cents per hour.

This provision is unnecessary, confusing, and completely out of harmony with the purposes of the Fair Labor Standards Act. The Administrator in his testimony spoke strongly of his disagreement with this provision. He .covered it fully and well. We endorse his view and can do no better than reiterate his points.

1. The proposal is a new principle for wage determination on the basis of new employment which fixes wages without respect to any criterion other than no previous association with the employer. It conflicts with the apprenticeship provision, and the going wage structure, and compensation to employees for services rendered.

2. The second part of the proposal establishes a new principle of pay according to the age and educational position of the employee and therefore invites discrimination and deception.

3. Both principles produce unfair competition and encourage discriminatory hiring and labor turn-over in plants.

4. It will have a bad psychological effect on boys and girls and discourage further education.

5. It will be difficult to administer.

6. Present provisions are adequate to provide for learning periods and programs and apprenticeship programs.

7. Present provisions for establishing exemptions for handicapped persons are adequate.

C. Further loosening of the hour provisions: (1) Section 7c is changed to grant year-round exemptions to any of his employees rather than merely his employees. It extends the exemption not only to employees in that portion of the premises in which such activity is carried on but to all employees in the establishment. The Wage and Hour Administrator suggests that the wording would not extend the exemption to employees engaged in a different type of activity carried on by the employer, such as the manufacturing of cans by an employer engaged also in canning fresh fruit. We are opposed to this loosening of the control of the hour provisions.

(2) Section 7c is further loosened up to provide a more liberal 14-week overtime exemption for certain industries by extending the exemption to any of his employees, instead of the present provision covering only his employees. The Administrator points out that this proposal will have serious impact in the handling, slaughtering, or dressing of poultry or livestock, and thereby lessen the coverage by some 125,000 persons. The place of employment may comprise not only a single establishment engaged in these operations but also further contiguously located establishments in which further processing is done. It may be extended to persons who are not now exempt.

This provision will provide widespread industrial conflict, as it will tend to invite chiseling employers to try to change practices now established in their contracts, and consequently provoke intense industrial problems. We object to the proposed exemption.

D. Extension of coverage of overtime provisions: We endorse the principle of extending the benefits of the overtime-pay provision to all motor-vehicle employees except drivers, that is, nonoperating employees. We urge the adoption of the provision for a 50-percent test as to the time spent on operating duties as a determination as to whether the employee is entitled to overtime pay under the Fair Labor Standards Act.

VI. THE ANNUAL-WAGE PROVISION SHOULD TRULY BE ANNUAL WAGE

We cannot endorse any attempt at establishing exemptions from the hours provisions under the guise of an annual wage when no annual wage is actually guaranteed. It is proposed to relax the overtime provisions if a plan guarantees a wage of not less than 52 workweeks of 40 hours each. But it permits the Administrator to certify plans for a shorter duration if such shorter period is customary in the industry, or to approve plans of 44 workweeks of 40 hours each or of such shorter duration as the Administrator certifies is customary for the industry. We cannot endorse such a principle. An annual wage must provide a guaranty for a full year's employment; otherwise the employee is entitled to enjoy the protection of the overtime provisions.

The provision allowing shorter guaranty periods than the full year constitutes no contribution to the establishment of an annual wage. If the industry operates on less than a full year's basis, this provision will provide no real guaranty to the worker. He will merely enjoy the period of activity he has customarily had.

It places no additional responsibility upon the employer to extend employment throughout the entire year. What an annual-wage program is intended to do is to induce the employer to plan his production, to iron out seasonal peaks, to balance his products, to eliminate low-activity periods, and to arrange for supplementary production to fill gaps in activity. This provision will do nothing of the kind. It is a sheer mockery of the entire program for annual wages.

We agree that the present provision might be clarified to allow for the use of additional hours above the guaranty of 2,080 at an overtime rate of pay.

