Docket No. FSIS-2010-0014 - Changes to the Schedule of Operations Regulations

[Federal Register: August 9, 2010 (Volume 75, Number 152)]
[Proposed Rules]
[Page 47726-47729]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09au10-16]

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Proposed Rules
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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[[Page 47726]]

DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 307, 381, and 590

[Docket No. FSIS-2010-0014]
RIN 0583-AD35

Changes to the Schedule of Operations Regulations

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is proposing to
amend the meat, poultry products, and egg products regulations
pertaining to the schedule of operations. FSIS is proposing to amend
these regulations to define the 8-hour work day as including time that
inspection program personnel need to spend at the workplace donning and
doffing required gear, time spent walking to their workstations after
donning required gear, and time spent walking from their work stations
prior to doffing required gear. FSIS is amending these regulations to
ensure effective and prudent expenditure of Agency budgetary and other
resources while administering its inspection program in accord with the
Supreme Court's holding in IBP, Inc. v. Alvarez, 546 U.S. 21 (2005) and
policy guidance from the Office of Personnel Management.

DATES: Submit comments on or before September 8, 2010.

ADDRESSES: FSIS invites interested persons to submit comments on this
proposed rule. Comments may be submitted by either of the following
methods:
Federal eRulemaking Portal: This Web site provides the
ability to type short comments directly into the comment field on this
Web page or attach a file for lengthier comments. Go to http://
www.regulations.gov. Follow the online instructions at that site for
submitting comments.
Mail, including floppy disks or CD-ROMs, and hand- or
courier-delivered items: Send to Docket Clerk, U.S. Department of
Agriculture (USDA), FSIS, Room 2-2127 George Washington Carver Center,
5601 Sunnyside Avenue, Beltsville, MD 20705.
Instructions: All items submitted by mail or electronic mail must
include the Agency name and docket number FSIS-2010-0014. Comments
received in response to this docket will be made available for public
inspection and posted without change, including any personal
information, to http://www.regulations.gov
Docket: For access to background documents or comments received, go
to the FSIS Docket Room at the address listed above between 8:30 a.m.
and 4:30 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Daniel Engeljohn, Acting Asst.
Administrator, Office of Policy and Program Development, FSIS, U.S.
Department of Agriculture, 1400 Independence Avenue, SW., Washington,
DC 20250-3700, (202) 720-2709.

SUPPLEMENTARY INFORMATION:

Background

The Federal Meat Inspection Act (FMIA), 21 U.S.C. 601 et seq., and
the Poultry Products Inspection Act (PPIA), 21 U.S.C. 451 et seq.,
provide for mandatory Federal inspection of livestock and poultry
slaughtered at official establishments and of meat and poultry products
processed at official establishments, respectively. The Egg Products
Inspection Act (EPIA), 21 U.S.C. 1031 et seq., provides for mandatory
inspection of egg products processed at official plants. FSIS bears the
cost of mandatory inspection provided during non-overtime and non-
holiday hours of operation. Official establishments and egg products
plants pay for inspection services performed on holidays or on an
overtime basis.
In November 2005, the Supreme Court of the United States (Court),
rendered a decision in IBP, Inc. v. Alvarez, 546 U.S. 21 (2005),
relative to donning and doffing claims brought under the Fair Labor
Standards Act, 29 U.S.C. 201 et seq. (FLSA).
As discussed in Alvarez, the FLSA, as amended by the Portal-to-
Portal Act, excludes from the calculation of an employee's compensable
work time (1) time spent walking to and from the place where the
employee performs his principal activity or activities and (2) time
spent on activities that are preliminary to or postliminary to the
employee's principal activity or activities (29 U.S.C. 254(a)).
In Alvarez, the petitioner (IBP) was a large producer of fresh
beef, pork, and related products. All production workers had to wear
outer garments, hard hats, hairnets, boots, and other gear. Production
workers' pay was based on the time spent cutting and bagging meat. In
1999, IBP employees filed a class action suit to recover compensation
for pre-production and post-production work, including the time spent
donning and doffing protective gear and walking between the locker
rooms and the production floor before and after their assigned shifts.
The lower courts had concluded that, for these employees, the donning
and doffing of unique safety gear, such as chain link metal aprons and
plexiglass armguards, are activities that are integral and
indispensable to their primary jobs. Accordingly, the lower courts held
that donning and doffing of such gear constitute ``principal
activities'' that are compensable under the FLSA. The parties did not
dispute this conclusion before the Court Id. at (27-30).
The Court then addressed the question of whether compensable time
under the FLSA includes: (1) time spent walking between the area where
employees don their gear and the production area and (2) time spent
walking from the production area back to the area where employees doff
their gear. The Court held that this post-donning and pre-doffing
walking time is compensable because donning and doffing of required
gear are principal activities marking the beginning and end of a
continuous workday (Id. at 35).
Finally, the Court addressed the question of whether time employees
spend waiting to don and doff required gear is compensable under the
FLSA. The Court held that time spent waiting to doff gear is
compensable under the FLSA because it occurs prior to doffing, which is
an employee's last principal activity, and thus during the continuous
workday (Id. at 37). By contrast, the Court held that time spent
waiting to don required gear is not compensable under the FLSA because
it occurs prior

