FAIR LABOR STANDARDS ACT AMENDMENTS FRIDAY, APRIL 23, 1948 UNITED STATES SENATE, COMMITTEE ON LABOR AND PUBLIC WELFARE, SUBCOMMITTEE ON LABOR, The subcommittee met, pursuant to adjournment, at 10 a. m., in the hearing room of the Committee on Labor and Public Welfare, United States Capitol Building, Senator Joseph H. Ball (chairman of the subcommittee), presiding. Present: Senators Ball (presiding) and Jenner. Also present: Senator Pepper. Senator BALL. The committee will come to order. The first witness is William Glazier, Washington representative of the International Longshoremen's and Warehousemen's Union, CIO. STATEMENT OF WILLIAM GLAZIER, WASHINGTON REPRESENTATIVE, INTERNATIONAL LONGSHOREMEN'S AND WAREHOUSEMEN'S UNION, CIO Mr. GLAZIER. Mr. Chairman and gentlemen of the committee, my name is William Glazier. I am Washington representative of the International Longshoremen's and Warehousemen's Union, CIO. The ILWU welcomes this opportunity to testify in continuing support of the Fair Labor Standards Act. We believe the act to be one of the basic protections of the American workers, particularly of the unorganized workers. So that it can better accomplish the purposes it was designed to serve, we believe that its coverage should be extended and its benefits increased. It should not be further weakened, as was done in the so-called Portal-to-Portal Act. Specifically, the ILWU is in favor of, and wholeheartedly supports the amendments to the act that are embodied in S. 2062. We are opposed to the amendments which are proposed by Senator Ball in S. 2386. However, the general analysis of this latter bill will be presented by the national CIO at a later date, and I have made no attempt in this presentation to go over all the proposals made by Senator Ball in S. 2386. The Fair Labor Standards Act was founded on two basic principles: 1. That there should be a national minimum hourly wage sufficient to provide all workers engaged in interstate commerce or in the production of goods for commerce with a minimum standard of living for health, efficiency, and general well-being. 2. That insofar as possible, work be confined to 40 hours per week. These principles are still sound. We support the position taken by the CIO in its testimony before this and other committees that under present conditions of postwar price inflation, it is necessary, in order to effectuate the intent of Congress as expressed in the Fair Labor Standards Act, to raise the minimum wage to not less than 75 cents. If, as Congress said, 40 cents was necessary before the war to provide the desired minimum standard of living, then it is easily demonstrable that 40 cents is no longer sufficient and that at least 75 cents is necessary. An increase in the minimum wage rate is necessary for the further purpose of supporting purchasing power and thereby bolstering the national economy. Our present so-called "prosperity" is based in large measure upon unprecedented consumer expenditures. To counteract influences which are tending to reduce such expenditures, it is necessary that the legal floor under wages be a realistic one. The 40-cent minimum does little or nothing to support purchasing power. An increase in the rate to 75 cents would militate against the economic collapse so widely feared. It follows as corollary that the minimum must continue to be a national minimum. The attempt by special interest groups to secure regional minima is an attempt to defeat the purposes of the act. There is no evidence whatsoever that a minimum standard of "health, efficiency, and general well-being" can be purchased more cheaply in one area than another. It is true that workers in some regions, notably the South and in the Territories of Hawaii and Puerto Rico, live on a lower economic level than workers elsewhere in the country, but it is difficult to believe that the Congress, representative as it is of the national interest, would do anything to perpetuate and sanction this inequality and injustice. It follows further that coverage of the act should be extended to workers not now covered, notably maritime and agricultural workers. There is nothing peculiar about such workers or about their work which justifies Congress in jeopardizing the economic security of the country by their exclusion. Agricultural workers in particular are peculiarly vulnerable to wage cutting, and wage cutting instituted in one industry is prone to spread to other industries. The floor under wages should have no holes in it. The ILWU represents some 28,000 workers engaged in the production and processing of sugar in the Territory of Hawaii. We represent, also, some 8,000 workers in the pineapple industry in the islands. The bulk of these workers are not covered by the Fair Labor Standards Act. In the sugar industry, more than 18,000 are field workers, so employed throughout the year. Their work is not seasonal in character. They are, of course, not covered. Most of the remaining 10,000 sugar workers are engaged in converting cane into raw sugar in the