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TABLE 2.-Annual cost of adequate maintenance and protection of health for a working woman living as a member of a family, New York State, and by community, 1940-55 i

City and population group

Sep- Janu

1955

1952

1951 tember ary 1948 1947 1946 1945 1944 1943 1950 1950

1942 1941

1940

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1 Year-to-year differences in costs reflect not only price changes but also changes in procedure and in the budget.

2 Surveys in 1953 and 1954 related only to New York City. Annual cost in New York City in 1953 was $2,521; in 1954, $2,488.

Not available.

STATEMENT OF HON. HOMER CAPEHART, UNITED STATES SENATOR FROM INDIANA

The bill which I have introduced (S. 1437) and which is before this subcommittee for consideration is intended to correct a serious problem which currently exists and will continue to exist unless my bill is passed.

Congress has enacted three major laws which deal with obligations of employer and employee: the National Labor Relations Act, the Social Security Act, and the Fair Labor Standards Act. Originally, all three laws had the same definition of employee. The Supreme Court decided in a series of cases that that definition was not explicit and assumed, therefore, that Congress intended something broader than the ordinary rules of law to apply. Just how broad, has never been established, but there have been decisions, both administrative and judicial, holding that a person who is an independent contractor under usual legal tests is an employee for the purpose of these statutes.

Subsequently, Congress amended the National Labor Relations and the Social Security Acts to provide specifically that the ordinary meaning of the word "employee" was intended, and, therefore, the usual (common law) rules of law must be applied. Thereafter, in both the National Labor Relations and the Social Security Acts certain exceptions to the rule were established by Congress.

No similar amendments have been made to the Fair Labor Standards Act. The result of the variance between the National Labor Relations and Social Security Acts on the one hand and the Fair Labor Standards Act on the other has been that persons have been held to be employees under the Fair Labor Standards Act while they remain independent contractors and so self-employed under the other two acts. Perhaps worse than the actuality of a person finding himself in a position of being an employer and not an employer of another at the same time, is the possibility of it. As the situation now stands, in a great many lines of business no person dealing with another believing him to be an independent contractor can be certain that at some later date the independent contractor and all of his employees will not be held to have been employees of the person making the contract.

This kind of situation imposes an impossible burden on businessmen acting in entire good faith. If a man contracts to have a job done for him, he plans his business on the basis of a known contractual cost only to find later that his obligation was not to pay the contract price, but wages, including overtime, of men not on his payroll, for whom he has no work records or time sheets-men whose very identity he does not know. And the person with whom he contracted finds that he is not the independent small-business man he thought he was, but an employee of another, from whom he had not the slightest intention of accepting employment.

This kind of situation is certainly not one which Congress had any intention of creating, and one which Congress should not permit to persist.

The only objections to my bill, of which I am aware, were stated when it was in its original form, which provided that in all situations the common law definition of employee should be applied. Those objections resolved themselves down to one basic one, that the bill would lessen coverage under the Fair Labor Standards Act, and would remove from certain people the protection of the law, which they now enjoy. My bill in its present form, as I have amended it, would not materially reduce coverage of the act. The amendments provide that notwithstanding common law concepts, certain agent or commission drivers, full-time life-insurance salesmen, homeworkers and certain traveling or city salesmen will be deemed employees for the purpose of the act. These people are the same as those that Congress has specifically determined shall be considered employees, regardless of common law definitions under the National Labor Relations and Social Security Acts. They are the persons whose coverage by the Fair Labor Standards Act would have been removed by my bill in its original form, which was the basis for the objections to that bill. They will now be covered by the Fair Labor Standards Act, which should remove any serious objection to the bill.

The only persons, if any, who will be removed from coverage by the passage of my bill will be those who have been held to be covered by administrative ruling going beyond the expressed intent of Congress as shown in the National Labor Relations and Social Security Acts.

Passage of my bill will conform the three acts and substitute the certainty of law for the uncertainty of individual judgments, thus preserving freedom of contract between businessmen and permitting businessmen to know with certainty where they stand.

STATEMENT OF HON. J. W. TRIMBLE

Mr. Chairman and members of the committee, I am grateful for the opportunity to make this statement.

It deals with a problem that has arisen under the Fair Labor Standards Act, and involves the outside buyers for plants processing domestic rabbits for meat. The operations of these plants are similar in nearly all respects to the operations of plants engaged in dressing chickens. Dressed rabbits are cut up and packaged by methods similar to those used for chickens, and compete with chickens in the market place for purchase by the housewife.