Some of the technical difficulties with the proposed language are pointed out by the Administrator, but we do not agree with his support of the lower guaranty period than 2,080 hours. We endorse his proposal for a 10-hour day and 50-hour week at straight time under annual-wage programs. We do not find in the bill any definition or elaboration of the concept of what is customary in the industry.

VII. CHILD LABOR

We endorse the proposals for the extension of the coverage of the child-labor provisions, but urge that the exemptions from coverage in S. 2368 somewhat undo these moves for extension.

We believe that the child-labor provisions of the Walsh-Healey Act can be modified to coincide with the Fair Labor Standards Act. No exceptions should be allowed for the employment of children down to 14 years by Government contractors.

VIII. THE REGULAR RATE OF PAY

S. 2386 seeks to define the term "regular rate of pay." The administrative practice has been well established and the law has been interpreted by the courts. The primary purpose should be to eliminate disputes concerning the intent of Congress. There should not be any relaxation of the present approach to the problem.

A. Section 3N1a defines the concept of normal straight-time compensation. The major deficiency is the provision regarding the types of production bonuses and other incentive payments which are set in terms of the production or efficiency of such employees and without reference to the profits of the enterprise. This proposal is deficient inasmuch as many production bonuses which are basically related to worker and plant productivity are also affected by the company's profits. Many profit-sharing plans are directly associated with the production or efficiency of employees. For example, the so-called Nunn Bush shoe plant relates employees' compensation directly to the market value of the goods produced and creates reserves out of the employer's earnings. The total amount of group earnings is set at 20 percent of the sales price of the total goods produced. As production increases the amount of shareable earnings increases. Each regular employee is assigned a yearly differential rating based on the skill his job re quires, the volume of goods he produces, and the quality of his work. This rating, less time lost away from work, determines the individual's share of group earnings. Another plan is a savings-share plan maintained by the Continental Mills of Philadelphia. If the group operations show a profit over and above actual expense involved, a portion of this is set aside for distribution to employees. A full examination of the myriad of different plans such as that made by a congressional committee in 1939, will reveal that this exemption will provide endless litigation. The plans are most varied and cannot be easily covered by the proposed language. We urge the deletion of the phrase "without reference to the profits of the enterprise" and the deletion of the instruction to exclude from the regulate rate of pay bonuses "not measured exclusively by the production or efficiency of such employees."

We endorse the Administrator's proposal that all profit-sharing programs should be subject to approval by the Administrator if the company desires to exempt the income from the calculation of the straight-time earnings. This procedure for administrative review will prevent evasion.

Provisions should also be made for the inclusion of other types of bonuses such as production bonuses involving length of service, regular personal bonuses, cost-of-living bonuses, and other similar items, in the determination of straighttime earnings.

B. We take exception to the entire approach underlying the distinction in the definitions of regular rate of pay which are likely to develop from the permission granted in section 3N3A3 for the collective-bargaining parties to arrange for

different types of designation of overtime payments than is provided for all groups. We in the organized-labor movement are not seeking this distinction. We cannot understand how the persons drafting this bill could conceive of this provision as contributing anything but chaos to our collective-bargaining process. The encouragement given to splinter and minority unions and dissension provided by recent legislation make us doubly wary of the purpose of this legislation. Weak unions and those developed through employer opposition to bona fide unionism may be used to reduce the overtime bill and seriously to modify the present provisions.

Section 3B2 of the bill permits employers to exclude from the regular rate and to credit against overtime pay due under the act payments designated as overtime payments or otherwise made creditable to overtime by the provisions of collective-bargaining agreements. In other words, anything which an employer can get a union to call overtime becomes overtime. If a strong-minded employer applies pressure on a weak union, or one which is at his mercy, or one which exists by reason of his attitudes, and gets it to agree that the first 20 hours of work in a week are straight-time hours and the next 20 hours are overtime hours, the employer can build up such a credit of overtime pay for himself as to enable him to work his employees another 10 hours without paying them the extra overtime pay required by the law. Such plans were declared illegal by the Supreme Court but this bill would resurrect these schemes and make them respectable.

