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the employer employed four regular employees (resulting in just 300 man-days of agricultural labor), the exemption would apply and the regular employees would not be covered by the minimum wage, but if he employed five regular employees instead of four during such days (resulting in more than 300-days of agricultural labor), his regular employees would be covered by the minimum wage.

Section 204. Agricultural processing employees

This section revises the exemptions relating to agricultural processing employees contained in section 13(a) and section 7 of the Act. The exemption in section 13(a)(21) for certain employees engaged in the processing of shade-grown tobacco for use as cigar wrappers is repealed.

The exemptions in section 13 (a) for the following employees have been repealed and placed as new overtime exemptions in section 13(b):

(1) Employees employed by a country elevator (old section 13(a)(17) and new section 13(b)(15)).

(2) Employees employed in the ginning of cotton (old section 13(a)(18) and new section 13(b)(16)).

(3) Employees engaged in the transportation of fruit and vegetables and/or the transportation of farmworkers (old section 13(a) (22) and new section 13(b)(17)).

There is in section 7(b)(3) of the Act a 14-week overtime exemption, limited to 12 hours a day and 56 hours a week, applicable to employees employed in seasonal industries. A revised version of this exemption has been established by section 201(c) of the bill as a new section 7(c). The new exemption will apply only to employees employed in a seasonal industry which is not engaged in agricultural processing, and it is limited to 10 hours a day and 48 hours a week.

The present overtime exemption in section 7(c) of the Act may be summarized as follows:

(1) There is a year-round unlimited exemption applicable to employees of employers engaged in

(A) First processing of milk, etc., into dairy products,

(B) Cotton compressing and ginning,

(C) Cottonseed processing, or

(D) The processing of certain farm products into sugar.

(2) There is a 14 week unlimited exemption applicable to employees of employers engaged in

(A) First processing, etc., of perishable or seasonal fresh fruits or vegetables,

(B) First processing within area of production of any agricultural commodity during a seasonal operation, or

(C) Handling or slaughtering of live stock and poultry.

The present exemption in section 13(a) (10) of the Act provides a complete year-round exemption from both the minimum wage and [37] overtime provisions of the Act for employees in the area of production and engaged in

(1) Handling, preparing, etc., of agricultural or horticultural commodities in their raw or natural state,

(2) Canning agricultural or horticultural commodities for market, or

(3) Making dairy products.

These exemptions are replaced by new exemptions contained in a new section 7(d). That section provides a 14-week overtime exemption, limited to 10 hours a day and 48 hours a week, for employees employed in an industry found by the Secretary (1) to be engaged in the handling, processing, etc., of highly perishable agricultural or horticultural commodities in their raw or natural state, and (2) to be either seasonal in nature or characterized by marked annually recurring seasonal peaks of operation at the places of first marketing or first processing of such commodities from farms. Highly perishable agricultural or horticultural commodities are those which in their raw or natural state are subject to especially rapid deterioration or spoilage unless some affirmative action is taken at once to preserve them from a major depreciation in value. "At once" means within 24 hours. A seasonal industry is one which stops its primary operations during those parts of the year when as a result of natural conditions the commodities handled in such industry are not available. On the other hand, an industry characterized by seasonal peaks of operation does not stop its primary operations during the year but rather maintains them at a constant level except during certain periods of the year when its operations are greatly expanded to take care of the seasonal influx of the commodities in their raw or natural state. The committee intends that no employer will be able to avail himself of more than one 14-week overtime exemption under the new sections 7(c) or 7(d) in any calendar year.

Section 205. Switchboard operators

The minimum wage and overtime exemption provided in section 13(a)(11) of the Act for switchboard operators employed by a company with no more than 750 stations is repealed by this section.

Section 206. Transportation companies

The minimum wage and overtime exemption provided in section 13(a) (9) of the Act for all employees of a local transit company not in a section 3(s) enterprise is repealed by subsection (a) of this section. However, in the amendment made by subsection (c) to section 13(b) (7) of the Act, which gave an overtime exemption to all employees of any local transit company, an overtime exemption is maintained for the operating employees of a local transit company which has an annual gross volume of sales of less than $1 million and whose rates and services are subject to State or local regulation.

