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or transacts business, upon the application by the Secretary or representative designated by him, shall have jurisdiction to issue to such person an order requiring such person to appear before the Secretary or representative designated by him, to produce evidence if, as, and when so ordered, and to give testimony relating to the matter under investigation or in question; and any failure to obey such order of the court may be punished by said court as a contempt thereof; and the Secretary shall make findings of fact after notice and hearing, which findings shall be conclusive upon all agencies of the United States, and if supported by the evidence, shall be conclusive upon review by the courts; and the Secretary shall have the power, and is hereby authorized, to make such decisions based upon findings of fact as are deemed to be necessary to enforce the provisions of this Act.
SEC. 8. The Secretary of Labor may make exceptions respecting minimum rates of pay and maximum hours of labor in specific cases or otherwise under the provisions of this Act whenever such action shall be recommended by an agency of the United States and when justice or public interest will be served thereby. Upon the joint recommendation of the governmental agency and the contractor, the Secretary may modify the terms of an existing contract respecting minimum rates of pay and maximum hours of labor as may be found necessary and proper in the public interest or to prevent injustice or undue hardship. The Secretary may provide reasonable limitations and may make rules and regulations allowing reasonable variations, tolerances, and exemptions to and from any or all provisions of this Act respecting minimum rates of pay and maximum hours of labor or the extent of the application of this Act to contractors, subcontractors, or suppliers, as hereinbefore described.
Sec. 9. The specific minimum wages and maximum hours specified or referred to in any proposal or contract shall be determined by the Secretary of Labor : Provided, however, That minimum wages fixed under this Act shall be such wages as are fairly and reasonably commensurate with the value of the service or class of service rendered. In establishing a minimum wage for any service or class of service under this Act the Secretary without being bound by any technical rules of evidence or procedure (1) may take into account all relevant circumstances affecting the value of the service or class of service rendered, (2) may be guided by like considerations as would guide a court in a suit for the reasonable value for services rendered where services are rendered at the request of an employer without contract at to the amount of the wage to be paid, and (3) may consider the wages paid for work of like or comparable character by employers who voluntarily maintain minimum fair-wage standards; and in establishing maximum hours may take into account (1) the prevailing weekly total of hours for such class of services in the year 1934, (2) the health and safety of employees, (3) the amount of unemployment in the particular industries, (4) the effect of excessive hours of labor upon the quality of goods and services furnished the United States: Provided further, That the Secretary shall set a rate for any overtime in excess of the maximum hours designated in the specification or invitation to bid. Such rate shall be not less than one and one-half times the basic hourly rate received by the employee affected.
SEC. 10. Funds appropriated and made available by the Emergency Relief Appropriation Act of 1935 (Public Resolution Numbered 11) are hereby made available for the fiscal year ending June 30, 1937, to the Department of Labor for expenses of the administration of this Act.
SEC. 11. When used in this Act, the term “person” includes one or more individuals, partnerships, associations, corporations, legal representatives, trustees, trustees in bankruptcy, or receivers.
SEC. 12. The provisions of this Act shall not be construed to modify or amend title III of the Act entitled "An Act making appropriations for the Treasury and Post Office Departments for the fiscal year ending June 30, 1934, and for other purposes", approved May 3. 1933 (commonly known as the Buy American Act), nor shall the provisions of this Act be construed as authorizing the payment of wages below the standards required by “An Act relating to the rate of wages for laborers and mechanics employed on public buildings of the United States and the District of Columbia by contractors and subcontractors, and for other purposes”, approved March 3, 1931 (commonly known as the Bacon-Davis Act), as amended from time to time, with respect to contracts which are also within the provisions of such Act as amended from time to time, nor the wage and hour provisions of title II of the National Industrial Recovery Act approved June 16, 1933, as extended.
SFC. 13. Nothing in this Act shall be construed to apply to agricultural or farm products processed for first sale by the original producer nor to any contracts made by the Secretary of Agriculture for the purchase of agricultural commodities or the products thereof. Nothing in this Act shall be construed to apply to common carriers subject to the Interstate Commerce Act and to the Railway Labor Act.
SEC. 14. If any provision of this Act, the application thereof to any persons or circumstances, is held invalid, the remainder of the Act, and the application of such provisions to other persons or circumstances, shall not be affected thereby.
SEC. 15. This Act shall apply to all contracts entered into pursuant to invitations for bids issued on or after thirty days from the effective date of this Act.
Mr. HEALEY. At the close of the last session of the Congress, a special subcommittee of the Committee on the Judiciary was designated for the purpose of making a further study of the Walsh bill. The committee have given this a great deal of thought and study, and this bill, H. R. 11554, was prepared by the committee, and I was instructed to introduce the bill.
We will proceed to hear those persons who desire to be heard on this bill. In the interest of orderly procedure. I presume the committee should hear the proponents of this bill first and the opponents later. We realize, however, that due to the fact that many people have come from a long distance, it will not be possible to follow that procedure throughout, and, from time to time, we will have to allow people to intervene who do want to get away. It is the purpose of the committee to accommodate everyone, if possible.
