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99–444 PDF 2017

EXAMINING THE POLICIES AND 

PRIORITIES OF THE 

U.S. DEPARTMENT OF LABOR 

HEARING 

BEFORE THE

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD IN WASHINGTON, DC, MARCH 16, 2016 

Serial No. 114–42 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 

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(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN KLINE, Minnesota, Chairman 

Joe Wilson, South Carolina 

Virginia Foxx, North Carolina 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

Tim Walberg, Michigan 

Matt Salmon, Arizona 

Brett Guthrie, Kentucky 

Todd Rokita, Indiana 

Lou Barletta, Pennsylvania 

Joseph J. Heck, Nevada 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

David Brat, Virginia 

Buddy Carter, Georgia 

Michael D. Bishop, Michigan 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Carlos Curbelo, Florida 

Elise Stefanik, New York 

Rick Allen, Georgia 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Ranking Member 

Rube ́n Hinojosa, Texas 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Pocan, Wisconsin 

Mark Takano, California 

Hakeem S. Jeffries, New York 

Katherine M. Clark, Massachusetts 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Juliane Sullivan, Staff Director 

Denise Forte, Minority Staff Director 

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(III) 

C O N T E N T S 

Page 

Hearing held on March 16, 2016 ............................................................................ 1 

Statement of Members: 

Kline, Hon. John, Chairman, Committee on Education and the Workforce 1 

Prepared statement of ............................................................................... 3 

Scott, Hon. Robert C. ‘‘Bobby’’, Ranking Member, Committee on Education and the Workforce ............................................................................. 4 

Prepared statement of ............................................................................... 7 

Statement of Witnesses: 

Perez, Hon. Thomas E., Secretary, U.S. Department of Labor, Washington, DC ..................................................................................................... 16 

Prepared statement of ............................................................................... 20 

Additional Submissions: 

Questions submitted for the record by: 

Bonamici, Hon. Suzanne, a Representative in Congress from the 

State of Oregon ...................................................................................... 87 

Davis, Hon. Susan A., a Representative in Congress from the State 

of California ............................................................................................ 86 

Foxx, Hon. Virginia, a Representative in Congress from the State 

of North Carolina ................................................................................... 79 

Fudge, Hon. Marcia L., a Representative in Congress from the State 

of Ohio .................................................................................................... 86 

Heck, Hon. Joseph J., a Representative in Congress from the State 

of Nevada ................................................................................................ 83 

Chairman Kline ......................................................................................... 72 

Mr Scott ..................................................................................................... 84 

Stefanik, Hon. Elise, a Representative in Congress from the State 

of New York ............................................................................................ 83 

Walberg, Hon. Tim, a Representative in Congress from the State 

of Michigan ............................................................................................. 80 

Wilson, Hon. Joe, a Representative in Congress from the State of 

South Carolina ....................................................................................... 78 

Secretary Perez responses to questions submitted for the record ................ 89 

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(1) 

EXAMINING THE POLICIES AND PRIORITIES 

OF THE U.S. DEPARTMENT OF LABOR 

Wednesday, March 16, 2016 

U.S. House of Representatives 

Committee on Education and the Workforce 

Washington, D.C. 

The Committee met, pursuant to call, at 10:00 a.m., in Room 

2175 Rayburn House Office Building, Hon. John Kline [chairman 

of the committee] presiding. 

Present: Representatives Kline, Wilson of South Carolina, Foxx, 

Roe, Thompson, Walberg, Salmon, Guthrie, Byrne, Brat, Carter, 

Bishop, Grothman, Curbelo, Stefanik, Allen, Scott, Davis, Courtney, Polis, Sablan, Wilson of Florida, Bonamici, Takano, Clark, and 

DeSaulnier. 

Staff Present: Andrew Banducci, Workforce Policy Counsel; 

Janelle Belland, Coalitions and Members Services Coordinator; Ed 

Gilroy, Director of Workforce Policy; Jessica Goodman, Legislative 

Assistant; Callie Harman, Legislative Assistant; Christie Herman, 

Professional Staff Member; Tyler Hernandez, Press Secretary; 

Nancy Locke, Chief Clerk; Dominique McKay, Deputy Press Secretary; Brian Newell, Communications Director; Krisann Pearce, 

General Counsel; James Redstone, Professional Staff Member; 

Molly McLaughlin Salmi, Deputy Director of Workforce Policy; 

Alissa Strawcutter, Deputy Clerk; Juliane Sullivan, Staff Director; 

Loren Sweatt, Senior Policy Advisor; Olivia Voslow, Staff Assistant; 

Joseph Wheeler, Professional Staff Member; Tylease Alli, Minority 

Clerk/Intern and Fellow Coordinator; Pierce Blue, Minority Labor 

Detailee; Denise Forte, Minority Staff Director; Christine Godinez, 

Minority Staff Assistant; Carolyn Hughes, Minority Senior Labor 

Policy Advisor; Eunice Ikene, Minority Labor Policy Associate; 

Brian Kennedy, Minority General Counsel; Kevin McDermott, Minority Senior Labor Policy Advisor; Richard Miller, Minority Senior 

Labor Policy Advisor; Veronique Pluviose, Minority Civil Rights 

Counsel; Saloni Sharma, Minority Press Assistant; Marni von 

Wilpert, Minority Labor Detailee; and Elizabeth Watson, Minority 

Director of Labor Policy. 

Chairman KLINE. A quorum being present, the Committee on 

Education and the Workforce will come to order. Well, good morning, Mr. Secretary, welcome back. It is always a pleasure to discuss 

with you the policies of the Department of Labor, which impact 

countless workplaces and millions of workers across the country. 

As I have said before, it is the responsibility of this committee to 

CEWDOCROOM with DISTILLER

2 

ensure those policies are being administered in a way that best 

protects the interests of workers and employers and American taxpayers as well. 

This is a responsibility we take seriously, especially at a time 

when many working families and small businesses are still struggling to get by. There is no question that the economy has shown 

signs of modest improvement, and we certainly welcome every new 

job that is created. But, there is also no question that many Americans feel they are slipping further behind in an economy that is not 

meeting its full potential. 

At an event in Raleigh, North Carolina, former President Bill 

Clinton referred to the President’s recent State of the Union Address and said: Millions of people look at that pretty picture of 

America he painted and they cannot find themselves in it to save 

their lives.’’ 

We do not agree on a lot of things but President Clinton has 

rightly summed up the frustration many Americans feel. Month 

after month, we exceed low expectations and that simply is not 

good enough. It is not good enough for the tens of millions of workers still sitting on the side lines, it is not good enough for the nearly 6 million Americans who need full time jobs but can only find 

part time work and it is not good enough for those families whose 

incomes remain flat. 

We need to do better and there are opportunities to do better. 

However, those opportunities will be lost if the Department continues to push an extreme regulatory agenda. For example, we both 

agree that Federal overtime rules need to be changed. The committee has held numerous hearings with witnesses who testify that 

these rules are so convoluted that well-meaning, law-abiding employers often get tied up in red tape and run afoul of the law. 

The overtime rules are also outdated, denying men and women 

the ability to balance work with their personal and family needs. 

We have said repeatedly that we want to partner with the Department in a serious effort to streamline and modernize overtime protections. Unfortunately, the Department is pursuing an approach 

that will do nothing to provide employers with more clarity and 

certainty. To make matters worse, the Department’s proposal will 

actually stifle workplace flexibility and make it harder for lower income Americans to move up the economic ladder. 

These and other consequences will unfold in communities across 

the country, in local retail stores, small businesses, nonprofit organizations, and community colleges. The very places that can least 

afford it will be hit the hardest. 

In addition to overtime, there is also broad, bipartisan agreement 

that we need to strengthen policies governing retirement advice. Of 

course, there are also strong bipartisan concerns with the Department’s fiduciary proposal. As Dr. Roe suggested at a hearing last 

year, if we applied the same regulatory regime on the medical profession, patients would have less access to physicians and the same 

will be true for those seeking retirement advice. Because of the 

rule, many low- and middle-income families will have less access 

to affordable retirement advice and fewer small businesses will 

offer retirement plans. 

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3 

Thanks to the hard work of Dr. Roe and others, there is a bipartisan alternative that would protect access to affordable retirement 

advice and ensure advisors serve their client’s best interests. This 

legislation is a strong foundation to address a shared priority if the 

Department will abandon its flawed partisan proposal. 

Mr. Secretary, I strongly encourage you to take a step back and 

build bipartisan consensus in these and other important areas. The 

Department’s ‘‘my way or the highway approach’’ will not deliver 

the lasting positive change that working families and job creators 

need to move this country forward. The only way to do that is for 

the administration to work with members of Congress, Democrats 

and Republicans. I would also encourage the Department to renew 

its focus where bipartisan consensus has already delivered results 

such as workforce development and multiemployer pensions. 

The President noted recently the importance of providing new 

skills to those searching for work yet the Department has failed to 

implement the Workforce Innovation Opportunity Act in a timely 

manner. A new report by the nonpartisan Government Accountability Office confirms the consequences of the Department’s inaction and we hope the implementation process will conclude without 

further delay. 

Finally, Mr. Secretary, you played an integral role in our efforts 

to reform the multiemployer system. Your continued leadership is 

needed to solidify the gains we have made and to modernize the 

system for future generations of workers and retirees. 

Our success in these areas demonstrates what is possible when 

extreme policies are set aside and we work together in good faith 

toward a common goal. In the coming months, I hope we seize the 

opportunities we have in order to make a real difference in the 

lives of America’s workers and employers. 

We now recognize the ranking member, Mr. Scott, for his opening remarks. 

[The information follows:] 

Prepared Statement of Hon. John Kline, Chairman 

Committee on Education and the Workforce 

Secretary Perez, it is always a pleasure to discuss with you the policies of the Department of Labor, which impact countless workplaces and millions of workers 

across the country. As I’ve said before, it’s the responsibility of this committee to 

ensure those policies are being administered in a way that best protects the interests of workers and employers, and American taxpayers as well. 

This is a responsibility we take seriously, especially at a time when many working 

families and small businesses are still struggling to get by. There is no question the 

economy has shown signs of modest improvement, and we certainly welcome every 

new job that’s created. But there’s also no question many Americans feel they are 

slipping further behind in an economy that isn’t meeting its full potential. 

At an event in Raleigh, North Carolina, former President Bill Clinton referred to 

the president’s recent State of the Union address and said, ‘‘Millions . . . of people 

look at that pretty picture of America he painted, and they cannot find themselves 

in it to save their lives.’’ We don’t agree on a lot of things, but President Clinton 

has rightly summed up the frustration many Americans feel. 

Month after month, we exceed low expectations, and that simply isn’t good 

enough. It’s not good enough for the tens of millions of workers still sitting on the 

sidelines; it’s not good enough for the nearly six million Americans who need fulltime jobs but can only find part-time work; and it’s not good enough for those families whose incomes remain flat. We need to do better, and there are opportunities 

to do better. However, those opportunities will be lost if the department continues 

to push an extreme regulatory agenda. 

CEWDOCROOM with DISTILLER

4 

For example, we both agree federal overtime rules need to be changed. The committee has held numerous hearings with witnesses who testified that these rules are 

so convoluted that well-meaning, law-abiding employers often get tied up in red tape 

and run afoul of the law. The overtime rules are also outdated, denying men and 

women the ability to balance work with their personal or family needs. 

We have said repeatedly we want to partner with the department in a serious effort to streamline and modernize overtime protections. Unfortunately, the department is pursuing an approach that will do nothing to provide employers more clarity 

and certainty. To make matters worse, the department’s proposal will actually stifle 

workplace flexibility and make it harder for lower-income Americans to move up the 

economic ladder. These and other consequences will unfold in communities across 

the country, in local retail stores, small businesses, non-profit organizations, and 

community colleges. The very places that can least afford it will be hit the hardest. 

In addition to overtime, there is also broad, bipartisan agreement we need to 

strengthen policies governing retirement advice. Of course, there are also strong, bipartisan concerns with the department’s fiduciary proposal. As Dr. Roe suggested 

at a hearing last year, if we applied the same regulatory regime on the medical profession, patients would have less access to trusted physicians, and the same will be 

true for those seeking retirement advice. 

Because of the rule, many low- and middle-income families will have less access 

to affordable retirement advice and fewer small businesses will offer retirement 

plans. Thanks to the hard work of Dr. Roe and others, there is a bipartisan alternative that would protect access to affordable retirement advice and ensure advisors 

serve their clients’ best interests. This legislation is a strong foundation to address 

a shared priority if the department will abandon its flawed, partisan proposal. 

Mr. Secretary, I strongly encourage you to take a step back and build bipartisan 

consensus in these and other important areas. The department’s my-way-or-thehighway approach will not deliver the lasting, positive change working families and 

job creators need to move this country forward. The only way to do that is for the 

administration to work with members of Congress – Democrats and Republicans. I 

would also encourage the department to renew its focus where bipartisan consensus 

has already delivered results, such as workforce development and multiemployer 

pensions. 

The president noted recently the importance of providing new skills to those 

searching for work, yet the department has failed to implement the Workforce Innovation and Opportunity Act in a timely manner. A new report by the nonpartisan 

Government Accountability Office confirms the consequences of the department’s inaction, and we hope the implementation process will conclude without further delay. 

Finally, Mr. Secretary, you played an integral role in our efforts to reform the multiemployer pension system. Your continued leadership is needed to solidify the gains 

we’ve made and to modernize the system for future generations of workers and retirees. 

Our success in these areas demonstrates what’s possible when extreme policies 

are set aside and we work together in good faith toward a common goal. In the coming months, I hope we seize the opportunities we have in order to make a real difference in the lives of America’s workers and employers. 

Mr. SCOTT. Thank you, Mr. Chairman, and thank you, Secretary 

Perez, for being with us this morning. We know that the United 

States has emerged from the depths of the Great Recession with 

steady economic growth. Here are some facts: 

More than 14 million jobs have been created over the last six 

years extending the longest streak of private sector job growth on 

record; 242,000 jobs were created in February and the unemployment rate has dropped to 4.9 percent from a high of 10 percent. 

Over the last six months, the labor participation has grown as 

more people are reentering the workforce. Although the growth in 

the global economy has slowed to the lowest level since 2009, the 

United States now has the highest growth rate compared to other 

advanced economies. 

This is occurring even while domestic companies are battling the 

economic headwinds from a strong dollar that makes our exports 

more expensive in a global market. Despite this economic good 

CEWDOCROOM with DISTILLER

5 

news, we also know that America’s middle class has not fully recovered and too many Americans remain underemployed. For example, 

15 million people are working part-time, not because they want to, 

but because they cannot find full-time work. Others are unemployed or discouraged from seeking work, wages have been stagnant. 

The middle class, in real terms, for the last four decades, well 

over 90 percent of new income during the recent recovery has been 

concentrated in the hands of the top one percent. It was well established that the link between productivity gains and wages in our 

economy has been broken for the past generation. This chart shows 

that from the 1950s through the 1970s, as productivity increased, 

so did wages but around the 1970s, ‘73, there was a break where 

wages were essentially stagnant as productivity continued to grow. 

This chart shows that the rich are getting richer because the productivity is producing more wealth but the workers are not getting 

the benefit of that productivity. Standard and Poor’s has studied 

whether the U.S. economy would be stronger with a narrower income gap and concluded that inequality is one major factor in holding back the economy. S&P reduced its projections for annual 

growth from 2.8 percent down to 2.5 percent due to widening inequality. 

Again, economists on Wall Street are telling us that extreme inequality is holding back the economy. Now this next chart illustrates extraordinary rapid growth of annual wages for the top one 

percent that is the line on the top. It grew 149 percent while the 

wages in the bottom 90 percent, just grew about 16 percent from 

1979 to 2014. Today’s discussion contrasts two very different views 

of the role of policy, one where policies concentrate their economic 

gains disproportionately among those at the top income bracket 

with the premise that these gains eventually trickle down, and another one which calls for public investment and training, infrastructure and research in order to produce sustainable growth for 

everybody. The question before us is whether we will choose to pursue prosperity economics or austerity economics where we adopt 

policies that advance the middle-class jobs or perpetuate poverty 

wage jobs with our labor policies and workforce investments concentrate the wealth in the hands of the top one percent or will our 

policies grow and strengthen working families? 

The choices we make here in Congress, especially those we make 

in this committee, will shape that answer. The President’s budget 

recognizes this reality and proposes a way to make investments our 

country needs by responsibly ending sequestration. 

Democrats and many Republicans agree that the mildest mindless cuts mandated by sequestration are bad policy and do not benefit our economy or our national defense, but instead of addressing 

the situation head on, the debate is focused on extending tax cuts 

for the wealthiest Americans while robbing the country of resources 

needed, education, infrastructure, and research. 

We saw this late last year when we passed another 600-andsome billion-dollar tax cut which drained resources from investments and that passed the House. I do not think it has passed the 

Senate and hopefully it will not. 

CEWDOCROOM with DISTILLER

6 

The Department of Labor’s priorities and budget requests offer 

proposals to narrow the extreme and growing income inequality in 

our country while closing the pay gap between men and women. 

The fact is that concrete steps must be taken to move the Nation 

in the right direction. 

One step is to adopt policies that pay workers a living wage and 

enable them to balance family and work. A raise in the minimum 

wage is long overdue. If the minimum wage had been adjusted for 

inflation over the years, it would have increased to over $18 an 

hour by now but of course it has not kept up with the productivity. 

Another step to take is to protect retirees and their hard-earned 

retirement savings to ensure that our fellow Americans can rest 

with dignity after a lifetime of hard work. Likewise, protections are 

needed to keep workers safe and healthy on the job. We must also 

adjust the overtime threshold, the guaranteed access to paid sick 

leave and to ensure that Federal workers and contractors are paid 

fairly by requiring contractors to provide pay stubs so that you 

know exactly what you have been paid and that would significantly 

reduce wage theft. 

All of these are long overdue, and I applaud the administration 

for proposing rules in these areas. Economic growth and strong regulatory protections are not mutually exclusive. After all, the absence of regulation allowed Wall Street to run amok and cause a 

credit freeze in 2008 that destroyed hundreds of thousands of jobs 

every month. 

Finally, I know that Secretary Reid focused on preparing the Nation’s workforce on jobs of today, more importantly for the jobs of 

tomorrow, these priorities are reflected in the Department’s budget 

which focuses funding on summer and year-round jobs, opportunities for disconnected youth, apprenticeships and programs that expand training for in-demand jobs. 

Mr. Secretary, I look forward to hearing more about your department’s agenda and your vision for a more prosperous economy and 

a more prosperous middle class. Thank you Mr. Chairman. 

[The information follows:] 

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7 

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Insert offset folio 1 here 99444.001

Opening Statement for Robert C. "Bobby" Scott Ranking Member 

Committee on Education and the Workforce "Examining the Policies and Priorities oftlte 

U.S. Department of Labor" 

Fnll Committee Hearing Rayborn 2175 

March 16,2016, 10 a.m. 

Thank you, Mr. Chairman, and thank you, Secretary Perez, for being 

with us this morning. 

We know that the United States has emerged from the depths of the 

Great Recession with steady economic growth. Here are some of the 

facts: 

• More than 14 million jobs have been created over the past six 

years, extending the longest streak of private-sector job growth on 

record. 

• 242,000 jobs were created in Febmary, and the employment rate 

has dropped to 4.9 percent from a high of 10 percent. 

• Over the past six months, labor force participation has grown as 

more people are re-entering the workforce and finding jobs. 

1 
8 

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Insert offset folio 2 here 99444.002

• Although growth in the global economy is slowing to the lowest 

level since 2009, the U.S. now has the highest growth rate 

compared to other advanced economies. This is occurring even 

while domestic companies are battling economic headwinds from a 

strong dollar that makes our exports more expensive in global 

markets. 

Despite this economic good news, we also know that America's middle 

class has not fully recovered, and too many Americans remain underemployed. For example, over 15 million people are working part time, 

not because they want to, but because they cannot find full time work. 

Others are unemployed or discouraged from seeking work. Wages have 

been stagnant for the middle class in real terms for the past four decades, 

while over 90 percent of new income created during this recovery has 

been concentrated in the hands of the 1 percent. 

2 
9 

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Insert offset folio 3 here 99444.003

It is well established that the link between productivity gains and wages 

in our economy has been broken for most Americans for the past 

generation. 

[Chart 1) 

Disconnect between productivity and a typical workers 

compensation. 1948-2014 

"' ?!: 

"' 

>~ 

<• "' c: 

'5 "' 

c 

~ 

ill. 

"' 

-~ 

;;: 

E 

::> 

v 

200 

150 

100 

50 

0 

1960 1980 

3 

2000 

109.0% 

Hourly compens.1tion 
10 

CEWDOCROOM with DISTILLER


Insert offset folio 4 here 99444.004

As the chart shows, between 1948 and 1973, productivity and hourly 

compensation grew at nearly equal rates -productivity increased by 

almost 97 percent and hourly compensation for typical worker increased 

by 91 percent. However, in the 41 years that followed, productivity 

skyrocketed while wages barely rose. From 1973 to 2014, hourly 

compensation of a typical worker rose just 9 percent in real terms while 

productivity increased 72 percent. In other words, workers aren't 

receiving a fair share of the wealth they create. The rich are getting 

richer while middle class families are being squeezed to the limit. And 

middle- and low-wage earners are being squeezed the most. 

Standard and Poors has studied whether the U.S. economy would be 

stronger with a narrower income gap and concluded that inequality is 

one factor holding back economic growth. S&P reduced its projections 

for annual growth from 2.8 percent down to 2.5 percent due to widening 

inequality. Again, let me repeat that point-economists on Wall Street 

are telling us that extreme inequality is holding back economic growth. 

[Chart 2] 

4 
11 

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Insert offset folio 5 here 99444.005

Cumulative pei'Cent change in real annual wages. by wage 

group, 1979-2014 

150 

100 

50 

0 

-Top 1% 

95th-99th 

90th-95th 

Bottom90% 

1980 1990 2000 

2007: 

156.2% 

2010 

This next chart illustrates the extraordinarily rapid growth of annual 

wages for the top 1 percent compared with everybody else: top 1 percent 

wages grew 149 percent, while wages of the bottom 90 percent grew just 

16.7 percent between 1979 and 2014. Today's discussion contrasts two 

very different views of the role of policy- one where policies 

concentrate the economic gains disproportionately among those in the 

5 
12 

CEWDOCROOM with DISTILLER


Insert offset folio 6 here 99444.006

top income bracket, on the premise that these gains eventually trickle 

down, and another which calls for public investments in training, 

infrastructure, and research in order to produce sustainable growth. 

The question before us is whether we will choose to pursue prosperity 

economics or austerity economics? Will we adopt policies that advance 

middle class jobs or perpetuate poverty wage jobs? Will our labor 

policies and workforce investments concentrate wealth in the hands of 

the top 1% or will our policies grow and strengthen working families? 

The choices we make here in Congress, and here in this Committee, will 

shape that answer. The President's budget recognizes this reality and 

proposes a way to make the investments our country needs by 

responsibly ending sequestration. Democrats and many Republicans 

agree that the mindless cuts mandated by sequestration are bad policy 

and do not benefit our economy or our national defense. But instead of 

addressing the situation head on, the debate has focused on extending 

tax cuts for the wealthiest Americans while robbing the country of 

6 
13 

CEWDOCROOM with DISTILLER


Insert offset folio 7 here 99444.007

resources needed for education, infrastructure and research. We saw this 

again last year where another $600 billion in tax cuts drained resources 

from investments. 

The DOL's priorities and budget request offer proposals to narrow the 

extreme and growing economic inequality in our country, while closing 

the pay gap between men and women. 

The fact is that concrete steps must be taken to move the nation in the 

right direction. One step is to adopt policies that pay workers a living 

wage- and enable them to balance work and family. A raise in the 

minimum wage is overdue and it's the right thing to do. The minimum 

wage, adjusted for inflation, would have increased to over $18 per hour 

by now had it kept pace with growing productivity. 

Another step to take is to protect retirees and their hard earned 

retirement savings to ensure that our fellow Americans can rest with 

7 
14 

CEWDOCROOM with DISTILLER


Insert offset folio 8 here 99444.008

dignity after a lifetime of hard work. Likewise, protections are needed 

to keep workers safe and healthy on the job. 

We must also adjust the overtime threshold, guarantee access to paid 

sick days for federal contractors, and ensure that workers on federal 

contracts are paid fairly by requiring contractors to provide pay stubs. 

All of these are long overdue and I applaud the Administration for 

proposing rules in these areas. Economic growth and strong regulatory 

protections are not mutually exclusive. After all, the absence of 

regulation allowed Wall Street to run amok, and cause a credit freeze in 

2008 that destroyed 800,000 jobs per month. 

Finally, I know that Secretary Perez remains focused on preparing the 

nation's workforce for the jobs of today, and more importantly, for the 

jobs of tomorrow. These priorities are reflected through the 

Department's budget which focuses on funding for summer and year 

8 
15 

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Insert offset folio 9 here 99444.009

round jobs, opportunities for disconnected youth, apprenticeships, and 

programs that expand training for in-demand jobs. 

Mr. Secretary, I look forward to hearing more about your Department's 

agenda and your vision for a more prosperous economy and a more 

prosperous middle class. 

9 
16 

Chairman KLINE. I thank the gentleman. Pursuant to Committee 

Rule 7(c), all members will be permitted to submit written statements to be included in the permanent hearing record and without 

objection, the hearing record will remain open for 14 days to allow 

such statements and other extraneous material referenced during 

the hearing to be submitted for the official hearing record. 

It is now my pleasure to introduce our distinguished witness. 

Secretary, we are delighted to have you back. The Honorable 

Thomas E. Perez serves as the U.S. Secretary of Labor and is no 

stranger to this committee and to hearings here and we are very 

glad to have you back. 

He has a distinguished career and I can go through a list of other 

positions, Assistant Attorney General for civil rights of the U.S. Department of Justice, Secretary of Maryland’s Department of Labor, 

and so on. He has got a lot of experience, he is our Secretary and 

we are delighted to have him here today. Now, Mr. Secretary, I 

have to ask you to stand and raise your right hand. 

[Witness sworn.] 

Chairman KLINE. Let the record reflect that the Secretary answered in the affirmative again. Before I recognize you to provide 

your testimony, let me remind you of our lighting system. I cannot 

remember the last time we were in this room the last time you 

were here. 

Secretary PEREZ. No, it is pretty different. 

Chairman KLINE. New digs here. The system is still the same. 

We have the old red, yellow, green light system. It should be right 

there in front of you. Take the time that you need for your testimony. I will not gavel you down while you are giving your testimony but please be mindful that we are going to have a lot of 

member who want to engage in the discussion, and then again I 

will remind my colleagues that members will have five minutes unless I have to shorten the time as the time goes on. 

Mr. SCOTT. Chairman, could I correct my testimony? I was just 

advised that the 600-and-some billion-dollar tax cut was approved 

by the Senate and went into law, so there. 

Chairman KLINE. It stands corrected. So again to my colleagues, 

please do not push the limits on time. As we saw yesterday, we can 

run out of time very quickly and I would rather not get down to 

3 minutes per member so be mindful of the time as you go forward 

and try not to put the Secretary in the position of having 10 seconds to give a 5-minute answer. That may be the only time, Secretary, that you may hear me drop the gavel is if you are in the 

process of understandably giving a 5-minute answer where you are 

given 10 seconds. With that understanding, we are ready to go, Mr. 

Secretary recognized. 

TESTIMONY OF HONORABLE THOMAS E. PEREZ, SECRETARY, 

U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C. 

Secretary PEREZ. Thank you, Mr. Chairman, good morning and 

thank you for this opportunity to be here and I want to start out 

by saying thank you for your distinguished service. I was very saddened when I learned of your decision to retire and it has been an 

honor and pleasure working with you. Thank you for your service 

to the Nation and thank you for your service to your constituents. 

CEWDOCROOM with DISTILLER

17 

It has really been a pleasure working with you. It has been a pleasure working with everyone on this committee. We have done a lot 

of different things, whether it is Mr. Guthrie and ESOPS, Congresswoman Foxx and apprenticeship, Ranking Member Scott and 

minimum wage, and so many others, Congressman Courtney and 

so many issues, so I want to say thank you. 

We do not always agree on everything as this hearing I suspect 

may illustrate but we do agree on a lot and we will always search 

for that common ground. And as we prepare for the final 10 

months of this administration, I do think that it is important to reflect on where we have been, where we are, and where we need to 

go. 

President Obama inherited an economy in freefall and the three 

months before he took office, the economy hemorrhaged roughly 2.3 

million jobs. Seven years later, we have successfully climbed out of 

the worst economic crisis in generations although there is undeniable unfinished business. 

We are now in the middle of the longest streak of private sector 

job growth on record: six straight years to the tune of 14.3 million 

new jobs. Unemployment is down from 10 percent to now 4.9 percent. Auto sales reached a record high last year. And again, as I 

mentioned, while we still have the unfinished business of ensuring 

shared prosperity for everyone, we have made undeniable progress 

and I am proud of the role that the Department has played in this 

progress because our work is critical to fortifying the basic pillars 

of the middle class and education and training that allows you to 

move up the ladder of success: healthcare that is affordable and accessible, a fair day’s pay for a hard day’s work, a roof over your 

head, and a mortgage that will not go underwater, and the opportunity to save for a secure and dignified retirement. 

These pillars took a beating during the Great Recession, but I 

have never felt more confident in the resilience of our economy, our 

workers, and our businesses. The Labor Department’s work continues to help sustain this recovery while addressing the unfinished business of ensuring shared prosperity. For instance, between 

2008 and 2014, our employment and training program served an 

average of 14 million Americans a year, helping more than half of 

them get new jobs, and the new Workforce Innovation and Opportunity Act will make us that much more effective. I am very grateful to the members of the committee, to the bipartisan support, the 

overwhelming bipartisan support in passing this new law, and we 

continue to work with our State and Federal and local partners toward full implementation. WIOA is the blueprint for a modernized 

and streamlined workforce system that will better serve the job 

seekers and employers alike. 

I often refer to this as our Eisenhower moment. Just as we built 

the interstate highway system in the mid-20th century, today we 

are building the 21st century skill superhighway. It has dedicated 

lanes for different populations, helping everyone reach their ultimate destination, a middle class job and prosperity for workers, 

businesses, and communities alike. One of the on ramps on that superhighway is apprenticeship. Every public dollar invested in this 

earn while you learn model provides a $27 return. That was one 

of our recent studies and that is why the President has challenged 

CEWDOCROOM with DISTILLER

18 

us to double the number of apprentices in the coming years while 

transforming the system by diversifying and expanding to new industries. Last year, we made the largest ever Federal investment 

in apprenticeship, $175 million in grants, and I appreciate the $90 

million that Congress appropriated for this fiscal year. 

We are making sure apprenticeship is accessible in every community, every ZIP Code, and our mission does not just help people 

find good jobs but makes sure that these jobs pay a family sustaining wage. That is why we continue to advocate for an increase 

in the minimum wage, strongly support the Scott-Murray proposal, 

and we will continue to work with State and local governments on 

this issue. We also continue to work on overtime because overtime 

stands for the simple proposition that if you work extra, you should 

be paid extra. It is a basic principle and the final rule that we have 

worked on and had a very inclusive process about was submitted 

to OMB earlier this week for review. 

Our Wage and Hour Division has also cracked down on wage 

theft that threatens the livelihoods of so many people. Since 2009, 

the Wage and Hour has been able to secure back wages totaling 

$1.6 billion for 1.7 million workers. I believe it is a false choice to 

suggest that we can either have economic growth or workplace 

safety. We can and must have both and this administration has 

been vigilant about making sure that workers do not have to risk 

injury or illness in order to earn their paycheck while working 

closely with employers on this matter. In the 1930s, Francis Perkins identified silica dust as a dangerous and deadly hazard and 

called on employers to protect those workers. 

Finally, 80 years later, our OSHA office is close to issuing an updated rule that will significantly reduce workers’ exposure and save 

lives. Our mine safety office has done remarkable work over the 

last 7 years. Thanks in part to their efforts, there were fewer mining fatalities in 2015 than any other year in history. 

We continue to implement the historic coal dust rule and since 

it took effect, about 99 percent of the dust samples taken by MSHA 

and coal operators are in compliance. 

We are also charged with empowering workers not just during 

their career but after their careers are over and we have done a 

lot of work through our Employee Benefit Security Administration 

toward this end. 

One such issue is the proposed Conflict of Interest Rule which I 

suspect we might discuss here today, just a guess, and it is based 

on a commonsense principle: if you want to give advice, you have 

to put your client’s best interest first. As Jack Bogle, the founder 

of Vanguard, said: ‘‘I learned early on in the business that when 

you put your customers first, it is great for your customers and it 

is great for business.’’ And so we will continue to work on that rule. 

I have had an opportunity in this job to make a lot of house calls 

and those house calls have inspired me to continue to do my work. 

I met with a woman in Connecticut named Katherine Hackett. She 

had been out of the workforce for such a long time, but for the 

grace of God could have gone any of us, but as a result of the leadership of her member of Congress, the work of Match.com, otherwise known as the Department of Labor, our State and local partners, she now has a full-time job again, and she is thriving. 

CEWDOCROOM with DISTILLER

19 

I have seen so many inspiring stories like Katherine Hackett’s, 

but I have also visited people whose boat has not yet been lifted 

by this rising tide, people like the janitor in Houston, Astro Verta, 

who is struggling to get on with less than $9 an hour. The fast food 

worker in Detroit who was sleeping in her car with three kids the 

night before I met her because she had been evicted from her 

apartment. Allen White, the person I met again last week in my 

hometown of Buffalo, whose life is being very much inhibited by silicosis. These challenges that they confront keep me up at night. 

And the opportunity to help them and to create shared prosperity 

and an economy that works for everyone for everyone,to work with 

you whenever possible, this is what gets me out of bed with a hop 

in my step every morning, aside from the fact that I had a knee 

replacement so I have a bit of a hop from time to time. 

We have 310 days left until the weekend and I want to make 

sure that we do not simply count the days but we make every day 

count. And I look forward to working with you toward that end, 

Mr. Chairman, and thank you for your time and thank you for your 

courtesy and thank you for your long and distinguished career of 

service. 

[The statement of Secretary Perez follows:] 

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STATEMENT OF 

THOMAS E. PEREZ, SECRETARY 

U.S. DEPARTMENT OF LABOR 

BEFORE THE 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES 

March 16,2016 

Good morning. Chairman Kline, Ranking Member Scott, Members of the Committee: thank you 

for the invitation and opportunity to be here with you today. This is my last year as Secretary of 

Labor and the last year of an Administration that is proud of the incredible strides we have made 

in putting people back to work and getting our economy back on track. I have very much enjoyed 

working with and getting to know Members of this Committee. While we may not always agree 

on everything, I appreciate the constructive dialogue we've established, and I'm confident we 

can continue to find common ground on many important issues. It's my hope that, in these final 

I 0 months, we can work together to sustain and strengthen this recovery, building on the 

progress of the last seven years. 

The nation and the economy have come a long way. When President Obama took office, the 

nation was hemorrhaging jobs more than two million just in the three months before his 

inauguration. The auto industry was flat on its back. Some of our major financial institutions 

were collapsing. Millions of Americans were losing their homes and their retirement savings. It 

was the worst economic crisis in generations. 

Seven years later, the turnaround is remarkable. The wind is at our back again. The 

unemployment rate, which had reached I 0 percent, has been cut by more than half to 4.9 percent, 

and for the first time since the fall of2007, has been below 5 percent for two months in a row. 

The longest streak of private-sector job growth on record now stands at a full six years, 72 

consecutive months, during which businesses created 14.3 million jobs. The economy added an 

average of240,000 jobs a month in 2014 and 2015, the first time we've had back-to-back years 

that strong since 1998-1999. The auto industry had its strongest year of sales ever in 2015. Initial 

unemployment claims at the beginning of2009 were staggeringly high- more than 600,000 a 

week; today they've been at or below 300,000 for more than a year. The labor market has 

rebounded. There are now 5.6 million job openings. In July 2009, there were nearly seven jobseekers for every available position; today that ratio is about 1.4-to-l, near its pre-recession low. 

Nevertheless, important challenges remain. The rising tide simply isn't lifting every boat. The 

economy is unquestionably growing, but it remains out of balance, with middle-class families 

not getting their fair share of the growth and value they've helped create. Too many people, no 

matter how hard they work, can't get by, let alone get ahead. We are not yet creating the shared 

prosperity we need. 

Many of our challenges, in fact, pre-date the Great Recession. Many are rooted in the fact that, as 

President Obama articulated in his State of the Union address, our economy is undergoing 

extraordinary change. These changes- like globalization and automation- offer promising 
21 

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opportunities for progress, but they also present real challenges to the economic stability and 

security of so many working people. Traditional work arrangements have changed in a way 

that's contributing to a fissuring of the American workplace. Women have entered the workforce 

in droves, but our laws and policies haven't kept pace with this development. The number of 

workers represented by unions has continued to decrease, diminishing workers' voice in the 

workplace and undermining the strength of the middle class. The retirement landscape has 

shifted dramatically, adding complexity and uncertainty to what used to be a straightforward 

system. Increasing wages remains the primary piece of unfinished business of the recovery- and 

of the last several decades- and the biggest open question as we confront a changing economy. 

Wage growth has continued over the course of2015 and into 2016, and due partly to low 

inflation over the last year, workers are now seeing some real wage growth. However, for most 

workers, real wages have been largely flat since the late 1970s, even as productivity has 

increased. 

The President posed a fundamental question to the nation in his State ofthe Union address: in 

light ofthese challenges, how do we give everyone a fair shot at opportunity in this new 

economy? I am at heart an optimist- but I am also a realist and a pragmatist. I put all of those 

"ists" together in answering the President's call. I am proud that during the past seven years at 

the Department of Labor we have begun to chart a course that is creating a new social compact 

for the new economy that will provide that fair shot for all Americans- even as so much changes 

around us. The new social compact is based on a commitment to building an economy that works 

for everyone, an economy based on shared prosperity. 

Promoting Skills and Workforce Training 

An essential element of having a fair shot at opportunity in the new economy is having the 

ability to adapt to a rapid rate of change. In the economy of the future, successful career paths are 

not going to be linear- they are going to zig and zag as technology continues to evolve. 

Therefore, to help put forward the building blocks of a social compact for the 2 lst century, one 

of the most important things the Labor Department can do is help people get the skills and 

training they need to compete and succeed. 

During the past seven years, we've helped a lot of people navigate these changes: From Program 

Years (PY) 2008 to 2014, our programs helped place nearly 50 million individuals in new jobs. 

During the same time period, over 140 million participants received job-related services, 

including 1.5 million participants who completed training programs. Over I 0 million veterans 

were served. Between July 2014 and June 2015, our Employment and Training Administration 

(ETA) served over 14.5 million participants, with over 6.5 million previously unemployed 

people finding jobs. 1 During this one-year period, approximately 150,000 individuals completed 

training programs. Ofthe 14.5 million participants, I million were veterans. 

I've been enormously gratified by the bipartisan consensus in support of this work, both here in 

this Committee and in Congress more generally. 

1 This is the most recent program year that the Department has complete data to report. All of these figures include 

some participants multiple limes, which reflects customers who received services in multiple reporting periods. 

2 
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Never was that consensus more apparent than with the passage in July 2014 of the Workforce 

Innovation and Opportunity Act (WIOA), which modernizes and streamlines the public 

workforce system to prepare workers for 21st century jobs and ensure American businesses have 

the skilled workers they need to be competitive in our global economy. WIOA is the blueprint 

for the construction of what I call a skills superhighway, nearly as important an infrastructure 

project as President Eisenhower's interstate highway system some 60 years ago. The skills 

superhighway has dedicated lanes, where workers, whether veterans, people with disabilities, 

disconnected youth, or formerly incarcerated individuals, can pick up stackable, portable 

credentials. The destination is the middle class, but there are a lot of different routes on the 

superhighway to get there. 

Our task now is full implementation ofWIOA. The Department has worked in strong partnership 

with the Departments of Education, Health and Human Services (HHS), Agriculture, and 

Housing and Urban Development to realize the law's vision of streamlined investments in 

employment and training to better serve both people looking for work and employers seeking 

skilled talent. The Department, together with the Department of Education, has published joint 

proposed rules, issued joint key guidance, and provided joint technical assistance to the 

workforce system all toward making the new law a reality. 

States and territories arc working hard to bring the principles ofWIOA to life, convening their 

partners to align strategy, service delivery, and performance reporting across programs. Most 

states and outlying areas already have WIOA-compliant state and local governing boards in 

place. While all states and outlying areas must submit a Unified or Combined State plan prior to 

the start of Program Year 2016, over 27 states and two outlying areas are planning to submit 

Combined State Plans, which include the six core partner programs, as well as one or more other 

partners in the American Job Center network. Nearly all states have already posted their draft 

state plans online for public comment. 

The FY 2016 Omnibus reflects important bipartisan support for WIOA, and for investments that 

will modernize federal, state and local workforce strategies to make training more responsive to 

business needs. The Omnibus returned the Governor's Reserve authorization to 15 percent, thus 

supporting states as they work to meet WIOA obligations, while maintaining funding for local 

services to employers and job seekers. To further support this progress, we are grateful for 

funding tlexibilities of over $20 million under the Omnibus that will allow the Department and 

the states to continue toward full execution ofWIOA. The 2017 Budget builds on this 

foundation, taking the WIOA formula grants to their full authorized level and proposing essential 

investments to help States create the data systems and capacity needed to meet WIOA's 

performance measurement and evaluation requirements. 

The FY 2016 Omnibus also includes an investment of$90 million to expand Registered 

Apprenticeship, a tried-and-true workforce strategy combining work and training, which delivers 

immeasurable benefits for workers and employers alike. The return on investment for 

apprenticeship is dramatic. Studies show that for every taxpayer dollar invested in 

apprenticeship, we see a tax revenue return of about $27 over the career of an apprentice. 

Meanwhile, the average starting salary for an apprenticeship graduate is over $50,000 a year. 

