[Senate Hearing 111-162]
[From the U.S. Government Publishing Office]
S. Hrg. 111-162
NOMINATION OF
SETH HARRIS AND M. PATRICIA SMITH
=======================================================================
HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
ON
NOMINATION OF SETH HARRIS TO BE DEPUTY SECRETARY OF THE DEPARTMENT OF
LABOR AND M. PATRICIA SMITH FOR SOLICITOR OF THE DEPARTMENT OF LABOR
__________
MAY 7, 2009
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
EDWARD M. KENNEDY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut MICHAEL B. ENZI, Wyoming
TOM HARKIN, Iowa JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico RICHARD BURR, North Carolina
PATTY MURRAY, Washington JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island JOHN McCAIN, Arizona
BERNARD SANDERS (I), Vermont ORRIN G. HATCH, Utah
SHERROD BROWN, Ohio LISA MURKOWSKI, Alaska
ROBERT P. CASEY, JR., Pennsylvania TOM COBURN, M.D., Oklahoma
KAY R. HAGAN, North Carolina PAT ROBERTS, Kansas
JEFF MERKLEY, Oregon
SHELDON WHITEHOUSE, Rhode Island
J. Michael Myers, Staff Director and Chief Counsel
Frank Macchiarola, Republican Staff Director and Chief Counsel
(ii)
C O N T E N T S
__________
STATEMENTS
THURSDAY, MAY 7, 2009
Page
Murray, Hon. Patty, a U.S. Senator from the State of Washington,
opening statement.............................................. 1
Prepared statement........................................... 2
Burr, Hon. Richard, a U.S. Senate from the State of North
Carolina....................................................... 4
Lautenberg, Hon. Frank R., a U.S. Senator from the State of New
Jersey......................................................... 6
Schumer, Hon. Charles E., a U.S. Senator from the State of New
York........................................................... 7
Harris, Seth, Montclair, NJ, Professor and Director of Labor &
Employment Law Programs, New York Law School................... 9
Prepared statement........................................... 10
Smith, M. Patricia, Albany, NY, Commissioner of Labor, New York
State Labor Department......................................... 12
Prepared statement........................................... 14
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Enzi, Hon. Michael B., a U.S. Senator from the State of
Wyoming, prepared statement................................ 28
Response by M. Patricia Smith to questions of:
Senator Enzi............................................. 29
Senator Isakson.......................................... 30
Senator Coburn, M.D...................................... 35
HELP Committee........................................... 36
(iii)
NOMINATION OF
SETH HARRIS AND M. PATRICIA SMITH
----------
THURSDAY, MAY 7, 2009
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The committee met at 10:03 a.m., in room SD-430, Dirksen
Senate Office Building, Hon. Patty Murray presiding.
Present: Senators Murray, Casey, Merkley, and Burr.
Opening Statement of Senator Murray
Senator Murray. Good morning. This hearing of the Senate
Health, Education, Labor, and Pensions Committee will come to
order.
First of all, I would like to extend my warmest wishes to
our chairman, Senator Kennedy who, as we all know, continues to
be a very great champion for America's workers. We all wish him
the best.
The Department of Labor is charged with a critical mission
in our Nation's government that includes fostering and
promoting the welfare of America's workers by improving their
working conditions, advancing their opportunities for
profitable employment, protecting their retirement and health
care benefits, helping employers find workers, and
strengthening free collective bargaining.
Few things are more important during these challenging
economic times than making sure that the agency charged with
serving and protecting workers has the leadership it needs to
make that mission a reality.
So I am pleased today to have two nominees with us who have
answered the call to service and are committed to the task at
hand and are highly qualified for the job.
Seth Harris has been a professor of law at the New York Law
School since 2000 and is currently serving as a consultant at
the Department of Labor. Seth helped lead the Obama
administration's Agency Review Working Group on Education,
Labor, and Transportation, and he has experience at the
Department.
From 1993 to 2000, he served in several roles at Labor,
including Acting Assistant Secretary for Policy, Deputy
Assistant Secretary for Policy, and senior advisor to both
Secretary Alexis Herman and Robert Reich.
M. Patricia Smith has been the Commissioner of New York
State Department of Labor since 2007. She is co-chair of New
York State's Economic Security Sub-cabinet, and oversees 3,700
employees in 80 offices with an annual budget of $4 billion.
For the previous 20 years, Tricia worked in the Labor
Bureau of the New York Attorney General's Office, and she
served on the Obama administration's transition review team for
the Department of Labor.
As chair of the Subcommittee on Employment and Workplace
Safety, I know the challenges that America's workers are
facing. So I am pleased that the Obama administration has made
it clear that working families will once again be a top
priority in this country. And that commitment is demonstrated
by the quality of nominees before us today.
If confirmed as Deputy Secretary, Seth will face the
tremendous challenge of allocating and managing the
Department's resources effectively in order to enforce the laws
under the agency's charge. He will also be charged with
connecting the efforts across Labor into a larger strategic
plan to accomplish the Department's mission.
If confirmed as the Department's top legal counsel, Tricia
will have the profound responsibility of enforcing more than
180 Federal laws and managing more than 450 attorneys
nationwide. She will be responsible for defending the
Department in litigation, as well as providing legal advice and
guidance on nearly every policy, legislative, regulatory, and
enforcement initiative of the Department. Most importantly, she
will be responsible for defending the rights of workers when
they are not able to speak for themselves.
Both of you have a big job ahead of you, if you are
confirmed, and working families need the Department to be the
advocate Congress intended it to be, a charge that I know
neither of you takes lightly.
So I want to thank both of you for taking the time to be
here at this hearing today and to take on these
responsibilities. I have met both of you. I am confident that
you are highly qualified for the positions you have been
nominated for, and I hope that this committee can move the
process quickly so that both of you can get to work. America's
working families need a fully functioning Department of Labor
now more than ever. So I, again, thank you both for taking on
this responsibility and being here.
I will turn it over for an opening remark from our
colleague, Senator Burr.
Prepared Statement of Senator Murray
This hearing of the Senate Health, Education, Labor, and
Pensions Committee will come to order.
First, I'd like to send my warmest wishes to our Chairman,
Senator Kennedy, who continues to be a great champion for
America's workers.&
The Department of Labor is charged with a critical mission
in our Nation's government that includes fostering and
promoting the welfare of America's workers by: improving their
working conditions, advancing their opportunities for
profitable employment, protecting their retirement and health
care benefits, helping employers find workers, and
strengthening free collective bargaining.
Few things are more important during these challenging
economic times than ensuring that the agency charged with
serving and protecting workers has the leadership it needs to
make that mission a reality.
So, I'm pleased to have two nominees with us today who have
answered the call to service, are committed to the task at
hand, and are highly qualified for the job.
Seth Harris has been a professor of law at New York Law
School since 2000 and is currently serving as a consultant at
the Department of Labor. Seth helped lead the Obama
administration's Agency Review Working Group on Education,
Labor, and Transportation. And he has experience at the
Department. From 1993 to 2000, he served in several roles at
Labor, including Acting Assistant Secretary for Policy, Deputy
Assistant Secretary for Policy, and senior advisor to both
Secretary Alexis Herman and Robert Reich.
M. Patricia Smith has been the Commissioner of the New York
State Department of Labor since 2007. She is co-chair of New
York State's Economic Security sub-cabinet, and oversees 3,700
employees in 80 offices with an annual budget of $4 billion.
For the previous 20 years, Tricia worked in the Labor Bureau of
the New York Attorney General's Office. And, she served on the
Obama administration's transition review team for the
Department of Labor.
As Chair of the Subcommittee on Employment and Workplace
Safety, I know the challenges that America's workers are facing
right now. And, I know the previous Administration's track
record on putting workers first is less than stellar. So, I'm
pleased that the Obama administration has made it clear that
working families will once again be a top priority in this
country. And that commitment is demonstrated by the quality of
nominees before us today.
If confirmed as Deputy Secretary, Seth will face the
tremendous challenge of allocating and managing the
Department's resources effectively in order to enforce the laws
under the agency's charge. He will also be charged with
connecting the efforts across Labor into a larger strategic
plan to accomplish the Department's mission.
If confirmed as the Department's top legal counsel, Tricia
will have the profound responsibility of enforcing more than
180 Federal laws and managing more than 450 attorneys
nationwide. She will be responsible for defending the
Department in litigation, as well as providing legal advice and
guidance on nearly every policy, legislative, regulatory, and
enforcement initiative of the Department. Most importantly, she
will be responsible for defending the rights of workers when
they aren't able to speak for themselves.
Both of you have a big job ahead of you if confirmed. And
working families need the Department to be the advocate
Congress intended it to be--a charge that I know neither of you
takes lightly.
I want to thank both of you for taking the time to speak
with me. After our conversations, I am confident that both of
you are highly qualified for the positions you have been
nominated for. And I encourage my colleagues to move through
this process quickly, so you can get to work.
America's working families need a fully functioning
Department of Labor more than ever. So, thank you for being
here.
Before we hear from our witnesses, I'll turn to Senator
Burr for his opening statement.
Statement of Senator Burr
Senator Burr. I thank you, Madam Chairman. I welcome our
witnesses today and look forward to their confirmation in the
Senate. I will try not to hold my colleagues up who are here
for an important reason, and that is to introduce them. But I
do have an extended opening statement.
I want to thank Senator Murray and thank Seth Harris and
Patricia Smith, our witnesses today. They have been nominated
to important positions in the Department of Labor. At a time of
economic upheaval, we need a Labor Department that helps
inspire the confidence that will allow America's economy to
recover.
Unfortunately, there are some early signs from the
Administration that are troubling in terms of following the
normal rulemaking procedures, and they concern me.
Specifically, I am concerned by the economically damaging
decision of the Department to reverse the recent improvements
made to the H-2A temporary worker program. This decision is
causing great distress to farmers across the country, including
my State of North Carolina. I have written to Secretary Solis
about the issue. However, her response was not reassuring. In
fact, the letter was, in all candor, a nonanswer.
Let me lay out the background here for my colleagues. On
March 17, the Labor Department suspended the implementation of
new regulations that were designed to improve the H-2A
temporary worker program. The new rules were implemented on
January 17, 2009 and were a collaborative effort that
progressed through the traditional rulemaking process.
The newly promulgated rules have been under development
with input of Members of Congress on both sides of the aisle
for over a year and are critical to the economic well-being of
the agribusiness community in North Carolina and the entire
United States. Farmers in my State have already made decisions
about the 2009 growing season, taken out loans, made crop
protection decisions, bought fertilizer and seed, rented land,
made equipment decisions, and entered into marketing
agreements. Many of these budgetary decisions were made on the
Department of Labor's estimates regarding their expected labor
costs to hire a legal workforce to man their fields.
Changing the rules at this point without going through the
traditional rulemaking process severely impacts farming
operations and the financial stability of the agribusiness
community. For example, according to North Carolina's
Agribusiness Council, under this proposal a North Carolina
farmer who employs 45 H-2A workers will have an added and
unexpected expense to his budget this year of approximately
$250,000. Given that farmers are in the business of growing
commodities and have no way to increase the price of their
product, they will have to make it up through tough decisions
in extremely tough economic times. It is very important that
many farmers in my State and other States throughout the Nation
will be forced to suspend their operations for the entire year
or longer as a result of an arbitrary agency decision.
I am troubled by the lack of information that was provided
to Congress and to my constituents about why this swift
decision was made. I asked the Secretary of Labor for a
detailed explanation of why she planned to suspend the newly
implemented regulations that went through the extensive
traditional rulemaking process, with contributions from various
stakeholders as well as bipartisan Members of Congress.
Mr. Harris is a nominee to a chief policy position at DOL.
I want to explore this issue with you during the questions.
The Secretary's letter stating that the Department cannot
comment on the H-2A regulations because of pending legal
challenges is difficult to accept. The Department and other
agencies frequently comment on regulations that are the subject
of litigation.
The Administration lays out in its letter, and I quote,
``evidence emerged that the Department of Labor and State
workforce agencies lack sufficient resources to adequately
implement the new rule.'' In fact, the final rule dramatically
streamlined the H-2A application process for the Department and
State workforce agencies, and some State workforce agencies
actually opposed the suspension. It is difficult to understand
how it can be said that agencies that were able to operate
under the previous rule and which were presumably able to
operate if the final rule were suspended would not be able to
implement a rule that involved less work for agencies and was
more streamlined.
As you know, the Department of Labor received more than $80
million in the stimulus package for various programs and
functions, including oversight of existing worker laws. The
language also gave the Department of Labor the discretion to
transfer any or all of these moneys to the Employment and
Training Administration which governs the H-2A program. In
addition, the omnibus spending bill provided $82.6 million for
migrant and seasonal worker programs. Both funding bills passed
before the rule was suspended. To claim that there was not
sufficient money is disingenuous.
While we appreciate the expressed concerns about the
economic recession and its impact on employers and employees,
suspending a rule that farmers have justifiably relied on to
make their hiring, planning, pricing, and other crucial
decisions for the 2009 season has not been helpful. Creating
regulatory chaos among farmers does not help farm workers. If
the agricultural industry suffers because of this arbitrary
decision, then American and guest workers will suffer lost job
opportunities.
In addition, increases in food costs that will result from
these higher legal and labor costs that the Department is now
imposing on farmers will adversely affect all Americans,
especially those of limited means.
The weakness of the Department's arguments concern us
greatly as it leads us to believe that the Department has made
an arbitrary decision to disregard the public rulemaking
process purely to change with the views of the new
Administration. In fact, our staffs have been told that because
the improvements were implemented 3 days before the new
Administration took office, that it was the prerogative of the
new Administration to change them.
The assertion has also been made that the 10-day comment
period was acceptable because it was considered to be a simple
decision to suspend implementation of a regulation.
In addition, the Secretary's letter uses the pretense that
the Department is reviewing the comments received by
stakeholders. However, the day before the letter was sent, the
Department submitted to the Office of Management and Budget a
final rule on the suspension. This indicates to us that the
Department has made up its mind contrary to the Secretary's
letter to me. She is no longer considering these comments,
which we were told largely opposed the suspension.
Mr. Harris, the collective efforts of the American people
to produce food should not be undermined by a mere change in
Administrations. The improvements made to the H-2A program were
the product of 18 months of work and collaboration in a
bipartisan fashion through a public comment period and enjoyed
the support of members on both sides of the aisle.
That is because agricultural policy is not simply a matter
of politics. It is a complex mixture of regional views, urban
versus rural dynamics, environmental concerns, and many other
factors. Due to this complexity, regulatory decisions made on
agricultural matters are best made through a public rulemaking
process that includes, not excludes, the view of stakeholders.
Mr. Harris, I look forward to hearing your views on this
matter and your read on why the Department is unable to carry
out its responsibilities under the new regulations and why it
decided to act outside the normal rulemaking process with
little to no consultation with interested or impacted parties
on this.
Madam Chairman, I thank you for the available time to make
my opening comments, and I yield the floor.
Senator Murray. Thank you very much, Senator Burr.
We have two of our colleagues who have joined our committee
today to introduce their home State friends. Senator
Lautenberg, if you would like to do your opening remarks and
then Senator Schumer.
