The minimum wage should insure a minimum standard of living for each wage and salary worker in the country. Since the minimum wage is a minimum and not an average wage, it would be inappropriate for it to reflect differences in skill or productivity. Ultimately the committee believes that the minimum wage for farmworkers should be equal to that for workers in other industries.

The bill amends section 13(a) (6) of the Act so as to extend minimum wage protection to 1.3 million agricultural workers. Agricultural workers will remain exempt from the overtime provisions of the law. The minimum wage for covered agricultural workers will be $1.15 an hour beginning July 1, 1966, and $1.25 an hour beginning July 1, 1968. Room, board, and other facilities customarily furnished employees by employers are "wages" according to their fair value or cost.

All temporary or seasonal agricultural workers will receive minimum wage protection. Temporary and seasonal agricultural workers are defined to include those workers employed for 12 consecutive work weeks or less in the calendar year by the same employer. It is anticipated that this will result in coverage of all itinerant and migratory laborers the most exploited and deprived class of laborers in the United States. In addition, permanent (nonseasonal or nontemporary) agricultural laborers, that is, those employed by the same employer for more than 12 consecutive weeks in the calendar year, will be extended minimum wage protection if they are employed by an employer who used more than 300 man-days of agricultural labor (excluding labor performed by seasonal or temporary labor) in any one of the four preceding calendar quarters. This is intended to provide protection to the employees of large agri-business enterprises. Three hundred man-days is approximately the equivalent of four employees full time in a calendar quarter. Therefore, it would generally require that a farm have five or more full-time employees, a considerable enterprise in farming, before the employees receive minimum wage protection. The parent, spouse, child, or other member of an agricultural employer's immediate family are not employees as that term is defined in the Act.

Most agricultural employers will be required to pay the minimum wage for very limited periods during the year. A very few agricultural employers, less than 1 percent, will be required to compensate their employees at not less than the statutory minimum throughout the year. No agricultural employer will be required to compensate his employees at the statutory overtime rate.

It is intended that the minimum wage provisions of the Act be extended to certain sharecroppers and tenant farmers. The test of coverage for these persons will be the same test that is applied to [27] determine whether any other person is an employee or not. Employer, employee, and employ, are all defined terms in the Act. Coverage is intended in the case of certain so-called sharecroppers or tenants whose work activities are closely guided by the landowner or his agent. These individuals, called sharecroppers and tenants, are employees by another name. Their work is closely directed, discretion is nonexistent. True independent-contractor sharecroppers or tenant farmers will not be covered; they are not employees. The test will be the common one of agency law used to determine if a person is an independent contractor or is an employee.

The Supreme Court (in Rutherford Food Corp. v. McComb, 331 U.S. 722 (1947)) has made it clear that there is no single rule or test for

determining whether an individual is an employee or an independent contractor, but that the "total situation controls." In general an employee, as distinguished from a person who is engaged in a business of his own, is one who "follows the usual path of an employee" and is dependent on the business which he serves. As an aid in assessing the total situation, the Court mentioned some of the characteristics of the two classifications which should be considered. Among those are:

(1) The extent to which the services rendered are an integral part of the principal's business;

(2) The permanency of the relationship;

(3) The opportunities for profit or loss;

(4) The initiative, judgment, or foresight exercised by the one who performs the services;

(5) The amount of investment; and

(6) The degree of control which the principal has in the situation.

The committee fully subscribes to these criteria.

Testimony indicates that there are large numbers of so-called sharecroppers who are not allowed to make a single economic decision regarding the land upon which they live and work. For example, they do not decide what to plant, when to plant, when to harvest, where to purchase seed, or where to sell the product of their labor. For these people, the term "sharecropping" only denotes a means of compensation; it conveys no connotation of independence, individualism, or self-determination. On the other hand, there are true tenant farmers, who make basic economic decisions upon which rest the productivity of the farm and consequently the amount of their compensation. Generally these tenants operate farms owned by absentee landlords. They are unsupervised, make day-to-day decisions necessary to the running of the farm, and share in the profits related to the productivity for which they are greatly responsible. Such persons are not intended to be covered by the Act.

