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CONGRESS
1st Session
) HOUSE OF EEPEESENTATIVES (
KEPORT
j
( No. 1453
FAIR LABOR STANDARDS AMENDMENTS OF 1949
OCTOBER
.Mr.
LESINSKI,
17, 1949.—Ordered to be printed
from the committee of conference, submitted the
following
CONFERENCE REPORT
[To accompany H. R. 5856]
The committee of conference on the disagreeing votes of the two
Houses on the amendment of the Senate to the bill (H. R. 5856) to
provide for the amendment of the Fair Labor Standards Act of 1938,
and for other purposes, having met, after full and free conference,
have agreed to recommend and do recommend to their respective
Houses as follows:
That the House recede from its disagreement to the amendment of
the Senate and agree to the same with an amendment as follows:
In lieu of the matter proposed to be inserted by the Senate amendment insert the following: That this Act may be cited as the l F,air
Labor Standards Amendments of 1949".
DECLARATION
OF POLICY
SEC. 2. Section 2 (b) of the Fair Labor Standards Act of 1938, as
amended, is amended to read as follows:
"(b) It is hereby declared to be the policy of this Act, through the exercise by Congress of its power to regulate commerce among the several
States and with foreign nations, to correct and as rapidly as practicable
to eliminate the conditions above referred to in such industries without
substantially curtailing employment or earning power."
DEFINITIONS
SEC. 3. (a) Section 3 (b) of such Act is amended to read as follows:
"(b) 'Commerce' means trade, commerce, transportation, transmission,
or communication among the several States or between any State and any
place outside thereof."
H. Kept. 1453, 81-1
1
2
FAIR LABOR STANDARDS AMENDMENTS OF 1949
(6) Section 3 (j) of such Act is amended to read as follows:
"(j) 'Produced' means produced, manufactured, mined, handled, or
in any other manner worked on in any State; and for the purposes of this
Act an employee shall be deemed to have been engaged in the production
of goods if such employee was employed in producing, manufacturing,
mining, handling, transporting, or in any other manner working on such
goods, or in any closely related process or occupation directly essential
to the production thereof, in any State."
(c) Clause (1) of section 3 (I) of such Act is amended to read as follows:
"(1) any employee under the age of sixteen years is employed by an
employer {other than a parent or a person standing in place of a parent
employing his own child or a child in his custody under the age of sixteen
years in an occupation other than manufacturing or mining or an occupation found by the Secretary of Labor to be particularly hazardous for
the employment of children between the ages of sixteen and eighteen years
or detrimental to their health or well-being) in any occupation",
(d) Section 3 of such Act is further amended by adding at the end thereof
twou newl paragraphs
as follows:
{n) Resale1 shall not include the sale of goods to be used in residential
or farm building construction, repair, or maintenance: Provided, That
the sale is recognized as a bonafide retail sale in the industry.
" (o) Hours Worked.—In determining for the purposes of sections 6
and 7 the hours for which an employee is employed, there shall be excluded
any time spent in changing clothes or washing at the beginning or end
of each workday which was excluded from measured working time during
the week involved by the express terms of or by custom or practice under
a bona fide collective-bargaining agreement applicable to the particular
employee."
ADMINISTRATOR
SEC. 4- Section 4 (&) of such Act is amended by striking out "$10,000"
and inserting in lieu thereof "$15,000".
SPECIAL INDUSTRY COMMITTEES FOR PUERTO RICO AND THE
VIRGIN ISLANDS
SEC. 5. Section 5 of such Act is amended to read as follows:
"SEC. 5. (a) The Administrator shall as soon as practicable appoint
a special industry committee to recommend the minimum rate or rates of
wages to be paid under section 6 to employees in Puerto Rico or the Virgin
Islands, or in Puerto Rico and the Virgin Islands, engaged in commerce
or in the production of goods for commerce, or the Administrator may appoint separate industry committees to recommend the minimum rate or
rates of wages to be paid under section 6 to employees therein engaged in
commerce or in the production of goods for commerce in particular industries. An industry committee appointed under this subsection shall
be composed of residents of such island or islands where the employees
with respect to whom such committee was appointed are employed and
residents of the United States outside of Puerto Rico and the Virgin
Islands. In determining the minimum rate or rates of wages to be paid,
and in determining classifications, such industry committees and the Administrator shall be subject to the provisions of section 8.
"(b) An industry committee shall be appointed by the Administrator
without regard to any other provisions of law regarding the appointment
FAIR LABOR STANDARDS AMENDMENTS OF 1949
3
and compensation of employees of the United States. It shall include a
number of disinterested persons representing the public, one of whom the
Administrator shall designate as chairman, a like number of persons
representing employees in the industry, and a like number representing
employers in the industry. In the appointment of the persons representing each group, the Administrator shall give due regard to the geographical
regions in which the industry is carried on.
"(c) Two-thirds of the members of an industry committee shall constitute a quorum, and the decision of the committee shall require a vote
of not less than a majority of all its members. Members of an industry
committee shall receive as compensation for their services a reasonable per
diem, which the Administrator shall by rules and regulations prescribe,
for each day actually spent in the work of the committee, and shall in
addition be reimbursed for their necessary traveling and other expenses.
The Administrator shall furnish the committee with adequate legal,
stenographic, clerical, and other assistance, and shall by rules and
regulations prescribe the procedure to be followed by the committee.
" (d) The Administrator shall submit to an industry committee from
time to time such data as he may have available on the matters referred to
it, and shall cause to be brought before it in connection with such matters
any witnesses whom he deems material. An industry committee may
summon other witnesses or call upon the Administrator to furnish additional information to aid it in its deliberations."
MINIMUM WAGES
SEC. 6. (a) Section 6 (a) of such Act is amended by striking out
subparagraphs (1), (2), (S), and (4) and inserting in lieu thereof the
following:
" (1) not less than 75 cents an hour;11.
(b) Such section 6 (a) is further amended by striking out "(5)" and
inserting in lieu thereof "(2)".
(c) Section 6 (c) of such Act is amended to read as follows:
" (c) The provisions of paragraph (1) of subsection (a) of this section
shall be superseded in the case of any employee in Puerto Rico or the Virgin Islands engaged in commerce or in the production of goods for commerce only for so long as and insofar as such employee is covered by a
wage order heretofore or hereafter issued by the Administrator pursuant to
the recommendations of a special industry committee appointed pursuant to
section 5: Provided, That the wage order in effect prior to the effective
date of this Act for any industry in Puerto Rico or the Virgin Islands
shall apply to every employee in such industry covered by subsection (a)
of this section until superseded by a wage order hereafter issued pursuant
to the recommendations of a special industry committee appointed pursuant to section 5."
MAXIMUM HOURS
SEC. 7. Section 7 of such Act is amended to read as follows:
U
SEC. 7. (a) Except as otherwise provided in this section, no employer
shall employ any of his employees who is engaged in commerce or in the
production of goods for commerce for a workweek longer than forty hours,
unless such employee receives compensation for his employment in excess
of the hours above specified at a rate not less than one and one-half times
the regular rate at which he is employed.
4
FAIR LABOR STANDARDS AMENDMENTS OF 1949
"(b) No employer shall be deemed to have violated subsection (a) by
employing any employee for a workweek in excess of that specified in such
subsection without paying the compensation for overtime employment prescribed therein if such employee is so employed—
"CO in pursuance of an agreement, made as a result of collective
bargaining by representatives of employees certified as bona fide by
the National Labor Relations Board, which provides that no employee
shall be employed more than one thousand and forty hours during any
period of twenty-six consecutive weeks; or
"{2) in pursuance of an agreement, made as a result of collective
bargaining by representatives of employees certified as bona fide by
the National Labor Relations Board, which provides that during a
specified period of fifty-two consecutive weeks the employee shall
be employed not more than two thousand two hundred and forty hours
and shall be guaranteed not less than one thousand eight hundred
and forty hours (or not less than forty-six weeks at the normal
number of hours worked per week, but not less than thirty hours
per week) and not more than two thousand and eighty hours of employment for which he shall receive compensation for all hours
guaranteed or worked at rates not less than those applicable under
the agreement to the work performed and for all hours in excess of
the guaranty which are also in excess of forty hours in the workweek
or two thousand and eighty in such period at rates not less than one
and one-half times the regular rate at which he is employed; or
"(3) for a period or periods of not more than fourteen workweeks
in the aggregate in any calendar year in an industry found by the
Administrator to be of a seasonal nature,
and if such employee receives compensation for employment in excess of
twelve hours in any workday, or for employment in excess of fifty-six
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.
" (c) In the case of an employer engaged in the first processing of milk,
buttermilk, whey, skimmed milk, or cream into dairy products, or in
the ginning and compressing of cotton, or in the processing of cottonseed,
or in the processing of sugar beets, sugar-beet molasses, sugarcane, or
maple sap, into sugar (but not refined sugar) or into sirup, the provisions
of subsection (a) shall not apply to his employees in any place of employment where he is so engaged; and in the case of an employer engaged in
the first processing of, or in canning or packing, perishable or seasonal
fresh fruits or vegetables, or in the first processing, within the area of
production (as defined by the Administrator),
of any agricultural
or horticultural commodity during seasonal operations, or in handling,
slaughtering, or dressing poultry or livestock, the provisions of subsection
(a), during a period or periods of not more than fourteen workweeks
in the aggregate in any calendar year, shall not apply to his employees
in any place of employment where he is so engaged.
" (d) As used in this section the (regular rateJ at which an employee
is employed shall be deemed to include all remuneration for employment
paid to, or on behalf of, the employee, but shall not be deemed to include—
"CO 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;
FAIR LABOR STANDARDS AMENDMENTS OF 194 9
5
" (2) payments made for occasional periods when no work is
performed due to vacation, holiday, illness, failure of the employer
to provide sufficient work, or other similar cause; reasonable payments
jor 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 payments to an employee which
are not made as compensation for his hours of employment;
"(3) Sums paid in recognition of services performed during a
given period if either, (a) both the fact that payment is to be made and
the amount of the payment are determined at the sole discretion of the
employer at 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 payments are made pursuant to
a bona fide profit-sharing plan or trust or bonajide thrift or savings
plan, meeting the requirements of the Administrator set forth in appropriate regulations which he shall issue, having due regard among
other relevant factors, to the extent to which the amounts paid to the
employee are determined without regard to hours of work, production,
or efficiency; or (c) the payments are talent fees (as such talent fees
are defined and delimited by regulations of the Administrator) 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 benefits 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
forty in a work week or in excess of the employee's normal working
hours or regular working hours, as the case may be;
"(6) extra compensation provided by a premium rate paid for
work by the employee on Saturdays, Sundays, holidays, or regular
days of rest, or on 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 nonovertime
hours on other 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
established in good faith by the contract or agreement as the basic,
normal, or regular workday (not exceeding eight hours) or workweek
(not exceeding forty hours), 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.
