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[Senate Hearing 111-162]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 111-162
 
                             NOMINATION OF 
                   SETH HARRIS AND M. PATRICIA SMITH

=======================================================================

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                                   ON

 NOMINATION OF SETH HARRIS TO BE DEPUTY SECRETARY OF THE DEPARTMENT OF 
  LABOR AND M. PATRICIA SMITH FOR SOLICITOR OF THE DEPARTMENT OF LABOR

                               __________

                              MAY 7, 2009

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                                 senate

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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

               EDWARD M. KENNEDY, Massachusetts, Chairman

CHRISTOPHER J. DODD, Connecticut     MICHAEL B. ENZI, Wyoming
TOM HARKIN, Iowa                     JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland        LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico            RICHARD BURR, North Carolina
PATTY MURRAY, Washington             JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island              JOHN McCAIN, Arizona
BERNARD SANDERS (I), Vermont         ORRIN G. HATCH, Utah
SHERROD BROWN, Ohio                  LISA MURKOWSKI, Alaska
ROBERT P. CASEY, JR., Pennsylvania   TOM COBURN, M.D., Oklahoma
KAY R. HAGAN, North Carolina         PAT ROBERTS, Kansas
JEFF MERKLEY, Oregon
SHELDON WHITEHOUSE, Rhode Island

           J. Michael Myers, Staff Director and Chief Counsel

     Frank Macchiarola, Republican Staff Director and Chief Counsel

                                  (ii)

  

                            C O N T E N T S

                               __________

                               STATEMENTS

                         THURSDAY, MAY 7, 2009

                                                                   Page
Murray, Hon. Patty, a U.S. Senator from the State of Washington, 
  opening statement..............................................     1
    Prepared statement...........................................     2
Burr, Hon. Richard, a U.S. Senate from the State of North 
  Carolina.......................................................     4
Lautenberg, Hon. Frank R., a U.S. Senator from the State of New 
  Jersey.........................................................     6
Schumer, Hon. Charles E., a U.S. Senator from the State of New 
  York...........................................................     7
Harris, Seth, Montclair, NJ, Professor and Director of Labor & 
  Employment Law Programs, New York Law School...................     9
    Prepared statement...........................................    10
Smith, M. Patricia, Albany, NY, Commissioner of Labor, New York 
  State Labor Department.........................................    12
    Prepared statement...........................................    14

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Enzi, Hon. Michael B., a U.S. Senator from the State of 
      Wyoming, prepared statement................................    28
    Response by M. Patricia Smith to questions of:
        Senator Enzi.............................................    29
        Senator Isakson..........................................    30
        Senator Coburn, M.D......................................    35
        HELP Committee...........................................    36

                                 (iii)

  

                             NOMINATION OF 
                   SETH HARRIS AND M. PATRICIA SMITH

                              ----------                              

                         THURSDAY, MAY 7, 2009

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met at 10:03 a.m., in room SD-430, Dirksen 
Senate Office Building, Hon. Patty Murray presiding.
    Present: Senators Murray, Casey, Merkley, and Burr.

                  Opening Statement of Senator Murray

    Senator Murray. Good morning. This hearing of the Senate 
Health, Education, Labor, and Pensions Committee will come to 
order.
    First of all, I would like to extend my warmest wishes to 
our chairman, Senator Kennedy who, as we all know, continues to 
be a very great champion for America's workers. We all wish him 
the best.
    The Department of Labor is charged with a critical mission 
in our Nation's government that includes fostering and 
promoting the welfare of America's workers by improving their 
working conditions, advancing their opportunities for 
profitable employment, protecting their retirement and health 
care benefits, helping employers find workers, and 
strengthening free collective bargaining.
    Few things are more important during these challenging 
economic times than making sure that the agency charged with 
serving and protecting workers has the leadership it needs to 
make that mission a reality.
    So I am pleased today to have two nominees with us who have 
answered the call to service and are committed to the task at 
hand and are highly qualified for the job.
    Seth Harris has been a professor of law at the New York Law 
School since 2000 and is currently serving as a consultant at 
the Department of Labor. Seth helped lead the Obama 
administration's Agency Review Working Group on Education, 
Labor, and Transportation, and he has experience at the 
Department.
    From 1993 to 2000, he served in several roles at Labor, 
including Acting Assistant Secretary for Policy, Deputy 
Assistant Secretary for Policy, and senior advisor to both 
Secretary Alexis Herman and Robert Reich.
    M. Patricia Smith has been the Commissioner of New York 
State Department of Labor since 2007. She is co-chair of New 
York State's Economic Security Sub-cabinet, and oversees 3,700 
employees in 80 offices with an annual budget of $4 billion.
    For the previous 20 years, Tricia worked in the Labor 
Bureau of the New York Attorney General's Office, and she 
served on the Obama administration's transition review team for 
the Department of Labor.
    As chair of the Subcommittee on Employment and Workplace 
Safety, I know the challenges that America's workers are 
facing. So I am pleased that the Obama administration has made 
it clear that working families will once again be a top 
priority in this country. And that commitment is demonstrated 
by the quality of nominees before us today.
    If confirmed as Deputy Secretary, Seth will face the 
tremendous challenge of allocating and managing the 
Department's resources effectively in order to enforce the laws 
under the agency's charge. He will also be charged with 
connecting the efforts across Labor into a larger strategic 
plan to accomplish the Department's mission.
    If confirmed as the Department's top legal counsel, Tricia 
will have the profound responsibility of enforcing more than 
180 Federal laws and managing more than 450 attorneys 
nationwide. She will be responsible for defending the 
Department in litigation, as well as providing legal advice and 
guidance on nearly every policy, legislative, regulatory, and 
enforcement initiative of the Department. Most importantly, she 
will be responsible for defending the rights of workers when 
they are not able to speak for themselves.
    Both of you have a big job ahead of you, if you are 
confirmed, and working families need the Department to be the 
advocate Congress intended it to be, a charge that I know 
neither of you takes lightly.
    So I want to thank both of you for taking the time to be 
here at this hearing today and to take on these 
responsibilities. I have met both of you. I am confident that 
you are highly qualified for the positions you have been 
nominated for, and I hope that this committee can move the 
process quickly so that both of you can get to work. America's 
working families need a fully functioning Department of Labor 
now more than ever. So I, again, thank you both for taking on 
this responsibility and being here.
    I will turn it over for an opening remark from our 
colleague, Senator Burr.

                  Prepared Statement of Senator Murray

    This hearing of the Senate Health, Education, Labor, and 
Pensions Committee will come to order.
    First, I'd like to send my warmest wishes to our Chairman, 
Senator Kennedy, who continues to be a great champion for 
America's workers.&
    The Department of Labor is charged with a critical mission 
in our Nation's government that includes fostering and 
promoting the welfare of America's workers by: improving their 
working conditions, advancing their opportunities for 
profitable employment, protecting their retirement and health 
care benefits, helping employers find workers, and 
strengthening free collective bargaining.
    Few things are more important during these challenging 
economic times than ensuring that the agency charged with 
serving and protecting workers has the leadership it needs to 
make that mission a reality.
    So, I'm pleased to have two nominees with us today who have 
answered the call to service, are committed to the task at 
hand, and are highly qualified for the job.
    Seth Harris has been a professor of law at New York Law 
School since 2000 and is currently serving as a consultant at 
the Department of Labor. Seth helped lead the Obama 
administration's Agency Review Working Group on Education, 
Labor, and Transportation. And he has experience at the 
Department. From 1993 to 2000, he served in several roles at 
Labor, including Acting Assistant Secretary for Policy, Deputy 
Assistant Secretary for Policy, and senior advisor to both 
Secretary Alexis Herman and Robert Reich.
    M. Patricia Smith has been the Commissioner of the New York 
State Department of Labor since 2007. She is co-chair of New 
York State's Economic Security sub-cabinet, and oversees 3,700 
employees in 80 offices with an annual budget of $4 billion. 
For the previous 20 years, Tricia worked in the Labor Bureau of 
the New York Attorney General's Office. And, she served on the 
Obama administration's transition review team for the 
Department of Labor.
    As Chair of the Subcommittee on Employment and Workplace 
Safety, I know the challenges that America's workers are facing 
right now. And, I know the previous Administration's track 
record on putting workers first is less than stellar. So, I'm 
pleased that the Obama administration has made it clear that 
working families will once again be a top priority in this 
country. And that commitment is demonstrated by the quality of 
nominees before us today.
    If confirmed as Deputy Secretary, Seth will face the 
tremendous challenge of allocating and managing the 
Department's resources effectively in order to enforce the laws 
under the agency's charge. He will also be charged with 
connecting the efforts across Labor into a larger strategic 
plan to accomplish the Department's mission.
    If confirmed as the Department's top legal counsel, Tricia 
will have the profound responsibility of enforcing more than 
180 Federal laws and managing more than 450 attorneys 
nationwide. She will be responsible for defending the 
Department in litigation, as well as providing legal advice and 
guidance on nearly every policy, legislative, regulatory, and 
enforcement initiative of the Department. Most importantly, she 
will be responsible for defending the rights of workers when 
they aren't able to speak for themselves.
    Both of you have a big job ahead of you if confirmed. And 
working families need the Department to be the advocate 
Congress intended it to be--a charge that I know neither of you 
takes lightly.
    I want to thank both of you for taking the time to speak 
with me. After our conversations, I am confident that both of 
you are highly qualified for the positions you have been 
nominated for. And I encourage my colleagues to move through 
this process quickly, so you can get to work.
    America's working families need a fully functioning 
Department of Labor more than ever. So, thank you for being 
here.
    Before we hear from our witnesses, I'll turn to Senator 
Burr for his opening statement.

                       Statement of Senator Burr

    Senator Burr. I thank you, Madam Chairman. I welcome our 
witnesses today and look forward to their confirmation in the 
Senate. I will try not to hold my colleagues up who are here 
for an important reason, and that is to introduce them. But I 
do have an extended opening statement.
    I want to thank Senator Murray and thank Seth Harris and 
Patricia Smith, our witnesses today. They have been nominated 
to important positions in the Department of Labor. At a time of 
economic upheaval, we need a Labor Department that helps 
inspire the confidence that will allow America's economy to 
recover.
    Unfortunately, there are some early signs from the 
Administration that are troubling in terms of following the 
normal rulemaking procedures, and they concern me.
    Specifically, I am concerned by the economically damaging 
decision of the Department to reverse the recent improvements 
made to the H-2A temporary worker program. This decision is 
causing great distress to farmers across the country, including 
my State of North Carolina. I have written to Secretary Solis 
about the issue. However, her response was not reassuring. In 
fact, the letter was, in all candor, a nonanswer.
    Let me lay out the background here for my colleagues. On 
March 17, the Labor Department suspended the implementation of 
new regulations that were designed to improve the H-2A 
temporary worker program. The new rules were implemented on 
January 17, 2009 and were a collaborative effort that 
progressed through the traditional rulemaking process.
    The newly promulgated rules have been under development 
with input of Members of Congress on both sides of the aisle 
for over a year and are critical to the economic well-being of 
the agribusiness community in North Carolina and the entire 
United States. Farmers in my State have already made decisions 
about the 2009 growing season, taken out loans, made crop 
protection decisions, bought fertilizer and seed, rented land, 
made equipment decisions, and entered into marketing 
agreements. Many of these budgetary decisions were made on the 
Department of Labor's estimates regarding their expected labor 
costs to hire a legal workforce to man their fields.
    Changing the rules at this point without going through the 
traditional rulemaking process severely impacts farming 
operations and the financial stability of the agribusiness 
community. For example, according to North Carolina's 
Agribusiness Council, under this proposal a North Carolina 
farmer who employs 45 H-2A workers will have an added and 
unexpected expense to his budget this year of approximately 
$250,000. Given that farmers are in the business of growing 
commodities and have no way to increase the price of their 
product, they will have to make it up through tough decisions 
in extremely tough economic times. It is very important that 
many farmers in my State and other States throughout the Nation 
will be forced to suspend their operations for the entire year 
or longer as a result of an arbitrary agency decision.
    I am troubled by the lack of information that was provided 
to Congress and to my constituents about why this swift 
decision was made. I asked the Secretary of Labor for a 
detailed explanation of why she planned to suspend the newly 
implemented regulations that went through the extensive 
traditional rulemaking process, with contributions from various 
stakeholders as well as bipartisan Members of Congress.
    Mr. Harris is a nominee to a chief policy position at DOL. 
I want to explore this issue with you during the questions.
    The Secretary's letter stating that the Department cannot 
comment on the H-2A regulations because of pending legal 
challenges is difficult to accept. The Department and other 
agencies frequently comment on regulations that are the subject 
of litigation.
    The Administration lays out in its letter, and I quote, 
``evidence emerged that the Department of Labor and State 
workforce agencies lack sufficient resources to adequately 
implement the new rule.'' In fact, the final rule dramatically 
streamlined the H-2A application process for the Department and 
State workforce agencies, and some State workforce agencies 
actually opposed the suspension. It is difficult to understand 
how it can be said that agencies that were able to operate 
under the previous rule and which were presumably able to 
operate if the final rule were suspended would not be able to 
implement a rule that involved less work for agencies and was 
more streamlined.
    As you know, the Department of Labor received more than $80 
million in the stimulus package for various programs and 
functions, including oversight of existing worker laws. The 
language also gave the Department of Labor the discretion to 
transfer any or all of these moneys to the Employment and 
Training Administration which governs the H-2A program. In 
addition, the omnibus spending bill provided $82.6 million for 
migrant and seasonal worker programs. Both funding bills passed 
before the rule was suspended. To claim that there was not 
sufficient money is disingenuous.
    While we appreciate the expressed concerns about the 
economic recession and its impact on employers and employees, 
suspending a rule that farmers have justifiably relied on to 
make their hiring, planning, pricing, and other crucial 
decisions for the 2009 season has not been helpful. Creating 
regulatory chaos among farmers does not help farm workers. If 
the agricultural industry suffers because of this arbitrary 
decision, then American and guest workers will suffer lost job 
opportunities.
    In addition, increases in food costs that will result from 
these higher legal and labor costs that the Department is now 
imposing on farmers will adversely affect all Americans, 
especially those of limited means.
    The weakness of the Department's arguments concern us 
greatly as it leads us to believe that the Department has made 
an arbitrary decision to disregard the public rulemaking 
process purely to change with the views of the new 
Administration. In fact, our staffs have been told that because 
the improvements were implemented 3 days before the new 
Administration took office, that it was the prerogative of the 
new Administration to change them.
    The assertion has also been made that the 10-day comment 
period was acceptable because it was considered to be a simple 
decision to suspend implementation of a regulation.
    In addition, the Secretary's letter uses the pretense that 
the Department is reviewing the comments received by 
stakeholders. However, the day before the letter was sent, the 
Department submitted to the Office of Management and Budget a 
final rule on the suspension. This indicates to us that the 
Department has made up its mind contrary to the Secretary's 
letter to me. She is no longer considering these comments, 
which we were told largely opposed the suspension.
    Mr. Harris, the collective efforts of the American people 
to produce food should not be undermined by a mere change in 
Administrations. The improvements made to the H-2A program were 
the product of 18 months of work and collaboration in a 
bipartisan fashion through a public comment period and enjoyed 
the support of members on both sides of the aisle.
    That is because agricultural policy is not simply a matter 
of politics. It is a complex mixture of regional views, urban 
versus rural dynamics, environmental concerns, and many other 
factors. Due to this complexity, regulatory decisions made on 
agricultural matters are best made through a public rulemaking 
process that includes, not excludes, the view of stakeholders.
    Mr. Harris, I look forward to hearing your views on this 
matter and your read on why the Department is unable to carry 
out its responsibilities under the new regulations and why it 
decided to act outside the normal rulemaking process with 
little to no consultation with interested or impacted parties 
on this.
    Madam Chairman, I thank you for the available time to make 
my opening comments, and I yield the floor.
    Senator Murray. Thank you very much, Senator Burr.
    We have two of our colleagues who have joined our committee 
today to introduce their home State friends. Senator 
Lautenberg, if you would like to do your opening remarks and 
then Senator Schumer.

