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Guaranteed Wage Plans
in the United States
A Report on the Extent and Nature o f
Guarantee Plans and the Experience
o f Selected Companies
Bulletin No. 925
UNITED STATES DEPARTMENT OF LABOR
BUREAU OF LABOR STATISTICS
DRURY COLLEGE LIBRARY
U, S. DEPOSITORY COPY
it it 90 1CHS
UNITED STATES DEPARTMENT OF LABOR
L. B. Schwellenbach, Secretary
BUREAU OF LABOR STATISTICS
Ewan Clague, Commissioner
Guaranteed W age Plans
in the United States
Bulletin No. 9 2 5
For sale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C.
Price 35 cents
Letter of Transmittal
U n ited S ta tes D epar tm e n t of L a b o r ,
B u r e a u of L ab o r S ta tist ic s ,
Washington, December 29, 1947.
The S e c r e t a r y
of
L abor:
I have the honor to transmit herewith a report on guaranteed wage and
employment plans, which was prepared in the Bureau’s Wage Analysis Branch
with the cooperation of the Labor Economics Staff. The field investigations were
conducted by the regional offices of the Wage Analysis Branch under the direction
of Edith M . Olsen. The text was prepared by Philip Arnow and Edith M. Olsen.
John L. Afros, formerly of the Bureau’s Labor Economics Staff, participated in
the planning of the study and prepared the appendix on clauses used in guarantee
plans and union contracts. Theodore Allison, Ida Pepperman, and Herbert
Abowitz assisted in the preparation of the final report.
E w a n C l a g u e , Commissioner.
Hon. L. B. S C H W E L L E N B A C H ,
Secretary oj Labor.
Preface
In the summer of 1944 the Bureau of Labor Statistics began an inquiry into
the subject of guaranteed wage and employment plans, anticipating a general
demand for information on the nature of such plans and of the Nation’s experience
with them. At the time the Bureau began its inquiry, union demand for a
guaranteed annual wage was at issue in a dispute case before the National War
Labor Board, involving the basic steel industry and the United Steel Workers of
America. In rendering its decision in November 1944, the Board refused to grant
the union’s demand under conditions prevailing at the time. However, in view
of the lack of adequate information relating to guaranteed annual wage plans, it
was recommended that a thorough study of the subject be made by a special
commission to be appointed by the President.
On March 20, 1945, the President designated the Advisory Committee of the
Office of War Mobilization and Reconversion to survey “ the whole question of
guaranteed wage plans and the possibility of their future development in American
industries as an aid in the stabilization of employment and the regularization of
production.” Following this action, the Bureau’s program was carried on in
cooperation with the Guaranteed Wage Study Staff, designated by the Office of
War Mobilization and Reconversion to investigate the problem. In December
1945, the Office of War Mobilization and Reconversion submitted to the Bureau
of Labor Statistics a request for a survey of specific experiences with existing and
discontinued guaranteed wage and employment plans.
Parts I and III of this report appeared as Appendix C of the Final Report of
the Guaranteed Wage Study Staff to the Advisory Board of the Office of War
Mobilization and Reconversion, and were reprinted as Bureau of Labor Statistics
Bulletin No. 906.
iii
Contents
Page
I.
II.
What is a guaranteed wage plan?______________________________________________
Historical development of plans:
A. Initiation of plans___________________________________________________________
B. Discontinuance of plans______________________________________________________
III. Extent and nature of guaranteed wage or employment plans in the United States:
A. Currently operating plans:
1. Prevalence_______________________________________________________________
2. Characteristics___________________________________________________________
B. Discontinued plans__________________________________________________________
IV. Experience with guarantee plans in 62 selected cases:
A. Circumstances of introduction:
1. Pre-plan employment situations___________________________________________
2. Stable employment for part of the work force_____________________________
3. Previous efforts to stabilize employment__________________________________
4. Responsibility for initiating guarantee____________________________________
5. Objectives of the plans___________________________________________________
6. Extent of planning at time of introduction_______________________________
7. Effect on wages and working conditions__________________________________
B. Outstanding features of the guarantees:
1. Character of the obligations assumed_____________________________________
2. Duration of the guarantee________________________________________________
3. Firmness of the guarantee________________________________________________
4. Computation of the guarantee____________________________________________
5. Transfers________________________________________________________________
6. Administration__________________________________________________________
C. Experiences of operation:
1. Meeting of guarantee obligations_________________________________________
2. Effects of business depression_____________________________________________
3. Discontinued plans_______________________________________________________
4. Operation under Section 7 (b) (2)________________________________________
5. Costs____________________________________________________________________
D. Management and labor evaluation of results:
1. Accomplishments of the plans in the field of employment security___________
2. Other accomplishments__________________________________________________
A. Basic data on 62 plans studied by the Bureau of Labor Statistics_______
B. Clauses used in guarantee plans and contracts__________________________
Index to Appendix B ________________________________________________________________
A p p e n d ix
A p p e n d ix
v
1
3
6
9
10
15 ,
17
21
22
25
25
28
28
30
32
32
33
33
34
34
35
38
40
42
43
48
50
62
89
*
Guaranteed Wage Plans in the United States
I. What is a Guaranteed Wage Plan?
The Bureau of Labor Statistics has included
in its study of guaranteed wage or employment
plans arrangements, written or unwritten, by
which an employer guaranteed or assured to some
or all of his employees, in advance, a definite
period of employment equal to at least 3 months
a year, or an equivalent amount of wages.
This definition is broad, and covered plans
framed in a variety of ways: plans which were
designated as “ guarantees” by the employers and
unions which operated under them, and plans
which did not carry the title of “ guarantee” but
which in fact operated as guarantees. In a rela
tively small number of cases, the plans provided
for an “ annual wage.” In the majority of cases,
employment was guaranteed for a stated number of
weeks per year and hours per week, frequently
less than 52 weeks per year and 40 hours per week.
In practice, these guarantees of employment, as
well as the few guarantees that were explicitly
stated in terms of wages, did guarantee wages for
the total number of hours a year over which em
ployment was guaranteed. A distinction between
“ guaranteed wage” and “ guaranteed employment”
plans was unnecessary for the purpose of this
study.
Despite the general inclusiveness of the defini
tion employed, a number of problems arose re
specting its application in borderline situations.
The distinction between a guarantee plan and a
private unemployment benefit plan, for example,
was difficult to draw. The latter plans were in
cluded only where the period of time over which
benefits were paid was 3 months or more and where
there was a commitment to pay benefits regardless
of the size of reserves set aside for this purpose.
It was difficult also, in many instances, to draw
the line between a guarantee and an employer’s
oral pledge that work in his establishment would
be “ steady.” A large degree of stability is in
herent in many types of industry. Moreover,
many employers have maintained fairly stable em
ployment in their plants, frequently as a result
of planned production and hence employment
regularization, without instituting formal guar
antees. The volume of employment regulariza
tion planning in this country is, in fact, far greater
than that encompassed by the actions of the firms
that have guaranteed wages or employment. The
practice of employing white-collar personnel on
an annual rate basis is widespread, especially in
government, financial, and institutional estab
lishments. Guarantees of minimum weekly hours
or wages are found in many labor agreements,
notably in the meat-packing and trucking indus
tries; the practical effect of these arrangements
is to afford a guarantee of almost full weekly
earnings even when wage earners work only dur
ing some part of each week. In none of these
situations, however, is there a formal pledge or
assurance of continued employment, and the em
ployee is not free from the possibility of lay-off
or loss of his job. Oral arrangements (amounting
to 36 percent of the currently operating plans in
cluded in the study) were included only where
there was a formal guarantee or assurance of con
tinued employment or wages.
Many of the plans contained the theoretical pos
sibility of abrogation or modification during the
life of the guarantee period under various cir
cumstances. Provisions for modification or can
cellation of an announced guarantee did not result
in exclusion of the plan from the study.
The so-called wage advance plan was another
type of guarantee which raised questions of in
clusion. Such plans are sometimes regarded as
loan arrangements, because their central feature is
the advancement of wages by the employer during
short-hour weeks, and the repayment by workers
during weeks in which longer hours are worked.
1
2
GUARANTEED WAGE PLANS IN THE UNITED STATES
They are different from loan plans in essential
characteristics, however. Where there was no
obligation to repay the advance unless the em
ployer provided sufficient work to enable the
advance to be repaid, the plan was considered to
be a guarantee of wages or employment for the
maximum period over which wages were advanced.
These plans were included in the study.
On March 1, 1945, the Bureau of Labor Statis
tics mailed a brief questionnaire to about 90,000
employers for the purpose of determining the
extent to which guarantee plans had been adopted
in the United States. From the replies to this
questionnaire, from a canvass of previous studies
and available literature on the subject, and from
a list of employers who had filed contracts with the
Wage and Hour and Public Contracts Divisions
under Section 7 (b) (2) of the Fair Labor Stand
ards Act, the Bureau was able to compile a list of
firms which appeared to have had a guaranteed
wage or employment plan in effect at -some time.
The Bureau then conducted a field inquiry to de
termine finally whether these arrangements ac
tually met the requirements of the definition of
guaranteed wage or employment plans used in this
study, and whether these plans had actually oper
ated. At the same time, information was collected
on the basic features and provisions of those plans
which met the definition that had been established.
A total of 241 plans (196 still in operation and 45
that had been discontinued) were surveyed in this
manner and are included in the tabulations in this
report. To this group were later added 106 addi
tional discontinued plans about which informa
tion was obtained subsequent to the field survey.
This number included 96 cases which operated
under the Wisconsin unemployment compensation
law in 1934 and 1935.
In addition, the Bureau made more specific and
detailed investigations of the operations of 62
of the plans and the situations into which they
were introduced. The material gathered in the
course of this subsequent investigation is presented
in part IV of this report.
II. Historical Development of Plans1
A. Initiation of Plans
Until the passage of unemployment compensa
tion legislation, the history of guarantee plans was
part of the history of individual efforts, unaided
by government, to mitigate the effects of unem
ployment in particular industries and plants.
During this early period, the idea of guaranteeing
wages was not differentiated from other unem
ployment compensation arrangements. In fact,
the term “ guaranteed wages” was not used in
connection with early plans that have since come
to be known as “ guaranteed wage” or “ guaranteed
employment” plans. A good example of this
situation was reflected in the language of the
Procter & Gamble Co. plan, introduced in 1923,
which provided a 48-weeks-a-year guarantee of
employment by assuring that no worker would be
unemployed for more than 4 weeks a year.
Trade-union sponsorship and individual em
ployer initiation were both important in the early
history of guarantees. During the nineteenth
century, trade-union activity had in several in
stances encompassed the furnishing of out-of-work
benefits to members, but such arrangements, of
course, carried no obligations by employers to
furnish work. The first plans in which employers
assumed responsibility for providing work or wages
were those of the decade of the 1890’s, negotiated
in the wallpaper industry, by brewery workers, by
textile printers in a New Jersey dyeing and
finishing establishment, and established by a
small midwestern retailer of sporting goods.
Best-known among the early guarantee plans
were those in the wallpaper industry. A guar
antee of 11 months’ employment was first intro
duced in 1894, as a result of negotiations between
the National Association of Machine Printers and
Color Mixers and the National Wall Paper Com
pany, then a newly formed amalgamation control
ling from 50 to 75 percent of the,industry. In
1896 the guarantee was extended to 12 months a
year; modifications were made in subsequent
772334 ° — 48-
-2
years. The independent companies in the industry
followed the bargaining pattern set by the largest
firm, and the plan became industry-wide for
members of the wallpaper association who
bargained with the union. Similar arrangements
were made by negotiation with the National Print
Cutters’ Association of America, which in 1923
joined with the National Association of Machine
Printers and Color Mixers to form the United
Wall Paper Crafts.
Among the other early arrangements, the case
involving the National Union of the United
Brewery Workmen of the United States is known
to have arisen in at least two areas, Philadelphia
and New York, and took the form of contract pro
visions restricting lay-off of regular employees to
no more than specified numbers of days during the
dull season of the year. The agreement between
the Machine Printers Beneficial Association and a
New Jersey textile finisher provided each journey
man printer full pay for any period of unemploy, ment prior to July 15 of each year, and half pay for
any period of unemployment during the remainder
of the year. The plan of the midwestern sporting
goods retailer provided an oral guarantee of 52
weeks’ pay each year to all employees who had
passed a probationary period of approximately 90
days.
Guarantee plans introduced during the early
years of the twentieth century involved small
establishments in which employers made oral com
mitments to all or some of their workers to pro
vide-them with year-round employment. A retail
men’s furnishing store, starting in 1905, guaran
teed permanent employees 52 weeks of work at full
weekly hour&; a coffee-roasting establishment, in
1912, began to pay its production workers full
weekly pay during slack season weeks; a poultry
cleaning establishment began, in the followingi
i The material in this section of the report is based upon data gathered by
the Bureau of Labor Statistics and upon published accounts of guaranteed
wage or employment plans.
3
4
GUARANTEED WAGE PLANS IN THE UNITED STATES
year, to guarantee 52 weeks of full-time employ
ment to permanent workers; a small department
store began the same guarantee in 1914; and a
small drug firm about 30 years ago instituted
a year-round weekly wage payment plan covering
2 employees.
The next well-known plan, that of the Columbia
Conserve Co., of Indianapolis, a producer of soups
and other canned products, appeared in 1917.
The guarantee was part of a broader social experi
ment which included profit-sharing and an em
ployee council to give permanent workers a voice
in the management of the enterprise. Phases of
the experiment which attracted public attention
included the steps taken by the company after
introduction of the plan to level out its normally
seasonal production pattern, and the eventual
turning-over of ownership to the permanent work
ers covered by the guarantee.
Employer interest in the problem of employ
ment security is reported to have increased sub
stantially after the business depressions of 1914
and 1921, and also as a result of the increasing
general interest in scientific management and im
proved personnel procedures. A number of un
employment benefit plans, many of which had
characteristics that are currently attributed to
guarantee plans, were adopted during the period
between 1919 and the passage of Federal and State
unemployment compensation legislation. These
plans typically provided for the payment of outof-work benefits rather than for a guarantee of
continuous employment. Where the unemploy
ment benefits covered an extended period of time,
the line of demarcation between an unemployment
benefit plan and a guarantee plan was difficult to
distinguish. As has already been indicated, un
employment benefit plans that provided assurance
of benefits for 3 months or more have been
included in the data on guaranteed wage or em
ployment plans presented later on in this report.
Several unemployment benefit plans are worthy
of mention at this point because of their similarity
to many of the early guaranteed wage or employ
ment plans. None of them was included in the
data contained in subsequent sections of this re
port, because they did not meet the 3-month
guarantee test referred to above. In 1919 the
Dutchess Bleachery, followed in 1920 by an af
filiate, the Rockland Finishing Co., began setting
aside part of its profits in order to provide its
workers half pay during periods of unemploy
ment. The American Cast Iron Pipe Co. intro
duced an unemployment benefit plan in 1924; the
Brown & Bailey Co. did likewise in 1927. During
the same period of time, a number of unemploy
ment benefit plans were introduced by joint agree
ment between management and labor, notably in
the needle trades in New York and Chicago, and
in the hat and lace industries.
Among the plans introduced during the 1920’s
that can be classed as guarantees, the most notable
were the joint agreements of the Cleveland gar
ment industry and the In ti Ladies’ Garment
Workers’ Union (1921), the plan of CrockerMcElwain Co. and its affiliate, the Chemical
Paper Manufacturing Co. (1921), the Proctor &
Gamble Co. plan (1923), and the joint agreement
between the Seaboard Air Line Railway Co. and
a federation covering its shop craft employees
(1928). The plan in the Cleveland ladies’ gar
ment industry was the first of several unemploy
ment compensation devices introduced in the
apparel industry during the 1920’s, and the only
one that qualified as a guarantee under the
definition used in this study. By agreement
with the Int’l Ladies’ Garment Workers’ Union,
Cleveland apparel manufacturers guaranteed 20
weeks of full employment in each 6-month
period (later changed to 40 weeks a year), at
two-thirds of minimum weekly wages (later
changed to half of minimum wages). The
Crocker-McElwain plan assured year-round em
ployment at full pay to workers with at least 5
years’ service; in subsequent years this plan was
modified to provide, finally, less than 50 percent
of full-time annual compensation. The Procter
& Gamble plan assured 48 weeks’ employment to
all workers with at least 6 months’ service. Since
the time of its introduction, the plan has been
somewhat modified, principally by limiting eligi
bility to workers with at least 2 years’ service.
The Seaboard plan as originally introduced was a
guarantee of annual employment for an agreedupon number of shop employees each year.
As was the case /during the earlier two decades
of the century, the occasional introduction of a
less formal plan by small employers continued. A
shoe retailer -guaranteed and maintained yearround employment to 15 regular employees start
ing in 1923; a commercial machinery wholesaler
guaranteed 52 full weeks’ pay a year to 2 service
HISTORICAL DEVELOPMENT OF PLANS
mechanics; beginning about 1924, a Michigan coal
dealer guaranteed weekly wages throughout the
year to 7 employees regardless of prevailing con
ditions; in the same year, a garment manufacturer
introduced a guarantee of 52 weeks* full pay cov
ering a group of key workers; from 1 to 4 plans of
similar character were introduced during each of
the remaining years of the 1920*s.
Introduction of guarantees and unemployment
benefit plans continued during the depression of
the early 1930*s. The General Electric Co. in
1930 adopted an unemployment pension plan,
covering 12 of its electrical apparatus manufactur
ing plants, and in 1931 adopted a plan guarantee
ing 50 weeks* work of not less than 30 hours each
(modified in subsequent years) to employees with
2 years or more service in 12 lamp manufacturing
plants. The Wm. Wrigley, Jr., Co. in 1934 adopted
an employment assurance plan with unemploy
ment benefits varying according to a sliding scale
dependent on pay level and length of service. The
plan of Geo. A. Hormel & Co., meat packers of
Austin, Minn., was started on a small scale in 1931
and its scope gradually extended until in 1940 it
covered all but a small percentage of the com
pany *s employees.
During and following the depression of the
early 1930*s, the character of the plans introduced
shifted from guarantees of unemployment bene
fits to guarantees of continued employment.
Compulsory unemployment insurance legislation
was adopted in Wisconsin in 1932 and at later
dates in other States, the latter chiefly under the
provisions of the Federal Social Security Act.
The legislation permitted modification of the con
tribution of tax features in the cases of employers
who provided guarantees of employment or wages
equivalent to legislatively established standards.
The chief, and as far as can be ascertained the
only, direct effect of the legislation upon the in
troduction of guarantee plans occurred in the case
of the Wisconsin law, which completely exempted
from the unemployment tax employers who guar
anteed 42 weeks* pay (at 36 hours a week, changed
in 1935 to 40 weeks at two-thirds of full-time) to
their workers. A total of 96 employers operated
guarantee plans under this law for a period of
slightly more than a year, beginning in 1934 and
ceasing at the end of 1935. At that time the stat
utory provisions in Wisconsin were changed to
conform to the requirements of the Federal stat
5
ute, applicable to all State unemployment com
pensation laws, under which employers who guar
anteed employment or wages were given tax
credits, but not complete exemption. Only six
additional States— California, Florida, Idaho,
Indiana, Minnesota, and Oregon— are reported to
have made provision in their unemployment com
pensation laws for guarantee plans, but none of
them implemented the clauses with the necessary
administrative regulations. No guarantee plans
were ever adopted under these laws.
Further legislative provision affecting guarantee
plans was made in 1938, when the Fair Labor
Standards Act was adopted. Under Section 7 (b)
(2) of this act, exemption from penalty over
time provisions (up to 12 hours a day or 56 a
week) was granted in cases where a worker was
employed—
on an annual basis in pursuance of an agreement with
his employer, made as a result of collective bargaining
by representatives of employees certified as bona fide
by the National Labor Relations Board, which pro
vides that the employee shall not be employed more
than 2,080 hours during any period of 52 consecutive
weeks.2
To date, very few employers have used this ex
emption. The most substantial plan operating
under the provision is that of Geo. A. Hormel &
Co., which had been in operation prior to the
passage of the Act.
During the period following the depression of
the early 1930*s, greater numbers of plans were
introduced yearly than in any year prior to the
depression. During the years 1938^2 new plans
were introduced at the rate of from 19 to 23 a year,
compared with a maximum of 4 a year during the
1920*s, and from 2 to 6 during the early 1930*s.
The latter half of the 1930*s saw the introduction
of a number of “ basic crew** provisions in agree
ments in the wholesale and retail trades. Under
these contracts, specified numbers of workers,
ranging from less than half to well over threequarters of the work force, were guaranteed full
weekly wages throughout the year.
Another of the well-known plans, that of the
Nunn-Bush Shoe Co., was established in 1935.
This plan early in 1946 guaranteed a continuous
2Prior to October 1941, the maximum number of hours that an employee
might work in a year for the 7 (b) (2) overtime exemption to apply was 2,000
hours. In October 1941, an amendment to the Act changed the limit from
2,000 hours to 2,080 hours (the equivalent of fifty-two 40-hour weeks.)
6
GUARANTEED WAGE PLANS IN THE UNITED STATES
employment relation to workers with the greatest
seniority, and provided that the total earnings
of all workers with 2 years’ service (including,
but generally exceeding, the number of workers
who had the employment relation guaranteed)
should be a predetermined proportion, no less
than 20 percent, of the wholesale value of the
company’s product.
Workers shared in this
amount in proportions determined by rates which
reflected job differences.
By the beginning of 1946, according to the in
formation which has been compiled by the Bu
reau, a total of 347 plans which met the definition
used in this study had been introduced. A yearby-year tabulation of the time of their initiation
is shown in table 1.
T
1 . — Number of guaranteed wage or employment plans
covered in Bureau of Labor Statistics survey , by year of
initiation
able
Year of initiation
Total.
_
______
Number of
plans
' 1347
Prior to 1900
1905
1912
____
1913.................................
1914
_______ _______
1916______________ ____
1917_______ ___________
1918___ ____ __________
1919
___
1920________ ___________
1921
___
1922
____________
1923
1924 ____ _____________
1925 ............. ..............
1926 ............................
1927______ _____________
3
1
1
1
1
1
1
1
1
4
3
1
4
3
2
2
2
Year of initiation
1928______ ____________
199Q
1930___________________
1931___________________
1932___________________
1933___________________
1934___________________
1935___________________
1936___________________
1937__________________
1938___________________
1939___________________
1940___ _*_____________
1941___________________
1942___________________
1943___________________
1944___________________
1945___________________
(Data not available)__
Number of
plans
1
4
2
5
6
6
1102
17
11
10
23
20
19
21
19
8
21
9
11
1 Includes 96 plans initiated in 1934 under the encouragement of the tax
exemption provisions of the Wisconsin unemployment compensation law.
B. Discontinuance of Plans
Of the plans known to the Bureau of Labor Sta
tistics that had been introduced up to the begin
ning of 1946, 196 were still in existence at that
time. The remainder, a group including all of the
96 plans introduced in 1934 under the Wisconsin
unemployment compensation law and 55 others,
had been discontinued before the end of 1945.
In the case of the 96 Wisconsin plans and a small
number of others, discontinuance resulted from the
circumstances surrounding the introduction of
compulsory unemployment insurance legislation.
In the case of the Wisconsin plans, amendment of
the State law to conform with the requirements
of the Federal Social Security Act removed the
tax exemption which the companies had enjoyed
under the former statute, and the employers there
after individually elected not to come under the
guaranteed account provisions of the legislation.
In a few other cases, plans that had been instituted
prior to the passage of compulsory unemployment
compensation legislation were discontinued upon
the passage of such laws because it was believed
that the objective which the plans were designed
to meet was met by those laws.
In the remainder of the cases, discontinuance
was largely the result of special individual circum
stance, but on the whole the result of problems
facing the individual employer. In a number of
cases the general state of business conditions at
the time the plans were discontinued was a minor
influence.
Two of the earliest plans abandoned were those
of the American Cast Iron Pipe Co., discontinued
in 1926, and the Consolidated Water Power &
Paper Co., discontinued in 1929. Only incom
plete information is available on the reasons for
their discontinuance: The former was discontinued
on the eve of a major technological change in the
industry, the latter during a period of relatively
full employment. The wallpaper plan— one of the
earliest begun—was discontinued in 1930, after a
considerable amount of dispute over the plan’s ad
ministration, and in a period when depression
conditions and the rise of substitute materials
were seriously affecting the industry.
The plan of the United Diamond Works, under
which benefits had been paid for almost a full year
during the 1921-22 depression, ended in 1931, fol
lowing a period of uncertainty in the industry to
which international tariff problems contributed.
In the same year the unemployment benefit plans
of the Brown & Bailey Co. and the Cleveland gar
ment manufacturers were discontinued; in the lat
ter case the reason is reported to have been the
long-range decline of the local market and the
shift in the character of the industry. The plans
of the Leeds & Northrup Co. and the Dennison
Manufacturing Co. were discontinued in 1932
when their unemployment benefit reserves were
exhausted. The depression years also saw the dis
appearance of many of the unemployment benefit
plans not included in this study (those that could
not meet the test of a 3-month guarantee)-, result
ing chiefly from depletion of their individual
unemployment compensation reserves.
7
HISTORICAL DEVELOPMENT OF PLANS
Of the plans discontinued after the depression
of the early 1930’s, 15 were studied in detail by
the Bureau, and information is available concern
ing the circumstances of their discontinuance. The
effects of the depression seem to have been an im
portant contributory cause of abandonment in only
one case, where the guarantee was substantially
modified to provide less than 50 percent of the
earnings originally guaranteed, and the plan was
finally abandoned in 1937. Four of the plans were
abandoned during World War II, largely as a
result of wartime business uncertainties. Four
were abandoned after management had come to
the conclusion that the plans were not needed, be
cause the employer was able to provide substan
tially more work than the guarantee assured. All
but one of these plans had been in existence for
3 years or less, and all were abandoned between the
years 1939 and 1942. Three plans— two of which
were introduced to avoid overtime compensation
and one of which was introduced as an alternative
to a wage increase— were abandoned as a result of
employee dissatisfaction with the plans and union
opposition. One of the remaining three plans was
abandoned following the passage of unemploy
ment compensation legislation; another was ended
during World War II when management became
worried about possible conflict between its obliga
tions under the plan and its obligations to return
ing veterans, and when a newly organized union
showed indifference to the plan’s continued exist
ence. Finally, the plan of the Columbia Conserve
Co., which had operated successfully over a period
of 25 years and through three periods of business
depression, was abandoned as the aftermath of a
labor dispute. Wages and union organization had
arisen as issues among the employee-owners, re
sulting in a National War Labor Board dispute
case and a court suit. The employee-ownership
feature of the plan was ended by court order as a
result of the suit, and the management of the com
pany simultaneously ended the guarantee. In this
case, as in a number of other cases where plans
were discontinued, management and union repre
sentatives expressed great interest in possible fu
ture attempts at guaranteeing employment or
wages.
As can be seen from table 2, guarantee plans
were discontinued from time to time during the
entire span of years over which plans have been
in existence. With the exception of the year 1935,
T a b l e 2.— Number o f discontinued guaranteed wage or em
ployment plans covered in Bureau of Labor Statistics sur
vey, by year o f discontinuation and number o f years o f
existence at time of discontinuation
1 Includes 96 plans initiated in 1934 under the encouragement of the tax
exemption provisions of the Wisconsin unemployment compensation law,
and discontinued in 1935 when the tax exemption was eliminated.
when the 96 Wisconsin plans were discontinued,
there is no significant concentration. It is notice
able, too, that the discontinued group includes
plans which had been in existence for varying
lengths of time. Some, like the wallpaper plan
and the plan of the Columbia Conserve Co., were
T a b l e 3.— Total number of guaranteed wage or employment
plans covered in Bureau of Labor Statistics survey that
were in operation each year, 1893—1945
Year
1893__________ ________
1894-95____ ____ _______
1896-1904_______ _______
1905-11.............................
1912___________________
1913......... .........................
1914-15................. .......
1916
_______ ______
1917..................................
1918____ ______ _______
1919
..........................
1920..................................
1921 ____________ ______
1922
........ ...............
1923_______ ____ _______
1924______ ____________
1925____ _____ _________
1926___________ ______
1927___________________
1928______________ _____
Number
of plans
in opera
tion at the
end of each
year
1
2
3
4
5
6
7
8
9
10
11
15
18
19
23
26
28
29
31
32
Year
1929.................. ..............
1930________ __________
1931___________________
1932___________________
1933_______ ______ ____
1934........... .......................
1935_____________ _____
1936____ ________ ______
1937___________________
1938_________ _________
1939 ___________ _____
1940_____________ _____
1941............. .....................
1942 ____________ ____ _
1943....1______________
1944___________________
1945___________________
(Data not available—
11 plans)____________
Number
of plans
in opera
tion at the
end of each
year
35
36
38
41
46
i 148
68
79
87
107
125
138
154
166
167
183
185
196
1 Includes 96 plans initiated under the encouragement of the tax exemption
provisions of the Wisconsin unemployment compensation law in 1934 and
discontinued in 1935 when the tax exemption was eliminated.
8
GUARANTEED WAGE PLANS IN THE UNITED STATES
among the oldest plans on record, while others
had been in operation for only a few years when
they were dropped.
As has already been shown, the net result of
the continued inauguration of new plans and the
discontinuance of others was a total of 196 during
January, 1946. With the exception of the year
1935, when the 96 plans adopted under the Wis
consin unemployment compensation law were dis
continued, the picture, as shown in table 3, has
been one of constant growth of the number of
plans in existence, at an accelerated rate during
the period since 1934.
The plans that were in existence in January
1946, as shown in table 4, had been in operation
over varying periods of years. Approximately
one-third had been in operation for 10 years or
longer, and 11 plans had been in operation for 25
years or more.
T a b l e 4. — Number of currently operating guaranteed wage
or employment plans in Bureau of Labor Statistics survey,
by number of years in existence (as of January 1946)
Number of years in
existence
Total___________
Number
of plans
still in
operation
196
Number of years in
existence
10 years
11 ypfl.rs
Less than 1 year____ __ _
1 year______ ___________
2 years __________________
3 years. ______ ___________
4 years. ________________
5 years____ __
_______
6 years___ _______
____
7 years____ _______ ._ _
8 years________ __________
9 years___ _____
7
2
19
7
17
13
17
14
11
8
12 years
13 years
14 years
15 to 19 years
20 to 24 years
25 to 29 years
’ 30 to 34 years
35 years and over
Not available___________
Number
of plans
still in
operation
9
7
6
6
5
8
8
4
4
3
11
III. Extent and Nature of Guaranteed Wage or Employment Plans in the
United States
A. Currently Operating Plans
1 . Prevalence
In January 1946, the 196 guaranteed wage or
employment plans known by the Bureau of Labor
Statistics to be in operation in the United States
covered a total of approximately 61,000 workers.
Some of the plans were master contract arrange
ments, involving a number of employers and
unions in the same industry and community, and
others were plans which covered several plants of
the same company. As a consequence, the number
of establishments was, of course, considerably
greater than the number of plans. There were, in
all probability, additional bona fide plans that
were not included in the study. Compared with
the total number of establishments or wage earners
in the United States, the coverage of all guaranteed
wage or employment plans is small. It is esti
mated to be well below 1 percent of the total num
ber of wage earners employed in nonagricultural,
nongovernmental establishments. The significance
of the plans lies, however, in their provisions and
accomplishments, rather than in their prevalence.
The 196 plans were found in a great many in
dustries. Almost 40 percent of them, involving
38 percent of total employment covered, were in
manufacturing industries. Within the manufac
turing group, the plans were most frequently found
in industries which have substantial seasonal
variations, and those which produce for consumer
demand. The greatest numbers of plans occurred
in establishments manufacturing food products—
brewing, meat packing, grain, and flour; in textile
mills— primarily in dyeing and finishing establish
ments; and in apparel companies. Relatively few
plans were found in heavy or basic manufacturing
industries, which are subject to much wider cyclical
fluctuations, but often to less marked seasonal
variation (table 5).
Outside manufacturing industries, the greatest
number of plans was in the retail trade group.
As in the case of the manufacturing industries
which produced consumer products, the estab
lishments in retail trade were in many instances
in lines of activity that were subject to significant
seasonal variation: mail order houses, clothing
stores, department stores. The same was true of
establishments in wholesale trade, which con
tained the next most numerous group.
T a b l e 5.— Number o f currently operating guaranteed wage
or employment plans covered in Bureau of Labor Statistics
survey, by industry group
Industry group
Number of
currently
operating
plans
Total plans___________________________________________________
196
Manufacturing, total_________________________________________
Food and kindred products_______________________________
Textile-mill products_____________________________________
Apparel and other finished products made from fabrics and
similar materials_______________ ____ ___________________
Lumber and timber basic products_______________________
Paper and allied products________________________________
Printing, publishing, and allied industries________________
Chemical and allied products_____________________________
Leather and leather products_____________________________
Stone, clay, and glass products____________________________
Iron and steel and their products_________________________
Nonferrous metals and their products_____________________
Machinery (except e le c t r i c a l) ______ ___________________
Electrical machinery_____________________________________
Transportation equipment (except automobiles)__________
Miscellaneous manufacturing industries__________________
75
21
15
12
1
3
8
5
1
1
2
1
2
1
1
1
Nonmanufacturing, total_______________
Nonmetallic mining and quarrying. _
Construction—general contractors__
Wholesale trade____________________
Retail trade________________________
Real estate_________________________
Railroads___________________________
Water transportation_______________
Warehousing and storage___________
Services incidental to transportation.
Communication____________________
Heat, light, and power______________
Services________________: ___________
Nonprofit membership organizations.
121
1
3
23
56
2
1
1
1
1
10
2
19
1
The majority of the establishments that guar
anteed employment or wages were located in the
industrial regions of the country. More than 70
percent of the 196 were in the Middle Atlantic
and Great Lakes regions, and almost 45 percent
were in the cities of New York, Chicago, Cleve
land, and Philadelphia. Very few were found
9
10
GUARANTEED WAGE PLANS IN THE UNITED STATES
in the Southeast, Southwest, or West. The fol
lowing cities had the largest numbers of plans:
Chicago, 111_________________________________ 10
Cleveland, Ohio____________________________ 10
Detroit, Mich______________________________
6
Milwaukee, Wis____________________________
5
New York, N. Y _____________________________ 61
Philadelphia, Pa____________________________
5
Plans were found in establishments of all sizes,
although most of them were in small establish
ments. Table 6 contains a distribution of the
total number of wage earners in establishments
covered by the plans in 172 cases for which such
information was available. While in several cases
the employment data for individual plans group
together the employment of a number of estab
lishments, as in the cases of master contracts and
companies with more than one establishment un
der the same plan, the table gives a fairly good
picture of the size of the establishments involved.
About 55 percent of the plans were in employing
units of less than 50 persons; an additional 10 per
cent of the plans were in employing units of 50
to 100 persons. Ten percent of the plans were in
employing units of 1,000 persons or more.
T
6 . — Number o f currently operating guaranteed wage
or employment plans covered in Bureau o f Labor Statistics
survey , by total number of wage earners
able
Total number of wage earners in establishment or establish
ments covered by plan
Total. ___________ _____________________________________
Less than 25_____________________ _ ______ _______ ______
25 to 49___________________________________________________
50 to 74____________________________________________________
75 to 99_____________ ______________________________________
100 to 249_____________________
_________________________
250 to 499__________________________________________________
500 to 749__ _______________________________________________
750 to 999__________________________________________________
1,000 to 2,499____
____ ________________________________
2,500 to 4,999
___________________ _____________________
5,000 to 7,499 _____________________________________________
7,500 to 9,999 _________________________________ ____________
10,000 and over ______ ___________________________________
Total employment not available___________ _____________
Number of
currently
operating
plans
1 196
64
29
13
5
23
2 14
3
3
26
26
2
1
3
8 24
1 A guaranteed wage or employment plan embodied in a master contract
between a trade association and a union is counted as a single plan, and is
classified according to the total number of wage earners in all of the covered
establishments. There are 10 such cases.
2 Includes 1 master contract plan.
8 Includes 7 master contract plans.
In 130 of the 196 plans, unions represented the
employees covered by the guarantees in general
collective bargaining relations (table 7). Where
one union was involved, the unions were AFL
affiliates in 36 cases, CIO affiliates in 64 cases,
and were unaffiliated in 13 cases. In 17 cases there
were 2 or more unions of different affiliation rep
resenting the workers. Where unions represented
the workers, the provisions of the guarantee were
generally incorporated in a collective bargaining
agreement. In a number of cases, however, the
plans were introduced prior to unionization and
have not since been included within the scope of
collective bargaining.
T a b l e 7.— Number of currently operating guaranteed wage
or employment plans in Bureau of Labor Statistics sur
vey, by representation of covered workers
Representation of covered workers
Total__
______________________ ___________________ ________
Nonunion____________________________________________
__
Union______________________________________
_____ __ __
A F L affiliate_______________________________ ___________ _
CIO affiliate_________ . . .
_______. . . ....................... .
Unaffiliated union______ __________
_________
___ _
2 or more unions with different affiliations_____ _ ...........
Number of
currently
operating
plans
196
66
130
36
- 64
13
17
2, Characteristics
The basic features of the guarantee plans may
be characterized best in terms of the kinds of
workers eligible for coverage and the require
ments which workers must meet before they are
eligible for benefits, the proportions of workers
actually covered, and the amounts of wages or
employment guaranteed.
In 101 of the 196 plans, as indicated in table 8,
coverage under the plan was open to all or nearly
all workers (in some cases to all production
workers, and in others to some or all other wage
earners as well, including office workers, super
visory force, salesmen, etc.). In 63 of these cases,
employees automatically became eligible upon hir
ing or within 30 days thereafter. Service require
ments, ranging from 3 months to more than 5
years, were applicable in all but 4 cases; in these
the duration of the requirement was indefinite,
depending upon the employer’s judgment concern
ing the necessary probationary period. In a large
number of cases, especially where there were union
contracts, the eligibility period coincided with the
probationary period provided in the contract for
the attainment of permanent status or a place
upon the seniority rolls.
Coverage was open only to employees in “ reg
ular” jobs in 35 of the 196 plans. The limits of
this kind of coverage were in some cases estab
lished by “ basic crew” contract provisions that
specified the number of workers who were to be
11
EXTENT AND NATURE OF GUARANTEE
T
8 .— Eligibility requirements in currently operating
guaranteed wage or employment plans in Bureau of Labor
Statistics survey, by representation o f covered workers
able
Number of currently
operating plans
Eligibility requirement
Total
Union
Non
union
Total---------------------------------------------------------------
196
130
66
Coverage open to all employees.______________
Upon hiring or after service of 30 days or
less_____________________________________
Upon service of 3 months_________________
Upon service of 6 months_________________
Upon service of 1 year____________________
Upon service of 1Mi to 5 years_____________
Upon service of 5 years or m ore..................
Upon selection by employer______________
101
54
47
63
4
9
9
7
5
4
37
2
4
5
4
2
26
2
5
4
3
3
4
35
29
6
51
45
6
36
9
32
7
4
2
Coverage includes only employees in “ regular”
jobs'________________________________________
Coverage open only to employees in specific
departments or occupations________________
Upon hiring or after service of 30 days or
less________________________ ____________
Upon service of 3 months or more________
Upon selection by employer........................
Employees in “ regular” jobs only------------Unknown________________________________
Coverage confined to key employees.
2
3
1
9
2 _______
operating guaranteed wage or employment plans in Bureau
o f Labor Statistics survey , by eligibility provisions
Number of currently operating
plans with eligibility open to—
Num
ber of
Employ
cur
Percentage of total wage earn
Em
ees in
rently
ers covered by guarantee
specific
All
Key
ploy
oper
depart employ
ating employ ees in
ees
regular ments or
plans
ees
occupa
jobs
tions
Total_________________________
196
Under 5 percent. _. . . . . .
5 and under 10 percent___
10 and under 20 percent___
20 and under 30 percent.. ___
30 and under 40 percent
40 and under 50 percent______
50 and under 60 percent______
12
13
7
12
10
10
11
17
15
14
9
38
28
60 an d u n d e r 7ft p e r c e n t
7ft a n d u n d e r 8ft p e r c e n t
80 and under 90 percent
Oft a n d u n d e r Iftft p e r c e n t
100 percent
Data not available_____ _____
101
35
51
9
1
12
12
5
7
3
3
4
1
1
2
1
2
1
1
4
1
3
5
2
4
13
11
12
8
38
5
4
2
3
4
2
1
18
3 ________
1 _____
2
7
covered, and in other cases were established by
specific elimination of “ temporary,” “ extra,” or
other similar groups of workers. Limitation of the
guarantee to regular workers occurred chiefly in
retail and wholesale establishments, and additional
length-of-service requirements were either non
existent or brief.
In 51 cases, coverage was confined to employees
in certain departments or occupations; for exam
ple, to machine printers in textile finishing and
dyeing mills, and to pressmen in a newspaper
plant. More than two-thirds of these cases had
length-of-service requirements of 30 days or less.
Coverage in 9 cases was confined to key em
ployees, usually selected upon an individual basis
with an eye to the importance of the job and the
service record of the individual. Plans of this
variety included one which covered a small group
of key production and nonproduction workers in a
garment plant but excluded the bulk of the produc
tion workers, and another in an ice-cream factory
which covered a small selected group of employees
in a number of key skilled jobs during the dull
season.
The proportions of workers covered were, of
course, highest in the group of plans which per
mitted all employees to be eligible, and lowest in
the plans restricting coverage to employees in
specific departments or occupations and to key
772334°— 48---------- 3
T a b l e 9.— Proportion o f wage earners covered in currently
employees (table 9). Among the 101 plans where
all the employees were eligible for coverage, there
were 38 where every employee in the establishment
was actually covered by the guarantee; in the
remainder of these plans, the minor exclusions of
small groups of workers and the length-of-service
provisions reduced the proportion of workers
actually covered, but only in a small number of
cases to less than 60 percent. Among the 60 plans
restricting coverage to specific departments or
occupations or to key employees, generally less
than 30 percent of the total number of workers in
the establishment were actually covered by the
guarantee. A tabulation of proportions of workers
covered, showing union and nonunion establishT a b l e 10.— Proportion of wage earners covered in currently
operating guaranteed wage or employment plans in Bureau
of Labor Statistics survey , by representation o f covered
workers
Number of currently operating
plans
Percentage of total wage earners covered
by guarantee
Total
Union
Non
union
Total______________________________________
196
130
66
Under 5 percent___________________________
5 and under 10 percent_____________________
10 and under 20 percent______________ ____
20 and under 30 percent................................ .
30 and under 40 percent____________________
40 and under 50 percent____________________
50 and under 60 percent------------------------------60 and under 70 percent________________ _
70 and under 80 percent__________________ _
80 and under 90 percent--------- -------- --------90 and under 100 percent---------------------------100 percent__________ ____ __________ _____
Data not available------------------ -------------------
12
13
7
12
10
10
11
17
15
14
9
38
28
11
12
5
10
5
7
7
14
10
9
5
17
18
1
1
2
2
5
3
4
3
5
5
4
21
10
12
GUARANTEED WAGE PLANS IN THE UNITED STATES
merits separately, indicates a great range in both
groups, but with more restricted coverage in the
case of the plans in unionized establishments (table
10). This reflects to some extent the influence of
the “ basic crew” contracts, and the fact that the
plans were limited to those parts of the establish
ments over which the unions had jurisdiction.
The proportion of coverage was highest in plans
in small employing units, as shown in table 11.
Thus, 34 of the 38 plans in which 100-percent cov
erage was reported were in establishments em
ploying fewer than 50 workers. There were, how
ever, a small number of plans covering 70 percent
or more of the total work force in establishments
T a b l e 11.— Proportion o f wage earners covered in currently operating guaranteed wage or employment plans included in Bureau
o f Labor Statistics survey, by total number of wage earners
Number of currently operating plans by total number of wage earners
Percentage of total wage earners covered
by guarantee
Total
Total........................ ............. ............................... ............
Under 5 percent__ _________________________________
5 and under 10 percent_____________________________
10 and under 20 percent____________________________
20 and under 30 percent____________________________
30 and under 40 percent____________________________
40 and under 50 percent____________________________
50 and under 60 percent____________________________
60 and under 70 percent__________ ________________
70 and under 80 percent __ __
_______________
80 and under 90 percent__________ _______________
90 and under 100 p ercen t...______________________
100 percent________ _______________________________
Data not available... _________________ _____ _____
196
12
13
7
12
10
10
11
17
15
14
9
38
28
Less
than
25
64
29
1
1
5
1
5
4
7
9
4
2
25
T a b l e 12.— Distribution o f number o f wage earners covered
by currently operating guaranteed wage or employment
plans in Bureau of Labor Statistics survey
Number of
currently
operating
plans
Total_______ ______________________________________________
i 196
Less than 5__ _______ ________________________________ . _.
