[Code of Federal Regulations]
[Title 29, Volume 3]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR553.31]

[Page 288]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 553_APPLICATION OF THE FAIR LABOR STANDARDS ACT TO EMPLOYEES OF 
STATE AND LOCAL GOVERNMENTS--Table of Contents
 
                            Subpart A_General
 
Sec. 553.31  Substitution--section 7(p)(3).

    (a) Section 7(p)(3) of the FLSA provides that two individuals 
employed in any occupation by the same public agency may agree, solely 
at their option and with the approval of the public agency, to 
substitute for one another during scheduled work hours in performance of 
work in the same capacity. The hours worked shall be excluded by the 
employer in the calculation of the hours for which the substituting 
employee would otherwise be entitled to overtime compensation under the 
Act. Where one employee substitutes for another, each employee will be 
credited as if he or she had worked his or her normal work schedule for 
that shift.
    (b) The provisions of section 7(p)(3) apply only if employees' 
decisions to substitute for one another are made freely and without 
coercion, direct or implied. An employer may suggest that an employee 
substitute or ``trade time'' with another employee working in the same 
capacity during regularly scheduled hours, but each employee must be 
free to refuse to perform such work without sanction and without being 
required to explain or justify the decision. An employee's decision to 
substitute will be considered to have been made at his/her sole option 
when it has been made (i) without fear of reprisal or promise of reward 
by the employer, and (ii) exclusively for the employee's own 
convenience.
    (c) A public agency which employs individuals who substitute or 
``trade time'' under this subsection is not required to keep a record of 
the hours of the substitute work.
    (d) In order to qualify under section 7(p)(3), an agreement between 
individuals employed by a public agency to substitute for one another at 
their own option must be approved by the agency. This requires that the 
agency be aware of the arrangement prior to the work being done, i.e., 
the employer must know what work is being done, by whom it is being 
done, and where and when it is being done. Approval is manifest when the 
employer is aware of the substitution and indicates approval in whatever 
manner is customary.