The fair labor standards act of 1938, as amended




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6 Similar language was added to the Act by the Fair Labor Standards Amend-


ments of 1966. Those amendments also excluded from the definition of employee

i.any individual who is employed by an employer engaged in agriculture if such in-

dividual (A) is employed as a hand harvest laborer and is paid on a piece rate basis in

an operation which has been, and is customarily and generally recognized as having

been, paid on a piece rate basis in the region of employment, (B) commutes daily

from his permanent residence to the farm on which he is so employed, and © has

been employed in agriculture less than thirteen weeks during the preceding calen-

dar year. These individuals are now included.

7 As added by section 4(a) of the Fair Labor Standards Amendments of 1985, ef-

fective April 15, 1986.

8 As amended by section 3(b) of the Fair Labor Standards Amendments of 1949.

9 As amended by section 3© of the Fair Labor Standards Amendments of 1949.

10 Reorganization Plan No. 2 of 1946 provided that the functions of the Children’s

Bureau and of the Chief of the Children’s Bureau under the Act as originally en-

acted be transferred to the Secretary of Labor.

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declare to be particularly hazardous for the employment of

children between such ages or detrimental to their health

or well-being; but oppressive child labor shall not be deemed

to exist by virtue of the employment in any occupation of

any person with respect to whom the employer shall have

on file an unexpired certificate issued and held pursuant to

regulations of the Secretary of Labor 11 certifying that such

person is above the oppressive child labor age. The Secre-

tary of Labor 12 shall provide by regulation or by order that

the employment of employees between the ages of four-

teen and sixteen years in occupations other than manufac-

turing and mining shall not be deemed to constitute op-

pressive child labor if and to the extent that the Secretary

of Labor 13 determines that such employment is confined to

periods which will not interfere with their schooling and to

conditions which will not interfere with their health and

well-being.

(m) Wage paid to any employee includes the reason-

able cost, as determined by the Secretary of Labor, 14 to the

employer of furnishing such employee with board, lodging,

or other facilities, if such board, lodging, or other facilities

are customarily furnished by such employer to his employ-

ees: Provided, That the cost of board, lodging or other

facilities shall not be included as a part of the wage paid

to any employee to the extent it is excluded therefrom

under the terms of a bona fide collective-bargaining

agreement applicable to the particular employee: Pro-

vided further, That the Secretary is authorized to deter-

mine the fair value of such board, lodging, or other fa-

cilities for defined classes of employees and in defined

areas, based on average cost to the employer or to groups

of employers similarly situated, or average value to

groups of employees, or other appropriate measures of

fair value. Such evaluations, where applicable and per-

tinent, shall be used in lieu of actual measure of cost in

determining the wage paid to any employee. In

determining the wage an employer is required to pay a tipped

employee, the amount paid such employee by the

employee’s employer shall be an amount equal to —

(1) the cash wage paid such employee which for

purposes of such determination shall be not less than

the cash wage required to be paid such an employee

on the date of the enactment of this paragraph; and

(2) an additional amount on account of the tips

received by such employee which amount is equal to

the difference between the wage specified in

paragraph (1) and the wage in effect under section 6(a)(1).

The additional amount on account of tips may not

exceed the value of the tips actually received by an

employee. The preceding two sentences shall not apply with

respect to any tipped employee unless such employee has

been informed by the employer of the provisions of this

subsection, and all tips received by such employee have

been retained by the employee, except that this subsection

shall not be construed to prohibit the pooling of tips among

employees who customarily and regularly receive tips. 15

(n) Resale shall not include the sale of goods to be

used in residential or farm building construction, repair, or

maintenance: Provided, That the sale is recognized as a

bona fide retail sale in the industry. 16

(o) Hours worked. -- In determining for the purposes

of sections 6 and 7 the hours for which an employee is em-

ployed, there shall be excluded any time spent in changing

clothes or washing at the beginning or end of each work-

day which was excluded from measured working time dur-

ing the week involved by the express terms of or by custom

or practice under a bona fide collective-bargaining agree-

ment applicable to the particular employee. 17

(p) American vessel includes any vessel which is

documented or numbered under the laws of the United

States.

(q) Secretary. Means the Secretary of Labor.

® (1) i1Enterpriselr means the related activities

performed (either through unified operation or com-

mon control) by any person or persons for a common

business purpose, and includes all such activities

whether performed in one or more establishments

or by one or more corporate or other organizational

units including departments of an establishment

operated through leasing arrangements, but shall not

include the related activities performed for such en-

terprise by an independent contractor. Within the

meaning of this subsection, a retail or service estab-

lishment which is under independent ownership shall

not be deemed to be so operated or controlled as to be

other than a separate and distinct enterprise by rea-

son of any arrangement, which includes, but is not

necessarily limited to, an agreement,

(A) that it will sell, or sell only, certain

goods specified by a particular manufacturer, dis-

tributor, or advertiser, or

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11 Reorganization Plan No. 2 of 1946 provided that the functions of the Children’s


Bureau and of the Chief of the Children’s Bureau under the Act as originally en-

acted be transferred to the Secretary of Labor.

12 Ibid.

13 Ibid.


14 As amended by Reorganization Plan No. 6 of 1950, set out under section 4(a).

15 As amended by section 2105(b) of the Small Business Job Protection Act of 1996

(110 Stat. 1755). The required cash wage, $2.13, is 50% of the $4.25 minimum wage

specified in section 6(a)(1) on the date of enactment. of the paragraph, August 20,

1996. Tip credit was restricted to not more than 50% of the minimum wage between

April 1, 1991 and October 1, 1996; 45% between April 1, 1990 and March 31, 1991;

and 40% prior to April 1, 1990.

