UNITED STATES OF AMERICA GENERAL SECTION 790.1. INTRODUCTORY STATEMENT (a) The Portal-to-Portal Act of 1947 was approved May 14, 1947.1 It contains provisions which, in certain circumstances, affect the rights and liabilities of employees and employers with regard to alleged underpayments of minimum or overtime wages under the provisions of the Fair Labor Standards Act of 1938,2 the Walsh-Healey Public Contracts Act, and the Bacon-Davis Act. The Portal Act also establishes time limitations for the bringing of certain actions under these three acts, limits the jurisdiction of the courts with respect to certain claims, and in other respects affects employee suits and proceedings under these acts. (b) It is the purpose of this bulletin to outline and explain the major provisions of the Portal Act as they affect the application to employers and employees of the provisions of the Fair Labor Standards Act. The effect of the Portal Act in relation to the Walsh-Healey Act and the Bacon-Davis Act is not within the scope of this bulletin, and is not discussed herein. Many of the provisions of the Portal Act do not apply to claims or liabilities arising out of activities engaged in after the enactment of the act. These provisions are not discussed at length herein, because the primary purpose of this bulletin is to indicate the effect of the Portal Act upon the future administration and enforcement of the Fair Labor Standards Act, with which the Administrator of the Wage and Hour Division is charged under the law. The discussion of the Portal Act in this bulletin is therefore directed principally to those provisions that have to do with the application of the Fair Labor Standards Act on or after May 14, 1947. 3 (c) The correctness of an interpretation of the Portal Act, like the correctness of an interpretation of the Fair Labor Standards Act, can be determined finally and authoritatively only by the courts. It is necessary, however, for the Administrator to reach informed conclusions as to the meaning of the law in order to enable him to carry out his statutory duties of administration and enforcement. It would 1 An act to relieve employers from certain liabilities and punishments under the Fair Labor Standards Act of 1938, as amended, the Walsh-Healey Act, and the Bacon-Davis Act, and for other purposes. Public Law No. 49, 80th Cong., ch. 52, 1st sess. For the sake of brevity, this act is referred to in the following discussion as the Portal Act. 252 Stat. 1060; 29 U. S. C. 201 et seq. In the Fair Labor Standards Act, the Congress exercised its power over interstate commerce to establish basic standards with respect to minimum and overtime wages and to bar from interstate commerce goods in the production of which these standards were not observed. For the nature of liabilities under this act, see footnote 17. Secs. 790.23 through 790.29 of this bulletin discuss briefly those provisions of the Portal Act which affect the operation or enforcement of the Fair Labor Standards Act only with respect to activities engaged in by employees before May 14, 1947. Since the so-called "good-faith defense" against past claims is considered incidentally in the discussion of the similar provisions for the future, no separate discussion of this provision is included in these sections. 1 5 seem desirable also that he make these conclusions known to persons affected by the law. Accordingly, as in the case of the interpretative bulletins previously issued on various provisions of the Fair Labor Standards Act, the interpretations set forth herein are intended to indicate the construction of the law which the Administrator believes to be correct and which will guide him in the performance of his administrative duties under the Fair Labor Standards Act, unless and until he is directed otherwise by authoritative rulings of the courts or concludes, upon reexamination of an interpretation, that it is incorrect. As the Supreme Court has pointed out, such interpretations provide a practical guide to employers and employees as to how the office representing the public interest in enforcement of the law will seek to apply it. As has been the case in the past with respect to other interpretative bulletins, the Administrator will receive and consider statements suggesting change of any interpretation contained herein. SECTION 790.2. INTERRELATIONSHIP OF THE TWO ACTS (a) The effect on the Fair Labor Standards Act of the various provisions of the Portal Act must necessarily be determined by viewing the two acts as interrelated parts of the entire statutory scheme for the establishment of basic fair labor standards. The Portal Act contemplates that employers will be relieved, in certain circumstances, from liabilities or punishments to which they might otherwise be