Pay Administration Under the Fair Labor Standards Act

SUMMARY: The U.S. Office of Personnel Management (OPM) amends the pay

administration under the Fair Labor Standards Act (referred to as ``the

Act'' or ``FLSA'') rules. We made text clearer, standardized terms,

changed to the active voice, reorganized material for added clarity,

inserted or revised headings to reflect content accurately, reduced

internal cross-referencing, corrected typographical, punctuation, and

grammatical errors, and used ``plain English.'' We included guidance

published in the sunsetted Federal Personnel Manual, added certain work

in the computer software field to the professional exemption criteria,

added an exemption for certain pilots, added the statutory exclusion of

customs officers, and included regulations on child labor and claims

and compliance.

DATES: Effective December 23, 1997.

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: We received 15 submissions:

1 was from an individual and was not a comment;

4 were from individuals;

5 were from 3 agencies (3 were from 1 agency);

4 were from 5 labor organizations (1 was submitted jointly by 2 labor

organizations); and

1 was from the Office of Compliance in the Legislative Branch.

General Comments

We inserted the word ``comparable'' after the word ``other'' in the

phrase ``other white collar'' throughout the text to make the wording

consistent.

An individual commended the clarity of the supplementary

information introducing the proposed regulations as particularly

intelligible.

Another individual suggested that the modified or added portions of

the regulation published in the Code of Federal Regulations be shown in

bold face. This cannot be done in the Federal Register. However, we

will post on the OPM web site (www.opm.gov) a version of the final

regulations in which changed or added material is shown in bold face.

Individuals who do not have Internet access may request a copy by

calling 202-606-2990 or by sending a request by e-mail to

[email protected]

One labor organization commented that it was not clear which

portions of part 551 of title 5, Code of Federal Regulations, the

proposed regulations amended. Subparts A and B are amended and subparts

F and G are added. This final rule does not amend subparts C, D, or E.

The same labor organization pointed out that, in its opinion, many

Federal employees are wrongfully denied FLSA overtime pay and

recommended three guiding principles to address this problem.

First, an agency should not declare an employee to be exempt if

there is reasonable doubt about whether an employee meets any exemption

criteria.

Second, OPM's regulations should be designed to reduce ambiguity,

thereby reducing the chances that agencies will incorrectly determine

an employee to be FLSA exempt.

Third, OPM's regulations pertaining to exemptions should be

consistent with the Department of Labor's administration of the Act and

should not be susceptible to a more expansive interpretation than

comparable Department of Labor regulations.

We believe the proposed regulations published on August 25, 1997,

adequately addressed these concerns. Nonetheless, we kept these

suggested principles in mind as we made revisions. For example,

sections 551.201 and 551.202 in particular emphasize that an employee

is presumed to be nonexempt unless the agency correctly determines that

the work the employee performs clearly meets one or more of the

exemption criteria.

Another labor organization asserted that the ``salary basis test''

that is included in the Department of Labor's FLSA regulations is

applicable to Federal employees for whom OPM administers the Act.

The Department of Labor has determined that such tests do not apply

to public employees (see section 541.5d of title 29, Code of Federal

Regulations).

1. Section 551.102--Authority and Administration

The Office of Compliance in the Legislative Branch stated that

OPM's description of its responsibilities was inaccurate in three

respects.

First, the proposed regulations imply that the nine listed

employing entities and their employees are covered by the FLSA.

However, the employees of these entities are not included in the

definition of ``employee'' under section 3(e)(2) of the Act. The

Congressional Accountability Act of 1995 extends the rights and

protections of the FLSA to the employees of these entities, so it is

the Accountability Act, not the FLSA, that actually applies.

Second, the proposed regulations state that the Office of

Compliance administers the law for the listed entities. However, while

the Office of Compliance is assigned certain administrative

responsibilities under the Accountability Act, that Act does not

authorize the Office of Compliance to administer the law, as section

4(f) of the FLSA authorizes OPM to administer the FLSA.

Third, the proposed regulations refer to the Office of Technology

Assessment. While it is included in the Accountability Act, the Office

of Technology Assessment no longer exists and therefore should not be

included in a description of the responsibilities of the Office of

Compliance.

In response to these comments, we deleted the introductory language

of proposed paragraph (d) and substituted in its place the language

provided by the Office of Compliance to describe its responsibilities.

We deleted proposed paragraph (d)(9) to omit mention of the Office of

Technology Assessment.

2. Section 551.103--Coverage

An agency requested that the proposed regulations be amended to

reflect that members of the Uniformed Services are not covered by the

FLSA and ensuing regulations.

There are seven Uniformed Services. The four Uniformed Services

that comprise the Military Departments include the United States Army,

United States Navy, United States Marines, and the United States Air

Force. Additionally, three of the Uniformed Services are in Executive

Departments. The United States Coast Guard is in the Department of

Transportation. The Commissioned Corps of the National Oceanic and

Atmospheric Administration is in the Department of Commerce. The

Commissioned Corps of the Public Health Service is in the Department of

Health and Human Services.

Members of the Uniformed Services are not considered employees as

defined in section 2105 of title 5, United States Code, or other

statutes that address the pay, benefits, and duties of Federal

employees. Further, officers of the

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Uniformed Services are appointed by the President and, in many cases,

by and with the consent of the Senate. The pay and benefits of members

of the Uniformed Services are controlled by the provisions of title 37,

United States Code.

