L / 3 ^ ;i ; yU ^^/ 9^9 - T2) United States Department of Labor Maurice J. Tobin, /Secretary PROGRESS OF STATE MINIMUM- WAGE ^^^^'i^' LEGISLATION, 1949-50^ An appropriate milestone for evaluating progress in State minimum- wage regulation is provided by the October 1949 amendment of the Fair Labor Standards Act, increasing the Federal hourly minimum wage to 75 cents, effective January 25, 1950. During the decade when the Federal minimum wage was not increased beyond 40 cents, the States, under their flexible wage-board-type laws, continued to make basic revisions in wage orders, and gradually established minimum wages more nearly adjusted to changes in the cost of living. By June 30, 1950, approximately 70 minimum-wage rates had be- come effective since VJ-day in 15 States, the District of Columbia, and Puerto Rico. Practically all were established by the wage-board process. During this entire period, only 4 wage orders, 3 in one State, established minimum wages below 40 cents an hour. Half of the orders in this period set minimum wages of 60 cents or over, 6 setting 70 cents or higher. Major Legislation July 1949 through June 1950, the period here dealt with, was an "off" year, legislatively speaking, for only 11 States convened their legislatures in regular session. Seven of these States had existing minimum- wage laws: California, Kentucky, Louisiana, Massachu- setts, New Jersey, New York, and Rhode Island. The other four — Maryland, Mississippi, South Carolina, and Virginia — failed to adopt any minimum-wage laws at their legislative sessions. This was a continuation of the status quo, inasmuch as only three such laws — those of Maine, Alaska, and Hawaii — were adopted subsequent to the effective date of the Fair Labor Standards Act in October 1938. Several States continued their efforts to improve the effectiveness of their existing laws. In Massachusetts and New Hampshire, this action occurred in 1949 legislative sessions which continued into the period under study. It took the form of amendments to establish ^ By Alice Angus and Loretta Sullivan of the U. S. Department of Labor's Women's Bureau. [Reprinted (with additional data) from the Monthly Labor Review (October 1950, pp. 460-464) of the U. S. Department of Labor's Bureau of Labor Statistics] 922753—51 statutory rates. Massachusetts set a minimum rate of 65 cents an hour, effective January 1, 1950 ; New Hampshire, a minimum rate of 50 cents for experienced workers, and 35 cents for inexperienced (less than 6 months), effective July 28, 1949. In both these States, the statutory rate became applicable to men as well as to women. A pre- vious amendment to the Massachusetts minimum- wage law, effective September 11, 1946, had provided that the statute itself, as well as every wage order and regulation under it, should apply to men. The amendment to the basic New Hampshire statute did not state ex- pressly that it applied to men, but the term "any employees" used in the section on rates was interpreted by the Attorney General in a formal written opinion as being applicable to men as well as to women and minors. Occupational coverage, however, differs in the two States. The Massachusetts statutory rate applies to all occupations covered by the basic minimum- wage law (i. e., all except domestic service and agri- cultural labor) except as the Minimum Wage Commission sets a lower wage by wage order. In New Hampshire, the amendment establishing the statutory rate exempts household, domestic, or farm labor (occupations also exempt from the basic minimum-wage law) ; outside salesmen; and employees of restaurants, hotels, inns, cabins, and summer camps for minors. The latter group of occupations is not exempt from the basic law, and the Attorney General has ruled that the Labor Commissioner may continue to establish minimum wages for women and minors in these and other occupations not exempt from the basic law by the usual wage-board procedure, but any wage hereafter fixed in this way may not be less than the stat- utory rate. In both States the amendments had the initial effect of bringing under coverage groups not previously subject to industry wage orders. In New Hampshire, in spite of the occupations excepted from the statutory rate, the amendment brought the benefits of minimum-wage coverage to a greater number of such groups than in Massachusetts. When the New Hampshire legislation became effective, the State already had wage orders in effect covering the following trade and service industries : Laundry, restaurant, dry cleaning, beauty parlor, and retail, but Massachusetts had postwar orders covering these and four additional occupations and industries. Adoption of the statutory-rate amendments in Massachusetts and New Hampshire is significant from the standpoint of future progress and probable developments in this field, A statutory rate with im- mediate coverage, in addition to wage-board authority to increase that rate, has long been a goal of unions. State labor commissioners, and civic organizations. Because Massachusetts and New Hampshire were the first States to adopt amendments which preserve the wage- board procedure and at the same time fix a flat rate in the law, their two recent amendments must be regarded as major steps forward in the State minimum-wage field. Establishment of minimum wages by statute rather than by wage order is not a new development. At the time the two recent amend- ments were adopted, 6 jurisdictions — Arkansas, Nevada, South Da- kota, Alaska, Hawaii, and Puerto Rico — already had such rates fixed by statute. The practice of setting such rates dates from early mini- mum-wage history — Utah, 1913; Arkansas, 1915; Arizona, 1917; and Puerto Eico, 1919. However, in all of the laws previous to the recent amendments in Massachusetts and New Hampshire (with the exception of the Ar- kansas law) the rate was static; the law did not authorize the Labor Commissioner to study the relation of wages to changes in the cost of living and to establish separate industry minimums by wage order. Experience under these recent amendments will be required in order to indicate (1) the extent to which the wage-board procedure will be used or needed, and (2) the extent of the wage board's authority in setting wages higher than the statutory rate or in the coverage of such rates. The Massachusetts statute, for example, makes the stat- utory rate of 65 cents effective "unless the Commission has expressly approved or shall expressly approve the establishment and payment of a lesser wage." This raises the question of whether the Commis- sion has authority to set a minimum higher than 65 cents. Recent wage-board activity in Massachusetts has not yet tested the effect of this rate as a possible ceiling to wage-board action.