Federal Register / Vol. 60, No. 6 / Tuesday, January 10, 1995 / Proposed Rules 2549

provisions or to prohibit agencies from

implementing a regulatory revision

affecting nonbargaining unit positions.

G. Public Notice

Many individual commenters asked

that we ensure proper dissemination of

National Performance Review initiatives

to all levels of the work force to allow

greater input and commentary. Some

commenters suggested that OPM’s 60-

day comment period on the initial

proposal appeared to be designed to

restrict the number of comments and

commenters.

OPM’s 60-day comment period is the

standard open period for receiving

comments on proposed regulatory

changes. As is our usual practice

required by law, OPM distributed the

time-in-grade proposal to agencies with

instructions for public posting. OPM

also made the proposal available

through its primary electronic bulletin

board, Mainstreet, at 202–606–4800.

OPM issued a press release on the

proposal, and it was widely reported in

the press. We are taking the same steps

with this notice. Furthermore, the

recommendations of the NPR and the

National Partnership Council were

widely reported in the press and in

newsletters that reach employees.

Authority: 5 U.S.C. secs. 552, 3301, 3302;

E.O. 10577, 3 CFR, 1954–1958 Comp., page

218, unless otherwise noted.

Secs. 300.101 through 300.104 also issued

under 5 U.S.C. secs. 7201, 7204, 7701; E.O.

11478, 3 CFR, 1966–1970 Comp., page 803.

Secs. 300.401 through 300.408 also issued

under 5 U.S.C. secs. 1302(c), 2301, and 2302.

Secs. 300.501 through 300.507 also issued

under 5 U.S.C. 1103(a)(5).)

Office of Personnel Management.

James B. King,

Director.

[FR Doc. 95–562 Filed 1–9–95; 8:45 am]

BILLING CODE 6325–01–M

5 CFR Part 551

RIN 3206–AA40

Pay Administration Under the Fair

Labor Standards Act

AGENCY: Office of Personnel

Management.

ACTION: Proposed rule.

SUMMARY: The U.S. Office of Personnel

Management (OPM) is publishing a

proposed rule to amend regulations on

the Fair Labor Standards Act (FLSA or

the ‘‘Act’’). This rule supersedes

instructions contained in Federal

Personnel Manual Letter 551–9, Civil

Service Commission System for

Administering the Fair Labor Standards

Act (FLSA) Compliance and Complaint

System (March 30, 1976), provisionally

retained through December 31, 1994;

and provides for OPM compliance

authority regarding FLSA matters.

DATES: Comments must be received on

or before February 9, 1995.

ADDRESSES: Written comments may be

sent to Bruce Oland, Chief, Program

Development Division, Office of Agency

Compliance and Evaluation, Room

7661, U.S. Office of Personnel

Management, 1900 E Street NW.,

Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT:

Jeffery Miller, (202) 606–2530.

SUPPLEMENTARY INFORMATION: In 1974,

Congress amended the FLSA to

authorize the former Civil Service

Commission (CSC) to administer the Act

for Federal employees. OPM has since

taken over this responsibility and issued

substantive regulations at part 551 of

title 5, Code of Federal Regulations,

prescribing the criteria and conditions

for administration of the Act. These

regulations have, from time to time,

been supplemented by issuances under

the Federal Personnel Manual System

(FPM). FPM Letter 551–9 describes the

complaint and compliance system for

FLSA complaints. One of the key

features of this system is that OPM

served as an adjudicator of individual

(and group) FLSA complaints. This role

remained essentially unchanged until

1990.

On March 30, 1990, a Federal court in

Carter v. Gibbs, 909 F.2d 1452 (Fed. Cir.

1990), cert. denied, 111 S. Ct. 46 (1990),

ruled that the rights of certain

employees to seek review of FLSA

complaints were limited by the Civil

Service Reform Act of 1978 (CSRA). In

this regard, the court determined that

employees covered by negotiated

grievance procedures (NGP’s)

established under Section 7121 of title

5, United States Code, could not seek

judicial review of matters under the Act

and that their only forum in which to

seek relief is through the NGP up to and

including the arbitration process. A

subsequent decision by the Federal

Circuit in Muniz v. U.S., 972 F. 2d 1304

(Fed. Cir. 1992), expanded on Carter by

holding that its principles also applied

to former employees of agencies

(including retirees) and employees

promoted out of bargaining unit

positions.

