The New \(/.ge-Hour Law

By \(ilson Compton Secretary-Manager, National Lumber Manufacturers Association

The Wage-Hour law was signed by the President on Saturday, June 25. The law takes effect 120 days thereafter, or October 24.

Inquiries so far about the application of the law relate principally to these features: l-Jurisdiction ; 2-Wages; 3-Hours; A-Status of Inventories; S-Liability on Resales; 6-Flexibility; 7-Industry Committees; 8-Exemptions ; 9-Administrator.

The construction of the Act on these points, in so far as it can now be determined, is as follows:

Jurisdiction: The Act applies to employers of employees any of whom are "engaged in commerce or in the production of goods for commerce." This is new language. It is intended to avoid the constitutional objections found by the Supreme Court in the Schechter case (N.R.A.). In effect it means that the Act applies to producers of goods which go into commerce. It does not apply to retailers who are not operating in interstate commerce. To this extent it difiers from the N.LR.A. which sought jurisdiction over producers whose goods were destined for commerce and also to local dealers who had received their goods through interstate commerce. Also it does not apply to farmers, outside salesmen, or those in bona fide executive, administrative or professional employments.

Wages: IJnless some affirmative action is taken by the Administrator on recommendation of an Industry Committee, the minimum wages per hour beginning October 24, 1938, are as follows : first year-ZS cents; second year through seventh year-30 cents; after seventh year-4O cents.

Hours: fn the absence of a collective bargaining agreement, the maximum hours per week of any employee (engaged in commerce or in the production of goods for commerce) beginning October 24, 1938, are as follows: first year-44 hours ; second year-42 hours ; after second year40 hours.

The limitations to this maximum hours requirement are:

1. No limit is imposed upon the weekly hours provided the hours of employment, in excess of the hours above stated, are paid for at a rate "not less than one-and-onehalf times the regular rate."

2. fn case of employment agreement resulting from collective bargaining with representatives of employees, "certified as bona fide by the National Labor Relations Board," the above weekly limitation does not apply during any six months period in which the total hours of employment do not exceed 1000 hours; or similarly during any 52 weeks period during which the total of hours of employment do not exceed 200O.

3. fn any "seasonal" industry for a period not more than 14 work weeks in any one calendar year, the maximum hours may exceed those specified.

4. These partial exemptions, under 2 and 3 above, on the ground of collective bargaining agreement or seasonal operations, are subject to the limitation that employment in excess of 12 hours in any day or in excess of 56 hours in any week must be paid for at time-and-a-half. The Administrator has no discretion to modify the maximum hours limitations except to the extent of above variations for "seasonal" industries. The classificatlon of an industry as "seasonal" is subject to determination by the Administrator.

Inventories: The Act declares it unlawful for any person to sell or offer for sale goods in the production of which "any employee was employed in violation of" the wage and hour limitations. This does not apply to inventories on hand prior to October 24. It means that any work done thereafter with respect to the processing, selling or shipping of such inventories is subject to the statutory limitations.

Resale: Section 15 prohibits the sale or shipment in commerce after October 23 of. "any goods in the production of which any employee was employed in violation" of the wage and hour provisions. This prohibition goes to any "person" and is not limited to an "employer." It prohibits a person from selling or shipping goods, not only those on which his own employees have been employed at less than the minimum wage or more than the maximum hours prescribed in the law, but those on which employees of anyone else have been so employed. This raises the obvious question of the extent to which any person who, in his own employments, does not himself violate the wage and hour provisions is liable because of possible violation by those from whom he buys his goods for resale. This provision was carefully considered by the Conferees. It means that anyone, for example, who buys lumber for resale in commerce may be restrained from reselling or reshipping if the Administrator finds that the lumber at any stage was produced in violation of the Act.

This probably will necessitate the setting up of a system of Certificates of Compliance, whereby any person purchasing goods for resale may assure himself that they were produced under the terms of this law, by requiring a Certificate of Compliance from the person from whom he buys. Even this, however, will not protect him against having these goods "quarantined" if he Administrator concludes that they actually had been produced in violation of the wage or hours provisions. The only benefit in that case of a Certificate of Compliance will be immunity from the criminal penalties prescribed in the Act. This result is not accidental, but is the deliberate conclusion of the Conferees.