Statement of Senator Lautenberg
Senator Lautenberg. Thank you very much, Madam Chairman,
and thank you, Senator Burr, for being here.
This is a wonderful opportunity when we have someone with
the qualifications of Seth Harris, a New Jersey resident, a
dedicated public servant. He served on a high post in the
Clinton administration, academically well-qualified, also
practiced law. So he has seen it from all aspects. He is
President Obama's nominee to become our country's next Deputy
Secretary at the Department of Labor.
There is no more important concern that we have than what
happens with the working public. Just yesterday, the statistics
were released that indicated that there was a slowing down of
the number of cases that would be applying for unemployment
insurance.
And by the way, forgive me for the moment, but that
statistical base comes from a company called ADP. It is a
company I was the founder of, and it has surpassed the Bureau
of Labor Statistics for accuracy and timeliness.
[Laughter.]
Senator Schumer. Not after these two nominees.
Senator Lautenberg. I have no pecuniary interest.
[Laughter.]
The members of this committee are acutely aware that we are
struggling with the most severe economic crisis since the Great
Depression. Back home in our State of New Jersey, Mr. Harris
and I have seen the effects of this crisis firsthand. The
unemployment rate in New Jersey is the highest it has been in
15 years, and those men and women who still have jobs are often
working longer, getting less for their labor. That means less
money to pay for necessities, while the bills are piling up and
collection agencies are calling.
It also has a terrible effect on the attitude and on the
feeling of safety that families have. It is a depressing
moment, and we need all the work that we can get to help allay
this problem for them and get them back into jobs. In these
tough times, the work of the Department of Labor is critical
and consequential. It helps workers find jobs. It helps
employers find workers. And while they seek a job, unemployment
insurance is a lifesaver. It monitors working conditions for
people on the job. It makes sure that people get the benefits,
labor rights, and retirement that they have earned.
And if confirmed, Mr. Harris would be directly responsible
for helping to meet those goals. He would be the second highest
ranking official in the Department and would oversee its day-
to-day operation.
Now, based on his years of expertise, his previous service
at the Department of Labor, I believe that he is exactly the
right person at the right time. And during the Clinton
administration, Mr. Harris served as counselor to the Secretary
of Labor and as Acting Assistant Secretary of Labor for Policy.
He joined New York Law School's faculty in 2000, and today he
is not only a professor, but Director of Labor and Employment
Law Programs. Mr. Harris also has a distinguished educational
background, receiving his bachelor's degree from Cornell
University's School of Industrial and Labor Relations, his law
degree from the NYU School of Law.
David Harris knows what we need to protect our Nation's
greatest asset, our workforce, and I believe that he uniquely
possesses the skills and leadership ability to get that job
done. I am proud to support his nomination, which I hope will
be favorably considered very shortly.
Thank you.
Senator Murray. Thank you very much, Senator Lautenberg.
Now we will turn to Senator Schumer. I note that
Congresswoman Louise Slaughter was here a moment ago in support
of Ms. Smith as well. Senator Schumer, we will turn to you for
an opening statement.
Statement of Senator Schumer
Senator Schumer. Thank you. I want to thank you for
inviting me, Madam Chairwoman, and thank everybody for being
here.
It is my honor to introduce Patricia Smith, not only a
fellow New Yorker, but I have just learned she lives three
blocks away from me in Brooklyn. So she is a fellow
Brooklynite.
[Laughter.]
But there are probably about 10,000 between her house and
my house. So we do not know each other all that well.
Tricia is a dynamic and accomplished public servant, and I
am delighted to support her nomination to be Solicitor of the
U.S. Department of Labor. She is a great fit for this position.
She has devoted her life's work to advocating for the little
guy. And as the Department's top lawyer, she will continue to
vigorously protect and defend our Nation's workers.
She earned her stripe in the New York State Attorney
General's Office where she was head of the Labor Bureau, and
over the course of over 20 years there, she developed a system
of active labor law enforcement that has become the model for
Attorneys General across the country. She even came to
Washington, climbed those daunting steps, and argued two cases
before the U.S. Supreme Court, and she won them both, like a
true Brooklynite.
[Laughter.]
Not the Dodgers, but others.
[Laughter.]
Or rather, I should say, she did not win. The workers won
since both cases involved protecting employee pensions.
In 2007, because of her impressive work in the AG's Office,
she was tapped to become Commissioner of the Department of
Labor, and over the course of her tenure as Commissioner, she
has proven to be a real policy innovator. Just last month,
Tricia established a much-praised program to assist the
unemployed with gas and public transportation costs associated
with looking for work. She has established a Bureau of
Immigrant Workers Rights to protect this particularly
vulnerable group from exploitation. And time and time again,
she has helped ensure that employers compete on a level playing
field by going after businesses that violate minimum wage and
overtime laws.
From the moment she graduated from New York University Law
School 32 years ago, she has been a crusader for workers
rights. It is clear to me she has the experience, the moxie,
and the heart necessary to excel as Labor Solicitor. I
encourage the committee to approve this nomination with the
certitude that Commissioner Smith's credentials merit. And I
thank you, Madam Chair, for the honor of introducing her.
Senator Murray. Thank you very much, Senator Schumer.
With that, we are going to move to both of our nominees
today. We are going to start with Mr. Harris. Mr. Harris, I
understand you have some family members who are here to support
you as well. If you want to take a minute before you do your
statement to introduce them to us.
Mr. Harris. Thanks. I actually have so many, I am just
going to do my immediate family because it would take the rest
of the hearing time. Thank you very much, Madam Chair.
Let me start with the matriarch of our family, my mom,
Martha Harris; the rock of our family and the love of my life,
my wife Karen. Right behind me is my oldest son Jonathan, and
here is my youngest son Daniel. They were the happiest to find
out there was going to be a hearing because they really wanted
to meet a real-live Senator.
[Laughter.]
Senator Murray. Well, there you go.
Mr. Harris. Thank you very much, Madam Chair.
Senator Murray. Well, thank you and thank you to all of
your family for the sacrifice they are making as well.
Mr. Harris, we will start with you.
STATEMENT OF SETH HARRIS OF MONTCLAIR, NJ, PROFESSOR AND
DIRECTOR OF LABOR & EMPLOYMENT LAW PROGRAMS, NEW YORK LAW
SCHOOL
Mr. Harris. Thank you, Madam Chair, Senator Burr, and
distinguished members of the committee, for inviting me to
discuss my nomination to be the Deputy Secretary of Labor.
Before we begin, I would like to join the Chair in paying a
special tribute to Chairman Kennedy. His presence is felt today
even though he is not participating in the hearing. I look
forward, if confirmed, to renewing a close working relationship
with him and working closely with all the members of the
committee.
Madam Chair, I am humbled to be sitting before you today.
My grandparents fled the Czar's tyranny and deadly anti-
semitism to seek opportunity in this country, the opportunity
to live the American dream. Through hard work, the support of
their communities, the power of their unions, and well-timed
assistance from their government, my grandparents built a life
in the new world that gave my parents a chance at a secure
place in the American middle class. They could not have
imagined that their sacrifices and struggles would 1 day allow
their grandson to stand at the threshold of high government
office.
I am a grandchild of immigrants and a child of the middle
class. My parents were public school teachers. My dad taught
and wrote about history. When he died, the headline of his
obituary read, ``Jonathan Harris, Fought Racism.'' I hope that
1 day my service can be summed up as simply and elegantly.
My mom was a school librarian, and today at the age of 85,
she still works in a public library near her home on Long
Island. She is still giving back to her community, and I am
very proud of her.
Every American child should have the same chances my
parents provided to my brother and me: a great education, a
secure home, reliable health care, strong values, a welcoming
community, and a family's loving support. And every American
parent should be able to provide for their families and leave
their children something more than they were given. My parents
did that for me. My wife Karen and I are doing our best for
Jonathan and Daniel.
But today, parents across America are wondering what they
will be able to leave to their children. Their homes are being
foreclosed. Their jobs are disappearing, along with their
health insurance. Decades of stagnant wages have left them with
debts they cannot repay. Retirement for themselves and college
for their children have moved out of reach. For too many of
these parents, for too many working Americans, the American
dream is slipping away.
If I am confirmed, Madam Chair, I will work hard every day
for these families. My simple goal will be to help the
President and the Secretary to serve those workers who are
struggling to secure their place and their children's place in
the middle class. I will dedicate myself to making that
American dream into a reality.
The President and Secretary Solis will define the Labor
Department's agenda. If confirmed, my role will be to implement
that agenda. I view the Deputy Secretary as the chief operating
officer of the Labor Department. And if I am confirmed, my job
will be to manage the Department to meet the Administration's
goals consistent with the President's and the Secretary's
commitment to open government, responsible stewardship of the
taxpayers' money, and broadly inclusive citizen engagement.
One important part of my job will be to assure a collegial
and cooperative relationship with the Department and the
members of this committee, and if I am confirmed, I will do my
best to lead by example.
I would like to briefly mention five priorities that I
would pursue as Deputy Secretary, and perhaps we will have a
chance to explore them more fully in my answers to your
questions.
First, if I am confirmed, I intend to continue the Labor
Department's longstanding commitment to strategic planning.
Second, if confirmed, I will bring a strong commitment to
accountability to the Department, accountability by clearly
defining performance goals and measures, but also by inviting
public examination. Open Government is not just a slogan or a
policy position. It is a powerful management tool.
Third, I believe the Labor Department must welcome working
people and other stakeholders into its decisionmaking
processes, as well as its programs. Americans should not need a
lobbyist to have their voices heard in the Labor Department.
This includes building constructive, problem-solving
relationships with the unions that represent the Labor
Department's employees.
Fourth, if confirmed, I will work with the Secretary, the
Office of Management and Budget, the members of this committee,
and the members of the Appropriations Committees to produce
departmental budgets that serve the Department's mission as
effectively and economically as possible.
And finally, if I am confirmed, I hope to help the
Secretary build a management structure and a working
environment that foster innovation, collaboration, creativity,
and problem-solving.
Madam Chair, thank you again for inviting me to testify
before the committee today and I look forward to the
committee's questions.
[The prepared statement of Mr. Harris follows:]
Prepared Statement of Seth Harris
Thank you, Madam Chair, Senator Enzi, and members of the committee
for inviting me to share my views about the Labor Department and the
role of the Deputy Secretary of Labor.
Before we begin, I would like to pay special tribute to Chairman
Kennedy. His presence is felt today even though he is not participating
in this hearing. I look forward, if confirmed, to renewing a close
working relationship with him and all of this committee's members.
Madam Chair, I am humbled to be sitting before you today. My
grandparents fled the Czar's tyranny and deadly anti-semitism to seek
opportunity in this country--the opportunity to live the American
Dream. Through hard work, the support of their communities, the power
of their unions, and well-timed assistance from their government, my
grandparents built a life in the New World that gave my parents a
chance at a secure place in the American middle class. These working
class Eastern European immigrants could not have imagined that their
sacrifices and struggles would one day allow their grandson to stand at
the threshold of high government office.
I am a grandchild of immigrants and a child of the middle class. My
parents were public school teachers. My Dad taught and wrote about
history. When he died, the headline of his obituary read, ``Jonathan
Harris, Fought Racism.'' I hope that, one day, my service can be summed
up as simply and elegantly. My Mom was a school librarian. Today, at
the age of 85 years, my Mom still works in a public library near her
home on Long Island. She is still giving back to her community, and I
am very proud of her.
Every American child should have the same chances my parents
provided to my brother and me: a great education, a secure home,
reliable health care, strong values, a welcoming community, and a
family's loving support. And every American parent should be able to
provide for their families and leave their children something more than
they were given. My parents did that for me. My wife Karen and I are
doing our best for our sons, Jonathan and Daniel.
But today, parents across America are wondering what they will be
able to leave to their children. Their homes are being foreclosed.
Their jobs are disappearing along with their health insurance. Decades
of stagnant wages have left them with debts they can't pay. Retirement
for themselves and college for their children have moved out of reach.
For too many of these parents, for too many working Americans, the
American Dream is slipping away.
If I am confirmed, Madam Chair, I will work hard every day for
these families. My simple goal will be to help the President and the
Secretary to serve those workers who are struggling to secure their
place and their children's place in the middle class. I will dedicate
myself to making that American Dream into a reality.
The President and Secretary Solis will define the Labor
Department's agenda. If confirmed, my role will be to implement that
agenda. I view the Deputy Secretary as the ``Chief Operating Officer''
of the Labor Department. If I am confirmed, my job will be to manage
the department to meet the Administration's goals consistent with the
President's and the Secretary's commitment to open government,
responsible stewardship of the taxpayer's money, and broadly inclusive
citizen engagement.
One important part of my job will be to assure a collegial and
cooperative relationship between the department and the members of this
committee. If I am confirmed, I will do my best to lead by example.
I would like to briefly highlight five priorities that I would
pursue as the Deputy Secretary.
First, if I am confirmed, I intend to continue the Labor
Department's longstanding commitment to strategic planning. I began
work in the Labor Department's Office of the Assistant Secretary for
Policy not long after the Government Performance and Results Act (GPRA)
was enacted in 1993. I also worked directly for Secretary Herman in
1997 when the department undertook an extensive strategic planning
effort pursuant to GPRA. I look forward, if confirmed, to re-engaging
in the Labor Department's GPRA strategic planning process, consulting
with this committee, other Members of Congress, and stakeholders, and
working under the Secretary's direction with the Secretary's management
team on the department's mission, performance goals, and performance
measures.
Second, if confirmed, I will bring a strong commitment to
accountability to the Deputy Secretary's office. Employers, pension and
welfare plans, and other entities regulated by the Labor Department
must be held accountable when they fail to comply with the law. The
department's grantees and contractors must meet their contractual and
other obligations. The Labor Department's staff and agencies, including
their highest ranking leaders, also must be held responsible for their
performance. This commitment to accountability is inextricably bound up
with clear defining performance goals and measures in the strategic
planning process and beyond. But I am convinced that another important
tool for holding the department accountable is to expose our
department's performance, as well as the behavior of the communities
regulated by the department, to public examination. Open government is
not just a slogan or a policy position. It is a powerful management
tool. If I am confirmed, I look forward to making it a regular part of
how the Labor Department does business.
Third, and building on the theme of open government, I believe the
Labor Department must welcome working people into its decisionmaking
processes as well as its programs. Americans shouldn't need a lobbyist
to have their voices heard in the Labor Department. And they should not
have to be part of a traditional stakeholder group before their
concerns are taken seriously. All of the department's stakeholders
should be welcomed, but I believe the Labor Department must do more to
reach out. Using new information technologies and an increasingly
diverse workforce with connections to American workers of every type,
the Labor Department should be the people's department.
Let me hasten to add that inclusive decisionmaking necessarily
involves building constructive, problem-solving relationships with the
unions that represent the Labor Department's employees. If I am
confirmed, I expect to play an important role in that process. I do not
mean that the answer to every union demand will be ``yes.'' But
answering ``no'' will not mean that collective bargaining has failed.
Like any human relationship, collective bargaining can be difficult on
occasion. Nonetheless, I consider collective bargaining to be a
necessary part of American democracy and I agree with the President
that unions are an essential bulwark of the middle class. If I am
confirmed to be the Labor Department's senior manager, I expect to live
that value, even when it is difficult.
