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UNITED STATES OF AMERICA

Part 784-The Scope and Applicability of the Exemptions Provided by Sections 13(a) (5) and 13(b)(4) of the Fair Labor Standards Act of 1938 as Amended1

Section

784.0

784.1

784.2

784.3

784.4

784.5

784.6

784.7

784.8

784.9

Introductory statement.

Guiding interpretative principles.

Employment in exempt, nonexempt, and noncovered work during a workweek.
Off or dead season work.

Addition of foreign ingredients to the aquatic forms of animal and vegetable life.
General character of the section 13(a) (5) exemption.

General scope of section 13(a) (5) exemption.

Office, clerical and maintenance employees.

Off-shore activities.

Shore activities-"Loading, unloading, or packing of such products for shipment". 784.10 Processing (other than canning), freezing, and curing.

784.11

784.12

Fish and seafood wholesaling.

Processing or manufacturing operations which are not within the exemption.

784.13 Definition of canning under section 13(b) (4).

784.14 "Necessary preparatory operations".

784.15 "Hermetically sealing and sterilizing or pasteurizing".

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AUTHORITY: Sections 784.0 to 784.17 issued under 52 Stat. 1060 (29 U.S.C. 201–219) : Interpret or apply 52 Stat. 1067 (29 U.S.C. 213).

SOURCE: Sections 784.0 to 784.17 appear at 24 F.R. 1021 Feb. 11, 1959.

SECTION 784.0 INTRODUCTORY

STATEMENT.

(a) Scope and significance.

(1) The purpose of this part is to make available in one place the general 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 enforce

129 U.S.C. 201-219.

2 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. See 15 F.R.

3290.

499039 0-59

ment will seek to apply it." These interpretations contain 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 the examination of an interpretation that it is incorrect. To the extent that prior administrative rulings, interpretations, practices, and enforcement policies relating to sections 13(a) (5) and 13(b) (4) are inconsistent or in conflict with the principles stated in this part, they are hereby rescinded. The interpretations contained herein may be relied upon in accordance

3 Skidmore v. Swift & Co., 323 U.S. 134, 138.

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with 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.

(2) The Fair Labor Standards Act applies to employees engaged in interstate or foreign commerce or in the production of goods for such commerce, including any closely related process or occupation directly essential to such production. It requires the payment to these covered employees of a prescribed minimum hourly wage rate, and overtime compensation of not less than one and one-half times the employees' regular rates of pay for all hours worked in excess of 40 in a workweek, unless such employees are exempt from one or both of these requirements by virtue of some specific provision of the act such as section 13(a) (5) or section 13(b) (4).

(3) Neither the minimum wage nor overtime provisions of the act apply to employees who are exempt under section 13 (a) (5). However, employees who come within the scope of section. 13(b) (4) must be paid the prescribed minimum wage but need not be paid the statutory overtime compensation.

(4) Section 13(a) (5) applies 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 (other than canning), marketing, freezing, curing, storing, or distributing the above products or byproducts thereof;".

(5) Section 13 (b) (4) applies 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;".5 SECTION 784.1 GUIDING INTERPRETATIVE PRINCIPLES.

(a) It is clear that Congress intended the Fair Labor Standards Act to be broad in its scope.

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"Breadth of coverage is vital to its mission," and any exemption from its coverage must be narrowly construed and applied only to those employees who are plainly and unmistakably within its terms and spirit. This construction of the exemptions is necessary to carry out the broad remedial objectives for which the act was passed.'

(b) 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 differentiated as to whether employees are to be exempt because they are employed by a particular employer, employed in a particular type of establishment, employed in a particular industry, or employed in a particular capacity or operation.

(c) The language in both sections 13 (a) (5) and 13(b) (4), the legislative history, and court decisions make clear that these exemptions are not to be interpreted as though they were intended to grant an exemption to all employees employed in the fishing industry or in the fish. canning industry. By their own terms, the exemptions are applicable only to employees employed in certain specified capacities or occupations. Though a person may be employed in an occupation closely related and directly essential to the catching, processing, or canning of fish so as to bring him within the coverage of the act, if his activities are not an integral part of the catching, processing, or canning of

7 Phillips v. Walling, 324 U.S. 490; Calaf v. Gonzalez, 127 F. 2d 934 (C.A. 1); Bowie v. Gonzalez, 117 F. 2d 11 (C.A. 1) Mitchell v. Stinson, 217 F. 2d 210 (C.A. 1); Fleming v. Hawkeye Pearl Button Co., 113 F. 2d 52 (C.A. 8).

