Fair Labor Standards Act (1938)

Fair Labor Standards Act (1938)

Roger K. Newman

The Fair Labor Standards Act regulates wages and hours in the workplace. Efforts to enact legislation limiting the number of hours a person could work in a week began early in the nineteenth century, but Congress was not able to adopt the Fair Labor Standards Act until 1938. Although many political and labor leaders were suspicious of federally-drawn labor standards, the minimum wage and hour laws are now widely believed to be an important piece of anti-poverty legislation.

HUGO BLACK'S BILL

In December of, 1932, three months before Franklin D. Roosevelt's inauguration and at the nadir of the Great Depression, Senator Hugo L. Black of Alabama introduced a bill that would forbid interstate commerce of goods produced by persons working more than thirty hours a week or six hours a day. This early attempt to regulate the work week proved fruitless because of two Supreme Court cases that seemed to bar such laws. In the 1918 case Hammer v. Dagenhart, the Supreme Court held unconstitutional the federal child-labor law passed two years earlier. And in 1923, in Adkins v. Children's Hospital, the court voided a District of Columbia minimum wage law for women on the ground that such a law was "a naked, arbitrary exercise" of legislative power in violation of the due process clause of the Fifth Amendment.

Black tried to distinguish his proposal from the legislation rejected in Hammer. "Laws must be interpreted to meet conditions existing when the law is interpreted," he told the Senate which passed the bill in April of 1933. The bill never passed in the House. Congress passed the National Industrial Recovery Act (NRA) in May of 1933, one section of which addressed minimum wages and maximum hours.

THE SUPREME COURT AND THE NEW DEAL

The Supreme Court in 1935 unanimously struck down the NRA, holding that it exceeded the federal government's power under the Commerce Clause and that it was an unconstitutional delegation of legislative authority to the executive branch. One year later the Court ruled that a New York minimum wage law was unconstitutional. Based on these decisions it appeared that the court would not sanction a bill similar to the one that Hugo Black had proposed earlier on minimum wages and maximum hours. Nevertheless, after winning the 1936 presidential election in a landslide, Roosevelt asked labor secretary Frances Perkins, "What happened to that nice unconstitutional bill you had tucked away?" He had determined that the bill should be introduced in Congress. New Deal lawyers Benjamin V. Cohen and Thomas G. Corcoran, with help from Assistant Attorney General Robert H. Jackson started revising it extensively.

In February of 1937 Roosevelt startled the nation by announcing his Reorganization of the Judiciary Proposal. The Supreme Court had invalidated six major New Deal laws over the previous two years, and Roosevelt wanted to nominate one justice, up to a total of six, for each one over the age of seventy who would not retire. This would make for a court of up to fifteen members. Roosevelt's "court-packing" proposal, as its opponents called it, produced a long and bitter political battle, but before it could come to fruition, the Supreme Court in West Coast Hotel v. Parrish, upheld a Washington state minimum wage law for women and minors similar to the New York statute it had overturned. Adkins was specifically overruled as the court emphasized the need for minimum wage regulation. "The Legislature," wrote Chief Justice Charles Evans Hughes, "was entitled to adopt measures to reduce the evils of the 'sweating system,' the exploiting of workers at wages so low as to be insufficient to meet the bare cost of living, thus making their very helplessness the occasion of a most injurious competition." And in April, in N.L.R.B. v. Jones & Loughlin Steel Corporation, the Court upheld the National Labor Relations Act. In short, Roosevelt no longer needed to "pack the court" with justices friendly to his labor legislation because the existing court ultimately found it compatible with the Constitution.

CONGRESS CONSIDERS A BROADER BILL

The way was cleared for the introduction of a wages-hours bill. Cohen, its principal draftsman, based it on the newly reinvigorated Commerce Clause and hewed closely to the language and logic of the West Coast Hotel and Jones & Loughlin decisions. The proposal included a presidentially-appointed board with the authority to set minimum wage and maximum workweek standards. Black knew this discretion would draw strong opposition from Southern Democrats and most Republicans. The simpler the language, he told Corcoran and Cohen in their frequent meetings, the easier it would be for him, a very persuasive advocate, to get the measure passed. Black introduced the bill in the Senate on May 27, 1937, and William P. Connery of Massachusetts brought it before the House. The bill provided for a forty cents per hour minimum wage, a forty-hour maximum workweek and a minimum working age of sixteen in interstate commerce except in certain industries outside of mining and manufacturing.

The bill's scope appalled conservatives, but the most strident opposition came from Southerners who wanted to maintain the "regional pay differential" that enabled Southern employers to pay lower wages than other areas of the country.

In late July of 1937 the Senate Labor and Education Committee unanimously, including the one Republican present, approved the bill. The powers of the proposed board were sharply curbed and different fields were exempted—agriculture, fishing and forestry, cannery workers, handlers of perishable foods, intrastate retail businesses, most transportation workers, and government employees. But there were no regional differentials on wages.

ENTANGLED IN THE HOUSE

The House Labor Committee passed the bill in early August, and it would have easily passed the House as a whole, but a coalition of Republicans and conservative Democrats stalled it in the Rules Committee. At one point not enough Democrats showed up to make a caucus official. Conservative groups teamed with Republicans and some labor leaders to try to bottle the measure—"bad medicine for us," a spokesman for the American Federation of Labor called it, even after work covered by collective bargaining was excluded.

