Pay Administration Under the Fair Labor Standards Act

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 551

RIN 3206-AG70

Pay Administration Under the Fair Labor Standards Act

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The U.S. Office of Personnel Management (OPM) is publishing a

proposed rule to amend regulations on the Fair Labor Standards Act

(referred to as ``the Act'' or ``FLSA''). The purpose of the majority

of the revisions is to make text clearer, standardize terms, change to

the active voice, reorganize material for added clarity, insert or

revise headings to accurately reflect content, reduce internal cross-

referencing, correct typographical, punctuation, and grammatical

errors, and use ``plain English.'' The proposed rule includes guidance

published in the sunsetted Federal Personnel Manual (FPM), adds certain

work in the computer software field to the professional exemption

criteria, adds an exemption for certain pilots, adds the statutory

exclusion of customs officers, and includes regulations on child labor

and claims and compliance.

DATES: Written comments will be considered if received on or before

October 24, 1997. Please organize and identify comments by section and

paragraph designation.

ADDRESSES: All comments concerning these proposed regulations should be

addressed to Jeffrey D. Miller, Director, Classification Appeals and

FLSA Programs, Office of Personnel Management, 1900 E Street NW., Room

7679, Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Jeffrey D. Miller, Director,

Classification Appeals and FLSA Programs, by telephone on 202-606-2990;

by fax on 202-606-2663; or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: On January 10, 1995, OPM published a

proposed rule (60 FR 2549) to amend regulations on the Fair Labor

Standards Act by adding a subpart F--Complaints and Compliance.

That subpart F provided for FLSA complaint adjudication by the

agency involved rather than by OPM. Comments were received from

four Federal agencies, four labor organizations, and one employee

organization. OPM reconsidered its proposal and withdrew the

proposed subpart F (62 FR 9995, March 5, 1997).

The purpose of the majority of these revisions is to make text

clearer, standardize terms, change to the active voice, reorganize

material for added clarity, insert or revise headings to accurately

reflect content, reduce internal cross-referencing, correct

typographical, punctuation, and grammatical errors, and use ``plain

English.'' The proposed rule includes guidance published in the

sunsetted Federal Personnel Manual, adds certain work in the computer

software field to the professional exemption criteria, adds an

exemption for certain pilots, adds the statutory exclusion of customs

officers, and adds two new subparts, subpart F--Child Labor and subpart

G--FLSA Claims and Compliance. The changes are discussed section by

section below. When the reason for a revision is one or more of the

ones described in this paragraph, we do not repeat the reason when we

describe the change.

1. Nomenclature Changes

References to the Office of Personnel Management are changed to

``OPM'; the word ``shall'' is changed to ``will'' or ``must,'' as

appropriate; the phrase ``shall be'' is changed to ``is''; the phrase

``employee in a position properly classified'' is substituted for

``employee classified''; and ``primary duty test'' is substituted for

``primary duty criterion.''

2. Miscellaneous Changes

The following changes are made throughout: quotation marks are

removed, and paragraph headings are added.

3. New Sections

Two new sections are added to subpart B--Exemptions and the subpart

is retitled ``Exemptions and Exclusions.'' One new section (551.204)

describes the exemption of Federal Wage System employees. The other new

section (551.211) describes the statutory exclusion of customs officers

of the United States Customs Service. Customs officers whose exclusive

entitlement to overtime pay is governed by section 5 of the Act of Feb.

13, 1911, as amended (sections 261 and 267 of title 19, United States

Code), are excluded from the hours of work and overtime pay provisions

of the FLSA. As used in section 5, the term ``customs officer'' means a

customs inspector, a supervisory customs inspector, a canine

enforcement officer, or a supervisory canine enforcement officer.

4. New Subparts

Two new subparts are added. The first (subpart F) addresses child

labor and the second (subpart G) addresses complaints and compliance.

5. Subpart A

Subpart A is restructured. Section 551.102--Definitions is

redesignated Sec. 551.104 with the same title. Section 551.104--

Administrative authority is redesignated Sec. 551.102 and retitled

``Authority and administration''.

6. Section 551.101--General.

The second sentence of paragraph (a) is revised by deleting all

that follows the word ``Act''. Revised paragraph (a) is moved to

redesignated Sec. 551.102--Authority and administration.

Paragraph (b) is redesignated paragraph (a). In the first sentence,

the phrase ``Fair Labor Standards Act of 1938, as amended (referred to

as ``the Act'' or ``FLSA'')'' replaces the word ``Act''.

Paragraph (c) is redesignated paragraph (b).

7. Redesignated Sec. 551.102--Authority and Administration

Paragraph (a) is moved to this section from published Sec. 551.101

and paragraphs (b), (c), and (d) are added.

Paragraph (a), moved here from published Sec. 551.101, describes

OPM's authority. The sole sentence of published Sec. 551.104--

Administrative authority is added to paragraph (a) and is revised by

deleting all the text following the word ``except'' and substituting

``as specified in paragraphs (b), (c), and (d) of this section.''

Paragraph (b) states that the Equal Employment Opportunity

Commission administers the equal pay provisions of the Act.

Paragraph (c) lists the United States Government entities for which

the Department of Labor administers the Act. Those are the Library of

Congress, the United States Postal Service, the Postal Rate Commission,

and the Tennessee Valley Authority.

Paragraph (d) lists the United States Government entities for which

the Office of Compliance administers the Act. The Congressional

Accountability

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Act of 1995 (Pub. L. 104-1, 109 Stat. 4, January 23, 1995) authorized

the application of the provisions of the FLSA to the legislative branch

of the Federal Government and authorized the Office of Compliance to

administer the FLSA for any employee of the United States House of

Representatives; the Unites States Senate; the Capitol Guide Service;

the Capitol Police; the Congressional Budget Office; the Office of the

Architect of the Capitol; the Office of the Attending Physician; the

Office of Compliance; and the Office of Technology Assessment.

8. Section 551.103--Coverage

The phrase ``as defined in Sec. 551.102'' is deleted from

paragraphs (b)(2) and (b)(3).

9. Redesignated Sec. 551.104--Definitions

Several of the current definitions are revised. The phrase ``or

FLSA'' is added to the definition of ``Act''. The definition of

``agency'' is revised by deleting the colon and all text following the

colon and adding ``the entities of the United States Government listed

in Sec. 551.101 for which the Department of Labor and the Office of

Compliance administer the Act.'' The definition of ``employ'' is

revised by deleting the phrase ``as defined for this part''. The

definition of ``employee'' is revised by adding a reference to law to

subparagraphs (1) and (2) and deleting the words ``legislative or''

from subparagraph (4). The list of locations under the definition of

``exempt area'' is updated--``U.S.'' is inserted before the name

``Virgin Islands,'' Eniwetol Atoll and Kwajalein Atoll are deleted, and

Midway Atoll and Palmyra are added.

Many of the terms used in the FLSA arena have acquired well-

established interpretations that sometimes differ from the customary

interpretations in the Federal service. Terms and definitions from FPM

Letter No. 551-7, dated July 1, 1975, are added, as well as definitions

of other FLSA and pay administration terms. Terms added are as follows:

Administrative employee

Claim

Claim period

Claimant

Customarily and regularly

De minimis activity or worktime

Discretion and independent judgment

Emergency

Essential part of administrative or professional functions

Executive employee

FLSA exempt

FLSA exemption status

FLSA exemption status determination claim

FLSA nonexempt

FLSA overtime pay

FLSA pay claim

Foreign exemption

Formulation or execution of management programs or policies

Hours of work

Management or general business function or supporting service

Nonexempt area

Participation in the executive or administrative functions of a

management official

Perform work in connection with an emergency

Preserve the claim period

Primary duty

Professional employee

Reckless disregard of the requirements of the Act

Recognized organizational unit

Situations 1 through 4

Statute of limitations

Supervisory and closely related work

Temporary work or duties

Title 5 overtime pay

Willful violation

Work of an intellectual nature

Work of a specialized or technical nature

Workday

Worktime

Worktime in a representative workweek

Workweek

Workweek basis

10. Section 551.201--Agency Authority

The statement ``All employees are presumed to be FLSA nonexempt

unless the employing agency makes a determination that the position

meets one or more of the exemption criteria of this subpart.'' is added

as the first sentence.

11. Section 551.202--General Principles Governing Exemptions

The introductory language is revised by deleting the phrase ``the

principles that--'' and substituting ``following principles:''.

