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The scope and application of this definition is discussed in Part 776 of this chapter and in sections 779.200–779.235 of this chapter. Section 784.11 "Establishment”.
As used in the Act (including the provision quoted below in section 784.12), the term “establishment”, which is not specially defined therein, refers to a "distinct physical places 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. 1455, 81st Cong., 1st Sess., p. 25). This is the meaning of the term as used in sections 3(r), 3(s), and 6(b) of the Act. Section 784.12 "Enterprise engaged in com
merce 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 engaged in the procurement, processing, or distribution of aquatic 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:
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. Section 784.9 "Person".
As used in the Act (including the definition of “enterprise" set forth below in section 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)). Section 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
(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.
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.
The application of this definition is considered Part 776 of this chapter, dealing with the general in Part 776 of this chapter.
coverage of the Act, contains a detailed discussion Section 784.13 "Commerce".
of the application of this definition and what is "Commerce" as used in the Act includes inter
included in it. state and foreign commerce. It is defined in
Section 784.16 "State". section 3(b) of the Act to mean “trade, commerce, As used in the Act, “State” means “any State of transportation, transmission, or communication the United States or the District of Columbia or among the several States or between any State and any Territory or possession of the United States" any place outside thereof." (For the definition (Act, section 3 (c)). The application of this defof “State”, see section 784.16.) The application
inition in determining questions of coverage under of this definition and the kinds of activities which the Act's definition of "commerce" and "produced” it includes are discussed at length in Part 776 of (see sections 784.13, 784.14) is discussed in Part this chapter dealing with general coverage of the 776 of this chapter, dealing with general coverage. Act.
Section 784.17 “Regular rate". Section 784.14 “Production".
As explained in Part 778 of this chapter, dealing To understand the meaning of “production" of with overtime compensation, employees subject to goods for commerce as used in the Act it is neces the overtime pay provisions of the Act must gensary to refer to the definition in section 3(i) erally receive for their overtime work in any of the term “produced”. A detailed discussion of workweek as provided in the Act not less than one the application of the term as defined is contained and one-half times their regular rates of pay. Secin Part 776 of this chapter, dealing with the gen tion 7(d) of the Act defines the term "regular
rate" "to include all remuneration for employeral coverage of the Act. Section 3(j) provides that "produced" as used in the Act “means pro ment paid to, or on behalf of, the employee" except duced, manufactured, mined, handled, or in any certain payments which are expressly described in other manner worked on in any State; and for the and excluded by the statutory definition. This
definition, which is discussed at length in (Part purposes of this Act an employee shall be deemed to have been engaged in the production of goods 778) of this chapter, determines the regular rate if such employee was employed in producing, man upon which time and one-half overtime compensaufacturing, mining, handling, transporting, or in tion must be computed under section 7(a) of the any other manner working on such goods, or in any Act for employees within its general coverage who closely related process or occupation directly es are not exempt from the overtime provisions under sential to the production thereof, in any State.” either of the fishery and seafood exemptions pro(For the definition of “State," see section 784.16) vided by sections 13(a) (5) and 13(b) (4) or
under some other exemption contained in the Act. Section 784.15 "Goods".
It should be noted that if such an employee is not The definition in section 3(i) of the Act states
himself engaged in commerce or in the production that “goods”, as used in the Act, means "goods (in
of goods for commerce as defined by the Act and cluding ships and marine equipment), wares, prod
in the courts, and is within the Act's coverage ucts, commodities, merchandise, or articles or sub
only by reason of his employment in an enterprise jects of commerce of any character, or any part engaged in commerce or in the production of goods or ingredient thereof, but does not include goods
for commerce, under the amendments to the Act after their delivery into the actual physical pos effective on September 3, 1961, there is no obligasession of the ultimate consumer thereof other than
tion to pay overtime to him until September 3, a producer, manufacturer, or processor thereof." 1963, as explained below in section 784.25.
