on a perishable commodity to which the exemption in section 7(c) for first processing applies, is considered engaged in the first processing of the named commodity throughout each series of operations, including byproduct operations, which commence with such initial processing of the named commodity and are performed in the same place of employment as a continuous series of operations during which the commodities remain perishable. Thus, where an employer "first processes" perishable or seasonal fresh fruits or vegetables and after a certain point in the operations the processing line divides so that different portions of the material being worked on may be processed into different products or byproducts, his employees who continue to process such different portions into the respective products or byproducts will be considered engaged in the first processing of the perishable or seasonal fresh fruits or vegetables: Provided, That all the operations take place in the same place of employment and are part of a continuous series of operations throughout which the commodities being worked on remain perishable. For example, where an apple processor starts with whole apples which he peels and cores, and continues to process the main portions on one production line and the peelings and cores on another to produce pomace, first processing includes not only the primary operations on the whole apples and the main portions but also the byproduct operations, provided each series of processing operations is performed in the same place of employment as a continuous series of operations commencing with the peeling and coring of the whole apples. Similarly, where a citrus fruit canner or processor makes cattle feed and molasses from citrus waste as a part of a continuous series of operations beginning with the fresh fruit, the section 7(c) exemption applies where both the primary operations on the edible fruit and the cattle feed and molasses operations take place in the same place of employment. The applicability of the section 7(c) exemption to such byproduct operations of a canner of perishable or seasonal fresh fruits or vegetables does not mean that operations performed on the "waste" portions after 1 McComb v. C. H. Musselman & Co., 74 F. Supp. 185, affirmed 167 F. 2d 918; Sugar Creek Creamery Co. v. Walker, 187 S. W. 2d 178 (Sup. Ct. Ark.); Shain v. Armour & Co., 50 F. Supp. 907 (W. D. Ky.); Walling v. Bridgeman-Russell Co., 2 W. H. Cases 785 (D. Minn.). removal of the main portions of the fruit are exempt as part of "canning"; the basis of the exemption is that the byproduct operations, performed as a continuous series of operations commencing with separation of the portions of the whole fruit, constitute "first processing" of the fresh fruit within the meaning of section 7(c). The fact that the initial processing operation on the whole fruit is also a part of the "canning" process performed on the main portions does not affect this result. (2) Processing performed in more than one place of employment. Where first processing operations are performed at one place of employment on a commodity named in section 7(c), and further processing operations on the processed commodity are then performed at another place of employment, such further processing operations are not part of the "first processing" of the named commodity which commenced at the first place of employment, but comprise a separate process.2 Thus, where a processor makes pomace from apple peels and cores in a place of employment other than the place where the processor starts with whole apples, or where the processor purchases apple peels and cores from others, the section 7 (c) exemption will not be applicable to his employees engaged in the operations on these peels and cores. Similarly, where citrus waste is processed in a place of employment other than the one where the fresh fruit is processed, or where citrus waste is purchased, the processing of the waste is not within the section 7(c) exemption. However, such separate processing performed in a second place of employment, viewed separately, can be exempt "first processing" but only if the operations in the second place of employment are themselves "first processing" of a commodity named in section 7 (c). Illustrative of this principle is the situation where a processor is engaged in separating milk, a named commodity, into skimmed milk and cream in one place of employment and is engaged in making powdered milk from such skimmed milk, also a named commodity, in another place of employ 2 Walling v. Bridgeman-Russell Co., 2 W. H. Cases 785; Shain v. Armour & Co., 50 F. Supp. 207; Abram v. San Joaquin Cotton Oil Co., 46 F. Supp. 969. See also Sugar Creek Creamery Co. v. Walker, 187 S. W. 2d 178 (Ark. Sup. Ct.). Contra, McComb v. Hunt Foods. 167 F. 2d 905 (this opinion does not appear to be in accord with the general principles applicable to construction of exemptions under the Fair Labor Standards Act). ment. (See also subparagraph (3) of this paragraph.) (3) Edible portions of fresh fruits or vegetables. The edible portions of fresh fruits or vegetables are considered to be fresh fruits or vegetables for purposes of section 7(c), even though they have been subjected to an operation such as peeling, shelling, coring, or slicing so long as the whole fruit or vegetable or any severed parts thereof remain raw, perishable and recognizable in the common understanding as fresh fruits or vegetables. If a whole fresh fruit or vegetable has been thus processed in one establishment, the peeling, shelling, coring or slicing will be considered a "first processing" operation. If the peeled, shelled, cored or sliced portions of the fresh fruit or vegetable, which are raw, perishable and recognizable in the common understanding as fresh fruits or vegetables, are then shipped to another establishment, these edible portions will be considered to be "fresh fruits or vegetables" and may themselves be "first processed" in the second establishment. On the other hand, if peels, shells, or cores produced by the processing operations in the first establishment are shipped to another establishment, processing operations performed in the second establishment on these peels, shells and cores will not be considered first processing operations on "fresh fruits or vegetables" and will not be exempt under section. 7(c). (See subparagraph (2) of this paragraph.) Such byproduct operations, which are performed at a place of employment other than the one where the "first processing" of the fresh fruit or vegetable takes place, are not considered within the scope of the exemption. For example, where peas are shelled (vined) or green beans are trimmed and cut into pieces in one establishment, and the raw peas or beans sent to another establishment for freezing, the exemption can apply to the freezing operations in the second establishment as well as to the operations in the first establishment. (c) Nonperishable commodities. The principles stated in subparagraphs (1) and (2) of paragraph (b) will apply, with appropriate adaptation, to the first processing of other agricultural or horticultural commodities referred to in section. 