Subsection (b) of this section narrows the application of the minimum wage and overtime exemption contained in section 13(a)(12) of the Act from all taxicab company employees to only the drivers. Section 207. Telegraph agency employees

The minimum wage and overtime exemption contained in section 13(a)(13) of the Act which is applicable to the employees of certain contract telegraph agencies is repealed by this section.

[38] Section 208. Logging crews

The minimum wage and overtime exemption contained in section 13(a) (15) of the Act which covers 12-man crews engaged in lumbering and forestry operations is repealed by this section.

Section 209. Automobile, aircraft, and farm implement sales establish

ments

The minimum wage and overtime exemption provided by section 13(a) (19) of the Act for the employees of a retail or service establishment primarily engaged in the selling of autos, trucks, and farm implements is repealed, but an overtime exemption is provided in a new section 13(b)(10) for the salesmen and mechanics employed in such establishments and for the salesmen, mechanics, and flight personnel of aircraft sales establishments. It is the intent of this exemption to exclude from the coverage of section 7 all mechanics and salesmen employed by an automobile, truck, farm implement. or aircraft dealership, even if they work in physically separate buildings or areas so long as they are employed in a department which is functionally operated as part of the dealership. The term "mechanic" is intended to include all employees doing mechanical work, such as get-ready mechanics, automotive, truck, farm implement, or aircraft mechanics, body or fender mechanics, used car reconditioning mechanics, and wrecker mechanics.

Section 210. Food service employees

The minimum wage and overtime exemption contained in section 13(a)(20) of the Act which covered food service employees is repealed. Section 211. Gasoline service stations

The overtime exemption contained in section 13(b)(8) of the Act which was applicable to employees of gasoline service stations is repealed.

Section 212. Petroleum distribution employees

The unlimited overtime exemption contained in section 13(b) (10) of the Act which covered petroleum distribution employees is repealed, and an overtime exemption, limited to 12 hours a day and 56 hours a week, is provided in a new section 7(b) (3) for such employees if they receive compensation for the hours of employment in excess of 40 but no more than 56 in any workweek at a rate not less than one and one-half times the applicable minimum wage rate.

Section 213. Eniwetok and Kwajalein Atolls and Johnston Island

This section makes the Act applicable to employees in Johnston Island and in the Eniwetok and Kwajalein Atolls.

Section 214. Conforming amendments

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This section redesignates the paragraphs remaining in section 13(8) for the purpose of filling the gaps left by the repeals made in this title of the bill.

TITLE III-INCREASE IN MINIMUM WAGE

Section 301. Presently covered employees

This section amends section 6(a) of the Act to increase the minimum wage to be paid employees who now receive the protection of the minimum wage provisions of the Act. The new minimum wage rate for these persons will be $1.40 an hour during the year beginning [39] July 1, 1966, $1.60 an hour during the next year, and $1.75 an hour after July 1, 1968.

The present minimum wage rate is $1.25 an hour except that until September 3 of this year the minimum wage rate is $1.15 an hour for

employees who were newly brought under coverage by the 1961 amendments.

The amendment made by subsection (b) of this section does not make any substantive change, but rather merely rearranges the order of the provisions of the present Act.

Section 302. Agricultural employees

The amendment made by this section requires employees employed in agriculture, unless specifically exempted, to be paid a minimum wage. The minimum wage rate for these employees will be $1.15 an hour during the 2-year period beginning July 1, 1966; thereafter their minimum wage will be $1.25 an hour.

Section 303. Newly covered employees

This section amends section 6(b) of the Act to prescribe the minimum wage to be paid employees who are newly brought within the purview of the Act by the amendments made by this bill. Under this provision the newly covered employees will receive wages at rates not less than $1 an hour beginning January 1, 1966, not less than $1.15 an hour beginning July 1, 1966, not less than $1.25 an hour beginning July 1, 1967, not less than $1.40 an hour beginning July 1, 1968, not less than $1.60 an hour beginning July 1, 1969. and not less than $1.75 an hour beginning July 1, 1970.

