can you get a raise?
TRANSCRIPT
e*HERBERT S. M I N O T a n d LOUIS ZASLOFF
225 Broac/vvOy> New York 7, U. Y.
Probably. But you'll have to wait while long red tape thaws frozen salaries.
Your boss can turn on the heat and give you a raise sooner if he gives Government the facts in the right w a y
f-pHE function of the Wage Stabilization •*- Program, as set forth by Cyrus S.
Ching, chairman of the Economic Stabilization Agency, is to "discharge its responsibilities under the provisions of the Defense Production Act of 1950. . . (so as ) to stabilize wages, salaries and other compensation. . ." in order to curb the deleterious effects of inflation.
On Jan. 25, 1951, the Wage Stabilization Board commenced to function by-placing every employer, and every employee, in an absolute wage deep freeze. Since then there has been a gradual defrosting. Almost immediately a series of general wage regulations was released covering general, individual, and cost-of-living adjustments. In order to clarify this series of regulations WSB supplemented this stream of paper with brochures covering modifications and interpretations to the wage regulations. ( See "Salary Stabilization Board, GSSR, Stabilization of Salaries and Other Compensation of Persons Employed in Bona Fide Executive, Administrative, Professional, or Outside Salesman Capacities, Not Represented by Labor Organizations" and other regulations and interpretations of SSB.)
How Deep Is My Freeze? Professional employees of chemical and
other industries suffer under the mistaken belief that their employer cannot give them any pay adjustment. A great many employers are equally mistaken in thinking they cannot make a salary adjustment without government consent. As a re
sult of these misconceptions, professional employees are leaving satisfactory jobs to accept other positions that offer better salaries. And their equally7 well satisfied employers are regretfully- allowing them to leave because theyr think it is impossible for them to improve their salary* positions. Much of this reluctant job-hopping can be avoided. The Government does permit certain kinds of salary- adjustments. Lack of knowledge on both sides has largely-been the cause of this unwholesome situation which is costly to trie employee who loses the results of many y-ears of loyal effort and the employer -who loses a valuable experienced employee.
How Is It Done? Because of the enormous complexity of
the problem of freezing 62 million employees in one fell swoop, the Government pulled from its archives the entire stabilization procedure used during World War II. Some refinements, of course, had to be made. In the last war two agencies existed: one to cover rank and file and the other to cover the top group. This program was commenced with one agency—WSB—to cover all employees. Shortly thereafter, from the loth rib there was formed the Salary Stabilization Board which then assumed the full jurisdiction of the so-called top group of employees.
SSB, because of its more restricted coverage, functions only out of Washington, D. C, whereas W S S functions within 13 distinct regions of the United States. Further, because of limited personnel.
WSB uses the Wage and Hour Division of the Department of Labor for initial screening.
To obtain relief from either of the boards it is necessaryr to file an application, with complete factual information on the employees for whom relief is sought and such supplemental information as the applicant feels will adequately establish his right to the relief he seeks. The applications are filed with the Wage and Hour Division of the Labor Department in your region. The Wage and Hour Division, upon receiving these applications, does an initial screening and forwards them to the proper group for final processing and decision.
A large part of the confusion which exists concerning wage and salary regulations arises from the delays caused by the procedures of die respective boards. The time lag between the release of board policies by either the Wage or the Salary Stabilization Boards to the general public often makes the policy statements meaningless by the time it reaches the business organization, in addition, the waiting period between the filing of an application for board approval and the receipt of a ruling is so long as to cause irreparable damage to die employer and his employees. These aforementioned delays are unwarranted and arise solely from the studies and hearings conducted by the administrators ad infinitum. The business man demands a prompt decision for the solution of his immediate problem. He cannot be suspended in a state of un-
1190 C H E M I C A L A N D E N G I N E E R I N G N E W S
*fy<uc <£et a ^cUte? oeitainty with reference to daily requirements in dealing with his employees, while the control boards take many months t o arrive at a decision. All of these failures t o render a prompt service to the business oomniunity and its employees has caused serious dislocations. If the Government were to recognize its own shortcomings, ft would not be subject to the extreme attaeks leveled at the renewal of the whole stabilization program.
THe catalyst for speeding up your application is the proper preparation and ^presentation of the specific wage and salary information adequately describing the problem. A voluminous presentation of information which is not pertinent will not only be disregarded by the processing sections, but may be injurious.
Often the employer is compelled to make ^in adjustment to one or more of his employees under circumstances of compelling urgency. He knows that a wage and salary stabilization law exists. He has heard of the difficulty of obtaining a ruling and of tlie cost of proper professional help.
