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




 
                       EXAMINING THE POLICIES AND
                           PRIORITIES OF THE
                        U.S. DEPARTMENT OF LABOR

=======================================================================

                                HEARING

                               before the

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

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, MARCH 16, 2016

                               __________

                           Serial No. 114-42

                               __________

  Printed for the use of the Committee on Education and the Workforce
  
  
  
  
  
  
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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    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

                              ----------                              
                                                                   Page

Hearing held on March 16, 2016...................................     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:
    Questions submitted for the record by:
        Bonamici, Hon. Suzanne, a Representative in Congress from 
          the State of Oregon....................................    87
        Davis, Hon. Susan A., a Representative in Congress from 
          the State of California................................    86
        Foxx, Hon. Virginia, a Representative in Congress from 
          the State of North Carolina............................    79
        Fudge, Hon. Marcia L., a Representative in Congress from 
          the State of Ohio......................................    86
        Heck, Hon. Joseph J., a Representative in Congress from 
          the State of Nevada....................................    83
        Chairman Kline...........................................    72
        Mr Scott.................................................    84
        Stefanik, Hon. Elise, a Representative in Congress from 
          the State of New York..................................    83
        Walberg, Hon. Tim, a Representative in Congress from the 
          State of Michigan......................................    80
        Wilson, Hon. Joe, a Representative in Congress from the 
          State of South Carolina................................    78
    Secretary Perez responses to questions submitted for the 
      record.....................................................    89


                 EXAMINING THE POLICIES AND PRIORITIES



                    OF THE U.S. DEPARTMENT OF LABOR

                              ----------                              


                       Wednesday, March 16, 2016

                     U.S. House of Representatives

                Committee on Education and the Workforce

                            Washington, D.C.

                              ----------                              

    The Committee met, pursuant to call, at 10:00 a.m., in Room 
2175 Rayburn House Office Building, Hon. John Kline [chairman 
of the committee] presiding.
    Present: Representatives Kline, Wilson of South Carolina, 
Foxx, Roe, Thompson, Walberg, Salmon, Guthrie, Byrne, Brat, 
Carter, Bishop, Grothman, Curbelo, Stefanik, Allen, Scott, 
Davis, Courtney, Polis, Sablan, Wilson of Florida, Bonamici, 
Takano, Clark, and DeSaulnier.
    Staff Present: Andrew Banducci, Workforce Policy Counsel; 
Janelle Belland, Coalitions and Members Services Coordinator; 
Ed Gilroy, Director of Workforce Policy; Jessica Goodman, 
Legislative Assistant; Callie Harman, Legislative Assistant; 
Christie Herman, Professional Staff Member; Tyler Hernandez, 
Press Secretary; Nancy Locke, Chief Clerk; Dominique McKay, 
Deputy Press Secretary; Brian Newell, Communications Director; 
Krisann Pearce, General Counsel; James Redstone, Professional 
Staff Member; Molly McLaughlin Salmi, Deputy Director of 
Workforce Policy; Alissa Strawcutter, Deputy Clerk; Juliane 
Sullivan, Staff Director; Loren Sweatt, Senior Policy Advisor; 
Olivia Voslow, Staff Assistant; Joseph Wheeler, Professional 
Staff Member; Tylease Alli, Minority Clerk/Intern and Fellow 
Coordinator; Pierce Blue, Minority Labor Detailee; Denise 
Forte, Minority Staff Director; Christine Godinez, Minority 
Staff Assistant; Carolyn Hughes, Minority Senior Labor Policy 
Advisor; Eunice Ikene, Minority Labor Policy Associate; Brian 
Kennedy, Minority General Counsel; Kevin McDermott, Minority 
Senior Labor Policy Advisor; Richard Miller, Minority Senior 
Labor Policy Advisor; Veronique Pluviose, Minority Civil Rights 
Counsel; Saloni Sharma, Minority Press Assistant; Marni von 
Wilpert, Minority Labor Detailee; and Elizabeth Watson, 
Minority Director of Labor Policy.
    Chairman Kline. A quorum being present, the Committee on 
Education and the Workforce will come to order. Well, good 
morning, Mr. Secretary, welcome back. It is always a pleasure 
to discuss with you the policies of the Department of Labor, 
which impact countless workplaces and millions of workers 
across the country. As I have said before, it is the 
responsibility of this committee to ensure those policies are 
being administered in a way that best protects the interests of 
workers and employers and American taxpayers as well.
    This is a responsibility we take seriously, especially at a 
time when many working families and small businesses are still 
struggling to get by. There is no question that the economy has 
shown signs of modest improvement, and we certainly welcome 
every new job that is created. But, there is also no question 
that many Americans feel they are slipping further behind in an 
economy that is not meeting its full potential.
    At an event in Raleigh, North Carolina, former President 
Bill Clinton referred to the President's recent State of the 
Union Address and said: Millions of people look at that pretty 
picture of America he painted and they cannot find themselves 
in it to save their lives.''
    We do not agree on a lot of things but President Clinton 
has rightly summed up the frustration many Americans feel. 
Month after month, we exceed low expectations and that simply 
is not good enough. It is not good enough for the tens of 
millions of workers still sitting on the side lines, it is not 
good enough for the nearly 6 million Americans who need full 
time jobs but can only find part time work and it is not good 
enough for those families whose incomes remain flat.
    We need to do better and there are opportunities to do 
better. However, those opportunities will be lost if the 
Department continues to push an extreme regulatory agenda. For 
example, we both agree that Federal overtime rules need to be 
changed. The committee has held numerous hearings with 
witnesses who testify that these rules are so convoluted that 
well-meaning, law-abiding employers often get tied up in red 
tape and run afoul of the law.
    The overtime rules are also outdated, denying men and women 
the ability to balance work with their personal and family 
needs. We have said repeatedly that we want to partner with the 
Department in a serious effort to streamline and modernize 
overtime protections. Unfortunately, the Department is pursuing 
an approach that will do nothing to provide employers with more 
clarity and certainty. To make matters worse, the Department's 
proposal will actually stifle workplace flexibility and make it 
harder for lower income Americans to move up the economic 
ladder.
    These and other consequences will unfold in communities 
across the country, in local retail stores, small businesses, 
nonprofit organizations, and community colleges. The very 
places that can least afford it will be hit the hardest.
    In addition to overtime, there is also broad, bipartisan 
agreement that we need to strengthen policies governing 
retirement advice. Of course, there are also strong bipartisan 
concerns with the Department's fiduciary proposal. As Dr. Roe 
suggested at a hearing last year, if we applied the same 
regulatory regime on the medical profession, patients would 
have less access to physicians and the same will be true for 
those seeking retirement advice. Because of the rule, many low- 
and middle-income families will have less access to affordable 
retirement advice and fewer small businesses will offer 
retirement plans.
    Thanks to the hard work of Dr. Roe and others, there is a 
bipartisan alternative that would protect access to affordable 
retirement advice and ensure advisors serve their client's best 
interests. This legislation is a strong foundation to address a 
shared priority if the Department will abandon its flawed 
partisan proposal.
    Mr. Secretary, I strongly encourage you to take a step back 
and build bipartisan consensus in these and other important 
areas. The Department's ``my way or the highway approach'' will 
not deliver the lasting positive change that working families 
and job creators need to move this country forward. The only 
way to do that is for the administration to work with members 
of Congress, Democrats and Republicans. I would also encourage 
the Department to renew its focus where bipartisan consensus 
has already delivered results such as workforce development and 
multiemployer pensions.
    The President noted recently the importance of providing 
new skills to those searching for work yet the Department has 
failed to implement the Workforce Innovation Opportunity Act in 
a timely manner. A new report by the nonpartisan Government 
Accountability Office confirms the consequences of the 
Department's inaction and we hope the implementation process 
will conclude without further delay.
    Finally, Mr. Secretary, you played an integral role in our 
efforts to reform the multiemployer system. Your continued 
leadership is needed to solidify the gains we have made and to 
modernize the system for future generations of workers and 
retirees.
    Our success in these areas demonstrates what is possible 
when extreme policies are set aside and we work together in 
good faith toward a common goal. In the coming months, I hope 
we seize the opportunities we have in order to make a real 
difference in the lives of America's workers and employers.
    We now recognize the ranking member, Mr. Scott, for his 
opening remarks.
    [The information follows:]

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

    Secretary Perez, it is always a pleasure to discuss with you the 
policies of the Department of Labor, which impact countless workplaces 
and millions of workers across the country. As I've said before, it's 
the responsibility of this committee to ensure those policies are being 
administered in a way that best protects the interests of workers and 
employers, and American taxpayers as well.
    This is a responsibility we take seriously, especially at a time 
when many working families and small businesses are still struggling to 
get by. There is no question the economy has shown signs of modest 
improvement, and we certainly welcome every new job that's created. But 
there's also no question many Americans feel they are slipping further 
behind in an economy that isn't meeting its full potential.
    At an event in Raleigh, North Carolina, former President Bill 
Clinton referred to the president's recent State of the Union address 
and said, ``Millions . . . of people look at that pretty picture of 
America he painted, and they cannot find themselves in it to save their 
lives.'' We don't agree on a lot of things, but President Clinton has 
rightly summed up the frustration many Americans feel.
    Month after month, we exceed low expectations, and that simply 
isn't good enough. It's not good enough for the tens of millions of 
workers still sitting on the sidelines; it's not good enough for the 
nearly six million Americans who need full-time jobs but can only find 
part-time work; and it's not good enough for those families whose 
incomes remain flat. We need to do better, and there are opportunities 
to do better. However, those opportunities will be lost if the 
department continues to push an extreme regulatory agenda.
    For example, we both agree federal overtime rules need to be 
changed. The committee has held numerous hearings with witnesses who 
testified that these rules are so convoluted that well-meaning, law-
abiding employers often get tied up in red tape and run afoul of the 
law. The overtime rules are also outdated, denying men and women the 
ability to balance work with their personal or family needs.
    We have said repeatedly we want to partner with the department in a 
serious effort to streamline and modernize overtime protections. 
Unfortunately, the department is pursuing an approach that will do 
nothing to provide employers more clarity and certainty. To make 
matters worse, the department's proposal will actually stifle workplace 
flexibility and make it harder for lower-income Americans to move up 
the economic ladder. These and other consequences will unfold in 
communities across the country, in local retail stores, small 
businesses, non-profit organizations, and community colleges. The very 
places that can least afford it will be hit the hardest.
    In addition to overtime, there is also broad, bipartisan agreement 
we need to strengthen policies governing retirement advice. Of course, 
there are also strong, bipartisan concerns with the department's 
fiduciary proposal. As Dr. Roe suggested at a hearing last year, if we 
applied the same regulatory regime on the medical profession, patients 
would have less access to trusted physicians, and the same will be true 
for those seeking retirement advice.
    Because of the rule, many low- and middle-income families will have 
less access to affordable retirement advice and fewer small businesses 
will offer retirement plans. Thanks to the hard work of Dr. Roe and 
others, there is a bipartisan alternative that would protect access to 
affordable retirement advice and ensure advisors serve their clients' 
best interests. This legislation is a strong foundation to address a 
shared priority if the department will abandon its flawed, partisan 
proposal.
    Mr. Secretary, I strongly encourage you to take a step back and 
build bipartisan consensus in these and other important areas. The 
department's my-way-or-the-highway approach will not deliver the 
lasting, positive change working families and job creators need to move 
this country forward. The only way to do that is for the administration 
to work with members of Congress - Democrats and Republicans. I would 
also encourage the department to renew its focus where bipartisan 
consensus has already delivered results, such as workforce development 
and multiemployer pensions.
    The president noted recently the importance of providing new skills 
to those searching for work, yet the department has failed to implement 
the Workforce Innovation and Opportunity Act in a timely manner. A new 
report by the nonpartisan Government Accountability Office confirms the 
consequences of the department's inaction, and we hope the 
implementation process will conclude without further delay. Finally, 
Mr. Secretary, you played an integral role in our efforts to reform the 
multiemployer pension system. Your continued leadership is needed to 
solidify the gains we've made and to modernize the system for future 
generations of workers and retirees.
    Our success in these areas demonstrates what's possible when 
extreme policies are set aside and we work together in good faith 
toward a common goal. In the coming months, I hope we seize the 
opportunities we have in order to make a real difference in the lives 
of America's workers and employers.
                                 ______
                                 
