The Waterbury Democrat., 1943-01-05

the penalties that every worker and every boss will want to think twice before taking or paying out one cent of wages or salaries above the established ceilings, unless he first gets approval for wage increases from the War Labor Board, or un- less he first gets authorization for salary increases from the Salary Stabilization Unit of the Bureau of Internal Revenue.
 If you as an employe take an un- authorized wage increase in willful violation of the regulations, and if you are tried and convicted, you can be fined $1000 or given year in prison.
 If as an employer you pay lln- authorized wage or salary increases, you also are subject to this $1000- or-one-year penalty, and in addi- tion there is an even more drastic punishment to be meted out-prob- ably the most severe enforcement provision ever written in any gov- ernment order.
 HOW IT WORKS
 It is intended to work something like this:
 Suppose the War Labor Board or the Salary Stabilization Unit dis covers that you have violated their regulations by granting llnauthor- ized pay increases. As you know, money paid out as wages in any business are deductible items on the employers income tax return. But if it is discovered that you have paid out unauthorized wage in- creaSes, this fact will then be cer- tifled to the Bureau of Internal Revenue. The Bureau will then disallow as a legitimate income tax deduction not only the amount of the unauthorized increases you have paid, but also-and get this-the Bureau will disallow the entire amount of yous payroll.
 Example: The International Gadget Co., Inc, has 30 employees averaging $500 year apiece, or a total annual payroll of $4G 600. Sup pose it grants an unauthorized wage increase of $1 week for &ll its 30 employees. That's a total annual wage increase of $1560.
 When this unauthorized in crease is reported to the Bureau of In- ternal Revenue, the Bureau will dis allow as an income tax deduction not only the $1660 in increases, but the $45. .O00 total payroll as well, and International Gadget would then have to pay income taxese on this extra $45, 5,56O as well as on it's regu- lar income normally subject to taxation.
 Here's another situation that will interest employers. Suppose an em- ployer gets authorization from a re- gional director to grant an increase in wages, then the War Labor Board, reviewing the case, decides that the increase should not have been granted. But the employer has already been paying the in- creases under authority from the regional director-what then? The War Labor Board will order the employer to stop paying the in- creases, and hell have to stop, and his employees will have to like it. The employer, however, can't get bOCA 44OAAA AAAO CAAARAOJSO sSAS SA~S%N1 lowed increases he has already paid out.
 COVER NEW EMPLOYES
 All these restrictions end penal ties on increases even cover the hiring of new employees at. higher than prevailing rates. If the ABC Polishing Company has been pay ing apple polishers $1 an hour, it can't hire apple polishers away from the XYZ Company at $1.20 an hour. Or if the ABC Company ex- pands its operations and opens a branch to polish flngernails or bald heads, it cannot pay more than the prevailing wage rate for fingernail or bald head polishers in that area.
 This regulation is designed, of course, to prevent labor pirating. It also prevents workers from job shopping, going from one employer to another and forcing employers to bid against each other for the serv- ices of workmen.