Mr. Miller? Mr. MILLER. I am Benjamin R. Miller. Mr. REDDING. Redding is my name, Mr. Chairman. Mr. HOSEA. I am Harold Hosea. Mr. ROOSEVELT. All right, Mr. Miller, do you want to lead off? STATEMENT OF PANEL: BENJAMIN R. MILLER, DIRECTOR OF INDUSTRIAL RELATIONS, AMERICAN TRUCKING ASSOCIATIONS; HAROLD R. HOSEA, DIRECTOR OF RESEARCH AND STATISTICS, NATIONAL ASSOCIATION OF MOTOR BUS OWNERS; AND ROBERT E. REDDING, VICE PRESIDENT AND GENERAL COUNSEL, TRANSPORTATION ASSOCIATION OF AMERICA Mr. ROOSEVELT. Mr. Miller, you have the floor. STATEMENT OF BENJAMIN R. MILLER, DIRECTOR, INDUSTRIAL RELATIONS This statement is made in behalf of American Trucking Associations, Inc., the national trade association of the trucking industry, representing all types of motor carriers, both for-hire and private, and having affiliated associations in 49 States and the District of Columbia. Our offices are located at 1616 P Street NW., Washington, D.C. The trucking industry is opposed to section 304 of H.R. 9824. That section, if enacted, would amend section 13 (b) (1) of the Fair Labor Standards Act so as to reduce substantially the present Motor Carrier Act exemption from its overtime provisions-an exemption for which the Congress has recognized a need since the birth of the act in 1938. In brief, the Motor Carrier Act exemption is an extremely narrow one. It relates solely to the overtime provisions of the Fair Labor Standards Act and is only a partial one at that. The exemption applies only to four specific job classifications in the trucking industry. We are not, as is trucking's chief competitor, the railroad industry, completely exempt from the overtime provisions of the act. Furthermore, we do not ask such an exemption. Neither is the trucking industry exempt from the minimum wage provisions of the act. Nor do we plead for such an exemption. Employee earnings in our industry are among the highest in the country and far exceed the minimum wage required by law. Our only plea is that this considerably limited and now well-defined overtime exemption afforded four basic employee classifications in trucking be maintained. Section 13 (b) (1) of the Fair Labor Standards Act, as it is today, provides an exemption from the act's overtime provisions for "any employee with respect to whom the Interstate Commerce Commission has power to establish qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act of 1935." That act provides that it shall be the duty of the Interstate Commerce Commission to regulate carriers by motor vehicle and "to that end the Commission may establish reasonable requirements with respect to *** qualifications and maximum hours of service of employees, and safety of operation and equipment." [Emphasis supplied.] As determined by a series of ICC and court decisions, the exemption is applicable only to those employees whose job duties center on activities in a class of work defined as that of a driver, driver's helper, loader or mechanic, and then, only if their work directly affects the safety of operation of motor vehicles on the public highways in transportation in interstate or foreign commerce within the meaning of the Motor Carrier Act.1 It is the present limited exemption which H.R. 9824 would needlessly and unjustifiably reduce still further. It is the position of the trucking industry not only that the proposed amendment is without justification but that absolutely no one would be benefited by its passage. 1 See Yyramid Motor Freight Corp. v. Ispass (330 U.S. 695); Levinson v. Spector Motor Co. (330 U.S. 649); Morris v. McComb (332 U.S. 422). The necessity, to motor carriers, for retaining the present exemption in section 13(b) (1) and for continuing the authority of the Interstate Commerce Commission over qualifications and hours of service for certain trucking employees has not lessened in all the 29 years in which the ICC has had such jurisdiction, and the 26 years in which the Fair Labor Standards Act has been in effect. The trucking industry's position as to why the Motor Carrier Act exemption should be retained in its present form rests on seven basic facts: 1. The present Motor Carrier Act exemption does not impair the purpose of the Fair Labor Standards Act. 2. The vital need for motor carrier flexibility precludes a standardized workweek in the trucking industry. 3. Complex wage structures in the trucking industry necessitate that the present overtime exemption be maintained. 4. Serious confusion would result from further limitation of the Motor Carrier Act exemption. 5. Industrial strife would be created by this amendment. 6. The proposed amendment, by retaining the railroads' exemption, discriminates severely against the trucking industry; and 7. Absolutely no one would be benefited by reduction of the Motor Carrier Act exemption. We shall now establish the veracity of these seven points. I. THE PRESENT MOTOR CARRIER ACT EXEMPTION DOES NOT IMPAIR THE PURPOSE OF THE FAIR LABOR STANDARDS ACT It is immediately obvious that the trucking industry's slight exemption to the Fair Labor Standards Act in no way impairs the purpose of the act, which, as stated in its preamble, is geared to reach those industries having "labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." It should be noted that when Congress provided the Motor Carrier Act exemption in 1938, and on numerous subsequent occasions refused to change that exemption, it must have concluded that the trucking