In paragraph (c), the phrase ``must be exempted'' is changed to

``must be designated FLSA exempt'' and the sentence ``If there is a

reasonable doubt as to whether an employee meets the criteria for

exemption, the employee should be designated FLSA nonexempt.'' is

added.

Four additional general principles from FPM Letter 551-7, dated

July 1, 1975, are added as paragraphs (d) through (g). An additional

general principle is added as paragraph (h).

12. Section 551.203--Exemption of General Schedule Employees

At the end of paragraph (a) the caveat is added that employees in

positions properly classified at GS-4 or below are nonexempt unless

subject to the foreign exemption.

In paragraph (b), the phrase ``GS-5 or above'' is substituted for

the phrase ``GS-5 through GS-10'' and the reference ``Secs. 551.204,

551.205, and 551.206'' is deleted. At the end of paragraph (b) the

caveat is added that the exemption status of employees in positions

properly classified at GS-5 or above may be affected if the employee is

required to temporarily perform work or duties that are not consistent

with the employee's official position description or if the employee is

subject to the foreign exemption.

13. Section 551.204--Executive Exemption Criteria

The section is redesignated from Sec. 551.204 to Sec. 551.205.

In the introductory paragraph, the term ``executive employee'' is

italicized and the quotation marks removed. The title ``foreman'' is

deleted. The phrase ``regularly and customarily'' is changed to

``customarily and regularly'' to be consistent with the use of the

phrase elsewhere. The phrases ``at least three'' and ``(excluding

support personnel)'' are removed. The word ``both'' is substituted for

``all.'' There is no need to distinguish between General Schedule (or

equivalent) supervisors and Federal Wage System (or equivalent)

supervisors. The General Schedule Supervisory Guide published in April

1993 specifies no minimum number of employees to be supervised for a

position to be classified as supervisory.

In paragraph (a), the entire text is deleted and the phrase ``The

primary duty test is met if the employee--'' is substituted.

In paragraph (a)(1), the phrase ``select or remove, and advance in

pay and promote, or make any other status changes of'' is changed to

``make personnel changes that include, but are not limited to,

selecting, removing, advancing in pay, or promoting.''

In paragraph (b), the phrase ``supervisors in positions properly

classified in the Federal Wage System below situation 3 of Factor I of

the Federal Wage System Job Grading Standard for Supervisors'' is

substituted for ``foreman level supervisors in the Federal Wage

System'' to update the nomenclature. The word ``level'' is inserted

after the word ``equivalent,'' and the word ``comparable'' is inserted

before the phrase ``wage systems.'' The phrase ``employees at the GS-7

through GS-9 level'' is deleted and ``firefighting or law enforcement

employees in positions properly classified in the General Schedule at

GS-7, GS-8, or GS-9 that are'' is substituted to describe the types of

employees subject to 207(k) of title 29, United States Code. The phrase

``employees classified at'' is deleted and ``employees in positions

properly

[[Page 45066]]

classified in the General Schedule at'' is substituted. The words

``the'' and ``level'' are deleted from the phrase ``classified at the

GS-5 or GS-6 level'' and inserted in the parenthetical clause to read

``(or the equivalent level in other white-collar pay systems).'' The

phrase ``to meet the 80-percent test'' is added after ``closely related

work.'' Paragraph (b) is restructured to more clearly and easily

identify the types of employees to which the paragraph applies.

14. Section 551.205--Administrative Exemption Criteria

The section is redesignated from Sec. 551.205 to Sec. 551.206.

In the introductory paragraph, the term ``administrative employee''

is italicized. The words ``advisor, assistance,'' are deleted and the

phrase ``advisor or assistant to management'' is substituted. The

phrase ``who meets all'' is changed to ``and meets all four''.

In paragraph (a), the introductory text ``The employee's primary

duty consists of work that--'' is changed to ``The primary duty test is

met if the employee's work--''.

In paragraph (a)(1), the phrase ``management policies or programs''

is changed to ``management programs or policies.

In paragraph (a)(3), the spelling of the word ``management'' is

corrected.

In paragraph (c), the phrase ``must frequently exercise'' is

changed to the phrase ``frequently exercises'' to be consistent with

wording elsewhere.

In paragraph (d), the word ``level'' is inserted after the word

``equivalent,'' the word ``pay'' is inserted after the word ``collar,''

and the phrase ``to meet the 80-percent test'' is added to the end of

the sentence.

15. Section 551.206--Professional Exemption Criteria

The section is redesignated from Sec. 551.206 to Sec. 551.207.

In the introductory paragraph, the term ``professional employee''

is italicized.

In paragraph (a), the introductory text ``The employee's primary

duty consists of--'' is replaced with ``The primary duty test is met if

the employee's work consists of--''.

At the end of paragraph (a)(2), the period is replaced with a

semicolon followed by the word ``or.''

Paragraph (a)(3) is added and adds certain work in the computer

software field to the types of work meeting the primary duty test. This

change brings OPM's regulations into conformance with those of the

Department of Labor which implemented the provisions of Pub. L. 101-

583, enacted November 15, 1990. That law required the issuance of

regulations to permit computer systems analysts, computer programmers,

software engineers, and other similarly skilled professional workers to

qualify for exemption from the minimum wage and overtime compensation

requirements of the Act under section 13(a)(1), the executive,

administrative, and professional exemption.

In paragraph (d), the spelling of the word ``employees'' is

corrected, the word ``level'' is inserted after the word

``equivalent,'' the phrase ``white-collar pay'' is inserted after the

word ``other,'' and the word ``in'' is changed to ``on'' after the word

``workweek'' to make this paragraph consistent with published

Sec. 551.204(b) and 551.205(d).

16. Section 551.207--Foreign Exemption

The section is redesignated from Sec. 551.207 to Sec. 551.209 and

retitled ``Foreign exemption criteria.'' The section is reorganized for

clarity and rewritten in plain English.

17. Section 551.208--Application of the Executive, Administrative, and

Professional Exemption Criteria for Periods of Temporary Duty

The section title is changed from ``Application of the executive,

administrative, and professional exemption criteria for periods of

temporary duty'' to ``Effect of temporary work or duties on FLSA

exemption status.'' The section is reorganized for clarity and

rewritten in plain English. The changes include the following.

The phrase ``temporary work or duties'' is substituted for the

phrase ``temporary duty'' to make clear that the subject is the work an

employee is performing on a temporary basis. The change emphasizes that

an employee's FLSA exemption status may change when an employee is

temporarily required to perform work or duties not consistent with the

employee's official position description and eliminates confusion with

the term ``TDY'' (temporary duty). TDY is commonly used to refer to an

employee in travel status or located somewhere on a temporary basis. To

further emphasize this point, a sentence is added that states ``The

period of temporary work or duties may or may not involve a different

geographic duty location.''

To focus attention on the tasks an employee is being asked to

perform temporarily, rather than the type of appointment (permanent

appointment, temporary appointment, or term appointment) or the

temporariness or permanence of a personnel action (detail or temporary

promotion), the phrases ``consistent with the employee's official

position description'' or ``not consistent with the employee's official

position description'' are used in lieu of ``duties which are not

included in the employee's representative workweek'' and ``permanent

position.''

Nomenclature is updated and phrasing is revised to parallel earlier

sections. For example, the phrase ``in the Federal Wage System at

situation 3 or 4 of Factor I of the Federal Wage System Job Grading

Standard for Supervisors'' is substituted for ``General Foreman''; the

phrase ``in the Federal Wage System below situation 3 of Factor I of

the Federal Wage System Job Grading Standard for Supervisors'' is

substituted for ``below General Foreman''; and the phrase ``80 percent

or more of the worktime in a given workweek'' is substituted for ``more

than 80 percent of a given workweek''.

18. Section 551.209--Exemption of Criminal Investigators Receiving

Availability Pay

The section is redesignated from Sec. 551.209 to Sec. 551.110 and

retitled ``Exemption of employees receiving availability pay.''

Paragraph (a) addresses the exemption of criminal investigators

receiving availability pay.

Paragraph (b) addresses the exemption of pilots employed by the

United States Customs Service who are law enforcement officers and also

receive availability pay. Pub. L. 104-19, July 27, 1995, amended

section 5545a of title 5, United States Code (U.S.C.), and provided

that the provisions of subsections (a)-(h) providing for availability

pay apply to a pilot employed by the United States Customs Service who

is a law enforcement officer as defined under 5 U.S.C. 5541(3). For the

purposes of 5 U.S.C. 5545a, 5 U.S.C. 5542(d) and section 13(a)(16) and

(b)(30) of the FLSA (29 U.S.C. 213(a)(16) and (b)(30)), such pilots are

deemed to be criminal investigators as defined in 5 U.S.C. 5545a.

