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a period longer than a year would be needed to represent the seasonal and other fluctuations in commission compensation which are referred to in $$ 779.420 and 779.421. Moreover, the inclusion in the period used under section 7(h) of any past weeks of employment more than one year prior to the beginning of the current quarter year would cause the period to reflect conditions too remote from the present to justify acceptance of the period as truly representative of the employee's earning pattern in his current employment situation. Subject to the above minimum and maximum limitations, and to the principles discussed in $$ 779.420 through 779.423, a period of any length suitable for a full and fair representation of the pertinent compensation characteristics of the employee's present employment will be accepted as a representative period for purposes of section 7(h) when properly designated and supported in the employer's records as required by Part 516 of this chapter (see also $ 779.430).
Section 779.426_APPLICATION OF THE
Section 779.425-LENGTH OF PERIODS
IN SOME TYPICAL SITUATIONS
(a) Subject to the conditions mentioned in § 779.424, in employments where it is typical for the employee's commissions to fluctuate upward or downward in particular weeks, or from season to season, in accordance with the factors referred to in 779.421, the period will be considered representative if it includes a sufficient number of workweeks to reflect such fluctuations throughout their full cycle, and is not longer than is necessary for this purpose.
(b) In employments where there is no appreciable fluctuation, from pay period to pay period or from commission computation period to commission computation period, in the proportion of the employee's compensation which represents commissions, the designation and use of such a pay period or commission computation period as a representative period for such an employee will be proper under section 7(h), when such period is not less than one month and otherwise satisfies the conditions mentioned in $ 779.424.
(c) With respect to employees whose compensation arrangements would meet the condi
As previously indicated, the representative period which must be applied in determining whether an individual employee is exempt from overtime pay pursuant to the provisions of section 7(h) is one which is representative of that particular employee's earning pattern as it relates to the proportionate part of his total compensation which represents commissions. Accordingly, for each employee whose exemption is to be tested in any workweek under clause (2) of section 7(h), an appropriate representative period or a formula for establishing such a period must be chosen and must be designated and substantiated in the employer's records (see $ 516.28 of this chapter). When the facts change so that the designated period or the period established by the designated formula is no longer representative, a new representative period or formula therefor must be adopted which is appropriate and sufficient for the purpose, and designated and substantiated in the employer's records. Although the period selected and designated must be one which is representative with respect to the particular employee for whom exemption is sought, and the appropriateness of the representative period for that employee will always depend on his individual earning pattern, there may be situations in which the factors affecting the proportionate relationship between total compensation and compensation representing commissions will be substantially identical for a group or groups of employees in a particular occupation or department of a retail or service establishment or in the establishment as a whole.
Where this can be demonstrated to be a fact, and is substantiated by pertinent information in the employer's records the same, representative period or formula for establishing such a period may properly be used for each of the similarly situated employees in the group. Whether used for one or more employees, however, there are, as previously indicated, certain time limitations on the use of any fixed period as representative of the compensation characteristics of an employee's employment in later workweeks. These limitations are generally met, however, if a representative period of one specific quarter year or more is not applied to computations under section 7(h) for more than the workweeks in the one following quarter, and if a specific representative period of less than one quarter year but not less than one month is not applied in computations for more workweeks than are included in a following period of the same length.
terly period may be used during the first month of the current quarter; and the quarter-year immediately preceding the current quarter will then be used for all workweeks ending in a quarter-year period which begins one month after the commencement of the current quarter. Thus, a January 1-March 31 representative period may be used for purposes of section 7(h) in a quarterly period beginning May 1 and ending July 31, allowing the month of April for necessary commission computations for the representative period. Once this method of computation is adopted it must be used for each successive period in like manner. The prior period used as representative must, of course, as in other cases, meet all the requirements of a representative period as previously explained.
