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Appendix-ENFORCEMENT POLICY WITH RESPECT TO CERTAIN RETAIL AND SERVICE ESTABLISHMENTS

Pursuant to authority in the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.), Reorganization Plan No. 6 of 1950 (3 CFR 1949-1953 Comp., p. 1004), and General Order No. 45-A of the Secretary of Labor (15 F.R. 3290), the following enforcement policy has been adopted under the Fair Labor Standards Act, effective September 3, 1961, with respect to compensation for certain employees employed by retail or service establishments having branch stores in the same local community.

1. As an enforcement policy in the administration of the Act, the Administrator of the Wage and Hour Division of the Department of Labor will, unless otherwise directed by the courts, consider that the minimum wage and overtime pay requirements of the Act are complied with, in the case of an employee whose employment in the particular workweek meets

all the conditions set forth in paragraph 2, if for such workweek that employee is paid not less than the minimum wages specified in section 6(b) of the Act and compensation for any overtime worked in accordance with the provisions of section 7(a) (2) of the Act.

2. The applicability to an employee of the enforcement policy stated in paragraph 1 of this notice is subject to the conditions stated in this paragraph 2. The enforcement policy is intended to apply to any employee whose employment during his workweek is in all respects the same as that which was authorized to be treated as exempt from the minimum wage and overtime pay requirements of the Act under an enforcement policy which was in effect prior to September 3, 1961 as stated in paragraph 3 of this notice. This former enforcement policy, which was set forth in the former Section 779.4

(b) (3) of Title 29 of the Code of Federal Regulations, was applicable to certain employees of a retail organization having a main establishment and branch establishments in the same local community and had the effect of excepting such employees, under specified conditions, from the application of the general rule that employees performing central functions for two or more retail or service establishments are subject to the minimum wage and overtime pay requirements of the Act. The enforcement policy stated in paragraph 1 of this notice does not apply to any employee whose employment would not, prior to September 3, 1961, have satisfied all the conditions required by the former enforcement policy as prerequisites to his exempt treatment thereunder. Accordingly, the enforcement policy stated in paragraph 1, like the former enforcement policy, will not apply to an employee unless

(a) He works in a retail or service establishment (as defined in the Act), more than 50 percentum of whose annual dollar volume of sales of goods or services is made within the State in which the establishment is located; and

(b) He is employed for the purpose of performing activities which are part of the ordinary business operations of such establishment, and his work relating to branch establishments is confined to similar functions; and

(c) The main establishment in which he works, and all the branch establishments to which his work also relates, are establishments which would qualify for exemption under section 13(a) (2) or 13(a) (4) of the Fair Labor Standards Act if the 1961 amendments to such Act had not been enacted; and

(d) The main establishment and its branches are, organizationally, operated in the same local community as integral parts of a single store; and

(e) The employer does not operate more than four such branches of his main establishment; and

(f) The annual dollar volume of sales of goods and services made by the main establishment is greater than the aggregate annual dollar volume of sales of goods and services made by all the branch establishments.

3. The enforcement policy stated in paragraph 1 of this notice will permit the application to the employees who come within its terms of the same minimum wage and overtime pay standards as are provided by the amended Act for employees who were brought under its provisions for the first time on September 3, 1961 as a result of the 1961 amendments. This is believed to be justified because until that date employers were entitled under section 10 of the Portal-to-Portal Act of 1947 (61 Stat. 84) to be relieved of liability or punishment for any failure to pay minimum wages or overtime compensation to the employees described in paragraph 2 of this notice. This could be done upon a showing of good faith reliance (see 29 CFR 790.13-790.16, 790.18), on the former enforcement policy described in that paragraph, which was in effect during the period beginning October 28, 1950 (15 F.R. 7245, 29 CFR, section 779.4(b) (3)) and ending September 2, 1961 (26 F.R. 8333, 29 CFR section 779.10). As published, this former enforcement policy was expressly limited by a statement that it would be followed "pending judicial clarification of the status of such employees". As a result of further clarification by the United States Supreme Court and other Federal appellate courts, which indicated that the statute would not support such a policy, no restatement of the former policy was included in the revised interpretative bulletin on the Fair Labor Standards Act as applied to retailers of goods or services, which was published on September 2, 1961, in the Federal Register (26 F.R. 8333, 29 CFR Part 779), following the enactment of the Fair Labor Standards Amendments of 1961 (75 Stat. 65).

