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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;
He was free to structure the exemption as he
chose; but, given the numerous other tasks before him, he may not have been
under any immediate pressure to deal with the EAP exemption.5
(FOOTNOTE 5: 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 CRS Report RL32088, page 2.)
"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; See also: Leon C. Marshall, Hours and Wages Provisions in NRA Codes (Washington: The Brookings Institution, 1935), p. 16); [SEE: The Fair Labor Standards Act: A Historical Sketch of the Overtime Pay Requirements of Section 13(a)(1). August 28, 2007. Congressional Research Service, RL32088. Page 2. Available online at https://www.everycrsreport.com/reports/RL32088.html]
An analysis of the Labor Provisions of NRA Codes, published in March, 1935, reported that "In contrast with the code wage provisions, which cover for the most part only the unskilled classes of labor, restrictions upon working time affect all but a small group of administrative employees and executives falling in the higher earnings brackets and certain service employees whose working time it was found difficult to control." [SEE: Analysis of the Labor Provisions of N. R. A. Codes, By Margaret H. Schoenfeld, Bureau of Labor Statistics. Page 583.]
"Section 13(a)(1) was included in the original FLSA of 1938, and was based on provisions contained in the earlier National Industrial Recovery Act and state law precedents. Specific references in the legislative history to the employee exemptions contained in section 13(a)(1) are scant. However, the exemptions were premised on the belief that the workers exempted typically earned salaries well above the minimum wage, and they were presumed to enjoy other compensatory privileges such as above average fringe benefits, greater job security and better opportunities for advancement, setting them apart from the nonexempt workers entitled to overtime pay.2 (FOOTNOTE 2: Report of the Minimum Wage Study Commission, Volume IV, pp. 236 and 240 (June 1981)." [SEE: Federal Register March 31, 2003, pages 15560-15561]
"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.) [SEE: CRS Report RL32088, page 3.]
September 29, 1938:
During a presentation to the Southern States Industrial Council in Birmingham,
Alabama, Wage Hour Administrator Elmer F. Andrews was asked "Has the
Administrator defined employees mentioned under Section 13-A, the Section which
exempts executive, administrative and professional folks?" He replied
“No. I have had that in mind more than anything else, and we will have
that for you within the next week or two. I am very sympathetic toward your
problem there, because I know a superintendent is not a clock watcher, nor does
he punch a time clock. Certainly if he was the sort of fellow that you would
take care of if he is sick or knocked out, if you think enough of him for that,
I think that really indicates he is a part of the executive family. I have told
some of this—or it is an illustration of how cautious a fellow who is new
on the job must be. Shortly after I was appointed Deputy Commissioner in New
York State, I was invited to the City of Rochester by the Rochester Chamber of
Commerce to meet their industry committee. We had just passed a law which
changed the hours of labor for mercantile employees, that is, females and
minors. Somebody asked me was a buyer under this new hours law, and I said
"Heavens, no." I was thinking of a buyer who goes to New York, Paris, et
cetera. The next Monday ths supervising inspector of the Rochester District
called me up and said "What did you tell them?" I said "Why", and he said "One
store in Rochester has put 90 percent of the salesgirls on as buyers. They send
them down the street twice a week to look in the windows and see what the
competitors are selling, and what price they charge, and they come back and
tell us, so they are buyers." I said "Oh, yes!" I said "Start prosecutions",
and this store decided after all they were still salesgirls. I say that as an
illustration of the fact that it is very difficult to say, particularly as new
as I am at this game, to say to you tonight where a worker leaves off and a
professional or executive begins, " [SEE: Wage Hour press release R-17a]
"Shortly before the effective date of the act the Administrator called a conference of representatives of industry and labor to ascertain their views on an appropriate definition and delimitation of these terms. A draft was discussed and revised after which those present at the conference expressed their decisive approval thereof. The final draft was approved by the Administrator on October 19, 1938, and published in the Federal Register on October 20, 1938, as Regulations, Part 541. Section 541.1 defined jointly the terms "executive" and "administrative." Section 541.2 defined the term "professional." … Section 541.5 provided for opportunity to petition for amendment of the regulations." [SEE: The Stein Report, page 1.]
"The entire regulation, including introductory comments by Andrews, took up two columns in the Federal Register, [October 20, 1938, p. 2518]. 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 2.]
"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: "DOL/WH/R-Series, Press Release of October 19, 1938, p. 1.") [SEE: CRS Report RL32088, page 3]
October 19, 1938 - "In
setting forth the Section 13(a)(1) regulations, Andrews had affirmed that the
machinery, within the Department, was in place for contesting any aspect of the
definitions that were deemed flawed, inviting citizen input.10"
(FOOTNOTE 10: "DOL/WH/R-Series, Press Release of October 19, 1938, p.
2.") [SEE: CRS
Report RL32088, page 3]
October 20, 1938:
The first version of 29 CFR 541 was published in the Federal Register. See Wage
Hour Division Press Release R-40
"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.) [CRS Report RL32088, page 3]
October 20, 1938 -
Regulation 29 CFR 541 issued (See Federal Register,
October 20, 1938, p. 2518 and Wage Hour Press
Release R-40) [SEE: CRS Report RL32088,
page 3]
"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. (Italics added.)"
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Report of the Minimum Wage Study Commission, Volume IV, pp. 236 and 240 (June 1981). United States, Minimum Wage Study Commission. 7 volumes: Vol. I. Commission findings and recommendations; Vol. II. Evolution of the FLSA and A profile of minimum wage workers; Vol. III. Noncompliance with the Fair Labor Standards Act; Vol. IV. Exemptions from the Fair Labor Standards Act; Vol. V. Effects of the minimum wage on employment and unemployment; Vol. VI. The minimum wage and the macro economy; Vol. VII. Effects of the minimum wage on the distribution of income. Washington, D.C., The Commission
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. RL32088. August 28, 2007. Available through
The Fair Labor Standards Act: Exemption of “Executive, Administrative and Professional” Employees Under Section 13(a)(1), July 17, 2003. RL31995. Available through the Congressional Research Service.