[Federal Register Volume 60, Number 174 (Friday, September 8, 1995)]
[Rules and Regulations]
[Pages 46766-46768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22141]
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DEPARTMENT OF LABOR
Wage and Hour Division
29 CFR Part 552
RIN 1215-AA82
Application of the Fair Labor Standards Act to Domestic Service
AGENCY: Wage and Hour Division, Employment Standards Administration,
Labor.
ACTION: Final rule.
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SUMMARY: This rule revises regulations to incorporate changes
necessitated by amendments to Title II of the Social Security Act which
were enacted October 22, 1994, as Public Law 103-387 (Social Security
Domestic Employment Reform Act), and makes other updating and technical
revisions. A separate document published elsewhere in this issue
reopens the comment period regarding the proposed revision to
Sec. 552.109, which was published in the Federal Register on December
30, 1993 (58 FR 69310), to clarify the minimum wage and overtime
exemption under the Fair Labor Standards Act (FLSA) for certain
employees of third-party employers who provide domestic companionship
services.
DATES: This regulation is effective October 10, 1995.
FOR FURTHER INFORMATION CONTACT:
Richard M. Brennan, Acting Director, Division of Policy and Analysis,
Wage and Hour Division, Employment Standards Administration, U.S.
Department of Labor, room s-3506, 200 Constitution Avenue, NW.,
Washington, DC 20210, (202) 219-8412. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
I. Paperwork Reduction Act
This regulation contains no reporting or recordkeeping requirements
subject to the Paperwork Reduction Act of 1980 (Pub. L. 96-511). The
general FLSA information collection requirements (including
requirements contained in part 552) were approved by the Office of
Management and Budget under the control number 1215-0017.
II. Background
The Department published a notice of proposed rulemaking in the
Federal Register on December 30, 1993 (58 FR 69310), inviting public
comments until February 28, 1994, on the following technical
modifications to 29 CFR part 552:
(1) Revise Sec. 552.100(a)(1) to delete references to former
minimum wage
[[Page 46767]]
levels that have been overtaken by subsequent statutory increases in
the minimum wage since part 552 was last revised;
(2) Revise Sec. 552.100(c) to reflect updated credits, in a
percentage format, that can be taken by an employer for meals and
lodging furnished to a domestic service employee;
(3) Revise Sec. 552.101(a)(1) to change the reference ``20 CFR
404.1027(j)'' to ``20 CFR 404.1057'' pursuant to a redesignation in
regulations issued under the Social Security Act;
(4) Revise Sec. 552.105(a) to change the FLSA reference ``section
3(s)(4)'' to ``section 3(s)(1)(B)'' in accordance with the Fair Labor
Standards Amendments of 1989, 103 Stat. 938;
(5) Revise Sec. 552.2(b) to change the reference in the third
sentence from ``Section 7(1)'' to ``Section 7(l) (substituting a lower
case letter ``l'' for the number ``1'' in the parentheses); and
(6) Revise the last sentence of Sec. 552.104(b) to correct two
spelling errors.
In addition, the Department invited public comments on a proposal
to revise Sec. 552.109 to clarify that, in order for the exemptions in
FLSA sections 13(a)(15) and 13(b)(21) to apply, employees engaged in
providing companionship services and live-in domestic service employees
who are employed by a third-party employer or agency must also be
``jointly'' employed by the family or household using their services.
A total of 7 comments were received in response to the notice. All
focused their remarks on the proposed revision to Sec. 552.109
concerning joint employment and third-party employers. The Department
is continuing to consider this particular proposal, and a separate
document published elsewhere in this issue reopens and extends the
comment period regarding the proposed revision to Sec. 552.109.
III. Summary of Final Rule
A. Updates and Technical Revisions
No public comments were received on the updating and technical
changes that were proposed in the December 1993 notice, and such
revisions are adopted in the final rule as proposed.
B. Revisions Required by the ``Social Security Domestic Employment
Reform Act of 1994''
The Social Security Domestic Employment Reform Act of 1994 (Pub. L.
103-387, 108 Stat. 4071) was enacted into law on October 22, 1994.
Among other things, this law amended section 3121(x) of the Internal
Revenue Code of 1986 to change the ``threshold'' for withholding and
paying social security taxes on domestic workers from $50 per quarter
to $1,000 annually in 1995. In the case of years after 1995, the
applicable $1000 threshold is to be indexed in $100 increments rounded
down to the nearest $100. The new law also amended section 209(a)(6)
(formerly designated as 209(g)) of the Social Security Act (42 U.S.C.
409(a)(6)(B)) to exclude from the term ``wages'' cash remuneration paid
by an employer for domestic service employment if the cash remuneration
is less than the applicable dollar threshold as defined in section
3121(x) of the Internal Revenue Code of 1986.
As a consequence, the reference in Sec. 552.2(b)(1) to FLSA's
coverage of domestic service employees under section 6(f) of FLSA based
on section 209(g) of the Social Security Act and to a $50 cash
threshold must be modified to conform the regulatory language to the
recent statutory changes. This revision of Sec. 552.2(b)(1) is
technical in nature and based on the Social Security Domestic
Employment Reform Act of 1994 (Pub. L. 103-387, 108 Stat. 4071), about
which the Department has no discretion under section 6(f) of the FLSA.
Pursuant to 5 U.S.C. 553(b)(3) (A) and (B), this minor, clarifying
revision does not require prior notice and comment.