Fourth, if confirmed, I will work with the Secretary, the Office of
Management and Budget, and the members of this committee and the
appropriations committees to produce departmental budgets that serve
the department's mission effectively and economically as possible.
Budgeting involves hard choices. The Labor Department must creatively
leverage its limited human and capital assets to achieve the best
possible outcomes for America's workers. But the department's resources
must match the department's mission. If we expect safer and healthier
workplaces, we must invest in OSHA compliance officers and build OSHA's
standards capacity. If we expect out-of-school youth, workers with
disabilities, and other disadvantaged workers to succeed in the labor
market over the long term, we must fund the basic skills training, job
training, and supportive services they need to succeed. If we expect
military servicemembers to transition into middle-class civilian jobs,
then we must assure they get credentials, transition assistance, and
placement services.
Finally, if I am confirmed, I hope to help the Secretary build a
management structure and working environment that foster innovation,
collaboration, creativity, and problem solving. We have not heard every
good idea. We have not yet generated solutions to every conundrum. And
we have not completed the list of every person who can contribute to
the department's success. Ultimately, there can be only one final
decisionmaker in the Labor Department and that is the Secretary of
Labor. But Labor Department staff at every level and from every region
can help the Secretary arrive at the best possible decision by
providing her with the fullest possible information and the broadest
range of ideas from which she can choose. It is management's task to
build processes that make that happen. It is a task that I view as
essential to moving the Labor Department into the future.
Madam Chair, thank you again for inviting me to testify before the
committee today. I look forward to your questions and the beginning of
a long lasting dialogue with this committee.
Senator Murray. Thank you very much, Mr. Harris.
We will turn to Ms. Smith. I understand you have some
family members as well in the audience, and if you would like
to begin by introducing them to us, we would appreciate it.
Ms. Smith. Thank you, Senator Murray. First I would like to
introduce my parents, Mary and Perry Smith. And then I have a
large extended family and only the lawyer contingent came. I
would like to introduce my sister, Kathleen Delatch, and my
niece Liz, both of whom are attorneys, and finally,
unsurprising to me, my cousin, Charles Smith, who says he is my
greatest fan and comes every time I come to Washington, is also
here.
Senator Murray. Well, we welcome all of you, and thank you
for being here.
STATEMENT OF M. PATRICIA SMITH OF ALBANY, NY, COMMISSIONER OF
LABOR, NEW YORK STATE LABOR DEPARTMENT
Ms. Smith. Thank you, Madam Chair, Senator Burr, and
distinguished members of this committee. I am honored to appear
before you today as you consider my nomination as the Solicitor
of Labor. I want to thank President Obama for nominating me and
Secretary Solis for recommending me. If confirmed, I look
forward to serving the American people and assisting the Labor
Department in improving the opportunities for America's working
families.
I have spent my entire career in public service. I spent 10
years at federally funded legal services programs. I then spent
20 years in the Labor Bureau of the New York Attorney General's
Office. I served at the pleasure of both Democratic and
Republican Attorneys General, and I represented commissioners
of Labor who were appointed by both Democratic and Republican
Governors.
At the Attorney General's Office, I represented the New
York State Labor Department in litigation, primarily involving
New York's little Davis-Bacon Act, Fair Labor Standards Act,
Public Employee Health and Safety Act, unemployment insurance
law, and Apprentice Training Program. I represented Governor
Pataki and the Health Department in matters involving ERISA
preemption before the U.S. Supreme Court.
During the 8 years I served as Chief of the Labor Bureau, I
opened many investigations and cases involving low-wage
workers. The Labor Bureau also prosecuted contractors who were
stealing taxpayer dollars on public construction projects by
falsely claiming to be paying the prevailing wage. I took those
cases because I believe that government must assist those who
are least able to assist themselves. I also wanted to assist
law-abiding employers who were at an economic disadvantage when
their competitors are not complying with minimum labor
standards.
Recognizing that employers are not always aware of all
their legal obligations, major enforcement initiatives were
paired with Office of Compliance training. And believing that
enforcement of the labor law should result in better jobs, not
fewer jobs, I worked with employers who did owe back wages to
enter into fair and reasonable payment plans.
For the last 2 years, I have had the privilege of serving
as New York's Commissioner of Labor. I brought my philosophy of
proactive enforcement, balanced with compliance assistance, to
that position. For example, we took proactive enforcement
actions in the car wash industry in New York where we found a
45 percent noncompliance rate statewide and 78 percent in New
York City. In the racetrack industry, we found a noncompliance
rate of 70 percent. In each of those cases, we followed up with
an invitation to every car wash and every horse trainer in New
York State to come to training sessions geared to their
industry.
As the head of the Mis-classified Worker Task Force, which
was the first of its kind in the country, I worked with other
State agencies to address the issue of employee
misclassification. In 18 months, we identified over $157
million in unreported payroll to over 12,000 New Yorkers.
I also worked creatively to find ways to train, retrain,
and attract a skilled workforce to meet the needs of New York
businesses. Our menu of business services was enhanced,
including providing technical assistance in new areas such as
layoff aversion and expanding existing areas.
I directed my business service staff to aggressively
promote labor market and talent pool information. This critical
information, along with information on grants and tax credits
and no-cost department services such as human resources and on-
site OSHA consultation programs, became vital to new and small
businesses in New York.
Our ongoing communication with the business community
helped us respond to the workforce needs of existing and
emerging firms in New York. We refocused our WIA-funded
programs on strategic industry clusters, and since the outset
of this economic crisis, I have aggressively promoted the
shared work program which averts layoffs by reducing the hours
of workers and allows them to collect some unemployment
insurance.
If confirmed, I will bring my experience working with both
the worker and the employer communities to the Solicitor's
Office. The work of that office is critical to the Department's
mission. The various agencies and departments within the Labor
Department cannot by themselves secure full compliance with the
law. They must have the full backing and the cooperation of the
attorneys in the Solicitor's Office to prosecute violations.
I believe that my combined experience as Commissioner of
Labor and as an Assistant Attorney General prepare me well to
serve as the Solicitor. If confirmed, I will do my best to
promote and support the President's and Secretary Solis'
agenda. As always, resources allocated to the mission of the
Department are an issue. Therefore, I believe we must work
harder and smarter with the resources that are already given to
us. And if confirmed as Solicitor, I intend to work much more
closely with the client agencies to make sure that the
resources given to the Department are leveraged to their most
efficient and their most strategic use.
My experience has taught me that when executive agencies
work together on common goals, that we can accomplish those
goals with fewer resources, and I hope to work with other
executive agencies.
And finally, during my tenure as Commissioner of Labor, I
had very good working relations with all the stakeholders and
the New York Legislature, including both sides of the aisle.
And if confirmed as Solicitor, I will endeavor to have the same
productive and cooperative relationship with all the
stakeholders who are impacted by the Solicitor's Office and
with the members of this committee.
Thank you.
[The prepared statement of Ms. Smith follows:]
Prepared Statement of M. Patricia Smith
Thank You Madam Chair, Senator Enzi and distinguished members of
the committee. It is an honor to appear before you today as you
consider my nomination to be Solicitor of Labor. I want to thank
President Barack H. Obama for nominating me and Secretary Hilda L.
Solis for the confidence she has shown in me by recommending me for the
position. I also want to thank my family members, especially my
parents, and friends who are here supporting me today. If confirmed, I
look forward to serving the American people and assisting the
Department of Labor in improving opportunities for America's working
families.
I have spent my entire career in public service. Upon graduation
from law school I spent 10 years at federally funded legal services
programs, in Connecticut and Indiana, representing low-wage individuals
primarily in employment and job training related areas. I then spent 20
years in the Labor Bureau of the New York Attorney General's Office,
serving at the pleasure of both Democratic and Republican Attorneys
General and representing Commissioners of Labor appointed by both
Democratic and Republican Governors. I served first as a supervisor,
then as the Deputy Bureau Chief and finally as Bureau Chief managing a
staff of approximately 30 attorneys.
At the Attorney General's Office I represented the New York State
Department of Labor in litigation primarily involving New York's little
Davis-Bacon Act, Fair Labor Standards Act, Public Health and Safety
Act, its Unemployment Insurance Law, and Apprentice Training Program. I
defended the Worker's Compensation Board in appeals from its decisions.
I represented Governor Pataki and the Health Department in matters
involving ERISA preemption before the U.S. Supreme Court.
During the 8 years that I served as Chief of the Labor Bureau I
represented the People of the State of New York, opening investigations
and bringing cases involving low-wage workers. These cases involved
delivery workers, wait staff, kitchen staff, retail clerks, street
vendors and bathroom attendants. Some of these employees worked long
hours with no overtime, others worked at wages far below the minimum
wage, others worked only for tips, and still others were not even
allowed to keep all their tips. The New York Labor Bureau also
prosecuted contractors who were stealing taxpayer dollars on public
construction projects by falsely claiming to have paid workers the
prevailing wage. We also worked with returning veterans, making sure
they received all the benefits they were entitled to under New York
Law.
I took these cases, involving some of New York's most vulnerable
workers, because I believe that government must assist those who are
least able to assist themselves. I also took these cases to assist law
abiding employers who are at an economic disadvantage when their
competitors do not comply with minimum labor standards. Over the years,
I have had employers ask me to investigate their industry for exactly
that reason. Recognizing that not all employers are aware of their
obligations under the law, all major enforcement initiatives were
paired with offers of compliance training. And, believing that
enforcement of the labor laws should result in better jobs, not fewer
jobs, I worked with employers who did owe money to their employees to
enter into fair and reasonable payment plans so that both they and
their employees could thrive going forward.
I believe that getting employers into compliance is the main goal
of labor law enforcement. I worked with employer groups and worker
groups to create an innovative ``Code of Conduct'' in New York's
Greengrocer industry where we had seen a zero compliance rate with the
minimum wage law. Employers who signed onto the Code agreed to come
into immediate compliance with the law and have their compliance
monitored by third parties. In turn, the Attorney General's office
agreed that so long as the employer was in compliance, it would not
investigate claims of prior wage underpayments. Over 200 Green Grocers
signed onto the code, and after 2 years the compliance rate was over 98
percent.
For the last 2\1/2\ years I have had the privilege of serving as
New York's Commissioner of Labor. In that capacity, I have managed a
staff of nearly 4,000 employees and a budget of $11 billion. I brought
my philosophy of proactive enforcement balanced with compliance
assistance to this position. For example, we took proactive enforcement
actions in the car wash industry where we found a noncompliance rate of
45 percent statewide and 78 percent in New York City. In the race track
industry, we found a noncompliance rate of 52 percent. In each case we
followed up with an invitation to each car wash and each horse trainer
in the State to come to training sessions around the State, tailored to
their industry. I am pleased to say that over 50 percent of those
employers took us up on that offer. I directed staff to change their
practice and focus their routine compliance assistance efforts on small
businesses, because I understand that they often don't have the use of
a Human Resources manager to assist them in navigating their legal
obligations. As the head of the Mis-classification Workers task force,
the first one of its kind in the country, I worked with other State
agencies to address the problems of employee workers misclassification
as independent contractors or working off the books and identified over
$157 million in unreported payroll to over 12,000 workers.
Along with my philosophy of proactive enforcement, as Labor
Commissioner I also worked creatively to help find ways to train,
retain and attract a skilled workforce that meets the needs of New
York's employers. I initiated this effort by establishing a new
Division in the Department, the Division of Employment and Workforce
Solutions, that brought together the formerly separate Wagner-Peyser
funded and Workforce Investment Act-funded staff. This merged and
streamlined Division enabled us to better align our workforce
development efforts with our business outreach activities. As a result,
our menu of business services was enhanced, including providing
technical assistance in new areas such as layoff aversion, and
expanding existing areas such as targeted recruitment for individual
businesses.
This first involved reshaping how traditional job fairs work and
replacing them with career exploration job fairs that offer training
and real job opportunities. I also directed my business services staff
throughout the State to aggressively promote vital services and
resources such as labor market and talent pool information to emerging
businesses. This critical information, along with information on grants
and tax credits and no-cost department services such as human resources
and on-site Occupational Safety and Health Administration (OSHA)
consultation programs, became vital to new and small business.
Our ongoing communication with the business community helped us to
better respond to the workforce needs of existing and emerging firms
across the State. We accomplished this by refocusing our WIA-funded
programs on strategic industry clusters in each region of the State and
by requiring the local Workforce Investment Boards (WIBs) to enter into
regional partnerships in order to access certain grant funds. We also
applied this strategic concept to our WIA-funded incumbent worker
training program, by giving priority to training that meets each
region's growth strategy. Lastly, since the onset of the economic
crisis and the need to help New York's employers, I aggressively
promoted the Shared Work program which averts layoffs by reducing the
hours of workers while also allowing them to collect unemployment
benefits. The promotion of this program resulted in over 890 companies
signing up since January of this year and thus saving over 15,000 jobs.
It also prompted Scott Hollander, Vice President of Latham
International, to say ``the Shared Work Program has helped us to save
millions of dollars by avoiding the costs that often arise with
turnover, hiring and lost productivity and it keeps people on the
payroll and working.'' All of these programs became especially
important as businesses struggle to remain competitive and weather the
economic storm.
With this wide range of improvement to the services the Department
provides employers, I also worked on increasing our efforts to detect
and prosecute Unemployment Insurance claimant fraud, in an effort to
make sure employers are not paying unnecessarily higher tax taxes.
Since early 2008, this enforcement effort resulted in over $17 million
returned to the unemployment insurance trust fund.
I am proud of my record thus far as Commissioner of Labor for New
York and if confirmed, I will bring this experience working with both
the employer and worker communities to the Solicitor's Office at the
Department of Labor. The work of the Solicitor's Office is critical to
the Department's mission. The various divisions and agencies within the
Department cannot, by themselves, secure full compliance with the many
important laws the Department is charged with enforcing. They must have
the full backing and cooperation of the attorneys in the Solicitor's
office to prosecute violators. The work of the Solicitor's office
touches every area of the Department of Labor. While I am not
knowledgeable in all the areas of law that the Department enforces, I
believe that my combined experience as Commissioner of Labor and as an
Assistant Attorney General has prepared me well to serve as Solicitor
of Labor. I look forward to returning to being a full-time attorney.
If confirmed, I will do my best to support the President's and
Secretary Solis's agenda. As always, resources allocated to the mission
of the Department are an issue. Therefore we must work harder and
smarter with the resources we do have. If confirmed as Solicitor, I
intend to work much more closely with the client agencies, Occupational
Safety and Health Administration (OSHA), Mine Safety and Health
Administration (MSHA), the Wage and Hour Division, Office of Federal
Contract Compliance Programs (OFCCP), and the Employment and Training
Administration (ETA), just to name a few, to assure that the resources
given to the Department are leveraged to their most efficient and
strategic use.
My experience in the last 2\1/2\ years as head of the Mis-
classified Workers Task Force and as Co-Chair of the Governors Economic
Security Sub Cabinet has taught me that when executive agencies work
together on common goals, results are accomplished with fewer
resources. I hope to work with other executive agencies, including the
Treasury Department on mis-classified worker issues and all the
agencies that have a role in enforcing the Davis-Bacon Act and the
Services Contract Act.
