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CERTAIN EMPLOYEES OF RETAIL 779.421 Factors affecting the representative period. OR SERVICE ESTABLISHMENTS

779.422 Period representative of employee's current

earning pattern. General Principles

779.423 Representative character of past periods. Sec.

779.424 Length of representative period. 779.400 Purpose of subpart.

779.425 Length of periods in some typical situations. 779.401 Pre-1961 exemption for employee "employed

779.426 Application of the representative period. in a bona fide local retailing capacity"

779.427 Grace period for computing portion of comeliminated.

pensation representing commissions.

779.428 Dependence of the section 7(h) overtime pay Executive, Administrative, and Professional Employees

exemption upon the level of the employee's and Outside Salesmen

"regular rate" of pay. 779.402 Statutory provision.

779.429 Computing the “regular rate" of pay for pur779.403 "Executive" and "administrative" employees,

poses of section 7(h). defined.

779.430 Recordkeeping requirements. 779.404 Administrative and executive employees in

779.431 Basic rate for computing overtime compensa3(s) (1) or 3(s) (5) enterprises employed

tion of nonexempt employees receiving in other than retail or service establish

commissions. ments. 779.405 Other section 13(a) (1) employees employed Subpart F-OTHER PROVISIONS WHICH in covered enterprises.

MAY AFFECT RETAIL ENTERPRISES Student-Learners and Handicapped Workers

General 779.406 Statutory provisions. 779.407 “Student-learners”.

779.500 Purpose of subpart. 779.408 Learners other than “student-learners".

Child Labor Provisions 779.409 “Full-time students". 779.410 Handicapped workers.

779.501 Child labor provisions in 29 CFR 4.101–4.129.

779.502 Statutory provisions. Employees Compensated Principally by Commissions

779.503 The retailer and section 12(a). 779.411 Statutory provision,

779.504 The retailer and section 12(c). 779.412 Employee of a “retail or service establish 779.505 "Oppressive child labor" defined. ment”.

779.506 Sixteen-year minimum. 779.413 Compensation requirements for overtime pay

779.507 Fourteen-year minimum. exemption under section 7(h).

779.508 Eighteen-year minimum. 779.414 Methods of compensation of retail store

Driver or Driver's Helper Making Local Deliveries employees. 779.415 Types of employment in which this overtime 779.509 Statutory provision. pay exemption may apply.

779.510 Conditions that must be met for section 13 779.416 Compensation representing "commissions on

(b) (11) exemption. goods or services”.

779.511 "Finding by Secretary." 779.417 Computing employee's total compensation for

Records To Be Kept by Employers the representative period. 779.418 Computing proportion of total compensation 779.512 The recordingkeeping regulations. which “represents commissions".

779.513 Order and form of records. 779.419 What compensation “represents commissions" 779.514 Period for preserving records.

where dual systems of payment are used. 779.515 Regulations should be consulted. 779.420 The “representative period” for testing employee's compensation.

APPENDIX AUTHORITY: Sections 779.0 to 779.515 issued under secs. 1-19, 52 Stat. 1060, as amended; 75 Stat.

65; 29 U.S.C. 201-219. SOURCE: Sections 779.0 to 779.515 appear at 26 F.R. 8333, Sept. 2, 1961, except as otherwise noted.


comply with the Act's provisions in this regard Section 779.0-PURPOSE OF INTERPRE

and with specified recordkeeping requirements TATIVE BULLETIN

contained in 29 CFR Part 516. The law au

thorizes the Department of Labor to investigate It is the purpose of this part to provide an

for compliance and, in the event of violations, official statement of the views of the Depart

to supervise the payment of unpaid minimum ment of Labor with respect to the application wages or unpaid overtime compensation owing and meaning of those provisions of the Fair

to any employee. The law also provides for Labor Standards Act which govern rights and enforcement in the courts. obligations of employees and employers in the various enterprises in which retail sales of

