Section 779.383-"HOTEL" AND "MOTEL" (a) Definition of "hotel." The term "hotel" as used in section 13 (a) (2) means an establishment known to the public as a hotel, which is primarily engaged in providing lodging or lodging and meals for the general public. Included are hotels operated by membership organizations and open to the general public and apartment hotels which provide accommodations for transients. Establishments in which lodging accommodations are not available to the public are not included. Also excluded from the category of hotels are rooming and boarding houses, private residences commonly known as tourists homes, and apartment or residential hotels which provide no accommodations for transients. Resort or other hotels even if they operate seasonally are regarded as hotels. (b) Definition of "motel." The term "motel" as used in section 13 (a) (2) means an establishment which provides services similar to that of a "hotel" described in paragraph (a) of this section, but which caters mostly to the motoring public, providing it with motor car parking facilities either adjacent to the room or cabin rented or at some other easily accessable place. Included in the term "motel" are those establishments known to the public as motor hotels, motor lodges, motor courts, motor inns, tourist courts, tourist lodges and the like. (c) Hotel and motel establishments engaged in other activities. The primary function of a hotel or motel is to provide lodging facilities to the public. In addition, most hotels or motels provide food for their guests and many sell alcoholic beverages. These establishments also engage in some minor revenue producing activities; such as, the operation of laundries, valet shops, hobby shops, the renting out of their public rooms for meetings, lectures, dances, trade exhibits and weddings. The exception provided for "hotels" and "motels" in section 13(a) (2) will not be defeated simply because a "hotel" or a "motel" engages in all or some of these activities, if it is primarily engaged in providing lodging facilities, food and drink to the public. MOTION PICTURE THEATERS Section 779.384-MAY QUALIFY AS EX- A motion picture theater may qualify as an SEASONAL AMUSEMENT OR RECREATIONAL Section 779.385-MAY QUALIFY AS EX- HOSPITALS AND NURSING HOMES Section 779.386-MAY QUALIFY AS EXEMPT 13(a) (2) ESTABLISHMENTS (a) General. A hospital or an institution primarily engaged in the care of the sick, the aged, the mentally ill or defective residing on the premises may qualify as an exempt retail or service establishment under section 13 (a) (2) of the Act, even if it is in an enterprise described in section 3(s). Thus the 13(a) (2) exemption will be applicable irrespective of the annual dollar volume of sales of such establishment or of the enterprise of which it is a part. The establishment however must meet all other requirements of the 13(a) (2) exemption. These requirements are discussed above in sections 779.336 to 779.340. (b) Hospital defined. The term "hospital" as used in this section of the Act refers to those establishments commonly known as "hospitals" which primarily engage in the offering of medical and surgical services to patients who generally remain at the establishment either overnight, several days or for extended periods. Clinics and dispensaries are not included within the term "hospital" as used in this section unless operated by a hospital in the hospital establish ment. Section 779.387-"INSTITUTIONS PRI MARILY ENGAGED IN THE CARE OF THE SICK, THE AGED, THE MENTALLY ILL, OR THE DEFECTIVE RESIDING ON THE PREMISES" DEFINED "Institutions primarily engaged in the care of the sick, the aged, the mentally ill, or defective, residing on the premises" as used in section 13(a) (2) of the Act means those establishments such as nursing homes, sanitariums, rest homes, and convalescent homes which care for the sick and the aged who reside on the premises of such institutions. SCHOOLS FOR HANDICAPPED OR GIFTED Section 779.388-MAY QUALIFY AS EX- A school for physically or mentally handicapped or gifted children may qualify as an exempt retail or service establishment under section 13(a) (2) of the Act, even if it is in an enterprise described in section 3 (s). Thus, the 13(a) (2) exemption will be applicable irrespective of the annual dollar volume of sales of such establishment or of the enterprise of which it is a part. The establishment however must meet all other requirements of the 13(a) (2) exemption. These requirements are discussed in sections 779.336 to 779.340. "Schools for physically or mentally handicapped or gifted children" as used in section 13(a) (2) include those educational establishments catering to the needs of children who are physically handicapped, mentally handicapped, or gifted, such as talented children with a special faculty in music, art, mathematics or other fields. RESTAURANTS AND ESTABLISHMENTS PROVIDING FOOD AND BEVERAGE SERVICE Section 779.389-RESTAURANTS MAY QUALIFY AS EXEMPT 13(a)(2) ESTABLISHMENTS A restaurant may qualify as an exempt retail or service establishment under section 13 (a) (2) of the Act, even if it is in an enterprise described in section 3(s). Thus the 13(a) (2) exemption will be applicable irrespective of the annual dollar volume of sales of such establishment or of the enterprise of which it is a part. The establishment however must meet all other requirements of the 13(a) (2) exemption. These requirements are discussed in sections 779.336 to 779.340. It should be noted that a separate exemption is provided in section 13 (a) (20) of the Act for certain food service employees not employed in a restaurant which qualifies for exemption under section 13 (a) (2). Sections 13(a) (2) and 13(a) (20) also are intended to continue the exemption from