Finally, during my tenure as Commissioner of Labor, I maintained
very good working relations with members of the New York legislature on
both sides of the aisle. The Workers' Compensation Reform bill of 2007,
which I helped negotiate, was praised by both business and labor and
passed with broad bipartisan support. Last year the legislature passed
a State WARN Act, again with broad bipartisan support. If confirmed, I
will endeavor to have a similar cooperative and productive relationship
with all stakeholders impacted by the Solicitor's Office and with the
members of this committee.
Senator Murray. Thank you very much.
We will proceed to a round of questions of 5 minutes per
Senator.
I am going to start with you, Mr. Harris. Can you tell us
how you would describe the bulk of your responsibilities at the
Department if you are confirmed? Manager or policy advisor? I
am sort of asking if you are going to keep the trains on track
or if you are going to decide their destination.
Mr. Harris. My view is that the Deputy Secretary is the
chief operating officer, and the chief operating officer's job
is to make sure that the trains meet the schedule. The
Secretary and the President will define the schedule and the
direction of the trains, if I can beat that metaphor into the
ground.
In the process of serving in the role of chief operating
officer, I think it is unavoidable that there will be a process
of winnowing options for the Secretary and trying to provide
for her the best possible information. So I do not see myself
as entirely disengaged from that policy process, but the
Secretary will be the decisionmaker. My job will be to provide
her with the staff work that she needs and then to implement
her decisions after they are made.
Senator Murray. I have heard some concerns from the
Employment Security Department in my home State of Washington
about the H-2A rule change. They have told me that they have
concerns about having sufficient resources to implement the
proposed rule, and they have expressed some concern about which
rule to follow. Agriculture is very important in my home State
of Washington, and I would think this complex issue needs some
really serious thought.
Is the Department of Labor taking every necessary step to
review this rule to make sure that it balances the needs of all
of the stakeholders that are involved?
Mr. Harris. Well, Senator, I have not, as yet, played a
substantive role in the H-2A regulation, but my understanding
is that the process that the Secretary is going through, first,
to try to get to a quick decision on the question of whether or
not the rule is going to be suspended--and by the way, my
understanding is that that decision has not yet been finalized,
if it is going to be finalized at all. But to try to quickly
get to your question, to create some time so that she can
examine the rule and to assure that it strikes the balance that
you are describing, balancing the legitimate interests of
farmers that Senator Burr was talking about just a short while
ago and having enough workers to till and pick their crops, the
interest of American workers in having a shot at those jobs,
and the interest of H-2A nonimmigrant workers in having fair
pay and safe working conditions and good quality housing.
So my understanding is that those substantive decisions
have not been made and the Secretary's goal is to create the
time in which to make them involving the members of this
committee, involving all of the involved stakeholders,
listening to the growers and the farm workers in Senator Burr's
home State of North Carolina and your State of Washington.
So I expect that if I am confirmed, although I will not be
the one to write the rule and I will not be the one to decide
what goes into the rule, it will be my job to make sure that
all of those voices are heard in that process.
Senator Murray. I appreciate that answer very much.
Ms. Smith, if you are confirmed, what is going to be your
approach as Solicitor of Labor? How are you going to prioritize
your caseload?
Ms. Smith. Well, Senator, that is a decision that I want to
make in close consultation with the agencies who are the
individuals who actually bring the cases.
But I think that in the wage and hour area, one of the
things that we do have to do is look at repeat violators and
make sure that if you do have individuals who are repeat
violators, that the full force of the law is brought against
them. Those are individuals who we know are not violating the
law out of ignorance since they have been in violation of the
law before.
I think that one of the other things that we really need to
do is make sure that--I mean, as you know, the Solicitor's
Office has 400 lawyers across the country in regional offices,
and I think we really need to make sure that we have
consistency of priorities around the country so that you get
the same service from the Solicitor's Office in San Francisco
as you do in Maine.
Senator Murray. I understand that you undertook some pretty
interesting enforcement efforts in New York with regard to an
industry that had very low compliance with the law, Green
Grocers, and through a combination of compliance assistance and
enforcement and outreach, you really turned that industry
around and it now has a very high compliance rate, it is my
understanding. Can you share with us exactly what you did
there?
Ms. Smith. Well, after a number of years of bringing
enforcement actions in the Green Grocer industry in New York
City, which we had found had almost a zero compliance rate, we
sat down with representatives of the industry, representatives
of workers, and we drew up what we called the Green Grocer Code
of Conduct. If Green Grocers signed onto that code of conduct
and they agreed to come into immediate compliance with the law
and they agreed to independent monitoring, that we at the
Attorney General's Office would agree that we would not pursue
claims against them for back wages that may have been owed. In
New York City, we had over 200 Green Grocers sign onto that
code of conduct. It was on for 2 years. Every single one of
them was monitored, and by the end of that 2-year period, there
was a 98 percent compliance rate in that industry.
Senator Murray. Does that sort of exemplify your approach
to how you are going to do your job?
Ms. Smith. The Green Grocer Code of Conduct is one of the
ways that I would look at doing my job. It really does require
very specific circumstances to work. That is my experience. I
have not quite been able to replicate that in New York,
although we have had discussions. If I could replicate those
circumstances, I am always open and willing to look into those
type of agreements, yes.
Senator Murray. Thank you.
Senator Burr.
Senator Burr. Let me thank both of you for being here, more
importantly, for your families. Mr. Harris, I hope there is a
strong genetic transfer trait in your family. Looking at your
mother, you have got something to look forward to.
Just to clarify I think something that Senator Murray
raised, OMB put on their Web site last night that they had
concluded review of the DOL rule. Now, that does not mean that
the conclusion of that rule will be printed in the Federal
Register today, but it clearly states that they had concluded
their review of the DOL rule--final rule on H-2A--yesterday. So
I am not exactly sure how much consideration of stakeholders
has gone into the development of the rule or to the review of
the rule, but clearly, those empowered with moving the process
forward determined that should happen.
Let me ask you, Mr. Harris, if I can, because you are not
new to the Department of Labor. What is the standard time for
public comment of rulemaking?
Mr. Harris. Well, Senator, let me just say I am afraid it
is an indication of how little I have been involved in the H-2A
rule that I did not know that OMB had put that announcement on
its Web site last night, and I apologize. I simply did not know
that.
My understanding is that the Administrative Procedure Act
expects a comment period of somewhere between 60 and 90 days. I
usually turn to my lawyer for advice on that kind of a
question. But that is, I think in part, designed for
complicated, substantive rules that go into great detail in
implementing a program. The rule that was proposed in this case
was a rule that simply dealt with the question of whether or
not to suspend the existing H-2A regulation. As I understand
it, the regulation that, as you just said, was approved by OMB
or was decided about by OMB last night does not address any of
the detailed substantive questions that one would have to
address in the H-2A program. So a shorter timeframe might have
been appropriate in that case, but the typical time period, as
I understand it, is somewhere between 60 and 90 days.
Senator Burr. And one would assume that when an affected
population like farmers who are currently in the fields
preparing and getting ready for the growing season, 10 days
would not be sufficient for that community to respond. But yet,
there were over 1,000 requests to the Department's proposed
rule.
Now, you are the one in your testimony that said you are
basically the chief operating officer. If you are confirmed,
and you are faced with a decision as to whether to carry out
this ruling and you perceive that it has not been according to
what the statute says for rulemaking, what are you going to do?
Mr. Harris. Well, I would not be the one to decide. The
Secretary would be the one to decide. My expectation is that,
as in this case, she would turn to the staff in the Employment
and Training Administration, to her Solicitor of Labor, to the
career staff in the Solicitor's Office for advice about what is
appropriate and what is not appropriate. My job would be to
marshal those opinions to provide her with a reasonable set of
options, a set of options that we collectively agreed were a
set of reasonable options, and then she would make a decision
based on those recommendations.
I would expect there to be some back-and-forth, but I would
not be the only one engaged in that back-and-forth. The
incoming Assistant Secretary for Employment and Training would
be in that discussion. Commissioner Smith, if she is confirmed,
would be in that discussion. It would be a collaborative effort
in trying to advise the Secretary in the best way to move
forward.
Senator Burr. Do you find it difficult to understand why
DOL would change a rule right in the middle of the season?
Mr. Harris. Well, my hope would be that we would try in our
rulemaking process not to disrupt any industry in any
rulemaking process. However, it is a necessary consequence if
you are going to reconsider a regulation that was promulgated
just before the President's inauguration that there may be some
upset in that industry.
But let me say I view one of my roles as the chief
operating officer of the Department, if I am confirmed, to be
to assure that the members of this committee, all the Members
of Congress, and perhaps more importantly, their constituents
have a full voice in this process and have the full
opportunity, when the substantive regulation is considered, if
one is in fact considered in this case, that their voices are
heard.
Senator Burr. Do you feel that 10 days was sufficient in
this case?
Mr. Harris. Well, again, in that case it was not the
substantive rule. It was just the question of suspension.
But as I understand it--I do not want to take up too much
of your time, Senator--but as I understand it----
Senator Burr. I have got all day.
[Laughter.]
Mr. Harris. And I am happy to stay.
As I understand it, the suspension contemplates that if
there is a reconsideration of the rule, there will be, I think,
a 9-month period to get to final regulation on that substantive
rule. And in that process, you have my commitment, Senator--and
I know that this is a concern of yours and it is one that I am
going to be sensitive to. You have my commitment that you and
your constituents, the farmers that are so important to the
economy of your State, are going to be heard in this process,
the process of arriving at a substantive rule.
Senator Burr. And I appreciate that. I realize my time has
run out, and I will wait for the second round.
But let me just say that the one thing that I think
government has a responsibility to provide is predictability,
and today we have farmers across this country, regardless of
what State they are in, who do not know what rules they are
following. They have a workforce that they have contracted to
bring in that is now in question, due to the suspension of this
rule. Arguments that the Secretary made about funding,
hopefully, I have dismissed with the statement of amount of
funding we have delivered in the stimulus package. But you said
budgetary planning was a mission of yours.
The Secretary extended to 90 days the requirement for
farmers to actually advertise the availability of a job to
American workers. That is the same 90 days that were required
in the old rule. So it is not like we have enhanced the
requirement up front to farmers to do that. It is just if this
were suspended, that 90 days would go into the growing season
which then puts in jeopardy one's ability to bring in that
workforce in a timely fashion.
But I will get to some other questions as we move to the
next round.
Senator Murray. And we will allow you to do that.
Senator Merkley.
Senator Merkley. Thank you very much, Madam Chair.
Mr. Harris, in your testimony you describe, and I quote,
``the American dream is slipping away.'' As you kind of step
back and watch the last couple decades, why is the American
dream slipping away?
Mr. Harris. Well, I am afraid that is a complicated
question, and I will do my best. But there are better policy
minds, I think, than mine to get to that question.
We have seen for decades now stagnant wages for middle
class workers, particularly for men. We have seen a
reconfiguration of our economy that has taken a lot of
traditional middle class jobs and either shipped them overseas
or, through technological change, they have just disappeared.
We have seen rising consumer debt loads. We have seen families
throwing additional members into the workplace. We have more
two-working-parent families than we did, say, 30 or 35 years
ago. Families are struggling. Families are struggling.
And I know that this is a grave concern of both the
President and the Secretary, and it is going to take a
multifaceted approach to address those questions, particularly
given the historic recession that we are now experiencing in
our country where simply getting back to where we were, which
was a circumstance where working families were not doing so
well, is going to be a significant struggle and require
substantial investment in recovery efforts. We are beginning to
see some glimmers of hope, although not in the labor market
right now.
So I know the Secretary is very tightly focused on this
question. It is something that she thinks about every day. I
know the President, as you know, is very tightly focused on it,
and I am looking forward to working with them.
Senator Merkley. Thank you, Mr. Harris.
One of the things that has been brought to our attention
time and time again is that in the past, as productivity
increased, the wages of working Americans increased. There has
been a huge split in that with productivity continuing to
increase at a significant rate, but many of the gains are
really going to greater disparity with, as you point out,
stagnant wages.
What are the ways that the Department of Labor can help
undertake restoring prosperity for the middle class?
Mr. Harris. Well, I agree with you, Senator, that there has
been rising wage inequality in our country. The workers'
bargaining position in the labor market has gotten weaker. The
Secretary has talked about this. The President has talked
about, for example, that if we talk about having a strong
middle class, one necessary component of that is having a
strong labor movement.
The Labor Department's role is to--there are many roles
that the Labor Department can play. One is to help to assure
that workers have the skills and the opportunities to get
middle class jobs. Senator Murray has certainly played a
critically important leadership role, along with Senator Enzi,
on workforce development issues. And I know we are looking
forward to the discussion about Workforce Investment Act
reauthorization in that regard.
The Labor Department assures that workers have secure
retirements and get the pensions that they are promised. They
make sure that workers' wages are not cut because of overtime,
that workers are not discriminated against on the basis of race
or sex. I think the Labor Department has a critical role to
assuring that workers get the place that they are entitled to
in the American middle class. And my job will be not so much to
set the agenda to make sure that that happens, but to implement
it to make sure that it happens.
Senator Merkley. Mr. Harris, I want to thank you for your
testimony and for your commitment to, as you put it, working
hard every day for working families. We certainly have a lot of
work ahead of us.
I want to turn, Ms. Smith, and applaud you on your work in
the Green Grocer area. I never could envision really an
industry that had a zero compliance rate with minimum wage laws
described in your testimony. The fact that you were able to go
from 0 compliance to 98 compliance is a phenomenal
accomplishment.
How did you fare in these other areas that you had
mentioned, in the car wash industry and did you say horse
racing industry?
Ms. Smith. The horse racing industry. That is right,
Senator.
We just conducted those investigations last summer. So we
have not done our re-investigations yet. But I am pleased that
when we did invite all the car washes in the State of New York
and all the horse trainers to come into our training sessions
afterwards, we had about 33 to 40 percent of the employers in
those industries come in to our compliance assistance training
sessions. So I am hoping that when we go back next summer and
do a revisit to these individuals, we will see a much higher
compliance rate.
Senator Merkley. Great. For those who do not come in and
work with your compliance program, then do you pursue
investigations of failure to pay overtime, failure----
Ms. Smith. Well, Senator, I would not make any assumptions
about individuals who did not come into the compliance training
sessions because there may well be individuals out there who do
not need to come into it. They are very well aware of their
obligations under the law. We did find that there was a 45
percent noncompliance rate. That means that 55 percent of the
car washes were in compliance. So we will continue to pursue
investigations and re-investigations, but I would never presume
that because someone did not come into a compliance training
session, that meant they were in violation of the law.
Senator Merkley. Let me put the question a little
differently, and I will just wrap up with this, Madam Chair.
On the one hand, you are saying work with us. Come into
compliance. And you are really reaching out in a very positive
fashion. But for folks within the industry who say, you know
what, I am not paying the minimum wage or I am not paying
overtime and I am not changing, do you then investigate and
pursue----
Ms. Smith. Oh, absolutely. We would investigate and pursue,
and at least in New York, we would be imposing additional
penalties on those individuals because since they did not come
in and take advantage of our compliance offers and because they
continue to be in violation of the law, we would impose willful
penalties on those employers. And if they continued not to come
into compliance with the law, I, which I have in the past,
would recommend criminal prosecution of those employers.