16 Section 3(d) of the Fair Labor Standards Amendments of 1949. (The original

language of section 3(n) was restored by the Fair Labor Standards Amendments of

1966.)


17 Ibid..4

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(B) that it will join with other such estab-

lishments in the same industry for the purpose

of collective purchasing, or

(C) that it will have the exclusive right to

sell the goods or use the brand name of a manu-

facturer, distributor, or advertiser within a speci-

fied area, or by reason of the fact that it occupies

premises leased to it by a person who also leases

premises to other retail or service establishments.

(2) For purposes of paragraph (1), the activities

performed by any person or persons Š

(A) in connection with the operation of a hos-

pital, an institution primarily engaged in the care

of the sick, the aged, the mentally ill or defective who

reside on the premises of such institution, a school

for mentally or physically handicapped or gifted

children, a preschool, 18 elementary or secondary

school, or an institution of higher education (regard-

less of whether or not such hospital, institution, or

school is operated for profit or not for profit), or

(B) in connection with the operation of a

street, suburban or interurban electric railway, or

local trolley or motorbus carrier, if the rates and

services of such railway or carrier are subject to

regulation by a state or local agency (regardless of

whether or not such railway or carrier is public or

private or operated for profit or not for profit, or

(C) in connection with the activities of a

public agency, shall be deemed to be activities per-



formed for a business purpose.

(s) (1) “Enterprise engaged in commerce or in the

production of goods for commerce” means an

enterprise that —

(A) (i) has employees engaged in

commerce or in the production of goods for

commerce, or that has employees handling,

selling, or otherwise working on goods or

materials that have been moved in or

produced for commerce by any person; and

(ii) is an enterprise whose annual

gross volume of sales made or business

done is not less than $500,000 (exclusive

of excise taxes at the retail level that are

separately stated);19

(B) is engaged in the operation of a hos-

pital, an institution primarily engaged in the care

of the sick, the aged, or the mentally ill or de-

fective who reside on the premises of such in-

stitution, a school for mentally or physically

handicapped or gifted children, a preschool,

elementary or secondary school, or an institution

of higher education (regardless of whether or

not such hospital, institution, or school is pub-

lic or private or operated for profit or not for

profit); or

(C) is an activity of a public agency.

(2) Any establishment that has as its only regu-

lar employees the owner thereof or the parent,

spouse, child, or other member of the immediate

family of such owner shall not be considered to be

an enterprise engaged in commerce or in the pro-

duction of goods for commerce or a part of such an

enterprise. The sales of such an establishment shall

not be included for the purpose of determining the

annual gross volume of sales of any enterprise for

the purpose of this subsection.

(t) Tipped employee means any employee engaged

in an occupation in which he customarily and regularly

receives more than $30 a month in tips. 20

(u) Man-day. means any day during which an em-

ployee performs any agricultural labor for not less than

one hour.

(v) Elementary school means a day or residential

school which provides elementary education, as deter-

mined under State law.

(w) Secondary school means a day or residential

school which provides secondary education, as determined

under State law.

(x) Public agency means the Government of the

United States; the government of a State or political sub-

division thereof; any agency of the United States (in-

cluding the United States Postal Service and Postal Rate

Commission), a State, or a political subdivision of a

State, or any interstate governmental agency.

Administration 21

SEC. 4. (a) There is hereby created in the Department

of Labor a Wage and Hour Division which shall be under

the direction of an Administrator, to be known as the

Administrator of the Wage and Hour Division (in this Act
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18 i8A preschool was added by the Education Amendments of 1972.

19 As amended by section 3(a) of the Fair Labor Standards Amendments of 1989.

Prior to April 1, 1990, the dollar volume test for enterprise coverage (except in the

case of an enterprise comprised exclusively of one or more retail or service estab-

lishments; or one engaged in construction or reconstruction; or one engaged in laun-

dering, cleaning, or repairing clothing or fabrics; or one described in section 3(s)(1)(B)

or ©) was $250,000. For retail enterprises, the dollar volume test was $362,500.

There was no dollar volume test for the other enterprises.

20 As amended by section 3(a) of the Fair Labor Standards Amendments of 1977,

effective January 1, 1978. Prior to January 1, 1978, the dollar amount was $20.

21 Heading revised to reflect changes made by Reorganization Plan No. 6 of 1950.


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referred to as the “Administrator”). The Administrator

shall be appointed by the President, by and with the advice

and consent of the Senate, and shall receive compensation

at the rate of $ ___________ 22 a year.

Excerpts From Reorganization Plan No. 6 of

1950, 64 Stat. 1263

“Except as otherwise provided [with respect to

hearing examiners], there are hereby transferred to the

Secretary of Labor all functions of all other officers of

the Department of Labor and all functions of all agen-

cies and employees of such Department* * *. The Sec-

retary of Labor may from time to time make such pro-

visions as he shall deem appropriate authorizing the

performance by any other officer, or by any agency or

employee, of the Department of Labor of any function

of the Secretary, including any function transferred to

the Secretary by the provisions of this reorganization

plan.”

(b) The Secretary of Labor 23 may, subject to the civil



service laws, appoint such employees as he deems neces-

sary to carry out his functions and duties under this Act

and shall fix their compensation in accordance with the Clas-

sification Act of 1949 24 as amended. The Secretary 25 may

establish and utilize such regional, local, or other agencies,

and utilize such voluntary and uncompensated services, as

may from time to time be needed. Attorneys appointed

under this section may appear for and represent the Sec-

retary 26 in any litigation, but all such litigation shall be sub-

ject to the direction and control of the Attorney General.