See Mitchell v. Stinson, 217 F. 2d 210 (C.A. 1), wherein the court in considering the various types of exemptions contained in the act stated that the applicability of sections 13(a) (5) and 13(b)(4) depended on the capacity in which the particular employee was acting.

See 83 Cong. Rec. 7443 where the sponsor of the exemption as it finally appeared in the original act stated: "This amendment is not the same. In the last amendment I was trying to define the fishing industry. I am now dealing with those persons who are exempt." See also 83 Cong. Rec. 7408, 7421-23, 7443; Conf. Rep. No. 1453, 81st. Cong. 1st. sess. (1949); U.S. Code Cong. Serv. 1949, Vol. 2, p. 2268: Mitchell v. Stinson, 217 F. 2d 210 (C.A. 1); Dize v. Maddrix, 144 F. 2d 584 (C.A. 4), affirmed 324 U.S. 697.

Compare McComb v. Consolidated Fisheries Co.. 174 F. 2d 74 (C.A. 3), which was decided before the Stinson case and before the Supreme Court's decision in the Farmers' Irrigation case, 337 U.S. 755, and also before the enactment of the 1949 amendments. As pointed out in the Stinson decision, the reasoning of the Consolidated Fisheries decision is inconsistent with the legislative history and is therefore "not persuasive" authority (217 F. 2d at 216). Also, the reasoning of the Consolidated Fisheries decision is directly opposite to that of the Supreme Court's subsequent decision in the Farmers' Irrigation case, 337 U.S. at 759-760, in particular Footnote 7, where Dize v. Maddrix is cited with approval.

fish, the respective exemptions would not be available.10

SECTION 784.2 EMPLOYMENT IN EXEMPT, NONEXEMPT, AND NONCOVERED WORK DURING A WORKWEEK.

(a) The wage and hour requirements of the act do not apply to any employee 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.

(b) 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. However, 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."

(c) The combination of exempt work under section 13(a) (5) and 13(b)(4), or of one of these sections with exempt work under another section of the act, is 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 hour requirements would not be applicable. If the scope of the exemption is not the same,

10 Mitchell v. Stinson, 217 F. 2d 210 (C.A. 1); Dize v. Maddrix, 144 F. 2d 584 (C.A. 4), affirmed 324 U.S. 697. See also Farmers' Irrigation Co. v. McComb, 337 U.S. 755 wherein the Supreme Court held that the agricultural exemption which is similarly worded must be strictly limited to the particular specified operations, exclusive of activities which, though necessary or even indispensable to the specified operation were not actually a part of the operation itself.

11 Mitchell v. Stinson, 217 F. 2d 210 (C.A. 1): Walling v. Public Quick Freezing and Cold Storage Co., 62 F. Supp. 924 (S. D. Fla.).

however, the exemption applicable to the employee is that provided by whichever exemption provision is more limited in extent 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 one-half for his overtime work during that week. 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.

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SECTION 784.3 OFF OR DEAD SEASON WORK.

Generally, work such as the repair and maintenance of fishing equipment and of processing and canning equipment and machinery during the dead or inactive season is not exempt.13 Consequently, the repair and maintenance of processing and canning machinery and equipment before or after the close of the active season are not exempt. Similarly, the repair of fishing equipment at the end of the active season would be nonexempt work. On the other hand, the repair of fishing equipment such as boats, nets and traps immediately prior to the beginning of the fishing season has a sufficiently close relationship to the exempt operations so as to bring the employees of an employer engaged in fishery operations who are employed in such duties within the exemption. In any event, nonexempt work performed in the inactive season is closely related and directly essential to the production of goods for commerce which

12 Cf. Mitchell v. Myrtle Grove Packing Co., 350 U.S. 891; Tobin v. Blue Channel Corp., 198 F. 2d 245 (C.A. 4).

13 See Maneja v. Waialua Agricultural Co., 349 U.S. 254; Mitchell v. Stinson, 217 F. 24 210 (C.A. 1); Maisonet v. Central Coloso, 6 Labor Cases (CCH) par. 61.337, 2 WH Cases 752 (D. P.R.); Abram v. San Joaquin Cotton Oil Co., 49 F. Supp. 393 (S.D. Calif.), and Heaburg v. Independent Oil Company, 46 F. Supp. 751 (W.D. Tenn. E. D.).

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