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75 percent or more of the establishment's annual cedure involving the issuance by the buyer of dollar volume of sales of goods or services (or a formal invitation to bid on certain merchanof both) is not for resale and is recognized as dise for delivery in accordance with prescribed retail sales or services in the industry.
terms and specifications. Sales to the Federal, Section 779.397-SALES OF AUTOMO
State, and local governments are typically
made in this manner. BILES, TRUCKS, AND FARM IMPLEMENTS WHICH ARE RECOGNIZED
(3) Fleet sales: (As used in this subpara
graph a "fleet account” is a customer operating AS RETAIL
five or more automobiles or trucks for business (a) General. The principles that were ap purposes). plicable to the classification, as retail or non (i) Automobiles and trucks. Sales of autoretail, of sales made by automobile, truck or mobiles and trucks to national fleet accounts as farm implement dealers, for purposes of apply designated by the various automotive manuing the section 13(a) (2) exemption prior to the facturers, at fleet discounts, and sales to other 1961 amendments, will continue to govern the fleet accounts at discounts equivalent to those classification of such sales made by dealers for provided in sales to national fleet owners. purposes of applying the section 13(a) (19)
(ii) Automotive parts and accessories. Sales exemption in determining whether the estab
of parts and accessories to fleet accounts at lishment is a "retail or service establishment." wholesale prices. Wholesale prices are prices (b) Automobile and truck sales. All sales
equivalent to, or less than, those typically of automobiles, truck, automobile parts, acces charged on sales for resale. sories, servicing and repair work will be con (4) Sales of specialized heavy motor vehicles sidered as retail except the following:
or bodies (16,000 lbs. and over gross vehicles (1) Sales for resale: For example, sales of weight) : The following is a complete list of automobiles, tires, accessories or services, to these items: service stations, repair shops and automobile (i) Single unit trucks: dealers, where these establishments resell the
Armored (money carrying). various items or where they use them in repair Buses (integral). ing customers' vehicles or in reconditioning used Coal. cars for resale, are sales for resale. IIowever, Drilling.
Dump. this does not apply to transfers of such items
Hook and ladder (fire department). bet ween departments within the dealer's estab
Chemical wagons (fire department). lishment. Thus, transfers of parts from the
Garbage. parts department to the service department of Mixer. an automobile dealer's establishment will not Refrigerator. be considered sales for resale. Such transfers Special public utility.
Street-cleaning. from one department to another will be disre
Tank. garded in computing the establishment's sales
Wrecker. for determining the applicability of this ex
(ii) Full trailers and semitrailers (tractor emption. So also accommodation transfers of
and semitrailer and truck and trailer combiautomobiles between dealers will be disregarded
nations): in computing the establishment's sales for pur
Auto carrier. poses of this exemption. Accommodation trans
Coal. fers refer to occasional exchanges or transfers
Dump. of automobiles between dealers and not to situ
Garbage. ations where a dealer supplies cars to other House carrier.
Low bed carry all. dealers as part of what may be described as a
Pole (lumber). distribution system.
Refrigerator. (2) Sales made pursuant to a formal invi
Tank. tation to bid: Such sales are made under a pro Van.
(5) Sales of servicing and repair work performed under a fleet maintenance arrangement on trucks and other automotive vehicles whereby the establishment undertakes to maintain a customer's fleet at a price below the prevailing retail prices.
(c) Farm implement sales. All sales of farm machinery, such as equipment necessary for plowing, planting, thinning, weeding, fertilizing, irrigating, and harvesting of crops, and raising of livestock on the farm, and the repair work thereon, will be considered as retail (whether sold to farmers or non farmers) except the following:
(1) Sales for resale: For example, sales of machinery, parts, accessories or services to service stations, repair shops and other dealers, where these establishments resell these items or where they use them in repairing customers' farm implements, 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 a farm implement 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 farm implements 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 farm implements between dealers and not to situations where a dealer supplies farm implements to other dealers as part of what may be described as a distribution system.
(2) Sales made pursuant to formal invitation to bid. Such sales are made under a procedure involving the issuance by the buyer of a formal invitation to bid certain merchandise for delivery in accordance with prescribed terms and specifications. Sales to Federal, State and local governments are typically made in this manner.
(3) Sales of specialized equipment not ordinarily used by farmers, such as:
(4) Sales of junk.
(5) Sales of machinery or equipment which are sold "installed", where the installation involves construction work. Installations which require extensive planning, labor and use of specialized equipment ordinarily constitute construction work. In such cases the cost of installation ordinarily is substantial in relation to the cost of the goods installed.
(d) It should be noted that the concept of fleet sales discussed in paragraph (b) of this section does not apply to sales to farmers, even though the farmer uses five or more vehicles on his farm. Further, any receipts derived from warehousing, water well drilling or manufacturing activities performed by the dealer are not receipts from retail sales. These activities and the manufacturing of farm implements are not retail activities.
