Message to the Congress Transmitting Reorganization Plan 2 of 1947.

To the Congress of the United States:

I am transmitting herewith Reorganization Plan No. 2 of 1947, prepared in accordance with the provisions of the Reorganization Act of 1945. The Plan permanently transfers to the Department of Labor the United States Employment Service, which is now in the Department by temporary transfer under authority of Title I of the First War Powers Act. In addition, the Plan effects two other changes in organization to improve the administration of labor functions.

I am deeply interested in the continued development of the Department of Labor. The critical national importance of effective governmental action on labor problems requires proper assignment of responsibility for the administration of Federal labor programs. Such programs should be under the general leadership of the Secretary of Labor, and he should have an adequate organization for this purpose. The provisions of this Plan are directed to this objective.

I have found, after investigation, that each reorganization contained in the Plan is necessary to accomplish one or more of the purposes set forth in section 2(a) of the Reorganization Act of 1945.

UNITED STATES EMPLOYMENT SERVICE

The United States Employment Service was established by the Wagner-Peyser Act in the Department of Labor. Later, by Reorganization Plan No. 1, effective July 1, 1939, it was transferred to the Social Security Board in the Federal Security Agency and administered in conjunction with the unemployment compensation program.

During the war the Employment Service was extensively reorganized. The critical nature of the labor supply problem greatly increased the importance of the Service and compelled the Federal Government to take over the administration of the entire employment office system on a temporary basis.

Soon after the creation of the War Manpower Commission the United States Employment Service was transferred to the Commission, by Executive Order No. 9247 of September 17, 1942, and became the backbone of the Commission's organization and program. When the Commission was terminated shortly after V-J Day, most of its activities, including the United States Employment Service, were shifted by Executive Order No. 9617 to the Department of Labor, the central agency for the performance of Federal labor functions under normal conditions. Both of these transfers were made under authority of Title I of the First War Powers Act. More recently, the Employment Service was returned to its prewar status as a joint Federal-State operation.

The provision of a system of public employment offices is directly related to the major purpose of the Department of Labor. Through the activities of the employment office system the Government has a wide and continuous relationship with workers and employers concerning the basic question of employment- To a rapidly increasing degree, the employment office system has become the central exchange for workers and jobs and the primary national source of information on labor market conditions. In the calendar year 1946, it filled 7,140,000 jobs, and millions of workers used its counsel on employment opportunities and on the choice of occupations.

The Labor Department obviously should continue to play a leading role in the development of the labor market and to participate in the most basic of all labor activities--assisting workers to get jobs and employers to obtain labor. Policies and operations of the Employment Service must be determined in relation to over-all labor standards, labor statistics, labor training and labor law--on all of which the Labor Department is the center of specialized knowledge in the Government. Accordingly, the Reorganization Plan transfers the United States Employment Service to the Department of Labor.

FUNCTIONS OF THE ADMINISTRATOR OF THE WAGE AND HOUR DIVISION

The Plan transfers the functions of the Administrator of the Wage and Hour Division to the Secretary of Labor to be performed subject to his direction and control. The Fair Labor Standards Bill was drafted on the assumption that the Wage and Hour Division would be made an independent establishment. As finally passed, however, the Act placed the Division in the Department of Labor but was entirely silent on the authority of the Secretary over it. As a result, the Secretary has lacked an adequate legal basis for supervising and directing the affairs of the Division, and it has had an ambiguous status in the Department. The transfer effected by the Plan will eliminate uncertainty as to the Secretary's control over the administration of the Wage and Hour Division and will enable him to tie it into the Department more effectively. This in turn will facilitate working out a sound combination of wage and hour, child labor, and related enforcement activities of the Department, and will permit the Secretary to simplify and strengthen the organization of the Department.

COORDINATION OF ADMINISTRATION OF LABOR LAWS ON FEDERAL PUBLIC WORKS CONTRACTS

The Congress has enacted several laws regulating wages and hours of workers employed on Federal public works contracts. The oldest of these are the Eight-Hour Laws fixing a maximum eight-hour day for laborers and mechanics on such projects. More recently the Davis-Bacon Act established the prevailing wage rates for the corresponding classes of workers in the locality as the minimum rates for employees on certain Federal public works contracts and required the Secretary of Labor to determine the prevailing rates. Another measure, the Copeland Act, prohibited the exaction of rebates or "kick-backs" from workers on public works financed by the Federal Government and authorized the Secretary of Labor to prescribe regulations for contractors on such works.

The actual enforcement of these acts rests almost entirely with the Federal agencies entering into the contracts. This is proper since the engineers and inspectors of the contracting agencies are in close touch with the operation of the projects and, in the case of cost plus contracts, the payrolls and accounts of the contractors are examined by the auditors of these agencies.

The enforcement practices of the various contracting agencies, however, differ widely in character and effectiveness. Some agencies have instructed their inspectors thoroughly as to the acts and their enforcement and have adopted procedures for carefully checking the records of the contractors and the operation of the projects to determine compliance with Federal labor laws. On the other hand, some agencies have failed to institute effective enforcement procedures. As a result, enforcement has been very uneven and workers have not had the protection to which they were entitled. With the return to a normal peacetime labor market the danger of violations will be much greater than in recent years.

To correct this situation, the Plan authorizes the Secretary of Labor to coordinate the administration of the acts for the regulation of wages and hours on Federal public works by establishing such standards, regulations, and procedures to govern the enforcement efforts of the contracting agencies, and by making such investigations, as may be necessary to assure consistent enforcement. The Plan does not transfer enforcement operations from the contracting agencies to the Department of Labor as the former can perform the work more economically than the Department because of their close contact with the projects. Rather it assures more uniform and effective action by the contracting agencies.

HARRY S. TRUMAN