[Federal Register Volume 72, Number 179 (Monday, September 17, 2007)]
[Rules and Regulations]
[Pages 52753-52776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-18027]



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  Federal Register / Vol. 72, No. 179 / Monday, September 17, 2007 / 
Rules and Regulations  

[[Page 52753]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 551

RIN 3206-AK89


Pay Administration Under the Fair Labor Standards Act

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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

SUMMARY: The Office of Personnel Management (OPM) is issuing a final 
rule to amend the pay administration regulations issued under the Fair 
Labor Standards Act of 1938. These regulations apply to all employees 
in agencies who are under OPM's jurisdiction for FLSA purposes.

DATES: The regulations are effective October 17, 2007.

FOR FURTHER INFORMATION CONTACT: Georgeanna Emery by e-mail at 
[email protected], by telephone at 202-606-3600, or by fax at 202-606-
4891.

SUPPLEMENTARY INFORMATION: On May 26, 2006, the Office of Personnel 
Management (OPM) published proposed regulations (71 FR 30301) to amend 
5 CFR, part 551, subparts A, B, F and G. The changes were proposed to 
update and harmonize OPM's regulations with the Department of Labor's 
(DoL) regulations issued under the Fair Labor Standards Act of 1938 
(referred to as ``FLSA'' or ``the Act''). In addition, we provided in 
the proposed regulations a clearer understanding of coverage for 
executive, administrative, and professional employees by adding 
definitions and examples.
    The 60-day comment period for the proposed regulations ended on 
July 25, 2006. During the period, OPM received comments from 11 Federal 
agencies, five labor organizations, and two individuals.
    A number of the comments support OPM's adherence to and adoption of 
DoL's language in our regulations and the increased ease of applying 
the FLSA to Federal employees. Commenters noted that the added 
explanatory materials improved clarity and reduced the potential for 
erroneous FLSA exemption determinations.
    Respondents also identified areas of concern and provided specific 
recommendations to improve the proposed revisions. We addressed those 
comments and recommendations beginning with general and/or global 
comments, followed by a section-by-section discussion. We also made 
minor editorial corrections which do not affect the content of the 
regulations.

General Comments

    One agency suggested we include a discussion in the preamble 
regarding OPM's expectations with regard to how the new regulations 
will impact coverage determinations properly made under the previous 
regulations.
    As indicated in the proposed regulations, with the exception of the 
adoption of the revised criteria in the salary basis test, these 
changes update and clarify but do not fundamentally change the 
regulations in place as applied consistently with controlling case law. 
Therefore, we do not anticipate changes in the exemption status of the 
vast majority of Federal employees to whom the current regulations were 
properly applied.
    The proposed regulations eliminated the 80 percent test as a basis 
for FLSA coverage. One labor organization commented that the 80 percent 
test should remain in the regulations as it permits all employees who 
perform significant amounts of non-exempt work to benefit from FLSA 
protection. An agency noted that a court or arbitrator often focuses on 
the amount of time an employee spends on exempt and closely related 
duties in determining if an employee is covered by FLSA regulations. 
That agency suggested we include a discussion highlighting the 
elimination of the 80 percent test requirement and emphasizing the 
potential importance of the amount of time an employee spends 
performing exempt functions to support an agency's exemption 
determination.
    Controlling case law has made retention of the 80 percent 
requirement unsupportable. Federal courts have found many employees to 
be exempt who spent less than 50 percent of their time performing 
exempt work. See, e.g., Jones v. Virginia Oil Co., 69 Fed. Appx. 633 
(4th Cir. 2003) (management was found to be the ``primary duty'' of an 
employee who spent 75 to 80 percent of her time on basic line-worker 
tasks); Murray v. Stuckey's, Inc., 939 F.2d 614 (8th Cir. 1991) 
(manager met the ``primary duty'' test despite spending 65 to 90 
percent of his time in non-management duties); Glefke v. K.F.C. Take 
Home Food Co., 1993 WL 521993 (E.D. Mich. 1993) (employee found exempt 
despite assertion that she spent less than 20 percent of time on 
managerial duties because ``the percentage of time is not determinative 
of the primary duty question, rather, it is the collective weight of 
the four factors''); and Stein v. J.C. Penney Co., 557 F. Supp. 398 
(W.D. Tenn. 1983) (employee spending 70 to 80 percent of his time on 
non-managerial work held exempt because the ``overall nature of the 
job'' is determinative, not ``the precise percentage of time involved 
in a particular type of work''). See also, Horne v. Crown Central 
Petroleum, Inc., 775 F.Supp. 189 (D.S.C. 1991); Donovan v. Burger King, 
672 F.2d 221 (1st Cir. 1982); Donovan v. Burger King, 675 F.2d 516 (2nd 
Cir. 1982).
    One agency asked that we include a discussion regarding the 
appropriateness of reviewing the classification of a position in terms 
of title, series, and grade, if an FLSA review by a third party reveals 
new information that contradicts the current classification. While a 
third party review of an FLSA coverage determination may reveal 
questions regarding the classification of the employee's work, it is 
inappropriate to apply 5 U.S.C. chapters 51 and 53 requirements to the 
regulatory process for implementing 5 CFR part 551 for employees under 
OPM's FLSA jurisdiction, as these statutory requirements have no 
bearing on FLSA exemption determinations.
    One agency recommended we revise the work aid, ``How to make 
exemption status determinations under the Fair Labor Standards Act 
(FLSA)'' to reflect changes made to the regulations. The work aid, now 
titled ``Making an FLSA Exemption Status Determination--A Work Aid'' is 
found on our Web site at http://www.opm.gov/flsa and will be updated 
once the final rule is issued.

[[Page 52754]]

    One agency expressed concern that we italicized a term not defined 
in the regulations. In this final rule, all terms listed in the 
Definitions section at Sec.  551.104 are italicized in the regulations.

Subpart A--General Provisions

Section 551.101--General

    One labor organization suggested that DoL's regulations appear to 
violate the letter or spirit of the FLSA, and while OPM's 
interpretation of the FLSA must be generally consistent with DoL's 
interpretation, OPM need not mirror DoL where doing so would violate 
the FLSA. We note that the commenter's concern is addressed in Sec.  
551.101(c). We also note that DoL's changes have gone through the 
Administrative Procedure Act (APA) review and comment process and now 
have the force of law. To the extent that OPM's regulations are 
consistent with DoL's regulations, OPM does not violate the FLSA; 
hence, the labor organization's comment is misplaced. We have provided 
examples to the extent we believe necessary to properly apply the 
regulations.
    One agency recommended we add an explanation that the law does not 
require OPM's regulations to comply verbatim with DoL's administration 
of the Act. The agency maintains that doing so will alert Code of 
Federal Regulations users that while administration of the Act by OPM 
and DOL is similar in some aspects, marked differences remain. We 
believe the first sentence in Sec.  551.101(c) addresses the agency's 
concern regarding marked differences: ``OPM's administration of the Act 
must comply with the terms of the Act but the law does not require 
OPM's regulations to be identical to the Department of Labor's FLSA 
regulations.''
    One labor organization commented that this section fails to state 
why and when OPM regulations may diverge from DoL regulations, and that 
it also fails to clarify that OPM regulations cannot apply FLSA 
exemptions more broadly than DoL regulations. Citing a Court of Appeals 
ruling that OPM regulations could not make it more difficult for 
Federal employees to qualify for overtime than DoL regulations (AFGE v. 
OPM, 821 F.2d 761, 771 (D.C. Cir. 1987)), the commenter expressed the 
concern that OPM regulations can and should be more specific than DoL 
regulations in narrowly defining exemptions. We refer the commenter to 
Billings v. U.S., 322 F.3d 1328 (Fed. Cir. 2003), which places the 
labor organization's concern in the appropriate context. As stated in 
Billings, ``AFGE stands for the unremarkable proposition that, under 
the same facts, an employee in federal employment should receive the 
same overtime compensation as an employee in the private sector. In 
this case, however, the appellants are not employed under the same 
facts applicable to the private sector. Appellants as federal 
employees, are subject to Title 5 suspensions not present in the 
private sector.'' We also note that the Court of Federal Claims in 
Adams v. U.S., 40 Fed. Cl. 303 (1998) found OPM's regulation to be 
valid despite the fact it did not contain a salary-basis test and, 
therefore, was inconsistent with DoL regulations. Rather, the court 
held that OPM's regulation was a reasonable interpretation of the FLSA 
within the Federal sector.

Section 551.104--Definitions

    We received a number of comments regarding the proposed changes we 
made to this section. Some respondents had concerns with particular 
definitions, while others commented on our decision to move terms from 
this section and place them where the concept is addressed in the 
regulation.
    One agency recommended that in the definitions section, we earmark 
those definitions that have been removed and addressed as concepts in 
other sections of the provisions. Like DoL, we have moved these terms 
and concepts in order to streamline, update, and clarify these complex 
regulations, as well as reduce unnecessary duplication and 
redundancies. We provided such information in the proposed rules to 
alert current users to the change. Therefore, we decline to adopt the 
recommendation to cross-reference the location of terms in these final 
regulations.
    In addition to the general concerns listed above, we received 
specific questions relating to the following definitions:
Customarily and Regularly
    One agency suggested we clarify the definition to make clear that 
tasks occurring on a regular and recurring basis, even if they do not 
occur every workweek, meet the definition of the term customarily and 
regularly. We did not adopt this suggestion because we do not believe 
it adds to the understanding of the term.
    One labor organization expressed the concern that changes in the 
definition weaken the protections of the FLSA by expanding the 
executive exemption criteria at Sec.  551.205. They maintain that 
removing the phrase ``day-to-day'' from the definition permits 
employees who only occasionally exercise executive discretion to meet 
the exemption criteria. These regulations expressly prohibit the 
interpretation put forward by the labor organization since the 
definition states that the ``frequency must be greater than 
occasional'' and `` * * * includes work normally and recurrently 
performed every workweek.'' We do not believe exemption criteria for 
executives will be expanded and decline to change the definition as 
requested.
Discretion and Independent Judgment
    One agency was concerned that we removed the definition of this 
term when, in fact, we did not. Due to the extensive discussion 
regarding the administrative exemption, we placed the term with the 
administrative exemption criteria at Sec.  551.206. We have included 
the term in alphabetical order in the definition section at Sec.  
551.104 with a cross reference to Sec.  551.206.
Educational Establishment
    One agency suggested we provide additional information regarding 
when a training facility will qualify as an Educational establishment. 
Training facilities vary widely within the Federal sector and are found 
in a number of different settings. These settings range from Department 
of Defense-operated primary and secondary schools and military 
technical training schools, to law enforcement training centers and 
adult training facilities operated by a variety of Federal agencies. 
Because of this wide variability in facilities, we do not believe 
further detailed discussion will add materially to a better 
understanding of the term.
Exempt Area
    In accordance with information obtained from the Department of the 
Interior's Office of Insular Affairs, we have added the Commonwealth of 
the Northern Mariana Islands, a territory under the jurisdiction of the 
United States, to the list of exclusions from the definition of exempt 
areas.
FLSA Nonexempt
    One agency commented that the terminology related to who is and who 
is not covered by the FLSA is confusing. The agency explained that if 
the term ``FLSA exempt'' means not covered by the provisions of the 
Act, then the term ``FLSA nonexempt'' means FLSA ``not-not covered.'' 
The agency recommended we replace the term ``FLSA nonexempt'' and 
insert a new term ``FLSA covered.'' The commenter noted that exempt 
employees are exempt from the

[[Page 52755]]

