Source: https://www.federalregister.gov/documents/2007/09/17/E7-18027/pay-administration-under-the-fair-labor-standards-act
Timestamp: 2018-04-22 05:03:21
Document Index: 603568265

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A Rule by the Personnel Management Office on 09/17/2007
The regulations are effective October 17, 2007.
72 FR 52753
52753-52776 (24 pages)
E7-18027
Section 551.101—General
Section 551.104—Definitions
Recognized Organization Unit
Section 551.201—Agency Authority
Section 551.202—General Principles
Section 551.203—Salary-Based Nonexemption
Section 551.204—Nonexemption of Certain Employees
Section 551.205—Executive Exemption Criteria
Section 551.206—Administrative Exemption Criteria
Section 551.208—Learned Professionals
Section 551.210—Computer Employees
Section 551.211—Effect of Performing Different Work or Duties for a Temporary Period of Time on FLSA Exemption Status
Section 551.213—Exemption of Employees Receiving Availability Pay
Section 551.214—Statutory Exclusion
Section 551.215—Fire Protection Activities and 7(k) Coverage for FLSA Pay and Exemption Determinations
Section 551.216—Law Enforcement Activities and 7(k) Coverage for FLSA Pay and Exemption Determinations
https://www.federalregister.gov/d/E7-18027 https://www.federalregister.gov/d/E7-18027
Start Preamble Start Printed Page 52753
The Office of Personnel Management (OPM) is issuing a final rule to amend the pay administration regulations issued under the Fair Labor Standards Act of 1938. These regulations apply to all employees in agencies who are under OPM's jurisdiction for FLSA purposes.
Georgeanna Emery by e-mail at fedclass@opm.gov, by telephone at 202-606-3600, or by fax at 202-606-4891.
On May 26, 2006, the Office of Personnel Management (OPM) published proposed regulations (71 FR 30301) to amend 5 CFR, part 551, subparts A, B, F and G. The changes were proposed to update and harmonize OPM's regulations with the Department of Labor's (DoL) regulations issued under the Fair Labor Standards Act of 1938 (referred to as “FLSA” or “the Act”). In addition, we provided in the proposed regulations a clearer understanding of coverage for executive, administrative, and professional employees by adding definitions and examples.
The 60-day comment period for the proposed regulations ended on July 25, 2006. During the period, OPM received comments from 11 Federal agencies, five labor organizations, and two individuals.
A number of the comments support OPM's adherence to and adoption of DoL's language in our regulations and the increased ease of applying the FLSA to Federal employees. Commenters noted that the added explanatory materials improved clarity and reduced the potential for erroneous FLSA exemption determinations.
Respondents also identified areas of concern and provided specific recommendations to improve the proposed revisions. We addressed those comments and recommendations beginning with general and/or global comments, followed by a section-by-section discussion. We also made minor editorial corrections which do not affect the content of the regulations.
One agency suggested we include a discussion in the preamble regarding OPM's expectations with regard to how the new regulations will impact coverage determinations properly made under the previous regulations.
As indicated in the proposed regulations, with the exception of the adoption of the revised criteria in the salary basis test, these changes update and clarify but do not fundamentally change the regulations in place as applied consistently with controlling case law. Therefore, we do not anticipate changes in the exemption status of the vast majority of Federal employees to whom the current regulations were properly applied.
The proposed regulations eliminated the 80 percent test as a basis for FLSA coverage. One labor organization commented that the 80 percent test should remain in the regulations as it permits all employees who perform significant amounts of non-exempt work to benefit from FLSA protection. An agency noted that a court or arbitrator often focuses on the amount of time an employee spends on exempt and closely related duties in determining if an employee is covered by FLSA regulations. That agency suggested we include a discussion highlighting the elimination of the 80 percent test requirement and emphasizing the potential importance of the amount of time an employee spends performing exempt functions to support an agency's exemption determination.
Controlling case law has made retention of the 80 percent requirement unsupportable. Federal courts have found many employees to be exempt who spent less than 50 percent of their time performing exempt work. See, e.g., Jones v. Virginia Oil Co., 69 Fed. Appx. 633 (4th Cir. 2003) (management was found to be the “primary duty” of an employee who spent 75 to 80 percent of her time on basic line-worker tasks); Murray v. Stuckey's, Inc., 939 F.2d 614 (8th Cir. 1991) (manager met the “primary duty” test despite spending 65 to 90 percent of his time in non-management duties); Glefke v. K.F.C. Take Home Food Co., 1993 WL 521993 (E.D. Mich. 1993) (employee found exempt despite assertion that she spent less than 20 percent of time on managerial duties because “the percentage of time is not determinative of the primary duty question, rather, it is the collective weight of the four factors”); and Stein v. J.C. Penney Co., 557 F. Supp. 398 (W.D. Tenn. 1983) (employee spending 70 to 80 percent of his time on non-managerial work held exempt because the “overall nature of the job” is determinative, not “the precise percentage of time involved in a particular type of work”). See also, Horne v. Crown Central Petroleum, Inc., 775 F.Supp. 189 (D.S.C. 1991); Donovan v. Burger King, 672 F.2d 221 (1st Cir. 1982); Donovan v. Burger King, 675 F.2d 516 (2nd Cir. 1982).
One agency asked that we include a discussion regarding the appropriateness of reviewing the classification of a position in terms of title, series, and grade, if an FLSA review by a third party reveals new information that contradicts the current classification. While a third party review of an FLSA coverage determination may reveal questions regarding the classification of the employee's work, it is inappropriate to apply 5 U.S.C. chapters 51 and 53 requirements to the regulatory process for implementing 5 CFR part 551 for employees under OPM's FLSA jurisdiction, as these statutory requirements have no bearing on FLSA exemption determinations.
One agency recommended we revise the work aid, “How to make exemption status determinations under the Fair Labor Standards Act (FLSA)” to reflect changes made to the regulations. The work aid, now titled “Making an FLSA Exemption Status Determination—A Work Aid” is found on our Web site at http://www.opm.gov/​flsa and will be updated once the final rule is issued. Start Printed Page 52754
One agency expressed concern that we italicized a term not defined in the regulations. In this final rule, all terms listed in the Definitions section at § 551.104 are italicized in the regulations.
One labor organization suggested that DoL's regulations appear to violate the letter or spirit of the FLSA, and while OPM's interpretation of the FLSA must be generally consistent with DoL's interpretation, OPM need not mirror DoL where doing so would violate the FLSA. We note that the commenter's concern is addressed in § 551.101(c). We also note that DoL's changes have gone through the Administrative Procedure Act (APA) review and comment process and now have the force of law. To the extent that OPM's regulations are consistent with DoL's regulations, OPM does not violate the FLSA; hence, the labor organization's comment is misplaced. We have provided examples to the extent we believe necessary to properly apply the regulations.
One agency recommended we add an explanation that the law does not require OPM's regulations to comply verbatim with DoL's administration of the Act. The agency maintains that doing so will alert Code of Federal Regulations users that while administration of the Act by OPM and DOL is similar in some aspects, marked differences remain. We believe the first sentence in § 551.101(c) addresses the agency's concern regarding marked differences: “OPM's administration of the Act must comply with the terms of the Act but the law does not require OPM's regulations to be identical to the Department of Labor's FLSA regulations.”
