cifically to such salaried employees as are presently construed as being irregularhour scheduled salary workers.

May I state at the outset that there are millions of yet unorganized office and clerical workers who must rely solely upon this statute and State statutes for minimum wage and overtime rate protection. The membership of our international union, practically without exception, has achieved through collectivebargaining agreements, standards of rates and overtime superior to the minimum standards provided by the wage and hour law. However, it is significant to note that vast numbers of unorganized office and clerical workers have benefited from the Fair Labor Standards Art since its enactment. It gave to them for the first time assurance of payment for overtime hours worked and of a minimum wage floor.

Previous to the passage of this law, office workers, by and large, were assured only of the application of the wage and overtime policy which their particular employer decided to follow with regard to his clerical force. The last 11 years have seen the shaping of overtime standards for office workers, running toward the general recognition of the 40 hour workweek with overtime for excess hours. I should like to call the attention of this committee, as I did its predecessor committee in the Eightieth Congress, to the growth of what we consider to be a misconstruction of the intent of the present statute which has resulted in the use of an overtime practice which to us appears to defeat the purpose of the statutory overtime provisions. I am referring to the method of overtime computation for salaried workers which has come to be called "coolie" or "Chinese overtime." The name stems from the fact that under this method of computation the more hours which an employee works in a given week, the less per hour will he receive for such service, and in no event does he get more than an additional one-half of such diminishing hourly rate for his overtime work. This problem grows out of section 7 (a) of the statute which appears to assure an employee engaged in commerce, or in the production of goods for commerce, of receiving for all hours worked in excess of 40 hours in a workweek, of additional compensation for excess hours "at a rate not less than one and one-half times the regular rate at which he is employed."

I would point out, however, that the Administrator of the act in Interpretative Bulletin No. 4, entitled "Maximum Hours and Overtime Compensation" which was issued originally in November 1938 and revised in December 1939, July 1940, and November 1940, sets forth in paragraphs 10, 11, and 12 the method of overtime computation to apply in the case of salaried employees. A distinction is made between the methods suggested to be applied for salaried employees on a regular schedule of hours and salaried employees on a so-called irregular or fluctuating-hours basis in determining overtime compensation. With regard to this computation set forth by the Administrator in Interpretative Bulletin No. 4 was gone into at some length by the courts in the case of Missel v. Overnight Motor Transportation Company, Inc. The United States Circuit Court of Appeals for the Fourth Circuit on January 5, 1942, sustained the position of the Wage and Hour Administration relative to such method of overtime computation, and such decision was later affirmed by the United States Supreme Court on June 8, 1942. In this Missel case it should be noted that the employer had contended no overtime payment was required, as the weekly salary exceeded the statutory minimum hourly rate and overtime computed at time and one-half of the minimum statutory rate. The effect of this decision, however, was in effect to affirm the method of overtime computation suggested by the Administrator in Interpretative Bullein No. 4, which I have just discussed.

While it is doubtless true that the vast number of covered employers do not attempt to use a basis of overtime computation for salaried employees who might be construed as working a so-called irregular hours schedule which is different from that used for the remainder of their working force, the fact remains that we still have some large establishments which construe their salaried employees as working "nonscheduled hours" and pay them the so-called coolie or Chinese overtime.

An example which I have cited before is still found in the largest banking enterprise in our country-the Bank of America-which continues to compute its overtime on this basis.

We urge and recommend that a careful study of this matter be made by the committee with a view to correcting this inequity through the insertion of additional language in section 7 so as to assure that 40 hours per week or 173 hours per month will be the maximum divisor in determining the hourly rate for overtime purposes of all weekly or monthly salaried employees, respectively.

On behalf of our international union and its 175 local unions in the United States and its possessions, I also desire to affirm and concur in the testimony given to your committee by the American Federation of Labor with regard to other changes in the statute, and particularly to the need for substantially increasing the present 40-cent hourly minimum rate. My organization participated in the decision reached by the recent Cincinnati convention of the American Federation of Labor in going on record in favor of the $1 hourly minimum to replace the 40cent rate. The 40-cent rate has become meaningless today because of present day living costs and the substantial upward shift in wage rates which has occurred during the past few years, with the result that a drastic upward revision is required in the minimum wage of the law if it is to serve the purposes of the statute. Even in my own trade, where wage standards have not generally kept pace with general wage levels, you will today be hard put to find a single employee receiving as low as 40 cents per hour or $16 per week. In fact, you will find but few receiving as little as the 75 cents per hour or $30 per week minimum which is proposed.

We trust that the 75-cent minimum with its collateral provision for increases to not more than $1 in specific industries as determined by industry committees will provide a working basis toward a $1 per hour minimum statutory rate.

