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work". It should be noted, as explained in the interpretative bulletin on joint employment, 29 CFR Part 791, 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 779.20-PERSON

As used in the Act (including the definition of "enterprise" set forth in section 779.21), "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 779.21-ENTERPRISE

It is provided in section 3 (r) of the Act that "enterprise" as used in the Act, "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: Provided, That, within the meaning of this subsection, a retail or service establishment which is under independent ownership shall not be deemed to be so operated or controlled as to be other than a separate and distinct enterprise by reason of any arrangement, which includes, but is not necessarily limited to, an agreement, (a) that it will sell, or sell only, certain goods specified by a particular manufacturer, distributor, or advertiser, or (b) that it will join with other such establishments in the same industry for the purpose

of

collective purchasing, or (c) that it will have the exclusive right to sell the goods or use the brand name of a manufacturer, distributor, or advertiser within a specified area, or by reason of the fact that it occupies premises leased to it by a person who also leases premises to other retail or service establishments." The scope and application of this definition is discussed in Subpart C of this part.

Section 779.22-ENTERPRISE ENGAGED IN COMMERCE OR IN THE PRODUCTION OF GOODS FOR COMMERCE The portions of the definition of "enterprise engaged in commerce or in the production of goods for commerce" (Act, section 3 (s)) which are important to a determination of the application of provisions of the Act to employees employed by retailers 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:

(1) any such enterprise which has one or more retail or service establishments if the annual gross volume of sales of such enterprise is not less than $1,000,000, exclusive of excise taxes at the retail level which are separately stated and if such enterprise purchases or receives goods for resale that move or have moved across State lines (not in deliveries from the reselling establishment) which amount in total annual volume to $250,000 or more;

(5) any gasoline service establishment if the annual gross volume of sales of such establishment is not less than $250,000, exclusive of excise taxes at the retail level which are separately stated:

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 fully considered in Subpart C of this part.

Section 779.23-ESTABLISHMENT

As used in the Act, the term "establishment", which is not specially defined therein, refers to a "distinct physical place 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. 1453, 81st Cong., 1st Sess., p. 25). As appears more fully elsewhere in this part, this is the meaning of the term as used in sections 3(r), 3(s), 6(b), 7(h), 13(a), and 14 of the Act.

Section 779.24—RETAIL OR SERVICE
ESTABLISHMENT

In the 1949 amendments to the Act, the term "retail or service establishment", which was not previously defined in the law, was given a spe

cial definition for purposes of the Act. The legislative history of the 1961 amendments to the Act, which use the same term in a number of the new provisions relating to coverage and exemptions, indicates that no different meaning was intended by the term "retail or service establishment" as used in the new provisions from that already established by the Act's definition. On the contrary, the existing definition was re-enacted in section 13 (a) (2) of the Act as amended, as follows: "A 'retail or service establishment' shall mean an establishment 75 per centum of whose annual dollar volume of sales of goods or services (or of both) is not for resale and is recognized as retail sales or services in the particular industry". The application of this definition, which has had much judicial construction since its original enactment, is considered at length in Subpart D of this part. As is apparent from the quoted language, not every establishment which engages in retail selling of goods or services will constitute a "retail or service establishment" within the meaning of the Act.

Subpart B-EMPLOYMENTS TO WHICH THE ACT MAY APPLY; BASIC PRINCIPLES AND INDIVIDUAL COVERAGE

GENERAL PRINCIPLES

Section 779.100-BASIC COVERAGE IN

GENERAL

Except as otherwise provided in specific exemptions, the minimum wage, overtime and child labor provisions of the Act have applied since 1938, and continue to apply, to employees who individually are engaged in interstate or foreign commerce or in the production of goods for such commerce as these terms are defined in the Act. Beginning September 3, 1961, these provisions will extend to additional employees because of their employment in certain enterprises. These enterprises are described in section 3(s) as enterprises engaged in commerce or in the production of goods for commerce and further described in section 3(s) (1) through (5). A detailed discussion of the coverage of employees in those enterprises of interest to the retail industry is contained in Subpart C

of this part. The employer must comply with the minimum wage and overtime requirements of the Act with respect to all employees who are covered either because they are individually engaged in interstate or foreign commerce or in the production of goods for such commerce, or because of their employment in an "enterprise engaged in commerce or in the production of goods for commerce" as described in section 3(s) of the Act, except those who may be denied one or both of these benefits by virtue of some specific exemption provision of the Act. Of special interest to the retailer in a covered enterprise is the exemption from the minimum wage and overtime provisions for certain small retail or service establishments of such enterprise. This exemption is applicable under the conditions stated in section 13(a)(2) of the Act to any retail or service establishment which has an annual dollar volume of sales of less than $250,000 (exclusive of certain excise taxes) even

if the establishment is a part of an enterprise
that is covered by the Act. This exemption and
other exemptions of particular interest to re-
tailers and their employees are discussed in
Subparts D and E of this part. The child labor
provisions as they apply to retail or service
businesses is discussed in Subpart F of this part.
Section 779.101-GUIDING PRINCIPLES
FOR APPLYING COVERAGE AND

