45064 Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules

§ 178.208 Applicability of general

procedures.

When not in conflict with this

subpart, the provisions of subpart A of

this part relating to procedures

applicable to claims generally are also

applicable to the settlement of account

of deceased civilian officers and

employees.

[FR Doc. 97–22389 Filed 8–22–97; 8:45 am]

BILLING CODE 6325–01–M

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 551

RIN 3206–AG70

Pay Administration Under the Fair

Labor Standards Act

AGENCY: Office of Personnel

Management.

ACTION: Proposed rule.

SUMMARY: The U.S. Office of Personnel

Management (OPM) is publishing a

proposed rule to amend regulations on

the Fair Labor Standards Act (referred to

as ‘‘the Act’’ or ‘‘FLSA’’). The purpose

of the majority of the revisions is to

make text clearer, standardize terms,

change to the active voice, reorganize

material for added clarity, insert or

revise headings to accurately reflect

content, reduce internal crossreferencing, correct typographical,

punctuation, and grammatical errors,

and use ‘‘plain English.’’ The proposed

rule includes guidance published in the

sunsetted Federal Personnel Manual

(FPM), adds certain work in the

computer software field to the

professional exemption criteria, adds an

exemption for certain pilots, adds the

statutory exclusion of customs officers,

and includes regulations on child labor

and claims and compliance.

DATES: Written comments will be

considered if received on or before

October 24, 1997. Please organize and

identify comments by section and

paragraph designation.

ADDRESSES: All comments concerning

these proposed regulations should be

addressed to Jeffrey D. Miller, Director,

Classification Appeals and FLSA

Programs, Office of Personnel

Management, 1900 E Street NW., Room

7679, Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT:

Jeffrey D. Miller, Director, Classification

Appeals and FLSA Programs, by

telephone on 202–606–2990; by fax on

202–606–2663; or by e-mail at

ADOMSOE@opm.gov.

SUPPLEMENTARY INFORMATION: On

January 10, 1995, OPM published a

proposed rule (60 FR 2549) to amend

regulations on the Fair Labor Standards

Act by adding a subpart F—Complaints

and Compliance. That subpart F

provided for FLSA complaint

adjudication by the agency involved

rather than by OPM. Comments were

received from four Federal agencies,

four labor organizations, and one

employee organization. OPM

reconsidered its proposal and withdrew

the proposed subpart F (62 FR 9995,

March 5, 1997).

The purpose of the majority of these

revisions is to make text clearer,

standardize terms, change to the active

voice, reorganize material for added

clarity, insert or revise headings to

accurately reflect content, reduce

internal cross-referencing, correct

typographical, punctuation, and

grammatical errors, and use ‘‘plain

English.’’ The proposed rule includes

guidance published in the sunsetted

Federal Personnel Manual, adds certain

work in the computer software field to

the professional exemption criteria,

adds an exemption for certain pilots,

adds the statutory exclusion of customs

officers, and adds two new subparts,

subpart F—Child Labor and subpart G—

FLSA Claims and Compliance. The

changes are discussed section by section

below. When the reason for a revision

is one or more of the ones described in

this paragraph, we do not repeat the

reason when we describe the change.

1. Nomenclature Changes

References to the Office of Personnel

Management are changed to ‘‘OPM’; the

word ‘‘shall’’ is changed to ‘‘will’’ or

‘‘must,’’ as appropriate; the phrase

‘‘shall be’’ is changed to ‘‘is’’; the phrase

‘‘employee in a position properly

classified’’ is substituted for ‘‘employee

classified’’; and ‘‘primary duty test’’ is

substituted for ‘‘primary duty criterion.’’

2. Miscellaneous Changes

The following changes are made

throughout: quotation marks are

removed, and paragraph headings are

added.

3. New Sections

Two new sections are added to

subpart B—Exemptions and the subpart

is retitled ‘‘Exemptions and

Exclusions.’’ One new section (551.204)

describes the exemption of Federal

Wage System employees. The other new

section (551.211) describes the statutory

exclusion of customs officers of the

United States Customs Service. Customs

officers whose exclusive entitlement to

overtime pay is governed by section 5 of

the Act of Feb. 13, 1911, as amended

(sections 261 and 267 of title 19, United

States Code), are excluded from the

hours of work and overtime pay

provisions of the FLSA. As used in

section 5, the term ‘‘customs officer’’

means a customs inspector, a

supervisory customs inspector, a canine

enforcement officer, or a supervisory

canine enforcement officer.

4. New Subparts

Two new subparts are added. The first

(subpart F) addresses child labor and

the second (subpart G) addresses

complaints and compliance.

5. Subpart A

Subpart A is restructured. Section

551.102—Definitions is redesignated

§ 551.104 with the same title. Section

551.104—Administrative authority is

redesignated § 551.102 and retitled

‘‘Authority and administration’’.

6. Section 551.101—General.

The second sentence of paragraph (a)

is revised by deleting all that follows the

word ‘‘Act’’. Revised paragraph (a) is

moved to redesignated § 551.102—

Authority and administration.

Paragraph (b) is redesignated

paragraph (a). In the first sentence, the

phrase ‘‘Fair Labor Standards Act of

1938, as amended (referred to as ‘‘the

Act’’ or ‘‘FLSA’’)’’ replaces the word

‘‘Act’’.

Paragraph (c) is redesignated

paragraph (b).

7. Redesignated § 551.102—Authority

and Administration

Paragraph (a) is moved to this section

from published § 551.101 and

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

Paragraph (a), moved here from

published § 551.101, describes OPM’s

authority. The sole sentence of

published § 551.104—Administrative

authority is added to paragraph (a) and

is revised by deleting all the text

following the word ‘‘except’’ and

substituting ‘‘as specified in paragraphs

(b), (c), and (d) of this section.’’

Paragraph (b) states that the Equal

Employment Opportunity Commission

administers the equal pay provisions of

the Act.

Paragraph (c) lists the United States

Government entities for which the

Department of Labor administers the

Act. Those are the Library of Congress,

the United States Postal Service, the

Postal Rate Commission, and the

Tennessee Valley Authority.

Paragraph (d) lists the United States

Government entities for which the

Office of Compliance administers the

Act. The Congressional Accountability
Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules 45065

Act of 1995 (Pub. L. 104–1, 109 Stat. 4,

January 23, 1995) authorized the

application of the provisions of the

FLSA to the legislative branch of the

Federal Government and authorized the

Office of Compliance to administer the

FLSA for any employee of the United

States House of Representatives; the

Unites States Senate; the Capitol Guide

Service; the Capitol Police; the

Congressional Budget Office; the Office

of the Architect of the Capitol; the

Office of the Attending Physician; the

Office of Compliance; and the Office of

Technology Assessment.

8. Section 551.103—Coverage

The phrase ‘‘as defined in § 551.102’’

is deleted from paragraphs (b)(2) and

(b)(3).

9. Redesignated § 551.104—Definitions

Several of the current definitions are

revised. The phrase ‘‘or FLSA’’ is added

to the definition of ‘‘Act’’. The

definition of ‘‘agency’’ is revised by

deleting the colon and all text following

the colon and adding ‘‘the entities of the

United States Government listed in

§ 551.101 for which the Department of

Labor and the Office of Compliance

administer the Act.’’ The definition of

‘‘employ’’ is revised by deleting the

phrase ‘‘as defined for this part’’. The

definition of ‘‘employee’’ is revised by

adding a reference to law to

subparagraphs (1) and (2) and deleting

the words ‘‘legislative or’’ from

subparagraph (4). The list of locations

under the definition of ‘‘exempt area’’ is

updated—‘‘U.S.’’ is inserted before the

name ‘‘Virgin Islands,’’ Eniwetol Atoll

and Kwajalein Atoll are deleted, and

Midway Atoll and Palmyra are added.

