as his or her next of
kin for FMLA purposes, then only the
designated cousin is eligible as the covered servicemember’s next of kin. An
employer is permitted to require an
employee to provide confirmation of
covered family relationship to the covered
servicemember
pursuant
to
§ 825.122(k).
(e) An eligible employee is entitled to
26 workweeks of leave to care for a covered servicemember with a serious injury or illness during a single 12-month
period.
(1) The single 12-month period described in paragraph (e) of this section
begins on the first day the eligible employee takes FMLA leave to care for a
covered servicemember and ends 12
months after that date, regardless of
the method used by the employer to determine the employee’s 12 workweeks
of leave entitlement for other FMLAqualifying reasons. If an eligible employee does not take all of his or her 26
workweeks of leave entitlement to care
for a covered servicemember during
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Wage and Hour Division, Labor
§ 825.127
this single 12-month period, the remaining part of his or her 26 workweeks of leave entitlement to care for
the covered servicemember is forfeited.
(2) The leave entitlement described
in paragraph (e) of this section is to be
applied on a per-covered-servicemember, per-injury basis such that an eligible employee may be entitled to take
more than one period of 26 workweeks
of leave if the leave is to care for different covered servicemembers or to
care for the same servicemember with
a subsequent serious injury or illness,
except that no more than 26 workweeks
of leave may be taken within any single 12-month period. An eligible employee may take more than one period
of 26 workweeks of leave to care for a
covered servicemember with more than
one serious injury or illness only when
the serious injury or illness is a subsequent serious injury or illness. When
an eligible employee takes leave to
care for more than one covered servicemember or for a subsequent serious injury or illness of the same covered
servicemember, and the single 12month periods corresponding to the different military caregiver leave entitlements overlap, the employee is limited
to taking no more than 26 workweeks
of leave in each single 12-month period.
(3) An eligible employee is entitled to
a combined total of 26 workweeks of
leave for any FMLA-qualifying reason
during the single 12-month period described in paragraph (e) of this section,
provided that the employee is entitled
to no more than 12 workweeks of leave
for one or more of the following: because of the birth of a son or daughter
of the employee and in order to care for
such son or daughter; because of the
placement of a son or daughter with
the employee for adoption or foster
care; in order to care for the spouse,
son, daughter, or parent with a serious
health condition; because of the employee’s own serious health condition;
or because of a qualifying exigency.
Thus, for example, an eligible employee may, during the single 12-month
period, take 16 workweeks of FMLA
leave to care for a covered servicemember and 10 workweeks of FMLA leave
to care for a newborn child. However,
the employee may not take more than
12 weeks of FMLA leave to care for the
newborn child during the single 12month period, even if the employee
takes fewer than 14 workweeks of
FMLA leave to care for a covered servicemember.
(4) In all circumstances, including for
leave taken to care for a covered servicemember, the employer is responsible
for designating leave, paid or unpaid,
as FMLA-qualifying, and for giving notice of the designation to the employee
as provided in § 825.300. In the case of
leave that qualifies as both leave to
care for a covered servicemember and
leave to care for a family member with
a serious health condition during the
single 12-month period described in
paragraph (e) of this section, the employer must designate such leave as
leave to care for a covered servicemember in the first instance. Leave that
qualifies as both leave to care for a
covered servicemember and leave
taken to care for a family member with
a serious health condition during the
single 12-month period described in
paragraph (e) of this section must not
be designated and counted as both
leave to care for a covered servicemember and leave to care for a family member with a serious health condition. As
is the case with leave taken for other
qualifying reasons, employers may
retroactively designate leave as leave
to care for a covered servicemember
pursuant to § 825.301(d).
(f) Spouses who are eligible for
FMLA leave and are employed by the
same covered employer may be limited
to a combined total of 26 workweeks of
leave during the single 12-month period
described in paragraph (e) of this section if the leave is taken for birth of
the employee’s son or daughter or to
care for the child after birth, for placement of a son or daughter with the employee for adoption or foster care, or to
care for the child after placement, to
care for the employee’s parent with a
serious health condition, or to care for
a covered servicemember with a serious injury or illness. This limitation
on the total weeks of leave applies to
leave taken for the reasons specified as
long as the spouses are employed by
the same employer. It would apply, for
example, even though the spouses are
employed at two different worksites of
an employer located more than 75
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§ 825.200
29 CFR Ch. V (7–1–19 Edition)
miles from each other, or by two different operating divisions of the same
company. On the other hand, if one
spouse is ineligible for FMLA leave,
the other spouse would be entitled to a
full 26 workweeks of FMLA leave.
[78 FR 8902, Feb. 6, 2013, as amended at 80 FR
10001, Feb. 25, 2015]
Subpart B—Employee Leave Entitlements Under the Family
and Medical Leave Act
§ 825.200
Amount of leave.
(a) Except in the case of leave to care
for a covered servicemember with a serious injury or illness, an eligible employee’s FMLA leave entitlement is
limited to a total of 12 workweeks of
leave during any 12-month period for
any one, or more, of the following reasons:
(1) The birth of the employee’s son or
daughter, and to care for the newborn
child;
(2) The placement with the employee
of a son or daughter for adoption or
foster care, and to care for the newly
placed child;
(3) To care for the employee’s spouse,
son, daughter, or parent with a serious
health condition;
(4) Because of a serious health condition that makes the employee unable
to perform one or more of the essential
functions of his or her job; and,
(5) Because of any qualifying exigency arising out of the fact that the
employee’s spouse, son, daughter, or
parent is a military member on covered active duty status (or has been notified of an impending call or order to
covered active duty).
(b) An employer is permitted to
choose any one of the following methods for determining the 12-month period in which the 12 weeks of leave entitlement described in paragraph (a) of
this section occurs:
(1) The calendar year;
(2) Any fixed 12-month leave year,
such as a fiscal year, a year required by
State law, or a year starting on an employee’s anniversary date;
(3) The 12-month period measured
forward from the date any employee’s
first FMLA leave under paragraph (a)
begins; or,
(4) A ‘‘rolling’’ 12-month period measured backward from the date an employee uses any FMLA leave as described in paragraph (a).
(c) Under methods in paragraphs
(b)(1) and (b)(2) of this section an employee would be entitled to up to 12
weeks of FMLA leave at any time in
the fixed 12-month period selected. An
employee could, therefore, take 12
weeks of leave at the end of the year
and 12 weeks at the beginning of the
following year. Under the method in
paragraph (b)(3) of this section, an employee would be entitled to 12 weeks of
leave during the year beginning on the
first date FMLA leave is taken; the
next 12-month period would begin the
first time FMLA leave is taken after
completion of any previous 12-month
period. Under the method in paragraph
(b)(4) of this section, the ‘‘rolling’’ 12month period, each time an employee
takes FMLA leave the remaining leave
entitlement would be any balance of
the 12 weeks which has not been used
during the immediately preceding 12
months. For example, if an employee
has taken eight weeks of leave during
the past 12 months, an additional four
weeks of leave could be taken. If an
employee used four weeks beginning
February 1, 2008, four weeks beginning
June 1, 2008, and four weeks beginning
December 1, 2008, the employee would
not be entitled to any additional leave
until February 1, 2009. However, beginning on February 1, 2009, the employee
would again be eligible to take FMLA
leave, recouping the right to take the
leave in the same manner and amounts
in which it was used in the previous
year. Thus, the employee would recoup
(and be entitled to use) one additional
day of FMLA leave each day for four
weeks, commencing February 1, 2009.
The employee would also begin to recoup additional days beginning on June
1, 2009, and additional days beginning
on December 1, 2009. Accordingly, employers using the rolling 12-month period may need to calculate whether the
employee is entitled to take FMLA
leave each time that leave is requested,
and employees taking FMLA leave on
such a basis may fall in and out of
FMLA protection based on their FMLA
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Wage and Hour Division, Labor
§ 825.201
usage in the prior 12 months. For example, in the example above, if the employee needs six weeks of leave for a
serious health condition commencing
February 1, 2009, only the first four
weeks of the leave would be FMLA protected.
(d)(1) Employers will be allowed to
choose any one of the alternatives in
paragraph (b) of this section for the
leave entitlements described in paragraph (a) of this section provided the
alternative chosen is applied consistently and uniformly to all employees.
An employer wishing to change to another alternative is required to give at
least 60 days notice to all employees,
and the transition must take place in
such a way that the employees retain
the full benefit of 12 weeks of leave
under whichever method affords the
greatest benefit to the employee.
Under no circumstances may a new
method be implemented in order to
avoid the Act’s leave requirements.
(2) An exception to this required uniformity would apply in the case of a
multi-State employer who has eligible
employees in a State which has a family and medical leave statute. The
State may require a single method of
determining the period during which
use of the leave entitlement is measured. This method may conflict with
the method chosen by the employer to
determine any 12 months for purposes
of the Federal statute. The employer
may comply with the State provision
for all employees employed within that
State, and uniformly use another
method provided by this regulation for
the leave entitlements described in
paragraph (a) for all other employees.
(e) If an employer fails to select one
of the options in paragraph (b) of this
section for measuring the 12-month period for the leave entitlements described in paragraph (a), the option
that provides the most beneficial outcome for the employee will be used.
The employer may subsequently select
an option only by providing the 60-day
notice to all employees of the option
the employer intends to implement.
During the running of the 60-day period
any other employee who needs FMLA
leave may use the option providing the
most beneficial outcome to that employee. At the conclusion of the 60-day
period the employer may implement
the selected option.
(f) An eligible employee’s FMLA
leave entitlement is limited to a total
of 26 workweeks of leave during a single 12-month period to care for a covered servicemember with a serious injury or illness. An employer shall determine the single 12-month period in
which the 26-weeks-of-leave-entitlement described in this paragraph occurs using the 12-month period measured forward from the date an employee’s first FMLA leave to care for the
covered servicemember begins. See
§ 825.127(e)(1).
(g) During the single 12-month period
described in paragraph (f), an eligible
employee’s FMLA leave entitlement is
limited to a combined total of 26 workweeks of FMLA leave for any qualifying reason. See § 825.127(e)(3).
(h) For purposes of determining the
amount of leave used by an employee,
the fact that a holiday may occur within the week taken as FMLA leave has
no effect; the week is counted as a
week of FMLA leave. However, if an
employee is using FMLA leave in increments of less than one week, the
holiday will not count against the employee’s FMLA entitlement unless the
employee was otherwise scheduled and
expected to work during the holiday.
Similarly, if for some reason the employer’s business activity has temporarily ceased and employees generally
are not expected to report for work for
one or more weeks (e.g., a school closing two weeks for the Christmas/New
Year holiday or the summer vacation
or an employer closing the plant for retooling or repairs), the days the employer’s activities have ceased do not
count against the employee’s FMLA
leave entitlement. Methods for determining an employee’s 12-week leave entitlement are also described in § 825.205.
See § 825.802 for special calculation of
leave rules applicable to airline flight
crew employees.
§ 825.201
Leave to care for a parent.
(a) General rule. An eligible employee
is entitled to FMLA leave if needed to
care for the employee’s parent with a
serious health condition. Care for parents-in-law is not covered by the
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§ 825.202
29 CFR Ch. V (7–1–19 Edition)
FMLA. See § 825.122(c) for definition of
parent.
(b) Same employer limitation. Spouses
who are eligible for FMLA leave and
are employed by the same covered employer may be limited to a combined
total of 12 weeks of leave during any
12-month period if the leave is taken to
care for the employee’s parent with a
serious health condition, for the birth
of the employee’s son or daughter or to
care for the child after the birth, or for
placement of a son or daughter with
the employee for adoption or foster
care or to care for the child after placement. This limitation on the total
weeks of leave applies to leave taken
for the reasons specified as long as the
spouses are employed by the same employer. It would apply, for example,
even though the spouses are employed
at two different worksites of an employer located more than 75 miles from
each other, or by two different operating divisions of the same company.
On the other hand, if one spouse is ineligible for FMLA leave, the other
spouse would be entitled to a full 12
weeks of FMLA leave. Where the
spouses both use a portion of the total
12-week FMLA leave entitlement for
either the birth of a child, for placement for adoption or foster care, or to
care for a parent, the spouses would
each be entitled to the difference between the amount he or she has taken
individually and 12 weeks for FMLA
leave for other purposes. For example,
if each spouse took six weeks of leave
to care for a parent, each could use an
additional six weeks due to his or her
own serious health condition or to care
for a child with a serious health condition. See also § 825.127(d).
[78 FR 8902, Feb. 6, 2013, as amended at 80 FR
10001, Feb. 25, 2015]
§ 825.202 Intermittent leave or reduced
leave schedule.
(a) Definition. FMLA leave may be
taken intermittently or on a reduced
leave schedule under certain circumstances. Intermittent leave is FMLA
leave taken in separate blocks of time
due to a single qualifying reason. A reduced leave schedule is a leave schedule
that reduces an employee’s usual number of working hours per workweek, or
hours per workday. A reduced leave
schedule is a change in the employee’s
schedule for a period of time, normally
from full-time to part-time.
(b) Medical necessity. For intermittent leave or leave on a reduced leave
schedule taken because of one’s own serious health condition, to care for a
spouse, parent, son, or daughter with a
serious health condition, or to care for
a covered servicemember with a serious injury or illness, there must be a
medical need for leave and it must be
that such medical need can be best accommodated through an intermittent
or reduced leave schedule. The treatment regimen and other information
described in the certification of a serious health condition and in the certification of a serious injury or illness, if
required by the employer, addresses
the medical necessity of intermittent
leave or leave on a reduced leave schedule. See §§ 825.306, 825.310. Leave may be
taken intermittently or on a reduced
leave schedule when medically necessary for planned and/or unanticipated
medical treatment of a serious health
condition
or
of
a
covered
servicemember’s serious injury or illness, or for recovery from treatment or
recovery from a serious health condition or a covered servicemember’s serious injury or illness. It may also be
taken to provide care or psychological
comfort to a covered family member
with a serious health condition or a
covered servicemember with a serious
injury or illness.
(1) Intermittent leave may be taken
for a serious health condition of a
spouse, parent, son, or daughter, for
the employee’s own serious health condition, or a serious injury or illness of
a covered servicemember which requires treatment by a health care provider periodically, rather than for one
continuous period of time, and may include leave of periods from an hour or
more to several weeks. Examples of
intermittent leave would include leave
taken on an occasional basis for medical appointments, or leave taken several days at a time spread over a period
of six months, such as for chemotherapy. A pregnant employee may
take leave intermittently for prenatal
examinations or for her own condition,
such as for periods of severe morning
sickness. An example of an employee
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Wage and Hour Division, Labor
§ 825.204
taking leave on a reduced leave schedule is an employee who is recovering
from a serious health condition and is
not strong enough to work a full-time
schedule.
(2) Intermittent or reduced schedule
leave may be taken for absences where
the employee or family member is incapacitated or unable to perform the
essential functions of the position because of a chronic serious health condition or a serious injury or illness of a
covered servicemember, even if he or
she does not receive treatment by a
health care provider. See §§ 825.113 and
825.127.
(c) Birth or placement. When leave is
taken after the birth of a healthy child
or placement of a healthy child for
adoption or foster care, an employee
may take leave intermittently or on a
reduced leave schedule only if the employer agrees. Such a schedule reduction might occur, for example, where
an employee, with the employer’s
agreement, works part-time after the
birth of a child, or takes leave in several segments. The employer’s agreement is not required, however, for
leave during which the expectant
mother has a serious health condition
in connection with the birth of her
child or if the newborn child has a serious health condition. See § 825.204 for
rules governing transfer to an alternative position that better accommodates intermittent leave. See also
§ 825.120 (pregnancy) and § 825.121 (adoption and foster care).
(d) Qualifying exigency. Leave due to
a qualifying exigency may be taken on
an intermittent or reduced leave schedule basis.
[78 FR 8902, Feb. 6, 2013, as amended at 80 FR
10001, Feb. 25, 2015]
§ 825.203 Scheduling of intermittent or
reduced schedule leave.
Eligible employees may take FMLA
leave on an intermittent or reduced
schedule basis when medically necessary due to the serious health condition of a covered family member or the
employee or the serious injury or illness of a covered servicemember. See
§ 825.202. Eligible employees may also
take FMLA leave on an intermittent or
reduced schedule basis when necessary
because of a qualifying exigency. If an
employee needs leave intermittently or
on a reduced leave schedule for planned
medical treatment, then the employee
must make a reasonable effort to
schedule the treatment so as not to
disrupt unduly the employer’s operations.
§ 825.204 Transfer of an employee to
an alternative position during
intermittent leave or reduced
schedule leave.
(a) Transfer or reassignment. If an employee needs intermittent leave or
leave on a reduced leave schedule that
is foreseeable based on planned medical
treatment for the employee, a family
member, or a covered servicemember,
including during a period of recovery
from one’s own serious health condition, a serious health condition of a
spouse, parent, son, or daughter, or a
serious injury or illness of a covered
servicemember, or if the employer
agrees to permit intermittent or reduced schedule leave for the birth of a
child or for placement of a child for
adoption or foster care, the employer
may require the employee to transfer
temporarily, during the period that the
intermittent or reduced leave schedule
is required, to an available alternative
position for which the employee is
qualified and which better accommodates recurring periods of leave than
does the employee’s regular position.
See § 825.601 for special rules applicable
to instructional employees of schools.
(b) Compliance. Transfer to an alternative position may require compliance with any applicable collective
bargaining agreement, Federal law
(such as the Americans with Disabilities Act), and State law. Transfer to
an alternative position may include altering an existing job to better accommodate the employee’s need for intermittent or reduced schedule leave.
(c) Equivalent pay and benefits. The alternative position must have equivalent pay and benefits. An alternative
position for these purposes does not
have to have equivalent duties. The
employer may increase the pay and
benefits of an existing alternative position, so as to make them equivalent to
the pay and benefits of the employee’s
regular job. The employer may also
transfer the employee to a part-time
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§ 825.205
29 CFR Ch. V (7–1–19 Edition)
job with the same hourly rate of pay
and benefits, provided the employee is
not required to take more leave than is
medically necessary. For example, an
employee desiring to take leave in increments of four hours per day could be
transferred to a half-time job, or could
remain in the employee’s same job on a
part-time schedule, paying the same
hourly rate as the employee’s previous
job and enjoying the same benefits.
The employer may not eliminate benefits which otherwise would not be provided to part-time employees; however,
an employer may proportionately reduce benefits such as vacation leave
where an employer’s normal practice is
to base such benefits on the number of
hours worked.
(d) Employer limitations. An employer
may not transfer the employee to an
alternative position in order to discourage the employee from taking
leave or otherwise work a hardship on
the employee. For example, a white
collar employee may not be assigned to
perform laborer’s work; an employee
working the day shift may not be reassigned to the graveyard shift; an employee working in the headquarters facility may not be reassigned to a
branch a significant distance away
from the employee’s normal job location. Any such attempt on the part of
the employer to make such a transfer
will be held to be contrary to the prohibited acts of the FMLA.
(e) Reinstatement of employee. When an
employee who is taking leave intermittently or on a reduced leave schedule
and has been transferred to an alternative position no longer needs to continue on leave and is able to return to
full-time work, the employee must be
placed in the same or equivalent job as
the job he or she left when the leave
commenced. An employee may not be
required to take more leave than necessary to address the circumstance
that precipitated the need for leave.
§ 825.205 Increments of FMLA leave
for intermittent or reduced schedule leave.
(a) Minimum increment. (1) When an
employee takes FMLA leave on an
intermittent or reduced leave schedule
basis, the employer must account for
the leave using an increment no great-
er than the shortest period of time that
the employer uses to account for use of
other forms of leave provided that it is
not greater than one hour and provided
further that an employee’s FMLA leave
entitlement may not be reduced by
more than the amount of leave actually taken. An employer may not require an employee to take more leave
than is necessary to address the circumstances that precipitated the need
for the leave, provided that the leave is
counted using the shortest increment
of leave used to account for any other
type of leave. See also § 825.205(a)(2) for
the physical impossibility exception,
§§ 825.600 and 825.601 for special rules
applicable to employees of schools, and
§ 825.802 for special rules applicable to
airline flight crew employees. If an employer uses different increments to account for different types of leave, the
employer must account for FMLA
leave in the smallest increment used to
account for any other type of leave.
For example, if an employer accounts
for the use of annual leave in increments of one hour and the use of sick
leave in increments of one-half hour,
then FMLA leave use must be accounted for using increments no larger
than one-half hour. If an employer accounts for use of leave in varying increments at different times of the day
or shift, the employer may also account for FMLA leave in varying increments, provided that the increment
used for FMLA leave is no greater than
the smallest increment used for any
other type of leave during the period in
which the FMLA leave is taken. If an
employer accounts for other forms of
leave use in increments greater than
one hour, the employer must account
for FMLA leave use in increments no
greater than one hour. An employer
may account for FMLA leave in shorter increments than used for other
forms of leave. For example, an employer that accounts for other forms of
leave in one hour increments may account for FMLA leave in a shorter increment when the employee arrives at
work several minutes late, and the employer wants the employee to begin
work immediately. Such accounting
for FMLA leave will not alter the increment considered to be the shortest
period used to account for other forms
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Wage and Hour Division, Labor
§ 825.205
of leave or the use of FMLA leave in
other circumstances. In all cases, employees may not be charged FMLA
leave for periods during which they are
working.
(2) Where it is physically impossible
for an employee using intermittent
leave or working a reduced leave schedule to commence or end work mid-way
through a shift, such as where a flight
attendant or a railroad conductor is
scheduled to work aboard an airplane
or train, or a laboratory employee is
unable to enter or leave a sealed ‘‘clean
room’’ during a certain period of time
and no equivalent position is available,
the entire period that the employee is
forced to be absent is designated as
FMLA leave and counts against the
employee’s FMLA entitlement. The period of the physical impossibility is
limited to the period during which the
employer is unable to permit the employee to work prior to a period of
FMLA leave or return the employee to
the same or equivalent position due to
the physical impossibility after a period of FMLA leave. See § 825.214.
(b) Calculation of leave. (1) When an
employee takes leave on an intermittent or reduced leave schedule, only
the amount of leave actually taken
may be counted toward the employee’s
leave entitlement. The actual workweek is the basis of leave entitlement.
Therefore, if an employee who would
otherwise work 40 hours a week takes
off eight hours, the employee would use
one-fifth (1⁄5) of a week of FMLA leave.
Similarly, if a full-time employee who
would otherwise work eight hour days
works four-hour days under a reduced
leave schedule, the employee would use
one-half (1⁄2) week of FMLA leave.