EXEMPTION PROVISIONS

It is clear that Congress intended the Fair
Labor Standards Act to be broad in its scope.
"Breadth of coverage is vital to its mission."
(Powell v. U.S. Cartridge Co., 339 U.S. 497.)
An employer who claims an exemption under
the Act has the burden of showing that it ap-
plies (Walling v. General Industries Co., 330
U.S. 545; Mitchell v. Kentucky Finance Co.,
359 U.S. 290; Fleming v. Hawkeye Pearl Button
Co., 113 F. 2d 52.) Conditions specified in the
language of the Act are "explicit prerequisites
to exemption". (Arnold v. Kanowsky, 361 U.S.
388.) "The details with which the exemptions
in this Act have been made preclude their en-
largement by implication." (Addison v. Holly
Hill, 322 U.S. 607; Maneja v. Waialua, 349 U.S.
254.) Exemptions provided in the Act "are to
be narrowly construed against the employer
seeking to assert them" and their application
limited to those who come plainly and unmis-
takably within their terms and spirit; this
restricted or narrow construction of the exemp-
tions is necessary to carry out the broad objec-
tives for which the Act was passed. (Phillips
v. Walling, 324 U.S. 490; Mitchell v. Kentucky
Finance Co., supra.; Arnold v. Kanowsky,
supra; Calaf v. Gonzalez, 127 F. 2d 934; Bowie
v. Gonzalez, 117 F. 2d 11; Mitchell v. Stinson,
217 F. 2d 210; Fleming v. Hawkeye Pearl
Button Co., 113 F. 2d 52.)

Section 779.102-SCOPE OF THIS
SUBPART

The Act has applied since 1938 and continues to apply to all employees, not specifically exempted, who are engaged (a) in interstate or foreign commerce or (b) in the production of goods for such commerce, which is defined to include any closely related process or occupa

or

tion directly essential to such production. (See sections 779.12-779.16 for definitions governing the scope of this coverage.) Prior to the 1961 amendments a retailer was not generally concerned with the coverage provisions as they applied to his individual employees because retail service establishments ordinarily were exempt. However, in some cases such coverage was applicable as where employees were employed in central offices or warehouses of retail chain store systems and, therefore, were not exempt. (See section 779.118.) As a result of the 1961 amendments the exemptions for retail or service establishments have been narrowed and a discussion of these coverage provisions of the Act becomes pertinent. This subpart, therefore, will discuss briefly the principles of coverage of such employees with particular reference to employment in the retail or service trades. A more comprehensive discussion with respect to employees engaged in commerce or in the production of goods for commerce may be found in Part 776 of this chapter, the general coverage bulletin.

EMPLOYEES

ENGAGED IN
COMMERCE OR IN THE PRO-
DUCTION OF GOODS FOR COM-
MERCE

Section 779.103-EMPLOYEES “ENGAGED
IN COMMERCE"

Employees are "engaged in commerce" within
the meaning of the Act when they are perform-
ing work involving or related to the movement
of persons or things (whether tangibles or in-
tangibles, and including information and in-
telligence) among the several States or between
any State and any place outside thereof. (The
statutory definition of commerce is contained in
section 3(b) of the Act and is set forth in sec-
tion 779.12.) The courts have made it clear that
this includes every employee employed in the
channels of such commerce or in activities so
closely related to this commerce, as to be con-
sidered a part of it as a practical matter.
(Court cases are cited in the discussion of this
term in sections 776.9-776.13 of this chapter.)
Typically, but not exclusively, employees en-
gaged in interstate or foreign commerce, in-

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clude employees in distributing industries, such as wholesaling or retailing, who sell, handle or otherwise work on goods moving in interstate commerce as well as workers who order, receive, pack, ship, or keep records of such goods; clerical and other workers who regularly use the mails, telephone or telegraph for interstate communication; and employees who regularly travel across State lines while working.

Section 779.104-EMPLOYEES "ENGAGED IN THE PRODUCTION OF GOODS FOR COMMERCE"

The activities constituting "production" within the meaning of the phrase "engaged in *** the production of goods for commerce" are defined in section 3(j) of the Act. (The statutory definition is set forth in section 779.13.) The handling or otherwise working on goods intended for shipment out of the State, directly or indirectly, is engagement in the "production" of goods for commerce. Thus, employees in retail stores who sell, pack, or otherwise work on goods which are to be shipped or delivered outside of the State are engaged in the production of goods for commerce. Typically, but not exclusively, employees engaged in the production of goods for interstate or foreign commerce, include those who work in manufacturing, processing and distributing establishments, including wholesale or retail establishments, that produce goods for interstate or foreign commerce. This includes everyone, including office, management, sales and shipping personnel, and maintenance, custodial and protective employees, whether they are employed by the producer or an intermediary. Employees may be covered even if their employer does not ship his goods directly in such commerce. The goods may leave the State through another firm. The workers may produce goods which become a part or ingredient of goods shipped in interstate or foreign commerce by another firm. Also covered are workers who are engaged in a closely related process or occupation directly essential to such production. (See section 779.105.)

