{"database": "openregs", "table": "cfr_sections", "is_view": false, "human_description_en": "where part_number = 779 and title_number = 29 sorted by section_id", "rows": [["29:29:3.1.1.2.40.1.253.1", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.0 Purpose of interpretative bulletin.", "DOL-WHD", "", "", "", "It is the purpose of this part to provide an official statement of the views of the Department of Labor with respect to the application and meaning of those provisions of the Fair Labor Standards Act, hereinafter referred to as the Act, which govern rights and obligations of employees and employers in the various enterprises in which retail sales of goods or services are made. The application of the Act to employment in such enterprises was greatly broadened by amendments effective September 3, 1961. The Act's application was extended to employment in additional retail and service enterprises by the Fair Labor Standards Amendments of 1966, effective February 1, 1967. Under the amended Act, there are many employees employed by retail or service establishments and in enterprises having such establishments engaged in the retail selling of goods or services who must be employed in compliance with its provisions. It is an objective of this part to make available in one place, for the guidance of those who may be concerned with the provisions of the law, the official interpretations of these provisions by which the Department of Labor will be guided in carrying out its responsibilities under the Act."], ["29:29:3.1.1.2.40.1.253.2", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.1 General scope of the Act.", "DOL-WHD", "", "", "", "The Fair Labor Standards Act of 1938, as amended, is a Federal statute of general application which establishes minimum wage, maximum hours, overtime pay, equal pay, and child labor requirements that apply as provided in the Act. Employers and employees in enterprises in which retail sales of goods or services are made need to know how the Act applies to employment in these enterprises so that they may understand their rights and obligations under the law. All employees whose employment has the relationship to interstate or foreign commerce which the Act specifies are subject to the prescribed labor standards unless specifically exempted from them. Employers having such employees are required to comply with the Act's provisions in this regard and with specified recordkeeping requirements contained in Part 516 of this chapter. The law authorizes the Department of Labor to investigate for compliance and, in the event of violations, to supervise the payment of unpaid minimum wages or unpaid overtime compensation owing to any employee. The law also provides for enforcement in the courts."], ["29:29:3.1.1.2.40.1.253.3", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.2 Previous and new coverage.", "DOL-WHD", "", "", "", "Under the Act as amended in 1966, an employer may have some employees subject to its minimum wages, maximum hours, overtime pay, equal pay, or child labor provisions who would be covered by such provisions under the prior law even if the amendments had not been enacted, and other employees whose coverage under such provisions was provided for the first time by the 1966 amendments. As explained in subparts B and C such provisions of the amended Act may apply to an employee by reason of the activities in which he is individually engaged, or because he is employed in an enterprise whose activities satisfy the conditions prescribed in the law prior to the amendments. On the other hand, such provisions of the amended Act may apply to an employee solely because he is employed in an enterprise whose activities satisfy only the conditions provided in the Act as it was amended in 1966. Previously covered employment in retail and service enterprise is subject to different monetary standards than newly covered employment in such enterprises until February 1, 1971. On and after that date, every such employee subject to the minimum wage provisions will be entitled to not less than $1.60 an hour. However, beginning February 1, 1969, every such employee subject to the overtime provisions is entitled to overtime pay for all hours worked in excess of 40 in a workweek at a rate not less than one and one-half times his regular rate of pay. During the period for which different minimum wage provisions were made applicable, beginning with the effective date of the 1966 amendments on February 1, 1967, and ending on January 31, 1971, a lower minimum wage rate is authorized for employees in employment brought under the minimum wage provisions of the Act for the first time by the amendments than for those subject to the minimum wage provisions under the prior Act. Also, in the period beginning with the effective date of the amendments and ending on January 31, 1969, employees in employment brought under the overtime pay provisions for the first time by the amendments could be employed for a longer workweek without overtime pay, as specified in the Act. Accordingly, employers who do not wish to pay aIl covered employees for employment during such periods the minimum wages and overtime pay required for employment covered under the prior provisions will need to identify those employees who are covered under the prior provisions and those who are covered under the new provisions when wages are computed and paid under the Act."], ["29:29:3.1.1.2.40.1.253.4", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.3 Pay standards for employees subject to previous coverage of the Act.", "DOL-WHD", "", "", "", "Before the 1966 amendments, the Act applied, as it still applies, to employees individually engaged in interstate or foreign commerce or in the production of goods for such commerce, and to employees in certain enterprises, including enterprises in which retail sales of goods or services are made. The tests by which coverage based on the employee's individual activities is determined were not changed by the 1966 amendments and are described in subpart B of this part. An employee in an enterprise whose activities satisfy the conditions prescribed in the law prior to the 1966 amendments (discussed in subpart C) is covered under the present Act. Any employee whose employment satisfies the tests by which individual or enterprise coverage is determined under the Act prior to the 1966 amendments and who would not have come within some exemption in the law prior to the amendments is subject to the monetary provisions prescribed in the law for previously covered employees and is entitled to a minimum wage of at least $1.40 an hour beginning February 1, 1967, and not less than $1.60 an hour beginning February 1, 1968, unless expressly exempted by some provision of the amended Act. (In each instance where there is an increase in the minimum wage, the new minimum wage rate becomes effective 12:01 a.m., on the date indicated.) Such an employee is also entitled to overtime pay for hours worked in excess of 40 in any workweek at a rate not less than one and one-half times his regular rate of pay. (Minimum wage rates in Puerto Rico, the Virgin Islands, and American Samoa are governed by special provisions of the Act. Information on these rates is available at any office of the Wage and Hour Division.)"], ["29:29:3.1.1.2.40.1.253.5", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.4 Pay standards for newly covered employment.", "DOL-WHD", "", "", "", "There are many employees of retailers as well as other employees who would not be subject to the minimum wage or overtime pay provisions of the Act as it was prior to the 1966 amendments, either because of their individual activities or because of the activities of the enterprise in which they are employed, but who are brought under the minimum wage or overtime provisions, or both, for the first time by the changed enterprise coverage provisions or changes in exemptions, or both, which were enacted as part of the amendments and made effective February 1, 1967. The following pay standards apply to this newly covered employment, unless a specific exemption has been retained or provided in the amendments; such employees must be paid not less than the minimum wages for hours worked and not less than one and one-half times their regular rates of pay for overtime, as shown in the following schedule:\n\nIn each instance where there is an increase in the minimum wage, the new minimum wage rate becomes effective 12:01 a.m., on the date indicated. (Minimum wage rates for newly covered employees in Puerto Rico, the Virgin Islands, and American Samoa are set by wage order under special industry committee procedures. Information on these rates and their effective dates may be obtained at any office of the Wage and Hour Division.)\n\nIn each instance where a new overtime pay standard is applicable, it shall be effective as to any workweek beginning on or after the date indicated."], ["29:29:3.1.1.2.40.1.253.6", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.5 Matters discussed in this part.", "DOL-WHD", "", "", "", "This part discusses generally the provisions of the Act which govern its application to employers and employees in enterprises and establishments that make retail sales of goods or services. It discusses in some detail those provisions of the Act which refer specifically to such employers and employees and such enterprises or establishments. The criteria for determining the employments in which these employers and employees may be subject to the law are discussed in subparts B and C of this part and the criteria for exclusion from its provisions under specific exemptions are discussed in subpart D of this part. Other provisions of special interest to retailers and their employees are discussed in subparts E and F of this part."], ["29:29:3.1.1.2.40.1.253.7", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.6 Matters discussed in other interpretative bulletins.", "DOL-WHD", "", "", "", "Bulletins having general application to others subject to the law as well as to retailers and their employees have been issued on a number of subjects of general interest. These will be found in other parts of this chapter of the Code of Federal Regulations. Reference should be made to them for guidance on matters which they discuss in detail and which this part does not undertake to do. They include part 776 of this chapter, discussing general coverage, including the employer-employee relationship under the Act; part 531 of this chapter, discussing methods of payment of wages; part 778 of this chapter, discussing computation and payment of overtime compensation; part 785 of this chapter, discussing the calculation of hours worked; and part 800 of this chapter, discussing equal pay for equal work."], ["29:29:3.1.1.2.40.1.254.10", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.9 Reliance on interpretations.", "DOL-WHD", "", "", "", "The interpretations of the law contained in this part are official interpretations which may be relied upon as provided in section 10 of the Portal-to-Portal Act of 1947. In addition, the Supreme Court has recognized that such interpretations of the Act \u201cprovide a practical guide to employers and employees as to how the office representing the public interest in its enforcement will seek to apply it\u201d and \u201cconstitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.\u201d Further, as stated by the Court: \u201cGood administration of the Act and good judicial administration alike require that the standards of public enforcement and those for determining private rights shall be at variance only where justified by very good reasons.\u201d ( Skidmore  v.  Swift,  323 U.S. 134.) Some of the interpretations in subpart D of this part relating to the scope of the exemption provided for retail or service establishments are interpretations of this exemption as it appeared in the original Act before amendment in 1949 and 1961, which have remained unchanged because they were consistent with the amendments. These interpretations may be said to have Congressional sanction because \u201cWhen Congress amended the Act in 1949 it provided that pre-1949 rulings and interpretations by the Administrator should remain in effect unless inconsistent with the statute as amended. 63 Stat. 920.\u201d ( Mitchell  v.  Kentucky Finance Co.,  359 U.S. 290.)"], ["29:29:3.1.1.2.40.1.254.11", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.10 Interpretations made, continued, and superseded by this part.", "DOL-WHD", "", "", "", "On and after publication of this part in the  Federal Register,  the interpretations contained therein shall be in effect and shall remain in effect until they are modified, rescinded, or withdrawn. This part supersedes and replaces the interpretations previously published in the  Federal Register  and Code of Federal Regulations as part 779 of this chapter. Prior opinions, rulings and interpretations and prior enforcement policies which are not inconsistent with the interpretations in this part or with the Fair Labor Standards Act as amended by the Fair Labor Standards Amendments of 1961 are continued in effect; all other opinions, rulings, interpretations, and enforcement policies on the subjects discussed in the interpretations in this part are rescinded and withdrawn. The interpretations in this part provide statements of general principles applicable to the subjects discussed and illustrations of the application of these principles to situations that frequently arise. They do not and cannot refer specifically to every problem which may be met by retailers in the application of the Act. The omission to discuss a particular problem in this part or in interpretations supplementing it should not be taken to indicate the adoption of any position by the Secretary of Labor or the Administrator with respect to such problem or to constitute an administrative interpretation or practice or enforcement policy. Questions on matters not fully covered by this part may be addressed to the Administrator of the Wage and Hour Division, U.S. Department of Labor, Washington, DC 20210, or to any Regional or District Office of the Division."], ["29:29:3.1.1.2.40.1.254.8", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.7 Significance of official interpretations.", "DOL-WHD", "", "", "", "The regulations in this part contain the official interpretations of the Department of Labor with respect to the application under described circumstances of the provisions of law which they discuss. These interpretations indicate the construction of the law which the Secretary of Labor and the Administrator believe to be correct and which will guide them in the performance of their duties under the Act unless and until they are otherwise directed by authoritative decisions of the courts or conclude, upon reexamination of an interpretation, that it is incorrect."], ["29:29:3.1.1.2.40.1.254.9", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.8 Basic support for interpretations.", "DOL-WHD", "", "", "", "The ultimate decisions on interpretations of the Act are made by the courts ( Mitchell  v.  Zachry,  362 U.S. 310;  Kirschbaum  v.  Walling,  316 U.S. 517). Court decisions supporting interpretations contained in this bulletin are cited where it is believed they may be helpful. On matters which have not been determined by the courts, it is necessary for the Secretary of Labor and the Administrator to reach conclusions as to the meaning and the application of provisions of the law in order to carry out their responsibilities of administration and enforcement ( Skidmore  v.  Swift,  323 U.S. 134). In order that these positions may be made known to persons who may be affected by them, official interpretations are issued by the Administrator on the advice of the Solicitor of Labor, as authorized by the Secretary (Reorg. Pl. 6 of 1950, 64 Stat. 1263; Gen. Ord. 45A, May 24, 1950; 15 FR 3290). As included in the regulations in this part, these interpretations are believed to express the intent of the law as reflected in its provisions as constructed by the courts and evidenced by its legislative history. References to pertinent legislative history are made in this part where it appears that they will contribute to a better understanding of the interpretations."], ["29:29:3.1.1.2.40.1.255.12", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.11 General statement.", "DOL-WHD", "", "", "", "The meaning and application of the provisions of law discussed in this part depend in large degree on the definitions of terms used in these provisions. The Act itself defines some of these terms. Others have been defined and construed in decisions of the courts. In the following sections some of these basic definitions are set forth for ready reference in connection with the part's discussion of the various provisions in which they appear. Some of these definitions and their application are considered in detail in other interpretative bulletins. The application of the others is considered in the sections of this part where the particular provisions containing the defined terms are discussed."], ["29:29:3.1.1.2.40.1.255.13", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.12 Commerce.", "DOL-WHD", "", "", "", "Commerce  as used in the Act includes interstate and foreign commerce. It is defined in section 3(b) of the Act to mean \u201ctrade, commerce, transportation, transmission or communication among the several States or between any State and any place outside thereof.\u201d (For the definition of \u201cState\u201d see \u00a7 779.16.) The application of this definition and the kinds of activities which it includes are discussed at length in the interpretative bulletin on general coverage of the Act, part 776 of this chapter."], ["29:29:3.1.1.2.40.1.255.14", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.13 Production.", "DOL-WHD", "", "", "", "To understand the meaning of \u201cproduction\u201d of goods for commerce as used in the Act it is necessary to refer to the definition in section 3(j) of the term \u201cproduced.\u201d A detailed discussion of the application of the term as defined is contained in the interpretative bulletin on general coverage of the Act, part 776 of this chapter. Section 3(j) provides that \u201cproduced\u201d as used in the Act \u201cmeans produced, manufactured, mined, handled, or in any other manner worked on in any State; and for the purposes of this Act an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any closely related process or occupation directly essential to the production thereof, in any State.\u201d (For the definition of \u201cState,\u201d see \u00a7 779.16.)"], ["29:29:3.1.1.2.40.1.255.15", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.14 Goods.", "DOL-WHD", "", "", "", "The definition in section 3(i) of the Act states that  goods,  as used in the Act, means \u201cgoods (including ships and marine equipment), wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof other than a producer, manufacturer, or processor thereof.\u201d The interpretative bulletin on general coverage of the Act, part 776 of this chapter, contains a detailed discussion of the application of this definition and what is included in it."], ["29:29:3.1.1.2.40.1.255.16", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.15 Sale and resale.", "DOL-WHD", "", "", "", "(a) Section 3(k) of the Act provides that \u201cSale\u201d or \u201csell\u201d, as used in the Act, \u201cincludes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.\u201d Since \u201cgoods\u201d, as defined, includes any part or ingredient of goods (see \u00a7 779.14), a \u201cresale\u201d of goods includes their sale in a different form than when first purchased or sold, such as the sale of goods of which they have become a component part ( Arnold  v.  Kanowsky,  361 U.S. 388). The Act, in section 3(n), provides one exception to this rule by declaring that \u201cresale\u201d, as used in the Act, \u201cshall 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.\u201d A resale of goods is not confined to resale of the goods as such, but under section 3(k) may include an \u201cother disposition\u201d of the goods in which they are disposed of in a transaction of a different kind; thus the sale by a restaurant to an airline of prepared meals to be served in flight to passengers whose tickets entitle them to a \u201ccomplimentary\u201d meal is a sale of goods \u201cfor resale\u201d. ( Mitchell  v.  Sherry Corine Corp.,  264 F 2d 831 (C.A. 4), cert. denied 360 U.S. 934.)\n\n(b) In construing section 3(s)(1) of the Act as it was prior to the 1966 amendments it should be noted that section 3(n) of the prior Act defined \u201cresale\u201d by declaring that this term, \u201cexcept as used in subsection (s)(1), 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.