[Federal Register Volume 60, Number 6 (Tuesday, January 10, 1995)]
[Proposed Rules]
[Pages 2549-2552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-486]



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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 551

RIN 3206-AA40


Pay Administration Under the Fair Labor Standards Act

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The U.S. Office of Personnel Management (OPM) is publishing a 
proposed rule to amend regulations on the Fair Labor Standards Act 
(FLSA or the ``Act''). This rule supersedes instructions contained in 
Federal Personnel Manual Letter 551-9, Civil Service Commission System 
for Administering the Fair Labor Standards Act (FLSA) Compliance and 
Complaint System (March 30, 1976), provisionally retained through 
December 31, 1994; and provides for OPM compliance authority regarding 
FLSA matters.

DATES: Comments must be received on or before February 9, 1995.

ADDRESSES: Written comments may be sent to Bruce Oland, Chief, Program 
Development Division, Office of Agency Compliance and Evaluation, Room 
7661, U.S. Office of Personnel Management, 1900 E Street NW., 
Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT:
Jeffery Miller, (202) 606-2530.

SUPPLEMENTARY INFORMATION: In 1974, Congress amended the FLSA to 
authorize the former Civil Service Commission (CSC) to administer the 
Act for Federal employees. OPM has since taken over this responsibility 
and issued substantive regulations at part 551 of title 5, Code of 
Federal Regulations, prescribing the criteria and conditions for 
administration of the Act. These regulations have, from time to time, 
been supplemented by issuances under the Federal Personnel Manual 
System (FPM). FPM Letter 551-9 describes the complaint and compliance 
system for FLSA complaints. One of the key features of this system is 
that OPM served as an adjudicator of individual (and group) FLSA 
complaints. This role remained essentially unchanged until 1990.
    On March 30, 1990, a Federal court in Carter v. Gibbs, 909 F.2d 
1452 (Fed. Cir. 1990), cert. denied, 111 S. Ct. 46 (1990), ruled that 
the rights of certain employees to seek review of FLSA complaints were 
limited by the Civil Service Reform Act of 1978 (CSRA). In this regard, 
the court determined that employees covered by negotiated grievance 
procedures (NGP's) established under Section 7121 of title 5, United 
States Code, could not seek judicial review of matters under the Act 
and that their only forum in which to seek relief is through the NGP up 
to and including the arbitration process. A subsequent decision by the 
Federal Circuit in Muniz v. U.S., 972 F. 2d 1304 (Fed. Cir. 1992), 
expanded on Carter by holding that its principles also applied to 
former employees of agencies (including retirees) and employees 
promoted out of bargaining unit positions.
    On October 1, 1990, the Supreme Court denied certiorari of the 
Federal Circuit's en banc decision in Carter. As a result, OPM informed 
agencies by memorandum dated November 29, 1990, that, in view of 
Carter, OPM would no longer adjudicate complaints from employees 
covered by NGP's when those NGP's did not exclude grievances over FLSA 
matters, but would continue to accept complaints from other employees.
    On April 23, 1992, the General Accounting Office (GAO), in Cecil E. 
Riggs, et al., B-222926.3, announced that, in view of Carter and other 
judicial decisions, it too would no longer accept complaints from 
employees covered by NGP's. The GAO subsequently amended (57 FR 31272, 
July 14, 1992) its regulations at 4 CFR parts 22 and 30 to reflect this 
policy change. The GAO noted that it would continue to accept claims 
from Federal employees not subject to an NGP.
    With judicial and GAO decisions placing most FLSA-covered employees 
under the exclusive jurisdiction of the NGP for the purpose of FLSA 
complaints, OPM has reviewed its FLSA compliance program to determine 
whether the program could be changed in a manner that would facilitate 
efficient governmentwide administration of the Act. Specifically, OPM 
believes that FLSA complaint adjudication at the agency level, now 
provided to most FLSA-covered employees under the above decisions, can 
and should be extended to all employees. In this event, OPM would no 
longer adjudicate FLSA complaints. In the case of bargaining unit 
employees, the procedure would be the NGP (unless FLSA complaints are 
excluded), with the possibility of invoking binding arbitration. All 
other employees would seek redress through and agency-based review or 
grievance system. Such employees also would have access to GAO and the 
courts if they are not satisfied with the agency decision, thus 
providing them with a third-party review opportunity. OPM believes this 
change, as well as other provisions of this proposed subpart, will make 
administration of the Act more efficient and consistent. The subpart 
more clearly defines the various FLSA complaint resolution forums and 
explains which employees have access to which forum at a particular 
time; i.e. negotiated grievance procedures, or other agency-based 
review or grievance systems, the GAO, and the judiciary.
    OPM also believes that the complaints adjudication process is 
likely to work better if the parties to the dispute are better aware of 
their respective responsibilities. Therefore, the proposed rule 
contains sections discussing the responsibilities of both the employee 
and the agency. Another section describes the responsibilities of OPM. 
In this regard, while OPM proposes to discontinue accepting complaints, 
OPM [[Page 2550]] also proposes to provide guidance and information to 
agencies and employees on request. OPM would provide legal 
interpretations on technical FLSA issues (binding on decision-makers in 
relevant causes) and also would provide general technical assistance 
(non-binding). OPM's regional offices would be available to provide 
general assistance but not legal interpretations.
    The authority of GAO to settle claims against the United States is 
contained in 31 U.S.C. 3702 (b)(1) which provides that a claim filed 
with the Office must be received within 6 years after the date the 
claim accrues ``except * * * as provided by * * * another law.'' In a 
decison rendered on May 23, 1994 (Joseph M. Ford, B-250051), GAO 
announced that the 2-year statute of limitations (3 years for willful 
violations) as provided in the Portal-to-Portal Act of 1947, as 
amended, 29 U.S.C. Sec. 255(a), would apply to all FLSA claims with GAO 
that have not been settled prior to that date and all claims filed with 
GAO after that date. Section 640 of Public Law 103-329, signed 
September 30, 1994, provides for a 6-year statute of limitations to any 
claim of a Federal employee under the Fair Labor Standards Act of 1938 
(29 U.S.C. 201 et seq.) for claims filed before June 30, 1994. Under 
this provision, claims filed on or after June 30, 1994, are subject to 
a 2-year statute of limitations, based on the May 23 Comptroller 
General decision. The 2-year statute of limitations would now apply to 
employees covered by NGP's when those NGP's do not exclude grievances 
over FLSA matters; and to employees not covered by an NGP whose pay 
claims are reviewable under other agency-based review or grievance 
systems. The GAO decision would not apply to claims that arise solely 
out of the title 5 overtime provisions; that is, the 6-year limitation 
period still applies to title 5 claims.
    The proposed rule provides for agency maintenance of records of 
compliance adjudication and would require agencies to forward to OPM 
copies of final administrative decisions on FLSA adjudication 
activities. OPM would utilize this information to help ensure that the 
requirements of the Act are being met by agencies and employees and to 
help evaluate how well the adjudication system is working.
    The proposed rule explains that complaints covered by OPM 
regulations do not include matters pertaining to equal pay under 29 
U.S.C. 206(d). Equal pay matters are resolved by procedures established 
by the Equal Employment Opportunity Commission.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because it applies 
only to Federal employees.