One labor organization commented that this section fails to state why and when OPM regulations may diverge from DoL regulations, and that it also fails to clarify that OPM regulations cannot apply FLSA exemptions more broadly than DoL regulations. Citing a Court of Appeals ruling that OPM regulations could not make it more difficult for Federal employees to qualify for overtime than DoL regulations (AFGE v. OPM, 821 F.2d 761, 771 (D.C. Cir. 1987)), the commenter expressed the concern that OPM regulations can and should be more specific than DoL regulations in narrowly defining exemptions. We refer the commenter to Billings v. U.S., 322 F.3d 1328 (Fed. Cir. 2003), which places the labor organization's concern in the appropriate context. As stated in Billings, “AFGE stands for the unremarkable proposition that, under the same facts, an employee in federal employment should receive the same overtime compensation as an employee in the private sector. In this case, however, the appellants are not employed under the same facts applicable to the private sector. Appellants as federal employees, are subject to Title 5 suspensions not present in the private sector.” We also note that the Court of Federal Claims in Adams v. U.S., 40 Fed. Cl. 303 (1998) found OPM's regulation to be valid despite the fact it did not contain a salary-basis test and, therefore, was inconsistent with DoL regulations. Rather, the court held that OPM's regulation was a reasonable interpretation of the FLSA within the Federal sector.
We received a number of comments regarding the proposed changes we made to this section. Some respondents had concerns with particular definitions, while others commented on our decision to move terms from this section and place them where the concept is addressed in the regulation.
One agency recommended that in the definitions section, we earmark those definitions that have been removed and addressed as concepts in other sections of the provisions. Like DoL, we have moved these terms and concepts in order to streamline, update, and clarify these complex regulations, as well as reduce unnecessary duplication and redundancies. We provided such information in the proposed rules to alert current users to the change. Therefore, we decline to adopt the recommendation to cross-reference the location of terms in these final regulations.
In addition to the general concerns listed above, we received specific questions relating to the following definitions:
One agency suggested we clarify the definition to make clear that tasks occurring on a regular and recurring basis, even if they do not occur every workweek, meet the definition of the term customarily and regularly. We did not adopt this suggestion because we do not believe it adds to the understanding of the term.
One labor organization expressed the concern that changes in the definition weaken the protections of the FLSA by expanding the executive exemption criteria at § 551.205. They maintain that removing the phrase “day-to-day” from the definition permits employees who only occasionally exercise executive discretion to meet the exemption criteria. These regulations expressly prohibit the interpretation put forward by the labor organization since the definition states that the “frequency must be greater than occasional” and “ * * * includes work normally and recurrently performed every workweek.” We do not believe exemption criteria for executives will be expanded and decline to change the definition as requested.
One agency was concerned that we removed the definition of this term when, in fact, we did not. Due to the extensive discussion regarding the administrative exemption, we placed the term with the administrative exemption criteria at § 551.206. We have included the term in alphabetical order in the definition section at § 551.104 with a cross reference to § 551.206.
One agency suggested we provide additional information regarding when a training facility will qualify as an Educational establishment. Training facilities vary widely within the Federal sector and are found in a number of different settings. These settings range from Department of Defense-operated primary and secondary schools and military technical training schools, to law enforcement training centers and adult training facilities operated by a variety of Federal agencies. Because of this wide variability in facilities, we do not believe further detailed discussion will add materially to a better understanding of the term.
In accordance with information obtained from the Department of the Interior's Office of Insular Affairs, we have added the Commonwealth of the Northern Mariana Islands, a territory under the jurisdiction of the United States, to the list of exclusions from the definition of exempt areas.
One agency commented that the terminology related to who is and who is not covered by the FLSA is confusing. The agency explained that if the term “FLSA exempt” means not covered by the provisions of the Act, then the term “FLSA nonexempt” means FLSA “not-not covered.” The agency recommended we replace the term “FLSA nonexempt” and insert a new term “FLSA covered.” The commenter noted that exempt employees are exempt from the Start Printed Page 52755overtime and minimum wage provisions of the Act. We note that exempt employees are covered by other provisions of the Act. We decline to adopt this recommendation since the proposed terminology is inconsistent with that used by the Department of Labor.
One labor organization commented that our definition with respect to performing work involving management policies or operating procedures in relation to broad national goals expressed in statutes or Executive orders is “overboard,” as virtually all Government employees endeavor to comply with broad national goals set by statute or Executive order. Consequently, the labor organization recommended we revise the definition to clarify that administrative work involves compliance only with management's operational policies. We agree with the labor organization's concern that administrative work involves compliance only with management's operational policies rather than compliance with substantive statutes; however, this issue is already addressed in § 551.206(b)(1) which directs the user to consider if an employee “has authority to formulate, affect, interpret, or implement management policies or operating practices.” Therefore, we decline to revise this definition.
Two labor organizations stated that adding the words “interpret,” “implement,” and “operating practices,” to the definition broadens the coverage of the term to be inconsistent with the Act. This definition is consistent with the current DoL definition and does not change the underlying meaning of the regulation; therefore, we decline to revise this definition.
One labor organization suggested changes in the definition are problematic because the proposed definition eliminates the distinction between production and support services. We address this distinction in § 551.206, and we consider its placement there more appropriate than in the definition of management.
One labor organization suggested we amend the definition to clarify a team leader does not become exempt merely by apportioning work among the team members. They recommended we expressly state what the administrative provision indirectly says in describing which leaders qualify for exemption. The labor organization asserts that, just as in the private sector (see 29 CFR 541.203(c)), team leaders are exempt administrators only if they perform such administration functions as “acquisitions, negotiating real estate transactions or collective bargaining agreements, designing and implementing productivity improvements” or similar work as specified in § 551.206(i). While we understand the labor organization's concern regarding the misreading of apportioning work, we must rely on the reader to understand that selected phrases of a definition must be read within the context of the entirety of the regulations, and the full intent of the definition must be applied. Therefore, we do not find the proposed expanded discussion to be necessary. Further, we do not agree with the commenter's characterization of § 551.206(i). Team leaders who lead major projects and who function as an extension of management for matters of significance to the employer are likely to meet the administrative exemption. Section 551.206(i) must be read in conjunction with § 551.206(b)(2) (i.e., an employee may carry out major assignments in conducting the operations of the organization), which does not limit exemption to leading staff functions.
In accordance with information obtained from the Department of the Interior's Office of Insular Affairs, we have added the Commonwealth of the Northern Mariana Islands, a territory under the jurisdiction of the United States, to the list of nonexempt areas.
One agency recommended we add to this definition the requirement that a duty must occupy at least 25 percent of the employee's time. This definition, for the most part, is carried over from our previous regulation with specific requirements to ensure that users do not focus on a very small percentage of time when it would be highly unlikely that the duty would support the basis for primary duty. The definition is consistent with the discussion of the 80 percent test in the General Comments section of this preamble. Therefore, we decline to adopt this recommendation.