"(e) No employer shall be deemed to have violated subsection (a) by
employing any employee for a workweek in excess of forty hours if such
employee is employed pursuant to a bona fide individual contract, or pursuant to an agreement made as a result oj collective bargaining by representatives of employees, if the duties of such employee necessitate irregular hours of work, and the contract or agreement (1) specifies a regular
rate of pay of not less than the minimum hourly rate provided in section
6
FAIR LABOR STANDARDS AMENDMENTS OF 1 9 4 9
6 (a) and compensation at not less than one and one-half times such rate
for all hours worked in excess of forty in any workweek, and (2) provides
a weekly guaranty of pay for not more than sixty hours based on the rates
so specified.
"(f) No employer shall be deemed to have violated subsection (a) by
employing any employee for a workweek in excess of forty hours 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 of forty hours—
"(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
nonovertime 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 established,
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
rale to be used in computing overtime compensation thereunder:
Provided, That the rate so established shall be authorized by regulation by the Administrator as being substantially equivalent to the
average hourly earnings of the employee, exclusive 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 (d) are not less than the minimum hourly rate required by applicable law, and (ii) extra overtime compensation is properly computed and
paid on other forms of additional pay required to be included in computing
the regular rate.
"(g) Extra compensation paid as described in paragraphs (5), (6),
and (7) of subsection (d) shall be creditable toward overtime compensation payable pursuant to this section."
WAGE ORDERS IN PUERTO RICO AND THE VIRGIN
ISLANDS
SEC.
8. Section 8 of such Act is amended to read as follows:
11
SEC. 8. (a) The policy of this Act with respect to industries 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 Administrator shall from time to time convene an industry committee or committees, appointed pursuant to section 5, and any such
industry committee shall from time to time recommend 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 goods for commerce in any such industry
or classifications therein.
"(b) Upon the convening of any such industry committee, the Administrator shall refer to it the question of the minimum wage rate or rates to be
FAIR LABOR STANDARDS AMENDMENTS OF 19 49
7
fixed for such industry. The industry committee shall investigate
conditions in the industry and the committee, or any authorized subcommittee thereof, may hear such witnesses and receive such evidence
as may be necessary or appropriate to enable the committee to perform its
duties and functions under this Act. The committee shall recommend
to the Administrator the highest minimum wage rates for 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.
" (c) The industry committee shall recommend such reasonable classifications 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)) which (1) will not substantially curtail employment
in such classification and (2) will not give a competitive 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 employment in such classification. In determining whether such classifications should be made in
any industry, in making such classfications, and in determining the
minimum wage rates for such classifications, no classifications shall be
made, and no minimum wage rate shall be fixed, solely on a regional
basis, but the industry committee and the Administrator shall consider
among other relevant factors the following:
"(1) competitive conditions as affected by transportation, living,
and production costs;
" (2) the wages established for work of like or comparable character by collective labor agreements negotiated between employers and
employees by representatives of their own choosing; and
" (3) the wages paid for work of like 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 Administrator a report
containing its recommendations with respect to the matters referred to it.
Upon the filing of such report, the Administrator, after due notice to
interested persons, and giving them an opportunity^ to be heard, shall by
order approve and carry into effect the recommendations contained in such
report, if he finds that the recommendations are made in accordance with
law, are supported by the evidence adduced at the hearing, and, taking into
consideration the same factors as are reauired to be considered by the
industry committee, will carry out the purposes of this section; otherwise
he shall disapprove such recommendations. If the Administrator disapproves such recommendations, he shall again refer the matter to such
committee, or to another industry committee for such industry (which he
may appoint for such purpose), for further consideration and recommendations.
"(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 Administrator finds necessary to carry out the
purposes of such orders, to prevent the circumvention or evasion thereof,
8
FAIR LABOR STANDARDS AMENDMENTS OF 194 9
and to safeguard the minimum wage rates established therein. No such
order shall lake effect until after due notice is given of the issuance thereof
by publication in the Federal Register and by such other means as the
Administrator deems reasonably calculated to give to interested persons
general notice of such issuance.
"(/) Due notice of any hearing provided for in this section shall be
given by publication in the Federal Register and by such other means a$
the Administrator deems reasonably calculated to give general notice to
interested persons.77
INVESTIGATIONS,
INSPECTIONS,
RECORDS, AND HOMEWORK
REGULATIONS
SEC. 9. Section 11 of such Act is amended by adding at the end thereof
the following new subsection:
u
{d) The Administrator is authorized to make such regulations and
orders regulating, restricting, or prohibiting industrial homework as are
necessary 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 industrial
homework are hereby continued in full force and effect."
CHILD LABOR PROVISIONS
SEC. 10. (a) Section 12 (a) of such Act is amended to read as follows:
" (a) No producer, manufacturer, or dealer shall ship or deliver for
shipment in commerce any goods produced in an establishment 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 prosecution 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 shipments or deliveries for shipment of any such goods
before the beginning of said prosecution.71
(b) Section 12 of such Act is further amended by adding at the end
thereof the following new subsection:
"(c) No employer shall employ any oppressive child labor in commerce
or in the production of goods for commerce."
EXEMPTIONS
SEC. 11. Section 13 of such Act is amended to read as follows:
SEC. 13. (a) The provisions of sections 6 and 7 shall not apply uMh
respect to (1) any employee employed in a bona fide executive, administrative, professional, or local retailing capacity, or in the capacity of
outside salesman (as such terms are defined and delimited by regulations
of the Administrator); or (2) any employee employed by any retail or
service establishment, more than 50 per centum of which establishments
annual dollar volume of sales of goods or services is made within the
State in which the establishment is located. A {retail or service establishmen? shall mean an establishment 75 per centum of whose annual dollar
U
FAIR LABOR STANDARDS AMENDMENTS OF 19 49
9
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 (3)
any employee employed by any establishment engaged in laundering,
cleaning or repairing clothing or fabrics, more than 50 per centum of
which establishment's annual dollar volume of sales of such services is
made within the State in which the establishment is located: Provided, That
75 per centum of such establishment's annual dollar volume of sales of
such services is made to customers who are not engaged in a mining,
manufacturing, transportation, or communications business; or (4) any
employee employed by an establishment which qualifies as an exempt retail
establishment under clause (2) of this subsection and is recognized as
a retail establishment in the particular 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, harvesting, cultivating, or
farming of any kind offish, shellfish, cru^tacea, 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 (other than canning), marketing, freezing, curing, storing,
or distributing the above products or byproducts thereof; or (6) 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 share-crop ba^is, and which are used
exclusively for supply and storing of water for agricultural purposes; or
(7) any employee to the extent that such employee is exempted by regulations or orders of the Administrator issued under section 14', or (8)
any employee employed in connection with the publication of any weekly,
semiweekly, or daily newspaper with a circulation of less than four
thousand the major part of which circulation is within the county where
printed and published or counties contiguous thereto; or (9) any employee of a street, suburban, or interurban electric railway, or local
trolley or motorbus carrier, not included in other exemptions contained
in this section; or (10) any individual employed within the area of production (as defined by the Administrator), engaged in handling, packing,
storing, ginning, compressing, pasteurizing, drying, preparing in their
raw or natural state, or canning of agricultural or horticultural commodities for market, er in making cheese or butter or other dairy products;
or (11) any switchboard operator employed in a public telephone exchange which has not more than seven hundred and fifty stations; or
(12) any employee of an employer engaged in the business of operating
taxicabs; or (13) any employee or proprietor in a retail or service establishment as defined in clause (2) of this subsection with respect to whom
the provisions of sections 6 and 7 would not otherwise apply, engaged in
handling telegraphic messages for the public under an agency or contract
arrangement with a telegraph company where the telegraph message
revenue of such agency does not exceed $500 a month; or (14) any employee
employed as a seaman; or (15) any employee employed in planting or
tending trees, cruising, surveying, or felling timber, or in preparing or
transporting legs or other forestry products to the mill, processing plant,
railroad, or other transportation terminal, if the number of employees
H. Kept. 1453, 81-1
2
10
FAIR LABOR STANDARDS AMENDMENTS OF 1949
employed by his employer in such forestry or lumbering operations does
not exceed twelve.
"(b) The provisions of section 7 shall not apply with respect to (1) any
employee with respect to whom the Interstate Commerce Commission has
power to establish qualifications and maximum hours of service pursuant
to the provisions of section 204 of the Motor Carrier Act, 1935; or (2) any
employee of an employer subject to the provisions of part I of the Interstate Commerce Act; or (3) any employee of a carrier by air subject to
the provisions of title II of the Railway Labor Act; or (4) any employee
employed in the canning of any kind of fish, shellfish, or other aquatic
forms of animal or vegetable life, or any byproduct the?eof; or (5) any
individual employed as an outside buyer of poultry, eggs, cream, or milk,
in their raw or natural state.
"(c) The provisions of section 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, or to any child employed as an actor or performer in motion
pictures 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 the delivery of newspapers to the
LEARNERS,
APPRENTICES, AND HANDICAPPED WORKERS
SEC. 12. Section 14 of such Act is amended by striking out in clause
(1) the word "exclusively" and inserting in lieu thereof the word
"primarily".
PROHIBITED ACTS
SEC. 13. (a) Section 15 (a) (1) of such Act is amended by adding at
the end thereof the following: "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."
(b) Section 15 (a) (5) of such Act is amended by inserting after
"section 11 (c)" the following: "or any regulation or order made or continued in effect under the provisions of section 11 (d)"'.
