[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: 29CFR776.15] [Page 373-374] TITLE 29--LABOR CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR PART 776_INTERPRETATIVE BULLETIN ON THE GENERAL COVERAGE OF THE WAGE AND HOURS PROVISIONS OF THE FAIR LABOR STANDARDS ACT OF 1938--Table of Contents Subpart A_General Sec. 776.15 ``Production.'' (a) The statutory provisions. The activities constituting ``production'' within the meaning of the phrase ``engaged in * * * production of goods for commerce'' are defined in the Act \52\ as follows: --------------------------------------------------------------------------- \52\ Act, section 3(j). This definition is also applicable in determining coverage of the child labor provisions of the Act. See part 4 of this title. Produced means produced, manufactured, mined, handled, or in any other manner worked on in any State; and for the purposes of this Act an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any closely related process or occupation directly essential to the --------------------------------------------------------------------------- production thereof, in any State. The Act bars from interstate commerce ``any'' goods in the production of which ``any'' employee was employed in violation of the minimum-wage or overtime-pay provisions, \53\ and provides that in determining, for purposes of this provision, whether an employee was employed in the production of such goods: --------------------------------------------------------------------------- \53\ Act, section 15(a)(1). The only exceptions are stated in the section itself, which provides that ``it shall be unlawful for any person--(1) to transport, offer for transportation, ship, deliver, or sell in commerce, or to ship, deliver, or sell with knowledge that shipment or delivery or sale thereof in commerce is intended, any goods in the production of which any employee was employed in violation of section 6 or section 7, or in violation of any regulation or order of the Administrator issued under section 14; except that no provision of this Act shall impose any liability upon any common carrier for the transportation in commerce in the regular course of its business of any goods not produced by such common carrier, and no provision of this Act shall excuse any common carrier from its obligation to accept any goods for transportation; and except that any such transportation, offer, shipment, delivery, or sale of such goods by a purchaser who acquired them in good faith in reliance on written assurance from the producer that the goods were produced in compliance with the requirements of the Act, and who acquired such goods for value without notice of any such violation, shall not be deemed unlawful;'' * * * proof that any employee was employed in any place of employment where goods shipped or sold in commerce were produced, within ninety days prior to the removal of the goods from such place of employment, shall be prima facie evidence that such employee was engaged in the production of such goods. \54\ \54\ Act, sec. 15(b). --------------------------------------------------------------------------- (b) General scope of ``production'' coverage. The statutory provisions quoted in paragraph (a) of this section, show that for purposes of the Act, wherever goods are being produced for interstate or foreign commerce, the employees who are covered as ``engaged in the production'' of such goods, include, in general, all those whose work may fairly be said to be a part of their employer's production of such goods, \55\ and include [[Page 374]] those whose work is closely related and directly essential thereto, \56\ whether employed by the same or a different employee. (See Sec. Sec. 776.17 to 776.19.) Typically, but not exclusively, this includes that large group of employees engaged in mines, oil fields, quarries, and manufacturing, processing, or distributing plants where goods are produced for commerce. The employees covered as engaged in ``production'' are not limited, however, to those engaged in actual physical work on the product itself or to those in the factories, mines, warehouses, or other place of employment where goods intended for commerce are being produced. If the requisite relationship to production of such goods is present, an employee is covered, regardless of whether his work brings him into actual contact with such goods or into the establishments where they are produced, and even though his employer may be someone other than the producer of the goods for commerce. \57\ As explained more fully in the sections following, the Act's ``production'' coverage embraces many employees who serve productive enterprises in capacities which do not involve working directly on goods produced but which are nevertheless closely related and directly essential to successful operations in producing goods for interstate or foreign commerce. And as a general rule, in conformity with the provisions of the Act quoted in paragraph (a) of this section, an employee will be considered to be within the general coverage of the wage and hours provisions if he is working in a place of employment where goods sold or shipped in interstate commerce or foreign commerce are being produced, unless the employer maintains the burden of establishing that the employee's functions are so definitely segregated from such production that they should not be regarded as closely related and directly essential thereto. \58\ --------------------------------------------------------------------------- \55\ Borden Co. v. Borella, 325 U.S. 679; Armour & Co. v. Wantock, 323 U.S. 126. See also paragraph (c) of this section. \56\ Kirschbaum v. Walling, 316 U.S. 517; Roland Electrical Co. v. Walling, 326 U.S. 657; H. Mgrs. St., 1949, p. 14; Sen. St. 1949 Cong. Rec. p. 15372. \57\ Borden Co. v. Borella, 325 U.S. 679; Roland Electrical Co. v. Walling. 326 U.S. 657; Kirschbaum v. Walling, 316 U.S. 517; Walton v. Southern Package Corp. 320 U.S. 540. \58\ Guess v. Montague, 140 F. 2d 500 (C.A. 4). Cf. Armour & Co. v. Wantock, 323 U.S. 126. ---------------------------------------------------------------------------