Officers of the Uniformed Services are appointed to serve when and

where needed to meet the needs of their respective Services. Therefore,

rules regarding workweek requirements in the current and proposed

regulations are inapplicable to members of all Uniformed Services.

We adopted the agency's recommendation. In proposed paragraph

(a)(2), we inserted the words ``a civilian employee'' before the word

``appointed.'' To proposed paragraph (b), we added members of the

Uniformed Services to the list of persons not covered by the Act. We

revised proposed paragraph (b)(2) by deleting the ``or'' after the

semicolon. We revised proposed paragraph (b)(3) by deleting the period

and substituting a semicolon followed by ``or.''

3. Section 551.104--Definition of Agency

The Office of Compliance in the Legislative Branch suggested a

revision of the definition of ``agency'' if OPM's final definition of

``agency'' includes a specific exclusion of the entities in the

legislative branch whose employees are not covered under the FLSA.

The language is in keeping with the explanation of the

responsibilities of the Office of Compliance discussed in item 1 and

added to section 551.102(d), therefore, we adopted the revision.

4. Section 551.104--Definition of Claim

We added a sentence explaining that the term ``claim'' is used

generically in subpart G to include complaints under the child labor

provisions of the Act.

5. Section 551.104--Definition of De Minimis Activity or Worktime

One agency pointed out that section 785.47 of title 29, Code of

Federal Regulations, requires an employer to count as hours worked any

part, however small, of the employee's fixed or regular working time or

practically ascertainable period of time the employee is regularly

required to spend on assigned duties.

The two labor organizations pointed out that the actual amount of

time involved is only one of three factors to be considered. The other

two factors are the administrative difficulty of recording small

amounts of time and whether the work is performed on a regular basis.

In addition, one labor organization suggested that the definition be

clarified to mean fewer than a total of ten minutes in the entire

workday. The same labor organization stated that some agencies have

argued that if an employee performs a work activity for a period of

fewer than 10 minutes at the beginning of a workday and fewer than 10

minutes at the end of a workday, the de minimis doctrine can be applied

even though the total combined time for the employee exceeds 10 minutes

for the day. This labor organization outlined the three factors

discussed by the court in Lindow v. U.S., 738 F.2d 1057 (9th Cir.

1984).

In view of these comments, we deleted the proposed definition of de

minimis activity or worktime. We may address the term at a later time.

6. Section 551.104--Definition of Discretion and Independent Judgment

One labor organization stated that the proposed definition appears

to require less than is required under the Department of Labor's

regulations and suggested that the definition be made more similar to

the Department of Labor regulation at section 541.207(a) of title 29,

Code of Federal Regulations. The labor organization also suggested that

we add to proposed paragraph (3) the following sentence: ``The

discretion and independent judgment exercised must be real and

substantial, that is, they must be exercised with respect to matters of

consequence.''

After carefully weighing this comment against the need for OPM to

apply the letter and spirit of the Act in a public sector context, we

decided not to revise the proposed definition. Our proposed definition

acknowledges that in the public sector, with its responsibility and

accountability to the general public, levels of review are frequently

required. We believe that paragraph (3) of the definition, which states

that decisions made independently must be significant and then

amplifies what ``significant'' includes versus what it does not extend

to, adequately addresses the commentor's concerns.

7. Section 551.104--Definition of Employee

The agency which in item 2 pointed out that members of the

Uniformed Services are not covered by the FLSA recommended a change to

the definition of employee to reflect this.

We adopted the recommendation. In proposed paragraph (1) of the

definition of employee, we inserted the phrase ``as a civilian'' before

the phrase ``in an executive agency.''

One individual and one agency pointed out that the definition of

employee should include the Government Printing Office. The

Congressional Accountability Act of 1995, Pub. L. 104-1, amended the

FLSA at section 203(e)(2)(A) of title 29, United States Code, by

deleting the reference to ``unit[s]'' in the legislative branch in

clause (iii) and by adding a new clause (vi) identifying the Government

Printing Office as a public agency whose employees are covered by the

FLSA.

OPM's proposed regulations tracked the law's deletion, but not the

addition. This omission was unintentional. We revised the definition of

employee by deleting the ``or'' following proposed paragraph (3),

substituting a semicolon and the word ``or'' for the period following

proposed paragraph (4), and adding paragraph (5) naming the Government

Printing Office.

8. Section 551.104--Definition of Hours of Work

One labor organization suggested that the definition of hours of

work should state that all interpretations of the FLSA, including

Comptroller General decisions, OPM guidance, and agency policy and

regulations, must be consistent with the Act and Department of Labor

regulations in order to be valid.

OPM is tasked with administering the Act consistent with the

Department of Labor. Our regulations accomplish this. Therefore, we did

not find it necessary to adopt this suggestion.

9. Section 551.104--Definition of Management or General Business

Function or Supporting Service

We revised the first sentence of proposed paragraph (2) of the

definition by deleting the words ``general management, business, or

servicing functions'' and substituting in their place the words

``management or general business functions or supporting services'' to

be consistent with wording elsewhere.

Two labor organizations contended that the proposed definition

fails to clearly explain the type of work which falls under the

administrative exemption.

