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Mr. VICTORY. A voluntary understanding.
Dr. LEWIS. Oh, yes; it affects the mechanics. That is the group we are trying mostly to preserve.
Mr. COLE. Well, they are not experimenters in any sense?
Dr. Lewis. Oh, they are. You get a mechanic who has developed a technique of model making, for instance—the model making they do at Langley Field is far advanced. It is not the ordinary model making in the strict sense, and it is very difficult to develop that type of workman.
Mr. COLE. As I read this bill, it would permit you to pay time and a half for overtime work that has been done since September 8, 1939.
Mr. VICTORY. No, sir.
The CHAIRMAN. Oh, no; that is the date of the Executive order. There is no retroactive overtime pay at all.
Mr. COLE. I do not see anything in the bill that prohibits it.
The CHAIRMAN. It does not go into effect until it is passed. That merely says:
The provisions of this act shall be effective during the national emergency declared by the President on September 8, 1939, to exist, and shall terminate June 30, 1943, unless the Congress shall otherwise provide.
I do not interpret section 2 to mean it shall be retroactive, and of course they have not been keeping tabs on the overtime work. It only applies from now on. Am I correct in that?
Mr. VICTORY. You are correct.
Mr. COLE. Well, you could settle that by saying that "Nothing in this act shall be construed to be retroactive."
Mr. VICTORY. I may say this, Mr. Chairman, that this bill was very carefully studied by the Bureau of the Budget, and we will operate under an Executive order to be prepared by the Bureau of the Budget.
The CHAIRMAN. This reads "The provisions of this act shall be effective” now, “effective" means "retroactive"__"shall be effective during the national emergency declared by the President on September 8, 1939
I believe Mr. Cole is correct; I believe it could be fixed up in the Executive order to say that the effective date for time-and-a-half overtime shall commence for all of those employees who, since September 8, 1939, have worked over 40 hours a week.
Mr. VICTORY. Granted that might be done, I would give you a commitment from our committee that we would never seek it and the Bureau of the Budget, I feel sure, would not permit it.
Mr. COLE. But the employees might sue you and get it in the Court of Claims.
The CHAIRMAN. We had just better put it in the law.
Mr. COLE. I suggest on the first page, line 6, after the word “paid" we insert the word “hereafter”; then there will be no question.
The CHAIRMAN. Yes; that would cover it.
Dr. LEWIS. My immediate superiors are the National Advisory Committee for Aeronautics, 15 members appointed by the President. My immediate superior is the chairman of the committee, Dr. J. C. Hunsaker.
Mr. Izac. Do you come directly under them?
Mr. Izac. And this is similar to the Moffett Field Laboratory of Research?
Dr. LEWIS. We have a laboratory at Langley Field we are operating, and our continuing to construct the laboratory at Moffett Field, Calif., and are starting an engine research laboratory, authorized last year, at Cleveland, Ohio.
The CHAIRMAN. Are there any further questions? If not, the bill will be favorably reported and I will ask Mr. Heffernan, of New York, to report the bill and put it on the Consent Calendar, and to file with it a letter from Dr. J. C. Hunsaker, to be printed in the record.
Thank you very much, Dr. Lewis and Mr. Victory.
November 27, 1941. The SPEAKER OF THE HOUSE OF REPRESENTATIVES,
Washington, D. C. SIR: Attached hereto is a draft of legislation (enclosure A) extending to the National Advisory Committee for Aeronauties provisions of law applicable to other agencies of the Government authorizing time-and-a-half pay for overtime, under such regulations as the President may prescribe, for those employees in the field service whose overtime services are essential to the national defense program and whose duties are determined by the President to be comparable to the duties of those employees of the War Department, the Navy Department, and the Coast Guard for whom overtime compensation is authorized under existing law and regulations.
The committee has given considerable study to the plan as a measure to enable it to meet its responsibilities in the present emergency, and has come to the conclusion that the enactment of this legislation is necessary and advantageous to the Government.
The impact of the aircraft program upon the Committee has .confronted it with the imperative need for more speed in the study of the numerous and increasingly difficult technical problems presented by the Army and the Navy in connection with their need constantly to improve the performance of American aircraft to the highest degree attainable. The Committee's recommendations for improvement in aircraft must be made in time for incorporation in new designs before they go into production. This involves not only an increased force, which has been authorized, but also the extension of working hours of present personnel, in order immediately to increase their productivity and in order to retain them in the face of higher earning opportunities in navy yards and private industries, chiefly resulting from overtime pay.
A substantial proportion of the additional man-hours needed can be obtained by lengthening the working hours of the present staff. This would obviate a serious delay in recruiting and training an equivalent number of new personnel and would give the Committee the benefit of additional services of the best qualified personnel.
The Committee is confronted with a situation that, for another important reason, calls for prompt and effective action. It has lost many of its personnel, and is faced with the certainty of larger losses unless it either materially raises salaries or makes larger earnings possible through overtime work. The Committee supports the overtime plan because it serves the Government's interests better by meeting the needs for more earnings without permanently increasing the rates of pay, and because it has the advantage over straight salary increases of giving the Government badly needed additional services for the additional pay.
The Committee proposes to increase working hours from 39 to 48 per week, and occasionally to work longer hours as the public interest requires. It recommends the enactment of legislation to authorize the payment of time and a half for all hours over 40 per week.