mills. Though covered by the wages provisions of the act, they are for 10 months of the year excluded by section 7 (c) from the hours provisions. During the remaining 2 months, when the mills are shut down for repairs and maintenance, they are covered. Thus there is this absurdly illogical situation: During the 10 months' grinding season, when the workers most need the protection of the law, they are not covered and receive overtime payments only after 48 hours' work; but during the short period of shut-down for repairs they are covered and receive overtime if worked in excess of 40 hours per week. It is our understanding that this exemption from the hours provisions is removed by S. 2062, the Thomas bill. Senator Ball's bill, S. 2386, continues the present practice. We favor the amendment embodied in S. 2062 on this point. In the pineapple industry, the several thousand field workers who have fairly steady employment are not covered because of the blanket exclusion of agricultural workers, and the cannery workers are not covered for a period of 14 weeks during the peak season. Only the small number of year-round employees in the canneries are covered under the act. We urge that all these workers be brought under the protection of the act with respect to wages and hours. We refer the committee to an extensive brief entitled "Impact of Fair Labor Standards Act and Proposed Amendments Thereto on Hawaiian Sugarcane Industry. submitted by this union to a subcommittee of the Senate Committee on Education and Labor in the Seventy-ninth Congress, first session-see hearings on S. 1349, September and October 1945, page 1048. This brief presents our arguments for inclusion under the hours protection of workers employed in the sugar mills. With regard to the cannery and agricultural workers we support, on behalf of our members in Hawaii, the position taken before this committee by the CIO and the Food, Tobacco, Agricultural, and Allied Workers Union of America, that they be covered also. The great bulk of sugar and pineapple workers in Hawaii are employed by large concerns. None of the 34 sugar plantations under contract with ILWU employs fewer than 100 workers and the majority employ more than 500. The principal employers covered under our pineapple contract are the Hawaiian Pineapple Co., Libby, McNeill, and Libby, and the California Packing Corp., all large concerns. The other pineapple companies under contract, all employ both field and factory workers, and in no instance is employment during the season fewer than 100 workers. There is no basis for excluding from coverage workers employed by concerns of this size. As the Department of Labor has said with reference to the Hawaiian sugar industry, "perhaps nowhere else is an agricultural industry so highly routinized and mechanized. Sugarcane raising in Hawaii is factoryized agriculture." (U. S. Department of Labor, Bureau of Labor Statistics Bulletin No. 543, 1931.) Furthermore there is a close integration between agricultural and industrial operations in the sugar industry. Prof. James A. Shoemaker, in his study, Labor in the Territory of Hawaii, 1939, states: In Hawaii the growing of cane and manufacturing of raw sugar are combined in a single plantation, based on a carefully planned planting and harvesting program to provide a continuous flow of cane into the mill. Under these conditions small-scale operations are inefficient. (Shoemaker, U. S. Bureau of Labor Statistics, Bulletin No. 687, p. 24.) And subsequently: Employment in the production of sugar in Hawaii continues throughout the year. In this respect it is more like employment in manufacturing operations with moderate seasonal fluctuations than like agricultural operations in the continental United States" (p. 57). Territorial legislation has recognized that under conditions prevailing in Hawaii, agricultural workers should receive the same treatment as factory or other workers. Agricultural workers are covered under the provisions of both the Territorial wage-and-hour law and the Territorial Labor Relations Act. By unanimous action the legislature in its 1945 session extended the wage-and-hour provisions of the Territorial law to cover all workers in agricultural and agricultural processing (ch. 75, Revised Laws of Hawaii, 1945, as amended). The Territorial law, however, provides for a 48-hour workweek and a minimum wage of only 40 cents. Its protection is, therefore, wholly inadequate and its existence affords no excuse for continuing the present inadequate and illogical coverage provisions of the Federal act. The Thomas bill, S. 2062, in denying exemptions to the huge industrialized farms such as those in Hawaii, would limit exemptions to farms employing less than eight workers. The ILWU wholeheartedly supports this amendment. On the other hand Senator Ball's bill, S. 2386, continues the present practice and therefore fails to take care of this extremely acute situation. I now turn to section 3 (n) of S. 2386 which defines the "regular rate of pay." I will