\u201d Thus, although section 3(n) of the prior Act also provided the one exception to the meaning of \u201cresale\u201d, it made clear that the exception was inapplicable in determining under section 3(s)(1) of the prior Act, \u201cif such enterprise purchases or receives goods for resale that move or have moved across State lines (not in deliveries from the reselling establishment) which amount in total volume to $250,000 or more\u201d. The application of the inflow test under section 3(s) (1) of the prior Act is discussed fully in subpart C of this part."], ["29:29:3.1.1.2.40.1.255.17", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.16 State.", "DOL-WHD", "", "", "", "As used in the Act,  State  means \u201cany State of the United States or the District of Columbia or any Territory or possession of the United States\u201d (Act, section 3(c)). The application of this definition in determining questions of coverage under the Act's definition of \u201ccommerce\u201d and \u201cproduced\u201d (see \u00a7\u00a7 779.12, 779.13) is discussed in the interpretative bulletin on general coverage, part 776 of this chapter. This definition is also important in determining whether goods \u201cfor resale\u201d purchased or received by an enterprise move or have moved across State lines within the meaning of former section 3(s)(1) of the Act (prior to the 1966 amendments) and whether sales of goods or services are \u201cmade within the State\u201d within the meaning of the retail or service establishment exemption in section 13(a)(2), as discussed in subpart D of this part."], ["29:29:3.1.1.2.40.1.255.18", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.17 Wage and wage payments to tipped employees.", "DOL-WHD", "", "", "", "Section 3(m) of the Act provides that as used in the Act, \u201cwage\u201d paid to any employee:\n\nincludes the reasonable cost, as determined by the Secretary of Labor, 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 employees:  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:  Provided further,  That the Secretary is authorized to determine the fair value of such board, lodging, or other facilities 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 pertinent, shall be used in lieu of actual measure of cost in determining the wage paid to any employee. In determining the wage of a tipped employee, the amount paid such employee by his employer shall be deemed to be increased on account of tips by an amount determined by the employer, but not by an amount in excess of 50 per centum of the applicable minimum wage rate, except that in the case of an employee who (either himself or acting through his representative) shows to the satisfaction of the Secretary that the actual amount of tips received by him was less than the amount determined by the employer as the amount by which the wage paid him was deemed to be increased under this sentence, the amount paid such employee by his employer shall be deemed to have been increased by such lesser amount.\n\nincludes the reasonable cost, as determined by the Secretary of Labor, 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 employees:  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:  Provided further,  That the Secretary is authorized to determine the fair value of such board, lodging, or other facilities 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 pertinent, shall be used in lieu of actual measure of cost in determining the wage paid to any employee. In determining the wage of a tipped employee, the amount paid such employee by his employer shall be deemed to be increased on account of tips by an amount determined by the employer, but not by an amount in excess of 50 per centum of the applicable minimum wage rate, except that in the case of an employee who (either himself or acting through his representative) shows to the satisfaction of the Secretary that the actual amount of tips received by him was less than the amount determined by the employer as the amount by which the wage paid him was deemed to be increased under this sentence, the amount paid such employee by his employer shall be deemed to have been increased by such lesser amount.\n\nAs explained in part 531 of this chapter, section 3(m) of the Act governs the payment of wages required by the Act, including payment in other than cash and in tips. Part 531 of this chapter contains the regulations under which the reasonable cost or fair value of such facilities furnished may be computed for inclusion as part of wages required by the Act. Section 3(m) provides a method for determining the wage of a \u201ctipped employee\u201d and this term as defined in section 3(t) of the Act \u201cmeans any employee engaged in an occupation in which he customarily and regularly receives more than $20 a month in tips\u201d. Regulations under which wage credits are permitted on account of tips paid to \u201ctipped employees\u201d are also contained in part 531 of this chapter."], ["29:29:3.1.1.2.40.1.255.19", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.18 Regular rate.", "DOL-WHD", "", "", "", "As explained in the interpretative bulletin on overtime compensation, part 778 of this chapter, employees subject to the overtime pay provisions of the Act must generally receive for their overtime work in any workweek as provided in the Act not less than one and one-half times their regular rates of pay. Section 7(e) of the Act defines \u201cregular rate\u201d in the following language:\n\n(e) As used in this section the  regular rate  at which an employee is employed shall be deemed to include all remuneration for employment paid to, or on behalf of, the employee, but shall not be deemed to include:\n \n (1) Sums paid as gifts; payments in the nature of gifts made at Christmas time or on other special occasions, as a reward for service, the amounts of which are not measured by or dependent on hours worked, production, or efficiency;\n \n (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 similar cause; reasonable payments for traveling expenses or other expenses, incurred by an employee in the furtherance of his employer's interests and properly reimbursable by the employer; and other similar payments to an employee which are not made as compensation for his hours of employment;\n \n (3) Sums paid in recognition of services performed during a given period if either, (a) both the fact that payment 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 requirements of the Secretary of Labor set forth in appropriate regulation 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 Secretary) paid to performers, including announcers, on radio and television programs;\n \n (4) Contributions irrevocably made by an employer 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;\n \n (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 under subsection (a) or in excess of the employee's normal working hours or regular working hours, as the case may be;\n \n (6) Extra compensation provided by a premium rate paid for work by the employee on Saturdays, Sundays, 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 times the rate established in good faith for like work performed in nonovertime hours on other days; or\n \n (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 regular workday (not exceeding 8 hours) or workweek (not exceeding the maximum workweek applicable to such employee under subsection (a), where such premium rate is not less than one and one-half times the rate established in good faith by the contract or agreement for like work performed during such workday or workweek.\n\n(e) As used in this section the  regular rate  at which an employee is employed shall be deemed to include all remuneration for employment paid to, or on behalf of, the employee, but shall not be deemed to include:\n\n(1) Sums paid as gifts; payments in the nature of gifts made at Christmas time or on other special occasions, as a reward for service, the amounts of which are not measured by or dependent on hours worked, production, or efficiency;\n\n(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 similar cause; reasonable payments for traveling expenses or other expenses, incurred by an employee in the furtherance of his employer's interests and properly reimbursable by the employer; and other similar payments to an employee which are not made as compensation for his hours of employment;\n\n(3) Sums paid in recognition of services performed during a given period if either, (a) both the fact that payment 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 requirements of the Secretary of Labor set forth in appropriate regulation 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 Secretary) paid to performers, including announcers, on radio and television programs;\n\n(4) Contributions irrevocably made by an employer 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;\n\n(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 under subsection (a) or in excess of the employee's normal working hours or regular working hours, as the case may be;\n\n(6) Extra compensation provided by a premium rate paid for work by the employee on Saturdays, Sundays, 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 times the rate established in good faith for like work performed in nonovertime hours on other days; or\n\n(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 regular workday (not exceeding 8 hours) or workweek (not exceeding the maximum workweek applicable to such employee under subsection (a), where such premium rate is not less than one and one-half times the rate established in good faith by the contract or agreement for like work performed during such workday or workweek.\n\nThis definition, which is discussed at length in part 778 of this chapter, also governs the computation of \u201cregular rate\u201d for purposes of the special overtime exemption of certain commission employees of retail or service establishments which is contained in section 7(i) of the Act and is discussed in subpart E of this part."], ["29:29:3.1.1.2.40.1.255.20", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.19 Employer, employee, and employ.", "DOL-WHD", "", "", "", "The Act's major provisions impose certain requirements and prohibitions on every \u201cemployer\u201d subject to their terms. The employment by an \u201cemployer\u201d of an \u201cemployee\u201d is, to the extent specified in the Act, made subject to minimum wage and overtime pay requirements and to prohibitions against the employment of oppressive child labor. The Act provides its own definitions of \u201cemployer,\u201d \u201cemployee\u201d, and \u201cemploy\u201d, under which \u201ceconomic reality\u201d rather than \u201ctechnical concepts\u201d determines whether there is employment subject to its terms ( Goldberg  v.  Whitaker House Cooperative,  366 U.S. 28;  United States  v.  Silk,  331 U.S. 704;  Rutherford Food Corp.  v.  McComb,  331 U.S. 722). An \u201cemployer\u201d, as defined in section 3(d) of the Act, \u201cincludes any person acting directly or indirectly in the interest of an employer in relation to an employee but shall not include the United States or any State or political subdivision of a State (except with respect to employees of a State or a political subdivision thereof, employed (a) in a hospital, institution, or school referred to in the last sentence of subsection (r) of this section, or (b) in the operation of a railway or carrier referred to in such sentence), or any labor organization (other than when acting as an employer), or anyone acting in the capacity of officer or agent of such labor organization\u201d. An \u201cemployee\u201d, as defined in section 3(e) of the Act, \u201cincludes any individual employed by an employer\u201d (except that the term is further qualified for purposes of counting man-days of employment by an employer in agriculture). \u201cEmploy\u201d, as used in the Act, is defined in section 3(g) to include \u201cto suffer or permit to work\u201d. It should be noted, as explained in the interpretative bulletin on general coverage, part 776 of this chapter, that in appropriate circumstances two or more employers may be jointly responsible for compliance with the statutory requirements applicable to employment of a particular employee. It should also be noted that \u201cemployer\u201d, \u201centerprise\u201d, and \u201cestablishment\u201d are not synonymous terms, as used in the Act. An employer may have an enterprise with more than one establishment, or he may have more than one enterprise, in which he employs employees within the meaning of the Act. Also, there may be different employers who employ employees in a particular establishment or enterprise."], ["29:29:3.1.1.2.40.1.255.21", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.20 Person.", "DOL-WHD", "", "", "", "As used in the Act (including the definition of \u201centerprise\u201d set forth in \u00a7 779.21), \u201cperson\u201d is defined as meaning \u201can individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons.\u201d (Act, section 3(a).)"], ["29:29:3.1.1.2.40.1.255.22", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.21 Enterprise.", "DOL-WHD", "", "", "", "(a) Section 3(r) of the Act provides, in pertinent part that \u201centerprise\u201d as used in the Act:\n\nmeans the related activities performed (either through unified operation or common 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 enterprise by an independent contractor:  Provided,  That, within the meaning of this subsection, a retail or service establishment 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 reason 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, distributor, or advertiser, or (b) that it will join with other such establishments in the same industry for the purpose of the collective purchasing, or (c) that it will have the exclusive right to sell the goods or use the brand name of a manufacturer, distributor, or advertiser within a specified 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 * * *\n\nmeans the related activities performed (either through unified operation or common 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 enterprise by an independent contractor:  Provided,  That, within the meaning of this subsection, a retail or service establishment 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 reason 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, distributor, or advertiser, or (b) that it will join with other such establishments in the same industry for the purpose of the collective purchasing, or (c) that it will have the exclusive right to sell the goods or use the brand name of a manufacturer, distributor, or advertiser within a specified 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 * * *\n\nThe scope and application of this definitional language is discussed in subpart C of this part.\n\n(b) The 1966 amendments added two clauses to the above language of the definition to make it clear that \u201cthe activities performed by any person or persons\u201d will be regarded as performed for a business purpose if they are performed:\n\n(1) In connection with the operation of a hospital, 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, an elementary or secondary school, or an institution of higher education (regardless of whether or not such hospital, institution, or school is public or private or operated for profit or not for profit); or\n \n (2) 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).\n\n(1) In connection with the operation of a hospital, 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, an elementary or secondary school, or an institution of higher education (regardless of whether or not such hospital, institution, or school is public or private or operated for profit or not for profit); or\n\n(2) 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).\n\nA discussion of the scope and application of this added language is contained in part 776 of this chapter."], ["29:29:3.1.1.2.40.1.255.23", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.22 Enterprise engaged in commerce or in the production of goods for commerce.", "DOL-WHD", "", "", "", "The portions of the former and present definitions of \u201centerprise engaged in commerce or in the production of goods for commerce\u201d (contained in section 3(s) of the Act prior to the 1966 amendments and as amended in 1966) which are important to a determination of the application of provisions of the Act to employees employed by retailers generally and by certain retail or service establishments are as follows:\n\nPrevious coverage (prior to the 1966 amendments):\n\n(s) Enterprise engaged in commerce or in the production of goods for commerce means any of the following in the activities of which employees are so engaged, including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person:\n \n (1) Any such enterprise which has one or more retail or service establishments if the annual gross volume of sales of such enterprise is not less than $1 million, exclusive of excise taxes at the retail level which are separately stated and if such enterprise purchases or receives goods for resale that move or have moved across State lines (not in deliveries from the reselling establishment) which amount in total annual volume to $250,000 or more;\n  \n (5) Any gasoline service establishment if the annual gross volume of sales of such establishment is not less than $250,000, exclusive of excise taxes at the retail level which are separately stated:\n \n Provided,  That an establishment shall not be considered to be an enterprise engaged in commerce or in the production of goods for commerce, or a part of an enterprise engaged in commerce or in the production of goods for commerce, and the sales of such 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, if the only employees of such establishment are the owner thereof or persons standing in the relationship of parent, spouse, or child of such owner.\n\n(s) Enterprise engaged in commerce or in the production of goods for commerce means any of the following in the activities of which employees are so engaged, including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person:\n\n(1) Any such enterprise which has one or more retail or service establishments if the annual gross volume of sales of such enterprise is not less than $1 million, exclusive of excise taxes at the retail level which are separately stated and if such enterprise purchases or receives goods for resale that move or have moved across State lines (not in deliveries from the reselling establishment) which amount in total annual volume to $250,000 or more;\n\n(5) Any gasoline service establishment if the annual gross volume of sales of such establishment is not less than $250,000, exclusive of excise taxes at the retail level which are separately stated:\n\nProvided,  That an establishment shall not be considered to be an enterprise engaged in commerce or in the production of goods for commerce, or a part of an enterprise engaged in commerce or in the production of goods for commerce, and the sales of such 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, if the only employees of such establishment are the owner thereof or persons standing in the relationship of parent, spouse, or child of such owner.\n\nNew coverage (beginning with the 1966 amendments):\n\n(s)  Enterprise engaged in commerce or in the production of goods for commerce  means an enterprise which has employees engaged in commerce or in the production of goods for commerce, including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person, and which:\n \n (1) During the period February 1, 1967, through January 31, 1969, 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 which are separately stated) or is a gasoline service establishment whose annual gross volume of sales is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated), and beginning February 1, 1969, is an enterprise whose annual gross volume of sales made or business done is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated);\n  \n (4) Is engaged in the operation of a hospital, 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, an elementary or secondary school, or an institution of higher education (regardless of whether or not such hospital, institution, or school is public or private or operated for profit or not for profit).\n \n Any establishment which has as its only regular 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 production of goods for commerce or a part of such an enterprise, and the sales of such 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.\n\n(s)  Enterprise engaged in commerce or in the production of goods for commerce  means an enterprise which has employees engaged in commerce or in the production of goods for commerce, including employees handling, selling, or otherwise working on goods that have been moved in or produced for commerce by any person, and which:\n\n(1) During the period February 1, 1967, through January 31, 1969, 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 which are separately stated) or is a gasoline service establishment whose annual gross volume of sales is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated), and beginning February 1, 1969, is an enterprise whose annual gross volume of sales made or business done is not less than $250,000 (exclusive of excise taxes at the retail level which are separately stated);\n\n(4) Is engaged in the operation of a hospital, 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, an elementary or secondary school, or an institution of higher education (regardless of whether or not such hospital, institution, or school is public or private or operated for profit or not for profit).