[Federal Register Volume 62, Number 164 (Monday, August 25, 1997)]
[Proposed Rules]
[Pages 45064-45076]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22390]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 551

RIN 3206-AG70


Pay Administration Under the Fair Labor Standards Act

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The U.S. Office of Personnel Management (OPM) is publishing a 
proposed rule to amend regulations on the Fair Labor Standards Act 
(referred to as ``the Act'' or ``FLSA''). The purpose of the majority 
of the revisions is to make text clearer, standardize terms, change to 
the active voice, reorganize material for added clarity, insert or 
revise headings to accurately reflect content, reduce internal cross-
referencing, correct typographical, punctuation, and grammatical 
errors, and use ``plain English.'' The proposed rule includes guidance 
published in the sunsetted Federal Personnel Manual (FPM), adds certain 
work in the computer software field to the professional exemption 
criteria, adds an exemption for certain pilots, adds the statutory 
exclusion of customs officers, and includes regulations on child labor 
and claims and compliance.

DATES: Written comments will be considered if received on or before 
October 24, 1997. Please organize and identify comments by section and 
paragraph designation.

ADDRESSES: All comments concerning these proposed regulations should be 
addressed to Jeffrey D. Miller, Director, Classification Appeals and 
FLSA Programs, Office of Personnel Management, 1900 E Street NW., Room 
7679, Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Jeffrey D. Miller, Director, 
Classification Appeals and FLSA Programs, by telephone on 202-606-2990; 
by fax on 202-606-2663; or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: On January 10, 1995, OPM published a 
proposed rule (60 FR 2549) to amend regulations on the Fair Labor 
Standards Act by adding a subpart F--Complaints and Compliance. 
That subpart F provided for FLSA complaint adjudication by the 
agency involved rather than by OPM. Comments were received from 
four Federal agencies, four labor organizations, and one employee 
organization. OPM reconsidered its proposal and withdrew the 
proposed subpart F (62 FR 9995, March 5, 1997).

    The purpose of the majority of these revisions is to make text 
clearer, standardize terms, change to the active voice, reorganize 
material for added clarity, insert or revise headings to accurately 
reflect content, reduce internal cross-referencing, correct 
typographical, punctuation, and grammatical errors, and use ``plain 
English.'' The proposed rule includes guidance published in the 
sunsetted Federal Personnel Manual, adds certain work in the computer 
software field to the professional exemption criteria, adds an 
exemption for certain pilots, adds the statutory exclusion of customs 
officers, and adds two new subparts, subpart F--Child Labor and subpart 
G--FLSA Claims and Compliance. The changes are discussed section by 
section below. When the reason for a revision is one or more of the 
ones described in this paragraph, we do not repeat the reason when we 
describe the change.

1. Nomenclature Changes

    References to the Office of Personnel Management are changed to 
``OPM'; the word ``shall'' is changed to ``will'' or ``must,'' as 
appropriate; the phrase ``shall be'' is changed to ``is''; the phrase 
``employee in a position properly classified'' is substituted for 
``employee classified''; and ``primary duty test'' is substituted for 
``primary duty criterion.''

2. Miscellaneous Changes

    The following changes are made throughout: quotation marks are 
removed, and paragraph headings are added.

3. New Sections

    Two new sections are added to subpart B--Exemptions and the subpart 
is retitled ``Exemptions and Exclusions.'' One new section (551.204) 
describes the exemption of Federal Wage System employees. The other new 
section (551.211) describes the statutory exclusion of customs officers 
of the United States Customs Service. Customs officers whose exclusive 
entitlement to overtime pay is governed by section 5 of the Act of Feb. 
13, 1911, as amended (sections 261 and 267 of title 19, United States 
Code), are excluded from the hours of work and overtime pay provisions 
of the FLSA. As used in section 5, the term ``customs officer'' means a 
customs inspector, a supervisory customs inspector, a canine 
enforcement officer, or a supervisory canine enforcement officer.

4. New Subparts

    Two new subparts are added. The first (subpart F) addresses child 
labor and the second (subpart G) addresses complaints and compliance.

5. Subpart A

    Subpart A is restructured. Section 551.102--Definitions is 
redesignated Sec. 551.104 with the same title. Section 551.104--
Administrative authority is redesignated Sec. 551.102 and retitled 
``Authority and administration''.

6. Section 551.101--General.

    The second sentence of paragraph (a) is revised by deleting all 
that follows the word ``Act''. Revised paragraph (a) is moved to 
redesignated Sec. 551.102--Authority and administration.
    Paragraph (b) is redesignated paragraph (a). In the first sentence, 
the phrase ``Fair Labor Standards Act of 1938, as amended (referred to 
as ``the Act'' or ``FLSA'')'' replaces the word ``Act''.
    Paragraph (c) is redesignated paragraph (b).

7. Redesignated Sec. 551.102--Authority and Administration

    Paragraph (a) is moved to this section from published Sec.  551.101 
and paragraphs (b), (c), and (d) are added.
    Paragraph (a), moved here from published Sec. 551.101, describes 
OPM's authority. The sole sentence of published Sec. 551.104--
Administrative authority is added to paragraph (a) and is revised by 
deleting all the text following the word ``except'' and substituting 
``as specified in paragraphs (b), (c), and (d) of this section.''
    Paragraph (b) states that the Equal Employment Opportunity 
Commission administers the equal pay provisions of the Act.
    Paragraph (c) lists the United States Government entities for which 
the Department of Labor administers the Act. Those are the Library of 
Congress, the United States Postal Service, the Postal Rate Commission, 
and the Tennessee Valley Authority.
    Paragraph (d) lists the United States Government entities for which 
the Office of Compliance administers the Act. The Congressional 
Accountability

[[Page 45065]]

Act of 1995 (Pub. L. 104-1, 109 Stat. 4, January 23, 1995) authorized 
the application of the provisions of the FLSA to the legislative branch 
of the Federal Government and authorized the Office of Compliance to 
administer the FLSA for any employee of the United States House of 
Representatives; the Unites States Senate; the Capitol Guide Service; 
the Capitol Police; the Congressional Budget Office; the Office of the 
Architect of the Capitol; the Office of the Attending Physician; the 
Office of Compliance; and the Office of Technology Assessment.

8. Section 551.103--Coverage

    The phrase ``as defined in Sec. 551.102'' is deleted from 
paragraphs (b)(2) and (b)(3).

9. Redesignated Sec. 551.104--Definitions

    Several of the current definitions are revised. The phrase ``or 
FLSA'' is added to the definition of ``Act''. The definition of 
``agency'' is revised by deleting the colon and all text following the 
colon and adding ``the entities of the United States Government listed 
in Sec. 551.101 for which the Department of Labor and the Office of 
Compliance administer the Act.'' The definition of ``employ'' is 
revised by deleting the phrase ``as defined for this part''. The 
definition of ``employee'' is revised by adding a reference to law to 
subparagraphs (1) and (2) and deleting the words ``legislative or'' 
from subparagraph (4). The list of locations under the definition of 
``exempt area'' is updated--``U.S.'' is inserted before the name 
``Virgin Islands,'' Eniwetol Atoll and Kwajalein Atoll are deleted, and 
Midway Atoll and Palmyra are added.
    Many of the terms used in the FLSA arena have acquired well-
established interpretations that sometimes differ from the customary 
interpretations in the Federal service. Terms and definitions from FPM 
Letter No. 551-7, dated July 1, 1975, are added, as well as definitions 
of other FLSA and pay administration terms. Terms added are as follows:

Administrative employee
Claim
Claim period
Claimant
Customarily and regularly
De minimis activity or worktime
Discretion and independent judgment
Emergency
Essential part of administrative or professional functions
Executive employee
FLSA exempt
FLSA exemption status
FLSA exemption status determination claim
FLSA nonexempt
FLSA overtime pay
FLSA pay claim
Foreign exemption
Formulation or execution of management programs or policies
Hours of work
Management or general business function or supporting service
Nonexempt area
Participation in the executive or administrative functions of a 
management official
Perform work in connection with an emergency
Preserve the claim period
Primary duty
Professional employee
Reckless disregard of the requirements of the Act
Recognized organizational unit
Situations 1 through 4
Statute of limitations
Supervisory and closely related work
Temporary work or duties
Title 5 overtime pay
Willful violation
Work of an intellectual nature
Work of a specialized or technical nature
Workday
Worktime
Worktime in a representative workweek
Workweek
Workweek basis

10. Section 551.201--Agency Authority

    The statement ``All employees are presumed to be FLSA nonexempt 
unless the employing agency makes a determination that the position 
meets one or more of the exemption criteria of this subpart.'' is added 
as the first sentence.

