NAB reports (Jan-Dec 1942)

No blanket or general salary increases are permissible without the approval of either the War Labor Board or the Commissioner of Internal Revenue (Treasury Depart¬ ment) . Individual increases without the approval of either the WLB or the Commissioner of Internal Revenue are per¬ missible, however, when the increases are made as a re¬ sult of : (1) individual promotions or reclassifications, (2) individual merit increases within established salary ranges, (3) operation of an established plan of salary increases based on length of service, (4) increased productivity under incentive plans, or (5) “such other reasons or circumstances as may be presci’ibed in orders, rulings, or regulations, promulgated under the authority of these regulations.” The WLB is to handle salaries under $5,000 except those of bona fide executive, administrative and professional em¬ ployees. These and salaries over $5,000 are to be handled by the Commissioner of Internal Revenue. It can be as¬ sumed that the Wage and Hour definitions of executive, administrative and professional will be applied. We suggest it would be well worth your while to read carefully the text of the order, which follows: TITLE 32— NATIONAL DEFENSE Chapter XVIII — Office of Economic Stabilization Subchapter A — Office of the Director of Economic Stabilization Part 4001 — Wages and Salaries By virtue of the authority vested in the President by the Constitution and the laws of the United States, and par¬ ticularly by the Act of October 2, 1942, entitled “An Act to amend the Emergency Price Control Act of 1942, to aid in preventing inflation, and for other purposes” (Public No. 729, 77th Congress, 2d Session), the following regula¬ tions are hereby promulgated. Sec. 4001.1. Definitions. — -When used in these regula¬ tions, unless otherwise distinctly expressed or manifestly incompatible with the intent thereof — (a) The term “Act” means the Act of October 2, 1942, (Public No. 729, 77th Congress) entitled “An Act to amend the Emergency Price Control Act of 1942, to aid in pre¬ venting inflation, and for other purposes”. (b) The term “Board” means the National War Labor Board created bv Executive Order No. 9017, dated January 12, 1942 (7 F. R. 237). (c) The term “Commissioner” means the Commissioner of Internal Revenue. (d) The term “Code” means the Internal Revenue Code, as amended and supplemented. (e) The term “salary” or “salary payments” means all forms of direct or indirect compensation which is com¬ puted on a weekly, monthly, annual or other comparable basis, except a wage basis, for personal services of an employee irrespective of when rendered, including bonuses, additional compensation, gifts, loans, commissions, fees, and any other remuneration in any form or medium what¬ soever (excluding insurance and pension benefits in a reasonable amount). (f) The term “salary rate” means the rate or other basis at which the salary for any particular work or service is computed either under the terms of a contract or agreement or in conformity with an established custom or usage. (g) The term “wages” or “wage payments” means all forms of direct or indirect compensation which is com¬ puted on an hourly or daily basis, a piece-work basis, or other comparable basis, for personal services of an em¬ ployee irrespective of when rendered, including bonuses, additional compensation, gifts, commissions, loans, fees, and any other remuneration in any form or medium whatsoever (but excluding insurance and pension benefits in a reasonable amount). (h) The term “insurance and pension benefits in a rea¬ sonable amount” means (1) contributions by an employer to an employees’ trust or under an annuity plan which meets the re¬ quirements of section 165(a) of the Code, and (2) amounts paid by an employer on account of premiums on insurance on the life of the employee which amounts ai-e deductible by the employer under section 23(a) of the Code, except that if such amounts are includible in the gross income of the employee under the Code, the amount in respect of each em¬ ployee may not exceed five per cent of the employee’s annual salary or wages determined without the in¬ clusion of insurance and pension benefits. (i) The terms “approval by the Board” and “determina¬ tion by the Board” shall, except as may be otherwise provided in the regulations or orders of the Board, include an approval or determination by an agent of the Board duly authorized to perform such act; and such approval or determination, if subsequently modified or reversed by the Board, shall nevertheless for the purposes of these regulations, be deemed to have been continuously in effect from its original date until the first day of the payroll period immediately following the reversal or modification or until such later date as the Board may direct. (j) The terms “approval by the Commissioner” and “determination by the Commissioner” shall, except as may be otherwise provided in regulations prescribed by the Commissioner, include an approval or determination by an agent of the Commissioner duly authorized to perform such act; and such approval or determination, if subsequently modified or reversed by the Commissioner, shall never¬ theless for the purpose of these regulations, be deemed to have been continuously in effect from its original date until the first day of the payroll period immediately follow¬ ing reversal or modification or until such later date as the Commissioner may direct. Sect. 4001.2. Authority of National IFor Labor Board — The Board shall, subject to the provisions of sections 1, 2, 3, 4, 8, and 9 of Title II of Executive Order No. 9250, of October 3, 1942, have authority to determine whether any — (a) Wage payments, or (b) Salary payments to an employee totaling in amount not in excess of $5,000 per annum where such employee (1) in his relations with his employer is represented by a duly recognized or certified labor organization, or (2) is not employed in a bona fide executive, ad¬ ministrative or professional capacity are made in contravention of the Act, or any rulings, orders or regulations promulgated thereunder. Any such determination by the Board, made under rulings and' order issued by it, that a payment is in contravention of the Act, or any rulings, orders, or regulations promulgated thereunder, shall be conclusive upon all Executive Depart¬ ments and agencies of the Government in determining the costs or expenses of any employer for the purpose of any law or regulation, either heretofore or hereafter enacted or promulgated, including the Emergency Price Control Act of 1942 or any maximum price regulation thereof, or for the purpose of calculating deductions under the revenue laws of the United States, or for the purpose of deter¬ mining costs or expenses under any contract made by or on behalf of the United States. Any determination of the Board made pursuant to the authority conferred on it shall be final and shall not be subject to review by The Tax Court of the United States or by any court in any civil proceedings. Sec. 4001.3. Rules, Orders and Regulations of Board — The Board may make such rulings and issue such orders or regulations as it deems necessary to enforce and other¬ wise carry out the provisions of these regulations. Sec. 4001.4. Authority of the Commissioner of Internal Revenue — The Commissioner shall have authority to de¬ termine, under regulations to be prescribed by him with the approval of the Secretary of the Treasury, whether October 30, 1942 — 619