\n\nAny establishment which has as its only regular 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 production of goods for commerce or a part of such an enterprise, and the sales of such 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."], ["29:29:3.1.1.2.40.1.255.24", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.23 Establishment.", "DOL-WHD", "", "", "", "As used in the Act, the term  establishment,  which is not specially defined therein, refers to a \u201cdistinct physical place of business\u201d rather than to \u201can entire business or enterprise\u201d which may include several separate places of business. This is consistent with the meaning of the term as it is normally used in business and in government, is judicially settled, and has been recognized in the Congress in the course of enactment of amendatory legislation ( Phillips  v.  Walling,  324 U.S. 490;  Mitchell  v. Bekins Van & Storage Co., 352 U.S. 1027; 95 Cong. Rec. 12505, 12579, 14877; H. Rept. No. 1453, 81st Cong., 1st Sess., p. 25). As appears more fully elsewhere in this part, this is the meaning of the term as used in sections 3(r), 3(s), 6(d), 7(i), 13(a), 13(b), and 14 of the Act."], ["29:29:3.1.1.2.40.1.255.25", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "A", "Subpart A\u2014General", "", "\u00a7 779.24 Retail or service establishment.", "DOL-WHD", "", "", "", "In the 1949 amendments to the Act, the term \u201cretail or service establishment\u201d, which was not previously defined in the law, was given a special definition for purposes of the Act. The legislative history of the 1961 and the 1966 amendments to the Act, which use the same term in a number of provisions relating to coverage and exemptions, indicates that no different meaning was intended by the term \u201cretail or service establishment\u201d as used in the new provisions from that already established by the Act's definition. On the contrary, the existing definition was reenacted in section 13(a)(2) of the Act as amended in 1961 and 1966 as follows: \u201cA \u2018retail or service establishment\u2019 shall mean an establishment 75 per centum of whose annual dollar volume of sales of goods or services (or of both) is not for resale and is recognized as retail sales or services in the particular industry\u201d. The application of this definition, which has had much judicial construction since its original enactment, is considered at length in subpart D of this part. As is apparent from the quoted language, not every establishment which engages in retail selling of goods or services will constitute a \u201cretail or service establishment\u201d within the meaning of the Act."], ["29:29:3.1.1.2.40.2.256.1", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.100 Basic coverage in general.", "DOL-WHD", "", "", "", "Except as otherwise provided in specific exemptions, the minimum wage, maximum hours, overtime pay, equal pay, and child labor provisions of the Act have applied and continue to apply subsequent to the 1966 amendments to employees who are individually engaged in interstate commerce or in the production of goods for such commerce as these terms are defined in the Act and to employees in certain enterprises described in the amended section 3(s) which were covered under section 3(s) of the Act prior to the amendments. Through the broadening of the definition of a covered enterprise the Act's coverage was extended to additional employees because of their employment in certain enterprises beginning February 1, 1967, and in certain other enterprises beginning February 1, 1969. Such covered enterprises are described in section 3(s) as enterprises engaged in commerce or in the production of goods for commerce and further described in sections 3(s) (1) through (4) of the amended Act. A detailed discussion of the coverage of employees in those enterprises covered under the prior and amended Act of interest to the retail industry is contained in subpart C of this part. The employer must comply with the minimum wage and overtime requirements of the Act with respect to all employees who are covered either because they are individually engaged in interstate or foreign commerce or in the production of goods for such commerce, or because of their employment in an enterprise covered under the prior or amended enterprise definition of the Act, except those who may be denied one or both of these benefits by virtue of some specific exemption provision of the Act. Of special interest to the retailer in a covered enterprise is the exemption from the minimum wage and overtime provisions for certain small retail or service establishments of such enterprise. This exemption is applicable under the conditions and subject to exceptions stated in section 13(a) (2) of the Act to any retail or service establishment which has an annual dollar volume of sales of less than $250,000 (exclusive of certain excise taxes) even if the establishment is a part of an enterprise that is covered by the Act. This exemption and other exemptions of particular interest to retailers and their employees are discussed in subparts D and E of this part. The child labor provisions as they apply to retail or service businesses are discussed in subpart F of this part."], ["29:29:3.1.1.2.40.2.256.2", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.101 Guiding principles for applying coverage and exemption provisions.", "DOL-WHD", "", "", "", "It is clear that Congress intended the Fair Labor Standards Act to be broad in its scope. \u201cBreadth of coverage is vital to its mission.\u201d ( Powell  v.  U.S. Cartridge Co.,  339 U.S. 497.) An employer who claims an exemption under the Act has the burden of showing that it applies. ( Walling  v.  General Industries Co.,  330 U.S. 545;  Mitchell  v.  Kentucky Finance Co.,  359 U.S. 290;  Fleming  v.  Hawkeye Pearl Button Co.,  113 F. 2d 52.) Conditions specified in the language of the Act are \u201cexplicit prerequisites to exemption.\u201d ( Arnold  v.  Kanowsky,  361 U.S. 388.) \u201cThe details with which the exemptions in this Act have been made preclude their enlargement by implication.\u201d ( Addison  v.  Holly Hill,  322 U.S. 60;  Maneja  v.  Waialua,  349 U.S. 254.) Exemptions provided in the Act \u201care to be narrowly construed against the employer seeking to assert them\u201d and their application limited to those who come plainly and unmistakably within their terms and spirit; this restricted or narrow construction of the exemptions is necessary to carry out the broad objectives for which the Act was passed. ( Phillips  v.  Walling,  324 U.S. 490;  Mitchell  v.  Kentucky Finance Co.,  supra;  Arnold  v.  Kanowsky,  supra;  Calaf  v.  Gonzalez,  127 F. 2d 934;  Bowie  v.  Gonzalez,  117 F. 2d 11;  Mitchell  v.  Stinson,  217 F. 2d 210;  Fleming  v.  Hawkeye Pearl Button Co.,  113 F. 2d 52.)"], ["29:29:3.1.1.2.40.2.256.3", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.102 Scope of this subpart.", "DOL-WHD", "", "", "", "The Act has applied since 1938 and continues to apply to all employees, not specifically exempted, who are engaged: (a) In interstate or foreign commerce or (b) in the production of goods for such commerce, which is defined to include any closely related process or occupation directly essential to such production. (See \u00a7\u00a7 779.12-779.16 for definitions governing the scope of this coverage.) Prior to the 1961 amendments a retailer was not generally concerned with the coverage provisions as they applied to his individual employees because retail or service establishments ordinarily were exempt. However, in some cases such coverage was applicable as where employees were employed in central offices of warehouses of retail chain store systems and, therefore, were not exempt. (See \u00a7 779.118.) Some exemptions for retail or service establishments were narrowed as a result of the 1961 amendments and further revised or eliminated by the 1966 amendments effective February 1, 1967. Therefore, discussion of the individual coverage provisions of the Act is pertinent and this subpart will discuss briefly the principles of such coverage with particular reference to employment in the retail or service trades. A more comprehensive discussion with respect to employees engaged in commerce or in the production of goods for commerce may be found in part 776 of this chapter, the general coverage bulletin."], ["29:29:3.1.1.2.40.2.257.10", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.109 Amount of activities which constitute engaging in commerce or in the production of goods for commerce.", "DOL-WHD", "", "", "", "The Act makes no distinction as to the percentage, volume, or amount of activities of either the employee or the employer which constitute engaging in commerce or in the production of goods for commerce. However, an employee whose in-commerce or production activities are isolated, sporadic, or occasional and involve only insubstantial amounts of goods will not be considered \u201cengaged in commerce or in the production of goods for commerce\u201d by virtue of that fact alone. The law is settled that every employee whose activities in commerce or in the production of goods for commerce, even though small in amount are regular and recurring, is considered \u201cengaged in commerce or in the production of goods for commerce\u201d."], ["29:29:3.1.1.2.40.2.257.11", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.110 Employees in retailing whose activities may bring them under the Act.", "DOL-WHD", "", "", "", "The discussion in \u00a7\u00a7 779.103 to 779.109 included general reference to types of employees in the retail or service field whose individual activities constitute engagement in interstate or foreign commerce or in the production of goods for such commerce within the meaning of the Act. There are many classes of employees customarily employed by retail or service establishments or enterprises whose individual activities ordinarily constitute engagement in commerce or in the production of goods for commerce within the meaning of the Act. The groups of employees discussed in the following \u00a7\u00a7 779.111 to 779.118, are illustrative only. There are other employees whose activities may be covered; also there are other activities performed by the groups discussed which would result in individual coverage under the Act."], ["29:29:3.1.1.2.40.2.257.12", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.111 Buyers and their assistants.", "DOL-WHD", "", "", "", "Buyers and their assistants, employed by retail businesses, as a regular part of their duties, generally travel across State lines, or use the mails, telegraph, or telephone for interstate communication to order goods; or they regularly send or receive, across State lines, written reports, messages or other documents. These activities of such employees constitute engagement \u201cin commerce\u201d within the meaning of the Act."], ["29:29:3.1.1.2.40.2.257.13", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.112 Office employees.", "DOL-WHD", "", "", "", "Similarly office employees of retail businesses who regularly and recurrently check records of and make payments for goods shipped to their employer from outside of the State, or regularly and recurrently keep records of or otherwise work on the accounts of their employer's out-of-State customers, or who regularly and recurrently prepare or mail letters, checks, reports or other documents to out-of-State points, are engaged both in commerce and in the production of goods for commerce within the meaning of the Act. Likewise, timekeepers who regularly and recurrently prepare and maintain payrolls for and pay employees who are engaged in commerce or in the production of goods for commerce are themselves engaged in covered activities."], ["29:29:3.1.1.2.40.2.257.14", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.113 Warehouse and stock room employees.", "DOL-WHD", "", "", "", "Warehouse and stock room employees of retail businesses who regularly and recurrently engage in the loading or unloading of goods moving in commerce, or who regularly and recurrently handle, pack or otherwise work on goods that are destined to out-of-State points are engaged in covered activities."], ["29:29:3.1.1.2.40.2.257.15", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.114 Transportation employees.", "DOL-WHD", "", "", "", "Transportation employees of retail businesses, such as truck drivers or truck drivers' helpers, who regularly and recurrently cross State lines to make deliveries or to pick up goods for their employer; or who regularly and recurrently pick up at rail heads, air, bus or other such terminals goods originating out of State, or deliver to such terminals goods destined to points out of State; and dispatchers who route, plan or otherwise control such out-of-State deliveries and pick ups, are engaged in interstate commerce within the meaning of the Act."], ["29:29:3.1.1.2.40.2.257.16", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.115 Watchmen and guards.", "DOL-WHD", "", "", "", "Watchmen or guards employed by retail businesses who protect the warehouses, workshops, or store premises where goods moving in interstate or foreign commerce are kept or where goods are produced for such commerce, are covered under the Act."], ["29:29:3.1.1.2.40.2.257.17", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.116 Custodial and maintenance employees.", "DOL-WHD", "", "", "", "Custodial and maintenance employees who perform maintenance and custodial work on the machinery, equipment, or premises where goods regularly are produced for commerce or from which goods are regularly shipped in interstate commerce are engaged in covered activities."], ["29:29:3.1.1.2.40.2.257.18", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.117 Salesmen and sales clerks.", "DOL-WHD", "", "", "", "A salesman or a sales clerk who regularly and recurrently takes orders for, or sells, or selects merchandise for delivery to points outside the State or which are to be shipped or delivered to a customer from a point outside the State, i.e. drop shipments; or who wraps, packs, addresses or otherwise prepares goods for out-of-State shipments is performing covered activities."], ["29:29:3.1.1.2.40.2.257.19", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.118 Employees providing central services for multi-unit organizations.", "DOL-WHD", "", "", "", "Employees providing central services for a multiunit organization may be engaged both \u201cin commerce\u201d and \u201cin the production of goods for commerce\u201d within the meaning of the Act. For example, employees engaged in work relating to the coordinated purchasing, warehousing and distribution (and in the administrative and clerical work relating to such activities) for various retail units of a chain are covered under the Act. (See  Phillips Co.  v.  Walling,  324 U.S. 490;  Walling  v.  Jacksonville Paper Co.,  317 U.S. 564, affirming, 128 F. 2d 935 (CA-5);  Mitchell  v.  C. & P. Stores,  286 F. 2d 109 (CA-5);  Mitchell  v.  E. G. Shinner & Co.,  Inc., 221 F. 2d 260 (CA-7);  Donovan  v.  Shell Oil Co.,  168 F. 2d 776 (CA-8).) In addition, employees who regularly and recurrently correspond and maintain records of activities of out-of-State stores and such employees as traveling auditors, inventory men, window display men, etc., who regularly travel from State to State in the performance of their duties are covered under the Act. (See  Mitchell  v.  Kroger Co.,  248 F. 2d 935 (CA-8).)"], ["29:29:3.1.1.2.40.2.257.20", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.119 Exempt occupations.", "DOL-WHD", "", "", "", "Of course, it should be noted that although employees may be engaged in commerce or in the production of goods for commerce within the meaning of the Act, they may be exempt from the Act's minimum wage or overtime provisions (or both). For a complete list of such exemptions the Act should be consulted. Those exemptions, however, which are of particular interest to employers and employees in the retail field are discussed in subparts D, E, and F of this part."], ["29:29:3.1.1.2.40.2.257.4", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.103 Employees \u201cengaged in commerce.\u201d", "DOL-WHD", "", "", "", "Employees are \u201cengaged in commerce\u201d within the meaning of the Act when they are performing work involving or related to the movement of persons or things (whether tangibles or intangibles, and including information and intelligence) among the several States or between any State and any place outside thereof. (The statutory definition of commerce is contained in section 3(b) of the Act and is set forth in \u00a7 779.12.) The courts have made it clear that this includes every employee employed in the channels of such commerce or in activities so closely related to this commerce, as to be considered a part of it as a practical matter. (Court cases are cited in the discussion of this term in \u00a7\u00a7 776.9-776.13 of this chapter). Typically, but not exclusively, employees engaged in interstate or foreign commerce include employees in distributing industries, such as wholesaling or retailing, who sell, handle or otherwise work on goods moving in interstate commerce as well as workers who order, receive, pack, ship, or keep records of such goods; clerical and other workers who regularly use the mails, telephone or telegraph for interstate communication; and employees who regularly travel across State lines while working."], ["29:29:3.1.1.2.40.2.257.5", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.104 Employees \u201cengaged in the production of goods for commerce.\u201d", "DOL-WHD", "", "", "", "The activities constituting \u201cproduction\u201d within the meaning of the phrase \u201cengaged in * * * the production of goods for commerce\u201d are defined in section 3(j) of the Act. (The statutory definition is set forth in \u00a7 779.13.) The handling or otherwise working on goods intended for shipment out of the State, directly or indirectly, in engagement in the \u201cproduction\u201d of goods for commerce. Thus, employees in retail stores who sell, pack, or otherwise work on goods which are to be shipped or delivered outside of the State are engaged in the production of goods for commerce. Typically, but not exclusively, employees engaged in the production of goods for interstate or foreign commerce, include those who work in manufacturing, processing and distributing establishments, including wholesale or retail establishments, that produce goods for interstate or foreign commerce. This includes everyone, including office, management, sales and shipping personnel, and maintenance, custodial and protective employees, whether they are employed by the producer or an intermediary. Employees may be covered even if their employer does not ship his goods directly in such commerce. The goods may leave the State through another firm. The workers may produce goods which become a part or ingredient of goods shipped in interstate or foreign commerce by another firm. Also covered are workers who are engaged in a closely related process or occupation directly essential to such production. (See \u00a7 779.105.)"], ["29:29:3.1.1.2.40.2.257.6", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.105 Employees engaged in activities \u201cclosely related\u201d and \u201cdirectly essential\u201d to the production of goods for commerce.", "DOL-WHD", "", "", "", "Some employees are covered because their work, although not actually a part of such production, is \u201cclosely related\u201d and \u201cdirectly essential\u201d to it. This group of employees includes bookkeepers, stenographers, clerks, accountants and auditors and other office and white collar workers, and employees doing payroll, timekeeping and time study work for the producer of goods; employees in the personnel, labor relations, advertising, promotion, and public relations activities of the producing enterprise; work instructors for the producer; employees maintaining, servicing, repairing or improving the buildings, machinery, equipment, vehicles or other facilities used in the production of goods for commerce, and such custodial and protective employees as watchmen, guards, firemen, patrolmen, caretakers, stockroom workers, and warehousemen; and transportation workers bringing supplies, materials, or equipment to the producer's premises, removing waste materials therefrom, or transporting materials or other goods, or performing such other transportation activities, as the needs of production may require. These examples are illustrative, rather than exhaustive, of the group of employees of a producer who are \u201cengaged in the production of goods for commerce\u201d by reason of performing activities closely related and directly essential to such production."], ["29:29:3.1.1.2.40.2.257.7", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.106 Employees employed by an independent employer.", "DOL-WHD", "", "", "", "Where the work of an employee would be closely related and directly essential to the production of goods for commerce if he were employed by a producer of the goods, the mere fact that the employee is employed by an independent employer will not justify a different answer. (See \u00a7\u00a7 776.17(c) and 776.19 of this chapter.)"], ["29:29:3.1.1.2.40.2.257.8", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.107 Goods defined.", "DOL-WHD", "", "", "", "The term  goods  is defined in section 3(i) of the Act and has a well established meaning under the Act since it has been contained in the statute from the date of its enactment in 1938. A comprehensive statement of the meaning of the term \u201cgoods\u201d is contained in part 776 of this chapter, which also cites the court cases in which the term was construed. The statutory definition of \u201cgoods\u201d is set forth in \u00a7 779.14. It will be observed that the term \u201cgoods\u201d includes any part or ingredient of the goods. Also that \u201cgoods\u201d as defined in the Act are not limited to commercial goods, or articles of trade, or, indeed, to tangible property, but include \u201carticles or subjects of commerce of any character.