———————————————————————————————————————————————————————————————————————————————

29 CFR 541 Timeline

1940

October 20, 1938: Regulation 29 CFR 541 was issued (See Federal Register, October 20, 1938, p. 2518 and Wage Hour Press Release R-40)

Spring, 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: CRS Report RL32088, footnote 5 on page 2.]

March 18, 1940: Wage Hour press release R-688 providing notice of a public hearing to be hold April 10, 1940, for consideration of amendments to "Sections 541.1, 541.2, and 541.4 of the said regulations defining and delimiting the terms executive, administrative, professional,...and...outside salesman," pursuant to Section 541.5 of Regulation 29 CFR 541. See also Wage Hour press release R-689 that the hearing was being held "…on petitions to re-define the terms "bona fide executive, administrative, professional," and "outside salesman" capacity, as applied to the wholesale distributive trades…"

1940 - The Stein Report

"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.]

October 20, 1938: Regulation 29 CFR 541 issued (See Federal Register, October 20, 1938, p. 2518 and Wage Hour Press Release R-40)

The third sentence in the first paragraph on page 3 of the CRS Report noted that "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.) ]

The second paragraph on page 3 of the CRS Report noted that "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."

Suggestions for revisions of 29 CFR 541

Near the bottom of the CRS Report is the comment that "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.]

"But, apparently protests were not forthcoming except, possibly, with respect to the concept of professional.¹¹"

[Footnote 11: See U.S. Department of Labor, Annual Report of the Secretary, June 30, 1939 (Washington: U.S. Govt. Print. Off., 1939), pp. 5 and 203. ]

November 18, 1938: During an address during the annual meeting of the Addressing the Associated Industries of New York meeting in Syracuse, New York, Rufus Poole, Assistant General Counsel for the Wage and Hour Division, asked: "Have you ever tried to define a professional? That is hard enough, but engaged in a “bona fide professional capacity” is even harder. The dictionaries do not give us the answer. They indicate that sometimes the word “professional” is used to mean a person engaged in one of the learned professions—that is medicine, law and the ministry. Then, the dictionaries talk about education and skill and even about one who engages in sports for money. We had to define this term so that employers and employees could use it.... (See Wage Hour press release R-97, November 18, 1938)

Starting at the bottom of page 3, the CRS Report quotes Rufus Poole, Assistant General Counsel for the Wage and Hour Division, that "The concept of professional, he stated, was the “only one that has been seriously questioned to date” and, even here, DOL found that critics were not able to suggest “a better definition.” Poole added: “There is a statutory duty on the Administrator to promulgate a definition. So we put out the best definition we could.”¹²

[Footnote 12: DOL/WH/R-Series, address of Rufus Poole before the Associated Industries of New York, Syracuse, November 18, 1938, p. 11.]

At the top of page 4 the CRS Report states that "Gradually, employers would voice concern with the Section 13(a)(1) structure: particularly with respect to “certain high-salaried employees.” “As the statute now stands,” Andrews stated, “these persons are covered unless they fall within the definition of employees engaged in an executive, administrative, or professional capacity.” Some employers had argued, Andrews reported, “that certain employees who do not fall within these categories ... are, nevertheless, paid rather high salaries and are engaged steadily in work which is of a very responsible nature.” But: “The number of such employees is not know[n] nor is the extent to which the provisions of Section 7 of the act may impose changes in the personnel policies and the administrative practices of business enterprises.” Andrews concluded: “... any line of demarcation placing these high-salaried employees into a separate category for special treatment would have to be very carefully drawn....”¹³"

[Footnote 13: U.S. Department of Labor, Wage and Hour Division. Interim Report of the Administrator for the Period August 15 to December 31, 1938, p. IV-8. See also DOL/WH/R-Series, Andrews address before the Cleveland City Club, February 18, 1939, pp. 7-8; and Andrews before the American Newspaper Guild, San Francisco, July 31, 1939, pp. 8-12.]

"Meanwhile, legislation was introduced that would variously have modified Section 13(a)(1) especially with respect to treatment of professionals or higher wage employees or both, though this does not appear to have been a high priority, neither with DOL nor with Congress.¹⁴

[Footnote 14: U.S. Department of Labor, First Annual Report of the Administrator of the Wage and Hour Division, 1939 (Washington: U.S. Gov. Print. Office, 1940), p. 129.

"Andrews indicated his support for “certain clarifying amendments” to the FLSA but opposed the measure reported from the House Labor Committee (H.R. 5435 of the 76th Congress) as “A Bill to Lower Wages and Establish Longer Hours of Work.”¹⁵

[Footnote 15: DOL/WH/R-Series, Press Release of June 7, 1939.