[[Page 47727]]

to donning, which is an employee's first principal activity, and is
thus a preliminary activity under 29 U.S.C. 254(a)(2) (Id. at 38).
Under OPM regulations at 5 CFR 551.412(a), a preparatory or
concluding activity that is closely related to an employee's principal
activities and is indispensable to the performance of the principal
activities is compensable under the FLSA when the total time spent in
that activity is more than 10 minutes per workday. OPM's regulation
only applies to Federal employees, and the determination of which
preparatory and concluding activities are compensable is made by
agencies. FSIS historically took the position that donning and doffing
are not compensable activities, because such activities took less than
10 minutes per workday. In reaching this conclusion, however, FSIS did
not include the walking time.
In June 2008, an OPM letter to the National Treasury Employees
Union clarified that 5 CFR 551.412 required that time spent at the
workplace donning and doffing required gear, including walking time,
was to be counted as hours of work.
In August of 2008, the National Joint Council of Food Inspection
Locals, American Federation of Government Employees, AFL-CIO (the NJC)
filed a nationwide grievance under the 2008 Labor Management Agreement
(LMA) seeking compensation for donning and doffing activities
nationwide for all inspection personnel covered by the bargaining unit.
In consideration of the 2008 OPM interpretation of its regulation and
the Alvarez ruling, the Agency entered into a settlement with the NJC
in March 2010.
In light of the foregoing discussion, FSIS has determined it needs
to modify its regulations and do so as quickly as possible.
Accordingly, FSIS is proposing this amendment to its current
regulations and providing for a 30-day comment period.

Proposed Amendment to 9 CFR 307.4(c), 381.37(c), and 590.124

FSIS's regulations state that official meat and poultry products
establishments, importers, exporters, and official egg products plants
shall be provided inspection service, without charge, up to 8
consecutive hours per shift during the basic workweek. The regulations
also define the basic workweek as 5 consecutive 8-hour days, excluding
the lunch period (9 CFR 307.4(c) and 381.37(c)).\1\ For the reasons
discussed above, FSIS is proposing to amend these regulations to
provide that the 8-hours of inspection service includes the necessary
time for inspection program personnel to put on required gear and walk
to a work station and the necessary time for inspection program
personnel to return from a work station and remove required gear. Any
time over those 8 hours is overtime charged to an establishment.
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\1\ 9 CFR 307.4(b) and 381.37(b) provide that the lunch periods
may be 30 minutes, 45 minutes, or in any case may not exceed one
hour in duration.
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For egg product plants, FSIS's regulations at 9 CFR 590.124 defines
the normal operating schedule as consisting of a continuous 8-hour
period per day (excluding not to exceed 1 hour for lunch) 5 consecutive
days per week. FSIS does not believe additional time for donning and
doffing will typically be necessary for inspection program personnel in
egg product plants because inspection program personnel at those plants
do not need to be at a required station for operations to begin. To
ensure compliance with the applicable law and OPM guidance, however,
the Agency is proposing to amend 9 CFR 590.124 to define the 8-hour
work day as including the necessary time for inspection program
personnel to put on required gear and walk to a work station and the
necessary time for inspection program personnel to return from a work
station and remove required gear. The Agency anticipates that this
proposed change is likely to have little application to the work of the
Agency's egg product inspection personnel.

Executive Order 12866 and the Regulatory Flexibility Act

This rule was reviewed by the Office of Management and Budget under
Executive Order 12866 and was determined to be significant.