    Mr. Scott. Thank you, Mr. Chairman, and thank you, 
Secretary Perez, for being with us this morning. We know that 
the United States has emerged from the depths of the Great 
Recession with steady economic growth. Here are some facts:
    More than 14 million jobs have been created over the last 
six years extending the longest streak of private sector job 
growth on record; 242,000 jobs were created in February and the 
unemployment rate has dropped to 4.9 percent from a high of 10 
percent.
    Over the last six months, the labor participation has grown 
as more people are reentering the workforce. Although the 
growth in the global economy has slowed to the lowest level 
since 2009, the United States now has the highest growth rate 
compared to other advanced economies.
    This is occurring even while domestic companies are 
battling the economic headwinds from a strong dollar that makes 
our exports more expensive in a global market. Despite this 
economic good news, we also know that America's middle class 
has not fully recovered and too many Americans remain 
underemployed. For example, 15 million people are working part-
time, not because they want to, but because they cannot find 
full-time work. Others are unemployed or discouraged from 
seeking work, wages have been stagnant.
    The middle class, in real terms, for the last four decades, 
well over 90 percent of new income during the recent recovery 
has been concentrated in the hands of the top one percent. It 
was well established that the link between productivity gains 
and wages in our economy has been broken for the past 
generation. This chart shows that from the 1950s through the 
1970s, as productivity increased, so did wages but around the 
1970s, `73, there was a break where wages were essentially 
stagnant as productivity continued to grow.
    This chart shows that the rich are getting richer because 
the productivity is producing more wealth but the workers are 
not getting the benefit of that productivity. Standard and 
Poor's has studied whether the U.S. economy would be stronger 
with a narrower income gap and concluded that inequality is one 
major factor in holding back the economy. S&P 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 the economy. Now this next 
chart illustrates extraordinary rapid growth of annual wages 
for the top one percent that is the line on the top. It grew 
149 percent while the wages in the bottom 90 percent, just grew 
about 16 percent from 1979 to 2014. Today's discussion 
contrasts two very different views of the role of policy, one 
where policies concentrate their economic gains 
disproportionately among those at the top income bracket with 
the premise that these gains eventually trickle down, and 
another one which calls for public investment and training, 
infrastructure and research in order to produce sustainable 
growth for everybody. The question before us is whether we will 
choose to pursue prosperity economics or austerity economics 
where we adopt policies that advance the middle-class jobs or 
perpetuate poverty wage jobs with our labor policies and 
workforce investments concentrate the wealth in the hands of 
the top one percent or will our policies grow and strengthen 
working families?
    The choices we make here in Congress, especially those we 
make in this committee, will shape that answer. The President's 
budget recognizes this reality and proposes a way to make 
investments our country needs by responsibly ending 
sequestration.
    Democrats and many Republicans agree that the mildest 
mindless cuts mandated by sequestration are bad policy and do 
not benefit our economy or our national defense, but instead of 
addressing the situation head on, the debate is focused on 
extending tax cuts for the wealthiest Americans while robbing 
the country of resources needed, education, infrastructure, and 
research.
    We saw this late last year when we passed another 600-and-
some billion-dollar tax cut which drained resources from 
investments and that passed the House. I do not think it has 
passed the Senate and hopefully it will not.
    The Department of Labor's priorities and budget requests 
offer proposals to narrow the extreme and growing income 
inequality in our country while closing the pay gap between men 
and women. The fact is that concrete steps must be taken to 
move the Nation in the right direction.
    One step is to adopt policies that pay workers a living 
wage and enable them to balance family and work. A raise in the 
minimum wage is long overdue. If the minimum wage had been 
adjusted for inflation over the years, it would have increased 
to over $18 an hour by now but of course it has not kept up 
with the productivity.
    Another step to take is to protect retirees and their hard-
earned retirement savings to ensure that our fellow Americans 
can rest with dignity after a lifetime of hard work. Likewise, 
protections are needed to keep workers safe and healthy on the 
job. We must also adjust the overtime threshold, the guaranteed 
access to paid sick leave and to ensure that Federal workers 
and contractors are paid fairly by requiring contractors to 
provide pay stubs so that you know exactly what you have been 
paid and that would significantly reduce wage theft.
    All of these are long overdue, and I applaud the 
administration for proposing rules in these areas. Economic 
growth and strong regulatory protections are not mutually 
exclusive. After all, the absence of regulation allowed Wall 
Street to run amok and cause a credit freeze in 2008 that 
destroyed hundreds of thousands of jobs every month.
    Finally, I know that Secretary Reid focused on preparing 
the Nation's workforce on jobs of today, more importantly for 
the jobs of tomorrow, these priorities are reflected in the 
Department's budget which focuses funding on summer and year-
round jobs, opportunities for disconnected youth, 
apprenticeships and programs that expand training for in-demand 
jobs.
    Mr. Secretary, I look forward to hearing more about your 
department's agenda and your vision for a more prosperous 
economy and a more prosperous middle class. Thank you Mr. 
Chairman.
    [The information follows:]
    
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    
    
        
    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 
witness. Secretary, we are delighted to have you back. The 
Honorable Thomas E. Perez serves as the U.S. Secretary of Labor 
and is no stranger to this committee and to hearings here and 
we are very glad to have you back.
    He has a distinguished career and I can go through a list 
of other positions, Assistant Attorney General for civil rights 
of the U.S. Department of Justice, Secretary of Maryland's 
Department of Labor, and so on. He has got a lot of experience, 
he is our Secretary and we are delighted to have him here 
today. Now, Mr. Secretary, I have to ask you to stand and raise 
your right hand.
    [Witness sworn.]
    Chairman Kline. Let the record reflect that the Secretary 
answered in the affirmative again. Before I recognize you to 
provide your testimony, let me remind you of our lighting 
system. I cannot remember the last time we were in this room 
the last time you were here.
    Secretary Perez. No, it is pretty different.
    Chairman Kline. New digs here. The system is still the 
same. We have the old red, yellow, green light system. It 
should be right there in front of you. Take the time that you 
need for your testimony. I will not gavel you down while you 
are giving your testimony but please be mindful that we are 
going to have a lot of member who want to engage in the 
discussion, and then again I will remind my colleagues that 
members will have five minutes unless I have to shorten the 
time as the time goes on.
    Mr. Scott. Chairman, could I correct my testimony? I was 
just advised that the 600-and-some billion-dollar tax cut was 
approved by the Senate and went into law, so there.
    Chairman Kline. It stands corrected. So again to my 
colleagues, please do not push the limits on time. As we saw 
yesterday, we can run out of time very quickly and I would 
rather not get down to 3 minutes per member so be mindful of 
the time as you go forward and try not to put the Secretary in 
the position of having 10 seconds to give a 5-minute answer. 
That may be the only time, Secretary, that you may hear me drop 
the gavel is if you are in the process of understandably giving 
a 5-minute answer where you are given 10 seconds. With that 
understanding, we are ready to go, Mr. Secretary recognized.

    TESTIMONY OF HONORABLE THOMAS E. PEREZ, SECRETARY, U.S. 
             DEPARTMENT OF LABOR, WASHINGTON, D.C.

    Secretary Perez. Thank you, Mr. Chairman, good morning and 
thank you for this opportunity to be here and I want to start 
out by saying thank you for your distinguished service. I was 
very saddened when I learned of your decision to retire and it 
has been an honor and pleasure working with you. Thank you for 
your service to the Nation and thank you for your service to 
your constituents. It has really been a pleasure working with 
you. It has been a pleasure working with everyone on this 
committee. We have done a lot of different things, whether it 
is Mr. Guthrie and ESOPS, Congresswoman Foxx and 
apprenticeship, Ranking Member Scott and minimum wage, and so 
many others, Congressman Courtney and so many issues, so I want 
to say thank you.
    We do not always agree on everything as this hearing I 
suspect may illustrate but we do agree on a lot and we will 
always search for that common ground. And as we prepare for the 
final 10 months of this administration, I do think that it is 
important to reflect on where we have been, where we are, and 
where we need to go.
    President Obama inherited an economy in freefall and the 
three months before he took office, the economy hemorrhaged 
roughly 2.3 million jobs. Seven years later, we have 
successfully climbed out of the worst economic crisis in 
generations although there is undeniable unfinished business.
    We are now in the middle of the longest streak of private 
sector job growth on record: six straight years to the tune of 
14.3 million new jobs. Unemployment is down from 10 percent to 
now 4.9 percent. Auto sales reached a record high last year. 
And again, as I mentioned, while we still have the unfinished 
business of ensuring shared prosperity for everyone, we have 
made undeniable progress and I am proud of the role that the 
Department has played in this progress because our work is 
critical to fortifying the basic pillars of the middle class 
and education and training that allows you to move up the 
ladder of success: healthcare that is affordable and 
accessible, a fair day's pay for a hard day's work, a roof over 
your head, and a mortgage that will not go underwater, and the 
opportunity to save for a secure and dignified retirement.
    These pillars took a beating during the Great Recession, 
but I have never felt more confident in the resilience of our 
economy, our workers, and our businesses. The Labor 
Department's work continues to help sustain this recovery while 
addressing the unfinished business of ensuring shared 
prosperity. For instance, between 2008 and 2014, our employment 
and training program served an average of 14 million Americans 
a year, helping more than half of them get new jobs, and the 
new Workforce Innovation and Opportunity Act will make us that 
much more effective. I am very grateful to the members of the 
committee, to the bipartisan support, the overwhelming 
bipartisan support in passing this new law, and we continue to 
work with our State and Federal and local partners toward full 
implementation. WIOA is the blueprint for a modernized and 
streamlined workforce system that will better serve the job 
seekers and employers alike.
    I often refer to this as our Eisenhower moment. Just as we 
built the interstate highway system in the mid-20th century, 
today we are building the 21st century skill superhighway. It 
has dedicated lanes for different populations, helping everyone 
reach their ultimate destination, a middle class job and 
prosperity for workers, businesses, and communities alike. One 
of the on ramps on that superhighway is apprenticeship. Every 
public dollar invested in this earn while you learn model 
provides a $27 return. That was one of our recent studies and 
that is why the President has challenged us to double the 
number of apprentices in the coming years while transforming 
the system by diversifying and expanding to new industries. 
Last year, we made the largest ever Federal investment in 
apprenticeship, $175 million in grants, and I appreciate the 
$90 million that Congress appropriated for this fiscal year.
    We are making sure apprenticeship is accessible in every 
community, every ZIP Code, and our mission does not just help 
people find good jobs but makes sure that these jobs pay a 
family sustaining wage. That is why we continue to advocate for 
an increase in the minimum wage, strongly support the Scott-
Murray proposal, and we will continue to work with State and 
local governments on this issue. We also continue to work on 
overtime because overtime stands for the simple proposition 
that if you work extra, you should be paid extra. It is a basic 
principle and the final rule that we have worked on and had a 
very inclusive process about was submitted to OMB earlier this 
week for review.
    Our Wage and Hour Division has also cracked down on wage 
theft that threatens the livelihoods of so many people. Since 
2009, the Wage and Hour has been able to secure back wages 
totaling $1.6 billion for 1.7 million workers. I believe it is 
a false choice to suggest that we can either have economic 
growth or workplace safety. We can and must have both and this 
administration has been vigilant about making sure that workers 
do not have to risk injury or illness in order to earn their 
paycheck while working closely with employers on this matter. 
In the 1930s, Francis Perkins identified silica dust as a 
dangerous and deadly hazard and called on employers to protect 
those workers.
    Finally, 80 years later, our OSHA office is close to 
issuing an updated rule that will significantly reduce workers' 
exposure and save lives. Our mine safety office has done 
remarkable work over the last 7 years. Thanks in part to their 
efforts, there were fewer mining fatalities in 2015 than any 
other year in history.
    We continue to implement the historic coal dust rule and 
since it took effect, about 99 percent of the dust samples 
taken by MSHA and coal operators are in compliance.
    We are also charged with empowering workers not just during 
their career but after their careers are over and we have done 
a lot of work through our Employee Benefit Security 
Administration toward this end.
    One such issue is the proposed Conflict of Interest Rule 
which I suspect we might discuss here today, just a guess, and 
it is based on a commonsense principle: if you want to give 
advice, you have to put your client's best interest first. As 
Jack Bogle, the founder of Vanguard, said: ``I learned early on 
in the business that when you put your customers first, it is 
great for your customers and it is great for business.'' And so 
we will continue to work on that rule.
    I have had an opportunity in this job to make a lot of 
house calls and those house calls have inspired me to continue 
to do my work. I met with a woman in Connecticut named 
Katherine Hackett. She had been out of the workforce for such a 
long time, but for the grace of God could have gone any of us, 
but as a result of the leadership of her member of Congress, 
the work of Match.com, otherwise known as the Department of 
Labor, our State and local partners, she now has a full-time 
job again, and she is thriving.
    I have seen so many inspiring stories like Katherine 
Hackett's, but I have also visited people whose boat has not 
yet been lifted by this rising tide, people like the janitor in 
Houston, Astro Verta, who is struggling to get on with less 
than $9 an hour. The fast food worker in Detroit who was 
sleeping in her car with three kids the night before I met her 
because she had been evicted from her apartment. Allen White, 
the person I met again last week in my hometown of Buffalo, 
whose life is being very much inhibited by silicosis. These 
challenges that they confront keep me up at night. And the 
opportunity to help them and to create shared prosperity and an 
economy that works for everyone for everyone,to work with you 
whenever possible, this is what gets me out of bed with a hop 
in my step every morning, aside from the fact that I had a knee 
replacement so I have a bit of a hop from time to time.
    We have 310 days left until the weekend and I want to make 
sure that we do not simply count the days but we make every day 
count. And I look forward to working with you toward that end, 
Mr. Chairman, and thank you for your time and thank you for 
your courtesy and thank you for your long and distinguished 
career of service.
    [The statement of Secretary Perez follows:]
    
