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l a eoaa«etioa with the application of the 48 hour work
, tk@ smpXoyer ¥?1X1 f i r s t hav© to consider ^Ktfcf th«*
Ord«r *»*& rsgtiLatlau* ®m ttiia subjnot are ayplloabXs to him« Is
f i r s t place, i t i s clear from the Regulations of tfci Wur
CaRSlssio& that I** feteeutlYe Order iftfl Hagulstlona are ©aly
to apaly In M i &r«&« &0fiin*v&tfflcU At present there *&r«t 52 #»eh
# the oaly pcmsXty pTorided. for failure fta §S INN a *B
in s
ChulnK«m of th© ^ar BMpiW C*w«l»«ion that tol hopes
to &e^leY« tli© gaili e«tabli®ii#d la his maapowar prograa by TQXUIIC
to i^«k* #o^# ftdjustttaat ia tifc* *»^«s» or salari## of
will have to be glT«e t© (!) tU« Prie® Conl a IHZ9 fg) llM .Ix®e%*i¥« 0r4#r r«X»tiu£ to
UttmG& under i M i Act t (5) t&$ r««?ul«tiou»
of th« Diraetor of Keonoaic i:tabiiisatJon pra#erib«d pursuant %o th«
Act, aad (4) t^® Fair k t e Jti,MJ»<la A€t of X9S8
law).
(1) Va« Price CestrtX Aot of 0©i©to«y t« Xf4£ proyid«» in
pert tiuat t&« PrMftdeat is riuthori^td and dlrMtwt t os or befor©
, to ias«« H ganep&X order fftahiXlais^ prict» f w«ge«
h« eo»t @f XiTlavS an4 t axeept as otherwise
ia th© Actt *»iach stabilisation aksli AO far a« practicable
be os tti« basis of tlNI 1®T#1S which #xist©4 <aa B#ft«®b»r 15 t X94^
sad thu PrMl^ant way HMfMflwr prori&a for jaakins a<ijuatBie»t*
'*lth respeet t s pries* t wages ant «alarl«» l i Ibi «rfeeat taat h®
finde maoasaarr to aid th« «ff«atiTe prossaufeiOB of ths war or t©
ia©auitlea. w The Aot also ^r«nri*a«« tfctl ao action
&\ithority of tii# Act for *th« |mrpo»« of r«~
i«g«a or »®lari®» for a ^ partleiiXar n^i* bsXow %h%
or salaries pnt& tharafor b«tw©e» Jaaynry 1 # 1942 &a<l
15f 1942"» proTidad that th© Presid^mt »»y adjust w&gaa or salaries
t© tfcf sxtiiat h© finds a«c#»smry to corrsot gro®e lavqoitiss as«i &14
ia the affective iro«©cutioa of t&* war. I t will be not«4 that under
th« Mt ws^ss or jifsjLarjtfs stay not be redue#4 Wlm a sp#oifi«& poi&t*
The FxseutiT« Ord«r ^rarl&itft tli&t (a) iJiere^aes or
isa w ^ _ r s t y saast f i r s t iȴa the mpMNRat of th# Satioria
Board," (b)" that the {rational War Labor Board shotilii not
i s th« mg®s tot any particular mr& b«low ths .
and S«pttab»r 15, 1942 unlass to
correct gross inequities and aid ia Kb* «ff««tiT« '^rosseution of
^ t r t ^©a (o) ao dscrease shall bs sad© i s %hm salary for any
ticwlar work h$lm th© hi^hsat i^^l^yy p®ia thsrsfor b«tw»^
sad $«ptfl&b«r 15, X94H ual^ae to ecrreet ^ro©» i&s^aitiss sad to
in the effective proseeutios of the war. Thus, It will be noted that
tine Executive Order follows the statute with respeet to the reduction
of wages aa& salaries but ftl&o provides that decreases in wa&e rates
are peraisslbla but wast first have the approval of tile War Labor
Board* Decreases in ^aajLary ra,taa» are not covered lay the Ssesmtive
Order.