\u201d Thus telegraphic messages have been held to be \u201cgoods\u201d within the meaning of the Act ( Western Union Tel. Co.  v.  Lenroot,  323 U.S. 490). Some of the \u201carticles or subjects of commerce\u201d which fall within the definition of \u201cgoods\u201d include written materials such as newspapers, magazines, brochures, pamphlets, bulletins, and announcements; written reports, fiscal and other statements and accounts, correspondence, and other documents; advertising, motion pictures, newspaper and radio copy; art work and manuscripts for publication; sample books, letterheads, envelopes, shipping tags, labels, checkbooks, blankbooks, book covers, advertising circulars, and wrappers and other packaging materials."], ["29:29:3.1.1.2.40.2.257.9", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "B", "Subpart B\u2014Employment to Which the Act May Apply: Basic Principles and Individual Coverage", "", "\u00a7 779.108 Goods produced for commerce.", "DOL-WHD", "", "", "", "Goods are \u201cproduced for commerce\u201d if they are \u201cproduced, manufactured, mined, handled or in any other manner worked on\u201d in any State for sale, trade, transportation, transmission, shipment or delivery, to any place outside thereof. Goods are produced for commerce where the producer intends, hopes, expects, or has reason to believe that the goods or any unsegregated part of them will move (in the same or in an altered form or as a part or ingredient of other goods) in interstate or foreign commerce. If such movement of the goods in commerce can reasonably be anticipated by the producer when the goods are produced, it makes no difference whether he himself or the person to whom the goods are transferred puts the goods in interstate or foreign commerce. The fact that goods do move in interstate or foreign commerce is strong evidence that the producer intended, hoped, expected, or had reason to believe that they would so move. Goods produced to serve the movement of interstate commerce within the same State are also produced for commerce within the meaning of the Act, as explained in part 776 of this chapter."], ["29:29:3.1.1.2.40.3.258.1", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.200 Coverage expanded by 1961 and 1966 amendments.", "DOL-WHD", "", "", "", "The 1961 amendments for the first time since the enactment of the Fair Labor Standards Act of 1938 provided that all employees in a particular business unit are covered by the Act. Prior to the 1961 amendments each employee's coverage depended on whether that employee's activities were in commerce or constituted the production of goods for commerce. All employees employed in an \u201centerprise\u201d described in section 3(s)(1) through (5) of the Act as it was amended in 1961 and section 3(s)(1) through (4) of the Act as amended in 1966 are also covered. Thus, it is necessary to consider the meaning of the term \u201centerprise\u201d as used in the Act."], ["29:29:3.1.1.2.40.3.258.2", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.201 The place of the term \u201centerprise\u201d in the Act.", "DOL-WHD", "", "", "", "The term \u201centerprise\u201d is defined in section 3(r) of the Act and, wherever used in the Act, is governed by this definition. (\u00a7 779.21(a) provides that portion of the definition of \u201centerprise\u201d which is pertinent with respect to retail and service enterprises.) The term is a key in determining the applicability of the Act to these businesses. The \u201centerprise\u201d is the unit for determining whether the conditions of section 3(s)(1) through (5) of the prior Act and section 3(s)(1) through (4) of the amended Act, including, where applicable, the requisite dollar volume are met. The \u201centerprise\u201d is also the unit for determining which employees not individually covered by the Act are entitled to the minimum wage, overtime, and equal pay benefits, and to the child labor protection, under sections 6, 7, and 12 of the Act. In general, if the \u201centerprise\u201d comes within any of the categories described in section 3(s)(1) through (5) of the prior Act or section 3(s)(1) through (4) of the amended Act, all employees employed in the \u201centerprise\u201d are covered by the Act and, regardless of their duties, are entitled to the Act's benefits unless a specific exemption applies."], ["29:29:3.1.1.2.40.3.258.3", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.202 Basic concepts of definition.", "DOL-WHD", "", "", "", "Under the definition, the \u201centerprise\u201d consists of \u201cthe related activities performed * * * for a common business purpose.\u201d All of the activities comprising the enterprise must be \u201crelated.\u201d Activities serving a single business purpose may be related, although different, but other activities which are not related are not included in the enterprise. The definition makes clear that the enterprise includes all such related activities which are performed through \u201cunified operation\u201d or \u201ccommon control.\u201d This is true even if they are performed by more than one person, or in more than one establishment, or by more than one corporate or other organizational unit. Specifically included, as a part of the enterprise, are departments of an establishment operated through leasing arrangements. On the other hand, the definition excludes from the \u201centerprise\u201d activities only performed \u201cfor\u201d the enterprise rather than as a part of it by an independent contractor even if they are related to the activities of the enterprise. Also, it makes clear that a truly independent retail or service establishment does not become a part of a larger enterprise merely because it enters into certain types of franchise or collective purchasing arrangements or because it has a common landlord with other such retail establishments."], ["29:29:3.1.1.2.40.3.258.4", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.203 Distinction between \u201centerprise,\u201d \u201cestablishment,\u201d and \u201cemployer.\u201d", "DOL-WHD", "", "", "", "The coverage, exemption and other provisions of the Act depend, in part, on the scope of the terms  employer, establishment,  or  enterprise.  As explained more fully in part 776 of this chapter, these terms are not synonymous. The term  employer  has been defined in the Act since its inception and has a well established meaning. As defined in section 3(d), it includes, with certain stated exceptions, any person acting directly or indirectly in the interest of an employer in relation to an employee. (See \u00a7 779.19.) The term  establishment  means a  distinct physical place of business  rather than  an entire business or enterprise.  (See \u00a7 779.23.) The term  enterprise  was not used in the Act prior to the 1961 amendments, but the careful definition and the legislative history of the 1961 and 1966 amendments provide guidance as to its meaning and application. As defined in the Act, the term  enterprise  is roughly descriptive of a business rather than of an establishment or of an employer although on occasion the three may coincide. The enterprise may consist of a single establishment (see \u00a7 779.204(a)) which may be operated by one or more employers; or it may be composed of a number of establishments which may be operated by one or more employers (see \u00a7 779.204(b)). The enterprise is not necessarily coextensive with the entire business activities of an employer; a single employer may operate more than one enterprise (see \u00a7 779.204(c)). The Act treats as separate enterprises different businesses which are unrelated to each other even if they are operated by the same employer."], ["29:29:3.1.1.2.40.3.258.5", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.204 Common types of \u201centerprise.\u201d", "DOL-WHD", "", "", "", "(a)  The single establishment business.  In the simplest type of organization\u2014the entire business ordinarily is one enterprise. The entire business activity of the single owner-employer may be performed in one establishment, as in the typical independently owned and controlled retail store. In that case the establishment and the enterprise are one and the same. All of the activities of the store are \u201crelated\u201d and are performed for a single business purpose and there is both unified operation and common control. The entire business is the unit for applying the statutory tests. If the coverage tests are met, all of the employees employed by the establishment are employed in the enterprise and will be entitled to the benefits of the Act unless otherwise exempt.\n\n(b)  The multiunit business.  In many cases, as in the typical chain of retail stores, one company conducts its single business in a number of establishments. All of the activities ordinarily are related and performed for one business purpose, the single company which owns the chain also controls the entire business, and the entire business is a single enterprise. The dollar volume of the entire business from all of its establishments is added together to determine whether the requisite dollar volume tests are met. If the coverage tests are met, all of the employees employed in the business will be entitled to the benefits of the Act unless otherwise exempt.\n\n(c)  Complex business organizations.  In complex retail and service organizations, questions may arise as to whether certain activities are a part of a particular enterprise. In some cases one employer may operate several separate enterprises; in others, several employers may conduct their business activities in such a manner that they are part of a single enterprise. The answer, in each case, as to whether or not the \u201centerprise\u201d includes certain activities will depend upon whether the particular activities are \u201crelated\u201d to the business purpose of such enterprise and whether they are performed with its other activities through \u201cunified operation\u201d or \u201ccommon control,\u201d or whether, on the other hand, they are performed for a separate and distinct business purpose. As the Senate Report states,\n\nrelated activities conducted by separate business entities will be considered a part of the same enterprise where they are joined either through unified operation or common control into a unified business system or economic unit to serve a common business purpose.\n \n (S. Rept. 145, 87th Cong., 1st Sess., p. 41; see also H. Rept. 1366, 89th Cong., 2d Sess., p. 9.) \u00a7\u00a7 779.205 through 779.211 discuss the terms of the definition and may aid in making these determinations.\n\nrelated activities conducted by separate business entities will be considered a part of the same enterprise where they are joined either through unified operation or common control into a unified business system or economic unit to serve a common business purpose.\n\n(S. Rept. 145, 87th Cong., 1st Sess., p. 41; see also H. Rept. 1366, 89th Cong., 2d Sess., p. 9.) \u00a7\u00a7 779.205 through 779.211 discuss the terms of the definition and may aid in making these determinations."], ["29:29:3.1.1.2.40.3.259.10", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.209 Vertical activities which are \u201crelated activities.\u201d", "DOL-WHD", "", "", "", "(a) The Senate Report also states (see \u00a7 779.206 that activities are \u201crelated\u201d when they are \u201cpart of a vertical structure such as the manufacturing, warehousing, and retailing of a particular product or products.\u201d Where such activities are performed through unified operation or common control for a common business purpose they will be regarded as a part of the enterprise.\n\n(b) Whether activities are vertically \u201crelated\u201d activities and part of a single enterprise, or whether they constitute separate businesses are separate enterprises, depends upon the facts in each case. In all of these cases of so-called \u201cvertical operations,\u201d the determination whether the activities are \u201crelated,\u201d depends upon the extent to which the various business activities, such as a wholesaling and retailing or manufacturing and retailing, are interrelated and interdependent and are performed to serve a business objective common to all. The mere fact that they are under common ownership is not, by itself, sufficient to bring them within the same enterprise. Thus, where a manufacturing business is carried on separately from and wholly independently of a retail business, with neither serving the business purpose of the other, they are separate businesses even if they are under common ownership. However, where the manufacturing operations are performed in substantial part for the purpose of distributing the goods through the retail stores, or the retail outlet serves to carry out a business purpose of the manufacturing plant, retailing and manufacturing will be \u201crelated\u201d activities and performed for a \u201ccommon business purpose,\u201d and they will be a single enterprise if they are performed through unified operations or common control.\n\n(c) In these cases of \u201cvertical operations\u201d a practical judgment will be required to determine whether the activities are maintained and operated as separate and distinct businesses with different objectives or whether they, in fact, constitute a single integrated business enterprise. The answer necessarily will depend upon all the facts in each case."], ["29:29:3.1.1.2.40.3.259.11", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.210 Other activities which may be part of the enterprise.", "DOL-WHD", "", "", "", "(a) An enterprise may perform certain activities that appear entirely foreign to its principal business but which may be a part of the enterprise because of the manner in which they are performed. In some cases these activities may be a very minor and incidental part of its business operations. For example a retail store may accept payments of utility bills, provide a notarial service, sell stamps, bus and theater tickets, or travellers' checks, etc. These and other activities may be entirely different from the enterprise's principal business but they may be performed on the same premises and by the same employees or otherwise under such circumstances as to be a part of the enterprise.\n\n(b) Sometimes such activities are performed as an adjunct to the principal business to create good will or to attract customers. In other cases, the businessman may engage in them primarily for the additional revenue. Some such foreign activities may be conducted in a more elaborate manner, as where the enterprise operates a bus stop or a post office substation as an adjunct to a principal business such as a hotel or a retail store. Where in such a case the activities are performed in a physically separate \u201cestablishment\u201d (see \u00a7\u00a7 779.303-779.308) from the other business activities of the enterprise and are functionally operated as a separate business, separately controlled, with separate employees, separate records, and a distinct business objective of its own, they may constitute a separate enterprise. Where, however, such activities are intermingled with the other activities of the enterprise and have a reasonable connection to the same business purpose they will be a part of the enterprise."], ["29:29:3.1.1.2.40.3.259.12", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.211 Status of activities which are not \u201crelated.\u201d", "DOL-WHD", "", "", "", "Activities which are not related even if performed by the same employer are not included as a part of the enterprise. The receipts from the unrelated activities will not be counted toward the annual dollar volume of sales or business under section 3(s) and the employees performing such unrelated activities will not be covered merely because they work for the same employer. Common ownership standing alone does not bring unrelated activities within the scope of the same enterprise. If, for example, one individual owns or controls a bank, a filing station, and a factory, the mere fact of common ownership will not make them one enterprise. However, if it appears that there is a reasonable relationship of all the activities to a single business purpose a different conclusion might be warranted. Activities which are not \u201crelated\u201d will be treated separately for purposes of the tests contained in section 3(s)(1) through (5) of the prior Act and section 3(s)(1) through (4) of the amended Act. For example, in the case where a single company operates retail grocery stores and also engages in an unrelated business of constructing homes, one \u201centerprise\u201d for purposes of section 3(s)(1) of both the prior and the amended Act will consist of the retail grocery stores and any activities related to them, and home construction activities will constitute a separate enterprise. The latter will not be included in determining whether the retail business enterprise meets the conditions of section 3(s)(1), and the construction employees will not be covered merely because the retail business is covered. The construction business will be considered separately under section 3(s)(4) of the poor Act and section 3(s)(3) of the amended Act."], ["29:29:3.1.1.2.40.3.259.6", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.205 Enterprise must consist of \u201crelated activities.\u201d", "DOL-WHD", "", "", "", "The enterprise must consist of certain \u201crelated activities\u201d performed for a common business purpose; activities which are not \u201crelated\u201d are not a part of the enterprise even if performed by the same employer. Moreover, even if activities are \u201crelated\u201d they may be excluded from the enterprise if they are performed only \u201cfor\u201d the enterprise and not as a part of it by an independent contractor. This is discussed separately in \u00a7 779.206."], ["29:29:3.1.1.2.40.3.259.7", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.206 What are \u201crelated activities.\u201d", "DOL-WHD", "", "", "", "(a) The Senate Report on the 1961 amendments states as follows, with respect to the meaning of related activities:\n\nWithin the meaning of this term, activities are \u201crelated\u201d when they are the same or similar, such as those of the individual retail or service stores in a chain, or departments of an establishment operated through leasing arrangements. They are also \u201crelated\u201d when they are auxiliary and service activities such as central office and warehousing activities and bookkeeping, auditing, purchasing, advertising and other services. Likewise, activities are \u201crelated\u201d when they are part of a vertical structure such as the manufacturing, warehousing, and retailing of a particular product or products under unified operation or common control for a common business purpose. (Senate Report No. 145, 87th Cong., 1st Sess., Page 41.)\n\nWithin the meaning of this term, activities are \u201crelated\u201d when they are the same or similar, such as those of the individual retail or service stores in a chain, or departments of an establishment operated through leasing arrangements. They are also \u201crelated\u201d when they are auxiliary and service activities such as central office and warehousing activities and bookkeeping, auditing, purchasing, advertising and other services. Likewise, activities are \u201crelated\u201d when they are part of a vertical structure such as the manufacturing, warehousing, and retailing of a particular product or products under unified operation or common control for a common business purpose. (Senate Report No. 145, 87th Cong., 1st Sess., Page 41.)