                    Statement of Senator Lautenberg

    Senator Lautenberg. Thank you very much, Madam Chairman, 
and thank you, Senator Burr, for being here.
    This is a wonderful opportunity when we have someone with 
the qualifications of Seth Harris, a New Jersey resident, a 
dedicated public servant. He served on a high post in the 
Clinton administration, academically well-qualified, also 
practiced law. So he has seen it from all aspects. He is 
President Obama's nominee to become our country's next Deputy 
Secretary at the Department of Labor.
    There is no more important concern that we have than what 
happens with the working public. Just yesterday, the statistics 
were released that indicated that there was a slowing down of 
the number of cases that would be applying for unemployment 
insurance.
    And by the way, forgive me for the moment, but that 
statistical base comes from a company called ADP. It is a 
company I was the founder of, and it has surpassed the Bureau 
of Labor Statistics for accuracy and timeliness.
    [Laughter.]
    Senator Schumer. Not after these two nominees.
    Senator Lautenberg. I have no pecuniary interest.
    [Laughter.]
    The members of this committee are acutely aware that we are 
struggling with the most severe economic crisis since the Great 
Depression. Back home in our State of New Jersey, Mr. Harris 
and I have seen the effects of this crisis firsthand. The 
unemployment rate in New Jersey is the highest it has been in 
15 years, and those men and women who still have jobs are often 
working longer, getting less for their labor. That means less 
money to pay for necessities, while the bills are piling up and 
collection agencies are calling.
    It also has a terrible effect on the attitude and on the 
feeling of safety that families have. It is a depressing 
moment, and we need all the work that we can get to help allay 
this problem for them and get them back into jobs. In these 
tough times, the work of the Department of Labor is critical 
and consequential. It helps workers find jobs. It helps 
employers find workers. And while they seek a job, unemployment 
insurance is a lifesaver. It monitors working conditions for 
people on the job. It makes sure that people get the benefits, 
labor rights, and retirement that they have earned.
    And if confirmed, Mr. Harris would be directly responsible 
for helping to meet those goals. He would be the second highest 
ranking official in the Department and would oversee its day-
to-day operation.
    Now, based on his years of expertise, his previous service 
at the Department of Labor, I believe that he is exactly the 
right person at the right time. And during the Clinton 
administration, Mr. Harris served as counselor to the Secretary 
of Labor and as Acting Assistant Secretary of Labor for Policy. 
He joined New York Law School's faculty in 2000, and today he 
is not only a professor, but Director of Labor and Employment 
Law Programs. Mr. Harris also has a distinguished educational 
background, receiving his bachelor's degree from Cornell 
University's School of Industrial and Labor Relations, his law 
degree from the NYU School of Law.
    David Harris knows what we need to protect our Nation's 
greatest asset, our workforce, and I believe that he uniquely 
possesses the skills and leadership ability to get that job 
done. I am proud to support his nomination, which I hope will 
be favorably considered very shortly.
    Thank you.
    Senator Murray. Thank you very much, Senator Lautenberg.
    Now we will turn to Senator Schumer. I note that 
Congresswoman Louise Slaughter was here a moment ago in support 
of Ms. Smith as well. Senator Schumer, we will turn to you for 
an opening statement.

                      Statement of Senator Schumer

    Senator Schumer. Thank you. I want to thank you for 
inviting me, Madam Chairwoman, and thank everybody for being 
here.
    It is my honor to introduce Patricia Smith, not only a 
fellow New Yorker, but I have just learned she lives three 
blocks away from me in Brooklyn. So she is a fellow 
Brooklynite.
    [Laughter.]
    But there are probably about 10,000 between her house and 
my house. So we do not know each other all that well.
    Tricia is a dynamic and accomplished public servant, and I 
am delighted to support her nomination to be Solicitor of the 
U.S. Department of Labor. She is a great fit for this position. 
She has devoted her life's work to advocating for the little 
guy. And as the Department's top lawyer, she will continue to 
vigorously protect and defend our Nation's workers.
    She earned her stripe in the New York State Attorney 
General's Office where she was head of the Labor Bureau, and 
over the course of over 20 years there, she developed a system 
of active labor law enforcement that has become the model for 
Attorneys General across the country. She even came to 
Washington, climbed those daunting steps, and argued two cases 
before the U.S. Supreme Court, and she won them both, like a 
true Brooklynite.
    [Laughter.]
    Not the Dodgers, but others.
    [Laughter.]
    Or rather, I should say, she did not win. The workers won 
since both cases involved protecting employee pensions.
    In 2007, because of her impressive work in the AG's Office, 
she was tapped to become Commissioner of the Department of 
Labor, and over the course of her tenure as Commissioner, she 
has proven to be a real policy innovator. Just last month, 
Tricia established a much-praised program to assist the 
unemployed with gas and public transportation costs associated 
with looking for work. She has established a Bureau of 
Immigrant Workers Rights to protect this particularly 
vulnerable group from exploitation. And time and time again, 
she has helped ensure that employers compete on a level playing 
field by going after businesses that violate minimum wage and 
overtime laws.
    From the moment she graduated from New York University Law 
School 32 years ago, she has been a crusader for workers 
rights. It is clear to me she has the experience, the moxie, 
and the heart necessary to excel as Labor Solicitor. I 
encourage the committee to approve this nomination with the 
certitude that Commissioner Smith's credentials merit. And I 
thank you, Madam Chair, for the honor of introducing her.
    Senator Murray. Thank you very much, Senator Schumer.
    With that, we are going to move to both of our nominees 
today. We are going to start with Mr. Harris. Mr. Harris, I 
understand you have some family members who are here to support 
you as well. If you want to take a minute before you do your 
statement to introduce them to us.
    Mr. Harris. Thanks. I actually have so many, I am just 
going to do my immediate family because it would take the rest 
of the hearing time. Thank you very much, Madam Chair.
    Let me start with the matriarch of our family, my mom, 
Martha Harris; the rock of our family and the love of my life, 
my wife Karen. Right behind me is my oldest son Jonathan, and 
here is my youngest son Daniel. They were the happiest to find 
out there was going to be a hearing because they really wanted 
to meet a real-live Senator.
    [Laughter.]
    Senator Murray. Well, there you go.
    Mr. Harris. Thank you very much, Madam Chair.
    Senator Murray. Well, thank you and thank you to all of 
your family for the sacrifice they are making as well.
    Mr. Harris, we will start with you.

   STATEMENT OF SETH HARRIS OF MONTCLAIR, NJ, PROFESSOR AND 
   DIRECTOR OF LABOR & EMPLOYMENT LAW PROGRAMS, NEW YORK LAW 
                             SCHOOL

    Mr. Harris. Thank you, Madam Chair, Senator Burr, and 
distinguished members of the committee, for inviting me to 
discuss my nomination to be the Deputy Secretary of Labor.
    Before we begin, I would like to join the Chair in paying a 
special tribute to Chairman Kennedy. His presence is felt today 
even though he is not participating in the hearing. I look 
forward, if confirmed, to renewing a close working relationship 
with him and working closely with all the members of the 
committee.
    Madam Chair, I am humbled to be sitting before you today. 
My grandparents fled the Czar's tyranny and deadly anti-
semitism to seek opportunity in this country, the opportunity 
to live the American dream. Through hard work, the support of 
their communities, the power of their unions, and well-timed 
assistance from their government, my grandparents built a life 
in the new world that gave my parents a chance at a secure 
place in the American middle class. They could not have 
imagined that their sacrifices and struggles would 1 day allow 
their grandson to stand at the threshold of high government 
office.
    I am a grandchild of immigrants and a child of the middle 
class. My parents were public school teachers. My dad taught 
and wrote about history. When he died, the headline of his 
obituary read, ``Jonathan Harris, Fought Racism.'' I hope that 
1 day my service can be summed up as simply and elegantly.
    My mom was a school librarian, and today at the age of 85, 
she still works in a public library near her home on Long 
Island. She is still giving back to her community, and I am 
very proud of her.
    Every American child should have the same chances my 
parents provided to my brother and me: a great education, a 
secure home, reliable health care, strong values, a welcoming 
community, and a family's loving support. And every American 
parent should be able to provide for their families and leave 
their children something more than they were given. My parents 
did that for me. My wife Karen and I are doing our best for 
Jonathan and Daniel.
    But today, parents across America are wondering what they 
will be able to leave to their children. Their homes are being 
foreclosed. Their jobs are disappearing, along with their 
health insurance. Decades of stagnant wages have left them with 
debts they cannot repay. Retirement for themselves and college 
for their children have moved out of reach. For too many of 
these parents, for too many working Americans, the American 
dream is slipping away.
    If I am confirmed, Madam Chair, I will work hard every day 
for these families. My simple goal will be to help the 
President and the Secretary to serve those workers who are 
struggling to secure their place and their children's place in 
the middle class. I will dedicate myself to making that 
American dream into a reality.
    The President and Secretary Solis will define the Labor 
Department's agenda. If confirmed, my role will be to implement 
that agenda. I view the Deputy Secretary as the chief operating 
officer of the Labor Department. And if I am confirmed, my job 
will be to manage the Department to meet the Administration's 
goals consistent with the President's and the Secretary's 
commitment to open government, responsible stewardship of the 
taxpayers' money, and broadly inclusive citizen engagement.
    One important part of my job will be to assure a collegial 
and cooperative relationship with the Department and the 
members of this committee, and if I am confirmed, I will do my 
best to lead by example.
    I would like to briefly mention five priorities that I 
would pursue as Deputy Secretary, and perhaps we will have a 
chance to explore them more fully in my answers to your 
questions.
    First, if I am confirmed, I intend to continue the Labor 
Department's longstanding commitment to strategic planning.
    Second, if confirmed, I will bring a strong commitment to 
accountability to the Department, accountability by clearly 
defining performance goals and measures, but also by inviting 
public examination. Open Government is not just a slogan or a 
policy position. It is a powerful management tool.
    Third, I believe the Labor Department must welcome working 
people and other stakeholders into its decisionmaking 
processes, as well as its programs. Americans should not need a 
lobbyist to have their voices heard in the Labor Department. 
This includes building constructive, problem-solving 
relationships with the unions that represent the Labor 
Department's employees.
    Fourth, if confirmed, I will work with the Secretary, the 
Office of Management and Budget, the members of this committee, 
and the members of the Appropriations Committees to produce 
departmental budgets that serve the Department's mission as 
effectively and economically as possible.
    And finally, if I am confirmed, I hope to help the 
Secretary build a management structure and a working 
environment that foster innovation, collaboration, creativity, 
and problem-solving.
    Madam Chair, thank you again for inviting me to testify 
before the committee today and I look forward to the 
committee's questions.
    [The prepared statement of Mr. Harris follows:]

                   Prepared Statement of Seth Harris

    Thank you, Madam Chair, Senator Enzi, and members of the committee 
for inviting me to share my views about the Labor Department and the 
role of the Deputy Secretary of Labor.
    Before we begin, I would like to pay special tribute to Chairman 
Kennedy. His presence is felt today even though he is not participating 
in this hearing. I look forward, if confirmed, to renewing a close 
working relationship with him and all of this committee's members.
    Madam Chair, I am humbled to be sitting before you today. My 
grandparents fled the Czar's tyranny and deadly anti-semitism to seek 
opportunity in this country--the opportunity to live the American 
Dream. Through hard work, the support of their communities, the power 
of their unions, and well-timed assistance from their government, my 
grandparents built a life in the New World that gave my parents a 
chance at a secure place in the American middle class. These working 
class Eastern European immigrants could not have imagined that their 
sacrifices and struggles would one day allow their grandson to stand at 
the threshold of high government office.
    I am a grandchild of immigrants and a child of the middle class. My 
parents were public school teachers. My Dad taught and wrote about 
history. When he died, the headline of his obituary read, ``Jonathan 
Harris, Fought Racism.'' I hope that, one day, my service can be summed 
up as simply and elegantly. My Mom was a school librarian. Today, at 
the age of 85 years, my Mom still works in a public library near her 
home on Long Island. She is still giving back to her community, and I 
am very proud of her.
    Every American child should have the same chances my parents 
provided to my brother and me: a great education, a secure home, 
reliable health care, strong values, a welcoming community, and a 
family's loving support. And every American parent should be able to 
provide for their families and leave their children something more than 
they were given. My parents did that for me. My wife Karen and I are 
doing our best for our sons, Jonathan and Daniel.
    But today, parents across America are wondering what they will be 
able to leave to their children. Their homes are being foreclosed. 
Their jobs are disappearing along with their health insurance. Decades 
of stagnant wages have left them with debts they can't pay. Retirement 
for themselves and college for their children have moved out of reach. 
For too many of these parents, for too many working Americans, the 
American Dream is slipping away.
    If I am confirmed, Madam Chair, I will work hard every day for 
these families. My simple goal will be to help the President and the 
Secretary to serve those workers who are struggling to secure their 
place and their children's place in the middle class. I will dedicate 
myself to making that American Dream into a reality.
    The President and Secretary Solis will define the Labor 
Department's agenda. If confirmed, my role will be to implement that 
agenda. I view the Deputy Secretary as the ``Chief Operating Officer'' 
of the Labor Department. If I am confirmed, my job will be to manage 
the department to meet the Administration's goals consistent with the 
President's and the Secretary's commitment to open government, 
responsible stewardship of the taxpayer's money, and broadly inclusive 
citizen engagement.
    One important part of my job will be to assure a collegial and 
cooperative relationship between the department and the members of this 
committee. If I am confirmed, I will do my best to lead by example.
    I would like to briefly highlight five priorities that I would 
pursue as the Deputy Secretary.
    First, if I am confirmed, I intend to continue the Labor 
Department's longstanding commitment to strategic planning. I began 
work in the Labor Department's Office of the Assistant Secretary for 
Policy not long after the Government Performance and Results Act (GPRA) 
was enacted in 1993. I also worked directly for Secretary Herman in 
1997 when the department undertook an extensive strategic planning 
effort pursuant to GPRA. I look forward, if confirmed, to re-engaging 
in the Labor Department's GPRA strategic planning process, consulting 
with this committee, other Members of Congress, and stakeholders, and 
working under the Secretary's direction with the Secretary's management 
team on the department's mission, performance goals, and performance 
measures.
    Second, if confirmed, I will bring a strong commitment to 
accountability to the Deputy Secretary's office. Employers, pension and 
welfare plans, and other entities regulated by the Labor Department 
must be held accountable when they fail to comply with the law. The 
department's grantees and contractors must meet their contractual and 
other obligations. The Labor Department's staff and agencies, including 
their highest ranking leaders, also must be held responsible for their 
performance. This commitment to accountability is inextricably bound up 
with clear defining performance goals and measures in the strategic 
planning process and beyond. But I am convinced that another important 
tool for holding the department accountable is to expose our 
department's performance, as well as the behavior of the communities 
regulated by the department, to public examination. Open government is 
not just a slogan or a policy position. It is a powerful management 
tool. If I am confirmed, I look forward to making it a regular part of 
how the Labor Department does business.
    Third, and building on the theme of open government, I believe the 
Labor Department must welcome working people into its decisionmaking 
processes as well as its programs. Americans shouldn't need a lobbyist 
to have their voices heard in the Labor Department. And they should not 
have to be part of a traditional stakeholder group before their 
concerns are taken seriously. All of the department's stakeholders 
should be welcomed, but I believe the Labor Department must do more to 
reach out. Using new information technologies and an increasingly 
diverse workforce with connections to American workers of every type, 
the Labor Department should be the people's department.
    Let me hasten to add that inclusive decisionmaking necessarily 
involves building constructive, problem-solving relationships with the 
unions that represent the Labor Department's employees. If I am 
confirmed, I expect to play an important role in that process. I do not 
mean that the answer to every union demand will be ``yes.'' But 
answering ``no'' will not mean that collective bargaining has failed. 
Like any human relationship, collective bargaining can be difficult on 
occasion. Nonetheless, I consider collective bargaining to be a 
necessary part of American democracy and I agree with the President 
that unions are an essential bulwark of the middle class. If I am 
confirmed to be the Labor Department's senior manager, I expect to live 
that value, even when it is difficult.
    Fourth, if confirmed, I will work with the Secretary, the Office of 
Management and Budget, and the members of this committee and the 
appropriations committees to produce departmental budgets that serve 
the department's mission effectively and economically as possible. 
Budgeting involves hard choices. The Labor Department must creatively 
leverage its limited human and capital assets to achieve the best 
possible outcomes for America's workers. But the department's resources 
must match the department's mission. If we expect safer and healthier 
workplaces, we must invest in OSHA compliance officers and build OSHA's 
standards capacity. If we expect out-of-school youth, workers with 
disabilities, and other disadvantaged workers to succeed in the labor 
market over the long term, we must fund the basic skills training, job 
training, and supportive services they need to succeed. If we expect 
military servicemembers to transition into middle-class civilian jobs, 
then we must assure they get credentials, transition assistance, and 
placement services.
    Finally, if I am confirmed, I hope to help the Secretary build a 
management structure and working environment that foster innovation, 
collaboration, creativity, and problem solving. We have not heard every 
good idea. We have not yet generated solutions to every conundrum. And 
we have not completed the list of every person who can contribute to 
the department's success. Ultimately, there can be only one final 
decisionmaker in the Labor Department and that is the Secretary of 
Labor. But Labor Department staff at every level and from every region 
can help the Secretary arrive at the best possible decision by 
providing her with the fullest possible information and the broadest 
range of ideas from which she can choose. It is management's task to 
build processes that make that happen. It is a task that I view as 
essential to moving the Labor Department into the future.
    Madam Chair, thank you again for inviting me to testify before the 
committee today. I look forward to your questions and the beginning of 
a long lasting dialogue with this committee.