industry was not one which the act was attempting to reach. Trucking is an industry which provides high wages. If the earnings of trucking employees were above standard in 1938, they are even more so today. Wage increases and earnings in this industry have outstripped many others in the intervening years. To support that statement we attach hereto a chart which indicates the average earnings of trucking industry employees as compared to average earnings of employees in other major industries. This chart (app. A) is based on U.S. Department of Commerce data. The figures show that the 1962 earnings of trucking employees increased $265 over the previous year and reached a new peak of $6,388. These Government statistics also show that the average employee in the trucking industry in 1962 had an income approximately 12 percent higher than employees in manufacturing and 27 percent higher than others in private industry as a whole. Comparable 1963 data will not be available from the Government for several months although we know the upward trend continues. Our industry's wage rates have increased by a substantial amount under the terms of its labor agreements. It is significant to your consideration and record that this chart does not indicate the complete story, in that trucking employees will be enjoying wage increases each of the next 3 years as a result of recent national bargaining with the Teamsters. On February 1, 1964, they received an additional 10 cents per hour. They will get another 8 cents an hour in 1965, and another 10 cents in 1966. An ATA industry employee earnings survey developed for the national negotiations disclosed that in 1963 all truckdrivers, including those in city and intercity service, enjoyed average weekly earnings of $160.70 as compared with the $98.35 claimed for production workers by the U.S. Bureau of Labor Statistics. On the basis of hourly earnings truckdrivers received $1.06 an hour above those for production workers. Wage rates of more than $3.10 per hour are prevalent in trucking today, and it is not uncommon for a truckdriver to earn $10,000 per year. Moreover, he enjoys liberal paid vacations, holidays, health and welfare insurance, and has established pension rights among other emoluments. Since these compen sations have come about despite the Motor Carrier Act exemption, it follows that the employee wage rates have been satisfactorily adjusted to offset the necessity of longer hours required by trucking's public service nature. It also follows that these highly paid employees enjoy a much higher standard of living than those whose compensation meets the act's minimum wage of $1.25 per hour. Therefore, it is obvious that there are no detrimental wageand-hour conditions in trucking, and the present limited Motor Carrier Act exemption has not and does not impair the purpose of the act. II. VITAL NEED FOR MOTOR CARRIER FLEXIBILITY PRECLUDES STANDARDIZED WORKWEEK IN TRUCKING INDUSTRY Congress, in establishing the Motor Carrier Act exemption and having refused to modify it through the years, rightly recognized that motor carriers are a public service industry entirely dependent upon the requirements of the public they serve. As such they have no control over "production." Motor carriers operate round the clock. They do their work before and after the manufacturer or producer or seller or user opens or closes his establishment. By the very service nature of their operations, motor carriers' workloads are tied directly to the short turn or even seasonal rise or fall of the business of those they serve. As an example, agricultural products and livestock are important sources of revenue to a large number of carriers. However, these carriers have no control over when or in what amounts such shipments must be moved. Therefore, they must be sufficiently flexible to cope with such movements. Another example may be found in shipments required by various services within the Defense Department. Motor carriers cannot always have advance information on such movements and must therefore be able to adapt readily to transportation needs. So it is with the delivery of raw materials or finished products. The time element or volume is publicly controlled. Flexibility and availability of service have made the trucking industry a vital and significant servant of our Nation's commerce. In fact, it has been said that motor carriers have made much of our Nation's commerce possible. As stated before, Congress has continued to recognize this public service aspect of motor carriers in maintaining the limited overtime exemption for motor carrier employees whose workweek cannot be made to fit a standard pattern. III. COMPLEX WAGE STRUCTURES IN TRUCKING INDUSTRY NECESSITATE PRESENT OVERTIME EXEMPTION The wage structure which has developed within the trucking industry is extremely complicated. To the uninitiated, it can seem hopelessly confusing. Road drivers are for the most part paid on a mileage or trip basis. However, drivers' wage rates vary with different types, sizes, and weights of trucks. They change with the distance traveled, the terrain covered, the road speeds, the climate, and many other factors. (Please see excerpts from labor agreement, app. B.) The industry's mileage rates are further complicated by involved minimum guarantees establishing a floor for driver earnings often well above the rate received if computed on a straight mileage basis. For