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    Chairman Kline. Thank you, Mr. Secretary, for your 
testimony, your kind words about my retirement. I find that 
when you announce your retiring, you get friends everywhere and 
I do not understand exactly what that means.
    Let me start, Mr. Secretary, by thanking you for your 
support and your hard work as we push through the bipartisan 
Multiemployer Pension Reform Act in the closing days, 
literally, of 2014, December.
    I think that action has helped secure the retirement of 
millions of workers and retirees, and you and the rest of the 
Administration were instrumental in its passage. Our work is 
far from over. As the administration noted in its budget, 
further reform is needed to strengthen the finances of the 
Pension Benefit Guaranty Corporation, which you chair. We share 
the administration's commitment to ensuring that this important 
Federal backstop is well funded, but we need to do even more, 
so I am committed to working with you and Treasury Secretary 
Lew, Ranking Member Scott, and others to reach an agreement on 
a package of reforms that will shore up the PBGC and give 
employers and workers options for new benefit plans, such as 
composite plans. So I am committing to you and to my colleagues 
here that I am fully engaged in trying to get this done, but 
time is growing short, so I am asking for your commitment, sir, 
to working with us to try to get these reforms finished this 
year.
    Secretary Perez. We have had a number of conversations both 
with you and with Leader Pelosi and over at the White House and 
at the PBGC, and we have a team of folks that have already been 
engaged bicamerally and in a bipartisan way to address these 
issues. As you know, the multiemployer pension system at the 
PBGC is in the red in a big way and we recognize that there are 
many tough decisions to be made and we commit to building a big 
table so that we can have and continue the dialogue that we 
have been undertaking.
    Chairman Kline. And I appreciate that and I absolutely take 
you at your word. Just a reminder to all of us, this has to be 
a bipartisan effort, and we have to get with the program as 
they say because we are running out of time and it would be a 
shame to start all over. On another subject, we are looking at 
the joint employer policies and the discussions surrounding 
them that are coming from your department and from other 
agencies. The Equal Employment Opportunity Commission has filed 
an amicus brief with the National Labor Relations Board and the 
Browning Ferris supporting a broader definition of joint 
employer, wage and hour, and your department is engaged. I 
think the actions within your department as well as those taken 
by the NLRB and EEOC demonstrate that the administration is 
aggressively trying to expand the definition of joint employer 
across all labor and employment laws and, frankly, without 
concern for the negative impact of the franchise model that has 
served us so well.
    I am greatly concerned by the likely impact of these 
efforts on workers and their employers, particularly smaller 
businesses. Can you explain DOL's role in what seems to be the 
administration's concerted effort to expand the definition of 
joint employer?
    Secretary Perez. I would respectfully disagree that we have 
been attempting to expand the definition of joint employer. We 
have been applying joint employer both in the OSHA context and 
in the Wage and Hour context when the facts so support. So, for 
instance, we had a case involving a gentleman named Daquan 
Davis. He completed his Job Corps program, he got a job at 
Bacardi Rum down in Florida.
    His first day on the job was his only day on the job 
because he was so ill-trained by the company, there was a job 
service through which he got the job, he was so ill-trained 
that he literally died on the job, day one. And our 
investigation in that case showed that both the staffing agency 
that placed him and the company where he died on their assembly 
line that day bore a responsibility, so those were the facts in 
that case. We follow the facts and go where the facts lead us.
    Chairman Kline. Well, that is kind of a scary story and one 
we do not like to hear, but I can tell you that there is a 
great deal of concern in the business community by franchisors 
and franchisees that it looks like there is an expansion of 
that definition. I understand the Wage and Hour Division 
requested a 22 percent increase in its budget, the largest 
increase within your department, and proposes to hire 300 full-
time employees to develop ``corporate and enterprise-wide'' 
enforcement. What is meant by corporate and enterprise-wide 
enforcement?
    Secretary Perez. Well, the Wage and Hour Division has a 
very critical mandate, and their mandate is to make sure that 
when you work a full day, you get paid a full day wage. We had 
a study conducted recently just in two States that showed that 
the amount of wage theft was $1 billion alone in the State of 
California and New York. Wage theft is a huge problem in this 
country. The Wage and Hour Division has worked very carefully 
and, by the way, very closely with employers because we get 
complaints frequently from employers about the fact that other 
employers are misclassifying employees and it creates an 
unlevel playing field because they cannot compete for contracts 
when you have someone else cheating, which is why we have 
memoranda of understanding with 29 States ranging from Utah, 
Texas, Arizona, to Massachusetts, as well. So I believe firmly 
in the work of the Wage and Hour Division and we work very 
collaboratively and when--
    Chairman Kline. Well, my time has expired, and I have got 
to gavel you and me down at the same time. I am re-expressing 
my concern about this increase in the number of employees and 
if the Wage and Hour might be contemplating the expansion of 
the enforcement of the franchisor/franchisee relationship. 
Those concerns remain, and I am sure we will continue to talk 
about it. Mr. Scott, you are recognized.
    Mr. Scott. Thank you. Thank you, Mr. Secretary. You 
mentioned wage theft. How much of that is due to the fact that 
many employees do not even get a pay stub so they cannot 
calculate what their wages would be?
    Secretary Perez. Well, that is certainly part of the 
challenge in wage theft, Congressman Scott, and I know when we 
commissioned that study, a lot of folks who are victims of wage 
theft do not even know they are victims of wage theft because 
they have a difficulty figuring that out. We have 135 million 
workers, 7 million employers, and so trying to do the work in 
the Wage and Hour Division with the complement of resources we 
have creates challenges, undeniably.
    Mr. Scott. Thank you. You had mentioned the Conflict of 
Interest Rule, one of the problems in the discussion is that 
the rule is not final. When can we expect a final rule?
    Secretary Perez. Well, the rule was sent to OMB, I believe, 
six weeks ago or something like that. I may be off by a couple 
of weeks, so we hope to bring it to conclusion as soon as OMB 
completes their review, but sometime in the near future.
    Mr. Scott. And an alternative was suggested one introduced 
by the gentleman from Tennessee. Are you familiar with that 
proposal?
    Secretary Perez. Yes, I am.
    Mr. Scott. Why is it insufficient?
    Secretary Perez. Well, we have reproposed--the proposal 
right now is a reproposal because we introduced a regulation in 
2010 and then we withdrew that regulation. And I made a 
commitment when I was nominated to take this slowly, build a 
big inclusive tent, listen to people like Congressman Guthrie, 
who had a concern about ESOPS. So we took ESOPS out of our 
proposal and we have moved forward in a very deliberate way, in 
a very inclusive way. And the problem right now that I have is 
we are six years into this and our goal here, our North Star, 
is to ensure that we have an enforceable best interest 
standard. And meaning no disrespect to Congressman Roe, for 
whom I have great respect, and others, I actually think that 
those bills actually move the status quo backward in material 
respects, and so we need to move forward and we have had a very 
inclusive process. Every time someone has said can you talk to 
one of my constituents, we have done it, and sometimes we have 
done it two, three, four times because every time I talk to 
someone, I learn more and we become more informed.
    Mr. Scott. One of the groups that has the trouble getting 
jobs would be ex-offenders. What does your budget do to help 
ex-offenders find jobs?
    Secretary Perez. We have a remarkable--one of the most 
exciting things about this job is really the bipartisan 
coordination that we have done through our so-called RExO 
grants which have enabled us to provide remarkable 
opportunities and, in addition to that, we have really been at 
the tip of the spear on innovation, so we have worked with 
cities and counties to put one-stop centers in city and county 
jails. We did that in Montgomery County when I was in local 
government and if I brought the warden here today, he would 
tell you that made his jail safer, that enabled people to get 
more jobs. And the most important thing we could do, or one of 
the most important things we can do, if we wanted to reduce 
recidivism is make sure that when people come out of jail, they 
have the skills to compete for the jobs of tomorrow, and so I 
am very excited about what we are doing. We work very closely 
with the Department of Justice as well, so that we can 
synergize our grant-making, and we work with State and local 
partners, our nonprofit partners, our faith leaders as well, 
and we are making tremendous progress, and our budget request 
does include funding to continue to ramp that up.
    Mr. Scott. Thank you. Can you say something about the 
adequacy of criminal penalties and mine safety violations, 
particularly when someone knowingly violates safety 
regulations, placing workers at risk of serious injury or 
death?
    Secretary Perez. Well, those issues are the case both in 
the OSHA context and in the MSHA context. We had a horrific 
case in the OSHA context where a worker was literally dissolved 
to death and as a result of that, there was a spill into the 
nearby lake. Our fine was something like $50,000 and the EPA 
fine for killing the fish was in the millions, so the fish had 
more protection than the people. And in the mine safety 
context, the Upper Big Branch disaster is probably a notable 
example of chronic negligence all the way up at the top of the 
organization. And the reason that happens in cases like that is 
because when you perceive that there is no more than a slap on 
the wrist, then you tend to violate the law. If you have a 
speed limit sign that says 45 miles an hour, parentheses, self-
enforcement, you are going to have a lot of speeding.
    Chairman Kline. Gentleman yields back. Dr. Foxx?
    Mrs. Foxx. Thank you, Mr. Chairman, and welcome Secretary 
Perez. I am extremely concerned by the Department's repeated 
delays in issuing regulations implementing the Workforce 
Innovation and Opportunity Act, or WIOA. You have been very 
complimentary about it, I appreciate the chairman's positive 
comments. The most recent delay of final regulation is even 
more concerning given the Department will be reviewing and 
approving State plans prior to the issuance of final 
regulations.
    This includes negotiating levels of performance which will 
be used to determine whether a State meets the requirements of 
the law. It is outrageous that the Department would hold States 
accountable to rules that have not been finalized.
    Given final regulations have yet to be issued, what basis 
is the Department using to approve State plans?
    Secretary Perez. Congresswoman Foxx, as I mentioned to you 
in our phone call, we have been working very, very closely with 
States since the passage of WIOA, and I am very excited about 
the work that we have done. We did literally 41 pieces of 
operating guidance, 28 technical assistance webinars, and your 
teams have been involved in every step of the way.
    The majority of WIOA is already in place. It was 
implemented a year ago. What remains are the accountability 
mechanisms. And the good news there is because of the work that 
we have been doing together with States and with the help of 
your teams, you look at the number of States, over 40 States 
have WIOA compliant State boards. Roughly half of the States 
have already prepared draft plans, and, most importantly, the 
stovepipe implosion that WIOA contemplates, making sure that we 
build one big sandbox of opportunity so it is not the Education 
Department one way and the workforce people another way, making 
sure we are working together. We have already issued State plan 
guidance that tells States what they need to do and we talk to 
them literally on a weekly basis. So I am very excited about 
the progress and I am very appreciative because the regulations 
were over 1,800 pages and they took a lot of work and nobody 
took any Thanksgiving or Christmas holidays among our career 
teams and, frankly, I think WIOA is a good news story because 
we are moving forward, we are moving forward together. There is 
a ton of excitement in the field and I am very proud of the 
work that we are doing and we look forward to continuing that 
collaboration with you and others.
    Mrs. Foxx. But, Mr. Secretary, these things are being 
negotiated one-to-one by you and I think that exhibits a 
cavalier attitude on the part of the Department regarding the 
Administrative Procedures Act and the requirements of the law 
relating to rulemaking. You know, Congress is prescribed a 
specific process for the promulgation of regulations to allow 
for public comment and congressional oversight. The de facto 
issuance of final regulations through the approval of State 
plans circumvents this process by making the rules effective 
before providing Congress with the opportunity to review them. 
And even in your own comments today, and I have made a list of 
things you all do, executive orders, guidance letters, program 
letters, notices, administrator's interpretation clarifying, 
memorandum, directives, reporting requirements, enforcement 
guidance documents, corporate and enterprise enforcement, 
technical assistance webinars you just mentioned, so all of 
this goes around the rulemaking process which we think you 
should be doing. And it appears to us that you do not want to 
publish official rules so that the public can comment on them. 
You do new programs--the chairman mentioned new programs that 
we see as a way to get around this and this morning, I had a 
meeting with a manufacturer from my district and he is on one 
of the boards and he said getting change on those local boards 
is like pushing a string.
    That they cannot get the changes because they do not have 
the guidelines and the accountability measures. That is what we 
want to see, what are the accountability measures for these 
programs?
    Secretary Perez. With all due respect, we have been 
anything but cavalier. We have been working relentlessly with 
States. And, as someone who ran a State agency, one of things 
that always disappointed me was when the Federal Government 
would issue guidance or regulations without including us, and 
so my direction to the team--and remember Congress debated the 
reauthorization of the Workforce Investment Act for 10 years 
and then after that 10-year discussion gave us 1 year to do 
everything that we needed to do and we built a very inclusive 
table.
    The State plan guidance that I am referring to was made 
public and we took public comment on it. Our final rules will 
be out in June, and we have been working very closely with your 