Section 779.2—"OLD" AND "NEW"

COVERAGE goods or services are made. The application of the Act to employment in such enterprises Under the Act as amended in 1961, an emwas greatly broadened by amendments effective ployer may have some employees subject to its September 3, 1961. Under the amended Act, minimum wage, overtime pay, or child labor there are many employees employed by retail or provisions who would be covered by such proservice establishments and in enterprises having

visions under the "old" law even if the amendsuch establishments engaged in the retail selling ments had not been enacted, and other emof goods or services who must be employed in ployees whose coverage under such provisions compliance with its provisions. It is an objec was provided for the first time by the 1961 tive of this part to make available in one place, amendments. As explained in Subparts B and for the guidance of those who may be con C such provisions of the Act, as amended, may cerned with the provisions of the law, the offi apply to an employee by reason of the activities cial interpretations of these provisions by which in which he is individually engaged, or because the Department of Labor will be guided in he is employed in an enterprise whose activities carrying out its responsibilities under the Act. satisfy the conditions prescribed in the law.

However, the minimum wage rates and overSection 779.1-GENERAL SCOPE OF THE

time pay provisions will not be uniform for all ACT

such employees until September 3, 1965. On The Fair Labor Standards Act, as amended, and after that date, every such employee subis a Federal statute of general application ject to the minimum wage provisions will be which establishes minimum wage, overtime pay, entitled to not less than $1.25 an hour and and child labor requirements that apply as pro every such employee subject to the overtime vided in the Act. Employers and employees in provisions will be entitled to overtime pay for enterprises in which retail sales of goods or all hours worked in excess of 40 in a workweek services are made need to know how the Act

at a rate not less than one and one-half times his applies to employment in these enterprises so regular rate of pay. In contrast, during the that they may understand their rights and ob period beginning with the effective date of the ligations under the law. All employees whose 1961 amendments on September 3, 1961 and employment has the relationship to interstate ending September 2, 1965, the minimum wage or foreign commerce which the Act specifies rates and the overtime pay provisions, applicaare subject to the prescribed labor standards ble to employees who are not specifically exunless specifically exempted from them. Em empt therefrom, will be different for employees ployers having such employees are required to in employments brought under the Act for the

are brought within minimum wage or overtime coverage or both for the first time by the new "enterprise" coverage provisions or changes in exemptions, or both, which were enacted as part of the amendments and made effective September 3, 1961. These “newly covered" employees, unless a specific exemption has been retained or provided for them in the amendments, must be paid not less than the minimum wages for hours worked and not less than one and one-half times their regular rates of pay for overtime, as shown in the following schedule:

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first time by the amendments than for employees whose coverage is based on the "old" provisions of the Act. During this period employees whose coverage depends on the “new” provisions may be paid a lower minimum wage rate than those covered under the "old" provisions and may be employed for a longer workweek without overtime pay, as specified in the Act. Accordingly, employers who do not wish to pay to all covered employees the minimum wages and overtime pay required for employees covered under the "old" provisions will need to identify those employees who are covered under the "old" and those who are covered under the “new” provisions when wages are computed and paid under the Act. Section 779.3-PAY STANDARDS FOR


The 1961 amendments did not change the tests (described in subpart B) by which coverage based on the employee's individual activities is determined. Any employee whose employment satisfies these tests and would not have come within some exemption in the Act prior to the 1961 amendments is subject to the "old” provisions of the law and entitled to a minimum wage of at least $1.15 an hour beginning September 3, 1961 and not less than $1.25 an hour beginning September 3, 1963, unless expressly exempted by some provision of the amended Act. Such an employee is also entitled to overtimo pay for hours worked in excess of 40 in any workweek at a rate not less than one and one-half times his regular rate of pay. (Minimum wage rates in Puerto Rico, the Virgin Islands, and American Samoa are governed by special provisions of the Act. Information on these rates is available at any office of the Wage and Hour and Public Contracts Divisions.)