PENALTIES
SEC. 14. Section 16 of such Act is amended by adding at the end thereof
the following new subsection:
"(c) The Administrator is authorized to supervise the payment of the
unpaid minimum wages or the unpaid overtime compensation owing to
any employee or employees under section 6 or section 7 of this Act, and the
agreement of any employee to accept such
payment shall upon payment
in full constitute a waiver by such emp7oyee 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 amount as
liquidated damages. When a written request^ is filed by any employee
with the Administrator claiming unpaid minimum wages or unpaid
overtime compensation under section 6 or section 7 of this Act, the Administrator may bring an action in any court of competent jurisdiction to
FAIR LABOR STANDARDS AMENDMENTS OF 1949
11
recover the amount of such claim: Provided, That this authority to sue
shall not be used by the Administrator 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 action or proceeding initiated or
brought by the Administrator if it does involve any issue of law not so
finally settled. The consent of any employee £o the bringing of any such
action by the Administrator, unless such action is dismissed without
prejudice on motion of the Administrator, shall constitute 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. Any
sums thus recovered by the Administrator on behalf of an employee pursuant to this subsection shall be held in a special deposit account and shall
be paid, on order of the Administrator, 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 determining
when an action is commenced by the Administrator under this subsection
for the purposes of the two-year statute of limitations provided in section
6 (a) of the Portal-to-Portal Act of 1947, it shall be considered to be commenced in the case 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."
INJUNCTION
PROCEEDINGS
SEC.
15. Section 17 of such Act is amended to read as follows:
11
SEC. 17. The district courts, together with the District Court for the
Territory of Alaska, the United States District Court for the District of
the Canal Zone, and the District Court of the Virgin Islands shall have
jurisdiction, for cause shown, to restrain violations of section 15: Providedr
That no court shall have jurisdiction, in any action brought by the Admin**
istrator to restrain such violations, to order the payment to employee? of
unpaid minimum wages or unpaid overtime compensation or an additional equal amount as liquidated damages in such action."
MISCELLANEOUS AND EFFECTIVE BATE
SEC. 16. (a) The amendments made by this Act shall take effect
upon the expiration of ninety days from the date of its enactment; except
that the amendment made by section 4 shall take effect on the date of its
enactment.
(b) Except as provided in section 3 (o) and in the last sentence of
section 16 (c) of the Fair Labor Standards Act of 1938, as amended, no
amendment made by this Act shall be construed as amending, modifying,
or repealing any provision of the Portal-to-Portal Act of 1947.
(c) Any order, regulation, or interpretation of the Administrator of
the Wage and Hour Division or of the Secretary of Labor, and any agreement entered into by the Administrator or the Secretary, in effect under
the provisions of the Fair Labor Standards Act of 1938, as amended, on
the effective date of this Act, shall remain in effect as an order, regulation,
interpretation, or agreement of the Administrator or the Secretary, as
the case may be, pursuant to this Act, except to the extent that any such
order, regulation, interpretation, or agreement may be inconsistent with
12
FAIR LABOR STANDARDS AMENDMENTS OF 1949
the provisions of this Act, or may from time to time be amended, modified,
or rescinded by the Administrator or the Secretary, as the case may be, in
accordance with the provisions of this Act.
(d) No amendment made by this Act shall affect any penalty or liability^ with respect to any act or omission occurring prior to the effective date of
this Act; but, after the expiration of two years from such effective date, no
action shall be instituted under section 16 (b) of the Fair Labor Standards
Act of 1938, as amended, with respect to any liability accruing thereunder
for any act or omission occurring prior to the effective date of this Act.
(e) No employer shall be subject to any liability or punishment under
the Fair Labor Standards Act of 1938, as amended {in any action or proceeding commenced prior to or on or after the effective date of this Act),
on account of the failure of said employer to pay an employee compensation for any period of overtime work performed prior to July 20, 1949, if
the compensation paid prior to July 20, 1949 for such work was at least
equal to the compensation which would have been payable for such work
had section 7 (d) (6) and (7) and section 7 (g) of the Fair Labor Standards
Act of 1938, as amended, been in effect at the time of such payment.
(/) Public Law 177, Eighty-first Congress, approved July 20, 1949, is
hereby repealed as of the effective date of this Act.
And the Senate agree to the same.
JOHN LESINSKI,
AUGUSTINE B. KELLEY,
ADAM C. POWELL, Jr.,
SAMUEL K. MCCONNELL, Jr.,
WALTER E. BREHM,
Managers on the Part of the House.
ELBERT D. THOMAS,
JAMES E. MURRAY,
CLAUDE PEPPER,
ROBERT A. TAFT,
GEORGE D. AIKEN,
Managers on the Part of the Senate.
STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE
The managers on the part of the House at the conference on the disagreeing votes of the two Houses on the amendment of the Senate to
the bill (H. R. 5856) to provide for the amendment of the Fair Labor
Standards Act of 1938, and for other purposes, submit the following
statement in explanation of the effect of the action agreed upon by the
conferees and recommended in the accompanying conference report:
The Senate amendment struck out all of the House bill after the
enacting clause and inserted a substitute amendment. The conferees
have agreed to a substitute for both the House bill and the Senate
amendment. The substitute agreed to in conference is explained
below.
SHORT TITLE
Both the House bill and the Senate amendment provided that it
was to be cited as the "Fair Labor Standards Amendments of 1949."
The conference agreement adopts this title.
FINDINGS AND DECLARATION OF POLICY
The House bill amended subsection (b) of section 2 of the act by
referring to the power of Congress under the Constitution to regulate
commerce with foreign nations as well as commerce among the several
States. This technical change was made in conjunction with the
change made in subsection (b) of section 3 defining the term "commerce, " which is hereinafter discussed. No such provision was included
in the Senate amendment of the House bill. The conference agreement
adopts the House provision.
DEFINITIONS
Section 3 of the act, relating to definitions, is unchanged by the
conference agreement except that definitions of the terms "commerce,"
"produced," and "oppressive child labor" are amended and new
definitive language is provided for the terms "resale" and "hours
worked."
Commerce.—The definition of "commerce" in section 3 (b) of the act
now covers outgoing foreign commerce "from an3^ State to any place
outside thereof" in addition to interstate commerce "among the several States." It does not cover incoming foreign commerce. The
House bill amended the definition by substituting the word "between"
for the word "from" and the word "and" for the word "to," so that the
definition would cover foreign commerce "between any State and any
place outside thereof." The Senate amendment did not contain any
provision amending this definition. The conference agreement adopts
the House provision. The effect of the amendment is to eliminate
inequalities under the act between employees engaged in foreign commerce based on whether the flow of such foreign commerce is out of a
13
14
FAIR LABOR STANDARDS AMENDMENTS OF 1949
State rather than into it. The amendment, will, for example, place
employees of importers on an equal footing with employees of exporters
under the act.
Produced.—The House bill amended the definition of "produced" in
section 3 (j) by inserting the words "closely related" before the words
"process or occupation" and substituting the word "indispensable" for
the word "necessary". The Senate amendment left the definition of
"produced" as contained in the present law unchanged. The bill as
agreed to in conference follows the House bill except that the words
"directly essential" are substituted for the word "indispensable".
Coverage under the act for a large category of employees is determined by the definition of the term "produced". The definition is
divided into two parts. The first part, which the conference bill leaves
unchanged, covers any employee "producing, manufacturing, mining,
handling, transporting, or in any other manner working on * * *
goods." Thus the first part covers employees engaged in actual production activities as opposed, for example, to employees engaged in
maintenance, clerical, or custodial work. The second part of the
present definition, covering any employee engaged in "any process or
occupation necessary to the production" of goods, has been interpreted
by the Administrator and the courts to cover employees of many local
merchants, because some of the customers of such merchants are producing goods for interstate commerce. It has made no difference that
the merchants sell their goods locally and that such goods do not
become a part or ingredient of the goods produced by any of their customers (McComb v. Deibert (E. D. Pa. 1949), 16 Labor Cases Par.
64,982). The courts have also held the act applicable to employees
engaged in maintaining and repairing private homes and dwellings
where such homes and dwellings are being leased by interstate producers to their employees. Coverage of the act has also been extended
to employees of an independently owned and operated restaurant
located in a factory (McComb v. Factory Stores, 81 F. Supp. 403
(N. D. Ohio 1948)).
Under the bill as agreed to in conference an employee will not be
covered unless he is shown to have a closer and a more direct relationship to the producing, manufacturing, etc., activity than was true
in the above-cited cases. On the other hand, the proposed changes
are not intended to remove from the act maintenance, custodial, and
clerical employees of manufacturers, mining companies, and other
producers of goods for commerce. Employees engaged in such maintenance, custodial, and clerical work will remain subject to the act,
notwithstanding they are employed by an independent employer performing such work on behalf of the manufacturer, mining company,
or other producer for commerce. All such employees perform activities that are closely related and directly essential to the production of
goods for commerce.
The bill as agreed to in conference also does not affect the coverage
under the act of employees who repair or maintain buildings in which
goods are produced for commerce (Kirschbaum v. Walling, 316 U. S.
517) or who make, repair, or maintain machinery or tools and dies
used in the production of goods for commerce. Likewise, employees
of public utilities, furnishing gas, electricity or water to firms within
the State engaged in manufacturing, producing, or mining goods for
commerce, will remain subject to the act. All the employees men-
FAIR LABOR STANDARDS AMENDMENTS OF 1949
15
tioned in this paragraph are doing work that is closely related and
directly essential to the production of goods for commerce.
The following are some examples of cases in which the Administrator
and the courts will no longer be able to hold the act applicable because
the activities involved in such cases are not closely related or directly
essential to production:
1. A local fertilizer company engaged in selling all of its fertilizer to local farmers within the State for use on land on which
sugarcane is grown, which cane is then sold to sugar mills within
the State and processed into raw sugar which is sent out of the
State (McComb, Administrator v. Super-A Fertilizer Works, 165
F. (2d) 824 (C. C. A. 1)).
2. Employees of a quarry engaged in mining and processing
stone for local use in the construction of a dike located in the
same State and who transport such rock from the quarry to the
construction site, where the construction of the dike would have
the effect of preventing an oil field that produced oil for commerce
from being flooded (Schroeder v. Clifton, 153 F. (2d) 385 (C. C. A.
10); cert, den., 328 U. S. 858).
3. Employees of a local window-cleaning company doing
business wholly within the State but many of whose customers
are engaged in interstate commerce or in the production of goods
for interstate commerce (Martino v. Michigan Window Cleaning
Company, 327 U. S. 173; reh'g den., 327 XL S. 816).
4. Employees of a local independent nursery concern whose
duties include mowing the lawn around the plant of a customer
within the State engaged in producing goods for interstate commerce (1944-45 W. H. Man., p. 125).
5. Employees of a local architectural firm whose activities
include the preparation of plans for the alteration of buildings
within the State which are used to produce goods for interstate
commerce (1944-45 W. H. Man., pp. 138-139).