teams, with others, and we have had a remarkably constructive 
relationship. There is no effort or intent to do anything other 
than make sure we implement every aspect of the Workforce 
Innovation and Opportunity Act to the fullest extent possible. 
And the good news, Congresswoman, is we are making tremendous 
progress. We are building that skills superhighway. We are 
building an ecosystem where for the first time in States across 
this country, you have the folks who administer TANF are 
talking to the folks who are doing education, are talking to 
the folks who do the workforce, and you see the number of 
States who are coming in with those unified plans. That is 
exactly what you wanted and that it is a good thing.
    Mrs. Foxx. Thank you.
    Chairman Kline. The gentlelady's time has expired. Mr. 
Courtney?
    Mr. Courtney. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for your testimony and your, in my opinion, amazing 
service over the last couple of years. I appreciate your shout 
out to Katherine Hackett from East Haddam, Connecticut, who is 
really kind of an iconic story of the Great Recession, who 
again worked her whole life, raised two great sons who are 
officers in the U.S. military and, unfortunately, lost her job 
and was really struggling. The outreach, as you point out, in 
terms of helping her find the right connection as well as 
supportive employment programs which kind of gave the employer 
that extra boost to get her back into the workforce, which is 
not totally, withered away, and she is now employed full time 
doing a great job as a business manager at an orthopedic office 
which maybe your knee might get some consultation there if you 
need it. If you are in the territory.
    Secretary Perez. I am taking notes.
    Mr. Courtney. Again, I just want to follow up on the last 
round of questioning, which is the WIA Act, which I give 
Chairman Kline all the credit in the world for moving a bill, a 
law that had not been changed since the Clinton Administration 
and modernizing the structure and the focus has been, in total, 
hitting all cylinders in Connecticut.
    Down the hall right now, the Secretary of the Navy is 
talking about the fact that in the last seven years, the Navy 
has put in under contract 84 ships and submarines. The prior 
eight years, the prior administration, it was only 41, so you 
can imagine what that means in terms of the industrial base, 
whether it is Connecticut or Virginia or California, is that we 
have really had to move fast in terms of metal trades, 
engineering, and design. In January, Electric Boat announced 
1,500 hires this year to again accommodate that demand signal 
from the Navy and it has been all hands on deck, which the WIA 
and the workforce board is today producing results, which would 
not have been the case without passage of that law and without 
by the way the omnibus which has given the Workforce Innovation 
Funds that are now combining community colleges, tech schools, 
and the employer who are now working together to fill this huge 
workforce need.
    I mean, if you go online today, there is probably about 300 
or 400 job openings right now as we are sitting here in this 
room. That is just for the shipyard; if you go there are 470 
suppliers in Connecticut and there are thousands across the 
country. They were in town just a couple of weeks ago, the 
submarine industrial base coalition, so the timing of this new 
mechanism, as well as the resources out there for again, just 
take one little sector which is shipbuilding, a much neglected 
part of the U.S. economy. You guys are at the center of trying 
to solve that problem, and I am sure that is happening in other 
parts of the country as well as eastern Connecticut, and I do 
not know if you want to comment further.
    Secretary Perez. Well, I remember my trip vividly, 
Congressman Courtney, to Electric Boat. I remember my trip with 
Congresswoman Foxx to a number of locations in her district. I 
remember my trip with Chairman Rogers to West Virginia, and I 
met a bunch of displaced coal miners who are now working in 
coding at a place called Bit Source and their motto was, ``From 
coal to code.'' And what all of those three visits have in 
common is that the workforce system is being a remarkable 
engine of partnership, innovation, and success. We have 5.6 
million job openings right now and every conversation I have 
with employers is a good conversation.
    I am bullish about the future. I want to grow my business 
and one of my biggest challenges is making sure I have the 
skilled workforce to compete. One of the best ways to address 
wage stagnation is to up-skill people and that is why I see 
happening across this country in red, blue, that is totally 
irrelevant to this conversation. It is very exciting and that 
is why I am so appreciative of the work that you have supported 
in apprenticeship because that is another way.
    Apprenticeship is the other college, except without the 
debt, and so there is so much we can do to make sure we are 
building the skill superhighway so that we can help people who 
want to punch their ticket to the middle class and employers 
who want to grow their business and this is really going to be 
one of your legacies, Mr. Chairman, as the chair of the 
committee, is building that skill superhighway.
    Mr. Courtney. Thank you. And its again, I talked about 
maritime and the same is true in aerospace both in the civilian 
and military side. We are going to have huge workforce needs 
out there and there really just is no other mechanism other 
than WIA and the Department of Labor to help employers fill 
those really good paying, high value positions. And I yield 
back.
    Secretary Perez. I agree.
    Chairman Kline. Gentleman yields back. Dr. Roe?
    Mr. Roe. Thank you, Mr. Chairman, and thank you for being 
here.
    Secretary Perez. Good morning sir. Good to see you.
    Mr. Roe. I am going to start by just bringing over some 
facts. Today, 20 percent of Latinos have greater than $10,000 
in retirement and 29 percent of Americans, according to GAO, 
have nothing for retirement. Some studies show as much as 50 
percent of people have no retirement savings.
    So I think--and 75 percent of all African Americans are in 
the bottom quartile of retirement. And I do not believe that 
your rulemaking that you are doing on fiduciary and other 
things, I do not think your intention is to decrease financial 
advice of low-income investors. I do not believe that and I do 
not think that you believe that, but there are some facts out 
there that we cannot ignore now. And for many years, you have 
stated that your goal is promoting the Department's fiduciary 
rulemaking was to ensure that all retirement advisors act in 
the best interest of savers when giving investment advice, and 
dating back to our first hearing in July of 2011, I publicly 
agreed with that goal. Today I still agree with it. In fact, 
Republicans and Democrats have long agreed that we need to look 
at ways to strengthen protections for those saving for 
retirement, and that is why I am disappointed that the 
Department publicly opposed the bipartisan legislation 
Affordable Retirement Advice and Protection Act and its 
companion, the SAVERS Act.
    This legislation would make the stated goal of best 
interest standards a reality without prohibiting advice, the 
so-called best interest contract exemption. DOL proposed to 
make it harder for working families to save and plan for 
retirement. We have no indication that the final rule will be 
any different and that is why Congress should act in a 
bipartisan way and let me just give you a couple of things.
    Washington Post just said, I think it was yesterday in an 
editorial, supporting the fiduciary rule is having more plusses 
than minuses. I think they would definitely support my bill 
that the exemption is unworkable. The investment industry's 
strongest point, that its proposed exemption and the 
administration offered to placate opponents is so vague and 
unworkable that few, if any, companies would take advantage of 
it. And a study just published from the UK, I think this week 
said we believe and this is in the UK that the new regulation 
they passed in 2013 has brought about positive step changes in 
the quality of advice available to those with larger amounts to 
invest, which is what we said all along. However, steps need to 
be taken and make the provision of advice and guidance to the 
mass market more cost-effective and, at present, this high 
standard of advice is primarily accessible and affordable only 
to the more affluent in society. Would you now reconsider, with 
this new information, your opposition to our commonsense 
legislation?
    Secretary Perez. Congressman, let me say a few things. 
Number one, in our Ozzie and Harriet universe, this issue was 
irrelevant because people work 30 years, they had a defined 
benefit plan, and at the end of that 30 years, they had a pen, 
a party, and a pension.
    Today, in a world of the $11 or $12 trillion of IRAs and 
401(k)s, people are responsible for their own decisions. And as 
Jack Bogle, as I noted before, said when you put your 
customers' interests first, it is good for your customers and 
it is good for business.
    You said something that I wanted to correct, which is that 
you indicated that there is no indication that the final rule 
will be different. When we withdrew our first rule, we 
undertook a series of meetings and listening sessions. Our 
first rule, for instance, had a provision pertaining to ESOPS. 
We heard a lot about that. We heard a lot of concerns and as a 
result of that, our NPRM took that out. I have said repeatedly 
and publicly our North Star is an enforceable best interest 
standard--
    Mr. Roe. Specifically, the best interest contract 
exemption. I appreciate that change in the rule, but what about 
the best interest contract exemption, which seems to be 
unworkable?
    Secretary Perez. Well, again, our North Star is an 
enforceable best interest rule, best interest standard. We 
heard from a number of people who said there is a more linear 
path to that. Our response: show us the path, and that is why 
we got 300,000 I think comments. We read every single one of 
them and I look forward, at the conclusion of our process, to 
briefing you and explaining to you here was the proposed rule, 
here were the comments we got, here are the changes we made. 
And when we reach the end of the process, I commit to you that 
we will do that with you and with anyone else who has an 
interest.
    Mr. Roe. I am glad to hear. The independent investment firm 
Morning Star originally estimated that your proposal would cost 
2.4 billion every year in compliance cost which will be passed 
on to me, the retirement saver.
    Moreover, the Morningstar Report also said that the wealth 
management firms would no longer serve low-income savers 
currently holding up to 600 billion low-balance IRAs. The big 
chunk of that business will go to robo-advisors, which I think 
is a bad idea.
    But before my time is expired, I did want to say one thing. 
And this is off the fiduciary rule, but the most productive--I 
was in Beijing, China, 2 years ago with the committee; 1.4 
billion people live in China and 1.4 billion people do not 
produce as many goods and services as the American worker does 
with 300 million people. The most productive worker in the 
world is the American worker and we need to be telling our 
worker that more because they feel very beat down. With that, I 
yield back.
    Chairman Kline. Gentleman yields back. Mr. Sablan?
    Mr. Sablan. Thank you very much, Mr. Chairman, and . . .
    Secretary Perez. Good morning, good to see you again.
    Mr. Sablan. Thank you for being here, Mr. Secretary Perez. 
The Northern Marianas Mariana Islands as you know, my district 
faces a different problem than much of America. We actually 
have too many jobs and not enough workers and it is not as if 
people can get in their car and drive across the State line or 
county line and be there to occupy these jobs. Well, not enough 
U.S. workers, so we have to bring in about 10,000 workers from 
Asia to support our economy.
    Two years ago, Mr. Secretary, you extended a program that 
allowed those foreign workers into the Northern Marianas and I 
think that was the right decision. Personally, I would prefer 
we did not need these workers, that we had enough, but I thank 
you for doing so because I also know that you probably had the 
same personal preference as I do, but you based your decision 
on a study by economists and others in your department. And you 
concluded that there were not enough U.S. workers to serve the 
economy in 2014 and would not be for at least another five 
years.
    I have three questions actually. First, can you tell us 
what your department is doing now to help develop more U.S. 
workers in the Marianas, either through training people already 
there or by making the job opportunity known to U.S. workers, 
elsewhere in America?
    Secretary Perez. Sure, over the last four fiscal years, the 
CNMI has received roughly $6 million in grants from the 
Department and those grants are designed to do for the 
workforce system there what we are doing elsewhere across the 
United States. We look forward to working more--There are 
number of competitive grant opportunities, and I am more than 
willing to have our ETA staff talk to you about competitive 
grant opportunities. We have a cadre of career staff that 
reviews those requests or submissions and we also visited the 
CNMI in 2015 or 2016 to provide technical assistance, so we 
want to make sure that we do everything in our power to help.
    Mr. Sablan. We appreciate it and we need all the help you 
can give us, Mr. Secretary. My second question is, in extending 
the foreign worker program, you requested the commonwealth 
government update your department every year about its 
``efforts to locate, educate, train or otherwise prepare U.S. 
citizens to work in the Marianas.'' This update were so your 
department could be prepared to decide about extending the 
foreign work program beyond 2019. The law no longer allows you 
to extend the program. I understand that, but are you still 
expecting to get the updates, Mr. Secretary?
    Secretary Perez. Well we certainly, Our North Star here is 
U.S. workers. Anything we can do to help U.S. workers is what 
we try to do. We recognize that there were not enough so that 
is why we granted the transition until 2019, and those reports 
are very critical in enabling us to make that judgment about 
the North Star that I referred to. How are things going with 
the development--
    Mr. Sablan. Are you expecting to get the updates now that 
the 2019 date is no longer flexible?
    Secretary Perez. Yes, we are expecting to get the updates.
    Mr. Sablan. Okay, thank you, thank you very much, sir. And 
so here is my final question, Mr. Secretary. I know the 
government has been working on a study of what our labor needs 
will be going forward. They are looking at development plans 
proposed to demographics, the skills that we currently have, 
and I suppose that we can use this information to update you, 
but it is also for their own planning purposes and it must be 
very similar to the analysis that your department did prior to 
advising you to extend the foreign worker program. And so my 
question is whether you would be willing to share with the 
Marianas commonwealth government the technical expertise you 
have in your department to do this work, that so we do not have 
to reinvent the wheel, as they say? Maybe a yes--
    Secretary Perez. We would look forward to working with you 
in any way that we can to help build a strong economy in the 
islands.
    Mr. Sablan. I appreciate that and whatever you could do to 