One labor organization viewed the definition of recognized organizational unit as problematic because it suggests even a team leader with little actual supervisory function can be considered the lead of a recognized organizational unit. The labor organization maintained the definition should clearly state that a recognized organizational unit does not consist of temporary units whose composition or purpose is constantly in flux. We believe the definition fully addresses these concerns. Again, we must rely on the user to understand that recognized organizational unit must be read in conjunction with the other criteria under the executive exemption at § 551.205 (i.e., a leader will not meet the executive exemption if that employee does not exercise the full range of management and work control responsibilities required to meet the requirements of this section).
One agency recommended we further clarify the definition by supplementing it with additional work examples and illustrations. The agency believes the revised definition of “trainee” at paragraphs (1) through (5) implies application to certain employment categories/classifications operative in Federal service. We believe the definition makes clear that a student officially appointed to a Government position is not a trainee for purposes of the FLSA. The definition of trainee for purposes of the FLSA is materially different from the meaning of “trainee” for many purposes of title 5, U.S.C., and similar human resources statutes.
One labor organization suggested that, assuming removal of the 80/20 test is warranted, OPM should delete as superfluous the § 551.104 definitions relating to “worktime.” They also suggested we remove the word “worktime” from § 551.101(a), as that paragraph contains no substantive content, but merely refers to the FLSA's delineation of “administrative procedures by which covered worktime must be compensated.” The labor organization maintains that OPM should replace the word “worktime” with the statutory phrase to refer to FLSA delineation of procedures for compensating “hours of work.” The labor organization is of the opinion that such a change would harmonize with DoL's regulations. We made no substantive change in the definition of worktime itself because these regulations are intended to address FLSA coverage issues and not hours of work. Definitions relating to worktime are not used in defining hours of work but are used solely in determining FLSA exemption status; therefore, we decline to make this change. Start Printed Page 52756
We received several requests to move the sections on specific professional exemptions from the end of subpart B and place them directly following the professional exemption criteria in this section. Based on these comments, we have reordered the sections, and in this final rule, those sections formerly numbered §§ 551.214 through 551.216 in the proposed rule, containing information relating to specific professional exemptions, have been placed directly behind § 551.207 Professional exemption criteria and renumbered as §§ 551.208 through 551.210. The remaining sections have been renumbered accordingly.
One labor organization suggested this section (as well as § 551.202) would be strengthened if it emphasized reasonable doubt regarding exemption status should be resolved in favor of nonexemption. This concern is addressed by § 551.202(d) which states, “If there is a reasonable doubt as to whether an employee meets the criteria for exemption, the employee will be designated FLSA nonexempt.”
We received several comments regarding revised paragraph (e), which clarifies that the designation of an employee as FLSA exempt or nonexempt ultimately rests on the duties actually performed by the employee. The occupational or organizational title alone is not sufficient for an FLSA exemption status determination.
Three agencies commented on the requirement that the designation of an employee as FLSA exempt or nonexempt ultimately rests on the duties actually performed by the employee. We fully agree that the coverage determination must be based on the actual work performed by the employee. The protective nature and purpose of the FLSA requires agencies to assure such accuracy on a continuing basis. The same responsibility holds true for existing and newly established positions. While we appreciate the recommendations received to clarify this section, we have concluded that our statement at § 551.202(e) will make the requirements clear to those who apply these regulations; we do not believe any additional guidance is required.
One agency disagreed with our statement at § 551.202(e) that “established position descriptions and titles may assist in making initial FLSA exemption determinations” and saw no need for further review if a position description accurately describes the duties performed by the employee. Additionally, the agency questioned how exemption status is determined for newly established unencumbered positions and questioned whether proposed duties should be used to make an FLSA coverage determination. Finally, the agency recommended adding to the end of this section, “on a regular and recurring basis over a period of more than 30 consecutive calendar days.” We understand the commenter's concern about making an FLSA coverage determination on newly established positions. In such cases, the determination must be based on the description of work because no employee is actually performing the work. However, once an employee is placed in the position, the agency is responsible for ensuring that the FLSA designation is accurate and remains accurate, based upon the actual work performed by that employee. Thus, we decline to insert the proposed phrase.
One agency found the second sentence of § 551.202(f) difficult to understand. We did not propose changes to this section. The purpose of this section is to recognize that employees may perform a combination of exempt duties and may qualify for exemption. While one of the exemption criteria may not be met in its entirety, the work may meet another which serves as the basis for the exemption determination. To respond to the request for clarification and to further harmonize with DoL's regulations at 29 CFR 541.708, we have amended § 551.202(f) to explain that an employee whose primary duty involves a combination of exempt administrative and exempt executive work may qualify for exemption; i.e., work that is exempt under one section of this part will not defeat the exemption under any other section.
One labor organization had concerns with the first sentence of § 551.202(h) in the proposed rule which read: “Although it is normally feasible and more convenient to identify the exemption category, this is not essential.” They stated that while an employee's primary duty may involve two categories which are intermingled and difficult to segregate, an employer always bears the burden of establishing the basis for an exempt classification. The labor organization maintained that OPM should adhere to the principle that employers must identify any and all exemption categories used to exempt a particular job. We did not propose a change to this section. The first sentence of § 551.202(h) accurately covers, for example, the professional employee who may also meet the executive exemption. In this case it would not be necessary to identify which one of the two served as the specific basis for the exemption determination because both exemptions would apply. However, to clarify this concept, we have revised the first sentence to read, “Although it is normally feasible and more convenient to identify a single exemption category, this is not always appropriate.” We have also added a sentence at the end of § 551.202(h) to require that, “The agency is responsible for showing and documenting that the work as a whole clearly meets one or more of the exemption criteria.”
A number of commenters opposed our adoption of DoL's $23,660 minimum salary level test as a nonexemption threshold. One labor organization requested we provide a reasoned explanation for the change in our position after previously rejecting a salary test as ill-suited for use with the Government's classification system. This labor organization, along with another labor organization, stated that OPM is not bound by law to adopt DoL's approach to this issue, since Federal salaries are not impacted by the large retail sector that DoL must consider in making rules, and therefore, few Federal employees would benefit from this salary level test. OPM regulations governing the Federal sector must be as consistent as practicable with DoL's regulations governing the private sector.
Many positions previously covered by the unitary general schedule (GS) system are now covered by alternative pay systems. The GS system to which our previous regulations were linked no longer covers large numbers of Federal employees under OPM's FLSA jurisdiction. Further, it is contemplated that additional groups of Federal employees may be removed from coverage under the GS system in the future. Therefore, direct linkage to GS grade levels is of diminishing utility to the FLSA exemption determination process. Furthermore, concerns that lower graded nonsupervisory employees who meet the minimum salary level threshold will become exempt are misplaced. As noted in § 551.204(a), nonsupervisory clerical and lower-graded technical employees will remain nonexempt because they will not meet any of the exemption criteria.
