United States: House Appropriations Hearing Examines DOL Budget : Washington D.C. Employment Law Update

During an Appropriations Subcommittee hearing held to analyze the Department of Labor's budget request for fiscal year 2014, Acting Secretary of Labor Seth Harris discussed several agency initiatives and programs that would benefit from the $12.1 billion in discretionary funding. President Obama released his FY 2014 Budget Proposal last Wednesday. The DOL's portion of the budget would fund, among other activities, enforcement of whistleblower protections and worker misclassification programs, rulemaking, and internal evaluation efforts, said Harris.

Some topics of note discussed during the hearing include the following:

OSHA – Whistleblowing, VPP

The budget proposal appropriates approximately $571 million to the Occupational Safety and Health Administration. Rep. Rodney Alexander (R-LA) mentioned that he has asked employers about their experiences working with OSHA, and said that by and large, they have not been positive. He said that employers claim the audit process is "exhausting," and that inspectors seem to focus more on generating fines than helping employers comply with workplace safety laws. Additionally, the "many layers" of OSHA regulations all but ensure that the agency will find a citable offense during the inspection, he said.

In response, Harris said that he has heard many of these same complaints from small employers, and promoted the agency's small business consultation program.

Ranking subcommittee member Rosa DeLauro (D-CT) argued that the pace of issuing OSHA regulations is "at near paralysis," and asked Harris what can be done to expedite the process. Harris responded that "much of OSHA's regulatory process is not under OSHA's control," and that he hopes to continue regulatory development. He said that there is a "norm-setting value" to OSHA standards. He claimed that most compliance comes from employers that voluntarily bring themselves into compliance with new regulations.

DeLauro mentioned the Voluntary Protection Program (VPP), OSHA's cooperative program whereby employers with established and effective safety and health systems and comparatively low injury and illness rates can be eligible for exemption from OSHA programmed inspections. DeLauro cited several examples involving serious injuries and fatalities that occurred at VPP worksites, raising concern about the program's effectiveness. Harris defended the program, saying that "VPP has a good bit of value," but a review is underway and certain issues need to be addressed.

With respect to OSHA's whistleblower protection program, DeLauro asked Harris why an increase in funding is necessary. Harris explained that "Congress keeps giving us work and no money to do the work." Specifically, he noted that there have been five new laws enacted since 2009 that include whistleblower protection provisions, including the Affordable Care Act, but no additional resources to enforce them. The additional $5.9 million will allow OSHA to enforce these new laws, said Harris. These funds will "ensure the laws that Congress passes will be complied with." He said that OSHA has developed an internal system to enforce all 22 whistleblower statutes under its jurisdiction, but no resources to carry it out.

Wage and Hour Regulations

Harris touched on the DOL's proposed rule that would extend minimum wage and overtime requirements to many home care workers. Specifically, this proposal would amend the Fair Labor Standards Act's (FLSA) companionship and live-in worker regulations to limit the types of duties that render a home caregiver exempt from FLSA requirements, clarify the type of activities and duties that may be considered "incidental" to the provision of companionship services, amend the recordkeeping requirements for live-in domestic workers, and specify that the exemption is limited to care givers employed by the individual, family or household using the services only. Harris spoke in favor of pursuing a final rule on this issue, as "in home caregivers are not babysitters." He said that in many instances they provide professional care, and that "the idea that they are not entitled to minimum wage and overtime is not what Congress intended." He did not say when a final rule would be issued.

Federal Contractor Rules

Harris was also asked about other rules under development, including the Office of Federal Contract Compliance Programs' proposal issued in December 2011 that would amend the nondiscrimination and affirmative action requirements regarding individuals with disabilities for federal contractors and subcontractors. Among other things, this proposal would set a hiring goal for individuals with disabilities at 7%. Harris claimed that this rule is still under development, but that the 7% goal is aspirational. Therefore, under the proposed rule a federal contractor of subcontractor that could not meet that goal would not be fined or penalized, although the agency would work with the contractor to make sure that it has the resources to try to achieve that hiring goal.

State Paid Leave

The budget proposal includes an allocation of $5 million to encourage the establishment of state paid family leave laws. This allotment would go towards a State Paid Leave Fund to provide technical assistance and support to states that are considering paid leave programs. Rep. Lucille Roybal-Allard (D-CA) asked about the goals and requirements of this program. Harris explained that he has not seen as much interest from states as he would have liked because of the administrative costs involved in implementing such programs. He said that some states have, however, expressed interest, and that with increased funding they would be able to provide working parents with paid leave.


Rep. DeLauro asked Harris how widespread the problem of employee misclassification is, and what the DOL is doing to combat this problem. Harris claimed that in the construction industry in particular, the misclassification rate is as high as 30%. He said that the DOL is working with the unemployment insurance system to find employers that are misclassifying employees as independent contractors, and therefore are avoiding UI payments. He said that the DOL intends to audit these employers more aggressively. In addition, he said the Wage and Hour Division is working with state labor departments and workers compensation departments to share information to more readily target miscreant employers. He emphasized, however, that "more could be done." He noted also that responsible contractors who play by the rules are harmed by those that do misclassify workers, as they are often underbid.

H-2B Visa Program Rule

Rep. Alexander questioned Harris about the status of the H-2B visa program, which governs temporary, seasonal, nonagricultural workers. On April 2, 2013, the USCIS temporarily suspended adjudication of most H-2B petitions following a federal court order issued in Comite de Apoyo a los Trabajadores Agricolas et al v. Solis. In this matter, the court granted a permanent injunction against the enforcement of a portion of a 2008 DOL wage rule regarding prevailing wage determinations applicable to H-2B visas. The court gave the DOL 30 days to revise the rule. Harris explained that the agency "is now caught between an act of Congress and two judicial decisions." Specifically, through an amendment to an earlier appropriations bill, Congress has enjoined the DOL from using any federal funds to enforce its much-maligned final rule issued in February 2012 governing H-2B visas. In addition, Harris said that the aforementioned case prevents the DOL from using the 2008 wage rule, and that the Eleventh Circuit in a separate case has said that the DOL has no authority over the H-2B program at all. He claimed, however, that the agency is trying to keep the program operating, and intends to meet the court's April 22 deadline to issue an interim final rule. Once that is complete, the agency can restart the process for issuing H-2B certifications, he said.

More information on the House Appropriations Committee hearing, including a link to an archived webcast of the hearing, can be found here.

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