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REVIEWING THE PRESIDENT’S FISCAL 

YEAR 2016 BUDGET PROPOSAL 

FOR THE DEPARTMENT OF LABOR 

HEARING 

BEFORE THE

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, MARCH 18, 2015 

Serial No. 114–6 

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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C O N T E N T S 

Page 

Hearing held on March 18, 2015 ............................................................................ 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: 

Kilili Camacho Sablan, Hon. Gregorio, a Representative in Congress from 

Northern Mariana Islands: 

Statement for the record ........................................................................... 66 

Chairman Kline: 

Letter for the record from ACCI .............................................................. 64 

Questions submitted for the record by: 

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

of California ............................................................................................ 77 

Chairman Kline ......................................................................................... 71 

Rokita, Hon. Todd, a Representative in Congress from the State 

of Indiana ............................................................................................... 76 

Messer, Hon. Luke, a Representative in Congress from the State 

of Indiana ............................................................................................... 77 

Polis, Hon. Jared, a Representative in Congress from the State of 

Colorado .................................................................................................. 78 

Walberg, Michigan, Hon. Tim, a Representative in Congress from 

the State of Michigan ............................................................................ 76 

Secretary Perez: 

Response to questions submitted for the record ..................................... 79 

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(1) 

REVIEWING THE PRESIDENT’S FISCAL YEAR 

2016 BUDGET PROPOSAL FOR THE 

DEPARTMENT OF LABOR 

Wednesday, March 18, 2015 

U.S. House of Representatives 

Committee on Education and the Workforce 

Washington, D.C. 

The committee met, pursuant to call, at 10:01 a.m., in Room 

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

of the committee] presiding. 

Present: Representatives Kline, Foxx, Roe, Thompson, Walberg, 

Salmon, Guthrie, Messer, Byrne, Carter, Curbelo, Stefanik, Allen, 

Scott, Davis, Courtney, Polis, Wilson of Florida, Bonamici, Takano, 

Jeffries, Clark, and DeSaulnier. 

Staff present: Lauren Aronson, Press Secretary; Andrew 

Banducci, Professional Staff Member; Janelle Belland, Coalitions 

and Members Services Coordinator; Ed Gilroy, Director of Workforce Policy; Christie Herman, Professional Staff Member; Marvin 

Kaplan, Workforce Policy Counsel; Nancy Locke, Chief Clerk; John 

Martin, Professional Staff Member; Zachary McHenry, Legislative 

Assistant; Daniel Murner, Deputy Press Secretary; Michelle 

Neblett, Professional Staff Member; Brian Newell, Communications 

Director; Krisann Pearce, General Counsel; Molly McLaughlin 

Salmi, Deputy Director of Workforce Policy; Emily Slack, Professional Staff Member; Alissa Strawcutter, Deputy Clerk; Juliane 

Sullivan, Staff Director; Loren Sweatt, Senior Policy Advisor; Alexa 

Turner, Legislative Assistant; Joseph Wheeler, Professional Staff 

Member; Tylease Alli, Minority Clerk/Intern and Fellow Coordinator; Austin Barbera, Minority Staff Assistant; Denise Forte, Minority Staff Director; Melissa Greenberg, Minority Labor Policy Associate; Carolyn Hughes, Minority Senior Labor Policy Advisor; Eunice Ikene, Minority Labor Policy Associate; Brian Kennedy, Minority General Counsel; Richard Miller, Minority Senior Labor Policy 

Advisor; Amy Peake, Minority Labor Policy Advisor; Kiara Pesante, 

Minority Communications Director; and Veronique Pluviose, Minority Civil Rights Counsel. 

Chairman KLINE. A quorum being present, the Committee on 

Education and the Workforce will come to order. 

Well, good morning, Secretary Perez. Welcome back to the Education and Workforce Committee. Thank you for joining us for this 

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2 

hearing on the President’s Fiscal Year 2016 budget proposal. We 

have much to discuss in a short period of time. 

The American people have been through a lot since the recession 

began more than seven years ago: millions of jobs destroyed, household incomes plummeted, hard-earned savings wiped out, hopes 

and dreams shattered. We all welcome the progress seen in recent 

months, but make no mistake, we still have a long way to go before 

every American is able to get back on a path to a lifetime of success. 

Right now, roughly 15 million workers are in desperate need of 

full-time jobs, and that does not include the millions of individuals 

so discouraged by meager job prospects that they have simply 

dropped out of the workforce. Meanwhile, working families face 

high health care costs and stagnant wages, and they are struggling 

to send their kids to college and plan for retirement. 

As policymakers, we have an obligation to these men and women 

to do better. They are not willing to accept a new normal of anemic 

growth and flat incomes. Neither should we. 

Yet, that is precisely what the President’s budget would force us 

to do. As is often said, a budget reflects priorities, and it is clear 

that the President’s priorities continue to be more spending, more 

taxes, and more debt. 

The facts speak for themselves. The President’s budget includes 

$547 billion in new spending and a $1.8 trillion tax increase—$1.8 

trillion. 

Despite taking more money from hard-working Americans, the 

President’s budget never balances—never balances. In fact, over 

the next 10 years it would add $6.7 trillion to the national debt. 

This is not a roadmap leading to a stronger middle class, but a 

blueprint for more government at the expense of the middle class. 

This flawed approach is reflected in the President’s budget for 

the Department of Labor. The administration is requesting an 11 

percent increase in discretionary spending for the Department and 

an astounding $41.5 billion in new mandatory spending. 

Will these additional taxpayer dollars be spent reducing regulatory burdens, streamlining the bureaucracy, and encouraging better enforcement of Federal laws? Not likely. 

Instead, the new money will be spent imposing more rules on 

more Americans, including workers employed by Federal contractors, the elderly, and those with disabilities who rely on in-home 

companion care, and men and women who need help saving for retirement. It will also be spent creating new programs and layers 

of bureaucracy. 

For example, we recently passed bipartisan legislation streamlining the workforce investment system, and already the President 

is demanding five new workforce development programs. Congress 

made it easier for job seekers to acquire new skills and get back 

to work, yet the President is determined to make a maze of programs more complex and confusing. 

The President’s budget is one of misplaced priorities and missed 

opportunities. We can invest in policies and programs that will 

make a real difference in the lives of countless Americans without 

growing the size, cost, and reach of the Federal Government. MidCEWDOCROOM with DISTILLER

3 

dle-class families are being squeezed, and the last thing we should 

do is double down on failed policies. 

We can do better and we know how to do better. Last year, Republicans and Democrats came together to enact meaningful job 

training legislation that will put Americans back to work, and we 

passed important reforms to strengthen the financial security of 

workers and retirees in the multiemployer pension system. 

Secretary Perez, I want to take a moment here to thank you for 

your work in that effort. As you know, this was truly a bipartisan 

effort. It was crucially important to the futures of literally millions 

of Americans, where we had to fix those multiemployer pension 

plans. 

And you were absolutely true to your word. You said you would 

step in and help us get some Senate Democrats and, by golly, you 

did. So that was very, very important work, and I want to thank 

you for your work there. 

It is time to find other areas of agreement, like modernizing an 

outdated multiemployer pension system—still more work to be 

done on that multiemployer pension system—simplifying the regulations surrounding Federal wage and hour law, and opening new 

markets for American-made goods. 

Let’s ensure the people’s priorities are our priorities by rejecting 

the President’s budget and embracing pro-growth reforms that help 

every American enjoy a lifetime of opportunity and success. 

I will now recognize the committee’s ranking member, Mr. Scott, 

for his opening remarks. 

[The statement of Chairman Kline follows:] 

Prepared Statement of Hon. John Kline, Chairman 

Committee on Education and the Workforce 

Good morning, Secretary Perez, and welcome back to the Education and the 

Workforce Committee. Thank you for joining us for this hearing on the president’s 

fiscal year 2016 budget proposal. We have much to discuss in a short period of time, 

and I intend to keep my opening remarks brief so that each member may have an 

opportunity to ask questions. 

The American people have been through a lot since the recession began more than 

seven years ago. Millions of jobs destroyed. Household incomes plummeted. Hardearned savings wiped out. Hopes and dreams shattered. We all welcome the 

progress seen in recent months, but make no mistake, we still have a long way to 

go before every American is able to get back on a path to a lifetime of success. 

Right now, roughly 15 million workers are in desperate need of full-time jobs, and 

that does not include the millions of individuals so discouraged by meager job prospects that they have simply dropped out of the workforce. Meanwhile, working families face high health care costs and stagnant wages, and they are struggling to send 

their kids to college and plan for retirement. 

As policymakers, we have an obligation to these men and women to do better. 

They are not willing to accept a new normal of anemic growth and flat incomes. Neither should we, yet that is precisely what the president’s budget would force us to 

do. As is often said, a budget reflects priorities, and it is clear the president’s priorities continue to be more spending, more taxes, and more debt. 

The facts speak for themselves. The president’s budget includes $547 billion in 

new spending and a $1.8 trillion tax increase. Despite taking more money from 

hard-working Americans, the president’s budget never balances. In fact, over the 

next 10 years, it would add $6.7 trillion to the national debt. This is not a roadmap 

leading to a stronger middle-class, but a blueprint for more government at the expense of the middle-class. 

This flawed approach is reflected in the president’s budget for the Department of 

Labor. The administration is requesting an 11 percent increase in discretionary 

spending for the department and an astounding $41.5 billion in new mandatory 

spending. Will these additional taxpayer dollars be spent reducing regulatory burCEWDOCROOM with DISTILLER

4 

dens, streamlining the bureaucracy, and encouraging better enforcement of federal 

laws? Not likely. 

Instead, the new money will be spent imposing more rules on more Americans, 

including workers employed by federal contractors, the elderly and those with disabilities who rely 

on in-home companion care, and men and women who need help saving for retirement. It will also be spent creating new programs and layers of bureaucracy. 

For example, we recently passed bipartisan legislation streamlining the workforce 

investment system, and already the president is demanding five new workforce development programs. Congress made it easier for job seekers to acquire new skills 

and get back to work, yet the president is determined to make a maze of programs 

more complex and confusing. 

The president’s budget is one of misplaced priorities and missed opportunities. We 

can invest in policies and programs that will make a real difference in the lives of 

countless Americans, without growing the size, cost, and reach of the federal government. Middle-class families are being squeezed, and the last thing we should do is 

double-down on failed policies. 

We can do better and we know how to do better. Last year, Republicans and 

Democrats came together to enact meaningful job training legislation that will put 

Americans back to work, and we passed important reforms to strengthen the financial security of workers and retirees in the multiemployer pension system. Secretary 

Perez, thank you for your support as Congress worked on these bipartisan efforts. 

It is time to find other areas of agreement, like modernizing an outdated multiemployer pension system, simplifying the regulations surrounding federal wage and 

hour law, and opening new markets for American-made goods. Let’s ensure the people’s priorities are our priorities by rejecting the president’s budget and embracing 

pro-growth reforms that help every American enjoy a lifetime of opportunity and 

success. 

I will now recognize the Committee’s ranking member, Congressman Scott, for his 

opening remarks. 

Mr. SCOTT. Thank you, Mr. Chairman. 

And thank you, Mr. Secretary, for being with us this morning. 

The United States has emerged from the depths of the Great Depression—from a Great Recession, and job creation has resumed at 

a consistent but not robust pace. The question before us is whether 

we will choose to pursue prosperity economics or austerity economics. 

What will the new jobs look like? Will they be living-wage jobs 

or poverty-wage jobs? Will our priorities concentrate the wealth in 

the hands of the top 1 percent, or will our policies grow and 

strengthen the middle class? 

The choices that 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 some Republicans agree that 

making mindless cuts mandated by sequestration would be a bad 

policy and would not benefit our economy or our national defense. 

Now, cuts are fine in the abstract, but when you start naming 

them then it becomes clear how bad this policy actually is. As we 

are extending tax cuts for the wealthiest Americans, we are also 

robbing the country of resources needed for education, infrastructure, and research. 

