House Appropriations Committee: Fiscal Year 2025 Request for the Department of Labor
House Committee on Appropriations
Subcommittee on Labor, Health, and Human Services, Education
Fiscal Year 2025 Request for the Department of Labor
Wednesday, April 17, 2024
Topline
- Republicans criticized DOL’s budgetary request, citing inflation, regulatory overreach, and harm to businesses and workers.
- Democrats defended DOL’s record and praised its work on enforcing child labor laws.
Witnesses
- Acting Secretary Julie Su, Department of Labor
Opening Statements
Subcommittee Chairman Robert Aderholt (R-AL)
In his opening statement, Aderholt began by saying that persistent and high inflation, which has been driven by Democrats’ spending and regulatory overreach, has burdened American workers and their families for more than two years. He noted that DOL reported consumer prices were up 3.5% this week from a year ago, and that everyday essentials have become more expensive. Aderholt said that he is concerned that the budget request attempts to go around discretionary limits that were established in the Fiscal Responsibility Act (FRA) by calling for the creation of an $8 billion training program. He also expressed concern that the budget request provides a lack of support for employers at a time when businesses are struggling to find workers which risks increased inflation and potentially a recession that would threaten the livelihoods of millions of Americans. Aderholt said that beyond the budget, the regulatory agenda that has been pushed by DOL has been worrisome. He said that the recently finalized independent contractor rule threatens to disrupt millions of freelance and independent workers around the country. Aderholt criticized the overtime and registered apprenticeship proposals that DOL has put forward for not appreciating the differences between states’ economies and instead applying a “one size fits all” approach. He concluded by saying he hoped that he and the Acting Secretary would be able to find some common ground.
Subcommittee Ranking Member Rosa DeLauro (D-CT)
In her opening statement, DeLauro responded to the Chairman’s points on inflation by sharing her concerns that corporations were engaging in price gouging which was helping to keep inflation high. She noted that in recent years, workers have been organizing at a pace not seen since the Great Depression. DeLauro said that this change is a good thing as labor unions serve as a driving force for progress and applauded the improvements for workers under the Biden Administration and Acting Secretary Su’s Department of Labor. She acknowledged that American families were struggling as their wages failed to keep up with inflation, while large corporations continued to reap record profits. DeLauro lauded DOL’s overtime and independent contractor rules for putting additional dollars back into the pockets of workers which addresses cost of living today. She said Republicans want to roll back these essential provisions but said that the rollbacks they are seeking would take earned wages away from American workers and their families. She concluded by noting her efforts to push for paid leave and paid sick days for all Americans, rather than just members of Congress, as well as supporting DOL’s crackdowns on child labor practices.
Testimony
Acting Secretary of Labor Julie Su
In her opening statement, Su said that she wanted to frame DOL’s budgetary request into two priorities. She said the first priority is pathways to good paying jobs for all Americans. Su said that the request would help fund investments into proven programs and models that connect workers to the good jobs they want and need, and employers to the good workers they want and need. She cited the career training fund which has an $8 billion request but would help as many as 750,000 Americans, who do not see four-year college as their path, enroll in evidence based, high-quality training programs for actual jobs in their communities. Su said DOL is also seeking additional funds for apprenticeship programs. She said the second priority of the budgetary request is protecting workers. Su said the modest increases in funding for the Department’s worker protection agencies will help to ensure workers are safe and not being exploited. She concluded by saying the budget request will help to make sure workers are able to go home safe and healthy and get high quality jobs.
Question & Answer
DOL Fiduciary Rule
Rep. Chuck Edwards (R-NC) criticized the DOL for allowing the 60-day comment period for its sweeping fiduciary proposal to fall over two major federal holidays which resulted in its comment period being less than 45 actual days. He also noted the high volume of letters from industry stakeholders and Congress that highlighted the shortened comment period and asked for an extension for stakeholders to provide better feedback. Edwards said that despite the pushback, the Department declined and that it seems like the Department was not interested in hearing feedback from stakeholders, potentially because of push back on previous fiduciary rules DOL has received.
Edwards continued, explaining that DOL even further shortened the comment period by holding a hearing on the fiduciary rule in the middle of the comment period, requiring industry stakeholders to articulate their concerns to DOL even sooner. Edwards then asked why the Department is not adequately considering feedback from industry stakeholders and rushing a rule that will significantly impact choice for low- and middle-income Americans and result in millions of Americans losing access to investment advice. Su said that DOL absolutely wants to hear input and that there is no benefit for the Department not to allow full feedback on what it does. She said that this rule is years in the making, with previous iterations of the rule allowing feedback as well as informal conversations DOL has had on the rule’s impact on stakeholders. She said that the 60-day comment period is standard for rules generally and said that DOL’s hearings on the rule were meant to invite additional comments and were not meant to force commenters to only give comments during the hearings themselves. Su also said that the current rule is different than what was proposed in 2016.
Edwards pushed back, saying that Su’s words are inconsistent with her actions as she chose to place the comment period over two major holidays.
DOL Independent Contractor and Overtime Rules
Rep. Andrew Clyde (R-GA) criticized DOL’s independent contractor rule saying it would upend independent contractor work by exposing businesses to legal liability and limiting opportunities for individuals to work as independent contractors. He explained that as full-time job, second job, or part time work, roughly 45% of Americans pursue employment as independent contractors. He then asked in light of these concerns what DOL was doing to ensure that Americans can continue to work as independent contractors. Su said that she agreed that independent contractors play an extremely important role in the economy and that DOL’s rule does not affect bonafide independent contracting.
Clyde then asked if DOL conducted studies to see the economic impact of millions of Americans no longer qualifying as independent contractors. Su responded saying the rule brought the test back to be aligned with decades of federal case law on this issue and explained that DOL did not create the test and that it came from legal cases that have interpreted how to decide if someone was an independent contractor or not.
DeLauro said that companies for years have been intentionally mislabeling their employees as managers in order to avoid paying overtime. She called this practice wage theft and asked how raising the overtime threshold would help to prevent this widescale wage theft. Su said overtime violations are among the most common that DOL sees, and that mistitling employees to avoid overtime pay is one of the reasons why DOL put forward its overtime rule.
Impact of DOL on Business and Workers
Aderholt noted the Regulatory Flexibility Act which requires agencies to consider the effects of regulations on small businesses by performing initial regulatory flexibility analysis. He asked what steps DOL takes to meet the requirements of the Regulatory Flexibility Act and ensure that proposals take into consideration their effect on small businesses. Su said Aderholt may be referring to a law that requires OSHA to conduct a small business review when adopting regulations. She said DOL is careful to ensure the rules it puts forth do not have unintended impacts and that they go through a very careful review that includes small businesses. Su said beyond small business reviews DOL engages with small businesses through listening sessions and inviting input.
Rep. Andy Harris (R-MD) said that wages have not kept up with inflation, likely partially due to the increase in illegal migrants depressing wage growth and asked what DOL was doing to combat that. Su said that while some Americans are still struggling, wage growth is actually outpacing inflation and that creating a larger economic pie could see better job opportunities for all.
Rep. Mark Pocan (D-WI) asked whether the funds requested for the Office of Labor Management Standards (OLMS) were sufficient and noted the National Labor Relations Board as critically underfunded. Su said that we have seen historic membership and historic compensation wins for unions in recent years and that the OLMS helps to ensure that workers aren’t dissuaded from joining unions by their employers. She also said that while she can’t comment on the NLRB as it is an independent agency, she believes that workers should have the right to choose whether they want to join a union or not.
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