    Senator Murray. Thank you very much, Mr. Harris.
    We will turn to Ms. Smith. I understand you have some 
family members as well in the audience, and if you would like 
to begin by introducing them to us, we would appreciate it.
    Ms. Smith. Thank you, Senator Murray. First I would like to 
introduce my parents, Mary and Perry Smith. And then I have a 
large extended family and only the lawyer contingent came. I 
would like to introduce my sister, Kathleen Delatch, and my 
niece Liz, both of whom are attorneys, and finally, 
unsurprising to me, my cousin, Charles Smith, who says he is my 
greatest fan and comes every time I come to Washington, is also 
here.
    Senator Murray. Well, we welcome all of you, and thank you 
for being here.

 STATEMENT OF M. PATRICIA SMITH OF ALBANY, NY, COMMISSIONER OF 
             LABOR, NEW YORK STATE LABOR DEPARTMENT

    Ms. Smith. Thank you, Madam Chair, Senator Burr, and 
distinguished members of this committee. I am honored to appear 
before you today as you consider my nomination as the Solicitor 
of Labor. I want to thank President Obama for nominating me and 
Secretary Solis for recommending me. If confirmed, I look 
forward to serving the American people and assisting the Labor 
Department in improving the opportunities for America's working 
families.
    I have spent my entire career in public service. I spent 10 
years at federally funded legal services programs. I then spent 
20 years in the Labor Bureau of the New York Attorney General's 
Office. I served at the pleasure of both Democratic and 
Republican Attorneys General, and I represented commissioners 
of Labor who were appointed by both Democratic and Republican 
Governors.
    At the Attorney General's Office, I represented the New 
York State Labor Department in litigation, primarily involving 
New York's little Davis-Bacon Act, Fair Labor Standards Act, 
Public Employee Health and Safety Act, unemployment insurance 
law, and Apprentice Training Program. I represented Governor 
Pataki and the Health Department in matters involving ERISA 
preemption before the U.S. Supreme Court.
    During the 8 years I served as Chief of the Labor Bureau, I 
opened many investigations and cases involving low-wage 
workers. The Labor Bureau also prosecuted contractors who were 
stealing taxpayer dollars on public construction projects by 
falsely claiming to be paying the prevailing wage. I took those 
cases because I believe that government must assist those who 
are least able to assist themselves. I also wanted to assist 
law-abiding employers who were at an economic disadvantage when 
their competitors are not complying with minimum labor 
standards.
    Recognizing that employers are not always aware of all 
their legal obligations, major enforcement initiatives were 
paired with Office of Compliance training. And believing that 
enforcement of the labor law should result in better jobs, not 
fewer jobs, I worked with employers who did owe back wages to 
enter into fair and reasonable payment plans.
    For the last 2 years, I have had the privilege of serving 
as New York's Commissioner of Labor. I brought my philosophy of 
proactive enforcement, balanced with compliance assistance, to 
that position. For example, we took proactive enforcement 
actions in the car wash industry in New York where we found a 
45 percent noncompliance rate statewide and 78 percent in New 
York City. In the racetrack industry, we found a noncompliance 
rate of 70 percent. In each of those cases, we followed up with 
an invitation to every car wash and every horse trainer in New 
York State to come to training sessions geared to their 
industry.
    As the head of the Mis-classified Worker Task Force, which 
was the first of its kind in the country, I worked with other 
State agencies to address the issue of employee 
misclassification. In 18 months, we identified over $157 
million in unreported payroll to over 12,000 New Yorkers.
    I also worked creatively to find ways to train, retrain, 
and attract a skilled workforce to meet the needs of New York 
businesses. Our menu of business services was enhanced, 
including providing technical assistance in new areas such as 
layoff aversion and expanding existing areas.
    I directed my business service staff to aggressively 
promote labor market and talent pool information. This critical 
information, along with information on grants and tax credits 
and no-cost department services such as human resources and on-
site OSHA consultation programs, became vital to new and small 
businesses in New York.
    Our ongoing communication with the business community 
helped us respond to the workforce needs of existing and 
emerging firms in New York. We refocused our WIA-funded 
programs on strategic industry clusters, and since the outset 
of this economic crisis, I have aggressively promoted the 
shared work program which averts layoffs by reducing the hours 
of workers and allows them to collect some unemployment 
insurance.
    If confirmed, I will bring my experience working with both 
the worker and the employer communities to the Solicitor's 
Office. The work of that office is critical to the Department's 
mission. The various agencies and departments within the Labor 
Department cannot by themselves secure full compliance with the 
law. They must have the full backing and the cooperation of the 
attorneys in the Solicitor's Office to prosecute violations.
    I believe that my combined experience as Commissioner of 
Labor and as an Assistant Attorney General prepare me well to 
serve as the Solicitor. If confirmed, I will do my best to 
promote and support the President's and Secretary Solis' 
agenda. As always, resources allocated to the mission of the 
Department are an issue. Therefore, I believe we must work 
harder and smarter with the resources that are already given to 
us. And if confirmed as Solicitor, I intend to work much more 
closely with the client agencies to make sure that the 
resources given to the Department are leveraged to their most 
efficient and their most strategic use.
    My experience has taught me that when executive agencies 
work together on common goals, that we can accomplish those 
goals with fewer resources, and I hope to work with other 
executive agencies.
    And finally, during my tenure as Commissioner of Labor, I 
had very good working relations with all the stakeholders and 
the New York Legislature, including both sides of the aisle. 
And if confirmed as Solicitor, I will endeavor to have the same 
productive and cooperative relationship with all the 
stakeholders who are impacted by the Solicitor's Office and 
with the members of this committee.
    Thank you.
    [The prepared statement of Ms. Smith follows:]
                Prepared Statement of M. Patricia Smith
    Thank You Madam Chair, Senator Enzi and distinguished members of 
the committee. It is an honor to appear before you today as you 
consider my nomination to be Solicitor of Labor. I want to thank 
President Barack H. Obama for nominating me and Secretary Hilda L. 
Solis for the confidence she has shown in me by recommending me for the 
position. I also want to thank my family members, especially my 
parents, and friends who are here supporting me today. If confirmed, I 
look forward to serving the American people and assisting the 
Department of Labor in improving opportunities for America's working 
families.
    I have spent my entire career in public service. Upon graduation 
from law school I spent 10 years at federally funded legal services 
programs, in Connecticut and Indiana, representing low-wage individuals 
primarily in employment and job training related areas. I then spent 20 
years in the Labor Bureau of the New York Attorney General's Office, 
serving at the pleasure of both Democratic and Republican Attorneys 
General and representing Commissioners of Labor appointed by both 
Democratic and Republican Governors. I served first as a supervisor, 
then as the Deputy Bureau Chief and finally as Bureau Chief managing a 
staff of approximately 30 attorneys.
    At the Attorney General's Office I represented the New York State 
Department of Labor in litigation primarily involving New York's little 
Davis-Bacon Act, Fair Labor Standards Act, Public Health and Safety 
Act, its Unemployment Insurance Law, and Apprentice Training Program. I 
defended the Worker's Compensation Board in appeals from its decisions. 
I represented Governor Pataki and the Health Department in matters 
involving ERISA preemption before the U.S. Supreme Court.
    During the 8 years that I served as Chief of the Labor Bureau I 
represented the People of the State of New York, opening investigations 
and bringing cases involving low-wage workers. These cases involved 
delivery workers, wait staff, kitchen staff, retail clerks, street 
vendors and bathroom attendants. Some of these employees worked long 
hours with no overtime, others worked at wages far below the minimum 
wage, others worked only for tips, and still others were not even 
allowed to keep all their tips. The New York Labor Bureau also 
prosecuted contractors who were stealing taxpayer dollars on public 
construction projects by falsely claiming to have paid workers the 
prevailing wage. We also worked with returning veterans, making sure 
they received all the benefits they were entitled to under New York 
Law.
    I took these cases, involving some of New York's most vulnerable 
workers, because I believe that government must assist those who are 
least able to assist themselves. I also took these cases to assist law 
abiding employers who are at an economic disadvantage when their 
competitors do not comply with minimum labor standards. Over the years, 
I have had employers ask me to investigate their industry for exactly 
that reason. Recognizing that not all employers are aware of their 
obligations under the law, all major enforcement initiatives were 
paired with offers of compliance training. And, believing that 
enforcement of the labor laws should result in better jobs, not fewer 
jobs, I worked with employers who did owe money to their employees to 
enter into fair and reasonable payment plans so that both they and 
their employees could thrive going forward.
    I believe that getting employers into compliance is the main goal 
of labor law enforcement. I worked with employer groups and worker 
groups to create an innovative ``Code of Conduct'' in New York's 
Greengrocer industry where we had seen a zero compliance rate with the 
minimum wage law. Employers who signed onto the Code agreed to come 
into immediate compliance with the law and have their compliance 
monitored by third parties. In turn, the Attorney General's office 
agreed that so long as the employer was in compliance, it would not 
investigate claims of prior wage underpayments. Over 200 Green Grocers 
signed onto the code, and after 2 years the compliance rate was over 98 
percent.
    For the last 2\1/2\ years I have had the privilege of serving as 
New York's Commissioner of Labor. In that capacity, I have managed a 
staff of nearly 4,000 employees and a budget of $11 billion. I brought 
my philosophy of proactive enforcement balanced with compliance 
assistance to this position. For example, we took proactive enforcement 
actions in the car wash industry where we found a noncompliance rate of 
45 percent statewide and 78 percent in New York City. In the race track 
industry, we found a noncompliance rate of 52 percent. In each case we 
followed up with an invitation to each car wash and each horse trainer 
in the State to come to training sessions around the State, tailored to 
their industry. I am pleased to say that over 50 percent of those 
employers took us up on that offer. I directed staff to change their 
practice and focus their routine compliance assistance efforts on small 
businesses, because I understand that they often don't have the use of 
a Human Resources manager to assist them in navigating their legal 
obligations. As the head of the Mis-classification Workers task force, 
the first one of its kind in the country, I worked with other State 
agencies to address the problems of employee workers misclassification 
as independent contractors or working off the books and identified over 
$157 million in unreported payroll to over 12,000 workers.
    Along with my philosophy of proactive enforcement, as Labor 
Commissioner I also worked creatively to help find ways to train, 
retain and attract a skilled workforce that meets the needs of New 
York's employers. I initiated this effort by establishing a new 
Division in the Department, the Division of Employment and Workforce 
Solutions, that brought together the formerly separate Wagner-Peyser 
funded and Workforce Investment Act-funded staff. This merged and 
streamlined Division enabled us to better align our workforce 
development efforts with our business outreach activities. As a result, 
our menu of business services was enhanced, including providing 
technical assistance in new areas such as layoff aversion, and 
expanding existing areas such as targeted recruitment for individual 
businesses.
    This first involved reshaping how traditional job fairs work and 
replacing them with career exploration job fairs that offer training 
and real job opportunities. I also directed my business services staff 
throughout the State to aggressively promote vital services and 
resources such as labor market and talent pool information to emerging 
businesses. This critical information, along with information on grants 
and tax credits and no-cost department services such as human resources 
and on-site Occupational Safety and Health Administration (OSHA) 
consultation programs, became vital to new and small business.
    Our ongoing communication with the business community helped us to 
better respond to the workforce needs of existing and emerging firms 
across the State. We accomplished this by refocusing our WIA-funded 
programs on strategic industry clusters in each region of the State and 
by requiring the local Workforce Investment Boards (WIBs) to enter into 
regional partnerships in order to access certain grant funds. We also 
applied this strategic concept to our WIA-funded incumbent worker 
training program, by giving priority to training that meets each 
region's growth strategy. Lastly, since the onset of the economic 
crisis and the need to help New York's employers, I aggressively 
promoted the Shared Work program which averts layoffs by reducing the 
hours of workers while also allowing them to collect unemployment 
benefits. The promotion of this program resulted in over 890 companies 
signing up since January of this year and thus saving over 15,000 jobs. 
It also prompted Scott Hollander, Vice President of Latham 
International, to say ``the Shared Work Program has helped us to save 
millions of dollars by avoiding the costs that often arise with 
turnover, hiring and lost productivity and it keeps people on the 
payroll and working.'' All of these programs became especially 
important as businesses struggle to remain competitive and weather the 
economic storm.
    With this wide range of improvement to the services the Department 
provides employers, I also worked on increasing our efforts to detect 
and prosecute Unemployment Insurance claimant fraud, in an effort to 
make sure employers are not paying unnecessarily higher tax taxes. 
Since early 2008, this enforcement effort resulted in over $17 million 
returned to the unemployment insurance trust fund.
    I am proud of my record thus far as Commissioner of Labor for New 
York and if confirmed, I will bring this experience working with both 
the employer and worker communities to the Solicitor's Office at the 
Department of Labor. The work of the Solicitor's Office is critical to 
the Department's mission. The various divisions and agencies within the 
Department cannot, by themselves, secure full compliance with the many 
important laws the Department is charged with enforcing. They must have 
the full backing and cooperation of the attorneys in the Solicitor's 
office to prosecute violators. The work of the Solicitor's office 
touches every area of the Department of Labor. While I am not 
knowledgeable in all the areas of law that the Department enforces, I 
believe that my combined experience as Commissioner of Labor and as an 
Assistant Attorney General has prepared me well to serve as Solicitor 
of Labor. I look forward to returning to being a full-time attorney.
    If confirmed, I will do my best to support the President's and 
Secretary Solis's agenda. As always, resources allocated to the mission 
of the Department are an issue. Therefore we must work harder and 
smarter with the resources we do have. If confirmed as Solicitor, I 
intend to work much more closely with the client agencies, Occupational 
Safety and Health Administration (OSHA), Mine Safety and Health 
Administration (MSHA), the Wage and Hour Division, Office of Federal 
Contract Compliance Programs (OFCCP), and the Employment and Training 
Administration (ETA), just to name a few, to assure that the resources 
given to the Department are leveraged to their most efficient and 
strategic use.
    My experience in the last 2\1/2\ years as head of the Mis-
classified Workers Task Force and as Co-Chair of the Governors Economic 
Security Sub Cabinet has taught me that when executive agencies work 
together on common goals, results are accomplished with fewer 
resources. I hope to work with other executive agencies, including the 
Treasury Department on mis-classified worker issues and all the 
agencies that have a role in enforcing the Davis-Bacon Act and the 
Services Contract Act.
    Finally, during my tenure as Commissioner of Labor, I maintained 
very good working relations with members of the New York legislature on 
both sides of the aisle. The Workers' Compensation Reform bill of 2007, 
which I helped negotiate, was praised by both business and labor and 
passed with broad bipartisan support. Last year the legislature passed 
a State WARN Act, again with broad bipartisan support. If confirmed, I 
will endeavor to have a similar cooperative and productive relationship 
with all stakeholders impacted by the Solicitor's Office and with the 
members of this committee.

