tablishment where employees subject to the provisions of § 730.2 are working such notices of this part as shall be prescribed from time to time by the Ad

ministrator of the Wage and Hour Division of the United States Department of Labor and shall give such other notice as the Administrator may prescribe.

§ 775.0

General enforcement policy.

(a) In order to clarify at this time the practices and policies which will guide the administration and enforcement of the Fair Labor Standards Act of 1938, as amended (52 Stat. 1060, 29 U.S.C. 201219), and the Walsh-Healey Act, as amended (49 Stat. 2036, 41 U.S.C. 35-45), as affected by the Portal-to-Portal Act of 1947 (61 Stat. 84; 29 U.S.C., Sup. 251 et seq.), the following policy is announced effective June 30, 1947.

(b) The investigation, inspection and enforcement activities of all officers and agencies of the Department of Labor as they relate to the Fair Labor Standards Act and the Walsh-Healey Act will be carried out on the basis that all employers in all industries whose activities are subject to the provisions of the Fair Labor Standards Act or the WalshHealey Act are responsible for strict compliance with the provisions thereof and the regulations issued pursuant thereto.

(c) Any statements, orders, or instructions inconsistent herewith are rescinded. (49 Stat. 2036, 52 Stat. 1060, 61 Stat. 84; 29 U.S.C. 201 et seq., 251 et seq., 41 U.S.C. 35 et seq.) [12 F.R. 3915, June 17, 1947]

776.13 Commerce crossing international boundaries.

ENGAGING IN "THE PRODUCTION OF GOODS FOR COMMERCE"

776.14 776.15 776.16

Elements of "production" coverage. "Production."

Employment in "producing,

in any other manner working on" goods.

776.17 Employment in a "closely related process or occupation directly essential to" production of goods. 776.18 Employees of producers for commerce.

776.22a Extension of coverage to employment in certain enterprises.

INDIVIDUAL COVERAGE IN THE CONSTRUCTION INDUSTRY

776.22b Guiding principles.

776.23 Employment in the construction industry.

776.24 Travel in connection with construction projects.

776.25 Regular and recurring activities as basis of coverage.

776.26 Relationship of the construction work to the covered facility. 776.27 Construction which is related to covered production.

776.28 Covered preparatory activities. 776.29 Instrumentalities and channels of interstate commerce. 776.30 Construction performed on temporarily idle facilities.

AUTHORITY: The provisions of this Part 776 issued under 52 Stat. 1060, as amended; 29 U.S.C. 201-219.

Subpart A-General

SOURCE: The provisions of this Subpart A appear at 15 FR 2925, May 17, 1950, unless otherwise noted.

§ 776.0

Subpart limited to individual employee coverage.

This subpart, which was adopted before the amendments of 1961 and 1966 to the Fair Labor Standards Act, is limited to discussion of general coverage of the Act on the traditional basis of engagement by individual employees "in commerce or in the production of goods for commerce". The 1961 and 1966 amendments broadened coverage by extending it to other employees on an "enterprise" basis, when "employed in an enterprise engaged in commerce or in the production of goods for commerce" as defined in section 3 (r), (s), of the present Act. Employees covered under the principles discussed in this subpart Act remain covered under the amended; however, an employee who would not be individually covered under

as

the principles discussed in this subpart may now be subject to the Act if he is employed in a covered enterprise as defined in the amendments. Questions of "enterprise coverage" not answered in published statements of the Department of Labor may be addressed to the Administrator of the Wage and Hour Division, Department of Labor, Washington, D.C. 20210 or assistance may be requested from any of the Regional or District Offices of the Division. [35 F.R. 5543, Apr. 3, 1970]

INDIVIDUAL EMPLOYEE COVERAGE

§ 776.0a Introductory statement.

1

(a) Scope and significance of this part. (1) The Fair Labor Standards Act of 1938 1 (hereinafter referred to as the act), brings within the general coverage of its wage and hours provisions every employee who is "engaged in commerce or in the production of goods for commerce."" What employees are so en

135 F.R. 5543, Apr. 3, 1970.

la Public Law 718, 75th Cong., 3d sess. (52 Stat. 1060), as amended by the Act of June 26, 1940 (Pub. Res. No. 88, 76th Cong., 3d sess., 54 Stat. 616); by Reorganization Plan No. 2 (60 Stat. 1095), effective July 16, 1946; by the Portal-to-Portal Act of 1947, approved May 14, 1947 (61 Stat. 84); and by the Fair Labor Standards Amendments of 1949, approved October 26, 1949 (Public Law 393, 81st Cong., 1st sess., 63 Stat. 910); by Reorganization Plan No. 6 of 1950 (15 F.R. 3174), effective May 24, 1950; and by the Fair Labor Standards Amendments of 1955, approved August 12, 1955 (Public Law 381, 84th Cong., 1st sess., C. 867, 69 Stat. 711).