11. Section 551.202--General Principles Governing Exemptions

    The introductory language is revised by deleting the phrase ``the 
principles that--'' and substituting ``following principles:''.
    In paragraph (c), the phrase ``must be exempted'' is changed to 
``must be designated FLSA exempt'' and the sentence ``If there is a 
reasonable doubt as to whether an employee meets the criteria for 
exemption, the employee should be designated FLSA nonexempt.'' is 
added.
    Four additional general principles from FPM Letter 551-7, dated 
July 1, 1975, are added as paragraphs (d) through (g). An additional 
general principle is added as paragraph (h).

12. Section 551.203--Exemption of General Schedule Employees

    At the end of paragraph (a) the caveat is added that employees in 
positions properly classified at GS-4 or below are nonexempt unless 
subject to the foreign exemption.
    In paragraph (b), the phrase ``GS-5 or above'' is substituted for 
the phrase ``GS-5 through GS-10'' and the reference ``Secs. 551.204, 
551.205, and 551.206'' is deleted. At the end of paragraph (b) the 
caveat is added that the exemption status of employees in positions 
properly classified at GS-5 or above may be affected if the employee is 
required to temporarily perform work or duties that are not consistent 
with the employee's official position description or if the employee is 
subject to the foreign exemption.

13. Section 551.204--Executive Exemption Criteria

    The section is redesignated from Sec. 551.204 to Sec. 551.205.
    In the introductory paragraph, the term ``executive employee'' is 
italicized and the quotation marks removed. The title ``foreman'' is 
deleted. The phrase ``regularly and customarily'' is changed to 
``customarily and regularly'' to be consistent with the use of the 
phrase elsewhere. The phrases ``at least three'' and ``(excluding 
support personnel)'' are removed. The word ``both'' is substituted for 
``all.'' There is no need to distinguish between General Schedule (or 
equivalent) supervisors and Federal Wage System (or equivalent) 
supervisors. The General Schedule Supervisory Guide published in April 
1993 specifies no minimum number of employees to be supervised for a 
position to be classified as supervisory.
    In paragraph (a), the entire text is deleted and the phrase ``The 
primary duty test is met if the employee--'' is substituted.
    In paragraph (a)(1), the phrase ``select or remove, and advance in 
pay and promote, or make any other status changes of'' is changed to 
``make personnel changes that include, but are not limited to, 
selecting, removing, advancing in pay, or promoting.''
    In paragraph (b), the phrase ``supervisors in positions properly 
classified in the Federal Wage System below situation 3 of Factor I of 
the Federal Wage System Job Grading Standard for Supervisors'' is 
substituted for ``foreman level supervisors in the Federal Wage 
System'' to update the nomenclature. The word ``level'' is inserted 
after the word ``equivalent,'' and the word ``comparable'' is inserted 
before the phrase ``wage systems.'' The phrase ``employees at the GS-7 
through GS-9 level'' is deleted and ``firefighting or law enforcement 
employees in positions properly classified in the General Schedule at 
GS-7, GS-8, or GS-9 that are'' is substituted to describe the types of 
employees subject to 207(k) of title 29, United States Code. The phrase 
``employees classified at'' is deleted and ``employees in positions 
properly

[[Page 45066]]

classified in the General Schedule at'' is substituted. The words 
``the'' and ``level'' are deleted from the phrase ``classified at the 
GS-5 or GS-6 level'' and inserted in the parenthetical clause to read 
``(or the equivalent level in other white-collar pay systems).'' The 
phrase ``to meet the 80-percent test'' is added after ``closely related 
work.'' Paragraph (b) is restructured to more clearly and easily 
identify the types of employees to which the paragraph applies.

14. Section 551.205--Administrative Exemption Criteria

    The section is redesignated from Sec. 551.205 to Sec. 551.206.
    In the introductory paragraph, the term ``administrative employee'' 
is italicized. The words ``advisor, assistance,'' are deleted and the 
phrase ``advisor or assistant to management'' is substituted. The 
phrase ``who meets all'' is changed to ``and meets all four''.
    In paragraph (a), the introductory text ``The employee's primary 
duty consists of work that--'' is changed to ``The primary duty test is 
met if the employee's work--''.
    In paragraph (a)(1), the phrase ``management policies or programs'' 
is changed to ``management programs or policies.
    In paragraph (a)(3), the spelling of the word ``management'' is 
corrected.
    In paragraph (c), the phrase ``must frequently exercise'' is 
changed to the phrase ``frequently exercises'' to be consistent with 
wording elsewhere.
    In paragraph (d), the word ``level'' is inserted after the word 
``equivalent,'' the word ``pay'' is inserted after the word ``collar,'' 
and the phrase ``to meet the 80-percent test'' is added to the end of 
the sentence.

15. Section 551.206--Professional Exemption Criteria

    The section is redesignated from Sec. 551.206 to Sec. 551.207.
    In the introductory paragraph, the term ``professional employee'' 
is italicized.
    In paragraph (a), the introductory text ``The employee's primary 
duty consists of--'' is replaced with ``The primary duty test is met if 
the employee's work consists of--''.
    At the end of paragraph (a)(2), the period is replaced with a 
semicolon followed by the word ``or.''
    Paragraph (a)(3) is added and adds certain work in the computer 
software field to the types of work meeting the primary duty test. This 
change brings OPM's regulations into conformance with those of the 
Department of Labor which implemented the provisions of Pub. L. 101-
583, enacted November 15, 1990. That law required the issuance of 
regulations to permit computer systems analysts, computer programmers, 
software engineers, and other similarly skilled professional workers to 
qualify for exemption from the minimum wage and overtime compensation 
requirements of the Act under section 13(a)(1), the executive, 
administrative, and professional exemption.
    In paragraph (d), the spelling of the word ``employees'' is 
corrected, the word ``level'' is inserted after the word 
``equivalent,'' the phrase ``white-collar pay'' is inserted after the 
word ``other,'' and the word ``in'' is changed to ``on'' after the word 
``workweek'' to make this paragraph consistent with published 
Sec. 551.204(b) and 551.205(d).

16. Section 551.207--Foreign Exemption

    The section is redesignated from Sec. 551.207 to Sec. 551.209 and 
retitled ``Foreign exemption criteria.'' The section is reorganized for 
clarity and rewritten in plain English.

17. Section 551.208--Application of the Executive, Administrative, and 
Professional Exemption Criteria for Periods of Temporary Duty

    The section title is changed from ``Application of the executive, 
administrative, and professional exemption criteria for periods of 
temporary duty'' to ``Effect of temporary work or duties on FLSA 
exemption status.'' The section is reorganized for clarity and 
rewritten in plain English. The changes include the following.
    The phrase ``temporary work or duties'' is substituted for the 
phrase ``temporary duty'' to make clear that the subject is the work an 
employee is performing on a temporary basis. The change emphasizes that 
an employee's FLSA exemption status may change when an employee is 
temporarily required to perform work or duties not consistent with the 
employee's official position description and eliminates confusion with 
the term ``TDY'' (temporary duty). TDY is commonly used to refer to an 
employee in travel status or located somewhere on a temporary basis. To 
further emphasize this point, a sentence is added that states ``The 
period of temporary work or duties may or may not involve a different 
geographic duty location.''
    To focus attention on the tasks an employee is being asked to 
perform temporarily, rather than the type of appointment (permanent 
appointment, temporary appointment, or term appointment) or the 
temporariness or permanence of a personnel action (detail or temporary 
promotion), the phrases ``consistent with the employee's official 
position description'' or ``not consistent with the employee's official 
position description'' are used in lieu of ``duties which are not 
included in the employee's representative workweek'' and ``permanent 
position.''
    Nomenclature is updated and phrasing is revised to parallel earlier 
sections. For example, the phrase ``in the Federal Wage System at 
situation 3 or 4 of Factor I of the Federal Wage System Job Grading 
Standard for Supervisors'' is substituted for ``General Foreman''; the 
phrase ``in the Federal Wage System below situation 3 of Factor I of 
the Federal Wage System Job Grading Standard for Supervisors'' is 
substituted for ``below General Foreman''; and the phrase ``80 percent 
or more of the worktime in a given workweek'' is substituted for ``more 
than 80 percent of a given workweek''.

18. Section 551.209--Exemption of Criminal Investigators Receiving 
Availability Pay

    The section is redesignated from Sec. 551.209 to Sec. 551.110 and 
retitled ``Exemption of employees receiving availability pay.''
    Paragraph (a) addresses the exemption of criminal investigators 
receiving availability pay.
    Paragraph (b) addresses the exemption of pilots employed by the 
United States Customs Service who are law enforcement officers and also 
receive availability pay. Pub. L. 104-19, July 27, 1995, amended 
section 5545a of title 5, United States Code (U.S.C.), and provided 
that the provisions of subsections (a)-(h) providing for availability 
pay apply to a pilot employed by the United States Customs Service who 
is a law enforcement officer as defined under 5 U.S.C. 5541(3). For the 
purposes of 5 U.S.C. 5545a, 5 U.S.C. 5542(d) and section 13(a)(16) and 
(b)(30) of the FLSA (29 U.S.C. 213(a)(16) and (b)(30)), such pilots are 
deemed to be criminal investigators as defined in 5 U.S.C. 5545a.

