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S. 1861

SECTION-BY-SECTION ANALYSIS

SECTION 1

The popular name of this bill is the "Fair Labor Standards Amendments of 1973."

SECTION 2

Subsection 2(a) amends sections 3(d) and 3(e) of the Fair Labor Standards Act of 1938, as amended, to include under the definitions of "employer" and "employee” the United States and any State or political subdivision of a State. This

will extend the coverage of the law to include agencies and activities of the United States (except the armed forces and certain employees not in the competitive service). The present coverage of State and local hospitals, nursing homes, schools, and local transit agencies is extended to all activities of States and their political subdivisions. This amendment would add to and their political subdivisions. This amendment would add to coverage an estimated 5 million workers (1.6 million Federal, 3.3 million State and local government).

Subsection 2(6) amends section 3(e) to also include under the definition of "employee" any individual employed in domestic service, except baby-sitters. This amendment would add to coverage an estimated 1.2 million workers. In addition, section 3(e) is amended to include local seasonal hand harvest laborers in the man-day count for agricultural coverage and to define those government employees extended coverage by the bill.

Subsection 2(c) amends section 3(h) to add the words "or other activity” to the definition of the word “Industry” so as to make clear the government coverage.

Subsection (d) amends section 3(m) to require that tipped employees be given an explanation of tip credit, and retain all tips received. At present, employers may include the value of tips actually received up to 50 percent, but the employee must show that he received a lesser amount if the credit is challenged.

Subsection 2(e) amends section 3(r) to include under "enterprise" the activities of the United States Government or any State or political subdivision thereof. This amendment will broaden the effect of retaining the current coverage for schools and hospitals, whether operated for profit or not for profit, and for regulated public and private local transit whether operated for profit or not for profit.

Subsection ?(9) amends sections 5 and 8 by bringing under the mainland minimum wage the employees of hotels, motels, and restaurants in Puerto Rico and the Virgin Islands. At present these workers are covered by wage rates determined by specially convened industry committees. Also covered at the mainland minimum are employees of governmental units in Puerto Rico and the Virgin Islands. Section 5 is also amended to prohibit an industry committee from reducing the wage rate below the statutory minimum.

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SECTION 3

Subsection 3(a) amends section 6(a) to establish, for employees in activities covered by the Act prior to the 1966 amendments, an hourly minimum of $2.00 during the first year from the effective date of the 1973 amendments, and $2.20 thereafter.

Subsection 3(b) amends section 6(a)(5) to establish, for employees in agriculture, an hourly minimum of $1.60 during the first year from the effective date of the 1973 amendments, $1.80 during the second year from the effective date of the 1973 amendments, $2.00 during the third year from the effective date of the 1973 amendments, and $2.20 thereafter.

Subsection 3(c) amends section 6(b) to establish, for employees newly covered by the 1966 amendments and by the 1973 amendments, an hourly minimum of $1.80 during the first year from the effective date of the 1973 amendments, $2.00 during the second year from the effective date of the 1973 amendments, and $2.20 thereafter.

Subsection 3(d) amends section 6(c) to require that covered employees in Puerto Rico and the Virgin Islands making less than $0.80 per hour under the most recent wage order be paid not less than $1.00 sixty days after enactment. Thereafter, their wages are increased by $0.20 per hour each year until parity is achieved with the mainland minimum. Employees over $0.80 per hour are raised $0.20 per hour each year after enactment until parity is achieved. Each year, special industry committees may increase the $0.20 per hour raise, but they may not lower it. Provision is also made for newly covered employees and for situations involving a subsidy or income supplement.

Subsection 3(e) amends section 6(e) to eliminate clauses excluding certain linen supply establishments from full coverage in contracts with the United States not governed by the Service Contracts Act of 1965, as amended.

Subsection 3() adds a provision requiring that employees in domestic service be paid at not less than the 6(b) rate unless the compensation is determined not to be wages under section 209 of the Social Security Act.

SECTION 4 Subsection 4(a) amends Section 7(a) of the Act to restate the general requirement that overtime compensation is to be paid for hours worked over 40 in each workweek at a rate not less than one and one-half times the regular rate, and eliminates certain provisions (sections c and d) of the Act which provide partial overtime exemptions, particularly in agricultural processing industries.

Subsection 4(6) makes conforming amendments and redesignations.

Subsection 4) adds a new section 7(i) to provide for overtime averaging over a twenty-eight day period and a phase down from 48 to 40 hours per week without time and one-half penalty for state and local government employees engaged in fire protection and law enforcement activities, including security personnel in correctional institutions; and adds a new section 7(j) to exempt voluntary charter activities from hours worked in local transit for purposes of calculating overtime.

SECTION 5

This section amends section 12 to permit the Secretary to require employers to obtain proof of age from any employee in order to carry out the objectives of the child labor provisions of the Act.

