section 6 cannot apply by reason of an express exemption in section 13(a). (See sec. 800.12.) More particularly, the equal pay standards have no application with respect to wages paid employees who are neither engaged in or in the production of goods for interstate commerce nor employed in an enterprise which is so engaged. Section 800.106.-Application to labor organizations.

Section 6(d) (2) of the Act prohibits a labor organization, representing employees of an employer having employees subject to the minimum wage provisions of section 6, from engaging in acts that cause or attempt to cause the employer to discriminate against an employee in violation of the equal pay provisions. Agents of the labor organization are also prohibited from doing so. Thus, such a labor organization and its agents must refrain from strike or picketing activities aimed at inducing an employer to institute or maintain a prohibited wage differential, and must not demand any terms or any interpretation of terms in a collective bargaining agreement with such an em

Section

ployer which would require the latter to discriminate in the payment of wages contrary to the provisions of section 6(d) (1). Section 6(d) (2), together with the special provision in section 4 of the Equal Pay Act of 1963 allowing a deferred effective date for application of the equal pay provisions to employees covered by specified existing collective bargaining agreements (see sec. 800.101) are indicative of the legislative intent that in situations where wage rates are governed by collective bargaining agreements, unions representing the employees shall share with the employer the responsibility for ensuring that the wage rates required by such agreements will not cause the employer to make payments that are not in compliance with the equal pay provisions. Thus, where equal work is being performed within the meaning of the statute, a wage rate differential which exists between male and female employees cannot be justified on the ground that it is a result of negotiation by the union with the employer, for negotiation of such a discriminatory wage differential is prohibited under the terms of the equal pay amendment.

800.107.-"Employer",

"employ❞ defined.

"employee",

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 (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 "in

cludes 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 the interpretative bulletin on joint employment, Part 791 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. [32 F.R. 2379, February 3, 1967]

Section 800.108.-Meaning of "establishment". Although not expressly defined in the Act, the term "establishment" has a well settled meaning in the application of the Act's provisions. It 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., 1st sess., p. 25). Each physically separate place of business is ordinarily considered a separate establishment. For example, where a manufacturer operates at separate locations a plant for production of its goods, a warehouse for storage and distribution, several stores from which its products are sold, and a central office for the enterprise, each physically separate place of business is a separate establishment. Under certain circumstances, however, two or more portions of a business enterprise, even though located on the same premises and under the same roof, may constitute more than one establishment. This would ordinarily be the case only if these portions of the enterprise are both physically segregated and engaged in operations which are functionally separated from each other and which have separate employees and maintain separate records. The application of these principles is illustrated further and in more detail by the discussion in Part 779 of this chapter of the term "establishment".

[32 F.R. 2379, February 3, 1967]

Section 800.109.-"Labor organization" defined. For purposes of application to labor organizations of the requirements of section 6(d) of the Act and the enforcement of such requirements under sections 16 and 17 (see sec. 800.166), section 6(d) (4) of the Act defines the term "labor organization" as meaning "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." This is the same definition of "labor organization" that is used in the Labor Management Relations Act, 1947, and will be applied in the same manner. Section 800.110.-Meaning of "wages".

The term "wages" used in section 6(d) (1) of the Act is considered to have the same meaning it has elsewhere in the Act. As a general rule, in determining compliance with the equal pay provisions, the wages paid by the employer will be calculated pursuant to the same principles and procedures as have traditionally been followed in calculating such wages for purposes of determin

ing compliance with the minimum wage provisions of the Act. Wages paid to an employee generally include all payments made to or on behalf of the employee as remuneration for employment. The provisions of section 7(e) of the Act under which some such payments may be excluded in computing an employee's "regular rate" of pay for purposes of section 7 do not authorize the exclusion of any such remuneration from the "wages" of an employee in applying section 6(d) of the Act. Thus, vacation and holiday pay, and premium payments for work on Saturdays, Sundays, holidays, regular days of rest, or other days or hours in excess or outside of the employee's regular days or hours of work, are remuneration for employment and therefore wage payments that must be considered in applying the equal pay provisions of the Act, even though not a part of the employee's “regular rate". On the other hand, payments made by an employer to an employee which do not constitute remuneration for employment are not "wages" to be compared for equal pay purposes under section 6(d) of the Act. Examples are payments related to maternity, and such reasonable payments for reimbursable expenses of traveling on the employer's business as are discussed in section 778.217 of this chapter.

[32 F.R. 2379, February 3, 1967] Section 800.111.-Wage "rate".

The term wage "rate" used in section 6(d) (1) of the Act is considered to encompass all rates of wages whether calculated on a time, piece, job, incentive or other basis. The term includes the rate at which overtime compensation or other special remuneration is paid as well as the rate at which straight time compensation for ordinary work is paid. The term also includes the rate at which a "draw", advance, or guarantee is paid against a commission settlement.

Section 800.112.-Cost or value of non-cash items as included in wages.

