[Federal Register Volume 62, Number 31 (Friday, February 14, 1997)]
[Proposed Rules]
[Pages 7094-7105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3597]



[[Page 7093]]

_______________________________________________________________________

Part II





Department of Labor





_______________________________________________________________________



Wage and Hour Division



_______________________________________________________________________



29 CFR Parts 520, et. al.



Employment of Student-Learners, Apprentices, Learners, Messengers, and 
Student Workers; Proposed Rule

  Federal Register / Vol. 62, No. 31 / Friday, February 14, 1997 / 
Proposed Rules  

[[Page 7094]]



DEPARTMENT OF LABOR

Wage and Hour Division

29 CFR Parts 520, 521, 522, 523 and 527

RIN 1215-AB10


Employment of Student-Learners, Employment of Apprentices, 
Employment of Learners, Employment of Messengers, and Employment of 
Student Workers

AGENCY: Wage and Hour Division, Employment Standards Administration, 
Labor.

ACTION: Proposed rulemaking and request for comments.

-----------------------------------------------------------------------

SUMMARY: The Department of Labor proposes to remove the regulation 
found at 29 CFR Part 527 and consolidate the regulations found at 29 
CFR Parts 520, 521, 522, and 523, into a single Part 520. These rules 
were promulgated under section 14(a) of the Fair Labor Standards Act 
(FLSA), and provide for employment under special certificates of 
categories of workers who may be paid less than the statutory minimum 
wage to prevent the curtailment of employment opportunities. These 
workers include apprentices, messengers and learners, including 
student-learners and student-workers. Employers must apply for special 
certificates issued by the Wage and Hour Division of the U. S. 
Department of Labor which state the terms and conditions of employment 
at subminimum wages. Many of the provisions of these individual 
regulations are duplicative and can be merged into one comprehensive 
document. The language and context of the rules have been simplified, 
shortened and formatted to make them easier to use while the essential 
requirements of the regulations have been maintained. The substantive 
criteria used to determine an employer's eligibility to receive a 
certificate under these programs remains generally unchanged.

DATES: Comments on the proposed rule are due April 15, 1997.

ADDRESSES: Submit written comments to Maria Echaveste, Administrator, 
Wage and Hour Division, Employment Standards Administration, U.S. 
Department of Labor, Room S-3502, 200 Constitution Avenue, NW., 
Washington, D.C. 20210. Commenters who wish to receive notification of 
receipt of comments are requested to include a self-addressed, stamped 
postcard or to submit them by certified mail, return receipt requested. 
As a convenience to commenters, comments may be transmitted by 
facsimile (``FAX'') machine to (202) 219-5122. This is not a toll free 
number. If transmitted by FAX and a hard copy is also submitted by 
mail, please indicate on the hard copy that it is a duplicate copy of 
the FAX transmission.

FOR FURTHER INFORMATION CONTACT: Arthur M. Kerschner, Jr., Office of 
Enforcement Policy, Child Labor and Special Employment Team, Wage and 
Hour Division, Employment Standards Administration, U.S. Department of 
Labor, Room S-3510, 200 Constitution Avenue, NW., Washington, D.C. 
20210: telephone (202) 219-7640. This is not a toll free number. Copies 
of the Notice of Proposed Rulemaking (NPRM) in alternative formats may 
be obtained by calling (202) 219-7605, (202) 219-4634 (TDD). The 
alternative formats available are large print, electronic file on 
computer disk and audio-tape.

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act

    This rule contains reporting or recordkeeping requirements subject 
to the Paperwork Reduction Act of 1980 (Pub. L. 96-511), which were 
previously approved by the Office of Management and Budget (OMB) under 
Regulations, 29 CFR Parts 516 and 522, and assigned OMB control numbers 
1215-0017 and 1215-0012, respectively.
    The recordkeeping requirements contained in these regulations have 
been submitted to and approved by OMB under control number 1215-0017 
through May 31, 1998. The recordkeeping requirements contained in 
Regulations, 29 CFR Parts 520, 521, and 522 and 527 were submitted to, 
reviewed and approved by OMB in conjunction with the basic 
recordkeeping requirements contained in Regulations, 29 CFR Part 516, 
Records to be Kept by Employers under the Fair Labor Standards Act 
(FLSA).
    The reporting requirements contained in Regulations, 29 CFR Parts 
520 (OMB No. 1215-005), and 522 (OMB No. 1215-0012) have been approved 
by OMB. However, in this proposed rulemaking the Department of Labor 
intends to consolidate current 29 CFR Parts 520, 521, and 522 into a 
revised 29 CFR Part 520 and eliminate 29 CFR Part 527. Further, the 
Department is proposing to amend the current Application for a 
Certificate to Employ Learners at Subminimum Wages (Form WH-209) so the 
form may also be used to apply for a certificate to employ messengers 
at subminimum wages. In addition, the Department is proposing to reduce 
the amount of information requested on the form which will lessen the 
reporting burden on the public.
    No application form is required to be completed by an employer to 
employ apprentices at subminimum wages, however, employers are required 
to submit a copy of the apprenticeship agreement, along with evidence 
of registration. Information collection requirements for approval and 
registration of apprenticeship agreements are contained in Regulations, 
29 CFR Part 29, Labor Standards for the Registration of Apprenticeship 
Programs and have been approved by OMB under control number 1205-0023.
    The reporting requirements contained in these proposed regulations 
have been submitted for review to OMB pursuant to section 3507(d) of 
the Paperwork Reduction Act of 1995.
    A. Title: Application for a Certificate to Employ Learners/
Messengers at Subminimum Wages, Form WH-209
    Summary: These regulations eliminate Regulations, 29 CFR Part 522 
and incorporate the procedures to obtain a certificate to employ 
learners/messengers at subminimum wages into a revised Part 520.
    Need: Section 14(a) of the FLSA provides, in part, that the 
Secretary of Labor, to the extent necessary in order to prevent 
curtailment of opportunities for employment, shall by regulation or 
order provide for the employment of learners and messengers at 
subminimum wage rates. This section also authorizes the Secretary to 
set limitations on such employment as to time, number, proportion and 
length of service.
    Form WH-209 is an application for a certificate authorizing an 
employer to employ learners and/or messengers at subminimum wage rates 
for a period up to one year. The requirements for application and 
issuance of a learner and/or messenger certificate are set forth in 
subpart D of these proposed Regulations, 29 CFR Part 520.
    Form WH-209, Application for a Certificate to Employ Learners and/
or Messengers at Subminimum Wages, is completed by an employer (in the 
case of messengers, such application may be filed by an employer or 
group of employers), in order to obtain a certificate authorizing the 
payment of learners and/or messengers at a wage rate less than the 
Federal minimum wage. Section 14(a) of FLSA requires that a certificate 
be issued before subminimum wages can be paid to learners or 
messengers.

[[Page 7095]]

