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., 325 U.S. 419.) 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(h) 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

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.

Section 779.430-RECORDKEEPING
REQUIREMENTS

The records which must be kept with respect to employees for whom the overtime pay exemption under section 7(h) 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.

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 PROVISIONS 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.

Section 779.502-STATUTORY
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.

(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.

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 SECTION 12(c)

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

LABOR" DEFINED

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 employer 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 conditions which will not interfere with their health and well-being.

Section 779.506-SIXTEEN-YEAR
MINIMUM

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 779.507-FOURTEEN-YEAR

MINIMUM

(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

cations and public utilities; and (iv) construction (including demolition and repair). Office and sales work performed in connection with the occupations specified in this subparagraph is permitted if such work is not performed on trains or any other media of transportation or at the actual site of construction operations.

(b) Permissible occupations; conditions. Employment of 14- and 15-year-olds in all occupations other than those in paragraph (a) of this section is permitted by the regulation under certain conditions specified in the regulation.

[29 F.R. 19104, Dec. 30, 1964]

Section 779.508-EIGHTEEN-YEAR

MINIMUM

To protect young workers from hazardous employment, the Act provides for a minimum age of 18 years in occupations found and declared by the Secretary to be particularly hazardous or detrimental to health or well-being for minors 16 and 17 years of age. These occupations may be found in sections 1500.51-1500.66 of this title. Of particular interest to retailers are sections 1500.52, 1500.58, 1500.62 and 1500.63 of this title pertaining to the occupations of motor-vehicle driver and helper, and occupations involving the operation of power-driven hoisting apparatus, bakery machines, and paper products machines.

DRIVER OR DRIVER'S HELPER MAKING LOCAL DELIVERIES

Section 779.509-STATUTORY
PROVISION

Section 13(b) (11) exempts from the provisions of section 7 of the Act:

Any employee employed as a driver or driver's helper making local deliveries, who is compensated for such employment on the basis of trip rates, or other delivery payment plan, if the Secretary shall find that such plan has the general purpose and effect of reducing hours worked by such employees to, or below, the maximum workweek applicable to them under section 7(a).

This is an exemption from the overtime pay requirements only.

91

Section 779.510-CONDITIONS THAT MUST BE MET FOR SECTION 13(b) (11) EXEMPTION

In order that an employee be exempt from the overtime provisions of the Act under section 13(b)(11) he must be employed as a driver or driver's helper making local deliveries, and, he must be compensated for such employment on a trip rate basis or other delivery payment plan, and such plan must be found by the Secretary to have the general purpose or effect of reducing the hours worked by the driver or driver's helper to, or below, the maximum workweek applicable to him under section 7(a) of the Act. If all the preceding conditions are not met the exemption is inapplicable.

Section 779.511-"FINDING BY

SECRETARY"

As stated in section 779.510, before the section 13(b) (11) exemption may be claimed, the Secretary must find that the trip rate basis of compensation, or other delivery payment plan used to compensate a driver or a driver's helper making local deliveries, has the general purpose or effect of reducing the hours worked by these employees to, or below, the maximum workweek applicable to them under section 7(a) of the Act.

RECORDS TO BE KEPT BY EMPLOYERS

Section 779.512-THE RECORDKEEPING

REGULATIONS

Every employer who is subject to any of the provisions of the Act is required to maintain certain records. The recordkeeping requirements are set forth in regulations which have been published in Subparts A and B of Part 516 of this chapter. Subpart A contains the requirements applicable to all employers employing covered employees, including the genral requirements relating to the posting of notices, the preservation and location of records and similar general provisions. Subpart A also contains the requirements relating

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