ward extending even to supervisors and junior executives, thus greatly increasing pay-roll costs.

To absorb this added pay-roll cost, stores will have to revise their operating procedures and employment practices by resorting to one or more or all of the following methods:

1. Reduce their basic staffs as low as possible to operate with fewer people.

Incidentally, this would have to be done in our own store, and I think it would have to be done in a great many other stores throughout the country. It would materially add to the unemployment problem.

2. Resort to the greater use of part-time employees during peak shopping hours in order to eliminate unproductive stand-by time now inherent in store operation.

Senator DOUGLAS. That is, bring in people in the night shopping hours or Saturdays.

Mr. MCCARGO. Well, for lunch-hour shopping. It presents an almost insurmountable problem, Senator Douglas, in that it is just very difficult to get people who would be willing to come in and work 2 or 3 hours now, an hour and a half later on; and furthermore our times of shopping are unpredictable.

The very time we think we have plenty of help, is the time we do not have enough. Other times we prepare for a good day and find we have a lot of people standing around not selling. We are dependent upon the weather and so many other things.

As a third point, we would have to shorten our store-open hours irrespective of the shopping requirements of our community. That is absolutely suicidal because we are not our own boss. We are not the boss of our hours. Our customers dictate those entirely.

Fourth, we would have to lay off those employees, regardless of length of service, whose productivity does not justify higher wages. Now, this is a very definite problem with a great many stores. We have older people who have been with us for many years. They are not able to take the training that the younger people can take. Consequently they are not able to produce.

They cannot move around as rapidly. They are not as flexible in going from one department to another, but they are perfectly good people and can earn what we are paying them; while in many cases they would be laid off if this minimum wage applies to retailers.

Accordingly, the employment opportunities of not only marginal employees but those with seniority standing whose ability cannot measure up to the higher wages required would be directly affected. It also will practically eliminate the employment of young people just out of school with no experience but seeking careers in retailing.

Now I am sure that you are aware that throughout the country in June we will have millions of young people in vacation times whose parents are customers of ours and other retailers throughout America. They want their children to have some extra spending money or they want them to have some training for a job for the future.

It has been the practice of retail stores throughout the country to give these youngsters employment, but they cannot earn 75 cents an hour, and that would be especially true of the larger stores that use a great many of them.

Senator PEPPER. Would those people be covered by section 14, the section on learners, apprentices and handicapped workers? Are you familiar with that section?

Mr. McCARGO. No; I am not familiar with that section, Senator. Senator PEPPER. See if you think it would cover the case you have in mind. Referring to the Secretary of Labor, it says this:

The Secretary, to the extent necessary in order to prevent curtailment of opportunities for employment, shall by regulations or by orders provide for (1) the employment of learners, of apprentices, and of messengers employed exclusively in delivering letters and messages, under special certificates issued pursuant to regulations of the Secretary, at such wages lower than the minimum wage applicable under section 6 and subject to such limitations as to time, number, proportion, and the length of service as the Secretary shall prescribe, and (2) the employment of individuals whose earning capacity is impaired by age or physical or mental deficiency or injury, under special certificates issued by the Secretary, at such wages lower than the minimum wage applicable under section 6 and for such period as shall be fixed in such certificates.

Mr. McCARGO. Senator, I think that the average retailer would be very reluctant to come in and ask that such a provision as that be applied to him. I think the result would be that he would say just exactly what we are saying now.

We have a law in Virginia. They call a person under 18 years of age a child, and you cannot employ that person unless you get a special permit. Well, in our stores it is just too much trouble.

We have so many other things to do, we do not have time to chase around for permits. Therefore we just say we are sorry we cannot employ that person unless he is 18 years old. I do not know whether that answers your question satisfactorily or not.

Senator PEPPER. Yes; it does.

Senator DOUGLAS. I wonder if the Department of Labor would submit a memorandum as to the degree these special rulings for apprentices, learners, and handicapped workers have been employed and have been issued, and the degree to which they have been utilized.

