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tions stated concerning the Act will serve as

Section 783.5 INTERPRETATIONS MADE, "a practical guide to employers and employees CONTINUED, AND SUPERSEDED BY as to how the office representing the public

THIS PART. interest in its enforcement will seek to apply

On and after publication of this Part 783 in it” (Skidmore v. Swift, 323 U.S. 134). The

the FEDERAL REGISTER, the interpretations conSecretary of Labor and the Administrator will

tained therein shall be in effect and shall refollow these interpretations in the performance

main in effect until they are modified, rescinded of their duties under the Act, unless and until

or withdrawn. This part supersedes and rethey are otherwise directed by authoritative de

places the interpretations previously published cisions of the courts or conclude upon re-exam

in the FEDERAL REGISTER and Code of Federal ination of an interpretation that it is incorrect.

Regulations as Part 783 of this chapter. Prior The interpretations contained herein may be

opinions, rulings, and interpretations and prior relied upon in accordance with section 10 of

enforcement policies which are not inconsistent the Portal-to-Portal Act (29 U.C.C. 251-262),

with the interpretations in this part or with the so long as they remain effective and are not

Fair Labor Standards Act as amended by the modified, amended, rescinded, or determined by

Fair Labor Standards Amendments of 1961 are judicial authority to be incorrect.

continued in effect; all other opinions, rulings, Section 783.4 BASIC SUPPORT FOR IN interpretations, and enforcement policies on the TERPRETATIONS.

subjects discussed in the interpretations in this

part are rescinded and withdrawn. The interThe ultimate decisions on interpretations of

pretations in this part provide statements of the Act are made by the courts (Mitchell v.

general principles applicable to the subjects disZachry, 362 U.S. 310; Kirschbaum v. Walling,

cussed and illustrations of the application of 316 U.S. 517). Court decisions supporting in

these principles to situations that frequently terpretations contained in this part are cited

arise. They do not and cannot refer specifiwhere it is believed they may be helpful. On

cally to every problem which may be met by matters which have not been determined by

employers and employees in the application of the courts, it is necessary for the Secretary of

the Act. The omission to discuss a particular Labor and the Administrator to reach conclu

problem in this part or in interpretations supsions as to the meaning and the application of

plementing it should not be taken to indicate provisions of the law in order to carry out their

the adoption of any position by the Secretary responsibilities of administration and enforce

of Labor or the Administrator with respect to ment (Skidmore v. Swift, 323 U.S. 134). In

such problem or to constitute an administrative order that these positions may be made known

interpretation or practice or enforcement polto persons who may be affected by them, official

icy. Questions on matters not fully covered interpretations are issued by the Administra

by this part may be addressed to the Admintor on the advice of the Solicitor of Labor, as

istrator of the Wage and Hour and Public Conauthorized by the Secretary (Reorg. Pl. 6 of

tracts Divisions, United States Department of 1950, 64 Stat. 1263; Gen. Ord. 45A, May 24,

Labor, Washington 25, D.C., or to any Regional 1950, 15 F.R. 3290). As included in this part,

Office of the Divisions. these interpretations are believed to express the intent of the law as reflected in its provisions

SOME BASIC DEFINITIONS and as construed by the courts and evidenced

Section 783.6 DEFINITIONS OF TERMS by its legislative history. References to perti

USED IN THE ACT. nent legislative history are made in this part where it appears that they will contribute to a The meaning and application of the provibetter understanding of the interpretations. sions of law discussed in this part depend in

ONS MADE,
FEDED BY

Part 783 in ations con I shall rerescinded es and republished Federal 1. Prior and prior onsistent

with the 1 by the

1961 are rulings

s on the

in this

inter

ents of ets disson of uently Decifiet by on of cular

sup cate tary et to tive olmed

inonof

large degree on the definitions of terms used utory requirements applicable to employment
in these provisions. The Act itself defines some of a particular employee. It should also be
of these terms. Others have been defined and noted that “employer”, “enterprise”, and “estab-
construed in decisions of the courts. In the lishment" are not synonymous terms, as used in
following sections some of these basic the Act. An employer may have an enterprise
definitions are set forth for ready reference in with a more than one establishment, or he may
connection with the part's discussion of the have more than one enterprise, in which he em-
various provisions in which they appear. ploys employees within the meaning of the Act.
These definitions and their application are fur Also, there may be different employers who
ther considered in other statements of inter employ employees in a particular establishment
pretations to which reference is made, and in or enterprise.
the sections of this part where the particular

Section 783.8 “PERSON”.
provisions containing the defined terms are
discussed.