example, on through runs drivers are guaranteed 8 hours' pay or mileage pay whichever is greater. On so-called turnaround runs, the guarantees become quite involved. I again refer you to appendix B. On subsequent runs, in the same workday, the employee receives the established daily guarantee for the first run and additional graduated guarantees for all runs thereafter. These subsequent run guarantees vary from a minimum of 6 hours' pay to a maximum of an additional 8 hours' pay. So-called multiple leg runs, the most remunerative of the established guar antees, gives the men one-half the appropriate mileage guarantee for each leg of the operation regardless of the number of legs driven. An excerpt covering these multiple leg operations is also included in appendix B. On top of all of this, road agreements provide a penalty rate for such things as breakdown, pickup and delivery, layover, blockades, snowtime, scale time and fuel and check time, in addition to loading and unloading. The problems posed in determining an hourly rate for overtime purposes can easily be seen by computing a fictitious hourly rate on the basis of the the speed limits established in the area. For example, men driving single axle units in any of the 12 Central States receive, aside from their guarantees, a mileage rate of 10.25 cents a mile after including their cost-of-living increment. Assuming speed limits of 20 miles an hour, their rate would be $2.05 an hour; at 30 miles per hour, their rate becomes $3.072; and at 40 miles per hour, they would be paid $4.10 an hour. Those men driving double bottoms or combination units presently receive 11.650 cents a mile in the same area. At 20 miles per hour, their rate would be $2.33 per hour; at 30 miles per hour, $3.49%1⁄2 an hour; and at 40 miles per hour, they would receive $4.66 an hour. It must be noted that any given driver might drive two different types of equipment with different mileage rates on runs involving at least two or three different driving speeds in the same day. And these might be through runs, turnaround runs, subsequent runs, or multipleleg runs or combinations of them. New England carriers have been paying their road employees under labor agreements on a trip rate basis. The pay hours for each trip were established long ago under the following formula: First 10 miles of a one-way trip, 1 hour; last 10 miles, 1 hour; with the remaining distance at 1 hour for each 20 miles. This mileage was computed in units of 10. But even these trip rates were not based on actual hours worked-a trip rate of 10 hours' pay might be given for a trip of only 7 hours driving time. We have, in these examples, merely touched upon a few of the major guarantees existing today in trucking industry labor agreements. We believe, however, that they will illustrate the involved method of determining the pay rates in trucking and point up the impracticability of computing wages on the basis of time and one-half of a nonexistent hourly rate after 40 hours of work. Most of these rates mentioned apply to intercity operations. It should be noted, however, that a single driver is often required to perform both local and intercity operations during one workweek. Under the proposed amendment to the act, a driver engaged in local operations 4 days a week and needed for an over-the-road operation involving overtime on the fifth day would be provided overtime pay. Extreme complications arise, however, as we have just demonstrated, when one attempts to calculate overtime wages on the basis of a nonexistent hourly rate. Certainly, a driver engaged during any part of his workweek in intercity operations should be exempt from the overtime provisions of the FLSA. Furthermore, we have shown that wages are sufficiently high in the trucking industry more than to compensate for that part of a drivers' workweek involved in what might be termed by some as overtime operations. It should be reemphasized that the complicated wage structure of the trucking industry has been put into delicate balance over a period of years through free collective bargaining and would be completely disrupted if Congress were to reduce the Motor Carrier Act exemption. IV. SERIOUS CONFUSION WOULD RESULT FROM FURTHER LIMITATION OF THE Much of the phraseology of the proposed amendment can only lead to serious problems of definition as well as to confusion and industrial strife. Section 13 (b) (1) of the Fair Labor Standards Act does not exempt an employee of a carrier from the act's overtime provisions unless, among other things, his activities as a driver, driver's helper, loader, or mechanic directly affect the safety of operation of motor carriers on the public highways in transportation in interstate or foreign commerce within the meaning of the Motor Carrier Act. The newly proposed amendment would grant exemption only to “employees employed during the greater part [emphasis supplied] of any workweek as a driver or driver's helper ***." Such a choice of words cannot only cause general confusion and new administrative problems but it clearly shows a disregard for the original intentions of Congress when it endorsed section 13 (b) (1) and has repeatedly refused to change it. Previous attempts at stipulating the amount of an employee's time which must be devoted to work affecting safety have proved both impractical and infeasible. It has long been recognized through a series of important ICC and court decisions