    Respondents and proposed frequency of response: Learners 
historically was one of the largest subminimum wage programs with over 
2,200 certificates issued in the 1960s. However, since wage rates have 
risen in many industries where certificates were previously issued and 
an adequate supply of experienced workers exists in these industries, 
the use of learner certificates has declined drastically over the last 
twenty years. No requests to employ learners at subminimum wages have 
been received since 1995.
    The Wage and Hour Division narrowly defined what type of firm is 
eligible to acquire special certificates for messengers. No 
applications for messengers have been received since 1949.
    Estimated total annual burden: It is estimated that it takes 
approximately 20 minutes to complete a learner/messenger application. 
Since there is no current activity in this program, there is no annual 
burden and no respondent costs.
    B. Title: Application to Employ Student-Learners at Subminimum 
Wages, Form WH-205
    Summary: Section 14(a) of the FLSA provides, in part, that the 
Secretary of Labor, to the extent necessary in order to prevent 
curtailment of opportunities for employment, shall by regulation or 
order provide for the employment of learners at subminimum wage rates. 
This section also authorizes the Secretary to set limitations on such 
employment as to time, number, proportion and length of service.
    Form WH-205 is used by the employer to obtain certification to 
employ student-learners at wages lower than the Federal minimum wage to 
prevent curtailment of opportunities for employment. Upon joint 
application by the employer, the appropriate school official, and the 
student-learner, the application will provide temporary authority to 
employ the named student-learner at a subminimum wage provided the 
school official certifies that the named student will be receiving 
instruction in an accredited school and will be employed pursuant to a 
bona fide vocational training program. At the end of 30 days, this 
authority is extended to become the approved certificate unless the 
Administrator or his/her authorized representative denies the 
application, issues a certificate with modified terms and conditions, 
or expressly extends the period of review. The employer must provide a 
statement outlining the vocational program and showing, particularly, 
the processes in which the student-learner will be engaged when in 
training on the job; a statement outlining the school instruction 
directly related to the job; the age of the student-learner; and the 
period of employment at subminimum wages. The requirements concerning 
the issuance of certificates for student-learners are contained in 
proposed Regulations, 29 CFR 520, Subpart E.
    Respondents and proposed frequency of response: It is estimated 
that 800 respondents will each use the WH-205 once annually. It is 
estimated that 30 minutes is required for the respondent to complete 
the form. This results in 400 annual reporting burden hours (800 forms 
X 30 minutes).
    All employees of certain enterprises having workers engaged in 
interstate commerce, producing goods for interstate commerce, or 
handling, selling or otherwise working on goods or materials that have 
been moved in or produced for such commerce by any person are covered 
by the Fair Labor Standards Act (FLSA). In addition, employees of firms 
which are not covered enterprises under FLSA may still be subject to 
FLSA if they are individually engaged in interstate commerce or in the 
production of goods for interstate commerce. Accordingly, the FLSA 
covers a wide range of different sizes and types of employers, from a 
small retail store, to a farm, to a large multi-unit manufacturing 
enterprise with locations in several states. Any one of these 
employers, or a designated employee, may choose to complete the 
application forms described in this submission. Without the 
availability of specific data on those employers who complete these 
forms, the 1995 average hourly rate for production or nonsupervisory 
workers on nonfarm payrolls of $11.46 is being utilized to determine 
respondent costs (Monthly Labor Review, U.S. Department of Labor, 
Bureau of Labor Statistics, April, 1996). Annual respondent costs are 
estimated as $4,854 ($11.46  x  400 hours). Estimated mailing costs for 
800 applications are $280 (800  x .$.32 postage + 800  x  $.03 
envelope).
    C. Title: Application to Employ Apprentices at Subminimum Wages
    Summary: Section 14(a) of the FLSA provides, in part, in order to 
prevent curtailment of employment opportunities, for the payment of 
special minimum wage rates to workers employed as apprentices under 
special certificates issued by the Department of Labor.
    Need: There is no application form to be completed by employers to 
obtain authority from the Department to employ apprentices at 
subminimum wages. The employer or apprenticeship committee must submit 
a copy of the registered apprenticeship program or agreement for such 
apprentices to the appropriate Regional Office of the Wage and Hour 
Division of the Department of Labor. A registered apprenticeship 
program or agreement is one that has been approved by a recognized 
apprenticeship agency as meeting the basic standards adopted by the 
Department of Labor's Bureau of Apprenticeship and Training (BAT), upon 
the recommendation of the Federal Committee on Apprenticeship. A 
registered apprenticeship program constitutes a temporary special 
certificate authorizing the employment of an apprentice at the wages 
and under the conditions specified in such program until a special 
certificate is issued or denied, provided that within 90 days from the 
beginning date of the employment of such apprentices, the employer or 
the apprenticeship committee sends a copy of each apprenticeship 
agreement, with evidence of registration to the appropriate Regional 
Office of the Wage and Hour Division. The requirements concerning the 
issuance of certificates for apprentices are contained in proposed 
Regulations, 29 CFR 520, Subpart D.
    Respondents and proposed frequency of response: Regulations issued 
by the BAT no longer permit the payment of subminimum wages to 
apprentices in an approved program (29 CFR 29.5(b)(5)). Thus, no 
apprentice certificates have been issued since 1987.
    Estimated total annual burden: We estimate the submission of a copy 
of an approved apprenticeship program to take approximately one minute. 
However, since no apprenticeship programs are approved by BAT which 
employ apprentices at subminimum rates there is no annual burden and no 
respondent costs.
    The public is invited to provide comments on these information 
collection requirements so that the Department of Labor may:
    (1) evaluate whether the proposed collections of information are 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) evaluate the accuracy of the agency's estimates of the burdens 
of the collections of information, including the validity of the 
methodology and assumptions used;
    (3) enhance the quality, utility and clarity of the information to 
be collected; and
    (4) minimize the burden of the collections of information on those 
who are to respond, including through the

[[Page 7096]]

use of appropriate automated, electronic, mechanical, or other 
technological collection techniques or other forms of information 
technology, e.g., permitting electronic submission of responses.
    Written comments should be sent to the Office of Information and 
Regulatory Affairs, Office of Management and Budget, Attention: Desk 
Officer for Employment Standards Administration, U.S. Department of 
Labor, Washington, DC 20503.

II. Background

    Section 14(a) of the FLSA provides for employment under special 
certificates of categories of workers who may be paid less than the 
statutory minimum wage to prevent the curtailment of employment 
opportunities. These workers include messengers, learners (including 
student-learners and student-workers), and apprentices.
    Separate regulations were established for each of these subminimum 
wage categories with many provisions common to all the separate rules. 
These rules were also issued before the enactment of the Administrative 
Procedure Act and other laws and regulations that impact the content of 
regulations. The regulations at 29 CFR Parts 520, 521, 522, 523, and 
527 were promulgated pursuant to FLSA and establish a certificate 
system for employment of these classes of workers at subminimum wages. 
Employers must apply for special certificates issued by the Wage and 
Hour Division of the U.S. Department of Labor, which state the terms 
and conditions of employment at subminimum wages.
    Under Part 522, learners may be employed at less than the 
applicable minimum wage in certain skilled occupations. Certificates 
specify the number and proportion of learners authorized on any date, 
the subminimum wage rates permitted during the learning period, and 
length of the learning period in each occupation (ranging by occupation 
from 160 to 960 hours, and normally limited to not more than one year; 
new or expanding plants not more than six months). Certificates are 
conditioned upon there being an inadequate supply of qualified, 
experienced workers and the applicant making reasonable efforts to 
recruit experienced workers. The use of learners must not create unfair 
competitive labor cost advantages nor depress wages or working 
standards for experienced workers in comparable work. Employers submit 
separate applications for each establishment and must demonstrate that 
efforts to hire experienced workers have been ineffective.
    Under Part 520, student-learners are pupils at least sixteen years 
old (eighteen if employed in certain hazardous occupations) who are 
enrolled in an accredited school, college or university and who are 
employed part-time under a bona fide vocational training program 
approved by a State board of vocational education. Certified student-
learners must be paid at least 75 percent of the applicable minimum 
wage, with limits on the number of hours of employment training each 
week at subminimum wages. Employment of a student-learner must not have 
the effect of displacing an employee of the establishment, nor depress 
wages or working standards for experienced workers in comparable work, 
nor impair the development or continuation of apprenticeship standards 
in the occupation or industries. Separate applications must be 
submitted for each student-learner, describing the vocational training 
program in detail and demonstrating how it relates to the jobs to be 
performed by the student-learner.
    Under Part 527, student-workers are pupils enrolled in an 
educational institution who are at least 16 years old (18 if employed 
in certain hazardous occupations) and who are employed on a part-time 
basis in shops owned by the educational institution for the purpose of 
enabling the students to defray part of their school expenses. Student-
workers employed under a special certificate must be paid no less than 
75 percent of the applicable minimum wage. Certificates specify the 
number of students authorized on any day, the rates permitted during 
the training period, and length of the training period for each 
occupation (not to exceed one school year). Certificates are submitted 
by each educational institution seeking to employ student-workers.
    Under Part 521, apprentices at least sixteen years old (eighteen if 
employed in certain hazardous occupations) may be employed at less than 
the applicable minimum wage in skilled trades under registered 
apprenticeship programs. Apprentices must receive a progressively 
increasing schedule of wages which average at least 50 percent of the 
journeyman level rate over the period of apprenticeship (one year or 
more [2,000 or more hours] of work experience). The Department of 
Labor's Bureau of Apprenticeship and Training (BAT) establishes 
criteria and registration procedures for both individual apprentices 
and employer apprenticeship plans.
    Under Part 523, messengers employed primarily to deliver letters 
and messages may be paid subminimum wages to prevent curtailment of 
employment opportunities. Applications may be filed by an employer or 
an employee or group of employers or employees.
    The use of these certificates was prevalent when the wages paid in 
many industries were equal to or very near the minimum wage. As the 
prevailing wage rates increased to levels well above the statutory 
minimum wage, fewer employees were willing to work at subminimum wage 
rates. Over the last twenty-five years, very few employers have applied 
for special certificates, except in the student-learner program.
    The learner program, which includes learners, student-learners, and 
student-workers, historically was one of the largest subminimum wage 
programs. As wage rates rose in many industries employing learners and 
an adequate supply of experienced workers was available, the use of 
learner certificates declined. At its peak in 1962, over 2,200 
certificates covering more than 46,000 learners were issued. The use of 
student-learner certificates rose to over 17,000 in 1975, but has 
fallen in recent years. Currently less than 800 student-learner 
certificates are issued each year. Because of the narrow focus of the 
student-worker program, the most certificates ever issued was 33 
(covering 1,320 workers) in 1961.
    About 900 apprentice certificates were issued in 1967, mostly in 
the Caribbean area (838). Regulations issued by the BAT no longer 
permit the payment of subminimum wages to apprentices. The Wage and 
Hour Division, therefore, has not issued any special certificates for 
apprentices since 1987.
    On March 29, 1976, the Secretary of Labor presented a report to 
Congress in response to the directive of section 4(d)(2) of FLSA to 
conduct studies on the justification or lack thereof of each special 
exemption issued under section 14 of the Act. The Secretary reported 
that section 14(d), added by the 1974 FLSA Amendments, which made 
provision for a minimum wage and overtime exemption without requiring a 
special certificate for elementary or secondary school students 
employed by their schools, may have the impact of eliminating the need 
for the student-worker program. The Secretary recommended, however, 
that section 14(a) continue to make provisions for special employment 
of student-workers until the impact of section 14(d) could be 
evaluated.
    No regulations regarding the provisions of section 14(d) were