SECTION 6

This section amends Section 13(a) of the Act which permits certain minimum wage and overtime exemptions:

Subsection 6(a) retains minimum wage and overtime exemptions with some modifications as follows:

13(a)(1) which describes any employee employed in a bona fide executive, administrative, or professional capacity, or in the capacity of outside salesman, but repeals the 40 percent tolerance for nonexempt activities;

13(a)(3) employees of seasonal amusement and recreational establishments;

13(a)(5) employees engaged in certain seafood harvesting and processing;

13(a)(6) employees in agriculture if employer uses 500 or fewer man days of hired labor during a peak quarter, but the provision exempting local seasonal hand harvest laborers regardless of the size of the farm on which they work is repealed;

13(a)(7) certain learners, apprentices, students, or handicapped workers;

13(a) (8) employees of small newspapers; 13(a) (10) switchboard employees of small telephone companies; and 13(a)(12) seamen on other than an American vessel.

Subsection 6 (a) also repeals minimum wage and overtime exemptions permitted by section 13(a) as follows:

13(a)(4) and (11) employees in certain retailing and service establishments;

13(a)(9) employees of motion picture theaters;

13(a) (14) agriculture employees engaged in growing and harvesting shade-grown tobacco.

13(a) (13) logging employees is repealed, thereby removing the minimum wage exemption; but the overtime exemption is retained in a new paragraph of section 13(b).

Subsection 6(a) amends section 13(a)(2) by eliminating the special dollar volume establishment test for retail and service enterprises. This amendment has the effect of covering most chain store operations not now covered.

Subsection 6(b) retains overtime exemptions permitted by section 13(b) as follows:

13(b)(1) employees for whom the Secretary of Transportation may establish qualifications and maximum hours of service:

13(b)(2) employees of railroads; 13(b)(3) employees of air carriers; 13(b) (5) outside buyers of dairy products; 13(b) (6) seamen; 13(b)(9) certain employees of small radio or television stations;

13(b)(10) employees employed as salesmen by motor vehicle dealers, or as salesmen, partsmen or mechanics by farm implement dealers;

13(b)(11) local drivers and drivers' helpers;
13(b)(12) certain agricultural employees;
13(b)(13) employees engaged in livestock auction operations;
13(b) (14) employees of country elevators;

13(b) (16) employees engaged in transportation of fruits and vegetables; and

13(b)(17) taxicab drivers.

Subsection 6(6) also repeals overtime exemptions permitted by section 13(b) as follows:

13(b)(2) employees of oil pipelines;

13(b) (4) employees of certain fish and aquatic forms of food processors;

13(b)(10) employees employed as partsmen or mechanics by motor vehicle dealers, or as salesmen, partsmen or mechanics by aircraft dealers;

13(b)(15) employees engaged in ginning of cotton, sugar beet or sugar cane processing, but the exemption for employees engaged in the processing of maple sap into syrup is retained;

Subsection 6(6) improves overtime standards for certain employees in stages as follows:

13(b)(8) employees of nursing homes must be paid time-and-a-half after 48 hours first year (as in present law), after 46 hours second year, and after 44 hours thereafter;

13(b)(8) employees of hotels, motels, and restaurants must be paid time-and-a-half after 48 hours first year, and after 46 hours thereafter.

Subsection 6(6) repeals overtime standards for certain employees in stages as follows:

13(b)(7) employees of street, suburban or interurban electric railways, or local trolley or motor bus carriers must be paid time-and-ahalf after 48 hours first year, 44 hours second year, and the exemption is repealed thereafter (all hours exclusive of voluntary charter time);

13(b) (18) and 13(b)(19) employees of food service and catering establishments and bowling establishments must be paid time-and-ahalf after 48 hours first year, 44 hours second year, and the exemptions are repealed thereafter.

Subsection 6(6) further amends section 13(b) to provide new overtime exemptions for the following employees:

13(b)(19) domestic service employees;

13(b) (20) logging employees previously exempt from minimum wage and overtime in 13(a).

Subsection 6(c) amends the provisions relating to child labor in agriculture to prohibit certain employment outside of school hours, principally for all children under the age of twelve, except on a farm owned or operated by a parent.

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SECTION 7

This section amends section 14(b) to prevent unwarranted displacement of full-time employees by student workers in retail and service establishments that are brought within the coverage of the FLSA by these amendments and to provide for student certificates for educational institutions.

SECTION 8

This section amends section 16(c) to allow the Secretary of Labor to bring suit to recover unpaid minimum wages or overtime compensation and an equal amount of liquidated damages without requiring a written request from an employee. In addition, this amendment would allow the Secretary to bring such actions even though the suit might involve issues of law that have not been finally settled by the courts.

SECTION 9

This section amends section 16 to provide for a civil penalty of up to $1000 for violation of the provisions of section 12, relating to child labor.

SECTION 10

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This section amends section 18(b) to conform with new amendments.

SECTION 11

This section provides conforming amendments to other laws.

SECTION 12

This section amends age discrimination in Employment Act of 1967 to cover employees of Federal, State, and local governments.

SECTION 13

This section provides that the Fair Labor Standards Amendments of 1972 become effective 60 days after date of enactment.

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