When the FLSA was extended to the Federal sector in 1974, GS-5 and GS-6 supervisory positions exceeded the minimum salary level test. In December Start Printed Page 527571997, OPM issued subsequent regulations (see 62 FR 67238, December 23, 1997). At that time, all supervisory GS-5 and GS-6 positions still received annual salaries substantially higher than the minimum salary level test. These positions, and prevailing rate first-level supervisory positions, were also affected by the 80 percent test. These conditions made use of the minimum salary level test in 1974 and 1997 moot.
As discussed in the General Comments section of this preamble, we are no longer using the 80 percent test based on controlling case law. Also, DoL raised the minimum salary test to the point where some nonappropriated fund instrumentality positions might meet the executive exemption test, but would fail to meet the minimum salary threshold of $23,660. In adopting the minimum salary test, these lower-salaried employees will continue to have their nonexempt status protected, thereby assuring a result consistent with DoL's regulations. The fact that a small number of positions are affected does not diminish our responsibility to ensure these employees receive any and all protections afforded by the Act and its implementing regulations. Nevertheless, we view this minimum salary threshold as transitory and believe it will likely become obsolete given the small number of employees potentially affected at the present time, and the likely continued rise in Federal salary rates.
One labor organization expressed concern regarding OPM's use of the annual figure that DoL adopted for the private sector without reference to salary data from the Federal sector. One agency suggested that rather than show a specific rate of basic pay due to changes in cost of living and impacts of inflation, we should refer users to a Web site for current thresholds. OPM regulations governing the Federal sector must be as consistent as practicable with DoL's regulations governing the private sector. Therefore, we decline to make any changes.
One agency suggested OPM use the term “total adjusted salary” or “adjusted basic pay” in place of “rate of basic pay” to clarify the rate of pay being used for comparison purposes. We have not adopted the suggested terms and will continue to use “rate of basic pay” which is defined in § 551.203(b) to include locality pay and certain similar supplements.
The same agency also recommended we provide an explanation at § 551.203(a)(3) as to why only a “ * * * professional in the practice of law or medicine as prescribed in paragraphs (c) and (d) of § 551.208,” is not covered by the salary-based nonexemption. We changed the language to be consistent with DoL's longstanding exclusion from the salary test of employees who hold a valid license or certificate permitting the practice of law or medicine, or any of their branches, and who are actually engaged in the practice thereof. This exclusion also applies to employees who hold the requisite degree for the general practice of medicine and who are engaged in an internship or residency program pursuant to the practice of a profession. See 29 CFR 541.600. We also note that such positions in the Federal Government receive compensation well in excess of the minimum salary level test.
One labor organization suggested we remove the first word “certain” in § 551.204(a), as it is unnecessary and confuses the meaning of the section. We disagree. Removal of the word “certain” from this section would overly broaden the category of nonexempt nonsupervisory white-collar employees. For this reason, we have not adopted the suggestion.
One labor organization commented that the removal from the regulations of the statement that, “A supervisory employee in the Federal Wage System or in other comparable wage systems is exempt only if the employee is an executive employee....,” expands the exemption, may even implicitly suggest that all supervisory employees should be exempt, and is contrary to the FLSA. The labor organization contends these regulations should include a passage regarding the nonexemption of FWS supervisory employees. We find that the inclusion of the suggested language would be superfluous. As stated in § 551.202(a), an 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. Therefore, agencies are obligated to fully apply the executive exemption criteria to all supervisory positions to determine if they are exempt.
One agency suggested we amend § 551.204(a)(2) to include language to address pay banding systems. The agency recommended we add a particular pay band level that, in their agency, is equivalent to the GS-9 level. This assumes most agencies will band grades in the same manner as the commenting agency. As agencies generally establish their own pay banding schemes, our regulations permit each agency to determine which of its bands is equivalent to a particular level. For this reason, we have not adopted the suggestion.
One agency noted that there is no mention of work-planning and assignment responsibilities, and only a small number of personnel authorities are mentioned. The agency suggested that in the final regulations, we provide language to: (1) Clarify the importance of work-planning and assignment responsibilities in meeting the exemption criteria; and (2) clarify whether the few personnel activities mentioned in § 551.205 are more critical to meeting the exemption criteria than are the others mentioned in the definition of the term “management” in § 551.104. The commenter noted that a floor is established by the specifics in § 551.205(a)(2). We note this floor is expansive and links back directly to the term “management” as noted in § 551.205(a) and defined in § 551.104, and is not limited to hiring, firing, advancement, and promotion, but also pertains to any other change of employee status. Therefore, while some employees covered by the executive exemption may not perform each and every activity listed under “management,” there is an expectation that they will perform the functions listed under § 551.205(a)(2). We decline to make the suggested change.
One labor organization voiced concern that we removed the requirement for executives to regularly exercise discretion and independent judgment, or spend 80 percent of their time on “supervisory and closely related work.” The labor organization requested we clarify that executives necessarily exercise the type of “discretion and independent judgment” that the role explicitly requires. As recognized by the labor organization in their comments, we have included in the definition of primary duty the requirement to exercise discretion and independent judgment, and the definition of management illustrates how this judgment is applied. This issue is adequately addressed in § 551.104 of this regulation; therefore, we have not made the requested change.
One agency commented that in § 551.205(a)(1), there may be situations where a supervisor, as a regular and recurring part of his or her job, may supervise only one employee. They further commented that the General Schedule Supervisory Guide (GSSG) does not require a minimum number of subordinates for a position to be classified as supervisory. As noted previously in this preamble, the Start Printed Page 52758definition of “supervisor” for purposes of chapters 51 and 53 of title 5, U.S. Code, is separate and distinct from the definition for purposes of applying the FLSA.
One labor organization stated that the “scope of direction” element in § 551.205(a)(1) is too wide, and further commented that permitting exemption for employees who direct a mere two other persons far exceeds the purpose of the executive exemption. The labor organization contended that the proposed regulations more closely describe a group leader or working supervisor rather than an executive, and that a true executive position is one with a broader scope of control covering at least five full-time employees. We must reject the labor organization's request to increase the number of employees directed, given that this language is substantively the same as the existing regulations and consistent with DoL's regulatory language.
Regarding the term “particular weight” in § 551.205(b), one agency indicated it has a number of locations where supervisors direct the work of different groups of employees each day, because operations not only occur 24 hours per day, but also in several different stations within one location. Additionally, performance ratings may be created by a group of supervisors who together may have supervised each of the rated employees, but who may have not supervised the same group of employees on each workday and shift worked. The agency requested additional information regarding the impact on whether or not an employee can be an exempt executive if she or he supervises a variety of individuals over the course of the workweek and recommends personnel actions on the basis of consulting with other supervisors, all of whom also supervise the same group of employees on different days or shifts. We believe this issue is adequately addressed in § 551.104 under the term “recognized organizational unit” in paragraph (3). In addition, the general human resources practice of designating an official supervisor of record, with specific delegations of responsibility, facilitates the application of these FLSA requirements.
We received a number of questions and concerns from agencies and labor organizations regarding the interpretation and application of the administrative exemption criteria. Changes were made to this section largely to harmonize with DoL changes in the description of administrative work and to add examples of specific types of work performed in the Federal Government.