help us would be very--the labor needs and training efforts 
will certainly be helpful to us here in Congress even in 
assessing whether to extend the foreign worker program, the CW 
as we call it, which is something I think we would have to look 
at probably in the next Congress. Mr. Secretary, thank you very 
much for your service to our country, and, Mr. Chairman, I 
yield back my time.
    Chairman Kline. Thank you, gentleman. Mr. Walberg?
    Mr. Walberg. Thank you, Mr. Chairman, and welcome, Mr. 
Secretary.
    Secretary Perez. Morning, morning Mr. Chairman. Good to see 
you again.
    Mr. Walberg. You are a long way off down there--
    Secretary Perez. It does look a few time zones away I must 
admit.
    Mr. Walberg. Especially looking through Mr. Byrne's head 
here.
    Secretary Perez. Well, he has hair so unlike me, so it 
might make it a little harder.
    Mr. Walberg. I am jealous. Mr. Secretary, there are many 
small retail and restaurant businesses who employ younger 
managers, who currently earn salaries that are less than 50,000 
per year. I am not concerned that we would increase the 
overtime. It was probably needed, the wage, but 50,000 causes 
me concern because as I look at some of the reports, over 50 
percent of retail managers are female and many are working 
mothers who appreciate the flexibility and other things that 
come with salaried status, the resume builder, the experience 
opportunities as well as using their skills allowing these 
managers highly valued quality time with their children.
    The pending overtime regulation would require that many of 
these managers be converted to hourly non-exempt status which 
effectively eliminates much of the flexibility working women 
and, may I add, men value. Is this outcome the outcome that the 
President and your department desire in regard to the 
flexibility in particular as it would impact managers who are 
currently exempt and accustomed to having greater flexibility 
than their non-exempt counterparts?
    Secretary Perez. Sure, because of the status of the reg, 
there are limits to what I can say, but what I can say is this, 
nothing requires hourly status. You can be salaried and get 
overtime, there are a number of ways to do it and the process 
that we undertook was to make sure that we sat down and 
listened to--and before we even did the formal notice and 
comment, I personally participated in a number of meetings with 
retailers, large, small, in between, and I asked them among 
other things, what did you do back in 2004 when the Bush 
Administration changed the rules so that we could learn from 
that and that was very instructive. I met a person who works 70 
hours a week and I remember somebody asked when was the last 
time you had a vacation and they said vacation? Vacation, 
vacation is when I work only 40 hours a week. And what we 
learned is there are a lot of folks who are working 20, 30 
hours and, frankly, those hours are effectively not compensated 
because of some of the situations.
    Mr. Walberg. But certainly you also heard testimonies I 
have heard all across my district of people who understand 
that. That is part of being salaried. There are also some that 
we have had in front of us who were assistant managers who 
during times worked less than 8 hours a day based upon the 
flexibility they had and sometimes 80 hours a week they would 
work, yes, but the options that they had were very important to 
them. And like I said, if we had gone from 23,000 to say if we 
kept the same formula that was used to bring it to 23,000, we 
probably would have been at 36,000. I think that might have 
been more justifiable, but to move it up to 50-plus is a real 
challenge to the small businesses, but more importantly I think 
to these growing managers that want this opportunity and 
flexibility that gives because sometimes that flexibility is 
far more important than even the salary level.
    Secretary Perez. Well, one thing that I again would commit 
to you is when the final rule is published, we will have our 
team come to you and anyone else to explain what it means, to 
explain what the options are, to explain the flexibilities that 
exist--
    Mr. Walberg. I look forward to that, but I also do not look 
forward to the potential fallout if it goes the way that we 
have heard.
    Silica, let's move on here, Mr. Secretary, quoting from 
your testimony, ``New silica permissible exposure limit, PEL, 
is expected to be issued shortly.'' In context with the fact 
that silicosis is down significantly with present standards 
except for a few unique, and I mean unique, hotspots in 
underground mining, in context with the present PEL, are you 
confident the PEL and the engineering controls mandated by the 
regulation will meet OSHA's legal requirement to promulgate a 
rule that is technologically and economically feasible? And 
again, in context with the fact as I understand it from the 
last testimony, we do not have measuring devices yet that can 
measure the new standard. Has that changed?
    Secretary Perez. Well, again, this has been a 20-year 
process of outreach, talking to NIOSH, understanding the 
science. And when we did the proposed rulemaking, we had I 
think over a week of hearings, and we heard from folks in the 
industry, we heard from scientists, we heard from all the 
stakeholders about what we need to do, and we heard from folks, 
like Alan White, who are living with silicosis. We heard from 
folks like Mr. Ward from Michigan, whom I met recently, whose 
father died at the age of 39 from silicosis. So we have built, 
as always, a very inclusive process and I am very proud of 
that.
    And one of the things we heard with frequency was you need 
to make sure that standards are flexible so that they can be 
achievable. We had this conversation in coal dust and we heard 
a lot of the same issues - 99 percent of the time--
    Chairman Kline. Sorry, the gentleman's time--both 
gentlemen's times has expired. Ms. Clark?
    Ms. Clark. Thank you, Mr. Chairman, and thank you for 
joining us, Secretary Perez. Last March, the Assistant 
Secretary of Labor for Occupational Safety and Health, Dr. 
David Michaels, wrote about a woman from Massachusetts named 
Guadalupe Gonzalez. She was injured on the job. After three 
surgeries, unable to return to her former work, and today she 
earns 60 percent of the former salary that she had, and she is 
only one of the estimated 3 million Americans who will suffer 
both physically and economically due to on-the-job injuries. 
And last June, OSHA released a report examining the plight of 
injured workers and detailing how changes in State-based 
workers compensation insurance programs have made it 
increasingly difficult for injured workers to receive full 
compensation with employers providing only 20 percent of the 
overall financial cost of workplace injuries.
    When employers are no longer responsible for covering the 
full cost of these workplace injuries, what effect are you 
seeing overall on workers' safety?
    Secretary Perez. Well, one of the basic rights that we have 
in any workplace is the right to be safe and sound and what we 
have seen and, frankly, an alarming trend data across the 
country and the example you cite I wish were an outlier, but it 
is not. Is that one of the emerging pathways to poverty in 
America is a workplace injury and I have spent a lot of time on 
this issue and I appreciate the letter than you and others sent 
to us I think last--in 2015 about this issue. And there is, 
frankly, a troubling trend in States across the country to 
either privatize workers comp or dramatically reduce the 
benefits and that is not fair. It is part of the safety net if, 
God forbid, you get hurt on the job, that should not put you 
into poverty. And by the way, one of the impacts that we see is 
that then there are increased applications in Social Security 
disability insurance so the Federal Government is indeed having 
to bear the burden for these State efforts, and so that is why 
we have been assessing steps that we can take moving forward, 
understanding that a lot of these laws are really at a State 
level. ButBut I look forward to continuing this conversation 
because it is a sleeper issue that needs to be given light 
because it is unfair that people walk to work, go into work in 
the morning and then begin that pathway to poverty that day 
when they have that injury.
    Ms. Clark. Thank you, we look forward to continuing working 
with you on that, and I also want to thank you for your 
leadership around the issue of paid leave and, in particular, 
the Paid Leave Analysis Grant Initiative that you undertook and 
the paid leave partnership initiative proposal that is in the 
2017 budget. We remain one of the few industrialized nations 
that does not provide robust paid leave for our workers with 
only 12 percent of private sector workers get parental and 
family leave from their employers and only 4 in 10 have access 
to paid medical leave at work. I know that I hear when I go 
home that there is a cost to not providing paid leave. What are 
you hearing from the business community when they are making 
the case for paid leave?
    Secretary Perez. Well, the cost of doing nothing is indeed 
significant and you correctly point out that we are the only 
industrialized nation on the planet without a universal Federal 
paid leave law and, regrettably, we are the only industrialized 
nation on the planet where this issue has become partisan. It 
is not partisan anywhere else in the world and that is 
unfortunate. And I am thinking about the employer I met in 
Vermont, he provides paid leave, I did a round table with the 
Chamber of Commerce when I was up there talking about paid 
leave.
    He provides paid leave because he understands that it is a 
retention tool, it is the right thing to do and the smart thing 
to do. He has a lot of dual career couples and when someone is 
sick and the other couple's employer does not have leave, guess 
who takes the day off. His employees. That is not fair to him. 
We need a level playing field and we should not have a race to 
the bottom. And for those who say our labor force participation 
rate is going down, we need to take steps to go up. The most 
important piece of public policy that we could undertake to 
increase labor force participation is a Federal Paid Leave Law 
that would enable us to be at the same level of female labor 
force participation as Canada. We were equal to them in 2000. 
We are eight points behind them now. If we had kept pace, we 
would have 5-1/2 million more women in the workplace.
    Ms. Clark. Thank you. I yield back.
    Chairman Kline. Gentlelady yields back. Mr. Salmon?
    Mr. Salmon. Thank you. Secretary Perez, welcome, thank you 
for--
    Secretary Perez. Thank you for your distinguished service 
as well, by the way.
    Mr. Salmon. Extinguished is more probably where we are at 
right now, but I wanted to address a couple of things. First, I 
think it is pretty widely accepted that one of the most 
respected small business advocates in the country is the NFIB, 
and small business really is the backbone I think of America's 
economy right now. They have expressed some strong reservations 
about the overtime rule and said that it could adversely affect 
as much as 40 percent of small businesses. Are you factoring in 
their concerns into the final decision on this rule?
    Secretary Perez. Absolutely is the short answer, and before 
we did our formal rulemaking process, we did informal 
rulemaking process, we did outreach because I want to listen 
and learn, and we built a big table. We talked to businesses 
large, small, and in between about their experiences. We asked 
them about what happened in 2004 when the Bush Administration 
put in place a new rule. How did you adjust? What do you think? 
And so we have gotten a lot of feedback both during the 
informal outreach process and during the formal notice and 
comment process from small business and we appreciate that 
input.
    Mr. Salmon. I appreciate that. I know that one of their 
contentions is that the law of unintended consequences could 
end up forcing some of those small businesses to not hire 
salaried employees or not hire those positions and one of the 
unintended consequences could be a loss of jobs, so I just hope 
that is all taken into consideration.
    The second thing I wanted to talk about and I know it has 
already been addressed but in my time in Congress, and I am 
going on 10 years, I have never had a proposed rule that has 
sparked constituent outcry and ringing of the phones and 
sending of emails more than the proposed rule on the fiduciary 
rule and it is a bipartisan response.
    I am very, very concerned, folks, that our lower income 
investors and lower income portfolios, and I just want to make 
sure that the law of unintended consequences does not take 
place and it makes it so that the cost of doing business for 
them when hiring a financial planner is exorbitant and puts it 
out of reach for the common people.
    I understand that when people have multimillion-dollar 
portfolios, that they can afford that kind of a thing and the 
cost associated with this rule, but I have heard from folks on 
both sides of the aisle in a big, big way and I just wanted to 
share that with you, and I hope that is something that you take 
into consideration because the last thing that any of us would 
want to see is limited access for lower income middle class 
people that really want to participate in investing through 
401(k)s and IRAs and those kinds of things.
    Secretary Perez. Well, I think we have a shared interest in 
making sure that everybody has access to retirement advice and 
I have made the offer many times to folks and I will make it 
again. At the end of our process, we look forward to explaining 
what we did, the changes that we made, and how we intend to 
proceed. And I also look forward to anyone who is interested to 
listen to folks who right now are fiduciaries, they are doing 
this.
    They have a big book of small businesses and small savers 
and what they tell me repeatedly is to all those businesses who 
say they are no longer going to serve small investors, give 
them my email, give them my phone number because we have 
figured out how to do well and do good. And so I think it would 
be very helpful for folks to learn the lessons that they have 
learned because their businesses are going gangbusters and so I 
look forward to the continuing dialogue with you, Congressman.
    Mr. Salmon. Thank you, Secretary Perez, and I am going to 
do the unexpected and not wait for you to gavel me and I yield 
back the balance of my time.
    Chairman Kline. I thank the gentleman. Mr. Takano?
    Mr. Takano. Thank you, Mr. Chairman. Mr. Secretary, it is 
indeed a pleasure to hear from you this morning about your 
department's priorities. I agree that this administration has 
done a lot to be proud of and I am hopeful we can maintain the 
momentum in the years to come. I was pleased to learn that DOL 
was moving forward with the rule to update the income threshold 
for overtime protections for salaried workers and that the rule 
was sent to OMB just this week.
    In fact, many of my colleagues here today have joined me in 
sending a letter urging OMB to act promptly to review the rule 
and finalize it so we can begin helping millions of workers as 
soon as possible.
    As you know, Americans are working longer hours and are 
more productive, yet their wages are largely flat. It is 
crucial that they get a fair day's pay for a hard day's work. 
In 1975, 62 percent of salaried were eligible for overtime, now 
only eight percent of workers are eligible. Change is long 
overdue. Can you walk us through some of the repercussions of 
this new rule? In addition to raising wages for those workers 
