(a) General. A funeral home establishment may qualify as an exempt
retail or service establishment under section 13(a)(2) of the Act if it
meets all the requirements of that section. Where the establishment
meets these requirements generally all employees employed by the
establishment will be exempt except any employees who perform any work
in connection with burial insurance operations (see paragraph (b)) or
who spend a substantial portion of their workweek in ambulance service
operations, as described in paragraph (e) below.
(b) Burial insurance operations. There is no retail concept
applicable to the insurance business (see Sec. 779.317). Burial
associations which enter into burial insurance contracts are generally
regulated by the State and the regulations
governing such associations are included in State statutes under
Insurance. The contracts issued are very similar in form and content to
ordinary life insurance policies. Income received from such operations
is nonretail income and employees engaged in such work are not employed
in work within the scope of the retail exemption (see Sec. 779.308).
(c) Accommodation items. Amounts paid to funeral homes to cover the
cost of ``accommodation'' items are part of the gross receipts of the
establishment and are included in its annual gross volume of sales made
or business done. Such items may include goods or services procured by
the funeral home on behalf of the bereaved with or without profit but on
its own credit or through cash payment by it, such as telegrams, long
distance calls, newspaper notices, flowers, livery service, honoraria to
participating personnel, transportation by common carrier, clothing for
the deceased, and transcripts of necessary forms. For the purposes of
determining the applicability of the retail or service establishment
exemption, receipts of the funeral home in reimbursement for such
services are considered derived from sales or services recognized as
retail in the industry. Cash advances made as a convenience to a
bereaved family are not included in computing the gross volume of sales
made of business done when repaid. Of course, if interest is charged it
would be included in the gross volume of sales and nonretail income.
(d) Nonretail services. Calling for and preparing bodies and
crematory service for other funeral homes, burial insurance operations,
and ambulance or livery transportation service (as distinguished from
the use of ambulances or other vehicles as a necessary part of the
undertaking, funeral, or burial services of the establishment), are some
examples of a funeral home providing goods or services which will be
``resold'' or which are not recognized as retail.
(e) Ambulance service. The typical ambulance service establishment,
engaged exclusively or nearly so in providing a specialized form of
transportation for sick, injured, aged, or handicapped persons, is a
part or branch of the transportation industry. Since there is no
traditional retail concept in the transportation industry, such
ambulance service establishments cannot qualify for the section 13(a)(2)
exemption (see Sec. 779.317). Income from the same typical ambulance
services would be considered nonretail in applying the 25 percent
tolerance for nonretail income in a funeral home. If an establishment
engaged in a combination of funeral home and ambulance services meets
all the tests for exemption under section 13(a)(2), as applied to the
combined sales of both types of services, those of its employees who are
engaged in the funeral home's activities and functions will be exempt as
employees of a retail or service establishment. This exemption, however,
does not apply to any employee regularly engaged in nonexempt ambulance
transportation activities in any workweek when he devotes a substantial
amount of his working time to such nonexempt work. More than 20 percent
of the employee's working time in the workweek will, for enforcement
purposes, be considered substantial.
(f) Out-of-State sales. An arrangement with a funeral home to embalm
and ship human remains to a point outside the State for burial is not a
sale within the State. The reverse situation where an out-of-State
funeral director ships the remains to a funeral home to arrange for
local interment also is not a sale within the State.
(g) Work for more than one establishment. Employees performing
central office, supply, or warehouse functions for more than one funeral
home establishment are not within the exemption (see Sec. 779.310).
However, where certain mortuaries may operate more than one exempt
establishment and where employees such as embalmers employed by an
exempt funeral home may be called upon in a given workweek to perform
for another exempt establishment or establishments in the same
enterprise work which is a part of the funeral home services sold by
that establishment or establishments to customers, such employees do not
lose the exemption where at all times during the workweek the employee
is employed by one or the other of such exempt establishments either
inside or outside the
establishment in the activities within the scope of its own exempt
business (see Sec. 779.311(b)). In addition, where an establishment
offering complete funeral home services also has outlying chapels where
only the funeral services of the deceased persons are conducted,
employees of the main establishment who are otherwise exempt do not lose
the exemption by virtue of the activities which they may perform in
connection with the funeral services held at the chapel. These
activities are in such a case part of their employment by the exempt
main establishment.