One labor organization requested we insert the express comparison between staff service or support work as distinguished from production or line work. The labor organization maintains that we could avoid any confusion by reinserting language from the definition of Management or general business functions or supporting service in the prior regulations. We do not agree with the labor organization's recommendation to reinsert language from the definition in the prior regulations. However, to further clarify the distinction between staff and line work, we revised § 551.206 by inserting “, as distinguished from production functions,” after the word “operations” in the first sentence.
One agency suggested we add language to define the minimum level of immediate guidelines and supervision needed to constitute discretion and independent judgment. We believe the examples in § 551.206(b) provide adequate context for applying the concept of discretion and independent judgment.
Two labor organizations had concerns with the concept of employees having the authority to formulate, affect, interpret, or implement management policies or operating practices. One of the labor organizations expressed concern that the application of § 551.206(b)(1) will exempt employees who should not be exempt, contending that many nonsupervisory white-collar employees perform work that requires them to implement or interpret management policies and operating practices with respect to mission-critical activities, yet their work is indisputably of a routine nature. One labor organization viewed the definition as being overly expansive. We believe the factors provided in § 551.206(b) provide adequate context for applying the concept of discretion and independent judgment. In addition, § 551.206(e) makes clear that work of a routine nature will not meet the administrative exemption. The terminology we adopted is consistent with DoL's regulations (see 29 CFR 541.202(b)). We believe that when read and applied in the context of the regulations as a whole, the language is not overly broad. Therefore, we decline to modify our language.
One agency suggested we provide an example of an exempt Federal administrative employee who would be involved in performing exempt administrative work for the employing agency's customers. We believe that § 551.206(h) already provides an adequate description of this type of exempt work. Therefore, we decline to accept this suggestion.
Two agencies suggested we clarify what constitutes “matters of significance” by adding language to clarify the scope and effect of the work and adding a definition of the term. We believe we have explained the intent of the Act by the examples provided throughout § 551.206. In this regard, we have aligned with DoL's approach by describing relevant factors to consider in making the appropriate exemption determination.
One labor organization asserted that in trying to address duties performed by employees who support workers on the production side in § 551.206(h), we omitted the requisite language distinguishing administrative staff who provide operational support from nonexempt employees working on the production end. They contend that, as proposed, the paragraph creates confusion by referring to employees who support line managers without offering examples of nonexempt line or production duties. We agree with the comment and have added clarification at the end of § 551.206(h) by inserting examples of investigative work that may either be exempt or nonexempt depending on whether it is performed as a line or staff function.
One labor organization expressed concern that the proposed regulations at § 551.206(h) may weaken the line versus staff dichotomy and by doing so, may upset decades of court precedent regarding this feature of the administrative exemption. We do not agree with the labor organization's concern, as our illustrations are consistent with case law. We reference Piscione v. Ernst & Young, 171 F.3d 527 (7th Cir. 1999) for discussion of when advisory and program development work that affects management policy and internal operations of client organizations is administratively exempt.
One agency commented that § 551.206 should provide information regarding OPM's expectations about the coverage or exemption of those performing a supporting service under the revised regulations. The concept of administratively exempt work can be found at § 551.206(h).
Several commenters remarked that the guidance provided on team leaders in § 551.206(i) is unclear. One agency commented that where project examples are provided, the decision as to whether or not the team leader was exempt seemed to be based on the types of projects led, thereby necessitating a Start Printed Page 52759decision on the relative worth of the projects, rather than on the team leader's responsibilities. One labor organization expressed concern that the examples provided are not found in DoL's regulations on team leaders, thereby making it difficult to ascertain precisely how or when these activities could be considered major projects. The labor organization suggested that, to avoid imposing an overly broad definition of “team leader,” these examples should be removed or the provision should make clear that reviews or investigations do not constitute examples of major projects unless they involve the exercise of discretion and independent judgment. Another labor organization shared the concern that § 551.206(i) could drastically broaden the executive exemption, in that paragraph (i) appears to describe a working supervisor more closely than an administrator. The labor organization suggested removal of this paragraph from the regulations. To clarify the intent of § 551.206(i), we have added an example of a lead auditor who would meet the administrative exemption.
One labor organization commented that the definition of management/program analysts in § 551.206(l) seems to suggest that any employee who engages in the study of the operations of an organization or a program has a primary duty that is directly related to the management or general business operations of the employer. They suggest that OPM clarify that an employee must have as his or her primary duty the study of such operations, as well as the recommending of changes to operations. They further suggest OPM clarify that employees in this position do not necessarily meet the requirement that they exercise discretion and independent judgment on matters of significance. We do not believe these revisions are necessary, as § 551.206 makes clear what should be considered in determining an employee's primary duty. In addition, § 551.206(l) is to be applied within the entirety of the administrative exemption criteria, which are applicable only when the employee's work entails the exercise of discretion and independent judgment on matters of significance.
One agency recommended that OPM clarify what constitutes ordinary inspection work at § 551.206(n) and explain what the statement, “They have some leeway in the performance of their work but only within closely prescribed limits” means. We decline to add language, as we believe § 551.206(n) is sufficiently clear as written.
As stated earlier in this preamble, we reordered subpart B of the final regulations. Consequently, § 551.208 in the final regulations corresponds to § 551.214 in the proposed regulations.
One labor organization expressed numerous concerns regarding our treatment of learned professionals. They suggest that the proposed regulations neglect to emphasize that, with rare exceptions, learned professionals must have advanced degrees to succeed in their field. This labor organization maintained that in explaining the impact of the word “customarily,” the proposed regulations permit exemption of individuals who perform substantially the same work as degreed employees, without making clear how rarely employees attain such positions without advanced degrees. These proposed regulations are consistent with existing 5 CFR 551.207(a)(1). The work requires the application of knowledge customarily and characteristically acquired through education or training that meets the requirements for a bachelor's or higher degree. However, in an effort to address the labor organization's concerns, we have modified the language at § 551.208(a)(3) to emphasize the infrequency of employees attaining professional positions without advanced degrees.
The same labor organization expressed concern regarding § 551.208(b), maintaining it provides management with the ability to seek new learned professions whenever a school creates a new advanced degree. They requested this section be removed. Discussion of the expansion of professions in § 551.208(b) is consistent with 29 CFR 541.301(f); therefore, we decline to eliminate the section.
This labor organization also commented that the description of the accounting profession provided at § 551.208(e) is ambiguous and uses equivocating language. Our description is consistent with 29 CFR 541.301(e)(5); therefore, we decline to change the regulations.
One agency and two labor organizations raised concerns regarding misapplication of the engineering profession at § 551.208(f). One labor organization stated that the portion of § 551.208(f) concerning engineering technicians should be entirely removed. We have revised the language to clarify that engineering technicians infrequently perform exempt work.