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Apprenticeship graduates also earn over their careers $300,000 more on average in wages and 

benefits than their peers who don't participate in an apprenticeship.2 

The President recognizes that, over several decades, we have undervalued apprenticeship. In 

response, he issued a bold challenge in 2014 to double Registered Apprenticeships within five 

years. Since that call to action, they have grown by nearly 20 percent, to over 450,000 

nationwide today. Taking the system from all-time lows in participation to these modern-day 

heights marks one of the greatest turnarounds the apprenticeship system has ever experienced. 

The Budget's proposed continuation of the apprenticeship grants seeks to continue that progress. 

To maintain that growth and to clear the high bar set by the President, we should not just double 

but also diversifY, by expanding apprenticeship to sectors of the economy that haven't 

traditionally utilized them and to demographic groups-- including women, people of color, and 

individuals with disabilities that have been historically underrepresented. ETA has teamed up 

with the Department's Women's Bureau on the development of the "Pre-apprenticeship: 

Pathways for Women into High-Wage Careers" guide. Thanks in large measure to leadership 

from labor unions and their employer partners, apprenticeship has been critical to building a 

workforce and creating opportunity in skilled trades like plumbing, carpentry and electrical 

work. Now we want to build on that foundation and apply the same model to industries like 

health care, IT, cybersecurity, and advanced manufacturing. Companies like UPS, CVS Health, 

and Zurich Insurance are finding success with apprenticeship. 

As I've traveled the country, I've seen the powerful difference apprenticeship is making in 

people's lives. 1 saw it in Boston where the current Mayor, Marty Walsh, created a preapprenticeship program called Building Pathways back when he was the head of the local 

Building Trades. It takes people from some of the city's poorest neighborhoods and 

communities, including public housing residents, and prepares them for a union apprenticeship 

that is a springboard to a middle-class job. 

At the Urban Technology Project in Philadelphia, students receive hands-on-training and 

industry-recognized credentials through a computer support specialist apprenticeship program. I 

met one student, Jessica, who is now the director of operations at a software development firm. 

She said she feels just as qualified as her colleagues who earned four-year degrees, and she 

likened it to a board game, where she got to "skip ahead four spaces to payday." 

There is also the story of Shane, a young man in North Carolina. Shane completed an 

apprenticeship program at Ameritech Die and Mold, utilizing the latest technology for plastic's 

mold injecting. While many individuals in their early 20s struggle to find good jobs, Shane has 

earned his associates degree, is debt-free, and earning approximately $40,000 per year. 

We want to create more of these success stories. That's why we made an historic investment last 

year: $175 million in grants to 46 public-private partnerships an investment that is expected to 

result in 34,000 new apprenticeships and lay a foundation for future growth. 

2 http://www .mathematica-mpr .coml-lmedialpubl ications/PD Fs/laborlregistcrcd _apprenticeship _I Ostates.pdf 

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Apprenticeship and higher education doesn't need to be an either-or; they can be a "both-and." 

Our Registered Apprenticeship College Consortium, which has expanded to over 239 colleges 

and 976 training programs, makes it easier for apprentices to earn college credit. And we're 

making it easier for employers and others to leverage federal resources and education programs -

-including the Gl Bill, Pel! grants, and others-- to support participation in apprenticeship. 

Last fall, the Department published an Apprenticeship Equal Employment Opportunity proposed 

rule that would modernize and streamline 1978 rules to help provide equal opportunity for all 

Americans to participate in apprenticeship programs regardless of race, sex, color, national 

origin, disability, age, genetic information, gender identity, or sexual orientation. Expanding 

opportunity for all Americans is a critical element of the social compact 2.0. 

To ensure the strongest possible workforce for the economy of the future, we need to tap the 

talents of all our people. That includes those who got on the wrong side of the law and have paid 

their debt to society. America is a nation that believes in second chances, where we don't have a 

person to spare. Transitioning adult and juvenile offenders face extraordinary challenges in 

reintegrating into society as well as obtaining and retaining employment. That's why I am proud 

of the work we have done through the Reentry Employment Opportunities (formerly RExO), to 

provide education and career services to people involved in the criminal justice system. 

I am especially proud of the Department's new Linking to Employment Activities Pre-Release 

(LEAP) program, which provides funding to bring American Job Centers "behind the fence"--

that is, behind the walls of prisons. It's just smart workforce development to provide 

employment services to incarcerated men and women while they're still serving their terms, so 

they can hit the ground running after they are released. We invested $10 million in LEAP grants 

in 2015, and recently announced the availability of$5 million more this year. In suburban 

Philadelphia recently, I visited the Montgomery County Correctional Facility, which is 

implementing this model with the help of one of our 2015 LEAP grants. During my visit there, I 

spoke with one inmate for whom this isn't just a question of opportunity, but of dignity. "It's an 

honor to be recognized instead of always being called names," he said. "It's an honor to be 

looked at as someone other than a criminal." 

Our reentry work is a win-win-win. It helps people put their lives back together and reintegrate 

in their communities. It gives employers greater access to skilled workers. And it is a smart 

public safety strategy too- because the best anti-recidivism strategy is a good job at a good 

wage. 

Our reentry programs aren't the only ones that address the needs of vulnerable populations. We 

serve at-risk youth through the Job Corps program, which has provided job skills training for 2.7 

million young people in the 51 years since its inception. Today the program serves over 60,000 

students each year, preparing them for 21st century careers. As with all our employment and 

training programs, we can't do it without the help of thousands of employer partners, from 

Fortune 500 corporations to small businesses in local communities. In PY 2014, 79 percent of 

Job Corps students who completed the program successfully started careers, including careers in 

the Armed Forces, or enrolled in higher education or advanced skills training in the first quarter 

after they completed the program. Also in PY 2014, 95 percent of Job Corps students who began 

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a Career Technical Training program attained industry-recognized credentials in industries like 

healthcare, IT and construction. 

Strengthening student safety and security is a top priority for the Job Corps program. We have 

initiated a National Safety Campaign - Standup for Safety- which includes increased staff 

training, more intensive center oversight and a requirement that all centers review and strengthen 

their security procedures. Job Corps has also worked with our students and contractor 

community to support a student-led Youth 2 Youth: Partners for Peace initiative, designed to 

address youth-on-youth violence, aggression and bullying. 

The Department has also maintained a focus on promoting innovation and continuous 

improvement within the Job Corps program. We released an application to pilot an innovative 

approach to the Job Corps model at the Cascades center, and we are planning to initiate 

additional pilots in the future. The Department will also launch a major external review of the 

program beginning in 2016, with the goal of generating reform ideas that will position the 

program for continued success. I look forward to working with this Committee and Congress as 

we continue our efforts to improve and stren1,rthen the Job Corps program. 

Supporting Our Veterans 

As we focus on meeting the skills needs of our nation's workers, among our most important 

clients are those who have served our nation in the military. The Veterans' Employment and 

Training Service (VETS) is the federal government's lead agency on veteran employment, 

ensuring that the full resources of the Department are brought to bear on behalf of veterans, 

Service Members and their families. Honoring the solemn obligation we have to our nations' 

veterans must be part of any social compact- past, present and future. In the military, our 

Service Members are a part of the most advanced, most technologically innovative force in 

history. VETS' work has led to measurable and substantial progress. The agency has improved 

preparation oftransitioning Service Members entering the civilian workforce, refocused the Jobs 

for Veterans State Grants (JVSG) program to prioritize veterans facing significant barriers to 

employment, promoted a fair and high-quality federal work environment under the Uniformed 

Services Employment and Reemployment Rights Act (USERRA), and built partnerships with 

private sector employers. And to advance, improve, and expand the employment opportunities 

for disabled veterans, VETS and the Department of Veterans Affairs Vocational Rehabilitation 

and Employment Service are updating their memorandum of agreement to work together to 

maximize services provided to disabled veterans and their dependents. 

The employment situation for veterans continues to improve. The annual veteran unemployment 

rate dropped to 4.6 percent in 2015, remaining lower than the 5.2 percent unemployment rate for 

non-veterans. Further, 2015 saw significant improvement in the employment picture for 

particular groups of veterans, including both male post-9/11 veterans-- whose unemployment 

rate dropped from 6.9 percent to 5.7 percent-- and female post-9/11 veterans, whose 

unemployment rate dropped from 8.5 percent to 6.4 percent. However, because rates for certain 

veteran populations remain elevated as compared to the overall veteran unemployment rate, we 

must continue to focus our resources and efforts in this area. 

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At our nearly 2,500 American Job Centers (AJC) across the country, VETS continues to focus on 

increasing the rate of intensive services to veterans with significant barriers to employment. 

We're seeing meaningful results, with state workforce agency Disabled Veteran Outreach 

Program specialists now providing over 75 percent of JVSG participants with intensive services, 

a more than 200 percent increase from PY 2009 levels. Summit Consulting, LLC did a statistical 

analysis3

, concluding that veterans benefit substantially- receiving expedited services, 

becoming employed, staying employed, and having higher earnings- from being first-in-line for 

assistance at AJCs. 

We look forward to working with Congress to continue all of this important work. The 

President's Fiscal Year (FY) 2017 Budget supports our mission with a number of investments on 

behalf of veterans-- including JVSG, the Transition Assistance Program, programs for homeless 

and incarcerated veterans (Homeless Veterans' Reintegration Program and Incarcerated Veterans 

Transition Program), the National Veterans' Training Institute, enforcement ofUSERRA, and 

veterans' preference in federal hiring. 

Advancing Economic Fairness for All Workers 

As the President has made clear, addressing fairness in our changing economy is an essential 

element of the new social compact. We've made great strides over the past seven years in 

ensuring that workers get a fair day's pay for a fair day's work. For example, the Wage and Hour 

Division, which enforces laws establishing our nation's most fundamental labor standards --

including requirements for a minimum wage, payment of overtime, prohibitions on child labor, 

and the right to take leave under the Family and Medical Leave Act -- has recovered nearly $1.6 

billion in unpaid wages for more than 1.7 million workers during the Obama Administration. 

Ensuring fairness in our evolving economy requires understanding this evolution and adapting 

how we do our work. That's why late last year, the Department hosted the Future of Work 

Symposium, a chance to discuss the ways work is changing and how those changes are 

impacting workers and labor standards. 

While innovations in technology and business models may create efficiencies, we need to make 

sure that workers don't have to trade security and basic rights in the process of keeping up with 

these changes. What we need is inclusive innovation that continues to create jobs and strengthen 

our economy without undermining or undercutting workers. While the on-demand economy is a 

relatively new phenomenon, we have in fact been grappling with several of the issues it's raised 

for some time. For decades, industries like hospitality and janitorial services have become 

increasingly "fissured,'' with the traditional relationship between employer and employee 

breaking apart and leaving workers more vulnerable. With this symposium, the Department took 

a leadership role in encouraging and guiding the national conversation about what these changes 

mean for American workers and how the Department of Labor should adjust its work 

accordingly. 

' http://www. do l.gov/asp/evaluation/completed-studies/V eteranNon-V eteranJobSeekers.pdf 

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One way we've adapted our work throughout this Administrations is to be even smarter and 

more strategic in our enforcement approach. That's why all of our agencies tasked with 

protecting fairness in the workplace have targeted labor law violations in industries where we 

know they are most prevalent, and where they affect the most vulnerable workers who are 

unlikely to exercise their rights under the law. Our primary goal, however, is not to find 

violations after the fact, but to avoid violations and improve compliance in the first place. We arc 

working towards this goal through a combination of strategic enforcement, outreach and 

education, and collaboration with stakeholders. 

Our Wage and Hour Division (WHD) is a leader in adapting to fit the realities of the modern 

workplace and anticipating what will come next for American workers and employers. Since 

2009, WHD has conducted more than 15,000 outreach events and presentations, providing 

valuable information and compliance assistance to thousands of employers, workers, and 

stakeholders nationwide. Nearly half of investigators speak a language other than English, 

including Arabic, Cantonese, Chinese, Creole, Farsi, Hindi, Japanese, Korean, Russian, Spanish, 

Tagalog, Thai, Taiwanese, Turkish, and Vietnamese. To strengthen our outreach efforts, in 20 I 0 

WHD created a new position, Community Outreach and Resource Planning Specialists 

(CORPS). These CORPS work in WHD offices nationwide, improving our ability to get 

information to those who need it; and providing training and resources to employers, their 

associations, worker advocates, and other stakeholders. 

The changes in our economy have increased the salience of miselassification of employees as 

independent contractors, a serious issue that WHD continues to investigate closely. 

Misclassification has three victims: workers, law-abiding businesses, and taxpayers. WHD will 

continue refining and strengthening its strategies in priority industries, with an emphasis on 

detecting the various forms ofmisclassification. Our miselassification initiative includes 

vigorous enforcement and litigation; outreach to business and workers, including the release of 

an Administrator's Interpretation on misclassification in July 2015 to provide clear guidance to 

the regulated community regarding their obligations under the law; and partnerships with other 

federal agencies and state governments. We've signed Memoranda of Understanding with 28 

states that will allow us to share information and coordinate enforcement. Since 2015 we have 

renewed three existing MOUs and signed nine new ones in states around the country, including 

Alabama, Alaska, Arkansas, Florida, Idaho, and Kentucky. WHD has also deepened its 

relationships across the board by improving information sharing practices and discussions on 

addressing misclassification. 

This work has yielded very tangible results. In 2014, WHD investigated construction companies 

in Utah and Arizona whose business model had deliberately misclassified construction workers. 

One day they were employees, the next they were doing the same work but were required to 

become "member/owners" of limited liability companies. Through our efforts in collaboration 

with other federal and state agencies, more than I ,000 construction workers were paid over half a 

million dollars in back wages and damages and, more importantly, had their workplace 

protections restored by being reclassified appropriately as "employees." In the aftermath of this 

settlement, the CEO of one of the companies transformed his thinking and his business. At our 

Future of Work Symposium, this CEO participated on one of our panels, sitting alongside the 

very same Department officials who pursued the case against him. He explained that, along with 

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properly classifying his workers as employees, he changed practices for job site monitoring and 

invested in his workforce. As a result, his worker turnover rates have plummeted while 

productivity has increased. The high road turned out to be the smart road for this CEO, 

increasing company profitability and market share. 

To make sure the basic fairness bargain of the American economy is maintained, consistent with 

President Obama's direction to modernize existing overtime regulations while making them 

easier to understand and apply in the workplace, we are also using our regulatory authority to 

update the rules governing which "white collar" workers qualify for overtime pay. The white 

collar exception to overtime eligibility originally was meant for highly-compensated employees, 

but the regulations now apply to workers earning as little as $23,660 a year- below the poverty 

line for a family of four. This is a question of basic fairness. When I was growing up, if you 

were a manager at a store, you had every expectation of being in the middle class. But over a 

period of decades, we've allowed overtime rights to become diminished, creating real economic 

anxiety and hardship for American families. Our goal is to modernize the regulations to ensure 

that the Fair Labor Standards Act's (FLSA's) intended overtime protections are fully 

implemented, and to simplify the identification of overtime-eligible employees, thus making the 

white collar exemptions easier for employers and workers to understand. 

In July 2015, the Department announced a proposed rule that would extend overtime protections 

to millions of additional white collar workers. The proposed regulation is a critical first step 

toward ensuring that hard-working Americans are provided the protections that they are entitled 

to in our modern economy. In drafting the proposed rule, Department staff conducted 

unprecedented levels of outreach, holding extensive listening sessions with employers and 

workers in a wide array of industries. Issuing a final rule is a top priority. 

Overtime and minimum wage protections are also critical for the nation's home care workers, 

who provide essential services to seniors and individuals with disabilities. In 2013, the Wage and 

Hour Division issued a final rule requiring that nearly two million workers- home health aides, 

personal care aides, and certified nursing assistants have the same basic overtime and 

minimum wage protections already enjoyed by most workers. Consistent with our compliance 

efforts, the Department has undertaken an unprecedented implementation program to help 

employers of home care workers prepare for FLSA compliance, including an extensive and 

individualized technical assistance program, a 15-month period before the effective date of the 

Final Rule and a time-limited non-enforcement policy. The Department's home care rule was 

challenged, but in August 2015 the U.S. Court of Appeals for the DC Circuit overturned a lower 

court decision and upheld the Department's rule. As a result home care workers across the 

country are receiving minimum wage and overtime, including roughly 400,000 in California, 

where on February l the state began implementing important policies to provide workers these 

basic protections. Many other states are making significant progress on compliance and WHD 

continues to provide technical assistance to states and other entities. 

To continue moving the agency in a strategic direction and adapting to the realities oftoday's 

workforce, the FY 2017 WHO budget request builds on past successes and aims for greater datadriven, strategic decision-making. This includes nearly $30 million for 300 additional 

enforcement staff to address systemic compliance problems more strategically. As a data-driven 

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and evidence-based agency always seeking to improve program performance and better target 

our work, WHD also seeks $3 million (and 12 economists and data scientists) to further develop 

the use of data, analysis and evaluations in strengthening the effectiveness of our enforcement, 

regulatory, and wage determination programs. 

WHD is also focused on implementing other key priorities to create a more inclusive economy 

based on shared prosperity- ensuring opportunities for employment, higher wages, fairer pay, 

safer workplaces, and workplace flexibility for parents. 

President Obama has repeatedly called on Congress to give millions of hard-working people a 

raise by increasing the national minimum wage. To date, Congress has failed to act; but the 

President has used his authority to raise the pay of as many workers as possible. In February 

2014, the President signed Executive Order (EO) 13658 to raise the hourly minimum wage to 

$10.10 for workers employed on or in connection with covered federal contracts. On October I, 

2014, WHD issued a final rule to establish standards and procedures for implementing and 

enforcing the EO, which took effect for new contracts as of January I, 2015. Pursuant to the EO, 

WHD later published an inflation-adjusted wage effective this year that raised the minimum 

wage from $10.10 to $10.15. Boosting these workers' wages not only puts more money in the 

pockets of almost 200,000 people; it also lowers worker turnover, boosts morale and 

productivity, and improves the quality and efficiency of services provided to the government. 

The Department is also helping workers by ensuring that federal contractors are adhering to the 

law and playing by the rules. For example, we are in the process of finalizing guidance to assist 

in implementing a July 2014 EO that helps agencies better take into account prospective federal 

contractors' records of compliance with key labor and employment laws when awarding covered 

contracts. Additionally, many federal contract workers will be given the necessary information 

each pay period to verify the accuracy of their paycheck. And by putting an end to certain 

mandatory arbitration agreements, it gives federal contract workers who may have been sexually 

assaulted or suffered civil rights violations their day in court. 

The social compact must also include the ability for our citizens to hold a job and care for 

themselves and for their families. But our laws today do not adequately recognize how 

challenging it is to work full-time while taking care of children, aging parents, family members 

with disabilities, or others. Studies show that paid leave increases employee morale and 

retention. It also increases the likelihood of a parent returning to work after the birth of a child, 

without an adverse effect on productivity or business operations. Yet, the U.S. remains the only 

advanced economy on earth without some form of national paid leave. 

On Labor Day of2015, the President signed an EO that will allow workers performing on or in 

connection with covered federal contracts to earn up to seven paid sick days per year. Once final 

regulations are issued, this EO will allow workers to use paid sick leave to care for themselves or 

a family member. It will also allow workers to use paid sick leave for absences resulting from 

domestic violence, sexual assault, or stalking. The EO will provide additional paid sick leave to 

an estimated 828,000 people, including nearly 437,000 who currently receive no paid sick leave. 

This is not just the right thing to do; it is the smart thing to do. Many businesses have 

demonstrated that offering paid sick time doesn't just help their workers; it also improves the 

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bottom line. The NPRM to implement the EO was published in the Federal Register on February 

25, and we fully expect to issue a final rule by the September 30, 2016 deadline set forth in the 

EO. 

The Women's Bureau also plays a significant role in addressing this challenge, pioneering new 

tools like its Paid Leave Analysis Grant Program, which awarded over $1.5 million to states, 

territories and municipalities in 2015 to examine the feasibility of paid leave strategies and 

programs. The Bureau will continue to support state and local momentum fostered by the first 

two years of grant funding, dedicating $1 million in 2016 and requesting an additional $1 million 

in FY 2017 to further expand this program. 

The Bureau strives to support women's economic security; but the typical woman working fulltime, full-year, still makes only approximately 79 cents for every dollar the typical man earns. 

This pay gap is unacceptable and this Administration, with the Department of Labor playing a 

key role, has been resolute in implementing policies to bring greater fairness to the pay of 

working women. Since 2010, members of the White House National Equal Pay Task Force, the 

Department, and the Equal Employment Opportunity Commission (EEOC) have been working 

collaboratively on pay discrimination issues. One of the issues we've explored is how better data 

can help close the pay gaps that persist between gender, racial, and ethnic groups. On January 29, 

2016, the EEOC, in coordination with our Office of Federal Contract Compliance Programs 

(OFCCP), proposed collecting aggregate pay data through an existing employer report. Access to 

these aggregate data will provide EEOC and OFCCP with much needed insight into pay 

disparities across industries and occupations and strengthen our efforts to combat discrimination. 

Employers can also use the data to proactively review their pay data and practices. 

To improve workers' ability to advocate for their rights and report possible pay discrimination, 

in April20 14, President Obama signed EO 13665, directing the Department to issue regulations 

prohibiting federal contractors from discriminating against employees or job applicants for 

inquiring about, disclosing, or discussing compensation. In September 2015, OFCCP issued a 

final rule to protect workers who seek more information about their own pay and that of their coworkers. 

In January 2015, OFCCP proposed replacing its outdated 1970s Sex Discrimination Guidelines 

with new regulations that reflect modern workforce and workplace realities. This proposal 

addresses many of the barriers to equal opportunity and fair pay that workers face-- pay 

discrimination, sexual harassment, lack of accommodations for pregnancy, childbirth and related 

conditions, and gender identity discrimination. We anticipate issuing a tina! rule shortly. 

In addition to working for greater pay equity for women, OFCCP's enforcement work also 

includes removing barriers to equal employment opportunity for veterans and individuals with 

disabilities, a robust program prioritizing systemic pay discrimination, and the implementation of 

new mandates addressing LGBT discrimination. During this Administration, OFCCP has 

strengthened its civil rights enforcement program; modernized its guidance; strengthened efforts 

to facilitate voluntary compliance; and built partnerships to enhance those efforts. 

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From January 2009 through December 2015, OFCCP compliance officers reviewed over 27,000 

federal contractor establishments employing more than 11 million workers. During the same 

time period OFCCP cited contractors for discrimination violations in 553 cases. Through 

conciliation efforts, OFCCP recovered $71.1 million in back pay for 133,000 workers who were 

unfairly subjected to discrimination, and negotiated more than 11,900 potential joh offers. 

OFCCP has also placed a premium on addressing systemic pay discrimination. Since FY 2010, 

when President Obama launched the Equal Pay Task Force, through the beginning ofFY 2016, 

OFCCP has recovered over $5.5 million for nearly 3,000 workers who were paid unfairly. 

Last year, OFCCP resolved systemic pay discrimination violations in STEM occupations with a 

settlement providing $234,895 to 72 female and Black workers at Savannah River Nuclear 

Solutions. 

Fairness dictates that we do more to ensure that the workforce reflects the full diversity of our 

citizenry, including those with disabilities. Along with OFCCP, our Office of Disability 

Employment Policy (ODEP) also continues to work to fully include the nearly 30 million 

Americans ages 16 and older with disabilities in our workplaces. The high unemployment and 

low labor force participation rates of people with disabilities create an urgent need for a 

coordinated and focused strategy to help these workers find quality careers with sturdy ladders to 

the middle class. ODEP advises Department agencies on how labor policies affect people with 

disabilities, coordinates disability employment policy across federal programs, and provides 

technical assistance to employers. 

Over the course of four years, through our Employment First Initiative, ODEP has provided 

technical assistance to 43 states, so they can align their policies and funding to help workers with 

significant disabilities find jobs with competitive wages in integrated settings. ODEP's 

Employment First national web portal provides both national- and state-level data to assist and 

monitor systems change across the nation in this area. 

Working with our partners at the Department of Education, HHS and the Social Security 

Administration, ODEP developed and published a government-wide strategic plan to improve 

federal service delivery to youth with disabilities, so they can transition into high paying jobs 

with career pathways. Many of the strategies in this plan come directly from ODEP's Guideposts 

for Success, a widely adopted framework used by youth, their families, state policymakers, local 

administrators, and youth service providers. 

ODEP and ETA, along with the Department of Education, continue to work together to 

implement WIOA and improve the workforce system's services to workers with disabilities who 

are unemployed, underemployed or receiving Social Security benefits. Already, we have funded 

43 projects in 27 states through the Disability Employment Initiative (DEI), strengthening 

coordination and collaboration in state and local employment and training programs to improve 

the education, training, and employment outcomes of youth and adults with disabilities 

(including individuals with significant disabilities). ODEP also successfully established the 

WIOA Advisory Committee on Increasing Competitive Integrated Employment for Individuals 

with Disabilities, which has held seven public meetings and issued an interim report with 

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recommendations for improving job opportunities for people with significant disabilities. A final 

report will be issued in September 2016. 

Improving and Protecting Worker Safety and Health 

The Department remains committed to the goal that every worker returns home at the end of the 

day- safe and sound to his or her family. The work of the Occupational Safety and Health 

Administration (OSHA) and Mine Safety and Health Administration (MSHA) reflect the 

Administration's commitment to ensuring the protections we enforce are relevant to today's 

workplace and workforce. 

Over the last seven years, OSHA has made steady and important progress to improve the health 

and safety of millions of workers. With enhanced enforcement initiatives, updated standards, and 

improved training, compliance assistance and cooperative programs, OSHA has reached millions 

more workers and employers than ever before. 

While most employers strive to make their workplaces safe, there are still too many who ignore 

workplace safeguards, or whose health and safety program is based on the hope that their luck 

will hold out and no one will get hurt. For these employers, a strong enforcement program is the 

best way to ensure compliance with the law. In this Administration, OSHA has conducted 

roughly 230,000 workplace inspections and implemented a new special enforcement program to 

focus on recalcitrant violators who repeatedly endanger workers. OSHA has used its 

enforcement tools and also worked with industry associations and worker advocacy groups to 

ensure that temporary employees receive the same safety protections as permanent employees. 

OSHA has a balanced approach to health and safety. In addition to enforcing standards, OSHA 

has greatly expanded its capacity to provide guidance to workers and employers seeking 

assistance in complying with OSHA regulations and standards. Over a quarter of a million calls 

came in to the OSHA 800 number, with almost 17,000 questions submitted by email, in FY 

2015. Over 826,000 workers completed the OSHA Outreach Training Program, while over 

52,000 students received instruction at OSHA's Training Institute Education Centers. Over 5,000 

outreach activities were held across the country by OSHA's Regional and Area Offices, reaching 

2.4 million employers and workers. OSHA's website, which receives over 200 million visits 

annually, now has pages devoted to young workers and Hispanic workers. 

OSHA's free and confidential On-Site Consultation program conducted over 27,800 visits to 

small and medium employers in FY 2015. More than 1.4 million workers were reached and more 

than 140,000 hazards reduced as a result ofthese visits. Other cooperative programs-- OSHA's 

Voluntary Protection Program and Safety and Health Achievement Recognition Program, in 

addition to the Strategic Partnership program and the Alliance Program-- all contributed to 

OSHA's efforts to work with workers, employers, unions, trade organizations and other 

stakeholders to reduce fatalities, injuries and illnesses. 

In one of our most important efforts, OSHA is in the final stages of issuing a new standard to 

protect workers against silica exposure. The long-overdue update to this 45-year-old standard 

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will prevent hundreds of worker deaths from silicosis, lung cancer and other diseases every 

year. The standard is expected to be issued shortly. 

OSHA's new severe incident reporting regulation, which took effect in January 2015, updated 

employer reporting requirements to enable OSHA to engage with employers who have had a 

serious incident, either through an inspection or a Rapid Response Investigation (RRI). The 

regulation is making OSHA aware of issues they otherwise would not have known about. In the 

first full year of the new requirement, employers submitted 10,388 reports of severe injuries, 

including 7,636 hospitalizations and 2,644 amputations. The RRI encourages employers to 

conduct an analysis of the hazards in their workplace and develop a process to address them. 

OSHA has notably strengthened the protection ofwhistleblowers during this Administration, 

creating a new Directorate for the program, greatly increasing whistleblower staff, and 

significantly expanding training and guidance for whistleblower investigators. Although the 

program, which enforces 22 laws, continues to struggle with resources, OSHA is now 

completing ten times as many whistleblower investigations as it completed in 2007. And since 

FY 2009, OSHA has awarded over $153 million dollars to whistleblower complainants. 

This Administration has also finalized rules for safety and health standards dealing with hazard 

communication, cranes and derricks, recordkeeping and confined spaces in construction and 

shipyards. OSHA has also harmonized chemical labeling practices, and we expect to continue to 

do even more- modernizing our recordkeeping and reporting system; updating requirements to 

protect workers from slips, trips and falls; making progress on improving protections for workers 

exposed to beryllium; and, helping workers exposed to infectious diseases, combustible dust, and 

other hazards. 

MSHA has a proud history of protecting the nation's miners. I have said many times: a miner 

should not have to die for a paycheck. We owe the nation's miners that much. For nearly 40 

years, MSHA has enforced the federal mine safety and health laws and conducted other activities 

to improve working conditions for miners. And since 2009, the result has been real progress, 

including historically low mining deaths and injuries. We've also seen a substantial reduction in 

the number of "bad actors" that consistently violate the law, improved compliance with the Mine 

Act, and reductions in the unhealthy mine dusts that lead to pneumoconiosis, also known as 

black lung disease. MSHA has also taken a number of meaningful actions to protect miners who 

speak out about hazardous conditions, including filing a record number of discrimination cases 

on their behalf. 

MSHA has made substantial progress since the tragic disaster at the Upper Big Branch mine in 

April 2010, by completing I 00 percent of its mandatory inspections; reducing the universe of 

chronic violators; improving compliance at mines with safety and health problems; taking a 

strategic approach to regulation that emphasizes rules with the biggest impact on mine safety and 

health; and increasing outreach to and cooperation with the mining community. 

MSHA has also taken historic steps toward eliminating the black lung disease that has claimed 

the lives of more than 76,000 coal miners since 1968. MSHA launched the End Black Lung-Act 

Now Campaign in 2009, an ambitious effort combining enhanced enforcement, rulcmaking, 

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education and outreach. Thanks to MSHA's work, the yearly average of respirable dust samples 

for the dustiest occupations has dropped to historic lows each year, as has the average 

concentration of silica, which causes silicosis. The cornerstone ofMSHA's campaign to 

eradicate black lung disease is the historic step we took to finalize the first update in decades to 

the standard that protects miners from exposure to respirable coal mine dust. This complex rule 

Lowering Miners' Exposure to Respirable Coal Mine Dust, Including Continuous Personal Dust 

Monitors was finalized in the spring of2014. I will never forget my meetings with families 

whose lives have been devastated by this disease. When I traveled to Morgantown, West 

Virginia for the announcement of the final rule, I heard from Carol Miller, whose husband had 

recently died from black lung after working in the mines since he was 18. Carol described the 

heartache of watching him suffer and decline. All the things he loved to do, even something as 

simple as walking to the end of the driveway to get the mail, were taken away from him. 

The respirable dust rule is just one of nine rules finalized by MSHA since 2009 to improve 

miners' safety and health. For example, just this past year, MSHA issued a final rule requiring 

operators to install life-saving proximity detection systems on continuous mining machines in 

underground coal mines, to avoid crushing accidents that cause death and injuries to coal miners. 

Throughout the Obama Administration, MSHA has made it a priority to protect miners who 

speak up about unsafe workplace conditions. During its Upper Big Branch investigation, MSHA 

discovered that many miners employed there, including some of the victims, were afraid to speak 

out about hazardous conditions for fear of losing their jobs. So since 20 I 0, MSHA and the 

Solicitor of Labor have filed historic numbers of discrimination complaints, including actions for 

temporary reinstatement, on behalf of miners who have faced retaliation for making hazardous 

condition complaints and engaging in other protected activity. 

By far the most important measure ofMSHA's success is, quite simply, how many miners return 

home at the end of their shift free of injury or illness. Sometimes a single day can remind us of 

the hard work necessary to ensure that miners can go home at the end of each shift safe and 

healthy. The metal and nonmetal industry experienced a day last August in which three miners 

lost their lives in separate incidents in Nevada, North Carolina and Virginia. In response, MSHA 

stepped up enforcement efforts and intensified outreach and education nationwide, including 

inspections with a focus on violations commonly associated with mining deaths, and MSHA 

tapped inspectors and training and educational personnel to share information on fatalities and 

the best practices for preventing them. Thanks to those efforts and the response of industry, 

fatalities reached an all-time low of28 in 2015 (II in coal and 17 in metal and 

nonmetal). MSHA is committed to working even harder to improve safety and health, to 

diligence and vigilance about enforcing the law against those operators that fail to protect their 

miners. 

The mission of the Department's Office of Workers' Compensation Programs (OWCP) is to 

protect the interests of workers who are injured or become ill on the job, by making timely and 

accurate decisions on claims, providing prompt payment of benefits, and helping injured workers 

return to gainful work as early as possible. 

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Over the course of this Administration, OWCP has been successful in increasing the two-year 

return-to-work rate for seriously injured non-postal federal employees from 85.8 percent in 2009 

to 88.02% percent in 2015. In addition, OWCP has worked with our partner agencies, as well as 

OSHA, to reduce the Lost Production Days (lost days per 100 employees) from 35.8 in 2009 to 

30.4 in 2015. 

OWCP has improved the quality of its claims processing and decision making in the Black Lung 

Program, which has seen a sustained increase in claim filings over the past several years. OWCP 

has taken an aggressive approach to handling not only this higher volume of claims, but also a 

decrease in qualified physicians available to conduct the complete pulmonary evaluations 

provided by the Department to every miner who files for benefits. Physician access is 

challenging given the geographic isolation of the claimant population. OWCP's FY 2017 budget 

request for a Coal Miner Health Initiative will help recruit and train highly-skilled physicians and 

modernize medical treatment authorization and bill payment processes. The request will also 

allow us to build and promote web-based communication portals to provide all parties and their 

authorized representatives with on-demand information about the status of their claims. 

OWCP has also taken many steps to improve the quality of medical evidence used in claim 

determinations. OWCP issued regulations in 2014 setting quality standards for the administration 

and interpretation of digital chest x-rays. This rule significantly expanded the number of facilities 

that can perform chest x-rays, a key diagnostic test used in determining entitlement. 

Providing for a Secure Retirement 

The Department's Employee Benefits Security Administration (EBSA) is committed to 

educating and assisting the 143 million workers, retirees and their families covered by 

approximately 681,000 private retirement plans, 2.3 million health plans and similar numbers of 

other welfare benefit plans holding approximately $8.5 trillion in assets. Throughout this 

Administration, EBSA has advanced its mission of protecting the security of retirement and 

health benefits through a combination of compliance assistance, regulations and enforcement. 

Advancing this mission- as much as any in the Department- has meant reconciling how we do 

our job with the rapid changes in the economy. Saving for a dignified retirement in the 21st 

century bears little resemblance to the path to a secure retirement in the generations before. I am 

proud of the work that this Administration has done to realign the social compact to account for 

these changes and reimagine how to help workers plan for their golden years. 

One of the highest priority projects on EBSA 's retirement agenda has been completing a rule, 

first proposed in 20 I 0, aimed at ensuring that financial advisers act in the best interest of their 

clients. This conflict of interest rule clarifies the scope of the definition of a fiduciary, so that it 

clearly includes brokers and others giving investment advice to employees in 401(k) plans, IRA 

owners, other retirement savers and certain plan sponsors. The final rule and exemptions will 

reflect feedback from a broad range of stakeholders-including industry, consumer advocates, 

Congress, retirement groups, academia, other regulatory agencies and the American people. The 

Department expects to issue a final rule and related exemptions soon. 

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In October 2015, EBSA released guidance clarifying that an ERISA pension plan can invest in 

projects or companies that serve the common good, while keeping at the forefront the fiduciary 

obligation to invest prudently and for the exclusive benefit of retirees and workers. The guidance 

also acknowledges that environmental, social, and governance factors may have a direct 

relationship to the economic and financial value of an investment. And when they do, they are 

proper components of the fiduciary's analysis of the economic and financial merits of competing 

investment choices. 

EBSA's initiatives also help promote additional savings options. One-third of American workers 

do not have access to a retirement savings plan through their employers. To increase access, 

President Obama directed the Department to support the growing number of states trying to 

promote broader access to workplace retirement saving opportunities. In November 2015, EBSA 

published a proposed regulation that would facilitate state-administered payroll deduction 

programs. Employers required by such programs to automatically enroll employees in individual 

retirement accounts would not be treated as sponsoring ERISA plans. EBSA also released 

accompanying guidance to help states interested in helping their employers establish ERISAcovered plans for their employees. 

Additionally, in order to promote innovation and access, the President's 2017 budget includes a 

proposed new grant program that will allow states and nonprofits to test more portable 

approaches to providing retirement and other employment-based benefits. The goal is to 

encourage development of new models that allow workers to carry benefits from job to job and 

that can accommodate contributions from multiple employers- something that is especially 

important in a changing economy. 

The 2017 Budget also includes a legislative proposal to allow multiple unrelated employers to 

come together and form pooled 401 (k)s, leading to lower costs and less burden for each 

employer individually. Through these "open multiple employer plans" (open MEPs), more small 

businesses should be able to offer cost-effective plans to their employees, while certain 

non profits and other intermediaries could create pooled plans for contractors and other selfemployed workers. As an added benefit, employees moving between employers participating in 

the same open MEP can continue contributing to the same plan- and receiving employer 

contributions- even if they switch jobs. And independent contractors participating in a pooled 

plan using that structure can contribute no matter which client is paying them. 

Thanks to the Affordable Care Act (ACA), 20 million Americans have gained health coverage 

and the nation's uninsured rate is now below l 0 percent for the first time ever. The ACA 

assigned the Department significant new responsibilities, as we continue to develop and 

implement insurance market reform regulations in conjunction with the Department of Treasury 

and HHS. Over the next year, the Department intends to continue implementing the ACA and 

related health coverage reforms, like the Mental Health Parity and Addiction Equity Act. 

EBSA has had tremendous success protecting employee benefits through both civil and criminal 

enforcement actions. EBSA's efforts in both areas achieved total monetary results in FY 2015 of 

over $696 million and $8.1 billion since the beginning ofFY 2009, which includes technical 

prohibited transactions and plan assets protected. When only including results from 

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investigations that directly impacted plans, participants, and beneficiaries, EBSA has returned 

more than $1.7 billion to participants, beneficiaries, and plans. EBSA's criminal enforcement 

program has referred I ,660 criminal cases for prosecution, leading to the indictments of 712 

individuals. 

EBSA's Benefits Advisors also provide assistance, education, and outreach for workers, retirees, 

and their employers. Since the beginning ofFY 2009 through the end ofFY 2015, Benefits 

Advisors have used informal complaint resolution to help more than 906,000 participants recover 

more than $2 billion out of the $8.1 billion that EBSA achieved in monetary results. Benefits 

Advisors have also conducted more than 12,500 education, outreach, and compliance assistance 

events for over 900,000 people. 

Worker Voice 

The Department cannot be the only guarantor of fairness in the workplace. Workers themselves, 

in partnership with the vast majority of employers who want to do the right thing, have an 

important role to play in ensuring that the promise of the social compact is real. One of the best 

ways to strengthen the middle class is to ensure that workers have a voice on the job. 

Traditionally, labor unions and collective bargaining have been the primary vehicle of worker 

voice. But worker voice can be expressed many ways and take many forms. Last October, the 

Department played a key role in convening the White House Summit on Worker Voice. At this 

first-of-its-kind event, stakeholders of all kinds- workers, employers, labor leaders, academics, 

economists, non-profits and more carne together for a robust conversation about how we adapt 

worker voice for the 21st century. We will continue to facilitate this conversation for the good of 

the workers themselves, but also for their employers and the economy as a whole. 

Over the course of this administration, the Office of Labor-Management Standards (OLMS) has 

safeguarded worker voice by making great strides in: efficiently and effectively increasing 

transparency in labor union, employer, and consultant operations; advancing and ensuring 

integrity in labor union finances; and increasing democracy in union elections. Despite fewer 

resources, OLMS has continued to achieve a high rate of indictments and convictions. Between 

January 2009 and December 2015, OLMS investigations resulted in 789 indictments and 766 

convictions. These cases resulted in restitution amounts of approximately $32.8 million paid or 

ordered to be paid. OLMS is getting better and better at discerning which unions are the most 

vulnerable to embezzlement and auditing those unions first. 

Beginning in 2009, OLMS identitled a number of opportunities for improvements in program 

operations and common-sense reforms. Before 2009, union officers and delegates could file their 

reports electronically but they were required to incur significant expenses for digital signatures. 

To address this cost and burden, OLMS changed to a cost-free PIN and password security system 

and adopted HTML-based forms, which can be used by all browser software. These changes led 

to a steady increase in the percentage of users filing electronically: from 20 percent in 2009 to 48 

percent in FY 2015. OLMS is working toward making e-filing possible for all forms. The agency 

continues to provide outreach and technical assistance to help unions with on-line filing, thus 

increasing transparency for the public, easing the filing burden for union officials and reducing 

government costs. 

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OLMS has also prioritized technical outreach. for example, in 2009, it launched the Voluntary 

Compliance Partnership (VCP) program, which provides technical and compliance assistance to 

internationa!Jnational unions who then work with affiliates at the regional and local level, thus 

leveraging OLMS resources in the most cost-effective manner. The VCP program now includes 

43 unions, exponentially increasing OLMS' compliance assistance reach to over 16,000 local 

unions. 

OLMS has also proposed a rule seeking to reform the reports filed by labor relations consultants 

and employers when, in a typical scenario, they make arrangements to counter a labor union 

organizing drive. The proposed rule would require that employers and consultants report 

whenever the consultants engage in indirect, as well as direct, persuader activities. This way, 

workers know that the underlying source of the employer's anti-union campaign is a paid 

outsider. A final rule is currently under interagency review. 