Many of the terms used in the FLSA

arena have acquired well-established

interpretations that sometimes differ

from the customary interpretations in

the Federal service. Terms and

definitions from FPM Letter No. 551–7,

dated July 1, 1975, are added, as well as

definitions of other FLSA and pay

administration terms. Terms added are

as follows:

Administrative employee

Claim

Claim period

Claimant

Customarily and regularly

De minimis activity or worktime

Discretion and independent judgment

Emergency

Essential part of administrative or

professional functions

Executive employee

FLSA exempt

FLSA exemption status

FLSA exemption status determination claim

FLSA nonexempt

FLSA overtime pay

FLSA pay claim

Foreign exemption

Formulation or execution of management

programs or policies

Hours of work

Management or general business function or

supporting service

Nonexempt area

Participation in the executive or

administrative functions of a management

official

Perform work in connection with an

emergency

Preserve the claim period

Primary duty

Professional employee

Reckless disregard of the requirements of the

Act

Recognized organizational unit

Situations 1 through 4

Statute of limitations

Supervisory and closely related work

Temporary work or duties

Title 5 overtime pay

Willful violation

Work of an intellectual nature

Work of a specialized or technical nature

Workday

Worktime

Worktime in a representative workweek

Workweek

Workweek basis

10. Section 551.201—Agency Authority

The statement ‘‘All employees are

presumed to be FLSA nonexempt unless

the employing agency makes a

determination that the position meets

one or more of the exemption criteria of

this subpart.’’ is added as the first

sentence.

11. Section 551.202—General

Principles Governing Exemptions

The introductory language is revised

by deleting the phrase ‘‘the principles

that—’’ and substituting ‘‘following

principles:’’.

In paragraph (c), the phrase ‘‘must be

exempted’’ is changed to ‘‘must be

designated FLSA exempt’’ and the

sentence ‘‘If there is a reasonable doubt

as to whether an employee meets the

criteria for exemption, the employee

should be designated FLSA

nonexempt.’’ is added.

Four additional general principles

from FPM Letter 551–7, dated July 1,

1975, are added as paragraphs (d)

through (g). An additional general

principle is added as paragraph (h).

12. Section 551.203—Exemption of

General Schedule Employees

At the end of paragraph (a) the caveat

is added that employees in positions

properly classified at GS–4 or below are

nonexempt unless subject to the foreign

exemption.

In paragraph (b), the phrase ‘‘GS–5 or

above’’ is substituted for the phrase

‘‘GS–5 through GS–10’’ and the

reference ‘‘§§ 551.204, 551.205, and

551.206’’ is deleted. At the end of

paragraph (b) the caveat is added that

the exemption status of employees in

positions properly classified at GS–5 or

above may be affected if the employee

is required to temporarily perform work

or duties that are not consistent with the

employee’s official position description

or if the employee is subject to the

foreign exemption.

13. Section 551.204—Executive

Exemption Criteria

The section is redesignated from

§ 551.204 to § 551.205.

In the introductory paragraph, the

term ‘‘executive employee’’ is italicized

and the quotation marks removed. The

title ‘‘foreman’’ is deleted. The phrase

‘‘regularly and customarily’’ is changed

to ‘‘customarily and regularly’’ to be

consistent with the use of the phrase

elsewhere. The phrases ‘‘at least three’’

and ‘‘(excluding support personnel)’’ are

removed. The word ‘‘both’’ is

substituted for ‘‘all.’’ There is no need

to distinguish between General

Schedule (or equivalent) supervisors

and Federal Wage System (or

equivalent) supervisors. The General

Schedule Supervisory Guide published

in April 1993 specifies no minimum

number of employees to be supervised

for a position to be classified as

supervisory.

In paragraph (a), the entire text is

deleted and the phrase ‘‘The primary

duty test is met if the employee—’’ is

substituted.

In paragraph (a)(1), the phrase ‘‘select

or remove, and advance in pay and

promote, or make any other status

changes of’’ is changed to ‘‘make

personnel changes that include, but are

not limited to, selecting, removing,

advancing in pay, or promoting.’’

In paragraph (b), the phrase

‘‘supervisors in positions properly

classified in the Federal Wage System

below situation 3 of Factor I of the

Federal Wage System Job Grading

Standard for Supervisors’’ is substituted

for ‘‘foreman level supervisors in the

Federal Wage System’’ to update the

nomenclature. The word ‘‘level’’ is

inserted after the word ‘‘equivalent,’’

and the word ‘‘comparable’’ is inserted

before the phrase ‘‘wage systems.’’ The

phrase ‘‘employees at the GS–7 through

GS–9 level’’ is deleted and ‘‘firefighting

or law enforcement employees in

positions properly classified in the

General Schedule at GS–7, GS–8, or GS–

9 that are’’ is substituted to describe the

types of employees subject to 207(k) of

title 29, United States Code. The phrase

‘‘employees classified at’’ is deleted and

‘‘employees in positions properly
45066 Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules

classified in the General Schedule at’’ is

substituted. The words ‘‘the’’ and

‘‘level’’ are deleted from the phrase

‘‘classified at the GS–5 or GS–6 level’’

and inserted in the parenthetical clause

to read ‘‘(or the equivalent level in other

white-collar pay systems).’’ The phrase

‘‘to meet the 80-percent test’’ is added

after ‘‘closely related work.’’ Paragraph

(b) is restructured to more clearly and

easily identify the types of employees to

which the paragraph applies.

14. Section 551.205—Administrative

Exemption Criteria

The section is redesignated from

§ 551.205 to § 551.206.

In the introductory paragraph, the

term ‘‘administrative employee’’ is

italicized. The words ‘‘advisor,

assistance,’’ are deleted and the phrase

‘‘advisor or assistant to management’’ is

substituted. The phrase ‘‘who meets all’’

is changed to ‘‘and meets all four’’.

In paragraph (a), the introductory text

‘‘The employee’s primary duty consists

of work that—’’ is changed to ‘‘The

primary duty test is met if the

employee’s work—’’.

In paragraph (a)(1), the phrase

‘‘management policies or programs’’ is

changed to ‘‘management programs or

policies.

In paragraph (a)(3), the spelling of the

word ‘‘management’’ is corrected.

In paragraph (c), the phrase ‘‘must

frequently exercise’’ is changed to the

phrase ‘‘frequently exercises’’ to be

consistent with wording elsewhere.

In paragraph (d), the word ‘‘level’’ is

inserted after the word ‘‘equivalent,’’ the

word ‘‘pay’’ is inserted after the word

‘‘collar,’’ and the phrase ‘‘to meet the

80-percent test’’ is added to the end of

the sentence.

15. Section 551.206—Professional

Exemption Criteria

The section is redesignated from

§ 551.206 to § 551.207.

In the introductory paragraph, the

term ‘‘professional employee’’ is

italicized.

In paragraph (a), the introductory text

‘‘The employee’s primary duty consists

of—’’ is replaced with ‘‘The primary

duty test is met if the employee’s work

consists of—’’.

At the end of paragraph (a)(2), the

period is replaced with a semicolon

followed by the word ‘‘or.’’

Paragraph (a)(3) is added and adds

certain work in the computer software

field to the types of work meeting the

primary duty test. This change brings

OPM’s regulations into conformance

with those of the Department of Labor

which implemented the provisions of

Pub. L. 101–583, enacted November 15,

1990. That law required the issuance of

regulations to permit computer systems

analysts, computer programmers,

software engineers, and other similarly

skilled professional workers to qualify

for exemption from the minimum wage

and overtime compensation

requirements of the Act under section

13(a)(1), the executive, administrative,

and professional exemption.

In paragraph (d), the spelling of the

word ‘‘employees’’ is corrected, the

word ‘‘level’’ is inserted after the word

‘‘equivalent,’’ the phrase ‘‘white-collar

pay’’ is inserted after the word ‘‘other,’’

and the word ‘‘in’’ is changed to ‘‘on’’

after the word ‘‘workweek’’ to make this

paragraph consistent with published

§ 551.204(b) and 551.205(d).

