Pay Administration Under the Fair Labor Standards Act, 30301-30317 [06-4886]

Agencies

• Office of Personnel Management
• Personnel Management Office

[Federal Register Volume 71, Number 102 (Friday, May 26, 2006)]
[Proposed Rules]
[Pages 30301-30317]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-4886]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 71, No. 102 / Friday, May 26, 2006 / Proposed 
Rules

[[Page 30301]]



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: Proposed rule.

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

SUMMARY: The Office of Personnel Management (OPM) proposes to revise 
the regulations issued under the Fair Labor Standards Act of 1938, as 
amended (``FLSA'' or ``Act'') to update and harmonize OPM's regulations 
with revisions made to the Department of Labor's regulations. The 
revised regulations are intended to provide a clearer understanding of 
coverage under the Act. These regulations apply to all employees in 
agencies who are under OPM's jurisdiction for FLSA purposes.

DATES: Comments must be received on or before July 25, 2006.

ADDRESSES: There are multiple methods for submitting comments. Please 
submit only one set of comments via one of the methods described.
    Preferred Method for Comments: Send comments by e-mail to 
fedclass@opm.gov, or send or deliver written comments to Mark Doboga, 
Deputy Associate Director for Talent and Capacity Policy, U.S. Office 
of Personnel Management, Room 6551, 1900 E Street, NW., Washington, DC 
20415-9700; or fax comments to 202-606-4891. Comments received in 
electronic form besides e-mail (CDs, floppy disk, or other media) will 
not be accepted. All submissions received must include the RIN 
3206-AK89. If you are responding by e-mail the following should appear 
in the subject line: ``Comments on Proposed FLSA Regulations--OPM 
RIN 3206-AK89.''
    Please arrange and identify your comments on the regulatory text by 
subpart and section number. If your comments relate to the 
supplementary information, refer to the heading and page number.
    Ensure your comments are submitted within the specified open 
comment period. Before acting on this proposal, OPM will consider all 
comments received on or before the closing date. Comments received late 
will be considered only if it is possible to do so without incurring 
expense or delay.

FOR FURTHER INFORMATION CONTACT: Georgeanna Emery, Human Resources 
Specialist, by e-mail at fedclass@opm.gov, by telephone at 202-606-
3600, or by fax at 202-606-4891.

SUPPLEMENTARY INFORMATION: The Office of Personnel Management (OPM) is 
publishing a proposed rule to amend regulations to the Fair Labor 
Standards Act, as amended (referred to as ``the Act'' or ``FLSA''). The 
purpose of this amendment is to update and harmonize OPM's regulations 
with certain changes made by the Department of Labor (DoL), Employment 
Standards Administration, Wage and Hour Division, 29 CFR part 541, RIN 
1215-AA14, Defining and Delimiting the Exemptions for Executive, 
Administrative, Professional, Outside Sales and Computer Employees 
(Federal Register, Vol. 69, No. 79, dated April 23, 2004).
    As authorized by section 3(e)(2) of the Act, the provisions of the 
Act apply to any person employed by the Government of the United 
States, as specified in that Section. Section 4(f) of the Act 
authorizes OPM to administer provisions of the Act with respect to any 
person employed by an agency, with certain exceptions.
    OPM's administration of the Act must comply with the terms of the 
Act and the law does not require OPM's regulations to mirror the DoL's 
FLSA regulations. OPM is revising its regulations to be consistent with 
DoL'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.

Structure and Organization of These Proposed Regulations

    We will address only those sections of title 5, part 551--Pay 
Administration under the Fair Labor Standards Act, to which we propose 
changes. Changes have been made to subparts A, B, F, and G. For ease of 
discussion, comments regarding proposed changes/additions/deletions 
will be found under the appropriate subpart and section headings.
    Throughout the regulation we have inserted ``or equivalent'' to 
cover non-General Schedule white-collar positions.

Subpart A--General Provisions

Section 551.101 General

    New paragraph (c) of the proposed regulation discusses OPM's 
requirement to be consistent with the DoL'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, OPM does not apply the highly compensated employee 
criteria contained in 29 CFR 541.601 to determine FLSA exemption status 
to harmonize with title 5, United States Code, and other statutory 
Federal compensation pay level practices. (See also Billings v U.S., 
322 F.3d 1328, (Fed. Cir.2003)).