6. Employees of a local exterminator service firm, who work
wholly within the State exterminating roaches and other pests
in private houses, apartments, hotels, barber shops, colleges,
hospitals, and also in buildings within the State used to produce
goods for interstate commerce (3 C. C 13.., Labor Law Reporter,
4th ed., No. 25,150.385).
All such employees, as well as the employees of the merchant
selling his goods locally and employees engaged in providing
residential, eating, or other living facilities for factory workers, are
quite clearly not performing any activities that are closely related or
directly essential to the production of goods.
Oppressive child labor.—Under the bill as agreed to in conference,
the definition of "oppressive child labor77 in section 3 (1) of the act is
amended to include parental employment of a child under 16 years of
age in an occupation found by the Secretary of Labor to be hazardous
for children between the ages of 16 and 18 years. This provision was
contained in substantially the same form in both the House bill and
the Senate amendment, except that the House bill substituted the
Administrator of the Wage and Hour Division for the Secretary of
Labor, who is responsible under the present law for administration of
the child-labor provisions. The conference agreement adopts the
language of the Senate amendment. This provision closes a loophole
16
FAIR LABOR STANDARDS AMENDMENTS OF 19 49
in the present definition under which a parent or person standing in
place of a parent, who may not employ his child in a hazardous occupation if between 16 and 18 years of age, is permitted to employ the
child in such an occupation until he becomes 16 years of age.
Resale.—The House bill in section 3 (1) declared that "resale" shall
not include the sale of goods to be used in residential or farm building
construction, repair, or maintenance. The Senate amendment added
a proviso that the sale must be recognized as a bona fide retail sale in
the industry. The conference agreement adopted the Senate amendment. Under the conference agreement a sale of building materials
to a building contractor for use in residential or farm construction is
not intended as a sale for resale within the meaning of section 13 (a) (2)
provided that it is recognized as a bona fide retail sale in the industry.
Hours worked.—The House bill in section 3 (o) added a partial definition of the term "hours worked." The Senate amendment did not
contain an amendment on this subject. The conference agreement
adopts the House provisions with an amendment. Under the section
as passed by the House, for the purposes of the minimum wage and
maximum hours provisions of the act, there would be excluded from
"hours worked" any time spent by the employee which was excluded
from measured working time under a bona fide collective-bargaining
agreement applicable to him or custom or practice thereunder. The
conference agreement limits this exclusion to time spent by the
employee in changing clothes and cleaning his person at the beginning
or at the end of each workday.
ADMINISTRATOR
The House bill amended section 4 of the act by changing its title
to read "Administration" instead of "Administrator", by increasing
the salary of the Administrator of the Wage and Hour Division to
$15,000 per annum and by adding a new subsection (e) providing a
defense to any alleged violation of the act with respect to "any act
done or omitted in good faith in conformity with any written regulation, order or interpretation of the Administrator or the Secretary of
Agriculture, as the case may be," notwithstanding the subsequent
amendment, rescission or invalidation of such regulation, order or
interpretation. Section 4 was not otherwise changed. The Senate
amendment made no changes in section 4 of the act.
The conference agreement follows the provisions of the Senate
amendment with respect to the act's administration, except that the
salary of the Administrator is fixed at $15,000 per annum.
The conference agreement omits the provision for a "good faith"
defense since its subject matter is covered in sections 9 and 10 of the
Portal-to-Portal Act of 1947.
The present act does not contain any provision relative to the compensation of the Solicitor of Labor, and neither the House bill nor the
Senate amendment contained such a provision. In agreeing to the
amendment increasing the salary of the Administrator to $15,000
annually, it was the unanimous agreement of the conferees that the
salary of the Solicitor of Labor should be increased to a like figure.
It is through the Solicitor and his staff that the Administrator brings
actions under section 17 of the act and will bring the actions for recovery of unpaid minimum wages and unpaid overtime compensa-
FAIR LABOR STANDARDS AMENDMENTS OF 1949
17
tion which are authorized by the new section 16 (c) contained in the
conference agreement. The conference agreement omits a provision
equalizing the salary of the Solicitor of Labor with that of the Administrator only because of a parliamentary situation which the committee has been advised might subject the conference agreement to a
point of order if such a provision were included. It is the unanimous
opinion of the committee of conference that the duties of the Solicitor
of Labor are of such a nature that his position should receive the
highest possible rate of compensation under the new legislation revising the Classification Act ^H. R. 5931).
INDUSTRY COMMITTEES FOR PUERTO RICO AND THE VIRGIN ISLANDS
The House bill amended section 5 of the act by limiting its application to the appointment of special industry committees to recommend
the minimum rate or rates of wages to be paid under section 6 of the
act to employees in Puerto Rico or the Virgin Islands engaged in
commerce or in the production of goods for commerce. The Senate
bill made no changes in section 5 of the act.
The conference agreement follows the provisions of the House bill.
In order to preserve existing orders of the Administrator restricting
industrial homework in certain industries, the conference agreement
provides that a new subsection is added to section 11 of the act under
which all existing regulations or orders of the Administrator relating
to industrial homework are continued in full force and effect, and the
Administrator is authorized to issue such regulations and orders
regulating, restricting, or prohibiting industrial homework as are
necessary to prevent the circumvention or evasion of, and to safeguard,
the minimum wage rate prescribed by the act.
MINIMUM WAGE
The House bill provided that every employer would be required to
pay to each of his employees who is engaged in commerce or in the production of goods for commerce wages at a rate of not less than 75
cents per hour. The Senate amendment made almost identical
changes in subsection (a) of section 6. The conference agreement
adopts the provisions of the Senate amendment.
The House bill also made the following changes in subsection (c)
of section 6: The minimum wage rates established by existing wage
orders for employees in Puerto Rican and Virgin Islands industries
were continued in effect unless and until superseded by a wage order
issued pursuant to the recommendations of a special industry committee appointed pursuant to section 5; and the rates prescribed in
any such order were made applicable to every employee in any
Puerto Rican or Virgin Islands industry covered by such order who
is within the coverage of and not exempt under the provisions of the
act as amended by the House bill, including employees who either
were not covered by the law as it existed prior to such amendment or
were exempted from its application, but who were brought within
the application of the law by the House bill. The Senate amendment
provided that existing wage order rates for employees in Puerto Rico
and the Virgin Islands should continue in effect until superseded by
a wage order issued pursuant to the recommendations of a special
H. Kept. 1453, 81-1
3
18
FAIR LABOR STANDARDS AMENDMENTS OF 194 9
industry committee appointed pursuant to section 5. The conference agreement follows the provisions of the House bill with respect
to the scope and effect of existing wage orders for employees in
Puerto Eican and the Virgin Islands industries.
MAXIMUM
HOURS
General explanation.—The House bill completely revised section 7
of the act relating to maximum hours and overtime compensation,
including a definition of "regular rate" and other provisions affecting
the application of the overtime compensation requirements of the act.
The Senate amendment left section 7 unchanged except for the extension of the overtime exemption provided by subsection (c) to include
the first processing of buttermilk into dairy products, a provision also
contained in the House bill. The conference agreement follows the
provisions of the House bill except as hereafter noted. The general
requirement of the present act, that employment in excess of 40 hours
in a workweek shall be compensated at a rate not less than 1% times
the regular rate at which the employee is employed, is retained. This
requirement applies, as under the present act, to employees engaged in
commerce or in the production of goods for commerce, except those
specifically exempted. Obsolete provisions of the present section 7
and the provision relating to the effective date of the maximum hours
provisions of the 1938 act are deleted.
Semiannual and annual employment agreements.-—Under the House
bill section 7 (b) (1) of the act, providing a partial exemption from the
overtime pay requirement of section 7 (a) for employees employed
under collective-bargaining agreements limiting employment to 1,000
hours in any period of 26 consecutive weeks, was amended by inserting
"one thousand and forty hours" in lieu of "one thousand hours."
This would permit employment under such agreements for an average
workweek of 40 hours during any 26-week period. The conference
agreement adopts the House provision.
The House bill modified the provisions of section 7 (b) (2) of the
act, relating to guaranteed annual employment plans established by
bona fide collective bargaining, to provide for greater flexibility. The
annual employment guaranteed could be either 2,080 hours (the
present figure) or a lesser figure down to a minimum either of 1,840
hours or of 46 normal workweeks of not less than 30 hours per week.
The exemption from overtime pay for hours worked up to 12 a day or
56 a week would not, as at present, be lost for the entire year with
respect to an employee who must be worked at the end of the year
for a few hours beyond the present 2,080-hour limit. The House bill
permitted employment in excess of the annual period guaranteed, up
to a maximum of 2,240 hours, if not less than time and one-half the
regular rate is paid for all hours worked in excess of the guaranteed
period which are also in excess of 40 in the workweek or in excess of
2,080 hours in the contract year. The conference agreement adopts
the provisions of the House bill.
Fourteen workweek hours exemption jor first processing and canning
offish.—The House bill added to section 7 (b) (3) of the act a partial
exemption from the overtime pay requirements for employees in
industries engaged in the first processing or canning of fish in the raw
or natural state. This provision was added in lieu of the complete
FAIR LABOR STANDARDS AMENDMENTS OF 1949
19
wage and hour exemption provided in section 13 (a) (5), which is
discussed below. The conference agreement substitutes for the
House provision a new overtime exemption for canning of fish in
section 13 (b) discussed below.
Section 7 (c) hours exemptions for processing of farm
products.—The
conference agreement leaves unchanged the hours exemptions provided
by section 7 (c) of the act, except for adding buttermilk to the commodities listed in the hours exemption provided for the first processing
of milk, cream, skimmed milk or whey into dairy products. Such a
provision was contained in both the House bill and the Senate amendment. The seasonal exemption for the first processing of agricultural
or horticultural commodities within the "area of production" was
changed in the House bill by transferring the authority to define
"area of production" from the Administrator to the Secretary of
Agriculture. The Senate amendment did not make this change.
The conference agreement leaves this authority in the Administrator.
"Regular rate" and crediting of overtime pay.—The
House bill added
a new subsection (d) to section 7 of the act containing a comprehensive
statutory definition of "regular rate," and a new subsection (g) specifying the payments excluded from "regular rate" which may be credited
toward the overtime compensation required by the act. The Senate
amendment contained no such provisions. The conference agreement
(sec. 7 (d)) adopts the House provisions defining "regular rate" except
for revisions of paragraph (3) of subsection (d) indicated below. The
conference agreement adopts the crediting provision contained in subsection (g) of the House bill.
