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June 16, 1933: President Franklin D.
Roosevelt signed the National Industrial Recovery Act (Pub.L. 73–67, 48
Stat. 195). The law contained language removing employees in "executive,
administrative, and supervisory positions" from the requirement that "no
individual directly employed on any such project shall be permitted to work
more than thirty hours in anyone week"
SEC. 206. All contracts let for construction projects and all loans and grants pursuant to this title shall contain such provisions as are necessary to insure (1) that no convict labor shall be employed on any such project; (2) that (except in executive, administrative, and supervisory positions), so far as practicable and feasible, no individual directly employed on any such project shall be permitted to work more than thirty hours in anyone week; [NOTE: Underlining added]
(See "National Industrial Recovery Act (1933)" on the National Archives Internet site. Accessed June 17, 2023 at https://www.archives.gov/milestone-documents/national-industrial-recovery-act.)
Regulations under the Walsh-Healey Act afforded
some grounds for anticipating that all employees might be deemed executive or
administrative workers whose chief function was to give, or to supervise the
carrying out of, general orders.
(See Frank E. Cooper, The Coverage of
the Fair Labor Standards Act and Other Problems in its Interpretation,
6
Law and Contemporary Problems 333-352 (Summer 1939) Downloaded January 7, 2023
from: https://scholarship.law.duke.edu/lcp/vol6/iss3/3)
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May 24, 1937: The
Fair Labor Standards Act of 1937, drafted by the Department of Labor, was
introduced in the Senate (S. 2475) by Hugo
Black (D-AL), and in the House of Representatives (H. R. 7200) by
William Connery Jr. (D-MA).
As introduced, the bill did not include an exemption for executive, administrative, and professional employees. Instead, in Section 2 - "Definitions" - it was specified that "(7) "Employee" includes any individual employed and any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unlawful discharge, and who has not obtained any other regular and substantially equivalent employment, but shall not include any person employed in an executive, administrative, supervisory, or professional capacity or as an agricultural laborer as such terms are defined and delimited by regulations of the Board." (NOTE: Underline added)
(See: page 4 of S. 2475 and H. R 7200).
June 14, 1938: The
House of Representatives approved the Fair Labor Standards Act of 1938 by a
vote of 291 to 89, [CR, Volume 83, Part 8,
page 9266], and the Senate approved the bill on a voice vote. [CR, Volume 83, Part 8,
page 9266]
The language of the exemption read: "Sec. 13. (a) The provisions of sections 6 and 7 shall not apply with respect to (1) any employee employed in a bona fide executive, administrative, professional, or local retailing capacity, or in the capacity of outside salesman (as such terms are defined and delimited by regulations of the Administrator);" (NOTE: Underline added)
July 31, 1937: The
Senate approved the Fair Labor Standards Act of 1937 by a vote of 56 to 28.
[CR 75, Volume 81,
Part 7, page 7957]
May 24, 1938: The
House of Representatives approved the Conference Report for the Fair Labor
Standards Act by a vote of 314 to 97 (17 did not vote). [CR75 Vol. 83 - Part
7, page 7449]
June 14, 1938: The
House of Representatives approved the Conference Committee Report by a vote of
291 to 89. [CR75 Vol.
83, Part 8, page 9266]
June 14, 1938: The
Senate approved the Conference Committee Report without a vote.
June 25, 1938:
President Roosevelt signed the Fair Labor Standards Act.
[For additional information see May 24, 1937 to June 25, 1938 - Evolution of the exemption during Congressional debate and passage of the FLSA]
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"Establishing a Standard
(1938) - The act was to become effective October 24, 1938, which allowed four
months in which to establish an administrative structure, prepare interpretive
materials, and be ready to enforce compliance with the new federal wage/hour
standards—of which the EAP exemption was only one small portion. As
Administrator, President Franklin Roosevelt selected Elmer F. Andrews,
Industrial Commissioner for the state of New York. By mid-August of 1938,
Andrews was on duty at the Department and had begun to assemble his staff."
(See CRS Report RL32088, page 2.)