Before closing, may we also respectfully request that the committee give careful consideration and study to the problem of office-worker coverage under the statute. The present terminology has resulted in courts construing various classifications of office employees in some industries as not being covered by the law because they did not handle goods flowing in interstate commerce. Many courts have adopted a rule of requiring the employee to prove that the act applied to him when he instituted action to recover statutory overtime compensation. Certainly, if an establishment is engaged in operations which bring it within the coverage of the statute, then its office employees who are performing work vital to the continuation of its operations should be considered as coming within the bounds of the law equally with those employees who be engaged physically in handling goods which flow in interstate commerce.

We, therefore, heartily concur in the proposed revision of the statute so as to make it apply to all employees of establishments whose operations affect com

merce.

In summary we urge: First, that a careful study be made of the overtime computation problems in relation to salaried workers who are covered by the statute with a view to making necessary changes in section 7 so as to assure all of them the same treatment accorded hourly workers; second, that the minimum rate of the statute be realistically revised upward at least to the proposed 75-cent hourly rate with further consideration eventually given to adjusting the rate to not less than $1 per hour, as proposed by the American Federation of Labor; and third, that the application of the statute be broadened so as to cover all activities affecting commerce.

I, indeed, appreciate the courtesy of the committee in extending to me the time to make these brief remarks.

Mr. HENLE. If I might add a word to explain a little more how this problem arose, this method of computing overpay is known as the Missel formula, and it was given official recognition and sanction by the Supreme Court in a case in 1942 entitled "Overnight Motor Company v. Missel." It is a case which probably has caused more injustice to salaried employees than any other case of its type.

The calculation of the overtime rate, as Mr. Mason has indicated, creates a basic inequity between the salaried and the production employee. As he stated, if a worker on a $40-a-week salary works longer on a fluctuating workweek, longer than 40 hours a week, he is paid for that extra 5 or 10 hours, whatever it might be. In the first place, he is not paid time and a half; he is paid half-time, and in the second place, he is paid half-time on a regular rate, which is computed by dividing his regular rate, $40, in the case we are assuming, by the total number of hours worked that week, let us assume, 50 hours. He is paid half-time, therefore, on an hourly rate of 80 cents; or he is paid 40 cents for all hours over 40.

He is paid, therefore, an extra $4 for the hours between 40 and 50. As you can readily see, the calculation of the regular rate under this arrangement decreases at the hours worked lengthen.

Mr. MASON. I have a telegram here dated January 31, 1949, stating that the Bank of America is still paying under this Chinese overtime system. I believe Mr. McConnell might know something about this question.

Mr. MCCONNELL. Yes. We had testimony on it previously. There is some merit, as I was just stating here, to the consideration of a change. I do not know what that should be, but I do feel that there is an injustice. I agree with you there on that. Nothing is in this bill on that. I questioned concerning it the other day.

Mr. HENLE. It is a matter of language, which I am sure can be

worked out.

Mr. LESINSKI. Mr. Mason, you people will have to present that in a special form to us so that we can go over it and act on it. Mr. MASON. I will be glad to, yes, sir.

Each time amendments to the Fair Labor Standards Act have been discussed during the past few years, organized labor has pressed for the inclusion within the act's coverage of workers employed in socalled industrialized agriculture. We have argued that the management of a large-scale farm has become an operation so vast and so organized that it has no resemblance whatever to the family-type farm, but rather has acquired all the characteristics of a large-scale industrial enterprise.

Workers on these farms are hired just as any factory employee might be. They are paid by the hour or, in some cases, by the week or month, and they are discharged, fired, or laid off just as any machine operator might be. The work of hired farm laborers performing simple repetitive operations such as picking fruit or harvesting crops is strikingly similar to the operations performed on a factory assembly line. Up to the present time, these workers have been utterly neglected by all types of protective Federal legislation. They are not protected on the job against arbitrary firing or discrimination for union activity. Employers are under no obligation to bargain with any unions they might wish to organize. They are not protected off the job because they are not covered by any system of unemployment compensation. They are not protected in their old age because they are not entitled to any benefits under Federal old-age and survivors insurance.

They are not covered by the Fair Labor Standards Act; yet no group of workers is more in need of the act's protection. Because they are denied the protection of other Federal legislation, employers have been quick to attack any union organization within their ranks. Without union organization, their bargaining power is low and wages are often forced below the level of minimum subsistence.

For several years the Administrator has recommended that employees of commercial farm enterprises be included under the Fair Labor Standards Act. Last year, Senator Thomas introduced a bill (S. 2062) which would include under the act all farms during any week in which eight or more workers were employed.

In view of this, the American Federation of Labor is seriously disturbed by the fact that the committee print, contrary to the recommendation of the Administrator, continues the blanket exemption for agriculture without distinguishing between the family type and the

large-scale commercial farm. This oversight is the more disturbing because this year, for the first time, Congress has before it a detailed factual analysis of this entire problem.