Section 779.428_DEPENDENCE OF THE SECTION 7(h) OVERTIME PAY EXEMPTION UPON THE LEVEL OF THE EMPLOYEE'S “REGULAR RATE” OF PAY
Section 779.427—GRACE PERIOD FOR COMPUTING PORTION OF COMPENSATION REPRESENTING COMMISSIONS
Where it is not practicably possible for the employer to compute the commission earnings of the employee for all workweeks ending in a prior representative period in time to determine the overtime pay obligations, if any, for the workweek or workweeks immediately following, one month of grace may be used by the retail or service establishment. This month of grace will not change the length of the current period in which the prior period is used as representative. It will merely allow an interval of one month between the end of the prior period and the beginning of the current period in order to permit necessary computations for the prior period to be made. For example, assume that the representative period used is the quarter-year immediately preceding the current quarter, and commissions for the prior period cannot be computed in time to determine the overtime pay obligations for the workweeks included in the first pay period in the current quarter. By applying a month of grace, the next earlier quar
If more than half of the compensation of an employee of a retail or service est ablishment for a representative period as previously explained represents commissions on goods or services, one additional condition must be met in order for the employee to be exempt under section 7(h) from the overtime pay requirement of section 7(a) of the Act in a workweek when his hours of work exceed the maximum number specified in section 7(a). This additional condition is that his "regular rate” of pay for such workweek must be more than one and one-half times the minimum hourly rate applicable to him under the minimum wage provisions of section 6 of the Act. If it is not more than one and one-half times such minimum rate, there is no overtime pay exemption for the employee in that particular workweek.
Section 779.429-COMPUTING THE “REGULAR RATE” OF PAY FOR PURPOSES OF SECTION 7(h)
The meaning of the "regular rate” of pay under the Act is well established. As explained by the Supreme Court of the United
employee's compensation attributable to such hours. The hourly rate thus obtained must be compared with the applicable minimum rate of pay of the particular employee under the provisions of section 6 of the Act. If the latter rate is $1.00 an hour, for example, then the employee's regular rate must be more than $1.50 an hour if the exemption is to apply.
States, it is "the hourly rate actually paid the employee for the normal, nonovertime workweek for which he is employed" and "by its very nature must reflect all payments which the parties have agreed shall be received regularly during the workweek, exclusive of overtime payments." (Walling v. YoungermanReynolds Hardwood Co., :25 U.S. 119.) It is a rate per hour, computed for the particular workweek by a mathematical computation in which hours worked are divided into straighttime earnings for such hours to obtain the statutory regular rate (Overnight Motor Co. v. Missel, 316 U.S. 572). By definition (Act, section 7(d)), the "regular rate" as used in section 7 of the Act (of which section 7(11) was made a part by the 1961 amendments) includes "all remuneration paid to, or on behalf of, the employee” except payments expressly excluded by the seven numbered clauses of section 7(d). The computation of the regular rate for purposes of the Act is explained in Part 778 of this chapter. The “regular rate" is not synonymous with the "basic rate" which may be established by agreement or understanding of the parties to the employment agreement under the provisions of section 7(f) (3) of the Act; that section, like section 7(h), merely provides an exemption from the general requirement of overtime compensation based on the regular rate contained in section 7(a), if certain prescribed conditions are met (in section 7(f) (3) these include payment of overtime compensation on a basic rate established and authorized in accordance with its terms). The requirement of section 7 (h) with respect to the "regular rate” of pay of an employee who may come within the exemption which it provides is a simple one: “the regular rate of pay of such employee,” when employed “for a workweek in excess of the applicable workweek specified” in section 7(a), must be "in excess of one and one-half times the minimum hourly rate applicable to him under section 6.” The employee's "regular rate” of pay must be computed, in accordance with the principles discussed above, on the basis of his hours of work in that particular workweek and the
The records which must be kept with respect to employees for whom the overtime pay exemption under section 7(li) is taken are specified in $ 516.28 of this chapter. As previously indicated, these include a designation of the “representative period" chosen, or of a formula used to establish such period, together with the information necessary to substantiate the character of such a period as a "representative" one for the statutory purpose. Other information pertinent to the application of the exemption must also be kept in the records, including the "regular rate" of pay of the employee in each Workweek.
