[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

                       YEAR 2016 BUDGET PROPOSAL
                      FOR THE DEPARTMENT OF LABOR



                               before the

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE
                     U.S. HOUSE OF REPRESENTATIVES


                             FIRST SESSION




                            Serial No. 114-6


  Printed for the use of the Committee on Education and the Workforce


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            Committee address: http://edworkforce.house.gov

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                    JOHN KLINE, Minnesota, Chairman

Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Virginia Foxx, North Carolina            Virginia
Duncan Hunter, California              Ranking Member
David P. Roe, Tennessee              Ruben Hinojosa, Texas
Glenn Thompson, Pennsylvania         Susan A. Davis, California
Tim Walberg, Michigan                Raul M. Grijalva, Arizona
Matt Salmon, Arizona                 Joe Courtney, Connecticut
Brett Guthrie, Kentucky              Marcia L. Fudge, Ohio
Todd Rokita, Indiana                 Jared Polis, Colorado
Lou Barletta, Pennsylvania           Gregorio Kilili Camacho Sablan,
Joseph J. Heck, Nevada                 Northern Mariana Islands
Luke Messer, Indiana                 Frederica S. Wilson, Florida
Bradley Byrne, Alabama               Suzanne Bonamici, Oregon
David Brat, Virginia                 Mark Pocan, Wisconsin
Buddy Carter, Georgia                Mark Takano, California
Michael D. Bishop, Michigan          Hakeem S. Jeffries, New York
Glenn Grothman, Wisconsin            Katherine M. Clark, Massachusetts
Steve Russell, Oklahoma              Alma S. Adams, North Carolina
Carlos Curbelo, Florida              Mark DeSaulnier, California
Elise Stefanik, New York
Rick Allen, Georgia

                    Juliane Sullivan, Staff Director
                 Denise Forte, Minority Staff Director
                            C O N T E N T S


Hearing held on March 18, 2015...................................     1

Statement of Members:
    Kline, Hon. John, Chairman, Committee on Education and the 
      Workforce..................................................     1
        Prepared statement of....................................     3
    Scott, Hon. Robert C. ``Bobby,'' Ranking Member, Committee on 
      Education and the Workforce................................     4
        Prepared statement of....................................     7

Statement of Witnesses:
    Perez, Hon. Thomas, E., Secretary, U.S. Department of Labor, 
      Washington, DC.............................................    16
        Prepared statement of....................................    20

Additional Submissions:
    Kilili Camacho Sablan, Hon. Gregorio, a Representative in 
      Congress from Northern Mariana Islands:
        Statement for the record.................................    66
    Chairman Kline:
        Letter for the record from ACCI..........................    64
    Questions submitted for the record by:
        Davis, Hon. Susan, A., a Representative in Congress from 
          the State of California................................    77
        Chairman Kline...........................................    71
        Rokita, Hon. Todd, a Representative in Congress from the 
          State of Indiana.......................................    76
        Messer, Hon. Luke, a Representative in Congress from the 
          State of Indiana.......................................    77
        Polis, Hon. Jared, a Representative in Congress from the 
          State of Colorado......................................    78
        Walberg, Michigan, Hon. Tim, a Representative in Congress 
          from the State of Michigan.............................    76
    Secretary Perez:
        Response to questions submitted for the record...........    79
                      2016 BUDGET PROPOSAL FOR THE
                          DEPARTMENT OF LABOR


                       Wednesday, March 18, 2015

                     U.S. House of Representatives

                Committee on Education and the Workforce

                            Washington, D.C.


    The committee met, pursuant to call, at 10:01 a.m., in Room 
2175, Rayburn House Office Building, Hon. John Kline [chairman 
of the committee] presiding.
    Present: Representatives Kline, Foxx, Roe, Thompson, 
Walberg, Salmon, Guthrie, Messer, Byrne, Carter, Curbelo, 
Stefanik, Allen, Scott, Davis, Courtney, Polis, Wilson of 
Florida, Bonamici, Takano, Jeffries, Clark, and DeSaulnier.
    Staff present: Lauren Aronson, Press Secretary; Andrew 
Banducci, Professional Staff Member; Janelle Belland, 
Coalitions and Members Services Coordinator; Ed Gilroy, 
Director of Workforce Policy; Christie Herman, Professional 
Staff Member; Marvin Kaplan, Workforce Policy Counsel; Nancy 
Locke, Chief Clerk; John Martin, Professional Staff Member; 
Zachary McHenry, Legislative Assistant; Daniel Murner, Deputy 
Press Secretary; Michelle Neblett, Professional Staff Member; 
Brian Newell, Communications Director; Krisann Pearce, General 
Counsel; Molly McLaughlin Salmi, Deputy Director of Workforce 
Policy; Emily Slack, Professional Staff Member; Alissa 
Strawcutter, Deputy Clerk; Juliane Sullivan, Staff Director; 
Loren Sweatt, Senior Policy Advisor; Alexa Turner, Legislative 
Assistant; Joseph Wheeler, Professional Staff Member; Tylease 
Alli, Minority Clerk/Intern and Fellow Coordinator; Austin 
Barbera, Minority Staff Assistant; Denise Forte, Minority Staff 
Director; Melissa Greenberg, Minority Labor Policy Associate; 
Carolyn Hughes, Minority Senior Labor Policy Advisor; Eunice 
Ikene, Minority Labor Policy Associate; Brian Kennedy, Minority 
General Counsel; Richard Miller, Minority Senior Labor Policy 
Advisor; Amy Peake, Minority Labor Policy Advisor; Kiara 
Pesante, Minority Communications Director; and Veronique 
Pluviose, Minority Civil Rights Counsel.
    Chairman Kline. A quorum being present, the Committee on 
Education and the Workforce will come to order.
    Well, good morning, Secretary Perez. Welcome back to the 
Education and Workforce Committee. Thank you for joining us for 
this hearing on the President's Fiscal Year 2016 budget 
proposal. We have much to discuss in a short period of time.
    The American people have been through a lot since the 
recession began more than seven years ago: millions of jobs 
destroyed, household incomes plummeted, hard-earned savings 
wiped out, hopes and dreams shattered. We all welcome the 
progress seen in recent months, but make no mistake, we still 
have a long way to go before every American is able to get back 
on a path to a lifetime of success.
    Right now, roughly 15 million workers are in desperate need 
of full-time jobs, and that does not include the millions of 
individuals so discouraged by meager job prospects that they 
have simply dropped out of the workforce. Meanwhile, working 
families face high health care costs and stagnant wages, and 
they are struggling to send their kids to college and plan for 
    As policymakers, we have an obligation to these men and 
women to do better. They are not willing to accept a new normal 
of anemic growth and flat incomes. Neither should we.
    Yet, that is precisely what the President's budget would 
force us to do. As is often said, a budget reflects priorities, 
and it is clear that the President's priorities continue to be 
more spending, more taxes, and more debt.
    The facts speak for themselves. The President's budget 
includes $547 billion in new spending and a $1.8 trillion tax 
increase--$1.8 trillion.
    Despite taking more money from hard-working Americans, the 
President's budget never balances--never balances. In fact, 
over the next 10 years it would add $6.7 trillion to the 
national debt. This is not a roadmap leading to a stronger 
middle class, but a blueprint for more government at the 
expense of the middle class.
    This flawed approach is reflected in the President's budget 
for the Department of Labor. The administration is requesting 
an 11 percent increase in discretionary spending for the 
Department and an astounding $41.5 billion in new mandatory 
    Will these additional taxpayer dollars be spent reducing 
regulatory burdens, streamlining the bureaucracy, and 
encouraging better enforcement of Federal laws? Not likely.
    Instead, the new money will be spent imposing more rules on 
more Americans, including workers employed by Federal 
contractors, the elderly, and those with disabilities who rely 
on in-home companion care, and men and women who need help 
saving for retirement. It will also be spent creating new 
programs and layers of bureaucracy.
    For example, we recently passed bipartisan legislation 
streamlining the workforce investment system, and already the 
President is demanding five new workforce development programs. 
Congress made it easier for job seekers to acquire new skills 
and get back to work, yet the President is determined to make a 
maze of programs more complex and confusing.
    The President's budget is one of misplaced priorities and 
missed opportunities. We can invest in policies and programs 
that will make a real difference in the lives of countless 
Americans without growing the size, cost, and reach of the 
Federal Government. Middle-class families are being squeezed, 
and the last thing we should do is double down on failed 
    We can do better and we know how to do better. Last year, 
Republicans and Democrats came together to enact meaningful job 
training legislation that will put Americans back to work, and 
we passed important reforms to strengthen the financial 
security of workers and retirees in the multiemployer pension 
    Secretary Perez, I want to take a moment here to thank you 
for your work in that effort. As you know, this was truly a 
bipartisan effort. It was crucially important to the futures of 
literally millions of Americans, where we had to fix those 
multiemployer pension plans.
    And you were absolutely true to your word. You said you 
would step in and help us get some Senate Democrats and, by 
golly, you did. So that was very, very important work, and I 
want to thank you for your work there.
    It is time to find other areas of agreement, like 
modernizing an outdated multiemployer pension system--still 
more work to be done on that multiemployer pension system--
simplifying the regulations surrounding Federal wage and hour 
law, and opening new markets for American-made goods.
    Let's ensure the people's priorities are our priorities by 
rejecting the President's budget and embracing pro-growth 
reforms that help every American enjoy a lifetime of 
opportunity and success.
    I will now recognize the committee's ranking member, Mr. 
Scott, for his opening remarks.
    [The statement of Chairman Kline follows:]

            Prepared Statement of Hon. John Kline, Chairman 
                Committee on Education and the Workforce