overtime and minimum wage provisions of the Act. We note that exempt 
employees are covered by other provisions of the Act. We decline to 
adopt this recommendation since the proposed terminology is 
inconsistent with that used by the Department of Labor.
Formulate, Affect, Interpret, or Implement Management Policies or 
Operating Practices
    One labor organization commented that our definition with respect 
to performing work involving management policies or operating 
procedures in relation to broad national goals expressed in statutes or 
Executive orders is ``overboard,'' as virtually all Government 
employees endeavor to comply with broad national goals set by statute 
or Executive order. Consequently, the labor organization recommended we 
revise the definition to clarify that administrative work involves 
compliance only with management's operational policies. We agree with 
the labor organization's concern that administrative work involves 
compliance only with management's operational policies rather than 
compliance with substantive statutes; however, this issue is already 
addressed in Sec.  551.206(b)(1) which directs the user to consider if 
an employee ``has authority to formulate, affect, interpret, or 
implement management policies or operating practices.'' Therefore, we 
decline to revise this definition.
    Two labor organizations stated that adding the words ``interpret,'' 
``implement,'' and ``operating practices,'' to the definition broadens 
the coverage of the term to be inconsistent with the Act. This 
definition is consistent with the current DoL definition and does not 
change the underlying meaning of the regulation; therefore, we decline 
to revise this definition.
Management
    One labor organization suggested changes in the definition are 
problematic because the proposed definition eliminates the distinction 
between production and support services. We address this distinction in 
Sec.  551.206, and we consider its placement there more appropriate 
than in the definition of management.
    One labor organization suggested we amend the definition to clarify 
a team leader does not become exempt merely by apportioning work among 
the team members. They recommended we expressly state what the 
administrative provision indirectly says in describing which leaders 
qualify for exemption. The labor organization asserts that, just as in 
the private sector (see 29 CFR 541.203(c)), team leaders are exempt 
administrators only if they perform such administration functions as 
``acquisitions, negotiating real estate transactions or collective 
bargaining agreements, designing and implementing productivity 
improvements'' or similar work as specified in Sec.  551.206(i). While 
we understand the labor organization's concern regarding the misreading 
of apportioning work, we must rely on the reader to understand that 
selected phrases of a definition must be read within the context of the 
entirety of the regulations, and the full intent of the definition must 
be applied. Therefore, we do not find the proposed expanded discussion 
to be necessary. Further, we do not agree with the commenter's 
characterization of Sec.  551.206(i). Team leaders who lead major 
projects and who function as an extension of management for matters of 
significance to the employer are likely to meet the administrative 
exemption. Section 551.206(i) must be read in conjunction with Sec.  
551.206(b)(2) (i.e., an employee may carry out major assignments in 
conducting the operations of the organization), which does not limit 
exemption to leading staff functions.
Nonexempt Area
    In accordance with information obtained from the Department of the 
Interior's Office of Insular Affairs, we have added the Commonwealth of 
the Northern Mariana Islands, a territory under the jurisdiction of the 
United States, to the list of nonexempt areas.
Primary Duty
    One agency recommended we add to this definition the requirement 
that a duty must occupy at least 25 percent of the employee's time. 
This definition, for the most part, is carried over from our previous 
regulation with specific requirements to ensure that users do not focus 
on a very small percentage of time when it would be highly unlikely 
that the duty would support the basis for primary duty. The definition 
is consistent with the discussion of the 80 percent test in the General 
Comments section of this preamble. Therefore, we decline to adopt this 
recommendation.
Recognized Organization Unit
    One labor organization viewed the definition of recognized 
organizational unit as problematic because it suggests even a team 
leader with little actual supervisory function can be considered the 
lead of a recognized organizational unit. The labor organization 
maintained the definition should clearly state that a recognized 
organizational unit does not consist of temporary units whose 
composition or purpose is constantly in flux. We believe the definition 
fully addresses these concerns. Again, we must rely on the user to 
understand that recognized organizational unit must be read in 
conjunction with the other criteria under the executive exemption at 
Sec.  551.205 (i.e., a leader will not meet the executive exemption if 
that employee does not exercise the full range of management and work 
control responsibilities required to meet the requirements of this 
section).
Trainee
    One agency recommended we further clarify the definition by 
supplementing it with additional work examples and illustrations. The 
agency believes the revised definition of ``trainee'' at paragraphs (1) 
through (5) implies application to certain employment categories/
classifications operative in Federal service. We believe the definition 
makes clear that a student officially appointed to a Government 
position is not a trainee for purposes of the FLSA. The definition of 
trainee for purposes of the FLSA is materially different from the 
meaning of ``trainee'' for many purposes of title 5, U.S.C., and 
similar human resources statutes.
Worktime
    One labor organization suggested that, assuming removal of the 80/
20 test is warranted, OPM should delete as superfluous the Sec.  
551.104 definitions relating to ``worktime.'' They also suggested we 
remove the word ``worktime'' from Sec.  551.101(a), as that paragraph 
contains no substantive content, but merely refers to the FLSA's 
delineation of ``administrative procedures by which covered worktime 
must be compensated.'' The labor organization maintains that OPM should 
replace the word ``worktime'' with the statutory phrase to refer to 
FLSA delineation of procedures for compensating ``hours of work.'' The 
labor organization is of the opinion that such a change would harmonize 
with DoL's regulations. We made no substantive change in the definition 
of worktime itself because these regulations are intended to address 
FLSA coverage issues and not hours of work. Definitions relating to 
worktime are not used in defining hours of work but are used solely in 
determining FLSA exemption status; therefore, we decline to make this 
change.

[[Page 52756]]

Subpart B--Exemptions and Exclusions

    We received several requests to move the sections on specific 
professional exemptions from the end of subpart B and place them 
directly following the professional exemption criteria in this section. 
Based on these comments, we have reordered the sections, and in this 
final rule, those sections formerly numbered Sec. Sec.  551.214 through 
551.216 in the proposed rule, containing information relating to 
specific professional exemptions, have been placed directly behind 
Sec.  551.207 Professional exemption criteria and renumbered as 
Sec. Sec.  551.208 through 551.210. The remaining sections have been 
renumbered accordingly.

Section 551.201--Agency Authority

    One labor organization suggested this section (as well as Sec.  
551.202) would be strengthened if it emphasized reasonable doubt 
regarding exemption status should be resolved in favor of nonexemption. 
This concern is addressed by Sec.  551.202(d) which states, ``If there 
is a reasonable doubt as to whether an employee meets the criteria for 
exemption, the employee will be designated FLSA nonexempt.''

Section 551.202--General Principles

    We received several comments regarding revised paragraph (e), which 
clarifies that the designation of an employee as FLSA exempt or 
nonexempt ultimately rests on the duties actually performed by the 
employee. The occupational or organizational title alone is not 
sufficient for an FLSA exemption status determination.
    Three agencies commented on the requirement that the designation of 
an employee as FLSA exempt or nonexempt ultimately rests on the duties 
actually performed by the employee. We fully agree that the coverage 
determination must be based on the actual work performed by the 
employee. The protective nature and purpose of the FLSA requires 
agencies to assure such accuracy on a continuing basis. The same 
responsibility holds true for existing and newly established positions. 
While we appreciate the recommendations received to clarify this 
section, we have concluded that our statement at Sec.  551.202(e) will 
make the requirements clear to those who apply these regulations; we do 
not believe any additional guidance is required.
    One agency disagreed with our statement at Sec.  551.202(e) that 
``established position descriptions and titles may assist in making 
initial FLSA exemption determinations'' and saw no need for further 
review if a position description accurately describes the duties 
performed by the employee. Additionally, the agency questioned how 
exemption status is determined for newly established unencumbered 
positions and questioned whether proposed duties should be used to make 
an FLSA coverage determination. Finally, the agency recommended adding 
to the end of this section, ``on a regular and recurring basis over a 
period of more than 30 consecutive calendar days.'' We understand the 
commenter's concern about making an FLSA coverage determination on 
newly established positions. In such cases, the determination must be 
based on the description of work because no employee is actually 
performing the work. However, once an employee is placed in the 
position, the agency is responsible for ensuring that the FLSA 
designation is accurate and remains accurate, based upon the actual 
work performed by that employee. Thus, we decline to insert the 
proposed phrase.
    One agency found the second sentence of Sec.  551.202(f) difficult 
to understand. We did not propose changes to this section. The purpose 
of this section is to recognize that employees may perform a 
combination of exempt duties and may qualify for exemption. While one 
of the exemption criteria may not be met in its entirety, the work may 
meet another which serves as the basis for the exemption determination. 
To respond to the request for clarification and to further harmonize 
with DoL's regulations at 29 CFR 541.708, we have amended Sec.  
551.202(f) to explain that an employee whose primary duty involves a 
combination of exempt administrative and exempt executive work may 
qualify for exemption; i.e., work that is exempt under one section of 
this part will not defeat the exemption under any other section.
    One labor organization had concerns with the first sentence of 
Sec.  551.202(h) in the proposed rule which read: ``Although it is 
normally feasible and more convenient to identify the exemption 
category, this is not essential.'' They stated that while an employee's 
primary duty may involve two categories which are intermingled and 
difficult to segregate, an employer always bears the burden of 
establishing the basis for an exempt classification. The labor 
organization maintained that OPM should adhere to the principle that 
employers must identify any and all exemption categories used to exempt 
a particular job. We did not propose a change to this section. The 
first sentence of Sec.  551.202(h) accurately covers, for example, the 
professional employee who may also meet the executive exemption. In 
this case it would not be necessary to identify which one of the two 
served as the specific basis for the exemption determination because 
both exemptions would apply. However, to clarify this concept, we have 
revised the first sentence to read, ``Although it is normally feasible 
and more convenient to identify a single exemption category, this is 
not always appropriate.'' We have also added a sentence at the end of 
Sec.  551.202(h) to require that, ``The agency is responsible for 
showing and documenting that the work as a whole clearly meets one or 
more of the exemption criteria.''

Section 551.203--Salary-Based Nonexemption

    A number of commenters opposed our adoption of DoL's $23,660 
minimum salary level test as a nonexemption threshold. One labor 
organization requested we provide a reasoned explanation for the change 
in our position after previously rejecting a salary test as ill-suited 
for use with the Government's classification system. This labor 
organization, along with another labor organization, stated that OPM is 
not bound by law to adopt DoL's approach to this issue, since Federal 
salaries are not impacted by the large retail sector that DoL must 
consider in making rules, and therefore, few Federal employees would 
benefit from this salary level test. OPM regulations governing the 
Federal sector must be as consistent as practicable with DoL's 
regulations governing the private sector.
    Many positions previously covered by the unitary general schedule 
(GS) system are now covered by alternative pay systems. The GS system 
to which our previous regulations were linked no longer covers large 
numbers of Federal employees under OPM's FLSA jurisdiction. Further, it 
is contemplated that additional groups of Federal employees may be 
removed from coverage under the GS system in the future. Therefore, 
direct linkage to GS grade levels is of diminishing utility to the FLSA 
exemption determination process. Furthermore, concerns that lower 
graded nonsupervisory employees who meet the minimum salary level 
threshold will become exempt are misplaced. As noted in Sec.  
551.204(a), nonsupervisory clerical and lower-graded technical 
employees will remain nonexempt because they will not meet any of the 
exemption criteria.
    When the FLSA was extended to the Federal sector in 1974, GS-5 and 
GS-6 supervisory positions exceeded the minimum salary level test. In 
December

[[Page 52757]]

1997, OPM issued subsequent regulations (see 62 FR 67238, December 23, 
1997). At that time, all supervisory GS-5 and GS-6 positions still 
received annual salaries substantially higher than the minimum salary 
level test. These positions, and prevailing rate first-level 
supervisory positions, were also affected by the 80 percent test. These 
conditions made use of the minimum salary level test in 1974 and 1997 
moot.
    As discussed in the General Comments section of this preamble, we 
are no longer using the 80 percent test based on controlling case law. 
Also, DoL raised the minimum salary test to the point where some 
nonappropriated fund instrumentality positions might meet the executive 
exemption test, but would fail to meet the minimum salary threshold of 
$23,660. In adopting the minimum salary test, these lower-salaried 
employees will continue to have their nonexempt status protected, 
thereby assuring a result consistent with DoL's regulations. The fact 
that a small number of positions are affected does not diminish our 
responsibility to ensure these employees receive any and all 
protections afforded by the Act and its implementing regulations. 
Nevertheless, we view this minimum salary threshold as transitory and 
believe it will likely become obsolete given the small number of 
employees potentially affected at the present time, and the likely 
continued rise in Federal salary rates.
    One labor organization expressed concern regarding OPM's use of the 
annual figure that DoL adopted for the private sector without reference 
to salary data from the Federal sector. One agency suggested that 
rather than show a specific rate of basic pay due to changes in cost of 
living and impacts of inflation, we should refer users to a Web site 
for current thresholds. OPM regulations governing the Federal sector 
must be as consistent as practicable with DoL's regulations governing 
the private sector. Therefore, we decline to make any changes.
    One agency suggested OPM use the term ``total adjusted salary'' or 
``adjusted basic pay'' in place of ``rate of basic pay'' to clarify the 
rate of pay being used for comparison purposes. We have not adopted the 
suggested terms and will continue to use ``rate of basic pay'' which is 
defined in Sec.  551.203(b) to include locality pay and certain similar 
supplements.
    The same agency also recommended we provide an explanation at Sec.  
551.203(a)(3) as to why only a `` * * * professional in the practice of 
law or medicine as prescribed in paragraphs (c) and (d) of Sec.  
551.208,'' is not covered by the salary-based nonexemption. We changed 
the language to be consistent with DoL's longstanding exclusion from 
the salary test of employees who hold a valid license or certificate 
permitting the practice of law or medicine, or any of their branches, 
and who are actually engaged in the practice thereof. This exclusion 
also applies to employees who hold the requisite degree for the general 
practice of medicine and who are engaged in an internship or residency 
program pursuant to the practice of a profession. See 29 CFR 541.600. 
We also note that such positions in the Federal Government receive 
compensation well in excess of the minimum salary level test.

Section 551.204--Nonexemption of Certain Employees

    One labor organization suggested we remove the first word 
``certain'' in Sec.  551.204(a), as it is unnecessary and confuses the 
meaning of the section. We disagree. Removal of the word ``certain'' 
from this section would overly broaden the category of nonexempt 
nonsupervisory white-collar employees. For this reason, we have not 
adopted the suggestion.
    One labor organization commented that the removal from the 
regulations of the statement that, ``A supervisory employee in the 
Federal Wage System or in other comparable wage systems is exempt only 
if the employee is an executive employee....,'' expands the exemption, 
may even implicitly suggest that all supervisory employees should be 
exempt, and is contrary to the FLSA. The labor organization contends 
these regulations should include a passage regarding the nonexemption 
of FWS supervisory employees. We find that the inclusion of the 
suggested language would be superfluous. As stated in Sec.  551.202(a), 
an employee is presumed to be FLSA nonexempt unless the employing 
agency correctly determines that the employee clearly meets one or more 
of the exemption criteria. Therefore, agencies are obligated to fully 
apply the executive exemption criteria to all supervisory positions to 
determine if they are exempt.
    One agency suggested we amend Sec.  551.204(a)(2) to include 
language to address pay banding systems. The agency recommended we add 
a particular pay band level that, in their agency, is equivalent to the 
GS-9 level. This assumes most agencies will band grades in the same 
manner as the commenting agency. As agencies generally establish their 
own pay banding schemes, our regulations permit each agency to 
determine which of its bands is equivalent to a particular level. For 
this reason, we have not adopted the suggestion.

