House Ed & Labor DOL Hearing

House Education and Labor Committee

Examining the Policies and Priorities of the U.S. Department of Labor

Wednesday, June 9, 2021

Witnesses

• The Honorable Martin J. Walsh, Secretary, Department of Labor

Opening Statements
Chairman Bobby Scott (D-Va.)
In his opening statement, Scott stated that the Trump Administration made it difficult for lower- and middle-class Americans to succeed, while with the Administration’s $2 million tax cut, corporations have been successful. He said he believes that the Trump Administration’s overtime rule, independent contractor rule (recently withdrawn by the Biden Administration) and abandoned infectious diseases standard have harmed workers’ welfare significantly; in contrast, he said the Biden Administration and House Democrats have attempted to redress these grievances via healthcare subsidies, emergency financial assistance including relief checks, and pension protections for over one million Americans. Scott said it is essential to create millions of good-paying jobs for American individuals and families to achieve financial security and get back to work. He stated that college degrees must be made more accessible, job training must be expanded for workers to achieve higher-quality careers, and worker protections and employee benefits must be expanded. In addition, he said workplace safety issues as a result of the pandemic must also be addressed.

Ranking Member Virginia Foxx (R-N.C.)
In her opening statement, Foxx stated that political leaders must support job creation and stand for all workers’ interests, which include providing for their families and participating in the American economy freely. Foxx said she believes that Democrats’ permanent pandemic status quo continues to inflict financial distress, saying Biden’s budget puts Washington’s political class ahead of the labor class. Foxx referenced the Bureau of Labor Statistic’s recent report that job openings reached a high in April, while hiring qualified workers remains difficult for corporations, adding that Democrats spent trillions of dollars on stimulus policies that did not create the massive growth that had been expected but instead created lackluster job proliferation. She said that through unemployment benefits, Democrats have created an incentive for healthy Americans to stay at home instead of work. Foxx said the Biden Administration’s regulatory “whiplash” on small businesses has manifested in the American economy’s lethargic recovery, saying that Democrats have worked to gratify union and big-labor wishes at the expense of individual American workers and taxpayers. She concluded that Republican policies facilitated unprecedented financial success for all families prior to the pandemic, and believes reintroducing these policies would return the country to the dynamic economic growth necessary.

Testimony
Martin J. Walsh, Secretary, U.S. Department of Labor
In his testimony, Walsh noted that the American economy faces large challenges requiring transformative solutions, including the President’s proposals for the American Jobs Plan, American Family Plan, and its 2022 Fiscal Year Budget. Walsh stated the impact of deeply inadequate federal funding—the United States spends only 0.1 percent of its GDP on workforce policy, compared to an average of 0.6 percent spent by other wealthy nations. He said the President recognizes the critical role that workforce development plays in strengthening our economy and our competitiveness on the world stage, and that the Administration has proposed an investment of $1 billion dollars on workforce development, much of which is dedicated to building the capacity of our current workforce system via evidence-based programs. Walsh stated that the President is deeply committed to equity in the American workforce, saying many communities continue to face systemic racism and persistent economic inequality, but the President believes that everyone should get a good-paying high-quality job, including women, people of color, people with disabilities, veterans, transitioning service members and their spouses. Walsh noted the American Jobs Plan focuses on key proposals to expand access to high-quality training and service, improve data transparency and accountability to promote outcomes, and integrate workforce education and public assistance systems to reach workers and regional economies.

Question & Answer

E-Delivery
Rep. Burgess Owens (R-Utah) mentioned the Department of Labor’s (DOL) decision in 2020 to issue a safe harbor rule that allowed for default e-delivery of retirement plan documents and asked if increased online engagement by plan participants has a positive impact on retirement preparedness. Walsh said he is unsure but will look into it to determine if that is the case.

Gig Workers
Rep. Frederica Wilson said unions are the backbone of American prosperity and noted that the Administration is calling for a $1.5 billion appropriation for dislocated workers. She asked if the Administration would support an expansion of eligibility for dislocated worker programs that would take into account gig workers who do not automatically qualify. Walsh said they are looking into it now.

Rep. Mariannette Miller-Meeks (R-Iowa) quoted Walsh from an article as saying “gig workers should be classified as employees and deserve work benefits like full health coverage which had significant negative impact on stocks for companies like Uber, Door-Dash, Lyft, and Grubhub,” and asked if this policy could destroy the business model of these companies. Walsh said since that interview, he has met with many of these companies to discuss the industry.

Protecting the Right to Organize (PRO) Act
Rep. Joe Wilson (R-S.C.) asked what can be done to ensure civil penalties are imposed against people retaliating against workers joining a union. Walsh said the PRO Act and other legislation on the Hill are looking out for the rights of workers.

Rep. Michelle Steel (R-Calif.) mentioned the ABC test in the PRO Act and asked why DOL is continuing to push for “a failed policy” that limits the flexibility and opportunity offered by independent contracting. Walsh said the ABC test has proven to be helpful and added that the Biden Administration’s policy is to support good quality union jobs, arguing that a comprehensive solution to the misclassification of workers is a key part of that agenda.

