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after the effective date of the 1973 amendments, overtime compensation must be paid to such employees for hours worked in excess of 48 per week; during the second year after such effective date, for hours worked in excess of 44 per week; and beginning in the third year after such effective date, for hours worked in excess of 42 per week. Section 7 of the Act is amended to provide that in determining the hours of employment of such an employee for purposes of determining overtime compensation, hours employed in charter activities shall not be included if (1) the employee's einployment in such activities was pursuant to an agreement or understanding with his employer arrived at before engaging in such employment, and (2) employment in such activities is not part of such employee's regular employment.

Section 203. Nursing Home Employees.-Sections 7 and 13(b) (8) of the Act are amended to provide an overtime exemption for nursing home employees for employment up to 8 hours in any workday and up to 80 hours in any 14-consecutive-day work period. This exemption is identical to that for hospital employees in section 7(j). The present overtime exemption in section 13(b) (8)) for nursing home employees is for employment up to 48 hours in any workweek.

Section 204. Seasonal Industry Employees.—This section reduces and ultimately repeals the overtime exemption for employees in seasonal industries and agricultural processing. Existing law (section 7(c)) provides an overtime exemption for employment in seasonal industries up to 10 hours in any workday or 50 hours in any workweek for not more than 10 workweeks during the calendar year. Existing law (section 7(d)) also provides an overtime exemption for employment in agricultural processing up to 10 hours in any workday or 48 hours in any workweek for not more than 10 workweeks during the calendar year. In the case of an employer who does not qualify for the overtime exemption under both categories, the exemption is extended to 14 workweeks during the calendar year for the category under which he does qualify.

The overtime exemption for employees in seasonal industries (provided by section 7(c) is eliminated as follows:

(1) During the first year after the effective date of the 1973 amendments, overtime is required for employment over 9 hours (in lieu of 10) in any workday and 48 hours (in lieu of 50) in any workweek; and the period of the exemption is reduced from 10 workweeks (or 14 in the case of an employer who qualifies under only the section 7(c) exemption) in a calendar year to 7 workweeks (or 10 in the case of a single exemption) in a calendar year.

(2) During the second year from such effective date, overtime is required for employment over 9 hours in any workday and 48 hours in any workweek (note that the hour limits are the same as the limits for the preceding year); and the period of the exemption is reduced from 7 workweeks (or 10 in the case of a single exemption) in a calendar year to 5 workweeks (or 7 in the case of a single exemption) in a calendar year.

(3) After two years after such effective date the exemption under section 7(c) is repealed. The overtime exemption for employees in agricultural processing (provided by section 7(d)) is eliminated as follows:

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(1) During the first two years after such effective date, overtime is required for employment over 9 hours (in lieu of 10) in any workday and 48 hours in any workweek (note that the 48hour workweek limitation is the same as existing law).

(2) During the first year from such effective date the period of the exemption is reduced from 10 workweeks (or 14 in the case of a single exemption) in a calendar year to 7 workweeks (or 10 in the case of a single exemption) in a calendar year; and during the second year from such effective date such period is reduced to 5 and 7 workweeks, respectively.

(3) After two years after such effective date the exemption under section 7(d) is repealed. Section 205. Domestic Service Employees Employed in Households. Subsection (a) of this section states a finding of Congress that domestic service in households directly affects commerce and that the minimum wage and overtime protections of the Act should have been available to such employees since its enactment.

Subsection (b) amends sections 6 and 7 of the Act to provide minimum wage and overtime protection for employees who (1) are employed in domestic service in households, and (2) are being paid for such service wages which will require the payment of the Social Security taxes (those imposed under chapter 21 of subtitle C of the Internal Revenue Code of 1954), and consequently provide Social Security benefits. Under section 3121 (a) (7) of the Internal Revenue Code of 1954 and section 209(g) of the Social Security Act wages of less than $50 in a calendar quarter for domestic service in the private home of the employer will not require the payment of Social Security taxes and consequently do not qualify as wages for purposes of benefits under title II of the Social Security Act. The minimum wage rate required for such employees under the amendment to section 6 is that required under section 6(b), that is, not less than $1.80 an hour beginning on the first day of the second full month after the date of enactment, or August 1, 1973, whichever occurs first, not less than $2 an hour beginning July 1, 1974, and not less than $2.20 an hour beginning July 1, 1975. Under an amendment to section 13(a), the minimum wages and overtime is not applicable in the case of any such employee who resides in the household of his employer.

Section 206. Employment of Students. This section amends sections 14(b) and (c) to provide for the employment of full-time students (regardless of age but in compliance with applicable child labor laws) at wage rates less than those prescribed by the Act.

Existing law (section 14(b)) permits the employment at rates below the applicable minimum wage of full-time students outside their school hours in retail or service establishments. Such employment is subject to the following: (1) such employment will be authorized only to the extent necessary to prevent curtailment of employment opportunities, (2) the employment must be in compliance with applicable child-labor laws and during the school year may not exceed 20 hours in any workweek, (3) the wage rate may not be less than 85 percent of the otherwise applicable minimum wage, (4) the proportion of students hours of employment to total hours of employment of all employees in any retail or service establishment may not exceed certain limitations, and (5) before a special certificate for such employment may be issued, the Secretary must find that the employment

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will not create a substantial probability of reducing the full-time employment opportunities of persons other than those employed under the certificate. Existing law (section 14(c)) also permits the employment of full-time students in agriculture at wage rates below the applicable minimum wage. Such employment is subject to the conditions described in clauses (1), (2), (3), and (5) of the preceding sentence.

This section's amendment to section 14 combines the current student exemptions for employment in retail-service establishments and in agriculture into an exemption for employment of students in any occupation other than one of the hazardous ones listed in section 14 (b) (1) or any other one designated by the Secretary.