1 Requirements identical to those for employees under "old" coverage. (Minimum wage rates for newly covered employees in Puerto Rico, the Virgin Islands, and American Samoa are set by wage order under special industry committee procedures. Information on these rates and their effective dates may be obtained at any office of the Wage and Hour and Public Contracts Divisions.) Section 779.5–MATTERS DISCUSSED IN


This part discusses generally the provisions of the Act which govern its application to employers and employees in enterprises and establishments that make retail sales of goods or services. It discusses in some detail those provisions of the Act which refer specifically to such employers and employees and such enterprises or establishments. The criteria for determining the employments in which these employers and employees may be subject to the law are discussed in Subparts B and C of this part and the criteria for exclusion from its provisions under specific exemptions are discussed in Subpart D of this part. Other provisions of special interest to retailers and their employees are discussed in Subparts E and F of

this part.


"NEWLY COVERED" EMPLOYEES There are many employees of retailers as well ás other employees whose individual activities would not bring them within the minimum wage or overtime pay provisions of the Act as it was prior to the 1961 amendments, but who




Bulletins having general application to others subject to the law as well as to retailers and their employees have been issued on a number

of subjects of general interest. These will be interpretations are issued by the Administrator found in other parts of this chapter of the Code on the advice of the Solicitor of Labor, as auof Federal Regulations. Reference should be thorized by the Secretary (Reorg. Pl. 6 of 1950, made to them for guidance on matters which 64 Stat. 1263; Gen. Ord. 45A, May 24, 1950; they discuss in detail and which this part does 15 F.R. 3290). As included in the regulations not undertake to do. They include Part 777 of in this part, these interpretations are believed this chapter, discussing methods of payment of to express the intent of the law as reflected in wages; Part 778 of this chapter, discussing com its provisions and as construed by the courts putation and payment of overtime compensa and evidenced by its legislative history. Refertion; Part 785 of this chapter, discussing the ences to pertinent legislative history are made calculation of hours worked; Part 791 of this in this part where it appears that they will chapter, discussing joint employment relation contribute to a better understanding of the ships; and Part 776 of this chapter, discussing interpretations. the general coverage provisions of the Act.



The interpretations of the law contained in OFFICIAL INTERPRETATIONS this part are official interpretations which may

be relied upon as provided in section 10 of the The regulations in this part contain the offi

Portal-to-Portal Act of 1947. In addition, the cial interpretations of the Department of Labor

Supreme Court has recognized that such interwith respect to the application under described

pretations of this Act “provide a practical guide circumstances of the provisions of law which

to employers and employees as to how the office they discuss. These interpretations indicate the

representing the public interest in its enforceconstruction of the law which the Secretary of

ment will seek to apply it” and “constitute a Labor and the Administrator believe to be cor

body of experience and informed judgment to rect and which will guide them in the perform

which courts and litigants may properly resort ance of their duties under the Act unless and

for guidance.” Further, as stated by the until they are otherwise directed by authorita

Court: “Good administration of the Act and tive decisions of the courts or conclude, upon

good judicial administration alike require that re-examination of an interpretation, that it is

the standards of public enforcement and those incorrect.

for determining private rights shall be at variSection 779.8-BASIC SUPPORT FOR ance only where justified by very good reasons." INTERPRETATIONS

(Skidmore v. Swift, 323 U.S. 134.) Some of

the interpretations in Subpart D of this part The ultimate decisions on interpretations of

relating to the scope of the exemption provided the Act are made by the courts (Mitchell v.

for retail or service establishments are interZachry, 362 U.S. 310; Kirschbaum v. Walling, 316 U.S. 517). Court decisions supporting in pretations of this exemption as it appeared in terpretations contained in this bulletin are cited the original Act before amendment in 1949 and where it is believed they may be helpful. On 1961, which have remained unchanged because matters which have not been determined by the they were consistent with the amendments. courts, it is necessary for the Secretary of Labor These interpretations may be said to have Conand the Administrator to reach conclusions as gressional sanction because “When Congress to the meaning and the application of provi amended the Act in 1949 it provided that presions of the law in order to carry out their 1949 rulings and interpretations by the Admin

istrator should remain in effect unless inconsistresponsibilities of administration and enforce

ent with the statute as amended. 63 Stat. 920." ment (Skidmore v. Swift, 323 U.S. 134). In order that these positions may be made known (Mitchell v. Kentucky Finance Co., 359 U.S. to persons who may be affected by them, official 290.)