Where an employee works a part-time
schedule or variable hours, the amount
of FMLA leave that an employee uses
is determined on a pro rata or proportional basis. If an employee who would
otherwise work 30 hours per week, but
works only 20 hours a week under a reduced leave schedule, the employee’s 10
hours of leave would constitute onethird (1⁄3) of a week of FMLA leave for
each week the employee works the reduced leave schedule. An employer
may convert these fractions to their
hourly equivalent so long as the conversion equitably reflects the employ-
ee’s total normally scheduled hours.
An employee does not accrue FMLAprotected leave at any particular hourly rate. An eligible employee is entitled to up to a total of 12 workweeks of
leave, or 26 workweeks in the case of
military caregiver leave, and the total
number of hours contained in those
workweeks is necessarily dependent on
the specific hours the employee would
have worked but for the use of leave.
See also §§ 825.601 and 825.602, special
rules for schools and § 825.802, special
rules for airline flight crew employees.
(2) If an employer has made a permanent or long-term change in the employee’s schedule (for reasons other
than FMLA, and prior to the notice of
need for FMLA leave), the hours
worked under the new schedule are to
be used for making this calculation.
(3) If an employee’s schedule varies
from week to week to such an extent
that an employer is unable to determine with any certainty how many
hours the employee would otherwise
have worked (but for the taking of
FMLA leave), a weekly average of the
hours scheduled over the 12 months
prior to the beginning of the leave period (including any hours for which the
employee took leave of any type) would
be used for calculating the employee’s
leave entitlement.
(c) Overtime. If an employee would
normally be required to work overtime,
but is unable to do so because of a
FMLA-qualifying reason that limits
the employee’s ability to work overtime, the hours which the employee
would have been required to work may
be counted against the employee’s
FMLA entitlement. In such a case, the
employee is using intermittent or reduced schedule leave. For example, if
an employee would normally be required to work for 48 hours in a particular week, but due to a serious
health condition the employee is unable to work more than 40 hours that
week, the employee would utilize eight
hours of FMLA-protected leave out of
the 48-hour workweek, or one-sixth (1⁄6)
of a week of FMLA leave. Voluntary
overtime hours that an employee does
not work due to an FMLA-qualifying
reason may not be counted against the
employee’s FMLA leave entitlement.
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§ 825.206
29 CFR Ch. V (7–1–19 Edition)
§ 825.206 Interaction with the FLSA.
(a) Leave taken under FMLA may be
unpaid. If an employee is otherwise exempt from minimum wage and overtime requirements of the Fair Labor
Standards Act (FLSA) as a salaried executive, administrative, professional,
or computer employee (under regulations issued by the Secretary, 29 CFR
part 541), providing unpaid FMLAqualifying leave to such an employee
will not cause the employee to lose the
FLSA
exemption.
See
29
CFR
541.602(b)(7). This means that under
regulations currently in effect, where
an employee meets the specified duties
test, is paid on a salary basis, and is
paid a salary of at least the amount
specified in the regulations, the employer may make deductions from the
employee’s salary for any hours taken
as intermittent or reduced FMLA leave
within a workweek, without affecting
the exempt status of the employee. The
fact that an employer provides FMLA
leave, whether paid or unpaid, and
maintains records required by this part
regarding FMLA leave, will not be relevant to the determination whether an
employee is exempt within the meaning of 29 CFR part 541.
(b) For an employee paid in accordance with the fluctuating workweek
method of payment for overtime (see 29
CFR 778.114), the employer, during the
period in which intermittent or reduced schedule FMLA leave is scheduled to be taken, may compensate an
employee on an hourly basis and pay
only for the hours the employee works,
including time and one-half the employee’s regular rate for overtime
hours. The change to payment on an
hourly basis would include the entire
period during which the employee is
taking intermittent leave, including
weeks in which no leave is taken. The
hourly rate shall be determined by dividing the employee’s weekly salary by
the employee’s normal or average
schedule of hours worked during weeks
in which FMLA leave is not being
taken. If an employer chooses to follow
this exception from the fluctuating
workweek method of payment, the employer must do so uniformly, with respect to all employees paid on a fluctuating workweek basis for whom
FMLA leave is taken on an intermit-
tent or reduced leave schedule basis. If
an employer does not elect to convert
the employee’s compensation to hourly
pay, no deduction may be taken for
FMLA leave absences. Once the need
for intermittent or reduced scheduled
leave is over, the employee may be restored to payment on a fluctuating
workweek basis.
(c) This special exception to the salary basis requirements of the FLSA exemption or fluctuating workweek payment requirements applies only to employees of covered employers who are
eligible for FMLA leave, and to leave
which qualifies as FMLA leave. Hourly
or other deductions which are not in
accordance with 29 CFR part 541 or 29
CFR 778.114 may not be taken, for example, from the salary of an employee
who works for an employer with fewer
than 50 employees, or where the employee has not worked long enough to
be eligible for FMLA leave without potentially affecting the employee’s eligibility for exemption. Nor may deductions which are not permitted by 29
CFR part 541 or 29 CFR 778.114 be taken
from such an employee’s salary for any
leave which does not qualify as FMLA
leave, for example, deductions from an
employee’s pay for leave required
under State law or under an employer’s
policy or practice for a reason which
does not qualify as FMLA leave, e.g.,
leave to care for a grandparent or for a
medical condition which does not qualify as a serious health condition or serious injury or illness; or for leave
which is more generous than provided
by FMLA. Employers may comply with
State law or the employer’s own policy/
practice under these circumstances and
maintain the employee’s eligibility for
exemption or for the fluctuating workweek method of pay by not taking
hourly deductions from the employee’s
pay, in accordance with FLSA requirements, or may take such deductions,
treating the employee as an hourly employee and pay overtime premium pay
for hours worked over 40 in a workweek.
§ 825.207 Substitution of paid leave.
(a) Generally, FMLA leave is unpaid
leave.
However,
under
the
circumstances described in this section,
FMLA permits an eligible employee to
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Wage and Hour Division, Labor
§ 825.207
choose to substitute accrued paid leave
for FMLA leave. If an employee does
not choose to substitute accrued paid
leave, the employer may require the
employee to substitute accrued paid
leave for unpaid FMLA leave. The term
substitute means that the paid leave
provided by the employer, and accrued
pursuant to established policies of the
employer, will run concurrently with
the unpaid FMLA leave. Accordingly,
the employee receives pay pursuant to
the employer’s applicable paid leave
policy during the period of otherwise
unpaid FMLA leave. An employee’s
ability to substitute accrued paid leave
is determined by the terms and conditions of the employer’s normal leave
policy. When an employee chooses, or
an employer requires, substitution of
accrued paid leave, the employer must
inform the employee that the employee
must satisfy any procedural requirements of the paid leave policy only in
connection with the receipt of such
payment. See § 825.300(c). If an employee
does not comply with the additional requirements in an employer’s paid leave
policy, the employee is not entitled to
substitute accrued paid leave, but the
employee remains entitled to take unpaid FMLA leave. Employers may not
discriminate against employees on
FMLA leave in the administration of
their paid leave policies.
(b) If neither the employee nor the
employer elects to substitute paid
leave for unpaid FMLA leave under the
above conditions and circumstances,
the employee will remain entitled to
all the paid leave which is earned or accrued under the terms of the employer’s plan.
(c) If an employee uses paid leave
under circumstances which do not
qualify as FMLA leave, the leave will
not count against the employee’s
FMLA leave entitlement. For example,
paid sick leave used for a medical condition which is not a serious health
condition or serious injury or illness
does not count against the employee’s
FMLA leave entitlement.
(d) Leave taken pursuant to a disability leave plan would be considered
FMLA leave for a serious health condition and counted in the leave entitlement permitted under FMLA if it
meets the criteria set forth above in
§§ 825.112 through 825.115. In such cases,
the employer may designate the leave
as FMLA leave and count the leave
against the employee’s FMLA leave entitlement. Because leave pursuant to a
disability benefit plan is not unpaid,
the provision for substitution of the
employee’s accrued paid leave is inapplicable, and neither the employee nor
the employer may require the substitution of paid leave. However, employers and employees may agree, where
state law permits, to have paid leave
supplement the disability plan benefits, such as in the case where a plan
only provides replacement income for
two-thirds of an employee’s salary.
(e) The Act provides that a serious
health condition may result from injury to the employee on or off the job.
If the employer designates the leave as
FMLA leave in accordance with
§ 825.300(d), the leave counts against the
employee’s FMLA leave entitlement.
Because the workers’ compensation absence is not unpaid, the provision for
substitution of the employee’s accrued
paid leave is not applicable, and neither the employee nor the employer
may require the substitution of paid
leave. However, employers and employees may agree, where state law permits, to have paid leave supplement
workers’ compensation benefits, such
as in the case where workers’ compensation only provides replacement
income for two-thirds of an employee’s
salary. If the health care provider
treating the employee for the workers’
compensation injury certifies the employee is able to return to a light duty
job but is unable to return to the same
or equivalent job, the employee may
decline the employer’s offer of a light
duty job. As a result the employee may
lose workers’ compensation payments,
but is entitled to remain on unpaid
FMLA leave until the employee’s
FMLA leave entitlement is exhausted.
As of the date workers’ compensation
benefits cease, the substitution provision becomes applicable and either the
employee may elect or the employer
may require the use of accrued paid
leave. See also §§ 825.210(f), 825.216(d),
825.220(d), 825.307(a) and 825.702(d)(1) and
(2) regarding the relationship between
workers’ compensation absences and
FMLA leave.
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§ 825.208
29 CFR Ch. V (7–1–19 Edition)
(f) Section 7(o) of the Fair Labor
Standards Act (FLSA) permits public
employers
under
prescribed
circumstances to substitute compensatory time off accrued at one and onehalf hours for each overtime hour
worked in lieu of paying cash to an employee when the employee works overtime hours as prescribed by the Act.
This section of the FLSA limits the
number of hours of compensatory time
an employee may accumulate depending upon whether the employee works
in fire protection or law enforcement
(480 hours) or elsewhere for a public
agency (240 hours). In addition, under
the FLSA, an employer always has the
right to cash out an employee’s compensatory time or to require the employee to use the time. Therefore, if an
employee requests and is permitted to
use accrued compensatory time to receive pay for time taken off for an
FMLA reason, or if the employer requires such use pursuant to the FLSA,
the time taken may be counted against
the employee’s FMLA leave entitlement.
§ 825.208
[Reserved]
§ 825.209 Maintenance
benefits.
of
employee
(a) During any FMLA leave, an employer must maintain the employee’s
coverage under any group health plan
(as defined in the Internal Revenue
Code of 1986 at 26 U.S.C. 5000(b)(1) on
the same conditions as coverage would
have been provided if the employee had
been continuously employed during the
entire leave period. All employers covered by FMLA, including public agencies, are subject to the Act’s requirements to maintain health coverage.
The definition of group health plan is
set forth in § 825.102. For purposes of
FMLA, the term group health plan
shall not include an insurance program
providing health coverage under which
employees purchase individual policies
from insurers provided that:
(1) No contributions are made by the
employer;
(2) Participation in the program is
completely voluntary for employees;
(3) The sole functions of the employer
with respect to the program are, without endorsing the program, to permit
the insurer to publicize the program to
employees,
to
collect
premiums
through payroll deductions and to
remit them to the insurer;
(4) The employer receives no consideration in the form of cash or otherwise in connection with the program,
other than reasonable compensation,
excluding any profit, for administrative services actually rendered in connection with payroll deduction; and,
(5) The premium charged with respect to such coverage does not increase in the event the employment relationship terminates.
(b) The same group health plan benefits provided to an employee prior to
taking FMLA leave must be maintained during the FMLA leave. For example, if family member coverage is
provided to an employee, family member coverage must be maintained during the FMLA leave. Similarly, benefit
coverage during FMLA leave for medical care, surgical care, hospital care,
dental care, eye care, mental health
counseling, substance abuse treatment,
etc., must be maintained during leave
if provided in an employer’s group
health plan, including a supplement to
a group health plan, whether or not
provided through a flexible spending
account or other component of a cafeteria plan.
(c) If an employer provides a new
health plan or benefits or changes
health benefits or plans while an employee is on FMLA leave, the employee
is entitled to the new or changed plan/
benefits to the same extent as if the
employee were not on leave. For example, if an employer changes a group
health plan so that dental care becomes covered under the plan, an employee on FMLA leave must be given
the same opportunity as other employees to receive (or obtain) the dental
care coverage. Any other plan changes
(e.g.,
in
coverage,
premiums,
deductibles, etc.) which apply to all
employees of the workforce would also
apply to an employee on FMLA leave.
(d) Notice of any opportunity to
change plans or benefits must also be
given to an employee on FMLA leave.
If the group health plan permits an employee to change from single to family
coverage upon the birth of a child or
otherwise add new family members,
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Wage and Hour Division, Labor
§ 825.210
such a change in benefits must be made
available while an employee is on
FMLA leave. If the employee requests
the changed coverage it must be provided by the employer.
(e) An employee may choose not to
retain group health plan coverage during FMLA leave. However, when an employee returns from leave, the employee is entitled to be reinstated on
the same terms as prior to taking the
leave, including family or dependent
coverages, without any qualifying period, physical examination, exclusion
of pre-existing conditions, etc. See
§ 825.212(c).
(f) Except as required by the Consolidated Omnibus Budget Reconciliation
Act of 1986 (COBRA) and for key employees (as discussed below), an employer’s obligation to maintain health
benefits during leave (and to restore
the employee to the same or equivalent
employment) under FMLA ceases if
and when the employment relationship
would have terminated if the employee
had not taken FMLA leave (e.g., if the
employee’s position is eliminated as
part of a nondiscriminatory reduction
in force and the employee would not
have been transferred to another position); an employee informs the employer of his or her intent not to return
from leave (including before starting
the leave if the employer is so informed before the leave starts); or the
employee fails to return from leave or
continues on leave after exhausting his
or her FMLA leave entitlement in the
12-month period.
(g) If a key employee (see § 825.218)
does not return from leave when notified by the employer that substantial
or grievous economic injury will result
from his or her reinstatement, the employee’s entitlement to group health
plan benefits continues unless and
until the employee advises the employer that the employee does not desire restoration to employment at the
end of the leave period, or the FMLA
leave entitlement is exhausted, or reinstatement is actually denied.
(h) An employee’s entitlement to
benefits other than group health benefits during a period of FMLA leave
(e.g., holiday pay) is to be determined
by the employer’s established policy
for providing such benefits when the
employee is on other forms of leave
(paid or unpaid, as appropriate).
[78 FR 8902, Feb. 6, 2013, as amended at 82 FR
2230, Jan. 9, 2017]
§ 825.210 Employee payment of group
health benefit premiums.
(a) Group health plan benefits must
be maintained on the same basis as
coverage would have been provided if
the employee had been continuously
employed during the FMLA leave period. Therefore, any share of group
health plan premiums which had been
paid by the employee prior to FMLA
leave must continue to be paid by the
employee during the FMLA leave period. If premiums are raised or lowered,
the employee would be required to pay
the new premium rates. Maintenance
of health insurance policies which are
not a part of the employer’s group
health plan, as described in § 825.209(a),
are the sole responsibility of the employee. The employee and the insurer
should make necessary arrangements
for payment of premiums during periods of unpaid FMLA leave.
(b) If the FMLA leave is substituted
paid leave, the employee’s share of premiums must be paid by the method
normally used during any paid leave,
presumably as a payroll deduction.
(c) If FMLA leave is unpaid, the employer has a number of options for obtaining payment from the employee.
The employer may require that payment be made to the employer or to
the insurance carrier, but no additional
charge may be added to the employee’s
premium payment for administrative
expenses. The employer may require
employees to pay their share of premium payments in any of the following
ways:
(1) Payment would be due at the
same time as it would be made if by
payroll deduction;
(2) Payment would be due on the
same schedule as payments are made
under COBRA;
(3) Payment would be prepaid pursuant to a cafeteria plan at the employee’s option;
(4) The employer’s existing rules for
payment by employees on leave without pay would be followed, provided
that such rules do not require prepayment (i.e., prior to the commencement
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§ 825.211
29 CFR Ch. V (7–1–19 Edition)
of the leave) of the premiums that will
become due during a period of unpaid
FMLA leave or payment of higher premiums than if the employee had continued to work instead of taking leave;
or,
(5)
Another
system
voluntarily
agreed to between the employer and
the employee, which may include prepayment of premiums (e.g., through increased payroll deductions when the
need for the FMLA leave is foreseeable).
(d) The employer must provide the
employee with advance written notice
of the terms and conditions under
which these payments must be made.
See § 825.300(c).
(e) An employer may not require
more of an employee using unpaid
FMLA leave than the employer requires of other employees on leave
without pay.
(f) An employee who is receiving payments as a result of a workers’ compensation injury must make arrangements with the employer for payment
of group health plan benefits when simultaneously taking FMLA leave. See
§ 825.207(e).
§ 825.211 Maintenance
of
benefits
under multi-employer health plans.
(a) A multi-employer health plan is a
plan to which more than one employer
is required to contribute, and which is
maintained pursuant to one or more
collective bargaining agreements between employee organization(s) and
the employers.
(b) An employer under a multi-employer plan must continue to make
contributions on behalf of an employee
using FMLA leave as though the employee had been continuously employed, unless the plan contains an explicit FMLA provision for maintaining
coverage such as through pooled contributions by all employers party to
the plan.
(c) During the duration of an employee’s FMLA leave, coverage by the
group health plan, and benefits provided pursuant to the plan, must be
maintained at the level of coverage and
benefits which were applicable to the
employee at the time FMLA leave
commenced.
(d) An employee using FMLA leave
cannot be required to use banked hours
or pay a greater premium than the employee would have been required to pay
if the employee had been continuously
employed.
(e) As provided in § 825.209(f) of this
part, group health plan coverage must
be maintained for an employee on
FMLA leave until:
(1) The employee’s FMLA leave entitlement is exhausted;
(2) The employer can show that the
employee would have been laid off and
the employment relationship terminated; or,
(3) The employee provides unequivocal notice of intent not to return to
work.
§ 825.212 Employee failure to pay
health plan premium payments.
(a)(1) In the absence of an established
employer policy providing a longer
grace period, an employer’s obligations
to maintain health insurance coverage
cease under FMLA if an employee’s
premium payment is more than 30 days
late. In order to drop the coverage for
an employee whose premium payment
is late, the employer must provide
written notice to the employee that
the payment has not been received.
Such notice must be mailed to the employee at least 15 days before coverage
is to cease, advising that coverage will
be dropped on a specified date at least
15 days after the date of the letter unless the payment has been received by
that date. If the employer has established policies regarding other forms of
unpaid leave that provide for the employer to cease coverage retroactively
to the date the unpaid premium payment was due, the employer may drop
the employee from coverage retroactively in accordance with that policy, provided the 15-day notice was
given. In the absence of such a policy,
coverage for the employee may be terminated at the end of the 30-day grace
period, where the required 15-day notice has been provided.
(2) An employer has no obligation regarding the maintenance of a health
insurance policy which is not a group
health plan. See § 825.209(a).
(3) All other obligations of an employer under FMLA would continue;
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Wage and Hour Division, Labor
§ 825.213
for example, the employer continues to
have an obligation to reinstate an employee upon return from leave.
(b) The employer may recover the
employee’s share of any premium payments missed by the employee for any
FMLA leave period during which the
employer maintains health coverage by
paying the employee’s share after the
premium payment is missed.
(c) If coverage lapses because an employee has not made required premium
payments, upon the employee’s return
from FMLA leave the employer must
still restore the employee to coverage/
benefits equivalent to those the employee would have had if leave had not
been taken and the premium payment(s) had not been missed, including
family or dependent coverage. See
§ 825.215(d)(1)–(5). In such case, an employee may not be required to meet
any qualification requirements imposed by the plan, including any new
preexisting condition waiting period,
to wait for an open season, or to pass a
medical examination to obtain reinstatement of coverage. If an employer
terminates an employee’s insurance in
accordance with this section and fails
to restore the employee’s health insurance as required by this section upon
the employee’s return, the employer
may be liable for benefits lost by reason of the violation, for other actual
monetary losses sustained as a direct
result of the violation, and for appropriate equitable relief tailored to the
harm suffered.
§ 825.213 Employer recovery of benefit
costs.
(a) In addition to the circumstances
discussed in § 825.212(b), an employer
may recover its share of health plan
premiums during a period of unpaid
FMLA leave from an employee if the
employee fails to return to work after
the employee’s FMLA leave entitlement has been exhausted or expires,
unless the reason the employee does
not return is due to:
(1) The continuation, recurrence, or
onset of either a serious health condition of the employee or the employee’s
family member, or a serious injury or
illness of a covered servicemember,
which would otherwise entitle the employee to leave under FMLA; or
(2) Other circumstances beyond the
employee’s control. Examples of other
circumstances beyond the employee’s
control are necessarily broad. They include such situations as where a parent
chooses to stay home with a newborn
child who has a serious health condition; an employee’s spouse is unexpectedly transferred to a job location more
than 75 miles from the employee’s
worksite; a relative or individual other
than a covered family member has a serious health condition and the employee is needed to provide care; the
employee is laid off while on leave; or,
the employee is a key employee who
decides not to return to work upon
being notified of the employer’s intention to deny restoration because of
substantial and grievous economic injury to the employer’s operations and
is not reinstated by the employer.
Other circumstances beyond the employee’s control would not include a
situation where an employee desires to
remain with a parent in a distant city
even though the parent no longer requires the employee’s care, or a parent
chooses not to return to work to stay
home with a well, newborn child.
(3) When an employee fails to return
to work because of the continuation,
recurrence, or onset of either a serious
health condition of the employee or
employee’s family member, or a serious injury or illness of a covered servicemember, thereby precluding the employer from recovering its (share of)
health benefit premium payments
made on the employee’s behalf during a
period of unpaid FMLA leave, the employer may require medical certification of the employee’s or the family
member’s serious health condition or
the covered servicemember’s serious
injury or illness. Such certification is
not required unless requested by the
employer. The cost of the certification
shall be borne by the employee, and the
employee is not entitled to be paid for
the time or travel costs spent in acquiring the certification. The employee
is required to provide medical certification in a timely manner which, for
purposes of this section, is within 30
days from the date of the employer’s
request. For purposes of medical certification, the employee may use the
optional DOL forms developed for these
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§ 825.214
29 CFR Ch. V (7–1–19 Edition)
purposes. See §§ 825.306(b), 825.310(c)–(d).
If the employer requests medical certification and the employee does not
provide such certification in a timely
manner (within 30 days), or the reason
for not returning to work does not
meet the test of other circumstances
beyond the employee’s control, the employer may recover 100 percent of the
health benefit premiums it paid during
the period of unpaid FMLA leave.