19. Subpart F--Child Labor

This new subpart sets forth the minimum age standards and

delineates the respective responsibilities of an agency and OPM

regarding the child labor provisions of the Act.

20. Subpart G--FLSA Claims and Compliance

This new subpart describes the applicability of OPM's FLSA claims

regulations, time limits that must be observed, avenues of review, the

claimant's right to designate a representative, the form and content of

[[Page 45067]]

an FLSA claim, responsibilities of claimants and agencies, the

circumstances under which an FLSA claim may be withdrawn or denied, the

finality and effect of an OPM FLSA claim decision, the availability of

information from an FLSA claim file, and where to file an FLSA claim

with OPM.

Regulatory Flexibility Act

I certify that these regulations will not have significant economic

impact on a substantial number of small entities because they affect

only Federal employees and agencies.

List of Subjects in 5 CFR Part 551

Government employees, Wages.

U.S. Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM is proposing to amend 5 CFR part 551 as follows:

PART 551--PAY ADMINISTRATION UNDER THE FAIR LABOR STANDARDS ACT

1. The authority citation for part 551 continues to read as

follows:

Authority: 5 U.S.C. 5542(c); sec. 4(f) of the Fair Labor

Standards Act of 1938, as amended by Pub. L. 93-259, 88 Stat. 55 (29

U.S.C. 204f).

2. Subpart A is revised to read as follows:

Subpart A--General Provisions

Sec.

551.101 General.

551.102 Authority and administration.

551.103 Coverage.

551.104 Definitions.

Subpart A--General Provisions

Sec. 551.101 General.

(a) The Fair Labor Standards Act of 1938, as amended (referred to

as ``the Act'' or ``FLSA''), provides for minimum standards for both

wages and overtime entitlement, and delineates administrative

procedures by which covered worktime must be compensated. Included in

the Act are provisions related to child labor, equal pay, and portal-

to-portal activities. In addition, the Act exempts specified employees

or groups of employees from the application of certain of its

provisions. It prescribes penalties for the commission of specifically

prohibited acts.

(b) This part contains the regulations, criteria, and conditions

that the Office of Personnel Management has prescribed for the

administration of the Act. This part supplements and implements the

Act, and must be read in conjunction with it.

Sec. 551.102 Authority and administration.

(a) Office of Personnel Management. Section 3(e)(2) of the Act

authorizes the application of the provisions of the Act to any person

employed by the Government of the United States, as specified in that

section. Section 4(f) of the Act authorizes the Office of Personnel

Management (OPM) to administer the provisions of the Act. OPM is the

administrator of the provisions of the Act with respect to any person

employed by an agency, except as specified in paragraphs (b), (c), and

(d) of this section.

(b) The Equal Employment Opportunity Commission administers the

equal pay provisions contained in section 6(d) of the Act.

(c) The Department of Labor administers the Act for the following

United States Government entities:

(1) The Library of Congress;

(2) The United States Postal Service;

(3) The Postal Rate Commission; and

(4) The Tennessee Valley Authority.

(d) The Office of Compliance administers the Act for the following

United States Government entities:

(1) The United States House of Representatives;

(2) The United States Senate;

(3) The Capitol Guide Service;

(4) The Capitol Police;

(5) The Congressional Budget Office;

(6) The Office of the Architect of the Capitol;

(7) The Office of the Attending Physician;

(8) The Office of Compliance; and

(9) The Office of Technology Assessment.

Sec. 551.103 Coverage.

(a) Covered. Any employee of an agency who is not specifically

excluded by another statute is covered by the Act. This includes any

person who is--

(1) Defined as an employee in section 2105 of title 5, United

States Code;

(2) Appointed under other appropriate authority; or

(3) Suffered or permitted to work by an agency whether or not

formally appointed.

(b) Not covered. The following persons are not covered under the

Act:

(1) A person appointed under appropriate authority without

compensation;

(2) A trainee; or

(3) A volunteer.

Sec. 551.104 Definitions.

In this part--

Act or FLSA means the Fair Labor Standards Act of 1938, as amended

(29 U.S.C. 201 et seq.).

Administrative employee means an employee who meets the criteria in

Sec. 551.206 of this part.

Agency, for purposes of OPM's administration of the Act, means any

instrumentality of the United States Government, or any constituent

element thereof acting directly or indirectly as an employer, as this

term is defined in section 3(d) of the Act and in this section, but

does not include the entities of the United States Government listed in

Sec. 551.102 for which the Department of Labor or the Office of

Compliance administer the Act.

Claim means a written allegation from a current or former employee

concerning his or her FLSA exemption status determination or

entitlement to minimum wage or overtime pay for work performed under

the Act.

Claim period means the time during which the cause or basis of the

claim occurred.

Claimant means a current or former employee who files an FLSA

claim.

Customarily and regularly means a frequency which must be greater

than occasional but which may be less than constant. For example, the

requirement in Sec. 551.205(a)(2) of this part will be met by an

employee who normally and recurrently exercises discretion and

independent judgment in the day-to-day performance of duties.

De minimis activity or worktime means an activity or worktime of

less than 10 minutes a day.

Discretion and independent judgment means work that involves

comparing and evaluating possible courses of conduct, interpreting

results or implications, and independently taking action or making a

decision after considering the various possibilities. However, firm

commitments or final decisions are not necessary to support exemption.

The ``decisions'' made as a result of the exercise of independent

judgment may consist of recommendations for action rather than the

actual taking of action. The fact that an employee's decisions are

subject to review, and that on occasion the decisions are revised or

reversed after review, does not mean that the employee is not

exercising discretion and independent judgment of the level required

for exemption. Work reflective of discretion and independent judgment

must meet the three following criteria:

(1) The work must be sufficiently complex and varied so as to

customarily and regularly require discretion and independent judgment

in determining the approaches and techniques to be used, and in

evaluating results. This precludes exempting an employee who performs

work primarily requiring skill

[[Page 45068]]

in applying standardized techniques or knowledge of established

procedures, precedents, or other guidelines which specifically govern

the employee's action.

(2) The employee must have the authority to make such

determinations during the course of assignments. This precludes

exempting trainees who are in a line of work which requires discretion

but who have not been given authority to decide discretionary matters

independently.

(3) The decisions made independently must be significant. The term

``significant'' is not so restrictive as to include only the kinds of

decisions made by employees who formulate policies or exercise broad

commitment authority. However, the term does not extend to the kinds of

decisions that affect only the procedural details of the employee's own

work, or to such matters as deciding whether a situation does or does

not conform to clearly applicable criteria.

Emergency means a temporary condition that poses a direct threat to

human life or safety, serious damage to property, or serious disruption

to the operations of an activity, as determined by the employing

agency.

Employ means to engage a person in an activity that is for the

benefit of an agency, and includes any hours of work that are suffered

or permitted.

Employee means a person who is employed--

(1) In an executive agency as defined in section 105 of title 5,

United States Code;

(2) As a civilian in a military department as defined in section

102 of title 5, United States Code;

(3) In a nonappropriated fund instrumentality of an executive

agency or a military department; or

(4) In a unit of the judicial branch of the Government that has

positions in the competitive service.

Employer, as defined in section 3(d) of the Act, means any person

acting directly or indirectly in the interest of an employer in

relation to an employee and includes a public agency, but does not

include any labor organization (other than when acting as an employer)

or anyone acting in the capacity of officer or agent of such labor

organization.

Essential part of administrative or professional functions means

work that is included as an integral part of administrative or

professional exempt work. This work is identified by examining the

processes involved in performing the exempt function. For example, the

processes involved in evaluating a body of information include

collecting and organizing information; analyzing, evaluating, and

developing conclusions; and frequently, preparing a record of findings

and conclusions. Often collecting or compiling information and

preparing reports or other records, if divorced from the evaluative

function, are nonexempt tasks. When an employee who performs the

evaluative functions also performs some or all of these related steps,

all such work (for example, collecting background information,

recording test results, tabulating data, or typing reports) is included

in the employee's exempt duties.

Executive employee means an employee who meets the criteria in

section 551.205 of this part.

Exempt area means any foreign country, or any territory under the

jurisdiction of the United States other than the following locations:

(1) A State of the United States;

(2) The District of Columbia;

(3) Puerto Rico;

(4) The U.S. Virgin Islands;

(5) Outer Continental Shelf Lands as defined in the Outer

Continental Shelf Lands Act (67 Stat. 462);

(6) American Samoa;

(7) Guam;

(8) Midway Atoll;

(9) Wake Island;

(10) Johnston Island; and

(11) Palmyra.

