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duction of goods for commerce". Also, under the definition in section 3(s) of the Act, an enterprise described in any of the five numbered clauses of the subsection is an enterprise "engaged in commerce or in the production of goods for commerce" if, in its activities, some 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”.
Section 794.13 "New" enterprise coverage
under 1961 amendments.
Section 794.14 Definitions governing “new”
enterprise coverage. (a) The scope of the added coverage on an enterprise basis, which was provided by the 1961 amendments to the Act, is determined with reference to the special definitions of the term "enterprise" in section 3(r) of the Act and of the term "enterprise engaged in commerce or in the production of goods for commerce" under section 3(s). The former definition, which also governs the meaning of the term "enterprise" as used in section 13(b) (10), is discussed in Subpart B. The provisions of the definition contained in section 3(s) which may have special pertinence to distributors of petroleum products are as follows:
(8) "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 $1,000,000, 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;
(a) Because the amendments to the Act effective September 3, 1961 (Public Law 87–30, 75 Stat. 65) did not change the principles of coverage, applicable before the amendments, which have been discussed in sections 794.8 to 794.12, all employees covered under these principles and not specifically exempt before the amendments became effective are required to be paid in accordance with the pay standards for "old" coverage set forth in section 794.15, except as otherwise provided by some specific exemption therefrom such as section 13(b) (10). If the employer has employees who are not covered under these principles, it is necessary to determine whether such employees are covered under the “new” enterprise coverage provisions added by the amendments, for if they are, the employer must comply with the pay standards for "newly covered” employees explained in section 794.16, except as he may be relieved therefrom by section 13(b) (10) or some other specific provision of the Act.
(b) Under these enterprise coverage provisions, if an enterprise or establishment is an “enterprise engaged in commerce or in the production of goods for commerce" as defined and delimited in section 3(s) of the Act (see Section 794.14), every employee employed in such enterprise or by such establishment whose work does not bring him within the general coverage of the Act under the principles discussed in sections 794.8 to 794.12 is brought within the minimum wage coverage of section 6(b), the overtime pay coverage of section 7(a) (2), and the child labor coverage of section 12(c), except as otherwise specifically provided by the Act. “Enterprise" coverage is discussed comprehensively in Part 776 of this chapter. A detailed discussion of such coverage as it relates to enterprises which have retail or service establish
(3) Any establishment of any such enterprise, except establishments and enterprises referred to in other paragraphs of this subsection, 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;
(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 estab lishment are the owner thereof or persons standing in the relationship of parent, spouse, or child of such owner.
(b) The application of the above definitions in the case of an enterprise which is engaged in the wholesale or bulk distribution of petroleum products may vary, depending on the nature of the related activities which are included in the enterprise (as defined in section 3(r) of the Act) and the sales volume derived therefrom. If any gasoline service establishments are included in the enterprise, reference should be made to Part 779 of this chapter for a full discussion of the principles governing coverage and exemption of the employees of such establishments. It should be noted that the employees of such establishments in any enterprise are exempt from the overtime pay provisions under section 13(b) (8), so that it is not necessary to determine the application of section 13(b) (10) to them. If any gasoline service establishment or other establishment in the enterprise qualifies as a “retail or service establishment” under the special definition in section 13(a) (2) of the Act, reference should be made to the discussions in Part 779 of this chapter relating to enterprise coverage under section 3(s) (1) and exemptions provided under section 13(a) (2) and under other provisions there discussed. For guidance as to the application of the definition in section 3(s) (3), Part 776 of this chapter should be consulted.
Section 794.16 Pay standards for "newly cov
The amendments to the Act which became effective September 3, 1961, provide special pay standards for prescribed periods which apply to 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 by changes in exemptions, or by both, which were enacted as part of the amendments. Every such "newly covered" employee must be paid minimum wages, and overtime pay at not less than one and one-half times his regular rate of pay, as shown in the following schedule, unless specifically excluded from such requirements by some provision of the amended Act.
