AMENDING THE FAIR LABOR STANDARDS ACT OF 1938

TUESDAY, MAY 8, 1956

UNITED STATES SENATE,

COMMITTEE ON LABOR AND PUBLIC WELFARE,

SUBCOMMITTEE ON LABOR, Washington, D. C. The subcommittee met, pursuant to notice, at 10:05 a. m., in room P-63, United States Capitol, Senator Paul H. Douglas (chairman) presiding.

Present: Senators Douglas and Kennedy, members of the subcommittee; Senators Lehman and Allott, members of the committee.

Also present: Stewart McClure, staff director; John S. Forsythe, general counsel; Michael Bernstein, minority staff director; Mary DiDio, professional staff member.

Senator DOUGLAS. The hearing will be in order.

The Subcommittee on Labor this morning begins a series of hearings on bills pending before it which would amend the provisions relating to coverage and exemptions under the Fair Labor Standards Act of 1938.

It will be recalled that in the first session of this Congress, the subcommittee held lengthy hearings on minimum-wage legislation. The Congress approved amendments to the Fair Labor Standards Act which increased the minimum wage from 75 cents to $1 per hour, effective March 1, 1956; which tightened the requirements of the Secretary of Labor's report to Congress; and which made a number of changes to accelerate the procedures for minimum-wage determinations in Puerto Rico.

In its report on this legislation to the Senate last year, the committee gave assurance that further hearings would be held on the question of extending the coverage of the act to additional groups of employees. The hearings we are beginning today are fulfillment of that assurance.

I may point out that the 1955 hearings on amendments to the Fair Labor Standards Act lasted from April 14 to May 18. Twenty-one days of hearings were held, frequently both in the morning and afternoon. A rough calculation indicates that testimony was received from more than 225 representatives of Government, labor, industry, consumers and public-welfare organizations. Some of them testified at great length and several of them twice. In addition, we received numerous valuable statements for the record.

The testimony received at that time was printed in 3 volumes which are before us today, and, in considering the legislation this year, the subcommittee will give close attention to the very detailed and complete testimony in these 3 volumes. It is my hope that this year's

hearings will serve mainly to supplement the voluminous evidence secured last year, and that we shall have no need for hearings of the same duration and scope. We are asking that the witnesses at the current hearings avoid, to the maximum extent possible, duplication of testimony already presented in the 1955 hearings and that they give us facts and figures which will bring up to date the situation in their respective industries.

We assure them that these hearings will be studied and will continue to be studied with a view to the question of coverage. And I hope therefore that all witnesses will give us facts and figures which will bring up to date the situation in their respective industries.

I may also say that we have had prepared a staff report on retail establishments under the Fair Labor Standards Act which is now in page proof and available to members of the committee. There will be an appendix following this material.

We think this brings up to date all the available information on wages in the retail industry which can be gathered.

We think it is a very helpful and significant contribution to the facts on this question. The report was made by Dr. Fred H. Blum, who was the consultant to the subcommittee last year.

Dr. Blum will testify later in the week.

There are before the subcommittee 10 bills, on all but 4 of which the subcommittee received lengthy testimony last year. Since those hearings, the following four bills were introduced: S. 2404 by Senator Smith of New Jersey, S. 2748 by Senator Murray, S. 2963 by Senator Payne, and S. 3310 by Senator McNamara.

In planning the hearings, it has been our intention to afford approximately equal time to the proponents and opponents of extended coverage or elimination of exemptions. Today and tomorrow, the majority of witnesses will be representatives from labor organizations, beginning with testimony from the president of the American Federation of Labor-Congress of Industrial Organizations, Mr. George Meany. On Thursday, the Chamber of Commerce of the United States and a number of business organizations appear. We have invited the Secretary of Labor to present the views of his Department at the hearing on Tuesday, May 15. At that time we hope we may have the benefit of specific legislative proposals embodying the legislative recommendations of the administration with respect to extended coverage and exemptions under the act. As of the present time, unfortunately, there is not pending any bill which contains the administration's recommendations in this respect.

I have several times sought to obtain, in advance of these hearings, the recommendations of the Secretary, so that the interested parties could testify thereon, but as of the present moment, I have been unsuccessful in these attempts.

This is true in spite of the fact that in his state of the Union message of January 5 of this year, the President reiterated his request that Congress broaden coverage and pledged active support in reaching this objective. In his message he stated:

We must also carry forward the job of improving the wage-hour law. Last year I requested the Congress to broaden the coverage of minimum wage. I repeat that recommendation and I pledge the full resources of the executive branch to assist the Congress in finding ways to attain this goal.

Senator DOUGLAS. We hope we may have the cooperation of the Department of Labor and the Administration in reaching this goal. (S. 662, S. 770, S. 1127, S. 1288, S. 1437, S. 1447, S. 2404, S. 2748, S. 2963, S. 3310 and agency reports are as follows:)

[S. 662, 84th Cong., 1st sess.]

