May 14, 1947
To the Congress of the United States:
I have today signed H.R. 2157, the Portal-to-Portal Act of 1947. The primary purpose of this Act is to relieve employers and the Government from potential liability for billions of dollars in so-called "portal-to-portal" claims. These claims have emerged since judicial interpretation of the "Wage and Hour Law" raised the possibility that employers might be required to pay back wages for certain activities which in most industries had not previously been considered by either workers or employers to be compensable. I believe that, in the interest of the economic stability of our Nation, it is essential to clarify this matter by statute.
The Portal-to-Portal Act should end this uncertainty with respect to claims of still undetermined magnitude. Current wage negotiations can proceed more readily to a satisfactory conclusion, and businessmen will be able to plan with assurance for full production and price reductions. This will be of real value to labor and management in the maintenance of a continued high level of employment.
I am confident that the purpose of the main provisions of the Act is to eliminate the immense potential liabilities which have arisen as the result of the "portal-to-portal" claims. It is not the purpose of the Act to permit violation of our fundamental wage and hour standards, or to allow a lowering of these standards. This is evident from the findings of the Congress set forth in Section I of the Act as to the need for legislation.
Some doubts have been expressed to me, however, concerning the effects of this legislation upon our wage and hour standards.
Section 2 of the Act relates to existing claims. From my consideration of this Section, I understand it to be the intent of the Congress to meet the problem raised by portal-to-portal claims, but not to invalidate all other existing claims. The plain language of Section 2 of the Act preserves minimum wage and overtime compensation claims based upon activities which were compensable in any amount under contract, custom or practice. Various provisions of the Act such as Sections 3, 9, and 12, would be rendered absurd or unnecessary under any other interpretation. Moreover, a contrary interpretation would raise difficult and grave questions of constitutionality.
As to Section 4, relating to future claims, the legislative history of the Act shows that the Congress intends that the words "principal activities" are to be construed liberally to include any work of consequence performed for the employer, no matter when the work is performed. We should not lose sight of the important requirement under the Act that all "principal activities" must be paid for, regardless of contract, custom, or practice. I am sure the courts will not permit employers to use artificial devices such as the shifting of work to the beginning or the end of the day to avoid liability under the law.
I wish also to refer to the so-called "good faith" provisions of Sections 9 and 10 of the Act. It has been said that they make each employer his own judge of whether or not he has been guilty of a violation. It seems to me that this view fails to take into account the safeguards which are contained in these Sections. The employer must meet an objective test of actual conformity with an administrative ruling or policy. If the employer avails himself of the defense under these Sections, he must bear the burden of proof. He must show that there was affirmative action by an administrative agency and that he relied upon and conformed with such action. He must show further that he acted in good faith in relying upon that administrative action.
Section 11 of the Act gives the Court discretionary authority to waive liquidated damages. Under the language of the Section, however, it continues to be the duty of the court to award liquidated damages unless convinced that the employer has, in good faith, sought to comply with his obligations under the Act. I do not believe this Section will be used to permit employers to engage in violation of the law with impunity.
I am aware that this Act introduces new and possibly ambiguous language, the effects of which can be accurately measured only after interpretation by the Courts. I have therefore instructed the Secretary of Labor to keep me currently informed as to the effects of this Act upon the preservation of wage and hour standards. If those effects prove to be detrimental to the maintenance of fair labor standards for our workers, I shall request the Congress to take prompt remedial action.
The enactment of H.R. 2157 makes necessary additional appropriations for the administration and enforcement of the wage and hour laws. The two-year statute of limitations under this Act will in most cases substantially reduce the period of time within which workers' claims may be asserted under the wage and hour laws. It will be necessary, therefore, to augment the Government's program of inspection and enforcement in order to detect violations early enough to protect workers from undue losses. Other provisions of the Act also place additional responsibilities upon the Department of Labor. I shall submit estimates to the Congress for the necessary appropriations.
Prior to its adjournment last year, the Congress had reached a large measure of agreement as to legislation to increase minimum wage standards. I trust that with the passage of the Portal-to-Portal Act, relieving the business community of a heavy burden of doubt, the Congress will now turn to a re-examination of minimum wage standards.
In enacting the Fair Labor Standards Act of 1938, the Congress declared it to be our national policy to eliminate labor conditions "detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." It has become increasingly evident that the minimum wage of 40 cents an hour established by that Act is far from adequate to meet that national policy. I am convinced that immediate amendment of the Act to provide a minimum of at least 65 cents an hour is necessary. In addition, minimum wage benefits should be extended to many persons not now protected by the law, as I have recommended in previous Messages to the Congress.
I recommend that the Congress take action upon these matters now.
HARRY S. TRUMAN
NOTE: The Portal-to-Portal Act of 1947 is public Law 49, 80th Congress (61 Stat. 84).
May 14, 1947