[Federal Register Volume 62, Number 236 (Tuesday, December 9, 1997)]
[Rules and Regulations]
[Pages 64956-64966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32009]



[[Page 64955]]

_______________________________________________________________________

Part III





Department of Labor





_______________________________________________________________________



Wage and Hour Division



29 CFR Part 520 et al.



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

  Federal Register / Vol. 62, No. 236 / Tuesday, December 9, 1997 / 
Rules and Regulations  

[[Page 64956]]



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: Final rule.

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

SUMMARY: The Department of Labor is removing the regulation found at 29 
CFR Part 527 and consolidating 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 provided 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 were duplicative and 
have been 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 remain generally unchanged.

EFFECTIVE DATE: These rules are effective on February 9, 1998.

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 this final rule in alternative formats may be obtained by calling 
(202) 219-7640, (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 final rule contains reporting or recordkeeping requirements 
subject to the Paperwork Reduction Act of 1995 (Pub. L. 104-13). The 
reporting requirements contained in Secs. 520.403, 520.501 and 520.502 
of this rule were submitted to and approved by the Office of Management 
and Budget (OMB) under the Paperwork Reduction Act of 1995 and assigned 
OMB Control No. 1215-0192.
    No comments were received from the public regarding this burden or 
these regulatory provisions.
    No substantive changes have been made in this final rule which 
affect the information collection and recordkeeping requirements and 
estimated burdens previously submitted to OMB and discussed in the 
proposed rule.

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 which are the subject of this final rule, 
formerly found at 29 CFR Parts 520, 521, 522, 523, and 527, were 
promulgated pursuant to the 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 former Part 522, now consolidated into Part 520, learners 
could be employed at less than the applicable minimum wage in certain 
skilled occupations. Certificates specified 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 were 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 could not create unfair competitive labor cost advantages nor 
depress wages or working standards for experienced workers in 
comparable work. Employers submitted separate applications for each 
establishment and demonstrated that efforts to hire experienced workers 
were ineffective.
    Under former Part 520, student-learners were pupils at least 
sixteen years old (eighteen if employed in certain hazardous 
occupations) who were enrolled in an accredited school, college or 
university and who were employed part-time under a bona fide vocational 
training program approved by a State board of vocational education. 
Certified student-learners were required to be paid no less than 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 could 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 had to be submitted for each student-
learner, describing the vocational training program in detail and 
demonstrating how it related to the jobs to be performed by the 
student-learner.
    Under former Part 527, student-workers were pupils enrolled in an 
educational institution who were at least 16 years old (18 if employed 
in certain hazardous occupations) and who were 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 were required to be paid 
no less than 75 percent of the applicable minimum wage. Certificates 
specified the number of students authorized on any day, the rates 
permitted during the training period, and length of the training period 
for each occupation (which were not to exceed one school year). 
Certificates were submitted by each educational institution seeking to 
employ student-workers. As discussed in Section IV of

[[Page 64957]]

this preamble, Part 527 has been deleted pursuant to this final rule.
    Under former Part 521, now consolidated into Part 520, apprentices 
at least sixteen years old (eighteen if employed in certain hazardous 
occupations) could be employed at less than the applicable minimum wage 
in skilled trades under registered apprenticeship programs. Apprentices 
were required to receive a progressively increasing schedule of wages 
which averaged 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 former Part 523, now consolidated into Part 520, messengers 
employed primarily to deliver letters and messages could be paid 
subminimum wages to prevent curtailment of employment opportunities. 
Applications could 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. No 
applications to employ learners have been received since 1995. The use 
of student-learner certificates rose to over 17,000 in 1975, but has 
fallen in recent years. Currently fewer 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 
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. Comments to the Proposed Rule

    A Proposed Rule with a 60-day comment period was published in the 
Federal Register on February 14, 1997 (62 FR 7094). No public comments 
were received in response to the Proposed Rule. The Department is 
adopting that proposal with only one minor editorial modification in 
this final rule. That modification, the removal of the word 
``agreement'' before the word ``contains'' in the definition of 
apprenticeship agreement, is being done to correct an inadvertent error 
and remove any confusion.

IV. Discussion

    This final rule removes the regulation at 29 CFR Part 527, 
Employment of Student-Workers, and reserves 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. Part 527 is 
therefore unnecessary.
    Additionally, this final rule merges the regulations formerly at 29 
CFR Parts 520, 521, 522, and 523 into one new Part 520 and reserves the 
remaining three sections. This final rule also 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 former regulations are 
maintained in this revision. The language and context of the 
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 final rule, where 
possible, supplants the language containing specific requirements with 
more general criteria common to all of the programs. The Department 
does not expect to increase the number of certificates issued under 
this final rule because the economic conditions stated above are 
unchanged.
    The specific criteria formerly 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 are now 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.

[[Page 64958]]

    The final 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. The final rule also 
removes the different learner program standards for new plants and 
established plants.
    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 final rule 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 final 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 final 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). The Department has 
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 final 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, the Department 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 final rule 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 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 final 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 John R. Fraser, Acting Administrator, Wage and Hour 
Division, Employment Standards Administration, U.S. Department of 
Labor.

List of Subjects

29 CFR Part 520

    Clothing, Electronic products, Manpower training programs, 
Messengers, Minimum wages, Students, Vocational education.

29 CFR Part 521

    Manpower training programs, Minimum wages, Vocational education, 
Wage and Hour Division.

29 CFR Part 522

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

29 CFR Part 523

    Minimum wage, Messengers, Wage and Hour Division.

29 CFR Part 527

    Minimum wages, Students, Wage and Hour Division.

    Signed at Washington, D.C. on the 2nd day of December, 1997.
John R. Fraser,
Acting Administrator, 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 amended as 
set forth below.

PART 521--[REMOVED AND RESERVED]

    1.-2. Under the authority of Sec. 14, 52 Stat. 1068, as amended, 29 
U.S.C. 214, Title 29, Code of Federal Regulations is 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 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,

[[Page 64959]]

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

520.300  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?
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 section 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 section 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.

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

[[Page 64960]]

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 Regulations, 29 CFR Part 29.
    (e) Additional terms used in this part are defined in subpart C of 
this part.


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 of this part and student-
learners in subpart E of this part.


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 recordkeeping 
requirements (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 of this 
part).
    (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.


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


Sec. 520.300  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 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

[[Page 64961]]

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 or greater than 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) of FLSA.
    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 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.

[[Page 64962]]

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
    (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 
learners(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;
    (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.

(The information collection requirements contained in paragraphs 
(a), (b) and (c) were approved by the Office of Management and 
Budget under control number 1215-0192.)


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

[[Page 64963]]

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.

(The information collection requirements contained in paragraphs 
(a), (b) and (c) were approved by the Office of Management and 
Budget under control number 1215-0192.)


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 of this part.
    (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 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 other 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 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

[[Page 64964]]

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 section 520.404 of this 
part still prevail.


Sec. 520.412  What records, in addition to those required by Part 516 
of this chapter and section 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:
    (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.

(The information collection requirements contained in paragraph (b) 
were approved by the Office of Management and Budget under control 
number 1215-0192.)


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 of this subpart;

[[Page 64965]]

    (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.

(The information collection requirements contained in paragraphs 
(a), (b), (c), (d), (e), (f), (g), (h) and (i) were approved by the 
Office of Management and Budget under control number 1215-0192.)


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 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 of this part 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

[[Page 64966]]

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 section 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. 97-32009 Filed 12-8-97; 8:45 am]
BILLING CODE 4510-27-P