The reasonable cost or fair value of certain perquisites, as provided in section 3 (m) of the Act and Part 531 of this chapter is, by definition, a part of the wage paid to an employee for purposes of the Act. Section 3 (m), in part provides that the wage paid to any employee includes "the reasonable cost, as determined by the Secretary of Labor, to the employer of furnishing such em

ployee with board, lodging, or other facilities, if such board, lodging, or other facilities are customarily furnished by such employer to his employees". As an exception to this rule, section 3(m) provides 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 exIcluded therefrom under the terms of a bona fide collective-bargaining agreement applicable to the particular employee. A further provision of section 3(m) authorizes the Secretary "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." The statute directs that such evaluations, "where applicable and pertinent, shall be used in lieu of actual measure of cost in determining the wage paid to any employee". As explained in Part 531 of this chapter, it is the above provision of the Act which governs the payment, otherwise than in cash, of wages which the Act requires. Regulations under which the reasonable cost or fair value of such facilities furnished may be computed for inclusion as part of the wages required by the Act are also contained in Part 531 of this chapter.

(32 F.R. 2380, February 3, 1967)

Section 800.113.-Particular types of payments as wages.

In addition to the examples referred to in sections 800.110 through 800.112, some further illustrations of the types of payments that must be considered in computing wages and wage rates for purposes of the equal pay provisions may be helpful. The Act requires comparison of the wage rates paid for "work on jobs", which makes relevant all remuneration for employment and not just that portion which constitutes compensation for particular hours of employment or particular work done. Clearly this includes all payments that may be counted as part of the minimum wage rate per hour required under section 6 of the Act, all payments that are part of the employee's regular rate under section 7 of the Act, and all overtime premiums. It includes in addition, however,

other payments (such as the holiday and vacation pay previously mentioned in section 800.110) for the employee's work on the job as a whole which may have no direct relation to particular hours or weeks of work; and the inclusion of such payments in the wages compared for equal pay purposes does not depend on whether they can be counted as a part of the wage rate per hour required under section 6 as a minimum wage or whether they constitute part of the regular rate of pay under section 7. In accordance with the foregoing principles, the wages to be considered in determining compliance with the equal pay provisions include, in addition to such payments as hourly and daily wages, sums paid as weekly, monthly, or annual salaries; wages measured by pieces produced or tasks performed; commissions, bonuses or other payments measured by production, efficiency, attendance, or other job-related factors, or agreed to be paid under the employment contract; standby and on-call pay; and extra payments made for hazardous, disagreeable, or inconvenient working conditions. These are illustrative, although not exhaustive, of the types of payments included, when part of the remuneration for employment, in the wages to be compared where employees of opposite sexes are employed in jobs subject to the equal pay standard. On the other hand, the "wages" which are compared for equal pay purposes do not include bona fide gifts or payments in the nature of gifts which would be excluded from the employee's regular rate under section 7(e) (1) of the Act and section 778.212 of this chapter. Likewise, sums paid as discretionary bonuses are not considered wages for equal pay purposes if such payments meet the requirements of section 7(e) (3) (a) of the Act and section 778.211 of this chapter. Study is still being given to some categories of payments made in connection with employment subject to the Act, to determine whether and to what extent such payments are remuneration for employment that must be counted as part of wages for equal pay purposes. These categories of payments include sums paid in recognition of services performed during a given period pursuant to a bona fide profit-sharing plan or trust meeting the requirements of Part 549 of this chapter or pursuant to a bona fide thrift or

savings plan meeting the requirements of Part 547 of this chapter, and 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. (See sections 778.214 and 778.215 of this chapter.)

[32 F.R. 2380, February 3, 1967]

Section 800.114.-"Male jobs" and "female jobs" generally.

(a) Wage classification systems which designate certain jobs as "male jobs" and other jobs as "female jobs" frequently specify markedly lower rates for the "female jobs". Because such a practice frequently indicates a pay practice of discrimination based on sex, where such systems exist a serious question would be raised as to whether prohibited wage differentials are involved. This position is consistent with that taken by the National War Labor Board which found such systems inherently discriminatory and explained that it is not consistent with the principle of equal pay for equal work to designate certain jobs as "female jobs" and other jobs as "male jobs" and on that ground alone establish rate differentials against the former and in favor of the latter. The Board held that the equal pay principle requires that proper rates be set for all jobs, based upon a fair objective evaluation of duties and functions, irrespective of the sex of the workers assigned to them (General Electric Co. and Westinghouse Electric Corp., Case No. 111-17208-D and 111-17209-D, Dec. 12, 1945).