On October 1, 1990, the Supreme

Court denied certiorari of the Federal

Circuit’s en banc decision in Carter. As

a result, OPM informed agencies by

memorandum dated November 29,

1990, that, in view of Carter, OPM

would no longer adjudicate complaints

from employees covered by NGP’s when

those NGP’s did not exclude grievances

over FLSA matters, but would continue

to accept complaints from other

employees.

On April 23, 1992, the General

Accounting Office (GAO), in Cecil E.

Riggs, et al., B–222926.3, announced

that, in view of Carter and other judicial

decisions, it too would no longer accept

complaints from employees covered by

NGP’s. The GAO subsequently amended

(57 FR 31272, July 14, 1992) its

regulations at 4 CFR parts 22 and 30 to

reflect this policy change. The GAO

noted that it would continue to accept

claims from Federal employees not

subject to an NGP.

With judicial and GAO decisions

placing most FLSA-covered employees

under the exclusive jurisdiction of the

NGP for the purpose of FLSA

complaints, OPM has reviewed its FLSA

compliance program to determine

whether the program could be changed

in a manner that would facilitate

efficient governmentwide

administration of the Act. Specifically,

OPM believes that FLSA complaint

adjudication at the agency level, now

provided to most FLSA-covered

employees under the above decisions,

can and should be extended to all

employees. In this event, OPM would

no longer adjudicate FLSA complaints.

In the case of bargaining unit

employees, the procedure would be the

NGP (unless FLSA complaints are

excluded), with the possibility of

invoking binding arbitration. All other

employees would seek redress through

and agency-based review or grievance

system. Such employees also would

have access to GAO and the courts if

they are not satisfied with the agency

decision, thus providing them with a

third-party review opportunity. OPM

believes this change, as well as other

provisions of this proposed subpart, will

make administration of the Act more

efficient and consistent. The subpart

more clearly defines the various FLSA

complaint resolution forums and

explains which employees have access

to which forum at a particular time; i.e.

negotiated grievance procedures, or

other agency-based review or grievance

systems, the GAO, and the judiciary.

OPM also believes that the complaints

adjudication process is likely to work

better if the parties to the dispute are

better aware of their respective

responsibilities. Therefore, the proposed

rule contains sections discussing the

responsibilities of both the employee

and the agency. Another section

describes the responsibilities of OPM. In

this regard, while OPM proposes to

discontinue accepting complaints, OPM
2550 Federal Register / Vol. 60, No. 6 / Tuesday, January 10, 1995 / Proposed Rules

also proposes to provide guidance and

information to agencies and employees

on request. OPM would provide legal

interpretations on technical FLSA issues

(binding on decision-makers in relevant

causes) and also would provide general

technical assistance (non-binding).

OPM’s regional offices would be

available to provide general assistance

but not legal interpretations.

The authority of GAO to settle claims

against the United States is contained in

31 U.S.C. 3702 (b)(1) which provides

that a claim filed with the Office must

be received within 6 years after the date

the claim accrues ‘‘except * * * as

provided by * * * another law.’’ In a

decison rendered on May 23, 1994

(Joseph M. Ford, B–250051), GAO

announced that the 2-year statute of

limitations (3 years for willful

violations) as provided in the Portal-toPortal Act of 1947, as amended, 29

U.S.C. § 255(a), would apply to all FLSA

claims with GAO that have not been

settled prior to that date and all claims

filed with GAO after that date. Section

640 of Public Law 103–329, signed

September 30, 1994, provides for a 6-

year statute of limitations to any claim

of a Federal employee under the Fair

Labor Standards Act of 1938 (29 U.S.C.

201 et seq.) for claims filed before June

30, 1994. Under this provision, claims

filed on or after June 30, 1994, are

subject to a 2-year statute of limitations,

based on the May 23 Comptroller

General decision. The 2-year statute of

limitations would now apply to

employees covered by NGP’s when

those NGP’s do not exclude grievances

over FLSA matters; and to employees

not covered by an NGP whose pay

claims are reviewable under other

agency-based review or grievance

systems. The GAO decision would not

apply to claims that arise solely out of

the title 5 overtime provisions; that is,

the 6-year limitation period still applies

to title 5 claims.

