Senator PEPPER. So, your idea would be to eliminate the overtime exemptions altogether, and apply the law uniformly to the first processing of all agricultural and fish products?

Mrs. SASULY. Yes, sir; and I would be very interested in hearing one good reason why that should not be done, Senator.

I have one thing here I would like to call your attention to, if I may, in closing.

The agricultural exemption which I have not been discussing today but to which I believe you referred this morning--the agricultural exemption of the Fair Labor Standards Act has been incorporated for several years in the appropriation for the National Labor Relations Board by reference. A decision has just been given in a case involving packing sheds which previously were without question considered to be under the Wage-Hour Act-I mean, apart from the overtime exemptions and which previously had been handled by the National Labor Relations Board itself in many cases, practically since the inception of the Board. Yet, just to show the complications which these exemptions can lead to, the National Labor Relations Board has now dismissed seven packing shed cases in Imperial Valley, Calif. The name of the case is Burnett and Burnett. They say that these operations classified by the Wage-Hour Administration as nonagricultural and previously classified by the Board itself as nonagricultural-they have now decided that these are agricultural operations. I think this is

Senator PEPPER. Under what language was the definition?

Mrs. SASULY. Well, the definition of agricultural labor in the act is the same one proposed in S. 653. I believe you referred to it this morning, Senator. The section which applies here is "performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to storage," and so forth.

Senator PEPPER. Now, in the case that you described, was the packing shed operated by the same proprietor who grew the vegetables? Mrs. SASULY. The packing sheds in all these cases were operated by what was known as grower-shippers in California.

Senator PEPPER. A cooperative?

Mrs. SASULY. No; they are not cooperatives at all. They are men who speculate primarily in the production of lettuce who sometimes own and often rent land on leases of 1 to 5 to 10 years, who process the product which grows the land which they may happen to own or rent, but also process a large percentage of the product from land other than that which they own or rent. As a matter of fact, in this case, plants were excluded from the jurisdiction of the National Labor Relations Board which processed under 50 percent of their own. products, that is, of the employer's own product, that is, under 50 percent of the product from land which he owned or rented.

Now, this is one of the lengths to which this type exemption can go. Senator PEPPER. You mean, where they process less than half? Mrs. SASULY. That is right.

Senator PEPPER. Less than half of the products they processed were grown by the proprietor?

Mrs. SASULY. That is correct, who, in no sense, is a farmer in any

event.

Senator PEPPER. It seems to me it was never intended to apply to anything except a farmer processing on his own farm his own prod

uct-I mean preparing for market, not processing or delivery to storage or market, or to carriers for transportation of his own product. The farm proprietor can be a corporation or a partnership.

Mrs. SASULY. We think that is one more reason, Senator, for eliminating these exemptions.

Senator PEPPER. Thank you very much, Mrs. Sasuly.

(The prepared statement submitted by Mrs. Sasuly is as follows:) STATEMENT BY ELISABETH SASULY, WASHINGTON REPRESENTATIVE FOOD, TOBACCO, AGRicultural and ALLIED WORKERS UNION OF AMERICA, CIO

The chief problems with which this statement will deal are the discriminatory minimum wage and overtime exemptions now granted under the Fair Labor Standards Act to industries processing agricultural commodities and fish.

FTA is not concerned with the exemptions and exclusions in the law as technical provisions expanding or limiting coverage of a Federal statute. These exemptions mean dollars and cents to our members and more particularly to the unorganized workers. The difference between an expansion or elimination of the exemptions is the difference between having a wage-hour law or no wage-hour law at all as far as these workers are concerned. It is the difference between long hours of work without any overtime pay and reasonable limitations on working hours with overtime pay in cases where overtime work is necessary.

The special-interest groups who sought and obtained these exemptions contend that it is necessary to exclude low-paid workers from the protection of the law because of conditions peculiar to their industries. They claim that the seasonal nature of the work and perishable nature of the commodities require overtime work during certain peak periods. They assert that the payment of overtime wages will place a financial burden on them which they cannot bear and they sometimes contend that they would have to pass the cost back to the farmer, or even that they are farmers themselves.