FLSA exempt means not covered by the minimum wage and overtime

provisions of the Act.

FLSA exemption status means an employee's designation by the

employing agency as either FLSA exempt or FLSA nonexempt from the

minimum wage and overtime provisions of the Act.

FLSA exemption status determination claim means a claim from a

current or former employee challenging the correctness of his or her

FLSA exemption status determination.

FLSA nonexempt means covered by the minimum wage and overtime

provisions of the Act.

FLSA overtime pay, for the purpose of Sec. 551.208 of this part,

means overtime pay under this part.

FLSA pay claim means a claim from a current or former employee

concerning his or her entitlement to minimum wage or overtime pay for

work performed under the Act.

Foreign exemption means a provision of the Act under which the

minimum wage, overtime, and child labor provisions of the Act do not

apply to any employee who spends all hours of work in a given workweek

in an exempt area.

Formulation or execution of management programs or policies means

work that involves management programs and policies which range from

broad national goals expressed in statutes or Executive orders to

specific objectives of a small field office. Employees make policy

decisions or participate indirectly, through developing or recommending

proposals that are acted on by others. Employees significantly affect

the execution of management programs or policies typically when the

work involves obtaining compliance with such policies by other

individuals or organizations, within or outside of the Federal

Government, or making significant determinations furthering the

operation of programs and accomplishment of program objectives.

Administrative employees engaged in such work typically perform one or

more phases of program management (that is, planning, developing,

promoting, coordinating, controlling, or evaluating operating programs

of the employing organization or of other organizations subject to

regulation or other controls).

Hours of work means all time spent by an employee performing an

activity for the benefit of an agency and under the control or

direction of the agency. Hours of work are creditable for the purposes

of determining overtime pay under subpart D of this part. Section

551.401 of subpart D further explains this term. However, whether time

is credited as hours of work is determined by considering many factors,

such as the rules in subparts D and E of this part, provisions of law,

Comptroller General decisions, OPM policy guidance, agency policy and

regulations, negotiated agreements, the rules in part 550 of this

chapter (for hours of work for travel), and the rules in part 410 of

this chapter (for hours of work for training).

Management or general business function or supporting service, as

distinguished from production functions, means the work of employees

who provide support to line managers.

(1) These employees furnish such support by--

(i) Providing expert advice in specialized subject matter fields,

such as that provided by management consultants or systems analysts;

(ii) Assuming facets of the overall management function, such as

safety management, personnel management, or budgeting and financial

management;

(iii) Representing management in such business functions as

negotiating and administering contracts, determining acceptability of

goods or services, or authorizing payments; or

[[Page 45069]]

(iv) Providing supporting services, such as automated data

processing, communications, or procurement and distribution of

supplies.

(2) Neither the organizational location nor the number of employees

performing identical or similar work changes general management,

business, or servicing functions into production functions. The work,

however, must involve substantial discretion on matters of enough

importance that the employee's actions and decisions have a noticeable

impact on the effectiveness of the organization advised, represented,

or serviced.

Nonexempt area means any of the following locations:

(1) A State of the United States;

(2) The District of Columbia;

(3) Puerto Rico;

(4) The U.S. Virgin Islands;

(5) Outer Continental Shelf Lands as defined in the Outer

Continental Shelf Lands Act (67 Stat. 462);

(6) American Samoa;

(7) Guam;

(8) Midway Atoll;

(9) Wake Island;

(10) Johnston Island; and

(11) Palmyra.

Participation in the executive or administrative functions of a

management official means the participation of employees, variously

identified as secretaries, administrative or executive assistants,

aides, etc., in portions of the managerial or administrative functions

of a supervisor whose scope of responsibility precludes personally

attending to all aspects of the work. To support exemption, such

employees must be delegated and exercise substantial authority to act

for the supervisor in the absence of specific instructions or

procedures, and take actions which significantly affect the

supervisor's effectiveness.

Perform work in connection with an emergency means to perform work

that is directly related to resolving or coping with an emergency, or

its immediate aftermath, as determined by the employing agency.

Preserve the claim period means to establish the period of possible

entitlement to back pay by filing a written claim with either the

agency employing the claimant during the claim period or with OPM. The

date the agency or OPM receives the claim is the date that determines

the period of possible entitlement to back pay.

Primary duty typically means the duty that constitutes the major

part (over 50 percent) of an employee's work. A duty constituting less

than 50 percent of the work may be credited as the primary duty for

exemption purposes provided that duty--

(1) Constitutes a substantial, regular part of a position;

(2) Governs the classification and qualification requirements of

the position; and

(3) Is clearly exempt work in terms of the basic nature of the

work, the frequency with which the employee must exercise discretion

and independent judgment, and the significance of the decisions made.

Professional employee means an employee who meets the criteria in

section 551.207 of this part.

Reckless disregard of the requirements of the Act means failure to

make adequate inquiry into whether conduct is in compliance with the

Act.

Recognized organizational unit means an established and defined

organizational entity which has regularly assigned employees and for

which a supervisor is responsible for planning and accomplishing a

continuing workload. This distinguishes supervisors from leaders who

head temporary groups formed to perform assignments of limited

duration.

Situations 1 through 4 means the four basic situations described

under Factor I, Nature of Supervisory Responsibility, in the Federal

Wage System Job Grading Standard for Supervisors. The situations depict

successively higher levels of supervisory responsibility and authority

for scheduling work operations, planning use of resources to accomplish

work, directing subordinates in performing work assignments, and

carrying out administrative duties.

Statute of limitations means the time frame within which an FLSA

pay claim must be filed, starting from the date the right accrued. All

FLSA pay claims filed on or after June 30, 1994, are subject to a 2-

year statute of limitations, except in cases of willful violation where

the statute of limitations is 3 years.

Suffered or permitted work means any work performed by an employee

for the benefit of an agency, whether requested or not, provided the

employee's supervisor knows or has reason to believe that the work is

being performed and has an opportunity to prevent the work from being

performed.

Supervisory and closely related work means work that is included in

the calculation of exempt work for supervisory positions.

(1) Work is considered closely related to exempt supervisory work

if it contributes to the effective supervision of subordinate workers,

or the smooth functioning of the unit supervised, or both. Examples of

closely related work include the following:

(i) Maintaining various records pertaining to workload or employee

performance;

(ii) Performing setup work that requires special skills, typically

is not performed by production employees in the occupation, and does

not approach the volume that would justify hiring a specially trained

employee to perform; and

(iii) Performing infrequently recurring or one-time tasks which are

impractical to delegate because they would disrupt normal operations or

take longer to explain than to perform.

(2) Activities in which both workers and supervisors are required

to engage themselves are considered to be closely related to the

primary duty of the position, for example, physical training during

tours of duty for firefighting and law enforcement personnel.

Temporary work or duties means work or duties an employee must

temporarily perform that are not consistent with the employee's

official position description. The period of temporary work or duties

may or may not involve a different geographic duty location.

Title 5 overtime pay, for the purpose of Sec. 551.208 of this part,

means overtime pay under part 550 of this chapter.

Trainee means a person who does not meet the definition of employee

in this section and who is assigned or attached to a Federal activity

primarily for training. A person who attends a training program under

the following conditions is considered a trainee and, therefore, is not

an employee of the Government of the United States for purposes of the

Act:

(1) The training, even though it includes actual operation of the

facilities of the Federal activity, is similar to that given in a

vocational school or other institution of learning;

(2) The training is for the benefit of the individual;

(3) The trainee does not displace regular employees, but, rather,

is supervised by them;

(4) The Federal activity which provides the training derives no

immediate advantage from the activities of the trainee; on occasion its

operations may actually be impeded;

(5) The trainee is not necessarily entitled to a job with the

Federal activity at the completion of the training period; and

(6) The agency and the trainee understand that the trainee is not

entitled to the payment of wages from the agency for the time spent in

training.

Volunteer means a person who does not meet the definition of

employee in this section and who volunteers or

[[Page 45070]]

donates his or her service, the primary benefit of which accrues to the

performer of the service or to someone other than the agency. Under

such circumstances there is neither an expressed nor an implied

compensation agreement. Services performed by such a volunteer include

personal services that, if left unperformed, would not necessitate the

assignment of an employee to perform them.

