ployer 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.

Section 784.140 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 section 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 or on mixed 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.

Section 784.141 Fabrication and handling of

supplies for use in named operations.

(a) As noted in section 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 active season, are ordinarily too remote from the actual conduct of the named operations to come within the exemption (see section 784.113), and are not affected by the natural factors (section 784.138) 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 workweek makes parts to be used in a manufacturing plant operated by his employer, this work, since it does not directly or necessarily con

tribute 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 section 784.116 for a more detailed discussion).

Section 784.142 Examples of nonexempt employees.

An employer who engages 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 section 784.160, 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 section 784.159), 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 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.

Section 784.143 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 Act 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 em

braced in the term and not to all those engaged in the fish canning industry (Mitchell v. Stinson, 217 F.2d 214). Congress defined the term "canning" (House (Conference) Report No. 1453, 81st Cong., 1st sess. 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 containers and the placing of the sealed containers in 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 as 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(b) (4) rather than section 13(a) (5).

Section 784.144 "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.

Section 784.145 Preliminary processing by the

canner.

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 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 a 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".

Section 784.146 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 premilinary 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.

Section 784.147 Preservation of aquatic products for later canning.

The cooling, icing, or refrigeration of the acquatic products in the course of canning does not constitute such a break or discontinuance of the process as to bring the preparatory operations

within other named operations in section 13(b) (4) instead of canning if the purpose of the refrigeration is to prevent spoilage for a short period, such as over the week-end, or during the transfer or shipment of the prepared products, or directly prior to the opening of the canning season. On the other hand, the freezing of aquatic products to be stored for a protracted or indefinite period for future canning is too remote from the actual canning to be considered as a part of that operation; it would, however, qualify as a "freezing" operation which is an exempt operation named in section 13(b) (4). This distinction is not without significance, for, as an exempt freezing operation, employees engaged therein are entitled to the minimum wage prescribed by section 6(b) of the Act for those to whom the minimum wage benefits are being extended for the first time as a result of the Fair Labor Standards Act amendments of 1961, rather than the minimum wage prescribed by section 6(a) of the Act for employees performing work which was subject to the minimum wage prior to these amendments (sections 784.23 to 784.25).

Section 784.148 Processing of aquatic prod

ucts for canning and for other disposition. Where canning and processing operations are intermingled, the former and not the latter exemption applies (see Mitchell v. Myrtle Grove Packing Company, 350 U.S. 891; Tobin v. Blue Channel Corporation, 198 F. 2d 245). Thus, where preparatory operations are performed on fish or seafood, some of which are to be canned and some of which are for processing, all the necessary preparatory operations are exempt as part of canning until that point in the operations where the commodity is channeled to accomplish the separate objectives, namely, canning or processing. Thereafter, the canning operations would be exempt as canning and the processing operations would be exempt as processing. For example, all the preparatory activities in a roe canning plant such as any unloading of the fish, cutting off the heads and tails, cleaning and scaling leading up to and including the extraction of the roe would qualify as canning operations, whereas the subsequent boning and filleting of the fish would come within processing operations when none of the filleted fish is to be canned. The minimum rates applicable in such a situation would be determined in

accordance with the principles stated in sections 784.23 to 784.25 of Subpart A of this Part 784. Section 784.149 "Hermetically sealing and sterilizing or pasteurizing".

As previously indicated in section 784.143, hermetically sealing and sterilizing or pasteurizing are the operations which characterize the process of canning. Employment in such operations is clearly within the section 13 (b) (4) exemption. Employees whose work does not relate to a process which includes these operations are not employed in canning. A process involving the placing of the aquatic products in cans or containers without hermetically sealing and sterilizing or pasteurizing is not canning, within the meaning of the exemption. Depending on the operations involved it may be "processing" or "packing for shipment" within the scope of the exemption, in which event the pay provisions for "new" rather than those for "old" coverage will be applicable, as explained in sections 784.23 to 784.25, in Subpart A of this part 784.

Section 784.150 "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 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 as a part of canning. The fact that such activities relate in part to products canned during previous weeks or seasons would not affect the aplication of the exemption, provided canning operations such as hermetic sealing and sterilizing, or labeling, are currently being carried on. When, however, operations with respect to the products processed by the employer are performed as a part of his activities in "marketing *** storing, packing for shipment, or distributing" such products rather than as a part of canning as above described

(cf. Calaf v. Gonzealez, 127 F. 2d 934; Tobin v. Blue Channel Corp., 198 F. 2d 245; Mitchell v. Myrtle Grove Packing Co., 350 U.S. 891), these operations, while also exempt under section 13 (b) (4), are subject to the minimum wage provisions of section 6(b) rather than section 6(a) of the Act and, if intermingled with those which are part of canning, will be subject to the rules stated previously in sections 784.23 to 784.25, in Subpart A of this Part 784.

Section 784.151 Employees "employed in" canning.

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 reform 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 sections 784.106, 784.141, and 784.142.

Section 784.152 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 (Fleming v. Hawkeye Pearl Button Co., 113 F.2d 52).

Section 784.153 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 section 784.106 et seq., and sections 784.141 and 784.142. Section 784.154 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 operations, another processor, or a wholesaler, as the case may be. As noted in section 784.139 (b), the Department has not questioned the applicability of the foregoing rule