In the appointment, selection, classification, and promotion

of officers and employees of the Secretary, 27 no political test

or qualification shall be permitted or given consideration,

but all such appointments and promotions shall be given

and made on the basis of merit and efficiency.

(c) The principal office of the Secretary 28 shall be in the

District of Columbia, but he or his duly authorized repre-

sentative may exercise any or all of his powers in any place.

(d) (1) The Secretary 29 shall submit annually in Janu-

ary a report to the Congress covering his activities for

the preceding year and including such information, data,

and recommendations for further legislation in connec-

tion with the matters covered by this Act as he may find

advisable. Such report shall contain an evaluation and

appraisal by the Secretary of the minimum wages and

overtime coverage established by this Act, together with

his recommendations to the Congress. In making such

evaluation and appraisal, the Secretary shall take into

consideration any changes which may have occurred in

the cost of living and in productivity and the level of wages

in manufacturing, the ability of employers to absorb wage

increases, and such other factors as he may deem perti-



nent. 30 Such report shall also include a summary of

the special certificates issued under section 14(b).

(2) The Secretary shall conduct studies on the

justification or lack thereof for each of the special ex-

emptions set forth in section 13 of this Act, and the

extent to which such exemptions apply to employees

of establishments described in subsection (g) of such

section and the economic effects of the application of

such exemptions to such employees. The Secretary

shall submit a report of his findings and recom-

mendations to the Congress with respect to the stud-

ies conducted under this paragraph not later than

January 1, 1976.

(3) The Secretary shall conduct a continuing

study on means to prevent curtailment of employment

opportunities for manpower groups which have had

historically high incidences of unemployment (such

as disadvantaged minorities, youth, elderly, and such

other groups as the Secretary may designate). The

first report of the results of such study shall be trans-

mitted to the Congress not later than one year after

the effective date of the Fair Labor Standards Amend-

ments of 1974. Subsequent reports on such study shall

be transmitted to the Congress at two-year intervals

after such effective date. Each such report shall in-

clude suggestions respecting the Secretary™s author-

ity under section 14 of this Act.

(e) Whenever the Secretary has reason to believe that

in any industry under this Act the competition of for-

eign producers in United States markets or in markets

abroad, or both, has resulted, or is likely to result, in

increased unemployment in the United States, he shall

undertake an investigation to gain full information with

respect to the matter. If he determines such increased

unemployment has in fact resulted, or is in fact likely

to result, from such competition, he shall make a full

and complete report of his findings and determinations

to the President and to the Congress: Provided, That

he may also include in such report information on the

increased employment resulting from additional exports

in any industry under this Act as he may determine to

be pertinent to such report.
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22 Pursuant to 5 U.S.C. 5316, the Administrator of the Wage and Hour Division is

classified under Level V of the Executive Schedule, for which the annual rate of

basic pay is determined under 2 U.S.C. Chapter 11, as adjusted by 5 U.S.C. 5318.

23 As amended by section 404 of Reorganization Plan No. II of 1939 (53 Stat. 1436)

and by Reorganization Plan No. 6 of 1959 (64 Stat. 1263).

24 As amended by section 1104 of the Act of October 23, 1949 (63 Stat. 972).

25 See footnote 23.

26 Ibid.

27 Ibid.


28 As amended by Reorganization Plan No. 6 of 1950.

29 Ibid. 30 Section 2 of the Fair Labor Standards Amendments of 1955.


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(f) The Secretary is authorized to enter into an agree-

ment with the Librarian of Congress with respect to

individuals employed in the Library of Congress to

provide for the carrying out of the Secretary™s functions

under this Act with respect to such individuals. Not-

withstanding any other provision of this Act, or any

other law, the Civil Service Commission 31 is authorized

to administer the provisions of this Act with respect to

any individual employed by the United States (other

than an individual employed in the Library of Congress,

United States Postal Service, Postal Rate Commission,

or the Tennessee Valley Authority). Nothing in this sub-

section shall be construed to affect the right of an em-

ployee to bring an action for unpaid minimum wages, or

unpaid overtime compensation, and liquidated damages

under section 16(b) of this Act.
Special Industry Committees for
American Samoa

SEC. 5 . 32 (a) The Secretary of Labor 33 shall as soon as

practicable appoint a special industry committee to recom-

mend the minimum rate or rates of wages to be paid under

section 6 to employees in American Samoa 34 engaged in

commerce or in the production of goods for commerce or

employed in any enterprise engaged in commerce or in

the production of goods for commerce, or the Secretary 35

may appoint separate industry committees to recommend

the minimum rate or rates of wages to be paid under sec-

tion 6 to employees therein engaged in commerce or in the

production of goods for commerce or employed in any en-

terprise engaged in commerce or in the production of

goods for commerce in particular industries. An industry

committee appointed under this subsection shall be com-

posed of residents of American Samoa where the employ-

ees with respect to whom such committee was appointed

are employed and residents of the United States outside of

American Samoa. In determining the minimum rate or

rates of wages to be paid, and in determining classifica-

tions, such industry committees 36 shall be subject to the

provisions of section 8.

(b) An industry committee shall be appointed by the

Secretary 37 without any regard to any other provisions of

law regarding the appointment and compensation of em-

ployees of the United States. It shall include a number of

disinterested persons representing the public, one of whom

the Secretary 38 shall designate as chairman, a like number

of persons representing employees in the industry, and a

like number representing employers in the industry. In

the appointment of the persons representing each group,

the Secretary 39 shall give due regard to the geographical

regions in which the industry is carried on.