19. Subpart F--Child Labor

    This new subpart sets forth the minimum age standards and 
delineates the respective responsibilities of an agency and OPM 
regarding the child labor provisions of the Act.

20. Subpart G--FLSA Claims and Compliance

    This new subpart describes the applicability of OPM's FLSA claims 
regulations, time limits that must be observed, avenues of review, the 
claimant's right to designate a representative, the form and content of

[[Page 45067]]

an FLSA claim, responsibilities of claimants and agencies, the 
circumstances under which an FLSA claim may be withdrawn or denied, the 
finality and effect of an OPM FLSA claim decision, the availability of 
information from an FLSA claim file, and where to file an FLSA claim 
with OPM.

Regulatory Flexibility Act

    I certify that these regulations will not have significant economic 
impact on a substantial number of small entities because they affect 
only Federal employees and agencies.

List of Subjects in 5 CFR Part 551

    Government employees, Wages.

U.S. Office of Personnel Management.
James B. King,
Director.

    Accordingly, OPM is proposing to amend 5 CFR part 551 as follows:

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

    1. The authority citation for part 551 continues to read as 
follows:

    Authority: 5 U.S.C. 5542(c); sec. 4(f) of the Fair Labor 
Standards Act of 1938, as amended by Pub. L. 93-259, 88 Stat. 55 (29 
U.S.C. 204f).

    2. Subpart A is revised to read as follows:

Subpart A--General Provisions

Sec.
551.101  General.
551.102  Authority and administration.
551.103  Coverage.
551.104  Definitions.

Subpart A--General Provisions


Sec. 551.101  General.

    (a) The Fair Labor Standards Act of 1938, as amended (referred to 
as ``the Act'' or ``FLSA''), provides for minimum standards for both 
wages and overtime entitlement, and delineates administrative 
procedures by which covered worktime must be compensated. Included in 
the Act are provisions related to child labor, equal pay, and portal-
to-portal activities. In addition, the Act exempts specified employees 
or groups of employees from the application of certain of its 
provisions. It prescribes penalties for the commission of specifically 
prohibited acts.
    (b) This part contains the regulations, criteria, and conditions 
that the Office of Personnel Management has prescribed for the 
administration of the Act. This part supplements and implements the 
Act, and must be read in conjunction with it.


Sec. 551.102  Authority and administration.

    (a)  Office of Personnel Management.  Section 3(e)(2) of the Act 
authorizes the application of the provisions of the Act to any person 
employed by the Government of the United States, as specified in that 
section. Section 4(f) of the Act authorizes the Office of Personnel 
Management (OPM) to administer the provisions of the Act. OPM is the 
administrator of the provisions of the Act with respect to any person 
employed by an agency, except as specified in paragraphs (b), (c), and 
(d) of this section.
    (b) The Equal Employment Opportunity Commission administers the 
equal pay provisions contained in section 6(d) of the Act.
    (c) The Department of Labor administers the Act for the following 
United States Government entities:
    (1) The Library of Congress;
    (2) The United States Postal Service;
    (3) The Postal Rate Commission; and
    (4) The Tennessee Valley Authority.
    (d) The Office of Compliance administers the Act for the following 
United States Government entities:
    (1) The United States House of Representatives;
    (2) The United States Senate;
    (3) The Capitol Guide Service;
    (4) The Capitol Police;
    (5) The Congressional Budget Office;
    (6) The Office of the Architect of the Capitol;
    (7) The Office of the Attending Physician;
    (8) The Office of Compliance; and
    (9) The Office of Technology Assessment.


Sec. 551.103  Coverage.

    (a) Covered. Any employee of an agency who is not specifically 
excluded by another statute is covered by the Act. This includes any 
person who is--
    (1) Defined as an employee in section 2105 of title 5, United 
States Code;
    (2) Appointed under other appropriate authority; or
    (3) Suffered or permitted to work by an agency whether or not 
formally appointed.
    (b) Not covered. The following persons are not covered under the 
Act:
    (1) A person appointed under appropriate authority without 
compensation;
    (2) A trainee; or
    (3) A volunteer.


Sec. 551.104  Definitions.

    In this part--
    Act or FLSA means the Fair Labor Standards Act of 1938, as amended 
(29 U.S.C. 201 et seq.).
    Administrative employee means an employee who meets the criteria in 
Sec. 551.206 of this part.
    Agency, for purposes of OPM's administration of the Act, means any 
instrumentality of the United States Government, or any constituent 
element thereof acting directly or indirectly as an employer, as this 
term is defined in section 3(d) of the Act and in this section, but 
does not include the entities of the United States Government listed in 
Sec. 551.102 for which the Department of Labor or the Office of 
Compliance administer the Act.
    Claim means a written allegation from a current or former employee 
concerning his or her FLSA exemption status determination or 
entitlement to minimum wage or overtime pay for work performed under 
the Act.
    Claim period means the time during which the cause or basis of the 
claim occurred.
    Claimant means a current or former employee who files an FLSA 
claim.
    Customarily and regularly means a frequency which must be greater 
than occasional but which may be less than constant. For example, the 
requirement in Sec. 551.205(a)(2) of this part will be met by an 
employee who normally and recurrently exercises discretion and 
independent judgment in the day-to-day performance of duties.
    De minimis activity or worktime means an activity or worktime of 
less than 10 minutes a day.
    Discretion and independent judgment means work that involves 
comparing and evaluating possible courses of conduct, interpreting 
results or implications, and independently taking action or making a 
decision after considering the various possibilities. However, firm 
commitments or final decisions are not necessary to support exemption. 
The ``decisions'' made as a result of the exercise of independent 
judgment may consist of recommendations for action rather than the 
actual taking of action. The fact that an employee's decisions are 
subject to review, and that on occasion the decisions are revised or 
reversed after review, does not mean that the employee is not 
exercising discretion and independent judgment of the level required 
for exemption. Work reflective of discretion and independent judgment 
must meet the three following criteria:
    (1) The work must be sufficiently complex and varied so as to 
customarily and regularly require discretion and independent judgment 
in determining the approaches and techniques to be used, and in 
evaluating results. This precludes exempting an employee who performs 
work primarily requiring skill

[[Page 45068]]

