I would like to incorporate in the record, if I may, a telegram received from Richard W. Smith, secretary-treasurer of railway department of our international union, commenting on the elimination of the meal charge for employees on dining cars. Senator PEPPER (presiding). It will be accepted for the record. (The telegram referred to is as follows:) Mr. CHAS. E. SANDS, CHICAGO, ILL., April 13, 1949. International Representative, Hotel and Restaurant Employees "Hon. CLAUDE PEPPER, Chairman, Subcommittee Senate Committee Labor and Public Welfare. "MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE: Our organization, Hotel and Restaurant Employees and Bartenders International Union, which represents dining car employees on a majority of the Nation's railroads, urgently requests that the committee give consideration to amending section 3 (m) of the Fair Labor Standards Act to the extent employees in the employ of common carriers would be exempted from the provisions of the act which allows employers to deduct the cost of board and lodging. "In the true sense of the term, it is similar or identical to an out of town expense account which is usually paid by employers and Government assumes this expense or a part thereof when Government employees are forced to travel away from their homes. "The language contained in Senate bill 653 as well as in the House bill 3190, report No. 267 Union Calendar No. 86 is quite satisfactory to our organization and will if enacted accomplish the desired results. "Many thanks. "Yours respectfully, "RICHARD W. SMITH, "Secretary-Treasurer, Railway Department, Hotel and Restaurant Employees and Bartenders International Union." Senator THOMAS. If you eliminate that meal charge, do you expect the employer to give you a meal for nothing? Mr. SANDS. The same as seamen, yes, sir. The seamen on vessels are furnished theirs. Of course, it is all reckoned up in their pay. They are paid so much and meals. It is an unwritten rule in the restaurant and hotel industry that those who cook or serve meals always get their meals. The maids in the hotel and the bell men, and those that are not directly engaged in the preparation or serving of food get their meals. But it is an unwritten law in our business. But on these dining cars they have just put it on in some instances in some places, a compulsory meal charge. The cooks and waiters of dining cars cannot get off and go up town and eat. So every increase in wages they get through the Railway Mediation Board, the railroads offset it by upping the charge for its meals. As you all know meals in the restaurant and hotel industry, the employees do not eat off of the higher cost menu. They eat off of things that have not been served, and the next day they are served to employees. In many, many cases it is very fine food. In fact, through our unions we insist the food is wholesome and palatable. These workers cannot sit down and order hors-d'oeuvres and filet mignons, and things that they want. There is a choice on the menu, usually a choice of one or two items. Then they get dessert. If they have soup, they do not get dessert. Senator THOMAS. If they did let you people choose the meals, the next thing would come a law making all menus written in plain English instead of French. [Laughter.] Mr. SANDS. That would not be a bad idea. I have been in the business for a great, great many years, and of course I am capable of translating a menu from French to English. In fact, it used to be my job in the Bellevue-Stratford many, many years ago to get the menu and translate it, and then go to the stenographer and have enough copies made so that the waiters would know what they were talking about. But I found in many cases that even the cooks themselves could not agree on what was in a certain dish. It is something like drinks here. [Laughter.] If I might comment a little bit further, the same as I commented in this very room last year to a hearing that Senator Ball was in charge of. Here is the District of Columbia. We are under Public Law 101, commonly called the Taft-Hartley Act. We operate under it. And we have complied with all of the rules. We have to in order to do business. But even in the District of Columbia, where the Government by statute says we are under the Taft-Hartley Act, and bad as it is, we are still exempt from the Fair Labor Standards Act. It seems to me that if the Government is going to tell our people, not only our people but all of the working people in the District of Columbia, that they are under the Taft-Hartley Act, they should not be excluded from the Fair Labor Standards Act. So I hope that this will be reported, and we certainly do not like the language in the House bill because there is a difference of opinion, I find, in the minds of attorneys whether we would be covered or not. Senator THOMAS. That is all I have to ask. Senator PEPPER. Mr. Sands, some of the hotel people raise the point that some of their employees who would be covered by this act, including their gratuities receive compensation far in excess of the minimum wage. Mr. SANDS. I did not understand it that way. I understand this bill-I might say that