    Senator Murray. Thank you very much.
    We will proceed to a round of questions of 5 minutes per 
Senator.
    I am going to start with you, Mr. Harris. Can you tell us 
how you would describe the bulk of your responsibilities at the 
Department if you are confirmed? Manager or policy advisor? I 
am sort of asking if you are going to keep the trains on track 
or if you are going to decide their destination.
    Mr. Harris. My view is that the Deputy Secretary is the 
chief operating officer, and the chief operating officer's job 
is to make sure that the trains meet the schedule. The 
Secretary and the President will define the schedule and the 
direction of the trains, if I can beat that metaphor into the 
ground.
    In the process of serving in the role of chief operating 
officer, I think it is unavoidable that there will be a process 
of winnowing options for the Secretary and trying to provide 
for her the best possible information. So I do not see myself 
as entirely disengaged from that policy process, but the 
Secretary will be the decisionmaker. My job will be to provide 
her with the staff work that she needs and then to implement 
her decisions after they are made.
    Senator Murray. I have heard some concerns from the 
Employment Security Department in my home State of Washington 
about the H-2A rule change. They have told me that they have 
concerns about having sufficient resources to implement the 
proposed rule, and they have expressed some concern about which 
rule to follow. Agriculture is very important in my home State 
of Washington, and I would think this complex issue needs some 
really serious thought.
    Is the Department of Labor taking every necessary step to 
review this rule to make sure that it balances the needs of all 
of the stakeholders that are involved?
    Mr. Harris. Well, Senator, I have not, as yet, played a 
substantive role in the H-2A regulation, but my understanding 
is that the process that the Secretary is going through, first, 
to try to get to a quick decision on the question of whether or 
not the rule is going to be suspended--and by the way, my 
understanding is that that decision has not yet been finalized, 
if it is going to be finalized at all. But to try to quickly 
get to your question, to create some time so that she can 
examine the rule and to assure that it strikes the balance that 
you are describing, balancing the legitimate interests of 
farmers that Senator Burr was talking about just a short while 
ago and having enough workers to till and pick their crops, the 
interest of American workers in having a shot at those jobs, 
and the interest of H-2A nonimmigrant workers in having fair 
pay and safe working conditions and good quality housing.
    So my understanding is that those substantive decisions 
have not been made and the Secretary's goal is to create the 
time in which to make them involving the members of this 
committee, involving all of the involved stakeholders, 
listening to the growers and the farm workers in Senator Burr's 
home State of North Carolina and your State of Washington.
    So I expect that if I am confirmed, although I will not be 
the one to write the rule and I will not be the one to decide 
what goes into the rule, it will be my job to make sure that 
all of those voices are heard in that process.
    Senator Murray. I appreciate that answer very much.
    Ms. Smith, if you are confirmed, what is going to be your 
approach as Solicitor of Labor? How are you going to prioritize 
your caseload?
    Ms. Smith. Well, Senator, that is a decision that I want to 
make in close consultation with the agencies who are the 
individuals who actually bring the cases.
    But I think that in the wage and hour area, one of the 
things that we do have to do is look at repeat violators and 
make sure that if you do have individuals who are repeat 
violators, that the full force of the law is brought against 
them. Those are individuals who we know are not violating the 
law out of ignorance since they have been in violation of the 
law before.
    I think that one of the other things that we really need to 
do is make sure that--I mean, as you know, the Solicitor's 
Office has 400 lawyers across the country in regional offices, 
and I think we really need to make sure that we have 
consistency of priorities around the country so that you get 
the same service from the Solicitor's Office in San Francisco 
as you do in Maine.
    Senator Murray. I understand that you undertook some pretty 
interesting enforcement efforts in New York with regard to an 
industry that had very low compliance with the law, Green 
Grocers, and through a combination of compliance assistance and 
enforcement and outreach, you really turned that industry 
around and it now has a very high compliance rate, it is my 
understanding. Can you share with us exactly what you did 
there?
    Ms. Smith. Well, after a number of years of bringing 
enforcement actions in the Green Grocer industry in New York 
City, which we had found had almost a zero compliance rate, we 
sat down with representatives of the industry, representatives 
of workers, and we drew up what we called the Green Grocer Code 
of Conduct. If Green Grocers signed onto that code of conduct 
and they agreed to come into immediate compliance with the law 
and they agreed to independent monitoring, that we at the 
Attorney General's Office would agree that we would not pursue 
claims against them for back wages that may have been owed. In 
New York City, we had over 200 Green Grocers sign onto that 
code of conduct. It was on for 2 years. Every single one of 
them was monitored, and by the end of that 2-year period, there 
was a 98 percent compliance rate in that industry.
    Senator Murray. Does that sort of exemplify your approach 
to how you are going to do your job?
    Ms. Smith. The Green Grocer Code of Conduct is one of the 
ways that I would look at doing my job. It really does require 
very specific circumstances to work. That is my experience. I 
have not quite been able to replicate that in New York, 
although we have had discussions. If I could replicate those 
circumstances, I am always open and willing to look into those 
type of agreements, yes.
    Senator Murray. Thank you.
    Senator Burr.
    Senator Burr. Let me thank both of you for being here, more 
importantly, for your families. Mr. Harris, I hope there is a 
strong genetic transfer trait in your family. Looking at your 
mother, you have got something to look forward to.
    Just to clarify I think something that Senator Murray 
raised, OMB put on their Web site last night that they had 
concluded review of the DOL rule. Now, that does not mean that 
the conclusion of that rule will be printed in the Federal 
Register today, but it clearly states that they had concluded 
their review of the DOL rule--final rule on H-2A--yesterday. So 
I am not exactly sure how much consideration of stakeholders 
has gone into the development of the rule or to the review of 
the rule, but clearly, those empowered with moving the process 
forward determined that should happen.
    Let me ask you, Mr. Harris, if I can, because you are not 
new to the Department of Labor. What is the standard time for 
public comment of rulemaking?
    Mr. Harris. Well, Senator, let me just say I am afraid it 
is an indication of how little I have been involved in the H-2A 
rule that I did not know that OMB had put that announcement on 
its Web site last night, and I apologize. I simply did not know 
that.
    My understanding is that the Administrative Procedure Act 
expects a comment period of somewhere between 60 and 90 days. I 
usually turn to my lawyer for advice on that kind of a 
question. But that is, I think in part, designed for 
complicated, substantive rules that go into great detail in 
implementing a program. The rule that was proposed in this case 
was a rule that simply dealt with the question of whether or 
not to suspend the existing H-2A regulation. As I understand 
it, the regulation that, as you just said, was approved by OMB 
or was decided about by OMB last night does not address any of 
the detailed substantive questions that one would have to 
address in the H-2A program. So a shorter timeframe might have 
been appropriate in that case, but the typical time period, as 
I understand it, is somewhere between 60 and 90 days.
    Senator Burr. And one would assume that when an affected 
population like farmers who are currently in the fields 
preparing and getting ready for the growing season, 10 days 
would not be sufficient for that community to respond. But yet, 
there were over 1,000 requests to the Department's proposed 
rule.
    Now, you are the one in your testimony that said you are 
basically the chief operating officer. If you are confirmed, 
and you are faced with a decision as to whether to carry out 
this ruling and you perceive that it has not been according to 
what the statute says for rulemaking, what are you going to do?
    Mr. Harris. Well, I would not be the one to decide. The 
Secretary would be the one to decide. My expectation is that, 
as in this case, she would turn to the staff in the Employment 
and Training Administration, to her Solicitor of Labor, to the 
career staff in the Solicitor's Office for advice about what is 
appropriate and what is not appropriate. My job would be to 
marshal those opinions to provide her with a reasonable set of 
options, a set of options that we collectively agreed were a 
set of reasonable options, and then she would make a decision 
based on those recommendations.
    I would expect there to be some back-and-forth, but I would 
not be the only one engaged in that back-and-forth. The 
incoming Assistant Secretary for Employment and Training would 
be in that discussion. Commissioner Smith, if she is confirmed, 
would be in that discussion. It would be a collaborative effort 
in trying to advise the Secretary in the best way to move 
forward.
    Senator Burr. Do you find it difficult to understand why 
DOL would change a rule right in the middle of the season?
    Mr. Harris. Well, my hope would be that we would try in our 
rulemaking process not to disrupt any industry in any 
rulemaking process. However, it is a necessary consequence if 
you are going to reconsider a regulation that was promulgated 
just before the President's inauguration that there may be some 
upset in that industry.
    But let me say I view one of my roles as the chief 
operating officer of the Department, if I am confirmed, to be 
to assure that the members of this committee, all the Members 
of Congress, and perhaps more importantly, their constituents 
have a full voice in this process and have the full 
opportunity, when the substantive regulation is considered, if 
one is in fact considered in this case, that their voices are 
heard.
    Senator Burr. Do you feel that 10 days was sufficient in 
this case?
    Mr. Harris. Well, again, in that case it was not the 
substantive rule. It was just the question of suspension.
    But as I understand it--I do not want to take up too much 
of your time, Senator--but as I understand it----
    Senator Burr. I have got all day.
    [Laughter.]
    Mr. Harris. And I am happy to stay.
    As I understand it, the suspension contemplates that if 
there is a reconsideration of the rule, there will be, I think, 
a 9-month period to get to final regulation on that substantive 
rule. And in that process, you have my commitment, Senator--and 
I know that this is a concern of yours and it is one that I am 
going to be sensitive to. You have my commitment that you and 
your constituents, the farmers that are so important to the 
economy of your State, are going to be heard in this process, 
the process of arriving at a substantive rule.
    Senator Burr. And I appreciate that. I realize my time has 
run out, and I will wait for the second round.
    But let me just say that the one thing that I think 
government has a responsibility to provide is predictability, 
and today we have farmers across this country, regardless of 
what State they are in, who do not know what rules they are 
following. They have a workforce that they have contracted to 
bring in that is now in question, due to the suspension of this 
rule. Arguments that the Secretary made about funding, 
hopefully, I have dismissed with the statement of amount of 
funding we have delivered in the stimulus package. But you said 
budgetary planning was a mission of yours.
    The Secretary extended to 90 days the requirement for 
farmers to actually advertise the availability of a job to 
American workers. That is the same 90 days that were required 
in the old rule. So it is not like we have enhanced the 
requirement up front to farmers to do that. It is just if this 
were suspended, that 90 days would go into the growing season 
which then puts in jeopardy one's ability to bring in that 
workforce in a timely fashion.
    But I will get to some other questions as we move to the 
next round.
    Senator Murray. And we will allow you to do that.
    Senator Merkley.
    Senator Merkley. Thank you very much, Madam Chair.
    Mr. Harris, in your testimony you describe, and I quote, 
``the American dream is slipping away.'' As you kind of step 
back and watch the last couple decades, why is the American 
dream slipping away?
    Mr. Harris. Well, I am afraid that is a complicated 
question, and I will do my best. But there are better policy 
minds, I think, than mine to get to that question.
    We have seen for decades now stagnant wages for middle 
class workers, particularly for men. We have seen a 
reconfiguration of our economy that has taken a lot of 
traditional middle class jobs and either shipped them overseas 
or, through technological change, they have just disappeared. 
We have seen rising consumer debt loads. We have seen families 
throwing additional members into the workplace. We have more 
two-working-parent families than we did, say, 30 or 35 years 
ago. Families are struggling. Families are struggling.
    And I know that this is a grave concern of both the 
President and the Secretary, and it is going to take a 
multifaceted approach to address those questions, particularly 
given the historic recession that we are now experiencing in 
our country where simply getting back to where we were, which 
was a circumstance where working families were not doing so 
well, is going to be a significant struggle and require 
substantial investment in recovery efforts. We are beginning to 
see some glimmers of hope, although not in the labor market 
right now.
    So I know the Secretary is very tightly focused on this 
question. It is something that she thinks about every day. I 
know the President, as you know, is very tightly focused on it, 
and I am looking forward to working with them.
    Senator Merkley. Thank you, Mr. Harris.
    One of the things that has been brought to our attention 
time and time again is that in the past, as productivity 
increased, the wages of working Americans increased. There has 
been a huge split in that with productivity continuing to 
increase at a significant rate, but many of the gains are 
really going to greater disparity with, as you point out, 
stagnant wages.
    What are the ways that the Department of Labor can help 
undertake restoring prosperity for the middle class?
    Mr. Harris. Well, I agree with you, Senator, that there has 
been rising wage inequality in our country. The workers' 
bargaining position in the labor market has gotten weaker. The 
Secretary has talked about this. The President has talked 
about, for example, that if we talk about having a strong 
middle class, one necessary component of that is having a 
strong labor movement.
    The Labor Department's role is to--there are many roles 
that the Labor Department can play. One is to help to assure 
that workers have the skills and the opportunities to get 
middle class jobs. Senator Murray has certainly played a 
critically important leadership role, along with Senator Enzi, 
on workforce development issues. And I know we are looking 
forward to the discussion about Workforce Investment Act 
reauthorization in that regard.
    The Labor Department assures that workers have secure 
retirements and get the pensions that they are promised. They 
make sure that workers' wages are not cut because of overtime, 
that workers are not discriminated against on the basis of race 
or sex. I think the Labor Department has a critical role to 
assuring that workers get the place that they are entitled to 
in the American middle class. And my job will be not so much to 
set the agenda to make sure that that happens, but to implement 
it to make sure that it happens.
    Senator Merkley. Mr. Harris, I want to thank you for your 
testimony and for your commitment to, as you put it, working 
hard every day for working families. We certainly have a lot of 
work ahead of us.
    I want to turn, Ms. Smith, and applaud you on your work in 
the Green Grocer area. I never could envision really an 
industry that had a zero compliance rate with minimum wage laws 
described in your testimony. The fact that you were able to go 
from 0 compliance to 98 compliance is a phenomenal 
accomplishment.
    How did you fare in these other areas that you had 
mentioned, in the car wash industry and did you say horse 
racing industry?
    Ms. Smith. The horse racing industry. That is right, 
Senator.
    We just conducted those investigations last summer. So we 
have not done our re-investigations yet. But I am pleased that 
when we did invite all the car washes in the State of New York 
and all the horse trainers to come into our training sessions 
afterwards, we had about 33 to 40 percent of the employers in 
those industries come in to our compliance assistance training 
sessions. So I am hoping that when we go back next summer and 
do a revisit to these individuals, we will see a much higher 
compliance rate.
    Senator Merkley. Great. For those who do not come in and 
work with your compliance program, then do you pursue 
investigations of failure to pay overtime, failure----
    Ms. Smith. Well, Senator, I would not make any assumptions 
about individuals who did not come into the compliance training 
sessions because there may well be individuals out there who do 
not need to come into it. They are very well aware of their 
obligations under the law. We did find that there was a 45 
percent noncompliance rate. That means that 55 percent of the 
car washes were in compliance. So we will continue to pursue 
investigations and re-investigations, but I would never presume 
that because someone did not come into a compliance training 
session, that meant they were in violation of the law.
    Senator Merkley. Let me put the question a little 
differently, and I will just wrap up with this, Madam Chair.
    On the one hand, you are saying work with us. Come into 
compliance. And you are really reaching out in a very positive 
fashion. But for folks within the industry who say, you know 
what, I am not paying the minimum wage or I am not paying 
overtime and I am not changing, do you then investigate and 
pursue----
    Ms. Smith. Oh, absolutely. We would investigate and pursue, 
and at least in New York, we would be imposing additional 
penalties on those individuals because since they did not come 
in and take advantage of our compliance offers and because they 
continue to be in violation of the law, we would impose willful 
penalties on those employers. And if they continued not to come 
into compliance with the law, I, which I have in the past, 
would recommend criminal prosecution of those employers.
    Senator Merkley. Well, thank you very much to both of you 
for your presentations and for your work on behalf of working 
Americans.
    Senator Murray. Thank you very much, Senator Merkley.
    Ms. Smith, let me go back to you again. This committee has 
had a number of hearings about workplace accidents in the 
aftermath of tragedies. One of the things that has really 
become apparent is that families of victims have very little 
say in OSHA's and MSHA's compliance decisions. And I wanted to 
ask you if you believe that OSHA and regional solicitors should 
consult more closely with the victims' families or injured 
workers when they are assessing penalties.
    Ms. Smith. Thank you, Senator. Yes, I do believe that they 
should consult more closely with the victims' families. I also 
believe in the wage and hour that victims, those underpaid 
workers, should be consulted when there are enforcement actions 
taken. I believe in a much more open and inclusive process of 
investigation, not that the victims' families or the victims 
themselves can dictate the decisions, but I definitely believe 
that their wishes and their perspectives have to be taken into 
consideration to make it meaningful enforcement.
    Senator Murray. I appreciate that. One of the things we 
have learned is often the victims' families know information 
that they are never asked about, and I would think that 
information is very important to reaching conclusions. So I 
appreciate that response.
    Mr. Harris, I wanted to ask you, as the Department's top 
manager, what will you do to help build a culture of innovation 
and creativity? I think I have heard from a lot of people 
within the Department that there is an employee morale problem. 
I wondered what you are going to do to address that.
    Mr. Harris. I think that the essence of creating that kind 
of environment is allowing the employees of the Department at 
every level in every region to understand that their voices are 
going to be heard, their views are important. Frequently they 
have information that is critical to the Secretary's 
decisionmaking and the decisionmaking of the Assistant 
Secretaries in their agencies.
    The idea that I have perfect information, as I walk through 
the door, if I am confirmed, is just fallacious on its face. I 
do not expect that I am going to know everything at any stage, 
regardless of how long I were to stay as the Deputy Secretary. 
I am going to rely very heavily on the Assistant Secretaries, 
the career managers, and working with the Department's unions, 
and the front line employees of the Department to learn what we 
can.
    There are going to be a lot of terrific ideas, and our 
challenge, using information technology, using the collective 
bargaining process, and just an open process with the unions is 
going to be to gather that information in a usable format. I 
mean, the Department does have more than 16,000 employees. So 
that could be a cacophony. We have to find a way to get it into 
a usable format so that it is employable in our decisionmaking 
processes at the relevant time.
    It is going to be a challenge, and I look forward to 
working with the Secretary who I know is deeply concerned about 
this question and with the other stakeholders inside the 
Department to make that a reality.
    Senator Murray. Well, communication within the Department 
is really important, fostering that. It is also important here 
in Congress. During the last Administration, it was 
challenging, to say the least, for us to get access to 
evaluations or reports on the Workforce Investment Act 
programs.
    Given your commitment to enforce open government and 
accountability at DOL, will you make access to evaluations and 
studies a priority across the Department?
    Mr. Harris. Absolutely, yes.
    Senator Murray. And we will take you up on that.
    Senator Burr, do you have any additional questions?
    Senator Burr. Yes, ma'am.
    Mr. Harris, you are currently in a consulting role with the 
Department of Labor. Correct?
    Mr. Harris. I am.
    Senator Burr. Were you consulted on this decision on H-2A?
    Mr. Harris. I did not play a substantive role, Senator. I 
think I exchanged a couple of e-mails and participated in one 
or two early staff meetings on this subject. I think the e-
mails I exchanged were simply about assuring that we had done 
the requisite congressional outreach and contact with the press 
on the subject. So I did not play a substantive role, no.
    Senator Burr. Did you get an affirmative answer on did they 
do appropriate outreach?
    Mr. Harris. I do not recall that I got any answer, Senator.
    Senator Burr. Let me propose or suggest that this possibly 
could be litigated. It has not been to this point. But I asked 
my staff to go through and find possible places of violation of 
law. They include the Administrative Procedure Act, 
specifically the 10-day comment period. Retroactive rulemaking 
because contracts are currently in place that would be affected 
by the change in the rule. The Fair Labor Standards Act because 
the original rule designates Christmas tree farmers were 
agricultural rather than forestry; therefore, they are exempt 
from overtime requirements. The regulatory Flexibility Act. As 
part of the rulemaking, DOL failed to include the required 
analysis to provide the public with an opportunity to comment 
on the analysis and failed to include a final analysis when 
publishing the Solis suspension final rule. Unfunded Mandates 
Reform Act. The Executive Order 12866, the regulatory planning 
and review. Executive Order 13132, federalism. The Executive 
Order 13175, consultation and coordination with Indian tribal 
governments. DOL failed to include the required tribal summary 
impact statements in the Solis suspension final rule. Section 
654 of the Treasury and General Accounting Appropriations Act 
of 1999. Executive Order 12630, 12988, and 13211. In all cases, 
DOL failed to include the evaluations sufficient to issue a 
final rule.
    Now, I would only ask both of you, have I identified things 
that you think are serious if they were in violation?
    Ms. Smith. Senator, I will answer that. I want to preface 
it by saying that I, obviously, am not knowledgeable about the 
H-2A rule suspension. My staff, as the Commissioner of Labor, 
did not even mention it to me.
    Senator Burr. And trust me. I am not trying to play 
``gotcha.'' I am just asking----
    Ms. Smith. No. I understand.
    Senator Burr [continuing]. Are these serious if they were 
violations?
    Ms. Smith. I am sure that there are violations there. You 
have mentioned at least a number of things that would be 
serious, yes.
    Senator Burr. Mr. Harris, would you agree?
    Mr. Harris. I would rely on my lawyer for answer to that 
question.
    [Laughter.]
    Or the Secretary's lawyer, I should say.
    The only thing I would add is that the Solicitor's Office 
was involved in this decisionmaking process, and I cannot say 
the extent to which they analyzed the specific questions that 
you raised. But they were involved in the process, and it would 
be their responsibility to offer legal advice to the Secretary 
on whether or not the Department, in proposing a suspension of 
the rule, was in compliance with all those requirements you 
listed.
    Senator Burr. So if a court reversed this decision, would 
you see that as a failure of the Department of Labor to fully 
vet the law and how they proposed rulemakings?
    Mr. Harris. Well, I would want to know why it was the court 
disagreed with the decision, and I would want to take a close 
look at that. And if Commissioner Smith is confirmed, I would 
want to have a long talk with her about what it was that 
happened.
    As you noted early on in your opening statement, the 
existing H-2A regulation is the subject of litigation as well. 
This is an area of sensitivity among stakeholders of all types. 
And so I do not think I would be surprised if any further 
action in this area were the subject of litigation, but as the 
chief operating officer, I would want to have a discussion with 
the Solicitor and the Employment and Training Administration 
staff about the processes they used to arrive at the 
conclusions they reached.
    Senator Burr. There is one thing that I think we all three 
will agree on. Court involvement does not grow the food we need 
in this country, and any confusion will, in fact, impact the 
prices.
    If the Chair would allow me to ask three more questions, I 
would be done at this hearing.
    Ms. Smith, Wage Watch was something that either you created 
or created while you were there. Can you share with me how that 
idea was hatched and how it was developed?
    Ms. Smith. Yes, Senator. My experience in New York is that 
we really do have a crisis about workers not getting what they 
are entitled to under the law in minimum wage or overtime. Wage 
Watch was basically modeled on Neighborhood Watch, which we 
examined and appears to be a very successful crime-fighting 
program, especially in New York. Just like the purpose of 
Neighborhood Watch is to get the public involved, that is the 
purpose of Wage Watch. I was concerned on two levels.
    The first was that I do not think that the concept of 
workers not getting the minimum wage and overtime is really as 
prevalent in the public's consciousness as it should be. I know 
when I go into a restaurant and I leave a tip, it goes through 
my mind, I hope this worker is actually getting this tip that I 
am leaving. But I do not know that that is true for the general 
public. So I wanted to raise the consciousness of the general 
public to this possible problem.
    The second thing is that we have limited resources in New 
York as we do everywhere in government. And I am very committed 
to the concept of education, both employer education and worker 
education. So the substance of Wage Watch's purpose is to 
engage groups to help us with education. So we have a pilot 
program which we have just begun. We have six groups which were 
picked on the basis of our prior experience with them, so I 
knew they were reliable and sensible groups. We developed 
training. We developed an agreement, and they have agreed to do 
educational events both for workers and employers.
    Senator Burr. But you reached out to individuals and groups 
to help craft the specifics of----
    Ms. Smith. Actually, no, Senator, we did not. This was an 
internally crafted group. It was only after we sat down and 
crafted it ourselves that we reached out to groups to see if 
they would be interested.
    Senator Burr. Have you had any discussions relative to your 
being at the Department of Labor that would extend Wage Watch 
in any fashion on a Federal level?
    Ms. Smith. No, we have not had any discussions of that. I 
have not had any discussions with the Department of Labor in 
New York about whether we would extend it across New York 
State.
    Again, it is a pilot program which we just did in January. 
We specifically limited it to a small number of groups, and we 
limited it to a small geographic area. We limited it to 
basically New York City, Long Island, the lower Hudson Valley 
so that we could assess what the successes would be, what the 
problems would be. I am happy to report that after what--since 
January, we have had no complaints about that program.
    Senator Burr. Well, if Senator Schumer were still here and 
heard you describe that portion of New York as a small area--he 
thinks that is 90 percent of the world.
    [Laughter.]
    So I am sure he might disagree with your statement.
    Ms. Smith. I cannot speak for Senator Schumer.
    Senator Burr. Nobody can.
    [Laughter.]
    I want to thank both of you for your indulgence of my 
questions and the fact that there were areas that we need to 
get into that deal with issues that you have not been involved 
in. But, hopefully, I have stressed with both of you that these 
are complicated issues that affect real people across the 
country. They are not Republicans or Democrats. These are 
individuals that are trying to maintain their livelihood. It 
requires planning. They have to make commitments, and sometimes 
government is blind to the expenses that we inadvertently put 
on the system.
    At the end of the day, it is the consumers of this country 
and around the world of agricultural products that will feel 
the unintended consequences of quick decisions, decisions that 
potentially went outside the framework of what we have built 
into the system to assure us of the transparency that you 
talked about earlier, Mr. Harris, the accountability that you 
talked about, the ability for strategic planning that you 
talked about, the accuracy of the budget, and more importantly, 
the third point that you said. We welcome stakeholders.
    You know, everything else may have worked technically to 
the letter of the law, but nobody will convince me that in this 
process, we welcomed the stakeholders to the table. I can 
question pretty thoroughly whether it was even attempted to 
review the thousand stakeholder comments that were made because 
had they been reviewed, I do not think we would quite be on the 
accelerated path that we are, having OMB already completed 
their review. And we will watch anxiously to see if they find 
fault with the process up to this point.
    Madam Chairman, I hope you will pass on to Chairman Kennedy 
that I hope we expedite these confirmations as quickly as we 
can. Again, I thank you.
    Senator Murray. Well, thank you very much, Senator Burr, 
and I will pass that on. I do hope we can move these 
expeditiously as well.
    And I want to thank both of our witnesses for being here 
today and participating in this important hearing.
    I want all members to know that they can submit additional 
questions to you, and we will probably do so for a written 
response. But I would encourage all of our members to do so 
before the end of the day tomorrow so we can move this process 
quickly and move these nominations forward.
    For members who want to submit their statements for the 
record, the hearing record will be open for 7 days.
    So, again, thank you to both of you for coming today, for 
your willingness to take on these incredibly important jobs.
    And, Mr. Harris, your two sons did a marvelous job sitting 
still behind you today.
    [Laughter.]
    I hope they are going to get to do something fun when we 
adjourn this hearing. Thank you very much.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