The House bill defined "regular rate" as all remuneration for employment except certain specified types of payments. The conference
agreement adopts this approach. Each of the seven subdivisions of
subsection (d) is intended to provide a separate, carefully defined exclusion from "regulai rate." Accordingly, a payment excluded under
any one subdivision would not be deemed part of the "regular rate"
by reason of the fact that such payment may not be excluded by the
language of any other subdivision. The classes of payments excluded
under the first four subdivisions are not creditable toward overtime
payments required by section 7 of the act.
Payments excluded from "regular rate" and not creditable as overtime
pay—Section 7 (d) (1), (2).—The conference agreement adopts the
language of the House provisions excluding from the "regular rate"
(1) bona fide gifts and payments in the nature of gifts made at Christmas time or on other special occasions under specified conditions, and
(2) payments which are not made as compensation for hours of employment, including payments for occasional periods when no work is
performed due to vacation, holiday, illness, or failure of the employer
to provide sufficient work, and including payments as reimbursement
for traveling or other expenses under certain conditions.
Section 7 (d) (3).—Clause (a) of this subsection of the House bill
provided for the exclusion from the "regular rate" of certain sums paid
at the sole discretion of the employer in recognition of services performed during a given period of time, and not paid pursuant to a prior
contract, agreement, or promise causing the employee to expect such
payments regularly. The conference agreement adopts the House
provision.
20
FAIR LABOR STANDARDS AMENDMENTS OF 194 9
The House bill, in clauses (b) and (c) of this subsection, provided
for the exclusion from the "regular rate'7 of certain payments made
pursuant to bona fide profit-sharing plans or trusts and of "talent fees"
paid to radio and television performers. The conference agreement
makes these exclusions, retaining the numbering of the House bill,
but adding language giving the Administrator authority to issue
appropriate regulations defining the bona fide profit-sharing plans or
trusts pursuant to which payments may be made to employees without
increasing the "regular rate," and defining "talent fees." Under the
conference agreement, similar provision is made in clause (b) for
regulations permitting the exclusion from the "regular rate" of payments made by employers pursuant to bona fide thrift or savings
plans. Such plans were not expressly mentioned in the House
provision.
Section 7 (d) (4-)-—The conference agreement adopts the language
of the House provision excluding from the "regular rate" 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 benefits.
Payments excluded from "regular rate" and creditable as overtime
premiums—Section 7 (d) (5), (6), (7); section 7 (/).—Under the House
bill (section 7 (d) (5)), overtime premiums paid for hours worked in
any day or workweek because such hours are in excess of 8 in a day
or 40 in a workweek or in excess of the employee's normal working
hours or regular working hours, as the case may be, were expressly
excluded from the employee's regular rate of pay. Section 7 (g) of
the House bill provided for the crediting of such premiums toward
statutory overtime compensation due for work in excess of 40 hours.
In addition, section 7 (d) (6), (7), and 7 (g) of the House bill continued
in effect the provisions of section 7 (e) of the present act (added by
act of July 20, 1949, Public Law 177, 81st Cong., 1st sess.). These
provisions, which constituted a partial definition of "regular rate" in
Public Law 177, are repeated here solely because section 7 (d) is
intended to constitute a more comprehensive definition of "regular
rate." Although by reason of their textual relation to other provisions of the bill, sections 7 (d) (6) and 7 (d) (7) differ slightly in wording from Public Law 177, they are intended to solve the identical
problems which Public Law 177 was intended to solve, and the discussion and specific examples set forth in House Report No. 121 and
Senate Report No. 402, accompanying H. R. 858, are applicable to
sections 7 (d) (6) and 7 (d) (7). The provision of the House bill
corresponding to section 7 (e) (1) of the present amended act expressly
placed premium pay for work on "regular days of rest" in the same
category under that provision as premium pay for work on Saturdays,
Sundays, holidays, and sixth or seventh days of the workweek.
"Regular days of rest" are not mentioned expressly in the present
section 7 (e) (1). The conference agreement adopts the language of
the House provision.
As explained later in this statement under the heading "Retroactive
provisions," the provisions of section 7 (e) of the present act, as retained in section 7 (d) (6), (7), and 7 (g) of the conference agreement,
will continue to have retroactive effect as provided in section 16 (e)
of the conference agreement which replaces section 2 of the act of
July 20, 1949 (Public Law 177, 81st Cong., 1st sess.).
FAIR LABOR STANDARDS AMENDMENTS OF 1 949
21
Contract pay plans.—The House bill (sec. 7 (e)) contained a provision
specifically providing that no employer should be deemed to have
violated the overtime provisions of the act by employing any employee
for a workweek in excess of 40 hours if such employee was employed
pursuant to either a bona fide individual contract, or a collectivebargaining agreement, if the duties of such employee necessitated
irregular hours of work, and the contract or agreement (1) specified
a regular rate of pay of not less than the minimum hourly rate provided in the act, and compensation at not less than one and one-half
times such rate for all hours worked in excess of 40 in any workweek
and (2) provided a weekly guaranty of pay for not more than 60 hours
based on the rates so specified. The conference agreement adopts
the House provision.
Overtime pay based on rate not obtained by averaging
straight-time
earnings for workweek.—The House bill (sec. 7 (f)) permitted overtime payments for hours worked in excess of 40 in a workweek to be
made, under specific conditions, at time and one-half the bona fide
hourly or piece rates applicable to the work performed during such
overtime hours. Under this provision, employers and employees could
agree, in advance of the performance of work and subject to specified
conditions, to calculate overtime pay for such work by increasing the
applicable hourly or piece rate for a given kind of work by 50 percent
during the hours worked after 40 in the workweek, rather than by paying time and one-half based on average hourly straight-time earnings
for the workweek. The Senate amendment contained no such provision. The conference agreement adopts the House provision, with
two modifications. The first modification makes it possible for such
an employment agreement to meet the requirements of this subsection whenever overtime pay is so calculated for the total number of
hours worked by the employee in such workweek in excess of 40 hours,
even though some of the hours for which overtime pay is received fall
before the fortieth hour. This makes it unnecessary to recompute
the amount due under the statute at the end of the workweek where
it is clear that overtime pay as permitted under this subsection has
been paid for a number of hours of work equivalent to the number
worked after 40. The second modification is the addition to the
House provision of a new clause (3), permitting the computation of
overtime pay at a rate not less than one and one-half times a basic
rate established by agreement (which may remain constant from
workweek to workweek) if such basic rate is authorized by regulation of the Administrator as being substantially equivalent to the
average hourly earnings of the employee, exclusive of overtime premiums, in the particular work over a representative period of time.
WAGE ORDERS IN PUERTO RICO AND THE VIRGIN ISLANDS
The House bill limited the application of the provisions of section
8 of the act to industries in Puerto Ttico and the Virgin Islands engaged
in commerce or in the production of goods for commerce and made
necessary clarifying changes in its subsections to carry out this purpose.
Subsection (a) stated the policy of the act to reach an objective of a
75-cent minimum wage for such industries as rapidly as economically
feasible without substantially curtailing employment. Subsection (b)
specified that the minimum-wage rates which a special industry com-
22
FAIR LABOR STANDARDS AMENDMENTS OF 1949
mittee recommends, and the Administrator approves, were not to
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 or the Virgin Islands. Except for technical changes made
necessary by raising the statutory minimum to 75 cents an hour,
subsections (c) and (d) of section 8, setting forth the standards and
procedures to govern the issuance of wage orders, were to be the same
as under the present act. Subsection (e) of section 8 of the present
act was omitted from the House bill because it served no purpose in
such bill. Subsections (f) and (g) of the present act were retained as
subsections (e) and (f).
The Senate amendment made no changes in section 8 of the act
except to insert the figure "75 cents an hour" for the figure "40 cents
an hour" wherever it was used in its several subsections. The conference agreement adopts in substance the provisions of the House bill.
As is noted elsewhere, the conference agreement provides for adding a new subsection to section 11 under which existing orders of the
Administrator restricting industrial home work in a number of industries, which were originally issued under subsection (f) of section
8 of the present act, are continued in full force and effect.
ATTENDANCE OF WITNESSES
The House bill amended section 9 of the act relating to attendance
of witnesses by making a technical correction therein and by taking
away from the Secretary of Labor subpena powers vested in him by
Reorganization Plan No. 2 of 1946 in connection with administration
and enforcement of the child-labor provisions of the act. The Senate
amendment made no changes in section 9.
The conference agreement follows the Senate amendment in this
respect, leaving unchanged the act's provisions relating to attendance
of witnesses.
COURT REVIEW
The House bill amended section 10 of the act relating to court
review of Puerto Rican and Virgin Islands industry wage orders issued
by the Administrator under section 8 of the act by inserting in subsection (a) thereof the requirement that the Administrator's findings
of fact on which such orders are based must be supported by "a preponderance of the evidence" rather than by "substantial evidence,"
as at present. In addition, the House bill made certain technical corrections in section 10. The Senate amendment made no changes in
section 10. The conference agreement follows the Senate amendment
in this respect and leaves unchanged existing law relating to court
review of industry wage orders.
INVESTIGATIONS, INSPECTIONS, RECORDS, AND HOMEWORK REGULATIONS
The House bill made changes in section 11 which transferred to the
Administrator of the Wage and Hour Division the authority of the
Secretary of Labor to make investigations and inspections under the
child-labor provisions of the act. The Senate amendment made no
changes in section 11. The conference agreement follows the Senate
amendment in this respect and leaves unchanged existing law relating
FAIR LABOR STANDARDS AMENDMENTS OF 1949
23
to administration and enforcement of the child-labor provisions,
including investigations and inspections.
The conference agreement adds to section 11 a new subsection (d)
under which all existing regulations or orders of the Administrator
relating to industrial homework are continued in full force and effect.
The Administrator is authorized to issue such regulations and orders
regulating, restricting, or prohibiting industrial homework as are
necessary to prevent the circumvention or evasion of, and to safeguard, the minimum wage rate prescribed by the act. The effect of
this provision has been explained above in connection with the discussion of the changes made by the conference agreement in sections
5 and 8 of the act. Consistent with the addition of this new subsection, the title of section 11 has been changed by the conference agreement to read "Investigations, inspections, records, and homework
regulations/'
CHILD-LABOR PROVISIONS
The House bill added a proviso to section 12 (a) of the act which
would relieve a purchaser of goods produced in an establishment
where oppressive child labor was employed, if such purchaser could
prove that he was without knowledge of the employment of oppressive
child labor and acted in good faith in reliance on written assurance
from the producer, manufacturer, or dealer that the goods were produced in compliance with the child-labor provisions. The Senate
amendment contained no similar provision. The conference agreement follows the House bill in this respect but adopts language similar
to the Senate amendment of section 15 (a) (1) of the act, discussed
below.
