FAIR LABOR STANDARDS AMENDMENTS OF 1974

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000800030001-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 177
• Document Creation Date: December 12, 2016
• Document Release Date: January 7, 2002
• Sequence Number: 1
• Publication Date: February 28, 1974
• Content Type: OPEN

Approved For Release 2002/01/2 WIP7~N 8000800030001-4
February 28, 1974 CONGRESSIONALE~ = SEA
able-at least td
is unjustifiable
the most glorious chapters in the his
of the Senate of the United States.
tal clear. I question whether any other
Senator would make the matter more
clear; as, for example, an, amendment
I would have proposed to change the
date from January 1, 1974, back to some
other date. But that could not be done
unless it were the product of an agree-
ment between the parties, by way of set-
tlement, a settlement which could not
be obtained. I thought I had come into
agreement with the chairman of the
committee, but a settlement not being
desired, it seems to me that it would
only compromise the principle as laid
down by the Court as a matter of juridi-
cal principle. I emphasize : not a com-
promise, but on a straight question of
Juridical principle, requiring no retro-
active provision.
My amendment having failed on a
motion to table by a vote of 74 to 10, a
margin which I think takes us beyond
the feeling of some Senators that the
vote may have been the other way had
they had an opportunity to test out the
situation, it seems to me that one other
way that it can be tested fs by a motion I
am about to make. Then Senators can
decide whether it is really unfair with-
out jeopardizing the fundamental basis
of the legislation prospectively.
So , l r.President, I move to recommit
- the bill to the Committee on Banking,
___ . -.__,___ Affairs On th..a.
a sufficient second? There is not a
cient second.
Mr. JAVITS. Mr. President, I
clerk will call the foil
The legislative clerk pro
the roll.
Mr. TOWER. Mr.
unanimous? consent t
Mr. JA
say only
So e motion to recommit was re-
jecte .
T e PRESIDING OFFICER. The bill
is en to amendment.
Mr. JAVITS. Mr. President, I ask unan-
ous consent that the order for the yeas
and nays on passage be vacated.
The PRESIDING OFFICER. Is there
objection to the request of the Senator
from New York? The Chair hears none,
and it is so ordered.
Mr. JAVITS. Mr. President, I assured
the leadership that we had no desire to
drag our feet on this matter. I consider
the vote that was just cast as deciding
the question, and am ready to vote on the
bill.
Mr. TOWER. Third reading, Mr.
President.
The PRESIDING OFFICER. The bill
is open to further amend. If there be no
amendment to be proposed, the question
is on the engrossment and third read-
ing of the bill.
The bill was ordered to be engrossed
for a third reading and was read the
third time.
The PRESIDING OFFICER. The bill
having read the third time, the question
is, Shall it pass (putting the question) ?
The bill (S. 2705) was passed as
follows :
5.2705
n act to provide for the disposition of aban-
doned money orders and traveler's checks
e it enacted by the Senate and House of
Be esentatives of the United States of
Ame a in Congress assembled, That
77NDINGS
SECTIc 1. The Congress finds and declares
that-
(1) the b ks and records of banking and
financial or nizations and business asso-
ciations engag in issuing and selling money
orders and traved is checks do not, as a mat-
ter of business pr ctice, show the last known
addresses of punch rs of such instruments;
f2) a substantia majority of such pur-
struments are purcha d;
(3) the States where the purchasers of
money orders and trove is checks reside
should, as a matter of equ y among the sev-
eral States, be entitled to the proceeds of
such instruments in the eve t of abandon-
ment;
(4) it is a burden on interst a oomme}ce
that the proceeds of. such inst ments are
not being distributed to the Stat s entitled
thereto; and
(5) the cost of maintaining and r trieving
addresses of purchasers of, money or rs and
ave consulted with my colleague
m-and I really feel
n any conceivable
through. If Senators will wait a moment,
we will be able to vote.
I just heard a statement that makes
me worried. I hope it is very clear that
the only thing I am arguing for is the
right and the power of the State. The
American Express Co. or any other issuer
of traveler's checks or money orders does
not get anything from this bill in either
case. The only matter concerned is what
State can escheat the funds, the State
of the domicile corporation or the State
where the money order or traveler's
check is issued.
My basic argument is against the 10-
year retroactivity. There is no question
about any money going to any corpora-
tion, the American Express Corp. or any
other corporation.
it is only an issue as to what State
gets it.
I wish to make it very clear, since I
thought there might have been some
question about it.
Mr. President, I am ready to vote on
the motion.
been
roll.
The as
the roll.
Mr.
the Senator from Oregon (Mr. PACK-
WOOD), the Senator from Illinois (Mr.
PERCY), and the Senator from North
Dakota (Mr. YOUNG) are necessarily
absent.
I further announce that, If present and
voting, the Senator from Arizona (Mr.
GOLDWATER) would vote "nay."
The result was announced-yeas 8,
nays 76, as follows:
[No. 46 Leg.]
YEAS--8
Buckley Fannin McClure
Case Hathaway Williams
Dole Javits
NAYS-76
Abourezk Bentsen Chiles
Aiken Bible Church
Allen Biden Clark
Baker Brock Cook
Bartlett Burdick Cotton
Beall Byrd, Cranston
Bellmon Harry F., Jr. Curtis
Bennett Byrd, Robert C. Domenicl
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
S2497
Dominick
Magnuson
Randolph
Eagleton
Mansfield
Ribicoff
Ervin
Mathias
Roth
Fong
McClellan
Schwel r
Griffin
McGee
Scott, ugh
Gurney
McGovern
Scot
Hansen
McIntyre'
Liam L.
Hart
Metcalf
S rkman
Hartke
Metzenbaum
afford
Haskell
Mondale
tennis
Hatfield
Montoya
Stevens
Helms
Moss
Stevenson
Hruska
Muskie
Symington
Hughes
Nelson
Taft
Humphrey
Nunn
Thurmond
Jackson
Pastor
Tower
Johnston
Pell
Tunney
Kennedy
Pro ire
Weicker
NO VOTING-16
Bayh
ravel
Pearson
Brooke
ollings
Percy
Cannon
Huddleston
Talmadge
Eastland
Inouye
Young
Fulbright
Long
Goldwate
Packwood
 traveler's ch Is an additional burden. on
interstate comme since it has been de-
CONGR.ESSI:ONAL RECORD - SENATE February 28, 19 74
DEFINITIONS
SEC. 2. As used in this Act-
bank, trust company, savings bank, s e de-
posit company, or a private banker c gaged
2) "business association" means Any cor-
poration (other than a public corporation),
joint stock company, business tr st, part-
nership, or any association for bu ness pur-
poses of two or more individuals and
(3) "financial organization" Cans any
sac ings and loan association., uildi rig and
loan association, credit union, r investment
company engaged in business n the United
States.
E ec. 3. Where any sum
money order, traveler's ehec
redly liable--
(1) if the books and ,,
ten instrument was
shall be entitled exclu
of such sum;
(2)' if the books
ing or financial o
sociation do not,
tion or busine
place of busin
(::) if
ing or fl
,i , /
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
or other similar
an a third party
ayable on such inst:ru-
of that State's power
nking or financial organiza-
association has its principal
ancial organization or business as-
show the State in which such
order, traveler's check, or similar
Instrument was purchased-and the
the State of purchase do not provide
escheat or custodial taking of tl]e sum
whip. the banking or financial organization
orb siness association has its principal place
of business shall be entitled to escheat or
taki custody of the sum payable or, such
m ey order, traveler's check, or similar wri.t-
stody of such sum, subject to the right of
e State-of purchase to recover such sum
ff and when the law of the State of purchase
makes provision for escheat or custodial
taking of such sum.
APPLICABILITY
SEC. 4. This Act shall be applicable to sums
payable on money orders, traveler's checks,
and similar written instruments deemed
abandoned on or after February 1, 1965,
except to the extent that such suns have
been paid over to a State prior to Janu-
ary '., 1974.
Mr. TOWER. Mr. President, I move to
reconsider the vote by which the bill was
passed.
Mr. SPARKMAN. I move to lay that
motion on the table.
The motion to lay on the table as
agreed to.
Mr. JAVITS. Mr. President, I ask unan-
imous consent that the RECORD show that
I voted "nay" on passage.
The PRESIDING OFFICER. The REC-
OR]) will so show. What is the will of the
Senate?
lair. ROBERT C. BYRD. Mr. President,
will call 0 6ing of raw cotton when performed at a
cotton warehouse or compress-warehouse fa-
cility, other than one operated in conjunc-
tion with a cotton mill, primarily engaged in
storing and compressing;
"(+;) exclusively ;o provide services neces-
sary and incidental to the receiving, han-
d11ng, storing, and processing of cottonseed
in ar, establishment primarily engaged in the
recei ring, handling, storing, and processing
of cottonseed: and
"(I)) exclusively to provide services neces-
sary and incidental "0 the processing of sugar
cane or sugar beets in an establishment pri-
marily engaged in the processing of sugar
cane >r sugar beets; and".
?t2) receiver for--
such eniplolnient by such employer
whiel. is in excess of ten hours in any work-
day, and
"(B) such employment by such employer
which is In excess of forty-eight hours In any
workweek,
compensation at a rate not less than one and
one-half time:: the regular rate at which he is
employed.
Any employer who receives an exemption un-
der this subsection shall not be eligible for
any other exemptoor under this section or
section 7.".
OTHER EXEMPTIONS
Sac. 23. (a) (1) Section 13(a) (9) (relating
to rno;ionpicture theater employees) is re-
pealed
(2) Section 13(b) Is amended by adding
after paragraph (25) he following new para-
graph:
"(26; any employee employed by an estab-
lishment which is a motion picture theater;".
(b) (:L) Section 1.' {a) (13) (relating to
small logging crews) is repealed.
(2) Section 13(b) hs amended by adding
after paragraph (26) the following new para-
graph:
"(27) any erriployee employed in planting
or tending trees, cruising, surveying, or fell-
ing timber, or in preparing or transporting
logs or other forestry products to the mill,
processing plant, railroad, or other transpor-
tation terminal, if the number of employees
employed by his employer in such forestry or
lumbering operations d>able.
The Committee recog-nized that a higher minimum wage may mean
increased employer costs, but it also means increased purchasing power
in the hands of the poor and a grearer demand for goods and services.
For the worker, it means less hardship and. greater dignity. For the
Ooveriunent, it means lower welfare costs. Under the requirements of
the Social Security Act with respect to Aid to Families with De.-
pendent Children, for a family of four headed by a woman working
'
fulltime a $.60 increase in the minimum wage would result in about a
$.40 reduction in assistance or a reduction of $69 per month or $832 a
Year. 't'here would be some variation among the states but. in 33 states
the full $(39 per month reduction will. be realized. Tn another 15 states
reductions of less than $69 per month would be realized.
Impact on, inflation
The economic effects studies previously cited in this section. also
completely discredit the thesis that minimum wage increases have any
discernible effect on inflation. Previous (1949-1956) increases in the
inininumi wage rate of greater percentage than provided in the pres-
i nt bill have been abso~bed easily by the economy, and there is no rea-
son to assume that a different result would obtain under this bill. In-
deed, an economist for the Chamber of Commerce, testifying before
this Committee in 1971, almost three years ago, took the position that
the increases in this 411, even in 1971, would not be inflationary. In
fact. the direct payroll costs of the Committee, bill will be only 0.4
percent of the total national wage bill in the first year, 0.3 percent in
the second year. 0.2 percent in the third year and less than 0.05 per-
cent in. i he fourth. year.
As previously noted, Congress :..n enacting Economic Stabilization
legislation. has consistently exempted low-income workers from any
wage controls.
In short, this bill is not inflationary.
Economic climate
The Committee leaves to the economists the art of predicting the
future. Instead the Committee looks back on what has actually been
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 :IC3IA-RDP75B00380R000800030001-4
happening and is disturbed that, despite the rapid growth of the econ-
omy, the unemployment rate has stubbornly remained at or near 5 per-
cent. Even the latest 5.2 percent figure is an understatement in that this
rate does not include those workers who are compelled to work part-
time because full-time jobs are not available. Nor does it measure
"discouraged workers"- those who want and need jobs but no longer
seek them because the situation is hopeless."
After-tax corporate profits in 1973 were up 26 percent over 1972 and.
1972 was up 16 percent over 1971 and 1971 was up 21 percent over 1970..
A comparison of the magnitude of these increases with the controlled
increases in average hourly earnings of nonsupervisory workers in
private nonfarm employment indicates the inequities which continue
to characterize our economic policies. Between 1972 and 1973, gross
average hourly earnings increased 6.6 percent on top of increases of
6.4 percent between 1972 and 1971 and 6.5 percent between 1970 and
1971.
TILE PRESENT ACT
An estimated 49 million nonsupervisory workers are presently sub-
ject to the minimum-wage provisions of the FLSA. This figure repre-
sents three-quarters of the employed nonsupervisory labor force.
However, significant coverage gaps still exist. In the private sector
for example, an estimated 11.7 million nonsupervisory employees are
not protected by the Federal minimum-wage standard. Of these, al-
most 61/2 million are employed in retail trade and service establish-
ments, 2 million are in domestic service, and about three-quarters of
a million are farm workers. The remainder are outside salesmen or are
engaged in certain miscellaneous activities.
In the public sector, about 60 percent of the nonsupervisory employ-
ees of Federal, State, and local governments are not subject to the
Federal minimum wage.
S. 2747 provides minimum wage protection for 6.9 million of these
currently exempt workers.
The gaps with respect to overtime coverage are even greater than
those with respect to minimum-wage coverage. Approximately 42.t
million nonsupervisory employees are subject to the overtime compen-
sation provisions of the Act. While three-fourths of all nonsupervisory-
workers are required to be paid at least the minimum wage, only two-
thirds are required to be paid time-and-one-half their regular rates
of pay for all hours over 40 in a week. In part, the more limited over-
time coverage reflects the fact that many of the workers who were
covered for the first time by the 1966 amendments to the Act were
guaranteed the minimum wage but were denied overtime protection-
S. 2747 provides overtime protection for 8.6 million of these
workers.
Reports from the Labor Department make clear that State laws der
little to fill the gaps in the FLSA in the case of the minimum wage and
even less where overtime is concerned.
MAJOR PROVISIONS Or TILE BILL
The bill provides for a statutory minimum wage of $2.20 an hour
for all covered workers but establishes different time schedules for
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
14
achieving this standard for various categories of employment. Funda-
mental to the Committee's deliberations was the notion of parity--
that, all workers should be treated alike for purposes of mini:rnum
wage. However, mindful of the historical development of the Fair
Labor Standards Act and in line with the need to mitigate the initial
impact of expanded coverage, the Committee provided for staged
increases in the. minimum wage depending upon when specific workers
were first brought under the Act:. All mainland nonfarm workers
covered prior to 1966 will attain a $2.20 minimum wage. one year from
the effective date. An additional step is provided for nonfarm wcrkers
newly covered under the 1960 and 1974 amendments. They will reach
parity with other workers at the $2.20 rate two years from the effective
date. Farm workers will achieve parity at the $2.20 rate three years
after the of eetive date. In addition, special provision is made for
achieving mininnarn wage parity for workers in Puerto Rico and the
Virgin Isl.auds.
A. On the effective (late (the first day of the first full month after
e actrnent). the bill requires that (a) employees in activities covered
prior to the 1966 amendments (and Federal government employees
covered by the 1966 amendments, other than employees of the Canal
lone), will be paid at least $2.00 an hour, (b) nonfarm employees in
activities covered by the 1966 and the 1974 amendments will be paid
$1.80 an hour (including Federal Government employees in the Canal
,one), and (c) farmworkers will be paid at least $1.60 an hour.
The iniple-nentation of the :first stage of the proposed 1974 arnend-
nments will mean that 3.4 million workers, or about 6 percent of the
~)6 million covered workers (including workers covered for the first
lime by the 1974 amendments) are to receive wage increases on the
effective date, although the annual wage bill will be increased by
only 0.4 of one percent :vi order to comply with the statute.
B. One year from the effective date, the bill requires that (a) em-
ldoyees in pre-1966 coverage activities and employees of the Federal
Government (other than Canal Zone employees) will be paid at, least
$2.20 an hour, (b) employees covered by the 1966 and 1974 amend-
anents (except farmworkers) will be paid at least $2.00 an hour, and
(c) farmworkers will be paid at least $1.80 an hour.
The second stage of the proposed 1974 amendments will mean wage
increases for about, 5 million workers and will require an increase :Ln
the annual wage bill of only 0.3 of one percent one year after the ef}ee-
tive date.
C. Two years from the effective date, the bill requires that the statu-
tory minimum wage of $2.20 an hour be paid to all employees (except
farm workers) covered by the Act including employees in 1966 and
1974 coverage activities. Farmnworkers are required to be paid at, least
$2.00 an hour.
This stage of the proposed 1974 amendments will require wage
increases for 3.2 million workers and an increase in the annual wage
bill of 0.2 of one percent.
1). Three years front the effective date the bill requires that a mini-
mum wage of $2.20 an hour be paid to farmworkers.
Tliis stage will require increases for approximately 184,000 workers
.and an annual wage bill increase of less than 0.05 percent.
The increase for most covered workers to $2 an hour immediately
is necessary if we are to reverse the recent upward trend in the
number of persons living in poverty. A further increase to $2.20 is
Approved For Release 2002/01/23: CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
15
essential if we are to guard against increasing the number of working;
poor next year. The Bureau of the Census reports that the number
of poor persons increased between 1969 and 1970 and again in 1971.
These increases are the first since poverty data were tabulated in 1959.
While the number decreased in 1972, the figure for 1972 was still above
the 1969 level.
The Bureau of the Census also reports that a non-farm family of
four requires an income of $4,275 per year in 1972 dollars, about $4,500
in 1973 dollars, to begin to lift itself above the government-defined
poverty line. Yet several million families-including those headed by
full-time year-round workers-have lower annual incomes.
If the conditions that poverty breeds in this country- are to be
changed poverty wages must be eliminated. These conditions will not
change unless the FLSA minimum wage is increased, because min-
imum wage workers rarely have the bargaining position or the skills
necessary to increase their wages as the cost of living increases. In
essence, Congress must act in the interest of the Nation's working
poor.
Of great importance, the Committee was well aware throughout its
deliberations that workers who toil at the minimum wage level
are poor people by the standards of our society. They are working
full-time, but they are poor. In the 1969 report on the minimum
wage, Secretary of Labor Wirtz stated that: "Poverty" is erroneously
identified in loose thinking with "unemployment." * * * "Whatever
basis there is in any of these criticisms or proposals (of anti-poverty
efforts) commends strongly a first stop of seeing to it that when a
person does work be gets enough for it to support himself and his
family." A gross weekly income of $64, which is all that the current
minimum wage provides to a full time worker, hardly meets that
criterion.
The Committee recognizes and the bill reflects an awareness that to
raise the minimum wage without expanding the coverage of the Act
would serve to deny even the minimum benefits of the Act to large
groups of workers who have been denied the protection of the Act
for more than 30 years.
Just as in 1961 and 1966, witnesses before this Committee described
the plight of workers who are excluded from the Act. And, as in 1961
and 1966, the Committee agreed that a further expansion of coverage
was essential if the basic objective of the Act-the elimination of
"labor conditions detrimental to the maintenance of a minimum stand-
ard of living necessary for health, efficiency and general well-being of
workers" was to be achieved.
The Committee was particularly impressed by the ease, with which
the economy adjusted to the 1966 amendments to the Fair Labor
Standards Act which provided for a substantial increase in cover-
a1ge-approximately 12 million workers-as well as an increase in the
minimum wage from $1.25 to $1.60.
The importance of the minimum wage to low wage workers was
described by then Secretary of Labor Shultz in his January 30, 1970,
report to the Congress on matters pertaining to fair labor standards.
He stated :
One of the major goals of this Administration is to get
people off the welfare rolls and on to payrolls. Once having
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 FIA-RDP75B0038OR000800030001-4
achieved that, unless the worker receives the minimum wage
he is more likely to fall back on the welfare rolls. Accord-
ingly, the vital and meaningful role of the Wage and Hour
Division continues to be the vigorous and effective enforce-
ment of the I+LSA to insure that employees receive at their
work places those rights which the Congress intended for
them.
In 1971 and 1972 then Secretary of Labor IIodgson submitted re-
ports to the Congress in which emphasis was placed on the importance
of the minimum wage increases and the absence of adverse effects. The
report for 1971. stated:
In -view of overall economic trends, it is doubtful whether
changes in the minimum had any substantial impact On wa.;e,
price, or employment trend's. Of much greater significance,
however, is the fact that the 15-cent boost did help two in 1-
Holt worker's recover some of the purchasing power eroded by
the steady upward movement of prices which had started even
before the enactment of the 1966 amendments.
The 1973 Report draws the following conclusions about the effects
of the final phase of the 1966 amendments:
On balance, the wage :increases granted to 1.6 million wor'c-
ers to meet the 11.60 minimum wage standard had no discern-
ible adverse effect on overall employment trends, and relr.-
tively little impact on overall wage or price trends.
The Committee reviewed present coverage, as well as the gaos
therein, and determined that a strong need exists for covering domes-
tics, additional workers in retail and service industries and in govern-
ment. The Committee also determined that local seasonal hand harvest
laborers should be included for purposes of the 500 rnan-day test,
which covers lame farms. The retention of the 500 man-day test pro-
vides that workers on small farms will not be covered. The Committee
carefully examined the economic implications of extending coverage
and was persuaded that wages should go up for workers on the lowest
rung of the wage ladder and that the economy could easily absorb these
raises. The Committee bill. would expand coverage as follows:
NUMBER OF NONSUPERVISORY EMPLOYEES
[in the usands]
Industry
Expanded
coverage
Present New coverage
coverage under S. 2747
All industries ___---------- ---------- .----------------------
56,304
49,427 6,F77
................------------------------------ -------------------
41,695
45,898 1,198
Retail trade ------------ ----------------------------
eptdomestic)
7,736
7,149 587
Do
____________________________
Do
ti
Do
ti
i
7,2
13
7,087 126
me
c ser
mes
c serv
mes
ce----------- ------------------------- ---------
All other--------- ------------------------ - - - - - - - -----------
1, 018
31,729
31,662 1,068
Public sector ------------ _____ ...........
8,608
3,529 5,079
F
d
-----------------
e
eral Government _ ----------------- --------------------
2,308
615 1
693
State and local government ----------------------------- .-----------
6,300
,
2,914 3,336
Note: Extimates reflect employment ii September 1973, except for agriculture (May 1973) and for education (Octoter
1973). Data exclude 2,147,000 outside salesmen.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 :1CIA-RDP75B0038OR000800030001-4
In addition to expanding coverage, the bill amends section 3 (s) by
changing the word "including" to "or," to reflect more clearly that the
"including" clause was intended as an additional basis of coverage.
This is, in fact, the interpretation given to the clause by the courts.
See, e.g., Wirtz v. Melos Construction. Co., 408 F.2d 626, 627 (C.A. 2) ;
Brennan v. Greene's Propane Gas Service 478 F.2d 1027 (C.A. 5)
Brennan v. Hatton, 474 F.2d 9 (C.A. 5) , Shultz v. Dean.-Hill Country
Club, Inc., 433 F.2d 1311 (C.A. 6), aff. per curiam 310 F. Stipp. 272
(F.D. Tenn.) ; Shultz v. Kip's Big Boy, Inc., 431 F.2d 530 (C.A. 5) ;
Clifton D. Mayhew, Inc. v. Wirtz, 413 F.2d 626 (C.A. 4) ; Hodgson v.
Jackson, 351 F. Supp. 291 (W.D. Va.). The bill also adds the words
"or materials" after the word "goods" to make clear the Congressional
intent to include within this additional. basis of coverage the handling
of goods consumed in the employer's business, as, e.g., the soap used
by a laundry. The "handling" language was added based on a retro-
spective view of the effect of substandard wage conditions.
While the original Act recognized the effect of such conditions on
subsequent interstate outflow of products, it was not until the 1961
amendments that Congress specifically recognized their effect on the
prior interstate inflow, based on the "obvious economic fact that de-
mand for a product causes its interstate movement quite as surely as
does production" (107 Cong. Rec. 6236). See H. IZept. No. 75, 87th
Cong., 1st Sess. (1961), pp. 3, 8; S. Tept. No. 145, 1st Sess, pp. 3-4;
107 Cong. Rec. 5841, 6234, 6236, 6240-6241. Although a few district
courts have erroneously construed the "handling" clause as being in-
applicable to employees who handle goods used in their empployers
own commercial operations (see, e.g., Shultz v. Travis-Edwvards, Inc.,
320 F.Supp. 384 (D. La.), revs'd on other grounds 465 F.2d 1050,
cert. den. 93 S.Ct. 685; Shultz v. Wilson Building, Inc., 320 F.Supp.
664 (S.D. Tex.),. aff'd on other grounds 478 F.2d 1090 (C.A. 5), cart.
den. 94 S.Ct. 156; the only court of appeals to decide this question,
Brennan v. Dillion, 483 F.2d 1334 (C.A. 10), and the majority of the
district courts have held otherwise (see e.g. Hodgson v. Pivermont
Corp. d/b/a Fox Meadows Apartments, 71 CCII Lab. Cas. ?32,898
(M.D. Fla.) ; Hodgson v. David M. Woolen & Son, 20 WI-1 Cases 91,
64 CCII Lab. Cas. ?32,527 (S.D. Fla.) ; Sharp v. Warner II olding Co.,
70 CCII Lab. Cas. ?32,821 (D.C. Minn. 1972) ; Mansdorf v. Ernest
Tew Associates, 69 CCH Lab. Cas. ?32,775 (M.D. Fla.. 1972) ; Hodgson
v. Howard d/b/a Howard Cleaners, 69 CCII Lab. Cas. ?32,777 (N.D.
Ala. 1972) ; Wirtz v. Washeterias S.A., 304 F.Supp. 624, 59 CCH Lab.
Cas. ?32,116 (D. Canal Zone 1968) ; Hodgson v. Keller d/b/a Plaza
Laundromat & Dry Cleaning, 20 WII Cases 1073, 70 CCII Lab. Cas.