Section 794.15 Pay standards for employees
subject to "old" coverage of the Act. Any employee who is engaged in commerce or in the production of goods for commerce, as explained in sections 794.8 to 794.12, and who would not have come within some exemption in the Act prior to the 1961 amendments, is covered by the "old” provisions of the law and entitled to a minimum wage of at least $1.15 an hour beginning September 3, 1961, and not less than $1.25 an hour beginning September 3, 1963, 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, unless he is specifically exempt therefrom under some other provision of the Act. (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 and Public Contracts Divisions.)
Section 794.17 Pay standards applicable be
ginning September 3, 1965. In comparing the schedule shown in section 794.16 with the pay standards for employees subject to "old" coverage in section 794.15, it will be noted that the minimum wage rates and overtime pay provisions will become uniform for all covered employees on September 3, 1965. On and after that date, every such employee subject to the minimum wage provisions will be entitled to not less than $1.25 an hour and every such employee subject to the overtime pay provisions will be entitled to overtime pay for all hours worked in excess of 40 in a workweek at a rate not less than one and onehalf times his regular rate of pay, unless he is exempt from one or both of these requirements by some other provision of the law.
EXAMPLES OF APPLICATION OF BASIC COVERAGE POSITIONS TO EMPLOYMENT
IN WHOLESALE OR BULK DISTRIBUTION OF PETROLEUM PRODUCTS
the this for
Section 794.18 Introductory statement.
It is common knowledge that petroleum products constantly move in large volume in the interstate and foreign commerce of the United States and are used in many ways which are important in carrying on such commerce and in producing goods which move in such commerce. It follows that many employees of enterprises engaged in the wholesale or bulk distribution of such products are engaged in activities which, under the principles discussed in sections 794.7 to 794.12, bring them within the general coverage of the Act as employees engaged in commerce or in the production of goods for commerce. As has been pointed out previously, the enterprises described in section 3(s) of the Act are also brought within the new enterprise coverage of the Act as enterprises engaged in commerce or in the production of goods for commerce when employees are so engaged in the activities of the enterprise, “including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person.” The discussion in the sections following is intended to illustrate by examples some of the most typical situations in which employees of such enterprises are engaged in activities covered by the Act. There are other employees whose activities may be covered; also there are other activities performed by the groups discussed which would result in coverage under the Act.
merce of such goods from points within the State to points outside the State (section 794.21); or
(4) Using the channels of interstate or foreign commerce for communication with out-of-State points; or
(5) Traveling across State lines in the course of performing duties of the employment.
(b) Also, there may be employees of such an enterprise who may be covered as employees “engaged in the production of goods for commerce” within the meaning of the Act, because of the relationship of their activities to any of the following:
(1) To goods handled by the enterprise which may be expected ultimately to move out of the State directly or as a part or ingredient of other goods (section 794.21); or
(2) To goods handled by the enterprise for uses within the State which are part of interstate or foreign commerce (section 794.22); or
(3) To goods handled by the enterprise which are sold to customers who use them in the production of other goods for commerce (sections 794.21, 794.22); or
(4) To the movement of goods in interstate or foreign commerce within the State (sections 794.20, 794.21, 794.22).
(c) The court decisions cited in sections 794.20, 794.21, and 794.22 illustrate the judicial application of these principles to particular employees, including employees in the occupations referred to in sections 794.23 to 794.28 and in other occupations. Section 794.20 Relationship of work to inflow
of products from outside the State. Petroleum products or other goods which are brought into a State to be sold to customers of particular establishments, or to particular customers pursuant to prior orders or contract arrangements or the anticipation of the needs of a stable group of such customers, continue in the stream of interstate or foreign commerce until they reach the destination for which they are intended, regardless of temporary pauses in storage facilities in the course of such transit. In accordance with the principles previously stated, the Act applies, subject to specific exemptions, to the employees who order, receive, and keep records
Section 794.19 Covered employment in general.