One individual commented that, in the private sector, registered nurses paid on an hourly basis are nonexempt and therefore entitled to overtime pay under FLSA. The commenter suggests if OPM considers registered nurses exempt based on meeting the duties requirement without considering the salary test, then Federal Registered nurses are at a disadvantage. In this regard, the individual objected to § 551.208(j) which reads, “Registered nurses who are registered by the appropriate State examining board generally meet the duties requirements for the learned professional exemption.” We believe these concerns are misplaced. Section 551.208(j) must be read in conjunction with the salary-based nonexemption at § 551.203. Registered nurses paid on an hourly basis will not meet the annual pay basis requirements of § 551.203(a) because the exemption only applies to employees paid on an annual pay basis. Therefore, such employees will be nonexempt.
As stated earlier in this preamble, we reordered subpart B of the final regulations. Accordingly, § 551.210 in the final regulations corresponds to § 551.216 in the proposed regulations.
One agency recommended renaming this section “Information Technology employees” to remain consistent with how Federal classification standards refer to these positions. Section 13(a)(17) of the Act specifically addresses computer occupations, as do DoL's implementing regulations in 29 CFR part 541, subpart E. As noted previously in this preamble, Federal position classification and job grading laws and regulations do not control FLSA definitions. Therefore, we decline to accept this recommendation.
One agency and one labor organization found the intermingling of the computer exemption under sections 13(a)(1) and 13(a)(17) of the Act confusing. We believe that § 551.210 is sufficiently clear as written. Further, our description is consistent with 29 CFR 541.400; therefore, we decline to change the regulations.
One labor organization raised concerns regarding proposed § 551.210(d), where we state that certain employees meeting exemption under section 13(a)(17) of the Act may also have executive and administrative duties which qualify the employees for exemption under executive and administrative exemption rules as well. The labor organization maintained that it is unclear how these same employees could also have executive or administrative work as their primary duty, unless their computer functions completely overlap with executive or administrative work. They further maintained that if such overlapping of Start Printed Page 52760duties occurred, the executive and administrative rules would add nothing to the designation of these employees as FLSA exempt or nonexempt. As discussed in connection with § 551.202(h), agencies are responsible for showing and documenting that an employee's work as a whole clearly meets one or more of the exemption criteria. We decline to change this language.
As stated earlier, we reordered subpart B of the final regulations. As a result, § 551.211 in the final regulations corresponds to § 551.208 in the proposed regulations. We also renamed the section to more appropriately reflect the intent of § 551.211.
Several labor organizations raised the same concerns regarding the 30-day test that OPM addressed in the General Comments section of the 1997 regulations (see 62 FR 67238). We responded to this issue at that time, and our response remains the same. The 30-day test is well-established and has been unchanged in OPM regulation since January 1988. At that time, OPM made clear the extent of an agency's responsibilities regarding an employee who must temporarily perform work or duties that are not consistent with the primary or grade-controlling duty of his or her official position description.
Two agencies expressed concern with, and questioned the intent of, this section. One agency suggested that if a temporary assignment is expected to last beyond 30 days, the agency should, as good management practice, determine the exemption status of the employee at the beginning of the temporary assignment. This agency maintained that it is not practical or fair for an agency to pay an employee overtime under FLSA rules during the first 30 days of an assignment, while knowing that an exempt assignment will last beyond the 30 days, and then have to require the employee to repay the overtime. The other agency raised similar concerns. The intent of § 551.211(d) is to deal with situations where management is unclear regarding the duration of an assignment. We decline to amend this portion of the regulations.
As stated earlier in this preamble, we reordered subpart B of the final regulations. Consequently, § 551.213 in the final regulations corresponds to § 551.210 in the proposed regulations.
At the request of an agency, we have amended § 551.213(a) to include the statutory provision under which employees are exempted from FLSA coverage by receiving availability pay.
The same agency commented that we should include a note in § 551.213(b) that positions formerly classified as pilots at the U.S. Customs Service are now identified at the U.S. Customs and Border Protection (CBP) as CBP Air Interdiction Agents, GS 1881. As the statutory requirements of 5 U.S.C. chapter 51 are not controlling in applying the FLSA, we decline to amend the regulations to cite specific position titles. We have changed the agency name in the regulations from U.S. Customs Service to U.S. Customs and Border Protection.
As stated earlier, we reordered subpart B of the final regulations. Accordingly, § 551.214 in the final regulations corresponds to § 551.211 in the proposed regulations.
One agency suggested that the regulations should cite the statutory and regulatory provisions regarding customs officers covered by 19 U.S.C. 267 rather than attempt to list all the covered titles. We agree and have amended the regulations to delete reference to specific titles.
As stated earlier, we reordered subpart B of the final regulations. Consequently, § 551.215 in the final regulations corresponds to § 551.212 in the proposed regulations.
We received numerous comments from a labor organization questioning and speculating on why we added this section. This labor organization expressed concern that the firefighter definition in 5 CFR 550.1302 will be altered by issuance of this regulation. They maintain the existing firefighter definition is adequate, and this rule may make interpretation of section 7(k) of the Act in the Federal sector more complex. In addition to this labor organization's comments, two agencies raised concerns regarding the effect of these regulations on wildland firefighters. These comments indicate that further clarification is required.
This section pertains to two distinct topics: fire protection activities and coverage under the section 7(k) provisions of the Act. The revised regulations continue OPM's longstanding policy that the section 7(k) provisions are not automatically applied to all employees who perform fire protection activities. OPM rules provide that the section 7(k) provisions are applied only to employees receiving certain types of premium pay associated with extended tours of duty. For example, section 7(k) is applicable to a fire protection employee only if he or she receives annual premium pay under 5 U.S.C. 5545(c) (usually standby duty pay under (c)(1)) or firefighter's compensation under 5 U.S.C. 5545b. These premium payments apply to firefighters who have extended tours, usually including 24-hour shifts.
Wildland firefighters are not covered by the regulatory provisions for section 7(k) employees at § 551.541. This matter was clarified in the regulations in 1976, and wildland firefighters who do not receive the specific types of premium payments under §§ 551.501(a)(1) and (5) will continue to be covered by section 7(a) of the Act under these regulations. We have modified §§ 551.215(a) and 551.541(a) in the final regulations to better align it with this section of the regulation.
One labor organization provided a number of comments in response to the establishment of this section. The labor organization commented that OPM's inclusion of fire inspections among the list of fire protection activities at § 551.215(b) is confusing, suggesting it may lead to the erroneous conclusion that employees who solely perform fire inspections are engaged in fire protection activities under section 7(k). We note that the proper interpretation of § 551.215(b) is predicated upon reading it within the entirety of § 551.215. The labor organization's concern is best addressed by reading § 551.215(b) in conjunction with § 551.215(d)(2). Nevertheless, to clarify this section, we have changed § 551.215(b) by adding “by trained firefighters eligible for reassignment to fire control and suppression or prevention duties” in the clause dealing with inspections.
The labor organization commented that OPM is obligated at § 551.215(b) to comply with DoL's interpretation of the application of section 7(k) to emergency medical service (EMS) personnel as set forth in 29 CFR 553.215(b). The section cited in the labor organization's comment addresses ambulance and rescue service employees of public agencies subject to the Act prior to the 1974 amendments. We therefore assume this comment is misplaced and intended to reference 29 CFR 553.215(a). Our proposed and final regulations are consistent with the pertinent DoL regulations at 29 CFR Start Printed Page 52761553.215(a); therefore, we decline to change this section.