We contend that these arguments are without foundation and are a smoke screen to hide the special privileges sought by industries processing agricultural products. I am afraid that in order to obtain these special privileges, large canning, fresh fruit and vegetable packing, cotton processing and other employer groups have for years taken advantage of the high esteem in which the Congress and the American people hold the farmer. These industries have hidden behind the farmer. They have tried to fit themselves into the farmer's overalls.

The real philosophy behind the employers' arguments is that the workers, rather than they, should bear the burden of conditions peculiar to certain industries.

We urge that in considering amendments to the sections of the law granting exemptions to industries processing agricultural commodities, the committee give serious attention to the following points:

1. War employment is over. There is now extensive total unemployment and under-employment. Government figures show over 3,000,000 unemployed, and estimates of the United Electrical Workers, CIO (based on the addition of groups not counted in the census figures), bring this figure to 4,700,000. The committee should note that included in the groups not counted in census estimates are those migratory workers who are employed only a few hours a week in the processing industries subject to the exemptions.

Industry arguments concerning unavailability of labor for two- and three-shift operations have been completely demolished by labor surpluses in the very areas where food, tobacco, and cotton processing are concentrated.

The serious and growing unemployment and under-employment problems which the Nation faces today call for elimination of the overtime exemptions and strict application of the penalty overtime provisions of the Fair Labor Standards Act.

2. Those workers who do put in overtime hours are entitled to standard overtime pay during the time of the year when they put in long hours. Overtime provisions of the law are meaningless if they apply only when there is no overtime work and are lifted at the times when overtime work takes place.

Where necessarily seasonal operations require work over 40 hours per week, the employer should bear the standard time and one half cost. In many instances it is possible to minimize the irregularity of operations and long hours which are encouraged by the present exemptions.

3. Overtime rates are now being paid and have been paid for years by the great majority of exempt employers with whom FTA and other unions have contracts.

Eighty-six and five-tenths percent of the companies under union contract with FTA and subject to overtime exemptions under the law have eliminated these exemptions either wholly or in part.

4. Workers in seasonal industries who have little or no other employment during the year need overtime compensation for overtime work even more than those employed in industries not subject to seasonal fluctuations in employment. In fact, basic wage rates and overtime rates should be higher rather than lower in these industries to meet the minimum budgetary needs of workers whose employment is irregular or of brief duration. This principle has been recognized in the wage scales established through collective bargaining in the building trades and other occupations and industries.

5. The profits of the exempt industries are more than sufficient to allow them to meet the same costs borne by other industries.

6. The argument that these exemptions are based on the agricultural source of the product has no logical basis. If it were to be generally accepted, the shoe industry or the textile industry would be entitled to similar exemptions.

It is high time that the Congress stopped giving special treatment to selected industries which are thereby given competitive advantages not contemplated in the principles upon which the Fair Labor Standards Act is based

The workers represented by FTA in the food, tobacco, and fiber processing industries have been among the most bitterly exploited people in the United States. Historically, their wages have been lower, on the average, than those of other manufacturing workers. Today there is a wide gap between the wages of workers who are members of our union and those employed in plants which are unorganized. In the unorganized sections of these industries, the 40-hour week with overtime compensation for work performed in excess of 40 hours is not as yet a reality because of the discriminatory provisions which are still a part of the Fair Labor Standards Act.

As the members of the committee know, employers in the food, tobacco, fiber processing and fish processing industries enjoy varying degrees of exemption from overtime and minimum-wage requirements under the law:

Cottonseed oil, cotton compress, cotton ginning, dairy products, and sugar processing firms enjoy a year round exemption from payment of any overtime. Canning and fresh fruit and vegetable packing firms are privileged to work their employees over 40 hours without time-and-one-half pay for 28 weeks a year under sections 7 (c) and 7 (b) (3). For 14 of these weeks the exemption is complete and for the other 14 overtime premium begins only after 12 hours work during the day or 56 hours per week. Certain other processors also enjoy a 14 weeks' license to exploit under the terms of section 7 (c).

Under the area of production and fish processing exemptions (secs. 13 (a) (10) and 13 (a) (5)), minimum wage as well as overtime protection is denied.