^ In New Hamp- shire the statutory rate amendment directs the Labor Commissioner to readjust minimum wages for women and minors under wage orders, in line wdth the statutory rate. The Attorney General, interpreting this provision, has ruled that the Commissioner may issue wage orders for women and minors, but that such orders do not cover men in the occupations exempt from the application of the statutory rate. This raises the question as to whether the amendment permits any wage orders applicable to men to be issued. Since Massachusetts and New Hampshire were the first States to enact statutory rates subsequent to the effective date of the Federal Fair Labor Standards Act in 1938, their action permits certain com- parisons with the Federal law. Both State rates are lower than the existing Federal 75-cent minimum, which may be explained, in part, by the fact that both were adopted not only before the new Federal rate became effective, but before Congress acted on the measure. A ^ Recomm«ndations of the wage board for the personal services industry in September 1950 proposed a rate of 70 cents for certain classes of workers. second consideration is that the State amendments did not set a basis for overtime as is done under the Federal act, A third difference is the point already discussed, i. e., the two States have preserved their wage-board procedure. Other Legislation California appropriated $9,725 to its Department of Industrial Relations for an investigation of the cost of living for women and minors in relation to the minimum-wage law. This appears to be the first such study under California State Labor Department aus- pices. A limited cost-of-living study covering San Francisco has been prepared periodically by the University of California, but no survey has been made regularly on a State-wide basis nor has any official State survey been made. An amendment to the Massachusetts law, approved April IT, 1950, effective July 16, requires employers to keep employee records for 2 years instead of 1, thus extending the period during which inspections may be made and violations determined by the Massachusetts Com- missioner. A New York amendment, approved April 5 and effective July 1, 1950, provides that a wage board established under the mini- mum-wage law shall continue in existence for 2 years following the date of its formation, unless previously dissolved by the Commissioner. It also stipulates that the Commissioner may dissolve a wage board which fails to submit a report on time, and appoint a new board. A Rhode Island amendment approved and effective April 26, 1950, pro- vides that the Director of Labor or the Minimum-Wage Commissioner shall bring all actions and prosecutions for violations of the minimum- wage law. - Wage Orders Since the wage-board process involves a certain amount of time, the effect of the Federal amendment in influencing State minimum wages was not inamediately apparent in the orders issued in the period July 1949 through June 1950.^ But both the increase in rate and the re- duction in coverage of the Federal law emphasize, in different ways, the importance of State action in the minimum-wage field. During the period covered, 11 minimum- wage orders became ef- fective in 7 States and 1 Territory — California, Connecticut, Massa- chusetts, North Dakota, Rhode Island, Washington, Wisconsin, and Puerto Rico. In addition, in Massachusetts, three orders which had been directory became mandatory. As has been customary since the adoption of the Federal Act in 1938, the State minimum-wage orders in the period under study related largely to intrastate activities, par- ticularly in the trade and service industries. ^ Tabular analysis of these orders appears on pp. 8 to 11. North Dakota was the only State, during the 12 months covered, that established a revised rate for manufacturing, the principal in- dustry to which the Federal minimum wage applies. This action followed the pattern increasingly adopted by other States during the period 1947-49, when the cost of living rapidly increased, and the Federal rate was static at 40 cents. Within the last few years, three other jurisdictions have revised their manufacturing wage orders: California, 1947; District of Columbia, 1948; Oregon, 1948. These orders were made applicable to all types of manufacturing within the States. In 1947, New York also revised its order for the confec- tionery segment of manufacturing. Kentucky and Wisconsin es- tablished increased rates for manufacturing occupations in 1947, by the revision of their all-occupation orders. These State manufacturing orders became effective before the re- cent increase in the Federal rate, and their minimum wages are lower than those which Congress ultimately adopted. (The one exception is the District of Columbia manufacturing and wholesaling order which fixed a basic weekly minimum of $30 for a workweek of 32 to 40 hours. ) Consequently, the State minimum wages have been super- seded, in the main, by the increased Federal rate. The rate estab- lished by the North Dakota manufacturing order is 55 cents an