in applying standardized techniques or knowledge of established 
procedures, precedents, or other guidelines which specifically govern 
the employee's action.
    (2) The employee must have the authority to make such 
determinations during the course of assignments. This precludes 
exempting trainees who are in a line of work which requires discretion 
but who have not been given authority to decide discretionary matters 
independently.
    (3) The decisions made independently must be significant. The term 
``significant'' is not so restrictive as to include only the kinds of 
decisions made by employees who formulate policies or exercise broad 
commitment authority. However, the term does not extend to the kinds of 
decisions that affect only the procedural details of the employee's own 
work, or to such matters as deciding whether a situation does or does 
not conform to clearly applicable criteria.
    Emergency means a temporary condition that poses a direct threat to 
human life or safety, serious damage to property, or serious disruption 
to the operations of an activity, as determined by the employing 
agency.
    Employ means to engage a person in an activity that is for the 
benefit of an agency, and includes any hours of work that are suffered 
or permitted.
    Employee means a person who is employed--
    (1) In an executive agency as defined in section 105 of title 5, 
United States Code;
    (2) As a civilian in a military department as defined in section 
102 of title 5, United States Code;
    (3) In a nonappropriated fund instrumentality of an executive 
agency or a military department; or
    (4) In a unit of the judicial branch of the Government that has 
positions in the competitive service.
    Employer, as defined in section 3(d) of the Act, means any person 
acting directly or indirectly in the interest of an employer in 
relation to an employee and includes a public agency, but does not 
include any labor organization (other than when acting as an employer) 
or anyone acting in the capacity of officer or agent of such labor 
organization.
    Essential part of administrative or professional functions means 
work that is included as an integral part of administrative or 
professional exempt work. This work is identified by examining the 
processes involved in performing the exempt function. For example, the 
processes involved in evaluating a body of information include 
collecting and organizing information; analyzing, evaluating, and 
developing conclusions; and frequently, preparing a record of findings 
and conclusions. Often collecting or compiling information and 
preparing reports or other records, if divorced from the evaluative 
function, are nonexempt tasks. When an employee who performs the 
evaluative functions also performs some or all of these related steps, 
all such work (for example, collecting background information, 
recording test results, tabulating data, or typing reports) is included 
in the employee's exempt duties.
    Executive employee means an employee who meets the criteria in 
section 551.205 of this part.
    Exempt area means any foreign country, or any territory under the 
jurisdiction of the United States other than the following locations:
    (1) A State of the United States;
    (2) The District of Columbia;
    (3) Puerto Rico;
    (4) The U.S. Virgin Islands;
    (5) Outer Continental Shelf Lands as defined in the Outer 
Continental Shelf Lands Act (67 Stat. 462);
    (6) American Samoa;
    (7) Guam;
    (8) Midway Atoll;
    (9) Wake Island;
    (10) Johnston Island; and
    (11) Palmyra.
    FLSA exempt means not covered by the minimum wage and overtime 
provisions of the Act.
    FLSA exemption status means an employee's designation by the 
employing agency as either FLSA exempt or FLSA nonexempt from the 
minimum wage and overtime provisions of the Act.
    FLSA exemption status determination claim means a claim from a 
current or former employee challenging the correctness of his or her 
FLSA exemption status determination.
    FLSA nonexempt means covered by the minimum wage and overtime 
provisions of the Act.
    FLSA overtime pay, for the purpose of Sec. 551.208 of this part, 
means overtime pay under this part.
    FLSA pay claim means a claim from a current or former employee 
concerning his or her entitlement to minimum wage or overtime pay for 
work performed under the Act.
    Foreign exemption means a provision of the Act under which the 
minimum wage, overtime, and child labor provisions of the Act do not 
apply to any employee who spends all hours of work in a given workweek 
in an exempt area.
    Formulation or execution of management programs or policies means 
work that involves management programs and policies which range from 
broad national goals expressed in statutes or Executive orders to 
specific objectives of a small field office. Employees make policy 
decisions or participate indirectly, through developing or recommending 
proposals that are acted on by others. Employees significantly affect 
the execution of management programs or policies typically when the 
work involves obtaining compliance with such policies by other 
individuals or organizations, within or outside of the Federal 
Government, or making significant determinations furthering the 
operation of programs and accomplishment of program objectives. 
Administrative employees engaged in such work typically perform one or 
more phases of program management (that is, planning, developing, 
promoting, coordinating, controlling, or evaluating operating programs 
of the employing organization or of other organizations subject to 
regulation or other controls).
    Hours of work means all time spent by an employee performing an 
activity for the benefit of an agency and under the control or 
direction of the agency. Hours of work are creditable for the purposes 
of determining overtime pay under subpart D of this part. Section 
551.401 of subpart D further explains this term. However, whether time 
is credited as hours of work is determined by considering many factors, 
such as the rules in subparts D and E of this part, provisions of law, 
Comptroller General decisions, OPM policy guidance, agency policy and 
regulations, negotiated agreements, the rules in part 550 of this 
chapter (for hours of work for travel), and the rules in part 410 of 
this chapter (for hours of work for training).
    Management or general business function or supporting service, as 
distinguished from production functions, means the work of employees 
who provide support to line managers.
    (1) These employees furnish such support by--
    (i) Providing expert advice in specialized subject matter fields, 
such as that provided by management consultants or systems analysts;
    (ii) Assuming facets of the overall management function, such as 
safety management, personnel management, or budgeting and financial 
management;
    (iii) Representing management in such business functions as 
negotiating and administering contracts, determining acceptability of 
goods or services, or authorizing payments; or

[[Page 45069]]

    (iv) Providing supporting services, such as automated data 
processing, communications, or procurement and distribution of 
supplies.
    (2) Neither the organizational location nor the number of employees 
performing identical or similar work changes general management, 
business, or servicing functions into production functions. The work, 
however, must involve substantial discretion on matters of enough 
importance that the employee's actions and decisions have a noticeable 
impact on the effectiveness of the organization advised, represented, 
or serviced.
    Nonexempt area means any of the following locations:
    (1) A State of the United States;
    (2) The District of Columbia;
    (3) Puerto Rico;
    (4) The U.S. Virgin Islands;
    (5) Outer Continental Shelf Lands as defined in the Outer 
Continental Shelf Lands Act (67 Stat. 462);
    (6) American Samoa;
    (7) Guam;
    (8) Midway Atoll;
    (9) Wake Island;
    (10) Johnston Island; and
    (11) Palmyra.
    Participation in the executive or administrative functions of a 
management official means the participation of employees, variously 
identified as secretaries, administrative or executive assistants, 
aides, etc., in portions of the managerial or administrative functions 
of a supervisor whose scope of responsibility precludes personally 
attending to all aspects of the work. To support exemption, such 
employees must be delegated and exercise substantial authority to act 
for the supervisor in the absence of specific instructions or 
procedures, and take actions which significantly affect the 
supervisor's effectiveness.
    Perform work in connection with an emergency means to perform work 
that is directly related to resolving or coping with an emergency, or 
its immediate aftermath, as determined by the employing agency.
    Preserve the claim period means to establish the period of possible 
entitlement to back pay by filing a written claim with either the 
agency employing the claimant during the claim period or with OPM. The 
date the agency or OPM receives the claim is the date that determines 
the period of possible entitlement to back pay.
    Primary duty typically means the duty that constitutes the major 
part (over 50 percent) of an employee's work. A duty constituting less 
than 50 percent of the work may be credited as the primary duty for 
exemption purposes provided that duty--
    (1) Constitutes a substantial, regular part of a position;
    (2) Governs the classification and qualification requirements of 
the position; and
    (3) Is clearly exempt work in terms of the basic nature of the 
work, the frequency with which the employee must exercise discretion 
and independent judgment, and the significance of the decisions made.
    Professional employee means an employee who meets the criteria in 
section 551.207 of this part.
    Reckless disregard of the requirements of the Act means failure to 
make adequate inquiry into whether conduct is in compliance with the 
Act.
    Recognized organizational unit means an established and defined 
organizational entity which has regularly assigned employees and for 
which a supervisor is responsible for planning and accomplishing a 
continuing workload. This distinguishes supervisors from leaders who 
head temporary groups formed to perform assignments of limited 
duration.
    Situations 1 through 4 means the four basic situations described 
under Factor I, Nature of Supervisory Responsibility, in the Federal 
Wage System Job Grading Standard for Supervisors. The situations depict 
successively higher levels of supervisory responsibility and authority 
for scheduling work operations, planning use of resources to accomplish 
work, directing subordinates in performing work assignments, and 
carrying out administrative duties.
    Statute of limitations means the time frame within which an FLSA 
pay claim must be filed, starting from the date the right accrued. All 
FLSA pay claims filed on or after June 30, 1994, are subject to a 2-
year statute of limitations, except in cases of willful violation where 
the statute of limitations is 3 years.
    Suffered or permitted work means any work performed by an employee 
for the benefit of an agency, whether requested or not, provided the 
employee's supervisor knows or has reason to believe that the work is 
being performed and has an opportunity to prevent the work from being 
performed.
    Supervisory and closely related work means work that is included in 
the calculation of exempt work for supervisory positions.
    (1) Work is considered closely related to exempt supervisory work 
if it contributes to the effective supervision of subordinate workers, 
or the smooth functioning of the unit supervised, or both. Examples of 
closely related work include the following:
    (i) Maintaining various records pertaining to workload or employee 
performance;
    (ii) Performing setup work that requires special skills, typically 
is not performed by production employees in the occupation, and does 
not approach the volume that would justify hiring a specially trained 
employee to perform; and
    (iii) Performing infrequently recurring or one-time tasks which are 
impractical to delegate because they would disrupt normal operations or 
take longer to explain than to perform.
    (2) Activities in which both workers and supervisors are required 
to engage themselves are considered to be closely related to the 
primary duty of the position, for example, physical training during 
tours of duty for firefighting and law enforcement personnel.
    Temporary work or duties means work or duties an employee must 
temporarily perform that are not consistent with the employee's 
official position description. The period of temporary work or duties 
may or may not involve a different geographic duty location.
    Title 5 overtime pay, for the purpose of Sec. 551.208 of this part, 
means overtime pay under part 550 of this chapter.
    Trainee means a person who does not meet the definition of employee 
in this section and who is assigned or attached to a Federal activity 
primarily for training. A person who attends a training program under 
the following conditions is considered a trainee and, therefore, is not 
an employee of the Government of the United States for purposes of the 
Act:
    (1) The training, even though it includes actual operation of the 
facilities of the Federal activity, is similar to that given in a 
vocational school or other institution of learning;
    (2) The training is for the benefit of the individual;
    (3) The trainee does not displace regular employees, but, rather, 
is supervised by them;
    (4) The Federal activity which provides the training derives no 
immediate advantage from the activities of the trainee; on occasion its 
operations may actually be impeded;
    (5) The trainee is not necessarily entitled to a job with the 
Federal activity at the completion of the training period; and
    (6) The agency and the trainee understand that the trainee is not 
entitled to the payment of wages from the agency for the time spent in 
training.
    Volunteer means a person who does not meet the definition of 
employee in this section and who volunteers or