This labor organization requested modification of § 551.215(c)(2) and (3) to include all the necessary requirements, for example, that the temporary employee be hired by a fire department, that he or she be trained in fire suppression, and that he or she actually perform fire suppression activities. This labor organization also suggested that OPM remove § 551.215(c)(4) entirely, maintaining the section neither complies with the FLSA nor conforms with DoL's interpretation of the FLSA. The labor organization referred to 29 U.S.C. 203(y), stating DoL's regulations define employees in fire protection activities. They further relied on AFGE v. OPM, 821 F.2d 761, 770 (D.C. Cir. 1987) in asserting we must change our regulations “in a manner consistent with the Secretary of Labor's implementation of the Fair Labor Standards Act.”
We agree that OPM's regulations should be consistent with the statutory definition of “employee in fire protection activities” in section 3(y) of the FLSA (29 U.S.C. 203(y)). We have modified proposed paragraphs (b), (c), and (d) of § 551.215 accordingly.
As stated earlier, we reordered subpart B of the final regulations. As a result, § 551.216 in the final regulations corresponds to § 551.213 in the proposed regulations.
One labor organization and one agency objected to what they construed as applying section 7(k) to correctional officers and requested that the regulations explicitly state that such employees will not be subject to section 7(k) of the Act. This section of the regulations pertains to two distinct topics: law enforcement activities and coverage under section 7(k) provisions of the Act. The revised regulations continue OPM's longstanding policy that the section 7(k) provisions are not automatically applied to all employees who perform law enforcement activities. OPM rules provide that the section 7(k) provisions are applied to employees receiving certain types of premium pay. For example, section 7(k) is applicable to a law enforcement employee if he or she receives annual premium pay under 5 U.S.C. 5545(c)(1) for regularly scheduled standby duty, or under 5 U.S.C. 5545(c)(2) for substantial amounts of irregular, unscheduled overtime work which cannot be controlled administratively.
One agency objected to the differences between the definition of law enforcement activities for FLSA purposes, and the statutory definition of “law enforcement officer” (LEO) for retirement purposes in 5 U.S.C. chapters 83 and 84. The agency's objections emphasized that such a distinction undermines the long-standing determination that LEO retirement coverage extends to all employees who work within its correctional facilities. As discussed earlier, just as it is inappropriate to apply 5 U.S.C. chapters 51 and 53 definitions to terms used in the FLSA, the same holds true for the statutory definition of LEO in 5 U.S.C. chapters 83 and 84; that definition is not controlling in defining “law enforcement officers” for purposes of the FLSA.
One individual stated the partial listing of positions contained in §§ 551.216(c)(2) through (6) is misleading and will result in officers being inappropriately characterized as not qualifying. We note the examples provided are not exhaustive. They are meant to supplement, not take the place of, § 551.216(b). The use of these examples is consistent with DoL's regulations at 29 CFR 553.211(c). Therefore, we decline to adopt the suggestion to remove paragraphs (c)(2) through (6).
While not included in the proposed regulations, § 551.541 has been modified to align the language with new §§ 551.215(a) and 551.216(a), which now make clear that not all fire protection and law enforcement employees, respectively, are covered by section 7(k) of the Act. To avoid confusion, we have deleted from § 551.541(a) the language referring to employees not covered by section 7(k) so that § 551.541 deals solely with section 7(k) employees. Additionally, § 551.541(b) has been revised for continuity with § 551.541(a).
In the proposed regulations we added paragraph (c) to § 551.601 in order to define hazardous Federal fire protective activities for individuals under 18 years of age. No comments were received in response to this addition. We are adopting the proposed language as final.
In this subpart of the proposed regulations, we clarified in § 551.702(c) that the claimant is responsible for retaining documentation to establish when a claim is received; in § 551.705(b) we corrected the reference from paragraph (b) to paragraph (c); and in § 551.707(a) we clarified that OPM may grant a request from a claimant to withdraw his or her claim. No comments were received in response to these revisions; therefore, we are adopting the proposed language as final.
OPM has determined that these regulations will not have a significant economic impact on a substantial number of small entities because they apply only to Federal agencies and employees.
These regulations are consistent with the requirements of E.O. 12988. The regulations clearly specify the effects on existing Federal law or regulation; provides clear legal standards; has no retroactive effects; specifies procedures for administrative and court actions; defines key terms; and is drafted clearly.
OPM has determined these regulations will not have Federalism implications because they apply only to Federal agencies and employees. The regulations will not have financial or other effects on States, the relationship between the Federal Government and the States, or the distribution of power and responsibilities among the various levels of government.
These regulations will not result in the expenditure by State, local, or tribal governments of more than $100 million annually. Thus, no written assessment of unfunded mandates is required.
End Amendment Part Start Part Start Printed Page 52762
Directly and closely related means work that is directly and closely related to the performance of exempt work which is also considered exempt work. The phrase directly and closely related means tasks that are related to exempt duties and that contribute to or facilitate performance of exempt work. Directly and closely related work may include typically nonexempt tasks that arise out of and are integral to exempt duties. Those nonexempt tasks must be performed by the exempt employee to perform his or her exempt work. Work directly and closely related to the performance of exempt duties may also include recordkeeping; maintaining various records pertaining to workload or employee performance; monitoring and adjusting machinery; taking notes; using the computer to create documents or presentations; opening the mail for the purpose of reading it and making decisions; and using a photocopier or fax machine. Work which both workers and supervisors are required to perform Start Printed Page 52763is 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) and is exempt work. Work is not directly and closely related if the work is remotely related or completely unrelated to exempt duties. The following examples illustrate the type of work that is and is not normally considered as directly and closely related to exempt work:
Formulate, affect, interpret, or implement management policies or operating practices means perform work that involves management policies or operating practices which range from Start Printed Page 52764specific objectives and practices of a small field office to broad national goals expressed in statutes or Executive orders. Employees performing such work make policy decisions or participate indirectly through developing or recommending proposals that are acted on by others. The work of employees who significantly affect the execution of management policies 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).
Title 5 overtime pay, for the purpose of § 551.211, 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 is Start Printed Page 52765not a Federal employee for purposes of the Act:
(h) Although it is normally feasible and more convenient to identify a single exemption category, this is not always Start Printed Page 52766appropriate. 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. The agency is responsible for showing and documenting that the work as a whole clearly meets one or more of the exemption criteria.
(1) The employee is subject to § 551.211 (Effect of performing different work or duties for a temporary period of time on FLSA exemption status); or
(2) The employee is subject to § 551.212 (Foreign exemption criteria); or
(3) The employee is a professional engaged in the practice of law or medicine as prescribed in paragraphs (c) and (d) of § 551.208.
(a) Certain nonsupervisory white-collar employees are FLSA nonexempt (unless the employees are subject to § 551.211 (Effect of performing different work or duties for a temporary period of time on FLSA exemption status) or § 551.212 (Foreign exemption criteria)) because they do not fit any of the exemption categories. They include:
(b) Nonsupervisory employees in the Federal Wage System or in other comparable wage systems are nonexempt, unless the employees are subject to § 551.211 (Effect of performing different work or duties for a temporary period of time on FLSA exemption status) or § 551.212 (Foreign exemption criteria).