Section 304. Employees in Puerto Rico and the Virgin Islands

Under the present Act, minimum wage rates for Puerto Rico and the Virgin Islands are established by the Secretary pursuant to recommendations of special industry committees. The wages established for an industry must be set at levels as close as economically feasible to the applicable mainland level, but may not be higher than the rate which would be applicable in the United States.

This section prescribes the manner in which wage rates in Puerto Rico and the Virgin Islands will be adjusted in light of the increases proposed in the bill. Under these provisions, the wage rates for those persons who are presently covered will be increased 12 percent effective 60 days after July 1, 1966, or 1 year from the effective date of the most recent wage order applicable to the employees, whichever is later. Then 1 year later the wage rate for such persons will be increased by an amount equal to 16 percent of the rates applicable under the most recent wage order issued by the Secretary before July 1, 1966. Similarly, 2 years after the applicable effective date of the first increase, such minimum wage rate will be increased by an amount equal to 12 percent of the rate applicable under the most recent wage order issued by the Secretary prior to July 1, 1966.

In the case of employees in Puerto Rico and the Virgin Islands who have not heretofore been covered by the Act, the Secretary must before January 1, 1966, appoint a special industry committee to recommend the minimum wage rate to be applicable, in accordance with the usual standards prescribed in the law. These rates will be effective with respect to the employee upon the effective date of the wage order issued pursuant to the recommendations of the industry committee, but not before 60 days after January 1, 1966. [40] Section 305. Contract services to Federal Government

This section adds a new subsection at the end of section 6 under which every employer providing a contract service under a contract

with the United States, or any subcontract thereunder, must pay to each of his employees who is not otherwise covered wages at rates not less than the rates provided in subsection (b) of the section—that is, the rates applicable to newly covered employees.

TITLE

IV—APPLICATION

OF MAXIMUM HOURS PROVISIONS

Section 401. Presently and newly covered employees

At present the Act requires an employer to pay overtime compensation to his employees at the rate of 11⁄2 times their regular rate of pay for hours worked by them in excess of 40 in a workweek, except that until September 3 of this year persons who were brought under coverage by the 1961 amendments to the Act may be employed for 42 hours before the overtime rate must be paid. This section amends section 7 of the Act to prescribe a uniform 40-hour standard workweek for all of the employees who are presently covered. It also establishes for newly covered employees a standard workweek of 44 hours during the year beginning July 1, 1967, 42 hours during the next year, and 40 hours thereafter. Employees employed in excess of the hours above specified must be paid at a rate not less than 1%1⁄2 times the regular rate at which they are employed.

Section 402. Commission salesman

This section amends subsection (h) of the present Act (subsection (i) of the Act as redesignated by the bill) which now provides an exemption from the overtime provisions of the Act in the case of an employee of a retail or service establishment whose regular rate of pay is more than 1%1⁄2 times the minimum rate, if more than half his compensation represents commissions on goods or services. The amendment provides that in determining the proportion of compensation representing commissions, all earnings resulting from the application of a bona fide commission rate shall be deemed commissions on goods or services without regard to whether the computed commissions exceed the draw or guarantee.

TITLE V-CHILD LABOR; STUDENTS; AND MANAGEMENT TRAINEES

Section 501. Exemptions for certain children employed in Agriculture Section 13 (c) of the present law provides that the child labor provisions of the Act do not apply with respect to employees employed in agriculture outside of school hours for the district where they are living while so employed. This section amends this provision to narrow this exemption. Under the provision of the bill, children employed in agriculture will be exempt from the child labor provisions of the Act only if they are so employed 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 so employed. The provision will grant the exemption only for a child who is employed by his parent (or person standing in the place of his parent) on a farm owned by such person, or is 12 years of age or over and is employed on a farm to which he commutes daily from his permanent residence, but only if such employment is with the written consent of [41] his parent (or a person standing in the place of his parent) of if his parent or such person is also employed on the same farm.

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