Section 551.205--Executive Exemption Criteria

    One agency noted that there is no mention of work-planning and 
assignment responsibilities, and only a small number of personnel 
authorities are mentioned. The agency suggested that in the final 
regulations, we provide language to: (1) Clarify the importance of 
work-planning and assignment responsibilities in meeting the exemption 
criteria; and (2) clarify whether the few personnel activities 
mentioned in Sec.  551.205 are more critical to meeting the exemption 
criteria than are the others mentioned in the definition of the term 
``management'' in Sec.  551.104. The commenter noted that a floor is 
established by the specifics in Sec.  551.205(a)(2). We note this floor 
is expansive and links back directly to the term ``management'' as 
noted in Sec.  551.205(a) and defined in Sec.  551.104, and is not 
limited to hiring, firing, advancement, and promotion, but also 
pertains to any other change of employee status. Therefore, while some 
employees covered by the executive exemption may not perform each and 
every activity listed under ``management,'' there is an expectation 
that they will perform the functions listed under Sec.  551.205(a)(2). 
We decline to make the suggested change.
    One labor organization voiced concern that we removed the 
requirement for executives to regularly exercise discretion and 
independent judgment, or spend 80 percent of their time on 
``supervisory and closely related work.'' The labor organization 
requested we clarify that executives necessarily exercise the type of 
``discretion and independent judgment'' that the role explicitly 
requires. As recognized by the labor organization in their comments, we 
have included in the definition of primary duty the requirement to 
exercise discretion and independent judgment, and the definition of 
management illustrates how this judgment is applied. This issue is 
adequately addressed in Sec.  551.104 of this regulation; therefore, we 
have not made the requested change.
    One agency commented that in Sec.  551.205(a)(1), there may be 
situations where a supervisor, as a regular and recurring part of his 
or her job, may supervise only one employee. They further commented 
that the General Schedule Supervisory Guide (GSSG) does not require a 
minimum number of subordinates for a position to be classified as 
supervisory. As noted previously in this preamble, the

[[Page 52758]]

definition of ``supervisor'' for purposes of chapters 51 and 53 of 
title 5, U.S. Code, is separate and distinct from the definition for 
purposes of applying the FLSA.
    One labor organization stated that the ``scope of direction'' 
element in Sec.  551.205(a)(1) is too wide, and further commented that 
permitting exemption for employees who direct a mere two other persons 
far exceeds the purpose of the executive exemption. The labor 
organization contended that the proposed regulations more closely 
describe a group leader or working supervisor rather than an executive, 
and that a true executive position is one with a broader scope of 
control covering at least five full-time employees. We must reject the 
labor organization's request to increase the number of employees 
directed, given that this language is substantively the same as the 
existing regulations and consistent with DoL's regulatory language.
    Regarding the term ``particular weight'' in Sec.  551.205(b), one 
agency indicated it has a number of locations where supervisors direct 
the work of different groups of employees each day, because operations 
not only occur 24 hours per day, but also in several different stations 
within one location. Additionally, performance ratings may be created 
by a group of supervisors who together may have supervised each of the 
rated employees, but who may have not supervised the same group of 
employees on each workday and shift worked. The agency requested 
additional information regarding the impact on whether or not an 
employee can be an exempt executive if she or he supervises a variety 
of individuals over the course of the workweek and recommends personnel 
actions on the basis of consulting with other supervisors, all of whom 
also supervise the same group of employees on different days or shifts. 
We believe this issue is adequately addressed in Sec.  551.104 under 
the term ``recognized organizational unit'' in paragraph (3). In 
addition, the general human resources practice of designating an 
official supervisor of record, with specific delegations of 
responsibility, facilitates the application of these FLSA requirements.

Section 551.206--Administrative Exemption Criteria

    We received a number of questions and concerns from agencies and 
labor organizations regarding the interpretation and application of the 
administrative exemption criteria. Changes were made to this section 
largely to harmonize with DoL changes in the description of 
administrative work and to add examples of specific types of work 
performed in the Federal Government.
    One labor organization requested we insert the express comparison 
between staff service or support work as distinguished from production 
or line work. The labor organization maintains that we could avoid any 
confusion by reinserting language from the definition of Management or 
general business functions or supporting service in the prior 
regulations. We do not agree with the labor organization's 
recommendation to reinsert language from the definition in the prior 
regulations. However, to further clarify the distinction between staff 
and line work, we revised Sec.  551.206 by inserting ``, as 
distinguished from production functions,'' after the word 
``operations'' in the first sentence.
    One agency suggested we add language to define the minimum level of 
immediate guidelines and supervision needed to constitute discretion 
and independent judgment. We believe the examples in Sec.  551.206(b) 
provide adequate context for applying the concept of discretion and 
independent judgment.
    Two labor organizations had concerns with the concept of employees 
having the authority to formulate, affect, interpret, or implement 
management policies or operating practices. One of the labor 
organizations expressed concern that the application of Sec.  
551.206(b)(1) will exempt employees who should not be exempt, 
contending that many nonsupervisory white-collar employees perform work 
that requires them to implement or interpret management policies and 
operating practices with respect to mission-critical activities, yet 
their work is indisputably of a routine nature. One labor organization 
viewed the definition as being overly expansive. We believe the factors 
provided in Sec.  551.206(b) provide adequate context for applying the 
concept of discretion and independent judgment. In addition, Sec.  
551.206(e) makes clear that work of a routine nature will not meet the 
administrative exemption. The terminology we adopted is consistent with 
DoL's regulations (see 29 CFR 541.202(b)). We believe that when read 
and applied in the context of the regulations as a whole, the language 
is not overly broad. Therefore, we decline to modify our language.
    One agency suggested we provide an example of an exempt Federal 
administrative employee who would be involved in performing exempt 
administrative work for the employing agency's customers. We believe 
that Sec.  551.206(h) already provides an adequate description of this 
type of exempt work. Therefore, we decline to accept this suggestion.
    Two agencies suggested we clarify what constitutes ``matters of 
significance'' by adding language to clarify the scope and effect of 
the work and adding a definition of the term. We believe we have 
explained the intent of the Act by the examples provided throughout 
Sec.  551.206. In this regard, we have aligned with DoL's approach by 
describing relevant factors to consider in making the appropriate 
exemption determination.
    One labor organization asserted that in trying to address duties 
performed by employees who support workers on the production side in 
Sec.  551.206(h), we omitted the requisite language distinguishing 
administrative staff who provide operational support from nonexempt 
employees working on the production end. They contend that, as 
proposed, the paragraph creates confusion by referring to employees who 
support line managers without offering examples of nonexempt line or 
production duties. We agree with the comment and have added 
clarification at the end of Sec.  551.206(h) by inserting examples of 
investigative work that may either be exempt or nonexempt depending on 
whether it is performed as a line or staff function.
    One labor organization expressed concern that the proposed 
regulations at Sec.  551.206(h) may weaken the line versus staff 
dichotomy and by doing so, may upset decades of court precedent 
regarding this feature of the administrative exemption. We do not agree 
with the labor organization's concern, as our illustrations are 
consistent with case law. We reference Piscione v. Ernst & Young, 171 
F.3d 527 (7th Cir. 1999) for discussion of when advisory and program 
development work that affects management policy and internal operations 
of client organizations is administratively exempt.
    One agency commented that Sec.  551.206 should provide information 
regarding OPM's expectations about the coverage or exemption of those 
performing a supporting service under the revised regulations. The 
concept of administratively exempt work can be found at Sec.  
551.206(h).
    Several commenters remarked that the guidance provided on team 
leaders in Sec.  551.206(i) is unclear. One agency commented that where 
project examples are provided, the decision as to whether or not the 
team leader was exempt seemed to be based on the types of projects led, 
thereby necessitating a

[[Page 52759]]

decision on the relative worth of the projects, rather than on the team 
leader's responsibilities. One labor organization expressed concern 
that the examples provided are not found in DoL's regulations on team 
leaders, thereby making it difficult to ascertain precisely how or when 
these activities could be considered major projects. The labor 
organization suggested that, to avoid imposing an overly broad 
definition of ``team leader,'' these examples should be removed or the 
provision should make clear that reviews or investigations do not 
constitute examples of major projects unless they involve the exercise 
of discretion and independent judgment. Another labor organization 
shared the concern that Sec.  551.206(i) could drastically broaden the 
executive exemption, in that paragraph (i) appears to describe a 
working supervisor more closely than an administrator. The labor 
organization suggested removal of this paragraph from the regulations. 
To clarify the intent of Sec.  551.206(i), we have added an example of 
a lead auditor who would meet the administrative exemption.
    One labor organization commented that the definition of management/
program analysts in Sec.  551.206(l) seems to suggest that any employee 
who engages in the study of the operations of an organization or a 
program has a primary duty that is directly related to the management 
or general business operations of the employer. They suggest that OPM 
clarify that an employee must have as his or her primary duty the study 
of such operations, as well as the recommending of changes to 
operations. They further suggest OPM clarify that employees in this 
position do not necessarily meet the requirement that they exercise 
discretion and independent judgment on matters of significance. We do 
not believe these revisions are necessary, as Sec.  551.206 makes clear 
what should be considered in determining an employee's primary duty. In 
addition, Sec.  551.206(l) is to be applied within the entirety of the 
administrative exemption criteria, which are applicable only when the 
employee's work entails the exercise of discretion and independent 
judgment on matters of significance.
    One agency recommended that OPM clarify what constitutes ordinary 
inspection work at Sec.  551.206(n) and explain what the statement, 
``They have some leeway in the performance of their work but only 
within closely prescribed limits'' means. We decline to add language, 
as we believe Sec.  551.206(n) is sufficiently clear as written.

Section 551.208--Learned Professionals

    As stated earlier in this preamble, we reordered subpart B of the 
final regulations. Consequently, Sec.  551.208 in the final regulations 
corresponds to Sec.  551.214 in the proposed regulations.
    One labor organization expressed numerous concerns regarding our 
treatment of learned professionals. They suggest that the proposed 
regulations neglect to emphasize that, with rare exceptions, learned 
professionals must have advanced degrees to succeed in their field. 
This labor organization maintained that in explaining the impact of the 
word ``customarily,'' the proposed regulations permit exemption of 
individuals who perform substantially the same work as degreed 
employees, without making clear how rarely employees attain such 
positions without advanced degrees. These proposed regulations are 
consistent with existing 5 CFR 551.207(a)(1). The work requires the 
application of knowledge customarily and characteristically acquired 
through education or training that meets the requirements for a 
bachelor's or higher degree. However, in an effort to address the labor 
organization's concerns, we have modified the language at Sec.  
551.208(a)(3) to emphasize the infrequency of employees attaining 
professional positions without advanced degrees.
    The same labor organization expressed concern regarding Sec.  
551.208(b), maintaining it provides management with the ability to seek 
new learned professions whenever a school creates a new advanced 
degree. They requested this section be removed. Discussion of the 
expansion of professions in Sec.  551.208(b) is consistent with 29 CFR 
541.301(f); therefore, we decline to eliminate the section.
    This labor organization also commented that the description of the 
accounting profession provided at Sec.  551.208(e) is ambiguous and 
uses equivocating language. Our description is consistent with 29 CFR 
541.301(e)(5); therefore, we decline to change the regulations.
    One agency and two labor organizations raised concerns regarding 
misapplication of the engineering profession at Sec.  551.208(f). One 
labor organization stated that the portion of Sec.  551.208(f) 
concerning engineering technicians should be entirely removed. We have 
revised the language to clarify that engineering technicians 
infrequently perform exempt work.
    One individual commented that, in the private sector, registered 
nurses paid on an hourly basis are nonexempt and therefore entitled to 
overtime pay under FLSA. The commenter suggests if OPM considers 
registered nurses exempt based on meeting the duties requirement 
without considering the salary test, then Federal Registered nurses are 
at a disadvantage. In this regard, the individual objected to Sec.  
551.208(j) which reads, ``Registered nurses who are registered by the 
appropriate State examining board generally meet the duties 
requirements for the learned professional exemption.'' We believe these 
concerns are misplaced. Section 551.208(j) must be read in conjunction 
with the salary-based nonexemption at Sec.  551.203. Registered nurses 
paid on an hourly basis will not meet the annual pay basis requirements 
of Sec.  551.203(a) because the exemption only applies to employees 
paid on an annual pay basis. Therefore, such employees will be 
nonexempt.

Section 551.210--Computer Employees

    As stated earlier in this preamble, we reordered subpart B of the 
final regulations. Accordingly, Sec.  551.210 in the final regulations 
corresponds to Sec.  551.216 in the proposed regulations.
    One agency recommended renaming this section ``Information 
Technology employees'' to remain consistent with how Federal 
classification standards refer to these positions. Section 13(a)(17) of 
the Act specifically addresses computer occupations, as do DoL's 
implementing regulations in 29 CFR part 541, subpart E. As noted 
previously in this preamble, Federal position classification and job 
grading laws and regulations do not control FLSA definitions. 
Therefore, we decline to accept this recommendation.
    One agency and one labor organization found the intermingling of 
the computer exemption under sections 13(a)(1) and 13(a)(17) of the Act 
confusing. We believe that Sec.  551.210 is sufficiently clear as 
written. Further, our description is consistent with 29 CFR 541.400; 
therefore, we decline to change the regulations.
    One labor organization raised concerns regarding proposed Sec.  
551.210(d), where we state that certain employees meeting exemption 
under section 13(a)(17) of the Act may also have executive and 
administrative duties which qualify the employees for exemption under 
executive and administrative exemption rules as well. The labor 
organization maintained that it is unclear how these same employees 
could also have executive or administrative work as their primary duty, 
unless their computer functions completely overlap with executive or 
administrative work. They further maintained that if such overlapping 
of

[[Page 52760]]

duties occurred, the executive and administrative rules would add 
nothing to the designation of these employees as FLSA exempt or 
nonexempt. As discussed in connection with Sec.  551.202(h), agencies 
are responsible for showing and documenting that an employee's work as 
a whole clearly meets one or more of the exemption criteria. We decline 
to change this language.

Section 551.211--Effect of Performing Different Work or Duties for a 
Temporary Period of Time on FLSA Exemption Status

    As stated earlier, we reordered subpart B of the final regulations. 
As a result, Sec.  551.211 in the final regulations corresponds to 
Sec.  551.208 in the proposed regulations. We also renamed the section 
to more appropriately reflect the intent of Sec.  551.211.
    Several labor organizations raised the same concerns regarding the 
30-day test that OPM addressed in the General Comments section of the 
1997 regulations (see 62 FR 67238). We responded to this issue at that 
time, and our response remains the same. The 30-day test is well-
established and has been unchanged in OPM regulation since January 
1988. At that time, OPM made clear the extent of an agency's 
responsibilities regarding an employee who must temporarily perform 
work or duties that are not consistent with the primary or grade-
controlling duty of his or her official position description.
    Two agencies expressed concern with, and questioned the intent of, 
this section. One agency suggested that if a temporary assignment is 
expected to last beyond 30 days, the agency should, as good management 
practice, determine the exemption status of the employee at the 
beginning of the temporary assignment. This agency maintained that it 
is not practical or fair for an agency to pay an employee overtime 
under FLSA rules during the first 30 days of an assignment, while 
knowing that an exempt assignment will last beyond the 30 days, and 
then have to require the employee to repay the overtime. The other 
agency raised similar concerns. The intent of Sec.  551.211(d) is to 
deal with situations where management is unclear regarding the duration 
of an assignment. We decline to amend this portion of the regulations.

