FLSA Seasonal Amusement or Recreational Establishment Exemption: Seasonal Operations and Seasonal Receipts Tests

The Fair Labor Standards Act requires covered employers to pay minimum wages and overtime compensation to certain categories of employees. However, the law contains several exceptions or “exemptions” from these requirements. This post will focus on the exemption for employees of seasonal amusement or recreational establishments under 29 U.S.C. § 213(a)(3). The Department of Labor Fact Sheet #18 is an excellent resource for information about this exemption. Some DOL implementing regulations relevant to the seasonal amusement or recreational establishment exemption are generally located at 29 C.F.R. §§ 779.385, 779.23, 779.203, and 779.302-311.

Two Alternative Tests for the Exemption

The FLSA provides an exemption from the law’s minimum wage and overtime requirements (found at 29 U.S.C. §§ 206 and 207, respectively) for employees “employed by an establishment which is an amusement or recreational establishment, organized camp, or religious or non-profit educational conference center”, if either of the following two tests are met. 

  1. The establishment “does not operate for more than seven months in any calendar year,” or  
  2. “[D]uring the preceding calendar year, its average receipts for any six months of such year were not more than 33⅓ per centum of its average receipts for the other six months of such year[.]”

29 U.S.C. § 213(a)(3). However, the FLSA also provides a limited exception from this exemption for certain employees of private entities operating in a national park, national forest, or on lands in the National Wildlife Refuge System:

[E]xcept that the exemption from sections 206 and 207 of this title [minimum wage and overtime requirements] provided by this paragraph does not apply with respect to any employee of a private entity engaged in providing services or facilities (other than, in the case of the exemption from section 206 of this title, a private entity engaged in providing services and facilities directly related to skiing) in a national park or a national forest, or on land in the National Wildlife Refuge System, under a contract with the Secretary of the Interior or the Secretary of Agriculture…

29 U.S.C. § 213(a)(3).

Establishment Compared to Enterprise

Because this exemption only applies to employees of certain “establishments”, FLSA regulations on the distinctions between an “establishment” and an entire business or “enterprise” can be relevant. In short, the regulations clarify that an “establishment” refers to a distinct physical place of business: 

As used in the [FLSA], the term establishment…refers to a “distinct physical place of business” rather than to “an entire business or enterprise” which may include several separate places of business. This is consistent with the meaning of the term as it is normally used in business and in government, is judicially settled, and has been recognized in the Congress in the course of enactment of amendatory legislation[.]

29 C.F.R. § 779.23 (emphasis in original; citations omitted). FLSA regulations further provide that the “[a]musement or recreational establishments” referenced in the exemption are “establishments frequented by the public for its amusement or recreation and which are open for 7 months or less a year or which meet the seasonal receipts test provided in clause (B) of the exemption.” 29 CFR § 779.385. Typical examples of such establishments are “the concessionaires at amusement parks and beaches.” Id

Application to Multiunit Operations 

This distinction between an establishment and an enterprise, in the context of a business operating at multiple locations, is further detailed in 29 C.F.R. §§ 779.303

As previously stated in § 779.23, the term establishment as used in the [FLSA] means a distinct physical place of business. The “enterprise,” … may be composed of a single establishment. The term “establishment,” however, is not synonymous with the words “business” or “enterprise” when those terms are used to describe multiunit operations. In such a multiunit operation some of the establishments may qualify for exemption, others may not. For example, a manufacturer may operate a plant for production of its goods, a separate warehouse for storage and distribution, and several stores from which its products are sold. Each such physically separate place of business is a separate establishment. In the case of chain store systems, branch stores, groups of independent stores organized to carry on business in a manner similar to chain store systems, and retail outlets operated by manufacturing or distributing concerns, each separate place of business ordinarily is a separate establishment.

29 C.F.R. § 779.303 (emphasis added). In other words, a business or enterprise can have multiple establishments, and this exemption may apply to employees at some, but not all, of those establishments. For additional regulations addressing the meaning of “establishment”, see 29 C.F.R. §§ 779.302-311 and 779.203; see also 29 U.S.C. §§ 203(r) and (s) for “enterprise” definitions and tests.

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The information you obtain at this site is not legal advice, is not intended to be legal advice, and does not create an attorney-client relationship. Parts of this site may be considered attorney advertising. If you have questions about any particular issue or problem, you should contact your attorney. Coffield PLC and attorney Tim Coffield welcome your calls, emails, and contact forms. Contacting Coffield PLC or Tim does not create an attorney-client relationship.