Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

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 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.

Immigration

The Department of Labor (DOL) is amending its regulations regarding the H-2A and H-2B guest worker programs.  In addition, the USCIS revised Form I-9 to streamline the employment verification process.

Labor

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.”

Workplace Discrimination

The Equal Employment Opportunity Commission failed to issue regulations for the ADA Amendments Act, which goes into effect Jan 1.

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!