ESA-8

Activity 1. IMPROVING AND PROTECTING WAGES

(1973, $27,439,000, Pos. 1,455; 1974, $24,833,000, Pos. 1,292)

Narrative Description of Program

This activity of the Employment Standards Administration (ESA) provides for the administration of the minimum wage, overtime, and child-labor standards of the Fair Labor Standards Act, the Service Contract Act, the Davis -Bacon and Related Acts, the Contract Work Hours and Safety Standards Act, the Walsh-Healey Public Contracts Act, Title III of the Consumer Credit Protection Act, and the crew leader certification and enforcement provisions of the Farm Labor Contractor Registration Act.

In 1972, direct enforcement efforts continued to be directed toward the improvement and protection of the earnings of the low-wage worker. ESA utilizes the extent to which enforcement activities are reaching these working poor as one measure of program effectiveness. Low-wage employees, classified under the standards established by the Bureau of Labor Statistics, continued to be helped the most and they accounted for approximately 87 percent of the employees found underpaid.

In our efforts to eliminate unfair competition and substandard employment conditions, more than 68,000 compliance actions were conducted and over 550,000 employment standard violations were disclosed. In the overwhelming majority of cases, compliance was achieved without litigation. However, where such efforts failed, legal action was taken. During the year, the Solicitor's Office considered for legal action a total of 3,986 cases and filed 1,653 actions.

Compliance and enforcement procedures were modified. During the year, the use of less formal investigation procedures became standard. Many situations which in the past would have prompted full-scale investigations were handled by short-cut procedures, conciliation-type actions or by other compliance activity tailored to meet local or individual enforcement needs. These changes were designed not only to make operations more efficient but also to reduce the burden on employers.

Voluntary compliance efforts continued through the use of technical assistance to firms participating in self-audit programs. Efforts to gain voluntary compliance in State and local schools and hospitals also continued, with nearly 130,000 employees known to have been paid about $16 million in back wages as a result of these efforts.

Steps were undertaken to improve the accuracy of and simplify the procedures for making and issuing Davis -Bacon wage determinations. Increased decentralization of the program including utilization of ESA compliance officers as necessary resulted in greater accuracy and more responsive service to contracting agencies.

The first year of the experimental Work Experience and Career Exploration Program (WECEP) which was designed to develop and test standards for certain types of school-work programs, was completed. This program is expected to be a major factor in efforts to make truly meaningful and productive the transition from school to work for youth. Currently State and local school officials and employers in 250 cities in ten States are actively involved in WECEP, helping 8,202 youngsters in 474 units.

In the area of special minimum wage standards, certificates issued authorized the employment of 176,000 workers at wages below the applicable minimum under the Fair Labor Standards Act. This is a thirteen percent increase in authorized employment over 1971, almost all of which is accounted for by the employment of handicapped workers in sheltered workshops and in commercial industries. Minimum wage hearings were held on 15 of the industries in Puerto Rico and for industries in the Virgin Islands. Based on hearings which were held during the year, the minimum wage for about one-third of the occupational classifications reviewed was brought up to the mainland minimum rate.

ESA-9

In 1973, ESA inaugurated a system of program planning on a project basis. The system centers on the identification of high priority, non-compliance projects and the utilization of the most effective and least time-consuming compliance technique to bring about compliance with the law. Increasing reliance is being placed on employer-assisted compliance efforts, which are designed to reduce the amount of Federal effort required while assuring that the rights of all affected employees are protected and that future compliance has been obtained. The placement of emphasis on such time-saving techniques has enabled ESA to conduct more enforcement actions (about 35 percent more) than would have been possible had we continued with the pattern of enforcement prevailing in Fiscal Year 1972. This should enable ESA to more effectively service the 38,000 complaints we expect to receive and to bring assistance to other workers who either do not know how to complain or are afraid to do so. The drop in program accomplishment that is shown for Fiscal Year 1973 in the accompanying table has been commensurate with the decline in available compliance officer time. This decline has occurred as a result of a lower level of compliance resources available because of the substantial diversion of compliance officer time in support of the Department's Labor Management Services Administration-United Mine Worker effort. The thrust of the ESA compliance program will continue to be to serve the "working poor" and where possible to create additional employment opportunities through obtaining compliance with overtime pay standards.

ESA's wage determination program assumed additional responsibility as a result of passage of the Service Contract Act Amendments and the State and Local Fiscal Assistance Act (Revenue Sharing). The Davis-Bacon requirements of the Revenue Sharing Act are expected to require about a 10 percent increase in work load or an additional 2,000 wage determinations annually. The 1972 amendments to the Service Contract Act are having a significant impact on that program, requiring at least an additional 1,300 wage determinations, or a 75 percent increase to 3,000 wage determinations in the first year alone. Moreover, substantial work will be required in cases in which there has been a call for a public hearing to determine whether the wage and fringe benefits provisions of a collective bargaining agree ment are "substantially at variance" with prevailing rates in the locality. Efforts are being made to meet these additional requirements in order to ensure that there is no impediment to the Federal procurement process.

Two of the ten States which applied have qualified for exemption from the wage garnishment provisions of the Consumer Credit Protection Act. ESA is providing continuing technical assistance to interested States and additional States are expected to qualify.

The amount of employment authorized by special wage certificates is expected to rise to about 200,000, with handicapped workers accounting for most of the increase. Biennial minimum wage hearings will begin on selected industries in Puerto Rico, the Virgin Islands and American Samoa.

Special posters and leaflets in both English and Spanish explaining the law as it pertains to migrant children in agriculture are being widely distributed. continuing evaluation of child labor standards is being made to keep enforcement efforts responsive to the current needs for such standards.

A

During the year, the Secretary of Labor redelegated certification and enforcement responsibilities of the Farm Labor Contractor Registration Act of 1963 from the Manpower Administration to ESA. Plans call for increased information and education efforts in addition to the utilization of ESA's staff of experienced compliance officers. Enforcement efforts will be directed to the servicing of complaints and the making of concurrent investigations under the Farm Labor Contractor program and the Fair Labor Standards Act.

In 1974, it is planned to increase enforcement capability through the increased utilization of the compliance techniques emphasized in 1973. With this increased capability it is planned to realize some improvement in overall program accomplishment.