The House bill eliminated the provisions of section 12 (b) of the
act which authorizs the Secretary of Labor, or his authorized representatives, to make investigations and inspections under the childlabor provisions and to institute actions for injunctions under section
17 for violations of the child-labor provisions. The House bill, in
section 11 (a), transferred such authority to the Administrator. The
Senate amendment made no change in the existing law. The conference agreement follows the Senate amendment and makes no change
in existing law in this respect.
The House bill provided a new section 12 (b) which directly prohibited the employment of oppressive child labor in commerce or in
the production of goods for commerce. The Senate amendment
contained identical language as section 12 (c). The conference
agreement includes this language as section 12 (c).
EXEMPTIONS
General statement.—The House bill substantially revised section
13 (a) (2) of the act relating to retail and service establishments,
amended section 13 (a) (5) relating to fisheries and sea-food employees,
section 13 (a) (8) relating to newspapers, section 13 (a) (10) relating
to the processing of agricultural commodities, and added new exemptions affecting employees of taxicab companies, certain telegraph
agencies, forestry, logging, and sawmill operators, nonprofit agricultural irrigation companies, and rural home workers. The House bill
also amended section 13 (a) (4) relating to carriers by air and enlarged
24
FAIR LABOR STANDARDS AMENDMENTS OF 1949
the child-labor exemption contained in section 13 (c). The Senate
amendment also substantially revised section 13 (a) (2), amended
section 13 (a) (11) relating to telephone-switchboard operators, and
added exemptions for certain employees of agricultural irrigation
companies and telegraph agencies, employees engaged in the processing or storing of cotton or the processing of cottonseed, employees
engaged as home workers in sewing baseballs, and outside buyers of
poultry, eggs, cream, and milk. The Senate amendment also exempted
newsboys from the wage, hour, and child-labor provisions, and further
enlarged the child-labor exemption. Each provision of the House
bill and the Senate amendment is discussed below.
Retail and service establishments.—Both the House bill and the
Senate amendment contained an identical amendment providing for
an exemption for retail and service establishments (sec. 13 (a) (2)).
The amendment was continued in the conference agreement.
The amendment (sec. 13 (a) (2)), agreed to in conference clarifies
the existing exemption by defining the term "retail or service establishment" and stating the conditions under which the exemption shall
apply. This clarification is needed in order to obviate the sweeping
ruling of the Administrator and the courts that no sale of goods or
services for business use is retail. See Roland Electrical Co. v. Walling
(326 U. S. 657); McComb v. Diebert ((E. D. Pa. 1949) 16 Labor Cases
Par. 64,982); McComb v. Factory Stores (81 F. Supp. 403 (N. D. Ohio
1948)).
Under paragraph (2) of section 13 (a) as agreed to in conference an
establishment is an exempt retail or service establishment if it meets
three tests:
First, over 50 percent of the establishment's sales by annual dollar
volume of goods or services must be made within the State in which
the establishment is located. The requirement that the greater part
of the selling or servicing be in intrastate commerce found in the
present law is eliminated because of the tendency of the courts to hold
that many sales or services made or performed within a State are not
intrastate sales or services. See Kirschbaum v. Walling (316 U. S.
517, 526); Boutell v. Walling (327 U. S. 463, 467). Under the new
test, if the sales are made within the State in which the establishment
is located, it is immaterial that the sales (a) are made pursuant to prior
orders from customers, (6) contemplate the purchase of goods by the
establishment from outside the State to fill customers' orders, or
(c) are made to customers who are engaged in interstate commerce or
in the production of goods for interstate commerce. In this connection, see Walling v. Jacksonville Paper Co. (317 U. S. 564).
The second test provides that in order for an establishment to be
exempt not less than 75 percent of its annual dollar volume of sales of
goods or services (or of both) must not be for resale. In other words,
at least three-fourths of the goods or services (or both) sold must be to
purchasers who do not buy for the purpose of reselling. Normally,
goods are to be considered as sold for resale even though the purchaser
sells them in an altered form. In section 3 (n) there is a special
definition of the word "resale" which is applicable in the case of
building materials. This has been discussed above.
The third test provides that 75 percent of the establishment's annual
dollar volume of sales of goods or services (or of both) must be recognized in the particular industry as retail sales or services. Under this
FAIR LABOR STANDARDS AMENDMENTS OF 1 9 4 9
25
test any sale or service, regardless of the type of customer, will have to
be treated by the Administrator and courts as a retail sale or service,
so long as such sale or service is recognized in the particular industry as
a retail sale or service. Thus, the sale by a farm implement dealer of
farm machinery to a farmer will be retail if the sale is recognized as
retail in such industry. So, too, sales by the grocery store, the hardware store, the coal dealer, the automobile dealer selling passenger cars
or trucks, the clothing store, the dry goods store, the department
store, the paint store, the furniture store, the drug store, the shoe store,
the stationer, the lumber dealer, etc., whether made to private householders or to business users, will be retail, so long as they are recognized
as retail sales or services in such industries. Likewise, sales or services
of hotels, restaurants, barber and beauty shops, repair garages, filling
stations and the like, whether made or rendered to private householders
or to business customers, will be retail so long as they are recognized as
retail sales or services in such industries.
The location of the establishment, whether in an industrial plant,
an office building, a railroad depot, or a Government park, etc., will
make no difference in the application of the exemption. So long as
the establishment meets the tests described above, it will be excluded
from the minimum wage and overtime provisions of the act.
Up to 25 percent of the establishment's annual dollar volume of
sales of goods or services (or of both) may consist of sales for resale
and sales that are not recognized as retail sales or services in the
particular industry without loss of the exemption.
Paragraph (2) of section 13 (a) of the conference agreement does not
exempt large mail-order houses which make most of their sales to
out-of-State customers. Nor does it exempt warehouses and central
offices of chain-store systems. The employees in such warehouses and
central offices are not employed "by" any single retail or service
establishment in the chain but ratker by the chain itself. Since,
however, the exemption does apply to any employee employed "by"
an exempt retail or service establishment, it is applicable to employees
of an exempt retail or service establishment working in a warehouse
operated by and servicing such establishment exclusively, whether or
not the warehouse operation is conducted in the same building as the
selling or servicing activities. For the same reason, the exemption
applies to collectors, repair and service men, outside salesmen, merchandise buyers, consumer survey and promotion workers, and delivery men
employed by an exempt retail or service establishment, although they
do most of their work away from the establishment. The exemption,
however, does not apply to any manufacturing activities since any
such activities, when conducted by a retail establishment, if exempt,
are intended to be exempt under section 13 (a) (4) discussed below.
This does not mean, however, that an exempt retail or service establishment will lose its exemption under section 13 (a) (2) if it engages
in some incidental work in the nature of processing in connection with
its sales and services, e. g., a grocery may grind coffee; a drug store
may prepare prescriptions; a restaurant may process food; a clothing
store may make alterations in suits; or a repair garage may grind
valves.
The amendment does not exempt banks, insurance companies,
building and loan associations, credit companies, newspapers, telephone companies, gas and electric utility companies, telegraph com-
26
FAIR LABOR STANDARDS AMENDMENTS OF 1949
panies, etc., because there is no concept of retail selling or servicing in
these industries. Where it was intended that such businesses have an
exemption one was specifically provided by the law (sec. 13 (a) (8)
(exemption for small newspapers), sec. 13 (a) (11) (exemption for
switchboard operators of small telephone exchanges)). The amendment also does not exempt an establishment engaged in the sale and
servicing of manufacturing machinery and manufacturing equipment
used in the production of goods, because the sale and servicing of such
equipment have never been recognized as retail selling or servicing in
the industry which distributes or services that type of equipment.
Laundries.—Both the House bill and the Senate amendment
contained an identical amendment exempting certain laundries,
section 13 (a) (3). The amendment is continued in the conference
agreement.
Paragraph (3) of section 13 (a) of the conference agreement grants
a specific exemption to laundries and establishments engaged in
laundering, cleaning, or repairing clothing or fabrics. This exemption
contains two limitations. First, over 50 percent of the establishment's
annual dollar volume must be derived from the sales of such services
within the State in which it is located. Second, 75 percent of such
volume must be derived from the sales of such services to customers
who are not engaged in a mining, manufacturing, transportation, or
communications business.
The first limitation means that the laundry or cleaning establishment must be primarily engaged in serving customers within its
State. If it is primarily engaged in serving customers outside the
State of its location, it will not be exempt.
Under the second limitation, no laundry or cleaning establishment
will be exempt if more than 25 percent of its business is with such
customers as factories, mines, railroad companies, or bus companies.
Thus, laundries whose customers consist principally of interstate business, such as a laundry furnishing linens to Pullman trains, will not be
exempt. So also, industrial laundries or linen supply companies,
more than 25 percent of whose sales of services are to mining, manufacturing, transportation, or communications business organizations,
will be unable to qualify for the exemption and will, as at present,
remain subject to the act.
On the other hand, the laundry or dry cleaner will be exempt if it
meets the two limitations discussed above, whether it launders towels
or other linen for barber or beauty shops, doctors' or dentists' offices,
or schools, hospitals, restaurants, or hotels, or for the housewife.
Retail establishments making or 'processing goods.—The House bill
contained an exemption from the wage and hour provisions of the act
for any employee employed by an establishment which qualifies as a
retail establishment under section 13 (a) (2) and is recognized as a
retail establishment in the particular industry notwithstanding that
such establishment makes or processes the goods that it sells. The
Senate amendment added a proviso to such exemption to the effect
that more than 85 percent of the establishment's annual dollar volume
of sales of goods or services must be made within the State in which
the establishment is located. The bill as agreed to in conference (sec.
13 (a) (4)) adopts the House bill as amended by the Senate amendment with three changes. First, it is made clear that the establishment must qualify as an "exempt" retail establishment under section
FAIR LABOR STANDARDS AMENDMENTS OF 1949
27
13 (a) (2). Second, the reference to "services" contained in the Senate
amendment is stricken and in lieu thereof there are substituted the
words "so made or processed". Third, the goods which the exempt
establishment makes or processes must be made or processed at the
establishment which sells the goods. An establishment will be exempt
under this provision of the conference bill if it meets the following
six tests:
1. Over 50 percent of its annual dollar volume of sales of goods
must be made within the State in which the establishment is
located.