Cost to the Industry

Under this proposal, the most direct cost to the industry would be
the overtime fee that the Agency would need to charge establishments
for the time FSIS inspection personnel spend donning required gear,
walking to a work station, returning from a work station, and doffing
required gear. If meat and poultry slaughter establishments want to
maintain their normal shift length of operating for eight hours, they
would incur some overtime fees. The choice is voluntary. Some meat and
poultry slaughter establishments may choose not to incur the overtime
charges if they expect that the decline in revenues from operating for
a shorter amount of time will be smaller than the overtime fee cost.
However, the Agency expects that most meat and poultry slaughter
establishments will choose to pay the overtime charge and maintain
their current shift-time, as shortening the shift time will decrease
production and revenue while wasting existing capacity.
The actual time FSIS inspection personnel will take to don and doff
required gear will vary in each meat and poultry slaughter
establishment depending on plant-specific variables. FSIS conducted an
on-site study of a sample of establishments to estimate the average
time to travel from the donning and doffing location to the inspection
station.\2\ This pacing data was combined with data that was collected
during a donning and doffing timing study, and the estimated time for
donning, doffing, and walking is, on average, about 6.5 minutes for
poultry inspectors and 12.24 minutes for livestock inspectors. For the
purpose of its analysis, FSIS is using 15 minutes for donning, doffing,
and walking time at all meat and poultry slaughter establishments as a
reasonably conservative estimate for both poultry and livestock
inspectors. The overtime fee that the Agency charges for 15 minutes of
overtime inspection is $14.73, which, according to the recently
proposed fee schedule (74 FR 51800), would increase to $16.71 and
$17.21 in FY 2011 and 2012, respectively.\3\ These costs are far less
than the value of the poultry or livestock an establishment can
slaughter in 15 minutes per line.
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\2\ Management personnel counted the number of paces from the
point in which inspection personnel don and doff equipment and
garments to the farthest FSIS inspection station of the slaughter
floor using the normal route. To ensure the most accurate results,
the numbers of paces were counted twice at each plant before the
Agency's Industrial Engineer analyzed the results. The Industrial
Engineer calculated time in minutes using the internationally
recognized Methods-Time Measurement 1 (MTM-1), published by the MTM
Association for Standards and Research.
\3\ As proposed in the FSIS Proposed Rule of Changes in Fees for
Meat, Poultry, and Egg Products Inspection Services.
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FSIS calculated costs for the meat and poultry slaughter
establishments because slaughter establishments cannot begin operations
until Agency inspection personnel are at on-line inspection work
stations. Meat and poultry processing establishments and egg product
plants would not be affected because those establishments can begin
operations without FSIS inspection personnel being at an on-line
inspection work station. Furthermore, very-small slaughter
establishment typically will not be affected by this rule

[[Page 47728]]

because there are no donning and doffing activities for inspection
program personnel at such establishments. Because of the nature of how
slaughter is conducted in very-small establishments and because many of
the inspectors at such establishments are on patrol assignments,
inspectors typically drive up to the establishment, go in to the
establishment and simply put on their frock.
The most recent agency data shows that there are 1,041 meat and
poultry slaughter establishments, of which 263 are small and 566 are
very small (by SBA size standards.)
FSIS started by calculating the number of inspection personnel that
this proposed rule will affect. Agency data show that there are 2,911
inspection personnel in the poultry and meat slaughter establishments--
1,954 in poultry and 957 in meat. Assuming all the establishments pay
the 15-minute overtime charge per inspection personnel, and that the
establishments operate 260 days (5 days a week times 52 weeks), the
annual cost for one online inspector will be about $4,345 at the FY
2011 rate. The cost to the industry will be about $12.7 million and
$13.0 million in FY 2011 and 2012, respectively (see Table 1). Given
that the annual revenue of meat slaughtering industry alone in 2009 is
about $67.2 billion,\4\ the overtime cost to the industry is
insignificant. If we break down the cost for FY 2011 by establishment
size, based on the numbers of inspectors for each SBA size category, it
will be $10.5 million for the large establishments, $2 million for the
small and $0.065 million for the very small establishments.\5\
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\4\ Summary of the Animal (except Poultry) Slaughtering Industry
in the U.S. and its International Trade [2010 edition,] Supplier
Relations US, LLC. http://www.htrends.com/report-2700858-Animal_
except_Poultry_Slaughtering_Industry_in_the_U_S_and_its_
International_Trade_Edition.html, as of 7/16/2010.
\5\ Among the 2,911 inspectors, 2,410 are for the large
establishments, 480 are for the small establishments, and 15 are for
the very small establishments.

Table 1--Estimated Annual Cost of the Overtime Charge to the Industry
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Number of Annual cost
inspection Overtime fee Daily cost Number of days (daily x No.
personnel (15 min.) of days)
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FY 2011......................... 2,911 $16.71 $48,643 260 $12,647,131
FY 2012......................... 2,911 17.21 50,098 260 13,025,561
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Cost to the Consumer

The industry is likely to pass the increased costs on to consumers
because of the inelastic nature of the consumer demand for meat and
poultry products. However, given that the total volume of meat and
poultry slaughtered under Federal inspection in 2009 was about 91
billion pounds,\6\ the increased cost per pound due to the overtime fee
will be only $0.0001, on average.
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\6\ Livestock, Dairy, & Poultry Outlook/LDP-M-188/February 24,
2010; Economic Research Service, USDA. The Web-link to the report is
http://www.ers.usda.gov/Publications/ldp/2010/02Feb/ldpm188.pdf.
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Benefit of the Rule

This proposed rule will ensure compliance with the law and the best
use of Agency resources.