"The requirement of section 6 as to minimum wages is: "Every employer shall pay to each of his employees who is engaged in commerce or in the production of goods for commerce wages at the following rates-" (not less than $1.00 an hour, except in Puerto Rico and the Virgin Islands to which special provisions apply).

The requirement of section 7 as to maximum hours which an employee may work without receiving extra pay for overtime is: "no employer shall employ any of his employees who is engaged in commerce or in the production of goods for commerce for a workweek longer than forty hours, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and onehalf times the regular rate at which he is employed."

gaged must be ascertained in the light of the definitions of "commerce", "goods", and "produced" which are set forth in the act as amended by the Fair Labor Standards Amendments of 1949, giving due regard to authoritative interpretations by the courts and to the legislative history of the act, as amended. Interpretations of the Administrator of the Wage and Hour Division with respect to this general coverage are set forth in this part to provide “a practical guide to employers and employees as to how the office representing the public interest in its enforcement will seek to apply it." These interpretations with respect to the general coverage of the wage and hours provisions of the act, indicate the construction of the law which the Administrator believes to be correct and which will guide him in the performance of his administrative duties under the act unless and until he is otherwise directed by authoritative decisions of the courts or concludes, upon reexamination of an interpretation, that it is incorrect.

(2) Under the Portal-to-Portal Act of 1947, interpretations of the Administrator may, under certain circumstances, be controlling in determining the rights and liabilities of employers and employees. The interpretations contained in this bulletin are interpretations on which reliance may be placed as provided in section 10 of the Portal-to-Portal Act, so long as they remain effective and are not modified, amended, rescinded, or determined by judicial authority to be incorrect. However, the omission to discuss a particular problem in this part or in interpretations supplementing it should not be taken to indicate the adoption of any position by the Administrator with respect to such problem or to constitute an administrative interpretation or practice or enforcement policy.

(b) Exemptions and child labor provisions not discussed. This part does

not deal with the various specific exemptions provided in the statute, under which certain employees engaged in commerce or in the production of goods for commerce and thus within the general coverage of the wage and hours provisions are wholly or partially excluded from the protection of the act's minimum-wage and overtime-pay requirements. Some of these exemptions are self-executing; others call for definitions or other action by the Administrator. Regulations and interpretations relating to specific exemptions may be found in other parts of this chapter. Coverage and exemptions under the child labor provisions of the act are discussed in a separate interpretative bulletin (§§ 570.101 to 570.121 of this chapter) issued by the Secretary of Labor.

(c) Earlier interpretations superseded. All general and specific interpretations issued prior to July 11, 1947, with respect to the general coverage of the wage and hours provisions of the act were rescinded and withdrawn by § 776.0(b) of the general statement on this subject, published in the FEDERAL REGISTER On that date as Part 776 of this chapter (12 F.R. 4583). To the extent that interpretations contained in such general statement or in releases, opinion letters, and other statements issued on or after July 11, 1947, are inconsistent with the provisions of the Fair Labor Standards Amendments of 1949, they do not continue in effect after January 24, 1950. Effective on the date of its publication in the FEDERAL REGISTER, Subpart A of this interpretative bulletin replaces and supersedes the general statement previously published as Part

• Section 16 (c) of the Fair Labor Standards Amendments of 1949 (63 Stat. 910) provides:

"Any order, regulation, or interpretation of the Administrator of the Wage and Hour Division or of the Secretary of Labor, and any agreement entered into by the Administrator or the Secretary, in effect under the provisions of the Fair Labor Standards Act of 1938, as amended, on the effective date of this act, shall remain in effect as an order, regulation, interpretation, or agreement of the Administrator or the Secretary, as the case may be, pursuant to this act, except to the extent that any such order, regulation, interpretation, or agreement may be inconsistent with the provisions of this act, or may from time to time be amended, modifled, or rescinded by the Administrator or the Secretary, as the case may be, in accordance with the provisions of this act."