7(c), regardless of whether they are perishable. This means that the "first processing" of such a commodity will include operations on either a main or a branch processing line, with respect to either a primary product or a by-product (up to the end point for exempt first processing of such commodity), provided such operations are part of a continuous series of operations starting with the initial processing operation on the named commodity and are all performed in the same place of employment. (d) Earlier interpretations superseded. To the extent that prior general or specific interpretations contained in Interpretative Bulletin No. 14, in releases, in opinion letters, or in other statements issued with respect to the meaning and application of "first processing" under section 7(c) of the Fair Labor Standards Act of 1938, as amended, are inconsistent with the principles above stated, they are rescinded and withdrawn. Section 780.952 Shelling corn. (a) The shelling of corn constitutes "preparing in their raw or natural state" within the meaning of section 13 (a) (10) and not "first processing" within the meaning of section 7 (c). (b) Shelled corn is an agricultural commodity for the purpose of section 13 (a) (10) and section 7(c), no matter where it is shelled. (c) The "corn" referred to in this section is corn such as is used for feed, seed, or industrial uses, the kernels of which are in the hard or dry state, as distinguished from corn harvested as a perishable fresh vegetable while the kernels are soft, to be prepared for human consumption as "corn on the cob" or as canned or frozen corn. (d) All prior interpretations concerning the shelling of corn under the Fair Labor Standards Act of 1938, as amended, contained in Interpretative Bulletin No. 14, dated December 1940, and in any other releases, statements, rulings or opinion letters issued by the Department of Labor are, to the extent that they are inconsistent or in conflict with paragraphs (a), (b), and (c) of this section, hereby rescinded and withdrawn. Section 780.953 Compressing of cotton under section 7(c). (a) Introductory statement. Section 7(c) of the Fair Labor Standards Act provides an exemption from the overtime requirements during 52 weeks a year for employees in any place of employment where their employer is engaged in certain named operations, including the compressing of cotton. This exemption applies to two groups of employees: (1) Those who are actually engaged in the named operations, and (2) those whose occupations are a necessary incident to the named operations, and who work in those portions of the premises devoted by their employer to these operations. b) Compressing of cotton. The term "compressing of cotton" includes all the operations which are directly connected with pressing gin bales of cotton into standard density or high density bales, or pressing standard density bales into high density bales, as a part of a single process. Included within the term are the receiving and weighing of bales arriving for compression only or for compression prior to storage; moving the bales to be compressed from receiving areas to the press, or from storage to the press; operating the press or the dinky press, including removing bands, feeding, tieing, sewing, and hoisting; and moving the bales from the press to transportation media or to storage after compressing. (c) Operations incidental to compressing. (1) Included within the exemption are operations which are a necessary incident to the compressing, when performed in weeks when the employer is engaged in compressing and by employees who work in those portions of the premises devoted to compressing. Activities performed in connection with ordinary warehouse storage of cotton are not considered incidental to compressing. On the other hand, "transit" storage or similar temporary storage of cotton awaiting compressing, or awaiting loading out after compressing, is incidental to compressing and within the exemption. "Transit" or similar short-period temporary storage is usually provided free or at reduced cost in connection with receiving, compressing, and assembling cotton for shipment. Such storage is within the exemption only if it takes place in that portion of the warehouse devoted to compressing or in some clearly segregable portion of the warehouse designated or reserved for temporary storage. (2) Over-the-road transportation of incoming bales for temporary or "transit" storage pending compressing or for compressing prior to storage, and transporting outgoing bales which were loaded immediately after compressing or were loaded from temporary or "transit" storage after compressing are within the exemption as a necessary incident to the compressing. Since the exemption is applicable only to employees of an employer who is engaged in compressing, employees of independent truckers are not exempt under this provision of the Act. However, the fact that some of the transportation duties of an employee are necessarily performed away from the portions of the premises devoted by his employer to compressing will not defeat the exemption. (3) Such operations as preparing and handling bagging and ties for use in the employer's compressing operations, tending the boiler used to operate the press, marking or recording bales compressed, and maintenance of the compressing equipment are also considered to be within the exemption. (d) Nonexempt operations. Activities performed in connection with ordinary warehouse storage (as opposed to temporary or "transit" storage, defined in paragraph (c) of this section) are not exempt under this section of the Act. Thus, receiving, weighing, and moving cotton received for ordinary storage, and office, watching, and other work done in connection with ordinary storage, are nonexempt. Also not exempt are activities performed in connection with the storage or handling of bales which pass through the establishment without being compressed, and such activities as handling bagging, ties, or fertilizer sold by the employer. (e) All prior interpretations concerning the compressing of cotton under section 7(c) of the Fair Labor Standards Act of 1938, contained in interpretative bulletins, releases, statements, rulings, or opinion letters issued by the Department of Labor are, to the extent that they are inconsistent or in conflict with these interpretations, hereby rescinded and withdrawn. [23 F.R. 8119, Oct. 22, 1958; 23 F.R. 8544, Nov. 1, 1958] November 1961 Issue U.S. GOVERNMENT PRINTING OFFICE: 1963 O-691-586 |