[[Page 7097]]

promulgated. In the absence of regulations, the Department decided to 
take no action with respect to public or private elementary or 
secondary school students employed by their schools in various school-
related work programs if their employment complied with the FLSA child 
labor provisions. Since enactment of section 14(d), no student-worker 
certificates have been issued.
    In his report of March 29, 1976, the Secretary of Labor also 
recommended that the provisions authorizing subminimum wages for 
messengers be deleted from the FLSA. He also determined that the 
special provisions for learners could no longer be justified and should 
be limited to student-workers and student-learners. The report also 
recommended that the provisions for apprentices be retained until the 
impact of proposed BAT regulations could be evaluated. No action was 
taken on these recommendations and the section 14 requirements remain 
in the FLSA; thus there is a continuing need for these rules.

III. Summary and Discussion

    This rule proposes to remove the regulation at 29 CFR Part 527, 
Employment of Student-Workers, and reserve the part. Section 14(d) of 
the FLSA makes provision for a minimum wage and overtime exemption for 
elementary or secondary school students employed by their schools where 
such employment is an integral part of the regular education program. 
In the absence of regulations regarding section 14(d), the Department 
has taken no action with respect to public or private elementary or 
secondary school students employed by their school in various school-
related work programs if employed in compliance with the FLSA child 
labor provisions. Since section 14(d) of the FLSA was enacted in 1974, 
no applications for student-worker certificates have been submitted by 
any type of school, elementary, secondary or any other. The existing 
rule is unnecessary.
    This rule proposes to merge the regulations at 29 CFR Parts 520, 
521, 522, and 523 into one new Part 520 and to reserve the remaining 
sections. This proposal eliminates repetition of text contained in each 
separate regulation. Those sections overtaken by requirements of the 
Administrative Procedure Act were also deleted. The essential 
requirements contained in the current regulations are maintained in 
this revision. The language and context of these regulations have been 
simplified, shortened, and formatted to make them easier to understand.
    As discussed above, the use of special certificates to employ 
messengers, learners, and apprentices at subminimum wages has declined 
considerably. It is appropriate to replace extended pages of obsolete 
regulations by consolidating these rules. This proposal, where 
possible, supplants the current language containing specific 
requirements with more general criteria common to all of the programs. 
Since long-standing regulatory requirements are being removed, a 
comment period is being provided. The Department does not expect to 
increase the number of certificates issued under these proposals 
because the economic conditions stated above are unchanged.
    The specific criteria currently contained in 29 CFR Parts 520, 521, 
522, and 523 will be replaced by the requirements of 29 CFR Part 520, 
subparts D and E. Applicants will be required to demonstrate that the 
criteria for issuance of special certificates have been met. Those 
situations where special certificates will not be issued have been 
clarified.
    The proposed rule eliminates the previous industry specific 
learning periods for learners and replaces them with a standardized 
period of 240 hours absent extraordinary circumstances relating to a 
particular occupation warranting a longer learning period. It also 
removes the different learner program standards for new plants and 
established plants. The Department welcomes comments from the public 
regarding the establishment of a standardized learning period and 
whether 240 hours is an appropriate length.
    The requirement to publish in the Federal Register a list of 
learner certificates issued has been removed as they are so few in 
number in recent years and no purpose is served by the publication of 
such a list. Interested parties may contact the agency for this 
information. This proposal removes any requirement that a hearing be 
held when an interested party objects to a certificate being issued or 
denied and replaces it with an informal reconsideration procedure that 
is more responsive to such parties. The period for requesting 
reconsideration and review has been extended to 60 days to accommodate 
those programs that previously required publishing a list of 
certificates issued in the Federal Register. The proposed rule also 
removes a section which allowed nonregistered apprenticeship agreements 
to be submitted for consideration when applying for a special 
certificate. Only properly registered apprenticeship agreements will be 
accepted in the future.
    The proposed rule permanently fixes, as the basis for establishing 
the special minimum wages that may be paid to messengers and learners 
(including student-learners) under section 14(a), the minimum wage 
applicable under section 6(a). This precludes combining the use of the 
youth opportunity wage established under section 6(g) with the special 
minimum wages authorized by section 14(a). It has been determined that 
the minimum wage applicable under section 6(a), which is greater than 
the youth opportunity wage, is both a necessary and a sufficient basis 
to establish special minimum wages which prevent the curtailment of 
employment opportunities as required by section 14(a).
    The proposed rule also permanently sets the subminimum wage rate 
that may be paid messengers and learners at 95 percent of the minimum 
wage required by section 6(a) of the FLSA. This reflects the historical 
difference between the minimum wage and the authorized subminimum wage 
rate for learners, but it has always been stated in these sections as a 
dollar amount (i.e. $4.10 per hour, $3.65 per hour). By setting the 
authorized subminimum wage at a fixed percentage of the applicable 
minimum wage, we will no longer have to amend these sections each time 
the minimum wage is changed. All certificates issued under this rule 
will list the authorized subminimum wage rate.
    The proposal incorporates the Division's long-standing policy of 
limiting the availability of special certificates for messengers to 
those firms whose principal business is the delivery of such letters 
and messages.
    The changes discussed above will have no significant effect on the 
current operation of these programs.

Executive Order 12866 and Significant Regulatory Actions

    This rule is not a ``significant regulatory action'' within the 
meaning of Executive Order 12866. The consolidation of the current 
regulations at 29 CFR Parts 520, 521, 522, and 523, and the removal of 
Part 527 does not affect the current operation of any program and this 
action will not: (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

[[Page 7098]]

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.

Executive Order 12875 and Section 202 of the Unfunded Mandates Reform 
Act of 1995

    For purposes of the Unfunded Mandates Reform Act of 1995, as well 
as Executive Order 12875, this rule does not include any federal 
mandate that may result in increased expenditures by either state, 
local and tribal governments in the aggregate, or by the private 
sector.

Regulatory Flexibility Analysis

    This rule will not have a significant economic impact on a 
substantial number of small entities. The obligations and 
responsibilities established under the existing regulations will remain 
essentially the same under the proposed rule. The Department has 
certified to this effect to the Chief Counsel for Advocacy of the U.S. 
Small Business Administration. Therefore, no Regulatory Flexibility 
Analysis is 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

29 CFR Part 520

    Minimum wages, Reporting and recordkeeping requirements, Students, 
Wage and Hour Division.

29 CFR Part 521

    Manpower training programs, Minimum wages, Reporting and 
recordkeeping requirements, Wage and Hour Division.

29 CFR Part 522

    Cigar and cigarettes, Clothing, Electronic products, Manpower 
training programs, Minimum wages, Reporting and recordkeeping 
requirements, Wage and Hour Division.