?32,848 (D. Ohio 1973) ; Shultz v. Union Trust Banle of St. Petersburg,
397 F. Stipp. 1274 (M.D. Fla. 1969) and the addition of the words "and
materials" will clarify this point.
Retail trade and services (except domestics)
The Committee bill would extend the Fair Labor Standards Act to
employees of individual retail and service establishments (except
"Mom and Pop" stores) . which are part of enterprises with gross
annual receipts of more than $250,000. Under current law, individual
establishments which have annual receipts less than $250,000 are
exempt even if they are part of a chain which has annual receipts over
$250,000.
S. Rept. 93-690--2
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/231 CIA-RDP75B0038OR000800030001-4
Currently. the Act protects about 14.2 million nonsupervisory work-
ers in retail trades and services. The Committee bill would increase
coverag(k in these activities by 713,000 workers, exclusive of domestics.
The bill phases out by July 1, 1976 the $250,000 establishment test
Vor smaller stores of lame covered chains. Currently, two stores of
the same chain are treated differently under the Act. For example, if
a multi-million dollar chain has 10 stores, 9 of which have annual
sales in excess of .5+250,000 and one has receipts of less than $250,000,
the Act currently applies to employees of the 9 stores, but not to the
employees Of the smal _er store of the same chain. Employees in the
stores are currently guaranteed the protection of the FLSA, but
t {re employees of the 10th store have no such protection. This inequity
Would be rectified if all establishments of a covered chain were treated
((dually under the law.
The bill would not directly affect franchised or independently
owned small (less than $250,000 annual receipts) retail and service
firms nor would it extend coverage to the so-called "Mom & Pop"
stores.
This bill would not only protect many of the retail and service em-
ployees who were not benefited by the 1961 and 1966 amendments to
the Fair Labor Standards Act, but it would also protect medium size
shopkeepers. who are covered by the law, from being undercut by
retail or service establishments which xnay be part of mnltimilliorr
dollar enterprises, yet are exempt from the Act and pay subminimum
wages.
Once again the Committee looked to special reports of the Depart-
ment of Labor which were designed to determine how employers ad-
justed to the extensions of coverage, to retail and service activities in
1961 and 1966. Repeatedly these reports stated that employment in-
creased in activities newly covered by the FLSA. For example, the
Labor Department's nation-vide survey of restaurant employees
shows that employment increased by 3,900 workers between October
1960 and April 1967, the period spanning the effective date of the
initial phase of the 1966 amendments to the minimum wage law. The
Labor Department reported that the "largest employment increase oc-
curred in the South where the wage impact was greatest." It is ap;Dar-
ent, from the various reports that the retail and service industry has
adjusted to FLSA coverage with relative ease.
Drmestur, ser"d'~ce employees in privrxt~; households.
The bill would bring under the minimum wage and overtime pro-
visions of the Act all employees in private household domestic service
earning "wages" ($50 per quarter) for purpose of the Social Security
Act, but retains a minimum wage and overtime exemption for casual
babysitters and companions and an overtime exemption for live-in
domestic service employees.
The reasons for extending the minimum wage protection of the Act
to domestics are so compelling and generally recognized as to make it
hardly necessary to cite them. The status of household work is far
down in time scale of acceptable employment. It is not only low-wage
work, but it is highly irregular, has few if any non-wage benefits, and
is largely unprotected by unions or by any Federal or State labor
standards.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : Cf -RDP75B0038OR000800030001-4
In its 1974 Report to the Congress on Minimum Wage and Maxi-
mum Hours Standards under the Fair Labor Standards Act, the De-
partment of Labor summarized the findings in a nationwide survey
of wages, weekly hours of work and fringe benefits (including per-
quisites) for private household workers. The data relate to May
1971.
According to this Report, 2.4 million persons were employed as pri-
vate household workers in May 1971. Of these, about 600,000 were
babysitters with no housekeeping duties. Hourly earnings of the 1.8
million household workers (exclusive of babysitters) averaged $1.34
an hour. Thiry-one percent of the group were paid less than $1.00 an
hour and fifty-seven percent less than $1.50 an hour.
The survey also discloses the extent to which domestics have short
workweeks. More than half of all domestics were reported as working
less than 15 hours a week and only a fifth worked a, full workweek-
35 hours and over.
In developing estimates of the increases in labor costs which would
be required to raise the wages of domestics earning less than the pro-
posed minimum wage to the minimum wage, it is important to make
allowance for the value of certain perquisites which such workers
receive. The Fair Labor Standards Act makes provision for crediting
of non-cash wages toward complying with the minimum wage stand-
ard set by the statute. This means that the value of such items as free
meals, lodging, and transportation would have to be considered before
reliable impact figures could be developed.
It. is also important to note that even in a period of high unemploy-
ment such as exists today, the demand for household workers is not
being met. Bringing domestic workers under the Fair Labor Standards
Act would not only assure them a minimum wage but would enhance
their status in the community. It is expected that the supply of domestic
workers will increase as their pay and working conditions improve.
Minimum wages should serve to attract skilled workers to these jobs at
a time when the need for skilled domestic employees is greatly
increasing.
The impact of including domestic workers under the coverage of the
Act is extremely difficult to calculate. In its 1973 "4(d) Report" the
Department of Labor discussed a study done by Mattila, in which he
predicts a significant disemployment effect as a result of such coverage.
However, ifattila suggests that hours per day, and days per week of
work for maids would likely be reduced rather than maids being fired
as a result of minimum wage coverage. At the time, the Labor Depart-
ment qualified the predictions by pointing out that the effect of mini-
mum wage coverage will "be eroded over time by inflation," increases
in real income, and increased female participation in the labor force.
Six months later, when questioned as to how many household
worker jobs would be eliminated in rural areas, and as to what the
effect on the black female adult unemployment rate would be as a
result of coverage for domestics, the Department stated that it has "no
available reliable information." [Emphasis added.]
The Committee took notice of the fact that careers for women have
become increasingly common and that this occurrence is bound to lead
to an increased demand for domestic help in the homes of employed
wives and mothers. If an effective and dignified domestic work force
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/2 : CIA-RDP75B00380R000800030001-4
is to be developed, a living wage and respectable working Condit=ions
are vital. Now that Congress has sent to the States the constitutional
amendment guaranteeing equal rights to women, it would be hypo-
critical in the extreme to deny an appreciable segment of the femaie
work force, earning low wages, an opportunity to share in the rewards
of more meaningful employment under the protection of the Fair
Labor Standards Act.
The Committee is persuaded that objections to covering domestics
oa the ground of administrative complexity and difficulty of enforce-
ment are unacceptable reasons for cienyi.ng the benefits of the Act to
those most in need of such benefits. This Committee is convinced that
legislation which clearly expresses the intent of the Congress with
respect to fair labor standards for domestics will be followed by volun-
tary compliance on the part of most, housewives.
The term "domestic service" employees is not defined in the Act. The
Committee, however, has referred to the regulations issued under the
Social Security Act. ann. the generally accepted meaning of domestic
service relates to services of a household nature performed by an em-
ployee in or about a private home of the person by whom he or she is
employed. The domestic service must be performed in a private home
which is it fixed place of abode of an individual or family. A separate
and distinct dwelling maintained by an individual or family in an
apartment house or hotel may constitute a private home. However, a
dwelling house used primarily as a boarding or lodging house for the
purpose of supplying such services to the public, as a business enter-
prise, is not a private home.
Generally, domestic service in and about a private home includes
services performed by persons employed as cooks, butlers, valets, maids,
housekeepers, governesses, janitors, laundresses, caretakers, handymen,
gardeners, footmen. grooms, and chauffers of automobiles for family
use. The regulations issued under the Social Security Act also include
babysitters. See ? 31.3121 (a) (7)-1 (a) (2), It is not, however, the Conn-
ni ittee's intent to include within the term "domestic service" such activ-
ities as casual babysitting and acting as a companion. On the other
hand, the fact that a. person employed as a cook, maid, housekeeper, etc.
may also have duties relating to the care of children does not remove
that person from the category of a domestic service employee.
It is the intent of the Committee to include within the coverage of
the Act all employees whose vocation is domestic service. However, the
exemption reflects the intent of the Committee to exclude from cov-
erage babysitters for whom domestic service is a casual form of iem-
ployment and companions for individuals who are unable because of
age and infirmity to care for themselves. But it is not intended that
trained personnel such as nurses, whether registered or practical, shall
be excluded. People who will be employed in the excluded categories
are not regular bread-winners or responsible for their families' support.
The fact that persons performing casual services as babysitters or
services as companions do some incidental household work does not
keep them from being casual babysitters or companions for purposes
of this exclusion.
In cases in which the domestic service employee resides on the
employer's premises, the specific provision of the Secretary's interpre-
tative bulletin relating to hours worked by such an employee would
Approved For Release 2002/01/23 : CIA-RDP75B00380R000800030001-4
 Approved For Release 2002/01/23 : CA-RDP75B0038OR000800030001-4
be applicable (see 29 CFR 785.23). Ordinarily such an employee en-
gages in normal private pursuits such as eating-, sleeping, and enter-
taining, and has other periods of complete freedom. In such a case it
would be difficult to determine the exact hours worked. Accordingly,
any reasonable agreement of the parties which takes into consideration
all of the pertinent facts will be accepted as a proper basis for deter-
mining hours worked. This rule has been applied by the courts in
analogous cases, See, e.g., Skelly Oil Co. v. Jackson, 194 Okla. 183,
148 P.2d 182 (Okla. Sup. Ct. 1944).
The Committee is confident that appropriate methods to ensure
compliance can be fashioned within the authority of the Secretary of
Labor under the FLSA. The Committee calls attention, for example,
to the provisions of the law and the Secretary of Labor's regulations
which credit the employer with the reasonable value of board and
lodging furnished to an employee. These provisions, coupled with the
provision for an overtime exemption for live-in domestics, as provided
in the bill, will serve to minimize any problems which might arise in
the application of the law.
The Committee concurs with the philosophy expressed by Elizabeth
Duncan Koontz, former Director of the Women's Bureau of the De-
partment of Labor when she said in a speech in Anaheim, California
on Nov. 9, 1970 that household employment "needs a decent wage level,
good working conditions, and fringe benefits." She emphasized that
"First in importance is coverage under minimum wage laws."
The additional question of the constitutionality of coverage of do-
mestics was raised. The Committee found that domestics and the equip=
ment that they use in their work are in interstate commerce. For exam-
ple, vacuum cleaners are produced in only six States, and laundry
equipment is produced in only seven States, creating :a tremendous
flow in commerce of these items used daily by domestics. Also, it is
common knowledge that every domestic handles such items its soap,
wax, and other household cleaners which have moved in interstate
commerce (cf. Wirto v. Washeterias S. A., 304 F. Supp. 624 (D. Canal
Zone, 1968) ; Shultz v. Union Bank of St. Petersburg, 297 F.. Supp.
1274 (M. D. Fla. 1969) ). In. addition, employment. of. domestics in
households frees time for the members of. the household to themselves
engage in activities in interstate commerce.
The Supreme Court in Wickard v. Filburn, .317 U.S. 11 (1942),
held that wheat, grown wholly for home consumption was constitu-
tionally within the scope of federal regulations of wheat production
because, though never marketed interstate, it supplied the need of the
growers which otherwise would be satisfied by his purchases in the
open market.
In short, the committee is persuaded that coverage of domestic em-
ployees is a vital step in the direction of ensuring that all workers
affecting interstate commerce are protected by the Fair Labor Stand-
ards Act.
There can be little doubt, that the low wages now paid to domestics
as a group have a substantial effect on the economy and the fiscal and
tax policies of both the Federal Government and the State. Accord-
ing to estimates of the Department of Labor, the minimum wage rates
proposed for domestics in the Committee bill will place in the hands of
these low-income employees an additional $572 million during the first
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01f : CIA-RDP75B0038OR000800030001-4
year after a w effective date, $572 million plus an additional $140
million during the second year, and $572 plus $140 plus an additional
$145 million during the tl:ird year and thereafter.
That will represent a substantial increase, in purchasing power which
is bound to have salutary effects on the national economy, as well is
the economy of our central cities, where many domestic employees 1L\ e.
Furthermore. this additional income will serve to lessen welfare pay-
mciits to this category of employees, and should also serve to upgrade
the, status aad dignity of this type of work.
Over and above the di.?ect impact on interstate commerce which re-
sults from the low wages received by this large group of employees,
there can be little doubt that the deplorably low wages received by
domestics contribute substantially to the vicious poverty cycle, whell
has created such chaos in our central cities,.
Of particular concern is the fact that non-white persons living in
poverty increased by almost a half million between 1971 and 197'?,
according to a report of the, llepartlnent of Commerce. This increase
occurred at the same time that the number of white persons living in
poverty declined.
Our inability to end poverty in America has already had a pervasive
impact on the population characteristics of our cities. This in turn
has resulted in profound. changes in commercial, economic, social and
educational patterns throughout the country. These changes, and the
problems they have created, are not localized. Their solution demands
Federal, not merely local action, as Congress has already recognized
in enacting a myriad of programs dealing with such matters as hous-
ing welfare, education, transportation, manpower training and public
service employment.
Since domestic employment is one of the prime sources of jobs for
poor and unskilled workers, it is clear that there is an important na-
tional interest at stake n insuring that the wages received for such
work do not fall below a minimal standard of decency.
In this vein, the Committee took note of the expanded use of the
interstate commerce clause by the Supreme Court in numerous recent
cases (particularly Katrembac/z v. ?1tcCiang, 379 U.S. 294 (1964)) to
accord Federal protection to persons needing such protection.
Last year, the Senate rejected an amendment to strike coverage of
domestic employees, recognizing that domestic workers in households
are in need of this Federal protection. Connections with the, flow of
commerce, are both tangible and direct, providing a rational basis for
finding the requisite link to interstate commerce.
I'F.DEEAL, STATE, AND LOCAL GOVERNMENT EMPLOYMENT
S. 2747 extends FLSA coverage to five million non-supervisory em-
ployees in the public sector not now covered by the Act. Some 3.5 mil-
liom non-supervisory government employees, primarily employees in
state and local hospitals, schools, and other institutions, are already
covered. With enactme:at of the amendments contained in S. 2747.
virtually all non-supervisory government employees will be covered.
The Committee intends that the FLSA be applicable to non-super-
visory government employees at all levels of government.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : C RDP75B0038OR000800030001-4
The Committee bill sets a minimum wage for presently covered
Federal employees (except in the Canal Zone) at $2.00 an hour on the
effective date, and provides for an increase in the minimum to $2.20 at
the end of one year. For Federal employees newly covered by the pro-
posed 1974 amendments, for Canal. Zone employees, and for employees
of State and local governments, whether currently covered or newly
covered, the bill applies a $1.80 rate on the effective date and provides
for increases to $2.00 at the end of one year, and $2.20 at the end of
the second year.
Coverage of Federal employees is extended by the bill to most em-
ployees including wage board employees, non-appropriated fund em-
ployees, employees in the Canal Zone who are engaged in employment
of the kind described in sections 5102(c) (7) of title 5, TIS.C. and
any other civilian employees working for the armed services. Ex-
cluded from coverage are military personnel. Basically, the Commit-
tee did not intend to extend FLSA coverage to those persons for whom
the tangible benefits of government employment are of secondary
significance, for example Peace Corps and VISTA volunteers. By the
same token, the Committee intends to cover all employees (except
professional, executive, and administrative personnel who are ex-
emnp. ted under section 13 of the law) in all civilian branches of the
Federal Government.
The Secretary of Labor in 1973, reflected the Civil. Service Commis-
sion's view when he recommended against bringing Federal employees
under the coverage of the Fair Labor Standards Act. The Commis-
sion's position was that Federal. employees are already covered by
special pay provisions in title 5, United States Code, and that enact-
ment of this legislation would confuse the administration of these pro-
visions and could raise jurisdictional problems of administration.
The Committee resolved this matter by including Federal employees
within the coverage of the Act and charging the Civil Service Com-
mission with responsibility for administration of the Act so far as
Federal employees (other than employees of the Postal Service, the
Postal Rate Commission or the Library of Congress) are concerned.
It is the intent of the Committee that the Commission will administer
the provisions of the law in such a manner as to assure consistency
with the meaning, scope, and application established by the rulings,
regulations, interpretations, and opinions of the Secretary of Labor
which are applicable in other sectors of the economy. The provisions
of the bill would leave the premium pay provisions of title 5, United
States Code, in effect to the extent that they are not inconsistent with
the Fair Labor Sandards Act.
In addition, Federal employees serving as policemen, firemen, and
employees in correctional institutions are provided a special overtime
provision if under an agreement entered into between the employer
and the employee a work period of 28 consecutive days is accepted in
lieu of a workweek of 7 consecutive days and if overtime compensa-
tion is to be paid for employment in excess of 192 hours in such work
period during the first year, 184 hours in such period during the second
year, 176 hours in such period during the third year, 168 hours in
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/,43: CIA-RDP75B0038OR000800030001-4
such period during the fourth year, and 160 hours in such period
thereafter.
'['he Committee intends that the provisions of section 5341 of titl,a 5,
United States Code, requiring the section 6(a) (1) rate for prevailing
r:?atesysteni employees, will continue to apply.
There are a number of reasons to cover employees of State and local
Lrovermnents. The Committee intends that government apply to itself
the same standards it applies to private employers. This principle was
manifested in 1972 when the Senate overwhelmingly voted to apply
Federal equal employmant opportunity standards to public sector
employers. Equity denru.nds that a worker should not be asked to
work for subnrinimuur wages in order to subsidize his employer,
whether that employer is engaged in private business or in govern-
merit business. The Senate has also applied wage ceilings to the wages
paid public employees. The Committee sees no reason, therefore, why
the se employees should riot be protected by the wage floor provided
by the I{ LS.1.
The committee believes that there is no doubt that the activities
of public sector ernploy,-rs affect interstate commerce and therefore
that the Congress may regulate them pursuant to its power to regu-
late interstate comrrrerce. Without question, the activities of govern-
ment at all levels affect commerce. Governments purchase goods and
services on the open market, they collect, taxes and spend money for
a variety of purposes. In addition, the salaries they pay their em-
ployees have an impact both on local economics and on the economy
of the nation. as a whole. The Committee finds that the volume of
wages paid to government empoyees and the activities and magnitude
of all levels of government have an effect on commerce as well.
The Committee anticipates that the financial impact on local gov-
ernment units will be minimal.
The Department of Labor has supplied the Committee with fig-
ures on impact of minimum wage coverage on state and local gov-
ernments. They indicate that the cost of increasing state and local em-
ployees covered in 1966 and those covered in this bill to $1.80 per hour
will be .3% of the annual wage bill or $128,000,000. The following
year. there will be a .5% increase in the annual wage bill or $162,-
000,000.
The Committee has also made an effort to minimize any adverse
effects of overtime requirements by providing for a phase-in of those:
public employees who are most frequently required to work more that.
forty hours per week, the pub'.iic safety and fire fighting employees.
The bill includes a special overtime standard for law enforcement
and fire protection employees including security personnel in co rrec..
tional institutions. For such workers, if there is an agreement or under..
stranding with their employers the bill provides for a standard work
period of 28 days instead of the basic standard of a 7-day week for
purposes of determining overtime compensation. Time and one -haL'C
the regular rate of pay is required for all hours over 192 in the 28-day
period during the first year; over 184, during the second year; over
1.76, during the third year; over 168, during the fourth year; and over
160 hours at the beginning of the fifth year and thereafter.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CWRDP75B0038OR000800030001-4
The question of treatment of employees who work 24 hour shifts
was raised in the Committee. The matter of hours worked for such
employees has been treated by the Secretary of Labor for many years
with respect to 24 hour shift operations of nonpublic workers such as
telephone and power company employees and watchmen. These regu-
lations state the following :
INTERPRETATIVE BULLETIN ON HOURS WORKED
Sleeping Time and Certain Other Activities
Section 785.22 DUTY or 24 IIOURS OR MORE.
(a) GENERAL.-Where an employee is required to be on
duty for 24 hours or more, the employer and the employee
may agree to exclude bona fide heal periods and a bona fide
regularly scheduled sleeping period of not more than 8
hours worked, provided adequate sleeping facilities are fur-
nished by the employer and the employee can usually enjoy
an uninterrupted night's sleep. If sleeping period is of more
than 8 hours, only 8 hours will be credited. Where no ex-
pressed or implied agreement to the contrary is present, the 8
hours of sleeping time and lunch periods constitute hours
worked. (Armnour v. Wantocic, 323 U.S. 126 (1944) ; Skid-
more v. Swift, 323 U.S. 134 (1944) ; General Electric Co. v.
Porter, 208 F. 2d. 805 (C.A. 9, 1953), cert. denied, 347 U.S.
951, 975 (1954) ; Bowers v. Remington Rand, 64 F. Supp. 620
(S.D. Ill. 1946), aff'd 159 F. 2d 114 (C.A. 7, 1946), cert.
denied 330 U.S. 843 (1947) ; Bell v. Porter, 159 F. 2d 117
(C.A. 7, 1946), cert. denied 330 U.S. 813 (1947) ; Bridgeman
v. Ford, Bacon di Davis, 161 F. 2d 962 (C.A. 8, 1947) ; Rolecy
v. Day di Zimmerman, 157 F. 2d 736 (C.A.. 8, 1946) ; Mc-
Laughlin v. Todd d0 Brown, Inc., 7 W.H. Cases 1014; 15
Labor Cases para. 64, 606 (N.D. Ind. 1948) ; Campbell v.
Jones de Laughlin, 70 F. Supp. 996 (W.D. Pa. 1947).)
(b) INTERRUPTIONS or SLEEP.-If the sleeping period is in-
terrupted by a call to duty, the interruption must be counted
as hours worked. If the period is interrupted to such an extent
that the employee cannot get a reasonable night's sleep, the
entire period must be counted. For enforcement purposes, the
Divisions have adopted the rule that if the employee cannot
get at least 5 hours' sleep during the scheduled period the
entire time is working time. (See Eustiee v. Federal Cartridge
Corp., 66 F. Su.pp. 55 (D. Minn. 1946).)
The Committee intends this regulation to be applicable to the nu-
merous local firefighting units which work 24 hour shifts. It is the
Committee's expectation that the Secretary of Labor will exclude
from "hours worked" calculations, those regularly scheduled bona fide
meal periods and sleeping periods of not more than eight hours which
either the employer and employee expressly agree are regularly sched-
uled meal and sleep periods, or, where no such express agreement
exists, which can be assumed to be implicitly agreed upon by the em-
ployer and employee on the basis of the existence over a reasonable
period of time of regularly scheduled meal and sleeping periods.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/, 3 : CIA-RDP75B0038OR000800030001-4
CANAL ZONE
The bill raises the minimum wage iii the Canal Zone at the same rate
as the mainland, maintaining the historical parity between workers in
the Canal Zone and their counterparts on the mainland.
The Committee believes that current conditions do not warrant ex-
emppting the Canal Zone from minimum wage increases, or restricting
those increases in respect to mainland increases.
The argument was made to the Committee that further raises in
the minimum wage wou_d serve to accelerate the disparity in wage
rates between workers in the Republic of Panama and workers in the
Canal Zone.. In response to this same argument, the Senate, in the
19x7 Committee report on an amendment specifying the Congressional
intent that the minimum wage should apply to the Canal. Zone, stated
that :
It is generally agreed that relatively few Panamanian citi-
zens benefit by the present coverage of the minimum wage.
The continued application of the . . . minimum can hardly
be construed, therefore, as disrupting the economy of a nation
of 800,000 inhabitants. On the other hand, United States citi-
zens employed in the Canal Zone, may be adversly affected
by permitting the employment of competing local labor at
substandard rates of pay.
This Committee is aware of the opposition of the Department of
Slate and the Canal Zone Government to increasing the minimum
wage for Canal Zone workers but fails to find justification for this
position. By giving a minimum wage increase to these workers, the
Committee continues its long-standing practice of not discriminating
against these workers of the Canal Zone. Although the objections to
this increase are based on predictions of a $6 million annual increase
i n cost to the Canal Company and ultimately to the United States Gov-
ernment unless canal tolls are increased, the Committee finds this claim
difficult to believe in view of the fact that the average wage for a
manual laborer in the Canal Zone is already $2.10 per hour.
With respect to the question of increasing tolls, oversight of Canal
operations is not within the jurisdiction of this Comnuttee and we
take no position on that matter. We do note, though, that tolls have
not been increased during the, almost sixty years the Canal has been in
operation. We also note that the Canal Zone Government admits an
increase has been under active consideration for over two years and
was not initiated by anything this Committee has done with respect to
the FLSA.
Finally, we note that the Government of the Republic of Panama
Lois flatly stated that failure to increase the minimum wage appli-.
cable in~the Canal Zone along with that applicable in the United
Mates Will adversely affect relatiors between our two countries.
'i' II: NEE:) lot' NE IV ENFORCEMENT PROVISIONS
The amendment on the maintaining of suits by state employees was
recommended by the Department of Labor and unanimously concurred
io by the Committee and was made necessary by the Supreme Court's
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 :21;IA-RDP75B00380R000800030001-4
opinion in Employees of the Department of Public Health and lWel-
fare of Missouri v. Department of Public Health and Welfare of
Mllissouri, U.S. (1973). There, the court held that Federal
Court suits for enforcement of the FLSA brought by state employees
pursuant to Section 16(b) of the Act could not be' maintained and
did so on the express ground that the Act does not authorize them.
(W) c. have not found a word in the history of the 1966 amendments
to indicate the purpose of Congress to make it possible for a citizen
of that state or another state to sue the state in the Federal Courts."
(Slip op. at p. 6.) This amendment makes this committee's and Con-
gress' intent clear.
The amendment provides that employees of a public agency (de-
fined to include the Government and agencies of the United States, a
State or political subdivision, or any interstate governmental agency)
may maintain an action against that public agency under section
16(b) in any Federal or State court of competent jurisdiction, and
suspends the statute of limitations to preserve rights of actions of
State or local government employees which would otherwise be barred
as a result of the Supreme Court's decision. It is emphasized that this
provision is a limited suspension of the statute of limitations and is
applicable only to certain public employees.
