18. Section 15.-Minor changes are made in section 15 which make it unlawful to violate regulations and orders issued by the Administrator under sections 8 and 11. 19. Amendment of the Walsh-Healey Act.-The proposed bill would amend the Walsh-Healey Act in the following respects: (a) Regular rate of pay. Since the Walsh-Healey Act contains overtime provisions, the method of computing overtime should be the same as under the Fair Labor Standards Act. The proposed bill would amend the Walsh-Healey Act to incorporate the Fair Labor Standards Act definition of "regular rate of pay." (b) Child labor.-The Walsh-Healey Act fixed the minimum age for girls at (unless a special exemption were granted by the Secretary), and for boys at 16. Under the Fair Labor Act the age limit is 16 for both. The proposed amendment brings the two into line by incorporating the Fair Labor Standards it's definition of oppressive child labor into the Walsh-Healey Act. (e) Statute of limitations.-There has been no statutory limit to the period for tich unpaid minimum wages and overtime may be recovered by the Adminisator under the Walsh-Healey Act. The Portal-to-Portal Act left it doubtful whether any such limitation was imposed, and the Labor Department has read the latter act as inapplicable to the Walsh-Healey Act. The second proviso on Sage 44, lines 15-21 fixes a definite period of limitation. 20. Effective date.-Under the proposed bill the amendments raising the minium wage would take effect 120 days after enactment. The other amendments Bald take effect upon enactment and would apply not only prospectively but also retroactively to all causes of action upon which a final judgment had not Derefore been rendered. Thus the present controversy about "overtime on ertime" would be resolved in accordance with the new definition of regular rate of pay, except in those cases in which a judgment has already been rendered. (Whereupon at 12:30 p. m. the subcommittee adjourned until 10 a. m. Wednesday, April 21, 1948.) FAIR LABOR STANDARDS ACT AMENDMENTS WEDNESDAY, APRIL 21, 1948 UNITED STATES SENATE, COMMITTEE ON LABOR AND PUBLIC WELFARE, SUBCOMMITTEE ON LABOR, The subcommittee met, pursuant to adjournment, at 10 a. m., in the committee room of the Committee on Labor and Public Welfare, nited States Capitol Building, Senator Joseph H. Ball (chairman f the subcommittee) presiding. Present: Senator Ball (presiding) and Senator Jenner. Our first witness is Mr. Lew Hahn, president and general manager of the National Retail Dry Goods Association. Mr. Hahn. Mr. HAHN. Thank you, Mr. Chairman. STATEMENT OF LEW HAHN, PRESIDENT AND GENERAL MANAGER OF THE NATIONAL RETAIL DRY GOODS ASSOCIATION Mr. HAHN. Our association is a voluntary trade organization whose embers operate some 7,000 department stores and specialty stores. We have members in every State in the Union and the majority of them are the smaller stores. My appearance here today is to give expression to the attitude and opinions of the retail trade which we represent on the subject of proposed amendments to the Fair Labor Standards Act of 1938. We articularly desire to call the attention of this committee to certain phases of the proposed amendments which have to do with the specific xemption for intrastate retailing and servicing which the Congress wrote into the act at the time of its passage. The retail exemption is contained in section 13 (a) (2) of the existng law which reads as follows: Section 13. (a) The provisions of sections 6 (minimum wages) and 7 (maxiam hours) shall not apply with respect to *** (2) any employee tgaged in any retail or service establishment the greater part of whose selling or servicing is in intrastate commerce. We wish to present argument for the retention and further clarification of this exemption and, in doing so, we wish to emphasize the fact that the National Retail Dry Goods Association long has been on record as believing that where circumstances make it desirable to have legislation establishing reasonable maximum hours of employment and minimum wages, such legislation, because of the inherent local and intrastate nature of retailing is properly within the province of the States and not of the Congress of the United States. That is the essence of my presentation today. Among the proposed bills before the Congress for the purpose of amending the Fair Labor Standards Act are some which would emasculate the exemption for intrastate retailing and servicing by limiting its application to those retail and service enterprises having not more than three retail establishments and having a total annual volume of sales of not more than $300,000. The adoption of such legislation by the Congress would impose a system of discriminatory Federal control over retailing which not only is not necessary but would be, in our opinion, an invasion of the rights of the States to exercise control over business within the State. Regardless of the size or sales volume, retailing is essentially a local enterprise. It caters to the people within its own particular local shopping area. Unlike practically all other forms of enterprise, retailing has no other function except to serve consumers within a limited trading area. Consumers must be served in such manner, and at such shopping hours, as they themselves elect. This is just as true of the large retail business as it is of the smaller ones. Any attempt to discriminate between stores by size completely ignores the competitive nature of retailing. I