USMCA Executive, Management, Research and Development, Engineering, and Other Personnel

Section 810.130 provides a list of the types of workers whose hours worked are never included in the average hourly base wage rate calculation. Subsection (a) excludes from the average hourly base wage rate any hours worked by executive or management staff who generally have the authority to make final decisions to hire, fire, promote, transfer, and discipline employees. This regulation, which largely tracks the Uniform Regulations and is consistent with its intent, is meant to provide helpful guidance to the regulated community on the duties indicative of executive or management staff. It is not intended to condone including in the average hourly base wage rate direct production work hours of executive or management staff who, for example, perform all but one of the enumerated duties, or make decisions on all of the listed duties, but not “final decisions” on one of the listed duties. The Department will closely scrutinize the designation of employees as not falling within this category when conducting verifications in order to ensure compliance with the USMCA’s position that the average hourly base wage rate exclude the “salaries of management[.]” See Automotive Appendix, Article 7, n.77.

Subsection 810.130(b) excludes from the average hourly base wage rate any hours worked by workers engaged in research and development. Subsection 810.130(c) excludes engineers, mechanics, or technicians, if such personnel are not responsible for maintaining and ensuring the operation of the production line or tools and equipment used in the production of vehicles or parts. These provisions are consistent with the Uniform Regulations, which provide that direct production work does not include “any work by workers engaged in research and development, or work by engineering or other personnel that are not responsible for maintaining and ensuring the operation of the production line or tools and equipment used in the production of vehicles or parts.” Uniform Regulations, Part VI, Sec. 12, ¶ 1. The Department interprets “or other personnel” in the Uniform Regulations to encompass mechanics or technicians—skilled workers who, under the Uniform Regulations, perform direct production work when they are “responsible for maintaining and ensuring the operation of the production line or tools and equipment used in the production of vehicles or parts,” but who do not perform direct production work, and thus cannot be included in the average hourly base wage rate calculation, when they do not meet that requirement. Uniform Regulations, Part VI, Sec. 12, ¶ 1. A contrary interpretation of “other personnel” that, for example, encompassed all other types of workers, could unduly exclude direct production work from the average hourly base wage rate calculation in a manner that the Department believes is contrary to the USMCA and the intent underlying the Uniform Regulations.

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