(b) Under some circumstances an employer may elect to maintain other
benefits, e.g., life insurance, disability
insurance, etc., by paying the employee’s (share of) premiums during periods
of unpaid FMLA leave. For example, to
ensure the employer can meet its responsibilities to provide equivalent
benefits to the employee upon return
from unpaid FMLA leave, it may be
necessary that premiums be paid continuously to avoid a lapse of coverage.
If the employer elects to maintain such
benefits during the leave, at the conclusion of leave, the employer is entitled to recover only the costs incurred
for paying the employee’s share of any
premiums whether or not the employee
returns to work.
(c) An employee who returns to work
for at least 30 calendar days is considered to have returned to work. An employee who transfers directly from taking FMLA leave to retirement, or who
retires during the first 30 days after
the employee returns to work, is
deemed to have returned to work.
(d) When an employee elects or an
employer requires paid leave to be substituted for FMLA leave, the employer
may not recover its (share of) health
insurance or other non-health benefit
premiums for any period of FMLA
leave covered by paid leave. Because
paid leave provided under a plan covering temporary disabilities (including
workers’ compensation) is not unpaid,
recovery of health insurance premiums
does not apply to such paid leave.
(e) The amount that self-insured employers may recover is limited to only
the employer’s share of allowable premiums as would be calculated under
COBRA, excluding the two percent fee
for administrative costs.
(f) When an employee fails to return
to work, any health and non-health
benefit premiums which this section of
the regulations permits an employer to
recover are a debt owed by the non-returning employee to the employer. The
existence of this debt caused by the
employee’s failure to return to work
does not alter the employer’s responsibilities for health benefit coverage
and, under a self-insurance plan, payment of claims incurred during the period of FMLA leave. To the extent recovery is allowed, the employer may
recover the costs through deduction
from any sums due to the employee
(e.g., unpaid wages, vacation pay, profit sharing, etc.), provided such deductions do not otherwise violate applicable Federal or State wage payment or
other laws. Alternatively, the employer may initiate legal action
against the employee to recover such
costs.
§ 825.214 Employee right to reinstatement.
General rule. On return from FMLA
leave, an employee is entitled to be returned to the same position the employee held when leave commenced, or
to an equivalent position with equivalent benefits, pay, and other terms and
conditions of employment. An employee is entitled to such reinstatement even if the employee has been replaced or his or her position has been
restructured to accommodate the employee’s absence. See also § 825.106(e) for
the obligations of joint employers.
§ 825.215
Equivalent position.
(a) Equivalent position. An equivalent
position is one that is virtually identical to the employee’s former position
in terms of pay, benefits and working
conditions, including privileges, perquisites and status. It must involve the
same or substantially similar duties
and responsibilities, which must entail
substantially equivalent skill, effort,
responsibility, and authority.
(b) Conditions to qualify. If an employee is no longer qualified for the position because of the employee’s inability to attend a necessary course, renew
a license, fly a minimum number of
hours, etc., as a result of the leave, the
employee shall be given a reasonable
opportunity to fulfill those conditions
upon return to work.
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Wage and Hour Division, Labor
§ 825.215
(c) Equivalent pay. (1) An employee is
entitled to any unconditional pay increases which may have occurred during the FMLA leave period, such as
cost of living increases. Pay increases
conditioned upon seniority, length of
service, or work performed must be
granted in accordance with the employer’s policy or practice with respect
to other employees on an equivalent
leave status for a reason that does not
qualify as FMLA leave. An employee is
entitled to be restored to a position
with the same or equivalent pay premiums, such as a shift differential. If
an employee departed from a position
averaging ten hours of overtime (and
corresponding overtime pay) each
week, an employee is ordinarily entitled to such a position on return from
FMLA leave.
(2) Equivalent pay includes any
bonus or payment, whether it is discretionary or non-discretionary, made to
employees consistent with the provisions of paragraph (c)(1) of this section.
However, if a bonus or other payment
is based on the achievement of a specified goal such as hours worked, products sold or perfect attendance, and the
employee has not met the goal due to
FMLA leave, then the payment may be
denied, unless otherwise paid to employees on an equivalent leave status
for a reason that does not qualify as
FMLA leave. For example, if an employee who used paid vacation leave for
a non-FMLA purpose would receive the
payment, then the employee who used
paid vacation leave for an FMLA-protected purpose also must receive the
payment.
(d) Equivalent benefits. Benefits include all benefits provided or made
available to employees by an employer,
including group life insurance, health
insurance, disability insurance, sick
leave, annual leave, educational benefits, and pensions, regardless of whether such benefits are provided by a practice or written policy of an employer
through an employee benefit plan as
defined in Section 3(3) of the Employee
Retirement Income Security Act of
1974, 29 U.S.C. 1002(3).
(1) At the end of an employee’s
FMLA leave, benefits must be resumed
in the same manner and at the same
levels as provided when the leave
began, and subject to any changes in
benefit levels that may have taken
place during the period of FMLA leave
affecting the entire workforce, unless
otherwise elected by the employee.
Upon return from FMLA leave, an employee cannot be required to requalify
for any benefits the employee enjoyed
before FMLA leave began (including
family or dependent coverages). For example, if an employee was covered by a
life insurance policy before taking
leave but is not covered or coverage
lapses during the period of unpaid
FMLA leave, the employee cannot be
required to meet any qualifications,
such as taking a physical examination,
in order to requalify for life insurance
upon return from leave. Accordingly,
some employers may find it necessary
to modify life insurance and other benefits programs in order to restore employees to equivalent benefits upon return from FMLA leave, make arrangements for continued payment of costs
to maintain such benefits during unpaid FMLA leave, or pay these costs
subject to recovery from the employee
on return from leave. See § 825.213(b).
(2) An employee may, but is not entitled to, accrue any additional benefits
or seniority during unpaid FMLA
leave. Benefits accrued at the time
leave began, however, (e.g., paid vacation, sick or personal leave to the extent not substituted for FMLA leave)
must be available to an employee upon
return from leave.
(3) If, while on unpaid FMLA leave,
an employee desires to continue life insurance, disability insurance, or other
types of benefits for which he or she
typically pays, the employer is required to follow established policies or
practices for continuing such benefits
for other instances of leave without
pay. If the employer has no established
policy, the employee and the employer
are encouraged to agree upon arrangements before FMLA leave begins.
(4) With respect to pension and other
retirement plans, any period of unpaid
FMLA leave shall not be treated as or
counted toward a break in service for
purposes of vesting and eligibility to
participate. Also, if the plan requires
an employee to be employed on a specific date in order to be credited with a
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§ 825.216
29 CFR Ch. V (7–1–19 Edition)
year of service for vesting, contributions or participation purposes, an employee on unpaid FMLA leave on that
date shall be deemed to have been employed on that date. However, unpaid
FMLA leave periods need not be treated as credited service for purposes of
benefit accrual, vesting and eligibility
to participate.
(5) Employees on unpaid FMLA leave
are to be treated as if they continued
to work for purposes of changes to benefit plans. They are entitled to changes
in benefits plans, except those which
may be dependent upon seniority or accrual during the leave period, immediately upon return from leave or to
the same extent they would have qualified if no leave had been taken. For example, if the benefit plan is predicated
on a pre-established number of hours
worked each year and the employee
does not have sufficient hours as a result of taking unpaid FMLA leave, the
benefit is lost. (In this regard, § 825.209
addresses health benefits.)
(e) Equivalent terms and conditions of
employment. An equivalent position
must have substantially similar duties,
conditions, responsibilities, privileges
and status as the employee’s original
position.
(1) The employee must be reinstated
to the same or a geographically proximate worksite (i.e., one that does not
involve a significant increase in commuting time or distance) from where
the employee had previously been employed. If the employee’s original
worksite has been closed, the employee
is entitled to the same rights as if the
employee had not been on leave when
the worksite closed. For example, if an
employer transfers all employees from
a closed worksite to a new worksite in
a different city, the employee on leave
is also entitled to transfer under the
same conditions as if he or she had continued to be employed.
(2) The employee is ordinarily entitled to return to the same shift or the
same or an equivalent work schedule.
(3) The employee must have the same
or an equivalent opportunity for bonuses, profit-sharing, and other similar
discretionary and non-discretionary
payments.
(4) FMLA does not prohibit an employer from accommodating an em-
ployee’s request to be restored to a different shift, schedule, or position
which better suits the employee’s personal needs on return from leave, or to
offer a promotion to a better position.
However, an employee cannot be induced by the employer to accept a different position against the employee’s
wishes.
(f) De minimis exception. The requirement that an employee be restored to
the same or equivalent job with the
same or equivalent pay, benefits, and
terms and conditions of employment
does not extend to de minimis, intangible, or unmeasurable aspects of the
job.
§ 825.216 Limitations on an employee’s
right to reinstatement.
(a) An employee has no greater right
to reinstatement or to other benefits
and conditions of employment than if
the employee had been continuously
employed during the FMLA leave period. An employer must be able to show
that an employee would not otherwise
have been employed at the time reinstatement is requested in order to deny
restoration to employment. For example:
(1) If an employee is laid off during
the course of taking FMLA leave and
employment is terminated, the employer’s responsibility to continue
FMLA leave, maintain group health
plan benefits and restore the employee
cease at the time the employee is laid
off, provided the employer has no continuing obligations under a collective
bargaining agreement or otherwise. An
employer would have the burden of
proving that an employee would have
been laid off during the FMLA leave
period and, therefore, would not be entitled to restoration. Restoration to a
job slated for lay-off when the employee’s original position is not would not
meet the requirements of an equivalent
position.
(2) If a shift has been eliminated, or
overtime has been decreased, an employee would not be entitled to return
to work that shift or the original overtime hours upon restoration. However,
if a position on, for example, a night
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§ 825.218
shift has been filled by another employee, the employee is entitled to return to the same shift on which employed before taking FMLA leave.
(3) If an employee was hired for a specific term or only to perform work on
a discrete project, the employer has no
obligation to restore the employee if
the employment term or project is over
and the employer would not otherwise
have continued to employ the employee. On the other hand, if an employee was hired to perform work on a
contract, and after that contract period the contract was awarded to another contractor, the successor contractor may be required to restore the
employee if it is a successor employer.
See § 825.107.
(b) In addition to the circumstances
explained above, an employer may
deny job restoration to salaried eligible employees (key employees, as defined in § 825.217(c)), if such denial is
necessary to prevent substantial and
grievous economic injury to the operations of the employer; or may delay
restoration to an employee who fails to
provide a fitness-for-duty certificate to
return to work under the conditions
described in § 825.312.
(c) If the employee is unable to perform an essential function of the position because of a physical or mental
condition, including the continuation
of a serious health condition or an injury or illness also covered by workers’
compensation, the employee has no
right to restoration to another position
under the FMLA. The employer’s obligations may, however, be governed by
the Americans with Disabilities Act
(ADA), as amended. See § 825.702, state
leave laws, or workers’ compensation
laws.
(d) An employee who fraudulently obtains FMLA leave from an employer is
not protected by FMLA’s job restoration or maintenance of health benefits
provisions.
(e) If the employer has a uniformlyapplied policy governing outside or
supplemental employment, such a policy may continue to apply to an employee while on FMLA leave. An employer which does not have such a policy may not deny benefits to which an
employee is entitled under FMLA on
this basis unless the FMLA leave was
fraudulently obtained as in paragraph
(d) of this section.
§ 825.217
Key employee, general rule.
(a) A key employee is a salaried
FMLA-eligible employee who is among
the highest paid 10 percent of all the
employees employed by the employer
within 75 miles of the employee’s worksite.
(b) The term salaried means paid on a
salary basis, as defined in 29 CFR
541.602. This is the Department of
Labor regulation defining employees
who may qualify as exempt from the
minimum wage and overtime requirements of the FLSA as executive, administrative, professional, and computer employees.
(c) A key employee must be among
the highest paid 10 percent of all the
employees—both salaried and non-salaried, eligible and ineligible—who are
employed by the employer within 75
miles of the worksite.
(1) In determining which employees
are among the highest paid 10 percent,
year-to-date earnings are divided by
weeks worked by the employee (including weeks in which paid leave was
taken). Earnings include wages, premium pay, incentive pay, and non-discretionary and discretionary bonuses.
Earnings do not include incentives
whose value is determined at some future date, e.g., stock options, or benefits or perquisites.
(2) The determination of whether a
salaried employee is among the highest
paid 10 percent shall be made at the
time the employee gives notice of the
need for leave. No more than 10 percent
of the employer’s employees within 75
miles of the worksite may be key employees.
§ 825.218 Substantial and grievous economic injury.
(a) In order to deny restoration to a
key employee, an employer must determine that the restoration of the employee to employment will cause substantial and grievous economic injury
to the operations of the employer, not
whether the absence of the employee
will cause such substantial and grievous injury.
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§ 825.219
29 CFR Ch. V (7–1–19 Edition)
(b) An employer may take into account its ability to replace on a temporary basis (or temporarily do without) the employee on FMLA leave. If
permanent replacement is unavoidable,
the cost of then reinstating the employee can be considered in evaluating
whether substantial and grievous economic injury will occur from restoration; in other words, the effect on the
operations of the company of reinstating the employee in an equivalent
position.
(c) A precise test cannot be set for
the level of hardship or injury to the
employer which must be sustained. If
the reinstatement of a key employee
threatens the economic viability of the
firm, that would constitute substantial
and grievous economic injury. A lesser
injury which causes substantial, longterm economic injury would also be
sufficient. Minor inconveniences and
costs that the employer would experience in the normal course of doing
business would certainly not constitute
substantial and grievous economic injury.
(d) FMLA’s substantial and grievous
economic injury standard is different
from and more stringent than the
undue hardship test under the ADA. See
also § 825.702.
§ 825.219 Rights of a key employee.
(a) An employer who believes that reinstatement may be denied to a key
employee, must give written notice to
the employee at the time the employee
gives notice of the need for FMLA
leave (or when FMLA leave commences, if earlier) that he or she qualifies as a key employee. At the same
time, the employer must also fully inform the employee of the potential
consequences with respect to reinstatement and maintenance of health benefits if the employer should determine
that substantial and grievous economic
injury to the employer’s operations
will result if the employee is reinstated
from FMLA leave. If such notice cannot be given immediately because of
the need to determine whether the employee is a key employee, it shall be
given as soon as practicable after being
notified of a need for leave (or the commencement of leave, if earlier). It is expected that in most circumstances
there will be no desire that an employee be denied restoration after
FMLA leave and, therefore, there
would be no need to provide such notice. However, an employer who fails to
provide such timely notice will lose its
right to deny restoration even if substantial and grievous economic injury
will result from reinstatement.
(b) As soon as an employer makes a
good faith determination, based on the
facts available, that substantial and
grievous economic injury to its operations will result if a key employee
who has given notice of the need for
FMLA leave or is using FMLA leave is
reinstated, the employer shall notify
the employee in writing of its determination, that it cannot deny FMLA
leave, and that it intends to deny restoration to employment on completion
of the FMLA leave. It is anticipated
that an employer will ordinarily be
able to give such notice prior to the
employee starting leave. The employer
must serve this notice either in person
or by certified mail. This notice must
explain the basis for the employer’s
finding that substantial and grievous
economic injury will result, and, if
leave has commenced, must provide
the employee a reasonable time in
which to return to work, taking into
account the circumstances, such as the
length of the leave and the urgency of
the need for the employee to return.
(c) If an employee on leave does not
return to work in response to the employer’s notification of intent to deny
restoration, the employee continues to
be entitled to maintenance of health
benefits and the employer may not recover its cost of health benefit premiums. A key employee’s rights under
FMLA continue unless and until the
employee either gives notice that he or
she no longer wishes to return to work,
or the employer actually denies reinstatement at the conclusion of the
leave period.
(d) After notice to an employee has
been given that substantial and grievous economic injury will result if the
employee is reinstated to employment,
an employee is still entitled to request
reinstatement at the end of the leave
period even if the employee did not return to work in response to the employer’s notice. The employer must
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§ 825.220
then again determine whether there
will be substantial and grievous economic injury from reinstatement,
based on the facts at that time. If it is
determined that substantial and grievous economic injury will result, the
employer shall notify the employee in
writing (in person or by certified mail)
of the denial of restoration.
§ 825.220 Protection
for
employees
who request leave or otherwise assert FMLA rights.
(a) The FMLA prohibits interference
with an employee’s rights under the
law, and with legal proceedings or inquiries relating to an employee’s
rights. More specifically, the law contains the following employee protections:
(1) An employer is prohibited from
interfering with, restraining, or denying the exercise of (or attempts to exercise) any rights provided by the Act.
(2) An employer is prohibited from
discharging or in any other way discriminating against any person (whether or not an employee) for opposing or
complaining about any unlawful practice under the Act.
(3) All persons (whether or not employers) are prohibited from discharging or in any other way discriminating against any person (whether or
not an employee) because that person
has—
(i) Filed any charge, or has instituted
(or caused to be instituted) any proceeding under or related to this Act;
(ii) Given, or is about to give, any information in connection with an inquiry or proceeding relating to a right
under this Act;
(iii) Testified, or is about to testify,
in any inquiry or proceeding relating
to a right under this Act.
(b) Any violations of the Act or of
these regulations constitute interfering with, restraining, or denying the
exercise of rights provided by the Act.
An employer may be liable for compensation and benefits lost by reason of
the violation, for other actual monetary losses sustained as a direct result
of the violation, and for appropriate equitable or other relief, including employment, reinstatement, promotion,
or any other relief tailored to the harm
suffered. See § 825.400(c). Interfering
with the exercise of an employee’s
rights would include, for example, not
only refusing to authorize FMLA leave,
but discouraging an employee from
using such leave. It would also include
manipulation by a covered employer to
avoid responsibilities under FMLA, for
example:
(1) Transferring employees from one
worksite to another for the purpose of
reducing worksites, or to keep worksites, below the 50-employee threshold
for employee eligibility under the Act;
(2) Changing the essential functions
of the job in order to preclude the taking of leave;
(3) Reducing hours available to work
in order to avoid employee eligibility.
(c) The Act’s prohibition against interference prohibits an employer from
discriminating or retaliating against
an employee or prospective employee
for having exercised or attempted to
exercise FMLA rights. For example, if
an employee on leave without pay
would otherwise be entitled to full benefits (other than health benefits), the
same benefits would be required to be
provided to an employee on unpaid
FMLA leave. By the same token, employers cannot use the taking of FMLA
leave as a negative factor in employment actions, such as hiring, promotions or disciplinary actions; nor
can FMLA leave be counted under no
fault attendance policies. See § 825.215.
(d) Employees cannot waive, nor may
employers induce employees to waive,
their prospective rights under FMLA.
For example, employees (or their collective
bargaining
representatives)
cannot trade off the right to take
FMLA leave against some other benefit
offered by the employer. This does not
prevent the settlement or release of
FMLA claims by employees based on
past employer conduct without the approval of the Department of Labor or a
court. Nor does it prevent an employee’s voluntary and uncoerced acceptance (not as a condition of employment) of a light duty assignment while
recovering from a serious health condition. See § 825.702(d). An employee’s acceptance of such light duty assignment
does not constitute a waiver of the employee’s prospective rights, including
the right to be restored to the same position the employee held at the time
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§ 825.300
29 CFR Ch. V (7–1–19 Edition)
the employee’s FMLA leave commenced or to an equivalent position.
The employee’s right to restoration,
however, ceases at the end of the applicable 12-month FMLA leave year.
(e) Individuals, and not merely employees, are protected from retaliation
for opposing (e.g., filing a complaint
about) any practice which is unlawful
under the Act. They are similarly protected if they oppose any practice
which they reasonably believe to be a
violation of the Act or regulations.
Subpart C—Employee and Employer Rights and Obligations
Under the Act
§ 825.300 Employer
ments.
notice
require-
(a) General notice. (1) Every employer
covered by the FMLA is required to
post and keep posted on its premises,
in conspicuous places where employees
are employed, a notice explaining the
Act’s provisions and providing information concerning the procedures for filing complaints of violations of the Act
with the Wage and Hour Division. The
notice must be posted prominently
where it can be readily seen by employees and applicants for employment.
The poster and the text must be large
enough to be easily read and contain
fully legible text. Electronic posting is
sufficient to meet this posting requirement as long as it otherwise meets the
requirements of this section. An employer that willfully violates the posting requirement may be assessed a
civil money penalty by the Wage and
Hour Division not to exceed $173 for
each separate offense.
(2) Covered employers must post this
general notice even if no employees are
eligible for FMLA leave.
(3) If an FMLA-covered employer has
any eligible employees, it shall also
provide this general notice to each employee by including the notice in employee handbooks or other written
guidance to employees concerning employee benefits or leave rights, if such
written materials exist, or by distributing a copy of the general notice to
each new employee upon hiring. In either case, distribution may be accomplished electronically.
(4) To meet the requirements of paragraph (a)(3) of this section, employers
may duplicate the text of the Department’s prototype notice (WHD Publication 1420) or may use another format so
long as the information provided includes, at a minimum, all of the information contained in that notice. Where
an employer’s workforce is comprised
of a significant portion of workers who
are not literate in English, the employer shall provide the general notice
in a language in which the employees
are literate. Prototypes are available
from the nearest office of the Wage and
Hour Division or on the Internet at
www.dol.gov/whd.
Employers
furnishing FMLA notices to sensory-impaired individuals must also comply
with all applicable requirements under
Federal or State law.
(b) Eligibility notice. (1) When an employee requests FMLA leave, or when
the employer acquires knowledge that
an employee’s leave may be for an
FMLA-qualifying reason, the employer
must notify the employee of the employee’s eligibility to take FMLA leave
within five business days, absent extenuating circumstances. See § 825.110
for definition of an eligible employee
and § 825.801 for special hours of service
eligibility requirements for airline
flight crews. Employee eligibility is determined (and notice must be provided)
at the commencement of the first instance of leave for each FMLA-qualifying reason in the applicable 12-month
period. See §§ 825.127(c) and 825.200(b).
All FMLA absences for the same qualifying reason are considered a single
leave and employee eligibility as to
that reason for leave does not change
during the applicable 12-month period.
(2) The eligibility notice must state
whether the employee is eligible for
FMLA leave as defined in § 825.110. If
the employee is not eligible for FMLA
leave, the notice must state at least
one reason why the employee is not eligible, including as applicable the number of months the employee has been
employed by the employer, the hours of
service with the employer during the
12-month period, and whether the employee is employed at a worksite where
50 or more employees are employed by
the employer within 75 miles of that
worksite. Notification of eligibility
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Wage and Hour Division, Labor
§ 825.300
may be oral or in writing; employers
may use optional Form WH–381 (Notice
of Eligibility and Rights and Responsibility) to provide such notification to
employees. Prototypes are available
from the nearest office of the Wage and
Hour Division or on the Internet at
www.dol.gov/whd. The employer is obligated to translate this notice in any
situation in which it is obligated to do
so in § 825.300(a)(4).