5 to 9______________________________________________________
10 to 24___________________________________________________
25 to 49____________________________________________________
50 to 99 _________________________________________________
100 to 499 ________________________________________________
500 to 999 ___ ________________________________________
1,000 to 4,999
______________________
_________________
5,000 and over. ________________ ______ ____________ ____
Covered employment not available______________________
33
32
41
30
13
218
27
3 13
1
28
1 A guaranteed wage or employment plan embodied in a master contract
between a trade association and a union is counted as a single plan, and is
classified according to the total number of wage earners in all of the covered
establishments. There are 10 such cases.
2 Includes 2 master contract plans.
3 Includes 4 master contract plans.
75-99
13
1
2
2
1
3
1
1
3
1
4
4
9
1
3
2
1
1
1
Total
employ
ment
not
avail
able
1,000
and
over
100-249
250-499
500-749
750-999
5
23
14
3
3
18
2
4
3
2
6
1
1
1
1
4
2
1
1
3
1
or employing units with several hundred or more
than one thousand workers. In absolute figures
respecting numbers of covered wage earners, 149
of the 188 plans for which information was avail
able covered less than 100 wage earners, 18 cov
ered from 100 to 500 wage earners, 7 covered from
500 to 1,000, and 14, or 7 percent of the total num
ber, covered 1,000 or more workers (table 12).
Number of wage earners covered
50-74
25-49
5
1
1
1
1
1
2
2
1
1
1
.
1
1
1
2
1
1
1
1
'
1
24
2
3
1
1
1
24r
For purposes of comparative analysis of the
duration of the guarantees, the Bureau has classi
fied the plans in accordance with the amount of
wages or employment guaranteed or advanced, in
terms of weeks of full-time or part-time hours or
pay. In the few cases in which the duration of the
guarantee was adjusted according to a sliding
scale on the basis of such factors as wage rate or
length of service, the maximum duration of the
guarantee was used for the tabulation. The num
ber of weeks of employment guaranteed was cho
sen as the means of expressing the common
denominator because guarantees in terms of num
ber of weeks of employment per year occurred
most frequently. The actual wording of the guar
antees reflected a wide range of plan and contract
terminology. The variety of language used is il
lustrated by a listing (on p. 14) of extracts from
the texts of plans which guarantee substantially
the same employment— a full year, at full-time
wages.
Almost two-thirds of the plans (128 out of 196)
guaranteed employment for a full year at full
time hours or pay (table 13). Most of these ar
rangements were guarantees of 52 full weeks of
employment, or pay in the absence of employment;
13
EXTENT AND NATURE OF GUARANTEE
T
T a b l e 14.— Duration of guarantee in currently operating
13.— Duration of guarantee in currently operating
guaranteed wage or employment plans covered by Bureau of
Labor Statistics survey, by representation of covered workers
able
guaranteed wage or employment plans covered by Bureau of
Labor Statistics survey , by number of workers covered by
guarantee
Number of currently
operating plans
Total number.
of workers
covered in
currently
operating
plans
Duration of guarantee
Union
Total
Duration of guarantee
Non
union
Total ______ ________________________________
196
130
66
Full year (52 weeks, 2,080 hours, etc.)________
At full-time hours or pay______ _________
At less than full-time hours or pay_______
50 weeks’ full-time hours or pay ____________
48 weeks’ full-time hours or pay______________
47 weeks’ full-time hours or pay ___________ -46 weeks’ full-time hours or pay
___________
40-45 weeks’ full-time horn's or pay____________
38-39 weeks’ full-time hours or pay____________
13-37 weeks____________________ ______________
At full-time hours or pay____ ____________ .
At less than full-time hours or pay________
140
128
12
9
7
4
8
10
11
7
3
4
80
69
11
9
5
4
8
9
10
5
2
3
60
59
1
2
1
1
2
1
1
Total_______________________________ _________ _________
161,229
Full year (52 weeks, 2,080 hours, etc.) _____________________
At full-time hours or pay
_____________________ _____
At less than full-time hours or pay____________________
50 weeks’ full-time hours or pay___________________________
48 weeks’ full-time hours or pay__________________________
47 weeks’ full-time hours or pay__________________ ________
46 weeks’ full-time hours or pay______________ ___________
40 to 45 weeks’ full-time hours or pay_____________________
38 to 39 weeks’ full-time hours or pay_____________________
13 to 37 weeks ___________________________________________
At full-time hours or pay_____________________________
At less than full-time hours or pay____________________
2 51,250
2 41,529
9,721
1,465
3 4,176
41
20
745
4 138
3,394
1,206
2,188
1 Data not
2 Data not
2 Data not
4 Data not
very few were expressed in terms of an annual
wage. Eighty-five percent of the plans (166)
guaranteed full-time pay for 40 weeks or more.
The total of 61,000 workers covered by the 196
plans was distributed in approximately the same
manner as the number of plans (table 14).
Most of the guarantees were expressed in terms
of employment rather than in terms of wages.
The detailed studies made by the Bureau in 62
cases indicated that this manner of expression
arose largely from the employer’s confidence that
he could provide the stated amount of work, and
where the worker failed to make himself available
for work, no pay was generally given.
available for 8 plans.
available for 5 plans.
available for 2 plans.
available for 1 plan.
Thus far, it has appeared that a major propor
tion of the guarantees provided full-time pay for
an entire year, and that a large group provided
coverage for all employees upon hiring or after
a relatively short period of time. A cross-tabula
tion of these two characteristics provides a method
of determining the extent to which full-year guar
antees and guarantees to all employees after a
short period of time coincided. Table 15 shows
the multiplicity of combinations of guarantee and
eligibility provisions that were embodied in the
T a b l e 15.— Duration o f guarantee in currently operating guaranteed wage or employment plans covered by Bureau o f Labor
Statistics survey , by eligibility requirements
Number of currently operating plans
5
4
35
51
36
9
2
3
5
4
1
3
3
4
4
32
27
5
2
29
25
4
3
3
19
16
3
1
3
6
5
1
1
1
1
3
3
1
5
7
4
1
3
4
7
2
1
A t le s s th a n f u l l-t i m e h o u r s or p a y
1
1
2
1
2
1
1
1
1
1
1
1
1
1
1
9
9
9
1
1
Coverage confined
employees
Employees in regu
lar jobs only
7
8
7
1
1
Unknown
Upon selection by
employer
9
6
6
Upon hiring or
after 30 days or
less
9
4
4
Total
Upon service of 3
months or more
Coverage includes or
ployees in regular
4
40
39
1
3
1
4
8
3
4
Upon selection by
employer
Upon service of IK
to 5 years
63
70
67
3
4
4
4
8
4
4
3
2
Upon service of 5
years or more
1 Upon service of 1
year
101
140
128
12
9
7
4
8
10
11
7
3
4
Upon service of 6
months
196
Duration of guarantee
Upon service of 3
months
Total
Total_____________________________ _______
Full year (52 weeks, 2,080 hours, e tc .)____
At full-time hours or pay____________ __
At less than full-time hours or pay ____
50 weeks’ full-time hours or pay
_______
48 weeks’ full-time hours or pay __ ______
47 weeks’ full-time hours or pay________ _ __
46 weeks’ full-time hours or pay
_ _ _ __
40-45 weeks’ full-time hours or pay
__ ____
38-39 weeks’ full-time hours or pay _____ _
13-37 w e e k s _
__ _______
At full-time hours or pay
Upon hiring or
after 30 days or
less
Grand total
i
Coverage open only to employees in
specific departments or occupations
Coverage open to all employees
14
GUARANTEED WAGE PLANS IN THE UNITED STATES
T a b l e 16.— Distribution o f 56 currently operating plans
guaranteeing full-time employment or wages for 52 weeks
a year to all workers upon hiring or upon service of 1 year
or less, by number of covered workers
Number of plans
Number of wage earners covered
Upon hir
ing or after Upon serv
of1 year
30 days or iceor
less
less
Total_____
39
56
Less than 5....... ....................... ................ .......................
5 to 9............................................ .....................................
10 to 24............................................. .............. ................ .
25 to 49.............................................................................
50 to 99_______________ _____________ ______________
100 to 499................................................. .........................
500 to 999._______ _________________________________
1,000 to 4,999______________________ ________________
5,000 and over.
.
........ ........ .............. ..........
Covered employment not available........... ................
5
9
9
10
1
3
5
12
10
15
3
5
1
3
1
1
2
plans. For example, of the group of 128 plans
which guaranteed full-time employment for an
entire year, 39 afforded coverage to all employees
upon hiring or within 30 days thereafter. The
remainder had additional length-of-serviee re
quirements, or restricted coverage to employees in
“ regular” jobs, to employees in specific depart
ments or occupations, or to key employees.
L ISTIN G OF G U ARAN TEED WAGE OR EM PLOY
M EN T PLAN CLAUSES, ILLU STR A TIN G TH E
V A R IE T Y OF METHODS EM PLO YE D TO E X
PRESS GUARAN TEES OF FU LL-TIM E ANNUAL
E M PL O Y M E N T 1
1. The employer agrees to continuously employ_________
union persons * * *. These shall constitute the
basic staff and shall not be subject to lay-offs at any
time.
2. The tenure of employment of permanent employees
shall be 52 weeks in each year without any lay-off
whatsoever.
3. For each full year of service after the first year, 2
months of indemnity in case of complete lack-ofwork lay-off, or 346% hours of straight-time pay in
case of partial lack-of-work lay-off, will be added
to the indemnity or guarantee until, after 6 full
years of service, a maximum of 1 year or 2,080 hours'
indemnity or guarantee is provided.
4. All employees shall receive 12 months of uninterrupted
employment.
5. All steady employees who come under the scope of this
agreement shall be guaranteed steady employment
throughout the life of this contract.
6. The basic gang employed by the employed hereunder
shall consist of 3 mechanics, 2 helpers, and 1 car
washer. Each of such men shall be employed by
the employer for 2,000 hours during the period of
1 year covered by this agreement * * *.
7. All skilled employees covered by this agreement who
have passed their probationary period as herein
before set forth, shall be paid on the basis of 52
weeks per year.
8. * * * each of the said members of the said associ
ation in the employ of the company * * * shall
* * * work not more than 2,000 hours during
50 calendar weeks of the period covered by this
contract. It is the intent of the parties hereto that
the members of the association shall have 2 weeks'
vacation with full pay.
9. Each employee * * * will be offered 2,000 hours
of work during the calendar year. In addition
to offering each employee 2,000 hours of work, each
employee will be given paid time off at times to be
designated by the employer to make this agreement
conform to the 40-hour provision in the regular
contract.
10. The employer guarantees to the 5 maintenance men
named in the contract between the parties, dated
November 1, 1941, not less than 48 hours of work,
or the monetary equivalent thereof, in every week
during the 52-week period which is the term of this
contract.
11. It is further agreed that regular employees be em
ployed 52 weeks per year.
12. Whenever the term “ steady employee" or “ steady
employees" shall be used in this agreement, it shall
refer to such employees of the employer who are
guaranteed under this agreement 12 months' work
in each year during the period of the contract.
13. A salesman may be discharged upon 2 weeks' written
notice by the employer to the union * * *
(slack season, however, shall not be deemed a cause
or a reason for the discharge of a regular salesman).
14. Said employer agrees to employ said employee as
______ for a term of 1 year from the date hereof,
at a weekly salary o f _______
T a b l e 17.— Distribution o f 56 currently operating plans
guaranteeing full-time employment or wages for 52 weeks
a year to all workers upon hiring or upon service o f one
year or less, by industry
Number of plans
Industry group
Upon hir
ing or after Upon serv
30 days or ice of 1 year
or less
39
56
Manufacturing, total.....................................................
7
Food and kindred products..................................
3
Textile-mill products_____________________________________
Apparel and other finished products made
from fabrics and similar materials.........................................
Printing, publishing, and allied industries____
3
Chemicals and allied products....... .....................
1
14
7
32
42
9
14
13
18
Total.
Nonmanufacturing, total. ____ _____
Construction—general contractors.
Wholesale trade____ ______________
Retail trade........ ................................
Real estate..........................................
Communication__________ ________
Heat, light, and power____ ______
Services.____ ____________________
2
1
1
5
1
1
4
1
2
2
1
1
5
15
EXTENT AND NATURE OF GUARANTEE
T a b l e 18.— Discontinued guaranteed wage or employment
T a b l e 20.— Discontinued guaranteed wage or employment
plans covered in Bureau o f Labor Statistics survey, by
number o f covered workers
plans covered in Bureau of Labor Statistics survey, by
duration of guarantee
Number of wage earners covered
Number of dis
continued
plans
Total................................... .............................................................
i 151
Total, excluding 96 plans which operated under Wisconsin
unemployment compensation law, 1934-35_______________
55
Number of
discon
tinued
plans
Duration of guarantee
1151
Total
Less than 5 . ............................................................................... .
5 to 9_ ................................................................
10 to 24__...........................................................
...................
25 to 49_ ..................................................................................... .
50 to 99__.........................................................................................
100 to 499. ........................................................
_ .
_ _
500 to 999....................................................... ............. ....................
1,000 to 4,999_______ I...................................... ............................
5,000 and over_______________ __________ ___________________
11
2
6
6
6
13
3
2
2
Covered employment not available_______________________
UOO
1 Includes 96 Wisconsin plans for which data are not available.
T a b l e 19.— Discontinued guaranteed wage or employment
plans covered in Bureau of Labor Statistics survey, by
eligibility requirements
Eligibility requirements
Total
Total, excluding 96 plans that operated under the Wisconsin
unemployment compensation law, 1934-35__________________
Coverage open to all employees_____________________ _________
Upon hiring or after service of 30 days or less......................
Upon service of 3 months..................... .......................................
Upon service of 6 months_____________ ___________________
Upon service of 1 year____________________ ________________
Upon service of 1^ to 5 years_____________________________
Upon service of 5 years or more___________________________
Upon selection by employer______________________________
Coverage includes only employees in “ regular” jobs___________
Coverage open only to employees in specific departments or
occupations_____________________________________________
Upon hiring or after service of 30 days or less______________
Upon service of 3 months or more_________________________
Coverage confined to key employees__________________________
Number of
discon
tinued
plans
Total, excluding 96 plans that operated under the Wisconsin
unemployment compensation law, 1934-35__________________
55
8
Total, excluding 96 plans that operated under Wisconsin State unemployment compensation law, 1934-35 __ _________ __
3
11
1
4
1 Includes the 96 Wisconsin plans, which are not shown in the body of the
table.
Further examination of the group of cases which
provided the most substantial guarantees to the
broadest groups of workers shows that they were
for the most part cases that involved small or me
dium-sized groups of workers (table 16) and that
more than half of them occurred in wholesale and
retail trade (table 17). The proportion of union
ized establishments was substantially less in this
group than in the entire group of 196 plans.
2
7
i 151
Total
12
1
3
9
Number of
discon
tinued
plans
2
2
0
U03
1102
plans covered in Bureau of Labor Statistics survey, by
industry group
55
3
2
3
0
0
T a b l e 21. — Discontinued guaranteed wage or employment
Industry group
5
8
1 Includes 96 Wisconsin plans operating from 1934 to 1935 under State unem
ployment compensation law which set a minimum standard of 42 weeks’
guarantee (at 36 hours per week in 1934 and % of full-time hours in 1935).
U51
36
16
31
23
Full year (52 weeks, 2,080 hours, etc.)_________________________
At full-time hours or pay_________________________________
At less than full-time hours or pay_________ ______________
50 weeks’ full-time hours or pay___________ _____ ____________
48 weeks’ full-time hours or p ay .._____ __________ .____________
47 weeks’ full-time hours or pay___________ _______ ___________
46 weeks’ full-time hours or pay_______________________________
40 to 45 weeks________________________________________________
At full-time hours or pay_________________________________
At less than full-time hours or pay________________________
38 to 39 weeks’ full-time hours or pay_________________________
13 to 37 weeks________________________________________________
At full-time hours or pay_________________________________
At less than full-time hours or pay________________________
___
___________________ ________ ____________________
44
12
3
Nonmanufacturing, total
_
__________ _________
Bituminous and other soft coal mining________ _ _________
Nonmetal lie mining and quarrying
______ ___
Construction—special trade contractors (subcontractors). . .
Wholesale trade___________ ______________ _____
_ __ __
Retail trade __________ - __ ___________________ ________
Highway freight transportation____________ _ _ _________
Water transportation ___
___________________ - _ _ __
Heat, light, and power__________________ _______ _ ____
11
1
1
1
1
4
1
1
1
4
1
6
3
1
2
1
2
2
3
1
3
1 Total includes 96 plans in Wisconsin for which industry data are avail
able only on the basis of broad industry groupings, and by establishments,
rather than plans, as follows:
N u m ber o f
establishments
B. Discontinued Plans
Total.............................................
A total of 151 plans are known to have operated
in the United States and to have been discontinued
prior to 1946, including the 96 which were in ex
istence for slightly more than 1 year under the
Manufacturing. ---------Transportation, communication, and public utilities___________
Wholesale and retail trade_____________________________________
Finance, insurance, and real estate-------------------------------Miscellaneous services_________________________________________
Educational, religious, medical, etc., services----------------------------Municipal---------------------
55
Manufacturing, total _________ ________ _
____ __
Food and kindred products_________ _____________
Textile-mill products
Apparel and other finished products made from fabrics and
similar materials _ _ __ ________________________________
Furniture and finished lumber products____________
__
__
______________________
Paper and allied products
Chemical and allied products_________________ ____ _______
__________________________ _______
Rubber products
Stone, clay, and glass products___________________________
Iron and steel and their products _______ ______ _______
Nonferrous metals and their products
____ __ _____ ____
_____ _________ ______
Machinery (except electrical) __
Electrical machinery ______________ ____________________
Automobiles and automobile equipment _________________
Miscellaneous manufacturing industries___________________
Industry group
176
21
37
57
25
23
12
1
16
GUARANTEED WAGE PLANS IN THE UNITED STATES
provisions of the Wisconsin unemployment com
pensation law during 1934 and 1935. The discon
tinued plans involved total employment of nearly
180,000, of which approximately 3 percent in
volved the 96 Wisconsin plans and more than 85
percent the plan of 1 large manufacturing concern.
The reasons for their discontinuance have already
been discussed in an earlier section.
The plans that have been discontinued exhibit
no characteristics essentially different from those
of the plans which are still operating. Informa
tion concerning the number of wage earners cov
ered under the plans (table 18), the coverage
provisions and eligibility requirements of the
plans (table 19), and the duration of the guaran
tees provided (table 20), show the same general
picture that has already been presented with re
spect to the plans that are still in operation. As
far as industry distribution is concerned, the dis
continued plans show a substantial scattering
among virtually all of the same industries in which
guaranteed wage or employment plans continue to
exist (table 21). Aside from the 96 Wisconsin
plans, it appears that plans in retail and wholesale
trade were discontinued to a lesser extent than in
other industries.
IV. Experience With Guarantee Plans in 62 Selected Cases
The guaranteed wage and employment plans
that have been introduced in the United States
do not reflect a uniform pattern of motivation,
operating problems, or results. They reflect the
experience of a group of employers and unions
which has attempted to increase the security of
the worker in a variety of situations. In order to
present information on the actual experience of
labor and management operating under guaran
teed wage or employment plans, the Bureau of
Labor Statistics studied in considerable detail the
operations of 62 individual plans— approximately
one-fifth of the group of 347 discussed in part III
of this report.
The 62 plans selected for special study were
chosen to represent as nearly as possible the variety
of individual situations found in the entire group
of cases. Such factors as type of plan, size of
establishment, unionization, industry, and geo
graphical location were taken into account in the
selection of the cases. Because of the small num
ber of plans studied in detail, choice of repre
sentative cases rather than a balanced sample was
the goal. Where there was a choice of alternative
plans the better-known plan was generally selected.
The group is also believed to include the establish
ments in which the greatest degree of employment
regularization was undertaken. The 62 cases in
cluded 47 plans still in operation and 15 that had
been discontinued; 42 in which the employees
were represented by unions at the time the plans
were introduced and 20 in which they were not.
Included were guarantees providing a full year's
work, guarantees limited to less than a full year's
work, and four wage advance plans. The group
included contractual guarantees as well as some
plans which were in actuality little more than
written or oral statements of the employer's
intention to guarantee a certain amount of
employment.
The 62 cases were studied in detail through
plant visits made by field representatives of the
Bureau. Management officials, union officials,
and individual employees were interviewed per
sonally on the basis of detailed schedules devel
oped specifically for this purpose.
Generally, throughout part IV of this report
the cases are discussed as a group without regard
to union status, kind of guarantee, or active status
of the plan, where these characteristics do not
affect the topic under discussion. The cases have
been examined, however, to determine where these
characteristics and others do affect the analysis,
and specific discussion of these facts has been
introduced at relevant points.
A. Circumstances of Introduction
Appraisal of the achievements of the plans can
not be made without a brief background picture
of the variety of situations into which plans have
been introduced; the great range of motives—
many unrelated to the issues raised in current dis
cussions about a “ guaranteed annual wage";
the kinds of specific labor relations and business
problems which the plans were designed to solve;
the immediate occasions for introducing the plans;
and the effects of their introduction upon existing
wages and working conditions.
1 . Pre-Plan Em ploym ent Situations
It has already been indicated in part III of this
report that guaranteed wage or employment plans
were introduced in a variety of industries, both
manufacturing and nonmanufacturing, and by
large as well as small employers. Whether com
panies that have guaranteed employment or
wages had unusual conditions of stable employ
ment which made it possible for them to introduce
guarantees is an important question to explore at
the outset.
Stability of employment is, of course, difficult
to define. It can be measured by the absolute
degree of fluctuations in employment or man
hours; by the regularity of employment variations;
17
18
GUARANTEED WAGE PLANS IN THE UNITED STATES
by the numbers and the kinds of workers affected
by employment fluctuations; by a comparison of
employment fluctuations in one company with
fluctuations in others in the same business; and
by comparison of present fluctuations in employ
ment or man-hours with past experience, present
prospects, or long-run possibilities. It has not
been possible within the scope of this study to
measure the situation in the 62 cases from all of
these points of view. Information was generally
available chiefly with regard to the degree and
character of present and past employment fluc
tuations.
Some fluctuation in both employment and man
hours was anticipated— either from month to
month or from year to year— in each of the 62
cases prior to the initiation of a wage or employ
ment guarantee. No combined measure of these
fluctuations can be satisfactorily compiled, be
cause of the wide range of different individual
situations. The most important conclusion to be
drawn from the employment and man-hours data
collected by the Bureau of Labor Statistics is that
there is a great variety in the kinds and degree of
fluctuation among firms that have had guaranteed
wage or employment plans— probably as great a
variety as exists in all American industry.
It was impossible to determine with precision
whether employment fluctuations in the firms
under study were normally smaller or greater
than in other firms engaged in similar work. In
general, comparisons with broad industry averages
of employment variation were not used because
it was believed that they would yield limited
results; and it was difficult to make specific
comparisons with exactly comparable groups of
individual firms. Nothing in the general business
situations of the firms under study or in their
technical methods of operation was reported,
however, which set them off as a group from other
firms doing similar work. Company and union
officials stated almost uniformly that there was
little or no difference between the situations of
firms under study and those in similar business
activity. Information obtained on employment
and business regularization activities which the
companies had undertaken did not point to the
existence of special situations or exclusive processes
that might have led to greater employment
stability or served to give competitive advantage.
An overwhelming majority of the guarantees, in
fact, were introduced by firms which faced employ
ment stabilization problems of substantially the
same kind that are faced by employers generally.
A more specific idea of the kinds of employment
fluctuations involved in the cases studied can be
best obtained by a review of individual situations,
cited in the following paragraphs.
Monthly Employment Variations.
Month-tomonth fluctuation in employment and man-hours
of work within the year varied substantially from
firm to firm. Among the companies with the
smallest variations were three electric light and
power concerns. Their month-to-month employ
ment varied hardly at all, except as affected by
normal turn-over. Despite substantial fluctua
tions in power production, these companies
reported the continuing necessity for crews of
uniform size to operate productive equipment.
Occasional variations in the monthly employment
level, although not on a recurrent seasonal basis,
were caused by changes in the size of the utilities’
construction programs. In contrast, an ice
cream company studied produced about 80 percent
of its volume for summertime road sales, and,
prior to the introduction of the plan, its operations,
which called for peak employment of about 85
workers during the summer months, required less
than 15 workers in the months from November to
March. A Great Lakes carrier shut down com
pletely when freezing weather set in and seagoing
personnel had no opportunity for winter work
on company operations ashore.
Between these extremes, the firms ran the
gamut of month-to-month fluctuations in em
ployment, as the following examples illustrate:
In the Crocker-McElwain Co. and the
Chemical Paper Manufacturing Co., af
filiated New England paper manufacturers,
employment on direct production operations
was remarkably stable from month-to-month
between 1921 and 1940, because of the neces
sity for a crew of constant size to operate
productive equipment, regardless of volume
produced. Temporary instability of em
ployment was caused by annual water
failures or freezes that resulted in shut
downs. Employment in the auxiliary rag
and finishing departments was much less
stable than employment in direct productive
operations.
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
Employment in the Barlow & Seelig Manu
facturing Co., a midwestern washing machine
firm, prior to the introduction of a plan
varied annually from a spring peak which
rose to 17 percent above the annual average
to a year-end slump 6 percent below.
Month-to-month employment variations
in the small plant of an eastern manufacturer
of men’s and boys’ clothing showed a sub
stantial year-to-year difference in the amount
of seasonal fluctuations: in 1940, from a low
of 47 percent of the annual average to a
high of 125 percent of the annual average;
in 1937, from a low of 20 percent to a high
of 210 percent.
Employment in an eastern chain of readyto-wear apparel stores showed the seasonal
fluctuation typical of this industry: Easter
and Christmas peaks 6 and 18 percent,
respectively, above the annual average and
slumps to about 85 percent of the annual
average during the months of February and
August.
The employment pattern in two midwestern cereal and feed companies followed
month-to-month fluctuations in shipments
of cereals to brokers and wholesalers, declin
ing during spring and summer months and
rising to a peak in the fall of each year.
Prior to employment stabilization efforts
and the introduction of a guarantee, em
ployment in the Proctor & Gamble Co. was
highly unstable. Activity ranged from threeshift, round-the-clock operation to almost
complete standstill.
Erratic receipts of livestock affected pro
duction at Geo. A. Hormel & Co. and caused
wide month-to-month man-hour fluctuations,
which sometimes ranged from 24 percent
above the annual average to 19 percent
below average in the years immediately
prior to introduction of the plan.
Examination of the specific month-to-month
employment stabilization situations faced by the
firms at the time guarantee plans were introduced
reveals a wide variety of business management
problems.
772334°— 48--------4
19
Seasonal weather factors were involved in a
number of the month-to-month employment varia
tions: a sand and gravel operation, a road con
struction firm, and a Great Lakes transportation
company ceased or virtually ceased operations
when freezing weather set in.
The operations of a number of companies
depended in whole or in part on seasonal farm
activity: a canning company relied heavily on the
annual tomato crop for its production of soups and
catsups; and a chemical company’s main product—
fertilizer— was bought largely during spring and
fall planting seasons. Agrarian operations also
affected a meat packer whose production activity
was dependent on farm shipments of cattle and
hogs, as well as a spice manufacturer whose
products sold best during the home canning and
pickling season.
The indirect effects of seasonal weather changes
were the most frequently reported causes of em
ployment instability. Increased spring and sum
mer demand for tires, ice cream, insecticides, beer,
baby carriages, car seats and swings, and construc
tion and maintenance materials were reported to
stand in the way of stabilized employment in firms
manufacturing these products. Activity expanded
during spring and summer months in a fur storage
and repair firm. Another large group of firms
experienced their greatest activity during the fall
and winter months: a battery manufacturer, oats
and cereal companies whose hot cereals sold largely
in winter and were subject to deterioration in
summer, and a southern railroad whose heaviest
traffic resulted from winter tourist trade and fruit
and fertilizer freight. Style changes reflecting
seasonal weather changes affected the operations of
two women’s apparel manufacturers who produced
their specialties in advance of seasonal sales.
Holiday season peaks in consumer purchasing
also affected employment fluctuations: a retail
apparel chain’s employment increased sharply at
the Easter and Christmas seasons; a wholesale
jewelry firm’s employment followed the same
pattern, and frequent style changes made it
impracticable for the firm to package extensively
for stock during slack months of the year; mail
order firms, a variety store, a men’s clothing store,
retail shoe chains, and a department store were
similarly affected. Increased consumer purchas
ing during holiday seasons was also the chief cause
of employment instability in a hosiery, a liquor,
20
GUARANTEED WAGE PLANS IN THE UNITED STATES
and two silverware manufacturing firms, as well as
in a daily newspaper whose advertising volume
fluctuated in direct relation to retail sales activity
in the community.
Purchasing policies of wholesale and distribu
tion firms caused varying amounts of employment
fluctuation. The most noted situation of this
kind was the case of the Procter & Gamble Co.,
whose officials came to the conclusion, after lengthy
investigation, that ultimate consumer demand for
the company’s product was relatively stable from
month to month, and that fluctuations in demand
for the product at the factory resulted from fluctu
ations in wholesale prices and from the purchasing
policies of distributors. In a number of other
companies, including a wholesale grocery concern
and the two midwestern cereal and feed companies,
reduction of annual inventories was also a factor
causing slack periods. In the latter two compa
nies, in addition, wholesalers’ policy of keeping
inventories at an absolute minimum during sum
mer months, when cereals were subject to great
est spoilage, caused the plants’ major annual slack
periods. In two New England paper companies,
a general drop in wholesalers’ activity during the
summer months led to a slight drop in production,
although not to any major fluctuation in employ
ment, because of the necessity for maintaining
crews of constant size to produce at any volume.
Employment variations in manufacturing or
wholesaling establishments in several cases paral
leled the seasonal patterns of the firms to which
their products were sold. A West Coast paper
converter produced largely for the food products
industry, and production operations followed the
seasonal patterns of food manufacture. A button
and buckle wholesaler’s employment pattern took
its course from production fluctuations in the
women’s cloak and suit industry. Textile dyeing
and finishing operations followed textile and ap
parel style changes; production and employment
in the manufacture of construction materials fol
lowed the seasonal pattern of construction activity;
and battery manufacturing operations varied with
model changes in the automobile industry.
Year-to-Year Employment Variations. It has al
ready been noted in part III of this report3
that very few plans were found in the heavy or
basic manufacturing industries that are subject to
8 See page 9.
wide cyclical fluctuations. Information directly
relating to the effects of the 1930-34 and 1937-38
business depressions on employment and man
hours was available in the 8 cases in which the
plans originated before 1931 and were in existence
during the depression of the early 1930’s, and in
the 26 cases in which the plans operated during the
recession of 1937-38. In these cases, the effects
of business depression may have been mitigated by
the existence of a guarantee. It is not possible,
therefore, to trace the situation in each company
back to a pre-plan period which also shows the
effect of depression upon year-to-year operations.
Both the statistical material available and the
reports of union and management officials, how
ever, attest to the positive effects of the depression
of the early 1930’s on business and employment in
most instances. These effects can be appraised
best by citation of specific situations:
In the Crocker-McElwain Co., a New Eng
land paper manufacturer, depression employ
ment reached a low point during the year
1932— during the existence of the plan—
when average annual employment dropped
to 78 percent of the 1929 level, and operating
days for the year dropped to 38 percent of the
1929 level.
In the Detroit & Cleveland Navigation Co.,
freight tonnage declined by 33 percent be
tween 1929 and 1932, and the number of
passengers carried dropped by 67 percent.
No adequate employment records over a
series of years were available from a number
of small retail and wholesale establishments
which introduced guarantees covering basic
crews, but volume of sales and employment
was directly related to volume of consumer
purchasing power available to buy their mer
chandise— furs, costume jewelry, and women’s
and men’s apparel.
Sensitivity to the business recession of 1937-38
appears to have been substantially less prevalent
than the effect of the earlier depression, as was
true in the case of many firms which did not intro
duce guarantees. Most of the firms on which in
formation is available reported no decline of
consequence in business operations or employ
ment during the years 1937 and 1938.
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
Relative constancy of year-to-year employment,
or a sizable, and frequently steady, increase in
employment characterized most of the firms
during the 10-year period preceding 1946. In
some cases increases in employment were the result
of post-depression recovery; in several cases
employment increases since 1940 were attributable
to the effects of the war. Over and above these
causes, however, a number of the companies
demonstrated an expansion in activity and em
ployment resulting from a long-range increase in
demand or from aggressive business management.
Only a small number of firms showed a downward
trend in total employment, resulting in large part
from the effects of the war.
2. Stable Em ploym ent for Part of the Work Force
Despite the existence of varying degrees of
employment instability, as described above, almost
all of the 62 firms were able to give a substantial
degree of stable employment to certain groups of
their employees. Like most employers, they found
it necessary to retain a basic force at all times.
This core of stable employment varied from an
occupational group or a handful of key employees
in some cases to virtually the entire work force in
others. In a number of cases, the size of the stable
core had been enlarged substantially by employ
ment stabilization efforts undertaken during the
years preceding the introduction of the guarantee.
The scope of this study did not permit the elab
orate analysis of pay rolls that would have been
necessary to determine the size of the core of
stable employment in each establishment. The
character of the situation is, however, readily
apparent from several typical cases:
Employees of the three utility companies
surveyed who were engaged in regular power
production operations and in customer servic
ing had much greater stability of employment
than those engaged in the construction of new
power lines or in sales of electrical equipment.
Key employees in an East Coast garment
plant— cutters, foremen, and sewing machine
operators with long service records— had
much more stable employment than did op
erators hired during seasonal peaks.
Labor and management, in several cases
involving wholesale and retail distribution
21
establishments, reached agreement upon the
number of employees whom they regarded as
constituting basic crews, normally required
by the firms to perform regular business opera
tions. Basic-crew size in these cases varied
from 35 percent to 90 percent of total em
ployment.
Prior to the institution of a guarantee, few
of the employees of the Columbia Conserve
Co. had year-round employment. After the
institution of the plan, the employee-owners
of the company, numbering about 100 at the
peak of the plan’s coverage, had much more
stable employment than the temporary work
ers who continued to represent up to 60 per
cent of total employment during canning
seasons.
Temporary workers hired for peak season
operations in a number of other companies—
a road construction firm, a sand and gravel
operation, and cereal and food companies—
obviously had less stable employment than
regular workers. In the case of a large cereal
company, management reported that the ex
istence of a sizable “ cushion” of temporary
help was one of the factors making a guarantee
to the rest of its work force practicable.
In every case, of course, month-to-month em
ployment stability was greatest for employees
with high seniority status.
The majority of guaranteed wage or employ
ment plans in the United States (as has already
been pointed out in part III) limit coverage of
employees or the proportion of annual wages
guaranteed. It is important therefore, to compare
the terms of the guarantees with the extent to
which stable employment was reasonably to be
expected by at least part of each company’s work
force without a guarantee. Such comparison can
be made only roughly, of course, and must be
based in part on employment data and in part on
the judgments of company and union officials as
to the intent and significance of the guarantees at
the time of their introduction. Analysis of this
type indicates that in some cases the guarantees
can be said to have assured more, in some cases
equivalent amounts, and in some cases less stable
employment or income than the workers possessed
without guaranteed wages or employment.
22
GUARANTEED WAGE PLANS IN THE UNITED STATES
Greater employment or income stability than had
existed in the past was expected in cases where
the employer consciously decided to keep skilled
workers during slack seasons, where the plans
were designed as unemployment compensation
devices and wage earners were paid for lay-off
periods, and where, as in the case of the Hormel
Co. and the Seaboard Air-Line Kailway, and a
master contract covering Cleveland fur repair
workers, the plan inaugurated a new stage in em
ployment stabilization efforts as well as a guaran
tee. In a small number of cases, the plans clearly
guaranteed less employment than was already
provided without a guarantee. A New England
utility company, for example, guaranteed 2,000
hours of employment under Section 7 (b) (2)
of the Fair Labor Standards Act, which was less
than total annual working hours had been in the
past. In other cases, guarantees covering in
dividual groups of skilled workers were introduced,
no consideration being given to the possibility of
covering others— even those with the longest ser
vice records— whose employment opportunities
were equally stable.
The majority of the guarantees were not framed
to go beyond the degree of employment stability
that management and labor already believed to
exist in the establishment, or which had been
achieved after a program of employment stabiliza
tion. Employers, in most of the cases, believed
that they were taking little or no financial risk in
instituting the plans. Their attitude in this
respect may in some cases have been influenced
by the fact that their plans were largely introduced
during periods of rising business activity, when
their sights were fixed upon an optimistic future
rather than upon past periods when the same
guarantees might have involved greater risks.
Labor unions did not as a rule press employers
into assuming heavy obligations, and were them
selves, in many cases, seeking security for only
small groups of workers. How far the guarantees
could have gone beyond what was actually given
in amount and coverage without going outside
the bounds of existing stable employment was in
most cases a matter of conjecture that could be
treated only by extended individual case analysis.
3. Previous Efforts to Stabilize Employment
In approximately one-third of the cases the
firms reported attempts to minimize or eliminate
employment fluctuations prior to the adoption of
their guarantee plans. In the remainder of the
cases, the employers had concluded that their
employment problems were beyond their own
control or had been solved as far as was feasible,
or that they could work out only limited plans
within the existing framework of employment
fluctuations.
Even where a program of employment regu
larization or stabilization had been undertaken
prior to the introduction of a guarantee, it was
usually done with no specific intention of laying
the ground work for a guarantee. Such was the
case, for example, in one of the utilities, which
had for years been studying its operations with a
view to the elimination of fluctuations within the
year. Much of its program centered around the
regular replacement of equipment, an activity
previously done almost entirely on an emergency
basis and resulting in somewhat erratic fluctuations
in man-hours and employment. A rubber com
pany tried to lift low winter demand for tires by
a program of consumer education. In these and
other cases like them, employment stabilization
programs had generally been part of company
policy for years, undertaken as a matter of good
business administration rather than for the specific
purpose of laying a foundation for an employment
or wage policy. This planning, nevertheless, had
the effect of increasing the number of workers to
whom stable employment was available and who
would eventually be covered under the guarantee.
A small number of companies consciously
undertook to stabilize employment with a fairly
concrete idea in the minds of management officials
that they were laying a foundation for some kind
of guarantee plan. This group consisted largely
of the companies most famous for their plans,
which on the whole, guaranteed substantially
more, either as to length of employment or number
of workers covered, than most of the other and
less well-known plans.
As was to be expected, employment regulariza
tion programs of some kind were reported in most
of the medium-sized and larger companies studied,
and were absent among most of the companies
that employed less than 250 workers. Among
the establishments having guarantee plans cover
ing more than 500 workers, some degree of pre
plan stabilization or preparation was reported in
all but two cases— the Seaboard Air Line Railway
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
Co. and the ffm . J. Wrigley, Jr., Co. In the
case of the Seaboard Air Line Railway the in
auguration of the guarantee ushered in an im
portant employment regularization program, with
out which it would have been impossible to effect
uate the guarantee; in the case of the Wrigley Co.
production was considered to be stable, and the
company’s inauguration of an “ income assurance”
plan in 1934 was specifically designed as an
unemployment compensation measure.
Since most of the stabilization measures under
taken were part of general company program,
not specifically related to the introduction of a
guarantee, they were outside the scope of collective
bargaining activity. Unions or employees were
not initially informed of regularization actions
taken by management. In several instances,
management preferred not to raise the question
of a possible guarantee until the results of em
ployment regularization were clear or until
management had formulated the exact kind of
guarantee it planned to introduce. In a few other
instances, the most noted example of which was
the Nunn-Bush Co., management officials followed
a deliberate policy of discussing their employment
stabilization problems and their hopes for the
introduction of a guarantee with employees or
union representatives. They did this as a matter
of good labor relations policy, to draw out em
ployee ideas, or to develop cooperative labormanagement efforts directed at increasing and
leveling out production. Even in such cases,
however, virtually all of the actual employment
stabilization planning was done by management.
The cases in which the guarantees were pre
ceded by employment regularization were, with
two exceptions, cases in which management later
bore the responsibility for initiating the plan.
Little pre-plan employment stabilization was
reported in the cases in which union action initiated
the idea of a guarantee. Most of the unioninitiated plans were in small establishments,
where the opportunity of an individual employer
to regularize was extremely limited, and where the
achievement of uniform working conditions, in
cluding a guarantee, under a master labor agree
ment was in itself a stabilization measure in the
industry.
The specific stabilization measures taken,
whether or not they were designed to lay the
23
foundation for a guarantee, cover a wide variety
of business actions in the fields of production
and distribution. Some, like production for
stock, deferring of maintenance activity until
slack periods, and control of distribution channels,
are frequently cited in the literature on manage
ment regularization. All were to some degree
hand-tailored to meet the needs of individual cir
cumstances. A picture of these activities can be
given best through a series of individual descrip
tions:
A Minnesota manufacturer of window and
door frames had for years, prior to the intro
duction of a wage advance plan in 1939, spread
production of windows and doors throughbut
the year, primarily by the use of long-term
building industry forecasts and production of
standard items for stock during the winter
months when demand was low. Much of the
production for stock involved the manufacture
of unassembled parts, a procedure that min
imized the amount of capital tied up in
inventory. Improvements and maintenance
repair work had regularly been timed to coin
cide with the winter production slump.
Industry forecasts were also used by Geo.
A. Hormel & Co., meat packers of Austin,
Minn., in stabilization studies which were
conducted for 4 years prior to the inaugura
tion of their guarantee plan. Week-to-week
receipts of livestock, which determined the
level of plant operations, were found to be
unpredictable, and little actual regulariza
tion of employment resulted prior to insti
tution of the guarantee. Officials found,
however, that it was possible to forecast
total annual receipts with a high degree of
accuracy, by the use of long-range crop,
weather, and market reports. It was, there
fore, determined to base a worker’s annual
wages on his estimated output, such wages
to be received in regular weekly payments
while his working hours continued to
fluctuate.
Employment practice prior to 1932 at
McCormick & Co., Baltimore, Md., manu
facturers of spices and food specialties, in
volved three annual seasonal lay-off periods.
24
GUARANTEED WAGE PLANS IN THE UNITED STATES
Beginning in that year, and continuing until
1936 when its plan of assuring 48 weeks of
work a year was inaugurated, the company
undertook a program of employment regu
larization which is reported to have eliminated
all three slack periods. The specific stabiliza
tion steps included {a) analysis of seasonal
sales periods, and persuasion of customers,
wherever possible, to level out purchasing
peaks; (b) improvement of sales forecasts, and
planning of production in accordance with
these forecasts; (c) establishment of a floating
crew of workers who could be readily shifted
from one department to another, to supple
ment the work of regular departmental staffs
during peak load periods; (d) flexible transfer
of labor among departments resulting in
special attention to training employees for a
variety of jobs, and hiring on the basis of
general skill level rather than for specific as
signment; (e) improvement and decentraliza
tion of warehouse facilities, to accommodate
production for stock; (f) market research de
signed to have on hand new products that
could be put into production in the event of
declines in demand for established lines; (g)
advance agreement between company man
agement and stockholders to forego profits
during individual months or quarters, if
necessary to keep employees on the job,
rather than the discharge of employees to be
sure that profit records would appear uni
formly good.
Employment planning at the Namm Store,
a popular-price department store in Brook
lyn, N. Y., began during the depression of the
early 1930's. Supported largely by working
men's trade, the store's sales were hard hit by
the depression, and management took a
series of economy steps. Whereas unplanned
staffing of departmental operations, coupled
with erratic hirings and lay-offs of varied size
had been the store's prior practice, the atten
tion of planning officials was now concentrated
upon job classification, rate evaluation, and
personnel budgeting. Budgeting was worked
out in detail, particular attention being given
to allocation of staff on the basis of past
records of departmental transactions and
floor space utilized. As a result of this plan
ning, employment of year-round personnel
was substantially stabilized, and the manage
ment of the store became convinced that it
could add a guarantee to its employment
policies. In fact, management felt that its
employment base was established soundly ,
enough to enable the store to continue a
guarantee through another depression, with
normal labor turn-over serving as a cushion
of safety.
