(a) An establishment which is a ``retail or service establishment''
within the Act's statutory definition of that term (See discussion in
Secs. 779.312 to 779.336) must, to qualify as an exempt retail or
service establishment under section 13(a)(2) of the Act (See
Sec. 779.301), meet both of the following tests:
(1) More than 50 percent of the retail or service establishment's
total annual dollar volume of sales must be derived from sales of goods
or services (or both) which are made within the State in which the
establishment is located; and
(2) Either:
(i) The retail or service establishment must not be in an enterprise
of the type described in section 3(s), or
(ii) If the retail or service establishment is in an enterprise of
the type described in 3(s), it has an annual volume of sales (exclusive
of excise taxes at the retail level which are separately stated) of less
than $250,000.
(b) The language of the statute in section 13(a)(2) expressly
excludes from the exemption an establishment or employee engaged in
laundering, cleaning, or repairing clothing or fabrics or an
establishment engaged in the operation of a hospital, institution, or
school described in section 3(s)(4) of the Act. No exemption for these
is provided under this section even if the establishment meets the tests
set forth in paragraph (a) of this section. (See Sec. 779.338(b).) With
respect to laundering and drycleaning establishments, which Congress
found to lack a retail concept (See Sec. 779.317) and had provided with
a separate exemption in former section 13(a)(3) of the Act, repealed by
the 1966 amendments, this exclusion simply clarifies the congressional
intent to cover employees in such work under section 3(s)(2) of the
present Act and to make sure that no exemption under 13(a)(2) will be
construed so as to defeat the purpose of repealing the prior special
exemption.