In addition to other advantages, the economics of the proposal are also in the Government's favor for the hourly overtime rate paid to per annum employees (and the Committee's personnel are all per annum employees) is actually less than the Government is already paying for the same services. Under the over
time plan proposed, the Government actually receives additional services at approximately 10.4 percent less per hour than it is paying at present for the same services. This apparently contradictory statement is clearly explained in the attached memorandum, marked “Enclosure B.” A summary of the advantages of the overtime plan in meeting the greatly expanded work load of the Committee is attached, marked "Enclosure C."
Because of the many advantages of the overtime plan to the Government, and the great need for increasing immediately the output of its laboratories, the Committee recommends approval of such legialation at the earliest possible date. The Bureau of the Budget has advised the Committee that there is no objection to the submission of the proposed legislation. Respectfully,
NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS,
THE EFFECT OF PAYING TIME AND A HALF FOR OVERTIME TO A PER ANNUM EMPLOYEE
OF THE NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS Assume a mechanic at $1,800 per year, working 572 days per week, or a total of 39 hours a week, will be required to work 6 days of 8 hours each per week, or a total of 48 hours per week, and will be paid time and a half for hours over 40 per week:
At $1,800 per year, the official daily rate of pay is one three hundred and sixtieth of $1,800, or $5. The time-and-a-half-rate will be $7.50 per day.
He works 365 days a year minus 52 Sundays, 52 Saturdays, 26 days of annual leave, and 7 holidays, or 228 days of 7 hours each, or 1,596 hours, plus 52 Saturdays of 4 hours each, or 208 hours, for a total of 1,804 hours a year. At $1,800 per annum he is paid for the service actually rendered to the Government 99.8 cents per hour.
Under the 48-hour-per-week plan he will work the same 228 days plus 52 Saturdays, or 280 days of 8 hours each, or 2,240 hours per annum. Assuming he works every Saturday at the overtime rate, there will be added to his $1,800 salary, pay for 52 Saturdays at $7.50 or $390, making his total annual income $2,190. Divide this by 2,240 hours and it is found that his hourly pay, working 48 hours per week, will average 97.7 cents per hour.
Subtract his present working hours, 1,804, from the 2,240 he will work and it is found that he will render the Government 1436 additional hours of service, for which he will receive 390 additional dollars, or compensation at an average rate of 89.4 cents per hour for these 436 additional hours, or 10.4 cents per hour less than he is now actually paid for his regular services. A summary comparison follows:
It is interesting to note that the Government, needing to buy additional service, can in this manner get the best experienced and qualified service, to the extent of 436 hours per man per year, at a rate that is actually 10.4 percent less than the present rate per hour the Government is now paying for the same services, and this, despite the fact that the Government will be paying time and a half for 8 hours over 40 per week.
This consideration makes the plan doubly attractive, for it justifies the Government in permitting an individual employee to earn a higher gross income; assists the Government to retain his services in the face of larger earning opportunities offered in industry, without permanently increasing his rate of pay; and enables the Government to procure badly needed additional services of men with the best experience and qualifications at a rate per hour of service rendered 10.4 percent less than is now actually paid.
The apparent inconsistency is largely due to the fact that the daily rate of pay on which overtime is figured is based on the Government formula that such employee is paid for 360 days a year, or at a rate of $5 a day, which is a low base rate on which to compute the time and a half. Under this concept his hourly base rate is one-eighth of $5, or 6242 cents an hour, so that for each hour over 40 per week that he may work he would actually receive one and one-half times 6242 cents or 93%4 cents, which is 6 cents per hour less than the Government is paying him for regular services.
Another factor is that whereas he now works 39 hours per week to earn $1,800 he would work 40 hours per week to receive the same pay.
Expressed in percentages, for increased earnings of 21.6 percent he renders 24.2 percent more hours of service.
SUMMARY OF ADVANTAGES OF THE OVERTIME PLAN IN MEETING THE WORK LOAD
OF THE NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS To meet the work load of the committee, the proposal for extending the work week from 39 to 48 hours per week and adopting a so-called time-and-a-half pay plan has the following important advantages:
1. Additional man-hours of service are provided without recruiting difficulties and without the expense or loss of time in securing and training an equivalent number of qualified personnel for the committee's expansion.
2. The additional man-hours represent the services of a trained group, thoroughly experienced with the committee's methods and equipment. The result is maximum immediate effectiveness.
3. Time-and-a-half pay for overtime work is computed on a per annum basis; as a consequence, the extra man-hours are actually secured at a cost per hour 10.4 percent less than the Government is now paying for the same services.
4. The possibility that the efficiency of personnel may be less on overtime hours has been considered, but it is believed that the extension of a workday to 8 hours, i. e., from 39 to 48 hours per week, as contemplated, does not foster inefficiency. This has been proved by general experience and by the current operation of the committee's Washington office on an 8-hour-per-day basis.
5. The overtime plan has the incidental advantage of supplying the present staff with additional compensation to meet currently rising costs, which is necessary in a very real sense to enable the committee to hold its staff in the face of increased earning opportunities elsewhere. For the increased compensation the Government receives valuable and urgently needed additional effort.
6. The proposal results in increased compensation only as long as the present emergency requires overtime services, and so does not saddle the Government with permanent increases in salaries.
7. The Congress has already given authority of law to the Army and Navy to pay overtime. To operate effectively, it is necessary that the Committee have similar authority of law. The legislation proposed follows the precedents already established.