2. Seventy-five percent of its annual dollar volume of sales of
goods must not be for resale.
3. Seventy-five percent of its annual dollar volume of sales of
goods must be recognized as retail sales in its industry.
4. The establishment must be recognized as a retail establishment in its industry.
5. More than 85 percent of the establishment's annual dollar
volume of sales of goods which it makes or processes must be
made within the State in which the establishment is located.
6. The goods which the exempt establishment makes or processes must be made or processed at the establishment which
sells the goods. This test will be met despite the fact that there
is a physical dividing line between the manufacturing portion of
an establishment and the selling portion such as a partition, wall,
etc. For example, a bakery will meet the test even though it
bakes its bread and pastries in a back room and sells same in
a front room of its establishment.
This exemption will apply typically to bakery establishments which
bake the breads and pastries which they sell, ice plants which manufacture the ice they sell, and ice cream parlors or candy kitchens
which make their own ice cream or candy.
As in the case of the exemption provided by section 13 (a) (2) the
exemption here applies to any employee employed "by" rather than
"in" the establishment. Consequently, the following types of employees of an establishment which meets the tests set forth above
will also be exempt, even though they may do most of their work
outside the establishment: bill collectors, outside repair and service
men, outside salesmen, merchandise buyers, consumer survey and
promotion workers and delivery men.
Fish canning.—The House bill contained a 14-workweek exemption
from the overtime provisions of section 7 of the act for any industry
engaged in the first processing or canning of fish in the raw or natural
state. The Senate amendment had no comparable provision. The
House bill continued the exemption contained in existing law with
respect to fish, shellfish, etc., with the exception that the processing
and canning of the products and byproducts specified in the exemption
would not have applied to fish. The Senate amendment continued
the exemption contained in existing law. The conference agreement
(a) strikes out the 14-workweek exemption contained in the House
bill; (b) continues the exemption contained in section 13 (a) (5) of the
present law with the exception of canning; and (c) transfers the canning exemption from section 13 (a) of the act to section 13 (b), which
has the effect of exempting the canning of any kind of fish, shellfish,
or other aquatic forms of animal or vegetable life, or any byproduct
28
FAIR LABOR STANDARDS AMENDMENTS OF 194 9
thereof, from the overtime provisions of the act but not from the
minimum wage requirements. Under the conference agreement
"canning" means hermetically sealing and sterilizing or pasteurizing
and has reference to a process involving the performance of such
operations. It also means other operations performed in connection
therewith such as necessary preparatory operations performed on the
products before they are placed in bottles, cans, or other containers
to be hermetically sealed, as well as the actual placing of the commodities in such containers. Also included are subsequent operations such as the labeling of the cans or other containers and the
placing of the sealed containers in cases or boxes whether such subsequent operations are performed as a part of an uninterrupted or interrupted process. It does not include the placing of such products or
byproducts thereof in cans or other containers that are not hermetically
sealed as such an operation is " processing" as distinguished from
"canning" and comes within the complete exemption contained in
section 13 (a).
Irrigation workers.—The House bill added a new wage-and-hour
exemption as section 13 (a) (16) which applied to any employee employed in connection with the operation or maintenance of ditches,
canals, reservoirs, or waterways, not owned or operated for profit,
which are used exclusively for supply and storing of water for agricultural purposes. The Senate amendment provided an identical
exemption as an additional clause in section 13 (a) (6) with the exception that language was added permitting the employer to operate on
a share-crop basis. The conference agreement follows the Senate
amendment and includes the exemption in section 13 (a) (6).
Small newspapers.—The House bill amended section 13 (a) (8) of
the act relating to weekly and semiweekly newspapers by increasing
the permitted circulation of an exempt newspaper from 3,000 to 5,000,
by extending the exemption to dailies and by permitting the major
part of the circulation to be not only within the county where printed
and published, but also within counties contiguous thereto, whether
or not within the same State. The exemption was renumbered section
13 (a) (9). The Senate amendment made no charige in existing law.
The conference agreement follows the House bill but reduces the
circulation from 5,000 to 4,000 and retains the numbering of the
present section 13 (a) (8).
" Area of production."—The House bill amended section 13 (a) (10)
of the act by transferring the authority to define "area of production"
from the Administrator to the Secretary of Agriculture. The exemption was renumbered section 13 (a) (11). The Senate amendment
made no change in existing law. The conference agreement follows
the Senate amendment in this respect and leaves the present law
unchanged, and retains the numbering of the present section 13 (a)
(10).
Small telephone exchanges.—The House bill made no change in existing law with respect to the wage-and-hour exemption provided by section 13 (a) (11) of the act for switchboard operators employed in public
telephone exchanges which have less than 500 stations, but renumbered
this exemption as section 13 (a) (12). The Senate amendment increased the number of stations to not more than 750. The conference
agreement adopts the Senate provision, and retains the numbering of
the present section 13 (a) (11).
FAIR LABOR STANDARDS AMENDMENTS OF 1949^
29
Taxicabs.—The House bill added a new section 13 (a) (13) to the
act which provided a wage-and-hour exemption for any employee of
an employer engaged in the business of operating taxicabs. The
Senate amendment made no change in existing law in this respect.
The conference agreement follows the House bill but renumbers the
exemption as section 13 (a) (12).
Contract telegraph agencies.—The House bill added a new wage-andhour exemption as section 13 (a) (14) of the act for any employee or
proprietor in a retail or service establishment as defined in the amended
section 13 (a) (2) with respect to whom the wage-and-hour provisions
would not otherwise apply, who is engaged in handling telegraph messages for the public under an agency or contract arrangement with a
telegraph company if the telegraph message revenue of the agency
does not exceed $500 a month. The Senate amendment added substantially the same exemption as section 13 (a) (12) of the act. The
conference agreement adopts the House provision but renumbers the
exemption as section 13 (a) (13).
Logging and sawmilling.—The House bill added a wage-and-hour
exemption as section 13 (a) (15) of the act which applied to any
employee employed in planting or tending trees, cruising, surveying,
or felling timber, or in preparing, processing, transporting, or sawing
logs or other forestry products in and about a sawmill if the number
of employees employed by the employer in forestry or lumbering
operations does not exceed 12. The Senate amendment made no
change in existing law in this respect. The conference agreement
adopts the House provision but excludes from the exemption sawmill
and other operations in connection with processing of logs or other
forestry products. The exemption covers the woods operations and
extends through the preparing and transporting of logs or other
forestry products to the mill, processing plant, railroad, or other
transportation terminal. To be exempt, an employee must be employed by an employer who has not more than 12 employees in
forestry or logging operations.
Cotton and cottonseed.—The Senate amendment added a new wageand-hour exemption as section 13 (a) (13) of the act which applied to
employees of any employer engaged in ginning, storing, or compressing
of cotton or in the processing of cottonseed, with the proviso that such
employees must be employed in, about, or in connection with such
operations which are conducted in any county in which cotton is produced as shown in the most recent annual cotton-production report of
the Bureau of the Census. The House bill contained no such provision. The conference agreement follows the House bill and makes no
change in existing law in this respect.
Rural home workers.—The House bill added a new wage-and-hour
exemption as section 13 (a) (17) of the act which applied to any home
worker in a rural area who is not subject to any supervision or control
by any person whomsoever, and who buys raw material and makes
and completes any article and sells the same to any person, even
though the article is made according to specifications and the requirements of a single purchaser. The Senate amendment contained no
such exemption. The conference agreement follows the Senate amendment in this respect.
Home work on baseballs.—The House bill contained no specific
exemption for home workers employed in sewing baseballs and soft-
30
FAIR LABOR STANDARDS AMENDMENTS OF 1949
balls. The Senate amendment contained such an exemption. The
conference agreement follows the House bill in this respect.
Air carriers.—The House bill eliminated the minimum-wage
exemption now provided in the act for emj employee of a carrier by air
subject to the provisions of title II of the Railway Labor Act, but
continued 1he maximum-hour exemption as section 13 (b) (3) of the
act. The Senate amendment made no change in existing law in this
respect. The conference agreement adopts the House provision.
Outside buyers of poultry and dairy products.—The House bill made
no change in existing law with respect to outside buyers of poultry or
dairy products. The Senate amendment added a maximum hour
exemption as section 13 (f) of the act, which applied to any individual
employed as an outside buyer of poultry, eggs, cream, or milk in their
raw or natural state. The conference agreement follows the Senate
amendment but numbers the exemption as section 13 (b) (5).
Child-labor.—Section 13 (c) of the existing law makes the childlabor provisions inapplicable with respect to employees employed
in agriculture while not legally required to attend school as well as with
respect to any child employed as an actor in motion pictures or theatrical productions. The House bill made no change in existing law in the
provision relating to agriculture but broadened the exemption for
actors by extending it to performers and by adding the words "or in
radio or television productions" after the words "motion pictures or
theatrical productions." The Senate amendment changed the child
labor agriculture exemption by substituting for the words "while not
legally required to attend school" the language "outside of school
hours for the school district where such employee is living while he is
so employed." The Senate amendment was identical with the House
bill with respect to the child-labor exemption relating to actors and
performers in motion pictures or theatrical productions, or in radio or
television productions. The conference agreement adopts the Senate
amendment with respect to the child labor agriculture exemption and
adopts the provisions contained in both the House bill and the Senate
amendment which broadens the child-labor exemption applicable to
motion pictures and theatrical productions, and radio or television
productions.
Newspaper carrier boys.—The House bill provided no special exemption for newsboys. The Senate amendment added an exemption as
section 13 (e) of the act which provided a complete minimum-wage,
maximum-hour, and child-labor exemption with respect to any employee engaged in the delivery of newspapers to the consumer. The
conference agreement adopts the Senate provision but renumbers the
exemption as section 13 (d).
LEARNERS, APPRENTICES, AND HANDICAPPED WORKERS
Clause (1) of section 14 of the present act permits the employment
"of messengers employed exclusively in delivering letters and messages" at subminimum rates, under regulations or orders of the Administrator as prescribed in section 14. The House bill made no
change in existing law. The Senate amendment substituted for the
above-quoted language the words "and of minor messengers under
18 years of age employed primarily in delivering letters and messages."
The conference agreement follows the House bill but adopts that pro-
FAIR LABOR STANDARDS AMENDMENTS OF 1949
31
vision of the Senate amendment which substituted the word "primarily" for "exclusively" in the existing provision.