The proposed rule provides for

agency maintenance of records of

compliance adjudication and would

require agencies to forward to OPM

copies of final administrative decisions

on FLSA adjudication activities. OPM

would utilize this information to help

ensure that the requirements of the Act

are being met by agencies and

employees and to help evaluate how

well the adjudication system is working.

The proposed rule explains that

complaints covered by OPM regulations

do not include matters pertaining to

equal pay under 29 U.S.C. 206(d). Equal

pay matters are resolved by procedures

established by the Equal Employment

Opportunity Commission.

Regulatory Flexibility Act

I certify that this regulation will not

have a significant economic impact on

a substantial number of small entities

because it applies only to Federal

employees.

List of Subjects in 5 CFR Part 551

Government employees, Wages.

Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM is proposing to

amend part 551 as follows:

1. The title and authority citation for

part 551 is revised to read as follows:

PART 551—PAY ADMINISTRATION

UNDER THE FAIR LABOR

STANDARDS ACT

Authority: 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); Sec.

210 of the Federal Employees Pay

Comparability Act of 1990, Pub. L. 101–509,

104 Stat. 1460.

2. Subpart F is added to read as

follows:

Subpart F—Complaints and Compliance

551.601 Purpose.

551.602 Administrative complaint forums.

551.603 Time limits.

551.604 Employee responsibilities.

551.605 Agency responsibilities.

551.606 OPM responsibilities.

551.607 Judicial review.

551.608 OPM addresses.

Subpart F—Complaints and Compliance

§ 551.601 Purpose.

This subpart constitutes OPM’s

complaint and compliance program for

the resolution of matters arising under

the Act. This subpart, established under

OPM’s authority to administer the Act

as noted in § 551.101, sets forth

administrative complaint systems

available to Federal employees. The

subpart also describes OPM’s role in

assisting agencies to comply with the

Act.

§ 551.602 Administrative complaint

forums.

(a) Negotiated grievance procedures.

An individual covered by a negotiated

grievance procedure (NGP) established

under section 7121 of title 5, United

States Code must utilize that procedure

to seek review of FLSA complaints

provided the NGP does not exclude

such matters.

(b) Agency-based review or grievance

systems. An individual not covered by

an NGP described in paragraph (a) of

this section may file a request for review

of an agency’s FLSA determination

under an agency-based review or

grievance system. Decisions under such

agency-based systems must be in

accordance with the Act and the

conditions and criteria prescribed by

this part for administration of the Act as

well as any legal interpretations issued

under § 551.606. These procedures do

not cover matters concerning ‘‘equal

pay’’ under section 206(d) of title 29,

United States Code (which are subject to

consideration by the Equal Employment

Opportunity Commission under its

regulations at part 1620 of title 29, Code

of Federal Regulations).

(c) General Accounting Office. An

individual not covered by an NGP

described in paragraph (a) of this

section may file a claim concerning a

dispute under the Act with the GAO

under procedures described by GAO at

part 30 of title 4, Code of Federal

Regulations. Such a complaint may be

filed after receiving an agency decision

under paragraph (b) of this section or in

lieu of requesting a review under

paragraph (b).

§ 551.603 Time limits.

(a) Administrative review. Complaints

involving pay claims under the Act and

filed under §§ 551.602 (a) and (b) of this

subpart must meet the time limits and

procedural requirements of the

complaint system used.

(b) Statute of limitations.

Notwithstanding any time limitations

contained in the system being used, pay

claims under the Act are subject to the

2-year statute of limitations provided in

section 255(a) of title 29, United States

Code for claims filed on or after June 30,

1994. This statutory limit is satisfied (or

tolled) when:

(1) A claim is received by the agency

out of whose activities the claim arose

within 2 years from the date the claim

or any portion of the claim accrued; or

(2) A claim is filed directly with GAO

within 2 years from the date the claim

or any portion of the claim accrued.