776 of this chapter, which statement is withdrawn. All other administrative rulings, interpretations, practices and enforcement policies relating to the general coverage of the wages and hours provisions of the act and not withdrawn prior to such date are, to the extent that they are inconsistent with or in conflict with the principles stated in this interpretative bulletin, hereby rescinded and withdrawn.

[15 F.R. 2925, May 17, 1950, as amended at 21 F.R. 1448, Mar. 6, 1956. Redesignated, 35 FR. 5543, Apr. 3, 1970]

HOW COVERAGE IS DETERMINED

§ 776.1

General interpretative guides. The Congressional policy under which employees "engaged in commerce or in the production of goods for commerce" are brought within the general coverage of the act's wage and hours provisions is stated in section 2 of the act. This section makes it clear that the Congressional power to regulate interstate and foreign commerce is exercised in this act in order to remedy certain evils, namely, "labor conditions detrimental to the maintenance of the minimum standards of living necessary for health, efficiency, and the general well being of workers" which Congress found "(a) causes commerce and the channels and instrumentalities of commerce to be used to perpetuate such labor conditions among the workers of the several States; (b) burdens commerce and the free flow of goods in commerce; (c) constitutes an unfair method of competition in commerce; (d) leads to labor disputes burdening and obstructing commerce and the free flow of goods in commerce and (e) interferes with the orderly and fair marketing of goods in commerce." In carrying out these broad remedial purposes, however, the Congress did not choose to make the scope of the act coextensive in all respects with the limits of its power over commerce or to apply it to all activities affecting commerce.' Congress delimited the area in which the act operates by providing for certain exceptions and exemptions, and by making

"Kirschbaum v. Walling, 316 U.S. 517; Walling v. Jacksonville Paper Co., 317 U.S. 564; 10 East 40th St. Bldg. Co. v. Callus, 325 U.S. 578; A. H. Phillips, Inc. v. Walling, 324 U.S. 490; Fleming v. Hawkeye Pearl Button Co., 113 F.2d 52 (C.A. 8); Armstrong v. Walling, 161 F. 2d 515 (C.A. 1); Bowie v. Gonzalez, 117 F.2d 11 (C.A. 1).

39-103-75- -21

wage-hour coverage applicable only to employees who are "engaged in" either "commerce", as defined in the act, or "production" of "goods" for such commerce, within the meaning of the act's definitions of these terms. The Fair Labor Standards Amendments of 1949 indicate an intention to restrict somewhat the category of employees within the reach of the act under the former definition of "produced" and to expand to some extent the group covered under the former definition of "commerce." In his interpretations, the Administrator will endeavor to give effect to both the broad remedial purposes of the act and the limitations on its application, seeking guidance in his task from the terms of the statute, from authoritative court decisions, and from the legislative history of the act, as amended."

§ 776.2 Employee basis of coverage.

(a) The coverage of the act's wage and hours provisions as described in sections 6 and 7 does not deal in a blanket way with industries as a whole. Thus, in section 6, it is provided that every employer shall pay the statutory minimum wage to "each of his employees who is engaged in commerce or in the production of goods for commerce." It thus becomes primarily an individual matter as to the nature of the employment of the particular employee. Some employers in a given industry may have no employees covered by the act; other employers in the industry may have some employees covered by the act, and not others; still other employers in the industry may have all their employees within the act's coverage. If, after considering all relevant factors, employees are found to be engaged in cov

& Footnote references to some of the relevant court decisions are made for the assistance of readers who may be interested in such decisions.

Footnote reference to the legislative history of the 1949 amendments are made at points in this part where it is believed they may be helpful. References to the Statement of the Managers on the Part of the House, appended to the Conference Report on the amendments (H. Rept. No. 1453, 81st Cong., 1st sess.) are abbreviated: H. Mgrs. St. 1949, p. -. References to the Statement of a majority of the Senate Conferees, 95 Cong. Rec., October 19, 1949 at 15372-15377 are abbreviated: Sen. St., 1949 Cong. Rec. References to the Congressional Record are to the 1949 daily issues, the permanent volumes being unavailable at the time this part was prepared.

ered work, their employer cannot avoid his obligations to them under the act on the ground that he is not "engaged in commerce or in the production of goods for commerce." To the extent that his employees are so engaged, he is himself so engaged.