Creating a Structure
and Process:
Beyond the statutory language (that bona fide executive,
administrative and professional employees were to be exempt), Congress provided
the new Administrator with little guidance. The concepts—bona fide
executive, administrative and professional—were not defined. No reference
was made, in the statute, to salaried as opposed to hourly paid workers; nor
was any distinction made between manual and non-manual work. While Andrews
could draw from the experience of the National Recovery Administration
(1933-1935) in which more highly paid workers appear to have been excluded from
wage and hour standards, he was under no obligation to do
so.4
(FOOTNOTE 4:
(See Federal Register, March 31, 2003,
pp.15560-15561;
Leon C. Marshall, Hours and Wages Provisions in NRA Codes (Washington:
The Brookings Institution, 1935), p. 16; and
Margaret H. Schoenfeld, “Analysis of the
Labor Provisions of the N.R.A. Codes,” Monthly Labor Review, March
1935, p. 583. Schoenfeld states: “In contrast with the code wage
provisions, which cover for the most pabrt only the unskilled classes of labor,
[NRA] restrictions upon working time affect all but a small group of
administrative employees and executives falling in the higher earnings brackets
....”
(See CRS Report RL32088, page 2.)
September 29, 1938
-
During a presentation before the Southern States Industrial Council in
Birmingham, Alabama, September 29, 1938, Andrews was asked if he had taken any
action with respect to Section 13(a)(1), to which he responded: “No. I
have had that in mind more than anything else, and we will have that for you
within the next week or two.” He discussed his experience with the issue
in New York state—pointing out how some employers had attempted to
circumvent the state law by too broadly defining their workforce as executive
or administrative or professional. “... [I]t is very difficult to say ...
where a worker leaves off and a professional or executive
begins.”6
(FOOTNOTE 6: DOL/WH/R-Series,
transcript of question and answer session, Birmingham, Alabama, September 29,
1938, pp. 3-4.
(See CRS Report RL32088, page 2.)
Fall 1938 -
During the fall of 1938, Andrews, with a draft in hand, “called a
conference of representatives of industry and labor to ascertain their
views” on the definition of the several terms.7
(FOOTNOTE 7: [U.S. Department of
Labor, Wage and Hour Division, Executive, Administrative, Professional ...
Outside Salesman” Redefined: Report and Recommendations of the Presiding
Officer at Hearings Preliminary to Redefinition (Washington: U.S. Govt.
Print. Off., 1940), p. 1. (Hereafter cited as The Stein
Report.))
October 19, 1938 -
On October 19, 1938, five days before the act was to go into effect, the
Department announced that the Administrator, “in consultation with the
legal branch of the division,” had reached a
determination.8
(FOOTNOTE 8: [U.S. Department of Labor,Wage and Hour Division, Executive, Administrative, Professional ... OutsideSalesman” Redefined: Report and Recommendations of the Presiding Officerat Hearings Preliminary to Redefinition (Washington: U.S. Govt. Print.Off., 1940), p. 1. (Hereafter cited as The Stein Report.))
(See CRS Report RL32088, page 3.)
October 19, 1938 -
The National Office issued a press release announcing that “Definitions of employees engaged in “a bona fide executive, administrative, professional or local retailing capacity, or in the capacity of outside salesman” were issued today by Administrator ElerM F. Andrews of the Wage and Hour Division of the Department of Labor.
October 20, 1938 -
The first version of Regulation 29 CFR 541 was issued [See Federal Register,
October 20, 1938, p. 2518 and Wage Hour Press
Release R-40]
"The terms
executive and administrative would have a single definition.
Among other elements, they were to have the “primary duty” of
“management of the establishment” and do “no substantial
amount of work of the same nature as that performed by nonexempt employees of
the employer.” The concept of professional was to be characterized
by work that was “predominantly intellectual and varied in character as
opposed to routine mental, manual, mechanical or physical work” and was
to involve “discretion and judgment both as to the manner and time of
performance, as opposed to work subject to active direction and
supervision.” The education of a professional was to be based upon
“a specially organized body of knowledge as distinguished from a
general academic education and from an apprenticeship” or other routine
training. He (or she) was not to do any “substantial amount of work of
the same nature as that performed by non-exempt employees of the
employer.”9"
(FOOTNOTE 9: Federal Register, October 20, 1938, p. 2518. Available online at https://www.govinfo.gov/content/pkg/FR-1938-10-20/pdf/FR-1938-10-20.pdf)
(See CRS Report RL32088, page 3.)