Willful violation means a violation in circumstances where the

agency knew that its conduct was prohibited by the Act or showed

reckless disregard of the requirements of the Act. All of the facts and

circumstances surrounding the violation are taken into account in

determining whether a violation was willful.

Work of an intellectual nature means work requiring general

intellectual abilities, such as perceptiveness, analytical reasoning,

perspective, and judgment applied to a variety of subject matter

fields, or work requiring mental processes which involve substantial

judgment based on considering, selecting, adapting, and applying

principles to numerous variables. The employee cannot rely on

standardized application of established procedures or precedents, but

must recognize and evaluate the effect of a continual variety of

conditions or requirements in selecting, adapting, or innovating

techniques and procedures, interpreting findings, and selecting and

recommending the best alternative from among a broad range of possible

actions.

Work of a specialized or technical nature means work which requires

substantial specialized knowledge of a complex subject matter and of

the principles, techniques, practices, and procedures associated with

that subject matter field. This knowledge characteristically is

acquired through considerable on-the-job training and experience in the

specialized subject matter field, as distinguished from professional

knowledge characteristically acquired through specialized academic

education.

Workday means the period between the commencement of the principal

activities that an employee is engaged to perform on a given day and

the cessation of the principal activities for that day. The term is

further explained in Sec. 551.411 of this part.

Worktime, for the purpose of determining FLSA exemption status,

means time spent actually performing work. This excludes periods of

time during which an employee performs no work, such as standby time,

sleep time, meal periods, and paid leave.

Worktime in a representative workweek means the average percentages

of worktime over a period long enough to even out normal fluctuations

in workloads and be representative of the job as a whole.

Workweek means a fixed and recurring period of 168 hours--seven

consecutive 24-hour periods. It need not coincide with the calendar

week but may begin on any day and at any hour of a day. For employees

subject to part 610 of this chapter, the workweek shall be the same as

the administrative workweek defined in Sec. 610.102 of this chapter.

Workweek basis means the unit of time used as the basis for

applying overtime standards under the Act and, for employees under

flexible or compressed work schedules, under 5 U.S.C. 6121(6) or (7).

The Act takes a single workweek as its standard and does not permit

averaging of hours over two or more weeks, except for employees engaged

in fire protection or law enforcement activities under section 7(k) of

the Act.

3. Subpart B is revised to read as follows:

Subpart B--Exemptions and Exclusions

Sec.

551.201 Agency authority.

551.202 General principles governing exemptions.

551.203 Exemption of General Schedule employees.

551.204 Exemption of Federal Wage System employees.

551.205 Executive exemption criteria.

551.206 Administrative exemption criteria.

551.207 Professional exemption criteria.

551.208 Effect of performing temporary work or duties on FLSA

exemption status.

551.209 Foreign exemption criteria.

551.210 Exemption of employees receiving availability pay.

551.211 Statutory exclusion.

Subpart B--Exemptions and Exclusions

Sec. 551.201 Agency authority.

All employees are presumed to be FLSA nonexempt unless the

employing agency makes a determination that the position meets one or

more of the exemption criteria of this subpart. The employing agency

must exempt from the overtime provisions of the Act any employee who

meets the exemption criteria of this subpart and such supplemental

interpretations or instructions issued by OPM.

Sec. 551.202 General principles governing exemptions.

In all exemption determinations, the agency must observe the

following principles:

(a) Exemption criteria must be narrowly construed to apply only to

those employees who are clearly within the terms and spirit of the

exemption.

(b) The burden of proof rests with the agency that asserts the

exemption.

(c) All employees who clearly meet the criteria for exemption must

be designated FLSA exempt. If there is a reasonable doubt as to whether

an employee meets the criteria for exemption, the employee should be

designated FLSA nonexempt.

(d) There are groups of General Schedule employees who are FLSA

nonexempt because they do not fit any of the exemption categories.

These groups include the following:

(1) Nonsupervisory General Schedule employees in equipment

operating and protective occupations, and most clerical occupations

(see the definition of participation in the executive or administrative

functions of a management official in subpart A of this part);

(2) Nonsupervisory General Schedule employees performing technician

work in positions properly classified below GS-9 (or the equivalent

level in other white-collar pay systems) and many, but not all, of

those positions properly classified at GS-9 or above (or the equivalent

level in other white-collar pay systems); and

(3) Nonsupervisory General Schedule employees at any grade level in

occupations requiring highly specialized technical skills and

knowledges that can be acquired only through prolonged job training and

experience, such as the Air Traffic Control series, GS-2152, or the

Aircraft Operations series, GS-2181, unless such employees are

performing predominantly administrative functions rather than the

technical work of the occupation.

(e) Although separate criteria are provided for the exemption of

executive, administrative, and professional employees, those categories

are not mutually exclusive. All exempt work, regardless of category,

must be considered. The only restriction is that, when the requirements

of one category are more stringent, the combination of exempt work must

meet the more stringent requirements.

(f) Failure to meet the criteria for exemption under what might

appear to be the most appropriate criteria does not preclude exemption

under another category. For example, an engineering technician who

fails to meet the professional exemption criteria may be performing

exempt administrative work, or an administrative officer who fails to

[[Page 45071]]

meet the administrative criteria may be performing exempt executive

work.

(g) Although it is normally feasible and more convenient to

identify the exemption category, this is not essential. An exemption

may be based on a combination of functions, no one of which constitutes

the primary duty, or the employee's primary duty may involve two

categories which are intermingled and difficult to segregate. This does

not preclude exempting the employee, provided the work as a whole

clearly meets the other exemption criteria.

(h) The designation of an employee as FLSA exempt or nonexempt

ultimately rests on the duties actually performed by the employee.

Sec. 551.203 Exemption of General Schedule employees.

(a) GS-4 or below. Any employee in a position properly classified

at GS-4 or below (or the equivalent level in other white-collar pay

systems) is nonexempt, unless the employee is subject to the foreign

exemption in Sec. 551.209.

(b) GS-5 or above. Any employee in a position properly classified

at GS-5 or above (or the equivalent level in other white-collar pay

systems) is exempt only if the employee is an executive,

administrative, or professional employee as defined in this subpart,

unless the employee is subject to Sec. 551.208 (the effect of

performing temporary work or duties on FLSA exemption status) or

Sec. 551.209 (the foreign exemption).

Sec. 551.204 Exemption of Federal Wage System employees.

(a) Nonsupervisory. A nonsupervisory employee in the Federal Wage

System or under other comparable wage systems is nonexempt, unless the

employee is subject to Sec. 551.208 (the effect of performing temporary

work or duties on FLSA exemption status) or Sec. 551.209 (the foreign

exemption).

(b) Supervisory. A supervisory employee in the Federal Wage System

or under other comparable wage systems is exempt only if the employee

is an executive employee as defined in Sec. 551.205, unless the

employee is subject to Sec. 551.208 (the effect of performing temporary

work or duties on FLSA exemption status) or Sec. 551.209 (the foreign

exemption).

Sec. 551.205 Executive exemption criteria.

An executive employee is a supervisor or manager who manages a

Federal agency or any subdivision thereof (including the lowest

recognized organizational unit with a continuing function) and

customarily and regularly directs the work of subordinate employees and

meets both of the following criteria:

(a) Primary duty test. The primary duty test is met if the

employee--

(1) Has authority to make personnel changes that include, but are

not limited to, selecting, removing, advancing in pay, or promoting

subordinate employees, or has authority to suggest or recommend such

actions with particular consideration given to these suggestions and

recommendations; and

(2) Customarily and regularly exercises discretion and independent

judgment in such activities as work planning and organization; work

assignment, direction, review, and evaluation; and other aspects of

management of subordinates, including personnel administration.

(b) 80-percent test. In addition to the primary duty test that

applies to all employees, the following employees must spend 80 percent

or more of the worktime in a representative workweek on supervisory and

closely related work to meet the 80-percent test:

(1) Employees in positions properly classified in the General

Schedule at GS-5 or GS-6 (or the equivalent level in other white-collar

pay systems);

(2) Firefighting or law enforcement employees in positions properly

classified in the General Schedule at GS-7, GS-8, or GS-9 who are

subject to section 207(k) of title 29, United States Code; and

(3) Supervisors in positions properly classified in the Federal

Wage System below situation 3 of Factor I of the Federal Wage System

Job Grading Standard for Supervisors (or the equivalent level in other

comparable wage systems).

Sec. 551.206 Administrative exemption criteria.