(c) Two-thirds of the members of an industry commit-

tee shall constitute a quorum, and the decision of the com-

mittee shall require a vote of not less than a majority of all

its members. Members of an industry committee shall re-

ceive as compensation for their services a reasonable per

diem, which the Secretary 40 shall by rules and regulations

prescribe, for each day actually spent in the work of the

committee, and shall in addition be reimbursed for their

necessary traveling and other expenses. The Secretary 41

shall furnish the committee with adequate legal, steno-

graphic, clerical, and other assistance, and shall by rules

and regulations prescribe the procedure to be followed by

the committee.

(d) The Secretary 42 shall submit to an industry commit-

tee from time to time such data as he may have available

on the matters referred to it, and shall cause to be brought

before it in connection with such matters any witnesses

whom he deems material. An industry committee may sum-

mon other witnesses or call upon the Secretary 43 to furnish

additional information to aid it in its deliberations.

Minimum Wages

SEC. 6. (a) Every employer shall pay to each of his

employees who in any workweek is engaged in commerce

or in the production of goods for commerce, or is employed



in an enterprise engaged in commerce or in the produc-

tion of goods for commerce, wages at the following rates:

(1) except as otherwise provided in this section,

not less than $4.25 an hour during the period ending

on September 30, 1996, not less than $4.75 an hour

during the year beginning on October 1, 1996, and

not less than $5.15 an hour beginning September 1,

19 97 ;44


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31 The Civil Service Commission was renamed the Office of Personnel Management by Reorganization Plan No. 2 of 1978 (92 Stat. 3783).

32 Section 5 as amended by section 3© of the Act of June 26, 1940 (54 Stat. 615); by


section 5 of the Fair Labor Standards Amendments of 1949; by section 4 of the Fair

Labor Standards Amendments of 1961; by section 5 of the Fair Labor Standards

Amendments of 1974; by section 4(a) of the Fair Labor Standards Amendments of

1989; and as further amended as noted. Paragraphs (b), (c), and (d), (except for the

substitution of “Secretary” for “Administrator” read as in the original Act.

33 See footnote 28.

34 As amended by section 4(a)(1) of the Fair Labor Standards Amendments of 1989.

Prior to November 17, 1989, special industry committee procedures also applied to

Puerto Rico and the Virgin Islands, until such time as the mainland minimum wage

level was reached.

35 See footnote 28.

36 As amended by section 5(a) of the Fair Labor Standards Amendments of 1955.

37 See footnote 28.

38 Ibid.


39 Ibid.

40 Ibid.


41 Ibid.

42 Ibid.


43 Ibid.

44 As amended by the Minimum Wage Increase Act of 1996 (Section 2104 of the

Small Business Job Protection Act of 1996).

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(2) if such employee is a home worker in Puerto

Rico or the Virgin Islands, not less than the minimum

piece rate prescribed by regulation or order; or, if no such

minimum piece rate is in effect, any piece rate adopted

by such employer which shall yield, to the proportion or

class of employees prescribed by regulation or order, not

less than the applicable minimum hourly wage rate. Such

minimum piece rates or employer piece rates shall be

commensurate with, and shall be paid in lieu of, the mini-

mum hourly wage rate applicable under the provisions

of this section. The Secretary of Labor, 45 or his autho-

rized representative, shall have power to make such regu-

lations or orders as are necessary or appropriate to carry

out any of the provisions of this paragraph, including the

power without limiting the generality of the foregoing,

to define any operation or occupation which is performed

by such home work employees in Puerto Rico or the Vir-

gin Islands; to establish minimum piece rates for any op-

eration or occupation so defined; to prescribe the method

and procedure for ascertaining and promulgating mini-

mum piece rates; to prescribe standards for employer

piece rates, including the proportion or class of employ-

ees who shall receive not less than the minimum hourly

wage rate; to define the term iehome workerla; and to pre-

scribe the conditions under which employers, agents,

contractors, and subcontractors shall cause goods to be

produced by home workers; 46

(3) if such employee is employed in American

Samoa, in lieu of the rate or rates provided by this

subsection or subsection (b), not less than the appli-

cable rate established by the Secretary of Labor in

accordance with recommendations of a special indus-

try committee or committees which he shall appoint

pursuant to sections 5 and 8. The minimum wage

rate thus established shall not exceed the rate prescribed

in paragraph (1) of this subsection; 47

(4) if such employee is employed as a seaman on

an American vessel, not less than the rate which will

provide to the employee, for the period covered by the

wage payment, wages equal to compensation at the

hourly rate prescribed by paragraph (1) of this subsec-

tion for all hours during such period when he was actu-

ally on duty (including periods aboard ship when the

employee was on watch or was, at the direction of a su-

perior officer, performing work or standing by, but not

including off-duty periods which are provided pursu-

ant to the employment agreement); or

(5) if such employee is employed in agriculture,

not less than the minimum wage rate in effect under

paragraph (1) after December 31, 1977.

(b) Every employer shall pay to each of his employees

(other than an employee to whom subsection (a) (5) ap-

plies) who in any workweek is engaged in commerce or

in the production of goods for commerce, or is employed

in an enterprise engaged in commerce or in the produc-

tion of goods for commerce, and who in such workweek is

brought within the purview of this section by the amend-

ments made to this Act by the Fair Labor Standards

Amendments of 1966, title IX of the Education Amend-

ments of 1972, or the Fair Labor Standards Amendments

of 1974, wages at the following rate: Effective after

December 31, 1977, not less than the minimum wage

rate in effect under subsection (a)(1).

