Statement of the National Canners Association to the Senate Labor and Public Welfare Committee on S. 1861 June 5, 1973 This statement is submitted on behalf of the National Canners Association in opposition to those provisions of S. 1861 that would repeal the overtime exemptions applicable to the canning of fruits, vegetables and seafood found in Sections 7(c), 7(d) and 13(b)(4) of the Fair Labor Standards Act of 1938, as amended. The National Canners Association is a nonprofit trade association with 508 members canning in 41 States and the Territories. Members of the Association, including both independent and cooperative canning enterprises, pack 85 to 90 percent of the entire national production of canned fruits, vegetables, specialties and fish. As this Subcommittee well knows, ever since enactment of the Fair Labor Standards Act in 1938, Congress has recognized the dependence of the canning industry upon natural, seasonal factors that make wholly inequitable and inappropriate the payment of penalty overtime by canners and that justify the canning exemptions. These exemptions are now contained in: Section 7(c), which provides a 10-week overtime exemption Section 7(d), which provides a second 10-week overtime - 2 The Bill now before this Subcommittee proposes, among other things, to repeal these exemptions. The effect of these amendments would be to add to the cost of packing canned fruits and vegetables, and to threaten the economic life of many small and medium-sized canners in an industry that has for many years been characterized by vigorous competition among a large number of companies throughout the country. We have no evidence to indicate that the conditions on which the exemptions were based have changed, or that would support the application of penalty for overtime work above that now provided to an industry that cannot control working hours during the packing season, and must rely upon whatever labor is available in areas typically short of manpower at the time of need. On the contrary, we have evidence from a very recent survey of our members which verifies that the present overtime exemp tions are still needed and used. During the past three months we have received responses from 189 individual canners representing 37 percent of those members to which the overtime exemption applies. Sixty-eight percent of the replies were received from canners processing vegetables, twenty-two percent from canners of fruit products, and 10% from canners processing fish. Eightyone percent of those fruit and vegetable canners responding stated that they operated their plants over ten hours per day during the packing season and seventy-six percent of those operating over ten hours per day were using more than one shift. Eighty-nine percent reported that they pay overtime in the course of their packing operations. Of those fruit and vegetable canners responding to our questionnaire, 91 percent stated that they needed the overtime exemptions. All fish canners stated a similar use and need. In the 1972 packing season, 41 percent of the fruit and vegetable canners replying to our survey reported that they used the full 20 weeks of exemption from penalty overtime. Thirty percent of those responding stated that they used between eleven and twenty weeks of their allowed exemption. Only 28 percent used ten or less of the exemptioned weeks allowed. We wish to emphasize that those who utilize the exemption from overtime penalties are canners mainly in the rural areas where the labor supply is limited. The Theory of Penalty Overtime The legislative history of the Fair Labor Standards Act of 1938 makes it clear that the 40-hour workweek was written into the Act in order to spread employment and to establish a year-round regular workweek for as many workers as possible. These purposes were to be achieved by the imposition of time and a half penalty overtime upon employers who employed workers in excess of the 40-hour limit. This theory of spreading work among laborers and throughout the year by requiring the payment of penalty overtime is necessarily founded on two basic assumptions: (1) Employers can control working hours and spread and (2) Labor capable of doing the work is in adequate supply, It was immediately recognized by Congress in 1938 that neither of these assumptions was valid with respect to industries processing perishable agricultural commodities. The canning exemptions were thus enacted in order to prevent the inequitable imposition of the time-and-a-half penalty when the basic purpose of the overtime requirement could not be achieved. The justification of the canning overtime exemptions was very well stated by Mr. Metcalf Walling, the then Administrator of the Wage Hour Division, when he testified before a Senate Committee in 1945 in response to a proposal that the overtime exemptions be removed or modified. He noted that in some industries "... the need for overtime work is apparent. The industries In 1948 Wage Hour Administrator McCombe testified before a Congressional committee that all the industries which process and handle agricultural and fish products have a basic similarity. Their primary problem under the Act concerns the overtime provisions, since they are affected by seasonal peaks of activity which, to a considerable degree, are not controllable since they The Continuing Need for the There can be no legitimate doubt as to the continuing presence of those factors that gave rise to the canning industry overtime exemptions. The Department of Labor Study of the Agricultural Handling and Processing Industries (1970) reaffirms that fruit and vegetable processing is inherently seasonal in nature, and that most of the seasonal pack is accounted for by highly perishable commodities. For example, on page 123 it is stated that: "The growing of fresh fruits and vegetables is essentially And after commenting on the use of certain techniques for post-harvest control of perishability for a few crops, it adds, "On some perishable commodities such as peas, corn, green beans, etc., little or no post harvest control of perishability is exercised since such products must be processed in a matter of a few hours." The Study does not mention the overwhelmingly significant fact that these three named commodities, together with tomatoes which must be processed within hours after harvest are the four basic canning vegetable crops that account for almost three-fourths of the production of seasonal vegetables. - The Study suggests that some means are available by which processors may control fresh product delivery and extend their processing season, including cold storage after harvesting and before processing, ́and bulk processing or freezing immediately after harvest for reprocessing at a later date. Although the Study acknowledges that cold storage and bulk processing may be appropriate for only a few commodities, it nevertheless recommends reexamination of the canning overtime exemptions, in part because "the processing period has been lengthened as a result of technological advances in methods of extending the storage life of perishable products through temporary treatment such as fast freezing, cold storage, waxing and the use of chemicals. " (P. 12) The fact is that the major canning commodities must be canned within hours of harvest, and that any attempt to hold these crops by bulk freezing or cold storage results in waste, as well as loss of quality, texture, flavor and nutrients. The added processing costs would necessarily result in substantially higher prices and lower quality products. But even for the few crops for which bulk freezing or processing is feasible, the initial processing must be carried out immediately after harvest, and the need for the overtime exemptions still remains. Subsequent reprocessing has never been covered by the overtime exemptions nor is such an exemption desired. mechanical harvesting - The Labor Department Study acknowledges that the advent of made necessary because of the extreme shortage of seasonal labor in canning areas has increased rather than lessened the need for prompt processing of raw products. "Mechanized harvesting of fresh fruits and vegetables shortens the harvest season and tends to intensify raw product delivery to processors during peak periods." (P. 125) And in page 126: "Crops which are mechanically harvested often require more The seasonality of canning activity is vividly reflected in data on man-hour use in canning. The 20 weeks of most active canning activity accounted for 67 percent of the annual man-hour use (P. 132). Moreover, in the twentieth week of the peak canning season, the average workweek was still 48 hours. The seasonality of canning crop production is also graphically portrayed in an appended chart of Canning Seasons by State and Commodity. |