COMMITTEE REPORTS 1. HOUSE REPORT No. 871, 89TH CONG., 1ST SESS., To ACCOMPANY AUGUST 25, 1965.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. POWELL, from the Committee on Education and Labor, submitted the following REPORT [To accompany H.R. 10518] The Committee on Education and Labor, to whom was referred the bill (H.R. 10518) to amend the Fair Labor Standards Act of 1938 to extend its protection to additional employees, to raise the minimum wage, and for other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. INTRODUCTORY STATEMENT The Fair Labor Standards Act of 1938 was enacted on June 25, 1938. It is a forerunner to today's war on poverty. The basic policy of that Act is contained in its second section: FINDING AND DECLARATION OF REPOLICY SEC. 2. (a) The Congress hereby finds that the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers (1) causes commerce and the channels and instrumentalities of commerce to be used to spread and perpetuate such labor conditions among the workers of the several States; (2) burdens commerce and the free flow of goods in commerce; (3) constitutes an unfair method of competition in commerce; (4) leads to labor disputes burdening and obstructing com 1 The place where a new page in the particular report begins is indicated by the insertion of the page number, in brackets, at the appropriate place in the text. merce and the free flow of goods in commerce; and (5) commerce. [2](b) It is hereby declared to be the policy of this Act, through the exercise by Congress of its power to regulate commerce among the several States and with foreign nations, to correct and as rapidly as practicable to eliminate the conditions above referred to in such industries without substantially curtailing employment or earning power. The bill seeks to implement the policy of the Act by (1) extending the benefits and protection of the Act to an estimated 7,929,000 workers engaged in commerce or in the production of goods for commerce, or employed in enterprises engaged in commerce or in the production of goods for commerce, and (2) providing an increase in the minimum wage. The bill provides that the minimum wage for those employees presently covered by the Act will be $1.40 an hour beginning July 1, 1966, $1.60 an hour beginning July 1, 1967, and $1.75 an hour thereafter. The proposed minimum wage for newly covered workers (other than those employed in agriculture) will be $1 an hour beginning January 1, 1966, $1.15 an hour beginning July 1, 1966, $1.25 an hour beginning July 1, 1967, $1.40 an hour beginning July 1, 1968, $1.60 an hour beginning July 1, 1969, and $1.75 an hour beginning July 1, 1970. For newly covered agricultural workers the bill provides a minimum wage that will be $1.15 an hour beginning July 1, 1966, and $1.25 an hour beginning July 1, 1968. Thus, the proposed new wage levels will be reached gradually, within 3 years from now for those presently covered by the Act, 5 years for those who will be newly covered by the Act, and 3 years for newly covered agricultural workers. The wage increases provided by the bill were geared to considerations of correcting and as rapidly as practicable eliminating labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers without substantially curtailing employment or earning power. It is firmly believed that these gradual increases, approximately equivalent to productivity increases in recent years, can be absorbed by the national economy as easily as all previous increases in the minimum wage. TABLE 1.-PROPOSED EXTENSION OF MINIMUM WAGE AND OVERTIME PROTECTION Minimum wage protection will be extended to employees in the following: Overtime protection will be extended to employees in the following: Retailing, including auto, truck, and farm implement dealerships. Retailing, including automobile, truck, and farm im plement dealerships (excluding salesmen and mechanics). Construction. Laundering and drycleaning. Restaurants and food service establishments. Construction. Laundering and drycleaning. Transit systems. Transit systems (excluding operating employees). TABLE 3.-PROPOSED OVERTIME PROTECTION FOR NEWLY COVERED EMPLOYEES A newly covered employee must receive compensation at a rate not less than 11⁄2 times the regular rate at which he is employed for hours of employment in excess of 44 hours in any workweek...... Effective date 42 hours in any workweek. 40 hours in any workweek. The General Subcommittee on Labor began public hearings on the Fair Labor Standards Amendments of 1965 on May 25, 1965. Hearings were concluded on July 21, 1965, after 25 days of hearings during which testimony was received from 97 witnesses, including the Honorable W. Willard Wirtz, Secretary of Labor, and other witnesses from government, labor, industry, and other interested groups. In addition, more than 100 statements were submitted for the official hearing record. In its executive sessions, the subcommittee also considered the testimony received from 78 witnesses during approximately 5 months of hearings held in 1963 and 1964 on proposed amendments to the Act. On August 4, 1965, the subcommittee concluded 6 days of consideration in executive session and reported the bill to the full committee. HISTORY OF THE ACT On June 25, 1938, one of the Nation's basic labor laws was enactedthe Fair Labor Standards Act of 1938. The first statutory minimum wage was established at 25 cents an hour for the year beginning October 24, 1938. It was made applicable to all employees, not specifically exempted, who were engaged in commerce or in the production of goods for commerce. The original Act provided that the statutory minimum wage would be raised to 30 cents an hour beginning October 24, 1939. A procedure was established for raising the minumum wage by stages to a level of 40 cents an hour, industry by industry, as rapidly as possible; but, in any case, 40 cents an hour was to become the national mini [4] mum wage