29 CFR Part 523

    Minimum wages, Wage and Hour Division.

29 CFR Part 527

    Minimum wages, Reporting and recordkeeping requirements, Students, 
Wage and Hour Division.

    For the reasons set forth above, 29 CFR Part 520, 29 CFR Part 521, 
29 CFR Part 522, 29 CFR Part 523, and 29 CFR Part 527 are proposed to 
be amended as set forth below.

    Signed at Washington, D.C. on the 6th day of February, 1997.
Maria Echaveste,
Administrator, Wage and Hour Division.

PART 521--[REMOVED AND RESERVED]

    1.-2. Under the authority of Sec. 14, 52 Stat. 1068, as amended, 29 
U.S.C. 214, unless otherwise noted, Title 29, Code of Federal 
Regulations is proposed to be amended by removing part 521.

PART 522--[REMOVED AND RESERVED]

    3. Under the authority of Sec. 14, 52 Stat. 1062, 1064 (29 U.S.C. 
214); secs. 2-12, 60 Stat. 237-244 (5 U.S.C. 1001-1011), 29 U.S.C. 214, 
Title 29, Code of Federal Regulations is proposed to be amended by 
removing part 522.

PART 523--[REMOVED AND RESERVED]

    4. Under the authority of Sec. 14, 52 Stat. 1068, as amended, 29 
U.S.C. 214, Title 29, Code of Federal Regulations is proposed to be 
amended by removing part 523.

PART 527--[REMOVED AND RESERVED]

    5. Under the authority of Sec. 14, 52 Stat. 1068, as amended, 29 
U.S.C. 214, Title 29, Code of Federal Regulations is proposed to be 
amended by removing part 527.

PART 520--[REVISED]

    6. Under the authority of Sec. 14, 52 Stat. 1068, as amended, 29 
U.S.C. 214, Title 29, Code of Federal Regulations is proposed to be 
amended by revising part 520 to read as follows:

PART 520--EMPLOYMENT UNDER SPECIAL CERTIFICATE OF MESSENGERS, 
LEARNERS (INCLUDING STUDENT-LEARNERS), AND APPRENTICES

Subpart A--[Reserved]

Subpart B--What Are The General Provisions Governing the Employment of 
Messengers, Learners (Including Student-Learners), and Apprentices at 
Subminimum Wages?

Sec.
520.200  What is the legal authority for payment of wages lower than 
the minimum wage required by section 6(a) of the Fair Labor 
Standards Act?
520.201  How are those classifications of workers which may be paid 
subminimum wages under section 14(a) of the Fair Labor Standards Act 
defined?
520.202  How do persons who want to apply for a particular 
certificate find out what is needed?
520.203  What records does an employer have to keep when subminimum 
wage certificates are granted? How long do they have to be kept?
520.204  If someone does not agree with the Department of Labor's 
decision on a certificate, can the decision be appealed?
520.205  How do these rules affect other Federal, state and local 
laws and collective bargaining agreements?

Subpart C--Definitions

Subpart D--Messengers, Learners (Excluding Student-Learners), and 
Apprentices

520.400  Who are messengers, learners, and apprentices?
520.401  Are there any industries, occupations, etc. that do not 
qualify for a certificate to employ messengers, learners, or 
apprentices at subminimum wages?
520.402  How do I obtain authority to employ messengers, learners, 
or apprentices at subminimum wages?
520.403  What information is required when applying for authority to 
pay less than the minimum wage?
520.404  What must I demonstrate in my application for a messenger, 
learner, or apprentice certificate to receive a favorable review?
520.405  Must I notify my employees that I am applying for a 
certificate to employ messengers and/or learners at subminimum 
wages?
520.406  What happens once I have submitted my request for 
authorization to pay messengers, learners, or apprentices subminimum 
wages?
520.407  What is the subminimum wage for messengers and what must I 
do to comply with the terms of my certificate?
520.408  What is the subminimum wage for learners and what must I do 
to comply with the terms of my certificate?
520.409  When will authority to pay apprentices special minimum 
wages become effective and what is the special minimum wage rate?

[[Page 7099]]

520.410  How long does a messenger, learner, or apprentice 
certificate remain in effect?
520.411  Does a certificate authorizing payment of subminimum wages 
to messengers and/or learners remain in effect during the renewal 
process?
520.412  What records, in addition to those required by part 516 of 
this chapter and Sec. 520.203 of this part, must I keep relating to 
the employment of messengers, learners, or apprentices under special 
certificate?

Subpart E--Student-Learners

520.500  Who is a student-learner?
520.501  How do I obtain authority to employ student-learners at 
subminimum wages?
520.502  What information must an application to employ student-
learners at subminimum wages contain?
520.503  What must I demonstrate in my application for a student-
learner certificate to receive a favorable review?
520.504  When will authority to pay student-learners subminimum 
wages become effective?
520.505  How will I be notified that my request to employ student-
learners at subminimum wages has been denied and can I appeal the 
denial?
520.506  What is the subminimum wage for student-learners and what 
must I do to comply with the terms of my student-learner 
certificate?
520.507  How long does my certificate remain in effect?
520.508  What records, in addition to those required by part 516 of 
this chapter and Sec. 520.203 of this part, must I keep when 
student-learners are employed?

    Authority: Sec. 14, 52 Stat. 1062, 1064 (29 U.S.C. 214); secs. 
2-12, 60 Stat. 237-244; (5 U.S.C. 1001-1011); 52 Stat. 1068, as 
amended, 29 U.S.C. 214.

PART 520--EMPLOYMENT UNDER SPECIAL CERTIFICATE OF MESSENGERS, 
LEARNERS (INCLUDING STUDENT-LEARNERS), AND APPRENTICES

Subpart A--[Reserved]

Subpart B--What Are the General Provisions Governing the Employment 
of Messengers, Learners (Including Student-Learners), and 
Apprentices at Subminimum Wages?


Sec. 520.200  What is the legal authority for payment of wages lower 
than the minimum wage required by section 6(a) of the Fair Labor 
Standards Act?

    Section 14(a) of the Fair Labor Standards Act provides, in order to 
prevent curtailment of employment opportunities, for the payment of 
special minimum wage rates to workers employed as messengers, learners 
(including student-learners), and apprentices under special 
certificates issued by the Department of Labor.


Sec. 520.201  How are those classifications of workers which may be 
paid subminimum wages under section 14(a) of the Fair Labor Standards 
Act defined?

    (a) A messenger is a worker who is primarily engaged in delivering 
letters and messages for a firm whose principal business is the 
delivery of such letters and messages.
    (b) A learner is a worker who is being trained for an occupation, 
which is not customarily recognized as an apprenticeable trade, for 
which skill, dexterity and judgment must be learned and who, when 
initially employed, produces little or nothing of value. Except in 
extraordinary circumstances, an employee cannot be considered a 
``learner'' once he/she has acquired a total of 240 hours of job-
related and/or vocational training with the same or other employer(s) 
or training facility(ies) during the past three years. An individual 
qualifying as a ``learner'' may only be trained in two qualifying 
occupations.
    (c) A student-learner is a student who is at least sixteen years of 
age, or at least eighteen years of age if employed in an occupation 
which the Secretary has declared to be particularly hazardous, who is 
receiving instruction in an accredited school, college or university 
and who is employed on a part-time basis, pursuant to a ``bona fide 
vocational training program'' as defined in subpart C of this part.
    (d) An apprentice is a worker, at least sixteen years of age unless 
a higher minimum age standard is otherwise fixed by law, who is 
employed to learn a skilled trade through a registered apprenticeship 
program. Training is provided through structured on-the-job training 
combined with supplemental related theoretical and technical 
instruction. This term excludes pre-apprentices, trainees, learners, 
and student-learners. The terms learner and student-learner are defined 
in subpart C of this part. Standards governing the registration of 
apprenticeship programs are established and administered by the U. S. 
Department of Labor, Employment and Training Administration, Bureau of 
Apprenticeship and Training (BAT) and are found in part 29 of this 
title.
    (e) Additional terms used in this part are defined in subpart C.


Sec. 520.202  How do persons who want to apply for a particular 
certificate find out what is needed?

    The application process, terms, conditions and requirements of 
certificates and other matters are discussed in subparts D and E of 
this part. Messengers, learners (excluding student-learners), and 
apprentices are discussed in subpart D and student-learners in subpart 
E.


