A number of lawmakers at Wednesday’s hearing on the Department of Labor’s budget request for Fiscal Year 2013 conducted by the House Committee on Education and the Workforce raised concerns with the DOL’s proposed budget agenda. Last week, the Senate Appropriations Subcommittee held a similar hearing. Once again Labor Secretary Hilda Solis responded to questions about how the agency would spend the $12 billion in discretionary funds that the President’s 2013 proposed budget allocates to the DOL. House members asked Solis, among other topics, about the Employee Benefits Security Administration’s (EBSA) proposal to amend the definition of “fiduciary”; the Occupational Safety and Health Administration’s (OSHA) recently-issued final and proposed regulations; and the Wage and Hour Division’s (WHD) proposal to extend Fair Labor Standards Act (FLSA) protections to home care workers.

Chairman John Kline (R-MN) set the tone of the hearing in his opening statement, where he criticized some of the DOL’s recent regulatory activities:

In policies governing workplace safety and wage and hour standards, punitive enforcement actions take precedent over efforts to help employers understand and comply with the law. The department is also advancing costly regulatory schemes that are creating even more uncertainty for job creators, such as crafting an injury and illness prevention plan that would burden employers with more mandates but do little to improve workplace safety. And while employers face more punitive measures, union leaders continue to enjoy less transparency and accountability over how they spend workers’ dues.

During the hearing Kline was particularly critical of what he perceived as the lack of enforcement efforts by the Office of Labor Management Standards (OLMS) to investigate potential union corruption and other improprieties.

Fiduciary Rule

Many lawmakers focused their questions on the EBSA’s decision to withdraw and re-propose a rule that would more broadly define who constitutes a “fiduciary” for the purposes of rendering investment advice under the Employee Retirement Income Security Act (ERISA). In September 2011, the EBSA announced that it would gather more input from stakeholders and re-issue the rule after additional consideration. One House member expressed concern about how the rule would impact investor privacy. In response, Solis said that her department has received comments from both the House and Senate as well as from additional stakeholders, and will coordinate with the Securities and Exchange Commission (SEC) in re-drafting the rule.

Rep. Rush Holt (D-NJ) inquired as to whether the EBSA is “asking the right questions” about the fiduciary rule, and whether the agency has finished collecting data. Solis stated that the agency is “not in a hurry” to re-propose the rule, and is therefore still amendable to collecting additional information.

Holt also asked whether the agency is close to finalizing a lifetime income disclosure rule similar to the Lifetime Income Disclosure Act (H.R. 677) he co-sponsored with Rep. Thomas E. Petri (R-WI). This bipartisan bill would amend ERISA to require 401(k) plan sponsors to inform participating workers of the projected monthly income they could expect at retirement based on their current account balance. Solis responded that she also wants there to be more financial transparency when it comes to retirement plans, and is still soliciting public comment on this issue.

OSHA-Related Rules

Rep. Tim Walberg (R-MI) asked how OSHA planned to structure the much-anticipated Injury and Illness Prevention Program (I2P2) regulation so that it “will not become a one-size fits all, inflexible government mandate.” Solis responded that the agency is still in the process of drafting the standard, and is “taking all comments seriously.” According to Solis, OSHA’s intent is to “bring conformity” to workplace rules, and that it is still “a work in progress.”

Solis also faced tough questions about the recently-issued final rule that significantly revises OSHA’s hazard communication standard. Among other changes, the final rule creates a new category for so-called “hazards not otherwise classified.” Rep. Bob Goodlatte (R-VA) asked what this phrase means, how employers are to recognize such hazards when they are “not otherwise classified,” and how employers are to structure their business operations to prevent hazards that are not classified. Solis did not provide specific answers to these questions, but rather claimed that many businesses in the industry were supportive of the rule. Goodlatte urged OSHA to provide clarification on this issue.

Not all lawmakers were critical of the DOL. Rep. Lynn Woolsey (D-CA), for example, claimed that there is a backlog in OSHA whistleblower investigations, and wondered whether the proposed $5 million increase in funds to target whistleblower violations was sufficient.

Companionship services

Some committee members also asked Solis about whether the WHD had fully considered the potential repercussions of its proposed rule that would revise the FLSA’s companionship and live-in worker regulations. On Tuesday, the House Committee on Education and the Workforce’s Subcommittee on Workforce Protections held a hearing to examine this proposal. Solis said that the agency will examine all stakeholder input in crafting a final rule.

More information about the March 21 budget hearing can be found here.

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