(a) Under the principles discussed in sections 794.7 to 794.12, employees of an enterprise engaged in the wholesale or bulk distribution of petroleum products may be covered as employees “engaged in commerce” within the meaning of the Act, because of the relationship of their activities to any of the following:
(1) To the flow in interstate or foreign commerce from outside the State to destinations within the State of goods distributed by the enterprise (section 794.20); or
(2) To the uses made of such goods within the State in carrying on interstate or foreign commerce (section 794.22); or
(3) To the flow in interstate or foreign com
on such goods, who transport them (either across State lines or within a single State) on all or any part of their journey to their final destination or perform other work in connection with the distribution of such goods while they remain in the stream of commerce, including employees who handle or work on the goods during such journey or during pauses in their transit or at the end of their journey before they have finally come to rest in the locations intended for them at the point of destination, or who perform other connected activities so closely related to such movement of the goods as to be a part of it as a practical matter. See in this connection Walling v. Jacksonville Paper Co., 317 U.S. 564; Standard Oil Co. v. Federal Trade Comm'n, 340 U.S. 231; Walling v. Jacksonville Paper Co., 69 F. Supp. 599, aff'd 167 F. 2d 448; McComb v. Herlihy, 161 F. 2d 568; Brown v. Minngas Co., 51 F. Supp. 363; MidContinent Petroleum Corp. v. Keen, 157 F.2d 310; Mitchell v. Livingston & Thebault Oil Co., 256 F. 2d 757; Walling v. Mutual Wholesale Co., 141 F. 2d 331; Walling v. Northwestern-Hanna Fuel Co., 67 F. Supp. 833, aff’d 166 F. 2d 932; West Kentucky Coal Co. v. Walling, 153 F. 2d 582; Mitchell v. C. & P. Shoe Corp., 286 F. 2d 109; Mitchell v. Sunshine Dept. Stores, 292 F. 2d 645; Donovan v. Shell Oil Co., 168 F. 2d 229; Rahgo v. Cities Service Oil Co., 33 N.Y.S. 2d 42; McComb v. W. E. Wright Co., 168 F. 2d 40; Sucrs. de Mayol v. Mitchell, 280 F. 2d 477, certiorari denied 364 U.S. 902.
582; Brown v. Minngas Co., 51 F. Supp. 363; Walling v. Griffin Cartage Co., 62 F. Supp. 396, aff?d 153 F. 2d 587; Stewart-Jordan Distributing Co. v. Tobin, 210 F. 2d 427, certiorari denied 347 U.S. 1013; Mitchell v. Royal Baking Co., 219 F. 2d 532; Walling v. Amidon, 153 F. 2d 159; Meeker Cooperative v. Phillips, 158 F. 2d 598; Mitchell v. Joyce Agency, 348 U.S. 945, affirming 110 F. Supp. 918; Kirschbaum v. Walling, 316 U.S. 517; Roland Electrical Co. v. Walling, 326 U.S. 657; Phillips v. Walling, 324 U.S. 490; Mitchell v. Independent Ice Co., 294 F. 2d 186, certiorari denied 368 U.S. 952; Lewis v. Florida Power & Light Co., 154 F. 2d 751; McComb v. Blue Star Auto Stores, 164 F. 2d 329; Nunn's Battery & Elec. Co. v. Goldberg, 15 W.H. Cases, 313. Section 794.22 Relationship of work to inter
state commerce activity within the State. Under the principles previously stated, the Act applies, subject to specific exemptions, to employ ees whose work, although performed within a single State and not involving operations on goods which are moving in interstate or in foreign commerce, has such a close and immediate tie with the carrying on of interstate or foreign commerce or with the production of goods for such commerce within the State that it must be considered as engaging in such commerce or in such production within the meaning of the Act's definitions. The general coverage of the Act thus extends to employees through whose activities petroleum products or other goods or services are furnished within the State to customers for use in operating or maintaining the instrumentalities or facilities by which commerce is carried on or by which goods for such commerce are produced, as in the case of fuel, equipment, or other products or services for use by airlines, ships, rail, bus, or truck lines in conducting interstate transportation, products for use in maintaining or improving highways or railroad tracks over which interstate commerce moves, and fuel or other items for use in meeting the needs of producers of goods for interstate or foreign commerce. See Thomas v. Hempt Bros., 345 U.S. 19; Alstate Constr. Co. v. Durkin, 345 U.S. 13; Roland Elect. Co. v. Walling, 326 U.S. 657; Emulsified Asphalt Products Co. v. Mitchell, 222 F. 2d 913; New Mexico Pub. Serv. Co. v. Engel, 145 F. 2d 636; Lewis v. Florida Power & Light Co., 154 F. 2d 751; Meeker Cooperative v.