\n\nThus, activities will be regarded as \u201crelated\u201d when they are the same or similar or when they are auxiliary or service activities such as warehousing, bookkeeping, purchasing, advertising, including, generally, all activities which are necessary to the operation and maintenance of the particular business. So also, all activities which are performed as a part of the unified business operation will be \u201crelated,\u201d including, in appropriate cases, the manufacturing, warehousing, and distribution of its goods, the repair and maintenance of its equipment, machinery and its premises, and all other activities which are performed for the common business purpose of the enterprise. The Senate Report on the 1966 amendments makes it plain that related, even if somewhat different, business activities can frequently be part of the same enterprise, and that activities having a reasonable connection with the major purpose of an enterprise would be considered related. (Senate Report No. 1487, 89th Cong., 2d Sess., Page 7.) A more comprehensive discussion of \u201crelated activities\u201d will be found in part 776 of this chapter.\n\n(b) Generally, the answer to the question whether particular activities are \u201crelated\u201d or not, will depend in each case upon whether the activities serve a business purpose common to all the activities of the enterprise, or whether they serve a separate and unrelated business purpose. For example, where a company operates retail or service establishments, and also engages in a separate and unrelated construction business, the construction activities will not be \u201crelated\u201d and will constitute a separate enterprise if they are conducted independently and apart from the retail operations. Where, however, the retail and construction activities are conducted for a common business purpose, they may be \u201crelated,\u201d and if they are performed through unified operation or common control, they will be a part of a single enterprise. Thus, a retail store enterprise may engage in construction activities as an additional outlet for building materials which it sells, or otherwise to serve its retail operations. It may act as its own contractor in constructing or reconstructing its own stores and related facilities. In such a case, the construction activities will be \u201crelated\u201d activities. Other examples may also be cited. The answer in each case will necessarily depend upon all the facts."], ["29:29:3.1.1.2.40.3.259.8", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.207 Related activities in retail operations.", "DOL-WHD", "", "", "", "In the case of an enterprise which has one or more retail or service establishments, all of the activities which are performed for the furtherance of the common business purpose of operating the retail or service establishments are \u201crelated activities.\u201d It is not material that the enterprise sells different goods or provides different services, or that it operates separate retail or service establishments. As stated in the definition, the enterprise includes all related activities whether performed \u201cin one or more establishments.\u201d Since the activities performed by one retail or service establishment are the \u201csame or similar\u201d to the activities performed by another, they are, as such, \u201crelated activities.\u201d (See Senate Report No. 145, 87th Cong. 1st Sess. p. 41.) For example, in operations of a single retailing business a drug store may sell a large variety of different products, and a grocery store may sell clothing and furniture and other goods. Clearly all of these activities are \u201crelated.\u201d Similarly it is clear that all activities of a department store are \u201crelated activities,\u201d even if the store sells a great variety of different types of goods and services and even if, as in some cases, the departmentalized business is conducted in more than one location, as where the department selling garden supplies or electrical appliances is located on separate premises. Whether on the same premises or at separate locations, the activities involved in retail selling of goods or services, of any type, are related activities and they will be considered one enterprise where they are performed, through unified operation or common control, for a common business purpose."], ["29:29:3.1.1.2.40.3.259.9", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.208 Auxiliary activities which are \u201crelated activities.\u201d", "DOL-WHD", "", "", "", "As stated in Senate Report No. 145, 87th Congress, 1st Session, cited in \u00a7 779.206, auxiliary and service activities, such as central office and warehousing activities and bookkeeping, auditing, purchasing, advertising and other similar services, also are \u201crelated activities.\u201d When such activities are performed through unified operation or common control, for a common business purpose, they will be included in the enterprise. The following are some additional examples of auxiliary activities which are \u201crelated activities\u201d and which may be included in the enterprise:\n\n(a) Credit rating and collection services;\n\n(b) Promotional activities including advertising, sign painting, display services, stamp redemptions, and prize contests;\n\n(c) Maintenance and repair services of plant machinery and equipment including painting, decorating, and similar services;\n\n(d) Store or plant engineering, site location and related survey activities;\n\n(e) Detective, guard, watchmen, and other protective services;\n\n(f) Delivery services;\n\n(g) The operation of employee or customer parking lots;\n\n(h) The recruitment, hiring and training activities, and other managerial services;\n\n(i) Recreational and health facilities for customers or employees including eating and drinking facilities (note that employees primarily engaged in certain food service activities in retail establishments may be exempt from the overtime provisions under section 13(b)(18) of the Act if the specific conditions are met; see \u00a7 779.388);\n\n(j) The operation of employee benefit and insurance plans; and\n\n(k) Repair and alteration services on goods for sale or sold to customers."], ["29:29:3.1.1.2.40.3.260.13", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.212 Enterprise must consist of related activities performed for a \u201ccommon business purpose.\u201d", "DOL-WHD", "", "", "", "The related activities described in section 3(r) as included in the statutory enterprise are those performed for a \u201ccommon business purpose.\u201d (See the comprehensive discussion in 29 CFR part 776.) The term \u201ccommon business purpose\u201d as used in the definition does not have a narrow concept and is not intended to be limited to a single business establishment or a single type of business. As pointed out above, retailing, wholesaling and manufacturing may, under certain circumstances be engaged in for a \u201ccommon business purpose.\u201d (See \u00a7 779.209.) An example was also cited where retailing and construction were performed for a common business purpose. (See \u00a7 779.206.) On the other hand, it is clear that even a single individual or corporation may perform activities for different business purposes. (See \u00a7 779.211.) Thus the reports of the House of Representatives cite, as an example of this, the case of a single company which owns several retail apparel stores and is also engaged in the lumbering business. It concludes that these activities are not part of a single enterprise. (H. Rept. 75, 87th Cong.,1st Sess., p. 7 and H. Rept. 1366, 89th Cong. 2d Sess., p. 9.)"], ["29:29:3.1.1.2.40.3.260.14", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.213 What is a common business purpose.", "DOL-WHD", "", "", "", "Generally, the term \u201ccommon business purpose\u201d will encompass activities whether performed by one person or by more than one person, or corporation, or other business organization, which are directed to the same business objective or to similar objectives in which the group has an interest. The scope of the term \u201centerprise\u201d encompasses a single business entity as well as a unified business system which performs related activities for a common business purpose. What is a \u201ccommon business purpose\u201d in any particular case involves a practical judgment based on the facts in the light of the statutory provisions and the legislative intent. The answer ordinarily will be readily apparent from the facts. The facts may show that the activities are related to a single business objective or that they are so operated or controlled as to form a part of a unified business system which is directed to a single business objective. In such cases, it will follow that they are performed for a common business purpose. Where, however, the facts show that the activities are not performed as a part of such enterprise but for an entirely separate and unrelated business, they will be considered performed for a different business purpose and will not be a part of that enterprise. The application of these principles is considered in more detail in part 776 of this chapter."], ["29:29:3.1.1.2.40.3.260.15", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.214 \u201cBusiness\u201d purpose.", "DOL-WHD", "", "", "", "The activities described in section 3(r) are included in an enterprise only when they are performed for a \u201cbusiness\u201d purpose. Activities of eleemosynary, religious, or educational organization may be performed for a business purpose. Thus, where such organizations engage in ordinary commercial activities, such as operating a printing and publishing plant, the business activities will be treated under the Act the same as when they are performed by the ordinary business enterprise. (See  Mitchell  v.  Pilgrims Holiness Church Corp.,  210 F. 2d 879 (CA-7); cert. den. 347 U.S. 1013.) However, the nonprofit educational, religious, and eleemosynary activities will not be included in the enterprise unless they are of the types which the last sentence of section 3(r), as amended in 1966, declares shall be deemed to be performed for a business purpose. Such activities were not regarded as performed for a business purpose under the prior Act and are not so considered under the Act as it was amended in 1966 except for those activities listed in the last sentence of amended section 3(r). (See \u00a7 779.21.)"], ["29:29:3.1.1.2.40.3.261.16", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.215 General scope of terms.", "DOL-WHD", "", "", "", "(a) Under the definition related activities performed for a common business purpose will be a part of the enterprise when they are performed either through \u201cunified operation\u201d or \u201ccommon control.\u201d It should be noted that these conditions are stated in the alternative. Thus if it is established that the described activities are performed through \u201ccommon control,\u201d it is unnecessary to show that they are also performed through \u201cunified operation,\u201d although frequently both conditions may exist.\n\n(b) Under the definition the terms \u201cunified operation\u201d and \u201ccommon control\u201d refer to the performance of the \u201crelated activities.\u201d They do not refer to the ownership of the activities. Although ownership may be a significant factor in determining control (see \u00a7 779.222), the related activities will be a part of the enterprise even if they are not under common ownership, so long as they are performed for a common business purpose through unified operation or common control. Further, under the definition the terms \u201cunified operation\u201d and \u201ccommon control\u201d refer to the performance only of the particular related activities and not to other activities which may be performed by the various persons, corporations, or other business organizations, comprising the enterprise. Thus where two or more individual or business organizations perform certain of their activities through unified operation or common control, these activities will be part of a single enterprise, assuming of course they are related activities performed for a common business purpose. Finally, the definition in section 3(r) makes clear that the described activities may be performed through unified operation or common control \u201cin one or more establishments or by one or more corporate or other organizational units.\u201d The Senate Report on the 1966 amendments makes the following comment with respect to this:\n\nAlso, the operations through substantial ownership or control of a number of firms engaged in similar types of business activities constitute, in the committee's view, related activities performed through unified operation or common control within the meaning of the definition of enterprise. The fact the firms are independently incorporated or physically separate or under the immediate direction of local management, as in  Wirtz  v.  Hardin,  16 Wage Hour Cases 722 (N.D. Ala.), is not determinative of this question. (Sen. Rept. No. 1487, 89th Congress, 2nd session, page 7.)\n\nAlso, the operations through substantial ownership or control of a number of firms engaged in similar types of business activities constitute, in the committee's view, related activities performed through unified operation or common control within the meaning of the definition of enterprise. The fact the firms are independently incorporated or physically separate or under the immediate direction of local management, as in  Wirtz  v.  Hardin,  16 Wage Hour Cases 722 (N.D. Ala.), is not determinative of this question. (Sen. Rept. No. 1487, 89th Congress, 2nd session, page 7.)\n\nBut where, as in the case of a retail store owned by a partnership and another store owned by one of the partners providing similar goods or services, it appears that the activities of the separate stores have no functional interdependence and that they are separately conducted to serve the business purpose of the partnership on the one hand and the business purpose of the individual on the other hand, the requirement of performance \u201cthrough common control\u201d of \u201crelated activities\u201d for a \u201ccommon business purpose\u201d may not be sufficiently met."], ["29:29:3.1.1.2.40.3.261.17", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.216 Statutory construction of the terms.", "DOL-WHD", "", "", "", "The terms \u201cunified operation\u201d and \u201ccommon control\u201d do not have a fixed legal or technical meaning. As used in the definition, these and other terms must be given an interpretation consistent with the Congressional intention to be ascertained from the context in which they are used, the legislation of which they form a part, and the legislative history. In extending coverage of the Act on an \u201centerprise\u201d basis, the Congress intended, by the 1961 and 1966 amendments to cover, among others, business organizations and chain store systems which may perform their related activities through complex business arrangements or business structures, whether they perform their activities for a common business purpose through unified operation or through the retention or exercise of control. For these reasons, the definition of the term \u201centerprise\u201d is stated in broad general terms. This legislative intent is evidenced both by the statements in the Committee Reports and by the definition itself, particularly the broad references to the inclusion in the \u201centerprise\u201d of \u201call such activities\u201d whether performed \u201cin one or more establishments\u201d or \u201cby one or more corporate or other organizational units.\u201d When the Act was amended in 1966 the Congress further broadened coverage by redefining an enterprise engaged in commerce or in the production of goods for commerce in section 3(s). (See \u00a7 779.22.) Where the Congress intended to exclude certain arrangements or activities from the \u201centerprise\u201d it did so by specific provision under the prior and amended Act."], ["29:29:3.1.1.2.40.3.261.18", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.217 \u201cUnified operation\u201d defined.", "DOL-WHD", "", "", "", "Webster defines the word \u201cunify\u201d to mean \u201cto cause to be one; to make into a unit; to unite.\u201d The pertinent definition of \u201coperation\u201d is a method or way of operating, working or functioning. Since the term \u201cunified operation\u201d has reference to the method of performing the related activities, it means combining, uniting, or organizing their performance so that they are in effect a single business unit or an organized business system which is an economic unit directed to the accomplishment of a common business purpose. The term \u201cunified operation\u201d thus includes a business which may consist of separate segments but which is conducted or operated as a unit or as a single business for a common business purpose."], ["29:29:3.1.1.2.40.3.261.19", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.218 Methods to accomplish \u201cunified operation.\u201d", "DOL-WHD", "", "", "", "There are many instances where several establishments, persons, corporations, or other business organizations, join together to perform some or all of their activities as a unified business or business system. They may accomplish such unification through agreements, franchises, grants, leases, or other arrangements which have the effect of aligning or integrating the activities of one company with the activities of others so that they constitute a single business or unified business system. Whether in any particular case the activities are performed through \u201cunified operation\u201d and have the effect of creating a single enterprise, will depend upon all the facts, including the manner in which the activities are performed, the agreements and arrangements which govern their performance, and the other relationships between the parties, considered in the light of the statutory provision and the legislative intent. (cf  Wirtz  v.  Wornom's Pharmacy  (E.D. Va.), 18 WH Cases 289, 365; 57 Labor Cases 32,006, 32,030.)"], ["29:29:3.1.1.2.40.3.261.20", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.219 Unified operation may be achieved without common control or common ownership.", "DOL-WHD", "", "", "", "The performance of related activities through \u201cunified operation\u201d to serve a common business purpose may be achieved without common control and without common ownership. In particular cases ownership or control of the related activities may be factors to be considered, along with all facts and circumstances, in determining whether the activities are performed through \u201cunified operation.\u201d It is clear from the definition that if the described activities are performed through unified operation they will be part of the enterprise whether they are performed by one company or by more than one corporate or other organizational unit. The term \u201cunified operation\u201d has reference particularly to enterprises composed of a number of separate companies as is clear in the quotation from the Senate Report in \u00a7 779.215. Where the related activities are performed by a single company, or under other single ownership, they will ordinarily be performed through \u201ccommon control,\u201d and the question of whether they are also performed through unified operation will not need to be decided. ( Wirtz  v.  