Shortly after the Department of Labor released its ambitious regulatory agenda, Labor Secretary Hilda Solis announced her resignation from the agency. Solis was confirmed to the post in February 2009. Under her direction, the DOL has significantly stepped up its regulatory and enforcement activities, particularly in the areas of wage and hour, worker misclassification, and whistleblower protection. Solis reportedly notified President Obama of her decision to step down on Wednesday. According to her resignation notice, Solis has decided to leave Washington to be closer to her family in California. This blog will report on any replacement nominees as soon as they are known.
On Wednesday, the full House Committee on Education and the Workforce held a hearing to discuss the policies and priorities of the Department of Labor. Earlier in the week, the agency released its 2012 budget request, which seeks $12.8 billion in discretionary budget authority and 17,848 full-time equivalent employees (FTE). Although the proposal would reduce the Department’s overall discretionary spending by 5% from current levels, the budget would increase funding for the agencies charged with regulating and enforcing worker protections. Several divisions within the DOL – the Wage and Hour Division (WHD), Occupational Safety and Health Administration (OSHA), Mine Safety and Health Administration (MSHA), Employee Benefits Security Administration (EBSA), and the Office of Federal Contract Compliance Programs (OFCCP) – would each receive additional funding under a budget that allocates a total of $1.8 billion for DOL’s worker protection agencies. Given President Obama’s plan to freeze all non-security discretionary spending and DOL’s overall discretionary budget reduction, the increase in resources for worker protection demonstrates the Administration’s continued commitment to enhancing the regulation and enforcement of labor and employment laws. For a complete analysis of the DOL’s budget request, see Littler’s ASAP: U.S. Department of Labor's 2012 Budget Shows Increasing Resources Toward Regulation and Enforcement of Employment Laws.
In his opening statement, Committee Chairman John Kline (R-MN) criticized a number of DOL rules that he said were “designed to favor Big Labor at the expense of small businesses.” In addition, he stated that “workers and their employers need simple and fair rules of the road that promote health, safety, and accountability; they do not need a bureaucracy that continues to grow in size and complexity and stifles the freedom and innovation our economy desperately needs to grow and prosper.”
During the hearing, Labor Secretary Hilda Solis defended (pdf) the DOL’s policies and regulations, and responded to specific questions about the department’s budget request. More than one committee member questioned the DOL’s decision to increase funding allocation to the aforementioned divisions, but not for the Office of Labor Management Standards (OLMS), which administers and enforces most provisions of the Labor-Management Reporting and Disclosure Act (LMRDA). According to Solis, the OLMS will receive the same level of funding, but will be “more strategic” in carrying out its job functions. Solis clamed that in 2010, it conducted more investigations (145) and issued more indictments than it had in recent years.
In response to questions about “card check” and the Employee Free Choice Act (EFCA), Solis said that her agency did not have the authority to implement provisions of this failed bill administratively or through regulations, and acknowledged that it lacked sufficient votes to advance at this time.
A number of members were also critical of the administration’s position in favor of project labor agreements (PLAs), and its withdrawal of the union reporting LM-2 form. In response, Solis claimed that the use of PLAs reduces costs and uncertainty, and the LM-2 form was “duplicative in nature.”
Committee member Judy Biggert (R-IL) raised concerns about a possible conflict of authority between the EBSA and the SEC over a proposed rule that will amend who is to be considered a “fiduciary” under ERISA. Biggert noted that the SEC is in the process of developing regulations under the new financial reform law commonly known as the Dodd-Frank Act, and wondered if the DOL is coordinating efforts with that agency. Solis said that Assistant Secretary of Labor for the EBSA, Phyllis Borzi, has, indeed, been having discussions with the SEC on this issue.
In defending the budget request’s impact on jobs, Solis claimed that the health care industry experienced the largest job growth within the past year, and will continue to expand. She also said that should the Republican budget be implemented instead, the agency would have to make many cuts, including the elimination of many of the nearly 300 new wage and hour investigators it hired within the past two years. Rep. George Miller (D-CA) also noted that the Republican’s budget would reduce OSHA’s staffing to a level last seen in 1974. Also with respect to OSHA, Solis claimed that the DOL would continue to fund the Voluntary Protection Program (VPP).
The House is currently debating a continuing resolution to provide federal funding for the remainder of fiscal year 2011.
Solis Discusses Plans for Worker Misclassification, Enforcement Initiatives During Committee Hearing
Testifying before a House subcommittee hearing on Wednesday, Labor Secretary Hilda Solis explained (pdf) how the agency would use the $116.5 billion in proposed funds and 17,800 full-time equivalent employees outlined in the DOL’s fiscal year 2011 budget. These plans include a broad employee misclassification initiative to deter employers from wrongly categorizing employees as independent contractors, among other enforcement efforts. The hearing was conducted by the House Appropriations Committee’s Subcommittee on Labor, Health and Human Services, Education and Related Agencies, which is tasked with reviewing $17.1 billion of the DOL’s proposed budget.