(3) If, at the time an employee provides notice of a subsequent need for
FMLA leave during the applicable 12month period due to a different FMLAqualifying reason, and the employee’s
eligibility status has not changed, no
additional eligibility notice is required. If, however, the employee’s eligibility status has changed (e.g., if the
employee has not met the hours of
service requirement in the 12 months
preceding the commencement of leave
for the subsequent qualifying reason or
the size of the workforce at the worksite has dropped below 50 employees),
the employer must notify the employee
of the change in eligibility status within five business days, absent extenuating circumstances.
(c) Rights and responsibilities notice. (1)
Employers shall provide written notice
detailing the specific expectations and
obligations of the employee and explaining any consequences of a failure
to meet these obligations. The employer is obligated to translate this notice in any situation in which it is obligated to do so in § 825.300(a)(4). This notice shall be provided to the employee
each time the eligibility notice is provided pursuant to paragraph (b) of this
section. If leave has already begun, the
notice should be mailed to the employee’s address of record. Such specific notice must include, as appropriate:
(i) That the leave may be designated
and counted against the employee’s annual FMLA leave entitlement if qualifying (see §§ 825.300(c) and 825.301) and
the applicable 12-month period for
FMLA entitlement (see §§ 825.127(c),
825.200(b), (f), and (g));
(ii) Any requirements for the employee to furnish certification of a serious health condition, serious injury or
illness, or qualifying exigency arising
out of covered active duty or call to
covered active duty status, and the
consequences of failing to do so (see
§§ 825.305, 825.309, 825.310, 825.313);
(iii) The employee’s right to substitute paid leave, whether the employer will require the substitution of
paid leave, the conditions related to
any substitution, and the employee’s
entitlement to take unpaid FMLA
leave if the employee does not meet
the conditions for paid leave (see
§ 825.207);
(iv) Any requirement for the employee to make any premium payments
to maintain health benefits and the arrangements for making such payments
(see § 825.210), and the possible consequences of failure to make such payments on a timely basis (i.e., the circumstances under which coverage may
lapse);
(v) The employee’s status as a key
employee and the potential consequence that restoration may be denied following FMLA leave, explaining
the conditions required for such denial
(see § 825.218);
(vi) The employee’s rights to maintenance of benefits during the FMLA
leave and restoration to the same or an
equivalent job upon return from FMLA
leave (see §§ 825.214 and 825.604); and
(vii) The employee’s potential liability for payment of health insurance
premiums paid by the employer during
the employee’s unpaid FMLA leave if
the employee fails to return to work
after taking FMLA leave (see § 825.213).
(2) The notice of rights and responsibilities may include other information—e.g., whether the employer will
require periodic reports of the employee’s status and intent to return to
work—but is not required to do so.
(3) The notice of rights and responsibilities may be accompanied by any
required certification form.
(4) If the specific information provided by the notice of rights and responsibilities changes, the employer
shall, within five business days of receipt of the employee’s first notice of
need for leave subsequent to any
change, provide written notice referencing the prior notice and setting
forth any of the information in the notice of rights and responsibilities that
has changed. For example, if the initial
leave period was paid leave and the
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§ 825.300
29 CFR Ch. V (7–1–19 Edition)
subsequent leave period would be unpaid leave, the employer may need to
give notice of the arrangements for
making premium payments.
(5) Employers are also expected to responsively answer questions from employees concerning their rights and responsibilities under the FMLA.
(6) A prototype notice of rights and
responsibilities may be obtained from
local offices of the Wage and Hour Division or from the Internet at
www.dol.gov/whd. Employers may adapt
the prototype notice as appropriate to
meet these notice requirements. The
notice of rights and responsibilities
may be distributed electronically so
long as it otherwise meets the requirements of this section.
(d) Designation notice. (1) The employer is responsible in all circumstances for designating leave as
FMLA-qualifying, and for giving notice
of the designation to the employee as
provided in this section. When the employer has enough information to determine whether the leave is being
taken for a FMLA-qualifying reason
(e.g., after receiving a certification),
the employer must notify the employee
whether the leave will be designated
and will be counted as FMLA leave
within five business days absent extenuating circumstances. Only one notice of designation is required for each
FMLA-qualifying reason per applicable
12-month period, regardless of whether
the leave taken due to the qualifying
reason will be a continuous block of
leave or intermittent or reduced schedule leave. If the employer determines
that the leave will not be designated as
FMLA-qualifying (e.g., if the leave is
not for a reason covered by FMLA or
the FMLA leave entitlement has been
exhausted), the employer must notify
the employee of that determination. If
the employer requires paid leave to be
substituted for unpaid FMLA leave, or
that paid leave taken under an existing
leave plan be counted as FMLA leave,
the employer must inform the employee of this designation at the time
of designating the FMLA leave.
(2) If the employer has sufficient information to designate the leave as
FMLA leave immediately after receiving notice of the employee’s need for
leave, the employer may provide the
employee with the designation notice
at that time.
(3) If the employer will require the
employee to present a fitness-for-duty
certification to be restored to employment, the employer must provide notice of such requirement with the designation notice. If the employer will
require that the fitness-for-duty certification address the employee’s ability to perform the essential functions
of the employee’s position, the employer must so indicate in the designation notice, and must include a list of
the essential functions of the employee’s position. See § 825.312. If the employer handbook or other written documents (if any) describing the employer’s leave policies clearly provide that
a fitness-for-duty certification will be
required in specific circumstances (e.g.,
by stating that fitness-for-duty certification will be required in all cases of
back injuries for employees in a certain occupation), the employer is not
required to provide written notice of
the requirement with the designation
notice, but must provide oral notice no
later than with the designation notice.
(4) The designation notice must be in
writing. A prototype designation notice may be obtained from local offices
of the Wage and Hour Division or from
the Internet at www.dol.gov/whd. If the
leave is not designated as FMLA leave
because it does not meet the requirements of the Act, the notice to the employee that the leave is not designated
as FMLA leave may be in the form of
a simple written statement.
(5) If the information provided by the
employer to the employee in the designation notice changes (e.g., the employee exhausts the FMLA leave entitlement), the employer shall provide,
within five business days of receipt of
the employee’s first notice of need for
leave subsequent to any change, written notice of the change.
(6) The employer must notify the employee of the amount of leave counted
against the employee’s FMLA leave entitlement. If the amount of leave needed is known at the time the employer
designates the leave as FMLA-qualifying, the employer must notify the
employee of the number of hours, days,
or weeks that will be counted against
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Wage and Hour Division, Labor
§ 825.301
the employee’s FMLA leave entitlement in the designation notice. If it is
not possible to provide the hours, days,
or weeks that will be counted against
the employee’s FMLA leave entitlement (such as in the case of unforeseeable intermittent leave), then the employer must provide notice of the
amount of leave counted against the
employee’s FMLA leave entitlement
upon the request by the employee, but
no more often than once in a 30-day period and only if leave was taken in that
period. The notice of the amount of
leave counted against the employee’s
FMLA entitlement may be oral or in
writing. If such notice is oral, it shall
be confirmed in writing, no later than
the following payday (unless the payday is less than one week after the oral
notice, in which case the notice must
be no later than the subsequent payday). Such written notice may be in
any form, including a notation on the
employee’s pay stub.
(e) Consequences of failing to provide
notice. Failure to follow the notice requirements set forth in this section
may constitute an interference with,
restraint, or denial of the exercise of
an employee’s FMLA rights. An employer may be liable for compensation
and benefits lost by reason of the violation, for other actual monetary losses
sustained as a direct result of the violation, and for appropriate equitable or
other relief, including employment, reinstatement, promotion, or any other
relief tailored to the harm suffered See
§ 825.400(c).
[78 FR 8902, Feb. 6, 2013, as amended at at 81
FR 43452, July 1, 2016; 82 FR 5382, Jan. 18,
2017; 82 FR 14, Jan. 2, 2018; 84 FR 219, Jan. 23,
2019]
§ 825.301 Designation of FMLA leave.
(a) Employer responsibilities. The employer’s decision to designate leave as
FMLA-qualifying must be based only
on information received from the employee or the employee’s spokesperson
(e.g., if the employee is incapacitated,
the employee’s spouse, adult child, parent, doctor, etc., may provide notice to
the employer of the need to take
FMLA leave). In any circumstance
where the employer does not have sufficient information about the reason
for an employee’s use of leave, the em-
ployer should inquire further of the
employee or the spokesperson to ascertain whether leave is potentially
FMLA-qualifying. Once the employer
has acquired knowledge that the leave
is being taken for a FMLA-qualifying
reason, the employer must notify the
employee as provided in § 825.300(d).
(b) Employee responsibilities. An employee giving notice of the need for
FMLA leave does not need to expressly
assert rights under the Act or even
mention the FMLA to meet his or her
obligation to provide notice, though
the employee would need to state a
qualifying reason for the needed leave
and otherwise satisfy the notice requirements set forth in § 825.302 or
§ 825.303 depending on whether the need
for leave is foreseeable or unforeseeable. An employee giving notice of the
need for FMLA leave must explain the
reasons for the needed leave so as to
allow the employer to determine
whether the leave qualifies under the
Act. If the employee fails to explain
the reasons, leave may be denied. In
many cases, in explaining the reasons
for a request to use leave, especially
when the need for the leave was unexpected or unforeseen, an employee will
provide sufficient information for the
employer to designate the leave as
FMLA leave. An employee using accrued paid leave may in some cases not
spontaneously explain the reasons or
their plans for using their accrued
leave. However, if an employee requesting to use paid leave for a FMLA-qualifying reason does not explain the reason for the leave and the employer denies the employee’s request, the employee will need to provide sufficient
information to establish a FMLAqualifying reason for the needed leave
so that the employer is aware that the
leave may not be denied and may designate that the paid leave be appropriately counted against (substituted
for) the employee’s FMLA leave entitlement. Similarly, an employee using
accrued paid vacation leave who seeks
an extension of unpaid leave for a
FMLA-qualifying reason will need to
state the reason. If this is due to an
event which occurred during the period
of paid leave, the employer may count
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§ 825.302
29 CFR Ch. V (7–1–19 Edition)
the leave used after the FMLA-qualifying reason against the employee’s
FMLA leave entitlement.
(c) Disputes. If there is a dispute between an employer and an employee as
to whether leave qualifies as FMLA
leave, it should be resolved through
discussions between the employee and
the employer. Such discussions and the
decision must be documented.
(d) Retroactive designation. If an employer does not designate leave as required by § 825.300, the employer may
retroactively designate leave as FMLA
leave with appropriate notice to the
employee as required by § 825.300 provided that the employer’s failure to
timely designate leave does not cause
harm or injury to the employee. In all
cases where leave would qualify for
FMLA protections, an employer and an
employee can mutually agree that
leave be retroactively designated as
FMLA leave.
(e) Remedies. If an employer’s failure
to timely designate leave in accordance with § 825.300 causes the employee
to suffer harm, it may constitute an interference with, restraint of, or denial
of the exercise of an employee’s FMLA
rights. An employer may be liable for
compensation and benefits lost by reason of the violation, for other actual
monetary losses sustained as a direct
result of the violation, and for appropriate equitable or other relief, including employment, reinstatement, promotion, or any other relief tailored to
the harm suffered. See § 825.400(c). For
example, if an employer that was put
on notice that an employee needed
FMLA leave failed to designate the
leave properly, but the employee’s own
serious health condition prevented him
or her from returning to work during
that time period regardless of the designation, an employee may not be able
to show that the employee suffered
harm as a result of the employer’s actions. However, if an employee took
leave to provide care for a son or
daughter with a serious health condition believing it would not count toward his or her FMLA entitlement, and
the employee planned to later use that
FMLA leave to provide care for a
spouse who would need assistance when
recovering from surgery planned for a
later date, the employee may be able to
show that harm has occurred as a result of the employer’s failure to designate properly. The employee might
establish this by showing that he or
she would have arranged for an alternative caregiver for the seriously ill
son or daughter if the leave had been
designated timely.
§ 825.302 Employee
notice
requirements for foreseeable FMLA leave.
(a) Timing of notice. An employee
must provide the employer at least 30
days advance notice before FMLA
leave is to begin if the need for the
leave is foreseeable based on an expected birth, placement for adoption or
foster care, planned medical treatment
for a serious health condition of the
employee or of a family member, or the
planned medical treatment for a serious injury or illness of a covered servicemember. If 30 days notice is not
practicable, such as because of a lack
of knowledge of approximately when
leave will be required to begin, a
change in circumstances, or a medical
emergency, notice must be given as
soon as practicable. For example, an
employee’s health condition may require leave to commence earlier than
anticipated before the birth of a child.
Similarly, little opportunity for notice
may be given before placement for
adoption. For foreseeable leave due to
a qualifying exigency notice must be
provided as soon as practicable, regardless of how far in advance such leave is
foreseeable. Whether FMLA leave is to
be continuous or is to be taken intermittently or on a reduced schedule
basis, notice need only be given one
time, but the employee shall advise the
employer as soon as practicable if
dates of scheduled leave change or are
extended, or were initially unknown. In
those cases where the employee is required to provide at least 30 days notice of foreseeable leave and does not
do so, the employee shall explain the
reasons why such notice was not practicable upon a request from the employer for such information.
(b) As soon as practicable means as
soon as both possible and practical,
taking into account all of the facts and
circumstances in the individual case.
When an employee becomes aware of a
need for FMLA leave less than 30 days
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Wage and Hour Division, Labor
§ 825.302
in advance, it should be practicable for
the employee to provide notice of the
need for leave either the same day or
the next business day. In all cases,
however, the determination of when an
employee could practicably provide notice must take into account the individual facts and circumstances.
(c) Content of notice. An employee
shall provide at least verbal notice sufficient to make the employer aware
that the employee needs FMLA-qualifying leave, and the anticipated timing
and duration of the leave. Depending
on the situation, such information may
include that a condition renders the
employee unable to perform the functions of the job; that the employee is
pregnant or has been hospitalized overnight; whether the employee or the employee’s family member is under the
continuing care of a health care provider; if the leave is due to a qualifying
exigency, that a military member is on
covered active duty or call to covered
active duty status (or has been notified
of an impending call or order to covered active duty), and that the requested leave is for one of the reasons
listed in § 825.126(b); if the leave is for a
family member, that the condition renders the family member unable to perform daily activities, or that the family member is a covered servicemember
with a serious injury or illness; and the
anticipated duration of the absence, if
known. When an employee seeks leave
for the first time for a FMLA-qualifying reason, the employee need not expressly assert rights under the FMLA
or even mention the FMLA. When an
employee seeks leave due to a FMLAqualifying reason, for which the employer has previously provided FMLAprotected leave, the employee must
specifically reference the qualifying
reason for leave or the need for FMLA
leave. In all cases, the employer should
inquire further of the employee if it is
necessary to have more information
about whether FMLA leave is being
sought by the employee, and obtain the
necessary details of the leave to be
taken. In the case of medical conditions, the employer may find it necessary to inquire further to determine
if the leave is because of a serious
health condition and may request medical certification to support the need
for such leave. See § 825.305. An employer may also request certification
to support the need for leave for a
qualifying exigency or for military
caregiver leave. See §§ 825.309, 825.310).
When an employee has been previously
certified for leave due to more than one
FMLA-qualifying reason, the employer
may need to inquire further to determine for which qualifying reason the
leave is needed. An employee has an
obligation to respond to an employer’s
questions designed to determine whether an absence is potentially FMLAqualifying. Failure to respond to reasonable employer inquiries regarding
the leave request may result in denial
of FMLA protection if the employer is
unable to determine whether the leave
is FMLA-qualifying.
(d) Complying with employer policy. An
employer may require an employee to
comply with the employer’s usual and
customary notice and procedural requirements for requesting leave, absent
unusual circumstances. For example,
an employer may require that written
notice set forth the reasons for the requested leave, the anticipated duration
of the leave, and the anticipated start
of the leave. An employee also may be
required by an employer’s policy to
contact a specific individual. Unusual
circumstances would include situations
such as when an employee is unable to
comply with the employer’s policy that
requests for leave should be made by
contacting a specific number because
on the day the employee needs to provide notice of his or her need for FMLA
leave there is no one to answer the
call-in number and the voice mail box
is full. Where an employee does not
comply with the employer’s usual notice and procedural requirements, and
no unusual circumstances justify the
failure to comply, FMLA-protected
leave may be delayed or denied. However, FMLA-protected leave may not
be delayed or denied where the employer’s policy requires notice to be given
sooner than set forth in paragraph (a)
of this section and the employee provides timely notice as set forth in paragraph (a) of this section.
(e) Scheduling planned medical treatment. When planning medical treatment, the employee must consult with
the employer and make a reasonable
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§ 825.303
29 CFR Ch. V (7–1–19 Edition)
effort to schedule the treatment so as
not to disrupt unduly the employer’s
operations, subject to the approval of
the health care provider. Employees
are ordinarily expected to consult with
their employers prior to the scheduling
of treatment in order to work out a
treatment schedule which best suits
the needs of both the employer and the
employee. For example, if an employee
who provides notice of the need to take
FMLA leave on an intermittent basis
for planned medical treatment neglects
to consult with the employer to make
a reasonable effort to arrange the
schedule of treatments so as not to unduly disrupt the employer’s operations,
the employer may initiate discussions
with the employee and require the employee to attempt to make such arrangements, subject to the approval of
the health care provider. See §§ 825.203
and 825.205.
(f) Intermittent leave or leave on a
reduced leave schedule must be medically necessary due to a serious health
condition or a serious injury or illness.
An employee shall advise the employer, upon request, of the reasons
why the intermittent/reduced leave
schedule is necessary and of the schedule for treatment, if applicable. The
employee and employer shall attempt
to work out a schedule for such leave
that meets the employee’s needs without unduly disrupting the employer’s
operations, subject to the approval of
the health care provider.
(g) An employer may waive employees’ FMLA notice requirements. See
§ 825.304.
§ 825.303 Employee
notice
requirements for unforeseeable FMLA
leave.
(a) Timing of notice. When the approximate timing of the need for leave is
not foreseeable, an employee must provide notice to the employer as soon as
practicable under the facts and circumstances of the particular case. It
generally should be practicable for the
employee to provide notice of leave
that is unforeseeable within the time
prescribed by the employer’s usual and
customary notice requirements applicable to such leave. See § 825.303(c). Notice may be given by the employee’s
spokesperson (e.g., spouse, adult family
member, or other responsible party) if
the employee is unable to do so personally. For example, if an employee’s
child has a severe asthma attack and
the employee takes the child to the
emergency room, the employee would
not be required to leave his or her child
in order to report the absence while the
child is receiving emergency treatment. However, if the child’s asthma
attack required only the use of an inhaler at home followed by a period of
rest, the employee would be expected
to call the employer promptly after ensuring the child has used the inhaler.
(b) Content of notice. An employee
shall provide sufficient information for
an employer to reasonably determine
whether the FMLA may apply to the
leave request. Depending on the situation, such information may include
that a condition renders the employee
unable to perform the functions of the
job; that the employee is pregnant or
has been hospitalized overnight; whether the employee or the employee’s family member is under the continuing
care of a health care provider; if the
leave is due to a qualifying exigency,
that a military member is on covered
active duty or call to covered active
duty status (or has been notified of an
impending call or order to covered active duty), that the requested leave is
for one of the reasons listed in
§ 825.126(b), and the anticipated duration of the absence; or if the leave is
for a family member that the condition
renders the family member unable to
perform daily activities or that the
family member is a covered servicemember with a serious injury or illness; and the anticipated duration of
the absence, if known. When an employee seeks leave for the first time for
a FMLA-qualifying reason, the employee need not expressly assert rights
under the FMLA or even mention the
FMLA. When an employee seeks leave
due to a qualifying reason, for which
the employer has previously provided
the employee FMLA-protected leave,
the employee must specifically reference either the qualifying reason for
leave or the need for FMLA leave. Calling in ‘‘sick’’ without providing more
information will not be considered sufficient notice to trigger an employer’s
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Wage and Hour Division, Labor
§ 825.304
obligations under the Act. The employer will be expected to obtain any
additional
required
information
through informal means. An employee
has an obligation to respond to an employer’s questions designed to determine whether an absence is potentially
FMLA-qualifying. Failure to respond
to reasonable employer inquiries regarding the leave request may result in
denial of FMLA protection if the employer is unable to determine whether
the leave is FMLA-qualifying.
(c) Complying with employer policy.
When the need for leave is not foreseeable, an employee must comply with
the employer’s usual and customary
notice and procedural requirements for
requesting leave, absent unusual circumstances. For example, an employer
may require employees to call a designated number or a specific individual
to request leave. However, if an employee requires emergency medical
treatment, he or she would not be required to follow the call-in procedure
until his or her condition is stabilized
and he or she has access to, and is able
to use, a phone. Similarly, in the case
of an emergency requiring leave because of a FMLA-qualifying reason,
written advance notice pursuant to an
employer’s internal rules and procedures may not be required when FMLA
leave is involved. If an employee does
not comply with the employer’s usual
notice and procedural requirements,
and no unusual circumstances justify
the failure to comply, FMLA-protected
leave may be delayed or denied.
§ 825.304 Employee failure to provide
notice.
(a) Proper notice required. In all cases,
in order for the onset of an employee’s
FMLA leave to be delayed due to lack
of required notice, it must be clear
that the employee had actual notice of
the FMLA notice requirements. This
condition would be satisfied by the employer’s proper posting of the required
notice at the worksite where the employee is employed and the employer’s
provision of the required notice in either an employee handbook or employee distribution, as required by
§ 825.300.
(b) Foreseeable leave—30 days. When
the need for FMLA leave is foreseeable
at least 30 days in advance and an employee fails to give timely advance notice with no reasonable excuse, the employer may delay FMLA coverage until
30 days after the date the employee
provides notice. The need for leave and
the approximate date leave would be
taken must have been clearly foreseeable to the employee 30 days in advance of the leave. For example,
knowledge that an employee would receive a telephone call about the availability of a child for adoption at some
unknown point in the future would not
be sufficient to establish the leave was
clearly foreseeable 30 days in advance.
(c) Foreseeable leave—less than 30 days.
When the need for FMLA leave is foreseeable fewer than 30 days in advance
and an employee fails to give notice as
soon as practicable under the particular facts and circumstances, the extent to which an employer may delay
FMLA coverage for leave depends on
the facts of the particular case. For example, if an employee reasonably
should have given the employer two
weeks notice but instead only provided
one week notice, then the employer
may delay FMLA-protected leave for
one week (thus, if the employer elects
to delay FMLA coverage and the employee nonetheless takes leave one
week after providing the notice (i.e., a
week before the two week notice period
has been met) the leave will not be
FMLA-protected).