One labor organization pointed out that the Department of Labor

regulation at Sec. 541.205(a) of title 29, Code of Federal Regulations,

clearly distinguishes between work involving the administrative

operations of an employer--which is exempt work--and ``production''

work which involves performing activities that carry out the day-to-day

functions of the employer--which is nonexempt work.

[[Page 67240]]

The other labor organization suggested that to clarify the

definition of management or general business function or supporting

service and make it consistent with law, the following statement should

be added: ``Employees who perform the day-to-day activities necessary

for an agency to accomplish its mission do not qualify as performing

`management or general business functions or supporting services.'

We believe the proposed definition is legally correct.

10. Section 551.104--Definition of Supervisory and Closely Related Work

One labor organization stated that the paragraph (2) of the

proposed definition of supervisory and closely related work is far more

expansive than the Department of Labor regulation and perhaps more

expansive than OPM intended. The labor organization suggested that we

add the phrase ``closely related work'' to the definitions and adopt

the definition used by the Department of Labor in Sec. 541.108 of title

29, Code of Federal Regulations.

We believe the proposed definition is legally correct.

11. Section 551.104--Definition of Temporary Work or Duties

We had an inquiry from an agency personnelist who explained that

the agency in question has a number of exempt employees whose official

position descriptions include minor, nonexempt duties. The agency has

correctly determined that the employees are exempt. The employees,

however, are being required to perform the nonexempt work included in

the official position description for a greater percentage of the time

and on a long-term, but temporary, basis. Under our proposed

regulations, the agency could argue that the work is not ``not

consistent with the employee's official position description.''

We revised the definition by inserting the words ``the primary or

grade-controlling duty of'' before the words ``the employee's official

position description.'' We made conforming changes throughout

Sec. 551.208.

12. Section 551.201--Agency Authority

Two labor organizations commented on this section.

One labor organization suggested replacing the phrase ``makes a

determination'' with ``properly determines'' to make it clear that the

presumption of FLSA coverage can be rebutted only by a proper or

correct determination that the exemption criteria have been met.

We adopted the suggestion. We revised the first sentence of

proposed paragraph 551.201 by deleting ``All employees are'' and

substituting ``Each employee is,'' deleting ``makes a determination''

and substituting ``correctly determines,'' deleting ``position'' and

substituting ``employee clearly,'' and adding ``and such supplemental

interpretations or instructions issued by OPM'' after ``subpart.'' The

word ``clearly'' is used to make this principle consistent with those

expressed in proposed paragraphs 551.202 (a) and (b). The sentence was

then moved to Sec. 551.202 as new paragraph (a).

The other labor organization stated that agencies do not need to be

told to exempt employees because they already do so more often than is

justified. The labor organization recommended that the second sentence

in this section be deleted, or modified by inserting the word

``clearly'' in the phrase ``any employee who meets * * *'' to be

consistent with proposed paragraphs (a) and (c) of Sec. 551.202 which

already use the word.

In this instance, we did not adopt the suggestion to use the word

``clearly.'' Instead, we modified the sentence to better reflect an

agency's authority to designate an employee FLSA exempt. We revised the

second sentence in proposed Sec. 551.201 by deleting ``must exempt from

the overtime provisions of the Act any employee who'' and substituting

``may designate an employee FLSA exempt only when the agency correctly

determines that the employee,'' and inserting ``one or more of'' after

``meets.''

13. Section 551.202--General Principles Governing Exemptions

As mentioned in item 12, we revised the first sentence of proposed

Sec. 551.201 and added it as the first general principle under

Sec. 551.202. Accordingly, we redesignated proposed paragraphs (a)

through (h) as paragraphs (b) through (i).

We revised the first sentence of proposed paragraph (c)

(redesignated paragraph (d)) by deleting the words ``All employees who

clearly meet'' and substituting ``An employee who clearly meets.''

One labor organization commented on proposed paragraph (d)(2)

(redesignated paragraph (e)(2)). It is the labor organization's opinion

that all nonsupervisory employees performing technician work who are

not performing predominantly administrative functions are nonexempt,

regardless of their grade level. The labor organization suggests that

this paragraph be revised to state that all employees performing

technician work are nonexempt.

Another labor organization commented on proposed paragraph (f)

(redesignated paragraph (g)). The labor organization suggested that the

example in the second sentence be changed because it has led agencies

to incorrectly designate technicians as FLSA exempt when they should be

FLSA nonexempt.

We did not adopt either suggestion. OPM has found that many higher-

graded technical employees perform work fully comparable to work

performed by professional engineers, particularly in the area of

difficult, demanding, and original equipment and facilities design.

Such employees are correctly determined to be FLSA exempt.

One individual stated that proposed paragraph (d)(3) (redesignated

(e)(3)) concerning FLSA nonexempt status of employees in the Aircraft

Operation, GS-2181, series is inconsistent with other OPM guidance in

the ``Classifier's Handbook,'' ``Introduction to the Position

Classification Standards,'' and the ``Guide to Personnel Data

Standards.'' The individual pointed out that Appendix 1 of the

``Introduction to the Position Classification Standards'' lists the GS-

2181 series as a series for which a two-grade interval pattern is

normal and the GS-2181 classification standard indicates that this

series is two-grade interval in a footnote. The individual expressed

the opinion that if a position is considered to be technical and its

occupational category is designated as technical, the position should

not be identified as a two-grade interval series. The individual

suggested that the GS-2181 position classification standard and

Appendix 1 of ``The Introduction to the Position Classification

Standards'' be revised to delete references to the GS-2181 series as

two-grade interval.

