67238 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

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: Final rule.

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

ADOMSOE@opm.gov.

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

ADOMSOE@OPM.GOV.

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
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67239

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 § 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.
67240 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

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 § 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 longterm, 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 gradecontrolling duty of’’ before the words

‘‘the employee’s official position

description.’’ We made conforming

changes throughout § 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 § 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 § 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 § 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 § 551.201

and added it as the first general

principle under § 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 highergraded 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 § 551.203.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 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 wellestablished 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 computerrelated occupations, OPM’s proposed

regulations should include a provision

similar to § 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 § 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

61⁄2 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 § 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 gradecontrolling 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
67242 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

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

§ 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 § 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 §§ 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
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 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 § 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
67244 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

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

§ 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 § 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 § 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.

§ 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) 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.

§ 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;
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 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.

§ 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.

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(c) for which the

Department of Labor administers the

Act or § 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 § 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

§ 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.
67246 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

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, 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

§ 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
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 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 gradecontrolling 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 § 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 § 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 § 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.
67248 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

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.

§ 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.

§ 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.

§ 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

§ 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 § 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 in 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 in 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 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
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 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).

§ 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.

§ 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.

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.

§ 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—
67250 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

(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.

§ 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.

(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 gradecontrolling 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 gradecontrolling 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
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 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 § 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 § 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.

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.

§ 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 wellbeing.

§ 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.

§ 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.

§ 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.

§ 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 551.710) 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
67252 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

(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.

§ 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.

§ 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

§ 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.

§ 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 § 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.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67253

§ 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.

§ 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 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.

§ 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