(d) Unforeseeable leave. When the need
for FMLA leave is unforeseeable and an
employee fails to give notice in accordance with § 825.303, the extent to which
an employer may delay FMLA coverage for leave depends on the facts of
the particular case. For example, if it
would have been practicable for an employee to have given the employer notice of the need for leave very soon
after the need arises consistent with
the employer’s policy, but instead the
employee provided notice two days
after the leave began, then the employer may delay FMLA coverage of
the leave by two days.
(e) Waiver of notice. An employer may
waive employees’ FMLA notice obligations or the employer’s own internal
rules on leave notice requirements. If
an employer does not waive the employee’s obligations under its internal
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§ 825.305
29 CFR Ch. V (7–1–19 Edition)
leave rules, the employer may take appropriate action under its internal
rules and procedures for failure to follow its usual and customary notification
rules,
absent
unusual
circumstances, as long as the actions are
taken in a manner that does not discriminate against employees taking
FMLA leave and the rules are not inconsistent with § 825.303(a).
§ 825.305
Certification, general rule.
(a) General. An employer may require
that an employee’s leave to care for
the employee’s covered family member
with a serious health condition, or due
to the employee’s own serious health
condition that makes the employee unable to perform one or more of the essential functions of the employee’s position, be supported by a certification
issued by the health care provider of
the employee or the employee’s family
member. An employer may also require
that an employee’s leave because of a
qualifying exigency or to care for a
covered servicemember with a serious
injury or illness be supported by a certification, as described in §§ 825.309 and
825.310, respectively. An employer must
give notice of a requirement for certification each time a certification is required; such notice must be written notice whenever required by § 825.300(c).
An employer’s oral request to an employee to furnish any subsequent certification is sufficient.
(b) Timing. In most cases, the employer should request that an employee
furnish certification at the time the
employee gives notice of the need for
leave or within five business days
thereafter, or, in the case of unforeseen
leave, within five business days after
the leave commences. The employer
may request certification at some later
date if the employer later has reason to
question the appropriateness of the
leave or its duration. The employee
must provide the requested certification to the employer within 15 calendar days after the employer’s request, unless it is not practicable under
the particular circumstances to do so
despite the employee’s diligent, good
faith efforts or the employer provides
more than 15 calendar days to return
the requested certification.
(c) Complete and sufficient certification.
The employee must provide a complete
and sufficient certification to the employer if required by the employer in
accordance with §§ 825.306, 825.309, and
825.310. The employer shall advise an
employee whenever the employer finds
a certification incomplete or insufficient, and shall state in writing what
additional information is necessary to
make the certification complete and
sufficient. A certification is considered
incomplete if the employer receives a
certification, but one or more of the
applicable entries have not been completed. A certification is considered insufficient if the employer receives a
complete certification, but the information provided is vague, ambiguous,
or non-responsive. The employer must
provide the employee with seven calendar days (unless not practicable
under the particular circumstances despite the employee’s diligent good faith
efforts) to cure any such deficiency. If
the deficiencies specified by the employer are not cured in the resubmitted
certification, the employer may deny
the taking of FMLA leave, in accordance with § 825.313. A certification that
is not returned to the employer is not
considered incomplete or insufficient,
but constitutes a failure to provide certification.
(d) Consequences. At the time the employer requests certification, the employer must also advise an employee of
the anticipated consequences of an employee’s failure to provide adequate
certification. If the employee fails to
provide the employer with a complete
and sufficient certification, despite the
opportunity to cure the certification as
provided in paragraph (c) of this section, or fails to provide any certification, the employer may deny the
taking of FMLA leave, in accordance
with § 825.313. It is the employee’s responsibility either to furnish a complete and sufficient certification or to
furnish the health care provider providing the certification with any necessary authorization from the employee or the employee’s family member in order for the health care provider to release a complete and sufficient certification to the employer to
support the employee’s FMLA request.
This provision will apply in any case
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Wage and Hour Division, Labor
§ 825.306
where an employer requests a certification permitted by these regulations,
whether it is the initial certification, a
recertification, a second or third opinion, or a fitness for duty certificate, including any clarifications necessary to
determine if such certifications are authentic and sufficient. See §§ 825.306,
825.307, 825.308, and 825.312.
(e) Annual medical certification. Where
the employee’s need for leave due to
the employee’s own serious health condition, or the serious health condition
of the employee’s covered family member, lasts beyond a single leave year (as
defined in § 825.200), the employer may
require the employee to provide a new
medical certification in each subsequent leave year. Such new medical
certifications are subject to the provisions for authentication and clarification set forth in § 825.307, including second and third opinions.
§ 825.306 Content of medical certification for leave taken because of an
employee’s own serious health condition or the serious health condition of a family member.
(a) Required information. When leave
is taken because of an employee’s own
serious health condition, or the serious
health condition of a family member,
an employer may require an employee
to obtain a medical certification from
a health care provider that sets forth
the following information:
(1) The name, address, telephone
number, and fax number of the health
care provider and type of medical practice/specialization;
(2) The approximate date on which
the serious health condition commenced, and its probable duration;
(3) A statement or description of appropriate medical facts regarding the
patient’s health condition for which
FMLA leave is requested. The medical
facts must be sufficient to support the
need for leave. Such medical facts may
include information on symptoms, diagnosis, hospitalization, doctor visits,
whether medication has been prescribed, any referrals for evaluation or
treatment (physical therapy, for example), or any other regimen of continuing treatment;
(4) If the employee is the patient, information sufficient to establish that
the employee cannot perform the es-
sential functions of the employee’s job
as well as the nature of any other work
restrictions, and the likely duration of
such inability (see § 825.123(b) and (c));
(5) If the patient is a covered family
member with a serious health condition, information sufficient to establish that the family member is in need
of care, as described in § 825.124, and an
estimate of the frequency and duration
of the leave required to care for the
family member;
(6) If an employee requests leave on
an intermittent or reduced schedule
basis for planned medical treatment of
the employee’s or a covered family
member’s serious health condition, information sufficient to establish the
medical necessity for such intermittent or reduced schedule leave and an
estimate of the dates and duration of
such treatments and any periods of recovery;
(7) If an employee requests leave on
an intermittent or reduced schedule
basis for the employee’s serious health
condition, including pregnancy, that
may result in unforeseeable episodes of
incapacity, information sufficient to
establish the medical necessity for
such intermittent or reduced schedule
leave and an estimate of the frequency
and duration of the episodes of incapacity; and
(8) If an employee requests leave on
an intermittent or reduced schedule
basis to care for a covered family member with a serious health condition, a
statement that such leave is medically
necessary to care for the family member, as described in §§ 825.124 and
825.203(b), which can include assisting
in the family member’s recovery, and
an estimate of the frequency and duration of the required leave.
(b) DOL has developed two optional
forms (Form WH–380E and Form WH–
380F, as revised) for use in obtaining
medical certification, including second
and third opinions, from health care
providers that meets FMLA’s certification requirements. Optional form
WH–380E is for use when the employee’s need for leave is due to the employee’s own serious health condition.
Optional form WH–380F is for use when
the employee needs leave to care for a
family member with a serious health
condition. These optional forms reflect
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§ 825.307
29 CFR Ch. V (7–1–19 Edition)
certification requirements so as to permit the health care provider to furnish
appropriate medical information. Form
WH–380–E and WH–380–F, as revised, or
another form containing the same
basic information, may be used by the
employer; however, no information
may be required beyond that specified
in §§ 825.306, 825.307, and 825.308. In all
instances the information on the form
must relate only to the serious health
condition for which the current need
for leave exists. Prototype forms WH–
380–E and WH–380–F may be obtained
from local offices of the Wage and Hour
Division or from the Internet at
www.dol.gov/whd.
(c) If an employee is on FMLA leave
running concurrently with a workers’
compensation absence, and the provisions of the workers’ compensation
statute permit the employer or the employer’s representative to request additional information from the employee’s
workers’ compensation health care provider, the FMLA does not prevent the
employer from following the workers’
compensation provisions and information received under those provisions
may be considered in determining the
employee’s entitlement to FMLA-protected leave. Similarly, an employer
may request additional information in
accordance with a paid leave policy or
disability plan that requires greater information to qualify for payments or
benefits, provided that the employer
informs the employee that the additional information only needs to be
provided in connection with receipt of
such payments or benefits. Any information received pursuant to such policy or plan may be considered in determining the employee’s entitlement to
FMLA-protected leave. If the employee
fails to provide the information required for receipt of such payments or
benefits, such failure will not affect
the employee’s entitlement to take unpaid FMLA leave. See § 825.207(a).
(d) If an employee’s serious health
condition may also be a disability
within the meaning of the Americans
with Disabilities Act (ADA), as amended, the FMLA does not prevent the employer from following the procedures
for requesting medical information
under the ADA. Any information received pursuant to these procedures
may be considered in determining the
employee’s entitlement to FMLA-protected leave.
(e) While an employee may choose to
comply with the certification requirement by providing the employer with
an authorization, release, or waiver allowing the employer to communicate
directly with the health care provider
of the employee or his or her covered
family member, the employee may not
be required to provide such an authorization, release, or waiver. In all instances in which certification is requested, it is the employee’s responsibility to provide the employer with
complete and sufficient certification
and failure to do so may result in the
denial of FMLA leave. See § 825.305(d).
§ 825.307 Authentication and clarification of medical certification for
leave taken because of an employee’s own serious health condition or
the serious health condition of a
family member; second and third
opinions.
(a) Clarification and authentication. If
an employee submits a complete and
sufficient certification signed by the
health care provider, the employer may
not request additional information
from the health care provider. However, the employer may contact the
health care provider for purposes of
clarification and authentication of the
medical certification (whether initial
certification or recertification) after
the employer has given the employee
an opportunity to cure any deficiencies
as set forth in § 825.305(c). To make
such contact, the employer must use a
health care provider, a human resources professional, a leave administrator, or a management official.
Under no circumstances, however, may
the employee’s direct supervisor contact the employee’s health care provider. For purposes of these regulations, authentication means providing
the health care provider with a copy of
the
certification
and
requesting
verification that the information contained on the certification form was
completed and/or authorized by the
health care provider who signed the
document; no additional medical information may be requested. Clarification
means contacting the health care provider to understand the handwriting on
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Wage and Hour Division, Labor
§ 825.307
the medical certification or to understand the meaning of a response. Employers may not ask health care providers for additional information beyond that required by the certification
form. The requirements of the Health
Insurance Portability and Accountability Act (HIPAA) Privacy Rule (see
45 CFR parts 160 and 164), which governs the privacy of individually-identifiable health information created or
held by HIPAA-covered entities, must
be satisfied when individually-identifiable health information of an employee
is shared with an employer by a
HIPAA-covered health care provider. If
an employee chooses not to provide the
employer with authorization allowing
the employer to clarify the certification with the health care provider,
and does not otherwise clarify the certification, the employer may deny the
taking of FMLA leave if the certification is unclear. See § 825.305(d). It is
the employee’s responsibility to provide the employer with a complete and
sufficient certification and to clarify
the certification if necessary.
(b) Second opinion. (1) An employer
who has reason to doubt the validity of
a medical certification may require the
employee to obtain a second opinion at
the employer’s expense. Pending receipt of the second (or third) medical
opinion, the employee is provisionally
entitled to the benefits of the Act, including maintenance of group health
benefits. If the certifications do not ultimately establish the employee’s entitlement to FMLA leave, the leave shall
not be designated as FMLA leave and
may be treated as paid or unpaid leave
under the employer’s established leave
policies. In addition, the consequences
set forth in § 825.305(d) will apply if the
employee or the employee’s family
member fails to authorize his or her
health care provider to release all relevant medical information pertaining
to the serious health condition at issue
if requested by the health care provider
designated to provide a second opinion
in order to render a sufficient and complete second opinion.
(2) The employer is permitted to designate the health care provider to furnish the second opinion, but the selected health care provider may not be
employed on a regular basis by the em-
ployer. The employer may not regularly contract with or otherwise regularly utilize the services of the health
care provider furnishing the second
opinion unless the employer is located
in an area where access to health care
is extremely limited (e.g., a rural area
where no more than one or two doctors
practice in the relevant specialty in
the vicinity).
(c) Third opinion. If the opinions of
the employee’s and the employer’s designated health care providers differ,
the employer may require the employee to obtain certification from a
third health care provider, again at the
employer’s expense. This third opinion
shall be final and binding. The third
health care provider must be designated or approved jointly by the employer and the employee. The employer
and the employee must each act in
good faith to attempt to reach agreement on whom to select for the third
opinion provider. If the employer does
not attempt in good faith to reach
agreement, the employer will be bound
by the first certification. If the employee does not attempt in good faith
to reach agreement, the employee will
be bound by the second certification.
For example, an employee who refuses
to agree to see a doctor in the specialty
in question may be failing to act in
good faith. On the other hand, an employer that refuses to agree to any doctor on a list of specialists in the appropriate field provided by the employee
and whom the employee has not previously consulted may be failing to act
in good faith. In addition, the consequences set forth in § 825.305(d) will
apply if the employee or the employee’s family member fails to authorize
his or her health care provider to release all relevant medical information
pertaining to the serious health condition at issue if requested by the health
care provider designated to provide a
third opinion in order to render a sufficient and complete third opinion.
(d) Copies of opinions. The employer is
required to provide the employee with
a copy of the second and third medical
opinions, where applicable, upon request by the employee. Requested copies are to be provided within five business days unless extenuating circumstances prevent such action.
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§ 825.308
29 CFR Ch. V (7–1–19 Edition)
(e) Travel expenses. If the employer
requires the employee to obtain either
a second or third opinion the employer
must reimburse an employee or family
member for any reasonable ‘‘out of
pocket’’ travel expenses incurred to obtain the second and third medical opinions. The employer may not require
the employee or family member to
travel outside normal commuting distance for purposes of obtaining the second or third medical opinions except in
very unusual circumstances.
(f) Medical certification abroad. In circumstances in which the employee or a
family member is visiting in another
country, or a family member resides in
another country, and a serious health
condition develops, the employer shall
accept a medical certification as well
as second and third opinions from a
health care provider who practices in
that country. Where a certification by
a foreign health care provider is in a
language other than English, the employee must provide the employer with
a written translation of the certification upon request.
§ 825.308 Recertifications
for
leave
taken because of an employee’s own
serious health condition or the serious health condition of a family
member.
(a) 30-day rule. An employer may request recertification no more often
than every 30 days and only in connection with an absence by the employee,
unless paragraphs (b) or (c) of this section apply.
(b) More than 30 days. If the medical
certification indicates that the minimum duration of the condition is more
than 30 days, an employer must wait
until that minimum duration expires
before requesting a recertification, unless paragraph (c) of this section applies. For example, if the medical certification states that an employee will
be unable to work, whether continuously or on an intermittent basis, for
40 days, the employer must wait 40
days before requesting a recertification. In all cases, an employer may
request a recertification of a medical
condition every six months in connection with an absence by the employee.
Accordingly, even if the medical certification indicates that the employee
will need intermittent or reduced
schedule leave for a period in excess of
six months (e.g., for a lifetime condition), the employer would be permitted
to request recertification every six
months in connection with an absence.
(c) Less than 30 days. An employer
may request recertification in less
than 30 days if:
(1) The employee requests an extension of leave;
(2) Circumstances described by the
previous certification have changed
significantly (e.g., the duration or frequency of the absence, the nature or
severity of the illness, complications).
For example, if a medical certification
stated that an employee would need
leave for one to two days when the employee suffered a migraine headache
and the employee’s absences for his or
her last two migraines lasted four days
each, then the increased duration of
absence might constitute a significant
change in circumstances allowing the
employer to request a recertification
in less than 30 days. Likewise, if an employee had a pattern of using unscheduled FMLA leave for migraines in conjunction with his or her scheduled days
off, then the timing of the absences
also might constitute a significant
change in circumstances sufficient for
an employer to request a recertification more frequently than every 30
days; or
(3) The employer receives information that casts doubt upon the employee’s stated reason for the absence or
the continuing validity of the certification. For example, if an employee is
on FMLA leave for four weeks due to
the employee’s knee surgery, including
recuperation, and the employee plays
in company softball league games during the employee’s third week of FMLA
leave, such information might be sufficient to cast doubt upon the continuing validity of the certification allowing the employer to request a recertification in less than 30 days.
(d) Timing. The employee must provide the requested recertification to
the employer within the time frame requested by the employer (which must
allow at least 15 calendar days after
the employer’s request), unless it is not
practicable under the particular circumstances to do so despite the employee’s diligent, good faith efforts.
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Wage and Hour Division, Labor
§ 825.309
(e) Content. The employer may ask
for the same information when obtaining recertification as that permitted
for the original certification as set
forth in § 825.306. The employee has the
same obligations to participate and cooperate (including providing a complete and sufficient certification or
adequate authorization to the health
care provider) in the recertification
process as in the initial certification
process. See § 825.305(d). As part of the
information allowed to be obtained on
recertification for leave taken because
of a serious health condition, the employer may provide the health care
provider with a record of the employee’s absence pattern and ask the health
care provider if the serious health condition and need for leave is consistent
with such a pattern.
(f) Any recertification requested by
the employer shall be at the employee’s expense unless the employer provides otherwise. No second or third
opinion on recertification may be required.
§ 825.309 Certification for leave taken
because of a qualifying exigency.
(a) Active Duty Orders. The first time
an employee requests leave because of
a qualifying exigency arising out of the
covered active duty or call to covered
active duty status (or notification of
an impending call or order to covered
active duty)of a military member (see
§ 825.126(a)), an employer may require
the employee to provide a copy of the
military member’s active duty orders
or other documentation issued by the
military which indicates that the military member is on covered active duty
or call to covered active duty status,
and the dates of the military member’s
covered active duty service. This information need only be provided to the
employer once. A copy of new active
duty orders or other documentation
issued by the military may be required
by the employer if the need for leave
because of a qualifying exigency arises
out of a different covered active duty
or call to covered active duty status
(or notification of an impending call or
order to covered active duty) of the
same or a different military member;
(b) Required information. An employer
may require that leave for any quali-
fying exigency specified in § 825.126 be
supported by a certification from the
employee that sets forth the following
information:
(1) A statement or description, signed
by the employee, of appropriate facts
regarding the qualifying exigency for
which FMLA leave is requested. The
facts must be sufficient to support the
need for leave. Such facts should include information on the type of qualifying exigency for which leave is requested and any available written documentation which supports the request
for leave; such documentation, for example, may include a copy of a meeting announcement for informational
briefings sponsored by the military, a
document confirming an appointment
with a counselor or school official, or a
copy of a bill for services for the handling of legal or financial affairs;
(2) The approximate date on which
the qualifying exigency commenced or
will commence;
(3) If an employee requests leave because of a qualifying exigency for a
single, continuous period of time, the
beginning and end dates for such absence;
(4) If an employee requests leave because of a qualifying exigency on an
intermittent or reduced schedule basis,
an estimate of the frequency and duration of the qualifying exigency;
(5) If the qualifying exigency involves
meeting with a third party, appropriate contact information for the individual or entity with whom the employee is meeting (such as the name,
title, organization, address, telephone
number, fax number, and email address) and a brief description of the
purpose of the meeting; and
(6) If the qualifying exigency involves
Rest and Recuperation leave, a copy of
the military member’s Rest and Recuperation orders, or other documentation issued by the military which indicates that the military member has
been granted Rest and Recuperation
leave, and the dates of the military
member’s Rest and Recuperation leave.
(c) DOL has developed an optional
form (Form WH–384) for employees’ use
in obtaining a certification that meets
FMLA’s certification requirements.
Form WH–384 may be obtained from
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§ 825.310
29 CFR Ch. V (7–1–19 Edition)
local offices of the Wage and Hour Division or from the Internet at
www.dol.gov/whd. This optional form
reflects certification requirements so
as to permit the employee to furnish
appropriate information to support his
or her request for leave because of a
qualifying exigency. Form WH–384, or
another form containing the same
basic information, may be used by the
employer; however, no information
may be required beyond that specified
in this section.
(d) Verification. If an employee submits a complete and sufficient certification to support his or her request for
leave because of a qualifying exigency,
the employer may not request additional information from the employee.
However, if the qualifying exigency involves meeting with a third party, the
employer may contact the individual
or entity with whom the employee is
meeting for purposes of verifying a
meeting or appointment schedule and
the nature of the meeting between the
employee and the specified individual
or entity. The employee’s permission is
not required in order to verify meetings or appointments with third parties, but no additional information
may be requested by the employer. An
employer also may contact an appropriate unit of the Department of Defense to request verification that a
military member is on covered active
duty or call to covered active duty status (or has been notified of an impending call or order to covered active
duty); no additional information may
be requested and the employee’s permission is not required.
§ 825.310 Certification for leave taken
to care for a covered servicemember (military caregiver leave).
(a) Required information from health
care provider. When leave is taken to
care for a covered servicemember with
a serious injury or illness, an employer
may require an employee to obtain a
certification completed by an authorized health care provider of the covered
servicemember. For purposes of leave
taken to care for a covered servicemember, any one of the following
health care providers may complete
such a certification:
(1) A United States Department of
Defense (‘‘DOD’’) health care provider;
(2) A United States Department of
Veterans Affairs (‘‘VA’’) health care
provider;
(3) A DOD TRICARE network authorized private health care provider;
(4) A DOD non-network TRICARE authorized private health care provider;
or
(5) Any health care provider as defined in § 825.125.
(b) If the authorized health care provider is unable to make certain military-related determinations outlined
below, the authorized health care provider may rely on determinations from
an authorized DOD representative
(such as a DOD Recovery Care Coordinator) or an authorized VA representative. An employer may request that
the health care provider provide the
following information:
(1) The name, address, and appropriate contact information (telephone
number, fax number, and/or email address) of the health care provider, the
type of medical practice, the medical
specialty, and whether the health care
provider is one of the following:
(i) A DOD health care provider;
(ii) A VA health care provider;
(iii) A DOD TRICARE network authorized private health care provider;
(iv) A DOD non-network TRICARE
authorized private health care provider; or
(v) A health care provider as defined
in § 825.125.
(2)
Whether
the
covered
servicemember’s injury or illness was
incurred in the line of duty on active
duty or, if not, whether the covered
servicemember’s injury or illness existed before the beginning of the
servicemember’s active duty and was
aggravated by service in the line of
duty on active duty;
(3) The approximate date on which
the serious injury or illness commenced, or was aggravated, and its
probable duration;
(4) A statement or description of appropriate medical facts regarding the
covered servicemember’s health condition for which FMLA leave is requested. The medical facts must be sufficient to support the need for leave.
