The FLSA requires that most employees in the United States be paid at
least the Federal minimum wage and overtime pay at time and one-half
the regular rate of pay after 40 hours in a workweek. In addition, the
law includes child labor and recordkeeping provisions. However, the Act
provides some specific exemptions from these requirements for employees
employed by certain establishments and in certain occupations. This fact
sheet provides general information concerning the application of the
Section 13(a)(3) exemption from minimum wage and overtime pay to seasonal
and recreational establishments under the FLSA.
Some State wage laws may not recognize or permit the application of
this exemption, and since an employer must comply with the most stringent
of the State or Federal provisions, it is strongly recommended that the
State laws be reviewed prior to applying this exemption.
General Provisions of Section 13(a)(3)
Section 13(a)(3) provides an exemption from the minimum wage and overtime
provisions of the FLSA for "any employee employed by an establishment
which is an amusement or recreational establishment, if (A) it does not
operate for more than seven months in any calendar year, or (B) during
the preceding calendar year, its average receipts for any six months
of such year were not more than 33-1/3 per centum of its average receipts
for the other six months of such year."
Tests for the Exemption
- An "amusement or recreational establishment" will
be exempt under Section 13(a)(3) of the Act if it meets either Test
(A) or Test (B) as explained in the following paragraphs.
- "Does not operate for more than seven months in any calendar
year." Whether an amusement or recreational establishment "operates" during
a particular month is a question of fact, and depends on whether it operates
as an amusement or recreational establishment. If an establishment engages
only in such activities as maintenance operations or ordering supplies
during the "off season" it is not considered to be operating
for purposes of the exemption.
- 33-1/3 % Test. Because the language of the statute refers to receipts
for any six months (not necessarily consecutive months), the monthly
average based on total receipts for the six individual months in which
the receipts were smallest should be tested against the monthly average
for six individual months when the receipts were largest to determine
whether this test is met. To illustrate: An amusement or recreational
establishment operated for nine months in the preceding calendar year.
The establishment was closed during December, January, and February.
The total receipts for May, June, July, August, September, and October
(the six months in which the receipts were largest) totaled $260,000,
a monthly average of $43,333; the total receipts for the other six
months totaled $75,000, a monthly average of $12,500. Because the average
receipts of the latter six months were not more than 33-1/3% of the
average receipts for the other six months of the year, the Section
13(a)(3) exemption would apply.
"Employed by" an Exempt Establishment
For purposes of applying Section 13(a)(3), the general principles set
forth in IB 779.307 - 779.311 apply. Thus an employee, to be exempt,
must be "employed by" the exempt establishment. If the concessionaire
and host establishment constitute a single establishment, as is usually
the case, the tests apply on the basis of all the operations of the establishment,
including those of the concessionaire. Central functions of an organization
operating more than one such establishment, as in the case of employees
of a central office, warehouse, garage, or commissary which serves a
chain of exempt "amusement or recreational" establishments
would not be within the exemption under Section 13(a)(3).
"Receipts" of a publicly operated amusement or recreational establishment.
Section 13(a)(3) contains certain percentage tests for "receipts" of
the establishment. As used here, receipts are fees from admissions. A
publicly operated amusement or recreational establishment whose operating
costs are met wholly or primarily from tax funds would fail to qualify
under Section 13(a)(3)(B).
Where to Obtain Additional Information
This article is for general information and is not to be considered
in the same light as official statements of position contained in the
regulations. For additional information, visit www.wagehour.dol.gov and/or
call the wage-hour toll-free information and helpline: 866-4USWAGE (866-487-9243).
Resource
U.S. Department of Labor, www.dol.gov.
Originally published in the 2007 Winter issue
of The CampLine.
|