(Pursuant to Senator Douglas' request the Department of Labor submitted the following papers:)

REGULATIONS ISSUED UNDER SECTION 14 OF THE FAIR LABOR STANDARDS ACT GOVERNING THE EMPLOYMENT OF LEARNERS AT SUBMINIMUM WAGE RATES

The preponderant number of applications for learners have been received from lower-wage industries which employ relatively large numbers of semiskilled workers. Consequently, the Divisions have issued separate industry regulations to cover 11 such industries or branches of industries to provide uniform terms of learner employment in those industries. In addition, certificates have been issued under the general learner regulations to individual plants in a wide range of industries in which the industries as a whole showed no interest in subminimum rates for learners but in which a few individual plants operated under conditions which made a subminimum rate for learners necessary to prevent curtailment of opportunities for employment.

The regulations presently in effect are attached. Special learner certificates are not issued unless the occupation in which the learner is to be employed involves a substantial degree of skill and requires an extended learning period. The length of the period is based on the time required for a worker of average ability to attain the degree of productivity that would normally yield the minimum wage. The subminimum rate is fixed at a point which does not remove from the employer the entire cost of training new labor but brings that cost into as close a relationship to the productivity of the learner as is necessary to prevent a reasonable employer from refusing to hire inexperienced employees. In establishing learner regulations on an industry-wide basis, it was found necessary on the basis of the facts submitted at public hearings to establish for each of the in

dustries different learner occupations, learning periods, and learner wage rates. For example, in the Apparel Industry, the authorized learner occupations are machine operating (except cutting), pressing, hand sewing, and finishing operations involving hand sewing and the learning period is fixed at 480 hours. In the Independent Telephone Industry, it was found necessary to establish a 480-hour learning period for the occupation of commercial switchboard operator, as compared to the Textile Industry in which it was found necessary to establish a 240hour learning period for the occupations of machine operator, machine tender, machine fixer and jobs immediately incidental thereto.

It should be noted that the term, "learner," is variously defined in the special industry learner regulations. See, for example, Part 522, Section 522.048 ̊ (Apparel Industry); Section 522.151 (Textile Industry); Section 522.131 (Woolen Industry); and Section 522.109 (Artificial Flower and Feather Industry). In industries for which special industry learner regulations are not in effect requests from employers for learner certificates are acted upon under the authority of the general learner regulations, Part 522, Sections 522.1 to 522.13, which provide that the occupation in which the learner is to be trained shall require such skill as to necessitate a learning period.

Also attached is a copy of the Regulations applicable to the part-time employment of student-learners in Vocational Training Programs (Part 520, Sections 520.1 to 520.10). It should be noted that Section 520.6 provides, among other things, that no certificates will be issued authorizing the employment training of student-learners at subminimum wage rates (a) when it is found that the occupation in which it is proposed to train the student-learner involves no skill and requires no significant learning period; (b) when training is confined to manual operations and processes, with no definitely organized plan of school instruction providing for teaching technical knowledge and related industrial information; (c) and when training is confined to a single operation for the purpose of developing high production speed.

[Title 29, Chapter V, Code of Federal Regulations. Part 522]

REGULATIONS APPLICABLE TO THE EMPLOYMENT OF LEARNERS

Pursuant to Section 14 of the Fair Labor Standards Act of 1938. Effective August 16, 1940. Amended March 4, 1941, and June 25, 1942. United States Department of Labor, Wage and Hour Division

SECTION 522.1. APPLICATION FOR LEARNERS

Application may be made by any employer to the Administrator of the Wage and Hour Divi ion, U. S. Department of Labor, Washington, D. C., except that application with respect to employees working in Puerto Rico shall be made to the Territorial Representative of the Wage and Hour Division, Department of Labor, San Juan, Puerto Rico, to employ learners in a specified plant at a wage lower than the minimum wage applicable under section 6 of the Fair Labor Standards Act, whenever employment of learners at such lower rate is believed necessary to prevent curtailment of employment opportunities in such plant. Separate applications must be made with respect to each plant in which the applicant desires to employ learners at a wage lower than the minimum wage applicable under section 6 of the Fair Labor Standards Act.1

