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12. In order to make this possible the regulation further provides for special methods of reporting and indicates the type of information that must be kept available in Sheltered Workshops.

13. The special certificate issued to Sheltered Workshops to permit them to employ handicapped persons at sub-minimum rates does not apply to persons that are not handicapped, nor does it apply to vocationally able and otherwise competent handicapped persons. It likewise does not contain any special exemption in connection with maximum hours. The maximum hours indicated by the Act must be observed by the Sheltered Workshops. Incidentally your executive secretary has been constantly directing attention of the Administration to the fact that the Goodwill Industries so far as their transportation departments are concerned are definitely a seasonal activity and while an average of the maximum of 42 hours per week could be observed very well by Goodwill Industries it will be extremely difficult to observe the maximum hours in the peak house cleaning season. It is hoped that some special arrangement to cover this situation may be worked out, but at the present time there is none and Goodwill Industries must observe the maximum hours in connection with activities that may be interpreted to be in interstate commerce.

14. The question has been raised by a number of Goodwill executives as to whether Goodwill Industries were in interstate commerce. For the most part materials are collected within the state, are processed in the state, and are sold direct to the consumer within the state. If such be the case then activities of this nature would appear not to be in interstate commerce, but all Goodwill Industries do handle salvage materials, rags, paper, metal, etc. Thus the handling of this material would appear to be interpreted as being in interstate commerce and all persons from the truck driver and helper through the sorting and handling, to the baling and shipping of such materials might be interpreted to be in interstate commerce.

The general ruling in connection with defining interstate commerce has been that if the persons or firms handling the articles have reason to believe that they may eventually find their way into interstate commerce then they are in interstate commerce. In the instance of salvage, even though it is sold to a broker within the state, who in turn sells it to a mill within the state which manufactures products and sells them to others within the state, then if by chance the latter may possibly ship the products out of the state, then those products manufactured from Goodwill salvage and thus the material handled in Goodwill Industries might be ruled to be inter-state commerce. Thus it will be observed that there may be in every Goodwill Industries some activities that might be interpreted to be in interstate commerce.

15. The question has also been raised by Goodwill Industries leaders as to the definition of handicapped persons. This has been covered in the regulation. A handicapped client is "an individual whose earning capacity is impaired by age or physical or mental deficiency or injury and who is being served in accordance with the recognized rehabilitation program of a Sheltered Workshop." Discussion in the Sheltered Workshop Advisory Committee has indicated that the staff of the Wage and Hour Administration will give consideration to all of the conditions that may impair a persons earning capacity and that while there is no exemption for so called social or moral handicaps, yet if the earning capacity of clients in Sheltered Workshops is impaired by conditions which may have been rather loosely defined as social or moral handicaps, it is possible that such so called social or moral handicaps may have had an effect on mental attitudes and through that effect on mental attitudes have impaired the individuals earning capacity. Thus it will be seen that while not every person who might be defined as handicapped by the Goodwill Industries would be also defined as handicapped by the Wage and Hour Division, yet there is the possibility of having persons whose earning capacity may be definitely limited because of some apparent handicapping condition, given recognition as a client and thus not excluded from service. Unemployment as such, or definite economic handicap is not recognized as a handicap under the Act. Broken morale because of long unemployment may possibly be interpreted as a handicap until such morale has been recovered and the individuals earning capacity restored.

16. Your executive secretary has constantly reminded the Wage and Hour Division that Goodwill Industries do not have control over the kind, quality or quantity of materials donated to the organization. Likewise that they have very little control over the sale price or the income to be secured from the sale of the material. Therefore, Goodwill Industries face some difficulties not faced by other Sheltered Workshops in that their possible resources with which to serve handicapped persons and pay wages is limited by some situations which are in a very real sense beyond their control. This may also be given consideration when establishing the sub-minimum rates to cover Goodwill Industries, but it is perfectly evident that the Administration will also take into consideration management practice when giving consideration to such items as those. The Administration will not permit poor management to be an excuse for lower income which in turn makes it impossible to pay recognized sub-minimum wages.