Unfortunately the bill seeks to give sanction to evasion which secures the approval of a collective-bargaining agent. There is no distinct definition of "bona fide collective bargaining" in this proposal. The entire section raises such an endless series of questions concerning the methods of enforcement and means of preventing evasion that we urge its deletion. Otherwise controversies will be encouraged as employers seek to secure bargain concessions on the overtime provisions in exchange for other concessions. It will create unfair competition.

We urge the deletion of all distinctions including the one which would not disqualify bonuses paid less frequently than monthly in unionized plants from the straight-time hourly earnings.

C. We cannot concur with the proposal that time worked in excess of or outside of the normal workday or workweek or work performed on Saturdays, Sundays, and holidays shall be excluded from normal straight-time compensation and credited to overtime compensation. The practice of paying special rates for work other than the scheduled hours and for Saturday and Sunday are longestablished practices. Moreover, employees are frequently assigned these hours for the very purpose of building up their regular rate of pay. We object strenuously to the proposal both to credit it as overtime payment, which is entirely ill-conceived and has no basis of past fact, and the proposal to exclude same from normal straight-time compensation. Such payments are in the same class as a shift differential.

D. The bill excludes from the regular rate of pay other items which are not to be credited to overtime paid. It provides a serious loophole for employers who may wish to chisel on the overtime pay due their employees. There are numerous occasions when employees are paid for time not worked such as meal periods, regular rest periods, down time and waiting time, reporting time periods, time spent in dispensary or in collective-bargaining procedures. This provision would favor the shifting of employees' wage adjustments primarily to the form of payments for time not worked rather than direct wage increases. The exclusion from the regular rate of bonuses paid less often than quarterly also lends itself to abuse.

E. The subsection 2 protects the below-type contracts designed to escape the overtime penalties of the law. Without adequate safeguards, this provision declares that whenever an employee is employed at a fixed salary both for straight-time and overtime hours under a contract which sets a regular hourly rate of pay, the contract so provided shall be the employee's regular rate of pay so long as it is not substantially less than his average straight-time hourly earnings exclusive of overtime for a representative period. The employers can continue to employ workers at fixed salaries for any number of hours without paying them a single cent in addition for the overtime hours worked after 40 hours so long as they insert in their contracts an hourly rate which is not too far removed from the employee's average hourly earnings. It follows none of the tests applied by the Supreme Court in the review of these cases. Also, the language itself is most ambiguous.

F. The Administrator properly points out that the proposed section 3 N (4) does not require the employer to continue his single method of calculation. His ability to shift would result in much abuse.

We urge that this entire problem be handled by the present administrative regulations. The enactment of a congressional provision would merely contribute to endless litigation in a field where most of the issues have been cleared up by administrative order and the courts have clearly defined the issues on which there has been some controversy.

VIII. OTHER PROPOSALS CONTAINED IN S. 2386

There are other phases of the proposed bill S. 2386 on which we would like to comment:

A. Section 3 (o) defines the "salary basis." We would point out that the prevision omits standards for determining when absences are excessive. The present administrative regulation also prohibits reductions in salaries because of variations in the quantity or quality of work performed during the pay period.

B. Section 4 (b) transfers the attorneys interpreting the law from the jurisdiction of the Solicitor's Office to the Administrator of the Wage and Hour Division. We believe that the separation of the interpretation and regulation work from the litigation and enforcement work can only result in confusion and in weakening of the enforcement of the Fair Labor Standards Act. Is this to follow the pattern of Congress in the Taft-Hartley Act to replace present interpreters of a stronger act with new interpreters of a weaker act?

C. In section 11 (d) the Administrator is given powers to issue regulations defining the various terms and provisions of the act. In exercising this power, the Administrator is instructed to take into account the custom or practices and collective bargaining arrangements prevailing in the industry affected by his regulations. Insofar as this permits outmoded and backward customs and practices now prevailing to cover the enforcement and interpretation of a statute designed to provide a uniform floor under wages, this provision is unwise. We urge appro priate revision of this language.