[27 F.R. 694, Jan. 24, 1962]

U.S. GOVERNMENT PRINTING OFFICE 1964

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Appendix-ENFORCEMENT POLICY WITH RESPECT TO CERTAIN RETAIL AND SERVICE ESTABLISHMENTS

Pursuant to authority in the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.), Reorganization Plan No. 6 of 1950 (3 CFR 1949-1953 Comp., p. 1004), and General Order No. 45-A of the Secretary of Labor (15 F.R. 3290), the following enforcement policy has been adopted under the Fair Labor Standards Act, effective September 3, 1961, with respect to compensation for certain employees employed by retail or service establishments having branch stores in the same local community.

1. As an enforcement policy in the administration of the Act, the Administrator of the Wage and Hour Division of the Department of Labor will, unless otherwise directed by the courts, consider that the minimum wage and overtime pay requirements of the Act are complied with, in the case of an employee whose employment in the particular workweek meets

all the conditions set forth in paragraph 2, if for such workweek that employee is paid not less than the minimum wages specified in section 6(b) of the Act and compensation for any overtime worked in accordance with the provisions of section 7(a) (2) of the Act.

2. The applicability to an employee of the enforcement policy stated in paragraph 1 of this notice is subject to the conditions stated in this paragraph 2. The enforcement policy is intended to apply to any employee whose employment during his workweek is in all respects the same as that which was authorized to be treated as exempt from the minimum wage and overtime pay requirements of the Act under an enforcement policy which was in effect prior to September 3, 1961 as stated in paragraph 3 of this notice. This former enforcement policy, which was set forth in the former Section 779.4

(b) (3) of Title 29 of the Code of Federal Regulations, was applicable to certain employees of a retail organization having a main establishment and branch establishments in the same local community and had the effect of excepting such employees, under specified conditions, from the application of the general rule that employees performing central functions for two or more retail or service establishments are subject to the minimum wage and overtime pay requirements of the Act. The enforcement policy stated in paragraph 1 of this notice does not apply to any employee whose employment would not, prior to September 3, 1961, have satisfied all the conditions required by the former enforcement policy as prerequisites to his exempt treatment thereunder. Accordingly, the enforcement policy stated in paragraph 1, like the former enforcement policy, will not apply to an employee unless

(a) He works in a retail or service establishment (as defined in the Act), more than 50 percentum of whose annual dollar volume of sales of goods or services is made within the State in which the establishment is located; and

(b) He is employed for the purpose of performing activities which are part of the ordinary business operations of such establishment, and his work relating to branch establishments is confined to similar functions; and

(c) The main establishment in which he works, and all the branch establishments to which his work also relates, are establishments which would qualify for exemption under section 13(a)(2) or 13(a) (4) of the Fair Labor Standards Act if the 1961 amendments to such Act had not been enacted; and

(d) The main establishment and its branches are, organizationally, operated in the same local community as integral parts of a single store; and

(e) The employer does not operate more than four such branches of his main establishment; and

(f) The annual dollar volume of sales of goods and services made by the main establishment is greater than the aggregate annual dollar volume of sales of goods and services made by all the branch establishments.

3. The enforcement policy stated in paragraph 1 of this notice will permit the application to the employees who come within its terms of the same minimum wage and overtime pay standards as are provided by the amended Act for employees who were brought under its provisions for the first time on September 3, 1961 as a result of the 1961 amendments. This is believed to be justified because until that date employers were entitled under section 10 of the Portal-to-Portal Act of 1947 (61 Stat. 84) to be relieved of liability or punishment for any failure to pay minimum wages or overtime compensation to the employees described in paragraph 2 of this notice. This could be done upon a showing of good faith reliance (see 29 CFR 790.13-790.16, 790.18), on the former enforcement policy described in that paragraph, which was in effect during the period beginning October 28, 1950 (15 F.R. 7245, 29 CFR, section 779.4(b) (3)) and ending September 2, 1961 (26 F.R. 8333, 29 CFR section 779.10). As published, this former enforcement policy was expressly limited by a statement that it would be followed "pending judicial clarification of the status of such employees". As a result of further clarification by the United States Supreme Court and other Federal appellate courts, which indicated that the statute would not support such a policy, no restatement of the former policy was included in the revised interpretative bulletin on the Fair Labor Standards Act as applied to retailers of goods or services, which was published on September 2, 1961, in the Federal Register (26 F.R. 8333, 29 CFR Part 779), following the enactment of the Fair Labor Standards Amendments of 1961 (75 Stat. 65).

[27 F.R. 694, Jan. 24, 1962]

U.S. GOVERNMENT PRINTING OFFICE 1964

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