§ 551.604 Employee responsibilities.

(a) Filing of claims. The employee has

the burden of proving compliance with

§ 551.603(b) by providing

documentation showing the date when

the agency received his or her claim.

Absent such documentation, any back

payments on the claim can be made

only to cover a period up to 2 years

prior to the date of actual payment.

(b) Hours-of-work complaints. The

employee has the burden to provide

evidence from which a reasonable

inference can be drawn that he or she

was improperly compensated for a

certain amount and extent of work

performed. A reasonable inference may
Federal Register / Vol. 60, No. 6 / Tuesday, January 10, 1995 / Proposed Rules 2551

be rebutted by the agency as described

in § 551.605(b).

(c) Waiver of rights. An employee who

will accept payment in connection with

an administrative decision on a claim

must first agree in binding written form

that, by accepting the award, the

employee waives the right to pursue the

matter in the courts or in any

administrative forum. This requirement

does not apply to payments made in

connection with administrative

adjudication of claims under

§ 551.602(a).

(d) Reprisal. An employee alleging

reprisal for filing a complaint or causing

one to be filed may file a request for

review of the allegation under the

procedures described in §§ 551.602 (a)

or (b) whichever applies to the

employee.

§ 551.605 Agency responsibilities.

(a) Processing complaints. Each

agency, after providing the complainant

written acknowledgement of receipt of

the complaint, must process complaints

under the Act that are filed under the

procedures described in §§ 551.602 (a)

and (b). Complaint decisions must apply

the requirements of the Act and part 551

and adhere to any relevant legal

interpretations issued under

§ 551.606(a).

(b) Hours-of-work complaints. When

an employee has established under

§ 551.604(b) that he or she has been

improperly compensated, the agency

has the burden to provide evidence of

either the precise amount of work

performed or evidence to negate the

reasonableness of the inference to be

drawn from the employee’s evidence.

(c) Records. Each agency must

maintain the following records:

(1) Hours of work. Complete and

accurate records of all hours worked by

an agency’s employees are required by

section 11(c) of the Act and § 551.402.

The agency must keep such records for

a minimum period of 6 years or after

GAO audit, whichever is sooner.

(2) Administrative complaint

processes. Records of these processes

include, at a minimum, any decisions

issued under § 551.602. These records

are maintained within an agency’s

established system of records.

(d) Legal basis for pay. An agency

cannot voluntarily apply the pay

provisions of the Act to an employee not

covered by it, or to an employee that has

been determined to be exempt from the

Act. In such circumstances, no legal

basis exists for making payment under

the Act.

(e) Service of administrative

adjudication decisions. Agencies are

required to send one copy of each final

agency administrative decision issued

under §§ 551.602 (a) or (b) to the

following address: United States Office

of Personnel Management, Office of

Agency Compliance and Evaluation,

1900 E Street NW., Washington, DC

20415.

(f) Prohibition against reprisal.

Section 15(a)(3) of the Act prohibits

discharge of an employee, or

discrimination against an employee, in

reprisal for filing a complaint under the

Act or causing one to be filed.

§ 551.606 OPM responsibilities.

(a) Legal interpretations. OPM may

issue legal interpretations on FLSA

matters on its own initiative or at the

request of others, including agency

officials, individuals, representatives of

individuals (or groups), and arbitrators.

Legal interpretations are meant to

convey official interpretations of the Act

and this part and do not constitute

findings of fact for individual (or group)

complaints. They are, however, binding

with respect to policy issues arising in

the context of FLSA complaints

adjudicated within an agency. Legal

interpretations may be requested by

writing to the address designated in

§ 551.608.

(b) Technical assistance. OPM

provides technical assistance regarding

employee or agency obligations under

the Act in response to requests from all

sources. Such assistance does not have

the force and effect of official legal

interpretations issued under paragraph

(a) of this section.

(c) Corrective action. OPM will

require agency action to correct

violations of the Act except when the

same issues affecting the same

employees are under consideration in

an agency complaint forum that can also

lead to corrective action. Corrective

actions may include designation of

FLSA exemption status, orders to

compute back pay, assurance from the

agency of future compliance, or other

appropriate action.