Because this comment addressed classification, rather than FLSA,

issues, we referred this comment to OPM's Office of Classification.

We revised the third sentence of proposed paragraph (g)

(redesignated paragraph (h)) by deleting the phrase ``exempting the

employee'' and substituting ``designating an employee FLSA exempt'' to

be consistent with wording elsewhere.

14. Section 551.204(a)--Exemption of Federal Wage System Employees

We revised proposed paragraphs (a) and (b) by deleting the word

``under'' and substituting ``in'' to be consistent with Sec. 551.203.

[[Page 67241]]

15. Section 551.205--Executive Exemption Criteria

Two labor organizations stated that it is a mistake to eliminate

the requirement that in order to qualify under the executive exemption

an employee must customarily and regularly direct the work of at least

three subordinate employees. The labor organizations argued that

agencies frequently classify employees who serve as lead workers as

exempt under the executive exemption criteria and that the numerical

requirement helps to clarify that employees who perform minimal

supervisory duties do not fall under this exemption. They predict that

agencies will claim the individual employees who work with other

employees and who make recommendations regarding their work will

qualify for the executive exemption simply if the employees exercise

some independence in their own work. They state that this may arise if

employees work in teams and have no direct supervisory authority over

team members but instead one of the team members acts as a team leader.

Even if the team leader assignment is rotated among members of the

team, an agency may, under the proposed regulation, claim that the

employee meets the executive exemption criteria. The labor

organizations also stated that the numerical requirement is consistent

with the Department of Labor regulations.

We did not adopt this suggestion. The original numerical

requirement of at least three subordinate employees was based on the

Supervisory Grade Evaluation Guide. That guide was replaced by the

General Schedule Supervisory Guide which does not have a numerical

requirement. We also recognized that OPM's requirement of three or more

subordinate employees was inconsistent with Department of Labor's

regulations. Instead of changing to an arbitrary number, we chose to

use the plural ``employees'' which implies ``two or more.''

16. Section 551.206--Administrative Exemption Criteria

One agency commented that the criterion in proposed paragraph

(a)(1) under the primary duty test could lead to an incorrect and

overly broad application of the exemption and be inconsistent with

Department of Labor's application of the Act to the private sector.

This comment addresses a well-established provision in the

currently published regulations. Our experience is that the provision

as currently published is sufficient.

We revised proposed paragraph (a)(2) by deleting the phrase

``general management or business functions'' and substituting in its

place ``management or general business functions'' to be consistent

with wording elsewhere.

We revised the headings of proposed paragraphs (b) and (c) by

inserting the word ``test'' before the periods.

17. Section 551.207--Professional Exemption Criteria

Several commentors pointed out that proposed paragraph(a)(3) is

more expansive than the law pertaining to employees in the computer

software field (Public Law 101-583, 104 Stat. 2871, November 15, 1990).

One labor organization suggested that in order to clarify the

limited scope of the exemption for work in computer-related

occupations, OPM's proposed regulations should include a provision

similar to Sec. 541.303(c) of title 29, Code of Federal Regulations

which provides that the professional exemption only applies to highly

skilled employees who have achieved a level of proficiency in the

theoretical and practical application of a body of highly-specialized

knowledge in computer systems analysis, programming, and software

engineering.

The same labor organization also suggested that the proposed

regulation should also include a provision analogous to Sec. 541.303(d)

of title 29, Code of Federal Regulations, which provides that the

exemption does not include ``employees engaged in the operation of

computers or in the manufacture, repair, or maintenance of computer

hardware and related equipment'' or employees whose work is dependent

on computers but who do not work in computer systems analysis or

computer programming occupations.

The labor organization further suggested that the exemption does

not include employees engaged in the operation of computers or in the

manufacture of computer hardware and related equipment, or employees

whose work is dependent on computers but who do not work in computer

systems analysis or computer programming occupations.

Public Law 101-583 (104 Stat. 2871, November 15, 1990) provides

that employees performing such work may be designated FLSA exempt as

executive, administrative, or professional employees. The law also

states that ``if such employees are paid on an hourly basis they shall

be exempt only if their hourly rate of pay is at least 6\1/2\ times

greater than the applicable minimum wage . . . .'' Section 13(a) of the

Act was amended to read ``in the case of an employee who is compensated

on an hourly basis, is compensated at a rate not less than $27.63 an

hour.'' Proposed paragraph (a)(3) essentially restates the criteria in

section 213(a)(17) of title 29, United States Code, for exempting from

the FLSA certain employees who work with computers. The regulation does

not include a salary-based test because the Department of Labor has

determined that such tests do not apply to public employees (see

Sec. 541.5d of title 29, Code of Federal Regulations).

Commentors suggested that we further explain the scope of this

exemption. We considered this suggestion, but concluded that the

language in the proposed regulation is sufficient.

The citation in proposed paragraph (a)(3)(iv) was published as

``(a)(3)(i), (3)(ii), and (3)(iii).'' We revised the citation to read

``(a)(3)(i), (a)(3)(ii), and (a)(3)(iii)'' to be consistent with the

citation in proposed paragraph 551.208(d)(2) which reads ``(d)(2)(i)

and (d)(2)(ii).