[[Page 45070]]

donates his or her service, the primary benefit of which accrues to the 
performer of the service or to someone other than the agency. Under 
such circumstances there is neither an expressed nor an implied 
compensation agreement. Services performed by such a volunteer include 
personal services that, if left unperformed, would not necessitate the 
assignment of an employee to perform them.
    Willful violation means a violation in circumstances where the 
agency knew that its conduct was prohibited by the Act or showed 
reckless disregard of the requirements of the Act. All of the facts and 
circumstances surrounding the violation are taken into account in 
determining whether a violation was willful.
    Work of an intellectual nature means work requiring general 
intellectual abilities, such as perceptiveness, analytical reasoning, 
perspective, and judgment applied to a variety of subject matter 
fields, or work requiring mental processes which involve substantial 
judgment based on considering, selecting, adapting, and applying 
principles to numerous variables. The employee cannot rely on 
standardized application of established procedures or precedents, but 
must recognize and evaluate the effect of a continual variety of 
conditions or requirements in selecting, adapting, or innovating 
techniques and procedures, interpreting findings, and selecting and 
recommending the best alternative from among a broad range of possible 
actions.
    Work of a specialized or technical nature means work which requires 
substantial specialized knowledge of a complex subject matter and of 
the principles, techniques, practices, and procedures associated with 
that subject matter field. This knowledge characteristically is 
acquired through considerable on-the-job training and experience in the 
specialized subject matter field, as distinguished from professional 
knowledge characteristically acquired through specialized academic 
education.
    Workday means the period between the commencement of the principal 
activities that an employee is engaged to perform on a given day and 
the cessation of the principal activities for that day. The term is 
further explained in Sec. 551.411 of this part.
    Worktime, for the purpose of determining FLSA exemption status, 
means time spent actually performing work. This excludes periods of 
time during which an employee performs no work, such as standby time, 
sleep time, meal periods, and paid leave.
    Worktime in a representative workweek means the average percentages 
of worktime over a period long enough to even out normal fluctuations 
in workloads and be representative of the job as a whole.
    Workweek means a fixed and recurring period of 168 hours--seven 
consecutive 24-hour periods. It need not coincide with the calendar 
week but may begin on any day and at any hour of a day. For employees 
subject to part 610 of this chapter, the workweek shall be the same as 
the administrative workweek defined in Sec. 610.102 of this chapter.
    Workweek basis means the unit of time used as the basis for 
applying overtime standards under the Act and, for employees under 
flexible or compressed work schedules, under 5 U.S.C. 6121(6) or (7). 
The Act takes a single workweek as its standard and does not permit 
averaging of hours over two or more weeks, except for employees engaged 
in fire protection or law enforcement activities under section 7(k) of 
the Act.
    3. Subpart B is revised to read as follows:

Subpart B--Exemptions and Exclusions

Sec.
551.201  Agency authority.
551.202  General principles governing exemptions.
551.203  Exemption of General Schedule employees.
551.204  Exemption of Federal Wage System employees.
551.205  Executive exemption criteria.
551.206  Administrative exemption criteria.
551.207  Professional exemption criteria.
551.208  Effect of performing temporary work or duties on FLSA 
exemption status.
551.209  Foreign exemption criteria.
551.210  Exemption of employees receiving availability pay.
551.211  Statutory exclusion.

Subpart B--Exemptions and Exclusions


Sec. 551.201  Agency authority.

    All employees are presumed to be FLSA nonexempt unless the 
employing agency makes a determination that the position meets one or 
more of the exemption criteria of this subpart. The employing agency 
must exempt from the overtime provisions of the Act any employee who 
meets the exemption criteria of this subpart and such supplemental 
interpretations or instructions issued by OPM.


Sec. 551.202  General principles governing exemptions.

    In all exemption determinations, the agency must observe the 
following principles:
    (a) Exemption criteria must be narrowly construed to apply only to 
those employees who are clearly within the terms and spirit of the 
exemption.
    (b) The burden of proof rests with the agency that asserts the 
exemption.
    (c) All employees who clearly meet the criteria for exemption must 
be designated FLSA exempt. If there is a reasonable doubt as to whether 
an employee meets the criteria for exemption, the employee should be 
designated FLSA nonexempt.
    (d) There are groups of General Schedule employees who are FLSA 
nonexempt because they do not fit any of the exemption categories. 
These groups include the following:
    (1) Nonsupervisory General Schedule employees in equipment 
operating and protective occupations, and most clerical occupations 
(see the definition of participation in the executive or administrative 
functions of a management official in subpart A of this part);
    (2) Nonsupervisory General Schedule employees performing technician 
work in positions properly classified below GS-9 (or the equivalent 
level in other white-collar pay systems) and many, but not all, of 
those positions properly classified at GS-9 or above (or the equivalent 
level in other white-collar pay systems); and
    (3) Nonsupervisory General Schedule employees at any grade level in 
occupations requiring highly specialized technical skills and 
knowledges that can be acquired only through prolonged job training and 
experience, such as the Air Traffic Control series, GS-2152, or the 
Aircraft Operations series, GS-2181, unless such employees are 
performing predominantly administrative functions rather than the 
technical work of the occupation.
    (e) Although separate criteria are provided for the exemption of 
executive, administrative, and professional employees, those categories 
are not mutually exclusive. All exempt work, regardless of category, 
must be considered. The only restriction is that, when the requirements 
of one category are more stringent, the combination of exempt work must 
meet the more stringent requirements.
    (f) Failure to meet the criteria for exemption under what might 
appear to be the most appropriate criteria does not preclude exemption 
under another category. For example, an engineering technician who 
fails to meet the professional exemption criteria may be performing 
exempt administrative work, or an administrative officer who fails to

[[Page 45071]]

meet the administrative criteria may be performing exempt executive 
work.
    (g) Although it is normally feasible and more convenient to 
identify the exemption category, this is not essential. An exemption 
may be based on a combination of functions, no one of which constitutes 
the primary duty, or the employee's primary duty may involve two 
categories which are intermingled and difficult to segregate. This does 
not preclude exempting the employee, provided the work as a whole 
clearly meets the other exemption criteria.
    (h) The designation of an employee as FLSA exempt or nonexempt 
ultimately rests on the duties actually performed by the employee.


Sec. 551.203  Exemption of General Schedule employees.

    (a) GS-4 or below. Any employee in a position properly classified 
at GS-4 or below (or the equivalent level in other white-collar pay 
systems) is nonexempt, unless the employee is subject to the foreign 
exemption in Sec. 551.209.
    (b) GS-5 or above. Any employee in a position properly classified 
at GS-5 or above (or the equivalent level in other white-collar pay 
systems) is exempt only if the employee is an executive, 
administrative, or professional employee as defined in this subpart, 
unless the employee is subject to Sec. 551.208 (the effect of 
performing temporary work or duties on FLSA exemption status) or 
Sec. 551.209 (the foreign exemption).


Sec. 551.204  Exemption of Federal Wage System employees.

    (a) Nonsupervisory. A nonsupervisory employee in the Federal Wage 
System or under other comparable wage systems is nonexempt, unless the 
employee is subject to Sec. 551.208 (the effect of performing temporary 
work or duties on FLSA exemption status) or Sec. 551.209 (the foreign 
exemption).
    (b) Supervisory. A supervisory employee in the Federal Wage System 
or under other comparable wage systems is exempt only if the employee 
is an executive employee as defined in Sec. 551.205, unless the 
employee is subject to Sec. 551.208 (the effect of performing temporary 
work or duties on FLSA exemption status) or Sec. 551.209 (the foreign 
exemption).


Sec. 551.205  Executive exemption criteria.

    An executive employee is a supervisor or manager who manages a 
Federal agency or any subdivision thereof (including the lowest 
recognized organizational unit with a continuing function) and 
customarily and regularly directs the work of subordinate employees and 
meets both of the following criteria:
    (a) Primary duty test. The primary duty test is met if the 
employee--
    (1) Has authority to make personnel changes that include, but are 
not limited to, selecting, removing, advancing in pay, or promoting 
subordinate employees, or has authority to suggest or recommend such 
actions with particular consideration given to these suggestions and 
recommendations; and
    (2) Customarily and regularly exercises discretion and independent 
judgment in such activities as work planning and organization; work 
assignment, direction, review, and evaluation; and other aspects of 
management of subordinates, including personnel administration.
    (b) 80-percent test. In addition to the primary duty test that 
applies to all employees, the following employees must spend 80 percent 
or more of the worktime in a representative workweek on supervisory and 
closely related work to meet the 80-percent test:
    (1) Employees in positions properly classified in the General 
Schedule at GS-5 or GS-6 (or the equivalent level in other white-collar 
pay systems);
    (2) Firefighting or law enforcement employees in positions properly 
classified in the General Schedule at GS-7, GS-8, or GS-9 who are 
subject to section 207(k) of title 29, United States Code; and
    (3) Supervisors in positions properly classified in the Federal 
Wage System below situation 3 of Factor I of the Federal Wage System 
Job Grading Standard for Supervisors (or the equivalent level in other 
comparable wage systems).


Sec. 551.206  Administrative exemption criteria.