Section 551.213--Exemption of Employees Receiving Availability Pay

    As stated earlier in this preamble, we reordered subpart B of the 
final regulations. Consequently, Sec.  551.213 in the final regulations 
corresponds to Sec.  551.210 in the proposed regulations.
    At the request of an agency, we have amended Sec.  551.213(a) to 
include the statutory provision under which employees are exempted from 
FLSA coverage by receiving availability pay.
    The same agency commented that we should include a note in Sec.  
551.213(b) that positions formerly classified as pilots at the U.S. 
Customs Service are now identified at the U.S. Customs and Border 
Protection (CBP) as CBP Air Interdiction Agents, GS 1881. As the 
statutory requirements of 5 U.S.C. chapter 51 are not controlling in 
applying the FLSA, we decline to amend the regulations to cite specific 
position titles. We have changed the agency name in the regulations 
from U.S. Customs Service to U.S. Customs and Border Protection.

Section 551.214--Statutory Exclusion

    As stated earlier, we reordered subpart B of the final regulations. 
Accordingly, Sec.  551.214 in the final regulations corresponds to 
Sec.  551.211 in the proposed regulations.
    One agency suggested that the regulations should cite the statutory 
and regulatory provisions regarding customs officers covered by 19 
U.S.C. 267 rather than attempt to list all the covered titles. We agree 
and have amended the regulations to delete reference to specific 
titles.

Section 551.215--Fire Protection Activities and 7(k) Coverage for FLSA 
Pay and Exemption Determinations

    As stated earlier, we reordered subpart B of the final regulations. 
Consequently, Sec.  551.215 in the final regulations corresponds to 
Sec.  551.212 in the proposed regulations.
    We received numerous comments from a labor organization questioning 
and speculating on why we added this section. This labor organization 
expressed concern that the firefighter definition in 5 CFR 550.1302 
will be altered by issuance of this regulation. They maintain the 
existing firefighter definition is adequate, and this rule may make 
interpretation of section 7(k) of the Act in the Federal sector more 
complex. In addition to this labor organization's comments, two 
agencies raised concerns regarding the effect of these regulations on 
wildland firefighters. These comments indicate that further 
clarification is required.
    This section pertains to two distinct topics: fire protection 
activities and coverage under the section 7(k) provisions of the Act. 
The revised regulations continue OPM's longstanding policy that the 
section 7(k) provisions are not automatically applied to all employees 
who perform fire protection activities. OPM rules provide that the 
section 7(k) provisions are applied only to employees receiving certain 
types of premium pay associated with extended tours of duty. For 
example, section 7(k) is applicable to a fire protection employee only 
if he or she receives annual premium pay under 5 U.S.C. 5545(c) 
(usually standby duty pay under (c)(1)) or firefighter's compensation 
under 5 U.S.C. 5545b. These premium payments apply to firefighters who 
have extended tours, usually including 24-hour shifts.
    Wildland firefighters are not covered by the regulatory provisions 
for section 7(k) employees at Sec.  551.541. This matter was clarified 
in the regulations in 1976, and wildland firefighters who do not 
receive the specific types of premium payments under Sec. Sec.  
551.501(a)(1) and (5) will continue to be covered by section 7(a) of 
the Act under these regulations. We have modified Sec. Sec.  551.215(a) 
and 551.541(a) in the final regulations to better align it with this 
section of the regulation.
    One labor organization provided a number of comments in response to 
the establishment of this section. The labor organization commented 
that OPM's inclusion of fire inspections among the list of fire 
protection activities at Sec.  551.215(b) is confusing, suggesting it 
may lead to the erroneous conclusion that employees who solely perform 
fire inspections are engaged in fire protection activities under 
section 7(k). We note that the proper interpretation of Sec.  
551.215(b) is predicated upon reading it within the entirety of Sec.  
551.215. The labor organization's concern is best addressed by reading 
Sec.  551.215(b) in conjunction with Sec.  551.215(d)(2). Nevertheless, 
to clarify this section, we have changed Sec.  551.215(b) by adding 
``by trained firefighters eligible for reassignment to fire control and 
suppression or prevention duties'' in the clause dealing with 
inspections.
    The labor organization commented that OPM is obligated at Sec.  
551.215(b) to comply with DoL's interpretation of the application of 
section 7(k) to emergency medical service (EMS) personnel as set forth 
in 29 CFR 553.215(b). The section cited in the labor organization's 
comment addresses ambulance and rescue service employees of public 
agencies subject to the Act prior to the 1974 amendments. We therefore 
assume this comment is misplaced and intended to reference 29 CFR 
553.215(a). Our proposed and final regulations are consistent with the 
pertinent DoL regulations at 29 CFR

[[Page 52761]]

553.215(a); therefore, we decline to change this section.
    This labor organization requested modification of Sec.  
551.215(c)(2) and (3) to include all the necessary requirements, for 
example, that the temporary employee be hired by a fire department, 
that he or she be trained in fire suppression, and that he or she 
actually perform fire suppression activities. This labor organization 
also suggested that OPM remove Sec.  551.215(c)(4) entirely, 
maintaining the section neither complies with the FLSA nor conforms 
with DoL's interpretation of the FLSA. The labor organization referred 
to 29 U.S.C. 203(y), stating DoL's regulations define employees in fire 
protection activities. They further relied on AFGE v. OPM, 821 F.2d 
761, 770 (D.C. Cir. 1987) in asserting we must change our regulations 
``in a manner consistent with the Secretary of Labor's implementation 
of the Fair Labor Standards Act.''
    We agree that OPM's regulations should be consistent with the 
statutory definition of ``employee in fire protection activities'' in 
section 3(y) of the FLSA (29 U.S.C. 203(y)). We have modified proposed 
paragraphs (b), (c), and (d) of Sec.  551.215 accordingly.

Section 551.216--Law Enforcement Activities and 7(k) Coverage for FLSA 
Pay and Exemption Determinations

    As stated earlier, we reordered subpart B of the final regulations. 
As a result, Sec.  551.216 in the final regulations corresponds to 
Sec.  551.213 in the proposed regulations.
    One labor organization and one agency objected to what they 
construed as applying section 7(k) to correctional officers and 
requested that the regulations explicitly state that such employees 
will not be subject to section 7(k) of the Act. This section of the 
regulations pertains to two distinct topics: law enforcement activities 
and coverage under section 7(k) provisions of the Act. The revised 
regulations continue OPM's longstanding policy that the section 7(k) 
provisions are not automatically applied to all employees who perform 
law enforcement activities. OPM rules provide that the section 7(k) 
provisions are applied to employees receiving certain types of premium 
pay. For example, section 7(k) is applicable to a law enforcement 
employee if he or she receives annual premium pay under 5 U.S.C. 
5545(c)(1) for regularly scheduled standby duty, or under 5 U.S.C. 
5545(c)(2) for substantial amounts of irregular, unscheduled overtime 
work which cannot be controlled administratively.
    One agency objected to the differences between the definition of 
law enforcement activities for FLSA purposes, and the statutory 
definition of ``law enforcement officer'' (LEO) for retirement purposes 
in 5 U.S.C. chapters 83 and 84. The agency's objections emphasized that 
such a distinction undermines the long-standing determination that LEO 
retirement coverage extends to all employees who work within its 
correctional facilities. As discussed earlier, just as it is 
inappropriate to apply 5 U.S.C. chapters 51 and 53 definitions to terms 
used in the FLSA, the same holds true for the statutory definition of 
LEO in 5 U.S.C. chapters 83 and 84; that definition is not controlling 
in defining ``law enforcement officers'' for purposes of the FLSA.
    One individual stated the partial listing of positions contained in 
Sec. Sec.  551.216(c)(2) through (6) is misleading and will result in 
officers being inappropriately characterized as not qualifying. We note 
the examples provided are not exhaustive. They are meant to supplement, 
not take the place of, Sec.  551.216(b). The use of these examples is 
consistent with DoL's regulations at 29 CFR 553.211(c). Therefore, we 
decline to adopt the suggestion to remove paragraphs (c)(2) through 
(6).

Subpart E--Overtime Pay Provisions

    While not included in the proposed regulations, Sec.  551.541 has 
been modified to align the language with new Sec. Sec.  551.215(a) and 
551.216(a), which now make clear that not all fire protection and law 
enforcement employees, respectively, are covered by section 7(k) of the 
Act. To avoid confusion, we have deleted from Sec.  551.541(a) the 
language referring to employees not covered by section 7(k) so that 
Sec.  551.541 deals solely with section 7(k) employees. Additionally, 
Sec.  551.541(b) has been revised for continuity with Sec.  551.541(a).

Subpart F--Child Labor

    In the proposed regulations we added paragraph (c) to Sec.  551.601 
in order to define hazardous Federal fire protective activities for 
individuals under 18 years of age. No comments were received in 
response to this addition. We are adopting the proposed language as 
final.

Subpart G--FLSA Claims and Compliance

    In this subpart of the proposed regulations, we clarified in Sec.  
551.702(c) that the claimant is responsible for retaining documentation 
to establish when a claim is received; in Sec.  551.705(b) we corrected 
the reference from paragraph (b) to paragraph (c); and in Sec.  
551.707(a) we clarified that OPM may grant a request from a claimant to 
withdraw his or her claim. No comments were received in response to 
these revisions; therefore, we are adopting the proposed language as 
final.

E.O. 12866, Regulatory Review

    The Office of Management and Budget has reviewed this rule in 
accordance with E.O. 12866.

Regulatory Flexibility Act

    OPM has determined that these regulations will not have a 
significant economic impact on a substantial number of small entities 
because they apply only to Federal agencies and employees.

Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35)

    This regulatory action will not impose any additional reporting or 
recordkeeping requirements under the Paperwork Reduction Act.

E.O. 12988, Civil Justice Reform

    These regulations are consistent with the requirements of E.O. 
12988. The regulations clearly specify the effects on existing Federal 
law or regulation; provides clear legal standards; has no retroactive 
effects; specifies procedures for administrative and court actions; 
defines key terms; and is drafted clearly.

E.O. 13132, Federalism

    OPM has determined these regulations will not have Federalism 
implications because they apply only to Federal agencies and employees. 
The regulations will not have financial or other effects on States, the 
relationship between the Federal Government and the States, or the 
distribution of power and responsibilities among the various levels of 
government.

Unfunded Mandates

    These regulations will not result in the expenditure by State, 
local, or tribal governments of more than $100 million annually. Thus, 
no written assessment of unfunded mandates is required.

List of Subjects in 5 CFR Part 551

    Government employees, and Wages.

U.S. Office of Personnel Management.
Linda M. Springer,
Director.

0
Accordingly, OPM is amending 5 CFR part 551 as follows:

[[Page 52762]]

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

0
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).


0
2. Revise subpart A 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 minimum standards for both wages 
and overtime entitlements, and 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 and 
prescribes penalties for the commission of specifically prohibited 
acts.
    (b) This part contains the regulations, criteria, and conditions 
set forth by the Office of Personnel Management (OPM) as prescribed by 
the Act, supplements and implements the Act, and must be read in 
conjunction with it.
    (c) OPM's administration of the Act must comply with the terms of 
the Act but the law does not require OPM's regulations to mirror the 
Department of Labor's FLSA regulations. OPM's administration of the Act 
must be consistent with the Department of Labor's administration of the 
Act only to the extent practicable and only to the extent that this 
consistency is required to maintain compliance with the terms of the 
Act. For example, while OPM's executive, administrative, and 
professional exemption criteria are consistent with the Department of 
Labor's exemption criteria, OPM does not apply the highly compensated 
employee criteria in 29 CFR 541.601 to determine FLSA exemption status.


Sec.  551.102  Authority and administration.

    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.
    (a) Office of Personnel Management. 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 government 
of the District of Columbia and 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) Office of Compliance. The Congressional Accountability Act of 
1995, as amended, sections 1301 et seq. of title 2, United States Code, 
extends rights and protections of the FLSA to employees of the 
following United States Government entities, and assigns certain 
administrative responsibilities to the Office of Compliance:
    (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; and
    (8) The Office of Compliance.


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) A civilian employee 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 by the Act:
    (1) A person appointed under appropriate authority without 
compensation;
    (2) A trainee;
    (3) A volunteer; or
    (4) A member of the Uniformed Services.