Senator Merkley. Well, thank you very much to both of you
for your presentations and for your work on behalf of working
Americans.
Senator Murray. Thank you very much, Senator Merkley.
Ms. Smith, let me go back to you again. This committee has
had a number of hearings about workplace accidents in the
aftermath of tragedies. One of the things that has really
become apparent is that families of victims have very little
say in OSHA's and MSHA's compliance decisions. And I wanted to
ask you if you believe that OSHA and regional solicitors should
consult more closely with the victims' families or injured
workers when they are assessing penalties.
Ms. Smith. Thank you, Senator. Yes, I do believe that they
should consult more closely with the victims' families. I also
believe in the wage and hour that victims, those underpaid
workers, should be consulted when there are enforcement actions
taken. I believe in a much more open and inclusive process of
investigation, not that the victims' families or the victims
themselves can dictate the decisions, but I definitely believe
that their wishes and their perspectives have to be taken into
consideration to make it meaningful enforcement.
Senator Murray. I appreciate that. One of the things we
have learned is often the victims' families know information
that they are never asked about, and I would think that
information is very important to reaching conclusions. So I
appreciate that response.
Mr. Harris, I wanted to ask you, as the Department's top
manager, what will you do to help build a culture of innovation
and creativity? I think I have heard from a lot of people
within the Department that there is an employee morale problem.
I wondered what you are going to do to address that.
Mr. Harris. I think that the essence of creating that kind
of environment is allowing the employees of the Department at
every level in every region to understand that their voices are
going to be heard, their views are important. Frequently they
have information that is critical to the Secretary's
decisionmaking and the decisionmaking of the Assistant
Secretaries in their agencies.
The idea that I have perfect information, as I walk through
the door, if I am confirmed, is just fallacious on its face. I
do not expect that I am going to know everything at any stage,
regardless of how long I were to stay as the Deputy Secretary.
I am going to rely very heavily on the Assistant Secretaries,
the career managers, and working with the Department's unions,
and the front line employees of the Department to learn what we
can.
There are going to be a lot of terrific ideas, and our
challenge, using information technology, using the collective
bargaining process, and just an open process with the unions is
going to be to gather that information in a usable format. I
mean, the Department does have more than 16,000 employees. So
that could be a cacophony. We have to find a way to get it into
a usable format so that it is employable in our decisionmaking
processes at the relevant time.
It is going to be a challenge, and I look forward to
working with the Secretary who I know is deeply concerned about
this question and with the other stakeholders inside the
Department to make that a reality.
Senator Murray. Well, communication within the Department
is really important, fostering that. It is also important here
in Congress. During the last Administration, it was
challenging, to say the least, for us to get access to
evaluations or reports on the Workforce Investment Act
programs.
Given your commitment to enforce open government and
accountability at DOL, will you make access to evaluations and
studies a priority across the Department?
Mr. Harris. Absolutely, yes.
Senator Murray. And we will take you up on that.
Senator Burr, do you have any additional questions?
Senator Burr. Yes, ma'am.
Mr. Harris, you are currently in a consulting role with the
Department of Labor. Correct?
Mr. Harris. I am.
Senator Burr. Were you consulted on this decision on H-2A?
Mr. Harris. I did not play a substantive role, Senator. I
think I exchanged a couple of e-mails and participated in one
or two early staff meetings on this subject. I think the e-
mails I exchanged were simply about assuring that we had done
the requisite congressional outreach and contact with the press
on the subject. So I did not play a substantive role, no.
Senator Burr. Did you get an affirmative answer on did they
do appropriate outreach?
Mr. Harris. I do not recall that I got any answer, Senator.
Senator Burr. Let me propose or suggest that this possibly
could be litigated. It has not been to this point. But I asked
my staff to go through and find possible places of violation of
law. They include the Administrative Procedure Act,
specifically the 10-day comment period. Retroactive rulemaking
because contracts are currently in place that would be affected
by the change in the rule. The Fair Labor Standards Act because
the original rule designates Christmas tree farmers were
agricultural rather than forestry; therefore, they are exempt
from overtime requirements. The regulatory Flexibility Act. As
part of the rulemaking, DOL failed to include the required
analysis to provide the public with an opportunity to comment
on the analysis and failed to include a final analysis when
publishing the Solis suspension final rule. Unfunded Mandates
Reform Act. The Executive Order 12866, the regulatory planning
and review. Executive Order 13132, federalism. The Executive
Order 13175, consultation and coordination with Indian tribal
governments. DOL failed to include the required tribal summary
impact statements in the Solis suspension final rule. Section
654 of the Treasury and General Accounting Appropriations Act
of 1999. Executive Order 12630, 12988, and 13211. In all cases,
DOL failed to include the evaluations sufficient to issue a
final rule.
Now, I would only ask both of you, have I identified things
that you think are serious if they were in violation?
Ms. Smith. Senator, I will answer that. I want to preface
it by saying that I, obviously, am not knowledgeable about the
H-2A rule suspension. My staff, as the Commissioner of Labor,
did not even mention it to me.
Senator Burr. And trust me. I am not trying to play
``gotcha.'' I am just asking----
Ms. Smith. No. I understand.
Senator Burr [continuing]. Are these serious if they were
violations?
Ms. Smith. I am sure that there are violations there. You
have mentioned at least a number of things that would be
serious, yes.
Senator Burr. Mr. Harris, would you agree?
Mr. Harris. I would rely on my lawyer for answer to that
question.
[Laughter.]
Or the Secretary's lawyer, I should say.
The only thing I would add is that the Solicitor's Office
was involved in this decisionmaking process, and I cannot say
the extent to which they analyzed the specific questions that
you raised. But they were involved in the process, and it would
be their responsibility to offer legal advice to the Secretary
on whether or not the Department, in proposing a suspension of
the rule, was in compliance with all those requirements you
listed.
Senator Burr. So if a court reversed this decision, would
you see that as a failure of the Department of Labor to fully
vet the law and how they proposed rulemakings?
Mr. Harris. Well, I would want to know why it was the court
disagreed with the decision, and I would want to take a close
look at that. And if Commissioner Smith is confirmed, I would
want to have a long talk with her about what it was that
happened.
As you noted early on in your opening statement, the
existing H-2A regulation is the subject of litigation as well.
This is an area of sensitivity among stakeholders of all types.
And so I do not think I would be surprised if any further
action in this area were the subject of litigation, but as the
chief operating officer, I would want to have a discussion with
the Solicitor and the Employment and Training Administration
staff about the processes they used to arrive at the
conclusions they reached.
Senator Burr. There is one thing that I think we all three
will agree on. Court involvement does not grow the food we need
in this country, and any confusion will, in fact, impact the
prices.
If the Chair would allow me to ask three more questions, I
would be done at this hearing.
Ms. Smith, Wage Watch was something that either you created
or created while you were there. Can you share with me how that
idea was hatched and how it was developed?
Ms. Smith. Yes, Senator. My experience in New York is that
we really do have a crisis about workers not getting what they
are entitled to under the law in minimum wage or overtime. Wage
Watch was basically modeled on Neighborhood Watch, which we
examined and appears to be a very successful crime-fighting
program, especially in New York. Just like the purpose of
Neighborhood Watch is to get the public involved, that is the
purpose of Wage Watch. I was concerned on two levels.
The first was that I do not think that the concept of
workers not getting the minimum wage and overtime is really as
prevalent in the public's consciousness as it should be. I know
when I go into a restaurant and I leave a tip, it goes through
my mind, I hope this worker is actually getting this tip that I
am leaving. But I do not know that that is true for the general
public. So I wanted to raise the consciousness of the general
public to this possible problem.
The second thing is that we have limited resources in New
York as we do everywhere in government. And I am very committed
to the concept of education, both employer education and worker
education. So the substance of Wage Watch's purpose is to
engage groups to help us with education. So we have a pilot
program which we have just begun. We have six groups which were
picked on the basis of our prior experience with them, so I
knew they were reliable and sensible groups. We developed
training. We developed an agreement, and they have agreed to do
educational events both for workers and employers.
Senator Burr. But you reached out to individuals and groups
to help craft the specifics of----
Ms. Smith. Actually, no, Senator, we did not. This was an
internally crafted group. It was only after we sat down and
crafted it ourselves that we reached out to groups to see if
they would be interested.
Senator Burr. Have you had any discussions relative to your
being at the Department of Labor that would extend Wage Watch
in any fashion on a Federal level?
Ms. Smith. No, we have not had any discussions of that. I
have not had any discussions with the Department of Labor in
New York about whether we would extend it across New York
State.
Again, it is a pilot program which we just did in January.
We specifically limited it to a small number of groups, and we
limited it to a small geographic area. We limited it to
basically New York City, Long Island, the lower Hudson Valley
so that we could assess what the successes would be, what the
problems would be. I am happy to report that after what--since
January, we have had no complaints about that program.
Senator Burr. Well, if Senator Schumer were still here and
heard you describe that portion of New York as a small area--he
thinks that is 90 percent of the world.
[Laughter.]
So I am sure he might disagree with your statement.
Ms. Smith. I cannot speak for Senator Schumer.
Senator Burr. Nobody can.
[Laughter.]
I want to thank both of you for your indulgence of my
questions and the fact that there were areas that we need to
get into that deal with issues that you have not been involved
in. But, hopefully, I have stressed with both of you that these
are complicated issues that affect real people across the
country. They are not Republicans or Democrats. These are
individuals that are trying to maintain their livelihood. It
requires planning. They have to make commitments, and sometimes
government is blind to the expenses that we inadvertently put
on the system.
At the end of the day, it is the consumers of this country
and around the world of agricultural products that will feel
the unintended consequences of quick decisions, decisions that
potentially went outside the framework of what we have built
into the system to assure us of the transparency that you
talked about earlier, Mr. Harris, the accountability that you
talked about, the ability for strategic planning that you
talked about, the accuracy of the budget, and more importantly,
the third point that you said. We welcome stakeholders.
You know, everything else may have worked technically to
the letter of the law, but nobody will convince me that in this
process, we welcomed the stakeholders to the table. I can
question pretty thoroughly whether it was even attempted to
review the thousand stakeholder comments that were made because
had they been reviewed, I do not think we would quite be on the
accelerated path that we are, having OMB already completed
their review. And we will watch anxiously to see if they find
fault with the process up to this point.
Madam Chairman, I hope you will pass on to Chairman Kennedy
that I hope we expedite these confirmations as quickly as we
can. Again, I thank you.
Senator Murray. Well, thank you very much, Senator Burr,
and I will pass that on. I do hope we can move these
expeditiously as well.
And I want to thank both of our witnesses for being here
today and participating in this important hearing.
I want all members to know that they can submit additional
questions to you, and we will probably do so for a written
response. But I would encourage all of our members to do so
before the end of the day tomorrow so we can move this process
quickly and move these nominations forward.
For members who want to submit their statements for the
record, the hearing record will be open for 7 days.
So, again, thank you to both of you for coming today, for
your willingness to take on these incredibly important jobs.
And, Mr. Harris, your two sons did a marvelous job sitting
still behind you today.
[Laughter.]
I hope they are going to get to do something fun when we
adjourn this hearing. Thank you very much.
[Additional material follows.]
ADDITIONAL MATERIAL
Prepared Statement of Senator Enzi
I'd like to begin by thanking Senator Murray for holding
this hearing today. Confirmation hearings for Presidential
nominees are one of this authorizing committee's most important
functions. Earlier this year, the Senate has confirmed two
nominees who came before the HELP committee: Education
Secretary Arne Duncan and Labor Secretary Hilda Solis. Last
week, the committee took up and the Senate confirmed an
additional eight labor and education nominees. We have made
significant progress on nominations.
Today, the committee conducts its Constitutional duty of
``Advice and Consent'' on two senior positions at the Labor
Department: the Deputy Secretary and Solicitor, the two most
senior deputies to the Secretary. These positions carry
significant responsibility within the Department, as well as to
workers, businesses and retirees, to name just a few
stakeholder groups. It is important that during this hearing we
obtain an understanding of their management experience in
preparation for these roles and their approach to the cross
section of issues that fall under the Department's
jurisdiction.
Both Seth Harris and Patricia Smith have impressive
academic credentials and are accomplished professionally in
their own right. I commend them for their previous public
service and willingness to go through the process of Senate
confirmation.
Today, I want to learn more about how they would approach
the respective positions to which they have been nominated. I
have reviewed each of these nominees' previous records of
public service, and have already had a chance to ask Mr. Harris
questions for the record. Based upon what I have learned about
these two nominees so far, I am a bit concerned about the
direction the Obama Department of Labor will take. While I
fully recognize that I may take the philosophical opposite
perspective from our nominees, I truly hope that they do not
bring to the table an approach that creates an adversarial role
against small businesses and all businesses in general. In this
current economic environment, all employers, particularly small
business, are struggling. In the last 5 months 3.3 million jobs
have been lost, and 663,000 jobs were lost in the month of
March alone. The unemployment rate currently stands at 8.5
percent, and in many States it exceeds 10 percent. The Bureau
of Labor Statistics has reported that job losses are large and
wide spread across major industry sectors. As my colleagues
probably know, tomorrow we will receive an update from Bureau
of Labor Statistics on the employment situation for the month
of April.
I am particularly interested in your thoughts on whether it
is part of the Department's mission to assist businesses in
understanding and complying with Federal regulations--as well
as your views on penalties and enforcement. President Clinton
signed into the law the Small Business Regulatory Enforcement
Fairness Act to help small businesses comply with Federal laws.
I would hope that both nominees would voice their strong
support for maintaining and strengthening this law to help
small businesses comply rather than use the overly heavy hand
of enforcement procedures. Because I have reviewed your
records, I will have some specific questions for each of you
related to your background, as well as additional questions for
the record.
I have particular questions and concerns with the so-called
``Wage Watch'' program in the State of New York and the use of
community and labor groups to enforce State labor laws. Since
both of the nominees are from New York, I want to know your
views as to whether this program is a suitable model for the
Federal Government.
I would also like to hear more from the nominees about
their approach to regulating and their view on the role
stakeholders play in that process. Would stakeholders describe
your management style as inclusive and one that seeks input
before judgment, or one that instead limits the discussion
process? Especially given our current economic situation,
stakeholder input from people who actually meet a payroll is
essential for everyone at all levels of government. After all,
the first rule of public service should be to ``do no harm.''
These are just a few of the areas I intend to touch on today.
In closing, I would like to again thank Senator Murray for
holding this hearing today.
Response to Questions of Senator Enzi by M. Patricia Smith
Question 1. It is my understanding that as Labor Commissioner in
New York in 2007 you determined that any construction projects
undertaken by charter schools in New York were subject to New York's
prevailing wage law. It is also my understanding that prior to your
decision, charter school construction projects had been treated as
exempt from the State's prevailing wage law. What facts or legal
opinions led you to reverse the treatment of these construction
projects? Did you discuss this matter with any labor unions or their
representatives, and, if so, what were the circumstances surrounding
those discussions?