(b) In determining whether an individual employee is within the coverage of the wage and hours provisions, however, the relationship of an employer's business to commerce or to the production of goods for commerce may sometimes be an important indication of the character of the employee's work." It is apparent, too, from the 1949 amendment to the definition of "produced" and its legislative history that an examination of the character of the employer's business will in some borderline situations be necessary in determining whether the employee's occupation bears the requisite close relationship to production for commerce."

§ 776.3

Persons engaging in both covered and noncovered activities. The act applies to employees "engaged in commerce or in the production of goods for commerce" without regard to whether such employees, or their employer, are also engaged in other activities which would not bring them within the coverage of the act. The act makes no distinction as to the percentage, volume, or amount of activities of either employee or employer which constitute engaging in commerce or in the production of goods for commerce. Sections 6 and 7 refer to "each" and "any" employee so engaged, and section 15(a) (1) prohibits the introduction into the channels of interstate or foreign commerce of "any" goods in the production of which "any" employee was employed in violation of section 6 or section 7. Although employees doing work in connection with mere isolated, sporadic, or occasional shipments in commerce of in

• Kirschbaum v. Walling, 316 U.S. 517. See also Walling v. Jacksonville Paper Co., 317 U.S. 564; McLeod v. Threlkeld, 319 U.S. 491; Mabee v. White Plains Pub. Co., 327 U.S. 178.

10 Borden Co. v. Borella, 325 U.S. 679; 10 E. 40th St. Bldg. Co. v. Callus, 325 US. 578; Armour & Co. v. Wantock, 323 U.S. 126; Donovan v. Shell Oil Co., 168 F. 2d 229 (C.A. 4); Hertz Driveurself Stations v. United States, 150 F.2d 923 (C.A. 8); Horton v. Wilson & Co., 223 N. C. 71, 25 S. E. 2d 437.

"H. Mgrs. St., 1949, pp. 14, 15; Sen. St. 1949 Cong. Rec. 15372.

substantial amounts of goods will not be considered covered by virtue of that fact alone, the law is settled that every employee whose engagement in activities in commerce or in the production of goods for commerce, even though small in amount, is regular and recurring, is covered by the act." This does not, however, necessarily mean that an employee who at some particular time may engage in work which brings him within the coverage of the act is, by reason of that fact, thereafter indefinitely entitled to its benefits.

§ 776.4 Workweek standard.

(a) The workweek is to be taken as the standard in determining the applicability of the act." Thus, if in any workweek an employee is engaged in both covered and noncovered work he is entitled to both the wage and hours benefits of the act for all the time worked in that week, unless exempted therefrom by some specific provision of the act. The proportion of his time spent by the employee in each type of work is not material. If he spends any part of the workweek in covered work he will be considered on exactly the same basis as if he had engaged exclusively in such work for the entire period. Accordingly, the total number of hours which he works during the workweek at both types of work must be compensated for in accordance with the minimum wage and overtime pay provisions of the act.

(b) It is thus recognized that an employee may be subject to the act in one workweek and not in the next. It is likewise true that some employees of an employer may be subject to the act and others not. But the burden of effecting segregation between covered and non

12 United States v. Darby, 312 U.S. 100; Mabee v. White Plains Pub. Co., 327 U.S. 178; Schmidt v. Peoples Telephone Union of Maryville, Missouri, 138 F. 2d 13 (C.A. 8); New Mexico Public Service Co. v. Engel, 145 F. 2d 636 (C.A. 10); Sun Pub. Co. v. Walling, 140 F.2d 445 (C.A. 6), certiorari denied 322 U.S. 728; Davis v. Goodman Lumber Co., 133 F. 2d 52 (C.A. 4).

13 See Gordon's Transports v. Walling, 163 F.2d 203 (C.A. 6), certiorari denied 332 U.S. 774; Walling v. Fox-Pelletier Detective

Agency, 4 W.H. Cases 452 (W.D. Tenn.), 8 Labor Cases 62,219; Walling v. Black Diamond Coal Mining Co., 59 F. Supp. 348 (W.D. Ky.); Fleming v. Knox, 42 F. Supp. 948 (S.D. Ga.); Roberg v. Henry Phipps Estate, 156 F. 2d 958 (C.A. 2). For a definition of the workweek, see § 778.2(c) of this chapter.