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 
administrative exemption criteria in Sec.  551.206.
    Agency 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(c) for which the Department of Labor 
administers the Act or Sec.  551.102(d)(1) through (8), whose employees 
are covered by the Congressional Accountability Act of 1995, as 
amended, which makes applicable the rights and protections of the FLSA 
and assigns certain administrative responsibilities to the Office of 
Compliance.
    Claim means a written allegation regarding a current or former 
employee concerning the employee's FLSA exemption status determination 
or entitlement to minimum wage or overtime pay for work performed under 
the Act. The term claim is used generically in subpart G and includes 
complaints under the child labor provisions of the Act.
    Claim period means the time during which the cause or basis of the 
claim occurred.
    Claimant means any party who files an FLSA claim.
    Customarily and regularly means a frequency which must be greater 
than occasional but which may be less than constant. Tasks or work 
performed customarily and regularly includes work normally and 
recurrently performed every workweek. It does not include isolated or 
one-time tasks.
    Directly and closely related means work that is directly and 
closely related to the performance of exempt work which is also 
considered exempt work. The phrase directly and closely related means 
tasks that are related to exempt duties and that contribute to or 
facilitate performance of exempt work. Directly and closely related 
work may include typically nonexempt tasks that arise out of and are 
integral to exempt duties. Those nonexempt tasks must be performed by 
the exempt employee to perform his or her exempt work. Work directly 
and closely related to the performance of exempt duties may also 
include recordkeeping; maintaining various records pertaining to 
workload or employee performance; monitoring and adjusting machinery; 
taking notes; using the computer to create documents or presentations; 
opening the mail for the purpose of reading it and making decisions; 
and using a photocopier or fax machine. Work which both workers and 
supervisors are required to perform

[[Page 52763]]

is 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) and is exempt work. Work is not directly 
and closely related if the work is remotely related or completely 
unrelated to exempt duties. The following examples illustrate the type 
of work that is and is not normally considered as directly and closely 
related to exempt work:
    (1) Work is closely related to exempt supervisory work when it 
contributes to the effective supervision of subordinate workers, or the 
smooth functioning of the unit supervised, or both. A supervisor who 
spot checks and examines the work of subordinates to determine whether 
they are performing their duties properly, and whether the product is 
satisfactory, is performing work which is directly and closely related 
to managerial and supervisory functions, so long as the checking is 
distinguishable from the work ordinarily performed by a nonexempt 
inspector.
    (2) Depending upon the nature of an organization, a supervisor who 
sets up a machine may be engaged in exempt work. In some cases the 
setup work, or adjustment of the machine for a particular job, is 
typically performed by the same employees who operate the machine. In 
such cases, setup work is part of the production operation and is not 
exempt. In other cases, the setting up of the work is a highly skilled 
operation which the ordinary production worker typically does not 
perform. In large plants, non-supervisors may perform such work. 
However, particularly in small plants, such work may be a regular duty 
of the executive employee and is directly and closely related to the 
executive employee's responsibility for the subordinates' work 
performance and for the adequacy of the final product. In addition, 
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. Such closely related work may include 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. Under such circumstances, it is exempt 
work.
    (3) A management analyst may take extensive notes recording the 
flow of work and materials through an organization; the analyst may 
personally use a computer to type a report and create a proposed table 
of organization. Standing alone, or separated from the primary duty, 
such note-taking and typing would not be exempt. However, because this 
work is necessary for analyzing the data and making recommendations 
(which is exempt work), it is directly and closely related to exempt 
work.
    (4) A traffic manager in charge of planning an organization's 
transportation function, including identifying the most economical and 
quickest routes for shipping material to and from the activity, 
contracting for common-carrier and other transportation facilities, 
negotiating with carriers for adjustments for damages to material, and 
making the necessary rearrangements resulting from delays, damages or 
irregularities in transit, is performing exempt work. If the employee 
also spends part of the day taking telephone orders for local 
deliveries, such order-taking is a routine function and is not directly 
and closely related to the exempt work.
    (5) An example of work directly and closely related to exempt 
professional duties is a chemist performing nonexempt tasks such as 
cleaning a test tube in the middle of an original experiment, even 
though such tasks can be assigned to laboratory assistants.
    (6) A teacher performs work directly and closely related to exempt 
duties when, while taking students on a field trip, the teacher drives 
a school van or monitors the students' behavior in a restaurant.
    Educational establishment means a nursery school, an elementary or 
secondary school system, an institution of higher education, other 
educational institutions, and in certain circumstances, training 
facilities. The term other educational establishment includes special 
schools for mentally or physically disabled or gifted children, 
regardless of any classification of such schools as elementary, 
secondary, or higher.
    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, including any hours of work that are suffered or 
permitted.
    Employee means a person who is employed--
    (1) As a civilian 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;
    (4) In a unit of the judicial branch of the Government that has 
positions in the competitive service; or
    (5) In the Government Printing Office.
    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.
    Executive employee means an employee who meets the executive 
exemption criteria in Sec.  551.205.
    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) Commonwealth of the Northern Mariana Islands;
    (9) Midway Atoll;
    (10) Wake Island;
    (11) Johnston Island; and
    (12) Palmyra.
    Filed means a claim has been properly submitted by the claimant. 
The claimant must deliver the claim to the appropriate office within 
the agency or OPM, whichever is deciding the FLSA claim. The claim must 
be postmarked or date-stamped in order to establish the time of 
delivery.
    FLSA exempt means not covered by the minimum wage and overtime 
provisions of the Act.
    FLSA exemption status means an employee's designation as either 
FLSA exempt or FLSA nonexempt from the minimum wage and overtime 
provisions of the Act.
    FLSA nonexempt means covered by the minimum wage and overtime 
provisions of the Act.
    FLSA overtime pay means overtime pay under this part.
    FLSA pay claim means a claim concerning an employee's entitlement 
to minimum wage or overtime pay for work performed under the Act.
    Formulate, affect, interpret, or implement management policies or 
operating practices means perform work that involves management 
policies or operating practices which range from

[[Page 52764]]

specific objectives and practices of a small field office to broad 
national goals expressed in statutes or Executive orders. Employees 
performing such work make policy decisions or participate indirectly 
through developing or recommending proposals that are acted on by 
others. The work of employees who significantly affect the execution of 
management policies 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 purpose 
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 decisions and policy guidance, 
agency policy, 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 means performing activities such as interviewing, 
selecting, and training of employees; setting and adjusting their rates 
of pay and hours of work; directing the work of employees; maintaining 
production or financial records for use in supervision or control; 
appraising employees' productivity and efficiency for the purpose of 
recommending promotions or other changes in status; handling employee 
complaints and grievances; disciplining employees; planning the work; 
determining the techniques to be used; apportioning the work among the 
employees; determining the type of materials, supplies, machinery, 
equipment, or tools to be used or merchandise to be bought, stocked and 
sold; controlling the flow and distribution of materials or merchandise 
and supplies; providing for the safety and security of the employees or 
the property; planning and controlling the budget; and monitoring or 
implementing legal compliance measures.
    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) Commonwealth of the Northern Mariana Islands;
    (9) Midway Atoll;
    (10) Wake Island;
    (11) Johnston Island; and
    (12) Palmyra.
    Official position means the position to which the employee is 
officially assigned by means of a personnel action authorized by the 
agency.
    Perform work in connection with an emergency means 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 establish the period of possible 
entitlement to back pay by filing a written claim. The date the agency 
or OPM receives the claim preserves the claim period and 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 an employee's work (alternative primary duty) may be 
credited as the primary duty for exemption purposes provided that duty:
    (1) Constitutes a substantial, regular part of the work assigned 
and performed;
    (2) Is the reason for the existence 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 as discussed in Sec.  551.206, and the 
significance of the decisions made.
    Professional employee means an employee who meets the professional 
exemption criteria in Sec.  551.207.
    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 of 
temporary groups formed to perform assignments of limited duration.
    (1) The term recognized organizational unit is intended to 
distinguish between a mere collection of employees assigned from time 
to time to a specific job or series of jobs and a unit with permanent 
status and function. A recognized organizational unit must have a 
permanent status and a continuing function. For example, a large human 
resources department might have subdivisions for labor relations, 
pensions and other benefits, equal employment opportunity, and 
recruitment and placement, each of which has a permanent status and 
function.
    (2) A recognized organizational unit may move from place to place. 
The mere fact that the employee works in more than one location does 
not invalidate the exemption if other factors show that the employee is 
actually in charge of a recognized organizational unit with a 
continuing function in the organization.
    (3) Continuity of the same subordinates is not essential to the 
existence of a recognized organizational unit with a continuing 
function. An otherwise exempt employee will not lose the exemption 
merely because the employee draws and supervises workers from a pool or 
supervises a team of workers drawn from other recognized organizational 
units, if other factors are present that indicate the employee is in 
charge of a recognized organizational unit with a continuing function.
    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.
    Title 5 overtime pay, for the purpose of Sec.  551.211, 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 is

[[Page 52765]]

not a Federal employee 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 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.
    Two or more other employees means the equivalent of two or more 
full-time employees. For the purpose of this definition, an employee is 
equal to a full-time equivalent (FTE). For example, one full-time and 
two half-time employees are equivalent to two full-time employees.
    Volunteer means a person who does not meet the definition of 
employee in this section and who volunteers or 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.
    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.
    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 worktime 
over a period long enough to even out normal fluctuations in workloads 
and is 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 must 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 (except for employees 
engaged in fire protection or law enforcement activities under section 
7(k) of the Act) and does not permit the 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.

0
3. Revise subpart B to read as follows:
Subpart B--Exemptions and Exclusions
Sec.
551.201 Agency authority.
551.202 General principles.
551.203 Salary-based nonexemption.
551.204 Nonexemption of certain employees.
551.205 Executive exemption criteria.
551.206 Administrative exemption criteria.
551.207 Professional exemption criteria.
551.208 Learned professionals.
551.209 Creative professionals.
551.210 Computer employees.
551.211 Effect of performing different work or duties for a 
temporary period of time on FLSA exemption status.
551.212 Foreign exemption criteria.
551.213 Exemption of employees receiving availability pay.
551.214 Statutory exclusion.
551.215 Fire protection activities and 7(k) coverage for FLSA pay 
and exemption determinations.
551.216 Law enforcement activities and 7(k) coverage for FLSA pay 
and exemption determinations.

Subpart B--Exemptions and Exclusions


Sec.  551.201  Agency authority.

    The employing agency must review and make a determination on each 
employee's exemption status.


Sec.  551.202  General principles.

    In all exemption determinations, the agency must observe the 
following principles:
    (a) Each employee is presumed to be FLSA nonexempt unless the 
employing agency correctly determines that the employee clearly meets 
the requirements of one or more of the exemptions of this subpart and 
such supplemental interpretations or instructions issued by OPM. The 
agency must designate an employee FLSA exempt when the agency correctly 
determines that the employee meets the requirements of one or more of 
the exemptions of this subpart and such supplemental interpretations or 
instructions issued by OPM.
    (b) Exemption criteria must be narrowly construed to apply only to 
those employees who are clearly within the terms and spirit of the 
exemption.
    (c) The burden of proof rests with the agency that asserts the 
exemption.
    (d) An employee who clearly meets 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 will be 
designated FLSA nonexempt.
    (e) While established position descriptions and titles may assist 
in making initial FLSA exemption determinations, the designation of an 
employee as FLSA exempt or nonexempt must ultimately rest on the duties 
actually performed by the employee.
    (f) Although separate criteria are provided for the exemption of 
executive, administrative, and professional employees, those categories 
are not mutually exclusive. Employees who perform a combination of 
exempt duties set forth in this regulation may also qualify for 
exemption. For example, an employee whose primary duty involves a 
combination of exempt administrative and exempt executive work may 
qualify for exemption, i.e., work that is exempt under one section of 
this part will not defeat the exemption under any other section.
    (g) Failure to meet the criteria for exemption under what might 
appear to be the most obvious 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 
meet the administrative criteria may be performing exempt executive 
work.
    (h) Although it is normally feasible and more convenient to 
identify a single exemption category, this is not always

[[Page 52766]]

appropriate. 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 designating an employee FLSA exempt, 
provided the work as a whole clearly meets the other exemption 
criteria. The agency is responsible for showing and documenting that 
the work as a whole clearly meets one or more of the exemption 
criteria.


Sec.  551.203  Salary-based nonexemption.

    (a) An employee, including a supervisory employee, whose annual 
rate of basic pay is less than $23,660 is nonexempt, unless:
    (1) The employee is subject to Sec.  551.211 (Effect of performing 
different work or duties for a temporary period of time on FLSA 
exemption status); or
    (2) The employee is subject to Sec.  551.212 (Foreign exemption 
criteria); or
    (3) The employee is a professional engaged in the practice of law 
or medicine as prescribed in paragraphs (c) and (d) of Sec.  551.208.
    (b) For the purpose of this section, ``rate of basic pay'' means 
the rate of pay fixed by law or administrative action for the position 
held by an employee, including any applicable locality payment under 5 
CFR part 531, subpart F, special rate supplement under 5 CFR part 530, 
subpart C, or similar payment or supplement under other legal 
authority, before any deductions and exclusive of additional pay of any 
other kind, such as premium payments, differentials, and allowances.


Sec.  551.204  Nonexemption of certain employees.

    (a) Certain nonsupervisory white-collar employees are FLSA 
nonexempt (unless the employees are subject to Sec.  551.211 (Effect of 
performing different work or duties for a temporary period of time on 
FLSA exemption status) or Sec.  551.212 (Foreign exemption criteria)) 
because they do not fit any of the exemption categories. They include:
    (1) Employees in equipment operating and protective occupations, 
and most clerical occupations;
    (2) 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) Employees at any grade, or equivalent level, in occupations 
requiring highly specialized, technical skills and knowledge that can 
be acquired only through prolonged job training and experience, such as 
in the Air Traffic Control series, or in the Aircraft Operations series 
unless such employees are performing predominantly administrative 
functions rather than the technical work of the occupation.
    (b) Nonsupervisory employees in the Federal Wage System or in other 
comparable wage systems are nonexempt, unless the employees are subject 
to Sec.  551.211 (Effect of performing different work or duties for a 
temporary period of time on FLSA exemption status) or Sec.  551.212 
(Foreign exemption criteria).


Sec.  551.205  Executive exemption criteria.

    (a) An executive employee is an employee whose primary duty is 
management (as defined in Sec.  551.104) of a Federal agency or any 
subdivision thereof (including the lowest recognized organizational 
unit with a continuing function) and who:
    (1) Customarily and regularly directs the work of two or more other 
employees. However, an employee who merely assists the manager of a 
particular department and supervises two or more employees only in the 
actual manager's absence does not meet this requirement. In addition, 
hours worked by an employee cannot be credited more than once for 
different executives. This takes into consideration those organizations 
that use matrix management, i.e., a system of ``shared'' leadership, 
where supervision cuts across product and service lines in terms of 
accessing activities and advising top management on business 
operations, but where the supervisor/leader does not have the operating 
authority over all employees. Thus, a shared responsibility for the 
supervision of the same two employees in the same recognized 
organizational unit does not satisfy this requirement. However, a full-
time employee who works 4 hours for one supervisor and 4 hours for a 
different supervisor will be credited as a half-time employee for both 
supervisors; and
    (2) Has the authority to hire or fire other employees or whose 
suggestions and recommendations as to the hiring, firing, advancement, 
promotion, or any other change of status of other employees, are given 
particular weight.
    (b) Particular weight. Criteria to determine whether an employee's 
suggestions and recommendations are given particular weight by higher-
level management include, but are not limited to: whether it is part of 
the employee's job duties to make such suggestions and recommendations; 
the frequency with which such suggestions and recommendations are made 
or requested; and the frequency with which the employee's suggestions 
and recommendations are relied upon. Generally, an executive's 
suggestions and recommendations must pertain to employees whom the 
executive customarily and regularly directs. Particular weight does not 
include consideration of an occasional suggestion with regard to the 
change in status of a co-worker. An employee's suggestions and 
recommendations may still be deemed to have particular weight even if a 
higher level manager's recommendation has more importance and even if 
the employee does not have authority to make the ultimate decision as 
to the employee's change in status.