16. Section 551.207—Foreign

Exemption

The section is redesignated from

§ 551.207 to § 551.209 and retitled

‘‘Foreign exemption criteria.’’ The

section is reorganized for clarity and

rewritten in plain English.

17. Section 551.208—Application of the

Executive, Administrative, and

Professional Exemption Criteria for

Periods of Temporary Duty

The section title is changed from

‘‘Application of the executive,

administrative, and professional

exemption criteria for periods of

temporary duty’’ to ‘‘Effect of temporary

work or duties on FLSA exemption

status.’’ The section is reorganized for

clarity and rewritten in plain English.

The changes include the following.

The phrase ‘‘temporary work or

duties’’ is substituted for the phrase

‘‘temporary duty’’ to make clear that the

subject is the work an employee is

performing on a temporary basis. The

change emphasizes that an employee’s

FLSA exemption status may change

when an employee is temporarily

required to perform work or duties not

consistent with the employee’s official

position description and eliminates

confusion with the term ‘‘TDY’’

(temporary duty). TDY is commonly

used to refer to an employee in travel

status or located somewhere on a

temporary basis. To further emphasize

this point, a sentence is added that

states ‘‘The period of temporary work or

duties may or may not involve a

different geographic duty location.’’

To focus attention on the tasks an

employee is being asked to perform

temporarily, rather than the type of

appointment (permanent appointment,

temporary appointment, or term

appointment) or the temporariness or

permanence of a personnel action

(detail or temporary promotion), the

phrases ‘‘consistent with the employee’s

official position description’’ or ‘‘not

consistent with the employee’s official

position description’’ are used in lieu of

‘‘duties which are not included in the

employee’s representative workweek’’

and ‘‘permanent position.’’

Nomenclature is updated and

phrasing is revised to parallel earlier

sections. For example, the phrase ‘‘in

the Federal Wage System at situation 3

or 4 of Factor I of the Federal Wage

System Job Grading Standard for

Supervisors’’ is substituted for ‘‘General

Foreman’’; the phrase ‘‘in the Federal

Wage System below situation 3 of Factor

I of the Federal Wage System Job

Grading Standard for Supervisors’’ is

substituted for ‘‘below General

Foreman’’; and the phrase ‘‘80 percent

or more of the worktime in a given

workweek’’ is substituted for ‘‘more

than 80 percent of a given workweek’’.

18. Section 551.209—Exemption of

Criminal Investigators Receiving

Availability Pay

The section is redesignated from

§ 551.209 to § 551.110 and retitled

‘‘Exemption of employees receiving

availability pay.’’

Paragraph (a) addresses the exemption

of criminal investigators receiving

availability pay.

Paragraph (b) addresses the

exemption of pilots employed by the

United States Customs Service who are

law enforcement officers and also

receive availability pay. Pub. L. 104–19,

July 27, 1995, amended section 5545a of

title 5, United States Code (U.S.C.), and

provided that the provisions of

subsections (a)–(h) providing for

availability pay apply to a pilot

employed by the United States Customs

Service who is a law enforcement officer

as defined under 5 U.S.C. 5541(3). For

the purposes of 5 U.S.C. 5545a, 5 U.S.C.

5542(d) and section 13(a)(16) and (b)(30)

of the FLSA (29 U.S.C. 213(a)(16) and

(b)(30)), such pilots are deemed to be

criminal investigators as defined in 5

U.S.C. 5545a.

19. Subpart F—Child Labor

This new subpart sets forth the

minimum age standards and delineates

the respective responsibilities of an

agency and OPM regarding the child

labor provisions of the Act.

20. Subpart G—FLSA Claims and

Compliance

This new subpart describes the

applicability of OPM’s FLSA claims

regulations, time limits that must be

observed, avenues of review, the

claimant’s right to designate a

representative, the form and content of
Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules 45067

an FLSA claim, responsibilities of

claimants and agencies, the

circumstances under which an FLSA

claim may be withdrawn or denied, the

finality and effect of an OPM FLSA

claim decision, the availability of

information from an FLSA claim file,

and where to file an FLSA claim with

OPM.

Regulatory Flexibility Act

I certify that these regulations will not

have significant economic impact on a

substantial number of small entities

because they affect only Federal

employees and agencies.

List of Subjects in 5 CFR Part 551

Government employees, Wages.

U.S. Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM is proposing to

amend 5 CFR part 551 as follows:

PART 551—PAY ADMINISTRATION

UNDER THE FAIR LABOR

STANDARDS ACT

1. The authority citation for part 551

continues to read as follows:

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

Fair Labor Standards Act of 1938, as

amended by Pub. L. 93–259, 88 Stat. 55 (29

U.S.C. 204f).

2. Subpart A is revised to read as

follows:

Subpart A—General Provisions

Sec.

551.101 General.

551.102 Authority and administration.

551.103 Coverage.

551.104 Definitions.

Subpart A—General Provisions

§ 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.

§ 551.102 Authority and administration.

(a) Office of Personnel Management.

Section 3(e)(2) of the Act authorizes the

application of the provisions of the Act

to any person employed by the

Government of the United States, as

specified in that section. Section 4(f) of

the Act authorizes the Office of

Personnel Management (OPM) to

administer the provisions of the Act.

OPM is the administrator of the

provisions of the Act with respect to any

person employed by an agency, except

as specified in paragraphs (b), (c), and

(d) of this section.

(b) The Equal Employment

Opportunity Commission administers

the equal pay provisions contained in

section 6(d) of the Act.

(c) The Department of Labor

administers the Act for the following

United States Government entities:

(1) The Library of Congress;

(2) The United States Postal Service;

(3) The Postal Rate Commission; and

(4) The Tennessee Valley Authority.

(d) The Office of Compliance

administers the Act for the following

United States Government entities:

(1) The United States House of

Representatives;

(2) The United States Senate;

(3) The Capitol Guide Service;

(4) The Capitol Police;

(5) The Congressional Budget Office;

(6) The Office of the Architect of the

Capitol;

(7) The Office of the Attending

Physician;

(8) The Office of Compliance; and

(9) The Office of Technology

Assessment.

§ 551.103 Coverage.

(a) Covered. Any employee of an

agency who is not specifically excluded

by another statute is covered by the Act.

This includes any person who is—

(1) Defined as an employee in section

2105 of title 5, United States Code;

(2) Appointed under other

appropriate authority; or

(3) Suffered or permitted to work by

an agency whether or not formally

appointed.

(b) Not covered. The following

persons are not covered under the Act:

(1) A person appointed under

appropriate authority without

compensation;

(2) A trainee; or

(3) A volunteer.

§ 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

§ 551.206 of this part.

Agency, for purposes of OPM’s

administration of the Act, means any

instrumentality of the United States

Government, or any constituent element

thereof acting directly or indirectly as

an employer, as this term is defined in

section 3(d) of the Act and in this

section, but does not include the entities

of the United States Government listed

in § 551.102 for which the Department

of Labor or the Office of Compliance

administer the Act.

Claim means a written allegation from

a current or former employee

concerning his or her FLSA exemption

status determination or entitlement to

minimum wage or overtime pay for

work performed under the Act.

Claim period means the time during

which the cause or basis of the claim

occurred.

Claimant means a current or former

employee who files an FLSA claim.

Customarily and regularly means a

frequency which must be greater than

occasional but which may be less than

constant. For example, the requirement

in § 551.205(a)(2) of this part will be met

by an employee who normally and

recurrently exercises discretion and

independent judgment in the day-to-day

performance of duties.

De minimis activity or worktime

means an activity or worktime of less

than 10 minutes a day.

Discretion and independent judgment

means work that involves comparing

and evaluating possible courses of

conduct, interpreting results or

implications, and independently taking

action or making a decision after

considering the various possibilities.