Section 779.398—“PRIMARILY ENGAGED"
This exemption, by its term, applies only to those establishments which are primarily engaged in the business of selling automobiles, trucks, or farm implements. Establishments such as auto rental establishments, garages, lepair shops, which are not “primarily” engaged in such business, but which may sell some automobiles, trucks or farm implements only as an incident to their principal activities, are not within this exemption. Whether an establishment is “primarily” engaged in the business of selling automobiles, trucks, or farm implements depends on all the facts. For administrative purposes an establishment will be regarded as primarily engaged in such business if more than 50 percent of the establishment's annual dollar volume of sales is derived from the sales of automobiles, trucks or farm implements.
Subpart E--PROVISIONS RELATING TO CERTAIN EMPLOYEES OF RETAIL OR SERVICE ESTABLISHMENTS
Section 779.403__"EXECUTIVE” AND “AD. MINISTRATIVE” EMPLOYEES, DEFINED
Section 779.400-PURPOSE OF SUBPART
The 1961 amendments to the Act changed certain existing provisions and added other provisions pertaining to exemptions from the requirements of sections 6 and 7 with respect to certain employees. This subpart deals with those exemptions provisions of interest to retail or service enterprises or establishments. Section 779.401-PRE-1961 EXEMPTION
FOR EMPLOYEE "EMPLOYED IN A BONA FIDE LOCAL RETAILING CAPACITY" ELIMINATED
In order to make effective the extension of protection under the Act to sales personnel of the retail or service establishments who are covered by virtue of section 3(s) (1), the exemption in section 13(a) (1) for employees employed in a “local retailing capacity” was eliminated by the 1961 amendments to the Act. (See S. Rept. 145, 87th Cong., 1st Sess. p. 29; H. Rept. 75, 87th Cong., 1st Sess. p. 11.)
The terms “executive” and “administrative” as used in section 13(a) (1) have appeared therein prior to the 1961 amendments and have been defined and delimited in Subpart A of Part 511 of this chapter and explained in Subpart B of that part. These regulations are applicable under the amended section 13(a) (1) in determining which employees are bona fide executive or administrative employees. The amended provision does, however, liberalize, in one respect, the pre-1961 regulations as they pertain to executive and administrative employees of retail or service establishments. That is, an executive or administrative employee of a retail or service establishment may devote up to 40 percent of his hours worked in a workweek to activities which are not directly and closely related to the performance of executive or administrative activities and still qualify as a bona fide executive or administrative employee, whereas, in any other type of establishment such a tolerance is limited to 20 percent, except where special provisions are made in Part 541 of this chapter [29 F.R. 19103, Dec. 30, 1964)
AND PROFESSIONAL EMPLOY
EES AND OUTSIDE SALESMEN Section 779.402-STATUTORY PROVISION
Section 13(a)(1) of the Act provides that the provisions of sections 6 and 7 shall not apply with respect to: Any employee employed in a bona fide executive, administrative, or professional capacity, or in a capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary, subject to the provisions of the Administrative Procedure Act, except that an employee of a retail or service establishment shall not be excluded from the definition of employee employed in a bona fide executive or administrative capacity because of the number of hours in his workweek which he devotes to activities not directly or closely related to the performance of executive or administrative activities, if less than 40 per centum of his hours worked in the workweek are devoted to such activities).
Section 779.404-ADMINISTRATIVE AND
EXECUTIVE EMPLOYEES IN 3(s) (1) OR 3(s)(5) ENTERPRISES EMPLOYED IN OTHER THAN RETAIL OR SERVICE ESTABLISHMENTS
The 40 percent tolerance for non-executive or non-administrative duties discussed in the preceding section, does not apply to executive or administrative employees of an establishment other than a "retail or service establishment". For example, an executive or administrative employee of a central office or a central warehouse of a chain store system is not an employee of a “retail or service establishment," and therefore must still devote not more than 20 percent of his hours worked in a workweek to activities which are not directly and closely related to the performance of executive or administrative duties in order to qualify as a
bona fide executive or administrative employee under section 13(a) (1), except where special provisions are made in the regulations issued under that section of the Act. Section 779.405--OTHER SECTION 13(a)
(1) EMPLOYEES EMPLOYED IN COVERED ENTERPRISES
The “professional” employee or the "outside salesman" employed by a retail or service establishment in a covered 3(s) (1) or 3(s) (5) enterprise in order to qualify as a bona fide “professional employee” or an "outside salesman" must meet all the requirements set forth in the regulations issued and found in Part 541, Subpart A of this chapter, and further explained in Subpart B thereof. The 40 percent tolerance discussed in section 779.404 for "administrative and executive employees” of a retail or service establishment does not apply to the “professional employee” or the "outside salesman."
(a) Applicable regulations. In accordance with section 14 of the Act regulations have been issued to provide for employment under special certificates of student-learners at wages lower than the minimum wage applicable under section 6 of the Act. These regulations are set forth in Part 520 of this chapter and govern the issuance of special certificates for student-learners in covered employments generally as well as such employments in retail or service establishments.