Sec.  551.206  Administrative exemption criteria.

    An administrative employee is an employee whose primary duty is the 
performance of office or non-manual work directly related to the 
management or general business operations, as distinguished from 
production functions, of the employer or the employer's customers and 
whose primary duty includes the exercise of discretion and independent 
judgment with respect to matters of significance.
    (a) In general, the exercise of discretion and independent judgment 
involves the comparison and the evaluation of possible courses of 
conduct, and acting or making a decision after the various 
possibilities have been considered. The term ``matters of 
significance'' refers to the level of importance or consequence of the 
work performed.
    (b) The phrase discretion and independent judgment must be applied 
in light of all the facts involved in the particular employment 
situation in which the question arises. Factors to consider when 
determining whether an employee exercises discretion and independent 
judgment with respect to matters of significance include, but are not 
limited to, whether the employee:
    (1) Has authority to formulate, affect, interpret, or implement 
management policies or operating practices;
    (2) Carries out major assignments in conducting the operations of 
the organization;
    (3) Performs work that affects the organization's operations to a 
substantial degree, even if the employee's assignments are related to 
operation of a particular segment of the organization;

[[Page 52767]]

    (4) Has authority to commit the employer in matters that have 
significant financial impact;
    (5) Has authority to waive or deviate from established policies and 
procedures without prior approval;
    (6) Has authority to negotiate and bind the organization on 
significant matters;
    (7) Provides consultation or expert advice to management;
    (8) Is involved in planning long- or short-term organizational 
objectives;
    (9) Investigates and resolves matters of significance on behalf of 
management; and
    (10) Represents the organization in handling complaints, 
arbitrating disputes, or resolving grievances.
    (c) The exercise of discretion and independent judgment implies 
that the employee has authority to make an independent choice, free 
from immediate direction or supervision. However, an employee can 
exercise discretion and independent judgment even if the employee's 
decisions or recommendations are reviewed at a higher level. Thus, the 
term discretion and independent judgment does not require that 
decisions made by an employee have a finality that goes with unlimited 
authority and a complete absence of review. The decisions made as a 
result of the exercise of discretion and independent judgment may 
consist of recommendations for action rather than the actual taking of 
action. The fact that an employee's decision may be subject to review 
and that upon occasion the decisions are revised or reversed after 
review does not mean that the employee is not exercising discretion and 
independent judgment.
    (d) An organization's workload may make it necessary to employ a 
number of employees to perform the same or similar work. The fact that 
many employees perform identical work or work of the same relative 
importance does not mean that the work of each such employee does not 
involve the exercise of discretion and independent judgment with 
respect to matters of significance.
    (e) The exercise of discretion and independent judgment must be 
more than the use of skill in applying well-established techniques, 
procedures, or specific standards described in manuals or other 
sources.
    (f) The use of manuals, guidelines, or other established procedures 
containing or relating to highly technical, scientific, legal, 
financial, or other similarly complex matters that can be understood or 
interpreted only by those with advanced or specialized knowledge or 
skills does not preclude exemption. Such manuals and procedures provide 
guidance in addressing difficult or novel circumstances and thus use of 
such reference material would not affect an employee's exemption 
status. However, employees who simply apply well-established techniques 
or procedures described in manuals or other sources within closely 
prescribed limits to determine the correct response to an inquiry or 
set of circumstances will be nonexempt.
    (g) An employee does not exercise discretion and independent 
judgment with respect to matters of significance merely because the 
employer will experience financial losses if the employee fails to 
perform the job properly. For example, a messenger who is entrusted 
with carrying large sums of money does not exercise discretion and 
independent judgment with respect to matters of significance even 
though serious consequences may flow from the employee's neglect. 
Similarly, an employee who operates very expensive equipment does not 
exercise discretion and independent judgment with respect to matters of 
significance merely because improper performance of the employee's 
duties may cause serious financial loss to the employer.
    (h) Employees in certain occupations typically assist and support 
line managers and assume facets of the overall management function. 
Neither the location of the work nor the number of employees performing 
the same or similar work turns such work into a production function. 
For example, independent agencies or agency components often provide 
centralized human resources, information systems, procurement and 
acquisition, or financial management services as support services to 
other agencies or agency components. However, this does not change the 
inherent administrative nature of the work performed to line or 
production work. Similarly, employees who develop, interpret, and 
oversee agency or Governmentwide policy are performing management 
support functions. Some of these activities may be performed by 
employees who would otherwise qualify under another exemption.
    Depending upon the purpose of the work and the organizational 
context, work in certain occupations may be either exempt or nonexempt. 
For example, criminal investigators who perform work directly related 
to the internal management of the agency and typically would be 
expected to provide recommendations of great significance based on the 
analysis of investigative findings would likely be considered as 
performing a staff function. In contrast, the performance of 
investigative and inspectional work to confirm whether specific 
regulatory requirements have been met for an investigative/inspectional 
component of any agency would likely be considered as performing a line 
rather than a staff function.
    (i) An employee who leads a team of other employees assigned to 
complete major projects (such as acquisitions; negotiating real estate 
transactions or collective bargaining agreements; designing and 
implementing productivity improvements; oversight, compliance, or 
program reviews; investigations) generally meets the duties 
requirements for the administrative exemption, even if the employee 
does not have direct supervisory responsibility over the other 
employees on the team. An example is a lead auditor who oversees an 
audit team in an auditing agency and who is assigned responsibility for 
leading a major audit requiring the use of substantial agency 
resources. This auditor is responsible for proposing the parameters of 
the audit and developing a plan of action and milestones to accomplish 
the audit. Included in the plan are the methodologies to be used, the 
staff and other resources required to conduct the audit, proposed staff 
member assignments, etc. When conducting the audit, the lead auditor 
makes on-site decisions and/or proposes major changes to managers on 
matters of significance in accomplishing the audit, including 
deviations from established policies and practices of the agency.
    (j) An executive assistant or administrative assistant to a high 
level manager or senior executive generally meets the duties 
requirements for the administrative exemption if such employee, without 
specific instructions or prescribed procedures, has been delegated 
authority regarding matters of significance.
    (k) Human resources employees who formulate, interpret or implement 
human resources management policies generally meet the duties 
requirements for the administrative exemption. In addition, when 
interviewing and screening functions are performed by the human 
resources employee who makes the hiring decision or makes 
recommendations for hiring from a pool of qualified applicants, such 
duties constitute exempt work, even though routine, because this work 
is directly and closely related to the employee's exempt functions.
    (l) Management analysts who study the operations of an organization 
and propose changes in the organization, program analysts who study 
program

[[Page 52768]]

operations and propose changes to the program, and other management 
advisors generally meet the duties requirements for the administrative 
exemption.
    (m) Acquisition employees with authority to bind the organization 
to significant purchases generally meet the duties requirements for the 
administrative exemption even if they must consult with higher 
management officials when making a commitment.
    (n) Ordinary inspection work generally does not meet the duties 
requirements for the administrative exemption. Inspectors normally 
perform specialized work along standardized lines involving well-
established techniques and procedures which may have been catalogued 
and described in manuals or other sources. Such inspectors rely on 
techniques and skills acquired by special training or experience. They 
have some leeway in the performance of their work but only within 
closely prescribed limits.


Sec.  551.207  Professional exemption criteria.

    To qualify for the professional exemption, an employee's primary 
duty must be the performance of work requiring knowledge of an advanced 
type in a field of science or learning customarily acquired by a 
prolonged course of specialized intellectual instruction or requiring 
invention, imagination, originality or talent in a recognized field of 
artistic or creative endeavor. Learned professionals, creative 
professionals, and computer employees are described in Sec. Sec.  
551.208, 551.209, and 551.210, respectively.


Sec.  551.208  Learned professionals.

    (a) To qualify for the learned professional exemption, an 
employee's primary duty must be the performance of work requiring 
advanced knowledge in a field of science or learning customarily 
acquired by a prolonged course of specialized intellectual instruction. 
The work must include the following three elements:
    (1) The employee must perform work requiring advanced knowledge. 
Work requiring advanced knowledge is predominantly intellectual in 
character and includes work requiring the consistent exercise of 
discretion and judgment, as distinguished from performance of routine 
mental, manual, mechanical or physical work. An employee who performs 
work requiring advanced knowledge generally uses the advanced knowledge 
to analyze, interpret or make deductions from varying facts or 
circumstances. Advanced knowledge cannot be attained at the high school 
level;
    (2) The advanced knowledge must be in a field of science or 
learning which includes the traditional professions of law, medicine, 
theology, accounting, actuarial computation, engineering, architecture, 
teaching, various types of physical, chemical and biological sciences, 
pharmacy, and other similar occupations that have a recognized 
professional status as distinguished from the mechanical arts or 
skilled trades where in some instances the knowledge is of a fairly 
advanced type, but is not in a field of science or learning; and
    (3) The advanced knowledge must be customarily acquired by a 
prolonged course of specialized intellectual instruction which 
restricts the exemption to professions where specialized academic 
training is a standard prerequisite for entrance into the profession. 
The best prima facie evidence that an employee meets this requirement 
is possession of the appropriate academic degree. However, the word 
``customarily'' means that the exemption is appropriate for employees 
in such professions who have substantially the same knowledge level and 
perform substantially the same work as the degreed employees, but who 
attained the advanced knowledge through a combination of work 
experience and intellectual instruction. For example, the learned 
professional exemption is appropriate in unusual cases where a lawyer 
has not gone to law school, or a chemist does not possess a degree in 
chemistry. However, the learned professional exemption is not 
applicable to occupations that customarily may be performed with only 
the general knowledge acquired by an academic degree in any field, with 
knowledge acquired through an apprenticeship, or with training in the 
performance of routine mental, manual, mechanical, or physical 
processes. The learned professional exemption also does not apply to 
occupations in which most employees have acquired their skill by 
experience rather than by advanced specialized intellectual 
instruction. The position of Engineering Technician is an example of 
such an occupation where the employee collects, observes, tests and 
records factual scientific data within the oversight of professional 
engineers, and performs work using knowledge acquired through on-the-
job and classroom training rather than by acquiring the knowledge 
through prolonged academic study.
    (b) Expansion of professional exemption. The areas in which the 
professional exemption may be applicable are expanding. As knowledge is 
developed, academic training is broadened and specialized degrees are 
offered in new and diverse fields, thus creating new specialists in 
particular fields of science or learning. When an advanced specialized 
degree has become a standard requirement for a particular occupation, 
that occupation may have acquired the characteristics of a learned 
profession. Accrediting and certifying organizations similar to those 
listed in this section also may be created in the future. Such 
organizations may develop similar, specialized curriculums and 
certification programs which, if a standard requirement for a 
particular occupation, may indicate that the occupation has acquired 
the characteristics of a learned profession.
    (c) Practice of law. (1) This exemption applies to an employee in a 
professional legal position requiring admission to the bar and involved 
in preparing cases for trial and/or the trial of cases before a court 
or an administrative body or persons having quasi-judicial power; 
rendering legal advice and services; preparing interpretive and 
administrative orders, rules, or regulations; drafting, negotiating, or 
examining contracts or other legal documents; drafting, preparing 
formal comments, or otherwise making substantive recommendations with 
respect to proposed legislation; editing and preparing for publication 
statutes enacted by Congress and opinions or decisions of a court, 
commission, or board; and drafting and reviewing decisions for 
consideration and adoption by agency officials.
    (2) Section 551.203 (Salary-based nonexemption) does not apply to 
the employees described in this section.
    (d) Practice of medicine. (1) An employee who holds a valid license 
or certificate permitting the practice of medicine or any of its 
branches and is actually engaged in the practice of the profession is 
exempt. The exemption applies to physicians and other practitioners 
licensed and practicing in the field of medical science and healing or 
any of the medical specialties practiced by physicians or 
practitioners. The term ``physicians'' includes medical doctors, 
including general practitioners and specialists, osteopathic physicians 
(doctors of osteopathy), podiatrists, dentists (doctors of dental 
medicine), and optometrists (doctors of optometry or bachelors of 
science in optometry).
    (2) An employee who holds the required academic degree for the 
general practice of medicine and is engaged in an internship or 
resident program pursuant to the practice of the profession is exempt. 
Employees engaged in internship or resident