That paragraph concludes with the observation that "The legislation was not adopted.¹⁶"

[Footnote 16: Congressional Record, June 5, 1939, pp. 6620-6622. H.R. 5435, an umbrella measure, would have changed a number of requirements of the FLSA: inter alia, that “any employee employed at a guaranteed monthly salary of $200 or more shall be entirely exempt” from the wage and hour standards of the act. See U.S. Congress, House Committee on Labor, Amendments to the Fair Labor Standards Act of 1938, report to accompany H.R. 5435, 76th Cong., 1st sess., H.Rept. 76-522 (Washington, GPO, 1939), pp. 3 and 8-9.

Under the heading "ORIGINAL DEFINITIONS" on page 1 of The Stein Report, the agency stated that "Since the issuance of these Regulations, there .. has been much correspondence and many conferences between the Wage and Hour Division and interested employers, employees, trade associations, and unions concerning the propriety of the definitions and their correct interpretation. In recent months controversial points have come into sharper focus and applications for amendments to sections 541.1, 541.2.k,.and 541.4 were filed by the Southern States Industrial Council, the U. S. Independent Telephone Association, and others."

This continues, under the heading "HEARINGS AND PROPOSED REDEFINITIONS" on page 1 of The Stein Report, that "Accordingly, the Administrator determined to call public hearings to allow all interested parties to express their views on the regulations and to propose amendments. In order to make the record more usable, the hearings were divided into four groups according to a rough industry classification. Such a grouping was purely for administrative convenience.³"

[Footnote 3: In addition to the formal Notices of Hearing, this procedure was explained by the Administrator in a series of general press releases, as follows: March 18, 1940, R-689; April 10, 1940, R-725; May 11, 1940, R-770; Juue 21, 1940, R-871; July 25, 1940, R-929.]

Starting at the bottom of page 4, the CRS Report stated that "In mid-March 1940 (when the regulation governing the EAP exemption, 29 CFR 541, was just under 18 months old), Fleming announced a hearing on proposed changes to the regulation. Apparently anticipating a relatively low-key review (since the EAP exemption appears to have sparked little controversy), the hearing was projected as a one-day affair (April 10) with the Division’s Harold Stein designated to preside.¹⁸"

[Footnote 18: DOL/WH/R-Series, hearing announcement, March 18, 1940, pp. 2-3. (See R-688 and R-689)]

"The Division further advised that the hearing “is confined to the wholesale distributive trades because those are the only interests which have petitioned for amendments and hearing on the definitions in question.”¹⁹"

[Footnote 19: DOL/WH/R-Series, press release, March 18, 1940, pp. 1-2. Petitioning for a hearing were the Council of National Wholesale Associations, the American Retail Federation, and the Southern States Industrial Council.

April 3, 1940 A press release was issued announcing that the agency had extended the period for filing written statements and notices of intention to appear at the hearing from April 3^rd to April 9^th.

At the top of page 2 of The Stein Report is the assurance that "At these hearings all interested parties were given full opportunity to testify and to cross-examine witnesses. There was wide representation from both industry and labor;⁴ many of those who testified based their statements on painstaking and prolonged study. These statements contain a mass of valuable information. In addition to the oral testimony, approximately 180 briefs, written statements and memoranda were received. The Administrator also called upon members of his staff for suggestions based on their own experiences in making decisions under the regulations during the course of actual inspection work. The following report and recommendations are based on the whole investigation which has been carried out in the manner described."

[Footnote 4: There were 127 appearances on behalf of employers and employers' associations; 34 on behalf of employee groups (A. F . of L., C. I. O., and independent) : 3 on behalf of the American Association of Schoo1s and Departments of Journalism; and 1 for the League of Women Shoppers, Inc.: a full list of appearances will be found in Appendix C.]

On page 5 of the CRS Report is the note that "As Fleming would later observe, “the power to define is the power to exclude.”²⁰ The scope of the exemption (or of wage/hour protection) would rest on the manner in which the basic concepts surrounding the Section 13(a)(1) exemption were defined: not just the pivotal words executive, administrative or professional, but also the terms of the explanatory language associated with the regulation."

[Footnote 20: Annual Report of the Secretary, 1940, p. 236.]

At the top of page 6 of the CRS Report, it was noted that "Fleming invited Isserman and representatives of other worker interests to attend the hearing as observers or to submit oral or written comments. But, he also held out the possibility that hearings dealing with other industries might be conducted.²¹

[Footnote 21: DOL/WH/R-Series, press release of April 2, 1940, concerning the April 10 hearing. Attached was Isserman’s letter to Fleming, March 22, 1940, and Fleming’s reply to Isserman, March 28, 1940.