Average hourly earnings in agriculture were 90 cents in 1964 in the United States. In some States the average falls below 60 cents an hour, and there are reports of wages of 30 cents an hour. Migrant agricultural workers had average annual earnings of only $868 in 1963, and this includes $211 earned during an average of 17 days of nonfarm work. In 1961, in households with three or more farm wage workers, the total year's farm and nonfarm earnings of these family members together averaged only $1,432. This is less than half of the $3,000 income level below which families are considered to be living in poverty. [28] The two top classes of farms (class I equals $40,000-plus and class II equals $20,000 to $39,999, total value of farm products sold commercially) include only 13 percent of all commercial farms, but they produce 51.9 percent of all commercial farm output. These two top classes of farms pay out more than 70 percent of the total annual farm wage bill. In fact, class I farms alone pay out more than half of the annual commercial farm wage bill. Very recent sample studies indicate that this concentration of agricultural production and hired labor on large farms has been increasing. Such cost increases, focused primarily upon the largest agri-business enterprises who tend to be the price leaders, would tend to create a more favorable competitive situation for family farm operators. The imputed wage for the family

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farm operator and his family would no longer be so drastically undermined by the tragic wages of workers on the largest farms.

There were 2.6 million households in the United States that contained at least one person who did farm work for wages in 1962. The total population of these households is 11.2 million persons. Forty percent of these households had an annual income of less than $2,000 and 56 percent of such households had annual income below $3,000. The policy of the Fair Labor Standards Act is to provide a wage which will enable a worker to maintain a decent standard of living. If prices were to rise equally or faster than the rise in wages, the real earnings of workers would remain stable or decline. If the price of farm products were to rise more than wages as a result of the coverage of farmworkers, the intent of the legislation would be negated. Thus, the committee looked at the relation of the cost of field labor to the price of farm products to the consumer. The conclusion is clear. Field labor is a very small percentage of costs to the consumer. The cost of bringing seasonal agricultural wages up to the level of about $1.25 an hour is approximately equal to 1 cent per unit for most vegetables and fruits per pound or per dozen or per head or whatever the ordinary unit may be. If retail prices go up more than that and if the increase is blamed on rising labor costs in the field, the American housewife should demand a complete and immediate congressional inquiry.

Puerto Rico and the Virgin Islands

As the minimum wage is increased for the mainland, the minimum wage orders for Puerto Rico and the Virgin Islands will be increased proportionately for those persons covered by the Act prior to the 1965 amendments. For example, where minimum wage orders for Puerto Rico provide for a minimum wage rate of 75 cents an hour, the rate will increase by 12 percent of this rate beginning 60 days after July 1, 1966, or 1 year after the effective date of the most recent applicable wage order, whichever is later. Effective 1 year after such date, the increase will be 16 percent of the rate applicable on July 1, 1966; and, effective 2 years after such date, 12 percent of the rate applicable on July 1, 1966. This would, in the example cited, require an increase of 9 cents the first year, 12 cents the second year, and 9 cents the third year, resulting in a wage rate of $1.05 after July 1, 1968.

The minimum wage rates for employees in Puerto Rico and the Virgin Islands who would be brought under the Act by the amendments made by the bill would be set by the Secretary of Labor upon the basis of recommendations of special industry committees appointed by the Secretary in accordance with the present provisions of sections [29] 5 and 8 of the Act. The goal of such committees is "to reach as rapidly as is economically feasible without substantially curtailing employment the objective of the minimum wage prescribed" for such employees by the Act. This provision follows the procedure adopted in 1961 for setting the minimum wage rates for employees in Puerto Rico and the Virgin Islands brought under the Act at that time. Maximum hours

The most significant aspect of the maximum hours provisions of the bill is that it maintains the rate of overtime compensation for hours worked in excess of the statutory maximum in any workweek at 11⁄2 times the regular rate of pay.

The rate of time and one-half the regular rate of pay is continued for presently covered workers for hours worked in excess of 40 in any workweek.

For newly covered employees, not exempt from the overtime provisions and including agricultural processing employees, there will be no overtime coverage until July 1, 1967. Beginning July 1, 1967, compensation for hours worked in excess of 44 in any workweek must be at 11⁄2 times the regular rate of pay. The maximum workweek will be 42 hours beginning July 1, 1968, and conform to the present 40-hour workweek beginning July 1, 1969.