[[Page 52769]]

programs, whether or not licensed to practice prior to commencement of 
the program, qualify as exempt professionals if they enter such 
internship or resident programs after the earning of the appropriate 
degree required for the general practice of their profession.
    (3) Section 551.203 (Salary-based nonexemption) does not apply to 
the employees described in this section.
    (e) Accounting. Certified public accountants generally meet the 
duties requirements for the learned professional exemption. An employee 
performing similar professional work in a position with a positive 
educational requirement and requiring the application of accounting 
theories, concepts, principles, and standards may qualify as an exempt 
learned professional. However, accounting clerks and technicians and 
other employees who normally perform a great deal of routine work 
generally will not qualify as exempt professionals.
    (f) Engineering. Engineers generally meet the duties requirements 
for the learned professional exemption. Professional engineering work 
typically involves the application of a knowledge of such engineering 
fundamentals as the strength and strain analysis of engineering 
materials and structures, the physical and chemical characteristics of 
engineering materials such as elastic limits, maximum unit stresses, 
coefficients of expansion, workability, hardness, tendency to fatigue, 
resistance to corrosion, engineering adaptability, and engineering 
methods of construction and processing. Exempt professional engineering 
work includes equivalent work performed in any of the specialized 
branches of engineering (e.g., electrical, mechanical, or materials 
engineering). On unusual occasions, engineering technicians performing 
work comparable to that performed by professional engineers on the 
basis of advanced knowledge may also be exempt. In such instances, the 
employee actually is performing the work of an occupation that 
generally requires a specialized academic degree and is performing 
substantially the same work as the degreed employee, but has gained the 
same advanced knowledge through a combination of work experience and 
intellectual instruction which has provided both theoretical and 
practical knowledge of the specialty, including knowledge of related 
disciplines and of new developments in the field.
    (g) Architecture. Architects generally meet the duties requirements 
for the learned professional exemption. Professional architectural work 
typically requires knowledge of architectural principles, theories, 
concepts, methods, and techniques; a creative and artistic sense; and 
an understanding and skill to use pertinent aspects of the construction 
industry, as well as engineering and the physical sciences related to 
the design and construction of new, or the improvement of existing, 
buildings.
    (h) Teachers. A teacher is any employee with a primary duty of 
teaching, tutoring, instructing or lecturing in the activity of 
imparting knowledge and who is employed and engaged in this activity as 
a teacher in an educational establishment by which the employee is 
employed.
    (1) A teacher performs exempt work when serving, for example, as a 
regular academic teacher; teacher of kindergarten or nursery school 
pupils; teacher of gifted or disabled children; teacher of skilled and 
semi-skilled trades and occupations; teacher engaged in automobile 
driving instruction; aircraft flight instructor; home economics 
teacher; or vocal or instrumental music instructor. A faculty member 
who is engaged as a teacher but also spends a considerable amount of 
time in extracurricular activities such as coaching athletic teams or 
acting as a moderator or advisor in such areas as drama, speech, 
debate, or journalism is engaged in teaching. Such activities are a 
recognized part of an educational establishment's responsibility in 
contributing to the educational development of the student. An 
instructor in an institution of higher education or another educational 
establishment whose primary duty is teaching, tutoring, instructing, or 
lecturing in the activity of imparting knowledge is also an exempt 
teacher.
    (2) The possession of an elementary or secondary teacher's 
certificate provides a clear means of identifying the individuals 
contemplated as being within the scope of the exemption for teaching 
professionals. Teachers who possess a teaching certificate qualify for 
the exemption regardless of the terminology (e.g., permanent, 
conditional, standard, provisional, temporary, emergency, or unlimited) 
used by appropriate certifying entities. However, a teacher's 
certificate is not generally necessary for post-secondary educational 
establishments.
    (3) Exempt teachers do not include teachers of skilled and semi-
skilled trade, craft, and laboring occupations when the paramount 
knowledge is the knowledge of and the ability to perform the trade, 
craft, or laboring occupation. Conversely, if the primary requirement 
of the post-secondary education instructor is the ability to instruct, 
as opposed to knowledge of and ability to perform a trade, craft, or 
laboring occupation, then the position may be exempt.
    (4) Section 551.203 (Salary-based nonexemption) does not apply to 
the employees described in this section.
    (i) Medical technologists. Registered or certified medical 
technologists who have successfully completed 3 academic years of pre-
professional study in an accredited college or university, plus a 4th 
year of professional course work in a school of medical technology 
approved by the Council of Medical Education of the American Medical 
Association, generally meet the duties requirements for the learned 
professional exemption.
    (j) Nurses. Registered nurses who are registered by the appropriate 
State examining board generally meet the duties requirements for the 
learned professional exemption. Licensed practical nurses and other 
similar health care employees, however, generally do not qualify as 
exempt learned professionals because possession of a specialized 
advanced academic degree is not a standard prerequisite for entry into 
such occupations.
    (k) Dental hygienists. Dental hygienists who have successfully 
completed 4 academic years of pre-professional and professional study 
in an accredited college or university approved by the Commission on 
Accreditation of Dental and Dental Auxiliary Educational Programs of 
the American Dental Association generally meet the duties requirements 
for the learned professional exemption.
    (l) Physician assistants. Physician assistants who have 
successfully completed 4 academic years of pre-professional and 
professional study, including graduation from a physician assistant 
program accredited by the Accreditation Review Commission on Education 
for the Physician Assistant, and who are certified by the National 
Commission on Certification of Physician Assistants, generally meet the 
duties requirements for the learned professional exemption.
    (m) Paralegals. Paralegals and legal assistants generally do not 
qualify as exempt learned professionals because an advanced, 
specialized academic degree is not a standard prerequisite for entry 
into the field. Although many paralegals possess general 4-year 
advanced degrees, most specialized paralegal programs are 2-year 
associate degree programs from a community college or equivalent 
institution. However, the learned professional exemption is applicable 
to paralegals who possess advanced, specialized

[[Page 52770]]

degrees in other professional fields and apply advanced knowledge in 
that field in the performance of their duties. In addition, a paralegal 
who fails to meet the professional exemption criteria may be performing 
exempt administrative work, e.g., overseeing a full range of support 
services for a large legal office.


Sec.  551.209  Creative professionals.

    (a) To qualify for the creative professional exemption, an 
employee's primary duty must be the performance of work requiring 
invention, imagination, originality, or talent in a recognized field of 
artistic or creative endeavor as opposed to routine mental, manual, 
mechanical, or physical work. The work performed must be ``in a 
recognized field of artistic or creative endeavor,'' including such 
fields as music, writing, acting, and the graphic arts. The exemption 
does not apply to work which can be produced by a person with general 
manual or intellectual ability and training. The requirement of 
``invention, imagination, originality, or talent'' distinguishes the 
creative professions from work that primarily depends on intelligence, 
diligence, and accuracy. The duties of employees vary widely, and 
exemption as a creative professional depends on the extent of the 
invention, imagination, originality, or talent exercised by the 
employee. Determination of exempt creative professional status must be 
made on a case-by-case basis. This requirement generally is met by 
actors, musicians, composers, conductors, and soloists; painters who at 
most are given the subject matter of their painting; and writers who 
choose their own subjects and hand in a finished piece of work to their 
employers. This requirement generally is not met by a person who is 
employed as a retoucher of photographs, since such work is not properly 
described as creative in character.
    (b) Federal employees engaged in the work of newspapers, magazines, 
television, or other media are not exempt creative professionals if 
they only collect, organize, and record information that is routine or 
already public, or if they do not contribute a unique interpretation or 
analysis to a news product. For example, employees who merely rewrite 
press releases or who write standard recounts of public information by 
gathering facts on routine community events are not exempt creative 
professionals. Employees also do not qualify as exempt creative 
professionals if their work product is subject to substantial control 
by the organization. However, when the work requires invention, 
imagination, originality, or talent, as opposed to work which depends 
primarily on intelligence, diligence, and accuracy, such employees may 
qualify as exempt creative professionals if their primary duty is 
performing on the air in radio, television or other electronic media; 
conducting investigative interviews; analyzing or interpreting public 
events; writing editorials, opinion columns, or other commentary; or 
acting as a narrator or commentator. Work that does not fully meet the 
creative professional exemption criteria does not preclude exemption 
under another exemption category. For example, public affairs work 
under control of the organization that does not meet the creative 
professional exemption may meet the administrative exemption.


Sec.  551.210  Computer employees.

    (a) Computer systems analysts, computer programmers, software 
engineers, or other similarly skilled workers in the computer field are 
eligible for exemption as professionals under section 13(a)(1) of the 
Act and under section 13(a)(17) of the Act. Because job titles vary 
widely and change quickly in the computer industry, job titles are not 
determinative of the applicability of this exemption.
    (b) The exemption in section 13(a)(1) of the Act applies to any 
computer employee whose annual remuneration exceeds the salary-based 
nonexemption prescribed in Sec.  551.203. The exemption in section 
13(a)(17) applies to any computer employee compensated on an hourly 
basis at a rate of basic pay (as defined in Sec.  551.203(b)) not less 
than $27.63 an hour. In addition, these exemptions apply only to 
computer employees whose primary duties consist of:
    (1) The application of systems analysis techniques and procedures, 
including consulting with users, to determine hardware, software or 
system functional specifications;
    (2) 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;
    (3) The design, documentation, testing, creation or modification of 
computer programs related to machine operating systems; or
    (4) A combination of the aforementioned duties, the performance of 
which requires the same level of skills.
    (c) Computer manufacture and repair. The exemption for employees in 
computer occupations does not include employees engaged in the 
manufacture or repair of computer hardware and related equipment. 
Employees whose work is highly dependent upon, or facilitated by, the 
use of computers and computer software programs (e.g., engineers, 
drafters and others skilled in computer-aided design software), but who 
are not primarily engaged in computer systems analysis and programming 
or other similarly skilled computer-related occupations as identified 
in paragraph (b) of this section, are also not exempt computer 
professionals.
    (d) Executive and administrative computer employees. Computer 
employees within the scope of this exemption, as well as those 
employees not within its scope, may also have executive and 
administrative duties which qualify the employees for exemption under 
this subpart. For example, systems analysts and computer programmers 
generally meet the duties requirements for the administrative exemption 
if their primary duty includes work such as planning, scheduling, and 
coordinating activities required to develop systems to solve complex 
business, scientific or engineering problems of the organization or the 
organization's customers. Similarly, a senior or lead computer 
programmer who manages the work of two or more other programmers in a 
customarily recognized organizational unit, and whose recommendations 
regarding the hiring, firing, advancement, promotion, or other change 
of status of the other programmers are given particular weight, 
generally meets the duties requirements for the executive exemption. 
Alternatively, a senior or lead computer programmer who leads a team of 
other employees assigned to complete a major project that is directly 
related to the management or general business operations of the 
employer or the employer's customers generally meets the duties 
requirements for the administrative exemption, even if the employee 
does not have direct supervisory responsibility over the other 
employees on the team.


Sec.  551.211  Effect of performing different work or duties for a 
temporary period of time on FLSA exemption status.

    (a) Applicability. Performing different work or duties for a 
temporary period of time may affect an employee's exemption status.
    (1) When applicable. This section applies only when an employee 
must perform work or duties that are not consistent with the employee's 
primary duties for an extended period, that is, for more than 30 
consecutive calendar

[[Page 52771]]

days--the ``30-day test.'' The period of performing different work or 
duties may or may not involve a different geographic duty location. The 
exemption status of an employee temporarily performing different 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 at the same level with the same 
basic duties and exemption status as the employee's position.
    (b) An agency generally may not change an employee's exemption 
status based on a snapshot of the employee's duties during a particular 
week, unless the week involves emergency work under paragraph (f) of 
this section. An agency must:
    (1) Assess an employee's temporary work or duties over a reasonable 
period of time (the 30-day test), compare them with the primary duties 
upon which the employee's exemption status is based, and determine the 
employee's exemption status as described in Sec. Sec.  551.203 through 
551.210; and
    (2) Ensure that it does not avoid reassessing, and perhaps 
changing, an employee's exemption status by breaking up periods of 
temporary work or duties with periods of having the employee perform 
his or her regular work or duties. For example, an agency may not 
assign exempt employees to perform nonexempt work or duties for 29 
consecutive calendar days, return them to their exempt duties for two 
or three days, then assign them again to perform nonexempt work for 
another 29 days.
    (c) Aggregation of more than 30 nonconsecutive calendar days over 
an extended period does not meet the 30-day test and may not be used to 
change an employee's exemption status. For example, if an exempt 
employee performs nonexempt duties 4 days in one week, 2 days in the 
following week, and so on over a period of weeks or months, the days of 
nonexempt work may not be aggregated for the purpose of changing the 
employee's exemption status.
    (d) Effect on nonexempt employees. (1) A nonexempt employee who 
must temporarily perform work or duties that are different from the 
employee's primary duties remains nonexempt for the entire period of 
temporary work or duties unless both of the following conditions are 
met:
    (i) The period of temporary work or duties exceeds 30 consecutive 
calendar days; and
    (ii) The employee's primary duties for the period of temporary work 
are exempt as defined in this part.
    (2) If a nonexempt employee becomes exempt under the criteria in 
paragraph (d)(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 calendar 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 no longer entitled to 
the FLSA overtime pay received but may be owed title 5 overtime pay, or 
its equivalent.
    (e) Effect on exempt employees. (1) An exempt employee who must 
temporarily perform work or duties that are different from the 
employee's primary duties remains exempt for the entire period of 
temporary work or duties unless both of the following conditions are 
met:
    (i) The period of temporary work or duties exceeds 30 consecutive 
calendar days; and
    (ii) The employee's primary duties for the period of temporary work 
are not exempt as defined in this part.
    (2) If an exempt employee becomes nonexempt under the criteria in 
paragraph (e)(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, or its 
equivalent, for work performed during the first 30 consecutive calendar 
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 no longer be entitled to some or all of the 
title 5, or equivalent, overtime pay received but may be owed FLSA 
overtime pay.
    (f) Emergency situation. Notwithstanding any other provision of 
this section, and regardless of an employee's grade or equivalent 
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 other than to assign qualified employees to temporarily 
perform work or duties in connection with the emergency. In such a 
designated emergency:
    (1) Nonexempt employee. A nonexempt employee remains nonexempt 
whether the employee performs nonexempt work or exempt work during the 
emergency; and
    (2) Exempt employee. 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 (f)(2)(i) and (f)(2)(ii) of this section.
    (i) Remain exempt. An exempt employee remains exempt for any 
workweek in which the employee's primary duties for the period of 
emergency work are exempt as defined in this part.
    (ii) Become nonexempt. An exempt employee becomes nonexempt for any 
workweek in which the employee's primary duties for the period of 
emergency work are nonexempt as defined in this part.


Sec.  551.212  Foreign exemption criteria.

    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.
    (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.  551.104.
    (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

[[Page 52772]]

status of such an employee as described in 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 primary duties of the employee's official position, 
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 primary duties of the employee's official 
position:
    (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 if the employee 
was permanently stationed in any nonexempt area; and
    (ii) The agency must determine the employee's exemption status for 
that workweek by applying Sec.  551.211.
    (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.  551.213  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 Sec.  
550.181(a) of this chapter, as provided in 29 U.S.C. 213(a)(16));
    (b) A pilot employed by U.S. Customs and Border Protection or its 
successor 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.  551.214  Statutory exclusion.

    A customs officer who receives overtime pay under subsection (a) or 
premium pay under subsection (b) of 19 U.S.C. 267 and under 19 CFR 
24.16 for time worked may not receive pay or other compensation for 
that work under any other provision of law.