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Section 77 9.10-INTERPRETATIONS are set forth for ready reference in connection

MADE, CONTINUED, AND SUPER with the part's discussion of the various provi-

sions in which they appear. Some of these defiOn and after publication of this part in the

nitions and their application are considered in FEDERAL REGISTER, the interpretations contained

detail in other interpretative bulletins. The therein shall be in effect and shall remain in

application of the others is considered in the

sections of this part where the particular provieffect until they are modified, rescinded or with

sions containing the defined terms are discussed.
drawn. This part supersedes and replaces the
interpretations previously published in the FED-

Section 779.12-COMMERCE
ERAL REGISTER and Code of Federal Regulations

"Commerce" as used in the Act includes interas Part 779 of this chapter. Prior opinions,

state and foreign commerce.

It is defined in rulings, and interpretations and prior enforce

section 3(b) of the Act to mean “trade, comment policies which are not inconsistent with

merce, transportation, transmission or commuthe interpretations in this part or with the Fair

nication among the several States or between Labor Standards Act as amended by the Fair

any State and any place outside thereof." (For Labor Standards Amendments of 1961 are con

the definition of “State” see section 779.16.) tinued in effect; all other opinions, rulings, in

The application of this definition and the kinds terpretations, and enforcement policies on the

of activities which it includes are discusesd at subjects discussed in the interpretations in this

length in the interpretative bulletin on general part are rescinded and withdrawn. The inter

coverage of the Act, Part 776 of this chapter. pretations in this part provide statements of general principles applicable to the subjects dis

Section 779.13–PRODUCTION cussed and illustrations of the application of To understand the meaning of “production” these principles to situations that frequently of goods for commerce as used in the Act it is arise. They do not and cannot refer specifically necessary to refer to the definition in section to every problem which may be met by retailers 3(j) of the term "produced”. A detailed disin the application of the Act. The omission to cussion of the application of the term as defined discuss a particular problem in this part or in is contained in the interpretative bulletin on interpretations supplementing it should not be general coverage of the Act, Part 776 of this taken to indicate the adoption of any position chapter. Section 3 (j) provides that “produced” by the Secretary of Labor or the Administrator as used in the Act "means produced, manufacwith respect to such problem or to constitute an tured, mined, handled, or in any other manner administrative interpretation or practice or worked on in any State; and for the purposes enforcement policy. Questions on matters not of this Act an employee shall be deemed to have fully covered by this part may be addressed to been engaged in the production of goods if such the Administrator of the Wage and Hour and employee was employed in producing, manufacPublic Contracts Divisions, United States De

turing, mining, handling, transporting, or in partment of Labor, Washington 25, D.C., or

any other manner working on such goods, or in to any Regional Office of the Divisions.

any closely related process or occupation diSOME BASIC DEFINITIONS

rectly essential to the production thereof, in any

State.” (For the definition of “State” see secSection 779.11-GENERAL STATEMENT

tion 779.16.) The meaning and application of the provi

Section 779.14_GOODS sions of law discussed in this part depends in large degree on the definitions of terms used in The definition in section 3(i) of the Act states these provisions. The Act itself defines some

that "goods”, as used in the Act, means "goods of these terms. Others have been defined and (including ships and marine equipment), wares, construed in decisions of the courts. In the products, commodities, merchandise, or articles following sections some of these basic definitions or subjects of commerce of any character, or

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