An administrative employee is an advisor or assistant to

management, a representative of management, or a specialist in a

management or general business function or supporting service and meets

all four of the following criteria:

(a) Primary duty test. The primary duty test is met if the

employee's work--

(1) Significantly affects the formulation or execution of

management programs or policies; or

(2) Involves general management or business functions or supporting

services of substantial importance to the organization serviced; or

(3) Involves substantial participation in the executive or

administrative functions of a management official.

(b) Nonmanual work. The employee performs office or other

predominantly nonmanual work which is--

(1) Intellectual and varied in nature; or

(2) Of a specialized or technical nature that requires considerable

special training, experience, and knowledge.

(c) Discretion and independent judgment. The employee frequently

exercises discretion and independent judgment, under only general

supervision, in performing the normal day-to-day work.

(d) 80-percent test. In addition to the primary duty test that

applies to all employees, General Schedule employees in positions

properly classified at GS-5 or GS-6 (or the equivalent level in other

white-collar pay systems) must spend 80 percent or more of the worktime

in a representative workweek on administrative functions and work that

is an essential part of those functions to meet the 80-percent test.

Sec. 551.207 Professional exemption criteria.

A professional employee is an employee who meets all of the

following criteria, or any teacher who is engaged in the imparting of

knowledge or in the administration of an academic program in a school

system or educational establishment.

(a) Primary duty test. The primary duty test is met if the

employee's work consists of--

(1) Work that requires knowledge in a field of science or learning

customarily and characteristically acquired through education or

training that meets the requirements for a bachelor's or higher degree,

with major study in or pertinent to the specialized field as

distinguished from general education; or is performing work, comparable

to that performed by professional employees, on the basis of

specialized education or training and experience which has provided

both theoretical and practical knowledge of the specialty, including

knowledge of related disciplines and of new developments in the field;

or

(2) Work in a recognized field of artistic endeavor that is

original or creative in nature (as distinguished from work which can be

produced by a person endowed with general manual or intellectual

ability and training) and the result of which depends on the invention,

imagination, or talent of the employee; or

(3) Work that requires theoretical and practical application of

highly-specialized knowledge in computer systems, analysis,

programming, and software engineering or other similar work in the

computer software field.

[[Page 45072]]

The work must consist of one or more of the following:

(i) The application of systems analysis techniques and procedures,

including consulting with users, to determine hardware, software, or

system functional specifications; or

(ii) The design, development, documentation, analysis, creation,

testing, or modification of computer systems or programs, including

prototypes, based on and related to user or system design

specifications; or

(iii) The design, documentation, testing, creation, or modification

of computer programs related to machine operating systems; or

(iv) A combination of the duties described in paragraphs (a)(3)(i),

(3)(ii), and (3)(iii) of this section, the performance of which

requires the same level of skills.

(b) Intellectual and varied in nature. The employee's work is

predominantly intellectual and varied in nature, requiring creative,

analytical, evaluative, or interpretative thought processes for

satisfactory performance.

(c) Discretion and independent judgment. The employee frequently

exercises discretion and independent judgment, under only general

supervision, in performing the normal day-to-day work.

(d) 80-percent test. In addition to the primary duty test that

applies to all employees, General Schedule employees in positions

properly classified at GS-5 or GS-6 (or the equivalent level in other

white-collar pay systems), must spend 80 percent or more of the

worktime in a representative workweek on professional functions and

work that is an essential part of those functions to meet the 80-

percent test.

Sec. 551.208 Effect of performing temporary work or duties on FLSA

exemption status.

(a) Applicability.--(1) When applicable. This section applies only

when an employee must temporarily perform work or duties that are not

consistent with the employee's official position description. The

period of temporary work or duties may or may not involve a different

geographic duty location. The FLSA exemption status of employees during

a period of temporary work or duties must be determined as described in

this section.

(2) When not applicable. This section does not apply when an

employee is detailed to an identical additional position as the

employee's position or to a position of the same grade, series code,

basic duties, and FLSA exemption status as the employee's position.

(b) Effect on nonexempt employees. (1) A nonexempt employee who

must temporarily perform work or duties that are not consistent with

the employee's official position description remains nonexempt for the

entire period of temporary work or duties unless all three of the

following conditions are met:

(i) 30-day test. The period of temporary work or duties exceeds 30

days; and

(ii) Exempt work or duty. The employee's primary duty for the

period of temporary work or duties is exempt work or duty as defined in

this part; and

(iii) Positions at GS-7 or above, or at situations 3 or 4. The

employee's position (including a position to which the employee is

temporarily promoted) is properly classified in the General Schedule at

GS-7 or above (or the equivalent level in other white-collar pay

systems) or properly classified in the Federal Wage System as a

supervisor at situation 3 or 4 of Factor I of the Federal Wage System

Job Grading Standard for Supervisors (or the equivalent level in other

comparable wage systems).

(2) If a nonexempt employee becomes exempt under the criteria in

paragraph (b)(1) of this section--

(i) The employee must be considered exempt for the entire period of

temporary work or duties; and

(ii) If the employee received FLSA overtime pay for work performed

during the first 30 days of the temporary work or duties, the agency

must recalculate the employee's total pay retroactive to the beginning

of that period because the employee is now not entitled to the FLSA

overtime pay received but may be owed title 5 overtime pay.

(c) Effect on exempt employees. (1) An exempt employee not covered

by the special provision of paragraph (c)(3) of this section who must

temporarily perform work or duties that are not consistent with the

employee's official position description remains exempt for the entire

period of temporary work or duties unless all three of the following

conditions are met:

(i) 30-day test. The period of temporary work or duties exceeds 30

days; and

(ii) Not exempt work. The employee's primary duty for the period of

temporary work or duties is not exempt work or duty as defined in this

part; and

(iii) Positions at GS-7 or above, or at situation 3 or 4. The

employee's position (including a position to which the employee is

temporarily promoted) is properly classified in the General Schedule at

GS-7 or above (or the equivalent level in other white-collar pay

systems) or properly classified in the Federal Wage System as a

supervisor at situation 3 or 4 of Factor I of the Federal Wage System

Job Grading Standard for Supervisors (or the equivalent level in other

comparable wage systems).

(2) If an exempt employee becomes nonexempt under the criteria in

paragraph (c)(1) of this section--

(i) The employee must be considered nonexempt for the entire period

of temporary work or duties; and

(ii) If the employee received title 5 overtime pay for work

performed during the first 30 days of the temporary work or duties, the

agency must recalculate the employee's total pay retroactive to the

beginning of that period because the employee may now not be entitled

to some or all of the title 5 overtime pay received but may be owed

FLSA overtime pay.

(3) Special provision for exempt employees at GS-5 or GS-6, or

below situation 3: The exemption status of certain exempt employees who

must temporarily perform work or duties that are not consistent with

their official position description must be determined on a workweek

basis for the period of temporary work or duties. Such employees are

exempt employees whose positions (including a position to which the

employee is temporarily promoted) are properly classified in the

General Schedule at GS-5 or GS-6 (or the equivalent level in other

white-collar pay systems), or are properly classified in the Federal

Wage System below situation 3 of Factor I of the Federal Wage System

Job Grading Standard for Supervisors (or the equivalent level in other

comparable wage systems). The exemption status determination of these

employees will result in the employee either remaining exempt or

becoming nonexempt for that workweek, as described in paragraphs

(c)(3)(i) and (c)(3)(ii) of this section.

(i) Remain exempt. An exempt employee remains exempt for a given

workweek only if the employee performs exempt work or duties for 80

percent or more of the worktime in that workweek.

(ii) Become nonexempt. An exempt employee becomes nonexempt for a

given workweek only if the employee performs nonexempt work or duties

for more than 20 percent of the worktime in that workweek.

(d) Emergency situation. Notwithstanding any other provisions of

this section, and regardless of an employee's grade level, the agency

may determine that an emergency situation exists that directly

threatens human life or safety, serious damage to property, or serious

disruption to the operations of an activity, and there is no recourse

[[Page 45073]]

other than to assign qualified employees to temporarily perform work or

duties in connection with the emergency. In such a designated

emergency--

(1) The exemption status of a nonexempt employee remains nonexempt

whether the employee performs nonexempt work or exempt work during the

emergency; and

(2) The exemption status of an exempt employee must be determined

on a workweek basis. The exemption status determination of exempt

employees will result in the employee either remaining exempt or

becoming nonexempt for that workweek, as described in paragraphs

(d)(2)(i) and (d)(2)(ii) of this section.

(i) Remain exempt. An exempt employee remains exempt for any

workweek in which the employee performs exempt work or duties for 80

percent or more of the worktime in a given workweek.