I am appearing next Wednesday before the House Ways and Means Committee. We have in the law that has been reported favorably by the committee that threshed this out to include gratuities for the purpose of payment by employees and employers. I think this: In my opinion this bill would cover employees in hotels or restaurants that receive gratuites if the wages plus the gratuities did not equal 75 cents per hour. Senator PEPPER. In other words, you would be fairly agreeable to our providing in the law that gratuities might be counted to determine whether or not employees received the minimum wage under this law. Mr. SANDS. Positively. We would not want a waiter or waitress that works in some hotel making three or four dollars a day to come under the provisions of this act. They are hired with that understanding. It may be said there that the employer is going to say: "How are you going to figure whether Nellie or John make 50 cents an hour or not?" Well, that is very simple because the gratuities are figured by the employer for the purposes of arriving at premiums on workmen's compensation and for the purposes of payment on unemployment insurance. And, of course, they are used for the purposes of income taxes. Senator DOUGLAS. So that the individual waiter or hotel attendant turns in a record to his employer of the total of gratuities received by him? Mr. SANDS. Yes, for unemployment-insurance purposes. I think it is in about 21 of the different States, and they do it in the District of Columbia. But the way they do that here in the District of Columbia, the waiters, for example, in a hotel-and I will not mention any particular hotel; I do not want to give any one a boost; They are all good-but the waiters at their shop meeting arrived at a figure to be reported to the employer, $2 a day, $3 a day, $4 a day, $5 a day, according to the class of place they work in. And the employer adds that on to his report when he reports for the purposes of unemployment insurance. And also the waiters, or the gratuity-receiving people, report that to the employer for the purposes of paying income taxes. Senator DOUGLAS. How accurate do you think is that reporting? Mr. SANDS. How accurate? Senator DOUGLAS. Yes. I can see all kinds of probabilities relating to that, motives leading to accurate reporting and otherwise. Mr. SANDS. You would be surprised how accurate they are. Right here in the District where we are well acquainted with them, you would be surprised how accurate they are in reporting them. As a matter of fact, the representatives of the Revenue Department are in continual search after them. I have known cases where waiters and waitresses have had to pay quite a little back when people wanted to get a passport to Europe or something like that. If you were running a hotel or a restaurant it is very easy for you to arrive at about how much your waiters make. All you would have to do would be to take the total checks for a day. Say the waiter sold $50 worth of food in his 8 hours. It is natural to assume that he made $5, at least 10 percent. Certainly they do not give the Government any the best of it in reporting, but they do not give them any the worst of it either. They do pay. I can name you a hotel right up the street here where one of the waiters reported to the employer for the purposes of unemployment insurance, income tax and unemployment, and they pay $5 a day for their gratuities plus their wage. Senator DOUGLAS. Is it possible that elsewhere in the country, where the eye of the Internal Revenue Department is not quite as alert, the reporting might be a bit less accurate? Mr. SANDS. Well, I believe that it would be, especially in unorganized places. But we educate members of our union that they have a duty to the Government and that they should pay their proportionate share of government. Even in our offices of unions we set up prior to the reporting on March 15, committees who render service free to our members to see that their reports go in accurately. Senator PEPPER. This bill, as I recall it, provides two methods by which civil suit may be brought to assure that the employer pays the wage required under the act. One is to permit the employee to sue in his own name, and the other is to permit the Secretary of Labor to sue for him. Now the burden of proof that he did not make 75 cents an hour would be upon the one suing-that is, upon the individual person who claimed that he did not get the minimum wage-or upon the Government to show that the individual did not get it. Mr. SANDS. That is right. Senator PEPPER. Take the case of the waiter. The burden would be upon him to show that he did not receive enough money and then the employer would rebut by showing, as you did a while ago, that it had been customary for the customers to pay s much as 10 percent as a tip. Mr. SANDS. That is right. Senator PEPPER. And maybe he might get the testimony of other waiters and other employers, and that sort of thing. So you feel there would be some fairly satisfactory standard that could be applied, and the law could be made to work all right if you did include the gratuities as a part of the gross