The Court did not question its earlier decision in Maryland v. Wie^tz
which upheld the extension of the Act to state-operated schools and
hospitals. Nor did the Court indicate that, although Congress could
thus extend coverage, it is powerless to provide what Congress con-
siders meaningful and necessary enforcement devices. Indeed, the
majority opinion suggests the contrary when it refuses to infer, in the
absence of clear language to this effect, "that Congress conditions the
operation of these facilities on the forfeiture of immunity from suit
in a federal forum." (Id. at slip op., pp. 6-7.)
Experience under the 1966 Amendments has shown that voluntary
compliance with the Act's requirements cannot be expected from the
state so as to render enforcement mechanisms unnecessary. Experi-
ence during that same period demonstrates that the enforcement capa-
bility of the Secretary of Labor is not alone sufficient to provide, re-
dress in all or even a substantial portion of the situations where com-
pliance is not forthcoming voluntarily. Since the 1974 Amendments
extend FLSA coverage to additional state government employees, it is
now all the more necessary that employees in this category be em-
powered themselves to pursue vindication of their rights.
S. 2747 does not change the basis under which agricultural em-
ployers become subject to the FLSA. The requirement remains at
least 500 man-days (one-man-day being any day during which an em-
ployee performs any agricultural labor for not less than one hour)
during the peak quarter of the preceding year. However, S. 2747 does
alter the computation of man-days by adding to the definition of "em-
ployee" the previously excluded group of all local, seasonal hand-
harvest laborers. The effect will be to increase the number of covered
fauns, but its percentage vis-a-vis all farms in the nation will remain
relatively small. At present, only 3% of all farms are under the FLSA
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23,, CIA-RDP75B0038OR000800030001-4
(28,000 of the 907,000 farms which had employed one or more hired
farmworkers). Even with the new computation well over 90% of the
country's farms will remain outside of minimum wage standards.
The intention. reflected by S. 2747 is to preserve the historical e ;emp-
tion of the family owned and operated farm. Thus the Department of
Labor estimates that agricultural enterprises which employ up to seven
employees would on th3 average remain outside of the Act. The family
of the employer-owner is also exempt from both the man-hour compu-
tation and the minimum wage standard.
Although local, seasonal hand harvest laborers are. included n the
new man-day count, they will continue to be exempt from the mini-
mum wage as will farmworkers under 16 if they are working with a
parent, and are paid the adult piece rate. All child labor prohibitions
would be applicable.
Contrary to the ofte-a made statement that increasing the minimum
wage for farmworkers would, have a depressant effect on the total
agricultural labor force, facts indicate that the farmworkers most
affected by the minimum wage rate have fared better than the overall
agricultural labor force. Thus, despite an overall drop in farm employ-
ment of 16% between 1968 and 1971, the decline in employment on
noncovered farms wat? more than that for covered farms (21% v.
(%0.)
S. 2747 provides parity for covered farmworkers. Under this, pro-
posal the Fair Labor Standards Act (FLSA) would be amended to
achieve a $2.20 minirrum wage for all covered workers, including
those employed in agriculture.
To facilitate adjustreents to this new concept of wage equality, a
period of staged increments has been introduced. The schedule would
he as follows : $1.60 during the first year after the effective date, $1.80
during the second year, $2.00 during the third year, and $2.20 there-
after.
Prior to 1966, farm workers had never received any federal mini-
mum wage protection. In that year, the first such standard for agricul-
tural employees was established at $1.00 per hour. The current rate
of $1.30, a result of a two-year adjustnment from the 1966 rate., still
leaves farmworkers more than 20 percent, behind the mainstream of
covered employees, whose present minimum wage rato of $1.60 is
already economically passe.
Ironically, though one of the hardest. working members of the
American labor force, the farmworker is also one of its poorest mem-
bers. The typical full-time farmworker, who according to the Depart-
ment of Labor averages 1,500 hours per year, can not meet even the
poverty level ($3,643 in 1972: for a farm family of four) at today's
wage rates. An estimated 17% of the covered farmworkers earn less
than the proposed first year minimum of $1.60. Even with the proposed
increment schedule, a :farmworker will still not be able to bring his
or her family above the subsistence level without having either multi-
pie jobs or a fanuly with multiple wage earners.
Over a 20-year period (1949-1969) farm labor costs (the total wage
bill) increased 17 percent from $2.8 billion in 1949 to $3.3 billion in
1969. By way of comparison, total farm production expenses rose from
$18 billion to $38.7 billion-an increase of nearly 116 percent, durin;;
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : A-RDP75B00380R000800030001-4
the same period. While food prices have been rising rapidly during
the past several years, in light of the above figures, wages paid to farm-
workers cannot be held to be the reason.
Statistics from the Department of Agriculture show that in 1971,
wages paid to hired farmworkers ($3.8 billion) represented about 8
percent of the farmer's total cash receipts from marketings ($53 bil-
lion), as opposed to a 14 percent figure. for 1950.
USDA reports that the farmer's share of the retail cost of the mar-
ket basket was 38 percent in 1971. Thus, the weighted cost for farm
labor represented only slightly more than 2 percent of the retail cost
of food to the average consumer, or slightly less than $25.00 per year.
(The retail cost of the market basket for 1971 was $1,244.00).
Department of Labor, Employment Standards Administration,
calculations indicate that under S. 2747 the annual wage bill increase
for farmworkers will be 1.4 percent for 1974, 1.7 percent for 1975, 2.2
percent for 1976 and 2.4 percent for 1977. If all other factors are held
constant, compounding the annual wage bill increases over the four-
year period would result in a net rise of only two-tenths of one cent
(from the present 2.1 cents to 2.3 cents) of each food dollar directly at-
tributable to wages paid to hired farm labor.
Despite the alarmingly high rate of food price increases during the
last few years, it should be noted that the percent of money expended
for food relative to per capita disposable income has continued to drop
steadily from 17.7 percent in 1967 to 15.6 percent during the first quar-
ter of 1973. While this is small solace to the consumer who must con-
tend with more than just food expenditures, it does indicate the min-
imal impact of an increase in the minimum farm wage on the con-
sumer's food dollar.
CHILD LABOR IN AGRICULTURE
S. 2747 amends the Fair Labor Standards Act by prohibiting the
employment in agriculture of all children under the age of 12, except
those working on farms owned or operated by their parents, or on
farms not covered by the Act under the 500 man-day test, or on con-
glomerate farms, and that parental consent shall be required for chil-
dren on non-covered farms. Children ages 12 through 15 will be per-
mitted to work only during hours when school is not in session, pro-
vided that all 12 and 13 year olds must either receive written parental
consent or work only on farms where their parents are employed.
Presently there are no prohibitions against child labor in agricul-
ture, except those concerning children under 16 years of age working
when school is in session, or engaging at any time in certain hazardous
occupations. S. 2747 makes no change in the existing FLSA provision
regarding hazardous occupations.
The Committee's bill adds two new administrative provisions in an
effort to strengthen and promote vigorous enforcement of the child
labor restrictions. S. 2747 proposes civil penalties up to $1000 for any
violation of the child labor provisions under FLSA. In addition, the
Secretary of Labor will be authorized to issue regulations requiring
employers to obtain proof of age from all prospective employees cov-
ered by the child labor portions of the FLSA.
Thirty-five years ago, Congress reacted to a national outcry by
banning industrial child labor. However, since 1938 the nation has per-
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/231 CIA-RDP75B0038OR000800030001-4
in itted in the fields what it has prohibited in the factories oppressive
and scanadalous child labor. This Committee once again urges that
this shameful double standard be no longer tolerated.
For the past decade, hearings in both houses of Congress have
amply docuurent;ed the tragic and disgraceful situation regarding child
labor, in agriculture. Basically, there emerge three reasons--each one
sufficient by and of itself, as to why child labor in agriculture :in its
present form must be ended: (1) it is physically and mentally detri-
mental to the health and well-being of the children; (2) it is a social
depressant, stunting the intellectual growth and opportunity of those
subject to this vicious cycle; and (3) it is, as was industrial child
labor years before, economic exploitation of human resources.
Department of Labor statistics for 1970 showed an 18% increase
in the number of minors found to hive been working illegally on farms
over the previous year. Fifteen percent of these violations were for
children nine years of age or less.
In the National Safety Council's annual book "Accident Facts,
1.970," statistics show that out of 14,200 occupational deaths in 1969
in a total work force of 79 million people, agriculture, which employe+.1
only 3,800,000 workers., accounted for 2,500 deaths (as well as 210,000
disabling injuries). Manufacturing by comparison with its nearly 20
million workers accounted for 1900 occupational fatalities. Indeed,
after construction and mining, agriculture is the next most hazardor-_s
industry.
Though exact figures are difficult to come by, it is estimated tln.t.
between one-third and one-fourth of all hired farmworkers are c.hi l-
dren under 16. One estimate by the Department of Agriculture in 1970.
put the number around 800,000. Of this number, 375,000 are said to be
between 10 and 13 years old. The Department of Labor statistics indi-
cate that children generally, and specifically in agriculture have more
than their share of ace.idents, For example, an analysis of fatal farm
tractor accidents in Ohio for the 10-year period, 1956--65, shows that
19 percent of the victims were under 16 years of age.
Medical evidence as vo the unhealthy effect of child labor in agricul-
ture is so clear and convincing it would seem unnecessary to emphasize
the point. Yet there are those who contend that such work is to the
contrary, a healthy experience. Chagrined by this attitude, a member
of the migrant labor committee of the American Academy of Pediatrics
found it incredible the, in this "enlightened age" new medical evidence
should have to be presented to show the harmful effects of child labor
under conditions which have bee: laboriously documented over the
years.
In 1970, an investigating committee of pediatricians in Texas re-
ported that almost every child farniworker examined has some physical
defect. The doctors noted that the children were undersized, thin,
anemic and apathetic. They discovered many cases of back, hip and
'lower extremity pain in their children which resembled degenerative
osteoarthritis, usually found in older people.
A 1972 Report by the International Labour Office entitled "Mini-
rnun2r Age for Admiss:.on to Employment," stated :
* y_ * concerning children in agricultural employment, it is
worth emphasizing that, contrary to traditional ideas on the
healthful nature of farm work, modern agriculture exposes
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : IA-RDP75B00380R000800030001-4
workers to at least as much physical risk as most other sec-
tors. This is not only a matter of heat, sun, dust and insects
or the strains caused by stooping and lifting: the increasing
mechanization of agriculture has made it an especially haz-
ardous occupation. The dangers created by the use of power
driven machinery, such as harvesters, threshers, reapers,
tractors, are obviously all the greater for children and young
persons. * * *
The educational level of adult farmtivorkers was the lowest of all
major occupational groups, 8.4 years of school versus an average of
12.2 years for all workers. Children of these farmworkers, especially
those of the migrants have few educational opportunities and lower
educational attainment than any other group of American children.
Based on Department of Labor 1970 figures, over half (57%) of those
children found illegally employed on farms were below normal school
grade level. For migrants 68% of such children were below average,
grade 86% of the 14-year olds and 91% of the 15-year olds below proper
grade level (from one to three grades).
In many cases, States and local authorities only aggravate this de-
plorable situation. In some states, children of migratory laborers are
exempt from compulsory education laws.
Finally, it is clear that the employment of children in agriculture
is not only a direct source of cheap labor, but has the effect of depres-
sing the average adult wage as well. Thus, the poor farmworker family
is often forced to acquiesce in the exploitation of his own children
because of the meager wages received by the family's adult workers.
Employers of farm labor argue that children are needed because of
a shortage of farmworkers. Yet figures show that it is the farm labor
demand, rather than the supply, which has been decreasing. Chang-
ing agricultural technology, not the lure of urban industry has shrunk
the pool of farmworkers.
There would be no farm labor supply problem if the exploited
children were removed from the labor force, and a decent adult work-
ing wage were substituted. The committee has concluded that the price
of keeping agricultural operating costs down and fighting inflation can
no longer be the sight of an eight-year-old child crawling in 100? heat
for ten hours. The fresh-air sweatshop should become a thing of the
past.
The bill provides for the gradual achievement of minimum wage
parity for workers in Puerto I`tico and the Virgin Islands with workers
on the mainland.
The minimum wage for certain hotel, motel, restaurant and food-
service employees, as well as employees of the Federal and Virgin Is-
land governments, will be the same as the minimum wage for counter-
part mainland employees on the effective date.
For other covered workers in Puerto Rico and the Virgin Islands,
S. 2747 provides as follows :
(1) Effective on the effective date of the legislation, presently
covered employees are to receive the following increases :
(A) an increase of 12 cents an hour if their wage order rates
are less than $1.40 an hour ; and
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/233 CIA-RDP75B0038OR000800030001-4
(13)) an increase of 15 cents an hour if their wage order rates
are 11.40 an hour or higher.
(2) Newly covered ernh.oyees (including commonwealth and
municipal employees) are to have their wage rates set by special
industry committees and. this wage rate may not be less than
60 percent of the otherwise applicable rate under section 6(b) or
$1.00 an hour, whichever is greater.
(3) All employees (other than commonwealth and municipal
employees) will receive, beginning one year after the effective
date of this leg islation, yearly increases as follows :
(A) increases of 12 cents an hour per year if their wage
order rates are less than $1.40, and
(B) increases of 15, cents an hour per year if their wage
order rates are $1.40 an hour or higher.
Under this provision, when an employee's wage rate reaches
$1.40 that employee: will then receive the 15 cents annual increase-.
If such an increase for any employee will result in a wage order
rate less than 60 l:ereent of the otherwise applicable minimum
wage or S1.0o an hour, whichever is greater, then the increase for
such employee will be such greater figure.
(4) If a prescribed increase in the wage order rate of an em-.
ployee would result in a rate equal to or greater than the otherwise
applicable minimum wage rate of section 6 (a) or (b), the mini-
mum wage rate for that employee will be governed by such section
and such employee will no longer be. covered under a wage order,
(5) It is made clear that special industry committees may, in.
accordance with section 8, also provide increases in wage order
rates (including rates for commonwealth and municipal em-
ployees).
(6) The authority for hardship review of the increases by spe-
cial committees is discontinued.
The bill also provides that special industry committees shall
recommend the otherwise applicable rate under section 6(a) or 6(b)
except where substantial documentary evidence, including pertinent
financial information, demonstrates an inability to pay such rate.
The bill further prow des that a court of appeals may upon review
of a wage order specify the mininium wage rate to be included in
in such wage order.
Provisions permitting the setting of lower rates by industry com-
mittee in Puerto Rico and the Virgin Islands were incorporated into
the FLSA in June 1940, almost. 32 wears ago. However, from the out-
set a clear intent has been manifest in the FLSA to achieve ultimate
parity. Section 8 (a) of the Act sets forth this policy :
The policy of this Act with respect to industries or enterprises
in Puerto Rico and the Virgin Islands engaged in commerce or
in the production of goods for commerce is to reach as rapidly as
is economically feasible without substantially curtailing employ-
ment the objective of the minimum wage prescribed in paragraph
(1) of Section O (a) in each such industry.
In the course of various evaluations of the industry committee pro-
cedures, questions have been raised as to whether a need still exists for
such special industry committee action. The procedure has been criti-
cized as time-consuming, costly and unfair to mainland employers.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : 8YA-RDP75B0038OR000800030001-4
Opponents of the present procedure have also noted how little progress
has been made in raising the wage floor in some industries, despite
improved economic conditions, and substantial increases in produc-
tivity.
The Committee was persuaded to provide for eventual parity for a
wide variety of reasons. Consideration was given to the fact that the
cost-of-living has been rising almost as rapidly on the Islands as on
the mainland. For example, the Consumer Price Index (1967=100)
for all items in 1972 was 117.9 in Puerto Rico and 125.3 on the main-
land. Moreover, the index of food prices was 122.9 in Puerto Rico
as compared with 123.5 on the mainland; the index of transportation
prices was 116.6 in Puerto Rico versus 119.9 on the mainland. And for
personal care, the Puerto Rican index was 118.6 as compared with
119.8 on the mainland. In addition, profit margins of establishments
in Puerto Rico are usually greater than for their national counter-
parts, and employers enjoy special advantages, such as exemption
from Federal income taxes, subsidies, and exemption from local in-
come taxes for a period of from 10 to 17 years, depending on location.
The schedule for achieving parity, as set forth in the bill, makes it
possible for employers to make long-range plans for adjusting to
the scheduled wage changes. The increase in wage order rates of 12 to
15 cents an hour on the effective date (for most activities) on the
Islands is less than the increase in the mainland. It is recognized that
many of the employers in Puerto Rico and the Virgin Islands who
have been covered by the FLSA since its inception could adjust to
a $0.40 an hour minimum wage increase. on the effective date with
ease. However, a more modest increase was decided upon to insure
that the increases would proceed smoothly and that substandard
wages would be eliminated by a predetermined target date.
The Committee was impressed by the extensive financial and tax
incentives designed to attract business to Puerto Rico. In "A National
Profile of Puerto Rico" (March 1971), Ernst and Ernst described in
detail the various benefits to business of locating in Puerto Rico
ranging from "100 percent exemption from income tax on industrial
development income for qualified firms" to such special location in-
eentives for operations in areas outside of metropolitan San Juan as
offsets for costs of training, salaries, rents and mortgages. The Com-
mittee compared the advantages designed to attract business to Puerto
Rico with wage data in the summary on labor, in Ernst and Ernst. In
this summary, the average hourly wage in 1969 for 20 industry groups
in Puerto Rico is shown at $1.82. The comparable figure for the main-
land is given as $3.10. The Committee's intent is to improve the status
of the Puerto Rican worker; parity with mainland workers with
respect to the minimum wage is a necessary first step.
In 1972, the Senate rejected an amendment to limit the wage in-
creases in Puerto Rico and the Virgin Islands by a vote of 62-30.
EXEMPTIONS
S. 2747 repeals or modifies a number of the exemptions presently
incorporated in the Fair Labor Standards Act, including some of the
complete minimum wage and overtime exemptions as well as some
which apply only to the overtime standard.
S. Rept. 93-690-0
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 CIA-RDP75B00380R000800030001-4
The FLSA is a complex piece of social legislation. In large part the
complexity of the law is an outgrowth of compromises entered into
over a 30-year period in order to achieve, to the fullest extent possible,
the basic purposes of the Act.
Careful review led the Committee to conclude that a number of the
exemptions presently incorporated into the Act should now be elim:L-
nated or sharply modified. The Committee accepts as simple equity
the basic concept that all workers are entitled to a meaningful mini-
mum wage and to premium pay for overtime work. The Committee
generally approached the matter of special exemptions by applying
a simple rule. Unless the proponents of an exemption made the case
for continuing the exemption in its present form, it was modified or
removed. The Committee is aware that the low-wage worker, whose
economic status is in large part determined by the FLSA, does not
typically communicate with the Congress either by testifying on bills
or by writing letters outlining his position on the legislation. As in the
past, the Congress must represent the public conscience in the matter
of the low-wage workers and minimum wage legislation.
The Committee is aware that the Department of Labor has been
studying these exemptions over the years and many reports have been
submitted to the Congress recommending that these exemptions be
eliminated, phased out or modified. However, the Congress has taken
action to remove only a limited number of special exemptions over
the years.
Each time that the Act has been amended most of the special e:K-
emptions have been ignored. In large part, this reflected the fact that
amendments to the Act are not enacted until the level of the minimum
wage is obsolete and the primary attention of the Congress has been
limited to raising the minimum wage to a meaningful level. Only in
the course of enacting the last two series of amendments-1961 and
1966-did the Congress expand coverage at the same time as it raised
the minimum wage. Although the question of whether a need for many
of the special exemptions still existed was raised and there was rec-
ognition that there was no justification for continuing at least many of
them, action was postponed.
This Committee can see no justification for further delay. The re-
search surveys conducted by the Department of Labor have been
summarized in special reports to the Congress as part of the annual
submission under Section 4(d) of the FLSA. The special economic
evaluations and appraisals were included in the Annual Reports of the
Administrator of the Wage and Hour and Public Contract Divisions
of the Department of .Labor.
Included among the research surveys were studies on motion pic-
ture theaters, small logging, agricultural processing, state, county, and
municipal employees, motor carriers, domestics, food service employ-
ees, and tips as a part of wages.
The administrative studies conducted by the Department of Labor
have run the gamut of studies from those designed to expand cover-
age to include all activities "affecting commerce" to studies of how best
to amend the statute to insure that employees are actually paid the
back wages found due them under the statute.
The Committee believes that these matters have been studied too
long and that steps to correct injustices must be taken now. The, Com-
Approved For Release 2002/01/23 : CIA-RDP75B00380R000800030001-4
 Approved For Release 2002/01/23 : PA-RDP75B00380R000800030001-4
mittee notes that Secretary Brennan agreed in part with the view of
the majority when lie appeared before this Committee on June 7, 1973.
He said, in part :
... one aspect of the Fair Labor Standards Act that gives
me concern is the provisions which give certain industries
exemptions from the minimum wage and overtime standards
and in some cases just the overtime standard.
The Committee has concluded that certain exemptions can be elimi-
nated or modified at this time without harm to the industry involved.
STUDY OF ECONOMIC EFFECTS OF CHANGES MADE BY THIS BILL.
AND OF REMAINING EXEMPTIONS
The bill provides for a special study by the Secretary of Labor, in
addition to his usual annual report of the justification, or lack thereof,
for all the minimum wage and overtime exemptions remaininunder
sections 13(a) and 13(b) of the FLSA. The Secretary's report-on this
study is due by January 1, 1976. Many of the remaining exemptions in
section 13(a) and (b) have been in the law since 1938, and the Com-
mittee believes that each of them should be reviewed in the light of
current conditions.
Motion picture theaters
S. 2747 repeals the minimum wage but retains the overtime exemp-
tioi:i currently applicable to all employees of motion picture theaters.
Approximately 59,000 workers are currently denied the protection of
the FLSA because of this blanket exemption.
A 1966 study of motion picture theaters by the Department of Labor
disclosed the prevalence of extremely low wages in the industry. While
motion picture projectionists were paid well above the minimum wage,
most employees were paid substandard wages. Concession attendants,
cashiers, ushers, and janitors were paid well below the minimum wage.
In 1961, when motion picture theaters received a special minimum
wage and overtime exemption, the poor economic condition of the in-
dustry was cited by industry representatives as a major reason for the
exclusion.
This argument was repeated in 1966 when the Congress was con-
sidering amendments to the FLSA which would have eliminated this
exemption. Industry representatives argued against removing the ex-
emption on the basis that increased labor costs could not be passed on
to consumers in the form of higher admission prices by motion pic-
ture theaters because of the depressed state of the industry.
However, the validity of this argument is now open to serious chaI-
pnge. Price data published by the Bureau of Labor Statistics of the.
Department of Labor indicate that indoor movie admission costs have
increased by 39 percent between 1967 and the beginning of 1972. Ad-
mission costs in drive-in movies have increased even more- - 43 percent
since 1267. These increases were far in excess of price increases for
productsgif covered industries and for almost all services covered by
the Act.
The Congress has long reco iiized the need for minimum wage pro-
tection for er:iiployees in motion picture theaters. Conditions in the
industry and the present price structure indicate that removal of this
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
36
exemption would bring substantial benefits to low-wage workers and
could be easily absorbed by the industry.
Small logging crews
The Committee bill removes the minimum wage exemption currently
available to forestry and lumbering operations with 8 or fewer
employees but retairs an overtime exemption for such lumbering
operations.
Prior to the 1966 amendments, the exemption applied to employers
with 12 or fewer employees. In enacting the 1966 arnendrtier, is the
Congress reduced the 12-man teti. to an 8-man test and the House
Committee report commented on the change as follows :
The decision on eight employees was made after careful
ronsidc'vat,ion an(_ investigation of conflicting facts. T},.e
'Committee believes the eight-roan criterion to be a souncl
basis for exemption at the present time, but intends to further
investig"ite these logging operations.
According to the Department of Labor, about 42,000 employees are
currently exempt under this pro`ision. Many of these workers are
paid very low wanes and are, in effect, being asked to subsidize their
employers.
The Committee found no adverse effect when minimum wage and
overtime protection wc,s extended to employers with 8-12 workers.
However, em ployees of such loggers did benefit significantly from the
protection of the FLSA. The Committee is persuaded that all log..
ging employees should enjoy the minimum wage protection of the
Act, and that this can be accomplished with ease at this time. The
Committee was not satisfied drat it case had been made for a con-
tinued minimum wage exemption. The Committee considered remov-
ing the complete minimum wage and overtime exemption but elected
to retain the overtime exemption at This time. This continues the grad-
ual approach to full coverage which has been applied to this industry.
The Committee considered the recordkeeping problems raised'. by
the industry but concluded that current Department of Labor regula-
tions on this point offered sufficient flexibility to meet, the legitimate
needs of this industry. The Committee noted in this regard that small
loggers have been able to keep tax records and complex piece-rate
records for some time.
Shade-grown tobacco
S. 2747 would remove, the special minimum wage but retain the
overtime exemption applicable to employees engaged in the processing
of shade-grown tobacco prior to the stemming process for use as a
cigar wrapper tobacco.
Prior to the Mitchell v. Budd, 350 U.S. 473 (1956) decision, it hed
been held that the processing of shade-grown tobacco was it contin:ta-
tion of the agricultural process and hence came within the scope c> the
term, "agriculture,." However, the U.S. Supreme Court ruled that
workers engag ed in processing leaf tobacco for cigar wrappzrs after
delivery of the tobacco to bulking Mans were not engaged in agricul-
t'ire and were. not exempt as agmcultnrsi employees, regardless of
whether (1) the plants were operated exclusively for the processing of
the tobacco grown by the operators, or (2) the employees who worked
on the farms where the tobacco was grown also worked in the plants
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 :RIA-RDP75B00380R000800030001-4
processing the tobacco. The Supreme Court decision laid particular
emphasis on the fact that the processing operations substantially
change the natural state of the leaf tobacco and that the farmers who
grow the tobacco do not ordinarily perfom the processing. Typically,
this work is done in bulking plants.
The 1961 amendments to the FLSA provided a special exemption
for processing shade-grown tobacco, thus negating the decision of the
Supreme Court.