Section 779.105-EMPLOYEES ENGAGED IN ACTIVITIES "CLOSELY RELATED" AND "DIRECTLY ESSENTIAL" TO THE PRODUCTION OF GOODS FOR COMMERCE

Some employees are covered because their work, although not actually a part of such production, is "closely related" and "directly essential" to it. This group of employees includes bookkeepers, stenographers, clerks, accountants and auditors and other office and white collar workers, and employees doing payroll, timekeeping and time study work for the producer of goods; employees in the personnel, labor relations, advertising, promotion, and public relations activities of the producing enterprise; work instructors for the producer; employees maintaining, servicing, repairing or improving the buildings, machinery, equipment, vehicles or other facilities used in the production of goods for commerce, and such. custodial and protective employees as watchmen, guards, firemen, patrolmen, caretakers, stockroom workers, and warehousemen; and transportation workers bringing supplies, materials, or equipment to the producer's premises, removing waste materials therefrom, or transporting materials or other goods, or performing such other transportation activities, as the needs of production may require. These examples are illustrative, rather than exhaustive, of the group of employees of a producer who are "engaged in the production of goods for commerce" by reason of performing activities closely related and directly essential to such production.

Section 779.106-EMPLOYEES EMPLOYED BY AN INDEPENDENT EMPLOYER

Where the work of an employee would be closely related and directly essential to the production of goods for commerce if he were employed by a producer of the goods, the mere fact that the employee is employed by an independent employer will not justify a different answer. (See sections 776.17 (c) and 776.19 of this chapter.)

635882-62-3

Section 779.107-GOODS DEFINED

The term "goods" is defined in section 3 (i)
of the Act and has a well established meaning
under the Act since it has been contained in the
statute from the date of its enactment in 1938.
A comprehensive statement of the meaning of
the term "goods" is contained in section 776.20
of this chapter, which also cites the court cases
in which the term was construed. The statu-
tory definition of "goods" is set forth in section
779.14. It will be observed that the term
"goods" includes any part or ingredient of the
goods. Also that "goods" as defined in the Act
are not limited to commercial goods, or articles
of trade, or, indeed, to tangible property, but
include "articles or subjects of commerce of any
character." Thus telegraphic messages have
been held to be "goods" within the meaning of
the Act (Western Union Tel. Co. v. Lenroot,
323 U.S. 490). Some of the "articles or sub-
jects of commerce" which fall within the defini-
tion of "goods" include written materials such
as newspapers, magazines, brochures, pam-
phlets, bulletins, and announcements; written
reports, fiscal and other statements and accounts,
correspondence, and other documents; advertis-
ing, motion pictures, newspaper and radio copy;
art work and manuscripts for publication; sam-
ple books, letterheads, envelopes, shipping tags,
labels, check books, blank books, book covers,
advertising circulars, and wrappers and other
packaging materials.

Section 779.108 GOODS PRODUCED FOR
COMMERCE

Goods are "produced for commerce" if they
are "produced, manufactured, mined, handled
or in any other manner worked on" in any State
for sale, trade, transportation, transmission,
shipment or delivery, to any place outside there-
of. Goods are produced for commerce where
the producer intends, hopes, expects, or has
reason to believe that the goods or any unsegre-
gated part of them will move (in the same or in
an altered form or as a part or ingredient of
other goods) in interstate or foreign commerce.
If such movement of the goods in commerce can
reasonably be anticipated by the producer when
the goods are produced, it makes no difference
whether he himself or the person to whom the

goods are transferred puts the goods in inter-
state or foreign commerce. The fact that goods
do move in interstate or foreign commerce is
strong evidence that the producer intended,
hoped, expected, or had reason to believe that
they would so move.

Section 779.109-AMOUNT OF ACTIVI-
TIES WHICH CONSTITUTE ENGAG-
ING IN COMMERCE OR IN THE
PRODUCTION OF GOODS FOR COM-
MERCE

The Act makes no distinction as to the percentage, volume, or amount of activities of either the employee or the employer which constitute engaging in commerce or in the production of goods for commerce. However, an employee whose in commerce or production activities are isolated, sporadic, or occasional and involve only insubstantial amounts of goods will not be considered "engaged in commerce or in the production of goods for commerce" by virtue of that fact alone. The law is settled that every employee whose activities in commerce or in the production of goods for commerce, even though small in amount are regular and recurring, is considered "engaged in commerce or in the production of goods for commerce".

Section

779.110-EMPLOYEES IN RETAILING WHOSE ACTIVITIES MAY BRING THEM UNDER THE ACT

The discussion in Sections 779.103-779.109 included general references to types of employees in the retail or service field whose individual activities constitute engagement in interstate or foreign commerce or in the production of goods for such commerce within the meaning of the Act. There are many classes of employees customarily employed by retail or service establishments or in enterprises of the type described in section 3(s) (1) and 3(s) (5) whose individual activities ordinarily constitute engagement in commerce or in the production of goods for commerce within the meaning of the Act. The groups of employees discussed in the following sections 779.111 to 779.118, are illustrative only. There are other employees whose activities may be covered; also there are other activities per

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