who are newly eligible for overtime, won't it help to 
redistribute hours to those who are underemployed?
    Secretary Perez. Well, again, I cannot get too specific on 
the details because we are in the rulemaking process, but the 
President directed us to modernize the overtime rule because, 
as I said before, overtime stands for the proposition that if 
you work extra, you should be paid extra. And as a result of 
the things that you correctly pointed out, we would talk to 
people time and time again who were working 60, 70 hours a week 
making $25-, $30,000 a year. So we ended up again doing a 
period of informal outreach that lasted roughly a year followed 
by the formal notice and comment process, got about 300,000 
comments, and have been carefully reviewing those and, again, 
there is a big discussion about stagnant wages in this country. 
And when I was growing up in Buffalo, New York, if my parents, 
friends of mine if their parents were a manager, that meant 
they were in the middle class and there are a lot of folks who 
are managers doing important work who are, frankly, making the 
minimum wage and I do not think that is fair.
    Mr. Takano. Well, in a nutshell this rule is about fair 
wages, but also work-life balance. Mr. Secretary, there has 
been a lot of discussion about the proposed rule's impact on 
job creation. The Department has updated the salary level seven 
times since the Fair Labor Standards Act became law in 1938. 
Can you talk generally about how industry has complied with 
these adjustments? Is there a history of significant job loss? 
Won't the rule also have a positive impact on the economy 
through increased consumer demand?
    Secretary Perez. Well, what was interesting is there was a 
report by the National Retail Federation in connection with 
this proposal on overtime and one of the things they noted was 
it may actually increase the number of jobs and there is 
actually a simple reason for that. If you are working 60 hours 
a week and you are effectively working 20 of those 60 for free, 
and the overtime rule forces you to pay people now for those 
extra hours they are working, the response of some employers 
may be to hire more workers. And that is the National Retail 
Federation, that was not a study from the Department of Labor. 
So, again, as we move forward here, we are taking care to 
listen to every single perspective and to understand what 
happened the eight previous times and we talked to a lot of 
people who were involved and around after 2004 to say, well, 
what was--how did you adjust to this, how did you adjust to 
that? Because we do care about the doctrine of unintended 
consequences as well as the direct consequences.
    Mr. Takano. Great. Well, for the first time, the 
President's budget is requesting $50 million, the authorized 
amount for the Department's Homeless Veterans Reintegration 
Program, or HVRP. Can you talk about the Department's efforts 
to help eliminate veterans' homelessness and how you hope to 
use the request of the additional 12 million for the HVRP 
program?
    Secretary Perez. Well, first of all, I want to thank you 
for you unwavering leadership in this area and to thank 
everyone. This has been a bipartisan issue. I have had the 
privilege of serving as the chair of the inner inter-agency 
task force to eliminate homelessness and our focus on veterans' 
employment, on eliminating veterans' homelessness has yielded 
remarkable dividends and one of the ways we are doing it is by 
making sure we can get people a job and the $50 million that 
you are referring to is going to enable us to serve over 22,000 
veterans through the HVRP program. And the HVRP program has 
been studied, it has been shown to be incredibly successful and 
we want to take it to scale and we want to make sure that every 
single veteran who did so much for us, we got their back when 
they get home.
    Mr. Takano. Thank you, Mr. Secretary, on point here.
    Chairman Kline. Gentleman's time has expired. I need to let 
my colleagues know that I am having to reduce the time to 4 
minutes. The Secretary has a hard stop time at 12:00, so 
please, try to stay within your time limits. And I think, Mr. 
Guthrie, you were the victim of this yesterday so my apologies 
but you are recognized.
    Mr. Guthrie. Always four minutes. Thank you Mr. Secretary. 
Thanks for the comments that you have made earlier about us 
working together on the fiduciary rule when ESOPS were 
involved, and I appreciate that because it has been a good 
professional working relationship, and I will even say that it 
created a friendship as well, so I appreciate that very much. 
And before I get to my questions, I know the issues that are 
really affecting this group of people are not necessarily in 
your department, but I had United Mine Workers in this morning 
and you mentioned the Ozzie and Harriet world and they were 
describing the world that they were in. These guys were older, 
about 10,000 in Kentucky, a lot of them over 75. They did 
retire from the mines and they wanted to talk to me this 
morning and we thought cradle to grave healthcare that they 
were promised and what is going on with administration, what is 
going with the economy, but the administration as well, and not 
necessarily in your department. But I told them I was meeting 
with you for a few minutes and just wanted to bring up our 
United Mine Workers and what has happened to the coal industry 
because without the existing industries paying into their 
pension fund, it is--as they are going out of business, it has 
been difficult for them.
    But on ESOPS, I know when we met, we talked about 
unintended consequences and had a great discussion and how 
ESOPS, I know the ones in my district that you met with, and 
just all over the country create wealth for people that work in 
those businesses, but we are concerned that people's retirement 
security is all in one basket. I mean that is a concern as we 
move forward, so we want to make sure that is not compromised 
that ESOPS are moving forward and doing things correctly and 
the oversight is important.
    What I have reported back and not the ESOP that you met 
with but others, just not necessarily in my district is when 
the Department of Labor has gone into the ESOPS and not just 
rare occurrences but more common, that they issued subpoenas 
before they even notify that there has been an investigation 
going on and I am one even here to members of Congress. I have 
talked to chairmen before about subpoena power of the Federal 
Government that we have to be careful with it. When somebody 
receives a subpoena, it is serious ramifications, can we get 
information prior to that step, and so I guess what I asking is 
if that is occurring and it has been brought to my attention 
and I have not seen it directly, would you be willing to review 
the process because I think it would be best if and I know that 
is how you run the Department because I was kind of surprised 
because of the way that we worked together if they need 
information, if ESOP is willing to provide it, that happens 
first. And I am the first one to say if your department or if 
the Congress is not getting the information that they asked 
for, then the subpoena power is there and that it should be 
used, but to begin with that step I think should be reviewed 
and would you be willing to review that and any comments on 
that going forward as we are here together? I know this is 
something you need to look at, but if you have any comments 
now?
    Secretary Perez. Well, I am happy to look into this. I must 
confess, I am not familiar with the specific concern as it is 
related to subpoenas in the ESOP context and I am more than 
willing to get back to you. And what I would love to do is 
folks who have come in just like we did before, there is no 
substitute for getting around the table and listening and 
seeing what the concerns are and then coming up with a pathway 
forward, so I would be more than willing to kind of replicate 
the model we used before and do it again because you helped me 
get smarter and I would like to do that again.
    Mr. Guthrie. Well, my view, too, is that there needs to be 
oversight, but if we can do it mutually working together as 
opposed to the adversarial, but if it gets to that point, then 
you obviously have the right and the power to do so.
    Secretary Perez. We will reach out to you. My team will 
reach out to your staff after today.
    Mr. Guthrie. Absolutely, thank you very much. I yield back, 
Mr. Chairman.
    Chairman Kline. I thank the gentleman. Mr. DeSaulnier 
recognized.
    Mr. DeSaulnier. Mr. Secretary, first, thank you for your 
passion and sincerity to the work that you are involved in and 
also thank you for your relationship with employers. As a 
former small business owner, who, my success in the restaurant 
business was directly related to my employees and how they 
interacted with my clients. I appreciate the fact that you are 
willing to accept that most employers I think want to do the 
right thing and value their relationship with their employees, 
so I wanted to ask you a question about a lot of the changes in 
a relationship between employers and employees, particularly 
with large companies, and that goes to the issue of contracting 
out or a new word that I have learned recently, the fissuring 
of our relationship. So it is been estimated that there are 30 
million such workers in five industries: in the construction 
industry, the hospitality industry, the janitorial, personal 
care, and home healthcare. So clearly this relationship is 
different.
    I know when I was in legislature in California, there were 
calls both by the Chamber of Commerce and obviously the Labor 
Federation, is how do we more clearly delineate who is a 
contract employee and who is not. A predecessor of yours 
recently did an op-ed piece where he suggested--who is now a 
teacher at the University of California Berkley, Secretary 
Rice, said that if you are compensated, 80 percent of your 
compensation comes from one source, that should be the 
definition. And that you can do that administratively right 
now, so could you talk a little bit about the change, maybe 
some of the benefits of these relationships if you see them, 
but also the challenges to make sure that the relationship 
between a contract employee and their actual employer is 
accurate and what that does to the economy potentially as well.
    Secretary Perez. Well, you referenced the fissured 
workplace and, as you know, David Weil, our Wage and Hour 
Administrator, quite literally wrote the book on ``The Fissured 
Workplace''
    Mr. DeSaulnier. I just met with him.
    Secretary Perez. And he told me that he had a wonderful 
visit with you along with my colleague, Sharon Block. And when 
you look at the issues that are confronting us, the fact that 
we have had flat wages relatively speaking and the delinking of 
productivity increases and real wage growth. One, there are 
many factors that explain that, but one of the factors has been 
the fissuring of the workplace. There is an appropriate role 
for contractors in the workplace. We employ contractors in a 
surgical way, other employers do, but there has undeniably been 
abuses of that and we have a very active docket of cases 
involved in what we call misclassification. And we have MOUs 
with 29 States because this is an issue in Utah, it is an issue 
in Arizona, it is an issue in Texas, it is an issue in 
Massachusetts, it is an issue in California, and so we have 
been working hard on that.
    There is a test under current law and David offered some 
guidance on misclassification and that is an issue that is 
relevant to the legacy economy. It is an issue relevant to the 
in demand economy or the on demand economy. It is an issue 
relevant in every context and when people are misclassified, 
they are more vulnerable to injury on the job because they do 
not get workers comp.
    They work overtime and do not get paid over time. They do 
not get the benefits that they are really entitled to, and that 
is why a big focus of our work at the Department of Labor under 
Administrator Weil's leadership has been addressing this and 
understanding that there is an appropriate use for contractors, 
but when there is abuse, we will act. And one of the most 
frequent set of stakeholders who come to us asking for help are 
employers like you because the vast percentage of employers are 
playing by the rules, but they cannot compete if the restaurant 
down the street is paying everyone under the table and is not 
paying workers comp, that is not fair.
    Mr. DeSaulnier. It would be interesting to look at what the 
trend is over time and history. With that, thank you, Mr. 
Secretary, thank you, Mr. Chairman. I yield back.
    Chairman Kline. The gentleman's time has expired. Mr. 
Thompson?
    Mr. Thompson. Chairman, thank you, Mr. Secretary, thank 
you.
    Secretary Perez. Pleasure to be here.
    Mr. Thompson. It is good to have you here. I want to zero 
in on just a follow-up of a piece of legislation that we 
successfully have obviously passed, WIOA, and kind of dovetail 
that a little bit with what I hope will happen with Perkins as 
well. I spent a lot of energy and time and just with the 
partners that are after with WIOA. I spent a lot of time with 
folks who are professionals, individuals across the board, our 
educators, our prevocational sites for individuals living with 
disabilities, certainly vocational training sites. And so as 
co-chair of the Career and Technical Education Caucus here in 
the House, I certainly want to thank you for highlighting the 
importance of skill and workforce training and I agree with 
your sentiment that the passage of WIOA is a tremendous step in 
the right direction.
    As the Department moves through the process of implementing 
the final WIOA regulations, I asked you to consider the future 
importance of aligning WIOA regs with an updated Perkins Act 
which we hope to consider in the coming months in this 
committee. What are your plans to align both of these workforce 
development and education bills?
    And then just a follow-up, how will you ensure that 
individuals with disabilities are given equal opportunity for 
success and growth under both of these acts?
    Secretary Perez. Music to my ears to hear those questions. 
Thank you for your leadership. I can tell you served on a WIB 
because you know this at the local level. One of the major 
benefits of WIOA has been the stove pipe implosion at a State 
and local level and the stove pipe implosion at the Federal 
level. The final regs are a joint venture between DOL and the 
Department of Education. We are working more closely than ever 
and when you mention Perkins, my ears perked up because I am a 
huge believer that we have undervalued career and technical 
education as a Nation to our detriment and the synergies of 
WIOA and Perkins reauthorization I think create a remarkable 
opportunity to address the challenges that you are outlining. 
We need to build--we need to fortify the apprenticeship on ramp 
and the skills superhighway and Perkins is a way to do that.
    We also, to get to your question about people with 
disabilities, WIOA had a provision creating an advisory 
committee on the employment of people with disabilities. I have 
attended at least one of those meetings and we will be 
receiving their final report. One of the things I am most proud 
of in the work I have done in my Federal career and in State 
government is working with employers and others on the 
employment of people with disabilities. We all too frequently 
ignore the first--we focus too much on the first three letters 
of that word and not enough on the last seven, and we have done 
a lot of work with employers in Maryland and elsewhere who--for 
people with disabilities, sometimes transportation is a huge 