The act specifically exempts outside buyers of poultry. However, because of the wording of the Fair Labor Standards Act, the Department of Labor has made an interpretation that domestic rabbits are a part of the furbearing animal industry, regardless of whether the primary purpose of such production is for the meat or for the fur. Because of this situation the outside buyers for domestic meat rabbit processors are not exempt from the act. This puts the rabbit processors at a distinct disadvantage as compared to the chicken proc

essors.

From the growing period through marketing of domestic rabbits, the methods, practices, and classifications are very much like those in the poultry industry. I have been advised that the following similarities exist:

1. Farmers raise meat rabbits in large numbers, on a volume basis, as in the case with chickens. The rabbits are fed a commercial feed, financing plans are available, and the feed dealers furnish a serviceman as is done for growers of chickens.

2. When the rabbits are ready for market a buyer from the processing plant makes the purchase, the rabbits are caught in the pens, cooped, and weighed in in a manner corresponding to that used for chickens.

3. At the processing plant the methods for handling and dressing the rabbits are very much like those used for chickens, and the grading and inspection by the United States Department of Agriculture is done by an inspector trained in the grading of poultry.

4. The rates charged by common carriers and refrigerated warehouses are the same, in most instances, for rabbits as for poultry.

5. The Armed Forces consider rabbits along with poultry, and have for several years bought rabbits as a substitute item for chickens and turkeys. 6. Rabbits have been classed with poultry by the various price-control agencies for the purpose of regulating prices.

While there is a difference between rabbits and poultry, it can readily be seen that in the case of domestic rabbits grown for meat, there is a great similarity, and I believe that outside buyers for meat rabbit processors should come under the same classification as outside buyers for poultry plants.

It is my understanding that some chicken processing plants also dress rabbits, and the same outside buyer for the plant purchases both the chickens and the rabbits. Because the plant is primarily engaged in the business of processing chickens this buyer is exempt from the act. But a buyer for a plant engaged solely in the processing of rabbits comes under the act. This seems unfair to me. The outside buyers for both plants should be in the same classification. and I would suggest an amendment to the Fair Labor Standards Act to accomplish this. I hope this honorable committee will find such a proposal to be justified.

Thank you so much for the privilege of presenting this problem to you.

LYNCHBURG, VA., May 14, 1956.

Hon. PAUL H. DOUGLAS,

Chairman, Subcommittee on Labor,

Committee on Labor and Public Welfare,

United States Senate, Washington, D. C.

DEAR SENATOR DOUGLAS: I appeared before your subcommittee on April 29, 1955, advocating: (1) the common-law definition of the word "employee" for the purposes of the Fair Labor Standards Act, and (2) continuation of the exemption for employers of not more than 12 employees in forestry operations. My statement on that occasion is recorded at pages 823-826 and at page 830 in the record of the hearings.

78155-56-39

These two matters continue to be of primary importance to many small-business men and deserve your most careful consideration. If no further opportunity is to be given to small-business men to appear in the current hearings, it is trusted that the statements made by me and by others last year will be fully reviewed and considered before any action is taken at this time.

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DEAR SENATOR DOUGLAS: I am advised that hearings are to be held on May 16, in Washington, regarding the Fair Labor Standards Act, and this letter is sent to you as a reminder that the position I took in my testimony April 29, 1955, at the hearings in Washington on the same matter, I still definitely maintain. In particular I wish to reaffirm my position regarding the need for a positive definition of the relation between employee and employer. At present, in all truth, we do not know, under the Fair Labor Standards Act, just who is an employee and who is an employer. As a result, we have confusion and uncertainty in the understanding and application of the act. If your committee could clear up this particular matter, I would be very appreciative.

Yours very truly,

RUSSELL WATSON.

PRENTISS & CARLISLE CO., INC.,
Bangor, Maine, May 11, 1956.

Senator PAUL H. DOUGLAS,

Chairman, Subcommittee on Labor,

United States Senate, Washington, D. C.

DEAR SENATOR DOUGLAS: In a recent news release from your office, I noted your comments concerning minimum-wage-legislation hearings as they related to the Subcommittee on Labor.

Last year, at about this time, I appeared before your committee and spoke of the importance of the season exemption (as regards hours) to the lumbering and pulpwood industry here in this part of the country.