We revised the heading of proposed paragraph (b) by deleting the

words ``in nature'' and substituting in their place the words ``work

test.''

We revised the heading of proposed paragraph (c) by inserting the

word ``test'' before the period.

18. Section 551.208--Effect of Performing Temporary Work or Duties on

FLSA Exemption Status

As explained in item 11, we inserted the words ``the primary or

grade-controlling duty of'' in proposed paragraphs (a)(1), (b)(1),

(c)(1), and (c)(3).

To avoid any possible confusion on the part of agencies or

employees, we inserted the word ``calendar'' before the word ``days''

in proposed paragraphs (b)(1)(i), (b)(2)(ii), (c)(1)(i) and (c)(2)(ii).

One labor organization took issue with proposed paragraphs

(b)(1)(i) and (b)(2)(i) which state that the period of temporary work

or duties must exceed 30 days (now referred to as the ``30-day test'').

The labor organization incorrectly believed the OPM was ignoring the

workweek basis of the FLSA and suggested that OPM should provide that

exemption determinations be made on a workweek basis for temporary

assignments of 5 workdays or more. We did not adopt the suggestion.

We believe that this suggestion, if adopted, would place an extreme

administrative burden on agencies. The Act takes a single workweek as

its standard, that is, a workweek is the unit of time used as the basis

for applying

[[Page 67242]]

overtime standards under the Act. It would be administratively

burdensome for Federal agencies to have to make this determination each

week. OPM adopted the 30-day test to ease this administrative burden on

agencies but the weekly standard still applies for pay purposes. The

30-day test is well established and has been unchanged in regulation

since January 1988. The revision of this section makes clear to

agencies and employees agencies' responsibilities regarding an employee

who must temporarily perform work or duties that are not consistent

with the primary or grade-controlling duty of the employee's official

position description.

In the heading of proposed paragraph (b)(1)(iii), we made the word

``situations'' singular to parallel proposed paragraph (c)(1)(iii).

In proposed paragraph (c)(1)(ii), we added the words ``or duty'' to

the paragraph heading to parallel paragraph (b)(1)(ii).

We italicized the heading of proposed paragraph (c)(3).

19. Section 551.209--Foreign Exemption Criteria

In proposed paragraph (a), we italicized the words ``all'' and

``any.''

We changed the period at the end of the introductory language of

proposed paragraph (b) to a colon.

20. Section 551.211--Statutory Exclusion

One labor organization pointed out that the statutory exclusion in

proposed Sec. 551.211 goes beyond the statutory provision on which it

is based. The Customs Officers Pay Reform Act (Customs Pay Act),

codified at section 267 of title 19, United States Code (U.S.C.),

provides that ``a customs officer who receives overtime pay under

subsection (a) of this section or premium pay under subsection (b) of

this section for time worked may not receive pay or other compensation

for that work under any other provision of law.'' (Emphasis added.)

Under the statute, a customs officer cannot receive FLSA overtime pay

for the same work for which the officer received overtime pay or

premium pay under the Customs Pay Act. Proposed section 551.211 goes

beyond the statute because it completely excludes customs officers from

the overtime pay and hours of work provisions of the FLSA. The labor

organization stated that there are a number of circumstances in which

the Customs Pay Act does not provide overtime pay for particular work

but the FLSA does. For example, under section 267(a)(1) of the Customs

Pay Reform Act, an employee is entitled to overtime pay only when he or

she is ``officially assigned to perform work.'' Unlike the FLSA, the

Customs Pay Act does not provide overtime pay for work that an employee

is suffered or permitted to perform. The labor organization further

stated that the United States Customs Service has taken the position

that the Customs Pay Act does not authorize overtime pay for training,

even when such training is required by the agency. It is Customs'

position that training is not ``work'' under section 267(a)(1).

According to Customs, training time is compensable only for employees

who are FLSA covered. Customs has also taken the position that certain

travel time is not compensable under the Customs Pay Act. The FLSA,

however, provides compensation for some travel time and for time spent

in training when required by the agency (see section 410.402(d) of

title 5, Code of Federal Regulations). The labor organization pointed

out that the Customs Pay Act does not exclude customs officers from

compensation for these hours under the FLSA.

We revised proposed Sec. 551.211 by quoting the Customs Pay Act. We

deleted the first sentence and in its place is substituted ``A customs

officer who receives overtime pay under subsection (a) or premium pay

under subsection (b) of section 267 of title 19, United States Code,

for time worked may not receive pay or other compensation for that work

under any other provision of law.'' We revised the second sentence by

deleting ``a customs inspector,'' inserting ``a United States Customs

Service'' before ``supervisory,'' inserting ``or nonsupervisory'' after

supervisory, deleting ``a canine enforcement officer'' before

``supervisory,'' and inserting ``or nonsupervisory'' after

``supervisory.''

21. Section 551.601--Minimum Age Standards

One agency suggested that the reference to section 3(l) in proposed

paragraphs (a) and (b) be corrected to substitute a lower-case letter L

for the Arabic numeral one inside the parentheses. We made this

correction.

22. Section 551.602--Responsibilities

One agency suggested that it would be helpful to Federal agencies

to provide a citation to the Department of Labor's child labor

regulations.

We agree. We revised the first sentence of proposed paragraph (a)

by inserting ``in part 570 of title 29, Code of Federal Regulations,''

before the phrase ``by the Secretary of Labor.''