Executive Order 12866/Sec. 202 of the Unfunded Mandates Reform Act
or 1995
This final rule is not a ``significant regulatory action'' within
the meaning of Executive Order 12866, nor does it require a section 202
statement under the Unfunded Mandates Reform Act of 1995. The revisions
adopted in this rule are technical in nature or are otherwise required
by a recent statutory enactment of the Congress. In any event, the
revisions will not have a significant impact on the employment of
domestic service employees. Accordingly, these changes are not expected
to result in a rule that may: (1) Have an annual effect on the economy
of $100 million or more or adversely affect in a material way the
economy, a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
Executive Order 12866. Therefore, no regulatory impact analysis has
been prepared.
Regulatory Flexibility Analysis
This final rule will not have a significant economic impact on a
substantial number of small entities. The changes being adopted in this
rule simply conform the regulations to updates in related legislation
and are technical in nature. Therefore, the rule is not expected to
have a ``significant economic impact on a substantial number of small
entities'' within the meaning of the Regulatory Flexibility Act. A
regulatory flexibility analysis is not required.
Document Preparation
This document was prepared under the direction and control of Maria
Echaveste, Administrator, Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor.
List of Subjects in 29 CFR Part 552
Domestic service workers, Employment, Labor, Minimum wages,
Overtime pay, Wages.
Accordingly, part 552 of title 29 of the Code of Federal
Regulations is amended as set forth below.
Signed at Washington, DC, on this 31st day of August, 1995.
Maria Echaveste,
Administrator, Wage and Hour Division.
PART 552--APPLICATION OF THE FAIR LABOR STANDARDS ACT TO DOMESTIC
SERVICE
1. The authority citation for part 552 is revised to read as
follows:
Authority: Secs. 13(a)(15) and 13(b)(21) of the Fair Labor
Standards Act, as amended (29 U.S.C. 213(a)(15), (b)(21)), 88 Stat. 62;
Sec. 29(b) of the Fair Labor Standards Amendments of 1974 (Pub. L. 93-
259, 88 Stat. 76), unless otherwise noted.
2. Section 552.2(b)(1) is revised to read as follows:
Sec. 552.2 Purpose and scope.
(a) * * *
(b) * * *
(1) If the employee's compensation for such services from his/her
employer would constitute wages under section 209(a)(6) of title II of
the Social Security Act, that is, if the cash remuneration during a
calendar year is not less than $1,000 in 1995, or the amount designated
for subsequent years pursuant to the adjustment provision in
[[Page 46768]]
section 3121(x) of the Internal Revenue Code of 1986; or
* * * * *
Sec. 552.2 [Amended]
3. In Sec. 552.2, paragraph (b), the reference in the first
sentence of the concluding text is revised to read ``Section 7(l)''
instead of ``Section 7(1)'' (substituting a lower case letter ``l'' for
the number ``1'' in the parentheses).
4. In Section 552.100 (paragraphs (a)(1), (c) and (d) are revised
to read as follows:
Sec. 552.100 Application of minimum wage and overtime provisions.
(a)(1) Domestic service employees must receive for employment in
any household a minimum wage of not less than that required by section
6(a) of the Fair Labor Standards Act.
* * * * *
(c) For enforcement purposes, the Administrator will accept a
credit taken by the employer of up to 37.5 percent of the statutory
minimum hourly wage for a breakfast (if furnished), up to 50 percent of
the statutory minimum hourly wage for a lunch (if furnished), and up to
62.5 percent of the statutory minimum hourly wage for a dinner (if
furnished), which meal credits when combined do not in total exceed 150
percent of the statutory minimum hourly wage for any day. Nothing
herein shall prevent employers from crediting themselves with the
actual cost or fair value of furnishing meals, whichever is less, as
determined in accordance with part 531 of this chapter, if such cost or
fair value is different from the meal credits specified above:
Provided, however, That employers keep, maintain and preserve (for a
period of 3 years) the records on which they rely to justify such
different cost figures.
(d) In the case of lodging furnished to live-in domestic service
employees, the Administrator will accept a credit taken by the employer
of up to seven and one-half times the statutory minimum hourly wage for
each week lodging is furnished. Nothing herein shall prevent employers
from crediting themselves with the actual cost or fair value of
furnishing lodging, whichever is less, as determined in accordance with
part 531 of this chapter, if such cost or fair value is different from
the amount specified above, provided however, that employers keep,
maintain, and preserve (for a period of 3 years) the records on which
they rely to justify such different cost figures. In determining
reasonable cost or fair value, the regulations and rulings in 29 CFR
part 531 are applicable.
Sec. 552.101 [Amended]
5. In Sec. 552.101, the parenthetical reference in the first
sentence of paragraph (a) is revised to read ``(20 CFR 404.1057)''.
6. In Sec. 552.104, paragraph (b) is revised to read as follows:
Sec. 552.104 Babysitting services performed on a casual basis.
* * * * *
(b) Employment in babysitting services would usually be on a
``casual basis,'' whether performed for one or more employees, if such
employment by all such employers does not exceed 20 hours per week in
the aggregate. Employment in excess of these hours may still be on a
``casual basis'' if the excessive hours of employment are without
regularity or are for irregular or intermittent periods. Employment in
babysitting services shall also be deemed to be on a ``casual basis''
(regardless of the number of weekly hours worked by the babysitter) in
the case of individuals whose vocations are not domestic service who
accompany families for a vacation period to take care of the children
if the duration of such employment does not exceed 6 weeks.
* * * * *
Sec. 552.105 [Amended]
7. In Sec. 552.105, the reference in the fourth sentence of
paragraph (a) is revised to read ``section 3(s)(1)(B) of the Act * *
*''
[FR Doc. 95-22141 Filed 9-7-95; 8:45 am]
BILLING CODE 4510-27-M