(ii) Become nonexempt. An exempt employee becomes nonexempt for any

workweek in which the employee performs nonexempt work or duties for

more than 20 percent of the worktime in a given workweek.

Sec. 551.209 Foreign exemption criteria.

(a) Application. When the foreign exemption applies, the minimum

wage, overtime, and child labor provisions of the Act do not apply to

any employee who spends all hours of work in a given workweek in an

exempt area. When an employee meets one of the two criteria in

paragraph (b) of this section, the foreign exemption applies until the

employee spends any hours of work in any nonexempt area as defined in

Sec. 551.102 of this part.

(b) Foreign exemption applies. If an employee meets one of the two

following criteria, the employee is subject to the foreign exemption of

the Act and the minimum wage, overtime, and child labor provisions of

the Act do not apply.

(1) The employee is permanently stationed in an exempt area and

spends all hours of work in a given workweek in one or more exempt

areas; or

(2) The employee is not permanently stationed in an exempt area,

but spends all hours of work in a given workweek in one or more exempt

areas.

(c) Foreign exemption does not apply. For any given workweek, the

minimum wage, overtime, and child labor provisions of the Act apply to

an employee permanently stationed in an exempt area who spends any

hours of work in any nonexempt area. For that workweek, the employee is

not subject to the foreign exemption, and the agency must determine the

exemption status of such an employee as described paragraphs (c)(1) and

(c)(2) of this section. The foreign exemption does not resume until the

employee again meets one of the criteria in paragraph (b) of this

section.

(1) Same duties. If the duties performed during that workweek are

consistent with the employee's official position description, the

agency must designate the employee the same FLSA exemption status as if

the employee were permanently stationed in any nonexempt area.

(2) Different duties. If the duties performed during that workweek

are not consistent with the employee's official position description--

(i) The agency must first designate the employee the same FLSA

exemption status as the employee would have been designated based on

the duties included in the employee's official position description if

the employee were permanently stationed in any nonexempt area; and

(ii) The agency must determine the employee's exemption status for

that workweek by applying Sec. 551.208.

(d) Resumption of foreign exemption. When an employee returns to

any exempt area from performing any hours of work in any nonexempt

area, the employee is not subject to the foreign exemption until the

employee meets one of the criteria in paragraph (b) of this section.

Sec. 551.210 Exemption of employees receiving availability pay.

The following employees are exempt from the hours of work and

overtime pay provisions of the Act:

(a) A criminal investigator receiving availability pay under

section 550.181 of this chapter; and

(b) A pilot employed by the United States Customs Service who is a

law enforcement officer as defined in section 5541(3) of title 5,

United States Code, and who receives availability pay under section

5545a(i) of title 5, United States Code.

Sec. 551.211 Statutory exclusion.

Customs officers whose exclusive entitlement to overtime pay is

governed by section 5 of the Act of Feb. 13, 1911, as amended (19

U.S.C. 261 and 267), are excluded from the hours of work and overtime

pay provisions of the FLSA. As used in section 5, the term ``customs

officer'' means a customs inspector, a supervisory customs inspector, a

canine enforcement officer, or a supervisory canine enforcement

officer.

4. Subpart F is added to read as follows:

Subpart F--Child Labor

Sec.

551.601 Minimum age standards.

551.602 Responsibilities.

Subpart F--Child Labor

Sec. 551.601 Minimum age standards.

(a) 16-year minimum age. The Act, in section 3(l), sets a general

16-year minimum age, which applies to all employment subject to its

child labor provisions, with certain exceptions not applicable here.

(b) 18-year minimum age. The Act, in section 3(1), also sets an 18-

year minimum age with respect to employment in any occupation found and

declared by the Secretary of Labor to be particularly hazardous for the

employment of minors of such age or detrimental to their health or

well-being.

Sec. 551.602 Responsibilities.

(a) Agencies must remain cognizant of and abide by regulations and

orders published by the Secretary of Labor regarding the employment of

individuals under the age of 18 years. These regulations and orders

govern the minimum age at which persons under the age of 18 years may

be employed and the occupations in which they may be employed. Persons

under the age of 18 years must not be employed in occupations or engage

in work deemed hazardous by the Secretary of Labor.

(b) OPM will decide claims concerning the employment of persons

under the age of 18 years. Claims must be filed following the

procedures set forth in subpart G of this part.

5. Subpart G is added to read as follows:

Subpart G--FLSA Claims and Compliance

Sec.

551.701 Applicability.

551.702 Time limits.

551.703 Avenues of review.

551.704 Claimant's representative.

551.705 Form and content of an FLSA claim.

551.706 Responsibilities.

551.707 Withdrawal or denial of an FLSA claim.

551.708 Finality and effect of OPM FLSA claim decision.

551.709 Availability of information.

551.710 Where to file an FLSA claim with OPM.

Subpart G--FLSA Claims and Compliance

Sec. 551.701 Applicability.

(a) Applicable. This subpart applies to FLSA exemption status

determination claims, FLSA pay claims for minimum wage or overtime pay

for work performed under the Act, and claims

[[Page 45074]]

arising under the child labor provisions of the Act.

(b) Not applicable. This subpart does not apply to claims or

complaints arising under the equal pay provisions of the Act. The equal

pay provisions of the Act are administered by the Equal Employment

Opportunity Commission.

Sec. 551.702 Time limits.

(a) Claims. A claimant may file an FLSA claim at any time under the

child labor provisions of the Act or challenging the correctness of his

or her FLSA exemption status determination. A claimant may also file an

FLSA claim concerning his or her entitlement to minimum wage or

overtime pay for work performed under the Act; however, time limits

apply to FLSA pay claims. All FLSA pay claims filed on or after June

30, 1994, are subject to a 2-year statute of limitations (3 years for

willful violations).

(b) Statute of limitations. An FLSA pay claim filed on or after

June 30, 1994, is subject to the statute of limitations contained in

the Portal-to-Portal Act of 1947, as amended (section 255a of title 29,

United States Code), which imposes a 2-year statute of limitations,

except in cases of a willful violation where the statute of limitations

is 3 years. In deciding a claim, a determination must be made as to

whether the cause or basis of the claim was the result of a willful

violation on the part of the agency.

(c) Preserving the claim period. A claimant or a claimant's

designated representative may preserve the claim period by submitting a

written claim either to the agency employing the claimant during the

claim period or to OPM. The date the agency or OPM receives the claim

is the date that determines the period of possible entitlement to back

pay. The claimant is responsible for proving when the claim was

received by the agency or OPM. The claimant should retain documentation

to establish when the claim was received by the agency or OPM, such as

by filing the claim using certified, return receipt mail, or by

requesting that the agency or OPM provide written acknowledgment of

receipt of the claim. If a claim for back pay is established, the

claimant will be entitled to pay for a period of up to 2 years (3 years

for a willful violation) back from the date the claim was received.

Sec. 551.703 Avenues of review.

(a) Negotiated grievance procedure (NGP) as exclusive

administrative remedy. If at any time during the claim period, a

claimant was a member of a bargaining unit covered by a collective

bargaining agreement that did not specifically exclude matters under

the Act from the scope of the negotiated grievance procedure, the

claimant must use that negotiated grievance procedure as the exclusive

administrative remedy for all claims under the Act. There is no right

to further administrative review by the agency or by OPM. The remaining

sections in this subpart (that is, Secs. 551.704 through 551.711) do

not apply to such employees.

(b) Non-NGP administrative review by agency or OPM. A claimant may

file a claim with the agency employing the claimant during the claim

period or with OPM regarding matters arising under the Act if, during

the entire claim period, the claimant--

(1) Was not a member of a bargaining unit, or

(2) Was a member of a bargaining unit not covered by a collective

bargaining agreement, or

(3) Was a member of a bargaining unit covered by a collective

bargaining agreement that specifically excluded matters under the Act

from the scope of the negotiated grievance procedure.

(c) Judicial review. Nothing in this subpart limits the right of a

claimant to bring an action in an appropriate United States court. OPM

will not decide an FLSA claim that is in litigation.

Sec. 551.704 Claimant's representative.

A claimant may designate a representative to assist in preparing or

presenting a claim. The claimant must designate the representative in

writing. A representative has no right to participate in OPM fact-

finding. An agency may disallow a claimant's representative who is a

Federal employee in any of the following circumstances:

(a) When the individual's activities as a representative would

cause a conflict of interest or position;

(b) When the designated representative cannot be released from his

or her official duties because of the priority needs of the Government;

or

(c) When the release of the designated representative would give

rise to unreasonable costs to the Government.

