A large number of members of the association specialize in work required by railroads, such as erection and repair of buildings, bridges, retaining walls, embankments, and other structures; excavations, grading, laying and repairing of track; supplying of stone and gravel for ballast, and other work. Little benefit to contractors' employees under acts On behalf of its members who perform work for railroads, the association recommends that certain words now in S. 293 be deleted, and certain other amendments be made so that the bill will not bring under coverage of the Railroad Retirement Acts the employees of construction contractors performing work for railroads. This is recommended, first, because it is doubtful if many workers of construction contractors would receive any substantial benefits from such coverage as would accrue to regular employees of railroads. The type of work a construction contractor performs for a railroad is intermittent, in many sections of the country seasonal, would be scattered in many localities, and with the exception of a few superintendents and foremen, would offer little continuity of employment to the worker. Contractors' employees are protected by workmen's compensation insurance regulations and by social-security laws, and additional payments under the Railroad Retirement Acts would constitute dual assessments with little advantage to the worker. Bill would tend to abolish use of contractors by railroads For many years the railroads have found that it is most efficient and economical to have their construction, and many of their maintenance and repair operations executed by general contractors who have become experts at this type of work and who maintain the expensive equipment and facilities necessary. If S. 293 were adopted in its present form, the effect would be to discourage the use of construction contractors for railroad work. This would deprive large numbers of construction workers of employment. And hundreds of contractors who have executed this type of work for years, and have substantial investments in necessary equipment, would be deprived of a large segment of their markets. Testimony similar to this was presented to the House Committee on Interstate and Foreign Commerce. Our understanding is that the House committee intends to make suitable amendments to exempt employees of construction contractors from coverage of the acts. The amendments The following amendments are prepared for the purpose of preserving the present status of independent construction contractors and their employees who perform operations for railroads, in their relation with the railroads and railroad employees: Page 3, line 3, strike out the word "way" and the words "or structures." Page 3, lines 10 to 12, inclusive, strike out the following: "which through any form of property interest, is directly or indirectly subject to control by or to common control with a carrier," and substitute therefor: "which is directly or indirectly owned or controlled by one or more carriers or under common control therewith." Page 6, line 15, strike out the words "the Board finds that". Page 6, line 21, strike out the words "the Board finds that". Page 6, lines 24 to 25, inclusive, strike out: "does not, pursuant to clause (ii) find that the employer activities of such person are" and substitute therefor: "the employer activities of such person are not". Page 7, line 5, strike out the words "perform work" and substitute therefor: "carry on employer activities." Page 8, line 4, strike out the words "the Board finds that". Page 8, line 8, strike out the words "the Board finds that". Page 8, lines 19 to 22, inclusive, strike out: "or he is rendering, on the property used in the employer's operations, other personal services the rendition of which is integrated into the employer's operations,". Hon. EDWIN C. JOHNSON, INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, Chairman, Subcommittee on Interstate Commerce, United States Senate, Washington, D. C. DEAR SENATOR JOHNSON: In connection with S. 293, I am enclosing herewith copy of our brief, which I would appreciate being considered by your subcommittee. Sincerely yours, JOSEPH P. RYAN, International President. This brief is submitted by me as president of the International Longshoremen's Association, in order to make known to the committee members and Senate our position on that part of S. 293, which proposes to extend the coverage of the Railroad Retirement Act and Railroad Unemployment Insurance Act. S. 293 is entitled "A bill to amend the Railroad Retirement Acts, the Railroad Unemployment Act * *," etc. This proposed, amended bill contains provisions which by their express language and by constructions or interpretations which can be made of that language would include every firm which performs any kind of service "with respect to passengers or property transported by railroads, at point of departure or shipment or at destination or between such points;". This language is contained in the proposed bill itself. That language includes within the act's coverage not only those who are actually in the employ of railroads or of companies owned or controlled by railroads but anyone or any company which performs any kind of service for any railroad. The members of the International Longshoremen's Association work for all kinds of employers who perform services both for railroads and for others not connected with railroads. A large number of our members work as longshoremen in loading and unloading boats and vessels at various ports on the Atlantic seaboard and on the Great Lakes and Gulf of Mexico. In connection with that work the companies which employ our members load and unload freight to and from liners and floats which serve the railroads. Indeed, in the shipment of freight, railroads, and vessels are both used as part of the same shipment. There fore the companies which perform that type of service and our members who work for those companies would most likely come within the language of the proposed act which includes any person "engaged in performing services necessary or incidental to the conduct of the transportation carried on by such carrier, * * or services in connection with the storage, elevation, or handling of property transported, * In addition to that type of freight handling our members are very often engaged in the work of loading and unloading freight cars. This is another type of work which comes within the express coverage of the proposed amendment. The bill therefore can be construed to cover every type of employment in which our members are engaged at some time or other, and it would include not only companies which are directed or controlled by railroads, and their employees, but independent contractors which perform freight loading and unloading services in connection with the transportation of goods and materials, and their employees. At the same time that some of our members are doing this type of work there are other members of our union who may be working alongside of these employees on the very same pier, in many instances, doing work for employers who are not performing and service for the railroad companies or in connection with the transportation of goods and materials. Our members very often shift from one employer to the other so that at certain times they are working for employers engaged in performing services for railroads, who incidentally would be subject to the coverage of the new act, and for other employers who are not engaged in performing such services and who would not be subject to the