Our effort to ensure workers have a voice in the workplace extends beyond our borders. The 

Bureau of International Labor Affairs (!LAB) leads the Department's efforts to promote 

workers' rights abroad and level the playing field for American workers at home. Because of 

!LAB's leadership, more workers are afforded rights and protections consistent with 

international labor standards. Fewer children are trapped in exploitative child labor. Fewer 

workers are trafficked into forced labor. And more families have decent livelihoods within their 

reach. !LAB has made this progress through negotiation, monitoring, and enforcement of traderelated labor obligations, as well as technical assistance, policy engagement, and research. 

!LAB has been integral to the Obama Administration's historic free trade negotiations and 

enforcement actions, including: the groundbreaking April2011 Colombian Action Plan Related 

to Labor Rights; the first-ever labor case under a U.S. free trade agreement (FTA), against 

Guatemala under the Dominican Republic-Central America Free Trade Agreement (CAFTADR); the December 2015 Monitoring and Action Plan (MAP) with Honduras to improve 

Honduran workers' rights under CAFTA-DR; the strongest FT A labor provisions in history in 

the Trans Pacific Partnership (TPP); and TPP consistency plans with Vietnam, Malaysia, and 

Brunei Darussalam that detail reforms those countries must make for their labor law and 

practices to conform with TPP requirements. 

In 2014, !LAB launched a Labor Attache Program to post !LAB personnel in nationspreference program beneficiaries and trade agreement parties -- with important labor challenges. 

The attaches currently in Bangladesh and Colombia and soon-to-be-added in Vietnam and 

Honduras- are enhancing !LAB's capacity to monitor and enforce trade-related labor 

requirements. 

!LAB has complemented these efforts with targeted, comprehensive technical assistance to help 

U.S. trading partners comply with FTA obligations, especially through strengthened labor law 

enforcement. During this administration, !LAB has invested more than $100 million in technical 

assistance activities, including trade-related labor capacity building projects in U.S. FT A 

partners, including Colombia, Jordan, Mexico, Morocco, and Peru. That includes a $7 million 

project in Honduras to help implement the MAP. 

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During the Obama Administration, ILAB has remained the world's largest funder of projects to 

combat the worst forms of child labor, adopting a holistic approach to ensure sustainable efforts 

that address child labor's underlying causes. These projects provide children engaged in 

exploitative labor, or at risk of entering child labor, with education and vocational training. They 

also provide livelihood services to vulnerable families, as well as training for labor inspectors 

and law enforcement officials on countries' child labor laws. 

!LAB has invested significantly during this Administration to make its research and reporting a 

more valuable policy tool, a foundation for engaging governments on labor concerns and a basis 

for evidence-based decision-making. !LAB's annual flagship report, the Findings on the Worst 

Forms of Child Labor, evaluates approximately 140 governments' efforts to combat child labor. 

This Administration expanded the report to include country-specific assessments of progress and 

concrete recommendations for improvements. In 2015, !LAB launched the U.S. government's 

first mobile app and open data on human rights-- Sweat & Toil: Child Labor, Forced Labor, and 

Human Trafficking around the World-- making !LAB research more widely and easily 

accessible. 

The President's 2017 Budget request will strengthen !LAB's efforts to monitor and enforce 

the labor provisions of new and existing free trade agreements, while increasing the amount of 

funding for capacity-building technical assistance to help U.S. trade partners meet their 

labor obligations under FTAs. This will more than double the number of staff working on 

the monitoring and enforcement of labor provisions of FT As. It also restores the $5 million cut 

from FY2015 levels for technical assistance and increases the minimum amount of technical 

assistance grants required for workers' rights by $3 million. 

Measuring Our Work 

To assure Congress and the American people that the Department is a strong steward of taxpayer 

dollars, it is critical that we measure the effectiveness and impact of our programs. The Chief 

Evaluation Office (CEO), the first ever in a cabinet agency, coordinates the Department's 

evaluation agenda: designing, initiating, and carrying out the most rigorous and credible 

evaluations possible to accumulate evidence on the performance, outcomes and impacts of our 

programs. Consistent with professional evaluation practices and the federal government's 

guidelines around scientific integrity and a commitment to evidence-based policy, the CEO is an 

independent evaluation office, with rigorous, independent, third-party evaluations and the open 

and transparent release of reports. 

The CEO has expanded in size and scope since it was established in 2010, thanks largely to 

Congress' establishment of budget set-aside authority for CEO evaluations. Several of our 

agencies also have evaluation or research and analysis activity, now carried out in collaboration 

with the CEO, and nearly every competitive grant program has an evaluation component so we 

can learn "what works". The CEO also houses the evidence-based evaluation clearinghouse 

(CLEAR: The Clearinghouse for Labor Evaluation and Research), which coordinates with 

clearinghouses operated by other federal departments. 

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The Department's reputation as a leader on evidence and evaluation continues to grow. The 

Results for America 2015 Evidence Index rated us the top agency on using evidence and 

evaluations, and the White House Initiative on Evidence recognizes the Department's 

commitment to evaluation and data as a model for other agencies. Some examples of a few 

policy-relevant studies include: the Evaluation of Employment Services for Veterans, a Survey 

of the Accessibility of American Job Centers to Persons with Disabilities, and an Evaluation of 

OSHA's Voluntary Compliance Assistance to Finns. 

Evidence also includes statistical analysis. The Bureau of Labor Statistics (BLS) is the principal 

federal statistical agency responsible for measuring labor market activity, working conditions 

and price changes in the economy. Its mission is to collect, analyze, and disseminate essential 

economic information to support public and private decision-making. Since 2009, BLS has more 

than doubled the number of indexes, estimates and other published information it produced each 

year. For example, the Current Population Survey (CPS) added tables on veterans, persons with 

disabilities and the foreign-born to the monthly Employment Situation news release. The CPS 

expanded its annual report on labor force characteristics by race and ethnicity to include data on 

American Indians and Alaska Natives, Native Hawaiians and Other Pacific Islanders, as well as 

persons of two or more races. Detail on labor force characteristics of Hispanic and Asian groups 

was also added to the report. 

The Consumer Price Index added II new indexes in an effort to break out more consumer goods 

and services. The Office of Price Statistics introduced experimental disease-based price indexes 

to provide alternative inflation estimates for medical output and consumption. These indexes 

give data users additional ongoing information about the evolution of the nation's healthcare 

system. Also, the Employee Benefits Survey published data on employer-sponsored benefits 

extended to unmarried domestic partners. 

Across programs, BLS continues work on the expanded use of"big-data'' sources and 

techniques. Examples of projects underway include: expanding the use of machine-coding for 

text fields like occupation titles; web-scraping for product price and quality data; and matching 

data collection efforts with administrative data. BLS also has enhanced the accessibility of its 

data by adding new interactive charts and other visualization options for many of its 

publications, releases and data series. 

The 2017 President's Budget will allow BLS to continue the production of data series while 

supporting several new products. That includes an annual supplement to the CPS to collect 

information relevant to labor force trends, like the growth ofthe on-demand economy and the 

growing relevance ofwork-life balance issues. The Budget also includes funding for the first 

year of activities for a Survey of Employer-Provided Training, which will fill a key gap in 

knowledge about the workforce system. The Budget includes funding for the modification of the 

Consumer Expenditure Survey, to support the Census Bureau in its development of a statistical 

poverty measure to complement the standard measure Census has used since the 1960s. 

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A Strong and Engaged Workforce and Modernized Information Technology 

The Department cannot accomplish its goals without maximum engagement of its greatest 

resource: our workforce. The career staff of DOL is the spine of this agency, and it will be 

responsible for implementing this Administration's initiatives long after I am gone. When I 

started at the Department in July 2013, we were tied for second-to-last among large federal 

agencies in the Partnership for Public Service's Employee Viewpoint Survey. I am proud that we 

have been the "most improved" large agency in the federal government two years in a row, 

moving from 17th place out of 19 large agencies to 8th. This progress is a testament to our 

commitment to listen to our workforce at all levels of the organization, finding ways that we can 

better support them to get their jobs done whether it involves flexible schedules, more training, 

new leadership programs, or innovative ways to accomplish the work. A skilled, committed, and 

engaged workforce with high job satisfaction will be best able to implement the Department's 

mission over the long term. 

Updates to the Department's information technology goes hand-in-hand with our ability to 

realize greater resource efficiency, provide the public with digital services akin to those of the 

private-sector, and protect citizens' data. Over the past few years, DOL has successfully 

implemented several Department-wide efficiency, productivity and security improvements with 

limited IT Modernization funding, including moving our entire workforce to commercial cloud 

email services, and initiating the "IdeaMill" employee suggestion box, which helped DOL 

improve its standing as a desirable place to work. 

However, DOL faces severe risks by the continued degradation and failure of the existing 

outdated legacy network infrastructure. The fragile and outdated network infrastructure poses a 

reliability and security risk for all DOL agency operations and undermines the Department's 

ability to do its work. To this end, the FY 2017 Budget request includes $63 million to 

modernize and transform our aging IT infrastructure. These investments are vital to the 

Department's effort to develop up-to-date communications capabilities, so we can provide better, 

faster, smarter service to the American public, while ensuring the security of its systems. 

Conclusion 

I am proud of what we have built at the Department of Labor over the course of this 

Administration. I believe our record of accomplishment is impressive, but our agenda for the 

remaining year is also ambitious. There are 310 days until the weekend, and I intend to sprint to 

the very end. The important unfinished business demands that we do nothing less. I am eager to 

continue this work to build on this strong recovery, to ensure that we create shared prosperity 

and an economy that works for everyone. And I look forward to doing that work with all of you. 

Thank you very much. 

### 

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42 

Chairman KLINE. Thank you, Mr. Secretary, for your testimony, 

your kind words about my retirement. I find that when you announce your retiring, you get friends everywhere and I do not understand exactly what that means. 

Let me start, Mr. Secretary, by thanking you for your support 

and your hard work as we push through the bipartisan Multiemployer Pension Reform Act in the closing days, literally, of 2014, 

December. 

I think that action has helped secure the retirement of millions 

of workers and retirees, and you and the rest of the Administration 

were instrumental in its passage. Our work is far from over. As the 

administration noted in its budget, further reform is needed to 

strengthen the finances of the Pension Benefit Guaranty Corporation, which you chair. We share the administration’s commitment 

to ensuring that this important Federal backstop is well funded, 

but we need to do even more, so I am committed to working with 

you and Treasury Secretary Lew, Ranking Member Scott, and others to reach an agreement on a package of reforms that will shore 

up the PBGC and give employers and workers options for new benefit plans, such as composite plans. So I am committing to you and 

to my colleagues here that I am fully engaged in trying to get this 

done, but time is growing short, so I am asking for your commitment, sir, to working with us to try to get these reforms finished 

this year. 

Secretary PEREZ. We have had a number of conversations both 

with you and with Leader Pelosi and over at the White House and 

at the PBGC, and we have a team of folks that have already been 

engaged bicamerally and in a bipartisan way to address these 

issues. As you know, the multiemployer pension system at the 

PBGC is in the red in a big way and we recognize that there are 

many tough decisions to be made and we commit to building a big 

table so that we can have and continue the dialogue that we have 

been undertaking. 

Chairman KLINE. And I appreciate that and I absolutely take 

you at your word. Just a reminder to all of us, this has to be a bipartisan effort, and we have to get with the program as they say 

because we are running out of time and it would be a shame to 

start all over. On another subject, we are looking at the joint employer policies and the discussions surrounding them that are coming from your department and from other agencies. The Equal Employment Opportunity Commission has filed an amicus brief with 

the National Labor Relations Board and the Browning Ferris supporting a broader definition of joint employer, wage and hour, and 

your department is engaged. I think the actions within your department as well as those taken by the NLRB and EEOC demonstrate that the administration is aggressively trying to expand 

the definition of joint employer across all labor and employment 

laws and, frankly, without concern for the negative impact of the 

franchise model that has served us so well. 

I am greatly concerned by the likely impact of these efforts on 

workers and their employers, particularly smaller businesses. Can 

you explain DOL’s role in what seems to be the administration’s 

concerted effort to expand the definition of joint employer? 

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Secretary PEREZ. I would respectfully disagree that we have been 

attempting to expand the definition of joint employer. We have 

been applying joint employer both in the OSHA context and in the 

Wage and Hour context when the facts so support. So, for instance, 

we had a case involving a gentleman named Daquan Davis. He 

completed his Job Corps program, he got a job at Bacardi Rum 

down in Florida. 

His first day on the job was his only day on the job because he 

was so ill-trained by the company, there was a job service through 

which he got the job, he was so ill-trained that he literally died on 

the job, day one. And our investigation in that case showed that 

both the staffing agency that placed him and the company where 

he died on their assembly line that day bore a responsibility, so 

those were the facts in that case. We follow the facts and go where 

the facts lead us. 

Chairman KLINE. Well, that is kind of a scary story and one we 

do not like to hear, but I can tell you that there is a great deal 

of concern in the business community by franchisors and 

franchisees that it looks like there is an expansion of that definition. I understand the Wage and Hour Division requested a 22 percent increase in its budget, the largest increase within your department, and proposes to hire 300 full-time employees to develop ‘‘corporate and enterprise-wide’’ enforcement. What is meant by corporate and enterprise-wide enforcement? 

Secretary PEREZ. Well, the Wage and Hour Division has a very 

critical mandate, and their mandate is to make sure that when you 

work a full day, you get paid a full day wage. We had a study conducted recently just in two States that showed that the amount of 

wage theft was $1 billion alone in the State of California and New 

York. Wage theft is a huge problem in this country. The Wage and 

Hour Division has worked very carefully and, by the way, very 

closely with employers because we get complaints frequently from 

employers about the fact that other employers are misclassifying 

employees and it creates an unlevel playing field because they cannot compete for contracts when you have someone else cheating, 

which is why we have memoranda of understanding with 29 States 

ranging from Utah, Texas, Arizona, to Massachusetts, as well. So 

I believe firmly in the work of the Wage and Hour Division and we 

work very collaboratively and when— 

Chairman KLINE. Well, my time has expired, and I have got to 

gavel you and me down at the same time. I am re-expressing my 

concern about this increase in the number of employees and if the 

Wage and Hour might be contemplating the expansion of the enforcement of the franchisor/franchisee relationship. Those concerns 

remain, and I am sure we will continue to talk about it. Mr. Scott, 

you are recognized. 

Mr. SCOTT. Thank you. Thank you, Mr. Secretary. You mentioned wage theft. How much of that is due to the fact that many 

employees do not even get a pay stub so they cannot calculate what 

their wages would be? 

Secretary PEREZ. Well, that is certainly part of the challenge in 

wage theft, Congressman Scott, and I know when we commissioned 

that study, a lot of folks who are victims of wage theft do not even 

know they are victims of wage theft because they have a difficulty 

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44 

figuring that out. We have 135 million workers, 7 million employers, and so trying to do the work in the Wage and Hour Division 

with the complement of resources we have creates challenges, undeniably. 

Mr. SCOTT. Thank you. You had mentioned the Conflict of Interest Rule, one of the problems in the discussion is that the rule is 

not final. When can we expect a final rule? 

Secretary PEREZ. Well, the rule was sent to OMB, I believe, six 

weeks ago or something like that. I may be off by a couple of 

weeks, so we hope to bring it to conclusion as soon as OMB completes their review, but sometime in the near future. 

Mr. SCOTT. And an alternative was suggested one introduced by 

the gentleman from Tennessee. Are you familiar with that proposal? 

Secretary PEREZ. Yes, I am. 

Mr. SCOTT. Why is it insufficient? 

Secretary PEREZ. Well, we have reproposed—the proposal right 

now is a reproposal because we introduced a regulation in 2010 

and then we withdrew that regulation. And I made a commitment 

when I was nominated to take this slowly, build a big inclusive 

tent, listen to people like Congressman Guthrie, who had a concern 

about ESOPS. So we took ESOPS out of our proposal and we have 

moved forward in a very deliberate way, in a very inclusive way. 

And the problem right now that I have is we are six years into this 

and our goal here, our North Star, is to ensure that we have an 

enforceable best interest standard. And meaning no disrespect to 

Congressman Roe, for whom I have great respect, and others, I actually think that those bills actually move the status quo backward 

in material respects, and so we need to move forward and we have 

had a very inclusive process. Every time someone has said can you 

talk to one of my constituents, we have done it, and sometimes we 

have done it two, three, four times because every time I talk to 

someone, I learn more and we become more informed. 

Mr. SCOTT. One of the groups that has the trouble getting jobs 

would be ex-offenders. What does your budget do to help ex-offenders find jobs? 

Secretary PEREZ. We have a remarkable—one of the most exciting things about this job is really the bipartisan coordination that 

we have done through our so-called RExO grants which have enabled us to provide remarkable opportunities and, in addition to 

that, we have really been at the tip of the spear on innovation, so 

we have worked with cities and counties to put one-stop centers in 

city and county jails. We did that in Montgomery County when I 

was in local government and if I brought the warden here today, 

he would tell you that made his jail safer, that enabled people to 

get more jobs. And the most important thing we could do, or one 

of the most important things we can do, if we wanted to reduce recidivism is make sure that when people come out of jail, they have 

the skills to compete for the jobs of tomorrow, and so I am very excited about what we are doing. We work very closely with the Department of Justice as well, so that we can synergize our grantmaking, and we work with State and local partners, our nonprofit 

partners, our faith leaders as well, and we are making tremendous 

CEWDOCROOM with DISTILLER

45 

progress, and our budget request does include funding to continue 

to ramp that up. 

Mr. SCOTT. Thank you. Can you say something about the adequacy of criminal penalties and mine safety violations, particularly 

when someone knowingly violates safety regulations, placing workers at risk of serious injury or death? 

Secretary PEREZ. Well, those issues are the case both in the 

OSHA context and in the MSHA context. We had a horrific case 

in the OSHA context where a worker was literally dissolved to 

death and as a result of that, there was a spill into the nearby 

lake. Our fine was something like $50,000 and the EPA fine for 

killing the fish was in the millions, so the fish had more protection 

than the people. And in the mine safety context, the Upper Big 

Branch disaster is probably a notable example of chronic negligence 

all the way up at the top of the organization. And the reason that 

happens in cases like that is because when you perceive that there 

is no more than a slap on the wrist, then you tend to violate the 

law. If you have a speed limit sign that says 45 miles an hour, parentheses, self-enforcement, you are going to have a lot of speeding. 

Chairman KLINE. Gentleman yields back. Dr. Foxx? 

Mrs. FOXX. Thank you, Mr. Chairman, and welcome Secretary 

Perez. I am extremely concerned by the Department’s repeated 

delays in issuing regulations implementing the Workforce Innovation and Opportunity Act, or WIOA. You have been very complimentary about it, I appreciate the chairman’s positive comments. 

The most recent delay of final regulation is even more concerning 

given the Department will be reviewing and approving State plans 

prior to the issuance of final regulations. 

This includes negotiating levels of performance which will be 

used to determine whether a State meets the requirements of the 

law. It is outrageous that the Department would hold States accountable to rules that have not been finalized. 

Given final regulations have yet to be issued, what basis is the 

Department using to approve State plans? 

Secretary PEREZ. Congresswoman Foxx, as I mentioned to you in 

our phone call, we have been working very, very closely with States 

since the passage of WIOA, and I am very excited about the work 

that we have done. We did literally 41 pieces of operating guidance, 

28 technical assistance webinars, and your teams have been involved in every step of the way. 

The majority of WIOA is already in place. It was implemented 

a year ago. What remains are the accountability mechanisms. And 

the good news there is because of the work that we have been 

doing together with States and with the help of your teams, you 

look at the number of States, over 40 States have WIOA compliant 

State boards. Roughly half of the States have already prepared 

draft plans, and, most importantly, the stovepipe implosion that 

WIOA contemplates, making sure that we build one big sandbox of 

opportunity so it is not the Education Department one way and the 

workforce people another way, making sure we are working together. We have already issued State plan guidance that tells 

States what they need to do and we talk to them literally on a 

weekly basis. So I am very excited about the progress and I am 

very appreciative because the regulations were over 1,800 pages 

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46 

and they took a lot of work and nobody took any Thanksgiving or 

Christmas holidays among our career teams and, frankly, I think 

WIOA is a good news story because we are moving forward, we are 

moving forward together. There is a ton of excitement in the field 

and I am very proud of the work that we are doing and we look 

forward to continuing that collaboration with you and others. 

Mrs. FOXX. But, Mr. Secretary, these things are being negotiated 

one-to-one by you and I think that exhibits a cavalier attitude on 

the part of the Department regarding the Administrative Procedures Act and the requirements of the law relating to rulemaking. 

You know, Congress is prescribed a specific process for the promulgation of regulations to allow for public comment and congressional 

oversight. The de facto issuance of final regulations through the approval of State plans circumvents this process by making the rules 

effective before providing Congress with the opportunity to review 

them. And even in your own comments today, and I have made a 

list of things you all do, executive orders, guidance letters, program 

letters, notices, administrator’s interpretation clarifying, memorandum, directives, reporting requirements, enforcement guidance 

documents, corporate and enterprise enforcement, technical assistance webinars you just mentioned, so all of this goes around the 

rulemaking process which we think you should be doing. And it appears to us that you do not want to publish official rules so that 

the public can comment on them. You do new programs—the chairman mentioned new programs that we see as a way to get around 

this and this morning, I had a meeting with a manufacturer from 

my district and he is on one of the boards and he said getting 

change on those local boards is like pushing a string. 

That they cannot get the changes because they do not have the 

guidelines and the accountability measures. That is what we want 

to see, what are the accountability measures for these programs? 

Secretary PEREZ. With all due respect, we have been anything 

but cavalier. We have been working relentlessly with States. And, 

as someone who ran a State agency, one of things that always disappointed me was when the Federal Government would issue guidance or regulations without including us, and so my direction to 

the team—and remember Congress debated the reauthorization of 

the Workforce Investment Act for 10 years and then after that 10- 

year discussion gave us 1 year to do everything that we needed to 

do and we built a very inclusive table. 

The State plan guidance that I am referring to was made public 

and we took public comment on it. Our final rules will be out in 

June, and we have been working very closely with your teams, with 

others, and we have had a remarkably constructive relationship. 

There is no effort or intent to do anything other than make sure 

we implement every aspect of the Workforce Innovation and Opportunity Act to the fullest extent possible. And the good news, Congresswoman, is we are making tremendous progress. We are building that skills superhighway. We are building an ecosystem where 

for the first time in States across this country, you have the folks 

who administer TANF are talking to the folks who are doing education, are talking to the folks who do the workforce, and you see 

the number of States who are coming in with those unified plans. 

That is exactly what you wanted and that it is a good thing. 

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47 

Mrs. FOXX. Thank you. 

Chairman KLINE. The gentlelady’s time has expired. Mr. Courtney? 

Mr. COURTNEY. Thank you, Mr. Chairman, and thank you, Mr. 

Secretary, for your testimony and your, in my opinion, amazing 

service over the last couple of years. I appreciate your shout out 

to Katherine Hackett from East Haddam, Connecticut, who is really kind of an iconic story of the Great Recession, who again worked 

her whole life, raised two great sons who are officers in the U.S. 

military and, unfortunately, lost her job and was really struggling. 

The outreach, as you point out, in terms of helping her find the 

right connection as well as supportive employment programs which 

kind of gave the employer that extra boost to get her back into the 

workforce, which is not totally, withered away, and she is now employed full time doing a great job as a business manager at an orthopedic office which maybe your knee might get some consultation 

there if you need it. If you are in the territory. 

Secretary PEREZ. I am taking notes. 

Mr. COURTNEY. Again, I just want to follow up on the last round 

of questioning, which is the WIA Act, which I give Chairman Kline 

all the credit in the world for moving a bill, a law that had not 

been changed since the Clinton Administration and modernizing 

the structure and the focus has been, in total, hitting all cylinders 

in Connecticut. 

Down the hall right now, the Secretary of the Navy is talking 

about the fact that in the last seven years, the Navy has put in 

under contract 84 ships and submarines. The prior eight years, the 

prior administration, it was only 41, so you can imagine what that 

means in terms of the industrial base, whether it is Connecticut or 

Virginia or California, is that we have really had to move fast in 

terms of metal trades, engineering, and design. In January, Electric Boat announced 1,500 hires this year to again accommodate 

that demand signal from the Navy and it has been all hands on 

deck, which the WIA and the workforce board is today producing 

results, which would not have been the case without passage of 

that law and without by the way the omnibus which has given the 

Workforce Innovation Funds that are now combining community 

colleges, tech schools, and the employer who are now working together to fill this huge workforce need. 

I mean, if you go online today, there is probably about 300 or 400 

job openings right now as we are sitting here in this room. That 

is just for the shipyard; if you go there are 470 suppliers in Connecticut and there are thousands across the country. They were in 

town just a couple of weeks ago, the submarine industrial base coalition, so the timing of this new mechanism, as well as the resources out there for again, just take one little sector which is shipbuilding, a much neglected part of the U.S. economy. You guys are 

at the center of trying to solve that problem, and I am sure that 

is happening in other parts of the country as well as eastern Connecticut, and I do not know if you want to comment further. 

Secretary PEREZ. Well, I remember my trip vividly, Congressman 

Courtney, to Electric Boat. I remember my trip with Congresswoman Foxx to a number of locations in her district. I remember 

my trip with Chairman Rogers to West Virginia, and I met a bunch 

CEWDOCROOM with DISTILLER

48 

of displaced coal miners who are now working in coding at a place 

called Bit Source and their motto was, ‘‘From coal to code.’’ And 

what all of those three visits have in common is that the workforce 

system is being a remarkable engine of partnership, innovation, 

and success. We have 5.6 million job openings right now and every 

conversation I have with employers is a good conversation. 

I am bullish about the future. I want to grow my business and 

one of my biggest challenges is making sure I have the skilled 

workforce to compete. One of the best ways to address wage stagnation is to up-skill people and that is why I see happening across 

this country in red, blue, that is totally irrelevant to this conversation. It is very exciting and that is why I am so appreciative of the 

work that you have supported in apprenticeship because that is another way. 

Apprenticeship is the other college, except without the debt, and 

so there is so much we can do to make sure we are building the 

skill superhighway so that we can help people who want to punch 

their ticket to the middle class and employers who want to grow 

their business and this is really going to be one of your legacies, 

Mr. Chairman, as the chair of the committee, is building that skill 

superhighway. 

Mr. COURTNEY. Thank you. And its again, I talked about maritime and the same is true in aerospace both in the civilian and 

military side. We are going to have huge workforce needs out there 

and there really just is no other mechanism other than WIA and 

the Department of Labor to help employers fill those really good 

paying, high value positions. And I yield back. 

Secretary PEREZ. I agree. 

Chairman KLINE. Gentleman yields back. Dr. Roe? 

Mr. ROE. Thank you, Mr. Chairman, and thank you for being 

here. 

Secretary PEREZ. Good morning sir. Good to see you. 

Mr. ROE. I am going to start by just bringing over some facts. 

Today, 20 percent of Latinos have greater than $10,000 in retirement and 29 percent of Americans, according to GAO, have nothing 

for retirement. Some studies show as much as 50 percent of people 

have no retirement savings. 

So I think—and 75 percent of all African Americans are in the 

bottom quartile of retirement. And I do not believe that your rulemaking that you are doing on fiduciary and other things, I do not 

think your intention is to decrease financial advice of low-income 

investors. I do not believe that and I do not think that you believe 

that, but there are some facts out there that we cannot ignore now. 

And for many years, you have stated that your goal is promoting 

the Department’s fiduciary rulemaking was to ensure that all retirement advisors act in the best interest of savers when giving investment advice, and dating back to our first hearing in July of 

2011, I publicly agreed with that goal. Today I still agree with it. 

In fact, Republicans and Democrats have long agreed that we need 

to look at ways to strengthen protections for those saving for retirement, and that is why I am disappointed that the Department publicly opposed the bipartisan legislation Affordable Retirement Advice and Protection Act and its companion, the SAVERS Act. 

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This legislation would make the stated goal of best interest 

standards a reality without prohibiting advice, the so-called best 

interest contract exemption. DOL proposed to make it harder for 

working families to save and plan for retirement. We have no indication that the final rule will be any different and that is why Congress should act in a bipartisan way and let me just give you a couple of things. 

Washington Post just said, I think it was yesterday in an editorial, supporting the fiduciary rule is having more plusses than 

minuses. I think they would definitely support my bill that the exemption is unworkable. The investment industry’s strongest point, 

that its proposed exemption and the administration offered to placate opponents is so vague and unworkable that few, if any, companies would take advantage of it. And a study just published from 

the UK, I think this week said we believe and this is in the UK 

that the new regulation they passed in 2013 has brought about 

positive step changes in the quality of advice available to those 

with larger amounts to invest, which is what we said all along. 

However, steps need to be taken and make the provision of advice 

and guidance to the mass market more cost-effective and, at 

present, this high standard of advice is primarily accessible and affordable only to the more affluent in society. Would you now reconsider, with this new information, your opposition to our commonsense legislation? 

Secretary PEREZ. Congressman, let me say a few things. Number 

one, in our Ozzie and Harriet universe, this issue was irrelevant 

because people work 30 years, they had a defined benefit plan, and 

at the end of that 30 years, they had a pen, a party, and a pension. 

Today, in a world of the $11 or $12 trillion of IRAs and 401(k)s, 

people are responsible for their own decisions. And as Jack Bogle, 

as I noted before, said when you put your customers’ interests first, 

it is good for your customers and it is good for business. 

You said something that I wanted to correct, which is that you 

indicated that there is no indication that the final rule will be different. When we withdrew our first rule, we undertook a series of 

meetings and listening sessions. Our first rule, for instance, had a 

provision pertaining to ESOPS. We heard a lot about that. We 

heard a lot of concerns and as a result of that, our NPRM took that 

out. I have said repeatedly and publicly our North Star is an enforceable best interest standard— 

Mr. ROE. Specifically, the best interest contract exemption. I appreciate that change in the rule, but what about the best interest 

contract exemption, which seems to be unworkable? 

Secretary PEREZ. Well, again, our North Star is an enforceable 

best interest rule, best interest standard. We heard from a number 

of people who said there is a more linear path to that. Our response: show us the path, and that is why we got 300,000 I think 

comments. We read every single one of them and I look forward, 

at the conclusion of our process, to briefing you and explaining to 

you here was the proposed rule, here were the comments we got, 

here are the changes we made. And when we reach the end of the 

process, I commit to you that we will do that with you and with 

anyone else who has an interest. 

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50 

Mr. ROE. I am glad to hear. The independent investment firm 

Morning Star originally estimated that your proposal would cost 

2.4 billion every year in compliance cost which will be passed on 

to me, the retirement saver. 

Moreover, the Morningstar Report also said that the wealth management firms would no longer serve low-income savers currently 

holding up to 600 billion low-balance IRAs. The big chunk of that 

business will go to robo-advisors, which I think is a bad idea. 

But before my time is expired, I did want to say one thing. And 

this is off the fiduciary rule, but the most productive—I was in Beijing, China, 2 years ago with the committee; 1.4 billion people live 

in China and 1.4 billion people do not produce as many goods and 

services as the American worker does with 300 million people. The 

most productive worker in the world is the American worker and 

we need to be telling our worker that more because they feel very 

beat down. With that, I yield back. 

Chairman KLINE. Gentleman yields back. Mr. Sablan? 

Mr. SABLAN. Thank you very much, Mr. Chairman, and . . . 

Secretary PEREZ. Good morning, good to see you again. 

Mr. SABLAN. Thank you for being here, Mr. Secretary Perez. The 

Northern Marianas Mariana Islands as you know, my district faces 

a different problem than much of America. We actually have too 

many jobs and not enough workers and it is not as if people can 

get in their car and drive across the State line or county line and 

be there to occupy these jobs. Well, not enough U.S. workers, so we 

have to bring in about 10,000 workers from Asia to support our 

economy. 

Two years ago, Mr. Secretary, you extended a program that allowed those foreign workers into the Northern Marianas and I 

think that was the right decision. Personally, I would prefer we did 

not need these workers, that we had enough, but I thank you for 

doing so because I also know that you probably had the same personal preference as I do, but you based your decision on a study 

by economists and others in your department. And you concluded 

that there were not enough U.S. workers to serve the economy in 

2014 and would not be for at least another five years. 

I have three questions actually. First, can you tell us what your 

department is doing now to help develop more U.S. workers in the 

Marianas, either through training people already there or by making the job opportunity known to U.S. workers, elsewhere in America? 

Secretary PEREZ. Sure, over the last four fiscal years, the CNMI 

has received roughly $6 million in grants from the Department and 

those grants are designed to do for the workforce system there 

what we are doing elsewhere across the United States. We look forward to working more—There are number of competitive grant opportunities, and I am more than willing to have our ETA staff talk 

to you about competitive grant opportunities. We have a cadre of 

career staff that reviews those requests or submissions and we also 

visited the CNMI in 2015 or 2016 to provide technical assistance, 

so we want to make sure that we do everything in our power to 

help. 

Mr. SABLAN. We appreciate it and we need all the help you can 

give us, Mr. Secretary. My second question is, in extending the forCEWDOCROOM with DISTILLER

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eign worker program, you requested the commonwealth government update your department every year about its ‘‘efforts to locate, educate, train or otherwise prepare U.S. citizens to work in 

the Marianas.’’ This update were so your department could be prepared to decide about extending the foreign work program beyond 

2019. The law no longer allows you to extend the program. I understand that, but are you still expecting to get the updates, Mr. Secretary? 

Secretary PEREZ. Well we certainly, Our North Star here is U.S. 

workers. Anything we can do to help U.S. workers is what we try 

to do. We recognize that there were not enough so that is why we 

granted the transition until 2019, and those reports are very critical in enabling us to make that judgment about the North Star 

that I referred to. How are things going with the development— 

Mr. SABLAN. Are you expecting to get the updates now that the 

2019 date is no longer flexible? 

Secretary PEREZ. Yes, we are expecting to get the updates. 

Mr. SABLAN. Okay, thank you, thank you very much, sir. And so 

here is my final question, Mr. Secretary. I know the government 

has been working on a study of what our labor needs will be going 

forward. They are looking at development plans proposed to demographics, the skills that we currently have, and I suppose that we 

can use this information to update you, but it is also for their own 

planning purposes and it must be very similar to the analysis that 

your department did prior to advising you to extend the foreign 

worker program. And so my question is whether you would be willing to share with the Marianas commonwealth government the 

technical expertise you have in your department to do this work, 

that so we do not have to reinvent the wheel, as they say? Maybe 

a yes— 

Secretary PEREZ. We would look forward to working with you in 

any way that we can to help build a strong economy in the islands. 

Mr. SABLAN. I appreciate that and whatever you could do to help 

us would be very—the labor needs and training efforts will certainly be helpful to us here in Congress even in assessing whether 

to extend the foreign worker program, the CW as we call it, which 

is something I think we would have to look at probably in the next 

Congress. Mr. Secretary, thank you very much for your service to 

our country, and, Mr. Chairman, I yield back my time. 

Chairman KLINE. Thank you, gentleman. Mr. Walberg? 

Mr. WALBERG. Thank you, Mr. Chairman, and welcome, Mr. Secretary. 

Secretary PEREZ. Morning, morning Mr. Chairman. Good to see 

you again. 

Mr. WALBERG. You are a long way off down there— 

Secretary PEREZ. It does look a few time zones away I must 

admit. 

Mr. WALBERG. Especially looking through Mr. Byrne’s head here. 

Secretary PEREZ. Well, he has hair so unlike me, so it might 

make it a little harder. 

Mr. WALBERG. I am jealous. Mr. Secretary, there are many small 

retail and restaurant businesses who employ younger managers, 

who currently earn salaries that are less than 50,000 per year. I 

am not concerned that we would increase the overtime. It was 

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probably needed, the wage, but 50,000 causes me concern because 

as I look at some of the reports, over 50 percent of retail managers 

are female and many are working mothers who appreciate the 

flexibility and other things that come with salaried status, the resume builder, the experience opportunities as well as using their 

skills allowing these managers highly valued quality time with 

their children. 

The pending overtime regulation would require that many of 

these managers be converted to hourly non-exempt status which effectively eliminates much of the flexibility working women and, 

may I add, men value. Is this outcome the outcome that the President and your department desire in regard to the flexibility in particular as it would impact managers who are currently exempt and 

accustomed to having greater flexibility than their non-exempt 

counterparts? 

Secretary PEREZ. Sure, because of the status of the reg, there are 

limits to what I can say, but what I can say is this, nothing requires hourly status. You can be salaried and get overtime, there 

are a number of ways to do it and the process that we undertook 

was to make sure that we sat down and listened to—and before we 

even did the formal notice and comment, I personally participated 

in a number of meetings with retailers, large, small, in between, 

and I asked them among other things, what did you do back in 

2004 when the Bush Administration changed the rules so that we 

could learn from that and that was very instructive. I met a person 

who works 70 hours a week and I remember somebody asked when 

was the last time you had a vacation and they said vacation? Vacation, vacation is when I work only 40 hours a week. And what we 

learned is there are a lot of folks who are working 20, 30 hours 

and, frankly, those hours are effectively not compensated because 

of some of the situations. 

Mr. WALBERG. But certainly you also heard testimonies I have 

heard all across my district of people who understand that. That 

is part of being salaried. There are also some that we have had in 

front of us who were assistant managers who during times worked 

less than 8 hours a day based upon the flexibility they had and 

sometimes 80 hours a week they would work, yes, but the options 

that they had were very important to them. And like I said, if we 

had gone from 23,000 to say if we kept the same formula that was 

used to bring it to 23,000, we probably would have been at 36,000. 

I think that might have been more justifiable, but to move it up 

to 50-plus is a real challenge to the small businesses, but more importantly I think to these growing managers that want this opportunity and flexibility that gives because sometimes that flexibility 

is far more important than even the salary level. 

Secretary PEREZ. Well, one thing that I again would commit to 

you is when the final rule is published, we will have our team come 

to you and anyone else to explain what it means, to explain what 

the options are, to explain the flexibilities that exist— 

Mr. WALBERG. I look forward to that, but I also do not look forward to the potential fallout if it goes the way that we have heard. 

Silica, let’s move on here, Mr. Secretary, quoting from your testimony, ‘‘New silica permissible exposure limit, PEL, is expected to 

be issued shortly.’’ In context with the fact that silicosis is down 

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significantly with present standards except for a few unique, and 

I mean unique, hotspots in underground mining, in context with 

the present PEL, are you confident the PEL and the engineering 

controls mandated by the regulation will meet OSHA’s legal requirement to promulgate a rule that is technologically and economically feasible? And again, in context with the fact as I understand it from the last testimony, we do not have measuring devices 

yet that can measure the new standard. Has that changed? 

Secretary PEREZ. Well, again, this has been a 20-year process of 

outreach, talking to NIOSH, understanding the science. And when 

we did the proposed rulemaking, we had I think over a week of 

hearings, and we heard from folks in the industry, we heard from 

scientists, we heard from all the stakeholders about what we need 

to do, and we heard from folks, like Alan White, who are living 

with silicosis. We heard from folks like Mr. Ward from Michigan, 

whom I met recently, whose father died at the age of 39 from silicosis. So we have built, as always, a very inclusive process and I 

am very proud of that. 

And one of the things we heard with frequency was you need to 

make sure that standards are flexible so that they can be achievable. We had this conversation in coal dust and we heard a lot of 

the same issues – 99 percent of the time— 

Chairman KLINE. Sorry, the gentleman’s time—both gentlemen’s 

times has expired. Ms. Clark? 

Ms. CLARK. Thank you, Mr. Chairman, and thank you for joining 

us, Secretary Perez. Last March, the Assistant Secretary of Labor 

for Occupational Safety and Health, Dr. David Michaels, wrote 

about a woman from Massachusetts named Guadalupe Gonzalez. 

She was injured on the job. After three surgeries, unable to return 

to her former work, and today she earns 60 percent of the former 

salary that she had, and she is only one of the estimated 3 million 

Americans who will suffer both physically and economically due to 

on-the-job injuries. And last June, OSHA released a report examining the plight of injured workers and detailing how changes in 

State-based workers compensation insurance programs have made 

it increasingly difficult for injured workers to receive full compensation with employers providing only 20 percent of the overall 

financial cost of workplace injuries. 

When employers are no longer responsible for covering the full 

cost of these workplace injuries, what effect are you seeing overall 

on workers’ safety? 

Secretary PEREZ. Well, one of the basic rights that we have in 

any workplace is the right to be safe and sound and what we have 

seen and, frankly, an alarming trend data across the country and 

the example you cite I wish were an outlier, but it is not. Is that 

one of the emerging pathways to poverty in America is a workplace 

injury and I have spent a lot of time on this issue and I appreciate 

the letter than you and others sent to us I think last—in 2015 

about this issue. And there is, frankly, a troubling trend in States 

across the country to either privatize workers comp or dramatically 

reduce the benefits and that is not fair. It is part of the safety net 

if, God forbid, you get hurt on the job, that should not put you into 

poverty. And by the way, one of the impacts that we see is that 

then there are increased applications in Social Security disability 

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insurance so the Federal Government is indeed having to bear the 

burden for these State efforts, and so that is why we have been assessing steps that we can take moving forward, understanding that 

a lot of these laws are really at a State level. ButBut I look forward 

to continuing this conversation because it is a sleeper issue that 

needs to be given light because it is unfair that people walk to 

work, go into work in the morning and then begin that pathway 

to poverty that day when they have that injury. 

Ms. CLARK. Thank you, we look forward to continuing working 

with you on that, and I also want to thank you for your leadership 

around the issue of paid leave and, in particular, the Paid Leave 

Analysis Grant Initiative that you undertook and the paid leave 

partnership initiative proposal that is in the 2017 budget. We remain one of the few industrialized nations that does not provide robust paid leave for our workers with only 12 percent of private sector workers get parental and family leave from their employers and 

only 4 in 10 have access to paid medical leave at work. I know that 

I hear when I go home that there is a cost to not providing paid 

leave. What are you hearing from the business community when 

they are making the case for paid leave? 