SECTION 522.2. APPLICATIONS ON OFFICIAL FORMS

All applications must be made upon official forms furnished on request by the Wage and Hour Division and must contain all information required by such forms. Any application which fails to present the information required by the form will not be considered by the Administrator or his authorized representative but will be returned to the applicant with a notation of deficiencies and without prejudice against submission of a new application. Any applicant may also submit such additional information as he may believe to be pertinent.

SECTION 522.3. POSTING NOTICE OF APPLICATION IN PLANT

At the time of filing an application, the applicant must post a notice thereof on a form supplied by the Wage and Hour Division in a conspicuous place in each department of his plant where he proposes to employ learners at wages

1 Amended March 4, 1941 (6 F. R. 1232).

lower than the minimum wage applicable under section 6 of the Fair Labor Standards Act. Such notice must contain all the information required therein and shall remain posted until such time as the application shall have been acted upon by the Administrator or his authorized representative.

SECTION 522.4. INDUSTRY HEARING

Upon receipt of one or more applications for exemption in an industry for which no regulation has been issued, or upon request of any person or group of persons representing an industry or branch thereof, the Administrator may, if he deems it advisable, cause a hearing to be held for an industry or branch thereof to determine the need for the employment of learners at subminimum wage rates in order to prevent curtailment of opportunities for employment within the industry, to determine the occupation or occupations which require a learning period, and to determine under what limitations as to wages, time, number, proportion, and length of service, special certificates authorizing the employment of learners at subminimum rates may be issued to employers for any such occupation or occupations in the industry. The hearing shall be held before the Administrator or an authorized representative. Following such hearing, the Administrator shall, by regulations, prescribe the conditions and limitations under which special certificates shall be issued for the employment of learners in such industry or branch thereof, if he determines that there is need therefor to prevent curtailment of opportunities for employment in such industry or branch.

SECTION 522.5. PROCEDURE UPON APPLICATION FOR SPECIAL CERTIFICATE

A. Pursuant to the terms of industry regulations.-Any application for the employment of learners in any industry or branch pursuant to the terms of regulations (or orders heretofore issued) governing the employment of learners in such industry or branch shall, if complete and sufficient on its face, be granted forthwith by the Administrator or his authorized representative to the extent necessary to prevent curtailment of opportunities for employment subject to the conditions of the industry regulations in question; otherwise, such application shall be denied without prejudice to the renewal thereof in complete and sufficient form. B. Procedure to be followed where no industry regulations apply.-Upon receipt of any application for exemption in any industry or branch for which no industry regulation is in effect (unless the Administrator causes an industry hearing to be held), or upon receipt of any application for the employment of learners in excess of the number or percentage allowed by an industry regulation, the Administrator or his authorized representative shall:

1. Deny the application on the ground that it fails to show: (a) That the occupation or occupations specified therein require such skill as to necessitate a learning period; or (b) that such denial will result in the curtailment of opportunities for employment; or

2. Issue immediately a special certificate upon the facts shown in the application and publish it in the Federal Register and by general press release a statement of the terms of the special certificate and a notice that for fifteen days following such publication the Administrator will receive written objections to such special certificate and requests for hearing from any persons interested, including, but not limited to, employees, employee groups, and labor organizations. Upon receipt of written objection and request for hearing, if adequate and detailed grounds for objection are set forth, the Administrator or his authorized representative will set the question of the affirmance or the cancellation of the special certificate for hearing, or will make other provisions affording the applicant and any other interested persons an opportunity to present evidence or argument and, as a result thereof, shall either affirm or cancel the special certificate; or

3. Hold a hearing or make other provision affording interested parties an opportunity to present evidence or argument upon the application or upon a group of applications filed by the persons in the same industry presenting related issues of law or fact, and as a result thereof issue or deny special certificate to any or all of the applicants involved.