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Wage and Hour Division, Labor
§ 825.310
(i) In the case of a current member of
the Armed Forces, such medical facts
must include information on whether
the injury or illness may render the
covered servicemember medically unfit
to
perform
the
duties
of
the
servicemember’s office, grade, rank, or
rating and whether the member is receiving medical treatment, recuperation, or therapy.
(ii) In the case of a covered veteran,
such medical facts must include:
(A) Information on whether the veteran is receiving medical treatment,
recuperation, or therapy for an injury
or illness that is the continuation of an
injury or illness that was incurred or
aggravated when the covered veteran
was a member of the Armed Forces and
rendered the servicemember medically
unfit to perform the duties of the
servicemember’s office, grade, rank, or
rating; or
(B) Information on whether the veteran is receiving medical treatment,
recuperation, or therapy for an injury
or illness that is a physical or mental
condition for which the covered veteran has received a U.S. Department of
Veterans Affairs Service-Related Disability Rating (VASRD) of 50 percent
or greater, and that such VASRD rating is based, in whole or in part, on the
condition precipitating the need for
military caregiver leave; or
(C) Information on whether the veteran is receiving medical treatment,
recuperation, or therapy for an injury
or illness that is a physical or mental
condition that substantially impairs
the covered veteran’s ability to secure
or follow a substantially gainful occupation by reason of a disability or disabilities related to military service, or
would do so absent treatment; or
(D) Documentation of enrollment in
the Department of Veterans Affairs
Program of Comprehensive Assistance
for Family Caregivers.
(5) Information sufficient to establish
that the covered servicemember is in
need of care, as described in § 825.124,
and whether the covered servicemember will need care for a single continuous period of time, including any time
for treatment and recovery, and an estimate as to the beginning and ending
dates for this period of time;
(6) If an employee requests leave on
an intermittent or reduced schedule
basis for planned medical treatment
appointments for the covered servicemember, whether there is a medical necessity for the covered servicemember
to have such periodic care and an estimate of the treatment schedule of such
appointments;
(7) If an employee requests leave on
an intermittent or reduced schedule
basis to care for a covered servicemember other than for planned medical
treatment (e.g., episodic flare-ups of a
medical condition), whether there is a
medical necessity for the covered servicemember to have such periodic care,
which can include assisting in the covered servicemember’s recovery, and an
estimate of the frequency and duration
of the periodic care.
(c) Required information from employee
and/or covered servicemember. In addition to the information that may be requested under § 825.310(b), an employer
may also request that such certification set forth the following information provided by an employee and/or
covered servicemember:
(1) The name and address of the employer of the employee requesting
leave to care for a covered servicemember, the name of the employee requesting such leave, and the name of the
covered servicemember for whom the
employee is requesting leave to care;
(2) The relationship of the employee
to the covered servicemember for
whom the employee is requesting leave
to care;
(3) Whether the covered servicemember is a current member of the Armed
Forces, the National Guard or Reserves,
and
the
covered
servicemember’s
military
branch,
rank, and current unit assignment;
(4) Whether the covered servicemember is assigned to a military medical
facility as an outpatient or to a unit
established for the purpose of providing
command and control of members of
the Armed Forces receiving medical
care as outpatients (such as a medical
hold or warrior transition unit), and
the name of the medical treatment facility or unit;
(5) Whether the covered servicemember is on the temporary disability retired list;
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§ 825.310
29 CFR Ch. V (7–1–19 Edition)
(6) Whether the covered servicemember is a veteran, the date of separation
from military service, and whether the
separation was other than dishonorable. The employer may require the
employee to provide documentation
issued by the military which indicates
that the covered servicemember is a
veteran, the date of separation, and
that the separation is other than dishonorable. Where an employer requires
such documentation, an employee may
provide a copy of the veteran’s Certificate of Release or Discharge from Active Duty issued by the U.S. Department of Defense (DD Form 214) or other
proof
of
veteran
status.
See
§ 825.127(c)(2).
(7) A description of the care to be
provided to the covered servicemember
and an estimate of the leave needed to
provide the care.
(d) DOL has developed optional forms
(WH–385, WH–385–V) for employees’ use
in obtaining certification that meets
FMLA’s certification requirements,
which may be obtained from local offices of the Wage and Hour Division or
on the Internet at www.dol.gov/whd.
These optional forms reflect certification requirements so as to permit
the employee to furnish appropriate information to support his or her request
for leave to care for a covered servicemember with a serious injury or illness. WH–385, WH–385–V, or another
form containing the same basic information, may be used by the employer;
however, no information may be required beyond that specified in this
section. In all instances the information on the certification must relate
only to the serious injury or illness for
which the current need for leave exists.
An employer may seek authentication
and/or clarification of the certification
under § 825.307. Second and third opinions under § 825.307 are not permitted
for leave to care for a covered servicemember when the certification has
been completed by one of the types of
health care providers identified in
§ 825.310(a)(1)–(4). However, second and
third opinions under § 825.307 are permitted when the certification has been
completed by a health care provider as
defined in § 825.125 that is not one of
the types identified in § 825.310(a)(1)–(4).
Additionally, recertifications under
§ 825.308 are not permitted for leave to
care for a covered servicemember. An
employer may require an employee to
provide confirmation of covered family
relationship to the seriously injured or
ill
servicemember
pursuant
to
§ 825.122(k) of the FMLA.
(e) An employer requiring an employee to submit a certification for
leave to care for a covered servicemember must accept as sufficient certification, in lieu of the Department’s optional certification forms (WH–385) or
an employer’s own certification form,
invitational travel orders (ITOs) or invitational travel authorizations (ITAs)
issued to any family member to join an
injured or ill servicemember at his or
her bedside. An ITO or ITA is sufficient
certification for the duration of time
specified in the ITO or ITA. During
that time period, an eligible employee
may take leave to care for the covered
servicemember in a continuous block
of time or on an intermittent basis. An
eligible employee who provides an ITO
or ITA to support his or her request for
leave may not be required to provide
any additional or separate certification
that leave taken on an intermittent
basis during the period of time specified in the ITO or ITA is medically necessary. An ITO or ITA is sufficient certification for an employee entitled to
take FMLA leave to care for a covered
servicemember regardless of whether
the employee is named in the order or
authorization.
(1) If an employee will need leave to
care for a covered servicemember beyond the expiration date specified in an
ITO or ITA, an employer may request
that the employee have one of the authorized health care providers listed
under § 825.310(a) complete the DOL optional certification form (WH–385) or
an employer’s own form, as requisite
certification for the remainder of the
employee’s necessary leave period.
(2) An employer may seek authentication and clarification of the ITO or
ITA under § 825.307. An employer may
not utilize the second or third opinion
process outlined in § 825.307 or the recertification process under § 825.308 during the period of time in which leave is
supported by an ITO or ITA.
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Wage and Hour Division, Labor
§ 825.312
(3) An employer may require an employee to provide confirmation of covered family relationship to the seriously injured or ill servicemember pursuant to § 825.122(k) when an employee
supports his or her request for FMLA
leave with a copy of an ITO or ITA.
(f) An employer requiring an employee to submit a certification for
leave to care for a covered servicemember must accept as sufficient certification of the servicemember’s serious
injury or illness documentation indicating the servicemember’s enrollment
in the Department of Veterans Affairs
Program of Comprehensive Assistance
for Family Caregivers. Such documentation is sufficient certification of
the servicemember’s serious injury or
illness to support the employee’s request for military caregiver leave regardless of whether the employee is the
named caregiver in the enrollment documentation.
(1) An employer may seek authentication and clarification of the documentation
indicating
the
servicemember’s enrollment in the Department of Veterans Affairs Program
of Comprehensive Assistance for Family Caregivers under § 825.307. An employer may not utilize the second or
third opinion process outlined in
§ 825.307 or the recertification process
under
§ 825.308
when
the
servicemember’s serious injury or illness is shown by documentation of enrollment in this program.
(2) An employer may require an employee to provide confirmation of covered family relationship to the seriously injured or ill servicemember pursuant to § 825.122(k) when an employee
supports his or her request for FMLA
leave with a copy of such enrollment
documentation. An employer may also
require an employee to provide documentation, such as a veteran’s Form
DD–214, showing that the discharge was
other than dishonorable and the date of
the veteran’s discharge.
(g) Where medical certification is requested by an employer, an employee
may not be held liable for administrative delays in the issuance of military
documents, despite the employee’s diligent, good-faith efforts to obtain such
documents. See § 825.305(b). In all instances in which certification is re-
quested, it is the employee’s responsibility to provide the employer with
complete and sufficient certification
and failure to do so may result in the
denial of FMLA leave. See § 825.305(d).
§ 825.311 Intent to return to work.
(a) An employer may require an employee on FMLA leave to report periodically on the employee’s status and
intent to return to work. The employer’s policy regarding such reports may
not be discriminatory and must take
into account all of the relevant facts
and circumstances related to the individual employee’s leave situation.
(b) If an employee gives unequivocal
notice of intent not to return to work,
the
employer’s
obligations
under
FMLA to maintain health benefits
(subject to COBRA requirements) and
to restore the employee cease. However, these obligations continue if an
employee indicates he or she may be
unable to return to work but expresses
a continuing desire to do so.
(c) It may be necessary for an employee to take more leave than originally anticipated. Conversely, an employee may discover after beginning
leave that the circumstances have
changed and the amount of leave originally anticipated is no longer necessary. An employee may not be required to take more FMLA leave than
necessary to resolve the circumstance
that precipitated the need for leave. In
both of these situations, the employer
may require that the employee provide
the employer reasonable notice (i.e.,
within two business days) of the
changed circumstances where foreseeable. The employer may also obtain information on such changed circumstances through requested status
reports.
§ 825.312 Fitness-for-duty certification.
(a) As a condition of restoring an employee whose FMLA leave was occasioned by the employee’s own serious
health condition that made the employee unable to perform the employee’s job, an employer may have a uniformly-applied policy or practice that
requires all similarly-situated employees (i.e., same occupation, same serious
health condition) who take leave for
such conditions to obtain and present
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§ 825.312
29 CFR Ch. V (7–1–19 Edition)
certification from the employee’s
health care provider that the employee
is able to resume work. The employee
has the same obligations to participate
and cooperate (including providing a
complete and sufficient certification or
providing sufficient authorization to
the health care provider to provide the
information directly to the employer)
in the fitness-for-duty certification
process as in the initial certification
process. See § 825.305(d).
(b) An employer may seek a fitnessfor-duty certification only with regard
to the particular health condition that
caused the employee’s need for FMLA
leave. The certification from the employee’s health care provider must certify that the employee is able to resume work. Additionally, an employer
may require that the certification specifically address the employee’s ability
to perform the essential functions of
the employee’s job. In order to require
such a certification, an employer must
provide an employee with a list of the
essential functions of the employee’s
job no later than with the designation
notice required by § 825.300(d), and must
indicate in the designation notice that
the certification must address the employee’s ability to perform those essential functions. If the employer satisfies
these requirements, the employee’s
health care provider must certify that
the employee can perform the identified essential functions of his or her
job. Following the procedures set forth
in § 825.307(a), the employer may contact the employee’s health care provider for purposes of clarifying and authenticating the fitness-for-duty certification. Clarification may be requested only for the serious health condition for which FMLA leave was
taken. The employer may not delay the
employee’s return to work while contact with the health care provider is
being made. No second or third opinions on a fitness-for-duty certification
may be required.
(c) The cost of the certification shall
be borne by the employee, and the employee is not entitled to be paid for the
time or travel costs spent in acquiring
the certification.
(d) The designation notice required in
§ 825.300(d) shall advise the employee if
the employer will require a fitness-for-
duty certification to return to work
and whether that fitness-for-duty certification must address the employee’s
ability to perform the essential functions of the employee’s job.
(e) An employer may delay restoration to employment until an employee
submits a required fitness-for-duty certification unless the employer has
failed to provide the notice required in
paragraph (d) of this section. If an employer provides the notice required, an
employee who does not provide a fitness-for-duty certification or request
additional FMLA leave is no longer entitled to reinstatement under the
FMLA. See § 825.313(d).
(f) An employer is not entitled to a
certification of fitness to return to
duty for each absence taken on an
intermittent or reduced leave schedule.
However, an employer is entitled to a
certification of fitness to return to
duty for such absences up to once every
30 days if reasonable safety concerns
exist regarding the employee’s ability
to perform his or her duties, based on
the serious health condition for which
the employee took such leave. If an
employer chooses to require a fitnessfor-duty certification under such circumstances, the employer shall inform
the employee at the same time it
issues the designation notice that for
each subsequent instance of intermittent or reduced schedule leave, the employee will be required to submit a fitness-for-duty certification unless one
has already been submitted within the
past 30 days. Alternatively, an employer can set a different interval for
requiring a fitness-for-duty certification as long as it does not exceed
once every 30 days and as long as the
employer advises the employee of the
requirement in advance of the employee taking the intermittent or reduced schedule leave. The employer
may not terminate the employment of
the employee while awaiting such a
certification of fitness to return to
duty for an intermittent or reduced
schedule leave absence. Reasonable safety concerns means a reasonable belief of
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Wage and Hour Division, Labor
§ 825.313
significant risk of harm to the individual employee or others. In determining whether reasonable safety concerns exist, an employer should consider the nature and severity of the potential harm and the likelihood that
potential harm will occur.
(g) If State or local law or the terms
of a collective bargaining agreement
govern an employee’s return to work,
those provisions shall be applied.
(h) Requirements under the Americans with Disabilities Act (ADA), as
amended, apply. After an employee returns from FMLA leave, the ADA requires any medical examination at an
employer’s expense by the employer’s
health care provider be job-related and
consistent with business necessity. For
example, an attorney could not be required to submit to a medical examination or inquiry just because her leg had
been amputated. The essential functions of an attorney’s job do not require use of both legs; therefore such
an inquiry would not be job related. An
employer may require a warehouse laborer, whose back impairment affects
the ability to lift, to be examined by an
orthopedist, but may not require this
employee to submit to an HIV test
where the test is not related to either
the essential functions of his or her job
or to his/her impairment. If an employee’s serious health condition may also
be a disability within the meaning of
the ADA, the FMLA does not prevent
the employer from following the procedures for requesting medical information under the ADA.
§ 825.313 Failure
cation.
to
provide
certifi-
(a) Foreseeable leave. In the case of
foreseeable leave, if an employee fails
to provide certification in a timely
manner as required by § 825.305, then an
employer may deny FMLA coverage
until the required certification is provided. For example, if an employee has
15 days to provide a certification and
does not provide the certification for 45
days without sufficient reason for the
delay, the employer can deny FMLA
protections for the 30-day period following the expiration of the 15-day
time period, if the employee takes
leave during such period.
(b) Unforeseeable leave. In the case of
unforeseeable leave, an employer may
deny FMLA coverage for the requested
leave if the employee fails to provide a
certification within 15 calendar days
from receipt of the request for certification unless not practicable due to extenuating circumstances. For example,
in the case of a medical emergency, it
may not be practicable for an employee
to provide the required certification
within 15 calendar days. Absent such
extenuating circumstances, if the employee fails to timely return the certification, the employer can deny
FMLA protections for the leave following the expiration of the 15-day
time period until a sufficient certification is provided. If the employee
never produces the certification, the
leave is not FMLA leave.
(c) Recertification. An employee must
provide recertification within the time
requested by the employer (which must
allow at least 15 calendar days after
the request) or as soon as practicable
under the particular facts and circumstances. If an employee fails to
provide a recertification within a reasonable time under the particular facts
and circumstances, then the employer
may deny continuation of the FMLA
leave protections until the employee
produces a sufficient recertification. If
the employee never produces the recertification, the leave is not FMLA leave.
Recertification does not apply to leave
taken for a qualifying exigency or to
care for a covered servicemember.
(d) Fitness-for-duty certification. When
requested by the employer pursuant to
a uniformly applied policy for similarly-situated employees, the employee
must provide medical certification, at
the time the employee seeks reinstatement at the end of FMLA leave taken
for the employee’s serious health condition, that the employee is fit for duty
and able to return to work (see
§ 825.312(a)) if the employer has provided
the
required
notice
(see
§ 825.300(e)); the employer may delay
restoration until the certification is
provided. Unless the employee provides
either a fitness-for-duty certification
or a new medical certification for a serious health condition at the time
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§ 825.400
29 CFR Ch. V (7–1–19 Edition)
FMLA leave is concluded, the employee may be terminated. See also
§ 825.213(a)(3).
Subpart D—Enforcement
Mechanisms
§ 825.400 Enforcement, general rules.
(a) The employee has the choice of:
(1) Filing, or having another person
file on his or her behalf, a complaint
with the Secretary of Labor, or
(2) Filing a private lawsuit pursuant
to section 107 of FMLA.
(b) If the employee files a private
lawsuit, it must be filed within two
years after the last action which the
employee contends was in violation of
the Act, or three years if the violation
was willful.
(c) If an employer has violated one or
more provisions of FMLA, and if justified by the facts of a particular case,
an employee may receive one or more
of the following: wages, employment
benefits, or other compensation denied
or lost to such employee by reason of
the violation; or, where no such tangible loss has occurred, such as when
FMLA leave was unlawfully denied,
any actual monetary loss sustained by
the employee as a direct result of the
violation, such as the cost of providing
care, up to a sum equal to 26 weeks of
wages for the employee in a case involving leave to care for a covered
servicemember or 12 weeks of wages for
the employee in a case involving leave
for any other FMLA qualifying reason.
In addition, the employee may be entitled to interest on such sum, calculated at the prevailing rate. An
amount equaling the preceding sums
may also be awarded as liquidated
damages unless such amount is reduced
by the court because the violation was
in good faith and the employer had reasonable grounds for believing the employer had not violated the Act. When
appropriate, the employee may also obtain appropriate equitable relief, such
as employment, reinstatement and promotion. When the employer is found in
violation, the employee may recover a
reasonable attorney’s fee, reasonable
expert witness fees, and other costs of
the action from the employer in addition to any judgment awarded by the
court.
§ 825.401 Filing a complaint with the
Federal Government.
(a) A complaint may be filed in person, by mail or by telephone, with the
Wage and Hour Division, U.S. Department of Labor. A complaint may be
filed at any local office of the Wage
and Hour Division; the address and
telephone number of local offices may
be found in telephone directories or on
the Department’s Web site.
(b) A complaint filed with the Secretary of Labor should be filed within a
reasonable time of when the employee
discovers that his or her FMLA rights
have been violated. In no event may a
complaint be filed more than two years
after the action which is alleged to be
a violation of FMLA occurred, or three
years in the case of a willful violation.
(c) No particular form of complaint is
required, except that a complaint must
be reduced to writing and should include a full statement of the acts and/
or omissions, with pertinent dates,
which are believed to constitute the
violation.
[78 FR 8902, Feb. 6, 2013, as amended at 82 FR
2230, Jan. 9, 2017]
§ 825.402 Violations of the posting requirement.
Section 825.300 describes the requirements for covered employers to post a
notice for employees that explains the
Act’s provisions. If a representative of
the Department of Labor determines
that an employer has committed a
willful violation of this posting requirement, and that the imposition of
a civil money penalty for such violation is appropriate, the representative
may issue and serve a notice of penalty
on such employer in person or by certified mail. Where service by certified
mail is not accepted, notice shall be
deemed received on the date of attempted delivery. Where service is not
accepted, the notice may be served by
regular mail.
§ 825.403 Appealing the assessment of
a penalty for willful violation of the
posting requirement.
(a) An employer may obtain a review
of the assessment of penalty from the
Wage and Hour Regional Administrator
for the region in which the alleged violation(s) occurred. If the employer does
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Wage and Hour Division, Labor
§ 825.500
not seek such a review or fails to do so
in a timely manner, the notice of the
penalty constitutes the final ruling of
the Secretary of Labor.
(b) To obtain review, an employer
may file a petition with the Wage and
Hour Regional Administrator for the
region in which the alleged violations
occurred. No particular form of petition for review is required, except that
the petition must be in writing, should
contain the legal and factual bases for
the petition, and must be mailed to the
Regional Administrator within 15 days
of receipt of the notice of penalty. The
employer may request an oral hearing
which may be conducted by telephone.
(c) The decision of the Regional Administrator constitutes the final order
of the Secretary.
§ 825.404 Consequences for an employer when not paying the penalty
assessment after a final order is
issued.
The Regional Administrator may
seek to recover the unpaid penalty pursuant to the Debt Collection Act
(DCA), 31 U.S.C. 3711 et seq., and, in addition to seeking recovery of the unpaid final order, may seek interest and
penalties as provided under the DCA.
The final order may also be referred to
the Solicitor of Labor for collection.
The Secretary may file suit in any
court of competent jurisdiction to recover the monies due as a result of the
unpaid final order, interest, and penalties.
Subpart E—Recordkeeping
Requirements
§ 825.500 Recordkeeping requirements.
(a) FMLA provides that covered employers shall make, keep, and preserve
records pertaining to their obligations
under the Act in accordance with the
recordkeeping requirements of section
11(c) of the Fair Labor Standards Act
(FLSA) and in accordance with these
regulations. FMLA also restricts the
authority of the Department of Labor
to require any employer or plan, fund,
or program to submit books or records
more than once during any 12-month
period unless the Department has reasonable cause to believe a violation of
FMLA exists or the Department is in-
vestigating a complaint. These regulations establish no requirement for the
submission of any records unless specifically requested by a Departmental
official.
(b) No particular order or form of
records is required. These regulations
establish no requirement that any employer revise its computerized payroll
or personnel records systems to comply. However, employers must keep the
records specified by these regulations
for no less than three years and make
them available for inspection, copying,
and transcription by representatives of
the Department of Labor upon request.
The records may be maintained and
preserved on microfilm or other basic
source document of an automated data
processing memory provided that adequate projection or viewing equipment
is available, that the reproductions are
clear and identifiable by date or pay
period, and that extensions or transcriptions of the information required
herein can be and are made available
upon request. Records kept in computer form must be made available for
transcription or copying.
(c) Covered employers who have eligible employees must maintain records
that must disclose the following:
(1) Basic payroll and identifying employee data, including name, address,
and occupation; rate or basis of pay
and terms of compensation; daily and
weekly hours worked per pay period;
additions to or deductions from wages;
and total compensation paid.
(2) Dates FMLA leave is taken by
FMLA eligible employees (e.g., available from time records, requests for
leave, etc., if so designated). Leave
must be designated in records as FMLA
leave; leave so designated may not include leave required under State law or
an employer plan which is not also covered by FMLA.
