be demonstrated that the commodities were produced on farms within such specified distances. (3) The period for determining whether 95 percent of the agricultural or horticultural commodities are received from normal rural sources of supply shall be the last preceding calendar month in which operations were carried on for 2 workweeks or more, except that until such time as an establishment has operated for such a calendar month the period shall be the time during which it has been in operation. (4) The percentage of commodities received from normal rural sources of supply within the specified distances shall be determined by weight, volume, or other physical unit of measure, except that dollar value shall be used if different commodities received in the establishment are customarily measured in physical units that are not comparable. SEC. 536.2. Area of production as used in section 13 (a) (10) of the Fair Labor Standards Act. (a) An individual shall be regarded as employed in the area of production within the meaning of section 13 (a) (10) in handling, packing, storing, ginning, compressing, pasteurizing, drying, preparing in their raw or natural state, or canning of agricultural or horticultural commodities for market, or in making cheese or butter or other dairy products. (1) If the establishment where he is employed is located in the open country or in a rural community and 95 percent of the commodities on which such operations are performed by the establishment come from normal rural sources of supply located not more than the following airline distances from the establishment: (1) with respect to the ginning of cotton, 10 miles; (ii) with respect to operations on fresh fruits and vegetables, 15 miles; (iii) with respect to the storing of cotton and any operations on commodities not otherwise specified in this subsection, 20 miles; (iv) with respect to the compressing and compress warehousing of cotton, and operations on tobacco (other than Puerto Rican leaf tobacco), grain, soybeans, poultry, or eggs, 50 miles. Then follows in practically the same language the distances and definitions as above provided in connection with section 13 (a) (10). For more than a year, extensive hearings were held at which interested groups were invited to testify before this definition was promulgated. There was repeated and undisputed testimony that any definition based on a population factor would be discriminatory, unfair, and not based on a sound distinction as recognized in the act or in the Supreme Court decision. Nevertheless. this factor was used. This has had many confusing and contradictory and artificial results. An establishment (such as a grain elevator) in a town of 2,500 is treated differently than one located in a town of 300, although there they are in all respect similar as to the kind of business transacted, character of employment, wages, and hours. They may even be in direct competition-and surely are in indirect competition. If an operator happens to take in a few truckloads of grain from an area beyond 50 miles, then during that time he is under the act. Employees can be exempt during one period and not exempt at another time, because the Administrator as held that an exemption can be one had during one week and lost the next. 7. Supreme Court held regulation valid When the Supreme Court of the United States had before it the definition by the Administrator of "area of production," with the limiting concept of 2,500 population, that Court sustained a definition based on population as a valid regulaiton by the standard used in the Holly Hill case. The Supreme Court in both cases-namely, the Holly Hill case and the Mitchell v. Budd case, considered the problem within the area of constitutional law. In deciding as it had, the Court merely sustained the power of the Administrator to promulgate the definition within the pattern of discretion delegated to the Administrator by an act of Congress. This does not mean judicial approval or legislative confirmation of a regulation which, in fact, is unfair and detrimental to the interests of this industry. At this late stage of constitutional development, it must be accepted as an axiom of constitutional law that delegated power is within the realm of congressional discretion, and, in the absence of capricious exercise of delegated power, the area of administrative law is extremely broad. Indeed, the breadth of admin istrative power has led to this criticism. There is in existence, consequently, a power being exercised by an agency which is parallel to that of Congress. This agency is not subject to the limitations placed upon Congress itself by the mechanics of our political system. A statute passed by Congress is subject to the indirect referendum of the voter, who can determine the course of legislation and express the need for changes in legislation, where necessary, through legislative representatives in the House or in the Senate. But an administrative official becomes insulated from the expression of need and opinion in our political life. He is able to exercise a large area of power which can be arbitrary. In both the Holly Hill case and Budd case, the Supreme Court recognized the complicated economic factors that are involved. The Court took cognizance that the definitions of "area of production" could not produce equality. The Court recognized