During the past year, the Administrator and his staff have conducted more intensive studies of hired farm labor and the way in which the law could be adapted to include workers on large-scale commercial farms. As a result of this pioneering work, the Administrator has renewed his recommendation for inclusion of these employees under the law and has suggested to Congress a new but intensely practical way of handling this quetsion.

His proposal, with which we agree, is to base the exemption not on the employment in any 1 week, as in the Thomas bill of last year, but upon the total man-days of employment in any calendar quarter of the year. The use of this criterion eliminates the objections to the formula in the Thomas bill under which many small farms would have been covered for only a few weeks in the year.

Our proposals to include these workers under the law are given in more detail as appendix II to this testimony. In general they revise the exemptions, add certain definitions, and suggest one or two other changes that may be necessary. Under this proposal, farms with over 300 man-days of hired farm labor in any calendar year-calendar quarter of the year, would be covered under the minimum-wage requirement of the law. The maximum-hour and overtime compensation sections would continue to exempt all agricultural workers. The effectiveness of this proposal can be indicated by the fact that it would affect only 2 percent of all farms, only 4 percent of farms hiring farm labor, but approximately half of the 2,000,000 farm laborers.

It is important to point out that by taking this step of including these large-scale farms under the law, Congress will actually be helping farmers operating their own family-type farm. At the present time these farmers are at a disadvantage competing with the largescale commercial farms which are able to utilize hired labor at substandard rates of pay. It is not more than simple justice to ask that the basic national minimum wage be applied to the employees of these large-scale commercial farms.

Mr. Chairman, I have here the president of the National Farm Labor Union, affiliated with the American Federation of Labor, who would like to testify with respect to this suggested amendment to the Fair Labor Standards Act.

Mr. LESINSKI. Very well.

TESTIMONY OF H. L. MITCHELL, PRESIDENT, NATIONAL FARM LABOR UNION, AFL

Mr. MITCHELL. Mr. Chairman and members of the committee: My name is H. L. Mitchell. I am president of the National Farm Labor Union.

Since 1933, it has been the policy of the Federal Government to guarantee a fair price for farm products. Millions of dollars are appropriated by Congress each year and paid to farmers in the form of subsidies to maintain parity prices of agricultural products. We believe that this program has been necessary and should be continued. However, during the 16 years of guaranties to farm owners nothing

has been done about agricultural workers whose labor helps produce the huge crops of food and fiber grown on American farms each year. We therefore believe that the time has come when Congress should guarantee at least a minimum wage to agricultural workers employed on certain types of farms in the United States. There are about 3,000,000 farm workers in the United States working for wages; over 50 percent of these workers employed on commercialized farms. According to the United States Census of Agriculture for 1945, there are 102,136 class I farms which produce 24.2 percent of all the products sold on the market. These farms are, in reality, factories in the field, often employing hundreds of workers.

According to the Bureau of Agricultural Economics of the United States Department of Agriculture, whose estimates vary somewhat from the census reports, commercial-type farms, numbering 125,000, employed 1,229,000 workers from May 20-26, 1945. These farms employed 53 percent of the total of 2,331,000 workers employed in agriculture during that period.

It is these workers who are employed on the Nation's commercialized farms whom we urge your committee to include under the minimumwage provisions of the Fair Labor Standards Act. We ask that the Administrator be given authority to set minimum-wage rates for farm workers, where four or more are regularly employed on a farm. We do not ask for family workers or the occasional hired hands on a family-type farm to be included under the minimum-wage provisions of the Fair Labor Standards Act.

With Government guaranties of parity prices on farm products, there is no reason why large commercial farms should be exempt from the provisions of the act applying to minimum-wage rates. These farm workers should be brought up to a parity with the employees in similar enterprises in industry.

Wages paid farm workers on January 1, 1949, averaged 60 cents per hour for the country as a whole. Farm wage rates have risen on an average of 5 cents an hour since 1945. However, real wages in relation to the cost of living have dropped 50 percent since OPA price control was abandoned.

We urge your committee to include workers employed on commercialized farms, described by the Bureau of the Census as class I farms, under the minimum-wage provisions of the Fair Labor Standards Act, and that the Administrator be given the authority to conduct hearings to determine minimum wages for such workers employed in specific crops and regions in the United States.

Mr. LESINSKI. Mr. Mason, you may continue.

Mr. MASON. I hope you are not taking this question too lightly, Mr. Chairman; the inclusion of farm labor under the act is very important. Mr. LESINSKI. I am not.

Do any of the gentlemen want to ask questions?

Mr. Steed?

Mr. STEED. Mr. Mitchell, the thing I would like to know now is this: Down in my district we have blackberries, and at a certain time of year they are sort of a side line with our farmers, and they have the practice there of harboring or hiring a whole pack of people. These berries ripen very quickly and have to be harvested very quickly, and a farmer whose ordinary operation throughout the year would not require any extra help would use extra people during berry-picking time.