PROHIBITED ACTS
Both the House bill and the Senate amendment added language to
section 15 (a) (1) designed to make it lawful for a purchaser in good
faith of goods produced in violation of the act to sell such goods in
commerce. The conference agreement (sec. 13 (a)) inserts in section
15 (a) (1) a proviso containing the language of the Senate amendment.
This provision protects an innocent purchaser from an unwitting
violation and also protects him from having goods which he has
purchased in good faith ordered to be withheld from shipment in
commerce by a "hot goods" injunction. An affirmative duty is
imposed upon him to assure himself that the goods in question were
produced in compliance with the act, and he must have secured
written assurance to that effect from the producer of the goods.
The requirement that he must have made the purchase in good faith
is comparable to similar requirements imposed on purchasers in other
fields of law, and is to be subjected to the test of what a reasonable,
prudent man, acting with due diligence, would have done in the
circumstances.
The conference agreement also provides in section 13 (b) that
regulations or orders of the Administrator under the provisions of
the new section 11 (d), dealing with industrial homework, may be
enforced in the same manner as the Administrator's record-keeping
regulations (sec. 15 (a) (5)).
PENALTIES
Both the House bill and the Senate amendment added a new subsection (c) to section 16 authorizing the Administrator to supervise
the payment of unpaid minimum wages or overtime compensation
due under the act, and providing that agreement by any employee
to accept such payment should, upon payment in full, constitute a
waiver of his rights under section 16 (b). The Senate amendment,
in addition, authorized the Administrator, at the request or with the
consent of the employee, to sue for any back wages due, and provided
that the Administrator might join in one cause of action the claims
of any employees similarly situated who consented thereto. The
Senate amendment also provided that the consent of any employee
to the bringing of any such action constituted a waiver of his rights
under section 16 (b), unless the action be dismissed without prejudice
on motion of the Administrator. The Senate amendment also provided that nothing in the subsection should affect the equitable
jurisdiction of the courts under section 17. The Senate amendment
also made the Portal-to-Portal Act 2-year statute of limitations
applicable to such actions brought by the Administrator. The conference agreement adopts the Senate amendment in revised form.
The conference agreement omits from section 16 (c) in the Senate
amendment the provision that the Administrator may sue for wages
due at the request or with the consent of the employee making the
claim. In its place the conference agreement substitutes a requirement that the Administrator can sue for such unpaid minimum wages
32
FAIR LABOR STANDARDS AMENDMENTS OF 194 9
or unpaid overtime compensation only on the written request of the
employee. The conference agreement adds a proviso to prevent the
Administrator from using the authority granted in this section to
bring test cases involving new or novel questions of law. The Administrator may use his authority under this section to bring a suit
for an employee only in cases where the law has been settled finally
by the courts. The proviso is not intended, however, to preclude the
Administrator from instituting suits or the court from taking jurisdiction on the basis of existing legal precedents under the Fair Labor
Standards Act of 1938 as amended, except to the extent that they are
changed by the amendments made by the conference agreement.
While the conference agreement omits the provision that the Administrator could join in one cause of action the claims of any employees
similarly situated who consented thereto, it is the intention of the
conferees under the conference agreement that the Rules of Civil
Procedure of the district courts of the United States relating to joinder
of parties will apply to actions brought by the Administrator under
section 16 (c) as such rules would be applicable in any other civil
actions brought in the district courts of the United States. In like
manner, the rules as to joinder of parties applicable to civil actions in
the courts of the several States and Territories will apply to actions
brought by the Administrator in the courts of such States and Territories under section 16 (c).
INJUNCTION PROCEEDINGS
The House bill adopted the language of section 17 of the act without
change. The Senate amendment altered this section to include a
more precise description of the United States courts having jurisdiction
of actions to restrain violations. The legal effect of both versions
was the same. The conference agreement adopts the Senate version
with a proviso to the effect that no court shall have jurisdiction, in any
action brought by the Administrator to restrain violations of section.
15, to order payment to employees of unpaid minimum wages or unpaid overtime compensation or an additional equal amount as liquidated damages. This proviso has been inserted in section 17 of the
act in view of the provision of the conference agreement contained in
section 16 (c) of the act which authorizes the Administrator in certain
cases to bring suits for damages for unpaid minimum wages and overtime compensation owing to employees at the written request of such
employees. Under the conference agreement the proviso does not preclude the Administrator from joining in a single complaint causes of
action arising under section 16 (c) and section 17. Nor is it intended
that if the Administrator brings an action under section 16 (c) he is
thereby precluded from bringing an action under section 17 to restrain
violations of the act. Similarly, the bringing of an injunction action
under section 17 will not preclude the Administrator from also bringing
in an appropriate case an action under section 16 (c) to collect unpaid
minimum wages or overtime compensation owing to employees under
the provisions of the law. Nor is the provision intended in any way
to affect the court's authority in contempt proceedings for enforcement
of injunctions issued under section 17 for violations occurring subsequent to the issuance of such injunctions. The provision, however,
will have the effect of reversing such decisions as McComb v. Scerbo
((C. C. A. 2) 17 Labor Cases No. 65,297), in which the court included a
restitution order in an injunction decree granted under section 17.
FAIR LABOR STANDARDS AMENDMENTS OF 1949
33
RELATION TO OTHER LAWS
The House bill reenacted, but did not change the provisions of
section 18 of the act. The Senate amendment made no change in
this section. The conference agreement also leaves unchanged the
provisions of this section.
SEPARABILITY OF PROVISIONS
The House bill reenacted but did not change section 19 of the act.
The Senate amendment made no change in this lection. The confer-*
4Mnee agreement lea.ves unchanged the provisions of this section.
MISCELLANEOUS AND EFFECTIVE DATE
Effective date.—The House bill provided that the Fair Labor
Standards Amendments of 1949 should take effect upon the expiration
of 60 days from the date of the enactment thereof, except that the
provisions of section 7, relating to overtime compensation, were to be
in full force and effect from and after the date of enactment thereof.
The Senate amendment provided that its amendments to the Fair
Labor Standards Act should become effective upon the expiration of
120 days from the date of enactment thereof. Section 16 (a) of the
conference agreement provides that except for the amendment made
by section 4 of the conference agreement which is to take effect upon
the date of its enactment, the Fair Labor Standards Amendments of
1949 shall become effective 90 days from the date of enactment
thereof.
Portal-to-Portal Act.—The House bill (sec. 3 (d)) provided that no
amendment made by the new act should be construed as amending,
modifying, or repealing any provision of the Portal-to-Portal Act of
1947. The Senate amendment contained an identical provision (sec.
9 (b)) but added an exception with respect to the last sentence of section 16 (c) of the act added by the Senate amendment, dealing with the
date for commencement of actions brought by the Administrator with
respect to claims for unpaid minimum wages or overtime compensation owing to employees under the act. Section 16 (b) of the conference agreement adopts the Senate provision, amended to exclude
the provisions of section 3 (o) of the act from the operation of this
section.
Existing orders.—The House bill (sec. 3 (b)) provided that orders,
regulations, and interpretations of the Administrator or of the Secretary of Labor, and agreements entered into by the Administrator or
the Secretary of Labor, in effect under the act on the date of enactment of the Fair Labor Standards Amendments of 1949 should remain
in effect as orders, regulations, interpretations, or agreements of the
Administrator or the Secretary of Agriculture, as the case might be,
except to the extent that any such order, regulation, interpretation,
or agreement might be inconsistent with the provisions of the amendments or might from time to time be amended, modified, or rescinded
by the Administrator or the Secretary of Agriculture, as the case
might be, in accordance with the provisions of such amendments.
The Senate amendment did not contain any provisions dealing with
this matter. Section 16 (c) of the conference agreement follows the
provisions of the House bill with respect to this matter, except that
in accordance with the decision by the conferees to make no change
34
FAIR LABOR STANDARDS AMENDMENTS OF 1949
with respect to administration of the act the references to the Secretary of Agriculture contained in the House bill have been changed to
references to the Secretary of Labor.
Existing liabilities.—The House bill (sec. 3 (c)) provided that
penalties or liabilities, with respect to any act or omission occurring
prior to the effective date of the fair labor standards amendments of
1949, should not be affected by any amendment made therein, except
that after 2 years from such effective date no action was to be instituted under section 16 (b) with respect to any liability accruing thereunder for any act or omission occurring prior to the effective date.
The Senate amendment contained no such provision. Section 16 (d)
of the conference agreement adopts the House provisions. This
provision will save the rights of the United States in respect to
criminal prosecutions and of employees under section 16 (b). Penalties and liabilities for past acts are unaffected; also, injunctions previously issued by the courts under section 17 retain their validity,
except to the extent that the acts or omissions upon which the injunctions were based are no longer unlawful under or prohibited by the
amendments made by the conference agreement. The 2-year limitation provision is similar to section 6 of the Portal-to-Portal Act of
1947.
Retroactive provisions.—The House bill (sec. 3 (e)) expressly gave
retroactive effect to sections 7 (d) (6), 7 (d) (7), and 7 (g), by adding
language identical in effect to that of section 2 of the act of July 20,
1949 (Public Law 177, 81st Cong., 1st sess.). The Senate amendment
contained no such provision. The conference agreement follows the
approach of the House bill in this respect.
Section 16 (e) of the conference agreement provides that no
employer shall be subject to any liability or punishment under the
Fair Labor Standards Act of 1938, as amended, in any action or
proceeding commenced prior to or on or after the effective date of
the conference agreement on account of the failure of said employer
to pay an employee compensation for any period of overtime work
performed prior to July 20, 1949 (the effective date of Public Law
177, 81st Cong., 1st sess.), if the compensation paid prior to that
date for such work was at least equal to the compensation which
would have been payable therefor had sections 7 (d) (6), 7 (d) (7),
and 7 (g) of the Fair Labor Standards Act of 1938, as amended by
the conference agreement, been in effect at the time of such payment.
Repeal of Public Law 177, Eighty-first Congress.—Section 16 (f) of
the conference agreement contains a new provision repealing the act
of July 20, 1949 (Public Law 177, 81st Cong., 1st sess.). The substance of section 1 of said act has been incorporated in section 7 (d) (6),
7 (d) (7), and 7 (g) of the Fair Labor Standards Act of 1938, as
amended by the conference agreement. Section 2 of said act is likewise no longer necessary in view of the language contained in section
16 (e) of the conference agreement.
JOHN LESINSKI,
AUGUSTINE B. KELLEY,
ADAM C. POWELL, Jr.,
SAMUEL K. MCCONNELL, Jr.,
WALTER E. BREHM,
Managers on the Part of the House.
@FedFRASER