The Committee bill removes the special exemption because it has
created a situation in which a tobacco processing employee who would
otherwise enjoy the protection of the FLSA, loses such protection solely
because he had previously worked in the fields where the tobacco
was grown; co-workers who had not worked in the field enjoy "fair
labor standards." The student certification program under section 14
of the Act as it relates to such field work is unaffected by this bill.
Agricultural processing industries
S. 1861 phases out the existing partial overtime exemptions for sea-
sonal employers generally (Section 7c), and seasonal or seasonally-
peaked employers specifically engaged in agricultural processing of
perishable raw commodities (Section 7d). Based on 1973 Department
of Labor estimates, 714,000 workers were employed in establishments
qualifying for these exemptions.
The phase out of section 7(c) and 7(d) exemptions other than for
cotton processing and sugar processing, is as follows :
1. On the effective date the seasonal periods for exemption are
reduced from 10 weeks to 7 weeks and from 14 weeks to 10 weeks.
2. On such date, the workweek exemptions are reduced from
50 hours to 48 hours.
3. Effective January 1, 1975, the seasonal periods for exemption
are reduced from 7 weeks to 5 weeks and from 10 weeks to 7 weeks.
4. Effective January 1, 1976, the seasonal periods for exemption
are reduced from 5 weeks to 3 weeks and from 7 weeks to 5 weeks.
5. Effective January 1, 1977, sections 7(c) and 7(d) are
repealed.
At present under Section 7(c), employers who are determined by
the Secretary of Labor to be in industries seasonal in nature are free
from FLSA overtime jurisdiction for a 14-week period during which
employees may work up to 10 hours a day or fifty hours a week without
being subject to a time and one-half wage rate.
Under the existing 7(d) exemption, employers designated by the
Secretary of Labor to have either seasonal or seasonally-peaked agri-
cultural processing operations involving perishable raw commodities
are entitled to a 14 week period free of FLSA overtime restrictions
if their employees do not exceed 10 hours a day or 48 hours a week
during that time period.
Both Sections 7(c) and 7(d) have identical reciprocity clauses
which entitles any, employer who qualifies under the definition of
both sections to receive an aggregate exemption of two ten-week
periods (one under 7(c) and one under 7(d)) outside of the FLSA
overtime standard. Several industries have been determined as qualify-
ing for the dual exemption.
The origins of these two sections date to the beginning of the FLSA
in 1938. The predecessor of the current Section 7(c) was the former
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CIA-RDP75B00380R000800030001-4
3;8
Section 7(b) (3) whose exemption provided for up to 12 hours a
day or 56 hours a week before the FLSA overtime standard became
effective. The present Section 7(d) is successor to the former section
1-7(c)], which had pu-mitted among other things, year-round over-
time exemptions for several categories of employers, engaged in agri-
cultural processing. I:a addition, employers qualifying under both
former sections could claim up to an a`-gregate of 28 weeks of exemp-
tions.
However, in 1966, after 2,1 years of favored treatment, Congress
determined that the agricultural processing industry no longer war-
ranted the original Act's broadbrush treatment. Thus, as a resalt of
the 1966 FLSA amenlments Congress narrowed the exemptions to
their present state.
The complete elimination of the agricultural processing overtime
exemption was anticipated in the 1966 FLSA Amendments. The Con-
ference Report stated in part:
It was the declared intention of the Conferees to give
notice that the days of overtime exemptions for employees
in the agricultura` processing industry are rapidly drawing
to a close because advances-, technology are making the
continuation of such exemptions un.justifiable.
A detailed two-volume Department of Labor survey, entitled "Agri-
cultural Handling and Processing Industries-Overtime Exemptions
Under the Fair Labor Standards Act, 1970", found with reference to
Sections 7(c) and 7(d)
(1) Existing exemptions are not fully utilized.
(2) Many processing establishments are now paying pre-
mium rates for hours over 40 a week.
(3) Currently, some industries which qualify for 20 weeks
of exemption are less seasonal than others which qualify for
14 weeks.
(4) A. 40 hour basic straight time standard would elimi-
nate inequities which currently exist between employers who
now pay premium overtime rates either because they elect to
do so voluntarily or because they are covered by a collective
bargaining agreement and employers who avail themselves of
the overtime exemi-)tion.
(5) Additional -jobs could be created by second and third
shift operations in those industries where large shipments
of raw materials are received in relatively short periods.
((;) Technological advances in recent years have length-
ened the storage life of perishable products.
(7) Grower-processor contracts permit the processor to
specify the time for planting, harvesting, and delivery, and
thus make possible better work-scheduling.
Based on the above finding, former Secretary of Labor (and present
Secretary of the Treasury) George Shultz in his "Report to the Ninety-
First Congress on Minimum lVage and Maximum Hours under FLSA"
( January 1970) , concluded :
The study of overtime exemptions available to the agri-
cultural handling i;nd processing industries indicates the need
Approved For Release 2002/01/23 : CIA-RDP75B00380R000800030001-4
 Approved For Release 2002/01/23, CIA-RDP75B0038OR000800030001-4
39
for re-appraising the favored position which has long been
given these industries through exemption from the 40 hour
maximum work week standard. It is my recommendation that
the exemptions currently available under Section 7c, 7d,
... be phased out.
These same thought were echoed by the current Secretary of Labor,
Peter Brennan, at hearings before the Labor Subcommittee on June 7,
1973. Mr. Brennan stated :
We believe that the Fair Labor Standards Act can be modi-
fied as to its present partial overtime exemption for seasonal
industries and industries engaged in processing fresh fruits
and vegetables.
At one time the fresh food processing industry was in a
very unusual position. Since it is entirely dependent on the
timing and abundance of agricultural produce for its perish-
able "raw materials", it, was necessary to operate almost
continuously during harvest season. A great deal of overtime
work was required in order to process the fresh food coming
in from the farms before it spoiled.
Advancements in technology, however, have now made it
possible for initial processing to be accomplished rapidly and
overtime requirements have Seen reduced. We believe that the
present law can now be changed and would be glad to work
out language with the Committee that would not adversely
affect the employment situation, nor add undue pressures to
food prices, which are a matter of special concern in the
present economic picture.
Thus, the record is clear. Since the 1966 Amendments reduced the
overtime exemption for agricultural processing there has been a sharp
decline in the amount of overtime worked by employees in the affected
industries.
Claims of adverse effects on the industry have been greatly exagger-
ated. There is every reason to believe that the industry can make the
necessary adjustment when these special exemptions are removed.
S. 2747 provides for a limited overtime exemption (14 weeks, 10
hours per day, and 48 hours per week) for certain employees engaged
in activities related to the sale of tobacco. Such employees are cur-
rently covered by the section 7(c) exemption pursuant to determina-
tion by the Secretary.
Railroad and pipelines
The Fair Labor Standards Act currently exempts from the overtime
provisions of the Act any employee of an employer subject to the pro-
visions of Part I of the Interstate Commerce Act.
Part I of the Interstate Commerce Act pertains to railroad employ-
ees and employees of oil pipeline transportation companies.
The Committee bill would retain- the overtime exemption for rail-
road employees but would remove the overtime exemption for ernploy-
ees of oil pipelines.
The Committee, in reviewing the historical basis for this exemption,
found that there was no testimony with respect to oil pipeline trans-
portation companies. -
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 lA-RDP75B00380R000800030001-4
This industry was apparently exempted because it is covered along
with railroads under part I of the Interstate Commerce Act and a
case had been made for exempting railroad employees.
The Committee has concluded i;hat there is no basis for continuing
to provide an overtime exemptior- for employees of oil pipelines. Em-
ployees of gas pipelines are now covered by the overtime provisions
of the I+ LSA. The action of thc: Committee eliminates it, long-time
competitive. inequity between oil pipelines and gas pipelines.
Seafood processing
S. 2747 phases out the overtime exemption currently available in Sec-
tion 13(b) (4) for "any employee employed in the processing, market-
ing, freezing, curing, storing, packin; for shipment, or distributing
of any kind of fish, shellfish, or other aquatic forms of animal or vege-
table life, or any product thereof," as follows :
1. In the first year after the effective date of the 1974 Amerrd-
mncnts, the workweek exemption is 48 hours.
In the second year, the workweek exemption is 44 hours.
Effective on the beginning of the third year, the exemption
is repealed.
The Fair Labor Standards Act as originally enacted provided an
exemption under Section 13 (a) (5;~ for :
kny employee employed is the. catching, taking, harvest-
ing, cultivating, or farming of any kind of fish, shellfish,
crustacea, sponges, seaweeds, or other aquatic forms of animal
and vegetable life, including the going to and returning from
work and including employment in the loading, unloading, or
packing of such products for shipment or in propagating,
processing, marketing, freezing, canning, curing, storing, or
distributing the above products or byproducts thereof.
The 1.949 amendments retainer. the complete exemption for fishing
and processing, except canning. The minimum wage exemption for
canning was eliminated, but th,, overtime exemption was retained
under it new Section 1.3(b) (4).
The 19(1 amendments removed the minimum wage exemption for
employees employed in "onshore" operations, such as processing,
marketing, distributing and other fish-handling activities. The over-
time exemption for "onshore" operations was retained by adding such
operations to the exemption already provided for the canning of sea-
food under Section 13 (b) (4).
Removal of the overtime exemption for seafood canning and proc-
essing is part of the Committee's effort to achieve parity under the
law for all workers to the maximum extent possible at this time. Just
as in the case of agricultural processing, no case has been made for
continuing the exemption.
Local transit
Currently, the overtime provisions of the Fair Labor Standards
Act do not apply with respect to any driver, operator, or conductor
employed by an employer engaged in the business of operating a street,
suburban, or interurban electric railway, or local trolley or motorbus
carrier, if the rates and services of such railway and carrier are sub-
ject to regulation by a State or local agency.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/234ICIA-RDP75BOO38OR000800030001-4
The Committee bill would eliminate this overtime exemption in
three steps, except with respect to time spent in "charter activities"
under specified conditions. The hours of employment will not include
hours spent in charter activities if-(1) the employee's employment in
such activities was pursuant to an agreement or understanding with
the employer arrived at before engaging in such employment, and
(2) if employment in such activities is not part of such employee's
regular employment. These conditions are set so as to emphasize that
the Committee intends that hours spent in "charter activities" as a part
of the regular workday or workweek are to be included in the definition
of "hours worked" under the Act.
The Committee has been persuaded that the transit industry has
been adjusting to a shorter workweek for some time now. Collective
bargaining agreements typically call for overtime after 40 hours a
week-and in many cases after 8 hours a day. A large segment of the
industry is now covered by such contracts. In addition, an overtime
standard was applied to nonoperating employees of the industry by the
1966 amendments. The Committee bill requires that employees be paid
time-and-one-half their regular rate of pay for all hours over 48 per
week, beginning with the effective date; after 44 hours, 1 year later;
and after 40 hours at the end of the second year and thereafter. This
gradual approach ensures ease of adjustment.
It is noted that, by virtue of the Committee's action on coverage of
State and local government employment, together with its action on
overtime pay in the local transit industry, operating employees of
publicly and privately owned transit companies will be treated
identically.
A question was raised concerning the applicability of the overtime
provisions of the Act in the case of certain collective bargaining agree-
ments involving local transit in the New York area which provide for
straight-time pay for certain off-duty hours. The Committee notes
that section 7(e) (2) of the FLSA provides that "payments made for
periods when no work is performed due to . . . failure of the em-
ployer to provide sufficient work ... are not made as compensation
for hours of employment." The Committee also notes that the Depart-
ment of Labor's regulations concerning "Hours Worked" contain, the
following provision (29 C.F.R. 785.16(a)) :
"OFF DUTY"
"(a) General. Periods during which an employee is completely relieved from
duty and which are long enough to enable him to use the time effectively for
his own purposes are not hours worked. He is not completely relieved from
duty and cannot use the time effectively for his own purposes unless he is
definitely told in advance that he may leave the job and that he will not have
to commence work until a definitely specified hour has arrived. Whether the
time is long enough to enable him to use the time effectively for his own purposes
depends upon all of the facts,and circumstances of the case."
In 1972, by vote of 68-24 the Senate rejected an amendment to retain
the overtime exemption for local transit.
Hotels, motels, and restaurants
S. 2747 eliminates the complete overtime exemption for employees
employed by hotels, motels and restaurants and substitutes a limited
overtime exemption as follows :
During the first year overtime compensation will be required for
hours of employment in excess of 48 in a week and after the first year
Approved For Release 2002/01/23 : CIA-RDP75BOO38OR000800030001-4
 Approved For Release 2002/01/23 : lA-RDP75B00380R000800030001-4
such compensation will be required for hours of employment in excess
of 46 in a week. Fo:? maids and custodial employees of hotels and
motels, the phaseout is as follows :
1. 48 hours in the first year.
2. 46 hours in the second year.
3. 44 hours in the third year.
4. Repealed thereafter.
In setting an overtime standard for employees of hotels, motels and
restaurants the Committee recog:.iized that the length of workweeks
have been declining in these activities. It is interesting to note that
when minimum wage coverage was extended to these workers by the
1966 amendments, the Department of Labor reported to the Congress
that there was a, reduction in the prevalence of long workweeks in
these industries, even though an overtime exemption was retained.
Tip allowance
S. 2747 modifies section 3(m) cf the. Fair Labor Standards Act by
requiring employer explanation to employees of the tip credit provi-
sions, and by requiring that all kips received be paid out to tapped
employees.
Currently, the law provides that an employer may determine tae
amount of tips received by a "tipped employee" and may credit that
amount against the applicable minimum wage, but amounts so credited
may not exceed 50 percent of the minimum rate. Thus, a tip credit of
up to $.80 an hour may currently be deducted from the minimum
wage of a tipped employee. (A tipped employee is defined es all
employee who customarily and regularly receives more than $20 a
month in tips.)
The Committee re-examined the role of tips as wages and the con-
cept of allowing tips to be counted as part of the minimum wage. The
Committee reviewed the study of tips presented to the Congress by
the Department of Labor in 1971 as well as provisions of State mini-
mum wage laws which permit the counting of tips toward a minimum
wage.
The Committee was impressed t y the extent to which customer tips
contributed to the earnings of some hotel and restaurant employees :in
March 1970 (the date of t'ie Labor Department survey). After review-
ing the estimates in th:.s report, the Committee was persuaded that the
tip allowance could not be reduced at this time, but that the tipped
employee should have stronger protection to ensure the fair opera-
tion of this provision. The Committee bill, in this respect, is consistent
with the wilt of the Senate as expressed in an 89-1 vote in 1972.
Labor Department Regulations define a tip as follows (Part 531--
Wage Payments under the fair Labor Standards Act of 1938) :
A tip is a sum presented by a customer as a gift or gratuity
in recognition of some service performed for him. It is to be
distinguished from payment of a charge, if any, made for the
service. Whether a tip is to he riven, and its amount, are mat-
ters determined solely by the customer, and generally he has
the right to determine' who shall be the recipient of the
gratuity.
Under these circumstances there is a serious legal question as to
whether the employer should benefit from tips to the extent that
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 43
Approved For Release 2002/01/23: CIA-RDP75B0038OR000800030001-4
employees are paid less than the basic minimum wage because the
employees are able to supplement their wages by special services which
bring them tips.
Setting aside for the present the ethical question involved in credit-
ing tips toward the minimum wage, the Committee is concerned by
reports that inflation has been deflating tips.
In view of these reports the Committee intends that the Department
of Labor should take every precaution to insure that the employee
does in fact receive tips amounting to 50 percent of the applicable
minimum wage before crediting that amount against the minimum
wage.
The bill amends Section 3(m) by deleting the following language
pertaining to the computation of tip credits : "except that in the case
of an employee who (either himself or acting through his representa-
tive to the satisfaction of the Secretary that the actual amount
of t e tips received by him was less than the amount determined by
the employer as the amount by which the wage paid him was deemed
to be increased under this sentence." The deletion of this language is
to make clear the original intent of Congress to place on the employer
the burden of proving the amount of tips received by tipped employees
and the amount of tip credit, if any, which such employer is entitled
to claim as to tipped employees. Sec Bingham v. Airport Limousine
Service, 314 F. Supp. 565 (W. D. Ark. 1970) in which the court re-
fused to "speculate" as to sums the employees might have received in
tips when the employer failed to present "any objective information"
on the subject.
The tip credit provision of S. 2747 is designed to insure employer
responsibility for proper computation of the tip allowance and to
make clear that the employer is responsible for informing the tipped
employee of how such employee's wage is calculated. Thus, the bill
specifically requires that the employer must explain the tip provision
of the Act to the employee and that all tips received by such employee
must be retained by the employee. This latter provision is added to
make clear the original Congressional intent that an employer could
not use the tips of a "tipped employee" to satisfy more than 50 per-
cent of the Act's applicable minimum wage. H. Rept. 871, 89th Cong.,
1st Sess., pp. 9-10, 17-18, 31; 111 Cong. Bee. 21829, 21830; 112 Long..,
Roe. 11362-11365, 20478, 22649. See Melton v. Round Table Restau-
rants, Inc., 20 WAVH Cases 532, 67 CCH Lab. Cas. 32,630 (N.D. Ga.).
The tip provision applies on an individual employee basis, and the
employer may thus claim the tip credit for some employees even
though the employer does not meet the requirements of this section
with respect to other employees. Nor is the requirement that the tipped
employee retain such employee's own tips intended to discourage the
practice of pooling, splitting or sharing tips with employees who cus-
tomarily and regularly receive tips-e.g., waiters, bellhops, waitresses,
countermen, busboys, service bartenders, etc. On the other hand, the
employer will lose the benefit of this exception if tipped employees
are required to share their tips with employees who do not customarily
and regularly receive tips-e.q., janitors, dishwashers, chefs, laundry
room attendants, etc. In establishments where the employee performs
a variety of different jobs, the employee's status as one who "custom-
arily and regularly receives tips" will be determined on the basis of
the employee's activities over the entire workweek.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/214CIA-RDP75B00380R000800030001-4
Nursing homes
The Fair Labor Standards Act currently provides a partial over-
tirne exemption for employee; of nursing homes. The Act provides an
overtime exemption for'
or any employee of a nursing home who receives
compensation for employment at time and one-half the regular rate
of pay for all hours in excess of 4:3 in a week.
5.2747 replaces the limited overtime exemption for employees of
nursing homes (overtime compensation required for hours of em ploy-
nuent in excess of 48 in a week) by an overtime exemption (initiated
by an agreement between the employer and his employees) which sub-
stitutes a lit-consecutive-day work period for the workweek and re-
quires overtime compensation for employment over 8 hours in any
workday and for over 80 hours in such work period.
According to a 1969 report of the Department of Labor there had
been it. marked decline in average hours per week of ^onsupervisory
employees of nursing homes between April 1965 and October -1967.
I he report indicates that the application of a 48-hour workweek stand-
ard to nursing homes or. February 1, 1967 had very little effect as only
a small proportion of the workers worked over 48 hours a week ever.:
before the. Act was extended to the industry. In April 1968, less than
15 percent of all nursing home employees worked over 44 hours in a,
week.
tiS'ahsmen, partsmen, and mechanics
S. 2747 provides an amendment under which : the overtime exemp-
tion for partsmen and mechanics in nonmanufacturing establishments
primarily engaged in selling trailers is repealed; the overtime exemp-
tion for partsmen and mechanics in nonmanufacturing establishments
engaged in selling aircraft is repealed; the overtime exemption for
salesmen in automobile, Trailer., truck sales and aircraft establishments
is retained; the overtim -, exemption for salesmen, partsmen, and rne-
chanics in farm implement sales establishments is retained; the exemp-
tion for partsmen and mechanics in automobile and truck sales estab-
lishments is retained and; art overtime exemption is provided for
salesmen engaged. in selling boats.
The Committee was persuaded that the application of an overtime
standard to partsmen and mechanics in trailer dealerships, and to the
presently exempt employees in aircraft dealerships would be likely to
generate additional jobs, and to promote the training of workers to
fill the job. If the industry continues to expand service hours, as recent
trends indicate, the overtime penalty should provide considerable
stimulus to the creation of new jobs at a time when our economy is ex-
periencing high unemployment rates and the training necessary for
meaningful employment in this irAustry is or should be readily
available.
Cotton ginning and sugar processing
S. 2747 repeals the year-round overtime exemption for cotton grin-
ning and sugar processing employees in Section 13(b) (15) of the Fair
Labor Standards Act, but retains the exemption for employees en-
gaged in processing maple sap into maple syrup or sugar.
The amendment to phase down the overtime exemptior for cotton
ginning and sugar processing employees is as follows :
1. Effective on the effective date, the workweek exemption is as
follows: 72 hours each week for 6 weeks of the year ; 64 hours each
Approved For Release 2002/01/23 : CIA-RDP75B00380R000800030001-4
 Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
week for 4 weeks of the year; 54 hours each week for 2 weeks of
the year ; 48 hours each week for the balance of the year.
2. In 1975, the workweek exemption is as follows : 66 hours
each week for 6 weeks of the year; 60 hours each week for 4 weeks
of the year; 50 hours each week for 2 weeks of the year; 46 hours
each week for 2 weeks of the year; 44 hours each week for the
balance of the year.
3.' In 1976, the workweek exemption is as follows : 60 hours
each week for 6 weeks of the year; 56 hours each week for 4 weeks
of the year; 4S hours each week for 2 weeks of the year ; 44 hour,;,
each week for 2 weeks of the year; 40 hours each week for the
Valance of the year.
The workweek exemptions are applicable during the actual season
within a period of twelve consecutive months as opposed to the calen-
dar year and are not limited to a period of consecutive weeks.
In addition, the cotton processing and. sugar processing. exernp-
tions under section 7 of the law are retained but limited to 48 hours
during the appropriate weeks. Furthermore, it is provided that an
employer who receives an exemption under this subsection will not
be eligible for other overtime exemptions under section 13 (b) (24)
or (25) or section 7.
The 1970 Report of the Department of Labor on the Agricultural
Handling and Processing Industries includes the recommendation of
the Secretary of Labor that "consideration should be given to the
phasing out of the overtime exemptions currently available to the
agricultural handling and processing industries under Section 7(c)
and 7(d) of the Fair Labor Standrads Act . Although focusing
primarily on Sections 7(c) and 7(d) of the Act, the survey data
also indicate that there is no sound basis for the continuation of the
year-round exemptions available under. Sections 13(b) ... (15) of
the Act . ."
Few, industries are as highly subsidized and so greatly protected
as the sugar industry. The Federal Government makes direct pay-
ments for sugar production totalling nearly $100 million a year. It
sets and enforces production quotas in the U.S. and specifically re-
stricts foreign imports of sugar for an additional benefit of about
$400 million annually to the industry.
The industry is also protected by various Federal laws against crop
damage resulting from natural causes.
Many of these employees work in shifts of 12 hours a day for six
or seven days a week during the sugar processing season (Octol-,er 15
to January 15). The law does not require that they be paid overtime
premium pay although their counterparts in non-subsidized indus-
tries are paid time and one-half their regular rates of pay for a ll hours
over 40 in a week.
Section 13(b) (15) of the Act also provides a year-round unlimited
exemption from the maximum hours provisions for cotton ginning.
Under section 13(b) (15) an employer is eligible for this exemption
when: (1) employees are actually engaged in the ginning of cotton;
(2) the cotton must be ginned "for market"; and (3) the place of em-
ployment is located in a county where cotton is grown in commercial
quantities.
In addition, there is a limited overtime exemption under section
7(c) during the period or periods when cotton is being received for
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
ginning. When applicabla, the exemption antler sectioin 7(c) may be
claimed for all employees, including office workers, exclusively en-
gaged in the operations specified ir_ the industry determination. A
survey, conducted in 1967 by the U.S. Department of Agriculture,
disclosed 3,753 cotton gin that employed 49,500 nonsupervisory em-
ployees during the peak work-week.
It is not uncommon in the cotton ginning industry to have employees
working in excess of an 80 hour work-week during the peak season.
Sixty-hour work-weeks exist with r,?gular frequency. The exemption
under 13 (h) (15) enables employers to work their employees often
nearly double the normal work-weel3, without having to pay premium
wages. Modification of this exemption would start cotton ginning
employees on the road to overtime pay parity with the mainstream
.of the American labor force.
In the past the. industry has made: little use of multiple shift opera-
tions with only one in four using more than. one shift in 1970. Since the
majority of the work force consists of "moonlighting" field workers?
potential employees are in plentiful supply during the peak season. By
using multi-shifts, cotton ginners could reduce the number of overtime
hours, while at the same time alleviating the chronic farm unemploy-
ment problem (7.5c~o versus the nat oval average of 4.9% in 1970).
Caterin.q and food service employees
S. 2747 phases out the complete overtime exemption for employees
of retail and service establishments who are employed primarily in
connection with the preparation or offering of food or beverages either
on the premises or by such services as catering, banquet. box lunch, or
curb or counter service, to the public, to employees, or to members or
guests of members of clubs.
S. 2747 requires than catering and food service employees be paid
time and one half their regular rats of pay for hours over 45 per week
on the effective date, for hours over 44 after 1 year, and for hours over
40 after the second year.
The elimination of tale special exemption for food service employees
in retail service establishments eliminates a disparity in work stand-
ards for employees of the same establishment. For example, food. serv-
ice employees in covered retail establishments are now exempt from
the overtime provisions of the Act while retail clerks, in the same
establishments, are covered by bo-,h the minimum wage and overtime
standard. This has been a major source of friction.
It is expected that, the gradual phasing- out of the overtime exemp-
tion will eliminate excessively long hours in food service and catering
activities and thus generate additional jobs. Also treatment- of food
service employees in this manner permits a similar phasing out of
the overtime exempt.ons for bowling; establishments. an exemption
predicated in large part upon the food service aspects of such
establishments.
Telegraphic rnessage operations
S. 2747 repeals the minimum wage and phases out the, overtime
exemption for persons. engaged in handling telegraph messages for
the public under an agency or contract 'arrangement with a tele-
graph company, if they are so engaged in retail or service estab-
lishments exempt under section 13(a) (2) and if the revenues for such
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 ,FIA-RDP75B0038OR000800030001-4
messages are less than $500 a month. The amendment to phase out the
overtime exemption is as follows :
1. 48 hours in the first year after the effective date.
2. 44 hours in the second year.