The Nunn-Bush Shoe Co.'s stabilization
program started with the regularization of
distribution. As early as 1918, the company
joined with others in the manufacturing in
dustry to change existing sales policies. At
that time, factory salesmen were writing
orders sufficiently large to load retail cus
tomers with stocks that would last throughout
entire seasons, partly to prevent the purchase
of competing merchandise. Under the new
sales policy, customers were sold small initial
orders, with prompt service on re-orders.
Warehousing facilities were developed and
stocks were built up to ensure prompt deliv
eries. Shortly after World War I the NunnBush Shoe Co. itself entered the retail busi
ness, and at the time of this study was selling
about 30 percent of its production through
about 100 retail outlets. Concurrently, the
company developed a complex inventory con
trol system, partially as an aid to successful
planning of its production and inventory poli
cies. Records of past sales, as well as informa
tion on consumer preferences supplied by the
retail outlets, have helped it to adjust total
and individual model inventory levels with
the aim of leveling production. By 1935, when
the guarantee was introduced, the company
had substantially minimized seasonal varia
tions in production.
Additional actions reported were the offering of
special terms to out-of-season buyers in the case
of companies manufacturing men's apparel, rubber
products, and baby swings and carriages; block
selling of a combination of women's coat and suit
styles in advance of seasonal operations by a
women's apparel manufacturer; development of
cold cereal lines to be produced during spring and
summer seasons, when production of hot cereals
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
was at a low point, by a midwestern cereal com
pany. The descriptions given above are necessarily
incomplete, because most firms probably did not
report fully the employment stabilization activities
which they regarded as a regular part of their
business policies.
The measures taken prior to the inauguration
of the plans— even those taken to effectuate the
meeting of the guarantees after the plans were put
into operation— never eliminated completely the
variations in employment and man-hours that
existed to a greater or less degree in all of the firms
under study. As has already been pointed out,
most of the plans were based on management and
labor acceptance of substantial variations in em
ployment and mali-hours. Furthermore, in many
instances there was admittedly no expectation that
introduction of a guarantee plan would contribute
to stabilization of income or would extend the area
of stable employment opportunities.
4, Responsibility for Initiating Guarantee
Three-fifths of the 62 plans studied were intro
duced on management initiative; one-third were
introduced as a result of union requests in collec
tive bargaining, and unions and management
shared responsibility for their introduction in
three cases. The history of guaranteed wage and
employment plans is to a considerable degree the
history of the pioneering of individual men. In
at least three-fifths of the cases in which manage
ment was the initiator, the plan resulted from
personal action by one or two individuals in the
company— the owner, president, vice-president, or
other important management official— who regu
larly gave personal attention to employee welfare
and labor relations. In most of these cases, the
official bearing responsibility for introduction of
the plan had a controlling ownership connection
with the enterprise.
Predominant management responsibility for
initiation of the plans resulted in part from the
fact that in about one-third of the cases, there were
no unions representing the employees at the time
the plans were introduced. Where unions rep
resented, the employees at the plan’s inception,
union initiation of the idea of a plan occurred in
slightly more cases than employer initiation:
unions proposed 21, employers initiated 18, joint
responsibility was involved in three. Union ini
25
tiative seems to have been largely a matter of
local bargaining. Policy or special attention of
the international union was involved in only a
limited number of cases.
Union-iifitiated plans occurred for the most
part in the smaller establishments, or in depart
ments of medium-sized establishments where the
unions sought guarantees for small groups of
workers. Exceptions to this observation were a
system-wide plan covering about 2,300 AFL rail
way shop workers on the Seaboard Air Line Rail
way and a plan covering about 500 workers, em
bodied in a contract between the Int’l. Ladies’
Garment Workers’ Union and a women’s apparel
manufacturer in Milwaukee, Wis. Even where
the establishments were small, or the coverage
limited, however, the total significance of the
union-initiated plans was greater than appears,
because most of them were in firms that were
party to master contracts covering substantial
groups of similar concerns in the same metropoli
tan area. Such was the case with wholesale but
ton and jewelry establishments, fur merchants,
textile converters, shoe and apparel retailers, and
breweries in New York City, and with fur repair
establishments in Cleveland. Others were not
master contracts, but were typical of similar
agreements that had been achieved by the union,
as in the case of contracts between maritime
unions and the Detroit & Cleveland Navigation
Co., which typified a group of similar plans on
the Great Lakes, and contracts of the Machine
Printers Beneficial Ass’n. with two textile print
ing firms, typical of a larger number covering
small groups of printers in textile dyeing and
finishing establishments.
5. Objectives o f the Plans
The purpose most frequently reported for the
introduction of the plans was a desire to add to
employee security or sense of security by guaran
teeing regularity of employment or income. A
great variety of additional considerations were
cited, in many cases as important as the desire to
provide security. For example, the desire gen
erally to improve labor relations; to stabilize em
ployee income; to use a guarantee as a device for
further stabilization of employment; to keep
trained employees in order to reduce turn-over and
training costs; to increase worker efficiency; to
26
GUARANTEED WAGE PLANS IN THE UNITED STATES
prevent reduction of productivity on the eve of
slack periods; to establish a fixed employment
policy at top management level that would re
move control over employment from the hands of
plant or departmental supervision; maintenance
of a certain number of positions not subject to
lay-off; reward for length of service; spreading of
work among union members with the greatest
seniority; forestalling of unionization; and the in
troduction of a wage advance system to enable
employees to avoid the red tape of the usual loan
arrangements. Although the desire to avoid the
overtime payment provisions of the Fair Labor
Standards Act was reported to be a consideration
in some cases, the total effect of inducements pro
vided by legislation— unemployment compensa
tion merit rating provisions and Section 7 (b) (2)
of the Fair Labor Standards Act— was minor.
Within individual establishments, the motives
cited above appeared in a great variety of com
binations too numerous to list. It is significant,
however, to note that the desire to stabilize em
ployee income was reported as a major considera
tion in only about half of the cases studied. In
cluded in this group were the wage advance plans,
and a number of other plans in which the employ
ers had consciously undertaken to pay skilled
workers for time not worked during slack seasons
in order to retain their services for periods of peak
operations, and thus avoid much of the expense
involved in hiring and training new workers.
In the case of the Detroit & Cleveland
Navigation Co., for instance, agreements
were made to carry marine personnel on the
pay roll during the freeze-over season on the
Great Lakes— dating as far back as 1919 in
the case of licensed officers. The initial agree
ments of this type were proposed by the unions
with the intent of stabilizing the income of
their members, and management readily
agreed that income stabilization would assist
them in avoiding turn-over.
In the case of a small roadbuilding com
pany in Washington, D. C., a group of regular
employees were guaranteed earnings and
kept on the pay roll the year round in order
to ensure presence on the job at the start of
major projects in the spring.
In slightly fewer than one-quarter of the 62
cases studied, the plans' initiators intended at the
time the plans were undertaken (in addition to the
stabilization of income, of course) to embark upon
or broaden employment stabilization efforts with
a view to widening the area of stable employment
opportunities and laying a solid foundation for the
guarantee.
This was the case in the Hormel Co., for
instance, whose plan was designed in large
part to even out income during the year, but
had as an equally important purpose the re
tention on the pay roll of departmental crews
of balanced composition and size, to whom
work would be provided by every employ
ment regularization effort that management
could employ.
In the case of the Seaboard Air Line Rail
way, both company and union intended, at
the initiation of the plan, to eliminate the
variations in employment that had been
caused by relatively unplanned budgeting of
maintenance and repair work.
In the case of the master agreement of the
Cleveland Fur Workers' Union with fur repair
shops, the union's intention in obtaining a 38week guarantee was to force several employ
ers to level out work peaks during the year.
Differences in Union and Management Objectives.
In three-quarters of the cases where the initiative
for the plans had come from union representatives
(or about one-quarter of all the cases), employers
reported an initial indifference to the guarantee.
This attitude arose chiefly from management's
belief that the union-proposed plans did nothing
more than write existing practices into contracts,
and that they could be undertaken with little or
no financial risk. This was the case, for example,
in basic crew contracts negotiated in New York
City covering wholesale and retail establishments,
and in a case involving a large automobile sales
and service company whose owners, in negotia
tions with the United Automobile Workers (CIO),
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
agreed to a guarantee covering automobile me
chanics, although they had refused to grant the
union’s full wage request. Management’s atti
tude was lukewarm at best in the case of a Cleve
land fur repair shop, where inauguration of the
plan meant that shop activities would have to
be spread more evenly throughout the year. In
two other cases, however, where effectuation of the
plan required further leveling of activity during
the year, management took up union proposals
and translated them into further stabilization
activities.
Where the initiative for the plan came from
management in unionized establishments (which
was the situation in about a third of all the cases),
union and management were usually in agreement
on basic objectives. These were, for the most
part, cases in which the companies had wellestablished programs of employment regulariza
tion. In the Hormel, Nunn-Bush, Wisconsin
Public Service, and National Oats cases, for
example, management and labor were in complete
agreement on the basic objective of furnishing
security to the workers. In each of these cases, of
course, management also hoped to gain from the
plan some form of contribution to productivity
that would improve the general business situation
of the company.
In several cases, where plans were instituted
through collective bargaining, management objec
tives were substantially different from union
objectives. Union aims were generally continuity
of income, employment, and security for the
workers to be covered. Management sought to
avoid requested wage increases, to take advantage
of the overtime exemption afforded by Section 7
(b) (2) of the Fair Labor Standards Act, to in
crease productivity during slack periods, and to
keep a supply of skilled workers on hand during
slack periods or seasonal shut-downs.
In the case of a small manufacturer of
custom furniture in New York City, the
company gave a 3-day-a-week guarantee,
which it believed could be done with no risk
whatever, for the stated purpose of prevent
ing a wage increase. The union’s interest in
the plan was security of income for its
members.
772334°—48------5
27
The Barlow & Seelig Manufacturing Co.,
when it granted a minimum annual wage
guarantee to employees represented by the
United Steelworkers of America, was in
terested largely in the overtime exemption
afforded by Section 7 (b) (2) of the Fair Labor
Standards Act, while the union, which had
initiated the idea for the plan, was interested
in security of income.
A New England utility company, in insti
tuting its guarantee by agreement with an
independent union, was exclusively concerned
about the possibility of continuing the regular
salary payments it had theretofore been
making, and the avoidance of penalty over
time payments under Section 7 (b) (2) of the
Fair Labor Standards Act. Employees and
union were interested in the possible security
the plan might afford.
Where there was no collective bargaining agency
at the time of initiation, desire to give security
was the most frequently reported motive, and
desire to provide conditions that would retain or
attract skilled workers was the next most fre
quently reported, as in the following cases:
A Baltimore silver firm guaranteed employ
ment to skilled silversmiths to induce them
to come from New England, and paid their
transportation expenses as well.
An ice-cream company guaranteed employ
ment over the slack winter months to a
selected group of key workers whose presence
when production resumed the following spring
would minimize the starting-up and training
problems that the firm had faced in past
seasons.
An automobile repair company instituted
a guarantee during the war to keep its
mechanics from going off to war plants.
Objectives of guarantee plans have occasionally
been expressed to be the eventual recognition
of labor cost as a fixed cost of operation, com
parable to overhead cost and not varying directly
with production volume. Many managementv
officials who have guaranteed employment have
28
GUARANTEED WAGE PLANS IN THE UNITED STATES
consciously refused to accept this approach. One
official in a company which has carried on an
extensive employment stabilization program, for
example, has stated repeatedly that employers
should try to do everything practicable to “ assure”
employment, but that they should not think in
terms of “ guarantees.” A majority of the
management representatives interviewed voiced
no theoretical convictions on the question, regard
ing their own guarantees of employment or wages
as practical business investments to obtain im
proved morale, lowered turn-over, a better work
force, and greater production. Several officials
were reluctant to classify their plans as “ employ
ment guarantees,” or as “ annual wage plans”
at all; they looked upon them as good employment
policies and sound business procedures or, in a
few cases, merely as contract provisions pro
hibiting lay-off, to which they disliked to apply
such designations.
Influence o j Legislation. Although eight of the
companies at some time during the existence
of their plans took advantage of the provisions
of Section 7 (b) (2) of the Fair Labor Standards
Act, the overtime exemption afforded by section
7 (b) (2) was a motive influencing only five plans,
and the primary motive in only one.
At least 8 of the 15 plans introduced prior to
1935 were designed in part to provide unemploy
ment compensation benefits in the absence of
governmental legislation. After the passage of
State laws, the possibility of tax reductions under
merit rating provisions served as an attraction in
one case. A plan introduced in 1939 was intended
in part to supplement the protection of the unem
ployment compensation laws. In one case, man
agement's belief that the Government might even
tually impose an obligation to guarantee employ
ment was cited as a contributory reason for the
introduction of a plan.
6. Extent o f Planning at Time o f Introduction
Analysis of employment fluctuations, sales, pro
duction policies, or distribution methods at the
time of adopting a guarantee plan was in most
instances closely related to pre-plan employment
regularization experience. Normally such plan
ning was done by established technical divisions
of management, although there was substantial
labor participation in the Hormel, Nunn-Bush,
and Seaboard cases. Personnel offices supplied
records of employment fluctuations; sales offices
supplied data on fluctuations resulting from varia
tions in demand and on the development of new
products and distribution channels; production
officials developed specific programs connected
with maintenance activities, storage of finished
products, and the reservation of certain work
assignments for slack periods. In only one case
was the employment of outside engineering help
reported to the Bureau. The planning and even
the analysis of detail was handled personally by
the owner or a top management official in several
of the cases. The most extensive planning was
done by those companies whose guarantees as
sured the most in terms of duration of employment
or coverage of workers.
The planning referred to above does not include
cases which involved only a calculation of prob
able cost made immediately prior to the introduc
tion of a guarantee. These calculations were
quick cost estimates made to ascertain the risk
involved in meeting a guarantee or to set a limit
to the company's financial obligation. Typically,
they consisted of a review of pay roll for the last
several years, to determine what the cost of a
guarantee would be to certain individuals or to a
certain class of employees if they were paid for
time which they had not worked during the pre
vious period. In most of the cases, management
relied only upon the accumulated business and
industrial relations experience of its officials.
A handful of the more recent plans were intro
duced after their originators' study of the betterknown plans previously in existence. In a num
ber of cases, management officials reported that
they had studied the characteristics of the Hormel,
or Nunn-Bush, or Procter & Gamble plans. No
recognizable carry-over could be seen in any of
the cases studied, however, leading to the conclu
sion that most of the guarantees were basically
developed in independent fashion to reflect the
particular objective or to take account of the
particular stabilization problem confronting the
individual firm. Similarities among plans seem
to have been due chiefly to union extension of the
principle of stabilized wages or employment to
other firms under contract.
7. Effect on Wages and Working Conditions
An overwhelming majority of the plans were
introduced into an atmosphere of good labor rela
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
tions, and in most cases where collective bargain
ing had a history of many years. In 42 of the
cases studied, employees were organized in unions
at the time of the plan's introduction, and, in
an additional 4, unions came to represent em
ployees during the existence of the plan. In
two-thirds of the cases where unions represented
employees, the unions were affiliated with one of
the two major federations; one-third were inde
pendents. In several cases, as has already been
noted, desire to promote sound labor relations
was advanced as an important specific reason for
the introduction of a guarantee. In one such case,
where past labor relations had been bad, the plan
was regarded by both company and union as an
indicator of future smooth labor relations, and as
evidence of management's intention to maintain
a labor force of designated size in the community.
Whether plans introduced in the absence of
union bargaining rights were designed in part to
head off or combat union activity is not ascer
tainable except in a very few cases. From the
demonstrated interest of management in the
problem of employment security, it appears that
this could not have been an important motiva
tion. It was reported to be a factor in four cases,
three not involving an immediate organizational
campaign and one involving a serious labor dis
pute.
The last case concerned the Crocker-McElwain
Co., whose plan was introduced in 1921 during the
Nation-wide “ open shop" drive. Management
officials were interested in providing employment
security, but also believed that it was equally
important to advance the principle of the open
shop. Accordingly, they proposed both a yearround wage guarantee and a system of individual
employee contracts. The union which represented
the company's employees objected to the indi
vidual contracts as well as to certain features of
the guarantee and went on strike. The company's
plan went into effect after the union lost both the
strike and its bargaining rights.
The introduction of guarantee plans did not
generally result in changes in wage or working
conditions beyond the achievement of greater
employment security, or in failure to make changes
that would have taken place had the guarantees
not been introduced. Generally, the introduction
of a guarantee plan meant the achievement of a
new* employment condition over and above other
*
29
existing worker benefits. An examination of union
contract provisions in plants which had guarantees
does not reveal significant deviation from the
kinds of contract provisions relating to union
security, seniority, work transfers, and other
conditions of work usually negotiated in the
absence of guarantees, except in the case of the
contract between the Nunn-Bush Shoe Co. and
the Industrial Union of Master Craftsmen. This
contract, in addition to defining a radically
different method of wage payment, gave union
officials the right to approve or reject the em
ployment of new workers or the addition of new
manufacturing operations, and provided that the
cost of teaching an employee a new operation be
deducted from his compensation.
Changes in existing conditions did take place in
five cases at the time the guarantees were intro
duced; in three of them, the arrangement was
made by agreement with the union representing
the employees. In two cases, overtime pay was
given up in return for the guarantee; in one of
these, involving a textile finishing company, the
union also relaxed its restrictions against thirdshift employment; in the other, involving a daily
newspaper, the union waived its usual contract
requirement for employment of extra workers for
overtime hours. The Int'l Ladies' Garment
Workers' Union agreed to a wage reduction in the
case of a New York apparel manufacturer, and also
consented to reduce the number of workers there
tofore required by custom in the shop, in return
for a guarantee bolstered by company deposit of
a bond and a commitment to restore the original
wage level in the event the company ended the
guarantee. The introduction of a guarantee in the
Crocker-McElwain Co., previously cited, resulted
in loss of bargaining status by Eagle Lodge No. 1
of the Int'l Bro. of Paper Makers. (AFL). In
the case of Berkshire Knitting Mills, a group of
skilled production employees in 1936 proposed to
accept somewhat lower piece rates, at levels
below established local hosiery industry standards,
in return for a guarantee of longer hours and a
resultant higher annual income than during the
immediately preceding depression years. This
plan was approved by the employees and their
employees' association, but the union that was
attempting to organize the plant at that time
opposed it as a lowering of industry standards.
In five additional cases, guarantee plans were
30
GUARANTEED WAGE PLANS IN THE UNITED STATES
introduced as complete or partial substitutes for
requested wage increases that employers had
refused to grant in collective bargaining negotia
tions. No loss in wage levels or changes in other
working conditions occurred in these cases.
In two cases, radical changes in method of wage
payment were instituted at the time of the plan’s
introduction. In the case of the Nunn-Bush Shoe
Co., the introduction of an employment guarantee
was designed to shift the basis of compensation
from a system of payment by the hour to a system
of guaranteed employment with pay determined
by the course of major production trends. Under
the new system, hourly wage rates were abolished
and a system of evaluated base rates established,
not for the purpose of determining actual pay
levels, but to establish sharing ratios for workers
of different skills. The Columbia Conserve Co.,
when establishing its plan in 1917, placed em
ployees to be covered by the guarantee on a weekly
salary basis, with salaries determined by marital
status and family size rather than by job, intro
duced a profit-sharing plan, and gave employees
a voice in management of the business.
The firms involved in the 62 cases have, with
very few exceptions, provided as liberal or more
liberal employee benefits and maintained as high
or higher wage levels than comparable firms in
the same industry and area. As far as hourly
wage level is concerned, there was general agree
ment on the part of company and union officials,
supported in many instances by the statements
of local United States Employment Service offi
cials responsible for plant recruitment and by
comparisons with wage data available in Bureau
of Labor Statistics files, that wage rates were in
line with prevailing levels; in a few cases, the
firms occupied positions of wage leadership.
Vacation pay was almost universal in these
companies, and several firms gave more than the
typical industry practice of 1 week for 1 year and
2 weeks for 5 years of service. Pay for holidays
not worked, usually covering 6 or more holidays
during the calendar year, was granted in twothirds of the cases.
Company-financed sick
leave and insurance plans, or time-off provisions
for sick leave, were common. One-third of the
firms had pension plans, and slightly more than
one-fifth had profit-sharing schemes. The va
riety of plans and the multiplicity of combinations
makes it difficult to state with exactness the re
lationship of the companies under study to in
dustry in general, but it is clear from the wide
spread existence of “ fringe” or collateral practices
that firms which have guaranteed employment
or wages are also in the forefront of American
management practice with respect to other
conditions of employment.
B. Outstanding Features of the Guarantees
Under the plans the employers generally
agreed to provide work equal to the extent of
their guarantees, or equivalent pay when there
was no work, but did not agree to pay without
regard to attendance or work performance.
The guarantees were based on the concept that
a worker must be available to work when work
is provided, and were usually inapplicable if the
worker was absent or if he was incapacitated as
a result of accident or sickness. In other respects,
as in the case of rules governing transfers and dis
charges, the plans operated within the framework
of established or negotiated plant policies that
were not appreciably different from practices in
companies which did not guarantee wages or
employment.
1, Character o f the Obligations Assumed
The basic features of the plans have already
been described in part III, and are set forth in
detail in the appendixes to this report. A variety
of eligibility and benefit provisions, in a variety
of combinations, were the plans’ chief character
istics. The combined effect of these provisions,
in most of the cases, was to provide something
less than a full year’s guarantee to substantially
less than the entire work force.
The nature of the plan was in some cases
dictated by the employment stabilization problem
which the firm faced. In the Hormel case, for
example, the payment of a guaranteed wage
each week was based upon a finding that fluctu
ations in weekly working hours could not be
reduced to manageable proportions, but that
the annual volume of work was predictable;
the same considerations gave rise to the continu
ation of a fluctuating workweek, with weekly
overtime pay for the most part on a straight-time
basis; the unlimited coverage feature of the plan
was based upon careful advance personnel budg
eting of the number of jobs estimated to be
required for a reasonably predictable annual
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
work load. Use was similarly made of the partial
overtime pay exemption afforded by Section 7
(b) (2) of the Fair Labor Standards Act by several
other firms whose annual volume was more
stable than their volume from week-to-week or
from month-to-month.
For the most part, however, the variety of
provisions relating to length of employment
guaranteed and eligibility were reflections of
management decisions concerning the extent of
their commitments, of compromises made in
collective bargaining, of the installation of guar
antees into establishments with varying union
security and seniority provisions, and of the
individualistic drafting of the plans. Length-ofservice eligibility provisions were also in many
cases reflections of broader personnel policy which
emphasized length of service, or of management's
specific desire to provide a larger degree of
security for those workers whom management
regarded as the most essential.
The guarantee in most cases was based upon the
employer's assumption of an obligation to provide
fulLtime work throughout the year or, in the case
of limited guarantees, work for a fraction of the
year. There was no obligation to pay on a fixed
annual monetary basis except in two cases,
although the obligation to provide a certain
amount of work at the employee's regular rate of
pay was tantamount to a fixed wage guarantee if
the employee worked throughout the guarantee
period. In 40 percent of the cases, the plans
contained no specific language obligating the
employers to make up the full guarantee by paying
for time not worked if sufficient work was not
provided. The assumption usually appeared to
be that sufficient work would be available, and
in most of the cases, this has been true. It also
appeared to be assumed or implied, although not
stated explicitly, that the employer's obligation
to provide work required that he pay at regular
rates when he did not provide work. In almost
all of the cases in which such employers were not
able to provide work, payment was made. Em
ployers occasionally referred to such occasions,
however, as crises whose prolongation might have
led to revision or abandonment of the plans,
rather than as part of normal operation. In four
of the cases, however, (two of which involved
union agreements), the employer specifically re
served the right not to pay in the event that lack
31
of work forced the company to lay workers off.
These four firms “ assured" rather than guaranteed
employment and committed themselves in writing
to do what they could to provide it.
In slightly more than half the cases, including
the Hormel, Wisconsin Public Service, and other
important guarantees, the plans clearly provided
that management had assumed an obligation to
meet the full amount of the guarantee even
though this required payment for time not worked.
This group also included six cases in which the
guarantee was expressed as a prohibition against
lay-off rather than as a positive guarantee and
several of those in which employers consciously
subsidized skilled workers for time not worked
during slack periods.
The four wage advance plans, uniformly intro
duced to provide greater stability of income rather
than a specific guarantee against lay-off, obligated
the employers to advance wages during times of
slack work, while the employee was still on the
pay roll, and provided that the wages thus ad
vanced be repaid during weeks when hours of
work increased. Each of the four cases provided
a different rule to govern the extent to which
wages could be advanced. In one case, employees
could receive the difference between actual earn
ings and 60 percent of regular weekly earnings
(computed on the basis of a 40-hour week); in
another, the difference between actual earnings
and 40 hours' pay a week; in the third, the differ
ence between actual earnings and 30 hours' pay
a week; and in the fourth the difference.between
actual earnings and varying amounts, depending
upon length of service and number of dependents,
ranging from 40 hours' pay over a half-month pay
period to an unlimited amount. Minimum eli
gibility requirements were 6 months, 2 years, 3
years, and 5 years of service. Repayments of
wage advances were made by deductions from
future earnings: in one case by automatic deduc
tion of one-half pf earnings during weeks in which
the worker was employed for more than 24 hours;
in another by deduction when working hours were
above 40 per week; in the third by repayment of
half the employee's earnings for hours over 30 a
week; in the fourth by repayment of all hours in
excess of 60 hours' work in any semimonthly pay
period.
The financial obligations involved in guarantee
ing wages or employment were completely as
32
GUARANTEED WAGE PLANS IN THE UNITED STATES
sumed by the employers in every case. One
company, which guaranteed 1,800 hours’ pay to
employees with 5 years of continuous service,
reported having inquired about the possibility of
insuring its obligation with Lloyd’s of London,
and of having received a cablegram in reply read
ing ‘1proposition quite impracticable.’ ’ Under an
other plan, the company’s obligation to pay the
guarantee ceased in the event of destruction of
the plant; and an insurance contract provided
that the insurer would thereafter assume the wage
payments for a period up to 6 months. In two
companies, specific monetary limitations were set
on the company’s financial obligation. Specific
arrangements to set aside funds to cover the
possible costs of a guarantee were reported in
two cases. In two others, the employer’s obliga
tion was covered by a contract requiring the
posting of a bond.
2 . Duration o f the Guarantee
With very few clear-cut exceptions, the plans
were basically designed to provide security within
the year, for the indefinite future or for as many
years as was possible, rather than to provide
security against cyclical fluctuations over a longer
period of time. Almost two-thirds of the 62 plans
ran for a term of 1 year. In a majority of these
cases, they took their terms from the terms of
union contracts; in some, the 1-year term had
been set outside the provisions of a union agree
ment. It should be borne clearly in mind, in
weighing the significance of the 1-year terms, how
ever, that most of the 1-year union contracts
provided for automatic renewal at the end of the
year unless one of the parties to the contract gave
notice of termination or intention to seek modifi
cation. It was clearly the general intent to keep
their guarantee plans in existence as long as the
parties found it feasible and desirable to do so.
Formal extension of the duration of a guarantee
was illustrated by the case of the Wisconsin Public
Service Corp., and the Int’l Union of Operating
Engineers (AFL), who expanded their guarantee
from a 1-year term to 2 years when they entered
into a 2-year contract after their first post VJ-day
negotiations. In the meantime, the extended
term did not freeze other wage and working con
ditions. The current contract provided a 1-year
wage reopening clause.
In one-fifth of all the cases studied the plans
ran for an indefinite period of time; in none of
these was there a union agreement involved, and
the plans in every case but one were at any time
subject to cancellation on management’s initiative.
In only eight cases did the plan run for a definite
term of more than 1 year: 5 years in one instance,
3 years in another, and 2 years by contract in six
cases.
In one case the guarantee ran only for the dura
tion of the slack season. Workers covered in
slack months were guaranteed nothing during the
remainder of the year, when they could reasonably
expect full employment.
3. Firmness o f the Guarantee
In one-third of the cases, no provision was made
for modification or abrogation of the guarantee
within the term of the plan. All but two of these
involved specific contract language in union
agreements. In an additional five cases, modifica
tion or termination was permitted only under “ act
of God” clauses, or in the event of catastrophe,
riot, strike, insurrection, or similar situation.
Management had an absolute right to abrogate
the guarantee at any time in another third of the
cases, very few of which were embodied in union
contracts. In an additional 15 cases, management
could abrogate or modify the guarantee if certain
conditions occurred: if sales fell below 80 percent
of the previous year’s level; if events occurred
beyond management’s control, explained in one
case to mean the possibility of Government order
or lack of materials; in the event of adverse busi
ness conditions (the fact of which was subject
finally to arbitration); in the event of discon
tinuance of the firm (the legitimacy of which was
in one case subject to arbitration); in the event of
inability to obtain supplies and materials because
of acts and restrictions of the Government; in
the event of passage of an unemployment com
pensation statute (removed from the plan at a
later date, when the plan was continued beyond
the passage of the law). In two cases involving
agreements with the Int’l Ladies Garment Work
ers’ Union, the plans could be discontinued by
management upon the granting of increases in
wage rates.
All but eight of the plans were in written form.
In 36 cases, the guarantees were reduced to writ
ing in union contracts or were incorporated into
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
contracts by reference; 4 involved individual
employee contracts; and 14 were in the form of
written pamphlets or bulletin board statements.
4 . Computation o f the Guarantee
Virtually all of the plans embodied the concept
that an employee must be willing to work when
work is available in order to qualify for his full
guarantee. Days of unexcused absence were
almost uniformly deducted from workdays for
which the employee was guaranteed pay; in the
two cases in which the employee was guaranteed
an annual salary and in a few others the rules
governing this matter were not clear. In 'the
case of the Columbia Conserve Co., where salary
scales were based upon marital status and family
size, the problem of absences was handled by
individual disciplinary measures where necessary,
rather than by automatic deduction from regular
wage payment.
Most of the plans pursued further the concept
that an employee must be willing to work, and
required that he actually be available for work.
Thus, in two-thirds of the cases, workers were
ineligible for guarantee payments when incapaci
tated as a result of accident or sickness. In an
additional one-fifth of the cases, the worker was
eligible for the guarantee when he received work
men’s compensation payments, but such payments
were offset against the guarantee, generally to
prevent pyramiding of total wages above regular
earnings. In three of these cases, the employee
turned his compensation check over to the em
ployer and continued to receive the guarantee.
Less than 15 percent of the companies reported
the offsetting of unemployment compensation pay
ments against the employer’s guarantee obliga
tion. One company reported that employees were
disqualified from guarantee benefits when they
received unemployment benefits. The small per
centage of firms reporting offsets, however, largely
reflected the fact that no experience had developed
in most of the cases, because the employees in
volved were given year-round employment and
normally had no occasion to apply for unemploy
ment benefits.
Vacation, holiday, and sick-leave payments
generally were not permitted to pyramid above
guarantee payments covering the same period of
time, especially where the guarantee comprised
a full j^ear’s work or wages. In cases where the
33
guarantee was for less than a year’s duration,
practice varied, vacation payments being added
to the guarantee in some cases and counted to
ward the guarantee in others. In a few cases,
employees guaranteed wages or employment dur
ing slack seasons were required to take their vaca
tions during off-season periods. Ten percent
of the plans provided for deduction of outside
earnings from the guarantee, and in 2 cases
receipt of outside earnings was cause for disquali
fication from guarantee benefits.
Under virtually all of the plans, the worker’s
guarantee was computed on the basis of his regular
hourly or weekly rate, and the rate of pay was not
affected by the existence of the plan. The employ
ee’s guarantee was computed on the basis of his
hourly rate, excluding incentive bonus payments
in the Hormel case. In two cases the guarantees
were stated in terms of specific annual monetary
payments. In the Nunn-Bush case, the employ
ee’s rate of compensation varied in relation to
production trends, his base or job rate being
designed as a sharing ratio rather than as a rate of
pay.
Workers uniformly lost coverage upon discharge
for cause.
£• Transfers
In four-fifths of the cases the employer had the
right to transfer workers, where such transfers
were practicable, to utilize their time on jobs other
than the one to which they were regularly assigned,
in the event of a* slack period. This right was
almost always, in the case of firms under contract
with labor unions, subject to contract provisions
governing transfers, including seniority rules.
In the remainder of the cases, transfers out of
classification were prohibited by union contract, or
limited to individual situations where the union
gave advance consent. Negotiated limitations on
the employer’s right to transfer were usually
reported in the cases of specialized workers or
ganized on a craft basis, where transfer would
mean work outside the union’s jurisdiction, per
haps involving the coverage of another labor
organization. This was the case in plans involving
textile printers, licensed marine personnel, me
chanical trades workers on a newspaper, brewery
workers, transit-mix drivers, and railroad shop
workers. In one important case— that of the
Nunn-Bush Shoe Co.— union consent to transfers
34
GUARANTEED WAGE PLANS IN THE UNITED STATES
had to be obtained in advance although the union’s
jurisdiction included all plant workers. In the
Hormel case, where transfers were initially an
integral part of the plan, the system provided that
the worker remain at his station and that work be
brought to him. Shifts of assignment were con
fined to low-seniority employees who made up an
“ extra gang.”
In virtually all of the cases where job shifts
occurred, the worker was protected against rate
reduction during temporary transfers, although
definitions of “ temporary” varied. Permanent
transfers of assignment, when they occurred,
usually meant changes in rate, even during the
guarantee period.
6. Administration
The basic responsibility for administration fol
lowing the establishment of the guarantee obliga
tion— for planning work assignments to meet the
guarantee, for keeping records of working hours
and their relation to maximum hours provisions,
for determining eligibility, deductions, and pay
ments due—rested in management hands. Execu
tives or company owners took personal responsi
bility for administration in the greatest number of
cases, personnel or labor relations directors had
responsibility in less than 20 percent of the plans,
and administration was handled by minor office
personnel in several. Where the guarantee re
flected no greater employment opportunity than
management and labor expected as a normal
occurrence, administrative problems were reported
to be nonexistent or to require little attention.
Direct labor participation in administration
existed in only a few cases, including two in which,
as a result of specific management policy, labor’s
role in all aspects of company administration had
substantially greater scope than in most business
enterprises. In the Columbia Conserve Co., the
guarantee plan was described as one part of a
broad experiment in economic democracy; workers
were at first given a direct voice in management of
company affairs through an employee council and
were later given ownership rights. The NunnBush Shoe Co. regarded its plan as a cooperative
venture on the part of labor and management, and
union functions included participation in employ
ment stabilization planning, periodic review of
production and sales for joint determination of the
level of guarantee payments, equal participation
with management in determining transfers, and full
participation in discipline proceedings prior to the
taking of disciplinary action.
The chief form of union participation was
through the grievance machinery, which in almost
every case provided for arbitration as the ter
minal step in the settlement of disputes arising
under the contract. In several cases labormanagement committees met regularly to discuss
operation of the guarantee; their responsibility
was generally an advisory one. Unions usually
exercised a watchful role in plan operations, to
ensure that obligations would be met, and in a
few cases, that they actually could be met. In a
number of cases where there were contractual
union shop provisions, determination of eligibility
was a matter under complete union control. In
several others, such matters as changes in the
size of the work force or the establishment of
piece rates were subject to joint decision of labor
and management.
C. Experiences of Operation
The obligations of the plans have been met—
generally under favorable, but in some cases under
difficult, circumstances. The safeguard provi
sions and escape clauses have rarely had to be in
voked. Most of the plans that went through
depression periods weathered them successfully;
abandonment of plans has been the result of
special individual circumstances. The plans that
operated under Section 7(b) (2) of the Fair Labor
Standards Act experienced somewhat greater
difficulty than those which did not take advantage
of its provisions, largely because of the inflexible
2,080-hour limit on annual working hours.
2. Meeting o f Guarantee Obligations
The employers’ obligations to pay guaranteed
wages were met in every case studied, although in
three cases the wage rates guaranteed were re
duced under depression conditions. In almost
half of the cases, this meant that the employers
actually had to pay out or advance money for
time not worked. In the remainder of the cases,
the employers were able to provide work for all
covered employees to the extent of the guarantee
during all of the years in which the plans had been
in existence. In no case did the employer fail
to live up to the guarantee.
In providing sufficient employment to meet their
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
commitments, of course, some employers who
made no payments for time not worked did pay
for time worked on maintenance, odd jobs, or
other work at the rate of the employee’s regular
classification. The extent to which employers
provided special work to keep their employees on
the pay roll is not adequately known, but the
total amount of such work is believed to have
been very small except in a few cases and was
confined largely to the companies who also paid
for time not worked. The most extensive pro
grams of this type were reported in the Hormel
and Procter & Gamble cases. During 1932 and
1933 the Proctor & Gamble Co. at its Cincinnati
plant placed workers not needed in their regular
jobs in a labor pool. Employees in the pool
did general maintenance work on buildings, equip
ment, and grounds and dug holes for proposed
construction. At the Hormel packing house in
Austin, Minn., a livestock shortage occurred in
the drought year of 1935. Employees for whom
no work was available in the plant were selected
on a seniority basis and put to work building
houses, 34 of which the firm erected on a contract
basis before the shortage abated.
In most of the cases in which payment was made
for time not worked, it was expected by the em
ployer that he would have to make such payments
under the normal operation of his plan. In a few
cases payment for time not worked was made only
in situations that approached crisis proportions.
In two such cases— Crocker-McElwain, and
Seaboard Air Line Railway—payment for time not
worked during the depression of the early 1930’s
resulted in modification of the plan after the guar
antee period had passed.
None of the plans had to be modified during the
guarantee period to enable the employers to meet
the obligations which they had assumed. In the
case of the Procter & Gamble Co., modifications
were prepared by the board of directors for possi
ble use during the depression of the early 1930’s
but never had to be used.
Somewhat less than half the plans were modified
in some fashion during their existence at the time
plans were renewed; the remainder continued as
they had first been adopted. Several of the
changes were very minor, having to do with ad
justments to a new workweek or vacation allow
ance, provision for temporary exclusion of wartime
recruits to preserve jobs for veterans, and removal
772334°— 48---------- 6
35
of a contract requirement for collateral. Other
modifications dealt with the “ safeguard” or
“ escape” provisions of the plans: in one case inaugu
ration of a union contract eliminated a company’s
right to abrogate the guarantee at will, in another a
5-year guarantee with an escape clause was changed
by negotiation to a 1-year guarantee with no es
cape provision, and in a third a company elimi
nated its own previously announced right to aban
don its plan if an unemployment compensation
law were passed.
Duration of the guarantee or coverage of workers
was expanded in a few cases following favorable
experience with limited plans, notably in the case
of the Hormel Co., where the plan had started
initially in a department of 19 workers and was
gradually expanded to cover more than 4,000.
In a few instances, coverage was contracted;
the most important case of this group was the
Procter & Gamble Co., which changed the eligi
bility requirement from 6 months to 2 years be
tween 1933 and 1936, because of rapid expansion
of the company and the hiring of many new
employees.
Regularly planned revision of the guarantee was
a feature of four cases— Hormel, Nunn-Bush,
Seaboard, and Columbia Conserve. In the Hor
mel case, forecast of the demand for meat products,
along with departmental review of the number of
positions required to turn out a given volume of
work, was made annually, and resulted in changes
in departmental crew size and guaranteed hours of
work. In the Nunn-Bush case, whose basic fea
ture was the adjustment of payments to long-term
fluctuations in production rather than a fixed
guarantee, sharing ratios of covered workers were
modified periodically, to reflect long-range changes
in production volume; and over the years of the
plan’s operation employees were classified into
several groups with respect to the degree of their
sharing. In the Columbia Conserve case, periodic
revisions in guaranteed salaries were made, usually
in the light of long-range market trends. In the
Seaboard case, the minimum-crew provision of the
contract was reviewed each year by management
and labor to redetermine the size of the minimum
crew.
2. Effects o f Business Depression
Eight of the plans went through the depression
of the early 1930’s; six of them are still in existence,
36
GUARANTEED WAGE PLANS IN THE UNITED STATES
although one has been substantially modified. Of
the remaining two, one was discontinued as a
consequence of the depression, and one was dis
continued in 1942 following a labor dispute. The
experiences of each of the eight cases are presented
in summary fashion:
A small roadbuilding company has had an
informal, unwritten guarantee in effect since
1926, providing a weekly salary for 52 weeks a
year as long as the employee is available for
work. The guarantee covers 8 employees,
and the work force is increased by 5 to 15 per
sons during the peak summer season. The
plan was designed to keep trained employees
from leaving the company during the winter
months, and represented a conscious subsidy
for time not worked. During the depression,
the company’s business boomed, its work in
1931 being almost twice the 1929 volume.
An indefinite guarantee of regular earnings
in each 4-week pay period, to all employees
with 5 years’ service, introduced in the early
1920’s by the Crocker-McElwain Co., of
Holyoke, Mass., and its subsidiary, the Chemi
cal Paper Manufacturing Co., resulted in sub
stantial payment for time not worked in 1930,
when company business declined and non
working time amounted to 30 percent of avail- able annual working time. At the end of the
year the guarantee was reduced, and after a
further decline in working time in 1931, the
guarantee was again reduced in 1932, finally
standing at less than 50 percent of the full
yearly income originally granted. The guar
antee was never revised upward after the de
pression, and the plan was abandoned in 1937.
An unwritten guarantee covering workers
in a Michigan wholesale grocery company
was maintained throughout the depression of
the early 1930’s. Employees were given
other duties around the warehouse or were
allowed to go home when there was no work.
The company absorbed the cost of the pay
ments required (as to the size of which there
are no available records) and the plan con
tinued thereafter with no changes.
The first depression experience of the Co
lumbia Conserve plan occurred in 1921.
According to an account furnished by com
pany officials, the company entered the year
with a heavy inventory made up primarily of
tomato products, a result of the previous
year’s large contracted acreage. With a
falling market for their products apparent,
new commitments were avoided until in
ventory was depleted. Prices fell and goods
had to be sold at a loss. All workers not
covered by the guarantee were laid off, and
production was confined to filling orders that
had actually been received. During the
remaining years of the 1920’s the plan oper
ated successfully, with a gradual expansion
in the number of workers covered. The
company was not seriously affected by the
depression of the early 1930’s until the latter
part of 1932, after other failures had already
occurred in the canning industry. Again,
the company had built up a heavy inventory,
and had volunteered to carry 23 wage workers
on its rolls after the tomato season, in addi
tion to an unsually large number of covered
workers— the number having risen during the
preceding years of prosperity—in order to
help alleviate the unemployment situation.
During 1933 all of the workers were continued
on the rolls, despite the company’s policy of
cutting production. In 1933 the council,
consisting of covered workers who determined
the policy of the enterprise, voted to cut
base salaries by 50 percent, the remainder to
be paid back in more prosperous years.
(Repayments were made in 1935 and 1937.)
Toward the end of 1933, however, more
drastic measures were necessary and the
workers again cut their salaries by 50 percent,
this time agreeing not to require reimburse
ment. The second 50 percent cut was re
stored in 1934, and thereafter wages were
gradually raised until they reached 80 percent
of the 1932 level in 1942, the year of the plan’s
abandonment.
Licensed marine personnel on a number of
Great Lakes vessels have been under guaran
tee contracts at various times. The Masters,
Mates and Pilots of America have had a con
tract with the Detroit & Cleveland Naviga
tion Co. since 1919, providing for continuing
payment during the season when ice closes the
Lakes to navigation. The guarantee was
retained throughout the depression despite a
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
two-thirds drop in the number of passengers
carried and a one-third drop in freight ton
nage between 1929 and 1932. Employees are
reported to have taken a voluntary cut in
wages, of unknown amount, at the time, which
did not show up in contract provisions regard
ing the guarantee.
Informal guaranteed employment plans for
skilled dry cleaning workers in a Middle
Atlantic area go back at least to 1903. A
more formal arrangement, set out in a union
contract, began in 1918 in the firm studied.
At the time of the study, the plan, which
guaranteed 52 weeks of employment at 40
hours a week, covered about one-third of the
employees and was reported to have experi
enced no difficulties whatever during the
entire period of its existence.
