29 CFR § 510.25 - Traditional functions of government.

(a) Section 6(c)(4) of the Act, as amended, limits the six-year phase-in of the statutory minimum wage (“Tier 4”) to those employees with an average wage of less than $4.00 per hour who were brought under minimum wage coverage “pursuant to an amendment made by the Fair Labor Standards Amendments of 1985.” The Department has interpreted this language as referring to section 2(c) of the 1985 FLSA Amendments, which provided for deferred liability for minimum wage violations (until April 15, 1986) “with respect to any employee who would not have been covered under the Secretary's special enforcement policy” published in 29 CFR 775.2 and 775.4. The latter subsection listed those functions of State or local government which were determined by the Supreme Court's ruling in National League of Cities v. Usery, 426 U.S. 833 (1976) (subsequently overruled by Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528 (1985)) to be integral operations of the governments in areas of traditional governmental functions. The listed “traditional” functions included the following:

(1) Schools.

(2) Hospitals.

(3) Fire prevention.

(4) Police protection.

(5) Sanitation.

(6) Public health.

(7) Parks and recreation.

(8) Libraries.

(9) Museums.

(b) The Supreme Court in National League of Cities clearly did not limit “traditional” functions of government to those set out in paragraph (a) of this section. The Court included within this concept all those governmental services which the States and their political subdivisions have traditionally afforded their citizens, which the States have regarded as integral parts of their governmental activities, and which State and local governments are created to provide. The Department interprets the Court's analysis of “traditional” functions as turning in large part upon whether the States or local governments had, prior to initial enactment of federal regulatory legislation applicable to a particular field of service or activity (such as FLSA), generally established themselves as providers of the services. The Department therefore views the following government functions as falling within the “traditional” category:

(1) Finance (including Auditor, Budget and Comptroller).

(2) Elections.

(3) Personnel.

(4) Public works.

(5) Office of the Mayor.

(6) Legal Affairs.

(7) Planning.

(8) Waterworks.

(9) Social services.

(10) Street and highway construction and maintenance.

(11) Automobile licensing.

(12) Sewage treatment.

(c) Employees whose primary function falls within one or more of the activities listed in paragraph (a) or (b) of this section, are therefore considered to be engaged in “traditional” functions of government. This would include employees who provide support functions for such activities, such as clerical, secretarial, supply and janitorial.

(d) No employees of a municipality or government corporation may be paid in accordance with the Tier 4 phase-in schedule unless the employee:

(1) Is engaged in one of the specific activities listed in paragraphs (a) and (b) of this section, and

(2) Is employed by a municipality or government corporation in which the average wage is less than $4.00 per hour.