    Good morning, Secretary Perez, and welcome back to the Education 
and the Workforce Committee. Thank you for joining us for this hearing 
on the president's fiscal year 2016 budget proposal. We have much to 
discuss in a short period of time, and I intend to keep my opening 
remarks brief so that each member may have an opportunity to ask 
    The American people have been through a lot since the recession 
began more than seven years ago. Millions of jobs destroyed. Household 
incomes plummeted. Hard-earned savings wiped out. Hopes and dreams 
shattered. We all welcome the progress seen in recent months, but make 
no mistake, we still have a long way to go before every American is 
able to get back on a path to a lifetime of success.
    Right now, roughly 15 million workers are in desperate need of 
full-time jobs, and that does not include the millions of individuals 
so discouraged by meager job prospects that they have simply dropped 
out of the workforce. Meanwhile, working families face high health care 
costs and stagnant wages, and they are struggling to send their kids to 
college and plan for retirement.
    As policymakers, we have an obligation to these men and women to do 
better. They are not willing to accept a new normal of anemic growth 
and flat incomes. Neither should we, yet that is precisely what the 
president's budget would force us to do. As is often said, a budget 
reflects priorities, and it is clear the president's priorities 
continue to be more spending, more taxes, and more debt.
    The facts speak for themselves. The president's budget includes 
$547 billion in new spending and a $1.8 trillion tax increase. Despite 
taking more money from hard-working Americans, the president's budget 
never balances. In fact, over the next 10 years, it would add $6.7 
trillion to the national debt. This is not a roadmap leading to a 
stronger middle-class, but a blueprint for more government at the 
expense of the middle-class.
    This flawed approach is reflected in the president's budget for the 
Department of Labor. The administration is requesting an 11 percent 
increase in discretionary spending for the department and an astounding 
$41.5 billion in new mandatory spending. Will these additional taxpayer 
dollars be spent reducing regulatory burdens, streamlining the 
bureaucracy, and encouraging better enforcement of federal laws? Not 
    Instead, the new money will be spent imposing more rules on more 
Americans, including workers employed by federal contractors, the 
elderly and those with disabilities who rely
    on in-home companion care, and men and women who need help saving 
for retirement. It will also be spent creating new programs and layers 
of bureaucracy.
    For example, we recently passed bipartisan legislation streamlining 
the workforce investment system, and already the president is demanding 
five new workforce development programs. Congress made it easier for 
job seekers to acquire new skills and get back to work, yet the 
president is determined to make a maze of programs more complex and 
    The president's budget is one of misplaced priorities and missed 
opportunities. We can invest in policies and programs that will make a 
real difference in the lives of countless Americans, without growing 
the size, cost, and reach of the federal government. Middle-class 
families are being squeezed, and the last thing we should do is double-
down on failed policies.
    We can do better and we know how to do better. Last year, 
Republicans and Democrats came together to enact meaningful job 
training legislation that will put Americans back to work, and we 
passed important reforms to strengthen the financial security of 
workers and retirees in the multiemployer pension system. Secretary 
Perez, thank you for your support as Congress worked on these 
bipartisan efforts.
    It is time to find other areas of agreement, like modernizing an 
outdated multiemployer pension system, simplifying the regulations 
surrounding federal wage and hour law, and opening new markets for 
American-made goods. Let's ensure the people's priorities are our 
priorities by rejecting the president's budget and embracing pro-growth 
reforms that help every American enjoy a lifetime of opportunity and 
    I will now recognize the Committee's ranking member, Congressman 
Scott, for his opening remarks.
    Mr. Scott. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary, for being with us this 
    The United States has emerged from the depths of the Great 
Depression--from a Great Recession, and job creation has 
resumed at a consistent but not robust pace. The question 
before us is whether we will choose to pursue prosperity 
economics or austerity economics.
    What will the new jobs look like? Will they be living-wage 
jobs or poverty-wage jobs? Will our priorities concentrate the 
wealth in the hands of the top 1 percent, or will our policies 
grow and strengthen the middle class?
    The choices that we make here in Congress and here in this 
committee will shape that answer.
    The President's budget recognizes this reality and proposes 
a way to make the investments our country needs by responsibly 
ending sequestration. Democrats and some Republicans agree that 
making mindless cuts mandated by sequestration would be a bad 
policy and would not benefit our economy or our national 
    Now, cuts are fine in the abstract, but when you start 
naming them then it becomes clear how bad this policy actually 
is. As we are extending tax cuts for the wealthiest Americans, 
we are also robbing the country of resources needed for 
education, infrastructure, and research.
    Keeping the sequester means Federal support for pre-K to 
12th grade would be less than we spent back in the year 2000. 
On the other hand, if the automatic spending cuts required by 
sequestration were cancelled, employment would be higher by 
approximately 300,000 to 1.6 million jobs, according to last 
year's CBO analysis.
    The Department of Labor's budget comes to us at a time when 
the private sector has experienced 60 consecutive months of job 
growth, the longest uninterrupted stretch of private job growth 
on record. The economy has created over 200,000 private sector 
jobs for 12 consecutive months, a growth unmatched since the 
    All of these statistics clearly show that we are on the 
right track, but despite this progress, some 17.5 million 
Americans remain unemployed or working part time when they are 
seeking full-time work. Meanwhile, the inequality in this 
country has grown. Most new jobs are low-wage jobs, and the 
fruits of the economic recovery have flowed almost exclusively 
to the top 1 percent, who captured 95 percent of the income 
gained through the first three years of the recovery.
    Department of Labor's priorities and budget request seek to 
narrow this extreme and growing economic inequality in our 
country by closing the pay gap between men and women. The link 
between productivity and wages in our economy has been broken 
for Americans for the past generation.
    We have a chart that shows that up until--from 1973 to 
2013, hourly compensation for a typical worker rose about 9 
percent in real terms while productivity increased 74 percent. 
This means that workers have been producing far more than they 
receive in their paychecks and the benefit packages from their 
employers. Prior to that time frame, as productivity went up 
wages were going up.
    Standard and Poor's, one of the companies that rates the 
credit-worthiness of the government and corporate debt for Wall 
Street, has studied whether the U.S. economy would be better 
off with a narrower income gap. Standard and Poor's has reduced 
its projections for annual growth from 2.8 percent down to 2.5 
percent due to widening inequality.
    Again, economists on Wall Street are telling us that 
extreme inequality is holding back economic growth.
    The next chart we have illustrates the extraordinary rapid 
growth of annual wages for the top 1 percent compared to 
everybody else. Top 1 percent wages grew 138 percent, while the 
bottom 90 percent grew just 15 percent, from 1979 to 2013.
    What we are discussing today is whether we need to change 
the policies that caused the majority of the gains of our 
economy to concentrate disproportionately at the top on the 
premise that it eventually trickles down to the rest of us, or 
whether we need to adopt policies and budgeting that will make 
public investments in training, infrastructure, and research in 
order to produce sustainable growth.
    We know that there are concrete steps that we can take in 
order to move in the right direction, which should be the 
national policy that anybody working full time should be able 
to earn enough to be above the poverty line. A raise to the 
minimum wage would do this, and it is the right thing to do. 
The minimum wage adjusted for inflation would be over $18 an 
hour, had it kept pace with productivity.
    Another concrete step we can take to protect retirees and 
their hard-earned income is to ensure that fellow Americans can 
rest with dignity after a lifetime of hard work. While still on 
the job, we need to make sure workers enjoy protections they 
need to stay safe and healthy.
    Economic growth and strong regulatory protections are not 
mutually exclusive. And let's not forget that it was the 
absence of regulation that allowed Wall Street to run amuck and 
cause the credit freeze in 2008 and destroyed millions of jobs.
    And finally, I know that the secretary remains focused on 
what works to prepare our nation's workforce for the jobs of 
today and, more importantly, the jobs of the future. These 
priorities are reflected through the Department's budget, which 
focuses on expanding the middle-class in many ways, including 
funding summer jobs, opportunities for disconnected youth, 
apprenticeships, and programs that expand access to in-demand 
    So, Mr. Secretary, we look forward to learning more about 
your department's agenda and your vision for a more prosperous 
economy and a more prosperous middle-class.
    Thank you, Mr. Chairman. I yield back.
    [The statement of Mr. Scott follows:]
    Chairman Kline. I thank the gentleman.
    Pursuant to committee rule 7(c), all members will be 
permitted to submit written statements to be included in the 
permanent hearing record. And without objection, the hearing 
record will remain open for 14 days to allow such statements 
and other extraneous material referenced during the hearing to 
be submitted for the official hearing record.
    It is now my pleasure to introduce our distinguished 
    As I said, Mr. Secretary, welcome back. I think you are 
well known to all members of this committee.
    I was looking here and it says that you were sworn in as 
the 26th U.S. Secretary of Labor on July 13, 2013. The time is 
flying by.
    And prior to this confirmation, Secretary Perez served as 
assistant attorney general for civil rights at the U.S. 
Department of Justice and as the secretary of Maryland's 
Department of Labor, Licensing, and Regulation, and those are 
just two of his many assignments in a very distinguished 
    As is now the practice House-wide, I will ask our witness 
to stand and raise your right hand.
    [Witness sworn.]
    Let the record reflect the witness answered in the 
    And I am sure ``absolutely'' is exactly the right response, 
Mr. Secretary.
    Before I recognize you to provide your testimony let me 
briefly remind you of our lighting system. And I know you know 
very well about the green, yellow, and red lights; this is more 
for my colleagues than for you.
    I will be very, very tolerant for your opening remarks and 
your responses. We really do want to hear what you have to say. 
As disappointed as many of us may be with the President's 
budget, we nevertheless are really looking forward to your 
    But, I will remind my colleagues that when we get to 
questions and answers, I will be strictly adhering to the five-
minute rule unless we actually reduce the time. We have a hard 
stop for this hearing at 12 o'clock. The secretary has to 
    So please, my colleagues, be aware of that and be 
thoughtful of your colleagues.
    Mr. Secretary, you are recognized.

                   OF LABOR, WASHINGTON, D.C.