Me balances these beliefs against the seeming lethargy of the Government in exposing the violator of these laws. He JFeels that the stabilization laws, whatever filiey may be, are a scheme of the politicians to create a large number of bureaucratic jobs. Instead of determining -whether he has a proper legal right to srnake an adjustment without the approval of tHe Government, or even reporting his intent to make an adjustment, he totally -disregards the existence of the law.
Tfiis sort of adjustment is most frequently a violation not because the employer needed the approval of the Gov
ernment to make the adjustment, but because he has failed to inform the Government of his intent to do so or to maintain such records as the Government requires. The employer becomes subject to penalty for no reason other than ignorance.
The same employer with proper understanding and guidance not only could give such adjustments as he may require from • time to time but may in effect improve relations with his employees. The Government by its many regulations is encouraging the employer to use tried, tested, and true methods of wage and salary administration to the benefit of both the employer and employee.
The regulations of both boards do contain various self-administering provisions. Under these sections the employer must assume the responsibility for qualifying under the criteria set forth and, thereafter, must make adjusments strictly in accordance therewith. The record keeping and administrative responsibility of these self-administering sections create a real dilemma for the employer, since he is never certain that he has qualified correctly or that he is administering correctly. In the event that he finds himself in error under these sections, such error may prove costly to his company and to his employees. As a practical matter employers are urged to obtain an advisory opinion from the Wage or Salary Stabilization Board before acting under such" self-administering provisions.
Even though the law says "ignorance is no excuse," here it is indeed a poor investment. From a short range view and for the duration of the stabilization program an employer who ignores the regula-
HLerbert S. Minot, and Louis Zasloff are members of the New York and Federal Bar and associates of
the firm of Minot
Louis Zasloff
& Zasloff. Both are in active practice as labor lawyers. They have widespread experience in administrative law affecting all phases of industry and governm e n t r e l a t i o n s . Their papers and books have been accepted by professional societies. Their law firm has served as special counsel to numerous trade sociations on industry wide problems.
Herbert S. Minot
tions is courting extreme difficulty. The consequence of a violation is the disallowance, not only of the total wage and salary, but also a roll-back of the unauthorized portion of such wage or salary, to the employee or employees involved. The first consequence hits the company financially, since an unauthorized adjustment of only $10 a week given to a $100-a-week employee, may cost the company over $5500 in penalties, or $55,000 for 10 employees similarly involved. The second consequence involves a "roll-back" of the $110 employee to his former $100 status, causing irreparable damage to the employee-employer relationship. In addition this may cause the employee to leave the company. The latter consequence cannot be measured in terms of dollars and cents, since each employee represents a substantial investment in training and overhead cost. Furthermore, this unfavorable publicity is extremely detrimental in the business community. Little need be said as to the difficulty of hiring additional personnel for a company that has been a party to a government-forced roll-back.
All of the foregoing has dealt with the unintentional violator. Where, however, it appears evident that the violations were intentional and in total disregard of the existing laws, the penalities are severe. These cases are dealt with by the Government as criminal prosecution matters. The convicted violator is subject to a penalty of imprisonment of one year or $10,000 fine or both.
Many organizations are currently engaged in the sale of goods or services to the Government directly or indirectly. These companies have a further, separate vulnerability. A violation may result in the loss of all of this business in addition to the foregoing penalties.
While the Government lias not as yet really exposed its fangs, they are there nonetheless. No company desires to be the one to be tire "lamb led to slaughter." The New York Times recently featured a story about the large scale drive now taking place in New York and Xcw Jersey to round up all violators and present them to justice. ·
It's Simple Actually the procedures of the stabiliza
tion boards are so simple and elementary that they present no special difficulty to any employer trying to determine whether or not he requires government approval.
The procedures are logical and based upon management practices that experienced practitioners of industry and labor
V O L U M E 3 0, N O . 1 2 » » M A R C H 2 4, 1 9 5 2 1191
A special panel set up by WSB holds hearings on wage increase for steel workers
relations have always recommended. These procedures arc now the law. It has always been good business for the employer to compensate his employee on the basis of standard methods rather than by a hit or miss method. It has always been good business to evaluate employees b y an objective standard. It has always been good business to keep employees classified within minimum and maximum rate ranges; and to permit the employee to realize that he has an opportunity for advancement based on his achievement. If we accept these truisms the various regulations of the stabilization program are not complicated or detrimental t o the employer or the employee but are often beneficial.
WSB has only one form at present covering every type of relief. Certainly this factor alone establishes simplicity.
In effect SSB says to the employer: "present the facts as you see fit." This is the essence of simplicity. Both boards invite inquiries and applications, and regional and district offices have been provided throughout the land for this purpose. Both boards supply ample literature and material for guidance.
Where Do You Fit?