3. Repealed thereafter.
Bowling establishments
The Fair Labor Standards Act currently exempts from the over-
time provisions of the Act any employee of a bowling establishment
if such employee receives compensation for hours in excess of 48 in a
workweek at time and one-half the employee's regular rate of pay.
The Committee bill would reduce the straight-time workweek to
44 hours one year after the effective date and to 40 hours one year
later.
The Committee notes that bowling fees have advanced by 18 percent
since 1967. At the same time, pinsetting machine technology has im-
proved and automatic pinsetters have replaced hand pinsetters
throughout the industry. Overtime coverage is easily compatible with
the operative characteristics of the industry. The use of automatic pin-
setters has eliminated problems which had previously resulted from
daily hourly fluctuations in patronage.
House parents for orphans
S. 2747 provides a new overtime exemption for any employee who is
employed with such employee's spouse by a private nonprofit educa-
tional institution to serve as the parents of children-
A. Who are orphans or one. of whose natural parents is de-
ceased, and
B. Who are enrolled in such institution and reside in residen-
tial facilities of the institution, which such children are in resi-
dence at such institution, if such employee and such employee's
spouse reside in such facilities, receive without cost, board and
lodging from such institution, and are together compensated, on
a cash basis at an annual rate of not less than $10,000.
The Committee, in proposing this amendment, is primarily inter-
ested in insuring that couples who serve as house parents for orphans
in educational institutions are assured sufficient flexibility in work
standards to protect the interest of the orphans during the periods
when such orphans reside in such institutions.
The Milton Hershey School in Hershey, Pennsylvania is one such
institution. The Hershey school is a residential vocational school for
orphan boys. The students live in 103 separate cottages of 10 to 15
boys each. The Committee has been informed that a married couple
lives in each cottage, serving as house parents. The Committee felt
that imposition of overtime coverage in this very special employment
situation would result in an especially difficult financial and record-
keeping situation for such institutions.
The Committee considered, but did not approve, a minimum wage
as well as an overtime exemption for such employees. Thus these
house parents will continue to be subject to the minimum wage provi-
sions of the Act. An employee and such employee's spouse who serve
as house parents of orphans in a nonprofit educational institution, who
are paid not less than $10,000 a year in cash wages, and. who receive
without cost, board and lodging from such institutions would likely be
paid in compliance with the minimum wage requirements of the Act.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 ? CIA-RDP75B0038OR000800030001-4
The Committee recognizes that the Labor Department has issued
special rule;; for calculating "hours worked" for employees residing
on employer's premises, including such house parents who have duties
which could occur at any time.
It is the Committee's understanding that as to hours worked by such
resident employees, the Labor Department's regulations permit a,
reasonable agreement between the parties which takes into considera-
tion all the pertinent facts surrounding such employment.
The recent history of the I+ air Labor Standards Act demonstrates
a Congressional awareness of the special problems confronting stu-
dents who need and want to work while attending school on a full-
time basis. From 1.938 to 1961 there was no special provision in the
lair Labor Standard., Act relating to the employment of full.-tirr.le
students at subminimrrn rates. There were and there continues to be
special provisions for employing learners, apprentices, student learners
and student, workers atsubminirnunn rates.
The student-job problem did not come into focus until 1961 when
t lie hair: Labor Standards Act was expanded to cover retail and service
activities and again in 1966 when large industrial farms were brought
within the scope of the Act. Unlike the activities which were covered
by the Act prior to 1961, thesaa newly covered employers had employed
Full-time students on a part-time basis outside of school hours prior
to being brought under the IFS,I , and steps were taken both by tl_e
Congress and the administrators of the statute to insure, that such
Dart-time jobs would still be available to students. The chronology of
actions taken in this regard highlight the degree of flexibility which
has continued to characterize this aspect of the statute.
The 1961 amendrner.ts to the At revised Section 14 to permit the
rrnnloyrrrent of students at 85 percent of the minimum wage in retail
and service establishments. The ;purpose of this provision was de-
s;cribed in house Report No. 75 (8,'th Congress, 1st Session, March 13,
1961) as follows:
to provide employment opportunities for students who desire
to work part-time outside of their school hours without dis-
placement of adult workers.
In general, the maximum number of hours that could be paid for at
subnrinimurn rates was limited by past practice in employing students.
An upper limit of 10 -percent of all hours was established. An upper
age limit of 18 was also established by the Labor Department
regulations.
The 1.966 amendments to the Act revised Section 14 with respect to
full-time student employment in the retail and service industries and
added a provision authorizing the employment of students in agricul-
ture at subnrinimum rates.
The regulations for ,he hiring of students were relaxed so as to per-
mit; the issuance of student certificates to "students regardless of age
(but in compliance with child labor laws)".
The 10 percent limitations on full-time student hours at sub-
minimum wages was eliminated after the 1966 amendments. As a re-
sult, there are certificates, issued by the Department of Labor, which
authorize the employment of full-time students at subminimum rates
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CM-RDP75B0038OR000800030001-4
for as many as 50 percent of all hours worked in some restaurants. ID
variety stores, authorizations of 35 percent student hours are not
uncommon.
The Act currently permits the employment of full-time students on
a part-time basis (not to exceed 20 hours a week) during school time
or full-time during vacations and holidays in retail and service estab-
lishments and in agriculture at a wage rate not less than 85 percent of
the applicable minimum wage. According to the Department of Labor
almost 50 million hours were authorized for the employment of full-
time students at subminimum rates by certificates in effect on June 20,
1972. An analysis of the use made of full-time student certificates was
completed by the Department of Labor and included in Bulletin
1657--Youth Lnemployment and Minimum Wages (1970). This anal-
ysis shows that only 42% of the man-hours authorized at 85% of the
statutory minimum wage were used. Even more significantly, the anal-
ysis shows that one-fifth of the establishments holding certificates did
not use them.
It is evident from employer responses as to their failure to use the
certificates that many of them obtained them Just in case they should
want to use them. Obviously, they did not view the application for
such certificates as a burden when they applied even when they had no
immediate need.
I+ w.1.h.ermore? the Department of Labor estimates that less than 2%
of the applications for full-time student certificates were denied in
fiscal 1973 either through outright denial or through the failure of
the applicant to supply additional information required.
These provisions apply to full-time students, regardess of age,
but "in compliance with child labor laws." The child labor proviso
means that students must be at least 14 years of age to be employed in
retail and service establishments. The Child Labor Amendments in
this bill will create a minimum age restriction on the employment of
full-time students below the age of 14 outside of school hours in agri-
culture. Sections 14(a)-(c) will permit the employment at less than
the minimum wage as follows :
NUMBER OF CERTIFICATES GRANTED TO EMPLOY WORKERS AT RATES BELOW THE MINIMUM WAGE, UNDER SEC.
14 OF THE FAIR LABOR STANDARDS ACT, JUNE 21, 1972-JUNE 20, 1973, AND NUMBER OF CERTIFICATES AND
ESTIMATED NUMBER OF WORKERS AUTHORIZED BY CERTIFICATES IN EFFECT ON JUNE 20, 1973
Certificates in effect on
June 20, 1973
Certificates ---------------- ---
granted
Estimated num-
June 21, 1972-
Number of
her of workers
June 20, 1973
certificates
authorized
Total________________________________________________
42,471
17,065
107,724
Handicapped worker and trainee------------------------------
Apprentice -------------------------------------------------
402
Sheltered workshop_________________________________________
14,035
13, 677
287, 348
Student learner---------------------------------------------
17, 677
NA
NA
Student worker---------------------------------------------
10
0
0
Learner----------------------------------------------------
380
338
7, 326
Full-tine students_________________ _________________________
4, 314
NA
NA
1 The 4,035 certificates granted were held by 2,315 workshops and the 3,677 in effect an June 20, 1973, were held by
2,062 workshops.
2 For regular program and work activities centers, estimate includes average e.nploymeet for most recent fiscal year;
for clients certified at rates below the shop rate and those engaged in training and evaluation certified by State agencies,
estimate represents namber of clients at time of application.
NA-Not available.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/?03 : CIA-RDP75B0038OR000800030001-4
1. The Secretary of Labor, to the extent necessary to prevent
curtailment of opportunities for employment, shall by regulations or
by orders provide for tl:.e employment of learners, apprentices, and
for messengers employed primarily in delivering letters and messages,
under special certificates at such wages lower than the minimum wage
applicable under section 6, and subject to such limitation as to time,
number, proportion, and length of service as the Secretary shall
prescribe.
A. Full time students may be employed in retail and service
establishments, at rates not less than ri5 percent of the applicable
minimum wage, or $1.60, whichever is higher (or 85 percent of the
section 6(c) rate in the case of employment in Puerto Rico or the
Virgin Islands) for a period of up to 20 hours per week (full time
during vacation periods). Up to 4 students may be hired without the
need for traditional pre-,ertification procedure (that is, a finding of
no substantial probability of job displacement before the issuance of
certificates) or the need to meet the historical experience test concern-
ing the proportion of student hours worked during a base year, as set
forth below. If more than four students are hired, the existing pre-
certification procedure will continue to apply and the proportion of
student hours of employment (including for this purpose the first
four students), to total hours of employment of all employees, shall not
exceed such proportion for the corresponding twelve month period
before the establishment was covered by the Act.
Full time students may be employe( in agriculture at rates not
less than 85 percent of the. applicable minimum wage, or $1.30, which-
ever is higher (or 85 percent of the section 6(c) rate in the case of
employment in Puerto Rico or the Virgin Islands) for a period of up
to 't) hours per week (full time during vacation periods). For each
student so employed, after the fourth, the Secretary of Labor mast
find. that such employment will not reduce the full-time employment of
non-students before issuing certificates.
4. Full time students may be employed in higher educational insti-
tutions, at rates not less than 85 percent of the applicable minimum
wage, or $1.60, whichever is higher, f,:)r a period of up to 20 hours per
week (full time during vacation periods).
The committee emphasizes that the Secretary is to look to the num-
ber of students employed by an employer at any one time and not in a
cumulative sense, in determining which certification procedure applies
and the applicability of the historical. proportion of student employ-
ment pursuant to the provision.
The bill will also provide a minimum wage and overtime exemption
for students employed by an elementary or secondary school if the
employment constitutes an integral part of the school's regular educa-
tion program provided that the employment satisfies applicable child
labor provisions.
The Committee agrees with the views expressed by the Congress in
1961 and 1966 that. opportunities for the employment of full-time stu-
dents outside of school hours should be encouraged provided only that
safe=guards are continued to ensure aa?rinst the substitution of students
for other workers. The present certification program has proven itself
a proper mechanism for this purpose and the Committee bill continues
this procedure.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 :)A-RDP75B00380R000800030001-4
The Committee rejected a proposal that the FLSA be amended
by loosening the special student certification program and adding
a blanket subminimum wage for young people below the age of
eighteen and for full-time students up to the age of 21. A similar pro-
posal was rejected by the Senate in 1972 by a vote of 54-36.
The Committee's rejection of this special subminimum rate was
based on the conviction that this would violate the basic objective of
the Act and that such a standard would contribute to, rather than ease,
the critical problem of unemployment because it would encourage the
displacement of older workers.
The Committee was impressed by Secretary of Labor Brennan's
views on a youth wage differential when he appeared at the hearing
on his nomination.
I believe in a realistic and adequate (minimum) wage. I
am aware of the problem of youngsters, many of whom have
to pay their way through school, but I am fearful if we have
a difference of wages with the youngsters and their fathers
in the area where minimum. wage is so important, this could
create problems.
If they are going to perform the same duties, the same
responsibilities, I do not see why there should be any differ-
ence in the rate.
In the hearings on such proposals in 1971, former Secretary of
Labor Ilodgson said.:
I recognize that there may be some concern that a lower
minimum wage for young people under age 18, for full-time
students, and for young job-starters may reduce employment
opportunities for older workers. There may be some risk in
marginal cases. (Italics added.)
The Committee is aware that the minimum wage worker is typi-
cally regarded as a "marginal", worker. Therefore, the Secretary's
1971 statement was not reassuring.
The Committee was also unconvinced that an increase in the mini-
mum wage rate. would result in reducing youth employment.
Although certain economists who have studied the problem have
concluded that an increase in the minimum wage rate would adversely
affect teenage employment, others have criticized such studies on
various grounds, including failure to take into acccount demographic
changes in the population which have seen the relative number of
teenagers greatly increase in recent years. Furthermore, the studies
do not appear to take into account. the expansions in coverage brought
about by the 1961 and 1966 amendments. They are important not only
in terms of numbers of workers covered but also in terms of kinds of
activities covered-retail trades, services, educational institutions, hos-
pitals, nursing homes, farms, etc. As far as young workers are con-
cerned, these have always been more important in' terms of jobs for
young people than the traditional coverage areas of manufacturing,
mining, wholesale trade, etc.
To fully understand the employment problems of youth, it is essen-
tial to recognize that the teenage unemployment rate has always been
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 CIA-RDP75B00380R000800030001-4
higher than the nationel average for all workers. This is because teen-
agers are new jobseekers, who often seek only part-time jobs, prefer-
ablv close to home. Out-of-school teenagers tend to have relatively
high quit. rates.
In the 1968 Manpower Report of the President, a complete section
was devoted to the problems of ".Bridging the Gap from School to
Work." This section raised more questions than it answered -bout
teenage unemployment but it did pinpoint approaches which ought
to be investigated if a;he teenage unemployment problem is to be
solved. It stated:
An examination is needed also of the extent to which initial
job i ryouts by youth reflect inetliciencies in the way they seek
jobs and in the various institutions and agencies that help
them, rather than "inevitable" dissatisfactions with particu-
lar job opportuni ties. To some extent, it is the present high.
family income levels in the United States, compared to those,
in other countries and in generations gone by, that permit
many youth the luxury of "shopping around" and trying out.
jobs. Related to this question, of course, is the need for an
assessment of the extern; to which "disenchantment with
work" plays a role in youth unemployment rates and for an
examination of the particular groups in the population to
whom this factor is applicable.
Aiso u'eded is an exami) aflon of the oxtent to which y-oath
unemployment rates could be reduced by spreading' high
school graduations over the year. At the present time 97 per-
cent of high school graduate, in the United States leave
school within the same 2, or 3 weeks in Time. The heavy load
that this puts upo:i public and private employment offices
and upon the personnel offices of companies might well be
diminished, and greater inroads made into youth nnemploy-
nfent rates, if the load were spread throughout the year.
There has been little realizatic.n or awareness of the extent
to which the adjustment of high school schedules over the
last few generations has resulted, more and more, in uniform
graduation times and has perhaps contributed to the youth
unemployment problem. There bias been no exploration of the
practical possibilities of reversing this process, nor of the
extent to which such reversal might help in alleviating youth
unemplo v ment.
The youth wage proposal is put forth as a solution to the critical
ulien) lalovnent problem facing yetths The situation for the 1~.,-17
year age, group was deemed most "critical" by the proponents of a
youth subminimum because their unmmplrnyment rate was highest. The
situation for the 18--19 year age group was deemed to be only "slightly
less critical" because their un.enaplc ,om'n,t, rate was somewhat lower.
First, it should be noted that unemployment rates do not indicate the
number of persons seeking jobs and that comparisons of rates may be
misleading unless these rates are related to the sizes of the groups being
compared. In addition, the number of persons seeking full-time jobs is
it more significant measure of serious unemployment than is the total
number of unemployed. Unfortunately, a comparison of unemploy-
Approved For Release 2002/01/23 : CIA-RDP75B00380R000800030001-4
 Approved For Release 2002/01/23 : Cfh-RDP75B00380R000800030001-4
ment rates for various groups in the labor force does not indicate the
relative seriousness of the problems confronting these groups.
In December 1973, there were 4,058,000 unemployed. Of these,
3,025,000 were looking for full-time work. In the 16-17 year old group
there were 553,000 unemployed but only 148,000 were seeking full-time
jobs. At the other end of the age spectrum 362,000 workers 55 years of
age and older were unemployed and almost three-quarters percent of
them or 269,000 were seeking full-time jobs. It does not make much
sense to design a government policy which would move 16-17 year olds
to the front of the hiring line by allowing employers to pay them
substandard wages while placing older unemployed workers (55 years
of age and older) at a competitive disadvantage even though they are
more numerous and their pioblems of getting jobs once they become
unemployed are far more serious in family and social terms..
Not only is it clear that a subminimum wage is not the solution to
the teenage unemployment problem, there is considerable doubt as to
whether the problem being discussed is teenage unemployment or dis-
crimination in employment because of race.
A few fiIo(lucts 1f--
t;1_) 11m annual gross volume of sales of such enterprise
is less than $1,000,000 e.:clusivo, of excise taxes,
I) more ;.hen. i 1 per centum of such enterprise's annual
dollar volume of sales is made within the State in which
sic h cut erprise. is lo(,ated. and
C) not. more than 2.5 per centum of the annual dollar
Vo+Irute oil silks of such enterprise is to customers who are
(>,rraae(I is( the bull:. distribution of such products for resale,
and such employee receives compensation for employment in ex-
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : c~4-RDP751300380R000800030001-4
cess of forty hours in any workweek at a rate not less than one
and one-half tunes the minimum wage rate applicable to kiln
under section 6,
and if such employee recd yes compensation for employment in excess
of twelve hours in any workday, or for employment in excess of fifty-
six hours in any worklveek, as the case may be, at a rate not less than
one and one-Half times the regular rate at which he is employed.
(c) For a period or periods of not more than [ten] seven work-
weeks in the aggregate in any calendar year, or [fourteen] ten work-
weeks in the aggregate in the case of all employer who does not qualify
for the exelnptlon i i subsection (d) of this section, any employer may
employ any employee for a workweek in excess of that specified in
subsection (a) without lla,ying the compcns>tion for overtime em
ployment prescribed in such subsection if such employee (1) is em-
ployed by such employer in an industry found by the Secretary to be
of It seasonal nature, and (2) receives compensation for employment
by such employer ni excess of ten hours in any workday, or for em-
ployment by such employer in excess of [lifty] forty-eight hours in
any workweek, as the case may be. 'at a rate not less than one and one-
half times the regular rate Edwluicli he is employed.'
(d) For a period or periods of not 1no1?e than [ten] seven work-
weeks in the aggregate in any calendar year, or [fourteen,] ten work-
weeks in the aggregate in the, case of an employer who does not qual-
ify for the exemption in subsection (c) of this section, ally employer
may employ any employee for a workweek in excess of that Specified
in subsection (a) without paying the compensation for overtime em-
ployment pi escribed in such subsection, if such emnllloy ee-
(1) is employed by such employer i.n an enterprise which is in
an industry formd by the Sc c r c ta.ry-
(A) to be characterized by marked annually recurring
seasonal peaks of operation at 't be places of first marketing or
first processing of agri.cltltttraI or horticultural commodities
from farms if such in itiistxv is engaged in the handling, pack-
ing, preparing, storing, first processing, or canning of any
perishable agriculture-l or horticultural commodities in their
raw or natural state, or
(B) to be of a seasonal nature and engaged in the han-
dling, packing, storing, preparing, first processing, or canning
of any perishable agricultural or Horticultural commodities
in their raw or natural state, and
(2) receives compensation for employment by such employer
in excess of ten hours in any workday, or for employment in
excess of forty-eight hours in any workweek, as the case may be,
at a rate not less than one and one-half times the regular rate at
which he is employed.1
i Effective January 1, 1975, See. 7 (c) and (d) are each aniended-
(1) by striking out `seven workweeks" and inserting in lieu thereof "five work-
weeks", and
(2) by striking out "ten work-weeks" and inserting In lieu thereof "seven work-
weeks".
Effective January 1, 1976, See. 7(c) and 7(d) are each awended-
(1) by striking out "five workweeks" and Inserting In lien thereof "three work-
weeks". and
(2) by striking out "seven workweeks" and inserting in lien thereof "five work-
week s".
Effective December 31, 1976, sections 7(e) and 7(d) are repealed.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 :SCIA-RDP75B0038OR000800030001-4
(e) As used. in this section the "regular rate" at which an employee
is employed shall be deemed to include all remuneration for employ-
ment paid to, or on behalf of, tl: e employee, but shall not be deemed
to include--
(1) sums paid as gifts; payments in the nature of gifts made at
Christmas time or on other special occasions, as a reward for
service, the amounts of which are not measured by or dependent
on hours worked, production, or efficiency;
(2) payments made for occasional periods when no work is
performed due to vacation, holiday, illness, failure of the em-
ployer to provide sufficient work, or other similar cause; reason-
able payments for traveling expenses, or other expenses, incurred
by an employee in the furtherance of his employer's interests and
properly reimbursable by the employer; and other similar pay-
ments to an employee which are not made as compensation :for
his hours of employment;
(3) sums paid in recognition of services performed di-ring; a
given period if either, (2) both the fact that payment is to be
made and the amount of the payment are determined at the sole
discretion of the employer al. or near the end of the period and
not pursuant to any prior contract, agreement, or promise causing
the employee to expect such payments regularly; or (b) the pay-
ments are made pursuant to a bona fide profit-sharing plan or
trust or bona fide thrift or savings plan, meeting the requirements
of the Secretary of Labor set forth in appropriate regulation
which he shall issue, having due regard among other relevant
factors, to the extent to which the amounts paid to the employee
are determined witout :regard to hours of work, production, or
efficiency; or (c) he payments are talent fees (as such talent fees
are defined and delimited by regulations of the Secretary) paid
to performers, including announcers, on radio and television
programs;
(4) contributions irrevocably made by an employer to a trustee
or third person pursuant to a bona fide plan for providing old-
age, retirement, life, accident, or health insurance or similar bene-
fits for employees ;
(5) extra compensation provided by a premium rate paid for
certain hours worked by the employee in any day or workweek
because such hours are hours worked in excess of eight in a day
or in excess of the maximum workweek applicable to such em-
ployee under subsection (a) or in excess of the employee's normal
working hours or regular working hours, as the case may be;
(6) extra compensation prodded by a premium rate paid for
work by the employee on Saturdays, Sundays, holidays, or regular
days of rest, or cn the sixth or seventh day of the workweek,
where such premium rate is not less than one and one-half times
the rate established in good faith for like work performed in non-
overtime hours on ether days; or?
(7) extra compensation provided by a premium rate paid to the
employee, in pursuance of an applicable employment contract or
collective-bargaining agreement, for work outside of the hours es-
tablished in good :'aith by the contract or agreement as the basic^,
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/2'7 CIA-RDP75B0038OR000800030001-4
normal, or regular workday (not exceeding eight hours) or work-
week (not, exceeding the maximum workweek applicable to such
employee under subsection (a) ), where such premium rate is not
less than one and one-half times the rate established in good faith
by the contract or agreement for like work performed during
such workday or workweek.
(f) No employer shall be deemed to have violated subsection
(a) by employing any employee for a workweek in excess of the
maximum workweek applicable to such employee under subsection
(a) if such employee is employed pursuant to a bona fide individual
contract, or pursuant to an agreement made as a result of collective
bargaining by representatives of employees, if the duties of such em-
ployee necessitate irregular hours of work, and the contract or agree-
ment (1) specifies a regular rate of pay not less than the minimum
hourly rate provided in subsection (a) or (b) of section 6 (whichever
may be applicable) and compensation at not less than one and one-
half times such rate for all hours worked in excess of such maximum
workweek and (2) provides a weekly guaranty of pay for more than
sixty hours based on the rates so specified.
(g) No employer shall be deemed to have violated subsection (a)
by employing any employee for a workweek in excess of the maxi-
mum workweek applicable to such employee under such subsection
if, pursuant to an agreement or understanding arrived at between
the employer and the employee before performance of the work, the
amount paid to the employee for the number of hours worked by him
in such workweek in excess for the maximum workweek applicable to
such employee under such subsection-
(1) in the case of an employee employed at piece rates, is
computed at piece rates not less than one and one-half times the
bona fide piece rates applicable to the same work when performed
during no overtime hours; or
(2) in the case of an employee performing two or more kinds
of work for which different hourly or piece rates have been estab-
lished, is computed at rates not less than one and one-half times
such bona fide rates applicable to the same work when performed
during nonovertime hours; or
(3) is computed at a rate not less than one and one-half times
the rate established by such agreement or understanding as the
basic rate to be used in computing overtime compensation there-
under : Provided, That the rate so established shall be authorized
by regulation by the Secretary of Labor as being substantially
equivalent to the average hourly earnings of the employee, ex-
clusive of overtime premiums, in the particular work over a
representative period of time;
and if (i) the employee's average hourly earnings for the workweek
exclusive of payments described in paragraphs (1) through (7) of
subsection (e) are not less than the minimum hourly rate required by
applicable law, and (ii) extra overtime compensation is properly com-
puted and paid on other forms of additional pay required to be in-
cluded in computing the regular rate.
(h) Extra compensation paid as described in paragraphs (5), (6),
and (7) of subsection (e), shall be creditable toward overtime com-
pensation payable pursuant to this section.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 SPIA-RDP75B0038OR000800030001-4
(i) No employer shill be deemed to have violated subsection (a) by
employing any employee of a retail or service establishment for a
workweek in excess of the applicable workweek specified therein, if
(1) the regular rate of pay of such employee is in excess of one and
one-half times the minimum hourly rate applicable to hire under sec-
tion 6 and (2) more than half his compensation for a representative
period (not Mess than one month) represents commissions on goods or
services. In determining the proportion of compensation representing
commissions, all earnings resulting from the application of a bona fide
commission rate shall be deemed commissions on goods or services
without regard to whether the computed commissions exceed the draw
or guarantee.
(l) No employer engaged in the operation of a hospital or an estab-
lishment which is an institution primarily engaged in the care of the
sick, the aged or the mentally ill or defective who reside on the
premises shall be decried to have violated subsection (a) if, pursuant
to an agreement or understanding arrived at between the employer
and the employee before performance of the work, a work period of
fourteen consecutive days is accepted in lieu of the workweek of seven
consecutive days for purposes of overtime computation and if, for his
employment in excess of eight boars in any workday and in excess of
eighty hours in such fourteen-day period, the employee receives coin-
pensation at a rate not less than one and one-half times the regular
rate at which he is employed.