(c)* * * (Repealed)



[Note: Section 6©, relating to minimum wage

requirements in Puerto Rico, was phased out by

sec-tion 4(b)(2) of the Fair Labor Standards Amendments of

1989 (103 Stat. 940), which raised the minimum wage

rate for all covered employers in Puerto Rico up to the

rate prescribed by section 6(a)(1), effective no later than

April 1, 1996, and was stricken by the Minimum Wage

Increase Act of 1996 (Section 2104© of the Small

Busi-ness Job Protect ion Act of 1996).]

(d) 48 (1) No employer having employees subject to any

provisions of this section shall discriminate, within

any establishment in which such employees are em-

ployed, between employees on the basis of sex by

paying wages to employees in such establishment at

a rate less than the rate at which he pays wages to

employees of the opposite sex in such establishment

for equal work on jobs the performance of which

requires equal skill, effort, and responsibility, and

which are performed under similar working condi-

tions, except where such payment is made pursuant

to (i) a seniority system; (ii) a merit system; (iii) a

system which measures earnings by quantity or qual-

ity of production; or (iv) a differential based on any

other factor other than sex: Provided, That an em-

ployer who is paying a wage rate differential in viola-

tion of this subsection shall not, in order to comply

with the provisions of this subsection, reduce the wage

rate of any employee.

(2) No labor organization, or its agents, repre-

senting employees of an employer having employees
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45 See footnote 28.

46 Section 3(f) of the Act of June 26, 1940 (54 Stat. 616).

47 Section 2 of the American Samoa Labor Standards Amendments of 1956, as

amended by section 5 of the Fair Labor Standards Amendments of 1961, and by

section 4(b)(1)(A) of the Fair Labor Standards Amendments of 1989..8

48 Subsection (d) added by Equal Pay Act of 1963, 77 Stat. 56 (effective on and after

June 11, 1964 except for employees covered by collective bargaining agreements in



certain cases).
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subject to any provisions of this section shall cause

or attempt to cause such an employer to discriminate

against an employee in violation of paragraph (1) of

this subsection.

(3) For purposes of administration and enforce-

ment, any amounts owing to any employee which have

been withheld in violation of this subsection shall be

deemed to be unpaid minimum wages or unpaid over-

time compensation under this Act.

(4) As used in this subsection, the term i.labor

organizationln means any organization of any kind,

or any agency or employee representation committee

or plan, in which employees participate and which

exists for the purpose, in whole or in part, of dealing

with employers concerning grievances, labor disputes,

wages, rates of pay, hours of employment, or condi-

tions of work.

(e) (1) Notwithstanding the provisions of section 13

of this Act (except subsections (a)(1) and (f) thereof),

every employer providing any contract services (other

than linen supply services) under a contract with the

United States or any subcontract thereunder shall pay

to each of his employees whose rate of pay is not gov-

erned by the Service Contract Act of 1965 (41 U.S.C.

351Œ357) or to whom subsection (a)(1) of this section is

not applicable, wages at rates not less than the rates pro-

vided for in subsection (b) of this section.

(2) Notwithstanding the provisions of section 13

of this Act (except subsections (a)(1) and (f) thereof) and

the provisions of the Service Contract Act of 1965, every

employer in an establishment providing linen supply

services to the United States under a contract with the

United States or any subcontract thereunder shall pay

to each of his employees in such establishment wages at

rates not less than those prescribed in subsection (b),

except that if more than 50 per centum of the gross an-

nual dollar volume of sales made or business done by

such establishment is derived from providing such linen

supply services under any such contracts or subcon-

tracts, such employer shall pay to each of his employees

in such establishment wages at rates not less than those

prescribed in subsection (a)(1) of this section.

(f) Any employee -

(1) who in any workweek is employed in domes-

tic service in a household shall be paid wages at a rate

not less than the wage rate in effect under section 6(b)

unless such employee’s compensation for such service

would not because of section 209(g) of the Social Secu-

rity Act constitute wages for the purposes of title II of

such Act, or

(2) who in any workweek -

(A) is employed in domestic service in one

or more households, and

(B) is so employed for more than 8 hours in

the aggregate,

shall be paid wages for such employment in such work-

week at a rate not less than the wage rate in effect

under section 6(b).

(g)49 (1) In lieu of the rate prescribed by subsection

(a)(1), any employer may pay any employee of such

employer, during the first 90 consecutive calendar days

af ter such employee is initially employed by such

em-ployer, a wage which is not less than $4.25 an hour.

(2) No employer may take any action to displace

employees (including par tial displacements such as

re-duction in hours, wages, or employment benefi ts) for

purposes of hiring individuals at the wage authorized

in paragraph (1).

(3) Any employer who violates this subsection

shall be considered to have violated section 15(a)(3).

(4) This subsection shall only apply to an

em-ployee who has not attained the age of 20 years.
Maximum Hours

SEC. 7. 50 * (a) (1) Except as otherwise provided in this

section, no employer shall employ any of his employees who

in any workweek is engaged in commerce or in the pro-

duction of goods for commerce, or is employed in an enter-



prise engaged in commerce or in the production of goods

for commerce, for a workweek longer than forty hours un-

less such employee receives compensation for his employ-

ment in excess of the hours above specified at a rate not

less than one and one-half times the regular rate at which

he is employed.