Regulatory Flexibility Analysis

The FSIS Administrator has made an initial determination that this
proposed rule will not have a significant impact on a substantial
number of small entities, as defined by the Regulatory Flexibility Act
(5 U.S.C. 601). There are 263 small and 566 very small meat and poultry
slaughter establishments. Based on the data and information contained
in the cost to industry section of this rule, the fee is, at most,
$4,345 per year for one online inspector for an extra 15 minutes (FY
2011 rate). The time required for donning and doffing for small and
very small establishments is likely much less than 15 minutes. If the
donning and doffing takes 10 minutes, the annual cost becomes about
$2,897 for one inspector (i.e., two-thirds of $4,345.) Furthermore,
almost all the very-small establishments will not be affected by this
rule because they are on a patrol assignment. Therefore, the impact
will not be significant.

Paperwork Reduction Act

This proposed rule has been reviewed under the Paperwork Reduction
Act and imposes no new paperwork or recordkeeping requirements.

Additional Public Notification

Public awareness of all segments of rulemaking and policy
development is important. Consequently, in an effort to ensure that
minorities, women, and persons with disabilities are aware of this
proposed rule, FSIS will announce it online through the FSIS Web page
located at http://www.fsis.usda.gov/Regulations_&_Policies/2010_
Proposed_Rules_Index/index.asp. FSIS will also make copies of this
Federal Register publication available through the FSIS Constituent
Update, which is used to provide information regarding FSIS policies,
procedures, regulations, Federal Register notices, FSIS public
meetings, and other types of information that could affect or would be
of interest to constituents and stakeholders. The Update is
communicated via Listserv, a free electronic mail subscription service
for industry, trade groups, consumer interest groups, health
professionals, and other individuals who have asked to be included. The
Update is also available on the FSIS Web page. Through the Listserv and
Web page, FSIS is able to provide information to a much broader and
more diverse audience. In addition, FSIS offers an e-mail subscription
service which provides automatic and customized access to selected food
safety news and information. This service is available at http://
www.fsis.usda.gov/news_and_events/email_subscription/. Options range
from recalls to export information to regulations, directives and
notices. Customers can add or delete subscriptions themselves, and have
the option to password protect their accounts.

List of Subjects

9 CFR Part 307

Facilities for Inspection.

9 CFR Part 381

Poultry Products Inspection Regulations.

9 CFR Part 590

Inspection of Eggs and Egg Products (Egg Products Inspection Act).

For the reasons discussed in the preamble, FSIS is proposing to
amend 9 CFR Chapter III as follows:

[[Page 47729]]

PART 307--FACILITIES FOR INSPECTION

1. The authority citation for part 307 continues to read as
follows:

Authority: 7 U.S.C. 394; 21 U.S.C. 601-695; 7 CFR 2.17, 2.55.

2. In Sec. 307.4(c), revise the second sentence to read as
follows:

Sec. 307.4 Schedule of operations.

* * * * *
(c) * * * The basic workweek shall consist of 5 consecutive 8-hour
days within the administrative workweek Sunday through Saturday, and
shall include the necessary time for FSIS inspection program personnel
to put on required gear and to walk to a work station, and the
necessary time for FSIS inspection program personnel to return from a
work station and remove required gear, excluding the lunch period;
except that, when possible, the Department shall schedule the basic
workweek so as to consist of 5 consecutive 8-hour days Monday through
Friday, and shall include the necessary time for FSIS inspection
program personnel to put on required gear and to walk to a work
station, and the necessary time for FSIS inspection program personnel
to return from a work station and remove required gear, excluding the
lunch period. * * *
* * * * *

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

3. The authority citation for part 381 continues to read as
follows:

Authority: 7 U.S.C. 138f, 450; 21 U.S.C. 451-470; 7 CFR 2.7,
2.18, 2.53.

4. In Sec. 381.37(c), revise the second sentence to read as
follows:

Sec. 381.37 Schedule of operations.

PART 590--INSPECTION OF EGGS AND EGG PRODUCTS (EGG PRODUCTS
INSPECTION ACT)

5. The authority citation for part 590 continues to read as
follows:

Authority: 21 U.S.C. 1031-1056.

6. In Sec. 590.124, in the second sentence, after the word
``day'', add the phrase ``and shall include the necessary time for FSIS
inspection program personnel to put on required gear and to walk to a
work station, and the necessary time for FSIS inspection program
personnel to return from a work station and remove required gear''.

Done at Washington, DC, on August 2, 2010.
Alfred Almanza,
Administrator.
[FR Doc. 2010-19346 Filed 8-6-10; 8:45 am]
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