[32 F.R. 2380, February 3, 1967]

It should be further noted that wage classification systems which designate certain jobs as "male jobs" and other jobs as "female jobs" may contravene Title VII of the Civil Rights Act of 1964 except in those certain instances where sex is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise (78 Stat. 241, 256). [32 F.R. 5737, April 8, 1967]

(b) Section 6(d) (1) prohibits discrimination on the basis of sex in the payment of wages to employees "for equal work on jobs" which are equal under the standards which it provides (emphasis supplied). (See the discussion in section 800.119 et seq.) The legislative history of the Equal Pay Act expressly refers to the War Labor Board expe

rience as furnishing a guide for testing "the relationship between jobs" and determining "equal work" and "equal skills" for purposes of a "practical" administration and application of the Act's "equal pay policy" (see, e.g., S. Rept. 176, 88th Cong. 1st sess., to accompany S. 1409; H. Rept. 309, 88th Cong. 1st sess., to accompany H.R. 6060). Some of the earliest cases confronting the War Labor Board on the application of the "equal pay for equal work" principle involved situations in which women were being hired to replace men as a result of the manpower shortages. The Board consistently ruled that the principle applied to these situations, as well as to situations where male. and female employees performed the same work concurrently and interchangeably, and therefore that women assigned "to take the place of men" to perform substantially the same jobs “formerly performed by men" were entitled to the same rate of pay as the men whom they replaced. Rotary Cut Box Shook Industry, 12 W.L.B. Rept. 605, 606, 608; General Electric Co., and Westinghouse Electric Co., supra, at pp. 668-669, 677, 686.

(c) That the Equal Pay Act was intended to encompass situations of this kind is confirmed by the declared purposes and terms of the Act as well as by the legislative history. The statute is intended to eliminate sex as a basis for wage differentials between employees performing equal work on jobs within the establishment, and if the rates paid for the same jobs are lower when occupants of the jobs are of one sex than they are when the jobs are filled by employees of the opposite sex, such discrimination within the establishment is equally in violation of the statutory prohibition whether or not employees of both sexes are employed in such jobs at the same time. Accordingly, where an employee of one sex is hired or assigned to a particular job to replace an employee of the opposite sex, comparison of the newly assigned employee's wage rate with that of the replaced former employee is required for purposes of section 6(d) (1), whether or not the job is performed concurrently by em

ployees of both sexes. For example, if a particular job which in the past has been performed by a male employee becomes vacant and is then filled by a female employee, it would be contrary to the equal pay requirement to pay the female employee a lower wage rate than was paid for the same job when performed by the male employee, even though employees of both sexes may not be performing the job at the same time. Payment of the lower wage rate in such circumstances is a prohibited wage differential. The same principle is involved if all employees of one sex are removed from a particular job (by transfer or discharge) so as to retain employees of only one sex in a job previously performed interchangeably or concurrently by employees of both sexes. If a prohibited sex-based wage differential had been established or maintained in violation of the Act when the same job was being performed by employees of both sexes, the employer's obligation to pay the higher rate for the job cannot be avoided or evaded by the device of confining the job to members of the lower paid sex. Compliance with the Act in such circumstances can be achieved only by increasing the wage rate to the higher rate paid for the job when performed by employees of the opposite sex.

[32 F.R. 2380, February 3, 1967]

Section 800.115.-Inequalities in pay that raise questions under the Act.

It is necessary to scrutinize with especial care those inequalities in pay between employees of opposite sexes which may indicate a pattern of discrimination in wage payment that is based on sex. Thus, a serious question would be raised where such an inequality, allegedly based on a difference in job content, is in fact one in which the employee occupying the job purportedly requiring the higher degree of skill, effort, or responsibility receives the lower wage rate. Likewise, because the equal pay amendment was designed to eliminate wage rate differentials which are based on sex, situations will be carefully scrutinized where employees of only one sex are concentrated in the lower grades of the wage scale, and where there does not appear to be any material relationship other than sex between the lower wage rates paid to such employees and the higher rates paid to employees of the opposite sex. Such concentrations in rate range situations may occur also where

an employer follows a practice of paying a range of rates to newly hired employees. Differentials in entrance rates will not constitute a violation of the equal pay principle if the factors taken into consideration in determining which rate is to be paid each employee are applied equally to men and women. This would be true, for example, if all persons who have a parent employed by the firm are paid at the highest rate of the rate range whether they are men or women. However, if in a particular establishment all persons of one sex tend to be paid at the lowest rate of the range and employees of the opposite sex hired to perform the same work tend to be paid at the highest rate of the range, and if no specific factor or factors other than sex appear to be associated with the difference in pay, a serious question would be raised as to whether the pay practice involves prohibited wage differentials.

Section 800.116.-Equality and inequality of pay in particular situations.

(a) Overtime work. Because overtime premiums are a part of wages for purposes of the equal pay provisions, where men and women receive the same straight-time rates for work subject to the equal pay standards, but the men receive an overtime premium rate of twice the straight-time rate while the women receive only one and one-half times the straight-time rate for overtime, a prohibited wage rate differential is being paid. On the other hand, where male and female employees perform equal work during regular hours but employees of one sex only continue working overtime into another work period, work performed during this later period may be compensated at a higher rate where such is required by law or is the customary practice of the employer. However, in such a situation the payment of the higher rate to employees of one sex for all hours worked, including the non-overtime hours when they are performing equal work with employees of the opposite sex, would result in a violation of the equal pay provisions. If male and female employees are performing equal work in the establishment during regular hours but only some of these employees continue working into an overtime period, payment of a higher wage rate for the overtime worked would not be in violation of the equal pay standard so long as it were paid for the actual overtime hours worked by the employees, whether male or female.