As used in the Act (including the definition

of "enterprise" set forth below in $ 783.9), "perSection 783.7 “EMPLOYER", "EM

son” is defined as meaning "an individual, partPLOYEE”, AND “EMPLOY”.

nership, association, corporation, business trust, The Act's major provisions impose certain legal representative, or any organized group of requirements and prohibitions on every "em persons” (Act, section 3(a)). ployer” subject to their terms. The employ

Section 783.9 "ENTERPRISE”. ment by an "employer” of an "employee" is to the extent specified in the Act, made subject The term "enterprise" which may, in some to minimum wage and overtime pay require situations, be pertinent in determining coverage ments and to prohibitions against the employ of this Act of employees employed by employment of oppressive child labor. The Act ers on vessels, is defined in section 3(r) of the provides its own definitions of “employer”, “em Act. Section 3(r) states: ployee”, and “employ”, under which "economic

Enterprise means the related activities performed reality” rather than “technical concepts” deter (either through unified operation or common control) mines whether there is employment subject to by any person or persons for a common business purits terms (Goldberg v. Whitaker House Coop

pose, and includes all such activities whether per

formed in one or more establishments or by one or more erative, 366 U.S. 28; United States v. Silk, 331

corporate or other organizational units including deU.S. 704; Rutherford Food Corp. v. McComb,

partments of an establishment operated through leas331 U.S. 772). An "employer”, as defined in ing arrangements, but shall not include the related section 3(d) of the Act, “includes any person

activities performed for such enterprise by an indeacting directly or indirectly in the interest of pendent contractor * * an employer in relation to an employee but shall The scope and application of this definition is not include the United States or any State or discussed in Part 776 of this chapter and in political subdivision of a State, or any labor $$ 779.200-779.235 of this chapter. organization (other than when acting as an

Section 783.10 “ESTABLISHMENT”. employer), or anyone acting in the capacity of officer or agent of such labor organization". An As used in the Act (including the provision "employee", as defined in section 3(e) of the quoted below in $ 783.11), the term "establishAct, "includes any individual employed by an ment”, which is not specifically defined therein, employer”, and “employ”, as used in the Act, refers to a "distinct physical place of business" in defined in section 3(g) to include "to suffer rather than to “an entire business or enterprise” or permit to work”. It should be noted, as which may include several separate places of explained in Part 791 of this chapter, dealing business. This is consistent with the meaning with joint employment, that in appropriate cir of the term as it is normally used in business cumstances two or more employers may be and in government, is judicially settled, and jointly responsible for compliance with the stat has been recognized in the Congress in the

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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). This is the meaning of the term as used in sections 3(r), 3(s), and 6(b) of the Act. An establishment may have employees employed away from the establishment as well as within it (H. Rept. No. 1453, supra). Section 783.11 "ENTERPRISE ENGAGED

IN COMMERCE OR IN THE PRODUC

TION 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 on vessels are as follows:

(s) "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 :

necessary to refer to the definition in section 3(j) of the term “produced”. A detailed discussion of the application of the term as defined is contained in Part 776 of this chapter, dealing with the general coverage of the Act. Section 3(j) provides that “produced" as used in the Act “means produced, manufactured, mined, handled, or in any other manner worked on in any State; and for the purposes of this Act an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any closely related process or occupation directly essential to the production thereof, in any State." (For the definition of "State" see $ 783.15.)

Section 783.14 "GOODS". The definition in section 3 (i) of the Act states that "goods”, as used in the Act, means "goods (including ships and marine equipment), wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof other than a producer, manufacturer, or processor thereof." Part 776 of this chapter, dealing with the general coverage of the Act, contains a detailed discussion of the application of this definition and what is included in it.

(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.

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The application of this definition is considered in Part 776 of this chapter.

Section 783.12 “COMMERCE”. "Commerce" as used in the set includes interstate and foreign commerce. It is defined in section 3(b) of the Act to mean "trade, commerce, transportation, transmission, or communication among the several States or between any State and any place outside thereof." (For the definition of "State", see $ 783.15.) The application of this definition and the kinds of activities which it includes are discussed at length in Part 776 of this chapter dealing with the general coverage of the let.