(k) No public agency shall be deemed to have violated subsection
(a) with regard to any employee engaged in fire protection or lau+
enforcement, aactivitier (including, security personnel in correctional
institutions) if, pursuant to an agreement or understanding arrived
at between the eand the employee before performance of the
work, a work period employer
o of twenty e,'ght consecutive days is accepted in
lieu of the worn tireek of seven consecutive days for purposes of over-
time computation. and if the employee receives compensation at a rate
not less than one and one-half times the regular rate at which he is
employed for his employment in excess of-
(1) one hundred and ninety-tv)o hours in each such twenty-eight
day period during the, first year from the effective date of the Feb,
Labor Standards Amendments of (0) one hundred and eighty-four hours in each, such twenty-eight
day period during the second year from such date;
(3) one hundred and seventy-six hours in each such twenty-eight
day period during th c third year from such date;
(4) one hundred O !,"d sixty-eight hours in each such twenty-eight
day period during the fourth year from such date; and
(5) one hundred and sixty hours in, each such twenty-eight day
period thereafter.
(7) Subsection, (a) (1) shall apply with respect to any employee
who in any workweek is employed in domestic service in a household
unless such employee's compensats'on. for such work would not because
of section 209(g) of he Social ti'ecu-city Act constitute "wages", for
purposes of title II of such Act.
(m) For a period er periods of not more than fourteen workweeks
in the aggregate in ar.y calendar ;scar, any employer may employ any
employee for a u~orkweele in excess of that specified in subsection (a)
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/2389CIA-RDP75BOO38OROOO8OOO3OOO1-4
without paying the compensation for overtime employment prescribed
in such subsection, if such employee-
(1) is employed by such employer-
(A) to provide services (including stripping and grading)
necessary and incidental to the sale at auction of green leaf
tobacco of type 11, 12, 13, 14, 21, 02, 23, 24, 31, 35, 36, or 37
(as such types are defined by the Secretary of Agriculture),
or in auction sale, buying, handling, stemming, redrying,
packing, and storing of such tobacco,
(B) in auction sale, buying, handling, sorting, grading,
packing, or storing green leaf tobacco of type 32 (as such
type is defined by the Secretary of Agriculture), or
(C) in auction sale, buying, handling, stripping, sorting,
grading, sizing, packing, or stemming prior to packing, of
perishable cigar leaf tobacco of type 41, I2, 43, 44, 45, 46, 51,
52, 53,154, 55, 61, or 62 (as such types pare defined by the Sec-
retary of Agriculture); and
(2) receives for-
(A) such employment by such employer which is in excess
of ten hours in any workday, and
(B) such employment by such employer which is in excess
of forty-eight hours in any workweek.
compensation at a rate not less than one and one-half times the
regular rate at which he is employed.
An employer who receives an exemption under this subsecetion shall
not be eligible for any other exemption under this section.
(n) In the case of an employee of an employer engaged in the busi-
ness of operating a street, suburban or interurban electric railway, or
local trolley or motorbus carrier (regardless of whether or not such
railway or carrier is public or private or operated for profit or not for
profit), in determining the hours of employment of such an employee
to which the rate prescribed by subsection (a) applies there shall be
excluded the hours such employee was employed in charter activities
by such employer if (1) the employee's employment in such activities
was pursuant to an agreement or understanding with his employer ar-
rived at before engaging in such employment, and (0) if employment
in such activities is not part of such employeee's regular employment.
-WAGE ORDERS IN PUERTO RICO AND THE VIRGIN ISLANDS
SEC. 8. (a) The policy of this Act with respect to industries or enter-
prises in Puerto Rico and the Virgin Islands engaged in commerce
or in the production of goods for commerce is to reach as rapidly as
is economically feasible without substantially curtailing employment,
the objective of [the minimum wage prescribed in paragraph (1) of
section 6(a) in each such industry.] the minimum wage rate which
would apply in each such industry under paragraph (1) or (5) of
section 6(a) but for section 6(c). The Secretary of Labor shall con-
vene an industry committee or committees, appointed pursuant to sec-
tion 5, and any such industry committee shall from time to time recom-
mend the minimum rate or rates of wages to be paid under section
6 by employers in Puerto Rico or the Virgin Islands, or in Puerto Rico
and the Virgin Islands, engaged in commerce or in the production of
S. Rept. 93-690-7
Approved For Release 2002/01/23 : CIA-RDP75BOO38OR000800030001-4
 Approved For Release 2002/01/23 gIPlA-RDP75B00380R000800030001-4
goods for commerce or in any enterprise engaged in commerce or in the
production of goods for commerce in any such industry or classifica-
tions therein. Minimum rates of wages established in accordance with
this section which are not equal to [the minimum wage. rate prescribed
in paragraph (1) of section 6(a)] the otherwise applicable minimum
wage rate in effect wader paragraph (1) or (5) of section 6(a) shall
be reviewed by such a committee once during each biennial period, be-
ginning with the biennial period commencing July 1, 1958, except that
the Secretary, in his discretion, may order an additional review dur-
ing any such~biennial period.
(b) Upon the convening of any such industry committee, the
Secretary shall refer to it the question of the minimum wage rate
or rates to be fixed for such industry. The industry committee shall
investigate conditions in the industry and the committee, or any
authorized subcommittee thereof, shall after due notice hear such
witnesses and receiv> such evidence as may be necessary or aprro-
priate to enable the committee to perform its duties and functions
under this Act. The committee shall recommend to the Secretary the
highest minimum wage rates fcr the industry which it determines,
having due regard to economic and competitive conditions, will not
substantially curtail employment in the industry, and will not give
any industry in Puerto Rico or in the Virgin Islands a competitive
advantage over any industry in the United States outside of Puerto
Rico and the Virgin [Islands.] Islands; except that the committee
shall recommend to the Secretary the minimum wage rate prescribed
in section 6(a) or 6(b), which would be applicable but fr section
6(c), unless there is substantial documentary evidence, including
pertinent unabridged profit and. loss statements and balance sheets
for a representative period of nears or in the case of employees of
public agencies other appropriate information, in the record which
establishes that the industry, or a predominant portion thereof, is
unable to pay that wage.
(c) The industry committee shall recommend such reasonable clas-
sifications within any industry as it determines to be necessary for
the purpose of fixing for each classification within such industry the
highest minimum wage rate (not in excess of that [prescribed in
paragraph (1) of section 6(a))] in effect under paragraph (1) or (5)
of section 6(a) (as the case may be)) which (1) will not substantially
curtail employment in such classifcation and (2) will not give a com-
petitive advantage to any group in the industry, and shall recommend
for each classification in the industry the highest minimum wage rate
which the committee determines will not substantially curtail employ-
ment in such classification. In determining whether such classifications
should be made in any industry, in making such classifications, and
in determining the minimum wane rates for such classifications, no
classifications shall be made, ana no minimum wage rate ,halo be
fixed, solely on a regional basis, but the industry committee shall
consider among other relevant factors the following:
(1) competitive conditions as affected by transportation, living,
an production costs;
(2) the wages established for work of like or comparable char-
acter by collective labor agreeme:ats negotiated between employers
and employees by representatives of their own choosing; and
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : 6A-RDP75B00380R000800030001-4
(3) the wages paid for work of life or comparable character by
employers who voluntarily maintain minimum wage standards
in the industry.
No classification shall be made under this section on the basis of
age or sex.
(d) The industry committee shall file with the Secretary a report
containing its findings of fact and recommendations with respect to
the matters referred to it. Upon the filing of such reports, the Secre-
tary shall publish such recommendations in the Federal Register and
shall provide by order that the recommendations contained in such
report shall take effect upon the expiration of 15 days after the date
of such publication.
(e) Orders issued under this section shall define the industries and
classifications therein to which they are to apply, and shall contain
such terms and conditions as the Secretary finds necessary to carry
out the purposes of such orders, to prevent the circumvention or
evasion thereof, and to safeguard the minimum wage rates established
therein.
(f) Due notice of any hearing provided for in this section shall be
given by publication in the Federal register and by other means as
the Secretary deems reasonably calculated to give general notice to
interested persons.
SEC. 9. For the purpose of any hearing or investigation provided
for in this Act, the provisions of sections 9 and 10 (relating to the
attendance of witnesses and the production of books, papers, and
documents) of the Federal Trade Commission Act of September 16,
1914, as amended (U.S.C., 1934 edition, title 15, secs. 49 and 50), are
hereby made applicable to the jurisdiction, powers, and duties of the
Secretary of Labor and the industry committees.
SEC. 10. (a) Any person aggrieved by an order of the Secretary
issued under section 8 may obtain a review of such order in the United
States Court of Appeals for any circuit wherein such person resides or
has his principal place of business, or in the United States Court of
Appeals for the District of Columbia, by filing in such court, within
60 days after the entry of such order a written petition praying that
the order of the Secretary be modified or set aside in whole. or in part.
A copy of such petition shall forthwith be transmitted by the clerk of
the court to the Secretary, and thereupon the Secretary shall file in the
court the record of the industry committee upon which the order
complained of was entered, as provided in section 2112 of title 28,
United States Code. Upon the filing of such petition such court shall
have exclusive jurisdiction to affirm, modify (including provision for
the payment of an appropriate minimum wage rate), or set aside such
order in whole or in part, so far as it is applicable to the. petitioner.
The review by the court shall be limited to questions of law, and find-
ings of fact by such industry committee when supported by substantial
evidence shall be conclusive. No objection. to the order of the Secretary
shall be considered by the court unless such objection shall have been
Approved For Release 2002/01/23 : CIA-RDP75B00380R000800030001-4
 Approved For Release 200210112 ': CIA-RDP75B0038OR000800030001-4
urged before such industry committee or unless there were reasonable
grounds for failure so to do. If application is made to the court, for
Ieave to adduce additional evidence, and it is shown to the satisfaction
of the court that such additional evidence may materially affect the
result of the proceeding and that there were reasonable grounds for
failure to adduce such evidence in th3 proceedings before such industry
committee, the court may order such additional evidence to be taken
before an industry committee and tD be adduced upon the hearing in
such manner and upon such terms and conditions .as to the court may
seem proper. Such industry committee may modify the initial findings
by reason of the additional evidenca so taken, and shall file with the
court such modified or new findings which if supported by substantial
evidence shall be conclusive, and shall also file its recommendation, if
any, for the modification or setting aside of the original order. The
judgment and decree of the court shall be final, subject to review by
the Supreme Court of the United States upon certiorari or certifica-
tion as provided in section 1251 of title 28 of the United States CDde.
(b) The commencement of proceedings under subsection (a) shall
not, unless specifically ordered by the court, operate as a stay of the
Secretary's order. The court shall not grant any stay of the order
unless the person complaining of such order shall file in court an un ler-
taking with a surety or sureties satisfactory to the court for the pay-
ment to the employees affected by the order, in the event such order
is affirmed, of the amount by which the compensation such employees
are entitled to receive under the order exceeds the compensation they
actually receive while such stay is in effect.
INVESTIGATIONS, INSPECTIONS, RECORDS, AND HOMEWORK REGULATICNS
SEC. 11. (a) The Secretary of Labor or his designated representatives
may investigate and gatl:ier data regarding the wages, hours, and other
conditions and practices of employment in any industrial subject to
this Act, and may enter and Inspect such places and such records
(and make such transcriptions thereof), question such employees, and
investigate such facts, conditions, practices, or matters as he may deem
necessary or appropriat, to determine whether any person has vio-
lated any provision of this Act, or which may aid in the enforcement
of the provisions of this Act. Except as provided in section 12 and in
subsection (b) of this section, the Secretary shall utilize the bureaus
and divisions of the Department of Labor for all the investigations and
inspections necessary under this sect-on. Except as provided in section
12, the Secretary shall bring all actions under section 17 to restrain
violations of this Act.
(b) With the consent and cooperation of State agencies charged
with the administration of State labor laws, the Secretary of Labor
may, for the purpose of carrying out his functions and duties under
this Act, utilize the serv:ces of State and local agencies and their em
ployees and, notwithstanding any other provision of law, may reim-
burse such State and local agencies and their employees for services
rendered for such purposes.
(c) Every employer subject to any provision of this Act of any
order issued under this Act shall make, keep, and preserve such
records of the persons employed by :him and of the wages, hours, and
other conditions and practices of employment maintained by him,
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : C1P3RDP75B00380R000800030001-4
and shall preserve such records for such periods of time, and shall make
such reports therefrom to the Secretary as he shall prescribe by regula-
tion or order as necessary or appropriate for the enforcement of the
provisions of this Act or the regulations or orders thereunder.
(d) The Secretary is authorized to make such regulations and orders
regulating, restricting, or prohibiting industrial homework as are nec-
essary or appropriate to prevent the circumvention or evasion of and
to safeguard the minimum wage rate prescribed in this Act, and all
existing regulations or orders of the Administrator relating to indus-
trial homework are hereby continued in full force and effect.
SEc. 12. (a) No producer, manufacturer, or dealer shall ship or
deliver for shipment in commerce any goods produced in an establish-
ment situated in the United States in or about which within thirty
days prior to the removal of such goods therefrom any oppressive
child labor has been employed. Provided, That any such shipment or
delivery for shipment of such goods by a purchaser who acquired them
in good faith in reliance on written assurance from the producer,
manufacturer, or dealer that the goods were produced in compliance
with the requirements of this section, and who acquired such goods
for value without notice of any such violation, shall not be deemed
prohibited by this subsection. And provided further, That a prosecu-
tion and conviction of a defendant for the shipment or delivery for
shipment of any goods under the conditions herein prohibited shall be
a bar to any further prosecution against the same defendant for ship-
ments or deliveries for shipment of any such goods before the begin-
ning of said prosecution.
(b) The Secretary of Labor, or any of his authorized representa-
tives, shall make all investigations and inspections under section 11 (a)
with respect to the employment of minors, and, subject to the direction
and control of the Attorney General, shall bring all actions under
section 17 to enjoin any act or practice which is unlawful by reason
of the existence of oppressive child labor, and shall administer all
other provisions of this Act relating to oppressive child labor.
(c) No employer shall employ any oppressive child labor in com-
merce or in the production of goods for commerce or in any enterprise.
engaged in commerce or in the production of goods for commerce.
(d) In order to carry out the objectives of this section, the Secre-
tary ma?l by regulation require employers to obtain from any employee
proof of age.
SEc. 13. (a) The provisions of sections 6 (except sections 6(d) in
the case of paragraph (1) of this subsection) and 7 shall not apply
with respect to-
(1) any employee employed in a bona fide executive, admin-
istrative, or professional capacity (including any employee em-
ployed in the capacity of academic administrative personnel or
teacher in elementary or secondary schools), or in the capacity
of outside salesman (as such terms are defined and delimited
from time to time by regulations of the Secretary, subject to the
provisions of the Administrative Procedure Act, except that an
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/3: CIA-RDP75B0038OR000800030001-4
employee of a retail or service establishment shall not be excluded
from the definition oi.? employee employed in a bona fide executive
or. administrative capacity because of the number of hours in his
workweek which he devotes to activities not directly or closely
related to the performance of executive or administrative activi-
ties, if less than 40 per centum of his hours worked. in the work-
week are devoted in such activities) Act; or
(2) any employee employed by any retail or service establish-
ment (except an establishment or employee engaged in laundering,
cleaning, or repairing clothing or fabrics or an establishment
engaged in the operation of a hospital, institution, or school de-
scribed in section 3 (s) 4 if more than 50 percentum of such
establishment's annual dollar vo:ume of sales of goods or services
is made within the Mate in which the establishment is located,
and such establishment is not in an enterprise described in sec-
tion 3(s) or such establishment has an annual dollar volume of
sales which is less than [$250,000] $225,000 (exclusive of excise
taxes at the retail level which are separately stated). A "retai'i[ or
service establishment" shall mean an establishment 75 per centum
of whose annual dollar volume of sales of goods or service (or of
both) is not for resale and is recognized as retail sales or services
in the particular industry ? or 1
(3) any employee employed 'ay an establishment which is an
amusement of recreational establishment, if (A) it does not op-
erate for more than seven months in any calendar year, or (B)
during the preceding calendar year, its average receipts for any
six months of such year were not more than 331/3 per centum of
its average receipts for the othe-^ six months of such year; or
(4) any employee employed by an establishment which quali-
fies as an exempt retail establishment under clause (2) of this
subsection and is recognized as a retail establishment in the par-
ticular industry notwithstanding that such establishment makes
or processes at the retail establishment the goods that it sells :
Provided, That more than 85 per centum of such establishment's
annual dollar volume of sales of goods so made or processed is
made within the State in which the establishment is located; or
(5') any employee employed in the catching, taking, propagat-
ing, arvc,sting, cultivating, or farming of any kind of fish, shell-
fish, crnstacea, sponges, seaweeds, or other aquatic forms of ani-
mal and vegetable life, or in the first processing, canning or
packing such. marine products -,,t sea as an incident to, or in con-
junction with, such fishing operations, including the going to
and returning from work and loading and unloading when per-
formed by any such employee; cr
(6) any employee employed in agriculture (A) if such em-
ployee is employed by an employer who did not, during any cal-
endar quarter during the preceding calendar year, use more than
five hundred man-hour days of agricultural labor, (B) if such
employee is the parent, spouse, ,h,hild, or other member of his em-
iaote: The abore chaxgc'in section ]'4 (a) (9) is elfectire July 1, 1971, note also that---
Itifecti.r.e July i, 1975. such section is amended by striking out 1$225,000" and insert-
ing in lieu tlncreo("$-001000".
Tfective July 1, 1976, such section is amended by striking out "or such, establisl.~aernt
has an annual dollar volume of sales which is less than $200,000 (exclusive of excise
taxes at the retail level which are separately stated)".
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 9CIA-RDP75B00380R000800030001-4
ployer's immediate family, (C) if such employee (i) is em-
ployed as a hand harvest laborer and is paid on a piece rate basis
in an operation which has been, and is customarily and generally
recognized as having been, paid on a piece rate basis on the region
of employment, (ii) commutes daily from his permanent resi-
dence to the farm on which he is so employed, and (iii) has been
employed in agriculture less than thirteen weeks during the pre-
ceding calendar year, (D) if such employee (other than an em-
ployee described in clause (C) of this subsection) (i) is sixteen
years of, age or under and is employed as a hand harvest laborer,
is paid on a piece rate basis in an operation which has been, and
is customarily and generally recognized as having been, paid on
a piece rate basis in the region of employment, (ii) is employed
on the same farm as his parent or person standing in the place
of his parent, and (iii) is paid at the same piece rate as employees
over sixteen are paid on the same farm, or (E) if such employee is
principally engaged in the range production of livestock; or
(7) any employee to the extent that such employee is exempted
by regulations, order or certificate of the Secretary issued under
section 14; or
(8) any employee employed in connection with the publication
of any weekly, semiweekly, or daily newspaper with a circula-
tion of less than four thousand the mayor part of which circulation
is within the county where published or counties contiguous there-
to; or
[(9) any employee employed by an establishment which is a
motion picture theater; or]
(10) any switchboard operator employed by ,inindependently
owned public telephone company which has not more than seven
hundred and fifty stations; or
( (11) any employee or proprietor in a retail or service establish-
ment which qualities as an exempt retail or service establish-
ment under clause (2) of this subsection with respect to whom
the provisions of sections 6 and 7 would not otherwise apply, en-
gaged in handling telegraphic messages for the public under an
agency or contract arrangement- with a telegraph company where
the telegraph message revenue or such agency does not exceed
$500 a month; or]
(12) any employee employed as a seaman on a vessel other
than an American vessel ; or
[(13) any employee employed in planting or tending trees,
cruising, surveying, or felling timber,- or in preparing or trans-
porting logs or other forestry products to the mill, processing
plant, railroad, or other transportation terminal, if the number of
employees employed by his employer in such forestry or lumber-
ing operations does not exceed eight; or]
((14) any agricultural employee employed in the growing and
harvesting of shade-grown tobacco who is engaged in the process-
ing (including, . but not limited to, drying, curing, fermenting,
bulking, rebulking, sorting, grading, aging, and bailing) of such
tobacco, prior to the stemming process, for use as cigar wrapper
tobacco.]
(15) any employee employed on a casual basis in domestic serv-
ice employment to provide babysitting services or any employee
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/2396C1A-RDP75B00380R000800030001-4
employed in domestic service employment to provide companion-
sh2p services for individuals u ho (because of age or infirmity) are
unable to care fo7 themselves (as such terms are defined and de-
limited by regulations of the Secretary).
(b) The provisions of section 7 shall not apply with respect to-
(1) any employee with respect to whom the Secretary of Trans-
portation has power to esta`:)lish qualifications and maximiril
hours of service pursuant to the provisions of section 204 of the
Motor Carrier Act, 1935; or
(2) any employee of an employer engaged in the operation of a
common carrier by rail and subject to the provisions of part 1 of
the Interstate Commerce Act; or
(3) any employee of a carrier by air subject to the provisions
of title II of the :Railway La'-)or Act, or
(4) any employee -who is employed 'in the canning, proceSsin,;
marketing, freezing, curing, storing, packing for Shipment, or dis-
tributing of any kind of fish, shellfish, or other aquatic forms
of animal or vegetable life, or any byproduct [thereof;] thereof,
and who receives compensation for employment in excess of forty-
eight hours in any workweek at a rate not less than one and one-
half times the regular rate att v,,hich. he is employed, I or
(5) any individual employed as an outside buyer of poultry,
eggs, cream, or mi:.k, in their raw or natural state; or
(6) any employee employed as a. seaman; or
(7) any driver, operator, cr conductor employed by an em-
ployer engaged in the business of operating a street, suburban
or interurban electric railway, or local trolley or motorbus car-
rier [, if the rate., and services of such railway or carrier are
subject to regulation by a State or local agency] (regardless of
whether or not such, railway or carrier is public or private or oper-
ated for profit or not for profit), if such employee receives com-
pensation for employment in excess of forty-eight hours in any
workweek at a rate not less titan one and one-half times the regu-
lar rate at which he is employed; 2 or
(8) (A) any employee (oth(r than an employee of a hotel o,'
motel who is employed to perform: maid or custodial services)
who is employed by an establi,ihment which is a hotel, motel, o :'
restaurant and v,ho receives compensation for employment in ex-
cess of forty-eight hours in any workweek at a rate not less than,
one and one-half times the regular rate at which he is employed
[; or any employee who (A) is employed by an establishmenr,
which is an institution (other t.' an a hospital) primarily engaged
in the care of the sick, the aged, or the mentally ill or defective
who reside on the premises, and (B) receives compensation for
employment in excess of forty-eight; hours in any workweek at ,.
rate not less than one and one-half times the regular rate at which
he is employed] ; or
, Effective one year after the effective date )f the Fair Labor Standards Amendments o'
1074, section 12 (b) (4) is amended by striking out "forty-eight hours" and inserting in lien
thereof "forty-four tours."
Effective two years after such slate, section 13(b) (4) is repealed.
"Effective one year after the effective date of the Fair Labor' Standards Amendments of
1074, such section is amended by stril;ing oct "forty-eight hours" and inserting in lieu
thereof "forty-four honr.e".
Effective two years 'after suds date, such section is repealed.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 ?blA-RDP75B00380R000800030001-4
(B) any employee who is employed by a hotel or motel to per-
form maid or custodial services and who receives compensation
for employment in excess of forty-eight hours in any. workweek
at a rate not less than one and one-half times the regular rate at
which he is employed; , or
(9) any employee employed as an announcer, news editor,
or chief engineer by a radio or television station the major
studio of which is located (A) in a city or town of one hundred
thousand population or less, according to the latest available
decennial census figures compiled by the Bureau of the Census,
except where such city or town is part of a standard metropolitan
statistical area, as defined and designated by the Bureau of the
Budget, which has a total population in excess of one hundred
thousand, or (B) in a city or town of twenty-five thousand popu-
lation or less, which is part of such an area but is at least 40
airline miles from the principal city in such area; or
(10) (A) Any salesman [,partsman, or mechanic] primarily en-
gaged in selling [or servicing] automobiles, trailers, trucks, farm
implements, boats, or aircraft if he is employed by a nonmanufac-
turing establishment primarily engaged in the business of selling
such boats or vehicles to ultimate purchasers; or
(B) any partsman primarily engaged in selling parts for auto-
mobiles, trucks, or farm implements and any mechanic primarily
engaged in servicing such vehicles, if they are employed by a non-
manufacturing establishment primarily engaged in the business
of selling such vehicles to ultimate purchasers; or
(11) any employee employed as it driver or drivers' Helper
making local deliveries, who is compensated for such employ-
ment on the basis of trip rates, or other delivery payment plan, if
the Secretary shall find that such plan has the general purpose
and effect of reducing hours worked by such employees to, or
below, the maximum workweek applicable to them under section
7(a) ; or
(12) any employee employed in agriculture or in connection
with the operation or maintenance of ditches, canals, reservoirs,
or waterways, not owned or operated for profit, or operated on a
sharecrop basis, and which are used exclusively for supply and
storing of water for agricultural purposes; or
(13) any employee with respect to his employment in agricul-
ture by a farmer, notwithstanding other employment of such
employee in connection with livestock auction operations in which
such farmer is engaged as an adjunct to the raising of livestock,
either on his own account or in conjunction with other farmers, if
such employee (A) is primarily employed during his workweek in
agriculture by such farmer, and (B) is paid for his employment in
connection with such livestock auction operations at a wage rate
not less than that prescribed by section 6(a) (1) ; or
1 Effective one year after the effective date of the Fair Labor Standards Amendments of
1974, subparagraphs (A) and (B) of section 13(b)(8) are each amended by striking out
"forty-eight hours" and inserting In lieu thereof "forty-six hours".
Effective two years after such date, subparagraph (B) of section 13(b)(8) is amended
by striking out "forty-six hours" and inserting in lieu thereof "forty-four hours".
Effective three years after such date, subparagraph (B) of section 13(b) (8) is repealed
and such section is amended by striking out "(A)".