    Secretary Perez. Good morning. And thank you, Mr. Chairman.
    And thank you, Ranking Member Scott, and all the members of 
the committee.
    It is wonderful to be back with you. And as you correctly 
point out, we have been able to find common ground on a lot of 
areas of critical importance to this nation, and I look forward 
to continuing that effort moving forward.
    I appear today with a great sense of optimism about the 
direction of our economy and the role the Department of Labor 
can play in sustaining and accelerating this recovery. We have 
come a long way since the Great Recession.
    As has been noted, private employers have now added 12 
million jobs over the last 60 months. That is 60 consecutive 
months of private sector job growth. Last year was the best 
year we had since the late 1990s.
    The unemployment rate is now 5.5 percent, its lowest since 
the spring of 2008. And especially when we look at the last 
couple years, not only the quantity of jobs, but the quality of 
jobs are moving in the right direction.
    So without question, the wind is at our back. But we also 
know that it is not time to spike the football because there 
are many pieces of unfinished business, including putting more 
people back to work, growing real wages to higher levels, and 
providing continued help for the long-term unemployed.
    We need to make sure that the economic progress that we are 
seeing results in shared prosperity for all, and that is 
exactly what the President's budget is seeking to do: to create 
an economy that works for everyone--an economy based on broad 
prosperity. And that prosperity and that vision starts with 
helping people get the skills and training they need to succeed 
in 21st century jobs.
    Each year, on average, our network of roughly 2,500 
American Job Centers serves about 14 million people, including 
a million veterans, through our core workforce programs. And we 
are serving them well. Fifty-five to 60 percent of those who 
come to AJCs without a job are working within three months of 
leaving our programs.
    The outcomes are even better for those who get training 
through the workforce system. About 80 percent of them find 
work within three months.
    In 2014, we put roughly $1 billion in job-driven grant 
money on the street, all of it designed to help people upskill 
in a way that helps them move into jobs that are available now 
or will soon be available. We are doing more to coordinate and 
integrate our workforce programs with those of other Federal 
agencies. We are imploding stovepipes to make our government-
wide efforts that much more efficient and effective.
    Last July, Congress passed in overwhelmingly bipartisan 
fashion the Workforce Innovation and Opportunity Act, which is 
really the most significant reform of the workforce system in 
15 years.
    I want to again thank Chairman Kline, Congresswoman Foxx, 
and all the members of this committee--Ranking Member Scott--
for your efforts and leadership. It is further proof that 
cultivating our human capital is not a Democratic idea or a 
Republican idea, but it is simply a good idea.
    And I know that many stakeholders are anxiously awaiting 
our proposed WIOA implementation rules. They are at the Federal 
Register and we expect to have them published very soon, and we 
look forward to people's input on those proposed rules. It has 
been a remarkable labor on behalf of so many people at the 
Department of Labor.
    This work will allow us to continue the transformation of 
the workforce system to prepare people for the jobs of 
tomorrow. It helps us to continue building what I call the 
skills superhighway, with on-ramps and off-ramps, where people 
can pick up skills and credentials on their way to the 
destination, which is a middle-class job.
    And with WIOA we are further strengthening our job-driven 
approach to training, building unprecedented partnerships with 
employers, connecting businesses that want to grow with workers 
that want to punch their ticket to the middle class.
    We are match.com, Mr. Chairman. That is what we do at the 
Department of Labor. We connect job seekers who want to punch 
their ticket to the middle class with businesses who want to 
grow, using the secret sauce of training, community college, 
other partnerships, your great offices, and that is why we are 
moving in the right direction.
    And one of the things that WIOA is going to help promote is 
one of the most effective strategies I have seen for workforce, 
and I have chatted with Congresswoman Foxx a lot about this, 
and that is apprenticeship. Despite the effectiveness of 
apprenticeship, for all too long I believe that we have 
devalued apprenticeship in this country, especially relative to 
our global competitors.
    And the fact of the matter is you don't necessarily need a 
four-year degree to punch your ticket to the middle class. I 
refer to apprenticeship as the ``other college,'' except 
without the debt. And later this year we are going to award 
$100 million in American apprenticeship grants, which are 
designed to kick-start new apprenticeship programs and take 
successful models to scale.
    With these apprenticeships, we are looking to expand not 
simply in the traditional skilled trades, which have great 
application, but in emerging fields such as I.T., cyber 
security, health care, logistics, and the like. So we will 
continue that work, and I think that is work that we can 
continue on a bipartisan basis.
    Even as the economy has recovered impressively, we still 
have a lot of work to do lifting wages, and to create that 
opportunity and shared prosperity I believe it is more 
important than ever that we address wages in a number of 
different ways, starting with raising the minimum wage.
    Public opinion is strongly in favor of it. Last November, 
red states and blue states, voters expressed very strong 
support for increasing the minimum wage.
    Nobody who works a full-time job should have to live in 
poverty. And we are continuing to work through executive action 
and through work with our state and local partners to raise the 
minimum wage, but still, there is no substitute for Federal 
legislation that would give low-wage workers in all 50 states a 
hard-earned, well-deserved raise.
    We are also working to modernize the nation's rules on 
overtime, which haven't kept up with inflation or with changes 
in the economy. Too many people are getting a raw deal, working 
60-, 70-hour weeks and not getting that time-and-a-half. In the 
coming months we will release a new overtime proposal, one that 
reflects broad input from a range of stakeholders, and we look 
forward to hearing comments from all key stakeholders.
    We are also charged at the DOL with protecting workers on a 
number of fronts. We enforce the nation's wage and hour laws, 
and we do so in the most strategic way possible, combining 
aggressive enforcement with compliance assistance and 
aggressive education.
    To ensure that we are using our resources efficiently, we 
use data to identify those workers who are most vulnerable and 
employers most likely to be violating the law. And the results 
have been very, very telling. Since Fiscal Year 2009, we have 
recovered a total of over $1.3 billion for more than 1.5 
million workers.
    Our Occupational Safety and Health Administration and our 
Mine Safety and Health Administration continue their critical 
work to make sure we prevent workplace injuries, illnesses, and 
fatalities. One of the basic rights that every worker has is 
that when they go to work in the morning they ought to come 
home safe and sound, and that is exactly what we do through the 
work of OSHA and MSHA.
    Helping people secure a dignified retirement after a 
lifetime of hard work is a critical element of our mission. And 
toward that end, we are working on an updated regulation to 
ensure that financial advisors provide retirement advice that 
is in their client's best interest.
    The biggest decisions in life fall into one of three 
categories, I have often found: medical, legal, and financial. 
Your doctor and your lawyer are obligated to give you informed, 
unbiased advice, to look out for your interests. You should 
have the right to expect the same from the professional whom 
you have trusted with your retirement planning.
    Many financial advisors already have taken this oath to 
look out for their customers first, and we think every 
financial advisor can and should do this. And we look forward 
to hearing input from everybody--continued input--when we put 
our rule out.
    In conclusion, thanks to the resilience of our workers, the 
ingenuity of our businesses, leadership from every level of 
government, including this committee. We have emerged 
successfully from the worst times of our economic crisis of our 
lifetime. But we still have a lot of work to do, and we can't 
settle for an economy that simply provides an opportunity for a 
    Shared prosperity is, indeed, our north star, and America's 
promise has always been that everyone, through hard work and 
responsibility, should have an opportunity to succeed. Keeping 
that promise is what gets me out of bed every morning and what 
makes me love my job.
    And with that, Mr. Chairman, I look forward to hearing and 
answering any questions that you and members of the committee 
have. Thank you very much.
    [The statement of Secretary Perez follows:]
    Chairman Kline. Thank you very much, Mr. Secretary. I will 
start questioning.
    We have already talked in opening comments and brief 
discussion before the hearing started about the Multiemployer 
Pension Reform Act and the work that was taken to get that 
done. You are the chairman of the Pension Benefit Guaranty 
Corporation's Board of Directors, in your role as Secretary of 
Labor, and so you are watching the health and welfare of the 
PBGC as well as looking at the health and welfare of these 
retirement plans.
    Based on recent reports from the PBGC and the Congressional 
Budget Office, even after the enactment of the Multiemployer 
Pension Reform Act, further reform in this area is needed to 
strengthen and modernize the system, and we have talked some. 
Can you take a minute or two here and tell us what you think 
will happen if we are unsuccessful in our efforts to modernize 
the system and put PBGC on sounder financial footing?
    Secretary Perez. There is indeed, I think, a multiemployer 
crisis, and I have had many conversations with you and with 
Republican and Democratic members. And time is not our ally.
    As you and I have discussed, we have what I call about four 
options: We have a bad option; we have a very bad option; we 
have a very, very bad option; and then we have the 
cataclysmically bad option. And as time goes by, the bad option 
gets removed from the table and we have a discussion about 
whether we should do the very bad option or the very, very bad 
option or the cataclysmically bad option.
    And I appreciate the actions that were taken last year. You 
and I have both had discussions about the fact that there is 
still more work to do, and we look forward to working in a 
bipartisan fashion and in an inclusive fashion to make sure we 
hear the views of all stakeholders, because as the chair of the 
PBGC I take that responsibility seriously, and I think, working 
together, we can address these issues in a way that is fair to 
    Chairman Kline. Okay. I think that, I mean, we took some 
steps in the Multiemployer Pension Reform Act to increase 
premiums for the PBGC and put it on sounder footing, but it is 
this report from the CBO and the PBGC that--pointing out how 
still deep in the hole they are.
    Secretary Perez. There is more work to do. It is undeniable 
that there is more work to do, Mr. Chairman.
    Chairman Kline. Okay. Thank you.
    Let me move to something else you and I have talked about. 
It is not fair to everybody because you and I have had some of 
these discussions, so the advantage for you, Mr. Secretary, is 
you have had a preview.
    The disadvantage is I still don't have the answer I like. 
We held a hearing--the committee held a hearing on the so-
called Fair Pay and Safe Workplaces Executive Order, which some 
of us have taken to calling the Blacklisting Executive Order. 
We heard from witnesses who raised really serious questions and 
concerns about the proposal.
    Witnesses raised legitimate questions about the need for 
such a proposal since there is already in place longstanding, 
well-defined procedures for evaluating Federal contractors and, 
if necessary, preventing them from getting Federal contracts. 
We also heard concerns about the process--about due process, 
and about the process, and unreasonable burdens and how this 
would even work.
    And again, you and I had a discussion. This is not entirely 
in your basket, but there is a substantial piece here. What 
sort of analysis has the Department of Labor done to ensure 
that this new bureaucracy doesn't overburden contractors and 
disrupt the whole Federal procurement system?
    Secretary Perez. The executive order that you are referring 
to is predicated on the notion that procurement is a privilege, 
not a right. And if you are engaged in bad behavior, you should 
forfeit that privilege to do business with the Federal 
    The vast majority of contractors comply with the law, and 
so, as I understand the process that will be underway, you will 
be required to answer a question, ``Do you have compliance 
issues in the area of labor laws and other related laws that 
are outlined in the executive order?'' For the vast majority of 
contractors the answer will be no, so their responsibility will 
be to check a box.
    For others, there a whole scheme of compliance, and the 
goal here is to actually promote compliance with the law, as 
opposed to do the gotcha game. And that is why these compliance 
officers are, I think, a very important part of the process 
moving forward. And part of the role at the Department of Labor 
is not only to have a cadre in the Department of Labor--but to 
work across the Federal Government to ensure that compliance.
    Chairman Kline. Mr. Secretary, I am not sure that is the 
level of analysis I was looking for, because I really do have 
some great concerns about how this is going to work, where you 
have contractors and subcontractors, and they have got 
subcontractors. A contractor has to be responsible for the 
performance of the subcontractor. I just think it is very, very 
complex, and I hope that the Department--your department--will 
look into the details of this.
    Secretary Perez. Well--
    Chairman Kline. My time has, indeed, expired.
    And I will yield to Mr. Scott for five minutes.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Secretary, can you--one of these days we are going to 
get around to comprehensive immigration reform. Meanwhile, can 
you tell us what happened to the H-2B program and what you are 
going to do about it?
    Secretary Perez. Sure. On March the 4th a Federal court in 
Florida ruled that we lacked the authority at the Department of 
Labor to issue regulations in the H-2B program.
    As someone who was a former labor secretary in Maryland, I 
am very familiar with the H-2B program. It has been an 
important part for folks working on the eastern shore.
    And what we did was we have immediately taken steps working 
with the Department of Homeland Security, and we have done 
three things. We filed a motion day before yesterday to stay 
the proceeding--to stay the court's ruling so that we can 