address myself primarily to section 3 (n) (B) (2). This amendment would define the "regular rate of pay" in such a way as to exclude certain night and other rates, frequently miscalled "overtime" rates which appear in our collective bargaining contracts. The ILWU represents some 20,000 workers who would be injuriously affected by such an amendment. They are longshoremen, dockwork ers, carloaders, clerks, checkers, walking bosses, supercargoes and other workers employed on the docks, piers, and terminals of the Pacific coast, Alaska, Hawaii, and Puerto Rico. They work under contracts with stevedoring concerns, steamship companies, terminals, and wharf companies. It is provided in these contracts, and was traditional in the industry even before union contracts were written, that one hourly rate of pay shall prevail during certain daytime hours and that a second rate of pay shall prevail during night hours and on week-ends and holidays. This second rate has been called an "overtime" rate but as I will show is not properly so called. In our Pacific coast contract, which includes the bulk of our membership in these categories of workers, the straight-time rate is paid for the first 6 hours worked between 8 a. m. and 5 p. m. Mondays through Fridays; all other hours worked-with certain exceptions which can be overlooked here-are paid at one and one-half times the straight-time rate. S. 2386 would, however, exclude from the "regular rate" and credit to overtime compensation due under the law these premium payments for night work and holiday premium payments. That is accomplished in section 3 (n) (B) (2) which provides that premiums paid for work performed outside the usual work day or work week, including premium pay for Saturday, Sunday, and holiday work, shall be excluded from the regular rate and credited to overtime compensation. This is likewise the contention of the stevedore companies, and it is the position of Judge Rifkind of the Federal District Court in the Huron Stevedoring case. Incidentally, the judge's decision was presented for the record in the House hearings by Mr. Maloney speaking for the National Federation of American Shipping. The opposition position, that the so-called overtime rate in our contract is a night rate and that true overtime for purposes of the Fair Labor Standards Act must be computed with reference to both rates depending on the number of hours worked at each rate, is the position which the ILWU has taken for a long time and has tried to have incorporated in its contract. It is also the unanimous holding of the Second Circuit Court of Appeals in overruling Judge Rifkind. I have attached to this statement a brief by our legal department which discusses these cases and several others. Moreover, as I show_later, this was the employers' position until the passage of the Fair Labor Standards Act. Senator BALL. You say your contract provides for the straight-time rate to be paid for the first 6 hours, between 8 a. m. and 5 p. m. You are on a 6-hour day, and, in effect, this is overtime after 6 hours, if they work longer than the 6-hour day. Mr. GLAZIER. No. The contract specifies the rate that will be paid for specified hours. Senator BALL. This is the first 6 hours. You have 9 hours between 8 and 5. Mr. GLAZIER. That is right. Senator BALL. But only the first 6 hours are at straight time, so you have, in effect, overtime after a 6-hour day. Mr. GLAZIER. You have, in effect, the specified rate of pay; that is right. Senator BALL. Did you ever hear of a night-shift differential which is 50 percent? Mr. GLAZIER. A night-shift differential? Senator BALL. In the industry? Mr. GLAZIER. All I am familiar with that I can talk about is my own industry and my own contract. Senator BALL. They usually have 15 percent? Mr. GLAZIER. That is true. Let me give you an example I have here, Senator Ball, of the manner in which the men go to work and are paid. Examination of a few typical situations will illustrate how different this so-called overtime rate is from a true overtime rate. Typically, at present, day gangs work a 10-hour day shift. They turn to at 7 a. m. and, with an hour out for lunch, work until 6 p. m. For the first hour they receive the overtime rate; for the 4 hours, 8 a. m. to 12 noon, they receive the straight-time rate; for the 2 hours, 1 p. m. to 3 p. m., they also get the straight-time rate; and from 3 p. m. to 6 p. m. they again receive the overtime rate. Obviously, an overtime rate which is paid for the first hour of the day is not overtime within the meaning of the Fair Labor Standards Act. This is the situation on the west coast. Night work is, for the most part, done by night gangs, all of whose time is worked at the overtime rate. Typically, the night gangs are now working from 7 p. m. to 6 a. m., with an hour out at midnight. Thus, for the ninth and tenth hours they get the same rate as for the first eight. That is, the contract calls for this overtime rate for all hours between 5 p. m. and 8 a. m. the next morning, and they get that, |