Solis stated that $1.7 billion in discretionary funds and 10,957 full-time equivalent employees would be devoted to worker protection activities, including an employee misclassification initiative. This initiative would use $25 million to create a multi-agency program to strengthen and coordinate federal and state efforts to enforce statutory prohibitions on misclassification, and identify and deter instances of employee misclassification as independent contractors. The DOL’s Wage and Hour Division (WHD) would receive $12 million and 90 new investigators to expand these enforcement efforts. In addition, the misclassification initiative would support new, targeted efforts to recoup unpaid payroll taxes through state audits of problem industries supported by federal audits, and by means of a $10.9 million pilot program that would reward the states that are the most successful or improved at detecting and prosecuting employers that fail to pay the appropriate taxes due to worker misclassification. The budget would also allocate $1.6 million to the Office of the Solicitor to hire 10 full-time equivalent employees and enhance enforcement strategies; provide $150 thousand to the Occupational Safety and Health Administration (OSHA) to train inspectors on worker misclassification issues; and promote legislative changes that would require employers to properly classify their workers, impose penalties for noncompliance, and provide employee protections in the event employees are wrongly categorized as independent contractors.
In addition to the worker misclassification initiative, Solis explained that the budget request of $244.2 million for the WHD would support targeted investigations, compliance assistance, and the reduction of repeat violations of minimum wage, overtime, and workplace safety laws. The Office of Federal Contract Compliance Programs (OFCCP) would receive $113.4 million and 788 full-time equivalent employees, which would, according to Solis, “allow OFCCP to broaden its enforcement efforts and focus on identifying and resolving both individual and systemic discrimination.” Pursuant to the OFCCP’s enforcement of Executive Order 11246, Equal Employment Opportunity, the agency plans to renew its focus on conducting reviews of the construction industry.
With respect to workplace safety, Solis said her request of $573.1 million and 2,360 full-time equivalent employees for OSHA would redirect 35 such employees from compliance assistance to enforcement. In addition, the budget includes an additional request of $4 million to expand OSHA’s regulatory program, $1 million for consultation programs focused on small businesses, and $1.5 million for state plans.
The Secretary’s testimony reflects the shift in focus and resources towards enforcement activity by the DOL. With an enhanced emphasis on enforcement, employers can expect greater scrutiny of their practices by the Department.
Labor Secretary Solis Reaffirms Commitment to EFCA's Passage, DOL Enforcement Efforts in AFL-CIO Speech
Labor Secretary Hilda Solis told attendees of the AFL-CIO Constitutional Convention in Pittsburgh today that she will work with the White House to “make the strongest case possible for the Employee Free Choice Act” and reiterated her position that the Department of Labor (DOL) “is once again back in the enforcement business.” Her speech also outlined recent DOL enforcement efforts, and proposed regulations to reform the H-2A temporary agricultural worker program.
With respect to DOL enforcement, Solis announced that the agency is “adding nearly 670 additional investigators, inspectors, and other program staff, returning our worker protection efforts to a level not seen since 2001. So far, these resources has allowed the Wage and Hour Division to ensure that contractors on federal stimulus projects pay their workers the prevailing wage rates that they are entitled to.” Solis emphasized that worker safety is a chief concern, noting that since July, the Occupational Safety and Health Administration (OSHA) has completed 689 inspections and issued nearly 1,100 violations resulting in $1.6 million in fines.
Solis touched on immigration reform as well, explaining that the DOL is proposing to restructure the H-2A visa program. According to Solis, the proposed regulations “will reverse what I believe are unjust wage issues and working conditions for vulnerable U.S. and temporary foreign workers,” and “will ensure that before we import temporary workers to meet some labor shortages, U.S. workers have first dibs.”
As for the beleaguered Employee Free Choice Act (EFCA), Solis claimed that “it’s not enough to have fair wages and a safe workplace – workers also need a voice on the job!” To that end, Solis pledged to support EFCA, as well as the use of Project Labor Agreements for large federally funded projects.
President Obama is scheduled to speak at the AFL-CIO convention tomorrow.
Labor advocate and founding executive director of the American Rights at Work (ARW) Mary Beth Maxwell is joining the Department of Labor (DOL) as a senior advisor to Secretary of Labor Hilda Solis. According to an ARW press release, Maxwell will work with the White House Task Force on Middle Class Working Families, the Obama Administration’s new initiative aimed at “restoring labor standards, improving workplace safety, enhancing work and family balance, protecting retirement security, and helping protect middle- and working-class incomes.”
Maxwell has been a vocal advocate of the beleaguered Employee Free Choice Act (EFCA), and was widely rumored to be Obama’s pick to serve as Secretary of Labor. Maxwell is most known for her work at the ARW, a nonprofit advocacy organization begun in 2003 whose mission is to “promote the freedom of workers to join a union and bargain collectively.” Solis herself has ties to the ARW, having once served as the organization’s treasurer and board member. Prior to working at the ARW, Maxwell served as National Field Director for Jobs with Justice, an organization affiliated with the Service Employees International Union with which Secretary Solis is closely aligned. Her other positions have included acting as Deputy Field Director for NARAL, directing the pro-choice organization’s electoral, legislative, media, and fundraising training programs for local affiliates. Maxwell has also worked as Field Director for the United States Student Association.