Keeping the sequester means Federal support for pre-K to 12th 

grade would be less than we spent back in the year 2000. On the 

other hand, if the automatic spending cuts required by sequestration were cancelled, employment would be higher by approximately 

300,000 to 1.6 million jobs, according to last year’s CBO analysis. 

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5 

The Department of Labor’s budget comes to us at a time when 

the private sector has experienced 60 consecutive months of job 

growth, the longest uninterrupted stretch of private job growth on 

record. The economy has created over 200,000 private sector jobs 

for 12 consecutive months, a growth unmatched since the 1970s. 

All of these statistics clearly show that we are on the right track, 

but despite this progress, some 17.5 million Americans remain unemployed or working part time when they are seeking full-time 

work. Meanwhile, the inequality in this country has grown. Most 

new jobs are low-wage jobs, and the fruits of the economic recovery 

have flowed almost exclusively to the top 1 percent, who captured 

95 percent of the income gained through the first three years of the 

recovery. 

Department of Labor’s priorities and budget request seek to narrow this extreme and growing economic inequality in our country 

by closing the pay gap between men and women. The link between 

productivity and wages in our economy has been broken for Americans for the past generation. 

We have a chart that shows that up until—from 1973 to 2013, 

hourly compensation for a typical worker rose about 9 percent in 

real terms while productivity increased 74 percent. This means 

that workers have been producing far more than they receive in 

their paychecks and the benefit packages from their employers. 

Prior to that time frame, as productivity went up wages were going 

up. 

Standard and Poor’s, one of the companies that rates the creditworthiness of the government and corporate debt for Wall Street, 

has studied whether the U.S. economy would be better off with a 

narrower income gap. Standard and Poor’s has 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 economic growth. 

The next chart we have illustrates the extraordinary rapid 

growth of annual wages for the top 1 percent compared to everybody else. Top 1 percent wages grew 138 percent, while the bottom 

90 percent grew just 15 percent, from 1979 to 2013. 

What we are discussing today is whether we need to change the 

policies that caused the majority of the gains of our economy to 

concentrate disproportionately at the top on the premise that it 

eventually trickles down to the rest of us, or whether we need to 

adopt policies and budgeting that will make public investments in 

training, infrastructure, and research in order to produce sustainable growth. 

We know that there are concrete steps that we can take in order 

to move in the right direction, which should be the national policy 

that anybody working full time should be able to earn enough to 

be above the poverty line. A raise to the minimum wage would do 

this, and it is the right thing to do. The minimum wage adjusted 

for inflation would be over $18 an hour, had it kept pace with productivity. 

Another concrete step we can take to protect retirees and their 

hard-earned income is to ensure that fellow Americans can rest 

with dignity after a lifetime of hard work. While still on the job, 

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6 

we need to make sure workers enjoy protections they need to stay 

safe and healthy. 

Economic growth and strong regulatory protections are not mutually exclusive. And let’s not forget that it was the absence of regulation that allowed Wall Street to run amuck and cause the credit 

freeze in 2008 and destroyed millions of jobs. 

And finally, I know that the secretary remains focused on what 

works to prepare our nation’s workforce for the jobs of today and, 

more importantly, the jobs of the future. These priorities are reflected through the Department’s budget, which focuses on expanding the middle-class in many ways, including funding summer jobs, 

opportunities for disconnected youth, apprenticeships, and programs that expand access to in-demand jobs. 

So, Mr. Secretary, we look forward to learning more about your 

department’s agenda and your vision for a more prosperous economy and a more prosperous middle-class. 

Thank you, Mr. Chairman. I yield back. 

[The statement of Mr. Scott follows:] 

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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. 

As I said, Mr. Secretary, welcome back. I think you are well 

known to all members of this committee. 

I was looking here and it says that you were sworn in as the 

26th U.S. Secretary of Labor on July 13, 2013. The time is flying 

by. 

And prior to this confirmation, Secretary Perez served as assistant attorney general for civil rights at the U.S. Department of Justice and as the secretary of Maryland’s Department of Labor, Licensing, and Regulation, and those are just two of his many assignments in a very distinguished career. 

As is now the practice House-wide, I will ask our witness to 

stand and raise your right hand. 

[Witness sworn.] 

Let the record reflect the witness answered in the affirmative. 

And I am sure ‘‘absolutely’’ is exactly the right response, Mr. Secretary. 

Before I recognize you to provide your testimony let me briefly 

remind you of our lighting system. And I know you know very well 

about the green, yellow, and red lights; this is more for my colleagues than for you. 

I will be very, very tolerant for your opening remarks and your 

responses. We really do want to hear what you have to say. As disappointed as many of us may be with the President’s budget, we 

nevertheless are really looking forward to your testimony. 

But, I will remind my colleagues that when we get to questions 

and answers, I will be strictly adhering to the five-minute rule unless we actually reduce the time. We have a hard stop for this 

hearing at 12 o’clock. The secretary has to leave. 

So please, my colleagues, be aware of that and be thoughtful of 

your colleagues. 

Mr. Secretary, you are recognized. 

TESTIMONY OF HON. THOMAS E. PEREZ, SECRETARY, U.S. 

DEPARTMENT OF LABOR, WASHINGTON, D.C. 

Secretary PEREZ. Good morning. And thank you, Mr. Chairman. 

And thank you, Ranking Member Scott, and all the members of 

the committee. 

It is wonderful to be back with you. And as you correctly point 

out, we have been able to find common ground on a lot of areas 

of critical importance to this nation, and I look forward to continuing that effort moving forward. 

I appear today with a great sense of optimism about the direction 

of our economy and the role the Department of Labor can play in 

sustaining and accelerating this recovery. We have come a long 

way since the Great Recession. 

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17 

As has been noted, private employers have now added 12 million 

jobs over the last 60 months. That is 60 consecutive months of private sector job growth. Last year was the best year we had since 

the late 1990s. 

The unemployment rate is now 5.5 percent, its lowest since the 

spring of 2008. And especially when we look at the last couple 

years, not only the quantity of jobs, but the quality of jobs are moving in the right direction. 

So without question, the wind is at our back. But we also know 

that it is not time to spike the football because there are many 

pieces of unfinished business, including putting more people back 

to work, growing real wages to higher levels, and providing continued help for the long-term unemployed. 

We need to make sure that the economic progress that we are 

seeing results in shared prosperity for all, and that is exactly what 

the President’s budget is seeking to do: to create an economy that 

works for everyone—an economy based on broad prosperity. And 

that prosperity and that vision starts with helping people get the 

skills and training they need to succeed in 21st century jobs. 

Each year, on average, our network of roughly 2,500 American 

Job Centers serves about 14 million people, including a million veterans, through our core workforce programs. And we are serving 

them well. Fifty-five to 60 percent of those who come to AJCs without a job are working within three months of leaving our programs. 

The outcomes are even better for those who get training through 

the workforce system. About 80 percent of them find work within 

three months. 

In 2014, we put roughly $1 billion in job-driven grant money on 

the street, all of it designed to help people upskill in a way that 

helps them move into jobs that are available now or will soon be 

available. We are doing more to coordinate and integrate our workforce programs with those of other Federal agencies. We are imploding stovepipes to make our government-wide efforts that much 

more efficient and effective. 

Last July, Congress passed in overwhelmingly bipartisan fashion 

the Workforce Innovation and Opportunity Act, which is really the 

most significant reform of the workforce system in 15 years. 

I want to again thank Chairman Kline, Congresswoman Foxx, 

and all the members of this committee—Ranking Member Scott— 

for your efforts and leadership. It is further proof that cultivating 

our human capital is not a Democratic idea or a Republican idea, 

but it is simply a good idea. 

And I know that many stakeholders are anxiously awaiting our 

proposed WIOA implementation rules. They are at the Federal 

Register and we expect to have them published very soon, and we 

look forward to people’s input on those proposed rules. It has been 

a remarkable labor on behalf of so many people at the Department 

of Labor. 

This work will allow us to continue the transformation of the 

workforce system to prepare people for the jobs of tomorrow. It 

helps us to continue building what I call the skills superhighway, 

with on-ramps and off-ramps, where people can pick up skills and 

credentials on their way to the destination, which is a middle-class 

job. 

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18 

And with WIOA we are further strengthening our job-driven approach to training, building unprecedented partnerships with employers, connecting businesses that want to grow with workers that 

want to punch their ticket to the middle class. 

We are match.com, Mr. Chairman. That is what we do at the Department of Labor. We connect job seekers who want to punch 

their ticket to the middle class with businesses who want to grow, 

using the secret sauce of training, community college, other partnerships, your great offices, and that is why we are moving in the 

right direction. 

And one of the things that WIOA is going to help promote is one 

of the most effective strategies I have seen for workforce, and I 

have chatted with Congresswoman Foxx a lot about this, and that 

is apprenticeship. Despite the effectiveness of apprenticeship, for 

all too long I believe that we have devalued apprenticeship in this 

country, especially relative to our global competitors. 

And the fact of the matter is you don’t necessarily need a fouryear degree to punch your ticket to the middle class. I refer to apprenticeship as the ‘‘other college,’’ except without the debt. And 

later this year we are going to award $100 million in American apprenticeship grants, which are designed to kick-start new apprenticeship programs and take successful models to scale. 

With these apprenticeships, we are looking to expand not simply 

in the traditional skilled trades, which have great application, but 

in emerging fields such as I.T., cyber security, health care, logistics, 

and the like. So we will continue that work, and I think that is 

work that we can continue on a bipartisan basis. 

Even as the economy has recovered impressively, we still have a 

lot of work to do lifting wages, and to create that opportunity and 

shared prosperity I believe it is more important than ever that we 

address wages in a number of different ways, starting with raising 

the minimum wage. 

Public opinion is strongly in favor of it. Last November, red 

states and blue states, voters expressed very strong support for increasing the minimum wage. 

Nobody who works a full-time job should have to live in poverty. 

And we are continuing to work through executive action and 

through work with our state and local partners to raise the minimum wage, but still, there is no substitute for Federal legislation 

that would give low-wage workers in all 50 states a hard-earned, 

well-deserved raise. 

We are also working to modernize the nation’s rules on overtime, 

which haven’t kept up with inflation or with changes in the economy. Too many people are getting a raw deal, working 60-, 70-hour 

weeks and not getting that time-and-a-half. In the coming months 

we will release a new overtime proposal, one that reflects broad 

input from a range of stakeholders, and we look forward to hearing 

comments from all key stakeholders. 

We are also charged at the DOL with protecting workers on a 

number of fronts. We enforce the nation’s wage and hour laws, and 

we do so in the most strategic way possible, combining aggressive 

enforcement with compliance assistance and aggressive education. 

To ensure that we are using our resources efficiently, we use 

data to identify those workers who are most vulnerable and emCEWDOCROOM with DISTILLER

19 

ployers most likely to be violating the law. And the results have 

been very, very telling. Since Fiscal Year 2009, we have recovered 

a total of over $1.3 billion for more than 1.5 million workers. 

Our Occupational Safety and Health Administration and our 

Mine Safety and Health Administration continue their critical work 

to make sure we prevent workplace injuries, illnesses, and fatalities. One of the basic rights that every worker has is that when 

they go to work in the morning they ought to come home safe and 

sound, and that is exactly what we do through the work of OSHA 

and MSHA. 

Helping people secure a dignified retirement after a lifetime of 

hard work is a critical element of our mission. And toward that 

end, we are working on an updated regulation to ensure that financial advisors provide retirement advice that is in their client’s best 

interest. 

The biggest decisions in life fall into one of three categories, I 

have often found: medical, legal, and financial. Your doctor and 

your lawyer are obligated to give you informed, unbiased advice, to 

look out for your interests. You should have the right to expect the 

same from the professional whom you have trusted with your retirement planning. 

Many financial advisors already have taken this oath to look out 

for their customers first, and we think every financial advisor can 

and should do this. And we look forward to hearing input from everybody—continued input—when we put our rule out. 