The Seaboard Air Line Railway and System
Federation No. 39, affiliated with the Rail
way Employee’s Department (AFL), inau
gurated a minimum work force guarantee in
1928. The plan was proposed by union
officials when their request for a wage increase
was refused by the company and was designed
to spread shop maintenance work and employ
ment more evenly throughout the year. The
agreement at first specified the number of
employees to be maintained at each terminal
point, but was changed in 1930 to specify a
system-wide number, with transfers of posi
tions permitted from shop to shop and from
city to city. Following a fall in operating
revenues during 1930, management, in negoti
ations for a 1931 agreement, refused to con
clude a minimum-force contract unless mod
ification by either party was permitted during
the year. Agreement was finally reached and
provided for a specified minimum force as of
January in each year. The contract provided
further that if “ any situation arises during the
life of this agreement which would seriously
affect either party, a conference will be held
between the management and the general com
mittee for the purpose of reaching an agree
ment. In event of failure to do so, it is under
stood and agreed that either party may ter
minate this agreement by serving 10 days’
notice in writing upon the other of intention to
37
do so.” Both sides recognized that the effect
of this modification was to change the guar
antee to a plan that spelled out intent and
provided 10 days’ dismissal notice. The union
pointed out, however, that the requirement for
action by top management and the union’s
general committee still curbed what had been
the chief source of employment instability,
eliminated through the employment stabiliza
tion program that started with the plan— the
work planning, hiring, and firing done by shop
supervision as a result of irregular work budget
appropriations. Under the new agreement,
the size of the guaranteed work force fell dur
ing the depression years as follows:
Guaranteed
work force
G u a ra n teed .
w orkforce
1928______ ________2, 170
1929______ ________2 ,2 3 5
1930______ ________2 ,2 2 2
1931______ ________ 1 ,9 6 7
1932______ ________ 1 ,8 0 0
1933______ ________1 ,7 3 5
1934______
1935______
1938______
1945______
1946______
_______ 1 ,7 2 5
________1 ,7 2 5
_______ 1 ,7 7 7
_______ 2 ,3 0 0
_______ 2 ,3 0 0
The Procter & Gamble plan was inaugur
ated in 1923 after more than 2 years of work
by management on the problem of employ
ment stabilization. The plan originally pro
vided, in brief, for a 48-weeks-a-year guarantee
at standard weekly hours to all employees
with six months of service. The general busi
ness slump of the early 1930’s is reported by
management not to have affected the company
until the fall of 1931. By that time, it is re
ported, demand had fallen to a considerably
greater degree than was anticipated, ware
house stocks rose, and production was cur
tailed. In order to provide the employment
which it had guaranteed, the company set up a
labor pool, to which workers not needed on
their regular assignments were sent. From
the pool, workers were assigned to a variety of
maintenance and construction jobs. At times
the percentage of workers in the pool ran as
high as 10 percent of total employment, and
most of the employees are said to have been
involved in pool operations at some time dur
ing 1932 or 1933. Despite a sizable increase
in maintenance and construction activity,
company officials in 1932 grew increasingly
doubtful of the ability of their company to
meet its commitments toward its employees,
38
GUARANTEED WAGE PLANS IN THE UNITED STATES
and the framework of the plan was modified
to permit the company a greater degree of
flexibility. In August 1932, the guarantee
was revised to reserve to the company the
right to limit hours of work to 75 percent of
the established workweek whenever in the
opinion of the board of directors such action
seemed to be justified. Under this provision,
the board of directors, in January 1933, auth
orized such reduction in five of the company's
plants. Only two of these plants were actual
ly notified of the board's action, however, and
even in these the guarantee was met without
the necessity of taking advantage of the re
laxation. In January 1933, the eligibility re
quirement was increased from 6 to 12 months
of continuous service. The plan was also
amended at that time to reserve the com
pany's right to withdraw the guarantee at
any plant or to terminate it or modify it at
any time.
All 26 of the 62 plans that went through the
business recession of 1937-38 weathered its effects
successfully. All but three of the 26 are still in
existence; discontinuance of these three was in
each case unrelated to the effects of the recession.
In 22 of the 26 cases, the company was able to
meet its obligation under the guarantee without
the necessity of taking special action. The other
four cases involved the McCormick, National
Oats, Seaboard, and Nunn-Bush plans. In the
case of the McCormick Co., whose sales fell off
during 1938, the company produced to the extent
of its storage capacity, and increased the volume
of its maintenance and remodeling work. Em
ployees voted to reduce the hours in the work
week if necessary in order to work throughout the
year; but this was not necessary.
In the National Oats case, sales fell off during
1937, and the expected fall peak failed to materi
alize. Only workers covered by the guarantee
were kept on during the summer slack period and
up to the early fall. They performed maintenance
work, blew down dust, scraped off machinery, dug
a ditch for a new water line, and cleaned up the
plant in general. The guarantee was met with
very little payment for time not actually worked, f
and no workers suffered rate reductions during
their temporary transfers to other jobs.
Under the Seaboard plan, the size of the mini
mum work force was reduced by agreement during
1938 from 1,850 to 1,725, because of a decline in
business.
The Nunn-Bush plan was probably the most
seriously affected by the events of 1937-38.
Demand fell off and prices slumped in the late
summer of 1937, causing management and labor
to agree upon the cancellation of a recently given
advance in base sharing rates, and a return to a
lower base-rate multiplier (37, instead of the
existing 40) that*had been used in 1935. Pro
duction was continued for stock; temporary
workers, who then constituted about 11 percent
of the total working force, were kept on by agree
ment. The group fund began to run a deficit,
but production was continued, dropping only as
normal turn-over reduced the labor force, and wage
payments were maintained. The large inventory
of shoes accumulated during the depression is re
ported to have given the company some competi
tive advantage when production resumed in the
industry after the depression, and the group fund
deficit was liquidated in 1941.
3 . Discontinued Plans
Of the 46 discontinued plans about which the
Bureau had information, detailed studies were
made in 15. The discontinued plans demon
strated no characteristics essentially different
from those that were still in operation at the time
of the survey, in terms of basic employment sta
bility of the enterprise, duration or coverage of
the guarantee, or experience under the plan.
Discontinuance appears to have been almost
wholly the result of individual circumstances.
All of the discontinued plans studied in detail
went out of existence after the depression of the
early 1930's.4 Business conditions or the ability
of the employer to meet the guarantee seems to
have been an important contributory cause of
abandonment only in the case of the CrockerMcElwain Co. and the Chemical Paper Manu
facturing Co., previously cited. In 1937, when
the plan was abandoned, the guarantee stood at
less than 50 percent of full weekly wages. Man
4 See Unemployment Benefits in the United States, by Bryce M . Stewart
(New York, J. J. Little & Ives Co., 1930), pp. 363-371, 374-386, and 463 ff.;
and Operation of Unemployment-Benefit Plans in the United States Up to
1934, in Monthly Labor Review, June 1934 (pp. 1288-1324), for discussion of
plans discontinued during and prior to the depression of the early 1930’s.
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
agement had come to regard the plan as ineffective,
and discontinued it upon the passage of unemploy
ment compensation legislation.
In dealing with the question of discontinuance
resulting from business depression, the case of the
Seaboard Air lin e Railway should, of course, be
noted. Technically, what was formerly a guar
antee is now a statement of intent to employ a
minimum force coupled with a 10-day dismissal
clause. The union regards the minimum force
agreement as of continuing value, however, and
emphasizes the fact that the contract expresses the
firm intent of the company and can be abrogated
only by top management. In its present form, the
plan has approximately the same degree of firmness
that exists in a number of other plans, such as
those which can be withdrawn at any time, and
such as the McCormick plan, under which the
company has announecd its intention of doing
everything it can to provide a stipulated
amount of work, but without a formal “ guarantee”
of a definite number of hours per week or per year.
Four plans were discontinued during World War
II, largely as a result of wartime conditions. At the
time they ceased, they had been in operation 2, 4,
5, and 6 years, respectively. In one case, the plan
had operated by agreement between the company
and an independent union under the 2,000-hour
ceiling provided by Section 7 (b) (2) of the Fair
Labor Standards Act. Manpower shortage and
wartime manpower regulations made the contin
ued operation of the annual hours ceiling im
practicable. In addition, employees desired to
work overtime at premium rates to increase their
total earnings. The plan was abandoned by agree
ment and has not been revived. Management
looks with favor upon its revival sometime during
the postwar period, but employees are reluctant to
give up overtime pay during a period in which the
company’s products— construction materials— are
in heavy.demand.
The second case of wartime abandonment also
involved a 7 (b) (2) plan, negotiated between the
Barlow & Seelig Co., a washing machine manu
facturer, and the Steel Workers’ Organizing Com
mittee. It was abandoned in 1942 because of the
company’s uncertain business future during the
war period. Union officials expressed interest in
revival of a guarantee but were cool toward the
possibility of its taking the form of a 7 (b) (2) plan
again.
Management was favorably inclined
39
toward the possible revival of some kind of
guarantee.
The plan of a midwestern baby carriage manufac
turer was entirely the product of the owners’ indus
trial relations philosophy and the desire to assure
employees an annual income. The guarantee,
embodied in a bulletin board statement, provided
for 1,760 hours’ work a year, plus vacation, to all
employees with 1 year’s service. The uncertainty
of production under war conditions made manage
ment reluctant to continue its formal guarantee.
The bulletin board statement was removed and
new employees were no longer told that the com
pany guaranteed employment. Old employees
who remained with the company were not told
that the formal plan was abandoned and actually
received more work than the guarantee had called
for. The owners stated that they intended to
restore a formal guarantee plan at an early date.
A Baltimore silverware manufacturer guaran
teed its journeymen and apprentice silversmiths
52 weeks of 48 hours (including 8 hours pay at
time and a half) per year. In 1942, wartime con
ditions made it difficult for the firm to secure raw
materials and it was forced to discontinue manu
facture of silverware and to cancel the guarantee.
As soon as normal operations are resumed, man
agement reported, it intends to revive the plans.
Four plans, including two wage advance plans,
were abandoned after management had come to
the conclusion that the plans were not needed,
because the employer was able to provide sub
stantially more work than the guarantee provided.
All but one of these plans had been in existence
for 3 years or less. All were abandoned between
the years 1939 and 1942.
Three plans were abandoned as a result of
employee and union dissatisfaction. Two of these
were cases in which the plans had been introduced
to avoid overtime payments under the Fair Labor
Standards Act, in one case by a 7 (b) (2) contract
with an independent union and in the other case
by a scheme for advancing credit hours at the
beginning of the year and offsetting overtime hours
on a straight-time basis. In the first case, em
ployee opposition to the plan arose over a provi
sion for compensatory time off rather than over
time pay for hours over 40 a week, and over the
practice of laying employees off— in some cases as
early as November— when they reached their
2,000-hour limit. The employees switched union
40
GUARANTEED WAGE PLANS IN THE UNITED STATES
affiliation, and negotiations with the new union
resulted in elimination of the plan. In the second
case, employees covered under the plan became
dissatisfied with the fact that they received only
straight-time credit for overtime hours, while
employees not covered received premium over
time rates. This plan, too, was abandoned as a
result of union action. In the third case, a guar
antee of 3 days’ work a week for 52 weeks a year
had been granted by agreement in a small furni
ture manufacturing shop as a condition of the
union’s withdrawal of its demand for a wage in
crease. The guarantee proved to yield less em
ployment than the employees could normally
count upon, and other firms in the industry granted
the wage increase which the union had given up
for the guarantee. At the end of 1 year of opera
tion, the guarantee was abandoned and employees
received the industry-wide wage adjustment.
The three remaining cases of discontinuance in
volved a manufacturer of electrical apparatus, the
Columbia Conserve, and the Namm Store plans.
Passage of unemployment compensation legislation
was reported as the reason for discontinuance of the
1,500-hours-a-year guarantee in the first of these
three cases. The guarantee in this case had lasted
from 1931 to 1938, covering in 1933 approximately
7,000 plant workers in a number of plants— a larger
number than was covered by any other guarantee
studied except the General Motors w^ge advance
plan. The Columbia Conserve plan was aban
doned as the aftermath of a labor dispute. Wages
and union organization had arisen as issues among
the employee-owners, resulting in a War Labor
Board dispute case and a court suit. The
employee-ownership feature of the plan was ended
by court order as a result of the suit, and the
management of the company simultaneously ended
the guarantee. Mr. William P. Hapgood, presi
dent of the company and founder of its experiment
in industrial democracy, stated to a Bureau
representative at the time of the study that a
guarantee might some day be attempted again.
The Namm Store plan operated between 1939 and
1943 and guaranteed from 40 to 52 weeks of work a
year, depending on length of service, to all wage
earners with at least 1 year’s employment status.
Management officials had regarded the plan as a
significant addition to working conditions, but
during the early years of World WTar II they
became worried about possible conflict between
their obligations under the plan and their obliga
tions to returning veterans. Because of wartime
turn-over the proportion of new employees was
considerably greater than previously. To these
new employees, union organization appeared more
important during this period of high employment
than the guarantee plan. When the employees
organized, no request was made for continuance of
the plan in the initial contract negotiations, and
management dropped the guarantee.
Guarantee plans covering certain groups of
employees were dropped in two additional cases,
although similar or identical plans covering other
employees in the same establishment were con
tinued. One of these involved the composingroom employees of a midwestern newspaper, who
were guaranteed 52 weeks of work during the
calendar year under a 7 (b) (2) contract. The
agreement provided further, in contrast to stand
ard contract language in printing trades agree
ments, that regular employees would work on the
sixth day, at straight-time rates, where necessary.
This agreement had been entered into because of
the difficulty of obtaining printing help for the sixth
day of work, and because of the parties’ desire to
avoid declines in productivity that usually pre
ceded seasonal slack periods. The plan was
discontinued at the end of 1941 because of the
refusal of the international union to sanction its
renewal. The international objected to the elim
ination of time-and-a-half pay for overtime work
and to the reduction of employment opportunities
for transient printers. The second case involved
longshore employees of a Great Lakes transporta
tion company, whose guarantee was discontinued
when the company subcontracted its longshore
work.
4. Operation Under Section 7 ( 6) (2)
The plans which operated under Section 7 (b) (2)
of the Fair Labor Standards Act merit special
consideration as a group, since their experience
constitutes the only experience to date of the
operation of plans under a Federal statutory
provision designed in part to encourage guaran
teed wage or employment plans. Twenty com
panies reported the operation of guaranteed wage
or employment plans (8 of which are still in opera
tion, the remainder having been discontinued,
largely during the war years) under Section
EXPERIENCE WITH GUARANTEE PLANS IN SELECTED CASES
7 (b) (2) of the Fair Labor Standards Act.5*7 The
number of plans that have fully met the require
ments of the law is unknown; none has been the
subject of final court determination. In some
of the 20 cases, however, there was some ques
tion whether the full requirements of the law or
regulations had actually been met, (a) because
of apparent failure to meet the requirement that
the union representing the employees be certi
fied as bona fide by the National Labor Relations
Board, (b) because of contract provisions that
may not have met the full requirements of the
law (a matter which could not be finally deter
mined because the plans had not been officially
commented upon by the Wage and Hour and
Public Contracts Divisions or ruled upon by the
courts), or (c) because of failure (in 5 cases) to file
contracts as required by regulation.
Eight of the companies which took advantage
of the provisions of Section 7 (b) (2) were studied
in detail by the Bureau. In one case the induce
ment of the overtime exemption was reported to
have been responsible for initiation of the plan,
sponsored by management. In two, the over
time exemption was reported to have been im
portant in determining management’s accept
ance of union proposals for guarantee plans. In
another, management’s desire for overtime exemp
tion and labor’s desire for security were reported
as equally important motives. In the remaining
four cases, guarantee plans were already in oper
ation or about to be put into operation in October
1938, the effective date of the Fair Labor Stand
ards Act, and were modified to conform to its
provisions.
Of the eight guarantees studied, five are still
in operation (in only four cases under 7 (b) (2),
however). One of the former 7 (b) (2) plans was
abandoned because of employee dissatisfaction
following a drop in annual earnings during the
2 years after the plan’s inauguration. The earn
ings decline had resulted from operation of the
annual-hours ceiling, some employees having to be
5 Employers who had filed contracts with the Wage and Hour and Public
Contracts Divisions under the provisions of Section 7 (b) (2) were included
in the Bureau’s canvass; the Administrator’s regulations under the Fair
Labor Standards Act require that contracts under Section 7 (b) (2) be filed
with the Wage and Hour and Public Contracts Divisions.
Twenty of the 347 companies studied reported operation under Section
7 (b) (2). Five of these firms, however, were not included in the list of
companies that had filed with the Wage and Hour and Public Contracts
Divisions.
41
laid off as early as the first week in November.
The second was abandoned because of the difficulty
of adhering to the annual-hours limit under war
time conditions. The third was abandoned be
cause of the general uncertainty of operating
any guarantee under wartime conditions. In the
latter two cases, some sentiment was reported for
eventual reinstatement of a guarantee, although
in both cases union representatives vwere luke
warm about the possibility of the plans again
taking the shape of 7 (b) (2) arrangements because
of the elimination of premium overtime pay and
the absolute ceiling on annual hours of work.
In an additional case, where a guarantee is still
in operation, 7 (b) (2) provisions were eliminated
in 1942 because of longer wartime working hours.
The best-known of the guarantee plans which
operated under Section 7 (b) (2), and the one
which covered more wage-earners than any other
7 (b) (2) plan, has been that of Geo. A. Hormel &
Co., whose plan antedated the Fair Labor Stand
ards Act. At the Congressional hearings on that
act, representatives of the firm urged the inclusion
of a provision which would enable it to preserve
its established guarantee; Section 7 (b) (2) was
framed to encourage and to allow the continuation
of arrangements of this kind. Consequently, pas
sage of the act caused only slight technical changes
in the Hormel plan as it then existed. The plan
provided that covered workers were to receive,
weekly, 52 equal parts of estimated annual
wages— based on estimated annual production—
with additional pay on an incentive basis. Weekly
hours were not fixed, the only restriction on them
being that a worker’s annual hours must not
exceed 2,080; on a weekly basis, hours were not
limited, but overtime payment was stipulated after
53 hours a week. The firm continued to operate
under 7 (b) (2) without difficulty until 1944, when
volume of work and the wartime manpower short
age made it impossible to observe the stipulated
2,080-hour limitation on employment for 374 of the
workers. Their earnings were recomputed on a
weekly basis without the advantage of the over
time exemption. The plan continued to operate
under 7 (b) (2) for the remaining workers in the
plant.
Six of the 8 firms which operated under Section
7 (b) (2) reported some difficulty during their
experience with the plan in balancing man-hours
so that the annual limitation stipulated in the law
42
GUARANTEED WAGE PLANS IN THE UNITED STATES
would not be exceeded. In two of the cases it was
necessary to lay off workers before the end of the
year.
One-third of the 54 employers (of the entire
group of 62 studied) did not invoke the provisions
of 7 (b) (2) in connection with their guarantees
because they were unable to meet requirements of
the section (the guarantee provided either more
or less employment than the stipulated 2,080
hours, or no bargaining unit existed in the plant)
or because by the nature of its business the firm
was not subject to the Fair Labor Standards Act.
Other reasons for failure to take advantage of the
provisions of 7 (b) (2) reported less frequently
were union opposition to elimination of premium
overtime payments and the impossibility of con
trolling employees* annual hours to conform to the
2,080-hour limitation. Management officials at
Procter & Gamble and Nunn-Bush stated that
they had no desire to receive exemption from pay
ing overtime premiums. A large proportion of
employers who did not invoke Section 7 (b) (2)
were not acquainted with its provisions.6
Chiefly because of unfamiliarity with its pro
visions, very few of the employer or union officials
interviewed had suggestions to make for improve
ment in the provisions or administrative interpre
tation of Section 7 (b) (2). Three employers sug
gested the removal of the 2,080-hour ceiling on
hours, and the substitution of an annual overtime
penalty provision for hours beyond this point.
Four suggested that the provisions of 7 (b) (2)
be made applicable to nonunion as well as to
union employees. It was also suggested that the
securing of interpretations or rulings on the legal
ity of guaranteed wage proposals from the Wage
and Hour and Public Contracts Divisions be
facilitated and that such action be taken before
contracts were signed or went into effect. Two
employers and one union official suggested that,
in addition to an annual guarantee, the section
provide for a guarantee of minimum hours per
week. In general, union officials were reluctant
to consider giving up premium overtime rates for
a guaranteed wage.
0 No special reasons for not utilizing 7 (b) (2) were reported by the employ
ers who had filed contracts with the Wage and Hour ahd Public Contracts
Divisions but had not, in fact, operated under guaranteed wage or employ
ment plans.
5, Costs
A full accounting of the costs of the guarantee
plans that have operated in the United States was
unavailable. To a very large extent this resulted
from the difficulty of isolating the effects of the
guarantees from the effects of other business and
employment conditions. To an equal extent, it
resulted from the absence of adequate cost ac
counting systems for tracing the specific effects of
the plans. The inadequacy of records resulted
in large part from the fact that the employers who
introduced the plans believed themselves able to
evaluate their own experiences without special
record keeping.
The kinds of expenditures actually experienced,
both direct and indirect, were as follows:
Direct Expenditures
Payment for time not worked.
Payment at the worker’s regular rate of pay for fill-in
jobs which normally carry a lower rate.
Payment for make-work.
Losses on wage advances.
Indirect Expenditures
Time of personnel, labor relations, and sales offices
devoted to planning and laying the foundation for the
plan.
Outside engineering service.
Provision of extra storage space for production in excess
of pre-plan storage capacity.
Cost of maintaining wage reserve.
Tie-up of capital in inventory caused by production for
stock.
In the plants studied, records were generally kept
only on the direct expenditure items of payment
for time not worked and losses on wage advances.
It was therefore necessary to rely almost wholly
on management statements concerning their total
cost experience.
One-half of the firms reported no expenditures
whatever. Three-quarters of the remainder (about
35 percent of all the firms) had paid for time not
worked, and the remaining companies had incurred
payment for some of the other items listed above,
but not for unworked time.
Keports on savings traceable to the operations
of the plans were even more difficult to obtain
than reports on expenditures. Savings of various
types were reported to have been experienced,
although records were not ordinarily kept on most
of these items:
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
Direct Savings
Reduction of unemployment compensation taxes under
merit-rating plans.
Elimination of overtime payments required after 40
hours a week by the Fair Labor Standards Act.
Lower wage rates than those of competitors.
Indirect Savings
Reduction in cost of training new workers.
Reduction in turn-over costs.
Increased productivity.
Savings in overhead costs through constant use of
equipment.
Recruitment of more efficient employees.
Competitive advantage resulting from presence of
accumulated stocks.
The only savings that were reported to the Bureau
in specific terms were those affecting unemploy
ment compensation taxes and the elimination of
overtime payments at time and a half required by
the Fair Labor Standards Act.
It seems clear that there was no net expense at
all to the companies involved in half the cases.
In the remaining half, there was not an adequate
record of expenditures and offsetting savings to
warrant conclusions concerning net costs of plan
operation. Employers who incurred some ex
penditures reported almost uniformly that their
outlays had been offset by compensating savings,
or benefits such as increased morale and pro
ductivity which resulted in compensating savings.
Although the employers’ own observations in
these cases could not generally be substantiated
by data, the expenditures in most of the cases were
so small that they were reasonably certain to have
been offset.
D. Management and Labor Evaluation of Results
The results of the plans can be assessed on the
basis of two types of information: (1) Data on
business operations, employment, and earnings of
employees; and (2) the observations and con
clusions of management and union officials who
have had constant contact with the plans’ opera
tions. The latter has turned out to be a much
more fruitful source, because comprehensive and
valid statistics on the effects of the plans are
extremely difficult to obtain. Record systems
have not been set up to trace the specific effects
of the guarantees, and it is generally difficult, if
not impossible, to isolate the effects of the guaran
tee plan from the effects of other aspects of
43
business operation and factors beyond the control
of management or labor in an individual concern.
The accomplishments of the plans have to be
viewed in the light of their objectives. As has
already been pointed out, in half of the cases
introduction of the plans was not expected to
contribute toward enlargement of the area of
stable employment opportunities or to stabiliza
tion of income. The guarantees in these cases
reflected the degree of stable employment that
management and labor believed was already in
existence, or, in a number of other cases, the
degree of employment regularity that was achieved
after efforts to stabilize had laid the ground work
for an expanded area of stable employment. In
the great majority of the cases, the achievements
realized were substantially the results that had
been expected at the time the plans were intro
duced.
1. Accomplishments o f the Plans in the Field of
Em ploym ent Security
The basic accomplishment of the plans was a
greater sense of security for the wage earners
covered. Management, labor, and employees in
terviewed emphasized the beneficial effect of the
plans upon employee morale and the individual’s
sense of security, even in those cases in which
management’s guarantee represented little or no
more than the employees could normally expect as
a regular condition of employment without a
guarantee :
In the case of a public utility which guaran
teed employment to employees with 5 years
of service only, and in which the plan was
introduced after several years of employment
stabilization efforts, both management and
labor agreed that the guarantee represented
substantially what company policy had been
prior to the plan. The employees and thenunion nevertheless considered the benefits
of the plan sufficiently great, from the point
of view of the security it granted, to warrant
their having given up overtime pay at time
and a half for a period prior to World War
II. Union representatives asserted that they
would seriously consider strike action, de
spite a long no-strike record, if management
attempted to abandon the plan. Labor and
management have now turned their atten
44
GUARANTEED WAGE PLANS IN THE UNITED STATES
tion to the problem of lengthening the plan’s
term, and have, under their current contract,
extended the guarantee to provide 2 years,
or 104 weeks, of work.
A union representative who had negotiated
a large number of basic crew* contracts cover
ing employees whose services would normally
be required throughout the year reported
that a guarantee clause was a basic feature of
all contracts negotiated by his union. While
the issue has never arisen, he reported, it
would clearly be union policy to insist upon
a guarantee at the cost of other improvements
in wages or working conditions, if the choice
had to be made.
In a number of cases, management officials who
were interviewed reported that the plans had
no special effects on employee morale or attitude,
largely because the plans were extensions of what
management was already doing. In contrast, a
positive advantage pointed out by several labor
representatives was the fact that spelling out the
plan, even though it represented nothing more
than past company policy, improved labor rela
tions and employee attitudes by demonstrating
firm company intention to continue that policy.
The establishment of a guarantee under circum
stances of stable employment has involved the
same considerations that have led management
and labor in thousands of contracts to reduce
to writing, working conditions and rules that are
accepted and completely taken for granted by
both parties.
In about 40 percent of the cases, added security
or a sense of security was reported to have been
the most significant achievement of the guaran
tee. Experience under these plans was generally
inconclusive, however; almost three-quarters of
them could be said to have undergone no real test,
because they had operated in fairly prosperous
years and available work had equaled or exceeded
management’s obligations. The guarantee level
in most of these instances might be of much more
immediate significance to covered employees dur
ing periods of business depression. In several,
however, coverage was so limited that a sense of
security would undoubtedly be their sole contri
bution at any time.
Where payments were made for time not
worked, the plans also contributed to income
stabilization. As has already been pointed out,
such payments were made in 40 percent of the 62
cases studied, in amounts ranging from a few
dollars a year for all of the covered workers as a
group to several months’ pay for each worker
involved. In addition, income regularization re
sulted from the spreading of work even in situa
tions where no payment was made for time not
worked. In all, some degree of income stabiliza
tion can be said to have resulted from the opera
tion of the plans in 33 of the 62 cases. In 9 of
these, stabilized income resulted from payments
to skilled or key workers during slack periods,
largely for the purpose of retaining their services;
in 21, from payments to larger groups of workers,
generally in small amounts; in 3 cases, from wage
advances.
The widest effects of the plans occurred in 12
cases where, according to labor and management
reports, the area of stabilized employment op
portunities appears to have been widened as a
result of employment regularization activities
undertaken concurrently with the plan.7 These
activities enabled the employers to guarantee em
ployment to workers who had not previously had
stable employment or a reasonable probability of
it. They did not result in general extensions of
the guarantees to other workers, beyond the extent
of the obligations that the employers had already
assumed, however. Where such broad extensions
did occur, as in the case of the Hormel plan, they
resulted from the same impetus to regularize em
ployment and provide security that had estab
lished the plan on a limited basis in the first in
stance. The character of the accomplishments
achieved in this group of 12 cases can be obtained
best by a summary of the individual situations:
(1) In the case of the Berkshire Knitting Mills,
of Reading, Pa., a guarantee of 50 weeks’ work
was granted in 1936 to skilled hosiery knitters,
in the form of individual contracts providing
minimum weekly payment at levels below pre
vailing industry code minimums, and transfer to
other types of knitting in the event that there
was insufficient work on their own machines.
From the workers’ point of view, the plan was
intended to grant security to knitters who worked
7 Some additional effects of this type may have resulted, though not re
ported by either management or labor representatives. In very few cases,
the plans may also have had some effect beyond the establishments in which
the guarantees operated. Inquiry along this line was outside the scope of
this study.
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
on hosiery that was not selling well; the intention
of the company was to reduce labor costs on 51gauge hosiery and thereby enable the company
to promote the sale of this product. This pro
gram was successful, and over the 10-year period
following the plan’s inception, hosiery sales in
creased, wage rates were raised to a point which
more than compensated for the decrease initially
taken by the employees, and the plan was extended
to knitters of non-run hosiery. At the peak of
its coverage, however, the plan included only
about 15 percent of the company’s employees.
(2) Employment stabilization measures in the
Columbia Conserve Co. were part of the broad
general experiment of which the guarantee plan
was a part. These measures included the em
ployment of workers during the slack season upon
the company’s 420-acre farm; production of
nonseasonal soups and other products, such as
chili con carne, chicken a la king, and bean sprouts;
utilization of some of the workers as salesmen;
and production for stock to a limited extent.
The company’s business methods and the pros
perity of the 1920’s resulted in a gradual increase
in the number of covered workers, but substantial
groups of employees recruited for the fall canning
season always remained outside the coverage of
the plan. In 1937, for instance, covered workers
numbered 76 in June, and total employment in
the plant was 102. During the September peak
of that year, employment rose to 254, of whom
only 74 were covered by the plan.
(3) The Cleveland Fur Workers’ Union, Local
No. 86 (CIO), has had contracts embodying
employment guarantees with 19 local furriers
since 1940. Prior to the introduction of the
38-weeks-a-year guarantees, most of these com
panies tried in some manner to spread fur coat
repair and restyling operations over the entire
8 or 9 month storage period; but a few firms, in
cluding one of the largest and best known in the
community, had taken no voluntary measures to
stabilize employment and was able to provide
only 3 or 4 months’ work a year. This company
had engaged in extensive advertising campaigns
to get furs into storage during April and May,
a practice which resulted in intensive work during
the months following, but in little work thereafter.
The union determined to seek an employment
guarantee in its contracts, in order to force the
companies to provide steadier employment, and
45
for the sake of greater security the guarantee was
also sought in contracts with the firms that were
already providing stable employment. Under the
contracts, the responsibility for spreading pro
duction to stabilize employment was left entirely
to management, the union believing that contract
provisions would provide sufficient incentive to
regularize.
Management and union officials
reported that employment had in fact been stabil
ized under the plan.
(4) A Wisconsin firm engaged in feed and flour
milling inaugurated a guarantee of 52 weeks of
employment in 1940. Management efforts were
thereafter directed toward leveling out a seasonal
slump in summer and early fall. Maintenance
work was postponed until slack periods, and va
cations granted at this time. New product lines
were developed, such as turkey feed, peak demand
for which occurs during the summer. At times
during slack periods special sales measures were
adopted to insure a steady flow of business: goods
were shipped on consignment, prices were lowered,
advertising was increased, and promotional pro
grams developed. In fact, management reported
that the chief benefit received from the guarantee
had been the incentive to seek and accept new
business during slack periods.
(5) The basic features of the employment guar
antee at Geo. A. Hormel & Co. were developed
prior to its inauguration. However, measures to
extend employment stability were devised as
union and management became more familiar
with the plan’s operation. Production quotas, of
course, were subject to annual revision, reflecting
changing conditions. It was found, for instance,
that crews required to handle the peak work load
in some departments could not be furnished suffi
cient work to keep them busy 2,080 hours a year.
Consequently, their annual hours were established
at lower levels in the interest of providing steady
employment. Careful determination of the crew
sizes still did not entirely eliminate slack periods
when there was insufficient work. Transfers were
made to departments where peak work loads ex
isted, but production in these departments did
not increase in proportion to the number of men
added. To avoid this practice, the firm made
slight changes in equipment so that work could
be transferred into slack departments. This
proved to be a more efficient arrangement. A
related measure was the establishment of an extra
46
GUARANTEED WAGE PLANS IN THE UNITED STATES
gang as a reservoir of workers from which depart
ments in need of extra help could draw. This
extra gang constituted approximately 7 percent
of total employment.
Among other changes to improve productivity
made during the operation of the guarantee was
the establishment of a single rate in a department
where the skills required for the various jobs were
almost equal, but where a series of rates had pre
viously existed. Under the former rate schedule,
employees with greater seniority were able to
claim higher-paying positions for which other
workers were better fitted. Since the leveling of
rates, the union has waived job selection rights
based on seniority in this department and produc
tivity has improved.
The aggressive, enterprising actions of manage
ment, reflected particularly in the introduction of
many new products and the steady expansion of
the company during the operation of the guaran
tee, should not be overlooked as a factor contrib
uting to the creation of more opportunities for
stable employment.
The guarantee of 52 equal pay checks per year
stabilized not only workers’ income but also
contributed to stabilizing the number of em
ployees on the pay roll. Prior to installation of
the guarantee, employment at the firm was
marked by a high rate of labor turn-over, as
workers drifted to other jobs during slack periods.
The promise of steady income under the plan
checked this practice; in 1939, 98 percent of all
workers on the pay roll were continuously em
ployed throughout the year.
(6)
The assured employment plan of the
McCormick Co. has been in continuous operation
since 1936. The company program to stabilize
employment started in 1932 and has already
been described. Following these measures, man
agement in 1936 announced that 48 weeks of work
would henceforth always be available to its em
ployees. All competent and efficient employees
with more than 6 months’ service were protected.
No assurance was given those with less than 6
months’ service, and incompetence and ineffi
ciency could still bring dismissal of any employee
after a series of warnings. Neither wages nor
hours of work were to be guaranteed. The
company simply described its plan as one of
intent to provide 52 weeks of work if at all possible,
and if necessary to reduce the number of hours
worked weekly in preference to reducing the em
ployee’s weeks of work below 48 in the year. In
actual practice, to fulfill the stated policy of the
company, the management has produced for
stock to the maximum capacity of storage facili
ties, has transferred workers (at regular rates
of pay) to maintenance and repair jobs, and has
laid off temporary workers with less than 6
months’ service. At the same time management
has been on the alert for new production possibili
ties and has conducted further market research.
(7) The basic regularization program of the
National Battery Co. had already been developed
in 1939 and 1940 when the company, at union
request, introduced a program of stabilization
of employment for workers with the greatest
seniority status in its main and branch plants.
The stabilization program was based chiefly
upon the forecasting of demand and the main
tenance of large inventory stocks of replacement
batteries. The advent of the plan accelerated
this program and effectively stabilized employ
ment during the winter months, when demand for
batteries was normally low. To an increasing
degree, under the plan, production of batteries
was consciously undertaken during the slack
season with the objective of placing the company
at all times in the position of being able to supply
demand. This policy is reported to have resulted
in substantial improvement in the company’s
competitive and profit positions, as well as in the
stabilization of employment.
(8) The National Oats Co., one of the smaller of
the Nation’s oatmeal processors, introduced a
guarantee of 1,664 hours a year plus vacation to
3-year employees in 1936, together with a wage
advance plan. Prior to inauguration of the plan
no special efforts had been made to regularize
production, and company officials felt that no
particular risks were involved in guaranteeing the
amounts of annual employment that they pro
posed. Under the plan seasonal declines during the
summer and at the end of the year continued, but
the company had to pay for time not worked only
in 2 years—in 1937 during the business recession,
and in 1940. In neither year was the cost of such
payment substantial. One step that the company
did take under the plan’s operation to regularize
production further was to start fall operation
earlier than it had begun in the past, in an effort
to level out the usual October peak. Another
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
was an effort to alleviate the secondary slack period
in December, caused by wholesalers’ inventory
reduction, by producing at this time orders which
had to be shipped long distances, such as 2 to 3
weeks in the case of products shipped to Cali
fornia. During year-end periods the plant has
sometimes been run exclusively on export business.
(9) When the Nunn-Bush plan was introduced
the company had already stabilized month-tomonth employment variations to a substantial
degree. The plan was expected to contribute to
the stabilization of income rather than to the
regularization of employment. During the reces
sion of 1938, however, sales were not sufficient to
warrant continuing the existing level of payments,
and under the plan’s flexible arrangement wage or
“ sharing” payments should have been reduced.
Desiring to maintain employee income, however,
management and labor agreed to produce for
stock and to continue the existing level of pay
ments. A sizable deficit was accumulated during
this period, which was wiped out during the im
mediately succeeding years.
(10) In the Procter & Gamble Co., the major
employment stabilization program undertaken also
occurred prior to the initiation of the plan, in 1923.
The chief instance of further employment regular
ization under the guarantee occurred during the
depression of the 1930’s. The company was able
to continue its guarantee by production for stock,
and by the transfer of workers to a labor pool from
which they were assigned to a variety of main
tenance and construction jobs. The company
reports that it would be impossible to determine
the costs of this program which could be specifi
cally attributed to the guarantee, because much of
the work would have been necessary in subsequent
years, and the company would probably have
undertaken some of the program as part of its
general feeling of responsibility towards its em
ployees in time of depression without the existence
of a formal guarantee.
(11) The minimum force agreement on the Sea
board Air Line Railway inaugurated a new pro
gram for spreading shop work throughout the
year and for eliminating seasonal and irregular
fluctuations in employment. This program suc
cessfully eliminated much of the variation in
operations. Whenever insufficient work threat
ened the full-time employment of workers in
minimum maintenance force positions, workers
47
not occupying minimum force positions were laid
off, or the workweek was reduced. In cases in
volving temporary or permanent close-downs of
shop or terminal points, the total number of mini
mum force positions for the year was maintained
by transferring employees from one shop or point
to another shop or point, at company expense if the
transfer involved moving the worker and his
family to another city. Work planning and
budgeting under the plan eliminated completely
sporadic shut-downs of individual shops that had
previously characterized the company’s operations.
(12)
The guarantee of a small building materials
manufacturing company, which operated under
the provisions of Section 7 (b) (2) of the Fair
Labor Standards Act from 1938 to 1943, stabilized
employment opportunities for approximately 30
workers to a limited degree by giving them yearround jobs when they had in previous years been
employed intermittently during slack winter
months. Since the employees worked longer hours
during the peak summer season under the plan to
make up for time paid for but not worked during
winter months, the principal effect of the plan was
to average hours on an annual basis and to stabilize
employee income throughout the year.
The chief effects of the plans appear to have
been adverse in three special situations: Where the
employer introduced a guarantee to avoid over
time premium payments, and the result was a cut
in employees’ annual earnings; where the employer
bargained away a wage increase with an offer of a
guarantee of 24 hours’ work, and the employees
found (a) that it gave them no increase in income
and (b) that competing employers uniformly gave
wage increases; and where the employer introduced
a plan to avoid overtime payments, and employees
who were paid at straight-time rates for overtime
hours came to resent the scheme in contrast to
payment of premium overtime rates to employees
not covered by the guarantee. All three of these
plans were discontinued.
The plans were reported to have had little
direct effect on volume of employment. Expan
sion in business activity as a consequence of the
incentive provided by a guarantee was reported in
a few cases. These situations involved cases in
which management generally followed an aggres
sive policy, and the information obtained was in
adequate to determine whether the plan or
management initiative was the causal factor.
48
GUARANTEED WAGE PLANS IN THE UNITED STATES
In a few cases, the plans were reported to have
had the effect of curtailing temporary employ
ment during peak seasons, giving the work instead
to regular employees:
This was the intention, for example, of a
guarantee which operated from 1938 to 1943
in the plant of a small building materials man
ufacturing company. Regular workers worked
longer hours during peak summer months at
straight-time pay in return for steady employ
ment during the slack winter season.
The two brewery plans studied guaranteed
employment to “ regular card” employees of
the company, while other employees bore the
brunt of slack periods. Since this arrange
ment had been a matter of union contract for
over 40 years, the extent of its effect on the
volume of temporary help previously em
ployed cannot be estimated.
Since many plans, especially those applying only
to key workers, were reflections of past practice,
temporary workers continued to be laid off. In a
number of cases, expanding employment oppor
tunities during the last decade have resulted in the
absorption of former temporary workers and their
coverage under the guarantees.
In most of the cases, annual earnings of indi
vidual employees increased while the plans were in
operation. In several of these cases, management
or union officials attributed increased earnings of
workers with low seniority status, previously sub
ject to periodic or intermittent lay-off, to the
operation of the plans. The fact that payments
of varying magnitude were made for time not
worked in almost 40 percent of the cases supports
these conclusions. It has been generally imprac
ticable, however, to isolate the effects of the plans
from the effects of improved business conditions,
general wage increases, promotions, merit raises,
and other factors, to obtain a more exact picture
of the plans’ effects on earnings.
2. Other Accomplishments
The conclusions of management and labor of
ficials who had operated with guarantee plans,
including some of those whose plans had been dis
continued, were decidedly favorable. The major
advantage reported— achievement of a sense of
security— has already been cited. This meant, in
terms of additional advantages cited by both
management and union officials, better labor re
lations, increased productivity in varying degrees,
and improved union security. From manage
ment’s point of view, the aid of the plans in re
taining key employees or attracting the services
of skilled workers constituted an important ad
vantage in several cases. Related benefits were
the frequently reported but difficult-to-demonstrate reduction in training costs, a reduction in
turn-over, and the use of the guarantee as an at
traction in the recruitment of employees. The
achievements of several of the major plans have
been cited in glowing terms by management
officials involved:
When questioned by a Bureau representa
tive concerning the benefits of the plan in
operation at the Nunn-Bush Shoe Co.’s
Milwaukee plant, Henry L. Nunn replied*
“ Any plan that will accomplish stabilized
production means a saving in equipment and
in overhead costs; and any plan that makes
for better jobs and better-satisfied workers
reduces the training costs. Our unemploy
ment tax has been very small since under our
system we do not have any unemployment.
No worker has been laid off due to slack work
since the plan started in 1935. Our labor
turn-over in comparison with like industries
in this vicinity has been exceedingly low.
The type of employee in our factory is high
class— above the average. The fact that the
worker in this plant immediately profits
through improved equipment and processes
makes such improvements very acceptable.
There is a consciousness of mutual profit in
efficient production that makes for good
morale. The employee not under the plan
also enjoys the regularity of employment that
the plan has given the business.”
Richard R. Dupree, president of the
Procter & Gamble Co., when describing his
firm’s employment guarantee in a speech at
the Conference on General Management of
the American Management Association’ in
October 1945, stated: “ * * * ffi our busi
ness great strides have been made in ability
to produce more units per man in the past 20
years. In fact, there has been a tremendous
development along these lines that has been
responsible for keeping costs down. We
EXPERIENCE W IT H GUARANTEE PLANS IN SELECTED CASES
found that once the plan was in effect, we
had no trouble getting our people to experi
ment and cooperate with us in working out
important procedures of production—such as
having, say four people on a line doing what
five used to do— because each man knew
that he was not going to lose his job if the
experiment were successful.” He went on to
stress another benefit accruing from opera
tion of the plan: “ I would say that the steady
employment plan is probably the greatest
thing in our company, the greatest single
factor— even greater than profit-sharing— in
producing good relationships.”
The effects of a guarantee upon hiring
practices were mentioned by Fayette Sher
man, employment manager at Geo. A. Hormell & Co. He said: “ There is the advantage
of having a skilled crew on the job at all
times. Customarily, when a gang is reduced
the good men find other jobs and do not re
turn, but the less desirable are back waiting to
be hired. The guarantee eliminates the time,
effort, and confusion, first, in deciding whether
it is the proper time to reduce the gang, and,
second, the confusion resulting from reducing
the gang. Employment needs for the future
can be estimated ahead of time and the per
sonnel department given an opportunity to
select new employees rather than ‘ hire at the
gate’ when the production in some depart
ments is to be increased.”
Few employers reported disadvantages resulting
from the plans. Costs were not regarded as dis
advantages, but as necessary features of the
guarantee, offset by compensating benefits. In
the few cases where employers pointed out specific
disadvantages, such as the heavy cost of ware
housing incurred by the McCormick Co. and re
luctance to accept new business which might
prove to be temporary in the case of the NunnBush Co., they nevertheless considered the net
value of the plan to be positive.
In one-fourth of all the cases, the plans had been
introduced at union behest, employers taking very
little interest in them. In two-thirds of these
cases, however, management reported that their
experiences under the plans had been favorable,
and that the plans had had a good effect on morale,
turn-over, or efficiency.