Roosevelt called a special session of Congress in November of 1937 to force the House to consider it, and it reached the floor in December, only to see the House as a whole vote to send it back to the Rules Committee. Over-all, members of Congress had proposed seventy-two amendments to weaken the bill. In April of 1938 the House Labor Committee passed a new version, but since it lacked a wage differential, Southerners again buried the bill in the Rules Committee. It seemed unlikely that it would ever become law.

PASSAGE

In early May of 1938 Florida's Senator Claude Pepper, basing his campaign on the wages-hours bill, decisively won the Democratic primary for re–nomination. This "put the fear of God in the hearts of some of the Democrats," one Republican congressman noted. Three days later, the rules committee sent the bill to the floor after a discharge petition gained the necessary 218 signatures in only two hours and twenty minutes as members of Congress jostled each other in a boisterous atmosphere on the floor. The House overwhelmingly passed the bill late that month, and on June 25, 1938, Roosevelt signed a compromise worked out with the Senate.

The Fair Labor Standards Act put the minimum wage at 25 cents an hour, below the rate then in effect in most union contracts, and the maximum workweek at forty-four hours for the first year of the act, forty-two for the second year, and forty hours thereafter, and it allowed seven years to reach the standards of a forty-cent minimum wage and forty-hour maximum work week. By 1943 all workers were covered by the forty-cent minimum. Advisory wage boards, under the authority of a newly established wage-hour division of the Labor Department, could consider but not be bound by "competitive conditions as affected by transportation, living, and production costs," and they have the authority to recommend higher levels. The act requires pay at the rate of time and one-half the regular rate for over forty hours worked in one week. And it forbids child labor, defined as the interstate shipment of goods made by firms that employed children under the age of sixteen, or children under eighteen in hazardous occupations. Initially, the law applied to industries whose employees combined represented about one-fifth of all workers.

THE SUPREME COURT UPHOLDS

The Supreme Court upheld the law's constitutionality in U.S. v. Darby in 1941. "The power of interstate commerce," Justice Harlan F. Stone wrote for a unanimous court, "is 'complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the Constitution.'" In 1942 in A.B. Kirschbaum v. Walling, the Supreme Court sustained the application of the act to employees who were not engaged in production for interstate commerce but operated a loft whose tenants produced garments for sale in interstate commerce. Subsequently, the court ruled that the law applied to a night watchman in a veneer plant, to window cleaners and to porters, elevator operators, and other employees of an office building, and in 1968 to nonprofessional employees of state-operated schools and hospitals.

EXPANDING COVERAGE

The original statute covered only workers "engaged in commerce or in the production of goods for commerce." Under this language, one of two employees hired by the same firm, performing essentially the same work, might be protected while the other would not be. These anomalies were ended in 1961 by extending coverage to all those "employed by an enterprise engaged in commerce or in the production of goods for commerce." Much litigation nevertheless continues to involve coverage issues, often focusing on the definition of "enterprise" or exemptions from coverage. Coverage of public employees has also been challenged before the Supreme Court. As of 2003, the statute protected employees of state governments, but whether they can enforce their rights depends upon whether the state has waived sovereign immunity. For private sector employees there can be enforcement by the federal Labor Department or by private rights of action. The law also regulates wages of employees who work for firms that provide goods and services to the federal government.

Over the years the Fair Labor Standards Act has been amended repeatedly. Changes have included raising the minimum wage, expanding the classes of workers covered, redefining regular-time work and raising over-time payments so as to encourage the hiring of new workers, and equalizing pay scales for men and women. Amendments have also provided more effective enforcement. Amendments in 1966 extended the Act to workers in the retail and service industry, farm workers, government and transit employees, and restaurant, hotel, and domestic workers. Some job categories had a lower minimum wage, and it was not until 1978 that all employees covered by the act earned the same rate. In 1997 a sub-minimum wage of $4.25 was established for employees under the age of twenty for their first ninety days of employment. At the same time the minimum wage was raised to $5.15. States can set a wage higher than the federal minimum, and upwards of a dozen have.

"THE MOST VITAL LEGISLATION"

The Fair Labor Standards Act has been called "the most vital social legislation" in American history because it affects every worker in interstate commerce. Since its principal goal was to increase the purchasing power of the lowest-paid workers, it has also been called the original anti-poverty law. Another byproduct has been to help society maintain a healthy balance between work and the rest of life. The act's impact has eroded somewhat as more Americans have moved into professional and other employment categories, such as executive and administrative, that are exempt from wage regulations. It does not cover approximately 50 million of the current 150 million workers. In 2003 strong union opposition in the House of Representatives doomed the passage of the Family Time Flexibility Act, which would have allowed employees the option of receiving overtime pay in the form of time off. This typifies continual attempts to change aspects of the law, but the Fair Labor Standards Act remains a major part of the American economic landscape.

See also: Keating-Owen Act of 1916 ; National Industry Recovery Act .

BIBLIOGRAPHY

Grossman, Jonathan, "Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum Wage." Monthly Labor Review (June 1978).

Lash, Joseph P. Dealers and Dreamers: A New Look at the New Deal. New York: Doubleday, 1988.

Lasser, William. Benjamin V. Cohen: Architect of the New Deal. New Haven, CT: Yale University Press, 2002.

Newman, Roger K. Hugo Black: A Biography. New York: Pantheon, 1994.

Samuel, Howard D. "Troubled Passage: The Labor Movement and the Fair Labor Standards Act." Monthly Labor Review (December 2000).