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 gtlA-RDP75B00380R000800030001-4
(14) any employee employed within the area of production (as
defined by the Secretary) by an establishment commonly recog-
nized as a country elevator, including such an establishment which
sells products and serv=ices used in the operation of a farm if no
more than five employees are employed in the establishment in
such operations; or
(15) any employee engaged in [ginning of cotton for :market
in any place of employment located in a county where cotton- is
grown in commercial quantities, or in] the processing of [sugar
beets, sugar-beet molasses, sugarcane, or] maple sap into sugar
(other than refined sugar) or syrup; or
(16) any employee engaged (A) in the transportation and
preparation for transportation of fruits or vegetables, whether or
not performed by the farmer, from the farm to a place of first
processing or first marketing within the same State, or (B) in
transportation, whether or not performed by the farmer, between
the farm and any point within the same State of persons em-
ployed or to be employed in Cie harvesting of fruits or vegetables ;
(17) any driver employed by an employer engaged in the busi-
ness of operating taxicabs ; or
(18) any employee of a retail or service establishment who
is employed primarily in connection with the preparation or
offering of food or beverages for human consumption, either on
the premises, or by such services as catering, banquet, box lunch,
or curb or counter service, to the public, to employees, or to mem-
bers or guests of members of clubs, and who receives compensa-
tion for employment in excess of forty-eight hours in any work-
week at a rate not less than one and one-half times the regular
rate at which he is employed: ' or
(19) any employee of a 'cowling establishment if such em-
ployee receives compensation for employment in excess of forty-
eight hours in any workweek at a rate not less than one and one-
half times the regular rate at which he is [employed] employed; '
or
(00) any emplcyee who is employed in domestic service in a
household and who resides in such house hold; or
(~,11) any agricultural employee employed in the growing anal
harvesting of shode-grown tobacco who is engaged In the proc-
essing but not linmited to, drying, curing, fermenting,
bulking, rebulkinq, sorting, grading, aging, and baling) of such
tobacco, prior to the stemming process, for use as cigar wrapper
tobacco; or
(72) any employee or proprietor in a retail, or service estab-
lis/iment, which qualifies as an exempt retail or service estab-
lish-ment under paragraph (~') of subsection (a) -with respect to
whom the provisicur of sections G and 7 would not otherwise ap-
ply, engaged in handling telegraphic messages for the public
i Effective one year after the effective date of the Fair Labor Standards Amendments of
1974, such section is amended by striking out "forty-eight hours" and inserting in lien
thereof "forty-four hours".
Effective two years after such date, such suction is repealed.
2 Effective one year after the effective date of the Fair Labor Standards Amendments of
1974, section 1.^,(b) is ainenied by striking out "forty-eight hours" and inserting in lien
thereof "forty-four hours".
Effective two years after such date, such section is repealed.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : &-RDP75B00380R000800030001-4
under an agency or contract arrangement with a telegraph com-
pany where the telegraph, message revenue of such agency does
not, exceed ?'500 a month and receives compensation for employ-
ment in excess of forty-eight hours in any workweek at a rate
not less than one and one-half times the regular rate at which
he is employed; 3 or
(2~3) any employee who is employed 'with his spouse by a non-
profit education institution to serve as the parents of children-
(A) who are orphans or one of whose natural parents is
deceased, or
(B). who are enrolled in such institution and reside in
residential facilities of the institution, while such children
are in residence at such Institution,
if such employee and his spouse reside in such facilities, receive,
without cost, board and bodging from such institution, and are
together compensated, on a cash basis, at an annual rate of not
less than $10,000; or
(24) any employee who is engaged in ginning of cotton for
market in any place of employment located in a county where
cotton is grown in commercial quantities and who receives com-
pensation for employment in excess of-
(A) seventy-two hours in any workweek for not more than
six workweeks in a year,
(B) sixty-four hours in any workweek for not more than
four workweeks in that year,
(C) Pty-four hours in any workweek for not more than
two workweeks in that year, and
(D) forty-eight hours in any other workweek in that year,
at a rate not less than one and one-half times the regular rate
at which he is employed; 4 or
(05) any employee who is engaged in the processing of sugar
beets, sugar beet molasses, or sugar cane into sugar (other than
refined sugar) or syrup and.who receives compensation for em-
ployment in excess of-
(A) seventy-two hours in any workweek for not more than
six workweeks in a year.
(B) sixty-four hours in any workweek for not more than
four workweeks in that year,
(C) fifty-four hours in any workweek for not more than
two workweeks in that year, and
II Effective one year after the effective date of the Fair Labor Standards Amendments of
1974, section 13(b) (22) is amended by striking out "forty-eight hours" and inserting in
lieu thereof "forty-four hours".
Effective two years after such date, section 13(b) (22) is repealed.
4 Effective January 1, 1975, section 13(b) (24) is amended-
(A) by striking out "seventy-two" and inserting in lieu thereof "sixty-six"
(B) by striking out "sixty-four" and inserting in lieu thereof "sixty"
(C) by striking out "fifty-four" and inserting in lieu thereof "fifty"
(D) by striking out "and" at the. end of subparagraph (C)
(ii) by striking out "forty-eight hours in any other workweek in that year" and
inserting in lieu thereof the following : "forty-six hours, in any workweek for not more
than two workweeks in that year ; and
forty-four hours in any other workweek in that year,".
Effective January 1, 1976, section 13(b),(24) is amended-
(A) by striking out "sixty-six" and inserting Inlieu thereof "sixty"
(B) by striking out "sixty" and inserting in lieu thereof "fifty-six";
(C) by striking out "fifty" and inserting in lieu thereof "forty-eight"
(D) by striking out "forty-six" and inserting in lieu thereof "forty-four"
(E) by striking out "forty-four" and inserting in lieu thereof "forty".
Approved For Release 2002/01/23 : CIA-RDP75B00380R000800030001-4
 Approved For Release 2002/01/}@(1 CIA-RDP75B0038OR000800030001-4
(h) forty-eight hours in any other workweek in that year,
at a rate not less than one and one-half times the regular rate
at which he is employed,5 or
(26) any employee employea' by an establishment which is a
motion picture theater; or
(27) any employe; employed in planting or tending trees, cruis-
ing, surveying, or felling timber, or in preparing or transporting
logs or other forestry products to the mill, pocessing plant, rail-
road, or other transportation terminal, if the number of employees
employed by his employer in such forestry or lumbering opera-
tions does not exceed eight.
(c) (1) Except as provided in paragraph (2), the provisions of ~ec-
tion 12 relating to child labor shall not apply [with respect] to any
employee employed in agriculture outside of school hours for the school
district where such employee is living while he is so employed if such
employee--
(A) is less than twelve years o f age and (i) is employed by his
parent, or by a person standing in the place of his parent, on a
farnv owned or operated by such parent or person, or (ii.) is em-
ployed, with the consent of his parent or person standing in the
place of his parent, en a farm, none of the employees of which are
(because of section 13(a) (6') (A)) required to be paid at the wage
rate prescribed by section 6(a) (6),
(B) is twelve years or thirteen years of age and (i) such ena-
ployment is with the consent of his parent or person standing in
the place of his parent, or (ii) his parent or such person is em-
ployed on the same farm as such employee, or
(C) is fourteen years of age or older.
(2) The provisions of section 12 relating to child labor shall apply
to an employee below the age of sixteen employed in agriculture in an
occupation that the Secretary of Labor finds and declares to be par-
ticularly hazardous for the employment of children below the age of
sixteen, except where such employee is employed by his parent or by a
person standing in the phnce of his parent on a farm owned or operated
by such parent or person.
(3) The provisions of section 12 relating to child labor shall not
apply to any child employed as an actor or performer in motion pic-
tures or theatrical productions, or in radio or television productions.
(d) The provisions of sections 6, 7, and 12 shall not apply with
respect to any employee engaged in tae delivery of newspapers to the
consumer or to any homeworker engaged in the making of wreaths
composed principally of ratural holly, pine, cedar, or other evergreens
s Effective January 1, 1975, section 13(b) (25) is amended -
(A) by striking out "seventy-two" and inserting in lieu thereof "sixty-six";
(B) by striking out "sixty-four" and inserting in. lieu thereof "sixty"
(C) by striking out "fifty-:'our" and inserting in lieu thereof "fifty"
(D) by striking out "and" at the end of subparagraph (C) ;
(E) by striking out "forty-eight hours in any other workweek in that year" and
inserting in lieu thereof the rollowing : "forsy-six hours in any workweek for not it ore
than two workweeks in that year ; and
"(E) forty-four hours in any other workweek in that year,".
Effective January 1, 1976, section 13(b) (25) is amended-
(A) by striking out "sixty-six" and inserting in lieu thereof "sixty"
(B) by striking out "sixty" and Inserting fn lieu thereof "fifty-six" :
(C) by striking out "fifty" and inserting in lieu thereof forty-eight"
(D) by striking out "fort}-.six" and inserting in lieu thereof "forty-four"
(E) by striking out "forty four" and inserting in lieu thereof "forty".
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 :1t1l1 -RDP75B00380R000800030001-4
(including the harvesting of the evergreens or other forest products
used in making such wreaths).
(e) The provisions of section 7 shall not apply with respect to
employees for whom the Secretary of Labor is authorized to establish
minimum wage rates as provided in section 6 (a) (3), except with
respect to employees for whom such rates are in effect; and with
respect to such employees the Secretary may make rules and regula-
tions providing reasonable limitations and allowing reasonable varia-
tions, tolerances, and exemptions to and from any or all of the provi-
sions of section 7 if he shall find, after a public hearing on the matter,
and taking into account the factors set forth in section 6 (a) (3), ,that
economic conditions warrant such action.
(f) The provisions of sections 6, 7, 11, and 12 shall not apply with
respect to any employee whose services during the workweek are per-
formed in a workplace within a foreign country or within territory
under the jurisdiction of the United States other than the following:
a State of the United States; the District of Columbia; Puerto Rico;
the Virgin Islands; Outer Continental Shelf lands defined in the
Outer Continental Shelf Lands Act (ch. 345, 67 Stat. 462) ; Ameri-
can Samoa; Guam; Wake Island; Eniwetok Atoll; Kwajalein Atoll;
Johnston Island; and the Canal Zone.
(g) The exemption from section O 'provided by paragraphs (2) and
(6) of subsection (a) of this section shall not apply with respect to any
employee employed by an establishment (1) which controls, is con-
trolled by, or is under common control with, another establishment the
activities of which are not related for a common business purpose to,
but materially support, the activities of the establishment employing
such employee; and (2) whose annual gross volume of sales made or
business done, when combined with the annual gross volume of sales
made or business done by each establishment which controls, is con-
trolled by, or is under common control with, the establishment employ-
ing such employee, exceeds $10,000,000 (exclusive of excise taxes at the
retail level which are separately stated), except that the exemption
from section 6 provided by subparagraph (2) of subsection (a) of this
section shall apply with respect to any establishment described in this
subsection which has an annual dollar volume of sales which would
permit it to qualify for the exemption provided in paragraph (2) of
subsection (a) if it were in an enterprise described in section 3(s).
(h) The provisions of section, 7 shall not apply for a period or pe-
riods of not more than fourteen worleweeles in the aggregate in any
calendar year to any employee who-
(1) is employed by such employer-
(A) exclusively to provide services necessary and inciden-
tal to the ginning of cotton in an establishment primarily en-
gaged in the ginning of cotton;
(B) exclusively to provide services necessary and inciden-
tal to the receiving, handling, and storing of raw cotton and
the compressing o f raw cotton when performed at ca cotton
warehouse or compress-warehouse facility, other than one
operated in conjunction with a cotton mill, primarily engaged
in storing and compressing;
(C) exclusively to provide services necessary and inciden-
tal to the receiving, handling, storing, and processing of
Approved For Release 2002/01/23 : CIA-RDP75B00380R000800030001-4
 Approved For Release 2002/01/23 16YA-RDP75B00380R000800030001-4
cottonseed in an establishment primarily engaged in the re-
ceiving, handling, storing, and processing of cottonseed; and
(D) exclusively to provide services necessary and inciden-
tal to the processing of sugar cane or sugar beets in an estab-
lishment primarily engaged in the processing of sugar cane
or sugar beets; and
(2) receiver fo:-
(A) such employment by such employer which is in excess
of ten hours in any workday, and
(B) such employment by such employer which is in excess
of forty-eight; hours in any workweek,
compensation at a rate not less than one and one-half times the
regular rate at which he is employed.
Any employer who receives an exemption under this subsection shall
not be eligible for any other exemption under this section or section 7.
NOTE.-Section 13(a) (2) is further changed following the effective (late of
the Fair Labor Standards Amendments of 1974 and repealed thereafter.
Sic. 13
(1) * * ?
M
(Effective July 1, 1974)
(2) any employee employed by any retail or service establishment (except
an establishment or employee engaged in laundering cleaning, or repairing
clothing or fabrics or an establishn.ient engaged in the operation of a hos-
ital, institution, or echool described in section 3(s) (4), if more than 10
percentum of such establishment's annual dollar volume of sales of goods
or services is made w:.thin the State in which the establishment is located,
and such establishment is not. in an enterprise described in section 3~'s) or
such establishment has an annual dollar volume of sales which is less than
'[$250,000] $225,000 (exclusive of e.;cise taxes at the retail level which are
separately stated). A "retail or service establishment" shall mean an estab-
lishment 75 per centunu of whose annual dollar volume of sales of goods or
services (or of both) is not for resale and is recognized as retail sales or
services in the particul sr industry ; c r
SEC. 13**a
(1) * ? *
(Effeffctive July 1, 1975)
(2) any employee employed by any retail or service establishment (except
an establishment or employee engaged in laundering cleaning, or repairing;
clothing or fabrics or an establishment engaged in the operation of a hospita.
institution, or school described in section 3(s) (4), if more than 50 per centuir.
of such establishment's annual dollar volume of sales of goods or services
is made within the State in which the establishment is located, and such
establishment has an annual dollar volume of sales which is less than
[$225,000] $200,000 (e),-clusive of excise taxes at the retail level which are
separately stated). A "retail or service establishment" shall mean an estab-
lishment 75 per centum of whose annual dollar volume of sales of goods or
services (or of both) is not for resale and is recognized as retail sales or
services in the particular industry ; or
SEC. 13?*?
(1) ? ? ?
(Effective July 1, 1976)
(2) any employee employment by any retail or service establishment (ex-
cept an establishment or employee engaged in laundering, cleaning, or re-
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 1@A-RDP751300380R000800030001-4
pairing clothing or fabrics or an establishment engaged in the operation
of a hospital, institution, or school described in section 3(s) (4), if more than
.50 per centum of such establishment's annual dollar volume of sales of goods
or services is made within the State in which the establishment is located,
and such establishment is not in an enterprise described in section 3(s)
[or such establishment has an annual dollar volume of sales which is less
than $200,000 (exclusive of excise taxes at the retail level which are sep-
arately stated)]. A "retail or service establishment' 'shall mean an estab-
lishment 75 per centum of whose annual dollar volume of sales of goods or
services (or of both) is not for resale and is recognized as retail sales or
services in the particular industry ; or
NOTE-Section 13(b) (7) is further changed effective during the second year following
the effective date of the Fair Labor Standards Amendments of 1974 and repealed
thereafter.
(Effective during the Second year following the effective date)
EXEMPTIONS
SEC. 13. (a)
(b) ***
(1) * * *
*
(7) any driver, operator, or conductor employed by an employer engaged
in the business of operating a street, suburban or interurban electric rail-
way, or local trolley or motorbus carrier (regardless of whether or not such
railway or carrier is public or private or operated for profit), and if such
employee receives compensation for employment in excess of [forty-eight]
forty-four hours in any workweek at a rate not less than one and one-half
times the regular rate at which he is employed ; or
(Effective during the Third year following the effective date and thereafter)
EXEMPTIONS
SEC. 13.(a) ***
(b) * * *
(1) * * *
[(7) any driver, operator, or conductor employed by an employer engaged
in local trolley or motorbus carrier (regardless of whether or not such rail-
way or the business of operating a street, suburban or interurban electric
railway, or carrier is public or private or operated for profit), and if such
employee receives compensation for employment in excess of forty-four hours
in any workweek at a rate not less than one and one-half times the regn-
lar rate at which he is employed ; or]
NOTE.-Section 13(b) (18) Is further changed effective during the second year following
the effective date of the Fair Labor Standards Amendments of 1974 and repealed
thereafter.
(Effective during the Second year following the effective date)
SEC. 13. (a) * * *
(b) * * *
(1) * * *
EXEMPTIONS
* * * * * *
*
(18) any employee of a retail or service establishment who is employed
primarily in connection with the preparation or offering of food or beverages
for human consumption, either on the premises, or by such services as cater-
ing, banquet, box lunch, or curb or counter service, to the public, to
employees, or to members or guests of members of clubs, and receives com-
pensation for employment in excess of [forty-eight] forty-eight hours in
any workweek at a rate not less than one and one-half times the regular
rate at which he is employed ; or
(Effective during the Third year following the effective date and thereafter)
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23(14CIA-RDP75B00380R000800030001-4
SEC. 13. (a) * * *
(b) * * *
(1) * * *
[(18) any employee of a retail o;? service establishment who is employed
primarily in connection with the preparation or offering of food or beverages
for human consunrptioo, either on tie premises, or by such services as cater-
ing, banquet, box lunch, or curb or counter service, to the public, to
employees or to members or guests of members of clubs, and receives core-
pensation for employment in excess, of forty-four hours in any workwee.c
at a rate not less than one and one-half times the regular rate at which he
is employed ; or]
NOTE.-Section 13(b) (19) is changed effective during the second year follow-
ing the effective date of the Fair Labcr Standards Amendments of 1974 and
repealed thereafter.
(Effective during the Third year following the effective date and thereafter'
(h) * * *
(1) * * *
ES;EMP:`iIONS
* *
(19) any employee of a bowling establishment if such employee receives
compensation for employment in excess of [forty-eight] forth-four hours in
any workweek at a ra-e not less then one and one-half tines the regular
rate at which he is employed ; or
(Effective during the Third year following the effective date and thereafter)
SEC. 13. (a)
(b) * * *
(1) * * *
EXEMPTIONS
[(19) any employee of a bowling establishment if such employee receives
compensation for employment in excess of forty-four hours in. any workweek
at a rate not less than one and one-half times the regular rate at which he
is employed ; or]
LEARNERS, APPRENTICES, STUDENTS, AND HANDICAPPED WORKERS
[The Secretary of Labor, to the extent necessary in order to pre-
vent curtailment of opportunities for employment., shall by regula-
tions or by orders provide for the employment of learners, of
apprentices, and of messengers employed primarily in delivering
letters and Inessages, under specia.. certificates issued pursuant to
regulations of the Secretary, at such wages lower than the minimum
wage applicable under section 6 anc' subject to such limitation as to
prescribe.]
T(b) The Secretary, to the extent necessary in order to prevent cur-
tailment of opportunities for employinent, shall by regulation or order
provide for the employment of full-time students, regardless of age
but in compliance with applicable child labor laws, on a part-time
basis in retail or service establishmew;s (not to exceed twenty hours in
any workweek) or on a part-time of a full-time basis in such estab-
lishments during school vacations, under special certificates issued
pursuant to regulations of the Secretary, at a wage rate not less than
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
105
85 per centum of the minimum wage applicable under section 6, ex-
cept that the proportion of student hours of employment to total hours
of employment of all employees in any establishment may not exceed
(1) such proportion for the corresponding month of the twelve-month
period preceding May 1, 1961, (2) in the case of a retail or service es-
tablishment whose employees (other than employees engaged in com-
merce or in the production of goods for commerce) are covered by this
Act for the first time on or after the effective date of the Fair Labor
Standards Amendments of 1966, such proportion for the corresponding
month of the twelve-month period immediately prior to such date, or
(3) in the case of a retail or service establishment coming into ex-
istence after May 1, 1961, or a retail or service establishment for which
records of student hours worked are not available, a proportion of
student hours of employment to total hours of employment of all em-
ployees based on the practice during the twelve-month period preced-
ing May 1, 1961, in (A) similar establishments of the same employer
in the same general metropolitan area in which the new establishment
is located, (B) similar establishments of the same employer in the
same or nearby counties if the new establishment is not in a metropoli-
tan area, or (C) other establishments of the same general character
operating in the community or the nearest comparable community.
Before the Secretary may issue a certificate under this subsection he
must find that such employment will not create a substantial proba-
bility of reducing the full-time employment opportunities of persons
other than those employed under this subsection.
[(c) The Secretary, to the extent necessary in order to prevent cur-
tailment of opportunities for employment, shall by certificate or order
provide for the employment of full-time students, regardless of age
but in compliance with applicable. child labor laws, on a part-time
basis in agriculture (not to exceed twenty hours in any workweek) or
on a part-time or a full-time basis in agriculture during school vaca-
tions, at a wage rate not less than 85 per centum of the minimum wage
applicable under section 6. Before the Secretary may issue a certificate
or order under this subsection he must find that such employment will
not create a substantial probability of reducing the full-time employ-
ment opportunities of persons other than those employed under this
subsection.]
Side. 14. (a) the Secretary, to the extent necessary in, order to pre-
vent curtailment of opportunities for employment, shall by regulations
or by orders provide for the employment of learners, of apprentices,
and of messengers employed primarily in delivering letters and mes-
sages, under special certificates issued pursuant to regulations of the
Secretary, at such wages lower than the 7ninimunz wage applicable
under section 6 and subject to such limitation as to time, number, pro-
portion, and length of service as the Secretary shall prescribe.
(b) (1) (A) The Secretary, to the extent necessary in order to pre-
vent, curtailment of opportunities for eimployment, shall by special
certificate issued under a regulation or order provide, in accordance
with subparagraph (B), for the employment, at a wage rate not less
than 85 per centum of the otherwise applicable wage rate in effect
under section 6 or not less than $1.60 an hour, whichever is the higher
(or in the case of employment in Puerto Rico or the Virgin Islands
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
106
not described in section 5 (e `,, at a wager 'ate not less than 85 per centum
of the otherwise applicable wage rate in effect under section 6(c) ), of
full-time students (regardless of age but in compliance with applicable
child labor la)es) in retail or service establishments.
(B) Except as provided in paragraph (4) (B), the proportion of
student hours of employment under special certificates issued under
subparagraph (A) to the total hours of employment of all employees
in any retail or service establishment may not exceed (2) such propor-
tion for the cor r-esponding mono,, of the twelve-month period preced-
ing tlfay 1, 1961, (ii) in the case of a retail or service establishment
whose employees (other ttian employees engaged in commerce or in
the production of goods for commerce) are covered by this Act for the
first time on or after the effective date of the Fair Labor Standards
Amendments of 1966 or the Fair Labor Standards Amendments of
1974, such proportion lo- the corresponding month of the twelve-
month period immediately prior to the applicable effective date, or
(iii) in the case of a retail or service establishment coming into ex-
istence after May 1, 1961, or a retail or service establishment for which
records of student hours worked are not available, a proportion of stu-
dent hours of employment to total hours of employment of all employ-
ees based on the practice during the twelve-month period preceding
May 1, 1961, in similar establishments of the same employer in the
same general metropolitan area -in which the new establishment is lo-
cated, similar establishments of the same employer in the same or
nearby count?es if the ne,v establishment is not in a metropolitan area,
or other establishments of the same general character operating in the
community or the nearest comparabie community. For the purpose of
the preceding -sentence, t, ,e term "student hours of employment" means
student hours worked at less than $1.00 an hour, except that such term,
shall include, in States whose minimum wages were at or above $1.00
an hour in the base year, hours worked by students at the State m.ini-
mum wage in the base year.
(0) The Secretary, to the extent necessary in order to prevent cur-
tailment of opportunities for employment, shall by special certificate
issued under a regulation or order provide for the employment, at a
wage rate not less than 35 per centum of the wage rate in effect under
section 6(a) (5) or not less than $1.60 an hour, whichever is the higher
(or in the case of employment in Puerto Rico or the Virgin Islands
not described in section (5) (-e), at a wage rate not less than 85 per
centum of the wage race in effect under section (6) (c) (3) ), of full-
time students (regardless of age but in compliance with applicable
child labor laws) in any occupation in agriculture.
(3) The Secretary, to the extent necessary in order to prevent- cur-
tailment o f opportunities for employmxntt, shall by special certificate
issued under a regulation or order provide for the employment by an
institution of higher education, a; a wage rate not less than 85 per
centwm of the otherwise applicable, wage rate in effect under section 6
or not less than $1.60 on hour, whichever is the higher (or in the, cave
of employment in Puerto Rico or the Virgin Islands not described in
section 5 (e) , at a wage rate not less than 85 per centum of the wage rate
in effect under section 6(c) ), of full-time students (regardless of age
but in compliance with applicable child labor laws) who are enrolled in
such institution. The Secretary shall by regulation prescribe stand-
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
107
ards and requirements to insure that this paragraph will not create a
substantial probability of reducing the full-time employment oppor-
tunities of persons other than those to whom the minimum wage rate
authorized by this paragraph is applicable.
(4) (A) A special certificate issued under paragraph (1), (2), or
(3) shall provide that the student or students for whom it is issued
shall, except during vacation periods, be employed on a part-time
basis and not in excess of twenty hours in any workweek.
(B) If the issuance of a special certificate under paragraph (1) or
(2) for an employer will cause the number of students employed by
such employer under special certificates issued under this subsection
to exceed four, the Secretary may not issue such a speeial certificate
for the employment of a student by such. employer unless the Secre-
tary finds employment of such student will not create a substantial
probability of reducing the full-time employment opportunities of
persons other than those employed under special certificates issued
under this subsection. If the issuance of a special certificate under a
paragraph (1) or (2) for an employer -will not cause the number of
students employed by such employer under special certificates issued
under this subsection to exceed four-
(i) the Secretary may issue a special certificate under para-
graph (l) or (2) for the employment of a student by such em-
ployer if such employer certifies to the Secretary that the em-
ployment of such student will not reduce the full-time employ-
ment opportunities of persons other than those employed under
special certificates issued under this subsection, and
(ii) in the case of an employer which is a retail or service estab-
lishme'nt, subparagraph (B) of paragraph (1) shall not apply
with respect to the issuance of special, certificates for such em-
ployer under such paragraph.
The requirement of this subparagraph shall not apply in the case of
the issuance of special certificates under paragraph (3) for the em-
ployment of full-time students by institutions of higher education;
except that if the Secretary determines that an institution of higher
education is employing students under certificates issued under para-
graph (3) but in violation of the requirements of that paragraph or
of regulations issued thereunder, the requirements of this subpara-
graph shall apply with respect to the issuance of special certificates
under paragraph (3) for the employment of students by such insti-
tution.