that variables are numerous and that the desirability of formulas was subject to disagreement by experts. The most that the Court could say for the established regulations was that "the Administrator fulfills his role when he makes a reasoned definition" and "it is enough for us that the expert (meaning the Administrator) stayed within the allowable limits." We maintain that "allowable limits" and a "reasoned definition" are not satisfactory standards within which to throttle an industry of this magnitude. Constitutional power and contstitutional law are one thing. Economic and social phenomena are another. This industry must not be sacrificed on the altar of juristic affection. It is obvious, in the analysis of the Administrator which was embodied in the opinion of the Supreme Court in the Budd case, that the definition of area of production is based upon a pattern of industry and a picture of the American economy which is outdated, and not contemporary. The findings of the Administrator, in arriving at the test of 2,500, recognize the absurdity of attempting to distinguish between "urban-industrial" and "rural-agricultura!" communities on the basis of population. Mind you, in the Budd case, these findings were dated December 18, 1946. I repeat, 1946. What were the criteria that the Administrator used in connection with fixing this arbitrary figure of a 2,500 population "as a class *** (which) are predominantly industrial" as against places with populations of less than 2,500 as "predominantly agricultural"? These criteria are either ephemeral or based upon a picture of the American community which does not exist any more in this year of 1957. The Administrator states that the definition is one which is that of a "class." What precisely does this mean? He states that the 2,500 limit has been the official dividing line between "rural" and "urban" employed by the Bureau of Census in its studies for over 35 years before 1946. This dividing line, he states, is also accepted and used by the Bureau of Agricultural Economics, the Federal Emergency Relief Administration, the Works Progress Administration, and other Government agencies. Mark you, the Administrator is basing this arbitrary figure of 2,500 on the basis of a picture of American agriculture and industry which has become rigid for a preceding generation and was used for a depression economy. There does not seem to be the least glimmer of realism that the face of the American community has changed in the last 10 years. The expansion of the city through suburbia and the sudden creation of communities throughout the length and breadth of this country in the last decade is forgotten. There seems to be no recognition at all of matters which are common knowledge to every member of this committee. The farmland of 1946 has become the site of the building community of 1957. The isolated prairie has become the hubbub of activity in a modern Levittown community. Without laboring the point in too great detail, are we not dealing with absorbing historical data but horribly distorting the facts of contemporary life? Has not the unfortunate result been to strangle the aim of Congress which the Supreme Court stated in the very case of Mitchell v. Budd was "to exempt employees 'employed in agriculture and thus engaged in agricultural enterprises in the area of production'"? The purpose of Congress was very clear. It was an attempt, legislatively, to provide for relief to agriculture. That has been the purpose of a large body of legislation passed by the Congress and is the expression of the public policy of our Government through the people. That purpose is being frustrated and hamstrung by the delegation of power to an administrative agency. It is our position that Congress should by legislation fix the standards for determining what is "area of production." It is the responsibility of Congress and the duty of Congress. 89646-57-74 III. THE PROBLEMS OF KEEPING THE REQUIRED RECORDS AND COMPUTING REGULAR RATES OF PAY WOULD PRESENT INSURMOUNTABLE DIFFICULTIES Every employer must maintain and preserve payroll or other records containing certain information and data with respect to each and every employee to whom the minimum-wage and 40-hour-week overtime provisions apply. Twelve such items are spelled out in the official regulations of the Wage and Hour Division, as follows in part: (1) Name in full, and on the same record, the employee's identifying symbol or number if such is used in place of name on any time, work, or payroll records. (2) Home address. (3) Date of birth if under 19. (4) Occupation in which employed. (5) Time of day and day of week on which the employee's workweek begins. (6) (i) Regular hourly rate of pay for any week when overtime is worked and overtime excess compensation is due under section 7 (a) of the act; (ii) basis on which wages are paid (such as "90 cents per hour," "$7 per day," "$40 per week"), and (iii) the amount and nature of each payment which, pursuant to section 7 (d) of the act, is excluded from the "regular rate" (these records may be in the form of vouchers or other payment data). (7) Hours worked each workday and total hours worked each workweek (for purposes of this section, a "workday" shall be any consecutive 24 hours). (8) Total daily or weekly straight-time carnings or wages; that is, the total earnings or wages