"Fleming extended the comment period with respect to the April 10 hearing and released the text of the changes proposed by the various industry groups.²²

[Footnote 22: DOL/WH/R-Series, press release of April 3, 1940, concerning the April 10 hearing. (See R-713 and R-714)]

In the second paragraph on page 6 of the CRS Report, it is noted that "The hearing commenced as scheduled, but it extended intermittently through several months.²³"

[Footnote 23: See DOL/WH/R-Series, press releases of May 11 and 12, 1940, June 21, 1940 (See R-867, R-871, and R-872), and July 25, 1940. A comprehensive analysis of the information gathered through the hearings (The Stein Report) was subsequently published by the Department of Labor.

“In addition to the oral testimony, approximately 180 briefs, written statements and memoranda were received.”²⁴

[Footnote 24: The Stein Report, p. 2.]

"Some proposals were sweeping in concept. The Division estimated that “some 1,500,000 clerical or ‘white collar’ workers employed by all establishments in all industries” were covered by the act and could be rendered exempt (i.e., ineligible for minimum wage and overtime pay protection), depending upon the manner in which the basic concepts were defined.²⁵"

[Footnote 25: DOL/WH/R-Series, press release of April 10, 1940. The Southern States Industrial Council would have redefined administrative to include “clerical employees such as bookkeepers, payroll clerks, auditors, cost accountants, statisticians, and all other office help regularly employed on a straight salary basis and given vacations and sick leave with pay.”]

"Some argued for a series of regional differentials or earnings/coverage thresholds based upon the population of the communities in which the firms operated. How should on-the-job training be treated for overtime pay purposes? Or, “the efforts of ambitious young men to improve their status by studying their employer’s business after working hours?” Other issues were also raised, some of which would reappear frequently through the next several decades.²⁶"

[Footnote 26: The Stein Report, pp. 5-7.]

"In his review of the evidence, Stein took pains to distinguish between the terms “defined” and “delimited” as they appear in Section 13(a)(1). Thus the Administrator is charged, he suggests, with determining “which employees are entitled to the exemption,” but also with “drawing the line beyond which the exemption is not applicable.” He concluded: “The general rule in a statute of this nature, that coverage should be broadly interpreted and exemptions narrowly interpreted, is so well known as to need little elaboration here.”²⁷

[Footnote 27: (Ibid. [The Stein Report])), p. 2. Stein added, p. 6-7 “... if Congress had meant to exempt all white collar workers, it would have adopted far more general terms than those actually found in Section 13(a)(1) of the act. The theory of general exemption is further negated by the grant of power to the Administrator to define and delimit those terms.” In another context, but in the same spirit, DOL has observed that “Exemptions provided in the Act ‘are to be narrowly construed against the employer seeking to assert them’ and their application limited to those who come ‘plainly and unmistakably within their terms and spirit.’” See 29 CFR 780.2.]

October 14, 1940 - revised 29 CFR 541 announced

Under the heading "A New Regulation Promulgated (1940)" on page 6 of CRS Report, is the note that on "On October 14, 1940, Colonel Fleming made public a new regulation governing the EAP exemption. It would take effect on October 24, 1940, the second anniversary of implementation of the FLSA—and the date on which the standard work week, under the act, was to be phased down to 40 hours.

[NOTE: See press release R-1089: TITLE 29 - LABOR - CHAPTER V - WAGE AND HOUR DIVISION PART 541 - SECTIONS 541.1 to 541.6 REGULATIONS 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" PURSUANT TO SECTION 13(a)(1) OF THE FAIR LABOR STANDARDS ACT, and press release R-1090: "EXECUTIVE, ADMINISTRATIVE, PROFESSIONAL . . . OUTSIDE SALESMAN" RE-DEFINED]

Under the heading "Administrative Initiative" at the top of page 7 of the CRS Report is the observation that "In announcing the 1940 EAP regulation, DOL stated that the Administrator “has broad powers, not only to define but to delimit the extent of these exemptions under Section 13(a)(1).”²⁸ It is important to recall that the act, itself, provided only that “sections 6 and 7 shall not apply with respect to (1) any employee employed in a bona fide executive, administrative, [or] professional ... capacity.” Technical distinctions with respect to qualifications and tests for exemption were the constructs of the Wage and Hour Division in defining and delimiting the brief mandate from Congress. And, even then, it was the product of a young agency exploring its mandate and working with the benefit of relatively few precedents from which to draw guidance.