List of Subjects in 5 CFR Part 551

    Government employees, Wages.

Office of Personnel Management.
James B. King,
Director.
    Accordingly, OPM is proposing to amend part 551 as follows:
    1. The title and authority citation for part 551 is revised to read 
as follows:

PART 551--PAY ADMINISTRATION UNDER THE FAIR LABOR STANDARDS ACT

    Authority: Sec. 4(f) of the Fair Labor Standards Act of 1938, as 
amended by Pub. L. 93-259, 88 Stat. 55 (29 U.S.C. 204f); Sec. 210 of 
the Federal Employees Pay Comparability Act of 1990, Pub. L. 101-
509, 104 Stat. 1460.

    2. Subpart F is added to read as follows:

Subpart F--Complaints and Compliance

551.601  Purpose.
551.602  Administrative complaint forums.
551.603  Time limits.
551.604  Employee responsibilities.
551.605  Agency responsibilities.
551.606  OPM responsibilities.
551.607  Judicial review.
551.608  OPM addresses.

Subpart F--Complaints and Compliance


Sec. 551.601  Purpose.

    This subpart constitutes OPM's complaint and compliance program for 
the resolution of matters arising under the Act. This subpart, 
established under OPM's authority to administer the Act as noted in 
Sec. 551.101, sets forth administrative complaint systems available to 
Federal employees. The subpart also describes OPM's role in assisting 
agencies to comply with the Act.