"The entire regulation, including introductory comments by Andrews, took up two columns in the Federal Register. But, much of the language, at least in skeletal form, would remain central to the EAP regulation and to the proposed rule of March 31, 2003. Whatever the understanding may have been, the concept of salaried was not specified—other than that an executive or administrator would need to earn “not less than $30” for a work week. No earnings threshold was set for a professional."
(See CRS Report RL32088, page 3.)
October 24, 1938: - The Fair Labor Standards
Act went into effect.
[For additional information see June 26, 1938 to October 20, 1938 - Drafting and issuing the first version of 29 CFR 541]
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November 18, 1938 -
In an address to the Associated Industries of New York during their annual
meeting in Syracuse, Rufus Poole, the Assistant General Counsel of the Wage and
Hour Division, stated that the Fair Labor Standards Act
...was not passed in
haste. Few bills are ever considered with as much deliberation. It was debated
for almost three full sessions. Nor did the legislators limit their debates to
the question of the relative benefits of the bill to labor and capital, but
they discussed literally scores of incidental questions such as its effect upon
protective tariffs, relative costs of production and marketing, and the
stabilization of migrating industries.
[See Press Release
R-97.]
December 9, 1938 - In
an address to the National Association of Manufacturers, Wage Hour
Administrator Elmer Andrews stated that
Few statutes enacted by Congress
have ever been given the consideration which this measure received. Every
related problem was discussed and debated by the members of Congress. Every
proposal, practically every provision was scrutinized in private and in public.
Exhaustive hearings were held at which leading industrialists, economists and
public officials contributed information and advice.
[See Press Release
R-126]
[For additional information see June 26, 1938 to October 20, 1938 - Drafting and issuing the first version of 29 CFR 541]
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March 18, 1940:
It would not be until the
spring of 1940 that pressure began to mount for the Administrator to take more
specific action with respect to the EAP exemption (though earlier regulations
had been promulgated). See U.S. Department of Labor, Wage and Hour Division, Press Releases,
March 18, 1940,. (The collected set, running to at least 11 bound volumes,
is hereafter cited as DOL/WH/R-Series.)
(See footnote 2 on page 5 of CRS Report RL32088, page 3.)
April 10, 1940: A press
release was issued announcing that revisions to the definition of a
"…bona fide executive, as applied to the wholesale distributing rades,
was to be taken up today in a pubic hearing before Harold Stein, Assistant
Director of the Hearings Branch, Wage and Hour Division…" [Click here for a
full-text searchable copy]
June 21, 1940: A press
release was issued providing notice that a public hearing would begin on
July 9, 1940, to receive testimony regarding revisions to the definition of
"…regulations defining and delimiting the terms "executive,
administrative, professional, …(and) …outside salesman," [Click here for a
full-text searchable copy]
October 10, 1940: The Stein Report was
approved.
"1940 Rule: The Secretary
of Labor updated the salary level for the EAP exemptions for the first time in
1940 (following the initial tests established at the time the FLSA became
effective in 1938). The Secretary maintained the salary level for executive
employees ($30 per week), increased it for administrative employees (from $30
to $50 per week), and added a salary level for a new category, professional
employees ($50 per week).55 (FOOTNOTE 55: 5 U.S. Department of
Labor, Wage and Hour Division, “Defining and Delimiting the Terms
‘Any Employee Employed in a Bona Fide Executive, Administrative,
Professional, or Local Retailing Capacity, or in the Capacity of Outside
Salesman’,” 5
Federal Register 4077-4078, October 15, 1940. In addition, DOL analysis
supporting the Final Rule is in Stein.) [The Stein Report,
page 21]
[For additional information see October 24, 1938 to 1940]
October 14, 1940: A
press
release was issued announcing that a new version of 29 CFR 541 was would
become effective on October 24, 1940. [Click here for
a full-text searchable copy]
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"During the years since 1940 the Divisions gradually became aware of a number of problems which indicated that there might be need for some revision to the regulations. These problems were brought to the attention of the Divisions in part by questions coming into the National Office directly from employers and employees. In the main, however, suggestions for changes in the regulations and requests for explanatory material came from the Divisions' field staff as a result of their accumulated experience acquired in the course of applying the regulations in many thousands of establishments. On the basis of recommendations by the regional directors the Administrator ordered an investigation of the operation of the present regulations to determine whether and to what extent changes and clarifications were needed. There was considerable preliminary study including consultation with the field staff and with an informal labor-management advisory committee. As a result of this study a number of specific proposals for amending the regulations were formulated and, together with some general questions, served as the subjects of the hearing held before me pursuant to notice published in the Federal Register, October 22, 1941." (FOOTNOTE 3: 12 Federal Register 6896.)