Barnes Grocer Co.,  398 F. 2d 718 (C.A. 8).)"], ["29:29:3.1.1.2.40.3.261.21", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.220 Unified operation may exist as to separately owned or controlled activities which are related.", "DOL-WHD", "", "", "", "Whether there is unified operation of related activities will thus be of concern primarily in those cases where the related activities are separately owned or controlled but where, through arrangement, agreement or otherwise, they are so performed as to constitute a unified business system organized for a common business purpose. For example, a group of separately incorporated, separately owned companies, may agree to conduct their activities in such manner as to be for all intents and purposes a single business system except for the fact that the ownership and control of the individual segments of the business are retained, in part or in whole, by the individual companies comprising the unified business system. The various units may operate under a single trade name; construct their establishment to appear identical; use identical equipment; sell generally the same goods or provide the same type of services, and, in some cases, at uniform standardized prices; and in other respects appear to the persons utilizing their services or purchasing their goods as being the same business. They also may arrange for group purchasing and warehousing; for advertising as a single business; and for standardization of their records, as well as their credit, employment, and other business policies and practices. In such circumstances the activities may well be performed through \u201cunified operation\u201d sufficient to consider all of the related activities performed by the group of units as constituting one enterprise, despite the separate ownership of the various segments and despite the fact that the individual units or segments may retain control as to some or all of their own activities. That this is in accord with the congressional intent is plain, since where the Congress intended that such arrangements shall not bring a group of certain individual retail or service establishments into a single enterprise, provision to accomplish such exception was specifically included. (See \u00a7 779.226, discussing the proviso in section 3(r) with respect to certain franchise and other specified arrangements entered into between independently owned retail or service establishments and other businesses.)"], ["29:29:3.1.1.2.40.3.261.22", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.221 \u201cCommon control\u201d defined.", "DOL-WHD", "", "", "", "Under the definition the \u201centerprise\u201d includes all related activities performed through \u201ccommon control\u201d for a common business purpose. The word \u201ccontrol\u201d may be defined as the act of fact of controlling; power or authority to control; directing or restraining domination. \u201cControl\u201d thus includes the power or authority to control. In relation to the performance of the described activities, the \u201ccontrol,\u201d referred to in the definition in section 3(r) includes the power to direct, restrict, regulate, govern, or administer the performance of the activities. \u201cCommon\u201d control includes the sharing of control and it is not limited to sole control or complete control by one person or corporation. \u201cCommon\u201d control therefore exists where the performance of the described activities are controlled by one person or by a number of persons, corporations, or other organizational units acting together. This is clearly supported by the definition which specifically includes in the \u201centerprise\u201d all such activities whether performed by \u201cone or more corporate or other organizational units.\u201d The meaning of \u201ccommon control\u201d is discussed comprehensively in part 776 of this chapter."], ["29:29:3.1.1.2.40.3.261.23", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.222 Ownership as factor.", "DOL-WHD", "", "", "", "As pointed out in \u00a7 779.215 \u201cunified operation\u201d and \u201ccommon control\u201d do not refer to the ownership of the described activities but only to their performance. It is clear, however, that ownership may be an important factor in determining whether the activities are performed through \u201cunified operation or common control.\u201d Thus common control may exist where there is common ownership. Where the right to control, one of the prerogatives of ownership, exists, there may be sufficient \u201ccontrol\u201d to meet the requirements of the statute. Ownership, or sufficient ownership to exercise control, will be regarded as sufficient to meet the requirement of \u201ccommon control.\u201d Where there is such ownership, it is immaterial that some segments of the related activities may operate on a semiautonomous basis, superficially free of actual control, so long as the power to exercise control exists through such ownership. (See  Wirtz  v.  Barnes Grocer Co.,  398 F. 2d 718 (C.A. 8).) For example, a parent corporation may operate a chain of retail or service establishments which, for business reasons, may be divided into several geographic units. These units may have certain autonomy as to purchasing, marketing, labor relations, and other matters. They may be separately incorporated, and each unit may maintain its own records, including records of its profits or losses. All the units together, in such a case, will constitute a single enterprise with the parent corporation. They would constitute a single business organization under the \u201ccommon control\u201d of the parent corporation so long as they are related activities performed for a common business purpose. The common ownership in such cases provides the power to exercise the \u201ccontrol\u201d referred to in the definition. It is clear from the Act and the legislative history that the Congress did not intend that such a chain organization should escape the effects of the law with respect to any segment of its business merely by separately incorporating or otherwise dividing the related activities performed for a common business purpose."], ["29:29:3.1.1.2.40.3.261.24", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.223 Control where ownership vested in individual or single organization.", "DOL-WHD", "", "", "", "Ownership, sufficient to exercise \u201ccontrol,\u201d of course, exists where total ownership is vested in a single person, family unit, partnership, corporation, or other single business organization. Ownership sufficient to exercise \u201ccontrol\u201d exist also where there is more than 50 percent ownership of voting stock. (See  West  v.  Wal-Mart,  264 F. Supp. 168 (W.D. Ark.).) But \u201ccontrol\u201d may exist with much more limited ownership, and, in certain cases exists in the absence of any ownership. The mere ownership of stock in a corporation does not by itself establish the existence of the \u201ccontrol\u201d referred to in the definition. The question whether the ownership in a particular case includes the right to exercise the requisite \u201ccontrol\u201d will necessarily depend upon all the facts in the light of the statutory provisions."], ["29:29:3.1.1.2.40.3.261.25", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.224 Common control in other cases.", "DOL-WHD", "", "", "", "(a) As stated in \u00a7 779.215 \u201ccommon control\u201d may exist with or without ownership. The actual control of the performance of the related activities is sufficient to establish the \u201ccontrol\u201d referred to in the definition. In some cases an owner may actually relinquish his control to another, or by agreement or other arrangement, he may so restrict his right to exercise control as to abandon the control or to share the control of his business activities with other persons or corporations. In such a case, the activities may be performed under \u201ccommon control.\u201d In other cases, the power to control may be reserved through agreement or arrangement between the parties so as to vest the control of the activities of one business in the hands of another.\n\n(b) Activities are considered to be performed under \u201ccommon control\u201d even if, because of the particular methods of operation, the power to control is only seldom used, as where the business has been in operation for a long time without change in methods of operation and practically no actual direction is necessary; also common control may exist where the control, although rarely visibly exercised, is evidenced by the fact that mere suggestions are adopted readily by the business being controlled.\n\n(c) In the retail industry, particularly, there are many instances where, for business reasons, related activities performed by separate companies are so unified or controlled as to constitute a single enterprise. A common example, specifically named in the definition, is the leased department. This and other examples are discussed in \u00a7\u00a7 779.225 through 779.235."], ["29:29:3.1.1.2.40.3.262.26", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.225 Leased departments.", "DOL-WHD", "", "", "", "(a) As stated in section 3(r) of the enterprise includes \u201cdepartments of an establishment operated through leasing arrangements.\u201d This statutory provision is based on the fact that ordinarily the activities of such leased departments are related to the activities of the establishment in which they are located, and they are performed for a common business purpose either through \u201cunified operation\u201d or \u201ccommon control.\u201d A general discussion will be found in part 776 of this chapter.\n\n(b) In the ordinary case, a retail or service establishment may control many of the operations of a leased department therein and unify its operation with its own. Thus, they may operate under a common trade name: The host establishment may determine, or have the power to determine, the leased department's space location, the type of merchandise it will sell, its pricing policy, its hours of operation and some or all of its hiring, firing and other personnel policies; advertising, adjustment and credit operations, may be unified, and insurance, taxes, and other matters may be included as a part of the total operations of the establishment. Some or all of these and other functions, which are the normal prerogatives of an independent businessman, may be controlled or unified with the store's other activities in such a way as to constitute a single enterprise under the Act.\n\n(c) Since the definition specifically includes in the \u201centerprise,\u201d for the purpose of this Act, \u201cdepartments of an establishment operated through leasing arrangements,\u201d any such department will be considered a part of the host establishment's enterprise in the absence of special facts and circumstances warranting a different conclusion.\n\n(d) Whether, in a particular case, the relationship is such as to constitute the lessee's operation to be a separate establishment of a different enterprise rather than a \u201cleased department\u201d of the host establishment as described in the definition, will depend upon all the facts including the agreements and arrangements between the parties as well as the manner in which the operations are conducted. If, for example, the facts show that the lessee occupies a physically separate space with (or even without) a separate entrance, and operates under a separate name, with his own separate employees and records, and in other respects conducts his business independently of the lessor's, the lessee may be operating a separate establishment or place of business of his own and the relationship of the parties may be only that of landlord and tenant. In such a case, the lessee's operation will not be regarded as a \u201cleased department\u201d and will not be included in the same enterprise with the lessor.\n\n(e) The employees of a leased department would not be covered on an enterprise basis if such leased department is located in an establishment which is not itself a covered enterprise or part of a covered enterprise. Likewise, the applicability of exemptions for certain retail or service establishments from the Act's minimum wage or overtime pay provisions, or both, to employees of a leased department would depend upon the character of the establishment in which the leased department is located. Other sections of this subpart discuss the coverage of leased retail and service departments in more detail while subpart D of this part explains how exemptions for certain retail and service establishments apply to leased department employees."], ["29:29:3.1.1.2.40.3.262.27", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.226 Exception for an independently owned retail or service establishment under certain franchise and other arrangements.", "DOL-WHD", "", "", "", "While certain franchise and other arrangements may operate to bring the one to whom the franchise is granted into another enterprise (see \u00a7 779.232), section 3(r) contains a specific exception for certain arrangements entered into by a retail or service establishment which is under independent ownership. The specific exception in section 3(r) reads as follows:\n\nProvided,  That, within the meaning of this subsection, a retail or service establishment 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 reason of any arrangement, which includes, but is not necessarily limited to, an agreement, (1) that it will sell, or sell only, certain goods specified by a particular manufacturer, distributor, or advertiser, (2) that it will join with other such establishments in the same industry for the purpose of collective purchasing, or (3) that it will have the exclusive right to sell the goods or use the brand name of a manufacturer, distributor, or advertiser within a specified 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.\n\nProvided,  That, within the meaning of this subsection, a retail or service establishment 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 reason of any arrangement, which includes, but is not necessarily limited to, an agreement, (1) that it will sell, or sell only, certain goods specified by a particular manufacturer, distributor, or advertiser, (2) that it will join with other such establishments in the same industry for the purpose of collective purchasing, or (3) that it will have the exclusive right to sell the goods or use the brand name of a manufacturer, distributor, or advertiser within a specified 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."], ["29:29:3.1.1.2.40.3.262.28", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.227 Conditions which must be met for exception.", "DOL-WHD", "", "", "", "This exception, in accordance with its specific terms, will apply to exclude an establishment from enterprise coverage only if the following conditions are met:\n\n(a) The establishment must be a \u201cretail or service establishment\u201d as this term is defined in section 13(a)(2) of the Act (see discussion of this term in \u00a7\u00a7 779.312 and 779.313); and\n\n(b) The retail or service establishment must not be an \u201centerprise\u201d which is large enough to come within the scope of section 3(s) of the Act; and\n\n(c) The retail or service establishment must be under independent ownership."], ["29:29:3.1.1.2.40.3.262.29", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.228 Types of arrangements contemplated by exception.", "DOL-WHD", "", "", "", "If the retail or service establishment meets the requirements in paragraphs (a) through (c) of \u00a7 779.227, it may enter into the following arrangements without becoming a part of the larger enterprise, that is, without losing its status as a \u201cseparate and distinct enterprise\u201d to which section 3(s) would not otherwise apply:\n\n(a) Any arrangement, whether by agreement, franchise or otherwise, that it will sell, or sell only certain goods specified by a particular manufacturer, distributor, or advertiser.\n\n(b) Any such arrangement that it will have the exclusive right to sell the goods or use the brand name of a manufacturer, distributor, or advertiser within a specified area.\n\n(c) Any such arrangement by which it will join with other similar retail or service establishments in the same industry for the purpose of collective purchasing. Where an agreement for \u201ccollective purchasing\u201d is involved, further requirements are imposed, namely, that all of the other establishments joining in the agreement must be retail or service establishments under independent ownership, and that all of the establishments joining in the collective purchasing arrangement must be \u201cin the same industry.\u201d This has reference to such arrangements by a group of grocery stores, or by some other trade group in the retail industry.\n\n(d) Any arrangement whereby the establishment's premises are leased from a person who also leases premises to other retail or service establishments. In connection with this rental arrangement, the Senate Report cites as an example the retail establishment which rents its premises from a shopping center operator (S. Rept. 145, 87th Cong., 1st Sess., p. 41). It is clear that this exception was not intended to apply to the usual leased department in an establishment, which is specifically included within the larger enterprise under the definition of section 3(r). (See discussion under \u00a7 779.225.)"], ["29:29:3.1.1.2.40.3.262.30", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.229 Other arrangements.", "DOL-WHD", "", "", "", "With respect to those arrangements specifically described in the proviso contained in the definition, an independently owned retail or service establishment will not be considered to be other than a separate and distinct enterprise, if other arrangements the establishment makes do not have the effect of bringing the establishment within a larger enterprise. Whether or not other arrangements have such an effect will necessarily depend upon all the facts. The Senate Report makes the following observations with respect to this:\n\nThus the mere fact that a group of independently owned and operated stores join together to combine their purchasing activities or to run combined advertising will not for these reasons mean that their activities are performed through unified operation or common control and they will not for these reasons be considered a part of the same \u201centerprise.\u201d This is also the case in food retailing because of the great extent to which local independent food store operators have joined together in many phases of their business. While maintaining their stores as independently owned units, they have affiliated together not just for the purchasing of merchandise, but also for providing numerous other services such as (1) central warehousing; (2) advertising; (3) sales promotions; (4) managerial advice; (5) store engineering; (6) accounting systems; (7) site locations; and (8) hospitalization and life insurance protection. (S. Rept. 145, 87th Cong., 1st Sess., p. 42.)\n\nThus the mere fact that a group of independently owned and operated stores join together to combine their purchasing activities or to run combined advertising will not for these reasons mean that their activities are performed through unified operation or common control and they will not for these reasons be considered a part of the same \u201centerprise.\u201d This is also the case in food retailing because of the great extent to which local independent food store operators have joined together in many phases of their business. While maintaining their stores as independently owned units, they have affiliated together not just for the purchasing of merchandise, but also for providing numerous other services such as (1) central warehousing; (2) advertising; (3) sales promotions; (4) managerial advice; (5) store engineering; (6) accounting systems; (7) site locations; and (8) hospitalization and life insurance protection. (S. Rept. 145, 87th Cong., 1st Sess., p. 42.)\n\nThe report continues with the following observations:\n\nWhether such arrangements bring the establishment within the franchisor's, lessor's, or grantor's \u201centerprise\u201d is a question to be determined on all the facts. The facts may show that the arrangements reserve the necessary right of control in the grantor or unify the operations among the separate \u201cfranchised\u201d establishments so as to create an economic unity of related activities for a common business purpose. In that case, the \u201cfranchised\u201d establishment will be considered a part of the same \u201centerprise.\u201d For example, whether a franchise, lease, or other contractual arrangement between a distributor and a retail dealer has the effect of bringing the dealer's establishments within the enterprise of the distributor will depend upon the terms of the agreements and the related facts concerning the relationship between the parties.\n \n There may be a number of different types of arrangements established in such cases. The key in each case may be found in the answer to the question, \u201cWho receives the profits, suffers the losses, sets the wages and working conditions of employees, or otherwise manages the business in those respects which are the common attributes of an independent businessman operating a business for profit?\u201d\n \n For instance, a bona fide independent automobile dealer will not be considered a part of the enterprise of the automobile manufacturer or of the distributor. Likewise, the same result will also obtain with respect to the independent components of a shopping center.\n \n In all of these cases if it is found on the basis of all the facts and circumstances that the arrangements are so restrictive as to products, prices, profits, or management as to deny the \u201cfranchised\u201d establishment the essential prerogatives of the ordinary independent businessman, the establishment, the dealer, or concessionaire will be considered an integral part of the related activities of the enterprise which grants the franchise, right, or concession. (S. Rept. 145, 87th Cong., 1st Sess., p. 42.)