Sec. 551.602  Administrative complaint forums.

    (a) Negotiated grievance procedures. An individual covered by a 
negotiated grievance procedure (NGP) established under section 7121 of 
title 5, United States Code must utilize that procedure to seek review 
of FLSA complaints provided the NGP does not exclude such matters.
    (b) Agency-based review or grievance systems. An individual not 
covered by an NGP described in paragraph (a) of this section may file a 
request for review of an agency's FLSA determination under an agency-
based review or grievance system. Decisions under such agency-based 
systems must be in accordance with the Act and the conditions and 
criteria prescribed by this part for administration of the Act as well 
as any legal interpretations issued under Sec. 551.606. These 
procedures do not cover matters concerning ``equal pay'' under section 
206(d) of title 29, United States Code (which are subject to 
consideration by the Equal Employment Opportunity Commission under its 
regulations at part 1620 of title 29, Code of Federal Regulations).
    (c) General Accounting Office. An individual not covered by an NGP 
described in paragraph (a) of this section may file a claim concerning 
a dispute under the Act with the GAO under procedures described by GAO 
at part 30 of title 4, Code of Federal Regulations. Such a complaint 
may be filed after receiving an agency decision under paragraph (b) of 
this section or in lieu of requesting a review under paragraph (b).


Sec. 551.603  Time limits.

    (a) Administrative review. Complaints involving pay claims under 
the Act and filed under Secs. 551.602 (a) and (b) of this subpart must 
meet the time limits and procedural requirements of the complaint 
system used.
    (b) Statute of limitations. Notwithstanding any time limitations 
contained in the system being used, pay claims under the Act are 
subject to the 2-year statute of limitations provided in section 255(a) 
of title 29, United States Code for claims filed on or after June 30, 
1994. This statutory limit is satisfied (or tolled) when:
    (1) A claim is received by the agency out of whose activities the 
claim arose within 2 years from the date the claim or any portion of 
the claim accrued; or
    (2) A claim is filed directly with GAO within 2 years from the date 
the claim or any portion of the claim accrued.


Sec. 551.604  Employee responsibilities.

    (a) Filing of claims. The employee has the burden of proving 
compliance with Sec. 551.603(b) by providing documentation showing the 
date when the agency received his or her claim. Absent such 
documentation, any back payments on the claim can be made only to cover 
a period up to 2 years prior to the date of actual payment.
    (b) Hours-of-work complaints. The employee has the burden to 
provide evidence from which a reasonable inference can be drawn that he 
or she was improperly compensated for a certain amount and extent of 
work performed. A reasonable inference may [[Page 2551]] be rebutted by 
the agency as described in Sec. 551.605(b).
    (c) Waiver of rights. An employee who will accept payment in 
connection with an administrative decision on a claim must first agree 
in binding written form that, by accepting the award, the employee 
waives the right to pursue the matter in the courts or in any 
administrative forum. This requirement does not apply to payments made 
in connection with administrative adjudication of claims under 
Sec. 551.602(a).
    (d) Reprisal. An employee alleging reprisal for filing a complaint 
or causing one to be filed may file a request for review of the 
allegation under the procedures described in Secs. 551.602 (a) or (b) 
whichever applies to the employee.


Sec. 551.605   Agency responsibilities.

    (a) Processing complaints. Each agency, after providing the 
complainant written acknowledgement of receipt of the complaint, must 
process complaints under the Act that are filed under the procedures 
described in Secs. 551.602 (a) and (b). Complaint decisions must apply 
the requirements of the Act and part 551 and adhere to any relevant 
legal interpretations issued under Sec. 551.606(a).
    (b) Hours-of-work complaints. When an employee has established 
under Sec. 551.604(b) that he or she has been improperly compensated, 
the agency has the burden to provide evidence of either the precise 
amount of work performed or evidence to negate the reasonableness of 
the inference to be drawn from the employee's evidence.
    (c) Records. Each agency must maintain the following records:
    (1) Hours of work. Complete and accurate records of all hours 
worked by an agency's employees are required by section 11(c) of the 
Act and Sec. 551.402. The agency must keep such records for a minimum 
period of 6 years or after GAO audit, whichever is sooner.
    (2) Administrative complaint processes. Records of these processes 
include, at a minimum, any decisions issued under Sec. 551.602. These 
records are maintained within an agency's established system of 
records.
    (d) Legal basis for pay. An agency cannot voluntarily apply the pay 
provisions of the Act to an employee not covered by it, or to an 
employee that has been determined to be exempt from the Act. In such 
circumstances, no legal basis exists for making payment under the Act.
    (e) Service of administrative adjudication decisions. Agencies are 
required to send one copy of each final agency administrative decision 
issued under Secs. 551.602 (a) or (b) to the following address: United 
States Office of Personnel Management, Office of Agency Compliance and 
Evaluation, 1900 E Street NW., Washington, DC 20415.
    (f) Prohibition against reprisal. Section 15(a)(3) of the Act 
prohibits discharge of an employee, or discrimination against an 
employee, in reprisal for filing a complaint under the Act or causing 
one to be filed.