th the go
APPLICATION OF COVERAGE AND EXEMPTION PROVISIONS OF THE ACT
Section 784.18 Basic coverage in general. aquatic products are engaged in interstate or for
Except as otherwise provided in specific exemp eign commerce, or in the production of goods for tions, the minimum wage, overtime pay, and child such commerce, as defined in the Act, and are sublabor standards of the Act are generally applica ject to the Act's provisions except as otherwise ble to employees who engage in specified activities provided in sections 13(a)(5) and 13(b) (4) or concerned with interstate or foreign commerce. other express exemptions. A detailed discussion The employment of oppressive child labor in or
of the activities in commerce or in the production about establishments producing goods for such
of goods for commerce which will bring an emcommerce is also restricted by the Act. Begin
ployee under the Act is contained in Part 776 of ning on September 3, 1961, the monetary and child
this chapter, dealing with general coverage. labor standards of the Act are also generally ap Section 784.20 Commerce activities of enterplicable to other employees, not specifically ex prise in which employee is employed. empted, who are employed in specified enterprises Under amendments to the Fair Labor Standards engaged in such commerce or in the production of
Act effective September 3, 1961 (Pub. Law 87–30, goods for such commerce. The monetary stand 75 Stat. 65), employees not covered by reason of ards applicable to all the foregoing employees, their personal engagement in interstate commerce covered under the provisions discussed below in
activities, as explained in section 784.19, are neversections 784.19 and 784.20, are explained subse
theless brought within the coverage of the Act if quently in sections 784.23 to 784.25 of this Subpart
they are employed in an enterprise which is deA. The employer must observe these monetary fined in section 3(s) of the Act as an enterprise standards with respect to all such employees in his engaged in commerce or in the production of goods employ except those who may be denied one or
for commerce, or by an establishment described in both of these benefits by virtue of some specific section 3(s) (3) of the Act (see section 784.12). exemption provision of the Act, such as section
Such employees, if not exempt from minimum 13(a) (5) or 13(b) (4). It should be noted that
wages and overtime pay under section 13(a) (5) enterprises having employees subject to these
or exempt from overtime pay under section 13(b) exemptions may also have other employees who
(4), will have to be paid in accordance with these may be exempt under section 13(a) (1) of the Act,
monetary standards of the Act unless expressly subject to conditions specified in regulations, as exempt under some other provision. This would employees employed in a bona fide executive, ad
generally be true of employees employed in enterministrative, or professional capacity, or in the prises and by establishments engaged in the procapacity of outside salesman. The regulations
curement, processing, marketing or distribution of governing these exemptions are set forth and
seafood and other aquatic products, where the enexplained in Part 541 of this chapter.
terprise has an annual gross sales volume of Section 784.19 Commerce activities of em
$1,000,000 or more. Enterprise coverage is more ployees.
fully discussed in Part 776 of this chapter, dealing
with general coverage.
Section 784.21 Exemptions from the Act's prowho are engaged (a) in interstate or foreign com
visions. merce or (b) in the production of goods for such The Act provides a number of specific exempcommerce, which is defined to include any closely tions from the general requirements previously related process or occupation directly essential to described. Some are exemptions from the oversuch production (29 U.S.C. 206(a), 207(a); and time provisions only. Others are from the child see sections 784.13 to 784.16 for definitions govern labor provisions only. Several are exemptions ing the scope of this coverage). The Act as from both the minimum wage and the overtime annended in 1961 continues this coverage. In gen requirements of the Act. Finally, there are some eral, employees of businesses concerned with fish exemptions from all three-minimum wage, overeries and with operations on seafood and other time pay, and child labor requirements. An
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examination of the terminology in which the lative history as well as its language should be exemptions from the general coverage of the Fair given effect. However, “the details with which the Labor Standards Act are stated discloses language exemptions in this Act have been made preclude patterns which reflect congressional intent. Thus, their enlargement by implication” and “no matCongress specified in varying degree the criteria ter how broad the exemption, it is meant to apply for application of each of the exemptions and in only to” the specified activities (Addison v. Holly a number of instances differentiated as to whether Hill, 322 U.S. 607; Maneja v. Waialua, 349 U.S. employees are to be exempt because they are em 254). Exemptions provided in the Act “are to be ployed by a particular kind of employer, employed narrowly construed against the employer seeking in a particular type of establishment, employed in to assert them” and their application limited to a particular industry, employed in a particular those who come “plainly and unmistakably within capacity or occupation, or engaged in a specified their terms and spirit.” This construction of the operation. (See 29 U.S.C. 203(d); 207 (b), (c), exemptions is necessary to carry out the broad ob(h); 213 (a), (b), (c), (d). And see Addison jectives for which the Act was passed (Phillips v. v. Holly Hill, 322 U.S. 607; Mitchell v. Trade Walling, 324 U.S. 490; Mitchell v. Kentucky FiWinds, Inc., 289 F. 2d 278; Mitchell v. Stinson, nance Co., supra; Arnold v. Kanowsky, supra; 217 F. 2d 210.) In general, there are no exemp
Calaf v. Gonzalez, 127 F.2d 934; Bowie v. Gontions from the child labor requirements that apply zalez, 117 F.2d 11; Mitchell v. Stinson, 217 F.2d in enterprises or establishments engaged in fishing 210; Fleming v. Hawkeye Pearl Button Co., 113 or in operations on aquatic products (see Part 4,
F.2d 52). Subpart G of this Title). Such enterprises or Section 784.23 Minimum wages and overtime establishments will, however, be concerned with
pay for “old” and “new” coverage. the exemption from overtime pay in section 13
Under the Act as amended in 1961, an employer (b)(4) of the Act for employees employed in
may have some employees subject to its minimum specified "on-shore” operations (see section
wage, overtime pay, or child labor provisions who 784.101), and the exemption from minimum wages
would be covered by such provisions under the and overtime pay provided by section 13(a) (5)
"old" law even if the amendments had not been for employees employed in fishing, fish-farming,
enacted, and other employees whose coverage under and other specified "off-shore” operations on
such provisions was provided for the first time by aquatic products. These exemptions, which are
the 1961 amendments. As previously explained, subject to the general rules stated in section
such provisions of the Act, as amended, may apply 784.22, are discussed at length in Subpart B of
to an employee by reason of the activities in which this Part 784.