In conclusion, thanks to the resilience of our workers, the ingenuity of our businesses, leadership from every level of government, 

including this committee. We have emerged successfully from the 

worst times of our economic crisis of our lifetime. But we still have 

a lot of work to do, and we can’t settle for an economy that simply 

provides an opportunity for a few. 

Shared prosperity is, indeed, our north star, and America’s promise has always been that everyone, through hard work and responsibility, should have an opportunity to succeed. Keeping that promise is what gets me out of bed every morning and what makes me 

love my job. 

And with that, Mr. Chairman, I look forward to hearing and answering any questions that you and members of the committee 

have. Thank you very much. 

[The statement of Secretary Perez follows:] 

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Chairman KLINE. Thank you very much, Mr. Secretary. I will 

start questioning. 

We have already talked in opening comments and brief discussion before the hearing started about the Multiemployer Pension 

Reform Act and the work that was taken to get that done. You are 

the chairman of the Pension Benefit Guaranty Corporation’s Board 

of Directors, in your role as Secretary of Labor, and so you are 

watching the health and welfare of the PBGC as well as looking 

at the health and welfare of these retirement plans. 

Based on recent reports from the PBGC and the Congressional 

Budget Office, even after the enactment of the Multiemployer Pension Reform Act, further reform in this area is needed to strengthen and modernize the system, and we have talked some. Can you 

take a minute or two here and tell us what you think will happen 

if we are unsuccessful in our efforts to modernize the system and 

put PBGC on sounder financial footing? 

Secretary PEREZ. There is indeed, I think, a multiemployer crisis, 

and I have had many conversations with you and with Republican 

and Democratic members. And time is not our ally. 

As you and I have discussed, we have what I call about four options: We have a bad option; we have a very bad option; we have 

a very, very bad option; and then we have the cataclysmically bad 

option. And as time goes by, the bad option gets removed from the 

table and we have a discussion about whether we should do the 

very bad option or the very, very bad option or the cataclysmically 

bad option. 

And I appreciate the actions that were taken last year. You and 

I have both had discussions about the fact that there is still more 

work to do, and we look forward to working in a bipartisan fashion 

and in an inclusive fashion to make sure we hear the views of all 

stakeholders, because as the chair of the PBGC I take that responsibility seriously, and I think, working together, we can address 

these issues in a way that is fair to everybody. 

Chairman KLINE. Okay. I think that, I mean, we took some steps 

in the Multiemployer Pension Reform Act to increase premiums for 

the PBGC and put it on sounder footing, but it is this report from 

the CBO and the PBGC that—pointing out how still deep in the 

hole they are. 

Secretary PEREZ. There is more work to do. It is undeniable that 

there is more work to do, Mr. Chairman. 

Chairman KLINE. Okay. Thank you. 

Let me move to something else you and I have talked about. It 

is not fair to everybody because you and I have had some of these 

discussions, so the advantage for you, Mr. Secretary, is you have 

had a preview. 

The disadvantage is I still don’t have the answer I like. We held 

a hearing—the committee held a hearing on the so-called Fair Pay 

and Safe Workplaces Executive Order, which some of us have 

taken to calling the Blacklisting Executive Order. We heard from 

witnesses who raised really serious questions and concerns about 

the proposal. 

Witnesses raised legitimate questions about the need for such a 

proposal since there is already in place longstanding, well-defined 

procedures for evaluating Federal contractors and, if necessary, 

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preventing them from getting Federal contracts. We also heard concerns about the process—about due process, and about the process, 

and unreasonable burdens and how this would even work. 

And again, you and I had a discussion. This is not entirely in 

your basket, but there is a substantial piece here. What sort of 

analysis has the Department of Labor done to ensure that this new 

bureaucracy doesn’t overburden contractors and disrupt the whole 

Federal procurement system? 

Secretary PEREZ. The executive order that you are referring to is 

predicated on the notion that procurement is a privilege, not a 

right. And if you are engaged in bad behavior, you should forfeit 

that privilege to do business with the Federal Government. 

The vast majority of contractors comply with the law, and so, as 

I understand the process that will be underway, you will be required to answer a question, ‘‘Do you have compliance issues in the 

area of labor laws and other related laws that are outlined in the 

executive order?’’ For the vast majority of contractors the answer 

will be no, so their responsibility will be to check a box. 

For others, there a whole scheme of compliance, and the goal 

here is to actually promote compliance with the law, as opposed to 

do the gotcha game. And that is why these compliance officers are, 

I think, a very important part of the process moving forward. And 

part of the role at the Department of Labor is not only to have a 

cadre in the Department of Labor—but to work across the Federal 

Government to ensure that compliance. 

Chairman KLINE. Mr. Secretary, I am not sure that is the level 

of analysis I was looking for, because I really do have some great 

concerns about how this is going to work, where you have contractors and subcontractors, and they have got subcontractors. A contractor has to be responsible for the performance of the subcontractor. I just think it is very, very complex, and I hope that the 

Department—your department—will look into the details of this. 

Secretary PEREZ. Well— 

Chairman KLINE. My time has, indeed, expired. 

And I will yield to Mr. Scott for five minutes. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Mr. Secretary, can you—one of these days we are going to get 

around to comprehensive immigration reform. Meanwhile, can you 

tell us what happened to the H–2B program and what you are 

going to do about it? 

Secretary PEREZ. Sure. On March the 4th a Federal court in 

Florida ruled that we lacked the authority at the Department of 

Labor to issue regulations in the H–2B program. 

As someone who was a former labor secretary in Maryland, I am 

very familiar with the H–2B program. It has been an important 

part for folks working on the eastern shore. 

And what we did was we have immediately taken steps working 

with the Department of Homeland Security, and we have done 

three things. We filed a motion day before yesterday to stay the 

proceeding—to stay the court’s ruling so that we can permit those 

who have already been in the application process to continue to 

apply—because every day that the program is shut down is a day 

that can have significant economic harm. 

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We have also made a commitment to putting in place an interim 

final rule by April the 30th, and then once that rule comes out, 

then that would enable the program to operate. And the ‘‘we’’ in 

that sentence is it would be a joint rule with the Department of 

Homeland Security and the Department of Labor. 

And then thirdly, the Department of Homeland Security has, as 

of, I believe, yesterday, reopened their application process, because 

they had a lot of applications that we had approved, but then when 

the court shut it down they had to shut down, as well. And yesterday they reopened so that there are roughly 1,000 or 2,000 applications that were stuck that we hope to unstick. 

So this has been subject of litigation since about 2008. H–2B has 

been a lawyers’ full employment act. Our goal is to try to fix the 

problem once and for all. We are very mindful of the time sensitivity and we think that these actions will enable us to get a program up and running as soon as possible. 

Mr. SCOTT. Thank you. 

Can you mention what the research shows about minimum wage, 

in terms of not only getting people above the poverty level, but also 

the effect on the economy and what research shows about potential 

job loss? 

Secretary PEREZ. Well, the, you know, minimum wage—you 

know, when people get an increase in the minimum wage, what 

they do is they spend it. It is very much akin to what Henry Ford 

did over 100 years ago when he doubled the wages of people on the 

assembly line. He did that for two reasons: He had over 300 percent attrition; and he understood that when people make more 

money, they spend it in their communities and it creates a virtuous 

cycle. 

There are literally hundreds of studies that document the issue 

of minimum wage and job loss, and the overwhelming weight of the 

evidence demonstrates that when you have reasonable increases in 

the minimum wage, such as the bill that was proposed in the last 

Congress, you have literally little or no effect, and at the same 

time, you are helping millions of workers who can get above the 

poverty line. 

Mr. SCOTT. Thank you. 

What does your budget do to help at-risk and disconnected youth, 

particularly during the summer? 

Secretary PEREZ. We have several areas of focus. Our WIOA 

youth formula—we are requesting $873.4 million, and under the 

new WIOA bill, 75 percent of these funds must be spent on outof-school youth. 

Our request for YouthBuild is $84.5 million. YouthBuild is critical. 

Obviously Job Corps is a huge asset for what we do for at-risk 

young adults. Our Reintegration of Ex-Offenders serves both adults 

and youth. And WIA formula dollars can be used in the summer 

job context. 

So that is an area where local workforce boards can make those 

decisions and help for the summer job programs. 

Mr. SCOTT. Can you say a word about what sequestration will do 

to your ability to protect workers, worker safety, develop regulations and inspections, and generally protect workers? 

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Secretary PEREZ. Well, sequestration, I mean, for instance, in the 

workforce context, you know, we have got a lot of folks who are still 

coming to American Job Centers, and sequestration meant that 

there were about a million people who wanted our services who 

couldn’t get our services. In a time when we are talking about jobs, 

jobs, jobs, you know, match.com wants to be match.com. But, you 

know, when you have a size 12 need and a size eight budget, there 

are people who are in need who don’t get that. 

And similar situations in other aspects of our DOL work. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Chairman KLINE. Thank you. 

Dr. Foxx, you are recognized for five minutes. 

Secretary PEREZ. Morning. 

Ms. FOXX. Good morning. 

Secretary PEREZ. Good to see you again. 

Ms. FOXX. Thank you, Mr. Chairman. 

And thank you for being here, Secretary Perez. I want to follow 

up on your mention of Job Corps, actually. 

Recently, it has come to the committee’s attention that since the 

passage of WIOA, approximately two-thirds of the competitively bid 

Job Corps contracts have been or are being scheduled for contractor 

selections in advance of the law’s effective date and promulgation 

of regulations implementing the new statutory requirements for 

contractor quality. As noted in the letter Chairman Kline and I 

sent you earlier this week, we are concerned the Department has 

not begun implementing these enhanced selection criteria when selecting entities to operate Job Corps centers. 

One only need look at the recent contractor performance at the 

North Texas Job Corps Center to fully realize the devastating problems that can arise when a contract is awarded to a company illprepared to successfully operate a Job Corps center. It is critical 

that the new statutory provisions be implemented as new contracts 

are being awarded. 

And I have always found that when you need new money you 

look within your own organization for ways that you can more effectively deliver the services, rather than asking for new money. 

And so we would like to know from you—what is your response to 

our request in the letter and the need to have more accountability 

and more effective programs run by Job Corps. 

Secretary PEREZ. The letter you are referring to I received last 

night and we will certainly respond in a timely fashion. 

It was slid under my door, Mr. Chairman. 

Chairman KLINE. [Off mike.] 

Secretary PEREZ. Okay. I just wanted you to know that. 

Chairman KLINE. [Off mike.] 

Secretary PEREZ. No, by my staff it was slid under the door. 

And let me say I totally agree with you, Congresswoman Foxx, 

that Job Corps contractors need to be subject to accountability, and 

when they don’t do a good job we need to take action. The North 

Texas center that you are referring to, we revoked that contract as 

a result of serious issues of safety. 

I also agree wholeheartedly with what is in WIOA. One of the 

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performing should be able to compete. I completely agree with that 

proposition. 

As I understood the letter—and again, I haven’t had a chance to 

digest it fully—I think it says that—or I think it is concerned that 

we are speeding up the letting of contracts to get in before the effective date. I am flattered that there is a perception that our procurement process is moving with undue alacrity. 

Chairman KLINE. [Off mike.] 

Secretary PEREZ. I can assure you that, you know, we are making no effort to speed up contracts in an effort to avoid a new provision of WIOA because I think it is a good provision. And we will 

give you a much more robust response. 

I also believe in accountability, and we have taken a number of 

steps. That is a very important question that you ask. 

When I was in state government we regulated the state banks, 

and we instituted a—what I call a risk-based assessment system, 

because not all banks are created equal. Some have more risk factors than others. 

Similarly, when I got here, Job Corps—every Job Corps center 

was looked at on the same timeframe. Not all Job Corps centers 

have the same risk factors. 

And so we have put in place a risk-based assessment system that 

I think will better enable us to spend more time with the centers 

that need our attention and less time with the centers that are firing on all cylinders. That is what risk-based accountability and 

oversight, I think working at its best, does. 