need not dwell on the fact that, unlike every other form of business, retailing in one form or another is to be found in every community and at every crossroads and even along the highways throughout the entire Nation, and always serving a limited local area. Retailing is the one form of enterprise which must be directly and immediately responsive to the needs of consumers. The magnitude of sales volume in itself does not determine whether or not a business enterprise is intrastate or interstate. The growth of a retail store to impressive sales volume merely reflects the extent to which the consuming public has liked its service and come to depend upon it for the satisfaction of its needs. Because the store has successfully discharged its function in no way detracts from its intrastate character, or justifies the Federal Government in assuming controls over it which rightly belong to the State. It may frequently happen that a specialty shop concentrating on the sale of millinery, or some other single line of goods, may do an annual volume of $200,000, while a similar department in a department store next door to it may secure only a substantially lower sales volume. Yet under this proposal the department store would be discriminated against in competition by being held subject to regulations as to wages and hours. When it originally enacted the Wage and Hour law, Congress definitely recognized the local and intrastate character of retailing by including a specific exemption for such business. If you will refer to the debate in Congress while the legislation was under consideration, you will find it was definitely stated by various legislators urging its passage that retail establishments are absolutely out of the provisions of the bill, they are exempted. This exemption was not by indirection or implication. It was by the inclusion of a specific provision placed in the bill for that purpose to satisfy those legislators who recognized the intrastate character of such enterprises and, without this assurance, would have refused to enact the measure. Nothing which has transpired since that time has changed the local character of these trades. The business hours of retail stores, unlike those in industry, are dictated and controlled by the requirements of the stores' customers. In order to perform their economic function properly they must be ready to sell goods when the public wishes to buy. It should be recognized that the buying habits and needs of the public vary greatly in different areas and whatever the situation may be in a particular area, the stores must conform. This is amply attested by any analysis of store hours in different sections and even by variations by types of tores within the same area. These variations are dictated by consumers, the customers to whom the store sells. Most department stores are open 6 days per week. Some remain open 48 hours, while others remain open 50 or 52 hours. In many places it is necessary for such stores to keep open one or more evenings per week in order to provide adequate facilities for the public to do its shopping. This is especially true of small neighborhood stores in larger cities and in small and rural communities. Serving the population of a wide area of agricultural workers usually entails keeping open Saturday evenings, the time when farm families find it most convenient to do their shopping. Naturally, the time which stores find it necessary to keep open has a direct bearing upon the work hours of their employees. In order to do business and serve the public properly, a store must be adequately taffed. The flow of customer traffic normally is uneven and frequently unpredictable, but the stores must be prepared to serve whenever called upon to supply the public's wants. Some stores, because of their shorter open hours find it possible to establish an employee workweek of 40 hours and, in some cases, have a 5-day employees' Workweek. The great majority of stores, however-and this is especially true of smaller stores-find it necessary to have longer workweeks for their people, because of the necessity to keep their stores open longer for public convenience. Employee work schedules of 42, 44, and 48 hours are common to many department stores and speialty stores. These schedules exist for one reason only-the stores must meet the demands of the public. Here I wish to point out that the great majority of all the products of agriculture and industry must pass through retail stores in order to reach consumers and provide the ultimate market without which agriculture and industry could not live. Retailing is essentially an activity of adjustment between producer and consumer and one of the most important factors which must be adjusted is timeliness. Only the consumer can determine that factor of what is timely. Unfortunately, while Congress can legislate on many subjects, it never has found a way to control the whims and the wishes of the buying public. Stores must adjust their operations to the requirements of that public and, if they should fail to do so the agricultural and production industries, and all their employees, would suffer. If then, because of hasty action by Congress, legislation is enacted containing provisions which some Federal bureaucrat can torture into conferring upon himself authority to control all those important factors which concern the habits and needs of millions of individual citizens in their local communities, the result will be the establishment |