(2) No employer shall employ any of his employ-

ees who in any workweek is engaged in commerce or in

the production of goods for commerce, or is employed in

an enterprise engaged in commerce or in the produc-

tion of goods for commerce, and who in such workweeks

is brought within the purview of this subsection by the

amendments made to this Act by the Fair Labor Stan-

dards Amendments of 1966 –
----------------------------------------------------------------------------------------------

49 Subsection (g) added by section 2105© of the Small Business Job Protection

Act of 1996, effective August 20, 1996.

50 Section 7 as amended by section 7 of the Fair Labor Standards Amendments of


1949, and as further amended as noted. Single asterisk (*) indicates provision

amended by the 1949 Act; double asterisk (**) indicates provision added by the 1949

Act. Bold face type indicates amendment made by the Fair Labor Standards Amend-

ments of 1961. Italic type indicates amendment made by the Fair Labor Standards

Amendments of 1966. Bold face italic type indicates amendment made by the Fair

Labor Standards Amendments of 1974. Helvetica boldface type indicates amend-

ment made by the Fair Labor Standards Amendments of 1985. Helvetica boldface

italic type indicates amendment made by the Fair Labor Standards Amendments of

1989.

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


(A) for a workweek longer than forty-four

hours during the first year from the effective date

of the Fair Labor Standards Amendments of 1966,

(B) for a workweek longer than forty-two

hours during the second year from such date, or

(c) for a workweek longer than forty hours

after the expiration of the second year from such

date,

unless such employee receives compensation for his

employment in excess of the hours above specified at a

rate not less than one and one-half times the regular

rate at which he is employed.

(b) No employer shall be deemed to have violated sub-

section (a) by employing any employee for a workweek in

excess of that specified in such subsection without paying

the compensation for overtime employment prescribed

therein if such employee is so employed Š

*(1) in pursuance of an agreement, made as a result

of collective bargaining by representatives of employees

certified as bona fide by the National Labor Relations

Board, which provides that no employee shall be em-

ployed more than one thousand and forty hours during

any period of twenty-six consecutive weeks, or

*(2) in pursuance of an agreement, made as a result

of collective bargaining by representatives of employees

certified as bona fide by the National Labor Relations

Board which provides that during a specified period of

fifty-two consecutive weeks the employee shall be em-

ployed not more than two thousand two hundred and forty

hours and shall be guaranteed not less than one thou-

sand eight hundred and forty hours (or not less than forty-

six weeks at the normal number of hours worked per

week, but not less than thirty hours per week) and not

more than two thousand and eighty hours of employment

for which he shall receive compensation for all hours guar-

anteed or worked at rates not less than those applicable

under the agreement to the work performed and for all

hours in excess of the guaranty which are also in excess

of the maximum workweek applicable to such em-

ployee under subsection (a) or two thousand and eighty

in such period at rates not less than one and one-half times

the regular rate at which he is employed; or

(3) 51 by an independently owned and controlled lo-

cal enterprise (including an enterprise with more than

one bulk storage establishment) engaged in the whole-

sale or bulk distribution of petroleum products if Š

(A) the annual gross volume of sales of such

enterprise is less than $1,000,000 exclusive of ex-

cise taxes,

(B) more than 75 per centum of such enter-

prise™s annual dollar volume of sales is made within

the State in which such enterprise is located, and

(c) not more than 25 per centum of the an-

nual dollar volume of sales of such enterprise is to

customers who are engaged in the bulk distribution

of such products for resale,

and such employee receives compensation for employ-

ment in excess of forty hours in any workweek at a rate

not less than one and one-half times the minimum wage

rate applicable to him under section 6,

and if such employee receives compensation for employ-

ment in excess of twelve hours in any workday, or for

employment in excess of fifty-six hours in any workweek,

as the case may be, at a rate not less than one and one-

half times the regular rate at which he is employed.

(c) * * * (Repealed)

[Note: Section 7© (relating to employers employing

employees in an industry found by the Secretary to be

of a seasonal nature) was repealed by Section 19 of the

Fair Labor Standards Amendments of 1974, effective

December 31, 1976.]

(d) * * * (Repealed)

[Note: Section 7(d) (relating to employers who do not

qualify for the exemption in subsection © who employ

employees in an industry found by the Secretary ie(A) to

be characterized by marked annual recurring peaks of

operation * * *, or (B) to be of a seasonal nature and

engaged in the handling, packing, storing, preparing,

first processing, or canning of any perishable agricul-

tural or horticultural commodities in their raw or natu-

ral state * * *la) was repealed by Section 19 of the Fair

Labor Standards Amendments of 1974, effective Decem-

ber 31, 1976.]

**(e) As used in this section the “regular rate” at which

an employee is employed shall be deemed to include all re-

muneration for employment paid to, or on behalf of, the

employee, but shall not be deemed to include Š

**(1) sums paid as gifts; payments in the nature of

gifts made at Christmas time or on other special occa-

sions, as a reward for service, the amounts of which are

not measured by or dependent on hours worked, produc-

tion, or efficiency;

**(2) payments made for occasional periods when

no work is performed due to vacation, holiday, illness,

failure of the employer to provide sufficient work, or other

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

51 Section 212 of the Fair Labor Standards Amendments of 1966 substituted this

provision for the complete exemption from overtime contained in former section

13(b)(10) enacted in the 1961 amendments. Former clause (3) of section 7(b) as

enacted in the 1938 Act was replaced by new section 7© as enacted by section 204©

of the Fair Labor Standards Amendments of 1966.