We endorse the provision authorizing the Administrator to restrict or prohibit industrial home work. The Administrator urges the addition of the power to regulate and we believe that this power should be granted.

D. Part II of the act amends the Walsh-Healey Act. We have already commented on the child-labor provision. The bill also proposes a 2-year statute of limitations on the withholding of money on the bringing of suit by the Government against a contractor who violates the provisions of the Walsh-Healey Act. This is out of line with the 3-year statute of limitations generally prevailing on actions by the Government against lawbreakers and will seriously impair the enforcement of the Walsh-Healey Act. We urge the 3-year standard for the Fair Labor Standards Act. Insofar as the incorporation of the definition of the regular rate of pay is concerned we have already commented on these provisions.

Senator BALL. Miss Dickason.

STATEMENT OF MISS GLADYS DICKASON, VICE PRESIDENT, AMALGAMATED CLOTHING WORKERS OF AMERICA

Miss DICKASON. I wish to speak particularly on the procedures under the industry committee provision. It is the position of the Congress of Industrial Organizations that the present tests of the reasonableness of the minimum, of whether a higher minimum can be established without curtailment of employment, as written in the law now are clear and well defined, that on the basis of those tests it is possible to present factual data and to come to a clear conclusion.

The bill which the CIO supports, Senate bill 2062, does not change the tests for changes in minimum wages as provided in the present law. The bill which is numbered S. 2386 does make changes.

Under my direction, a number of statements were prepared for various industry committees under the Fair Labor Standards Act. I have had experience with preparing this material. Under the act as it now

stands, and as it was applied from 1938 on, it was necessary to present information to show that a higher minimum which was requested would not curtail employment.

Regional differentials can legally be established under the act as it now is written. The law provides that those differentials may not be solely based on regions, but spells out that the industry committees and the Administrator are to take into consideration differences in production costs, differences in living costs, and differences in transportation costs.

Now, it is perfectly possible to get detailed, reliable information on differences in production costs. We have not found that there were any differences in production costs as between regions in any of the industries where information has been presented to industry committees in the past.

It is perfectly possible to present information which is reliable as to differences in living costs.

On transportation costs one can find out how much it costs to ship a dozen shirts from Atlanta, Ga., to Cincinnati, Ohio or from New York City, or some other point. You are talking about something concrete, which is susceptible of proof. You know what you are talking about. As I look at this bill, S. 2386, and I wonder what witnesses at an industry committee hearing would be called upon to prove and what would be susceptible of definite information.

In the first place, I read section 4, which appears on page 25 of the bill. It provides:

4. The minimum amount necessary to maintain, after making due allowance for the lack of dependents of single workers and for variations in the number of wage earners and dependents in a family, the health, efficiency, and general well-being of workers, giving due consideration to regional economic factors.

I assume that one would present information as to what it costs single workers to live, although it is not a fact that single workers support only themselves. Very frequently they are heads of families. I represent workers in the cotton-garment industry, where 90 percent of the employees are women. Practically none of those women support only themselves. Many of them are widows who are the sole support of young children. Many of them work because their husbands have been injured in those logging camps in the South. They support a sick husband and children. Many of them support aged parents. In the cases of young girls living at home, where one or more additional members of the family are working, it is my experience that those girls spend a large proportion of their wages on buying things for the family. If they make $30 a week, and pay the family $15 a week for board and room, the rest of the money does not go for clothes or pin money for that girl worker; it goes to buy caps and shoes and school books, and things of that sort, for the younger children in the family, or it goes to buy an electric iron, or the other items that the household has not been able to afford.

I may say that for a great many years I have spent practically all of my time with these workers, in their homes, talking with them about these matters, and this is an informed opinion as to what they do spend their money for-not a mere guess.

We would, then, present information with reference to the cost of living, or the cost of maintaining the health, efficiency, and general well-being for single workers, allowing for the lack of dependents.