                   Prepared Statement of Senator Enzi

    I'd like to begin by thanking Senator Murray for holding 
this hearing today. Confirmation hearings for Presidential 
nominees are one of this authorizing committee's most important 
functions. Earlier this year, the Senate has confirmed two 
nominees who came before the HELP committee: Education 
Secretary Arne Duncan and Labor Secretary Hilda Solis. Last 
week, the committee took up and the Senate confirmed an 
additional eight labor and education nominees. We have made 
significant progress on nominations.
    Today, the committee conducts its Constitutional duty of 
``Advice and Consent'' on two senior positions at the Labor 
Department: the Deputy Secretary and Solicitor, the two most 
senior deputies to the Secretary. These positions carry 
significant responsibility within the Department, as well as to 
workers, businesses and retirees, to name just a few 
stakeholder groups. It is important that during this hearing we 
obtain an understanding of their management experience in 
preparation for these roles and their approach to the cross 
section of issues that fall under the Department's 
jurisdiction.
    Both Seth Harris and Patricia Smith have impressive 
academic credentials and are accomplished professionally in 
their own right. I commend them for their previous public 
service and willingness to go through the process of Senate 
confirmation.
    Today, I want to learn more about how they would approach 
the respective positions to which they have been nominated. I 
have reviewed each of these nominees' previous records of 
public service, and have already had a chance to ask Mr. Harris 
questions for the record. Based upon what I have learned about 
these two nominees so far, I am a bit concerned about the 
direction the Obama Department of Labor will take. While I 
fully recognize that I may take the philosophical opposite 
perspective from our nominees, I truly hope that they do not 
bring to the table an approach that creates an adversarial role 
against small businesses and all businesses in general. In this 
current economic environment, all employers, particularly small 
business, are struggling. In the last 5 months 3.3 million jobs 
have been lost, and 663,000 jobs were lost in the month of 
March alone. The unemployment rate currently stands at 8.5 
percent, and in many States it exceeds 10 percent. The Bureau 
of Labor Statistics has reported that job losses are large and 
wide spread across major industry sectors. As my colleagues 
probably know, tomorrow we will receive an update from Bureau 
of Labor Statistics on the employment situation for the month 
of April.
    I am particularly interested in your thoughts on whether it 
is part of the Department's mission to assist businesses in 
understanding and complying with Federal regulations--as well 
as your views on penalties and enforcement. President Clinton 
signed into the law the Small Business Regulatory Enforcement 
Fairness Act to help small businesses comply with Federal laws. 
I would hope that both nominees would voice their strong 
support for maintaining and strengthening this law to help 
small businesses comply rather than use the overly heavy hand 
of enforcement procedures. Because I have reviewed your 
records, I will have some specific questions for each of you 
related to your background, as well as additional questions for 
the record.
    I have particular questions and concerns with the so-called 
``Wage Watch'' program in the State of New York and the use of 
community and labor groups to enforce State labor laws. Since 
both of the nominees are from New York, I want to know your 
views as to whether this program is a suitable model for the 
Federal Government.
    I would also like to hear more from the nominees about 
their approach to regulating and their view on the role 
stakeholders play in that process. Would stakeholders describe 
your management style as inclusive and one that seeks input 
before judgment, or one that instead limits the discussion 
process? Especially given our current economic situation, 
stakeholder input from people who actually meet a payroll is 
essential for everyone at all levels of government. After all, 
the first rule of public service should be to ``do no harm.'' 
These are just a few of the areas I intend to touch on today.
    In closing, I would like to again thank Senator Murray for 
holding this hearing today.