A BILL To amend the Fair Labor Standards Act of 1938 to establish a $1.25 minimum hourly wage, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. That this Act may be cited as the "Fair Labor Standards Amendments of 1955".

FINDING AND DECLARATION OF POLICY

SEC. 2. Section 2 (a) of the Fair Labor Standards Act of 1938, as amended (hereinafter referred to as the "Act"), is amended to read as follows: "(a) The Congress hereby finds that the existence, in industries engaged in commerce or in the production of goods for commerce or in activities affecting commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers (1) causes commerce and the channels and instrumentalities of commerce to be used to spread and perpetuate such labor conditions among the workers of the several States; (2) burdens and affects commerce and the free flow of goods in commerce; (3) constitutes an unfair method of competition in commerce; (4) leads to labor disputes burdening and obstructing commerce and the free flow of goods in commerce; and (5) interferes with the orderly and fair marketing of goods in commerce."

DEFINITIONS

SEC. 3. (a) Section 3 (j) of the Act is amended by striking out "or in any closely related process or occupation directly essential to the production thereof” and inserting in lieu thereof “or in any process or occupation necessary to the production thereof."

(b) Section 3 (m) of the Act is amended to read as follows:

"(m) Wage' paid to any employee includes the reasonable cost, as determined by the Secretary of Labor (hereinafter referred to as the 'Secretary') to the employer of furnishing such employee with board, lodging, or other facilities, if such board, lodging, or other facilities are customarily furnished by such employer to his employees: Provided, That the cost of board, lodging, or other facilities shall not be included in the wage paid to any employee if the furnishing of such facilities is an incident of and necessary to his employment and such facilities are practicably available only from the employer."

(c) Section 3 of the Act is further amended by striking out subsection (n) and inserting in lieu thereof the following:

"(n) American vessel' includes any vessel which is defined as a 'vessel of the United States' in title 18, United States Code, section 9, or which is documented or numbered under the laws of the United States."

(d) Section 3 of the Act is further amended by adding at the end thereof the following:

“(p) 'Activity affecting commerce' includes any activity in commerce necessary to commerce or competing with any activity in commerce or where the payment of wages at rates below those prescribed by this Act would burden or obstruct or tend to burden or obstruct commerce or the free flow of commerce." SEC. 4. (a) Section 5 (a) of the Act is amended to read as follows: "SEC. 5. (a) The Secretary shall as soon as practicable appoint an industry committee for each industry engaged in commerce or in the production of goods for commerce or in other activities affecting commerce."

(b) Section 5 is further amended by redesignating subsections 5 (b), 5 (c), and 5 (d) as subsections 5 (c), 5 (d), and 5 (e), and by inserting a new subsection (b) to read as follows:

"(b) No industry committee appointed under subsection (a) of this section shall have any power to recommend the minimum rate of wages to be paid under section 6 to any employees in Puerto Rico or in the Virgin Islands. Notwithstanding any other provision of this Act, the Secretary may appoint a special industry committee to recommend the minimum rate or rates of wages to be paid under section 6 to employees in Puerto Rico or the Virgin Islands, or in

Puerto Rico and the Virgin Islands, or the Secretary may appoint separate industry committees to recommend the minimum rate of wages to be paid under sectin 6 to employees therein in particular industries. An industry committee appointed under this subsection shall be composed of residents of such island or islands where the employeees with respect to whom such committee was appointed are employed and residents of the United States outside of Puerto Rico and the Virgin Islands. In determining the minimum rate or rates of wages to be paid, and in determining classifications, such industry committees and the Secretary shall be subject to the provisions of section 8."

MINIMUM WAGES

SEC. 5. (a) Section 6 of such Act is amended to read as follows:

"SEC. 6. (a) Every employer shall pay to each of his employees who is engaged in commerce or in the production of goods for commerce, and every employer who is engaged in any activity affecting commerce shall pay to each of his employees employed in or about or in connection with any enterprise where he is so engaged, wages at the following rates-

"(1) not less than $1.25 an hour or such higher rate as may be prescribed in the applicable order of the Secretary under section 8, or

"(2) if such employee is employed in Puerto Rico or the Virgin Islands not less than:

80 cents an hour during the first year from the effective date of this section;

85 cents an hour during the second year from the effective date of this section;

90 cents an hour during the third year from the effective date of this section;

95 cents an hour during the fourth year from the effective date of this section;

$1 an hour during the fifth year from the effective date of this section; $1.05 an hour during the sixth year from the effective date of this section, and thereafter;

or the rate or rates prescribed for employees in Puerto Rico or the Virgin Islands in the applicable order of the Secretary under sections 5 and 8, which shall not be less than the applicable rate provided by this paragraph or in excess of $1.25 an hour;