Approximately 5,000,000 employees will be protected by the overtime provisions of the Act for the first time. Without question, thousands of new jobs will become available as the excessive hours worked by present employees are reduced. Because so many of these jobs require a minimum of skill, training, or education, the opportunities that will be created for the long-term unemployed will be one of the major contributions of this legislation.

Child labor

This bill amends the present exemption from the child labor provisions of the Act for agricultural employees working outside of school hours. The amendment provides for a child labor exemption for agricultural employees employed outside of the regular session public school hours in the school district where such child is living if such child is employed by his parent or is 12 years of age or over and commutes daily from his permanent residence and has the consent of his parent or if his parent is working on the same farm. Employment of any child under these conditions is lawful. If the conditions of the exemption are not met, the child labor prohibitions of the law apply as elsewhere, including those relating to employment in hazardous occupations. The definition of "oppressive child labor" has not been altered by this bill. The Act now provides that employment of a child under 16 years is prohibited, unless the child is employed by his parent (other than in manufacturing, mining, or other particularly hazardous employment), except that a child 14 or over may be employed in occupations (other than manufacturing, mining, or particularly hazardous occupations) that the Secretary of Labor determines will not interfere with the schooling, health, or well-being of the child. Employment of a child between 16 and 18 in an occupation determined to be particularly hazardous or detrimental to the health and wellbeing of a child between such ages is prohibited.

It is rather ironic, in view of agriculture's extensive employment of young children, that this industry is exceeded only by the extractive and construction industries in the rate of death from accidents.

[30] The language "outside of the school hours maintained by the public schools conducting a regular school program in the school district where such employee is living while he is so employed," is intended to exempt from the child labor provisions of the Act children meeting the conditions of this section, but not children who are released from school if other public schools in the school district are in session at such time. A situation was reported to the committee in which children of one race were released from school to work on farms while children of a different race were continuing their education. The bill requires that all regular session classes be closed to comply with

the "outside of school hours" requirement. This shall not, however, mean that summer school sessions will prevent the application of this exemption.

Students

A special provision allowing the payment of 85 percent of the applicable minimum wage to full-time students in retail or service establishments or engaged in agriculture is provided for in the bill. This will allow full-time students to work during school vacations at full-time jobs or at any time in part-time jobs at not less than 85 percent of the applicable minimum wage. These provisions apply only when they are necessary to prevent curtailment of employment opportunities for full-time students, but in no case may they apply where the Secretary finds that employment of full-time students at subminimum wages will create a substantial probability of reducing full-time employment opportunities of nonstudents. This provision applies to individual employees granted certificates by the Secretary. This provision limits the number of students who may be hired at subminimum wages in retail or service establishments to the proportion of such students employed in such establishments or similar establishments prior to the 1961 amendments.

Management trainees

A special overtime exemption is provided for bona fide management trainees in retail or service establishments. This provision is limited to 18 months per trainee. It shall not apply where the trainee is employed in excess of 48 hours in any workweek. Compensation for hours worked in excess of 40 in any workweek shall be at 1% the minimum wage rate applicable to such employee. No establishment with 50 or fewer employees may have more than 1 trainee and an establishment with more than 50 employees may have a number of trainees equal to 3 percent of the total number of employees in the establishment above 50, plus 1.

Study of excessive overtime

The initial proposals for changes in the overtime provisions of the Act considered by the committee would have required the payment of twice the regular rate of pay for hours worked in excess of 48 in any workweek. Also under initial consideration were proposals to reduce the statutory workweek. With regard to shorter workweek proposals, the President has requested the National Commission on Technology, Automation, and Economic Progress to include in its agenda full consideration of the matter of "work periods." With regard to the proposal relating to curtailment of excessive overtime work and the recommendation that the penalty overtime wage rate be increased from 12 times the regular rate of pay to twice such rate for excessive [31] hours, the committee instructed the Secretary of Labor to study excessive overtime and the extent to which such overtime work impedes the creation of new job opportunities, and to report his findings and recommendations to the Congress. The compilation of data assessing the effectiveness of the present penalty rate and the potential for creating new job opportunities through the enactment of a greater overtime rate will provide the committee with the information necessary to evaluate this significant proposal. Of particular interest to the committee are the answers to such questions as (1) what is