However, firm commitments or final

decisions are not necessary to support

exemption. The ‘‘decisions’’ made as a

result of the exercise of independent

judgment may consist of

recommendations for action rather than

the actual taking of action. The fact that

an employee’s decisions are subject to

review, and that on occasion the

decisions are revised or reversed after

review, does not mean that the

employee is not exercising discretion

and independent judgment of the level

required for exemption. Work reflective

of discretion and independent judgment

must meet the three following criteria:

(1) The work must be sufficiently

complex and varied so as to customarily

and regularly require discretion and

independent judgment in determining

the approaches and techniques to be

used, and in evaluating results. This

precludes exempting an employee who

performs work primarily requiring skill
45068 Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules

in applying standardized techniques or

knowledge of established procedures,

precedents, or other guidelines which

specifically govern the employee’s

action.

(2) The employee must have the

authority to make such determinations

during the course of assignments. This

precludes exempting trainees who are in

a line of work which requires discretion

but who have not been given authority

to decide discretionary matters

independently.

(3) The decisions made independently

must be significant. The term

‘‘significant’’ is not so restrictive as to

include only the kinds of decisions

made by employees who formulate

policies or exercise broad commitment

authority. However, the term does not

extend to the kinds of decisions that

affect only the procedural details of the

employee’s own work, or to such

matters as deciding whether a situation

does or does not conform to clearly

applicable criteria.

Emergency means a temporary

condition that poses a direct threat to

human life or safety, serious damage to

property, or serious disruption to the

operations of an activity, as determined

by the employing agency.

Employ means to engage a person in

an activity that is for the benefit of an

agency, and includes any hours of work

that are suffered or permitted.

Employee means a person who is

employed—

(1) In an executive agency as defined

in section 105 of title 5, United States

Code;

(2) As a civilian in a military

department as defined in section 102 of

title 5, United States Code;

(3) In a nonappropriated fund

instrumentality of an executive agency

or a military department; or

(4) In a unit of the judicial branch of

the Government that has positions in

the competitive service.

Employer, as defined in section 3(d)

of the Act, means any person acting

directly or indirectly in the interest of

an employer in relation to an employee

and includes a public agency, but does

not include any labor organization

(other than when acting as an employer)

or anyone acting in the capacity of

officer or agent of such labor

organization.

Essential part of administrative or

professional functions means work that

is included as an integral part of

administrative or professional exempt

work. This work is identified by

examining the processes involved in

performing the exempt function. For

example, the processes involved in

evaluating a body of information

include collecting and organizing

information; analyzing, evaluating, and

developing conclusions; and frequently,

preparing a record of findings and

conclusions. Often collecting or

compiling information and preparing

reports or other records, if divorced

from the evaluative function, are

nonexempt tasks. When an employee

who performs the evaluative functions

also performs some or all of these

related steps, all such work (for

example, collecting background

information, recording test results,

tabulating data, or typing reports) is

included in the employee’s exempt

duties.

Executive employee means an

employee who meets the criteria in

section 551.205 of this part.

Exempt area means any foreign

country, or any territory under the

jurisdiction of the United States other

than the following locations:

(1) A State of the United States;

(2) The District of Columbia;

(3) Puerto Rico;

(4) The U.S. Virgin Islands;

(5) Outer Continental Shelf Lands as

defined in the Outer Continental Shelf

Lands Act (67 Stat. 462);

(6) American Samoa;

(7) Guam;

(8) Midway Atoll;

(9) Wake Island;

(10) Johnston Island; and

(11) Palmyra.

FLSA exempt means not covered by

the minimum wage and overtime

provisions of the Act.

FLSA exemption status means an

employee’s designation by the

employing agency as either FLSA

exempt or FLSA nonexempt from the

minimum wage and overtime provisions

of the Act.

FLSA exemption status determination

claim means a claim from a current or

former employee challenging the

correctness of his or her FLSA

exemption status determination.

FLSA nonexempt means covered by

the minimum wage and overtime

provisions of the Act.

FLSA overtime pay, for the purpose of

§ 551.208 of this part, means overtime

pay under this part.

FLSA pay claim means a claim from

a current or former employee

concerning his or her entitlement to

minimum wage or overtime pay for

work performed under the Act.

Foreign exemption means a provision

of the Act under which the minimum

wage, overtime, and child labor

provisions of the Act do not apply to

any employee who spends all hours of

work in a given workweek in an exempt

area.

Formulation or execution of

management programs or policies

means work that involves management

programs and policies which range from

broad national goals expressed in

statutes or Executive orders to specific

objectives of a small field office.

Employees make policy decisions or

participate indirectly, through

developing or recommending proposals

that are acted on by others. Employees

significantly affect the execution of

management programs or policies

typically when the work involves

obtaining compliance with such policies

by other individuals or organizations,

within or outside of the Federal

Government, or making significant

determinations furthering the operation

of programs and accomplishment of

program objectives. Administrative

employees engaged in such work

typically perform one or more phases of

program management (that is, planning,

developing, promoting, coordinating,

controlling, or evaluating operating

programs of the employing organization

or of other organizations subject to

regulation or other controls).

Hours of work means all time spent by

an employee performing an activity for

the benefit of an agency and under the

control or direction of the agency. Hours

of work are creditable for the purposes

of determining overtime pay under

subpart D of this part. Section 551.401

of subpart D further explains this term.

However, whether time is credited as

hours of work is determined by

considering many factors, such as the

rules in subparts D and E of this part,

provisions of law, Comptroller General

decisions, OPM policy guidance, agency

policy and regulations, negotiated

agreements, the rules in part 550 of this

chapter (for hours of work for travel),

and the rules in part 410 of this chapter

(for hours of work for training).

Management or general business

function or supporting service, as

distinguished from production

functions, means the work of employees

who provide support to line managers.

(1) These employees furnish such

support by—

(i) Providing expert advice in

specialized subject matter fields, such as

that provided by management

consultants or systems analysts;

(ii) Assuming facets of the overall

management function, such as safety

management, personnel management, or

budgeting and financial management;

(iii) Representing management in

such business functions as negotiating

and administering contracts,

determining acceptability of goods or

services, or authorizing payments; or
Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules 45069

(iv) Providing supporting services,

such as automated data processing,

communications, or procurement and

distribution of supplies.

(2) Neither the organizational location

nor the number of employees

performing identical or similar work

changes general management, business,

or servicing functions into production

functions. The work, however, must

involve substantial discretion on

matters of enough importance that the

employee’s actions and decisions have a

noticeable impact on the effectiveness of

the organization advised, represented,

or serviced.

Nonexempt area means any of the

following locations:

(1) A State of the United States;

(2) The District of Columbia;

(3) Puerto Rico;

(4) The U.S. Virgin Islands;

(5) Outer Continental Shelf Lands as

defined in the Outer Continental Shelf

Lands Act (67 Stat. 462);

(6) American Samoa;

(7) Guam;

(8) Midway Atoll;

(9) Wake Island;

(10) Johnston Island; and

(11) Palmyra.

Participation in the executive or

administrative functions of a

management official means the

participation of employees, variously

identified as secretaries, administrative

or executive assistants, aides, etc., in

portions of the managerial or

administrative functions of a supervisor

whose scope of responsibility precludes

personally attending to all aspects of the

work. To support exemption, such

employees must be delegated and

exercise substantial authority to act for

the supervisor in the absence of specific

instructions or procedures, and take

actions which significantly affect the

supervisor’s effectiveness.

Perform work in connection with an

emergency means to perform work that

is directly related to resolving or coping

with an emergency, or its immediate

aftermath, as determined by the

employing agency.

Preserve the claim period means to

establish the period of possible

entitlement to back pay by filing a

written claim with either the agency

employing the claimant during the

claim period or with OPM. The date the

agency or OPM receives the claim is the

date that determines the period of

possible entitlement to back pay.