Ms. FOXX. Well, you anticipated the next question I was going to 

ask, actually. So I just want—quickly—so do you then have in your 

risk-based management system a time to cut these people off, in 

terms of saying, ‘‘Okay, there is going to come a time when we 

don’t think you can be fixed’’? 

Secretary PEREZ. Oh, well, as you know, one Job Corps center 

was shut down as of February the 28th in Oklahoma. We are currently reviewing, and our goal is to make sure that everybody can 

succeed. 

I don’t want anyone—I don’t want to set anyone up for failure. 

We want to give tools to everyone to help them succeed. And I have 

seen improvement in a number of centers. 

But when there is chronic underperformance, we will not hesitate to take action. And I don’t want to prejudge the process, but 

I expect that we may be making further recommendations in the 

context of chronically low-performing Job Corps centers. 

Because it is all about the kids. I mean, we have got to make 

sure everybody—anywhere you go, you should be getting top-flight 

service. 

Chairman KLINE. Gentlelady’s time has expired. 

Mr. Polis? 

Mr. POLIS. Thank you, Mr. Chairman. 

Thank you, Mr. Secretary. 

Secretary PEREZ. Morning, Congressman. 

Mr. POLIS. Welcome to the committee. 

As we all know LGBT Americans still face historically—historic 

and current discrimination in the workplace, and I want to acknowledge your great work and show appreciation on behalf of the 

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LGBT community for the effort the Department of Labor, under 

your leadership, has gone through in implementing the President’s 

executive order to prohibit Federal contractors from discriminating 

on the basis of sexual orientation and gender identity. 

Can you speak to how the work you did issuing a final rule in 

December of last year helped to fully implement and comply with 

your duties and responsibilities under the law? 

Secretary PEREZ. Yes. First of all, I want to thank you for your 

leadership in this area. You know, I believe that people should be 

judged by the quality of the work they do in a workplace, and not 

by any other irrelevant factors. And I think this is—the work that 

we are doing in this area is critically important. 

And the executive order was July of last year, and we have been 

moving forward through our OFCCP office to help contractors prepare for compliance. And I am confident that they can come into 

compliance. 

When we worked on other issues, we have been able to work very 

effectively to help educate. Because I would much rather prevent 

than have to come in at the back end and enforce. So I am very 

confident that we can do that in this context. 

Mr. POLIS. Thank you. And your task is assisted by the fact that 

such discrimination is against the law in 20-some states already, 

where contractors in those states, at least, would already presumably comply with this. 

I wanted to talk about civil penalties for a moment. Your budget 

proposes to strengthen several of the civil monetary policies that 

the DOL could impose when a law is violated. You are acting on 

recommendations by the GAO and the Administrative Conference 

of the United States by proposing to improve the Federal Civil Penalties Inflation Adjustment Act. As one example, FLSA has a $1,100 maximum fine per willful 

and repeat violation, which is ridiculously low. And is DOL considering whether to raise that fine? And if so, to what level? 

And can you speak to the importance of having civil monetary 

penalties to deter bad behavior and to ensure that our workforce 

protection statutes like FLSA, OSHA, and ERISA are followed 

across our country? 

Secretary PEREZ. I very much appreciate that question, and I 

think our civil money penalties need to be modernized to reflect the 

realities of the 21st century. Too often, our civil money penalties 

are cost-of-doing-business fines. 

In the whistleblower context, Congress has acted in a bipartisan 

fashion to modernize whistleblower laws so that they have gotten 

better and better and given more rights to courageous whistleblowers. There is still work to do there. 

But we had a case in 2001—an OSHA case—where a tank full 

of sulfuric acid exploded in a refinery. The victim’s body was literally dissolved. And the OSHA penalty was $175,000. 

The same incident, some of that sulfuric acid flowed into a nearby stream, killing fish and crabs. The EPA fine was $10 million. 

The fine for the dead person was $175,000. I think we need to correct that. 

And when I talk to businesses who play by the rules, they tell 

me that we need to correct this because they are playing by the 

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rules, and those who cheat do so because of the cost-of-doing-business fines. We don’t pack enough punch. 

Mr. POLIS. Speaking of playing by the rules, another area that 

some businesses don’t play by the rules is by misclassifying their 

employees as independent contractors. And I am sure you are familiar with the Oak Grove Cinemas, Barrington Management, and 

Barrington Venture LLC case, where employees doing general 

maintenance and construction were working 60 to 68 hours a week, 

being allocated to different entities that were all under the same 

ownership under one contract, were denied overtime. The employer 

was fined $512,000 in back wages. 

And this is far too common. So how can we do more to deter this 

kind of activity, rather than just try to chase after the fact? 

Secretary PEREZ. One thing we have been doing is working very 

closely with states, and we have entered into MOUs with 20 states, 

ranging from Utah and Alabama to Massachusetts, because this 

problem is not a red or blue problem, it is a national problem that 

has three sets of victims: the worker him- or herself; the employers 

who play by the rules—they can’t compete for contracts, they can’t 

compete for businesses because they pay their taxes; and then the 

tax collector, because when a business is cheating, they are not 

paying their workers’ comp taxes, my U.I. taxes go up because the 

pool has gotten smaller. 

And so those three types of victims are why we are working with 

states across the country on this issue. It is a very significant problem. 

I believe that there is an important place for independent contractors, but I also believe that there is ample evidence that has 

been abused. 

Mr. POLIS. Thank you. I yield back. 

Chairman KLINE. Gentleman’s time has expired. 

Dr. Roe, you are recognized. 

Mr. ROE. I thank the chairman. 

And— 

Secretary PEREZ. Morning. 

Mr. ROE.—thank you, Mr. Secretary, for the work you helped us 

with on the multiemployer pension plan. I think that was a great 

piece of work. I want to reaffirm what the chairman said, and I appreciate that we still have a lot of work to do. 

One of the things I want to talk about is to go to the rulemaking 

that we are looking at with the fiduciary rule. And we wrote a letter, the chairman and I did, to your department asking for information. And we got back a letter that just gave some dates that you 

met with the SEC chair or talked to her, but really no information. 

We have a constitutional responsibility for oversight, and so we 

would like to get some data, what happened in those meetings. 

Would be good for us to know what went on, and would you please 

provide those documents? That would be number one. 

Number two, have you read the Furman Memo? The Furman 

Memo, from the— 

Secretary PEREZ. I have read the report from the CEA on the 

costs of conflicted advice. 

Mr. ROE. Well, exactly. That is what this memo is. And basically, 

what it says—I have read this memo, and basically what it says, 

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out of the Council of Economic Advisers, is that investment advisors basically move this money from, say, a 401(k)—I mean, from 

a company-owned plan to a 401(k) or an IRA basically just to make 

money. They encourage people to do that, they churn the accounts, 

obviously buy and sell. 

And there are several types of advice that you can get. I have 

all three of those accounts. I have a managed account, I have just 

a standard 401(k), and then I have one here as a congressman. And 

the least advice I have gotten, and I think the poorest result I have 

had, is the one I have here in Congress, where I can’t—I basically 

can’t talk to anybody. 

So the question is, do you believe what that memo said about 

what the investment advisors are actually doing—that they are 

doing that? And look, there are bad actors out there. We all know 

Bernie Madoff exists, and we know that people still rob banks and 

there are laws against that. 

But most of these advisors I think act in the best interest of their 

clients or their clients move when they see what the results are. 

So the free market system works. 

And this Furman Memo I thought was outrageous when I read 

it. Any comments on that? 

Secretary PEREZ. Sure. I wrote down all of your questions. Let 

me first start by saying I have been thinking and praying for you 

over recent weeks. 

Mr. ROE. Thank you. 

Secretary PEREZ. Secondly, we look forward to working with you 

on the request for documents. And I certainly respect the oversight 

responsibilities of committees. I also, as someone who entered Federal service in the Bush Administration, worked in Republican and 

Democratic administrations, I also know that—and I know you appreciate—that when you are having deliberations on what to do 

and you are having conversations, that there is also deliberative 

process issues, and we look forward to continuing those discussions 

with you. 

I believe that financial planners can and ought to do what lawyers and doctors do. I am the youngest of five, a lawyer; and I have 

got four siblings and they are all doctors. And we are all required 

to—I promised I would never be a plaintiff’s personal injury lawyer, and I did keep my promise. 

Mr. ROE. Thank you. Only one turned to the dark side. That is 

good. 

Secretary PEREZ. And my dad was a doctor, and I was the one 

black sheep, I will concede for the record, Congressman. 

And, you know, lawyers and doctors look out for their clients’ 

best interests. If I were afflicted with a serious illness I don’t want 

my doctor telling me what is suitable for me; I want my doctor telling me what is best for me. And that doctor has that requirement 

to do that. 

And I talk to people in the financial space who are already 

doing—have—they are certified financial planners, they have taken 

the oath to look out for their clients’ best interests, and, you know, 

they tell me that the playing field isn’t level. 

And Jack Bogle, I think, said it best—the chairman of Vanguard, 

or founder of Vanguard. ‘‘I have been in the business 64 years,’’ he 

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said, ‘‘and I learned that when you take care of your customers and 

put them first it is best for the customers and it is great for business.’’ 

Mr. ROE. My time is about to expire, and the CEA memo said 

the IRA marketplace lacks meaningful regulation. Well, what about 

FINRA and the SEC? 

And I think probably your department should work with the SEC 

if there is going to be a change in the fiduciary rule and not just 

unilaterally do it. I think the SEC really is the place that should 

be done more than DOL. Any— 

Secretary PEREZ. Well, our letter certainly outlines the extensive 

collaboration we have had with the SEC and will continue to have 

with the SEC in this process. As Chair White said yesterday at a 

meeting she was at, we have worked together. In the end, we have 

statutory schemes that we need to make sure we are vindicating. 

Mr. ROE. Okay. Well, other than this memo, I have been able— 

I tried last night for hours on the Internet to try to find out where 

the data came from that was in this CEA memo. I couldn’t find it. 

Secretary PEREZ. Well, I look forward to talking to you about 

that, because I actually think it— 

Chairman KLINE. Gentleman’s time has expired. 

Ms. Wilson, you are recognized. 

Ms. WILSON of Florida.—thanks to the ranking member for today’s hearing. 

Mr. Secretary, I am so pleased to see you today. I have worked 

so closely with you since I have been in Congress, and I look forward to working with you as we move forward. 

I want to thank you for coming today and speaking to us about 

these very important issues, especially extending emergency unemployment compensation and raising the minimum wage. I love 

what you have presented regarding community colleges and also 

reintegrating ex-felons back into the workforce, which is so, so important. 

Everyone needs a job, and I think the mantra of this Congress 

should really be ‘‘jobs, jobs, jobs.’’ I have said it so many times on 

the floor. 

Congress needs to get real about passing a serious full employment agenda, paying workers a fair wage for the hours worked, 

and raising the minimum wage. That is the least we can do. 

Now is the time to invest in the people who keep our economy 

running. If we raise the minimum wage people will have more 

money to spend, companies will be able to create more jobs, people 

will have higher salaries and pay more in taxes, and American 

workers will be happier and healthier. Everyone wins. America 

wins. 

I hope as a body we can come together and do that. 

Mr. Perez, last year I shared with you my concern that the Department of Labor should be very, very careful in crafting a fiduciary rule that would not impact the availability of affordable investment advice. 

As you know, I represent South Florida. It is a retirement community. And so retirement security is an important issue for me 

and for my constituents. We have a better chance of protecting our 

retirements when we sit down with a trained professional who can 

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answer the complicated but important questions we have about our 

savings. 

So, as always, I plan to work with you on the proposed rule very 

closely, and I want to make sure that I have an open line of communication with you as I work with any ongoing concerns I may 

have. I want to be able to hear from you as I hear from my constituents, and we can become a team to work out a solution. 