49
In a number of the cases where management
reported favorably upon experience under a guar
anteed wage plan, the guarantee features of the
plans had been very limited, either as to amount
of the guarantee or as- to the proportions of plant
workers covered. Management’s favorable reac
tion in these cases was a reaction to the limited
kinds of guarantee with which they had experi
ence, and which they in many cases refused to
characterize as “ guarantees” at all. In several
cases, their reaction to what they considered to be
a “ guaranteed wage plan” —formal guarantee of
a full year’s employment or wages to all or virtu
ally all of' their employees—was negative, hostile
or skeptical.
Union representatives and employees were, on
the whole, greatly impressed with the security
benefits which the plans had conferred, although
many of them stated that the plans would prove to
be more valuable during periods of depression than
they had been thus far. About 40 percent of the
union representatives interviewed indicated an in
tention or desire to press for amendment of the
plan to give more security— lowering of eligibility
requirements, extension of coverage to other em
ployees, increase in the amount of wages guaran
teed, or an increase in the number of years’ em
ployment covered by the guarantee. Their ap
proach to the problem of improvement was a
gradual one, but virtually all of them felt that the
plans could be improved or extended without
substantial risk.
Management officials in several cases be
lieved that the measures they had taken were
capable of adoption by industry in general. A
typical example of such opinion follows:
William Cooper Procter, who introduced
the guarantee of the Procter & Gamble Co.,
said in a statement shortly after the inaugura
tion of the plan: “ I do not think there is any
thing peculiar to the soap business that makes
such a plan more adaptable to it than to any
other industries. I believe that in the very
great majority of industries the average
annual consumption is approximately the
same, without much fluctuation from year to
year, and that the problem of providing for
■the distribution and warehousing is not a
difficult one to work out if study is centered
upon the special industry.”
APPENDIX
Basic data on 62 plans studied
[The data in this table relate to the status of the plans early in 1946
Name of company and
location
Business activity
Adelphi Paint & Color
Works, Ozone Park,
N. Y.
M a n u f a c t u r in g
paints and var
nishes.
(2) ......................................
Paper converters___
Union representation
at any time during
life of guarantee 1
United Gas, Coke &
C hemical Workers
of America, Local
121 (CIO).
Paper Printing Spe
cialties and Paper
Converters
(inde
pendent.)
(Not
party to plan.)
United Retail, Whole
sale & Department
Store Employees of
America (CIO).
None________________
Year of origin and
discontinuation
and eligibility re
Basic provisions of guarantee Coveragequirements
1939.
48 hours per week, 48 weeks
per year.
1937.
40 hours per week, 50 weeks
per year.
1942.
40 hours’ employment per
week, 52 weeks per year.
Basic crew size determined
by negotiation; coverage of
individuals by seniority.
First plan, 1931-32.
Second plan, 1939.
Wage advance obtained on
request. Advance to equal
difference between hours
earned and hours assigned
to class of workers as fol
lows: Class I—40 hours;
Class 11—50 hours; Class
III—60 hours. No limit to
wage advance for employ
ees with 5 years of service.
52 weeks’ employment per
year, based on 8-hour day
and 40-hour week, at not
less than negotiated week
ly minimum wage.
All employees. Employees
must have 2 years, 3
months of service in order
to qualify. Class I—Em
ployee with no dependents;
Class II—Employee with
1 dependent; Class III—
Employee with more than
1 dependent.
Production, shipping, and
maintenance department
workers with 6 months’
service.
All plant employees with
1 year of service.
(2)
Selling buttons and
buckles
(whole
sale) .
(2)
Manufacturing win
dow and door
frames.
(2)
Converters of textile
fabrics.
United Retail, Whole
sale and Depart
ment Store Employ
ees
of
America
(CIO).
1940.
Barlow & Seelig Manu
facturing Co., Ripon,
Wis.
M a n u fa c t u r in g
washing machines.
United Steelworkers
of America, Local
1327 (CIO).
1940-42.
$1,260 guaranteed for not
more than 2,000 hours’
work.
Operated under
Section 7 (b) (2).
Hourly paid employees.
Service requirement: First
contract, 1 year; Second
contract, 5 years.
( 2) .
Finishing
textiles.
Machine
Printers’
Beneficial
Assn.
(Independent).
1939.
Journeymen, printers, and
apprentices.
Berkshire
Knitting
Mills, Reading, Pa.
Manufacturing ho
siery.
None.
1936.
Full pay for any period in
year prior to July 15 and
half pay for any period
after July 15, during which
time worker is not em
ployed. Operated under
Section 7 (b) (2).
36 hours per week, 48 weeks
per year.
(2)
Surfacing roads and
driveways on a
contract basis.
Manufacturing dis
tilled liquor.
(2)
cotton
Cincinnati Gas & Elec
tric Co., Cincinnati,
Ohio.
P r o d u c in g an d
transmitting elec
tric power and gas.
Clark Sand & Gravel
Co., Baltimore, M d.
Operating gravel-pit
and ready-mixedconcrete trucks.
Colum bia Conserve
Co., Inc., Indianap
olis, Ind.
Canning food prod
ucts.
See footnotes at end of table, p. 60.
50
do.
Locals of
unions.
8
AFL
Int’l. Bro. of Electrical
Workers of America,
Local B-1347 (AFL);
Independent Utili
ties Union, Cincin
nati, Ohio, United
Mine Workers, Dis
trict 50, Local 12049.
None________________
Basic crew consisting of aver
age number of nonexecu
tive employees preceding
union organization or re
negotiation of agreement.
Knitters on 51-gauge hose;
toppers on 51-gauge hose;
knitters (leggers) on 45gauge nonrun hose. No
length-of-service require
ment.
Regular employees selected
by company.
1926....
Full pay, 52 weeks per year.
1939-45.
Weekly average of 40 hours’
employment per year.
Hours not worked in short
weeks debited against
overtime.
40 hours’ employment per
week, 52 weeks per year.
Warehouse and powerhouse
employees; service require
ment 6 months.
First plan—minimum week
ly pay varying according
to length of service for 52
weeks per year. Second
lan—Minimum of 40
ours’ pay per week for
52 weeks per year. Hours
paid for but not worked
debited against overtime
hours in excess ol 45 hours
and less than 50 hours per
week.
Annual salary paid weekly
with base rates adjusted
according to marital sta
tus and number of chil
dren.
Transit-mix drivers, bull
dozer and crane operators,
maintenance mechanics,
office and supervisory
staff. No length of service
requirement.
1941.
First plan, 1938-43.
Second plan, 1945—.
1917-42.
All regular full-time em
ployees; service require
ment, 6 months.
All departments covered.
Employees, to be eligible,
must (1) have a year of
service, i2) have an ex
pectancy of 10 years of
service, (3) be approved
by vote of the employees’
council.
A
by the Bureau of Labor Statistics
Changes which may have occurred since that time have not been incorporated]
percent
number Approximate
Safeguards and escape clauses Approximate
of total workers Basic reasons for introduction
of workers covered
covered
Employer’s obligation ceases
if sales drop below 80 per
cent of previous year.
40.
90 percent.
Termination at discretion of
management.
Firm spe
cifically reserves right to lay
off for lack of work.
35.
85 percent.
Size of basic crew may be re
duced by negotiation with
union upon permanent cur
tailment of the business.
Termination at discretion of
management.
30.
Reduction in size of basic crew
subject to union negotiation
upon presentation of evidence
showing need for crew of
lesser size. If no agreement,
may go to arbitration.
Plan may be suspended by
strikes, disasters, act of God.
Initiated b y -
Has company paid
for time not
worked?
To obtain security after ex
perience of depression. To
offer more than unemploy
ment compensation.
To provide security and
thereby avoid slow-downs
before seasonal lay-offs.
Joint initiation by
union and man
agement.
No.
Management_______
No.
70 percent.
To obtain security for basic
crew.
Union.
No.
350.
90 percent.
To assure employees greater
stability of income.
Management.
Wages advanced
under original
plan.
650 in 1945; 1,300 in
1941.
Not available.
To obtain security for basic
crew.
Union.
No.
247.
85 percent.
Joint initiation by
union and man
agement.
No.
None.
11.
3 percent.
To assure stability of employ
ment and earnings. To ob
tain exemption from over
time payments under Sec
tion 7 (b) (2) of Fair Labor
Standards Act.
Desire to increase job security.
Union.
Yes.
Plan may be suspended by
causes beyond company con
trol, Government order, or
lack of raw materials.
Number of workers in
covered occupations
has grown steadily
from 85 to 420 dur
ing life of guarantee.
Currently, 15 percent
To obtain security; to reduce
cost of 51-gage hose; to re
duce turn-over of knitters.
Employee proposaL. No.
Termination at discretion of
management.
8__ .
None_________________________
300.
100 percent in slack To hold trained employees.
Management.
season; about 30 per
cent in peak season.
35 percent-..................... To save overtime pay and to ____ do_______
give additional security.
Company guarantee subject to
its right to lay off for “ lack
of work or for other proper
and legitimate reason.”
2,500..
100 percent.
Stabilization program of com
pany had been successful
and plan was offered to pro
mote security and industrial
relations.
do.
No.
Plan is terminated upon dis
continuation of business.
44.
100 percent in slack,
60 percent in peak.
To hold trained personnel.
do.
Yes.
Plan may be modified by em
ployees’ council action.
Coverage varied from
year to year—76 in
June 1937,49 in June
1942.
Proportion varied sea
sonally—75 percent
in June 1937, 30
percent in Septem
ber 1937.
Guarantee integral part of
plan for cooperatively man
aged establishment.
do.
Yes.
Yes.
Yes.
51
52
GUARANTEED WAGE PLANS IN THE UNITED STATES
Basic data on 62 plans studied
[The data in this table relate to the status of the plans early in 1946
Name of company and
location
Business activity
Union representation
at any time during
life of guarantee 1
Year of origin and
discontinuation
Crocker-McElwain Co.
and affiliated Chemi
cal Paper Manufac
turing Co., Holyoke,
Mass.
Manufacturing pa
per.
Int’l Bro. of Paper
M a k e r s , E a g le
Lodge 1 (A F L ).
1921-36.
Cromwell Silver Manu
facturing Co., Long
Island City, N . Y .
Manufacturing sil
verware.
United Electrical, Ra
dio
&
Machine
Workers of America,
Local 1225 (CIO).
Int’l Chemical Work
ers Union (AFL).
(Not party to plan.)
January 1939-December 1939.
(3) -------------------------
M a n u fa c tu r in g
chemicals and fer
tilizers.
Decatur Newspapers,
Inc., Decatur, 111.
Publishing newspa
pers.
Detroit & Cleveland
Navigation Co., De
troit, Mich.
Operating
Great
Lakes passenger
and freight steam
ers.
(2).
Milling
flour.
I. J. Fox, Inc., Cleve
land, Ohio
Storing and repair
ing furs
Fur Merchants Em
ployers Council, New
York, N . Y .
Fur dealers________
The Furniture Special
ties Corp., New York,
N. Y.
Manufacturing up
holstered f u r n i
ture.
Gates Rubber Co., Denver, Colo.
M a n u f a c t u r in g
mechanical rub
ber goods.
(2)
M a n u f a c t u r in g
electrical appara
tus.
feed
See footnotes at end of table, p. 60.
and
Int’l Typographical
Union, Decatur T y
pographical Union
N o .15 (AFL), Int’l.
Printing Pressmen
& Assistants’ Union
of North America,
and Decatur Print
ing Pressmen and
Assistants’ Union
No. 161 (AFL).
Masters, Mates &
Pilots of America,
Locals 47 and 5
(AFL), Nat’l Ma
rine Engineers’ Ben
eficial Ass’n Local 3
(CIO); Int’l Long
shoremen’s Ass’n,
Locals 1324, 1654,
and 1326 (AFL).
Cereal W orkers’ Union
(AFL).
1939-40-
Printers, 1939-41.
Pressmen, 1938—.
Masters and mates,
1919—; p u r s e r s ,
1941—;
stewards,
1941—;
engineers,
1937—; checkers, De
troit, 1941-46; check
ers, Buffalo, 1938-46;
dock foremen and
clerks, Buffalo 194146.
1940.
Cleveland Fur Work- ___ d0.
ers Union, Local 86
(CIO).
Int’l Fur & Leather 1938...
W orkers’ U nion,
Local 64 (CIO).
U pholsterers I n t ’ l
U n io n of N o r th
America, Local 44
(AFL).
U n ite d R u b b er
Workers of Amer
ica, Local 54 (CIO).
(Not party to plan.)
None.
and eligibility re
Basic provisions of guarantee Coveragequirements
52 full weeks’ pay per year,
originally; in 1931, reduced
to 80 percent of full pay
for 44 weeks per year; in
1932, further reduced to 50
percent of full pay for 44
weeks.
40 hours for 45 weeks, and 3
days per week for 6 weeks.
Production, shipping and
maintenance employees.
5 years’ service require
ment. Must be recom
mended by 2 covered em
ployees and by supervisors
and accepted by company.
61 listed employees in pro
duction department.
Wage advance when weekly All hourly rated employees.
wage fell below 30 hours
Service re q u ire m e n t,
per week, equal to the dif
3 years.
ference between earnings
and 30 hours’ pay, up to a
maximum of 175 hours’
pay.
The printers’ plan operated Printers, pressmen, and
under section 7 (b) (2)
stereotypeis. No lengthfrom 1939-41.
Printers
of-service
requirement.
received 40 hours’ pay per
Must be union members.
week with overtime offset
by short weeks. Press
mens’ plan has operated
under Section 7 (b) (2)
since 1946. Pressmen re
ceived 40 hours’ work per
week.
Masters, 12 calendar months3, Masters, mates, pursers,
mates, 10 calendar months;3
s te w a rd s, e n gin eers,
purser, from 3 to 8 months,3
checkers, and other speci
varying according to ship
fied occupations.
or home port; engineers, 10
calendar months; 3 check
ers, 9 months’ continuous
work, 8 hours per day, 6
days per week; foremen
and clerks in Buffalo, fixed
monthly salary 12 months
per year; seasonal workers
in Buffalo, fixed monthly
salary during “ season of
navigation.”
48 hours’ employment per The 75 percent of hourly
week, 52 weeks per year.
employees who have the
greatest seniority are cov
ered.
35 hours per week, 38 weeks Fur machine operators, cut
per year.
ters, fur nailers, and hand
sewers.
40 hours’ pay per week. No All employees other than
covered worker may be
scrapers, temporary work
laid off.
ers, and those employees
earning over $51.50 per
week.
Service require
ment, 6 months.
1938-40.
Minimum of 24 hours of
work per week, 52 weeks
per year.
Upholsterers.
1938-39.
After 1 year of service, 1,600
hours per year; after 2
years of service, 1,700
hours; after 3 years of
service, 1,800 hours.
All production and service
occupations. Service re
quirement, 1 year.
1931-38.
1,500 hours per year.
Production, shipping, and
maintenance employees.
Service requirement, 1
year.
53
APPENDIX A.---- BASIC DATA ON PLANS STUDIED BY BLS
by the Bureau o f Labor Statistics— Continued
Changes which may have occurred since that time have not been incorporated]
Safeguards and escape clauses
Approximate number
of workers covered
Approximate percent
of total workers
covered
Company reserves right to
terminate agreement under
conditions which in opinion
of company make it power
less to continue it, upon giv
ing 4 weeks’ notice.
1921—80;
1931—120;
1932—125; 1937—165.
1921—50 percent; 1931
—65 percent; 1932—
75 percent; 1937—85
precent.
None___________________ _____
60
Plan may be modified at discre
tion of management.
400________________ . . .
Plan may be discontinued if
publication is suspended by
act of God, strike, riot, civil
commotion, acts of civil or
military authorities, or other
causes beyond the control of
union or publisher.
Has company paid
for
time not
worked?
Basic reasons for introduction
Initiated by—
To provide stability of earn
ings; to help maintain an
open shop.
Management______
Yes.
Served as a compromise in lieu
of wage increase during
contract negotiations.
Joint initiation by
union and man
agement.
No.
88percent___________
Suggested by union as means
of providing increased sta
bility of employee income.
Union
Wages advanced.
Total number of print
ers and pressmen—
46, in 1941; 13, in
1946.
26 percent, in 1941; 7
percent, in 1946.
To keep qualified workers for
peak requirements; to in
crease productivity.
M anagement_____
Yes.
Company may discontinue
services of masters, mates,
stewards, and engineers in
the event of a major marine
disaster, condemnation of a
ship, or commandeering by
governmental authority.
Total covered employ
ees fluctuate through
out year, owing to
varying lengths of
different guarantees.
Average figure is
about 100.
Percentage
covered
varies from about
40 percent in slack
period to 7 percent
in peak.
To obtain income stability;
on company’s part, to retain
licensed and trained em
ployees.
Union____________
Yes.
None__________________________
Not available _ __
75 percent ______
To improve labor relations
and employee morale.
Management_______
Yes.
To increase stability of em
ployment.
Union. _____ _______
Yes.
____ do. _______________________ 13
Status of regular employee may
be changed in the event of
the merger or liquidation of
business, subject, however,
to decision of arbitrator. In
case of seriously adverse busi
ness conditions requiring re
duction in personnel, union
agrees it would not unreason
ably withhold consent to re
duction. Employee may be
replaced by another on July 1
of each year.
_____________________
None
Company reserves right of lay
off in event of curtailed oper
ation caused by war, act of
God, casualty, labor trou
bles, expropriation of plant or
part thereof, lack of mate
rials, delay in transporta
tion, or any other like cause
beyond company’s control.
Company reserved right to
modify, revise, or extend
plan.
_________________
.
____
20percent___
__ _
________
165___________________
50 percent____________
To improve morale and labor ____ do....... .................. No.
relations.
12____ _______________
80 percent......................
Compromise offer during con
tract negotiations.
1,375
.................
75 percent
To improve employer-em ........ do___ ______ __
ployee relations; to provide
greater security.
No.
7,000
_______ ____
65 percent
To provide stability of earn ____ do.........................
ings. Stabilized operations
made plan feasible.
Yes.
_
. .......
Management_______
No.
54
GUARANTEED WAGE PLANS IN THE UNITED STATES
Basic data on 62 plans studied
[The data in this table relate to the status of the plans early in 1946.
Union representation
at any time during
life of guarantee 1
Year of origin and
discontinuation
Name of company and
location
Business activity
General Motors Corp.,
Detroit, Mich.
Manufacturing au
tomobiles.
United
Automobile
Workers of America
(CIO). (Not party
to plan.)
M a n u f a c t u r in g
men’s and boys’
apparel.
Amalgamated Cloth- 1937.
ing
Workers
of
A m erica ( C I O ) .
(Not party to plan.)
N one.............................. 1939.
<2) .......................................................................................—
Good Humor Ice Cream
Co., Baltimore, M d.
Manufacturing
cream.
Grand Rapids Whole
sale Grocery Co.,
Grand Rapids, Mich.
Selling groceries
(wholesale).
Greenville Finishing
Co., Greenville, R . I.
D yeing, printing,
and finishing tex
tiles.
Geo. A. Hormel & Co.,
Austin, Minn.
Meat packing..
United Packinghouse
Workers of America,
Local 9 (CIO}.
(2)
Automobile
srles
and service.
United Automobile
Workers of America
(CIO).
1940.
None.
1942.
do
The George A. Lewis
Co., Danbury, Conn.
( 2) -----------------------------------------
( 2) ----------------------------------------McCormick & Co., Inc.,
Baltimore, M d.
ice
1939-41.
Int’l Bro. of Team
sters,
Chauffeurs,
Warehousemen &
Helpers of America,
Local 406 (AFL).
(Not party to plan.)
M achin e p rin te rs’
Beneficial A ss’ n.
(Independent).
Selling costume jew
elry (wholesale).
United Retail, Whole
sale & Department
Store Employees of
America (CIO).
Manufacturing soap. United Soap Workers,
Local 366 (CIO).
Manufacturing food None.______ _________
specialties.
(2)
G enerating and
transmitting elec
tric power.
T h e N am m Store,
Brooklyn, N . Y .
Department store.
See footnotes at end of tabic, p. 60*.
Brotherhood of Util
ity Workers of New
England (Independ
ent).
None__................... ......
and eligibility re
Basic provisions of guarantee Coveragequirements
Income
security plan—
Wage advance to em
ployee earning less than
60 percent of standard
weekly earnings, equal to
the difference between his
earnings and 60 percent
of the standard week, up
to a limit of 360 hours’ pay.
Lay-off benefit plan—Wage
advance to employee earn
ing less than 40 percent of
standard weekly earnings,
equal to the difference be
tween earnings and 40
percent of the standard
week, up to a maximum
of 72 hours’ pay.
52 weeks’ salary, number of
hours varying according
to job classification.
Income
security plan—
Hourly rated employees
under 64 years who had
completed 5 years of serv
ice and had worked for
the company during a
given month designated
by the president.
Lay-off benefit
plan—
Hourly employees under
64 years not eligible under
income security plan with
2 years’ service and who
had worked during desig
nated month. Employ
ees failing to work be
cause of sickness are
eligible.
Specified job classification
and selected key employ-
48 hours per week from
October to March (slack
period).
Key employees of all de
partments, including sales
and office, selected in
October of each year.
Warehousemen, dockmen,
and drivers.
1919__________________
47 hours’ employment per
week, 52 weeks per year.
1940. — L ap sed 8
months in 1942, 13
months 1943-44, dur
ing which periods
guarantee of half pay
for any 13 weeks
during the year in
which workers were
idle was in effect.
1931____ _____________
Annual wage, payable in
52 weekly installments;
fluctuating work week.
Under Section 7 (b) (2).
Journeymen printers, upon
hiring.
52 weeks’ employment per
year. Average workweek
varies from 34 to 40 hours.
Under Section 7 (b) (2).
All employees exclusive of
part-timers, extras, or em
ployees hired for a specific
temporary period are cov
ered as soon as hired.
Mechanics and porters listed
by name.
52 full weeks’ work per
year. Workweek for me
chanics is 40 hours; for por
ters, 44.
52 weeks’ minimum wage
per year.
Mechanics and body repair
men covered upon being
hired.
Basic crew covered. Vacan
cies in crew filled on basis
of seniority.
1940—
No lay-off for 52 weeks.
W orkweek is 40 hours.
1942— .
52 full weeks’ employment
per year.
Assurance of 48 weeks’ em
ployment per year with
intent but no guarantee
to provide 40 hours’ work
per week.
2,000 hours’ employment
per year. Under Section
7 (b) (2).
Firemen and watchmen after
30 days’ service.
All efficient and competent
plant and office workers
after 6 months’ service.
52 weeks’ employment for
those with more than 5
years’ service; 48 weeks, 3
to less that 5 years; 44
weeks, 1 % to less than 3
years; 40 weeks, 1 to less
than l ] 4 years.
Em
ployees may be transferred
to part time (28 hours per
week) on seniority basis.
All regular nonexecutive
workers on pay roll after
1year’s service.
1936....
1940-41.
1939-43.
All employees except office
workers, upon hiring.
55
APPENDIX A.---- BASIC DATA ON PLANS STUDIED BY BLS
by the Bureau o f Labor Statistics— Continued
Changes which may have occurred since that time have not been incorporated]
percent
number Approximate
Safeguards and escape clauses Approximate
of total workers Basic reasons for introduction
of workers covered
covered
Initiated b y -
Has company paid
for time not
worked?
Corporation may modify or
suspend plans in event of
fire, floods, wars, riots, or
labor disputes in any plant
of corporation or suppliers,
or for circumstances beyond
control of management, or in
case of change through legis
lation or otherwise in stand
ard workweek.
156,000.
60 percent.
To assist employees during
periods of short employ
ment or no employment,
and to avoid difficulties in
volved in cash loans.
Plan may be canceled, revised,
or extended at will of em
ployer.
10.
50 percent.
To hold trained employees.
do.
No.
Company may terminate plan
at time it desires.
40.
100 percent
To hold key employees.
do.
Yes.
Company may revise or ter
minate at any time.
32.
67 percent.
To attract steady, reliable
workers.
do.
Yes.
3 percent.
Union desired security; man
agement accepted plan to
receive benefits of Section
7 (b) (2).
Union.
Yes.
None.
in slack
period, 35 percent in
peak.
-Management.
Wages advanced.
.do.
3,900.
80 percent.
Management wished to stabil
ize workers’ income and
reduce turn-over.
Management.
Yes.
do.
13.
60 percent.
Union demand substituted in
lieu of a denied wage in
crease.
Union_______
No.
11.
39 percent.
To retain trained workers.
Management.
No.
55.
73 percent .
To assure security for basic
crew.
Union
No.
Management may modify, revise, or cancel plan at any
time.
Employees may be laid off 1
week if business drops 10 per
cent below stipulated level.
12 .
3 percent-..
575.
100percent.
Demonstration
of
union ____ do_______
strength.
To increase stability of income Management
and employment.
No.
Senior board of directors may
modify, revise, or cancel plan
at any time.
None.
125.
91 percent.
To secure overtime exemp
tions of Section 7 (b) (2).
do:
No.
920.
67 percent.
To provide additional employ
ment security.
.do.
No.
None.
.do.
No.
56
GUARANTEED WAGE PLANS IN THE UNITED STATES
Basic data on 62 plans studied
[The data in this table relate to the status of the plans early in 1946.
Name of company and
location
Business activity
National Battery Co.,
St. Paul, Minn.
Manufacturing bat
teries.
National
Oats
Co.,
Cedar Rapids, Iowa.
M anufacturing cere
als.
(2)
Limited price vari
ety store chain.
Union representation
at any time during
life of guarantee 1
Year of origin and
discontinuation
Employees in firm’s
plants covered by
various locals of
Int’l Bro. of Elec
tr i c a l W o r k e r s
(AFL); Int’l Bro.
of Teamsters (AFL);
Int’l Ass’n of M a
chinists (AFL); and
United Automobile,
Aircraft & Agricul
tural Implement
Workers of America
(CIO): Federal La
bor Union 23619
(AFL).
American Federation
of Grain Processors
Council (AFL).
1940.
United Retail, Wholesale & Department
Store Employees of
America (CIO) cov
ers 30 Detroit stores.
In t’l P r o t e c t i v e
Ass’n (AFL) covers
1Racine, Wis., store.
Remainder of chain
is nonunion.
Industrial Union of
Master Craftsmen;
Nunn-Bush Office
Employees Union;
Nunn-Bush Ship
ping Department
Union.
40 hours’ work each week
except those during which
inventory is taken or an
unworked holiday oc
curs, at which times the
workweek is 32 hours.
All plant workers. Lengthof-service requirem ent
varies in the different
plants from 49 to 90 days’
service.
1,664 hours of employment
per year, plus paid vacation.
All plant employees with 3
years’ service,
1938.
42 full-time weeks (not to
exceed 48 hours per week)
and 10 36-hour weeks of
employment per year.
Sales and office employees
with 1 year’s service.
1935.
Management sets aside an Wagesofall workersnot sub
agreed percentage of the
ject to lay-off and all other
value of production as
employees with 2 years’
labor’s share. There is
service are determined on
established for each cover
the basis of their participa
ed employee a drawing
tion in the Share-the-Proaccount based on his esti
duction Fund.
mated annual income,
H 2 of which is to be with
drawn weekly from the
fund representing labor’s
share of the production.
Adjustment with actual
earnings is made periodi
cally. The 595 workers in
the production depart
ments with greatest senior
ity and the 70 percent of
office and shipping depart
ment workers with great
est seniority are not sub
ject to lay-off.
Employees are not to be All nonexecutive employees,
except office workers and
laid-off more than 20 days
drivers, who have re
per year.
ceived “ regular card”
from union.
Nunn-Bush Shoe Co.,
Milwaukee, Wis.
M a n u f a c t u r in g
men’s shoes.
(2)
Brewing and distrib
uting beer.
Int’l Union of United
Brewery, Flour,'Ce
real, and Soft Drink
Workers of America.
About 1890.
Parker Manufacturing
Co.,
Worcester 1,
Mass.
( 2) -------------------------------------
M anufacturing
hand tools.
None.
1938.
Brewing and distrib
uting beer.
Int’l Union of United About 1890Brewery, Flour, Ce
real, and Soft Drink
Workers of America.
Procter & Gamble Co.,
Cincinnati, Ohio.
Manufacturing soap. Ivory dale and St.
Bernard Employees’
Representat ion
A s s ’ n (independ
ent) in the Cincin
nati area. Various
unions are involved
at the other plants.
(Not party to plan.)
See footnotes at end of table, p. 60.
and eligibility re
Basic provisions of guarantee Coveragequirements
1923.
1,800 hours’ pay annually__
All plant and office employ
ees with 5 years’ service.
5 days of 8 hours’ work per
week during busy season
(Apr. 15-Oct. 15) and 4
days of 8 hours work per
week during the other 6
months’ (dull season).
Employment for 48 full
weeks (or time equivalent)
per year.
All workers except office
and maintenance employ
ees who have been desig
nated as “ bookmen” by
union.
All hourly employees with
2years’ service.
57
APPENDIX A.---- BASIC DATA ON PLANS STUDIED BY BLS
b y th e B u rea u o f L a b o r S ta tistic s — Continued
Changes which may have occurred, since that time have not been incorporated]
Safeguards and escape clauses
Management may lay off
employees according to seniority at any time, upon
giving 5 days’ notice.
percent
Approximate number Approximate
of total workers Basic reasons for introduction
of workers covered
covered
1,450 (on
list),
Time lost because of shut-down 50___
of mill caused by fires, strikes,
riots, tornadoes, cyclones, ex
plosions, floods, military or
civil commotion, or other
causes beyond control is de
ducted from guarantee period.
None.............................................. 2,385.
do.
Covered workers’ employ
ment may be terminated,
other than for cause, only if
plant shuts down or output
is affected by act of God, fire,
explosion, or other cause be
yond firm’s control.
Management may modify, re
vise, or cancel plan at any
time.
In severe slack period, manage
ment may reduce workweek
to 3 days per week by agree
ment with union. If business
ceases, plan is terminated.
Workweek may be reduced to
75 percent of normal at man
agement option, or firm may
withdraw guarantee at any
time.
seniority
75 percent
35 percent.
To provide employment se
curity.
.do.
Initiated by—
Has company paid
for time not
worked?
Union.
No.
Management..
Yes.
.do.
No.
44 percent.
To attract employees and im
prove labor relations.
615.
66percent..
To provide income security.
100.
59 percent.
To provide security for top
seniority workers.
Union.
Yes.
75..
33 percent.
Granted primarily as a reward
for long service.
Management,
No.
210.
57 percent.
To provide security for top
seniority workers.
Union_______
Yes.
3,800.
49 percent.
To provide security.
Management.
No.
____ do____
During 1937-38 re
cession, the firm
produced in ex
cess of demand
in order to main
tain the level of
employee earnnings, thus, in
effect, advancing
employment
ra ther than
58
GUARANTEED WAGE PLANS IN THE UNITED STATES
Basic data on 62 plans studied
[The data in this table relate to the status of the plans early in 1946.
Name of company and
location
Business activity
Union representation
at any time during
life of guarantee 1
Year of origin and
discontinuation
(2)
Manufacturing cere
als.
Food, Tobacco, Agri
cultural & Allied
Workers Union of
America (CIO).
1934.
(2)
W om en’s apparel United Retail, Whole
retail store (chain).
sale & Department
Store Employees of
America (CIO).
1936.
Retail and Wholesale
Shoe Stores, New
York, N . Y .
Retail and wholesale shoe stores.
United Retail, Whole
sale & Department
Store Employees of
America, Locals 1268
and 287 (CIO).
1936.
(2)
Manufacturing
w o m e n ’ s and
misses’ dresses.
International Ladies’
Garment Workers’
Union (AFL).
1937.
Richmond Piece Dye
Works, Inc., R ich
mond Va.
Dyeing and finish
ing textiles.
T e x t i l e Wo r k e r s
Union of America,
Local 27 (CIO).
1940.
(2)
Manufacturing sil
verware.
None.
1936-42.
Seaboard Air Line Rail
way Co.4. Norfolk,
Va.
Railroad
Railway Employes’ 1928.
Department, Sys
tem Federation No.
39 (AFL).
( 2)
Mail order
store.
(2)
retail
and eligibility re
Basic provisions of guarantee Coveragequirements
140 hours of employment
per month while on pay
roll. If laid off, em ployees
receive 70 hours’ pay per
month for periods varying
according to length of
service: 6 months to less
than 1 year’s service—2
months per year; 1 year to
less than 2 years’ service—
3 months per year; 2 years
to less than 3 years’ serv
ice—4 months per year; 3
years and over—6 months
per year.
11 months’ employment per
year for “ steady employ
ees,” 35 weeks’ employ
ment per year for “ steady
extra employees.”
Full-time workers guaran
teed 52 44-hour weeks’
employment per year,
part-time workers guaran
teed employment for 3 full
days or 3 nights and Satur
day each week, 52 weeks
per year.
1,800 hours of employment,
exclusive of overtime, per
year.
All plant employees with 6
months’ service.
Minimum of $18 per week
guaranteed to males and
minimum of $15 per week
guaranteed to females, for
duration of union contract.
Full week’s pay guaranteed
for 52 48-hour weeks per
year.
Employment for 52 48-hour
weeks per year.
All union employees with at
least 1 year’s service
All members of the union
upon hiring. The union
covers only sales clerks.
All nonexecutive store em
ployees after 2 weeks’ pro
bationary period.
All members of the base
crew, in which vacancies
are filled by election of
union and management
from plant work force.
Journeyman and apprentice
silversmiths, upon hiring.
Maintenance workers in
cluded on basis of sen
iority in “ m i n i m u m
force.” size of which is ne
gotiated each year by
company and union.
None.
1936.
Wage advance—employees
receive 40 hours’ pay
52 weeks per year.
All mail order employees
with 24 weeks’ service who
have worked 480 hours.
Manufacturing
women’s coats.
Int’l. Ladies’ Garment Worke rs ’
Union (AFL).
1939.
35 hours’ employment guar
anteed for 50 weeks per
year.
Spiegel, Inc., Chicago,
Mail order
store.
None.
1939.
Males guaranteed 40 hours’
employment 52 weeks per
year; females, 36 hours’
employment 52 weeks per
year.
All cutters, sewing machine
operators, finishers, and
pressers
after
1-week
probationary period.
All employees except up
holsterers, finishers, and
cabinet makers, after 1 A
years’ service and 3,000
hours’ actual work.
The Tremco Manu
facturing Co., Cleve
land, Ohio.
Uneeda Cleaning &
Dyeing Co., Inc.,
Hillside, N . J.
M anufacturing
paints, varnishes,
and lacquers.
Cleaning and dye
ing apparel.
Tremco Employees’
Association (Inde
pendent) .
1938-43.
40 hours’ pay for 52 weeks
per year. Operates under
Section 7 (b) (2).
40 hours’ pay for 52 weeks
per year.
(2)
M anufacturing
baby carriages.
None
111.
See footnotes at end of table, p. 60.
retail
1918___
1938-42.
1,760 hours’ employment per
year, plus paid vacation.
All production employees,
upon hiring.
Spotters,
washers,
dry
cleaners, examiners, solici
tors, drivers, cleaners,
steamers, skilled tumbler
men, upon hiring.
All employees (except sales
men) with 1 year’s service.
59
APPENDIX A.— BASIC DATA ON PLANS STUDIED BY BLS
b y th e B u rea u o f L a bor S ta tistic s — Continued
Changes which may have occurred since that time have not been incorporated]
Approximate percent
of total workers
covered
Basic reasons for introduction
None____ _____________________ 945
78 percent-___ ______
To insure income during lay
offs.
Liquidation of firm or depart
ment cancels obligation to
affected workers.
22
34 percent________ ____ To provide security for basic
crew.
None.
2,500
Not available.
Safeguards and escape clauses
_____________________
Approximate number
of workers covered
Management may withdraw
the guarantee in the event
of a garnishment, wage as
signment, or other legal
process. Plan may be ter
minated by decision of the
board of directors.
None
_______________
do
Has company paid
for
time
not
worked?
__ _ Yes.
Union_____ ___ _ _ No.
____ do______________
___________
Yes.
No.
84 percent-__ ________
To grant income stability and
reduce turn-over.
Management
union.
and
Yes.
22
100 percent— ________
To attracted skilled workers.
Management_______
Yes.
2 300
11 percent,______ _ - To increase security; to elimi
nate extreme fluctuations in
employment.
Union______________
No.
lf> 000
38 percent- _ ________
To provide stable income.
Management___
W a ges
45
63 percent. __________
To stabilize employment; to ____ do______________
secure wage reduction.
3,400
65 percent.................. . To improve employee rela ____ do____________ 1tions; to stabilize employ
ment.
Yes.
25 percent____________
____ do______________
No.
32 percent___________ ____ do________________________
U nion--.._________
No.
62 percent. ............... . _ To reduce absenteeism and
large volume of wage gar
nishments.
Management_______
No.
30
32
Management may cancel guar 150
antee if act of God or other
condition beyond firm’s con
trol makes it necessary.
1
To provide security.
Management
51 percent______ _____ Proposed by union when wage ____ do
demand was only partially
met.
Management may withdraw 500
guarantee upon granting 5
percent general increase.
Time lost during shut-down
due to fire, tornado, explo
sion, or other cause beyond
control deducted from guar
antee. Plan is terminated if
business is discontinued.
None__________________________ 180
Management may modify, re
vise, or cancel plan at any
time.
Each party has right to initiate
review of number in mini
mum work force any time
after Jan. 31. If situation ari
ses which would seriously af
fect either party, a conference
must be held between man
agement and union com
mittee. If agreement is not
reached, either party may
cancel contract by giving 10
days’ written notice.
Management may modify, re
vise, or cancel plan at any
time or may terminate any
individual’s employment at
any time.
None
- ___________________
_____
Initiated by—
____
To provide security.
No.
advanced.
60
GUARANTEED WAGE PLANS IN THE UNITED STATES
Basic data on 62 plans studied
[The data in this table relate to the status of the plans early in 1946.
Name of company and
location
Business activity
Western States Enve
lope Co., Milwaukee
4, Wis.
Manufacturing
envelopes.
Union representation
at any time during
life of guarantee 1
Year of origin and
discontinuation
and eligibility re
Basic provisions of guarantee Coveragequirements
Employees’
Representative Commit
tee (Independent).
None________________
1937_.
35 hours’ employment for 52
weeks per year.
All employees with 5 years'
service.
1938..
40 hours’ employment, 52
weeks per year.
All employees (except parttime workers) with 6
months’ service.
All employees with 5 years’
service prior to Dec. 15 of
the year preceding date
contract takes effect.
(?)-------------------
Men's retail cloth
ing store.
Wisconsin Public Serv
ice Corp„ Milwaukee,
Wis.
P r o d u c i n g and
transmitting elec
tric power and
gas; operating mo
tor and bus carri
ers.
Int’l Union of Operat
ing Engineers, Local
310 (AFL).
1937. .
40 hours’ employment, 52
weeks per year, for a 2year period.
Wm.
Wrigley, Jr.,
Co., Chicago, 111.
Manufacturing chew
ing gum.
None..
1934.
U nem ploym ent benefits All employees with 6 months’
paid during lay-offs for
service.
periods varying, accord
ing to length of service,
from 1 to 7 months per
year for monthly employ
ees and from 4 to 30 weeks
per year for hourly em
ployees.
Payments are
made on the following
basis:
Monthly employees receiv
ing $100 or less per month
—80 percent of base rate;
receiving more than $100
and not more than $200—
$80 plus 60 percent of differ
ence between base rate
and $100; receiving more
than $200 and not more
than $300—$140 plus 40
percent of difference be
tween base rate and $200;
receiving more than $300
and not more than $400—
$180 plus 20 percent of dif
ference between base rate
and $300; receiving more
than $400 and not more
than $500—$200 plus 10
percent of difference be
tween base rate and $400.
Hourly employees receiving
58 cents or less per hour—
80 percent of base pay; re
ceiving more than 58 cents
and not more than $1.16
per hour—$18.56 plus 60
percent of difference be
tween base rate and $1.16;
receiving more than $1.16
per hour—$32.48 plus 40
percent of difference be
tween $1.16 and base rate.
1 In cases where representation of the workers changed during the life of the guarantee, only the most recent situation is reported. In the following cases,
representation changed during the life of the plan: Employees of the Cincinnati Gas & Electric Co. were represented only by the independent utilities union
at the time the plan was inaugurated; the A FL and CIO locals were organized later. The union representing Crocker-McElwain employees at the time a
guarantee was proposed lost its bargaining rights shortly thereafter.
The union at Gates Rubber Co. was organized after the establishment of the guarantee, which is not a part of the union agreement. Workers of Grand
Rapids Wholesale Grocery were organized after the guarantee was begun. At the time the Hormel plan was started, workers were represented by an independ
ent union which later affiliated with the United Packinghouse Workers of America (CIO).
2 Identification withheld at request of company or union.
3 Calendar month—30 workdays per month, 8 hours per day.
* Seaboard Air Line Railroad Co. since Aug. 1, 1946.
APPENDIX A.---- BASIC DATA ON PLANS STUDIED BY BLS
61
b y th e B u rea u o f L a bor S ta tistic s — Continued
Changes which may have occurred since that time have not been incorporated]
Has company paid
for
time
not
worked?
Approximate number
of workers covered
Approximate percent
of total workers
covered
Basic reasons for introduction
Management may withdraw
guarantee if raw materials
are unavailable.
M ay be canceled at management’s option.
40.
60 percent.
To provide security.
Management.
No.
25.
77 percent .
To improve relations.
____do_______
No.
Workers may be transferred
from departments where op
erations have been curtailed
or discontinued, to other de
partments at a reduced wage
to work out balance of 2-year
period. Employee is paid
difference between his new
wage and his previously
established wage for a period
of 6 months.
In the event conditions of busi
ness or acts beyond manage
ment’s control do not permit
restoration of laid-off employ
ees to work, management
may terminate the guaran
tee for such employees.
700.
Safeguards and escape clauses
2, 000.
do.
100 percent.
Initiated b y -
To provide security.
do.
No.
To provide income security.
do.
Yes.
Appendix B.—Clauses Used in Guarantee Plans and Contracts
Sample Guarantee Provisions
The following compilation of guarantee clauses
found in union agreements or written descriptions
of guarantee plans is intended for the guidance
of management and union officials who may wish
to draw upon the experience of others in framing
the language of a guaranteed wage or employ
ment plan, or incorporating a guarantee provision
in a collective bargaining contract. The clauses
cover a wide variety of examples and are classified
in categories which are descriptive of the basic
features of the plans analyzed in the Bureau of
Labor Statistics survey. A cross-reference index,
of the plan clauses, by industry, will be found at
the end of this appendix (p. 89).
Included in these classifications are clauses
illustrative of guarantees for periods ranging
from 3 months to a full year and varying in cover
age from a specified number of workers or occu
pations to all (nonexecutive) employees.
The clauses have also been selected to exem
plify variations in employee eligibility require
ments (where they exist) and the range of con
ditions (if any) which permit modification or
suspension of the guarantee.
C ATE G OR IES
IN T O
W H IC H
GUARANTEE
PR OVISIONS
HAVE
B E E N C LASSIFIED
I. A full year’s guarantee to all (nonexecutive) em
ployees.
A. Plans with employee eligibility requirement:
1. With provision for modification or abro
gation of plan.
2. Without provision for modification or
abrogation of plan.
B. Plans without employee eligibility requirement:
1. With provision for modification or abro
gation of plan.
2. Without provision for modification or
abrogation of plan.
II. Less than a year’s guarantee to all (nonexecutive)
employees.
A. Plans with employee eligibility requirement.
1. With provision for modification or abroga
tion of plan.
62
2. Without provision for modification or
abrogation of plan.
B. Plans without employee eligibility requirement.
1. With provision for modification or abroga
tion of plan.
2. Without provision for modification or
abrogation of plan.
III. A full year’s guarantee to part of the working force.
A. Plans with employee eligibility requirement.
1. With provision for modification or abroga
tion of plan.
2. Without provision for modification or
abrogation of plan.
B. Plans without employee eligibility requirement.
1. With provision for modification or abroga
tion of plan.
2. Without provision for modification or
abrogation of plan.
IV. Less than a year’s guarantee to part of the working
force.
A. Plans with employee eligibility requirement.
1. With provision for modification or abroga
tion of plan.
2. Without provision for modification or
abrogation of plan.
B. Plans without employee eligibility requirement.
1. With provision for modification or abroga
tion of plan.
2. Without provision for modification or
abrogation of plan.
V. Wage advance plans.
VI. Declaration of intention to inaugurate a guarantee.
ID EN TIFIC ATIO N
Each clause, paragraph, or series of paragraphs
from a separate contract or written description
of plan is designated by a serial number. The
industry, labor organization involved (if quoted
from an agreement), and affiliation of the labor
organization are indicated immediately following
the serial number in order to give the reader an
idea of the industry into which the plan has been
introduced and the representaion of the workers.