I think we ought to start this morning by calling those persons who are here representing various departments of the Government, who have with them data which will be helpful to the committee in its deliberations.
Therefore I am going to ask Mr. Gerard D. Reilly, who is the acting solicitor of the Department of Labor, if he will make a statement.
STATEMENT OF GERARD D. REILLY, ACTING SOLICITOR,
DEPARTMENT OF LABOR
Mr. REILLY. Mr. Chairman and gentlemen. I have a letter, gentlemen, from the Secretary of Labor, with respect to this bill, which I should like to read:
DEPARTMENT OF LABOR,
OFFICE OF THE SECRETARY,
Washington, D. C., March 14, 1936. Hon. ARTHUR D. HEALEY,
House of Representatives, Washington, D. C. MY DEAR CONGRESS MIN HEALEY: I have read your redraft of the Walsh bill with considerable interest and am very glad to see that your subcommittee is giving such conscientious attent to the many complex problems involved in the preparation of this legislation.
As you know, I have long advocated a law of this character in order to prevent the Government from having to continue in its anomalous position of having to award its contracts to firms regardless of whether their treatment of their employees conformed to decent labor standards. Such a bill as this is not an untried experiment for it merely widens the application of a principle approved by Congress in the passage of the prevailing rate of wage law, commonly known as the Davis-Bacon Act. This bill proposes to supplement that law by extending the same general principle already in effect with respect to construction contracts to contracts for supplies and services.
There are one or two changes of a noncontroversial nature, however, which I should like to propose to you for your consideration with a possible view to having them incorporated in the bill in advance of the hearing. The first is with reference to the provisions or the bill common to sections 6, 7, 8, and 9 which place sole responsibility for making findings of fact under the act upon the Secretary of Labor. In view of the fact that questions of fixing minimum wages and maximum hours and granting exemptions are of a highly controversial nature, it seems to me unwise to place the responsibility for deciding such questions upon a Cabinet officer whose administrative duties under the organic act creating the Department of Labor make it important that the incumbent of the office maintain friendly rela ions w.th both industry and labor. By this I do not mean that the Department of Labor is not the proper agency to administer the provisions of a bill like yours, but I do feel strongly that the administrative and quasi-judicial functions incident to your bill should be separated.
My suggestion is that the bill contain provisions authorizing the creation of a wage and hour board in the Department oi Labor. This board would be empowered to hold hearings and to make the findings authorized under section 7, to pass upon requests for exemptions on specific contracts under section 8, and to determine the wage and hour provisions in accordance with section 9.
In this way the board would have sole responsibility for all quasi-judicial functions vested in the Secretary by the bill. Under the provision exempting its decisions from review by any other agency or person in the executive branch of the Government, its freedom of action would be preserved from interference.
It is desirable, however, that the board be placed in the Department of Labor. By charging the Secretary with the duties of appointing its administrative personnel, arranging for its bugetary and fiscal (letzuils, and issuing regulations defining its duties under the act with regard to avoiding conflicts with existing law and other agencies entrusted with duties in the industrial relation field, the board would be able to conduct iis proceeilings in an atmosphere of judicial detachment from the disconcerting tasks of administration. The duties of enforcement would also fall upon the administrative staff so that the members of the board will not have prejudged any case before it is formally referred to them.
In accordance with these suggestions I am enclosing for your consideration a copy of the bill containing draft amendments to sections 6, 7, 8, and 9. As you will observe, the amendments to section 6 provide merely for the me hanics of setting up the board. The amendments to sections 7 and 9 chiefly consist of inserting the word “Board” in lieu of "Secretary of Labor." The amendments to section 8 are of the same character and are designel to clarify the point that exemptions may be granteil only upon the request of the contracting agency accompanied by a specific finding that transactions of Government business would be seriously impaired by failure to obtain such an exemption.
From an administrative standpoint it also seems undesirable to me to require that every contract advertised within 30 days after the effective date of the act contain wage and hour provisions, although I concur in the view of the subcommittee that child-labor and convict-labor stipulations should be included. It would tend to place the determination of the wage and hour schedules on a more scientific basis if the minimum wages and maximum hours were fixed only after hearings at which employer and employee representatives of the industry concerned and the contracting officers of the Govern. ment had notice and opportunity to be heard. After such a hearing the board could make a finding and thereafter its finding could be incorporated in any specifications or contract involving that branch of the particular industry.
I have accordingly prepared an additional amendment to section 15 which I should also like you to consider. Sincerely yours,
FRANCES PERKINS. Mr. HEALEY. Have you the amendments there? Mr. REILLY. I have, Mr. Chairman.
Mr. HEALEY, Do you mind, Mr. Reilly, briefly explaining what these amendments are?