Flexibility Statutory Minimum Wages: The Act prescribes minimum wages as above stated and in the absence of further action, these requirements will go into effect as stated in the statute. However, the Administrator, if so recommended by an Industry Committee, can immediately after the law takes efiect raise the minimum wages to as high as 4O cents. He has no authority, however, to do so unless it is recommended to him by an Industry Committee which he has full authority to appoint and ,,after due notice to interested persons and giving them an opportunity to be heard."

Beginning with the second year, the range of possible flexibility in minimum wages is between 30 and 4O cents an hour. If an Industry Committee does not recommend an increase above the minimum wages prescribed in the statute, then, after the first year which is at 25 cents, the minimum wage will continue for six years at 30 cents, and thereafter automatically will become 40 cents. After the seventh year the only ground on which the minimum wage may be fixed at less than 40 cents is that the appropriate Industry Committee "recommends," and the Administrator "finds," that the continuance of a minimum wage less than 40 cents, but not less than 30 cents, "is necessary in order to prevent a substantial curtailment of employment in the industry."

The Industry Committee is required to recommend the "highest minimum wage rates for the industry which it determines, having due regard to economic and competitive conditions, will not substantially curtail employment in the industry." In reaching such a determination, the Committee and the Administrator are required to ,consider:

1. Competitive conditions; transportation, living and production costs.

2. Wages established for comparable work through collective bargaining agreements.

3. Wages paid for like work "by employers who voluntarily maintain minimum wage standards in the industry." Industry Committees: The Act requires the Administrator to appoint Industry Committees "as soon as practicable." Each Committee will include an equal number of persons representing employers, employees and the public. Although the Act states that these members shall "represent" their respective groups, it is the opinion of the So. licitor that the Administrator is not obligated by iaw to consult or to secure nominations from the groups to be "represented." It is believed, however, that the Administrator will do so whether or not technically so required by the statute. Industry Committee members are employees of the Government, compensated by the Government, and the Committees themselves are agencies of the Govern- ment. To this extent they difier from the NRA Code Au_ thorities.

The Industry Committees may be of any size determined by the Administrator. The definition of an .,industry,, for purposes of administration of this Act is subject to determi_ nation by the Administrator. He may subdivide an industry into classifications. Or various branches of an industry may be consolidated. The only limitation on the Administrator's discretion appears to be that .,no classification shall be made, and no minimum wage rate shall be fixed, solely on a regional basis."

Exemptions: A last-minute addition by the Conference Committee included in the exemption of agriculture .,any practices (including any forestry or lumbering operations) performed by a farmer or on a farm as an incident to or in conjunction with" his farming operations. The Congressional debates in both the House and Senate on the day the Bill was passed indicate that such forestry or lumbering operations to be exempt as a part of agriculture must be conducted upon the farm of the person claiming exemp- tion and must be conducted not only as an incident to but also in conjunction with his farming operations. The Solicitor's office admits that the language in the statute itself on this point is not definite, but says that, under the customary rule of statutory construction, this definition will be interpreted in the light of the obvious intent of Congress as shown in the record of the debates. If so. the so-called agricultural exemption of forestry and lumbering will not be of great consequence.

Administrator: At the moment the Administrator has not been appointed. It is expected that he will be appointed about July 6. The authority to establish Industry Committees is effective now. It is expected that the Administrator, when appointed, will proceed promptly to the appointment of Industry Committees.

On Eastern Trip

R. O. Wilson, San Francisco wholesale lumberman, left June 15 on a six weeks' vacation trip. He picked uprlgl new car at Lansing, Mich., and spent. some time visiting relatives at his old home in Rimersburg, Pennsylvania. H; will visit New York, Boston, Quebec and Montreal and will call on some of his old friends in the lumber business. Mr. Wilson was accompanied by his daughter.