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


similar cause; reasonable payments for traveling ex-

penses, or other expenses, incurred by an employee in

the furtherance of his employer’s interests and properly

reimbursable by the employer; and other similar pay-

ments to an employee which are not made as compen-

sation for his hours of employment;

**(3) sums paid in recognition of services performed

during a given period if either, (a) both the fact that pay-

ment is to be made and the amount of the payment are

determined at the sole discretion of the employer at or

near the end of the period and not pursuant to any prior

contract, agreement, or promise causing the employee

to expect such payments regularly; or (b) the payments

are made pursuant to a bona fide profit-sharing plan or

trust or bona fide thrift or savings plan, meeting the re-

quirements of the Secretary of Labor 52 set forth in ap-

propriate regulations which he shall issue, having due

regard among other relevant factors, to the extent to

which the amounts paid to the employee are determined

without regard to hours of work, production, or efficiency;

or (c) the payments are talent fees (as such talent fees

are defined and delimited by regulations of the Secre-

tary 53 ) paid to performers, including announcers, on ra-

dio and television programs;

**(4) contributions irrevocably made by an em-

ployer to a trustee or third person pursuant to a bona

fide plan for providing old-age, retirement, life, accident,

or health insurance or similar benefits for employees;

**(5) extra compensation provided by a premium

rate paid for certain hours worked by the employee in

any day or workweek because such hours are hours

worked in excess of eight in a day or in excess of the



maximum workweek applicable to such employee un-

der subsection (a) or in excess of the employee’s normal

working hours or regular working hours, as the case may

be;

*(6) extra compensation provided by a premium



rate paid for work by the employee on Saturdays, Sun-

days, holidays, or regular days of rest, or on the sixth or

seventh day of the workweek, where such premium rate

is not less than one and one-half time the rate established

in good faith for like work performed in nonovertime

hours on other days; 54 or

*(7) extra compensation provided by a premium

rate paid to the employee, in pursuance of an applicable

employment contract or collective-bargaining agreement,

for work outside of the hours established in good faith by

the contract or agreement as the basic, normal, or regu-

lar workday (not exceeding eight hours) or workweek

(not exceeding the maximum workweek applicable to

such employee under subsection (a)), where such pre-

mium rate is not less than one and one-half times the

rate established in good faith by the contract or agree-

ment for like work performed during such workday or

workweek. 55

**(f) No employer shall be deemed to have violated sub-

section (a) by employing any employee for a workweek in

excess of the maximum workweek applicable to such



employee under subsection (a) if such employee is em-

ployed pursuant to a bona fide individual contract, or pur-

suant to an agreement made as a result of collective bar-

gaining by representatives of employees, if the duties of

such employee necessitate irregular hours of work, and the

contract or agreement (1) specifies a regular rate of pay of

not less than the minimum hourly rate provided in subsec-

tion (a) or (b) of section 6 (whichever may be applicable)

and compensation at not less than one and one-half times

such rate for all hours worked in excess of such maximum

workweek, and (2) provided a weekly guaranty of pay for

not more than sixty hours based on the rates so specified.

**(g) No employer shall be deemed to have violated sub-

section (a) by employing any employee for a workweek in

excess of the maximum workweek applicable to such



employee under such subsection if, pursuant to an agree-

ment or understanding arrived at between the employer

and the employee before performance of the work, the

amount paid to the employee for the number of hours

worked by him in such workweek in excess of the maxi-

mum workweek applicable to such employee under such

subsection -

(1) in the case of an employee employed at piece

rates, is computed at piece rates not less than one and

one-half times the bona fide piece rates applicable to the

same work when performed during nonovertime hours;

or

(2) in the case of an employee performing two or



more kinds of work for which different hourly or piece

rates have been established, is computed at rates not less

than one and one-half times such bona fide rates appli-

cable to the same work when performed during nonover-

time hours; or

(3) is computed at a rate not less than one and one-

half times the rate established by such agreement or

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

52 See footnote 28.

53 Ibid.


54 Paragraphs (6) and (7) together with section 7(h) continued in effect provisions

of section 1 of the Act of July 20, 1949 (63 Stat. 446), which Act was repealed as of the

effective date of the Fair Labor Standards Amendments of 1949. 55 Ibid.

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


understanding as the basic rate to be used in computing

overtime compensation thereunder: Provided, That the

rate so established shall be authorized by regulation by

the Secretary of Labor 56 as being substantially equiva-

lent to the average hourly earnings of the employee, ex-

clusive of overtime premiums, in the particular work over

a representative period of time;

and if (i) the employee™s average hourly earnings for the

workweek exclusive of payments described in paragraphs

(1) through (7) of subsection (e) are not less than the mini-

mum hourly rate required by applicable law, and (ii) extra

overtime compensation is properly computed and paid on

other forms of additional pay required to be included in

computing the regular rate.

* (h) Extra compensation paid as described in paragraphs

(5), (6), and (7) of subsection (e) shall be creditable toward

overtime compensation payable pursuant to this section. 57

(i) No employer shall be deemed to have violated sub-

section (a) by employing any employee of a retail or ser-

vice establishment for a workweek in excess of the ap-

plicable workweek specified therein, if (1) the regular

rate of pay of such employee is in excess of one and one-

half times the minimum hourly rate applicable to him

under section 6, and (2) more than half his compensa-

tion for a representative period (not less than one

month) represents commissions on goods or services.

In determining the proportion of compensation represent-

ing commission, all earnings resulting from the applica-

tion of a bona fide commission rate shall be deemed com-

missions on goods or services without regard to whether

the computed commissions exceed the draw or guarantee.