(a) An executive employee is an employee whose primary duty is management (as defined in § 551.104) of a Federal agency or any subdivision thereof (including the lowest recognized organizational unit with a continuing function) and who:
(3) Performs work that affects the organization's operations to a substantial degree, even if the employee's assignments are related to operation of a particular segment of the organization; Start Printed Page 52767
Depending upon the purpose of the work and the organizational context, work in certain occupations may be either exempt or nonexempt. For example, criminal investigators who perform work directly related to the internal management of the agency and typically would be expected to provide recommendations of great significance based on the analysis of investigative findings would likely be considered as performing a staff function. In contrast, the performance of investigative and inspectional work to confirm whether specific regulatory requirements have been met for an investigative/inspectional component of any agency would likely be considered as performing a line rather than a staff function.
(l) Management analysts who study the operations of an organization and propose changes in the organization, program analysts who study program Start Printed Page 52768operations and propose changes to the program, and other management advisors generally meet the duties requirements for the administrative exemption.
To qualify for the professional exemption, an employee's primary duty must be the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction or requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. Learned professionals, creative professionals, and computer employees are described in §§ 551.208, 551.209, and 551.210, respectively.
(2) An employee who holds the required academic degree for the general practice of medicine and is engaged in an internship or resident program pursuant to the practice of the profession is exempt. Employees engaged in internship or resident Start Printed Page 52769programs, whether or not licensed to practice prior to commencement of the program, qualify as exempt professionals if they enter such internship or resident programs after the earning of the appropriate degree required for the general practice of their profession.
(m) Paralegals. Paralegals and legal assistants generally do not qualify as exempt learned professionals because an advanced, specialized academic degree is not a standard prerequisite for entry into the field. Although many paralegals possess general 4-year advanced degrees, most specialized paralegal programs are 2-year associate degree programs from a community college or equivalent institution. However, the learned professional exemption is applicable to paralegals who possess advanced, specialized Start Printed Page 52770degrees in other professional fields and apply advanced knowledge in that field in the performance of their duties. In addition, a paralegal who fails to meet the professional exemption criteria may be performing exempt administrative work, e.g., overseeing a full range of support services for a large legal office.
(b) The exemption in section 13(a)(1) of the Act applies to any computer employee whose annual remuneration exceeds the salary-based nonexemption prescribed in § 551.203. The exemption in section 13(a)(17) applies to any computer employee compensated on an hourly basis at a rate of basic pay (as defined in § 551.203(b)) not less than $27.63 an hour. In addition, these exemptions apply only to computer employees whose primary duties consist of:
(1) When applicable. This section applies only when an employee must perform work or duties that are not consistent with the employee's primary duties for an extended period, that is, for more than 30 consecutive calendar Start Printed Page 52771days—the “30-day test.” The period of performing different work or duties may or may not involve a different geographic duty location. The exemption status of an employee temporarily performing different work or duties must be determined as described in this section.
(1) Assess an employee's temporary work or duties over a reasonable period of time (the 30-day test), compare them with the primary duties upon which the employee's exemption status is based, and determine the employee's exemption status as described in §§ 551.203 through 551.210; and
(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 Start Printed Page 52772status of such an employee as described in 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.
(ii) The agency must determine the employee's exemption status for that workweek by applying § 551.211.
(a) A criminal investigator receiving availability pay under § 550.181(a) of this chapter, as provided in 29 U.S.C. 213(a)(16));
(a) The Office of Personnel Management may determine that the provisions of section 7(k) of the Act apply to certain categories of fire protection employees based on appropriate factors, such as the type of premium payments they receive (see § 551.501(a)(1) and (5) and § 551.541).
(c) Engaged in fire protection activities. (1) An employee (including a firefighter, paramedic, emergency medical technician, rescue worker, ambulance personnel, or hazardous materials worker) is considered engaged in fire protection activities for the purpose of determining possible application of section 7(k) of the Act as provided for in § 551.501(a)(1) and (5) and § 551.541 if the employee:
(d) Not engaged in fire protection activities. Examples of types of employees who are not engaged in fire protection activities for the purpose of applying section 7(k) of the Act (as provided for in § 551.501(a)(1) and (5) and § 551.541) include the following:
(a) The Office of Personnel Management may determine that the provisions of section 7(k) of the Act apply to certain categories of law enforcement employees based on appropriate factors, such as the type of premium payments they receive (see § 551.501(a)(1) and (5) and § 551.541). Start Printed Page 52773
(c) Engaged in law enforcement activities. The following employees are engaged in law enforcement activities for the purpose of determining possible application of section 7(k) of the Act as provided for in § 551.501(a)(1) and (5) and § 551.541:
(4) Employees in positions properly classified in the Criminal Investigating series, and other employees performing criminal investigation as their primary duty, except as provided for in § 551.213 (Exemption of employees receiving availability pay);
(d) Not engaged in law enforcement activities. The following employees are not engaged in law enforcement activities for the purpose of pay under section 7(k) of the Act as provided for in § 551.501(a)(1) and (5) and § 551.541:
4. Amend § 551.541 of subpart E by revising paragraphs (a) and (b) to read as follows:
§ 551.541
Employees engaged in fire protection activities or law enforcement activities.
(a) An employee engaged in fire protection activities or law enforcement activities (as described in §§ 551.215 and 551.216, respectively) who receives compensation for those activities under 5 U.S.C. 5545(c)(1) or (2) or 5545b, or does not meet the definition of “employee” in 5 U.S.C. 5541(2) for the purposes of 5 U.S.C. 5542, 5543, and 5544, is subject to section 7(k) of the Act and this section. (See § 551.501(a)(1) and (5)). Such an employee shall be paid at a rate equal to one and one-half times the employee's hourly regular rate of pay for those hours in a tour of duty which exceed the overtime standard for a work period specified in section 7(k) of the Act.
(b) The tour of duty of an employee covered by paragraph (a) of this section shall include all time the employee is on duty. Meal periods and sleep periods are included in the tour of duty except as otherwise provided in §§ 551.411(c) and 551.432(b).
5. Add paragraph (c) to § 551.601 to read as follows:
(3) Work in forest protection, such as clearing fire trails or roads, piling and burning slash, maintaining firefighting equipment, or acting as fire lookout or fire patrolman away from the actual logging operations, provided that this provision shall not apply to the felling or bucking of timber, the collecting or transporting of logs, the operation of power-driven machinery, the handling or use of explosives, and work on trestles; Start Printed Page 52774
6. Revise subpart G to read as follows:
551.707
(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 NGP, the claimant must use that NGP 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.
(1) The identity of the claimant (see § 551.706(a)(2) regarding requesting confidentiality) and any designated representative, the agency employing Start Printed Page 52775the claimant during the claim period, the position (job title, series, and grade, or equivalent level) 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;
(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.
(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. Start Printed Page 52776
[FR Doc. E7-18027 Filed 9-14-07; 8:45 am]