(b) Definitions. The regulation in section 520.2 of this chapter define “student-learners" and "bona fide vocational training program" as follows:
(1) A "student-learner" is defined as "a student who is receiving instruction in an accredited school, college or university and who is employed on a part-time basis, pursuant to a bona fide vocational training program.”
(2) A "bona fide vocational training program” is defined as “one authorized and approved by a State board of vocational education or other recognized educational body and provides for part-time employment training which may be scheduled for a part of the work day or workweek, for alternating weeks or for other limited periods during the year, supplemented by and integrated with a definitely organized plan of instruction designed to teach technical knowledge and related industrial information given as a regular part of the student-learner's course by an accredited school, college or university.”
STUDENT-LEARNERS AND HANDICAPPED WORKERS
PROVISIONS Section 13(a)(7) of the Act provides that the provisions of sections 6 and 7 shall not apply to: Any employee to the extent that such employee is exempted by regulations or orders of the Secretary issued under section 14.
Section 14 of the Act provides that:
The Secretary of Labor, to the extent necessary in order to prevent curtailment of opportunities for employment, shall by regulations or by orders provide for (1) the employment of learners, of apprentices, of messengers employed primarily in delivering letters and messages, and of full-time students outside of their school hours in any retail or service establishment: Provided, That such employment is not of the type ordinarily given to a full-time employee, under special certificates issued pursuant to regulations of the Secretary, at such wages lower than the minimum wage applicable under section 6 and subject to such limitations as to time, number, proportion, and length of service as the Secretary shall prescribe, and (2) the employment of individuals whose earning capacity is impaired by age or physical or mental deficiency or injury, under special certificates issued by the Secretary, at such wages lower than the minimum wage applicable under section 6 and for such period as shall be fixed in such certificates.
Section 779.408-LEARNERS OTHER
Regulations have been issued in accordance with the authority in section 14 of the Act to provide for employment under special certificates of learners at wages lower than the minimum wage applicable under section 6 of the Act. Regulations for learners in the retail industry will be issued and promulgated in the FEDERAL REGISTER. General learner regulations are set forth in sections 522.1 to 522.11, of this chapter.
regular rate of pay of such employee is in excess of one and one-half times the minimum hourly rate applicable to him under section 6, and (2) more than half his compensation for a representative period (not less than one month) represents commissions on goods or services. There are briefly set forth in $$ 779.412 to 779.431 some guiding principles for determining whether an employee's employment and compensation meet the conditions set forth in section 7(h).
Section 779.409_"FULL-TIME STUDENTS"
The 1961 Amendments added to section 14 of the Act, the authority to issue special certificates for the employment of “full-time students”, under certain specified conditions, at wages lower than the minimum wage applicable under section 6. The student, to qualify for a special certificate must attend school full time and his employment must be outside of his school hours and his employment must be in a retail or service establishment. In addition, the student's employment must not be of the type ordinarily given to a full-time employee. Regulations with respect to the employment of such students will be issued and promulgated in the Federal Register. The legislative history states that: “The purpose of this provision is to provide employment opportunities for students who desire to work part time outside of their school hours without displacement of adult workers.” (S. Rept. 145, 87th Cong., 1st Sess.,
Section 779.412--EMPLOYEE OF A “RETAIL OR SERVICE ESTABLISHMENT”
In order for an employee to come within the exemption from the overtime pay requirement provided by section 7(h) for certain employees receiving commissions, the employee must be employed by a retail or service establishment. The term "retail or service establishment" is defined in section 13(a) (2) of the Act. The definition is set forth in $ 779.24; its application is considered at length in Subpart D of this part. As used in section 7(h), as in other provisions of the Act, the term "retail or service establishment" means an establishment 75 percentum 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.
Regulations have been issued under the authority in section 14 of the Act to provide for employment under special certificate of handicapped workers at wages lower than the minimum wage applicable under section 6 of the Act. These regulations are set forth in Part 524 of this chapter. In these regulations handicapped workers are defined as individuals whose earning capacity is impaired by age or physical or mental deficiency or injury for the work they are to perform.
Section 779.413—COMPENSATION REQUIREMENTS FOR OVERTIME PAY EXEMPTION UNDER SECTION 7(h)
EMPLOYEES COMPENSATED PRINCIPALLY BY COMMISSIONS
SOURCE: Sections 779.411 to 779.431 appear at 28 F.R. 7826, Aug. 1, 1963.
An employee of a "retail or service establishment” who is paid on a commission basis or whose pay includes compensation representing commissions need not be paid the premium compensation prescribed by section 7(a) for overtime hours worked in a workweek, provided the following conditions are met:
(a) The “regular rate” of pay of such employee must be more than one and one-half times the minimum hourly rate applicable to him under section 6: and
(b) More than half his compensation for a “representative period” (not less than one month) must represent commissions on goods or services.
Section 779.411_STATUTORY PROVISION
Section 7 of the Act provides, in subsection (h):
(h) No employer shall be deemed to have violated subsection (a) by employing any employee of a retail or service establishment for a workweek in excess of the applicable workweek specified therein, if (1) the