Sec. 551.705 Form and content of an FLSA claim.

(a) FLSA claim filed with agency. An FLSA claim filed with an

agency should be made according to appropriate agency procedures. At

the discretion of the agency, the agency may forward the claim to OPM

on the claimant's behalf. The claimant is responsible for ensuring that

OPM receives all the information requested in paragraph (b) of this

section.

(b) FLSA claim filed with OPM. An FLSA claim filed with OPM must be

made in writing and must be signed by the claimant or the claimant's

representative. Relevant information may be submitted to OPM at any

time following the initial submission of a claim to OPM and prior to

OPM's decision on the claim. The claim must include the following:

(1) The identity of the claimant (see Sec. 551.706(a)(2) regarding

requesting confidentiality) and any designated representative, the

agency employing the claimant during the claim period, the position

(job title, series, and grade) occupied by the claimant during the

claim period, and the current mailing address, commercial telephone

number, and facsimile machine number, if available, of the claimant and

any designated representative;

(2) A description of the nature of the claim and the specific

issues or incidents giving rise to the claim, including the time period

covered by the claim;

(3) A description of actions taken by the claimant to resolve the

claim within the agency and the results of any actions taken;

(4) A copy of any relevant decision or written response by the

agency;

(5) Evidence available to the claimant or the claimant's designated

representative which supports the claim, including the identity,

commercial telephone number, and location of other individuals who may

be able to provide information relating to the claim;

(6) The remedy sought by the claimant;

(7) Evidence, if available, that the claim period was preserved in

accordance with Sec. 551.702. The date the claim is received by the

agency or OPM becomes the date on which the claim period is preserved;

(8) A statement from the claimant that he or she was or was not a

member of a collective bargaining unit at any time during the claim

period;

(9) If the claimant was a member of a bargaining unit, a statement

from the claimant that he or she was or was not covered by a negotiated

grievance procedure at any time during the claim period, and if

covered, whether that procedure specifically excluded the claim from

the scope of the negotiated grievance procedure;

(10) A statement from the claimant that he or she has or has not

filed an action in an appropriate United States court; and

(11) Any other information that the claimant believes OPM should

consider.

[[Page 45075]]

Sec. 551.706 Responsibilities.

(a) Claimant.-- (1) Providing information to OPM. For all FLSA

claims, the claimant or claimant's designated representative must

provide any additional information requested by OPM within 15 workdays

after the date of the request, unless OPM grants a longer period of

time in which to provide the requested information. The disclosure of

information by a claimant is voluntary. However, OPM may be unable to

render a decision on a claim without the information requested. In such

a case, the claim will be denied without further action being taken by

OPM. In the case of an FLSA pay claim, it is the claimant's

responsibility to provide evidence that the claim period was preserved

in accordance with Sec. 551.702 and of the liability of the agency and

the claimant's right to payment.

(2) Requesting confidentiality. If the claimant wishes the claim to

be treated confidentially, the claim must specifically request that the

identity of the claimant not be revealed to the agency. Witnesses or

other sources may also request confidentiality. OPM will make every

effort to conduct its investigation in a way to maintain

confidentiality. If OPM is unable to obtain sufficient information to

render a decision and preserve the requested confidentiality, OPM will

notify the claimant that the claim will be denied with no further

action by OPM unless the claimant voluntarily provides written

authorization for his or her name to be revealed.

(b) Agency. (1) In FLSA exemption status determination claims, the

burden of proof rests with the agency that asserts the FLSA exemption.

(2) The agency must provide the claimant with a written

acknowledgment of the date the claim was received.

(3) The agency must provide any information requested by OPM within

15 workdays after the date of the request, unless OPM grants a longer

period of time in which to provide the requested information.

Sec. 551.707 Withdrawal or denial of an FLSA claim.

(a) Withdrawal. A claimant or the claimant's representative may

withdraw a claim at any time prior to the issuance of an OPM FLSA claim

decision by providing written notice to the OPM office where the claim

was filed.

(b) Denial. OPM may, at its discretion, deny an FLSA claim if the

claimant or the claimant's designated representative fails to provide

requested information within 15 workdays after the date of the request,

unless OPM grants a longer period of time in which to provide the

requested information. OPM may, at its discretion, reconsider a denied

claim on a showing that circumstances beyond the claimant's control

prevented pursuit of the claim.

Sec. 551.708 Finality and effect of OPM FLSA claim decision.

OPM will send an FLSA claim decision to the claimant or the

claimant's representative and the agency. An FLSA claim decision made

by OPM is final. There is no further right of administrative appeal. At

its discretion, OPM may reconsider a decision upon a showing that

material information was not considered or there was a material error

of law, regulation, or fact in the original decision. A decision by OPM

under the Act is binding on all administrative, certifying, payroll,

disbursing, and accounting officials of agencies for which OPM

administers the Act. Upon receipt of a decision, the agency employing

the claimant during the claim period must take all necessary steps to

comply with the decision, including adherence with compliance

instructions provided with the decision. All compliance actions must be

completed within the time specified in the decision, unless an

extension of time is requested by the agency and granted by OPM. The

agency should identify all similarly situated current and, to the

extent possible, former employees, ensure that they are treated in a

manner consistent with the decision, and inform them in writing of

their right to file an FLSA claim with the agency or OPM.

Sec. 551.709 Availability of information.

(a) Except when the claimant has requested confidentiality, the

agency and the claimant must provide to each other a copy of all

information submitted with respect to the claim.

(b) When a claimant has not requested confidentiality, OPM will

disclose to the parties concerned the information contained in an FLSA

claim file. When a claimant has requested confidentiality, OPM will

delete any information identifying the claimant. For the purposes of

this subpart, the parties concerned means the claimant, any

representative designated in writing, and any representative of the

agency or OPM involved in the proceeding.

(c) Except when the claimant has requested confidentiality or the

disclosure would constitute a clearly unwarranted invasion of personal

privacy, OPM, upon a request which identifies the individual from whose

file the information is sought, will disclose the following information

from a claim file to a member of the public:

(1) Confirmation of the name of the individual from whose file the

information is sought and the names of the other parties concerned;

(2) The remedy sought;

(3) The status of the claim;

(4) The decision on the claim; and

(5) With the consent of the parties concerned, other reasonably

identified information from the file.

Sec. 551.710 Where to file an FLSA claim with OPM.

An FLSA claim must be filed with the OPM office serving the area

where the cause or basis of the claim occurred. Following are OPM

addresses and service areas.

OPM Atlanta Oversight Division

75 Spring Street SW., Suite 972, Atlanta, GA 30303-3109.

Alabama, Florida, Georgia, Mississippi, North Carolina, South

Carolina, Tennessee, Virginia (except the Virginia locations listed

under the Washington, DC Oversight Division).

OPM Chicago Oversight Division

230 S. Dearborn Street, DPN 30-6, Chicago, IL 60604-1687.

Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota,

Missouri, Nebraska, North Dakota, Ohio, South Dakota, West Virginia,

Wisconsin.

OPM Dallas Oversight Division

1100 Commerce Street, Room 4C22, Dallas, TX 75242-9968.

Arizona, Arkansas, Colorado, Louisiana, Montana, New Mexico,

Oklahoma, Texas, Utah, Wyoming.

OPM Philadelphia Oversight Division

600 Arch Street, Room 3400, Philadelphia, PA 19106-1596.

Connecticut, Delaware, Maine, Maryland (except the Maryland

locations listed under the Washington, DC Oversight Division),

Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania,

Rhode Island, Vermont, Puerto Rico, Virgin Islands.

OPM San Francisco Oversight Division

120 Howard Street, Room 760, San Francisco, CA 94105-0001.

Alaska, California, Hawaii, Idaho, Nevada, Oregon, Washington,

Pacific Ocean Area

OPM Washington, DC Oversight Division

1900 E Street NW., Room 7675, Washington, DC 20415-0001.

The District of Columbia

In Maryland: the counties of Charles, Montgomery, and Prince

George's.

In Virginia: the counties of Arlington, Fairfax, King George,

Loudoun, Prince William, and Stafford; the cities of Alexandria,

Fairfax, Falls Church, Manassas, and Manassas Park; and any overseas

area

[[Page 45076]]

not listed in the service area of another Oversight division.

[FR Doc. 97-22390 Filed 8-22-97; 8:45 am]

BILLING CODE 6325-01-P