The labor organizations are indicated by initials
only. The following is a list of the full names of
the organizations and the initials used:
63
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
Initials
TC (A F L )____________ Inti. Bro. of Teamsters, Chauf
feurs, Warehousemen & Help
ers of America.
Initials
Labor organization
ACW (C IO )__________ Amalgamated Clothing Workers
of America.
AFM (A F L )__________ American Federation of Musi
cians.
BCJ (A F L )___________United Bro. of Carpenters &
Joiners of America.
BFC (C IO )___________Inti. Union of United Brewery,
Flour, Cereal & Soft Drink
Workers of America.
BPM (A FL)__________ Inti. Bro. of Paper Makers.
CTU (A F L)__________ Commercial Telegraphers Union
of North America.
CW (A F L)___________ Cereal Worker’s Union (Federal
Labor Union).
EA (Ind.) ___________ Employees’ Association.
E R M W (C IO )________ United Electrical, Radio & Ma
chine Workers of America.
FSC (A F L )___________Federated Shop Crafts (Railway
Employees’ Department).
FSES (Ind.)__________ Friendly Society of Engravers &
Sketchmakers, Inc.
FTA (C IO )___________ Food, Tobacco, Agricultural &
Allied
Workers
Union of
America.
FW (C IO )____________ Inti. Fur & Leather Workers’
Union.
GP (A F L )____________ American Federation of Grain
Processors Council.
HLU (Ind.)__________ Harlem Labor Unions.
H R (A F L )____________Hotel & Restaurant Employees’
Inti. Alliance & Bartenders’
Inti. League of America.
ILA (A F L)___________ Inti. Longshoremen’s Assn.
ILG (A F L)___________ International Ladies’ Garment
Workers’ Union.
M E (C IO )____________Natl. Marine Engineers’ Bene
ficial Assn.
M M P (A F L )_________ Masters, Mates, & Pilots of
America.
MP (In d.)____________ Machine
Printers
Beneficial
Assn.
NEUA (Ind.)_________ New England Utilities Alliance.
OE (A F L )____________ Inti. Union of Operating En
gineers.
OPW (C IO )__________ United Office & Professional
Workers of America.
PDP (A F L)__________ Bro. of Painters, Decorators &
Paperhangers of America.
PPA (A F L )___________Inti.
Printing Pressmen’s &
Assistants’ Union of North
America.
RC (A F L )____________ Retail Clerks Inti. Protective
Ass’n.
R W D (C IO )__________Retail, Wholesale & Department
Store Union.
SW (C IO )____________ United Soap Workers (Local
Industrial Union).
Labor organization
TW U (CIO)__________ Textile Workers’ Union of Amer
ica.
UAW (CIO)__________ United Automobile, Aircraft &
Agricultural Implement Work
ers of America.
UIU (A F L )___________Upholsterers’ Inti. Union of
North America.
UM W (A FL)_________ United Mine Workers of America
UPW (C IO )__________ United Packinghouse Workers
of America.
USW (C IO )__________ United Steelworkers of America.
I. A Full Year’s Guarantee to all Employees
A guarantee may consist of an assurance of either
income or employment. A full year’s guarantee is
generally expressed in terms of (1) a specified amount of
wages per week (at stipulated hourly rates) for 52 weeks,
(2) a total sum of wages for the year, (3) employment for
52 weeks per year (at a specified number of hours per week
and rate per hour), or (4) employment or wages for 2,080
hours (regardless of weekly fluctuations). A guarantee to
a ll employees generally applies to all nonexecutive em
ployees and excludes all above the level of working foremen.
“ All employees” may include only factory workers; the
office force may be excluded. Casual, temporary, or extra
shift workers may also be excluded from coverage, either
by explicit statement or without formal provision.
In some cases the guarantee appears as a prohibition
against lay-offs for the duration of the agreement (usually
1 year), rather than as a positive guarantee.
A. PLANS W ITH EM PLOYEE E L IG IB IL IT Y
QU IREM EN T
RE
Coverage in some plans is restricted to employees who
have been in the company’s employ for a specified period,
ranging anywhere from a 1- or 2-weeks’ probationary
period to a 5-years’ service record. Where eligibility
applies to those who have qualified as “ permanent,”
“ regular,” “ qualified,” or “ eligible” employees, these
terms are generally defined in another section of the
agreement or written description of the plan as requiring
a probationary period of service.
1. P l a n s
W it h
E l ig ib il it y
R e q u ir e m e n t
P r o v is io n f o r M o d if ic a t io n
or
and
W it h
A b r o g a t io n
of
P lan
Some guarantees include a provision placing certain
limitations on the employer’s financial responsibility,
either (1) specifying the amount to be expended for the
purpose of the guarantee, (2) permitting the employer to
modify the plan in the event of a serious decline in business,
or (3) reserving to him the right to suspend or terminate
the guarantee in case of strike, flood, fire, war, or other
contingencies beyond his control.
1.
F lou r m ill— G P (A FL)
G u a r a n te e d
W o r k w e e k : (A) During the term of this
agreement the “ company” agrees to guarantee to all
64
GUARANTEED WAGE PLANS IN THE UNITED STATES
regular employees (all em ployees are considered regular
employees except those as defined in paragraph (c) of this
section) at least forty (40) working hours each week;
provided, however, due to variation in weekly operations
the em ployee may not work his full forty (40) hours or
he m ay work over the guaranteed forty (40) hours per
week, therefore, the com pany at the end of each thirteen
(13) week period from the effective date o f ------- will total
the hours worked b y each em ployee for said period and
pay him at his regular rate per hour any deficiency in
hours worked for said thirteen (13) week period up to
(520) hours.
(B) If due to conditions beyond the com pany’s control
or b y an act of God, which would cause the com pany to
cease operations for more than one (1) week the above
guaranteed workweek shall not apply during such period of
emergencies. In case of such emergencies as described
the com pany and the union shall meet to work out an
equitable agreement during such period.
(C) The above guarantee does not apply to third trick
employees if business conditions necessitate adding third
(3d) trick. Providing, however, (3d) trick does not con
tinue more than ninety (90) days, in any quarterly 13week period, but if more than ninety (90) days, all third
(3d) trick employees will be covered b y guaranteed work
week, it being the practice to lay the youngest employees
off first when reduction becom es necessary.
2. Flour m ill— G P (AFL)
S e c t io n X V I. Eight hours shall constitute a day’s
work. F orty hours shall constitute a week’s work. Tim e
and one-half shall be paid for all work in excess of eight
hours per day or forty hours per week. The com pany
guarantees all regular em ployees forty hours work each
week, except that millers, machine tenders, and one mill
wright are guaranteed forty-eight hours’ work each week
during the life of this agreement, unless a prolonged shut
down is caused b y an act of God, lightning, fire, or ex
plosion.
3. T e x tile d y ein g an d finishing— T W U (C IO )
Guarantee Wage Plan: (d) AH male employees, who
have a service record o f 1 year or more shall as of the
first o f J a n u a ry ------- and during thfeir continuance on the
pay roll receive a minimum pay on a weekly basis of n ot
less than $18.00 per week throughout the period of this
agreement, and also all female employees, who have a
service record of 1 year or more shall as o f the first of
January ------- and during their continuance on the pay
roll receive a minimum pay on a weekly basis o f not less
than $15.00 per week throughout the period o f this agree
m ent; provided however, that in the application of the
annual minimum, the cost to the em ployer shall not exceed
$8,000.00 per year. This $8,000.00 shall be applied dur
ing the period when the workers ordinarily earn less than
$18.00 and $15.00 per week, respectively. On such occa
sions, the em ployer shall add to the worker’s actual weekly
earnings, the difference between the amount earned and
the weekly minimum as hereinabove set forth. The
above m ethod shall be continued until the entire $8,000.00
has been exhausted. Be it further understood that any
employees who fail to report for work when notified to do
so, shall have deducted from their weekly minimum, an
amount equivalent to the amount earned by the workers
in their department. Such deductions shall be applied
only during slack periods when application for the weekly
minimum is made.
4. T ex tile d y ein g an d finishing— T W U (C IO )
S e c t io n IV .
3. Guarantee of Wages and Severance
P a y: (a) All skilled employees covered b y this agreement
who have passed their probationary period as hereinbefore
set forth, shall be paid on the basis of fifty-tw o (52) weeks
per year. This provision shall not apply, however, if the
em ployee’s relations with the com pany are severed volun
tarily or involuntarily.
(b) Any new em ployee hired to replace an em ployee
whose relations with the com pany are severed voluntarily
or involuntarily shall be paid on the fifty-tw o (52) weeks
per year basis.
(c) In the event that an em ployee’s relations are severed
because of the elimination of a jo b or department such
employee shall receive as severance pay an amount equiva
lent to two percent (2% ) of his total earnings during his
period of service with the em ployer up to a maximum of
5 years’ earnings.
(d) All assistant foremen and assistant colorists hereto
fore paid on a fifty-tw o (52) weeks per year basis shall
continue to be paid on that basis.
(e) All assistant foremen and assistant colorists not
heretofore paid on the fifty-tw o (52) weeks per year basis
shall be subject to the follow ing provision: In the event
any plant or department closes because o f lack of work for
a period of longer than six (6) weeks, such em ployees shall
receive one-half of their weekly rate of pay for each week
during which the plant or departm ent remains closed up
to and including fourteen (14) weeks. Wages shall con
tinue to be paid on each regular pay day.
(f) A ny discharged em ployee shall receive a severance
paym ent of not less than tw o (2) weeks’ wages upon re
ceiving notice o f his discharge.
5. S oa p m a n u factu rin g— N o u nion
Guarantee of Regular Employment to Employees: 3.
T o the employees located at such factories as above stated
whose pay is com puted on an hourly rate, and who have
had at least tw enty-four (24) consecutive months of em
ploym ent im m ediately preceding the application of this
plan to their em ploym ent, the undersigned com pany
hereby guarantees regular em ploym ent for not less than
forty-eight (48) weeks (or its time equivalent) in each
calendar year less only tim e lost b y reason of holiday
closings, vacation with pay, disability due to sickness or
injury, voluntary absence, or due to fires, floods, strikes,
or other emergency whether like the foregoing or not, and
subject to the follow ing provisions:
a.
Regular em ploym ent shall be understood to mean
em ploym ent for not less than the hour week established
from time to time b y the com pany as the standard hour
week at each of its factories.
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
b. When an em ployee first comes under this guarantee
after January 1 of any calendar year, the com pany guar
antees to him under the terms and provisions outlined
herein that he shall not be unem ployed in excess of four
(4) weeks (or its time equivalent), plus time lost for rea
sons herein stated, during the remainder of the calendar
year.
c. The com pany reserves the right under the guarantee
to transfer any em ployee to work other than that at which
he is regularly em ployed, and to compensate him for the
same in accordance with the wage rate which prevails for
the work to which he has been transferred.
d. Upon authorization from the board of directors and
without changing the established hour week, the hours of
work for employees com ing within the terms of this guar
antee may be limited to 75 percent of the established hour
week less time lost for reasons stated above, whenever in
the opinion of the board of directors such action seems
justified.
e. A ny individual hired to replace an em ployee leaving
for military service or training, or for other services made
necessary b y a national emergency, shall be considered a
tem porary em ployee and he shall be so inform ed at the
time of his em ploym ent. The com pany will not consider
such an em ployee within this guarantee. If at a later
date subsequent to his em ploym ent, conditions should
warrant it, within the sole discretion of the com pany, he
m ay be inform ed that he is then eligible for this guarantee
in accordance with the terms of this plan.
f. The right to discharge any em ployee at any time is
reserved to the com pany em ploying such employee.
4. This gu arantee of em ploym ent has been established
because the com pany believes it to be sound business
practice and a desirable protection for its employees. It
is the intent of the com pany to maintain it, but the com
pany must and does reserve the unqualified right, to be
exercised at its sole discretion, to withdraw this guarantee
at any of its factories, or to terminate or to m odify this
guarantee at any time.
6.
T o o l an d castin g m anu factu ring— U S W (C IO )
a. The corporation guarantees to every em ployee who
has com pleted five years continuous service in the em ploy
of the corporation at ------- a minimum em ploym ent of
2.080 hours for each yearly period begin n in g-------and con
tinuing each year thereafter during the life of this contract.
All hours worked b y said employee, both straight time and
overtime, shall be credited against the 2,080 hours. If the
corporation does not provide work for any part of the
2.080 hours the em ployee shall be paid for the unworked
hours at his straight time hourly rate.
b. An em ployee failing to accept other work assigned by
the corporation when his own job is not working, or dis
continued because of production requirements, shall not
be entitled to the guarantee herein provided. An em
ployee who voluntarily leaves the em ploy of the corpora
tion, or who is discharged for cause, shall not be entitled
to the guarantee. In the event of an em ployee’s failure to
take advantage of available work-hours such hours shall
be deducted from the guarantee of 2,080 hours. In the
65
event of a strike the corporation shall be relieved of its
guarantee for the current one year period as to the em
ployees striking.
7. W a sh in g m a ch in e produ ction — U S W (C IO )
It is the intent and purpose of the parties hereto that this
agreement will prom ote and im prove industrial and
econom ic relationships between the em ployees and the
com pany and to set forth herein the basic agreement
governing rates of pay, hours of work, and conditions of
em ploym ent to be observed between the parties hereto.
The term em ployee as used in this agreement shall in
clude only factory employees but shall not include foremen,
assistant forem en, and supervisors in charge of any classes
of labor.
S e c t io n 2. Wages: I. Rates and conditions of pay
under this contract shall be as follows:
A. E ffective [date] exclusive of those 60 years of age
and over, all employees with five (5) or m ore years of
accumulated seniority as of [date] will receive a guaranteed
annual wage of $1,260 for not more than 2,000 hours of
any work which at prevailing rates of pay m ay be available
provided that this guarantee will be autom atically can
celed upon term ination of em ploym ent either b y quitting
or b y lawful dismissal and also provided that all absent
tim e for any cause when work is available shall be de
ducted from the annual guarantee and credit given when
allowed to be made up.
B. Effective [date] those employees on the seniority
list who are 60 to 64 years of age, inclusive, will receive a
guaranteed annual wage o f $1,100 for n ot more than 2,000
hours of any work at the prevailing rates of pay, under the
same circumstances as outlined in paragraph A of this
section. E xcept as otherwise provided in paragraphs C
and D , em ployees who becom e 65 years of age within six
(6) months from the date of execution of this contract
shall continue within the guarantee during the life of this
contract.
8. W h olesa le h ardw a re— U S W (C IO )
S e c t io n 12. Guaranteed Weekly Wage: The com pany
guarantees to each em ployee, whose em ploym ent has
been continuous for six (6) months, and whose services
are available to the com pany, a minimum weekly wage
during the period of his em ploym ent within the life of this
contract, this to be com puted by multiplying the em ployee’s
hourly rate of pay by forty, providing nothing herein shall
impair the right of the em ployer to terminate em ploym ent
of any em ployee because of change of business conditions
or for cause.
9. W h o le sa le fu rs— F W (C IO )
T w e l f t h . Tenure and Exchange: The tenure of em
ploym ent of permanent employees shall be fifty-tw o
(52) weeks in each year without any lay-offs whatsoever.
The em ployer may desire to exchange the services of not
more than three (3) of its permanent employees for another
or other em ployees in the same number to be furnished b y
the union. In such case, should the union not consent
66
GUARANTEED WAGE PLANS IN THE UNITED STATES
thereto, the question as to whether such em ployee or
employees shall be exchanged, shall be submitted to the
im partial arbitrator hereinafter named. If replaced, such
em ployee or employees shall receive a minimum of tw o
(2) weeks’ severance pay, plus any additional award that
the arbitrator may make. Such request for exchange
shall not be made before the expiration of nine (9) months
from the com m encem ent date of this agreement and shall
not be used to penalize the em ployee’s union activities.
In the event of such substitution, the new em ployee or
employees shall receive the same wages as the former
em ployee or employees.
10. R etail c o n fe ctio n e ry — H L U (In d.)
4. New employees shall be considered em ployed on trial
for a period of two weeks. Thereafter the new employee
autom atically shall becom e and remain a permanent and
regular em ployee of the employer, in which event such
em ployee may not be discharged excepting pursuant to the
terms of this agreement. The em ployer shall only be
required to pay the em ployee during such trial period for
such tim e ’as said em ployee has been actually em ployed
and such em ployee m ay be discharged at any time during
the said trial period. T he em ployer during such trial
period, shall have the right to determine the qualifications
o f the employee.
7.
Subject to the provisions herein, all present em ployees
of the em ployer who are or who shall becom e members of
the union as herein provided, shall be continued in their
em ploym ent during the life o f this agreement.
9. The employer may not discharge any em ployee except
for cause upon one week’s prior notice given to the union
in writing of his intention to discharge. The union during
said period o f one week m ay dispute the cause o f discharge
or the validity of the intention to discharge, and in the
event the parties affected are unable to agree with respect
to the same, then, and in that event, the justification for
the discharge shall be subm itted to arbitration as here
inafter provided.
10. The em ployer shall give to each permanent em ployee
fifty-tw o (52) consecutive weeks o f em ploym ent during
each year of this agreement.
11. The union shall be the sole judge o f the good stand
ing o f its members and upon notice b y the union to the
em ployer in writing that any em ployee is not a member in
good standing in the union, such em ployee shall forthwith
be discharged.
11. D ep a rtm en t store— N o u n ion
Annual Employment Guarantee: This guarantee is given
to all members, except those covered b y other contracts,
according to length of service on an annual basis, dating
from February 1st of each year to February 1st of the fol
lowing year. It is subject to renewal each year, and an
announcement regarding same is made during the latter
part of the year preceding the period covered. It is based
on the follow ing service record:
M em bers with over 6 years o f continuous service are
guaranteed 52 weeks.
M embers with 3 to 5 years of continuous service are
guaranteed 48 weeks.
M embers with 1% to 3 years of continuous service are
guaranteed 44 weeks.
M embers with 1 to 1)4 years of continuous service are
guaranteed 40 weeks.
This guarantee applies only to members on our regular
pay roll on a full-time or daily part-tim e basis and not to
contingents or per diem members. Under this guarantee,
the right is reserved to transfer from full time to part time
where necessary in order to maintain proper relations
between business and expenses. This would be done on
a fair seniority basis with proper notice.
12.
M a il o rd er h ou se— N o u n ion
How the Annual Wage Plan W orks: W e know that if we
could guarantee a full week’ s pay every week in the year,
it would mean not only greater security for our employees
but a sounder foundation for the future growth o f our
business.
All male em ployees are guaranteed 40 hours’ pay per
week. All female em ployees are guaranteed 36 hours’ pay
per week. This differential was based on the fact that
wom en, under the Illinois laws, are n ot perm itted to
w ork as long hours as men. The same principle was
follow ed in establishing guaranteed hours.
When the com pany is not successful in providing a whole
week’s work for any em ployee, the com pany gives that
em ployee a cash advance, making up the difference be
tween what he actually worked and his guaranteed pay.
This advance bears no interest and is canceled in the event
o f an em ployee’ s death or in the event that the em ployee
leaves the com pany’s service. The advance can only be
repaid in work. A t the end o f any year, all outstanding
advances are canceled.
No P ay is Held Back: N o pay is held back against possible
future advances. The em ployee is always paid the guar
anteed wage in full after past advances have been canceled.
Who is Eligible: A fter an em ployee has held a job
[with com pany] for a year and a half, and worked 3,000
hours during that period, the em ployee is classified as a
“ perm anent” em ployee. All permanent employees are
eligible for the annual wage plan.
The Plan in Operation: As an example o f how the plan
works, suppose a man works 37 hours during the week.
H e receives a check for 40 hours’ pay with a notice that
he has been given a cash advance o f 3 hours. The next
week he works 43 hours and receives a check for 41)4 hours’
pay, the 3 hours over 40 being paid for at the rate o f time
and one-half for overtim e or the equivalent of 4)4 hours’
pay which cancels the previous 3 hours’ advance. O ver
time after 40 hours a week is paid for and is used to cancel
cash advances at the rate of time and one-half.
In the event o f fires, floods, wars, riots, revolutions,
general strikes, and other situations beyond the control of
[company], the management reserves the right to rescind
the annual wage plan.
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
67
The management reserves the right to discharge per
manent employees, regardless of their permanent rating,
for causes of inefficiency, insubordination, thievery, mis
demeanor, or incapacity because of health.
the exact amount of the time of the absence, unless it is
less than one-half day in any one day or an aggregate of
two days in any one year.
13. P u b lic utility— E A (In d .)
2. P l a n s W it h E l ig i b i l i t y R e q u ir e m e n t b u t W it h o u t
P r o v is io n f o r M o d if ic a t io n o r A b r o g a t io n of
P lan
A r t ic l e X I I : Section 1. It is agreed that the present
establishment of forty (40) hours per week of the com pany
will remain in effect, except in those divisions where longer
or shorter hours are now being worked, and the company
guarantees em ploym ent o f not less than forty (40) hours
per week for 52 weeks o f each year to all employees repre
sented by the union as bargaining agent, who are available
and ready and able to work, and who are regular full-time
employees of the com pany, except those on a less than
forty (40) hour basis now. N o such employees shall be
required to work more than forty (40) hours in any one
week, consisting of seven (7) days, nor more than eight
(8) hours in any one day except as hereinafter provided.
The union and the com pany agree to abide by any
changes made in the Wagner Labor A ct and Wage aad
Hour Law.
Nothing in this section will affect in any manner the right
o f the com pany to make tem porary or permanent reduction
in forces when considered necessary by the company.
14. S o cia l se rv ice a g en cy — O P W (C IO )
N . Guarantee: The ------- guarantees an annual wage
to certain classifications of housekeepers for the year
from ------- to ------- , inclusive, according to the following
schedule:
(1) Housekeepers who have com pleted one and a
half years o f service -------, and who are available
for full-tim e em ploym ent as of that date, shall be
guaranteed for the period from ------- through ------- ,
an am ount equal to the wages o f the housekeepers
regular rate for 52 weeks.
(2) Housekeepers with less than one and one-half
years o f service as of -------, and those who re
mained on a part-tim e basis, have no annual guar
antee but are given work as available.
(3) N o additions to the guarantee list shall be
made during the period from -------, through ------- .
All monies paid by the association, including wages paid
during vacation and sick leave, part time, full time, 24-hour
service, overtim e, or any com bination of these shall be
credited tow ard fulfillment of the guarantee. Each job
shall be paid for at the time it is perform ed and in accord
ance with the rates listed in clause I. A ny balance due
on the annual guarantee shall be paid in a lump sum on or
b e fo r e ------- .
In the event of dismissal or resignation, the housekeeper
forfeits all claims for paym ent of a guaranteed wage,
except that in the event of dismissal for retrenchment or
reorganization, the housekeeper shall be entitled to the
paym ent of the proportionate part of the guaranteed wage
fr o m -------to date of dismissal, in addition to her separation
allowance. In the event of absences other than for sick
leave allowed with pay, the guarantee shall be reduced b y
15. D istillery— B C J (AFL)
It is agreed, and it shall be understood that for regular
employees an average of 40 hours shall constitute a week's
work. F ifty-tw o weeks of an average of 40 hours per week
shall constitute a year’s work, for which work the em ployee
will receive 40 times the hourly rate per week for 52 weeks.
If at the end of a year, or any period after which the
em ployee leaves the com pany or is discharged or fur
loughed, the total number of hours of work exceeds the
number of weeks em ployed times 40, such excess hours
shall be paid for at the rate of one and one-half times the
scale.
16. P ap er m a nu factu ring— EA (In d.)
This agreement between the employees o f the ------com pany and the management is effective during the
period o f ------- a n d -------- , inclusive, and covers conditions
and terms to obtain during said period. These terms as
agreed upon resulted from meetings of the em ployees
beg in n in g ------- .
1. For all Class “ A ” employees we will arrange 1,820
hours of em ploym ent for ensuing period which is equiva
lent to 35 hours of work per week for 52 weeks on the
average.
A. Class “ A ” em ployee working less than 35 hours
in any one week when work is not available, will be
paid for a full 35 hours of work that week, but the
difference between the actual number of hours
worked and the number of hours paid for will be
charged against that employee. Then that number
of hours will be credited or “ worked off” the first time
that em ployee works more than 35 hours in one week
and will continue until the number of hours due the
com pany has been balanced after which the em ployee
will then receive pay for the regular number of hours
worked.
B. Class “ B ” employees do not en joy this benefit.
Classification of Employees: 1. A Class “ A ” em ployee is
one that has been in the continuous em ploy of the com
pany for a period of five years; said em ployee to be notified
upon attaining this seniority b y the management.
2. A Class “ B ” em ployee is one that has been in the
continuous em ploy of the com pany for a period of more
than one year and less than five years, said em ployee upon
attaining Class “ B ” seniority to be notified by the
management.
17. P aint an d varnish m anu factu ring— EA (In d .)
The com pany guarantees all regularly em ployed workers,
who have been em ployed a full period of twelve consecu
68
GUARANTEED WAGE PLANS IN THE UNITED STATES
tive months, 52 weeks’ pay a year at rates which will be
determined b y mutual agreement, such weekly pay checks
being estimated at %2 of the annual pay. Actual work
ing time will be lim ited to a total of 2,080 hours in any
one year, in accordance with the provisions of the Fair
Labor Standards A ct o f 1938.
It is our intention to em ploy in t h e ------- factory reg
ularly only the num ber of workers required to operate on
the basis of a 40-hour week during the period of normal
business volume, i. e., April, M ay, October, and N o
vember. During the four months (17 weeks) of peak pro
duction, i. e., June, July, August, and September, and at
such other times as m ay be deemed necessary, the regular
workweek m ay be increased to 56 hours. During this
period, however, each worker would receive his regular
rate of pay for 40 hours, the pay for the extra hours being
placed to his individual credit in the Employees Pay
Reserve Fund.
18. S te e l m ill— U S W (C I O )
A r t ic l e X IV . Annual W age: Section 1. Each regular
em ployee shall be guaranteed no less than forty (40)
hours’ pay each week at his or her regular rate for each
week during the life of this agreement.
19. R eta il an d w h o le sa le fo o d — R W D (C IO )
F o u r t h . All members 6f the union now or hereafter
em ployed b y the em ployer are to be continued in such
em ploy during the life of this agreement and subject to
its conditions, and no mem ber of the union em ployed b y
the em ployer continuously for a period of one week or
longer shall be discharged except with the written consent
of the executive board o f the union. Unless, in a par
ticular case, the union shall agree in writing to the con
trary, upon the term ination of em ploym ent, for any rea
son whatever, of any em ployee who is a member of the
union, the em ployer shall replace such em ployee forthwith
with a new em ployee supplied b y the Union, in accordance
with this agreement, at no less a wage than that received
b y the em ployee he replaces.
20. R eta il dry g o o d s — R W D (C IO )
2. The em ployer does hereby agree to em ploy all per
manent em ployees who shall be declared b y the union to
be its members in good standing, and who are now in
their em ploy, as permanent em ployees for the duration,
and subject to the terms o f this agreement.
21. R e ta il m e n ’ s cloth in g— A C W (C IO )
F o u r t h : (a) All steady em ployees who com e under the
scope of this agreement shall be guaranteed steady em
ploym ent throughout the life o f this contract.
2 2 . R e ta il s h o e s— R W D (C IO )
A r t ic l e V I. Classification and Tenure of Employment:
(a) Regular “ certified” full-tim e workers shall be guaran
teed a regular w eek’s work for fifty-tw o consecutive weeks
per year. This provision shall not be subject to arbitration.
(b) Regular “ certified” part-tim e workers shall be
guaranteed em ploym ent for at least three full days
weekly or for at least three nights and a Saturday weekly
for fifty-tw o consecutive weeks per year. This provision
shall not be subject to arbitration.
(c)
The em ployer m ay em ploy extra workers for Satur
days only or for a period in advance of holidays only or
for an emergency only. Such workers shall not be deemed
to be permanent or regular workers but merely extras, and,
at the term ination of the particular period for which they
m ay be em ployed, they need n ot be reemployed.
23. C em etery — F T A (C IO )
7.
Hours and Working Conditions: (c) N o regular
[5(a) Regular em ployees are those workers em ployed all
year round irrespective of weather or other conditions.]
em ployee shall be laid off during the continuance of this
agreement. It is understood, of course, that the em ployer
shall not be obligated to compensate the em ployees during
their absence from the cem etery, excepting on the desig
nated holidays and during the vacation period o f such
em ployees as hereinafter provided.
24. P u b lic u tility— N E U A (In d .)
III.
Hours o f Labor: It is hereby agreed that 40 hours
shall constitute one normal workweek of 8 hours per w ork
day for 5 days per week for the period of 50 weeks during
each calendar year, and no perm anent em ployees shall be
em ployed more than 2,000 hours during said calendar year.
The com pany will make 2,000 hours’ work during said
calendar year available to each com petent, permanent
em ployee. In the event that overtim e work is necessary
as a result o f an emergency or other cause, the com pany
m ay work em ployees overtim e; provided that such em
ployees receive compensation for em ploym ent in excess of
12 hours in any w orkday or for em ploym ent in excess of
56 hours in any workweek, as the case m ay be, at the rate
of 1)4 times the regular rate at which they are em ployed;
and provided that such em ployees shall not be compensated
for overtim e work not specified above, namely, em ploy
m ent in excess of 12 hours in any workday, or em ploym ent
in excess of j56 hours in any workweek, bu t that such em
ployees shall be given time off, with compensation at
regular rates, equal to the num ber o f hours such em ployees
engage in overtim e work for which they receive no com
pensation. Such time off shall be granted to such em
ployees, so far as practicable, and at the request of such
employees, at a tim e or times m ost convenient to such
employees.
It is further agreed that any em ployee w ho is called
upon for overtim e work between his regular hours and
after he has left the com pany’s premises, shall receive
a minimum tim e credit of four hours for such overtim e
work, even though such em ployee m ay not have w orked
four hours.
It is further agreed that, in the event any permanent
em ployee shall be absent from work through bona fide
sickness or injury for which no compensation is received
under sections (a), (b), and (c) below, or through emer
gency causes, or with the com pany’s permission, such
em ployee shall be entitled to have any overtim e credits
APPENDIX B.— CLAUSES IN GUARANTEE PLANS AND CONTRACTS
earned b y him as aforesaid credited to such time as he
m ay have been absent; and that such em ployee may,
in the absence of earned overtime credits, at the discretion
of the com pany, make up such absent time b y overtime
work.
It is further agreed that such permanent em ployee who
has been in the em ploy of the com pany for one year or
more shall receive tw o weeks’ vacation each year with
full pay at regular rates, the vacation period to be set
b y the com pany.
B. P LA N S
W IT H O U T E M P L O Y E E
R E Q U IR E M E N T
E L IG IB IL IT Y
Some plans covering all of the working force have no
service or other requirement for eligibility.
1. P l a n s W it h o u t E l ig ib il it y R e q u ir e m e n t b u t W it h
P r o v is io n f o r M o d if ic a t io n o r A b r o g a t io n of
P lan
25. F lou r m ill— T C (AFL)
A r t ic l e V I. D uring the term of this agreement, all
employees shall receive a minimum of seventy cents (700)
per hour and any em ployee receiving more than sixty-tw o
and one-half cents (62^0) per hour at the time of the sign
ing of this agreement shall receive seven and one-half cents
(7^0) per hour increase. All employees shall be paid at
the rate of time and one-half of the regular rate of pay for
all time worked in excess of forty (40) hours per week.
The em ployer agrees to guarantee all employees now in
its em ploy and covered b y this agreement a minimum
weekly wage of tw enty-eight dollars ($28.00) per week, and
to all em ployees now in its em ploy and receiving pay at a
rate of more than seventy cents (700) per hour under the
terms of the agreement a minimum weekly wage equivalent
to forty (40) times the hourly rate of pay received b y such
em ployee under the terms of this agreement. Such
guarantee of weekly wages shall be effective for 52 con
secutive weeks beginning -------. The above mentioned
guarantee shall be null and void if and when the ------com pany is sold out to another and entirely different
com pany or is liquidated b y the stock holders.
Should it becom e necessary to lay off more than the
youngest tw o employees on the seniority list in order to
maintain the 52-week guarantee to the senior employees,
the matter shall be discussed between the em ployer and
the union shop com m ittee; failure of these tw o parties to
agree, the dispute shall then be discussed b y the em ployer
and the union executive board; failure of these tw o parties
to agree, the dispute shall then be submitted to arbitration
as provided for in article 10 of this agreement.
All employees who have been in the em ploy of the
em ployer for one year or more shall receive one week’s
vacation with full pay.
69
ployee is found b y the arbitrator t o have been unjustly
discharged, he shall im mediately be reinstated to his
former em ploym ent and shall receive back pay from the
date of discharge, or otherwise at the discretion of the
arbitrator.
27. W h olesa le g ro ce rie s— T C (AFL)
A r t ic l e i v . Seniority; Security: Section 7. The em
ployer shall not discharge any em ployee without just
cause and shall give at least one written warning notice
of the com plaint against such em ployee, a cop y of which
shall be sent to the union; except that no warning notice
need be given to any em ployee before he is discharged if
the cause o f such discharge is dishonesty, drunkenness on
the job, recklessness, or gross negligence. Appeal from
discharge must be taken within five (5) days by written
notice to the em ployer and a decision reached within ten
days from the date of discharge.
28. W h o le sa le fu rs— F W (C IO )
F ir s t . A ny em ployee or employees presently em ployed
shall be retained by the employer.
T e n t h . Discharge. There shall be no discharge of
employees belonging to the union, except for the follow ing
reasons: (1) Dishonesty, (2) Repeated negligence, (3)
W illful insubordination, (4) Leaving jo b w ithout permis
sion during working hours, and (5) Intoxication during
business hours.
In the event the em ployer wishes to discharge any em
ployee for any other reason than heretofore set forth, the
em ployer shall n otify the union through the council b y
registered mail of the name of the em ployee whom he
wishes to discharge, and the reason for such discharge.
29. R etail m e n ’ s cloth in g— R W D (C IO )
T h ir d . Notice. T he employer agrees that each em
ployee in his or its em ploy shall have fifty-tw o consecutive
weeks of em ploym ent during each year.
(a)
An em ployee m ay be discharged upon tw o weeks’
written notice b y the em ployer to the union, sent b y regis
tered mail, and with the written consent of the union.
Such notice b y the em ployer to the union, requesting such
discharge, shall set forth the details impelling the request
for the discharge. (Slack season, however, shall not be
deemed a cause or a reason for the discharge o f a regular
em ployee). Upon the consent, in writing, b y registered
mail, given b y the union, such em ployee affected b y the
notice shall be discharged at the end of such tw o weeks’
period of notice. Upon the refusal, failure or neglect of
the union to consent to such discharge, such employee,
nevertheless, shall be continued in the em ploy of the em
ployer until the matter shall have been determined by
arbitration as hereinafter provided.
26. Jew elry m anu factu ring— R W D (C IO )
30. R etail cloth in g, d ru gs, ra d io, an d lu m b er (fo rm a g ree
m en t)— R W D (C IO )
W i t n e s s e t h : 4. The em ployer shall not discharge any
em ployee except for just cause. A ny dispute relating to
any discharge shall be handled as provided in article X I I ,
subdivision B, of this agreement. In the event the em
Discharge and Lay-Offs: Fourth. N o employee shall
be discharged, laid off, or suffer a reduction in working
hours except for good and just cause. N o proposed dis
charge, lay-off or reduction in working hours shall b e
70
GUARANTEED WAGE PLANS IN THE UNITED STATES
com e effective until the union has been notified thereof
in writing, with the reasons therefore, and the union, after
an investigation, shall have given its consent thereto in
writing. Should the union deny the firm’s request, the
firm may either accept the union’s decision or in the
alternative proceed to arbitration. N o employee shall be
discharged, suspended, suffer reduction in working hours,
or be laid off until after a decision in the firm’s favor,
except that an em ployee charged with criminal negligence
or dishonesty may be summarily discharged. Should the
union deem itself aggrieved in the case of a summary dis
charge as aforem entioned, the union shall, without delay,,
submit the matter to arbitration. Should the arbitrator
decide in favor of the employee, he shall be reinstated to
his former position and be compensated for loss of time.
N o lay-off shall be granted b y the arbitrator except in
the case of a substantial, permanent decline in the business
which shall necessitate the relief requested. Seasonal
declines shall not be deemed cause for lay-off.
31. C lean ing an d dy ein g — A C W (C IO )
28. N o employee shall be discharged without just cause.
A ny and all complaints, grievances or disputes that may
arise between the parties hereto shall be taken up for
adjustm ent between the representatives of the parties in
the first instance. In the event they are unable to adjust
the same prom ptly it shall be referred for arbitration and
final determination to an impartial chairman and arbi
trator to be mutually agreed upon by both parties. Any
and all decisions, directions or orders of the impartial
chairman shall be final and binding upon all parties and
shall be fully enforceable in an appropriate court of law
or equity. The impartial chairman, however, shall have
no authority to enlarge, alter, or m odify this agreement.
The fees o f the impartial chairman and the expense of
arbitration shall be shared equally between the parties to
this agreement.
2. P l a n s W it h o u t E l ig ib il it y R e q u ir e m e n t a n d
W it h o u t P r o v is io n f o r M o d if ic a t io n o r A b r o
g a t io n of P l a n
32. D airy farm — F T A (C IO )
A r t ic l e III. The com pany further agrees to maintain
such weekly hours as will best serve its regular personnel
maximum and continuous em ploym ent; such hours to
average fifty (50) per week over a one-year period begin
ning with------- .
The com pany agrees to pay time and one-half for all
hours over forty (40) hours worked in any one week.
33. P aintin g and d e cora tin g — P D P (AFL)
1. The em ployer during the existence o f this contract,
agrees to hire and maintain for its painting, decorating, and
paperhanging, plaster patching, cleaning, washing, any and
all work preparatory to painting in its buildings, qualified
and com petent men, who are members of the union in good
standing.
2. The em ployer agrees to provide for its maintenance
men, within the description thereof herein contained, not
less than 42 weeks’ work each working year; a working
week to consist o f a maximum o f -------in every week.
2a. An annual wage o f ------- shall be paid for a maximum
o f 52 weeks. All overtim e work shall be paid for as pro
vided in paragraph 5. ------- days’ annual sick leave and
------- days’ vacation with full pay for all employees.
34.
M e a t packin g— U P W (C IO )
Straight-Time Arrangement: Each em ployee regularly
assigned to a straight-time department will receive the
weekly rate o f pay provided for him in the latest approval
of the straight-time plan for his department. This rate
of pay will be subject to any increases or decreases affect
ing the plant as a whole. Each em ployee will receive his
regular pay check every week except when absent beyond
regularly provided sick leave or vacation. * * *
The straight-time arrangement with respect to any de
partment m ay be canceled at any time that department
fails to abide by all working agreements, or at any time the
discontinuance of the straight-time arrangement in some
other department directly affecting it requires the cancel
lation.
If other hour limitations becom e established by law, this
plan will be changed to conform to such law, or if the
com pany considers the straight-tim e plan unworkable
because of the passage o f any such law, the whole straighttime arrangement, or any part of it, may be canceled as of
the effective date of any such law.
Any tim e any departm ent becom es dissatisfied with the
straight-time arrangement and wishes to cancel it, such
cancellation m ay be effected in the usual manner o f
handling grievances.
Otherwise straight-time arrangement m ay be discon
tinued only b y thirty days’ advance notice o f desire to
make such discontinuance at the end of the com pany’s
fiscal year. * * *
I f there is any increase or decrease in the amount of work
required to produce the budgeted volume, a corresponding
adjustm ent will be made in the department volume
budget or in the number of people in the department.
The choice as to which adjustm ent shall be made will be
left to a decision b y a m ajority in the departm ent in case
the change is an increase.
In case the required am ount of work is reduced suffi
ciently to perm it the rem oval of one or more employees,
such employees will be transferred from the departm ent on
a seniority basis. When the manufacture of some item
is discontinued, or when, because of a change in m ethod of
operation, certain jo b or jobs are discontinued, it is under
stood that it will be necessary to reduce the straight-tim e
gang correspondingly. Such reductions will be made on
the basis of seniority.
E xcept as provided in the 2 preceding paragraphs * * *
there will be no reduction in the num ber of em ployees in
any straight-time departm ent within a period of one year
from the latest approval of the straight-time arrangement
for that department. Any em ployee who is laid off from
a straight-tim e departm ent m ay find em ploym ent else
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
where on the basis o f his regular seniority rights, or, on
application, m ay be transferred, at his regular rate of
pay, to the “ extra gang” which will be maintained to handle
extra work, tem porary replacements, and other business
requirements which cannot be handled b y the regular
straight-time departments. During the period of any
one fiscal year, this extra gang will not be reduced below
the number who have been transferred to it from regular
straight-time em ploym ent, thus maintaining em ploy
ment with full pay for at least one year for the number
o f individuals originally assigned to the straight-time
schedule for any year.
Any em ployee laid off from the extra gang may find
other em ploym ent on the basis of his seniority rights.
For each department for which it is possible to estab
lish some measure of the work to be done, the budgeted
annual volum e will be stated. (See Schedule B attached.)
In any year in which the department produces less than
the budgeted annual volume, the members of the depart
ment, individually and collectively, becom e indebted to
the com pany for producing that much work at the first
opportunity.
A t the end of any year in which the cumulated produc
tion of the department is in excess of the cumulated budg
eted annual volum e, bonuses will be paid the members
of the department. These bonuses will be calculated on
the basis o f what the cost of the extra production would be
b y adding m ore employees to the department, and the
specific m ethod o f calculating it with respect to the de
partm ent will be found in Schedule B attached.
A t the end of any year in which the cumulated produc
tion of the departm ent is in excess of the cumulated
budgeted annual volum e, and during which regular mem
bers o f the departm ent have been absent without pay and
without being replaced, the cost of such replacements
will be put in a “ k itty ” to be distributed among the mem
bers of the departm ent in whatever manner the m ajority
o f the departm ent m ay agree.
For each department there will be maintained what will
be known as a “ kitty.” Schedule B attached will show
the departm ent work budget, if any. Unless otherwise
provided in schedule B for those departments having work
budgets, em ployees docked for absence, and employees
absent on vacations granted on the basis of 5, 15, or 20
years’ service, will be replaced.
Replacements will be made in either men or money.
That is to say, if the department does not require a re
placem ent man, the m oney for the replacement will go to
the department kitty.
The management will have the right to insist on replace
ments if the tonnage produced falls below the daily or
weekly volum e which the com pany’s business requires, or
if the average actual hours worked is or threatens to be
in excess of 40 hours per week.
The department com m ittee will direct whether replace
ment m oney will be paid to individuals in the gang or
whether it will remain in the department “ k itty .” The
m oney in the department “ k itty” will be distributed
among the members of the department at the end of each
fiscal year, and in whatever manner the m ajority of the
department may agree.
71
35. M e a t packing— U P W (C IO )
S e c tio n 4. Hours o f 1fo r k and Overtime: Each * * *
employee of the com pany, unless specifically excepted b y
notice in writing by the com pany to the union, will be
employed on an annual basis and shall receive the regular
weekly rate of pay provided for him in a work schedule
established for his department as it m ay be amended
from time to time in pursuance to the procedures estab
lished in this agreement. In no case shall any such em
ployee be em ployed more than two thousand eighty
(2,080) hours within the applicable fifty-tw o (52) week
period, and each regular employee shall receive compensa
tion for em ploym ent in excess of ten (10) hours in any
workday, or fifty-three (53) hours in any work week, as
the case may be at the rate of one and one-half (1 ^ )
times the regular hourly scale rate of the job at which he
is employed.
36. T ex tile d y ein g an d finishing— M P (In d .)
S e c t io n 1. Salary and Hours: The com pany agrees to
continue to em ploy the members of the association now
presently in the em ploy of the com pany during the period
covered b y this agreement, and guarantees to pay for said
period to each journeyman printer an annual wage of not
less than thirty-nine hundred dollars ($3,900.00), payable
weekly at the rate of seventy-five dollars ($75.00) per
week. * * *
The com pany agrees that each o f the said members of
the said association in the em ploy of the com pany through
out the period covered b y this contract shall, subject to
and in accordance with the provisions of this contract,
work not more than tw o thousand (2,000) hours during
fifty (50) calendar weeks o f the period covered b y this
contract. It is the intent of the parties hereto that the
members o f the association shall have tw o (2) weeks’
vacation with full pay.