The picture, of course, has not changed. We still have our ice and snow, spring freshets, and sap-peeling season.

At the time of my appearance last year (which was on a Friday), Senator Goldwater was the only member of your committee present, but I was assured that my comments would become a part of the official record.

I trust your committee will seriously consider the importance, to both labor and industry, of the continued need and justification for this seasonal exemption. Very truly yours,

GEORGE D. CARLYLE.

CHATTAHOOCHEE TIMBER SALES, INC.,
Columbus, Ga., May 14, 1956.

Hon. PAUL DOUGLAS,

Chairman, Labor Subcommittee,

Senate Labor and Public Welfare Committee,

Washington, D. C.

DEAR SENATOR DOUGLAS: Last year I presented a statement before your subcommittee defending the 12-man exemption and the common-law definition of "employee" and that statement appears on pages 814-818 of the testimony. At that time, the Congress of the United States saw fit to preserve these two portions of the law.

I now understand that on Wednesday, May 16, you will start hearing additional testimony on extension of coverage of the Wage and Hour Act. I would be willing to testify again before your subcommittee, but hope that this letter will suffice to state that my opinions in this regard have not changed in that

past year. I have the greatest hope that the subcommittee will recommend passage of S. 1437 covering "employee" and that the Congress will follow that recommendation.

Respectfully yours,

Hon. PAUL H. DOUGLAS,

Chairman, Subcommittee on Labor of the Senate
Committee on Labor and Public Welfare,

Senate Office Building, Washington, D. C.

PEYTON D. BRECKENRIDGE.

CAPE FEAR WOOD CORP., Conway, S. C., May 10, 1956.

DEAR SENATOR DOUGLAS: It was my privilege to appear before the committee on April 29, 1955. In my testimony which appeared on pages 818-20 of the transcript, I strongly urged the Congress to incorporate in the Fair Labor Standards Act, the common-law definition "employee" as it is now contained in the National Labor Relations and Social Security Acts. I also testified as to the effect the repeal of the exemption now allowed to all forestry operators would have on my business.

The reason for my position on these matters are set forth in detail in that statment. The conditions are the same now as they were then, and I earnestly request that in the deliberation of your committee, you again review that testimony and retain the "small forest exemption," section 13 (a 15 of the act), and incorporate the common-law definition of "employee" in the law. Yours very truly,

Hon. PAUL DOUGLAS,

CAPE FEAR WOOD CORP.,
M. CARR GIBSON, President.

HARRIS-WILCOX TIMBER CO., INC.,
Laurel, Miss., May 14, 1956.

Chairman, Senate Labor Subcommittee,

United States Senate, Washington, D. C.

DEAR SENATOR DOUGLAS: On April 29, 1955, it was my pleasure to appear before your subcommittee relative to wage and hour legislation. My testimony appears on pages 820-23 of the recorded transcript of your committees hearing on April 29, 1955.

Knowing that your committee is desirous of obtaining all possible factual information on the subject, I respectfully refer your attention to the abovementioned testimony. The points brought out in this testimony are the same today as when given a year ago. It is sincerely hoped your committee, and the Congress, in drafting any new legislation along this line, will not abolish the exemption presently afforded small forestry activity, and that your committee and the Congress will amend the definition of "employee" in the Fair Labor Standards Act to conform to the common-law rules as now found in the Labor Relations and Social Security Acts.

I trust you will accept this letter for the record as a supplement to my previous testimony and as a means of bringing that testimony up to date. Respectfully submitted,

Senator LISTER HILL,

R. D. WILCOX.

H. F. PELPHREY & SON,
Rogers, Ark., May 21, 1956.

Chairman, Committee on Labor and Public Welfare,
United States Senate, Washington, D. C.

DEAR SIR: As a member of the domestic ranch raised rabbit industry, we petition your committee to amend the Fair Labor Standards Act of 1938, section 13 (b) (5), to read "any individual employed as an outside buyer of domestic ranch raised rabbits, poultry, eggs, cream or milk in their raw or natural state." In the growth of the use of domestic rabbits in the American meat economy, marketing practice for over 40 years has included "rabbits" with other types of poultry. This has been done for the following reasons:

1. Production of domestic rabbits and poultry is similar.

2. Buying is comparable as to methods and equipment.

3. Processing is done on the same type lines in the same plants.

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