(j) No employer engaged in the operation of a hospital

or an establishment which is an institution primarily

engaged in the care of the sick, the aged, or the mentally

ill or defective who reside on the premises shall be deemed

to have violated subsection (a) if, pursuant to an agree-

ment or understanding arrived at between the employer

and employee before performance of the work, a work pe-

riod of fourteen consecutive days is accepted in lieu of the

workweek of seven consecutive days for purposes of over-

time computation and if, for his employment in excess of

eight hours in any workday and in excess of eighty hours

in such fourteen-day period, the employee receives com-

pensation at a rate not less than one and one-half times

the regular rate at which he is employed.



(k) 58 No public agency shall be deemed to have violated

subsection (a) with respect to the employment of any

employee in fire protection activities or any employee

in law enforcement activities (including security per-

sonnel in correctional institutions) if -

(1) in a work period of 28 consecutive days the

employee receives for tours of duty which in the ag-

gregate exceed the lesser of (A) 216 hours, or (B) the

average number of hours (as determined by the Secre-

tary pursuant to Section 6©(3) of the Fair Labor Stan-

dards Amendments of 1974) 59 in tours of duty of em-

ployees engaged in such activities in work periods of

28 consecutive days in calendar year 1975; or

(2) in the case of such an employee to whom a

work period of at least 7 but less than 28 days applies,

in his work period the employee receives for tours of

duty which in the aggregate exceed a number of hours

which bears the same ratio to the number of consecu-

tive days in his work period as 216 hours (or if lower,

the number of hours referred to in clause (B) of para-

graph (1)) bears to 28 days,

compensation at a rate not less than one and one-half

times the regular rate at which he is employed.

(l) No employer shall employ any employee in domes-

tic service in one or more households for a workweek

longer than forty hours unless such employee receives

compensation for such employment in accordance with

subsection (a).

(m) For a period or periods of not more than fourteen

workweeks in the aggregate in any calendar year, any

employer may employ any employee for a workweek in

excess of that specified in subsection (a) without pay-

ing the compensation for overtime employment pre-

scribed in such subsection, if such employee Š

(1) is employed by such employer -

(A) to provide services (including stripping

and grading) necessary and incidental to the sale

at auction of green leaf tobacco of type 11, 12, 13,

14, 21, 22, 23, 24, 31, 35, 36, or 37 (as such types are

defined by the Secretary of Agriculture), or in auc-

tion sale, buying, handling, stemming, redrying,

packing, and storing of such tobacco.
-----------------------------------------------------------------------------
56 See footnote 28.

57 Amendment provided by section 7 of the Fair Labor Standards Amendments of

1949. See also footnote 54.

58 Effective January 1, 1975, the complete overtime exemption provided by section

6©(2)(A) of the Fair Labor Standards Amendments of 1974 was replaced by the

more limited exemption in section 7(k). The present overtime standard Š the lesser

of 216 hours or the average number of hours (as determined by the Secretary of

Labor) in tours of duty of employees in work periods of 28 consecutive days Š be-

came effective January 1, 1978. During calendar year 1977 the overtime standard

was 216 hours, during 1976 the overtime standard was 232 hours, and during 1975

the overtime standard was 240 hours. The complete overtime exemption remains

applicable only to public agencies employing less than 5 employees in fire protection

or law enforcement activities. See section 13(b)(20), infra.

59 The results of the Secretary’s study were published in the Federal Register on

September 8, 1983. The Secretary determined hours standards for law enforce-

ment employees at 171 and for fire protection employees at 212 in a 28-day period



(48 FR 40,518).

(B) in auction sale, buying, handling, sort-

ing, grading, packing, or storing green leaf tobacco

of type 32 (as such type is defined by the Secre-

tary of Agriculture), or

(C) in auction sale, buying, handling, strip-

ping, sorting, grading, sizing, packing, or stem-

ming prior to packing, of perishable cigar leaf to-

bacco of type 41, 42, 43, 44, 45, 46, 51, 52, 53, 54, 55,

61, or 62 (as such types are defined by the Secre-

tary of Agriculture); and

(2) receives for Š

(A) such employment by such employer

which is in excess of ten hours in any workday,

and

(B) such employment by such employer

which is in excess of forty-eight hours in any

workweek, compensation at a rate not less than

one and one-half times the regular rate at which

he is employed.

An employer who receives an exemption under this sub-

section shall not be eligible for any other exemption

under this section.

(n) In the case of an employee of an employer engaged

in the business of operating a street, suburban or in-

terurban electric railway, or local trolley or motorbus

carrier (regardless of whether or not such railway or car-

rier is public or private or operated for profit or not for

profit), in determining the hours of employment of such

an employee to which the rate prescribed by subsection

(a) applies there shall be excluded the hours such em-

ployee was employed in charter activities by such em-

ployer if (1) the employee’s employment in such activi-

ties was pursuant to an agreement or understanding

with his employer arrived at before engaging in such

employment, and (2) if employment in such activities is

not part of such employee’s regular employment.

(o)60 (1) Employees of a public agency which is a

state, a political subdivision of a State, or an inter-state

governmental agency may receive, in accor-dance

with this subsection and in lieu of overtime

compensation, compensatory time off at a rate not

less than one and one-half hours for each hour of

employment for which overtime compensation is

required by this section.

(2) A public agency may provide compensa-tory

time under paragraph (1) only —

(A) pursuant to —

(i) applicable provisions of a collective

bargaining agreement, memorandum

of understanding, or any other agreement

between the public agency and representatives

of such employees; or

(ii) in the case of employees not

covered by subclause (i), an agreement or

understanding arrived at between the employer

and employee before the performance

of the work; and

(B) if the employee has not accrued compensatory

time in excess of the limit applicable

to the employee prescribed by paragraph (3).
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