37. W h o le sa le hardw a re— U S W (C IO )
S e c t io n II. Weekly Guaranteed Rate: Each em ployee of
the com pany is guaranteed a minimum weekly wage for
each week during the life of this contract. The guaranteed
minimum weekly wage shall be com puted in the following
manner:
The individual em ployee’s straight-time average
hourly rate of earnings for the year preceding the
effective date of this contract, or such portion there
of during which the employees may have been em
ployed b y the company, plus the general wage
adjustm ents included in this agreement, shall be
multiplied b y 40 hours.
The guaranteed minimum weekly wage for any em
ployee who may be em ployed after the effective date of
this agreement will be determined b y multiplying his
straight-time average hourly rate of earnings for the first
three months of em ploym ent b y 40 hours.
For each week during the life of this agreement that the
em ployee who is continuously em ployed and whose serv
ices are available to the company does not receive a sum
72
GUARANTEED WAGE PLANS IN THE UNITED STATES
equal to the minimum as outlined above, the com pany
shall make up the difference.
38. R etail co n fe ctio n e ry — R W D (C IO )
F ir s t . Employment of Union Workers: (f) Employees
who are members of the union now in the em ploy of the
em ployer shall be continued in their em ploym ent during
the life of this agreement, subject to all terms and pro
visions thereof.
39. R etail dry g o o d s — R W D (C IO )
T h ir d . All em ployees shall receive twelve (12) months
of uninterrupted em ploym ent.
40. R etail m e n ’ s cloth in g— A C W (C IO )
It is further agreed that regular employees [all workers
other than “ extras” ], be em ployed fifty-tw o (52) weeks
per year.
41. R etail fu rs— F W (C IO )
W e further agree that these wages shall becom e effective
as of March 15th, and shall remain in effect for a period
of one year, and that during this time the workers shall be
fully em ployed with the exception of one week to be taken
as vacation with pay.
42. C em etery— U M W (A F L )
A r t ic l e V. All men in our em ploy February 1st shall
be guaranteed work in accordance with Article II, Section
A, during the year in which this agreement is in force.
II. Less Than a Year’s Guarantee to all Em
ployees
Guarantees of wages or em ploym ent to all nonexecutive
employees for less than a year apply to periods ranging
from 3 months to 50 weeks. Such plans generally specify
either (1) total am ount of earnings per year at established
rates of pay or (2) em ploym ent for designated number of
hours per week and weeks per year, or hours per year
(regardless of fluctuation of hours).
A. P LA N S
W IT H
EM PLOYEE
E L IG IB IL IT Y
R E Q U IR E M E N T 1
1. P l a n s w it h
P r o v is io n
P lan
E l ig ib il it y R e q u ir e m e n t a n d W ith
M o d if ic a t io n o r A b r o g a t io n of
for
43. S a u sage ca sin g m a n u factu rin g— N o u nion
Covenant: The com pany hereby agrees (subject to the
limitations and conditions herein contained) that each
eligible em ployee shall in case of a complete lack-of-w ork
lay-off be indemnified for the difference between his
weekly wages or salary (if any) earned elsewhere and his
straight-time weekly wages or salary from this com pany
for a period of not less than tw o months, or an aggregate
of not less than 346% hours of make-up straight-time pay
in the case of partial lack-of-w ork lay-off, or such com bina
tions of the tw o as conditions m ay create. For each full
year of service after the first year, tw o months of indemnity
in case of complete lack-of-w ork lay-off, or 346% hours of
straight-time pay in case of partial lack-of-w ork lay-off,
will be added to the indem nity or guarantee until, after six
full years of service, a maximum of one year or 2,080 hours’
indemnity or guarantee is provided. All subject to the
following:
1. Definitions: All present full-tim e em ployees of the
com pany are regarded as permanent employees hereunder.
All form er employees now in the armed forces who
return to this com pany within the period prescribed b y
law or within the period prescribed b y our regulations
(whichever is longer) shall thereafter im mediately be
regarded as permanent employees.
For persons engaged hereafter, a permanent em ployee
shall be one who was notified in writing at the time of his
em ploym ent that he was engaged as a permanent employee.
All others hereafter engaged, except as hereinafter pro
vided, will be tem porary employees.
A full-time tem porary em ployee becomes a permanent
em ployee after one or more years of service unless, prior
to each anniversary date of his employm ent, he has been
notified in writing that his status will continue to be that
of a tem porary employee.
A voluntary part-time em ployee remains a tem porary
em ployee as long as he is on part time and thereafter until
he has had one or more years of full-time employm ent.
One year of service is one* year of continuous service in
accordance with the com pany’ s service regulations.
2. Eligibility: Only permanent em ployees i n ------- area
(which for the purpose of this plan includes all places
within 50 miles of t h e ------- C ity Hall) with one or m ore
years of service, who are wholly or partially laid off when
there is a lack of work are eligible to receive the guaran
teed pay. The com pany will require a receipt signed in
person b y the wholly or partially laid off em ployee for
each paym ent made and until such receipt, properly filled
out, has been received, interim payments will be forfeited.
Each receipt so signed b y the em ployee must state, am ong
other things (a) whether or not be has worked for pay for
any other employer, (b) whether or not he has been in
business for himself, (c) whether or not he has applied for
or received unem ploym ent compensation in any form from
any source whatever, (d) whether or not he is in a posi
tion to report for and resume work upon reasonable notice,
and (e) his present address, all since signing the last
previous receipt.
In case (a) he has worked for any other em ployer for
pay, he shall state the am ount of his then salary, or pay,
on the receipt, which amount will be deducted from each
subsequent paym ent as long as the laid off em ployee is
receiving such salary, or pay from other sources. In case
(b) he goes into business for himself, his benefits under
this plan will cease. Should he discontinue his business,
guaranteed payments will be resumed for the remaining
portion of the time during which he was originally eligible.
In case (c) he applies for or receives unem ploym ent com
pensation from any source during his eligibility period
hereunder, his benefits hereunder shall cease, future pay
ments shall be forfeited, and he shall thereafter be classi-
73
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
fied as an employee who has quit. In case (d) he is not
in a position to report for and resume work upon reason
able notice, his benefits under this plan shall cease. Should
he later notify the com pany that he is then in a position
to report for and resume work upon reasonable notice,
guaranteed payments will be resumed for the remaining
portion of the time during which he was originally eligible.
The com pany shall have the right, under this plan, to
refer each wholly laid off em ployee to other suitable, avail
able em ploym ent elsewhere within 15 miles of his home,
and should the em ployee refuse such employm ent, he
shall no longer be eligible under this plan. A wholly
laid off em ployee notified by the com pany to return to
work, which he is capable of doing, at any of the com pany’s
plants or offices within 50 miles of his last em ploym ent
with the com pany, shall do so within three days of the
date specified in the notice, whereupon payments under
this plan shall be discontinued. An em ployee who fails
without good cause, to report within the three days re
ferred to will forfeit all rights under this plan. In the
case o f any fraudulent statement made on any receipt,
all subsequent payments will cease and the com pany
reserves the right to sue for the recovery of amounts
paid since the fraud began. The following persons are
among those who are not eligible, nor shall they have any
claim hereunder:
(a) Em ployees who quit.
(b) Tem porary employees.
(c) Em ployees discharged for gross incompetence
or other cause.
(d) Em ployees who are unable to continue or to
resume work.
An em ployee discharged for gross incompetence or for
cause who does not adm it the incom petence or cause,
shall have his present right unabridged to present his
case in person to the executives of the com pany, and he
may, if he desires, enlist the aid of the head of the personnel
department in so presenting his case.
44.
C ereal preparation s— B F C (C IO )
1. Qualified Employees: (A) All present employees,
men and wom en, working on an hourly or piecework basis
who have service credit of not ]ess than six months accu
mulated within a continuous twelve m onths’ period shall
be entitled to the benefits of the plan.
(B) New employees shall becom e entitled to the benefits
of the plan after com pletion of six m onths’ service in a
continuous twelve m onths’ period upon approval o f the
plant management.
N o t e : Em ployees having less than six months o f service
who are laid off, absent account of sickness or by permis
sion will receive credit for only the time actually worked,
this to be cumulative and 70 hours of work done in a
calendar month for which wages are paid shall be con
sidered as one m onth of service credit.
2. Hours Guaranteed While on Pay Roll: The com pany
guarantees qualified em ployees while they are on the pay
roll 140 hours of work in each month, for which they will
be paid their full hourly or base rate.
3.
Hours Guaranteed While on Lay-Off: In case qualified
employees are laid off, that is rem oved from the pay roll,
they will be paid for one-half the guaranteed time or 70
hours per m onth at their full hourly or base rate for such
total period o f lay-off within any continuous twelve
months’ period, as specified below :
P e r io d , o f l a y - o f f i n
a n y c o n tin u o u s 12
L e n g t h o f c u m u l a t i v e s e r v ic e
6
1
2
3
m o n th s ’ p e r io d
m onths’ service and less than 1 y ear___________ 2
year’s service and less than 2
years_______3
years’ service and less than 3
years_______ 4
years’ service and o v e r ________________________ 6
months
months
months
months
7. Discontinuance of Payments: N o further paym ents
will be made to any em ployee under this plan if he is not
recalled for work within 6 months from the date of his lay
off or if upon demand he fails to reenter the em ploy of the
com pany or if he obtains full-time em ploym ent elsewhere.
13. Modification or Termination of the Guaranteed Work
Plan: The com pany reserves the right in its sole judgm ent
to m odify or terminate this plan at any time. It is hoped
that this plan will be permanent but changed laws, con
ditions, or relationships m ay require modification or ter
mination o f the plan. If for any reason the present base
week of 40 hours is changed, an adjustm ent of the plan
will be necessary.
45.
C erea l preparations— G P (AFL)
IV . Guaranteed Hours Bonus: Sec. 1. All
em ployees who obtain a seniority of three (3) years or
more, and provided such em ployees have reported and
worked whenever work was available, shall be guaranteed
a minimum of 1,704 working hours including vacation time
at the regular existing rates of pay in any calendar year,
subject to a deduction for time lost through sickness or
accident (actual time that the classification was in opera
tion) or shut-down of the mill caused directly or indirectly
b y fires, strikes, riots, tornadoes, cyclones, explosions,
floods, military or civil com m otion, and other causes
beyond our control.
A r t ic l e
Sec. 2. A ny em ployee, who has attained a seniority of
three (3) years’ or more employm ent, and shall, in any
week earn wages for less than thirty (30) hours due to
work not having been made available, shall be paid for the
actual hours worked, and at the em ployee’s request to
the auditor, a sum sufficient to make up a total paym ent
for thirty (30) hours, with the understanding that the
excess paym ent will be collected without interest or other
charges in the next following week or weeks in which the
em ployee receives in excess of thirty (30) hours’ work.
W hen em ploym ent is terminated, for any reason, all
excess paym ents becom e immediately due and payable
in full.
Sec. 3. The com pany agrees not to reduce rates o f pay
during the life of this agreement and further declares its
intention as follow s:
After paying the existing rate of wages to mill employees,
and a fair return to its stockholders, which shall be $2.00
per share, the com pany will then divide tw enty percent
(2 0 % ) of the remaining net profits as a bonus am ong its
mill employees and office employees, strictly on the basis
74
GUARANTEED WAGE PLANS IN THE UNITED STATES
of seniority. T he distribution of the bonus is to be made
early in the m onth of D ecem ber after the result of the
first eleven (11) m onths’ operation is known.
periods, shall automatically be added to the permanent
list when there is an opening.
27. Guarantee: The em ployer agrees to a guarantee of
the equivalent o f forty-five (45) weeks or eighteen hundred
46. C h ew in g gum m a nu factu ring— N o u nion
(1,800) hours o f em ploym ent, exclusive of overtime, for
each of the permanent employees, the number of which
Y our com pany will pay you a large percentage of your
has been hereinbefore established at 500, for the period of
base pay for from four to thirty weeks, according to your
------- to ------- , and similarly for each succeeding contract
length of service, if it has to lay you off for any reason.
(c)
Y ou are em ployed b y us and agree to give us year. It is understood that the forty (40) hour vacation
becomes a part o f the eighteen hundred (1,800) hours.
services which are faithful, efficient, and satisfactory to
28. In the event wages, base rates, and hour rates are
us, during the period of this agreement, in such capacity
increased b y the em ployer to the amount of five percent
as we m ay reasonably require; bu t we shall have the right
(5 % ) above present wages, base rates, and hour rates, the
to suspend your em ploym ent, if conditions of our business
employer shall have the right and option at any time there
or acts beyond our control require that we lay you off.
after to cancel the guarantee o f forty-five (45) weeks or
During such periods of suspension of your em ploym ent,
eighteen hundred (1,800) hours. Provided, however, that
to be known as “ lay-off periods,” we will pay you unem
in the event at the time o f such cancellation b y the em
ploym ent com pensation for such portion of any lay-off
ployer any permanent em ployee or employees have n ot
period and in such amounts and upon such conditions as
been em ployed the proportionate number of hours based
are prescribed in the schedule of unem ploym ent benefits
upon the pro rata of eighteen hundred (1,800) hours, as
on the reverse side hereof. During any lay-off period, if
hereinbefore set forth, the em ployer shall pay to such
the com pany so requests, you shall hold yourself ready to
permanent em ployee or employees five per cent (5 % )
return to work.
of their earnings fr o m ------- o r -------- of any succeeding con
47. B rew ery— BFC (C IO )
tract year, or in the alternative, shall pay to such employee
or employees the minimum wage for piece workers or the
S e c t io n 7. Lay-Offs and Rehiring: As t o regu lar ca rd
hourly wage for time workers, as the case may be, for such
employees, the em ployer shall have the right of laying off
hour deficit * * * .
one or more em ployees in any departm ent for a period of
not less than one day nor m ore than one week at a time,
50. P ap er m anu factu ring— B P M (AFL)
provided, however, that all employees in a departm ent
At our recent conferences I believe the necessity foi
be treated equally and im partially and that no em ployee
m odifying our present five-year plan and service differen
shall be laid off for m ore than tw enty (20) days during the
tial was made clear to you. After studying the matter
year. The lay-off period shall be between N ovem ber 1
from every angle the following plan has been selected.
and April 1. Lay-offs shall not apply to engineers, firemen,
A ll people working under the present five-year plan will
firemen’s helpers, oilers, and maintenance men.
be guaranteed em ploym ent sufficient to am ount to eighty
The em ployer shall have the right to lay off any or all
percent of their normal full-tim e earnings each period foi
of its em ployees in any departm ent where the plant closes
eleven periods or forty-fou r weeks in each working year
dow n or its output is affected b y an act of God, fire,
N o guarantee is made for periods 8 and 9, normally eight
explosion, or other calam ity beyon d the em ployer’s
weeks which com e in the m iddle of the summer. Every
control.
fifth or sixth year the eighth period is a five-week period
48. C a sk et m a n u factu rin g— U IU (A FL)
instead of a four-week period. Holidays on which the
mills do not operate are n ot covered by this plan.
A r t ic l e 18. (a) The com pany agrees to guarantee 1,800
hours of w ork and wages per year, including vacation with
51. T o o l an d w ire m a nu factu ring— N o u nion
pay, to em ployees covered b y this agreement who have
Our guaranteed annual wage policy: Our employees have
been in the em ploy of the com pany for five (5) years or
a
right
to be proud o f their com pany’s guaranteed annual
more, and who still maintain production standards.
wage policy which was adopted by the directors to offer
(b) The guarantee described in the foregoing paragraph
our workers the most progressive type o f security any
shall not be applicable to any em ployee who quits or is
com pany can give to its employees. Recognizing that the
discharged for any cause during the contract year. When
loyalty, cooperation, and ability of our employees are
ever employees absent themselves for any reason, their
part and parcel of our past and future success as a com pany,
period of absence shall be deducted from the guaranteed
for the past five y e a r s ,-------Company has pu t into effect
workweek herein described.
an annual wage policy guaranteeing a minimum o f 1,800
This article shall apply only in the event that the com
hours pay annually to each employee with a record o f
pany is able to secure materials to enable it to maintain
five
years’ continuous em ploym ent based upon the senior
this number of hours, w ithout operating at a loss, and
ity policy o f the com pany.
further exceptions as stated in Article 6 o f this agreement.
In accordance with the above policy, any qualified em
ployee [five years of service] who fails to receive at least
49 . W o m e n ’ s cloth in g m a n u factu rin g— IL G (A F L )
1,800 hours of work in any calendar year, will be paid b y
10. (b) The tem porary workers, whose efficiency aver
the com pany, at the end of each such year, an am ount
ages 87% percent o f the base rate for three previous pay
equal to cover the balance of the hours not worked up to
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
1,800 hours, less any amounts received in unem ployment
insurance benefits, workm en’ s compensation benefits,
sickness, accident, and health benefits, and wages received
from other regular em ploym ent. Paym ent on the guar
anteed annual wage policy will be com puted on the regular
base rate of the em ployee.
The following rules will govern the guaranteed annual
wage policy of your com pany:
1. The term “ continuous em ploym ent” shall include any
period during which an employee is serving with the
armed services, provided that such em ployee returns to
the em ploym ent of the com pany within 90 days of the
date of honorable discharge from the armed service.
2. The minimum of 1,800 hours of guaranteed work
shall include all vacation allowances.
3. This guarantee applies only to wage earners and shall
im mediately cease should the em ployee resign, is dis
charged for cause, or should he attain the age of 65, or
for any reason whatsoever should he fail to work at least
320 hours in any calendar year.
4. Because of recent unusual turn-over among our em
ployees, the benefits of this guarantee are limited to those
who were em ployees of the com pany o n ------- . This limi
tation will be tem porary and will be rem oved as soon as
conditions perm it a return to normal times.
5. The judgm ent of the com pany shall be final on all
questions arising under or b y reason of the guarantee and
the com pany may at any time m odify or alter the rules
or m ay at any tim e terminate the guarantee, although
the com pany fully expects to continue it permanently.
6. This guarantee must necessarily be made subject to
the restrictions and limitations of any Federal or State
laws, either present or future, which of course are beyond
this com pany’s control.
52. K n itting m a ch in ery produ ction — U S W (C IO )
A r t ic l e I I . (d) The com pany guarantees to every
em ployee, who has com pleted five years continuous
service in the em ploy of the com pany at the time of the
execution o f this agreement a minimum em ploym ent of
1.200 hours for the year covered b y this contract. All
hours worked b y said employee, both straight time and
overtime, shall be credited against the 1,200 hours. If
the com pany does not provide work fo r any part of the
1.200 hours the em ployee shall be paid for the unworked
hours at his straight-time hourly rate.
An em ployee who voluntarily leaves the em ploy o f the
com pany or who is discharged for cause shall not be
entitled to the guarantee. In the event of an em ployee’s
failure* to take advantage of available work-hours such
hours shall be deducted from the guarantee of 1,200 hours.
In the event o f a strike the com pany shall be relieved of
its guarantee as to the employees striking.
2. P l a n s W it h E l ig ib il it y R e q u ir e m e n t b u t W it h o u t
P r o v is io n f o r M o d if ic a t io n o r A b r o g a t io n of P l a n
53. F o o d ca n nin g an d p reservin g— N o u nion
M inimum Workweek Plan: 1. This plan makes available
to all qualified employees forty-eight forty-hour weeks of
work in each calendar year. In other words, a qualified
75
employee will not be given more than four weeks per year
of less than forty hours.
4.
T o be qualified, an em ployee must have been on our
pay roll continuously for twelve months. It is not neces
sary that he have received pay during every week of that
twelve months, but he must not have been laid off or
discharged, and he must not have quit during that period.
54. R u b b e r g o o d s m anu factu ring— N o u nion
(b) T o maintain as near as deemed practicable b y the
com pany a workweek of forty (40) hours, and guarantees
the undersigned opportunity to work at least sixteen
hundred [1,600] hours for the first twelve months this
contract remains in force.
(c) T o pay the undersigned, for such operation on the
basis of the rates established by the base rates schedule
in effect from time to time.
55. Shipyard— U S W (C IO )
A r t ic l e V II. Vacations and Guaranteed Annual Em
ployment Section A — An em ployee who establishes one
year’s continuous em ploym ent as hereinafter defined,
shall be entitled to one week’s vacation with forty (40)
hours’ pay in advance.
Section B— An em ployee who establishes tw o (2) years’
continuous em ploym ent as hereinafter defined, shall be
entitled to tw o (2) weeks’ vacation with eighty (80) hours’
pay in advance.
Section C— An em ployee who establishes three (3) years’
or more continuous em ploym ent as hereinafter defined,
shall be entitled to tw o (2) weeks’ vacation with eighty (80)
hours’ pay in advance; and, in addition thereto, the em
ployer shall warrant not less than forty-eight (48) weeks’
em ploym ent, including the aforem entioned tw o (2) weeks’
vacation with pay, during each year following the date
of this agreement, so long as this agreement remains in
full force and effect and this provision •remains without
m odification.
56. L im ited p rice variety store— R W D (C IO )
A r t ic l e I : Section 2. All union members with twelve
(12) m onths’ seniority are hereby guaranteed an opportu
nity to work for the com pany for forty-tw o (42) weeks at
full time during the calendar year, and as many other
regular girls who are union members are entitled to the
same guarantee as business conditions warrant, store by
store. Regular salesgirls who are guaranteed under this
section an opportunity for forty-tw o (42) weeks’ full
time work during the calendar year shall be assured an
opportunity to work at least thirty-six (36) hours per
week during the remaining weeks of the year.
57. R etail w o m e n ’ s cloth in g— R W D (C IO )
F i r s t , (b) W henever the term “ steady sales clerk,” or
“ steady sales clerks,” shall be used in this agreement, it
shall refer to such sales employees of the employers who are
guaranteed under this agreement a minimum of ten and
one-half (IOJ/2 ) months or ten (10) months work in each
year, as hereinafter provided.
(c) W henever the term, “ steady-extra sales clerk” or
76
GUARANTEED WAGE PLANS IN THE UNITED STATES
“ steady-extra sales clerks,” shall be used in this agreement,
it shall refer to such sales em ployees o f the employers who
are guaranteed under this agreement a minimum of thirtyone (31) weeks or tw enty-nine (29) weeks of em ploym ent
in each year, as hereinafter provided.
T h i r d . (a) “ Steady em ployees” shall be em ployed for
a minimum period of ten and one-half (10%) months in
each year b y the em ployer.
(b) “ Steady-extra em ployees” shall be em ployed in
each year for a minimum period of twenty-one (21) con
secutive weeks in the fall season, to comm ence October
1st, and fourteen (14) consecutive weeks in the spring
season, to com m ence on M arch 15th.
B. P LA N S W IT H O U T
R E Q U IR E M E N T
EM PLOYEE
E L IG IB IL I T Y
1. P l a n s W it h o u t E l ig ib il it y R e q u ir e m e n t b u t w it h
P r o v is io n fo r M o d if ic a t io n or A br o g a t io n of
P lan
58. R etail fu rs— F W (C IO )
N i n t h . The em ployer guarantees full em ploym ent for
a period of ten (10) m onths in each year of this agreement,
except as herein specifically provided. During the months
of July and August in each year, the work shall be divided
equally am ong all of the union em ployees * * *.
During the guaranteed period of em ploym ent, if and when
a member of the association finds himself overmanned
with employees, it is agreed that he m ay and shall submit
his situation and difficulties for arbitration in the manner
hereinafter provided.
The em ployer is to supply all necessary records required
b y the arbitrators. If the arbitrators shall reduce the
guaranteed period of em ploym ent, the additional lay-off
period shall be on the basis of equal division of work
am ong all union em ployees.
In the event that at any time during the period of this
agreement there shall be declared a general strike or a
general lock-out am ong the wholesale fur manufacturers
in New Y ork City, the union and the association will
im m ediately subm it to arbitration as provided hereunder
the question of whether there shall be instituted a divi
sion of work among all of the union employees hereunder,
and the decision of the arbitrators shall be final and bind
ing on all parties hereto.
59. R etail fu rs— F W (C IO )
Supplementary Agreement. A. The em ployer guaran
tees to all permanent [after a trial period of 2 weeks] em
ployees one thousand seven hundred and fifty (1,750)
hours of work during each year of the contract.
The aforesaid provision shall not apply in only the
follow ing tw o instances:
1. An unforeseen catastrophe which makes it physically
impossible for the em ployer to furnish one thousand seven
hundred and fifty (1,750) hours of work.
2. Where the em ployer actually does not have 1,750
hours of work for the particular year except that an
em ployer who violates this agreement b y sending work to
outside contractors shall be deemed to guarantee 1,750
hours of work in any event.
2. P l a n s
W it h o u t E l ig i b i l i t y R e q u ir e m e n t a n d
W it h o u t P r o v is io n f o r M o d if ic a t io n or A b r o g a
t io n of P l a n
60. R etail m e n ’ s cloth in g— A C W (C IO )
B. The association and each association member agree to
supply to the em ployees em ployed b y the association
mem ber a minimum period of em ploym ent of ten months
in each year, and to agree to pay all such employees for at
least ten m onths in such year. Said ten m onths’ em ploy
ment shall be distributed as follow s: September, October,
N ovem ber, Decem ber— full tim e; January, February—
part tim e; M arch, April, M ay, June— full tim e; July,
August— part time.
61. R eta il fu rs— F W (C IO )
4. The firm agrees to guarantee a minimum of thirtyeight (38) full workweeks per year to all workers as o f ------- .
15.
There shall be no dismissal from em ploym ent
without just cause during the entire life of this agreement.
15A. During the height of the season the firm has a
right to hire additional workers on a tem porary basis,
providing that such worker is guaranteed at least 20 weeks
of em ploym ent or otherwise agreed upon at the time of
hiring.
62. Fur design in g an d pattern m akin g— F W (C IO )
A r t ic l e T w e l v e . The firm agrees that each em ployee
shall be guaranteed a minimum of the follow ing number of
full weeks of w ork: (a) Fitters— 47 weeks each year, (b)
Balance of shop— 46 weeks each year.
III. A Full Year’s Guarantee to Part of the Work
ing Force
Plans that are limited to a part of the working force m ay
restrict coverage to selected occupations or departments,
classes of employees, designated individuals, basic w ork
force, key employees, or basic crew.
A. P LA N S W IT H
Q U IR E M E N T
EM PLOYEE
E L IG IB IL IT Y
RE
1. P l a n s W it h E l ig i b i l i t y R e q u ir e m e n t a n d W it h
P r o v is io n f o r M o d if ic a t io n o r A b r o g a t io n of
P lan
63. T ex tile m ill— R W D (C IO )
F if t h , (a) All persons em ployed for a period exceeding
six weeks shall be considered permanent em ployees and
shall be entitled to seniority rights. All rehirings and
lay-offs shall be done in accordance with seniority, that is,
the last person hired shall be the first person laid off and
vice versa. Each em ployer agrees to em ploy a basic crew
which shall not be subject to lay-off at any time except as
hereinafter provided. Each em ployer agrees to continue
on his basic crew for the period of this agreement, except
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
as hereinafter provided, the num ber of em ployees that he
has at the present time on the basic crew. Where an
em ployer has not previously had an agreement with the
union, then the number of the basic crew of such em ployer
shall be the number of employees in the category com pre
hended b y this agreement which the em ployer has con
tinuously em ployed all year round for the tw elve months
previous to the signing of this agreement.
(b) It is clearly understood and agreed that if at any
time during the period of this agreement conditions should
arise which the em ployer believes make it necessary for
him to obtain a reduction in his staff, the em ployer m ay
request from the union permission to reduce his basic crew.
The em ployer agrees to show the necessary records with
respect to the am ount of business done b y him, etc., to the
proper union authorities to enable them to determine
whether the request for a reduction in the basic crew is
proper. The union shall make a decision within one week
after request is made for a reduction in the basic crew as to
whether or not the said request will be granted. If the
em ployer is not satisfied with the decision of the union in
this connection, then the m atter shall im mediately be sub
m itted to arbitration as provided for herein.
64. W h o le sa le textiles— R W D (C IO )
4. Permanent Employees and Lay-Offs: A. All persons
em ployed for a period exceeding four weeks shall be
considered permanent employees. Permanent employees
shall be entitled to seniority rights.
B. The em ployer shall have the right to lay off permanent
employees and all lay-offs and all rehiring shall at all
times be done in accordance with seniority, that is, the
last person hired shall be the first person laid off and the
last person laid off shall be the first person rehired. During
the period of lay-offs there shall be no overtime.
C. Each em ployer agrees to em ploy continuously a
basic crew of union employees in his employ. This ba ^ c
crew shall not be subject to lay-offs during the terms o f
this agreement. Each em ployer shall establish a basic
crew in his respective establishment b y agreement with
the union and the number of such minimum basic crew
shall be inserted in each individual agreement with the
respective employer. The number in the basic crew
shall not be reduced unless there has been an appreciable
reduction in business for other than seasonal reasons, or a
permanent withdrawal of capital or some unavoidable
cause which will make it impossible for the em ployer to
continue em ploying all the workers of the basic crew.
Thp em ployer shall make such request from the union in
writing. Should the union fail to agree to said reduction
within 72 hours after such request the matter may be
subm itted to arbitration pursuant to the terms of this
agreement.
65. W h o le sa le dry g o o d s— R W D (C IO )
5. All persons em ployed for a period exceeding tw o (2)
weeks, shall be considered permanent employees. Per
manent employees shall be entitled to seniority rights.
All rehirings and lay-offs shall be done in accordance with
seniority, that is, the last person hired shall be the first
person laid off, and the last person laid off shall be the first
77
to be rehired. The em ployer agrees to continuously em ploy
[number] union persons in his em ploy. These shall
constitute the basic staff, and shall not be subject to lay
offs at any time.
66. W h olesa le dry g o o d s — R W D (C IO )
E ig h t h . A. All persons em ployed for a period o f four
weeks (which shall be extended to six weeks upon written
notification b y any member of the association to the union
with respect to any particular em ployee) shall be considered
permanent employees, and shall be entitled to seniority
rights, b y department, wherever practicable. Wherever
it is practicable an old em ployee (in point of service) may
be transferred from one department to another. The
oldest man shall have the job wherever he can do the work.
All rehirings and lay-offs shall be conducted in accordance
with seniority rights, that is, the last person hired shall be
the first person laid off and vice-versa. Each em ployer
agrees to continue on his basic crew for the period of this
agreement, except as hereafter provided, the number of
em ployees who are at present time on the basic crew. The
members of the basic crew shall not be subject to lay-offs
at any time except as herein provided. Should the afore
m entioned basic crew work a hardship on any m em ber o f
the association at the inception of this agreement, the
union agrees to subm it the question of a fair basic crew
to arbitration, unless the matter shall be adjusted satis
factorily betw een the mem ber and/or the association and
the union. In those establishments where prior to this
agreement there was no basic crew established, the number
o f em ployees to be included in the basic crew shall be
adjusted in accordance with the procedure for adjustm ent
o f disputes and/or arbitration as hereinafter provided.
B. It is clearly understood and agreed that during the
period of this agreement, should conditions arise which
necessitate a reduction in staff of any m em ber of the associ
ation, such m em ber m ay request from the union permis
sion to reduce his basic crew to the extent deemed neces
sary. Should the union question the need for, or am ount of,
such reduction, the matter shall then be subm itted to arbi
tration in accordance with the provisions of paragraph
Sixteen of this agreement. The union shall be required
to answer the request for reduction of basic crew within
one week.
67. P u b lic utility— O E (AFL)
Guaranteed Annual Incom e: Em ployees who during
the past year were included in Schedule A will be retained
on schedule A, attached hereto and made a part hereof.
Em ployees on this schedule who are paid on a monthly
basis will be guaranteed that there will be no deductions
from their regular m onthly wage during the period of this
contract because of lack of work or inability on the part of
the com pany to supply work. Em ployees on the A
Schedule who are paid on an hourly basis will be given the
opportunity to work 2,080 hours during the year, less
vacations and holidays.
If in any location the com pany is required to go to a
workweek exceeding 40 hours, the men released as a result
of the Governm ent edict will be considered to have their
guarantee terminated.
78
GUARANTEED WAGE PLANS IN THE UNITED STATES
2. P l a n s W it h E l ig i b i l i t y R e q u ir e m e n t b u t W it h o u t
P r o v is io n f o r M o d if ic a t io n o r A b r o g a t io n o f
P lan
68. N ew spa per p u blish in g— P P A (AFL)
S e c t io n 11. 1. In com pliance with Section 7 (b) (2) of
the Fair Labor Standards A ct no individual shall work
more than 2,000 hours in any calendar year.
2. Each regular em ployee of the com pany will be
scheduled for five shifts a week for each of the 52 weeks
in the calendar year in accordance with section 9. New
employees may be included as regular employees b y
written notice from the com pany to the union.
69. S h o e m a nu factu ring— E A (In d.)
A. Definition, Gross Amount, Determination Thereof: The
parties hereto agree that the capital, management and
labor interests in the business of t h e ------- Com pany shall
constitute a true partnership. The parties hereto agree
that the drawing accounts as referred to herein * * *
shall not be less than * * * per week unless pre
scribed b y law and/or the labor market warrants a higher
or lower rate. Individual drawing account adjustm ents
m ay be made b y agreement between the management and
the executive com m ittee of the union.
The parties agree that — percent of the wholesale value
of the shoes packed during the term of this agreement
shall be a fair reward for the labor interest as hereinafter
limited, proper adjustm ent being made for reduced value
for shoes classed as “ dam aged’ 7 and exceptions as noted
herein under title “ Paym ent of Governm ent C ontracts.”
M anagement agrees that the salary of individuals
named on Schedule “ A ” hereto attached shall not be
included in this percentage fund. A t the end of each
fiscal year of the com pany, adjustm ents on the number
o f shoes packed are to be made, using the same form ula
in order that the N et Shoes Packed figure of the entire
business will be the same as the N et Num ber of Shoes
Packed figure shown on the report o f ------- or any other
com petent auditors’ report for the same fiscal year, with
exceptions noted herein, under title “ Paym ent of G overn
m ent C ontracts” .
M anagement agrees to give free access to the necessary,
books and records of the com pany and full cooperation
once during each calendar year to an auditor or auditors
selected b y the union to check the records which pertain
to the percentage fund. M anagem ent agrees to publish
on the several bulletin boards within the shipping depart
m ent periodically at least once each m onth an estimate
of the earnings, drawing account, and reserve account paid.
M anagem ent will, on due notice and at time convenient to
it during regular business hours, permit any qualified agent
of the union to audit such com plete accounts as related
to the calculation and com putation o f the percentage fund
and reserve accounts.
B. Payment o f Government Contracts: B oth parties to
this contract agree that the sale of shoes made and packed
under the United States Governm ent contracts and any
shoes packed or sales of such shoes o f a similar and unusual
nature shall be treated separately at an agreed rate of
percentage different from the rate herein set forth as appli
cable to other sales and shoes packed and management
agrees that it shall pay to the “ labor interest” its pro rata
share of any increase in the price of shoes derived from
governmental contracts; provided, however, such increase
in the price of shoes derived from governmental contracts
shall not include any increase in the price of shoes where
governm ental specifications warrant such •increase b y
reason of increase in the price of materials.
C.
Drawing Accounts and Classification of Membership:
In order to effect an orderly distribution of the union
members’ share of the receipts o f the com pany, the parties
agree that a drawing account system, as hereinafter more
fully set forth, shall be em ployed. — percent of the whole
sale value of the shoes packed during the term of this agree-'
ment shall be credited to the aforementioned drawing
account by management.
That furthermore, all drawing accounts had, except as
provided in the section of this contract designated “ Over
tim e” , shall be charged to the aforenamed drawing ac
count, which said payments have been classified under the
heading o f “ Shipping Departm ent Labor” on the books of
the com pany. Different groups of employees shall, as
hereinafter more fully set forth, constitute the “ labor
interest” hereinabove referred to. Each worker in the
jurisdiction of the union shall be given a weekly basis
which shall be at a rate considered by the management and
the union equal to the w orker’ s worth to the organization.
T he union agrees, for the purpose of calculating the weekly
drawing account of each mem ber of the union during the
term o f this agreement, the rate effective on the date this
contract is executed shall be taken, especially that due
credit or allowance shall be granted for any change made
b y virtue o f provisions herein set forth.
All account drawings shall be based on a differential rate
as herein agreed upon.
It is agreed that during the period o f this contract,
changes m ay be made in the drawing account rates or wages
but shall not becom e effective or paid except upon mutual
agreement b y and between management and the presi
dent of the union. Such drawing account rates and wages
and changes in the drawing account rates and wages shall
be held in strict confidence between said management and
the president o f the union except, however, wherever said
parties shall deem it necessary to obtain the necessary
inform ation for an equitable and just change in the draw
ing account rates and wages.
The drawing account rates of the president o f the union
and o f the executive com m ittee shall n ot be redu ced‘during
the time o f office because of time spent in the discharge of
union business.
M anagem ent further agrees that the drawing account
rates of the union members named in Schedule “ A ” shall
be based upon the same earnings hereinbefore set forth
and shall follow proportionately the drawing account rates
of other members of the union, but such drawing accounts
shall not be charged against the percentage fund.
W henever matters pertaining to the drawing account
shall not appear to be covered b y this agreement, then such
matters shall be settled and com prom ised b y agreement
between management and the union, b y their respective
representatives.
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
If during the term of this agreement, the total drawing
accounts paid shall exceed — percent of the wholesale
value of shoes packed during the term of this agreement,
with exceptions as noted for G overnm ent contracts, and
the management is convinced that such excess will not be
balanced autom atically back to the agreed basis during
the remaining period of the contract, then the weekly
drawing account shall be revised downward to a base
which, it is expected, will equal — percent of the wholesale
value of the shoes packed during the term of this agreement
(adjustm ent being made for the reduced value of shoes
classed as “ dam aged77 and shoes produced under govern
mental contracts).
The said “ labor interest77 as hereinbefore referred to,
shall consist of the following classifications of membership
and the rights, interests, and benefits of each of such
classifications:
“ The Class A membership shall consist of — percent
o f the total number of shipping departm ent workers, not
including the direct agents of management as enumerated
in Schedule B attached hereto as of M arch 4, 1946, and
with the exception of those workers who, because of dis
qualifications as hereinafter more fully set forth, were
unable to attain the said Class A membership. The Class
A worker shall consitute a permanent labor force and shall
n ot be subject to lay-offs. However, no em ployee shall
becom e a Class A m em ber until he or she has had at least
tw o years of service in the shipping department of the
------- Com pany or at least tw o years of service in the office
or factory of the M ilwaukee plant of t h e ------- Com pany.
“ As heretofore set forth, the total membership of Class
A workers is lim ited to — percent of the total number o f
shipping departm ent workers, and includes those Class A
mem bers and workers who attain a Class A membership
while on leave of absence; it being understood and agreed
that care m ust be taken that the rights of all workers who
are on leave of absence are preserved when prom otions to
Class A m em bership are made.
“ The Class B membership shall consist of all those
workers, except those hereinafter or hereinbefore classified
as otherwise, who have been em ployed at th e ------- Com pany
(shipping department) for a period of at least tw o years.
These said Class B members shall im mediately begin to
participate in the Share Production Plan at the com m ence
ment of the first four-week period after the second anni
versary o f their em ploym ent, and they shall be entitled
to all the rights, interests, and benefits of the Class A
membership, except that they m ay be subject to lay-off
in accordance with the terms of this contract.
“ The Class C membership shall consist of all workers
who had n ot reached the age of forty-five years at the
time o f their com m encem ent of em ploym ent at t h e ------Com pany, M ilwaukee plant, such members, of course,
being members in good standing in the Union of ------Shipping D epartm ent Em ployees, bu t who have served
less than tw o years.
“ The Class D membership shall consist of those workers
who are forty-five years of age or more at the com m ence
ment of their em ploym ent with the com pany and who
have not previously earned a higher classification hs
hereinbefore set forth.
79
“ The Class D B membership shall consist of those Class
D members who have com pleted two years of em ploym ent
with the com pany and who are eligible to the Share
Production Plan. The same is hereinbefore explained in
reference to Class B members. However, such Class D B
members shall at no time be eligible for prom otion to Class
A membership.
“ The Class H A membership shall cpnsist of those
workers who were previously classified as Class A members
but, who, because of their physical or mental impediments,
were unable to perform the minimum work provided in
the various shipping department schedules and conse
quently were taken out of the Share Production Plan.
Such members are to be paid on an hourly basis. Other
wise, they shall have the same rights and benefits of the
Class A membership with respect to lay-offs.
“ The Class H B membership shall consist o f those
workers who were previously classified as Class B members
but who possessed some physical or mental im pedim ent
and could n ot perform the minimum am ount of work
provided in the various shipping department schedules
and consequently were taken out of the Share Production
Plan. Such members shall be paid on an hourly basis.77
Class B members shall be prom oted to Class A member
ship according to seniority upon vacancy occurring in the
Class A membership hereinbefore set forth and agreed upon
as being limited to — p e r c e n t-------of the total number of
shipping department workers (including those Class A
members on leave of absence) due to death, resignation,
discharge, or permanent term ination of em ploym ent.
Provided, however, if there are no members in the Class A
membership, then the Class C members shall be prom oted
to Class A membership according to seniority upon
vacancy occurring in the class A membership hereinabove
set forth and agreed upon as being limited to — percent
-------of the total number of shipping department workers
(including those Class A members on leave of absence) due
to death, resignation, discharge, or permanent term ination
of em ploym ent; provided, further, however, that such
Class C members shall have at least tw o years7 service
record at the Milwaukee plant of t h e ------- Com pany.
All Classes A, B, and D B members are to share in the
percentage fund in accordance with their basic rate and the
present existing agreement with management.
All Classes B and D B members may be laid off when
production needs ara not sufficient to maintain Class A
members working at least forty hours per week. In the
event of necessity of lay-off, there shall be no discrimina
tion between Class C and Class D members, except on the
basis of seniority rights. And, furthermore, in the event of
a further lay-off, there shall be no discrimination between
Class B members and Class D B members, also, except on
the basis of seniority rights.
Classes H A , H B , C, and D members are wage earners
and work for a stipulated amount per hour, the total of
their wages being paid out of the gross share before any
balance is allocated to the accounts of Classes A, B, and
DB.
Earnings of Classes A, B, and D B members are to be
allocated to the individual account of each of said members,
that member being paid in cash any balance to his or her
80
GUARANTEED WAGE PLANS IN THE UNITED STATES
credit after providing for a reserve fund of nineteen
percent (19% ) of his or her annual estimated income, which
said reserve includes provision for sick leave as hereinafter
more fully set forth. The adjustments on said individual
account shall be made at the end of each four-week period,
and when the reserve in each individual account exceeds
nineteen percent (19% ) of the annual estimated income,
the excess shall be paid during the following four-week
period, permission being granted to management to include
said excess in the regular weekly drawing.
Management further agrees to pay interest on the
balance in the individual reserve accounts of the said
Classes A, B, and D B members at the same rate as is
currently being paid b y banks on savings deposit accounts
(currently agreed at 1 % per annum), except, however, such
computations shall be made at the end of the four-week
period in accordance with the adjustm ent made on the
individual account of each member.
It is further agreed that jobs shall be made available to
those members of the union who are on leave of absence
because of their service in the armed forces of the United
States or its auxiliaries; and provided that he or she is
physically able to accept such em ploym ent, and provided
further that such m em ber of the armed forces of the
United States or its auxiliaries gives the stipulated notice
of his or her discharge from the said armed forces of the
United States or its auxiliaries and his or her desire to
return to em ploym ent in accordance with the Selective
Training and Service A ct of 1940 (Section 8), the Arm y
Reserve and R etired Personnel Service Law of 1940
(Section 3), the Service Extension A ct of 1941 (Section 7),
The Servicemen's R eadjustm ent A ct of 1944 (Section
600-607), and the W ar M obilization and Reconversion
A ct of 1944, and the amendments thereto. It being under
stood b y the parties hereto that such members on leave
of absence, upon reem ploym ent, shall return to their
respective positions or jobs which they had possessed at
the time of their induction into the armed forces of the
United States or its auxiliaries, taking into, consideration
the fact that their seniority record continues while in the
armed forces of the United States or its auxiliaries. In
other words, the veteran is entitled to reinstatement in his
form er position (1) if the position was not a tem porary
one; (2) if the veteran left the position subsequent to
M ay 1, 1940, to enter active m ilitary or naval service in
the land or naval forces of the United States; (3) if he is
still qualified to perform the duties of such position; (4) if
he makes application within ninety days after he is relieved
from training and service or from hospitalization continuing
after discharge for a period of not m ore than one year; (5)
if the circumstances at the ------- Com pany are not so
changed as to make it impossible or unreasonable to
reinstate a veteran to his form er position or to a position
of like seniority status, pay, or drawing. Provided further,
however, that nothing herein contained shall affect those
workers who shall enlist in the service of the M erchant
Marine after August 14, 1945, it being understood that
service in the M erchant Marine is of a private nature and
compensable accordingly.