within 7 years after the effective date of the Act, that is, by October 24, 1945. During the interval, intermediate minimum wages were applied to different industries on recommendation of industry committees. The last order of the Wage and Hour Administrator raising the minimum wage to 40 cents an hour was issued in July 1944, 1 year before the date set by the Act for the 40 cents an hour minimum wage rate to become applicable. The Act also established an overtime rate (equal to 11⁄2 times the employee's regular hourly rate) which was to be paid employees for employment in excess of certain maximum hours in a workweek. Thus, during the first year of the Act, that is, from October 24, 1938, to October 23, 1939, a maximum hours standard of 44 hours a week was applied to covered employees; during the second year, 42 hours became the standard; and after 2 years, the standard was reduced to 40 hours a week. The time and one-half penalty overtime rate has never been altered, although amendments were passed in subsequent years increasing the statutory minimum wage and extending coverage to unprotected workers. The Fair Labor Standards Amendments of 1949 increased the minimum hourly wage rate from 40 cents to 75 cents (to take effect January 25, 1950), which represents an 872-percent raise. And the Fair Labor Standards Amendments of 1955 provided another increase in the minimum hourly wage rate which brought that wage rate to $1 an hour effective March 1, 1956, representing a 33%-percent increase. The Fair Labor Standards Amendments of 1961 raised the minimum hourly wage rate by 25 percent to $1.25, effective on September 3, 1963. An intermediate increase to $1.15 an hour was provided effective September 3, 1961. Employees covered by the Act for the first time because of the changes made in the Act by the 1961 amendments, which revised the exemptions and extended the Act's coverage, received a minimum wage of not less than $1 an hour beginning September 3, 1961; $1.15 an hour beginning September 3, 1964; and, $1.25 an hour beginning September 3, 1965. Employees brought within the coverage of the Act by the 1961 amendments received overtime protection beginning September 3, 1963, for hours worked in excess of 44 in any workweek. Effective September 3, 1964, the overtime protection of the Act was extended to such employees for hours worked in excess of 42 in any workweek, and effective September 3, 1965, for hours worked in excess of 40 in any workweek. Prior to the 1961 amendments, coverage under the Act was limited to individual employees who were themselves engaged in commerce or in the production of goods for commerce. The 1961 amendments enlarged the scope of the Act by adding another basis of coverageemployment in an "enterprise engaged in commerce or in the production of goods for commerce". Thus coverage under the Act extends to each and every employee of such an enterprise, unless specifically exempted. With reference to the objectives of the Act, the Supreme Court, speaking through Mr. Justice Burton, has observed: In this Act, the primary purpose of Congress was not to power. The Act declared its purposes in bold and sweeping terms. Breadth of coverage was vital to its mission. Its scope was stated in terms of substantial universality. *** (Powell v. United States Cartridge Co., 339 U.S. 497 at 509-510, 516 (1950)). In contrast with the broad objectives of the Act, its present coverage is much more confined in scope. The Act was a response to a call upon a Nation's conscience, at a time when the challenge to our democracy was the tens of millions of citizens who were denied the greater part of what the very lowest standards of the day called the necessities of life; when millions of families in the midst of a great depression were trying to live on incomes so meager that the pall of family disaster hung over them day by day; when millions were denied education, recreation, and the opportunity to better their lot and the lot of their children; when millions lacked the means to buy the products of farm and factory and by their poverty denied work and productiveness to many other millions; and, when one-third of a Nation was ill-housed, ill-clad, and ill-nourished. On May 24, 1937, in a message to the Congress, President Franklin D. Roosevelt, stated that Our Nation so richly endowed with natural resources and with a capable and industrious population should be able to devise ways and means of insuring to all our able-bodied working men and women a fair day's pay for a fair day's work. A self-supporting and self-respecting democracy can plead no justification for the existence of child labor, no economic reason for chiseling workers' wages or stretching workers' hours. Enlightened business is learning that competition ought not to cause bad social consequences which inevitably react upon the profits of business itself. All but the hopelessly reactionary will agree that to conserve our primary resources of manpower, government must have some control over maximum hours, minimum wages, the evil of child labor, and the exploitation of unorganized labor. And so to protect the fundamental interests of free labor and a free people we propose that only goods which have been produced under conditions which meet the minimum standards of free labor shall be admitted to interstate commerce. Goods produced under conditions which do not meet rudimentary standards of decency should be regarded as contraband and ought not to be allowed to pollute the channels of interstate trade. On October 26, 1949, upon the occasion of the signing of the Fair Labor Standards Amendments of 1949, President Harry S. Truman stated: This Act has proved to be wise and progressive remedial legislation for the welfare not only of our wage earners but of our whole economy. [6] On April 21, 1960, while appearing before the Subcommittee on Labor Standards of the Committee on Education and Labor, House of |