Congress approved a technical correction to the section of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPA) that applies to collectively-bargained health plans. The legislation (S. 3712) corrects the effective date to read January 1, 2010 instead of January 1, 2009. The MHPA amends current requirements under ERISA, the Public Health Service Act and the Internal Revenue Code for parity in mental health benefits offered under a private group health benefit plan. For more information on the MHPA, see Littler’s ASAP: Equal Mental Health and Substance Use Benefits Realized by Russell D. Chapman and Andrea Jackson.
President-elect Obama named Rep. Hilda Solis (D-Calif.) as his choice for Labor Secretary. Despite Solis’ ardent championing of the Employee Free Choice Act, EFCA’s support in the Senate appears to be faltering.
Safety and Health
Emily Spieler will lead Obama’s Transition Team on OSHA issues. In regulatory news, OSHA sent an advance notice of proposed rulemaking for its diacetyl standard to the Office of Management Budget’s Office of Information and Regulatory Affairs. Diacetyl is the chemical used in food flavoring that is allegedly linked to the respiratory disease, colloquially known as “popcorn lung.”
The Equal Employment Opportunity Commission failed to issue regulations for the ADA Amendments Act, which goes into effect Jan 1.
In a surprise move, President-elect Obama has chosen dark-horse candidate Rep. Hilda Solis (D-CA) as Labor Secretary. Solis’ selection will no doubt appease organized labor, which chose her to defeat pro-free trade incumbent Democratic Congressman Matthew Martinez (D-CA) in a primary challenge in 2000, and which contributed heavily to her re-elections since.
Solis has served as a member of the U.S. House of Representatives for the 32nd District of California since 2001, and is currently a Senior Whip, as well as a Regional Whip, for Southern California. She is a member of the Committee on Energy and Commerce, where she is Vice Chair of the Environment and Hazardous Materials Subcommittee and a member of the Health and Telecommunications Subcommittees. She also serves on the House Committee on Natural Resources and the House Select Committee on Energy Independence and Global Warming. Prior to serving in Congress, she worked as a California State Senator from 1994-2000, and as a California Assembly Member from 1992-1994.
During her three terms in Congress, Solis voted along party lines 98.4% of the time. She is a staunch supporter of the Employee Free Choice Act (EFCA) in particular and unions in general. Born into a union family, Solis is considered to be one of organized labor’s strongest proponents in the House of Representatives. She has received a near 100% rating by the AFL-CIO in terms of her pro-union voting record. In addition, she has marched with Andy Stern, president of the Service Employees International Union, in support of increased wages and benefits for janitors. In a press release, Stern has stated:
As someone who has pounded the pavement knocking on doors for Hilda Solis in her first upset campaign in California, I can tell you firsthand that this woman is about opening doors for millions of Americans who get up and go to work each day.
AFL-CIO President John Sweeney has voiced similar praise for Solis:
We're thrilled at the prospect of having Rep. Hilda Solis as our nation's next labor secretary. We're confident that she will return to the labor department one of its core missions - to defend workers' basic rights in our nation's workplaces. She's proven to be a passionate leader and advocate for all working families - in fact, she's voted with working men and women 97 percent of the time. The AFL-CIO looks forward to working with Rep. Solis as she charts new territory for our nation's working men and women.
Solis is a member of the American Rights at Work Board of Directors. American Rights at Work is a pro-labor think tank that is strongly in favor of EFCA’s passage and champions workers’ rights and workplace safety issues. David Bonior, an early candidate for the Secretray of Labor job and the Chair of American Rights at Work--and a close advisor to President-elect Obama--said about Solis’ nomination:
I’ve worked with her for years in Congress and she sits on our Board of Directors – she’s a terrific leader who I know first hand will work tirelessly on behalf of America’s working families.
Solis’ record for supporting business interests is less than spectacular. She has garnered a 21% rating in 2003 by the U.S. Chamber of Commerce, indicating a fairly anti-business voting record.
She has consistently voted in favor of increasing the federal minimum wage. Solis has indicated she will continue to support a bill she co-sponsored, the Protecting America’s Workers Act (H.R. 2049), which increases penalties against employers for worker safety violations, enhances protections for whistleblowers, and mandates that employers pay for personal protective equipment. She is also in favor of greater OSHA funding to increase enforcement of workplace safety laws.
In terms of civil rights, Solis has supported the reintroduction of the Equal Rights Amendment and related bills promoting comparable work pay rules for women, and legislation prohibiting job discrimination based on sexual orientation. In the healthcare arena, Solis voted in favor of giving mental health benefits full equity with physical health benefits.
On the immigration front, Solis recently spoke out against the Bush Administration’s changes to the H-2A agricultural guest worker program. In opposing the regulation changes, Solis claimed:
There is no question that the guest worker program needs significant overhaul but slashing wages and reducing basic rights for the most vulnerable workers in our country, especially hardworking Latino farm workers, is not the answer. I look forward to working with the Obama Administration and the Democratic majority to find the best solutions to strengthen this workforce and protections afforded to them.
When nominated and if confirmed, Solis will certainly alter the direction and activity of the Department of Labor. Stay tuned!