due for hours worked during the workday or workweek, including all earnings or wages due during any overtime worked, but exclusive of overtime excess compensation, (9) Total overtime excess compensation for the workweek; that is, the excess compensation for overtime worked which amount is over and above all straighttime earnings or wages also earned during overtime worked, (10) Total additions to or deductions from wages paid each pay period. Every employer making additions to or deductions from wages shall also maintain, in individual employee accounts, a record of the dates, amounts, and nature of the items which make up the total additions and deductions. (11) Total wages paid each pay period. (12) Date of payment and the pay period covered by payment. In addition, payroll records and written individual contracts or agreements must be preserved for 3 years. What are referred to as "supplementary basic records" must be preserved for a period of at least 2 years, including (1) basic employment and earnings records, (2) wage rate tables, (3) worktime schedules, as well as order, shipping and billing records, and records of additions to or deductions from wages paid. Are the farmer, the applegrower, the potato planter to be asked to assume the time and cost burden of trying to establish and maintain such records for their shifting labor force? Is it possible and practical for them to do so. with the best will in the world? To cloud the picture still further, remember that the farmer and grower make substantial changes from one year to the next in crop acreage, reflected in fluctuating labor requirements. Part of the time, the farmer and his employees would be covered by the regulations; part of the time, they would not. Family groups often perform this work, being paid as a unit. But some members of the group may work an hour or two in the morning and the same that evening, while others put in a full day. This system would be impossible if there were coverage under the wage-hour law, necessitating fantastically complex and complicated records. There would also have to be records of the kind, amount, and estimated value of items often furnished to farmworkers aside from the money wages-lodging in camps, food, water, transportation, fuel. These would have to be evaluated and counted in determining compliance with minimum-wage provisions, and in fixing a "regular rate" for overtime purposes. Equity on the farm dictates a piecework basis for payment in most instances. These rates vary from place to place and from crop to crop, and also differ according to whether it is "first picking" or "last picking." Skill, speed and ambition pay off in higher earnings. What will happen to the farmer's costs when piece rates must be set so that even the slowest and least productive worker will be able to earn the specified minimum wage? If piece rates are not to be raised to prohibitive le els, some form of supplemental payment would have to be arranged-a payment that would represent wages for work not done. Doesn't this form of wage guaranty invite the employee to take it easy on the job? All of these complicating factors, and many others that would take too long to recite, provide further evidence of the wisdom of the legislators who drafted the original act in providing agricultural exemptions. For all the reasons that have been explored in this brief presentation, it is earnestly recommended that the agricultural exemptions in the Fair Labor Standards Act be retained to avoid imperiling the economic position of farmers and allied employers. It is further recommended that Congress take a hand to dispel the confusion and discrimination that have attended the administration of the act. STATEMENT OF RALPH HELSTEIN, PRESIDENT OF THE UNITED PACKINGHOUSE WORKERS OF AMERICA, AFL-CIO In this brief statement the discussion will be limited to indicating several important areas of interest which afford persuasive evidence demonstrating why the United Packinghouse Workers of America, AFL-CIO, strongly supports S. 1267 and H. R. 4575, identical bills to extend coverage of the Fair Labor Standards Act. First, we support these bills because they extend coverage to an estimated 1.5 millon of hired agricultural workers. In such widely separated areas as Louisiana, Florida, Arizona, California, and Puerto Rico, our organization has encountered the kind of direct and firsthand experience which drives home to us the crying need for the kind of protection on behalf of farmworkers which could be obtained at present only through an amended Fair Labor Standards Act. The dominant position of large growers-whether of sugarcane in Louisiana, Florida, and Puerto Rico, or of lettuce in California, or melons in Arizona—historically has operated as a roadblock against any significant improvement of wages and conditions for the workers in large-scale and, frequently, corporate agriculture. Since the plantation system in growing sugarcane has continued to rule in the South, with most of the workers Negroes, the customary substandard wages and conditions have become firmly entrenched. In California and Arizona, where migratory labor is heavily relied upon, there also substandard conditions are perpetuated in a vicious circle. "Prevail ing wages" are determined for workers whose bargaining power is extremely weak-in part because they are migrants