       Response to Questions of Senator Enzi by M. Patricia Smith
    Question 1. It is my understanding that as Labor Commissioner in 
New York in 2007 you determined that any construction projects 
undertaken by charter schools in New York were subject to New York's 
prevailing wage law. It is also my understanding that prior to your 
decision, charter school construction projects had been treated as 
exempt from the State's prevailing wage law. What facts or legal 
opinions led you to reverse the treatment of these construction 
projects? Did you discuss this matter with any labor unions or their 
representatives, and, if so, what were the circumstances surrounding 
those discussions?
    Answer 1. In New York, administrative agencies are free to overrule 
or modify prior determinations so long as they sufficiently explain the 
different result. In August 2007, the Department of Labor concluded 
that charter school projects were subject to New York's prevailing wage 
law. The change brought the Department's position in line with a formal 
opinion issued on the matter by Attorney General Spitzer, 2000 Ops. 
Att. Gen. No. 2000-F3. The 2007 opinion letter concluded that charter 
schools meet both conditions of the test for application of the 
prevailing wage law first expounded by the New York Court of Appeals in 
Matter of Erie County Industrial Development Agency. Roberts, 94 A.D. 
2d 532 (4th Dept 1983) aff 'd 63 N.Y. 2d 810 (1984). It further relied 
upon a recent amendment to the prevailing wage law, known as the third 
party bill. The change from the prior position resulted from my 
conclusion that the prior position was a misapplication of the law. I 
also wanted to avoid confusion and clarify the matter for the public 
and the courts by reestablishing consistency between the positions of 
the Department, the agency charged with enforcement of the prevailing 
wage law, and the Attorney General's Office, which represents the 
Department in litigation. On September 10, 2007, I wrote the Charter 
Schools Institute, the New York State Education Department, and other 
interested members of the public to advise them of the Department's new 
position and its prospective application. I have attached both the 
opinion and the notification letter.
    The opinion was written after receiving a formal request for an 
opinion from the Painters Union. I never discussed the matter with any 
labor union or union representative prior to issuing the opinion.

    Question 2. Do you believe that charter schools that receive 
Federal funding for any purpose are subject to the Federal Davis-Bacon 
law with regard to any construction projects they undertake? If 
confirmed as Solicitor, would you seek to extend Davis-Bacon 
requirements to charter school construction projects?
    Answer 2. My opinion on the applicability of the New York 
Prevailing Wage Law was based solely on my analysis of New York's law. 
My understanding is that the Davis-Bacon Act and the approximately 60 
Davis-Bacon related acts have very different applicability provisions. 
The applicability of the prevailing wage requirements in any of the 
Davis-Bacon or related acts would depend upon the language in those 
statutes. If confirmed as Solicitor, and if the issue of the 
applicability of Davis-Bacon to charter schools arose, I would have to 
examine the language of relevant statutes in order to make such a 
determination.

    Question 3. It is my understanding that as Commissioner of Labor 
you created and approved a pilot program called ``Wage Watch'' that was 
designed to ``extend the reach of labor law awareness and enforcement 
into the community'' and ``find cases that might not otherwise come to 
the Department's attention.'' To implement this program your office 
engaged ``community'' and other groups to participate in increased 
education and reporting efforts. Among other things, participating 
groups were to ``conduct outreach to the public about labor laws'' by 
``handing out [official NY Department of Labor] brochures'' in places 
where the public gathers, such as ``supermarkets''; obtain information 
regarding potential labor law violations; and, fill out complaint forms 
regarding potential labor law violations.
    What groups did your Department enter into these agreements with?
    Answer 3. Make the Road New York; Centro del Inmigrante; UFCW Local 
1500; the Workplace Project; Retail Wholesale Department Store Union; 
and the Chinese Staff and Workers Association.

    Question 4. With respect to each group listed in your response to 
Question 3, please set forth the date or dates on which you had any 
written or oral communications, discussions or meetings with each group 
and/or any group representatives regarding the creation, development or 
implementation of the Wage Watch program, the names of all persons 
involved in such communications, meetings or discussions, and the 
substantive content of all such communications, meetings or 
discussions. Please forward to the committee any notes, memoranda, 
correspondence of any kind and any written materials related in any way 
to any such communications, meetings or discussions and a copy of any 
written communications.
    Answer 4. There was one meeting, on November 4, 2008, with many 
members of my staff including Terri Gerstein, Deputy Commissioner for 
Wage, Protection; Colleen Gardner, Special Assistant to the 
Commissioner; Lorelei Boylan, Director of Strategic Enforcement and 
Geovanny Trivino. Members from the groups listed above included Jeff 
Eickler from the RWDSU and Amy Carroll and Deborah Axt from Make the 
Road New York. There may have been other people from the RWDSU in 
attendance as well. I attended for about 15 minutes. My staff had done 
considerable work researching Neighborhood Watch and developing the 
concept of this initiative and felt it was time to present the 
Department's ideas for what is now known as Wage and Hour Watch, to 
gauge the possible interest of these two groups with whom we had worked 
and to get feedback. I have no written notes from the meeting. I was 
cc'd on a few e-mails which I am not able to include as I do not have 
the individual authority to release them. The e-mails are not mine but 
are the property of the State of New York. Committee members may 
request access to the e-mails by contacting the Governor's Counsel's 
Office in Albany. I have reviewed the e-mails and they discuss the need 
for objective criteria for choosing pilot participants, the need for 
and content of training for participants, the need for a written 
agreement, and the possible name for the pilot. I may have spoken to 
members of the other groups listed in response to Question 3 at the 
press event announcing Wage and Hour Watch on January 26, 2009 but 
there were no substantive discussions.

    Question 5. In addition to the groups referred to in your response 
to Question 3, and their representatives, please set forth the names of 
any other groups and/or persons, including but not limited to other 
local, State and Federal Government officials, that you had any written 
or oral communications, discussions or meetings with regarding the 
creation, development or implementation of the Wage Watch program; the 
date or dates of such communications, discussions and/or meetings, and 
a summary of the substantive content of all such communications, 
meetings or discussions. Please forward to the committee any notes, 
memoranda, correspondence of any kind and any written materials related 
in any way to any such communications, meetings or discussions and a 
copy of any written communications.
    Answer 5. At the November 4 meeting Raj Nayak from the National 
Employment Law Project attended and he was also on some of the e-mails 
discussed above. Starting in the summer of 2008 until the present I 
have discussed the Wage and Hour Watch pilot on dozens of occasions 
with members of my staff including, but not limited to, Mario Musolino, 
Executive Deputy Commissioner, Terri Gerstein, Deputy Commissioner for 
Wage Protection, Carmine Ruberto, Director of the Division of Labor 
Standards, Lorelei Boylan, Director of Strategic Enforcement, Colleen 
Gardner, Special Assistant to the Commissioner and Maria Colavito, 
Counsel.
    I have no written notes from the conversations nor can I pinpoint 
the exact dates. The conversations occurred in the course of daily 
business and my calendar does not show any staff meeting specifically 
devoted to Wage and Hour Watch. The purpose of the conversations was to 
discuss the concept and the scope of the initiative, to determine the 
geographic area the pilot would be conducted in, and to select groups 
for possible participation. Also discussed was the content of the 
required training.
    I was copied on a few e-mails that discussed the need for a written 
agreement and the content of a written agreement. I am not able to 
include them as I do not have the individual authority to release them. 
The e-mails are not mine but are the property of the State of New York. 
Committee members may request access to e-mails by contacting the 
Governor's Counsel's Office in Albany, NY. I have no further written 
communications or materials regarding those staff conversations.
    Beginning in the late fall of 2008, I also discussed the pilot on 
numerous occasions with Jeff Mans, the Deputy Secretary to the Governor 
for Labor and Financial Regulation. I have no written notes from the 
conversations and can not tell you on what days the discussions took 
place as I speak with Mr. Mans at least three times a week and there 
was never a conversation specifically devoted to the pilot. The purpose 
of the conversations was to apprise him of the Labor Department's ideas 
for the pilot and to get the approval of the Governor's office.
    On January 15, 2009 I sent an e-mail to my Labor Standards staff, 
explaining the pilot to them. I am not able to include it as I do not 
have the individual authority to release it. The e-mail is not mine but 
is the property of the State of New York. Committee members may request 
access to this e-mail by contacting the Governor's Counsel's Office.
    On January 30 I received an e-mail concerning the pilot from Ellen 
Chapnick, Dean for Social Justice Programs at Columbia Law School, 
offering law student assistance. I am not able to include it as I do 
not have the individual authority to release it. The e-mail is not mine 
but is the property of the State of New York. Committee members can 
request access to this e-mail by contacting the Governor's Counsel's 
Office in Albany, NY.
    I had a telephone conversation with the Assistant Counsel David 
Weinstein of the Governor's Counsel's Office, and Deputy Secretary 
Mans, on February 4. I answered questions about how the program 
operated. There are no written notes or other materials associated with 
the conversation.
    On March 17, I had a meeting with representatives from the Retail 
Council of New York State, the New York State Restaurant Association, 
the New York Association of Convenience Stores, the Food Industry 
Alliance of New York State and the Empire State Restaurant and Tavern 
Association. In attendance were James Sherrin, Ted Potrikus, Rich 
Sampson, James Calvin, Michael Rosen, Scott Wexler and Melissa 
Fleischot. I had received correspondence from the trade associations 
which can be found on the internet at www.nyacs.org/documents/
09wagewatch.pdf. The purpose of the meeting was to explain the pilot. I 
answered their questions about the program, gave them a copy of the 
agreement and the literature that is handed out and invited their 
associations to participate in the Wage and Hour Watch initiative if 
the pilot is successful. They asked for one change in the agreement, 
that Wage and Hour Watch groups be prohibited from giving out 
information about their group when they are doing Wage and Hour Watch 
activities. I agreed to make that change going forward and we have 
orally instructed the groups to refrain from that activity. I also 
asked them to report to me any issues or complaints their members were 
experiencing with the pilot and I have received no complaints from then 
to date. I have no notes from that meeting. I have attached the written 
information I provided to the meeting attendees. I also described this 
initiative for Jennifer Ludden of National Public Radio on April 29, 
2009.
    After the pilot was announced, my counsel, Maria Colavito, received 
correspondence from a wage survey company complaining of possible 
trademark infringement from the Department's use of the name ``Wage 
Watch.'' After consultation with the Attorney General's office the name 
of the pilot was changed to ``Wage and Hour Watch.'' There was a 
meeting on March 11, 2009 with myself, and as I recall, my counsel and 
Deputy Commissioner Gerstein to discuss the name change. There are 
several e-mails concerning the possible lawsuit, our possible response, 
and possible alternative names that could be used to avoid litigation. 
I am not able to include them as I do not have the authority to release 
them. The e-mails are not mine but are the property of the State of New 
York. Committee members may request access to these e-mails by 
contacting the Governor's Counsel's Office in Albany, NY.

    Question 6. Does the New York State Open Meeting Law apply to any 
of the discussions and/or meetings with non-governmental stakeholders 
regarding the creation, development or implementation of policy 
initiatives such as the Wage Watch program? If not, why not? If so, 
were all requirements of that law met with respect to any and all 
meetings and discussions that you had regarding the Wage Watch program?
    Answer 6. Meetings between the Department and entities who are 
interested in or participating in the Wage and Hour Watch initiative 
are not conducted as public meetings. This is because the Public 
Meeting Law (Public Officers Law, Article 7) applies only to meetings 
of ``public bodies'' for the purpose of conducting public business. A 
public body is defined in the statute as ``. . . any entity, for which 
a quorum is required in order to conduct public business and which 
consists of two or more members, performing a governmental function for 
the State or for an agency or department thereof . . .'' The Department 
of Labor is not an entity for which a quorum is required to conduct 
public business. Therefore, the Department staff or department heads do 
not constitute a public body for purposes of the Open Meetings Law. See 
Committee on Open Government, Opinion 2883. To interpret the law 
otherwise would require the Department to treat all of its interactions 
with constituent groups, regulated parties, advocates, or the public as 
gatherings subject to the Open Meetings Law.
    Nor are the Wage and Hour Watch groups ``public bodies'' within the 
meaning of the law. The groups that volunteer for the Wage and Hour 
Watch are not acting on behalf of the Department of Labor and are not 
performing a government function, as the agreement with them makes 
explicit. In fact, we rejected a suggestion that Wage Watch 
participants should become ``the Commissioner's ``authorized 
representative,'' as one group requested.

    Question 7. Did you seek to engage any employer groups as ``Wage 
Watch'' participants? If not, why not?
    Answer 7. We did not seek to engage any employer group in the Wage 
and Hour Watch pilot because none of them met the criteria we had 
established for pilot participants: the referral of at least 10 cases 
to the Department or the Attorney General of New York in the last 2 
years. As I noted before, I did ask a number of employer associations 
to participate in the program if it is continued after the pilot and 
they agreed to consider the invitation.

    Question 8. Since most of the organizations involved were labor 
unions, did the Department ever consider that such groups might seek to 
use their status as Wage Watch participants to further their efforts to 
unionize unorganized employers?
    Answer 8. Most of the groups in the pilot are not labor unions but 
community groups, usually known as worker centers. These organizations 
do not organize individuals into unions. There are two unions 
participating. In order to avoid the possibility you raise, we 
instructed them not to use their status as Wage and Hour Watch groups 
as a union organizing tool. In order to implement this instruction, in 
the required training sessions, participants are taught to introduce 
themselves using their name and their group, not by Wage and Hour Watch 
or the Department of Labor. They are required to participate in role 
plays where we can see how they introduce themselves and what they say 
to employers and employees. They are taught that they may not hold 
themselves out as employees or a subdivision of the State or the 
Department and any violation of this requirement is grounds for 
immediate termination from participation in the program.

    Question 9. What safeguards were in place to prevent such misuse of 
the program? Please attach the oversight and enforcement guidelines for 
groups participating in Wage Watch.
    Answer 9. Please see my answer to No. 8, above. Participants were 
told that they would be terminated if they misused the program. To date 
we have received no complaints from any employers who have been visited 
by Wage and Hour Watch groups. A copy of the current agreement is 
attached to the response to question 5.

    Question 10. Did the Department ever consider that since these 
efforts were targeted at legally unsophisticated workers, many of whom 
were likely to have language issues, and that the participants were 
passing out official NY Department of Labor materials, that there might 
be considerable risk that workers would view Wage Watch participants as 
government ``officials?''
    Answer 10. Yes. In the required training sessions participants are 
taught that they may not hold themselves out as employees or a 
subdivision of the State or the Department and any violation of this 
requirement is grounds for immediate termination from participation in 
the program. We instruct them to introduce themselves using their name 
and their group, not by Wage and Hour Watch or the Department of Labor. 
They are required to participate in role plays where we can see how 
they introduce themselves and what they say to employers and employees.

    Question 11. Wage Watch members were to be given a ``certificate of 
membership.'' Was that certificate signed by any NY State official? Did 
it contain the NY State seal, or any other markings that would make it 
appear ``official?'' Could you forward a blank copy of the membership 
certificate to the committee?
    Answer 11. Participants are given a ``Certificate of Completion'' 
which is modeled on the certificate that was given to all greengrocer 
employers who completed training sessions after signing on to the 
Attorney General's Greengrocer Code of Conduct. It is attached. They 
are also given a card to carry with them, which is also attached.

    Question 12. Labor law ``education,'' complaint preparation and 
associated ``enforcement'' activities are the statutory responsibility 
of the NY State Department of Labor, and its duly authorized employees. 
Why did you believe it was necessary or prudent to deputize, or grant a 
quasi-official role to outside organizations to also perform these 
functions, particularly where the groups you selected might plainly 
have had ulterior motives for their participation?
    Answer 12. This program was modeled on the successful Neighborhood 
Watch Program. While the police have the statutory duty to investigate 
crimes they use Neighborhood Watch programs to involve ordinary 
citizens in efforts to keep their communities safe and increase the 
reach of law enforcement in their neighborhoods. Similarly, in Wage and 
Hour Watch, these groups are not authorized to perform any enforcement 
activities and all investigation of complaints is done solely by the 
Department and not the groups. Their role is limited to doing outreach 
and community education and to report any violations they encounter to 
the Department. I thought it was prudent to engage outside groups 
because the Department has very limited resources relative to the 
number of employers in the State and with the current fiscal crises is 
facing reductions in staff in this area. This involvement allows the 
Department to have a broader reach and use more of its limited 
resources on investigating cases. Labor law violations are rampant in 
many industries and areas of the State and the activities these groups 
are engaging in will promote employer compliance.