Primary duty typically means the duty

that constitutes the major part (over 50

percent) of an employee’s work. A duty

constituting less than 50 percent of the

work may be credited as the primary

duty for exemption purposes provided

that duty—

(1) Constitutes a substantial, regular

part of a position;

(2) Governs the classification and

qualification requirements of the

position; and

(3) Is clearly exempt work in terms of

the basic nature of the work, the

frequency with which the employee

must exercise discretion and

independent judgment, and the

significance of the decisions made.

Professional employee means an

employee who meets the criteria in

section 551.207 of this part.

Reckless disregard of the

requirements of the Act means failure to

make adequate inquiry into whether

conduct is in compliance with the Act.

Recognized organizational unit means

an established and defined

organizational entity which has

regularly assigned employees and for

which a supervisor is responsible for

planning and accomplishing a

continuing workload. This distinguishes

supervisors from leaders who head

temporary groups formed to perform

assignments of limited duration.

Situations 1 through 4 means the four

basic situations described under Factor

I, Nature of Supervisory Responsibility,

in the Federal Wage System Job Grading

Standard for Supervisors. The situations

depict successively higher levels of

supervisory responsibility and authority

for scheduling work operations,

planning use of resources to accomplish

work, directing subordinates in

performing work assignments, and

carrying out administrative duties.

Statute of limitations means the time

frame within which an FLSA pay claim

must be filed, starting from the date the

right accrued. All FLSA pay claims filed

on or after June 30, 1994, are subject to

a 2-year statute of limitations, except in

cases of willful violation where the

statute of limitations is 3 years.

Suffered or permitted work means any

work performed by an employee for the

benefit of an agency, whether requested

or not, provided the employee’s

supervisor knows or has reason to

believe that the work is being performed

and has an opportunity to prevent the

work from being performed.

Supervisory and closely related work

means work that is included in the

calculation of exempt work for

supervisory positions.

(1) Work is considered closely related

to exempt supervisory work if it

contributes to the effective supervision

of subordinate workers, or the smooth

functioning of the unit supervised, or

both. Examples of closely related work

include the following:

(i) Maintaining various records

pertaining to workload or employee

performance;

(ii) Performing setup work that

requires special skills, typically is not

performed by production employees in

the occupation, and does not approach

the volume that would justify hiring a

specially trained employee to perform;

and

(iii) Performing infrequently recurring

or one-time tasks which are impractical

to delegate because they would disrupt

normal operations or take longer to

explain than to perform.

(2) Activities in which both workers

and supervisors are required to engage

themselves are considered to be closely

related to the primary duty of the

position, for example, physical training

during tours of duty for firefighting and

law enforcement personnel.

Temporary work or duties means

work or duties an employee must

temporarily perform that are not

consistent with the employee’s official

position description. The period of

temporary work or duties may or may

not involve a different geographic duty

location.

Title 5 overtime pay, for the purpose

of § 551.208 of this part, means overtime

pay under part 550 of this chapter.

Trainee means a person who does not

meet the definition of employee in this

section and who is assigned or attached

to a Federal activity primarily for

training. A person who attends a

training program under the following

conditions is considered a trainee and,

therefore, is not an employee of the

Government of the United States for

purposes of the Act:

(1) The training, even though it

includes actual operation of the

facilities of the Federal activity, is

similar to that given in a vocational

school or other institution of learning;

(2) The training is for the benefit of

the individual;

(3) The trainee does not displace

regular employees, but, rather, is

supervised by them;

(4) The Federal activity which

provides the training derives no

immediate advantage from the activities

of the trainee; on occasion its operations

may actually be impeded;

(5) The trainee is not necessarily

entitled to a job with the Federal

activity at the completion of the training

period; and

(6) The agency and the trainee

understand that the trainee is not

entitled to the payment of wages from

the agency for the time spent in training.

Volunteer means a person who does

not meet the definition of employee in

this section and who volunteers or
45070 Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules

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 § 551.411 of this part.

Worktime, for the purpose of

determining FLSA exemption status,

means time spent actually performing

work. This excludes periods of time

during which an employee performs no

work, such as standby time, sleep time,

meal periods, and paid leave.

Worktime in a representative

workweek means the average

percentages of worktime over a period

long enough to even out normal

fluctuations in workloads and be

representative of the job as a whole.

Workweek means a fixed and

recurring period of 168 hours—seven

consecutive 24-hour periods. It need not

coincide with the calendar week but

may begin on any day and at any hour

of a day. For employees subject to part

610 of this chapter, the workweek shall

be the same as the administrative

workweek defined in § 610.102 of this

chapter.

Workweek basis means the unit of

time used as the basis for applying

overtime standards under the Act and,

for employees under flexible or

compressed work schedules, under 5

U.S.C. 6121(6) or (7). The Act takes a

single workweek as its standard and

does not permit averaging of hours over

two or more weeks, except for

employees engaged in fire protection or

law enforcement activities under section

7(k) of the Act.

3. Subpart B is revised to read as

follows:

Subpart B—Exemptions and Exclusions

Sec.

551.201 Agency authority.

551.202 General principles governing

exemptions.

551.203 Exemption of General Schedule

employees.

551.204 Exemption of Federal Wage System

employees.

551.205 Executive exemption criteria.

551.206 Administrative exemption criteria.

551.207 Professional exemption criteria.

551.208 Effect of performing temporary

work or duties on FLSA exemption

status.

551.209 Foreign exemption criteria.

551.210 Exemption of employees receiving

availability pay.

551.211 Statutory exclusion.

Subpart B—Exemptions and

Exclusions

§ 551.201 Agency authority.

All employees are presumed to be

FLSA nonexempt unless the employing

agency makes a determination that the

position meets one or more of the

exemption criteria of this subpart. The

employing agency must exempt from

the overtime provisions of the Act any

employee who meets the exemption

criteria of this subpart and such

supplemental interpretations or

instructions issued by OPM.

§ 551.202 General principles governing

exemptions.

In all exemption determinations, the

agency must observe the following

principles:

(a) Exemption criteria must be

narrowly construed to apply only to

those employees who are clearly within

the terms and spirit of the exemption.

(b) The burden of proof rests with the

agency that asserts the exemption.

(c) All employees who clearly meet

the criteria for exemption must be

designated FLSA exempt. If there is a

reasonable doubt as to whether an

employee meets the criteria for

exemption, the employee should be

designated FLSA nonexempt.

(d) There are groups of General

Schedule employees who are FLSA

nonexempt because they do not fit any

of the exemption categories. These

groups include the following:

(1) Nonsupervisory General Schedule

employees in equipment operating and

protective occupations, and most

clerical occupations (see the definition

of participation in the executive or

administrative functions of a

management official in subpart A of this

part);

(2) Nonsupervisory General Schedule

employees performing technician work

in positions properly classified below

GS–9 (or the equivalent level in other

white-collar pay systems) and many, but

not all, of those positions properly

classified at GS–9 or above (or the

equivalent level in other white-collar

pay systems); and

(3) Nonsupervisory General Schedule

employees at any grade level in

occupations requiring highly

specialized technical skills and

knowledges that can be acquired only

through prolonged job training and

experience, such as the Air Traffic

Control series, GS–2152, or the Aircraft

Operations series, GS–2181, unless such

employees are performing

predominantly administrative functions

rather than the technical work of the

occupation.

(e) Although separate criteria are

provided for the exemption of

executive, administrative, and

professional employees, those categories

are not mutually exclusive. All exempt

work, regardless of category, must be

considered. The only restriction is that,

when the requirements of one category

are more stringent, the combination of

exempt work must meet the more

stringent requirements.

(f) Failure to meet the criteria for

exemption under what might appear to

be the most appropriate criteria does not

preclude exemption under another

category. For example, an engineering

technician who fails to meet the

professional exemption criteria may be

performing exempt administrative work,

or an administrative officer who fails to
Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules 45071

meet the administrative criteria may be

performing exempt executive work.

(g) Although it is normally feasible

and more convenient to identify the

exemption category, this is not essential.

An exemption may be based on a

combination of functions, no one of

which constitutes the primary duty, or

the employee’s primary duty may

involve two categories which are

intermingled and difficult to segregate.