permit those who have already been in the application process 
to continue to apply--because every day that the program is 
shut down is a day that can have significant economic harm.
    We have also made a commitment to putting in place an 
interim final rule by April the 30th, and then once that rule 
comes out, then that would enable the program to operate. And 
the ``we'' in that sentence is it would be a joint rule with 
the Department of Homeland Security and the Department of 
    And then thirdly, the Department of Homeland Security has, 
as of, I believe, yesterday, reopened their application 
process, because they had a lot of applications that we had 
approved, but then when the court shut it down they had to shut 
down, as well. And yesterday they reopened so that there are 
roughly 1,000 or 2,000 applications that were stuck that we 
hope to unstick.
    So this has been subject of litigation since about 2008. H-
2B has been a lawyers' full employment act. Our goal is to try 
to fix the problem once and for all. We are very mindful of the 
time sensitivity and we think that these actions will enable us 
to get a program up and running as soon as possible.
    Mr. Scott. Thank you.
    Can you mention what the research shows about minimum wage, 
in terms of not only getting people above the poverty level, 
but also the effect on the economy and what research shows 
about potential job loss?
    Secretary Perez. Well, the, you know, minimum wage--you 
know, when people get an increase in the minimum wage, what 
they do is they spend it. It is very much akin to what Henry 
Ford did over 100 years ago when he doubled the wages of people 
on the assembly line. He did that for two reasons: He had over 
300 percent attrition; and he understood that when people make 
more money, they spend it in their communities and it creates a 
virtuous cycle.
    There are literally hundreds of studies that document the 
issue of minimum wage and job loss, and the overwhelming weight 
of the evidence demonstrates that when you have reasonable 
increases in the minimum wage, such as the bill that was 
proposed in the last Congress, you have literally little or no 
effect, and at the same time, you are helping millions of 
workers who can get above the poverty line.
    Mr. Scott. Thank you.
    What does your budget do to help at-risk and disconnected 
youth, particularly during the summer?
    Secretary Perez. We have several areas of focus. Our WIOA 
youth formula--we are requesting $873.4 million, and under the 
new WIOA bill, 75 percent of these funds must be spent on out-
of-school youth.
    Our request for YouthBuild is $84.5 million. YouthBuild is 
    Obviously Job Corps is a huge asset for what we do for at-
risk young adults. Our Reintegration of Ex-Offenders serves 
both adults and youth. And WIA formula dollars can be used in 
the summer job context.
    So that is an area where local workforce boards can make 
those decisions and help for the summer job programs.
    Mr. Scott. Can you say a word about what sequestration will 
do to your ability to protect workers, worker safety, develop 
regulations and inspections, and generally protect workers?
    Secretary Perez. Well, sequestration, I mean, for instance, 
in the workforce context, you know, we have got a lot of folks 
who are still coming to American Job Centers, and sequestration 
meant that there were about a million people who wanted our 
services who couldn't get our services. In a time when we are 
talking about jobs, jobs, jobs, you know, match.com wants to be 
match.com. But, you know, when you have a size 12 need and a 
size eight budget, there are people who are in need who don't 
get that.
    And similar situations in other aspects of our DOL work.
    Mr. Scott. Thank you, Mr. Chairman.
    Chairman Kline. Thank you.
    Dr. Foxx, you are recognized for five minutes.
    Secretary Perez. Morning.
    Ms. Foxx. Good morning.
    Secretary Perez. Good to see you again.
    Ms. Foxx. Thank you, Mr. Chairman.
    And thank you for being here, Secretary Perez. I want to 
follow up on your mention of Job Corps, actually.
    Recently, it has come to the committee's attention that 
since the passage of WIOA, approximately two-thirds of the 
competitively bid Job Corps contracts have been or are being 
scheduled for contractor selections in advance of the law's 
effective date and promulgation of regulations implementing the 
new statutory requirements for contractor quality. As noted in 
the letter Chairman Kline and I sent you earlier this week, we 
are concerned the Department has not begun implementing these 
enhanced selection criteria when selecting entities to operate 
Job Corps centers.
    One only need look at the recent contractor performance at 
the North Texas Job Corps Center to fully realize the 
devastating problems that can arise when a contract is awarded 
to a company ill-prepared to successfully operate a Job Corps 
center. It is critical that the new statutory provisions be 
implemented as new contracts are being awarded.
    And I have always found that when you need new money you 
look within your own organization for ways that you can more 
effectively deliver the services, rather than asking for new 
money. And so we would like to know from you--what is your 
response to our request in the letter and the need to have more 
accountability and more effective programs run by Job Corps.
    Secretary Perez. The letter you are referring to I received 
last night and we will certainly respond in a timely fashion.
    It was slid under my door, Mr. Chairman.
    Chairman Kline. [Off mike.]
    Secretary Perez. Okay. I just wanted you to know that.
    Chairman Kline. [Off mike.]
    Secretary Perez. No, by my staff it was slid under the 
    And let me say I totally agree with you, Congresswoman 
Foxx, that Job Corps contractors need to be subject to 
accountability, and when they don't do a good job we need to 
take action. The North Texas center that you are referring to, 
we revoked that contract as a result of serious issues of 
    I also agree wholeheartedly with what is in WIOA. One of 
the provisions in WIOA basically says that contractors that are 
high-performing should be able to compete. I completely agree 
with that proposition.
    As I understood the letter--and again, I haven't had a 
chance to digest it fully--I think it says that--or I think it 
is concerned that we are speeding up the letting of contracts 
to get in before the effective date. I am flattered that there 
is a perception that our procurement process is moving with 
undue alacrity.
    Chairman Kline. [Off mike.]
    Secretary Perez. I can assure you that, you know, we are 
making no effort to speed up contracts in an effort to avoid a 
new provision of WIOA because I think it is a good provision. 
And we will give you a much more robust response.
    I also believe in accountability, and we have taken a 
number of steps. That is a very important question that you 
    When I was in state government we regulated the state 
banks, and we instituted a--what I call a risk-based assessment 
system, because not all banks are created equal. Some have more 
risk factors than others.
    Similarly, when I got here, Job Corps--every Job Corps 
center was looked at on the same timeframe. Not all Job Corps 
centers have the same risk factors.
    And so we have put in place a risk-based assessment system 
that I think will better enable us to spend more time with the 
centers that need our attention and less time with the centers 
that are firing on all cylinders. That is what risk-based 
accountability and oversight, I think working at its best, 
    Ms. Foxx. Well, you anticipated the next question I was 
going to ask, actually. So I just want--quickly--so do you then 
have in your risk-based management system a time to cut these 
people off, in terms of saying, ``Okay, there is going to come 
a time when we don't think you can be fixed''?
    Secretary Perez. Oh, well, as you know, one Job Corps 
center was shut down as of February the 28th in Oklahoma. We 
are currently reviewing, and our goal is to make sure that 
everybody can succeed.
    I don't want anyone--I don't want to set anyone up for 
failure. We want to give tools to everyone to help them 
succeed. And I have seen improvement in a number of centers.
    But when there is chronic underperformance, we will not 
hesitate to take action. And I don't want to prejudge the 
process, but I expect that we may be making further 
recommendations in the context of chronically low-performing 
Job Corps centers.
    Because it is all about the kids. I mean, we have got to 
make sure everybody--anywhere you go, you should be getting 
top-flight service.
    Chairman Kline. Gentlelady's time has expired.
    Mr. Polis?
    Mr. Polis. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary.
    Secretary Perez. Morning, Congressman.
    Mr. Polis. Welcome to the committee.
    As we all know LGBT Americans still face historically--
historic and current discrimination in the workplace, and I 
want to acknowledge your great work and show appreciation on 
behalf of the LGBT community for the effort the Department of 
Labor, under your leadership, has gone through in implementing 
the President's executive order to prohibit Federal contractors 
from discriminating on the basis of sexual orientation and 
gender identity.
    Can you speak to how the work you did issuing a final rule 
in December of last year helped to fully implement and comply 
with your duties and responsibilities under the law?
    Secretary Perez. Yes. First of all, I want to thank you for 
your leadership in this area. You know, I believe that people 
should be judged by the quality of the work they do in a 
workplace, and not by any other irrelevant factors. And I think 
this is--the work that we are doing in this area is critically 
    And the executive order was July of last year, and we have 
been moving forward through our OFCCP office to help 
contractors prepare for compliance. And I am confident that 
they can come into compliance.
    When we worked on other issues, we have been able to work 
very effectively to help educate. Because I would much rather 
prevent than have to come in at the back end and enforce. So I 
am very confident that we can do that in this context.
    Mr. Polis. Thank you. And your task is assisted by the fact 
that such discrimination is against the law in 20-some states 
already, where contractors in those states, at least, would 
already presumably comply with this.
    I wanted to talk about civil penalties for a moment. Your 
budget proposes to strengthen several of the civil monetary 
policies that the DOL could impose when a law is violated. You 
are acting on recommendations by the GAO and the Administrative 
Conference of the United States by proposing to improve the 
Federal Civil Penalties Inflation Adjustment Act.
    As one example, FLSA has a $1,100 maximum fine per willful 
and repeat violation, which is ridiculously low. And is DOL 
considering whether to raise that fine? And if so, to what 
    And can you speak to the importance of having civil 
monetary penalties to deter bad behavior and to ensure that our 
workforce protection statutes like FLSA, OSHA, and ERISA are 
followed across our country?
    Secretary Perez. I very much appreciate that question, and 
I think our civil money penalties need to be modernized to 
reflect the realities of the 21st century. Too often, our civil 
money penalties are cost-of-doing-business fines.
    In the whistleblower context, Congress has acted in a 
bipartisan fashion to modernize whistleblower laws so that they 
have gotten better and better and given more rights to 
courageous whistleblowers. There is still work to do there.
    But we had a case in 2001--an OSHA case--where a tank full 
of sulfuric acid exploded in a refinery. The victim's body was 
literally dissolved. And the OSHA penalty was $175,000.
    The same incident, some of that sulfuric acid flowed into a 
nearby stream, killing fish and crabs. The EPA fine was $10 
million. The fine for the dead person was $175,000. I think we 
need to correct that.
    And when I talk to businesses who play by the rules, they 
tell me that we need to correct this because they are playing 
by the rules, and those who cheat do so because of the cost-of-
doing-business fines. We don't pack enough punch.
    Mr. Polis. Speaking of playing by the rules, another area 
that some businesses don't play by the rules is by 
misclassifying their employees as independent contractors. And 
I am sure you are familiar with the Oak Grove Cinemas, 
Barrington Management, and Barrington Venture LLC case, where 
employees doing general maintenance and construction were 
working 60 to 68 hours a week, being allocated to different 
entities that were all under the same ownership under one 
contract, were denied overtime. The employer was fined $512,000 
in back wages.
    And this is far too common. So how can we do more to deter 
this kind of activity, rather than just try to chase after the 
    Secretary Perez. One thing we have been doing is working 
very closely with states, and we have entered into MOUs with 20 
states, ranging from Utah and Alabama to Massachusetts, because 
this problem is not a red or blue problem, it is a national 
problem that has three sets of victims: the worker him- or 
herself; the employers who play by the rules--they can't 
compete for contracts, they can't compete for businesses 
because they pay their taxes; and then the tax collector, 
because when a business is cheating, they are not paying their 
workers' comp taxes, my U.I. taxes go up because the pool has 
gotten smaller.
    And so those three types of victims are why we are working 
with states across the country on this issue. It is a very 
significant problem.
    I believe that there is an important place for independent 
contractors, but I also believe that there is ample evidence 
that has been abused.
    Mr. Polis. Thank you. I yield back.
    Chairman Kline. Gentleman's time has expired.
    Dr. Roe, you are recognized.
    Mr. Roe. I thank the chairman.
    Secretary Perez. Morning.
    Mr. Roe.--thank you, Mr. Secretary, for the work you helped 
us with on the multiemployer pension plan. I think that was a 
great piece of work. I want to reaffirm what the chairman said, 
and I appreciate that we still have a lot of work to do.
    One of the things I want to talk about is to go to the 
rulemaking that we are looking at with the fiduciary rule. And 
we wrote a letter, the chairman and I did, to your department 
asking for information. And we got back a letter that just gave 
some dates that you met with the SEC chair or talked to her, 
but really no information.
    We have a constitutional responsibility for oversight, and 
so we would like to get some data, what happened in those 
meetings. Would be good for us to know what went on, and would 
you please provide those documents? That would be number one.
    Number two, have you read the Furman Memo? The Furman Memo, 
from the--
    Secretary Perez. I have read the report from the CEA on the 
costs of conflicted advice.
    Mr. Roe. Well, exactly. That is what this memo is. And 
basically, what it says--I have read this memo, and basically 
what it says, out of the Council of Economic Advisers, is that 
investment advisors basically move this money from, say, a 
401(k)--I mean, from a company-owned plan to a 401(k) or an IRA 
basically just to make money. They encourage people to do that, 
they churn the accounts, obviously buy and sell.