The total number of industrial workers affected by these exemptions comes to well over 1,000,000 workers who are excluded in one degree or another from the national policy establishing a minimum wage and overtime payment after 40 hours of work.

We urge that sections 7 (c), 7 (b) (3), and 13 (a) (10) be eliminated from the act.

FTA is, of course, deeply concerned that there be speedy action by the committee to raise the minimum-wage rate. The members of our union have taken action to support legislation establishing a rate of $1 per hour. We believe that the cost of living today, the unusually high-profit position of industry, the productivity of the American worker, and the need to support purchasing power fully justify payment of this minimum. However, we support proposals for immediate enactment of a 75 cents an hour minimum with provisions for increasing the minimum to $1 by industry committee action as a very long overdue step in the right direction.

We oppose all proposals to decrease wage rates established through industry committee procedures. This proposal is evidently based on the general assumption that high wages and increased purchasing power can cause economic recession. FTA supports exactly the opposite theory-which has been borne out in fact: Decent wages and adequate purchasing power are essential if our economy is to provide jobs for all and produce what the people need. We emphatically reject the motion that the Nation can move forward and progress through depression of the living standards of its people.

I. THE ARGUMENTS REGARDING PAYMENT OF OVERTIME IN INDUSTRIES PROCESSING AGRICULTURAL COMMODITIES AND FISH

I should like to discuss first the problem of overtime pay as it runs through all the exemptions.

It is perfectly feasible for the industries involved to pay overtime after 40 hours. I make this statement as a matter of simple fact and record. In spite of the legal sanctification which Congress gave employers in these industries to work their employees almost limitless hours with no overtime, overtime is now being paid and has been paid for years. There has been no discernable adverse effect on the employers' profits or their ability to process agricultural commodities and fish expeditiously and with no injury to the product.

Needless to say, the workers who may be forced to work 60 or even 80 hours a week for weeks at a stretch have, through the payment of overtime, received some small compensation for this disruption of their lives and undermining of their health. Needless to say also, these overtime payments were not given as a gift by the employers. They were won through union organization. In the negotiations which followed organization the union has been forced to bargain not merely with individual employers or even groups of employers, but with employers backed by a discriminatory policy set down by the Congress. In my own experience, I have heard employer representatives, at a loss to give a good reason why they should not pay overtime on the same basis as nonexempt plants, state cynically that their only reason for resisting payment was that Congress encouraged them in this policy.

These employers are rarely brazen enough to put forth the excuses and hide behind the dodges which have been presented to Congress over a period of 10 years. 1. Processing industries “wear the farmer's hat" to obtain exemptions

I have referred to the farmer smokescreen behind which these industries have operated to obtain special exemptions. Certainly no one could argue today with any conviction that the occupations involved are not as industrialized as those in any other factory. This has been officially recognized by the courts in numerous cases and by a succession of Administrators of the Wage-Hour Division, among others.

Typical of the kind of subterfuge to which the Congress has been subjected is the statement by a representative of the National Canners Association before a Senate committee last year that there is a "blurred line where farming ends and canning begins."

I don't think the National Canners Association really believes this. I think they know as well and better than I do that the occupations involved in the canning industry are as industrialized as those in any other factory. Those industry representatives who will speak honestly, frankly admit that their problem in paying overtime after 40 hours is no different from that of any other employer. And as a prominent representative of the California processors and growers remarked to me several years ago, some of the big operators no longer try to wear the farmer's hat. 2. Overtime rates are now being paid and have been paid for years by major sections of the exempt industries under union contract

No economic considerations prevent the payment of overtime in the industries which have obtained exemptions under the law.

If this were not so, I should like to ask the committee how it is possible for 86.5 percent of the companies under contract with FTA who are subject to overtime exemptions to stay in business when there has been either complete or partial elimination of the overtime exemption in their plants?

In table I attached to this statement, are listed the industries where FTA has eliminated the overtime exemptions by collective bargaining.

Note that the seafood canning industry, which is completely exempt under the present law from overtime pay and minimum wage requirements, pays premium rates to 84 percent of its workers under contract with our union.