One agency noted the reference to ``claims'' in subpart F and the

inclusion of child labor ``claims'' in subpart G. The agency stated

that this seems somewhat anomalous in that the enforcement mechanism

for the child labor provisions of the FLSA is the assessment of civil

money penalties pursuant to section 261(e) of title 29, United States

Code, payable to the Federal Government by violating employers. This is

in contrast to the assertion of wage claims under sections 16(b) and

16(c) of the FLSA by the Administrator or by an employee, resulting in

the possible payment of back wages and liquidated damages to the

employee.

We revised proposed paragraph (b) by deleting the word ``claims''

and substituting in its place the word ``complaints'' and we made

conforming changes in Secs. 551.701(a) and 551.702(a).

23. Section 551.701--Applicability

We revised proposed paragraph (a) by deleting the word ``claims''

from the phrase ``claims arising under the child labor provision'' and

substituting the word ``complaints'' in its place. As explained in item

4, the term ``claim'' is used generically in subpart G to include

complaints under the child labor provisions of the Act.

24. Section 551.702--Time Limits

We revised the first sentence of proposed paragraph (a) by deleting

the words ``may file an FLSA claim at any time'' and substituting in

their place the words ``may at any time file a complaint'' and

inserting the words ``an FLSA claim'' before the word ``challenging.''

One labor organization argued that the applicable statute of

limitations continues to be 6 years under the Barring Act (section

3702(b)(1) of title 31, United States Code), notwithstanding the

enactment of Pub. L. 104-52 (109 Stat. 468-69 (1995)) and the decision

in Adams v. Bowsher, 946 F.Supp. 37 (D.C.D.C. 1996).

It is OPM's position that the law and court decision established a

2-year statute of limitations (3-year for willful violations).

Another labor organization noted that proposed paragraph (c)

permits a claimant to file a claim either with the agency employing the

claimant during the claim period or with OPM. The labor organization

stated that there should be a provision allowing the claimant the

option to file the claim with OPM to resolve the claim if the agency

fails to issue a decision on a claim filed with it within six months.

This would preclude an agency from preventing an employee from

receiving

[[Page 67243]]

compensation by simply refusing to process the claim.

We did not adopt this suggestion. Nothing in OPM's regulations

precludes an employee from withdrawing a claim submitted to an agency

and submitting the claim to OPM, if the employee believes the agency is

taking too long to decide the claim.

25. Section 551.703--Avenues of Review

Two labor organizations noted that proposed paragraph (a) means

that a claimant who is covered by a collective bargaining agreement

that does not exclude FLSA matters for only part of a claim period, the

claimant would be precluded from filing a claim with OPM for the period

of time that the claimant was not covered by the agreement. The labor

organizations suggested that the paragraph be rewritten to state that a

claimant is limited to using the negotiated grievance procedure as the

exclusive administrative remedy for only time periods in which he or

she was a member of a bargaining unit and covered by a collective

bargaining agreement which did not exclude FLSA matters.

We did not adopt the suggestion for two reasons. First, Carter v.

Gibbs, 909 F.2d 1452 (Fed. Cir. 1990), cert. denied, 111 S.Ct. 46

(1990), established the principle that the negotiated grievance

procedure is the only administrative avenue open to an employee covered

by a collective bargaining agreement that does not exclude FLSA

matters. Second, if a claimant were permitted to split the claim period

between two avenues of review, different and conflicting decisions

might be reached, neither binding on the other.

We revised the introductory language of proposed paragraph (b) by

inserting the phrase ``but not both simultaneously'' before the word

``regarding'' to make it clear that an employee may not file the same

claim with the agency and OPM simultaneously.

One labor organization stated that the regulations should make it

clear that employees have a right to proceed to court with FLSA claims

independently of their right to file a claim with OPM.

Proposed paragraph (c) states that nothing in subpart G limits the

right of a claimant to bring an action in an appropriate United States

court, and that OPM will not decide an FLSA claim that is in

litigation. We believe the proposed paragraph is sufficient.

The same labor organization suggested that employees should be

advised that the filing of a claim with OPM or an agency will not toll

the statute of limitations governing FLSA claims filed in court.

We agree that this would be helpful to employees and added such

language as the second sentence of proposed paragraph (c).

26. Section 551.704--Claimant's Representative.

Two labor organizations interpreted the third sentence of the

introductory language to proposed Sec. 551.704 (which states ``A

representative has no right to participate in OPM fact-finding'') to

mean that a claimant would be limited to self-representation and

pointed out that this conflicts with the first sentence which permits

the designation of a representative to assist in preparing or

presenting a claim.

We intended to make the point that an employee representative may

not be present or listen in on fact-finding interviews conducted by OPM

as a matter of right. Rather OPM, at its discretion, may invite the

employee representative to participate. We revised the sentence in

question to make this clear.

27. Section 551.705--Form and Content of an FLSA Claim.

We deleted the heading of proposed section 551.705 and substituted

in its place the heading ``Filing an FLSA claim.''

One individual remarked that according to proposed paragraph (a)

``a non-unit employee can file an FLSA claim with the agency, and the

agency can either adjudicate it or forward it to OPM without taking any

action.''

This is not what we intended. Therefore, we have revised the second

sentence by deleting the phrase ``At the discretion of the agency'' and

substituting ``At the request of the claimant.''