Mr. Reilly. As it is now drafted, section 6, creating the administrative unit, provides that the Secretary of Labor is authorized to create that unit and to fix the number of officers and attorneys and to appoint other employees under the civil-service laws; and to utilize State and Federal employees. The amendment which the Secretary of Labor proposes to insert in its place gives the Secretary authority to create a board, a.wage-and-hours board, composed of three persons, and then to appoint an administrative unit, with an administrative officer and attorneys, and to appoint, in accordance with civil-service laws, such other employees as may be necessary to administer the act.
Under the proposed amendment the findings of the board would not be subject to review by anybody, either a person or an agency, in the executive branch of the Government.
Then there are provisions for the board conducting an inquiry by one or more of its members, or such agents or agencies as it designates.
Then there is the conventional rule making provision, giving the Secretary of Labor authority from time to time to make, amend, and rescind rules and regulations,
The section, as amended, is as follows:
SEC. 6. (a) The Secretary of Labor is hereby authorized to administer and enforce the provisions of this act and to create in the Department of Labor a unit for this purpose and a wage-and-hour board composed of three persons (hereinafter referred to as the Board). The Secretary of Labor is further authorized to appoint, without regard to civil-service law, but subject to the Classification Act of 1923, as amended, the Board members, an administrative officer, and attorneys, and to appoint in accordance with existing laws applicable to the employment and compensation of employees of the United States, such other employees as he may find necessary to administer this Act. The Secretary may also utilize such Federal employees with the consent of their respective departments or agencies and with the consent of the State, such State and local employees and such voluntary and uncompensated services as from time to time may be needed.
The Board shall have power to make investigations and findings as hereinafter provided, and such findings shall not be subject to review by any person or agency in the executive branch of the Government.
(b) The Board may, by one or more of its members or by such agents or agencies as it may designate, prosecute any inquiry necessary to its functions in any part of the United States. A member who participates in such an inquiry shall not be disqualified by reason thereof from subsequently participating in a decision or finding of the Board with respect to the subject matter of the inquiry.
(c) The Secretary of Labor shall have authority from time to time to make, amend, and rescind such rules and regulations as may be necessary to carry out the provisions of this Act.
Section 7 is the procedural section of the bill. As it is now drafted, it gives the Secretary of Labor, or a representative designated by the Secretary, authority to hold hearings, and to apply to the courts for subpenas, to administer oaths to witnesses and to apply to the courts
Mr. HEALEY. In other words, the proposed amendment delegates those powers to the board?
Mr. REILLY. That is all. Section 8 is the provision of the bill providing for exceptions. As the bill now stands, the Secretary of Labor has very broad power to make exceptions from the wage and hour stipulations, upon the recommendation of the contracting agency. There is no other restriction upon the power. Moreover the Secretary is also given power, apparently without any recommendation by the contracting agency, to allow for reasonable limitations or reasonable variations and tolerances.
The amendment which the Secretary proposes, would give the power of making these exemptions to the board, but it would require that the board could only act upon a written finding by the head of the contracting agency or department that compliance with the act would seriously impair the conduct of Government business. In that event, the board may make exceptions in specific cases or otherwise, when justice and the public interest would be served thereby. Then, on the joint recommendation of the contracting agency and the contractor the board, under this amendment, would be given power to modify the terms of an existing contract with respect to minimum rates of pay and maximum hours of labor.
Section 8, as amended, would read as follows:
SEC. 8. Upon a written finding by the head of the contracting agency or department that the inclusion the proposal or contract of the representations or arrangements described in section 1 will seriously impair the conduct of Government business the Board may make exceptions in specific cases or otherwise when justice or public interest will be served thereby.
Upon the joint recommendation of the contracting agency and the contractor, the Board may modify the terms of an existing contract respecting minimum rates of pay and maximum hours of labor as it may find necessary and proper in the public interest or to prevent injustice and undue hardship.
Section 9 is the section which describes the standards which will guide the Secretary of Labor in determining the hour and wage schedules which are to be inserted in the specifications.
The proposed amendment would state that the board, rather than the Secretary of Labor, would be guided by these same standards. In order to clarify the language of this section, the Secretary suggests language to show that these determinations do not have to be inade every time a new contract is made, but that a determination in a particular industry can be used for similar contracts. The Secretary has suggested that in lieu of the phrase, “The specific minimum wages and maximum hours specified or referred to in any proposal or contract shall be determined by the Secretary of Labor”, that the language shall read:
Sec. 9. The minimum wages and maximum hours specified or referred to in any proposal or contract shall conform to a determination by the Board with respect to the particular industry or group of industries involved in the proposal or contract.
That is simply a matter of administrative convenience.
Those are the amendments that the Secretary has proposed with regard to the proposed board in the Department of Labor.
The other amendment which was referred to in the last paragraph of her letter is the final section of the act which states that it shall become effective and apply to all contracts entered into pursuant to invitations for bids issued on or after 30 days from the effective date of the act. The Secretary suggests the addition of a proviso, as follows: Provided, however, The provisions requiring the inclusion of representation with respect to minimum wages and maximum hours shall apply only to purchases or contracts relating to such industries as have been the subject matter of a determination under the provisions of section 6.