Section 779.431-BASIC RATE FOR COMPUTING OVERTIME COMPENSATION OF NON-EXEMPT EMPLOYEES RECEIVING COMMISSIONS
The overtime compensation due employees of a retail or service establishment who do not meet the exemption requirements of section 7(h) may be computed under the provisions of section 7 (f) (3) of the Act if the employer and employee agree to do so under the conditions there provided. Section 7(f) (3) permits the use of a basic rate established, pursuant to agreement or understanding in advance of the work, in lieu of the regular rate for the purpose of computing overtime compensation. The use of such a basic rate for employees of a retail or service establishment compensated wholly or partly by commissions is authorized under the conditions set forth in Part 548 of this chapter.
Subpart FĻOTHER PROVISIONS WHICH MAY AFFECT
(b) The Secretary of Labor, or any of his authorized representatives, shall make all investigations and inspections under section 11 (a) with respect to the employment of minors, and, subject to the direction and control of the Attorney General, shall bring all actions under section 17 to enjoin any act or practice which is unlawful by reason of the existence of oppressive child labor, and shall administer all other provisions of this Act relating to oppressive child labor.
(c) No employer shall employ any oppressive child labor in commerce or in the production of goods for commerce or in any enterprise engaged in commerce or in the production of goods for commerce.
GENERAL Section 779.500/PURPOSE OF SUBPART
In Subpart A of this part, reference was made to a number of regulations which discuss provisions of the Act, such as general coverage, overtime compensation, joint employment, hours worked, and methods of payment of wages, which are applicable to others as well as to retailers and their employees. (See section 779.6.) In addition to those provisions, the Act contains other provisions of interest to retailers and their employees. It is the purpose of this subpart to focus attention on several provisions in the latter category.
CHILD LABOR PROVISIONS Section 779.501-CHILD LABOR PROVI.
SIONS IN 29 CFR 1500.101-1500.129 Sections 1500.101-1500.129 in Subtitle A of this title contain a detailed discussion of the child labor provisions of the Act. Although those sections offer guidance for all including retailers, the brief discussion in sections 779.502 through 779.508 are of particular interest to those in the retail field.
PROVISIONS Child labor provisions:
Sec. 12. (a) No producer, manufacturer, or dealer shall ship or deliver for shipment in commerce any goods produced in an establishment situated in the United States in or about which within thirty days prior to the removal of such goods therefrom any oppressive child labor has been employed : Provided, That any such shipment or delivery for shipment of such goods by a purchaser who acquired them in good faith in reliance on written assurance from the producer, manufacturer, or dealer that the goods were produced in compliance with the requirements of this section, and who acquired such goods for value without notice of any such violation, shall not be deemed prohibited by this subsection; And provided further, That a prosecution and conviction of a defendant for the shipment or delivery for shipment of any goods under the conditions herein prohibited shall be a bar to any further prosecution against the same defendant for shipments or deliveries for shipment of any such goods before the beginning of said prosecution.
Section 779.503—THE RETAILER AND
SECTION 12(a) Section 12 (a) prohibits certain shipments or deliveries for shipment by "producers," "manufacturers” or “dealers." These terms having appeared in this section prior to the 1961 amendments are defined and described in section 1500.105 of this title, and said definitions remain unchanged. It should be noted that the term "manufacturer" as used in section 12(a) includes retailers who, in addition to retail selling, engage in such manufacturing activities as the making of slipcovers or curtains, the baking of bread, the making of candy, or the making of window frames. Further, the term "dealers"? refers to anyone who deals in goods including persons engaged in buying, selling, trading, distributing, delivering, etc. “Dealers,” therefore, as used in section 12(a) includes retailers. Therefore, where a retailer's business unit is covered under the Act and he is a producer, manufacturer or dealer within the meaning of this section, the retailer must comply with the requirements of section 12(a). If a retailer's business unit which is covered under the Act is exempt as a retail or service establishment under section 13 of the Act from the monetary requirements of the Act, the requirements of the child labor provisions must still be meet. For example, establishments such as hotels, restaurants, etc., in covered enterprises, and retail or service establishments in covered enterprises doing less than $250,000 annually, must comply with the child labor requirements even if they are exempt from minimum wage and overtime provisions under section 13(a) (2) of the Act.