Multiemployer Plans
Allen said Democratic colleagues have disregarded the burden that multiemployer plans place on taxpayers who will not benefit from the open ended and expansive provision, noting that the system is underfunded by $673 billion and asked what the solution should be. Walsh said the rescue plan addresses some of the funding issues and that he met with people earlier today about the issue. He added that many people in this plan are taxpayers as well and on the verge of losing their pensions and he is “rolling up his sleeves” to work on this issue.

Healthcare and Employee Retirement Income Security Act (ERISA)
Miller-Meeks asked about DOL’s regulation to allow small employers and self-employed individuals to join together for group health coverage and if DOL plans to implement the regulations or rescind them through a new rulemaking process. Walsh said he is not familiar with DOL’s past practice and any move by the Administration to rescind that.

Allen asked if the DOL supports extending the ERISA standalone telehealth exemption. Walsh said they are still working on that situation and what the reforms and rules would look like.

Environment, Social, and Governance (ESG)
Rep. Teresa Leger Fernandez (D-N.M.) asked how DOL plans to assist fossil fuel workers as the country transitions to a clean energy economy. Walsh said there is a reauthorization for veterans to get into the clean energy economy, as well as job training and workforce development to enhance the skills of workers who understand the fossil fuel industry that can work in the new environmental industry.

Labor Unions
Rep. Rick Allen (R-Ga.) mentioned the Labor Management Reporting Disclosure Act and DOL’s recent proposed rule to rescind the Trump Administration’s final rule on labor organization trusts and asked to explain how repealing the DOL rule that ensures financial transparency for union members is in the best interest of American workers. Walsh said the rule did not change the way they can go in and check labor unions, adding that they already collect the information, so the rule was rescinded because it was redundant.

Foxx asked about the decision to repeal the transparency rule and how Walsh will ensure and administer workplace laws. Walsh said he takes his obligation as Secretary to uphold the Constitution seriously.

Steel asked for support of her and Rep. Walberg’s Union Transparency and Accountability Act to turn transparency rules into law, require unions to disclose the name of any party buying or selling union assets over $5,000 and require union officials to declare whether they receive an income or benefits from an entity that does business with the union and employs union members to avoid conflicts of interest. Walsh said they are not rolling back the rule to hinder transparency, but rather just getting rid of redundancy around Form T-1 and that the forms still need to be filed.

Jayapal asked Walsh if he supports her Domestic Workers Bill of Rights, a federal standard that would reverse domestic workers’ exclusion form the Fair Labor Standards Act and provide workers with the rights and protections. Walsh said yes.

Apprenticeship Programs
Scott said the most important takeaway from the apprenticeship programs is leaving with a nationally recognized credential. Reps. Joe Courtney (D-Conn.) and Joe Wilson (R-S.C.) asked about the National Apprenticeship Act and how investments in this area benefit the economy. Walsh said workforce development and apprenticeship programs are the most important pieces of investment for the future and raising employment levels. Rep. Donald Norcross (D-N.J.) asked specifically about the Registered Apprenticeship Program and what it will look like. Walsh said it provides an individual with a job and pathway to a career and they receive a progressive wage.

Rep. Suzanne Bonamici (D-Ore.) asked what will be done to help more individuals who tend to face barriers to employment and to ensure more diverse populations can participate and succeed in apprenticeship programs. He said it is a top priority of DOL and to make sure the funds help the most impacted communities like women and people of color.

Minimum Wage
Reps. Frederica Wilson (D-Florida), Jahana Hayes (D-Conn.), and Pramila Jayapal (D-Wash.) asked Walsh if he supports an increased minimum wage and why. Walsh said the minimum wage is too low to live off and that every American regardless of their background, race, and gender deserves a $15 minimum wage. He said the pandemic highlighted inequities in America and the goal is to put people on level playing fields.

Unemployment Assistance
Reps. Tim Walberg (R-Mich.) and Elise Stefanik (R-N.Y.) asked if the significant fraud in pandemic unemployment programs coupled with the plunge in Covid-19 cases indicate a need for federal emergency employment insurance to be terminated. Walsh said no, and that the President’s economic plan is working and continuing to create jobs boost the economy.

Rep. Glen Grothman (R-Wisc.) asked if the unemployment assistance is preventing Americans from going back to work. Walsh said $300 in unemployment benefits is not what is keeping Americans home. He said the reasons include a lack of childcare, schools still being hybrid, people not being vaccinated, and some having to stay home to take care of loved ones.

Rep. Lisa McClain (R-Mich.) asked when it will be necessary to end the benefits, if the recent job reports were not enough of a sign. Walsh said the unemployment extension benefit is set to expire in September and added that Biden’s recovery plan has added 1.2 million jobs to the economy. He said he is hopeful and optimistic that most of the economy will be working again by the end of September.

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