This does not preclude exempting the

employee, provided the work as a whole

clearly meets the other exemption

criteria.

(h) The designation of an employee as

FLSA exempt or nonexempt ultimately

rests on the duties actually performed

by the employee.

§ 551.203 Exemption of General Schedule

employees.

(a) GS–4 or below. Any employee in

a position properly classified at GS–4 or

below (or the equivalent level in other

white-collar pay systems) is nonexempt,

unless the employee is subject to the

foreign exemption in § 551.209.

(b) GS–5 or above. Any employee in

a position properly classified at GS–5 or

above (or the equivalent level in other

white-collar pay systems) is exempt

only if the employee is an executive,

administrative, or professional

employee as defined in this subpart,

unless the employee is subject to

§ 551.208 (the effect of performing

temporary work or duties on FLSA

exemption status) or § 551.209 (the

foreign exemption).

§ 551.204 Exemption of Federal Wage

System employees.

(a) Nonsupervisory. A nonsupervisory

employee in the Federal Wage System

or under other comparable wage

systems is nonexempt, unless the

employee is subject to § 551.208 (the

effect of performing temporary work or

duties on FLSA exemption status) or

§ 551.209 (the foreign exemption).

(b) Supervisory. A supervisory

employee in the Federal Wage System

or under other comparable wage

systems is exempt only if the employee

is an executive employee as defined in

§ 551.205, unless the employee is

subject to § 551.208 (the effect of

performing temporary work or duties on

FLSA exemption status) or § 551.209

(the foreign exemption).

§ 551.205 Executive exemption criteria.

An executive employee is a supervisor

or manager who manages a Federal

agency or any subdivision thereof

(including the lowest recognized

organizational unit with a continuing

function) and customarily and regularly

directs the work of subordinate

employees and meets both of the

following criteria:

(a) Primary duty test. The primary

duty test is met if the employee—

(1) Has authority to make personnel

changes that include, but are not limited

to, selecting, removing, advancing in

pay, or promoting subordinate

employees, or has authority to suggest

or recommend such actions with

particular consideration given to these

suggestions and recommendations; and

(2) Customarily and regularly

exercises discretion and independent

judgment in such activities as work

planning and organization; work

assignment, direction, review, and

evaluation; and other aspects of

management of subordinates, including

personnel administration.

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

primary duty test that applies to all

employees, the following employees

must spend 80 percent or more of the

worktime in a representative workweek

on supervisory and closely related work

to meet the 80-percent test:

(1) Employees in positions properly

classified in the General Schedule at

GS–5 or GS–6 (or the equivalent level in

other white-collar pay systems);

(2) Firefighting or law enforcement

employees in positions properly

classified in the General Schedule at

GS–7, GS–8, or GS–9 who are subject to

section 207(k) of title 29, United States

Code; and

(3) Supervisors in positions properly

classified in the Federal Wage System

below situation 3 of Factor I of the

Federal Wage System Job Grading

Standard for Supervisors (or the

equivalent level in other comparable

wage systems).

§ 551.206 Administrative exemption

criteria.

An administrative employee is an

advisor or assistant to management, a

representative of management, or a

specialist in a management or general

business function or supporting service

and meets all four of the following

criteria:

(a) Primary duty test. The primary

duty test is met if the employee’s

work—

(1) Significantly affects the

formulation or execution of

management programs or policies; or

(2) Involves general management or

business functions or supporting

services of substantial importance to the

organization serviced; or

(3) Involves substantial participation

in the executive or administrative

functions of a management official.

(b) Nonmanual work. The employee

performs office or other predominantly

nonmanual work which is—

(1) Intellectual and varied in nature;

or

(2) Of a specialized or technical

nature that requires considerable special

training, experience, and knowledge.

(c) Discretion and independent

judgment. The employee frequently

exercises discretion and independent

judgment, under only general

supervision, in performing the normal

day-to-day work.

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

primary duty test that applies to all

employees, General Schedule

employees in positions properly

classified at GS–5 or GS–6 (or the

equivalent level in other white-collar

pay systems) must spend 80 percent or

more of the worktime in a representative

workweek on administrative functions

and work that is an essential part of

those functions to meet the 80-percent

test.

§ 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 highlyspecialized knowledge in computer

systems, analysis, programming, and

software engineering or other similar

work in the computer software field.
45072 Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules

The work must consist of one or more

of the following:

(i) The application of systems analysis

techniques and procedures, including

consulting with users, to determine

hardware, software, or system

functional specifications; or

(ii) The design, development,

documentation, analysis, creation,

testing, or modification of computer

systems or programs, including

prototypes, based on and related to user

or system design specifications; or

(iii) The design, documentation,

testing, creation, or modification of

computer programs related to machine

operating systems; or

(iv) A combination of the duties

described in paragraphs (a)(3)(i), (3)(ii),

and (3)(iii) of this section, the

performance of which requires the same

level of skills.

(b) Intellectual and varied in nature.

The employee’s work is predominantly

intellectual and varied in nature,

requiring creative, analytical,

evaluative, or interpretative thought

processes for satisfactory performance.

(c) Discretion and independent

judgment. The employee frequently

exercises discretion and independent

judgment, under only general

supervision, in performing the normal

day-to-day work.

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

primary duty test that applies to all

employees, General Schedule

employees in positions properly

classified at GS–5 or GS–6 (or the

equivalent level in other white-collar

pay systems), must spend 80 percent or

more of the worktime in a representative

workweek on professional functions and

work that is an essential part of those

functions to meet the 80-percent test.

§ 551.208 Effect of performing temporary

work or duties on FLSA exemption status.

(a) Applicability.—(1) When

applicable. This section applies only

when an employee must temporarily

perform work or duties that are not

consistent with the employee’s official

position description. The period of

temporary work or duties may or may

not involve a different geographic duty

location. The FLSA exemption status of

employees during a period of temporary

work or duties must be determined as

described in this section.

(2) When not applicable. This section

does not apply when an employee is

detailed to an identical additional

position as the employee’s position or to

a position of the same grade, series

code, basic duties, and FLSA exemption

status as the employee’s position.

(b) Effect on nonexempt employees.

(1) A nonexempt employee who must

temporarily perform work or duties that

are not consistent with the employee’s

official position description remains

nonexempt for the entire period of

temporary work or duties unless all

three of the following conditions are

met:

(i) 30-day test. The period of

temporary work or duties exceeds 30

days; and

(ii) Exempt work or duty. The

employee’s primary duty for the period

of temporary work or duties is exempt

work or duty as defined in this part; and

(iii) Positions at GS–7 or above, or at

situations 3 or 4. The employee’s

position (including a position to which

the employee is temporarily promoted)

is properly classified in the General

Schedule at GS–7 or above (or the

equivalent level in other white-collar

pay systems) or properly classified in

the Federal Wage System as a supervisor

at situation 3 or 4 of Factor I of the

Federal Wage System Job Grading

Standard for Supervisors (or the

equivalent level in other comparable

wage systems).

(2) If a nonexempt employee becomes

exempt under the criteria in paragraph

(b)(1) of this section—

(i) The employee must be considered

exempt for the entire period of

temporary work or duties; and

(ii) If the employee received FLSA

overtime pay for work performed during

the first 30 days of the temporary work

or duties, the agency must recalculate

the employee’s total pay retroactive to

the beginning of that period because the

employee is now not entitled to the

FLSA overtime pay received but may be

owed title 5 overtime pay.