Section 783.13 “PRODUCTION”. To understand the meaning of "production" of goods for commerce as used in the Act it is

As used in the Act, “State” means “any State of the United States or the District of Columbia or any Territory or possession of the United States” (Act, section 3(c). The application of this definition in determining questions of coverage under the Act's definition of commerce" and “produced” (see $$ 783.12, 783.13) is discussed in Part 776 of this chapter, dealing with general coverage.

Section 783.16 "WAGE”. "Wage" paid to an employee is defined in section 3(m) of the Act to include “the reasonable cost, as determined by the Secretary of Labor, to the employer of furnishing such employee with board, lodging, or other facilities,

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if such board, lodging, or other facilities are employees of businesses concerned with the
customarily furnished by such employer to his transportation of goods or persons on navigable
employees: Provided, That the cost of board, waters are engaged in interstate or foreign
lodging, or other facilities shall not be included commerce, or in the production of goods for
as a part of the wage paid to any employee to such commerce, as defined in the Act, and are
the extent it is excluded therefrom under the subject to the Act's provisions except as other-
terms of a bona fide collective bargaining agree wise provided in sections 13(a) (14) and 13(b)
ment applicable to the particular employee: (6) or other express exemptions. A detailed
Provided further, That the Secretary is au discussion of the activities in commerce or in
thorized to determine the fair value of such the production of goods for commerce which
board, lodging, or other facilities for defined will bring an employee under the Act is con-
classes of employees and in defined areas, based tained in Part 776 of this chapter, dealing with
on average cost to the employer or to groups of general coverage.
employers similarly situated, or average value

Section 783.19 COMMERCE ACTIVITIES to groups of employees, or other appropriate

OF ENTERPRISES IN WHICH EMmeasure of fair value. Such evaluations, where

PLOYEE IS EMPLOYED.
applicable and pertinent, shall be used in lieu
of actual measure of cost in determining the

Under amendments to the Fair Labor Standwage paid to any employee". Although there

ards Act effective September 3, 1961, employees is some incidental discussion in this part of this

not covered by reason of their personal engagedefinition and its impact, a fuller discussion of

ment in interstate commerce activities, as exits meaning and the regulations pertaining

plained in $ 783.18, are nevertheless brought thereto are set forth in Part 531 of this chapter.

within the coverage of the Act if they are

employed in an enterprise which is defined in Section 783.17 “AMERICAN VESSEL”.

section 3(s) of the Act as an enterprise engaged Section 3(p) of the Act, added by the 1961 in commerce or in the production of goods for Amendments, defines "American vessel” to in commerce, or by an establishment described in clude "any vessel which is documented or num section 3(s) (3) of the Act (see 3 783.11). Such bered under the laws of the United States." employees, if not exempt from the minimum This definition and its effect with respect to the wage and overtime pay requirements under secapplication of the Act to employment of in tion 13(a) (14) or exempt from the overtime dividuals as seamen are discussed in subsequent pay requirements under section 13(b) (6), will sections of this part.

have to be paid in accordance with these mone

tary standards of the Act unless expressly exAPPLICATION IN GENERAL OF THE ACT's

empt under some other provision. This would PROVISIONS

generally be true of employees employed in Section 783.18 COMMERCE ACTIVITIES .

enterprises and by establishments engaged in

a business concerned with transportation of OF EMPLOYEES.

goods or persons by vessels, where the enterprise Prior to the 1961 Amendments, the Fair

has an annual gross sales volume of $1,000,000 Labor Standards Act applied to all employees, or more. Enterprise coverage is more fully not specifically exempted, who are engaged discussed in Part 776 of this chapter, dealing (a) in interstate or foreign commerce or (b) in with general coverage. the production of goods for such commerce,

Section 783.20 EXEMPTIONS FROM THE which is defined to include any closely related

ACT'S PROVISIONS. process or occupation directly essential to such production (29 U.S.C. 206(a), 207(a); and see The Act provides a number of specific exSS 783.12 to 783.15 for definitions governing the emptions from the general requirements prescope of this coverage). The Act as amended viously described. Some are exemptions from in 1961 continues this coverage. In general, the overtime provisions only. Others are from