Students may be employed at a wage rate of not less than 85 per centum of the applicable minimum wage rate or $1.60 an hour ($1.30 an hour in the case of employment in agriculture), whichever is the higher. As in existing law, the employment is to be under special certificates issued by the Secretary. Such special certificates shall provide (as in existing law) that such students shall, except during vacation periods, be employed on a part-time basis (not to exceed 20 hours in any workweek). In the case of an employer who employs five or more students under special certificates, the Secretary may not issue a special certificate for the employment of a number of students which will cause the total employed under certificates to exceed five unless he finds the employment of the student "will not create a substantial probability of reducing the full-time employment opportunities” of other workers. In the case of an employer who employs less than five students under special certificates, the Secretary may issue a special certificate if the employer certifies to the Secretary that he is not thereby reducing the full-time employment opportunities for other workers. Sections 15 (Prohibited Acts) and 16 (Penalties) of the Act would be applicable to an employer who violated the requirements of the new section 14(b). A summary of the special certificates issued under this provision is required to be included in the Secretary's annual report on the Act.

This section also provides that the Secretary may waive the minimum wage and overtime provisions of the Act with respect to a student employed by his elementary or secondary school, where such employment constitutes an integral part of the regular education program provided by the school.

Section 207. Laundry and Cleaning Establishments to be considered Service Establishments for Certain Purposes. This section requires the consideration of laundries and dry cleaning establishments as service establishments in the administration of sections 7(i) (relating to commission employees) and 13(a) (1) (relating to executive and administrative personnel and outside salesmen) of the Act.

Section 208. Maids and Custodial Employees of Hotels and Motels.This section amends section 13(b) (8) to repeal the overtime exemption for maids and custodial employees of hotels and motels.

Section 209. Employees of Conglomerates. This section amends section 13 to preclude the applicability of the minimum wage and overtime exemptions of subsection (a) and (b) of that section (except those relating to employees in executive, administrative, or professional capacities, or in the capacity of outside salesmen, and the overtime exemptions relating to employees whose hours of service are

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subject to the provisions of the Motor Carrier Act, Interstate Commerce Act, or Railway Labor Act) to conglomerates with an annual gross

volume of sales made or business done in excess of $10 million. À conglomerate is “an establishment (1) which controls, is controlled by, or is under common control with, another establishment the activities of which not related for a common business purpose to the activities of the establishment employing such employee; and (2) whose annual gross volume of sales made or business done, when combined with the annual gross volume of sales made or business done by each establishment which controls, is controlled by, or is under common control with, the establishment employing such employee, exceeds $10 million (exclusive of excise taxes at the retail level which are separately stated)."

Section 210. Employees of Boat Dealers.—This section amends section 13(b) (10) to provide an overtime exemption for any salesman, partsman, or mechanic primarily engaged in selling or servicing boats if employed by a nonmanufacturing establishment primarily engaged in the business of selling boats to ultimate purchasers. Existing law provides an overtime exemption for employees engaged in related activities and employed by automobile, trailer, truck, farm implement, or aircraft dealerships.

Section 211. Tobacco Employees.—This section amends section 7 to retain the existing overtime exemption applicable to certain employees engaged in activities related to the sale of tobacco. The exemption would otherwise be reduced and ultimately repealed by amendment made by section 204 to section 7(c) of the Act (relating to seasonal industry employees).

Section 212. Substitute Parents for Institutionalized Children.This section amends section 13(a) to establish an exemption from the minimum wage and overtime compensation provisions of the Act for an employee who is employed with his spouse by a nonprofit educational institution to serve as parents to children who have been placed in such institution by or through a public agency or by parents or guardians who are financially unable to care for and educate their children or children under their guardianship. The substitute parents must also reside in the facilities of the institution, receive room and board without cost, and jointly receive cash compensation at an annual rate of not less than $10,000.

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Title III-Conforming Amendments: Effective Date and

Regulations Section 301. Conforming Amendments. This section amends section 6(e) of the Act to eliminate the minimum wage differential for employees employed under a service contract with the United States. Currently, certain linen service employees must receive not less than the section 6(a)(1) rate and the remainder are to receive the section 6(b) rate. Under the amendment, all would be required to be paid not less than the section 6(a)(1) rate. Additionally, technical amendments are made to section 8.

Section 302. Effective Date and Regulations. This section provides that unless otherwise indicated, the effective date of the 1973 Amendments shall be the first day of the second full month which begins after the date of enactment, or August 1, 1973, whichever occurs first.

CHANGES IN EXISTING LAW MADE BY H.R. 7935,

AS REPORTED

In compliance with clause 3 of Rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, H.R. 7935, as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, existing law in which no change is proposed is shown in roman):

FAIR LABOR STANDARDS ACT OF 1938

AN ACT To provide for the establishment of fair labor standards in employments

in and affecting interstate commerce, 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 Act of 1938."

FINDING AND DECLARATION OF POLICY

Sec. 2. (a) The Congress hereby finds that the existence, in industries engaged in commerce or in the production of goods for 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 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.

(b) It is hereby declared to be the policy of this Act, through the exercise by Congress of its power to regulate commerce among the several States and with foreign nations, to correct and as rapidly as practicable to eliminate the conditions above referred to in such industries without substantially curtailing employment or earning power.

DEFINITIONS Sec. 3. As used in this Act

(a) "Person” means an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons.

(b) “Commerce” means trade, commerce, transportation, transmission, or communication among the several States or between any State and any place outside thereof.

(c) “State” means any State of the United States or the District of Columbia or any Territory or possession of the United States.

(51)

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