\n\nWhether such arrangements bring the establishment within the franchisor's, lessor's, or grantor's \u201centerprise\u201d is a question to be determined on all the facts. The facts may show that the arrangements reserve the necessary right of control in the grantor or unify the operations among the separate \u201cfranchised\u201d establishments so as to create an economic unity of related activities for a common business purpose. In that case, the \u201cfranchised\u201d establishment will be considered a part of the same \u201centerprise.\u201d For example, whether a franchise, lease, or other contractual arrangement between a distributor and a retail dealer has the effect of bringing the dealer's establishments within the enterprise of the distributor will depend upon the terms of the agreements and the related facts concerning the relationship between the parties.\n\nThere may be a number of different types of arrangements established in such cases. The key in each case may be found in the answer to the question, \u201cWho receives the profits, suffers the losses, sets the wages and working conditions of employees, or otherwise manages the business in those respects which are the common attributes of an independent businessman operating a business for profit?\u201d\n\nFor instance, a bona fide independent automobile dealer will not be considered a part of the enterprise of the automobile manufacturer or of the distributor. Likewise, the same result will also obtain with respect to the independent components of a shopping center.\n\nIn all of these cases if it is found on the basis of all the facts and circumstances that the arrangements are so restrictive as to products, prices, profits, or management as to deny the \u201cfranchised\u201d establishment the essential prerogatives of the ordinary independent businessman, the establishment, the dealer, or concessionaire will be considered an integral part of the related activities of the enterprise which grants the franchise, right, or concession. (S. Rept. 145, 87th Cong., 1st Sess., p. 42.)\n\nThus, there may be a number of different types of arrangements established in such cases, and the determination as to whether the arrangements create a larger \u201centerprise\u201d will necessarily depend on all the facts. Some arrangements which do not create a larger enterprise and some which do are discussed in \u00a7\u00a7 779.230 through 779.235."], ["29:29:3.1.1.2.40.3.262.31", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.230 Franchise and other arrangements.", "DOL-WHD", "", "", "", "(a) There are many different and complex arrangements by which businesses may join to perform their activities for a common purpose. A general discussion will be found in part 776 of this chapter. The quotation in \u00a7 779.229 from the Senate Report shows that Congress recognized that some franchise, lease, or other arrangements have the effect of creating a larger enterprise and whether they do or not depends on the facts. The facts may show that the arrangements are so restrictive as to deprive the individual establishment of those prerogatives which are the essential attributes of an independent business. (Compare  Wirtz  v.  Lunsford,  404 F. 2d, 693 (C.A. 6).) An establishment through such arrangements may transfer sufficient \u201ccontrol\u201d so that it becomes in effect a unit in a unified chain operation. In such cases the result of the arrangement will be to create a larger enterprise composed of the various segments, including the establishment which relinquishes its control.\n\n(b) The term \u201cfranchise\u201d is not susceptible of precise definition. The extent to which a businessman relinquishes the control of his business or the extent to which a franchise results in the performance of the activities through unified operation or common control depends upon the terms of the contract and the other relationships between the parties. Ultimately the determination of the precise scope of such arrangements which result in creating larger enterprises rests with the courts."], ["29:29:3.1.1.2.40.3.262.32", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.231 Franchise arrangements which do not create a larger enterprise.", "DOL-WHD", "", "", "", "(a) While it is clear that in every franchise a businessman surrenders some rights, it equally is clear that every franchise does not create a larger enterprise. In the ordinary case a franchise may involve no more than an agreement to sell the particular product of the one granting the franchise. It may also prohibit the sale of a competing product. Such arrangements, standing alone, do not deprive the individual businessman of his \u201ccontrol\u201d so as to bring him into a larger enterprise with the one granting the franchise.\n\n(b) The portion of the Senate Report quoted in the \u00a7 779.229 cites a \u201cbona fide independent automobile dealer\u201d as an example of such a franchise arrangement. (It is recognized that salesmen, mechanics, and partsmen primarily engaged in selling or servicing automobiles, trucks, trailers, farm implements, or aircraft, employed by nonmanufacturing establishments primarily engaged in the business of selling such vehicles to ultimate purchasers are specifically exempt from the overtime pay provisions under section 13(b)(10) of the Act. Section 779.372 discusses the exemption provided by section 13(b)(10) and its application whether or not the establishment meets the Act's definition of a retail or service establishment. The automobile dealer is used here only as an example of the type of franchise arrangement which, within the intent of the Congress, does not result in creating a larger enterprise.) The methods of operation of the independent automobile dealer are widely known. While he operates under a franchise to sell a particular make of automobile and also may be required to stock certain parts and to maintain specified service facilities, it is clear that he retains the control of the management of his business in those respects which characterize an independent businessman. He determines the prices for which he sells his merchandise. Even if prices are suggested by the manufacturer, it is well known that the dealer exercises wide discretion in this respect, free of control by the manufacturer or distributor. Also the automobile dealer retains control with respect to the management of his business, the determination of his employment practices, the operation of his various departments, and his business policies. The type of business in which he is engaged leaves him wide latitude for the exercise of his judgment and for decisions with respect to important aspects of his business upon which its success or failure depends. On the basis of these considerations, it is evident why the independent automobile dealer was cited as an example of the type of franchise which does not create a larger enterprise encompassing the dealer, the manufacturer or the distributor. Similar facts will lead to the same conclusion in other such arrangements."], ["29:29:3.1.1.2.40.3.262.33", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.232 Franchise or other arrangements which create a larger enterprise.", "DOL-WHD", "", "", "", "(a) In other instances, franchise arrangements do result in bringing a dealer's business into a larger enterprise with the one granting the franchise. Where the franchise arrangement results in vesting control over the operations of the dealer's business in the one granting the franchise, the result is to place the dealer in a larger enterprise with the one granting the franchise. Where there are multiple units to which such franchises have been granted, the several dealers are considered to be subject to the common control of the one granting the franchise and all would be included in the same larger enterprise.\n\n(b) It is not possible to lay down specific rules to determine whether a franchise or other agreement is such that a single enterprise results because all the facts and circumstances must be examined in the light of the definition of the term \u201centerprise\u201d as discussed above in this subpart. However, the following example illustrates a franchising company and independently owned retail establishments which would constitute a single enterprise:\n\n(1) The franchisor had developed a system of retail food store operations, built up a large volume of buying power, formulated rules and regulations for the successful operation of stores together constituting a system which for many years proved in practice to be of commercial value to the separate stores; and\n\n(2) The franchisor desired to extend its business through the operation of associated franchise stores, by responsible persons in various localities to act as limited agents, and to be parts of the system, to the end that the advantages of and the profits from the business could be enjoyed by those so associated as well as by the franchisor; and\n\n(3) The stores were operated under the franchise as part of the general system and connected with the home office of the franchisor from which general administrative jurisdiction was exercised over all franchised stores, wherever located; and\n\n(4) The stores operated under the franchise agreement were always subject to the general administrative jurisdiction of the franchisor and agreed to comply with it; and\n\n(5) The stores operated under the franchise agreed to install appliances, fixtures, signs, etc. according to plans and specifications provided by the franchisor and to purchase their merchandise through the franchisor except to the extent that the latter may authorize local purchase of certain items; and\n\n(6) The stores operated under the franchise agreed to participate in special promotions, sales and advertising as directed by the franchisor, to attend meetings of franchise store operators and to pay a fee to the franchisor at the rate of one-half of 1 percent of total gross sales each month for the privileges to them and the advantages and profits derived from operating a local unit of the franchisor's system; and\n\n(7) The franchisor under the franchise agreement had the right to place on a prohibited list any merchandise which it considered undesirable for sale in a franchise store, and the stores operated pursuant to the franchise agreed to immediately discontinue sale of any such blacklisted merchandise.\n\n(c) It is clear from the facts and circumstances surrounding this franchise arrangement described in paragraph (b) of this section that the operators of the franchised establishments are denied the essential prerogatives of the ordinary independent businessman because of restrictions as to products, prices, profits and management. The last paragraph of the Senate Report quoted in \u00a7 779.229 makes clear that in such cases the franchised establishment, dealer, or concessionaire will be considered an integral part of the related activities of the enterprise which grants the franchise, right, or concession."], ["29:29:3.1.1.2.40.3.262.34", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.233 Independent contractors performing work \u201cfor\u201d an enterprise.", "DOL-WHD", "", "", "", "(a) The definition in section 3(r) specifically provides that the \u201centerprise\u201d shall not include \u201cthe related activities performed for such enterprise by an independent contractor.\u201d This exclusion will apply where the related activities are performed \u201cfor\u201d the enterprise and if such activities are performed by \u201can independent contractor.\u201d This provision is discussed generally in part 776 of this chapter.\n\n(b) The Senate Report in referring to this exception states as follows:\n\nIt does not include the related activities performed for such an enterprise by an independent contractor, such as an independent accounting firm or sign service or advertising company, * * * (S. Rept. No. 145, 87th Cong., 1st Sess., p. 40).\n\nIt does not include the related activities performed for such an enterprise by an independent contractor, such as an independent accounting firm or sign service or advertising company, * * * (S. Rept. No. 145, 87th Cong., 1st Sess., p. 40).\n\nThe term \u201cindependent contractor\u201d as used in section 3(r) has reference to an independent business which performs services for other businesses as an established part of its own business activities. The term \u201cindependent contractor\u201d as used in 3(r) thus has reference to an independent business which is a separate \u201centerprise,\u201d and which deals in the ordinary course of its own business operations, at arms length, with the enterprises for which it performs services.\n\n(c) There are many instances in industry where one business performs activities for separate businesses without becoming a part of a larger enterprise. In addition to the examples cited in the Report they may include such services as repairs, window cleaning, transportation, warehousing, collection services, and many others. The essential test in each case will be whether such services are performed \u201cfor\u201d the enterprise by an independent, separate enterprise, or whether the related activities are performed for a common purpose through unified operation or common control. In the latter case the activities will be considered performed \u201cby\u201d the enterprise, rather than \u201cfor\u201d the enterprise, and will be a part of the enterprise. The distinction in the ordinary case will be readily apparent from the facts. In those cases where questions arise a determination must be made on the basis of all the facts in the light of the statute and the legislative history."], ["29:29:3.1.1.2.40.3.262.35", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.234 Establishments whose only regular employees are the owner or members of his immediate family.", "DOL-WHD", "", "", "", "Section 3(s) provides that any \u201cestablishment which has as its only regular employees the owner thereof or the parent, spouse, child, or other member of the immediate family of such owner\u201d shall not be considered to be an \u201centerprise\u201d as described in section 3(r) or a part of any other enterprise. Further the sales of such establishment are not included for the purpose of determining the annual gross volume of sales of any enterprise for the purpose of section 3(s). The term \u201cother member of the immediate family of such owner\u201d is considered to include relationships such as brother, sister, grandchildren, grandparents, and in-laws but not distant relatives from separate households. The 1966 amendments extended the exception to include family operated establishments which only employ persons other than members of the immediate family infrequently, irregularly, and sporadically. (See general discussion in part 776 of this chapter.)"], ["29:29:3.1.1.2.40.3.262.36", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.235 Other \u201centerprises.\u201d", "DOL-WHD", "", "", "", "No attempt has been made in the discussion of the term \u201centerprise,\u201d to consider every possible situation which may, within the meaning of section 3(r), constitute an \u201centerprise\u201d under the Act. The discussion is designed to explain and illustrate the application of the term in some cases; in others, the discussion may serve as a guide in applying the criteria of the definition to the particular fact situation. A more complete discussion is contained in part 776 of this chapter."], ["29:29:3.1.1.2.40.3.263.37", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.236 In general.", "DOL-WHD", "", "", "", "Sections 779.201 through 779.235 discuss the various criteria for determining what business unit or units constitute an \u201centerprise\u201d within the meaning of the Act. Sections 779.237 through 779.245 discuss the criteria for determining what constitutes a \u201ccovered enterprise\u201d under the Act with respect to the conditions for coverage of those enterprises in which retail sale of goods or services are made. As explained in \u00a7\u00a7 779.2 through 779.4, previously covered employment in retail and service enterprises will be subject to different monetary standards than newly covered employment in such enterprises until February 1, 1971. For this reason the enterprise coverage provisions of both the prior and the amended Act are discussed in the following sections of this subpart."], ["29:29:3.1.1.2.40.3.263.38", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.237 Enterprise engaged in commerce or in the production of goods for commerce.", "DOL-WHD", "", "", "", "Under section 3(s) the \u201centerprise\u201d to be covered must be an \u201centerprise engaged in commerce or in the production of goods for commerce.\u201d This is defined in section 3(s) as follows:\n\nEnterprise engaged in commerce or in the production of goods for commerce means an enterprise which has employees engaged in commerce or in the production of goods for commerce, including employees handling, selling or otherwise working on goods that have been moved in or produced for commerce by any person * * *.\n\nEnterprise engaged in commerce or in the production of goods for commerce means an enterprise which has employees engaged in commerce or in the production of goods for commerce, including employees handling, selling or otherwise working on goods that have been moved in or produced for commerce by any person * * *.\n\nIn order for an enterprise to come within the coverage of the Act, it must, therefore, be established that the enterprise has some employees who are:\n\n(a) Engaged in commerce or in the production of goods for commerce, including\n\n(b) Employees handling, selling or otherwise working on goods that have been moved in or produced for commerce by any person.\n\nThe legislative history of the 1966 amendments does not indicate a difference between the meaning of the above wording and the wording used in the prior Act. (See \u00a7 779.22.) For a complete discussion of the employees who come within the quoted language see subpart B of the Interpretative Bulletin on general coverage, part 776 of this chapter."], ["29:29:3.1.1.2.40.3.263.39", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.238 Engagement in described activities determined on annual basis.", "DOL-WHD", "", "", "", "As set forth in the preceding section an enterprise to be a \u201ccovered enterprise\u201d must have at least some employees engaged in certain described activities. This requirement will be determined on an annual basis in order to give full effect to the intent of Congress. Thus, it is not necessary that the enterprise have two or more employees engaged in the named activities every week. An enterprise described in section 3(s)(1) or (5) of the prior Act or in section 3(s)(1) of the Act as it was amended in 1966 will be considered to have employees engaged in commerce or in the production of goods for commerce, including the handling, selling or otherwise working on goods that have been moved in or produced for commerce by any person, if during the annual period which it uses in calculating its annual sales for purposes of the other conditions of these sections, it regularly and recurrently has at least two or more employees engaged in such activities. On the other hand, it is plain that an enterprise that has employees engaged in such activities only in isolated or sporadic occasions, will not meet this condition."], ["29:29:3.1.1.2.40.3.263.40", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.239 Meaning of \u201cengaged in commerce or in the production of goods for commerce.\u201d", "DOL-WHD", "", "", "", "The term \u201cengaged in commerce or in the production of goods for commerce,\u201d as used in section 3(s) of the Act in reference to employees who are so engaged is the same as the term which has been used in the Act for many years. The statutory definitions of these terms are set forth in \u00a7\u00a7 779.12 through 779.16. The interpretative bulletin on general coverage part 776 of this chapter) contains the Division's interpretations as to which employees are \u201cengaged in commerce or in the production of goods for commerce.\u201d These interpretations are equally applicable under section 3(s) in determining which employees are \u201cengaged in commerce or in the production of goods for commerce\u201d within the meaning of this section. A brief discussion of the guiding principles of retail or service establishments are \u201cengaged in commerce or in the production of goods for commerce\u201d is set forth in subpart B of this part."], ["29:29:3.1.1.2.40.3.264.41", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.240 Employees \u201chandling * * * or otherwise working on goods.\u201d", "DOL-WHD", "", "", "", "(a)  \u201cGoods\u201d upon which the described activities are performed.  Employees will be considered to be handling, selling, or otherwise working on goods within the meaning of section 3(s) if they engage in the described activities on \u201cgoods\u201d which \u201chave been moved in or produced for commerce by any person.