Section 551.102 Authority and Administration

    We revised paragraph (c) to clarify that the DoL administers the 
Act for the Government of the District of Columbia.

Section 551.103 Coverage

    No change.

Section 551.104 Definitions

    The definitions of the following terms have not changed:

Act or FLSA
Claim period
Emergency
Employee
Employer
Exempt area
FLSA exempt
FLSA nonexempt
Hours of work
Nonexempt area
Perform in connection with an emergency
Reckless disregard of the requirements of the Act
Statute of limitations
Suffered or permitted work
Title 5 overtime pay
Volunteer
Willful violation
Workday
Worktime

    The definitions of the following terms were deleted:

[[Page 30302]]

    Discretion and independent judgment--concept is now addressed in 
revised Sec.  551.206
    Essential part of administrative or professional functions--concept 
is now covered by the definition of directly and closely related.
    FLSA exemption status determination claim--concept is now addressed 
in Sec.  551.702(a)
    Foreign exemption--concept is now addressed in revised Sec.  
551.209.
    Management or general business function--concept is now addressed 
in revised Sec.  551.206.
    Participation in the executive or administrative functions of a 
management official--concept is now addressed in revised Sec.  551.206.
    Situations 1 through 4--no longer needed because of the elimination 
of the 80 percent test, consistent with DoL changes.
    Supervisory and closely related work--concept is now covered by the 
definition of directly and closely related.
    Temporary work or duties--term is now covered in Sec.  551.208.
    Work of an intellectual nature--removed, consistent with DoL 
changes.
    Work of a specialized or technical nature--removed, consistent with 
DoL changes.
    The definitions of the following terms were revised:

Administrative employee
Agency
Claim
Claimant
Customarily and regularly
Employ
Executive employee
FLSA exemption status
FLSA overtime pay
FLSA pay claim
Formulation or execution of management programs or policies
Preserve the claim period
Professional employee
Primary duty
Recognized organizational unit
Trainee
Worktime in a representative workweek
Workweek
Workweek basis

    Definitions were added for the following terms:

Directly and closely related
Educational establishment
Filed
Management
Official position
Two or more other employees

Discussion of Selected Terms

    Claim and claimant were revised and filed was added to clarify that 
someone other than the employee to whom the claim applies may file a 
claim and preserve the claim period.
    Directly and closely related now incorporates supervisory and 
closely related work. Additionally, examples of specific occupations 
were included in this definition to illustrate the proper use of this 
new definition.
    Formulation or execution of management programs or policies was 
replaced with formulate, affect, interpret, or implement management 
policies or operating practices and the definition revised.
    Primary duty was revised to clarify when a duty serves as the 
primary duty for exemption purposes even though it does not constitute 
the major part (over 50 percent) of the employee's work.
    Rate of basic pay has been defined in revised Sec.  551.203.
    Recognized organizational unit was expanded 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, 
and to harmonize with DoL.
    Two or more other employees spells out that an employee, as used in 
this context, is equal to a full time equivalent (FTE) position.
    Workweek was revised by changing the verb ``shall'' to ``must'' for 
added clarity and readability. We intend that this definition using the 
verb ``must'' has the same meaning and effect as the previous 
definition using ``shall.''
    Workweek basis was revised to insert the word ``the'' before the 
word ``averaging.'' The structure of the definition has been modified 
by putting the exception statement in parentheses to make it clear that 
averaging is not used except for firefighters and law enforcement 
employees.

Subpart B--Exemptions and Exclusions

Section 551.201 Agency Authority

    The proposed revision clarifies that an employing agency must 
review and make a determination on each employee's exemption status.

Section 551.202 General Principles Governing Exemptions

    This section was reorganized for clarity. We moved the discussion 
of the nonexemption of certain categories of employees from paragraph 
(e) of the current Sec.  551.202 to proposed Sec.  551.204.
    Proposed paragraph (e) clarifies that the designation of an 
employee as FLSA exempt or nonexempt ultimately rests on the duties 
actually performed by the employee. Occupational or organizational 
title alone is not sufficient basis for an FLSA exemption status 
determination.

Section 551.203 Salary-Based Nonexemption

    We deleted current Sec.  551.203--Exemption of General Schedule 
employees, replaced it with a new section addressing salary-based 
nonexemption, and provided a definition for rate of basic pay. This 
brings OPM's regulations into closer harmony with DoL's approach in its 
final regulations to extending FLSA protection to employees paid below 
a certain level.