Secretary PEREZ. Well, the cost of doing nothing is indeed significant and you correctly point out that we are the only industrialized 

nation on the planet without a universal Federal paid leave law 

and, regrettably, we are the only industrialized nation on the planet where this issue has become partisan. It is not partisan anywhere else in the world and that is unfortunate. And I am thinking 

about the employer I met in Vermont, he provides paid leave, I did 

a round table with the Chamber of Commerce when I was up there 

talking about paid leave. 

He provides paid leave because he understands that it is a retention tool, it is the right thing to do and the smart thing to do. He 

has a lot of dual career couples and when someone is sick and the 

other couple’s employer does not have leave, guess who takes the 

day off. His employees. That is not fair to him. We need a level 

playing field and we should not have a race to the bottom. And for 

those who say our labor force participation rate is going down, we 

need to take steps to go up. The most important piece of public policy that we could undertake to increase labor force participation is 

a Federal Paid Leave Law that would enable us to be at the same 

level of female labor force participation as Canada. We were equal 

to them in 2000. We are eight points behind them now. If we had 

kept pace, we would have 5–1/2 million more women in the workplace. 

Ms. CLARK. Thank you. I yield back. 

Chairman KLINE. Gentlelady yields back. Mr. Salmon? 

Mr. SALMON. Thank you. Secretary Perez, welcome, thank you 

for— 

Secretary PEREZ. Thank you for your distinguished service as 

well, by the way. 

Mr. SALMON. Extinguished is more probably where we are at 

right now, but I wanted to address a couple of things. First, I think 

it is pretty widely accepted that one of the most respected small 

business advocates in the country is the NFIB, and small business 

really is the backbone I think of America’s economy right now. 

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They have expressed some strong reservations about the overtime 

rule and said that it could adversely affect as much as 40 percent 

of small businesses. Are you factoring in their concerns into the 

final decision on this rule? 

Secretary PEREZ. Absolutely is the short answer, and before we 

did our formal rulemaking process, we did informal rulemaking 

process, we did outreach because I want to listen and learn, and 

we built a big table. We talked to businesses large, small, and in 

between about their experiences. We asked them about what happened in 2004 when the Bush Administration put in place a new 

rule. How did you adjust? What do you think? And so we have gotten a lot of feedback both during the informal outreach process and 

during the formal notice and comment process from small business 

and we appreciate that input. 

Mr. SALMON. I appreciate that. I know that one of their contentions is that the law of unintended consequences could end up forcing some of those small businesses to not hire salaried employees 

or not hire those positions and one of the unintended consequences 

could be a loss of jobs, so I just hope that is all taken into consideration. 

The second thing I wanted to talk about and I know it has already been addressed but in my time in Congress, and I am going 

on 10 years, I have never had a proposed rule that has sparked 

constituent outcry and ringing of the phones and sending of emails 

more than the proposed rule on the fiduciary rule and it is a bipartisan response. 

I am very, very concerned, folks, that our lower income investors 

and lower income portfolios, and I just want to make sure that the 

law of unintended consequences does not take place and it makes 

it so that the cost of doing business for them when hiring a financial planner is exorbitant and puts it out of reach for the common 

people. 

I understand that when people have multimillion-dollar portfolios, that they can afford that kind of a thing and the cost associated with this rule, but I have heard from folks on both sides of 

the aisle in a big, big way and I just wanted to share that with 

you, and I hope that is something that you take into consideration 

because the last thing that any of us would want to see is limited 

access for lower income middle class people that really want to participate in investing through 401(k)s and IRAs and those kinds of 

things. 

Secretary PEREZ. Well, I think we have a shared interest in making sure that everybody has access to retirement advice and I have 

made the offer many times to folks and I will make it again. At 

the end of our process, we look forward to explaining what we did, 

the changes that we made, and how we intend to proceed. And I 

also look forward to anyone who is interested to listen to folks who 

right now are fiduciaries, they are doing this. 

They have a big book of small businesses and small savers and 

what they tell me repeatedly is to all those businesses who say 

they are no longer going to serve small investors, give them my 

email, give them my phone number because we have figured out 

how to do well and do good. And so I think it would be very helpful 

for folks to learn the lessons that they have learned because their 

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businesses are going gangbusters and so I look forward to the continuing dialogue with you, Congressman. 

Mr. SALMON. Thank you, Secretary Perez, and I am going to do 

the unexpected and not wait for you to gavel me and I yield back 

the balance of my time. 

Chairman KLINE. I thank the gentleman. Mr. Takano? 

Mr. TAKANO. Thank you, Mr. Chairman. Mr. Secretary, it is indeed a pleasure to hear from you this morning about your department’s priorities. I agree that this administration has done a lot to 

be proud of and I am hopeful we can maintain the momentum in 

the years to come. I was pleased to learn that DOL was moving forward with the rule to update the income threshold for overtime 

protections for salaried workers and that the rule was sent to OMB 

just this week. 

In fact, many of my colleagues here today have joined me in 

sending a letter urging OMB to act promptly to review the rule and 

finalize it so we can begin helping millions of workers as soon as 

possible. 

As you know, Americans are working longer hours and are more 

productive, yet their wages are largely flat. It is crucial that they 

get a fair day’s pay for a hard day’s work. In 1975, 62 percent of 

salaried were eligible for overtime, now only eight percent of workers are eligible. Change is long overdue. Can you walk us through 

some of the repercussions of this new rule? In addition to raising 

wages for those workers who are newly eligible for overtime, won’t 

it help to redistribute hours to those who are underemployed? 

Secretary PEREZ. Well, again, I cannot get too specific on the details because we are in the rulemaking process, but the President 

directed us to modernize the overtime rule because, as I said before, overtime stands for the proposition that if you work extra, you 

should be paid extra. And as a result of the things that you correctly pointed out, we would talk to people time and time again 

who were working 60, 70 hours a week making $25-, $30,000 a 

year. So we ended up again doing a period of informal outreach 

that lasted roughly a year followed by the formal notice and comment process, got about 300,000 comments, and have been carefully reviewing those and, again, there is a big discussion about 

stagnant wages in this country. And when I was growing up in 

Buffalo, New York, if my parents, friends of mine if their parents 

were a manager, that meant they were in the middle class and 

there are a lot of folks who are managers doing important work 

who are, frankly, making the minimum wage and I do not think 

that is fair. 

Mr. TAKANO. Well, in a nutshell this rule is about fair wages, but 

also work-life balance. Mr. Secretary, there has been a lot of discussion about the proposed rule’s impact on job creation. The Department has updated the salary level seven times since the Fair 

Labor Standards Act became law in 1938. Can you talk generally 

about how industry has complied with these adjustments? Is there 

a history of significant job loss? Won’t the rule also have a positive 

impact on the economy through increased consumer demand? 

Secretary PEREZ. Well, what was interesting is there was a report by the National Retail Federation in connection with this proposal on overtime and one of the things they noted was it may acCEWDOCROOM with DISTILLER

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tually increase the number of jobs and there is actually a simple 

reason for that. If you are working 60 hours a week and you are 

effectively working 20 of those 60 for free, and the overtime rule 

forces you to pay people now for those extra hours they are working, the response of some employers may be to hire more workers. 

And that is the National Retail Federation, that was not a study 

from the Department of Labor. So, again, as we move forward here, 

we are taking care to listen to every single perspective and to understand what happened the eight previous times and we talked to 

a lot of people who were involved and around after 2004 to say, 

well, what was—how did you adjust to this, how did you adjust to 

that? Because we do care about the doctrine of unintended consequences as well as the direct consequences. 

Mr. TAKANO. Great. Well, for the first time, the President’s budget is requesting $50 million, the authorized amount for the Department’s Homeless Veterans Reintegration Program, or HVRP. Can 

you talk about the Department’s efforts to help eliminate veterans’ 

homelessness and how you hope to use the request of the additional 12 million for the HVRP program? 

Secretary PEREZ. Well, first of all, I want to thank you for you 

unwavering leadership in this area and to thank everyone. This 

has been a bipartisan issue. I have had the privilege of serving as 

the chair of the inner inter-agency task force to eliminate homelessness and our focus on veterans’ employment, on eliminating 

veterans’ homelessness has yielded remarkable dividends and one 

of the ways we are doing it is by making sure we can get people 

a job and the $50 million that you are referring to is going to enable us to serve over 22,000 veterans through the HVRP program. 

And the HVRP program has been studied, it has been shown to be 

incredibly successful and we want to take it to scale and we want 

to make sure that every single veteran who did so much for us, we 

got their back when they get home. 

Mr. TAKANO. Thank you, Mr. Secretary, on point here. 

Chairman KLINE. Gentleman’s time has expired. I need to let my 

colleagues know that I am having to reduce the time to 4 minutes. 

The Secretary has a hard stop time at 12:00, so please, try to stay 

within your time limits. And I think, Mr. Guthrie, you were the 

victim of this yesterday so my apologies but you are recognized. 

Mr. GUTHRIE. Always four minutes. Thank you Mr. Secretary. 

Thanks for the comments that you have made earlier about us 

working together on the fiduciary rule when ESOPS were involved, 

and I appreciate that because it has been a good professional working relationship, and I will even say that it created a friendship as 

well, so I appreciate that very much. And before I get to my questions, I know the issues that are really affecting this group of people are not necessarily in your department, but I had United Mine 

Workers in this morning and you mentioned the Ozzie and Harriet 

world and they were describing the world that they were in. These 

guys were older, about 10,000 in Kentucky, a lot of them over 75. 

They did retire from the mines and they wanted to talk to me this 

morning and we thought cradle to grave healthcare that they were 

promised and what is going on with administration, what is going 

with the economy, but the administration as well, and not necessarily in your department. But I told them I was meeting with 

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you for a few minutes and just wanted to bring up our United Mine 

Workers and what has happened to the coal industry because without the existing industries paying into their pension fund, it is— 

as they are going out of business, it has been difficult for them. 

But on ESOPS, I know when we met, we talked about unintended consequences and had a great discussion and how ESOPS, 

I know the ones in my district that you met with, and just all over 

the country create wealth for people that work in those businesses, 

but we are concerned that people’s retirement security is all in one 

basket. I mean that is a concern as we move forward, so we want 

to make sure that is not compromised that ESOPS are moving forward and doing things correctly and the oversight is important. 

What I have reported back and not the ESOP that you met with 

but others, just not necessarily in my district is when the Department of Labor has gone into the ESOPS and not just rare occurrences but more common, that they issued subpoenas before they 

even notify that there has been an investigation going on and I am 

one even here to members of Congress. I have talked to chairmen 

before about subpoena power of the Federal Government that we 

have to be careful with it. When somebody receives a subpoena, it 

is serious ramifications, can we get information prior to that step, 

and so I guess what I asking is if that is occurring and it has been 

brought to my attention and I have not seen it directly, would you 

be willing to review the process because I think it would be best 

if and I know that is how you run the Department because I was 

kind of surprised because of the way that we worked together if 

they need information, if ESOP is willing to provide it, that happens first. And I am the first one to say if your department or if 

the Congress is not getting the information that they asked for, 

then the subpoena power is there and that it should be used, but 

to begin with that step I think should be reviewed and would you 

be willing to review that and any comments on that going forward 

as we are here together? I know this is something you need to look 

at, but if you have any comments now? 

Secretary PEREZ. Well, I am happy to look into this. I must confess, I am not familiar with the specific concern as it is related to 

subpoenas in the ESOP context and I am more than willing to get 

back to you. And what I would love to do is folks who have come 

in just like we did before, there is no substitute for getting around 

the table and listening and seeing what the concerns are and then 

coming up with a pathway forward, so I would be more than willing to kind of replicate the model we used before and do it again 

because you helped me get smarter and I would like to do that 

again. 

Mr. GUTHRIE. Well, my view, too, is that there needs to be oversight, but if we can do it mutually working together as opposed to 

the adversarial, but if it gets to that point, then you obviously have 

the right and the power to do so. 

Secretary PEREZ. We will reach out to you. My team will reach 

out to your staff after today. 

Mr. GUTHRIE. Absolutely, thank you very much. I yield back, Mr. 

Chairman. 

Chairman KLINE. I thank the gentleman. Mr. DeSaulnier recognized. 

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Mr. DESAULNIER. Mr. Secretary, first, thank you for your passion 

and sincerity to the work that you are involved in and also thank 

you for your relationship with employers. As a former small business owner, who, my success in the restaurant business was directly related to my employees and how they interacted with my 

clients. I appreciate the fact that you are willing to accept that 

most employers I think want to do the right thing and value their 

relationship with their employees, so I wanted to ask you a question about a lot of the changes in a relationship between employers 

and employees, particularly with large companies, and that goes to 

the issue of contracting out or a new word that I have learned recently, the fissuring of our relationship. So it is been estimated 

that there are 30 million such workers in five industries: in the 

construction industry, the hospitality industry, the janitorial, personal care, and home healthcare. So clearly this relationship is different. 

I know when I was in legislature in California, there were calls 

both by the Chamber of Commerce and obviously the Labor Federation, is how do we more clearly delineate who is a contract employee and who is not. A predecessor of yours recently did an oped piece where he suggested—who is now a teacher at the University of California Berkley, Secretary Rice, said that if you are compensated, 80 percent of your compensation comes from one source, 

that should be the definition. And that you can do that administratively right now, so could you talk a little bit about the change, 

maybe some of the benefits of these relationships if you see them, 

but also the challenges to make sure that the relationship between 

a contract employee and their actual employer is accurate and 

what that does to the economy potentially as well. 

Secretary PEREZ. Well, you referenced the fissured workplace 

and, as you know, David Weil, our Wage and Hour Administrator, 

quite literally wrote the book on ‘‘The Fissured Workplace’’ 

Mr. DESAULNIER. I just met with him. 

Secretary PEREZ. And he told me that he had a wonderful visit 

with you along with my colleague, Sharon Block. And when you 

look at the issues that are confronting us, the fact that we have 

had flat wages relatively speaking and the delinking of productivity 

increases and real wage growth. One, there are many factors that 

explain that, but one of the factors has been the fissuring of the 

workplace. There is an appropriate role for contractors in the workplace. We employ contractors in a surgical way, other employers do, 

but there has undeniably been abuses of that and we have a very 

active docket of cases involved in what we call misclassification. 

And we have MOUs with 29 States because this is an issue in 

Utah, it is an issue in Arizona, it is an issue in Texas, it is an issue 

in Massachusetts, it is an issue in California, and so we have been 

working hard on that. 

There is a test under current law and David offered some guidance on misclassification and that is an issue that is relevant to 

the legacy economy. It is an issue relevant to the in demand economy or the on demand economy. It is an issue relevant in every 

context and when people are misclassified, they are more vulnerable to injury on the job because they do not get workers comp. 

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They work overtime and do not get paid over time. They do not 

get the benefits that they are really entitled to, and that is why 

a big focus of our work at the Department of Labor under Administrator Weil’s leadership has been addressing this and understanding that there is an appropriate use for contractors, but when 

there is abuse, we will act. And one of the most frequent set of 

stakeholders who come to us asking for help are employers like you 

because the vast percentage of employers are playing by the rules, 

but they cannot compete if the restaurant down the street is paying 

everyone under the table and is not paying workers comp, that is 

not fair. 

Mr. DESAULNIER. It would be interesting to look at what the 

trend is over time and history. With that, thank you, Mr. Secretary, thank you, Mr. Chairman. I yield back. 

Chairman KLINE. The gentleman’s time has expired. Mr. Thompson? 

Mr. THOMPSON. Chairman, thank you, Mr. Secretary, thank you. 

Secretary PEREZ. Pleasure to be here. 

Mr. THOMPSON. It is good to have you here. I want to zero in on 

just a follow-up of a piece of legislation that we successfully have 

obviously passed, WIOA, and kind of dovetail that a little bit with 

what I hope will happen with Perkins as well. I spent a lot of energy and time and just with the partners that are after with 

WIOA. I spent a lot of time with folks who are professionals, individuals across the board, our educators, our prevocational sites for 

individuals living with disabilities, certainly vocational training 

sites. And so as co-chair of the Career and Technical Education 

Caucus here in the House, I certainly want to thank you for highlighting the importance of skill and workforce training and I agree 

with your sentiment that the passage of WIOA is a tremendous 

step in the right direction. 

As the Department moves through the process of implementing 

the final WIOA regulations, I asked you to consider the future importance of aligning WIOA regs with an updated Perkins Act which 

we hope to consider in the coming months in this committee. What 

are your plans to align both of these workforce development and 

education bills? 

And then just a follow-up, how will you ensure that individuals 

with disabilities are given equal opportunity for success and growth 

under both of these acts? 

Secretary PEREZ. Music to my ears to hear those questions. 

Thank you for your leadership. I can tell you served on a WIB because you know this at the local level. One of the major benefits 

of WIOA has been the stove pipe implosion at a State and local 

level and the stove pipe implosion at the Federal level. The final 

regs are a joint venture between DOL and the Department of Education. We are working more closely than ever and when you mention Perkins, my ears perked up because I am a huge believer that 

we have undervalued career and technical education as a Nation 

to our detriment and the synergies of WIOA and Perkins reauthorization I think create a remarkable opportunity to address the challenges that you are outlining. We need to build—we need to fortify 

the apprenticeship on ramp and the skills superhighway and Perkins is a way to do that. 

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We also, to get to your question about people with disabilities, 

WIOA had a provision creating an advisory committee on the employment of people with disabilities. I have attended at least one 

of those meetings and we will be receiving their final report. One 

of the things I am most proud of in the work I have done in my 

Federal career and in State government is working with employers 

and others on the employment of people with disabilities. We all 

too frequently ignore the first—we focus too much on the first three 

letters of that word and not enough on the last seven, and we have 

done a lot of work with employers in Maryland and elsewhere 

who—for people with disabilities, sometimes transportation is a 

huge issue. There are so many jobs out there that you can do from 

home, telecommuting, and so we have done a lot of work in that 

area. The advisory committee is going to have a series of recommendations about how we empower people with disabilities because, as you know, the labor force participation rate is too low. 

There are very few people that come to me and say, Tom, I want 

to be a taxpayer. People with disabilities are those folks. 

Mr. THOMPSON. In the few seconds I have left, you know how are 

we watching carefully? I mean there are a lot of folks who are in 

prevocational programs who are—that is very appropriate. Multiple 

disabilities, not really despite—and I came out of rehabilitation so 

I work to try to facilitate adaptation, but for some folks—and they 

get so much satisfaction out of that work and I am concerned that 

we just make sure we do not eliminate those opportunities for folks 

who are not ready for competitive employment. 

Secretary PEREZ. I totally appreciate that view and we have 

heard it from a lot of people. 

Chairman KLINE. The gentleman’s time has expired. Ms. 

Bonamici? 

Secretary PEREZ. Thank you so much. 

Chairman KLINE. The gentleman’s time has expired. Ms. 

Bonamici. Thank you, Mr. Chairman. 

Secretary PEREZ. Good to see you. 

Ms. BONAMICI. Mr. Secretary, welcome back to the Committee. 

Secretary PEREZ. It is a pleasure. 

Ms. BONAMICI. Thank you for your leadership. I know you are 

aware of the steps that have been taken in my home State of Oregon for working families, paid sick days, improving the retirement 

system, raising the State minimum wage, and I am glad to see that 

your budget includes many priorities that will help working families in Oregon and across the country. 

I want to first follow up on Representative Clark’s question about 

paid family leave and appreciate your response to her. It is time, 

past time, that our country joined the rest of the world in offering 

family leave. It is my understanding that now approximately 25 

percent of women in this country return to work after two weeks 

of giving birth because they have no paid leave. So will you address 

the issue? And I also want to mention even places like the country 

of Estonia has up to a year and a half of family leave. We have 

none unless it is offered by private employers. So will you talk a 

little bit about the benefit to business? 

We know that it benefits families and benefits children to get 

that strong start in life, but what about the benefits to businesses 

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that are providing paid leave, whether it be through recruitment 

and retention? How are these businesses seen? 

Secretary PEREZ. It has been an enormous retention strategy. 

Business is—I mean, I want to hire the best and the brightest and 

so my paid leave policy is giving me a competitive edge. When I 

travel internationally I ask the question of everyone. We organize 

meetings through the chambers in various countries. We have been 

to Australia, England, Germany, Switzerland, Canada, and I ask 

the following question: if you were king or queen for a day, would 

you diminish or repeal your paid leave laws? I usually get a oneor a two-word answer. The one-word answer is no and the twoword answer, for benefit of this committee, is heck no. 

Ms. BONAMICI. Probably hard to find a country that does not 

have it. 

Secretary PEREZ. And the reason is because it is part of their 

competitive advantage and Canada, what they do when someone is 

off on leave is they hire a contractor and they kick the tires on that 

employee so that they can see whether that is someone that they 

may want to hire instead of using the resume, which is a far more 

imperfect tool to grow your workforce. So this is the only nation 

where it is also a partisan issue. 

I mean Australia is governed by a conservative ruling party who 

won their election on a platform of expanding paid leave. 

Ms. BONAMICI. Thank you, Mr. Secretary. I also wanted to ask 

you about adjunct faculty at higher education institutions. They 

typically face low pay, no benefits if any, they lack job security, get 

inadequate institutional support, and in only a few States can receive unemployment compensation, even though they have no assurance of full-time employment. So what is the Department of 

Labor doing to address this issue and improve the working conditions for adjunct faculty? 

Secretary PEREZ. Sure, we have heard about this issue a lot, and 

I appreciate your continuing interest in this and we have spoken 

to a lot of stakeholders. Our guidance, as you know, on eligibility 

for unemployment benefits is 30 years old and a lot has changed 

in the last 30 years. So, what we have been doing is a series of listening sessions to figure out what should the 21st century guidance 

look like, and we have spoken to folks in higher ed, we have spoken 

to folks across the spectrum, and, again, we have heard from a lot 

of people like yourself, and we are committed to reaching a workable solution in the coming months on this issue. 

Ms. BONAMICI. Any preview of what direction that going to— 

Secretary PEREZ. Well, we are still listening, so I would hate to 

prejudge it because we have heard from a lot of people and there 

still are more people that we need to hear from, and I pride myself 

in making sure I listen to everyone before we figure out exactly 

where to go. 

Ms. BONAMICI. Very much appreciate that and look forward to 

working with you. I yield back. 

Chairman KLINE. The gentlelady yields back. Mr. Allen? 

Mr. ALLEN. Thank you, Mr. Chairman, and thank you, Mr. Secretary. 

Secretary PEREZ. Good morning, sir. 

Mr. ALLEN. How are you doing today? 

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Secretary PEREZ. I am well, thank you. 

Mr. ALLEN. Good, good. You know as a businessman for over 35 

years, in fact, just two years ago I was out in the business world, 

and what I found in economic development the number one factor 

that a company looks at when they look at your area is the development of a skilled workforce. We have got 46 million people I 

think at last count who are on some type of government assistance, 

that are, I guess, either underemployed or unemployed. 

We have in our education system a number of students who drop 

out of high school and do not enter the workforce. What is your 

plan to deal with that? And you have, like you said, 10 months left, 

what would you do to change the current circumstances that we 

are faced with in trying to get folks in the workforce? 

Secretary PEREZ. Sure, let me give you a couple of examples of 

things that we are doing. One of the reasons I am such a big fan 

of apprenticeship is because apprenticeship provides remarkable 

opportunities to bring people who have been out of the workforce 

into the workforce. Not only in any job, but a job with a career ladder. So, for instance, South Carolina has a tax credit for employers 

who hire apprentices and they have been taking folks who are on 

TANF and CVS, who has been a strong partner of ours on this. 

They are taking folks on TANF, they are putting them into a pharmacy tech apprenticeship program, and they are on a career pathway to a middle class job. And so those are examples of things that 

we are doing using the tools in the Workforce Investment Act and 

now with WIOA, we have more tools to do that because I firmly 

believe and it is a fundamental tenet of workforce development 

that every person is gifted and talented and there is no such thing 

as a spare American, and that is why we have done so much work 

connecting folks, breaking down stove pipes so we work closer with 

the TANF folks than ever before. We are working closer with the 

Department of Education, as Congressman Thompson was talking 

about, to lift up career and technical education for folks. So I am 

very excited about the work that is being done in that area and if 

you have other ideas about how we can do that. 

Mr. ALLEN. Are we making enough progress though? I mean it 

just seems like we are on hold or something. They are great programs, but how— 

Secretary PEREZ. I mean I look at the unemployment rate of— 

it was 10 percent in 2010, it is 4.9 percent now, and you look at— 

Mr. ALLEN. Participation is the key, I mean— 

Secretary PEREZ. I’m sorry? 

Mr. ALLEN. We have people who are not participating in the 

workforce. 

Secretary PEREZ. Well, actually the labor force participation rate 

last month was at its highest level in over a year and that is because people have more confidence now that they can get a job. 

Having said that, I want to continue to work with you and others 

because we have had tremendous success linking people who have 

been on various forms of public assistance to career pathways, that 

is for me a labor of love and there is nothing better than talking 

to employers like Andra Rush at Detroit Manufacturing Systems, 

who went from 0 employees to 1,200 employees. She manufactures 

the consoles for the Ford F–150 and she used the workforce system. 

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She made use of folks who had been out of work for two, three 

years and she was able to take it to scale with Match.com helping 

her out. 

Mr. ALLEN. I am just about out of time but the number one impediment to creating jobs, at least in the small business community, is this overreach in the regulatory environment and, I mean, 

I am sure you are aware of that. I mean in other words, from the 

business standpoint, it is very difficult to make business decisions 

when you really do not know what the next rule is going to be. And 

I have to yield back my time, thank you. 

Chairman KLINE. Gentleman yields back. Ms. Wilson? 

Ms. WILSON. Thank you, Mr. Chair. 

Secretary PEREZ. Good morning. 

Ms. WILSON. Good morning, Secretary Perez, I thank you for 

being here today. 

Secretary PEREZ. Pleasure to be here. 

Ms. WILSON. And providing testimony on the President’s budget 

request for the Department of Labor. I commend the President for 

putting forth a budget that promotes fair wages, safe workplaces, 

and equal employment opportunities. I hope our committee will 

join DOL in its efforts by passing legislation that supports working 

families in these last 10 months, work with the Department rather 

than against it. 

There are so many great things that the Department is doing, 

but I would just like to touch upon a few. First, I am glad that the 

administration rejected the Bush era proposal that would have 

slashed FECA benefits for injured Federal workers who have dependents or who have reached retirement age. As you know, in December 2015, I joined Ranking Member Scott, Congressman Cummings, and Congressman Connolly in sending a letter to the Office 

of Management and Budget on this issue. I commend the administrator’s decision to ensure the workers who have committed themselves to Federal services are honored by a system that does not 

leave them and their families financially worse off than in injury 

or death. 

As you know, I have introduced the Payroll Fraud Prevention Act 

to combat employee misclassification. In your written testimony, 

you shared a compelling story of how a CEO shifted his thinking 

on the issue of misclassification for the betterment of his workers 

and his company. Can you please share that story with us and can 

you speak to how this year’s budget will continue to support efforts 

to combat employee misclassification? 

Secretary PEREZ. Thank you for your leadership on that issue 

and thank you for your question. The issue of worker 

misclassification has been a chronic problem. When I was in Maryland, we passed some laws on this and we actually did not call it 

misclassification because I do not like that name; it sounds like a 

clerical error. We called it workplace fraud because that is what it 

was. 

When you call a worker an independent contractor when he or 

she is, in fact, an employee, that is fraudulent and we have seen 

it time and time again. And again, as I mentioned, the drywall example that you are referring to was a case that we investigated in 

Arizona and Utah, and you had construction workers who were emCEWDOCROOM with DISTILLER

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ployees on a Friday and then were told congratulations on Monday, 

you are now employee partners. It sounds good, but it is too good 

to be true and that is because they wanted to lower their costs and 

the good news is we were able to settle that case and we worked 

with State governments in Utah and Arizona. And I point that out 

because this is not a partisan issue. Misclassification is in every 

State in the country and it hurts workers and businesses who play 

by the rules alike. 

Ms. WILSON. Thank you. 

Secretary PEREZ. And by the way, the employer in the Arizona 

case, the postscript to this has been that he participated in a future 

of work conference that we had back in December at the Department of Labor and he has become one of our strongest supporters 

in this issue that you are talking about, so I really appreciate his 

leadership. 

Ms. WILSON. Well, I just want to touch on silica before we run 

out of time. How is DOL planning to work with OMB to finalize 

this lifesaving rule that has been in the books since 1974? 

Secretary PEREZ. Well, I will tell you, when you walk into work 

in the morning, you have a right to be coming home safe and sound 

and it should not be killing you. And silica, we have known about 

the dangers of silica for 80 years and we have been working with 

every stakeholder involved on this issue. And the proposed final 

rule is at OMB now and we hope to bring it to conclusion in the 

very near future. 

Chairman KLINE. The gentlelady’s time has expired and more 

bad news for my colleagues. I am reducing the time to three minutes as we are rapidly approaching the 12:00 hour. Mr. Byrne, you 

are recognized. 

Mr. BYRNE. Thank you, Mr. Chairman. 

Secretary PEREZ. Morning sir. 

Mr. BYRNE. Mr. Secretary thank you for being here. I would like 

to talk to you today about the Office of Labor Management Standards work they are doing on a proposed persuader rule under the 

Labor-Management Reporting and Disclosure Act. Just so you 

know, I am a labor lawyer form South Alabama. We do not have 

very many big employers. Most of our businesses that employ people in South Alabama do not have HR departments. They may 

have somebody that is in charge of HR that has got a half a dozen 

things they are responsible for, so when they are in a situation 

where there is a union organizing campaign going on, they do not 

really have anybody in house that they can go to help him. They 

have to go get somebody like me, and there are a number of very 

fine lawyers down in our neck of the woods that do that. 

Now, the problem is that up until now, it has been a pretty good 

bright line test. If the lawyers that were given that advice weren’t 

actually communicating with employees, we were not covered by 

any sort of a persuader rule, but without a bright line test, that 

is going to put these lawyers in a very difficult position. But, more 

importantly, it puts those employers in a difficult position because 

they do not know what the law is and there is no way a small- to 

medium-sized business can know this area of the law because it is 

so fairly granulated, as you know very well. 

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The American Bar Association has registered its very strong concerns about attorney-client privilege issues here and as a lawyer 

yourself, you know how important that is. Now, here is the truth. 

The unions, when they go on these organizing campaigns, I am not 

saying they do not tell the truth, they are selective about which 

truths they tell. And the only way for an employee to get the entire 

picture is if the employer talks to him. And under the labor laws, 

the employer has a right to talk to their employees, but there are 

rules about what the employer can say and do and rules about 

what the employer cannot say and cannot do. 

Now, if the employer cannot turn to a lawyer, that is a professional in this area and say tell me what I can say and do and also 

tell me what I cannot say and do, without the fear on the lawyer’s 

part that the lawyer is going to be brought under this rule, then 

effectively we have denied legal counsel to the employers. And just 

as importantly, we have denied crucial information to the employees before they make that very important decision when they go to 

vote on whether or not they want a union. So I want to register 

that concern to you and in the 30 seconds that are left, please give 

me some information that would tell me that you are not going to 

put us in a situation where lawyers are effectively prohibited from 

giving that sort of advice. 

Secretary PEREZ. There is nothing in the proposed rule that is 

currently under consideration by the way. There is nothing in the 

proposed rule that prohibits the employer from saying anything to 

their client. The LMRDA requires that consultants report their 

agreements that are designed to persuade employees directly or indirectly that is not my words, that is what Congress passed in 1959 

about whether or not to choose to join a union. And in 1959, when 

Congress debated this, the attorney-client privilege was brought up 

as a reason not to have the word ‘‘indirectly’’ in there or something 

of that nature and Congress explicitly rejected that. So this is 

about transparency, this is not about affecting attorney-client relationships. 

Mr. BYRNE. Secretary, I am out of time, but I would like to have 

a discussion with you away from here because I think you and I 

have a different view of that. I yield back. 

Secretary PEREZ. Again when we are done with the rule we 

would be happy to— 

Chairman KLINE. Thanks for trying to navigate the three minutes. Mrs. Davis? 

Mrs. DAVIS. Thank you, Mr. Chairman, I appreciate your dedication. Mr. Secretary, I know you have had a chance to talk a lot 

about workforce training this morning and I wanted to just go to 

the transition between the WIOA and what we currently have from 

the perspective of the workforce centers and the fact that they are 

going to be moving, as I understand it, to a more competitive process and who is going to be running those centers. Since transition 

is going to be required by at least the beginning of 2017, is there 

are there plans to make certain that the workforce boards are 

going to be able to transition with those competitive operation process essentially, which really is probably more complicated than 

they faced in the past? 

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Secretary PEREZ. Sure, well, one of the key provisions of WIOA 

that Congress passed was a requirement to competitively bid the 

one-stop centers so that it can help increase accessibility to the centers and the services that they offer, and we certainly understand 

that intent and our regulations, our proposed regulations are designed to do that. 

We are also excited about how local areas in States that can 

make use of the flexibility to accomplish this and so we have done 

a lot of outreach in this area. We have gotten a number of questions from folks because in some communities, the same entity has 

been operated in the center for some time. 

Mrs. DAVIS. Right, exactly, I think that is the issue. 

Secretary PEREZ. And so we are very cognizant of that fact. By 

the same token, we are aware and cognizant and intend to be compliant with the direction from Congress that we have competitive 

bidding and that is the process that we find ourselves in right now 

and we have spent a lot of time on this issue again, listening and 

learning from communities to make sure we get it right at the end. 

Mrs. DAVIS. Okay, thank you. So, in fact, those boards might 

even need an extension and that’s possible to work with them to 

make sure that— 

Secretary PEREZ. We look forward—if you have specific questions 

relating to particular circumstances, I would simply—we obviously 

have had a long and open line of communication, so please let us 

know. 

Mrs. DAVIS. California is well on their way here, but I know it 

can be an issue. And just very quickly, the Bureau of Labor Statistics is interested in collecting data which would help them understand more the issues that have been talked about here in terms 

of contractor employee relations, contingent workers. And I am 

wondering what we actually can learn. What would we like to 

know about capturing the information of these individuals and how 

might that inform our future programs for the American workforce? 

Secretary PEREZ. We had a summit on the future of work, and 

the nature of work is changing. And one of the primary takeaways 

was we need to make sure we are studying with granularity how 

the workforce is changing, how technology affects it, and what we 

can do as a result to make sure that businesses succeed, workers 

succeed, and communities succeed. 

Chairman KLINE. The gentlelady’s time has expired. Mr. Bishop. 

Mr. BISHOP. Thank you, Mr. Secretary, for your testimony today. 

Secretary PEREZ. Good morning. 

Mr. BISHOP. Good to have you here this morning. I wanted to 

build on the question that was raised by my colleague, Dr. Roe, 

earlier regarding the fiduciary rule. I know that you have received 

a number of comments during this open comment period. It is a 

proposed rule that has caused great consternation out there. I hear 

on a daily basis many who have raised their concerns with me on 

this issue. And I know that specifically you have received a significant number of comments on the treatment of the variable annuity 

products under the proposed fiduciary rule and that many of these 

comments have suggested keeping variable annuities within the 

prior exemption, Prohibited Transaction Exemption 84–24, that 

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they and other insurance and annuity products have been enjoyed 

since the 1970s, this is a significant change of path in this proposed rule. If this is not something the Department is considering, 

it is important that the final rule clarify the treatment of variable 

annuities under the best in contract exemption and permit the use 

of commissions and sales of proprietary products without imposing 

unnecessary and burdensome conditions. 

Specifically, I would ask you to inform the committee as to what 

modifications to the best in contract exemption the Department is 

considering in order to provide a clear and workable path to make 

variable annuities available to clients when these products would 

be in the client’s best interest. 

Secretary PEREZ. Sure, during both the informal process before 

we had the formal rulemaking and during the formal notice and 

comment process and the hearings that we held, we received a lot 

of comments on the issues that you raised and I can assure that 

we have taken them seriously. We had a number of meetings with 

various stakeholders, often at the request of members of Congress, 

and we are in the process now of finalizing the rules, so I cannot 

get too detailed, but I can certainly assure you that when we reach 

the end of this process, we would be more than willing to explain 

what the proposal was, what changes were made, and why we did 

what we did. 

Mr. BISHOP. Quick follow-up, you do recognize that the issue is 

one that has been raised by several individuals, several companies, 

several clients that are impacted by this and it is an issue that you 

are working on? 

Secretary PEREZ. It is absolutely an issue that we have heard 

about and are working on. 

Mr. BISHOP. Thank you. 

Chairman KLINE. Gentleman yields back. Mr. Polis? 

Mr. POLIS. Thank you, Mr. Chairman, welcome, Mr. Secretary— 

Secretary PEREZ. Good morning. Good to see you. 

Mr. POLIS. – to our Committee. Great to see you, always a pleasure. As you know, part of our bipartisan budget deal required a 

catch up for civil monetary penalties to keep up with inflation for 

OSHA penalties, for instance which have not been increased since 

1990 and have actually been carved out for annual adjustment. 

The Fair Labor Standards Act has a maximum civil monetary 

penalty of $1,100 for each willful and repeated violation of, for instance, the minimum wage or overtime pay provisions of the law 

and, of course, stolen wages can also be recouped, but the punitive 

aspect is limited to that $1,100, which often is completely insufficient as a deterrent. And what I wanted to ask you, to ensure that 

there is a real deterrent to willful or repeated wage theft or failure 

to pay overtime, what types of additional penalties, such as criminal penalties or increased civil penalties, could we look at to ensure 

that violations of our wage and hour laws are not simply a cost of 

doing business? 

Secretary PEREZ. Sure. Two dimensions to the question. Number 

one, the provision as part of the bipartisan budget act directed us 

to issue an interim final rule by July 1st to implement the inflation 

adjustments, and I want to assure you that we are on track to get 

that done. The second dimension of your question, though, I think 

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goes beyond that and reflects the fact that in a lot of the work that 

we do defines our amount in the opinion of many businesses that 

I have spoken to, their cost of doing business and, as a result, they 

do not have the adequate deterrent. We just finished the prosecution of the aftermath of the Upper Big Branch disaster where over 

two dozen people died and the penalties just do not fit the crime 

and that is unfortunate. And that not only hurts the victims and 

their families, but it hurts employers who play by the rules, so I 

certainly look forward to working with you in that and there is bipartisan support. I have had a lot of conversations with a lot of 

people about that issue. 

Mr. POLIS. Great. And finally, I wanted to address within the 

Workforce Investment Act, the Department of Labor’s efforts to ensure that immigrants, including limited English-proficient job seekers and workers are able to acquire English and the skills they 

need to reach their full potential. I want to know how you are 

working with States to ensure that the needs of English language 

learners, immigrants, generally called literacy programs are being 

met. 

Secretary PEREZ. I first started working on this issue when I was 

a local elected official in county government and then I led this 

issue when I was in State government and now I have the privilege 

of working on this issue here. And WIOA, has imploded stovepipes 

between the Department of Education and the Department of 

Labor, in remarkable ways that will have, among other things, the 

benefit of helping English language learners not only get the 

English language instruction, but then get access to the job opportunities. And it is a targeted population with barriers so that we 

can focus on them. And I very much appreciate that question because it is very near and dear to my heart. 

Mr. POLIS. Great. 

Chairman KLINE. The gentleman’s time has expired. I think we 

are going to make it here with five minutes to spare, depends on 

the ranking member. Mr. Scott, you are recognized for any closing 

remarks. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Chairman KLINE. No pressure. 

Mr. SCOTT. No pressure. Mr. Secretary, yesterday I met with my 

local Workforce Development Board and they expressed gratitude 

for the outreach efforts by the Department in the WIA implementation, so I want to thank you for those efforts and making sure that 

WIA implementation goes the best way possible. One of the problems we have had with this hearing, Mr. Chairman, is that a lot 

of the issues we are discussing are in the middle of rulemaking, 

and so the Secretary is restrained on what he can say and we are 

restrained on what we know because we have not seen the proposed rules, but we do have a proposed rule on overtime that has 

been discussed and we heard about the option that some people 

want to take to work 80 hours a week. We decided decades ago 

that if you worked more than 40 hours a week, the principle is that 

you ought to get time and a half for the hours after 40, but the 

way inflation has worked, most of the workers who work more than 

40 hours a week who are technically on salary, but would have 

been covered under the old regulations, yet not only do not get time 

CEWDOCROOM with DISTILLER

70 

and a half, they do not get anything. So if you are paying for 

daycare while you are working, you have to pay for the daycare 

and you are getting absolutely no compensation for those extra 

hours. Mr. Chairman, we are looking forward to that regulation so 

that the same portion of workers that were getting overtime when 

we passed the rule to begin with still get it. 

I want to thank you for your work on silica and beryllium and 

look forward to those regulations taking place, and for your efforts 

to address wage theft starting with the requirement that Federal 

contractors and the employees of Federal contractors get a pay stub 

so that they can ascertain whether or not they are getting ripped 

off. So, Mr. Chairman, I want to congratulate the Secretary for 72 

consecutive months of job growth. That is a record by far and I 

think the last two years he has been setting a new record every 

month. We still have a long way to go, but at least clearly we are 

going in the right direction, so thank you, Mr. Chairman. 

Chairman KLINE. I thank the gentleman. Mr. Secretary, this conversation went pretty much as I think we expected it might. You 

as the ranking member said you have a number of rules that are 

in the rulemaking process and we do not have full visibility into 

that, but we have concerns and those concerns were expressed by 

a number of my colleagues on the fiduciary rule, which I know you 

have heard about almost every waking hour because, if you have 

not, believe me, I have. The joint employer, the relationship between franchisors and franchisees, there is a lot of concern out 

there. There is a lot of concern and we need to see what that is 

going to look like. 

