HR Management & Compliance

Trump proposes ‘substantial’ DOL budget cut

The U.S. Department of Labor (DOL) would see a nearly 21 percent reduction in funding under the White House’s proposed 2018 discretionary spending budget, which was released March 16.

“A 21 percent cut is very substantial,” according to H. Juanita Beecher, of counsel with Fortney & Scott in Washington, D.C., and an editor of Federal Employment Law Insider. It’s unclear, however, which DOL subagencies will be affected, she said.

The document, America First: A Budget Blueprint to Make America Great Again, proposes deep cuts to many agencies to make room for increases to transportation, defense, and homeland security budgets. The proposal specifically notes that the redistribution is aimed at funding a wall along the Mexican border and strengthening the U.S. military.

The DOL’s slice would be reduced to $9.6 billion, down from $12.2 billion in 2017. According to The Atlantic, the DOL hasn’t had a budget that small since the early 1980s.

The proposal targets a few specific DOL initiatives but doesn’t say how enforcement of federal employment laws may be affected. “We don’t really know [which] subagencies are going to be impacted,” Beecher said. It’s unlikely that the administration will try to completely eliminate departments like the Wage and Hour Division (WHD) or the Office of Federal Contract Compliance Programs (OFCCP). “But it doesn’t mean [the administration] won’t cut them substantially,” Beecher said.

The proposed budget specifically targets one Occupational Safety and Health Administration (OSHA) initiative—training grants—but that subagency will likely bear even more of the brunt. “I think we can expect OSHA to be hit pretty hard,” Beecher said.

The proposal also takes aim at a few other DOL grant programs and would close low-performing Job Corps centers. It would increase funding, however, for programs that try to reduce improper unemployment benefits and help individuals find work.

Finally, the budget calls for $15 million to jump-start mandatory nationwide use of E-Verify. E-Verify, which is not a DOL activity, is an Internet-based system that federal contractors must currently use to verify job applicants’ eligibility to work in the United States.

Donald Trump isn’t the first president to propose drastic cuts, Beecher said, pointing to Reagan-era proposals. But attempts like this one have not been particularly successful, she said. Many agencies are bound by statute to run certain programs. If their budgets are reduced substantially, it may lead interest groups to file lawsuits alleging that the agencies are running afoul of the law, she explained.

But the budget process is far from over. The final versions generally are much different from the initial proposals, Beecher said. Trump needs Congress’s approval, and with the 2018 elections in their sights, lawmakers will have to consider how their constituents will view the cuts. “It raises a lot of interesting issues,” Beecher said. “I think [Trump] is sending a message . . . that he wants to cut federal regulations.” The proposed budget is in line with his Executive Orders to that effect, Beecher said.

The lack of a secretary of labor leaves the DOL without a voice in the process. Nominee Alexander Acosta didn’t get to make recommendations about where cuts would occur, Beecher said. It’s likely he’ll be asked about the proposal at his March 22 confirmation hearing. “There’s a whole lot we don’t know” for now, Beecher said.

On March 28, Beecher will help present President Trump’s First 60 Days: Practical Impact of Executive Orders, ACA Initiatives, Employment Visas, Overtime Rules, and More, a 90-minute webinar on the impact the president’s actions will have on employers. Click here for more information or to register.

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