Sec. 520.203  What records does an employer have to keep when 
subminimum wage certificates are granted? How long do they have to be 
kept?

    (a) In addition to other records required under the record-keeping 
regulations (part 516 of this chapter), the employer is required to 
keep records specific to certification under section 14(a) of the Fair 
Labor Standards Act. All workers employed under a subminimum wage 
certificate shall be designated as such on the employer's payroll 
records. Further recordkeeping requirements are described in each 
applicable subpart of this part (see Secs. 520.412 and 520.508).
    (b) Employers must maintain and preserve all required records for 
at least three years from the last date of employment under a 
subminimum wage program. The employer's copy of the application and the 
certificate shall also be maintained for three years. Such records 
shall be kept secure and accessible at the place of employment or where 
payroll records are customarily maintained. All records must be 
available for inspection and copying by the Administrator.


Sec. 520.204  If someone does not agree with the Department of Labor's 
decision on a certificate, can the decision be appealed?

    (a) Any person, applicant, trade union, association, etc. who does 
not agree with action granting or denying a certificate (pursuant to 
Secs. 520.406 and 520.505) may, within 60 days of that action or such 
additional time as the Administrator may allow, file with the 
Administrator a petition for review. The decision of the Administrator 
becomes final unless such a written request is timely filed.
    (b) Such requests should contain a statement of the additional 
evidence which the person believes may materially affect the decision 
and establish that there were reasonable grounds for failure to present 
such evidence during the original certification process.
    (c) If a request for reconsideration or review is granted, the 
Administrator, to the extent it is deemed appropriate, may afford other 
interested persons an opportunity to present data and views.
    (d) The Administrator may conduct an investigation, which may 
include a hearing, prior to taking any action pursuant to this part.

[[Page 7100]]

Sec. 520.205  How do these rules affect other Federal, state and local 
laws and collective bargaining agreements?

    No provision of this part, or of any special minimum wage 
certificate issued thereunder, shall excuse noncompliance with any 
other Federal or state law or municipal ordinance or collective 
bargaining agreement establishing higher standards.

Subpart C--Definitions

    Administrator means the Administrator of the Wage and Hour 
Division, Employment Standards Administration, United States Department 
of Labor, or his/her authorized representative.
    Apparel industry means the manufacturing of the following products 
as referred to in subpart D of this part:
    (1) Rainwear means the manufacture of waterproofed garments and 
raincoats from oiled cloth or other materials, whether vulcanized, 
rubberized, cravenetted, or otherwise processed.
    (2) Leather and sheep-lined clothing means the manufacture of 
leather, leather-trimmed and sheeplined garments for men, women or 
children.
    (3) Women's apparel division of the apparel industry for the 
manufacture of women's, misses', and juniors' dresses means the 
production of women's, misses' and juniors' dresses; washable service 
garments; blouses from woven or purchased knit fabric; women's, 
misses', children's and infants' underwear, nightwear and negligees 
from woven fabrics; corsets and other body supporting garments from any 
material; infants' and children's outerwear; and other garments similar 
to them.
    (4) Robes, means the manufacture of robes from any woven material 
or from purchased knitted materials, including, without limitation, 
men's women's and children's bath, lounging and beach robes and 
dressing gowns.
    Apprentice means a worker, at least sixteen years of age unless a 
higher minimum age standard is otherwise fixed by law, who is employed 
to learn a skilled trade through a registered apprenticeship program. 
Training is provided through structured on-the-job training combined 
with supplemental related theoretical and technical instruction. This 
term excludes pre-apprentices, trainees, learners, and student-
learners. The terms learner and student-learner are defined in this 
subpart.
    Apprenticeship agreement means a written agreement between an 
apprentice and either his/her employer, or an apprenticeship committee 
acting as agent for employer(s), which agreement contains the terms and 
conditions of the employment and training of the apprentice.
    Apprenticeship committee means those persons designated by the 
sponsor to act for it in the administration of the program. A committee 
may be ``joint'', i.e., it is composed of an equal number of 
representatives of the employer(s) and of the employees represented by 
a bona fide collective bargaining agent(s) and has been established to 
conduct, operate, or administer an apprenticeship program and enter 
into apprenticeship agreements with apprentices. A committee may be 
``unilateral'' or ``non-joint'' and shall mean a program sponsor in 
which a bona fide collective bargaining agent is not a participant.
    Apprenticeship program means a plan containing all terms and 
conditions for the qualification, recruitment, selection, employment 
and training of apprentices, including such matters as the requirements 
for a written apprenticeship agreement.
    BAT means the Bureau of Apprenticeship and Training, Employment and 
Training Administration, United States Department of Labor.
    Bona fide vocational training program means a program authorized 
and approved by a state board of vocational education or other 
recognized educational body that provides for part-time employment 
training which may be scheduled for a part of the work day or workweek, 
for alternating weeks or for other limited periods during the year, 
supplemented by and integrated with a definitely organized plan of 
instruction designed to teach technical knowledge and related 
industrial information given as a regular part of the student-learner's 
course by an accredited school, college, or university.
    Department means the United States Department of Labor.
    Experienced worker means a worker whose total experience in an 
authorized learner occupation in the industry, including vocational 
training, within the past three years is equal to 240 hours or such 
other period as authorized by a learner certificate issued pursuant to 
the regulations in this part.
    Experienced worker available for employment means an experienced 
worker residing within the area from which the plant/business 
customarily draws its labor supply or within a reasonable commuting 
distance of such area, and who is willing and able to accept employment 
in the plant/business; or an experienced worker residing outside of the 
area from which the plant/business customarily draws its labor supply, 
who has in fact made himself or herself available for employment at the 
plant/business.
    FLSA means the Fair Labor Standards Act of 1938 as amended (29 
U.S.C 201 et seq.).
    Learner means a worker who is being trained for an occupation, 
which is not customarily recognized as an apprenticeable trade, for 
which skill, dexterity and judgment must be learned and who, when 
initially employed produces little or nothing of value. Except in 
extraordinary circumstances, an employee cannot be considered a 
``learner'' once he/she has acquired a total of 240 hours of job-
related and/or vocational training with the same or other employer(s) 
or training facility(ies) during the past three years. An individual 
qualifying as a ``learner'' may only be trained in two qualifying 
occupations.
    Learning period means a period of time measured in work hours and 
vocational training hours that is normally required to fully train an 
inexperienced worker in a particular occupation within an industry 
where the learner is employed. The learning period will not exceed 240 
hours for any qualifying occupation except in extraordinary 
circumstances where the employer demonstrates that the occupation to be 
learned requires an extended period of specialized training.
    Men's and boys' clothing industry means the industry which 
manufactures men's, youths', and boys' suits, coats, and overcoats.
    Messenger means a worker who is primarily engaged in delivering 
letters and messages for a firm whose principal business is the 
delivery of such letters and messages.
    Minimum wage means the wage rate required by section 6 of FLSA. For 
purposes of this part, subminimum wage rates are based exclusively on 
the applicable minimum wage provided by section 6(a).
    Recognized apprenticeship agency means either a state 
apprenticeship agency recognized by the BAT, or if no such 
apprenticeship agency exists in the state, the BAT.
    Registered apprenticeship program or agreement means a program or 
agreement which has been approved by a recognized apprenticeship agency 
as meeting the basic standards of apprenticeship adopted and published 
by BAT.
    Secretary or Secretary of Labor means the Secretary of Labor, 
United States Department of Labor or his/her authorized representative.
    Shoe manufacturing industry means the manufacture or partial 
manufacture of footwear from any material and by

