President’s budget reflects administration’s labor and employment priorities

Labor secretary testifies on DOL budget
Secretary of Labor Thomas Perez testified on President Barack Obama’s FY 2016 budget request for the DOL before the U.S. House of Representatives’ Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Committee on Appropriations, on March 17 and before the Committee on Education and the Workforce on March 18. While celebrating the decreasing unemployment rate and recovering economy, Secretary Perez emphasized the need for continued improvement. He called attention to several specific issues of which employers should take note.

Restaurants. The DOL appears to be setting its sights on the restaurant industry. Secretary Perez noted that the DOL is in the process of modernizing the overtime rules. The rules have been updated only once since 1975, so the agency is turning its attention to the issue of overtime pay. According to his testimony, a proposed rule will be released “in the coming months.”

Paid family leave. Secretary Perez also highlighted the issue of paid family leave. He noted that President Obama has proposed using $2 billion to fund development of state paid-leave programs plus an additional $1 billion for state studies on the feasibility of paid leave. The DOL’s budget includes a proposal for $2.2 billion to aid up to five states in starting such programs and $35 million to provide technical assistance for states that want to enact paid-leave programs down the road. Recently, the president signed a memorandum requiring federal agencies to advance 240 hours of sick leave to new parents.

Proactive investigations. The DOL has apparently altered its enforcement approach from reactive to proactive investigations. In the words of Secretary Perez: “Instead of a purely reactive approach where we respond to incoming complaints, we have targeted investigations in industries where we know workers are vulnerable, and where they are often reluctant to raise their voices and exercise their rights.” This includes an increase of $31.7 billion for the WHD to focus on industries with “vulnerable” workers. Again, the restaurant industry should take note of this new enforcement technique because Perez called attention to a recent settlement with Chickie’s and Pete’s of Philadelphia. Employers should pay particular attention to their policies for tipped employees in the wake of this settlement, which includes $6.8 million in back wages.

OSHA. Finally, OSHA has had recent success in obtaining large awards against a furniture store and Metro-North Railroad for unsafe working conditions and retaliation, respectively. The budget includes $990 million for OSHA and an increase in civil monetary penalties. OSHA is also currently writing a new regulation to protect workers from the harmful effects of crystalline silica dust exposure.

Other issues. In addition to these key points, Secretary Perez also touched on veterans, the need for workforce training and apprenticeship, a draft rule for the protection of retirement investors, and an overhaul of the technology at the DOL that will lead to a streamlined process for sharing data.

This testimony suggests a general shift toward a more proactive approach by the DOL in both enforcement and the issuance of new rules to modernize outdated policies and regulations.

EEOC
The administration has requested $373.1 million for the EEOC in FY 2016―an $8.6 million increase over FY 2015 funding levels―and an additional 47 full-time employees. All of the increase would be allocated to the agency’s Strategic Law Enforcement initiative.

According to the EEOC, that initiative “reflects our primary mission of preventing unlawful employment discrimination through the use of: 1) administrative (investigation, mediation and conciliation) and litigation enforcement mechanisms with regard to private employers, labor organizations, employment agencies, and state and local government employers; and 2) adjudicatory and oversight mechanisms with regard to Federal employers.”

NLRB
The administration has requested $278 million for the NLRB for FY 2016, which represents an increase of almost $3.8 million over FY 2015 funding levels. It has also requested an additional 30 full-time equivalents, which would bring its staff up to 1,640.

The budget documents summarize the agency’s priorities:

While case intake has decreased slightly, additional resources are needed because of comprehensive and complex case matters, which are sometimes attributable to external factors. Among these factors are ongoing nationwide efforts to improve the wages and working conditions of workers in the retail and fast food industries; the increased prevalence and evolving tools of technology and social media leading to handbook provisions and workplace rules concerning their use; expanded use of mandatory arbitration clauses in employment matters; bankruptcies; and difficult questions concerning single, joint, and successor employer relationships (e.g., [franchiser]/franchisee), supervisory status, and defining employees covered under the [National Labor Relations Act (NLRA)] (e.g., college athletes, graduate students, undocumented workers). The Agency anticipates these trends will continue throughout FY 2016.

Bottom line
With both houses of Congress now in Republican control, the requested funding levels face an uphill battle. Congressional hearings on the agencies’ requests will be the next battleground.

Judith E. Kramer is an attorney with Fortney & Scott, LLC in Washington, D.C. She may be contacted at jkramer@fortneyscott.com.

Daria H. Hafner is a law clerk with Fortney & Scott, LLC,  in Washington, D.C. She may be contacted at dhafner@fortneyscott.com.