subject under the Fair Labor Standards Act. But the act makes no express change in the national policy, declared by Congress in section 2 of the Fair Labor Standards Act, of eliminating labor conditions "detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." The legislative history indicates that the Portal Act was not intended to change this general policy. The Congressional declaration of policy See Skidmore v. Swift & Co., 323 U. S. 134; Kirschbaum Co. v. Walling, 316 U. S. 517; Portal-to-Portal Act, sec. 10. and The interpretations expressed herein are based on studies of the intent, purpose, interrelationship of the Fair Labor Standards Act and the Portal Act as evidenced by their language and legislative history, as well as on decisions of the courts establishing legal principles believed to be applicable in interpreting the two acts. These interpretations have been adopted by the Administrator after due consideration of relevant knowledge and experience gained in the administration of the Fair Labor Standards Act of 1938 and after consultation with the Solicitor of Labor. Skidmore v. Swift & Co., 323 U. S. 134. See also Roland Electrical Co. v. Walling, 326 U. S. 657; United States v. American Trucking Assn., 310 U. S. 534; Overnight Motor Transp. Co. v. Missel, 316 U. S. 572. As appears more fully in the following sections of this bulletin. the several provisions of the Portal Act relate, in pertinent part, to actions, causes of action, liabilities, or punishments based on the nonpayment by employers to their employees of minimum or overtime wages under the provisions of the Fair Labor Standards Act. Sec. 13 of the Portal Act provides that the terms "employer," "employee," and "wage," when used in the Portal Act, in relation to the Fair Labor Standards Act, have the same meaning as when used in the latter act. 8 Portal Act, secs. 1, 2, 4, 6, 9, 10, 11, 12. Sponsors of the legislation asserted that the provisions of the Portal Act do not deprive any person of a contract right or other right which he may have under the common law or under a State statute. See colloquy between Senators Donnell, Hatch, and Ferguson, 1947 Cong. Rec. 2168; colloquy between Senators Donnell and Ferguson, 1947 Cong. Rec. 2198; statement of Representative Gwynne, 1947 Cong. Rec. 1614. See references to this policy at p. 5 of the Senate Committee Report on the bill_(S. Rept. 48, 80th Cong., 1st sess.), and in statement of Senator Donnell, 1947 Cong. Rec. 2251; see also statement of Senator Morse, 1947 Cong. Rec. 2349; statement of Representative Walter, 1947 Cong. Rec. 4514. in section 1 of the Portal Act is explicitly directed to the meeting of the existing emergency and the correction, both retroactively and prospectively, of existing evils referred to therein.10 Sponsors of the legislation in both Houses of Congress asserted that it "in no way repeals the minimum wage requirements and the overtime compensation requirements of the Fair Labor Standards Act," 11 that it "protects the legitimate claims" under that act,12 and that one of the objectives of the sponsors was to "preserve to the worker the rights he has gained under the Fair Labor Standards Act." 13 It would therefore appear that the Congress did not intend by the Portal Act to change the general rule that the remedial provisions of the Fair Labor Standards Act are to be given a liberal interpretation 1 and exemptions therefrom are to be narrowly construed and limited to those who can meet the burden of showing that they come "plainly and unmistakably within [the] terms and spirit" of such an exemption.15 14 (b) It is clear from the legislative history of the Portal Act that the major provisions of the Fair Labor Standards Act remain in full force and effect, although the application of some of them is affected in certain respects by the 1947 act. The provisions of the Portal Act do not directly affect the provisions of section 15 (a) (1) of the Fair Labor Standards Act banning shipments in interstate commerce of "hot" goods produced by employees not paid in accordance with the act's requirements, or the provisions of section 11 (c) requiring employers to keep records in accordance with the regulations prescribed by the Administrator. The Portal Act does not affect in any way the provision in section 15 (a) (3) banning discrimination against employees who assert their rights under the Fair Labor Standards Act, or the provisions of section 12 (a) of the act banning from interstate commerce goods produced in establishments in or about which oppressive child labor is employed. The effect of the Portal Act in relation to the minimum and overtime wage requirements of the Fair Labor Standards Act is considered herein in connection with the discussion of specific provisions of the 1947 