Sec.  551.215  Fire protection activities and 7(k) coverage for FLSA 
pay and exemption determinations.

    (a) The Office of Personnel Management may determine that the 
provisions of section 7(k) of the Act apply to certain categories of 
fire protection employees based on appropriate factors, such as the 
type of premium payments they receive (see Sec.  551.501(a)(1) and (5) 
and Sec.  551.541).
    (b) Fire protection activities. Fire protection activities involve 
the performance of functions directly concerned with the response to 
and the control and extinguishment of fires; or performance of 
inspection of facilities and equipment for the primary purpose of 
reducing or eliminating fire hazards by trained firefighters eligible 
for reassignment to fire control and suppression or prevention duties; 
or provision of the primary (i.e., the first called) rescue and 
ambulance service in connection with fire protection functions.
    (c) Engaged in fire protection activities. (1) An employee 
(including a firefighter, paramedic, emergency medical technician, 
rescue worker, ambulance personnel, or hazardous materials worker) is 
considered engaged in fire protection activities for the purpose of 
determining possible application of section 7(k) of the Act as provided 
for in Sec.  551.501(a)(1) and (5) and Sec.  551.541 if the employee:
    (i) Is trained in fire suppression, has authority and 
responsibility to engage in fire suppression, and is employed by an 
organization with fire suppression as a primary mission; and
    (ii) Is engaged in the prevention, control, and extinguishment of 
fires or response to emergency situations where life, property, or the 
environment is at risk.
    (2) Subject to the requirements of paragraph (c)(1) of this 
section, the following types of employees are engaged in fire 
protection activities for the purpose of determining possible 
application of section 7(k) of the Act:
    (i) Employees in positions properly classified in the Fire 
Protection and Prevention series, including any qualified firefighter 
who is assigned to perform support functions (e.g., communications or 
dispatching functions, equipment maintenance or repair) or who is 
transferred to an administrative or supervisory position within the 
fire protection activity, except when such administrative or 
supervisory work exempts the employee under executive, administrative, 
and professional considerations;
    (ii) Employees in positions properly classified in other series, 
such as Forestry Technician, for whom fire protection functions 
constitute substantially full-time assignments throughout the year, or 
for the duration of a specified fire season within the year;
    (iii) Temporary employees hired solely to perform fire suppression 
work on an as-needed basis;
    (iv) Members of rescue and ambulance crews with fire suppression 
training, authority, and responsibility, who are part of a fire 
suppression organization, as described in paragraph (c)(1)(i) of this 
section; and
    (v) Any other employee in any workweek in which the employee 
performs fire control or suppression work for 80 percent or more of the 
total hours worked.
    (d) Not engaged in fire protection activities. Examples of types of 
employees who are not engaged in fire protection activities for the 
purpose of applying section 7(k) of the Act (as provided for in Sec.  
551.501(a)(1) and (5) and Sec.  551.541) include the following:
    (1) Professional engineers, engineering technicians, and similar 
employees involved in fire protection research or in the design and 
development of fire protection and prevention equipment and materials;
    (2) Employees who perform functions that support fire protection 
activities but who are not trained, qualified firefighters eligible for 
reassignment to fire control and suppression or prevention duties. 
Supporting functions (such as maintenance of fire apparatus, equipment, 
alarm systems, etc., or communications and dispatching work or 
preparation of records and reports) are included when performed by 
firefighters but are not included when performed by mechanics, 
communications systems and radio operators, clerks, or other employees;
    (3) Employees whose primary duties are not related to fire 
protection but who perform fire control or suppression work on an as 
needed basis, provided that the fire control or suppression work 
constitutes less than 80 percent of the employees' hours of work within 
any workweek; and
    (4) Employees on rescue and ambulance crews who:
    (i) Are not trained in fire suppression;
    (ii) Do not have fire suppression authority and responsibility; or
    (iii) Are employed by an organization, such as a hospital, that 
does not have fire suppression as a primary mission.


Sec.  551.216  Law enforcement activities and 7(k) coverage for FLSA 
pay and exemption determinations.

    (a) The Office of Personnel Management may determine that the 
provisions of section 7(k) of the Act apply to certain categories of 
law enforcement employees based on appropriate factors, such as the 
type of premium payments they receive (see Sec.  551.501(a)(1) and (5) 
and Sec.  551.541).

[[Page 52773]]

    (b) Law enforcement activities. Law enforcement activities involve 
work directly and primarily concerned with:
    (1) Patrol and control functions that include patrolling an area to 
enforce law and order and to protect the lives, property, and civil 
rights of individuals through the prevention and detection of criminal 
acts; responding to complaints, violations, accidents, and emergencies; 
investigating for clues at the scene of a crime, interviewing 
witnesses, and evaluating evidence to locate suspects; and apprehending 
and arresting persons suspected of, or wanted for, criminal violations 
under a statutorily prescribed arrest authority;
    (2) Executing the orders of a Federal court, including serving 
civil writs and criminal warrants issued by Federal courts; tracing and 
arresting persons wanted by warrants; and seizing and disposing of 
property under court orders;
    (3) Planning and conducting investigations relating to alleged or 
suspected violations of criminal laws, including the arrest of 
suspected or wanted persons under a statutorily prescribed arrest 
authority;
    (4) Security functions in a correctional institution involving 
direct custody and safeguarding of inmates charged with or convicted of 
violations of criminal laws; or
    (5) Rescue and ambulance functions that provide the primary (i.e., 
the first called) service in connection with law enforcement activities 
described above.
    (c) Engaged in law enforcement activities. The following employees 
are engaged in law enforcement activities for the purpose of 
determining possible application of section 7(k) of the Act as provided 
for in Sec.  551.501(a)(1) and (5) and Sec.  551.541:
    (1) Employees in positions properly classified in the Police 
series, and employees in positions that would be otherwise classifiable 
in that series if covered by classification criteria of chapter 51 of 
title 5, U.S. Code;
    (2) Employees in positions properly classified as Border Patrol 
Agents, Customs Patrol Officers, and other employees whose primary 
duties involve similar patrol and control functions performed for the 
purpose of detecting and apprehending persons suspected of violating 
criminal laws;
    (3) Employees in positions properly classified in the U.S. Marshal 
series;
    (4) Employees in positions properly classified in the Criminal 
Investigating series, and other employees performing criminal 
investigation as their primary duty, except as provided for in Sec.  
551.213 (Exemption of employees receiving availability pay);
    (5) Employees in positions properly classified in the Correctional 
Officer series, Guard series, or other series, whose primary duty is to 
maintain custody of inmates of a correctional institution; and
    (6) Employees on rescue and ambulance crews that provide the 
primary service in connection with law enforcement functions, provided 
that crew members have received intensive training in specialized 
rescue and first aid procedures applicable to law enforcement 
emergencies (e.g., gunshot wounds, riot and accident victims) and the 
crew responds to actual or potential law enforcement emergencies on a 
regular and recurring basis.
    (d) Not engaged in law enforcement activities. The following 
employees are not engaged in law enforcement activities for the purpose 
of pay under section 7(k) of the Act as provided for in Sec.  
551.501(a)(1) and (5) and Sec.  551.541:
    (1) Employees whose primary duties concern the protection of 
Government property from hazards such as sabotage, espionage, theft, 
fire, or accidental or willful damage and in so doing, control the 
movement of persons and protect the lives and property of persons on 
Government property (e.g., guards or other employees performing similar 
functions);
    (2) Employees who perform work concerned with the determination of 
the applicability of or compliance with laws and regulations when the 
duties primarily involve:
    (i) Examining or inspecting products, premises, property, or papers 
of persons or firms to enforce or obtain compliance with laws and 
regulations (e.g., immigration and customs examining or inspecting; 
mine safety and health examining or inspecting; alcohol, tobacco and 
firearms examining or inspecting; plant protection and quarantine 
examining or inspecting); or
    (ii) Planning and conducting investigations covering the character, 
practices, suitability or qualifications of persons or organizations 
seeking, claiming or receiving Federal benefits, permits, or employment 
(e.g., general investigations work);
    (3) Employees who work within correctional institutions but who do 
not have direct custody and safeguarding of inmates as their primary 
duty; and
    (4) Members of rescue or ambulance crews that provide those 
services in connection with law enforcement activities only in unusual 
situations (e.g., when the primary crews are unavailable or when an 
emergency situation requires more crews than can be provided by the 
primary service).

0
4. Amend Sec.  551.541 of subpart E by revising paragraphs (a) and (b) 
to read as follows:

Subpart E--Overtime Pay Provisions


Sec.  551.541  Employees engaged in fire protection activities or law 
enforcement activities.

    (a) An employee engaged in fire protection activities or law 
enforcement activities (as described in Sec. Sec.  551.215 and 551.216, 
respectively) who receives compensation for those activities under 5 
U.S.C. 5545(c)(1) or (2) or 5545b, or does not meet the definition of 
``employee'' in 5 U.S.C. 5541(2) for the purposes of 5 U.S.C. 5542, 
5543, and 5544, is subject to section 7(k) of the Act and this section. 
(See Sec.  551.501(a)(1) and (5)). Such an employee shall be paid at a 
rate equal to one and one-half times the employee's hourly regular rate 
of pay for those hours in a tour of duty which exceed the overtime 
standard for a work period specified in section 7(k) of the Act.
    (b) The tour of duty of an employee covered by paragraph (a) of 
this section shall include all time the employee is on duty. Meal 
periods and sleep periods are included in the tour of duty except as 
otherwise provided in Sec. Sec.  551.411(c) and 551.432(b).
* * * * *

0
5. Add paragraph (c) to Sec.  551.601 to read as follows:

Subpart F--Child Labor


Sec.  551.601  Minimum age standards.

* * * * *
    (c) All work in fire suppression is deemed hazardous for the 
employment of individuals under 18 years of age. All work in fire 
protection and prevention is particularly hazardous for the employment 
of individuals between 16 and 18 years of age, except the following:
    (1) Work in offices or in repair or maintenance shops without 
exposure to hazardous materials;
    (2) Work in the construction, operation, repair, or maintenance of 
living and administrative quarters in firefighting camps without 
exposure to hazardous materials;
    (3) Work in forest protection, such as clearing fire trails or 
roads, piling and burning slash, maintaining firefighting equipment, or 
acting as fire lookout or fire patrolman away from the actual logging 
operations, provided that this provision shall not apply to the felling 
or bucking of timber, the collecting or transporting of logs, the 
operation of power-driven machinery, the handling or use of explosives, 
and work on trestles;

[[Page 52774]]

    (4) Work in the clean-up service outside of a structure after a 
fire has been declared by the fire official in charge to be under 
control; and
    (5) Work assisting in the administration of first aid.

0
6. Revise subpart G 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 Filing an FLSA claim.
551.706 Responsibilities.
551.707 Withdrawal or cancellation 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 complaints 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 at any time file a complaint under the 
child labor provisions of the Act or an FLSA claim 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 and for retaining 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 NGP, the claimant must use that NGP 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, Sec. Sec.  551.704 
through 551.710) 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, but not both simultaneously, 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 NGP.
    (c) Judicial review. Nothing in this subpart limits the right of a 
claimant to bring an action in an appropriate United States court. 
Filing a claim with an agency or with OPM does not satisfy the statute 
of limitations governing FLSA claims filed in 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 may not participate in OPM interviews unless 
specifically requested to do so by OPM. 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  Filing an FLSA claim.

    (a) Filing an FLSA claim. A claimant may file an FLSA claim with 
either the agency employing the claimant during the claim period or 
with OPM, but a claimant cannot pursue the same claim with both at the 
same time. OPM encourages a claimant to obtain a decision on the claim 
from the agency before filing the claim with OPM. However, this is a 
matter of personal discretion and a claimant is not required to do 
this; a claimant may use either avenue. A claimant who receives an 
unfavorable decision on a claim from the agency may still file the 
claim with OPM. However, a claimant may not file the claim with the 
agency after receiving an unfavorable decision from OPM. An OPM 
decision on a claim is final and is not subject to further 
administrative review.
    (b) FLSA claim filed with agency. An FLSA claim filed with an 
agency should be made according to appropriate agency procedures. At 
the request of the claimant, 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 (c) of this 
section.
    (c) 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

[[Page 52775]]

the claimant during the claim period, the position (job title, series, 
and grade, or equivalent level) 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.


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 the claimant or the claimant's 
representative requests additional time and 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 cancelled 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 cancelled 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) Upon a claimant's request, and subject to any Privacy Act 
requirements, an agency must provide a claimant with information 
relevant to the claim.
    (4) The agency must provide any information requested by OPM within 
15 workdays after the date of the request, unless the agency requests 
additional time and OPM grants a longer period of time in which to 
provide the requested information.


Sec.  551.707  Withdrawal or cancellation of an FLSA claim.

    (a) Withdrawal. OPM may grant a request from the claimant or 
claimant's representative to withdraw an FLSA claim at any time before 
OPM issues its decision. The claimant or the claimant's representative 
must submit the request in writing to OPM.
    (b) Cancellation. OPM may, at its discretion, cancel an FLSA claim 
if the claimant or the claimant's representative fails to provide 
requested information within 15 workdays after the date of the request, 
unless the claimant or the claimant's representative requests 
additional time and OPM grants a longer period of time in which to 
provide the requested information. OPM may, at its discretion, 
reconsider a cancelled 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.

    (a) 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. 
However, at its discretion, OPM may reconsider its FLSA claim decision 
when material information was not considered or there was a material 
error of law, regulation, or fact in the original decision. The request 
must be submitted in writing and received by OPM within 45 calendar 
days after the date of the decision. At its unreviewable discretion, 
OPM may waive the time limit.
    (b) 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.
    (c)(1) 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 to 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.
    (2) The agency should identify all similarly situated current and 
former employees to ensure that they are treated in a manner consistent 
with the decision on FLSA coverage, informing 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 before disclosing the 
information in an FLSA claim file to the parties concerned. 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.

[[Page 52776]]

    (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 Classification Appeals and 
FLSA Program, 1900 E Street, NW., Washington, DC 20415-0001.

[FR Doc. E7-18027 Filed 9-14-07; 8:45 am]
BILLING CODE 6325-39-P