The persuader rule that Mr. Byrne, our resident labor lawyer 

here, was talking about seems to me to be a clear infringement on 

the rights of employers, the ability for employees to get information, and concerns for those lawyers that have to be called in because as Mr. Byrne said, your small businesses, they do not have 

a legal team there. They probably do not have an HR department 

and they need that counsel, so I am concerned and I know many 

are concerned based on the visits to my office and the calls and 

emails. 

And then there is some disagreement over overtime. The threshold that we have seen in the proposed rule is I think $53,000, 

which if you are in parts of rural America is an awful lot of money, 

maybe not in New York, but in a lot of places, so there are very 

real concerns, and we are very anxious to look into these rules. 

Maybe magic has occurred from our perspective and the rules have 

not come out to be perfectly reasonable, but they do not look like 

that right now, so our concerns are high. We are going to continue 

to look at this and work with you and your staff. 

I was committed to noon; I think I am going to make it by 30 

seconds. I want to thank you for your testimony and your active 

engagement in our questions and answers. There being no further 

business, the meeting stands adjourned. 

Secretary PEREZ. Thank you. 

[Questions submitted of the record and their responses follow:] 

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August 12,2016 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE U.S. HOUSE OF REPRESENTATIVES 

2176 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6100 

The Honorable Thomas E. Perez 

Secretary 

U.S. Department of Labor 

200 Constitution Avenue 

Washington, D.C. 20210 

Dear Secretary Perez: 

HIJU~fll (.. •B()!!!IY'"i;;CUfi,\'IKli<~M 

flo"ld~11Membvr 

Thank you tor testifying at the March 16,2016, Committee on Education and the Workforce 

hearing entitled "Examining the Policies and Priorities for the U.S. Depmiment of Labor." I 

appreciate your participation. 

Enclosed are additional questions submitted by committee members following the hearing. 

Please provide written responses no later than August 26, 2016, for inclusion in the official 

hearing record. Responses should be sent to Callie Harman of the Committee staff She can be 

contacted at (202) 225-7101. 

Thank you again for your contribution to the work of the Committee. 

Sincerely, 

hairman 

Committee on Education and the Workforce 

Enclosure 

cc: The Honorable RobeJi C. "Bobby" Scott, Ranking Member, Education and the Workforce 

Committee 
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Chait·man Kline (MN) 

Worlrforce Development 

1. In our work to reform an outdated workforce development system, Congress was 

intentional in requiring contracts for the one-stop centers to be approved in an open, 

competitive process. The Committee has received troubling reports about local workforce 

development boards working to circumvent the competitive process by awarding nominal 

operations contracts competitively but then awarding the provision of one-stop services 

to state or local agencies on a noncompetitive basis. Competition helps ensure American 

job-seekers receive the assistance they need from high-quality providers. What steps is 

the Department of Labor (Department) taking to ensure an open, competitive process and 

that there is no conflict of interest in awarding center services? 

2. Paying for results is an important way to deliver effective taxpayer-funded programs. The 

"pay-for-success" approach can create incentives to assist harder-to-serve populations, 

such as retmning veterans, the long-te1m unemployed, or at-risk youth, and payments are 

only made if specific outcomes are achieved. 

While the Department has hosted webinars and PowerPoint presentations discussing the 

availability of pay-for-perfonnance contracting, more can be done to raise awareness 

about this innovative contracting. What measures is the Department taking to provide 

state and local leaders the technical assistance necessary to implement pay-forperformance contracting? 

3. The Workforce Innovation and Opportunity Act (WIOA) was designed to reduce 

administrative costs and unnecessary bureaucracy so state and local agencies can better 

focus on helping individuals get back to work. The law empowers each state to submit a 

single, unified state plan for the core programs authorized in WIOA. States have been in 

the process of developing these plans for many months despite the Depmtment's repeated 

delays implementing the law. 

There are a number of concerns with the Depmtment's decision to require states to 

submit plans through a cumbersome, one-size-fits-all web p01tal. Leaders of state 

workforce agencies have raised concems about potential retaliation should they submit 

their plans as a single document. While drop-down tabs and word limits might reduce 

administrative costs in Washington, the submission of state plans in this manner requires 

duplicative work by state workforce agencies and transforms state plans into mere 

compliance documents. What assurances will the Depmiment provide that states will not 

be unfairly penalized for submitting plans as written rather than in a piecemeal fashion? 

Transitional Reinsurance Fee 

1. Those who administer self-funded health plans are required to pay a reinsurance fee, 

which was created in the Patient Protection and Affordable Care Act. However, neither 

the plans nor the employees covered by the plans receive any funds from the transitional 
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reinsurance fee program. This is the case even though self-funded group health plans also 

have participants that are high risk and chronically ill, experiencing significant medical 

claims. As one of the primary agencies with jurisdiction over private, self-funded group 

health plans, the Department should be concerned about the impact of additional costs on 

the ability of employers to maintain these plans and the quality of health care coverage 

Americans receive through these plans. How much in fees have been, or are estimated to 

have been, collected from self-funded plans for each year in the reinsurance program 

(2014-2016)? 

Employer Notice of Coverage 

1. Under the Patient Protection and Affordable Care Act, employers were to provide a 

"Notice of Coverage Options" document to existing employees by October 1, 2013, 

detailing any employer-sponsored coverage options provided. Approximately one week 

before that deadline, the Department issued a "Frequently Asked Questions" document 

indicating there would be no penalties for failure to provide the document to employees 

by the October 2013 deadline. However, for newly hired employees, businesses are 

mandated to provide the Notice of Coverage Options document within two weeks of their 

start date. Will there be penalties for failure to distribute this document to newly hired 

employees? If so, when will the penalties begin? 

Fiducimy Rulemaking 

I. Chairman Ron Johnson (R-WI) of the Senate Homeland Security and Government 

Affairs Committee released a report detailing the Department's rejection of comments 

and suggestions provided by the Securities and Exchange Commission during the 

fiduciary rulemaldng process. According to the report, the Depatiment ignored the 

suggestion of the Securities and Exchange Commission to examine the costs and benetits 

of alternative approaches to its tlduciary regulation. Senator Johnson has asked the Oftlce 

of Management and Budget for more information about this failure. Why did the 

Department decide not to analyze alternatives to its preferred regulatory approach? 

2. The administration has repeatedly referenced "hidden fees" as one of the problems with 

the current system and one of the reasons that the new rule is needed. Which fees 

specifically are "hidden" from disclosure under ctment securities law and the Employee 

Retirement Income Security Act? 

Overtime Rulemaking 

1. The Department's analyses of its overtime rule have been criticized by economists and 

the Small Business Administration as being incomplete and lacking transparency. The 

Department did not adequately consider the impact of the rule on important 

constituencies that will be dramatically impacted by the changes such as nonprotits 

organizations, institutions of higher education, and public sector employers. F1.nihennore, 

the Department's decision to adopt automatic. increases will eliminate future 

oppottunities for concerned stakeholders to· provide input. 

2 
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How can the Depmtment justify finalizing a rule that did not involve proper consultation 

with all stakeholders, lacks accurate and transparent impact data, ignores regional 

differences in costs of living, and eliminates future oppmtunities for notice and 

comment? 

2. Congress created exemptions from overtime requirements for certain employees. 

However, under the Department's overtime rule, employees who were never intended to 

be covered will now be overtime-eligible. 

How can a nonprofit serving adults and children with developmental disabilities in a rural 

community continue to provide vital services when faced with significant increases in 

administrative costs? 

What happens when no one at a nonprofit serving at-risk youth, including the executive 

director, is able to respond to emergency situations because their workplace smart phones 

have been taken and there is no budget for overtime pay? 

Companionship Exemption 

I. Now that the final companionship exemption regulations are in efTect, how does the 

Depmiment anticipate caregivers will be able to maintain their income levels, especially 

those who once worked more than 60 hours a week, by choice, but now have seen their 

hours capped at 40 hom·s per week? 

2. How is DOL targeting its enforcement efforts to ensure compliance with the new 

companionship exemption regulations? Is the agency targeting goverrunent agencies, 

private sector agencies, registries, families or all of them? 

OSHA Recordkeeping 

I. Your testimony discussed the Occupational Safety and Health Administration's (OSHA) 

new Rapid Response Investigations (RRI) that are triggered by reporting requirements 

OSHA instituted in January 2015. Employers are required to report an injury within 24 

hours and a fatality within eight hours. The Department's budget asked for over $6 

million in enforcement funding to support this effo1i. Can you provide the number of 

accidents prevented through this initiative? 

2. In your testimony, you highlighted the RlU process OSHA inspectors may undeJiake 

after an injury or fatality is reported. Explain how stakeholders were able to comment on 

this RRI during the recordkeeping comment period. 

Mine Safety 

1. The Mine Safety and Health Administration's (MSHA) budget allocates a 5 percent 

funding increase for coal enforcement and 3 percent funding increase for metal/non-metal 

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enforcement. As your testimony indicates, metal/non-metal mines experienced a 

signilicantly higher fatality rate last year. Why does MSI-!A continue to emphasize coal 

enforcement when the number of operating coal mines decreased by 26 percent last year? 

Blacklisting 

1. The Fair Pay and Safe Workplaces, or "blacklisting," Executive Order sets the dangerous 

precedent that employers are guilty tmtil proven innocent. For example, an Equal 

Employment Opportunity Commission (EEOC) letter of determination or a complaint 

issued by a National Labor Relations Board Regional Director must be disclosed by an 

employer under the Executive Order. An employer can be denied a federal contract even 

though such a letter or complaint represents allegation of wrongdoing and nor a final 

determination of wrongdoing reached after a fair, impartial adjudication process. Why 

are such non-final determinations being reported before employers have the oppottunity 

to fully litigate the matters? How is this premature reporting not going to be viewed as an 

automatic strike against the employer during the bidding process? 

2. The President's blacklisting Executive Order will have a substantial impact on the federal 

procurement process and dissuade ce11ain prime contractors from using a variety of small 

business subcontractors. What is the Department's position on the loss of small business 

contractors and the overall reporting burden imposed on employers looking to compete 

for federal contracts resulting from this Executive Order? 

3. The Executive Order ignores the current suspension and debarment process that already 

fairly and objectively excludes from federal contracting employers who violate employee 

rights and protections. As the 2015 proposed guidance is linalized, what protections are 

in place to ensure that those businesses with a history of complying with the law are not 

caught up in an unworkable and unnecessary regulatory scheme? 

Federal Employees' Compensation Act 

I. The Federal Employees' Compensation Act (FECA) program's "chargeback system" is 

structured in a way that assumes both the Department and the employing agencies are 

doing their part in ensuring workers' compensation payments are free offi"aud and abuse. 

This structure provides the Department authority over an agency's annual chargeback 

bill. 

To this end, the U.S. Postal Service Inspector General (USPS IG) has sent to the 

Department numerous cases suspected of being fraudulent, but the Department has failed 

to tal<e action. In fact, several of the Department's Office of Workers' Compensation 

Programs district offices- including Washington, D.C., Denver, Seattle, and 

Jacksonville have rep01iedly been difficult to work with according to the USPS IG. 

The USPS is bringing cases potentially involving fraud to the Department's attention and 

yet no action has been taken. Please explain the Department's reasoning for not taking 

action on these cases. 

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Equal Employment Data Collection 

I. Your testimony notes that the EEOC has proposed collecting pay data from employers. 

EEOC and the Department's Oflice of Federal Contract Compliance Programs would use 

this data to try to combat pay discrimination. However, serious questions have been 

raised about the utility of the data in combating discrimination. The job categories are 

very broad, and the data will not take into account experience, education, or skill level. 

Moreover, the pay data mandate will significantly increase compliance costs for 

employers in order to report information of questionable use. ln addition, EEOC's 

proposal does not provide much in the way of assurances that the reported data will 

remain confidential. Given these concerns, will you recommend that EEOC reconsider 

moving forward with its flawed pay data proposal? 

Temporal]' Foreign Workers 

1. For several decades, the Department has typically processed H-2B labor certification 

applications within 30 days or less. Last year, the Department published new ruleswithout any public notice or comment that dramatically altered the application process. 

Now, over a year later, significant portions of those regulations still have not been 

implemented, and the portions that have been implemented by the Department caused 

massive delays and backlogs that threatened to put several small companies out of 

business because they could obtain seasonal labor. Questions have been raised as to 

whether the Department's so-called "emergency processing" procedures reduced the 

delays. Has the backlog been cleared and returned to 30-day processing? How many 

additional staff were assigned to work on these cases in order to return to 30-day 

processing? What specific personnel or leadership changes were made within the 

Department to address the backlog and delays? Who in the Department was responsible 

for fixing the backlog and delays? As of today, how many certifying oftlcers docs the 

Department have approving I-1-28 applications? 

2. The Department requires as part of the H-2B application process that the employer first 

obtain from the Depmimcnt a prevailing wage applicable to the job. Until this year, this 

process routinely took two weeks. According to stakeholders, this process routinely took 

60 or 70 days this spring, which then further delayed the application process. However, 

the prevailing wage data for all of these jobs is publicly available at the Foreign Labor 

Ccttification Data Center website, which is developed and maintained under a contract 

with the Department's Office of Foreign Labor Cetiification. Before they even file their 

request for a wage with the Department, employers can look up the wage themselves on 

this website in less than five minutes. Yet, the Department's April2015 rules dictate that 

an employer cannot start any other pat1 of the H-2B application process until the 

Department provides the wage. Has the Department returned to processing these wage 

requests within a two-week timeframe? Who in the Depmiment was specifically 

responsible for fixing these delays in the prevailing wage determination process? How 

many people in the Department are responsible for the final sign-off and approval of a 

prevailing wage determination? 
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3. For employers tiling H-2B applications with the same job category, season afier season, 

year after year, would the Depmtment consider amending its procedures to allow 

employers to simply look up the prevailing wage from the Foreign Labor Certification 

Data Center website, print a copy of the webpage for their records, and then move on to 

the next part of the application process? 

4. As the Depmiment acknowledged, the timely processing this spring of employer requests 

for labor certifications under the H-2B program did not happen. Due to this troubling 

administrative failure, close to 80 percent of employers trying to avail themselves of a 

seasonal, legal workforce did not obtain needed workers by the date of need. In April 

2015, the Department adopted regulations that compressed its ability to process H-2B 

certification requests within 30 days, while also requiring a certifying officer to 

independently verify the information in each request rather than relying on an audit 

process to identify any problems. It should have been no surprise that reducing 

processing time for requests while simultaneously increasing the level of scrutiny each 

request receives would lead to significant delay in processing, regardless of an increase or 

decrease in requests received. Indeed, the impacted employers warned the Depmiment of 

this problem in hundreds of comments submitted when the regulations were tirst 

proposed. 

The rationale provided for changing the timeline for processing was the Depatiment 

believed a higher percentage of U.S. workers in the lower-skilled categories would be 

more likely to apply for a job advertised three months ahead of time versus a job 

advertised four months ahead. Please provide the number of U.S. workers who responded 

to advertisements in the 12-month period prior to the April2015 regulations and the 

number of U.S. workers who have responded to advettisements since the adoption of the 

new regulations. 

How many employers have been found to be violating the wages and recruitment 

requirements by ce1iifying officers in the actual certification process since the adoption of 

the April 2015 regulations? In comparison, how many employers have been found by an 

audit process to be in violation of the wages and recruitment requirements in the year 

prior to the adoption of the April 2015 regulations? 

5. Since the beginning of the year, there have been significant delays in processing of 

petitions under both the H-2B and H-2A programs. At one point after January l, 2016, 

only one out of more than 50 H-2A petitions had been processed in the statutory 

timelines the Department must follow. What caused the delays in H-2A processing? 

What did the Department do to resolve these delays? What needs to be done to ensure H2A employers do not face such delays in the future? 

State Workers' Compensation Opt-Out Laws 

1. States across the country have been exploring workers' compensation "opt-out" laws that 

give employers the flexibility to create their own private plans to compensate workers for 

injuries sustained on the job, in lieu of state workers' compensation laws. You recently 

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announced the Department will undertake a report about opt-out alternatives to stateregulated workers' compensation and cutbacks in slate workers' compensation benefits. 

Please provide details about this report and the increased attention the Department is 

giving to these opt-out laws. To date, what action has the Depatiment taken in regard to 

monitoring such laws? 

Rep. Wilson (SC) 

Energy Employees Occupational !!!ness Compensation Program 

1. South Carolina's Second Congressional District is home to a large munbcr of former 

energy employees from the Savannah River site located in Aiken, South Carolina. We 

have all seen reports highlighting the problems with the Energy Employees Occupational 

Illness Compensation Program. According to the Department's Office of the 

Ombudsman's 2014 Annual Report to Congress, only 60 percent of the total cases are 

from unique individuals, indicating that a large number of people arc submitting multiple 

claims. I have heard reports from constituents that some people have approved claims 

from one illness, but they have to go through the same difficult process if they develop 

complications due to their treatment or another covered disease. It seems that this 

program burdens applicants with excessive paperwork and a complicated claims process. 

Do you believe that the Energy Employees Occupational Illness Compensation Program 

functions as it was intended and is able to meet the needs of those who rely on the 

program for medical care? 

Apprenliceship Programs 

1. Every year it seems the Department requests more money for the creation of a national 

apprenticeship program. l am grateful that South Carolina has been successful in creating 

world class apprenticeships through programs like Apprenticeship Carolina, Savannah 

River Site, and MTU America. While South Carolina has had this success, there remains 

nominal autonomy at the state level; states are required to use the Department's 

regulations as a baseline for their own. What you refer to as aligrunent, I would describe 

as coercion. 

Has the Department considered whether granting states greater autonomy in regulating 

the program could more-effectively promote participation? 

Blacklisting 

I. We have continued to see the administration placing burdensome requirements on 

businesses, pmticularly those who contract with the federal government. The blacklisting 

Executive Order, issued in July 2014, outlines specific labor laws and Executive Orders 

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that employers must comply with to be eligible for a federal contract. That Executive 

Order does not include all the administration's latest administrative mandates, like the 

paid leave requirements. 

Under the blacklisting Executive Order, should employers expect to report compliance 

with new executive-imposed requirements? Is there a limit on what employers will be 

required to report on under this Executive Order? 

2. The Office of Labor Compliance Advisors (OLCA) was specifically denied funding for 

implementation of the blacklisting Executive Order in last year's Onmibus 

Appropriations bill signed into law on December 18,2015. In the bill's accompanying 

Managers' explanatory statement, it is clear no money should be used for the OLCA. As 

a result, the Depmtment appears to have moved implementation efforts to the Wage and 

Hour Division, as evidenced in the Fiscal Year 2017 congressional justification. 

How is DOL implementing the Executive Order given the loss of appropriations for the 

OLCA's operations, which would presumably be responsible for proposing, finalizing, 

and implementing all guidance? 

Hep. Foxx (NC) 

Workforce Development 

1. In my time here I have worked to ensure my constituents have the oppmiunity to develop 

in-demand skills and "eam while they learn" through all kinds of employer-led workforce 

development. This approach to workforce development is well-suited to many jobs and 

has proven effective for both employers and employees. 

For these reasons I an1 disappointed by the Department's dogmatic promotion of 

registered apprenticeships at the expense of other earn-and-leam models. The number of 

Americans participating in earn-and-learn apprenticeship-style programs not registered 

with the Department exceeds the number of Americans pmiicipating in the programs 

registered with the Department. I am deeply concerned the administration's promotion of 

the registered apprenticeship program is another attempt to pick winners and reward 

favorites. Has the Department considered how these proposed subsidies could 

disadvantage businesses which arc justifiably uncomfortable working with the 

Department and their employees? 

Paid Leave Rulemaking 

!. There are concems that the paid leave rule for federal contractors is one more in a series 

of batTiers to entry in the government market. In addition to this proposed rule, 

contractors have faced a number of new compliance obligations in recent years. These 

barriers, in many cases, have resulted in the govenunent paying more for inferior 

products relative to what was available in the commercial market. As a result, contractors 

who can bring innovation and efficiency to the federal procurement market may be less 

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inclined to sell to government agencies and incur the associated compliance expense and 

risk. How does the Department respond to such concerns? 

2. The proposed paid leave rule for federal contractors expressly states that it is not intended 

to excuse a contractor H·om providing more leave than contemplated by the rule if 

required by a collective bargaining agreement. However, the proposal does not state what 

should happen when a collective bargaining agreement provides sick leave or paid time 

off differently than required under the proposed rule. Collective bargaining agreements 

are generally the product of lengthy tmion negotiations where both parties are 

sophisticated and represented by counsel in reaching an "arms-length" agreement. In 

some instances, the parties may have agreed to provide less sick leave in exchange for 

greater wages or other benefits. Would the Department consider allowing the terms of a 

collective bargaining agreement for the accrual of sick leave- whether for more or less 

leave than proscribed by the rule to be acceptable in lieu of the rule's requirements? If 

not, why not? 

3. The proposed paid leave rule requires employees to receive one hour of paid sick leave 

for every 30 hours worked "on or in connection with" a government contract. However, 

there are many instances in which it will be impossible or impracticable for contractors to 

account for the exact number of hours that an employee spends working "on or in 

connection with" a covered contract. Government contractors, pmiicularly contractors 

providing commercial item products and services, often do not record employee time on a 

contract-by-contract basis, or their employees perform a mix of government contract and 

non-government contract work. In such cases, what records could a company keep to 

distinguish between work done on govemment contracts versus commercial contracts? Is 

the only option for a company to give these employees the maximum 56 hours required 

by the rule? 

In the situation above, would the Department allow a company to apply an average of the 

amount of covered work done by the company to these employees' time in order to 

determine the amount of sick leave that must accrue? For example, if, on average, 25 

percent of a company's work is on covered contracts, could these employees accrue leave 

for 25 percent of the time worked each week? 

Rep. Walberg (MI) 

1. Under the Obama administration, MSHA tabled efforts to create a drug testing program 

for miners. Given MSHA's priority to keep miners safe, please explain why this effort 

was suspended when it could help to ensure miners are afforded the confidence to know 

the person working next to them is not impaired by drugs or alcohol? 

2. What policies has MSHA adopted to encourage drug and alcohol-free workplaces and 

what actions has MSHA taken to promote and reinforce the rights of employers to 

conduct drug testing? 

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3. Is the agency aware of this or similar allegations, and, if so, please provide a description 

of any actions taken by MSHA to address these allegations, and please provide all 

relevant infmmation, documents, and communications related to these allegations and the 

agency's responsive actions. 

Proposed Rule on Criteria and Procedures for Assessment of Civil Penalties 

!. Does MSHA have any quantitative data, such as analyses of assessed penalties versus 

safety perfonnancc, either relating to individual mining operations or mining sectors, to 

show that a relationship exists between penalties and safety performance? If so, please 

provide a copy of such data and any report or study supporting the agency's proposal to 

increase and change assessments. 

2. This proposed rule makes significant changes to the way in which inspectors assign point 

values to violations. What steps has MSHA taken to create guidance and training so 

inspectors apply these changes and assign points in a uniform manner? What steps has 

MSHA taken to make any such guidance or training available to the regulated 

community? 

3. Did MSHA contact industry stakeholders, including business and labor, in crafting the 

proposed rule before releasing it to the public? If so, which groups did the agency 

contact, and is there a report that provides information about the results of the 

interactions? 

4. The regulated community has expressed the need for MSHA to conduct a 6-month test 

program that compares assessments under the existing Part l 00 guidelines with 

assessments under the proposed guidelines. Does MSHA intend to conduct the pilot 

program that industry stakeholders requested, or does the Agency have a similar plan that 

will realistically assess how the rule will affect the regulated community before full 

implementation? 

Pattern !?(Violations Rule 

l. In January 2013, MSHA finalized a rule revising its existing regulation for Pattem of 

Violations (POV). Beginning with the rule's effective date on March 25,2013, please 

provide the Committee the lollowing information: 

a. How many n1cilities have been placed in POV status? 

b. How many facilities have filed Corrective Action Programs (CAPS)? 

c. How many of the CAP-facilities have reduced the significant and substantial 

(S&S) violation Jl·equency rate by 50 percent, or reduced the S&S frequency rate 

to a level at or below the median S&S frequency rate for mines of a similar type? 

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2. Since the effective date of the Final Rule, how many operators have identified mistakes 

in data which led to the facilities being placed in POV status? In addition please provide 

how many of these mistakes can be characterized as: 

a. Citations entered incOITectly? 

b. Citations not yet updated in MSHA's computer system? 

c. Decisions rendered by the Mine Safety and Health Review Commission, thus 

nullifying the citations? 

d. Contested citations? 

e. Citations issued in enor to an operator instead of an independent contractor? 

Wellness Programs 

I. As you know, employers sponsor wcllness programs to improve the well-being of their 

workforce by incentivizing employees and their families to adopt healthy lifestyles. This 

reduces health care costs and increases productivity. One of the Patient Protection and 

Affordable Care Act's few bipartisan provisions encouraged and expanded these wellness 

programs. However, the EEOC continues to wage an aggressive attack on employer 

wellncss programs. Last year, the EEOC issued proposed rules (finalized in May 2016) to 

amend regulations under the Americans with Disabilities Act and the Genetic Information 

Nondiscrimination Act, which have the effect of reducing the ability of employers to offer 

these programs. That's why I cosponsored H.R. 1189, the Preserving Employee Wellness 

Programs Act. The bill protects wellness programs from EEOC's counterproductive and 

burdensome requirements. Do you share our concerns that EEOC's proposed rules are 

counterproductive? Was the Department in contact with EEOC as it finalized the 

proposed rules? 

2. Private sector wellness programs benefit employees, their families, and employers. But, 

employers need flexibility in developing and administering these plans. The Preserving 

Employee Wel!ness Programs Act (H.R. 1189) improves current law to provide 

employers with certainty and flexibility in structuring their wellness programs. How is 

the Department ensuring that wellness programs flourish, so that health care costs are 

minimized for employer sponsored coverage and employees alike? 

Blacklisting 

1. The Depmiment issued guidance implementing the blacklisting Executive Order in May 

2015. When can we expect that guidance to be i1nalized? What will be the effective date 

of that guidance? 

2. The proposed blacklisting guidance stated that additional guidance would be issued on 

equivalent state labor laws and subcontractor reporting requirements at a later date. What 

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is the status of this follow-up guidance and will it be proposed for notice and conm1cnt? 

Given the breadth of this secondary guidance, shouldn't that information be 

proposed before finalizing the May 2015 guidance, especially in light of the burdensome 

compliance requirements and the need to implement new reporting systems? 

Rep. Heck (NV) 

l. On March 13,2014, the President issued a memorandum instructing you to update the 

Department's overtime regulations under the Fair Labor Standards Act. The final rule 

issued by the Department increases the salary threshold for deten11ining which executive, 

administrative, and professional employees (or "white collar" employees) are eligible for 

overtime compensation. 

I have heard tl·om many of my constituents representing a cross-section of industries who 

arc extremely concerned that this rule will seriously harm their industries; and ultimately 

force a reduction in hours or elimination of positions altogether. 

This issue will affect businesses of all sizes, even larger employers like the resort casino 

industry in my state, Nevada. Employees of these resoti casinos employ nearly 28 percent 

of the state's workforce. Increasing the salary threshold to $47,476 will dramatically 

increase the labor burdens on these employers. This will likely result in workers being 

shifted to hourly status and facing reduced hours or even demotions. At a time when the 

cost of living continues to rise, how can the Department detend this rule which takes 

direct aim at hardworking middle-class Americans and threatens their job and financial 

security? 

Rep. Stefanik (NY) 

1. I wanted to discuss your agency's changes to federal overtime exemptions that will have 

sweeping unintended and adverse impacts on employees and employers across the 

country. Millennials will be particularly hard hit by the unprecedented increase in the 

salary threshold. Recent college graduates across the country will see career pathways 

and opportunities for flexible work arrangements diminish significantly. There is not a 

single state in which median entry level wages for full-time workers with a college 

degree comes even close to $47,476, and this challenge is even more difficult in places 

like the North Country where companies already face challenges attracting millennia! 

talent. What this means is more college graduates will enter the workforce as hourly 

employees and will struggle to pay off college loans and make the important steps toward 

financial independence that so many young people today wrestle with. The rule's annual 

increase to the salary threshold will only exacerbate these negative impacts as 

opportunities to move into salaried, exempt positions become further and fmiher out of 

reach. 

What analysis did the Department conduct in the development of this rule regarding the 

impacts on career advancement opportunities for millennials entering the workforce with 

student loan debt? 

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Did the Department evaluate the impact that this rule will have on the ability of areas like 

upstate New York to continue to attract young people when those individuals will be 

stuck in hourly jobs with few opportunities for upward mobility in the workforce? 

Ranking Member Scott (VA) 

1. In 2007 the Office of Legal Counsel (OLC) issued a memorandum in response to a 

request from a Department of Justice grantee, World Vision, to be exempted fi·om a 

statutory employment nondiscrimination provision. 1 World Vision argued that complying 

with this nondiscrimination provision unduly burdened their religion under the Religious 

Freedom Restoration Act (RFRA). The OLC granted this request in 2007 authorizing 

World Vision to continue to discriminate against prospective employees on the basis of 

religion in taxpayer f\mded programs. Over the past nine years, the Department of Justice 

has not only allowed this exemption to stay in place for World Vision, but this taxpayer 

funded discrimination has been extended to other programs in other agencies. Is this 

memo limited to grantees? 

a. Does the Department allow faith-based organizations receiving DOL grants to 

discriminate against Muslims, Jews, and Catholics? 

b. As a hypothetical, can a faith-based service provider receiving DOL funds to 

facilitate training and employment services to formerly incarcerated juveniles 

discriminate against LGBTQ social workers, counselors, and other staff because 

of their sexual orientation or gender identity? 

c. What recourse does the Depmiment provide to individuals whose civil rights are 

statutorily protected but experience discrimination in taxpayer-funded programs 

as a result of the OLC memo? 

d. What steps are you taking to end this federally-sanctioned discrimination and to 

ensure that organizations operating programs on behalf of the federal govcnnnent 

are aware of their civil rights obligations? 

2. The President has issued the Executive Order on Fair Pay and Safe Workplaces, which 

requires bidders and contractors to provide information on labor law violations over the 

previous tlu·ee years. This will help ensure that contracting officers have full infonnation 

when determining whether a prospective contractor is "responsible." Opponents label this 

policy of screening contractors for their labor compliance record as "blacklisting," 

a. What is your response to this blacklisting argument? Is that a fair characterization 

ofthis Executive Order, and if not, please explain why, 

1 ht1p.>;LL"L~stice.gov/sites/default/files/olc/oplnions/2007/06/31/worldvlslon.pdf 

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b. The Executive Order requires that the Federal Acquisition Regulatory Council 

issue implementing regulations and requires the DOL to issue guidance. What is 

the status of the rules and guidance? 

3. The Department proposed regulations related to the Black Lung Benefits Program which 

requires parties including employers, claimants, attorneys and other authorized 

representatives- to disclose all medical information developed in connection with a 

claim for benefits, even when the party does not intend to submit the information into 

evidence. That rule was proposed on April 28, 2015, and the comment period closed June 

29,2015. Twenty comments were received. 

What is the status of this rule and when will a final rule be issued? 

4. Patriot Coal has recently liquidated after filing for bankruptcy, and the Black Lung 

Disability Trust Fund became liable for approximately $65 million in uninsured claims 

costs because Patriot Coal did not have adequate surety to back up its self-insured black 

lung claims liability. 

a. What is the Depatiment doing to ensure that there is adequate slU'ety posted tor 

the rest of the self-insmed operators? 

b. Has the Department estimated the maximum potential financial exposure to the 

Black Lung Disability Trust Fund ll·om self-insured operators where there is 

insufficient surety and responsible mine operator has filed tor bankruptcy or is 

anticipated to do so in the foreseeable future? 

c. What is the range of that potential liability to the Trust Fund? 

d. Does the Department have adequate tools to adequately defend the financial 

interests of the Trust Fund when self-insured operators do not have sufficient 

surety at the time they file for bankruptcy? 

5. Charges for compound drugs provided to injured workers under the Federal Employees' 

Compensation Act have escalated at a steep rate since 2013. The costs to the U.S. Postal 

Service for compound drugs from FECA claims are expected to exceed $150 million in 

FY 2016- up from only $4.9 million in FY 2012. The USPS IG recently issued a report 

(HR-MA-16-003) quantifying this dramatic increase in the compound drug costs and has 

recommended that DOL adopt a fee schedule and reimbursement caps. 

a. What has DOL done to address the concerns of the U.S. Postal Service since this 

matter was brought to the attention of the Oftlce of Workers' Compensation 

Programs? 

b. Will the DOL adopt a fee schedule and reimbursement caps for compound drugs? 

If so, on what date will these kick in? 

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c. Is DOL tracking whether other federal agencies are experiencing similar 

percentage increases in compound drug costs for injured workers receiving 

benefits under FECA? 

d. Please provide data on the total amount paid out by OWCP for compounded drugs 

under the FECA program between FY 2011 and FY 2016 year to date. 

Rep. Davis (CA) 

1. Earlier this year, the Depattment, delayed the release ofWIOA regulations mandating 

competitive bid process for One-Stop Career Centers fl·om January 2016 until June 2016. 

Local workforce boards have communicated that shifting to a procurement process is a 

complex and time consuming process. Considering the reduced time in which to 

complete the proposed shift by the July 2017 deadline, what steps is the Department of 

Labor taking in providing flexibility or an extended deadline to states to meet the new 

standards? 

Rep. Fudge (OH) 

1. Apprenticeship programs are a proven on-the-job training strategy that put workers on a 

pathway to the solid middle class jobs. Research suggests that not only do apprentices 

earn an average of $50,000 after completing training but for every dollar taxpayers invest 

on apprenticeships we see $27 in benefits. The Department has made great strides in 

lifting up this successful on-the-job training model. Our country is cmTently facing a 

skills gap, which will only increase with time. Over 70 percent of organizations cite 

"capability gaps" as their biggest challenge. What steps is the Department taking to 

provide our cutTen! workforce with more dynamic skills that will allow them to continue 

to advance alongside our evolving economy? 

We talk a lot about moving young people from high school and community colleges to 

skilled jobs. How is the Department strengthening pipelines between various sectors in 

order to repurposc our workforce and support our middle-aged workers in career 

tnmsitions? 

2. I am concerned that key populations are facing significant batTiers to participating in 

registered apprenticeships. Can you tell me more about what the Department is planning 

to do to expand apprenticeship programs to ensure that more women and people of color 

are recruited for and retained in registered apprenticeship programs? 

3. We all know how difficult it is for forn1erly incarcerated individuals to get back into the 

workforce. Everyone deserves a second chance in life, including those who have served 

their time and repaid their debt to society. The vast majority of individuals released from 

prison arc trying their best to get back on their teet, become productive members of their 

communities and get back into the workforce. One significant barrier to finding 

meaningful employment is the "box" on employment applications asking applicants to 

disclose upfront whether they have ever committed an offense. Can you tell us where the 

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Department is on implementation of"ban-the-box" at both the federal and local level? 

Can you speak about the work you and the Department are doing to help these folks get 

back on their feet and into good jobs? 

Rep. Bonamici (OR) 

I. Mr. Secretary, a business owner in my district has brought to my attention that a 

particular OSHA regulation on flammable and combustible liquids in container and 

portable tank storage is egregiously outdated. The section is based on a version of the 

National Fire Protection Association fire code published in 1969 that has since separately 

been updated numerous times with the most recent edition in 2015. Several major fires 

have resulted in improper storage of ignitable liquids. In June of20 15, a letter was sent to 

Dr. Michaels from a group of interested pmiies named PaekSafe regarding the serious 

safety issue concerning this regulation, OSHA 29 C.F.R. 1910.106 based on the 1969 

version. In response, although the Department acknowledged the outdated regulation, 

they did not provide a plan to update it. OSHA's mission is to ensure workers are safe. 

To meet this mission, it is important that businesses that use containers to store their 

products are following the best available science to ensure the safety oflife and property. 

How does OSHA plan to update the references in the regulations to ensure a safe and 

healthy workplace for workers? What do you need from Congress to make sure this 

regulation can be updated? 

2. Unemployment benefits serve a critical role in helping people while they are seeking 

work. I am concerned about the unemployment benefit gap facing many school 

employees across the country. In my home state of Oregon, our legislature recently 

passed a bipartisan, narrowly-tailored solution to this challenge with suppmi from both 

the school employee union and the school boards association (SB 1534, 2016 Oregon 

Session). The bill aims to fix the benefit gap facing approximately 45 "non-professional" 

school employees in Oregon each year who leave their job for unavoidable reasons and 

whose unemployment benefits are lost when schools are on break. Custodians should not 

lose their unemployment benefits simply because they work in a school rather thm1 an 

office building. 

There is agreement in Oregon at the state and local level to keep this narrow group of 

former school employees fi·01n losing their benefits. Unfortunately, despite the Oregon 

legislation, the agreement among stakeholders and the Department's flexibility for "nonprofessional" employees, the Depmiment has stated that this solution is unacceptable. 

The Department is provided with flexibility over this class of workers; please explain 

why a narrowly-drafted law, like Oregon's, is problematic. Are there alternative ways to 

address this group of employees so their benefits do not expire? The unemployment 

insmance program is premised on a partnership between the state and federal 

governments, so please explain specifically what steps the Department is taking to assist 

states in their efforts to design and implement programs that best tit their needs and 

comply with federal law. 

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U.S. House of Representatives 

Committee on Education and the Workforce 

Hearing on "Examining the Policies and Priorities of the U.S. Department of Labor" 

March 16,2016 

Questions for the Record 

Chairman Kline (MN) 

Workforce Development 

l. In our work to reform an outdated workforce development system, Congress was 

intentional in requiring contracts for the one-stop centers to be approved in an open, 

competitive process. The Committee has received troubling reports about local workforce 

development boards working to circumvent the competitive process by awarding nominal 

operations contracts competitively but then awarding the provision of one-stop services 

to state or local agencies on a noncompetitive basis. Competition helps ensure American 

job-seekers receive the assistance they need from high-quality providers. What steps is 

the Department of Labor (Department) taking to ensure an open, competitive process and 

that there is no conflict of interest in awarding center services? 

Response: The Department acknowledges the intent of Congress to improve one-stop 

operations through competition. The WJOA Joint Final Rule recognizes that intent and, 

in instances in which a State is conducting the competition, requires States to follow the 

same competitive process to select the one-stop operator that they use for non-Federal 

funds. The rule also requires local areas to follow procurement standards for competitive 

processes as outlined in the "Uniform Administrative Requirements, Cost Principles, and 

Audit Requirements for Federal Awards" (Uniform Guidance), in 2 CFR part 200 

(http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title02/2cfr200 main 02.tpl). 

The mandatory competition requirements in20 CFR 678.605(c) of the WIOA Joint Final 

Rule states that the competitive process must be based on local procurement policies and 

procedures and the principles of competitive procurement, as described in the Uniform 

Guidance. Under the Uniform Guidance at 20 CFR 200.318(a), all procurements carried 

out under local procurement policies must conform to applicable Federal law and the 

Uniform Guidance standards. This includes establishing appropriate conflict of interest 

policies and procedures, where necessary. In addition, a local board only may be 

selected as the one-stop operator if that selection is the result of a competitive process 

consistent with the Uniform Guidance and is agreed to by both the chief elected official 

and the Governor as provided in Section 678.61 0( d). 

Non-Federal entities, including subrecipients of a State (such as Local WDBs) may select 

a one-stop operator through sole source selection when consistent with local procurement 

policies and procedures which conform to the Uniform Guidance set forth at 2 CFR 

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The Uniform Guidance states, at 2 CFR 200.320(!), that procurement by noncompetitive 

(sole source) proposals is procurement through solicitation of a proposal from only one 

source which may be used only when one or more of the following circumstances apply: 

a. The item or service is available only from a single source; 

b. The public exigency or emergency for the item or service will not permit a delay 

resulting from competitive solicitation; 

c. The Federal awarding agency or pass-through entity expressly authorizes 

noncompetitive proposals in response to a written request from the non-Federal 

entity; or 

d. After solicitation of a number of sources, competition is determined inadequate, 

whether for reasons of number or quality of proposals/bids. 

All grant recipients of Federal Funds must adhere to the Uniform Guidance at 2 CFR 200. 

Contained in the Uniform Guidance are the Procurement Standards which require grant 

recipients and subrecipients to have code of conduct policies that include or address real, 

apparent, and organizational conflict of interest issues. The Joint Rule explains the need 

for conflict of interest policies along with firewalls when one entity takes on more than 

one role including the role of a one-stop operator. 

Through the Departments of Labor's and Education's use of transition authority under 

section 503 ofWIOA, States and local areas have until July!, 2017 to implement these 

requirements. At that time, a one-stop operator selected under a competitive process 

must be in place and operating one-stop centers in all local areas. 

The Department recognizes that this is a complex policy and routinely provides technical 

assistance to help local areas and states comply with these provisions. The Department 

also plans to issue guidance in this area. The Department will continue to monitor States 

and local boards to confirm that they have policies in place so that competition is 

conducted according to the requirements and spirit of WIOA and the Final Rules. 

2. Paying for results is an important way to deliver effective taxpayer-funded programs. The 

"pay-for-success" approach can create incentives to assist harder-to-serve populations, 

such as returning veterans, the long-term unemployed, or at-risk youth, and payments are 

only made if specific outcomes are achieved. 

While the Department has hosted webinars and PowerPoint presentations discussing the 

availability of pay-for-performance contracting, more can be done to raise awareness 

about this innovative contracting. What measures is the Department taking to provide 

state and local leaders the technical assistance necessary to implement pay-forperformance contracting? 

Response: The Department greatly appreciates the flexibility Congress provided under 

WIOA for pay for performance contracting. We are currently developing guidance and 

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technical assistance to support states and localities which are pursuing pay for 

performance or have expressed interest in this innovative contracting strategy. We plan 

to issue guidance in Program Year 2016, and, through technical assistance activities, to 

promote a better understanding throughout the workforce system of how to execute a pay 

for performance strategy. The guidance will articulate important principles to follow 

when pursuing a pay for performance strategy. We also plan to include lessons learned 

from the Department's Pay-for-Success grants. Additionally, we hope to see more statelevel activity in the future, since some states have expressed interest in pursuing pay for 

perfonnance strategies. 