Section 551.204 Nonexemption of Certain Employees

    This proposed section incorporates the nonexemption of certain 
nonsupervisory white-collar employees who do not meet any of the 
exemption criteria, and nonsupervisory employees in the Federal Wage 
System or in other comparable trades, crafts, and laboring wage 
systems.

Section 551.205 Executive Exemption Criteria

    We changed the language to harmonize with DoL changes in the 
description of executive work and elimination of the 80-percent test 
for all employees.

Section 551.206 Administrative Exemption Criteria

    Changes were made 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.

Section 551.207 Professional Exemption Criteria

    Changes were made to harmonize with DoL changes in the description 
of professional work. We moved the discussion of types of professional 
exemptions in current Sec.  551.207 into new Sec. Sec.  551.214, 
551.215 and 551.216.

Section 551.208 Effect of Performing Temporary Work or Duties on FLSA 
Exemption Status

    We clarified the ``30-day test'' to explain that performing 
different work or duties for 30 consecutive calendar days may affect 
that employee's exemption status. We also clarified the intent of Sec.  
551.208, and the protective purpose of the FLSA in general.

Section 551.209 Foreign Exemption Criteria

    We moved the definition of foreign exemption from Sec.  551.104 to 
this section as subject definition is only addressed in this section.

[[Page 30303]]

Section 551.210 Exemption of Employees Receiving Availability Pay

    No change. While no changes were made, we wish to draw attention in 
this preamble to the fact that there are certain Criminal Investigators 
who may not be covered under availability pay provisions of 5 U.S.C. 
5545a. As stated in Sec.  550.181(b) `` * * * any Office of Inspector 
General that employs fewer than five criminal investigators may elect 
not to cover such criminal investigators under the availability pay 
provisions * * *.'' Similarly, there are certain employees identified 
as Game Law Enforcement Officers, but because of the kind of work they 
perform these employees are not performing law enforcement work and 
therefore do not receive Law Enforcement Availability Pay. In both 
positions, the minimum wage and the hours of work and overtime pay 
provisions of the FLSA are applicable if the positions are designated 
as FLSA nonexempt.

Section 551.211 Statutory Exclusion

    These proposed regulations adopt the Department of Homeland 
Security's definition of ``Customs Officer'' (69 FR 35229 (2004)). In 
DHS's regulations, 19 CFR 24.16(b)(7) reads as follows: Customs Officer 
means only those individuals assigned to position descriptions entitled 
``Customs Inspector,'' ``Supervisory Customs Inspector,'' ``Canine 
Enforcement Officer,'' ``Supervisory Canine Enforcement Officer,'' 
``Customs and Border Protection Officer,'' ``Supervisory Customs and 
Border Protection Officer,'' ``Customs and Border Protection 
Agriculture Specialist,'' or ``Supervisory Customs and Border 
Protection Agriculture Specialist.''

Section 551.212 Fire Protection Activities and 7(k) Coverage for FLSA 
Pay and Exemption Determinations and Sec.  551.213 Law Enforcement 
Activities and 7(k) Coverage for FLSA Pay and Exemption Determinations

    We added two new sections to help identify activities subject to 
section 7(k) of the Act for FLSA pay and exemption determinations, 
provide examples of specific Federal occupations, and harmonize with 
DoL regulations.

Section 551.214 Learned Professionals, Sec.  551.215 Creative 
Professionals, and Sec.  551.216 Computer Employees

    We added three new sections to address learned professionals, 
creative professionals, and computer employees to harmonize with DoL 
regulations. We provided examples of specific Federal occupations for 
the learned and creative professionals, and examples of Federal work 
situations for computer employees.

Subpart F--Child Labor

Section 551.601 Minimum Age Standards

    We added new paragraph (c) to define hazardous Federal fire 
protective activities for individuals under 18 years of age.

Section 551.602 Responsibilities

    No change.

Subpart G--FLSA Claims and Compliance

Section 551.701 Applicability

    No change.

Section 551.702 Time Limits

    We clarified in paragraph (c) that the claimant is responsible for 
retaining documentation to establish when a claim is received.

Section 551.703 Avenues of Review

    No change.

Section 551.704 Claimant's Representative

    No change.