(c) Effect on exempt employees. (1)

An exempt employee not covered by the

special provision of paragraph (c)(3) of

this section who must temporarily

perform work or duties that are not

consistent with the employee’s official

position description remains exempt for

the entire period of temporary work or

duties unless all three of the following

conditions are met:

(i) 30-day test. The period of

temporary work or duties exceeds 30

days; and

(ii) Not exempt work. The employee’s

primary duty for the period of

temporary work or duties is not exempt

work or duty as defined in this part; and

(iii) Positions at GS–7 or above, or at

situation 3 or 4. The employee’s

position (including a position to which

the employee is temporarily promoted)

is properly classified in the General

Schedule at GS–7 or above (or the

equivalent level in other white-collar

pay systems) or properly classified in

the Federal Wage System as a supervisor

at situation 3 or 4 of Factor I of the

Federal Wage System Job Grading

Standard for Supervisors (or the

equivalent level in other comparable

wage systems).

(2) If an exempt employee becomes

nonexempt under the criteria in

paragraph (c)(1) of this section—

(i) The employee must be considered

nonexempt for the entire period of

temporary work or duties; and

(ii) If the employee received title 5

overtime pay for work performed during

the first 30 days of the temporary work

or duties, the agency must recalculate

the employee’s total pay retroactive to

the beginning of that period because the

employee may now not be entitled to

some or all of the title 5 overtime pay

received but may be owed FLSA

overtime pay.

(3) Special provision for exempt

employees at GS–5 or GS–6, or below

situation 3: The exemption status of

certain exempt employees who must

temporarily perform work or duties that

are not consistent with their official

position description must be

determined on a workweek basis for the

period of temporary work or duties.

Such employees are exempt employees

whose positions (including a position to

which the employee is temporarily

promoted) are properly classified in the

General Schedule at GS–5 or GS–6 (or

the equivalent level in other whitecollar 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
Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules 45073

other than to assign qualified employees

to temporarily perform work or duties in

connection with the emergency. In such

a designated emergency—

(1) The exemption status of a

nonexempt employee remains

nonexempt whether the employee

performs nonexempt work or exempt

work during the emergency; and

(2) The exemption status of an exempt

employee must be determined on a

workweek basis. The exemption status

determination of exempt employees will

result in the employee either remaining

exempt or becoming nonexempt for that

workweek, as described in paragraphs

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

(i) Remain exempt. An exempt

employee remains exempt for any

workweek in which the employee

performs exempt work or duties for 80

percent or more of the worktime in a

given workweek.

(ii) Become nonexempt. An exempt

employee becomes nonexempt for any

workweek in which the employee

performs nonexempt work or duties for

more than 20 percent of the worktime in

a given workweek.

§ 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

§ 551.102 of this part.

(b) Foreign exemption applies. If an

employee meets one of the two

following criteria, the employee is

subject to the foreign exemption of the

Act and the minimum wage, overtime,

and child labor provisions of the Act do

not apply.

(1) The employee is permanently

stationed in an exempt area and spends

all hours of work in a given workweek

in one or more exempt areas; or

(2) The employee is not permanently

stationed in an exempt area, but spends

all hours of work in a given workweek

in one or more exempt areas.

(c) Foreign exemption does not apply.

For any given workweek, the minimum

wage, overtime, and child labor

provisions of the Act apply to an

employee permanently stationed in an

exempt area who spends any hours of

work in any nonexempt area. For that

workweek, the employee is not subject

to the foreign exemption, and the

agency must determine the exemption

status of such an employee as described

paragraphs (c)(1) and (c)(2) of this

section. The foreign exemption does not

resume until the employee again meets

one of the criteria in paragraph (b) of

this section.

(1) Same duties. If the duties

performed during that workweek are

consistent with the employee’s official

position description, the agency must

designate the employee the same FLSA

exemption status as if the employee

were permanently stationed in any

nonexempt area.

(2) Different duties. If the duties

performed during that workweek are not

consistent with the employee’s official

position description—

(i) The agency must first designate the

employee the same FLSA exemption

status as the employee would have been

designated based on the duties included

in the employee’s official position

description if the employee were

permanently stationed in any

nonexempt area; and

(ii) The agency must determine the

employee’s exemption status for that

workweek by applying § 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.

§ 551.210 Exemption of employees

receiving availability pay.

The following employees are exempt

from the hours of work and overtime

pay provisions of the Act:

(a) A criminal investigator receiving

availability pay under section 550.181

of this chapter; and

(b) A pilot employed by the United

States Customs Service who is a law

enforcement officer as defined in

section 5541(3) of title 5, United States

Code, and who receives availability pay

under section 5545a(i) of title 5, United

States Code.

§ 551.211 Statutory exclusion.

Customs officers whose exclusive

entitlement to overtime pay is governed

by section 5 of the Act of Feb. 13, 1911,

as amended (19 U.S.C. 261 and 267), are

excluded from the hours of work and

overtime pay provisions of the FLSA. As

used in section 5, the term ‘‘customs

officer’’ means a customs inspector, a

supervisory customs inspector, a canine

enforcement officer, or a supervisory

canine enforcement officer.

4. Subpart F is added to read as

follows:

Subpart F—Child Labor

Sec.

551.601 Minimum age standards.

551.602 Responsibilities.

Subpart F—Child Labor

§ 551.601 Minimum age standards.

(a) 16-year minimum age. The Act, in

section 3(l), sets a general 16-year

minimum age, which applies to all

employment subject to its child labor

provisions, with certain exceptions not

applicable here.

(b) 18-year minimum age. The Act, in

section 3(1), also sets an 18-year

minimum age with respect to

employment in any occupation found

and declared by the Secretary of Labor

to be particularly hazardous for the

employment of minors of such age or

detrimental to their health or wellbeing.

§ 551.602 Responsibilities.

(a) Agencies must remain cognizant of

and abide by regulations and orders

published by the Secretary of Labor

regarding the employment of

individuals under the age of 18 years.

These regulations and orders govern the

minimum age at which persons under

the age of 18 years may be employed

and the occupations in which they may

be employed. Persons under the age of

18 years must not be employed in

occupations or engage in work deemed

hazardous by the Secretary of Labor.

(b) OPM will decide claims

concerning the employment of persons

under the age of 18 years. Claims must

be filed following the procedures set

forth in subpart G of this part.

5. Subpart G is added to read as

follows:

Subpart G—FLSA Claims and Compliance

Sec.

551.701 Applicability.

551.702 Time limits.

551.703 Avenues of review.

551.704 Claimant’s representative.

551.705 Form and content of an FLSA

claim.

551.706 Responsibilities.

551.707 Withdrawal or denial of an FLSA

claim.

551.708 Finality and effect of OPM FLSA

claim decision.

551.709 Availability of information.

551.710 Where to file an FLSA claim with

OPM.

Subpart G—FLSA Claims and

Compliance

§ 551.701 Applicability.

(a) Applicable. This subpart applies to

FLSA exemption status determination

claims, FLSA pay claims for minimum

wage or overtime pay for work

performed under the Act, and claims
45074 Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules

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.

§ 551.702 Time limits.

(a) Claims. A claimant may file an

FLSA claim at any time under the child

labor provisions of the Act or

challenging the correctness of his or her

FLSA exemption status determination.

A claimant may also file an FLSA claim

concerning his or her entitlement to

minimum wage or overtime pay for

work performed under the Act;

however, time limits apply to FLSA pay

claims. All FLSA pay claims filed on or

after June 30, 1994, are subject to a 2-

year statute of limitations (3 years for

willful violations).

(b) Statute of limitations. An FLSA

pay claim filed on or after June 30, 1994,

is subject to the statute of limitations

contained in the Portal-to-Portal Act of

1947, as amended (section 255a of title

29, United States Code), which imposes

a 2-year statute of limitations, except in

cases of a willful violation where the

statute of limitations is 3 years. In

deciding a claim, a determination must

be made as to whether the cause or basis

of the claim was the result of a willful

violation on the part of the agency.

(c) Preserving the claim period. A

claimant or a claimant’s designated

representative may preserve the claim

period by submitting a written claim

either to the agency employing the

claimant during the claim period or to

OPM. The date the agency or OPM

receives the claim is the date that

determines the period of possible

entitlement to back pay. The claimant is

responsible for proving when the claim

was received by the agency or OPM. The

claimant should retain documentation

to establish when the claim was

received by the agency or OPM, such as

by filing the claim using certified, return

receipt mail, or by requesting that the

agency or OPM provide written

acknowledgment of receipt of the claim.