(3) If FMLA leave is taken by eligible
employees in increments of less than
one full day, the hours of the leave.
(4) Copies of employee notices of
leave furnished to the employer under
FMLA, if in writing, and copies of all
written notices given to employees as
required under FMLA and these regulations See § 825.300(b)-(c). Copies may be
maintained in employee personnel
files.
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§ 825.600
29 CFR Ch. V (7–1–19 Edition)
(5) Any documents (including written
and electronic records) describing employee benefits or employer policies
and practices regarding the taking of
paid and unpaid leaves.
(6) Premium payments of employee
benefits.
(7) Records of any dispute between
the employer and an eligible employee
regarding designation of leave as
FMLA leave, including any written
statement from the employer or employee of the reasons for the designation and for the disagreement.
(d) Covered employers with no eligible employees must maintain the
records set forth in paragraph (c)(1) of
this section.
(e) Covered employers in a joint employment situation (see § 825.106) must
keep all the records required by paragraph (c) of this section with respect to
any primary employees, and must keep
the records required by paragraph (c)(1)
with respect to any secondary employees.
(f) If FMLA-eligible employees are
not subject to FLSA’s recordkeeping
regulations for purposes of minimum
wage or overtime compliance (i.e., not
covered by or exempt from FLSA), an
employer need not keep a record of actual hours worked (as otherwise required under FLSA, 29 CFR 516.2(a)(7)),
provided that:
(1) Eligibility for FMLA leave is presumed for any employee who has been
employed for at least 12 months; and
(2) With respect to employees who
take FMLA leave intermittently or on
a reduced leave schedule, the employer
and employee agree on the employee’s
normal schedule or average hours
worked each week and reduce their
agreement to a written record maintained in accordance with paragraph
(b) of this section.
(g) Records and documents relating
to certifications, recertifications or
medical histories of employees or employees’ family members, created for
purposes of FMLA, shall be maintained
as confidential medical records in separate files/records from the usual personnel files. If the Genetic Information
Nondiscrimination Act of 2008 (GINA)
is applicable, records and documents
created for purposes of FMLA containing family medical history or ge-
netic information as defined in GINA
shall be maintained in accordance with
the confidentiality requirements of
Title II of GINA (see 29 CFR 1635.9),
which permit such information to be
disclosed consistent with the requirements of FMLA. If the ADA, as amended, is also applicable, such records
shall be maintained in conformance
with ADA confidentiality requirements
(see 29 CFR 1630.14(c)(1)), except that:
(1) Supervisors and managers may be
informed regarding necessary restrictions on the work or duties of an employee and necessary accommodations;
(2) First aid and safety personnel
may be informed (when appropriate) if
the employee’s physical or medical
condition might require emergency
treatment; and
(3)
Government
officials
investigating compliance with FMLA (or
other pertinent law) shall be provided
relevant information upon request.
(h) Special rules regarding recordkeeping apply to employers of airline
flight crew employees. See § 825.803.
Subpart F—Special Rules Applicable to Employees of Schools
§ 825.600 Special rules for school employees, definitions.
(a) Certain special rules apply to employees of local educational agencies,
including public school boards and elementary and secondary schools under
their jurisdiction, and private elementary and secondary schools. The special
rules do not apply to other kinds of
educational institutions, such as colleges and universities, trade schools,
and preschools.
(b) Educational institutions are covered by FMLA (and these special rules)
and the Act’s 50-employee coverage
test does not apply. The usual requirements for employees to be eligible do
apply, however, including employment
at a worksite where at least 50 employees are employed within 75 miles. For
example, employees of a rural school
would not be eligible for FMLA leave if
the school has fewer than 50 employees
and there are no other schools under
the jurisdiction of the same employer
(usually, a school board) within 75
miles.
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Wage and Hour Division, Labor
§ 825.602
(c) The special rules affect the taking
of intermittent leave or leave on a reduced leave schedule, or leave near the
end of an academic term (semester), by
instructional employees. Instructional
employees are those whose principal
function is to teach and instruct students in a class, a small group, or an
individual setting. This term includes
not only teachers, but also athletic
coaches, driving instructors, and special education assistants such as signers for the hearing impaired. It does
not include, and the special rules do
not apply to, teacher assistants or
aides who do not have as their principal job actual teaching or instructing, nor does it include auxiliary personnel such as counselors, psychologists, or curriculum specialists. It also
does not include cafeteria workers,
maintenance workers, or bus drivers.
(d) Special rules which apply to restoration to an equivalent position
apply to all employees of local educational agencies.
§ 825.601 Special rules for school employees, limitations on intermittent
leave.
(a) Leave taken for a period that ends
with the school year and begins the
next semester is leave taken consecutively rather than intermittently. The
period during the summer vacation
when the employee would not have
been required to report for duty is not
counted against the employee’s FMLA
leave entitlement. An instructional
employee who is on FMLA leave at the
end of the school year must be provided
with any benefits over the summer vacation that employees would normally
receive if they had been working at the
end of the school year.
(1) If an eligible instructional employee needs intermittent leave or
leave on a reduced leave schedule to
care for a family member with a serious health condition, to care for a covered servicemember, or for the employee’s own serious health condition,
which is foreseeable based on planned
medical treatment, and the employee
would be on leave for more than 20 percent of the total number of working
days over the period the leave would
extend, the employer may require the
employee to choose either to:
(i) Take leave for a period or periods
of a particular duration, not greater
than the duration of the planned treatment; or
(ii) Transfer temporarily to an available alternative position for which the
employee is qualified, which has equivalent pay and benefits and which better
accommodates recurring periods of
leave than does the employee’s regular
position.
(2) These rules apply only to a leave
involving more than 20 percent of the
working days during the period over
which the leave extends. For example,
if an instructional employee who normally works five days each week needs
to take two days of FMLA leave per
week over a period of several weeks,
the special rules would apply. Employees taking leave which constitutes 20
percent or less of the working days
during the leave period would not be
subject to transfer to an alternative
position. Periods of a particular duration
means a block, or blocks, of time beginning no earlier than the first day
for which leave is needed and ending no
later than the last day on which leave
is needed, and may include one uninterrupted period of leave.
(b) If an instructional employee does
not give required notice of foreseeable
FMLA leave (see § 825.302) to be taken
intermittently or on a reduced leave
schedule, the employer may require the
employee to take leave of a particular
duration, or to transfer temporarily to
an alternative position. Alternatively,
the employer may require the employee to delay the taking of leave
until the notice provision is met.
§ 825.602 Special rules for school employees, limitations on leave near
the end of an academic term.
(a) There are also different rules for
instructional employees who begin
leave more than five weeks before the
end of a term, less than five weeks before the end of a term, and less than
three weeks before the end of a term.
Regular rules apply except in circumstances when:
(1) An instructional employee begins
leave more than five weeks before the
end of a term. The employer may require the employee to continue taking
leave until the end of the term if —
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§ 825.603
29 CFR Ch. V (7–1–19 Edition)
(i) The leave will last at least three
weeks, and
(ii) The employee would return to
work during the three-week period before the end of the term.
(2) The employee begins leave during
the five-week period before the end of a
term because of the birth of a son or
daughter; the placement of a son or
daughter for adoption or foster care; to
care for a spouse, son, daughter, or parent with a serious health condition; or
to care for a covered servicemember.
The employer may require the employee to continue taking leave until
the end of the term if—
(i) The leave will last more than two
weeks, and
(ii) The employee would return to
work during the two-week period before the end of the term.
(3) The employee begins leave during
the three-week period before the end of
a term because of the birth of a son or
daughter; the placement of a son or
daughter for adoption or foster care; to
care for a spouse, son, daughter, or parent with a serious health condition; or
to care for a covered servicemember.
The employer may require the employee to continue taking leave until
the end of the term if the leave will
last more than five working days.
(b) For purposes of these provisions,
academic term means the school semester, which typically ends near the end
of the calendar year and the end of
spring each school year. In no case may
a school have more than two academic
terms or semesters each year for purposes of FMLA. An example of leave
falling within these provisions would
be where an employee plans two weeks
of leave to care for a family member
which will begin three weeks before the
end of the term. In that situation, the
employer could require the employee
to stay out on leave until the end of
the term.
§ 825.603 Special rules for school employees, duration of FMLA leave.
(b) In the case of an employee who is
required to take leave until the end of
an academic term, only the period of
leave until the employee is ready and
able to return to work shall be charged
against the employee’s FMLA leave entitlement. The employer has the option
not to require the employee to stay on
leave until the end of the school term.
Therefore, any additional leave required by the employer to the end of
the school term is not counted as
FMLA leave; however, the employer
shall be required to maintain the employee’s group health insurance and restore the employee to the same or
equivalent job including other benefits
at the conclusion of the leave.
§ 825.604 Special rules for school employees, restoration to an equivalent position.
The determination of how an employee is to be restored to an equivalent position upon return from FMLA
leave will be made on the basis of ‘‘established school board policies and
practices, private school policies and
practices, and collective bargaining
agreements.’’ The ‘‘established policies’’ and collective bargaining agreements used as a basis for restoration
must be in writing, must be made
known to the employee prior to the
taking of FMLA leave, and must clearly explain the employee’s restoration
rights upon return from leave. Any established policy which is used as the
basis for restoration of an employee to
an equivalent position must provide
substantially the same protections as
provided in the Act for reinstated employees. See § 825.215. In other words,
the policy or collective bargaining
agreement must provide for restoration
to an equivalent position with equivalent employment benefits, pay, and
other terms and conditions of employment. For example, an employee may
not be restored to a position requiring
additional licensure or certification.
(a) If an employee chooses to take
leave for periods of a particular duration in the case of intermittent or reduced schedule leave, the entire period
of leave taken will count as FMLA
leave.
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Wage and Hour Division, Labor
§ 825.702
Subpart G—Effect of Other Laws,
Employer Practices, and Collective Bargaining Agreements on Employee Rights
Under FMLA
§ 825.700 Interaction with employer’s
policies.
(a) An employer must observe any
employment benefit program or plan
that provides greater family or medical
leave rights to employees than the
rights established by the FMLA. Conversely, the rights established by the
Act may not be diminished by any employment benefit program or plan. For
example, a provision of a CBA which
provides for reinstatement to a position that is not equivalent because of
seniority (e.g., provides lesser pay) is
superseded by FMLA. If an employer
provides greater unpaid family leave
rights than are afforded by FMLA, the
employer is not required to extend additional rights afforded by FMLA, such
as maintenance of health benefits
(other than through COBRA), to the
additional leave period not covered by
FMLA.
(b) Nothing in this Act prevents an
employer from amending existing leave
and employee benefit programs, provided they comply with FMLA. However, nothing in the Act is intended to
discourage employers from adopting or
retaining more generous leave policies.
§ 825.701
Interaction with State laws.
(a) Nothing in FMLA supersedes any
provision of State or local law that
provides greater family or medical
leave rights than those provided by
FMLA. The Department of Labor will
not, however, enforce State family or
medical leave laws, and States may not
enforce the FMLA. Employees are not
required to designate whether the leave
they are taking is FMLA leave or leave
under State law, and an employer must
comply with the appropriate (applicable) provisions of both. An employer
covered by one law and not the other
has to comply only with the law under
which it is covered. Similarly, an employee eligible under only one law
must receive benefits in accordance
with that law. If leave qualifies for
FMLA leave and leave under State law,
the leave used counts against the employee’s entitlement under both laws.
Examples of the interaction between
FMLA and State laws include:
(1) If State law provides 16 weeks of
leave entitlement over two years, an
employee needing leave due to his or
her own serious health condition would
be entitled to take 16 weeks one year
under State law and 12 weeks the next
year under FMLA. Health benefits
maintenance under FMLA would be applicable only to the first 12 weeks of
leave entitlement each year. If the employee took 12 weeks the first year, the
employee would be entitled to a maximum of 12 weeks the second year
under FMLA (not 16 weeks). An employee would not be entitled to 28
weeks in one year.
(2) If State law provides half-pay for
employees temporarily disabled because of pregnancy for six weeks, the
employee would be entitled to an additional six weeks of unpaid FMLA leave
(or accrued paid leave).
(3) If State law provides six weeks of
leave, which may include leave to care
for a seriously-ill grandparent or a
‘‘spouse equivalent,’’ and leave was
used for that purpose, the employee is
still entitled to his or her full FMLA
leave entitlement, as the leave used
was provided for a purpose not covered
by FMLA. If FMLA leave is used first
for a purpose also provided under State
law, and State leave has thereby been
exhausted, the employer would not be
required to provide additional leave to
care for the grandparent or ‘‘spouse
equivalent.’’
(4) If State law prohibits mandatory
leave beyond the actual period of pregnancy disability, an instructional employee of an educational agency subject to special FMLA rules may not be
required to remain on leave until the
end of the academic term, as permitted
by FMLA under certain circumstances.
See Subpart F of this part.
(b) [Reserved]
§ 825.702 Interaction with Federal and
State anti-discrimination laws.
(a) Nothing in FMLA modifies or affects any Federal or State law prohibiting discrimination on the basis of
race, religion, color, national origin,
sex, age, or disability (e.g., Title VII of
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§ 825.702
29 CFR Ch. V (7–1–19 Edition)
the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination
Act). FMLA’s legislative history explains that FMLA is ‘‘not intended to
modify or affect the Rehabilitation Act
of 1973, as amended, the regulations
concerning employment which have
been promulgated pursuant to that
statute, or the Americans with Disabilities Act of 1990 [as amended] or the
regulations issued under that act.
Thus, the leave provisions of the
[FMLA] are wholly distinct from the
reasonable accommodation obligations
of employers covered under the [ADA],
employers who receive Federal financial assistance, employers who contract with the Federal government, or
the Federal government itself. The purpose of the FMLA is to make leave
available to eligible employees and employers within its coverage, and not to
limit already existing rights and protection.’’ S. Rep. No. 103–3, at 38 (1993).
An employer must therefore provide
leave under whichever statutory provision provides the greater rights to employees. When an employer violates
both FMLA and a discrimination law,
an employee may be able to recover
under either or both statutes (double
relief may not be awarded for the same
loss; when remedies coincide a claimant may be allowed to utilize whichever avenue of relief is desired. Laffey
v. Northwest Airlines, Inc., 567 F.2d 429,
445 (D.C. Cir. 1976), cert. denied, 434 U.S.
1086 (1978).
(b) If an employee is a qualified individual with a disability within the
meaning of the ADA, the employer
must make reasonable accommodations, etc., barring undue hardship, in
accordance with the ADA. At the same
time, the employer must afford an employee his or her FMLA rights. ADA’s
‘‘disability’’ and FMLA’s ‘‘serious
health condition’’ are different concepts, and must be analyzed separately.
FMLA entitles eligible employees to 12
weeks of leave in any 12-month period
due to their own serious health condition, whereas the ADA allows an indeterminate amount of leave, barring
undue hardship, as a reasonable accommodation. FMLA requires employers to
maintain employees’ group health plan
coverage during FMLA leave on the
same conditions as coverage would
have been provided if the employee had
been continuously employed during the
leave period, whereas ADA does not require maintenance of health insurance
unless other employees receive health
insurance during leave under the same
circumstances.
(c)(1) A reasonable accommodation
under the ADA might be accomplished
by providing an individual with a disability with a part-time job with no
health benefits, assuming the employer
did not ordinarily provide health insurance for part-time employees. However, FMLA would permit an employee
to work a reduced leave schedule until
the equivalent of 12 workweeks of leave
were used, with group health benefits
maintained during this period. FMLA
permits an employer to temporarily
transfer an employee who is taking
leave intermittently or on a reduced
leave schedule for planned medical
treatment to an alternative position,
whereas the ADA allows an accommodation of reassignment to an equivalent, vacant position only if the employee cannot perform the essential
functions of the employee’s present position and an accommodation is not
possible in the employee’s present position, or an accommodation in the employee’s present position would cause
an undue hardship. The examples in
the following paragraphs of this section demonstrate how the two laws
would interact with respect to a qualified individual with a disability.
(2) A qualified individual with a disability who is also an eligible employee
entitled to FMLA leave requests 10
weeks of medical leave as a reasonable
accommodation, which the employer
grants because it is not an undue hardship. The employer advises the employee that the 10 weeks of leave is
also being designated as FMLA leave
and will count towards the employee’s
FMLA leave entitlement. This designation does not prevent the parties from
also treating the leave as a reasonable
accommodation and reinstating the
employee into the same job, as required by the ADA, rather than an
equivalent position under FMLA, if
that is the greater right available to
the employee. At the same time, the
employee would be entitled under
FMLA to have the employer maintain
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§ 825.702
group health plan coverage during the
leave, as that requirement provides the
greater right to the employee.
(3) If the same employee needed to
work part-time (a reduced leave schedule) after returning to his or her same
job, the employee would still be entitled under FMLA to have group health
plan coverage maintained for the remainder of the two-week equivalent of
FMLA leave entitlement, notwithstanding an employer policy that parttime employees do not receive health
insurance. This employee would be entitled under the ADA to reasonable accommodations to enable the employee
to perform the essential functions of
the part-time position. In addition, because the employee is working a parttime schedule as a reasonable accommodation, the FMLA’s provision for
temporary assignment to a different alternative position would not apply.
Once the employee has exhausted his
or her remaining FMLA leave entitlement while working the reduced (parttime) schedule, if the employee is a
qualified individual with a disability,
and if the employee is unable to return
to the same full-time position at that
time, the employee might continue to
work part-time as a reasonable accommodation, barring undue hardship; the
employee would then be entitled to
only those employment benefits ordinarily provided by the employer to
part-time employees.
(4) At the end of the FMLA leave entitlement, an employer is required
under FMLA to reinstate the employee
in the same or an equivalent position,
with equivalent pay and benefits, to
that which the employee held when
leave commenced. The employer’s
FMLA obligations would be satisfied if
the employer offered the employee an
equivalent full-time position. If the
employee were unable to perform the
essential functions of that equivalent
position even with reasonable accommodation, because of a disability, the
ADA may require the employer to
make a reasonable accommodation at
that time by allowing the employee to
work part-time or by reassigning the
employee to a vacant position, barring
undue hardship.
(d)(1) If FMLA entitles an employee
to leave, an employer may not, in lieu
of FMLA leave entitlement, require an
employee to take a job with a reasonable accommodation. However, ADA
may require that an employer offer an
employee the opportunity to take such
a position. An employer may not
change the essential functions of the
job in order to deny FMLA leave. See
§ 825.220(b).
(2) An employee may be on a workers’ compensation absence due to an
on-the-job injury or illness which also
qualifies as a serious health condition
under FMLA. The workers’ compensation absence and FMLA leave may run
concurrently (subject to proper notice
and designation by the employer). At
some point the health care provider
providing medical care pursuant to the
workers’ compensation injury may certify the employee is able to return to
work in a light duty position. If the
employer offers such a position, the
employee is permitted but not required
to accept the position. See § 825.220(d).
As a result, the employee may no
longer qualify for payments from the
workers’ compensation benefit plan,
but the employee is entitled to continue on unpaid FMLA leave either
until the employee is able to return to
the same or equivalent job the employee left or until the 12-week FMLA
leave entitlement is exhausted. See
§ 825.207(e). If the employee returning
from the workers’ compensation injury
is a qualified individual with a disability, he or she will have rights under
the ADA.
(e) If an employer requires certifications of an employee’s fitness for
duty to return to work, as permitted
by FMLA under a uniform policy, it
must comply with the ADA requirement that a fitness for duty physical
be job-related and consistent with business necessity.
(f) Under Title VII of the Civil Rights
Act of 1964, as amended by the Pregnancy Discrimination Act, an employer
should provide the same benefits for
women who are pregnant as the employer provides to other employees
with short-term disabilities. Because
Title VII does not require employees to
be employed for a certain period of
time to be protected, an employee employed for less than 12 months by the
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§ 825.800
29 CFR Ch. V (7–1–19 Edition)
employer (and, therefore, not an eligible employee under FMLA) may not be
denied maternity leave if the employer
normally provides short-term disability benefits to employees with the
same tenure who are experiencing
other short-term disabilities.
(g) Under the Uniformed Services
Employment
and
Reemployment
Rights Act (USERRA), 38 U.S.C. 4301, et
seq., veterans are entitled to receive all
rights and benefits of employment that
they would have obtained if they had
been continuously employed. Therefore, under USERRA, a returning servicemember would be eligible for FMLA
leave if the months and hours that he
or she would have worked (or, for airline flight crew employees, would have
worked or been paid) for the civilian
employer during the period of absence
due to or necessitated by USERRA-covered service, combined with the
months employed and the hours actually worked (or, for airline flight crew
employees, actually worked or paid),
meet the FMLA eligibility threshold of
12 months of employment and the
hours of service requirement. See
§§ 825.110(b)(2)(i) and (c)(2) and 825802(c).
(h) For further information on Federal antidiscrimination laws, including
Title VII and the ADA, individuals are
encouraged to contact the nearest office of the U.S. Equal Employment Opportunity Commission.
Subpart H—Special Rules Applicable to Airline Flight Crew Employees
§ 825.800 Special rules for airline flight
crew employees, general.
(a) Certain special rules apply only to
airline flight crew employees as defined in § 825.102. These special rules affect the hours of service requirement
for determining the eligibility of airline flight crew employees, the calculation of leave for those employees, and
the recordkeeping requirements for
employers of those employees, and are
issued pursuant to the Airline Flight
Crew
Technical
Corrections
Act
(AFCTCA), Public Law 111–119.
(b) Except as otherwise provided in
this subpart, FMLA leave for airline
flight crew employees is subject to the
requirements of the FMLA as set forth
in Part 825, Subparts A through E, and
G.
§ 825.801 Special rules for airline flight
crew employees, hours of service
requirement.
(a) An airline flight crew employee’s
eligibility for FMLA leave is to be determined in accordance with § 825.110
except that whether an airline flight
crew employee meets the hours of service requirement is to be determined as
provided below.
(b) Except as provided in paragraph
(c) of this section, whether an airline
flight crew employee meets the hours
of service requirement is determined
by assessing the number of hours the
employee has worked or been paid over
the previous 12 months. An airline
flight crew employee will meet the
hours of service requirement during
the previous 12-month period if he or
she has worked or been paid for not
less than 60 percent of the employee’s
applicable monthly guarantee and has
worked or been paid for not less than
504 hours.
(1) The applicable monthly guarantee
for an airline flight crew employee who
is not on reserve status is the minimum number of hours for which an
employer has agreed to schedule such
employee for any given month. The applicable monthly guarantee for an airline
flight crew employee who is on reserve
status is the number of hours for which
an employer has agreed to pay the employee for any given month.
