[Code of Federal Regulations]
[Title 29, Volume 3]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR794.103]

[Page 701-702]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 794_PARTIAL OVERTIME EXEMPTION FOR EMPLOYEES OF WHOLESALE OR BULK 
 
Subpart B_Exemption From Overtime Pay Requirements Under Section 7(b)(3) 
                               of the Act
 
Sec. 794.103  Dependence of exemption on engagement in described 
distribution.

    By its terms, section 7(b)(3) provides a partial and contingent 
exemption from the general overtime pay requirements of the Act 
applicable to ``any employee * * * employed * * * by an * * * enterprise 
* * * engaged in the wholesale or bulk distribution of petroleum product 
* * *.'' Thus, engagement in the described distribution is an ``explicit 
prerequisite to exemption'' (Arnold v. Kanowsky, 361 U.S. 388), as

[[Page 702]]

are the other express conditions set forth in the section. A natural 
reading of the statutory language suggests that the employee as well as 
the enterprise must be so engaged in order for the exemption to apply 
(see Porto Rico Light Co. v. Mor, 253 U.S. 345). To the extent that its 
employees are engaged in the described distribution, the enterprise is 
itself so engaged (see Kirshbaum v. Walling, 316 U.S. 517; and see Sec. 
794.104). Also, whenever an enterprise is so engaged, any of its 
employees will be considered to be ``employed by an * * * enterprise * * 
* engaged in the wholesale or bulk distribution of petroleum products'' 
if the duties of his employment require him to perform any operations or 
provide any services in carrying on such activities of his employer, and 
if the employee is not engaged in a substantial portion of his workweek 
in other activities which do not provide a basis for exemption under 
section 7(b)(3). Such an interpretation of the quoted language is 
believed necessary to give effect to the intended scope of the exemption 
as explained in Sec. 794.101. Where an enterprise is exclusively 
engaged in the wholesale or bulk distribution of petroleum products and 
meets all the other requirements of section 7(b)(3), all of its 
employees who are paid for their hours of work in accordance with 
section 6 of the Act and the special pay provisions of section 7(b)(3) 
(see Sec. 778.602 of this chapter and Sec. Sec. 794.135 through 
794.136) will be exempt from the overtime pay requirements of the Act 
under the principles stated above. What products are included in the 
term ``petroleum products'' and what constitutes the ``bulk 
distribution'' of such products within the meaning of section 7(b)(3) 
are discussed in Sec. Sec. 794.132 through 794.133.