The individual also asked whether an employee may appeal to OPM if

the agency adjudicates the claim.

We redesignated proposed paragraphs (a) and (b) as (b) and (c) and

added new paragraph (a) which states that an employee may file a claim

with either the agency or with OPM, but may not pursue the same claim

simultaneously with the agency and OPM. We encourage, but do not

require, claimants to obtain decisions on claims from their agency

before filing a claim with OPM. We also explain that a claimant may

file a claim with OPM after receiving an unfavorable decision from the

agency but may not file a claim with the agency after getting an

unfavorable decision from OPM.

Regarding the requirement in proposed paragraph (b)(7)

(redesignated as paragraph(c)(7)) that a claim must include evidence

that the claim period was preserved, one labor organization pointed out

that claimants may not realize the importance of retaining such

documentation. The labor organization recommended that the regulation

include a statement that if the claimant does not have evidence showing

the claim was filed, proof may be provided by documents in agency

records.

We did not adopt this recommendation. Proposed paragraph 551.702(c)

states clearly that the claimant is responsible for proving when the

claim was received by the agency or OPM and that 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. The last sentence in proposed

paragraph 551.702(c) explains why such documentation is important, that

is, 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. Further, proposed

paragraphs 551.709(a) and (b) provide for the release of information

from an FLSA claim file to the parties concerned, that is, the

claimant, any representative designated in writing by the claimant, and

any representative of the agency or OPM involved in the proceeding.

Thus, the claimant or the claimant's representative can obtain

documents regarding the claim, including documentation of when the

claim was received by the agency or OPM.

One labor organization suggested that in cases where the employee

filed with an agency but withdrew the claim and submitted it to OPM,

the date the claim was filed with the agency should be the relevant

date for determining back pay.

This provision already exists in proposed paragraph (b)(7)

(redesignated as paragraph (c)(7)).

28. Sections 551.706--Responsibilities

Two labor organizations argued that the time limit of 15 workdays

in proposed paragraph (a)(1) is too restrictive. One of the labor

organizations objected to the claimant being subject to a penalty

(denial of the claim) if requested information is not received by OPM

within 15 workdays without a corresponding penalty for the agency

should the agency not provide requested information to OPM within 15

workdays. The labor organization pointed out that claimants may not

realize that they need to request an

[[Page 67244]]

extension if they need more time to provide requested information.

We revised the first sentence of proposed paragraph (a)(1) by

inserting ``the claimant or the claimant's representative requests

additional time and'' after ``unless.'' We made corresponding changes

in proposed Sec. 551.707.

We revised the fourth sentence of proposed paragraph (a)(1) and the

last sentence of proposed paragraph (b) by deleting the word ``denied''

and substituting in its place the word ``cancelled'' to be consistent

with changes we made to proposed Sec. 551.707.

One labor organization reasoned that much of the information

necessary to support a claim is in the exclusive control of the agency.

The labor organization suggested that OPM add a statement that upon

request, and subject to any Privacy Act restrictions, agencies will

provide a claimant with information relevant to the claimant's claim.

We agree that this would further impress upon agencies their

responsibilities in FLSA claims and have added a such a statement as a

new paragraph (b)(3). We redesignated proposed paragraph (b)(3) as

paragraph (b)(4).

We revised proposed paragraph (b)(3) (redesignated as paragraph

(b)(4)) by inserting the words ``the agency requests additional time

and'' after the word ``unless'' to be consistent with wording

elsewhere.

29. Section 551.707--Withdrawal or Denial of an FLSA Claim

We revised the section heading by deleting ``denial'' and

substituting ``cancellation'' and revised proposed paragraph (b) by

deleting ``denied'' and ``deny'' and substituting ``cancelled'' and

``cancel'' and inserting ``the claimant or the claimant's

representative requests additional time and'' before ``OPM.'' With

these changes, we believe the regulation states clearly enough that a

claimant or claimant's representative can avoid cancellation of a claim

by requesting and receiving an extension. Proposed paragraph (b) also

states that a cancelled claim may be reconsidered by OPM if the claim

shows that circumstances beyond the claimant's control prevented

pursuit of the claim.

30. Section 551.708--Finality and Effect of OPM FLSA Claim Decision

One labor organization stated that the proposed regulations do not

address the right of appeal from OPM FLSA claim determinations and

suggests that the regulations should do so.

Proposed Sec. 551.708 states that 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.

31. Section 551.709--Availability of Information

We added the words ``before disclosing the information contained in

an FLSA claim file to the parties concerned'' to the end of the second

sentence in proposed paragraph (b) to make clear that this sanitized

information being released only to the parties concerned with the

claim.

32. Section 551.710

Under the address of the OPM Washington, DC Oversight Division, the

District of Columbia is indented.

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.

Janice R. Lachance,

Director.

For the reasons stated in the preamble, the Office of Personnel

Management amends 5 CFR part 551 as follows:

1. The title and authority citation for part 551 continues to read

as follows:

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

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.

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) Office of Compliance. The Congressional Accountability Act of

1995, as amended, sections 1301 et seq. of title 2, United States Code,

extends rights and protections of the FLSA to employees of the

following United States Government entities, and assigns certain

administrative responsibilities to the Office of Compliance:

(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; and

(8) The Office of Compliance.