    And there are several types of advice that you can get. I 
have all three of those accounts. I have a managed account, I 
have just a standard 401(k), and then I have one here as a 
congressman. And the least advice I have gotten, and I think 
the poorest result I have had, is the one I have here in 
Congress, where I can't--I basically can't talk to anybody.
    So the question is, do you believe what that memo said 
about what the investment advisors are actually doing--that 
they are doing that? And look, there are bad actors out there. 
We all know Bernie Madoff exists, and we know that people still 
rob banks and there are laws against that.
    But most of these advisors I think act in the best interest 
of their clients or their clients move when they see what the 
results are. So the free market system works.
    And this Furman Memo I thought was outrageous when I read 
it. Any comments on that?
    Secretary Perez. Sure. I wrote down all of your questions. 
Let me first start by saying I have been thinking and praying 
for you over recent weeks.
    Mr. Roe. Thank you.
    Secretary Perez. Secondly, we look forward to working with 
you on the request for documents. And I certainly respect the 
oversight responsibilities of committees. I also, as someone 
who entered Federal service in the Bush Administration, worked 
in Republican and Democratic administrations, I also know 
that--and I know you appreciate--that when you are having 
deliberations on what to do and you are having conversations, 
that there is also deliberative process issues, and we look 
forward to continuing those discussions with you.
    I believe that financial planners can and ought to do what 
lawyers and doctors do. I am the youngest of five, a lawyer; 
and I have got four siblings and they are all doctors. And we 
are all required to--I promised I would never be a plaintiff's 
personal injury lawyer, and I did keep my promise.
    Mr. Roe. Thank you. Only one turned to the dark side. That 
is good.
    Secretary Perez. And my dad was a doctor, and I was the one 
black sheep, I will concede for the record, Congressman.
    And, you know, lawyers and doctors look out for their 
clients' best interests. If I were afflicted with a serious 
illness I don't want my doctor telling me what is suitable for 
me; I want my doctor telling me what is best for me. And that 
doctor has that requirement to do that.
    And I talk to people in the financial space who are already 
doing--have--they are certified financial planners, they have 
taken the oath to look out for their clients' best interests, 
and, you know, they tell me that the playing field isn't level.
    And Jack Bogle, I think, said it best--the chairman of 
Vanguard, or founder of Vanguard. ``I have been in the business 
64 years,'' he said, ``and I learned that when you take care of 
your customers and put them first it is best for the customers 
and it is great for business.''
    Mr. Roe. My time is about to expire, and the CEA memo said 
the IRA marketplace lacks meaningful regulation. Well, what 
about FINRA and the SEC?
    And I think probably your department should work with the 
SEC if there is going to be a change in the fiduciary rule and 
not just unilaterally do it. I think the SEC really is the 
place that should be done more than DOL. Any--
    Secretary Perez. Well, our letter certainly outlines the 
extensive collaboration we have had with the SEC and will 
continue to have with the SEC in this process. As Chair White 
said yesterday at a meeting she was at, we have worked 
together. In the end, we have statutory schemes that we need to 
make sure we are vindicating.
    Mr. Roe. Okay. Well, other than this memo, I have been 
able--I tried last night for hours on the Internet to try to 
find out where the data came from that was in this CEA memo. I 
couldn't find it.
    Secretary Perez. Well, I look forward to talking to you 
about that, because I actually think it--
    Chairman Kline. Gentleman's time has expired.
    Ms. Wilson, you are recognized.
    Ms. Wilson of Florida.--thanks to the ranking member for 
today's hearing.
    Mr. Secretary, I am so pleased to see you today. I have 
worked so closely with you since I have been in Congress, and I 
look forward to working with you as we move forward.
    I want to thank you for coming today and speaking to us 
about these very important issues, especially extending 
emergency unemployment compensation and raising the minimum 
wage. I love what you have presented regarding community 
colleges and also reintegrating ex-felons back into the 
workforce, which is so, so important.
    Everyone needs a job, and I think the mantra of this 
Congress should really be ``jobs, jobs, jobs.'' I have said it 
so many times on the floor.
    Congress needs to get real about passing a serious full 
employment agenda, paying workers a fair wage for the hours 
worked, and raising the minimum wage. That is the least we can 
    Now is the time to invest in the people who keep our 
economy running. If we raise the minimum wage people will have 
more money to spend, companies will be able to create more 
jobs, people will have higher salaries and pay more in taxes, 
and American workers will be happier and healthier. Everyone 
wins. America wins.
    I hope as a body we can come together and do that.
    Mr. Perez, last year I shared with you my concern that the 
Department of Labor should be very, very careful in crafting a 
fiduciary rule that would not impact the availability of 
affordable investment advice.
    As you know, I represent South Florida. It is a retirement 
community. And so retirement security is an important issue for 
me and for my constituents. We have a better chance of 
protecting our retirements when we sit down with a trained 
professional who can answer the complicated but important 
questions we have about our savings.
    So, as always, I plan to work with you on the proposed rule 
very closely, and I want to make sure that I have an open line 
of communication with you as I work with any ongoing concerns I 
may have. I want to be able to hear from you as I hear from my 
constituents, and we can become a team to work out a solution.
    The President's budget points out that many of our 
employment and safety laws lack strong civil penalties, and I 
have a bill that I am filing called Protecting America's 
Workers Act. Many of these rules are woefully out of date.
    The maximum penalty for repeated and willful violations of 
Federal minimum wage and overtime laws is only $1,100. The 
maximum OSHA fine for a serious violation that causes an injury 
or death is only $7,000. In fact, the last time OSHA's 
penalties were increased was back in 1990, and they have not 
been adjusted for inflation in 25 years.
    Do we need to update OSHA's penalties, Mr. Secretary? What 
about updating penalties under our wage and hour laws?
    Secretary Perez. Great. Well, I look forward to working 
with you on all the issues you addressed.
    I agree with you about small investors. I think small 
investors are people who are most in need of advisors who are 
looking out for them because the margin of error for them is 
zero. So I look forward to working with you on that.
    As I said to Congressman Polis before, we have to bring 
civil money penalties into the 20th century--21st century, and 
that includes wage and hour, that includes OSHA, and I look 
forward to working with you on those issues.
    Ms. Wilson of Florida. Thank you. We will be talking.
    Chairman Kline. Gentlelady yields back.
    Mr. Thompson, you are recognized.
    Mr. Thompson. Thank you, Chairman.
    Mr. Secretary, thank you so much for being here.
    Secretary Perez. Morning, sir.
    Mr. Thompson. Good morning. Thank you for your comments 
regarding apprenticeship programs, too. Certainly that is a 
great opportunity to--
    Secretary Perez. I agree.
    Mr. Thompson.--great pathway to opportunity, and I look 
forward to working with you on that, as well. I am hoping that 
we can see you do something rather robust as we look at 
reauthorizing the Perkins Act, too, in terms of 
    Secretary Perez. Absolutely.
    Mr. Thompson. I have got--one was--is just a request, a 
follow-up request, and the other a question for you. Kind of a 
unique situation, that your office, I think, is currently--we 
haven't heard back from yet on--November 18th of last year my 
office--we initiated a request for a formal ruling regarding 
the MSHA issue, actually affecting Old Order Amish contractors 
who are to wear hard hats on job sites despite religious 
    It is a confusion within the Department that our inquiry 
was based on. MSHA's ruling runs contrary to the existing OSHA 
ruling exempting the Amish from wearing hard hats, and that 
dates back to 1994.
    Mr. Secretary, my constituents being affected by the MSHA 
regulation are committed to following the law. However, the 
discrepancy between MSHA and OSHA is not just an issue of 
religious freedom; it seems like one hand is not talking to the 
    It has been five months since any inquiry, and I have a 
copy of the letter with me and available. I would just 
appreciate you looking into the issue so we can--whatever the 
response is--we can just get a more timely response back to the 
    Secretary Perez. Well, first of all, I owe you an apology 
because the delay is unacceptable and that is my 
responsibility. And I am going to get back to you in no more 
than a week.
    Mr. Thompson. Okay.
    Secretary Perez. When this came to my attention--it is a 
fascinating issue. There are two very compelling, competing 
considerations. I take a back seat to no one in my commitment 
to respecting religious freedom. At the same time, workplace 
safety is a pretty big thing too.
    And so I commit to getting back to you in the next week. We 
have a team of folks who are not only looking at the MSHA issue 
that you presented, but looking at our entire array of 
workplace safety rules because we want to get it right.
    Again, I appreciate the patience that you have shown and I 
apologize for the delay.
    Mr. Thompson. Well, I appreciate your due diligence. It is 
not an easy question, there is no doubt about it. Not an easy--
to resolve. So thank you for that.
    Wanted to touch on--September 12, 2013, OSHA proposed to 
reduce the silica permissible exposure limit to 50 micrograms 
of silica per cubic meter of air for all industries. Last week, 
NIOSH published a silica report showing a dramatic downward 
trend in incidents of silicosis.
    In the regulatory proposal that OSHA had they stated that 
30 percent of silica samples in the general industry were above 
OSHA's current limit, and the construction industry sampling 
demonstrated 25 percent noncompliance.
    Mr. Secretary, can you tell me how many silica-related 
inspections OSHA conducted in the past two fiscal years, and 
what is the agency doing now to ensure compliance with the 
current silica permissible exposure limits?
    Secretary Perez. I don't know the answer to your first 
question, but I will get back to you. When you go to a 
construction site there is a pretty good chance that part of 
what you are going to be looking at there may be items that 
relate to silica. So I will make sure I get back to you on 
    What I can say regarding the rule is that there has been a 
very, very extensive process that included a series of hearings 
where we heard from a wide array of stakeholders ranging from, 
you know, the fracking industry to construction companies to 
large businesses to small businesses. We have a voluminous 
record in this matter because it is a big rule and it is a big 
proposal, and we want to make sure we get it right.
    Our goal here is to make sure that our workplaces are safe 
and, you know, as way back as 1937 I have an audio recording of 
Frances Perkins talking about the dangers of silica. So these 
issues have been well-known for quite literally decades, and 
our goal is to try to thread the needle appropriately so that 
we have safe workplaces and do so in a way that is fair to all 
sides. That is our goal.
    Mr. Thompson. Well, I appreciate that, and I thank you. I 
appreciate seeing the NIOSH published report that the incidents 
have--the downward trend that is there on silicosis. That is a 
good thing for us, so thank you.
    Secretary Perez. Thank you.
    Mr. Thompson. I yield back.
    Chairman Kline. Gentleman yields back.
    Mr. Takano, you are recognized.
    Mr. Takano. Thank you, Mr. Chairman.
    Mr. Secretary, welcome.
    Secretary Perez. Morning.
    Mr. Takano. Thank you for being here.
    I want to talk to you about overtime pay this morning. 
Americans are working longer hours and are more productive, yet 
their wages are largely flat. And one reason Americans' 
paychecks are not keeping pace with their productivity is that 
millions of working-class and even middle-class workers are 
working overtime--more than 40 hours a week--and not getting 
paid for it.
    Today, the threshold for overtime pay is only $23,660 per 
year, or $455 per week for a salaried worker. Only about 11 
percent of the salaried workers are eligible for overtime. Back 
in 1975, some 65 percent of salaried workers were eligible for 
overtime pay.
    Now, if the overtime salary threshold was raised to the 
1975 level after adjusting for inflation, millions of lower-
paid white-collar workers would be guaranteed the right to 
overtime pay if they work more than 40 hours a week, regardless 
of the nature of their job.
    Now, I sent a letter earlier this year with more than 30 
colleagues urging the Department to raise the income threshold 
for overtime pay so that more salaried workers qualify. I was 
pleased to receive a response from the Wage and Hour Division, 
last week.
    But what I want to ask you, Mr. Secretary, has the 
President called upon the department to review the overtime 
white-collar exemption last year? And I know you have been 
working diligently. Can you tell me more about how the 
department plans to address this issue and what is your 
timeline for doing so?
    Secretary Perez. Well, we are actually working overtime on 
this, Congressman. And basically, you know, the overtime rule 
stands for a very simple proposition that was enshrined in the 
Fair Labor Standards Act: If you work extra, you should be paid 
    And as you correctly point out, we have met people who are 
working 60 hours a week, 65 hours a week, who are making $455. 
That is the salary threshold that equals the amount that you 
    And you do the math on that, we have quite literally had 
cases where the supervisor was making less than the person they 
supervised. That is not fair.
    So the President directed us to figure out what is fair. 
You know, how can we adjust this threshold to reflect the fact 
that it has not kept up with inflation? How can we adjust the 
threshold that reflects the fact that if you work overtime you 
should be paid overtime? And how can we simplify the process, 
which would be helpful for employers and workers alike?
    And so, I have personally participated in literally, oh, 
probably 15 to 20 meetings with various stakeholders, including 
but not limited to employers, across an array of sectors to get 
their input. And I am hopeful that sometime this Spring we will 
be in a position to put a proposal out. And then once that 
proposal is out, there will be a notice and comment--there will 
be a comment period, and we will have another round of 
opportunity to get feedback.
    But our goal is to make a rule that is fair and make a rule 