The Department has issued a Training and Employment Guidance Letter (No. 2-16) 

providing guidance to grantees for reporting financial expenditures, instructions, and 

other guidance. Included in this was guidance on reporting pay-for-performance 

expenditures. 

3. The Workforce Innovation and Opportunity Act (WIOA) was designed to reduce 

administrative costs and unnecessary bureaucracy so state and local agencies can better 

focus on helping individuals get back to work. The law empowers each state to submit a 

single, unified state plan for the core programs authorized in WIOA. States have been in 

the process of developing these plans for many months despite the Department's repeated 

delays implementing the law. 

There are a number of concerns with the Department's decision to require states to 

submit plans through a cumbersome, one-size-fits-all web portal. Leaders of state 

workforce agencies have raised concerns about potential retaliation should they submit 

their plans as a single document. While drop-down tabs and word limits might reduce 

administrative costs in Washington, the submission of state plans in this manner requires 

duplicative work by state workforce agencies and transforms state plans into mere 

compliance documents. What assurances will the Department provide that states will not 

be unfairly penalized for submitting plans as written rather than in a piecemeal fashion? 

Response: All 57 unified and combined State Plans were approved on or before June 30, 

2016, and no states were penalized for any reason. The five Departments- Labor, 

Education, HUD, HHS and USDA- with responsibility for the approval of combined and 

unified plans determined that a single "point-of-entry" for the State submission of the 

strategic plans was important; it would facilitate a cohesive approach to planning for 

State agencies, signal a coordinated review by federal partners, and provide a consistent 

format that is transparent to any interested party. The portal allows the federal partners to 

make all State Plans available to the general public and makes those plans accessible to 

individuals with disabilities- in other words, in compliance with section 508 ofthe 

Rehabilitation Act of 1973, as amended by WIOA. The portal also allows for searches 

across State plans based on specific topics such as career pathways or sector strategies, 

enabling States and any interested stakeholders to search, review, and share information 

in the plans more easily than a less centralized system. 

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In order to conserve Federal resources and take advantage of technology already used by 

the states, the Departments bui It upon an existing portal originally developed by the 

Rehabilitation Services Administration for its Vocational Rehabilitation agencies' use in 

previous strategic planning cycles to use as the single "point-of-entry." In addition to the 

benefits to State agencies and the public transparency of State plans, the portal allowed 

for the review and approval of 57 State Plans concurrently by multiple agencies within 

the short statutory timelines. A similar process will be used again as States modify their 

plans. We are aware of the challenges states faced using the single portal for the first 

time. Now that one State Plan cycle is complete, the Departments plan to review the 

portal's features and gather state feedback to improve the portal's utility for State users 

and other stakeholders. 

Transitional Reinsurance Fee 

I. Those who administer self-funded health plans are required to pay a reinsurance fee, 

which was created in the Patient Protection and Affordable Care Act. However, neither 

the plans nor the employees covered by the plans receive any funds from the transitional 

reinsurance fee program. This is the case even though self-funded group health plans also 

have participants that are high risk and chronically ill, experiencing significant medical 

claims. As one of the primary agencies with jurisdiction over private, self-funded group 

health plans, the Department should be concerned about the impact of additional costs on 

the ability of employers to maintain these plans and the quality of health care coverage 

Americans receive through these plans. How much in fees have been, or are estimated to 

have been, collected from self-funded plans for each year in the reinsurance program 

(2014-2016)? 

Response: The transitional reinsurance program, and collection of reinsurance 

contributions, is administered by HHS for all applicable health plans and issuers, 

including self-funded group health plans. The Department of Labor does not collect or 

maintain data on contribution amounts that have been collected by HHS. 

Employer Notice of Coverage 

1. Under the Patient Protection and Affordable Care Act, employers were to provide a 

"Notice of Coverage Options" document to existing employees by October 1, 2013, 

detailing any employer-sponsored coverage options provided. Approximately one week 

before that deadline, the Department issued a "Frequently Asked Questions" document 

indicating there would be no penalties for failure to provide the document to employees 

by the October 2013 deadline. However, for newly hired employees, businesses are 

mandated to provide the Notice of Coverage Options document within two weeks oftheir 

start date. Will there be penalties for failure to distribute this document to newly hired 

employees? If so, when will the penalties begin? 

Response: No. The Patient Protection and Affordable Care Act amended the Fair Labor 

Standards Act (FLSA) section 18B to require employers subject to the FLSA to provide 

employees a notice of coverage options consistent with certain form and content 

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requirements. Technical Release 2013-02 (May 8, 2013) stated that employers must 

provide the notice of coverage options to current employees not later than October 1, 

2013, and, for employees newly hired after that date, "within 14 days of an employee's 

start date." The Department's FAQ (mentioned in the question) provided that if a 

company is covered by the Fair Labor Standards Act, it should provide a written notice to 

its employees about the Health Insurance Marketplace by October I, 2013, but there is no 

fine or penalty under the law for failing to provide the notice. In addition, there is no fine 

or penalty under the law for failing to provide the notice to newly hired employees. 

However, the Department urges all employers to provide the notice of coverage options 

to all newly hired employees as this notice provides important information necessary for 

employees to make informed decisions regarding their coverage options. 

Fiduciary Rulemaking 

I. Chairman Ron Johnson (R-Wl) of the Senate Homeland Security and Government 

Affairs Committee released a report detailing the Department's rejection of comments 

and suggestions provided by the Securities and Exchange Commission during the 

fiduciary rulemaking process. According to the report, the Department ignored the 

suggestion of the Securities and Exchange Commission to examine the costs and benefits 

of alternative approaches to its fiduciary regulation. Senator Johnson has asked the Office 

of Management and Budget for more information about this failure. Why did the 

Department decide not to analyze alternatives to its preferred regulatory approach? 

Response: The Department consulted with staff of the SEC throughout the process of 

developing the proposed and final conflict of interest rule and related prohibited 

transaction exemptions. As part of this consultative process, SEC staff provided 

technical assistance and information to the Department regarding the SEC's separate 

regulatory provisions and responsibilities, retail investors, and the marketplace for 

investment advice. Although the Department and the SEC have different statutory 

responsibilities, the Department consulted with the SEC on regulatory issues in which our 

interests and responsibilities overlap, particularly where action by one agency may affect 

the parties regulated by the other agency. Contrary to the assertions made in Sen. 

Johnson's February Committee report, the engagement between the Department and the 

SEC was comprehensive and their input was carefully considered. The technical 

assistance and input that the SEC staff provided were instrumental to the Department's 

efforts to ensure that the final rule struck a balance between adding important additional 

consumer protections for tax-favored retirement savings accounts while minimizing 

undue disruptions to the many valuable services the financial services industry provides 

today. 

Further, the Department did not ignore the need to examine the costs and benefits of 

alternative approaches in its regulatory impact analysis (RIA) to the final conflict of 

interest rule and related exemptions. As required by Executive Order 12866, the 

Department considered the costs and benefits of 15 different alternatives to the regulation 

and exemptions and provided a thorough discussion of these alternatives in Chapter 7 of 

the RIA (available at: https://www.dol.gov/ebsa!pdf/conflict-of-interest-ria.pd!). 

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2. The administration has repeatedly referenced "hidden fees" as one of the problems with 

the current system and one of the reasons that the new rule is needed. Which fees 

specifically are "hidden" from disclosure under current securities law and the Employee 

Retirement Income Security Act? 

Response: The term "hidden fees" refers to indirect payments to an adviser from any 

source other than the advice recipient, such as revenue sharing fees, which are paid to the 

adviser from a mutual fund. These fees are generally not transparent to the advice 

recipient; therefore participants, beneficiaries, and IRA owners often are not aware they 

are paying such fees. The Department cites research in Chapter 3 of the RIA 

(https://www.dol.gov/ebsa/pdf/conflict-of-interest-ria.pdf) showing how these hidden 

payments incentivize advisers to act in their own interest rather than their clients' best 

interests. 

Overtime Rulemaking 

I. The Department's analyses of its overtime rule have been criticized by economists and 

the Small Business Administration as being incomplete and lacking transparency. The 

Department did not adequately consider the impact of the rule on important 

constituencies that will be dramatically impacted by the changes such as nonprofits 

organizations, institutions of higher education, and public sector employers. Furthermore, 

the Department's decision to adopt automatic increases will eliminate future 

opportunities for concerned stakeholders to provide input. 

How can the Department justifY finalizing a rule that did not involve proper consultation 

with all stakeholders, lacks accurate and transparent impact data, ignores regional 

differences in costs of living, and eliminates future opportunities for notice and 

comment? 

Response: As you may know, on November 22, 2016, a federal district court judge in 

Texas issued a preliminary injunction that enjoins the Department from implementing 

and enforcing the overtime final rule. The Department remains of the view that the rule 

is legally sound and, with the Department of Justice, is reviewing the court's opinion and 

order and considering any next steps. 

Between the issuance ofthe March 13,2014, Presidential Memorandum and the issuance 

of the NPRM, the Department conducted extensive outreach, meeting with over 200 

organizations around the country. A wide variety of stakeholders attended the listening 

sessions, including employers, business associations, non-profit organizations, 

educational institutions, employees, employee advocates, state and local government 

representatives, and small businesses. The Department received comments from more 

than 270,000 individuals and organizations on the NPRM during the sixty-day comment 

period. In addition, there were 63 meetings held as part ofOJRA's stakeholder meetings 

under EO 12866; participants in these meetings can be found at reginfo.gov. Further, as 

part of the rulemaking process, the Department conducted an extensive, thorough study 

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of the overtime rule's economic impact, which can be found in the Federal Register pages 

32448-32459 (a summary of the economic impact analysis can be found here). 

The Department set the salary level at the point necessary to fulfill the statutory purpose 

of identifYing those workers who may qualify as bona fide executive, administrative, or 

professional employees. In order to qualify for the "white collar" exemptions, in addition 

to being paid on a salary basis at not less than the salary level set forth in the regulations, 

employees must perform bona fide executive, administrative, or professional duties ("the 

duties test"). The salary level and the duties test work together to define who is exempt 

from the FLSA's minimum wage and overtime requirements. Given the goal of revising 

the regulations so they effectively distinguish between overtime-eligible white collar 

employees who Congress intended to be protected by the FLSA's minimum wage and 

overtime provisions and bona fide executive, administrative, and professional employees 

whom Congress intended to exempt, setting a lower salary level would have required the 

Department to revert to a more rigorous duties test, a step overwhelmingly opposed by 

commenters representing employers. 

Since the very first regulations implementing the Fair Labor Standards Act in 1938, there 

has been a national salary level, rather than multiple salary levels for different regions, 

industries, or employer sizes. Based on comments received, DOL carefully considered 

low-wage regions and made a significant change from the proposed rule: Initially, we 

proposed a level based on nationwide salaries, but the final rule is based on salaries in the 

lowest-wage Census region (currently the South). The new salary level is appropriate for 

employers across a broad range of regions, industries, and business sizes. 

Finally, the Final Rule does not eliminate future opportunities for notice and comment on 

the salary level. The Department's automatic updating mechanism exactly maintains the 

standard the new rule establishes by resetting the salary threshold to keep it at the 40th 

percentile of earnings of full-time salaried workers in the lowest-wage Census region. 

Thus, automatic updating preserves the status quo while leaving open the opportunity for 

policymakers to change the method for determining the salary threshold in a future notice 

and comment rulemaking if they ever believe sueh a change to be necessary. 

2. Congress created exemptions from overtime requirements for certain employees. 

However, under the Department's overtime rule, employees who were never intended to 

be covered will now be overtime-eligible. 

How can a nonprofit serving adults and children with developmental disabilities in a rural 

community continue to provide vital services when faced with significant increases in 

administrative costs? 

What happens when no one at a nonprofit serving at-risk youth, including the executive 

director, is able to respond to emergency situations because their workplace smart phones 

have been taken and there is no budget for overtime pay? 

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Response: We recognize and value the enormous contributions that non-profit 

organizations make to the country. Non-profit organizations provide services and 

programs that benefit many vulnerable individuals in a variety of ways. 

When Congress passed the Fair Labor Standards Act, it did not provide an exemption 

from overtime requirements for non-profit organizations. The principles of the law are 

nearly universal and establish the most fundamental protections in the labor market. As 

such, the employees of non-profits are entitled to the same protections as for-profit 

employees. Many non-profits perform the same services as for-profits, and their 

employees can be indistinguishable. For example, an assistant manager at a cafeteria in a 

hospital or museum is performing the same responsibilities-and is owed the same basic 

protections-as one working at a casual dining restaurant. 

The Department of Labor estimates that non-profits will not be unduly impacted by the 

final rule. Only 5 percent of all workers in the non-profit sector will be affected by this 

rule. 

In the final rule, the Department of Labor modified the proposed salary level to account 

for the fact that salaries are lower in some regions than others. This lower final salary 

level will provide relief for non-profit employers, just as it does for employers in lowwage industries. As with other employers, non-profits have a variety of options in 

dealing with the salary level increase, including options that result in no additional cost to 

the nonprofit employer. In addition, unlike other employers, non-profit organizations 

may use volunteer services if certain conditions are met. 

Many non-profit organizations are very supportive of the new rule. They strive to use 

management strategies that reflect the principles they espouse, while adjusting to the new 

requirements. In addition to their mission focus, they recognize their responsibilities to 

their own employees, many of whom are low-income and vulnerable. 

The Department is committed to thoughtful, responsible implementation, and continues 

to engage with non-profit organizations and associations to provide technical assistance 

on both the rule and the Fair Labor Standards Act. 

Companionship Exemption 

I. Now that the final companionship exemption regulations are in effect, how does the 

Department anticipate caregivers will be able to maintain their income levels, especially 

those who once worked more than 60 hours a week, by choice, but now have seen their 

hours capped at 40 hours per week? 

Response: Home care workers help countless Americans live at home, go to work, and 

participate more fully in their communities. They provide valuable services, and they 

deserve fair wages. Due to out-of-date regulations, however, for too long these workers 

were excluded from the Fair Labor Standards Act's minimum wage and overtime 

protections, and from the FLSA's basic promise of a fair day's pay for a fair day's work. 

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Before this Final Rule was published, an estimated 40 percent of home care workers rely 

on public assistance to make ends meet. The Home Care Final Rule gives these nearly 

two million workers the same basic protections already provided to most U.S. workers, 

including those who perform the same jobs in nursing homes. 

In implementing the Final Rule, our ultimate goal is to ensure that consumers continue to 

receive high-quality care and that the wages home care workers receive reflect the 

importance and dignity of that work. We can and should balance the rights of people 

with disabilities to stay in their communities with the rights of their caregivers. 

Employers of home care workers have a number of options for complying with the Fair 

Labor Standards Act. In the years since the Rule was published, the Department has led 

an exhaustive outreach campaign to engage the regulated community, and we have 

consistently emphasized, and provided technical assistance on, the importance of 

implementing the Home Care Final Rule in a manner that protects both workers and 

consumers. 

2. How is DOL targeting its enforcement efforts to ensure compliance with the new 

companionship exemption regulations? Is the agency targeting government agencies, 

private sector agencies, registries, families or all of them? 

Response: Given the scope of the agency's responsibilities, the Wage and Hour Division 

is committed to a strategic approach to enforcement of all the laws we enforce, including 

the new protections for most home care workers. We prioritize enforcement efforts 

where the problems are greatest and where we can have the greatest impact on 

compliance. Generally, we have shifted our approach from one that focused on single 

establishments and resolving complaints to one that proactively seeks to improve 

compliance across industries, employers, and establishments for the greatest numbers of 

workers. Our enforcement of the Home Care Final Rule is consistent with this approach. 

OSHA Recordkeeping 

I. Your testimony discussed the Occupational Safety and Health Administration's (OSHA) 

new Rapid Response Investigations (RRl) that are triggered by reporting requirements 

OSHA instituted in January 2015. Employers are required to report an injury within 24 

hours and a fatality within eight hours. The Department's budget asked for over $6 

million in enforcement funding to support this effort. Can you provide the number of 

accidents prevented through this initiative? 

Response: Estimating the number of accidents prevented by RRI, would require 

nationwide controlled experiment, which OSHA doesn't have the mandate or funding to 

conduct. One of the central purposes of RRis, however, is to prevent future injuries. This 

is done by encouraging employers to conduct their own incident investigations and 

develop remedies to workplace hazards. OSHA provides guidance materials and 

consultation, but does not conduct a formal investigation in most cases. OSHA believes 

that this cooperative approach fosters greater commitment by employers to prevent the 

kinds of severe injuries to which the new reporting requirements are addressed. In the 

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first full year of the reporting program, employers notified Federal OSHA of 10,388 

incidents involving severe work-related injuries, including 7,636 hospitalizations and 

2,644 amputations. OSHA responded to 62 percent of these reports through RR!s, while 

it determined that formal investigations were warranted for about a third of them. 

Through the RRI and inspection process many of the hazards that led to these severe 

injuries were identified and abated. Removal of known hazards is the keystone to 

preventing similar injuries from recurring. We are confident that the interventions 

triggered by these reports have improved overall workplace safety. As indicated in 

OSHA's report, Year One of OSHA's Severe Injury Reporting Program- An Evaluation, 

most of the hazards that led to these severe injuries are well-understood and easily 

prevented. They also account for a majority of work-related fatal injuries. And we know 

that, in most cases, employers can abate them in straightforward, cost-effective ways, 

such as by providing fall protection equipment, installing guarding over dangerous 

machinery, or clearly marking pathways. 

Working with OSHA, many employers have found ways to eliminate hazards and protect 

other workers from the same injuries. Nothing illustrates this more powerfully than 

actual cases, workers injured in incidents that OSHA learned about because of the new 

reporting program: 

In Chicago, a conveyor loaded with liquid chocolate suddenly started up as a worker was 

cleaning a roller. Her arm was pulled in and mangled so badly that its repair required a 

plate and skin grafting. To prevent future injuries, the employer installed metal guards to 

shield workers' arms and hands from moving machinery as well as warning alarms and 

flashing lights that are activated 20 seconds before the conveyor moves. In Idaho, a 

valve cover snapped shut on the hand of a truck driver who was loading creamer into a 

tanker, severing his fingertip. Drivers had long known the valve was problematic. After 

the amputation, the employer devised a new hands-free tool for closing the valve, and 

alerted the manufacturer and other employers likely to use the same equipment. 

At a wastewater treatment facility in Illinois, a worker was overcome with heat 

exhaustion and hospitalized. The employer immediately instituted more frequent 

employee breaks with water provided and within weeks had installed cooling fans and 

submitted plans for a new ventilation system to control worker exposure to excessive 

heat. 

When a mechanized blender at a meat processing plant in Missouri suddenly started up, it 

caused the amputation of both lower arms of a sanitation worker who was cleaning the 

machine. The employer immediately re-engineered the blender's computer control 

system and changed safety interlocks, and enhanced worker training and supervision, 

significantly reducing the risk of amputation. Thankfully, the worker's arms were later 

surgically reattached and he is undergoing rehabilitation. 

2. In your testimony, you highlighted the RRI process OSHA inspectors may undertake 

after an injury or fatality is reported. Explain how stakeholders were able to comment on 

this RRI during the reeordkeeping comment period. 

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Response: On June 22,2011 OSHA published a Notice ofProposcd Rulemaking 

(NPRM) to modify its current fatality and catastrophe reporting requirements (76 FR 

36414-36438). The NPRM described the specific types of injuries that should be 

reported and how they should be reported, but did not discuss how the Agency would 

respond to the information received. OSHA received multiple comments expressing 

concern that the Agency did not have enough resources to be able to use the additional 

data from the new reporting requirements. In the final rule OSHA acknowledged it did 

not have the resources to inspect all reported injuries, and indicated it would use other 

investigative tools to complements its inspection capabilities (79 FR 56153-56154). 

OSHA developed the RRI process outlined above to fulfill that commitment. The RRI is 

an internal OSHA resource-allocation and enforcement priority policy, so notice and 

comment was not necessary before OSHA adopted it. 

Mine Safety 

l. The Mine Safety and Health Administration's (MSHA) budget allocates a 5 percent 

funding increase for coal enforcement and 3 percent funding increase for metal/non-metal 

enforcement. As your testimony indicates, metal/non-metal mines experienced a 

significantly higher fatality rate last year. Why does MSHA continue to emphasize coal 

enforcement when the number of operating coal mines decreased by 26 percent last year? 

Response: MSHA emphasizes both coal and metal/non-metal enforcement. MSHA also 

recognizes that coal mining has steadily declined, and MSHA has taken several steps to 

realign its coal enforcement resources to reflect declining market conditions. MSHA 

merged Coal District I in central Pennsylvania into District 2 in western Pennsylvania in 

2014. On October I, 2016, MSHA closed the District 6 office, which had jurisdiction 

over mines in eastern Kentucky, transferring those responsibilities to Districts 5 and 7. 

That said, MSHA also needs to retain sufficient enforcement staff to respond to changes 

in the mining industry, particularly since it takes 18 months to two years to train new 

inspectors. 

MSHA is also redirecting coal resources to other programs (Educational Policy and 

Development, Technical Support, Program Evaluation and Information Resources, and 

Administration and Management) where additional resources are needed. In addition, 

during FY 2015 and FY 2016, Coal Mine Safety and Health (CMSH) enforcement 

personnel supported Metal and Nonmetal Mine Safety and Health (MNMSH) to achieve 

its statutory mandated inspections and provide assistance with the highly successful 

initiatives to reverse the increase in mining deaths from 38 in FY 2015 to an historic low 

of 24 deaths in FY 2016. CMSH supported the rollout of safety initiatives in metal and 

nonmetal mines such as MSHA's "Rules to Live By" that highlights the mining 

conditions most likely to claim a miner's life and "walk and talks" to raise awareness 

about the root cause of fatalities and the best practices to prevent them. MSHA has also 

directed CMSH enforcement personnel to provide additional compliance assistance to 

coal mine operators using "walk and talks" to raise safety awareness. With the passage 

of the Fixing America's Surface Transportation Act (known as the FAST Act) on 

December 3, 2015, aggregate industry officials have advised MSHA that they anticipate 

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an increase in production and industry employment in MNM mines starting in 2016 that 

will increase as transportation projects are funded. MNMSH resources will be needed to 

provide compliance assistance to mine operators and complete mandated inspections. 

Blacklisting 

1. The Fair Pay and Safe Workplaces, or "blacklisting," Executive Order sets the dangerous 

precedent that employers are guilty until proven innocent. For example, an Equal 

Employment Opportunity Commission (EEOC) letter of determination or a complaint 

issued by a National Labor Relations Board Regional Director must be disclosed by an 

employer under the Executive Order. An employer can be denied a federal contract even 

though such a letter or complaint represents allegation of wrongdoing and not a final 

determination of wrongdoing reached after a fair, impartial adjudication process. Why 

are such non-final determinations being reported before employers have the opportunity 

to fully litigate the matters? How is this premature reporting not going to be viewed as an 

automatic strike against the employer during the bidding process? 

Response: As you may know, on October 24, 2016, a federal district court judge in 

Texas issued a preliminary injunction to prevent certain sections, provisions, and clauses 

of the rule from taking effect while the lawsuit is pending. Specifically, the Court 

preliminarily enjoined implementation of"any portion of the FAR Rule or DOL 

Guidance relating to the new reporting and disclosure requirements regarding labor law 

violations as described in Executive Order 13673 and implemented in the FAR Rule and 

DOL Guidance." The Department remains of the view that the Rule and Guidance are 

legally sound, and the Department of Justice is considering options for next steps. 

Administrative merits determinations are the products of expert government investigators 

doing extensive fact finding and exercising informed judgment that a violation of the law 

has taken place. The complaints issued by enforcement agencies that are included in the 

definition of"administrative merits determination" are not akin to complaints filed by 

private parties to initiate lawsuits in federal or state courts. Each complaint included in 

the definition represents a finding by an enforcement agency-following a full 

investigation-that a labor law was violated. 

In contrast, a complaint filed by a private party in a federal or state court represents 

allegations made by that plaintiff and not an enforcement agency; such complaints are not 

administrative merits determinations. Similarly, employee complaints made to 

enforcement agencies (such as a complaint for failure to pay overtime wages filed with 

the DOL's Wage and Hour Division or a charge of discrimination filed with the Equal 

Employment Opportunity Commission) are not administrative merits determinations. 

As noted in the DOL guidance, to the extent a civil judgment, administrative merits 

determination, or arbitral award or decision is not final, it should be given lesser weight 

by the contracting officer in making a responsibility determination. The prospective 

contractor will also have the opportunity to provide additional information as it deems 

necessary to demonstrate its responsibility, such as mitigating circumstances, remedial 

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measures, and other steps taken to achieve compliance with the relevant labor laws. The 

DOL guidance provides direction on weighing violations, including taking into account 

good faith efforts to remedy past violations, internal processes for expeditiously and 

fairly addressing reports of violations, and/or plans to proactively prevent future 

violations. 

2. The President's blacklisting Executive Order will have a substantial impact on the federal 

procurement process and dissuade certain prime contractors from using a variety of small 

business subcontractors. What is the Department's position on the loss of small business 

contractors and the overall reporting burden imposed on employers looking to compete 

for federal contracts resulting from this Executive Order? 

Response: The EO exempts contracts valued at, or less than, $500,000 and subcontracts 

for commercial-off-the-shelf products. Most small businesses fall under these 

exemptions. 

The final FAR rule was designed to phase in several of the EO's requirements in order to 

lessen the immediate impact on small businesses. Specifically: 

• For the first six months following the effective date of the FAR rule, only prime 

contractors under consideration for contracts with a total contract value equal to or 

greater than $50 million would be required to disclose decisions regarding labor law 

violations; 

• For the second six months following the effective date of the FAR rule, only prime 

contractors under consideration for contracts with a total contract value equal to or 

greater than $500,000 would be subject to the disclosure requirements- no 

subcontractors will be subject to the disclosure requirements during this timeframe; 

and, 

• Subcontractors would not be required to begin making disclosures until October 25, 

2017- one year after the FAR rule's effective date. 

Finally, consistent with existing law, if a contracting officer makes a determination of 

non-responsibility involving a small business, the offeror must be given the opportunity 

to apply to the SBA for a "certificate of competency." This would override the 

responsibility decision made by the contracting officer. 

As noted in the previous response, on October 24, 2016, a federal district court judge in 

Texas issued a preliminary injunction to prevent certain sections, provisions, and clauses 

of the rule from taking effect while the lawsuit is pending. Once it takes effect, the EO's 

requirements will help many small business contractors- the vast majority of whom do 

not violate labor laws- by leveling the playing field so they do not have to compete 

against contractors who put in lower offers by cutting corners on workers' pay and safety. 

3. The Executive Order ignores the current suspension and debarment process that already 

fairly and objectively excludes from federal contracting employers who violate employee 

rights and protections. As the 20 !5 proposed guidance is finalized, what protections are 

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in place to ensure that those businesses with a history of complying with the law are not 

caught up in an unworkable and unnecessary regulatory scheme? 

Response: Suspension and debarment procedures play an important role in the 

procurement process. They serve to exclude from the federal contracting process those 

contractors whose record is so poor that it serves the public interest to preclude them 

completely from receiving additional contracts. The processes and tools DOL and the 

FAR Council established under the Fair Pay and Safe Workplaces EO are designed to 

help in identifying and addressing labor violations before they require consideration of 

suspension and debarment. The purpose of the Order is to increase efficiency in 

contracting by encouraging compliance during contract performance, not to increase the 

use of suspension and debarment. 

In implementing the Executive Order, DOL and the FAR Council have made every effort 

to streamline the disclosure process and minimize the burden on contractors. The 

processes set forth in the final guidance and regulations build on the existing federal 

acquisition system with which contractors are familiar. And given that most contractors 

follow the law, they will only need to attest that they are meeting their responsibilities. 

Moreover, contracting officers will focus on the most egregious violations; for those 

contractors with such egregious violations, DOL and the enforcement agencies will work 

with them to try to address any issues that can be remedied to bring them into 

compliance. And the final regulations will be phased in, so contractors have more time to 

fully understand their responsibilities. 

Federal Employees' Compensation Act 

I. The Federal Employees' Compensation Act (FECA) program's "chargeback system" is 

structured in a way that assumes both the Department and the employing agencies are 

doing their part in ensuring workers' compensation payments are free of fraud and abuse. 

This structure provides the Department authority over an agency's annual charge back 

bill. 

To this end, the U.S. Postal Service Inspector General (USPS !G) has sent to the 

Department numerous cases suspected of being fraudulent, but the Department has failed 

to take action. In fact, several of the Department's Office of Workers' Compensation 

Programs district offices- including Washington, D.C., Denver, Seattle, and 

Jacksonville- have reportedly been difficult to work with according to the USPS IG. 

The USPS is bringing cases potentially involving fraud to the Department's attention and 

yet no action has been taken. Please explain the Department's reasoning for not taking 

action on these cases. 

Response: The Office of Workers' Compensation Programs (OWCP) is supportive of all 

efforts to combat fraud and abuse in the federal workers' compensation program. OWCP 

has well-established procedures in place with the Department of Labor Office of 

Inspector General (DOL OIG) for the referral of potential fraud cases to the DOL OIG as 

well as to an agency IG, such as the USPS IG, and for the support of those investigations 

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undertaken by the I G. OWCP has designated liaisons in each District Office to work 

directly with the IG and the OWCP Division of Federal Employees' Compensation 

(DFEC) has a fraud coordinator for alllG liaisons who is located in the Jacksonville 

District Office. The fraud coordinator communicates with the DOL OIG and USPS IG 

on a constant basis, as does staff here in Washington, DC. Moreover, OWCP meets with 

the USPS IG three to four times a year (generally in conjunction with DOL OIG) to 

discuss any outstanding issues or concerns they may have. USPS IG has not raised this 

issue of non-cooperation as an agenda item. Nevertheless, ifUSPS IG experiences a 

situation where a particular office has been difficult to work with or has not taken action, 

we would invite them to contact OWCP leadership or to share specifics with OWCP as 

an agenda item during our regular meetings so that we can look into the case and follow 

up with the District Office in question. 

The coordination with the IG is for both medical provider and claimant fraud. In medical 

provider cases, OWCP continues to work with the IG during their investigation, 

providing data and program expertise when requested and may provide an OWCP 

witness at trial in the event of an indictment that leads to trial. However, should an 

employing agency IG (such as the USPS !G) refer a case to OWCP due to potential fraud, 

it would typically also be brought to the attention of the DOL OIG (the DOL OIG has 

joint investigations underway with USPS IG that involve suspected fraud). In cases of 

potential fraud or abuse involving FECA claimants (such as unreported employment or 

when a claimant's physical activities exceed their stated medical restrictions) we support 

criminal prosecution. When prosecution is declined, as sometimes occurs, we have 

developed administrative procedures to address such cases by undertaking further 

medical development. In a case where a claimant has knowingly failed to report 

employment earnings, the FECA statute provides that a claimant forfeits the right to 

compensation for the period covered by the report. And finally, a FECA claimant who is 

criminally convicted of FECA fraud in state or federal court forfeits all benefits that the 

individual would otherwise be entitled to. 

It should also be noted that over 50 percent of OWCP' s bill processing development 

resources are utilized to respond to requests made by the USPS IG in support of their 

investigations. OWCP continues to explore procedures to allow for additional review of 

improprieties by medical providers and greater coordination with DOL OIG. 

Equal Employment Data Collection 

1. Your testimony notes that the EEOC has proposed collecting pay data from employers. 

EEOC and the Department's Office of Federal Contract Compliance Programs would use 

this data to try to combat pay discrimination. However, serious questions have been 

raised about the utility of the data in combating discrimination. The job categories are 

very broad, and the data will not take into account experience, education, or skill level. 

Moreover, the pay data mandate will significantly increase compliance costs for 

employers in order to report information of questionable use. In addition, EEOC's 

proposal does not provide much in the way of assurances that the reported data will 

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remain confidential. Given these concerns, will you recommend that EEOC reconsider 

moving forward with its flawed pay data proposal? 

Response: On September 29, EEOC announced that starting in March 2018, it will 

collect summary pay data from employers, including federal contractors and 

subcontractors, with l 00 or more employees, through the Employer Information Report 

(EE0-1), a longstanding joint information collection ofEEOC and the Office of Federal 

Contract Compliance Programs (OFCCP). 

The summary data collected from these employers will assist both agencies in identifying 

possible pay discrimination and will assist employers in promoting equal pay in their 

workplaces. 

• The existence of a disparity in the submitted summary data, alone, would not 

constitute a violation of civil rights laws. 

• The summary pay data collected using the modified EE0-1 would be one of 

several sources of information the agencies would consider when determining 

whether a pay disparity warrants a closer examination. 

• Experience, education, and skill level are among the factors that the agencies 

would consider if a compliance evaluation or an investigation were to be initiated 

after analyzing the summary pay data. 

EEOC has been thoughtful in its proposal and in responding to the comments it received. 

• Cost/Burden: Among the changes proposed in response to comments is the 

alignment ofthe EE0-1 with federal obligations to calculate and report W-2 

earnings as of December 31st to reduce the burden on employers for gathering the 

pay data. The EEOC also increased its burden estimates in light of time and pay 

rates for the wide range of employees involved in preparing and filing the EE0-1. 

• Confidentiality: Title VII has strict confidentiality standards, and their violation 

subjects EEOC officers and staff to criminal sanctions. After the 90-day right to 

sue period, the EEOC does not release the employer's EE0-1 report unless the 

charging party provides a FOIA request for the EE0-1 along with a filed, courtstamped legal complaint under Title VII showing that he or she is a party to that 

particular lawsuit. See 42 U.S.C. 2000e-7(e). The EEOC also takes extensive 

measures to protect the integrity of the EE0-1 data and consistently reviews and 

updates its security protocols. The EEOC only publishes large-scale aggregated 

EE0-1 data in a manner that fully protects employer confidentiality and employee 

privacy. 

OFCCP also provides contractors with a number of confidentiality protections: 

o OFCCP's procedures provide that it will notify contractors of any FOIA 

request for their EE0-1 data, including summary pay and hours-worked data. 

OFCCP will not disclose the data if a contractor objects to the disclosure and 

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OFCCP determines that the contractor has a valid basis for the objection. 

OFCCP protects the confidentiality of contractor EE0-1 data, including pay 

and hours-worked data, to the maximum extent possible consistent with 

FOIA. 

o OFCCP will receive pay data only for federal contractors and subcontractors 

subject to Executive Order 1!246. 

Temporary Foreign Workers 

1. For several decades, the Department has typically processed H-2B labor certification 

applications within 30 days or less. Last year, the Department published new ruleswithout any public notice or comment- that dramatically altered the application process. 

Now, over a year later, significant portions of those regulations still have not been 

implemented, and the portions that have been implemented by the Department caused 

massive delays and backlogs that threatened to put several small companies out of 

business because they could obtain seasonal labor. Questions have been raised as to 

whether the Department's so-called "emergency processing" procedures reduced the 

delays. Has the backlog been cleared and returned to 30-day processing? How many 

additional staff were assigned to work on these cases in order to return to 30-day 

processing? What specific personnel or leadership changes were made within the 

Department to address the backlog and delays? Who in the Department was responsible 

for fixing the backlog and delays? As of today, how many certifying officers does the 

Department have approving H-28 applications? 

Response: On December 18,2015, the Fiscal Year (FY) 2016 Omnibus Appropriations 

Act (Omnibus) was enacted and significantly changed the process for determining 

prevailing wages and issuing labor certifications. The Omnibus requirements took effect 

immediately, without any transition period or additional resources for the Department, 

and the operational impacts were significant. In order to implement legally required 

changes to program requirements, the Office of Foreign Labor Certification (OFLC) 

temporarily suspended processing of H-2B applications for 17 days to facilitate 

implementation of the new requirements ofthe law. OFLC requested and received Office 

of Management and Budget authorization for emergency processing of changes to 

application forms so that they complied with the new program requirements, and the 

agency issued emergency guidance to the stakeholder community so program users were 

aware of the changes. OFLC immediately resumed processing on January 5, 2016, and 

continues to implement all new program requirements contained in the Omnibus. 

Coinciding with that 17-day processing pause, the OFLC experienced more than a 

twofold increase in new H-28 application filings during a three-week period from 

December 26, 2016 to January 15, 2016, as compared to the same period last year. Also, 

for several weeks in January 2016 technical problems with the electronic filing system, 

which have since stabilized, impacted the timely processing of pending applications. 

The Department took prompt action reducing the number of pending cases as quickly as 

possible and eliminated the H-2B backlog by May 2016. Although we increased staff 

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resources prior to our typical seasonal filing increase, the unexpectedly high volume of 

new H-2B applications in late December to mid-January far exceeded the OFLC's 

processing capacity. Therefore, we reallocated additional staff(three additional) and 

increased staff overtime hours. There are now two supervisors, I 0 Immigration Program 

Analysts, and 16 contractor staff responsible for processing/deciding H-2B applications. 

Additionally, OFLC implemented several administrative flexibilities designed to reduce 

processing times, which contributed to eliminating the H-2B backlog. Under these 

procedures, employers experiencing significant delays were able to request emergency 

processing via email, which allowed them to conduct recruitment of U.S. workers on an 

expedited basis, without filing a new application. That administrative flexibility saved 

them about 8-10 days of processing time. 

We are sensitive to the impact such processing delays have on seasonal businesses and 

continue to explore additional administrative flexibilities that can improve service 

delivery for the upcoming season. For example, in advance of the upcoming Peak 

Season, using the limited existing resources, OFLC is cross-training staff across 

processing centers to provide additional capacity to reduce processing delays. 

However, as we expect the demand for temporary worker programs to continue to 

increase, particularly in light of Congressional enactment of the returning worker 

exemption to the statutory cap on H-2B visas, the Department is eager to work with 

Congress to secure additional resources for the program, including needed additional 

processing staff, as part of a more comprehensive solution to addressing processing 

delays. Accordingly, one ofthe President's FY 2017 budget proposals would authorize 

legislation allowing the Department to establish and retain fees to cover the costs of 

operating the foreign labor certification programs, just as the Department of Homeland 

Security does for processing visa requests. These fees would help the Department 

improve the speed and quality of certification processing. The Department's inability to 

charge a fee to support more efficient application processing and program administration 

hurts businesses, workers, and America's economy. A market-based structure would 

connect the supply of the resources available for application processing directly with 

employer demand for those services, and ensure our programs can respond effectively to 

changes in application volumes. 

2. The Department requires as part of the H-2B application process that the employer first 

obtain from the Department a prevailing wage applicable to the job. Until this year, this 

process routinely took two weeks. According to stakeholders, this process routinely took 

60 or 70 days this spring, which then further delayed the application process. However, 

the prevailing wage data for all of these jobs is publicly available at the Foreign Labor 

Certification Data Center website, which is developed and maintained under a contract 

with the Department's Office of Foreign Labor Certification. Before they even file their 

request for a wage with the Department, employers can look up the wage themselves on 

this website in less than five minutes. Yet, the Department's April 2015 rules dictate that 

an employer cannot start any other part of the H-2B application process until the 

Department provides the wage. Has the Department returned to processing these wage 

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requests within a two-week timeframe? Who in the Department was specifically 

responsible for fixing these delays in the prevailing wage determination process? How 

many people in the Department are responsible for the final sign-off and approval of a 

prevailing wage determination? 

Response: The Department diligently monitors the processing times for prevailing wage 

determinations (PWDs) so that all requests are processed as expeditiously as possible, 

while also seeking to balance processing times for non-H-28 requests. As of August 

2016, the average processing time for a prevailing wage request is 29 days. Actual time 

for each application varies depending on the specifics of the wage request, especially if a 

survey is the basis of that request. Determination times also may fluctuate because of the 

unpredictability in volume of the number of applications each season. 

In April2015, the Department included a statement in the preamble to the H-28 

regulations encouraging employers to file the ETA Form 9141 Application for Prevailing 

Wage Determination about 60 calendar days before the date that PWD is needed, to 

account for the new regulatory timetable for submitting the H-2B application. The 

National Prevailing Wage Center (NPWC) conducted extensive outreach to educate 

stakeholders, program users, and other interested members of the public on the regulatory 

changes to the H-28 program. We continue to encourage requestors to submit their ETA 

Forms 9141 at least 60 days in advance of the date on which the employer wants to file 

an H-2B application with the OFLC Chicago National Processing Center. 

Currently, there are 17 contractor staff involved in the evaluation of prevailing wage 

requests and 15 Federal analysts responsible for issuing final determinations for 

prevailing wage requests across four visa categories: PERM, H-!B, H-28 and most 

recently, for H-2A wage survey requests. Additionally, there are three Federal team leads 

and three Federal supervisors responsible for providing input and assistance to the 15 

Federal analysts in issuing prevailing wage determinations. 

3. For employers filing H-28 applications with the same job category, sea~on after season, 

year after year, would the Department consider amending its procedures to allow 

employers to simply look up the prevailing wage from the Foreign Labor Certification 

Data Center website, print a copy of the webpage for their records, and then move on to 

the next part of the application process? 

Response: We will consider any proposal that would assist OFLC in timely processing 

applications for all of its programs. However, this proposal as currently described does 

not permit OFLC to compare the employer's job description to confirm that a new 

request for a prevailing wage determination contains the same job description as did the 

prior prevailing wage determination, which is necessary to be certain that an employer 

should receive the same prevailing wage determination as it had in the past. Furthermore, 

even if the employer were to find the correct prevailing wage, this information would 

need to be verified by OFLC staff. 

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4. As the Department acknowledged, the timely processing this spring of employer requests 

for labor certifications under the H-28 program did not happen. Due to this troubling 

administrative failure, close to 80 percent of employers trying to avail themselves of a 

seasonal, legal workforce did not obtain needed workers by the date of need. In April 

2015, the Department adopted regulations that compressed its ability to process H-28 

certification requests within 30 days, while also requiring a certifying officer to 

independently verify the information in each request rather than relying on an audit 

process to identify any problems. It should have been no surprise that reducing 

processing time for requests while simultaneously increasing the level of scrutiny each 

request receives would lead to significant delay in processing, regardless of an increase or 

decrease in requests received. Indeed, the impacted employers warned the Department of 

this problem in hundreds of comments submitted when the regulations were first 

proposed. 