issue. There are so many jobs out there that you can do from 
home, telecommuting, and so we have done a lot of work in that 
area. The advisory committee is going to have a series of 
recommendations about how we empower people with disabilities 
because, as you know, the labor force participation rate is too 
low. There are very few people that come to me and say, Tom, I 
want to be a taxpayer. People with disabilities are those 
folks.
    Mr. Thompson. In the few seconds I have left, you know how 
are we watching carefully? I mean there are a lot of folks who 
are in prevocational programs who are--that is very 
appropriate. Multiple disabilities, not really despite--and I 
came out of rehabilitation so I work to try to facilitate 
adaptation, but for some folks--and they get so much 
satisfaction out of that work and I am concerned that we just 
make sure we do not eliminate those opportunities for folks who 
are not ready for competitive employment.
    Secretary Perez. I totally appreciate that view and we have 
heard it from a lot of people.
    Chairman Kline. The gentleman's time has expired. Ms. 
Bonamici?
    Secretary Perez. Thank you so much.
    Chairman Kline. The gentleman's time has expired. Ms. 
Bonamici. Thank you, Mr. Chairman.
    Secretary Perez. Good to see you.
    Ms. Bonamici. Mr. Secretary, welcome back to the Committee.
    Secretary Perez. It is a pleasure.
    Ms. Bonamici. Thank you for your leadership. I know you are 
aware of the steps that have been taken in my home State of 
Oregon for working families, paid sick days, improving the 
retirement system, raising the State minimum wage, and I am 
glad to see that your budget includes many priorities that will 
help working families in Oregon and across the country.
    I want to first follow up on Representative Clark's 
question about paid family leave and appreciate your response 
to her. It is time, past time, that our country joined the rest 
of the world in offering family leave. It is my understanding 
that now approximately 25 percent of women in this country 
return to work after two weeks of giving birth because they 
have no paid leave. So will you address the issue? And I also 
want to mention even places like the country of Estonia has up 
to a year and a half of family leave. We have none unless it is 
offered by private employers. So will you talk a little bit 
about the benefit to business?
    We know that it benefits families and benefits children to 
get that strong start in life, but what about the benefits to 
businesses that are providing paid leave, whether it be through 
recruitment and retention? How are these businesses seen?
    Secretary Perez. It has been an enormous retention 
strategy. Business is--I mean, I want to hire the best and the 
brightest and so my paid leave policy is giving me a 
competitive edge. When I travel internationally I ask the 
question of everyone. We organize meetings through the chambers 
in various countries. We have been to Australia, England, 
Germany, Switzerland, Canada, and I ask the following question: 
if you were king or queen for a day, would you diminish or 
repeal your paid leave laws? I usually get a one- or a two-word 
answer. The one-word answer is no and the two-word answer, for 
benefit of this committee, is heck no.
    Ms. Bonamici. Probably hard to find a country that does not 
have it.
    Secretary Perez. And the reason is because it is part of 
their competitive advantage and Canada, what they do when 
someone is off on leave is they hire a contractor and they kick 
the tires on that employee so that they can see whether that is 
someone that they may want to hire instead of using the resume, 
which is a far more imperfect tool to grow your workforce. So 
this is the only nation where it is also a partisan issue.
    I mean Australia is governed by a conservative ruling party 
who won their election on a platform of expanding paid leave.
    Ms. Bonamici. Thank you, Mr. Secretary. I also wanted to 
ask you about adjunct faculty at higher education institutions. 
They typically face low pay, no benefits if any, they lack job 
security, get inadequate institutional support, and in only a 
few States can receive unemployment compensation, even though 
they have no assurance of full-time employment. So what is the 
Department of Labor doing to address this issue and improve the 
working conditions for adjunct faculty?
    Secretary Perez. Sure, we have heard about this issue a 
lot, and I appreciate your continuing interest in this and we 
have spoken to a lot of stakeholders. Our guidance, as you 
know, on eligibility for unemployment benefits is 30 years old 
and a lot has changed in the last 30 years. So, what we have 
been doing is a series of listening sessions to figure out what 
should the 21st century guidance look like, and we have spoken 
to folks in higher ed, we have spoken to folks across the 
spectrum, and, again, we have heard from a lot of people like 
yourself, and we are committed to reaching a workable solution 
in the coming months on this issue.
    Ms. Bonamici. Any preview of what direction that going to--
    Secretary Perez. Well, we are still listening, so I would 
hate to prejudge it because we have heard from a lot of people 
and there still are more people that we need to hear from, and 
I pride myself in making sure I listen to everyone before we 
figure out exactly where to go.
    Ms. Bonamici. Very much appreciate that and look forward to 
working with you. I yield back.
    Chairman Kline. The gentlelady yields back. Mr. Allen?
    Mr. Allen. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary.
    Secretary Perez. Good morning, sir.
    Mr. Allen. How are you doing today?
    Secretary Perez. I am well, thank you.
    Mr. Allen. Good, good. You know as a businessman for over 
35 years, in fact, just two years ago I was out in the business 
world, and what I found in economic development the number one 
factor that a company looks at when they look at your area is 
the development of a skilled workforce. We have got 46 million 
people I think at last count who are on some type of government 
assistance, that are, I guess, either underemployed or 
unemployed.
    We have in our education system a number of students who 
drop out of high school and do not enter the workforce. What is 
your plan to deal with that? And you have, like you said, 10 
months left, what would you do to change the current 
circumstances that we are faced with in trying to get folks in 
the workforce?
    Secretary Perez. Sure, let me give you a couple of examples 
of things that we are doing. One of the reasons I am such a big 
fan of apprenticeship is because apprenticeship provides 
remarkable opportunities to bring people who have been out of 
the workforce into the workforce. Not only in any job, but a 
job with a career ladder. So, for instance, South Carolina has 
a tax credit for employers who hire apprentices and they have 
been taking folks who are on TANF and CVS, who has been a 
strong partner of ours on this. They are taking folks on TANF, 
they are putting them into a pharmacy tech apprenticeship 
program, and they are on a career pathway to a middle class 
job. And so those are examples of things that we are doing 
using the tools in the Workforce Investment Act and now with 
WIOA, we have more tools to do that because I firmly believe 
and it is a fundamental tenet of workforce development that 
every person is gifted and talented and there is no such thing 
as a spare American, and that is why we have done so much work 
connecting folks, breaking down stove pipes so we work closer 
with the TANF folks than ever before. We are working closer 
with the Department of Education, as Congressman Thompson was 
talking about, to lift up career and technical education for 
folks. So I am very excited about the work that is being done 
in that area and if you have other ideas about how we can do 
that.
    Mr. Allen. Are we making enough progress though? I mean it 
just seems like we are on hold or something. They are great 
programs, but how--
    Secretary Perez. I mean I look at the unemployment rate 
of--it was 10 percent in 2010, it is 4.9 percent now, and you 
look at--
    Mr. Allen. Participation is the key, I mean--
    Secretary Perez. I'm sorry?
    Mr. Allen. We have people who are not participating in the 
workforce.
    Secretary Perez. Well, actually the labor force 
participation rate last month was at its highest level in over 
a year and that is because people have more confidence now that 
they can get a job.
    Having said that, I want to continue to work with you and 
others because we have had tremendous success linking people 
who have been on various forms of public assistance to career 
pathways, that is for me a labor of love and there is nothing 
better than talking to employers like Andra Rush at Detroit 
Manufacturing Systems, who went from 0 employees to 1,200 
employees. She manufactures the consoles for the Ford F-150 and 
she used the workforce system. She made use of folks who had 
been out of work for two, three years and she was able to take 
it to scale with Match.com helping her out.
    Mr. Allen. I am just about out of time but the number one 
impediment to creating jobs, at least in the small business 
community, is this overreach in the regulatory environment and, 
I mean, I am sure you are aware of that. I mean in other words, 
from the business standpoint, it is very difficult to make 
business decisions when you really do not know what the next 
rule is going to be. And I have to yield back my time, thank 
you.
    Chairman Kline. Gentleman yields back. Ms. Wilson?
    Ms. Wilson. Thank you, Mr. Chair.
    Secretary Perez. Good morning.
    Ms. Wilson. Good morning, Secretary Perez, I thank you for 
being here today.
    Secretary Perez. Pleasure to be here.
    Ms. Wilson. And providing testimony on the President's 
budget request for the Department of Labor. I commend the 
President for putting forth a budget that promotes fair wages, 
safe workplaces, and equal employment opportunities. I hope our 
committee will join DOL in its efforts by passing legislation 
that supports working families in these last 10 months, work 
with the Department rather than against it.
    There are so many great things that the Department is 
doing, but I would just like to touch upon a few. First, I am 
glad that the administration rejected the Bush era proposal 
that would have slashed FECA benefits for injured Federal 
workers who have dependents or who have reached retirement age. 
As you know, in December 2015, I joined Ranking Member Scott, 
Congressman Cummings, and Congressman Connolly in sending a 
letter to the Office of Management and Budget on this issue. I 
commend the administrator's decision to ensure the workers who 
have committed themselves to Federal services are honored by a 
system that does not leave them and their families financially 
worse off than in injury or death.
    As you know, I have introduced the Payroll Fraud Prevention 
Act to combat employee misclassification. In your written 
testimony, you shared a compelling story of how a CEO shifted 
his thinking on the issue of misclassification for the 
betterment of his workers and his company. Can you please share 
that story with us and can you speak to how this year's budget 
will continue to support efforts to combat employee 
misclassification?
    Secretary Perez. Thank you for your leadership on that 
issue and thank you for your question. The issue of worker 
misclassification has been a chronic problem. When I was in 
Maryland, we passed some laws on this and we actually did not 
call it misclassification because I do not like that name; it 
sounds like a clerical error. We called it workplace fraud 
because that is what it was.
    When you call a worker an independent contractor when he or 
she is, in fact, an employee, that is fraudulent and we have 
seen it time and time again. And again, as I mentioned, the 
drywall example that you are referring to was a case that we 
investigated in Arizona and Utah, and you had construction 
workers who were employees on a Friday and then were told 
congratulations on Monday, you are now employee partners. It 
sounds good, but it is too good to be true and that is because 
they wanted to lower their costs and the good news is we were 
able to settle that case and we worked with State governments 
in Utah and Arizona. And I point that out because this is not a 
partisan issue. Misclassification is in every State in the 
country and it hurts workers and businesses who play by the 
rules alike.
    Ms. Wilson. Thank you.
    Secretary Perez. And by the way, the employer in the 
Arizona case, the postscript to this has been that he 
participated in a future of work conference that we had back in 
December at the Department of Labor and he has become one of 
our strongest supporters in this issue that you are talking 
about, so I really appreciate his leadership.
    Ms. Wilson. Well, I just want to touch on silica before we 
run out of time. How is DOL planning to work with OMB to 
finalize this lifesaving rule that has been in the books since 
1974?
    Secretary Perez. Well, I will tell you, when you walk into 
work in the morning, you have a right to be coming home safe 
and sound and it should not be killing you. And silica, we have 
known about the dangers of silica for 80 years and we have been 
working with every stakeholder involved on this issue. And the 
proposed final rule is at OMB now and we hope to bring it to 
conclusion in the very near future.
    Chairman Kline. The gentlelady's time has expired and more 
bad news for my colleagues. I am reducing the time to three 
minutes as we are rapidly approaching the 12:00 hour. Mr. 
Byrne, you are recognized.
    Mr. Byrne. Thank you, Mr. Chairman.
    Secretary Perez. Morning sir.
    Mr. Byrne. Mr. Secretary thank you for being here. I would 
like to talk to you today about the Office of Labor Management 
Standards work they are doing on a proposed persuader rule 
under the Labor-Management Reporting and Disclosure Act. Just 
so you know, I am a labor lawyer form South Alabama. We do not 
have very many big employers. Most of our businesses that 
employ people in South Alabama do not have HR departments. They 
may have somebody that is in charge of HR that has got a half a 
dozen things they are responsible for, so when they are in a 
situation where there is a union organizing campaign going on, 
they do not really have anybody in house that they can go to 
help him. They have to go get somebody like me, and there are a 
number of very fine lawyers down in our neck of the woods that 
do that.
    Now, the problem is that up until now, it has been a pretty 
good bright line test. If the lawyers that were given that 
advice weren't actually communicating with employees, we were 
not covered by any sort of a persuader rule, but without a 
bright line test, that is going to put these lawyers in a very 
difficult position. But, more importantly, it puts those 
employers in a difficult position because they do not know what 
the law is and there is no way a small- to medium-sized 
business can know this area of the law because it is so fairly 
granulated, as you know very well.
    The American Bar Association has registered its very strong 
concerns about attorney-client privilege issues here and as a 
lawyer yourself, you know how important that is. Now, here is 
the truth. The unions, when they go on these organizing 
campaigns, I am not saying they do not tell the truth, they are 
selective about which truths they tell. And the only way for an 
employee to get the entire picture is if the employer talks to 
him. And under the labor laws, the employer has a right to talk 