coverage of the amended bill. Therefore our members would at various times be subject to different withholding taxes during different periods of their employment by different employers. When working for noncovered employers or in a noncovered operation they would be subject, as they now are, only to a deduction of 1 percent from their wages for social-security benefits. (In some States, they would have to pay an additional 1 percent as a contribution to the unemployment-insurance fund.) Under the new act, they would be subject to a withholding of 54 percent for We would find it extremely difficontributions required by the amended bill. cult to explain to our members the reason for these two different rates of deduction and we would also find it difficult to explain the necessity for a large deduction made while working for one employer whereas there is only a small deduction while they work for another. Many of these employees would not get the benefits of the Railroad Retirement Act or Railroad Unemployment Act and they would consider these large deductions as a wage reduction. It is apparent that this will result in difficulty and in a great deal of confusion in determining whether the same employee at different times is subject to the Federal socialsecurity law or the Railroad Retirement and Railroad Unemployment Insurance Act, or any other State unemployment-insurance act. We might also find it extremely difficult to induce our members to work for employers who perform services for railroads, while as such employees, they would be subject to a withholding deduction of 534 percent, whereas their brother members who might be working for another employer alongside of them on the very same pier would only be subject to a deduction of 1 percent. The act should exclude all companies which rendered services for the railroads but which were not owned by the railroads before 1937, the date of the passage of the Railroad Retirement Act. In this way we can be sure that the railroads will not try to exclude from the coverage of the act its employees by either creating new companies or by having others create new companies to do the work which the railroad companies did or which the companies which were owned by the railroads did. Respectfully submitted. Hon. EDWIN C. JOHNSON, JOSEPH P. RYAN, International President. READING Co., Philadelphia 1, Pa., July 26, 1945. Chairman, Committee on Interstate Commerce, United States Senate, Washington, D. C. MY DEAR SENATOR JOHNSON: It was a pleasure to appear before your committee yesterday in behalf of the class I railroads and discuss the provisions of Senate bill 293. Unfortunately, the limited time did not afford an opportunity to discuss fully with your committee, questions which may have arisen in connection with my testimony. At the bottom of page 5 of the mimeographed copy of my testimony furnished to the committee, and to the stenographer, it was stated that the tax rates supporting the Railroad Retirement Act of 1937 were determined by two actuarial studies to be too low and would not meet requirements of the law in normal times. Therefore the railroads thought that the first step is to meet the requirements of the Retirement Act of 1937. If the tax rates are not high enough to insure the solvency of the pension funds, the rates should be increased. In connection with the above statement, you asked me whether the proposed bill did not provide for such increased tax rates, and if we were in agreement with that, and I replied we agreed the rates must be increased to make the present Pension Act actuarily sound but that this was only one feature of the bill. There followed some discussion as to the percentage increases in the tax rates provided for this purpose in the new bill, and had the time permitted, I would have liked to have elaborated on the views as expressed on this point in the first full paragraph on page 22 of the mimeographed copy of my testimony, which suggests a conference between management and men, and an actuarial study made by a competent, unbiased authority. The advice of the Treasury Department, the Budget Bureau, the Social Security Board, and any other governmental agency which could have thrown light on the subject, would have been sought. It is our opinion the facts could not be secured otherwise. You will recall that Mr. Pelley, president of the Association of American Railroads, discussed this point during his appearance before your committee. He stated that at a conference called by Senator Pat Harrison, chairman of the Senate Finance Committee, to consider the adequacy of the 72-percent rate then agreed upon, Senator Harrison asked what would be done if the rate of taxation proposed for the Carriers' Taxing Act should be insufficient to support the benefits 75978-45-36 provided in the Retirement Act. Mr. Pelley replied that the railroads and the employees would get together and recommend to Congress either raising the tax rates or reducing the benefits as they might agree upon at that time. Mr. George M. Harrison, representing the employees, made a like reply for them. The position assumed throughout my testimony was, that, as the present Retirement Act of 1937 was passed by Congress upon the joint recommendation of representatives of the railroads and their employees, any changes submitted to you for your consideration, either in rates to be charged or benefits to be provided, should likewise be given full consideration by the parties affected before such submission. Yours very truly, R. W. BROWN. NEW ORLEANS ASSOCIATION OF COMMERCE, Hon. EDWIN C. JOHNSON, DEAR SENATOR JOHNSON: It is our understanding that your committee is now considering Senate bill 293, which seeks to amend the Railroad Unemployment Insurance Act and subchapter B of chapter 9 of the Internal Revenue Code. The subject matter of this bill was given consideration by our national legislantion committee in behalf of the business interests of New Orleans and they were unanimous in their opposition to it for the following reasons. The definitions in the proposed legislation are extremely vague and would cover many organizations not engaged in interstate transportation, but who render services in connection with goods, materials, and equipment so handled. The concerns in question are purely local in character and are presently and adequately covered by other Federal statutes. An extension of the terms of the Railroad Transportation Act to cover their businesses would be unwarranted, unnecessary, and illogical. For instance, the definitions of the bill are so broad in scope and so indefinite that they could be interpreted to include public warehouses, manufacturers who warehouse their own products, ice manufacturers selling ice or precooling services for refrigerator cars, contractors performing services to railroads on railroad property, drayage and unloading contractors at ports who unload and handle freight to and from wharves, etc. We are confident the proponents of this measure did not visualize the confusion and discrimination which would result from its enactment in its present form and will be willing to amend it so that it will restrict its operations strictly to railroads and similar interstate carriers covered in the present act, which will clearly remove from its provisions local organizations such as those described above who only perform services in their respective communities in connection with the interstate movement of commodities. May we ask your cooperation in having the bill amended to eliminate the objections which we have enumerated? |