The rationale provided for changing the time line for processing was the Department 

believed a higher percentage of U.S. workers in the lower-skilled categories would be 

more likely to apply for a job advertised three months ahead of time versus a job 

advertised four months ahead. Please provide the number of U.S. workers who responded 

to advertisements in the 12-month period prior to the April2015 regulations and the 

number of U.S. workers who have responded to advertisements since the adoption of the 

new regulations. 

How many employers have been found to be violating the wages and recruitment 

requirements by certifying officers in the actual certification process since the adoption of 

the April 2015 regulations? In comparison, how many employers have been found by an 

audit process to be in violation of the wages and recruitment requirements in the year 

prior to the adoption of the April2015 regulations? 

Response: For the 12-month period prior to the April29, 2015, Interim Final Rule (IFR), 

28,620 U.S. workers responded to advertisements for !33,001 positions. For the 12-

month period after April29, 2015, the Department is not able to provide comprehensive 

aggregate data on U.S. workers who responded to advertisements. Because the 2015 H28 IFR requires employers to continue to consider for hire U.S. applicants after a 

certification is issued until 21 days before the start date of work, the initial recruitment 

report submitted by employers to the Department does not capture the total U.S. workers 

who responded to advertising the job opportunity. Employers are required to retain 

information about these additional U.S. workers who responded to the advertisements in 

their compliance file, but under the FY 16 Consolidated Appropriations Act, the 

Department is prohibited from expending funds to conduct audit examinations which 

would have permitted evaluation of employers' recruitment efforts. 

It is an uncommon occurrence for OFLC to deny a labor certification because the 

employer has failed to properly recruit for U.S. workers or failed to state the proper wage 

during recruitment. Unlike the 2008 Final Rule, the current lFR now requires employers 

to begin recruitment for U.S. workers only after the wage and working conditions offered 

in the employer's recruitment for the job opportunity have been reviewed and determined 

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to be compliant with regulatory requirements. For the year prior to the adoption of the 

2015 IFR, the Department completed 549 audit examinations ofH-28 temporary labor 

certifications. We found that more than 68 percent of employers were not compliant with 

one or more requirements of the 2008 Final Rule and another seven percent were placed 

into supervised recruitment due to violations of program requirements. 

5. Since the beginning of the year, there have been significant delays in processing of 

petitions under both the H-28 and H-2A programs. At one point after January I, 2016, 

only one out of more than 50 H-2A petitions had been processed in the statutory 

time lines the Department must follow. What caused the delays in H-2A processing? 

What did the Department do to resolve these delays? What needs to be done to ensure H2A employers do not face such delays in the future? 

Response: The overall volume ofH-2A applications increased from last year. As of June 

25, 2016, employer use ofthe program during FY 2016 increased by more than 15 

percent compared to the same time period in FY 2015. The Department has not received 

any corresponding increase in resources to cope with the additional volume; plus, the 

modest fees collected along with H-2A applications are remitted to the Treasury and are 

not retained by the Department to improve processing. 

Because the same OFLC processing centers are responsible for processing H-28 and H2A labor certifications and H-28 prevailing wages, timely processing was impacted by 

the enactment of the FY 2016 Consolidated Appropriations Act (Omnibus). The percent 

of complete H-2A applications processed on time dropped to 85 percent for the month of 

February 2016; however, OFLC dedicated resources to recover quickly and was back to 

processing 92 percent of complete applications on time by the end of April 2016. 

Importantly, one of the most common reasons for delays in processing H-2A applications 

is that employer--or in many cases the employer's retained agent or labor recruiterdoes not submit a complete application that includes key documentation for the 

Department to make its determination and issue a timely labor certification. For FY 

2016,41 percent of all H-2A applications issued final determinations were initially 

submitted to the Chicago National Processing Center without required documentation, 

including, for instance, proof of required workers' compensation coverage for the entire 

period of need, documentation establishing the sufficiency and availability of housing for 

workers, the recruitment report, or other required licenses or information pertaining to the 

use of farm labor contractors. Timely processing is impaired by employer delays in the 

submission of the missing documents. 

The Department has taken a number of steps to assist users in filing timely and complete 

applications. We routinely conduct stakeholder outreach and provide technical assistance 

in an effort to reduce application errors. We established an electronic filing system to 

facilitate the processing of applications, and are pleased that nearly 80 percent ofH-2A 

employers chose to file their applications electronically during FY 2016. The use of the 

electronic filing system has allowed OFLC to communicate more efficiently with 

employers using e-mail when there are concerns or deficiencies. In addition, on May 18, 

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2016, we announced on the OFLC Website (www.foreignlaborccrt.doleta.gov) a 

procedural change eliminating the "wet signature" requirement on certified H-2A 

applications, which we anticipate will save employers time and money filing their visa 

petitions with the USCIS. This change saves employers and their agents or attorneys 

from mailing each other paper forms to sign them a second time- which was effectively 

required under the prior form. 

Lastly, several years ago and within its statutory authority, the Department implemented 

a flexible process to provide employers who filed incomplete applications with additional 

time to submit documents necessary to meet program requirements, so that they would 

receive certification, rather than a denial. This process improvement was initiated in 

response to concerns raised by the agricultural community about the Department's denial 

determinations at the 30-day statutory deadline without giving employers additional time 

to submit required documentation or, where applicable, to permit the State Workforce 

Agency (SW A) to complete the required housing inspection. While this flexibility 

benefits applicants, each time the Department allows that additional time to applicants to 

supply the necessary information beyond the 30 days, it does increase the processing 

time. 

Because we expect the demand for temporary worker programs to continue to increase, 

the Department is eager to work with Congress on a comprehensive solution to address 

processing delays. Therefore, we strongly encourage you and your colleagues to work 

with the Administration and support the President's FY 2017 Budget Request for a feebased funding structure similar to that used by DHS for foreign labor visa programs. 

State Workers' Compensation Opt-Out Laws 

1. States across the country have been exploring workers' compensation "opt-out" laws that 

give employers the flexibility to create their own private plans to compensate workers for 

injuries sustained on the job, in lieu of state workers' compensation laws. You recently 

announced the Department will undertake a report about opt-out alternatives to stateregulated workers' compensation and cutbacks in state workers' compensation benefits. 

Please provide details about this report and the increased attention the Department is 

giving to these opt-out laws. To date, what action has the Department taken in regard to 

monitoring such laws? 

Response: The Department of Labor commissioned a report on the history of and recent 

trends in state workers' compensation systems in the United States. The report, released 

on October 5'h, provides a history of state workers' compensation laws, including the past 

role of the federal government, and then considers trends in the last 25 years, particularly 

the increasing inadequacy of benefits, restrictions on medical care for injured workers, 

new procedural processes and hurdles for claimants, and the effect these trends have had 

on Social Security Disability Insurance. In addition, the Department of Labor's 

Employee Benefits Security Administration is currently investigating opt-out alternative 

plans and their compliance with the Employee Retirement Income Security Act of 1974 

(ERISA). 

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Rep. Wilson (SC) 

Energy Employees Occupational Illness Compensation Program 

I. South Carolina's Second Congressional District is home to a large number of former 

energy employees from the Savannah River site located in Aiken, South Carolina. We 

have all seen reports highlighting the problems with the Energy Employees Occupational 

Illness Compensation Program. According to the Department's Office of the 

Ombudsman's 2014 Annual Report to Congress, only 60 percent of the total cases are 

from unique individuals, indicating that a large number of people are submitting multiple 

claims. I have heard reports from constituents that some people have approved claims 

from one illness, but they have to go through the same difficult process ifthey develop 

complications due to their treatment or another covered disease. It seems that this 

program burdens applicants with excessive paperwork and a complicated claims process. 

Do you believe that the Energy Employees Occupational Illness Compensation Program 

functions as it was intended and is able to meet the needs of those who rely on the 

program for medical care? 

Response: It is important to understand the distinction between a "case" and a "unique 

individual worker" in this context. The case count represents employees (living or 

deceased) whose employment and illness are the basis for the claim. These numbers 

include combined Part B & E applications. The Energy Employees Occupational Illness 

Compensation Program Act permits claimants to receive benefits under both Part B and 

Part E, up to a $400,000 combined cap. Since we report on the number of Part B cases 

and the number of PartE cases separately, the case count for combined B and E cases 

may have both Part B and E parts and thus are double counted. Cases do not represent 

new claims submitted on a case (like a claim for a new condition). 

Once a case is accepted, the Program does require that the claimant file a new claim if 

they develop a new condition. The reason for this is that under PartE, a condition for 

which an employee received a tort settlement or state workers' compensation may be 

subject to an offset or coordination. For that reason, there must be legal documentation 

that they have filed for a particular condition. However, the process for filing a claim for 

a condition that arose as a consequence of an accepted condition is simpler than filing an 

initial claim. Since employment (and/or survivorship) issues have already been 

adjudicated, the only issue to be determined is whether the new condition is related to an 

accepted condition. When there is supportive medical documentation, the District Office 

is able to issue a Letter Decision accepting the claim without the need to issue a 

Recommended and Final Decision, which is required for initial claims. 

On March 10, 2016, the Government Accountability Office issued a report to Congress 

regarding its study of the administration of the EEOICPA. They found that among their 

sample, approximately 90 percent of adjudicated claims were consistent with procedures 

and that in the remaining I 0 percent, while there were some inconsistencies, those 

inconsistencies would likely not have affected adjudication outcomes. In addition, from 

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inception to date, the Program has paid $9.8 billion in monetary compensation and $3 

billion in medical benefits. The Program regularly conducts outreach nationwide, 

partnering with the Department of Energy and the Department of Health & Human 

Services, to inform the public about the EEOICPA, intake new claims, and answer 

questions from current claimants. However, we are committed to making sure that the 

claims adjudication process operates effectively, and efficiently, and are always looking 

for ways to improve our administration of the EEOICPA program. 

Apprenticeship Programs 

l. Every year it seems the Department requests more money for the creation of a national 

apprenticeship program. I am grateful that South Carolina has been successful in creating 

world class apprenticeships through programs like Apprenticeship Carolina, Savannah 

River Site, and MTU America. While South Carolina has had this success, there remains 

nominal autonomy at the state level; states are required to use the Department's 

regulations as a baseline for their own. What you refer to as alignment, I would describe 

as coercion. 

Has the Department considered whether granting states greater autonomy in regulating 

the program could more-effectively promote participation? 

Response: The Department strongly believes that state leadership, innovation and 

flexibility are critical to expanding Registered Apprenticeship as a proven workforce 

strategy that works for businesses and jobseekers. States are an equal and important 

partner in the national Registered Apprenticeship system and we continue to look for 

opportunities and deploy resources to strengthen that partnership and provide greater 

flexibility for States to innovate. 

Our federal regulations provide a common framework and set of ground rules to provide 

consistency in the meaning and value of Registered Apprenticeship. That provides 

employers and apprentices with a consistent experience as they develop and operate 

Registered Apprenticeship programs. Today, businesses may develop apprenticeship 

training standards that work in every facility, in every state, for a wide variety of 

occupations. In 2008, the Department modernized its apprenticeship regulations to 

provide greater State flexibility, allowing states to choose a model that best addresses 

their needs to register and administer apprenticeship programs in their states (e.g., a 

federally operated, state operated or jointly operated state and Department of Labor 

(DOL) model). 

South Carolina is a prime example of productive federal-state cooperation. South 

Carolina chose not to establish its own State Apprenticeship Agency (SAA); rather, it 

chose to leverage DOL as the registration agency. This approach enabled the formation 

of an intermediary organization -Apprenticeship Carolina- to focus on direct 

engagement with the business community and work with individual employers to develop 

new apprenticeship programs, while DOL managed the formal registration process. 

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Some States chose to establish a SAA while others rely fully on DOL to oversee and 

register apprenticeship programs in the state. Regardless of the option a state selects, 

DOL strives to work cooperatively with state partners, such as Apprenticeship Carolina, 

to meet the unique circumstances of the state, its business community, and its workforce. 

Blacklisting 

I. We have continued to see the administration placing burdensome requirements on 

businesses, particularly those who contract with the federal government. The blacklisting 

Executive Order, issued in July 2014, outlines specific labor laws and Executive Orders 

that employers must comply with to be eligible for a federal contract. That Executive 

Order does not include all the administration's latest administrative mandates, like the 

paid leave requirements. 

Under the blacklisting Executive Order, should employers expect to report compliance 

with new executive-imposed requirements? Is there a limit on what employers will be 

required to report on under this Executive Order? 

Response: As you may know, on October 24,2016, a federal district court judge in 

Texas issued a preliminary injunction to prevent certain sections, provisions, and clauses 

of the rule from taking effect while the lawsuit is pending. Specifically, the Court 

preliminarily enjoined implementation of"any portion of the FAR Rule or DOL 

Guidance relating to the new reporting and disclosure requirements regarding labor law 

violations as described in Executive Order 13673 and implemented in the FAR Rule and 

DOL Guidance." The Department remains of the view that the Rule and Guidance are 

legally sound, and the Department of Justice is considering options for next steps. 

Once the Fair Pay and Safe Workplaces Executive Order takes effect, prospective 

contractors must disclose violations during the reporting period of 14 basic workplace 

protections, including those addressing wage and hour, safety and health, collective 

bargaining, family and medical leave, and civil rights protections. Specifically, the 

following federal laws and executive orders are covered: 

the Fair Labor Standards Act; 

• the Occupational Safety and Health Act; 

• the Migrant and Seasonal Agricultural Workers Protection Act; 

• the National Labor Relations Act; 

• the Davis-Bacon Act; 

• the Service Contract Act; 

• Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity); 

• Section 503 ofthe Rehabilitation Act of 1973; 

• the Vietnam Era Veterans' Readjustment Assistance Act; 

• the Family and Medical Leave Act; 

• Title VII of the Civil Rights Act of J 964; 

• the Americans with Disabilities Act of 1990; 

• the Age Discrimination in Employment Act of 1967; and 

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• Executive Order 13658 of February 12, 2014 (Establishing a Minimum Wage for 

Contractors). 

While the Order also covers equivalent state laws, with the exception of occupational 

safety and health "State Plans" that have been formally approved by OSHA, equivalent 

state laws will not be covered in the current guidance and rule; they require a second 

notice-and comment rulemaking to implement. Any statute or EO not enumerated above 

is not covered by the EO. 

2. The Office of Labor Compliance Advisors (OLCA) was specifically denied funding for 

implementation of the blacklisting Executive Order in last year's Omnibus 

Appropriations bill signed into law on December 18,2015. In the bill's accompanying 

Managers' explanatory statement, it is clear no money should be used for the OLCA. As 

a result, the Department appears to have moved implementation efforts to the Wage and 

Hour Division, as evidenced in the FY 2017 congressional justification. 

How is DOL implementing the Executive Order given the loss of appropriations for the 

OLCA's operations, which would presumably be responsible for proposing, finalizing, 

and implementing all guidance? 

Response: The Administration is committed to effective implementation of the EO in 

accordance with all applicable statutes, and DOL is working with OMB and all federal 

agencies to fulfill its roles and responsibilities under the EO. 

Rep. Foxx (NC) 

Workforce Development 

I. In my time here I have worked to ensure my constituents have the opportunity to develop 

in-demand skills and "earn while they learn" through all kinds of employer-led workforce 

development. This approach to workforce development is well-suited to many jobs and 

has proven effective for both employers and employees. 

For these reasons I am disappointed by the Department's dogmatic promotion of 

registered apprenticeships at the expense of other earn-and-learn models. The number of 

Americans participating in earn-and-learn apprenticeship-style programs not registered 

with the Department exceeds the number of Americans participating in the programs 

registered with the Department. I am deeply concerned the administration's promotion of 

the registered apprenticeship program is another attempt to pick winners and reward 

favorites. Has the Department considered how these proposed subsidies could 

disadvantage businesses which are justifiably uncomfortable working with the 

Department and their employees? 

Response: The Department recognizes the value of and promotes work-based learning in 

many forms, including On-the-Job Training (OJT), work experience, internships, and 

Registered Apprenticeship; and we applaud Congress for the emphasis placed upon 

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work-based learning in the Workforce Innovation and Opportunity Act (WIOA). 

Registered Apprenticeship programs have a clear track record of exemplary performance. 

Registered Apprenticeship has proven to be the gold-standard of work-based learning, 

with average earnings of$60,000 for completers and the highest entered employment and 

retention rates of any publicly funded workforce development strategy. 1 

Registration is the critical mechanism that ensures that training programs have sufficient 

quality and rigor to meet consistent national or state standards; and those standards drive 

the high program performance outcomes. This approach is similar to accreditation for 

educational programs, and is one of the reasons many educational institutions over 250 

community colleges across the U.S.- accept completion of Registered Apprenticeship 

programs for college credit. Registered Apprenticeship programs also receive automatic 

approval as a State Eligible Training Provider (ETP) under WIOA. Registration remains 

critical as DOL provides guidance, technical assistance, funding, and additional resources 

to support Registered Apprenticeship programs. 

The Department does not intend to disadvantage any business, and is working to engage 

employers and industry in the value of Registered Apprenticeship for their talent 

development efforts. In particular, the Department has invested approximately $14.7 

million (of the $90 million Apprenticeship USA funds appropriated in FY 2016) to 

support intermediaries to help employers, particularly small- and medium-size 

employers, scale apprenticeship programs and reach new populations. 

Registered Apprenticeship is one of many work-based learning strategies that the 

Department, states, and local agencies make available to employers that want to develop 

high-quality education and training pathways. The Department's guidance makes clear 

that other work-based learning strategies such as OJT and work-experience are important 

strategies under WIOA. In WJOA, 20 percent offormula funding is available broadly for 

incumbent worker training. In competitive grants for public-private partnerships, 

hundreds of millions of dollars have been made available for training strategies such as 

aligning regional workforce development strategies; engaging employers in sector 

strategies; enhancing customer-centered design for training programs; and expanding 

access to fast-track "bootcamp" style courses for open jobs. As one example, earlier this 

year as a part of the TechHire grants, a $3.9 million grant went toward training and 

placing displaced youth and young adults in paid internships with participating employers 

from IBM to small businesses. Another $4 million grant went to prepare individuals with 

high-functioning autism spectrum disorders for success in the workplace, including onthe-job training. 

Overall, while we consider Registered Apprenticeship to be the gold standard for on-thejob training based on the data and the evidence, it is far from the only training strategy 

that we support through WIOA, our competitive grants, and our mission. 

1 Debbie Reed, et al., "An Effectiveness Assessment and Cost-Benefit Analysis of Registered Apprenticeship in 10 

States,"Mathematica Policy Research (July 2012); "Workforce System Results," U.S. Department of Labor, quarter 

ending December 31, 2015. 

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Paid Leave Rulemaking 

I. There are concerns that the paid leave rule for federal contractors is one more in a series 

of barriers to entry in the government market. In addition to this proposed rule, 

contractors have faced a number of new compliance obligations in recent years. These 

barriers, in many cases, have resulted in the government paying more for inferior 

products relative to what was available in the commercial market. As a result, contractors 

who can bring innovation and efficiency to the federal procurement market may be less 

inclined to sell to government agencies and incur the associated compliance expense and 

risk. How does the Department respond to such concerns? 

Response: In issuing the Executive Order, the President explained that providing access 

to paid sick leave will "improve efficiency and cost savings in the work performed by 

parties that contract with the Federal Government by ensuring that employees on those 

contracts can earn up to 7 days or more of paid sick leave annually, including paid leave 

allowing for family care. Providing access to paid sick leave will improve the health and 

performance of employees of Federal contractors and bring benefits packages at Federal 

contractors in line with model employers, ensuring that they remain competitive 

employers in the search for dedicated and talented employees. These savings and quality 

improvements will lead to improved economy and efficiency in Government 

procurement." In addition, the EO levels the playing field for employers who already 

provide paid sick leave for their employers and thereby may make them more inclined to 

contract with the federal government. 

The Final Rule's economic analysis identifies numerous economic and other benefits, as 

well as relatively modest costs, that can be expected as a result of the Executive 

Order. To ease compliance for contractors, we have built upon existing requirements 

wherever appropriate in order to minimize compliance costs and simplify the process. As 

noted above, we believe costs will be at least partially offset by benefits, and we do not 

expect the rulemaking to restrain bidders or stifle competition. 

2. The proposed paid leave rule for federal contractors expressly states that it is not intended 

to excuse a contractor from providing more leave than contemplated by the rule if 

required by a collective bargaining agreement. However, the proposal does not state what 

should happen when a collective bargaining agreement provides sick leave or paid time 

off differently than required under the proposed rule. Collective bargaining agreements 

are generally the product of lengthy union negotiations where both parties are 

sophisticated and represented by counsel in reaching an "arms-length" agreement. In 

some instances, the parties may have agreed to provide less sick leave in exchange for 

greater wages or other benefits. Would the Department consider allowing the terms of a 

collective bargaining agreement for the accrual of sick leave- whether for more or less 

leave than proscribed by the rule- to be acceptable in lieu of the rule's requirements? If 

not, why not? 

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Response: The Department considered all comments it received from the public 

regarding the proposed rule, some of which suggested approaches similar to those 

identit1cd in your question. After careful consideration of these comments, the 

Department included a new, temporary exclusion from the requirements of the Executive 

Order and the regulations for employees whose work is governed by certain collective 

bargaining agreements (CBAs). Specit1cally, the new provision, 29 CFR 13.4(f), 

provides that if a CBA ratified before September 30,2016 applies to an employee's work 

performed on or in connection with a covered contract and provides the employee with at 

least 56 hours (or 7 days) of paid sick time (or paid time off that may be used, among 

other purposes, for reasons related to sickness or health care) each year, the requirements 

of the Executive Order and Final Rule do not apply to the employee until the earlier of 

the date the agreement terminates or January 1, 2020. This provision balances the 

importance of ensuring that the Executive Order applies to all employees entitled to its 

benet1ts promptly against the complications that could arise where an existing CBA 

provides for paid sick time in a manner that is similar to, but not suft1cient to meet the 

requirements of, the paid sick leave provisions of the Final Rule. These complications 

are significant in circumstances involving CBAs because the agreement will limit a 

contractor's ability to unilaterally change the terms of the leave it requires to be provided. 

Similarly, the new provision provides that if a CBA ratit1ed before September 30,2016, 

applies to an employee's work performed on or in connection with a covered contract and 

provides the employee with paid sick time (or paid time off that may be used, among 

other purposes, for reasons related to sickness or health care) each year, but the amount 

provided under the CBA is less than 56 hours (or 7 days, if the CBA refers to days rather 

than hours), the contractor must provide covered employees with the difference between 

56 hours (or 7 days) and the amount provided under the existing CBA. For example, if a 

CBA ratit1ed before September 30,2016 applies to an employee's work performed on or 

in connection with a covered contract and provides the employee with 20 hours of paid 

sick time each year, the contractor, in order to avail itself of the 29 CFR 13.4(f) 

exemption, would be required under the Final Rule to allow the employee to accrue and 

use an additional 36 hours of paid sick time in that year, for a total of 56 hours. A 

contractor must provide such "top up" leave in a manner consistent with either the 

provisions of the Executive Order and Final Rule or the terms and conditions of its CBA. 

!fa CBA does not provide any paid sick time (or paid time off that could be used for an 

unlimited or broader range of reasons than paid sick time, but including reasons related to 

being sick or seeking health care), a contractor will be responsible for full compliance 

with the Order and regulations pursuant to the effective date of the Final Rule and the 

definition of a "new contract." 

3. The proposed paid leave rule requires employees to receive one hour of paid sick leave 

for every 30 hours worked "on or in connection with" a government contract. However, 

there are many instances in which it will be impossible or impracticable for contractors to 

account for the exact number of hours that an employee spends working "on or in 

connection with" a covered contract. Government contractors, particularly contractors 

providing commercial item products and services, often do not record employee time on a 

contract-by-contract basis, or their employees perform a mix of government contract and 

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non-government contract work. In such cases, what records could a company keep to 

distinguish between work done on government contracts versus commercial contracts? Is 

the only option for a company to give these employees the maximum 56 hours required 

by the rule? 

In the situation above, would the Department allow a company to apply an average of the 

amount of covered work done by the company to these employees' time in order to 

determine the amount of sick leave that must accrue? For example, if, on average, 25 

percent of a company's work is on covered contracts, could these employees accrue leave 

for 25 percent of the time worked each week? 

Response: The Department notes as an initial matter that the Final Rule does not apply 

to contracts for the manufacturing or furnishing of materials, supplies, articles, or 

equipment to the Federal Government that are subject to the Walsh-Healey Public 

Contracts Act, 41 U.S.C. 6501 et seq. 

With respect to contracts covered by the Final Rule, this question relates particularly to 

the provision that appeared in the proposed rule as 29 CFR 13.25(b); that provision 

addressed the segregation of employees' covered and non-covered work for a single 

contractor. The provision, which was included in the Final Rule as 29 CFR 13.25(b)(l), 

provides that if a contractor wishes to distinguish between an employee's covered and 

non-covered work (such as time spent performing work on or in connection with a 

covered contract versus time spent working on or in connection with a non-covered 

contract), the contractor must keep records reflecting these distinctions. It further 

provides that only if the contractor adequately segregates the time will time spent on noncovered contracts be excluded from hours worked counted toward accrual of paid sick 

leave, and that a contractor must likewise adequately segregate time to properly deny an 

employee's request to take leave on the ground that the employee was scheduled to 

perform non-covered work during the time she sought to use paid sick leave. This 

requirement that contractors who wish to distinguish between covered and non-covered 

time to keep adequate records reflecting that distinction is consistent with the treatment 

of hours worked on SCA and non-SCA covered contracts, as well as the treatment of 

covered versus non-covered time under the Minimum Wage Executive Order rulemaking. 

The Department received comments to the proposed rule similar to the suggestions 

contained in your question, however, and in response to those comments, included in the 

Final Rule, in 29 CFR 13.5(a)(l )(i) and (iii), new provisions that allow contractors to 

estimate an employee's covered hours worked in connection with (but not on) covered 

contracts. Specifically, under those provisions, a contractor may estimate the portion of 

an employee's hours worked spent in connection with covered contracts provided the 

estimate is reasonable and based on verifiable information. The Final Rule explains that, 

as suggested by commenters, such information could include the portion of a contractor's 

total revenue that derives from covered contracts if it is reasonable to assume that an 

employee's work time is roughly evenly divided across all of the contractor's work. If, 

for example, a contractor derives half of its revenue from covered contracts, the 

contractor would likely have a reasonable basis for estimating that employees in the 

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mail room of the contractor's corporate headquarters spend half of their hours worked in 

connection with covered contracts. The Final Rule further explains that an estimate of 

this type based on information other than a contractor's revenue could also be 

appropriate. For example, a contractor could estimate that a receptionist who handles 

incoming calls for a group of other employees who work on covered contracts during, on 

average, one third of their work time also spends one third of her hours worked in 

connection with covered contracts. 

The Department made other adjustments to the Final Rule to take into account these new 

provisions. Specifically, 29 CFR 13.5(c)(l) provides that if a contractor estimates the 

amount of time an employee spends performing work in connection with covered 

contracts, the contractor must permit the employee to use her paid sick leave during any 

work time for the contractor. In addition, CFR 13.25(b)(2) provides that a contractor 

must keep records or other proof of the verifiable information on which estimates of this 

type are reasonably based. 

Rep. Walberg (MI) 

I. Under the Obama administration, MSHA tabled efforts to create a drug testing program 

for miners. Given MSHA 's priority to keep miners safe, please explain why this effort 

was suspended when it could help to ensure miners are afforded the confidence to know 

the person working next to them is not impaired by drugs or alcohol? 

Response: MSHA withdrew the proposed rule due to commenters' concerns that the 

rulemaking would negatively impact mine operators' existing alcohol and drug programs, 

and conflict with state laws thus possibly resulting in a diminution of safety for miners. 

Both labor and industry stakeholders opposed MSHA's Alcohol- and Drug-Free Mines 

proposed rule on such grounds. 

2. What policies has MSHA adopted to encourage drug and alcohol-free workplaces and 

what actions has MSHA taken to promote and reinforce the rights of employers to 

conduct drug testing? 

Response: MSHA is committed to ensuring that our nation's miners are able to work in 

environments that are safe and healthy. MSHA is also committed to a drug-free 

workplace for its employees. MSHA enforces existing standards that prohibit alcohol 

and drug use in or around metal and nonmetal mines, and prohibit persons under the 

influence of alcohol or drugs to be permitted on the job. 

Since 2005, several coal-producing states have taken the lead on ensuring that our 

nation's coal mines are alcohol- and drug-free workplaces. For example, the states of 

Kentucky and West Virginia have laws which require applicants for mining certifications 

pass alcohol and drug tests administered by the state before a certification will be issued; 

violation of these states' laws is the basis for decertification. Virginia and West Virginia 

require mine operators to implement a substance abuse program for all miners. Virginia 

requires, at a minimum, a pre-employment drug test. In addition, a number of mine 

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operators have voluntarily implemented drug-free workplace programs. MSHA applauds 

these efforts by states and mine operators to ensure that our nation's mines are safe. 

MSHA will work cooperatively with state enforcement agencies and will continue to 

review mine accident investigation data to determine the extent to which the use of 

alcohol or drugs contributes to mine accidents, and consider options available to the 

Agency to address alcohol and drugs at all mines. MSHA will also continue to work on 

initiatives and rulemakings that improve mining conditions most likely to prevent injury, 

illness, and death in the nation's mines. 

3. The Committee has received information suggesting that a MSHA inspector had been 

implicated in a scheme to sell synthetic urine in order to assist individuals in passing a 

drug test and that an investigation was underway. Is the agency aware of this or similar 

allegations, and, if so, please provide a description of any actions taken by MSHA to 

address these allegations, and please provide all relevant information, documents, and 

communications related to these allegations and the agency's responsive actions. 

Response: Yes, MSHA is aware of an allegation involving an inspector selling synthetic 

urine. The incident was investigated by the Department of Labor-Office of Inspector 

General (DOL-OIG). The inspector retired from federal employment on February I, 

2016 and the DOL-OIG concluded that because he was no longer employed, there was no 

potential administrative action against him regarding the matter. DOL-OIG referred the 

matter as an advisory to MSHA that the retired inspector's store would likely continue to 

sell synthetic urine to miners. MSHA has notified the appropriate State authorities of this 

issue. 

Proposed Rule on Criteria and Procedures for Assessment of Civil Penalties 

1. Does MSHA have any quantitative data, such as analyses of assessed penalties versus 

safety performance, either relating to individual mining operations or mining sectors, to 

show that a relationship exists between penalties and safety performance? If so, please 

provide a copy of such data and any report or study supporting the agency's proposal to 

increase and change assessments. 

Response: MSHA publishes a broad range of mine safety and health data on the 

agency's website (www.msha.gov/data-reports). These reports include data on MSHA's 

enforcement and assessment activities, along with the mining industry's safety and health 

performance for recent years. From these data it may be possible to analyze the 

relationship between penalties and safety performance at a particular mine or for a 

mining sector. However, while the proposed rule would simplify assessments and would 

re-weight the six statutory penalty criteria to focus more on negligence, gravity and 

history of violations, MSHA does not anticipate that the proposal would result in a 

general increase in assessments. MSHA's preliminary regulatory economic analysis can 

be found at https://www.gpo.gov/tasys/pkg/FR-2015-02-l O/pdf/2015-02399.pdf. 

Within the recent five-year period (2010- 2015), the injury rate declined from 2.81 to 

2.28, and the fatality rate declined from .0237 to .0096. During this same period, the total 

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number of citations and orders issued has declined by 36 percent and dollar amount 

assessed has decline by 62 percent. MSHA believes that these declines were due, in large 

part, to MSHA's focused enforcement efforts and improvement in mine operator 

compliance. 

2. This proposed rule makes significant changes to the way in which inspectors assign point 

values to violations. What steps has MSHA taken to create guidance and training so 

inspectors apply these changes and assign points in a uniform manner? What steps has 

MSHA taken to make any such guidance or training available to the regulated 

community? 

Response: At this time, MSHA is considering comments and testimony. MSHA would 

give guidance and training to its inspectors before the inspectors would be expected to 

implement any final rule. MSHA also would meet with our stakeholders to provide 

guidance on the final rule. 

3. Did MSHA contact industry stakeholders, including business and labor, in crafting the 

proposed rule before releasing it to the public? If so, which groups did the agency 

contact, and is there a report that provides information about the results of the 

interactions? 

Response: While MSHA did not meet with stakeholders specifically on the proposed rule 

prior to publishing it, MSHA engages in frequent outreach to stakeholders in the mining 

industry, including both mine operators and miners. This outreach often obtains 

stakeholders' concerns and views on MSHA's enforcement program. In addition, MSHA 

conducted four public hearings after publishing the proposed rule. The first two hearings 

were held on December 4, 2014, in Arlington, VA; and December 9, 2014, in Denver, 

Colorado. In response to stakeholder requests, MSHA conducted two additional public 

hearings on February 5, 2015 in Birmingham, Alabama; and on February 12,2015, in 

Chicago, Illinois. MSHA also extended the comment period twice to allow sufficient 

time for stakeholders to review comments and testimony. 

4. The regulated community has expressed the need for MSHA to conduct a 6-month test 

program that compares assessments under the existing Part I 00 guidelines with 

assessments under the proposed guidelines. Does MSHA intend to conduct the pilot 

program that industry stakeholders requested, or does the Agency have a similar plan that 

will realistically assess how the rule will affect the regulated community before full 

implementation? 

Response: MSHA analyzed the impact of the proposed rule and compared assessments 

under the existing standards with assessments for the same violations under the proposed 

rule. MSHA found that under the proposal, total penalties proposed by MSHA and the 

distribution of the penalty amount by mine size would remain generally the same; 

however, the penalty amount for small M/NM mines would decrease. MSHA's 

preliminary regulatory economic analysis can be found at 

https://www.gpo.gov/fdsys/pkg/FR-20 15-02-1 0/pdf/20 15-02399.pdf. 

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MSHA has received a number of comments and heard testimony at the public hearings on 

stakeholder concerns about the proposed rule. MSHA is currently reviewing and 

considering stakeholders' comments. 

Pattern of Violations Rule 

l. In January 2013, MSHA finalized a rule revising its existing regulation for Pattern of 

Violations (POV). Beginning with the rule's effective date on March 25, 2013, please 

provide the Committee the following information: 

a. How many facilities have been placed in POV status? 

Response: Under Mine Act section 104, an operator is notified if a pattern of 

violations exists at a coal or other mine. Since March 25, 2013, five operators 

received POV notices involving five mines. (4 Coal, l Metal/Nonmetal). Since 

2015, no operators received POV notices. 

b. How many facilities have filed Corrective Action Programs (CAPS)? 

Response: Since March 25,2013,31 operators (19 Coal, 12 Metal/Nonmetal) 

have filed Corrective Action Programs (CAPs) that have been approved by 

MSHA. 

c. How many of the CAP-facilities have reduced the significant and substantial 

(S&S) violation frequency rate by 50 percent, or reduced the S&S frequency rate 

to a level at or below the median S&S frequency rate for mines of a similar type? 

Response: Of the 31 approved CAPs, 26 contain goals that reduced the S&S 

violation frequency rate by 50 percent, or reduced the S&S frequency rate to a 

level at or below the median S&S frequency rate for mines of a similar type. 

Fourteen CAP operators met their goals, five have not met their goals, and seven 

have yet to reach their defined completion dates. 

2. Since the effective date of the Final Rule, how many operators have identified mistakes 

in data which led to the facilities being placed in POV status? In addition please provide 

how many of these mistakes can be characterized as: 

a. Citations entered incorrectly? 

b. Citations not yet updated in MSHA's computer system? 

c. Decisions rendered by the Mine Safety and Health Review Commission, thus 

nullifying the citations? 

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d. Contested citations? 

e. Citations issued in error to an operator instead of an independent contractor? 

Response: As the preamble to the final POV rule notes, mine operators now have 

access to MSHA's on-line Monthly Monitoring Tool, which allows operators to 

review their compliance information on a monthly basis and bring to MSHA's 

attention any data discrepancies in the POV database as it is updated each month. 

See, 78 Fed. R. 5061. Additionally, MSHA provides mine operators an opportunity 

to meet with the District Manager for the purpose of discussing discrepancies in the 

data after MSHA conducts its POV screening. Mine operators have the opportunity 

to question the underlying data on which the POV is based and provide information to 

support their position. MSHA will make changes, as appropriate, which could result 

in the rescission of the POV notice if MSHA verifies the data discrepancies and the 

mine no longer meets the criteria for POV. See, 78 FR 5065-66. Since the effective 

date of the Final Rule, we are not aware of any discrepancies identified by mine 

operators in the data used during a POV screening. Under this highly successful 

program and MSHA outreach to operators, no mines have met the POV screening 

criteria since 2014. 

Wellness Programs 

I. As you know, employers sponsor well ness programs to improve the well-being of their 

workforce by incentivizing employees and their families to adopt healthy lifestyles. This 

reduces health care costs and increases productivity. One of the Patient Protection and 

Affordable Care Act's few bipartisan provisions encouraged and expanded these well ness 

programs. However, the EEOC continues to wage an aggressive attack on employer 

wellness programs. Last year, the EEOC issued proposed rules (finalized in May 2016) to 

amend regulations under the Americans with Disabilities Act and the Genetic Information 

Nondiscrimination Act, which have the effect of reducing the ability of employers to offer 

these programs. That's why l cosponsored H.R. 1189, the Preserving Employee Wellness 

Programs Act. The bill protects wellness programs from EEOC's counterproductive and 

burdensome requirements. Do you share our concerns that EEOC's proposed rules are 

counterproductive? Was the Department in contact with EEOC as it finalized the 

proposed rules? 

Response: The Department believes that the EEOC's enforcement of applicable laws 

safeguards workers, especially those with disabilities. Title I of the Americans with 

Disabilities Act (ADA) and Title ll of the Genetic Information Nondiscrimination Act of 

2008 (GINA), both of which are enforced by the EEOC, impose conditions on employers 

independent of the obligations imposed by the Health Insurance Portability and 

Accountability Act (HIPAA) and the Affordable Care Act (ACA). 

In particular, the ADA generally prohibits an employer from making disability-related 

inquiries or requiring medical examinations, subject to a statutory exception for 

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"voluntary" medical examinations and medical histories that are part of an employee 

health program. 

Title II of GINA prohibits employers covered by the law from using genetic information 

in making decisions about employment. It also limits employers from acquiring and 

disclosing genetic information about applicants or employees, although some exceptions 

to the GINA Title II genetic information acquisition rule are permitted in voluntary 

wellness programs. Additional rules for genetic information, including additional 

proscriptions against acquisition of genetic information, may apply to wellness programs 

under GINA Title I. 

The Department, together with the Departments of Treasury and Health and Human 

Services, consulted extensively with the EEOC during the drafting process for the 

proposed and final rules for wellness programs under the ADA Title I and GINA Title II. 

The EEOC has explained that it sought to promote consistency, to the extent possible, 

with the tri-Department rules, while also ensuring that such programs are voluntary and 

incentives are not so high as to become coercive and thus violate the ADA. 

2. Private sector wellness programs benefit employees, their families, and employers. But, 

employers need flexibility in developing and administering these plans. The Preserving 

Employee Wellness Programs Act (H.R. 1189) improves current law to provide 

employers with certainty and flexibility in structuring their wellness programs. How is 

the Department ensuring that wellness programs flourish, so that health care costs are 

minimized for employer sponsored coverage and employees alike? 

Response: The Department agrees that well ness programs provide important health 

benefits, and it remains committed to supporting workplace health promotion and disease 

prevention as a means to reduce the burden of chronic illness, improve health, and limit 

growth of health care costs, while ensuring that individuals are protected from unfair 

underwriting practices that could otherwise reduce benefits based on health status. 

Accordingly, the Departments of Labor, Treasury, and Health and Human Services have 

jointly issued regulations that explain how employers can design wellness programs that 

comply with the ACA rules prohibiting plans and insurance companies from 

discriminating against individuals on the basis of health status factors. The ACA and the 

Departments' regulations provide flexibility for employers by increasing a maximum 

reward permitted under the wellness regulations ofHIPAA 1996 from 20 percent to 30 

percent of the cost of health coverage. They also protect consumers by requiring that 

health-contingent wellness programs be reasonably designed to promote health or prevent 

disease and be available to all similarly situated individuals. Additionally, if an 

individual's medical condition makes it unreasonably difficult or medically inadvisable 

for the individual to meet a wellness program's specified health-related standard, the 

program must offer reasonable alternative means of qualifying for the reward. 

The Department also supports the use ofwellness programs by helping employers 

understand the rules. The Department conducts in-person health benefits laws 

compliance assistance seminars and national webcasts that include information on the 

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wellness program rules and provide the opportunity to ask questions. In addition, on 

October 19, 2016, the Department participated at the joint webcast hosted by EEOC to 

help employers understand their responsibilities under the Department's wellness rules 

and the EEOC wellness rules. The Department also has a compliance guide (available 

online and in print) that includes FAQs as well as a check sheet on the wellness program 

provisions and a separate page on the dedicated ACA web page providing easy links to 

the rules and related information. The web page provides links to several F AQs on 

wellncss programs including an FAQ that specifically clarifies that the Departments will 

coordinate with other Departments, such as the EEOC, but a wellness program that 

complies with the Departments' well ness program regulations does not necessarily mean 

it complies with any other State or Federal law. Employers also can request assistance 

from our trained benefits advisors online or by calling toll-free. 

Blacklisting 

I. The Department issued guidance implementing the blacklisting Executive Order in May 

2015. When can we expect that guidance to be finalized? What will be the effective date 

of that guidance? 

