rangements with these people. They are usually individuals having a separate regular occupation, or, housewives, who devote only portions of their time evenings, weekends, etc., to earn additional income for family education, TV sets, homes, car, etc. The Easterling Co. has contracted with approximately 1,700 such individuals throughout the country, enabling them to solicit orders for its products, but it is our experience that less than 10 percent of the individuals under contract earn commission income, which would approach normal income requirement for a wage earner. It would be impossible to compensate such salespeople on an hourly basis. The net effect of these bills would, therefore, be to prevent direct-selling organizations from extending the opportunity for extra income to the vast bulk of these people because of the economic impossibility of maintaining the salary requirements of the Fair Labor Standards Act. They would be out of work and, I do not see how the selling companies could function with only a small core of hourly paid sales people. S. 662 The purpose of this bill is to increase the amount of salary paid to executives and administrators to $6,000 per year from the present levels of $55 per week for executive personnel and $75 per week for administrative personnel. We have no argument with an increase of salary requirements for executives and administrators who may be described as inside employees; personnel whose time and attention are under supervision in the daily routine of a business office operation. However, to force such minimums on outside personnel would result in the elimination of most of such personnel from the supervisory force of the 40 percent of the direct-selling companies which now utilize them. Their hours and methods of work are entirely beyond control. Many, if not most, work on a part-time basis. Many selling part-time and supervising part-time, some with a job on the side. While the value of their services is ascertainable, it cannot be measured by hours, and would ordinarily average well below the proposed $6,000 floor. This proposed floor would accordingly eliminate positions for the great majority of people now working as outside administrative and executive personnel: Such outside personnel must be compensated principally on an incentive basis; due to the impossibility of controlling their endeavors; a form of remuneration based on results obtained is essential if their jobs are to be preserved. May I commend to your committee and to Senator Douglas, its chairman, the written statement on this subject to the committee by J. M. George, counsel of NADSC dated May 4 and also his statement at the December 12, 1955, hearing of the Wage and Hour Division concerning increases in minimum salaries for executive, administrative, and professional employees. This company subscribes to Mr. George's views and I personally believe his knowledge of direct selling entitles them to your earnest consideration. With the above factors in mind, we ask your committee to give due consideration to the adverse effects of these proposed amendments on the multitude of small businesses engaged in direct selling and, more important, on dangers to the outside personnel whose work would be jeopardized and in most cases eliminated. We accordingly object to both amendments. Hon. MATTHEW M. NEELY, United States Senate, Washington, D. C. J. C. LUHN, President. DUNCAN TELEPHONE Co., Davis, W. Va., May 3, 1956. DEAR SENATOR NEELY: I understand that a subcommittee of the Senate Labor and Public Welfare Committee, of which you are a member, will begin holding hearings on May 9 on the question of expansion of the coverage of the Fair Labor Standards Act. I imagine that the telephone companies' switchboard operators' exemption will again be under serious attack as it has in the past. The present law exempts "any switchboard operator employed in a public telephone exchange which has less than 750 stations." Here in West Virginia we have 52 independent telephone companies that serve more than half of the geographical area of the Mountain State. These independent telephone companies serve the small towns and rural areas while the larger towns, cities, and congested areas are served by the Bell Telephone Co. If the 750-station exemption is removed from the present law, this will mean that small towns like Arnoldsburg, Big Springs, Bramwell, Cario, Cameron, Cass, Circleville, Clay, Cowen, Daybrook, Eglon, Frankford, Marlington, Huttonsville, Laurel Point, Moorefield, Rupert, Wayne, Worthington, and others, may be without telephones as the cost of operation would be so high as to force these small telephone companies out of business. It's true that the telephone companies could go to the public service commission for an increase in rates, but with the small size of the telephone companies, the number of stations they serve, it would seem to me that the increase in rates would have to be so great that the subscribers, who, as you know, in these rural areas in West Virginia are low-income people, would have to give up their telephones. Senator, when this hearing comes up, please remember the people in the small towns and rural areas of West Virginia. There is no surer way of putting small business out of business and making big business bigger than by subjecting small business in every instance to legislative standards considered reasonable in large metropolitan areas. The equal treatment of unequals is itself unequal. If you would want additional information of the various independents in West Virginia, the area served, type of service, number of