Section 551.705 Filing an FLSA Claim

    In paragraph (b), we corrected the reference from paragraph (b) to 
paragraph (c).

Section 551.706 Responsibilities

    No change.

Section 551.707 Withdrawal or Cancellation of an FLSA Claim

    We clarified that OPM may grant a request from a claimant to 
withdraw his or her claim.

Section 551.708 Finality and Effect of OPM FLSA Claim Decision

    We clarified the reconsideration process, added a 45-day time limit 
for requests for reconsideration to be submitted, and clarified an 
agency's compliance responsibility.

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 would not have a 
significant economic impact on a substantial number of small entities 
because they would apply only to Federal agencies and employees.

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

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

E.O. 12988, Civil Justice Reform

    This proposed regulation is consistent with the requirements of 
E.O. 12988. The regulation clearly specifies 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 proposed regulations would not have 
Federalism implications because they would apply only to Federal 
agencies and employees. The proposed regulations would 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 proposed regulations would 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.
    Accordingly, the Office of Personnel Management is proposing to 
amend title 5, Code of Federal Regulations, part 551, as follows:

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

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

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

    2. 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.

[[Page 30304]]

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 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

[[Page 30305]]

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 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) 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) Midway Atoll;
    (9) Wake Island;
    (10) Johnston Island; and
    (11) 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 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

[[Page 30306]]

evaluating operating programs of the employing organization or of other 
organizations subject to regulation or other controls).
    Hours of work means all time spent by an employee performing an 
activity for the benefit of an agency and under the control or 
direction of the agency. Hours of work are creditable for the purposes 
of determining overtime pay under subpart D of this part. Section 
551.401 of subpart D further explains this term. However, whether time 
is credited as hours of work is determined by considering many factors, 
such as the rules in subparts D and E of this part, provisions of law, 
Comptroller General decisions, OPM 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) Midway Atoll;
    (9) Wake Island;
    (10) Johnston Island; and
    (11) 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 to perform work 
that is directly related to resolving or coping with an emergency, or 
its immediate aftermath, as determined by the employing agency.
    Preserve the claim period means to establish the period of possible 
entitlement to back pay by filing a written claim. 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.  551.208, 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 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

[[Page 30307]]

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.
    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 Effect of performing different work or duties for a 
temporary period of time on FLSA exemption status.
551.209 Foreign exemption criteria.
551.210 Exemption of employees receiving availability pay.
551.211 Statutory exclusion.
551.212 Fire protection activities and 7(k) coverage for FLSA pay 
and exemption determinations.
551.213 Law enforcement activities and 7(k) coverage for FLSA pay 
and exemption determinations.
551.214 Learned professionals.
551.215 Creative professionals.
551.216 Computer employees.


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. All exempt work, regardless of category, 
must be considered. The only restriction is that, when the requirements 
of one category are more stringent, the combination of exempt work must 
meet the more stringent requirements.
    (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 the exemption category, this is not essential. An exemption 
may be based on a combination of functions, no one of which constitutes 
the primary duty, or the employee's primary duty may involve two 
categories which are intermingled and difficult to segregate. This does 
not preclude designating an employee FLSA exempt, provided the work as 
a whole clearly meets the other 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.  551.208 (the effect of 
performing temporary work or duties on FLSA exemption status); or
    (2) The employee is subject to Sec.  551.209 (the foreign 
exemption); or
    (3) The employee is a professional engaged in the practice of law 
or medicine as prescribed in paragraphs (c) and (d) of Sec.  551.214.
    (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

[[Page 30308]]

F; special rate supplement under 5 CFR 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.  551.208 (the 
effect of performing temporary work or duties on FLSA exemption status) 
or Sec.  551.209 (the foreign exemption)) 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 knowledges 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.  551.208 (the effect of performing temporary work or duties on 
FLSA exemption status) or Sec.  551.209 (the foreign exemption).


Sec.  551.205  Executive exemption criteria.

    (a) An executive employee is an employee whose primary duty is 
management (as defined in section 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 four hours for one supervisor and four 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 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 the 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;
    (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

[[Page 30309]]

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.
    (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.
    (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 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. The learned professionals, creative 
professionals, and computer employees are described in Sec. Sec.  
551.214, 551.215, and 551.216.


Sec.  551.208  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 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--

[[Page 30310]]

    (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 
551.207; 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 2 or 
3 days, and 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 
or duties 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 nonexem