the pay provisions of the Act, available prior to the 1961 amendments, for privately owned and operated restaurants in industrial plants, office buildings, Government installations, hospitals, or colleges, such as were involved in McComb v. Factory Stores, 81 F. Supp. 403 (N.D. Ohio). (S. Rept. 145, 87th Cong., 1st Sess., p. 28; H. Rept. 75, 87th Cong., 1 Sess., p. 10.) Section 779.390-"RESTAURANT" DEFINED The term "restaurant" as used in section 13 (a) (2) of the Act means an establishment which is primarily engaged in selling at retail prepared food and beverages for immediate consumption on the premises. This includes such establishments commonly known as lunch counters, refreshment stands, cafes, cafeterias, coffee shops, diners, dining rooms, lunch rooms, or tea rooms. The term "restaurant" does not include drinking establishments, such as bars or cocktail lounges, whose sales of alcoholic beverages exceed the receipts from sales of prepared foods and non-alcoholic beverages. Certain food or beverage service employees of establishments such as bars and cocktail lounges, however, may be exempt under section 13 (a) (20), a discussion of which follows. Section 779.391-EXEMPTION PROVIDED FOR FOOD OR BEVERAGE SERVICE EMPLOYEES A special exemption is provided in section 13 (a) (20) of the Act for food or beverage service employees of retail or service establishments. This section excludes from the pay provisions in sections 6 and 7 of the Act, "any employee of a retail or service establishment who is employed primarily in connection with the preparation or offering of food or beverages for human consumption, either on the premises, or by such services as catering, banquet, box lunch, or curb or counter service, to the public, to employees, or to members or guests of members of clubs." This is an employee exemption. Section 779.392-REQUIREMENTS FOR 13(a)(20) EXEMPTIONS The 13(a) (20) exemption will apply only if the following two tests are met: (a) The employee must be an employee of a retail or service establishment; and (b) The employee must be employed primarily in connection with the specified food or beverage service activities. If both of the above criteria are met, the employee is exempt from the minimum wage and overtime provisions of the Act. Section 779.393-THE ESTABLISHMENT (a) The establishment by which the employee is employed must be a "retail or service establishment." This term is defined in section 13(a) (2) of the Act and the definition is quoted in section 779.24; the application of the definition is considered at length earlier in this subpart. In accordance with this definition, the establishment will be a "retail or service establishment" for purposes of section 13 (a) (20) if 75 percent or more of the establishment's annual dollar volume of sales of goods or service (or of both) is not for resale and is recognized as retail sales or services in the particular industry. (b) If the establishment comes within this definition it is immaterial that the establishment is in an enterprise or part of an enterprise described in section 3 (s). Thus section 13 (a) (20) will be applicable regardless of the annual dollar volume of sales of the establishment or of the enterprise of which it is a part. It should also be noted that it is not required that the establishment make more than 50 percent of its annual dollar volume of sales within the State in which it is located. The establishment by which the employee is employed, provided it qualifies as a "retail or service establishment," may be a drug store, department store, cocktail lounge, night club, and the like. Also the legislative history indicates that section 13 (a) (20) was intended to continue the exemption from the pay provisions of the Act, available prior to the 1961 Amendments, for the employees engaged in the food service activities described even if performed in retail or service establishments within industrial plants, office buildings, Government installations, and the like. (See section 779.389.) (c) This exemption does not apply to employees of the ordinary bakery or grocery store who handle, prepare or sell food or beverages for human consumption since such food or beverages are not prepared or offered for consumption "on the premises, or by such services as catering, banquet, box lunch, or curb or counter service** *99 Section 779.394-EMPLOYEES EMPLOYED "PRIMARILY IN FOOD OR BEVERAGE SERVICE ACTIVITIES" (a) If the establishment by which the employee is employed is a "retail or service establishment," as explained above, he will be exempt under section 13(a) (20) provided he is employed primarily in connection with the preparation or offering of food or beverages for human consumption either on the premises, or by such services as catering, banquet, box lunch, or curb or counter service, to the public, to employees, or to members or guests of members of clubs. An employee employed in the actual preparation or serving of the food or beverages or in activities closely related and directly essential to the preparation and serving will be regarded as engaged in the described activities. The exemption, therefore, extends not only to employees actually cooking, packaging or serving food or beverages, but also to employees such as cashiers, hostesses, dishwashers, busboys, and clean-up men. Also, where the food or beverages are served away from the establishment, the exemption extends to employees of the retail or service establishment who make ready the serving place, serve the food, clean up, and transport the equipment, food and beverages to and from the serving place. (b) For the exemption to apply, the employee must be engaged "primarily” in performing the described activities. A sales clerk in a drug store, department store or other