Answer 1. In New York, administrative agencies are free to overrule
or modify prior determinations so long as they sufficiently explain the
different result. In August 2007, the Department of Labor concluded
that charter school projects were subject to New York's prevailing wage
law. The change brought the Department's position in line with a formal
opinion issued on the matter by Attorney General Spitzer, 2000 Ops.
Att. Gen. No. 2000-F3. The 2007 opinion letter concluded that charter
schools meet both conditions of the test for application of the
prevailing wage law first expounded by the New York Court of Appeals in
Matter of Erie County Industrial Development Agency. Roberts, 94 A.D.
2d 532 (4th Dept 1983) aff 'd 63 N.Y. 2d 810 (1984). It further relied
upon a recent amendment to the prevailing wage law, known as the third
party bill. The change from the prior position resulted from my
conclusion that the prior position was a misapplication of the law. I
also wanted to avoid confusion and clarify the matter for the public
and the courts by reestablishing consistency between the positions of
the Department, the agency charged with enforcement of the prevailing
wage law, and the Attorney General's Office, which represents the
Department in litigation. On September 10, 2007, I wrote the Charter
Schools Institute, the New York State Education Department, and other
interested members of the public to advise them of the Department's new
position and its prospective application. I have attached both the
opinion and the notification letter.
The opinion was written after receiving a formal request for an
opinion from the Painters Union. I never discussed the matter with any
labor union or union representative prior to issuing the opinion.
Question 2. Do you believe that charter schools that receive
Federal funding for any purpose are subject to the Federal Davis-Bacon
law with regard to any construction projects they undertake? If
confirmed as Solicitor, would you seek to extend Davis-Bacon
requirements to charter school construction projects?
Answer 2. My opinion on the applicability of the New York
Prevailing Wage Law was based solely on my analysis of New York's law.
My understanding is that the Davis-Bacon Act and the approximately 60
Davis-Bacon related acts have very different applicability provisions.
The applicability of the prevailing wage requirements in any of the
Davis-Bacon or related acts would depend upon the language in those
statutes. If confirmed as Solicitor, and if the issue of the
applicability of Davis-Bacon to charter schools arose, I would have to
examine the language of relevant statutes in order to make such a
determination.
Question 3. It is my understanding that as Commissioner of Labor
you created and approved a pilot program called ``Wage Watch'' that was
designed to ``extend the reach of labor law awareness and enforcement
into the community'' and ``find cases that might not otherwise come to
the Department's attention.'' To implement this program your office
engaged ``community'' and other groups to participate in increased
education and reporting efforts. Among other things, participating
groups were to ``conduct outreach to the public about labor laws'' by
``handing out [official NY Department of Labor] brochures'' in places
where the public gathers, such as ``supermarkets''; obtain information
regarding potential labor law violations; and, fill out complaint forms
regarding potential labor law violations.
What groups did your Department enter into these agreements with?
Answer 3. Make the Road New York; Centro del Inmigrante; UFCW Local
1500; the Workplace Project; Retail Wholesale Department Store Union;
and the Chinese Staff and Workers Association.
Question 4. With respect to each group listed in your response to
Question 3, please set forth the date or dates on which you had any
written or oral communications, discussions or meetings with each group
and/or any group representatives regarding the creation, development or
implementation of the Wage Watch program, the names of all persons
involved in such communications, meetings or discussions, and the
substantive content of all such communications, meetings or
discussions. Please forward to the committee any notes, memoranda,
correspondence of any kind and any written materials related in any way
to any such communications, meetings or discussions and a copy of any
written communications.
Answer 4. There was one meeting, on November 4, 2008, with many
members of my staff including Terri Gerstein, Deputy Commissioner for
Wage, Protection; Colleen Gardner, Special Assistant to the
Commissioner; Lorelei Boylan, Director of Strategic Enforcement and
Geovanny Trivino. Members from the groups listed above included Jeff
Eickler from the RWDSU and Amy Carroll and Deborah Axt from Make the
Road New York. There may have been other people from the RWDSU in
attendance as well. I attended for about 15 minutes. My staff had done
considerable work researching Neighborhood Watch and developing the
concept of this initiative and felt it was time to present the
Department's ideas for what is now known as Wage and Hour Watch, to
gauge the possible interest of these two groups with whom we had worked
and to get feedback. I have no written notes from the meeting. I was
cc'd on a few e-mails which I am not able to include as I do not have
the individual authority to release them. The e-mails are not mine but
are the property of the State of New York. Committee members may
request access to the e-mails by contacting the Governor's Counsel's
Office in Albany. I have reviewed the e-mails and they discuss the need
for objective criteria for choosing pilot participants, the need for
and content of training for participants, the need for a written
agreement, and the possible name for the pilot. I may have spoken to
members of the other groups listed in response to Question 3 at the
press event announcing Wage and Hour Watch on January 26, 2009 but
there were no substantive discussions.
Question 5. In addition to the groups referred to in your response
to Question 3, and their representatives, please set forth the names of
any other groups and/or persons, including but not limited to other
local, State and Federal Government officials, that you had any written
or oral communications, discussions or meetings with regarding the
creation, development or implementation of the Wage Watch program; the
date or dates of such communications, discussions and/or meetings, and
a summary of the substantive content of all such communications,
meetings or discussions. Please forward to the committee any notes,
memoranda, correspondence of any kind and any written materials related
in any way to any such communications, meetings or discussions and a
copy of any written communications.
Answer 5. At the November 4 meeting Raj Nayak from the National
Employment Law Project attended and he was also on some of the e-mails
discussed above. Starting in the summer of 2008 until the present I
have discussed the Wage and Hour Watch pilot on dozens of occasions
with members of my staff including, but not limited to, Mario Musolino,
Executive Deputy Commissioner, Terri Gerstein, Deputy Commissioner for
Wage Protection, Carmine Ruberto, Director of the Division of Labor
Standards, Lorelei Boylan, Director of Strategic Enforcement, Colleen
Gardner, Special Assistant to the Commissioner and Maria Colavito,
Counsel.
I have no written notes from the conversations nor can I pinpoint
the exact dates. The conversations occurred in the course of daily
business and my calendar does not show any staff meeting specifically
devoted to Wage and Hour Watch. The purpose of the conversations was to
discuss the concept and the scope of the initiative, to determine the
geographic area the pilot would be conducted in, and to select groups
for possible participation. Also discussed was the content of the
required training.
I was copied on a few e-mails that discussed the need for a written
agreement and the content of a written agreement. I am not able to
include them as I do not have the individual authority to release them.
The e-mails are not mine but are the property of the State of New York.
Committee members may request access to e-mails by contacting the
Governor's Counsel's Office in Albany, NY. I have no further written
communications or materials regarding those staff conversations.
Beginning in the late fall of 2008, I also discussed the pilot on
numerous occasions with Jeff Mans, the Deputy Secretary to the Governor
for Labor and Financial Regulation. I have no written notes from the
conversations and can not tell you on what days the discussions took
place as I speak with Mr. Mans at least three times a week and there
was never a conversation specifically devoted to the pilot. The purpose
of the conversations was to apprise him of the Labor Department's ideas
for the pilot and to get the approval of the Governor's office.
On January 15, 2009 I sent an e-mail to my Labor Standards staff,
explaining the pilot to them. I am not able to include it as I do not
have the individual authority to release it. The e-mail is not mine but
is the property of the State of New York. Committee members may request
access to this e-mail by contacting the Governor's Counsel's Office.
On January 30 I received an e-mail concerning the pilot from Ellen
Chapnick, Dean for Social Justice Programs at Columbia Law School,
offering law student assistance. I am not able to include it as I do
not have the individual authority to release it. The e-mail is not mine
but is the property of the State of New York. Committee members can
request access to this e-mail by contacting the Governor's Counsel's
Office in Albany, NY.
I had a telephone conversation with the Assistant Counsel David
Weinstein of the Governor's Counsel's Office, and Deputy Secretary
Mans, on February 4. I answered questions about how the program
operated. There are no written notes or other materials associated with
the conversation.
On March 17, I had a meeting with representatives from the Retail
Council of New York State, the New York State Restaurant Association,
the New York Association of Convenience Stores, the Food Industry
Alliance of New York State and the Empire State Restaurant and Tavern
Association. In attendance were James Sherrin, Ted Potrikus, Rich
Sampson, James Calvin, Michael Rosen, Scott Wexler and Melissa
Fleischot. I had received correspondence from the trade associations
which can be found on the internet at www.nyacs.org/documents/
09wagewatch.pdf. The purpose of the meeting was to explain the pilot. I
answered their questions about the program, gave them a copy of the
agreement and the literature that is handed out and invited their
associations to participate in the Wage and Hour Watch initiative if
the pilot is successful. They asked for one change in the agreement,
that Wage and Hour Watch groups be prohibited from giving out
information about their group when they are doing Wage and Hour Watch
activities. I agreed to make that change going forward and we have
orally instructed the groups to refrain from that activity. I also
asked them to report to me any issues or complaints their members were
experiencing with the pilot and I have received no complaints from then
to date. I have no notes from that meeting. I have attached the written
information I provided to the meeting attendees. I also described this
initiative for Jennifer Ludden of National Public Radio on April 29,
2009.
After the pilot was announced, my counsel, Maria Colavito, received
correspondence from a wage survey company complaining of possible
trademark infringement from the Department's use of the name ``Wage
Watch.'' After consultation with the Attorney General's office the name
of the pilot was changed to ``Wage and Hour Watch.'' There was a
meeting on March 11, 2009 with myself, and as I recall, my counsel and
Deputy Commissioner Gerstein to discuss the name change. There are
several e-mails concerning the possible lawsuit, our possible response,
and possible alternative names that could be used to avoid litigation.
I am not able to include them as I do not have the authority to release
them. The e-mails are not mine but are the property of the State of New
York. Committee members may request access to these e-mails by
contacting the Governor's Counsel's Office in Albany, NY.
Question 6. Does the New York State Open Meeting Law apply to any
of the discussions and/or meetings with non-governmental stakeholders
regarding the creation, development or implementation of policy
initiatives such as the Wage Watch program? If not, why not? If so,
were all requirements of that law met with respect to any and all
meetings and discussions that you had regarding the Wage Watch program?
Answer 6. Meetings between the Department and entities who are
interested in or participating in the Wage and Hour Watch initiative
are not conducted as public meetings. This is because the Public
Meeting Law (Public Officers Law, Article 7) applies only to meetings
of ``public bodies'' for the purpose of conducting public business. A
public body is defined in the statute as ``. . . any entity, for which
a quorum is required in order to conduct public business and which
consists of two or more members, performing a governmental function for
the State or for an agency or department thereof . . .'' The Department
of Labor is not an entity for which a quorum is required to conduct
public business. Therefore, the Department staff or department heads do
not constitute a public body for purposes of the Open Meetings Law. See
Committee on Open Government, Opinion 2883. To interpret the law
otherwise would require the Department to treat all of its interactions
with constituent groups, regulated parties, advocates, or the public as
gatherings subject to the Open Meetings Law.
Nor are the Wage and Hour Watch groups ``public bodies'' within the
meaning of the law. The groups that volunteer for the Wage and Hour
Watch are not acting on behalf of the Department of Labor and are not
performing a government function, as the agreement with them makes
explicit. In fact, we rejected a suggestion that Wage Watch
participants should become ``the Commissioner's ``authorized
representative,'' as one group requested.
Question 7. Did you seek to engage any employer groups as ``Wage
Watch'' participants? If not, why not?
Answer 7. We did not seek to engage any employer group in the Wage
and Hour Watch pilot because none of them met the criteria we had
established for pilot participants: the referral of at least 10 cases
to the Department or the Attorney General of New York in the last 2
years. As I noted before, I did ask a number of employer associations
to participate in the program if it is continued after the pilot and
they agreed to consider the invitation.
Question 8. Since most of the organizations involved were labor
unions, did the Department ever consider that such groups might seek to
use their status as Wage Watch participants to further their efforts to
unionize unorganized employers?
Answer 8. Most of the groups in the pilot are not labor unions but
community groups, usually known as worker centers. These organizations
do not organize individuals into unions. There are two unions
participating. In order to avoid the possibility you raise, we
instructed them not to use their status as Wage and Hour Watch groups
as a union organizing tool. In order to implement this instruction, in
the required training sessions, participants are taught to introduce
themselves using their name and their group, not by Wage and Hour Watch
or the Department of Labor. They are required to participate in role
plays where we can see how they introduce themselves and what they say
to employers and employees. They are taught that they may not hold
themselves out as employees or a subdivision of the State or the
Department and any violation of this requirement is grounds for
immediate termination from participation in the program.
Question 9. What safeguards were in place to prevent such misuse of
the program? Please attach the oversight and enforcement guidelines for
groups participating in Wage Watch.
Answer 9. Please see my answer to No. 8, above. Participants were
told that they would be terminated if they misused the program. To date
we have received no complaints from any employers who have been visited
by Wage and Hour Watch groups. A copy of the current agreement is
attached to the response to question 5.
Question 10. Did the Department ever consider that since these
efforts were targeted at legally unsophisticated workers, many of whom
were likely to have language issues, and that the participants were
passing out official NY Department of Labor materials, that there might
be considerable risk that workers would view Wage Watch participants as
government ``officials?''
Answer 10. Yes. In the required training sessions participants are
taught that they may not hold themselves out as employees or a
subdivision of the State or the Department and any violation of this
requirement is grounds for immediate termination from participation in
the program. We instruct them to introduce themselves using their name
and their group, not by Wage and Hour Watch or the Department of Labor.
They are required to participate in role plays where we can see how
they introduce themselves and what they say to employers and employees.
Question 11. Wage Watch members were to be given a ``certificate of
membership.'' Was that certificate signed by any NY State official? Did
it contain the NY State seal, or any other markings that would make it
appear ``official?'' Could you forward a blank copy of the membership
certificate to the committee?
Answer 11. Participants are given a ``Certificate of Completion''
which is modeled on the certificate that was given to all greengrocer
employers who completed training sessions after signing on to the
Attorney General's Greengrocer Code of Conduct. It is attached. They
are also given a card to carry with them, which is also attached.
Question 12. Labor law ``education,'' complaint preparation and
associated ``enforcement'' activities are the statutory responsibility
of the NY State Department of Labor, and its duly authorized employees.
Why did you believe it was necessary or prudent to deputize, or grant a
quasi-official role to outside organizations to also perform these
functions, particularly where the groups you selected might plainly
have had ulterior motives for their participation?
Answer 12. This program was modeled on the successful Neighborhood
Watch Program. While the police have the statutory duty to investigate
crimes they use Neighborhood Watch programs to involve ordinary
citizens in efforts to keep their communities safe and increase the
reach of law enforcement in their neighborhoods. Similarly, in Wage and
Hour Watch, these groups are not authorized to perform any enforcement
activities and all investigation of complaints is done solely by the
Department and not the groups. Their role is limited to doing outreach
and community education and to report any violations they encounter to
the Department. I thought it was prudent to engage outside groups
because the Department has very limited resources relative to the
number of employers in the State and with the current fiscal crises is
facing reductions in staff in this area. This involvement allows the
Department to have a broader reach and use more of its limited
resources on investigating cases. Labor law violations are rampant in
many industries and areas of the State and the activities these groups
are engaging in will promote employer compliance.