compensation? Mr. SANDS. Without a doubt. It works now. When a man opens a hotel and buys workmen's compensation, he does not just pay on the salaries of these gratuity-receiving employees. He pays on the salary, on the board, and on the gratuities. For example, years ago, when I was a local business agent here, we had many, many cases before the Workmen's Compensation Board, fighting cases for the waiters. And some waiter working in a night club would claim that he made a fabulous amount of money. Another waiter would work in the hotel. So we finally arrived at a gentlemen's agreement with the Workmen's Compensation Commission here at that time. The wage, then, of the waiter was $2 a day. So we concluded that we would list the waiter at $2 a day salary, $3 a day gratuities, $1 in lieu of the board that he did not get when he was home, hurt, making it $6 a day, $36 a week, two-thirds of which would be $24. I think that rule still stands. So we did not have to go in then and prove that the waiter working in a night club made $75 a week, and so forth. It can be easily ironed out. Senator PEPPER. I have one other question. They also have said to me that there is a 24-hour a day business, and those of the hotels always stayed open nights and Sundays; that if you made them pay overtime above 40 hours a week this would be an excessive burden upon them. In some industries covered by the act there is an exemption from overtime, a seasonal period recognized, as in certain agricultural operations. What have you to say about that? Mr. SANDS. We only work 8 hours now, 48 hours a week. Senator PEPPER. 48 now or 40. Mr. SANDS. We work 48 a week. Let us take the case of what we are aiming to do in our unions, and what we have been doing for years is to skip the higher-priced people on wage increases and bring the little fellow up. That is the purpose, as I understand it, of this act. Now let us take the maids of the hotels of Washington, or the dishwashers, or the pot washers, or the kitchen clean-up people. Under our contract, signed about 3 months ago, their minimum wage is $31.50 for a 48-hour week. Senator DOUGLAS. That is about 70.5 cents an hour. Mr. SANDS. A little less. If they were raised to 75 cents an hour, they would get $39 a week. But the employer is smart.. He is not going to work some of those people 48 hours a week if he has to pay them overtime, and we are satisfied if they cut our entire membership down to 40 hours. We are satisfied. In fact, we have been struggling for years to get the 5-day week, 40 hours. We have it in some places, in New York City and San Francisco, and some other places. But let us say that Nellie is a waitress. At the present time the boss keeps her 48 hours a week. I might say in the case of waitresses, 37 hours or more up to 48 they have to pay full time. Senator PEPPER. They do not get time and a half over 40? Senator PEPPER. But not between 40 and 48? Mr. SANDS. No. Senator PEPPER. Under this law as it is written now, if your group were covered, they would get time and a half over 40 unless we made some exception in the law. Mr. SANDS. Yes; that is right. But here, Senator. Now whether there is work or not, the dishwasher and the pot washer, if business is dull, is kept there. The waiters are kept in the dining room 48 hours because they are paying them for it. But if you give us this act you are going to find the efficiency experts in the hotels are going to find they can work a number of these employees 40 hours a week and they will not have to be paying overtime. They work others 42 and 43. Senator DOUGLAS. There is the question. Not as many people eat breakfast as late as 10 to 11, or lunch as late as 3 o'clock, and there are these gaps in the late morning and middle afternoon. Mr. SANDS. I quite agree with you, but still at the same time they need somebody in that dining room. That waiter or waitress is not sitting down and reading the comics. She is keeping busy cleaning up the ketchup bottles. She is arranging the silverware, changing the linens, so that everything is nice and clean, and she is doing all this other work in preparing for when business does come. Senator DOUGLAS. When I was in college, for a few weeks I was a waiter, and we worked hard. But there were spells in the late morning and middle afternoon when we did not work. It may be that we were in an inefficient hotel, and it may be the efficiency has increased since then. Mr. SANDS. No; you were not. Senator DOUGLAS. I did notice there were these very distinct gaps. Mr. SANDS. The tension of our business is such that a waiter or waitress, and particularly a waitress, could not go through 8 hours the way they do at meal time. In kitchens and out of kitchens, and in the dining room that is air-cooled and in the kitchen that is hot. And here and there and upstairs and downstrairs. They could not do it for 8 hours. It is a physical impossibility. There must be some period when they fold napkins or clean ketchup bottles, or something of that sort. There must be. It is not like an assembly line. Even on an assembly line the people are given relief every so often. A man could not stand on an assembly |