Management agrees that those employees within the
jurisdiction of the union, whose payments have not been
classified under the heading of “ Shipping Departm ent
L a b or" on the books of the com pany in the past such as
the employees named in Schedule A, shall receive com
pensation in a m ethod and at rates and adjustm ents par
allel to the members working under the aforem entioned
drawing account system.
It is agreed that during the period of this contract,
changes m ay be made in the differential base rate upon
mutual agreement b y and between management and the
executive com m ittee of the union.
I t is further agreed, for the purpose of calculating the
drawing account of each individual m em ber of the union,
the present differential rate shall be the basis of calculation.
H ow ever, adjustments in individual differential rates m ay
be changed during the period of this agreement, bu t such
individual adjustments shall not be effective or paid until
approved b y the president of the union; provided, further,
as hereinbefore set forth, the differential rates of the
president of the union and the members of the executive
com m ittee shall not be reduced during the time of office
because of time spent in the discharge of union business.
D . Stabilized Annual Incom e: For the purpose o f stabi
lizing annual earnings o f the workers o f the com pany in
the union's jurisdiction, it is agreed that each Class A, B,
and D B m em ber shall receive at least one drawing for
each week that this agreem ent is effective, and that the
am ount of such drawing will be at least one fifty-second
(%2) o f the m em ber's estimated yearly income, except
as that estimated yearly incom e m ay be changed in accord
ance with the provision perm itting adjustm ents o f the
individual rates. H ow ever, for the purpose o f establish
ing in the shipping departm ent uniform ity of drawings
for absence, due to illness, the union agrees that each
Class A, B, and D B m em ber shall be entitled during the
term o f this contract, to five (5) days o f absence, with
drawings, for recognized cause.
E. Reserve and Overdraft: The parties agree that it is
highly advisable to establish a reserve in the workers’
fund of each individual Class A, B, and D B m em ber, in
such instances as hereinbefore set forth, in order to guard
against the disruptance o f drawing schedules due to ad
verse business conditions and both parties agree to pro
m ote the accumulation and maintenance o f such reserve
accordingly. C om m en cin g ------- this reserve shall consist
o f nineteen percent (19% ) of the annual estimated income,
the same being com puted b y multiplying the present
average hourly drawings b y 2,080. The said nineteen
percent individual reserve account shall include drawings
for five (5) sick days. H owever, management shall con
tinue to pay the regular weekly drawings including weeks
with holidays, vacation, and five (5) days' sick leave, if
b y so doing the individual reserve is n ot reduced below
five percent (5 % ) o f the annual estim ated incom e, bu t
no m onthly or adjusted compensation paym ents will be
had if by so doing the said reserve is reduced to a sum less
than nineteen percent (1 9 % ) of the annual estimated
income.
W hen it is apparent that due to adverse business con
ditions, the said reserve account shall be depleted if no
change is made, the drawing account rate shall be revised
b y agreement betw een the management and the executive
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
com m ittee o f the union to a point where the reserve
account will at no time be less than five percent (5 % )
of the annual estimated income, except as hereinafter
stated management shall pay a premium for vacation.
F.
Payment of Wages and Drawing Account: The mini
mum drawing account rate to be paid during the life of
this contract shall be set b y mutual agreement between
management and the executive com m ittee of the union.
M embers recognized as substandard b y the Fair Labor
Standards A ct authorities may be paid at a rate approved
b y said authorities.
In com puting the fair rewards for labor and establishing
a minimum paym ent o f wages and/or drawing accounts,
the present and existing M inimum W age and Hour Law
was taken as a basis and, therefore, provisions in this
contract as therein stated shall be subject to change in
the even t the G overnm ent shall increase the minimum
wage.
70. C e m e n t m a n u factu rin g— U S W (C IO )
X . (d) During the p e r io d -------t o -------- , the com pany will
work eight (8) men forty (40) hours a week. It is under
stood that length of continuous service shall govern the
selection of these eight (8) men.
81
74. W h olesa le dry g o o d s — R W D (C IO )
The em ployer agrees that his basic staff shall consist of
-------union employees. Of these, the em ployer shall em
ploy ------- persons as general help, ------ persons as office
h e lp ,-------persons as salesmen, buyers, or credit men.
The union shall not insist that the basic staff of the
em ployer in each category be filled except that if, during
the life of this contract, the union shall feel that one or
more vacant positions on the said basic staff should be
filled, that the request for same shall be made to the
em ployer, and upon failure of the em ployer to agree to
the union’s request, then the m atter shall be considered a
grievance and be subject to arbitration as provided for
in the contract. The failure of the union to demand
replacements of vacant basic staff positions, shall not be
deemed a waiver of the union’s right to subsequently
make such a demand. Upon the request of the union
showing the necessity for filling one or m ore vacant staff
positions, the em ployer shall be required to immediately
fill same. The failure of the em ployer to fill a vacant
basic staff position, when one has becom e or will becom e
vacant, shall not be deemed a violation of the contract.
75. R etail m e n ’ s cloth in g— R W D (C IO )
71. R eta il a u to m o b ile s— U A W (C IO )
4. All men listed on Exhibit “ A ” are permanent em ploy
ees under the 52-week work clause; all other employees
hired shall be tem porary employees and inform ed to that
effect when they are hired.
72. C lean in g an d dy ein g — A C W (C IO )
The em ployer shall not at any time reduce the wages
or earnings of any em ployee who earned or may hereafter
earn m ore than the minimum scale provided for herein and
all weekly em ployees shall receive their full pay each week
in the year regardless of whether there has been sufficient
work to keep them occupied full time during the week.
This covers all inside cleaning and dyeing workers (about
500 in number) in shops under contract w it h -------[union],
B. P LA N S W IT H O U T
R E Q U IR E M E N T 1
EM PLOYEE
E L IG IB IL I T Y
1. P l a n s W it h o u t E l ig i b i l i t y R e q u ir e m e n t b u t W it h
P r o v is io n
for
M o d if ic a t io n
or
A b r o g a t io n
of P l a n
73. K nitting mill— N o union
It is hereby agreed (1) T o operate under a guaranteed
work plan for a period of 52 weeks beginning ------- and
en din g-------, during which annual period the said em ployees
shall be guaranteed work for fifty (50) weeks of forty
(40) hours per week, or eight (8) hours per day, provided
however, that the said [com pany] shall not be bound to the
said fifty (50) weeks of forty (40) hours per week, or eight
(8) hours per day for causes beyond its control.
(2) The parties hereto m utually agree that the rates of
pay during the life of this agreement shall be in accordance
with the wage schedules set forth in detail in Schedules A
and B attached hereto and made a part hereof.
A salesman m ay be discharged upon tw o weeks’ written
notice b y the em ployer to the union, sent b y registered
mail, and with the written consent of the union. Such
notice b y the em ployer to the union, requesting such dis
charge, shall set forth the details impelling this request
for the discharge. (Slack season, however, shall not be
deemed a cause or a reason for the discharge of a regular
salesman.) Upon the consent in writing, b y registered
mail, given b y the union, such salesman affected by the
notice shall be discharged at the end of such tw o weeks’
period of notice.
76. R a ilroa d repair an d m a in ten an ce— F S C (A FL)
Agreement With the Federated Shop Crafts Providing for
M inimum Force: (a) It is agreed between t h e ------- Rail
way and the Federated Shop Crafts that duripg the entire
m onth of J a n u ary------- a minimum force of 2,300 positions
o f mechanics, apprentices, helpers, and coach cleaners will
be em ployed in the maintenance of equipm ent departm ent;
this num ber o f positions to be distributed over the system
of crafts and at points as shown on the attached statement
and as hereinafter provided and will work six days a week.
It is further agreed that this minimum force of 2,300
positions will be continued from month to month during
the entire year ------- on the six-day-week basis, unless
changed in accordance with the provisions of section (e ).
(e)
It is further understood and agreed that in event
any situation arises during the life of this agreement which
would seriously affect either party, a conference will be
held between the management and the general com m ittee
for the purpose of reaching an agreement. In event of
failure to do so, it is understood and agreed that either
party m ay terminate this agreement b y serving ten (10)
days’ notice in writing upon the other of intention to do so.
82
GUARANTEED WAGE PLANS IN THE UNITED STATES
77. R e frig era tor car serv icin g — U P W (C IO )
A r t ic l e I. Working Hours:
T he basic gang em ployed
b y the em ployer hereunder shall consist of three mechanics,
tw o helpers, and one car washer. Each of such men shall
be em ployed b y the em ployer for tw o thousand hours
during the period of one year covered b y this agreement,
and shall receive weekly paym ent on the basis of forty
hours per week irrespective of the number of hours worked
b y him in any such week at the regular scale of wages here
inafter provided; except that if the hours worked b y any
such em ployee under the jurisdiction of this contract are
in excess of eight hours in any workday, or in excess of
forty-eight hours in any workweek, as the case m ay be,
such excess hours shall be paid for at the rate of time and
one-half regular scale rate for which he is em ployed, pro
vided, however, that in the event of storms, floods, acts of
God, death, discharge, incapacity of employees, or condi
tions beyond the control of the em ployer, such aggregate
number of tw o thousand work hours cannot be com pleted
in the period covered b y this agreement for any em ployee,
there shall be a reduction of such total number of hours
corresponding to the num ber of hours which b y reason of
said conditions, it was im possible to complete.
In the event the em ployer ceases the operation of
refrigerator cars in the service o f ------- Com pany, this con
tract will be void on 30 days’ written notice.
There will be no replacements of the basic gang by
reason o f tem porary reduction caused b y sickness or for
vacations.
This agreement shall relate only to employees of the
em ployer a t ------- and does n ot apply to superintendents,
foremen, and clerks.
78. P u b lic utility— O E (A F L )
A r t ic l e IX . Guaranteed Work: Section 1. T w o Year
Guarantee, (a) Class A em ployees as defined in Article
V III, Classification of Em ployees, Section 1, are included
in the Guaranteed W ork Plan as hereinafter provided for.
Class B and Class C em ployees are n ot included in the
Guaranteed W ork Plan.
(b) The com pany agrees to provide work at wage rates
agreed upon b y the com pany and the union, for a period of
tw o (2) years from the effective date of this agreement, to
all Class A em ployees as provided for in Article V III,
Classification of Em ployees, of this agreement. It is
further agreed that should a decrease in work, due to
changing conditions in any plant or department, require a
reduction in personnel, em ployees not under the Guaranteed
W ork Plan will be laid off first. Should further reductions
be necessary, it is agreed that em ployees with the least
seniority under the Guaranteed W ork Plan may be trans
ferred to other departments or plants where their services
are required at existing rates for the jo b to which they are
transferred. It is further agreed that should such transfers
becom e necessary, such em ployees will be paid a relocation
wage differential equivalent to the difference between their
form er rate and their new rate for a period of six (6) months
follow ing their transfer. In no case shall the wage differ
ential paym ent exceed thirty percent (30% ) of the em
ployee’s average m onthly wage during the last twelve (12)
months in his regular employm ent.
(c) Those employees who are guaranteed work under this
article will be given an opportunity to work 2,080 hours
during each o f the guaranteed w ork years, less vacation and
holidays.
(d) A schedule shall be subm itted to the union listing
the names o f em ployees who are guaranteed work.
(e) The right by the com pany to suspend or discharge an
em ployee for cause as provided for in this agreement shall
in no way be infringed upon through the application or in
terpretation of this article.
2. P l a n s W it h o u t E l i g i b i l i t y R e q u ir e m e n t an d
W it h o u t P r o v is io n f o r M o d if ic a t io n o r A b r o g a
t io n o f P l a n
79. F lou r m ill— C W (AFL)
It is agreed upon by the union and the em ployer that the
base crew of sixty-tw o (62) men in the mill, feed plant,
elevator, mill engine room , and other miscellaneous activ
ities will be guaranteed a minimum workweek of fortyeight (48) hours for the whole 12 months, the last 8 hours
to be on time and one-half, and if there is not sufficient
work to com plete the 48 hours during any week with ex
ceptions of those weeks that include holidays designated
by the union contract, then [company] will pay each and
every em ployee his wages for any hours not worked up to
48 hours.
80. T ex tile d y ein g an d fin ish in g— M P (In d .)
S e c t io n I. Salary and Hours: The com pany agrees to
continue to em ploy the members of the association now
presently in the em ploy o f the com pany throughout the
period beginning with t h e ------- and ending with t h e -------- ,
and guarantees to pay to each journeym an printer operat
ing from seven to eight color machines total wages for said
period of not less than thirty-eight hundred fifty-eight
dollars and forty cents ($3,858.40), and further guarantees
to pay each journeym an printer operating from nine to
twelve color machines total wages for said period of not
less than four thousand forty-five dollars and sixty cents
($4,045.60), payable weekly at the respective rates per
week of seventy-four dollars and tw enty cents ($74.20)
and seventy-seven dollars and eighty cents ($77.80).
The com pany agrees that each of the said mem bers of the
association in the em ploy of the com pany throughout the
period covered b y this contract shall, su bject to and in
accordance with the provisions of this contract, w ork not
m ore than tw o thousand (2,000) hours during the period of
fifty-tw o (52) calendar weeks of the period covered b y this
contract.
81. S oa p m a n u factu rin g— S W (C IO )
A r t ic l e III. Section 2. All departments except
watchmen and firemen will operate on the five (5) days
basis M onday through Friday. W atchm en and firemen
who must be in attendance at all times, will work on all
days, M onday through Sunday, at regular time. W atch
men and firemen will be guaranteed fifty-tw o (52) weeks of
work per year during the time this contract is in effect.
83
APPENDIX B.— CLAUSES IN GUARANTEE PLANS AND CONTRACTS
82. E lectroplating— E R M W (C IO )
89. R etail ic e and coa l— O E (AFL)
X V II I. The em ployer guarantees to the five mainte
nance men named in the contract between the parties,
d a t e d -------, not less than forty-eight (48) hours of work,
or the m onetary equivalent thereof, in every week during
the fifty-tw o (52) week period which is the term of this
contract. The em ployer also agrees 'to pay the abovementioned maintenance men for the holidays named in
this contract, even though these maintenance men shall
not be required to w ork on these holidays, and to continue
to grant to the maintenance men all the benefits and
privileges which they have heretofore enjoyed.
Wages, Hours, and Working Conditions: On and after
-------the following schedule of wages and hours shall be in
effect:
The engineer-in-charge shall receive tw o thousand seven
hundred ($2,700.00) dollars per year.
Operating
engineers shall receive tw o thousand
($2,000.00) dollars per year.
Time in excess of fifty-six (56) hours per week, or over
twelve (12) hours in any one day, shall be considered
overtim e and shall be paid for at the rate o f time and
one-half time. N o em ployee working under this agree
ment may work over tw o thousand (2,000) hours per
year. Em ployees working under this agreement work
according to Section 7 (b) (2) of the Fair Labor Standards
Act.
83. W h o le sa le sirup distribu tion — R W D (C IO )
E very permanent routeman and cook working for the
members of the association are hereby guaranteed fifty-tw o
weeks of steady em ploym ent in each year at the scale of
wages herein mentioned throughout the life of this agree
ment. Permanent helpers shall during the slack period
share the work.
84. R eta il m e n ’ s cloth in g— A C W (C IO )
S i x t e e n t h . Annexed hereto and made part hereof is a
schedule of the names of the salesmen, stock clerks, and
other employees and their salaries, em ployed by the em
ployer who are protected under the terms of this agreement
which shall be the minimum amount of salesmen, stock
clerks, and other em ployees that the em ployer agrees t o
em ploy throughout the life of this agreement.
N in e t e e n t h . It is further agreed that in the event that
a m em ber or members of the union leave his or their em
ploym ent with the em ployer, that the em ployer shall
im mediately fill such vacancy with another member or
members of the union.
85. R eta il m e n ’ s cloth in g— A C W (C IO )
2. The bushelman working for the members of t h e ------Society are guaranteed 40 hours o f work per week, 52
weeks per year.
86. R etail sh o e s— R W D (C IO )
6.
During the period covered b y this agreement,
em ployer agrees to give continuous em ploym ent to
minimum force of em ployees as hereinafter stated:
manager, 1 selling assistant manager, 2 salesmen,
cashier, and 1 porter.
the
a
1
1
87. R etail fu rs— F W (C IO )
That the following em ployees [names of seven em
ployees] are to be considered permanent employees and
will be guaranteed fifty-tw o (52) weeks f r o m -------t o -------exclusive of overtime.
88.
R eta il liquor— R C (AFL)
3. (B) The em ployer agrees that each sales clerk in
his or its employ shall have fifty-tw o consecutive weeks of
em ploym ent during each year.
90.
R etail den tal su pplies— N o union
W it n e s s e t h : Said em ployer agrees to em ploy said
em ployee a s ------- for a term of one (1) year from the date
hereof, at a weekly salary o f -------.
In consideration of the foregoing on the part of said
employer, said em ployee hereby accepts such em ploym ent
at said salary and agrees that he will diligently and faith
fully apply himself to and perform the work of said em
ployer as he m ay be directed to do b y its fully accredited
representative; that he will not absent himself from the
em ploym ent of said em ployer (except in case of illness),
without the consent of said em ployer; that he will not
during said term of em ploym ent, nor for one year there
after, engage either directly or indirectly in any branch of
business carried on b y said employer, either as a party in
interest or as the em ployee of another concern conducting
a similar business anywhere in the cities of Providence,
R hode Island; or Bridgeport, Hartford, or New Haven,
in the State of Connecticut; or Boston or Springfield in the
State o f Massachusetts.
91.
W a ter transportation— IL A (AFL)
F o u r t h . The com pany further agrees that the following
positions shall be guaranteed twelve (12) months pay at
rates of pay as shown and with not less than tw o (2)
weeks vacation.
General forem an____
Assistant forem en___
Chief clerk__________
Rate clerk___________
Stenographer________
General cashier_____
Baggagem an________
C ity passenger agent.
C ity freight agent___
T icket agent________
$296.
236.
236.
203.
170.
170.
165.
253.
253.
236.
12
72
72
72
72
72
22
22
22
72
m onthly
m onthly
m onthly
m onthly
m onthly
m onthly
m onthly
monthly
m onthly
monthly
The com pany further agrees that seasonable workers
shall be em ployed from the opening of navigation to the
closing of navigation; the following positions classed as
seasonable with m onthly rates of pay as enumerated
below.
84
GUARANTEED WAGE PLANS IN THE UNITED STATES
T icket sellers______________ $159.
72m onthly
Assistant cashiers________
148.
72m onthly
Night clerks______________ 143.
22m onthly
132.
22m onthly
Telephone operator______
Com ptom eter operator___ 132.
22m onthly
Assistant settlement clerk. 132. 22 m onthly
132.
22m onthly
T ypists______________
Billing clerks_____________
132.
22m onthly
Scale of wages shall be not less than as shown above.
Also all employees shall have one (1) day per week off
and in the event any em ployee m ay be requested to work
the seventh (7th) day such duties will be performed at
overtime rate.
In the event of a dispute arising between the com pany
and the union or in the event of the employees or em ployer
having a grievance they shall continue to work and all
such questions in dispute controversies and grievances
shall be settled if possible b y the representatives of the
com pany and the representatives of the union.
92. C lean ing and d y e in g — N o union
1
Employment Contract:
. The em ployee shall enter
into service and com m ence his work hereunder on the
------- and the em ploym ent shall continue for the period of
one year, and for such further period as is provided for
herein.
93. N e w s sy n d ica te— C T U (A FL)
S i x t h , (a) The em ployer guarantees to pay at least
one-half pay of the full weekly wage to a total of fortythree (43) M orse operators in every week throughout the
year. Seniority shall govern as usual in all cases, it being
agreed that the senior men shall fill all jobs as available.
M en on leave of absence am ong the 43 em ployees of
highest seniority will have their places filled in the listed
43 b y substitution of the employees highest in the list of
seniority under the top 43 employees during the time
covered b y the leave of absence only.
IV. Less Than a Year’s Guarantee to Part of the
Working Force
Plans in this group provide a guarantee o f em ploym ent
or incom e for som e definite period (3 months to 50 weeks)
to such em ployees or groups o f em ployees as are specified.
A . P LA N S
W IT H
Q U IR E M E N T
EM PLOYEE
E L IG IB IL I T Y
RE
1. P l a n s w it h E l ig i b i l i t y R e q u ir e m e n t a n d w it h
P r o v is io n f o r M o d if ic a t io n o r A b r o g a t io n of P l a n
94. W a ter transportation— IL A (A F L )
R u l e 21. It is agreed that eight (8) regular terminal
em ployees who are paid on an hourly basis shall be guar
anteed a minimum o f fifteen dollars ($15.00) per week
each, from beginning o f the navigation season on the
Upper Mississippi R iver to the end; provided, that in the
event operations are suspended due to river conditions, or
for any other cause beyond the control of the com pany,
the guarantee shall n ot apply during th e period o f sus
pension.
95. R a d io b roa d ca stin g — A F M (A F L )
Quota: 1. The station agrees to spend each year during
the term o f this agreement not less than the total sum o f
tw enty-one thousand five hundred tw enty-eight dollars
($21,528.00) for com pensation for its staff musicians.
Personnel: 2. The station agrees to em ploy not less
than eleven (11) staff musicians, including a leader, for
thirty-nine (39) weeks o f each year, except during the
months of June, July, and August, when it will em ploy
at least one (1) staff musician who shall be a leader, and
as m any m ore staff musicians as it m ay require. A staff
musician is one who is paid at a weekly rate and not at a
single perform ance rate. T he station shall have the right
to use all o f its staff musicians in any way or com bination
desired on each broadcast, it shall have full control o f the
instrumentation desired and of the program and selection
o f music, and m ay use staff musicians on comm ercial and
sustaining programs.
T he local will’ furnish the station as required b y it, com
petent and qualified musicians in good standing in the local.
Term: 5. * * * If during the term of this contract
the [union], or any local thereof takes any action resulting
in the interruption o f network service, or network musical
programs, or the service o f the local to the station, the
station m ay suspend this contract as long as such inter
ruption continues. It is further provided that should the
station, during the term o f this contract, lose its present
network service, this contract shall terminate at the same
time such network service terminates. It is further
provided that this contract shall also be term inated should
the operation of this station be discontinued because of
the loss of proper license, war, act of God, or m ajor
catastrophe.
2. P l a n s W it h E l ig ib il it y R e q u ir e m e n t b u t W it h o u t
P r o v is io n f o r M o d if ic a t io n o r A b r o g a t io n of P l a n
96. L im ited p rice variety store— R W D (C IO )
Steady Employment: (a) ’ For Regular Salesladies. A
regular saleslady with 12 m onths’ continuous experience,
in charge o f one or m ore departments, will be given an
opportunity to work 42 weeks full time during the year
and an opportunity to work at least 36 hours per week
during the remaining 10 weeks.
It is understood that the vacation period is included in
the 42 weeks full time. It is also understood that this is
the minimum am ount of work that will be given to any
qualified saleslady, and that whenever possible these girls
will be given more full-time work.
Regular girls with less than 12 m onths’ experience will
be given preference at all times in the allotm ent o f the
remaining work.
97. R eta il w o m e n ’ s cloth in g— R W D (C IO )
M inimum of Employment in Each Year: Third,
(a) “ Steady sales clerks” shall be em ployed for a minimum
period of eleven (11) months in each year b y the employers,
85
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
except those employers who maintain establishments on
Division Street, in the Borough of Manhattan, C ity of
New Y ork. The “ steady sales clerks” em ployed in the
establishments located on D ivision Street shall be em
ployed for a minimum period o f ten and one-half (10K)
months in each year.
(b) “ Steady-extra sales clerks” shall be em ployed in
each year for a minimum period o f nineteen (19) con
secutive weeks in the fall season, to commence October
1st, and tw elve (12) consecutive weeks in the spring
season, to com m ence on March 15th, except in the estab
lishments o f em ployers located -----------. “ Steady-extra
sales clerks” em ployed in the establishments located ------shall be em ployed in each year for a minimum period
o f eighteen (18) consecutive weeks, in the fall season, to
comm ence on O ctober 1st, and eleven (11) consecutive
weeks in the spring season, to com m ence on March 15th.
98. R esta u ran t— H R (A FL)
A r t ic l e V : Sec. 2. Steady bartenders shall receive a
guarantee of em ploym ent at no less than minimum rate
at least forty-eight (48) weeks out o f the year; said year
to com m ence on the date [when] this agreement shall go
into effect.
99. C em etery — F T A (C IO )
X I. (a) The regular employees, Class B, will be em
ployed in the follow ing manner: In each year between the
first M onday in April and the first M onday in Decem ber
the Cem etery shall provide each of said employees with a
minimum period of thirty-three (33) weeks of em ploy
ment during which period said employees shall work on
all working (bell) days. Within such period the Cemetery
shall have the right with respect to each em ployee to
determine when his thirty-three (33) weeks’ em ploym ent
shall com m ence. T he Cemetery may also em ploy men
in this classification prior to the first M onday in April in
each year for such period and on such days as it may deter
mine, but such em ploym ent shall be in addition to and not
included in the thirty-three (33) weeks’ em ploym ent
hereinbefore provided for. The em ployee may, however,
at his discretion, refuse such additional employm ent.
(b) The Cem etery shall be under no obligation in main
taining the regular B basic crew figure (Article X I I here
of) , or in voluntarily replacing a man when the number of
regular B ’s exceed such figure, to guarantee the em ployee
involved work after the first M onday in Decem ber of a
current contract year; the purpose and intent hereof
being that if a regular B is taken on for any reason after
April 20th, such regular B shall not be entitled to em ploy
ment, during a current contract year, after the first M on
day in Decem ber.
100. W a ter transportation— M M P (A FL)
R u le 4. (a) All regularly assigned masters and pilots
shall be guaranteed ten (10) months em ploym ent during
each calendar year. The list of regular em ployees shall
be limited to the number required to operate the vessels
regularly in service in each division. Other employees
covered by this agreement who are called for relief or tem
porary duty shall be considered as extra employees
Only those em ployees who appear on the regularly assigned
list at the beginning of the calendar year or at the begin
ning of the navigation season in the case of the Upper
Mississippi Division, the Illinois Division, and the Missouri
Division shall be considered as regular and included in the
terms o f this guarantee.
B. P LA N S W IT H O U T
R E Q U IR E M E N T
EM PLOYEE
E L IG IB IL IT Y
1. P l a n s W it h o u t E l ig i b i l i t y R e q u ir e m e n t B u t
W it h P r o v is io n f o r M o d if ic a t io n o r A b r o g a
t io n of P l a n
101. T ex tile d y ein g and finishing— M P (In d .)
S e c t io n 3. The com pany agrees to pay each journey
man printer and apprentice full pay for any period prior
to July 15th during which the journeym an printer or
apprentice is not em ployed.
The com pany further agrees to pay each journeym an
printer or apprentice one-half pay for any period after
July 15th to Decem ber 3 1 ,-------during which the journey
man printer or apprentice is not em ployed.
It is further understood and agreed that any member
of the association who treports for work or who works at
any time during any three days of any calendar week, shall
be paid wages for the full calendar week, regardless of
whether or not said journeym an printer or apprentice
works the full forty hours. Any journeym an printer or
apprentice who works or reports for work on less than three
days, shall be paid a full day’s pay for the day h$ works
or reports for work and half pay for the days that he
does not work.
It is further understood and agreed that during the
period beginning with the date o f July 15th and ending
D ecem ber 31st, -------, the com pany will spread the work
among the members of the association to the end that,
insofar as practical, em ploym ent will be shared equally
by the members of the association.
It is further understood and agreed that during the
period covered by this agreement the com pany will
alternate the men weekly between the day and the night
shifts.
I f hostilities should terminate prior to July 1 5 ,-------, or
if orders or directives of the Government, issued prior
thereto, confront the industry with a curtailment of
business which reduces operations, the parties, on fifteen
days’ notice, b y either to the other, shall negotiate with
respect to the advisability of maintaining or m odifying
the full work guarantee contained in this Section 3.
102. T ex tile dy ein g an d finishing— T W U (C IO )
21. The firm does hereby guarantee 48 weeks o f work
in each year for truck drivers and helpers but this guarantee
shall be nevertheless subject to the following conditions:
(a) In the event of an unusual slack period or in a period
o f emergency where production materially decreases the
firm shall have the right to lay off drivers notwithstanding
the guarantee above-m entioned.
Truck drivers and helpers can be em ployed for a period
of 50 hours in any one given week. Any excess o f 42%
hours in one week (M onday to Friday, inclusive) or 8%
86
GUARANTEED WAGE PLANS IN THE UNITED STATES
hours in one day shall be paid for at the rate of time and
one-half.
103. W a ter transportation— M E (C IO )
A r t ic l e V : Season of Employment.
The season of
em ploym ent for officers, boiler-room engineers, junior
engineers, and handym en shall be for ten (10) calendar
months, 306 days.
The season of em ploym ent for all officers to start as
directed b y the management and to be continuous, and to
be com pleted within the calendar year.
If officers, boiler-room engineers, junior engineers, or
handym en who are qualified, serve in a tem porary capacity
higher than appointed for, they will be paid the higher
rate during such service, and if they serve in a lower capac
ity, they will be paid the rate applicable to the capacity
appointed for.
The com pany reserves the right to transfer any officer
from one vessel to another with the understanding that
the wage scale for the individual is protected.
In the event that additional passenger or freight steamers
are purchased or chartered b y the ------- Company, after
the start of the navigation season, it is understood that
the season of em ploym ent for officers on such vessels shall
comm ence when the steamer or steamers are placed in
service and continue until the vessel is laid up or returned
to the owner. This provision shall not apply should
charter provisions require that officers then aboard said
vessel continue in the service of the ship for the balance of
the year during which the charter or purchase is effected,
other than they be mem bers of the association. In the
event this paragraph shall apply, then it is understood
that the rates of pay will not be less than provided for in
Article IV hereof.
I f the service of one or more vessels is discontinued at
any time during the life of this agreement for one or more
of the following reasons:
1. Marine disaster, total or constructive total loss, or
marine disaster less than total or constructive total loss
which nevertheless requires,,the vessel or vessels to be
laid up for a considerable period on account of failure to
get repair materials due to war priorities, or failure to
get the ship into a repair yard b y reason of war conditions
beyond control of the com pany;
2. Condemnation b y Bureau of Marine Inspection and
N avigation;
3. Sale of vessel, commandeering or taking over b y
Governm ental au thority;
The com pany may discontinue the service of any or all
of the officers covered b y this agreement after a period of
seven (7) days after the discontinuation of such service, as
specified, and for reasons as provided above.
2. P l a n s W it h o u t E l ig i b i l i t y
W it h o u t P r o v is io n f o r M
g a t io n of P l a n
R e q u ir e m e n t
o d if ic a t io n
or
an d
A bro
104. T ex tile dy ein g an d finishing— M P (In d.)
18. (a) The com pany agrees to pay each journeyman
printer and apprentice full pay (40 hours’ straight-time
pay) for any period prior to July 15th during which the
journeym an printer or apprentice is not em ployed. The
com pany further agrees to pay each journeym an printer
or apprentice one-half pay (20 hours’ straight-time pay)
for any period after July 15 to Decem ber 3 1 ,-------during
which the journeym an printer or apprentice is not em
ployed.
105. T ex tile d y ein g and fin ish in g— M P (In d.)
The com pany agrees that so long as it operates on a
“ staggered shift” so-called, it will pay each printer or
apprentice one-half pay for any 23 weeks during which,
at any time throughout the terms o f this contract, each
printer or apprentice is not em ployed. If the com pany
is operating on a basis other than a “ staggered shift”
so-called, it will pay each printer or apprentice one-half
pay for any 20 weeks during which at any tim e through
out the terms of the contract such printer or apprentice
is not em ployed. The foregoing provision shall not apply,
however, to a printer who is hired tem porarily to replace a
regular printer who is absent b y reason of illness or who is
on vacation.
106. T ex tile d y ein g an d fin ish in g— F S E S (In d.)
During period of unem ploym ent members o f the so
ciety em ployed b y em ployer shall be compensated at the
rate of one-half their basic w eekly wages for a period of
12 weeks during the term of this agreement.
107. W o m e n ’ s coa t m a n u factu rin g— IL G (AFL)
F ir s t . The em ployer hereby agrees, covenants, and
guarantees that it will give to each of the persons now in
its em ploy in the cutting, operating, finishing, and press
ing departments and to each of the persons now in its
em ploy as basters and buttonhole makers, fifty full weeks
of em ploym ent during the term begin n in g-------and term i
nating -------. The names o f the said em ployees are con
tained on the list annexed hereto, made a part hereof, and
marked schedule A.
Each of the workers on the annexed schedule agrees to
work for the em ployer for the term of this agreement and
in accordance with the terms thereof.
108. S ilverw are m a n u factu rin g— E R M W (C IO )
E ig h t h . The em ployer guarantees that he shall em ploy
the em ployees named in the schedule herewith attached
and made part of this contract, for a period of forty-five
(45) full weeks during the year o f ------- , and that the re
maining six (6) weeks he will em ploy them on a part-tim e
basis (three (3) days a ^ eek ), and that one week, namely,
between Christmas and New Y ear’s, he shall have the
right to close the factory for the purpose of taking inven
tory. All weeks that have been worked prior to the
signing of this agreement during this year shall be de
ducted from the guarantee of forty-five (45) weeks, and
all part-tim e workweeks that have been worked this year
shall be deducted from the six (6) part-tim e weeks. All
other employees who are not listed in the attached schedule,
or those in the wrapping and assembling departm ents who
have or will join the union at the expiration of the old
agreement, shall not be covered by said guarantee. Any
em ployee who is listed on the attached schedule but who is
discharged for cause, shall be autom atically rem oved from
APPENDIX B.---- CLAUSES IN GUARANTEE PLANS AND CONTRACTS
the operation of said guarantee. A ny holiday listed in
paragraph six which comes out during a working week, and
in the event that the employees do not work on that day,
that week shall nevertheless constitute a full working week
for the purpose o f defining a full week in the above men
tioned guarantee.
109. R eta il w o m e n ’ s a cce s s o rie s — F W (C IO )
* * * the union agrees to accept the same under
standing that prevailed during t h e -------contract year—
that is, a guarantee of forty-tw o (42) weeks of work for the
fou r (4) finishers and tw o (2) operator-nailers who are
em ployed at present in the fur department.
87
114. W in d o w an d d oor fra m e m a nu factu ring— N o u n ion
In the event o f slack periods, the com pany will advance
to its employees certain sums to be repaid with work when
production increases.
The plan is only effective in the case o f short hours
caused by reduced production.
For the purposes o f the plan, em ployees are divided into
three different classes, as follows:
(1) Single men with no dependents.
(2) Single men or married men with one dependent.
(3) Single men or married men with more than one
dependent.
F o u r t h , (a) Wages of salaried checkers under this agree
ment shall be agreed upon between the com pany and said
salaried checkers, but not less than tw o hundred and five
dollars and tw enty cents ($205.20) per month. Six (6)
salaried checkers shall be given one (1) day per week off
and a guarantee of nine (9) m onths’ pay.
If, during any pay period (one-half m onth), the incom e
o f those in class 1 is not equivalent to 40 hours at the em
ployee’s rate, he can draw the difference between 40 hours’
incom e and his actual earnings from our com pany. Those
in class 2 are entitled to 50 hours and those in class 3 to
60 hours.
Incom e is (a) wage drawn from our com pany, plus (b)
pay for any other em ploym ent, plus (c) unem ploym ent
insurance benefits.
111. W a te r transportation— M E (C IO )
115. C h em ica l an d fertilizer m anu factu ring— C W (AFL)
110. W a ter transportation— IL A (AFL)
R u l e 2. (a) The season of em ploym ent for chief engi
neers will be nine (9) m onths; the season of em ploym ent
for first assistant engineers will be nine (9) months; and
the season of em ploym ent for second assistant engineers
will be seven (7) months. The season of employm ent, to
start as directed b y the management, is to be continuous
and is to be com pleted within the calendar year.
112. W a ter transportation— M M P (AFL)
A r t ic l e V. The season of em ploym ent for pursers in
the ------- Division shall be for six (6) calendar months.
The season o f em ploym ent for pursers in t h e -------Division
shall be for eight (8) calendar months. The season of
em ploym ent for the purser o f t h e ------- shall be for three (3)
calendar months.
The season of em ploym ent for assistant pursers on the
------- Division shall be four (4) months. The season of
em ploym ent for assistant pursers on t h e -------Division
shall be four (4) months.
113. W a ter transportation— M M P (A FL)
A r t ic l e V . The season of em ploym ent for all masters
shall be eight (8) calendar months.
The season of em ploym ent for all first, second, and third
officers shall be eight (8) months.
V. Wage-Advance Plans
In wage-advance plans the em ployer usually obligates
himself to provide advances to loans o f wages during
slack seasons, with repayment required o f the worker only
if the em ployer thereafter furnishes sufficient em ploym ent
to enable the advance to be repaid. The plans provide
specific methods for repayment or working off the amount
o f the indebtedness.
V.
W henever an eligible em ployee’s weekly wage from
the com pany falls below 30 hours’ pay at his current classi
fied rate, due to lack o f work, the com pany will advance
to the eligible em ployee, upon his written request on a
form provided b y the com pany, the difference between his
actual gross earnings and the 30 hours’ pay, less earnings
from other em ploym ent and less any unem ploym ent com
pensation which the em ployee has received or to which he
may be entitled.
116. A u tom ob ile m anu factu ring— U A W (C IO )
Income Security Plan: 1. D escription of Plan.
A
credit will be established for each eligible em ployee equiv
alent to three hundred and sixty (360) hours’ pay at his
latest earned hourly rate, less any advances paid to the
em ployee under the 1939 and 1940 em ployee benefit plans,
and not repaid or earned out. If, in any week while this
plan is in operation, an eligible em ployee’s earnings from the
corporation and/or other regular em ploym ent are less
than 60 percent o f his standard weekly earnings, as here
inafter defined, the corporation will advance at the option
of the em ployee, the difference between his actual earnings
from the corporation and/or other regular em ploym ent
and 60 percent o f his standard weekly earnings, until he
has exhausted the credit established in his behalf, less
any unem ploym ent compensation to which the em ployee
m ay be entitled for that week.
Lay-off Benefit Plan: 2. Description o f Plan. A credit
will be established for each eligible em ployee equiv
alent to 72 hours’ pay at his latest earned hourly rate
less any advances paid to the em ployee under the 1939
and 1940 em ployee benefit plans, and not repaid or earned
out. If, in any week while this plan is in operation,
an eligible em ployee’s weekly earnings from the corporation
and/or other regular em ploym ent are less than 40 percent
o f his standard weekly earnings, the corporation will
GUARANTEED WAGE PLANS IN THE UNITED STATES
88
advance to such em ployee, at the option of the employee,
the difference between his actual earnings from the corpo
ration and/or other regular em ploym ent and 40 percent
o f his standard weekly earnings, until he has exhausted
the credit established in his behalf, less the am ount of
unem ploym ent com pensation to which the em ployee m ay
be entitled for that week.
117.
some union-management agreements have recently incor
porated one or more of the follow ing provisions: (1)
Recognizing the im portance and desirability of stabilizing
em ploym ent, (2) recognizing the value to be derived from
a guarantee plan, (3) that it is the intention of the com
pany to inaugurate a plan at some designated date, or (4)
that the com pany or that both the com pany and the union
agree to study the feasibility o f its adoption.
M a il ord e r h o u s e an d retail stores— N o u nion
Constant Wage Income Plan: 11. If an em ployee works
less than 40 hours in any workweek, che com pany will
advance the difference between his incom e for the hours
actually worked and 40 hours’ pay. When an em ployee
works more than 40 hours, excess is used to cover his
deficit. Please refer to attached plan.
The above plan applied to both retail and mail order
establishments. T he plan in retail stores was termi
nated ------- .
The plan is still in effect in all [8 cities] mail order
houses e x c e p t------- where none is needed.
VI. Declaration of Intention to Inaugurate a
Guarantee
While n ot making a specific com m itm ent to furnish work
or income, if work is n ot available for any definite period,
118. M e a t packing— U P W (C IO )
[Company] recognizes the im portance and desirability
of stabilizing em ploym ent on an annual basis, and to
that end [the com pany] will * * * attem pt to give
em ployees 52 weeks’ work per year.
119. S te e l m ill— U S W (C IO )
The com pany and the union agree as to the mutual
benefits to be derived from a practical annual wage plan
and both parties m utually recognize the uncertainties
which must be eliminated before a practical annual wage
plan can be perfected and installed. Therefore, both
parties agree to undertake studies concerned with the
possible ultimate establishment of some form of guaranteed
annual wage plan.
Index to Appendix B
C la u se
ser ia l N o .
In d u s tr y
Autom obile m anufacturing.__________
Automobiles, retail____________________
Brewery_______________________________
Casket m anufacturing________________
Cem ent m anufacturing________________
C em etery______________________________
Cereal preparations___________________
Chemical and fertilizer manufacturing.
Chewing gum m anufacturing_________
Cleaning and dyein g__________________
Clothing, retail____________ ____________
Confectionery, retail__________________
D airy fa rm ____________________________
Dental supplies, retail_________________
Departm ent store_____________________
D istillery______________________________
Drugs, retail__________________________
D ry goods, retail______________________
D ry goods, wholesale__________________
E lectroplating_________________________
Flour m ill____________________ _________
F ood canning and preserving_________
Food, retail and wholesale____________
Fur designing and patternm aking_____
Furs, retail____________________________
Furs, wholesale________________________
Groceries, wholesale___________________
Hardware, wholesale__________________
Ice and coal, retail____________________
Jewelry m anufacturing________________
K nitting machinery production_______
K nitting m ill__________________________
Limited price variety store_______ ____
Liquor, retail__________________________
Lumber, retail_________________________
Mail order house______________________
M ail order house and retail stores____
M eat packing_________________________
M en’s clothing, retail_________________
News syn dicate_______________________
Newspaper publishing________________
Paint and varnish m anufacturing_____
Painting and decorating______________
Paper m anufacturing_________________
Public u tility__________________________
Radio broadcasting___________________
Radios, retail__________________________
Railroad repair and m aintenance_____
R efrigerator car servicing_____________
Restaurant____________________________
R ubber goods m anufacturing_________
Sausage casing m anufacturing________
Shipyard______________________________
__
23,
__
__
31,
__
116
71
47
48
70
42, 99
4 4 ,4 5
115
46
72, 92
30
10,38
32
90
11
15
30
__ 20, 39
65, 66, 74
82
___________ 1 ,2 ,2 5 ,7 9
________________
53
________________
19
________________
62
______ 41, 58, 59, 61, 87
________________ 9, 28
________________
27
________________ 8, 37
________________
89
________________
26
________________
52
________________
73
__________________ 56,96
________________
88
________________
30
________________
12
________________
117
____________ 34, 35, 118
21, 29, 40, 60, 75, 84, 85
________________
93
________________
68
________________
17
________________
33
________________ 16,50
_________ 1 3 ,2 4 ,6 7 ,7 8
________________
95
________________
30
________________
76
________________
77
________________
98
________________
54
________________
43
________________
55
89
90
GUARANTEED WAGE PLANS IN THE UNITED STATES
In d u s tr y
Shoe m anufacturing____________________
Shoes, retail____________________________
Silverware m anufacturing______________
Soap m anufacturing____________________
Social service agency___________________
Steel m ill_______________________________
Syrup distribution, wholesale__________
Textile dyeing and finishing____________
Textile m ill_____________________________
Textiles, w h olesale_____________________
T ool and casting m anufacturing_______
T ool and wire m anufacturing__________
Washing machine production__________
W ater transportation___________________
W indow and door frame manufacturing
W om en’s accessories, retail____________
W om en’s coat m anufacturing__________
W om en’s clothing m anufacturing______
W om en’s clothing, retail________________
C la u se
se r ia l N o .
__________________________________ 69
22, 86
___________________________________________________
___________________________
108
___________________________ 5, 81
__________________________________ 14
_________________________ 18, 119
__________________________________ 83
3, 4, 36, 80, 101, 102, 104, 105, 106
__________________________________ 63
__________________________________ 64
___________________________
6
__________________________________ 51
_____________________________________7
91, 94, 100, 103, 110, 111, 112, 113
__________________________________ 114
___________________________________ 109
.1________________________
107
___________________________________ 49
_____________________________ 57,97
U. S. GOVERNMENT PRINTING OFFICE: 1948
@FedFRASER