    An administrative employee is an advisor or assistant to 
management, a representative of management, or a specialist in a 
management or general business function or supporting service and meets 
all four of the following criteria:
    (a) Primary duty test. The primary duty test is met if the 
employee's work--
    (1) Significantly affects the formulation or execution of 
management programs or policies; or
    (2) Involves general management or business functions or supporting 
services of substantial importance to the organization serviced; or
    (3) Involves substantial participation in the executive or 
administrative functions of a management official.
    (b) Nonmanual work. The employee performs office or other 
predominantly nonmanual work which is--
    (1) Intellectual and varied in nature; or
    (2) Of a specialized or technical nature that requires considerable 
special training, experience, and knowledge.
    (c) Discretion and independent judgment. The employee frequently 
exercises discretion and independent judgment, under only general 
supervision, in performing the normal day-to-day work.
    (d) 80-percent test. In addition to the primary duty test that 
applies to all employees, General Schedule employees in positions 
properly classified at GS-5 or GS-6 (or the equivalent level in other 
white-collar pay systems) must spend 80 percent or more of the worktime 
in a representative workweek on administrative functions and work that 
is an essential part of those functions to meet the 80-percent test.


Sec. 551.207  Professional exemption criteria.

    A professional employee is an employee who meets all of the 
following criteria, or any teacher who is engaged in the imparting of 
knowledge or in the administration of an academic program in a school 
system or educational establishment.
    (a) Primary duty test. The primary duty test is met if the 
employee's work consists of--
    (1) Work that requires knowledge in a field of science or learning 
customarily and characteristically acquired through education or 
training that meets the requirements for a bachelor's or higher degree, 
with major study in or pertinent to the specialized field as 
distinguished from general education; or is performing work, comparable 
to that performed by professional employees, on the basis of 
specialized education or training and experience which has provided 
both theoretical and practical knowledge of the specialty, including 
knowledge of related disciplines and of new developments in the field; 
or
    (2) Work in a recognized field of artistic endeavor that is 
original or creative in nature (as distinguished from work which can be 
produced by a person endowed with general manual or intellectual 
ability and training) and the result of which depends on the invention, 
imagination, or talent of the employee; or
    (3) Work that requires theoretical and practical application of 
highly-specialized knowledge in computer systems, analysis, 
programming, and software engineering or other similar work in the 
computer software field.

[[Page 45072]]

The work must consist of one or more of the following:
    (i) The application of systems analysis techniques and procedures, 
including consulting with users, to determine hardware, software, or 
system functional specifications; or
    (ii) The design, development, documentation, analysis, creation, 
testing, or modification of computer systems or programs, including 
prototypes, based on and related to user or system design 
specifications; or
    (iii) The design, documentation, testing, creation, or modification 
of computer programs related to machine operating systems; or
    (iv) A combination of the duties described in paragraphs (a)(3)(i), 
(3)(ii), and (3)(iii) of this section, the performance of which 
requires the same level of skills.
    (b) Intellectual and varied in nature. The employee's work is 
predominantly intellectual and varied in nature, requiring creative, 
analytical, evaluative, or interpretative thought processes for 
satisfactory performance.
    (c) Discretion and independent judgment. The employee frequently 
exercises discretion and independent judgment, under only general 
supervision, in performing the normal day-to-day work.
    (d) 80-percent test. In addition to the primary duty test that 
applies to all employees, General Schedule employees in positions 
properly classified at GS-5 or GS-6 (or the equivalent level in other 
white-collar pay systems), must spend 80 percent or more of the 
worktime in a representative workweek on professional functions and 
work that is an essential part of those functions to meet the 80-
percent test.


Sec. 551.208  Effect of performing temporary work or duties on FLSA 
exemption status.

     (a) Applicability.--(1) When applicable. This section applies only 
when an employee must temporarily perform work or duties that are not 
consistent with the employee's official position description. The 
period of temporary work or duties may or may not involve a different 
geographic duty location. The FLSA exemption status of employees during 
a period of temporary work or duties must be determined as described in 
this section.
    (2) When not applicable. This section does not apply when an 
employee is detailed to an identical additional position as the 
employee's position or to a position of the same grade, series code, 
basic duties, and FLSA exemption status as the employee's position.
    (b) Effect on nonexempt employees. (1) A nonexempt employee who 
must temporarily perform work or duties that are not consistent with 
the employee's official position description remains nonexempt for the 
entire period of temporary work or duties unless all three of the 
following conditions are met:
    (i) 30-day test. The period of temporary work or duties exceeds 30 
days; and
    (ii) Exempt work or duty. The employee's primary duty for the 
period of temporary work or duties is exempt work or duty as defined in 
this part; and
    (iii) Positions at GS-7 or above, or at situations 3 or 4. The 
employee's position (including a position to which the employee is 
temporarily promoted) is properly classified in the General Schedule at 
GS-7 or above (or the equivalent level in other white-collar pay 
systems) or properly classified in the Federal Wage System as a 
supervisor at situation 3 or 4 of Factor I of the Federal Wage System 
Job Grading Standard for Supervisors (or the equivalent level in other 
comparable wage systems).
    (2) If a nonexempt employee becomes exempt under the criteria in 
paragraph (b)(1) of this section--
    (i) The employee must be considered exempt for the entire period of 
temporary work or duties; and
    (ii) If the employee received FLSA overtime pay for work performed 
during the first 30 days of the temporary work or duties, the agency 
must recalculate the employee's total pay retroactive to the beginning 
of that period because the employee is now not entitled to the FLSA 
overtime pay received but may be owed title 5 overtime pay.
    (c) Effect on exempt employees. (1) An exempt employee not covered 
by the special provision of paragraph (c)(3) of this section who must 
temporarily perform work or duties that are not consistent with the 
employee's official position description remains exempt for the entire 
period of temporary work or duties unless all three of the following 
conditions are met:
    (i) 30-day test. The period of temporary work or duties exceeds 30 
days; and
    (ii) Not exempt work. The employee's primary duty for the period of 
temporary work or duties is not exempt work or duty as defined in this 
part; and
    (iii) Positions at GS-7 or above, or at situation 3 or 4. The 
employee's position (including a position to which the employee is 
temporarily promoted) is properly classified in the General Schedule at 
GS-7 or above (or the equivalent level in other white-collar pay 
systems) or properly classified in the Federal Wage System as a 
supervisor at situation 3 or 4 of Factor I of the Federal Wage System 
Job Grading Standard for Supervisors (or the equivalent level in other 
comparable wage systems).
    (2) If an exempt employee becomes nonexempt under the criteria in 
paragraph (c)(1) of this section--
    (i) The employee must be considered nonexempt for the entire period 
of temporary work or duties; and
    (ii) If the employee received title 5 overtime pay for work 
performed during the first 30 days of the temporary work or duties, the 
agency must recalculate the employee's total pay retroactive to the 
beginning of that period because the employee may now not be entitled 
to some or all of the title 5 overtime pay received but may be owed 
FLSA overtime pay.
    (3) Special provision for exempt employees at GS-5 or GS-6, or 
below situation 3: The exemption status of certain exempt employees who 
must temporarily perform work or duties that are not consistent with 
their official position description must be determined on a workweek 
basis for the period of temporary work or duties. Such employees are 
exempt employees whose positions (including a position to which the 
employee is temporarily promoted) are properly classified in the 
General Schedule at GS-5 or GS-6 (or the equivalent level in other 
white-collar pay systems), or are properly classified in the Federal 
Wage System below situation 3 of Factor I of the Federal Wage System 
Job Grading Standard for Supervisors (or the equivalent level in other 
comparable wage systems). The exemption status determination of these 
employees will result in the employee either remaining exempt or 
becoming nonexempt for that workweek, as described in paragraphs 
(c)(3)(i) and (c)(3)(ii) of this section.
    (i) Remain exempt. An exempt employee remains exempt for a given 
workweek only if the employee performs exempt work or duties for 80 
percent or more of the worktime in that workweek.
    (ii) Become nonexempt. An exempt employee becomes nonexempt for a 
given workweek only if the employee performs nonexempt work or duties 
for more than 20 percent of the worktime in that workweek.
    (d) Emergency situation. Notwithstanding any other provisions of 
this section, and regardless of an employee's grade level, the agency 
may determine that an emergency situation exists that directly 
threatens human life or safety, serious damage to property, or serious 
disruption to the operations of an activity, and there is no recourse

[[Page 45073]]

other than to assign qualified employees to temporarily perform work or 
duties in connection with the emergency. In such a designated 
emergency--
    (1) The exemption status of a nonexempt employee remains nonexempt 
whether the employee performs nonexempt work or exempt work during the 
emergency; and
    (2) The exemption status of an exempt employee must be determined 
on a workweek basis. The exemption status determination of exempt 
employees will result in the employee either remaining exempt or 
becoming nonexempt for that workweek, as described in paragraphs 
(d)(2)(i) and (d)(2)(ii) of this section.
    (i) Remain exempt. An exempt employee remains exempt for any 
workweek in which the employee performs exempt work or duties for 80 
percent or more of the worktime in a given workweek.
    (ii) Become nonexempt. An exempt employee becomes nonexempt for any 
workweek in which the employee performs nonexempt work or duties for 
more than 20 percent of the worktime in a given workweek.