The President’s budget points out that many of our employment 

and safety laws lack strong civil penalties, and I have a bill that 

I am filing called Protecting America’s Workers Act. Many of these 

rules are woefully out of date. 

The maximum penalty for repeated and willful violations of Federal minimum wage and overtime laws is only $1,100. The maximum OSHA fine for a serious violation that causes an injury or 

death is only $7,000. In fact, the last time OSHA’s penalties were 

increased was back in 1990, and they have not been adjusted for 

inflation in 25 years. 

Do we need to update OSHA’s penalties, Mr. Secretary? What 

about updating penalties under our wage and hour laws? 

Secretary PEREZ. Great. Well, I look forward to working with you 

on all the issues you addressed. 

I agree with you about small investors. I think small investors 

are people who are most in need of advisors who are looking out 

for them because the margin of error for them is zero. So I look 

forward to working with you on that. 

As I said to Congressman Polis before, we have to bring civil 

money penalties into the 20th century—21st century, and that includes wage and hour, that includes OSHA, and I look forward to 

working with you on those issues. 

Ms. WILSON of Florida. Thank you. We will be talking. 

Chairman KLINE. Gentlelady yields back. 

Mr. Thompson, you are recognized. 

Mr. THOMPSON. Thank you, Chairman. 

Mr. Secretary, thank you so much for being here. 

Secretary PEREZ. Morning, sir. 

Mr. THOMPSON. Good morning. Thank you for your comments regarding apprenticeship programs, too. Certainly that is a great opportunity to— 

Secretary PEREZ. I agree. 

Mr. THOMPSON.—great pathway to opportunity, and I look forward to working with you on that, as well. I am hoping that we 

can see you do something rather robust as we look at reauthorizing 

the Perkins Act, too, in terms of apprenticeships. 

Secretary PEREZ. Absolutely. 

Mr. THOMPSON. I have got—one was—is just a request, a followup request, and the other a question for you. Kind of a unique situation, that your office, I think, is currently—we haven’t heard back 

from yet on—November 18th of last year my office—we initiated a 

request for a formal ruling regarding the MSHA issue, actually affecting Old Order Amish contractors who are to wear hard hats on 

job sites despite religious objections. 

It is a confusion within the Department that our inquiry was 

based on. MSHA’s ruling runs contrary to the existing OSHA rulCEWDOCROOM with DISTILLER

46 

ing exempting the Amish from wearing hard hats, and that dates 

back to 1994. 

Mr. Secretary, my constituents being affected by the MSHA regulation are committed to following the law. However, the discrepancy between MSHA and OSHA is not just an issue of religious 

freedom; it seems like one hand is not talking to the other. 

It has been five months since any inquiry, and I have a copy of 

the letter with me and available. I would just appreciate you looking into the issue so we can—whatever the response is—we can 

just get a more timely response back to the constituents. 

Secretary PEREZ. Well, first of all, I owe you an apology because 

the delay is unacceptable and that is my responsibility. And I am 

going to get back to you in no more than a week. 

Mr. THOMPSON. Okay. 

Secretary PEREZ. When this came to my attention—it is a fascinating issue. There are two very compelling, competing considerations. I take a back seat to no one in my commitment to respecting religious freedom. At the same time, workplace safety is a pretty big thing too. 

And so I commit to getting back to you in the next week. We 

have a team of folks who are not only looking at the MSHA issue 

that you presented, but looking at our entire array of workplace 

safety rules because we want to get it right. 

Again, I appreciate the patience that you have shown and I 

apologize for the delay. 

Mr. THOMPSON. Well, I appreciate your due diligence. It is not an 

easy question, there is no doubt about it. Not an easy—to resolve. 

So thank you for that. 

Wanted to touch on—September 12, 2013, OSHA proposed to reduce the silica permissible exposure limit to 50 micrograms of silica 

per cubic meter of air for all industries. Last week, NIOSH published a silica report showing a dramatic downward trend in incidents of silicosis. 

In the regulatory proposal that OSHA had they stated that 30 

percent of silica samples in the general industry were above 

OSHA’s current limit, and the construction industry sampling demonstrated 25 percent noncompliance. 

Mr. Secretary, can you tell me how many silica-related inspections OSHA conducted in the past two fiscal years, and what is the 

agency doing now to ensure compliance with the current silica permissible exposure limits? 

Secretary PEREZ. I don’t know the answer to your first question, 

but I will get back to you. When you go to a construction site there 

is a pretty good chance that part of what you are going to be looking at there may be items that relate to silica. So I will make sure 

I get back to you on that. 

What I can say regarding the rule is that there has been a very, 

very extensive process that included a series of hearings where we 

heard from a wide array of stakeholders ranging from, you know, 

the fracking industry to construction companies to large businesses 

to small businesses. We have a voluminous record in this matter 

because it is a big rule and it is a big proposal, and we want to 

make sure we get it right. 

CEWDOCROOM with DISTILLER

47 

Our goal here is to make sure that our workplaces are safe and, 

you know, as way back as 1937 I have an audio recording of 

Frances Perkins talking about the dangers of silica. So these issues 

have been well-known for quite literally decades, and our goal is 

to try to thread the needle appropriately so that we have safe 

workplaces and do so in a way that is fair to all sides. That is our 

goal. 

Mr. THOMPSON. Well, I appreciate that, and I thank you. I appreciate seeing the NIOSH published report that the incidents have— 

the downward trend that is there on silicosis. That is a good thing 

for us, so thank you. 

Secretary PEREZ. Thank you. 

Mr. THOMPSON. I yield back. 

Chairman KLINE. Gentleman yields back. 

Mr. Takano, you are recognized. 

Mr. TAKANO. Thank you, Mr. Chairman. 

Mr. Secretary, welcome. 

Secretary PEREZ. Morning. 

Mr. TAKANO. Thank you for being here. 

I want to talk to you about overtime pay this morning. Americans are working longer hours and are more productive, yet their 

wages are largely flat. And one reason Americans’ paychecks are 

not keeping pace with their productivity is that millions of working-class and even middle-class workers are working overtime— 

more than 40 hours a week—and not getting paid for it. 

Today, the threshold for overtime pay is only $23,660 per year, 

or $455 per week for a salaried worker. Only about 11 percent of 

the salaried workers are eligible for overtime. Back in 1975, some 

65 percent of salaried workers were eligible for overtime pay. 

Now, if the overtime salary threshold was raised to the 1975 

level after adjusting for inflation, millions of lower-paid white-collar workers would be guaranteed the right to overtime pay if they 

work more than 40 hours a week, regardless of the nature of their 

job. 

Now, I sent a letter earlier this year with more than 30 colleagues urging the Department to raise the income threshold for 

overtime pay so that more salaried workers qualify. I was pleased 

to receive a response from the Wage and Hour Division, last week. 

But what I want to ask you, Mr. Secretary, has the President 

called upon the department to review the overtime white-collar exemption last year? And I know you have been working diligently. 

Can you tell me more about how the department plans to address 

this issue and what is your timeline for doing so? 

Secretary PEREZ. Well, we are actually working overtime on this, 

Congressman. And basically, you know, the overtime rule stands 

for a very simple proposition that was enshrined in the Fair Labor 

Standards Act: If you work extra, you should be paid extra. 

And as you correctly point out, we have met people who are 

working 60 hours a week, 65 hours a week, who are making $455. 

That is the salary threshold that equals the amount that you said. 

And you do the math on that, we have quite literally had cases 

where the supervisor was making less than the person they supervised. That is not fair. 

CEWDOCROOM with DISTILLER

48 

So the President directed us to figure out what is fair. You know, 

how can we adjust this threshold to reflect the fact that it has not 

kept up with inflation? How can we adjust the threshold that reflects the fact that if you work overtime you should be paid overtime? And how can we simplify the process, which would be helpful 

for employers and workers alike? 

And so, I have personally participated in literally, oh, probably 

15 to 20 meetings with various stakeholders, including but not limited to employers, across an array of sectors to get their input. And 

I am hopeful that sometime this Spring we will be in a position to 

put a proposal out. And then once that proposal is out, there will 

be a notice and comment—there will be a comment period, and we 

will have another round of opportunity to get feedback. 

But our goal is to make a rule that is fair and make a rule that 

is—that facilitates compliance and is simpler. 

Mr. TAKANO. Well, thank you for that answer. 

What is your response to those who say that this will hurt workers that we want to help? If employers don’t want to pay extra 

overtime, won’t they logically increase the hours of those working 

part time and hire more workers? 

Secretary PEREZ. If you are working 70 hours a week and you are making $455, this is just fundamental fairness to me. And we see 

too many people who have been, in fact, left without those protections of overtime. 

And by the way, these are some of the most valuable workers in 

a workplace. These are the folks who have the keys. They are opening and closing places. They are going to the bank with the money. 

And they ought to be treated fairly. 

Mr. TAKANO. Do you think that we might look to—once you get 

this resolved and propose a new rule, or propose an updating of the 

rule, that we might want to index—you know, find some way to 

index the threshold to inflation? 

Secretary PEREZ. In the informal feedback that we have undertaken as part of our listening tour, that issue has come up and a 

number of people have raised that issue. And so, again, we will put 

a proposed rule out and then we will put it out for comment, and 

we look forward to getting comments, including comments, I am 

sure, from members of Congress. 

Mr. TAKANO. Well, we look forward to working with you, and I 

appreciate the hard overtime—the work you are doing on overtime 

to get this done. 

Secretary PEREZ. Thank you. 

Mr. TAKANO. And it always seems—I agree with you. I think it 

seems fundamental fairness that we—that Americans get paid for 

the work they do. 

Thank you, Mr. Chairman. My time is up. 

Chairman KLINE. Gentleman’s time has expired. 

Mr. Walberg, you are recognized for five minutes. 

Mr. WALBERG. Thank you, Mr. Chairman. 

And— 

Secretary PEREZ. Morning, Mr. Chairman. 

Mr. WALBERG.—Mr. Secretary, thank you. Certainly appreciate 

your openness, your willingness to be in front of us, openness to 

have calls from us, take those calls, and respond. I appreciate that. 

CEWDOCROOM with DISTILLER

49 

Secretary PEREZ. My pleasure. 

Mr. WALBERG. In order to continue and keep the respect of my 

chairman, I want to stay within the five-minute time limit, so there 

are basically three questions I have. 

I think you have addressed, to a great degree, one of those questions already relative to overtime regulations. You indicated that 

sometime this Spring, which thankfully has come, sometime this 

Spring that rule will be put forward as a proposal. 

I would just say I hope, in context with that, not only do we look 

at the wages relative to the hours, but we also look at those 

other—I guess it would be considered quantifiable factors of respect, of the opportunity for individuals to be in a situation where 

on their resume there is leadership shown, the ability to expand 

and move forward, and it is not just the money in their cases. It 

really isn’t just the money; it is the opportunity to expand. 

The other two question areas that I did want to talk to you about 

are relative—one area would be the SHARP program and the VPP 

program, they kind of combined. And my question, the other, is in 

reference to wellness plans. 

Let me ask these questions and then get out of the way to let 

you address those, so we will stay within the five-minute time period. 

Recently, I sent a letter to Dr. Michaels urging him to rescind 

the November 2014 OSHA guidance document related to the size 

standard for a Safety and Health Achievement Recognition Program, SHARP. The guidance suggests companies with over 250 employees be encouraged to move to the Voluntary Protection Program, VPP. 

However, Dr. Michaels has also suggested, as he has back and 

forth, VPP should be eliminated—limited and ultimately terminated. We went through that with him in a hearing some time ago 

and got VPP extended, and now it is going the other way. 

When questioned about compliance assistance the agency always 

holds up these two programs as stellar examples of helping employers and employees. The Department can’t have it both ways, and 

so why does OSHA seek to limit participation in both of these programs, SHARP and VPP? 

Secondly, the wellness plans. ACA encourages employers to offer 

wellness plans, yet EEOC has gone after employer wellness programs. 