\u201d They may be handling or working on such goods which the enterprise does not sell. The term \u201cgoods\u201d is defined in section 3(i) of the Act. The definition is explained in \u00a7 779.107 and discussed comprehensively in part 776 of this chapter. As defined in section 3(i) of the Act, the term includes any part or ingredient of \u201cgoods\u201d and, in general, includes \u201carticles or subjects of commerce of any character.\u201d Thus the term \u201cgoods,\u201d as used in section 3(s), includes all goods which have been moved in or produced for commerce, such as stock-in-trade, or raw materials that have been moved in or produced for commerce.\n\n(b)  \u201cHandling * * * or otherwise working on goods.\u201d  The term \u201chandling * * * or otherwise working on goods\u201d used in section 3(s) is substantially the same as the term used since 1938 in section 3(j) of the Act. Both terms will therefore be considered to have essentially the same meaning. (See part 776 of this chapter, the interpretative bulletin on the general coverage of the Act.) Thus, the activities encompassed in the term \u201chandling or in any other manner working on goods\u201d in section 3(s) are the same as the activities, encompassed in the similar term in section 3(j), by which goods are \u201cproduced\u201d within the meaning of the Act. In general, the term \u201chandling * * * or otherwise working on goods\u201d includes employees who sort, screen, grade, store, pack, label, address, transport, deliver, print, type, or otherwise handle or work on the goods. The same will be true of employees who handle or work on \u201cany part of ingredient of the goods\u201d referred to in the discussion of the term \u201cgoods\u201d in \u00a7 779.107. An employee will be considered engaged in \u201chandling * * * or otherwise working on goods,\u201d within the meaning of section 3(s), only if he performs the described activities on goods that \u201chave been moved in or produced for commerce by any person.\u201d This requirement is discussed in \u00a7\u00a7 779.242 and 779.243."], ["29:29:3.1.1.2.40.3.264.42", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.241 Selling.", "DOL-WHD", "", "", "", "The statutory definition of the term \u201csale\u201d or \u201csell\u201d is quoted in \u00a7 779.15. As long as the employee in any way participates in the sale of the goods he will be considered to be \u201cselling\u201d the goods, whether he physically handles them or not. Thus, if the employee performs any work that, in a practical sense is an essential part of consummating the \u201csale\u201d of the particular goods, he will be considered to be \u201cselling\u201d the goods. \u201cSelling\u201d goods, under section 3(s) has reference only to goods which \u201chave been moved in or produced for commerce by any person,\u201d as discussed in \u00a7\u00a7 779.242 and 779.243."], ["29:29:3.1.1.2.40.3.264.43", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.242 Goods that \u201chave been moved in\u201d commerce.", "DOL-WHD", "", "", "", "For the purpose of section 3(s), goods will be considered to \u201chave been moved * * * in commerce\u201d when they have moved across State lines before they are handled, sold, or otherwise worked on by the employees. It is immaterial in such a case that the goods may have \u201ccome to rest\u201d within the meaning of the term \u201cin commerce\u201d as interpreted in other respects, before they are handled, sold, or otherwise worked on by the employees in the enterprise. Such movement in commerce may take place before they have reached the enterprise, or within the enterprise, such as from a warehouse of the enterprise in one State to a retail store of the same enterprise located in another State. Thus, employees will be considered to be \u201chandling, selling, or otherwise working on goods that have been moved in * * * commerce\u201d where they are engaged in the described activities on \u201cgoods\u201d that have moved across State lines at any time in the course of business, such as from the manufacturer to the distributor, or to the \u201centerprise,\u201d or from one establishment to another within the \u201centerprise.\u201d See the general discussion in part 776 of this chapter."], ["29:29:3.1.1.2.40.3.264.44", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.243 Goods that have been \u201cproduced for commerce by any person.\u201d", "DOL-WHD", "", "", "", "An employee will be considered to be handling, selling, or otherwise working on goods that have been \u201cproduced for commerce by any person\u201d within the meaning of section 3(s), if he is performing the described activities with respect to goods which have been \u201cproduced for commerce\u201d within the meaning of the Act. The term \u201cproduced\u201d is defined in section 3(j) of the Act and, as explained above, has a well-established meaning under the existing law. (See \u00a7 779.104 and part 776 of this chapter.) The word as it is used in the context of the phrase \u201cgoods * * * produced for commerce by any person\u201d in section 3(s) has the same meaning as in 3(j). Therefore, where goods are considered \u201cproduced for commerce\u201d within the meaning of section 3(j) of the Act they also will be considered \u201cproduced for commerce\u201d within the meaning of section 3(s). A discussion of when goods are produced for commerce within the meaning of section 3(j) is contained in \u00a7 779.108. Of course, within the meaning of section 3(s), the goods will be considered \u201cproduced for commerce\u201d when they are so produced \u201cby any person.\u201d"], ["29:29:3.1.1.2.40.3.265.45", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.244 \u201cCovered enterprises\u201d of interest to retailers of goods or services.", "DOL-WHD", "", "", "", "Retailers of goods or services are primarily concerned with the enterprises described in sections 3(s)(1) and 3(s)(5) of the prior Act and section 3(s)(1) of the Act as amended in 1966. Although section 3(s)(1) of the prior Act (under the 1961 amendments) had exclusive application to the retail and service industry, section 3(s)(1) of the Act as amended in 1966 may apply to any enterprise. This part is concerned only with retail or service establishments and enterprises. Enterprises described in clauses (2), (3), and (4) of section 3(s) are discussed herein only with respect to the application to them of provisions relating to retail or service establishments. Coverage of such enterprises and the application of section 3(s)(1) of the amended Act to enterprises generally are discussed in part 776 of this chapter. The statutory definitions of enterprises of interest to retailers under the prior Act and the Act as amended in 1966 are quoted in \u00a7 779.22."], ["29:29:3.1.1.2.40.3.265.46", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.245 Conditions for coverage of retail or service enterprises.", "DOL-WHD", "", "", "", "(a) Retail or service enterprises may be covered under section 3(s)(1) of the prior Act or section 3(s)(1) of the amended Act although the latter is not limited to retail or service enterprises. A retail or service enterprise will be a covered enterprise under section 3(s)(1) of the amended Act if both the following conditions are met:\n\n(1) The enterprise is \u201can enterprise engaged in commerce or in the production of goods for commerce.\u201d This requirement, which is discussed in \u00a7\u00a7 779.237 through 779.243, applies to all covered enterprises under the provisions of both the prior and the amended Act; and,\n\n(2) During the period February 1, 1967, through January 31, 1969, the enterprise has an annual gross volume of sales made or business done, exclusive of excise taxes at the retail level which are separately stated, of at least $500,000; or on and after February 1, 1969, the enterprise has an annual gross volume of sales made or business done of at least $250,000, exclusive of excise taxes at the retail level which are separately stated.\n\n(b) A retail or service enterprise will be covered under section 3(s)(1) of the Act prior to the amendments if all four of the following conditions are met:\n\n(1) The enterprise is \u201can enterprise engaged in commerce or in the production of goods for commerce\u201d as explained above in paragraph (a)(1) of this section and,\n\n(2) The enterprise has one or more \u201cretail or service establishments\u201d (the statutory definition of the term \u201cretail or service establishment\u201d is contained in \u00a7 779.24 and discussed in subpart D of this part) and,\n\n(3) The enterprise has an annual gross volume of sales of $1 million or more, exclusive of excise taxes at the retail level which are separately stated and,\n\n(4) The enterprise \u201cpurchases or receives goods for resale that move or have moved across State lines (not in deliveries from the reselling establishment) which amount in total annual volume to $250,000 or more.\u201d (This requirement is discussed in \u00a7\u00a7 779.246 through 779.253.)\n\n(c) Sections 779.258 through 779.260 discuss the meaning of \u201cannual gross volume of sales made or business done\u201d and \u00a7\u00a7 779.261 through 779.264 discuss what excise taxes may be excluded from the annual gross volume. Sections 779.265 through 779.269 discuss the method of computing the annual gross volume where it is necessary to determine monetary obligations to employees under the Act."], ["29:29:3.1.1.2.40.3.266.47", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.246 Inflow test under section 3(s)(1) of the Act prior to 1966 amendments.", "DOL-WHD", "", "", "", "To come within the scope of section 3(s)(1) of the prior Act, the enterprise, in addition to the other conditions, must purchase or receive goods for resale that move or have moved across State lines (not in deliveries from the reselling establishment) which amount in total annual volume to $250,000 or more. To meet this condition, it must be shown that (a) the enterprise purchases or receives goods for resale (\u00a7 779.248), (b) that such goods move or have moved across State lines (\u00a7 779.249), and (c) that such purchases and receipts amount in total annual volume to $250,000 or more (\u00a7 779.253). Enterprises which do not meet this test may be covered under section 3(s)(1) of the present Act, which contains no interstate inflow requirement."], ["29:29:3.1.1.2.40.3.266.48", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.247 \u201cGoods\u201d defined.", "DOL-WHD", "", "", "", "The term \u201cgoods\u201d as used in section 3(s) of the prior and amended Act is defined in section 3(i) of the Act. The statutory definition is quoted in \u00a7 779.14, and is discussed in detail in part 776 of this chapter."], ["29:29:3.1.1.2.40.3.266.49", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.248 Purchase or receive \u201cgoods for resale.\u201d", "DOL-WHD", "", "", "", "(a) Goods will be considered purchased or received \u201cfor resale\u201d for purposes of the inflow test contained in section 3(s)(1) of the prior Act if they are purchased or received with the intention of being resold. This includes goods, such as stock in trade which is purchased or received by the enterprise for resale in the ordinary course of business. It does not include machinery, equipment, supplies, and other goods which the enterprise purchases to use in conducting its business. This is true even if such capital goods or other equipment, which the enterprise originally purchased for use in conducting its business, are at some later date actually resold. The distinction is to be found in whether the goods are purchased or received by the enterprise with the intention of reselling them in the same form or after further processing or manufacturing, or whether they are purchased with the intent of being consumed or used by the enterprise itself in the performance of its activities.\n\n(b) Goods, such as raw materials or ingredients, are considered purchased or received by the enterprise \u201cfor resale,\u201d even if such goods are purchased or received for the purpose of being processed or used as parts or ingredients in the manufacture of other goods which the enterprise intends to sell. For example, where the enterprise purchases flour for use in baking bread or pastries for sale, the goods will be considered to have been purchased \u201cfor resale.\u201d It is immaterial whether the goods will be resold by the enterprise at retail or at wholesale."], ["29:29:3.1.1.2.40.3.266.50", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.249 Goods which move or have moved across State lines.", "DOL-WHD", "", "", "", "In order to be included in the annual dollar volume for purposes of this test, the goods which the enterprise purchases or receives for resale must be goods that \u201cmove or have moved across the State lines.\u201d Goods which have not moved across State lines before they are resold by the enterprise will not be included. The movement to which the phrase \u201cmove or have moved\u201d has reference is that movement which the goods follow in their journey to the enterprise or within the enterprise to the establishment which sells the goods. Thus, if goods have moved across State lines at some stage in the flow of trade before they are actually sold by the enterprise, they will be considered to have moved across State lines. It is not material that the goods may have \u201ccome to rest\u201d at some time before they are purchased or received and sold by the enterprise; nor is it material that some time may have elapsed between the time the goods have moved across State lines and the time they are purchased or received and sold by the enterprise. It is sufficient if at any time such goods have moved across State lines in the ordinary course of trade before resale by the enterprise. Much of the goods purchased by retailers are produced from a local intrastate supplier. In many instances these goods may have been stored at the supplier's establishment for some time. However, as long as the particular goods purchased have moved across State lines at some stage in the flow of trade to the retailer, they would have to be included in determining whether or not the enterprise has purchased or received for resale such out-of-State goods amounting to $250,000."], ["29:29:3.1.1.2.40.3.266.51", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.250 Goods that have not lost their out-of-State identity.", "DOL-WHD", "", "", "", "Goods which are purchased or received by the enterprise from within the State will be considered goods which \u201chave moved across State lines\u201d if they have previously been moved across State lines and have not lost their identity as out-of-State goods before they are purchased or received by the enterprise. Also goods which have been assembled within the State after they were moved across State lines but before they are purchased or received by the enterprise will still be regarded as goods which \u201chave moved across State lines.\u201d Such goods are still identifiable as goods brought into the State. This is also true in certain cases where goods are processed to some extent without losing their identity as out-of-State goods. For example, out-of-State furniture or television sets which are put together within the State, or milk from outside the State which is pasteurized and bottled within the State, before being purchased or received by the enterprise, are goods which \u201chave moved across State lines.\u201d They have already moved across State lines and they retain their out-of-State identity, despite the assembly or processing within the State."], ["29:29:3.1.1.2.40.3.266.52", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.251 Goods that have lost their out-of-State identity.", "DOL-WHD", "", "", "", "(a) Goods which are purchased or received by the enterprise within the State will not be considered goods which have \u201cmoved across State lines\u201d if the goods, although they came from outside the State, had been processed or manufactured so as to have lost their identity as out-of-State goods before they are purchased or received by the enterprise. This assumes, of course, that the goods so manufactured or processed do not move across State lines before they are sold by the enterprise. Thus where an enterprise buys bread baked within the State which does not move across State lines before it is resold by the enterprise, the bread is not \u201cgoods, which have moved across State lines\u201d even if the flour and other ingredients came from outside the State. The same conclusion will follow, under the same circumstances, where clothing is manufactured from out-of-State fabrics.\n\n(b) In those cases where goods are composed in part of goods which have, and in part of goods which have not, moved across State lines, the entire product will be considered as goods which have moved across State lines, if, as a practical matter, it substantially consists of goods which are identifiable as out-of-State goods. Whether goods have been so changed as to have lost their out-of-State identity is question which will depend upon all the facts in a particular case."], ["29:29:3.1.1.2.40.3.266.53", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.252 Not in deliveries from the reselling establishment.", "DOL-WHD", "", "", "", "Goods which move across State lines only in the course of deliveries from the reselling establishment of the enterprise are not included as goods which \u201cmove or have moved across State lines.\u201d Thus, goods delivered by the enterprise to its customers outside of the State are not, for that reason, considered goods which \u201cmove or have moved across State lines.\u201d The purpose of the provision excepting \u201cdeliveries from the reselling establishment\u201d is to limit the test to goods which flow into the enterprise and to exclude those goods which only cross State lines when they flow out of the enterprise as an incident of the sale of such goods by the enterprise. In other words, this is an inflow test and not an outflow test."], ["29:29:3.1.1.2.40.3.266.54", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.253 What is included in computing the total annual inflow volume.", "DOL-WHD", "", "", "", "The goods which the establishment purchases or receives for resale that move or have moved across State lines must \u201camount in total annual volume to $250,000 or more.\u201d It will be noted that taxes are not excluded in measuring this annual dollar volume. Thus, the total cost to the enterprise of such goods will be included in calculating the $250,000. This will include all taxes and other charges which the enterprise must pay for such goods. Generally, all charges will be included in the invoice of the goods. But whether included in the invoice or not, the total amount which the enterprise is required to pay for such goods, including charges for transportation, insurance, delivery, storage and any other will be included in computing the $250,000. The dollar volume of the goods purchased or received by the enterprise is the \u201cannual\u201d volume. The method of calculating the annual dollar volume is explained in \u00a7 779.266."], ["29:29:3.1.1.2.40.3.267.55", 29, "Labor", "V", "B", "779", "PART 779\u2014THE FAIR LABOR STANDARDS ACT AS APPLIED TO RETAILERS OF GOODS OR SERVICES", "C", "Subpart C\u2014Employment to Which the Act May Apply; Enterprise Coverage", "", "\u00a7 779.254 Summary of coverage and exemptions prior to and following the 1966 amendments.", "DOL-WHD", "", "", "", "The ordinary gasoline service establishment is a covered enterprise under the Act if it has an annual gross volume of sales made or business done of not less than $250,000 a year, exclusive of excise taxes at the retail level which are separately stated, and meets the other tests of section 3(s)(5) of the prior Act and section 3(s)(1) of the amended Act. Beginning February 1, 1969, enterprise coverage extends to any gasoline service establishment in an enterprise which has an annual gross volume in such amount, even if the establishment's annual gross volume is less. However, a gasoline service establishment with gross sales of less than $250,000, exclusive of excise taxes at the retail level which are separately stated, may qualify for the minimum wage and overtime pay exemption provided in section 13(a)(2) of the Act if it meets the requirements of that section. Section 779.313 summarizes the requirements. An overtime pay exemption, which was repealed by the 1966 amendments, existed until February 1, 1967, for employees of ordinary gasoline service establishments under the prior Act. Thus, nonexempt employees of a covered gasoline service establishment enterprise are subject to the minimum wage standards for previously covered employment and the overtime pay requirements for newly covered employment as listed below:\n\nThe particular considerations affecting coverage and exemptions are discussed in subsequent sections. 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