Section 794.21 Relationship of work to prod
ucts that move out of the State. Under the principles previously stated, the Act applies, subject to specific exemptions, to employees whose work contributes to the movement out of the State of any petroleum products or other goods, including containers, such as those employees who handle or work on any goods which may be expected to leave the State in the same or an altered form, or as a part or ingredient of other goods, or who supply products or services to customers who use them in producing goods which are shipped out of the State, and including employees engaged in the related management, accounting, clerical, or other auxiliary activities concerned with such movements of goods. See in this connection Donovan v. Shell Oil Co., 168 F. 2d 229; West Kentucky Coal Co. v. Walling, 153 F. 2d
Phillips, 158 F. 2d 698; Farmers Reservoir Co. v. are engaged in commerce or in the production of
Section 794.25 Warehouse and bulk storage ing, 153 F. 2d 582; Mitchell v. Independent Ice
station employees. Co., 294 F. 2d 186; Walling v. Sturm & Sons, 6
Warehouse and bulk storage station employees W.H. Cases 131; Hertz Drivurself Stations v.
who regularly and recurrently engage in the loadUnited States, 150 F. 2d 923; Mitchell v. Raines, 238 F. 2d. 186.
ing or unloading of goods moving in commerce,
or who regularly and recurrently handle, pack or Section 794.23 Transportation employees. otherwise work on goods that will subsequently be
Among the employees who are considered en sent or taken to out-of-State points or to customers gaged in commerce or in the production of goods within the State who will use such goods to facilifor commerce within the meaning of the Act are
tate the carrying on of interstate or foreign comtransportation employees, such as truck drivers or merce or the production of other goods for such truck drivers' helpers, who transport petroleum commerce, are engaged in covered activities. products or other goods moving in interstate or
Section 794.26 Watchmen and guards.
Watchmen or guards who protect the warehouses
or bulk stations where goods moving in interstate within the State to places outside the State, or
or foreign commerce are kept, or where goods are who transport within the State petroleum prod
produced for such commerce, are covered under ucts or other goods to be used in carrying on, or
the Act. in producing goods for, interstate or foreign commerce. Dispatchers who route, plan, or otherwise Section 794.27 Custodial and maintenance control such transportation are also within the employees. general coverage of the Act.
Custodial and maintenance employees who per
form maintenance and custodial work on the maSection 794.24 Office employees.
chinery, equipment, or premises regularly used for Office employees of wholesale or bulk petroleum
the movement of goods in commerce or the producdistributors who regularly and recurrently order,
tion of goods for commerce are engaged in covered check records of, or make payments for goods com
Section 794.28 Salesmen and sales clerks, ployees who regularly and recurrently keep rec A salesman or a sales clerk who regularly and ords of, or otherwise work on, the accounts of their recurrently sells or takes orders for goods to be employer's out-of-State customers, or who regu obtained from outside the State or goods for delarly and recurrently prepare or mail letters, livery to points outside the State, or to customers checks, reports or other documents to out-of-State who will use such goods for the maintenance or points, are covered by the Act. Likewise, time operation of instrumentalities of commerce or to keepers who regularly and recurrently prepare produce other goods for commerce, is performing and maintain payrolls for and pay employees who
covered work. Subpart B-Exemption From Overtime Pay Requirements Under
Section 13(b) (10) of the Act
SCOPE AND APPLICATION IN GENERAL
any employee of an independently owned and con
trolled local enterprise (including an enterprise Section 13(b) (10) of the Act exempts from the overtime pay requirements of section 7 (but not with more than one bulk storage establishment) from the minimum wage or child labor require engaged in the wholesale or bulk distribution of ments) of the Act
petroleum products if (A) the annual gross vol