    Question 13. Have you discussed with anyone, including, but not 
limited to, any Federal official, nominee, appointee, employee, 
stakeholder, union or community organization representative, 
Administration representative or official representative of President 
Obama's Transition Team, the idea of making the NY Wage Watch program a 
national program for any Federal labor laws?
    Answer 13. No.

    Question 14. Please provide that name(s) of any individual(s) or 
group(s) with whom or which you have had any written or oral 
communication, or met with and/or discussed, the possibility of 
creating, developing or implementing any program like Wage Watch with 
respect to any Federal labor laws, and in each instance please provide 
the dates of any and all such communications, meetings or discussions, 
and a summary of the substantive content of all such communications, 
meetings and discussions. Please forward to the committee any notes, 
memoranda, correspondence of any kind and any written materials related 
in any way to any such communications, meetings or discussions and a 
copy of any written communications.
    Answer 14. None.

    Question 15. In light of your support for the Wage Watch program in 
New York, would you advocate utilizing the same approach for other laws 
that impact the workplace? For example, would you support the State of 
New York or the Federal Government entering into a Wage Watch-type 
agreement with groups such as the Minutemen Project to ``extend the 
reach of awareness regarding illegal immigration and enforcement into 
the community?''&
    Answer 15. This initiative was designed as a local model in a 
limited geographic area in a State, for a particular issue under a 
particular statute. It was not designed for other laws or to be used on 
the Federal level. Until the pilot is completed and evaluated, I would 
not advocate expanding it to other areas in New York, to other areas of 
the country, to the Federal level or to other Federal or State laws.
     Response to Questions of Senator Isakson by M. Patricia Smith
    Question 1a. Recently, 19 opinion letters were withdrawn without 
substantive reason even though substantial effort had been expended by 
the previous Administration in developing an answer. The only 
explanation provided was,

          ``It does not appear that this response was placed in the 
        mail for delivery to you after it was signed. In any event, we 
        have decided to withdraw it for further consideration by the 
        Wage and Hour Division.''

    Does this response endanger the opinion letter process by allowing 
any administrator to withdraw a letter simply because it was signed 
under a previous Administration?
    Answer 1a. I am not familiar with the process used by the Wage and 
Hour Division (WHD) for drafting and issuing opinion letters or 
evaluating whether or not to withdraw them. In addition, I have no 
knowledge of the facts and circumstances surrounding the 19 opinion 
letters referred to in your question. However, I understand that the 
issuance of opinion letters play a significant role in helping both 
employers and workers understand their rights under the Fair Labor 
Standards Act. If confirmed as Solicitor, I look forward to making sure 
that the Office of the Solicitor provides adequate legal support to the 
WHD with respect to the opinion letter process as well as other issues 
confronting that agency.

    Question 1b.  The Wage and Hour Division noted that the withdrawal 
of the official signed and dated opinion letters was done in accordance 
with the Department of Labor's interpretive guidelines under 29 CFR 
Sec. 790.17(d). That section states, ``Opinion letters of an agency 
expressing opinions as to the application of the law to particular 
facts presented by specific inquires fall within this description.'' 
Similarly, it has always been the practice of previous Administrations 
to only withdraw issued opinion letters based on specific inquires 
asking for rescission or a change of opinion. Do you agree that this is 
the preferred method and will you follow this precedent?
    Would the Administration's claim of transparency be furthered by 
allowing the department to withdraw letters without any record of a 
request?
    Answer 1b. As discussed in my response to question (1a), above, I 
am not familiar with the legal issues involved in the Wage and Hour 
Division's withdrawal of opinion letters or the practice of previous 
Administrations with respect to such withdrawals. If confirmed, I hope 
to work with WHD to assure that the process for issuing and withdrawing 
opinion letters results in guidance to the regulated community that is 
both clear and transparent.

    Question 2. Last year, you told the New York Times that you had 
``made the determination that it would be better for workers to lose 
their jobs than to continue working there.'' How do you make a 
determination that you know better than workers what is in their best 
interest?
    Answer 2. I was making the same determination, that workers who 
have acquired knowledge of this employers' illegal and abusive business 
practices routinely made, to get out. This employer had been under 
investigation by both the Labor Department and the Workers Compensation 
Board for over a year when I made this statement. He had been in 
business for a long time, changing names and filing for bankruptcy to 
avoid paying debts. He refused to come into compliance and despite 
several visits and notices of violation he continued his illegal and 
abusive practices. When this employer hired a new worker they were told 
their first 2 weeks pay would be put in the ``kitty'' and they would 
get it when they left. During this investigation many workers quit 
because they were not getting paid and I am aware of no one who ever 
received their first 2 weeks pay. After the first 2 weeks this employer 
routinely did not pay or paid by bad checks. When he did pay he paid 
$50 per day for 12- to 14-hour shifts. He used threats to keep 
employees under his control. He deducted taxes from the workers wages 
and never remitted them to the tax authorities.
    In my experience, when this employer's workers finally learn what I 
learned in the investigation, they routinely quit. But at that point 
they are owed anywhere from 4 weeks to 6 months pay. When a worker 
quits, this employer simply hires another one and the pattern of abuse 
began again. This employer currently owes over $600,000 to 22 workers 
and had hidden his assets (he lives in what the police described as one 
of the largest homes in the Bronx that is owned by his 26-year-old son) 
such that I am unsure that these or any other workers would be able to 
get the money for which they have worked so hard. He is now being 
prosecuted by the New York State Attorney General office for multiple 
felonies arising out of these illegal business practices.

    Question 3. Do workers have a right to a secret ballot when making 
a decision on unionization? Should they?
    Answer 3. The Solicitor of Labor does not enforce organizing law, 
rather, that enforcement responsibility lies with the National Labor 
Relations Board. Having said that, I personally believe that workers 
have a right to genuine workplace democracy in which they can choose 
whether or not to join a union free from coercion, and there are a 
number of factors leading up to the actual practical process of the 
election that must be taken into consideration in making a 
determination as to whether the election meets basic labor standards.

    Question 4. With regard to your ``Wage Watch'' efforts in the State 
of New York, do you see the possibility of instituting similar efforts 
on the national level?
    Is there an application of this concept to education efforts and/or 
enforcement of the Labor-Management Reporting and Disclosure Act? How 
about immigration laws? Which groups would be appropriate partners for 
the government in these efforts?
    Answer 4. This program is still just a pilot program in one region 
of New York, and hasn't been implemented statewide. Until the pilot is 
completed and evaluated, I would not consider or advocate expanding it 
across New York, to other parts of the country, to the Federal level or 
to other laws.
   Response to Questions of Senator Coburn, M.D. by M. Patricia Smith
    Question 1. President Obama has been a champion of government 
transparency during his time in the U.S. Senate and campaigned on a 
promise to make the Federal Government more transparent. What is your 
philosophy on transparency?&
    Answer 1. Throughout my career, I have supported and welcomed 
transparency, because it is the best way to make sure that members of 
the public can participate in an effective and accountable government.

    Question 2. Currently all recipients of Federal grants, contracts, 
and loans are required to be posted online for public review. Do you 
support making all Federal assistance including subcontracts and sub-
grants transparent in the same manner?
    Answer 2. In general, as I said before, I support transparency and 
accountability in government. I would support publicly posting this 
information to the extent practicable, except in cases where there are 
genuine privacy concerns.

    Question 3. Will you commit to ensure the Department fully 
implements all aspects of the Federal Funding Accountability and 
Transparency Act (P.L. 109-282) at the Department of Labor?&
    Answer 3. The Secretary has stated public support for this 
legislation, as has President Obama who co-authored this legislation 
and worked with you to secure its passage. It is my commitment to 
enforce all Federal laws under the Department's jurisdiction, including 
this important law.

    Question 4. President Obama's transition Web site said this about 
how Cabinet agencies will operate: Conduct Regulatory Agency Business 
in Public: Obama will require his appointees who lead the executive 
branch departments and rulemaking agencies to conduct the significant 
business of the agency in public, so that any citizen can see these 
debates in person or watch them on the internet.
    Have you considered how you will implement this transparency 
mandate in your position should you be confirmed?&
    Answer 4. I have not had an opportunity to learn or evaluate how 
the Office of the Solicitor participates in rulemaking activities at 
the Department of Labor. However, I intend to work closely with the 
leadership team at the Department to maximize public transparency with 
regard to the decisionmaking processes at the agency.

    Question 5. Will you commit to fully cooperate and assist me and my 
staff in our efforts to conduct oversight of Department of Labor 
programs especially those under your authority?
    Answer 5. If confirmed, I will do my best to respond promptly and 
fully to all reasonable requests for information or assistance from 
members of the committee, including those relating to oversight of 
Department of Labor programs. I hope to maintain a productive working 
relationship not just with this committee, but with all Members of 
Congress.

    Question 6. Have you considered any replication of the ``Wage 
Watch'' program or similar program(s) at the Federal level?&
    Answer 6. This initiative was designed as a local model for a 
limited geographic area in a State, rather than at the Federal level. 
Until the pilot is completed and evaluated, I would not consider or 
advocate expanding it to other areas in New York, to other areas of the 
country, to the Federal level or to other laws.

    Question 7. The D.C. Circuit Court of Appeals held recently state 
that teacher unions are under the same Labor Management Reporting and 
Disclosure Act of 1959 reporting requirements as national teacher 
unions. The decision to apply LMRDA transparency reporting requirements 
to State teacher unions was advanced by the Department of Labor to 
foster increased information for State teachers across the country. 
Will you commit to uphold and advance this important Department 
position to seek transparency from State affiliates of national 
organizations that must comply with LMRDA?
    Answer 7. I have not yet become familiar with this case and the 
legal issues it addresses. However, as I have said in confirmation 
meetings, I believe in strong and balanced enforcement of the LMRDA. If 
confirmed as Solicitor of Labor, one of my principal functions will be 
to provide the Secretary with legal advice as to the Department's 
responsibilities under the laws it administers and enforces so that she 
has the benefit of this information as she implements her priorities 
and those of the Administration.
  Response to Questions of the HELP Committee by M. Patricia Smith \1\
    Question 1. To what degree, if any, have you been consulting with 
U.S. Department of Labor officials pending your nomination? Have any of 
your staff consulted on your behalf? What were the nature and substance 
of any conversations? Have you been provided with any documents by U.S. 
Department of Labor staff? If so, please provide them in full to the 
committee.
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    \1\ The committee took care to only include non-confidential 
documents and information based on those documents in these questions 
that will be given to the clerk for inclusion in the official public 
record. We believe we segregated the question based specifically on 
confidential documents and information into a separately labeled 
confidential request. Should you have concerns with the documents or 
information referenced herein being included in the public record, 
please contact the committee to discuss those concerns.
---------------------------------------------------------------------------
    Answer 1. I have consulted and received advice from the 
Department's ethics attorneys in connection with my financial 
disclosure report and the ethics requirements applicable if I am 
confirmed as Solicitor of Labor. I also attended a portion of a meeting 
of the senior managers of the Office of the Solicitor, when I was in 
Washington on other business in April 2009, to introduce myself.
    I have consulted with the Office of Congressional and 
Intergovernmental Affairs (OCIA) during the committee's consideration 
of my nomination, including in preparation for meetings and in 
responding to the committee's written questions. In preparation for my 
confirmation hearing, OCIA provided me the questions for the record 
asked by this committee of the Secretary in her confirmation hearing, 
along with her answers, and met with me to review questions that would 
likely be asked of me in my hearing. A few political appointees in the 
Office of the Secretary participated in a mock hearing in preparation 
for my confirmation hearing. In addition, the Director of 
Intergovernmental Affairs at the New York State Department of Labor, 
Patricia Fahy, had one conversation with OCIA concerning the status of 
my nomination.
    I have also discussed possible candidates for positions in the 
Solicitor's Office with the Labor Department's White House Liaison. I 
have received approximately 10 resumes from the Labor Department's 
White House Liaison, but I have not made any hiring decisions. Because 
those resumes contain personal information and the individuals do not 
necessarily know their resumes were sent to the Labor Department I have 
not included them. I also received from the Labor Department a 
forwarded request to attend a Bar Association function in my role of 
Solicitor nominee, which I declined. I have attached it as Attachment 
A.

    Question 2. In your role as Commissioner of Labor in New York, have 
you recused yourself from any matters that involve interactions with 
the U.S. Department of Labor since your nomination? \2\ If confirmed, 
to what degree would you recuse yourself from matters pertaining to the 
New York Department of Labor and for what periods of time?
---------------------------------------------------------------------------
    \2\ To the extent this request raises specific confidentiality 
concerns, please state as such and provide any answer as part of the 
confidential response.
---------------------------------------------------------------------------
    Answer 2. In my role as Commissioner, I have not recused myself 
from any matters that involve interactions with the U.S. Department of 
Labor. To my knowledge all interactions with the U.S. Department of 
Labor, since my nomination, involved routine business matters and have 
not involved the Solicitor's office. Pending my confirmation, the only 
matter involving the U.S. Department of Labor that required my personal 
involvement is subject to the confidentiality protections provided by 
New York law to non-final interagency discussions and is discussed as 
part of my confidential response. As to future recusals, I plan to 
follow the commitments described in my Ethics Agreement which was 
provided to the committee. It states:

          ``For a period of 1 year after my resignation (as 
        Commissioner of Labor of New York), I will not participate 
        personally and substantially in any particular matter involving 
        specific parties in which New York State is a party or 
        represents a party, unless I am first authorized to participate 
        pursuant to 5 CFR Sec. 2635.502(d). In addition, for the 
        duration of my tenure as Solicitor of Labor, if confirmed, I 
        will not participate personally or substantially in any 
        particular matter in which I previously appeared before, or 
        directly communicated with the U.S. Department of Labor on 
        behalf of the New York State Department of Labor, unless I am 
        first authorized to participate pursuant to 5 CFR 
        Sec. 2635.502(d).''

    Question 3. Do you believe that it is appropriate for the 
enforcement staff of the Federal or State Government to work and 
coordinate with entities that have vested and/or financial interests 
that happen to align with enforcement efforts of the Department of 
Labor? For example, did you or your staff consider whether there was 
any actual or apparent conflict of interest in having unions that are 
seeking to organize workers in a particular industry also perform 
outreach and report violations for those same industries? How is that 
situation different from for-profit businesses participating in the 
Wage and Hour Watch program?
    Answer 3. I believe that it may be appropriate for the government 
to work with entities that have interests that align with the 
government's own enforcement efforts if those entities are reliable and 
understand what the collaboration entails. My staff and I did consider 
whether there was an actual or apparent conflict of interest in having 
unions that may be seeking to organize in particular industries perform 
outreach and report violations in those industries. We concluded that 
our prior experience over a number of years in working with the two 
unions that are participating in Wage and Hour Watch demonstrated no 
such conflict.
    I believe unions, community groups, and for-profit businesses are 
all entities that may have legitimate, albeit different, interests in 
labor law enforcement that align with the Department of Labor's 
enforcement efforts. Additionally, each of these three types of 
entities often has knowledge of significant labor law violations that 
could support the government's own enforcement efforts. Therefore I 
believe it may be appropriate for government to work with these, and 
other entities, that have interests that align with the government's 
own enforcement efforts.