(2) The hours an airline flight crew
employee has worked for purposes of
the hours of service requirement is the
employee’s duty hours during the previous 12-month period. The hours an
airline flight crew employee has been
paid is the number of hours for which
an employee received wages during the
previous 12-month period. The 504
hours do not include personal commute
time or time spent on vacation, medical, or sick leave.
(c) An airline flight crew employee
returning from USERRA-covered service shall be credited with the hours of
service that would have been performed
but for the period of absence from work
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Wage and Hour Division, Labor
§ 825.803
due to or necessitated by USERRA-covered service in determining the employee’s eligibility for FMLA-qualifying leave. Accordingly, an airline
flight crew employee re-employed following USERRA-covered service has
the hours that would have been worked
for or paid by the employer added to
any hours actually worked or paid during the previous 12-month period to
meet the hours of service requirement.
In order to determine the hours that
would have been worked or paid during
the period of absence from work due to
or necessitated by USERRA-covered
service, the employee’s pre-service
work schedule can generally be used
for calculations.
(d) In the event an employer of airline flight crew employees does not
maintain an accurate record of hours
worked or hours paid, the employer has
the burden of showing that the employee has not worked or been paid for
the requisite hours. Specifically, an
employer must be able to clearly demonstrate that an airline flight crew employee has not worked or been paid for
60 percent of his or her applicable
monthly guarantee or for 504 hours
during the previous 12 months in order
to claim that the airline flight crew
employee is not eligible for FMLA
leave.
§ 825.802 Special rules for airline flight
crew employees, calculation of
leave.
(a) Amount of leave. (1) An eligible
airline flight crew employee is entitled
to 72 days of FMLA leave during any
12-month period for one, or more, of
the FMLA-qualifying reasons set forth
in §§ 825.112(a)(1)–(5). This entitlement
is based on a uniform six-day workweek for all airline flight crew employees, regardless of time actually worked
or paid, multiplied by the statutory 12workweek entitlement for FMLA
leave. For example, if an employee
took six weeks of leave for an FMLAqualifying reason, the employee would
use 36 days (6 days × 6 weeks) of the
employee’s 72-day entitlement.
(2) An eligible airline flight crew employee is entitled to 156 days of military caregiver leave during a single 12month period to care for a covered
servicemember with a serious injury or
illness under § 825.112(a)(6). This entitlement is based on a uniform six-day
workweek for all airline flight crew
employees, regardless of time actually
worked or paid, multiplied by the statutory 26-workweek entitlement for
military caregiver leave.
(b) Increments of FMLA leave for intermittent or reduced schedule leave. When
an airline flight crew employee takes
FMLA leave on an intermittent or reduced schedule basis, the employer
must account for the leave using an increment no greater than one day. For
example, if an airline flight crew employee needs to take FMLA leave for a
two-hour physical therapy appointment, the employer may require the
employee to use a full day of FMLA
leave. The entire amount of leave actually taken (in this example, one day) is
designated as FMLA leave and counts
against the employee’s FMLA entitlement.
(c) Application of § 825.205. The rules
governing calculation of intermittent
or reduced schedule FMLA leave set
forth in § 825.205 do not apply to airline
flight crew employees except that airline flight crew employees are subject
to § 825.205(a)(2), the physical impossibility provision.
§ 825.803 Special rules for airline flight
crew employees, recordkeeping requirements.
(a) Employers of eligible airline
flight crew employees shall make,
keep, and preserve records in accordance with the requirements of Subpart
E of this Part (§ 825.500).
(b) Covered employers of airline
flight crew employees are required to
maintain certain additional records
‘‘on file with the Secretary.’’ To comply with this requirement, those employers shall maintain:
(1) Records and documents containing information specifying the applicable monthly guarantee with respect to each category of employee to
whom such guarantee applies, including copies of any relevant collective
bargaining agreements or employer
policy documents; and
(2) Records of hours worked and
hours paid, as those terms are defined
in § 825.801(b)(2).
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SUBCHAPTER D—GARNISHMENT OF EARNINGS
PART 870—RESTRICTION ON
GARNISHMENT
Subpart A—General
Sec.
870.1
870.2
Purpose and scope.
Amendments to this part.
Subpart B—Determinations and
Interpretations
870.10 Maximum part of aggregate disposable earnings subject to garnishment
under section 303(a).
870.11 Exceptions to the restrictions provided by section 303(a) of the CCPA and
priorities among garnishments.
Subpart C—Exemption for State-Regulated
Garnishments
870.50 General provision.
870.51 Exemption policy.
870.52 Application for exemption of Stateregulated garnishments.
870.53 Action upon an application for exemption.
870.54 Standards governing the granting of
an application for exemption.
870.55 Terms and conditions of every exemption.
870.56 Termination of exemption.
870.57 Exemptions.
AUTHORITY: Secs. 303, 305, 306, 82 Stat. 163,
164; 15 U.S.C. 1673, 1675, 1676, unless otherwise
noted.
SOURCE: 35 FR 8226, May 26, 1970, unless
otherwise noted.
Subpart A—General
§ 870.1
Purpose and scope.
(a) This part sets forth the procedures and any policies, determinations,
and interpretations of general application whereby the Secretary of Labor
carries out his duties under section 303
of the CCPA dealing with restrictions
on garnishment of earnings, and section 305 permitting exemptions for
State-regulated garnishments in certain situations. While the Secretary’s
duties under section 303 include insuring that certain amounts of earnings
are protected, such duties do not include establishing priorities among
multiple garnishments, as such prior-
ities are determined by other Federal
statutes or by State law.
(b) Functions of the Secretary under
the CCPA to be performed as provided
in this part are assigned to the Administrator of the Wage and Hour Division
(hereinafter referred to as the Administrator), who, under the general direction and control of the Assistant Secretary, Wage and Labor Standards Administration, shall be empowered to
take final and binding actions in administering the provisions of this part.
The Administrator is empowered to
subdelegate any of his duties under
this part. Any legal advice and assistance required for administration of
this part shall be provided by the Solicitor of Labor.
[35 FR 8226, May 26, 1970, as amended at 44
FR 30684, May 29, 1979]
§ 870.2
Amendments to this part.
The Administrator may, at any time
upon his own motion or upon written
request of any interested person setting forth reasonable grounds therefor,
amend any rules in this part.
Subpart B—Determinations and
Interpretations
§ 870.10 Maximum part of aggregate
disposable earnings subject to garnishment under section 303(a).
(a) Statutory provision. Section 303 (a)
of the CCPA provides that, with some
exceptions,
the maximum part of the aggregate disposable earnings of an individual for any workweek which is subjected to garnishment may
not exceed
(1) 25 per centum of his disposable earnings
for that week, or
(2) the amount by which his disposable
earnings for that week exceed thirty times
the Federal minimum hourly wage prescribed by section 6(a)(1) of the Fair Labor
Standards Act of 1938, in effect at the time
the earnings are payable.
whichever is less. In the case of earnings for
any pay period other than a week, the Secretary of Labor shall by regulation prescribe
a multiple of the Federal minimum hourly
wage equivalent in effect to that set forth in
paragraph (2).
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Wage and Hour Division, Labor
§ 870.10
(b) Weekly pay period. The statutory
exemption formula applies directly to
the aggregate disposable earnings paid
or payable for a pay period of 1 workweek, or a lesser period. Its intent is to
protect from garnishment and save to
an individual earner the specified
amount of compensation for his personal services rendered in the workweek, or a lesser period. Thus:
(1) The amount of an individual’s disposable earnings for a workweek or
lesser period which may not be garnished is 30 times the Fair Labor
Standards Act minimum wage. If an individual’s disposable earnings for such
a period are equal to or less than 30
times the minimum wage, the individual’s earnings may not be garnished in
any amount. (When the minimum wage
increases, the proportionate amount of
earnings which may not be garnished
also increases.) On April 1, 1991, the
minimum wage increased to $4.25. Accordingly, the amount of disposable
weekly earnings which may not be garnished is $127.50 effective April 1, 1991.
(For the period April 1, 1990 through
March 31, 1991, the amount that may
not be garnished is $114 (30 × $3.80).)
(2) For earnings payable on or after
April 1, 1991, if an individual’s disposable earnings for a workweek or lesser
period are more than $127.50, but less
than $170.00, only the amount above
$127.50 is subject to garnishment. (For
earnings payable during the period
April 1, 1990, through March 31, 1991,
when the Fair Labor Standards Act
minimum wage was $3.80, this range
computes to more than $114.00, but less
than $152.00.)
(3) For earnings payable on or after
April 1, 1991, if an individual’s disposable earnings for a workweek or lesser
period are $170.00 or more, 25 percent of
his/her disposable earnings is subject to
garnishment. (The weekly figure was
$152.00 (40 × $3.80) for the period April 1,
1990 through March 31, 1991.)
(c) Pay for a period longer than 1 week.
In the case of disposable earnings
which compensate for personal services
rendered in a pay period longer than 1
workweek, the weekly statutory exemption formula must be transformed
to a formula applicable to such earnings providing equivalent restrictions
on wage garnishment.
(1) The 25 percent part of the formula
would apply to the aggregate disposable earnings for all the workweeks or
fractions thereof compensated by the
pay for such pay period.
(2) The following formula should be
used to calculate the dollar amount of
disposable earnings which would not be
subject to garnishment: The number of
workweeks, or fractions thereof, should
be multiplied times the applicable Federal minimum wage and that amount
should be multiplied by 30. For example, for the period April 1, 1990 through
March 31, 1991 when the Federal minimum wage was $3.80 per hour, the formula should be calculated based on a
minimum wage of $3.80 ($3.80 multiplied by 30 equals $114; $114 multiplied
by the number of workweeks (or fractions thereof) equals the amount that
cannot be garnished). As of April 1,
1991, the $4.25 Federal minimum wage
replaces $3.80 in the formula (and the
amount which cannot be garnished
would then be $127.50 multiplied by the
number of workweeks (or fractions
thereof)). For purposes of this formula,
a calendar month is considered to consist of 41⁄3 workweeks. Thus, during the
period April 1, 1990 through March 31,
1991 when the Federal minimum hourly
wage was $3.80 an hour, the amount of
disposable earnings for a 2-week period
is $228.00 (2 × 30 × $3.80); for a monthly
period, $494.00 (41⁄3 × 30 × $3.80). Effective April 1, 1991, such amounts increased as follows: for a two-week period, $255.00 (2 × 30 × $4.25); for a monthly period, $552.50 (41⁄3 × 30 × $4.25). The
amount of disposable earnings for any
other pay period longer than 1 week
shall be computed in a manner consistent with section 303(a) of the act
and with this paragraph.
(3) Absent any changes to the rate set
forth in section 6(a)(1) of the Fair
Labor Standards Act, disposable earnings for individuals paid weekly, biweekly, semimonthly, and monthly
may not be garnished unless they are
in excess of the following amounts:
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§ 870.11
29 CFR Ch. V (7–1–19 Edition)
Minimum
amount
Date
Jan. 1, 1981 ..................................................................
Apr. 1, 1990 ..................................................................
Apr. 1, 1991 ..................................................................
$3.35
3.80
4.25
(4) Absent any changes to the rate set
forth in section 6(a)(1) of the Fair
Labor Standards Act, if the disposable
earnings are less than the following
figures, only the difference between the
Jan. 1, 1981 ..................................................................
Apr. 1, 1990 ..................................................................
Apr. 1, 1991 ..................................................................
$3.35
3.80
4.25
For example, in April of 1990, if an individual’s disposable earnings for a biweekly pay period are $274.00, the difference between $228.00 and $274.00 (i.e.,
$46.00) may be garnished.
(5) If disposable earnings are in excess of the figures stated in paragraph
(c)(4) of this section, 25% of the disposable earnings may be garnished.
(d) Date wages paid or payable controlling. The date that disposable earnings
are paid or payable, and not the date
the Court issues the garnishment
order, is controlling in determining the
amount of disposable earnings that
may be garnished. Thus, a garnishment
order in November 1990, providing for
withholding from wages over a period
of time, based on exemptions computed
at the $3.80 per hour minimum wage
then in effect, would be modified by operation of the change in the law so that
wages paid after April 1, 1991, are subject to garnishment to the extent described in paragraphs (b) and (c) of this
section on the basis of a minimum rate
of $4.25 per hour. This principle is applicable at the time of the enactment
of any further increase in the minimum wage.
(Sec. 2, Pub. L. 93–259, 84 Stat 55)
[35 FR 8226, May 26, 1970, as amended at 40
FR 52610, Nov. 11, 1975; 43 FR 28471, June 30,
1978; 43 FR 30276, July 14, 1978; 44 FR 30685,
May 29, 1979; 56 FR 32254, July 15, 1991; 56 FR
40660, Aug. 15, 1991]
$100.50
114.00
127.50
Biweekly
amount
$201.00
228.00
255.00
Semimonthly
amount
$217.75
247.00
276.25
Weekly
amount
$134.00
152.00
170.00
Biweekly
amount
$268.00
304.00
340.00
Semimonthly
amount
$290.33
329.33
368.33
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$435.50
494.00
552.50
Monthly rate
$580.67
658.67
736.67
§ 870.11 Exceptions to the restrictions
provided by section 303(a) of the
CCPA and priorities among garnishments.
(a)(1) Section 303(b) of the Consumer
Credit Protection Act provides that the
restrictions in section 303(a) do not
apply to:
(i) Any debt due for any State or Federal tax, or
(ii) Any order of any court of bankruptcy under Chapter XIII of the Bankruptcy Act.
(2) Accordingly the Consumer Credit
Protection Act does not restrict in any
way the amount which may be withheld for State or Federal taxes or in
Chapter XIII Bankruptcy Act proceedings.
(b)(1) Section 303(b) provides the following restrictions on the amount that
may be withheld for the support of any
person (e.g. alimony or child support):
(A) Where such individual is supporting his
spouse or dependent child (other than a
spouse or child with respect to whose support such order is issued), 50 per centum of
such individual’s disposable earnings for that
week; and
(B) Where such individual is not supporting
such a spouse or dependent child described in
clause (A), 60 per centum of such individual’s
disposable earnings for that week; except
that, with respect to the disposable earnings
of any individual for any workweek, the 50
per centum specified in clause (A) shall be
deemed to be 55 per centum and the 60 per
centum specified in clause (B) shall be
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Minimum
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Date
Weekly
amount
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Wage and Hour Division, Labor
§ 870.52
deemed to be 65 per centum, if and to the extent that such earnings are subject to garnishment to enforce a support order with respect to a period which is prior to the twelve
week period which ends with the beginning
of such workweek.
(2) Compliance with the provisions of
section 303(a) and (b) may offer problems when there is more than one garnishment. In that event the priority is
determined by State law or other Federal laws as the CCPA contains no provisions controlling the priorities of
garnishments. However, in no event
may the amount of any individual’s
disposable earnings which may be garnished exceed the percentages specified
in section 303. To illustrate:
(i) If 45% of an individual’s disposable
earnings were garnished for taxes, and
this garnishment has priority, the Consumer Credit Protection Act permits
garnishment for the support of any person of only the difference between 45%
and the applicable percentage (50 to
65%) in the above quoted section 303(b).
(ii) If 70% of an individual’s disposable earnings were garnished for taxes
and/or a Title XIII Bankruptcy debt,
and these garnishments have priority,
the Consumer Credit Protection Act
does not permit garnishment either for
the support of any person or for other
debts.
(iii) If 25% of an individual’s disposable earnings were withheld pursuant
to an ordinary garnishment which is
subject to the restrictions of section
303(a), and the garnishment has priority in accordance with State law, the
Consumer Credit Protection Act permits the additional garnishment for
the support of any person of only the
difference between 25% and the applicable percentage (50–65%) in the above
quoted section 303(b).
(iv) If 25% or more of an individual’s
disposable earnings were withheld pursuant to a garnishment for support,
and the support garnishment has priority in accordance with State law, the
Consumer Credit Protection Act does
not permit the withholding of any additional amounts pursuant to an ordinary garnishment which is subject to
the restrictions of section 303(a).
[44 FR 30685, May 29, 1979]
Subpart C—Exemption for StateRegulated Garnishments
§ 870.50 General provision.
Section 305 of the CCPA authorizes
that Secretary to ‘‘exempt from the
provisions of section 303(a) garnishments issued under the laws of any
State if he determines that the laws of
that State provide restrictions on garnishment which are substantially similar to those provided in section 303(a).’’
§ 870.51 Exemption policy.
(a) It is the policy of the Secretary of
Labor to permit exemption from section 303(a) of the CCPA garnishments
issued under the laws of a State if
those laws considered together cover
every case of garnishment covered by
the Act, and if those laws provide the
same or greater protection to individuals. Differences in text between the
restrictions of State laws and those in
section 303(a) of the Act are not material so long as the State laws provide
the same or greater restrictions on the
garnishment of individuals’ earnings.
(b) In determining whether State-regulated garnishments should be exempted from section 303(a) of the CCPA, or
whether such an exemption should be
terminated, the laws of the State shall
be examined with particular regard to
the classes of persons and of transactions to which they may apply; the
formulas provided for determining the
maximum part of an individual’s earnings which may be subject to garnishment; restrictions on the application of
the formulas; and with regard to procedural burdens placed on the individual
whose earnings are subject to garnishment.
(c) Particular attention is directed to
the fact that subsection (a) of section
303, when considered with subsection
(c) of that section, is read as not requiring the raising of the subsection (a)
restrictions as affirmative defenses in
garnishment proceedings.
§ 870.52 Application for exemption of
State-regulated garnishments.
(a) An application for the exemption
of garnishments issued under the laws
of a State may be made in duplicate by
a duly authorized representative of the
State. The application shall be filed
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§ 870.53
29 CFR Ch. V (7–1–19 Edition)
with the Administrator of the Wage
and Hour Division, Department of
Labor, Washington, DC 20210.
(b) Any application for exemption
must be accompanied by two copies of
all the provisions of the State laws relating to the garnishment of earnings,
certified to be true and complete copies
by the Attorney General of the State.
In addition, the application must be accompanied by a statement, in duplicate, signed by the Attorney General of
the State, showing how the laws of the
State satisfy the policy expressed in
§ 870.51(a) and setting forth any other
matters which the Attorney General
may wish to state concerning the application.
(c) Notice of the filing of an application for exemption shall be published
in the FEDERAL REGISTER. Copies of the
application shall be available for public
inspection and copying during business
hours at the national office of the
Wage and Hour Division and in the regional office of the Wage and Hour
Divison in which the particular State
is located. Interested persons shall be
afforded an opportunity to submit
written comments concerning the application of the State within a period
of time to be specified in the notice.
[35 FR 8226, May 26, 1970, as amended at 35
FR 14315, Sept. 11, 1970]
§ 870.53 Action upon an application for
exemption.
(a) The Administrator shall grant or
deny within a reasonable time any application for the exemption of Stateregulated garnishments. The State representative shall be notified in writing
of the decision. In the event of denial,
a statement of the grounds for the denial shall be made. To the extent feasible and appropriate, the Administrator may afford to the State representative and to any other interested
persons an opportunity to submit orally or in writing data, views, and arguments on the issue of whether or not an
exemption should be granted and on
any subsidiary issues.
(b) If an application is denied, the
State representative shall have an opportunity to request reconsideration
by the Administrator. The request
shall be made in writing. The Administrator shall permit argument whenever
the opportunity to do so has not been
afforded under paragraph (a) of this
section, and may permit argument in
any other case.
(c) General notice of every exemption
of State-regulated garnishments and of
its terms and conditions shall be given
by publication in the FEDERAL REGISTER.
§ 870.54 Standards
governing
the
granting of an application for exemption.
The Administrator may grant any
application for the exemption of Stateregulated garnishments whenever he
finds that the laws of the State satisfy
the policy expressed in § 870.51(a).
§ 870.55 Terms and conditions of every
exemption.
(a) It shall be a condition of every exemption of State-regulated garnishments that the State representative
have the powers and duties
(1) To represent, and act on behalf of,
the State in relation to the Administrator and his representatives, with regard to any matter relating to, or arising out of, the application, interpretation, and enforcement of State laws
regulating garnishment of earnings;
(2) To submit to the Administrator in
duplicate and on a current basis, a certified copy of every enactment by the
State legislature affecting any of those
laws, and a certified copy of any decision in any case involving any of those
laws, made by the highest court of the
State which has jurisdiction to decide
or review cases of its kind, if properly
presented to the court; and
(3) To submit to the Administrator
any information relating to the enforcement of those laws, which the Administrator may request.
(b) The Administrator may make any
exemption subject to additional terms
and conditions which he may find appropriate to carry out the purposes of
section 303(a) of the Act.
§ 870.56 Termination of exemption.
(a) After notice and opportunity to
be heard, the Administrator shall terminate any exemption of State-regulated garnishments when he finds that
the laws of the State no longer satisfy
the purpose of section 303(a) of the Act
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Wage and Hour Division, Labor
§ 870.57
or the policy expressed in § 870.51(a).
Also, after notice and opportunity to
be heard, the Administrator may terminate any exemption if he finds that
any of its terms or conditions have
been violated.
(b) General notice of the termination
of every exemption of State-regulated
garnishments shall be given by publication in the FEDERAL REGISTER.
§ 870.57 Exemptions.
Pursuant to section 305 of the CCPA
(82 Stat. 164) and in accordance with
the provisions of this part, it has been
determined that the laws of the following States provide restrictions on
garnishment which are substantially
similar to those provided in section
303(a) of the CCPA (82 Stat. 163); and
that, therefore, garnishments issued
under those laws should be, and they
hereby are, exempted from the provisions of section 303(a) subject to the
terms and conditions of §§ 870.55(a) and
870.56:
(a) State of Virginia. Effective June 30,
1978, garnishments issued under the
laws of the State of Virginia are exempt from the provisions of sections
303(a) and 303(b) of the CCPA under the
following additional conditions: (1)
Whenever garnishments are ordered in
the State of Virginia which are not
deemed to be governed by section 34–29
of the Code of Virginia, as amended,
and the laws of another State are applied, sections 303(a) and 303(b) of the
CCPA shall apply to such garnishments
according to the provisions thereof;
and (2) whenever the earnings of any
individual subject to garnishment are
withheld and a suspending or supersedeas bond is undertaken in the
course of an appeal from a lower court
decision, sections 303(a) and 303(b) of
the CCPA shall apply to the withholding of such earnings under this
procedure according to the provisions
thereof.
[35 FR 18527, Dec. 5, 1970, as amended at 43
FR 28472, June 30, 1978]
PARTS 871–899 [RESERVED]
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| File Type | application/pdf |
| File Modified | 2019-11-20 |
| File Created | 2019-11-20 |