In a n effort to clarify the jurisdiction of the two boards, they jointly accepted the definitions in the Fair Labor Standards Act of 1938 as amended pursuant to Section 13 (a) (1 ) . This section provides that "any employee employed as a bona fide executive, administrative, professional . . . o r outside salesman . . ." shall be placed under t h e jurisdiction of the SSB. The president and every excutive official of the company is just as frozen with reference to his compensation 'as the professional employee and salesmen in his company—and no more. All other employees were placed under the jurisdiction of the WSB.
The incorrect filing of an application resulting from incorrect jurisdictional facts inevitably results in procedural delays, improper rulings, and other difficulties.
The two boards grant adjustments based upon different criteria and within differ
ent rules. The submission, therefore, of such information which would qualify an employee for an adjustment under the rules of WSB if filed with the SSB will result in a negative ruling.
Each of these boards has been compelled to adopt variations in its rules,^ as the Wage Board deals with large numbers of employees, while the Salary Board with the individual or small group. Any prospective applicant to either board would do well to crystallize the nature of his problem, attempt to locate the particular regulation under which h e feels relief may b e granted, and comply with the board's procedural requirements in connection with such regulation, giving full and adequate information, both on a qualitative and quantitative basis. All of this will increase the probability of success.
If an applicant were to obtain relief from WSB h e would use Form 100 as most recently revised. This form covers every possible type of application and in general terms indicates the information required. However, this does not 'confine the applicant in the extent of his information nor restrict the nature of the proof the applicant can submit to maintain his need for relief. Therefore, the applicant must supply in a supplementary statement all the facts affecting his problem, and the specific type of relief required, in accordance with the particular regulation .covering the relief sought. The approach is most frequently a quantitative approach involving average straight time earnings, rates or rate ranges for groups of employees and other pertinent material gleaned from records of the applicant.
W h e n making an application to the SSB no specific form is required nor does the board actually supply any form. The board suggests that the applicant file a petition in which he succinctly states his problem, the reasons why the SSB should grant him relief, and pursuant to what authority the board may grant such relief. In effect the board says to the applicant: "Tell us how we can legally approve the relief you request and b e certain that you convince us by adequate reasoning that we should act in your behalf."
WSB tends to favor, in review, the ap
plication based on scheduled d a t a that includes job titles, job descriptions, and wage rate ranges for particular payroll periods together with present company procedures. SSB tends to favor an individual or small group case history, consisting of salary and bonus information, plus detailed descriptions of the duties and responsibilities of the individual or small group involved. Both boards, when processing inequity applications, seek comparable wage or salary information. WSB utilizes going wage rates as supplied by the Bureau of Labor Statistics. SSB has no going salary rate information and, therefore, the bu r den is upon the employer to supply such information in his own application. Generally the proof required by WSB refers to payroll records while the proof required by the SSB refers to corporate minutes, data, and written instruments as well as payroll records.
By congressional act in 1938, executive, administrative, professional personnel, and local retail and outside salesmen \yere completely defined under the Fa i r Labor Standards Act publicly known as the Wage-Hour Law. These categories of employees are known as the .exempt group of employees. All other employees are referred to as the nonexempt group. T h e exempt group is t h e group which has been assigned to the SSR, the nonexempt group to the WSB.
The authors have attempted to clarify by simplification the essential characteristics of each group which is adequately illustrated in the "check list of criteria to determine jurisdiction." The reader should carefully examine the chart. He xvil\ probably find that he is within the executive or professional group within t h e jurisdiction of t h e SSB. Very seldom, if ever, will a trained chemist or chemical engineer be included in t h e group of production workers who are under the jurisdiction of the WSB.
W h o Makes Application?
Except in dispute cases, no adjustments may be made in the wages or salaries of employees without the voluntary action or consent of the employer. Where , however, an application b y the employer is being filed to grant adjustments resulting from collective bargaining with a union, such application must b e joint o n the par t of the employer and the union.
Wha t Is Acceptable?
The first general category of relief is permitted as a cost-of-living adjustment Exed at 1 0 % as a quota figure, based upon the payroll of an employer as existent on Jan. 15, 1950, with deductions for all adjustments on a general basis after such date. The next great segment of permissible adjustments is based on merit a n d length of service and may be granted t o groups or individual employees. If an employer had, prior to stabilization, maintained a formal plan of wage and salary administration, then such plan may be continued. Where an employer failed to have such