Fresh fruit and vegetable packing sheds, exempt by law for 28 weeks, pay overtime to 100 percent of workers under FTA contract.

The cotton compress and cottonseed oil industries, located almost entirely in the South, pay overtime to 100 percent and 88 percent, respectively, of their workers under FTA contract. The small minority of plants where the full exemption is permitted are for the most part newly-organized establishments where we have not as yet had time to establish full union conditions of employment.

90175-49- -48

The fact that these companies can and do pay overtime after 40 hours, and many of them after 8 hours a day also, is positive proof that the exemptions are not justified by any economic considerations peculiar to these industries. This conclusion is strengthened by the fact that these companies pay premium rates for overtime work and still are able to compete with unorganized firms which do not.

As a matter of fairness and establishment of free competition for those employers who have agreed to eliminate overtime exemptions, the law should close this loophole against the chiseller and the sweatshop operator.

Here are some specific examples:

The Campbell Soup Co., in its two major plants probably handles a larger volume of tomatoes- -one of the most perishable crops-than any single canner of soup maker in the country. From the time of FTA's first contract with this company in the early fourties, time and one half after 40 hours in any week and 8 hours in any day has been paid year round. During the tomato season, employment in the Camden plant of this company increases from around 4,500 to over 10,000. The overtime provisions of the contract are applicable to all employees, seasonal and nonseasonal.

FTA has contracts covering 10,000 workers in major sections of the fresh fruit and vegetable-packing industry in California and Arizona. These contracts provide for payment of time and one-half after 8 hours in any day and between the hours of 5 p. m. and 8 a. m. The period during which these contracts have

been in effect since 1942 have been bonanza years for the industry.

During the last 3 years' consideration of amendment to the Fair Labor Standards Act, fishery and fish canning interests have been among the most vociferous in demanding continuation of the special privilege they now enjoy which exempts them from any legal requirement to pay the statutory minimum or to pay overtime after 40 hours.

Yet for some years FTA has had contracts with the Alaska Salmon Industry, Inc., covering some 5,000 workers, which provide for payment of time and a half after 8 hours in any day and between the hours of 5 p. m. and 7 a. m. A contract with similar provisions is in effect between FTA and Van Camp Seafood Co., the largest tuna canning company in the world, located in San Diego. Contracts between the International Fishermen and Allied Workers of America, CIO, and numerous west coast canners also provide for payment of overtime.

The contract between the California Processors and Growers, referred to above, and the American Federation of Labor provides for overtime beyond the exemptions allowed in the act.

The contracts I have referred plus others covering similar plants on the west coast alone with both CIO and AFL unions in the cannery and dried-fruit industries cover close to 150,000 workers.

The "area of production" exemption has been justified by involved reasoning referred to plants located in farming or rural areas. I shall deal with this definition in more detail below. However, I should like to point out here that included in the plants under contract with FTA which have eliminated the overtime exemption in whole or in part are plants located in small rural towns: Stella Cheese Co., in Baltic, Mich., a town of 550 population, pays time and a half after 40 hours a week and after 8 hours in 1 day. This plant processes milk into Italian-type cheese and other dairy products. In Dade City, Fla., population 2,600, FTA has a similar contract with the Pasco Packing Co., canner of citrus products. And in Traverse City, Mich., Cherry Growers, Inc., a farmers' cooperative, is also party to a contract calling for time and a half after 40 hours. Evidently Michigan farmers do not feel that they are injured if the cannery workers employed by their cooperative receive overtime compensation, however valiantly the National Canners Association strives to protect them from this fate.

3. Exemptions intensify seasonal operations and encourage long workweeks

Fish cannery interests have invoked the weather, the lunar cycle, and the mysterious ways of the salmon and the sardine to justify the exemptions they enjoy. All of the exempt groups have sought to create an impression that coverage under the Fair Labor Standards Act in some way interferes with their operations or the ways of nature.

Surely these groups are aware that the Wage-Hour Act does not prevent them from operating their plants over 40 hours a week. We recognize of course, that longer workweeks may be necessary in seasonal industries, but the extreme nature of seasonal peaks could be controlled to a much greater extent than is now the As a matter of fact, in the California canneries, where there is the largest

case.