{5} The regulation® of tne Director of Economic Stabilization
provide that no decrease in the east of a salary raise under which an
employe* i s paid a s&lary of lese than |5,000 per annum for any
tlcmlar work should b« itad© If the employer balow th«
r a f paid for »xieto ^ork b»tw«en Jr«a«ary 1
t to correet groes ia«qniti©s
ii
i in
i t&e offeetiT© prostcisticm
or aidl
of the mr\ snd aay d#er«as« in such salary rat© ««st harm the prior
approfal of th« Natioaal War Labor Board or the Cots&isaloner of l a ttraal Ker«Bv«* Hcdvetloai of y^rg£ or T^e rmtts le not
dtalt with ia the ragul&tlons, Mor«oY«r, th* use of th* word
ia aot tcrndTtMrtent!: sir.ee the terms "selary*, "salary payr<eitfts"9
•¥mg««wt s ««ge payment«fl and »«alary rat«M ar« ntparataly defined in
til© regml4ttiQ&«* Stabilliatica Director Byrnes h&c the distlnetioa in
miad between "aalary11 »nd *rate*,as evidenced by the clipping fr©» the
Bew York Herald Triton* of Febyssry ^4, 194S# TJotighly^ the t e m "ialary" Is defined to mean compensation computed on a weekly* aoathly or
annual baeif f and •'wtges1* i t defined t© »:ean compensation computed on
an hourly, daily or piece-work basis*
the effect of the Act, the ExemitiT® Or<ier, and
the reg«klstloa»f i t will be seea that the Act does not prevent the re*
iuetioa of a a^Lat^ rate so long as tae araottnt of salary actually re*
csived im any week or month ia not reduced below the highest amount
received during the January 1 - September 15 t 1942 period. However,
any adjustment ia salary rates must aaye th© approval of the far Labor
Board or the Coiaaissioner of Int»riial Revenue. In conforming to the
46 hour week no difficulties in this conn«otioa should be encountered
since the amount of salaries actually paid would not be decreased although, in working out the arrangement discussed hereinafter, the salJ .rate slight be decreased, in which event i t will be neeessary to
obtain %h@ approval of the War Labor Board or tfce Commissioner of Internal Revenue* gaittry; ,yat0' under the regulations i s not the same as
salary rate under the ?air Labor Standards Aet«
Therefore, i f the employee i s under the Fair Labor Standards Act, that Act Must be considered,
(4) Th© Fair Labor Standards Act {tim# • * ! a half for overtime in excess of 40 hours per week) does not apply to employees in
the executive, administrative or professional grades and with respect
to employees to >?&om the Aot 1® applicable there i s nothing in the
""Turn
Act whioh specifically prereftta the -decrease of either salaries or
Ht&Mtf r a t e s , exoept b«lo« th© miaimuss preeorlbad* JPor tits purpose
of administering t h i s Actf the wages or salary of an ladlTidval i s
re'Sueed to aa hourly ratft which ia tha Act is sailed tli« "regular
rat©*« The Supcrene Court of tiia Uaited States iias held that the
rat***ffih»r@only & weekly ©alary is iavolved i s to be
id by dittdiag the weekly si*lsry b>f the nuafeer of .hours
in. the «oek« See OTeasBi^At %lo>' Co. T,. Ili^^giL. 516 9«
Court ir*
££
, It is
la M*a&iB$ aa a^j«®tm®at of salaries to r«duc« th© hourly or
rate h\i% tit tke sas:.a time Kelsteli a
Thi* ease is rathira* long aud ooaplicuted Mid 0Mr llWl re-aeon is not
h<»relnf but briefly •%d«d i t upheld aa atrrftn^essent d
iMWrljf or regular rate of ealejqp of the employee «?ag tuiniit
actual weefely Sv*iiary re««lTedi by the ertployee rsiBasiRed the
car^fallv" follo^iJi^ the arrnngeaKsit ia the gelo ca»e t if an
so deal red he could coatiaue to pay en eiapiay*© ^s isuoh or
more lie* Ue ia no« getting but les« than ho would r©c#iY© uader the
fair Labor Standard* Act for oTerttee in a 48 hour w^k If no actios
taien to adjust his pay* by red^oing ta® hourly rate so th«t with
ad a aalf times stscft rate for overtiiag the employee vould haTe to
work aoiaeprh^t in ©xee«s of 46 hours p@r week before, fee wuia b© @n*
t i t l e d to more th&a the ^u&reiiteed
5/6/4S
Going to a 48-hour week and paying the increased salaries
resulting from M i l and a half will disrupt the entire salary schedule
of some businesses, increasing, in some instances, the salaries of those
affected above the salaries of the executives and supervisors over them.
The attached article froa the New York Herald-Tribune has, therefore,
been read with interest*
(1) The Price Control Act authorizes the President to issue a
general order stabilizing wages and salaries, forbidding a decrease, however, below the highest paid between January 1 and September 15, 1942.
(2) The Executive Order provides that (a) increases or decreases in wage rates must first have the approval of the National War
Labor Boardj (b) that such Board shell not approve a decrease in the wag<
for any particular work below the highest wages paid between January 1
and September 15, 1942; and (c) no decrease shall be made in the salary
for any particular work below the highest salary paid therefor between
January 1 and September 15, 1942*
(3) The regulations of the Director, however, provide that no
decrease in the caee of salary rate under which an employee is paid a
salary less than $5,000 should be made by the employer below the highest
salary rate paid for such work between January 1 end September 15, 1942.
Any decrease in salary rate must have the approval of the National War
Labor Board or the Co/mniasioner of Internal Revenue as the case may be.
la it correct that in going from a 40-hour week to a 48-hour
week tiie only way to keep wages and salaries from reflecting the full increase occasioned by time and. a naif would be to reduee wage rates and
salary rates? Is it correct also that, under the Executive Order and
regulations, wage rates and salary rates may be decreased (within the
limitations of the Act) but only with the approval of the National War
Labor Board or Commissioner of Internal Revenue, whichever has jurisdiction?
It is assumed thet in any event consideration would have to be
given to the application of the Fair Labor Standards Act. Is it correct
that where that Act is applicable, adjustments within the scope approved
in Walling vs. Belo Co., 316 13. S. 624, could be mede?
Attachment
JPD
3/9/43
@FedFRASER