act. 10 Cf. H. Rept. No. 71; S. Rept. No. 48; H. (Conf.) Rept. No. 326, 80th Cong., 1st sess. (referred to hereafter as House Report, Senate Report, and Conference Report); statement of Representative Michener, 1947 Cong. Rec. 4516; statement of Senator Wiley, 1947 Cong. Rec. 4398; statement of Representative Gwynne, 1947 Cong. Rec. 1629; statements of Senator Donnell, 1947 Cong. Rec. 2204-2206, 2251-2252; statement of Representative Robsion, 1947 Cong. Rec. 1553; Message of the President to Congress, May 14, 1947, on approval of the act. iStatements of Senator Wiley, explaining the conference agreement to the Senate, 1947 Cong. Rec. 4398 and 4501. See also statement of Senator Cooper, 1947 Cong. Rec. 2373; statement of Representative Robsion, 1947 Cong. Rec. 1553. 12 Statement of Representative Michener, explaining the conference agreement to the House of Representatives, 1947 Cong. Rec. 4516. See also statement of Representative Keating, 1947 Cong. Rec. 1566. See also statements of Senator 13 Statement of Senator Cooper, 1947 Cong. Rec. 2378. Donnell, 1947 Cong. Rec. 2439. 2440, 2442; statements of Representatives Walter and Robsion, 1947 Cong. Rec. 1550, 1552. 14 Roland Electrical Co. v. Walling, 326 U. S. 657; United States v. Rosenwasser, 323 U. S. 360; Brooklyn Savings Bank v. O'Neil, 324 U. S. 697. 15 See A. H. Phillips Co. v. Walling, 324 U. S. 490; Walling v, General Industries Co., 330 U. S. 545. PROVISIONS RELATING TO CERTAIN ACTIVITIES SECTION 790.3. PROVISIONS OF THE STATUTE Section 4 of the Portal Act, which relates to so-called "portal-toportal" activities engaged in by employees on or after May 14, 1947, provides as follows: * * * (a) Except as provided in subsection (b), no employer shall be subject to any liability or punishment under the Fair Labor Standards Act of 1938, as amended, on account of the failure of such employer to pay an employee minimum wages, or to pay an employee overtime compensation, for or on account of any of the following activities of such employee engaged in on or after the date of the enactment of this act (1) walking, riding, or traveling to and from the actual place of performance of the principal activity or activities which such employee is employed to perform, and (2) activities which are preliminary to or postliminary to said principal activity or activities, which occur either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities. (b) Notwithstanding the provisions of subsection (a) which relieve an employer from liability and punishment with respect to an activity, the employer shall not be so relieved if such activity is compensable by either (1) an express provision of a written or nonwritten contract in effect, at the time of such activity, between such employee, his agent, or collectivebargaining representative and his employer; or (2) a custom or practice in effect, at the time of such activity, at the establishment or other place where such employee is employed, covering such activity, not inconsistent with a written or nonwritten contract, in effect at the time of such activity, between such employee, his agent, or collective-bargaining representative and his employer. (c) For the purpose of subsection (b), an activity shall be considered as compensable under such contract provision or such custom or practice only when it is engaged in during the portion of the day with respect to which it is so made compensable. (d) In the application of the minimum-wage and overtime-compensation provisions of the Fair Labor Standards Act of 1938, as amended, in determining the time for which an employer employs an employee with respect to walking, riding, traveling, or other preliminary or postliminary activities described in subsection (a) of this section, there shall be counted all that time, but only that time, during which the employee engages in any such activity which is compensable within the meaning of subsections (b) and (c) of this section. SECTION 790.4. LIABILITY OF EMPLOYER; EFFECT OF CONTRACT, CUSTOM, (a) Section 4 of the Portal Act, quoted above, applies to situations where an employee, on or after May 14, 1947, has engaged in activities of the kind described in this section and has not been paid for or on account of these activities in accordance with the statutory standards established by the Fair Labor Standards Act.16 Where, in these cir 10 The Fair Labor Standards Act requires payment of a minimum wage of not less than 40 cents an hour for all hours worked (except to certain learners, apprentices, handicapped workers, and messengers, and in certain industries in Puerto Rico and the Virgin Islands), and overtime compensation for all hours worked in excess of 40 in a workweek at a rate not less than one and one-half times the employee's regular rate of pay. |