§ 551.607 Judicial review.

An employee may seek judicial

review of a complaint in a manner

prescribed by law.

§ 551.608 OPM addresses.

Requests for legal interpretations and

technical assistance under § 551.606 (a)

or (b) involving an FLSA matter in the

Washington, DC Metropolitan Area or

anywhere outside the 50 States, Puerto

Rico, the Virgin Islands, and the Pacific

Ocean area must be sent to: United

States Office of Personnel Management,

Office of Agency Compliance and

Evaluation, 1900 E Street NW.,

Washington, DC 20415. Requests for

legal interpretations involving matters

in other geographical areas also must be

sent to the above address while requests

for technical assistance must be sent to

the appropriate OPM regional office as

follows:

OPM Regional Office Areas covered

Atlanta Region, OPM, Richard B. Russell Fed. Building, 75 Spring

Street SW., Atlanta, GA 30303, Telephone: (404) 331–3451.

Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia.

Chicago Region, OPM, John C. Kluczynski Fed. Building, 230 South

Dearborn Street, Chicago, IL 60604, Telephone: (312) 353–0387.

Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, West Virginia,

and Wisconsin.

Dallas Region, OPM, 1100 Commerce Street, Dallas, TX 75242, Telephone: (214) 767–0561.Arkansas, Arizona, Colorado, Louisiana, Montana, New Mexico, Oklahoma, Texas, Utah, and Wyoming.

Philadelphia Region, OPM, Wm. J. Green, Jr., Fed. Bldg., 600 Arch

Street, Philadelphia, PA 19106, Telephone: (215) 597–9797.

Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, and Virgin Islands.

San Francisco Region, OPM, 120 Howard Street, 7th Floor, San Francisco, CA 94105, Telephone: (415) 281–7050.Alaska, California, Hawaii, Idaho, Nevada, Oregon, Pacific Ocean

Area, and Washington.
2552 Federal Register / Vol. 60, No. 6 / Tuesday, January 10, 1995 / Proposed Rules

1 59 FR 32189, June 22, 1994.

[FR Doc. 95–486 Filed 1–9–95; 8:45 am]

BILLING CODE 6325–01–M

FARM CREDIT ADMINISTRATION

12 CFR Parts 614, 615, and 618

RIN 3052–AB53

Loan Policies and Operations; Funding

and Fiscal Affairs, Loan Policies and

Operations, and Funding Operations;

General Provisions

AGENCY: Farm Credit Administration.

ACTION: Proposed rule.

SUMMARY: The Farm Credit

Administration (FCA), by order of the

FCA Board (Board), proposes to repeal

several regulations as part of an ongoing

effort to reduce unnecessary regulatory

burden on Farm Credit System (FCS or

System) institutions. Comments that the

FCA solicited through a notice of intent

regarding regulatory burden identified

most of the regulations that the FCA

now proposes to delete. The FCA

concurs with the commenters that these

particular regulations should be

repealed because they are outdated or

impose a burden that is greater than the

benefit derived.

DATES: Written comments must be

received on or before February 9, 1995.

ADDRESSES: Comments may be mailed

or delivered (in triplicate) to Patricia W.

DiMuzio, Associate Director, Regulation

Development, Office of Examination,

1501 Farm Credit Drive, McLean, VA

22102–5090. Copies of all

communications received will be

available for examination by interested

parties in the Office of Examination,

Farm Credit Administration.

FOR FURTHER INFORMATION CONTACT:

W. Eric Howard, Policy Analyst,

Regulation Development, Office of

Examination, Farm Credit

Administration, McLean, VA 22102–

5090, (703) 883–4498, TDD (703) 883–

4444,

or

Richard A. Katz, Senior Attorney,

Regulatory Operations Division,

Office of General Counsel, Farm

Credit Administration, McLean, VA

22102–5090, (703) 883–4020, TDD

(703) 883–4444.

SUPPLEMENTARY INFORMATION:

I. Background

On June 10, 1993, the FCA Board

approved a Statement on Regulatory

Burden seeking public comment on the

appropriateness of requirements the

FCA regulations impose on the FCS.