The question I have is, does the administration support employer 

wellness plans? And if so, why is the EEOC acting to the contrary 

to—on the desire for employers, employees, and ACA? 

I guess those two questions I would love to have your answer, 

and then we may go to another issue. 

Secretary PEREZ. Great. On overtime, I agree with the issues of 

respect and leadership, by the way, and we have had that conversation in our outreach, so I just wanted to mention that very 

briefly. 

As it relates to the SHARP program and VPP, the SHARP program, which stands for Safety and Health Achievement Recognition, is an important part of what we have been doing at OSHA. 

That program was initially designed to help small businesses. 

CEWDOCROOM with DISTILLER

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And what happened over time was that a lot of large businesses 

who have subsidiaries that are under them who are small were getting into that program. And so, just as a matter of how we deal 

with limited resources, our goal was then to move the subsidiaries 

of large businesses from SHARP into VPP. 

What we have done in response to your feedback is to make sure 

that, you know, everybody who is currently in SHARP will stay in 

SHARP, so nobody is kicked out, for lack of a better term. And so 

that program will continue. 

Our aim for 2016 is to expand VPP because we think it is a great 

program. And just to clarify, I don’t believe we have ever made any 

statement saying that we are going to eliminate VPP because I 

think it is a good program, and our goal in 2016 is to continue to 

do— 

Mr. WALBERG. We may have misunderstood— 

Secretary PEREZ. Okay. 

Mr. WALBERG.—Director Michaels’ statements, but most recently 

it has moved the other way toward elimination, so if you can clarify 

that with me I would certainly— 

Secretary PEREZ. Okay. We think, and I am confident that Dr. 

Michaels agrees, that VPP is a—and SHARP are very important 

programs, and I look forward to working with you to make sure 

that they achieve the purpose that I think we both believe that 

they should have. 

Chairman KLINE. Unfortunately, the gentleman’s time has expired. 

Mr. Jeffries, you are recognized for five minutes. 

Mr. JEFFRIES. Thank you, Mr. Chair. 

And thank you, Mr. Secretary, for your testimony and for your 

presence. 

When the Obama administration came into office in 2009 the 

President and the administration inherited a train wreck of an 

economy as a result of the Great Depression. Since then, the economy has gotten back on track through the leadership of the President, with the able assistance of yourself and other members of the 

administration. 

Yet, it seems like we consistently hear every time the administration has taken a step forward or plans to take another step forward there is a gloom and doom scenario and vision—the sky is 

going to fall, the world is going to end in some way, shape, or form. 

We first heard that in connection with the passage of the Affordable Care Act. We were told it was going to end health care as we 

know it. Instead, more than 16 million previously uninsured Americans now have affordable health insurance. And, in fact, the cost 

trajectory of health care has slowed in a way that is positive for 

all of America. 

We heard that when Dodd-Frank was passed it was going to end 

Wall Street productivity as we know it. Instead, we have got a 

stock market that is way up, CEO compensation is way up, profitability amongst Wall Street institutions is way up. That is a good 

thing for America, for New York City, where Wall Street is based. 

But Wall Street as we know it wasn’t ended. 

Then, of course, I think we heard when the progressive tax code 

was put into place, consistent with the fiscal cliff agreement at the 

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beginning of 2013, that the job creators would be hurt in an incredible way. Yet, we have had 60 consecutive months, I believe, of private sector job creation continuing through that period when the 

fiscal cliff deal was put into place, 12 million private sector jobs 

have been created. 

So we have heard now, consistent with some of the things that 

you have attempted to do with respect to Federal procurement, 

your support of the minimum wage, that we are going to grind the 

economy to a halt, the sky will fall. And so I just want to get into 

a little bit of the facts, if you will, related to why you are supporting a minimum wage increase, for instance. 

We have got a consumer demand problem, I believe, in America 

that we have been attempting to address moving forward, correct? 

Secretary PEREZ. Well, I support a minimum wage because, number one, it is fundamentally fair. Nobody who works a full-time job 

should have to live in poverty. 

I support it, number two, because it is smart. You know, when 

you put money in people’s pockets they spend it. Employer after 

employer tells me, ‘‘Tom, this is a consumption-deprived recovery.’’ 

And that is because folks don’t have enough money in their pocket. 

And so it is the fair thing to do and it is the right thing to do, 

and that is why voters in Nebraska, Arkansas, Alaska, and elsewhere have voted increases in the minimum wage, you know, and 

New Jersey, as well, because it is an idea that has had bipartisan 

support in this body. Whether it was Newt Gingrich in the 1990s, 

George W. Bush, his father, every President except two since FDR 

has signed an increase in the minimum wage. 

Mr. JEFFRIES. Right. And Americans both on the left and the 

right—blue states, red states—get it. If you put more money in the 

pockets of everyday Americans they will spend more. If you spend 

more you are going to yield economic growth. That, of course, is 

going to be good for the country. 

In terms of Federal procurement, there seems to be this argument that access to Federal procurement is a right, not a privilege. 

Seems to me that it is a privilege that should be earned, as it relates to whether contractors are doing the right thing by standards 

that already exist in law. 

Could you speak to sort of the efforts that the administration has 

taken to try to level the playing field so that good actors are getting access to Federal procurement and bad actors are not abusing 

taxpayer dollars? 

Secretary PEREZ. It is important to note that contractors already 

are—contracting officers are already required to assess a contractor’s business integrity and ethics before awarding a contract. And 

when you are a contractor competing for business, you have got to 

do the same thing if you have subs. 

And by the way, that is not simply the right thing to do, it is 

the smart thing to do. No one wants to associate with a sub who 

has a bad rep. 

And so what we are simply doing in this rule is clarifying that 

breaking labor laws, if you have had multiple, you know, labor violations in safety or wage and hour, that is not consistent with business ethics. And there is a provision in this—in our regulatory 

structure here whereby after the rules are final and before they go 

CEWDOCROOM with DISTILLER

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into effect, there is a period of time that we have set up by design 

where businesses who think they have questions can come and get 

those questions answered, because our goal is compliance. 

Mr. JEFFRIES. Thank you, Mr. Chair. 

Secretary— 

Chairman KLINE. Gentleman’s time has expired. 

Being mindful of the hard stop at 12:00 p.m., the chair will reduce to four minutes the time for question and answers on each 

side for the remaining members, and I think that will allow everybody to get a chance to ask their questions. 

So unfortunately, Mr. Guthrie, you are going to be limited to four 

minutes. We are starting with you, and you are recognized. 

Mr. GUTHRIE. Too bad I just have four minutes because I was 

going to praise working here together. 

And the chairman said this when he was giving his opening remarks, and he used the comment about you, said ‘‘true to your 

word.’’ And if you remember, when we had a—I guess this hearing 

last year, we had some concerns that I had of an example of the 

ESOPs in my area, which, I explained, particularly one, that allow 

hard-working taxpayers to create real wealth. 

And that is what we all want—people not just to survive, but to 

create real wealth for themselves and their families, as we discussed, hopefully be able to afford to send their kids to college, 

right? Those types of things. 

And you said sitting there, ‘‘Well, I want to meet them.’’ And for 

about a year, the place does work sometimes. You came to my office with your staff. My constituents came, explained their position, 

and we left with, there are some areas that we can agree and work 

on, and we have done that. 

And I really appreciate that because it was true to your word. 

You know, sometimes you hear things and you go for meetings and 

we all get busy. It is not that somebody is trying not to work it 

out together, but we really have, and I really appreciated you, my 

people that work in my office working with your office to hopefully 

to come to some agreement that is moving forward. 

And we talked earlier about ESOPs, and I would just like to give 

you a few moments to talk about ESOPs. And we said earlier, how 

do we create pathways and policies, not just through ESOPs, but 

any way, for hard-working taxpayers, I think you said middle-class, 

to earn—working people to earn real wealth? 

And so I’ll just give you a couple opportunities to talk about, 

from our meeting to now, what you kind of discovered or maybe reacquainted yourself with ESOPs. And I guess I am running out of 

time, so I want to turn it over to you— 

Secretary PEREZ. Sure. No, well, thank you. 

You were concerned that we had a provision in the proposed conflict of interest rule that—from 2010 or 2011 relating to ESOPs. 

You thought that was not a good idea to have it in there. Others 

agreed with you, and upon reflection, we agreed with you, as well. 

So the rule that will come out will not include the ESOP provision 

or proposal from before. 

What I have learned about ESOPs—we have a shared interest, 

Republicans and Democrats alike. We want to figure out how we 

build an economy that works for everyone. 

CEWDOCROOM with DISTILLER

53 

And as you saw with your constituents and as I have seen across 

the country, employee stock ownership programs are very effective 

ways of helping people across, you know, whether it is the cashier 

at the grocery store or—to the owner of the grocery store, giving 

them opportunities not only to build a nest egg, but when you have 

skin in the game in your job—and many ESOPs, their governance 

structures, they are giving people skin in the game. 

I am always happiest in my jobs when I feel like my voice is 

heard, and that is what so many ESOPs are doing. And that is why 

I think it can lead to this sense of shared prosperity. 

And I look forward to working with you, Congressman, moving 

forward to see, is there public policy that we can undertake that 

can help, you know, promote and expand a model that I think has 

had, you know, real success in building wealth for working people 

across this country in places like Kentucky, in places like Colorado. 

Anyone who has had the New Belgium Brewery, one of—it is the 

second-largest U.S. brewery in America, after Sam Adams, and, 

you know, that is an ESOP. And the CEO, she is a remarkable person who believes that we all succeed when we all succeed. 

Mr. GUTHRIE. Well, thank you. And you were sincere in all your 

efforts to work, and your staff was great to work with. And appreciate the result that we got. 

Secretary PEREZ. Thank you. 

Mr. GUTHRIE. I yield back, Mr. Chairman. 

Chairman KLINE. Gentleman yields back. 

Ms. Bonamici, you are recognized for four minutes. 

Ms. BONAMICI. Thank you, Mr. Chairman. 

Mr. Secretary, I have a list of thanks and two questions. 

First, thank you for your testimony and for your—the great work 

of your department. Thank you for your visit to the West Coast to 

help facilitate what I hope will be a lasting solution to the labor 

dispute at the West Coast ports. 

Thank you for your support for Job Corps. I have a great Job 

Corps program in my district up at Tongue Point in Astoria. 

And finally, thank you for your focus on paid family and sick 

leave. It is clear, as you recognized in your written testimony, that 

our policies have not kept pace with our workforce. As you note in 

your testimony, the United States is the only industrialized nation 

on Earth without paid family leave. 

I am beginning to, as you indicated in your testimony, see business support, because businesses recognize that these policies help 

with retention and recruitment. Intel in my district just implemented an eight-week paid time for new parents. I applaud them 

for that. 

My first question has to do with workforce development programs, which, of course, play an important role in our communities. Department of Labor grants have helped workforce programs in my district develop innovative partnerships. And I applaud the passage of WIOA last Congress. 

So can you first address what the Department’s plans are to provide technical assistance to states and localities in implementation? 

And then my second question I will give to you and you can respond to both. Last Congress, I introduced a bill to reauthorize the 

Older Americans Act, and we have talked a lot about the imporCEWDOCROOM with DISTILLER

54 

tance of having policies that help support people creating secure retirements. 

But for many, as you know, staying connected to the workforce 

is necessary for achieving economic security. And I talk to constituents. The more mature constituents in my district really perceive 

that there is a lot of age discrimination out there. 

So can you talk about what the Department is doing and intends 

to do to support older workers and to make sure that they are not 

left behind in workforce issues? 

Secretary PEREZ. Sure. 

Ms. BONAMICI. Thank you. 

Secretary PEREZ. I will take your questions in the order that you 

asked them. 

The Workforce Innovation and Opportunity Act is a great opportunity. It is well named. 

And we have spent a significant amount of time, and I am really 

appreciative of the work of our dedicated staff at the Department 

of Labor. We have done outreach to states; we have traveled the 

country. 