telephones, and what the repeal of the 750-station exemption will mean to them, I will be only too glad to get together with some of the other independents and compile this information for you. The present exemption in the law does not affect our company, as we have been fortunate enough to convert our operation to automatic dial operation, thus doing away with telephone operators. However, I am vitally interested in the other independent operating telephone companies in West Virginia and their preservation. We independents are proud of the fact that we are independent of the Bell Telephone Co., and of the progress that we have made. Senator, any consideration you may give the independent telephone companies and the people of the small towns and rural areas will be greatly appreciated. Very truly yours, GERALD H. PARKS, President. AMERICAN ASSOCIATION OF UNIVERSITY WOMEN, Senator PAUL H. DOUGLAS, NATIONAL HEADQUARTERS, Washington, D. C. May 9, 1956. Senate Labor and Public Welfare Subcommittee, DEAR SENATOR DOUGLAS: The American Association of University Women wishes to go on record in support of extending coverage of the Fair Labor Standards Act to substandard groups. By substandard groups, we mean those types of employment in interstate commerce not already covered by the FLSA. The AAUW has a membership of over 135,000 college-trained women and is organized into more than 1,300 branches located in all 48 States, Alaska, Hawaii, Guam, and the District of Columbia. The association has long concerned itself with Federal legislation in the public interest, and to this end adopts a legislative program biennially. At its most recent convention held in Los Angeles, the following legislative item was proposed from the floor, debated and adopted unanimously: "Support of measures to promote wage and hour protection of substandard groups." We strongly urge this committee and the United States Senate to enact legislation which will extend coverage of the Fair Labor Standards Act to substandard groups. Sincerely yours, ISABEL H. KIDENEY, Chairman, Legislative Program Committee, MONROVIA, CALIF., May 8, 1956. Senator PAUL H. DOUGLAS, Chairman, Subcommittee on Labor and Public Welfare, United States Senate, Washington, D. C.: Urge that the retail exemption to Fair Labor Standards Act be retained in its present form and this wire become a part of subcommittee record. KARL M. THOMPSON MCBRATNEYS. SENATE LABOR COMMITTEE, Senate Office Building, Washington, D. C.: OMAHA, NEBR., May 7, 1956. Due to our type of retail business, we as an association do hereby request that the Federal wage and hour law retail exemption be preserved. We request that this wire be included in record of the hearing. MIDWEST RETAIL FARM EQUIPMENT ASSOCIATION, MITCHELL, NEBR., May 8, 1956. Senator PAUL DOUGLAS, Senate Labor Committee, Senate Office Building, Washington, D. C.: Our 14 members asks that service establishments doing laundry and dry cleaning be excluded from Federal wage and hour control. We operate on a local basis and hire many handicapped persons who could not be employed when minimum wage law prevailed. We request this message be made a part of the records of the present hearing. SCOTTS BLUFF COUNTY DRY CLEANERS ASSOCIATION, STAN RI FHSCHMIDT, Secretary. CLARKSDALE, MISS., May 7, 1956. Senator PAUL H. DOUGLAS, Chairman, Subcommittee on Labor and Public Welfare, United States Senate, Washington, D. C.: We urge retail exemption be retained in present form under Fair Labor Standards Act as representing best interest in store operations. Please make this part of committee's records. THE STYLE SHOPPE CLARKSDALE, Miss., May 7, 1956. Senator PAUL H. DOUGLAS, Chairman, Subcommittee on Labor and Public Welfare, United States Senate, Washington, D. C.: We urge retail exemption be retained in present form under Fair Labor Standards Act as representing best interest in store operations. Please make this part of the committee records. CLARKSDALE PRINTING Co. CLARKSDALE, MISS., May 7, 1956. Senator PAUL H. DOUGLAS, Chairman, Subcommittee on Labor and Public Welfare, We urge retail exemption be retained in present form under Fair Labor Standards Act as representing best interest in store operations. this part of the committee's records. Please make NELLIE MAYS GIFT SHOP. CLARKSDALE, MISS., May 7, 1956. Senator PAUL H. DOUGLAS, Chairman, Subcommittee on Labor and Public Welfare, United States Senate, Washington, D. C.: We urge retail exemption be retained in present form under Fair Labor Standards Act as representing best interest in store operations. Please make this part of the committee's records. This chamber represents 150 merchants. RETAIL MERCHANTS COMMITTEE OF THE CHAMBER OF COMMERCE. CLARKSDALE, MISS., May 7, 1956. Senator PAUL H. DOUGLAS, Chairman, Subcommittee on Labor and Public Welfare, United States Senate, Washington, D. C.: We urge retail exemption be retained in present form under Fair Labor Standards Act as representing best interest in store operations. Please make this part of the committee's records. THE OFFICE SUPPLY. CLARKSDALE, MISS., May 7, 1956. Senator PAUL H. DOUGLAS, Chairman, Subcommittee on Labor and Public Welfare, United States Senate, Washington, D. C.: We urge retail exemption be retained in present form under Fair Labor Standards Act as representing best interest in store operations. Please make this part of the committee's records. J. C. PENNEY'S. CLARKSDALE, MISS., May 7, 1956. Senator PAUL H. DOUGLAS, Chairman, Subcommittee on Labor and Public Welfare, We urge retail exemption be retained in present form under Fair Labor Standards Act as representing best interest