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;

[[Page 67245]]

(2) A civilian employee 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;

(3) A volunteer; or

(4) A member of the Uniformed Services.

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.

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(c) for which the Department of Labor administers the Act

or Sec. 551.102(d)(1) through (8), whose employees are covered by the

Congressional Accountability Act of 1995, as amended, which makes

applicable the rights and protections of the FLSA and assigns certain

administrative responsibilities to the Office of Compliance.

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. The term ``claim'' is used generically in subpart G of this

part to include complaints under the child labor provisions of 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) will be met by an employee who

normally and recurrently exercises discretion and independent judgment

in the day-to-day performance of duties.

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 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) As a civilian 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;

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

positions in the competitive service; or

(5) The Government Printing Office.

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

Sec. 551.205.

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.

[[Page 67246]]

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, 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 subpart. 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 subpart, 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

(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 management or general

business functions or supporting services 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

Sec. 551.207.

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

[[Page 67247]]

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 primary or grade-

controlling duty of 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, 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 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.

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.

[[Page 67248]]

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.

Sec. 551.201 Agency authority.

The employing agency may designate an employee FLSA exempt only

when the agency correctly determines that the employee meets one or

more of 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) Each employee is presumed to be FLSA nonexempt unless the

employing agency correctly determines that the employee clearly meets

one or more of the exemption criteria of this subpart and such

supplemental interpretations or instructions issued by OPM.

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

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

exemption.

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

exemption.

(d) An employee who clearly meets 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.

(e) 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 comparable 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 comparable 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.

(f) 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.

(g) 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

meet the administrative criteria may be performing exempt executive

work.

(h) 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 designating an employee FLSA exempt, provided the work as

a whole clearly meets the other exemption criteria.

(i) 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 comparable 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 comparable 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 in 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 in 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 comparable

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

[[Page 67249]]

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 management or general 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 test. 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 test. 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

comparable 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. 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),

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

requires the same level of skills.

(b) Intellectual and varied work test. 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 test. 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

comparable 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 primary or grade-controlling duty of 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 primary or grade-controlling

duty of 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

calendar 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 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 comparable 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--

[[Page 67250]]

(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 calendar 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 primary or grade-controlling

duty of 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

calendar days; and

(ii) Not exempt work or duty. 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 comparable 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 calendar 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

the primary or grade-controlling duty of 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 comparable 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

other than to assign qualified employees to temporarily perform work or

duties in connection with the emergency. In such a designated

emergency--

(1) Nonexempt employee. The exemption status of a nonexempt

employee remains nonexempt whether the employee performs nonexempt work

or exempt work during the emergency; and

(2) Exempt employee. 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.

(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 primary or grade-controlling duties of 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 primary or grade-controlling duties of 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

[[Page 67251]]

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

Sec. 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.

A customs officer who receives overtime pay under subsection (a) or

premium pay under subsection (b) of section 267 of title 19, United

States Code, for time worked may not receive pay or other compensation

for that work under any other provision of law. As used in section 5,

the term ``customs officer'' means a United States Customs Service

supervisory or nonsupervisory customs inspector or a supervisory or

nonsupervisory 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.

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(l), 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 in part 570 of title 29, Code of Federal Regulations,

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 complaints concerning the employment of persons

under the age of 18 years. Complaints 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 Filing an FLSA claim.

551.706 Responsibilities.

551.707 Withdrawal or cancellation 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.

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 complaints 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 at any time file a complaint under the

child labor provisions of the Act or an FLSA claim 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 551.710) 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, but not both simultaneously, 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

[[Page 67252]]

(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.

Filing a claim with an agency or with OPM does not satisfy the statute

of limitations governing FLSA claims filed in 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 may not participate in OPM interviews unless

specifically requested to do so by OPM. 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 Filing an FLSA claim.

(a) Filing an FLSA claim. A claimant may file an FLSA claim with

either the agency employing the claimant during the claim period or

with OPM, but a claimant cannot pursue the same claim with both at the

same time. OPM encourages a claimant to obtain a decision on the claim

from the agency before filing the claim with OPM. However, a claimant

is not required to do this. This a matter of personal discretion and a

claimant may use either avenue. A claimant who receives an unfavorable

decision on a claim from the agency may still file the claim with OPM.

However, a claimant may not file the claim with the agency after

receiving an unfavorable decision from OPM. An OPM decision on a claim

is final and is not subject to further administrative review.

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

agency should be made according to appropriate agency procedures. At

the request of the claimant, 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.

(c) 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.

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 the claimant or the claimant's representative requests

additional time and 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 cancelled 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 cancelled 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) Upon a claimant's request, and subject to any Privacy Act

requirements, an agency must provide a claimant with information

relevant to the claim.

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

15 workdays after the date of the request, unless the agency requests

additional time and OPM grants a longer period of time in which to

provide the requested information.

[[Page 67253]]

Sec. 551.707 Withdrawal or cancellation 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) Cancellation. OPM may, at its discretion, cancel 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 the claimant or the claimant's representative requests

additional time and OPM grants a longer period of time in which to

provide the requested information. OPM may, at its discretion,

reconsider a cancelled 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 before disclosing the

information in an FLSA claim file to the parties concerned. 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

llinois, 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 not listed in the service area of another Oversight division.

[FR Doc. 97-33429 Filed 12-22-97; 8:45 am]

BILLING CODE 6325-01-P