Section 779.504—THE RETAILER AND
The Act sets a 16-year minimum for employment in manufacturing or mining occupations. Furthermore, this age minimum is applicable to employment in all other occupations unless otherwise provided by regulation or order issued by the Secretary.
Section 12(c) was amended in 1961 to prohibit the employment of oppressive child labor in any enterprise engaged in commerce or in the production of goods for commerce. Thus, every enterprise which is covered under the Act, such as the 3(s) (1) and 3(s) (5) enterprises, must comply with section 12(c) of the child labor provisions of the Act. As stated in section 779.503, compliance with this provision is necessary even though a particular establishment or establishments of a covered 3(s) (1) or 3(s)(5) enterprise are exempt from the requirement of compensating its employees in accordance with sections 6 and 7 of the Act.
Section 779.505—"OPPRESSIVE CHILD
Section 3(1) of the Act defines oppressive child labor as follows:
"Oppressive child labor” means a condition of employment under which (1) any employee under the age of sixteen years is employed by an employer (other than a parent or a person standing in place of a parent employing his own child or a child in his custody under the age of sixteen years in an occupation other than manufacturing or mining or an occupation found by the Secretary of Labor to be particularly hazardous for the employment of children between the ages of sixteen and eighteen years or detrimental to their health or well-being) in any occupation, or (2) any employee between the ages of sixteen and eighteen years is employed by an emplover in any occupation which the Secretary of Labor shall find and by order declare to be particularly hazardous for the employment of children between such ages or detrimental to their health or well-being; but oppressive child labor shall not be deemed to exist by virtue of the employment in any Occupation of any person with respect to whom the employer shall have on file an unexpired certificate issued and held pursuant to regulations of the Secretary of Labor certifying that such person is above the oppressive child labor age. The Secretary of Labor shall provide by regulation or by order that the employment of employees between the ages of fourteen and sixteen years in occupations other than manufacturing and mining shall not be deemed to constitute oppressive child labor if and to the extent that the Secretary of Labor determines that such employment is confined to periods which will not interfere with their schooling and to conditious which will not interfere with their health and well-being.
(a) Prohibited occupations. With respect to employment in occupations other than manufacturing and mining, the Secretary is authorized to issue regulations or orders lowering the age minimum to 14 years where he finds that such employment is confined to periods which will not interfere with the minors' schooling and to conditions which will not interfere with their health and well-being. Pursuant to this authority, the Secretary permits the employment of 14- and 15-year-old children in a limited number of occupations where the work is performed outside school hours and is confined to other specified limits. Under the provisions of Child Labor Regulation No. 3 (sections 1500.31-1500.37 of this title) employment of minors in this age group is not permitted in the following occupations:
(1) Manufacturing, mining, or processing occupations including occupations requiring the performance of any duties in a workroom or workplace where goods are manufactured, mined, or otherwise processed:
(2) Occupations involving the operation or tending of hoisting apparatus or of any powerdriven machinery other than office machines;
(3) The operation of motor vehicles or service as helpers on such vehicles;
(4) Public messenger service;
(5) Occupations declared to be particularly hazardous or detrimental to health or wellbeing by the Secretary:
(6) Occupations in connection with (i) transportation of persons or property by rail, highway, air, water, pipeline, or other means; (ii) warehousing and storage; (iii) communi