[[Page 7101]]

any process except knitting, vulcanizing of the entire article or 
vulcanizing (as distinct from cementing) of the sole to the upper, 
including the manufacturing of the following: athletic shoes; boots; 
boot tops; burial shoes; custom-made boots or shoes; moccasins; 
puttees, except spiral puttees; sandals; shoes completely rebuilt in a 
shoe factory; slippers. This term also includes the manufacture from 
leather or from any shoe-upper material of all cut stock and findings 
for footwear, including bows, ornaments, and trimmings. It also 
includes the manufacture of cutsoles; midsoles; insoles; taps; lifts; 
rands; toplifts; bases; shanks; boxtoes; counters; stays; stripping; 
sock linings; and heel pads. Shoe manufacturing also includes the 
manufacture of heels from any material except molded rubber, but not 
including the manufacture of woodheel blocks; the manufacture of cut 
upper parts for footwear, including linings, vamps and quarters; and 
the manufacture of pasted shoe stock; as well as the manufacture of 
boot and shoe patterns. However, the manufacture of cut stock and 
findings is included within this definition only when performed by 
companies engaged in the production of shoes who incorporate most of 
the cut stock and findings in the manufacture of their product(s).
    Skilled trade means an apprenticeable occupation which possesses 
all of the following characteristics:
    (1) It is customarily learned in a practical way through a 
structured, systematic program of on-the-job supervised training.
    (2) It is clearly identified and commonly recognized throughout an 
industry.
    (3) It involves manual, mechanical or technical skills and 
knowledge which require a minimum of 2,000 hours of on-the-job work 
experience.
    (4) It requires related instruction to supplement the on-the-job 
training.
    (5) It is not merely a part of an apprenticeable occupation and 
does not fall into any of the following categories: marketing; sales 
administration; administrative support; executive and managerial; 
professional and semi-professional occupations (this category covers 
occupations for which entrance requirements customarily include 
education of college level).
    Standards of apprenticeship means the apprenticeship program is an 
organized, written plan embodying the terms and conditions of 
employment, training, and supervision of one or more apprentices in the 
apprenticeable occupation, which meets the requirements established by 
BAT, and is subscribed to by a sponsor who has undertaken to carry out 
the apprentice training program.
    State means any state of the United States or the District of 
Columbia or any territory or possession of the United States.
    Student-learner means a student who is at least sixteen years of 
age, or at least eighteen years of age if employed in an occupation 
which the Secretary has declared to be particularly hazardous, who is 
receiving instruction in an accredited school, college or university 
and who is employed by an establishment on a part-time basis, pursuant 
to a bona fide vocational training program.
    Subminimum wage means the rates which may be paid under temporary 
authorization or under certificate as provided by section 14(a) of FLSA 
and this part.
    Vocational Training Program. See ``Bona fide vocational training 
program''.
    Wage and Hour Division means the Wage and Hour Division, Employment 
Standards Administration, United States Department of Labor.

Subpart D--Messengers, Learners (Excluding Student-Learners), and 
Apprentices


Sec. 520.400  Who are messengers, learners, and apprentices?

    The terms messenger, learner, and apprentice are defined in subpart 
C of this part.


Sec. 520.401  Are there any industries, occupations, etc. that do not 
qualify for a certificate to employ messengers, learners, or 
apprentices at subminimum wages?

    (a) Certificates to employ messengers at subminimum wages are 
available to only those establishments engaged in the business of 
providing messenger service, i.e., the delivery of letters and 
messages. Requests for such certificates are uniformly denied to 
applicants whose principal business purpose is not the delivery of 
messages and letters.
    (b) All applications for special certificates authorizing the 
employment of learners at subminimum wage rates in the manufacture of 
products in the following industries shall be denied (definitions for 
all listed activities can be found in subpart C of this part):
    (1) In the apparel industry:
    (i) Rainwear;
    (ii) Leather and sheep-lined clothing;
    (iii) Women's apparel division of the apparel industry for the 
manufacture of women's, misses', and juniors' dresses;
    (iv) Robes;
    (2) Shoe manufacturing industry; and
    (3) Men's and boys' clothing industry.
    (c) No certificates will be granted authorizing the employment of 
learners at subminimum wage rates as homeworkers; in maintenance 
occupations such as guard, porter, or custodian; in office and clerical 
occupations in any industry; or in operations of a temporary or 
sporadic nature.
    (d) Authorization to employ apprentices at subminimum wages will 
only be granted if permitted by the BAT regulations (29 CFR part 29).


Sec. 520.402  How do I obtain authority to employ messengers, learners, 
or apprentices at subminimum wages?

    (a) Employers wishing to employ messengers, learners, or 
apprentices as defined in subpart C of this part at subminimum wages 
must apply for authority to do so from the Administrator at the Wage 
and Hour Division's Regional Office having administrative jurisdiction 
over the geographic area in which the employment is to take place. To 
obtain the address of the Regional Office which services your 
geographic area, please contact your local Wage and Hour Office (under 
``Department of Labor'' in the blue pages of your local telephone 
book).
    (b) In the case of messengers, such application may be filed by an 
employer or group of employers. Preferential consideration will be 
given to applications filed by groups or organizations which are deemed 
to be representative of the interests of a whole industry or branch 
thereof.


Sec. 520.403  What information is required when applying for authority 
to pay less than the minimum wage?

    (a) A separate application must be made for each plant or 
establishment requesting authorization for employment of messengers 
and/or learners at subminimum wages, on the official form furnished by 
the Wage and Hour Division, containing all information required by the 
form including:
    (1) Information concerning efforts made by the applicant to obtain 
experienced workers in occupation(s) for which learners are requested;
    (2) The occupations/industry in which the messenger(s) and/or 
learner(s) are to be employed;
    (3) A statement explaining why employment of messenger(s) and/or 
learner(s) at subminimum wages is needed to prevent curtailment of 
employment opportunities;
    (4) The number of messengers and/or learners the applicant 
anticipates employing at subminimum wages under special certificate;

[[Page 7102]]

    (5) If requesting authorization for the employment of learners at 
subminimum wages for a learning period greater than 240 hours, 
information pertinent to the extraordinary circumstances necessitating 
such a request. While each such request will be considered on its own 
merit, it is anticipated that such authorizations would be limited to 
occupations requiring an extended period of specialized training;
    (6) The number of messengers and/or learners hired at subminimum 
wages during the twelve-month period prior to making application;
    (7) Total number of nonsupervisory workers in the particular plant 
or establishment for which a certificate is requested;
    (8) The number of experienced workers in the learner occupations 
and their straight-time average hourly earnings during the last payroll 
period and the corresponding payroll period in the prior year; and
    (9) The type of equipment to be used by learners.
    (b) For apprentices, the employer or apprenticeship committee must 
submit a copy of the registered apprenticeship program.
    (c) Any applicant may also submit such additional information as 
may be pertinent. Applications which fail to provide the information 
required by the form may be returned to the applicant with a notation 
of deficiencies and without prejudice against submission of a new or 
revised application.


Sec. 520.404  What must I demonstrate in my application for a 
messenger, learner, or apprentice certificate to receive a favorable 
review?

    (a) The application must demonstrate that a certificate is 
necessary in order to prevent the curtailment of opportunities for 
employment.
    (b) The issuance of a messenger and/or learner certificate must not 
tend to create unfair competitive labor cost advantages nor have the 
effect of impairing or depressing wage rates or working standards of 
experienced workers performing work of a like or comparable character 
in the industry.
    (c) Abnormal labor conditions such as a strike, lock-out, or other 
similar condition, must not exist at the plant or establishment for 
which a messenger and/or learner certificate is requested.
    (d) It must be shown that an adequate supply of qualified 
experienced workers is not available for employment in those 
occupations for which authorization to pay subminimum wages to learners 
has been requested; that the experienced workers presently employed in 
the plant or establishment in occupations in which learners are 
requested are afforded an opportunity, to the fullest extent possible, 
for full-time employment upon completion of the learning period; and 
that learners are available for employment.
    (e) Reasonable efforts must have been made to recruit workers paid 
at least the minimum wage in those occupations in which certificates to 
employ learners at subminimum wages have been requested. This includes 
the placement of an order with the local State or Territorial Public 
Employment Service Office (except in possessions where there is no such 
office) not more than fifteen days prior to the date of application. 
Written evidence from such office that the order has been placed shall 
be submitted by the employer with the application.
    (f) The occupation or occupations in which learners are to receive 
training must involve a sufficient degree of skill to necessitate an 
appreciable learning period.
    (g) An apprenticeship program must conform with or substantially 
conform with the standards of apprenticeship as defined in subpart C of 
this part.
    (h) There must be no serious outstanding violations involving the 
employee(s) for whom a certificate is being requested nor any serious 
outstanding violations of a certificate previously issued, nor any 
serious violations of the FLSA which provide reasonable grounds to 
conclude that the terms of a certificate may not be complied with, if 
issued.


Sec. 520.405  Must I notify my employees that I am applying for a 
certificate to employ messengers and/or learners at subminimum wages?

    Upon making application for a messenger and/or learner certificate 
or for renewal thereof, an employer shall post a copy of the first page 
of the completed application form in a conspicuous place in each 
department of the plant or establishment where he/she proposes to 
employ messengers and/or learners at subminimum wage rates. Such notice 
shall remain posted until the application is acted upon by the 
Administrator.