Frankly, Congress asked us to do about 18 months’ worth of 

work in about 6 months, and we didn’t quite do it in six months, 

but we did it in about 8 or 9. And we were meeting regularly with 

staff, and they understood that we were not asleep at the switch. 

Quite the contrary. 

And as a result, the rule—the proposed rule is at the Federal 

Register. And we really look forward to the comments, because this 

can be and it will be game-changing. I think there is so much we 

can do in this space. 

This is what it is all about, taking match.com to scale, recognizing that you take the job seeker where you find them. Some 

have a college degree or above and we need to just do a few things 

to help them get back in the workforce; some are coming out of 

prison; some are a person with disabilities; some are veterans. And 

we need to have tools in our toolkit to help everybody. 

And that is exactly what WIOA does, and I am very excited 

about the work that has been done and the work that can be done. 

It is all about scale and sustainability. 

Ms. BONAMICI. Thank you. 

Secretary PEREZ. As it relates to the—your question about the 

Older Americans Act, we are going to be having a summit on older 

Americans. We did the working families summit— 

Ms. BONAMICI. Right. 

Secretary PEREZ.—that you were involved in last year. This year 

the White House will be doing a summit on older Americans that 

is going to deal with a wide range of issues relating to older Americans including retirement security, making sure that you can retire 

with dignity, and when you invest your hard-earned money, that 

you can make sure that somebody is looking out for you. 

The Community Service Employment for Older Americans program, our budget proposes a number of changes all designed to 

make the program work better. And I certainly look forward to 

working with you so that your interest and leadership we can put 

to bear. 

Ms. BONAMICI. Thank you, Mr. Secretary. 

CEWDOCROOM with DISTILLER

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I yield back. 

Chairman KLINE. Thank the gentlelady. 

Mr. Carter, you are recognized for four minutes. 

Mr. CARTER. Thank you, Mr. Chairman. 

Secretary PEREZ. Morning, Congressman. 

Mr. CARTER. And thank you, Mr. Secretary, for being here. As a 

new member of Congress, let me say that it is quite encouraging 

to hear all the compliments from the committee members about 

how you have obviously given a concerted effort to try to work with 

everyone here, so thank you— 

Secretary PEREZ. There is a lot of common ground, and I want 

to find it and work with it. 

Mr. CARTER. Well, as a long-time mayor and as a long-time state 

legislator, I can tell you that I am one who believes that a lot of 

our social ills can be resolved by jobs, so that is— 

Secretary PEREZ. I worked in local government as well, so I know 

the rubber hits the road back in your old job. 

Mr. CARTER. Absolutely. 

Secretary PEREZ. Yes. 

Mr. CARTER. Well, listen, I want to talk to you real quickly about 

the H–2B program. That is something that I have an interest in, 

and it is particularly important in my district. 

And, you know, Congress, of course, has instructed the Department of Labor to work with Homeland Security on this, and I know 

that for many years the Department of Labor performed that role 

without formal rules. And in 2008, I believe you implemented some 

formal rules. 

What was the need for the formal rules at that time? Why was 

there a need for that? 

Secretary PEREZ. You need to have rulemaking authority to implement the underlying guidance. I mean, there is—the one thing— 

I don’t know a program, Congressman, other than the H–2B program, where there has been literally more litigation, dating back 

to the Bush administration, and a host of decisions, one of which 

said that we, the Department of Labor—two of which now have 

said we, the Department of Labor, lack rulemaking authority to 

regulate in this space. 

And then in other settings—and I think this gets to your underlying question—we have attempted to, in related settings, issue 

guidance and administer the program through guidance. And there 

has been litigation in that setting. And on I think two different occasions courts have said, ‘‘No, you can’t simply run the program 

through the issuance of guidance; you need to have a notice and 

comment period if you are going to do that, as well.’’ 

So this has been a, quite frankly, a frustrating enterprise because I recognize the importance of the program, as someone who 

had the eastern shore of Maryland, and we want to try to get it 

right. And that is why we have outlined, in a very short timeframe, 

a series of steps designed to get the program up and running, make 

sure it is fair to American workers, because that is part of our responsibility, and then also make sure it is fair to employers. 

Mr. CARTER. Can you give me an update about where we are 

with the program? When do you expect it to—right now I think 

that it has been suspended, or— 

CEWDOCROOM with DISTILLER

56 

Secretary PEREZ. Right, it has been—three things. We filed a motion to stay the court’s ruling day before last, and it was unopposed 

by the other side. And that goal is to make sure we can get the 

program up and running right now. 

And then by April 30th we have committed to having an interim 

final rule in place so that rule will go into effect immediately, there 

will be a comment period, but while that comment period is in 

place the program is up and running. And then thirdly, the Department of Homeland Security, we had our—we had gotten roughly 

1,000 or more applications off of our assembly line over to DHS, 

you know, as of March the 4th, and they were in limbo, and that 

assembly line over there is already up and running again. 

So those are three very concrete steps designed to get the program moving again expeditiously. 

Mr. CARTER. Great. Well, thank you. It is a good program and 

we hope that you will be able to get it up and running. 

Thank you, Mr. Chairman, and I yield back the remaining time. 

Chairman KLINE. I thank the gentleman. 

Ms. Clark, you are recognized for four minutes. 

Ms. CLARK. [Off mike.] 

Secretary PEREZ. Good morning. 

I think your microphone— 

Ms. CLARK. Newbie on the committee. 

Thank you for being here today. 

And thank you, Mr. Chairman. 

As you and I had a chance to discuss, I believe it is critical as 

we move forward to address income inequality in this country that 

we ensure that low and middle Americans still have the access to 

affordable, quality retirement savings options. And I appreciate the 

dialogue you have had with several of my colleagues here today 

and I really look forward—and thank you for your time yesterday— 

on continuing to work with you as the department goes through its 

rulemaking process. So thank you for that. 

The issues that I want to focus on today are with equal pay and 

medical leave. As you know, women are still paid 78 cents to a 

man’s dollar; and for women of color that gap—that wage gap is 

even greater. 

Nationally, that is a wage gap of more than $10,000 per year between working women and men. That is the equivalent of 86 weeks 

of groceries. 

So my first question for you is if you can tell me specifically how 

the Department of Labor is working to close this gap. 

And in the same line as my colleague from Oregon raised, only 

13 percent of Americans have paid family and medical leave 

through their employers. And often we are finding—I hear from my 

constituents—that working families are being forced to choose between their economic security and the health and wellbeing of their 

families. 

Several states, including Massachusetts, California, Rhode Island, and New Jersey, have recently instituted paid leave and/or 

paid sick day programs. Is this a policy that you believe can be replicated in other states? And specifically, what initiatives is the Department undertaking to promote paid leave? 

Thank you. 

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Secretary PEREZ. Thank you for both of your questions. And I 

certainly enjoyed our meeting yesterday. 

You know, equal pay, as the father of three kids, two of whom 

are daughters, is very near and dear to my heart. And we issued 

a report, as you know, to highlight the fact that working women 

still earn only 78 cents on a dollar. First law the President signed 

when he became President was the Lilly Ledbetter Act, but that is 

not enough. 

And that is why, as part of what the President did last year, he 

proposed—he directed us to issue an NPRM, which we have done, 

which proposes that covered employers would have to submit information relating to employee compensation. Lilly Ledbetter only 

found out she was getting taken advantage of when someone 

passed her an anonymous note, and so we have gotten a lot of comments on this proposed rule and we are working through those 

with an eye toward getting that finalized as soon as possible. 

With respect to paid leave, I have traveled the world on this 

issue—Australia, Canada, U.K., Germany, and elsewhere—and 

whether it is a conservative ruling government or a progressive ruling government, they all embrace it. They recognize that we all 

succeed when women succeed. 

If our labor force participation rate was even, women—female 

labor force participation, U.S. and Canada, in 2000 we had the 

same rate. Now they are eight points higher than us, roughly. That 

translates to, if we had kept pace we would have 5.5 million more 

women in the workplace. 

That is why we are working with states to—and local governments to help correct this. And through our grant-making and 

technical assistance we are going to continue to do just that. 

Ms. CLARK. Thank you. 

Chairman KLINE. Gentlelady’s time has expired. 

Mr. Allen, you are recognized for four minutes. 

Mr. ALLEN. Thank you, Mr. Chairman. 

And, Mr. Secretary, thank you for— 

Secretary PEREZ. Morning. 

Mr. ALLEN.—being here. I, too, am a new member of Congress. 

Secretary PEREZ. Congratulations. 

Mr. ALLEN. I, for 30 years, had the privilege of allowing folks to 

have a good job and be able to support their families, and I can 

think of no greater privilege for anyone to have that opportunity 

to create jobs and give folks the dignity of a good job. 

And with that respect, one—course, I am from Georgia, and we 

have, of course, had tremendous job growth. We lost about 360,000 

jobs in 2008 because we were so dependent on one particular industry, and we have just about replaced those jobs with a diversity of 

jobs. 

And one of the things that we run into—two questions I want to 

ask you. One of things we are running into right now because of 

the growth in our state is getting skilled workers. And everybody 

I talk to—I don’t know—welders are needed everywhere, apparently. 

And the other issue in our state is in our agriculture program. 

And, of course, we use the H–2A temporary agricultural worker 

visas. 

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And, you know, I talk to our farmers and it is a real hassle to 

deal with that program. I mean, your folks seems to be making it 

almost impossible to use that program. And have you talked to any 

of our farmers about that program and how that program could be 

improved so that it is a little easier to use that program in our 

fruit and vegetable industry? 

Secretary PEREZ. I haven’t talked to farmers in Georgia, but 

look—I am always looking for ways to make every program we operate more effective, and that is why I sat down with Congressman 

Guthrie’s constituents to talk about ESOPs. They educated me a lot 

and I always look forward to listening and learning, whether it is 

H–2A, whether it is any issue before this committee that affects 

working people. 

As it relates to your skills issue, I hear that everywhere. And the 

challenge for us in the implementation of WIOA is really the challenge of we have got a lot of promising practices out there; we have 

got to take them to scale. We also have to build some new—build 

and/or fortify on-ramps to this skills superhighway, because we 

have five million job openings right now, and— 

Mr. ALLEN. And these are not minimum-wage jobs. 

Secretary PEREZ. No, no, 500,000 are in I.T. 

Mr. ALLEN. We are spending energy talking about raising the 

minimum wage when we have got great-paying jobs out there. We 

just need to get folks to learn those skills to fill those jobs. 

Secretary PEREZ. I don’t think those are either/or strategies. I 

think those are both and then some. There are 500,000 I.T. jobs 

right now, and that is why what we are trying to do through our 

investments in apprenticeship and elsewhere to build those pathways to prosperity. 

And again, this is not partisan stuff. If we fortify our community 

college system, if we build solid on-ramps for people to go into apprenticeship in I.T. or apprenticeship in health care—in South 

Carolina they are using tax credits—CVS is using tax credits— 

Mr. ALLEN. We are doing the same in Georgia. 

Secretary PEREZ.—and put them into pharmacy tech programs, 

where they are paying, you know, good, solid jobs. So a lot of opportunity— 

Mr. ALLEN. Yes. We have got a number of those programs going 

on, but also, if you would make time available for my farmers I 

think they would like to talk to you about that program. 

Secretary PEREZ. I would look forward to it. 

Mr. ALLEN. Good. Thank you. 

I yield back my time. 

Chairman KLINE. Gentleman yields back. 

Mr. Courtney, you are recognized. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

And thank you, Mr. Secretary— 

Secretary PEREZ. Morning, Congressman. 

Mr. COURTNEY.—for your great service. 

Yes, good morning. 

Again, just want to thank you for, on page three and four of your 

testimony, telling the story of Katherine Hackett, my constituent 

who was, you know, in my opinion, almost an iconic example of 

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how, number one, her determination combined with the assistance 

that the Department of Labor provided, you know— 

Secretary PEREZ. Match.com at work. 

