FLSA2019-13 — Ordinary meaning of the phrase "not less than one month" for purposes of FLSA section 7(i)'s representative period requirement

U.S. Department of Labor
September 10, 2019
Dear Name*:
Wage and Hour Division
Washington, DC 20210
FLSA2019-13
This letter responds to your request for an opinion concerning the retail or service establishment
exemption of the Fair Labor Standards Act (FLSA). This opinion is based exclusively on the
facts you have presented. You represent that you do not seek this opinion for any party that the
Wage and Hour Division is currently investigating or for use in any litigation that commenced
prior to your request.
BACKGROUND
Your letter states that your firm has several restaurant clients who claim the retail or service
establishment overtime exemption under Section 7(i) of the FLSA. 29 U.S.C. § 207(i). You note
that most of your restaurant clients use a weekly or bi-weekly pay period and do not keep pay
information on a daily basis.
You note that one of the requirements of the FLSA Section 7(i) exemption is that more than half
of an employee's "compensation for a representative period (not less than one month) must
represent commissions on goods or services." Id. (emphasis added). Because most of your
restaurant clients do not keep pay information on a daily basis, you state that they instead use
four weekly pay periods or two bi-weekly pay periods as the "monthly" representative pay
period. You further state that because you assume that "not less than one month" means a
calendar month, you are "concerned that [your] clients' use of a representative period, which is
not strictly a calendar month, may result in a denial of the exemption."
Consequently, you pose two questions:
1. May four weekly pay periods or two bi-weekly pay periods
(four (4) workweeks) be considered a valid representative
period of"not less than one month" for purposes of the FLSA
Section 7(i) exemption?
2. In the event that the four weekly or two bi-weekly pay periods
(four (4) [work]weeks) do not meet the definition of "not less
than one month," would a representative period of six (6)
consecutive weekly pay periods or three (3) bi-weekly pay
periods constitute a valid representative period since it is "not
less than one month" (even if the six (6) weeks do not capture
an entire calendar month)?

GENERAL LEGAL PRINCIPLES
Section 7(i) of the FLSA exempts an employee of a retail or service establishment from the
overtime pay requirement of the FLSA if:
(1) the regular rate of pay of such employee is in excess of one and
one-half times the minimum hourly rate applicable to him under
section 206 of this title, and
(2) more than half his compensation for a representative period (not
less than one month) represents commissions on goods or services.
29 U.S.C. § 207(i). The regulation explaining Section 7(i)'s representative-period requirement
provides no guidance on the meaning of "not less than one month" other than stating that this
period "cannot, under the express terms of [S]ection 7(i), be less than 1 month." 29 C.F .R. §
779.417(c).
In Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134 (2018), the Supreme Court held that
"[b]ecause the FLSA gives no 'textual indication' that its exemptions should be construed
narrowly, 'there is no reason to give [them] anything other than a fair (rather than a "narrow")
interpretation."' Id. at 1142 (quoting Antonin Scalia & Bryan A. Gamer, Reading Law: The
Interpretation of Legal Texts 363 (2012)).
In giving a fair reading to a FLSA exemption for certain salesmen, partsmen, and mechanics, the
Encino Court said, "[t]he term 'salesman' is not defined in the statute, so 'we give the term its
ordinary meaning."' Id. at 1140 (quoting Taniguchi v. Kan. Pac. Saipan, Ltd., 566 U.S. 560, 566
(2012)). The term "month" as used in Section 7(i) is also not defined by the FLSA. Numerous
courts, including the Supreme Court, have recognized that the ordinary meaning of "month" is a
calendar month. See Sheets v. Selden 's Lessee, 69 U.S. (2 Wall.) 177, 190 (1864); Fogel v.
Comm 'r of Internal Revenue, 203 F .2d 347, 349 (5th Cir. 1953); Whiteside v. Metro. Life Ins.
Co., 798 F. Supp. 1380, 1390 (D. Minn. 1992); In re Ionosphere Clubs, Inc., 111 B.R. 436,442
(S.D.N.Y. 1990). A calendar month includes the period of time from a given day of a particular
month in the calendar to the corresponding day of the following month. See Whiteside, 798 F.
Supp. at 1390 n.13 ( quoting 86 C.J .S. Time § 10 (now § 8) for the proposition that a calendar
month "runs from a given day in one month to a day of the corresponding number in the next
specified succeeding month"); In re Ionosphere Clubs, 111 B.R. at 442 (quoting Black's Law
Dictionary 908 (5th Ed. 1979) for the proposition that calendar month includes the "time from
any day of any of the months as adjudged in the calendar to corresponding day, if any, if not any,
to last day, of next month"). For example, one calendar month from May 29th is June 29th.
OPINION
The period proposed by your first question-four weekly pay periods or two bi-weekly pay
periods-is not a calendar month (with the exception of either period beginning in February of a
common year) and therefore does not satisfy the statutory requirement that the representative
period be at least one month. For example, in holding that a statutory period of four months
meant four calendar months, the Supreme Court held that a requirement that a notice be
published for four months was not "satisfied by a publication for 16 weeks[.]" Guaranty Trust &
2

Safe-Deposit Co. v. Green Cove Springs & Melrose R.R. Co., 139 U.S. 137, 145 (1891).
Similarly, here, except during the month of February in a common year, four weeks from any
given date of one month will necessarily fall short of the corresponding date of the next month,
and thus will not satisfy the minimum one-month requirement of Section 7(i).
Your second question asks whether "a representative period of six (6) consecutive weekly pay
periods or three (3) bi-weekly pay periods constitute a valid representative period ... (even if the
six (6) weeks does not capture an entire calendar month)." This question presumes that the
period involved is "representative," to the extent that the number of pay periods satisfies the
statutory minimum period. Accordingly, we do not separately analyze whether the period
described in your letter, based on the facts specific to your clients, is sufficiently
"representative."
1
Six consecutive weekly pay periods or three consecutive bi-weekly pay periods satisfy the
statutory minimum period of not less than one month, i.e., one calendar month. That will be the
case even if the six consecutive weeks or the three bi-weekly periods do not capture all the days
in a given month. As the preceding definition of calendar month reflects, the ordinary meaning
of the phrase "not less than one month" is not limited to a period encompassing all of the days
within one of the twelve named months of the year.
CONCLUSION
A fair reading of the phrase "not less than one month" in the Section 7(i) exemption requires the
conclusion that six, but not four, consecutive weekly pay periods satisfy the retail or service
establishment exemption' s requirement that a representative period be not less than one month.
It similarly requires the conclusion that three, but not two, consecutive bi-weekly pay periods
satisfy the retail or service establishment exemption's requirement that a representative period be
not less than one month. Please note that such a six-week period must also be "representative"
and other criteria must be satisfied for the exemption to apply. See 29 C.F.R. Part 779.
We trust that this letter is responsive to your inquiry.
Sincerely,
~ l u&J~
Cheryl M. Stanton
Administrator
*Note: The actual name(s) was removed to protect privacy in accordance with 5 U.S.C.
§ 552(b )(7).
1
A period of"not less than one month" will not necessarily be representative. For the indicia of a
representative period, see 29 C.F.R. § 779.417. The representative period within the meaning of the
exemption "may be described generally as a period which typifies the total characteristics of an
employee's earning pattern in his current employment situation, with respect to the fluctuations of the
proportion of his commission earnings to his total compensation." 29 C.F.R. § 779.417(a).
3