Sec. 551.209  Foreign exemption criteria.

    (a) Application. When the foreign exemption applies, the minimum 
wage, overtime, and child labor provisions of the Act do not apply to 
any employee who spends all hours of work in a given workweek in an 
exempt area. When an employee meets one of the two criteria in 
paragraph (b) of this section, the foreign exemption applies until the 
employee spends any hours of work in any nonexempt area as defined in 
Sec. 551.102 of this part.
    (b) Foreign exemption applies. If an employee meets one of the two 
following criteria, the employee is subject to the foreign exemption of 
the Act and the minimum wage, overtime, and child labor provisions of 
the Act do not apply.
    (1) The employee is permanently stationed in an exempt area and 
spends all hours of work in a given workweek in one or more exempt 
areas; or
    (2) The employee is not permanently stationed in an exempt area, 
but spends all hours of work in a given workweek in one or more exempt 
areas.
    (c) Foreign exemption does not apply. For any given workweek, the 
minimum wage, overtime, and child labor provisions of the Act apply to 
an employee permanently stationed in an exempt area who spends any 
hours of work in any nonexempt area. For that workweek, the employee is 
not subject to the foreign exemption, and the agency must determine the 
exemption status of such an employee as described paragraphs (c)(1) and 
(c)(2) of this section. The foreign exemption does not resume until the 
employee again meets one of the criteria in paragraph (b) of this 
section.
    (1) Same duties. If the duties performed during that workweek are 
consistent with the employee's official position description, the 
agency must designate the employee the same FLSA exemption status as if 
the employee were permanently stationed in any nonexempt area.
    (2) Different duties. If the duties performed during that workweek 
are not consistent with the employee's official position description--
    (i) The agency must first designate the employee the same FLSA 
exemption status as the employee would have been designated based on 
the duties included in the employee's official position description if 
the employee were permanently stationed in any nonexempt area; and
    (ii) The agency must determine the employee's exemption status for 
that workweek by applying Sec. 551.208.
    (d) Resumption of foreign exemption. When an employee returns to 
any exempt area from performing any hours of work in any nonexempt 
area, the employee is not subject to the foreign exemption until the 
employee meets one of the criteria in paragraph (b) of this section.


Sec. 551.210  Exemption of employees receiving availability pay.

    The following employees are exempt from the hours of work and 
overtime pay provisions of the Act:
    (a) A criminal investigator receiving availability pay under 
section 550.181 of this chapter; and
    (b) A pilot employed by the United States Customs Service who is a 
law enforcement officer as defined in section 5541(3) of title 5, 
United States Code, and who receives availability pay under section 
5545a(i) of title 5, United States Code.


Sec. 551.211  Statutory exclusion.

    Customs officers whose exclusive entitlement to overtime pay is 
governed by section 5 of the Act of Feb. 13, 1911, as amended (19 
U.S.C. 261 and 267), are excluded from the hours of work and overtime 
pay provisions of the FLSA. As used in section 5, the term ``customs 
officer'' means a customs inspector, a supervisory customs inspector, a 
canine enforcement officer, or a supervisory canine enforcement 
officer.
    4. Subpart F is added to read as follows:

Subpart F--Child Labor

Sec.
551.601  Minimum age standards.
551.602  Responsibilities.

 Subpart F--Child Labor


Sec. 551.601  Minimum age standards.

    (a) 16-year minimum age. The Act, in section 3(l), sets a general 
16-year minimum age, which applies to all employment subject to its 
child labor provisions, with certain exceptions not applicable here.
    (b) 18-year minimum age. The Act, in section 3(1), also sets an 18-
year minimum age with respect to employment in any occupation found and 
declared by the Secretary of Labor to be particularly hazardous for the 
employment of minors of such age or detrimental to their health or 
well-being.


Sec. 551.602  Responsibilities.

    (a) Agencies must remain cognizant of and abide by regulations and 
orders published by the Secretary of Labor regarding the employment of 
individuals under the age of 18 years. These regulations and orders 
govern the minimum age at which persons under the age of 18 years may 
be employed and the occupations in which they may be employed. Persons 
under the age of 18 years must not be employed in occupations or engage 
in work deemed hazardous by the Secretary of Labor.
    (b) OPM will decide claims concerning the employment of persons 
under the age of 18 years. Claims must be filed following the 
procedures set forth in subpart G of this part.
    5. Subpart G is added to read as follows:

Subpart G--FLSA Claims and Compliance

Sec.
551.701  Applicability.
551.702  Time limits.
551.703  Avenues of review.
551.704  Claimant's representative.
551.705  Form and content of an FLSA claim.
551.706  Responsibilities.
551.707  Withdrawal or denial of an FLSA claim.
551.708  Finality and effect of OPM FLSA claim decision.
551.709  Availability of information.
551.710  Where to file an FLSA claim with OPM.

Subpart G--FLSA Claims and Compliance


Sec. 551.701  Applicability.

    (a) Applicable. This subpart applies to FLSA exemption status 
determination claims, FLSA pay claims for minimum wage or overtime pay 
for work performed under the Act, and claims

[[Page 45074]]

arising under the child labor provisions of the Act.
    (b) Not applicable. This subpart does not apply to claims or 
complaints arising under the equal pay provisions of the Act. The equal 
pay provisions of the Act are administered by the Equal Employment 
Opportunity Commission.


Sec. 551.702  Time limits.

    (a) Claims. A claimant may file an FLSA claim at any time under the 
child labor provisions of the Act or challenging the correctness of his 
or her FLSA exemption status determination. A claimant may also file an 
FLSA claim concerning his or her entitlement to minimum wage or 
overtime pay for work performed under the Act; however, time limits 
apply to FLSA pay claims. All FLSA pay claims filed on or after June 
30, 1994, are subject to a 2-year statute of limitations (3 years for 
willful violations).
    (b) Statute of limitations. An FLSA pay claim filed on or after 
June 30, 1994, is subject to the statute of limitations contained in 
the Portal-to-Portal Act of 1947, as amended (section 255a of title 29, 
United States Code), which imposes a 2-year statute of limitations, 
except in cases of a willful violation where the statute of limitations 
is 3 years. In deciding a claim, a determination must be made as to 
whether the cause or basis of the claim was the result of a willful 
violation on the part of the agency.
    (c) Preserving the claim period. A claimant or a claimant's 
designated representative may preserve the claim period by submitting a 
written claim either to the agency employing the claimant during the 
claim period or to OPM. The date the agency or OPM receives the claim 
is the date that determines the period of possible entitlement to back 
pay. The claimant is responsible for proving when the claim was 
received by the agency or OPM. The claimant should retain documentation 
to establish when the claim was received by the agency or OPM, such as 
by filing the claim using certified, return receipt mail, or by 
requesting that the agency or OPM provide written acknowledgment of 
receipt of the claim. If a claim for back pay is established, the 
claimant will be entitled to pay for a period of up to 2 years (3 years 
for a willful violation) back from the date the claim was received.


Sec. 551.703  Avenues of review.

    (a) Negotiated grievance procedure (NGP) as exclusive 
administrative remedy. If at any time during the claim period, a 
claimant was a member of a bargaining unit covered by a collective 
bargaining agreement that did not specifically exclude matters under 
the Act from the scope of the negotiated grievance procedure, the 
claimant must use that negotiated grievance procedure as the exclusive 
administrative remedy for all claims under the Act. There is no right 
to further administrative review by the agency or by OPM. The remaining 
sections in this subpart (that is, Secs. 551.704 through 551.711) do 
not apply to such employees.
    (b) Non-NGP administrative review by agency or OPM. A claimant may 
file a claim with the agency employing the claimant during the claim 
period or with OPM regarding matters arising under the Act if, during 
the entire claim period, the claimant--
    (1) Was not a member of a bargaining unit, or
    (2) Was a member of a bargaining unit not covered by a collective 
bargaining agreement, or
    (3) Was a member of a bargaining unit covered by a collective 
bargaining agreement that specifically excluded matters under the Act 
from the scope of the negotiated grievance procedure.
    (c) Judicial review. Nothing in this subpart limits the right of a 
claimant to bring an action in an appropriate United States court. OPM 
will not decide an FLSA claim that is in litigation.


Sec. 551.704  Claimant's representative.

    A claimant may designate a representative to assist in preparing or 
presenting a claim. The claimant must designate the representative in 
writing. A representative has no right to participate in OPM fact-
finding. An agency may disallow a claimant's representative who is a 
Federal employee in any of the following circumstances:
    (a) When the individual's activities as a representative would 
cause a conflict of interest or position;
    (b) When the designated representative cannot be released from his 
or her official duties because of the priority needs of the Government; 
or
    (c) When the release of the designated representative would give 
rise to unreasonable costs to the Government.