Mr. COURTNEY. It reset her life. You know, and I think it is also 

important just to flesh out a little more of her story. 

She is the mother of two sons who are serving in our military— 

one is Special Forces and another who is a physician down at Fort 

Hood. Again, at one point she and her family were feeling a little 

sort of let down because her unemployment ran out, but again, because of a lot of concerted effort by your team and— 

Secretary PEREZ. And you, sir. 

Mr. COURTNEY.—and, you know, we were able to get her at Norwich Orthopedics, where—I just wanted to read to you—I sent her 

a quick note that you mentioned her in today’s hearing, and this 

is the note that her employer just gave her a couple days ago, 

which is, ‘‘You have exceeded my expectations as the operations 

manager. I can honestly say that you are the best operations manager we have ever had. Keep up the good work.’’ 

You and I visited that facility. It is a sprawling orthopedic practice. I mean, it is just a beehive of activity, and she is kind of the 

quarterback, making sure people find their way. 

Again, a year ago she was basically living at home with 58 degree temperatures trying to save money and electricity costs because she was, again, disconnected from the workforce for no fault 

of her own. And it just shows that supportive employment, which 

is what you guys stepped up with to get that sort of bridge for her 

to establish herself, is a model that can work. 

So WIOA obviously was all about trying to use that kind of collaboration, and I think you called it partnerships with employers. 

And maybe if you could just spend a minute talking about the implementation of the regs and the rollout that is hopefully going to 

take place this year? 

Secretary PEREZ. Well, will take place. And, you know, the proposed rules are at the Federal Register. Those rules will not be a 

surprise to people, I think, because they are the product of a tremendous amount of collaboration. The Thanksgiving and religious 

holidays of December were nonexistent for a lot of our staff because 

they were working day and night to get those done, doing a lot of 

listening at the state and local levels, here with your teams. 

And I—again, I think we have to—this is what we have to do 

now with WIOA implementation, it is partnership at scale, 

match.com at scale, building these new on-ramps. Because we met 

with 50 employers at the White House last week to figure out this 

strategy for tech, because we have got 500,000 tech jobs right now. 

And employers were saying, you know, ‘‘We have on-ramps that 

aren’t existent right now, and if we don’t do this, shame on us, and 

we can do it.’’ And so I am looking forward to taking the WIOA 

framework and making sure that we can scale—because, you know, 

Katherine Hackett is a great success story, and there are literally 

millions of Katherine Hacketts out there that we need to reach, 

and millions of employers who want to hire the Katherine 

Hacketts, and we have got to do that match.com work at scale. 

Mr. COURTNEY. The appetite for this, in terms—because most 

employers I talk to have no idea WIOA was signed into law. I 

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mean, it was amazing. Mr. Kline was there. I think there was one 

TV camera. The media just don’t like to see— 

Secretary PEREZ. We have a marketing challenge, yes. We have 

got to get the word out. 

Mr. COURTNEY. But when the word gets out I think it is going 

to be just a smashing success. 

I yield back. 

Chairman KLINE. I thank the gentleman. 

Mr. Messer, you are recognized for four minutes. 

Mr. MESSER. Thank you. Thank you, Mr. Chairman. 

Secretary PEREZ. Morning, Congressman. 

Mr. MESSER. How you doing? 

Secretary PEREZ. I am doing well, sir. 

Mr. MESSER. I had a couple different topics—I am trying to find 

it here, but a couple different topics I wanted to chat with you 

about briefly. And thank you, again, for your testimony in front of 

the committee. 

First I wanted to ask you a quick question about stop-loss insurance. As you know, it is a financial risk management tool that allows self-insuring employers to protect themselves against unusually high health care claims. 

Over the past few years this administration has repeatedly signaled interest in regulating stop-loss insurance as health insurance 

even though this coverage does not pay medical claims directly, 

doesn’t have a network of physicians, or perform any of the traditional functions of health insurance. And I was wondering, are you 

aware of any attempts to regulate stop-loss coverage by this administration? 

Secretary PEREZ. I would have to get back to you on that. Our 

Employee Benefits Security Administration is the entity in the Department of Labor that addresses issues relating to, you know, 

health care, and ERISA plans, and things of that nature. And what 

I would like to do is talk to them so that I can give you an accurate 

answer. 

Mr. MESSER. Okay. Thanks. If you could get that back to us in 

writing— 

Secretary PEREZ. Sure. 

Mr. MESSER.—I would appreciate it. You know, stop-loss insurance is important sort of umbrella coverage for those that provide 

self-insured plans. 

The second question I would like to ask you about is, with so 

much of the burden for accumulating retirement assets shifting to 

the individual, as well as understanding how to convert those assets to guaranteed income that can’t be outlived through increasingly longer times in retirement, it strikes me that more advice is 

needed for American workers, not less. I worry about expanding 

the definition of—I worry about what expanding the definition of 

‘‘fiduciary’’ will mean to fewer—that it could mean fewer advisors 

will offer advice on retirement assets and fewer people will receive 

it. 

It is that simple to me: more need and less capacity. And people 

want advice about all of their financial picture, not just their nonretirement assets. 

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Secretary, what assurances can you give that the rule your office 

is on the verge of releasing will lead to more advice for American 

workers and not less? 

Secretary PEREZ. Well, I agree with you that we want to make 

sure that more people have access to good advice. And it has to be 

sound advice. 

And, you know, I have had a—I have participated in many, many 

outreach sessions and they have all been very, very helpful, with 

industry and others. And, you know, folks have said that—and 

these are folks who have been doing this for a living, and they are 

fiduciaries right now, and they deal with large investors and small 

investors, and they say, ‘‘We treat them the same.’’ 

And the concern that they express to me is, consumers don’t 

know when they walk in the door whether someone has taken an 

oath to look out for their best interest or whether they haven’t. 

Now, that is not true for lawyers and that is not true for doctors. 

You know, when you go to your doctor they—you know the oath 

they have taken. 

And that creates uncertainty. And I think for small investors it 

is doubly important that the advice they are getting is in their best 

interest. 

And as I said earlier, Jack Bogle, the founder of Vanguard, who 

has been in this business 64 years, said, ‘‘I learned early on when 

you take care of your customer and put their interest first it helps 

the customer—it is good for the customer and it is good for business.’’ 

Mr. MESSER. Well, yes. I think we all agree with that. I think 

the question is, will the unintended consequences of this decision 

be that people get less advice, not more? 

Chairman KLINE. The gentleman’s time has expired. 

Mrs. Davis, you are recognized. 

Mrs. DAVIS. Thank you, Mr. Chairman. 

And, Mr. Secretary, thanks for being here, for always standing 

up and working hard for the— 

Secretary PEREZ. Look forward to coming out to your neck of the 

woods. 

Mrs. DAVIS. Yes, absolutely. 

Just for the record, and as background, as well, we talked earlier 

today, but I wanted to ask you to respond to what is a time-sensitive issue in California. As you know, in 2013, the Department 

of Labor held up public transit grants to all California transit systems because of a dispute over whether or not a 2012 state-passed 

pension law violated the so-called Section 13(c) labor protections for 

transit workers. 

So all of those transit grants, as you know, were put on hold, 

pending the outcome of a Federal court case. And that case, California v. the U.S. Department of Labor, was decided in California 

recently and the funds were ordered to be released, but the department has plans, as I understand it, to appeal that. 

I wanted you to, if you could respond and perhaps get back to 

us in a timely fashion. What does the department plan to do with 

the transit funds in the interim as the appeals process makes its 

way to the court? 

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Secretary PEREZ. Well, thank you for your question, and we did 

chat briefly about this earlier, and I certainly understand the importance of FTA transit grants. I think I was three days on the job 

when I had my first conversation with Governor Brown. And if it 

wasn’t three days it was early on. I knew where the bathroom was, 

but I was still learning the job. 

And I have learned a lot about 13(c) since then. It is really, you 

know, it is a law from Congress which says—it is really a promise 

to bus drivers and other employees who work for federally funded 

transit agencies. 

We have been in litigation, as you know, for some time. We have 

not denied any certifications to any transit agencies since the court 

issued its opinion. 

Our team has been in touch with California as recently as yesterday. Our goal is to work out a solution that works for everybody, 

and I personally—as I said, I have spoken to the governor, I have 

spoken to his chief of staff. 

And while it is still in litigation so there are limits to what I can 

say, I can certainly tell you that we are looking for solutions that 

will allow us to certify transit grants during the pendency of the 

litigation, because I recognize, as a local government guy, that is 

pretty important. 

Mrs. DAVIS. Yes. Is it realistic to look at a timeframe of about 

two weeks to have a written response, at least to the committee, 

in terms of where we are and what the plans are— 

Secretary PEREZ. Well, I will do my best to get you a response 

that is accurate and expeditious. 

Mrs. DAVIS. Okay. Thank you. Thank you, Mr. Secretary. 

And, as well, there is, as you know, another issue in California. 

California is helping to develop an automatic IRA, and I would like 

to ask for your help in doing that so that we are true to ERISA, 

as I know we need to be, and are able to move forward with that. 

Secretary PEREZ. I have had a number of conversations with 

stakeholders in California and elsewhere, including Maryland, who 

want to certainly help promote alternative ways of encouraging 

people to retire—or save for retirement, and we want to make sure 

that we do that in a manner that ensures the proper consumer protections, and that has been a very robust and I think productive 

and constructive process. And I look forward to continuing that. 

Mrs. DAVIS. That is great. 

And finally, I know you have dealt with the conflict of interest 

rule while you have been here today, and certainly there are lots 

of best practices that are out there in the industry, as you noted 

earlier, as well as work that consumer groups have done. And so 

I hope that we can move forward and try and get the best result 

out of that. 

Secretary PEREZ. I agree. I think we can thread the needle— 

Mrs. DAVIS. Thank you. 

Secretary PEREZ.—as long as we listen. 

Chairman KLINE. Gentlelady yields back. 

Mr. Secretary, I think we are going to make it. Pending the 

length of the ranking member’s closing remarks, we will be out of 

here before 12:00. 

Mr. Scott, you are recognized for any closing remarks? 

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Mr. SCOTT. Thank you, Mr. Chairman, and I will be brief. 

I just wanted to thank the secretary. Particularly, he mentioned 

the sensitivity of H–2B visas on the eastern shore. Certainly in 

Hampton, West Virginia, it is a huge issue and we appreciate your 

expeditious work on that, and on pensions. 

Having people get ripped off of their life savings by unscrupulous 

advice I think is something we need to protect against—and pensions generally, because you mentioned the multiemployer, all the 

pension—many pension funds are at risk and we need to make 

sure that they are protected. 

The economy is on the right track. We are going in the right direction. The growth has been consistent but, as we have said, not 

quite robust enough, so we still need to do more work. 

But we don’t want to go backwards, and we need to make sure 

that we have an effective Department of Labor so that you can continue the good work that you have been doing. That is going to require appropriate budget, and we will be reviewing that budget on 

your behalf. 

So thank you, Mr. Secretary, for being here. 

Yield back. 

Chairman KLINE. I thank the gentleman. 

Thank you again, Mr. Secretary, for being here. I think we have 

had a pretty robust discussion, covered a lot of ground. 

I appreciate your prompt and frank responses to questions on a 

wide variety of issues. Your department covers so many areas. 

It is very clear that we are going to disagree—probably you and 

I, and on each side of the aisle—on some of the issues about whether minimum wage should be established by states or the Federal 

Government, and so forth. But, I think the level of cooperation is 

very encouraging. 

We have got some very, very big jobs in front of us, including the 

continuing work to complete the work on the solvency of the PBGC 

and the multiemployer pension plans. I am looking forward to that 

work, and I thank you very much for being here today. 

There being no further business, committee stands adjourned. 

[Additional submission by Chairman Kline follows:] 

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[Additional submission by Mr. Sablan follows:] 

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[Questions submitted for the record and their responses follow:] 

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[Whereupon, at 11:50 a.m., the Committee was adjourned.] 

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