Question 13. Have you discussed with anyone, including, but not
limited to, any Federal official, nominee, appointee, employee,
stakeholder, union or community organization representative,
Administration representative or official representative of President
Obama's Transition Team, the idea of making the NY Wage Watch program a
national program for any Federal labor laws?
Answer 13. No.
Question 14. Please provide that name(s) of any individual(s) or
group(s) with whom or which you have had any written or oral
communication, or met with and/or discussed, the possibility of
creating, developing or implementing any program like Wage Watch with
respect to any Federal labor laws, and in each instance please provide
the dates of any and all such communications, meetings or discussions,
and a summary of the substantive content of all such communications,
meetings and discussions. Please forward to the committee any notes,
memoranda, correspondence of any kind and any written materials related
in any way to any such communications, meetings or discussions and a
copy of any written communications.
Answer 14. None.
Question 15. In light of your support for the Wage Watch program in
New York, would you advocate utilizing the same approach for other laws
that impact the workplace? For example, would you support the State of
New York or the Federal Government entering into a Wage Watch-type
agreement with groups such as the Minutemen Project to ``extend the
reach of awareness regarding illegal immigration and enforcement into
the community?''&
Answer 15. This initiative was designed as a local model in a
limited geographic area in a State, for a particular issue under a
particular statute. It was not designed for other laws or to be used on
the Federal level. Until the pilot is completed and evaluated, I would
not advocate expanding it to other areas in New York, to other areas of
the country, to the Federal level or to other Federal or State laws.
Response to Questions of Senator Isakson by M. Patricia Smith
Question 1a. Recently, 19 opinion letters were withdrawn without
substantive reason even though substantial effort had been expended by
the previous Administration in developing an answer. The only
explanation provided was,
``It does not appear that this response was placed in the
mail for delivery to you after it was signed. In any event, we
have decided to withdraw it for further consideration by the
Wage and Hour Division.''
Does this response endanger the opinion letter process by allowing
any administrator to withdraw a letter simply because it was signed
under a previous Administration?
Answer 1a. I am not familiar with the process used by the Wage and
Hour Division (WHD) for drafting and issuing opinion letters or
evaluating whether or not to withdraw them. In addition, I have no
knowledge of the facts and circumstances surrounding the 19 opinion
letters referred to in your question. However, I understand that the
issuance of opinion letters play a significant role in helping both
employers and workers understand their rights under the Fair Labor
Standards Act. If confirmed as Solicitor, I look forward to making sure
that the Office of the Solicitor provides adequate legal support to the
WHD with respect to the opinion letter process as well as other issues
confronting that agency.
Question 1b. The Wage and Hour Division noted that the withdrawal
of the official signed and dated opinion letters was done in accordance
with the Department of Labor's interpretive guidelines under 29 CFR
Sec. 790.17(d). That section states, ``Opinion letters of an agency
expressing opinions as to the application of the law to particular
facts presented by specific inquires fall within this description.''
Similarly, it has always been the practice of previous Administrations
to only withdraw issued opinion letters based on specific inquires
asking for rescission or a change of opinion. Do you agree that this is
the preferred method and will you follow this precedent?
Would the Administration's claim of transparency be furthered by
allowing the department to withdraw letters without any record of a
request?
Answer 1b. As discussed in my response to question (1a), above, I
am not familiar with the legal issues involved in the Wage and Hour
Division's withdrawal of opinion letters or the practice of previous
Administrations with respect to such withdrawals. If confirmed, I hope
to work with WHD to assure that the process for issuing and withdrawing
opinion letters results in guidance to the regulated community that is
both clear and transparent.
Question 2. Last year, you told the New York Times that you had
``made the determination that it would be better for workers to lose
their jobs than to continue working there.'' How do you make a
determination that you know better than workers what is in their best
interest?
Answer 2. I was making the same determination, that workers who
have acquired knowledge of this employers' illegal and abusive business
practices routinely made, to get out. This employer had been under
investigation by both the Labor Department and the Workers Compensation
Board for over a year when I made this statement. He had been in
business for a long time, changing names and filing for bankruptcy to
avoid paying debts. He refused to come into compliance and despite
several visits and notices of violation he continued his illegal and
abusive practices. When this employer hired a new worker they were told
their first 2 weeks pay would be put in the ``kitty'' and they would
get it when they left. During this investigation many workers quit
because they were not getting paid and I am aware of no one who ever
received their first 2 weeks pay. After the first 2 weeks this employer
routinely did not pay or paid by bad checks. When he did pay he paid
$50 per day for 12- to 14-hour shifts. He used threats to keep
employees under his control. He deducted taxes from the workers wages
and never remitted them to the tax authorities.
In my experience, when this employer's workers finally learn what I
learned in the investigation, they routinely quit. But at that point
they are owed anywhere from 4 weeks to 6 months pay. When a worker
quits, this employer simply hires another one and the pattern of abuse
began again. This employer currently owes over $600,000 to 22 workers
and had hidden his assets (he lives in what the police described as one
of the largest homes in the Bronx that is owned by his 26-year-old son)
such that I am unsure that these or any other workers would be able to
get the money for which they have worked so hard. He is now being
prosecuted by the New York State Attorney General office for multiple
felonies arising out of these illegal business practices.
Question 3. Do workers have a right to a secret ballot when making
a decision on unionization? Should they?
Answer 3. The Solicitor of Labor does not enforce organizing law,
rather, that enforcement responsibility lies with the National Labor
Relations Board. Having said that, I personally believe that workers
have a right to genuine workplace democracy in which they can choose
whether or not to join a union free from coercion, and there are a
number of factors leading up to the actual practical process of the
election that must be taken into consideration in making a
determination as to whether the election meets basic labor standards.
Question 4. With regard to your ``Wage Watch'' efforts in the State
of New York, do you see the possibility of instituting similar efforts
on the national level?
Is there an application of this concept to education efforts and/or
enforcement of the Labor-Management Reporting and Disclosure Act? How
about immigration laws? Which groups would be appropriate partners for
the government in these efforts?
Answer 4. This program is still just a pilot program in one region
of New York, and hasn't been implemented statewide. Until the pilot is
completed and evaluated, I would not consider or advocate expanding it
across New York, to other parts of the country, to the Federal level or
to other laws.
Response to Questions of Senator Coburn, M.D. by M. Patricia Smith
Question 1. President Obama has been a champion of government
transparency during his time in the U.S. Senate and campaigned on a
promise to make the Federal Government more transparent. What is your
philosophy on transparency?&
Answer 1. Throughout my career, I have supported and welcomed
transparency, because it is the best way to make sure that members of
the public can participate in an effective and accountable government.
Question 2. Currently all recipients of Federal grants, contracts,
and loans are required to be posted online for public review. Do you
support making all Federal assistance including subcontracts and sub-
grants transparent in the same manner?
Answer 2. In general, as I said before, I support transparency and
accountability in government. I would support publicly posting this
information to the extent practicable, except in cases where there are
genuine privacy concerns.
Question 3. Will you commit to ensure the Department fully
implements all aspects of the Federal Funding Accountability and
Transparency Act (P.L. 109-282) at the Department of Labor?&
Answer 3. The Secretary has stated public support for this
legislation, as has President Obama who co-authored this legislation
and worked with you to secure its passage. It is my commitment to
enforce all Federal laws under the Department's jurisdiction, including
this important law.
Question 4. President Obama's transition Web site said this about
how Cabinet agencies will operate: Conduct Regulatory Agency Business
in Public: Obama will require his appointees who lead the executive
branch departments and rulemaking agencies to conduct the significant
business of the agency in public, so that any citizen can see these
debates in person or watch them on the internet.
Have you considered how you will implement this transparency
mandate in your position should you be confirmed?&
Answer 4. I have not had an opportunity to learn or evaluate how
the Office of the Solicitor participates in rulemaking activities at
the Department of Labor. However, I intend to work closely with the
leadership team at the Department to maximize public transparency with
regard to the decisionmaking processes at the agency.
Question 5. Will you commit to fully cooperate and assist me and my
staff in our efforts to conduct oversight of Department of Labor
programs especially those under your authority?
Answer 5. If confirmed, I will do my best to respond promptly and
fully to all reasonable requests for information or assistance from
members of the committee, including those relating to oversight of
Department of Labor programs. I hope to maintain a productive working
relationship not just with this committee, but with all Members of
Congress.
Question 6. Have you considered any replication of the ``Wage
Watch'' program or similar program(s) at the Federal level?&
Answer 6. This initiative was designed as a local model for a
limited geographic area in a State, rather than at the Federal level.
Until the pilot is completed and evaluated, I would not consider or
advocate expanding it to other areas in New York, to other areas of the
country, to the Federal level or to other laws.
Question 7. The D.C. Circuit Court of Appeals held recently state
that teacher unions are under the same Labor Management Reporting and
Disclosure Act of 1959 reporting requirements as national teacher
unions. The decision to apply LMRDA transparency reporting requirements
to State teacher unions was advanced by the Department of Labor to
foster increased information for State teachers across the country.
Will you commit to uphold and advance this important Department
position to seek transparency from State affiliates of national
organizations that must comply with LMRDA?
Answer 7. I have not yet become familiar with this case and the
legal issues it addresses. However, as I have said in confirmation
meetings, I believe in strong and balanced enforcement of the LMRDA. If
confirmed as Solicitor of Labor, one of my principal functions will be
to provide the Secretary with legal advice as to the Department's
responsibilities under the laws it administers and enforces so that she
has the benefit of this information as she implements her priorities
and those of the Administration.
Response to Questions of the HELP Committee by M. Patricia Smith \1\
Question 1. To what degree, if any, have you been consulting with
U.S. Department of Labor officials pending your nomination? Have any of
your staff consulted on your behalf? What were the nature and substance
of any conversations? Have you been provided with any documents by U.S.
Department of Labor staff? If so, please provide them in full to the
committee.
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\1\ The committee took care to only include non-confidential
documents and information based on those documents in these questions
that will be given to the clerk for inclusion in the official public
record. We believe we segregated the question based specifically on
confidential documents and information into a separately labeled
confidential request. Should you have concerns with the documents or
information referenced herein being included in the public record,
please contact the committee to discuss those concerns.
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Answer 1. I have consulted and received advice from the
Department's ethics attorneys in connection with my financial
disclosure report and the ethics requirements applicable if I am
confirmed as Solicitor of Labor. I also attended a portion of a meeting
of the senior managers of the Office of the Solicitor, when I was in
Washington on other business in April 2009, to introduce myself.
I have consulted with the Office of Congressional and
Intergovernmental Affairs (OCIA) during the committee's consideration
of my nomination, including in preparation for meetings and in
responding to the committee's written questions. In preparation for my
confirmation hearing, OCIA provided me the questions for the record
asked by this committee of the Secretary in her confirmation hearing,
along with her answers, and met with me to review questions that would
likely be asked of me in my hearing. A few political appointees in the
Office of the Secretary participated in a mock hearing in preparation
for my confirmation hearing. In addition, the Director of
Intergovernmental Affairs at the New York State Department of Labor,
Patricia Fahy, had one conversation with OCIA concerning the status of
my nomination.
I have also discussed possible candidates for positions in the
Solicitor's Office with the Labor Department's White House Liaison. I
have received approximately 10 resumes from the Labor Department's
White House Liaison, but I have not made any hiring decisions. Because
those resumes contain personal information and the individuals do not
necessarily know their resumes were sent to the Labor Department I have
not included them. I also received from the Labor Department a
forwarded request to attend a Bar Association function in my role of
Solicitor nominee, which I declined. I have attached it as Attachment
A.
Question 2. In your role as Commissioner of Labor in New York, have
you recused yourself from any matters that involve interactions with
the U.S. Department of Labor since your nomination? \2\ If confirmed,
to what degree would you recuse yourself from matters pertaining to the
New York Department of Labor and for what periods of time?
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\2\ To the extent this request raises specific confidentiality
concerns, please state as such and provide any answer as part of the
confidential response.
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Answer 2. In my role as Commissioner, I have not recused myself
from any matters that involve interactions with the U.S. Department of
Labor. To my knowledge all interactions with the U.S. Department of
Labor, since my nomination, involved routine business matters and have
not involved the Solicitor's office. Pending my confirmation, the only
matter involving the U.S. Department of Labor that required my personal
involvement is subject to the confidentiality protections provided by
New York law to non-final interagency discussions and is discussed as
part of my confidential response. As to future recusals, I plan to
follow the commitments described in my Ethics Agreement which was
provided to the committee. It states:
``For a period of 1 year after my resignation (as
Commissioner of Labor of New York), I will not participate
personally and substantially in any particular matter involving
specific parties in which New York State is a party or
represents a party, unless I am first authorized to participate
pursuant to 5 CFR Sec. 2635.502(d). In addition, for the
duration of my tenure as Solicitor of Labor, if confirmed, I
will not participate personally or substantially in any
particular matter in which I previously appeared before, or
directly communicated with the U.S. Department of Labor on
behalf of the New York State Department of Labor, unless I am
first authorized to participate pursuant to 5 CFR
Sec. 2635.502(d).''
Question 3. Do you believe that it is appropriate for the
enforcement staff of the Federal or State Government to work and
coordinate with entities that have vested and/or financial interests
that happen to align with enforcement efforts of the Department of
Labor? For example, did you or your staff consider whether there was
any actual or apparent conflict of interest in having unions that are
seeking to organize workers in a particular industry also perform
outreach and report violations for those same industries? How is that
situation different from for-profit businesses participating in the
Wage and Hour Watch program?
Answer 3. I believe that it may be appropriate for the government
to work with entities that have interests that align with the
government's own enforcement efforts if those entities are reliable and
understand what the collaboration entails. My staff and I did consider
whether there was an actual or apparent conflict of interest in having
unions that may be seeking to organize in particular industries perform
outreach and report violations in those industries. We concluded that
our prior experience over a number of years in working with the two
unions that are participating in Wage and Hour Watch demonstrated no
such conflict.
I believe unions, community groups, and for-profit businesses are
all entities that may have legitimate, albeit different, interests in
labor law enforcement that align with the Department of Labor's
enforcement efforts. Additionally, each of these three types of
entities often has knowledge of significant labor law violations that
could support the government's own enforcement efforts. Therefore I
believe it may be appropriate for government to work with these, and
other entities, that have interests that align with the government's
own enforcement efforts.
Question 4. What is the vetting process for the New York Department
of Labor to partner with an entity both with regard to the Wage and
Hour Watch program and other programs? Did the Department comply with
that policy in the case of Wage and Hour Watch groups? Were any groups
rejected for the Wage and Hour Watch program? Were any background
checks (administrative enforcement actions, criminal records, etc.)
undertaken by the State of New York with regard to any sponsoring
groups and/or officials and individuals of the groups, and/or any
individuals who participated in the Wage and Hour Watch program? If so,
please provide a complete record of these background checks to the
fullest extent possible.