Sec. 520.406  What happens once I have submitted my request for 
authorization to pay messengers, learners, or apprentices subminimum 
wages?

    (a) All applications submitted for authorization to pay wages lower 
than those required by section 6(a) of the FLSA will be considered and 
acted upon (issued or denied) subject to the conditions specified in 
Secs. 520.403 and 520.404.
    (b) If, in the case of messengers and/or learners, available 
information indicates that the requirements of this part are satisfied, 
the Administrator shall issue a special certificate which will be 
mailed to to the employer. If a special certificate is denied, the 
employer shall be given written notice of the denial. If a messenger 
and/or learner certificate is denied, notice of such denial shall be 
without prejudice to the filing of any subsequent application.
    (c) If, in the case of apprentices, the apprenticeship agreement 
and others available information indicate that the requirements of this 
part are satisfied, the Administrator shall issue a special 
certificate. The special certificate, if issued, shall be mailed to the 
employer or the apprenticeship committee and a copy shall be mailed to 
the apprentice. If a special certificate is denied, the employer or the 
apprenticeship committee, the apprentice and the recognized 
apprenticeship agency shall be given written notice of the denial. The 
employer shall pay the apprentice the minimum wage applicable under 
section 6(a) of the FLSA from the date of receipt of notice of such 
denial.


Sec. 520.407  What is the subminimum wage for messengers and what must 
I do to comply with the terms of my certificate?

    (a) A messenger certificate, if issued, shall specify:
    (1) The subminimum wage rate of not less than 95 percent of the 
applicable minimum wage required by section 6(a) of the FLSA; and
    (2) The effective and expiration dates of the certificate.
    (b) The employer shall post a copy of the messenger certificate 
during its effective period in a conspicuous place where it can be 
readily seen by employees.
    (c) No messenger shall be hired under a messenger certificate while 
abnormal labor conditions such as a strike, lock-out, or other similar 
condition, exist.


Sec. 520.408  What is the subminimum wage for learners and what must I 
do to comply with the terms of my certificate?

    (a) All learner certificates shall specify:
    (1) The subminimum wage rate of not less than 95 percent of the 
applicable minimum wage required by section 6(a) of the FLSA;
    (2) The number or proportion of learners authorized to be employed 
on any one day;
    (3) The occupations in which learners may be employed;
    (4) The authorized learning period of not more than 240 hours, 
except in

[[Page 7103]]

extraordinary situations as discussed in Sec. 520.403; and
    (5) The effective and expiration dates of the certificate.
    (b) Learners properly hired prior to the date on which a learner 
certificate expires may be continued in employment at subminimum wage 
rates for the duration of their authorized learning period under the 
terms of the certificate, even though the certificate may expire before 
the learning period is completed.
    (c) The employer shall post a copy of the learner certificate 
during its effective period and thereafter until all authorized 
learners have completed their learning period(s). The certificate shall 
be posted in a conspicuous place in each department of the plant where 
learners are to be employed.
    (d) No learners shall be hired under a learner certificate if, at 
the time the employment begins, experienced workers capable of equaling 
the performance of a worker of minimum acceptable skill are available 
for employment. Before hiring learners during the effective period of 
the certificate, the employer shall place an order for experienced 
workers with the local State or Territorial Public Employment Service 
Office (except in possessions where there is no such office) or have 
such an active order on file. Written evidence that an order has been 
placed or is on active file shall be maintained in the employer's 
records.
    (e) No learner shall be hired under a learner certificate while 
abnormal labor conditions such as a strike, lock-out, or other similar 
condition exist in the plant or establishment.
    (f) For each individual learner, the number of hours of previous 
employment and hours of vocational or similar facility(ies) training 
must be deducted from the authorized learning period if within the past 
three years the learner has been employed or received vocational 
training in a given occupation and industry.
    (g) If experienced workers are paid on a piece rate basis, learners 
shall be paid at least the same piece rates as experienced workers 
employed on similar work in the plant and shall receive earnings based 
on such piece rates whenever such earnings exceed the subminimum wage 
rates permitted in the certificate.


Sec. 520.409  When will authority to pay apprentices special minimum 
wages become effective and what is the special minimum wage rate?

    (a) An apprenticeship program which has been registered with a 
recognized apprenticeship agency shall constitute a temporary special 
certificate authorizing the employment of an apprentice at the wages 
and under the conditions specified in such program until a special 
certificate is issued or denied. This temporary authorization is, 
however, conditioned on the requirement that within 90 days from the 
beginning date of employment of the apprentice, the employer or the 
apprenticeship committee shall send one copy of each apprenticeship 
agreement, with evidence of registration, to the appropriate Regional 
Office of the Wage and Hour Division.
    (b) The wage rate specified by the apprenticeship program becomes 
the special minimum wage rate that must be paid unless the 
Administrator issues a certificate modifying the terms and conditions 
of employment of apprentices at special minimum wages.


Sec. 520.410  How long does a messenger, learner, or apprentice 
certificate remain in effect?

    (a) Messenger and/or learner certificates may be issued for a 
period of not longer than one year.
    (b) Each special apprentice certificate shall specify the 
conditions and limitations under which it is granted, including the 
periods of time during which subminimum wage rates may be paid pursuant 
to a registered apprenticeship program.
    (c) No certificate may be issued retroactively.
    (d) The Administrator may amend the provisions of a certificate 
when necessary to correct omissions or defects in the original 
certificate or reflect changes in this part.


Sec. 520.411  Does a certificate authorizing payment of subminimum 
wages to messengers and/or learners remain in effect during the renewal 
process?

    (a) Application for renewal of a messenger and/or learner 
certificate shall be made on the same form as described in this section 
and employees shall be advised of such renewal application in the same 
manner as explained in Sec. 520.405. No effective messenger and/or 
learner certificate shall expire until action on an application for 
renewal shall have been finally determined, provided that such 
application has been properly executed in accordance with the 
requirements, and filed with and received by the Administrator not less 
than fifteen nor more than thirty days prior to the expiration date. A 
final determination means either the granting of or initial denial of 
the application for renewal of a messenger and/or learner certificate, 
or withdrawal of the application. A ``properly executed application'' 
is one which contains the complete information required on the form, 
and the required certification by the applicant.
    (b) A renewal certificate will not be issued unless there is a 
clear showing that the conditions set forth in Sec. 520.404 still 
prevail.


Sec. 520.412  What records, in addition to those required by part 516 
of this chapter and Sec. 520.203 of this part, must I keep relating to 
the employment of messengers, learners, or apprentices under special 
certificate?

    (a) Each worker employed as a messenger, learner, or apprentice 
under a certificate shall be designated as such on the employer's 
payroll records. All such messengers, learners, or apprentices shall be 
listed together as a separate group on the payroll records, with each 
messenger's, learner's, or apprentice's occupation being shown.
    (b) At the time learners are hired, the employer shall also obtain 
and keep in his/her records a statement signed by each employee showing 
all applicable experience which the learner had in the employer's 
industry, including vocational training, during the preceding three 
years. The statement shall contain the dates of such previous 
employment, names and addresses of employers, the occupation or 
occupations in which the learner was engaged and the types of products 
upon which the learner worked. The statement shall also contain 
information concerning pertinent training in vocational training 
schools or similar training facilities, including the dates of such 
training and the identity of the vocational school or training 
facility. If the learner has had no applicable experience or pertinent 
training, a statement to that effect signed by the learner shall 
likewise be kept in the employer's records.
    (c) The employer shall maintain a file of all evidence and records, 
including any correspondence, pertaining to the filing or cancellation 
of job orders placed with the local State or Territorial Public 
Employment Service Office pertaining to job orders for occupations to 
be performed by learners.
    (d) Every employer who employs apprentices under temporary or 
special certificates shall preserve for three years from the last 
effective date of the certificate copies of the apprenticeship program, 
apprenticeship agreement and special certificate under which such an 
apprentice is employed.
    (e) Every apprenticeship committee which holds a certificate under 
this part shall keep the following records for each apprentice under 
its control and supervision:

[[Page 7104]]

    (1) The apprenticeship program, apprenticeship agreement and 
special certificate under which the apprentice is employed by an 
employer;
    (2) The cumulative amount of work experience gained by the 
apprentice, in order to establish the proper wage at the time of his/
her assignment to an employer; and
    (3) A list of the employers to whom the apprentice was assigned and 
the period of time he/she worked for each employer.
    (f) The records required in this section, including a copy of the 
application(s) submitted and any special certificate(s) issued, shall 
be kept and made available for inspection for at least three years from 
the expiration date of the certificate(s).