SECTION 522.6. PROCEDURE FOR HEARINGS-INDUSTRY-INDIVIDUAL CERTIFICATE

Any hearing held pursuant to these regulations will be conducted by the Administrator or an authorized representative. A notice of the time, place and scope of such a hearing will be published in the Federal Register and made public by a general press release at least five days before the date of the hearing. The appli

cant shall in all cases be given notice by registered mail of any hearing to be held for the purpose of determining whether any special certificate shall be cancelled. All persons interested, including employees, employee groups, labor organizations, employers, employer groups and trade associations will be afforded an opportunity to present evidence and to be heard. The Administrator or his authorized representative may cause to be brought before him at such hearing any witness whose testimony he deems material to the matters in issue.

SECTION 522.7. RECORDS TO BE KEPT FOR LEARNERS 2

1. Each worker employed as a learner under a special learner certificate shall be designated as such on the pay-roll records kept by the employer. All learners shall be listed together as a separate group on the pay-roll records kept by the employer.

2. The employer shall obtain and keep in his records a statement signed by the learner employed under a special learner certificate of any experience he may have had in the industry in the five years prior to employment as a learner. The statement should contain dates of previous employment in the industry, occupations in which the learner was engaged, and the types of products upon which the learner worked.3

SECTION 522.8. PROHIBITION-FALSE

EVIDENCE-PROCEDURE FOR CANCELLATION

1. Any special certificate shall be cancelled if it is found that it is not necessary to prevent curtailment of opportunities for employment. However, in the absence of fraud, learners already hired under a special certificate may be retained under the terms of the certificate if the learning period extends beyond the date on which the certificate has been cancelled.

2. Any special certificate shall be cancelled as of the date of issue if it is found that fraud has been exercised in obtaining the certificate or in hiring workers thereunder.

3. Any special learner certificate shall be cancelled as of the first date of violation if it is found that any of its terms have been violated except where the violation is deemed to be of minor nature by the Division.*

4. If it appears upon investigation or complaint that there is reasonable cause to cancel any special certificate, the Administrator or his authorized representative shall, after due notice, afford all interested parties an opportunity to be heard. After such hearing, the Administrator or his authorized representative shall issue a determination as to whether the certificate shall be affirmed or cancelled.

5. No order cancelling any special certificates shall take effect until the expiration of the time allowed for the filing of a petition for review under section 522.13, and, if a petition for review is filed thereunder, the effective date of the cancellation shall be postponed until final action is taken on such petition,: Provided, however, That if the cancellation order is affirmed on review, the employer shall reimburse any person employed under the special certificate in an amount equal to the difference between the applicable statutory minimum wage and any lesser wage paid such person subsequent to the date as of which date the special certificate was cancelled as provided in this section.

SECTION 522.9. TERMS OF SPECIAL CERTIFICATES

No special learner certificate shall be applicable to the employment of learners at more than one plant. Where one establishment occupies several buildings in the same community and the workers in these buildings are engaged in the various processes necessary to the manufacture of the primary products of the establishment, the workers shall be regarded as employees of the same plant for the purpose of these regulations.

Each special certificate shall specify the number or percentage of learners who may be employed under the certificate, the learning period, the time when and the wage rate at which such persons may be employed. No certificate may be issued retroactively.5

SECTION 522.10. NOTICE OF ISSUANCE OR CANCELLATION OF SPECIAL CERTIFICATES

Notice of the issuance or cancellation of each special certificate pursuant to these regulations shall be published in the Federal Register.

? Detailed requirements for record keeping are set forth in Record-Keeping Regulations, Part 516. Amended June 25, 1942 (7 F. R. 4723).

4 Ibid.

$ Ibid.