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the child labor provisions only. Several are tries Co., 330 U.S. 545; Mitchell v. Kentucky exemptions from both the minimum wage and Finance Co., 359 U.S. 290; Tobin v. Blue Chanthe overtime requirements of the Act. Finally, nel Corp., 198 F. 2d 245, approved in Mitchell there are some exemptions from all three v. Myrtle Grove Packing Co., 350 U.S. 891; minimum wage, overtime pay, and child labor Fleming v. Hawkeye Pearl Button Co., 113 F. requirements. An examination of the termi 2d 52). Conditions specified in the language of nology in which the exemptions from the gen the Act are "explicit prerequisites to exemption" eral coverage of the Fair Labor Standards Act (Arnold v. Kanowsky, 361 U.S. 388; and see are stated discloses language patterns which re Walling v. Haden, 153 F. 2d 196). In their flect congressional intent. Thus, Congress application, the purpose of the exemption as specified in varying degree the criteria for ap shown in its legislative history as well as its plication of each of the exemptions and in a language should be given effect. However, “the number of instances differentiated as to whether details with which the exemptions in this Act employees are to be exempt because they are have been made preclude their enlargement by employed by a particular kind of employer, implication” and “no matter how broad the exemployed in a particular type of establishment, emption, it is meant to apply only to” the speciemployed in a particular industry, employed fied activities (Addison v. Holly Hill, 322 U.S. in a particular capacity or occupation, or en 607; Maneja v. Waialua, 349 U.S. 254). Exgaged in a specified operation. (See 29 U.S.C. emptions provided in the Act "are to be nar203 (d); 207 (b), (c), (h); 213 (a), (b), (c), rowly construed against the employer seeking (d). And see Addison v. Holly Hill, 322 U.S. to assert them” and their application limited to 607; Walling v. Haden, 153 F.2d 196, certiorari those who come “plainly and unmistakably denied 328 U.S. 866; Mitchell v. Stinson, 217 within their terms and spirits.” This construcF. 2d 210.) In general, there are no exemp

tion of the exemptions is necessary to carry out tions from the child labor requirements that the broad objectives for which the Act was apply in enterprises or establishments engaged passed (Phillips v. Walling, 324 U.S. 490; in transportation or shipping (see Part 4, Sub Mitchell v. Kentucky Finance Co., supra; Arpart G of this title). Such enterprises or nold v. Kanowsky, supra; Helena Glendale (establishments will, however, be concerned) Ferry Co. v. Walling, supra; Mitchell v. Stinwith the exemption from overtime pay in sec son, 217 F. 2d 210; Fleming v. Hawkeye Pearl tion 13(b)(6) of the Act for employees em Button Co., 113 F. 2d 52; Walling v. Bay State ployed as seamen and the exemption from the Dredging & Contracting Co., 149 F. 2d 346, cerminimum wage and overtime pay requirements tiorari denied 326 U.S. 760; Anderson v. Manprovided by section 13(a) (14) for employees hattan Lighterage Corp., 148 F. 2d 971, certioso employed on vessels other than American

rari denied 326 U.S. 722; Sternberg Dredging vessels. These exemptions, which are subject Co. v. Walling, 158 F.2d 678). to the general rules stated in $783.21, are dis

Section 783.22 PAY STANDARDS FOR cussed at length in this part.

EMPLOYEES SUBJECT TO "OLD" Section 783.21 GUIDING PRINCIPLES FOR

COVERAGE OF THE ACT. APPLYING COVERAGE AND EXEMP

The 1961 amendments did not change the TION PROVISIONS.

tests described in $ 783.18 by which coverage It is clear that Congress intended the Fair based on the employee's individual activities is Labor Standards Act to be broad in its scope determined. Any employee whose employment (Helena Glendale Ferry Co. v. Walling, 132 F. satisfies these tests and would not have come 2d 616). "Breadth of coverage is vital to its within some exemption (such as section 13(a) mission" (Powell v. U.S. Cartridge Co., 339 (14)) in the Act prior to the 1961 amendments U.S. 497). An employer who claims an ex is subject to the "old" provisions of the law and emption under the Act has the burden of show entitled to a minimum wage of at least $1.15 an ing that it applies (Walling v. General Indus hour beginning September 3, 1961, and not less

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