(C) No special certificate may be issued under this subsection un-
less the employer for whom the certificate is to be issued provides evi-
dence satisfactory to the Secretary of the student status of the em-
ployees to be employed under such, special certificate.
[(d)] (c) (1) Except as otherwise provided in paragraphs (2) and
(3) of this subsection, the Secretary of Labor, to the extent necessary
in order to prevent curtailment of opportunities for employment,
shall by regulation or order provide for the employment under special
certificates of individuals (including individuals employed in agri-
culture) whose earning or productive capacity is impaired by age or
physical or mental deficiency or injury, at wages which are lower
than the minimum wage applicable under section 6 of this Act but
not less than 50 per centum of such wage and which are commensu-
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 1
rate with those paid nonhandieapped workers in industry in the
vicinity for essentially the same type, quality, and quantity of work.
(2) The Secretary, pursuant to such regulations as he shall prescribe
and upon certification of the State agency administering or supw-
vising the adrninistrLtion of vocational rehabilitation services, may
issue special certificates for the employment of-
(A) handicapped workers engaged in work which is incidental
to traudug or evaluation prcgrams, and
(B) mult.ilrandicappecl individuals and other individuals whose
earning capacity is so severe:,} impaired that they are unable to
engage in cornpe.itive employment,
at wages which are less than those required by this subsection and
which are related to the worker's productivity.
(3) (A) The Secretary may by regulation or order provide for the
employment of handicapped clients in work activities centers under
special certificates at Wages which are less than the minimums appli-
cable under section 6 of this Act or prescribed by paragraph (1) of this
subsection and which constitute equitable compensation for such
clients in work activities centers.
(B) For purposes of this section, the term "work activities centers"
shall mean centers planned and designed exclusively to provide
therapeutic activities for handicapped clients whose physical or
mental impairment is so severe as to make their productive capacity
inconsequential.
(d) The Secretary nay by regulatioiz or order provide that sections
6 and 7 shall, not apply with respect to the emnploym nt by any ele-
mentary or secondary school of its students if such employment coca
stitutes, as determined -under regulations prescribed by the AISecretary,
an integral part of the regular education program provided by such
school and such employment is in accordance with, applicable child
labor laws.
PROHIBITIM ACTS
SEC. 15. (a) After th-s expiration of one hundred and twenty days
from the date of enactment of this Act, it shall be unlawful fy
person- or any
to transport, offer for transportation, ship, deliver, or sell
in commerce, or to ship, deliver, or sell with knowledge that ship-
ment or delivery or sale thereof in commerce is intended, any
goods in the production of which any employee was employed in
violation of section 6 or section i', or in violation of any regulation
or order of the Secretary of Labor issued under section 14; except
that no provision of this Act shall impose any liability upon any
common carrier for he transportation in commerce in the regular
course of its business of any goods not produced by such common
carrier, and no provision of this Act shall excuse any common car-
rier from its obligation to accept any goods for transportation ;
and except that any such transportation, offer, shipment, delivery,
or sale of such goods by a purchaser who acquired them in good
faith in reliance on written assurance from the producer that the
goods were produced. in compliance with the requirements of the
Act, and who acquired such goods for value without notice of
any such violation, shall not be deemed unlawful;
Approved For Release 2002/01/23 : CIA-RDP75B00380R000800030001-4
 Approved For Release 2002/01/23 : A-RDP75BOO38OR000800030001-4
(2) to violate any of the provisions of section G or section 7, or
any of the provisions of any regulation or order of the Secretary
issued under section 14;
(3) to discharge or in any other manner discriminate against
any employee because such employee has filed any complaint or
instituted or caused to be instituted any proceeding under or re-
lated to this Act, or has testified or is about to testify in any such
proceeding, or has served or is about to serve on an industry
committee ;
(4) to violate any of the provisions of section 12;
(5) to violate any of the provisions of section 11(c) or any
regulation or order made or continued in effect under the pro-
visions of section 11(d), or to make any statement, report, or rec-
ord filed or kept pursuant to the provisions of such section or of
any regulation or order thereunder, knowing such statement, re-
port, or record to be false in a material respect.
(b) For the purposes of subsection (a) (1) proof that any employee
was employed in any place of employment where goods shipped or
sold in commerce were produced, within ninety days prior to the
removal of the goods from such place of employment, shall be prima
facie evidence that such employee was engaged in the production of
such goods.
SEC. 16. (a) Any person who willfully violates any of the provisions
of section 15 shall upon, conviction thereof be subject to a fine of not
more than $10,000, or to imprisonment for not more than six months,
or both. No person shall be imprisoned under this subsection except
for an offense committed after the conviction of such person for a
prior offense under this subsection.
(b) Any employer who violates the provisions of section 6 or section
7 of this Act shall be liable to the employee or employees affected in
the amount of their unpaid minimum wages, or their unpaid overtime
compensation, as the case may be, and in an additional equal amount
as liquidated damages. Action to recover such liability may be main-
tained against any employer (including a public agency) in any Fed-
eral or State court of competent jurisdiction by any one or more
employees for and in behalf of himself or themselves and other em-
ployees similarly situated. No employee shall be a party plaintiff to
any such action unless he gives his consent in writing to become such a
party and such consent is filed in the court in which such action is
brought. The court in such action shall, in addition to any judgment
awarded to the plaintiff or plaintiffs, allow a reasonable attorney's
fee to be paid by the defendant, and costs of the action.. The right
provided by this subsection to bring an action by or on behalf of any
employee, and the right of any employee to become a party plaintiff to
any such action, shall terminate upon the. filing of a complaint by the
Secretary of Labor in an action under section 17 in which restraint is
sought of any further delay in the payment of unpaid minimum wages,
or the amount of unpaid overtime compensation, as the case may be,
owing to such employee under section 6 or section 7 of this Act by an
employer liable therefor under the provisions of this subsection.
(c) The Secretary [of Labor] is authorized to supervise the pay-
ment of the unpaid minimum wages or the unpaid overtime. compensa-
Approved For Release 2002/01/23 :. CIA-RDP75BOO38OR000800030001-4
 Approved For Release 2002/01/2 l0CIA-RDP75B00380R000800030001-4
tion owing to any employee or employees under sections 6 or [section]
7 of this Act, and the agreement of any employee to accept such pay-
ment shall upon payment in full constitute a waiver by such employee
of any right he may have under subsection (b) of this section to such
unpaid minimum wages or unpaid overtime compensation and an
additional equal ainou:nt as liquidated damages. [when a written
request is filed by any -rnployce with the Secretary claiming unpaid
minimum wages or unpaid overtime compensation under section ti
or section 7 of this Ac,, the] The Secretary may bring an action in
any court of competent, jurisdiction to recover the amount of [such
claim: Provided, That this authority to sue shall not be used by the
Secretary in any case involving an issue of law which has not been
settled finally by the courts, and in any such case no court shall have
jurisdiction over such rction or proceeding initiated or brought by
the Secretary if it does involve any issue of law not so finally settled]
the unpaid minimum wages or overtim compensation and an, equa,!
amount as liquidated damages. [The consent of any employee to the
bringing of any such action by the Secretary, unless such action is
dismissed wthout prejudice on motion of the Secretary, shall consti-
tute a waiver by such employee of any right of action he may have
under subsection (b) of this section for such unpaid minimum wages
or unpaid overtime compensation and an additional equal amount as
liquidated damages.] The right provided by subsection (b) to bring
an action by or on beh zl f of any employee and of any employee to
become a party plaintiff to any such action shall terminate upon: the
filing of a complaint by the Secretary in an action under this subsec-
tion in which a recovery is sought 9f unpaid minimum wages or un-
paid overtime compensation under sections 8 and 7 or liquidated or
other damages provided by this subsection owing to such, employee by
an employer liable under the provision of subsection (b), unless such
action is dismissed without prejudice on motion of the Secretary. Any
sums thus recovered by the Secretary on behalf of an employee pur-
suant to this subsection shall be hell in a special deposit account and
shall be paid, on order of the Secretary, directly to the employee or
employees affected. Any such sums not paid to an employee because of
inability to do so within a period of three years shall be covered into
the Treasury of the United States as miscellaneous receipts. In deter-
mining when an action is commenced by the Secretary under this sub-
section for the purposes of the statutes of limitations provided in sec-
tion 6(a) of the Portal-t:o-Portal Act of .1947, it shall be considered to
be commenced in the cass of any individual claimant on the date when
the complaint is filed if he is specifically named as a party plaintiff in
the complaint, or if his name did not, so appear, on the subsequent date
on which his name is added as a, party plaintiff in such action.
(d) In any action or proceeding commenced prior to, on, or after
the date of enactment of this subsection, no employer shall be subject
to any liability or punishment under this Act or the Portal-to-Portal
Act of 1917 on account of his failure to comply with any provision or
provisions of such Acts (1) with respect to work heretofore or here-
after performed in a workplace to which the exemption in section 13
(f) is applicable, (2) with respect to work performed in Guam, the
Canal Zone or Wake Island before the effective date of this amendment
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CIDP75B00380R000800030001-4
of subsection (d), or (3) with respect to work performed in a posses-
sion named in section 6 (a) (3) at any time prior to the establishment by
the Secretary, as provided therein, of a minimum wage rate applicable
to such work.
(e) Any person who violates the provisions of section 12, relating to
child labor, or any regulation issued under that section, shall be subject
to a civil pennalty of not to exceed $1,000 for each such violation. In de-
termining the amount of such penalty, the appropriateness of such
penalty to the size of the business of the person charged and the gravity
of the violation shall be considered. The amount of such penalty, when
finally determined, may be-
(1) deducted from any sums owing by the United States to the
person charged;
(2) recovered in a civil action brought by the Secretary in any
court of competent jurisdiction, in which litigation the Secretary
shall be represented by the Solicitor of Labor; or
(3) ordered by the court, in an action brought under section
15 (a) (4), to be paid to the Secretary.
Any administrative determination by the Secretary of the amount of
such penalty shall be final, unless within fifteen days after receipt
of notice thereof by certified mail the person charged with the viola-
tion take- exception to the determination that the violations for which
the penalty is imposed occurred, in which event final determination
of the penalty shall be made in an administrative proceeding after op-
portunity for hearing in accordance with section 554 of title 5, United
States Code, and regulations to be promulgated by the Secretary. Sums
collected as penalties pursuant to this section shall be applied toward
reimbursement o f the costs of determining the violation. and assessing
and collecting such penalties', in accordance with the provisions of sec-
tion 3 o.f an Act entitled "An Act to authorize the Department of
Labor to make special statistical studies upon payment of the cost
thereof, and for other purposes" (29 U.S.C. 9a).
Sic. 17. The district courts, together with the United States Dis-
trict Court for the District of the Canal Zone, the District Court of
the Virgin Islands, and the District Court of Guam shall have juris-
diction, for cause shown, to restrain violations of section 15, including
in the case of violations of section 15 (a) (2) the restraint of any with-
holding of payment of minimum wages or overtime compensation
found by the court to be due to employees under this Act (except
sums which employees are barred from recovering, at the time of the
commencement of the action to restrain the violations, by virtue of
the provisions of section 6 of the Portal-to-Portal Act of 1947).
Sin. 18. (a) No provision of this Act or of any order thereunder
shall excuse noncompliance with any Federal or State law or munici-
pal ordinance establishing a minimum wage higher than the minimum
wage established under this Act or a maximum workweek lower than
the maximum workweek established under this Act, and no provision
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/011/g? : CIA-RDP75B0038OR000800030001-4
of this Act relating to t.,.ie emliloynent of child labor shall justify
noncompliance with any Federal or State law or municipal ordinance
establishing a higher standard than the standard established under
this Act. No provisions of this Act shall justify any employer in
reducing a wage paid by him which is in excess of the applicable
minimum wage under this Act, or justify any employed in increasing
hours of employment maintained by him which are shorter than the
maximum hours applicable under this Act..
(b) Notwithstanding any other provision of this Act (other than
section 13(f) or any other law-
(1.) any Federal employee in the Canal lone engaged in em
ploymcnt of the kind described in section 5102(c) (7) of title 5,
United States Code, or
(2) any employee employed in a nonappropriated fund instru-
mentality under the jurisdiction of the Armed Forces.
shall have the basic compensation fixed or adjusted at a wage rate
which is not less than the appropriate wage rate provided for in
section 6(a) (1) of this Act (except that the wage rate provided for
in section 6(b) shall apply to any employee who performed services
during the workweek in a work place within the Canal Zone), and
shall have his overtime compensation set at an hourly rate not less
than the overtime rate provided for in section (a) (1) of this Act.
SEPARABILITY OF PROVISIONS
SEC. 19. If any provision of this Act or the application of such
provision to any person o-c circumstances is held invalid, the remainder
of the Act and the application of such provision to other persons or
circumstances shall not be affected thereby.
OTHER LAWS AMENDED
Section 11 of the Age Discrimination in Employment Act of 1967
Sue. 11: For the purposes of this Acc:
(a) * * *
(b) The terns "employer" means a person engaged in an in-
dustry affecting commerce who 1. as [twenty-five] twenty or more
employees for each working dad- in each of twenty or more cal-
endar weeks in the current or pr?ceding calendar year: Provided,
That prior to June 30, 1968, employers having fewer than fifty
employees shall not be considered employers. [The term also
means any agent of such a person, but such term does not include
the United States, acorporation wholly owned by the Govern-
ment of the United States, or a State or political subdivision
thereof.] The term also means (1) any agent of such a person.,
and (2) a State or political subdivision of a State and any agency
or i.nstruvmentality oif a State or e political subdivision of a State,
and any interstate agency, but such term does not include the
United States, or a corporation wholly owned by the Government
of the United States.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : C A RDP75B00380R000800030001-4
(c) The term "employment agency" means any person regularly
undertaking with or without compensation to procure employees
for an emproyer and includes an agent of such a person; but shall
not include an agency of the United States [, or an agency of a
State or political subdivision of a State, except that such term
shall include the United States Employment Service and the
system of State and local employment services receiving Federal
assistance].
(f) The term "employee' means an individual employed by any
[employer.] employer except that the term "employee" shall not in-
elude any person elected to public office in any State or political sub-
division o l any State by the qualified voters thereof, or any person
chosen by such o ffieer to be on such officer's personal staff, or an ap-
pointee on the policymaking level or an immediate adviser with respect
to the exercise of the constitutional or legal powers of the office. The
exemption set forth, in the preceding sentence shall not include em-
ployees subject to the civil service laws of a State government, gov-
ernmental agency, or political subdivision.
Section 14 of the Age Discrimination in Employment Act of 1967
FEDERAL-STATE RELATIONSHIP
SEC. 14. (a) Nothing in this Act shall affect the jurisdiction of any
agency of any State performing like functions with regard to dis-
criminatory employment practices on account of age except that upon
commencement of action under this Act such action shall supersede
any State action.
(b) In the case of an alleged unlawful practice occurring in a State
which has a law prohibiting discrimination in employment because
of age and establishing or authorizing a State authority to grant or
seek relief from such discriminatory practice, no suit may be brought
under section 7 of this Act before the expiration of sixty days after
d proceedings have been commenced under the State law, unless such
proceedings have been earlier terminated : Provided, That such sixty-
day period shall be extended to one hundred and twenty days during
the first year after the effective date of such State law. If any require-
ment for the commencement of such proceedings is imposed by a State
authority other than a requirement of the filing of a written and signed
statement of the facts upon which the proceeding is based, the pro-
ceeding shall be deemed to have been commenced for the purposes
of this subsection at the time such statement is sent by registered mail
to the appropriate State authority.
NONDISCRIMINATION ON ACCOUNT OF AGE IN FEDERAL GOVERNMENT
EMPLOYMENT
SEc. 15. (a) All personnel actions affecting employees or applicants
for employment (except with regard to aliens employed outside the
limits of the United States) in military departments as defined in sec-
tion 102 of title 5, United States Code, in executive agencies as defined
in section 105 of title 5, United States Code (including employees and
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/4: CIA-RDP75B0038OR000800030001-4
applicants for employment who are paid from nonappropriated
funds), in t United States Postal Service and the Postal Rate Com-
mission, in those units in the government of the District of Columbia
having positions in the competitive +aervice, and in those units of the
legislative and judicial branches of the Federal Government having
positions in the competh'ive service, and in the Library of Congress
shall be made free from any discrimination based on age.
(b) Except as otherwive provided in this subsection, the Civil Serv-
ice Commission iv authorized to enforce the provisions of subsection
(a) through appropriate remedies, including reinstatement or hiring
of employees with. or without backpa:y, as will effectuate the policies of
this section. The Civil Service Commission shall issue such rules, regu-
lations, orders, and instructions as it deems necessary and appropriate
to carry out its responsibilities under this section. The Civil Service
Commission shall
(1) be responsible for the review and evaluation of the opera-
tion of all agency programs designed to carry out the policy of
this section, periodically obtaining and publishing (on at least a
sem-iar-rnual basis) progress reports from each such department,
agency, or unit;
(2) consult with and solicit t1e recommendations of interested
individuals, groups. and organizations relating to nondiscrimi-
nation in employment, on account of age; and
(3) provide for the acceptance and processing of complaints of
discrimination in Federal employment on account of age.
The head of each such. department, agency, or unit shall comply with
such rules, regulations-, orders., and instructions of the (Ilvil Service
Commzission which shall include a. provision that an employee or ap-
plicant for emplo.yment shall be notified on any final actin, taken on
any complaint of discrimination filed by him thereunder.IT easanoble
exeniption.s to the provisions of this section may be established by the
Com=mission but only when the Commission has established a maxi-
mum age requirement en the basis of (7, determination that age is a
bona fide ocr-etpational qualification necessary to the performance of
the duties of the position,. With respect to employment in the Library
of Congress, authorities granted in Oi.is subsection to the Civil Service
Commission shall be exercised by the Liltrarian of Congress.
(c) Any persons aggrieved may bring a civil action in any Federal'
district court of competent jurisdiction for such legal or equitable
relief as a iill effectuate the purposes of this Act.
(d) TI he,. the ~ndr.,~i~lual, has nor: fled a coma.plaint conccaning age
discrim,inatiol, with th,, Commission, no civil action mazy be .om-
menced by array individual under this section until the indvvidua7 ha's
given the Corn.missio:n rot less than thirty days' notice of an intent to
file such. rac'r'i~trt,, Such ;notice shall be fled within one hundred and
eighty drys 'iften Co" alleged unlawful practice occurred. Upon re--
eeiv;nrr a nzo`ice of let nt to sue, the Gonna:issiorr shall promptly notify
all persons ,minced therein. as prospective defendants in the action and
take any appropriate action to assure the elimination of any unlawfull
practice.
(e) Nothing contained in this section shall relieve any Government
agency or official of the responsibility to assure nondiscrimination on
account of age in employment as required under any provision of Fed-
eral law.
. Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CA5RDP75B00380R000800030001-4
Section [1.5] 16 of the Age Discrimination in Employment Act
of 1967
EFFECTIVE DATE
SEC. [15] 16. This Act shall become effective one hundred and
eighty days after enactment, except (a) that the Secretary of Labor
may extend the delay in effective date of any provision of this Act up
to an additional ninety days thereafter if he finds that such time is
necessary in permitting adjustments to the provisions hereof, and (b)
that on or after the date of enactment the Secretary of Labor is au-
thorized to issue such rules and regulations as may be necessary to
carry out its provisions.
Section [16] 17 of the Age Discrimination Employment Act of 1967
Si:c. [16] 17. There are hereby authorized to be appropriated such
sums, not in excess of [$3,000,000] $5,000,000 for any fiscal year, as
may be necessary to carry out this Act.
PERTINENT PROVISIONS AFFECTING THE FAIR LABOR
STANDARDS ACT FROM THE PORTAL-TO-PORTAL ACT
OF 1947
(61 Stat. 84)
[PUBLIC LAW 49-SOTII CONGRESS]
[CIIAPTEI{ 52-1ST SESSION]
[II.R. 2157]
AN ACT, To relieve employers from certain liabilities and punishments under
the Fair Labor Standards Act of 1938, as amended, the Walsh-Healey Act,
L and the Bacon-Davis Act, and for other purposes
Be it enacted by the Senate and house of Representatives of the
United States of America in Congress assembled,
MISCELLANEOUS
* * * * * *
SEC. 6. STATUTE or LmIITATIONS.-Any action commenced on or after
the date of the enactment of this Act to enforce any cause of action
for unpaid minimum wages, unpaid overtime compensation, or liqui-
dated damages, under the Fair Labor Standards Act of 1938, as
amended, the Walsh-IIealey Act, or the Bacon-Davis Act-
(a) if the cause of action accrues on or after the date of the
enactment of this Act-may be commenced within two years after
the cause of action accrued, and every such action shall be for-
ever barred unless commenced within two years after the cause of
action accrued, except that a cause of action arising out of a will-
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/011.49: CIA-RDP75B0038OR000800030001-4
ful violation may be -,ommenced within three years after the cause
of action accrued;
(d) with respect to any cause of action brought under section 16 (,b)
of the Fair Labor Standards Act of 1.938 against a State or a poli6cal
subdivision of a State in a district court of the United States on or
before April 18, 1974, the running of the statutory periods of limita-
tion shall be deemed suspended during the period beginning with the
commencerrrrent of any such action and ending one hundred and eighty
days after the effective date of the Fair Labor Standards Amendment
of 1974, except that such. suspension shall not be applicable if in such
action judgment has been entered for the defendant on grounds other
than State immunity from Federal jurisdiction.
SEC. 11. LIQUIDATED DAMAGES.-In any action commenced prior to
or on or after the date of the enactment of this Act to recover unpaid
minimum wages, unpaid overtime compensation, or liquidated dam-
ages, under the Fair Labor Sta:adarc!s Act of 1938, as amended, if the
em plover shows to the satisfaction of the court that the act or omis-
sion giving rise to such action was in good faith and that he had
reasonable grounds for believing that. his act or omission was not a
violation of the Fair Labor Standards Act of 1938, as,amended, the
court may, in its sound discretion, award no liquidated damages or
award any amount thereof not to exceed the amount specified in sec-
tion 16[(b)] of such Act.
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
MINORITY VIEWS OF MESSRS. TAFT, DOMINICK
AND BEALL
Amendments to the Fair Labor Standards Act have not been
enacted since 1966, and we recognize a need for a constructive increase
in the minimum wage. In the interim, the debate surrounding mini-
miun wage legislation has centered around. four issues: wage rates,
extensions of coverage, repeal of exemptions and a differential wage
structure for youth. Unfortunately, after three years of Congressional
consideration, no constructive amendments to the Act have become
law. The bill reported out by the Committee is essentially identical
to the bill vetoed by the President in the summer of 1973, and the rea-
sons for rejecting the bill last Session are equally as compelling in
certain areas for S. 2747.
The Committee heard no witnesses and had before it little or no
current data upon which to assess the effects on the economy of the
actions it took, especially with regard to exemptions and extensions
of coverage. The failure of the Committee to include new initiatives
to reduce youth unemployment is also extremely disappointing.
In our Minority Views to last year's vetoed bill, S. 1861, we stated
in detail our reasons for rejecting the Committee's approach, and
we would reiterate some of them briefly here.
First, we believe the coup de grace approach that the Committee has
taken with respect to existing exemptions is unwarranted. The poten-
tial adverse economic effect resulting from repeal or modification of
these exemptions to certain segments of the economy, especially small
businesses, is significant and in certain cases the Committee's action
may mean economic fatality for many small businesses in the country
and many thousands of their employees. For example, S. 2747 would
repeal or severely modify current exemptions in the Fair Labor
Standards Act for the following areas and occupational categories :
retail and service establishments grossing less than $250,000 annually
(complete repeal of minimum, wage and overtime exemption) ; to-
bacco employees; nursing home employees; hotel, motel and restaurant
employees; salesmen, partsmen and mechanics; food service establish-
ment employees; seasonal industry employees; cotton ginning and
sugar processing employees; and, local transport employees.
At the very least, action should not be taken in these areas until
sufficient facts are before the Committee to permit each exemption to
be considered on its own merit.
Second, S. 2747 is deficient with regard to new initiatives to increase
employment opportunities for youth. As an example of this acute
problem, the national unemployment rate as of January, 1974, for
Caucasians 16 and 17 years of age was 16.8% and for non-Caucasians
16 and 17 years of age, the rate was a towering 38.9%. These statistics
underscore the need for implementation of a national program of
specialized wage structures for youth similar to proposals we have
(117)
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4
 Approved For Release 2002/01/2311?LIA-RDP75B00380R000800030001-4
advocated during prior consideration on this issue. Such a national
initiative would constructively supplement the broad authority the
Secretary of Labor currently ha,,: available under Section 14 of the
Act with regard to adoption of special wage structures for youth
employment and training.
Domestic service employees would be covered for the first time
under the bill as reported by the Committee with a wage scale for
such employees the same as that established for those who have been
under coverage for some time. Waile we share the concern the Corn-
mittec has expressed for the economic advancement for individr.als :in
this occupational category, we believe such au extension of coverage
under the Act will further complicate tax and reporting problems
and create further unemployment. Certainly a more practical ap-
proach than covering all such employees who earn more than $50 In 11
calendar quarter (Committee incorporation of Section 209(g) of the
Social Security Act) can be found to reflect the Committee's concern
in this area.
We believe Congress should expeditiously enact constructive in-
creases in the minimum wage to help compensate for the erodes!. pu -
chasing power of our lowest paid workers. The longer a minimum
wage increase is postponed, the greater the pressure will be for exces-
sive increases over toe short a period of time, thus maximizing the
inflationary and disemploymant effects on the economy. To continue
to hold a wage rate increase hostage to unrelated political issues, only
penalizes our Nation's lowest; paid workers. Therefore, we are hope-
ful the Senate will adopt constructive changes in the Committee bill
to permit amendments to the Fair Labor Standards Act to become
a reality during this Session of Congress.
ROBERT TAFT, JR.
PETER DOMINICIi.
J. GLENN BEALL, Jr?
Approved For Release 2002/01/23 : CIA-RDP75B0038OR000800030001-4