Subpart E--Student-Learners


Sec. 520.500  Who is a student-learner?

    The term student-learner is defined in subpart C.


Sec. 520.501  How do I obtain authority to employ student-learners at 
subminimum wages?

    (a) Employers wishing to employ student-learners at subminimum 
wages must apply for authority to do so from the Administrator at the 
Wage and Hour Division's Regional Office having administrative 
jurisdiction over the geographic area in which the employment is to 
take place. To obtain the address of the Regional Office which services 
your geographic area, please contact your local Wage and Hour Office 
(under ``Department of Labor'' in the blue pages of your local 
telephone book).
    (b) Application must be made on the official form furnished by the 
Wage and Hour Division and must be signed by the employer, the 
appropriate school official and the student-learner. A separate 
application must be filed by the employer for each student-learner the 
employer proposes to employ at subminimum wages.


Sec. 520.502  What information must an application to employ student-
learners at subminimum wages contain?

    Student-learner applications must contain:
    (a) A statement clearly outlining the vocational training program 
and showing, particularly, the processes in which the student-learner 
will be engaged when in training on the job;
    (b) A statement clearly outlining the school instruction directly 
related to the job;
    (c) The total number of workers employed in the establishment;
    (d) The number and hourly wage rates of experienced workers 
employed in the occupation in which the student-learner is to be 
trained;
    (e) The hourly wage rate or progressive wage schedule which the 
employer proposes to pay the student-learner;
    (f) The age of the student-learner;
    (g) The period of employment training at subminimum wages;
    (h) The number of hours of employment training a week and the 
number of hours of school instruction a week;
    (i) A certification by the appropriate school official that the 
student named on the application form will be receiving instruction in 
an accredited school, college, or university and will be employed 
pursuant to a bona fide vocational training program, as defined in 
subpart C of this part. The certification by the school official must 
satisfy the following conditions:
    (1) The application must be properly executed in conformance with 
Sec. 520.501;
    (2) The employment training must conform with the provisions of 
Sec. 520.503 (a), (c), (d), and (g) and paragraphs (a) and (c) of 
Sec. 520.506;
    (3) The occupation must not be one for which a student-learner 
application was previously submitted by the employer and a special 
certificate was denied by the Administrator.


Sec. 520.503  What must I demonstrate in my application for a student-
learner certificate to receive a favorable review?

    Each student-learner application must demonstrate that:
    (a) The training program under which the student-learner will be 
employed is a bona fide vocational training program as defined in 
subpart C of this part;
    (b) The employment of the student-learner at subminimum wages 
authorized by the special certificate must be necessary to prevent 
curtailment of opportunities for employment;
    (c) The student-learner is at least sixteen years of age, or at 
least eighteen years of age if employed in any occupation which the 
Secretary has declared to be particularly hazardous (see part 570, 
subpart E, of this chapter, but note the specific exemptions for 
student-learners in several of the orders);
    (d) The occupation for which the student-learner is receiving 
preparatory training requires a sufficient degree of skill to 
necessitate a substantial learning period;
    (e) The training is not for the purpose of acquiring manual 
dexterity and high production speed in repetitive operations;
    (f) The employment of a student-learner will not have the effect of 
displacing a worker employed in the establishment;
    (g) The employment of the student-learners at subminimum wages must 
not tend to impair or depress the wage rates or working standards 
established for experienced workers for work of a like or comparable 
character;
    (h) The occupational needs of the community or industry warrant the 
training of student-learners;
    (i) There are no serious outstanding violations of the provisions 
of a student-learner certificate previously issued to the employer, or 
serious violations of any other provisions of the FLSA by the employer 
which provide reasonable grounds to conclude that the terms of the 
certificate would not be complied with, if issued;
    (j) The issuance of such a certificate would not tend to prevent 
the development of apprenticeship programs in accordance with the 
regulations applicable thereto (subpart D of this part) or would not 
impair established apprenticeship standards in the occupation or 
industry involved; and
    (k) The number of student-learners to be employed in one 
establishment is not more than a small proportion of its work force.


Sec. 520.504  When will authority to pay student-learners subminimum 
wages become effective?

    (a) Certification by the appropriate school official on an 
application for a special student-learner certificate shall constitute 
a temporary authorization. This temporary authorization is effective 
from the date such application is forwarded to the Wage and Hour 
Division in conformance with Sec. 520.501.
    (b) At the end of 30 days, this application shall become the 
permanent special student-learner certificate unless, after review, the 
Administrator denies the application, issues a certificate with 
modified terms and conditions, or expressly extends the period of 
review.


Sec. 520.505  How will I be notified that my request to employ student-
learners at subminimum wages has been denied and can I appeal the 
denial?

    (a) If, after review, an application is denied, notification of 
denial will be made to the appropriate school official, the employer 
and the student. This notification will occur within 30 days following 
the date such application was forwarded to the Wage and Hour Division, 
unless additional time for

[[Page 7105]]

review is considered necessary or appropriate.
    (b) If additional time for review is considered necessary or 
appropriate, the proper school official, the employer, and the student 
shall be so notified. To the extent feasible, the Administrator may 
provide an opportunity to other interested persons to present data and 
views on the application before denying a special student-learner 
certificate.
    (c) Whenever a notification of denial is mailed to the employer, 
such denial shall be without prejudice to any subsequent application, 
except under the circumstances referred to in Sec. 520.502(i)(3).
    (d) Section 520.204 describes the procedures for requesting 
reconsideration of a decision to grant or deny a certificate.


Sec. 520.506  What is the subminimum wage for student-learners and what 
must I do to comply with the terms of my student-learner certificate?

    (a) The special minimum wage rate paid to student-learners shall be 
not less than 75 percent of the applicable minimum under section 6(a) 
of the FLSA.
    (b) Compliance with items listed for favorable review of a student-
learner application (Sec. 540.503) must be demonstrated.
    (c) (1) The number of hours of employment training each week at 
subminimum wages pursuant to a certificate, when added to the hours of 
school instruction, shall not exceed 40 hours, except that 
authorization may be granted by the Administrator for a greater number 
of hours if found to be justified by extraordinary circumstances.
    (2) When school is not in session on any school day, the student-
learner may work a number of hours in addition to the weekly hours of 
employment training authorized by the certificate; provided,
    (i) The total hours worked shall not exceed 8 hours on any such 
day, and
    (ii) A notation shall be made in the employer's records to the 
effect that school not being in session was the reason additional hours 
were worked on such day.
    (3) During the school term, when school is not in session for the 
entire week, the student-learner may work at his/her employment 
training a number of hours in the week in addition to those authorized 
by the certificate; provided,
    (i) The total hours shall not exceed 40 hours in any such week, and
    (ii) A notation shall be made in the employer's records to the 
effect that school not being in session was the reason additional hours 
were worked in such week.
    (d) A special student-learner certificate shall not constitute 
authorization to pay a subminimum wage rate to a student-learner in any 
week in which he/she is employed for a number of hours in addition to 
the number authorized in the certificate, except as provided in 
paragraphs (c)(1), (2), and (3) of this section.


Sec. 520.507  How long does my certificate remain in effect?

    (a) A special student-learner certificate shall be effective for a 
period not to exceed the length of one school year unless a longer 
period is found to be justified by extraordinary circumstances. These 
circumstances must be explained in detail at the time of application. 
While each such request will be considered on its own merit, it is 
anticipated that such authorizations would be limited to occupations 
requiring an extended period of specialized training;
    (b) No certificate shall authorize employment training beyond the 
date of graduation.
    (c) No special student-learner certificate may be issued 
retroactively.


Sec. 520.508  What records, in addition to those required by part 516 
of this chapter and Sec. 520.203 of this part, must I keep when 
student-learners are employed?

    Any worker employed as a student-learner shall be identified as 
such on the payroll records, with each student-learner's occupation and 
rate of pay being shown. Notations should be made in the employer's 
records when additional hours are worked by reason of school not being 
in session.

[FR Doc. 97-3597 Filed 2-13-97; 8:45 am]
BILLING CODE 4510-27-P