    Question 4. What is the vetting process for the New York Department 
of Labor to partner with an entity both with regard to the Wage and 
Hour Watch program and other programs? Did the Department comply with 
that policy in the case of Wage and Hour Watch groups? Were any groups 
rejected for the Wage and Hour Watch program? Were any background 
checks (administrative enforcement actions, criminal records, etc.) 
undertaken by the State of New York with regard to any sponsoring 
groups and/or officials and individuals of the groups, and/or any 
individuals who participated in the Wage and Hour Watch program? If so, 
please provide a complete record of these background checks to the 
fullest extent possible.
    Answer 4. There is no formal vetting process for the New York State 
Department of Labor to partner with an entity. Instead, the Department 
relies primarily on prior experience working with the group. For the 
Wage and Hour Watch pilot, the Department selected the groups that were 
asked to join based on prior experience working with them on a more 
informal basis. Groups were rejected in the sense that some groups the 
Department had worked with were not asked to join the pilot based on 
past experience with them. Currently, for the potential expansion of 
Wage and Hour Watch, the New York State Department of Labor has a 
written application, which the committee has been provided. I have 
attached an additional copy as Attachment B. The Department did 
consider the possibility of background checks on the groups but 
ultimately rejected that idea after inquiring as to whether 
Neighborhood Watch groups are subject to background checks. The 
Department was informed that the groups participating in this more 
sensitive crime prevention partnership were not subject to a check.

    Question 5. One of the groups participating in the program, Make 
the Road New York, sent an e-mail on February 2, 2009 to the New York 
Department of Labor discussing its relationship with ACORN that was 
``not for quoting, but for background.'' [Attached as Exhibit A]. Did 
the Department specifically inquire into this relationship? If so, what 
was the reason for the inquiry and please describe the nature and 
substance and any response given besides this e-mail. Has ACORN applied 
to join Wage and Hour Watch? Does the Department have any other 
relationship with ACORN? If so, please describe the nature of the 
relationship.
    Answer 5. I have no personal knowledge of this e-mail or the 
circumstances surrounding it. I inquired of the Deputy Commissioner to 
whom it was sent. To the best of her recollection, she had called the 
sender of the e-mail after an editorial in the New York Post described 
Make the Road New York as being ``closely aligned'' with ACORN, a 
statement that surprised her based on her experience with Make the Road 
New York. Apparently, the inquiry was more personal than an official 
Department of Labor inquiry. There was no other response besides the e-
mail, which the Deputy Commissioner kept in case there were press 
inquires triggered by the editorial. ACORN has not asked to participate 
in the Wage and Hour Watch program and, to the best of my knowledge, 
the Department has no other relationship with ACORN.

    Question 6. The Wage and Hour Watch agreement (the ``agreement'') 
contains language that requires groups to ``maintain the 
confidentiality of all personal information obtained through Wage Watch 
activities, ``but, ``[t]his pledge of confidentiality shall not 
preclude outreach to individuals working with Wage Watch groups to 
notify them or engage them in meetings, community organizing, or other 
activities typically engaged in by the Wage Watch group.'' [Attached as 
Exhibit B]. Please clarify whether and how Wage and Hour Watch 
participant organizations are permitted to use any information gathered 
as part of Wage and Hour Watch under the agreement.
    Answer 6. The only use that Wage and Hour Watch groups can make of 
information gathered as part of Wage and Hour Watch activities, other 
than giving it to the Labor Department as part of a referral, is to use 
contact information such as names and addresses to notify individuals 
of the group's activities, such as meetings or community organizing 
events.

    Question 7. In your response to prior Question for the Record 5, 
you stated that the State had orally instructed Wage and Hour Watch 
groups to refrain from giving out information about their member groups 
``when they are doing Wage and Hour Watch activities: in response to a 
request made on March 17 by several trade associations. When was that 
direction given and who directed the groups to refrain from that 
activity?
    Answer 7. Within a week of the March 17 meeting, I directed Lorelei 
Boylan to call all of the Wage and Hour Watch groups, inform them that 
this issue came up at a meeting with various trade associations, that 
the issue was not directly covered in the agreement, and to instruct 
them that, to the extent they had materials about their organization, 
they should refrain from giving out these materials when they were 
doing Wage and Hour Watch activities. Within a week after that she 
reported back to me that she had spoken to each of the groups, they 
understood the instruction, and would comply.

    Question 8. On May 26, 2009 e-mail sent by Brian O'Shaughnessy of a 
labor-religion group to several persons interested in Wage and Hour 
Watch program, which is carbon-copied to Deputy Commissioner Gerstein 
through the Wage and Hour Watch e-mail account, purportedly attaches a 
New York Department of Labor document that is ``NOT'' in final form and 
for internal use ONLY of those on this e-mail from DOL that I believe 
may answer many of your questions.'' [Attached as Exhibit C]. Please 
provide a copy of the referenced document. Were other groups or 
individuals outside the New York Department of Labor given this same 
information?
    Answer 8. The document was a blank copy of the Wage and Hour Watch 
Agreement which the committee already has been provided. I have 
attached another copy as Attachment C. The document was described as 
``not in final form'' because we are anticipating that some changes may 
be made in the agreement if the pilot is expanded. This is the document 
that would have been sent to any group that requested more information, 
but my staff believes that no other group requested more information.

    Question 9. Was additional funding sought or obtained by the New 
York Department of Labor for either the pilot program or any 
anticipated expansion of the Wage and Hour Watch Program? Please 
provide the total cost to date of the Wage and Hour Watch program to 
fullest extent possible.
    Answer 9. No additional funding was sought or obtained by the New 
York State Department of Labor for either the pilot program or any 
possible expansion of the Wage and Hour Watch program. The total out-
of-pocket cost of the program (for in house printing of materials and 
costs associated with the February 7, 2009 training) to date is 
approximately $665. My staff estimates that salaries for staff time 
spent developing and implementing the Wage and Hour Watch Program to 
date is under $5,000. The total cost for the Wage and Hour Watch pilot, 
to date, is approximately $5,665.

    Question 10. A November 7, 2008 e-mail with attached notes 
regarding Wage and Hour Watch states that the New York Department of 
Labor should include the ``Workers' Rights Law Center since their 
current staffing will leave them in need of support from government 
agencies.'' [Attached as Exhibit D]. The same attachment suggests that 
the groups and the New York Department of Labor may want to approach 
private foundations for grants as part of a public/private partnership 
to support the program. How would Wage and Hour Watch membership have 
assisted the Workers' Rights Law Center with staffing difficulties? Are 
you aware if any payments and/or grants were made to Wage and Hour 
Watch participants for joining or participating in the program? Please 
specify which groups and the amounts. Will the State of New York be 
overseeing or auditing any funds given to the participating 
organizations to fund Wage and Hour Watch activities?
    Answer 10. Since I am not the author of the e-mail cited in your 
question, I have no direct knowledge of what the author was thinking 
when she wrote the notes. However, I do know that unlike the other 
groups who are participating in the Wage and Hour Watch Program, the 
Workers Rights Law Center is a law office that brings legal cases and 
around the time this e-mail was written it had lost two of its three 
attorneys. I asked the author and she informed me that when she wrote 
the e-mail she thought that participation in the Wage and Hour Watch 
pilot would encourage the Center to refer more cases to the Department, 
lessening its own caseload and the burden on its remaining staff. To my 
knowledge no group has applied for or received any funding from any 
source for participation in the Wage and Hour Watch program. The New 
York State Department of Labor has not approached any private 
foundations for grants, nor has it been contacted by any private 
foundation, or other entity, to discuss the Wage and Hour Watch program 
and the possibility of funding anyone for participation in that 
program.

    Question 11. When formulating the New York Wage and Hour Watch 
program, what analysis did you undertake to consider whether 
legislative authorization was required to establish the program? Please 
provide the committee with any written analysis on this point to the 
extent it has not already been produced or, if the analysis was not 
written, please provide a written summary of the analysis.
    Answer 11. I myself did not perform any legal analysis. That was 
the job of the New York State Department of Labor's Counsel who 
reviewed the documents for the then-proposed program and did not find 
any legal implement to launching the pilot under existing legal 
authority. No written legal analysis was produced.

    Question 12. Do you think that establishment of a similar Wage and 
Hour Watch program on the Federal level could be done under existing 
authority, or would legislative authorization be required? Have you 
obtained any legal analysis on this point? If so, please provide the 
committee with any such written analysis or, if the analysis was not 
written, please provide a written summary of the analysis.
    Answer 12. I have not considered whether a similar Wage and Hour 
Watch program could be established on the Federal level within existing 
legal authority or whether it would require legislation and have no 
opinion on this subject at this time. I have neither sought nor 
obtained a legal analysis on this issue.

    Question 13. Several e-mails produced to the committee, including a 
February 27, 2009 e-mail from Deputy Commissioner Gerstein to the 
outside pilot groups [Attached as Exhibit E], suggest that a Web page 
and ``Google group'' or list serve be developed for Wage and Hour 
Watch. The committee is only able to locate press materials announcing 
the program on the New York Department of Labor's Web site. Was such a 
Web page and/or group created and is it functioning? To the extent 
commercial internet resources were used for a list serve or group, what 
safeguards are being used to prevent potential confidential complainant 
information shared through such portals from being improperly accessed?
    Answer 13. Neither the Web site nor the list serve group was ever 
created and neither is functioning.

    Question 14. A Wage and Hour Watch participant organization, Make 
the Road, requested in a May 11, 2009 e-mail that Ms. Boylan ``squeeze 
in'' referrals of bigger cases before she leaves the New York 
Department of Labor. [Attached as Exhibit F]. What kind of criteria 
does the New York Department of Labor have for accepting referrals for 
this Taskforce? Did the New York Department of Labor accept the 
referrals in question on behalf of Make the Road? What criteria was 
used to determine which cases were bigger than other cases?
    Answer 14. The Fair Wages Taskforce uses the following criteria for 
accepting referrals from individuals or community groups:

    1. Whether employees in the particular business are at high risk of 
exploitation (child labor, certain low-wage industries that have high 
rates of noncompliance, immigrant workers).
    2. Businesses that employ 30 or more employees in low-wage 
industries.
    3. Large cases in the sense that the employer has multiple 
locations requiring a coordinated team effort for the investigation.

    The focus of the Fair Wages Taskforce is low-wage industries so the 
criteria for bigger cases is either the number of employees or number 
of locations (as opposed to amounts of underpayments which tend to be 
much more in higher paid industries where most cases involve overtime 
violations). As far as I know the Task Force accepted one case 
mentioned in the e-mail, the bagger case, because baggers have been a 
priority occupation for the Task Force since early 2008.

    Question 15. You stated previously in response to Questions for the 
Record that as of May 2009 you had not received any complaints about 
Wage and Hour Watch. Are you aware of whether any other government 
agencies may have received complaints about Wage and Hour Watch?
    Answer 15. I am not aware of any entity, governmental agency, trade 
organization, or participating group that has received any complaints 
about Wage and Hour Watch.

    Question 16. You stated in your testimony that one of your goals as 
Solicitor would be to ``make sure there is a consistency of priorities 
around the country so that you get the same service from the 
Solicitor's Office in San Francisco as you do in Maine.'' Are there any 
specific priorities that you do not believe are being consistently 
applied nationally? Why do you believe those priorities are not 
consistent nationally? If confirmed, what specific steps do you 
anticipate taking to ensure greater consistency?
    Answer 16. When I worked on the Labor Department Agency Review team 
for the Obama transition I was assigned to the Wage Hour Division. One 
of the main issues brought to my attention by the Wage Hour personnel 
in the field is that their ability to bring cases was highly dependent 
on the regional Solicitor's Office. Because the Wage Hour regions are 
different than the Solicitor's Office regions, some Wage Hour regional 
offices are served by more than one Solicitor's Office. I was told 
there was often a marked difference between the two Solicitor's Offices 
in their responses to requests to file lawsuits. If confirmed, before I 
take any specific steps to ensure greater consistency, I would want to 
determine how widespread this problem is, including the extent to which 
it is experienced by the other enforcement agencies and what the 
apparent cause or causes of the problem are.

    Question 17. Do you think it is appropriate for State and/or 
Federal Government enforcement agents to use their position to promote 
union organizing efforts at particular companies? If you discovered 
that government enforcement personnel were targeting investigations 
and/or otherwise using their positions for such purposes, would you 
support taking disciplinary action, including terminating them? Will 
you commit to investigating and removing any enforcement personnel 
found to have done this or otherwise abuse their position in a law 
enforcement agency at the U.S. Department of Labor?
    Answer 17. I do not think it is appropriate for a State or Federal 
Government enforcement agent to use his or her position to interfere 
with union organizing efforts whether the goal is to promote or deter 
the efforts. I also would not automatically dismiss legitimate 
complaints about possible violations of labor laws because of their 
source. I would support taking disciplinary action against any agent 
that abuses their position in that way. However, I am not sure at this 
time that I can commit to investigating and removing such personnel 
because I do not know if this type of investigation falls under the 
jurisdiction of the Solicitor's Office or some other office, such as 
the Office of the Inspector General.

    Question 18. In your testimony in May and in your written statement 
submitted with the committee, you discussed the fact that your Green 
Grocer Code of Conduct required employers to submit to ``independent 
monitoring.'' Who conducted that monitoring and is it continuing? How 
were/are they compensated for that monitoring and what is the annual 
cost of that monitoring?
    Answer 18. The monitoring was done by A&L Group, Inc, an 
independent monitoring firm hired and paid by the Attorney General's 
office. The monitoring was done for 200 establishments for a period of 
2 years, the length of time required by the Code of Conduct. I can't 
tell you the exact cost of the contract because I no longer have access 
to the files at the Attorney General's Office. I remember that the cost 
was approximately $30,000 the first year and $20,000 the second year.

    Question 19. In your testimony in May, you suggested that New York 
employers who do not participate in ``compliance offers'' from your 
agency violate wage laws and should be prosecuted as willful violators. 
Do you believe that failure to participate in compliance opportunities 
renders all labor law violations (e.g., health and safety, wage and 
hour, etc.) as willful violations? If confirmed as Solicitor of Labor, 
would you seek to impose willful liability on violators who do not 
participate in ``compliance offers'' with the U.S. Department of Labor?
    Answer 19. I believe that an entity is in willful violation of New 
York's Labor Law when it violates the Labor Law after (1) there has 
been a major publicized investigation into their industry, (2) that 
investigation has resulted in findings of a high non-compliance rate in 
the industry, and (3) the entity was invited to a compliance seminar 
and declined to attend. In New York the legal standard for a willful 
violation is ``known or should have known'' of the violation and I 
believe that standard is met in these circumstances. While I believe 
that failure to attend a compliance seminar is a factor in finding 
willfulness under New York law, it is not the only factor. Other 
factors, including the ones I describe above should also be considered. 
If confirmed as Solicitor I will apply the appropriate Federal legal 
standard to findings of willfulness. I am not currently familiar enough 
with the Federal standard to make any final conclusions but if failure 
to attend a compliance seminar is an appropriate factor in applying the 
Federal standard, I will apply it.

    Question 20. The Department of Labor issues opinion letters under a 
number of its programs, particularly in the wage and hour and employee 
benefits areas, to explain the law and regulatory requirements in 
specific circumstances. At any given time, there may be several hundred 
pending requests for opinion letters from stakeholders. In your prior 
response to Questions for the Record, you stated that you understood 
the importance of opinion letters and would provide adequate support to 
Wage and Hour to issue opinion letters. Would you commit to updating 
the committee on the total number of opinion letters pending on a 
monthly basis in the wage and hour and employee benefits areas and 
other areas under the Department's jurisdiction?
    Answer 20. I have seen the value of opinion letters at the New York 
State Department of Labor where the letters are issued by Counsel's 
office. My understanding at this time is that at the U.S. Department of 
Labor, opinion letters are not issued by the Solicitor's Office but by 
the various agencies. However, these opinion letters are on the 
Department's Web site; for example, the Wage and Hour Opinion letters 
can be found at: www.dol.gov/esa/whd/opinion.opinion.htm. I continue to 
believe the Solicitor's Office must provide adequate support to the 
agencies, and, if confirmed, intend to address any problems caused by 
lack of Solicitor's support. However, my understanding at this time is 
that the Solicitor's Office is not involved in every opinion letter, or 
even in most opinion letters and therefore believe that office does not 
have the ability to update the committee on the numbers of opinion 
letters issued by the various agencies.

    [Whereupon, at 11:10 a.m., the hearing was adjourned.]

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