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Labor Secretary Alexander Acosta fielded a range of questions on the DOL's priorities during a November 15 hearing before the House Committee on Education and the Workforce. Although members of the Committee inquired about past, current, and future rulemaking and other Department initiatives, the limited duration of Wednesday's hearing allowed Secretary Acosta to deliver only brief responses. The hearing did, however, provide some insight into the DOL's stance on health care, OSHA enforcement, overtime rulemaking authority, apprenticeship, and other workplace concerns.
Last month, President Trump issued an executive order: "Promoting Healthcare Choice and Competition Across the United States." This order called for the administration to prioritize, among other things, expanding access to association health plans (AHPs). AHPs would allow small businesses to join together, such as through their trade association, to offer health care coverage to their employees as large employers do. During the hearing, Secretary Acosta said that earlier in the day a proposed rule governing such plans was sent to the Office of Management and Budget (OMB) for approval. According to Secretary Acosta, AHPs provide an opportunity for small businesses to "create scale" and increase risk pools, thereby reducing the cost of health care for its members. Acosta said he was limited in his ability to discuss specifics, as the proposal has not yet been made public.
Rep. Jason Lewis (R-MN) asked the Secretary about the status of the enjoined overtime rule. Earlier this year, the DOL issued a request for information (RFI) seeking input and data on how the agency should re-write a new overtime rule. Secretary Acosta said the rule has not been updated since 2004, and is in need of revision. He noted the RFI has resulted in thousands of comments, which will enable the agency to "write a new overtime rule in accordance with legal standards."
The DOL recently appealed a Texas federal court's decision rejecting the overtime rule, but only to the extent the court was "less than clear" about the agency's authority to revise the rule in the first place. In response to a question from Rep. Mark Takano (D-CA), Secretary Acosta reaffirmed the current administration's position that the Obama administration's revised salary threshold triggering overtime exemption was unlawful, and represented a "shock to the system" for many employers. No members of the Committee asked the Secretary about other potential changes to the rule, such as whether he favored an automatic inflation-driven increase for the minimum salary level or geographic ranges in the salary threshold.
OSHA Rulemaking and Enforcement
Several questions related to OSHA regulations and enforcement in general. Rep. Tim Walberg (R-MI) asked about the status of the rule governing occupational exposure to crystalline silica. He noted that many employers have concerns with the costs and burdens of complying with this rule. The Secretary responded that this is a "major rule" that is currently the subject of litigation. The agency provided a 30-day compliance extension to give the litigating parties a chance to voice their concerns and come to a "sensible outcome."
Rep. Rick Allen (R-GA) echoed Rep. Walberg's concerns, and asked whether OSHA plans to clarify which portions of the rule remain in effect. Secretary Acosta reiterated that the rule is "complicated" and has multiple compliance dates, some of which are in effect. He remained hopeful that the parties are close to settlement, and said OSHA would "redouble" its efforts to clarify the rule's current status and compliance obligations.
Other members of the Committee asked what efforts the Department will take to "rein in" OSHA's enforcement activities. Rep. Lloyd Smucker (R-PA) expressed his belief that the agency has become more punitive in recent years. Secretary Acosta responded that his Department is seeking additional funding for OSHA's Voluntary Protection Program (VPP), in which employers that effectively demonstrate their commitment to workplace safety are exempt from OSHA programmed inspections. Acosta emphasized, however, that compliance assistance goes "hand in hand" with "aggressive enforcement" of repeated and willful violations, and that he favored criminal prosecution of such offenders.
Rep. Mark DeSaulnier (D-CA) asked about the status of the postponed rulemaking that would have provided for electronic notification of workplace injuries and illnesses. Secretary Acosta said the Department is looking at that rule, but must balance privacy issues with the need for information.
Several lawmakers asked Secretary Acosta to clarify the status of the fiduciary rule. This rule, issued during the prior administration, re-defines who is deemed a "fiduciary" of an employee benefit plan under the Employee Retirement Income Security Act (ERISA) by providing investment advice to a plan or its participants or beneficiaries. The Secretary explained that the rule's best interest standard1 took effect in June, while other parts of the rule are subject to a notice of proposed rulemaking pending at OMB. According to Acosta, "the title of that notice would make clear that there would be an 18-month extension" of those portions of the rule if the notice moves forward.
Ranking member Bobby Scott (D-VA) noted that expansion of apprenticeship programs has bipartisan support. Lawmakers on both sides of the aisle touted the benefits of apprenticeship, but recognized there was room for improvement for existing programs. The Secretary said he was looking to streamline the certification process, as well as provide for portable credentials. He said he has also asked for the authority to merge duplicative job programs. These efforts have been spurred by the June executive order: "Expanding Apprenticeships in America," which called for the DOL to identify strategies and proposals to promote apprenticeships.
The Committee broached several other topics during the hearing. Committee Chair Virginia Foxx (R-NC) referenced the rescission of the Office of Labor Management Standards' (OLMS) much-maligned "persuader rule," and asked what steps the DOL plans to take to ensure the OLMS "can once again provide robust oversight on behalf of union workers." Given the hearing's time constraints, Secretary Acosta said he would respond in writing.
Other Committee members asked what the DOL's plans are to address the uptick in workplace violence and the proliferation of "worker centers" that support employee organizing but are not governed by federal labor laws. On both issues, Secretary Acosta said he would follow up.
During a separate line of inquiry, Secretary Acosta mentioned that the Bureau of Labor Statistics would be issuing a study on the gig economy in the spring, although he did not elaborate on this issue.
Wednesday's hearing marked the first time this year a current cabinet member appeared before the Committee. While relatively short, the hearing did show where the DOL might focus its energy and resources in the year ahead.
A webcast of this hearing can be viewed here.
1 This best interest standard has two chief components: prudence and loyalty. Under the prudence standard, the advice must meet a professional standard of care as specified in the text of the exemption. Under the loyalty standard, the advice must be based on the interests of the customer, rather than the competing financial interest of the adviser or firm. See Sean D. Brown, DOL Fiduciary Rule Still a Go for June 9, but its Future Remains Uncertain, Littler ASAP (June 7, 2017).