that is--that facilitates compliance and is simpler.
    Mr. Takano. Well, thank you for that answer.
    What is your response to those who say that this will hurt 
workers that we want to help? If employers don't want to pay 
extra overtime, won't they logically increase the hours of 
those working part time and hire more workers?
    Secretary Perez. If you are working 70 hours a week and you 
are making $455, this is just fundamental fairness to me. And 
we see too many people who have been, in fact, left without 
those protections of overtime.
    And by the way, these are some of the most valuable workers 
in a workplace. These are the folks who have the keys. They are 
opening and closing places. They are going to the bank with the 
money. And they ought to be treated fairly.
    Mr. Takano. Do you think that we might look to--once you 
get this resolved and propose a new rule, or propose an 
updating of the rule, that we might want to index--you know, 
find some way to index the threshold to inflation?
    Secretary Perez. In the informal feedback that we have 
undertaken as part of our listening tour, that issue has come 
up and a number of people have raised that issue. And so, 
again, we will put a proposed rule out and then we will put it 
out for comment, and we look forward to getting comments, 
including comments, I am sure, from members of Congress.
    Mr. Takano. Well, we look forward to working with you, and 
I appreciate the hard overtime--the work you are doing on 
overtime to get this done.
    Secretary Perez. Thank you.
    Mr. Takano. And it always seems--I agree with you. I think 
it seems fundamental fairness that we--that Americans get paid 
for the work they do.
    Thank you, Mr. Chairman. My time is up.
    Chairman Kline. Gentleman's time has expired.
    Mr. Walberg, you are recognized for five minutes.
    Mr. Walberg. Thank you, Mr. Chairman.
    Secretary Perez. Morning, Mr. Chairman.
    Mr. Walberg.--Mr. Secretary, thank you. Certainly 
appreciate your openness, your willingness to be in front of 
us, openness to have calls from us, take those calls, and 
respond. I appreciate that.
    Secretary Perez. My pleasure.
    Mr. Walberg. In order to continue and keep the respect of 
my chairman, I want to stay within the five-minute time limit, 
so there are basically three questions I have.
    I think you have addressed, to a great degree, one of those 
questions already relative to overtime regulations. You 
indicated that sometime this Spring, which thankfully has come, 
sometime this Spring that rule will be put forward as a 
    I would just say I hope, in context with that, not only do 
we look at the wages relative to the hours, but we also look at 
those other--I guess it would be considered quantifiable 
factors of respect, of the opportunity for individuals to be in 
a situation where on their resume there is leadership shown, 
the ability to expand and move forward, and it is not just the 
money in their cases. It really isn't just the money; it is the 
opportunity to expand.
    The other two question areas that I did want to talk to you 
about are relative--one area would be the SHARP program and the 
VPP program, they kind of combined. And my question, the other, 
is in reference to wellness plans.
    Let me ask these questions and then get out of the way to 
let you address those, so we will stay within the five-minute 
time period.
    Recently, I sent a letter to Dr. Michaels urging him to 
rescind the November 2014 OSHA guidance document related to the 
size standard for a Safety and Health Achievement Recognition 
Program, SHARP. The guidance suggests companies with over 250 
employees be encouraged to move to the Voluntary Protection 
Program, VPP.
    However, Dr. Michaels has also suggested, as he has back 
and forth, VPP should be eliminated--limited and ultimately 
terminated. We went through that with him in a hearing some 
time ago and got VPP extended, and now it is going the other 
    When questioned about compliance assistance the agency 
always holds up these two programs as stellar examples of 
helping employers and employees. The Department can't have it 
both ways, and so why does OSHA seek to limit participation in 
both of these programs, SHARP and VPP?
    Secondly, the wellness plans. ACA encourages employers to 
offer wellness plans, yet EEOC has gone after employer wellness 
    The question I have is, does the administration support 
employer wellness plans? And if so, why is the EEOC acting to 
the contrary to--on the desire for employers, employees, and 
    I guess those two questions I would love to have your 
answer, and then we may go to another issue.
    Secretary Perez. Great. On overtime, I agree with the 
issues of respect and leadership, by the way, and we have had 
that conversation in our outreach, so I just wanted to mention 
that very briefly.
    As it relates to the SHARP program and VPP, the SHARP 
program, which stands for Safety and Health Achievement 
Recognition, is an important part of what we have been doing at 
OSHA. That program was initially designed to help small 
    And what happened over time was that a lot of large 
businesses who have subsidiaries that are under them who are 
small were getting into that program. And so, just as a matter 
of how we deal with limited resources, our goal was then to 
move the subsidiaries of large businesses from SHARP into VPP.
    What we have done in response to your feedback is to make 
sure that, you know, everybody who is currently in SHARP will 
stay in SHARP, so nobody is kicked out, for lack of a better 
term. And so that program will continue.
    Our aim for 2016 is to expand VPP because we think it is a 
great program. And just to clarify, I don't believe we have 
ever made any statement saying that we are going to eliminate 
VPP because I think it is a good program, and our goal in 2016 
is to continue to do--
    Mr. Walberg. We may have misunderstood--
    Secretary Perez. Okay.
    Mr. Walberg.--Director Michaels' statements, but most 
recently it has moved the other way toward elimination, so if 
you can clarify that with me I would certainly--
    Secretary Perez. Okay. We think, and I am confident that 
Dr. Michaels agrees, that VPP is a--and SHARP are very 
important programs, and I look forward to working with you to 
make sure that they achieve the purpose that I think we both 
believe that they should have.
    Chairman Kline. Unfortunately, the gentleman's time has 
    Mr. Jeffries, you are recognized for five minutes.
    Mr. Jeffries. Thank you, Mr. Chair.
    And thank you, Mr. Secretary, for your testimony and for 
your presence.
    When the Obama administration came into office in 2009 the 
President and the administration inherited a train wreck of an 
economy as a result of the Great Depression. Since then, the 
economy has gotten back on track through the leadership of the 
President, with the able assistance of yourself and other 
members of the administration.
    Yet, it seems like we consistently hear every time the 
administration has taken a step forward or plans to take 
another step forward there is a gloom and doom scenario and 
vision--the sky is going to fall, the world is going to end in 
some way, shape, or form.
    We first heard that in connection with the passage of the 
Affordable Care Act. We were told it was going to end health 
care as we know it. Instead, more than 16 million previously 
uninsured Americans now have affordable health insurance. And, 
in fact, the cost trajectory of health care has slowed in a way 
that is positive for all of America.
    We heard that when Dodd-Frank was passed it was going to 
end Wall Street productivity as we know it. Instead, we have 
got a stock market that is way up, CEO compensation is way up, 
profitability amongst Wall Street institutions is way up. That 
is a good thing for America, for New York City, where Wall 
Street is based. But Wall Street as we know it wasn't ended.
    Then, of course, I think we heard when the progressive tax 
code was put into place, consistent with the fiscal cliff 
agreement at the beginning of 2013, that the job creators would 
be hurt in an incredible way. Yet, we have had 60 consecutive 
months, I believe, of private sector job creation continuing 
through that period when the fiscal cliff deal was put into 
place, 12 million private sector jobs have been created.
    So we have heard now, consistent with some of the things 
that you have attempted to do with respect to Federal 
procurement, your support of the minimum wage, that we are 
going to grind the economy to a halt, the sky will fall. And so 
I just want to get into a little bit of the facts, if you will, 
related to why you are supporting a minimum wage increase, for 
    We have got a consumer demand problem, I believe, in 
America that we have been attempting to address moving forward, 
    Secretary Perez. Well, I support a minimum wage because, 
number one, it is fundamentally fair. Nobody who works a full-
time job should have to live in poverty.
    I support it, number two, because it is smart. You know, 
when you put money in people's pockets they spend it. Employer 
after employer tells me, ``Tom, this is a consumption-deprived 
recovery.'' And that is because folks don't have enough money 
in their pocket.
    And so it is the fair thing to do and it is the right thing 
to do, and that is why voters in Nebraska, Arkansas, Alaska, 
and elsewhere have voted increases in the minimum wage, you 
know, and New Jersey, as well, because it is an idea that has 
had bipartisan support in this body. Whether it was Newt 
Gingrich in the 1990s, George W. Bush, his father, every 
President except two since FDR has signed an increase in the 
minimum wage.
    Mr. Jeffries. Right. And Americans both on the left and the 
right--blue states, red states--get it. If you put more money 
in the pockets of everyday Americans they will spend more. If 
you spend more you are going to yield economic growth. That, of 
course, is going to be good for the country.
    In terms of Federal procurement, there seems to be this 
argument that access to Federal procurement is a right, not a 
privilege. Seems to me that it is a privilege that should be 
earned, as it relates to whether contractors are doing the 
right thing by standards that already exist in law.
    Could you speak to sort of the efforts that the 
administration has taken to try to level the playing field so 
that good actors are getting access to Federal procurement and 
bad actors are not abusing taxpayer dollars?
    Secretary Perez. It is important to note that contractors 
already are--contracting officers are already required to 
assess a contractor's business integrity and ethics before 
awarding a contract. And when you are a contractor competing 
for business, you have got to do the same thing if you have 
    And by the way, that is not simply the right thing to do, 
it is the smart thing to do. No one wants to associate with a 
sub who has a bad rep.
    And so what we are simply doing in this rule is clarifying 
that breaking labor laws, if you have had multiple, you know, 
labor violations in safety or wage and hour, that is not 
consistent with business ethics. And there is a provision in 
this--in our regulatory structure here whereby after the rules 
are final and before they go into effect, there is a period of 
time that we have set up by design where businesses who think 
they have questions can come and get those questions answered, 
because our goal is compliance.
    Mr. Jeffries. Thank you, Mr. Chair.
    Chairman Kline. Gentleman's time has expired.
    Being mindful of the hard stop at 12:00 p.m., the chair 
will reduce to four minutes the time for question and answers 
on each side for the remaining members, and I think that will 
allow everybody to get a chance to ask their questions.
    So unfortunately, Mr. Guthrie, you are going to be limited 
to four minutes. We are starting with you, and you are 
    Mr. Guthrie. Too bad I just have four minutes because I was 
going to praise working here together.
    And the chairman said this when he was giving his opening 
remarks, and he used the comment about you, said ``true to your 
word.'' And if you remember, when we had a--I guess this 
hearing last year, we had some concerns that I had of an 
example of the ESOPs in my area, which, I explained, 
particularly one, that allow hard-working taxpayers to create 
real wealth.
    And that is what we all want--people not just to survive, 
but to create real wealth for themselves and their families, as 
we discussed, hopefully be able to afford to send their kids to 
college, right? Those types of things.
    And you said sitting there, ``Well, I want to meet them.'' 
And for about a year, the place does work sometimes. You came 
to my office with your staff. My constituents came, explained 
their position, and we left with, there are some areas that we 
can agree and work on, and we have done that.
    And I really appreciate that because it was true to your 
word. You know, sometimes you hear things and you go for 
meetings and we all get busy. It is not that somebody is trying 
not to work it out together, but we really have, and I really 
appreciated you, my people that work in my office working with 
your office to hopefully to come to some agreement that is 
moving forward.
    And we talked earlier about ESOPs, and I would just like to 
give you a few moments to talk about ESOPs. And we said 
earlier, how do we create pathways and policies, not just 
through ESOPs, but any way, for hard-working taxpayers, I think 
you said middle-class, to earn--working people to earn real 
    And so I'll just give you a couple opportunities to talk 
about, from our meeting to now, what you kind of discovered or 
maybe reacquainted yourself with ESOPs. And I guess I am 
running out of time, so I want to turn it over to you--
    Secretary Perez. Sure. No, well, thank you.
    You were concerned that we had a provision in the proposed 
conflict of interest rule that--from 2010 or 2011 relating to 
ESOPs. You thought that was not a good idea to have it in 
there. Others agreed with you, and upon reflection, we agreed 
with you, as well. So the rule that will come out will not 
include the ESOP provision or proposal from before.
    What I have learned about ESOPs--we have a shared interest, 
Republicans and Democrats alike. We want to figure out how we 
build an economy that works for everyone.
    And as you saw with your constituents and as I have seen 
across the country, employee stock ownership programs are very 
effective ways of helping people across, you know, whether it 
is the cashier at the grocery store or--to the owner of the 
grocery store, giving them opportunities not only to build a 
nest egg, but when you have skin in the game in your job--and 
many ESOPs, their governance structures, they are giving people 
skin in the game.
    I am always happiest in my jobs when I feel like my voice 
is heard, and that is what so many ESOPs are doing. And that is 
why I think it can lead to this sense of shared prosperity.
    And I look forward to working with you, Congressman, moving 
forward to see, is there public policy that we can undertake 
that can help, you know, promote and expand a model that I 
think has had, you know, real success in building wealth for 
working people across this country in places like Kentucky, in 
places like Colorado.
    Anyone who has had the New Belgium Brewery, one of--it is 
the second-largest U.S. brewery in America, after Sam Adams, 
and, you know, that is an ESOP. And the CEO, she is a 