establishment, who as an incident to his other duties, occasionally prepares or otherwise handles food or beverages for human consumption on the premises will not come within the scope of this exemption. The exemption is intended for employees who devote all or almost all of their time to the described food or beverage service activities. For administrative purposes this exemption will not be defeated for any employee who in any workweek devotes 20 percent or less of his hours of work to activities other than those those specifically described in the exemption. AUTOMOBILE, TRUCK AND FARM IMPLEMENT DEALERS Section 779.395-EXEMPTION IN SECTION 13(a) (19) A specific exemption from the provisions of sections 6 and 7 is provided in section 13(a) (19) of the Act for employees of a retail or service establishment which is primarily engaged in the business of selling automobiles, trucks, or farm implements. This exemption is applicable even if the establishment is in an enterprise described in section 3 (s). Thus it will apply irrespective of the annual dollar volume of sales of the establishment or of the enterprise of which it is a part. It should also be noted that such an establishment does not have to show that 50 percent of its annual sales are made within the State in which it is located, to qualify for the 13(a) (19) exemption. This exemption will apply only if the following two tests are met by the establishment: (a) The establishment must be a retail or service establishment; and (b) The establishment must be primarily engaged in the business of selling automobiles, trucks, or farm implements. If both of the above tests are met by an establishment the exemption will be available for all "employees of" the establishment. An explanation of which employees are considered to be "employees of" the establishment is contained in sections 779.307 to 779.311. Section 779.396-RETAIL OR SERVICE An establishment primarily engaged in selling automobiles, trucks, or farm implements, to qualify for exemption under section 13 (a) (19) must be a "retail or service establishment." This term is defined in section 13(a) (2) of the Act and the definition is quoted in section 779.24 of Subpart A; the application of the definition is considered at length earlier in this subpart. In accordance with this definition, such a dealer's establishment will be a "retail or service establishment" for purposes of section 13(a) (19) if 75 percent or more of the establishment's annual (a) General. The principles that were applicable to the classification, as retail or nonretail, of sales made by automobile, truck or farm implement dealers, for purposes of applying the section 13(a) (2) exemption prior to the 1961 amendments, will continue to govern the classification of such sales made by dealers for purposes of applying the section 13(a) (19) exemption in determining whether the establishment is a "retail or service establishment." (b) Automobile and truck sales. All sales of automobiles, truck, automobile parts, accessories, servicing and repair work will be considered as retail except the following: (1) Sales for resale: For example, sales of automobiles, tires, accessories or services, to service stations, repair shops and automobile dealers, where these establishments resell the various items or where they use them in repairing customers' vehicles or in reconditioning used cars for resale, are sales for resale. However, this does not apply to transfers of such items between departments within the dealer's establishment. Thus, transfers of parts from the parts department to the service department of an automobile dealer's establishment will not be considered sales for resale. Such transfers from one department to another will be disregarded in computing the establishment's sales for determining the applicability of this exemption. So also accommodation transfers of automobiles between dealers will be disregarded in computing the establishment's sales for purposes of this exemption. Accommodation transfers refer to occasional exchanges or transfers of automobiles between dealers and not to situations where a dealer supplies cars to other dealers as part of what may be described as a distribution system. (2) Sales made pursuant to a formal invitation to bid: Such sales are made under a pro cedure involving the issuance by the buyer of a formal invitation to bid on certain merchandise for delivery in accordance with prescribed terms and specifications. Sales to the Federal, State, and local governments are typically made in this manner. (3) Fleet sales: (As used in this subparagraph a "fleet account" is a customer operating five or more automobiles or trucks for business purposes). (i) Automobiles and trucks. Sales of automobiles and trucks to national fleet accounts as designated by the various automotive manufacturers, at fleet discounts, and sales to other fleet accounts at discounts equivalent to those provided in sales to national fleet owners. (ii) Automotive parts and accessories. Sales of parts and accessories to fleet accounts at wholesale prices. Wholesale prices are prices equivalent to, or less than, those typically charged on sales for resale. (4) Sales of specialized heavy motor vehicles or bodies (16,000 lbs. and over gross vehicles weight): The following is a complete list of these items: (i) Single unit trucks: Armored (money carrying). Buses (integral). Coal. Drilling. Dump. Hook and ladder (fire department). Chemical wagons (fire department). Garbage. Mixer. Refrigerator. Special public utility. Street-cleaning. Tank. Wrecker. (ii) Full trailers and semitrailers (tractor and semitrailer and truck and trailer combinations): Auto carrier. Coal. Dump. Garbage. House carrier. Low bed carry all. Pole (lumber). Refrigerator. Tank. Van. |