Sec. 551.606   OPM responsibilities.

    (a) Legal interpretations. OPM may issue legal interpretations on 
FLSA matters on its own initiative or at the request of others, 
including agency officials, individuals, representatives of individuals 
(or groups), and arbitrators. Legal interpretations are meant to convey 
official interpretations of the Act and this part and do not constitute 
findings of fact for individual (or group) complaints. They are, 
however, binding with respect to policy issues arising in the context 
of FLSA complaints adjudicated within an agency. Legal interpretations 
may be requested by writing to the address designated in Sec. 551.608.
    (b) Technical assistance. OPM provides technical assistance 
regarding employee or agency obligations under the Act in response to 
requests from all sources. Such assistance does not have the force and 
effect of official legal interpretations issued under paragraph (a) of 
this section.
    (c) Corrective action. OPM will require agency action to correct 
violations of the Act except when the same issues affecting the same 
employees are under consideration in an agency complaint forum that can 
also lead to corrective action. Corrective actions may include 
designation of FLSA exemption status, orders to compute back pay, 
assurance from the agency of future compliance, or other appropriate 
action.


Sec. 551.607   Judicial review.

    An employee may seek judicial review of a complaint in a manner 
prescribed by law.


Sec. 551.608   OPM addresses.

    Requests for legal interpretations and technical assistance under 
Sec. 551.606 (a) or (b) involving an FLSA matter in the Washington, DC 
Metropolitan Area or anywhere outside the 50 States, Puerto Rico, the 
Virgin Islands, and the Pacific Ocean area must be sent to: United 
States Office of Personnel Management, Office of Agency Compliance and 
Evaluation, 1900 E Street NW., Washington, DC 20415. Requests for legal 
interpretations involving matters in other geographical areas also must 
be sent to the above address while requests for technical assistance 
must be sent to the appropriate OPM regional office as follows:

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                  OPM Regional Office                                         Areas covered                     
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Atlanta Region, OPM, Richard B. Russell Fed. Building,   Alabama, Florida, Georgia, Mississippi, North Carolina,
 75 Spring Street SW., Atlanta, GA 30303, Telephone:      South Carolina, Tennessee, and Virginia.              
 (404) 331-3451.                                                                                                
Chicago Region, OPM, John C. Kluczynski Fed. Building,   Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan,   
 230 South Dearborn Street, Chicago, IL 60604,            Minnesota, Missouri, Nebraska, North Dakota, Ohio,    
 Telephone: (312) 353-0387.                               South Dakota, West Virginia, and Wisconsin.           
Dallas Region, OPM, 1100 Commerce Street, Dallas, TX     Arkansas, Arizona, Colorado, Louisiana, Montana, New   
 75242, Telephone: (214) 767-0561.                        Mexico, Oklahoma, Texas, Utah, and Wyoming.           
Philadelphia Region, OPM, Wm. J. Green, Jr., Fed.        Connecticut, Delaware, Maine, Maryland, Massachusetts, 
 Bldg., 600 Arch Street, Philadelphia, PA 19106,          New Hampshire, New Jersey, New York, Pennsylvania,    
 Telephone: (215) 597-9797.                               Puerto Rico, Rhode Island, Vermont, and Virgin        
                                                          Islands.                                              
San Francisco Region, OPM, 120 Howard Street, 7th        Alaska, California, Hawaii, Idaho, Nevada, Oregon,     
 Floor, San Francisco, CA 94105, Telephone: (415) 281-    Pacific Ocean Area, and Washington.                   
 7050.                                                                                                          
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[FR Doc. 95-486 Filed 1-9-95; 8:45 am]
BILLING CODE 6325-01-M