in store operations. Please make this part of the committee's records. WILEYS STORE. BALTIMORE, MD., May 7, 1956. Senator PAUL H. DOUGLAS, Chairman, Subcommittee on Labor, Committee on Labor and Public Welfare, United States Senate, Washington, D. C.: We earnestly urge and insist that the retail exemption be retained in its present form in the Fair Labor Standards Act and further request that this wire be made part of the subcommittee's record. READ DRUG & CHEMICAL CO., Hon. PAUL H. DOUGLAS, Chairman, Labor Subcommittee, ORLANDO, FLA, May 7, 1956. Senate Labor and Public Welfare Committee, United States Senate, Washington, D. C.: Members of our association, representing retail lumber and building materials dealers in Florida are opposed to extension of wage-hour law to include retail establishment. Retail coverage would interfere with dealers' flexibility of operation, impair retail services to the public, endanger the stability of employment now enjoyed by retail employees and increase operating cost. We request that this wire be placed in the record of hearing. Senator PAUL H. DOUGLAS, Senate Labor Committee, MARIE BENNETT, Executive Secretary. Senate Office Building, Washington, D. C.: OMAHA, NEBR., May 5, 1956. Am informed Federal wage-hour law hearings scheduled for next week. Please include in hearing record our position of advocating preservation of retailing exemption as was intended and provided in the original act. Retailing is local business and can best serve the public under local and State control. ASSOCIATED RETAILERS OF OMAHA, Senator PAUL H. DOUGLAS, Senate Office Building, Washington, D. C.: OMAHA, NEBR., May 5, 1956. Please include in hearing record of Federal wage-hour law scheduled next week our request to retain the retail exemption. Removal of exemption would result in Federal interference in local retail competition, contrary to the intent of the law and rights of States to control local employment conditions. NEBRASKA FEDERATION OF RETAIL ASSOCIATIONS, STATEMENT OF R. H. ROWE, VICE PRESIDENT AND SECRETARY, UNITED STATES WHOLESALE GROCERS' ASSOCIATION My name is R. H. Rowe. I am vice president and secretary of the United States Wholesale Grocers' Association, a national trade organization of independent food and grocery distributors, with headquarters in Washington, D. C. It is our view that since the first session of this Congress raised the minimum hourly wage rate from 75 cents an hour to $1-an increase of 33% percent, no further substantial change should now be made in the act, in order to let the industries affected have time to adjust themselves to the increase. This is especially applicable to business concerns located outside of the highly industrialized sections of the country and which had wage scales at or only somewhat above the old minimum of 75 cents. Such concerns need opportunity to adjust their businesses to the increase, and, we think, should not now be required to make further adjustment to the eliminations of the exemptions provided in the act. In my testimony before this committee on May 5, 1955, chiefly on question of increasing the minimum wage, I concluded with a statement opposing the elimination or curtailment of the exemption for outside salesmen. Since this exemption is now in specific issue before this committee, I would like to emphasize again our opposition to its elimination. One basic reason for retaining the exemption as it now stands is that the outside salesman performs work away from his employer's place of business, and that he works alone and without supervision while so engaged. Another is that his hours must conform to the convenience of his customers and not to his convenience or that of his employer. The employer has no control over the salesman's hour-by-hour performance. This should be left to the discretion and good judgment of the salesman. procedure is best for both salesman and his employer. This The art of selling is related directly to the individual personality of the salesman. To put him on a rigid time schedule would be to imprison the sway of his personality and the exercise of his art and to limit seriously the result of his work. In the wholesale grocery business, the salesman has many of the characteristics of an independent contractor. He is becoming more and more a merchandising counselor to his retailer customer, giving the retailer advice on modern store operation, equipment, and plans for promoting sales to consumers. In many cases such help is even more beneficial to the retailer than the prices charged for the goods. In conformity with the varied talents and duties of the salesman, which they exercise in their own way once they have left the employer's place of business, we find that wholesale grocer salesmen are paid in a multiplicity of ways. We quote from the salesmen's compensation part of our survey of wholesale grocers' profit and loss figures for 1952 operations: "Table 12 indicates that wholesale grocers employ practically every conceiv able method of paying salesmen. It shows that the 127 firms responding used the following 16 factors [or methods in determining compensation of salesmen] either singly or in combination: salary, sales, gross profit, net profit, profit earned by salesmen, profit sharing, profitableness of items, individual accomplishment, Christmas gifts, commissions, quotas, bad debts, collections, delivery cost, travel cost, and age of accounts." The survey lists at least 39 specific applications of such factors, or 39 different ways in which wholesale grocer salesmen are paid, none of which has any reference to daily or weekly hours. |