If a claim for back pay is established, the

claimant will be entitled to pay for a

period of up to 2 years (3 years for a

willful violation) back from the date the

claim was received.

§ 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,

§§ 551.704 through 551.711) do not

apply to such employees.

(b) Non-NGP administrative review by

agency or OPM. A claimant may file a

claim with the agency employing the

claimant during the claim period or

with OPM regarding matters arising

under the Act if, during the entire claim

period, the claimant—

(1) Was not a member of a bargaining

unit, or

(2) Was a member of a bargaining unit

not covered by a collective bargaining

agreement, or

(3) Was a member of a bargaining unit

covered by a collective bargaining

agreement that specifically excluded

matters under the Act from the scope of

the negotiated grievance procedure.

(c) Judicial review. Nothing in this

subpart limits the right of a claimant to

bring an action in an appropriate United

States court. OPM will not decide an

FLSA claim that is in litigation.

§ 551.704 Claimant’s representative.

A claimant may designate a

representative to assist in preparing or

presenting a claim. The claimant must

designate the representative in writing.

A representative has no right to

participate in OPM fact-finding. An

agency may disallow a claimant’s

representative who is a Federal

employee in any of the following

circumstances:

(a) When the individual’s activities as

a representative would cause a conflict

of interest or position;

(b) When the designated

representative cannot be released from

his or her official duties because of the

priority needs of the Government; or

(c) When the release of the designated

representative would give rise to

unreasonable costs to the Government.

§ 551.705 Form and content of an FLSA

claim.

(a) FLSA claim filed with agency. An

FLSA claim filed with an agency should

be made according to appropriate

agency procedures. At the discretion of

the agency, the agency may forward the

claim to OPM on the claimant’s behalf.

The claimant is responsible for ensuring

that OPM receives all the information

requested in paragraph (b) of this

section.

(b) FLSA claim filed with OPM. An

FLSA claim filed with OPM must be

made in writing and must be signed by

the claimant or the claimant’s

representative. Relevant information

may be submitted to OPM at any time

following the initial submission of a

claim to OPM and prior to OPM’s

decision on the claim. The claim must

include the following:

(1) The identity of the claimant (see

§ 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 § 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.
Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules 45075

§ 551.706 Responsibilities.

(a) Claimant.— (1) Providing

information to OPM. For all FLSA

claims, the claimant or claimant’s

designated representative must provide

any additional information requested by

OPM within 15 workdays after the date

of the request, unless OPM grants a

longer period of time in which to

provide the requested information. The

disclosure of information by a claimant

is voluntary. However, OPM may be

unable to render a decision on a claim

without the information requested. In

such a case, the claim will be denied

without further action being taken by

OPM. In the case of an FLSA pay claim,

it is the claimant’s responsibility to

provide evidence that the claim period

was preserved in accordance with

§ 551.702 and of the liability of the

agency and the claimant’s right to

payment.

(2) Requesting confidentiality. If the

claimant wishes the claim to be treated

confidentially, the claim must

specifically request that the identity of

the claimant not be revealed to the

agency. Witnesses or other sources may

also request confidentiality. OPM will

make every effort to conduct its

investigation in a way to maintain

confidentiality. If OPM is unable to

obtain sufficient information to render a

decision and preserve the requested

confidentiality, OPM will notify the

claimant that the claim will be denied

with no further action by OPM unless

the claimant voluntarily provides

written authorization for his or her

name to be revealed.

(b) Agency. (1) In FLSA exemption

status determination claims, the burden

of proof rests with the agency that

asserts the FLSA exemption.

(2) The agency must provide the

claimant with a written

acknowledgment of the date the claim

was received.

(3) The agency must provide any

information requested by OPM within

15 workdays after the date of the

request, unless OPM grants a longer

period of time in which to provide the

requested information.

§ 551.707 Withdrawal or denial of an FLSA

claim.

(a) Withdrawal. A claimant or the

claimant’s representative may withdraw

a claim at any time prior to the issuance

of an OPM FLSA claim decision by

providing written notice to the OPM

office where the claim was filed.

(b) Denial. OPM may, at its discretion,

deny an FLSA claim if the claimant or

the claimant’s designated representative

fails to provide requested information

within 15 workdays after the date of the

request, unless OPM grants a longer

period of time in which to provide the

requested information. OPM may, at its

discretion, reconsider a denied claim on

a showing that circumstances beyond

the claimant’s control prevented pursuit

of the claim.

§ 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.

§ 551.709 Availability of information.

(a) Except when the claimant has

requested confidentiality, the agency

and the claimant must provide to each

other a copy of all information

submitted with respect to the claim.

(b) When a claimant has not requested

confidentiality, OPM will disclose to the

parties concerned the information

contained in an FLSA claim file. When

a claimant has requested confidentiality,

OPM will delete any information

identifying the claimant. For the

purposes of this subpart, the parties

concerned means the claimant, any

representative designated in writing,

and any representative of the agency or

OPM involved in the proceeding.

(c) Except when the claimant has

requested confidentiality or the

disclosure would constitute a clearly

unwarranted invasion of personal

privacy, OPM, upon a request which

identifies the individual from whose file

the information is sought, will disclose

the following information from a claim

file to a member of the public:

(1) Confirmation of the name of the

individual from whose file the

information is sought and the names of

the other parties concerned;

(2) The remedy sought;

(3) The status of the claim;

(4) The decision on the claim; and

(5) With the consent of the parties

concerned, other reasonably identified

information from the file.

§ 551.710 Where to file an FLSA claim with

OPM.

An FLSA claim must be filed with the

OPM office serving the area where the

cause or basis of the claim occurred.

Following are OPM addresses and

service areas.

OPM Atlanta Oversight Division

75 Spring Street SW., Suite 972, Atlanta,

GA 30303–3109.

Alabama, Florida, Georgia, Mississippi,

North Carolina, South Carolina, Tennessee,

Virginia (except the Virginia locations listed

under the Washington, DC Oversight

Division).

OPM Chicago Oversight Division

230 S. Dearborn Street, DPN 30–6, Chicago,

IL 60604–1687.

Illinois, Indiana, Iowa, Kansas, Kentucky,

Michigan, Minnesota, Missouri, Nebraska,

North Dakota, Ohio, South Dakota, West

Virginia, Wisconsin.

OPM Dallas Oversight Division

1100 Commerce Street, Room 4C22, Dallas,

TX 75242–9968.

Arizona, Arkansas, Colorado, Louisiana,

Montana, New Mexico, Oklahoma, Texas,

Utah, Wyoming.

OPM Philadelphia Oversight Division

600 Arch Street, Room 3400, Philadelphia,

PA 19106–1596.

Connecticut, Delaware, Maine, Maryland

(except the Maryland locations listed under

the Washington, DC Oversight Division),

Massachusetts, New Hampshire, New Jersey,

New York, Pennsylvania, Rhode Island,

Vermont, Puerto Rico, Virgin Islands.

OPM San Francisco Oversight Division

120 Howard Street, Room 760, San

Francisco, CA 94105–0001.

Alaska, California, Hawaii, Idaho, Nevada,

Oregon, Washington, Pacific Ocean Area

OPM Washington, DC Oversight Division

1900 E Street NW., Room 7675,

Washington, DC 20415–0001.

The District of Columbia

In Maryland: the counties of Charles,

Montgomery, and Prince George’s.

In Virginia: the counties of Arlington,

Fairfax, King George, Loudoun, Prince

William, and Stafford; the cities of

Alexandria, Fairfax, Falls Church, Manassas,

and Manassas Park; and any overseas area
45076 Federal Register / Vol. 62, No. 164 / Monday, August 25, 1997 / Proposed Rules

not listed in the service area of another

Oversight division.

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

BILLING CODE 6325–01–P