[Footnote 28: DOL/WH/R-Series, press release of October 14, 1940, p. 4]

In the next paragraph it is noted that "The 1938 regulation set down by Administrator Andrews, however useful, was an administrative device—which Andrews, himself, recognized when inviting post facto comment. But, once in place, the 1938 regulation became the standard upon which future regulations would rest. Fleming had before him some 2,000 pages of testimony collected during the Stein hearings from representatives of employers and organized labor. But, those hearings had operated within the context (and under the assumptions) set down in the Andrews regulation. Thus, the Fleming regulation (1940), a modification of the Andrews regulation (1938), would begin some 60 years of parsing regulatory language leading to the proposed rule of March 31, 2003.²⁹"

[Footnote 29: This report, a historical sketch, will not follow the variations, proposed and adopted, with respect to each regulatory initiative. In DOL/WH/R-Series, press releaseof October 14, 1940, there is a somewhat detailed, 10-page analysis of the variations accepted by the Division in 1940. See also The Stein Report, cited above. Among industries testifying was the motion picture industry. See discussion below.]

"The 1940 regulation, including covering statement, ran just over one page in the Federal Register: still a reasonably simple statement of policy."³⁰

[Footnote 30: "The language defining executive, administrative and professional is drawn from the regulation as published in the Federal Register, October 15, 1940, pp. 4077-4078. The actual regulation includes additional detail and qualifications for exemption."]

Where the 1938 regulation had combined executive and administrative as a single category, the 1940 regulation separated them into two classifications.³¹

[Footnote 31: "DOL/WH/R-Series, press release of October 14, 1940, p. 1."]

"Some accounts of the new regulation “were confusing,” DOL acknowledged, and Colonel Fleming, in a letter to Joseph Curran, president, Greater New York Industrial Union Council, offered certain clarifications. He commenced by affirming the individual character of the EAP exemption. “Of course,” he explained, “the exemption or non-exemption of any individual employee under these definitions is a question for individual factual determination ....” Thus, the Division would need to proceed on a case-by-case basis where any controversy existed."³⁶

[Footnote 36: "DOL/WH/R-Series, letter from Fleming to Joseph Curran, October 24, 1940, p. 1. Enforcement would not be easy, Fleming said. It “requires the Division representative to visit the establishment, interview the employer, examine his pay roll and time records, and talk to a representative number of his employees. Where records indicate violations or falsifications,” he stated, “... they are transcribed in whole or in part and checked against the statements of the employees.” Annual Report of the Secretary, 1941, p. 147. "]

On page 9 of the CRSReport, under the heading "Hearings and Regulatory Modification (1949)" is the observation that "Through the next several years, various proposals surfaced that urged modification of the EAP regulation.³⁹ However, given the exigencies of World War II, public policy concerns seem to have been deflected into other areas."

[Footnote 39: "See for example, Federal Register, January 17, 1942, p. 332."]

Under the heading "Hearings and Regulatory Modification (1949)" on page 9 of the CRS Report, it is noted that "In October 1947, the Division initiated a new round of hearings on 29 CFR 541 to commence on December 2, 1947.⁴⁰"

[Footnote 40: "Federal Register, October 21, 1947, pp. 6863-6864."]

On October 22, 1947, a notice of the hearing was published in the Federal Register

"As in 1940, the hearings led to publication of a study of the executive, administrative and professional exemption. Prepared by Harry Weiss who presided at the hearings, it was published in June 1949.⁴¹"

[Footnote 41: "Department of Labor, Wage and Hour Division, Report and Recommendations on Proposed Revisions or Regulations, Part 541, Defining the Terms “Executive,” “Administrative,” “Professional,” “Local Retailing Capacity,” [and] “Outside Salesman” (Washington: U.S. Govt. Print. Off., 1949), 100 pp. (Hereafter cited as The Weiss Report.)"]

"The hearings “continued for 22 separate days” and heard “more than 100” witnesses. In addition, briefs were filed “in lieu of personal appearances ... by more than 150 groups and individuals.”⁴²"

[Footnote 42: "Annual Report of the Secretary, 1948, p. 90."]

"The proposed regulatory revisions were published on September 10, 1949,⁴³ and a new final rule was published on December 24, 1949, under authority of William R. McComb, the new Wage and Hour Administrator.⁴⁴"

[Footnote ⁴³: Federal Register, September 10, 1949, pp. 5573-5574."]

[Footnote ⁴⁴: Federal Register, December 24, 1949, p. 7705."]

1949 - The Weiss Report

1958 - The Kantor Report

2003 -

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

Top of page

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

RESOURCES

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.