"(3) if such employee is a homeworker in Puerto Rico or the Virgin Islands, not less than the minimum piece rate prescribed by regulation or order; or, if no such minimum piece rate is in effect, any piece rate adopted by such employer which shall yield, to the proportion or class of employees prescribed by regulation or order, not less than the applicable minimum hourly wage rate. Such minimum piece rates or employer piece rates shall be commensurate with, and shall be paid in lieu of, the minimum hourly wage rate applicable under the provisions of this section. The Secretary, or his authorized representative, shall have power to make such regulations or orders as are necessary or appropriate to carry out any of the provisions of this paragraph, including the power without limiting the generality of the foregoing, to define any operation or occupation which is performed by such homework employees in Puerto Rico or the Virgin Islands; to establish minimum piece rates for any operation or occupation so defined; to prescribe the method and procedure for ascertaining and promulgating minimum piece rates; to prescribe standards for employer piece rates; including the proportion or class of employees who shall receive not less than the minimum hourly wage rate; to define the term 'homeworker'; and to prescribe the conditions under which employers, agents, contractors, and subcontractors shall cause goods to be produced by homeworkers; or

"(4) if such employee is employed as a seaman on an American vessel, not less than the rate which will provide to the employee, for the period covered by the wage payment, wages equal to compensation at the minimum hourly rate prescribed by paragraph (1) of this subsection for all hours during such period when he was actually on duty (not including off-duty periods aboard ship when the employee rendered no service)."

MAXIMUM HOURS

SEC. 6. (a) Section 7 (a) of such Act is amended to read as follows: "(a) Except as otherwise provided in this section, no employer shall employ any of his employees who is engaged in commerce or in the production of goods for commerce, and no employer who is engaged in any activity affecting commerce shall employ any of his employees employed in or about or in connection with any enterprise where he is so engaged, for a workweek longer than forty hours, or a workday longer than eight hours, unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." (b) Section 7 (b) of such Act is amended to read as follows:

"(b) No employer shall be deemed to have violated subsection (a) by employing any employee for a workweek or workday in excess of that specified in such subsection without paying the compensation for overtime employment prescribed therein if such employees receives compensation for employment in excess of ten hours in any workday, or for employment in excess of forty-eight hours in any workweek, as the case may be, at a rate not less than one and one-half times the regular rate at which he is employed, and if such employee is so employed in pursuance of an agreement, made as a result of collective bargaining by representatives of employees certified as bona fide by the National Labor Relations Board, which provides that during a specified period of fifty-two consecutive weeks, the employee shall be employed not more than two thousand two hundred and forty hours and shall be guaranteed not less than one thousand eight hundred and forty hours (or not less than forty-six weeks at the normal number of hours worked per week, but not less than thirty hours per week) and not more than two thousand and eighty hours of employment for which he shall receive compensation for all hours guaranteed or worked at rates not less than those applicable under the agreement to the work performed: Provided, That if such employee is employed in excess of the guaranty, the employee shall receive compensation for all hours which are also in excess of forty hours in a workweek, or in excess of eight hours in a workday in such period at rates not less than one and one-half times the regular rate at which he is employed."

(c) Subsection (c) of section 7 of such Act is hereby repealed.

(d) Subsection (d) of section 7 of such Act is hereby redesignated subsection (c) and paragraph (3) thereof is amended to read as follows:

"(3) The payments of talent fees (as such talent fees are defined and delimited by regulations of the Secretary) paid to performers, including announcers, on radio and television programs;".

(e) Subsection (e) of section 7 of such Act is hereby repealed.

(f) Subsection (f) of section 7 of such Act is hereby redesignated subsection 7 (d); paragraph (3) thereof is hereby repealed; and the reference to subsection (d) therein is redesignated subsection (c).

(g) Subsection (g) of section 7 of such Act is redesignated subsection 7 (e) and the reference to subsection (d) contained therein is hereby redesignated subsection (c).

WAGE ORDERS

SEC. 7. (a) Subsection (a) of section 8 of such Act is amended to read as follows:

"(a) With a view to carrying out the policy of this Act by reaching as rapidly as economicallly feasible without substantially curtailing employment, the objective of a universal minimum wage of $1.50 an hour in each industry engaged in commerce or in the production of goods for commerce or in activities affecting commerce, the Secretary shall from time to time convene an industry committee or committees appointed pursuant to section 5, and the industry committee shall from time to time recommend the minimum rate or rates to be paid under section 6 which rate may not be less than $1.25 nor more than $1.50 by employers engaged in commerce or in the production of goods for commerce or in activities affecting commerce in such industry or classification thereof: Provided, That the rates applicable to Puerto Rico and the Virgin Islands shall conform to the rates as set forth in section 6 (a) (2).”

(b) Subsection (c) of section 8 is amended to read as follows:

"(c) The industry committee shall recommend such reasonable classifications within any industry as it determines to be necessary for the purpose of fixing for each classification within such industry the highest minimum wage rate (not in excess of $1.50 or for Puerto Rico and the Virgin Islands not in excess of $1.25), which (1) will not substantially curtail employment in such classification, and