to their employees, but there are rules about what the employer 
can say and do and rules about what the employer cannot say and 
cannot do.
    Now, if the employer cannot turn to a lawyer, that is a 
professional in this area and say tell me what I can say and do 
and also tell me what I cannot say and do, without the fear on 
the lawyer's part that the lawyer is going to be brought under 
this rule, then effectively we have denied legal counsel to the 
employers. And just as importantly, we have denied crucial 
information to the employees before they make that very 
important decision when they go to vote on whether or not they 
want a union. So I want to register that concern to you and in 
the 30 seconds that are left, please give me some information 
that would tell me that you are not going to put us in a 
situation where lawyers are effectively prohibited from giving 
that sort of advice.
    Secretary Perez. There is nothing in the proposed rule that 
is currently under consideration by the way. There is nothing 
in the proposed rule that prohibits the employer from saying 
anything to their client. The LMRDA requires that consultants 
report their agreements that are designed to persuade employees 
directly or indirectly that is not my words, that is what 
Congress passed in 1959 about whether or not to choose to join 
a union. And in 1959, when Congress debated this, the attorney-
client privilege was brought up as a reason not to have the 
word ``indirectly'' in there or something of that nature and 
Congress explicitly rejected that. So this is about 
transparency, this is not about affecting attorney-client 
relationships.
    Mr. Byrne. Secretary, I am out of time, but I would like to 
have a discussion with you away from here because I think you 
and I have a different view of that. I yield back.
    Secretary Perez. Again when we are done with the rule we 
would be happy to--
    Chairman Kline. Thanks for trying to navigate the three 
minutes. Mrs. Davis?
    Mrs. Davis. Thank you, Mr. Chairman, I appreciate your 
dedication. Mr. Secretary, I know you have had a chance to talk 
a lot about workforce training this morning and I wanted to 
just go to the transition between the WIOA and what we 
currently have from the perspective of the workforce centers 
and the fact that they are going to be moving, as I understand 
it, to a more competitive process and who is going to be 
running those centers. Since transition is going to be required 
by at least the beginning of 2017, is there are there plans to 
make certain that the workforce boards are going to be able to 
transition with those competitive operation process 
essentially, which really is probably more complicated than 
they faced in the past?
    Secretary Perez. Sure, well, one of the key provisions of 
WIOA that Congress passed was a requirement to competitively 
bid the one-stop centers so that it can help increase 
accessibility to the centers and the services that they offer, 
and we certainly understand that intent and our regulations, 
our proposed regulations are designed to do that.
    We are also excited about how local areas in States that 
can make use of the flexibility to accomplish this and so we 
have done a lot of outreach in this area. We have gotten a 
number of questions from folks because in some communities, the 
same entity has been operated in the center for some time.
    Mrs. Davis. Right, exactly, I think that is the issue.
    Secretary Perez. And so we are very cognizant of that fact. 
By the same token, we are aware and cognizant and intend to be 
compliant with the direction from Congress that we have 
competitive bidding and that is the process that we find 
ourselves in right now and we have spent a lot of time on this 
issue again, listening and learning from communities to make 
sure we get it right at the end.
    Mrs. Davis. Okay, thank you. So, in fact, those boards 
might even need an extension and that's possible to work with 
them to make sure that--
    Secretary Perez. We look forward--if you have specific 
questions relating to particular circumstances, I would 
simply--we obviously have had a long and open line of 
communication, so please let us know.
    Mrs. Davis. California is well on their way here, but I 
know it can be an issue. And just very quickly, the Bureau of 
Labor Statistics is interested in collecting data which would 
help them understand more the issues that have been talked 
about here in terms of contractor employee relations, 
contingent workers. And I am wondering what we actually can 
learn. What would we like to know about capturing the 
information of these individuals and how might that inform our 
future programs for the American workforce?
    Secretary Perez. We had a summit on the future of work, and 
the nature of work is changing. And one of the primary 
takeaways was we need to make sure we are studying with 
granularity how the workforce is changing, how technology 
affects it, and what we can do as a result to make sure that 
businesses succeed, workers succeed, and communities succeed.
    Chairman Kline. The gentlelady's time has expired. Mr. 
Bishop.
    Mr. Bishop. Thank you, Mr. Secretary, for your testimony 
today.
    Secretary Perez. Good morning.
    Mr. Bishop. Good to have you here this morning. I wanted to 
build on the question that was raised by my colleague, Dr. Roe, 
earlier regarding the fiduciary rule. I know that you have 
received a number of comments during this open comment period. 
It is a proposed rule that has caused great consternation out 
there. I hear on a daily basis many who have raised their 
concerns with me on this issue. And I know that specifically 
you have received a significant number of comments on the 
treatment of the variable annuity products under the proposed 
fiduciary rule and that many of these comments have suggested 
keeping variable annuities within the prior exemption, 
Prohibited Transaction Exemption 84-24, that they and other 
insurance and annuity products have been enjoyed since the 
1970s, this is a significant change of path in this proposed 
rule. If this is not something the Department is considering, 
it is important that the final rule clarify the treatment of 
variable annuities under the best in contract exemption and 
permit the use of commissions and sales of proprietary products 
without imposing unnecessary and burdensome conditions.
    Specifically, I would ask you to inform the committee as to 
what modifications to the best in contract exemption the 
Department is considering in order to provide a clear and 
workable path to make variable annuities available to clients 
when these products would be in the client's best interest.
    Secretary Perez. Sure, during both the informal process 
before we had the formal rulemaking and during the formal 
notice and comment process and the hearings that we held, we 
received a lot of comments on the issues that you raised and I 
can assure that we have taken them seriously. We had a number 
of meetings with various stakeholders, often at the request of 
members of Congress, and we are in the process now of 
finalizing the rules, so I cannot get too detailed, but I can 
certainly assure you that when we reach the end of this 
process, we would be more than willing to explain what the 
proposal was, what changes were made, and why we did what we 
did.
    Mr. Bishop. Quick follow-up, you do recognize that the 
issue is one that has been raised by several individuals, 
several companies, several clients that are impacted by this 
and it is an issue that you are working on?
    Secretary Perez. It is absolutely an issue that we have 
heard about and are working on.
    Mr. Bishop. Thank you.
    Chairman Kline. Gentleman yields back. Mr. Polis?
    Mr. Polis. Thank you, Mr. Chairman, welcome, Mr. 
Secretary--
    Secretary Perez. Good morning. Good to see you.
    Mr. Polis. - to our Committee. Great to see you, always a 
pleasure. As you know, part of our bipartisan budget deal 
required a catch up for civil monetary penalties to keep up 
with inflation for OSHA penalties, for instance which have not 
been increased since 1990 and have actually been carved out for 
annual adjustment.
    The Fair Labor Standards Act has a maximum civil monetary 
penalty of $1,100 for each willful and repeated violation of, 
for instance, the minimum wage or overtime pay provisions of 
the law and, of course, stolen wages can also be recouped, but 
the punitive aspect is limited to that $1,100, which often is 
completely insufficient as a deterrent. And what I wanted to 
ask you, to ensure that there is a real deterrent to willful or 
repeated wage theft or failure to pay overtime, what types of 
additional penalties, such as criminal penalties or increased 
civil penalties, could we look at to ensure that violations of 
our wage and hour laws are not simply a cost of doing business?
    Secretary Perez. Sure. Two dimensions to the question. 
Number one, the provision as part of the bipartisan budget act 
directed us to issue an interim final rule by July 1st to 
implement the inflation adjustments, and I want to assure you 
that we are on track to get that done. The second dimension of 
your question, though, I think goes beyond that and reflects 
the fact that in a lot of the work that we do defines our 
amount in the opinion of many businesses that I have spoken to, 
their cost of doing business and, as a result, they do not have 
the adequate deterrent. We just finished the prosecution of the 
aftermath of the Upper Big Branch disaster where over two dozen 
people died and the penalties just do not fit the crime and 
that is unfortunate. And that not only hurts the victims and 
their families, but it hurts employers who play by the rules, 
so I certainly look forward to working with you in that and 
there is bipartisan support. I have had a lot of conversations 
with a lot of people about that issue.
    Mr. Polis. Great. And finally, I wanted to address within 
the Workforce Investment Act, the Department of Labor's efforts 
to ensure that immigrants, including limited English-proficient 
job seekers and workers are able to acquire English and the 
skills they need to reach their full potential. I want to know 
how you are working with States to ensure that the needs of 
English language learners, immigrants, generally called 
literacy programs are being met.
    Secretary Perez. I first started working on this issue when 
I was a local elected official in county government and then I 
led this issue when I was in State government and now I have 
the privilege of working on this issue here. And WIOA, has 
imploded stovepipes between the Department of Education and the 
Department of Labor, in remarkable ways that will have, among 
other things, the benefit of helping English language learners 
not only get the English language instruction, but then get 
access to the job opportunities. And it is a targeted 
population with barriers so that we can focus on them. And I 
very much appreciate that question because it is very near and 
dear to my heart.
    Mr. Polis. Great.
    Chairman Kline. The gentleman's time has expired. I think 
we are going to make it here with five minutes to spare, 
depends on the ranking member. Mr. Scott, you are recognized 
for any closing remarks.
    Mr. Scott. Thank you, Mr. Chairman.
    Chairman Kline. No pressure.
    Mr. Scott. No pressure. Mr. Secretary, yesterday I met with 
my local Workforce Development Board and they expressed 
gratitude for the outreach efforts by the Department in the WIA 
implementation, so I want to thank you for those efforts and 
making sure that WIA implementation goes the best way possible. 
One of the problems we have had with this hearing, Mr. 
Chairman, is that a lot of the issues we are discussing are in 
the middle of rulemaking, and so the Secretary is restrained on 
what he can say and we are restrained on what we know because 
we have not seen the proposed rules, but we do have a proposed 
rule on overtime that has been discussed and we heard about the 
option that some people want to take to work 80 hours a week. 
We decided decades ago that if you worked more than 40 hours a 
week, the principle is that you ought to get time and a half 
for the hours after 40, but the way inflation has worked, most 
of the workers who work more than 40 hours a week who are 
technically on salary, but would have been covered under the 
old regulations, yet not only do not get time and a half, they 
do not get anything. So if you are paying for daycare while you 
are working, you have to pay for the daycare and you are 
getting absolutely no compensation for those extra hours. Mr. 
Chairman, we are looking forward to that regulation so that the 
same portion of workers that were getting overtime when we 
passed the rule to begin with still get it.
    I want to thank you for your work on silica and beryllium 
and look forward to those regulations taking place, and for 
your efforts to address wage theft starting with the 
requirement that Federal contractors and the employees of 
Federal contractors get a pay stub so that they can ascertain 
whether or not they are getting ripped off. So, Mr. Chairman, I 
want to congratulate the Secretary for 72 consecutive months of 
job growth. That is a record by far and I think the last two 
years he has been setting a new record every month. We still 
have a long way to go, but at least clearly we are going in the 
right direction, so thank you, Mr. Chairman.
    Chairman Kline. I thank the gentleman. Mr. Secretary, this 
conversation went pretty much as I think we expected it might. 
You as the ranking member said you have a number of rules that 
are in the rulemaking process and we do not have full 
visibility into that, but we have concerns and those concerns 
were expressed by a number of my colleagues on the fiduciary 
rule, which I know you have heard about almost every waking 
hour because, if you have not, believe me, I have. The joint 
employer, the relationship between franchisors and franchisees, 
there is a lot of concern out there. There is a lot of concern 
and we need to see what that is going to look like.
    The persuader rule that Mr. Byrne, our resident labor 
lawyer here, was talking about seems to me to be a clear 
infringement on the rights of employers, the ability for 
employees to get information, and concerns for those lawyers 
that have to be called in because as Mr. Byrne said, your small 
businesses, they do not have a legal team there. They probably 
do not have an HR department and they need that counsel, so I 
am concerned and I know many are concerned based on the visits 
to my office and the calls and emails.
    And then there is some disagreement over overtime. The 
threshold that we have seen in the proposed rule is I think 
$53,000, which if you are in parts of rural America is an awful 
lot of money, maybe not in New York, but in a lot of places, so 
there are very real concerns, and we are very anxious to look 
into these rules. Maybe magic has occurred from our perspective 
and the rules have not come out to be perfectly reasonable, but 
they do not look like that right now, so our concerns are high. 
We are going to continue to look at this and work with you and 
your staff.
    I was committed to noon; I think I am going to make it by 
30 seconds. I want to thank you for your testimony and your 
active engagement in our questions and answers. There being no 
further business, the meeting stands adjourned.
    Secretary Perez. Thank you.
    [Questions submitted of the record and their responses 
follow:]

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    [Secretary Perez's response to questions submitted for the 
record follow:]

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    [Whereupon, at 11:59 a.m., the Committee was adjourned.]