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The next meeting of the Sheltered Workshop Advisory Committee, Wage and Hour Division, United States Department of Labor will be held January 11th, 1940 at which time it is expected permanent regulations governing Sheltered Workshops under the Act will be drafted.

In the meantime questions from the field make it wise to review the experience thus far. The purpose of the Act is to provide a floor for wages and a ceiling for hours. The Act applies to workers engaged in inter-state commerce or in the production of goods for inter-state commerce. The Act became effective October 24th, 1938 at which time the minimum wage rate was 25cts an hour and the maximum hours 44 per week. Effective October 24th,1939 the minimum rate was raised to 30cts an hour and the maximum hours reduced to 42. On October 24th, 1940 the maximum hours will be reduced to 40 per week and on October 24th, 1945 the minimum rate will become 40cts per hour.

The Act does not exempt Sheltered Workshops, but there is a definite provision that the Administrator may issue certificates of exemption for particular individuals whose earning capacity is impaired by age or physical or mental deficiency or injury.

Temporary Exemption

Sheltered Workshops generally have been operating under a temporary certificate of exemption which provides that Sheltered Workshops as defined by the Administrator may permit persons to work at wages less than the minimum providing their earning capacity was impaired by age or physical or mental deficiency or injury. There is no mention made in the temporary exemption of any difference in hours to be worked or of persons whose earning capacity was not impaired as just noted.

Sheltered Workshop leaders who are members of the committee have consistently stated that they did not believe that Sheltered Workshops were intended to be included under the Act, but that Sheltered Workshops indeed wanted to cooperate with the Administration attempting to improve working conditions for all persons. The Wage and Hour Administration assumes that Sheltered Workshops are covered by the Act if they are engaged in inter-state commerce. Their definition of inter-state commerce incidentally is very broad.

Wages

Wages as defined by the Act includes the reasonable cost of furnishing workers with board, lodging or other facilities in addition to cash which may be paid. Thus definite services rendered to Goodwill workers as a group might be counted as part of the wages paid to the total group and be reflected in basic amount recognized as the hourly rate. Facilities furnished however, are not intended to include any general community social service programs but simply that type of service or activity which contributes to the rehabilitation of the actual individuals employed within Goodwill Industries.

There are many problems being faced both by the Wage and Hour Administration and by the Sheltered Workshop members of the Advisory Committee. It appears to your Executive Secretary that there may be a way of providing permanent exemption to our Goodwill Industries not only under the general provision of exemption for handicapped workers through a Special certificate issued to Sheltered Workshops but also under the provision of the Act which provides general exemption for "any employee engaged in any retail or service establishment the greater part of whose sailing or servicing is in intra-state commerce". Goodwill Industries secures and process their materials in the state in which they serve, and for the most sell them in the same state. Goodwill Industries are in a very real sense retail establishments and the greater part of their business is definitely within the state in which they are organized and in which they carry on their major operations.

We are emphasizing, therefore, as we move toward the drafting of the permanent regulation, the fact that Goodwill Industries are anxious to cooperate to the fullest extent with the Wage and Hour Administration but that Goodwill Industries are social service agencies and it would appear were not intended to be covered by the Act. Further, that if the approach is from the material point of view they are exempt under the provision that retail establishments are not covered by the Act.

Goodwill Minimums

Incidentally, the National Institute of Goodwill Industries several years ago established 25cts per hour as the recognized minimum rate in Goodwill Industries and more recently raised the goal for minimum wages to 30cts per hour. It is our observation that Goodwill Industries over the country as rapidly as they can develop resources through the increasing sales of products and increasing cash donations for wage subsidies are increasing wages to the 25 and then to the 30cts minimum. It is our conviction, however, that rehabilitation and social service agencies should not be restricted by labor regulations. The relationship between the organization serving and the persons being served is not essentially that of employer and employee but rather of Social Agency and client.