remarkable person who believes that we all succeed when we all 
    Mr. Guthrie. Well, thank you. And you were sincere in all 
your efforts to work, and your staff was great to work with. 
And appreciate the result that we got.
    Secretary Perez. Thank you.
    Mr. Guthrie. I yield back, Mr. Chairman.
    Chairman Kline. Gentleman yields back.
    Ms. Bonamici, you are recognized for four minutes.
    Ms. Bonamici. Thank you, Mr. Chairman.
    Mr. Secretary, I have a list of thanks and two questions.
    First, thank you for your testimony and for your--the great 
work of your department. Thank you for your visit to the West 
Coast to help facilitate what I hope will be a lasting solution 
to the labor dispute at the West Coast ports.
    Thank you for your support for Job Corps. I have a great 
Job Corps program in my district up at Tongue Point in Astoria.
    And finally, thank you for your focus on paid family and 
sick leave. It is clear, as you recognized in your written 
testimony, that our policies have not kept pace with our 
workforce. As you note in your testimony, the United States is 
the only industrialized nation on Earth without paid family 
    I am beginning to, as you indicated in your testimony, see 
business support, because businesses recognize that these 
policies help with retention and recruitment. Intel in my 
district just implemented an eight-week paid time for new 
parents. I applaud them for that.
    My first question has to do with workforce development 
programs, which, of course, play an important role in our 
communities. Department of Labor grants have helped workforce 
programs in my district develop innovative partnerships. And I 
applaud the passage of WIOA last Congress.
    So can you first address what the Department's plans are to 
provide technical assistance to states and localities in 
    And then my second question I will give to you and you can 
respond to both. Last Congress, I introduced a bill to 
reauthorize the Older Americans Act, and we have talked a lot 
about the importance of having policies that help support 
people creating secure retirements.
    But for many, as you know, staying connected to the 
workforce is necessary for achieving economic security. And I 
talk to constituents. The more mature constituents in my 
district really perceive that there is a lot of age 
discrimination out there.
    So can you talk about what the Department is doing and 
intends to do to support older workers and to make sure that 
they are not left behind in workforce issues?
    Secretary Perez. Sure.
    Ms. Bonamici. Thank you.
    Secretary Perez. I will take your questions in the order 
that you asked them.
    The Workforce Innovation and Opportunity Act is a great 
opportunity. It is well named.
    And we have spent a significant amount of time, and I am 
really appreciative of the work of our dedicated staff at the 
Department of Labor. We have done outreach to states; we have 
traveled the country.
    Frankly, Congress asked us to do about 18 months' worth of 
work in about 6 months, and we didn't quite do it in six 
months, but we did it in about 8 or 9. And we were meeting 
regularly with staff, and they understood that we were not 
asleep at the switch. Quite the contrary.
    And as a result, the rule--the proposed rule is at the 
Federal Register. And we really look forward to the comments, 
because this can be and it will be game-changing. I think there 
is so much we can do in this space.
    This is what it is all about, taking match.com to scale, 
recognizing that you take the job seeker where you find them. 
Some have a college degree or above and we need to just do a 
few things to help them get back in the workforce; some are 
coming out of prison; some are a person with disabilities; some 
are veterans. And we need to have tools in our toolkit to help 
    And that is exactly what WIOA does, and I am very excited 
about the work that has been done and the work that can be 
done. It is all about scale and sustainability.
    Ms. Bonamici. Thank you.
    Secretary Perez. As it relates to the--your question about 
the Older Americans Act, we are going to be having a summit on 
older Americans. We did the working families summit--
    Ms. Bonamici. Right.
    Secretary Perez.--that you were involved in last year. This 
year the White House will be doing a summit on older Americans 
that is going to deal with a wide range of issues relating to 
older Americans including retirement security, making sure that 
you can retire with dignity, and when you invest your hard-
earned money, that you can make sure that somebody is looking 
out for you.
    The Community Service Employment for Older Americans 
program, our budget proposes a number of changes all designed 
to make the program work better. And I certainly look forward 
to working with you so that your interest and leadership we can 
put to bear.
    Ms. Bonamici. Thank you, Mr. Secretary.
    I yield back.
    Chairman Kline. Thank the gentlelady.
    Mr. Carter, you are recognized for four minutes.
    Mr. Carter. Thank you, Mr. Chairman.
    Secretary Perez. Morning, Congressman.
    Mr. Carter. And thank you, Mr. Secretary, for being here. 
As a new member of Congress, let me say that it is quite 
encouraging to hear all the compliments from the committee 
members about how you have obviously given a concerted effort 
to try to work with everyone here, so thank you--
    Secretary Perez. There is a lot of common ground, and I 
want to find it and work with it.
    Mr. Carter. Well, as a long-time mayor and as a long-time 
state legislator, I can tell you that I am one who believes 
that a lot of our social ills can be resolved by jobs, so that 
    Secretary Perez. I worked in local government as well, so I 
know the rubber hits the road back in your old job.
    Mr. Carter. Absolutely.
    Secretary Perez. Yes.
    Mr. Carter. Well, listen, I want to talk to you real 
quickly about the H-2B program. That is something that I have 
an interest in, and it is particularly important in my 
    And, you know, Congress, of course, has instructed the 
Department of Labor to work with Homeland Security on this, and 
I know that for many years the Department of Labor performed 
that role without formal rules. And in 2008, I believe you 
implemented some formal rules.
    What was the need for the formal rules at that time? Why 
was there a need for that?
    Secretary Perez. You need to have rulemaking authority to 
implement the underlying guidance. I mean, there is--the one 
thing--I don't know a program, Congressman, other than the H-2B 
program, where there has been literally more litigation, dating 
back to the Bush administration, and a host of decisions, one 
of which said that we, the Department of Labor--two of which 
now have said we, the Department of Labor, lack rulemaking 
authority to regulate in this space.
    And then in other settings--and I think this gets to your 
underlying question--we have attempted to, in related settings, 
issue guidance and administer the program through guidance. And 
there has been litigation in that setting. And on I think two 
different occasions courts have said, ``No, you can't simply 
run the program through the issuance of guidance; you need to 
have a notice and comment period if you are going to do that, 
as well.''
    So this has been a, quite frankly, a frustrating enterprise 
because I recognize the importance of the program, as someone 
who had the eastern shore of Maryland, and we want to try to 
get it right. And that is why we have outlined, in a very short 
timeframe, a series of steps designed to get the program up and 
running, make sure it is fair to American workers, because that 
is part of our responsibility, and then also make sure it is 
fair to employers.
    Mr. Carter. Can you give me an update about where we are 
with the program? When do you expect it to--right now I think 
that it has been suspended, or--
    Secretary Perez. Right, it has been--three things. We filed 
a motion to stay the court's ruling day before last, and it was 
unopposed by the other side. And that goal is to make sure we 
can get the program up and running right now.
    And then by April 30th we have committed to having an 
interim final rule in place so that rule will go into effect 
immediately, there will be a comment period, but while that 
comment period is in place the program is up and running. And 
then thirdly, the Department of Homeland Security, we had our--
we had gotten roughly 1,000 or more applications off of our 
assembly line over to DHS, you know, as of March the 4th, and 
they were in limbo, and that assembly line over there is 
already up and running again.
    So those are three very concrete steps designed to get the 
program moving again expeditiously.
    Mr. Carter. Great. Well, thank you. It is a good program 
and we hope that you will be able to get it up and running.
    Thank you, Mr. Chairman, and I yield back the remaining 
    Chairman Kline. I thank the gentleman.
    Ms. Clark, you are recognized for four minutes.
    Ms. Clark. [Off mike.]
    Secretary Perez. Good morning.
    I think your microphone--
    Ms. Clark. Newbie on the committee.
    Thank you for being here today.
    And thank you, Mr. Chairman.
    As you and I had a chance to discuss, I believe it is 
critical as we move forward to address income inequality in 
this country that we ensure that low and middle Americans still 
have the access to affordable, quality retirement savings 
options. And I appreciate the dialogue you have had with 
several of my colleagues here today and I really look forward--
and thank you for your time yesterday--on continuing to work 
with you as the department goes through its rulemaking process. 
So thank you for that.
    The issues that I want to focus on today are with equal pay 
and medical leave. As you know, women are still paid 78 cents 
to a man's dollar; and for women of color that gap--that wage 
gap is even greater.
    Nationally, that is a wage gap of more than $10,000 per 
year between working women and men. That is the equivalent of 
86 weeks of groceries.
    So my first question for you is if you can tell me 
specifically how the Department of Labor is working to close 
this gap.
    And in the same line as my colleague from Oregon raised, 
only 13 percent of Americans have paid family and medical leave 
through their employers. And often we are finding--I hear from 
my constituents--that working families are being forced to 
choose between their economic security and the health and 
wellbeing of their families.
    Several states, including Massachusetts, California, Rhode 
Island, and New Jersey, have recently instituted paid leave 
and/or paid sick day programs. Is this a policy that you 
believe can be replicated in other states? And specifically, 
what initiatives is the Department undertaking to promote paid 
    Thank you.
    Secretary Perez. Thank you for both of your questions. And 
I certainly enjoyed our meeting yesterday.
    You know, equal pay, as the father of three kids, two of 
whom are daughters, is very near and dear to my heart. And we 
issued a report, as you know, to highlight the fact that 
working women still earn only 78 cents on a dollar. First law 
the President signed when he became President was the Lilly 
Ledbetter Act, but that is not enough.
    And that is why, as part of what the President did last 
year, he proposed--he directed us to issue an NPRM, which we 
have done, which proposes that covered employers would have to 
submit information relating to employee compensation. Lilly 
Ledbetter only found out she was getting taken advantage of 
when someone passed her an anonymous note, and so we have 
gotten a lot of comments on this proposed rule and we are 
working through those with an eye toward getting that finalized 
as soon as possible.
    With respect to paid leave, I have traveled the world on 
this issue--Australia, Canada, U.K., Germany, and elsewhere--
and whether it is a conservative ruling government or a 
progressive ruling government, they all embrace it. They 
recognize that we all succeed when women succeed.
    If our labor force participation rate was even, women--
female labor force participation, U.S. and Canada, in 2000 we 
had the same rate. Now they are eight points higher than us, 
roughly. That translates to, if we had kept pace we would have 
5.5 million more women in the workplace.
    That is why we are working with states to--and local 
governments to help correct this. And through our grant-making 
and technical assistance we are going to continue to do just 
    Ms. Clark. Thank you.
    Chairman Kline. Gentlelady's time has expired.
    Mr. Allen, you are recognized for four minutes.
    Mr. Allen. Thank you, Mr. Chairman.
    And, Mr. Secretary, thank you for--
    Secretary Perez. Morning.
    Mr. Allen.--being here. I, too, am a new member of 
    Secretary Perez. Congratulations.
    Mr. Allen. I, for 30 years, had the privilege of allowing 
folks to have a good job and be able to support their families, 
and I can think of no greater privilege for anyone to have that 
opportunity to create jobs and give folks the dignity of a good 
    And with that respect, one--course, I am from Georgia, and 
we have, of course, had tremendous job growth. We lost about 
360,000 jobs in 2008 because we were so dependent on one 
particular industry, and we have just about replaced those jobs 
with a diversity of jobs.
    And one of the things that we run into--two questions I 
want to ask you. One of things we are running into right now 
because of the growth in our state is getting skilled workers. 
And everybody I talk to--I don't know--welders are needed 
everywhere, apparently.
    And the other issue in our state is in our agriculture 
program. And, of course, we use the H-2A temporary agricultural 
worker visas.
    And, you know, I talk to our farmers and it is a real 
hassle to deal with that program. I mean, your folks seems to 
be making it almost impossible to use that program. And have 
you talked to any of our farmers about that program and how 
that program could be improved so that it is a little easier to 
use that program in our fruit and vegetable industry?
    Secretary Perez. I haven't talked to farmers in Georgia, 
but look--I am always looking for ways to make every program we 
operate more effective, and that is why I sat down with 
Congressman Guthrie's constituents to talk about ESOPs. They 
educated me a lot and I always look forward to listening and 
learning, whether it is H-2A, whether it is any issue before 
this committee that affects working people.
    As it relates to your skills issue, I hear that everywhere. 
And the challenge for us in the implementation of WIOA is 
really the challenge of we have got a lot of promising 
practices out there; we have got to take them to scale. We also 
have to build some new--build and/or fortify on-ramps to this 
skills superhighway, because we have five million job openings 
right now, and--
    Mr. Allen. And these are not minimum-wage jobs.
    Secretary Perez. No, no, 500,000 are in I.T.
    Mr. Allen. We are spending energy talking about raising the 
minimum wage when we have got great-paying jobs out there. We 
just need to get folks to learn those skills to fill those 
    Secretary Perez. I don't think those are either/or 
strategies. I think those are both and then some. There are 
500,000 I.T. jobs right now, and that is why what we are trying 
to do through our investments in apprenticeship and elsewhere 