he is individually engaged, or because he is emSection 784.22 Guiding principles for apply. ployed in an enterprise whose activities satisfy the
ing coverage and exemption provisions. conditions prescribed in the law. However, the It is clear that Congress intended the Fair Labor minimum wage rates and overtime pay provisions
will not be uniform for all such employees until Standards Act to be broad in its scope. “Breadth
September 3, 1965. On and after that date, every of coverage is vital to its mission” (Powell v. U.S.
such employee subject to the minimum wage proCartridge Co., 339 U.S. 497). An employer who
visions will be entitled to not less than $1.25 an claims an exemption under the Act has the burden
hour and every such employee subject to the overof showing that it applies (Walling v. General In
time provisions will be entitled to overtime pay for dustries Co., 330 U.S. 545; Mitchell v. Kentucky
all hours worked in excess of 40 in a workweek at a Finance Co., 359 U.S. 290; Tobin v. Blue Channel
rate not less than one and one-half times his regCorp., 198 F. 2d 245, approved in Mitchell v.
ular rate of pay. In contrast, during the period Myrtle Grove Packing Co., 350 U.S. 891; Fleming
beginning with the effective date of the 1961 v. Hawkeye Pearl Button Co., 113 F. 2d 52). Con
amendments on September 3, 1961 and ending Sepditions specified in the language of the Act are "explicit prerequisites to exemption” (Arnold v. tember 2, 1965, the minimum wage rates applicable Kanowsky, 361 U.S. 388). In their application, to employees subject to the minimum wage prothe purpose of the exemption as shown in its legis visions, and the overtime pay provisions appli
loyer sedan on limiti kabls et uetior da he brou a
(Phillips entuchy i skę, suta
Section 784.25 Pay standards for "newly cov
ered" 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
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, were exempt from minimum wages as well as overtime pay by virtue of section 13(a)(5) of the Act until the 1961 amendments, but who by virtue of these amendments are exempt only from overtime pay on and after September 3, 1961, under the amended section 13(b) (4) of the 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 for hours worked and unless exempted by section 13(b) (4) or some other provision, not less than one and one-half times their regular rates of pay (see section 784.18) for overtime, as shown in the following schedule:
cable to such employees who are not specifically exempt therefrom, will be different for employees in employment brought under the Act for the first time by the amendments than for employees whose coverage may be based on the "old" provisions of the Act. During this period employees whose coverage depends on the "new" provisions may be paid a lower minimum wage rate than those covered under the "old" provisions and may be employed for a longer workweek without overtime pay, as specified in the Act. Accordingly, employers who do not wish to pay to all covered employees the minimum wages and overtime pay required for employees covered under the "old" provisions will need to identify those employees who are covered under the "old" and those who are covered under the "new" provisions when wages are computed and paid under the Act. Section 784.24 Pay standards for employees
subject to "old" coverage of the Act. The 1961 amendments did not change the tests described in section 784.20 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) (5)) 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, 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) (4). (Minimum wage rates in Puerto Rico, the Virgin Islands, and American Samoa are governed by special provisions of the Act (29 U.S.C. 206 (a) (3); 206(c)). Information on these rates is available at any office of the Wage and Hour and Public Contracts Divisions.
Sept. 3, 1961.. $1 an hour.--- None required.
After 44 hours in a
workweek. Sept. 3, 1964.--- $1.15 an hour - After 42 hours in a
workweek. Sept. 3, 1965 1 $1.25 an hour. After 40 hours in a and thereafter.
1 Requirements identical to those for employees under "old" coverage. (Minimum wage rates for newly cov. ered 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.)