More specifically, the FCA asked the

public to identify regulations that either

duplicate other governmental

requirements, are not effective, or

impose a burden that is greater than the

benefit derived. The notice of intent was

published in the Federal Register (58

FR 34003) on June 23, 1993. Although

the 90-day comment period expired on

September 21, 1993, the FCA

considered comments that were

received subsequent to that date.

The FCA received a total of 28

responses. The FCA received nine

comment letters from individual Farm

Credit associations and three letters

from groups of associations in particular

Farm Credit districts. Seven Farm Credit

banks sent 12 comment letters to the

FCA. The Farm Credit Council (FCC)

sent a comment letter on behalf of its

membership. Additionally, three

separate work groups of the Farm Credit

System Presidents Planning Committee

each sent the FCA a position paper

containing recommendations to relieve

regulatory burdens pertaining to capital,

eligibility, and financially related

services.

Many of the comments involve

regulatory projects that the FCA Board

previously identified in the Unified

Agenda of Federal Regulations

published in the Federal Register on

October 25, 1993 (58 FR 57276). The

FCA work groups organized to develop

revised regulations on these issues will

consider the comments as they evaluate

various policy options during the course

of their regulatory projects. The analysis

and appropriate response to comments

regarding topics under review by these

existing work groups will be included as

part of any regulatory action published

in the Federal Register.

The remaining comments contained a

number of recommendations for

eliminating or modifying specific

regulations that are perceived as

imposing unnecessary regulatory

burdens on the FCS. The FCA’s review

and analysis of these comments was

guided, in part, by the FCA Board’s

Policy Statement on Regulatory

Philosophy (Policy Statement).1

The Policy Statement conveys that

‘‘[t]he FCA will work to eliminate

outdated regulations and ensure that its

regulations implement the purposes of

the law without unnecessary burden or

cost.’’ According to the Policy

Statement, the FCA shall only adopt

regulations that: (1) Implement or

interpret the law; or (2) are necessary to

promote the safe and sound operations

of System institutions. The Policy

Statement also commits the FCA to

replacing outmoded regulations with

new regulations that implement the

purposes of the law without imposing

unnecessary costs or burdens on FCS

institutions. Another provision in the

Policy Statement declares that the FCA

will strive to ensure that each regulation

has a well-defined objective addressing

specific problems or risks. In this

context, the FCA will seek to establish

a regulatory environment that grants

FCS institutions the business flexibility

to offer a full range of high-quality, lowcost credit services to borrowers. The

Policy Statement also states that the

FCA, to the extent feasible, will seek to

eliminate regulations that prescribe

specific operational or managerial

practices to System institutions. If

appropriate, the FCA will consider the

regulatory approaches of other Federal

financial institution regulators. Finally,

another provision in the Policy

Statement pledges that when the need

arises, the FCA will draft new

regulations so that they are clear, easy

to understand, and designed to

minimize the potential for ambiguity,

uncertainty, and resultant litigation.

The FCA analyzed the commenters’

recommendations, and determined that

many of the suggestions warranted the

immediate repeal of certain FCA

regulations. Other suggestions will

require additional research and analysis

before the FCA determines whether, and

to what extent, changes in the existing

regulations should be proposed. Once a

determination is made, the public will

be notified of the FCA Board’s decisions

regarding the remaining issues in an

appropriate manner.

The FCA is proposing to repeal the

following regulatory provisions:

§§ 615.5104; 615.5105(c); 615.5170(b)

through (e); 615.5190; 615.5498;

615.5500; 615.5520; 615.5530; and

618.8220. In addition, the FCA is

proposing to repeal the FCA prior

approval requirements in

§§ 614.4470(b)(1) and (b)(3). An

explanation of the FCA’s reasons for

proposing the repeal of these regulations

follows. The FCA invites public

comment on all aspects of the proposed

rule.

II. Analysis of Changes and Comments

by Section

A. Loans Subject to Bank Approval

A Farm Credit Bank (FCB) and a bank

for cooperatives (BC) suggested that the

FCA eliminate all agency prior

approvals of FCS institution policies,

procedures, and transactions that are

not required by the Act. The

commenters stated that these prior

approval requirements are inconsistent