Answer 4. There is no formal vetting process for the New York State
Department of Labor to partner with an entity. Instead, the Department
relies primarily on prior experience working with the group. For the
Wage and Hour Watch pilot, the Department selected the groups that were
asked to join based on prior experience working with them on a more
informal basis. Groups were rejected in the sense that some groups the
Department had worked with were not asked to join the pilot based on
past experience with them. Currently, for the potential expansion of
Wage and Hour Watch, the New York State Department of Labor has a
written application, which the committee has been provided. I have
attached an additional copy as Attachment B. The Department did
consider the possibility of background checks on the groups but
ultimately rejected that idea after inquiring as to whether
Neighborhood Watch groups are subject to background checks. The
Department was informed that the groups participating in this more
sensitive crime prevention partnership were not subject to a check.
Question 5. One of the groups participating in the program, Make
the Road New York, sent an e-mail on February 2, 2009 to the New York
Department of Labor discussing its relationship with ACORN that was
``not for quoting, but for background.'' [Attached as Exhibit A]. Did
the Department specifically inquire into this relationship? If so, what
was the reason for the inquiry and please describe the nature and
substance and any response given besides this e-mail. Has ACORN applied
to join Wage and Hour Watch? Does the Department have any other
relationship with ACORN? If so, please describe the nature of the
relationship.
Answer 5. I have no personal knowledge of this e-mail or the
circumstances surrounding it. I inquired of the Deputy Commissioner to
whom it was sent. To the best of her recollection, she had called the
sender of the e-mail after an editorial in the New York Post described
Make the Road New York as being ``closely aligned'' with ACORN, a
statement that surprised her based on her experience with Make the Road
New York. Apparently, the inquiry was more personal than an official
Department of Labor inquiry. There was no other response besides the e-
mail, which the Deputy Commissioner kept in case there were press
inquires triggered by the editorial. ACORN has not asked to participate
in the Wage and Hour Watch program and, to the best of my knowledge,
the Department has no other relationship with ACORN.
Question 6. The Wage and Hour Watch agreement (the ``agreement'')
contains language that requires groups to ``maintain the
confidentiality of all personal information obtained through Wage Watch
activities, ``but, ``[t]his pledge of confidentiality shall not
preclude outreach to individuals working with Wage Watch groups to
notify them or engage them in meetings, community organizing, or other
activities typically engaged in by the Wage Watch group.'' [Attached as
Exhibit B]. Please clarify whether and how Wage and Hour Watch
participant organizations are permitted to use any information gathered
as part of Wage and Hour Watch under the agreement.
Answer 6. The only use that Wage and Hour Watch groups can make of
information gathered as part of Wage and Hour Watch activities, other
than giving it to the Labor Department as part of a referral, is to use
contact information such as names and addresses to notify individuals
of the group's activities, such as meetings or community organizing
events.
Question 7. In your response to prior Question for the Record 5,
you stated that the State had orally instructed Wage and Hour Watch
groups to refrain from giving out information about their member groups
``when they are doing Wage and Hour Watch activities: in response to a
request made on March 17 by several trade associations. When was that
direction given and who directed the groups to refrain from that
activity?
Answer 7. Within a week of the March 17 meeting, I directed Lorelei
Boylan to call all of the Wage and Hour Watch groups, inform them that
this issue came up at a meeting with various trade associations, that
the issue was not directly covered in the agreement, and to instruct
them that, to the extent they had materials about their organization,
they should refrain from giving out these materials when they were
doing Wage and Hour Watch activities. Within a week after that she
reported back to me that she had spoken to each of the groups, they
understood the instruction, and would comply.
Question 8. On May 26, 2009 e-mail sent by Brian O'Shaughnessy of a
labor-religion group to several persons interested in Wage and Hour
Watch program, which is carbon-copied to Deputy Commissioner Gerstein
through the Wage and Hour Watch e-mail account, purportedly attaches a
New York Department of Labor document that is ``NOT'' in final form and
for internal use ONLY of those on this e-mail from DOL that I believe
may answer many of your questions.'' [Attached as Exhibit C]. Please
provide a copy of the referenced document. Were other groups or
individuals outside the New York Department of Labor given this same
information?
Answer 8. The document was a blank copy of the Wage and Hour Watch
Agreement which the committee already has been provided. I have
attached another copy as Attachment C. The document was described as
``not in final form'' because we are anticipating that some changes may
be made in the agreement if the pilot is expanded. This is the document
that would have been sent to any group that requested more information,
but my staff believes that no other group requested more information.
Question 9. Was additional funding sought or obtained by the New
York Department of Labor for either the pilot program or any
anticipated expansion of the Wage and Hour Watch Program? Please
provide the total cost to date of the Wage and Hour Watch program to
fullest extent possible.
Answer 9. No additional funding was sought or obtained by the New
York State Department of Labor for either the pilot program or any
possible expansion of the Wage and Hour Watch program. The total out-
of-pocket cost of the program (for in house printing of materials and
costs associated with the February 7, 2009 training) to date is
approximately $665. My staff estimates that salaries for staff time
spent developing and implementing the Wage and Hour Watch Program to
date is under $5,000. The total cost for the Wage and Hour Watch pilot,
to date, is approximately $5,665.
Question 10. A November 7, 2008 e-mail with attached notes
regarding Wage and Hour Watch states that the New York Department of
Labor should include the ``Workers' Rights Law Center since their
current staffing will leave them in need of support from government
agencies.'' [Attached as Exhibit D]. The same attachment suggests that
the groups and the New York Department of Labor may want to approach
private foundations for grants as part of a public/private partnership
to support the program. How would Wage and Hour Watch membership have
assisted the Workers' Rights Law Center with staffing difficulties? Are
you aware if any payments and/or grants were made to Wage and Hour
Watch participants for joining or participating in the program? Please
specify which groups and the amounts. Will the State of New York be
overseeing or auditing any funds given to the participating
organizations to fund Wage and Hour Watch activities?
Answer 10. Since I am not the author of the e-mail cited in your
question, I have no direct knowledge of what the author was thinking
when she wrote the notes. However, I do know that unlike the other
groups who are participating in the Wage and Hour Watch Program, the
Workers Rights Law Center is a law office that brings legal cases and
around the time this e-mail was written it had lost two of its three
attorneys. I asked the author and she informed me that when she wrote
the e-mail she thought that participation in the Wage and Hour Watch
pilot would encourage the Center to refer more cases to the Department,
lessening its own caseload and the burden on its remaining staff. To my
knowledge no group has applied for or received any funding from any
source for participation in the Wage and Hour Watch program. The New
York State Department of Labor has not approached any private
foundations for grants, nor has it been contacted by any private
foundation, or other entity, to discuss the Wage and Hour Watch program
and the possibility of funding anyone for participation in that
program.
Question 11. When formulating the New York Wage and Hour Watch
program, what analysis did you undertake to consider whether
legislative authorization was required to establish the program? Please
provide the committee with any written analysis on this point to the
extent it has not already been produced or, if the analysis was not
written, please provide a written summary of the analysis.
Answer 11. I myself did not perform any legal analysis. That was
the job of the New York State Department of Labor's Counsel who
reviewed the documents for the then-proposed program and did not find
any legal implement to launching the pilot under existing legal
authority. No written legal analysis was produced.
Question 12. Do you think that establishment of a similar Wage and
Hour Watch program on the Federal level could be done under existing
authority, or would legislative authorization be required? Have you
obtained any legal analysis on this point? If so, please provide the
committee with any such written analysis or, if the analysis was not
written, please provide a written summary of the analysis.
Answer 12. I have not considered whether a similar Wage and Hour
Watch program could be established on the Federal level within existing
legal authority or whether it would require legislation and have no
opinion on this subject at this time. I have neither sought nor
obtained a legal analysis on this issue.
Question 13. Several e-mails produced to the committee, including a
February 27, 2009 e-mail from Deputy Commissioner Gerstein to the
outside pilot groups [Attached as Exhibit E], suggest that a Web page
and ``Google group'' or list serve be developed for Wage and Hour
Watch. The committee is only able to locate press materials announcing
the program on the New York Department of Labor's Web site. Was such a
Web page and/or group created and is it functioning? To the extent
commercial internet resources were used for a list serve or group, what
safeguards are being used to prevent potential confidential complainant
information shared through such portals from being improperly accessed?
Answer 13. Neither the Web site nor the list serve group was ever
created and neither is functioning.
Question 14. A Wage and Hour Watch participant organization, Make
the Road, requested in a May 11, 2009 e-mail that Ms. Boylan ``squeeze
in'' referrals of bigger cases before she leaves the New York
Department of Labor. [Attached as Exhibit F]. What kind of criteria
does the New York Department of Labor have for accepting referrals for
this Taskforce? Did the New York Department of Labor accept the
referrals in question on behalf of Make the Road? What criteria was
used to determine which cases were bigger than other cases?
Answer 14. The Fair Wages Taskforce uses the following criteria for
accepting referrals from individuals or community groups:
1. Whether employees in the particular business are at high risk of
exploitation (child labor, certain low-wage industries that have high
rates of noncompliance, immigrant workers).
2. Businesses that employ 30 or more employees in low-wage
industries.
3. Large cases in the sense that the employer has multiple
locations requiring a coordinated team effort for the investigation.
The focus of the Fair Wages Taskforce is low-wage industries so the
criteria for bigger cases is either the number of employees or number
of locations (as opposed to amounts of underpayments which tend to be
much more in higher paid industries where most cases involve overtime
violations). As far as I know the Task Force accepted one case
mentioned in the e-mail, the bagger case, because baggers have been a
priority occupation for the Task Force since early 2008.
Question 15. You stated previously in response to Questions for the
Record that as of May 2009 you had not received any complaints about
Wage and Hour Watch. Are you aware of whether any other government
agencies may have received complaints about Wage and Hour Watch?
Answer 15. I am not aware of any entity, governmental agency, trade
organization, or participating group that has received any complaints
about Wage and Hour Watch.
Question 16. You stated in your testimony that one of your goals as
Solicitor would be to ``make sure there is a consistency of priorities
around the country so that you get the same service from the
Solicitor's Office in San Francisco as you do in Maine.'' Are there any
specific priorities that you do not believe are being consistently
applied nationally? Why do you believe those priorities are not
consistent nationally? If confirmed, what specific steps do you
anticipate taking to ensure greater consistency?
Answer 16. When I worked on the Labor Department Agency Review team
for the Obama transition I was assigned to the Wage Hour Division. One
of the main issues brought to my attention by the Wage Hour personnel
in the field is that their ability to bring cases was highly dependent
on the regional Solicitor's Office. Because the Wage Hour regions are
different than the Solicitor's Office regions, some Wage Hour regional
offices are served by more than one Solicitor's Office. I was told
there was often a marked difference between the two Solicitor's Offices
in their responses to requests to file lawsuits. If confirmed, before I
take any specific steps to ensure greater consistency, I would want to
determine how widespread this problem is, including the extent to which
it is experienced by the other enforcement agencies and what the
apparent cause or causes of the problem are.
Question 17. Do you think it is appropriate for State and/or
Federal Government enforcement agents to use their position to promote
union organizing efforts at particular companies? If you discovered
that government enforcement personnel were targeting investigations
and/or otherwise using their positions for such purposes, would you
support taking disciplinary action, including terminating them? Will
you commit to investigating and removing any enforcement personnel
found to have done this or otherwise abuse their position in a law
enforcement agency at the U.S. Department of Labor?
Answer 17. I do not think it is appropriate for a State or Federal
Government enforcement agent to use his or her position to interfere
with union organizing efforts whether the goal is to promote or deter
the efforts. I also would not automatically dismiss legitimate
complaints about possible violations of labor laws because of their
source. I would support taking disciplinary action against any agent
that abuses their position in that way. However, I am not sure at this
time that I can commit to investigating and removing such personnel
because I do not know if this type of investigation falls under the
jurisdiction of the Solicitor's Office or some other office, such as
the Office of the Inspector General.
Question 18. In your testimony in May and in your written statement
submitted with the committee, you discussed the fact that your Green
Grocer Code of Conduct required employers to submit to ``independent
monitoring.'' Who conducted that monitoring and is it continuing? How
were/are they compensated for that monitoring and what is the annual
cost of that monitoring?
Answer 18. The monitoring was done by A&L Group, Inc, an
independent monitoring firm hired and paid by the Attorney General's
office. The monitoring was done for 200 establishments for a period of
2 years, the length of time required by the Code of Conduct. I can't
tell you the exact cost of the contract because I no longer have access
to the files at the Attorney General's Office. I remember that the cost
was approximately $30,000 the first year and $20,000 the second year.
Question 19. In your testimony in May, you suggested that New York
employers who do not participate in ``compliance offers'' from your
agency violate wage laws and should be prosecuted as willful violators.
Do you believe that failure to participate in compliance opportunities
renders all labor law violations (e.g., health and safety, wage and
hour, etc.) as willful violations? If confirmed as Solicitor of Labor,
would you seek to impose willful liability on violators who do not
participate in ``compliance offers'' with the U.S. Department of Labor?
Answer 19. I believe that an entity is in willful violation of New
York's Labor Law when it violates the Labor Law after (1) there has
been a major publicized investigation into their industry, (2) that
investigation has resulted in findings of a high non-compliance rate in
the industry, and (3) the entity was invited to a compliance seminar
and declined to attend. In New York the legal standard for a willful
violation is ``known or should have known'' of the violation and I
believe that standard is met in these circumstances. While I believe
that failure to attend a compliance seminar is a factor in finding
willfulness under New York law, it is not the only factor. Other
factors, including the ones I describe above should also be considered.
If confirmed as Solicitor I will apply the appropriate Federal legal
standard to findings of willfulness. I am not currently familiar enough
with the Federal standard to make any final conclusions but if failure
to attend a compliance seminar is an appropriate factor in applying the
Federal standard, I will apply it.
Question 20. The Department of Labor issues opinion letters under a
number of its programs, particularly in the wage and hour and employee
benefits areas, to explain the law and regulatory requirements in
specific circumstances. At any given time, there may be several hundred
pending requests for opinion letters from stakeholders. In your prior
response to Questions for the Record, you stated that you understood
the importance of opinion letters and would provide adequate support to
Wage and Hour to issue opinion letters. Would you commit to updating
the committee on the total number of opinion letters pending on a
monthly basis in the wage and hour and employee benefits areas and
other areas under the Department's jurisdiction?
Answer 20. I have seen the value of opinion letters at the New York
State Department of Labor where the letters are issued by Counsel's
office. My understanding at this time is that at the U.S. Department of
Labor, opinion letters are not issued by the Solicitor's Office but by
the various agencies. However, these opinion letters are on the
Department's Web site; for example, the Wage and Hour Opinion letters
can be found at: www.dol.gov/esa/whd/opinion.opinion.htm. I continue to
believe the Solicitor's Office must provide adequate support to the
agencies, and, if confirmed, intend to address any problems caused by
lack of Solicitor's support. However, my understanding at this time is
that the Solicitor's Office is not involved in every opinion letter, or
even in most opinion letters and therefore believe that office does not
have the ability to update the committee on the numbers of opinion
letters issued by the various agencies.
[Whereupon, at 11:10 a.m., the hearing was adjourned.]