hour, more than a third above the 40-cent Federal rate in effect at the time the State order was issued. However, the State manufacturing orders also cover, in addition to interstate manufacturing, many processes which are largely intra- state; e. g., the revised North Dakota order effective September 1, 1949, as well as the preceding one, specifically includes, in addition to general coverage, the work performed in dressmaking shops, whole- sale millinery shops, workrooms of retail millinery shops, garment alteration, art needlework, fur-garment making, and millinery work- rooms in mercantile stores. In the 12 months under study, the industry or occupation to which principal attention was given by States was that of public house- keeping or one of its branches, i. e., restaurants. Of the orders that became effective in this period, 3 covered such work. The Connecti- cut restaurant order, effective May 15, 1950, established a guaranteed wage of $28 for a workweek of 40 to 48 hours for nonservice em- ployees. Meals are to be furnished in addition to wages, or 65 cents paid for each meal not furnished. An employee working 5 hours or less must receive 1 meal, and if more than 5 hours, 2 meals, or must be paid for any meal not furnished. The Rhode Island wage order for restaurants and hotel restaurants, effective June 1, 1950, established 60 cents an hour plus meals for nonservice employees, for a workweek of over 24 and up to 45 hours. 6 If meals are not furnished, the employee must be paid an additional 10 cents an hour for each hour of working time. As in the previous order, employees working 5 hours or more are entitled to 2 meals a day ; less than 5 hours, to 1 meal a day ; and if on a split shift, 1 meal for each consecutive period of hours worked. The public housekeeping order in Washington State effective Jan- uary 23, 1950, established a minimum-wage rate of 65 cents an hour without distinction as to service and nonservice workers. Instead of requiring meals to be furnished or paid for, this order permits a deduction of 40 cents for each meal eaten during an employee's work shift and a further deduction for lodging provided by employer — $3.50 for a single room and $2.50 for a double room. Washington, with four orders, was the most active State in issuing wage orders during the period. The orders and their effective dates were : Amusement and recreation, November 28, 1949 ; public house- keeping, January 23, 1950; beauty culture, February 13, 1950; and laundry, dry-cleaning, and dye works, June 5, 1950. Each of these orders established a minimum wage of 65 cents an hour. The work- ing-conditions standards provided in most recent Washington orders include a 30-minute lunch period, a 10-minute rest period in each 4 hours, and adequate sanitary and safety conditions. The Washington public housekeeping order repeated the prohibition of the earlier order on work after midnight for women elevator operators, and specifically iDrohibitecl women's employment as bellhops. Washington was the only State to issue an order for the amusement and recreation industries in the period covered. This is a compara- tively new field for State minimum wages, and Washington was the third State to cover it by an individual industry order. Other States with such orders are California and Massachusetts. In a fourth State, New York, the establishment of minimum wages for this in- dustry is in process. Minimum rates were also established by wage orders that became effective during the year July 1949 through June 1950, as follows : Massachusetts — clerical, technical, and similar occupations — 65 cents an hour for experienced employees, 60 cents for inexperienced (800 hours in the occupations) ; and Puerto Eico — wholesale trade — 50 cents per hour up to 44 hours per week and twice the employee's reg- ular rate thereafter. The California motion picture order and the Wisconsin canning order did not set minimum wages, but established general standards governing conditions of work and overtime rates. Following custom in State minimum-wage regulations, other orders issued in this period also fixed various standards to safeguard the minimum wage. The most usual type of provision related to the pur- chase and upkeep of uniforms. One of the more effective of such 7 regulations is included in the Kliode Island restaurant and hotel- restaurant occupations order, which requires an employer who does not furnish and/or launder uniforms to pay the employee $1 a week in addition to wages. The Connecticut restaurant occupation order requires uniforms to be supplied and laundered without cost to the employee; the Massachusetts clerical order requires the employer to furnish uniforms and prohibits any deduction for them ; the Wash- ington State orders prohibit the employer from requiring an em- ployee to contribute to the purchase or maintenance of uniforms, equipment, or tools. Regulations designed to reduce the over-all length of the workday, which are frequently established in State wage orders, are contained in two orders that became effective in this period: The Connecticut restaurant occupation order requires $1 a day additional to be paid to the employee on any day on which the spread of hours exceeds 12; the Rhode Island restaurant and hotel-restaurant occupations order requires an additional 50 cents to be paid for any day on which the spread of hours exceeds 10 or there is more than one interval off duty. Because minimum-wage laws in these States cover men as well as women, wage-order provisions serve to give men workers the benefits of some working-hour standards. Under accepted wage-order practice in Washington and North Dakota, the four Washington wage orders and the North Dakota order for manufacturing established regulations governing sanitary conditions, such as ventilation, toilets, and washrooms, as well as certain safety standards. 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