to build those pathways to prosperity.
    And again, this is not partisan stuff. If we fortify our 
community college system, if we build solid on-ramps for people 
to go into apprenticeship in I.T. or apprenticeship in health 
care--in South Carolina they are using tax credits--CVS is 
using tax credits--
    Mr. Allen. We are doing the same in Georgia.
    Secretary Perez.--and put them into pharmacy tech programs, 
where they are paying, you know, good, solid jobs. So a lot of 
    Mr. Allen. Yes. We have got a number of those programs 
going on, but also, if you would make time available for my 
farmers I think they would like to talk to you about that 
    Secretary Perez. I would look forward to it.
    Mr. Allen. Good. Thank you.
    I yield back my time.
    Chairman Kline. Gentleman yields back.
    Mr. Courtney, you are recognized.
    Mr. Courtney. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary--
    Secretary Perez. Morning, Congressman.
    Mr. Courtney.--for your great service.
    Yes, good morning.
    Again, just want to thank you for, on page three and four 
of your testimony, telling the story of Katherine Hackett, my 
constituent who was, you know, in my opinion, almost an iconic 
example of how, number one, her determination combined with the 
assistance that the Department of Labor provided, you know--
    Secretary Perez. Match.com at work.
    Mr. Courtney. It reset her life. You know, and I think it 
is also important just to flesh out a little more of her story.
    She is the mother of two sons who are serving in our 
military--one is Special Forces and another who is a physician 
down at Fort Hood. Again, at one point she and her family were 
feeling a little sort of let down because her unemployment ran 
out, but again, because of a lot of concerted effort by your 
team and--
    Secretary Perez. And you, sir.
    Mr. Courtney.--and, you know, we were able to get her at 
Norwich Orthopedics, where--I just wanted to read to you--I 
sent her a quick note that you mentioned her in today's 
hearing, and this is the note that her employer just gave her a 
couple days ago, which is, ``You have exceeded my expectations 
as the operations manager. I can honestly say that you are the 
best operations manager we have ever had. Keep up the good 
    You and I visited that facility. It is a sprawling 
orthopedic practice. I mean, it is just a beehive of activity, 
and she is kind of the quarterback, making sure people find 
their way.
    Again, a year ago she was basically living at home with 58 
degree temperatures trying to save money and electricity costs 
because she was, again, disconnected from the workforce for no 
fault of her own. And it just shows that supportive employment, 
which is what you guys stepped up with to get that sort of 
bridge for her to establish herself, is a model that can work.
    So WIOA obviously was all about trying to use that kind of 
collaboration, and I think you called it partnerships with 
employers. And maybe if you could just spend a minute talking 
about the implementation of the regs and the rollout that is 
hopefully going to take place this year?
    Secretary Perez. Well, will take place. And, you know, the 
proposed rules are at the Federal Register. Those rules will 
not be a surprise to people, I think, because they are the 
product of a tremendous amount of collaboration. The 
Thanksgiving and religious holidays of December were 
nonexistent for a lot of our staff because they were working 
day and night to get those done, doing a lot of listening at 
the state and local levels, here with your teams.
    And I--again, I think we have to--this is what we have to 
do now with WIOA implementation, it is partnership at scale, 
match.com at scale, building these new on-ramps. Because we met 
with 50 employers at the White House last week to figure out 
this strategy for tech, because we have got 500,000 tech jobs 
right now.
    And employers were saying, you know, ``We have on-ramps 
that aren't existent right now, and if we don't do this, shame 
on us, and we can do it.'' And so I am looking forward to 
taking the WIOA framework and making sure that we can scale--
because, you know, Katherine Hackett is a great success story, 
and there are literally millions of Katherine Hacketts out 
there that we need to reach, and millions of employers who want 
to hire the Katherine Hacketts, and we have got to do that 
match.com work at scale.
    Mr. Courtney. The appetite for this, in terms--because most 
employers I talk to have no idea WIOA was signed into law. I 
mean, it was amazing. Mr. Kline was there. I think there was 
one TV camera. The media just don't like to see--
    Secretary Perez. We have a marketing challenge, yes. We 
have got to get the word out.
    Mr. Courtney. But when the word gets out I think it is 
going to be just a smashing success.
    I yield back.
    Chairman Kline. I thank the gentleman.
    Mr. Messer, you are recognized for four minutes.
    Mr. Messer. Thank you. Thank you, Mr. Chairman.
    Secretary Perez. Morning, Congressman.
    Mr. Messer. How you doing?
    Secretary Perez. I am doing well, sir.
    Mr. Messer. I had a couple different topics--I am trying to 
find it here, but a couple different topics I wanted to chat 
with you about briefly. And thank you, again, for your 
testimony in front of the committee.
    First I wanted to ask you a quick question about stop-loss 
insurance. As you know, it is a financial risk management tool 
that allows self-insuring employers to protect themselves 
against unusually high health care claims.
    Over the past few years this administration has repeatedly 
signaled interest in regulating stop-loss insurance as health 
insurance even though this coverage does not pay medical claims 
directly, doesn't have a network of physicians, or perform any 
of the traditional functions of health insurance. And I was 
wondering, are you aware of any attempts to regulate stop-loss 
coverage by this administration?
    Secretary Perez. I would have to get back to you on that. 
Our Employee Benefits Security Administration is the entity in 
the Department of Labor that addresses issues relating to, you 
know, health care, and ERISA plans, and things of that nature. 
And what I would like to do is talk to them so that I can give 
you an accurate answer.
    Mr. Messer. Okay. Thanks. If you could get that back to us 
in writing--
    Secretary Perez. Sure.
    Mr. Messer.--I would appreciate it. You know, stop-loss 
insurance is important sort of umbrella coverage for those that 
provide self-insured plans.
    The second question I would like to ask you about is, with 
so much of the burden for accumulating retirement assets 
shifting to the individual, as well as understanding how to 
convert those assets to guaranteed income that can't be 
outlived through increasingly longer times in retirement, it 
strikes me that more advice is needed for American workers, not 
less. I worry about expanding the definition of--I worry about 
what expanding the definition of ``fiduciary'' will mean to 
fewer--that it could mean fewer advisors will offer advice on 
retirement assets and fewer people will receive it.
    It is that simple to me: more need and less capacity. And 
people want advice about all of their financial picture, not 
just their non-retirement assets.
    Secretary, what assurances can you give that the rule your 
office is on the verge of releasing will lead to more advice 
for American workers and not less?
    Secretary Perez. Well, I agree with you that we want to 
make sure that more people have access to good advice. And it 
has to be sound advice.
    And, you know, I have had a--I have participated in many, 
many outreach sessions and they have all been very, very 
helpful, with industry and others. And, you know, folks have 
said that--and these are folks who have been doing this for a 
living, and they are fiduciaries right now, and they deal with 
large investors and small investors, and they say, ``We treat 
them the same.''
    And the concern that they express to me is, consumers don't 
know when they walk in the door whether someone has taken an 
oath to look out for their best interest or whether they 
haven't. Now, that is not true for lawyers and that is not true 
for doctors. You know, when you go to your doctor they--you 
know the oath they have taken.
    And that creates uncertainty. And I think for small 
investors it is doubly important that the advice they are 
getting is in their best interest.
    And as I said earlier, Jack Bogle, the founder of Vanguard, 
who has been in this business 64 years, said, ``I learned early 
on when you take care of your customer and put their interest 
first it helps the customer--it is good for the customer and it 
is good for business.''
    Mr. Messer. Well, yes. I think we all agree with that. I 
think the question is, will the unintended consequences of this 
decision be that people get less advice, not more?
    Chairman Kline. The gentleman's time has expired.
    Mrs. Davis, you are recognized.
    Mrs. Davis. Thank you, Mr. Chairman.
    And, Mr. Secretary, thanks for being here, for always 
standing up and working hard for the--
    Secretary Perez. Look forward to coming out to your neck of 
the woods.
    Mrs. Davis. Yes, absolutely.
    Just for the record, and as background, as well, we talked 
earlier today, but I wanted to ask you to respond to what is a 
time-sensitive issue in California. As you know, in 2013, the 
Department of Labor held up public transit grants to all 
California transit systems because of a dispute over whether or 
not a 2012 state-passed pension law violated the so-called 
Section 13(c) labor protections for transit workers.
    So all of those transit grants, as you know, were put on 
hold, pending the outcome of a Federal court case. And that 
case, California v. the U.S. Department of Labor, was decided 
in California recently and the funds were ordered to be 
released, but the department has plans, as I understand it, to 
appeal that.
    I wanted you to, if you could respond and perhaps get back 
to us in a timely fashion. What does the department plan to do 
with the transit funds in the interim as the appeals process 
makes its way to the court?
    Secretary Perez. Well, thank you for your question, and we 
did chat briefly about this earlier, and I certainly understand 
the importance of FTA transit grants. I think I was three days 
on the job when I had my first conversation with Governor 
Brown. And if it wasn't three days it was early on. I knew 
where the bathroom was, but I was still learning the job.
    And I have learned a lot about 13(c) since then. It is 
really, you know, it is a law from Congress which says--it is 
really a promise to bus drivers and other employees who work 
for federally funded transit agencies.
    We have been in litigation, as you know, for some time. We 
have not denied any certifications to any transit agencies 
since the court issued its opinion.
    Our team has been in touch with California as recently as 
yesterday. Our goal is to work out a solution that works for 
everybody, and I personally--as I said, I have spoken to the 
governor, I have spoken to his chief of staff.
    And while it is still in litigation so there are limits to 
what I can say, I can certainly tell you that we are looking 
for solutions that will allow us to certify transit grants 
during the pendency of the litigation, because I recognize, as 
a local government guy, that is pretty important.
    Mrs. Davis. Yes. Is it realistic to look at a timeframe of 
about two weeks to have a written response, at least to the 
committee, in terms of where we are and what the plans are--
    Secretary Perez. Well, I will do my best to get you a 
response that is accurate and expeditious.
    Mrs. Davis. Okay. Thank you. Thank you, Mr. Secretary.
    And, as well, there is, as you know, another issue in 
California. California is helping to develop an automatic IRA, 
and I would like to ask for your help in doing that so that we 
are true to ERISA, as I know we need to be, and are able to 
move forward with that.
    Secretary Perez. I have had a number of conversations with 
stakeholders in California and elsewhere, including Maryland, 
who want to certainly help promote alternative ways of 
encouraging people to retire--or save for retirement, and we 
want to make sure that we do that in a manner that ensures the 
proper consumer protections, and that has been a very robust 
and I think productive and constructive process. And I look 
forward to continuing that.
    Mrs. Davis. That is great.
    And finally, I know you have dealt with the conflict of 
interest rule while you have been here today, and certainly 
there are lots of best practices that are out there in the 
industry, as you noted earlier, as well as work that consumer 
groups have done. And so I hope that we can move forward and 
try and get the best result out of that.
    Secretary Perez. I agree. I think we can thread the 
    Mrs. Davis. Thank you.
    Secretary Perez.--as long as we listen.
    Chairman Kline. Gentlelady yields back.
    Mr. Secretary, I think we are going to make it. Pending the 
length of the ranking member's closing remarks, we will be out 
of here before 12:00.
    Mr. Scott, you are recognized for any closing remarks?
    Mr. Scott. Thank you, Mr. Chairman, and I will be brief.
    I just wanted to thank the secretary. Particularly, he 
mentioned the sensitivity of H-2B visas on the eastern shore. 
Certainly in Hampton, West Virginia, it is a huge issue and we 
appreciate your expeditious work on that, and on pensions.
    Having people get ripped off of their life savings by 
unscrupulous advice I think is something we need to protect 
against--and pensions generally, because you mentioned the 
multiemployer, all the pension--many pension funds are at risk 
and we need to make sure that they are protected.
    The economy is on the right track. We are going in the 
right direction. The growth has been consistent but, as we have 
said, not quite robust enough, so we still need to do more 
    But we don't want to go backwards, and we need to make sure 
that we have an effective Department of Labor so that you can 
continue the good work that you have been doing. That is going 
to require appropriate budget, and we will be reviewing that 
budget on your behalf.
    So thank you, Mr. Secretary, for being here.
    Yield back.
    Chairman Kline. I thank the gentleman.
    Thank you again, Mr. Secretary, for being here. I think we 
have had a pretty robust discussion, covered a lot of ground.
    I appreciate your prompt and frank responses to questions 
on a wide variety of issues. Your department covers so many 
    It is very clear that we are going to disagree--probably 
you and I, and on each side of the aisle--on some of the issues 
about whether minimum wage should be established by states or 
the Federal Government, and so forth. But, I think the level of 
cooperation is very encouraging.
    We have got some very, very big jobs in front of us, 
including the continuing work to complete the work on the 
solvency of the PBGC and the multiemployer pension plans. I am 
looking forward to that work, and I thank you very much for 
being here today.
    There being no further business, committee stands 
    [Additional submission by Chairman Kline follows:]
    [Additional submission by Mr. Sablan follows:]
    [Questions submitted for the record and their responses 


    [Whereupon, at 11:50 a.m., the Committee was adjourned.]