A N D E N G I N E E R I N G N E W S 1192 C H E M I C A L
Check List of Criteria to Determine Jurisdiction
T Y P E O F JOB COMPENSATION PRIMARY DUTY PRIMARY W O R K
D I S C R E T I O N -N O . OF ARY P O W E R S OR
E M P L O Y E E S R I G H T TO H I R E INDIVIDUAL UNION M E M -SUJPEIIVISEO AND FLRE JUDGMENT BERSHXP
Salary Stabilization Board Jurisdiction Executive
Group A Group Β
Administrative employee
Group A Group Β
3. Professional ployee
Group A
Group Β
4. Technical employee ( Does not have special definition under Fair Labor Standards Act.)
5. Outside salesman
$100 a week Management of com- Less than 2 0 % or more pany or department of time $55 a week or Management of de - Less than 2 0 % more partment or special of time
division
$100 a week Office or nonmanual Less than 2 0 % or more field work of time· $75 a week or Assists executive. Spe- Less than 20% more cial assignments. Spe- of time
cial training, experience, and knowledge
$100 a week Requires advanced Less than 2 0 % or more knowledge relating to of time
science, invention, imagination, or artistic endeavor
S75 a week or Specialized intellectual Less than 20% more learning—requires in- of time
vention, imagination, and talent
Note: This employee is either professional or administrative, depending upon the manner in which he is assigned or appears on the company's organizational chart. If he is assigned to assist executive heads, then he most frequently belongs to the administrative group. If his origin is professional and is assigned to research for the production division heads, then he is most frequently classified as professional
NO specific Customarily away Less than 2 0 % amount from place of business, of time
Function to make sales, get orders and contracts
W a g e Stabilization Board Jurisdiction 6. Inside salesman No specific
amount
7. Office employees No specific amount
8. Warehouse and No specific delivery amount
9. Working foreman No specific amount
10. Production No specific workers amount
Customarily sells within company office only, or "delivery sales" physical route, makes physical delivery and collection Fills normal function of particular job Fills normal function of particular job Fills normal function of particular job Fills normal function of particular job
2 or more Yes 2 or more Yes
No requirement No requirement
No requirement
No requirement
In excess 2 0 %
In excess 2 0 % In excess 2 0 % In excess 2 0 % In excess 2 0 %
of
of
of
of
of
None
None
None
None
None
Not necessary Not necessary
Not necessary
Not necessary
Yes Yes
Yes Yes
Yes
Yes
No No
No No
N o
N o
No UNION A F F I L I A T I O N
Yes Yes
Yes Yes
Yes
Yes
No require- No requirement ment
None
No requirement
None
None
None
None
None None None None
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
actual plan in existence, he must live within the confines of the rules. In tin's case he cannot grant any adjustments unless he obtains previous permission, or reports his intent citing the particular regulations under which he proposes an adjustment. T h e Government, in recognizing that the greatest number of employers prior to stabilization did not have in actual existence a formal plan of wage and salary administration, has recently opened the door under an amendment made to GWR 5 to permit every employer to create a formal plan for wage and salary administration based upon the criteria set forth in the regulation.
Wha t Is a Formal Wage Plan?
Many employers mistakenly believe that they have fully complied with the law and are already operating under a wage and salary schedule. This misapprehension stems from their erroneous conclusion that payroll records constitute a schedule. WSB under G W R 5 as amended sets forth the criteria for a wage and salary schedule. Every employer should test his wage and
salary schedule against these legal requirements. It is suggested by the authors that if this test proves negative, that the employer seek to establish a formal wage and salary schedule and thereby recapture most of his discretionary rights to grant adjustments to his employees.
In Brief
Cost of Living. The so-called 1 0 % cost of living raises are based on a budgetary figure derived from 10% of the total payroll as existent on the payroll week spanning Jan . 15, 1950. Chargeable against it are all general adjustments since such date. The 1 0 % limit does not apply to individual salaries but to the increase in t he total payroll of the company for a given production.
Merit and Length of Service. A company wi th a formal plan of wage and salary administration may make such adjustments as are permissive under their plan within the maximums of the rate ranges; while a company without such formal plan is permitted to grant adjustments not in excess of 6% (as a budgetary figure) of
the current payroll within the calendar year.
Bonuses. Generally only such bonuses as were pa id in the year 1950 may be paid in the same dollar amount in future years except u p to the sum of $40. Bonuses which exceed these limits require approval. SSB, because of the individual nature of the employee under its jurisdiction, has created myriad rules covering approval of proposed bonuses. It is suggested that a problem tinder this category be thoroughly researched under the SSB regulations to determine the propriety of granting a bonus, or an adjustment of a bonus, with or without approval.
Over t ime For SSB Personnel. I n recognition of the fact that many executive and /o r professional employees, particularly in research, are frozen in their particular categories and devote considerable extra time to their company's affairs, SSB is honoring applications submitting a plan of overtime payment for such personnel'. Based upon the required information as set forth in the regulation, past history of the company, and reasons in support of the request, t he board will grant such relief.
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