29 CFR § 780.703 - Basic requirements for exemption.

---
identifier: "/us/cfr/t29/s780.703"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "29 CFR § 780.703 - Basic requirements for exemption."
title_number: 29
title_name: "Labor"
section_number: "780.703"
section_name: "Basic requirements for exemption."
chapter_name: "WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR"
subchapter_number: "B"
subchapter_name: "STATEMENTS OF GENERAL POLICY OR INTERPRETATION NOT DIRECTLY RELATED TO REGULATIONS"
part_number: "780"
part_name: "EXEMPTIONS APPLICABLE TO AGRICULTURE, PROCESSING OF AGRICULTURAL COMMODITIES, AND RELATED SUBJECTS UNDER THE FAIR LABOR STANDARDS ACT"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "Secs. 1-19, 52 Stat. 1060, as amended; 75 Stat. 65; 29 U.S.C. 201-219. Pub. L. 105-78, 111 Stat. 1467."
regulatory_source: "37 FR 12084, June 17, 1972, unless otherwise noted."
cfr_part: "780"
---


# 780.703 Basic requirements for exemption.

The basic requirements for exemption of country elevator employees under section 13(b)(14) of the Act are as follows:

(a) The employing establishment must:

(1) Be an establishment “commonly recognized as a country elevator,” and

(2) Have not more than five employees employed in its operations as such; and

(b) The employee must:

(1) Be “employed by” such establishment, and

(2) Be employed “within the area of production,” as defined by the Secretary of Labor.

All the requirements must be met in order for the exemption to apply to an employee in any workweek. The requirements in section 13(b)(14) are “explicit prerequisites to exemption” and the burden of showing that they are satisfied rests upon the employer who asserts that the exemption applies (*Arnold* v. *Kanowsky,* 361 U.S. 388). In accordance with the general rules stated in § 780.2 of subpart A of this part, this exemption is to be narrowly construed and applied only to those establishments plainly and unmistakably within its terms and spirit. The requirements for its application will be separately discussed below.