March 31, 2003:
Proposed update of the Section 13(a)(1) regulation published in the Federal Register.
April 23, 2004: DOL
issued the rule in final form (Federal Register) to
take effect the last week of August 2004.
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"Analysis of the Labor Provisions of N. R. A.
Codes", by Margaret H. Schoenfeld. Monthly Labor Review, Vol. 40, No. 3 (March
1935), pp. 574-603.
Executive, Administrative, Professional . . .
Outside Salesman" Redefined. Effective October 24, 1940. Report and
Recommendations of the Presiding Officer at Hearings Preliminary to
Redefintion (The
Stein Report - 1940). Wage and Hour Division. U. S. Department of Labor.
Hours and wages provisions in NRA codes; a
compilation organized by Leon C. Marshall. Washington, D.C., The Brookings
Institution, 1935.
Overtime Exemptions in the Fair Labor Standards
Act for White-Collar Employees: Frequently Asked Questions. (CRS Report R45722)
Congressional Research Service. Updated October 11, 2019. (This report is
available through the Congressional Research Service site at: "Search
CRSReports" at https://crsreports.congress.gov/)
Overtime Exemptions in the Fair Labor Standards
Act for White-Collar Employees: Frequently Asked Questions.Updated October
31, 2017. (R45007)
(This report is available through the Congressional Research Service site at:
"Search CRSReports" at https://crsreports.congress.gov/)
Report and Recommendations on Proposed Revision
of Regulations, Part 541 under the Fair Labor Standards Act Defining the Terms
"Executive" "Administrative" "Professional" "Local Retailing Capacity" "Outside
Salesman" (The
Kantor Report - 1958). Wage and Hour and Public Contracts Divisions, U. S.
Department of Labor. March 1958.
Report and Recommendations on Proposed Revision
of Regulations, Part 541. Defining the Terms "Executive" "Administrative"
"Professional" "Local Retailing Capacity" "Outside Salesman"
••••• as contained in Section 13 (a) (1) of the Fair
Labor Standards Act of 1938, providing exemptions from the wage and hour
provisions of the act. (The Weiss Report - 1949)
Wage and Hour and Public Contracts Divisions, U. S. Department of Labor.
The Fair Labor Standards Act: A Historical Sketch
of the Overtime Pay Requirements of Section 13(a)(1). By William G.
Whittaker, Specialist in Labor Economics. Domestic Social Policy Division,
Congressional Research Service. [CRS Report
RL32088, page 2.] August 28, 2007. This report is available through the
Congressional Research Service site at: "Search CRS Reports" at
https://crsreports.congress.gov/.
The Fair Labor Standards Act: Exemption of
“Executive, Administrative and Professional” Employees Under
Section 13(a)(1). (RL31995) Congressional
Research Service, July 17, 2003. (This report is available through the
Congressional Research Service site at: "Search CRSReports" at
https://crsreports.congress.gov/)
United States, Wage and Hour Division, U. S.
Department of Labor. 29 CFR Part 541 RIN 1235–AA20, Defining and
Delimiting the Exemptions for Executive, Administrative, Professional, Outside
Sales and Computer Employees. 84 Fed. Reg. 10900 (March 22, 2019).