that when the safety of operations is a question, it is not the actual percentage of an employee's time engaged in safety work which is of most importance but rather the nature of the work and the fact that it affects safety. In the Levinson v. Spector Motor Co. (330 U.S. 649) decision it was noted that *** it is not a question of fundamental concern whether or not it is the larger or the smaller fraction of the employee's time that is devoted to safety work. It is the character of the activities rather than the proportion of either the employee's time or of his activities that determine the actual need for the Commission's power to establish reasonable requirements with respect to qualifications, maximum hours of service, safety of operation, and equipment." In the same decision the wisdom of keeping partial-duty loaders, as well as full-duty loaders, whose work affects the safety of operations within the jurisdiction of the ICC's safety program was underscored. The amount of time so spent during any given workweek was deemed unimportant. In Morris v. McComb (332 U.S. 422) the Supreme Court determined that drivers and mechanics are entitled to the exemption when they spend as little as 3 to 4 percent of their total weekly service in interstate activities affecting safety of operation. It is significant that in the Levinson v. Spector Motor Co. decision the Court emphasized: "We have set forth the Commission's record of supervision over this field of safety of operation to demonstrate not only the extent to which the Commission serves Congress in safeguarding the public with respect to qualifications, maximum hours of service, safety of operation, and equipment of interstate motor carriers, but to demonstrate the high degree of its competence in this specialized field which justifies reliance upon its findings, conclusions, and recommendations." Further confusion necessarily arises from the words "over-the-road transport operations (as defined by the Secretary [of Labor])" which appear in the amendment under consideration. The trucking industry maintains that it is not only impractical but also impossible to define "over-the-road transport operations" without creating considerably more new problems than it would ever possibly solve. Neither the trucking industry nor the Teamsters' Union has deemed it helpful to attempt a definition in the past. Even the most recent national master labor agreement, completed in January, does not define the phrase. Regional and local agreements likewise do not define "over the road"; those which separate road and local drivers do so on a mileage basis, but there is great variation between localities. For example: The local driver radius for the States of North and South Carolina is 15 miles; for the city of Chicago 25 miles; for the city of Philadelphia 40 miles and for the State of Iowa 75 miles. In the New York-New Jersey metropolitan area the limits are within a local union's jurisdiction and are subject to changes. In central Pennsylvania local operations vary from employer to employer. In New England a driver is considered to be a road driver when he is paid on a trip rate basis for driving "terminal to terminal." All other drivers are deemed local drivers even though they drive the same distances. To illustrate further the confusion involved in defining "over the road" we present the case of the peddle driver, who is engaged in activities characteristic of both local and road operations. He operates approximately within an area 15 to 150 miles distant from the home terminal, making pickups and/or deliveries and returning to the terminal on the same day. It is easy to see that his work cannot possibly conform to a rigid time schedule. It frequently requires 9, 10, or more hours to complete a routine run. His stop-and-go work is similar to that of a local driver; yet he works in the geographical area of many "road drivers." Because of the volume of business, large companies are likely to classify their employees into groups according to the type of work they do. Small truck operators, on the other hand, cannot always hire a road driver, a local driver, a mechanic, and a loader. Their employees must perform several kinds of work. Every driver must be ready to load or unload, engage in local or road operations. A six-State southeastern labor agreement provides that "the employer may utilize employees interchangeably in the various classifications." Moreover, many factors require flexible interchange of drivers for both city and over-the-road operations. Any definition of "over the road" would have the unfortunate effect of freezing workers into unnecessary categories which would hinder both flexibility and efficiency of operations. V. INDUSTRIAL STRIFE WOULD BE CREATED BY THIS AMENDMENT Trucking is a highly unionized industry. Over 90 percent of the personnel in the exempt employee classifications are covered by collectively bargained labor agreements between the truck operators and the International Brotherhood of Teamsters or the International Association of Machinists. These labor organizations are among the five largest in the United States. They are known to be hard bargainers. To them can go much of the credit for the high pay of our industry's employees. Since these unions are well organized, militant, and powerful, the employees they represent do not need the protection of the FLSA. It is obvious that where 34-421-64-pt. 1--13 |