Response: The DOL guidance and FAR regulations implementing the Fair Pay and Safe 

Workplaces EO were published in the Federal Register on August 25, 20 I 6. The 

regulations were scheduled to take effect on October 25, 2016; however, on October 24, 

2016, a federal district court judge in Texas issued a preliminary injunction to prevent 

certain sections, provisions, and clauses of the rule from taking effect while the lawsuit is 

pending. Specifically, the Court preliminarily enjoined implementation of"any portion 

of the FAR Rule or DOL Guidance relating to the new reporting and disclosure 

requirements regarding labor law violations as described in Executive Order 13673 and 

implemented in the FAR Rule and DOL Guidance." The Department remains ofthe 

view that the Rule and Guidance are legally sound, and the Department of Justice is 

considering options for next steps. 

The Court Order does not enjoin implementation of those sections of, or the clause in, the 

FAR rule addressing the paycheck transparency requirements in the EO (i.e., section 5 of 

the EO 13673). This coverage will take effect for new solicitations issued on or after 

January I, 2017, as stated in the final rule. 

2. The proposed blacklisting guidance stated that additional guidance would be issued on 

equivalent state labor laws and subcontractor reporting requirements at a later date. What 

is the status of this follow-up guidance and will it be proposed for notice and comment? 

Given the breadth of this secondary guidance, shouldn't that information be 

proposed before finalizing the May 2015 guidance, especially in light of the burdensome 

compliance requirements and the need to implement new reporting systems? 

Response: As noted in the previous response, the FAR regulations and DOL guidance 

implementing the Fair Pay and Safe Workplaces EO were scheduled to take effect on 

October 25,2016. However, on October 24,2016, a federal district court judge in Texas 

issued a preliminary injunction to prevent certain sections, provisions, and clauses of the 

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rule from taking effect while the lawsuit is pending. Specifically, the Court preliminarily 

enjoined implementation of "any portion of the FAR Rule or DOL Guidance relating to 

the new reporting and disclosure requirements regarding labor law violations as described 

in Executive Order 13673 and implemented in the FAR Rule and DOL Guidance." The 

Department remains of the view that the Rule and Guidance are legally sound, and the 

Department of Justice is considering options for next steps. 

Once the Executive Order takes effect, with the exception of occupational safety and 

health "State Plans" that have been formally approved by OSHA, equivalent state laws 

are not covered in the current guidance and rule. They will require a second notice-andcomment rulemaking to be implemented at a later date. The Administration will assess 

implementation and make decisions about when further regulatory action is appropriate. 

Rep. Heck (NV) 

I. On March 13, 2014, the President issued a memorandum instructing you to update the 

Department's overtime regulations under the Fair Labor Standards Act. The final rule 

issued by the Department increases the salary threshold for determining which executive, 

administrative, and professional employees (or "white collar" employees) are eligible for 

overtime compensation. 

I have heard from many of my constituents representing a cross-section of industries who 

are extremely concerned that this rule will seriously harm their industries; and ultimately 

force a reduction in hours or elimination of positions altogether. 

This issue will affect businesses of all sizes, even larger employers like the resort casino 

industry in my state, Nevada. Employees of these resort casinos employ nearly 28 percent 

of the state's workforce. Increasing the salary threshold to $47,476 will dramatically 

increase the labor burdens on these employers. This will likely result in workers being 

shifted to hourly status and facing reduced hours or even demotions. At a time when the 

cost of living continues to rise, how can the Department defend this rule which takes 

direct aim at hardworking middle-class Americans and threatens their job and financial 

security? 

Response: As you may know, on November 22,2016, a federal district court judge in 

Texas issued a preliminary injunction that enjoins the Department from implementing 

and enforcing the overtime final rule. The Department remains of the view that the rule 

is legally sound and, with the Department of Justice, is reviewing the court's opinion and 

order and considering any next steps. 

One of the most basic tenets of our economy is that a hard day's work should lead to a 

fair day's pay. For much of the past century, a cornerstone of that promise has been the 

idea that you're paid more if you work more than 40 hours in a week. Too many of 

America's workers have been left working long hours for no additional pay, taking them 

away from their families and civic life without any extra compensation. 

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The white collar exemption from the overtime protections of the Fair Labor Standards 

Act was originally meant for highly-paid workers who had better benefits, job security 

and opportunities for advancement. Unfortunately, when left unchanged, the salary 

threshold is eroded by inflation every year. It has only been updated once since the 

1970s-in 2004, when it was set too low. As a result, the threshold fails to help 

employers identify workers who are entitled to overtime pay, and it has left millions 

without overtime protections to which they should be entitled. This outdated salary 

threshold provides overtime protections to just 7 percent of full-time salaried workers 

today based on their pay, compared with 62 percent in 1975. In fact, the white collar 

exemption salary level set in 2004--$455 per week or $23,660 a year-means even 

workers earning less than the poverty line for a family of four may earn too much to 

automatically qualify for overtime. 

It's important to note that these rules do not require employers to convert salaried 

workers to hourly workers, or from managers to line employees. Salaried workers .!llilY 

be paid overtime. And overtime-eligible workers .!llilY be paid a salary. Workers want to 

be- and should be- paid fairly for the hours they work. Workers and their 

representatives in their public comments said workers prefer more pay to a particular 

status under the FLSA. 

Employers have a wide range of options for responding to the changes to the salary level, 

and the Department does not dictate or recommend any method. The circumstances of 

each affected employee will likely impact how employers respond to this Final Rule, and 

the Department accounted for these (and other) possible employer responses in 

estimating the likely costs, benefits, and transfers of the Final Rule. We encourage 

employers to use our guidance, such as the General Guidance for Private Employers, to 

understand these options further. 

Rep. Stefanik (NY) 

I. I wanted to discuss your agency's changes to federal overtime exemptions that will have 

sweeping unintended and adverse impacts on employees and employers across the 

country. Millennials will be particularly hard hit by the unprecedented increase in the 

salary threshold. Recent college graduates across the country will see career pathways 

and opportunities for flexible work arrangements diminish significantly. There is not a 

single state in which median entry level wages for full-time workers with a college 

degree comes even close to $47,476, and this challenge is even more difficult in places 

like the North Country where companies already face challenges attracting millennia! 

talent. What this means is more college graduates will enter the workforce as hourly 

employees and will struggle to pay off college loans and make the important steps toward 

financial independence that so many young people today wrestle with. The rule's annual 

increase to the salary threshold will only exacerbate these negative impacts as 

opportunities to move into salaried, exempt positions become further and further out of 

reach. 

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What analysis did the Department conduct in the development of this rule regarding the 

impacts on career advancement opportunities for millennials entering the workforce with 

student loan debt? 

Did the Department evaluate the impact that this rule will have on the ability of areas like 

upstate New York to continue to attract young people when those individuals will be 

stuck in hourly jobs with few opportunities for upward mobility in the workforce? 

Response: As you may know, on November 22,2016, a federal district court judge in 

Texas issued a preliminary injunction that enjoins the Department from implementing 

and enforcing the overtime final rule. The Department remains of the view that the rule 

is legally sound and, with the Department of Justice, is reviewing the court's opinion and 

order and considering any next steps. 

As part of the rulemaking process, the Department conducted an extensive, thorough 

study of the overtime rule's economic impact, which can be found in the Federal Register 

pages 32448-32459 (a summarv of the economic impact analysis can be found here). 

Based on comments received, DOL considered low-wage regions and made a significant 

change from the proposed rule: We proposed a level based on nationwide salaries, but 

our final rule is based on salaries in the lowest-wage Census region (currently the South). 

The new salary level is appropriate for employers across a broad range of regions, 

industries, and business sizes. In addition, the Department has traditionally considered 

recent college graduates to be overtime eligible, as they have typically not achieved bona 

fide administrative or professional status, nor are their salaries commensurate with those 

of fully trained and experienced professional or administrative employees. See footnote 

35 on page 32410 of the rule. 

It is important to clarify that the Department is establishing automatic updates to the 

standard salary level every three years, rather than annually as in the proposed rule and as 

indicated in your question. The Department has also committed to giving employers !50-

day notice of what the new threshold will be so that employers can plan accordingly. 

These changes to the updating mechanism were directly responsive to employer 

comments about the administrative burden of annual updating. 

The white collar exemption was originally meant for highly-paid workers who had better 

benefits, job security and opportunities for advancement. Unfortunately, when left 

unchanged, the salary threshold is eroded by inflation every year. It has only been 

updated once since the 1970s-in 2004, when it was set too low. As a result, it has left 

millions without overtime protections to which they should be entitled. This outdated 

salary threshold provides overtime protections to just 7 percent of full-time salaried 

workers today based on their pay, compared with 62 percent in 1975. In fact, the white 

collar exemption salary level set in 2004, $455 per week or $23,660 a year-means even 

workers earning less than the poverty line for a family of four may earn too much to 

automatically qualify for overtime. 

It's important to remember that these rules do not require employers to convert salaried 

workers to hourly workers, or from managers to line employees. Salaried workers !lli!Y 

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be paid overtime. And overtime-eligible workers J:lli!Y be paid a salary. The Department 

heard repeatedly in its outreach to employees and worker advocates and in comments on 

the NPRM that workers derive status from how much they make and how much 

responsibility they have, not whether they are paid on a salary or hourly basis. 

In addition, the Department estimates that of the 4.2 million workers who will either gain 

new overtime protections or get a raise to the new salary threshold, more than half(53%) 

have at least a four-year college degree, and an additional 29% have some college 

education or an associates/occupational degree. Roughly two in five (39%) of affected 

workers are under the age of35. This long-awaited update will provide a meaningful 

boost to young and college-educated workers, and it will go a long way toward ensuring 

that every worker is compensated fairly for their hard work. 

Ranking Member Scott (VA) 

1. In 2007 the Office of Legal Counsel (OLC) issued a memorandum in response to a 

request from a Department of Justice grantee, World Vision, to be exempted from a 

statutory employment nondiscrimination provision.2 World Vision argued that complying 

with this nondiscrimination provision unduly burdened their religion under the Religious 

Freedom Restoration Act (RFRA). The OLC granted this request in 2007 authorizing 

World Vision to continue to discriminate against prospective employees on the basis of 

religion in taxpayer funded programs. Over the past nine years, the Department of Justice 

has not only allowed this exemption to stay in place for World Vision, but this taxpayer 

funded discrimination has been extended to other programs in other agencies. Is this 

memo limited to grantees? 

Response: The World Vision memo you identify is a controlling opinion of the U.S. 

Department of Justice concerning how RFRA applies to laws restricting recipients of 

federal financial assistance from making employment decisions based on religion. DOL 

guidance effectuating that opinion and establishing procedures for implementing the 

requirements of RFRA within DOL is available online at 

https://www.dol.gov/oasam/grants/RFRA-Guidance.htm. 

a. Does the Department allow faith-based organizations receiving DOL grants to 

discriminate against Muslims, Jews, and Catholics? 

Response: Under certain circumstances, described in detail below, a faith-based 

organization receiving a DOL grant could employ only individuals of a particular 

religious belief. For example, if it met all the requirements described below, a 

Catholic faith-based organization could hire only Catholics. 

Where a law enforced by DOL (such as the Workforce Innovation and 

Opportunity Act) prohibits religious discrimination in employment by recipients 

of DOL financial assistance, such prohibition will be displaced by RFRA and thus 

2 https ://www. justice.gov I sites/ de fault/files/ ole/ opin ions/2007 /06/31/worldvision .pdf 

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will not apply to a recipient with respect to the employment of individuals of a 

particular religious belief to perform work connected with the carrying on by such 

recipient of its activities, provided that (i) such recipient can demonstrate that its 

religious exercise would be substantially burdened by application of the religious 

non-discrimination requirement to its employment practices in the program or 

activity at issue, and (ii) DOL is unable to demonstrate that applying the nondiscrimination provision to this recipient both would further a compelling 

government interest and would be the least restrictive means of furthering that 

interest. A determination whether a recipient of DOL financial assistance 

qualifies under RFRA for an exemption from a religious non-discrimination 

requirement in an authorizing statute or regulation will be made on a case-by-case 

basis upon request of the recipient. 

Once selected as a grantee, a recipient that wishes to request an exemption from 

the application of a religious non-discrimination provision must submit a request 

for exemption to the Assistant Secretary charged with issuing or administering the 

grant or his/her designee certifying that: (I) providing the services to be funded 

by the grant is an exercise of the recipient's religious beliefs; (2) receiving the 

grant is important to the recipient, in the sense that providing the services is 

demonstrably tied to the recipient's religious beliefs, and without the grant the 

recipient's ability to provide the services in question would be substantially 

diminished; (3) employing individuals of a particular religious belief is important 

to the religious identity, autonomy, or communal religious exercise of the 

recipient; and ( 4) conditioning receipt of the grant on compliance with the nondiscrimination provision creates substantial pressure for the recipient, in providing 

the services in question, to abandon its belief that hiring based on religion is 

important to its religious exercise. The recipient must further certify that it will 

comply with the requirements of29 CFR part 2, subpart D, Equal Treatment in 

Department of Labor Programs for Religious Organizations; Protection of 

Religious Liberty of Department of Labor Social Service Providers and 

Beneficiaries. 

The Assistant Secretary or his/her designee, in consultation with DOL's Office of 

the Solicitor, determines whether the recipient is entitled to an exemption from 

the religious non-discrimination provision at issue. 

b. As a hypothetical, can a faith-based service provider receiving DOL funds to 

facilitate training and employment services to formerly incarcerated juveniles 

discriminate against LGBTQ social workers, counselors, and other staff because 

of their sexual orientation or gender identity? 

Response: The World Vision opinion applies only to exemption from a 

requirement not to discriminate on the basis of religion. It does not address 

exemption from any requirement not to discriminate on the basis of sex, sexual 

orientation, or gender identity. Recipients exempted trom the religious nondiscrimination requirements at issue will not be exempted or excused, by virtue of 

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the exemption, from complying with other requirements contained in the law or 

regulation at issue. 

c. What recourse does the Department provide to individuals whose civil rights are 

statutorily protected but experience discrimination in taxpayer-funded programs 

as a result of the OLC memo? 

Response: A recipient of DOL financial assistance that qualifies under RFRA for 

an exemption from a religious non-discrimination requirement in an authorizing 

statute or regulation may lawfully employ only individuals of a particular 

religious belief. Under those circumstances, DOL would not be able to pursue 

any complaint of religious discrimination against a faith-based organization filed 

by an applicant for employment that alleged solely that he or she was not hired 

because he or she did not share the religious belief of the faith-based organization. 

As noted above, however, recipients exempted from the religious nondiscrimination requirements at issue will not be exempted or excused, by virtue of 

the exemption, from complying with other requirements contained in the law or 

regulation at issue. 

d. What steps are you taking to end this federally-sanctioned discrimination and to 

ensure that organizations operating programs on behalf of the federal government 

arc aware of their civil rights obligations? 

Response: As noted above, the World Vision memo is a controlling opinion of the 

Department of Justice. The Department of Justice, DOL, and the entire 

administration are committed to ensuring that we partner with faith-based 

organizations in a way that is consistent with our laws and our values, and we 

continue to evaluate legal questions that arise with respect to these programs to 

ensure that they fully comply with all applicable laws. As noted above, a 

recipient of DOL financial assistance that qualifies under RFRA for an exemption 

from a religious non-discrimination requirement must certi(y that it will comply 

with the requirements of29 CFR part 2, subpart D, Equal Treatment in 

Department of Labor Programs for Religious Organizations; Protection of 

Religious Liberty of Department of Labor Social Service Providers and 

Beneficiaries. 

2. The President has issued the Executive Order on Fair Pay and Safe Workplaces, which 

requires bidders and contractors to provide information on labor law violations over the 

previous three years. This will help ensure that contracting officers have full information 

when determining whether a prospective contractor is "responsible." Opponents label this 

policy of screening contractors for their labor compliance record as "blacklisting." 

a. What is your response to this blacklisting argument? Is that a fair characterization 

of this Executive Order, and if not, please explain why. 

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Response: The Department disagrees with the characterization that the EO 

"blacklists" potential federal contractors, rather the intent of the EO is to ensure 

contractors comply with federal labor laws. The federal government should not 

be doing business with companies that break the laws that protect workers' safety, 

wages, and civil rights. While the vast majority offederal contractors play by the 

rules, every year tens of thousands of American workers are denied overtime 

wages, not hired or paid fairly because of their gender, race, disability or veteran's 

status, or face unnecessary health and safety risks in the workplace by 

corporations contracting with the federal government. 

Suspension and debarment procedures play an important role in the procurement 

process. They serve to exclude from the federal contracting process those 

contractors whose record is so poor that it serves the public interest to preclude 

them completely from receiving additional contracts. 

The purpose of the EO is to encourage compliance- not to deny contracts. The 

processes and tools DOL and the FAR Council are establishing are designed to 

help in identifying and addressing labor violations b~fore they require 

consideration of suspension and debarment. Contracting officers will not be 

compelled to deny any prospective contractor the award of a contract because of a 

labor law violation. Instead, the contracting officers will make responsibility 

determinations based on a contractor's violation history and mitigating factors, 

including the extent to which a contractor has taken steps to negotiate compliance 

agreements with enforcement agencies to correct past problems and avoid future 

ones. 

In some cases, contractors may need to be considered for suspension and 

debarment because of the seriousness oftheir violations and the failure to take 

remedial actions. The EO does not, in any way, alter the suspension or debarment 

process, or long-standing principles of fairness and due process built into those 

procedures. However, the expectation is that the processes and tools envisioned 

by the EO will reduce the need for an agency to consider suspension and 

debarment and help contractors avoid the consequences of those remedies. 

b. The Executive Order requires that the Federal Acquisition Regulatory Council 

issue implementing regulations and requires the DOL to issue guidance. What is 

the status of the rules and guidance? 

Response: The DOL guidance and FAR regulations implementing the EO were 

published in the Federal Register on August 25,2016, and were scheduled to take 

effect on October 25, 2016. However, on October 24, 2016, a federal district 

court judge in Texas issued a preliminary injunction to prevent certain sections, 

provisions, and clauses of the rule from taking effect while the lawsuit is pending. 

Specifically, the Court preliminarily enjoined implementation of"any portion of 

the FAR Rule or DOL Guidance relating to the new reporting and disclosure 

requirements regarding labor law violations as described in Executive Order 

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13673 and implemented in the FAR Rule and DOL Guidance." The Department 

remains of the view that the Rule and Guidance are legally sound, and the 

Department of Justice is considering options for next steps. 

The Court Order does not enjoin implementation of those sections of, or the 

clause in, the FAR rule addressing the paycheck transparency requirements in the 

EO (i.e., section 5 of the EO 13673). This coverage will take effect for new 

solicitations issued on or after January 1, 2017, as stated in the final rule. 

3. The Department proposed regulations related to the Black Lung Benefits Program which 

requires parties- including employers, claimants, attorneys and other authorized 

representatives- to disclose all medical information developed in connection with a 

claim for benefits, even when the party does not intend to submit the information into 

evidence. That rule was proposed on April28, 2015, and the comment period closed June 

29, 2015. Twenty comments were received. 

What is the status of this rule and when will a final rule be issued? 

Response: The final rule was published on April 26, 2016. The regulations became 

effective on May 26, 2016. 

4. Patriot Coal has recently liquidated after filing for bankruptcy, and the Black Lung 

Disability Trust Fund became liable for approximately $65 million in uninsured claims 

costs because Patriot Coal did not have adequate surety to back up its self-insured black 

lung claims liability. 

a. What is the Department doing to ensure that there is adequate surety posted for 

the rest of the self-insured operators? 

Response: Recently, the Division of Coal Mine Workers' Compensation 

(DCMWC) conducted a thorough review of the self-insured compliance process 

and determined that its past practices for evaluating self-insurance applicants were 

outdated. In collaboration with the OWCP Comptroller, DCMWC determined 

that a systematic review of our processes was needed, which required specialized 

skill sets in financial, economic, and risk analysis. A third-party contractor with 

the requisite expertise was hired to analyze the current self-insured responsible 

operator (RO) inventory and to assist DCMWC in devising a new evaluation 

system that is comprehensive, transparent, and can be applied consistently to new 

applicants as well as current operators undergoing reevaluation. This new 

formula will adequately safeguard the Black Lung Disability Trust Fund 

(BLDTF) by employing the services of a second third-party contractor to review, 

implement, and test the new system. Once the new financial health assessment 

tool is complete (estimated to be in FY 2017), DCMWC will conduct 

reevaluations of all active operators that are approved for self-insurance authority 

to determine if their current level of security is sufficient. This assessment tool 

will also be used for new applicants. If it is determined that an operator's security 

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falls short of the calculated potential liability, then that operator will be required 

to increase its security to the acceptable amount or risk having their self-insurance 

authorization revoked, or in the case of a new applicant, their application for selfinsurance will be denied. 

b. Has the Department estimated the maximum potential financial exposure to the 

Black Lung Disability Trust Fund from self-insured operators where there is 

insufficient surety and responsible mine operator has filed for bankruptcy or is 

anticipated to do so in the foreseeable future? 

Response: DCMWC does not have liability projections for every self-insured 

operator and therefore cannot provide a total liability figure. However, we 

anticipate being able to make such projections in the future. As mentioned above, 

once the new financial health assessment tool is complete, DCMWC will be better 

positioned to project the future liability of all operators who wish to enroll in the 

self-insurance program along with all operators currently approved to participate 

in the self-insurance program. 

c. What is the range of that potential liability to the Trust Fund? 

Response: As explained in the previous response, DCMWC does not have 

liability projections for every self-insured operator and therefore cannot provide a 

total liability figure. We have, however, estimated the Trust Fund's likely 

exposure in several recent and ongoing bankruptcies. Our best estimate for those 

matters is: Alpha Natural Resources ($182M to $192M); Arch Coal ($0); James 

River Coal ($49M to $90M); Patriot Coal ($65M); Peabody Coal ($0 to $63.4M); 

and Walter Energy ($0), for a total estimated exposure of $296M to $41 OM. 

Please note that these estimates depend on actuarial projections and may change 

as the bankruptcy cases proceed. 

d. Does the Department have adequate tools to adequately defend the financial 

interests ofthe Trust Fund when self-insured operators do not have sufficient 

surety at the time they file for bankruptcy? 

Response: When a self-insured operator files for bankruptcy, DCMWC works 

closely with legal counsel in DOL's Office of the Solicitor and the Department of 

Justice to prepare and file proofs of claim and other necessary documents. At that 

point, however, the Department has little in the way of effective tools to protect 

the Trust Fund's financial interests. Once an operator defaults on its federal black 

lung obligations by failing to pay benefits, 30 U.S.C. § 934(b) grants the United 

States a lien on a defaulting operator's assets that is entitled to the same priority 

as a federal tax lien. This lien, however, does not effectively protect the Trust 

Fund when self-insured operators file for bankruptcy. Bankrupt operators do not 

typically default on their federal black lung obligations until after the bankruptcy 

court approves a reorganization plan. Once the plan is approved (and assuming 

that the reorganized entity or asset purchaser does not assume the operator's 

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federal black lung liabilities), the operator's federal black lung liabilities are 

generally discharged, which renders our lien unenforceable. As a result, the Trust 

Fund is typically treated as a general unsecured creditor by the bankruptcy courts, 

which usually translates into a limited recovery. 

5. Charges for compound drugs provided to injured workers under the Federal Employees' 

Compensation Act have escalated at a steep rate since 2013. The costs to the U.S. Postal 

Service for compound drugs from FECA claims are expected to exceed $150 million in 

FY 2016- up from only $4.9 million in FY 2012. The USPS IG recently issued a report 

(HR-MA-16-003) quantifYing this dramatic increase in the compound drug costs and has 

recommended that DOL adopt a fee schedule and reimbursement caps. 

a. What has DOL done to address the concerns of the U.S. Postal Service since this 

matter was brought to the attention of the Office of Workers' Compensation 

Programs? 

Response: OWCP has developed an aggressive plan to implement enhanced 

controls and process changes to the authorization of prescription compound drug 

claims. OWCP has changed the FECA fee schedule for prescription drugs to 

reduce the amount paid for compounded drugs, including: a tier pricing scheme 

that is based on the number of ingredients in the compounded drug is requiring 

the use of a universal claim form for all compounded drug prescriptions. OWCP 

has also developed a policy to exclude the reimbursement of certain ingredients 

that are not deemed medically necessary. Additionally, OWCP is implementing a 

pre-authorization process for all compounded drug prescriptions in the FECA 

program. Effective October 17, 2016, a CA-26 Letter of Medical Necessity 

(LMN) is now required for the FECA program, which must be completed by the 

claimant's treating physician before FECA will authorize or pay for a 

prescription. Since a great deal of compounded drug fraud/abuse occurs at the 

hands of compounding pharmacies, ensuring that the treating physician certifies 

that each ingredient of the compounded drug is medically necessary should 

greatly reduce the usage of compounded dugs. OWCP consulted heavily with 

TRICARE and others to benefit from their experience with compounded drugs. 

OWCP expects that these measures will increase safety and greatly reduce costs, 

as it continues to evaluate additional measures. During the first two months that 

the CA-26 was in use, 591 non-opioid compounded drug LMNs were submitted 

and 19 were approved. Additionally, 3,753 requests for non-opioid compounded 

drug prescriptions were denied at point of sale. 

b. Will the DOL adopt a fee schedule and reimbursement caps for compound drugs? 

If so, on what date will these kick in? 

Response: The Division of Federal Employees' Compensation (DFEC) has had a 

fee schedule for all prescription drugs, including those used to make up 

compounded drugs, since 1999. The fee schedule is reviewed and adjusted 

regularly in order to keep current with costs. DFEC has also employed other cost47 
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reduction strategies over the years, such as mandating the use of generic drugs 

unless otherwise prescribed by the physician. 

In order to combat the rising costs of compounded drugs, DFEC has employed 

some short-term strategies to reduce costs while longer-term strategies are being 

developed. All compounded drug ingredients are being paid as generic drugs, not 

brand name, in order to price them at a lower rate. Effective July I, 2016, DFEC 

reduced the reimbursable rate for generic drugs an additional 10%, which will 

further reduce costs. In addition, a "two-tiered" fee schedule has been put into 

place for compounded drugs, based on the number of ingredients used. For any 

compounded drug prescription with up to three ingredients, DFEC will reimburse 

at 50% of the Average Wholesale Price (A WP) of each ingredient. For those 

containing four or more ingredients, the reimbursement rate will be 30% of A WP. 

There are no plans to institute hard dollar reimbursement caps for compounded 

drugs at this time but we expect that the CA-26 Letter of Medical Necessity 

required effective October 17, 2016 will reduce costs significantly. During the 

first two months that the CA-26 was in usc, 591 non-opioid compounded drug 

LMNs were submitted and 19 were approved. Additionally, 3,753 requests for 

non-opioid compounded drug prescriptions were denied at point of sale. 

c. Is DOL tracking whether other federal agencies are experiencing similar 

percentage increases in compound drug costs for injured workers receiving 

benefits under FECA? 

Response: Yes. OWCP is treating the compounded drug issue as one concerning 

all federal agencies, and our action plan should benefit all federal agencies. 

d. Please provide data on the total amount paid out by OWCP for compounded drugs 

under the FECA program between FY 20 II and FY 2016 year to date. 

Response: 

FY2011 

FY2012 

FY2013 

FY2014 

FY2015 

FY2016 

Rep. Davis {CA) 

$2.4 million 

$10.5 million 

$33 million 

$79 million 

$214 million 

$239 million 

1. Earlier this year, the Department, delayed the release of WIOA regulations mandating 

competitive bid process for One-Stop Career Centers from January 2016 until June 2016. 

Local workforce boards have communicated that shifting to a procurement process is a 

complex and time consuming process. Considering the reduced time in which to 

complete the proposed shift by the July 2017 deadline, what steps is the Department of 

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Labor taking in providing flexibility or an extended deadline to states to meet the new 

standards? 

Response: The WIOA Final Rule was published on August 19, 2016, and it ultimately 

took effect on October 18, 2016. In the meantime, the Department has provided 

flexibility to states and local WDBs by extending the time in which they are required to 

follow the competitive procurement provision from the July 1, 2015, statutory effective 

date to July I, 2017, using the Department's transition authority provided in Section 503 

ofWIOA. The local boards will have had nearly three years from the date WIOA was 

authorized to prepare to meet this requirement. The Department has issued several FAQs 

on this topic and is preparing additional guidance and technical assistance to support the 

selection of one-stop operators by July I, 2017. 

Rep. Fudge (OH) 

I. Apprenticeship programs are a proven on-the-job training strategy that put workers on a 

pathway to the solid middle class jobs. Research suggests that not only do apprentices 

earn an average of $50,000 after completing training but for every dollar taxpayers invest 

on apprenticeships we see $27 in benefits. The Department has made great strides in 

lifting up this successful on-the-job training model. Our country is currently facing a 

skills gap, which will only increase with time. Over 70 percent of organizations cite 

"capability gaps" as their biggest challenge. What steps is the Department taking to 

provide our current workforce with more dynamic skills that will allow them to continue 

to advance alongside our evolving economy? 

We talk a lot about moving young people from high school and community colleges to 

skilled jobs. How is the Department strengthening pipelines between various sectors in 

order to repurpose our workforce and support our middle-aged workers in career 

transitions? 

Response: The 21st century American worker faces an increasingly complex and 

dynamic job market and the Department is focused on taking action to ensure that 

education and training systems in states and communities are able to keep pace to meet 

employers' evolving skills needs. Partnering with our sister agencies, state and local 

workforce boards, chief elected officials, employers, unions, schools, community 

organizations and others is essential to build education and training pipelines along career 

paths in in-demand industries that face critical skill shortages now and in the foreseeable 

future. The Department continues to take action through the implementation of the 

Workforce Innovation and Opportunity Act, Registered Apprenticeship expansion, Trade 

Adjustment Assistance, as well as a number of strategic investments such as the Trade 

Adjustment Assistance Community College Career Training (TACCCT). 

Common across those efforts is the importance of supporting state and regional 

economies to identify high-demand or fast growing industry sectors, and build employerdriven talent pipelines that lead to good paying careers in those industries for all jobseekers from youth to middle-age workers seeking opportunity. That common focus is 

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supported by growing evidence that firms engaged in regional industry sector 

partnerships with education and training institutions experience higher rates of job and 

wage growth than comparable firms. 

The Department provides critical support to those industry partnerships to build talent 

pipelines that emphasize a number of strategies to meet employer needs. That includes 

supporting training that leads to a credential of value as identified by employers from 

Associate's degrees to other industry certifications or licenses. The Department also 

emphasizes in its investments the value of work-based learning such as apprenticeship, 

on-the-job training, internships and work experience, which can help overcome 

employer-specific skill and capability gaps. The Department also supports partnerships 

that help employers to upskill existing employees to move up the company ladder to or 

transition to new opportunities. 

All those strategies are featured within the Department's guidance to workforce system 

partners at the state and local level as well as supported by discretionary investments. 

For example, the TAACCCT grant program invested $1.9 billion in building the capacity 

of community colleges to better train Trade Adjustment Assistance eligible and other 

adults, which frequently benefits students of all ages. In addition, T AACCCT grantees 

have uploaded more than 6,000 resources to the Open Education Resources repository at 

SkillsCommons.org, which have been downloaded more than 135,000 times by 

community colleges and others for potential re-use, significantly leveraging this federal 

investment. 

2. I am concerned that key populations are facing significant barriers to participating in 

registered apprenticeships. Can you tell me more about what the Department is planning 

to do to expand apprenticeship programs to ensure that more women and people of color 

are recruited for and retained in registered apprenticeship programs? 

Response: The Department is committed to working with businesses, community 

colleges, and other stakeholders to equip America's job seekers and workers with the 

tools and skills they need to succeed in the 21st century labor market. For example, the 

Administration set a bold goal in 2014 to double and diversify Registered Apprenticeship 

by 2019. To accomplish this, the Department, as part of its initiative to expand 

Registered Apprenticeship, is promoting the inclusion of populations that have 

historically been underrepresented in apprenticeship programs- including women, 

people of color, individuals with disabilities, and others. 

The Department appreciates the Congress' bipartisan support for ApprenticeshipUSA, 

and we used a significant amount of the $90 million we received in the FY 2016 spending 

bill to expand and diversify Registered Apprenticeship. For example, we recently 

awarded $50.5 million in grant funds through the ApprentieeshipUSA State Expansion 

Initiative to support State efforts to strengthen the foundation for the expansion of quality 

Registered Apprenticeship programs. One of the three goals of this grant initiative is to 

significantly increase apprenticeship opportunities for all workers in America, 

particularly low-income individuals and underrepresented populations. The Department 

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also designated a portion of the ApprenticeshipUSA State Expansion grant funds to be 

used specifically for pilot projects to expand access to underrepresented populations. 

The Department also awarded four contracts for $5.8 million (total) to national 

intermediaries to work with DOL and State Apprenticeship Agencies to develop national 

or regional "opportunity partnerships." These opportunity partnerships will consist of 

Registered Apprenticeship sponsors committed to increasing gender, racial, ethnic and 

other demographic diversity and inclusion in apprenticeships. 

Additionally, the Department continues to learn lessons from our experience with 

Women in Apprenticeship and Non-traditional Occupations (WANTO) grants to 

community-based organizations to assist employers and labor unions in promoting the 

recruitment, training, employment and retention of women in apprenticeship and nontraditional occupations, and will incorporate these lessons in the administration of new 

Apprenticeship grant competitions. The Department made its latest W ANTO grant 

awards in June 2016, which will run over two years to support technical assistance efforts 

and outreach to Registered Apprenticeship programs. 

3. We all know how difficult it is for formerly incarcerated individuals to get back into the 

workforce. Everyone deserves a second chance in life, including those who have served 

their time and repaid their debt to society. The vast majority of individuals released from 

prison are trying their best to get back on their feet, become productive members of their 

communities and get back into the workforce. One significant barrier to finding 

meaningful employment is the "box" on employment applications asking applicants to 

disclose up front whether they have ever committed an offense. Can you tell us where the 

Department is on implementation of "ban-the-box" at both the federal and local level? 

Can you speak about the work you and the Department are doing to help these folks get 

back on their feet and into good jobs? 

Response: This Administration is committed to pursuing public policies that promote 

fairness and equality. On April29, 2016, the Office of Personnel Management issued a 

proposed rule effectively "banning the box" for a significant number of position in the 

Federal Government by delaying the point in the hiring process when agencies can 

inquire about an applicant's criminal records. Currently 24 states, including Ohio, and 

over !50 cities, including Cleveland, have enacted some form of"ban the box" law. 

Additionally there are several other ways the Administration and the Department are 

providing supportive tools and resources to help formerly incarcerated individuals get 

jobs so that their criminal record is not a barrier. 

The Department has funded three rounds of Linking Employment Activities Pre-Release 

(LEAP) grants. These grant funds support the development and implementation of 

specialized American Job Centers (AJCs) inside the correctional facility that directly link 

and bridge local inmates to the full service AJC within their community. Further, 

providing a direct "hand-off' for transitioning offenders to their community-based AJCs 

upon release, they will receive crucial follow-up and supportive services that will support 

their transition back into the workforce as well as their progress along their chosen career 

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pathways. By placing specialized AJCs inside of county, municipal, or regional jails and 

correctional facilities, soon to be released local inmates will receive services to prepare 

for employment and increase their opportunities for successful reentry into their home 

communities. This program will build partnerships between local correctional systems 

and the local workforce systems and link transitioning offenders to a range of 

community-based workforce services that lead to successful employment 

In 2012, the Equal Employment Opportunity Commission issued guidance on the 

appropriate use of arrest and conviction records in employment decisions under Title VII 

of the Civil Rights Act of 1964. Subsequently, DOL issued a Training and Employment 

Guidance Letter (TEGL 31-ll) to state and local public workforce administrators. This 

guidance provides explicit steps that the public workforce system including One Stop 

Career Centers- should take to ensure compliance with federal EEO law and other 

nondiscrimination laws, to educate their employer customers, and to promote 

employment opportunities for people with criminal records. DOL also issued guidance to 

provide federal contractors under OFCCP'sjurisdiction with information on 

circumstances in which exclusions of applicants or employees based on their criminal 

records may violate existing nondiscrimination obligations, referencing both the EEOC 

guidance and TEGL 31-ll. 

In addition, DOL and the Department of Justice have begun development of a National 

Clean Slate Clearinghouse in the near future to provide technical assistance to help with 

record-cleaning, expungement, and other means of mitigating the effects of criminal 

records. The Clearinghouse will: (l) host and update a national website that provides, 

among other things, state-by-state information on sealing, expungement, and other related 

legal services that lessen the negative impact of having juvenile and criminal records; and 

(2) develop tools and provide technical assistance to reentry service providers and legal 

aid organizations on how to use and expand access to sealing, expungement, and other 

legal services. 

The Department also recognizes that occupational licensing can limit opportunities for 

those with criminal records to get work. In half of the states3

, applicants can be denied a 

license due to any kind of criminal conviction, regardless of whether it is relevant to the 

license sought or how long ago it occurred. To address this challenge, the Department is 

making $7.5 million in grant funding available for intermediaries leading state consortia 

to review and analyze occupational licensing requirements and develop recommendations 

to make progress toward identifying licensing criteria to ensure that existing and new 

licensing requirements are not overly broad or create unnecessary barriers to labor market 

entry. 

We continue to look for ways to better connect reintegrating individuals with job 

opportunities and the support to succeed in the workforce. 

3 Occupational Licensing Framework for Policy Makers Report of 2015, Department of the Treasury, Office of 

Economic Policy, the Council of Economic Advisers, and the Department of Labor. 

https://www.whitehouse.gov/sites/default/files/docs/licensing report final nonembargo.pdf 

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Rep. Bonamici (OR) 

I. Mr. Secretary, a business owner in my district has brought to my attention that a 

particular OSHA regulation on flammable and combustible liquids in container and 

portable tank storage is egregiously outdated. The section is based on a version of the 

National Fire Protection Association fire code published in 1969 that has since separately 

been updated numerous times with the most recent edition in 2015. Several major fires 

have resulted in improper storage of ignitable liquids. In June of2015, a letter was sent to 

Dr. Michaels from a group of interested parties named PackSafe regarding the serious 

safety issue concerning this regulation, OSHA 29 C.F.R. 1910.106 based on the 1969 

version. In response, although the Department acknowledged the outdated regulation, 

they did not provide a plan to update it. OSHA's mission is to ensure workers are safe. 

To meet this mission, it is important that businesses that use containers to store their 

products are following the best available science to ensure the safety of life and property. 

How does OSHA plan to update the references in the regulations to ensure a safe and 

healthy workplace for workers? What do you need from Congress to make sure this 

regulation can be updated? 

Response: OSHA has considered updating §1910. 106 on several occasions. A proposed 

revision to the rule was included in the Unified Regulatory Agenda from 1996 to 2001, 

when it was removed due to resource constraints. To revise the standard, OSHA must 

consider not only the specific provisions relating to container and portable tank storage, 

but also other related requirements in § 1910.106. By statute, OSHA must demonstrate 

that any revisions are necessary to address a significant risk of harm and that they are 

technologically and economically feasible to implement. Meeting these and other legal 

requirements in a rulemaking involves a significant expenditure of agency resources and 

time. OSHA must balance its regulatory priorities to make the most effective use of 

limited resources while maximizing worker protection. Given these constraints, the 

agency has no current plan to update §1910.106. 

OSHA recognizes that § 1910.106 may not address some hazards addressed in the 

updated versions of the NFPA 30 standards (such as hazards of uncontrollable fires from 

breached containers storing combustible and flammable liquids). However, in some 

situations where hazards are not covered by the current standard, OSHA may enforce 

Section 5(a)(l) ofthe OSH Act, the "General Duty Clause." The General Duty Clause 

requires an employer to furnish to its employees a place of employment which is "free 

from recognized hazards that are causing or arc likely to cause death or serious physical 

harm to his employees .... " 

Finally, regarding your question about how Congress can help to ensure update of this 

regulation, OSHA cannot, on its own, shortcut or bypass the procedural and substantive 

requirements applicable to agency rulemaking. Congress, however, may direct the 

agency to take regulatory action without regard to these constraints. OSHA staff are 

available for further discussions if appropriate. 

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Insert offset folio 80 here 99444.080

2. Unemployment benefits serve a critical role in helping people while they are seeking 

work. I am concerned about the unemployment benefit gap facing many school 

employees across the country. In my home state of Oregon, our legislature recently 

passed a bipartisan, narrowly-tailored solution to this challenge with support from both 

the school employee union and the school boards association (SB 1534,2016 Oregon 

Session). The bill aims to fix the benefit gap facing approximately 45 "non-professional" 

school employees in Oregon each year who leave their job for unavoidable reasons and 

whose unemployment benefits are lost when schools are on break. Custodians should not 

lose their unemployment benefits simply because they work in a school rather than an 

office building. 

There is agreement in Oregon at the state and local level to keep this narrow group of 

former school employees from losing their benefits. Unfortunately, despite the Oregon 

legislation, the agreement among stakeholders and the Department's flexibility for "nonprofessional" employees, the Department has stated that this solution is unacceptable. 

The Department is provided with flexibility over this class of workers; please explain 

why a narrowly-drafted law, like Oregon's, is problematic. Are there alternative ways to 

address this group of employees so their benefits do not expire? The unemployment 

insurance program is premised on a partnership between the state and federal 

governments, so please explain specifically what steps the Department is taking to assist 

states in their efforts to design and implement programs that best fit their needs and 

comply with federal law. 

Response: The Department supports Oregon's efforts to ensure that unemployment 

benefits are available to workers who lose their job through no fault of their own. Access 

to benefits is a high priority for the Administration. The Department routinely works 

collaboratively with states as they are shaping their Unemployment Insurance (UI) laws 

and works to provide alternative solutions when possible. Our previous discussions with 

state agency staff about SB 1534 reflect longstanding interpretations of specific and 

complex provisions in federal law that apply to individuals who work for educational 

institutions. We appreciate you raising this issue and will keep in mind your policy 

concerns as we move forward. 

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[Whereupon, at 11:59 a.m., the Committee was adjourned.] 

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