Sec. 551.705  Form and content of an FLSA claim.

    (a) FLSA claim filed with agency. An FLSA claim filed with an 
agency should be made according to appropriate agency procedures. At 
the discretion of the agency, the agency may forward the claim to OPM 
on the claimant's behalf. The claimant is responsible for ensuring that 
OPM receives all the information requested in paragraph (b) of this 
section.
    (b) FLSA claim filed with OPM. An FLSA claim filed with OPM must be 
made in writing and must be signed by the claimant or the claimant's 
representative. Relevant information may be submitted to OPM at any 
time following the initial submission of a claim to OPM and prior to 
OPM's decision on the claim. The claim must include the following:
    (1) The identity of the claimant (see Sec. 551.706(a)(2) regarding 
requesting confidentiality) and any designated representative, the 
agency employing the claimant during the claim period, the position 
(job title, series, and grade) occupied by the claimant during the 
claim period, and the current mailing address, commercial telephone 
number, and facsimile machine number, if available, of the claimant and 
any designated representative;
    (2) A description of the nature of the claim and the specific 
issues or incidents giving rise to the claim, including the time period 
covered by the claim;
    (3) A description of actions taken by the claimant to resolve the 
claim within the agency and the results of any actions taken;
    (4) A copy of any relevant decision or written response by the 
agency;
    (5) Evidence available to the claimant or the claimant's designated 
representative which supports the claim, including the identity, 
commercial telephone number, and location of other individuals who may 
be able to provide information relating to the claim;
    (6) The remedy sought by the claimant;
    (7) Evidence, if available, that the claim period was preserved in 
accordance with Sec. 551.702. The date the claim is received by the 
agency or OPM becomes the date on which the claim period is preserved;
    (8) A statement from the claimant that he or she was or was not a 
member of a collective bargaining unit at any time during the claim 
period;
    (9) If the claimant was a member of a bargaining unit, a statement 
from the claimant that he or she was or was not covered by a negotiated 
grievance procedure at any time during the claim period, and if 
covered, whether that procedure specifically excluded the claim from 
the scope of the negotiated grievance procedure;
    (10) A statement from the claimant that he or she has or has not 
filed an action in an appropriate United States court; and
    (11) Any other information that the claimant believes OPM should 
consider.

[[Page 45075]]

Sec. 551.706  Responsibilities.

    (a) Claimant.-- (1) Providing information to OPM. For all FLSA 
claims, the claimant or claimant's designated representative must 
provide any additional information requested by OPM within 15 workdays 
after the date of the request, unless OPM grants a longer period of 
time in which to provide the requested information. The disclosure of 
information by a claimant is voluntary. However, OPM may be unable to 
render a decision on a claim without the information requested. In such 
a case, the claim will be denied without further action being taken by 
OPM. In the case of an FLSA pay claim, it is the claimant's 
responsibility to provide evidence that the claim period was preserved 
in accordance with Sec. 551.702 and of the liability of the agency and 
the claimant's right to payment.
    (2) Requesting confidentiality. If the claimant wishes the claim to 
be treated confidentially, the claim must specifically request that the 
identity of the claimant not be revealed to the agency. Witnesses or 
other sources may also request confidentiality. OPM will make every 
effort to conduct its investigation in a way to maintain 
confidentiality. If OPM is unable to obtain sufficient information to 
render a decision and preserve the requested confidentiality, OPM will 
notify the claimant that the claim will be denied with no further 
action by OPM unless the claimant voluntarily provides written 
authorization for his or her name to be revealed.
    (b) Agency. (1) In FLSA exemption status determination claims, the 
burden of proof rests with the agency that asserts the FLSA exemption.
    (2) The agency must provide the claimant with a written 
acknowledgment of the date the claim was received.
    (3) The agency must provide any information requested by OPM within 
15 workdays after the date of the request, unless OPM grants a longer 
period of time in which to provide the requested information.


Sec. 551.707  Withdrawal or denial of an FLSA claim.

    (a) Withdrawal. A claimant or the claimant's representative may 
withdraw a claim at any time prior to the issuance of an OPM FLSA claim 
decision by providing written notice to the OPM office where the claim 
was filed.
    (b) Denial. OPM may, at its discretion, deny an FLSA claim if the 
claimant or the claimant's designated representative fails to provide 
requested information within 15 workdays after the date of the request, 
unless OPM grants a longer period of time in which to provide the 
requested information. OPM may, at its discretion, reconsider a denied 
claim on a showing that circumstances beyond the claimant's control 
prevented pursuit of the claim.


Sec. 551.708  Finality and effect of OPM FLSA claim decision.

    OPM will send an FLSA claim decision to the claimant or the 
claimant's representative and the agency. An FLSA claim decision made 
by OPM is final. There is no further right of administrative appeal. At 
its discretion, OPM may reconsider a decision upon a showing that 
material information was not considered or there was a material error 
of law, regulation, or fact in the original decision. A decision by OPM 
under the Act is binding on all administrative, certifying, payroll, 
disbursing, and accounting officials of agencies for which OPM 
administers the Act. Upon receipt of a decision, the agency employing 
the claimant during the claim period must take all necessary steps to 
comply with the decision, including adherence with compliance 
instructions provided with the decision. All compliance actions must be 
completed within the time specified in the decision, unless an 
extension of time is requested by the agency and granted by OPM. The 
agency should identify all similarly situated current and, to the 
extent possible, former employees, ensure that they are treated in a 
manner consistent with the decision, and inform them in writing of 
their right to file an FLSA claim with the agency or OPM.


Sec. 551.709  Availability of information.

    (a) Except when the claimant has requested confidentiality, the 
agency and the claimant must provide to each other a copy of all 
information submitted with respect to the claim.
    (b) When a claimant has not requested confidentiality, OPM will 
disclose to the parties concerned the information contained in an FLSA 
claim file. When a claimant has requested confidentiality, OPM will 
delete any information identifying the claimant. For the purposes of 
this subpart, the parties concerned means the claimant, any 
representative designated in writing, and any representative of the 
agency or OPM involved in the proceeding.
    (c) Except when the claimant has requested confidentiality or the 
disclosure would constitute a clearly unwarranted invasion of personal 
privacy, OPM, upon a request which identifies the individual from whose 
file the information is sought, will disclose the following information 
from a claim file to a member of the public:
    (1) Confirmation of the name of the individual from whose file the 
information is sought and the names of the other parties concerned;
    (2) The remedy sought;
    (3) The status of the claim;
    (4) The decision on the claim; and
    (5) With the consent of the parties concerned, other reasonably 
identified information from the file.


Sec. 551.710  Where to file an FLSA claim with OPM.

    An FLSA claim must be filed with the OPM office serving the area 
where the cause or basis of the claim occurred. Following are OPM 
addresses and service areas.

OPM Atlanta Oversight Division

     75 Spring Street SW., Suite 972, Atlanta, GA 30303-3109.
    Alabama, Florida, Georgia, Mississippi, North Carolina, South 
Carolina, Tennessee, Virginia (except the Virginia locations listed 
under the Washington, DC Oversight Division).

OPM Chicago Oversight Division

     230 S. Dearborn Street, DPN 30-6, Chicago, IL 60604-1687.
    Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, 
Missouri, Nebraska, North Dakota, Ohio, South Dakota, West Virginia, 
Wisconsin.

OPM Dallas Oversight Division

     1100 Commerce Street, Room 4C22, Dallas, TX 75242-9968.
    Arizona, Arkansas, Colorado, Louisiana, Montana, New Mexico, 
Oklahoma, Texas, Utah, Wyoming.

OPM Philadelphia Oversight Division

     600 Arch Street, Room 3400, Philadelphia, PA 19106-1596.
    Connecticut, Delaware, Maine, Maryland (except the Maryland 
locations listed under the Washington, DC Oversight Division), 
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, 
Rhode Island, Vermont, Puerto Rico, Virgin Islands.

OPM San Francisco Oversight Division

     120 Howard Street, Room 760, San Francisco, CA 94105-0001.
    Alaska, California, Hawaii, Idaho, Nevada, Oregon, Washington, 
Pacific Ocean Area

OPM Washington, DC Oversight Division

     1900 E Street NW., Room 7675, Washington, DC 20415-0001.

The District of Columbia

    In Maryland: the counties of Charles, Montgomery, and Prince 
George's.
    In Virginia: the counties of Arlington, Fairfax, King George, 
Loudoun, Prince William, and Stafford; the cities of Alexandria, 
Fairfax, Falls Church, Manassas, and Manassas Park; and any overseas 
area

[[Page 45076]]

not listed in the service area of another Oversight division.

[FR Doc. 97-22390 Filed 8-22-97; 8:45 am]
BILLING CODE 6325-01-P