Broadcasting (July - Dec 1942)

Treasury Orders Rigid Salary Freeze Regulations Completed ; Split Jurisdiction Is Clarified REGULATIONS that will guide the Salary Stabilization Unit of the Bureau of Internal Revenue m enforcing the Treasury's pai't of the National Economic Stabilization program were announced last ■week, with indications that salary adjustments will be granted only under exceptional circumstances. "Increases in salary rates will not be approved unless necessary to correct maladjustments or inequalities, or to aid in the effective prosecution of the war," the regulations declare. Increases will be approved, however, in salaries of less than $5,000 per year, when such payments are below the general level existing for the same or comparable work in the local area on Sept. 15, 1942. Split Jurisdiction Salary Stabilization Unit will control all salaries where payments exceed $5,000 per year; where payments are $5,000 or less in cases of individuals who are serving as bona fide executives, administrators or professional employes not represented by labor unions; or where 'agricultural labor' is involved. Jurisdiction in the wage and salary freeze was divided between the Treasury and the War Labor Board by the Executive Order of Oct. 27. The War Labor Board was given power over wages of unskilled workers, union members, and white collar people earning less than $5,000 [Broadcasting, Nov. 9]. The freeze order stated that "executive, administrative and professional" employes under the program would be determined from the definitions in the Fair Labor Standard Act of 1938 [Broadcasting, Nov. 16] . Both the War Labor Board regulations and the Treasury orders have restated the texts of these definitions. In its order last week, the Treasury declared that "employer" shall be interpreted to include organizations ordinarily exempt from income taxes, and also Government agencies. An officer of a corporation, or any member who performs services for compensation shall be considered an employe. Directors, however, shall be exempt provided their services consist only of attending and participating in meetings of the board of directors. Two major topics of the Treasury order were adjustment of salaries, and limitation of incomes above $25,000. All changes in salary rates, whether or not on recommendation of an arbitrator, or on the basis of previous agreement, will have to be approved by the Stabilization Unit, the regulations state. Applications are to be filed at regional offices which the Sta bilization Unit will open in thirteen major cities : New York, Chicago, Detroit, Philadelphia, San Francisco, Los Angeles, Seattle, Washington, Kansas City, Mo., Boston, Cleveland, Atlanta, Dallas. According to the regulations, the burden of justifying a salary increase will rest on the employer seeking such increase. Promises of increases, even though made prior to Oct. 3, 1942, will generally not be considered in determining whether the change is necessary, the Treasury said. Exceptions Listed In certain cases, as provided by the original freeze order, no prior approval will be necessary for individual wage increases, the Treasury pointed out. These are: individual promotions or reclassifications; individual merit increases within established salary rates ranges; operation of an established plan for salary increases based on length of service; increased productivity under incentive plans; operation of a trainee system; and other circumstances that may be prescribed from time to time. "Salary agreements", the Treasury pointed out, need not necessarily be written contracts or agreements, but may be based on salary policy as evidenced by payroll data. The existence of such a policy must be established to the satisfaction of the Commissioner if the increase is challenged, the burden of proof resting on the employers. Bonuses will be permitted under the freeze without prior approval, the Treasury said, if they do not exceed bonuses of previous years. If bonus compensation is based on a fixed percentage of sales and the Only Stamps Today NO COMMERCIALS were to be broadcast on WIBG, Philadelphia, on Dec. 7, anniversary of Pearl Harbor. The day was reserved for War Bond selling, with all commercials used for War Bond and Stamp plugs, and only program credits for sponsors. Station's Housewives' Jackpot program, which usually awards Bonds and Stamps to persons identifying products sponsored on the show, on that day gave prizes to persons describing denomination of War Stamps and Bonds. percentage is not changed, no approval is needed, even though the amount of the bonus increases. Main Requirements The Treasury rules require that: 1. Payments for overtime shall constitute an increase in salary rate, and must be approved; unless such overtime payments are customary, and the rate of payment remains unchanged. 2. Changes in salary rates provided by agreements made before Oct. 3 in cases of salaries of $5,000 or less, and before Oct. 27 in those above $5,000, shall not take effect without approval of the Commissioner. 3. Changes in salary rates resulting from an arbitrator's award are subject to the Commission's approval. 4. Mere change of name or financial structure will not enable a firm to set new salary rates without the Commissioner's approval. The Treasury stated that it intended to fix salaries at approxi mately the level of Sept. 15, 1942, and made no mention of the 15% upward adjustment above the level of Jan. 1, 1941, maximum increase that will be considered by the War Labor Board. "No increase in salary shall result in substantial increases in the level of costs, or furnish the basis either to increase price ceilings of the commodity or the service or to resist otherwise justified reductions in such price ceilings," the order said. Top Salaries Dealing with the $25,000 a year salary limitation, the order said, "the general rule is that no amount of salary may be paid or authorized to be paid to or accrued to the account of an employe or received by him during the calendar year 1943 . . . which, after reduction by Federal taxes on the amount of such salary, computed without regard to other income taxes or without regard to deductions or credits, would exceed $25,000." On this basis, the maximum salary for 1943 would be $67,200, the Treasury said, but several allowances are included to prevent 'hardships.' Regulations provide that with approval of the Commissioner, an amount of salary, in addition to the basic allowance, will be permitted to allow maintainance of "customary contributions to charitable, educational or other organizations". Other allowances vsdll be permitted for insurance payments if they cannot be met "without disposing of assets at a substantial financial loss"; meeting fixed obligations; for certain Federal income taxes previously accrued. The regulations repeated that salaries from multiple sources shall not exceed the $25,000 net limi(Continued on page 50) SALES MANAGERS AND ANNOUNCERS of Pittsburgh area stations carrying Braun Baking Co. programs aired their views of Braun advertising in a recent one-day meeting held in Pittsburgh by the W. E. Long Co., Chicago, agency for the account. Conference, consisting of informal discussions with criticism or suggestions for Braun advertising, was climaxed by a tour through the Braun plant. Present at the meeting were: (reading clockwise) Walt Sickles, WWSW, Pittsburgh; Bob Kaufman, WISR, Butler; Bob Pryor, WMBS, Uniontown; Lew Kay, KQV, Pittsburgh ; John M. Croft, WJPA, Washington; Jimmy Thompson, KQV, Pittsburgh; John Patrick, WHJB, Greensburg; Tom Price, WWSW, Pittsburgh; E. J. Sperry, director of radio, W. E. Long Co., Chicago; E. R. Braun Jr., Braun Baking Co.; Charles Baker, Braun Baking Co,; Frank Lee, WJPA, Washington; Dick Bachman, Ed. Schaughency, Bernie Armstrong, Paul Shannon, KDKA, Pittsburgh; Bob Donley, WCAE, Pittsburgh; Marjorie Thoma, Jack de Roessy, KDKA; Bob Struble, W. E. Long Co. Page 18 • December 7, 1942 BROADCASTING • Broadcast Advertising