and often because they are SpanishAmericans or members of some other minority group fearful of being victimized because of their racial or national origins. Substandard wages having been found as "prevailing," "labor shortages" in respect to local labor can be "proven." Whereupon the stage is set to make a superficially persuasive case for bringing workers from Mexico-or, in the case of Florida, from the British West Indies. This vicious circle, with its seeming plausible bases, can only be broken by the kind of remedial legislation that is embodied in the bills we are here supporting. We are frank in stating that the exemption proposed in these bills as an ultimate goal-is too liberal. The language of the bills on this point provides coverage for "any employee empolyed in agriculture during any calendar quarter by a farm enterprise which used less than 400 man-days of hired farm labor during each of the preceding four quarters other than labor performed by members of the family of a farmer-operated enterprise." In time, we trust that coverage would be broader than that established by the language just quoted-making an exception, of course, for family labor as defined in the bills. But as a first long step in the right direction, the proposed extension of coverage is much to be desired. To discriminate against farmworkers in large-scale and typically highly profitable agriculture, as provided in the present act, is inequitable and inexcusable. The present double standard which operates to the great disadvantage of these workers should end at once. Next, we strongly urge the end of the 14-week's exemption periods as to overtime for cannery workers. Existing law is a severe burden on these seasonal workers whose incomes are already entirely inadequate. Inasmuch as women provide the bulk of seasonal cannery workers, what amounts to the encouragement of overtime under the act as it is now written, is doubly objectionable. We also strongly favor the extension of coverage into the kinds of food and fiber processing which are now exempted because they are allegedly in agriculture. These bills, themselves, do not seek to increase the minimum wage to $1.25 an hour, and improvement whose benefits would have a great and beneficial impact, particularly in the South-and for local merchants as well as for great numbers of workers. But to the degree that workers not now covered are receiving less than $1, it must be recognized that an abnormally large proportion of them are in the South. And this sizable group is not by any means confined to agriculture. Therefore, we recognize that the proposed extensions of coverage, as contained in these bills, have special meaning, in practical terms, for the South. To the degree, moreover, that such extensions of coverage would facilitate the transition to a legal minimum of $1.25, the bills here under consideration are entitled to whole-hearted support. In conclusion, we must emphasize that the extensions of coverage that are contained in this bill-including those in clerical and related types of employment-are urgently needed in order to eliminate long, standing, illogical, and inequitable mistreatment of millions of hard-working, but underpaid, Americans. UNITED TEXTILE WORKERS OF AMERICA, Hon. LISTER HILL, Committee on Labor and Public Welfare, United States Senate, Washington, D. C. DEAR SENATOR HILL: The United Textile Workers of America, AFL-CIO, respectfully urges recommendation of the extension of the minimum wage coverage in line with the provisions of Senate bill 1267. While the administration in its position recognizes the principle and the necessity for extended coverage, our union contends that the limited proposals do not meet the requirements of our economy in raising substandard minimums and increasing purchasing power. With the uncertainties and mixed opinions of future business prospects, a substantial coverage of the dollar minimum would be helpful to many industries including textiles. This industry is now in a slump, with mill closings and curtailments causing widespread unemployment. Many of our former members, affected by these mill closings, are now trapped in these uncovered jobs and they are the family breadwinners. Favorable action on S. 1267 would create, in its true sense, "a Fair Labor Standards Act." Sincerely yours, INTERNATIONAL EXECUTIVE COUNCIL. Secretary-Treasurer. STATEMENT OF R. H. ROWE, VICE PRESIDENT AND SECRETARY, UNITED STATES WHOLESALE GROCERS' ASSOCIATION My name is R. H. Rowe. I am vice president and secretary of the United States Wholesale Grocers' Association, a national trade organization of independent wholesale food and grocery distributors, with headquarters in Washington, D. C. We would like to enter vigorous objection to proposals: 1. To eliminate the exemption of outside salesmen from the minimum wage and maximum hour provisions of the Fair Labor Standards Act. 2. Eliminate the exemption of motor carrier employees from the overtime pay provision. 3. To extend the coverage of the act to activity affecting interstate commerce. EXEMPTION FOR OUTSIDE SALESMEN We urge that the exemption for outside salesmen be retained in the act. In the wholesale grocery business, the outside salesman is on his own so far as hours per day and days per week are concerned. In this respect he is under no supervision or control by his employer. |